Distribution Agreement - Curtis Circulation Co., Penthouse International Ltd., Forum International Ltd., Penthouse Photo World Ltd. and Penthouse Poster Press
DISTRIBUTION AGREEMENT
Dated: September 19, 1977
Between CURTIS CIRCULATION COMPANY, 21 Henderson Drive, West Caldwell,
New Jersey 07006 (hereinafter called "CURTIS"); PENTHOUSE INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, N.Y.10022, and FORUM INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, N.Y.10022, PENTHOUSE PHOTO WORLD,
LIMITED, 909 Third Avenue, New York, N.Y.10022; PENTHOUSE POSTER PRESS,
LIMITED, 909 Third Avenue, New York, N.Y.10022 (hereinafter collectively
called "PUBLISHER").
The parties hereto hereby agree as follows:
1. Exclusive Distributor. CURTIS shall, subject to the terms,
conditions and limitations contained herein, be the exclusive distributor, for
the respective Distribution Territories (the "Territory") specified in
Attachment A, of all publications (except for editions published in the United
Kingdom) published by PUBLISHER, its subsidiaries or affiliates, at any time
during the term of this Agreement (herein-after collectively called
"PUBLICATIONS"), and (A) CURTIS will not knowingly sell any publications to
anyone for resale outside the Territory, (B) PUBLISHER will not knowingly sell
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any PUBLICATIONS to anyone outside the Territory for resale within the
Territory, and (C) CURTIS shall not be distributor for, or have any rights in or
with respect to: (i) subscription, reader mail order, promotion or back issue
sales, at any time, or (ii) sales of any PUBLICATIONS by PUBLISHER after more
than 180 days after the off-sale date of such PUBLICATION. Nothing contained
herein shall impose any obligations (A) on CURTIS, in the case of resale outside
the Territory of PUBLICATIONS purchased by others on the representation that
they will be resold in the Territory, or (B) on PUBLISHER, in the case of resale
in the Territory of PUBLICATIONS purchased by others on the representation that
they will be resold outside of the Territory. PUBLISHER shall, notwithstanding
the foregoing, have the right to sell, directly or through other distributors,
wholesalers, retailers, dealers or other customers, PUBLICATIONS in any market
(whether such market is a geographical area or a type of outlet, or otherwise)
not being serviced by CURTIS or its wholesalers and to which CURTIS, after
reasonable notice, does not affect such service.
2. Frequency: On-sale, Off-sale dates. (A) The PUBLICATIONS to be
distributed under this Agreement, the initial issue thereof to be so distributed
and the frequency of publication are stated in Attachment B to this contract.
(B) PUBLISHER will supply to CURTIS a schedule of shipping and on-sale
dates for each issue of the PUBLICATIONS within six (6) months but not later
than three (3) months in
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advance of the on-sale date and at such time thereafter as requested, provided
that if PUBLISHER desires to change the frequency of publishing issues of any
PUBLICATION, it shall, if possible, notify CURTIS at least thirty (30) days
before the proposed shipping date of any affected issue. For the purposes of
this Agreement "on-sale" and "off-sale" dates shall mean the dates PUBLISHER
selects for such actions with respect to retail sale of PUBLICATIONS in the
United States and Canada. PUBLISHER shall have the right to change on-sale
dates, and shall give CURTIS reasonable notice thereof.
3. Representations of Publisher. PUBLISHER (jointly and severally)
warrants and represents to CURTIS the following:
(A) Except as set forth in Attachment C, PUBLISHER is the owner of (i)
each of the titles to the PUBLICATIONS covered by this Distribution Agreement;
(ii) the logos and/or (iii) trademarks, tradenames, and tradestyles of such
PUBLICATIONS and that there presently are not, to the best of PUBLISHER's
knowledge, any liens or encumbrances on such titles, logos, trademarks,
tradenames and tradestyles, which affect the implementation of this Agreement;
(B) Subject to any circumstances beyond their control, PUBLISHER has
and shall have the ability and authority to deliver to CURTIS without liens or
encumbrances sufficient
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copies of each issue of the PUBLICATIONS covered by this Agreement to comply
with the terms contained herein. PUBLISHER shall be responsible for, and shall
be the sole parry with the right to effect, the removal of any liens, claims or
encumbrances asserted against the physical property of the PUBLICATIONS
themselves, and, upon passage of title to the PUBLICATIONS, they shall be free
of any liens, claims or other encumbrances;
(C) PUBLISHER has the full right, power and authority to enter into
this Agreement and neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement shall constiture
or result in a breach of any agreement to which the PUBLISHER is a party;
(D) That upon completion and delivery of each issue of each PUBLICATION
covered by this Agreement, PUBLISHER will own or control all rights of
whatsoever kind and character in and to: (i) the title of such PUBLICATION; (ii)
its logo; (iii) trademark; and (iv) copyright for each issue as a whole;
(E) Subject to circumstances beyond its control, that upon completion
and delivery of each issue of the PUBLICATIONS covered by this Agreement, to the
best of its knowledge and belief, nothing contained in each of such issues will
be grounds for a permanent order in the United States or Canada
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either to prevent distribution thereof or for an action or from damages by
reason of the fact that the material contained therein is libelous, defamatory,
an invasion of any rights of privacy, a violation of any copyright or trademark,
tradename or tradestyles, or other personal or property rights.
(F) PUBLISHER does not intend to publish any PUBLICATION the
distribution of which could be prevented on the grounds that it is obscene, and
PUBLISHER will not knowingly produce any PUBLICATION the distribution of which
could be prosecuted in any of its ten (10) major market areas on the grounds
that it is obscene; however, the parties recognize that under current law the
question of whether a publication is obscene may be subject to a myriad and
varying interpretation differing depending on the locality where the PUBLICATION
is sold.
4. Representations by CURTIS. CURTIS represents to PUBLISHER the
following:
(A) CURTIS is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with all corporate power
to enter into this Agreement and carry out the terms hereof;
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(B) This Agreement has been duly authorized, executed and delivered by
its duly authorized officers and constitutes its valid and binding obligation
enforceable in accordance with its terms;
(C) The execution and delivery of this Agreement will not result in any
violation of any term of its charter or by-laws or of any mortgage, lease,
contract, agreement, instrument, judgment, decree, order, license, permit,
franchise, statute, rule or regulation applicable to it or in the creation of
any mortgage, pledge, lien, security interest, encumbrance or charge upon any of
its properties or assets; and
(D) There is no suit, action, proceeding or investigation pending or,
to the best of its knowledge, threatened (or any basis therefor) which might
result in any material adverse change in the business, operations, affairs or
conditions of CURTIS or in any material impairment of the right or ability of
CURTIS to carry on its business substantially as now conducted or as presently
proposed to be conducted or in any material liability of CURTIS or which
questions the validity of this Agreement or of any action taken
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or to be taken in connection with the transactions contemplated hereby, other
than actions in which CURTIS and PUBLISHER are both defendants.
5. Colophon, etc. The colophon of the Curtis Circulation Company shall
be printed on the cover of each magazine distributed by CURTIS hereunder. The
PUBLICATIONS code number assigned by CURTIS shall also appear on each cover.
6. Title to and Sale of PUBLICATIONS. (A) Subject to Section 6(C),
title to all copies of each issue of each PUBLICATION included in the Draw (as
below defined) shall pass upon payment by CURTIS with respect to such issue of
the First Installment as provided in Clause (A) of Section 8. The price of each
issue shall be calculated in accordance with Section 7 and paid in accordance
with Section 8.
(B) As used herein, the term "Draw" shall mean the number of copies
printed for newsstand distribution by PUBLISHER and shipped by PUBLISHER. The
PUBLISHER shall determine the print order and the Draw and CURTIS shall allocate
to its wholesalers all copies included in the Draw of each issue.
(C) Notwithstanding anything contained herein, if, with respect to any
issue of any PUBLICATION, payment for such issue shall not be made by CURTIS on
the on-sale
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date of such PUBLICATION, then title to the copies of such issue of such
PUBLICATION shall not pass and PUBLISHER shall have the right to sell such issue
of such PUBLICATION in its sole discretion, directly or through agent or other
distributors, and, if it chooses to sell to persons who, but for the failure of
CURTIS to make such payment, would have been wholesalers of CURTIS, CURTIS
shall, if requested by PUBLISHER, make such sales as agent for PUBLISHER and, in
such instance, the proceeds of such sales shall be held by CURTIS as agent for
PUBLISHER separate from and not comingled with its other funds and shall be
promptly remitted to PUBLISHER upon receipt. CURTIS has delivered to Messrs.
Eaton, Van Winkle, Greenspoon & Grutman, counsel to PUBLISHER, a letter in the
form attached hereto as Attachment H, addressed to all of its wholesalers and
informing them that the PUBLICATIONS being sold are being sold by PUBLISHER and
not by CURTIS and directing them to make payment with respect thereto directly
to PUBLISHER and not to CURTIS. Such letter shall be held in escrow by such
counsel and shall be delivered to PUBLISHER only upon receipt by such counsel of
a letter from PUBLISHER stating that PUBLISHER did not receive payment for such
issues as herein provided and further stating that CURTIS has not delivered to
PUBLISHER an unconditional irrevocable sight letter of credit against which
PUBLISHER
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may draw an amount at least equal to the amount of the payment due with respect
to such PUBLICATION on the on-sale date. CURTIS hereby authorizes PUBLISHER upon
receipt of such letter from such escrow agent, to distribute copies thereof to
each wholesaler of CURTIS and to collect and sue for all amounts due and owing
from such customers with respect to such issue of the PUBLICATION. PUBLISHER
shall not distribute copies of such letter to any wholesaler, if prior to the
distribution thereof, it shall have received from CURTIS the payment due on the
on-sale date of such PUBLICATION from CURTIS. If PUBLISHER shall receive such
letter out of escrow, it shall notify CURTIS and CURTIS shall have the right, by
notice given within 30 days thereafter, to terminate this Agreement upon 30 days
written notice to PUBLISHER. Nothing contained herein shall relieve CURTIS of
its obligations, which is absolute and unconditional, to make the payments
required to be made hereunder when and as required by the terms hereof.
7. Price for PUBLICATIONS. (A) The price for all copies of each issue
of any PUBLICATION shall be an amount determined by multiplying (a) the number
of copies of such issue included in the Draw (other than copies sold by
PUBLISHER to others in accordance with the provisions of Section 14) minus the
number of Returns (as below defined)
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by (b) the suggested retail price of such PUBLICATION in U.S. Dollars (the
"cover price") minus the sum of (x) the Discount (as below defined) plus (y) the
Distribution Fee specified in Attachment D. hereto; to wit, the price for each
issue shall be determined by the formula (a) (b - [x + y]).
As used herein the following terms have the following respective
meanings:
Returns: All copies of the issue of any PUBLICATION returned or
destroyed, as evidenced by (a) whole copies returned but only when specifically
requested by PUBLISHER, (b) front covers, (c) headings, (d) CURTIS'
certifications of wholesaler's returns, and (e) wholesalers' affidavits, but
only if such copies are returned or destroyed, and such evidence received by
CURTIS within 180 days after the off-sale date of such issue.
Discount: Forty (40%) percent of the cover price of the PUBLICATION,
provided that PUBLISHER shall have the right, at any time or from time to time,
to change the Discount on any or all PUBLICATIONS, by written notice to CURTIS
given sixty (60) days prior to the on-sale date of such PUBLICATION, in which
case the Discount for all subsequent issues of such PUBLICATIONS shall be the
Discount specified in such notice. Upon receipt of any notice from PUBLISHER
changing the Discount, CURTIS shall have the right
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to terminate this Agreement by giving notice to PUBLISHER within thirty (30)
days after CURTIS' receipt of such notice changing the Discount. Failing to give
such notice, the Discount specified in PUBLISHER's notice to CURTIS shall be the
Discount.
(B) CURTIS shall make no charge for servicing Returns. PUBLISHER shall
have the right to verify and inspect all the books and records of CURTIS which
in any way relate to its dealings with PUBLICATIONS concerning Returns (if and
where available). Attached as Exhibit G is a list of U.S. and Canadian
wholesaler's presently having certification or affidavit privileges; no
additional U.S. and Canadian wholesalers shall be given such privilege without
PUBLISHER's approval if it previously had such privilege and it was revoked,
altered or cancelled for any reason. The parties understand that all overseas
wholesalers have affidavit privileges. CURTIS agrees to alter or revoke the
wholesalers' affidavit privilege of any wholesaler upon receipt of a request of
PUBLISHER stating that PUBLISHER has information suggesting abuse of such
privilege. Upon receipt of such request, CURTIS shall forthwith notify such
wholesaler of such revocation. Such request for revocation will be effective ten
(10) days after receipt by wholesaler, provided, that that wholesaler and CURTIS
shall receive credit for
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copies destroyed prior to such receipt. Should PUBLISHER require whole copy
returns, notice of the quantities and full return address must be supplied to
CURTIS, if possible, at least fifteen (15) days prior to off-sale date. CURTIS
will use its best efforts to comply with PUBLISHER's request for whole copy
returns, for which PUBLISHER shall pay to CURTIS an amount agreed upon by
PUBLISHER not exceeding the charge made by the wholesaler (or other CURTIS
customers), and pay all reasonable freight, shipping and handling charges
incurred by CURTIS (or CURTIS' agents) in connection there-with. PUBLISHER and
CURTIS shall keep all returned whole copies over which they have control,
respectively, from entering the stream of commerce for at least one hundred and
eighty (180) days after off-sale date; except reasonable promotional activities
or sales by PUBLISHER to fulfill subscription and mail order requests, or such
other sale as mutually agreed and such foreign shipments as are presently being
handled to the areas of New Zealand, Australia and Belgium as well as other
sales as may be agreed upon in the future or other sales permitted to PUBLISHER
in accordance with Section 1.
8. Payment, etc. The payment by CURTIS to PUBLISHER for each issue of
each PUBLICATION shall be made as follows:
Subject to the provisions of Attachment D relating to payment for new
PUBLICATIONS.
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(A) On the on-sale date of each PUBLICATION, CURTIS shall pay PUBLISHER
an amount (the "First Instalment") equal to the sum of
(i) for the Eligible Draw (as below defined), 100% of
the Eligible Draw, multiplied by the Percentage (as below defined),
multiplied by an amount equal to the cover price minus the sum of (a)
the Discount plus (b) the Distribution Fee specified in Attachment D
hereto, and
(ii) for all copies in excess of the Eligible Draw,
an amount to be reasonably agreed upon by PUBLISHER and CURTIS based
upon an estimate of sales.
(B) On the earlier of (a) 60 days after the off-sale date, or (b) 90
days after the on-sale date, CURTIS shall pay PUBLISHER the excess, if any, of
an amount which would be the purchase price for such issue (calculated in
accordance with Section 7), if the sales and Returns for such issue were as
reported in the Flash Report and Return Flow Report of CURTIS referred to in
Section 12(D) over the amount paid pursuant to clause (A) of this Section 8.
(C) In final settlement, 180 days after the off-sale date, CURTIS shall
pay PUBLISHER the excess, if any of the purchase price for such issue
(calculated in accord-
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ance with Section 7) over the amounts previously paid pursuant to clause (A) and
(B) of this Section 8.
As used herein, the following terms shall have the following respective
meanings:
Eligible Draw: With respect to any issue of any PUBLICATION the Draw of
such PUBLICATION but in no event more than 120% (140% of the first 3 issues of a
new PUBLICATION) of the Eligible Draw of the immediately preceding issue of such
PUBLICATION.
Percentage: With respect to any issue of any PUBLICATION an amount
determined by adding (a) that percentage of the Draw of the immediately
preceding issue which was sold by retailers, as determined by CURTIS' spot check
referred to in Section 12(D), plus (b) that percentage of the Draw of the issue
immediately preceding the issue referred to in clause (a) which was sold by
retailers, as determined by CURTIS' spot check referred to in Section 12(D),
plus (c) that percentage of the Draw of the issue immediately preceding the
issue referred to in clause (b) that was sold by retailers, as determined by
CURTIS' Flash Report and Return Flow Report referred to in Section 12(D), and
dividing the result by 3.
On the date each payment is to be made hereunder, CURTIS shall deliver
to PUBLISHER a statement in writing setting forth the amount of such payment and
showing reason-
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able detail the calculations used in arriving at such payment and the amounts
debited and credited to each party. Any payment by CURTIS pursuant to this
Section in excess of the amount required to be paid at the time shall be deemed
an over-payment hereunder.
All payments and calculations by CURTIS to PUBLISHER hereunder shall be
made in lawful money of the United States, provided that at final settlement
CURTIS shall pay PUBLISHER, for all copies sold in Canada, in United States
funds based upon CURTIS' bank exchange rates at the time of payment.
9. Shipment of PUBLICATIONS. PUBLISHER shall ship the PUBLICATIONS to
locations specified by CURTIS who shall, with respect to each issue of each
PUBLICATION, specify locations for shipment of the entire Draw, provided that
PUBLISHER shall have no obligation to ship to any dealer or retailer other than
those approved in writing by PUBLISHER.
Individual shipments to wholesalers (and other CURTIS customers) shall
be specified on a galley which CURTIS shall supply to the PUBLISHER sufficiently
in advance so that shipments can be prepared and shipped to arrive at
wholesalers' (and other CURTIS customers') warehouses approximately ten (10)
days prior to PUBLICATIONS' on-sale dates. Any reasonable cost incurred for
reshipping copies at PUBLISHER's request will be borne by PUBLISHER.
PUBLISHER shall bear the risk of loss of all copies
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of PUBLICATIONS while in transit to the locations specified by CURTIS as
aforesaid, but PUBLISHER shall not bear the risk of loss on and after arrival.
PUBLISHER hereby authorizes CURTIS to adjust and/or settle all claims made by
any of its wholesalers for delivery shortages or damages to copies of the
issues of the PUBLICATIONS and agrees to pay to CURTIS for all such shortgages
and damages allowances reasonably granted by CURTIS to its wholesalers, provided
that PUBLISHER shall not be obligated to pay CUTIS any amount in excess of the
amount allowed by CURTIS to its wholesalers. CURTIS shall obtain such
documentation as PUBLISHER's insurance company, printer or carrier shall
reasonably request, and take all action necessary or appropriate to enable
PUBLISHER to make reports and claims. Furthermore, CURTIS shall provide
PUBLISHER a written explanation, in reasonable detail, of such allowances.
CURTIS will use its best efforts to limit the returns from wholesalers to an
absolute minimum.
10. Payments by PUBLISHER. In addition to payments to be made by
PUBLISHER pursuant to Sections 7(B) (relating to Returns), 9 (relating to
reshipment and claims of wholesalers), 13 (relating to the Retail Display
Allowance Program) and 16 (relating to indemnification), PUBLISHER shall
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(a) be responsible for reasonable printing, packaging,
shipping and traffic costs, imports and other duties incurred to ship
copies of the PUBLICATIONS to all customers of CURTIS located
throughout the world, provided that PUBLISHER shall have no obligation
to ship PUBLICATIONS to any location outside of the United States or
Canada unless CURTIS (or its wholesalers) agrees to pay, or reimburse
PUBLISHER for, the shipping costs thereof; and
(b) pay to CURTIS an amount shown on Attachment E hereto for
each copy of the PUBLICATION sold (other than copies sold by PUBLISHER
to others in accordance with the provisions of Section 14 and other
than Returns) in the wholesale areas designated on such Attachment and
such other areas as agreed upon from time to time, provided that the
parties hereto may, by mutual agreement, change the allowances or the
markets listed in such Attachment.
PUBLISHER also agrees to accept Returns after the date of final
settlement referred to in clause (C) of Section 8 but only if (a) such Returns
are made within 90 days after the date referred to therein and (b) are from
reship or for-
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eign wholesalers or result from shipments which have been lost in transit and
reasonable proof thereof presented to PUBLISHER.
All such costs, expenses and charges for which PUBLISHER is responsible
under the terms of this Agreement, and all other costs, expenses and charges
reasonably incurred by CURTIS on behalf of PUBLISHER and at PUBLISHER's request,
shall be paid by PUBLISHER to CURTIS within thirty (30) days after written
notification by CURTIS, or if not paid in such thirty (30) days, at the option
of CURTIS may be deducted from the next subsequent payment due PUBLISHER on any
issue of any PUBLICATION distributed hereunder.
11. Overpayments. If for any reason any party makes an over-advance or
over-payment hereunder, such over-advance or over-payment, at the option of the
party which makes the same, shall, if not paid within thirty (30) days of
notification, (a) be deducted by the party which made the same, from any
subsequent advances or payments due the other party or (b) be paid to the party
which made the same within thirty (30) days after demand for payment. In any
event, any and all such over-advances and over-payments shall promptly be paid
upon termination of this Agreement pursuant to the terms hereof.
12. CURTIS' Duties. (A) CURTIS represents and
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warrants that it is oneof the leading distributors of periodicals in the world
and agrees during the life of this Agreement to use its best efforts, subject to
circumstances beyond its control, to remain as such.
(B) CURTIS agrees to use its best efforts to maximize the circulation
and sales of each PUBLICATION. Without limiting the generality of the foregoing,
CURTIS further agrees to use its best efforts in working towards PUBLISHER's and
CURTIS' goal of selling to the ultimate consumer seventy-five (75%) percent of
the Draw of each issue of Penthouse Magazine. CURTIS agrees to operate as
distributor so as to enhance the good will and reputation of the PUBLISHER.
(C) CURTIS shall not materially change its present methods of
marketing, namely, through wholesalers and retail distributors, or materially
reduce its sales organization without the prior written consent of PUBLISHER. In
the event CURTIS undertakes any such action and such action has adversely
affected the sale of the PUBLICATIONS subject to this Agreement, the fact of
such change shall be a material breach of this Agreement and shall entitle
PUBLISHER to terminate this Agreement forthwith.
(D) CURTIS shall provide PUBLISHER with (a) an estimate of final
aggregate net sales of each issue of each PUBLICATION based upon a spot check of
a representative
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number of retailers in wholesale areas selected by CURTIS within eleven (11) and
eighteen (18) days following the on-sale dates for each such issue of each
PUBLICATION; (b) an estimate of such final aggregate net sales based on the
Flash Report and Return Flow Report of CURTIS within sixty (60) days following
the off-sale dates of each issue; and (c) an estimate of final aggregate net
sales of each issue based upon figures received not later than ninety (90) days
following the off-sale dates of each issue.
(E) At no cost to PUBLISHER, CURTIS shall give appropriate space
commensurate with the volume of sales of the PUBLICATIONS as compared to other
publications distributed by CURTIS in its house magazine and/or bulletins for
the promotion of the PUBLICATIONS. CURTIS shall include the PUBLICATIONS on all
price lists, circular or other bulletins of a general nature and give them as
much prominence as any other periodical.
If, in the course of its business as a distributor of periodicals,
CURTIS should give any advertising, special display, promotional allowance,
quarterly discounts or special rates with respect to any other periodical, it
will give them to PUBLISHER with respect to the periodicals, if PUBLISHER so
desires, on the same basis.
13. Retail Display Allowance Program. The PUBLISHER has established a
Retail Display Allowance Program
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(the "Retail Display Allowance Program"), a copy of which is attached hereto as
Attachment F. PUBLISHER may, at its sole option, alter, amend, cancel or
terminate the Retail Display Allowance Program, and shall give CURTIS notice
there-of. PUBLISHER hereby designates and authorizes CURTIS, as its agent, to
offer a Retail Display Allowance Program to any retailer which engages in the
sale of PUBLICATIONS and undertakes to comply with the Retail Display Allowance
Program approved in writing by the PUBLISHER from time to time. CURTIS will, to
the best of its ability, police the Retail Display Allowance Program and inform
PUBLISHER of any non-compliance with the Retail Display Allowance Program known
to it and will take such actions in respect thereof as it shall be instructed by
PUBLISHER.
CURTIS shall perform the work of receiving, collating and auditing
information from retail magazine dealers and issuing payments as agent for and
on behalf of PUBLISHER to them for amounts due to them under the Retail Display
Allowance Program conducted by the PUBLISHER; no payments made by CURTIS to
retail magazine dealers hereunder and reimbursements made to CURTIS by PUBLISHER
whether by deductions or otherwise shall prevent a claim by PUBLISHER against
retailers for the return of Retail Display Allowance Program payments not made
in accordance with the foregoing or against CURTIS for its negligence in
connection with its services as agent pursuant to this Section.
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Upon the Retail Display Allowance Program payment having been paid by
CURTIS to the retailer, CURTIS shall send a written invoice to the PUBLISHER
containing the full details and audited calculations in relation thereto and
PUBLISHER shall pay the same to CURTIS.
The actual direct pro rata costs of administration of the Program shall
be borne by PUBLISHER and billed to it by CURTIS provided that such costs do not
exceed $800 per month.
14. Wholesalers. (A) Should any wholesaler refuse to distribute the
PUBLICATIONS, or any one of them, or should PUBLISHER be dissatisfied, for a
reasonable business reason in the opinion of PUBLISHER, with any wholesaler and
give CURTIS 30 days written notice thereof, PUBLISHER may, after the conclusion
of such 30 day period, unless CURTIS shall have appointed a replacement in
accordance with the provisions of Section 14B, appoint a wholesaler of its
choice for the affected PUBLICATION(S) or, if it should be unable to reach
satisfactory agreement with one willing to take only the affected PUBLICATION,
for all of the PUBLICATIONS, and should CURTIS elect to service such newly
appointed wholesaler, there shall be no change in the terms of this Agreement;
if, however, CURTIS does not service such newly appointed wholesaler, then
PUBLISHER shall have the right in
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such circumstances to distribute copies of PUBLICATIONS in that geographical
area to whomever PUBLISHER shall wish, and in that event will be obliged to pay
a distribution fee to CURTIS for only such distribution as is actually
accomplished in said area by CURTIS.
(B) Should CURTIS at its option decide to terminate shipments to then
existing wholesaler or wholesalers, it shall appoint a replacement or
replacements. If, after two (2) months of distribution by such replacement
whole-saler or wholesalers in any particular geographical location, PUBLISHER is
dissatisfied with such replacement wholesaler or wholesalers for a reasonable
business reason in the opinion of PUBLISHER and gives CURTIS 30 days written
notice thereof, PUBLISHER shall have the right at its option to terminate the
replacement wholesaler or wholesalers, but only insofar as it is a wholesaler of
the PUBLICATIONS. PUBLISHER shall have the right in such circumstances to
distribute copies of PUBLICATIONS in that geographical area to whomever
PUBLISHER shall wish, provided it is not the whole-saler terminated by CURTIS,
and, in that event, will not be obliged to pay a distribution fee to CURTIS for
such distribution by PUBLISHER or its designee.
(C) If PUBLISHER shall have designated a replacement wholesaler in
accordance with Section 14A or 14B, CURTIS
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will not knowingly distribute copies of PUBLICATIONS to any wholesaler or
wholesalers in that area so as to compete with PUBLISHER's designated
replacement wholesaler or whole-salers. In the event that CURTIS agrees within
thirty (30) days of designation by PUBLISHER that a wholesaler appointed by
PUBLISHER under the provisions of this Section shall be serviced by CURTIS, the
parties shall resume under the original terms of this Agreement.
15. Inspection. PUBLISHER may at its own expense, at any time, and in
respect of any period, audit the books and records of CURTIS (only as such
relate to the matters covered by this Agreement) at the place where CURTIS, or
its servants or agents, maintain such books and records in order to verify
statements rendered to the PUBLISHER hereunder. Any such audit shall be
conducted only by accountants or other persons appointed by the PUBLISHER,
during reasonable business hours, in such manner as not to interfere with
CURTIS' normal business activities and CURTIS shall cooperate fully with such
audit providing all documents of any nature for the perusal of such accountant
or appointee. Without limiting the right of the PUBLISHER to call for the
production of any document, the term "documents" shall include documents
relating to Retail Display Allowance, internal memoranda, call reports,
circulation analyses, financial records of any
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<PAGE>
nature, payment to any person, firm or corporation, allowances of any nature,
discounts, correspondence and matters connected with or ancillary to the
Attachments hereto. Such accountants or appointees shall provide CURTIS with
written assurance that anything discovered in the course of their audit shall
not be revealed to anyone other than PUBLISHER or pursuant to court order and
that any matters which are not covered by this Agreement will not be revealed to
PUBLISHER.
16. Indemnification. (A) PUBLISHER shall indemnify and hold harmless
CURTIS, its parent, subsidiary or affiliated corporations, their officers,
employees, agent, representatives or any of its wholesalers of the PUBLICATIONS
(but only if such wholesaler has been approved for such indemnification by
PUBLISHER) against any loss, damages, judgments (other than fines), expenditures
or claims including reasonable counsel fees, legal expenses and other costs
(collectively, "Liabilities"), actually incurred by them or any of them in
connection with the distribution of any PUBLICATION, or any issue thereof, or
any promotional material provided by PUBLISHER, when same is questioned or
objected to by public authorities and the expenditure of outside legal time is
required in respect thereof, or in defending or settling any claim, civil action
or criminal prosecution against
-25-
<PAGE>
them or any of them arising out of the use of the title of said PUBLICATION or
the contents and printed matter, including advertisements, pictures or
photographs contained in the covers of any page of said PUBLICATION, or in any
supplementary or other proceeding or action in relation to such PUBLICATIONS,
provided that nothing contained herein shall obligate PUBLISHER to indemnify
CURTIS its parent, subsidiary or affiliated corporations against any Liabilities
arising out or as a result of (a) their breach of this Agreement or (b) their
own fault or negligence (or that of their agents, servants or employees) and,
provided, further, that (i) Liabilities shall not include any amounts payable by
any party indemnified hereunder on account of such party's indemnification of
any other person and (ii) in case any Liabilities arise in connection with a
proceeding in which a PUBLICATION and other publications are involved, the
liability of PUBLISHER hereunder shall in no event exceed the liability of the
party indemnified hereunder multiplied by a fraction, the numerator of which is
the number of PUBLICATIONS involved in such proceeding and the denominator of
which is the total number of publications involved in such proceeding. PUBLISHER
shall also indemnify CURTIS against any Liabilities to which it may become
subject as a result of actions taken by it at PUBLISHER's direction in
accordance with Sections 13, 14 and 7(B).
-26-
<PAGE>
(B) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving any Liabilities, such indemnified party
will, if the claim in respect thereof is to be made against PUBLISHER, give
written notice to PUBLISHER of the commencement of such action, specifying in
reasonable detail the particulars thereof and including copies of any pleadings
or other papers served in respect thereof. PUBLISHER will be entitled to
participate and assume the defense of any such action, and in the first
instance, to select counsel to represent any indemnified party. After notice
from PUBLISHER to such indemnified party of its election to assume the defense
thereof, PUBLISHER shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof, except as expressly set forth below. Each indemnified party, as
a prerequisite to any indemnification hereunder, shall cooperate with the
PUBLISHER and PUBLISHER's designated counsel in connection with any claim, suit
or proceeding.
Should there arise instances wherein any indemnified party desire (1)
in a case where there is a likelihood of incarceration, to compromise or settle
any claim, action, suit or proceeding against the wishes of PUBLISHER, or (2) in
any type of case, litigate or contest any claim, action, suit or proceeding
against the wishes of PUBLISHER; then, after such decision, the indemnified
party shall
-27-
<PAGE>
thereafter pay its own expenses, and any costs, judgements, fine, damages,
losses and settlements, without any further rights to indemnification.
(C) If (i) any copies of any of the PUBLICATIONS are seized by the
legal authorities in any locality because of an alleged violation of any
obscenity or related law, or (ii) any copies of PUBLICATIONS fail to reach
CURTIS' wholesalers or customers, then upon written demand by CURTIS to
PUBLISHER, PUBLISHER shall repay to CURTIS any sums previously paid to PUBLISHER
by CURTIS with respect to such copies, provided that if such copies are
subsequently resold by CURTIS, CURTIS shall refund to PUBLISHER the amounts in
respect of such copies paid CURTIS pursuant to this paragraph.
17. Monies due CURTIS. Subject to Section 6(C), all monies paid by, or
due and owing from, CURTIS' wholesalers or customers for copies of PUBLICATIONS
not returned to CURTIS are and shall at all times belong to and remain the
absolute property of CURTIS.
18. Competing Periodicals. CURTIS represents, for itself, its parent,
its subsidiaries and its affiliates, that they have no present plans to
distribute any Competing Periodicals (as below defined) and that they plan to
devote their best efforts to distribution and promotion of
-28-
<PAGE>
the PUBLICATIONS in such manner that such effort will be undiluted by
distribution or promotion of Competing Periodicals and CURTIS agrees that if
CURTIS shall determine that it will distribute a Competing Periodical, CURTIS
will give PUBLISHER written notice thereof at least ninety (90) days before
commencing such distribution and, in such event, PUBLISHER shall have the right
to either terminate this Agreement or to remove its effected PUBLICATIONS from
CURTIS' distribution, in either case by giving CURTIS thirty (30) days written
notice thereof.
As used herein, the term "Competing Periodical" shall mean any
periodical (other than those presently being distributed by CURTIS)
substantially similar in manner of editorial and pictorial content and quality
of production to any of PUBLISHERS' principal PUBLICATIONS, provided that the
term shall not include any periodical which is published by any publisher for
which CURTIS is presently a distributor if either (a) such PUBLISHER has
published the first issue of such periodical prior to the date hereof or (b)
such PUBLISHER is the PUBLISHER of the first issue of such periodical and the
first issue of such periodical appears on the newsstand after the date hereof,
or (c) the paid circulation of such periodical at the time CURTIS determines to
distribute it exceeds (i) 20% of the paid monthly circulation of the PUBLICATION
to
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<PAGE>
which it is substantially similar if the paid monthly circulation of such
PUBLICATION is 1,000,000 or less, or (ii) 10% of the paid monthly circulation of
the PUBLICATION to which it is substantially similar if the paid monthly
circulation of such PUBLICATION is more than 1,000,000. If any publisher for
which CURTIS is presently a distributor acquires or is acquired by another
publisher, then all periodicals of such other publisher which are substantially
similar in manner of editorial or pictorial content and quality of PUBLISHERS
principal PUBLICATION shall be Competing Periodicals. The term "Principal
PUBLICATION" shall mean any PUBLICATION the paid monthly circulation of which
for each of the three (3) months immediately preceding the date of determination
is 500,000 or more.
19. Term. The term of this Agreement shall be for five (5) years,
covering all issues of the PUBLICATIONS which go on sale after September 30,
1977 and before October 1, 1982.
20. Default; Termination. In case of any default under this Agreement,
the non-defaulting party or parties hereto may proceed to protect and enforce
their rights by a suit in equity, action at law, or other appropriate
proceeding. Without limiting the generality of the foregoing, the non-defaulting
party or parties hereto shall have the right
-30-
<PAGE>
(but not the obligation) to terminate this Agreement upon thirty (30) days
written notice of the occurrence of any of the following:
(A) With respect to PUBLISHER:
(i) A breach by PUBLISHER of its respective material
obligations to CURTIS pursuant to the terms and conditions of this
Agreement;
(ii) A final determination, which cannot be appealed to any
higher body, by any Federal or State Court of competent jurisdiction
permanently banning the sale or distribution of the current and all
future issues of any PUBLICATION;
(iii) The institution of or proceeding for voluntary or
involuntary banruptcy or re-organization by PUBLISHER or its
application for or consent to the application of a reorganization, or
its written admission of its inability to pay its debts generally as
they become due, or its being adjudicated bankrupt pursuant to the
United States Bankruptcy Act of 1898, as amended, or if appointment of
a trustee or receiver of PUBLISHER or a major
-31-
<PAGE>
part of its properties shall be made and not vacated within sixty (60)
days thereafter, or an order shall be made approving a petition for the
reorganization of the PUBLISHER.
(B) With respect to CURTIS:
(i) A breach by CURTIS of any of its respective material
obligations to PUBLISHER pursuant to the terms and conditions of this
Agreement;
(ii) If CURTIS shall fail or refuse to make any payment due
hereunder for more than two (2) days after such payment shall have
become due pursuant to the terms and conditions of this Agreement;
(iii) The institution of or proceedings for voluntary or
involuntary bankruptcy or reorganization by CURTIS or Cadence, or the
application by either thereof for or consent to the application of a
reorganization, or the written admission of either of its inability to
pay its debts generally as they become due, or either being adjudicated
bankrupt pursuant to the United States Bankruptcy Act of 1898, as
amended, or if appointment of
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<PAGE>
a trustee or receiver of CURTIS or Cadence or a major part of its or
their respective properties shall be made and not vacated within sixty
(60) days thereafter, or an order shall be made approving a petition
for the reorganization of CURTIS or Cadence.
(iv) The acquisition of effective control of CURTIS or Cadence
Industries Corporation, directly or indirectly, by a person, firm or
corporation which owns or publishes or distributes a Competing
Periodical.
(v) The breach by CURTIS of any of its obligations under the
letter, dated the date hereof, from CURTIS to PUBLISHER with right to
personnel.
No right, power or remedy conferred herein shall be exclusive of any
other right, power or remedy now or hereafter available at law, in equity, by
statute or otherwise. No course of dealing and no delay in exercising any right,
power or remedy shall operate as a waiver thereof.
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<PAGE>
21. Assignment. CURTIS and PUBLISHER may not assign this contract or
any part, rights, or proceeds thereof, without first obtaining the written
consent of the other party to such assignment, provided that PUBLISHER may
assign its rights hereunder to the payment of monies due from CURTIS if prior
thereto the assignee executes and delivers to CURTIS an acknowledgement in form
reasonably satisfactory to CURTIS. In case PUBLISHER should decide to sell any
one or all of the PUBLICATIONS, the PUBLISHER will, in connection therewith,
obtain an agreement from the buyer, in form satisfactory to CURTIS, that the
buyer will assume, with respect to such PUBLICATION, PUBLISHER's rights and
obligations hereunder and in such case CURTIS shall be obligated to distribute
such PUBLICATION on the terms and conditions contained herein.
22. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
23. Amendments. This Agreement may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party or parties
against which enforcement of such change, waiver, discharge or termination is
sought.
24. Notice. All notices and other communications hereunder shall be in
writing and shall be delivered or
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<PAGE>
mailed by first class mail, postage prepaid, return receipt requested, addressed
as set forth at the head of this Agreement or at such other address as the
parties hereto have furnished to each other in writing. All such notices shall
be deemed given on the date received by the addressee.
25. Miscellaneous. This Agreement sets forth the entire understanding
of the parties with respect to the distribution of PUBLICATIONS and when
effective shall supersede all previous agreements between the parties in writing
or otherwise relating to the PUBLICATIONS and is binding upon the parties, their
respective heirs, executors, administrators, successors and assigns; and, in
particular, this Agreement shall be binding for its terms upon any transferees,
successors or assigns of CURTIS and of PUBLISHER who shall publish any of the
PUBLICATIONS. This Agreement may be signed in counterparts, all of which shall
be deemed to be originals.
CURTIS CIRCULATION COMPANY
By /s/ Robert B. Alleger
----------------------------
PENTHOUSE INTERNATIONAL, LIMITED
VIVA INTERNATIONAL, LIMITED
PENTHOUSE PHOTO WORLD, LIMITED
PENTHOUSE POSTER PRESS, LIMITED
FORUM INTERNATIONAL, LIMITED
By /s/ Irwin E. Billman
---------------------------
Executive Vice President
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<PAGE>
ATTACHMENT I
ACKNOWLEDGEMENT
The undersigned, Assignee of the rights of Publisher under the
Distribution Agreement dated between Publisher and Curtis Circulation Company
acknowledges that Publisher's right to the payment of monies due from Curtis
under said Agreement is subject to the right of Curtis to offset against the
monies due Publisher from Curtis monies payable by Publisher to Curtis under
said Agreement.
<PAGE>
ATTACHMENT A
DISTRIBUTION TERRITORY
<TABLE>
<CAPTION>
PUBLICATION TITLE DISTRIBUTION TERRITORY
----------------- ----------------------
<S> <C>
PENTHOUSE Worldwide excepting the United Kingdom
PENTHOUSE FORUM Worldwide excepting the United Kingdom,
Australia and New Zealand.
VIVA Worldwide excepting the United Kingdom
PHOTO WORLD Worldwide excepting the United Kingdom
ROCK SUPERSTARS & SUPERSTARS OF SOUL Worldwide excepting the United Kingdom
ANY AND ALL ASSOCIATED PUBLICATIONS Worldwide excepting the United Kingdom
</TABLE>
<PAGE>
ATTACHMENT B
CURRENT TITLE LIST
<TABLE>
<CAPTION>
PUBLICATION TITLE INITIAL ISSUE FREQUENCY
----------------- ------------- ---------
<S> <C> <C>
PENTHOUSE November, 1977 Monthly
PENTHOUSE FORUM November, 1977 Monthly
VIVA November, 1977 Monthly
PHOTO WORLD October/November 1977 Bi-Monthly
ROCK SUPERSTARS First issue on sale September As Published
30, 1977 or thereafter
SUPERSTARS OF SOUL Same as Rock Superstars As Published
ANY AND ALL ASSOCIATED Same as Rock Superstars As Published
PUBLICATIONS
</TABLE>
<PAGE>
ATTACHMENT C
"PHOTO WORLD" is licensed to Publisher.
Although the trademark for "PENTHOUSE FORUM" has been registered,
Publisher has not registered "FORUM".
<PAGE>
ATTACHMENT D
BROKERAGE TERMS BY TITLE
PENTHOUSE AND ANY ALL ASSOCIATED PUBLICATIONS
[****] of cover price on the first one million (1,000,000) copies sold. [****]
of cover price on all copies sold exceeding one million (1,000,000).
PENTHOUSE FORUM AND ANY AND ALL ASSOCIATED PUBLICATIONS
[****] of cover price on the first five hundred thousand (500,000) copies
sold.[****] of cover price on all copies sold exceeding five hundred thousand
(500,000).
VIVA AND ANY AND ALL ASSOCIATED PUBLICATIONS
[****] of cover price on the first three hundred thousand (300,000) copies
sold.[****] of cover price on all copies sold exceeding three hundred thousand
(300,000).
PHOTO WORLD AND ANY AND ALL ASSOCIATED PUBLICATIONS
[****] of cover price on one hundred thousand (100,000) copies sold. [****] of
cover price on all copies sold exceeding one hundred thousand (100,000).
ROCK SUPERSTARS AND ANY AND ALL ASSOCIATED PUBLICATIONS
[****] of cover price on the first one hundred thousand (100,000) copies
sold. [****] of cover price on all copies sold exceeding one hundred thousand
(100,000).
SUPERSTARS OF SOUL AND ANY AND ALL ASSOCIATED PUBLICATIONS
[****] of cover price on the first one hundred thousand (100,000) copies
sold. [****] of cover price on all copies sold exceeding one hundred thousand
(100,000).
<PAGE>
ANY AND ALL NEW PRODUCTS
[****] of cover price on the first five hundred thousand (500,000) copies sold.
[****] of cover price on all copies sold exceeding five hundred thousand
(500,000).
NEW PUBLICATIONS PAYMENT SCHEDULE
Curtis shall pay to Publisher on all new publications distributed by CURTIS
(those publications referred to as "any and all Associated Publications" on
Attachment A) as follows:
(1) Monthly on the on-sale date of each publication an amount equal to
sixty (60%) percent of the Draw of such publication on the on-sale date for such
publication. After three (3) consecutive issues of any new publication, all
initial payments will be made in accordance with the terms of Section 8.
(2) A second advance will be made to the Publisher on the first three
(3) consecutive issues of a new publication equal to one hundred (100%) percent
of Curtis' then estimated final net sale of such Publication multiplied by
Curtis' per copy payment, less all previous payments made to Publisher
respecting such Publication, sixty (60) days after the off-sale date. Final
settlement shall be made in accordance with Section 8 of the Agreement. After
the first three (3) consecutive issues of any new publication, all advances and
payments will be made in accordance with the terms of Section 8.
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<PAGE>
ATTACHMENT E
The following wholesalers in specified markets will be allowed an incentive in
the amounts indicated; with the total of such allowance incentive being paid by
check from Curtis to the wholesaler involved.
Allowances will be made on a per copy sold basis and will be extended as
follows:
<TABLE>
<CAPTION>
ALL
METRO NEW YORK* DETROIT
WHOLESALERS PHILADELPHIA AND
EXCEPTING AND SPRING
SPRING VALLEY CHICAGO SAN FRANCISCO VALLEY
------------- ------- ------------- ------
<S> <C> <C> <C> <C>
PENTHOUSE [****] [****] [****] [****]
PENTHOUSE FORUM [****] [****] [****] [****]
SPECIALS - PH
& FORUM [****] [****] [****] [****]
NEW PRODUCT [****] [****] [****] [****]
VIVA [****] [****] [****] [****]
PHOTO WORLD [****] [****] [****] [****]
POSTER PRESS [****] [****] [****] [****]
SPECIALS - VIVA
PHOTO WORLD &
POSTER PRESS [****] [****] [****] [****]
</TABLE>
*New York Metro includes: Brooklyn, Carle Place, Carlstadt, East Brunswick,
Elizabeth, Hauppauge, Mt. Vernon, Stamford, North Bergen, Passaic & Paterson
<PAGE>
ATTACHMENT F
RETAIL DISPLAY ALLOWANCES
<TABLE>
<S> <C>
PENTHOUSE: On a cover price of [****] a [****] per copy
sold or an amount to be established by
Publisher on issues that deviate from the
standard cover price.
PENTHOUSE FORUM: On a cover price of [****], [****] per copy
sold.
VIVA: On a cover price of [****], [****] per copy
sold.
PENTHOUSE PHOTO WORLD: On a cover price of [****], [****] per copy
sold.
ROCK SUPERSTARS: On a cover price of [****], [****] per copy
sold.
SUPERSTARS OF SOUL: On a cover price of [****], [****] per copy
sold.
ANY AND ALL ASSOCIATED
PUBLICATIONS: An amount to be determined by Publisher.
</TABLE>
Any Retail Display Allowance necessitated by a cover price different than than
noted above will be established by the Publisher in writing to Curtis.
Publishers' decisions are final.
<PAGE>
<TABLE>
<CAPTION>
REGION #1
---------
<S> <C>
New Haven News Agency New Haven, Conn.
Greater Boston Distr. Boston; Mass.
Fairfield County News Bridgeport, Conn.} Marvel Comics
Yankee News Co., Inc. Waterbury, Conn.} & Marvel Mag. Onl
Empire State News Co. Cheektowaga, N. Y.
H.P. Kopplemann Inc. Hartford, Conn.
Portland News Co. So. Portland, Ne.
Empire News of Jamestown Jamestown, N.Y.- Effective June 1
</TABLE>
<TABLE>
<CAPTION>
REGION #2
---------
<S> <C>
***Newstand Field Services New York, N.Y.
***assaic County News Co. Paterson, N.J.
***ew Brunswick News Co. E. Brunswick, N.J.
***rauninger News Co. Trenton, N.J.
***mperial News Co. Carle Place, L.I., N.Y.
***aynor News Co. Ht. Vernon, N.Y.
***nited News Stamford, Conn.
***ast Island News Corp. Hauppauge, L.I., N.Y.
***udson County Newsdealers North Bergen, N.J.
***rooklyn News Company Brooklyn, N.Y.
***ackensack News Co. Carlstadt, N.J.
***achles News Passaic, N.J.
***ockland-Catskill, Inc. Spring Valley, N.Y.
***nion County Newsdealers Supply Co. Elizabeth, N.J.
</TABLE>
<TABLE>
<CAPTION>
REGION #3
---------
<S> <C>
***District News Cottage City, Md.
***l-Mar News Wilmington, Del.
United News Co. Philadelphia, Pa.
***ryland News Co. Baltimore, Md.
***rginia Periodicals Norfolk, Va.
***pital News Richmond, Va.
***lco Distributors, Inc. Chester, Pa.-Marvel Bag Comics Only
***rrisburg News Agency, Inc. Harrisburg, Pa.
***anoke News Agency, Inc. Roanoke, Va.
***ll-City News Agency, Inc. Lynchburg, Va.
***d-Penn Magazine Agency, Inc. Williamsport, Pa.
***nty News Agency, Inc. Lancaster, Pa.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REGION #4
---------
<S> <C>
Contral News Company Akron, Ohio
Geo. R. Klein News Co. Cleveland, Ohio
Triangle News Company McKees Rocks, Pa.
Koch News Company Indianapolis, Ind.
Scott Krauss News Columbus, Ohio
Ludington News Detroit, Mich.
Louisville News Co. Louisville, Kentucky
J.L. Marshall News Cincinnati, Ohio
Miami Valley News Dayton, Ohio
Michiana News Service Niles, Michigan
</TABLE>
<TABLE>
<CAPTION>
REGION #5
---------
<S> <C>
Orange News Company Orlando, Fla.
Cape News Company Cocoa, Fla.
Hillsboro News Co. Tampa, Fla.
Sun News Company Pinellas Park, Fla.
Dade County Newsdealers Miami, Fla.
Russell News Co. Sarasota, Fla.
Lakeland News Co. Lakeland, Fla.
Mobile News Mobile, Alabama
Carolina News Co. Fayetteville, N.C.
Jefferson News Birmingham, Ala.
Central News Co. Columbia, S.C.
Pee Dee News Co. Florence, S.C.
Capital News Co. Jackson, Miss.
Atlanta News Agency, Inc. Atlanta, Ga.
Duval News Company Jacksonville, Fla.
Muscogee News Co. Columbus, Ga.
Rocky Mount News Agency Rocky Mount, N.C.
Service News Co. Wilmington, N.C.
Dixie News Co. Charlotte, N.C.
</TABLE>
<TABLE>
<CAPTION>
REGION #6
---------
<S> <C>
Benjamin-Montreal News Montreal, Quebec
[****] [****]
Vancouver Magazine Serv. Ltd. Burnaby, B.C.
</TABLE>
<TABLE>
<CAPTION>
REGION #7
---------
<S> <C>
Oklahoma News Tulsa, Okla.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REGION #8
---------
<S> <C>
Valley Periodical Dist. Burbank, Calif.
Sunset News Company Los Angeles, Calif.
Golden Gate Mag. Co. San Francisco, Calif.
San Diego Periodical Dist. San Diego, Calif.
Gilboy Agency Oakland, Calif.
Peninsula News Co. San Matco, Calif.
Nor-Cal News Company Petaluma, Calif.
Milligan News Co. San Jose, Calif.
Drown News Agency Westminster, Calif.
Hawaiian Mag. Dist. Honolulu, Hawaii
Pacific Mag. & Book Tacoma, Wash.
Fairbanks News Fairbanks, Alaska
Anchorage News Anchorage, Alaska
Bay News Co. Portland, Oregon
Bell Magazine Agency Seaside, Calif. (Montere
Rogue Valley News Agency, Inc. Medford, Oregon
Rainier News Inc. Everett, Wash.
</TABLE>
<TABLE>
<CAPTION>
REGION #9
---------
<S> <C>
Chas. Levy Circ. Company Chicago, Ill.
Wisconsin Periodical Dist. New Berlin, Wisc.
North Shore Distributors Wheeling, Ill.
Gopher News Company Minneapolis, Minn.
Norton News Co. Denver, Colo. (Petersen)
Iowa News Dist. Co. Cedar Rapids, Iowa
Pueblo News Company Pueblo, Colorado
</TABLE>
<PAGE>
ATTACHMENT H
CURTIS CIRCULATION COMPANY
West Caldwell, NJ
To Each of our Wholesalers
and Other Customers
This is to inform you that, pursuant to the Distribution Agreement
between CURTIS CIRCULATION COMPANY and PENTHOUSE INTERNATIONAL, LIMITED, FORUM
INTERNATIONAL, LIMITED, VIVA INTERNATIONAL, LIMITED, PENTHOUSE PHOTO WORLD,
LIMITED, and PENTHOUSE POSTER PRESS, LIMITED, you are notified and directed that
all payments to be made by you on account of the issue of shall be made
not to CURTIS CIRCULATION COMPANY but directly to the Publisher, whose address
is 909 Third Avenue, New York, New York 10022.
Very truly yours,
CURTIS CIRCULATION COMPANY
By Order of The Board of Directors
__________________________________
<PAGE>
ATTACHMENT I
ACKNOWLEDGEMENT
The undersigned, Assignee of the rights of Publisher under the
Distribution Agreement dated between Publisher and Curtis Circulation Company
acknowledges that Publisher's right to the payment of monies due from Curtis
under said Agreement is subject to the right of Curtis to offset against the
monies due Publisher from Curtis monies payable by Publisher to Curtis under
said Agreement.
<PAGE>
AMENDMENT NO. 1 TO
DISTRIBUTION AGREEMENT
DATED: SEPTEMBER 19, 1977
Between CURTIS CIRCULATION COMPANY, 21 Henderson Drive, West Caldwell,
New Jersey 07006 (hereinafter called "CURTIS"); PENTHOUSE INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, N. Y. 10022, and FORUM INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, N. Y. 10022; VIVA INTERNATIONAL, LIMITED,
909 Third Avenue, New York, N. Y. 10022; PENTHOUSE PHOTO WORLD, LIMITED, 909
Third Avenue, New York, N. Y. 10022; PENTHOUSE POSTER PRESS, LIMITED, 909 Third
Avenue, New York, N. Y. 10022 (hereinafter collectively called "PUBLISHER").
The second paragraph of Section 18. Competing Periodicals as it appears
on pages 29 and 30 is amended to read as follows:
"As used herein, the term "Competing Periodical" shall mean any
periodical (other than those presently being distributed by CURTIS)
substantially similar in manner of editorial and pictorial content and quality
of production to any of PUBLISHERS' principal PUBLICATIONS, provided that the
term shall not include any periodical which is published by any publisher for
which CURTIS is presently a distributor if either (a) such PUBLISHER has
published the first issue of such periodical prior to the date hereof or (b)
such PUBLISHER is the PUBLISHER of the first issue of such periodical and the
first issue of such periodical appears on the newsstand after the
<PAGE>
date hereof, or (c) the paid circulation of such periodical at the time CURTIS
determines to distribute it is less than (i) 20% of the paid monthly circulation
of the PUBLICATION to which it is substantially similar if the paid monthly
circulation of such PUBLICATION is 1,000,000 less, or (ii) 10% of the paid
monthly circulation of the PUBLICATION to which it is substantially similar if
the paid monthly circulation of such PUBLICATION is more than 1,000,000. If any
publisher for which CURTIS is presently a distributor acquires or is acquired by
another publisher, then all periodicals of such other publisher which are
substantially similar in manner of editorial or pictorial content and quality of
PUBLISHERS principal PUBLICATION shall be Conpeting Periodicals. The term
"Principal PUBLICATION" shall mean any PUBLICATION the paid monthly
circulation of which for each of the three (3) months immediately preceding the
date of determination is 500,000 or more."
CURTIS CIRCULATION COMPANY
By /s/ Robert B. Alleger
-----------------------------
PENTHOUSE INTERNATIONAL, LIMITED
VIVA INTERNATIONAL, LIMITED
PENTHOUSE PHOTO WORLD, LIMITED
PENTHOUSE POSTER PRESS, LIMITED
FORUM INTERNATIONAL, LIMITED
By /s/ Irwin E. Billman
-----------------------------
<PAGE>
AMENDMENT NO. 2 TO
DISTRIBUTION AGREEMENT
DATED: SEPTEMBER 19, 1977
Between CURTIS CIRCULATION COMPANY, 21 Henderson Drive, West Caldwell,
New Jersey, 07006 (hereinafter called "CURTIS"); PENTHOUSE INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, NY, 10022, and FORUM INTERNATIONAL,
LIMITED, 909 Third Avenue, New York, NY, 10022; VIVA INTERNATIONAL, LIMITED, 909
Third Avenue, New York, NY 10022; PENTHOUSE PHOTO WORLD, LIMITED, 909 Third
Avenue, New York, NY, 10022, PENTHOUSE POSTER PRESS LIMITED, 909 Third Avenue,
New York, NY, 10022, OMNI PUBLICATIONS INTERNATIONAL, LIMITED, 909 Third Avenue,
New York, NY 10022 (hereinafter collectively called "PUBLISHER").
WHEREAS, the parties are presently negotiating the terms and conditions
of a new Distribution Agreement; and,
WHEREAS, it is apparent that notwithstanding the good intentions of
both parties to come to an agreement on the terms of a new Distribution
Agreement they will be unable to reach that agreement before the expiration date
of the existing Agreement;
NOW, THEREFORE, the parties agree as follows:
1. Section 19. Term as it appears on page 30 is amended to read as
follows:
"The term of this Agreement shall be for five (5) years and one (1)
month covering all issues of the publications which go on sale after September
30, 1977 and before November 1, 1982."
<PAGE>
2. This extension shall in no wise be construed to be continuing beyond
November 1, 1982 and each party reserves fully all of their respective rights
under the existing Agreement.
3. The parties acknowledge that each of them may advise their
respective banks and customers of this Amendment and the respective intent of
both parties to renew the existing agreement. The form of such notice is
attached hereto as Exhibit A.
Dated this 8th day of
September, 1982.
CURTIS CIRCULATION COMPANY
by /s/ Sheldon Feinbury
-----------------------------
SHELDON FEINBURY, CHAIRMAN
PENTHOUSE INTERNATIONAL, LIMITED
VIVA INTERNATIONAL, LIMITED
PENTHOUSE PHOTO WORLD, LIMITED
PENTHOUSE POSTER PRESS, LIMITED
FORUM INTERNATIONAL, LIMITED
OMNI PUBLICATIONS INTERNATIONAL,
LIMITED
by /s/ R.Guccione
------------------------------
<PAGE>
EXHIBIT A
Penthouse International, Ltd. and Curtis Circulation Company have
announced that they intend to enter into a renewal of their existing magazine
distribution arrangement. They have entered into an interim agreement to cover
the period during which the detailed provisions of such long term arrangement
will be concluded.
<PAGE>
AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT
DATED: SEPTEMBER 19, 1977
Between CURTIS CIRCULATION COMPANY, 21 Henderson Drive, West Caldwell,
New Jersey, 07006 (hereinafter called "Curtis"); and PENTHOUSE INTERNATIONAL,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; FORUM INTERNATIONAL,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; VIVA INTERNATIONAL,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; PENTHOUSE PHOTO WORLD,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; PENTHOUSE POSTER PRESS,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; OMNI PUBLICATIONS
INTERNATIONAL, LTD. 1965 Broadway, New York, New York, 10023-5965; NEWLOOK
INTERNATIONAL, LIMITED, 19 65 Broadway, New York, New York 10023-5965, and SPIN
MAGAZINE DIVISION, a division of PENTHOUSE INTERNATIONAL, LTD., 1965 Broadway,
New York, New York, 10023-5965, (hereinafter collectively called "PUBLISHER").
WHEREAS, Curtis and PUBLISHER entered into a Distribution Agreement
dated September 19, 1977, as amended, ("Agreement"); and
WHEREAS, PUBLISHER is publishing two new publications to be distributed
by Curtis under the Agreement.
NOW, THEREFORE, in consideration of the Agreement, the terms and
conditions hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties agree as follows:
<PAGE>
-2-
1. The first unnumbered paragraph of the Agreement is hereby
amended in its entirety to read as follows:
Between CURTIS CIRCULATION COMPANY, 21 Henderson
Drive, West Caldwell, New Jersey, 07006 (hereinafter called
"Curtis"); and PENTHOUSE INTERNATIONAL, LIMITED, 1965
Broadway, New York, New York, 10023-5965; FORUM INTERNATIONAL,
LIMITED, 1965 Broadway, New York, New York, 10023-5965; VIVA
INTERNATIONAL, LIMITED, 1965 Broadway, New York, New York,
10023-5965; PENTHOUSE LETTERS, LIMITED, 1965 Broadway, New
York, New York, 10023-5965; OMNI PUBLICATIONS INTERNATIONAL,
LTD. 1965 Broadway, New York, New York, 10023-5965; NEWLOOK
INTERNATIONAL, LIMITED, 19.65 Broadway, New York, New York
10023-5965, and SPIN MAGAZINE DIVISION, a division of
PENTHOUSE INTERNATIONAL, LTD., 1965 Broadway, New York, New
York, 10023-5965, (hereinafter collectively called
"PUBLISHER").
2. PUBLISHER'S new publications known as "NEWLOOK", "PENTHOUSE
LETTERS" and "SPIN" shall be distributed by Curtis pursuant
to the Agreement and shall be deemed to be included within the
definition of "PUBLICATIONS" under the Agreement. NEWLOOK
and SPIN shall be considered and treated as new publications
and new products under the Agreement and all the terms and
conditions applying to new publications and new products shall
apply to NEWLOOK and SPIN except as otherwise provided herein.
3. "Attachment A" to the Agreement is hereby amended in its
entirety to read as follows:
<PAGE>
-3-
ATTACHMENT A
DISTRIBUTION TERRITORY
<TABLE>
<CAPTION>
PUBLICATION TITLE DISTRIBUTION TERRITORY
------------------- -----------------------
<S> <C>
PENTHOUSE U.S. and Canada
FORUM U.S. and Canada
PENTHOUSE VARIATIONS U.S. and Canada
PENTHOUSE LETTERS U.S. and Canada
PENTHOUSE HOT TALK U.S. and Canada
NEWLOOK U.S. and Canada
SPIN U.S. and Canada
GIRLS OF PENTHOUSE U.S. and Canada
BEST OF OMNI SCIENCE FICTION U.S. and Canada
HELLFIRE U.S. and Canada
ANY AND ALL ASSOCIATED PUBLICATIONS U.S. and Canada
OMNI U.S. and Canada
</TABLE>
4. The initial issue of NEWLOOK and SPIN shall be the May 1985
issue and both titles shall be published monthly.
5. NEWLOOK is Licensed to PUBLISHER.
6. Section "19. Term", as it appears on page 30 of the
Agreement is amended to read as follows:
"The term of this Agreement shall be for five (5) years and
thirty one (31) months covering all issues of the PUBLICATIONS
which go on sale after September 30, 1977 and before May 1,
1985."
<PAGE>
-4-
7. NEWLOOK INTERNATIONAL, LIMITED, SPIN MAGAZINE DIVISION, and
PENTHOUSE LETTERS, LTD. shall be deemed additional parties to
the Agreement and shall also be deemed included and defined in
the term "PUBLISHER" under the Agreement. All the parties
signing this amendment and/or included within the definition
of "PUBLISHER" under the Agreement shall be responsible and
answerable under the Agreement for all the obligations,
warranties, representations, reponsibilities, and covenants of
the PUBLISHER under the Agreement and all of the parties to
the Agreement regardless of which company is the actual owner
of a particular publication or which company may incur the
obligation, owe money, make the representation or be in
default under the Agreement.
8. "Attachment H" to the Agreement is hereby amended to list
only the PUBLISHER (S) set forth in paragraph "1" of this
Amendment No. 3 and further to change PUBLISHER'S address to
1965 Broadway, New York, New York 10023-5965.
9. "Amendment No. 1," dated September 19, 1977, is hereby
amended to read in its first paragraph identically to the
first paragraph of this Amendment No. 3, and the PUBLISHER'S
signature block on the second page of said "Amendment No. 1"
to conform to the definition of "PUBLISHER" as set forth
herein.
IN WITNESS WHEREOF, the parties hereto execute this agreement the 18th
day of March, 1985.
CURTIS CIRCULATION COMPANY
By: /s/ James Barth
----------------------------------
Vice-President
PENTHOUSE INTERNATIONAL, LIMITED
VIVA INTERNATIONAL, LIMITED
PENTHOUSE LETTERS, LTD.
FORUM INTERNATIONAL, LIMITED
OMNI PUBLICATIONS INTERNATIONAL, LIMITED
NEWLOOK INTERNATIONAL, LIMITED
SPIN MAGAZINE DIVISION,
a division of PENTHOUSE
INTERNATIONAL, LTD.
By: /s/ David J. Myerson
----------------------------------
David J. Myerson
Executive Vice President
and Chief Operating Officer
<PAGE>
AMENDMENT NO. 4 TO DISTRIBUTION AGREEMENT
AMENDMENT to Agreement dated February 1, 1986, between Curtis
Circulation Company, having an office at 21 Henderson Drive, West Caldwell, New
Jersey 07006 (hereinafter called "Curtis") and Penthouse International, Ltd.,
Viva International, Ltd., Penthouse Letters, Ltd., Forum International, Ltd.,
Omni Publications International, Ltd., Newlook International, Ltd., and Spin
Magazine, Publications, Inc. all having offices at 1965 Broadway, New York, New
York 10023-5965 (hereinafter collectively called "Publisher").
WHEREAS, the parties hereto entered into a distribution agreement dated
September 19, 1977, for the distribution of all magazines published by the
Publisher, which agreement was subsequently amended by Amendment Nos. 1 through
3 (which agreement, as amended, is hereinafter referred to as the
"Agreement"); and
WHEREAS, the term of the Agreement expired on May 1, 1985 and has since
been continuously renewed and is in effect as of the date hereof; and
WHEREAS, the parties wish to dispense with the necessity of executing
renewal letters on a monthly basis to extend the term of the Agreement; and
WHEREAS, the parties desire to conform the Agreement to the current
name of one of the current entities bound by the Agreement.
NOW, THEREFORE, it is hereby agreed among the parties as follows:
<PAGE>
1. Section 19 of the Agreement is hereby amended to read as follows:
"19. Term. This Agreement shall continue in full force and effect
until such time as either Curtis or Publisher terminates the Agreement upon
sixty (60) days prior written notice to the other."
2. "Spin Magazine Publications, Inc." shall be substituted for Spin
Magazine, a division of Penthouse International, Ltd." in all places and
respects under the Agreement.
Except as modified hereby, the parties hereby ratify each and every
other provision of the Agreement.
Curtis Circulation Company
By: /s/ Joseph M. Walsh
----------------------------------
Joseph M. Walsh, President
Penthouse International, Ltd.
Viva International, Ltd.
Penthouse Letters, Ltd.
Forum International, Ltd.
Omni Publications International, Ltd.
Newlook International, Ltd.
Spin Magazine Publications, Inc.
By: /s/ David J. Myerson
---------------------------------
David J. Myerson,
Executive Vice President