ZUDA RIGHTS AGREEMENT

This RIGHTS AGREEMENT is made as of _________, 20__ ("Rights Agreement"), by and between _______________________, as creator of digital comic content ("You"), whose address is _______________________________________, and DC Comics ("Zuda"), whose address is 1700 Broadway, New York, NY 10019. All terms defined in the Submission Agreement (available on the Website and previously agreed to by You) (the "Submission Agreement"), shall have the same meanings when used herein.


You submitted the Submission on the Website, and either Zuda chose the Submission as an Instant Winner or the Submission won a Competition. You and Zuda want to enter into this Rights Agreement pursuant to which You grant to Zuda rights in the Material (as defined below), currently entitled _________________________. Zuda wants to simultaneously enter into the Services Agreement with You, pursuant to which Zuda engages You to prepare additional Screens for initial publication on the Website. For good and valuable consideration, You and Zuda agree as follows:


  • 1. TEAM SUBMISSIONS. If You are a member of a Team, then You acknowledge that You are not the sole creator of the Material, and that Zuda has entered or intends to enter into a separate rights agreement (in the form provided under the Submission Agreement) with the other Team members. This Rights Agreement shall only become effective when Zuda has entered into such a rights agreement with each Team member.
  • 2. GRANT OF RIGHTS. In consideration of all promises made herein, and subject to the reversion rights set forth in Paragraph 8 below, You grant and assign to Zuda, its successors, licensees and assigns, solely and exclusively, in any and all languages and media, whether now known or hereafter devised, throughout the universe, for the term of copyright, all rights in and to the Material (collectively, the "Rights"). As used herein, "Material" means the Submission and the literary work written and/or drawn, and/or to be written and/or drawn, by You as well as other adaptations or versions thereof now existing or hereafter created, whether created by You, Zuda or third parties, including the title of the work, the art and script comprising the work and the concepts, plots, themes, storylines, characters (including names and images), environmental settings, devices, characterizations, logos, trademarks and designs and other elements to the extent included in the work. The Rights include the following:
    • (a) All print and electronic publication rights, audio and/or visual recording and reproduction rights (including motion picture, television and radio rights), merchandising rights, computer software and multi-media rights, Internet and mobile device rights, live stage rights and commercial tie-in rights using elements and/or materials of, from or relating to the Material in connection with products and/or services based upon or relating to the Material.
    • (b) The right to prepare and use and/or license the use of all Versions of the Material (as defined below) and any elements thereof, which elements may be used alone, together or in any combination, including in combination with elements from other properties. As used herein, "Versions of the Material" means any and all tangible expressions of any kind that are produced pursuant to the Rights herein granted to Zuda.
    • (c) The right to advertise, publicize and promote all Versions of the Material, and the right to use Your name, likeness and biography and the title of the Material in connection with all Versions of the Material and/or in connection with Zuda.
    • (d) The right to edit, alter, revise and make any and all changes to any Versions of the Material, including making necessary additions thereto and deletions therefrom.

      Notwithstanding Your grant of the Rights to Zuda, You have the right to create and sell each piece of Original Artwork (as defined below), provided that any such Original Artwork shall have affixed to it irremovably, and in such manner and location as to give reasonable notice to viewers, an appropriate copyright and trademark notice. In addition, each year You may sell a total of up to 100 reproductions of Original Artwork in any combination (for example, 10 copies of a print piece plus 90 print outs of a digital piece). As used herein, "Original Artwork" means an actual piece of work that You create as Material (for example, a drawing on paper or on a computer screen) whether or not such work is created for publication on the Website.
  • 3. SERVICES. Zuda wants to engage You to render and deliver additional Screens based on the Material for publication on the Website (the "Services"). If You want to perform the Services, then You need to execute the Services Agreement (in the form provided under the Submission Agreement) concurrently with execution of this Rights Agreement or promptly thereafter. The Submission and the first set of additional Screens to be rendered by You pursuant to the Services Agreement shall be referred to as the "Launch Work".
  • 4. CONSIDERATION/ROYALTIES. Zuda shall pay You the following amounts, in consideration of the grant of the Rights to Zuda hereunder. As the original creator of the Material, You shall always be entitled to the royalty amounts set forth below. In addition, You shall receive money under the Services Agreement for any services you provide thereunder.
    • (a) Development and Website Exploitation: For Your development of the Material to date, and the right to edit, publish, post, distribute and display the Material (including the Launch Work) on the Website, Zuda shall pay You a one-time, non-recoupable fee of $1,000, payable within 30 days of full execution of this Rights Agreement, subject to receiving an IRS Form W-9 from You.
    • (b) Print Work:
      • (i) For each Print Work (as defined below), Zuda shall pay You an amount equal to 1% of the cover price of the Print Work multiplied by the Net Print Work Sales (as defined below) for the Print Work.
      • (ii) As used herein, (A) "Print Work" means a physical print format publication (for example, a hardcover or softcover book or magazine) that is based entirely upon the Material and that is published by Zuda for distribution and sale to the public and (B) "Net Print Work Sales" means the number of copies that are actually sold by Zuda through Zuda's wholesale and retail distribution channels (including subscriptions), less the number of copies that are returned, damaged, lost, distributed by Zuda as premiums or promotions and/or distributed to uncollectible accounts or sold at discounts in excess of 70% of cover price.
    • (c) Retail Products :
      • (i) For each Retail Product (as defined below), Zuda shall pay You either: (A) an amount equal to 1.6% of the suggested retail selling price of the Retail Product multiplied by the Net Retail Product Sales (as defined below) for the Retail Product or (B) if there is no suggested retail selling price, an amount equal to 5% of Zuda's gross receipts derived for the Retail Product.
      • (ii) As used herein, (A) "Retail Product" means an item of merchandise, other than a Print Work or Media Work created by Zuda, that is based entirely upon the Material and that is manufactured by Zuda and distributed or rendered by Zuda itself for sale to the public through Zuda's wholesale and retail distribution channels (that is, not manufactured and distributed or rendered for sale by a licensee of Zuda) such as collectible statues, posters, action figures, book-ends and snow-globes and (B) "Net Retail Product Sales" means the number of units that are actually sold by Zuda through Zuda's wholesale and retail distribution channels, less the number of units that are returned, damaged, lost, distributed by Zuda as premiums or promotions and/or distributed to uncollectible accounts or sold at discounts in excess of 70% of the suggested retail selling price.
    • (d) Licensed Reprint Editions:
      • (i) For each Licensed Reprint Edition (as defined below), Zuda shall pay You an amount equal to 20% of Net Receipts (as defined below) for the Licensed Reprint Edition.
      • (ii) As used herein, "Licensed Reprint Edition" means a physical print format reprint of a Print Work (in whole or in part) in any language that is based entirely upon the Material and that is published by a licensee of Zuda for distribution and sale to the public anywhere in the world through normal retail and wholesale distribution channels. As used herein, "Net Receipts" means all amounts actually received by Zuda from the licensing of rights to the Material for a Licensed Reprint Edition, Licensed Publication (as defined below), Media Work (as defined below) or Licensed Merchandise (as defined below), as applicable, less any unrecouped foreign taxes, import duties and/or currency exchange losses, and less all direct costs incurred by Zuda. Notwithstanding the foregoing, for Licensed Reprint Editions only, direct costs shall not include agency commissions, which shall be borne entirely by Zuda. Any advance against royalties paid to Zuda by a licensee shall be considered received by Zuda if and when such amount is either earned out or forfeited by the licensee.
    • (e) Licensed Publications:
      • (i) For each Licensed Publication, Zuda shall pay You an amount equal to 20% of Net Receipts for the Licensed Publication.
      • (ii) As used herein, "Licensed Publication" means a physical print format publication, such as a hardcover or softcover book or magazine (including any original novel or novelization) or an audio book that is based entirely upon the Material and that is published by a licensee of Zuda for distribution and sale to the public anywhere in the world through normal retail and wholesale distribution channels.
    • (f) Media Work and Licensed Merchandise:
      • (i) For each Media Work, Zuda shall pay You an amount equal to 40% of Net Receipts for the Media Work and, for each Licensed Merchandise, Zuda shall pay You an amount equal to 40% of Net Receipts for the Licensed Merchandise.
      • (ii) As used herein, (A) "Media Work" means: (1) any audio and/or visual work of all types now known or hereafter devised that is based entirely upon the Material and that is produced by Zuda or a licensee of Zuda for exploitation in any medium now known or hereafter devised (including theatrical, television, home video and digital download) or (2) a live stage production that is based entirely upon the Material and that is produced by Zuda or a licensee of Zuda and is open to the general public for admission and (B) "Licensed Merchandise" means a promotional service or an item of merchandise (other than Media Work created by a licensee of Zuda, a Licensed Reprint Edition or a Licensed Publication), that is based entirely upon the Material and that is manufactured by a licensee of Zuda and distributed for sale to the public by a licensee of Zuda.
  • 5. CONTINGENCIES AFFECTING CONSIDERATION.
    • (a) Multiple Contributors: If You are a member of a Team, You shall be entitled to a pro-rata portion of all consideration payable pursuant to Paragraph 4 above, calculated based upon the number of members comprising the Team, with each member getting an equal share of such consideration (unless Zuda is directed to split the payments in another way, in a writing signed by each member of the Team).
    • (b) Commingling of Properties and Spin-Offs: If Zuda uses or licenses the use of the Material, or any element thereof, in combination with any other property, then Zuda shall pay You royalties based upon Zuda's pro rata allocation of the amounts set forth in Paragraph 4 above among all such properties. The foregoing allocation (and all other allocations) made by Zuda pursuant to this Rights Agreement shall be made by Zuda in good faith.
    • (c) Expiration or Termination of the Services Agreement: If Zuda terminates the Services Agreement, due to Your default thereunder, before You complete the Services for the Launch Work, Zuda may reduce the royalties payable to You pursuant to Paragraph 4 above by the amounts, if any, that Zuda has agreed to pay a third party engaged to complete such Services, provided that Zuda shall never reduce Your royalties by more than 50%.
  • 6. ACCOUNTINGS. Accountings and accompanying royalty payments due under Paragraph 4 above (but specifically not the fee in Paragraph 4(a) above) shall be made twice annually within 90 days of the close of each six month period, provided that Zuda may withhold from any payments a reasonable reserve to cover anticipated future returns. Notwithstanding the foregoing, Zuda shall not issue an accounting statement or royalties payment hereunder until a payment of at least $200, in total, is due to You pursuant to this Rights Agreement and the Services Agreement, provided that You can request a copy of such a statement from Zuda at any time.
  • 7. COPYRIGHT AND TRADEMARK.
    • (a) Subject to and in accordance with the Rights granted to Zuda hereunder, You or the Team, as applicable, shall retain the copyright in and to the Material.
    • (b) Zuda shall affix a copyright notice in Your name or the Team members' names, as applicable, to all Versions of the Material produced and distributed by Zuda, and shall contractually require any of its licensees to do the same, except to the extent that any such Version of the Material shall have been created or packaged by a Person (as defined below) other than You or the Team members, in which event notice of copyright shall be in Zuda's name or in the name of Zuda's licensee, as appropriate. As used herein, "Person" shall include any natural person, firm or corporation or any group of individuals, firms or corporations, or any other entity.
    • (c) In order to protect and exploit the Material, Zuda must register, in its own name, any trademarks that result from Zuda's use of the Material throughout the world, and Zuda shall hold such registrations unless and until a reversion to You becomes effective pursuant to Paragraph 8 below, at which point the trademarks shall automatically be assigned to You.
    • (d) Zuda shall have the sole and exclusive right, but not the obligation, to take any legal action Zuda in good faith deems necessary in order to protect the Material and/or any Version of the Material against any infringement or violation of any of its rights hereunder. If Zuda shall elect to prosecute any such claim, Zuda shall do so at its own cost and expense. After recoupment of all such costs and expenses, Zuda shall pay You (or the members of the Team, as applicable) an aggregate of one-half of all awards and recoveries Zuda receives as a result of any such legal action. If You become aware of any infringements or violations of any of Zuda's rights in and to the Material, You shall promptly notify Zuda and shall cooperate with Zuda in the prosecution of any resulting claims.
  • 8. REVERSION RIGHTS. You shall have the following reversion rights which shall be in addition to those available to You under United States copyright law.
    • (a) Any time after four years from the date of Zuda's initial exploitation on the Website of the last piece of Material created by You pursuant to the Services Agreement, You may request, in writing, a reversion of the Rights granted to Zuda hereunder if Zuda shall have failed to pay You or members of the Team collectively, as applicable, at least $2,000 in connection with the Material (inclusive of sums paid to You or the members of the Team, as applicable, pursuant to any Services Agreements) over the two year period immediately preceding Your request. If You are part of a Team, any request for reversion hereunder must be made in writing jointly by all members of the Team.
    • (b) Zuda shall, within six months of receipt of a valid reversion request, either: (i) grant Your request, (ii) engage You to render new Services based on the Material on mutually agreeable terms, (iii) generate and pay to You at least $2,000 in revenue in connection with the Material or (iv) produce a new print edition of the Material, either as an entirely new print edition or a reprint of a print edition that is currently out of print.
    • (c) If Zuda responds to Your reversion request pursuant to Paragraphs 8(b)(ii), 8b(iii) or 8b(iv) above, You may again request reversion if Zuda shall have failed to pay You or members of the Team collectively, as applicable, at least $2,000 in connection with the Material (inclusive of sums paid to You or the members of the Team, as applicable, pursuant to any Services Agreements) over the two year period immediately preceding Your request. The new two year period shall begin as follows: (i) for a response under Paragraph 8(b)(ii), two years from the date of Zuda's acceptance of the last piece of new Material, (ii) for a response under Paragraph 8(b)(iii), two years from the date that You receive at least $2,000 in new revenue and (iii) for a response under Paragraph 8(b)(iv), two years from the date of initial commercial exploitation of the new print edition (for example, in-store date).
    • (d) If Zuda grants Your reversion request, pursuant to Paragraph 8(b)(i) above, then all Reversion Materials (as defined below) shall revert to You. As used herein, "Reversion Materials" means (i) all rights in and to the Material that are granted to Zuda pursuant to this Rights Agreement and the Services Agreement, (ii) all rights to any trademarks and attendant goodwill that Zuda may have obtained resulting from Zuda's use of the Material, (iii) all work entirely based on the Material created by You pursuant to the Services Agreement, by Zuda or by any Person other than Zuda, subject to Paragraph 8(e) below and (iv) all tangible technical materials (for example, prints, films, mechanicals, proofs, electronic files) ("Technical Materials") then in Zuda's possession that were used by Zuda to create any print publications based entirely on the Material, but specifically excluding any tangible technical materials used by Zuda in connection with exploitation of a Version of the Material in any other media platform, such as on the Website, subject to Paragraph 8(f) below.
    • (e) In connection with any Reversion Materials created by a Person other than Zuda, You shall: (i) obtain the written consent (in a form reasonably acceptable to Zuda) of the Person(s) who created such Reversion Materials, (ii) agree to make any payments required to be made to any third party on account of the use of such Reversion Materials and (iii) defend, indemnify and hold harmless Zuda from and against any claims that may arise out of Your use of such Reversion Materials. Zuda shall use reasonable efforts to identify for You the Person(s) who created such Reversion Materials.
    • (f) You may use the Technical Materials to manufacture, sell and/or publish works using the Material, provided that neither You nor Your designee may sell any such works using Zuda's name or any of Zuda's trademarks without Zuda's prior written consent.
    • (g) Zuda shall retain the non-exclusive right to publish and display on the Website all Material delivered to Zuda by You prior to reversion to You, provided that You may require Zuda, by written notice, to remove the Material from the Website at any time after reversion to You.
    • (h) Zuda shall retain the exclusive right to use and/or license the use of any other elements prepared by Zuda or on Zuda's behalf that may have been used in combination and/or in conjunction with the Material.
    • (i) Any option to acquire film, television or other rights in and to the Material (each, an "Option"), and any license or other grant of rights in and to the Material (each, a "Grant"), which may be in effect at the time of reversion shall remain in full force and effect and shall not be assigned to You. Zuda shall advise You of any such Options and Grants, and You shall be bound by the exclusivity provisions therein, if any. After reversion, if and when any Option or Grant terminates or expires, any rights that would then be held by Zuda shall automatically revert back to You. Additionally, Zuda may continue to sell its remaining inventory of Print Works and Retail Products on a non-exclusive basis for a period of one year from the date of reversion, subject to the payment of any royalties that may become due on account thereof, and otherwise in accordance with all of the terms and conditions of this Rights Agreement.
    • (j) The provisions of Paragraph 4, Paragraph 5, Paragraph 6, Paragraph 7, Paragraph 8(j), Paragraph 10, Paragraph 11, Paragraph 12, Paragraph 13, Paragraph 18, Paragraph 19, Paragraph 22, Paragraph 23, Paragraph 25 and Paragraph 26 shall survive any reversion hereunder.
  • 9. OTHER DOCUMENTS. You hereby irrevocably appoint Zuda as Your attorney-in-fact with the right, but not the obligation, to execute any documents or instruments that are necessary or desirable to effectuate the purposes of this Rights Agreement and to record such documents or instruments and/or to renew copyrights. Such appointment shall be a power coupled with an interest and shall be irrevocable.
  • 10. AUDIT RIGHTS. You may audit Zuda's books and records solely in order to verify statements issued to You hereunder. If any such audit reveals underpayments to You, Zuda shall make the appropriate payments to You in order to correct such deficiency. If any such audit reveals overpayments to You, Zuda may recoup such overpayments from any and all monies due to You. Audits conducted pursuant to the terms of this Paragraph 10 shall be conducted at Your expense, provided that if the audit reveals underpayments in excess of 10%, Zuda shall reimburse You for Your reasonable audit costs. Any audit shall be conducted only upon reasonable notice by a certified public accountant during regular business hours at Zuda's offices and in such manner as not to interfere with Zuda's normal business activities. In no event shall an audit with respect to any statement start later than 12 months after the date of that statement or continue for longer than five consecutive business days. Further, You may not conduct an audit more frequently than twice a year, and the books and records supporting any statement may not be audited more than once. All statements shall be binding upon You and not subject to any claims or proceedings unless objection is made in writing stating the basis thereof and delivered to Zuda within 12 months of the date of such statement.
  • 11. REPRESENTATIONS, WARRANTIES AND COVENANTS. You hereby represent, warrant and covenant as follows:
    • (a) You have the full right, power and authority to enter into this Rights Agreement and to grant to Zuda all the rights herein stated to be granted, and You are at least 18 years old and, upon Zuda's request, shall provide Zuda with proof of the foregoing,
    • (b) all Material prepared and/or furnished by You hereunder shall be wholly original to You, and such Material and any publication thereof shall not be unlawful and do not and shall not defame or infringe or violate any personal, proprietary or other rights (including copyright, trademark or contract rights, moral rights or rights of privacy or publicity) of any Person,
    • (c) except as set forth in the Submission Agreement, the Material has not been published, posted, distributed or displayed online, in print or in any other manner, and neither the Material nor any elements thereof have been used in any manner or media,
    • (d) the Material is not in the public domain in any country of the world that provides for copyright or similar protection, and
    • (e) You have not granted to any Person, and You shall not grant to any Person, any right, or option to acquire any right, that would or might conflict with any of the Rights granted to Zuda hereunder or that might impair or diminish the value of the Rights granted to Zuda hereunder.
  • 12. INDEMNITIES.
    • (a) You shall indemnify and hold harmless Zuda , its parents, subsidiaries, affiliates and its and their employees, agents, officers, directors, representatives, licensees, successors, heirs and assigns, from and against any and all claims, losses and expenses (including counsel fees and costs) that any of them may suffer or incur as a result of a breach of any representation, warranty or covenant made by You herein. Zuda shall have the sole and exclusive right to undertake the defense and/or settlement of any such claim.
    • (b) Zuda shall indemnify and hold harmless You and Your licensees, successors, heirs and assigns from and against any and all claims and expenses (including counsel fees and costs) that any of them may suffer or incur as a result of the use of any material that Zuda creates or causes to be created and used in any Version of the Material.
  • 13. CREDIT.
    • (a) Zuda shall accord You credit as creator of the Material in connection with its publication of any Screens on the Website and on the credits page of all Print Works, in a size and manner consistent with Zuda's standard practices at the time of publication. Zuda shall use reasonable efforts to cause its licensees to accord You a similar credit on Licensed Reprint Editions and, where such a credit is usual and customary, on other products based upon the Material (but not on merchandise such as toys, games and clothing).
    • (b) No failure by Zuda or any other Person to comply with the provisions of this Paragraph 13 shall constitute a breach by Zuda of this Rights Agreement, or shall entitle You to injunctive relief, provided that upon notice by You, Zuda shall use reasonable efforts to prospectively cure any such failure to comply with the provisions of this Paragraph 13.
  • 14. COMPLIMENTARY COPIES. In addition to the complimentary copies that you are entitled to received under the Services Agreement, Zuda shall provide You with one complimentary copy of each Print Work that does not include Material for which You rendered Services and shall use reasonable efforts to provide You with at least one complimentary copy of each Licensed Reprint Edition that does not include Material for which You rendered Services.
  • 15. ASSIGNMENT. Zuda shall have the right to assign this Rights Agreement and any or all of the rights granted to Zuda hereunder to any Person. Upon prior written notice to Zuda, You shall have the right to assign Your right to receive payment hereunder. This Rights Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, administrators, personal representatives, successors, licensees and assigns.
  • 16. TIME WARNER COMPANIES. In the normal course of its operations, Zuda does business on an arm's length basis with other companies either wholly or partially controlled by Zuda's corporate parent Time Warner Inc. (the "TWI Companies"). You agree that Zuda may do business with TWI Companies with respect to the Material, and You shall not challenge such dealings solely or mainly on the basis of the TWI Companies' affiliation.
  • 17. NOTICES. All notices or payments that either party may wish to serve or may be required to serve on the other party hereunder shall be in writing and shall be sent prepaid by any receipted form of delivery or shall be delivered personally to the respective parties at their addresses set forth above (or to such other address as either party may specify by notice duly given). Notices shall be deemed given on the date of mailing thereof or if made by personal delivery on the date thereof.
  • 18. CONSTRUCTION. This Rights Agreement shall be construed in accordance with the laws of the State of New York applicable to agreements executed and wholly performed within the state. The state and federal courts of the state of New York shall have exclusive jurisdiction over the parties and any case or controversy arising under this Rights Agreement.
  • 19. REMEDIES. All the rights, licenses, privileges and property herein granted to Zuda are irrevocable and not subject to rescission, restraint, reversion or injunction under any or all circumstances, except as expressly provided herein. In the event of any breach of this Rights Agreement or any portion thereof by Zuda, Your sole remedy shall be an action at law for damages, if any; in no event shall You 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 Zuda herein.
  • 20. NO WAIVER. A waiver by either party of any term or condition of this Rights Agreement in any instance shall not form or be construed to form a waiver of such term or condition for the future.
  • 21. NO OBLIGATION. Nothing contained herein shall be construed to obligate Zuda to produce, publish, complete or exploit, in any media, any Version of the Material.
  • 22. ENTIRE AGREEMENT. This Rights Agreement, together with any Exhibits or Schedules attached hereto, contain the entire agreement between the parties with respect to its subject matter and may not be changed or modified, except in writing, signed by the parties hereto. Neither party has relied upon any statement, representation or promise not contained herein.
  • 23. ILLEGALITY. Nothing in this Rights Agreement shall be construed to require the commission of any act contrary to law, and in the event of any conflict between a provision of this Rights Agreement and any statute, law, ordinance or regulation, this Rights Agreement shall be deemed modified, but only to the extent required to comply with such statute, law, ordinance or regulation.
  • 24. INDEPENDENT CONTRACTOR. Nothing herein contained shall constitute a partnership or joint venture by and between the parties hereto or constitute either party the agent of the other.
  • 25. PARAGRAPH HEADINGS. Paragraph headings have been inserted for convenience only and shall not be given any legal effect.
  • 26. NO OTHER PARTY. Notwithstanding anything to the contrary contained herein, this Rights Agreement is between You and Zuda only, and no other Person shall be a third party beneficiary. This Rights Agreement shall not be binding until signed by both parties hereto.

IN WITNESS WHEREOF, the parties have executed this Rights Agreement as of the date first written above.


DC COMICS
By:________________________________________________________
Name: Paul Levitz
Title: President & Publisher


CREATOR
By:________________________________________________________
Name: