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Exhibit: 10.14FT
CO-PUBLISHING AGREEMENT
(U.K. MATERIALS)
THIS AGREEMENT is entered into as of the 5th day of January, 1998, by
and between Magi Publications, a partnership ("Publisher") and Little Tiger
Press USA, L.L.C., a New York limited liability company ("Co-Publisher").
R E C I T A L S:
A. Publisher publishes printed materials, and Co-Publisher is in the
business of publishing, marketing and distributing printed materials.
B. The parties desire to enter into an agreement for co-publication by
Co-Publisher of certain materials of Publisher, all on the terms and conditions
herein set forth.
T E R M S:
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. RIGHT OF FIRST REFUSAL. Publisher hereby grants Co-Publisher the
right of first refusal to co-publish with Publisher and distribute in the United
States any and all published materials Publisher desires to have
published/distributed in the United States (hereinafter individually a "Book"
and collectively "Books").
Publisher will supply Co-Publisher with three (3) folded and gathered
sheets, and/or three (3) review copies, of each Book Publisher wants
published/distributed in North America, at no cost to Co-Publisher. At the same
time, Publisher will supply Co-Publisher with the title, name of the author and
illustrator, Unit Price (defined below), and the proposed delivery date of the
Book.
Co-Publisher shall inform Publisher of Co-Publisher's election whether
to publish each Book within thirty (30) days after Co-Publisher receives the
Book from Publisher for review, and the other information described in the
preceding paragraph. Publisher will supply Co-Publisher with 130 folded and
gathered sheets, and/or 130 review copies, of each Book Co-Publisher elects to
publish in North America, at no cost to Co-Publisher.
Books selected by Co-Publisher for publication under this Agreement
will be published under and with the name and imprint "Little Tiger Press USA,
L.L.C."
If Co-Publisher elects not to publish any Book offered by Publisher,
then Publisher shall have the right to pursue alternative publication/
distribution for such Book; provided, however, that the terms offered to an
alternative co-publisher/distributor shall not be more favorable than the terms
offered by Publisher to Co-Publisher.
2. APPOINTMENT AND TERRITORY. Publisher hereby grants Co-Publisher the
right to
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publish, distribute and sell each Book selected by Co-Publisher under Section 1
above exclusively throughout North America. Co-Publisher's right to publish any
Book in other territories shall be subject to the prior written consent of
Publisher.
Co-Publisher shall not, without the prior written consent of Publisher,
which consent may be withheld for any reason or no reason, print or authorize
the printing of copies of any Book other than by Publisher.
Co-Publisher shall promote the sale of each Book actively throughout
the territory granted to Co-Publisher under this Agreement.
Publisher and Co-Publisher agree to co-publish the 1998 Spring and Fall
Front Lists, copies of which are attached hereto as Exhibit "A" and hereby made
a part hereof, at the pricing shown on said Exhibit, and further agree that the
rights to reprints of Publisher's "back list" are covered by and subject to this
Agreement.
3. MANNER OF PURCHASING.
(a) Co-Publisher shall have the option to purchase copies of each Book,
on a title-by-title basis, from Publisher, on a firm sale basis, on terms for
said purchases as described in Section 4 below. The details of Book orders shall
be set out from time to time on purchase orders (hereinafter "Purchase Orders")
issued by Co-Publisher.
(b) As used in this Agreement, and on any Purchase Order, the following
terms shall have the following meanings:
(i) "Book": One of Publisher's book titles, copies of which
are to be published/purchased by Co-Publisher, as further
described in Section 1 above.
(ii) "Unit Price": The price to Co-Publisher, inclusive of
royalty and delivery (C.I.F. to New York), of each copy of a
Book.
(iii) "Quantity": The initial quantity of copies of a Book
ordered by Co-Publisher, as specified in a Purchase Order for
such Book.
(iv) "Delivery Date": The date for bulk delivery of the
Quantity of a Book, as specified in the Purchase Order for
such Book.
(v) "Imprint": The "Little Tiger Press" imprint.
(c) Co-Publisher shall notify Publisher of the proposed release dates
of each Book. Co-Publisher shall release each Book within three (3) months of
delivery of the Quantity ordered of such Book, unless Co-Publisher is prevented
from doing so by circumstances beyond Co-
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Publisher's control, in which event Publisher shall be notified in writing and
the period permitted for release shall be extended by the duration of such
circumstances.
(d) Except as may otherwise be specified in this Agreement, all details
of publication, sale and advertisement of each Book, and the number and
destination of free copies, shall be at the sole discretion and expense of
Co-Publisher.
4. FIRM SALES.
(a) Unless otherwise agreed upon by the Publisher and Co-Publisher,
all sales under this Agreement will be firm sales. Firm sales are direct,
outright purchases of Books from Publisher by Co-Publisher, as opposed to
consignment sales. The details of each purchase shall be identified on a
Purchase Order.
The Unit Price of each Book, as offered by Publisher, is based upon the
cost of paper and printing as of the date of the offer relating to such Book. If
such costs have increased by more than 5% at the time the Book goes to print,
one-half of the increase in cost per copy in excess of 5% shall be added to the
Unit Price per copy for such Book. If the increase in cost would not have been
incurred but for a delay in printing caused by Co-Publisher's failure to perform
its obligations under this Agreement, Co-Publisher shall bear the entire
increase in cost.
(b) Co-Publisher shall pay Publisher the total Unit Price for each
Book received, within fifteen (15) days after receipt of the Book by
Co-Publisher.
(c) Publisher shall supply to Co-Publisher, as ordered by
Co-Publisher, 10% additional jackets/covers for each hard cover Book purchased
by Co-Publisher, at no charge to Co-Publisher. The purchase price for
jackets/covers ordered in excess of said 10% shall be 100% of Publisher's direct
out-of-pocket costs for the jackets/covers, payable in full within fifteen (15)
days after receipt by Co-Publisher of the jackets/covers. Extra jackets/covers
sales, like Book sales, will be firm sales - not returnable.
(d) If Co-Publisher requires copies of any Book additional to those
ordered on any Purchase Order, such further copies shall be ordered from
Publisher and supplied to Co-Publisher at a price and on other terms subject to
mutual agreement by the parties.
(e) Legal title to copies of each Book and other materials delivered
to Co-Publisher shall pass to Co-Publisher upon receipt by Co-Publisher of the
Book or other materials. Risk of loss or damage with respect to copies of each
Book or other materials delivered to Co-Publisher shall pass to Co-Publisher
upon receipt by Co-Publisher of the Book or other materials.
(f) Initial and reorder quantities for Books will not be less than
5000 copies per Book, unless otherwise agreed to by the parties.
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5. PRODUCTION, PRINTING AND DELIVERY.
(a) Publisher will send Co-Publisher for approval (such approval not
to be unreasonably withheld or delayed), ozalids of each Book.
(b) Subject to timely performance by Co-Publisher of Co-Publisher's
obligations under this Agreement, Publisher shall arrange for the printing of
the Quantity of Books ordered for delivery to Co-Publisher by the Delivery Date,
unless Publisher is prevented from doing so by circumstances beyond Publisher's
control, or unless otherwise mutually agreed.
(c) Delivery to Co-Publisher of up to 10% under or over the Quantity
of any Book shall constitute good delivery, and Co-Publisher shall pay for the
actual number of copies received.
(d) Co-Publisher shall notify Publisher in writing of Co-Publisher's
requirements, if any, with respect to advance copies, extra covers or jackets,
and folded and gathered sheets.
(e) Co-Publisher shall not insert within or on the cover or jacket
of any edition of any Book, any advertisement, other than information about
other Books published by Publisher, without the prior written consent of
Publisher.
(f) Each party will discuss with the other opportunities regarding
co-op and promotional advertising, as those opportunities arise, and the parties
may, but are not obligated to, agree to share the costs thereof.
6. ACCOUNTING MATTERS. All monies due to Publisher shall be paid by
mail or telegraphic transfer to Publisher's bank account at Barclays Bank,
Heathrow Airport Business Centre, Cardinal Point, Newall Road, Heathrow Airport
(London), Hounslow, TVV6 2AH, England (Account #: 69521277. Sort Code: 20-38-83.
Shift code: BARC GB 22). Co-Publisher shall ensure that all remittances or
notifications of remittance shall detail the names of Co-Publisher and
Publisher, the title of the Book(s), and, if applicable, Publisher's invoice
number.
7. FREIGHT. All Books will be shipped C.I.F. to New York in care of
Co-Publisher's freight forwarder. Co-Publisher will be responsible for customs
and transportation charges from New York to Co-Publisher's facilities.
8. SHIPPING SERVICES. From time to time Publisher may request
Co-Publisher to ship stock of Co-Publisher's books held by Co-Publisher to fill
orders placed by Publisher's other customers. All such orders shall be for
full-case quantities to a single shipping location. Co-Publisher will charge
Publisher, in fulfillment of any such order, the actual cost of shipping plus a
handling charge of 1% of the value of such order. Publisher shall also
reimburse Co-Publisher for any portion of the purchase price paid by
Co-Publisher to Publisher for the Books so sold, and for all of Co-Publisher's
out-of-pocket costs for such Books. Such charges shall
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be deducted from monthly payments due to Publisher from Co-Publisher under this
Agreement.
9. PACKAGING SPECIFICATIONS. Publisher agrees to package all Books
shipped to Co-Publisher under this Agreement in case packs of 30 copies unless
otherwise mutually agreed to by the parties. Each carton will have the following
information clearly marked on the outside of the carton: Publisher Imprint:
Little Tiger Press; ISBN:_______; Title: _______; Number of Copies: _______;
Co-Publisher's Product No.: _______.
10. IMPRINT; COPYRIGHT. Co-Publisher shall inform Publisher promptly of
any infringement of the copyright in any Book of which Co-Publisher becomes
aware. Co-Publisher will take all reasonable steps, including registration where
applicable, to protect the copyright in each Book in the territories granted to
Co-Publisher under this Agreement.
11. RESERVED RIGHTS. All rights in each Book, other than those
specifically granted to Co-Publisher under this Agreement, are reserved by
Publisher.
12. TERM; TERMINATION. This Agreement shall be effective immediately
and automatically on the "Contingency Expiration Date," as that term is defined
in that certain Operating Agreement for Little Tiger Press USA, L.L.C., dated of
even date herewith, executed by Futech Educational Products, Inc. and Magi
Publications. This Agreement shall continue thereafter until terminated in any
one of the following ways:
(a) If Co-Publisher is at any time in breach of any of the terms and
conditions of this Agreement, and Co-Publisher fails to cure such breach within
thirty (30) days after receipt by Co-Publisher of written notice from Publisher
specifying the breach and requiring that it be cured.
(b) If Co-Publisher is declared bankrupt or goes into liquidation
(other than solvent voluntary liquidation for the purpose of reconstruction
only), or if a receiver or administrator or administrative receiver is appointed
to the whole or substantially the whole of Co-Publisher's business, or if
Co-Publisher shall make an assignment for the benefit of creditors, then
Publisher may terminate this Agreement if Co-Publisher fails to cure such breach
within thirty (30) days after receipt by Co-Publisher of written notice from
Publisher specifying the breach and requiring that it be cured.
(c) If Co-Publisher ceases to trade as a publisher/distributor or is
for any reason unable to perform and comply with the terms and conditions of
this Agreement.
(d) If Co-Publisher allows any Book to go out of stock (to the
extent that Co-Publisher has less than 50 copies of such Book in stock), and to
remain out of stock for 6 months, then Publisher may terminate this Agreement
with respect to such Book only.
(e) If Co-Publisher shall dispose of all remaining stock of a Book
by remaindering or destruction, then Publisher may terminate this Agreement with
respect to such
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Book only.
Any termination of this Agreement by either party shall not affect
the obligations of either party under this Agreement to pay the other party
amounts owing in connection with performance under this Agreement prior to the
termination. The termination of this Agreement by either party shall not
prejudice any claim which either party has against the other.
13. ASSIGNMENT. Co-Publisher shall not, without the prior written
consent of Publisher, assign or in any way transfer Co-Publisher's rights
granted hereunder, in whole or in part, nor issue or permit issue of any Book
over any imprint other than the Imprint.
14. NATURE OF RELATIONSHIP. The relationship the parties intend to
create is that of principal and independent contractor, and nothing herein is
intended, nor shall it be construed, to create a relationship of partnership,
joint venture, or employer/employee between the parties. Publisher shall not
have the right to direct the specific daily activities or practices of
Co-Publisher nor the manner in which Co-Publisher conducts Co-Publisher's
affairs.
15. NOTICES. Any notice or communication given under the terms of this
Agreement ("Notice") shall be in writing and shall be given by any of the
following means and shall be deemed to have been received as follows:
(i) If by hand delivery, upon delivery;
(ii) If by pre-paid mail, 48 hours after posting, or if the
intended recipient party is in a country other than that of
the sender, on the seventh day after dispatch (Saturdays,
Sundays and public holidays excluded); or
(iii) If by telex, facsimile or other system which prints the
notice at the receiving end, if the sender has an
acknowledgment from the recipient of its receipt in readable
form, upon receipt of such acknowledgment;
provided, however, that no Notice shall be deemed to have been received unless
addressed to the addresses appearing below, or such other address provided to
the other party by Notice:
If to Publisher:
Magi Publications
22 Manchester Street
London W1M 5PG, England
Facsimile: 011-44-171-486-0926
If to Co-Publisher:
Little Tiger Press USA, L.L.C.
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2999 North 44th Street, Suite 225
Phoenix, Arizona 85018-7247
Facsimile: (602) 808-9863
Notice given on a Saturday, Sunday or public holiday, or outside normal business
hours, shall not be deemed given until commencement of the next normal business
hours.
16. ENTIRE AGREEMENT. This Agreement is intended by the parties to be
the final expression of their agreement and a complete and exclusive statement
of its terms. No prior course of dealings between the parties and no usage of
trade shall be relevant or admissible to supplement, explain, or vary any of the
terms of this Agreement. Acceptance of, or acquiescence in, a course of
performance rendered under this or any prior agreement shall not be relevant or
admissible to determine the meaning of this Agreement even though the accepting
or acquiescing party has knowledge of the nature of the performance and an
opportunity to make objection. No representations, understandings, or agreements
have been made or relied upon in the making of this Agreement other than those
specifically set forth herein. This Agreement can be modified only by writing
signed by all of the parties hereto.
17. MISCELLANEOUS. This Agreement contains the entire Agreement between
the parties with respect to the subject matter discussed in this Agreement, and
any prior arrangements or negotiations relating thereto are superseded by this
Agreement. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Arizona, without giving effect to the
conflict laws thereof. The courts of the State of Arizona shall have the sole
and exclusive jurisdiction and venue in any case or controversy arising under
this Agreement or by reason of this Agreement. The parties agree that any
litigation or arbitration arising from the interpretation or enforcement of this
Agreement shall be only in either Maricopa County Superior Court or in the
United States Federal District Court for the District of Arizona, and for this
purpose each party to this Agreement (and each person who shall become a party)
hereby expressly and irrevocably consents to the jurisdiction and venue of such
courts. This Agreement shall be construed according to its fair meaning and
neither for nor against the drafting party. If arbitration or other legal action
is instituted in connection with this Agreement, the prevailing party in such
action shall be entitled to recover from the other party reasonable attorneys'
fees and costs. The parties agree to accept facsimile signatures in counterparts
to this Agreement, and that said facsimile signatures shall for all purposes be
binding upon the parties as if the same were originals. The failure of a party
to require the performance of any term of this Agreement, or the waiver by a
party of any breach of this Agreement, shall not prevent a subsequent
enforcement of such term nor be deemed a waiver of any subsequent breach. The
remedies and payments provided for in this Agreement are not exclusive of other
remedies available to the parties. Every provision of this Agreement is intended
to be severable. If any term of provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of this Agreement. Time is of the essence of each and every
provision of this Agreement. Titles and headings of sections of this Agreement
are for convenience of reference only, are not intended to define, limit or
describe the scope or intent of any provision of this Agreement, and shall not
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affect the construction of any provision of this Agreement.
DATED the date first hereinabove written.
PUBLISHER: Magi Publications, a partnership
By /s/ Manmohan Singh Bhatia
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Manmohan Singh Bhatia, Partner
CO-PUBLISHER: Little Tiger Press USA, L.L.C.,
a New York limited liability company
By: Magi Publications,
a partnership, Member
By /s/ Manmohan Singh Bhatia
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Manmohan Singh Bhatia, Partner
By: Futech Educational Products, Inc.,
an Arizona corporation, Member
By /s/ Vincent W. Goett
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Vincent W. Goett, CEO
List of Exhibits
1998 Spring and Fall Front List "A"
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LITTLE TIGER PRESS, USA
FRONT LIST PUBLISHING SCHEDULE FALL '98
Order Retail Futech/
Title Format Quantity Price LTP Cost Ext Cost XYZ Price W/S Turnover Ex-Works
- ----- ----------- -------- ------ -------- -------- --------- ------------ ---------
In Could Have Been Worse Hardback 15,000 $14.95 $3.75 56,250 $5.23 78,450 Dec '97
A Duck So Small Hardback 10,000 $14.95 $3.75 37,500 $5.23 52,300 Dec '97
You Won't Think of Me at All Hardback 10,000 $14.95 $3.75 37,500 $5.23 52,300 Dec '97
Beware of the Bears Hardback 15,000 $14.95 $3.75 56,250 $5.23 78,450 Dec '97
The Lion Who Wanted to Love Hardback 12,000 $14.95 $4.10 49,200 $5.23 62,760 Nov '97
Look Out for the Big Bad Fish Hardback 15,000 $14.95 $3.75 56,250 $5.23 78,450 Dec '97
Tommy Hardback 15,000 $16.95 $4.40 66,000 $5.93 88,950 Dec '97
I Don't Want to Take a Bath! Board Book 25,000 $ 6.95 $1.75* 43,750 $2.43 60,750 Jan '98
I Don't Want to Go to Bed! Board Book 25,000 $ 6.95 $1.75* 43,750 $2.43 60,750 Jan '98
Tim's Animal Stories 96 page H/B 15,000 $16.95 $4.25 63,750 $5.93 88,950 Jan '98
Animals All Around
Laura's Star Reprint** Hardback 50,000 $16.95 $4.40 220,000 $5.93 296,500 June '98
Rumble in the Jungle Reprint** Hardback 15,000 $14.95 $4.10 61,500 $5.23 78,450 June '98
Magi Various Reprints** Hardback 60,000 $14.95 $3.75 225,000 $5.23 313,800 June '98
PAPERBACK
I Don't Want to Take a Bath! Paperback 25,000 $ 5.95 $1.20 $2.08
Dora's Eggs Paperback 15,000 $ 5.95 $1.20 $2.08
TOTAL 307,000 960,450 1,390,860
* Price to be finalized
** Quantities, dates and titles to be finalized
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Exhibit "A". Page 2 of 2
LITTLE TIGER PRESS, USA
FRONT LIST PUBLISHING SCHEDULE FALL '98
Order Retail Futech/
Title Format Quantity Price LTP Cost Ext Cost XYZ Price W/S Turnover Ex-Works
- ----- ------ -------- ------ -------- --------- --------- ------------ ---------
Hurry Santa Hardback 40,000 $14.95 $3.60 144,000 $5.23 209,200 June '98
Mouse, Look Out Hardback 10,000 $14.95 $3.75 37,500 $5.23 52,300 June '98
One Two Three Oops** Hardback 15,000 $14.95 $3.75 56,250 $5.23 78,450 June '98
Little Bunny Bobkin Hardback 15,000 $14.95 $4.10 61,500 $5.23 78,450 March '98
Bedtime for Little Hare Hardback 20,000 $14.95 $3.75 75,000 $5.23 104,600 June '98
Smudge** Hardback 15,000 $14.95 $3.75 56,250 $5.23 78,450 July '98
Commotion in the Ocean Hardback 20,000 $14.95 $4.10 82,000 $5.23 104,600 July '98
A New Hardback*** Hardback 15,000 $14.95 $4.10 61,500 $5.23 78,450 July '98
Santa's Large Board Book Board Book 25,000 $12.95 $3.20* 80,000 $4.53 113,250 Aug '98
Tiger's Large Board Book Board Book 25,000 $12.95 $3.20* 80,000 $4.53 113,250 Aug '98
Tim's Bear Stories 96 page H/B 15,000 $16.95 $4.25 63,750 $5.93 88,950 June '98
Little Tiger Cloth Book 1 Cloth Book 25,000 $19.95 $6.00* 150,000 $8.00* 200,000 July '98
Little Tiger Cloth Book 2 Cloth Book 25,000 $19.95 $6.00* 150,000 $8.00* 200,000 July '98
PAPERBACK
Beware of the Bears Paperback 25,000 $ 5.95 $1.20 $2.08
It Could Have Been Worse Paperback 15,000 $ 5.95 $1.20 $2.08
TOTAL 305,000 1,097,750 1,499,950
* Price to be finalized
** Pub date to be confirmed
*** Titles to be confirmed