MASTER AGREEMENT TO DEVELOP, PUBLISH AND SELL PRODUCT
This agreement made the_____ day of August 2000
Between Party A:
PEOPLE'S EDUCATION PRESS of 55 Sha Tan Hou Street, Beijing 100009,
China.
- -and- Party B:
INTERNATIONAL ALPHA MEDIA, INC.(name to be changed to LINGO MEDIA INTERNATIONAL,
INC. a subsidiary of ALPHA COMMUNICATIONS CORP. name to be changed to LINGO
MEDIA INC.) of `Sunstead' 9 Farringdon Close Paradise Heights St. James,
Barbados.
Whereas:
(a) The parties have an interest in Developing and Producing Product for sale
in the China market;
(b) The parties agree to co-operate to Develop and Produce Products as
specified in the Project Agreement that may be entered into between the
parties from time to time.
The Parties agree as follows:
Article 1 Definitions
In this agreement and any Product Agreement the following terms shall have the
following meanings:
a "Agreement" means the present Agreement, as amended from time to time, as
well as all Schedules and Appendices attached hereto or which the Parties
may later agree to attach hereto and any Product Agreement(s) entered into
between the Parties;
b "Alpha Territory" means, unless otherwise specified in the product
agreements, the World market except the PEP Territory;
c "Approval" means any approval, authorization, consent, waiver, or other
similar official act granted by any Government Authority and required for
any matter contemplated by this Agreement;
d "Confidential Information" means all information obtained by or disclosed
by one party to another that relates to that party's or its customers past,
present or future research, development and business activities including
the results from performance of this Agreement but not including
information previously known to the other party or within the public
domain;
e "Cost of Goods Sold" means actual development costs and hard manufacturing
costs;
f "Develop or Development" means the engagement of authors to write the
content of the Product, and the giving of editorial direction to the
writing of the authors;
g "Developing Party" means that party which is responsible for the
Development of a Product under a Product Agreement, being Party B in
conjunction with Party A;
h "Finished Product" means printed books, duplicated audio cassettes,
duplicated videos, pressed CD-ROMs, pressed SVCDs, pressed DVDs and other
manufactured published product;
i "Governmental Authority" means any ministry, department, bureau, office or
other legally constituted organ of any Government;
J "Gross Profit" means gross sales less Cost of Goods sold as defined above;
k "Gross Sales" means total number of units sold multiplied by the list price
of the product;
l "List Price" means price printed or marked on the Product;
m "Net Sales" means Gross Sales less any discounts as specified and agreed to
in Product Agreement(s);
n "Parties" means the parties to this Agreement as well as their permitted
successors and assigns;
o "PEP Territory" means, unless otherwise specified in the Product
Agreement(s) the People's Republic of China not including Hong Kong and
Macau;
p "Produce or Production" means carrying out all matters relating to the
publication of the Product and necessary to make the Product ready for
shipment to the customer in its final form including but not limited to the
formatting, printing, binding, cover design and supply of the paper or
duplicating and packaging of the Product;
q "Producing Party" means that party which is responsible for Production
under a Product Agreement;
r "Product Agreement" means an agreement entered into pursuant to Article 4
of this Agreement;
s "Publication" means publication or material in any medium as agreed in a
Product Agreement;
Article 2 Co-Appointment of Publishers
In addition to the rights and obligations hereunder, Party B appoints and
authorizes Party A to co-operatively publish Product(s) in the PEP Territory
only.
Article 3 Co-Operative Projects
The parties agree to co-operate to Develop, Produce and sell Product in
accordance with this Agreement and any Product Agreement(s) that may be entered
into between the parties from time to time.
Article 4 Product Agreement
(a) When the parties wish to Develop, Produce and sell a Product, the
parties shall enter into Product Agreements(s) with respect to that
specific Product the terms of which shall include but not be limited to
the following:
(i) the content quality standard of the Product;
(ii) the Production quality of the Product;
(iii) the responsibility and costs for distribution of the Product;
(iv) the promotion of the Product;
(v) the List Price of the Product;
(vi) the wholesale terms of sale of the Product to third parties; and
(vii) the payment of money to each party.
(b) Any Product Agreement shall form an integral part of this Agreement
Article 5 Development of the Product
The Developing Party agrees to Develop Product(s) in accordance with this
Agreement and the relevant Product Agreement(s).
Article 6 Costs in Developing the Product
(a) In the case of Product the content of which is primarily in the English
language, Party B shall be responsible for all developmental costs but
not any payment of money to the authors appointed by Party A (if
applicable) incurred up to and including final version of the Product.
Any exception for a particular product will be agreed to by both
parties in writing.
(b) In the case of Product the content of which is primarily in the Chinese
language, Party A shall be responsible for all developmental costs (but
not any payment of money to the authors appointed by Party B) incurred
up to and including final version of the Product. Any exception for a
particular product will be agreed to by both parties in writing.
Article 7 Consulting in Development of the Product
Party B shall regularly consult with Party A during the Development of the
Product.
Article 8 Assistance with Development
Party B may, in the course of Development, request Party A to assist Party B in
the Development of the Product by engaging authors to assist in the writing or
editing of the Product. Party A agrees to engage authors at its own cost to
assist Party B in the writing or editing of the Product. Party A shall only
request Party B to assist with the English language elements of the Development
and Party B shall only request Party A to assist with the Chinese language
elements of the Development.
Article 9 Illustrations
The cost of producing any illustrations shall be borne by Party A and Party A
shall obtain an assignment of copyright to Party A and Party B from the author
of the illustrations.
Article 10 Production of the Product
Party A agrees to produce the Product in accordance with this Agreement and the
relevant Product Agreement. Party A shall produce the Product within the number
of days specified in each Product Agreement after supplied with the Product as
Developed by Party B unless otherwise agreed between the parties in writing.
Article 11 Naming Rights
Party A undertakes to set the name of the authors (if appropriate), imprint
names and logos of both parties in its customary form with equal prominence
including Party B's or its subsidiary's URL/Website address on the front and
back cover, title page, copyright page, and jacket (if applicable) on every copy
of the Product manufactured or licensed to third parties by Party A.
Article 12 Cost of Producing the Product
Unless the parties agree otherwise in the relevant Product Agreement:
Party A shall be solely responsible for Producing and paying all Production
costs if the Product is produced for distribution in the Party A Territory.
Article 13 Consultation in Production
Party A shall, in Production of the Product, consult with Party B on all matters
in accordance with this Agreement and the Product Agreement(s). Party A agrees
not to produce the Product without the written agreement of Party B as to the
final editing, illustration and photography (if applicable), formatting, paper,
binding and cover design.
Article 14 Quality of the Content of the Product
The parties hereby appoint Party B to determine the final quality of the content
of the Product.
Article 15 Other Costs
Except as otherwise provided in Articles 6, 12 and 17 hereof Party A shall be
responsible for all other costs incurred in the Party A Territory or in
connection with the Product warehoused or sold in the Party A territory
including but not limited to inventory control, establishment and operation of
order departments, billing, credit and collections, warehousing and shipping to
the customer(s).
Article 16 Promotional Activities
In addition to any obligations relating to promotional activities in a Product
Agreement(s), Party A shall also be responsible for carrying out promotion of
the Product in any and all book stores, primary and secondary schools,
universities, other educational institutions and direct to consumer channels in
the PEP Territory
Article 17 Promotional Expenses
As specified in the Product Agreement(s).
Article 18 Taxes
Party A shall pay all taxes of any kind, applicable to the sale of the Product
imposed or assessed in the PEP Territory. Party B shall be responsible for any
applicable taxes on its royalties received from Party A in the PEP Territory
unless otherwise specified in the Product Agreement.
Article 19 Sale of the Product
(a) Both Parties shall have the rights to sell a Product and Party A shall be
obliged to sell a Product in the PEP Territory;
(b) Any sale of a Product to a third party shall only be carried out after
written notice to the other Party as to the quantity of the Product
proposed to be sold;
(c) Any sale of the Product to a third party shall be at the sale price and in
accordance of the terms of sale of the Product as agreed between the
parties in the relevant Product Agreement.
Article 20 Receiving of Money
Party B hereby authorizes and empowers Party A to sell Products and receive all
sums for the sale of the Product in accordance with the terms of this Agreement
unless otherwise specified in the Product Agreement.
Article 21 Payment of Money
Party A agrees that any money received by Party A from the sale of a Product
shall be shared between the Parties in the proportions as specified in the
relevant Product Agreement.
Article 22 Statement of Sales
(a) Party A shall prepare semi-annual statements of sales detailing all
sales of finished product and all sales of copyrights and/or film
rights and such statements shall be delivered to Party B within 10
business days following December 31 and June 30 for each calendar year
unless otherwise specified in the Product Agreement.
(b) Upon reasonable written notice and during Party A's normal business
hours, Party B or its authorized representative or appointed auditor
shall have the right to examine Party A's records at that place at
which they are normally kept, in so far as such records relate to the
sales and receipts in respect of the Product. Such examination shall be
at the cost of Party B, but in which case there is in excess of 2.5% of
the amount due to Party B, the cost of such examination (including the
cost of any domestic and international travel and accommodation) shall
be borne by Party A. Any amount shown to be due shall be paid forthwith
by Party A to Party B unless otherwise specified in the Product
Agreement.
Article 23 Engagement and Payment of Authors
(a) Each party shall, from time to time and within its own discretion, in
accordance with the terms hereof, engage its own authors to develop or
to assist in the development of a Product and shall obtain an
assignment of the copyright from the authors. Any exception for a
particular Product will be agreed to by both parties in writing.
(b) Each party shall pay the monies due to the authors it has engaged. No
party shall have financial responsibility to the authors engaged by the
other party. Any exception for a particular Product will be agreed to
by both parties in writing.
Article 24 Training Assistance
After completion of Production of a Product by Party A and subject to an
agreement regarding costs, Party B shall, if requested and subject to written
confirmation, assist Party A in the training in China of Party A's personnel in
marketing and selling of the Product including the setting up and conducting of
workshops in China for key educators by Party B's authors unless otherwise
specified in the Product Agreement.
Article 25 Meetings Abroad
During the Development and sale of the Product it will be necessary, from time
to time, to hold meetings between personnel of Party A and Party B, authors,
editors and production consultants either in Canada or China. The parties will
share the expenses equally.
Article 26 Approvals
Party A agrees to obtain all Approvals from the Chinese Government necessary for
the Agreement and any Product Agreement to come into effect and, to allow the
sale of Product in China.
Article 27 Foreign Exchange
Party A agrees that it shall obtain all Approvals necessary for the payment to
and shall pay to Party B all sums due in US dollars. When Party A receives sums
of money in RMB it agrees that the portion of that sum of money payable to Party
B shall, at Party A's expense, be converted to US dollars at the rate for
exchange of RMB cash to US dollars cash offered by the Bank of China on the
final day of the quarter in which Party B received the sum of money.
Article 28 Ownership of Copyright in the Products
Party B shall own the copyright in the works written by the authors engaged by
it in the Development of the Product except for the Party A Territory, Party B
and Party A will jointly own the copyright for the edition published in the PEP
Territory as further defined in the Product Agreement(s).
Each party shall do all acts necessary so that the copyright is held jointly by
Party A and Party B for the edition published in the PEP Territory. For all
markets outside the PEP Territory, Party B shall own 100% of the copyright
ownership and Party A agrees to provide a duplicate set of Product film or
Masters to Party B at cost, if requested in writing unless otherwise specified
in the Product Agreement.
Article 29 Disposal of Surplus Stock
The Parties may agree between them in writing that a Product has ceased to have
sufficient sales to justify stockage costs and to sell the remaining stock on
hand at a discount price or to divide the remaining stock equally between them.
Article 30 Termination
(a) A party may terminate this Agreement and the Product Agreement(s) if the
other party breaches a material term of this Agreement or Product
Agreement(s) and the other party fails to remedy the breach with 30 days of
receiving notice by the Party to remedy the breach.
(b) Party B may, after Development and Production of a Product, terminate the
relevant Product Agreement if Party A is not able to sell a minimum number
of copies per title of Product per calendar year as outlined in the
attached Product Agreement unless otherwise specified in the Product
Agreement.
(c) Either party may terminate the Agreement if an event of force majeure
exists for more than 60 days.
Article 31 Notices
All Notices given under this Agreement shall be deemed sufficiently served if
sent by both facsimile and registered post to any address given herein or at any
other address which such Party shall designate for the receipt of such
correspondence.
Article 32 Term of this Agreement
(a) The Agreement shall commence on the signing hereof and shall be valid for
10 years and if both parties agree, it will be automatically renewed.
(b) Any Product Agreement(s) entered between the parties pursuant to this
Agreement shall expire 10 years from the official publication date of each
Product, which follows the experimental publishing period for each Product
unless otherwise specified in the Product Agreement.
(c) Upon termination or expiration of this Agreement, the party, which is Party
A under a Product Agreement hereby, assigns its copyright in the Product
Developed and Produced pursuant to that Product Agreement to Party B under
that Product Agreement.
Article 33 Force Majeure
Neither party shall be liable for any delay or failure to perform arising from
any cause such as strikes, acts of God, war and civil unrest or other unforeseen
event of a similar nature.
Article 34 Independent Contractor
Each Party hereto is an independent contractor and is not an agent of the other.
Neither Party shall have the power to bind the other without express written
consent of the other, had and obtained in each instance. Neither Party shall
misrepresent or misstate its status hereunder.
Article 35 Compliance with Laws
Each Party hereto shall comply with all applicable laws, ordinances, rules,
regulations, proclamations and decrees of duly constituted governmental
authority.
Article 36 Assignment of the Agreement and Project Agreements
This Agreement and any Product Agreement(s) entered into pursuant hereto may not
be assigned without the prior written consent of the other Party and such
consent shall not be unreasonably withheld. The consent of Party A shall not be
required to the assignment by Party B of its rights and obligations under this
Agreement and the Product Agreement(s) to a wholly owned subsidiary or affiliate
of Party B.
Article 37 Confidential Information
Neither party shall disclose to any person the Confidential Information of the
other party.
Article 38 Proprietary Rights
Without limiting any other representations and warranties, each party represents
to the other that no copyright, trademark, trade name or other proprietary right
has been or will be infringed in the Development process, Production, sale,
delivery or use of the Product(s), and if such infringement is alleged or has or
does occur, the Party at fault shall indemnify and hold the other party harmless
from all claims, judgments, penalties, damages and expenses arising from such
allegations or findings of infringement.
Article 39 Entire Agreement
This Agreement and the Product Agreement(s) signed pursuant hereto constitute
the entire agreement between the parties and supersedes all previous agreements
and understandings between the parties in respect of the subject matter hereof
and may not be changed except by an amendment in writing duly signed by the
Parties.
Article 40 Choice of Laws
This Agreement shall be governed by and construed in accordance with the laws of
the People's Republic of China.
Article 41 Dispute Resolution
(a) The Parties shall strive to settle any dispute, controversy or claim
arising from the interpretation or performance of or in connection with
this agreement through friendly consultations. In case no settlement can be
reached within sixty (60) days of the submission of the matter by one party
to the other party, then such a matter may be submitted to the China
International Economic and Trade Arbitration Commission for arbitration in
accordance with its rules.
(b) The arbitrary panel should consist of three arbitrators, one chosen by each
of the parties with the third arbitrator to be selected by the arbitrators
but who shall be neither of Chinese nor Canadian nationality. Arbitration
shall be conducted in English. The arbitral award shall be final and
binding on the parties and shall be enforceable within its terms. Filing it
as a judgement in any court having jurisdiction may enforce the award and
application may be made to any court for assistance in enforcing the award.
The losing party shall pay arbitration expenses (including attorney fees).
(c) The parties agree that if it should become necessary for a party to enforce
an arbitral award by legal action of any kind, the Party Against which such
legal action is taken shall pay all reasonable costs and expenses and legal
fees, including but not limited to any cost of additional litigation or
arbitration incurred by the party in seeking to enforce the award.
Article 42 Representations and Warranties
The parties represent and warrant to each other that:
(a) It is a duly established and existing legal entity;
(b) It has full capacity and authority to execute and deliver the Agreement, to
complete the transactions, contemplated hereby and to duly observe and
perform all of its obligations herein;
(c) Neither the execution and delivery of this Agreement or any Product
Agreement(s) nor the completion of transactions hereunder will conflict
with our result in a breach of any of the provision of the charter
documents or any agreement to which it is bound, nor constitute a default
under any of the foregoing or violate any law, rule, regulation, judgment
or decree by which it is bound;
(d) This Agreement has been duly authorized, executed and delivered by it and
constitutes a legal, valid, and binding obligation enforceable against it
in accordance with its terms.
IN WITNESS WHEREOF, each of the Parties have duly executed this Agreement in
duplicate by their duly authorized representatives on the dates set forth below.
SIGNED, SEALED AND DELIVERED in the presence of:
PEOPLE'S EDUCATION PRESS
___________________________ ) Per: _________________________
Witness )
)
Name: _________________________
)
) Date: _________________________
___________________________ ) Per: _________________________
Witness )
)
Name: _________________________
)
) Date: _________________________
INTERNATIONAL ALPHA MEDIA, INC.
___________________________ ) Per: _________________________
Witness )
) Name: _________________________
)
) Date: _________________________
___________________________ ) Per: _________________________
Witness )
) Name: _________________________
)
) Date: _________________________