PRODUCT AGREEMENT # 3
Pursuant to the MASTER AGREEMENT TO DEVELOP, PUBLISH AND SELL PRODUCT entered
into between PEOPLE'S EDUCATION PRESS, ("PEP") and LINGO MEDIA INTERNATIONAL
INC., (formerly "International Alpha Media Inc." now hereinafter called "Lingo
Media) dated the___, day of January 2001, the parties agree to enter into this
Product Agreement with respect to the Product and agree as follows:
Article 1 The Product
The parties agree to Develop and Produce a Product being works provisionally
entitled: "Beginning English For Young Learners!" written by David Booth, Jack
Booth, Larry Swartz, Linda Booth, Meng Yanjun, Zhang Lingdi and Lin Li.
Article 2 The Market
PEP acknowledges that it has rights with the Ministry of Education to publish
and sell English as a Foreign Language student textbooks, teacher resource
books, audio cassettes and other related Products under the new curriculum to be
implemented September 2001 or earlier. These rights include the Grades 1 -2
markets in China on a nation-wide basis. PEP agrees that it will publish and
sell Lingo Media's Products on an exclusive basis for the market defined above
with the exception of the current EFL series, published by PEP and originally
developed with Pan Pacific Publishing Co. Ltd (Singapore).
Article 3 Development of the Product
The party responsible for the Development has been Lingo Media. The parties
agree that Lingo Media has produced final manuscripts/content for each specific
Product and that PEP has the final approval of the manuscript.
Article 4 Production of the Product
The party responsible for Production shall be PEP.
Article 5 Copyright Ownership of the Product
The copyright in the works of the Product shall be owned jointly by the parties
in the PEP Territory only, in accordance with the terms hereof. Lingo Media
remains 100 percent of the copyright ownership of the Product outside the PEP
Territory. In the event of copyright infringement in the PEP Territory, each
party will notify the other party in writing. The parties agree to jointly
pursue appropriate action, which may or may not include legal recourse.
Article 6 The Quality of Content of the Product
The parties agree that the quality of the content of the Product has conformed
to the standards set by the Ministry of Education
Article 7 The Quality of Production of the Product
The parties agree that the quality of production of the Product shall conform to
mutually agreed upon standards in writing.
Article 8 The Sale Price of the Product
The parties agree that the List Price of the Product shall not be less than the
following:
7 RMB per unit for each student textbook..
_____ RMB per unit for each teacher resource book
7 RMB per unit for each audio cassette
_____ RMB per unit for each ________________
_____ RMB per unit for each ________________
_____ RMB per unit for each ________________
Article 9 The Quantity of the Product
The parties agree that PEP shall sell not less than the following quantities per
calendar year:
250,000 units of each student textbook
2,500 units of each teacher resource book
250,000 units of each audio cassette
________ units of each _______________
________ units of each _______________
________ units of each _______________
Article 10 Distribution of the Product
The parties agree that PEP shall be responsible for distribution of the Product
in the PEP Territory which includes the People's Republic of China.
Article 11 Places for Promotion of the Product
The parties agree that the Product shall be promoted throughout China on a
countrywide basis
Article 12 Authors Copies
The authors shall be furnished free of charge, six (6) copies of the Works as
originally published and any additional copies desired by the Authors for their
personal use shall be supplied at a discount of thirty-five (35%) percent from
the List Price.
Article 13 Remuneration of the Parties
The revenues received by the parties from the sales of the Product shall be
divided between the parties as follows:
(i) for the sales of finished product by PEP, Lingo Media shall receive ten
percent (10%) based on the Gross Sales and PEP shall retain the balance.
(ii) For the sales of copyrights and/or film rights by PEP, Lingo Media shall
receive forty percent (40%) of the royalties received by PEP and PEP shall
retain sixty percent (60%) of the royalties. The copyrights or film rights
sales will not be less than a minimum percentage, which is regulated by the
Chinese government, of the List Price printed on Finished Product(s)
shipped.
Each party will be responsible for the remuneration of their authors. For Lingo
Media, the authors include the Booth author team and for PEP, the authors will
include Meng Yanjun, Zhang Lingdi and Lin Li.
Article 14 Subsidiary Rights
In accordance with the terms of the above mentioned Agreement, the parties have
the joint right to exercise and dispose of all subsidiary rights in the works
for the PEP edition, now or hereafter known, in all languages, forms and media
throughout the world, including the following: rights for translations,
quotations, excerpts (including illustrations), reprint editions, and sales of
sheets; microfilm, microfiche, recording, filmstrip, motion picture, and
broadcasting rights; rights for use in information storage, processing,
transmission and retrieval systems. Any net gain received from the disposition
of such subsidiary rights shall be divided between PEP and Lingo Media with
sixty percent (60%) to PEP and forty percent (40%) to Lingo Media, after
deducting the costs applicable thereto. Electronic rights are specifically
excluded and shall be owned jointly by both parties in the PEP Territory.
Article 15 Statement of Sales
In accordance with the MASTER AGREEMENT TO DEVELOP, PUBLISH AND SELL PRODUCT,
PEP shall provide to Lingo Media a Statement of Sales. PEP shall pay to Lingo
Media all money due to Lingo Media in US dollars within 30 days following the
last day in each of March, June, September and December of each year being the
royalty revenue from finished product sales and share of copyright and/or film
rights sales revenue for the Product in that preceding period of three (3)
months.
Article 16 Termination
In accordance with the terms of MASTER AGREEMENT TO DEVELOP, PUBLISH AND SELL
PRODUCT, a Developing Party may, after Development and Production of a Product,
terminate the relevant Product Agreement if PEP is not able to sell a minimum
number of units per title per calendar year as indicated in Article 9.
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: LINGO MEDIA INTERNATIONAL INC.
___________________________ ) Per: __________________________________
Witness )
) Name: __________________________________
)
) Date: __________________________________
___________________________ ) Per: __________________________________
Witness )
) Name: __________________________________
)
) Date: __________________________________
PEOPLE'S EDUCATION PRESS
___________________________ ) Per: __________________________________
Witness )
) Name: __________________________________
)
) Date: __________________________________
___________________________ ) Per: __________________________________
Witness )
) Name: __________________________________
)
) Date: __________________________________