C O N T R A C T
AGREEMENT made effective as of August 1, 1996 by and between Aladdin Books
Limited 00 Xxxxx Xxxxxx Xxxxxx X0X-0XX (hereinafter called "Aladdin") of the one
part and The Millbrook Press Inc., 0 Xxx Xxx Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, XXX (hereinafter called the "Publisher") of the other part.
PART A
WHEREAS it is agreed generally between the parties as follows:
1) Aladdin shall make its best effort to create and produce no less than
50 titles a year, and Millbrook shall use its best efforts to purchase
no less than 50 titles a year, during the term of this Agreement for an
imprint, wholly owned by the Publisher, as set forth below. For
purposes of this Agreement, all titles are identified as the "Work".
2) This Agreement shall commence on January 1, 1996 and shall continue for
a period of six years and as further extended by Paragraph 7(a) with
respect to each title published. After the initial six-year period,
this Agreement shall be automatically renewed year to year unless
cancelled by either party by written notice at least 90 days prior to
the end of the initial term or any renewal term.
3) The titles on the list shall be agreed by both parties at regular
intervals to be mutually decided, taking into account the Publisher's
publishing requirements and Aladdin's overseas markets. Approved
publishing lists shall form part of this agreement under Appendix A.
4) Aladdin shall submit prototype cover and spread design, together with a
Title Approval form, which shall contain full specifications and
physical characteristics, unit printing and binding estimates, and
development budget of each title. Each Title Approval form shall upon
approval become part of the contract as Appendix B, and is incorporated
by reference into this Agreement.
5) Aladdin shall be responsible for production printing and
binding.
6) The development costs shall be shared between the Publisher
and Aladdin as in PART B, clause 4(a).
7) Royalties shall be payable to Aladdin as in clause 4(c).
PART B
Now it is specifically agreed between parties hereto as follows:
1. Aladdin hereby licenses and grants to the Publisher the following
volume book rights, which includes but is not limited to hardcover,
paperback, and all derivative rights, in and to the Works:
a) The sole and exclusive right to publish, sell, market and
advertise the Work in the English language markets of the
United States of America its territories and dependencies
including the Philippines and Canada (hereinafter called the
exclusive licensed territories subject as herein provided) for
the term of the agreement.
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2. a) Aladdin warrants to the Publisher that it is the sole owner or
licensee of the copyright and of all the rights granted herein
to the Publisher; that the Work is original, contains nothing
defamatory or violates the right of privacy; and that the Work
has not heretofore been published in the said language. In the
event of a claim or suit under the foregoing warranty, Aladdin
will defend the claim or suit and hold the Publisher harmless
including all legal expenses.
b) Aladdin will not, during the continuance of the Agreement
without prior consent in writing of the Publisher, print or
cause to be printed or published any edition of the Work that
might injure the sales of the Work by the Publisher hereunder.
3. Aladdin will be responsible for the complete production of the Work,
and agrees to sell and the Publisher agrees to purchase copies of the
Work, as long as the Work conforms to the specifications shown on
Appendix B and is delivered on a timely basis, produced to the
specifications and at the price and quantity specified under Specific
Title and Approval Form (incorporated into Appendix B),
PROVIDED THAT:
a) a 5% over-delivery or under-delivery shall be constituted
as fulfillment of the order.
b) The Publisher shall supply copy for Americanization.
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c) An imprint agreed by Aladdin and the Publisher shall appear on
the title page and on the spine of the cover.
d) All the illustrations and design characteristics of the Work
shall remain the same for all editions or adaptations
published hereunder PROVIDED THAT the Publisher shall not
without the prior consent of Aladdin i) use the names,
designs, texts or any other materials appearing in the Work
for any purpose whatsoever except for advertising or
publishing their edition of the Work ii) the Publisher is not
entitled to print the Work or any part thereof itself or cause
it to be printed by anybody except Aladdin or Aladdin's
nominee.
4. The Publisher shall pay Aladdin for the Work as follows:
a) DEVELOPMENT COSTS
Development costs of each title shall be shared as follows:
i)A General international books: Millbrook 50%
Aladdin 50%
B American-only books: Millbrook 90%
Aladdin 10%
"American-only" books will be those mutually agreed upon by Aladdin and
the Publisher to be suitable only for the North American market and
shall be so designated on the approval form (Appendix B). "General
International Books" shall be books suitable for the Americas and
worldwide distribution and sale.
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ii) Development costs of each title shall be included in the Title
Approval form.
iii) Payment by Publisher for its share of development costs shall be
on a monthly basis, reviewable on 1st September each year at the rate
of USD30,000 per month. The funds shall be remitted as long as Aladdin
conforms to the delivery schedules shown on Appendix B and is not in
breach of any other terms ofthis Agreement. In the event of a delay in
delivery, payment of the funds may be delayed to the extent of the
delayed delivery provided the delay in delivery is held to be caused by
Aladdin or Aladdin's actions.
iv) the Publisher shall receive from Aladdin a development cost
recovery as follows on all sales outside US markets in an amount equal
to:
General international books: 25% of net receipts
American books: Nil.
Net receipts, in this instance, are defined as revenue less cost
for printing, freight and/or films and Authors Royalty, if any.
The above development cost recovery payments to Publisher may exceed
Publisher's share of development costs and shall be accounted for
separately.
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Accounting should be made as of close of business June 30 and December
31 and payable 90 days thereafter.
b) Printing and Binding
i) Aladdin shall invoice the Publisher for printing and binding of each
book in accordance with the Title Approval form (Appendix B).
ii) the Publisher shall pay Aladdin 90 days from shipment as evidenced
by a xxxx of lading showing delivery.
iii) in the event that Millbrook is delinquent in its payments to
Aladdin in excess of 15 days, Aladdin may suspend shipments, after
notifying Millbrook in writing until Millbrook remedies such default.
In the event Millbrook remedies the default, Aladdin will reschedule
deliveries and notify Millbrook of new delivery date.
c) Royalties
Aladdin shall receive a royalty on all sales as follows:
i) On all sales of books first published by Publisher on or after
August 1, 1996 as follows:
General international books:
Hardcover Library Editions 9% of net receipts
Hardcover Trade Editions 5% of net receipts
Softcover Trade Editions 5% of net receipts
American books:
15% of net receipts first 3,000 copies
7% thereafter.
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Royalties due will be paid semi-annually within 90 days
following the close of business on June 30 and December 31.
Royalty income from third parties will be shared after the
deduction of Agents' commission (if any) as follows:
International titles: 50% to Aladdin
American-only titles: 25% to Aladdin
ii) On all sales of books first published by Publisher prior
to August 1, 1996 as follows:
General International Books: 7% of net receipts
American books: 15% of net receipts first 3,000
copies
7% thereafter.
Royalties due will be paid semi-annually within 90 days
following the close of business on June 30 and December 31.
Royalty income from third parties will be shared after the
deduction of Agents' commission (if any) as follows:
International titles: 50% to Aladdin
American-only titles: 25% to Aladdin
d) On special sales at other than published discounts to bulk
users including, but not limited to, Book Clubs, Book Fairs,
Premium Sales, Director Marketing, and Direct sales payment to
Aladdin shall be as follows:
i) From Publishers stock as in (c) above
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ii) From film provided by Aladdin to the Publisher, 30% of the
Gross Margin as commonly defined after deduction of third
party royalties, if any and after the payment of Agents'
Commission, if any. The 30% is in lieu of Royalty due to
Aladdin.
iii) When printed by Aladdin, 30% of the Gross Margin as
commonly defined after deduction of third party Royalties, if
any and after payment of the Agents' Commission, if any. The
30% is in lieu of Royalty due to Aladdin.
iv) From film provided to the end user by Aladdin, with
consent of Publisher, and where payment is in the form of
Royalty, 50% to Aladdin of the advance and subsequent payments
after deducting Agent's Commission, if any. Film where
required above shall be provided by Aladdin at cost plus 15%
for handling. It is understood these terms may be modified by
mutual consent.
e) All sums of money due to Aladdin hereunder shall be paid as
follows:
i) Royalties in USD ($).
ii) Manufacturing costs in Pounds Sterling ((pound))
where manufactured by Aladdin in a Pound Sterling
area and in USD ($) when manufactured by the
Publisher.
iii) Plant cost in USD ($).
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Payment shall be made on behalf of Aladdin to Books Limited at Royal
Bank of Scotland, 00 Xxxxxxx Xxxxxx, Xxxxxx XX0 0XX (or to such other
account as may be notified by Aladdin to the Publisher at any time) and
shall be paid without any deduction whatsoever. Funds due to the
Publisher shall be paid to a bank and account furnished by the
Publisher. Each party shall be responsible for income taxes or
government levies on funds they receive in accordance with local law.
f) Certain titles may be designated School and Library only
titles by mutual consent. On such titles so designated a
mutually agreed upon School and Library price shall be
established. The cost to the Publisher on a minimum of 4000
copies will be 30% of agreed upon School and Library price CIF
New York inclusive of all charges including development and
Royalty. On quantities of less or more than 4000 copies the
cost shall be subject to good faith negotiation.
5. a) Aladdin undertakes that in the absence of circumstances
beyond their control to meet all schedules as shown in Appendix B
provided that the Publisher meets all schedules agreed upon in the
Title Approval form. In the event of a delay by Aladdin, the Publisher
may delay payment by the extent of the delay.
b) the Publisher will supply Aladdin shipping instructions in
reasonable time for arrangements for the packing and shipping on the
Publisher's behalf.
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c) Copies of the Work will be sent CIF dock New York. The Publisher
will be billed separately for such charges.
6. If in consequence of any event beyond Aladdin's control (i.e. war,
riot, strikes, fire, floods, act of God, governmental restrictions or
other such circumstances) Aladdin shall be prevented from performing
any of its obligations hereunder by the dates set forth for such
performance, the time for such performance shall be deemed extended for
a period of time equivalent to the duration of such event and the
approval of the Publisher shall be deemed to be given to the said
extension of time without liability to Aladdin. If Aladdin is prevented
from performing hereunder by reason of such event it shall give prompt
written notice to the Publisher of the nature of such event and of the
expected effect of such event so far as relevant to the operation of
this Agreement. Payment required under this Agreement may be deferred
until Aladdin is able to perform as required.
7. a) Notwithstanding Part A, Paragraph 2, the terms of this
Agreement shall continue with respect to each work published pursuant
to this Agreement for a period of ten years from the date the first
books of the US edition for said work are published in the Licensed
Territory.
b) In the event of cancellation or expiration or other
termination of this Agreement, and subject to paragraph 7(a) above
unless the cancellation, expiration, or other termination is caused by
the material breach by Publisher, all rights
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licensed or granted to the Publisher hereunder immediately revert to
Aladdin without prejudice to any claim by either party hereto against
the other. Notwithstanding the foregoing, any license heretofore
granted by the Publisher to others shall continue in effect until such
license terminates and Aladdin and the Publisher shall continue to
share in the proceeds according to the terms of this contract. The
Publisher shall be responsible for accounting to Aladdin as provided in
paragraph 4.
c) In the event of cancellation or expiration or any other termination
of this agreement, a list of titles that had been previously confirmed
and are in some state of work in progress shall be provided and those
titles will be delivered in accordance with in the terms and provisions
of this agreement within a six month period following confirmation.
This shall not be construed as impeding any action or damages sought by
either party from each other in the case of cancellation.
d) The rights to the titles published under this Agreement extend for
the life of the Agreement including paragraph 7(a) above as long as the
titles remain in print unless the Publisher allow the Work to go out of
print or ceases to offer it for sale, whichever is sooner, and fails to
order a reprint of a reasonable quantity during the said term. If the
Publisher's editions of the Work shall go off the market or out of
print, Aladdin shall have the right 6 months after giving written
notice to the Publisher to revert the rights concerning
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that specific Work in the territory in which the book is out of print
at the expiration of a further 6 months period if the Work is not again
placed on sale in the licensed territory during that twelve months
period.
e) Aladdin or its authorized representatives have the right to inspect
during reasonable business hours the accounts and records of the
Publisher relating to all transactions covered by this Agreement.
f) The Publisher shall not sell its copies of the Work or cause them to
be sold at a reduced price or remainder copies of the Work for a period
of at least 18 months from first publication hereunder. A reduced price
or remainder shall be interpreted as copies sold at more than an 80%
discount from Publisher's retail list price.
g) All of the above articles in paragraph 7 may be changed by mutual
consent. Such consent whether on specific titles or all titles must be
submitted and approved in writing.
8. If a Receiver or Manager be appointed for the Publisher by creditors
or if the Publisher goes into liquidation other than voluntary
liquidation for the purpose of reconstruction or amalgamation only or
if payment should not be made by the Publisher without justification of
advance payments due under Clause 4 a) i) within 30 days of the date of
written demand by Aladdin or if payment should not be made of monies
due or statements to be delivered to Aladdin hereunder within three
months after the date of a written demand from Aladdin or its
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representatives for such payment or such delivery after it shall be due
then in either of these cases this Agreement shall automatically
terminate without prejudice to any claim which either party may have
against the other or to the right of any third party arising hereunder.
The rights to distribute published Works in the territories allocated
to the Publisher shall not be affected by this termination.
9. The Publisher and Aladdin agree to cooperate in the exploitation of any
rights not specifically granted hereunder and accordingly:
a) The Publisher must have prior written consent, not to be
unreasonably withheld, of Aladdin to sub-license for publication in any
form or medium (but only in the exclusive licensed territory) any part
of the Work or for any other use of the material.
b) The Publisher and Aladdin will jointly explore electronic rights and
mutually decide and consent to exploitation. When a decision is reached
both parties will endeavor to clear all necessary provisions and
provide all necessary permissions. Development costs will be shared
equally as will profits. By mutual consent the sharing of costs and
profits may be varied. The Publisher agrees, however, that on sales
outside of its territory it shall it shall only be entitled to a profit
share equal the original percentage stated for plant cost recovery in
Paragraph 4 above.
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Should either side decline to collaborate with the other party in the
production of any electronic product generated from the basic concept,
design and illustration of the Work the initiating party shall be
entitled to produce the electronic Work itself. Aladdin will make
available to the Publisher, should the Publisher be the initiating
party, all design, content, textual materials and permissions which are
necessary to create the electronic product. In such case, the Publisher
shall pay to Aladdin a pro-rated royalty on a 7% royalty of retail
Price, based on the proportion that the Work participates in the final
electronic product. Clearance of electronic rights in the text and
illustrations will be obtained where possible.
c) the Publisher has the right to use excerpts from the Work for
promotion and review purposes PROVIDED THAT all such excerpts should
bear the appropriate copyright notices as hereinbefore specified.
d) Nothing contained in this Agreement shall be construed to place the
parties in the relationship of partners or joint ventures and neither
Aladdin nor the Publisher shall have the right to obligate or bind the
other in respect of any matter arising in connection with the Work or
this agreement.
10. The exclusive and non-exclusive licenses granted hereby are not
assignable by the Publisher; no assignment of this Agreement voluntary
or by assignment of operation of law shall be binding upon either of
the parties without the prior consent of the
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other. In the event the Publisher sells all or substantially all of the
assets of its business, all titles published up until the date of
transfer shall automatically be assigned. Continuation of the remaining
portion of the contract for titles not published prior to date of
transfer is subject to Aladdin's consent.
11. Titles published by Millbrook not provided by Aladdin may be published
under the same imprint ("Copper Beech") with Aladdin's consent.
12. If any difference shall arise between Aladdin and the Publisher
touching the meaning of this Agreement or the rights and liabilities of
the parties hereto the same shall be referred to the arbitration of two
persons or their umpire in accordance with the provisions of the
American Arbitration Association or any statutory modification or
re-enactment thereof for the time being in force, such arbitration to
be held in New York City.
13. This Agreement shall be interpreted and shall be governed in all
respects by the laws of the State of New York.
As witnessed the hands of the duly authorized representatives of the
parties hereto this day an year first before written.
Signed by:----------------------------
for and on behalf of Aladdin Books Ltd.
in the presence of--------------------
Date:---------------------------------
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Signed by:----------------------------
for and on behalf of The Millbrook Press Inc.
in the presence of--------------------
Date:---------------------------------
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ALADDIN BOOKS LIMITED - MILLBROOK PRESS, INC.
JANUARY 1, 1996 AGREEMENT
APPENDIX A - APPROVED PUBLISHING LIST
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ALADDIN BOOKS LIMITED - MILLBROOK PRESS, INC.
JANUARY 1, 1996 AGREEMENT
APPENDIX B - TITLE APPROVAL
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