From cmarsey@usscouts.org Sun Feb 15 17:20:44 1998 Return-Path: cmarsey@usscouts.org Received: from gw.scouter.com ([208.18.92.10]) by cap1.CapAccess.org (8.6.12/8.6.10) with ESMTP id RAA15070 for ; Sun, 15 Feb 1998 17:20:44 -0500 Received: from merlin ([208.18.92.18]) by gw.scouter.com (8.8.5/8.8.5) with SMTP id PAA17119; Sun, 15 Feb 1998 15:48:06 -0600 (CST) Received: by localhost with Microsoft MAPI; Sun, 15 Feb 1998 15:49:40 -0600 Message-ID: <01BD3A29.53C8A350.cmarsey@usscouts.org> From: Chris Marsey Reply-To: "cmarsey@usscouts.org" To: "'twell@ccmall.com'" , "'hendra@macscouter.com'" , "'mfbowman@capaccess.org'" Subject: RE: AGREEMENT SURROUNDING JOINT VENTURE Date: Sun, 15 Feb 1998 15:49:39 -0600 X-Mailer: Microsoft Internet E-mail/MAPI - 8.0.0.4211 MIME-Version: 1.0 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Status: RO X-Status: A My concerns, changes are as follows: In regards to price per unit, I think we should allow SM a 40% margin of the retail price. We should set the retail price. This would put the cost at about 9.50 per unit. If we feel this does not meet our to-be-figured budget, we should raise the retail price. I would additionally suggest that we have a tiered pricing schedule such that the minimum per month required for SM to purchase from us would be at the 40% level, further qtys up to the next setpoint would be at 42.5% and qtys above that at 45%. (maybe 45% and 50% instead - not sure on that). I suggest a minimum 200 qty at the least as a per month required sell. For complete exclusive sales agent, I would think even higher - maybe 400. As for a printed directory, I would think maybe along the lines of a per unit license fee. We would also be able to set the retail price along with us having to 'approve' or 'give our seal of approval' to the actual product. I think this is a seperate agreement. We need to ensure that product registration is thru us. 15 working days or 30 calendar days (30 cal. preferred by me) should be the fulfillment time from us to SM. It should be clear that we 'wholesale' to SM. I think our agreement should be for primarily retail purposes. If SM wants to sell bulk to councils, they can cut their margin or act as an agent to accept the orders thru us. We can establish a wholesale cost for councils and give SM a commission. Duration: A year TOPS. COD on purchases from us till at such time we feel SM credit worthiness warrents a credit line. Minimum sales should be based on each individual calendar month (not an average) and if SM falls below the minimum for the previous month, they must be made up by the 15th of the current month. If they are then behind at the 1st of the next month, they are in immediate default and exclusivity is void. Since they are COD, there is not any kind of 'behind in payments' penalties. That's my input on Terry's doc. Chris. -- Christopher Marsey cmarsey@usscouts.org #include "Which way did you want me to rationalize that again?" On Sunday, February 15, 1998 2:46 PM, Dave Tracewell [SMTP:dave@scouter.com] wrote: > Attached is the document Terry has offered as an "agreement" between the > > USSSP and SCOUTER Magazine. He also wants to add an agreement of > understanding about any upgrades we intend to offer. Take a look at it > and > let's talk about it this afternoon when we have our conference call. > > Dave Tracewell AGREEMENT SURROUNDING JOINT VENTURE TRANSFER AND ASSUMPTION OF LIABILITY This agreement is entered into on this day, February 15, 1998, and is made between T.I. Howerton Companies, Inc., a Kansas Corporation d/b/a SCOUTER Magazine (FIRST PARTY, hereinafter simply "SCOUTER"), and US Scouting Service Project, Inc., a Missouri not-for-profit corporation (SECOND PARTY, hereinafter simply "USSSP, Inc."). This agreement shall be considered retroactive to the date of first release of a product commonly known as the "USSSP FTP File Library on CD-ROM, December, 1997 Edition" and jointly marketed through this date by FIRST PARTY and an informal association of individuals, to wit: Christopher Marsey, David Tracewell, R. Gary Hendra and Michael Bowman, collectively and commonly known as the USSSP FTP-CD Team and for the purposes of this document individually and collectively known as THIRD PARTY. In as much as each individual of the THIRD PARTY is now represented by the SECOND PARTY, the THIRD PARTY accepts that any and all agreements made prior to this date with respect to this product are now null and void. This document shall replace any prior agreements and supercede, where applicable, any Notice, Copyright Statements, or other proclamations included within the above-specified product. Definition of Product This agreement will only govern the nature of the relationship between SCOUTER and USSSP, Inc. as it pertains to the production, marketing, sale, and fulfillment of a CD-ROM containing documents, clipart images and ancillary files, most of which are already published by USSSP, Inc. on the World Wide Web and Internet. This product has, and will continue to be commonly referred to as the "USSSP File Library". The term "product" shall include the current and any subsequent releases, updates or enhanced versions based primarily on above description. Hereinafter, the terms "CD-ROM(S)", "product(s)" and "USSSP File Library" shall refer to the product defined under this paragraph. Definition of Relationship between Parties This product will be "published" by USSSP, Inc. and "distributed" by SCOUTER. For the purposes of this agreement, the terms "published" and "distributed" will be defined, but not necessarily limited to the following: (1) published: responsibility for the content and production of this product; (2) distributed: responsibility for the marketing, sale and fulfillment of this product. USSSP, Inc. agrees to "publish" and make available to SCOUTER adequate supplies of this product to keep pace with demand from the marketplace. At no time will USSSP, Inc. allow SCOUTER on-hand supply of the product to fall below a level of 100 for a period longer than 14 calendar days. In return SCOUTER agrees to provide USSSP, Inc. with bimonthly reports of current sales and projected demand. Transfer and Assumption of Liability USSSP, Inc. agrees to hold SCOUTER harmless of any liability resulting from content, copyright infringement, product liability, misrepresentation or other liability normally or reasonably associated with publication, production or marketing of a product similar to this. USSSP, Inc. by instrument of this agreement accepts full responsibility for all such liability, inclusive of the time from first release of this product. Financial Considerations In consideration of this agreement SCOUTER will purchase the product from USSSP, Inc. at a rate of $4.50 for the first 1000 CD-ROMS. Any payments made through the date of this agreement to THIRD PARTY shall be applied toward the purchase of the first 1000 CD-ROMS, and it is stipulated by all parties that compensation has now been made to USSSP, Inc for 479 of the first 1000 CD-ROMS. SCOUTER further agrees to pay a purchase price of $7.00 per CD-ROM for all CD-ROMS purchased from USSSP, Inc. beyond the first 1000. SCOUTER will retain a supply of the product and compensate USSSP, Inc. once a month for product sold during the prior month. Payments will be made on the 15th of each month. Additional Rights & Responsibilities USSSP, Inc. grants certain additional rights to SCOUTER, to wit: the exclusive right to produce and sell a print directory of images included within the product; SCOUTER will not be bound by any predetermined or suggested retail price; USSSP, Inc. agrees to support the marketing eff orts of SCOUTER for this product at all times, including but not necessarrliy limited to, the provision of up to 5% of the sold volume of the product free of charge for promotional distribution; SCOUTER agrees to maintain a minimum purchase of 150 CD-ROMS over any given three month period; SCOUTER agrees to make available to USSSP, Inc. a list of customers who have purchased this product. Exclusivity and Non-Compete USSSP, Inc. agrees to grant SCOUTER exclusive distribution rights on this product for current and all future releases of products with a reasonable resemblemnce to the current product. USSSP, Inc. will not authorize another party or engage themselves in any distribution, through sale or otherwise, of this product during the term of this agreement. SCOUTER agrees to not produce or market any product with a reasonable resemblence to the USSSP File Library. If USSSP, Inc. or any representative of that party desires to distribute this product, they may purchase any quantity of the product from SCOUTER at the prevailing wholesale rate. Duration of Agreement This agreement is revocable only if SCOUTER goes into default of its obligations under the terms of this agreement by more than 60 days. This agreement shall expire on February 15, 2000. SCOUTER will have the right of first refusal in renogtiating or continuing this agreement on that date. ______________________________________ ______________________________________ For FIRST PARTY Date For SECOND PARTY Date THIRD PARTY: ______________________________________ ______________________________________ David Tracewell Date Christopher Marsey Date ______________________________________ ______________________________________ R. Gary Hendra Date Michael Bowman Date Additional agreements to be drafted... License agreement for USSSP Internet Scout Patch. We tentatively offer a licensing fee of $0.20 per patch for the use of the USSSP nam on our Internet Scout Patch. Agreement to govern the relationship between USSSP and SCOUTER We want to establish a clear set of agreements on the future relationship of USSSP and SCOUTER. We can pursue this as soon as the CD and Patch agreements are complete.