EXHIBIT 10.6
INTERNATIONAL REPRESENTATION AGREEMENT
THIS AGREEMENT is made on the 22 day of April, 2004.
BETWEEN
1. PEAK ENTERTAINMENT LTD of Xxxxxxx Xxxx,Xxxxxxx Hill , Xxxxxxxx,
Xxxxxxxxxx, XX00 0XX Xxxxxx Xxxxxxx ("Peak"); and
2. THE XXXXXX COMPANY INC, 0000 Xxxxxxxxx Xxxxx Xxxx., Xxxxx #000,
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000 XXX.
1. DEFINITIONS
The following capitalized terms shall have the following meanings for
the purposes of the Agreement:
1.1 "Parties" mean: Peak and the Agent.
1.2 "Expiry Date" means: 30th September 2005.
1.3 "Term" means: The period starting on the date of this Agreement and
ending on (and including) the Expiry Date unless earlier determined as
provided in this Agreement.
1.4 "Territory" means: The USA, its territories and possessions and
Canada.
1.5 "Brand" means: The names, characters, likenesses, designs and/or visual
representations developed and/or owned by Peak entitled Countin Sheep.
1.6 "Brand Name Merchandising Rights" mean: The right to use the Brand and
all trade marks, copyright and design rights therein in connection with
the manufacture and/or publishing, distribution, sale, exploitation and
advertising of merchandise and/or services.
1.7 "Character Merchandising Rights" mean: The right to use the fictitious
characters associated with the Brand and all trade marks and copyright
therein in connection with the manufacture and/or publishing,
distribution, sale, exploitation and advertising of merchandise and/or
services in connection with the Brand.
1.8 "Merchandising Rights" mean: The Character Merchandising Rights and
Brand Name Merchandising Rights.
1.9 "Licence" means: An agreement with a third party for Merchandising
Rights in the form approved by Peak, as amended from time to time by
agreement in writing between the Parties.
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1.10 "Licensee" means: A third party to whom Merchandising Rights have been
given.
1.11 "Business" means: The negotiation by the Agent as agent for Peak of
Licenses for exploitation of the Merchandising Rights for the Territory
and all matters related thereto except, as specified in Schedule One
attached hereto and made a part hereof.
1.12 "Gross Receipts" mean: The gross royalties including all guarantees and
advances actually received in connection with exploitation of the
Merchandising Rights for the Territory (prior to deduction of Agent's
Commission) together with (where applicable) an amount equal to the
benefit or value of any available tax credit, repayment, exemption,
allowance or deduction (available as a consequence of or in connection
with such credit, repayment, exemption or allowance) whether pursuant
to any domestic or local tax legislation or regulation or pursuant to
any applicable double taxation treaty and whether or not such tax
credit, repayment, exemption, allowance or deduction has been claimed.
1.13 "Commission" means: The Commission payable to the Agent which will be
30% of Gross Receipts received for the Territory except as specified in
Schedule One.
1.14 "Quarter" means a three month period ending on 31st March, 30th June,
30th September and 31st December.
2. GRANT AND RESERVATIONS
2.1 Subject as provided below, Peak grants to the Agent for the Term, the
sole and exclusive right to negotiate with manufacturers and other
interested parties, Licenses for Merchandising Rights for the Territory
and subject to Peak's approval, to issue Licenses for such Rights
pursuant to the terms of this Agreement.
2.2 The grant of rights shall not include the exclusions set forth in
Schedule One or the right to arrange for the manufacture of merchandise
incorporating the Merchandising Rights for promotional purposes (herein
referred to as "Promotional Arrangements"), except as authorized by
Peak in writing. It shall be understood and agreed, however, that
during the Term of this Agreement, Agent shall have the non-exclusive
right to propose Promotional Arrangements for the Territory for Peak's
written approval and in the event that Peak shall approve any such
Promotional Arrangements proposed by Agent, Agent shall receive its
Commission in the percentage specified herein above. Peak shall have
the absolute right to reject any such Promotional Arrangements proposed
by Agent, subject to Peak's good faith agreement not to enter into any
Promotional Arrangements or other similar agreements for the Territory
with an entity proposed by Agent but rejected by Peak for a period of
one (1) year thereafter without payment of compensation to Agent of
Agent's Commission. Notwithstanding the foregoing, in the event that
Peak shall enter into a Promotional Arrangement which shall include the
Territory other than a
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Promotional Arrangement proposed by Agent, Agent shall be entitled to
fifty percent (50%) of its usual Commission from Gross Receipts
received for, or attributable to the Territory granted herein.
2.3 Without prejudice to the remaining provisions of this Agreement, Peak
reserves the right:
2.3.1 to vary the standard form Licences in respect to any one or
more prospective Licensees;
2.3.2 at its sole discretion, to decline consenting to the Agent
entering into any one or more Licences negotiated by the Agent
on its behalf;
2.3.3 upon expiration of the rights set forth in the letter
agreement attached hereto and made a part hereof as Exhibit 1,
to negotiate with and grant manufacturers and other interested
parties Licenses in relation to the distribution of
merchandise in the Territory provided that during the Term of
this Agreement and during any post-termination compensation
period set forth in the letter agreement, Agent shall receive
a Commission in the amount specified herein in connection with
any such distribution in the Territory;
2.3.4 to exclude certain products otherwise included under this
Agreement as specified in Schedule One;
2.3.5 Intentionally left blank.
3. PEAK'S OBLIGATIONS
Peak agrees severally with the Agent throughout the Term:
3.1 Support and Information
To support the Agent in its efforts to promote Business and in
particular to supply Agent at Peak's expense with a reasonable number
of samples of artwork, promotional material, drawings, and general
information relating to the Merchandising Rights as necessary for Agent
to conduct the Business contemplated herein, and Peak shall keep the
Agent reasonably so supplied throughout the Term.
3.2 Advertising and Promotion
3.2.1 To refer to the Agent any enquiries from prospective Licensees
or other leads for the Territory.
3.2.2 To supply to the Agent information which may come into its
possession which may assist the Agent in carrying on the
Business.
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3.3 Maintenance of Rights
Subject to Clause 4.5 of this Agreement to maintain its Merchandising
Rights during the Term (including obtaining, maintaining and protecting
intellectual property rights as reasonably necessary to conduct the
Business contemplated herein) and not to cause or permit anything which
may damage or endanger them or its title to them or assist or suffer
others to do so and to promptly consult with the Agent if the
Merchandising Rights are or appear likely to be damaged or endangered.
3.4 Payment of Monies
3.4.1 In the event that during the Term of this Agreement or after
expiry or termination thereof, Peak shall receive any monies
from which Agent shall be due a Commission or other share,
Peak shall account to and make any payments due Agent
immediately and in any event, within fifteen (15) days
following Peak's receipt of any such sums; and
3.4.2 Peak shall pay interest if it shall make a late payment of any
monies due Agent which were previously received by Peak at the
rate of 2% per annum above the base rate for the time being of
Lloyds Bank Plc.
4. AGENT'S OBLIGATIONS
The Agent agrees with Peak throughout the Term:
4.1 Diligence
To use its best endeavors to diligently assist Peak in protecting the
interests of Countin Sheep the Brand in the Territory.
4.2 Scope of activity and authority
4.2.1 Not to deal directly or indirectly with any prospective
Licensee or with any person if Agent, knows that goods
produced under a License granted to such entity would be
resold outside the Territory without written approval from
Peak.
4.2.2 Not to describe itself as agent or representative of Peak
except as expressly authorised by this Agreement.
4.2.3 Not to pledge the credit of Peak in any way without the
express written approval of Peak.
4.2.4 Not to make any commission or demand or receive payment from a
Licensee for the grant or renewal of a Licence apart from the
agreed Commission. Notwithstanding the foregoing, Peak
acknowledges and agrees that payments may be received by Agent
from a Licensee in
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connection with an advertising and/or trade show cooperative
fund, provided that such fund shall be established by Agent
with Peak's approval and the payments received in connection
with such cooperative fund shall be used solely for the
funding of a promotional advertisement for the Brand and/or
marketing or display of the Brand at sales outlets, trade
shows and other similar events and such payments shall not be
deemed a part of Gross Receipts.
4.2.5 Not to make any representations or give any warranties to
prospective Licensees other than to those contained in the
terms of the Licence.
4.3 Promotion
To use its best endeavours as commercially reasonable to induce
manufacturers to make use of the Merchandising Rights in relation to
the manufacture, promotion or sale of goods for the Territory in
particular by:
4.3.1 Conducting meetings at Agent's offices or other locations or
by personal visits to and correspondence with potential
Licensees as Agent determines reasonably necessary and
warranted for the Territory;
4.3.2 advertising and distribution of publicity matter as Agent
determines is reasonably necessary and warranted for the
Territory, subject however to the specific prior approval in
writing in all cases by Peak of the form of such advertising
and publicity matter;
4.3.3 attendance at trade shows and other sales outlets as Agent
determines is reasonably necessary and warranted for the
Territory;
4.3.4 preparing licensing presentation materials for the Brand
within a reasonable period of the date of this Agreement in a
form approved by Peak in writing prior to use.
4.4 Licences and Approvals
4.4.1 To use its best endeavors to refer to Peak any enquiries which
may come into its possession which may assist Peak or its
subsidiaries to grant Licences in connection with the
exploitation of the Brand.
4.4.2 Before entering into any Licence to provide details of the
proposed Licensee to Peak.
4.4.3 Only to enter into Licences with Licensees on terms and in a
form which has generally been agreed to with Peak and not to
agree any amendments to the Licence without the consent of
Peak.
4.4.4 Forthwith on a Licence being entered into with a Licensee to
provide to Peak (as appropriate) a true copy of the Licence.
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4.4.5 To ensure that all Licenses procured by Agent provide that: 1)
before the commencement of manufacture of merchandise,
Licensees shall be required to submit to Agent, for Peak's
written approval, a sample of each design to be used on
products, a sample of any written material to be used on
products, a sample of any packaging material and (where the
product is to be sold with confectionery) a sample of all
printing inks and constituent elements of the product (e.g.
resin for PVC collectibles)l and 2) once the design is
approved by Peak, the Licensee will be further required to
submit to agent, for Peak's written approval, a sample of each
product bearing the approved design together with packaging.
The Agent shall submit all such samples received by Agent to
Peak for Peak's written approval and Agent shall not authorise
any Licensee to manufacture any product bearing a design not
so approved.
4.4.6 Intentionally left blank.
4.5 Protection of Property
4.5.1 Not to knowingly or intentionally cause or permit anything
which may damage or endanger the Merchandising Rights or
Peak's title to them or knowingly or intentionally assist or
allow others to do so.
4.5.2 To notify Peak of any suspected infringement of Merchandising
Rights which may come to Agent's attention.
4.5.3 To take such reasonable action as Peak (as appropriate) may
direct at the expense of Peak in relation to such
infringement. Notwithstanding the foregoing, Agent shall not
be required to commence or be a party to any action in
connection with such infringement unless Agent shall so elect.
4.5.4 Intentionally left blank.
4.5.5 To ensure that each Licence procured by Agent includes an
indemnity provision from the Licensee for any liability
incurred to third parties for any use of the Merchandising
Rights otherwise than in accordance with this Agreement and
the License (except with respect to claims that the Brand and
intellectual property therefore infringe upon the rights of a
third party).
4.5.6 On the expiry or termination of this Agreement forthwith to
cease to use the Merchandising Rights save as expressly
authorised by Peak in writing.
4.5.7 Not to apply for registration of any part of the Merchandising
Rights as a trade xxxx but to give Peak at Peak's expense any
assistance it may reasonably require in connection with the
registration of any part of the Merchandising Rights as a
trade xxxx in any part of the world and not to knowingly or
intentionally interfere with Peak in any manner nor attempt
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to knowingly or intentionally prohibit Peak's registration of
any part of the Merchandising Rights or any name, device or
design created or controlled by Peak.
4.5.8 Not to use the Merchandising Rights otherwise than as
permitted by this Agreement.
4.5.9 Not to use any name or xxxx confusingly similar to any part of
the Merchandising Rights.
4.5.10 Not to use the Merchandising Rights except directly in the
Business.
4.5.11 Not to use any part of the Merchandising Rights or any
derivation of it in its trading or corporate name.
4.5.12 To hold any additional goodwill generated by the Agent for the
Merchandising Rights or the Business as bare trustee for the
Principal.
4.6 Good Faith
In all matters to act loyally and faithfully toward Peak.
4.7 Compliance
4.7.1 To obey Peak's reasonable orders and instructions in relation
to the conduct of the Business.
4.7.2 To conduct the Business in an orderly and businesslike manner
maintaining at its own expense an office and organisation
suitable and sufficient for the proper timely and efficient
conduct of its obligations under this Agreement and to comply
in the conduct of the business with all applicable laws,
bylaws and requirements of any governmental or regulatory
authority applicable to the Business.
4.8 Disclosures
On entering into this or any other agreement or transaction with Peak
during the Term or any extensions of it to make full disclosure of all
material circumstances and of everything known to it respecting the
subject matter of the relevant contract or transaction which would be
likely to influence the conduct of Peak including in particular the
disclosure of other agencies in which the Agent is interested directly
or indirectly.
4.9 Secrecy
4.9.1 Not at any time during or after the Term to divulge to any
person any information relating to the Business or affairs of
Peak which Agent knows or should know to be confidential other
than to Agent's attorneys and
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accountant or financial advisor and to other persons who have
signed a secretary undertaking in the form approved by Peak.
4.9.2 Not to permit any person to act or assist in the Business
other than Agent's attorneys and accountant or financial
advisor until such a person has signed such undertaking.
4.10 Accounts
To keep accurate records and accounts in respect of the conduct of the
Business and in accordance with generally acceptable accountancy custom
and practice and in particular:
4.10.1 At Peak's election and at Peak's sole expense, to have such
records and accounts audited by qualified auditors once a year
during the Term. Any such election by Peak shall be made in
writing to Agent and the costs of such audit shall be paid for
by Peak promptly upon Peak's receipt of any invoice therefore.
4.10.2 At Peak's election and at Peak's sole expense, to have copies
of such audited accounts submitted to Peak on an annual basis
no later than the 60th day following the end of its financial
year (30th April each year) provided that Peak shall have
given Agent timely written notice of its election to require
such audit so that such audit may reasonably be performed and
completed by the date required.
4.10.3 Keep said accounting records for not less than six years from
the date to which they pertain.
4.10.4 At Peak's election and at Peak's sole expense, to supply to
Peak no later than four months after the end of each calendar
quarter or such other accounting period agreed to by the
Parties, an auditor's unqualified certificate confirming that
the Agent has remitted to Peak the correct amounts of monies
due under this Agreement for such period. Any such election by
Peak shall be made in writing to Agent in a timely manner so
as to reasonably allow Agent the necessary time to arrange for
such certificate to be provided in the time required and the
costs thereof shall be paid for by Peak promptly upon Peak's
receipt of an invoice therefore.
4.10.5 At Peak's election and at Peak's sole expense, to permit a
qualified accountant appointed by Peak (such qualified
accountant to include the Internal Audit Department of Peak)
to inspect the accounting records of Agent pertaining to the
Business referred to herein for the purpose of verifying the
amounts payable to Peak. Any such inspection shall be
conducted at reasonable times during normal business hours and
upon no less than ten (10) business days written notice to
Agent and such inspection shall be made no more than one time
in any twelve months period.
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4.11 Payment of Monies
4.11.1 The Agent shall use reasonable commercial efforts to
diligently collect royalties due from Licensees in connection
with Licenses procured by Agent. Notwithstanding the forgoing,
Agent shall not be required to commence or be a party to any
action in connection with the collection of royalties unless
Agent shall so elect.
4.11.2 The Agent shall within forty five (45) days after the end of
each Quarter or such other period agreed between all the
Parties from time to time supply to Peak a schedule showing
royalties received during the immediately preceeding Quarter
and an estimate of royalties outstanding from Licensees
together with an aged analysis of outstanding monies together
with details of actions taken to recover such outstanding
monies.
4.11.3 The Agent shall immediately and in any event within 7 business
days following Agent's receipt of an invoice following the
submission of a royalty statement to Peak for the end of each
Quarter (or such other period agreed between all the Parties
from time to time) as specified in 4.11.2, pay by direct
telegraphic transfer into an account nominated by Peak (as set
out below) royalties received by the Agent (after deducting
Commission due to the Agent and any government imposed
withholding tax) for such prior Quarter. Such monies shall
become due from the date of invoice.
Bank Details Peak Entertainment Ltd
Lloyds TSB
Sort 30-00-09
Act 02560768
4.11.4 The Agent shall pay interest if it shall make a late payment
of monies previously received by the Agent at the rate of 2%
per annum above the base rate for the time being of Lloyds
Bank Plc.
4.12 Customer List
To keep a list of actual Licensees and potential Licensees contacted
and to supply a copy of it to Peak upon request.
4.13 Inspection of Books and Premises
To permit Peak or its authorized representatives at all reasonable
times during normal business hours to inspect all things material to
the Business and to take copies of any relevant document and for this
purpose to enter any premises used in connection with the Business.
Peak acknowledges and agrees that any such inspection shall be
conducted at Peak's expense, upon ten (10) business days
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written notice to Agent and such inspection shall be made no more than
one time in any twelve month period.
4.14 Assignment
Not to assign this Agreement in any way without consent of Peak which
such consent shall not be unreasonably withheld by Peak.
4.15 Delegation
Not to delegate any duties or obligations arising under this Agreement
otherwise than may be expressly permitted under its terms without the
consent of Peak.
4.16 Pay Expenses
Except as otherwise provided herein, to pay all expenses of and
incidental to the carrying on of the Business.
4.17 Information
To provide Peak within 45 days of the end of each Quarter with the
following information:
4.17.1 details of royalty received during the preceding Quarter;
4.17.2 a forecast, to the extent reasonably possible, of royalties to
be received in the next three months;
4.17.3 details of royalty due and not paid; and
4.17.4 a Licensee progress statement if reasonably possible.
4.17.5 Intentionally left blank.
5. TERMINATION
5.1 This Agreement shall terminate automatically on the Expiry Date and in
the case of Clauses 5.2 to 5.3 inclusive, forthwith upon service of
written notice to that effect in the event that a breach referred to in
such written notice is not cured within the time period provided.
5.2 Breach
If any of the parties fails to comply with any of the terms and
conditions of this Agreement and such failure if capable of remedy is
not remedied within thirty (30) days of receipt of a written notice of
such failure that the party not in default may terminate this Agreement
by giving 30 days notice to the other.
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5.3 Insolvency
If any of the Parties goes into either compulsory or voluntary
liquidation (save for the purpose of reconstruction or amalgamation) or
if an administrator or administrative receiver is appointed in the
respect of the whole or any part of its assets or if any of the Parties
makes an assignment for the benefit of or composition with its
creditors generally or threatens to do any of these things (or any
judgment is made against any of the Parties in any jurisdiction which
will materially and negatively impact on this Agreement) and such event
is not remedied within 30 days after notice of the other Parties
intention to terminate.
6. TERMINATION CONSEQUENCES
6.1 Procedure
On the termination of this Agreement the Agent undertakes:
6.1.1 to return to Peak all samples, drawings, publicity,
promotional and advertising material used in the Business
which are then in Agent's possession or control;
6.1.2 not to make any further use nor reproduce nor exploit in any
way the Merchandising Rights or Peak's name or any xxxx or
representation confusingly similar to the Merchandising
Rights.
6.2 Commission on Termination
6.2.1 Provided that termination is not due to a material breach of
this Agreement by the Agent the Agent shall be entitled:
6.2.1.1 to its Commission for the full term of the
Licence in respect of Licenses granted before the
date of termination but (subject to 6.2.1.2
below) and for the full term of any Licenses or
other similar agreement entered into by or on
behalf of Peak within one (1) year after the date
of termination hereof if the Agent may have been
responsible in whole or in part for the
negotiation of such License or other agreement
during the Term of this Agreement or if such
License or other agreement is entered into with
an entity to whom Peak was introduced by Agent
during the Term of this Agreement.
6.2.1. In respect of renewals and extensions made after
the date of termination for Licenses granted
prior to termination, Agent shall be entitled to
receive its Commission under the renewed or
extended License at the rate of 50% of the
Commission it would have received had this
Agreement not been terminated for a period of 2
years following the date of renewal of the
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License or for the full term of such renewal or
extension, whichever is shorter.
6.2.2 If termination is due to a material breach by the Agent then
the Agent shall not be entitled to its Commission in respect
of Gross Receipts due from Licensees after the date of
termination.
6.2.3 On termination for whatever reason the Agent shall cease to be
entitled to collect royalties from Licensees and instead Peak
shall collect such royalties and shall then account to the
Agent for the Agent's Commission within 14 days of Peak
receiving any Gross Receipts from Licensees for the Territory.
On termination, the Agent shall pass to Peak all its records
relating to collection of royalties and in particular
information related to outstanding royalties.
6.3 Existing Rights
The expiry or termination of this Agreement shall be without prejudice
to any rights which have already accrued to either of the Parties under
this Agreement.
7. INDEMNITY
7.1 The Agent shall indemnify Peak against all actions, claims, costs,
damages and expenses which it may suffer or sustain as a result of
actions of the Agent which have not been authorised by Peak provided
that Agent shall be given prompt notice of any such action or claims
and Agent shall have the right, at its sole option, to conduct the
defense of any such action or claims.
7.2 Peak shall indemnify the Agent against all actions, claims, costs,
damages and expenses arising out of the Agent's use of the Brand and/or
the licensing of the Merchandising Rights and intellectual property
associated with the Brand in accordance with the terms of this
Agreement provided that peak shall be given prompt notice of any such
action or claims and Peak shall have the right, at its sole option, to
conduct the defense of any such action or claims.
8. INSPECTION
The Agent shall permit Peak at all reasonable times during normal
business hours to inspect the Agent's premises in order to satisfy
itself that the Agent is complying with its obligations under this
Agreement. Any such inspection shall be made in accordance with the
provisions set forth in paragraph 4.13.
9. MISCELLANEOUS
9.1 No Waiver
No waiver of any of the obligations under this Agreement shall be
deemed effective unless made in writing nor shall any waiver in respect
of any breach be
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deemed to constitute a waiver of or consent to any subsequent breach by
the Parties of its obligations.
9.2 Notices
Any Notice to be served on either of the Parties by the other shall be
sent by pre-paid Recorded Delivery or Registered Post or by facsimile
to the address stated in Clause1 and shall be deemed to have been
received by the addressee within 72 hours of confirmed delivery.
9.3 Arbitration
All questions or differences whatsoever touching this Agreement between
the Parties shall be referred to a single arbitrator to be agreed upon
by the Parties, or, failing agreement, to be appointed by the then
President of the Law Society, such arbitrator to have all powers
conferred on arbitrators by the Arbitration Xxx 0000 or any statutory
modification or re-enactment of it for the time being.
9.4 Choice of Law
This Agreement shall be governed by English Law in every particular
including formation and interpretation and shall be deemed to have been
made in England.
10. TRANSMISSION OF BENEFIT
This Agreement shall be binding upon and shall inure to the benefit of
the Parties and its successors and assigns.
11. ENTIRE UNDERSTANDING AND VARIATION
11,1 This Agreement, including Schedule One and Exhibit "1" attached hereto
and made a part hereof, embodies the entire understanding of the
Parties in respect of the matters contained or referred to in it and
there are no promises, terms, conditions or obligations oral or
written, expressed or implied other than those contained in this
agreement.
11.2 No other variation or amendment of this Agreement or oral promise or
commitment related to it shall be valid unless committed to in writing
and signed by a director of Peak and Agent.
12. FORCE MAJEURE
If the performance of this Agreement is prevented, restricted or
interfered with by reason of circumstances beyond the reasonable
control of the party obliged to perform it, the party so affected upon
giving proper notice to the other party shall be excused from
performance to the extent of the prevention, restriction or
interference but the party so affected shall use its best efforts to
avoid or remove such causes of non-performance and shall continue
performance under the
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Agreement with the utmost despatch whenever such causes are removed or
diminished.
13. HEADINGS
The headings of conditions are for convenience of reference only and
shall not affect their interpretation.
AS WITNESS the hands of the duly authorised representatives of the Parties to
this Agreement the day and year first before written.
Signed on behalf of Peak Entertainment Ltd:
/s/ P. Shorrocks
.................................................
(Director)
Date: ..................22-4-04.................
Signed on behalf of
/s/
.................................................
(Director)
Date: ............June 15th 2004................
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SCHEDULE ONE
EXCLUSIONS
1) Manufacturing and distribution Rights for Plush
characters in the type, materials and sizes currently a part of the Countin'
Sheep core plush line manufactured by Peak on the date of commencement of this
Agreement shall be excluded from the grant of rights contained in this Agreement
except, as otherwise agreed to by the Parties in a separate letter agreement
attached hereto as Exhibit "1" and Agent shall be entitled to compensation in
connection therewith in the percentage specified in said Exhibit.
2) TV and video distribution shall be excluded from
the grant of rights contained in this Agreement, however, Peak acknowledges and
agrees that:
a) should a third party licensed to manufacture and sell toys or other types of
licensed merchandise be granted rights to sell and distribute any videos for the
Brand in combination with any such toy products or other licensed merchandise
(herein referred to as "Video Combination Packages"), Agent shall receive a
Commission from Peak of fifty percent (50%) of the percentage specified in
clause 1.13 of this Agreement (i.e., one-half of Agent's normal Commission) for
all sales and distribution of such Video Combination Packages; and
b) should Studio Works (or an affiliate of Studio Works) be granted rights to
sell and distribute Video Combination Packages, Agent shall receive a Commission
from Peak in the full amount of the percentage specified in clause 1.13 for all
sales and distribution of such Video Combination Packages sold by Studio Works
or its affiliates. However, should another entertainment company (other than
Studio Works or its affiliates) be granted rights to sell and distribute Video
Combination Packages, Agent shall not be entitled to any Commission in
connection with such sales.
For purposes of this Agreement, all references herein to a "video" or "Video
Combination Packages" shall mean video formats, DVD's or other entertainment
recording representation products whether now existing or hereafter created.
Rest of page intentionally left blank.
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EXHIBIT "1"
LETTER AGREEMENT
See Attached.
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Xxxxxxx Xxx
The Xxxxxx Company Inc.
0000 Xxxxxxxxx Xxxxx Xxxx., Xxxxx #000
Xxxxxxxxx Xxxxx, XX 00000, XXX
19 Sep 03
Re: Letter of agreement for placement of Countin Sheep plush line for USA
distribution
Dear Xxxxxxx:
This letter confirms that The Xxxxxx Company Inc. ("Shapre") is hereby appointed
by Peak Entertainment Ltd ("Peak") as our sole and exclusive agent to find a
distributor ("Distributor") within nine months commencing October 1st 2003 for
the sale and distribution in the United States of the core plush line of
Countin' Sheep and have them purchased from ourselves FOB Hong Kong at a price
to be paid by the Distributor to be between $1.60 and $1.80 or such higher price
as may be negotiated for orders paid for directly by a customer of the
Distributor (i.e., a "retailer"). If a Distributor is not found within this
initial nine month period then, Xxxxxx can continue on a month-by-month basis
upon the terms set forth herein, however, either party can terminate this
agreement after the initial nine month period by giving one month's written
notice to the other party. The aforesaid initial nine month period and any
continuation of said period, if applicable, shall be collectively referred to as
the "Term".
As compensation ("Compensation") for Xxxxxx'x services in connection with the
foreign, a commission will be paid as outlined below.
1.) Xxxxxx shall be entitled to receive from Peak, 8% of the gross order value
on orders bought and paid for by a USA Distributor or, 30% of the royalty amount
agreed upon with the Distributor on orders paid for directly by a retailer
(referred to herein as "Direct Sales"). Peak shall invoice the Distributor or
retailer, as applicable, on all such sales and the percentage Compensation due
Xxxxxx as specified herein will be paid to Xxxxxx by Peak as a "Finder's Fee"
promptly on clearance of funds into Peak's account and such "Finder's Fee" shall
be retained by Xxxxxx and will not be deemed a part of Gross Receipts (as such
term is defined in the Agency Representation Agreement to which this letter is
attached); and
2.) Additionally, all Distributors shall be required to pay Xxxxxx a royalty on
their sales of the plush product in the United States ar a rate of 10%
(excluding Direct Sales wherein a retailer pays Peak directly) and Peak shall
use its best efforts to ensure compliance with such requirement. Xxxxxx shall be
entitled to retain a Commission of thirty percent (30%) of the gross royalties
paid by a Distributor in connection with the foregoing and the balance of any
such royalties received by Xxxxxx shall be remitted to Peak in accordance with
the provisions set forth in the Agency Representation Agreement for payment of
monies due Peak.
For the avoidance of doubt, no royalty shall be paid to Xxxxxx by the
Distributor in connection with Direct Sales as defined above. Rather, the
parties acknowledge and
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agree that in the event of any such Direct Sales, the Distributor shall be
required to use its best efforts to negotiate a higher purchase price for the
product which such amount shall include the commission due the Distributor as
well as a royalty amount to be agreed upon by Xxxxxx and Peak with the
Distributor on a case by case basis. Such purchase price shall be payable by the
retailer directly to Peak, and as provided in paragraph 1 above, Xxxxxx shall
receive from Peak, 30% of the agreed upon royalty amount incorporated in the
purchase price from payments received by Peak from a retailer in connection with
such Direct Sales. Additionally, Peak shall compensate the Distributor from such
sums received by Peak in connection with any such Direct Sales.
In the event that this agreement for rights to find a Distributor shall expire
or be terminated, Xxxxxx shall be entitled to continue to receive the
Compensation provided above for the full term of all Commissionable Agreements
(as such term is defined below) and for any modifications, extensions or
renewables of such Commissionable Agreements.
As used herein, a Commissionable Agreement shall be defined as any and all
agreements entered into by or on behalf of Peak during the Term of this
agreement for distribution of the core plush line of Countin'Sheep in the United
States and any such agreements entered into by or on behalf of Peak within a
period of one (1) year after expiration of the Term with any entity to whom Peak
was introduced by Xxxxxx during the Term hereof or resulting from a deal
proposal substantially negotiated or submitted to Peak by Xxxxxx during the
Term.
Further, the Parties hereto acknowledge and agree that notwithstanding the
exclusions set forth in Schedule One of the attached Agency Representation
Agreement, during the Term hereof, Xxxxxx shall also have the sole and exclusive
right to submit proposals to Peak for the manufacture (as well as distribution
and sale) of product comprising the core plush line of Countin' Sheep and should
Peak decide in its sole discretion, to permit the manufacture of such products
for the United States, Xxxxxx shall be entitled to the Commission set forth in
the Agency Representation Agreement and paragraph 1 of Schedule One of said
Agreement shall be deleted from the exclusions set forth in said Agreement.
Agreed and accepted by:
Peak Entertainment Ltd /s/ P. Shorrocks
--------------------------------------
Name / Title Commercial Director
-------------------------------------------
Date 22-4-04
-----------------------
The Xxxxxx Company Inc. /s/ C.W. Day
-------------------------------------
Name /Title C.W. Day - President
--------------------------------------------------
Date June 15th 2004
-----------------------
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