EXHIBIT 10.20
ENTERTAINMENT PRODUCTION AGREEMENT
BETWEEN
PEAK ENTERTAINMENT LIMITED
AND
THE SILLY GOOSE COMPANY, LLC
ENTERTAINMENT PRODUCTION AGREEMENT
This Production Agreement is dated as of 16 December 2004 by and among Peak
Entertainment Limited of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
(hereinafter `Peak'), The Silly Goose Company, LLC (hereinafter `Silly Goose').
Either of the foregoing may be referred to as a `Party', and collectively they
are referred to as the `Parties'.
ARTICLE 1. INTRODUCTION
1. Recitals:
(a) The Property: Silly Goose has created that certain intellectual
property entitled "The Wumblers". Pursuant to an agreement dated 28
April 2003 Peak are entitled to all exploitation rights in the
Property including merchandise and distribution rights and the right
to enter into an Entertainment Production License.
(b) Peak: Peak is a holding company which is in the business of
exploiting intellectual property rights, including television
distribution, licensing and merchandising.
(c) Funding: Peak will fund or find third party investors to fund 52 X
11 minutes animated television episodes based on the Property.
2. Production:
(a) Peak agrees to supply the financing and to appoint a co-production
partner to supply the facilities, personnel and/or services for the
production of a series of 52 x 11 mins animated episodes.
(b) Bible: A bible for the Property will be created and submitted for
approval to Silly Goose, and shall not be materially deviated from
without their consent. If the Parties cannot agree in good faith on
a creative element requiring their approval, the arbitration
provision of this Agreement shall apply.
ARTICLE II. PRODUCTION
3. Quality of Production: The technical quality of the completed production
elements shall be equal to the quality requirements customarily required
by US network animation broadcasters. The Series shall be originally
recorded in the English language, shall have the sound, music and effects
fully synchronized to the applicable visual elements and shall be produced
in compliance with all applicable US standards, laws and regulations,
including (without limitation) broadcast standards, privacy, publicity,
intellectual property and copyright laws.
ARTICLE III. FINANCING AND MARKETING
4. Peak shall finance, or obtain finance from third parties, the production
budget for 52 x 11 mins animated TV series episodes.
5. Peak or/and its production finance partners shall recoup cost of said
production and marketing budgets in first place.
ARTICLE IV. EXPLOITATION AND DISTRIBUTION RIGHTS TO THE SERIES
6. Ownership
(a) In proportion to their interest in the Net Proceeds therefrom, the
Parties shall jointly own solely and exclusively, as tenants in
common, an undivided interest in the copyright (including, without
limitation, any renewals and extensions thereof) in and to the
Series, all elements created in connection therewith as they are
created, and all physical elements containing same. [▇▇▇▇▇ still
owns 100% copyright in concept]
(b) The Parties hereby grant Peak, as trustee for the other Parties, the
sole and exclusive right to license, enforce and exploit said
copyright in the Territory.
(c) No Party shall assign or transfer its interest in the copyright to
the Series. If it proposes to do so, it shall offer to sell its
interest to the other Parties, as their interests may appear, on
terms mutually acceptable to the Parties. If any Party proposes to
assign or transfer its interest hereunder, the other Parties shall
have the right to match any such deal which said Party proposes to
accept, as their interests in the remainder of the project appear at
the time.
(d) Peak shall have the rights to produce other episodes based on the
Property, the characters therein or theatrical, remake or sequel
rights therein, plus distribution, licensing and merchandising
rights thereof. If, within five (5) years after delivery of the last
episode hereunder, Peak does not determine to produce theatrical
motion pictures, remakes and/or sequels to the Series, the other
Parties hereto shall first be offered the opportunity to participate
in production, distribution and financing thereof on the same terms
as contained herein, provided they are not in breach of this
Agreement.
7. Exploitation Rights
(a) Peak shall have, and Silly Goose hereby license to Peak, the sole
and exclusive right to exploit the Series in the Territory, in
perpetuity, in the media of Television Broadcasting, and to retain
thirty-five percent (35%) of all gross revenues generated therefrom.
Peak shall be the sole administrator of the music publishing to the
Series in the Territory (which shall be either in the public domain
or available for license through ASCAP or BMI) and shall be entitled
to retain thirty-five percent (35%) of gross revenues therefrom.
(i) "Territory" shall mean the world
(ii) "Television Broadcasting" refers to all forms of presentation
and showing by means of the remote transmission and
reproduction of sound and image elements, by all procedures in
means known or still to be discovered, radiobroadcast all over
the Territory and transmitted by the intermediary of one or
several local radio broadcasting channels, by all types of
aerials, including home aerials, by cable distribution,
satellite, closed circuit or other modes of reception or
transmission, including UHF or VHF radio broadcasting, as well
as any forms of television commonly known as "free
television", "conventional television", "residential
television", "pay television", "public television",
"television by subscription", "DBS television", "commercial
television", "educational television" and "closed circuit
television and broadcast over the Internet. "Television
Broadcasting" shall not include Videograms or Merchandising.
(iii) "Videogram" refers to any mechanism or media upon which a
visual work which transmits an illusion of movement is
located, and which may be presented visually, with or without
sound, by means of a television type system, including
videocassettes, videodiscs, DVD CDROM and other forms of the
same kind, through all means or procedures known or still to
be discovered.
(iv) Peak shall have, and the parties hereby licence to Peak, the
sole and exclusive right to exploit the merchandising rights
in the Series in the Territory and to retain thirty-five
percent (35%) in the UK and forty percent (40%) in the rest of
the world of all gross revenues generated therefrom.
"Merchandising" refers to the exploitation of the Series and
the Property and all rights incidental thereto by means of
sales, franchising, licenses, rent, distribution, granting or
otherwise of posters, food and drinks, comics, cartoons,
novelties, cards, stationery, games (including electronic,
video, arcade and board) photographs, books, toys, clothes,
records, cassettes or other types of mechanical recording,
interactive/multimedia, films, all audio-visual support
including technical games and all other objects whose
manufacture, conception or concept is inspired, drawn or based
on one or any part of the Series, their characters or any
element thereof. All of the foregoing are listed for
illustration purposes only and not by way of limitation. Any
Internet website devoted to the Series shall be created and
managed, or licensed, by Peak.
ARTICLE V. SPLIT OF REVENUES
8. Recoupment
100% of production budget and marketing budget will be recouped by Peak
and/or its finance partners from all gross revenues in first position.
9. "Net Proceeds" "Net Proceeds" as used herein, shall mean (i) gross income
or other value actually received by or on behalf of Peak from all sources
an all media (whether now known or hereafter discovered) including
(without limitation) Merchandising and Videograms), in the Territory, in
perpetuity, less (ii) permitted distribution fees, permitted distribution
expenses for French dubs and copyright/trademark enforcement costs),
licensing and merchandising fees, (iii) the budgeted cost of production
plus any permitted overbudget expenditures and the budget cost of
marketing.
10. "Net Proceeds" will be split 25% Silly Goose, 25% Peak, 50% Peak and/or
third party financing partners. Silly Goose is herewith recognised as a
third party finance partner by its investment of $500,000 on signature of
this agreement. Thereafter Silly Goose's Net Proceeds share will increase
by 6%. For avoidance of doubt this means that Net Proceeds will be split
31% Silly Goose, 25% Peak and 44% Peak and/or other third party financing
partners.
ARTICLE VI. ADVERTISING AND CREDITS
11. Advertising and Publicity; Confidentiality:
(a) Each of the Parties shall have the right to make public reference to
its role hereunder in connection with the Series and its business
generally, but the financial terms of this agreement shall be kept
confidential between the Parties, unless required by law or stock
exchanges to be revealed. The Parties shall jointly approve an
initial press release and other press releases and advertising shall
accurately state the relationship between the Parties and to the
Series.
(b) Peak shall exercise reasonable efforts not to reveal to any third
party any trade secrets, secret or confidential information,
confidential technical information, or any other information
relating to the copyright referred to in this Agreement or any such
information relating to the carrying out of the production
hereunder.
12. Credits
(a) Peak shall accord Silly Goose and others working on the Episodes
reasonable and customary credit among the titles of each Episode
actually produced by Peak hereunder.
(b) In formal publicity issued by or under control of Peak relating to
this Agreement Silly Goose shall be mentioned . The foregoing
obligation shall not apply to award, congratulatory or institutional
publicity.
(c) All other details of the foregoing credits shall be at Peak's
discretion, Silly Goose shall not be entitled to any injunctive
relief for a breach of this provision and Peak shall not be liable
for any casual or inadvertent failure to accord such credit, or for
the failure of any third party to comply with its obligations to
Peak. If Silly Goose shall notify Peak of a breach of this
provision, Peak shall take commercially reasonable efforts to
correct such breach on a going forward basis. Such credit shall be
subject to the broadcasting stations' and distributors' standards
and practices policies. [Just in case broadcasts fails to show
credits]
ARTICLE VII. WARRANTIES AND REPRESENTATIONS
13. (a) Peak hereby represents and warrants to the Parties that, with the
exception of those rights and materials which are in the public
domain (i) it has the full right and authorization to enter into and
perform its obligations hereunder; (ii) it will pay all sums due to
any person who is or may be entitled to any payment in respect of
services or facilities rendered, or goods supplied or rights granted
in connection with the Series, (iii) will ensure that nothing
contained in the Series is defamatory, violates the right of
privacy, or violates the rights of any third party; (iv) it has not
and will not create any charges, liens, claims, encumbrances,
pledges, security interests, or restrictions over the Series or
Property,; (v) there is no litigation in existence or pending or
threatened against it in relation to the Series or Property.
(b) Silly Goose warrants that it has such right, title and interest in
and to the Property as to enable it to vest in Peak, free from any
liens or encumbrances or third party rights, the sole and exclusive
right, privilege and license herein conveyed, that the rights
granted herein have not been licensed to any other person or entity,
that Silly Goose is the legal and beneficial owner of the Property
and that, to the best of Silly Goose's knowledge, the exercise by
Peak of the rights ranged herein shall not infringe the rights of
any third party.
(c) Representation: It is expressly agreed that no Party is the legal
representative of the other Parties and has no authority, expressed
or implied, on behalf of the other Parties to bind such other
Parties or to pledge their credit. Nothing contained in this
Agreement shall be deemed or construed to constitute or create
between the Parties hereto a partnership, joint venture, or agency.
No party may be held liable for the acts either of omission or
commission of the other Parties, and no party is authorized to or
has the power to obligate or bind the other Parties by contract,
agreement, warranty, representation, or otherwise in any manner
whatsoever except as may be expressly provided herein. Nothing in
this Agreement shall be construed as granting Silly Goose any right,
license, or interest in or to any trademark, trade name, copyright,
design, trade secret, know-how, or similar right or protection which
is the property of Peak, its parent, subsidiaries, and/or affiliates
except as expressly set forth herein to the contrary.
(d) Notice of Claim: The Party receiving notice of any claim or action
subject to indemnity hereunder shall promptly notify the other
Parties. Representations, warranties and indemnities shall survive
any termination or expiration of this Agreement.
ARTICLE VIII. TERMINATION
14. Termination/Specific Performance
(i)In case any Party fails to perform under or commits a material
breach of any of the several covenants and conditions herein
contained, the other Party shall notify such Party in writing of
such failure or default and such Party shall then have the right to
remedy such failure or default by complying with the terms of this
Agreement, and thereby rendering the notice null and void and of no
effect. If the breaching Party has not instituted a remedy or is not
in the process of instituting a remedy within sixty (60) days of
receipt of such notice, the aggrieved Party may terminate this
Agreement immediately by a further notice in writing.
(ii)Any termination under this Paragraph 16 will be without
prejudice to the rights and remedies of any Party with respect to
any provisions or covenants arising out of breaches committed prior
to such termination. All rights, privileges, and licenses granted to
Peak hereunder concerning the Property shall forthwith revert to
Silly Goose, and Peak and shall forthwith cease the production of
the Series.
ARTICLE IX. ARBITRATION
15. Arbitration. This Agreement and all matters collateral thereto shall be
governed by the laws of New York applicable to contracts entered into and
to be fully performed in New York. Each Party agrees to appoint an agent
in New York for the service of process hereunder, in the absence of which
service on that Party may be made on the Secretary of State of New York.
(a) Subject Matter of Arbitration; Non-Applicability to Certain Acts.
All controversies, claims or disputes between the Parties, their
successors and assigns, arising out of this Agreement, or relating
to the transactions contemplated hereby, including (without
limitation) contract, tort or other controversies, claims or
disputes, shall be resolved by arbitration in accordance with the
provisions of this paragraph; provide, however, the arbitration
provisions contained herein shall not apply to any action seeking to
restrain or enjoin any other person (whether by way of a restraining
order or preliminary or permanent injunction o otherwise) or to an
action to obtain or execute on a writ of mandate or attachment, and
nothing contained herein shall be construed to limit the right of a
Party to file an action for any such purposes in a court of
competent jurisdiction. However, the New York Superior Court for the
Central District of New York or the U.S. Federal district court
residing in such District shall be the agreed-upon forum in such
instances.
(b) Selection of Arbitrator. Either side to the dispute may institute
arbitration by giving written notice of intention to arbitrate to
the other Parties, which notice shall contain the nature of the
controversy, the amount involved (if any), the remedies sought, and
any other pertinent matter. Within fifteen (15) days after the
giving of such notice, the other Party/Parties may submit to the
initiating Party an answering statement. Within seven (7) days
thereafter, the Parties (or their counsel) shall meet in person or
by telephone and attempt in good faith to select an arbitrator, who
shall be from the Los Angeles Trial Panel of Retired Judges and
Commissioners (the "Panel"). Any agreed-upon selection shall be
confirmed in writing signed by both sides or their counsel. If the
Parties are unable to agree upon an arbitrator within the seven (7)
day period, the arbitrator shall be appointed from the Panel by the
American Arbitration Association in accordance with its then
existing rules. The arbitrator shall not be a Party hereto, have a
conflict of interest with, or be associated with, employed by, or
have the status of a supplier of goods or services to, any party
hereto.
(c) Arbitration Procedure: The arbitrator, if he desires, shall have
access to all books and records of the Parties and other documents
and things of the Parties pertinent to the matter in arbitration
which shall enable him to make the required decision, including the
work papers of the Parties and the parties' accountants. The
arbitrator, if he desires, may employ experts not associated with or
employed by any Party to assist him in making the required decision,
and the cost of same shall be deemed a cost of arbitration. In
addition, the arbitrator shall set a reasonable schedule for the
conduct of any discovery desired by the Parties, the preparation and
submission of briefs, and all other procedures he deems necessary to
bring the matter to arbitration speedily, economically and fairly,
and he shall have the power to resolve any disputes among the
Parties relating to such discovery or other procedures without the
necessity of a formal motion, but after giving both sides an
opportunity to be heard. Prior to rendering his decision, the
arbitrator shall afford each of the |Parties an opportunity, both
orally and in writing, to present any relevant evidence and to
present that Party's factual and legal contentions and arguments in
connection with the matter in arbitration; provide, however, the
formal rules of evidence applicable to judicial proceedings shall
not apply; and provided, further, any Party submitting written
material shall be required to deliver a copy of the same to the
other Party concurrently with the delivery thereof to the
arbitrator, and such other Party shall have the opportunity to
submit a written reply a copy of which shall also be delivered to
the other Party concurrently with the delivery thereof to the
arbitrator. Oral argument shall take place only at a hearing before
the arbitrator at which all Parties are afforded a reasonable
opportunity to be present and heard. The parties may engage their
own experts for the purposes of presenting evidence to the
arbitrator. In all other respects and unless otherwise expressly
provided herein or agreed upon by the Parties in writing, the
arbitration shall be conducted in accordance with the rules then
pertaining of the American Arbitration Association except that the
provisions of section 1283.05 of the California Code of Civil
Procedure, or any successor section thereto, relating to the taking
of depositions in an arbitration proceeding, shall also apply.
(d) Time and Place of Arbitration. The arbitration shall take place in
the County of New York, State of New York, at a time and place
selection by the arbitrator. Notice in writing of such time and
place shall be given by the arbitrator to each Party at least thirty
(3) days prior to the date so fixed.
(e) Arbitration Award. Unless the time is extended by the arbitrator, he
shall submit his determination in writing within sixty (60) days
after his appointment. The arbitrator shall have the right and power
to grant any relief which could have been awarded if the controversy
had been litigated in a court of competent jurisdiction; provide,
however, no arbitrator shall have the right or power to enjoin or
restrain any act of any Party (that right and power being expressly
reserved to a court as set forth herein); and provided, further, no
arbitrator shall have the right or power to award punitive damages,
the Parties hereby expressly agreeing to waive any right they may
have to institute a claim or action for punitive damages (whether in
arbitration or in a judicial proceeding) to the fullest extent
permitted by applicable law. The determination of the arbitrator
shall be final, conclusive and binding. Any award made pursuant to
arbitration may be entered as a judgment, on the application of any
Party to said arbitration, by the New Yord Superior Court for the
Central District of New York as the agreed-upon forum.
(f) Cost of Arbitration: Each party shall share the costs of the
arbitration in proportion to its participation in net Proceeds;
however, the arbitrator may order the prevailing Party or Parties to
be reimbursed for all such costs.
ARTICLE X. MISCELLANEOUS
16. Any Party may assign this Agreement, in whole or in part, to any party; to
any parent, subsidiary or affiliated company; or to any entity with whom
any parent, subsidiary or affiliated company is merged or consolidated; or
to any entity acquiring all or substantially all of the stock or assets of
any such parent, subsidiary or affiliated company. Any other assignment
shall be subject to the written consent of the other Parties, not be to
unreasonably withheld.
17. This Agreement may not be modified or waived in whole or in party except
in writing signed by the Party to be charged. A waiver of any of the terms
or conditions of this Agreement in any instance shall not be deemed or
construed to be a waiver of such term or condition for the future, or of
any subsequent breach thereof.
18. The captions of the paragraphs of this Agreement are for convenience only,
and shall not in any way affect the interpretation of the Agreement
itself.
19. All notices required to be given hereunder shall be given in writing by
personal delivery, prepaid airmail, email or facsimile addressed to the
Parties at the respective addresses of the parties as stated herein.
Notices given by airmail or courier shall be deemed given on the date of
mailing or delivery to a courier respectively, except as to notice of
default, which shall be deemed given only when received by the addressee.
20. If any provision of this Agreement, applied to any Party or to any
circumstances, shall be adjudged by a court to be void or unenforceable,
the same shall in no way affect any other provision of this Agreement.
Nothing contained in this Agreement shall be construed so as to require
the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance of regulation contrary to which the Parties have no legal right
to contract, then the latter shall prevail, but in such event the
provisions of this Agreement so affected shall be curtailed and limited
only to the extent necessary to bring them within the legal requirements.
Each and all of the legal rights and remedies provided for in this
Agreement shall be construed as being cumulative, and no one of them shall
be deemed to be excusive of the others or of any right or remedy allowed
by law.
IN WITNESS WHEREOF, THE parties have executed this agreement on the
date first above written
Peak Entertainment Limited The Silly Goose Company, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
