EXHIBIT 10.46
INTERNATIONAL REPRESENTATION AGREEMENT
THIS AGREEMENT is made on the 2nd day of August 2004.
BETWEEN
1. PEAK ENTERTAINMENT LTD of Xxxxxxx Xxxx,Xxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxx, XX00 0XX ("Peak"); and
2. Blue Chip Brands Pty Ltd of 00 Xxxxx Xxxxxx , Xxxxxx, Xxxxxxxx 0000,
Xxxxxxxxx (Agent)
1. DEFINITIONS
The following terms shall have the following meanings for the purposes of
the Agreement:
1.1 "Accounting Day": 30th April
1.2 "Brand" means "Countin Sheep"
1.3 "Brand Name Merchandising Rights" the right to use the Brand during the
Term of this Agreement and all trade marks, copyright and design rights
therein in connection with the manufacture, distribution, sale,
exploitation and advertising of merchandise.
1.4 "Business": the negotiation of Licenses of Merchandising Rights by the
Agent as agent for Peak and all matters related thereto.
1.5 "Character Merchandising Rights" the right to use the fictitious
characters associated with the Brand and agreed upon from time to time and
developed by Peak during the Term of this Agreement and all trade marks
and copyright therein in connection with the manufacture, distribution,
sale, exploitation and advertising of merchandise in connection with the
Brand. All TV and video distribution shall be excluded from the grant of
rights contained herein.
1.6 "Commission" the Commission payable to the Agent 30 % of gross royalty on
all deals with the exception of the plush toy range. If plush toy range is
distributed by company introduced to Peak by agent, commission payable to
agent will be 1.5% of gross receipts.
1.7 "Expiry Date" 31st December.2006..
1.8 "Gross Royalty" the gross royalty actually received from a licensee
pursuant to a Licence 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.
1.9 "Licence" a Licence upon Peak's standard form of Licence Agreement to use
the Merchandising Rights granted by Peak to a licensee within the
Territory during the Term, a copy of which is attached, as amended from
time to time by agreement in writing between the parties.
1.10 "Licensee" means a person or company to whom the right to exploit the
Merchandising Rights has been given.
1.11 "Merchandising Rights" the Character Merchandising Rights and Brand Name
Merchandising Rights.
1.12 "Quarter" means a three month period ending on 31st March, 30th June, 30th
September and 31st December.
1.13 "Term" 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.
1.14 "The Territory" means
1.15 "The Parties" mean Peak and the Agent.
2. GRANT AND RESERVATIONS
2.1 Subject as provided below Peak grants to the Agent for the Term the right
to negotiate with and grant manufacturers and other interested parties in
the Territory Licences in relation to the manufacture and distribution in
the Territory of merchandise pursuant to the terms of this Agreement.
2.2 The grant of rights shall not include the right to arrange for the
manufacture of merchandise incorporating the Merchandising Rights for
promotional purposes, unless approved by Peak
2.3 Without prejudice to the remaining provisions of this Agreement Peak
reserves the right:
2.3.1 to vary its standard form licences in respect to any one or more
prospective licensees;
2.3.2 at its sole discretion to decline without giving reasons to
consenting to the Agent entering into any one or more Licences
negotiated by the Agent on its behalf;
2.3.3 to negotiate with and grant manufacturers and other interested
parties Licences in relation to the distribution of merchandise in
the Territory;
2.3.4 to exclude certain products included under this Agreement (see
Schedule 1 Excluded Products);
2.3.5 to arrange for the manufacture of merchandise including the
Merchandising Rights for promotional purposes within the Territory.
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 samples of artwork, promotional material, drawings, and general
information relating to the Merchandising Rights as are available to it
upon the execution hereof and 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 in 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.
3.3 Maintenance of Rights
Subject to Clause 4.5 of this Agreement to maintain its Merchandising
Rights during the Term 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 or to consult with the Agent if the Merchandising Rights are or
appear likely to be damaged or endangered.
4. AGENT'S OBLIGATIONS
The Agent agrees with Peak throughout the Term as follows:
4.1 Diligence
At all times to work diligently to protect the interests of Peak and the
Countin Sheep property.
4.2 Scope of activity and authority
4.2.1 Not to deal directly or indirectly with any prospective licensee
located outside the Territory or with any person located within the
Territory knowing or having reason to believe that goods produced
under a Licence granted to such a person 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.
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.
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 to induce manufacturers to make use of the
Merchandising Rights in relation to the manufacture, promotion or sale of
goods in particular by:
4.3.1 personal visits to and correspondence with potential licensees;
4.3.2 advertising and distribution of publicity matter 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;
4.3.4 preparing a licensing brochure for the Programmes and 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 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 in the terms of a licence
in a form which has been agreed with Peak in 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.
4.4.5 Before permitting the commencement of manufacture to submit to Peak
(as appropriate) for 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). If the design is approved by Peak the Agent will
further submit to Peak for approval a sample of each product bearing
the approved design together with packaging. The Agent shall not
authorise any licensee to manufacture any product bearing a design
not so approved. Prior to sale to ensure that all necessary safety
certificates and licences are obtained and a copy forwarded to Peak.
4.4.6 If the Agent shall breach any of the terms of this Clause 4.4 and
such breach if capable of remedy is not remedied within 30 days of
receipt of a written notice of such breach from Peak this shall
entitle Peak to terminate this licence forthwith without further
notice.
4.5 Protection of Property
4.5.1 Not to cause or permit anything which may damage or endanger the
Merchandising Rights or Peak's title to them or assist or allow
others to do so.
4.5.2 To notify Peak of any suspected infringement of Merchandising
Rights.
4.5.3 To take such reasonable action as Peak (as appropriate) may direct
at the expense of Peak in relation to such infringement.
4.5.4 To compensate Peak for any use by the Agent of the Merchandising
Rights otherwise than in accordance with this Agreement.
4.5.5 To ensure that each Licence includes an indemnity for the Agent
against any liability incurred to third parties for any use of the
Merchandising Rights otherwise than in accordance with this
Agreement and the Licence.
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
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 interfere with in any manner nor attempt to prohibit the use
or registration of any part of the Merchandising Rights or any name,
device or design resembling it by any other licensee of the Agent.
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 similar to or capable of being confused
with 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 or allow to be
divulged to any person any confidential information relating to the
Business or affairs of Peak other than to persons who have signed a
secrecy undertaking in the form approved by Peak.
4.9.2 Not to permit any person to act or assist in the Business until such
a person has signed such undertaking.
4.10 Accounts
To keep accurate and separate records and accounts in respect of the
conduct of the Business and in accordance with good accountancy custom and
practice in England and in particular:
4.10.1 Have them audited by qualified auditors once a year during the
Term.
4.10.2 Submit copies of audited accounts to Peak on an annual basis no
later than the 60th day following the end of its financial year
(30th April each year).
4.10.3 Keep said accounting records for not less than six years.
4.10.4 No later than four months after the end of each Accounting Day
supply to Peak an auditors unqualified certificate confirming that
the Agent has remitted to Peak the correct amounts of monies due
under this Agreement.
4.10.5 Permit a qualified accountant appointed by Peak such qualified
accountant to include the Internal Audit Department of Peak to
inspect the said accounting records for the purpose of verifying the
amounts payable at all reasonable times.
4.11 Payment of Monies
4.11.1 The Agent shall diligently collect royalties due from licensees.
4.11.2 The Agent shall within forty five (45) days of 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
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 days
following receipt of an invoice in respect of the same following the
end of each Quarter (or such other period agreed between all the
Parties from time to time) 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) in such prior Quarter. Such monies
shall become due from the date of invoice.
Bank Details
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 4% per annum
above the base rate for the time being of Lloyds Bank Plc.
4.12 Customer List
To keep a list of actual and potential licensees and to supply a copy of
it to Peak upon request.
4.13 Inspection of Books and Premises
To permit Peak or its representatives at all reasonable times to inspect
all things material to the Business and to take copies of any relevant
document and for this purpose enter any premises used in connection with
the Business.
4.14 Assignment
Not to assign charge or otherwise deal with this Agreement in any way
without consent of Peak.
4.15 Delegation
Not to delegate any duties or obligations arising under this Agreement
otherwise than may be expressly permitted under its terms.
4.16 Pay Expenses
To pay all expenses of and incidental to the carrying on of the Business.
4.17 Information
To provide Peak within 30 days of the end of each Quarter with the
following information:
4.17.1 details of royalty received;
4.17.2 a forecast of royalties to be received in the next three months;
4.17.3 details of royalty due and not paid;
4.17.4 a licensee progress statement; and
4.17.5 stocks of Licensed Products.
4.18 Sales Targets
The Agent shall meet the sales targets agreed from time to time with Peak.
For the avoidance of doubt the targets agreed shall be for net royalties
being gross royalties after deduction of commission and distribution
expenses only.
5. TERMINATION
5.1 This Agreement shall terminate automatically on the Expiry Date and in
the case of Clauses 5.2 to 5.7 inclusive, forthwith upon service of
written notice to that effect.
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.
5.3 Insolvency
If the Agent 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 the Agent makes assignment for the benefit of or
composition with its creditors generally or threatens to do any of these
things (or any judgement is made against the Agent or any similar
occurrence in any jurisdiction affected the Agent).
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;
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 breach of this Agreement
by the Agent the Agent shall be entitled:
6.2.1.1 to Commission in respect of Licences granted before the date
of termination but (subject to 6.2.1.2 below) not in respect
of Licences granted by Peak after that date notwithstanding
that the Agent may have been responsible in whole or in part
for the negotiation of the terms of any such Licence.
6.2.1.2 In respect of renewals of Licences granted prior to
termination that Agent shall be entitled to receive Commission
under the renewed licence at the rate of 50% of the Commission
it would have received had this Agreement not been terminated
but limited to a period of 2 years following the date of
renewal of the Licence provided that the new Licence is in
respect of the Products identical to the Products licensed to
the previous Licence negotiated by the Agent.
6.2.2 If termination is due to a breach by the Agent then the Agent shall
not be entitled to commission in respect of sales by 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
commission within 14 days of Peak receiving royalties from
licensees. On termination the Agent shall pass to Peak all its
records relating to collection of royalties and in particular
information relating 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 to sustain as a result of actions of the
Agent which have not been authorised by Peak.
7.2 Peak shall indemnify the Agent against all actions, claims, costs, damages
and expenses arising out of the Agent's use of the Intellectual Property
in accordance with terms of this Agreement.
8. INSPECTION
The Agent shall permit Peak at all reasonable times to inspect the Agent's
premises in order to satisfy itself that the Agent is complying with its
obligations under this Agreement.
9. MISCELLANEOUS
9.1 No Waiver
No waiver by Peak of any of the Agent's obligations under this Agreement
shall be deemed effective unless made by Peak in writing nor shall any
waiver by Peak in respect of any breach be deemed to constitute a waiver
of or consent to any subsequent breach by the Agent 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.
9.3 Arbitration
All questions or differences whatsoever touching this Agreement 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 inure to the benefit to Peak and
its successors and assigns.
11. ENTIRE UNDERSTANDING AND VARIATION
11.1 This Agreement 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.
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 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: ............5.1.05.......................
Signed on behalf of Blue Chip Brands Pty Ltd
/s/
........................................................
(Director)
Date: .........13/11/2004........................
SCHEDULE ONE
Excluded Products
