EXHIBIT 10.16
INTERNATIONAL REPRESENTATION AGREEMENT
THIS AGREEMENT is made on the 19th day of August 2003.
BETWEEN
1. PEAK ENTERTAINMENT HOLDINGS INC. of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ lDL United Kingdom ("Peak"); and
2. Haven Licensing Pty Ltd, ▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
1. DEFINITIONS
The following terms shall have the following meanings for the purposes
of the Agreement:
1.1 "Accounting Day": 31st December
1.2 "Brand" means the Monster In My Pocket Brand
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 thirty percent (30%)
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.
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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" Australia and New Zealand
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.
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;
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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 provided that Peak
shall not be obliged to incur any cost in providing such support.
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:
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4.1 Diligence
At all times to work diligently to protect the interests of Peak and
the Monster In My Pocket 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.
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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.
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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 ▇▇▇▇ 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 ▇▇▇▇ 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 ▇▇▇▇ 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.
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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.
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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.
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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).
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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 ▇▇▇▇ 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.
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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 ▇▇▇ ▇▇▇▇ 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.
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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.
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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/
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(Director)
Date 8/9/03
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Signed on behalf of
/s/ ▇▇▇▇▇▇ ▇. Punch
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(Director) ▇▇▇▇▇▇ ▇. PUNCH
MANAGING DIRECTOR
HAVEN LICENSING
Date 1-SEP-2003.
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