EXHIBIT 10.57
REPRESENTATION AGREEMENT
THIS AGREEMENT is made on the 5th day of OCT 2005
BETWEEN
1. DUBREQ LIMITED of 0 Xx Xxxx'x Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx, XX0 0XX
("Principal")
2. PEAK ENTERTAINMENT LIMITED of Xxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxx, XX00 0XX.
("Licensor")
1. DEFINITIONS
The following terms shall have the following meanings for the purposes
of the Agreement:
1.1 "Accounting Day":
1.2 "Intellectual Property" means the intellectual property listed on
Schedule 1
1.3 "Intellectual Property Merchandising Rights" the right to use the
Intellectual Property 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
Licensor as agent for the Principal and all matters related thereto.
1.5 "Brand Merchandising Rights" the right to use the brand associated with
the Intellectual Property and agreed upon from time to time and
developed by the Principal during the Term of this Agreement and all
trademarks and copyright therein in connection with the manufacture,
distribution, sale, exploitation and advertising of merchandise in
connection with the Intellectual Property.
1.6 "Commission" the Commission payable to the Licensor is 35% of gross
receipts in the UK and 40% of gross receipts in the rest of the world.
1.7 "Expiry Date" 31st December 2008
1.8 "Gross Royalty" the gross royalty actually received from a Licensee
pursuant to a License 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 "License" a License upon the Licensor's standard form of Licence
Agreement to use the Merchandising Rights granted by Licensor 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 rights to license the Intellectual Property
merchandising rights to third parties or subsidiaries/divisions of Peak
Entertainment Ltd.
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 the world.
1.15 "The Parties" mean the Principal and the Licensor.
1.16 "Principal" means the person or persons who own the Intellectual
Property
1.17 "Licensor" means the company who has been granted the right from the
Principal to grant Licenses to Licensees in relation to the
Intellectual Property
2. GRANT AND RESERVATIONS
2.1 Subject as provided below the Principal grants to the Licensor 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 Without prejudice to the remaining provisions of this Agreement
Principal reserves the right:
2.2.1 to vary its standard form licences in respect to any one or
more prospective licensees;
2.2.2 at its sole discretion to decline without giving reasons to
consenting to the Licensor entering into any one or more
Licences negotiated by the Licensor on its behalf;
2.2.3 to exclude certain products included under this Agreement (see
Schedule 2 Excluded Products);
3. PRINCIPAL'S OBLIGATIONS
The Principal agrees severally with the Licensor throughout the Term:
3.1 Support and Information
To support the Licensor 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
Licensor reasonably so supplied throughout the Term provided that the
Principal shall not be obliged to incur any cost in providing such
support.
3.2 Advertising and Promotion
3.2.1 To refer to the Licensor any enquiries from prospective
licensees or other leads in the Territory.
3.2.2 To supply to the Licensor information which may come into its
possession which may assist the Licensor 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 Licensor if the Merchandising Rights
are or appear likely to be damaged or endangered.
4. LICENSOR'S OBLIGATIONS
The Licensor agrees with the Principal throughout the Term as follows:
4.1 Diligence
At all times to work diligently to protect the interests of the
Principal and the Intellectual Property.
4.2 Scope of activity and authority
4.2.1 Not to describe itself as agent or representative of the
Principal except as expressly authorised by this Agreement.
4.2.2 Not to pledge the credit of the Principal in any way.
4.2.3 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.
4.2.4 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 endeavors 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 the Principal 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 Intellectual Property
within a reasonable period of the date of this Agreement in a
form approved by the Principal in writing prior to use.
4.4 Licences and Approvals
4.4.1 Before entering into any Licence to provide details of the
proposed Licensee to the Principal.
4.4.2 Only to enter into Licences with Licensees in the terms of a
licence in a form which has been agreed with the Principal in
and not to agree any amendments to the Licence without the
consent of the Principal.
4.4.3 Forthwith on a Licence being entered into with a Licensee to
provide to the Principal a true copy of the Licence.
4.4.4 Before permitting the commencement of manufacture to submit to
the Principal 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 the
Principal the Licensor will further submit to the Principal
for approval a sample of each product bearing the approved
design together with packaging. The Licensor shall not
authorize 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 the Principal.
4.4.5 If the Licensor 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 the Principal this shall entitle the Principal to
terminate this Agreement 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 the Principal's title to them or
assist or allow others to do so.
4.5.2 To notify the Principal of any suspected infringement of
Merchandising Rights.
4.5.3 To take such reasonable action as the Principal (as
appropriate) may direct at the expense of the Licensor in
relation to such infringement.
4.5.4 To compensate the Principal for any use by the Licensor of the
Merchandising Rights otherwise than in accordance with this
Agreement.
4.5.5 To ensure that each Licence includes an indemnity for the
Licensor 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 the Principal in writing.
4.5.7 To apply for registration of the Merchandising Rights as a
trade xxxx (where appropriate) at the Licensor's expense (in
any part of the world) on behalf of the Principal
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 Licensor 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 the Principal.
4.7 Compliance
4.7.1 To obey the Principal'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 the
Principal 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 the Principal
including in particular the disclosure of other agencies in which the
Licensor 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 the Principal other
than to persons who have signed a secrecy undertaking in the
form approved by the Principal.
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 the Principal 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 the Principal an auditors unqualified
certificate confirming that the Licensor has remitted to the
Principal the correct amounts of monies due under this
Agreement.
4.10.5 Permit a qualified accountant appointed by the Principal such
qualified accountant to include the Internal Audit Department
of the Principal 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 Licensor shall diligently collect royalties due from
Licensees.
4.11.2 The Licensor 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 the Principal 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 Licensor 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 the
Principal (as set out below) royalties received by the
Licensor (after deducting Commission due to the Licensor) in
such prior Quarter. Such monies shall become due from the date
of invoice.
Bank Details:
Bank:
Sort Code:
Account Name:
Account Number:
4.11.4 The Agent shall pay interest if it shall make a late payment
of monies previously received by the Licensor 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 the Principal upon request.
4.13 Inspection of Books and Premises
To permit the Principal 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 the Principal.
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 the Principal 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 Licensor shall meet the sales targets agreed from time to time with
the Principal. 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 Licensor 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 Licensor makes 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
the Licensor or any similar occurrence in any jurisdiction affected the
Licensor).
6. TERMINATION CONSEQUENCES
6.1 Procedure
On the termination of this Agreement the Licensor undertakes:
6.1.1 to return to the Principal 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 the Principal'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 the Principal
after that date notwithstanding that the Licensor 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 Licensor 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 Licensor.
6.2.2 If termination is due to a breach by the Licensor then the
Licensor 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 Licensor shall cease to
be entitled to collect royalties from licensees and instead
the Principal shall collect such royalties and shall then
account to the Licensor for the commission within 14 days of
the Principal's receiving royalties from Licensees. On
termination the Licensor shall pass to the Principal 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 Licensor shall indemnify the Principal against all actions, claims,
costs, damages and expenses which it may suffer to sustain as a result
of actions of the Licensor which have not been authorised by the
Principal..
7.2 The Principal shall indemnify the Licensor against all actions, claims,
costs, damages and expenses arising out of the Licensor's use of the
Intellectual Property in accordance with terms of this Agreement.
8. INSPECTION
The Licensor shall permit the Principal at all reasonable times to
inspect the Licensor's premises in order to satisfy itself that the
Licensor is complying with its obligations under this Agreement.
9. MISCELLANEOUS
9.1 No Waiver
No waiver by the Principal of any of the Licensor's obligations under
this Agreement shall be deemed effective unless made by the Principal
in writing nor shall any waiver by the Principal in respect of any
breach be deemed to constitute a waiver of or consent to any subsequent
breach by the Licensor 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 Clause 1 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 the
Principal 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 the Principal.
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 dispatch 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.
SIGNED BY
/s/
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FOR AND ON BEHALF OF THE PRINCIPAL
SIGNED BY
/s/ P. Shorrocks
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FOR AND ON BEHALF OF THE LICENSOR
SCHEDULE 1
INTELLECTUAL PROPERTY
STYLOPHONE and all associated Intellectual Property created by Dubreq Limited
