EXHIBIT 10.46
INTERNATIONAL REPRESENTATION AGREEMENT
THIS AGREEMENT is made on the
2nd day of August 2004.
BETWEEN
1.
PEAK
ENTERTAINMENT LTD of Bagshaw Hall,Bagshaw Hill,
Bakewell,
Derbyshire, DE45 1DL ("Peak"); and
2.
Blue Chip
Brands Pty Ltd of 37 Naroo Street , Balwyn, Victoria
3103,
Australia (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
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(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;
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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.
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
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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.
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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
