AWANHEART AGENCY AGREEMENT

BETWEEN

AWANHEART LIMITED

AND

____________________

AWANHEART LIMITED

www.awanheart.com

Oakwood Court, City Road, Bradford, BD8 8JY

Tel: +44 (0) 1274 214600

AGENCY AGREEMENT

This Agreement is made on the _____ day of __________ _____

BETWEEN:

1. Awanheart Limited (Company No. 10615544) whose registered office is at Oakwood Court, City Road, Bradford, United Kingdom, BD8 8JY (“the Principal”); and

2. _____________________ (“the Agent”)

of _________________________________________________________________

WHEREAS:

(A) The Principal sells unique giftware products for all occasions including humorous and sentimental gifts e.g. Mugs, Plaques, licensed products & other giftware.

(B) The Agent wishes to act as the Principal’s 'non -exclusive' agent in the Territory/Area as follows -

____________________________________________________________________________________________________________________________________________.

IT IS NOW AGREED as follows:

1. INTERPRETATION

1.1 In this Agreement, unless the context otherwise requires:

“FORCE MAJEURE” means, in relation to either party, any circumstances beyond the reasonable control of that party (including, without limitation, any strike, lock-out or other form of industrial action).

“HOUSE ACCOUNTS” means customers who place orders directly with the Principal via the internet, telephone or other direct means; and who wishes to deal with Principal directly.

“INTELLECTUAL PROPERTY” means any patent, copyright, registered design, trademark or other industrial or intellectual property right subsisting in the Territory in respect of the Products, and applications for any of the foregoing.

“NET SALES VALUE” means, the total value of the products purchased i.e. price paid by the customer (hence, excluding all taxes, value added and disbursements)

“PRODUCTS” means all products made available by the Principal to be sold.

“QUARTER” means each period of three months ending on 31st March, 30th June, 30th September and 31st December.

“RESTRICTED INFORMATION” means any information that is disclosed to the Agent by the Principal pursuant to or in connection with this Agreement (whether orally or in writing, and whether or not expressly stated to be confidential or marked as such).

“TERRITORY” means the area (county / counties?) in which the agent primarily operates and may from time to time be varied by notification in writing by the Principal to the Agent.

“YEAR OF THIS AGREEMENT” means the period of 12 months from the date of this Agreement and each subsequent consecutive period of 12 months during the period of this Agreement.

1.2 Any reference in this Agreement to “writing” includes a reference to letter, email or other comparable means of communication.

1.3 Any reference in this Agreement to any provision of a statute shall be construed as a reference to that provision as amended, re-enacted or extended at the relevant time.

1.4 The headings in this Agreement are for convenience only and shall not affect its interpretation.

1.5 The masculine shall be deemed to include the feminine where appropriate.

2. APPOINTMENT OF AGENT

2.1 The Principal hereby confirms the appointment of the Agent as its non-exclusive agent for the sale of the Products in the Territory, and the Agent hereby agrees to act in that capacity, subject to the terms and conditions of this Agreement.

2.2 The Principal shall be entitled to make sales of the Products to customers in the Territory in response to unsolicited orders but, subject as provided in clauses 2.4, 2.5, 2.6 and 2.7, not otherwise.

2.3 The Agent shall not solicit or accept any orders for the Products:

2.3.1 from any person outside the Territory, without express written permission from the Principal

2.4 If the aggregate Net Sales Value of Products sold by the Agent on behalf of the Principal in the Territory during any year of this Agreement (other than the first) is less than £10,000 or such other amount as is established under clause 4.4 of this Agreement, or if no sales of the Products are obtained from any customer during a consecutive 6 month period due to the Agent’s failure to visit such customer, the Principal shall be entitled (without limitation), to:

2.4.1 terminate the restrictions on the Principal specified in clauses 2.2 and 2.3; and/or

2.4.2. reduce or otherwise vary the Products that the Agent may sell; and/or

2.4.3. reduce or otherwise vary the Territory within which the Agent may sell.

2.5 If the Agent becomes unable to work due to illness or injury that is expected to continue or that has continued for a period in excess of 4 weeks, the Principal shall be entitled to appoint a second agent to service the Agent’s accounts or take such other action as the Principal deems necessary or desirable.

2.6 The Principal may, in its sole discretion, sell Products in the Territory directly to House Accounts.

2.7 The Principal may, in its sole discretion, sell Products in the Territory directly via the internet.

3. THE AGENT’S DUTIES

3.1 The Agent shall, at all times during the continuance of this Agreement:

3.1.1 act in the interests of the Principal and not allow its interests to conflict with the duties that it owes to the Principal; and

3.1.2 act towards the Principal dutifully and in good faith.

3.2 The Agent shall use their best endeavours to promote, market and solicit orders for the Products to customers and prospective customers in the Territory, but shall not be entitled to and shall have no authority to enter into contracts for the sale of the Products in the name and on behalf of the Principal.

3.3 The Agent shall conduct the promotion, marketing and solicitation of orders of the Products in the Territory with all due care and diligence and shall cultivate and maintain good relations with customers and potential customers in the Territory in accordance with sound commercial principles.

3.4 The Agent shall be entitled to perform its duties hereunder in such manner as it may think fit, subject as provided in this Agreement and to any directions which the Principal may from time to time properly give.

3.5 The Agent shall:

3.5.1 make themselves available at all reasonable times and, upon reasonable notice, to the Principal for the purposes of consultation and advice relating to this Agreement and the Products;

3.5.2 attend meetings with representatives of the Principal and such customers or prospective customers in the Territory as may be necessary for the performance of his duties under this Agreement;

3.5.3 make such calls upon customers or potential customers in the Territory for the purpose of promoting the Products as the Agent may think fit;

3.5.4 provide to the Principal a weekly worksheet detailing the number of visits made to customers or potential customers, the number of orders placed for the Products and the Net Sales Value of these orders;

3.5.5 attend such trade exhibitions for a minimum of 8 hours a day where the Principal considers that the trade exhibition is relevant to the Territory or for such number of hours as the Principal and the Agent may from time to time agree. In the absence of such agreement the Principal may reasonably require attendance at such trade exhibitions for such number of hours as it considers reasonable; and

3.5.6 give to the Principal at least 14 days’ notice in writing of the dates of any period of holiday exceeding 3 working days during which the Agent will not be performing his duties under this Agreement.

3.6 The Agent shall promptly refer to the Principal all enquiries concerning the Products from customers and prospective customers outside the Territory.

3.7 The Agent shall in all dealings concerning the Products describe himself as “Sales Agent” for the Principal.

3.8 The Agent shall from time to time keep the Principal fully informed of the Agent’s promotional and marketing activities (if any) in respect of the Products and shall, at the end of each Quarter, provide the Principal with a detailed report of such activities during that Quarter.

3.9 The Agent shall keep the Principal informed of conditions in the market for the Products in the Territory, and of competing products and the activities of the Principal’s competitors in the Territory.

3.10 The Agent shall promptly inform the Principal of:

3.10.1 any complaint or after-sales enquiry concerning the Products which is received by the Agent; and

3.10.2 any matters likely to be relevant in relation to the manufacture, sale, use or development of the Products within or outside the Territory.

3.11 The Agent shall at its own cost and expense:

3.11.1 maintain adequate insurance in respect of the Products whilst on the Agent’s premises and ensure that nothing is done which might prejudice the same; or

3.11.2 maintain appropriate secure storage premises for the Products.

3.12 The Agent shall not:

3.12.1 pledge the credit of the Principal in any way;

3.12.2 make any modifications to the Products or their packaging or (without prejudice to the generality of the foregoing) alter, remove or tamper with the trade marks, or other means of identification on the Products;

3.12.3 use any advertising, promotional or selling materials in relations to the Products except those supplied or approved by the Principal;

3.12.4 engage in any conduct which in the opinion of the Principal is prejudicial to the Principal’s business or the marketing of the Products generally; or

3.12.5 be concerned or interested either directly or indirectly in the manufacture, sale, promotion, marketing or importation into the Territory of any goods which, in the reasonable opinion of the Principal, compete with the Products.

4. SALES AND STOCKS OF THE PRODUCTS

4.1 All sales of the Products by the Agent on behalf of the Principal shall be made on such terms and conditions as the Principal may from time to time specify in writing to the Agent, and accordingly:

4.1.1 the Agent shall, in the course of dealing with all customers and prospective customers for the Products in the Territory, bring to their notice such terms and conditions; and

4.1.2 the Agent shall not make or give any promises, warranties, guarantees or representations concerning the Products other than those contained in those terms and conditions of sale.

4.2 All sales of the Products by the Agent on behalf of the Principal shall be at the price specified in the price lists which shall from time to time be supplied to the Agent for the purpose by the Principal, subject to such discounts and other deductions as the Principal may from time to time agree to in writing.

4.3 Title to the Products shall at no time pass to the Agent.

4.4 As soon as is practicable after the date of this Agreement, and within a reasonable time before the beginning of each year of this Agreement (other than the first), the Principal and the Agent shall discuss and co-operate to try to agree target volumes and sales for the relevant year of this Agreement in relation to each of the Products to be sold hereunder. In the absence of such agreement, the Principal may specify target volumes which it considers reasonable.

5. INTELLECTUAL PROPERTY

5.1 The Agent shall promptly and fully notify the Principal of any actual, threatened or suspected infringement in the Territory of any intellectual property of the Principal which comes to the Agent’s notice, and of any claim by any third party so coming to its notice that the importation of the Products into the Territory, or their sale therein, infringes any right of any other person, and the Agent shall at the request and expense of the Principal do all such things as may be reasonably required to assist the Principal in taking or resisting any proceedings in relation to any such infringement or claim.

5.2 Nothing in this Agreement shall give the Agent any rights in respect of any trade names or trademarks used by the Principal in relation to the Products or of the goodwill associated therewith, and the Agent hereby acknowledges that, except as expressly provided in this Agreement, he shall not acquire any rights in respect thereof and that all such rights and goodwill are, and shall remain, vested in the Principal.

5.3 The Agent shall not use in the Territory any trademarks or trade names so resembling the trademarks or trade names of the Principal as to be likely to cause confusion or deception.

5.4 The Agent shall, at the expense of the Principal, take all such steps as the Principal may reasonably require to assist the Principal in maintaining the validity and enforceability of the intellectual property of the Principal during the continuance of this Agreement.

5.5 Without prejudice to the rights of the Agent to challenge the validity of any intellectual property of the Principal, the Agent shall not do, or allow to be done, any act which would or might invalidate or be inconsistent with the intellectual property of the Principal and shall not omit or authorise any third party to omit to do any act which, by its omission, would have that effect.

6. RIGHTS AND DUTIES OF THE PRINCIPAL

6.1 The Principal shall at all times during the continuance of this Agreement act towards the Agent dutifully and in good faith.

6.2 The Principal shall be entitled from time to time to extend the range of the Products or discontinue any of the same at any time.

6.3 The Principal may refuse any order at any time and no commission or other payment shall be payable by the Principal to the Agent in relation to such order or refusal.

6.4. The Principal shall:

6.4.1 at its own expense promptly supply the Agent with such samples, catalogues, price lists, terms and conditions of sale, advertising, promotional and selling materials, literature and information as the Agent may from time to time reasonably require for the purpose of the promotion and sale of the Products in the Territory;

6.4.2 at the request of the Agent supply to the Agent the name and address of any customer to which the Principal has sold any Products pursuant to clauses 2.3 or 2.7;

6.4.3 notwithstanding anything to the contrary in this Agreement, give such notice to the Agent of any changes in the range of the Products, its terms or conditions of sale or its prices of the Products as will enable the Agent to conduct the promotion, marketing and solicitation of orders for the Products in an orderly manner.

6.4.4 if at any time it expects that the volume of sales of the Products will be significantly lower than the volume which the Agent would expect under normal circumstances, give written notice of that expectation to the Agent within a reasonable time.

6.5 On:

6.5.1 opening a new account; or

6.5.2 where an account or customer notifies the Principal that it wishes to deal with the Principal direct, then in either case the Principal may in its sole discretion accept the customer as a House Account.

7. FINANCIAL PROVISIONS

7.1 In consideration of the obligations undertaken by the Agent hereunder, the Principal shall subject as provided in clause 7.2, pay the Agent commission equal to 10.0% of the Net Sales Value when cumulative sales for the year reach £10,000, a commission of 12.5% for sales between £10.000 and £50,000, and 15% will be paid on all amounts in excess of £50,001 for which a contract of sale is procured directly by the Agent’s efforts on behalf of the Principal pursuant to this Agreement. For the avoidance of doubt no commission shall be payable in respect of sales made pursuant to clauses 2.3, 2.4, 2.6 and 2.7.

7.2 If the Agent is appointed as a successor to a person who was an agent for the Principal in relation to the Products in the Territory and that person is entitled to commission on any sales of the Products made in the Territory after the appointment of the Agent pursuant to this Agreement, the commission payable pursuant to clause 7.1 shall be reduced by the amount of the commission due to that person.

7.3 The Principal shall supply to the Agent such information as the Agent may reasonably require for the purpose of establishing the amount of commission due to him.

7.4 Commission payable by the Principal to the Agent shall fall due at the end of the month in which an invoice is issued to a customer and shall be paid not later than the final date of the following month.

7.5 No commission shall be paid in respect of sales made by the Principal after termination of this Agreement and the Principal shall be entitled to set off any money payable to the Agent against all claims and monies lawfully due to the Principal from the Agent.

7.6 All sums payable under this Agreement are exclusive of any value added tax or other applicable sales tax. Such tax may be added to the sum in question if applicable. Where any withholding tax or similar deduction is made by the Principal, the sum in question shall be paid net of that deduction.

7.7 Commissions will be paid on the cash receipts from sales, not reported sales.

7.8 Irrespective of any other provision in this Agreement the Principal shall be entitled to reclaim any commission previously paid to the Agent (whether by set-off against other commission due to the Agent or otherwise as the Principal may determine) in respect of orders accepted by the Principal that remain unpaid after a period of six months.

8. CONFIDENTIALITY

8.1 Except as provided by clauses 8.2 and 8.3, the Agent shall at all times during the continuance of this Agreement and after its termination:

8.1.1 use its best endeavours to keep all Restricted Information confidential and accordingly not disclose any Restricted Information to any other person; and

8.1.2 not use any Restricted Information for any purpose other than the performance of its obligations under this Agreement.

8.2 Any Restricted Information may be disclosed by the Agent to:

8.2.1 any customers or prospective customers;

8.2.2 any governmental or other authority or regulatory body; or

8.2.3 any employees of the Agent or of any of the aforementioned persons to such extent only as is necessary for the purposes contemplated by this Agreement, subject in each case to the Agent using its best endeavours to ensure that the person in question keeps the same confidential and does not use the same except for the purposes for which the disclosure is made, or to any person as is required by law.

8.3 Any Restricted Information may be used by the Agent for any purpose, or may be disclosed by the Agent to any other person, to the extent only that:

8.3.1 it is at the date hereof, or hereafter becomes, public knowledge through no fault of the Agent (provided that in doing so the Agent shall not disclose any Restricted Information which is not public knowledge); or

8.3.2 it can be shown by the Agent, to the reasonable satisfaction of the Principal, to have been known to the Agent prior to its being disclosed by the Principal to the Agent.

9. FORCE MAJEURE

9.1 If either party is affected by Force Majeure it shall forthwith notify the other party of the nature and extent thereof.

9.2 Neither party shall be deemed to be in breach of this Agreement, or otherwise be liable to the other, by reason of any delay in performance, or non-performance, of any of its obligations hereunder to the extent that such delay or non-performance in due to any Force Majeure of which it has notified the other party; and the time for performance of that obligation shall be extended accordingly.

9.3 If the Force Majeure in question prevails for a continuous period in excess of six months, the parties shall enter into bona fide discussions with a view of alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable.

10. DURATION AND TERMINATION

10.1 This Agreement shall come into force on the date hereof and, subject as provided in clauses 10.2, 10.4 and 10.5 and 10.6, shall continue in force for an initial probationary period of 6 months and thereafter unless or until terminated by either party giving to the other written notice expiring at or at any time after the end of that period.

10.2 Either party shall be entitled forthwith to terminate this Agreement by written notice to the other if:

10.2.1 that other party commits a repudiatory breach of any of the provisions of this Agreement;

10.2.2 in the case of a breach capable of remedy, fails to remedy the same within 30 days after receipt of a written notice giving full particulars of the breach and requiring it to be remedied;

10.2.3 an encumbrancer takes possession or a receiver or trustee is appointed over any of the property or assets of that other party;

10.2.4 that other party makes any voluntary arrangement with its creditors or becomes subject to an administration order;

10.2.5 that other party goes into liquidation (except for the purposes of amalgamation or reconstruction and in such manner that the company resulting therefrom effectively agrees to be bound by or assume the obligations imposed on that other party under this Agreement);

10.2.6 any analogous to any of the foregoing under the law of any jurisdiction occurs in relation to that other party; or

10.2.7 that other party ceases, or threatens to cease, to carry on business.

10.3 For the purposes of clause 10.2.2 a breach shall be considered capable of remedy if the party in breach can comply with the provision in question in all respects other than as to the time of performance (provided that time of performance is not of the essence).

10.4 For the avoidance of doubt, without limitation and notwithstanding any other provision of this Agreement, each of the following shall amount to a repudiatory breach on the part of the Agent of this Agreement:

10.4.1 breach of clause 3.12;

10.4.2 failure to achieve at least 70% of the targets specified in clause 2.5;

10.4.3 the Agent’s disqualification from driving;

10.4.4 the Agent’s imprisonment;

10.4.5 repeated failure to visit customers.

10.5 The period of written notice referred to in clause 10.1 shall not be less than the number of months specified in column (2) of the table below opposite the relevant period in column (1) of that table, and for this purpose the relevant period in column (1) is the aggregate of the fixed period of this Agreement and any subsequent period of the Agreement:

(1) (2)

Up to one year One month

Up to two years Two months

More than two years Three months

10.6 The period of any written notice given under clause 10.5 above shall be calculated from the date on which such notice is given.

10.7 Any waiver by either party of a breach of any provision of this Agreement shall not be considered as a waiver of any subsequent breach of the same or any other provision thereof.

10.8 The rights to terminate this Agreement given by this clause shall be without prejudice to any other right or remedy of either party in respect of the breach concerned (if any) or any other breach.

11. CONSEQUENCES OF TERMINATION

11.1 Upon the termination of this Agreement for any reason:

11.1.1 the Agent shall within 30 days send to the Principal or otherwise dispose of in accordance with the written direction of the Principal, samples and any advertising, promotional or sales material relating to the Products then in the possession of the Agent;

11.1.2 the Agent shall cease to promote, market, advertise or sell the Products;

11.1.3 the provisions of clause 7 shall continue in force in relation to:

11.1.3.1 all sales of the Products before the date of termination;

11.1.3.2 all sales of the Products after the date of termination pursuant to orders received on or before that date or where it is otherwise just and equitable in the Principal’s reasonable opinion.

11.1.4 clause 8 shall continue in force in accordance with its terms; and

11.1.5 subject as otherwise provided herein and to any rights or obligations which have accrued prior to termination, neither party shall have any further obligation to the other under this Agreement.

11.2 The costs incurred by the Agent in complying with clause 11.1.1 shall, where the termination is by the Agent pursuant to clause 10.2, be for the account of the Principal and, in any other case, be for the account of the Agent.

11.3 The provisions of clause 3.12.5 shall continue to apply for a period of one year after the date of termination.

11.4 In the event that the Agent is a Commercial Agent within the meaning of the Commercial Agents (Council Directive) Regulations 1993, and accordingly is entitled on the face of it, to an indemnity or compensation on termination of this Agreement under Regulation 17, the parties hereby agree in accordance with Regulation 17(2) that the Agent shall receive the lower of indemnity or compensation under Regulation 17 which shall be the limit of his claim against the Principal for compensation for loss of agency rights, goodwill or other loss.

11.5 If the Agent is a Commercial Agent within the Commercial Agents (Council Directive) Regulations 1993, and in the event that the Principal terminates this Agreement, failing to give the correct notice period set out in clause 10.5, then the Agent’s right to damages for such failure will be limited to the commission that would have been paid between the date of termination and the end of the correct notice period, and the Principal shall be entitled to make such payment in lieu of notice.

12. NATURE OF AGREEMENT

12.1 The Principal shall be entitled to perform any of the obligations undertaken by it and to exercise any of the rights granted to it under this Agreement through any other company which at the relevant time is its holding company or subsidiary (as defined by section 736 of the Companies Act 1985) or the subsidiary of any such holding company and any act or omission of any such company shall for the purposes of this Agreement be deemed to be the act or omission of the Principal.

12.2 The Principal may assign this Agreement and the rights and obligations thereunder.

12.3 Subject as provided in clause 12.4, this Agreement is personal to the Agent, which may not without the written consent of the Principal, assign, mortgage, charge (otherwise than by floating charge) or dispose of any of its rights hereunder, or sub-contract or otherwise delegate any of its obligations hereunder.

12.4 The Agent shall not without the prior written consent of the Principal employ sub-agents; if with such consent it does so, every act or omission of the sub-agent shall for the purpose of this Agreement be deemed to be the act or omission of the Agent.

12.5 Nothing in this Agreement shall create, or be deemed to create, a partnership or the relationship of employer and employee between the parties.

12.6 This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous agreements and understandings between the parties with respect thereto, and may not be modified except by an instrument in writing signed by the duly authorised representatives of the parties.

12.7 Each party acknowledges that, in entering into this Agreement, it does not do so on the basis of, and does not rely on, any representation, warranty or other provision except as expressly provided herein, and all conditions, warranties or other terms implied by statute or common law are hereby excluded to the fullest extent permitted by law.

12.8 If any provision of this Agreement is held by any court or other competent authority to be void or unenforceable in whole or in part, this Agreement shall continue to be valid as to the other provisions thereof and the remainder of the affected provision.

12.9 The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement and no person other than the parties to this Agreement shall have any rights under it, nor shall it be enforceable under that Act by any person other than the parties to it.

13. ARBITRATION AND PROPER LAW

13.1 Any dispute or difference arising out of or in connection with this Agreement shall be determined in accordance with the Chartered Institute of Arbitrators Rules (2000 edition) by a single arbitrator to be agreed between the parties, or failing agreement, within 14 days after either party has given to the other a written request to concur in the appointment of an arbitrator, to be appointed by the President or a Vice President of the Chartered Institute of Arbitrators.

13.2 This Agreement shall be governed by and construed in all respects in accordance with the laws of England and any dispute shall be subject to the non-exclusive jurisdiction of the English courts.

14. NOTICES AND SERVICE

14.1 Any notice or other information required or authorised by this Agreement to be given by either party to the other may be given by hand or sent (by first class pre-paid post or email) to the other party at the address referred to in clause 14.4.

14.2 Any notice or other information given by post pursuant to clause 14.1 which is not returned to the sender as undeliverable shall be deemed to have been given on the 2nd day after the envelope containing the same was so posted; and proof that the envelope containing any such notice or information was properly addressed, pre-paid, registered and posted, and that it has not been so returned to the sender, shall be sufficient evidence that such notice or information has been duly given.

14.3 Any notice or other information sent by email shall be deemed to have been duly sent on the date of transmission, provided that a confirming copy thereof is sent by first class pre-paid post to the other party at the address referred to in clause 14.4 within 24 hours after transmission.

14.4 Service of any legal proceedings concerning or arising out of this Agreement shall be effected by causing the same to be delivered to the party to be served at its registered office (in the case of the Principal) or its principal place of business (in the case of the Agent), or to such other address as may from time to time be notified in writing by the party concerned.

14.5 the Agent confirms that he understands this agreement and the relevant obligations. He is at liberty to seek suitable legal advice before deciding to sign & enter this agreement.

SIGNED BY -

for and on behalf of the Principal

SIGNED BY -

for and on behalf of the Agent