as of July 31, 1995
MCA, Inc.
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RE: THEME PARK AGREEMENT
Gentlemen:
Below is a summary of the terms upon which we have agreed with respect to
the use of characters and elements from DreamWorks ("DW") motion pictures
and television programs and other properties in MCA theme parks:
1. DEFINITIONS:
A. A "Theme Park" shall be defined as a park: (i) of at least forty (40)
contiguous acres; (ii) surrounded by a fence, water or other barrier (or
combination of barriers); (iii) which consists of at least five rides,
attractions, shows and exhibits, which may or may not be based upon a
single theme; (iv) which has an admission charge to the Theme Park as a
whole (although additional charges may be made for specific rides or
attractions); and (v) which shall generally be advertised to the public as
a theme park, amusement park or studio tour-type attraction. Without
limitation, Six Flags Magic Mountain and Universal Studios are both Theme
Parks, but IMAX is not, nor would any entertainment complex or single
stand-alone ride or combination of two to five Permanent Attractions and
Live Shows be a Theme Park, even if part of a hotel, shopping center,
entertainment or motion picture complex or other development.
B. A "Permanent Attraction" shall be (i) a ride or free-standing
attraction, area, building or location of any nature using any character,
theme, story, setting, or any other element, including the title or name,
from an "Eligible DW Property" (as defined below) ("DW Element(s)") and/or
which advertises or promotes in any way an identification between such use
and any Eligible DW Property or (ii) any show, event or any other Theme
Park use of any DW Elements which is intended to or does remain in place
for two years or more, including non-consecutive periods (e.g., Electric
Light Parade). As illustrations, without limitation, "Splash Mountain",
the "Back to the Future Ride", the "Flintstones Show", "Captain EO", "Star
Tours", and the "Wild West Show" are all Permanent Attractions.
C. A "Live Event" is a scheduled live stage show, parade, or other
organized event taking place at a Theme Park that includes or uses in any
way one or more DW Elements or promotes in any way an identification
between such use and any Eligible DW Property, including without
limitation individual(s) or groups of
individuals costumed as characters from any Eligible DW Property who
perform in any portion of a Theme Park as part of a pre-choreographed or
scripted routine, show or review with other actors.
D. "Eligible DW Property(ies)" shall mean feature length theatrical motion
pictures (live action and animation) which are initially released during
the "Term" (as defined below), television programs which are initially
broadcast during the Term, or other DW product which is released to the
general public (e.g., interactive game or device distributed to the
public) during the Term, which DW has the right to exploit in Theme Parks
as set forth herein. Notwithstanding the foregoing, "Eligible DW
Properties" shall exclude any properties co-produced by MCA and DW
pursuant to Exhibit "C", all theme park rights to which shall be governed
by the existing agreements between and among MCA, Diamond Lane
Productions, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. DW hereby confirms that the motion
pictures entitled "Prince of Egypt", "El Dorado" and, if produced, "Ants"
shall be included, i.e., DW shall grant the "Theme Park Rights" (as
defined below) in and to such properties to MCA in accordance with the
terms hereof, although the parties hereto acknowledge that there may be
incidental elements of such motion pictures, including voice performances,
licensed music, and other audio or visual elements which may require
consents of third parties or additional payments.
E. "Walk-Arounds" shall be defined as individual(s) or groups of
individuals costumed as characters from any Eligible DW Property, who walk
around a Theme Park and do not perform as part of a pre-choreographed or
scripted routine, show or review with other actors except as contemplated
under Paragraph 4.B.(3) below (in which event such pre-choreographed or
scripted routine, show or review shall be deemed a Live Event).
2. TERM: The Agreement shall be for a term ("Term") which begins as of the
date of execution hereof and ends upon the earlier of the date six (6)
months after the initial domestic release of the last theatrical motion
picture which is subject to Exhibit "A" or December 31, 2001; provided,
however, that if Exhibit "A" is extended pursuant to its terms to December
31, 2005, this Agreement shall be deemed extended until the earlier of the
date six (6) months after the initial domestic release of the last
theatrical motion picture which is subject to the extended term of Exhibit
"A" or December 31, 2005. Notwithstanding the foregoing, the Term shall
also terminate as of the earlier date upon which either DW or MCA gives
notice of its election to terminate Exhibit "A" pursuant to the terms
thereof; provided, however, that if MCA terminates "Exhibit "A" by reason
of DW's breach and/or DW terminates Exhibit "A" other than by reason of
MCA's breach, DW will, at its election, either:
A. Remit to MCA the "Unearned Exclusivity Fee". The Unearned
Exclusivity Fee shall be an amount equal to the following: (a) the
total amount of fees paid by MCA per Paragraph 4.A. below, less all
amounts refunded per the proration formula in Paragraph 4.A. and/or
credited against applicable fees payable under Paragraph 4.B.,
multiplied by (b) *** minus a fraction, (i)
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the numerator of which is the number of feature length motion
picture Eligible DW Properties ("Pictures") Theme Park Rights with
respect to which have been made available by DW to MCA hereunder
during the Term (i.e., prior to such termination) and (ii) the
denominator of which is the number of years (or partial year) for
which MCA has paid a fee under Paragraph 4.A. below multiplied by
***. For example, if: (i) MCA has paid *** in exclusivity fees, (ii)
Exhibit "A" is terminated 6 months after the second Anniversary
Date, (iii) *** is credited against applicable fees payable under
Paragraph 4.B., and (iv) there were *** Pictures during such Term,
then DW shall remit to MCA ***. OR
B. Provided that MCA has then paid at least *** in exclusivity fees
under Paragraph 4.A., commit to accord MCA the exclusive Theme Park
Rights to up to the first *** consecutive Pictures, plus the next
*** consecutive Pictures for each subsequent payment of *** in
exclusivity fees under Paragraph 4.A, to a cap of *** such Pictures,
whether or not such Pictures are Released Prior to Termination, less
the number of Eligible DW Properties (excluding feature length
theatrical motion pictures) the Theme Park Rights to which MCA has
then exploited or notified DW of its intention to exploit. For
example, if MCA has paid *** in exclusivity fees (and has not
exploited or notified DW of its intention to exploit any Eligible DW
Properties), MCA shall have exclusive Theme Park Rights to ***
Pictures. Notwithstanding the foregoing, if any of the exclusivity
fees are refunded to MCA per the proration formula in Paragraph 4.A.
(if such refund is not a multiple of ***, DW will further refund an
amount necessary to increase the refund to the next multiple of
***), then the number of Pictures shall be reduced by *** Picture
for each *** refunded. For example, if DW refunds MCA *** per the
proration formula in Paragraph 4.A., then DW shall refund an
additional *** to MCA and the number of Pictures shall be reduced by
***.
3. GRANT OF RIGHTS/EXCLUSIVITY: Subject to the terms hereof and the payment
of all consideration required hereunder, DW grants MCA the "Theme Park
Rights" during the Term. As used herein "Theme Park Rights" shall mean the
right to incorporate DW Elements from Eligible DW Properties into Theme
Parks, i.e., into Permanent Attractions, Live Events, Restaurants,
Walk-Arounds, and promotional uses in Theme Parks. MCA shall be entitled
to exploit such Theme Park rights solely in Theme Parks under the control
of MCA, subject to the terms and conditions set forth below. For the
purposes hereof, a Theme Park shall be deemed to be under the control of
MCA if (i) MCA retains an equity interest in such Theme Park, (ii) MCA has
an active creative role; (iii) the park uses the MCA name; and (iv) DW has
all of its approvals and controls with respect to such park as set forth
herein. Without limiting the foregoing, MCA shall not have the right to
assign to any third party the right to make any use of any DW property in
a Theme Park other than a Theme Park which satisfies the criteria set
forth in (i) and (ii) above, except as set forth in Paragraph 9. below.
The foregoing grant of Theme Park Rights shall not be deemed to vest in
MCA
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any right of ownership in or to any DW motion picture, television program,
or other property, or any right to use DW Elements in any venue or form
other than in a Theme Park, and DW retains all rights not expressly
granted herein. Without limiting the foregoing, the foregoing grant of
exclusivity shall not preclude DW from using DW characters or elements or
exploiting Eligible DW Properties in any entertainment venue in any form
other than a Theme Park (including without limitation restaurants, stores,
live stage shows, mall tours or other projects themed to or using any
Eligible-DW Property/or any other DW property); provided, however, that DW
shall not have the right to license DW Elements from Eligible DW
Properties to third parties during the Term for use in Permanent
Attractions, Live Events, Walk-Arounds, or Restaurants themed to such
Eligible DW Property in any entertainment complex which is adjacent to and
is advertised and promoted as operated in conjunction with a Theme Park
owned by such third party.
4. COMPENSATION: MCA shall pay DW the following compensation:
A. Yearly Exclusivity Fee: Commencing on June 7, 1998, MCA shall pay DW
*** per year (payable *** on June 7, 1998 and *** on each anniversary date
["Anniversary Date"] thereafter during the Term, (subject to proration to
the extent that the period between the, last Anniversary Date to occur
during the Term and the date of expiration or termination of the Term is
less than twelve months), *** of which shall be applicable against fees as
set forth in Paragraph 4.B. below paid or payable within each such year.
For the purposes hereof, fees shall be considered paid or payable at such
time as they are due pursuant to the payment schedule specified for the
applicable use set forth below. There shall be no carry forward or carry
back of fees paid or payable during any Term year against the Term year
exclusivity fees payable for any other Term years.
B. Additional Fees: Fees as set forth below:
(1) Permanent Attractions: For each Permanent Attraction in each
Theme Park, fees as follows:
(a) An initial fee of *** if the Permanent Attraction is based
on an animated theatrical motion picture (including any combination of
live action/animation picture [e.g., "▇▇▇▇▇ Rabbit"] and/or
non-traditional animation, such as stop-motion or claymation); *** if the
Permanent Attraction is based on a live-action theatrical motion picture.
With respect to any Permanent Attraction based on any motion picture which
is a co-production with MCA (other than one co-produced pursuant to
Exhibit "C"), MCA and DW shall negotiate a fee in good faith ***. Such
fees shall be payable *** upon the earlier of MCA's notification to DW or
public announcement that MCA intends to construct the Permanent
Attraction; *** on commencement of construction; and *** upon the initial
public opening; and
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(b) *** for each Permanent Attraction, per Theme Park, per
year thereafter, commencing upon the first anniversary of the initial
public opening of such attraction.
For the fourth and fifth Permanent Attractions at any single Theme Park,
the amounts set forth in Paragraphs 4.B.(1)(a) and 4.B.(1)(b) above shall
be increased by ***; for the sixth and subsequent Permanent Attractions at
any Theme Park, the amounts set forth in Paragraphs 4.B.(1)(a) and
4.B.(1)(b) shall be increased by ***.
(2) Live Events: For each Live Event based on any Eligible DW
Property, MCA shall pay DW either, at MCA's election:
(a) *** per Live Event, per year, per Theme Park, commencing
upon the date of the initial public performance; or
(b) *** per Live Event for six months, per Theme Park, payable
upon the initial public performance. At the conclusion of such six months,
MCA shall pay DW ***if MCA elects to continue such Live Event and then,
commencing one year after the initial public performance of such Live
Event, *** per year, per Theme Park, for such Live Event.
Any event which MCA determines in good faith to be a Live
Event (i.e., as opposed to a Permanent Attraction) and which is performed
for a period in excess of *** (or *** if the additional *** is necessary
for such show to run for two complete ▇▇▇▇▇▇▇), whether or not
continuously performed, shall be deemed a Permanent Attraction and upon
the conclusion of such *** or ***, as applicable, MCA shall pay DW an
amount equal to the difference between sums already paid with respect to
the show, and the applicable fee due for a Permanent Attraction as set
forth in Paragraph 4.B. 1.(a) above. By way of example, if a Live Event
based on an animated motion picture runs for ***, which encompasses two
▇▇▇▇▇▇▇, upon the conclusion of such ***, MCA would pay DW *** less
amounts paid under 4(B)(2) in order to continue the applicable Permanent
Attraction and on the next anniversary of the initial public performance,
the annual payments as set forth in 4.B.1(b) would commence, provided,
however, that if prior to expiration of the above *** month period, MCA
announces or designates the applicable event to be a Permanent Attraction,
upon the conclusion of such *** period, MCA would then pay DW the
applicable fee in paragraph 4.B. 1 .(a) less the payments under 4.B.2 plus
the payments under 4.B.1.(b) commencing upon the next anniversary of such
announcement or designation.
(3) "Walk-Arounds": With respect to all "Walk-Around"
characters, MCA shall pay DW *** on a one-time basis, per Eligible DW
Property, per Theme Park, payable upon the first use of any character;
provided, however, that no payment shall be due for the use of any
strolling Walk-Around characters if (i) such characters do not perform any
scripted lines or songs or choreographed routine, or if the aggregate time
of all scripted lines and songs and
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choreographed routines performed by any Walk-Around character or group of
Walk-Around characters is *** or less (e.g., if two (2) or more
Walk-Around characters speak, sing or perform together, the aggregate
running time of all lines, songs, and/or performance of any group of
Walk-Around characters may be ***; and (ii) photographs, drawings, or
other visual depictions of and/or mention, description, excerpted
performance, or any other reference to the Walk-Around characters do not
comprise more than-*** of any single item of visual and/or auditory
marketing material or any single advertisement. By way of example, if a
newspaper ad promoting a Theme Park includes drawings of the Walk-Around
Characters or photographs depicting the Walk-Around Characters, which
comprise *** of the total artwork space used, payment would be due as set
forth above for such Walk-Around Characters.
(4) Restaurants: For any restaurant in a Theme Park (which may
have an entrance outside the Theme Park) themed to an Eligible DW
Property, if such restaurant is used in connection with the advertisement
or promotion of the applicable Theme Park ("Restaurant"), MCA shall pay DW
*** on a one-time basis per Restaurant, per Theme Park, upon the opening
of each such Restaurant (or at such later time, if ever, as payment
becomes due for such Restaurant by reason of the use of such Restaurant to
advertise or promote the applicable Theme Park, as set forth below). A
Restaurant shall be deemed to be used in connection with advertisement or
promotion of the applicable Theme Park if photographs, drawings, or other
visual depictions of and/or mention, description, or any other references
to the Restaurant comprise more than *** of any single item of visual
and/or auditory marketing material or any single advertisement for the
applicable Theme Park. No payment shall be due for the use of any themed
Restaurant which is not used to promote the applicable Theme Park, i.e.,
if photographs, drawings, or other visual depictions of and/or mention,
description, or any other references to the Restaurant do not comprise
more than *** of any single item of visual and/or auditory marketing
material or any single advertisement for the applicable Theme Park.
(5) Themed Areas: For any area or location which is entirely
themed to one DW property (including any sequels, remakes, TV series, or
other forms of exploitation of such property) ("Themed Area") which is
used in connection with the advertisement or promotion of the applicable
Theme Park, payment shall be due for each individual use (i.e., Restaurant
and Walk-Around characters) as set forth above. If the themed area
contains or incorporates DW Elements into uses which are not specifically
listed above, MCA and DW shall negotiate a fee in good faith, which fee
shall in no event be lower than the applicable fee for a Permanent
Attraction. A themed area shall be deemed to be used in connection with
the advertisement or promotion of the applicable Theme Park if
photographs, drawings, or other visual depictions of and/or mention,
description or any other reference to the themed area comprise more than
*** of any single item of visual or auditory marketing material or any
single advertisement. No payment shall be due for the use of any themed
area which is not used to promote the applicable Theme Park, i.e, if
photographs, drawings, or
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other visual depictions of and/or mention; description or any other
reference to the themed area do not comprise more than *** of any single
item of visual or auditory marketing material or any single advertisement
for the applicable Theme Park.
(6) Other Promotional Uses: No fee shall be payable for use of
elements from any DW feature-length motion picture or television special
in promotional shows or displays (e.g., use of props or sets, showing of
clips) which are limited in time to coincide with the initial theatrical
or television release of the property, as applicable.
(7) Other Uses: For any Theme Park use of elements from an
Eligible DW Property which is not listed above, MCA and DW shall negotiate
a fee consistent with the above fees.
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5. MERCHANDISING: MCA will construct and maintain immediately adjacent to
each Permanent Attraction and Live Event (for the duration of operation of
such Permanent Attraction and/or Live Event) a kiosk or separate covered
sales area of at least *** square feet, which will exclusively contain
merchandise based upon or themed to the same motion picture or television
program as the applicable Permanent Attraction or Live Event. Each kiosk
or sales area shall include at least *** square feet which is dedicated
entirely to licensed DW merchandise; provided, however, that DW
acknowledges that such kiosk or sales area may contain a small number of
non-themed items (e.g., film and photographic supplies). DW shall sell
such licensed DW merchandise to MCA at DW's customary wholesale price, and
receive DW's customary royalty therefrom. If MCA constructs a Permanent
Attraction or Live Event, subject to DW's pre-existing and prospective
third party merchandising arrangements, MCA shall have the right to
manufacture and sell in the theme park which houses such Permanent
Attraction or Live Event, merchandising based upon the same motion picture
or television program on which the applicable Permanent Attraction or Live
Event is based. For merchandise so manufactured by MCA for sale at the
park, MCA will pay DW a royalty of *** of the wholesale price (i.e., the
greater of MCA's wholesale price or the price MCA would pay to the normal
DW supplier of comparable goods). For example, if MCA's wholesale price is
*** per t-shirt, and DW's t-shirt supplier would charge *** for a
comparable shirt, Universal would pay *** on ***. All payments due to DW
pursuant to this Paragraph 5 shall be made on a quarterly basis and shall
be accompanied by a statement setting forth in reasonable detail a
description of the items of merchandise, the number of each item
manufactured and the wholesale price of each such item. Upon reasonable
notice and during normal business hours, DW shall have the right to audit
MCA's books and records pertaining to the retail sales of merchandise
based upon and/or themed to DW properties. MCA shall be solely responsible
for maintenance and operation of each kiosk or sales area, including
without limitation payment of all operating costs and salaries, payment of
sales taxes, and maintenance of customary insurance coverage.
6. APPROVALS: DW will have reasonable approvals over all creative and design
elements, location, advertising, promotion (including sponsorships and
tie-ins) and merchandising with respect to any Permanent Attraction, Live
Event, Walk-Arounds, Restaurants, Promotional Uses, merchandising areas,
and any other use of elements from Eligible DW Properties, as described
above. Without limiting the generality of the foregoing, DW shall have the
right to approve all creative aspects of any new film elements, footage,
animation, voice recording, and other elements specifically created for
Theme Park uses. In no event shall DW have any lesser approval rights than
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is entitled to exercise under the existing agreement
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and MCA. MCA shall comply with all of DW's
contractual obligations and restrictions regarding the use of Eligible DW
Properties in MCA Theme Parks, and be responsible for all costs, and
creative and rights fees to third parties, including all cash fees,
payments required by virtue of any collective bargaining agreements (e.g.,
Writers Guild of America residuals or payments), bonuses or royalties
payable specifically for Theme Park
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uses hereunder, but excluding any participations which are based upon a
percentage of adjusted gross receipts, net profits, or other defined
proceeds from the exploitation of any rights relating to motion picture or
television program, and excluding any payments to officers or principals
of DW; provided, however, that DW shall be responsible for *** of any such
third party talent fees (excluding guild mandated payments) up to a
ceiling of *** of the fees payable to DW hereunder for the applicable
attraction. Upon MCA's request, DW will advise MCA of such payments
required to be made by MCA (other than payments required by virtue of any
collective bargaining agreements). Any renovations, additions, and/or
other changes to existing Permanent Attractions, Live Events,
Walk-Arounds, Restaurants, or any other use shall require approval by DW.
7. POST-TERM EXPLOITATION OF PROPERTIES: Notwithstanding the expiration of
the Term or earlier termination of the Term (including any additional time
period pursuant to Paragraph 2.B. above) upon DW or MCA's notice of its
election to terminate Exhibit "A" for any reason, MCA shall retain
exclusive Theme Park Rights to each Eligible DW Property for the longer of
(i) *** after expiration or the termination of the Term and (ii) a period
of *** after the initial domestic release, broadcast or distribution by DW
to the public of such Eligible DW Property (the "Post Term Exploitation
Period") on a property-by-property basis. For example, if an Eligible DW
Property has an initial domestic release *** prior to expiration of the
Term, the Post Term Exploitation Period will be ***. In the event of
expiration of the Term as to each Eligible DW Property with respect to
which MCA has not already exercised any of its-rights hereunder, MCA
shall, by the end of the applicable Post Term Exploitation Period, notify
DW if MCA intends to construct a Permanent Attraction or Restaurant (or
intends to complete construction, if such a project has been commenced but
not completed), stage a Live Event or exercise any of its other Theme Park
Rights hereunder based on such Eligible DW Property (the "Notice"). If MCA
gives such Notice, MCA shall be concurrently committed to pay DW the
applicable initial fees, which fees shall be paid as set forth in the next
two sentences. The initial Permanent Attraction fee shall be paid *** upon
Notice, *** upon the earlier of eighteen months after Notice or
commencement of construction and *** upon the earlier of completion of
construction or three years after Notice; the initial Live Event fee shall
be paid upon the earlier of the date of initial performance of such Live
Event or one year after Notice; and the Restaurant fee shall be paid upon
the earlier of the opening of such Restaurant or one year after Notice.
Annual fees with respect to Permanent Attractions and Live Events shall
commence within the earlier of *** after opening or *** after Notice for a
Permanent Attraction; and within *** following payment of the initial Live
Event fee for a Live Event. Annual fees shall terminate at the end of the
annual fee period in which the Permanent Attraction or Live Event, as
applicable, ceased operating on a permanent basis or if no Permanent
Attraction or Live Event is ever opened after payment of all applicable
initial fees and *** of annual fees, at which point MCA's rights with
respect thereto shall concurrently terminate. In addition, if MCA gives
such Notice, MCA shall open any such Permanent Attraction within *** of
payment of the initial fee, and any Live Event or
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Restaurant within *** of payment of the initial fee (it being acknowledged
that any such Permanent Attraction, Live Event or Restaurant shall be
deemed "opened" upon the earlier of same being opened or MCA's payment of
the applicable fee therefor). If MCA fails to comply with the foregoing,
MCA's rights hereunder shall terminate. MCA shall retain rights in DW
properties which were exploited during the Term (and/or the Post Term
Exploitation Period) as follows:
a. Permanent Attractions: MCA shall have the right to continue operation
of any Permanent Attraction created in accordance with the terms hereof,
provided that MCA continues to make the applicable yearly payments
therefor. MCA's rights with respect to all DW properties which are the
basis for such Permanent Attractions shall be non-exclusive, provided that
with respect to each DW Property which is the basis for a Permanent
Attraction, MCA shall retain exclusive Theme Park rights to such DW
Property in the "Territory(ies)" (as defined below) for which the
applicable fees have been paid or in which the applicable Permanent
Attraction(s) are constructed for the duration of operation of such
Permanent Attraction(s) (including the right to develop additional
Permanent Attractions based on the same DW Property in the same Territory,
provided that [1] MCA pays the applicable Initial Fee for each such
additional Permanent Attraction prior to the time, if ever, that all
previously constructed Permanent Attractions in such Territory cease
operations or fees are no longer paid therefor, and [2] MCA continues to
make the yearly payments for such additional Permanent Attraction). In
addition, with respect to DW Properties which are the subject of an
existing Permanent Attraction in one Territory, MCA shall have a period of
***after the opening of the immediately preceding Permanent Attraction
based on the applicable DW property (or *** after the expiration of the
Term, whichever last occurs) to notify DW that MCA intends to construct a
second (or third, fourth, fifth and so forth) Permanent Attraction based
on the same property in a different Territory (hereinafter "Additional
Territory(ies)"), and pay the applicable fee in full, and, in such event,
MCA shall have exclusive Theme Park rights to such DW Property in such
Additional Territory, provided MCA makes (and continues to make) payment
of the annual fee, and opens such additional Permanent Attraction within
the applicable time period set forth below. On the date *** after payment
of the initial fee, MCA shall commence payment of the applicable annual
fee as set forth above. If MCA has not actually opened any such Permanent
Attraction within *** of payment of the applicable initial fee, MCA shall
have the right to extend such *** period up to-an aggregate of ***, by
payment of ***, per year, per Theme Park (with respect to each such
Permanent Attraction in an additional Territory). By way of example, if
MCA opens a Permanent Attraction based on "Prince of Egypt" in the United
States on *** (and the Term has expired), MCA must notify DW that it
intends to open a "Prince of Egypt" attraction in Europe (or any other
Territory) by ***, and pay the applicable fee therefor. Provided that MCA
makes all payments and the "Prince of Egypt" attraction in Europe is
opened by ***, MCA shall have the right exercisable within *** after the
opening of the "Prince of Egypt" attraction in Europe to notify DW that it
intends to construct a "Prince of Egypt" attraction in Japan, and so
forth. If MCA exercises its right to extend as set forth in the
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preceding sentence, and any Permanent Attraction is not opened within ***
after the opening of the immediately preceding Permanent Attraction, all
rights with respect thereto shall automatically revert to DW.
The "Territories" shall be as follows: ***
b. Live Events/Restaurants/Walk-Arounds:
(i) Live Events/Restaurants: After the Term, MCA can continue to
operate any Live Event commenced during the Term or the applicable Post
Term Exploitation Period (provided MCA continues to make payments
therefor) and/or Restaurant so long as such Live Event or Restaurant is in
continuous operation, but MCA's rights will become non-exclusive with
respect to the DW property(ies) which are the basis for such Live
Events/Restaurants (except to the extent MCA has exclusive rights in such
Territory as a result of the applicable Post Term Exploitation Period, or
the continuing operation of a Permanent Attraction as provided in
subparagraph a. above, or MCA has exclusive rights during a ***
exclusivity period as specifically set forth in and pursuant to
subparagraph b.(iii) below).
(ii) Walk-Arounds: MCA may continue Walk-Arounds for *** after the
Term, but MCA's rights will become non-exclusive with respect to the DW
properties which are the basis for the Walk-Arounds on the expiration of
the applicable Post Term Exploitation Period (except as provided in
subparagraph a. above). On the date *** after the expiration of the Term,
MCA must discontinue all Walk-Arounds, except that MCA may continue
Walk-Arounds in any Theme Park in which MCA has a continuing Permanent
Attraction or Live Event based on the applicable property or for which it
has commenced paying fees with respect to a Permanent Attraction or Live
Event, for the duration of operation or performance of, or the payment of
fees for, as applicable, of the Permanent Attraction or Live Event.
(iii) *** Exclusivity Period: Notwithstanding the foregoing, for
each use of Live Events and Restaurants, whether commenced during the Term
or during the applicable Post Term Exploitation Period (the commencement
of fees being deemed to be a "use" for the purposes of this subparagraph),
MCA's rights with respect to exploitation of the applicable DW property in
such use only will be exclusive for a minimum of ***. By way of example,
if MCA opens a "Prince of Egypt" Restaurant on ***, after the expiration
of the Term, MCA may continue to operate the Restaurant, and commencing
upon ***, DW may license to a third party the right to exploit a
Restaurant based on "Prince of Egypt" in a Theme Park.
8. VIRTUAL THEATER PROJECT: DW intends to develop a "Virtual Theater"
project, which MCA acknowledges does not interfere with any rights it may
have to the services of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in connection with MCA Theme
Parks. The parties hereto agree that provided such Virtual Theater Project
is not constructed
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***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
in or adjacent to a Theme Park, or advertised or promoted as operated in
conjunction with a Theme Park, such Virtual Theater Project shall not be
deemed a Theme Park and shall not be subject to the exclusivity provisions
of this agreement. If MCA so elects, MCA shall have the right to
contribute to the financing and the development and construction of the
first such Virtual Theater project, upon terms to be negotiated in good
faith (and each succeeding Virtual Theater project, if MCA contributed to
the immediately preceding Virtual Theater Project). If MCA does not make
such election and notify DW (within 30 days of notice from DW), or if DW
and MCA are unable to reach agreement with respect to the terms of MCA's
involvement within 30 days after the commencement of such negotiations, DW
has the right to proceed with development and construction of the Virtual
Theater (and to create duplicate projects in various locations) without
any further obligation to MCA.
9. ASSIGNMENT: Except as expressly set forth below, MCA may not assign,
license, transfer or otherwise encumber any of its rights or obligations
hereunder, and in the event of any such assignment by MCA, all of MCA's
rights hereunder shall immediately terminate, except as follows: Any
assignee of MCA which assumes all obligations of MCA hereunder in writing
with respect to one or more Theme Parks may continue to operate any
Permanent Attraction, Live Event or Restaurant which is in operation in
such Theme Park on the date of such assignment, provided that (i) MCA's
assignee continues to make the applicable payments therefor and comply
with all of its other obligations hereunder, (ii) such assignee may not
make any changes to any elements of such Permanent Attraction (excluding
only maintenance or upgrading of mechanical elements which do not in any
way change the visual, auditory, or any other creative elements of such
Permanent Attraction), (iii) DW continues to have all of its approvals and
controls with respect to such Theme Park as set forth herein, (iv) such
Theme Park shall continue to operate under a MCA proprietary name, (v)
such Theme Park continues to be maintained in substantially the same
condition, and (vi) such assignee's rights shall otherwise be as set forth
herein, and subject to its compliance with all other terms hereof. In
addition, MCA may assign its rights hereunder as security with respect to
any MCA Theme Park solely in connection with a financing transaction (e.g.
mortgage, sale and lease-back, or recapitalization) as a result of which
by foreclosure or similar proceeding any financier(s) (or its successors
or assigns) is assigned control of an MCA Theme Park, in which event such
assignee may continue to operate any Permanent Attraction, Live Event or
Restaurant which is in operation on the date of such assignment, subject
to clauses (i) through (vi) inclusive in the immediately preceding
sentence. Notwithstanding the above, nothing shall limit MCA's right to
assign or transfer any interest in any Theme Park in which MCA (or such
assignee or transferee) does not utilize any rights hereunder (including
but not limited to any Permanent Attraction) and in this regard MCA (or
such assignee or transferee) may continue to operate any Permanent
Attraction, if it stops using any copyrightable or other protectable DW
elements and ceases all advertising and publicity which in any way
promotes an identification between the use and any Eligible DW Property.
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The parties hereto intend to enter into a more formal, long, form agreement.
Unless and until such agreed is executed, the parties hereto confirm by their
signature below that the foregoing constitutes a binding agreement with respect
to the subject matter hereof.
DREAMWORKS L.L.C.
By __________________________________
Its__________________________________
___________________/MCA
By _________________________________
Universal Studios, Inc.
Is _________________________________
Executive Vice President
Corporate Operations
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