INTERNATIONAL MULTIPLE RIGHTS
DISTRIBUTION AGREEMENT
This International Multiple Rights Distribution Agreement is made as of
January 19, 1999 between ALPINE PICTURES INTERNATIONAL, INC., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Tel: (▇▇▇) ▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ("Licensor") and
_______________________________, ▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ Tel:
▇▇ ▇▇ ▇▇ ▇▇ ▇▇ Fax: ▇▇▇ ▇▇ ▇ ▇▇ ▇▇ ▇▇ 40 Contact(s): ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("Distributor") relating to the motion picture entitled
"_______________________".
For reference purposes this Agreement is identified as follows:
Reference Code: ___________________________
This Agreement is a new long form agreement that replaces the deal memo
between Licensor and Distributor regarding the Picture.
Subject to the terms this agreement, Licensor licenses exclusively to
Distributor, and Distributor accepts from Licensor, the Licensed Rights in the
Picture throughout the Territory for the Term in the Authorized Languages
subject to the Holdbacks as identified below on all the terms and conditions of
this Agreement.
This Agreement consists of the following parts: this Cover Page; Table
of Contents; Deal Terms; Standard Terms and Schedule of Definitions. All parts
of this Agreement will be interpreted together to form one Agreement. If not
defined where they first appear, words used in this Agreement are defined in the
Standard Terms or in the Schedule of Definitions or, if not otherwise defined in
this Agreement, in accordance with industry custom and practice.
IN WITNESS WHEREOF, Licensor and Distributor have executed this
Agreement as of the date first written above to constitute a binding contract
between them.
ALPINE PICTURES INT'L, INC.
____________________________________
("Licensor") ("Distributor")
By:____________________________ By:_____________________________
▇▇▇ ▇▇▇▇▇▇▇▇
Its:____________________________ Its:______________________________
Senior Vice President
TABLE OF CONTENTS
Section Paragraph
Deal Terms
Basic License Terms I
Licensed Rights II
Financial Terms III
Delivery Terms IV
Additional Terms V
Standard Terms and Conditions
Definitions and Usage
Picture and Version
Licensed Rights And Reserved Rights
Allied Rights
Territory and Region
Agreement Term and License Period
Gross Receipts
Recoupable Distribution Costs
Payment Requirements
Accountings
Delivery and Returns
General Exploitation Obligations
Theatrical Exploitation Obligations
Video Exploitation Obligations
Televisions Exploitation Obligations
Music
Suspension and Withdrawal
Default and Termination
Anti-Piracy Provisions
Licensor's Warranties
Distributor's Warranties
Indemnities
Assignment and Sublicensing
Miscellaneous Provisions
Schedule Of Licensing Definitions
Cinematic Rights Definitions A
Video Rights Definitions B
Ancillary Rights Definitions C
Pay TV Rights Definitions D
Free TV Rights Definitions E
Other Rights Definitions F
Additional Definitions G
MULTIPLE RIGHTS DISTRIBUTION AGREEMENT
I. BASIC LICENSE TERMS
A. Picture: "__________________" Key Element(s):
Allocation(s):
B. Territory: ____________________________________
C. Agreement Term and License Period: Starting on the date of
this Agreement and ending Fifteen (15) years from Initial
Delivery of the Picture.
D. Authorized Language(s): ________________(dubbing & subtitles)
[Original Language Version (English)]
II. LICENSED RIGHTS TERMS
A Right is licensed to Distributor only if expressly so designated. Any
Right not specifically designated is a Reserved Right of Licensor.
A. Cinematic Rights:
1. Theatrical;
2. Non-Theatrical; &
3. Public Video.
B. Video Rights:
1. Home Rental Video;
2. Home SellThru Video; &
3. Commercial Video.
C. Ancillary Rights:
1. Airlines;
2. Hotels; &
3. Ships (flying the flag of the Territory only and
without bookings in the United States).
D. Television Rights:
1. Pay TV Rights:
a. Terrestrial;
b. Cable; &
c. Satellite.
2. Free TV
a. Terrestrial;
b. Cable; &
c. Satellite.
E. PayPerView Rights
1. Residential;
2. Non-Residential; &
3. Demand View.
Satellite Transmission Restriction: If delivery is to be made by
Satellite, transmission must be encoded and/or encrypted to prevent and
restrict substantial reception in countries outside of the licensed
Territory.
F. Video Format/Type:
Beta/PAL
G. Holdbacks:
NONE.
III. FINANCIAL TERMS
A. Guarantee:
1. Amount: One Hundred Twenty Five Thousand U.S. Dollars
(US $___________), payable as follows:
a. _______% (US $_________) of the allocated
amount for the Picture upon execution of the
long form Agreement (Licensor hereby agrees
that if Licensor is unable to deliver the
finished Motion Picture in a reasonable
period of time, Licensor will refund
Distributor's ____________% deposit); and
b. ________% (US $__________) of the allocated
amount for the Picture upon Licensor's
Notice of Initial Delivery in connection
with the Picture.
The Guarantee is a gross sum and no taxes or other
charges of any kind may be deducted from it.
Distributor must take Delivery within one month of
receipt of Licensor's First Notice that Licensor can
Deliver the Initial Materials.
2. Allocation: The entire Guarantee shall be deemed
allocated to all above Rights.
a. Cross Collateralization Allowed: The
applicable portion of the Guarantee will
first be recouped from the Licensed Rights
to which it has been allocated. Any
"Shortfall" from Distributor's share of
gross receipts with respect to one Licensed
Right shall be defined and recouped only to
the extent allowed in Paragraph III(D).
B. Payment Requirements:
Timely payment of the minimum Guarantee due Licensor is the
essence of this Agreement. Distributor will make payments of
the installments of the Guarantee indicated in Paragraph
III.A.1 and all overages and other payments due Licensor by
telegraphic or other wire transfer of unencumbered and
unconditional funds, free of any transmission charges to the
following accounts:
Bank: CITY NATIONAL BANK
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone #: (▇▇▇) ▇▇▇-▇▇▇▇
Swift Code: ▇▇▇▇▇▇▇▇,
ABA Number: 122-016066
Account Name: Alpine Pictures International, Inc.
Account #: 024766632
C. Disposition of Receipts:
Distributor shall make the following continuing payments and
recoupments; in the following order of priority from the Gross
Receipts derived from each of the following designated
Licensed Rights:
1. THEATRICAL/NON-THEATRICAL PUBLIC VIDEO:
a. Until Full Recoupment of Recoupable
Distribution Costs: Off The Top 100% of all
Gross Receipts to Distributor, to be divided
Percent ( %) as a fee and _____________
(65%) towards recoupment of minimum
guarantee and prints and advertising.
b. Sharing after Full Recoupment of
Distribution Costs:
___________________ Percent (_________%) of
remaining Gross Receipts to Licensor.
___________________ Percent (_________%) of
remaining Gross Receipts to Distributor.
2. HOME VIDEO/COMMEERCIAL VIDEO:
Recoupment of Recoupable Distribution Cost from
Distributor's share Off the Top, then Twenty Five
Percent (25%) of all Video Gross Receipts to Alpine
Pictures International, and Seventy Five Percent
(75%) of all Video Gross Receipts to Distributor.
3. PAY TELEVISION/FREE TELEVISION:
Flat/No royalty
4. ANCILLARY (AIRLINES, SHIPS, HOTELS): N/A
Flat/No royalty
D. Cross-Collateralization:
1. "Shortfall" Defined: For purposes of this Agreement
only, the "Shortfall" shall be the amount by which
the Recoupable Distribution Costs with respect to a
Licensed Right exceed Licensor's Share of the Gross
Receipts with respect to such Licensed Right
remaining after all authorized recoupments have been
made with respect to such Licensed Rights."
2. Allowed Cross-Collateralization: All Rights crossed.
A Shortfall with respect to any Licensed Right may
only be recouped from Licensor's Share of Gross
Receipts with other Licensed Rights within the same
Picture. Cross-collateralization with another Motion
Picture is specifically excluded. If this is
insufficient to recoup any Shortfall the unrecouped
Shortfall must be borne by Distributor.
IV. DELIVERY TERMS
A. Date for Notice of Initial Delivery:
Licensor will give Distributor a Notice of Initial Delivery
promptly after the Picture is ready for Delivery.
B. Method of Delivery:
By Physical Delivery, Laboratory Access, Loan of Materials,
Satellite Delivery, or otherwise as Distributor may designate
for each item. Licensor will make available to Distributor all
Customary Materials required for release in the Theatrical,
Television, Video and Ancillary markets.
C. Material Payment Instructions:
Distributor shall pay for all Materials and Shipping. Payment
of any Material ordered by Distributor (except those Materials
to be delivered on loan pursuant to Paragraph IV.B above) must
be received together with Distributor's order. Licensor will
not order Material from Vendors unless payment is first
received. All Materials to be of commercially accepted
quality. The cost of all delivery Materials shall fall within
industry standards.
D. Materials Shipping Instructions: To be issued in writing by
Distributor.
V. ADDITIONAL TERMS
A. Jurisdiction/Governing Law:
This Agreement shall be governed by and construed in
accordance with the laws of the State of California and the
jurisdiction shall be vested in the competent courts in Los
Angeles, California
AFMA(R) INTERNATIONAL
MULTIPLE RIGHTS DISTRIBUTION AGREEMENT
STANDARD TERMS AND CONDITIONS
1 DEFINITIONS AND USAGE
1.1 Definitions: Words and phrases which appear with initial letters
capitalized are Defined Terms. If not defined where they first appear Defined
Terms are defined either in the attached Schedule of Definitions or in
accordance with industry custom and practice.
1.2 Usage: The use of any Defined Term or inclusion of any provision in
this Agreement relating to rights not specifically licensed to Distributor in
the Deal Terms does not grant to Distributor explicitly or by implication any
rights not specifically licensed in the Deal Terms.
2. PICTURE AND VERSION
2.1 Picture: The Picture is the Motion Picture identified at least by
its title in the Deal Terms which is currently completed or which Licensor
currently intends to produce. Licensor reserves the right to change the title of
the Picture.
2.2 Key Element: A Key Element if specified in the Deal Terms is a
Person who must render services or materials on the Picture in a certain
capacity as indicated in the Deal Terms. A Person will be deemed to have
rendered the required services or materials if the Person receives credit for so
doing in the main or end titles of the Picture. Where a director is a Material
Element, this requirement will be satisfied if the director renders directing
services through the end of Principal Photography. If any Key Element is unable
fully to render services or materials on the Picture due to default, disability
or death Licensor will have the right to substitute another Person in such
capacity who is acceptable to the U.S. distributor scheduled first to release
the Picture, and Distributor will not have the right to refuse to accept
Delivery of the Picture or reduce the Guarantee because of such substitution.
2.3 Version: The Picture is only licensed in a linear form for
continuous viewing from beginning to end. Licensor reserves all rights in all
formats and Versions of the Picture other than its original linear form as
Delivered to Distributor and authorized dubbed, subtitled or edited Versions of
such original linear form made by Distributor for exploitation of its Licensed
Rights as may be authorized under this Agreement. If during the Agreement Term
Licensor elects to exploit another Version of the Picture in the Territory that
incorporates a substantial portion of the linear form of the Picture licensed to
Distributor, then Licensor will accord Distributor a right of First Negotiation
to acquire any affected Licensed Rights in such new Version for the remainder of
their License Period. If Distributor does not acquire the affected Licensed
Rights in such new Version, then Licensor will be free to exploit such new
Version in the Territory beginning six (6) months after the end of the Holdback
for the affected Licensed Rights.
3. LICENSED RIGHTS AND RESERVED RIGHTS
3.1 License: Subject to the terms of this Agreement, Licensor
exclusively licenses to Distributor the Licensed Rights in the Picture for the
License Period throughout the Territory in the Authorized Language(s) as set
forth in the Deal Terms. Distributor may only exploit the Licensed Rights: (i)
in the Authorized Language(s) in a dubbed or subtitled version as specified in
the Deal Terms; (ii) by means of the authorized Video Type(s) and Format(s)
specified in the Deal Terms; (iii) for no more than the Run(s) or Playdate(s)
authorized in the Deal Terms.
3.2 Vesting: Each Licensed Right will only vest in Distributor after:
(i) Distributor accepts Initial Delivery of the Picture; and (ii) if the Deal
Terms contain a Guarantee, Distributor pays Licensor when due the portion of the
Guarantee allocated to such Licensed Right in the Deal Terms, or, if there is no
allocation, the entire Guarantee.
3.3 Reservation: All rights not expressly licensed to Distributor are
Reserved Rights. Licensor reserves all Reserved Rights designated in the Deal
Terms and all other rights not expressly licensed to Distributor. Licensor may
exploit the Reserved Rights without restriction except as otherwise expressly
provided in this Agreement.
3.4 Reversion: Each Licensed Right will immediately revert to Licensor
free of any claim by Distributor or any Person deriving any interest from
Distributor on the earlier of the end of the License Period for such Licensed
Right or the expiry of the Agreement Term under Paragraph 6.1.
4. ALLIED RIGHTS
4.1 Credit and Advertising: Distributor will comply with all required
screen credits (if not already contained in the Picture), paid advertising,
publicity and promotional requirements, name & likeness restrictions, and
Videogram packaging credit requirements (if needed) supplied by Licensor at all
times after their receipt. Upon Licensor's request Distributor will promptly
submit to Licensor all advertising materials used by Distributor so that
Licensor can determine whether its requirements are being met.
4.2 Dubbing, Subtitling and Editing: Distributor will comply with all
dubbing, subtitling or editing requirements applicable to the Picture or its
trailers supplied by Licensor in creating any authorized dubbed, subtitled or
edited version of the Picture or its trailers. Except as expressly provided in
this Agreement, each Picture and its trailers must be exhibited at all times in
their original continuity, without alteration, interpolation, cut or
elimination.
4.3 Exercise of Allied Rights: Subject to Licensor's requirements under
Paragraphs 4.1 & 4.2 and the provisions of this Agreement, Distributor will have
the nonexclusive right at its sole expense:
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4.3.1 To advertise, publicize, and promote the Picture;
4.3.2 To include in all such advertising, promotion or
publicity the name, voice and likeness of any Person rendering materials or
services on the Picture but not as an endorsement for any product or service
other than the Picture;
4.3.3 To include before the beginning or after the end of the
Picture the credit or logo of Distributor;
4.3.4 To change the title of the Picture but only after first
obtaining Notice of Licensor's approval of the change;
4.3.5 To dub the Picture but only in the Authorized
Language(s);
4.3.6 To subtitle the Picture but only in the Authorized
Language(s);
4.3.7 To edit the Picture but only for censorship purposes in
accordance with a Censorship Rider if attached;
4.3.8 To include commercial announcements in the Picture as
provided in Paragraph 15.5.
4.4 Limitations: In exercising the Allied Rights, Distributor may not:
(i) alter or delete any credit, logo, copyright notice or trademark notice
appearing on the Picture; or (ii) include any advertisements or other material
before, during or after the Picture other than the credit or logo of
Distributor, an approved anti-piracy warning, or commercials as authorized in
Paragraph 15.5 of this Agreement.
5. TERRITORY AND REGION
5.1 Territory: The Territory means the countries or territories listed
in the Deal Terms as their political borders exist on the date of this
Agreement. The Territory excludes foreign countries' embassies, military and
governmental installations, oil rigs and marine installations,
airlines-in-flight and ships-at-sea located within the Territory.
5.1.1 In exploiting the Theatrical, Public Video, Home Video,
Hotel, Pay TV or Free TV Rights, the Territory also excludes the countries'
non-contiguous territories and possessions as well as military and governmental
installations, oil rigs and other marine installations, and embassies located
within the Territory but flying the flag of any country outside the Territory;
and
5.1.2 In exploiting the Non-Theatrical, Commercial Video,
Airline or Ship Rights, the Territory includes the countries' military and
governmental installations, oil rigs and marine installations and embassies
wherever located, but only to the extent that they may be exploited in
accordance with such Rights.
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5.2 Changes In Borders: If during the Agreement Term an area separates
from a county in the Territory then the Territory will nonetheless include each
separating area which formed one political entity as of the date of this
Agreement. If during the Term an area is annexed by a country in the Territory
then Distributor will promptly give Licensor Notice whether Distributor desires
to exploit any Licensed Right in such new area. Licensor will then accord
Distributor a right of First Negotiation Right to acquire such Licensed Right in
the area for the remainder of its License Period subject to rights previously
granted to other Persons in such area.
5.3 Region: The Region is the part of the world in which the Territory
is located. The Region is defined in either in the Deal Terms or if not there
defined in the AFMA Standard Definitions of Territories and Regions current as
of the date of this Agreement.
5.4 Changes In Licensed Station: The "Licensed Station" means the
terrestrial broadcaster, satellite broadcaster, cable system, pay television
service or other transmitting service designated in the Deal Terms. Distributor
may only telecast or authorize telecast of the Picture over the originating
transmitting facilities of the Licensed Station existing on the date of this
Agreement. If there is a material change in the number or kind of household
television receivers capable of receiving the telecast from such transmitter
(e.g., a change in signal amplitude or frequency, a material increase in the
number of subscribers, use of a new satellite or transponder, change in a
satellite's orbital position, or addition of new transmission channels), then
Distributor will promptly give Licensor Notice of such change. Licensor then
grants Distributor a right of First Negotiation regarding exploitation of any
affected Licensed Rights in the Picture over such new facilities, taking into
account rights previously granted to other Persons which might be affected by
such change and an adjustment in the Minimum Guarantee in consideration of such
change. If no agreement is reached within the First Negotiation period then
Distributor may not exploit any Licensed Rights in the Picture over the new
facilities and Licensor may withdraw the Picture under Paragraph 17.
6. AGREEMENT TERM AND LICENSE PERIOD
6.1 Agreement Term: The Agreement Term starts and ends on the dates set
forth in the Deal Terms except in case of extension per Paragraph or early
termination per Paragraphs 17.2, 18.2 or 18.4.
6.2 License Period: The License Period is the time period in the Deal
Terms during which Distributor may exploit each Licensed Right, except that the
License Period for any Pay TV Licensed Rights or Free TV Licensed Rights end
after the last authorized Runs or Playdate as set forth in Paragraph 15.1.3, and
provided Distributor may not exploit or authorize exploitation of any Licensed
Right after the earlier of the expiry of its License Period or end of the
Agreement Term per Paragraph 6.1.
6.3 Distributor Holdbacks: Where the Deal Terms indicate a Holdback on
any Licensed Right, Distributor may not exploit or authorize exploitation of
that Licensed Right until the end of its Holdback. However, during its License
Period Distributor may enter into agreements to exploit a Licensed Right after
the end of its Holdback.
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6.4 Licensor Holdbacks: Where the Deal Terms indicate a Holdback on any
of Reserved Right, Licensor may not exploit or authorize exploitation in the
Territory of that Reserved Right until the end of its Holdback. However,
Licensor may enter into agreements at any time to exploit a Reserved Right after
the end of its Holdback.
6.5 Theatrical Release: Theatrical Release means the earlier of: (i)
the date on which the Picture is first exhibited in theaters, including
mini-theaters and MTV theaters, within the Territory to the paying public,
including screenings to qualify for awards presentations by authority of
Distributor; or (ii) the date if specified in the Deal Terms on which
Distributor must cause the Theatrical Release of the Picture in the Territory;
or (iii) six (6) months after Notice of Initial Delivery.
6.6 Video Release: Video Release means the earlier of: (i) the date on
which Videograms embodying the Picture are first sold or rented to the paying
public in the Territory for Home Video use by authority of Distributor; or (ii)
the date on which Videograms embodying the Picture are first exhibited in places
of public performance in the Territory for Commercial Video use by authority of
Distributor; or (iii) the date if specified in the Deal Terms on which
Distributor must cause the Video Release of the Picture in the Territory; or
(iv) one (1) month after the end of the earliest Video Holdback; or (v) if there
is no Theatrical Release of the Picture in the Territory, six (6) months after
Notice of Initial Delivery.
6.7 Holdback Coordination: The Parties acknowledge that due to
technological innovation or a Law in the Region it is possible that exploitation
of a Licensed Right within the Territory can affect exploitation throughout the
Region. Distributor therefore agrees that Licensee may shorten by up to three
(3) months or extend by up to three (3) months any Holdback to coordinate the
exploitation of the Picture within the Region. For example, Licensor may shorten
or extend the Pay TV Holdback up to three (3) months in order to coordinate the
Pay TV release of the Picture throughout the Region. Licensor will give
Distributor prompt Notice of any adjusted Holdback period no later than the
earlier of two (2) months before the end of the new Holdback period or the end
of the Holdback period set forth in the Deal Terms. Licensor will use all
reasonable good faith efforts to coordinate release patterns throughout the
Region so that exploitation of the Picture in a particular medium outside the
Territory will not unduly impact on its exploitation within the Territory and
exploitation of the Picture in a particular medium within the Territory will not
unduly impact its exploitation outside the Territory, provided that Licensor's
goal will be to maximize its revenues and reduce its expenses within the entire
Region and in case of any disagreement Licensor's decision will control.
6.8 Broadcast Overspill: Licensor does not warrant that it has granted
or can grant exclusivity protection against reception in the Territory of a
broadcast of the Picture originating outside the Territory. Licensor only agrees
that during the License Period for any Pay TV or Free TV Licensed Right it will
not broadcast or authorize a broadcast of the Picture in any Authorized Language
which broadcast originates in the Region outside the Territory and is intended
for primary reception within the Territory except this provision will not apply
to broadcasts in the original unsubtitled English language even if English is an
Authorized Language. This paragraph applies specifically, but without
limitation, in cases where the Region includes any country in the European Union
or European Economic Area.
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6.9 Parallel Imports: Licensor does not warrant that it has granted or
can grant exclusivity protection against sale or rental in the Territory of
Videograms embodying the Picture imported from outside the Territory. Licensor
only agrees that during the License Period for any Video Licensed Right it will
not sell or authorize sale in any Authorized Language of Videograms embodying
the Picture that are sold in the Region outside the Territory and intended for
primary consumer sale or rental within the Territory except this provision will
not apply to sales of original unsubtitled English language Videograms even if
English is an Authorized Language. This paragraph applies specifically, but
without limitation, in cases where the Region includes any country in the
European Union or European Economic Area.
7. GROSS RECEIPTS
7.1 Gross Receipts - Defined: "Gross Receipts" means the sum on a
continuous basis of the following amounts derived with respect to each and every
Licensed Right:
7.1.1 All monies or other consideration of any kind (including
all amounts from advances, guarantees, security deposits, awards, subsidies, and
other allowances) received by, used by or credited to Distributor or any
Distributor Affiliates or any approved subdistributors, or agents from the
license, sale, lease, rental, lending, barter, distribution, diffusion,
exhibition, performance, exercise or other exploitation of each Licensed Right
in the Picture, all without any deductions; and
7.1.2 All monies or other consideration of any kind received
by, used by or credited to Distributor or any Distributor Affiliates or any
approved subdistributors or agents as recoveries for the infringement of any
Licensed Right in the Picture; and
7.1.3 All monies or other consideration of any kind received
by, used by or credited to Distributor or any Distributor Affiliates or any
approved subdistributors or agents from any authorized dealing in trailers,
posters, copies, stills, excerpts, advertising accessories or other materials
used in connection with the exploitation of any Licensed Right in the Picture or
contained on Videograms embodying the Picture.
7.2 Gross Receipts Calculated at Source: No Distributor Affiliates or
any subdistributors or agents may deduct any fee from Gross Receipts in
calculating all amounts due Licensor. For the purpose of determining Licensor's
share of Gross Receipts, all Gross Receipts must be calculated at "source". This
means that Gross Receipts derived from the exploitation of any the following
Licensed Rights must be calculated at the following levels: (i) for any
Theatrical Licensed Right, at the level at which payments are remitted by
theaters; (ii) for any NonTheatrical or Ancillary Licensed Right, at the level
at which payments are remitted by airlines, shipping companies, hotels or other
entities that exhibit or make the Picture available directly to their patrons or
customers; (iii) for any Home Video Licensed Right, at Wholesale Level or Direct
Consumer Level as applicable; (iv) for any Commercial Video or Public Video
Licensed Right at the level at which payments are remitted by local exhibitors
of the Picture; and (vi) for any Television Licensed Right, at the level at
which payments are remitted by terrestrial stations, cable systems, satellite
telecasters or telephone systems that broadcast, cablecast or transmit the
Picture.
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7.3 Wholesale Level: The Wholesale Level means the level of Videogram
distribution from which Videograms are shipped directly to retailers for
ultimate sale or rental to the paying public. The Wholesale Level may include
intermediate distribution levels between the manufacturer and the retailer, such
as rack jobbers and the like, if such distribution is performed by a Distributor
Affiliate, or if Distributor participates in the profits from such intermediate
distribution, but then only to the extent of such participation.
7.4 Direct Consumer Level: The Direct Consumer Level means the level of
Videogram distribution at which Videograms are sold or rented directly to the
paying public. The "Direct Consumer Level" includes the sale or rental of
Videograms by means of retail outlets, mail order, video clubs, and similar
methods. Where Commercial Video or Public Video rights are licensed, the Direct
Consumer Level also includes the authorized public performance, exhibition, or
diffusion of Videograms in accordance with the such Licensed Right. Distributor
will not be deemed to be engaged in distribution at the Direct Consumer Level
unless such distribution is performed by a Distributor Affiliate, or unless
Distributor participates in the profits from such distribution, and then only to
the extent of such participation.
7.5 Royalty Income: All amounts collected by any collecting society,
authors' rights organization, performing rights society or governmental agency
that are payable to authors, producers, performers or other Persons and that
arise from royalties, compulsory licenses, cable retransmission income, music
performance royalties, tax rebates, exhibition surcharges, levies on blank
Videograms or hardware, rental or lending royalties, or the like, will as
between Licensor and Distributor be the sole property of Licensor and will not
be included in or credited to any Gross Receipts. Licensor has the sole right to
apply for and collect all these amounts. If any of them are paid to Distributor
then Distributor will immediately remit them to Licensor with an appropriate
statement identifying the payment.
7.6 Rebates and Subsidies: The following amounts, if received by used
by or credited to Distributor, any Distributor Affiliate or any approved
subdistributor or agent, will not be included in Gross Receipts but will be used
to reduce Recoupable Distribution Costs: (i) print, publicity and similar
subsidies for the cost of releasing, advertising or publicizing the Picture;
(ii) income from publicity tie-ins; or (iii) freight, print, trailer,
advertising and other cost recoveries, rebates, refunds or discounts from
exhibitors, approved subdistributors or other Persons.
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8. RECOUPABLE DISTRIBUTION COSTS
8.1 Recoupable Distribution Costs - Defined: "Recoupable Distribution
Costs" mean all direct, auditable, out-of-pocket, reasonable and necessary
costs, exclusive of salaries and overhead, and less any discounts, credits,
rebates or similar allowances, actually paid by Distributor for exploiting each
Licensed Right in arms-length transactions with third parties, all of which will
be advanced by Distributor and recouped under this Agreement, for:
8.1.1 Customs duties, import taxes and permit charges
necessary to secure entry of the Picture into the Territory;
8.1.2 Notarization, translation, registration and similar
costs relating to obtaining or securing copyright registration, title
registration, import clearances or similar activities for the importation,
exploitation or protection of the Picture in the Territory but only to the
extent reasonably pre-approved by Licensor and if Licensor advances any such
fees or costs Distributor will promptly reimburse Licensor for them on demand;
8.1.3 Sales, use, VAT, admission and turnover taxes and
related charges assessable against any Gross Receipts realized from the
exploitation of the Licensed Right but not including corporate income, franchise
or windfall profits taxes or remittance or withholding taxes assessable against
amounts payable to Licensor;
8.1.4 Remittance and withholding taxes on amounts payable to
Licensor but only to the extent allowed by Paragraph 9.5;
8.1.5 Shipping and insurance charges for Delivery of the
Materials to Distributor but not including any amounts for shipping within the
Territory or for returning the Materials to Licensor;
8.1.6 Manufacture of internegatives, ▇▇▇▇, pre-print
materials, positive prints, masters, tapes, trailers and other copies of the
Picture in an amount reasonably preapproved by Licensor;
8.1.7 Costs of subtitling or dubbing, if authorized in the
Deal Terms but only in the Authorized Language(s);
8.1.8 Costs of allowed advertising, promotion and publicity in
the amount reasonably pre-approved by Licensor;
8.1.9 Legal costs and charges paid to obtain recoveries for
infringement by a Third Party of the Licensed Right but only to the extent
reasonably pre-approved by Licensor;
8.1.10 Actual and normal expenses incurred in recovering debts
from defaulting licensees;
8.1.11 Costs of packaging for Videograms embodying the Picture
but only to the extent reasonably pre-approved by Licensor; and
8.1.12 Censorship fees and costs of editing to meet censorship
requirements as allowed pursuant to a Censorship Rider, if attached.
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8.2 Limitations: Any cost that does not qualify as a Recoupable
Distribution Cost under Paragraph 8.1 will be Distributor's sole responsibility
unless Licensor gives prior Notice approving its recoupment. No cost item
qualifying as a Recoupable Distribution Cost may be deducted more than once.
Recoupable Distribution Costs must be calculated separately for each Licensed
Right. Recoupable Distribution Costs for one Licensed Right may not be recouped
from Gross Receipts for any other Licensed Right except as authorized in the
Deal Terms.
8.3 Third Party Costs: If a Distributor Affiliate or approved
subdistributor or agent pays a cost that would be a Recoupable Distribution Cost
if paid by Distributor then such cost may be recouped as a Recoupable
Distribution Cost. Otherwise no costs of any Third Party may be recouped from
any monies due Licensor.
9. PAYMENT REQUIREMENTS
9.1 Timely Payment: Distributor will make payments to Licensor and
retain recoupments from Gross Receipts only in the manner and sequence specified
in the Deal Terms. Timely payment is of the essence of this Agreement. Payment
will only be considered made when Licensor has immediate and unencumbered use of
funds in the required currency in the full amount due. Distributor will use
diligent efforts to obtain promptly all permits necessary to make all payments
to Licensor.
9.2 Guarantee: The Guarantee is the amount payable to Licensor against
Licensor's share of Gross Receipts as indicated in the Deal Terms. The Guarantee
is nonreturnable but recoupable in conformity with this Agreement. The Guarantee
is a minimum net sum and no taxes or charges of any sort may be deducted from
it. The Guarantee may also be called the "Minimum Guarantee".
9.3 Guarantee Installments: Distributor will pay each installment of
the Guarantee to Licensor in the time and manner specified in the Deal Terms.
Where any installment is payable on events within Licensor's control, e.g. the
start or end of Principal Photography, Licensor will give Distributor timely
Notice of such event. Where any installment is payable on events within
Distributor's control, e.g. Theatrical Release or Video Release, Distributor
will give Licensor timely Notice of such event along with all payments then due
Licensor.
9.4 Letter of Credit: If the Deal Terms indicate that a payment is to
be secured by a Letter of Credit, then Distributor will open the Letter of
Credit at a bank in the Territory designated by Licensor as a corresponding bank
of Licensor's bank. While open the Letter of Credit will remain valid,
negotiable, transferable, confirmed and irrevocable; it will be automatically
renewable for any period specified in the Deal Terms if Licensor has not fully
negotiated the Letter of Credit by its first expiry date. All costs for a Letter
of Credit will be home solely by Distributor.
9.5 Limitation On Deductions: There will be no deductions from any
payments due Licensor because of any bank charges, conversion costs, sales use
or VAT taxes, "kontingents", quotas or any other taxes levies or charges unless
separately agreed in writing by Licensor. No remittance or withholding taxes may
be deducted from the Guarantee, but any such taxes paid by Distributor may be
recouped as a Recoupable Distribution Cost after Distributor provides Licensor
with appropriate documentation. If Distributor is required to pay any remittance
or withholding tax on amounts due Licensor other than the Guarantee, then
Distributor will provide Licensor with all documentation indicating
Distributor's payment of the required amount on Licensor's behalf before
deducting Distributor's payment from any sums due Licensor.
9
9.6 Blocked Funds: If any Law prohibits remittance of any amounts to
Licensor then Distributor will immediately give Licensor Notice of such Law.
Distributor will then deposit such amounts in Licensor's name for Licensor's
unencumbered use in a suitable depository designated by Licensor without any
deductions for so doing.
9.7 Finance Charge On Late Payments: Any payment not made by its due
date will, in addition to any other right or remedy of Licensor, incur a finance
charge at the lesser of three hundred basis points over the 3-month LIBOR rate
("LIBOR+Y) on the date payment was due or the highest applicable legal contract
rate. This finance charge will accrue from the date the payment was due until it
is paid in full.
9.8 Exchange Provisions, Payment: All payments will be in United States
dollars or other freely remittable currency designated by Licensor. All payments
will be computed at the prevailing exchange rate on the date due at a bank
timely designated by Licensor. For a late payment Licensor will be entitled to
the most favorable exchange rate between the due date and the payment date. The
parties agree that the risk of devaluation of the United States dollar or other
currency designated by Licensor against the currency of the Territory will be
Licensor's sole risk; the risk of the devaluation of the currency of the
Territory against the United States dollar or other currency designated by
Licensor will be Distributor's sole risk.
9.9 Exchange Provisions, Recoupment: Distributor will calculate and
recoup the Guarantee and all Recoupable Distribution Costs only in the currency
of the major country in Territory. Any payments not made in such currency will
be converted to such currency for recoupment purposes using the exchange rate on
the date the Guarantee was received by Licensor or the Recoupable Distribution
Cost was paid.
9.10 Documentation: If any Law requires Distributor to obtain a permit
or clearance to exploit any Licensed Right, then Distributor will use diligent
efforts to do so promptly at its expense. Distributor will provide Licensor with
copies of all documents indicating compliance with such Law. By way of
illustration such Law may require obtaining certificates of local dubbing or
copyright registration, acquiring quota permits or censorship clearances, filing
author certificates, certificates of origin or music cue sheets with appropriate
authorities, or obtaining permits or clearances for payment of any remittance
taxes or other charges. Distributor will not undertake any such action before
the entire Guarantee is paid without first receiving Notice of Licensor's
approval to so.
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10. ACCOUNTINGS
10.1 Limits On Cross-Collateralization: No payment for the Picture will
be cross-collateralized with or set-off against any amounts for any other Motion
Picture licensed to Distributor, whether in this Agreement or otherwise. Amounts
due for the Picture may not be used to recoup amounts unrecouped for any other
Motion Picture, or vice versa. Gross Receipts and Recoupable Distribution Costs
may only be cross-collateralized among the Licensed Rights to the extent, if
any, authorized in the Deal Terms.
10.2 Limits On Allocations: If the Picture is exploited with other
Motion Pictures then Distributor will only allocate receipts and expenses among
the Picture and the other Motion Pictures in the manner approved by Licensor in
its sole discretion in advance.
10.3 Financial Records: Distributor will maintain complete and accurate
records in the currency of the Territory of all financial transactions regarding
the Picture in accordance with generally accepted accounting principles in the
entertainment distribution business on a consistent, uniform and
non-discriminatory basis throughout the Agreement Term and during any period
while a dispute about payments remains unresolved. The records will include all
Gross Receipts derived, all Recoupable Distribution Costs paid, all allowed
adjustments or rebates made, and all cash collected or credits received. If any
Video Rights are licensed the records will also include all Videograms
manufactured, sold, rented, leased, returned, erased, recycled or destroyed.
Unless Licensor gives Notice approving otherwise all records will be maintained
on a cash basis, and if Distributor permits any off-set, refund or rebate of
sums due Distributor such sums will nonetheless be included in Gross Receipts.
Distributor will also keep complete and accurate copies of every statement,
contract, voucher, receipt, computer record, audit report, correspondence and
other writing from all Persons pertaining to the Picture.
10.4 Statements - Contents: In addition to any other reporting
requirements in this Agreement, starting after Delivery of the Initial Materials
Distributor will furnish Licensor with a statement in English (and, if
requested, supporting documentation) for the Picture that identifies from the
time of the immediately prior statement, if any, all Gross Receipts derived, all
Recoupable Distribution Costs paid identifying to whom, and all exchange rates
used. If any Video Rights are licensed the statements will also include: (i) all
Videograms manufactured, sold, rented, leased, returned, erased, recycled or
destroyed; (ii) the wholesale and retail selling prices of all Videograms; and
(iii) all allowable deductions taken. If the Territory contains more than one
country, the information will be reported separately for each country and
consolidated for the entire Territory. The information will be provided in
reasonable detail on a current and cumulative basis. Each statement must be
accompanied by payment of all monies then due Licensor. Distributor may not
withhold any Gross Receipts as a reserve against returned or defective
Videograms for more than two (2) consecutive accounting periods and the amount
withheld may not exceed ten percent (10%) of Video Gross Receipts derived for
the two (2) accounting periods for which the reserve is retained.
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10.5 Statements - When Rendered: Distributor will render statements for
the following periods: (i) each of the twelve (12) months after the Theatrical
Release, or, if there is none, the Video Release; (ii) each calendar quarter or
other quarterly periods designated by Licensor through the end of the Agreement
Term and as long thereafter as Gross Receipts are derived by Distributor; and
(iii) one (1) month after the Video Release, the first Pay TV telecast of the
Picture in the Territory and the first Free TV telecast of the Picture in the
Territory. Each statement must be delivered to Licensor within one (1) month
after the end of the period for which it is rendered. Each statement must be
accompanied by payment of all monies then due Licensor.
10.6 Audit Rights: Continuing until three (3) years after the Agreement
Term Licensor on ten (10) days' prior Notice may examine and copy, on its own or
through its auditors, Distributor's financial records regarding the Picture. The
examination will be at Licensor's expense unless it uncovers an uncontested
underpayment of more than five percent (5%) of the amount shown due Licensor on
the statements audited, in which case Distributor will pay the costs of the
examination on demand.
11. DELIVERY AND RETURN
11.1 Terminology: "Delivery" of a Picture means delivery to Distributor
of the Initial Materials, and, at a later time if and when mutually agreed, the
Additional Materials, as provided in the Deal Terms and this Paragraph. "Initial
Delivery" means delivery of the "Initial Materials" and "Additional Delivery"
means delivery of the "Additional Materials." The "Delivery Materials" consist
of the Initial Materials or Additional Materials as the context requires.
11.2 Initial Delivery: Licensor will give Distributor a "Notice of
Initial Delivery" that it is prepared to deliver the Initial Materials by the
date specified in the Deal Terms, or, if none is specified, promptly after the
Picture is ready for Initial Delivery. Upon receipt of such Notice:
11.2.1 If the Initial Materials are identified in the Deal
Terms, the Distributor will immediately pay for such Initial Materials and their
cost of shipment. Payment and shipment will be made as specified in the Deal
Terms or, if not there specified, as in Licensor's Notice of Initial Delivery.
Licensor will then ship all Initial Materials to Distributor as specified in the
Deal Terms or Licensor's Notice of Initial Delivery.
11.2.2 If the available Initial Materials are specified in
Licensor's Notice of Initial Delivery, then within ten (10) days of receipt of
this Notice Distributor will give Notice to Licensor stating the number of
pre-print items, prints, trailers, advertising and promotional accessories,
support items and other Initial Materials relating to the Picture that
Distributor reasonably requires, all of which will be subject to Licensor's
reasonable approval. Licensor will then give Distributor Notice of the cost of
the approved Initial Materials and their shipment to Distributor. Distributor
will immediately pay for such Initial Materials as specified in the Deal Terms
or Licensor's Notice. Licensor will then deliver such Initial Materials to
Distributor as specified in the Deal Terms or Licensor's Notice.
11.2.3 In all cases Distributor must take delivery of all
approved Initial Materials within two (2) months of Licensor's Notice of Initial
Delivery.
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11.3 Additional Delivery: After completion of Initial Delivery: (i) if
the Additional Materials are identified in the Deal Terms, then Licensor will
give Distributor Notice that it is prepared to deliver the Additional Materials,
including their cost and shipping charges; (ii) otherwise Distributor will give
Licensor Notice of the number and type of the Additional Materials it desires,
all of which will be subject to Licensor's reasonable approval, and Licensor
will promptly send Distributor Notice of the cost of duplication and shipping of
the approved Additional Materials. Distributor will immediately pay for such
Additional Materials upon receipt of Licensor's Notice. Upon receipt of payment
Licensor will make prompt Delivery of the Additional Materials to Distributor as
specified in the Deal Terms or Licensor's Notice.
11.4 Delivery Of Physical Materials: Delivery of the Physical Materials
will be accomplished by one of the following methods as specified in the Deal
Terms or Licensor's Notice of Initial Delivery:
11.4.1 Where Physical Delivery is indicated Licensor will
deliver to the delivery location specified in the Deal Terms the Physical
Materials listed in the Deal Terms suitable for use as or manufacture of
necessary exploitation materials. Unless otherwise specified in the Deal Terms,
the Physical Materials will be shipped to Distributor by air transport.
11.4.2 Where Laboratory Access is indicated Licensor will
provide Distributor with access to the Physical Materials listed in the Deal
Terms suitable for use as or manufacture of necessary exploitation materials.
Access will be on the terms of the attached AFMA Laboratory Access Letter, or
other mutually approved access letter. The Physical Materials will always be
held in a recognized laboratory or facility in Licensor's name and subject to
the requirements of the Access Letter. Distributor may order prints and other
exploitation materials for the Picture to be manufactured from the accessible
Physical Materials at Distributor's sole expense.
11.4.3 Where Loan of Materials is indicated Licensor will
deliver on loan to the delivery location specified by Distributor the Physical
Materials listed in the Deal Terms suitable for manufacture of necessary
preprint materials. Unless otherwise specified in the Deal Terms, the Physical
Materials will be shipped to Distributor by air transport. These Physical
Materials will only be used to make new preprint materials at Distributor's sole
expense from which necessary exploitation materials can be made. These Physical
Materials will always be held in a laboratory or facility subject to Licensor's
reasonable approval and will be returned to Licensor within a reasonable time
designated by Licensor.
11.4.4 Where Satellite Delivery is indicated Licensor may
deliver the Physical Materials listed in the Deal Terms to Distributor by
satellite transmission commensurate with available materials and Distributor's
equipment. Licensor will be responsible for all uplinking transmission costs;
Distributor will be responsible for arranging to receive the satellite reception
and for all downlinking reception costs. Distributor's failure to make suitable
downlinking receiving arrangements, or failure to receive a transmission of the
Picture due to technical downlink or reception failure, will not affect
Distributor's obligations under this Agreement. If Distributor experiences a
technical failure of transmission or reception, Licensor upon receipt of timely
notice will attempt to assist Distributor to receive the transmission.
Distributor will pay for each missed satellite feed a charge equal to Licensor's
actual cost of transmission.
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11.5 Delivery Of Support Material: Licensor will also provide, at
Distributor's request and expense, the Support Materials as specified in the
Deal Terms or Licensor's Notice of Initial Delivery. Unless otherwise specified
in the Deal Terms, all Support Materials will be shipped to Distributor by air
transport. If Distributor does not use any of the Support Materials, then
Distributor will obtain prior Notice of Licensor's approval before using any of
its own servicing, advertising, promotional or other support material.
11.6 Evaluation and Acceptance: Distributor will evaluate all Delivery
Materials for technical acceptance promptly after their receipt. All Delivery
Materials will be considered technically satisfactory and accepted by
Distributor unless within ten (10) days after receipt Distributor gives Licensor
Notice specifying any technical defect. If Distributor's notice is accurate,
then Licensor will, at its election, either: (i) timely correct the defect and
redeliver the effected Delivery Materials; or (ii) deliver new replacement
Delivery Materials; or (iii) exercise its rights of suspension or withdrawal
pursuant to Paragraph 17. If Distributor has undertaken a Theatrical Release or
Video Release of the Picture or begun exploiting any Licensed Right, then any
alleged defect will be deemed waived by Distributor.
11.7 Ownership of Materials: Legal ownership of and title to all
Delivery Materials will remain with Licensor subject to Distributor's right to
use such Delivery Materials under this Agreement. Distributor will exercise due
care in safe-guarding all Delivery Materials and will assume all risk for their
theft or damage while they are in Distributor's possession.
11.8 Payment for Delivery Materials: Distributor will pay for all
Delivery Materials as indicated in the Deal Terms or otherwise by Notice from
Licensor. All costs of Delivery and Return (including shipping charges, import
fees, duties, brokerage fees, storage charges and related charges) will be
Distributor's sole responsibility unless otherwise specified in the Deal Terms.
11.9 Distributor Created Materials: Licensor will at all times have
unrestricted free access to all alternate language tracks and dubbed versions,
masters, advertising and promotional materials, artwork and other materials
created by Distributor pursuant to this Agreement. Distributor will promptly
give Licensor Notice of each Person who prepares any dubbed or subtitled tracks
for the Picture and of each laboratory or facility where the tracks are located.
Promptly after completion of any dubbed or subtitled version of the Picture,
Distributor will provide Licensor with immediate unrestricted free access to all
dubbed and subtitled tracks. Licensor will immediately become the owner of the
copyright in all dubbed and subtitled tracks, subject to a non-exclusive free
license in favor of Distributor to use such tracks during the Term solely for
exploitation of the Licensed Rights. If such ownership is not allowed under a
Law in the Territory, then Distributor will grant Licensor a non-exclusive free
license to use such dubbed or subtitled tracks worldwide in perpetuity without
restriction.
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11.10 Return of Delivery Materials: Upon expiry of the Agreement Term
Distributor will at Licensor's election either: (i) return all Delivery
Materials to Licensor at Distributor's expense; or (ii) destroy all Delivery
Materials and provide Licensor with a customary certificate of destruction.
12. GENERAL EXPLOITATION OBLIGATIONS
12.1 Obligations: In exploiting each Licensed Right Distributor will
abide by the following obligations in addition to any other exploitation
obligations in this Agreement:
12.1.1 Distributor will not exploit or authorize exploitation
of any Licensed Right before the end of its Holdback Period;
12.1.2 Distributor will not discriminate against the Picture
or use the Picture to secure more advantageous terms for any other Motion
Picture, product or service; and
12.1.3 Upon Licensor's request Distributor will provide
Licensor all information reasonably available to Distributor regarding the time
and place of the anticipated and actual first exploitation of each Licensed
Right.
12.2 Approvals: Licensor will have the following approval rights
regarding the exploitation of each Licensed Right:
12.2.1 Licensor will have prior reasonable approval over the
material terms of each license for exploitation of the Licensed Rights. Failure
by Licensor to disapprove a proposed license within ten (10) days of Licensor's
receipt of Notice of its material terms will be deemed approval.
12.2.2 Licensor will have prior approval in its sole
discretion over the material terms of each subdistribution agreement or agency
agreement for exploitation of the Licensed Rights. No such agreement will be
deemed approved unless and until Distributor receives Notice of Licensor's
approval.
12.3 Continuing Obligations: Throughout the Agreement Term Distributor
will use its all diligent efforts and skill in the distribution and exploitation
of the Licensed Rights to maximize Gross Receipts and minimize Recoupable
Distribution Costs. The Picture will be distributed and exploited consistent
with the quality standards of first-class distributors in the Territory.
Distributor will maintain the Picture in continuous release throughout Territory
for a period consistent with its reasonable business judgment.
13. THEATRICAL EXPLOITATION OBLIGATIONS
13.1 Licensor's Approval: Licensor will have prior approval on an
on-going basis of all significant aspects of the exploitation of the Cinematic
Rights throughout the Territory, including the initial release campaign,
distribution policy, exhibition contract terms, minimum and maximum print order,
the total amount and specific items of the advertising and publicity budget, the
advertising and marketing campaign, the release dates, the release pattern, the
theaters in key cities, marketing strategy, short subject allocations, and any
modifications or amendments to them. Distributor will timely submit each item to
Licensor for Licensor's prior approval.
15
13.2 Release Obligations: In undertaking the Theatrical release of the
Picture:
13.2.1 Distributor will place the Picture in general
theatrical release throughout the Territory in no less than the number of cities
and theaters reasonably required by Licensor and no later than the Theatrical
Release Date specified in the Deal Terms;
13.2.2 Distributor will order and pay for no less than the
Minimum Prints and no more than the Maximum Prints specified in the Deal Terms,
or, if none are specified, the number reasonably required by Licensor;
13.2.3 Distributor will comply with the advertising and
marketing campaign reasonably pre-approved by Licensor and in so doing will
spend no less than the Minimum Ad Commitment and no more than the Maximum Ad
Commitment specified in the Deal Terms or, if none is specified, then no less
and no more than the advertising budget reasonably approved by Licensor;
13.2.4 Distributor will give Licensor reasonable advance
notice of all premieres of the Picture in the Territory;
13.2.5 Distributor will not enter the Picture in any
festival, charitable screening or the like without Licensor's prior approval in
its sole discretion.
13.3 Release Information: Promptly after Initial Delivery Licensor will
provide Distributor with its reasonable release information requirements.
Distributor will comply with these requirements. In addition, during the period
between the Theatrical Release of the Picture in the Territory and the first
accounting Statement, Distributor will give weekly Notice to Licensor setting
forth all information available to Distributor regarding the results of such
release, including exhibition terms, box office receipts as received, and
expenses as incurred, on a weekly and cumulative basis.
13.4 Exhibition Obligations: In arranging for the exhibition of the
Picture, Distributor will comply with all of the following:
13.4.1 All exhibition agreements for the Picture must be made
separate and independent from exhibition agreements for any other picture,
product or service;
13.4.2 Distributor will not authorize or allow the Picture
during its first run to be exhibited on a flat license or 4-wall basis, or as
part of a multiple feature engagement, unless Licensor has given prior Notice of
its approval of all relevant terms of such proposed exhibition, including the
proposed allocation to the Picture of box office receipts, permitted advertising
costs, license fees and film rentals;
16
13.4.3 Distributor will not authorize or allow the Picture
during its first theatrical run to be exhibited with any other feature or short
subject, provided that, if required to do so by Law, then Distributor will only
allocate to such feature or short subject for that exhibition run the least of:
(i) one percent (1%) of net box office receipts per theater; (ii) the equivalent
of Five Hundred Dollars (US$500) in the currency of the Territory per theater
for each continuous playdate; or (iii) the equivalent of Twenty-Five Hundred
Dollars (US $2,500) for the entire exhibition run in all theaters;
13.4.4 Distributor will not cancel or amend any exhibition
agreement once made without Licensor's prior written approval, and any
settlements submitted to Licensor for approval must be at rates no less than
those for comparable Motion Pictures in the Territory;
13.4.5 Distributor will audit all exhibition engagements for
the Picture consistent with the practices of first-class distributors in the
Territory and will promptly supply Licensor with the results of such audits; and
13.4.6 Distributor will do all things reasonably necessary to
maximize collections from exhibitors as quickly as is possible.
13.5 Controlled Theaters: A Controlled Theater is a theater in which
Distributor, any Distributor Affiliate, or any officer, director, partner, owner
or shareholder owning more than 10% of any of them, has any interest, direct or
indirect, in its ownership or operation. Distributor will not license the
Picture to a Controlled Theater except on terms consistent with arms-length
transactions between such Controlled Theater and Third Party distributors for
the exhibition of comparable Motion Pictures. Distributor will promptly provide
Licensor with copies, certified to be accurate, of all agreements with
Controlled Theaters for exhibition of any Picture.
14. VIDEO EXPLOITATION OBLIGATIONS
14.1 Video Release: Distributor will cause the Video Release of the
Picture throughout the Territory by no later than the Video Release Date
specified in the Deal Terms, if any.
14.2 Limits on Use: Distributor will only exploit Videograms of the
Picture in the authorized Types and Formats in the Deal Terms. Distributor will
not advertise or authorize advertising of the availability of Videograms of the
Picture to the public until two (2) months before the end of the applicable
Video Holdback.
14.3 Efforts and Quality: Distributor will use all diligent efforts and
skill in the manufacture, distribution, and exploitation of Videograms of the
Picture. The Videograms manufactured by Distributor will meet quality standards
at least comparable to other Videograms commercially available through
legitimate outlets in the Territory.
17
14.4 Catalogue Availability: From the end of the applicable Video
Holdback until the expiry of the License Period for the Video Licensed Rights
Distributor will make Videograms of the Picture available in the Territory
through its catalogue and will not allow them to leave normal channels of
distribution for a commercially unreasonable period of time.
14.5 Licensor's Ad Campaign Approval Rights: Licensor will have the
right of prior approval of the advertising and marketing campaign for the
exploitation of the Video Licensed Rights in the Picture. Distributor will
submit all proposed advertising and artwork to Licensor for approval before it
is used. Licensor's approval will be deemed given if Licensor does not give
Notice to Distributor of an objection within one (1) month of Licensor's receipt
of these items.
14.6 Licensor's Packaging Approval Rights: Distributor at its cost will
provide Licensor for its reasonable approval one (1) prototype copy of each
authorized format of Videogram and its packaging promptly after their
manufacture and before their sale or disposition. Licensor's approval will be
deemed given if Licensor does not give Notice to Distributor of an objection
within ten (10) days of Licensor's receipt of these items. Distributor will
provide Licensor with a reasonable number (not exceeding ten (10)) free copies
of each authorized Format of Videogram and its packaging subject only to
applicable duties.
14.7 Limits On Included Material: Distributor will not authorize or
allow any other Motion Picture, advertising, or other material to be included on
any Videogram of the Picture without prior Notice of Licensor's approval.
14.8 Minimum Retail Price: If a Minimum Retail Price is contained in
the Deal Terms, Distributor, if not prohibited by Law, will not exploit or
authorize exploitation of Videograms to the consumer at a price less than such
Minimum Retail Price. In any case, for purposes of calculating Gross Receipts
and amounts due Licensor, all Videograms will be deemed sold at retail for not
less than the Minimum Retail Price in the Deal Terms.
14.9 Minimum Wholesale Price: If a Minimum Wholesale Price is contained
in the Deal Terms, Distributor, if not prohibited by Law, will not exploit or
authorize exploitation of Videograms at the Wholesale Level at a price less than
such Minimum Wholesale Price. In any case, for purposes of calculating Gross
Receipts and all amounts due Licensor, the wholesale price of all Videograms
will be deemed to be the greater of either their actual wholesale selling price
or the Minimum Wholesale Price in the Deal Terms.
14.10 Free Goods: Distributor will not dispose of more than the amount
of Videograms set forth in the Deal Terms as promotional, discount, or free
samples ("Free Goods") without Notice of Licensor's prior approval. Any sale,
rental or other disposition of Videograms beyond such amount will be considered
as if sold at not less than the Minimum Wholesale Price in the Deal Terms for
purposes of computing any amounts due Licensor.
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14.11 Sell-Off Period: During the last six (6) months of the License
Period for the Video Licensed Rights Distributor will not manufacture Videograms
in excess of those reasonably anticipated to meet normal customer requirements.
During the three (3) month period following the end of the License Period for
the Home Video Licensed Rights, and provided this Agreement has not been
terminated under Paragraph 17.2, 18.2 or 18.4, Distributor will have the
non-exclusive right to sell off its then existing inventory of Videograms for
Home Video exploitation only. At the end of this three (3) month period
Distributor will at Licensor's election either sell its remaining Videograms and
their packaging to Licensor at Distributor's cost or destroy them and provide
Licensor with a customary certificate of destruction.
14.12 Import/Export Restrictions: Distributor will not import or
authorize importation of Videograms embodying the Picture into the Territory
other than the Delivery Materials provided by Licensor. At no time will
Distributor export or authorize exportation of Videograms embodying the Picture
from the Territory.
15. TELEVISION EXPLOITATION OBLIGATIONS
15.1 Release Obligations: In exploiting the Television Licensed Rights
in the Picture:
15.1.1 Distributor will notify Licensor in advance of the time
and place of the expected first Pay TV and Free TV broadcast of the Picture in
the Territory;
15.1.2 Distributor will not broadcast or authorize broadcast
of the Picture by any form of Pay TV or Free TV in dubbed or subtitled version
except as authorized in the Deal Terms;
15.1.3 Distributor will not broadcast or authorize broadcast
of the Picture for more than the number of Run(s) or Playdate(s) authorized in
the Deal Terms, or, if none are there authorized, for more than the number of
Run(s) or Playdate(s) reasonably preapproved by Licensor;
15.1.4 Distributor will not broadcast or authorize broadcast
of the Picture by any form of Pay TV other than an encrypted form, and
Distributor will not sell, rent or export or authorize the sale, rental or
export of decoders for such encryption outside the Territory; and
15.1.5 Distributor will not broadcast or authorize broadcast
of the Picture by any means, including terrestrial, cable or satellite, from
within the Territory where the broadcast is primarily intended for reception
outside the Territory or is capable of reception by more than an insubstantial
number of home television receivers outside the Territory.
15.2 Run - Defined: A Run means one (1) telecast of the Picture during
a twenty-four (24) hour period over the non-overlapping telecast facilities of
an authorized telecaster such that the Picture is only capable of reception on
television receivers within the reception zone of such telecaster once during
such period. A simultaneous telecast over several interconnected local stations
(i.e. on a network) constitutes one (1) telecast; a telecast over
non-interconnected local stations whose signal reception areas do not overlap
constitutes a telecast in each station's local broadcast area.
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15.3 Playdate - Defined: A Playdate means one or more telecasts of the
Picture during a twenty-four (24) period over the non-overlapping telecast
facilities of an authorized telecaster such that the Picture is only capable of
reception on television receivers within the reception zone of such telecaster
during such period.
15.4 Usage Reports: Upon Licensor's request Distributor will promptly
provide Licensor with Notice of the title of the Picture in each Authorized
Language used for each telecast of the Picture. Distributor will also provide
the following information to the extent reasonably available to Distributor: (i)
each person responsible for preparing a dubbed or subtitled version of the
Picture; and (ii) the time and place of each telecast of the Picture since the
last Notice to Licensor.
15.5 Commercials: In exploiting any Pay TV or Free TV Licensed Rights
Distributor may insert or authorize insertion of commercial announcements in the
Picture but only at those points designated by Licensor. Distributor will
require each broadcaster to broadcast all credits, trademarks, logos, copyright
notices and other symbols appearing on the Picture as furnished by Licensor.
15.6 Conclusion of Runs or Playdates: The License Period for each Pay
TV or Free TV Licensed Right ends on the earlier of the end of the License
Period specified in the Deal Terms or the conclusion of the last Authorized Run
or Playdate for such Licensed Right. For example, if two (2) Runs are authorized
for the Terrestrial Free TV Rights then its License Period expires at the end of
the second Run even if a License Period continues for other Television Rights. A
License Period will not be extended because Distributor failed to take all
Authorized Runs or Playdates for the applicable Licensed Right.
15.7 Secondary Broadcasts:
15.7.1 "Secondary Broadcast" means the simultaneous, unaltered
and unabridged retransmission by a cable, microwave or telephone system for
reception by the public of an initial transmission, by wire or over the air,
including by satellite, of a Motion Picture intended for reception by the
public.
15.7.2 "Compulsory Administration" means any Law under which:
(i) Secondary Broadcasts are subject to compulsory license; (ii) cable systems
or other Persons may make Secondary Broadcasts without first obtaining
authorization from rightsholders or Persons making originating broadcasts; or
(iii) rightsholders may only grant or withhold authorization for Secondary
Broadcasts through collective management societies or collective contractual
agreements.
15.7.3 Licensor reserves all rights to make, authorize and
collect royalties for any Secondary Broadcast of the Picture whether the primary
broadcast originates inside or outside the Territory. Licensor does not grant
any exclusivity protection against Secondary Broadcasts and no Secondary
Broadcast of the Picture anywhere in the Territory at any time will be a breach
of this Agreement by Licensor regardless of where the primary broadcast
originated.
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15.7.4 If during the Agreement Term Secondary Broadcasts are
subject to Compulsory Administration in a country in the Territory, then
Licensor reserves the right to collect all royalties for Secondary Broadcasts of
the Picture in such country regardless of where the primary broadcast
originated. If broadcasters may grant or withhold authorization for Secondary
Broadcasts of their primary broadcasts in such country then: (i) Distributor
will require each broadcaster in such country licensing the Picture to abide by
Licensor's reasonable directions regarding Secondary Broadcasts of the Picture;
(ii-78) such directions may require the broadcaster to prohibit Secondary
Broadcasts of the Picture until after a date designated by Licensor; and (iii)
Distributor will timely give Notice to Licensor of primary broadcasts to which
Distributor reasonably believes this provision will apply.
16. MUSIC
16.1 Cue Sheets: To the extent required and available, Licensor will
supply Distributor promptly after Delivery with available music cue sheets
listing the composer, lyricist and publisher of all music embodied in the
Picture. Distributor will as necessary promptly file with the appropriate
governmental agency or music rights society in the Territory the music cue
sheets supplied by Licensor without change.
16.2 Synchronization: Licensor represents and warrants to Distributor
that Licensor controls all rights necessary to synchronize the music contained
in the Picture on all copies exploited by Distributor throughout the Territory
for the Agreement Term. Licensor authorizes Distributor to exploit such
synchronization rights without charge in conjunction with its exploitation of
the Picture. Licensor will be solely responsible for paying all royalties or
charges necessary to obtain and control such synchronization rights for the
Agreement Term and will hold Distributor harmless from any payments in this
regard.
16.3 Mechanical: Licensor represents and warrants to Distributor that
Licensor controls all rights necessary to make mechanical reproductions of the
music contained in the Picture on all copies exploited by Distributor throughout
the Territory for the Agreement Term. Licensor authorizes Distributor to exploit
such mechanical rights without charge in conjunction with its exploitation of
the Picture. Licensor will be solely responsible for paying all royalties or
charges necessary to obtain and control such mechanical rights for the Agreement
Term, and Licensor will hold Distributor harmless from any payments in this
regard, provided if a mechanical or authors' right society in the Territory
refuses to honor the authorization obtained by Licensor in the country of origin
of the Picture then Distributor will be solely responsible for such royalties or
charges.
16.4 Performance: Licensor represents and warrants to Distributor that
the nondramatic ("small") performing rights in each musical composition embodied
in the Picture are: either (i) in the public domain in the Territory; or (ii)
controlled by Licensor sufficient to allow Distributor to exploit the Licensed
Rights without additional payment for such rights; or (iii) available by license
from the local music performing rights society(ies) in the Territory affiliated
with the International Confederation of Authors and Composers Societies (CISAC).
With regard to music in category (iii), Distributor will be solely responsible
for obtaining a license to exploit such performance rights from the local music
performing rights society(ies).
21
16.5 Publishing: As between Licensor and Distributor, Licensor will be
solely entitled to collect and retain the publisher's share of any music
royalties arising from Distributor's exploitation of any Licensed Rights in the
Picture.
17. SUSPENSION AND WITHDRAWAL
17.1 Licensor's Right: Licensor may suspend Delivery or withdraw the
Picture at any time: (i) if Licensor determines in good faith that its
exploitation might infringe the rights of others or violate any Law; (ii) if
Licensor determines in good faith that its Materials are unsuitable for the
manufacture of first class commercial quality exploitation materials; (iii) due
to Force Majeure; or (iv) if Distributor refuses to accept Delivery of the
Picture for any reason.
17.2 Effect of Suspension: Distributor will not be entitled to claim
any damages or lost profits for any suspension. Instead the Agreement Term will
be extended for the length of each suspension. If any suspension lasts more than
three (3) consecutive months, then either Party may terminate this Agreement on
ten (10) days notice, in which case the Picture will be treated as withdrawn.
17.3 Effect Of Withdrawal: If the Picture is withdrawn or treated as
withdrawn after a period of suspension, then Licensor must either substitute a
Motion Picture of like quality mutually satisfactory to Licensor and
Distributor, or must refund promptly all unrecouped amounts of the Guarantee
paid to Licensor and all unrecouped Recoupable Distribution Costs. Distributor's
sole remedy will be to receive this substitute or refund. In no case may
Distributor collect any lost profits or consequential damages.
17.4 Force Majeure: Force Majeure means any fire, flood, earthquake, or
public disaster; strike, labor dispute or unrest; unavailability of any major
talent committed to the Product; unavoidable accident; breakdown of electrical
or sound equipment; failure to perform or delay by any laboratory or supplier;
delay or lack of transportation; embargo, riot, war, insurrection or civil
unrest; any Act of God including inclement weather; any act of legally
constituted authority; or any other cause beyond the reasonable control of
Licensor.
18. DEFAULT AND TERMINATION
18.1 Distributor's Default: Distributor will be in default if: (i)
Distributor fails to pay any installment of the Guarantee when due; (ii)
Distributor becomes insolvent or fails to pay its debts when due; (iii)
Distributor makes an assignment for the benefit of creditors, seeks relief under
any bankruptcy law or similar law for the protection of debtors, or allows a
petition of bankruptcy to be filed against it or a receiver or trustee to be
appointed for substantially all of its assets that is not removed within thirty
(30) days; (iv) Distributor breaches any material term, covenant or condition of
this Agreement or any other agreement with Licensor; (v) a Distributor Affiliate
breaches any material term, covenant or condition of any other agreement with
Licensor; or (vi) Distributor attempts to make any assignment, transfer,
sublicense or appointment of an agent without first obtaining Licensor's
approval under Paragraph 23.1.
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18.2 Notice To Distributor: Licensor will give Distributor Notice of
any claimed default. If the default is capable of cure then Distributor will
have ten (10) days after receipt of Licensor's Notice to cure a monetary
default, and twenty (20) days after receipt to cure a non-monetary default. If
the default is incapable of cure, or if Distributor fails to cure within the
times provided, then Licensor may proceed against Distributor for available
relief, including terminating this Agreement retroactive to the date of default,
suspending Delivery of the Picture and declaring all unpaid amounts due Licensor
immediately due and payable.
18.3 Licensor's Default: Licensor will be in default if: (i) Licensor
becomes insolvent or fails to pay its debts when due; (ii) Licensor makes an
assignment for the benefit of creditors, or seeks relief under any bankruptcy
law or similar law for the protection of debtors, or allows a petition of
bankruptcy to be filed against it or a receiver or trustee appointed for
substantially all of its assets that is not removed within thirty (30) days; or
(iii) Licensor breaches any material term, covenant, or condition of this
Agreement. Any default by Licensor is limited to the Picture, and no default by
Licensor as to any one agreement with Distributor will be a default as to any
other agreement with Distributor.
18.4 Notice To Licensor: Distributor will give Licensor Notice of any
claimed default. Licensor will have ten (10) days after receipt of Distributor's
Notice to cure a monetary default, and twenty (20) days after receipt to cure a
non-monetary default. If Licensor fails to cure within the times provided, then
Distributor may proceed against Licensor for all available relief, provided,
however, that in no case may Distributor collect any "lost profits" or
consequential damages.
18.5 Arbitration: Any dispute under this Agreement will be resolved by
final and binding arbitration under the Rules of International Arbitration of
the American Film Marketing Association in effect when the arbitration is filed
(the "AFMA Rules"). Each Party waives any right to adjudicate any dispute in any
other court or forum, except that a Party may seek interim relief before the
start of arbitration as allowed by the AFMA Rules. The arbitration will be held
in the Forum designated in the Deal Terms, or, if none is designated, as
determined by the AFMA Rules. The Parties will abide by any decision in the
arbitration and any court having jurisdiction may enforce it. The Parties submit
to the jurisdiction of the courts in the Forum to compel arbitration or to
confirm an arbitration award. The Parties agree to accept service of process in
accordance with the AFMA Rules.
19. ANTI-PIRACY PROVISIONS
19.1 Copyright Notice Requirements: Distributor will include on each
Copy of the Picture distributed under its authority the copyright notice and
anti-piracy warning supplied by Licensor. A Copy of the Picture includes all
negatives, preprint materials, release prints, masters, tapes, cassettes, discs
or Videograms and their packaging.
19.2 Anti-Piracy Warning:
19.2.1 The anti-piracy warning on each Copy of the Picture
must read substantially as follows:
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"WARNING THIS MOTION PICTURE IS PROTECTED BY LAW. Any
unauthorized copying, distribution, performance,
renting, lending, exporting, importing, dissemination
or exhibition is prohibited by law. Violators will be
subject to criminal prosecution and civil penalties.
THIS MOTION PICTURE IS REGISTERED WITH THE AFMA
ANTI-PIRACY PROGRAM"
19.2.2 Videograms and their packaging must contain this
additional warning:
"Licensed only for use in ____________________"
19.2.3 Videograms exploited for Home Video and their packaging
must include:
"Authorized For Private Home Use Only"
19.3 Enforcement: Distributor will take all reasonable steps to protect
the copyright in the Picture and to prevent piracy. Licensor may participate in
any anti-piracy action using counsel of its choice. Licensor's expenses will be
reimbursed from any recovery in equal proportion with Distributor's expenses. If
Distributor fails to take anti-piracy action, Licensor may do so in Licensor's
or Distributor's name, with all recoveries belonging to Licensor.
19.4 New Technology: If during the Agreement Term new technology in use
in the Territory inhibits the unauthorized duplication of copies of the Picture,
interferes with the reception of broadcast signals without use of an authorized
decoding device, or otherwise provides protection against unauthorized
exploitation of the Picture, then Distributor will use such technology in a
reasonable manner in exploiting the Picture. Distributor may deduct the cost of
so doing as a Recoupable Distribution Cost after first obtaining Notice of
Licensor's reasonable approval.
19.5 No Warranty Against Piracy: The Parties acknowledge that it is in
their mutual interest to prevent piracy of the Picture in the Territory.
Licensor has informed Distributor of any act of piracy of the Picture in the
Territory of which Licensor is aware, and such information has been considered
in determining the Guarantee along with the other terms of this Agreement.
Distributor has also taken all necessary steps to inform itself of any piracy of
the Picture in the Territory before executing this Agreement. No piracy of the
Picture, whether occurring before or after execution of this Agreement, will
allow Distributor to terminate this Agreement or reduce any amounts due
Licensor. Licensor will cooperate with Distributor to prevent or remedy any such
act of piracy.
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20. LICENSOR'S WARRANTIES
20.1 As Principal: If the Cover Page indicates Licensor is a principal
then Licensor represents and warrants to Distributor that the following are true
and correct and will remain so throughout the Agreement Term:
20.1.1 Licensor has full authority and capacity to execute
this Agreement and full legal and financial ability to perform all of its
obligations under this Agreement;
20.1.2 There are no existing or threatened claims or
litigation which would adversely affect or impair any of the Licensed Rights in
the Territory during the Agreement Term;
20.1.3 Licensor has not licensed, encumbered or assigned and
will not license, encumber or assign any Licensed Right to any other Person in
the Territory during its applicable License Period;
20.1.4 Licensor will not exploit or authorize exploitation of
any Reserved Right in the Territory before the end of the applicable Licensor
Holdback period;
20.1.5 The Picture was produced by authors who are nationals
of or have their habitual residence in, or was first published or simultaneously
first published in, a country which at the time of such production or
publication was a signatory to the Berne Convention for the Protection of
Literary and Artistic Works or the Universal Copyright Convention or the Buenos
Aires Convention, and Licensor has not done any act or omitted to do any act
which would impair the copyright in the Picture within the Territory during the
Agreement Term; and
20.1.6 Neither the Picture nor the exercise of any Licensed
Rights does or will: (i) defame, or hold in a false light, or infringe any
privacy or publicity or other personal right of any Person; or (ii) infringe any
copyright, trademark, right of ideas, parent, or any other property right of any
Person.
20.2 As Agent: If the Cover Page indicates Licensor is acting as an
agent Licensor represents and warrants to Distributor that the following are
true and correct and will remain so throughout the Agreement Term:
20.2.1 Licensor has full authority from its principal
designated on the Cover Page to enter into this Agreement on behalf of its
principal and Licensor's principal will be bound by this Agreement;
20.2.2 To the best of Licensor's knowledge there are no
existing or threatened claims or litigation which would adversely affect or
impair any of the Licensed Rights;
20.2.3 To the best of Licensor's knowledge there are no other
agreements licensing, encumbering or assigning any Licensed Right to any other
Person in the Territory during its License Period;
25
20.2.4 Licensor's principal has made to Licensor each of the
representations and warranties in Paragraph 20.1 and has authorized Licensor to
make those representations and warranties directly from the principal to
Distributor on the principal's behalf. In case of a breach of any representation
or warranty in Paragraph 20.1, Distributor agrees to look directly to the
principal and not to Licensor for any remedies Distributor might have.
21. DISTRIBUTOR'S WARRANTIES
21.1 As Principal: Distributor represents and warrants to Licensor that
the following are true and correct and will remain so throughout the Agreement
Term:
21.1.1 Distributor has full authority and capacity to execute
this Agreement and full legal and financial ability to perform all of its
obligations under this Agreement;
21.1.2 There are no existing or threatened claims or
litigation which would adversely affect or impair Distributor's ability to
perform under this Agreement;
21.1.3 Distributor will honor all restrictions on the exercise
of the Licensed Rights and the Allied Rights under this Agreement and will not
exploit any Licensed Right outside the Territory, before the end of its Holdback
or after its License Period.
21.2 As Assignor: In case of any assignment of this Agreement pursuant
to Paragraph 23.1, Distributor makes the following additional representations
and warranties to Licensor:
21.2.1 As a condition to the effectiveness of such assignment
the assignee can and will make all of the representations and warranties set
forth in Paragraph 21.1 directly to Licensor; and
21.2.2 If the assignee breaches any of those representations
and warranties, then Licensor, in addition to any right or remedy, may proceed
directly against Distributor for such breach without first proceeding against
such assignee or exhausting any right or remedies against such assignee.
22. INDEMNITIES
22.1 By Licensor: Licensor will indemnify and hold harmless
Distributor, including its officers, directors, partners, owners, shareholders,
employees, attorneys and agents, from all claims, loss, liability, damages or
expenses, including reasonable attorneys' fees, but not including lost profits,
due to breach of any of Licensor's representations or warranties. Licensor will
remain responsible for honoring Licensor's indemnities despite any assignment
pursuant to Paragraph 23.2. If Licensor is acting as an agent, these indemnities
are also made directly by Licensor's principal to Distributor, but Distributor
will look only to Licensor's principal to honor these indemnities with regard to
the principal's representations and warranties.
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22.2 By Distributor: Distributor will indemnify and hold harmless
Licensor, including its officers, directors, partners, owners, shareholders,
employees, attorneys and agents, from all claims, loss, liability, damages or
expenses, including reasonable attorneys' fees, but not including lost profits,
due to breach of any of Distributor's representations or warranties. Distributor
will remain responsible for honoring Distributor's indemnities despite any
assignment, transfer, sublicense or appointment of an agent under Paragraph
23.1.
23. ASSIGNMENT AND SUBLICENSING
23.1 Distributor's Limitations: This Agreement is personal to
Distributor. Distributor may not assign or transfer this Agreement, or
sublicense or use an agent to exploit any Licensed Rights, whether voluntarily
or involuntarily, without prior Notice of Licensor's approval in Licensor's sole
discretion. A transfer of a controlling interest in Distributor's capital stock
or other evidence of ownership will be a transfer for which prior Notice of
Licensor's consent is required. If Licensor consents to an assignment, transfer,
sublicense or agent then this Agreement will be binding on such authorized
assignee, transferee, subdistributor or agent but will not release Distributor
from its obligations under this Agreement.
23.2 Licensor's Rights: Licensor may freely assign or transfer this
Agreement or any of its rights under this Agreement, but no such assignment or
transfer will relieve Licensor of its obligations under this Agreement, unless
it is to a company which acquires all or substantially all of Licensor's assets.
23.3 Licensor's Assignment For Financing Purposes: If Licensor pledges
this Agreement or assigns its right to receive any payment to a lender,
completion guarantor or other Person as security for or in connection with any
loan or other obligation, then Distributor will promptly on request execute a
reasonable and customary notice and acknowledgement of assignment and charge or
similar document as necessary to establish or perfect the Person's interest or
secure its rights. Distributor agrees to abide by consistent written
instructions from Licensor and such Person in making any payments otherwise due
Licensor directly to such Person. Distributor agrees not to assert any offset
rights against such Person or to assert any rights it may have against Licensor
to delay, diminish or excuse the payment of any sums pledged or assigned to such
Person. Instead Distributor will only treat such offsets or other rights as a
separate and unrelated matter solely between Licensor and Distributor.
24. MISCELLANEOUS PROVISIONS
24.1 Separability: In case of any conflict between this Agreement and
any material Law the latter will prevail.
27
24.2 No Waiver: No waiver of any breach will waive any other breach. No
waiver is effective unless in writing. The exercise of any right will not waive
any other right or remedy.
24.3 Remedies Cumulative: All remedies are cumulative, and resorting to
one will not preclude resorting to any other at any time.
24.4 Notices: All Notices must be in writing and sent to a Party at its
address on the Cover Page by fax, telex, telegram or first class mail. Notice
will be effective when received. Either Party may change its place for Notice by
Notice duly given.
24.5 Entire Agreement: This Agreement contains the entire understanding
of the Parties regarding its subject matter. It supersedes all previous written
or oral negotiations, deal memos, understandings or representations between the
parties regarding its subject matter, if any. Each Party expressly waives any
right to rely on such negotiations understandings or representations, if any.
24.6 Modification: No modification or amendment of this Agreement will
be effective unless in writing and signed by both Parties.
24.7 Captions: Captions and paragraph headings are for convenience
only.
24.8 Terminology: As used in the Agreement "and" means all of the
possibilities, "or" means any or all of the possibilities in any combination,
and "either ... or" means only one of the possibilities. "Including" means
"including without limitation." "Must" or "will" means a Party has the
obligation to act or refrain from acting as indicated; "may" means a Party has
the right but not the obligation to act or refrain from acting as indicated.
24.9 Governing Law: This Agreement will be governed by and interpreted
under the laws of the state or jurisdiction specified as Governing Law in the
Deal Terms. If none is specified, then the Governing Law will be the Laws of the
State of California.
24.10 Forum: The Parties consent to the Forum designated in the Deal
Terms as the place for resolving all disputes under this Agreement. If none is
specified, then the Forum will be Los Angeles County, California, U.S.A.
28
AFMA(R) INTERNATIONAL
SCHEDULE OF LICENSING DEFINITIONS
A. Cinematic Rights Definitions:
Cinematic means Theatrical, Non-Theatrical and Public Video
exploitation of a Motion Picture.
Theatrical means exploitation of a Motion Picture Copy only for direct
exhibition in conventional or drive-in theaters, licensed as such in the place
where the exhibition occurs, that are open to the general public on a regularly
scheduled basis and that charge an admission fee to view the Motion Picture.
NonTheatrical means exploitation of a Motion Picture Copy only for
direct exhibition before an audience by and at the facilities of either
organizations not primarily engaged in the business of exhibiting Motion
Pictures, such as in educational organizations, churches, restaurants, bars,
clubs, trains, libraries, Red Cross facilities, oil rigs and oil fields, or
governmental bodies such as in embassies, military bases, military vessels and
other governmental facilities flying the flag of the licensed territory.
NonTheatrical does not include Commercial Video, Public Video, Airline, Ship or
Hotel exploitation.
Public Video means exploitation of a Motion Picture Copy embodied in a
Videogram only for direct exhibition before an audience in a "mini-theater", an
"MTV theater" or like establishment that charges an admission to use the viewing
facility or to view the Videogram and that is not licensed as a traditional
motion picture theater in the place where the viewing occurs.
B. Video Rights Definitions
Video means Home Video and Commercial Video exploitation of a Motion
Picture.
Home Video means Home Video Rental and Home Video SellThru
exploitation of a Motion Picture.
Home Video Rental means exploitation of a Motion Picture Copy embodied
in a Videogram that is rented to the viewer only for non-public viewing of the
embodied Motion Picture in a linear form within a private living place where no
admission fee is charged for such viewing.
Home Video SellThru means exploitation of a Motion Picture Copy
embodied in a Videogram that is sold to the viewer only for non-public viewing
of the embodied Motion Picture in a linear form within a private living place
where no admission fee is charged for such viewing.
Commercial Video means the exploitation of a Motion Picture Copy
embodied in a Videogram only for direct exhibition in a linear form before an
audience by and at the facilities of either organizations not primarily engaged
in the business of exhibiting Motion Pictures, such as in educational
organizations, churches, restaurants, bars, clubs, trains, libraries, Red Cross
facilities, oil rigs and oil fields, or governmental bodies such as in
embassies, military bases, military vessels and other governmental faculties
29
flying the flag of the licensed territory, but only to the extent that such
exploitation is not otherwise utilized in the licensed territory as a form of
Non-Theatrical exploitation. Commercial Video does not include Non-Theatrical,
Public Video, Airline, Ship or Hotel exploitation.
C. Ancillary Rights Definitions
Ancillary means Airline, Ship and Hotel exploitation of a Motion
Picture.
Airline means exploitation of a Motion Picture Copy only for direct
exhibition in airplanes that are operated by an airline flying the flag of any
country in the licensed territory for which Airline exploitation is granted, but
excluding airlines that are customarily licensed from a location outside the
licensed territory or that are only serviced in but do not fly the flag of a
country in the licensed territory.
Ship means exploitation of a Motion Picture Copy only for direct
exhibition in sea or ocean going vessels that are operated by an shipping line
flying the flag of any country in the licensed territory for which Ship
exploitation is granted but excluding shipping lines that are customarily
licensed from a location outside the territory or that are only serviced in but
do not fly the flag of a country in the licensed territory.
Hotel means the exploitation of a Motion Picture Copy only for direct
exhibition in temporary or permanent living places, such as hotels, motels,
apartment complexes, cooperatives or condominium projects, by means of
closed-circuit television systems where the telecast originates within or in the
immediate vicinity of such living places.
D. Pay TV Rights Definitions
Pay TV means Terrestrial Pay TV, Cable Pay TV and Satellite Pay TV
exploitation of a Motion Picture. Pay TV does not include any form of
PayPerView.
Terrestrial Pay TV means over-the-air broadcast of a Motion Picture
Copy by means of encoded Hertzian waves for reception on television receivers
where a charge is made: (i) to viewers in private living places for use of a
decoding device to view a channel that broadcasts the Motion Picture along with
other programming; or (ii) to the operator of a hotel or similar temporary
living place located distant from where the broadcast signal originated for use
of a decoding device to receive a channel that broadcasts the Motion Picture and
other programming and retransmit it throughout the temporary living place for
viewing in private rooms.
Cable Pay TV means originating transmission of a Motion Picture copy by
means of an encoded signal over coaxial or fiber-optic cable for reception on
television receivers where a charge is made: (i) to viewers in private living
places for use of a decoding device to view a channel that transmits the Motion
Picture along with other programming; or (ii) to the operator of a hotel or
similar temporary living place located distant from where the broadcast signal
originated for use of a decoding device to receive a channel that broadcasts the
Motion Picture and other programming and retransmit it throughout the temporary
living place for viewing in private rooms.
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Satellite Pay TV means the uplink broadcast of an encoded signal to a
satellite and its down-link broadcast to terrestrial satellite reception dishes
of a Motion Picture Copy for viewing on television receivers located in the
immediate vicinity of their reception dishes where a charge is made: (i) to
viewers in private living places for use of a decoding device to view a channel
that broadcasts the Motion Picture along with other programming; or (ii) to the
operator of a hotel or similar temporary living place located distant from where
the broadcast signal originated for use of a decoding device to receive a
channel that broadcasts the Motion Picture and other programming and retransmit
it throughout the temporary living place for viewing in private rooms.
E. Free TV Rights Definitions
Free TV means Terrestrial Free TV, Cable Free TV, and Satellite Free TV
exploitation of a Motion Picture. Free TV does not include any form of
PayPerView.
Terrestrial Free TV means over-the-air broadcast by Hertzian waves of a
Motion Picture Copy for reception on television receivers in private living
places without a charge to the viewer for the privilege of viewing the Motion
Picture, provided that for this purpose government television receiver
assessments or taxes (but not a charge for PayPerView or Pay TV) will not be
deemed a charge to the viewer.
Cable Free TV means the originating transmission by coaxial or
fiber-optic cable of a Motion Picture Copy for reception on television receivers
in private living places without a charge to the viewer for the privilege of
viewing the Motion Picture, provided that for this purpose neither government
television receiver assessments or taxes nor the regular periodic service
charges (but not a charge for PayPerView or Pay TV) paid by a subscriber to a
cable television system will be deemed a charge to the viewer.
Satellite Free TV means the up-link broadcast to a satellite and its
down-link broadcast to terrestrial satellite reception dishes of a Motion
Picture Copy for viewing on television receivers in private living places
located in the immediate vicinity of their reception dishes without a charge to
the viewer for the privilege of viewing the Motion Picture, provided that for
this purpose government satellite dish or television receiver assessments or
taxes (but not a charge for PayPerView or Pay TV) will not be deemed a charge to
the viewer.
F. Other Rights Definitions:
Demand View means the transmission of a Motion Picture Copy by means of
an encoded signal for reception on television receivers in homes and similar
permanent living places where a charge is made to the viewer for the right to
use a decoding device to view the Motion Picture at a time selected by the
viewer for each viewing.
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Interactive Multimedia means exploitation of an Interactive Multimedia
Work by means of a computing device that allows the Interactive Multimedia Work
to be directly perceived and manipulated by the user of the computing device and
that either stores the Interactive Multimedia Work on the user's computing
device or accesses the Interactive Multimedia Work by electronic means from
another computing device interconnected with and located in the immediate
vicinity of the user's computing device.
Interactive Networked Multimedia means exploitation of an Interactive
Multimedia Work over the facilities of a communications system that allows the
user of a computing device to engage in two-way transmissions over the system to
access the Interactive Multimedia Work, irrespective of the operator of the
system or the means by which signals are carried, and that stores the
Interactive Multimedia Work for transmission over the system at a place distant
from the place where the user's computing device is located.
Live Performance means performance of a Motion Picture or its
Underlying Material by live players, whether by reading, performance, musical or
dramatic rendition or pantomime, where the performance occurs directly before a
live audience or is broadcast live and without prerecorded material directly to
the public, but excluding performances less than fifteen (15) minutes in length
done for the purposes of advertising or publicizing the Motion Picture.
Merchandising means exploitation of tangible goods that are based on or
utilize names, likenesses or characteristics of artists in their roles in a
Motion Picture or physical materials appearing in or used for a Motion Picture
and that are made for sale to the general public.
NonResidential PayPerView means the broadcast of a Motion Picture Copy
by means of an encoded signal for reception on television receivers in hotels or
similar temporary living places where a charge is made to the viewer for the
right to use a decoding device to view the broadcast of the Motion Picture at a
time designated by the broadcaster for each viewing.
PayPerView means NonResidential PayPerView, Residential PayPerView and
Demand View exploitation of a Motion Picture. PayPerView does not include any
form of Pay TV or Free TV.
Publishing means exploitation of hard cover or soft cover printed
publications of a novelization of a Motion Picture or artwork, logos or
photographic stills created for use in the Motion Picture that are included in
such novelization.
Residential PayPerView means the broadcast of a Motion Picture Copy by
means of an encoded signal for reception on television receivers in homes or
similar permanent living places where a charge is made to the viewer for the
right to use a decoding device to view the broadcast of the Motion Picture at a
time designated by the broadcaster for each viewing.
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G. Additional Definitions:
Affiliate means any Person, including any officer, director, employee
or partner of a Person controlled by, controlling or under common control with a
Party.
Availability Date means the first day after the end of the Holdback
Period for a Licensed Right. If the Availability Date refers to a category of
Licensed Rights, it refers to the first date on which Distributor may exploit
any Licensed Right in the category. For example, the Pay TV Availability Date is
the first date on that Distributor may exploit the Pay TV Terrestrial, Pay TV
Cable or Pay TV Satellite Right.
Broadcast means the communication to the public of a Motion Picture by
means of wire, cable, wireless diffusion or radio waves that allows the Motion
Picture to be viewed on a television receiver. Broadcast means the same as
telecast or diffusion.
Cassette means the same as VideoCassette.
CDI means the same as Compact Disc Interactive.
Compact Disc means a combined optical and electronic storage device
designed to be used in conjunction with a computer that causes a Motion Picture
to be visible on the screen of a monitor or television receiver for viewing in a
substantially linear manner. A Compact Disc does not include any type of
VideoCassette or VideoDisc.
Compact Disc Interactive when used as a Right is a type of Interactive
Multimedia Right and when used to describe a Work is a type of Interactive
MultiMedia Work.
Disc means the same as VideoDisc.
Exhibition means the same as public performance.
First Negotiation means that, provided that Distributor is then
actively engaged in the distribution business on a financially secure basis,
Licensor will negotiate with Distributor in good faith for a period of ten (10)
days regarding the matter for which Distributor has a First Negotiation right
before entering into negotiations regarding the matter with any other Person. If
no agreement is reached within this time period, then Licensor will be free to
stop negotiations with Distributor and then to negotiate and conclude an
agreement regarding the proposed matter with any other Person on any terms.
Interactive Multimedia Work means a Work consisting primarily of a
presentation communicated to a user through the combination of two or more media
of expression, whether textual, audio, pictorial, graphical or audiovisual,
where a significant characteristic of the presentation is the ability of the
user to manipulate the content of the presentation by means of a computing
device in real time and in a nonlinear fashion.
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Laser Disc is a type of VideoDisc.
Law means any statute or ordinance, whether municipal, state, national
or territorial, any executive, administrative or judicial regulation, order,
judgment or decree, any treaty or international convention, or any rule, custom
or practice with force of law.
Motion Picture means an audiovisual work consisting of a series of
related images that, when shown in succession, impart an impression of motion,
with accompanying sounds, if any.
Motion Picture Copy means the embodiment of a Motion Picture in any
physical form, including film, tape, cassette or disc. Where a specific medium
is limited to exploitation by a specific physical form, for example, to
Videograms, then Motion Picture Copy with respect to such medium is limited to
such physical form.
Party means either Licensor or Distributor.
Pay-Cable TV means the same as Cable Pay TV.
Person means any natural person or legal entity.
Principal Photography means the actual photographing of a Motion
Picture, excluding second-unit photography or special effects photography,
requiring the participation of the director and the on-camera participation of a
featured member of the principal cast.
Remake means a new Motion Picture derived from an existing Motion
Picture or its Underlying Material in which substantially the same characters
and events as shown in the existing Motion Picture are depicted.
Rights means rights, licenses and privileges under copyright,
trademark, neighboring rights or other intellectual property rights with regard
to any type of exploitation of a Motion Picture or its Underlying Material.
Sequel means a new Motion Picture derived from an existing Motion
Picture or its Underlying Material in which a character, event or locale
depicted in the existing Motion Picture or its Underlying Material is shown
engaged in or as the subject of substantially new and different events than
those depicted in the existing Motion Picture.
Underlying Material means the literary and other material from which a
Motion Picture is derived or on which it is based, including all versions of the
screenplay, all notes, memos, direction, comments, ideas, stage business and
other material incorporated in any version of the Motion Picture, and, to the
extent necessary rights and licenses have been duly obtained, all existing
novels, stories, plays, songs, events, characters, ideas, or other works from
which any version of the Motion Picture is derived or on which it is based.
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VideoCassette means a VHS or Beta cassette or comparable magnetic
storage device designed to be used with a reproduction apparatus that causes a
Motion Picture to be visible on the screen of a television receiver for viewing
in a substantially linear manner. A VideoCassette does not include any type of
VideoDisc or Compact Disc.
Videogram means any type of VideoCassette or VideoDisc, but only to the
extent the specific Type of electronic storage device and its Format is
authorized in the agreement of the parties.
VideoDisc means a laser or capacitance disc or comparable optical or
mechanical storage device designed to be used with a reproduction apparatus that
causes a Motion Picture to be visible on the screen of a television receiver for
viewing in a substantially linear manner. A VideoDisc does not include any type
of VideoCassette or Compact Disc.
Version means an adaptation of a Motion Picture that is not
accomplished by merely mechanical reproduction or use of minimal originality but
instead uses original artistic or intellectual expression to create a new Work
in its own right which contains materials or expressions of authorship not found
in the original Motion Picture.
Work means an original expression of authorship in the literary,
scientific or artistic domain whatever may be the mode or form of its
expression.
IN WITNESS WHEREOF, Licensor and Distributor have executed this Agreement as of
the date first written above to constitute a binding contract between them.
ALPINE PICTURES INT'L, INC. Cinema Consulting International
("Licensor") ("Distributor")
By: /S/ ▇▇▇ ▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------- ------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Senior Vice President Its: ___________________________