EX-10
27
first-ex108_070706.htm
EX-10.8
This agreement will confirm the terms of the license agreement (the
“Agreement”) made as of October 1, 2003 (the “Effective Date”),
between DEI Productions Inc., (“Distributor”), a Delaware corporation, with
offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and
Media 8 Entertainment and MDP Distribution, Inc. (collectively, “Company”); a
California corporation, with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ with respect to the acquisition of certain rights in and to the
motion picture currently entitled “Monster” (the “Picture”).
1. Conditions Precedent: As
conditions precedent to all of Distributor’s obligations
hereunder.
| (a)
Chain of Title: Company shall submit to Distributor the chain of title
for the Picture in form and substance to the satisfaction of Distributor
including, without limitation, a current copyright report and current title
report and opinion (i.e., both reports to be dated within three (3) months of
the Delivery Date [as defined below]) indicating that the title is clear for
use. |
| (b)
Documentation of Ownership: Company shall submit documentation of
ownership interest and/or ability to enter into a binding agreement with
Distributor. |
| | (c)
Executed Originals: Company shall deliver to Distributor signed originals
of this Agreement, an executed and notarized Short Form Assignment of Rights,
laboratory access letter(s) with inventory list(s) for all film, video and sound
elements (as applicable), an executed and notarized Mortgage of Copyright, a
completed IRS Form W-9 (Request for Taxpayer Identification Number) and such
other documentation reasonably required by Distributor. |
| | (d)
Insurance: Company shall, at its own expense secure and maintain
producer’s liability (errors and omissions) insurance in the minimum amount
of US$3,000,000 per claim and US$5,000,000 in the aggregate with a deductible no
greater then US$25,000 (with the limited exceptions as provided below) with
respect to the Picture and for a term of not less than three (3) years.
Distributor hereby acknowledges that the three (3) year term of the errors and
omissions policy commenced prior to Delivery. Company shall supply to
Distributor a certificate of such insurance, in a form satisfactory to
Distributor and satisfactory evidence of payment in full of all premiums
therefor. Such certificate of insurance shall provide that such insurance (i)
cannot be modified, terminated or canceled by the carrier without it first
notifying Distributor in writing of such event, (ii) is not subject to any
non-standard exclusions from, restrictions of or limitations in coverage or any
material difference is deductibles as then standard in the industry, and (iii)
includes coverage of film clips, music and title of the Picture. Such policy
shall name as additional insureds Distributor, its parent, subsidiaries,
franchisees and affiliated companies, successors, and assigns and the respective
officers, directors, agents, employees end licensees of any and all of the
foregoing and shall contain an endorsement that negates the “other
insurance” clause in the policy and a statement that the insurance being
provided is primary and that any errors and omissions insurance carried by
Distributor or any other person or entity (other than Company) is neither
primary nor contributing. In the event Company does not timely supply to
Distributor such certificate of insurance after Distributor’s demand
therefor, Distributor shall have the right (without limiting any of its rights
and remedies), acting in its discretion, to secure such insurance on behalf of
Company and credit the premium payments therefor against the amount of the
Compensation (as defined below) and any other amounts otherwise payable
hereunder to Company and to invoice Company for excess amounts remaining (if
any) after so crediting the cost of the premium payments against the amounts
otherwise payable to Company hereunder. Notwithstanding the foregoing,
Distributor acknowledges that the deductible for any claims related to: (a) ▇▇▇▇
▇▇▇▇▇ or her heirs, successors or assigns and (b) with regard to a title claim
regarding the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1995 film entitled “Il Monstro” and the
Pixar/Disney 2001 film entitled “Monsters, Inc.” have deductibles of
(y) Fifty Thousand Dollars (US$50,000) and (z) One Hundred Thousand Dollars
(US$100,000) respectively. Nothing herein is intended to in any way limit or
restrict Distributor’s rights of indemnity hereunder pursuant to Paragraph
16(a) below (including with respect to the increased deductible). |
| | (e)
Delivery: Full and complete delivery of all delivery items as set forth
in the Distributor’s delivery schedule (the “Delivery Schedule”),
attached hereto as Exhibit “DS” and made a part hereof by this
reference (“Delivery”). |
| | (f)
Non-Disturbance Agreement: Company shall deliver to Distributor a fully
executed Non-Disturbance Agreement from the financial institution leading
against the Picture or Agreement (“Lender”), in form and substance
reasonably acceptable to Distributor (attached hereto as Exhibit “ND”
and made a part hereof by this reference is a form of such Non-Disturbance
Agreement acceptable to Distributor), confirming that upon full payment of the
Acquisition Price (as defined below), Lender shall not exercise its security
interest in the Picture so as to affect Distributor’s exploitation of any
of the rights acquired by Distributor hereunder. |
| | (g)
Third Party Agreements: Company shall deliver to Distributor fully
executed copies of (i) the AFMA International Multiple ▇▇▇▇▇▇ ▇▇▇▇ Memo between
MDP World Wide Entertainment, Inc. (“MDP”) and Remstar Distribution,
Inc. (“Remstar”), dated October 24, 2003 (the “Remstar
Agreement”) (ii) the Theatrical Distribution Agreement between MDP and NM
Filmco, LLC (“NMF”), dated as of October 1, 2003 (the “US
Theatrical Distribution Agreement”), a copy of which Distributor
acknowledges receiving; (iii) the relevant portions of the agreement between MDP
and In-Focus Entertainment (“Airline Distributor”), dated December 24,
2002, with respect to distribution of the Picture to airline and military bases
(the “Airline Agreement”) (which shall include any provisions related
to the allocation of funds between the Picture and any other motion picture);
and (iv) the relevant portions of the agreement between MDP and Sea Movies, Inc.
(the “Ship Distribution”) dated June 24, 2003, with respect to the
distribution of the Picture to ships and ARAMCO compounds (the “Ship
Agreement”) (which shall include any provisions related to the allocation
of funds between the Picture and any other motion picture). Neither Company nor
MDP shall modify these agreements to the detriment of Distributor without
Distributor’s prior written approval. |
| | (h)
Assignment of Remstar Agreement: Promptly following the execution of this
Agreement, Company and Distributor shall meter into an Assignment Agreement with
Remstar, on terms reasonably acceptable to all parties, whereby the Remstar
Agreement is assigned to Distributor, provided, however, Company’s share of
payments under the Remstar Agreement shall be paid by ▇▇▇▇▇▇▇ directly to
Company and Company shall be given a direct audit right by Remstar. |
2.
Territory:
| | (a)
Definition: “Territory” means |
| | (i)
the entire territorial United States of America
and each of its possessions, provinces, trusteeships, territories and
commonwealths, including, without limitation, the District of Columbia, U.S.
Virgin Islands, Puerto Rico, Guam, Wake Island Saipan, American Samoa, ▇▇▇▇▇▇▇▇
Islands, Nassau and Bahamas, Bermuda; |
| | (ii)
the entire territorial Canada and each of its possessions, provinces,
trusteeships, territories and commonwealths; |
| | (iii)
the entire territorial United Kingdom of Great Britain and Northern Ireland and
each of its possessions, provinces, trusteeships, territories and commonwealths,
including, without limitation, the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ and
Malta; |
| | (iv)
the entire territorial Republic of Ireland and each of its possessions,
provinces, trusteeships, territories and commonwealths; |
| | (v)
the entire territorial Australia and each of its possessions, provinces,
trusteeships, territories and commonwealths, including, without limitation,
Admiralty Island, ▇▇▇▇▇▇▇ Islands, Christmas Islands; Nauru, New Britain, New
Caledonia, Now Hebrides, New Ireland, Norfolk Island, Papua New Guinea, Solomon
Islands (including Bougainville), and Vanuatu including ▇▇▇▇▇▇▇ and Cartier
Island, Cocos (Keeling) Island, Coral Sea Island, Heard Island, and ▇▇▇▇▇▇▇▇
Island; and |
| | (vi)
the entire territories New Zealand and each of its possessions, provinces,
trusteeships, territorial and commonwealths including, without limitation,
Bounty Islands, Chatham Islands, Kermadec Islands, Niue, ▇▇▇▇ Islands, Fiji,
Fijian islands, Kiribatu (formerly the ▇▇▇▇▇▇▇ Islands), Mariana Islands,
▇▇▇▇▇▇▇▇ Islands, Phoenix Islands, Rarotonga, Samoan Islands (excluding American
Samoa), Tokelau Islands, Tuvalu (formerly Ellice Island) and Tonga. |
| | (b) The territories as
described in subparagraphs 2(a)(i) through and including (vi) shall be
collectively referred to herein as “Territory”. |
| | (c)
In addition, the Territory shall also include: Airlines and Ships (as defined
below); all military bases, military vessels, other national or governmental
installations as well as oil rigs and maritime facilities (and other commercial
and/or industrial installations), wherever any of the aforementioned,
installations, and/or transportation devices are located in the Territory.
Notwithstanding the foregoing, Distributor's Airline and Ship rights are subject to the Airline
Agreement and the Ship Agreement. |
| | (i)
Airlines: “Airlines” means exploitation by direct exhibition
of the Picture in airplanes, wherever located, which are operated by companies
flying the flag of any country within the Territory, but excluding airplanes
which are customarily licensed from a location outside the Territory or which
are only serviced in, but do not fly a flag of any country in the Territory. |
| | (ii)
Ships: “Ships” means
exploitation by direct exhibition of the Picture in ocean going vessels that are
principally serviced from countries in the Territory. |
| | (d)
Mexico Holdback: Company shall not release or authorize the release
and/or distribution of the Picture anywhere in Mexico prior to the earlier of
(i) the date Distributor releases the Picture in the applicable medium (i.e.,
videograms to videograms, pay TV to pay TV) in the United States of America or
(ii) the later of: (y) nine (9) months after complete Delivery of the Picture to
Distributor or (z) nine (9) months after the theatrical release of the Picture
in the United States. |
| | (e)
Canada Holdback: With use limited exception of theatrical exploitation,
Company shall not release or authorize the release and/or distribution of the
Picture anywhere in Canada for Television Exploitation (as defined blow) earlier
than the release of the Picture in the United States in each respective form of
Television Exploitation (i.e., pay-per-view, pay television, free television,
etc.). Distributor shall not release the Picture in Canada for Video
Exploitation (as defined below) prior to June 15, 2004. |
3.
Term:
| | (a)
Term of the Agreement: The term of this Agreement (the “Term”)
commences on the Effective Date and continues for twenty (20) years from the
earlier of: (i) date of the initial release of the Picture by Distributor
anywhere in the Territory or (ii) the later of: (y) nine (9) months after
complete delivery of the Picture to Distributor or (z) nine (9) months after the
theatrical release of the Picture in the United States. |
| | (b)
First and Last Negotiation Right for Extension of Term: Provided that Company
has obtained the rights to the Picture beyond the Term of this Agreement,
Distributor and Company shall negotiate with one another for a period of sixty
(60) days commencing one (1) year prior to the conclusion of the Term with
respect to as extension of the Term of this Agreement. In no event shall Company
negotiate with any third party with respect to the Picture prior to or during
such sixty (60) day period. If the parties are unable to reach a final agreement
during such period, then Company shall submit to Distributor, on the last day of
such period, its final offer in writing (the “Offer”). Distributor
then shall have twenty (20) business days to accept or reject the Offer. If
Distributor fails to accept the Offer, Company may enter into negotiation with
third parties with respect to the Picture. In the event that Company reaches a
tentative agreement pertaining to the Picture with a third ▇▇▇▇▇ on objective
financial terms (putting aside any non-financial terms) less favorable to
Company than those contained in the Offer, then Distributor shall have a right
of first refusal, exercisable within ton (10) business days following receipt by
Distributor of written notice detailing the financial terms of the tentative
third-party agreement, as to any such agreement which Company intends to accept.
It is understood that Distributor shall be required to meet only those terms
contained in the tentative third party agreement which are objective financial
terms. If Distributor does not meet such teams, Company will not enter into an
agreement with such third party on financial terms less favorable to it than
those contained in the notice of the tentative third-party agreement without
again affording Distributor a right of first refusal as above provided. |
4.
Picture Elements: Company shall deliver the completed Picture to
Distributor: (a) in accordance with the Delivery Schedule on or before the
Delivery Date (as defined below); (b) with a running time of approximately
110 minutes including end credits (such running time hereby approved by
Distributor); (c) in the English language; (d) in color, (e) in 35mm with an
aspect ratio suitable for first class distribution; (f) starring ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and (g) with a rating from the MPAA no more restrictive
than “R”.
5.
Compensation: Distributor shall pay Company as follows:
| (a)
Acquisition Price: Distributor shall pay to Company an amount equal to Four
Million Five Hundred Thousand Dollars (i.e., US$4,500,000.00) (“Acquisition
Price”) payable as follows: |
| | (i)
Twenty percent (20%) (i.e., US$900,000.00) payable within thirty (30) days of
full and complete satisfaction of all conditions precedent set forth in
Paragraph 1 of this Agreement; |
| | (ii)
Twenty percent (20%) (i.e., US$900,000.00) payable within thirty (30) days of
the initial theatrical release of the Picture in the United States of America;
but in no event earlier than the date the initial payment set forth in Paragraph
5(a)(i) above was due; and |
| | (iii)
Sixty Percent (60%) (i.e., US$2,700,000.00) payable on the earlier of
(A) thirty (30) days after the date of Distributor’s initial
exploitation of the Picture anywhere in the Territory, and (B) nine (9) months
after the date of full and complete satisfaction of all conditions precedent set
forth in Paragraph 1 above, but in no event earlier than the due date for the
payments as set forth in Paragraph 5(a)(i) and (u) above. |
| (b)
Distributor’s Contribution to Award Compensation: |
| | (1)
If ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ wins the 2004 ACADEMYAWARD ® for Best Actress for the
Picture, Distributor will, within ten (10) business days from the date of the
announcement of the 2004 ACADEMY AWARD ® for Best Actress, pay to Company an
amount equal to fifty percent (50%) of any amount contractually due to ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ not to exceed One Hundred Seventy-five Thousand Dollars (i.e.,
US$175,000.00) with respect thereto, not of any and all contributions paid
by any third party, including, but not limited to Remstar and/or NMF; and |
| | (ii)
If ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ wins the 2004 GOLDEN GLOBE ® Award for Best Actress for
the Picture, Distributor will, within ten (10) business days from the date of
the announcement of the 2004 GOLDEN GLOBE ® Award for Best Actress, pay to
Company an amount equal to fifty percent (50%) of any amount contractually due
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ not to exceed One Hundred Twenty-five Thousand Dollars (i.e.,
US$125,000.00) with respect thereto, net of any and all contributions paid by
any third party, including, but not limited to, Remstar and/or NMF. |
| | (iii)
Each payment described more fully above in subparagraphs 5(b)(i) and (ii) shall
be collectively referred to herein as “Award Compensation”. The Award
Compensation shall be fully recoupable by Distributor pursuant to Paragraph
6(a)(iv) below. |
| (c)
Compensation: Collectively, the Acquisition Price, Award Compensation,
and Company’s Share of Gross Receipts (as defined below) may hereafter be
referred to as the “Compensation.” |
| (d)
Theron Agreement: Upon execution of this Agreement, Company shall provide
Distributor with a copy of the acting agreement with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with
respect to the Picture. |
6.
Distributor Gross Receipts; Accounting Statements; Company’s TV
Recoupment Payment; Airlines/Ships.
|
(a) Distributor
Gross Receipts: Unless otherwise set forth herein, any and all gross
receipts actually received by Distributor in U.S. Dollars derived from
the exploitation of any and all of the Acquired Rights (as defined below) in the
Territory (“Distributor Gross Receipts”) shall be paid as follows: |
|
(i) Distribution Fee: Distributor shall
first retain amounts equal to: |
|
(A) Thirty-five percent (35%) of all Distributor
Gross Receipts derived from Blockbuster Exploitation (as defined in Paragraph
7(d) below); and |
|
(B) Twenty-five percent (25%) of all Distributor
Gross Receipts derived from any and all exploitation of the Acquired Rights with
the exception of Blockbuster Exploitation; then |
| (ii) Recoupment of Distribution Costs:
Distributor shall retain one hundred percent (100%) of any and all Distributor
Gross Receipts until Distributor has recouped, if ever, any and all actual
and/or incurred costs of every kind and nature relating to the distribution and
exploitation of the Picture by Distributor hereunder, (“Distribution
Costs”) (nothing herein shall entitle Distributor to recoup Distributor
salary and/or overhead or allocate any portion of Distributor salary/or overhead
provided, however, if Distributor uses any internal production facility as a
supplier, Distributor will, for the purposes of recoupment, calculate the cost
of such service on supply expense at the price listed on the then-current price
list maintained by the production facility provided that such cost is equivalent
to or less than what Distributor would have had to pay if Distributor had used
an outside production supplier). For the purposes of recoupment hereunder,
Distribution Costs shall include any unrecouped Distributor P&A, and
Company’s TV Recoupment Payment (all as defined below); then |
| (iii)
Recoupment of Interest on Acquisition Price and/or Award Compensation:
Distributor shall recoup “Interest” on its Acquisition Price and Award
Compensation. “Interest” means a rate per annum which is one hundred
twenty-five percent (125%) of the prime rate being charged by Distributor’s
principal bank, as it may vary from time to time; such Interest commencing from
respective dates on which the Acquisition Price and Award Compensation (or
installments thereof) are paid and continuing until the mid-point of an
accounting period with respect to which said amounts are recouped as herein
provided; and |
| (iv) Recoupment of Acquisition
Price and/or Award Compensation: Distributor shall recoup one hundred
percent (100%) of the aggregate sum of the Acquisition Price and the Award
Compensation; then |
| (v) Company’s Share of Gross
Receipts: The balance of Distributor Gross Receipts, if any, shall be split
and paid sixty-five percent (65%) to Company (“Company’s Share of
Gross Receipts”) and thirty-five percent (35%) to Distributor. |
|
(b) Accounting Statements for Distributor Gross
Receipts: |
| (i)
Accounting Statements: Distributor shall provide Company with written
accounting statements regarding Distributor Gross Receipts in the Acquired
Rights and with respect to Non-Theatrical revenues as follows (“Distributor
Accounting Statements”): |
| (A) the first report shall be
generated by Distributor and delivered to Company no later than forty-five (45)
days following the first accounting calendar quarter in which Distributor is in
receipt of Distributor Gross Receipts; |
| (B)
the next report(s) shall be generated by Distributor forty-five (45) days
following each accounting calendar quarter thereafter for the first forty-eight
(48) months following the date of the first report; and thereafter |
| (C)
all reports shall be generated by Distributor forty-five (45) days following the
end of the calendar year during any year in which Distributor has received
Distributor Gross Receipts or Non-Theatrical revenues hereunder, for the
duration of the Term. As applicable, Distributor shall reach payments, if any,
duo to Company with the respective report. |
| (D) All reports received by
Distributor from the Non-Theatrical distributor of the Picture shall be copied
and forwarded to Company along with the applicable Distributor Accounting
Statements. |
| | (ii)
Company Audit of Distributor Gross Receipts: Distributor shall maintain
accurate and complete books and records, which shall reflect all Distributor
Gross Receipts and Non-Theatrical revenues and the deductions (i.e.,
Distribution Costs, as applicable) made pursuant to this Agreement. Company shall
have the right upon thirty (30) days prior written notice to audit
Distributor’s books and records with regard to Distributor Gross Receipts
or Non-Theatrical revenues derived from exploitation of the Acquired Rights of
the Picture in the Territory and/or the Distributor Accounting Statements
supplied to Company hereunder one (1) time per calendar year during the Term of
this Agreement and continuing for six (6) months following the date of
Company’s receipt of the later of the last payment or the last Distributor
Accounting Statement (“Company Audit”). Each such Company Audit shall
be subject to the following: |
| (D)
Commencement/Duration: Such Company Audit shall (1) commence no earlier
than thirty (30) days following receipt by Distributor of written notice, and
(2) not continue for more than 30 consecutive business days or forty-five (45)
business days in total unless Company’s Audit cannot be completed within
such time parameters as a result of unavailability of Distributor’s
business records or Distributor’s delay. |
| (B)
Company Auditor: Such Company Audit shall be performed by a first-class
and reputable firm of certified public accountants that specializes in
entertainment industry auditing designated by Company in such written notice,
the designation of which shall be subject to the approval of Distributor, which
will not be arbitrarily withheld (“Company Auditor”). |
| (c)
Company Audit Limitations: Such Company Audit shall be limited to an
examination of the books of account which relate to the Distributor Gross
Receipts and/or Non-Theatrical revenues derived from and Distribution Costs
incurred in the exploitation of any and all of the Acquired Rights of the
Picture during the Term and in the Territory in order to verify the accuracy or
the transactions or items of information (“Distributor Financial
Information”) as first reflected in any Distributor Accounting Statement
received by Company, the date of which occurred during the 18 month period prior
to the statement under audit. The Company Auditor may make copies of or make
excerpts from only such part of the Distributor books of account which relate to
the Distributor Financial Information during the time frame subject to
examination as herein provided. Such Company Audit shall be made during
reasonable business hours, Monday through Friday, only at such place where said
Distributor books of account are maintained, in such manner as not to
unreasonably interfere with Distributor’s normal business activities. The
records supporting the Distributor Financial Information reflected in the
particular Distributor Accounting Statement shall not be examined more than once
except that such records may be examined again is connection with the Company
Audit of another Distributor Accounting Statement to which they pertain. A true
copy of all reports made by the Company Auditor shall be delivered to
Distributor at such time as written objection is delivered to Distributor as to
the Distributor Financial Information. Such right to examine is limited to the
exploitation of the Acquired Rights of the Picture during the Term and under no
circumstances shall Company or the Company Auditor have the right to examine
records relating to Distributor’s business generally or with respect to any
other Picture receipts or any other producer or picture for purposes of
comparison or otherwise. Any Company Audit conducted by company shall be at
Company’s sole cost and expense. Company agrees that the data and other
information collected by Company may be used by Company only in connection with
such Company Audits and to fulfill Company’s commitments under this
Agreement and such information shall be deemed confidential to Distributor and
subject to the protections afforded in Paragraph 32 below. |
| (D) Incontestability: All
Distributor Financial Information reflected in a Distributor Accounting
Statement rendered to Company, including any and all information contained in
the Distributor books of account and Distributor records and all supporting
documentation therein (collectively, “Picture Records”) shall be
conclusive and binding upon Company and Company shall forever be barred from
objecting for any reason or maintaining or instituting any action or proceeding
which relates to any transactions or questions of accuracy of any item of
information reflected therein, including any and all information contained in
the Print Records which pertain in any way to said Distributor Financial
Information, unless a written objection specifying in detail the Distributor
Financial Information to which Company objects and the nature and reasons for
such objection is delivered to Distributor within 24 months from the date of
Company’s receipt of the Distributor Accounting Statement in which the
Distributor Financial Information is first reflected irrespective of when or if
an audit of such Distributor Accounting Statement was initiated or completed.
Distributor Financial Information not specified in such written objection may
not be raised subsequent to the expiration of said 24 month period. If
Company’s objections are not resolved amicably, Company’s objections
shall be deemed to have been waived unless Company maintains or institutes an
action or proceeding with respect thereto within twenty-four (24) months after
the expiration of said 24 month period. The inclusion in any Distributor
Accounting Statement of Distributor Financial Information which have appeared in
a previous Distributor Accounting Statement shall not make any such Distributor
Financial Information, including any and all information contained in the
Picture Records which in any way pertain to such Distributor Financial
Information, subject to objection again nor recommence the running of the
twenty-four (24) month period as to such Distributor Financial Information or
any and all information contained in the Picture Records which in any pertain to
such Distribution Financial Information. The cost of such an audit performed by
or on behalf of Company shall be solely at the expense of Company other than
where the audit discloses an underpayment to Company of the greater of:
(i) seven percent (7%) or more of the statements being audited or
(ii) Ten Thousand Dollars ($10,000), in which case the reasonable costs of
the audit shall be paid by Distributor. |
|
(c) Company’s TV Recoupment Payment: |
| (i)
Notwithstanding any other provision in this Agreement, if Company (or any third
party print and advertising funder [the “Third Party P&A Funder”])
has not fully recouped any portion of the actual out-of-pocket, third party
expenses paid by it towards print and advertising costs for the theatrical
release of the Picture (the “Company/Third Party P&A Funder P&A
Expense”) after crediting any payments theretofore made by Company pursuant
to paragraph 6(a)(v) against these amounts and/or Distributor has not fully
recouped any portion of Distributor P&A (as defined below) after crediting
any payments theretofore retained by Distributor pursuant to paragraph 6(a)(v)
against these amounts, then Company or the Third Party P&A Funder, as
applicable, and Distributor shall be entitled to recoup in proportion their
respective unrecouped balances from any amounts actually received by Distributor
from the television licensing of the Picture in the United States of America
(“US TV License”) an amount which is the greater of either:
(A) the pay television license fee actually received by Distributor for the
first pay television license for the Picture, or (B) the basic cable television license fee
actually received by Distributor for first basic cable television license for
the Picture. Any payments made to Company or the Third Party P&A Funder
pursuant to this subparagraph 6(c)(i) shall hereinafter be referred to as
“Company’s TV Recoupment Payment”. |
| (ii)
Distributor shall provide to Company copies of the relevant portions of US TV
License agreements to the extent they relate to the Picture (which shall include
any provisions related to allocations of funds between the Picture and any other
motion picture). Company’s TV Recoupment Payment shall be due and payable
to Company no later than ten (10) business days after Distributor’s receipt
of the television license fee from the first US TV License, with adjustments
thereto no later than ten (10) business days after Distributor’s receipt of the
television license fee from the second US TV License, should the second US TV
License prove to be greater than the first. Company’s TV Recoupment
Payments made under this Paragraph 6(c) shall be fully recoupable by Distributor
under Paragraph 6(a)(ii) as a Distribution Cost. The gross license fee received
by Distributor pursuant to any television license agreement under this
subparagraph shall be included in Distributor’s Gross Receipts exclusive of
any amounts paid to Distributor pursuant to paragraph 6(c)(i) above.
|
|
(d) Airline and
Ship Agreements: Any and all revenues payable pursuant to the Airline
Agreement and the Ship Agreement shall be paid to Company and Company shall pay
fifty percent (50%) thereof to Distributor, without offset or deduction of any
kind, in accordance with the accounting provisions set forth in Paragraph 9(h)
below. Any funds received by the Distributor pursuant to this Paragraph 6(d)
shall not be included in Distributor’s Gross Receipts. |
7.
Grant of Rights:
|
(i) Commencing on the Effective Date
and continuing throughout the Term, Company hereby irrevocably and exclusively
grants, licenses, assigns and conveys (including by way of present assignment of
future copyright) to Distributor the following rights in and to the Picture and
the literary material or other material on which it is based, during the Term
and in the Territory including, unless otherwise expressly specified herein, the
exclusive right, license and privilage under copyright, including all extensions and renewals of copyright, to
distribute, exhibit, market, reissue, advertise, publicize, promote and
otherwise exploit, whether directly or through sublicenses and/or
subdistributors, the Picture, trailers (including, without limitation,
“music videos”) and all literary, music and other material embodied in
the Picture, in the following media, in all versions and all languages, by any
and every means, methods, forms and processes and devices, now known or
hereafter devised, which media shall include, theatrical (with the limited
exception of the United States of America and Canada), non-theatrical
(including, without limitation, Airlines/Ship [subject to the Airline Agreement
and Ship Agreement], oil rigs, 16mm, armed services, educational, industrial and
institutional facilities), all forms of television (including, without
limitation, pay-per-view, pay, cable, network, syndication, direct broadcast
satellite, digital, high definition, closed circuit, subscription and free);
video on demand and near video-on-demand; all forms of digital distribution
and/or transmission, CD-Roms, fiber optic or other exhibition, broadcast and/or
delivery systems; digital, multimedia, internet, witness and/or interactive
exploitation and distribution; “Video Exploitation” (as defined
below), and the rights to use and perform all sound and music synchronized
therewith. Company also assigns to Distributor, for the Territory, Acquired
Rights and the Term, all of Company’s rights, if any, to authorize,
prohibit and/or control the renting, lending, fixation, reproduction,
importation and/or other exploitation of the Picture by any media and/or means,
now or hereafter known or devised, as may be conferred upon Company under
applicable laws, regulations or directives, including, without limitation, any
so-called “Rental and Lending Rights” pursuant to any treaty, European
Union (“EU”) directives and/or enabling or implementing legislation,
or any law or regulation enacted by the member nations of the EU or any other
jurisdiction and all such other incidental and ancillary rights as set forth
herein; and |
|
(ii) Theatrical Rights: Commencing on the
expiration of the US Theatrical Distribution Agreement, and continuing
throughout the Term, Company irrevocably and exclusively grants, licenses,
assigns and conveys (including by way of present assignment of future copyright)
to Distributor the theatrical rights in and to the Picture in the United States of
America. |
|
(iii) Remstar: Upon the expiration of the
Remstar Agreement, all rights granted to Remstar shall automatically vest in the
Distributor for the remainder of the Term. |
|
(iv) Airline/Ships: Upon expiration of the
Airline Agreement and the Ship Agreement, as applicable, all rights granted to
Airline Distributor and the ship Distributor, respectively, with respect to the
Picture shall automatically vest in Distributor for the remainder of the
Term. |
|
(v) Acquired Rights:
Collectively, the rights in and to the Picture granted to Distributor in
Paragraphs 7(a)(i) through and including (iv) shall hereinafter be referred to
as the “Acquired Rights”.
|
(b) Definition of Video Exploitation: As
used herein, “Video Exploitation” means exploitation of the Acquired
Rights by sale, license, lease or otherwise by all means of videograms
(including, without limitation, video cassettes, laser discs, CD-rom, video CD,
DVD, DIVX, HD DVD and any other similar device, now known or hereafter developed,
embodying the Picture, as those terms are commonly understood in the
entertainment industry).
(c)
Waiver of Droit Moral: Company hereby waives the benefits of any
provision of law known as “droit moral” or any similar law which
Company may have in any country o£ the world and Company agrees that
Company will not institute, support, maintain, authorize or consent to any
action or lawsuit on the ground that the picture or any version of the Picture
in any way constitutes an infringement of Company’s “droit
moral”.
(d)
Blockbuster Exploitation: As used herein, “Blockbuster
Exploitation” means the Video Exploitation of the Picture through, any and
all retail outlets owned and/or operated by Blockbuster Inc., its affiliates,
subsidiaries, franchisees or licensees in the Territory at any time during the
Term of the Agreement.
(e)
Video and DVD Distribution Commitment: Distributor shall use commercially
reasonable efforts to cause an average minimum of thirty (30) videograms (which
maybe comprised of videocassettes, DVD or other formats at Distributor’s
sole discretion) to be available for rental or sale on or about the
Picture’s initial date of release by Distributor for Videogram Exploitation
in the United States (that date to be determined by Distributor in its sole
discretion) in BLOCKBUSTER® stores owned and operated by Blockbuster Inc. in
the forty-eight (48) continental United States (subject to the sale or closing
of any such locations during the Term of this Agreement).
(f)
Television Exploitation: As used herein, “Television
Exploitation” means any form of television broadcast (residential and/or
non-residential) as commonly understood in the industry, whether by methods now
known or hereafter devised, including, without limitation pay-per-view
(including hotel and motel exploitation), subscription-video-on-demand (SVOD) by
a pay television provider pursuant to a standard pay television license
agreement, entered into by Distributor and a third party pay television
provider, in which the definition of ‘non-standard television’ includes
SVOD, digital television, high-definition television, pay television, basic
cable television and free television by any and every means, methods, forms and
processes and devices for exhibition of audiovisual programming over distance
for display as a television receiver or other form of display device, now known
or hereafter devised, including but not limited to cable, wire, fiber, all forms
of electronic transmission, television broadcast exhibition via the internet and
any frequency band. For clarification purposes, “Television
Exploitation” does not include any form of video-on-demand regardless of
the medium used to exhibit the Picture (e.g. internet, television, computer,
etc.) of any subscription-video-on-demand other than the limited exception of
subscription-video-on-demand exploited by a pay television provider that
Distributor has licensed pay television rights in the Picture.
(g)
Non Theatrical Exploitation: As used herein, “Non-Theatrical”
means exploitation of the Picture by direct exhibition before an audience at
facilities or organizations not primarily engaged in the business of exhibiting
motion pictures. For the purposes of this Agreement, Non-Theatrical specifically
includes all universities and colleges, military bases, military vessels, other
national or governmental installations as well as oil rigs and maritime
facilities (and other commercial and/or industrial installations), wherever any
of the aforementioned, installations, and/or transportation devices are located
in the Territory. For the purpose of clarification only, Non Theatrical shall
not include hotel and motel exploitation.
(h)
Company’s Reserved Rights: Company hereby specifically reserves all
rights in and to the Picture and the literary material or other materials on
which it is based other than the Acquired Rights, which reserved rights shall
include without limitation merchandising, book publication, theme park,
soundtrack phonorecord and music publishing, remake, prequel, sequel,
television production, animated productions and any other subsequent production
rights, including live stage rights and all such other rights of any kind or
nature not specifically granted to Distributor pursuant to this Agreement
(collectively the “Company’s Reserved Rights”).
(i)
Remake Rights: Provided that Company has obtained the remake, sequel, or
other production rights in the Picture, then with respect to remake, prequel,
sequel rights, television production, animated productions and any other
subsequent production rights, including live stage rights (collectively, the
“Remake Rights”), such Remake Rights shall be subject to
Distributor’s right of first negotiation /last refusal as outlined below:
| (1)
Right of first negotiation/last refusal: If Company proposes to exploit,
sell or otherwise dispose of any of its Remake Rights in the Picture during the
Term, Company shall so notify Distributor in writing, providing Distributor with
a screenplay of the proposed production along with a budget, director and other
proposed principal elements (the “First Offer to Distributor”). |
|
(2) First Negotiation: Within ten (10)
business days after the receipt by Distributor of such First Offer to
Distributor from Company, Distributor shall notify Company in writing whether or
not Distributor desires to negotiate for the acquisition of any such rights,
(such notice will propose a commencement date for such negotiations) and if
Distributor does not give Company notice in writing that Distributor desires to
negotiate for said rights, Distributor shall be deemed to have elected not to
negotiate therefor. |
| (I) If Distributor elects, or is deemed to have elected, not to
negotiate for said rights, then Company shall have the right to sell or
otherwise dispose of such Remake Rights, but only to a third party who is
willing to accept the terms and conditions specified in the First Offer to
Distributor (and thereafter Distributor shall have no further right in and to
the Remake Rights granted hereunder if such sale to the third party is
consummated within ninety (90) days thereof); but if Company is willing to
accept any different terms and conditions that are less beneficial to Company
than the terms set forth is the First Offer to Distributor, or prior to closing
any such deal with a third party, there are any changed, new or additional
elements which are material, ((e.g., lead actor, a director, a material change
in story line not previously discussed) Company shall again offer the same to
Distributor in accordance with the same procedures as set forth in this
subparagraph.
(II) If Distributor shall elect to negotiate for said rights and such
negotiations shall not result in a written agreement between Company and
Distributor within a period of thirty (30) days from the commencement of such
negotiations, then Company may negotiate elsewhere for the sale or disposition
of said rights, but Distributor shall have the right to meet any written bona
fide offer (which offer includes the material terms thereof; including, without
limitation, the name of the offeror) received by Company (“Third Party
Proposal”) as follows: |
| (x) If the Third Party Proposal includes financial terms that are
equal to or greater than one hundred twelve and one-half percent (112.5%) of the
financial terms last offered by Distributor AND all other material terms of the
Third Party Proposal are the same or better terms than those included in
Distributor’s last offer, then Company shall have the right to enter into
an agreement with respect to such Remake Rights, but only to the offeror and
upon the terms and conditions specified in the Third Party Proposal.
(y) Last Refusal: If the Third Party Proposal includes (1) financial
terms that are equal to or greater than 112.5% of the financial terms last
offered by Distributor but the Third Party Proposal includes material terms or
conditions that are less advantageous to Company; (2) financial terms that are
less than 112.5% of the financial terms last offered by Distributor, or (3)
prior to the close of any third party agreement there are changed, new or
additional elements which are material to the Remake Rights (e.g., lead actor,
director, a material change in story line not previously discussed), then
Company shall first give Distributor written notice of such Third Party Proposal
with respect to such rights which Company is willing to accept and Distributor
shall have a period of ten (10) business days from receipt of such notice from
Company within which to exercise its right to meet said offer but Distributor
shall only be required to meet terms and conditions which may be met as easily
by one person as the next, which right shall be exercised by Distributor by
giving Company written notice of its election to do so. If Distributor exercises
said right to meet such offer, then Company and Distributor shall promptly sign
written agreements conveying to Distributor the rights involved upon the terms
and conditions of said offer. If Distributor fails to exercise such rights then
Distributor shall have no further rights in or to the Remake Rights granted
hereunder.
|
8.
Canada Gross Receipts and Revenue Sharing; Non-Theatrical In
U.S. and Canada:
(a)
Theatrical and Television Exploitation in Canada:
| (i)
Remstar Minimum Guarantee: The “Minimum Guarantee” (as defined
in the Remstar Agreement) shall be paid fifty percent (50%) to Company and fifty
percent (50%) to Distributor, then |
| (ii)
Remstar Overages: Any and all amounts payable under the Remstar
Agreements in addition to the Minimum Guarantee (“Remstar Overages”)
shall be paid directly to Distributor and Company based on the following
formula: the ratio between the aggregate sum of any and all gross revenue
derived under the Remstar Agreement to the gross revenue derived from (A) gross
revenue from exploitation of the theatrical rights by Remstar and (B) gross
revenue from exploitation of the television rights by Remstar. Company shall
receive an amount of the Remstar Overages equal to the ratio of the Remstar
theatrical gross receipts divided by the Remstar total gross receipts.
Distributor shall receive an amount of the Remstar Overages equal to the ratio
of the Remstar television gross receipts divided by the Remstar total gross
receipts. By way of example only, if theatrical revenue is $100,000 and
television revenue is $200,000 (an aggregate of $300,000), the Remstar Overages
would be split and paid 33.33% to Company and 66.67% to Distributor. |
| | (iii)
No funds received by DEJ pursuant to Paragraph 8(a) shall be included in
Distributor’s Cross Receipts. |
(b)
Non-Theatrical Rights in the U.S. and Canada: Any and all gross receipts
actually received by Distributor derived from the Non-Theatrical exploitation of
the Picture in the United States and Canada shall be split and paid fifty
percent (50%) to Company and fifty percent (50%) to Distributor. For purposes of
clarification, Non-Theatrical revenue in the United States and Canada shall not
be crossed with any other revenue or rights in and to the Picture nor included
in Distributor’s Gross Receipts. Distributor shall provide to Company all
portions of the non-theatrical agreements that relate to the Picture and copies
of their related accounting statements.
9.
Company’s Theatrical Release and P&A:
(a)
Company’s Theatrical Release Requirement: Unless agreed to otherwise
by the parties in writing, Company shall release or cause the release of
the Picture theatrically in the United States and Canada (“Theatrical
Release”) so that Company’s Theatrical Release qualified the Picture
for consideration for a nomination for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for both (i) the 2004
ACADEMY AWARD ® for Best Actress for the Picture (with respect to motion
pictures released in the calendar year 2003) and (ii) the 2004 GOLDEN GLOBE
® Award for Best Actress for the Picture (with respect to motion pictures
released in the calendar year 2003).
(b)
Distributor’s Right of Consultation: Distributor has the right of
full and meaningful consultation with regard to all aspects of the Theatrical
Release, including, but not limited to the theatrical release strategy and
pattern, any and all aspects of advertising, marketing and publicity
(“P&A”) relating to the Theatrical Release of the Picture, and the
engagement of any third party theatrical distributor (“Theatrical
Distributor”); provided, however, at such time that Distributor has paid to
Company the Distributor P&A contribution pursuant to Paragraph 9(f) below,
Distributor and company shall have prior, written approval rights with regard
the continued theatrical release strategy and pattern, any and all aspects of
advertising, marketing, and publicity relating to the Theatrical Release
including but not limited to any additional expenditures of P&A by Company;
provided however, that in the event that Distributor and Company cannot reach
agreement on such matters, then Distributor and Company hereby designate ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ to decide such matters by adopting, in whole, either
the position taken by Distributor or by Company. In the event that Distributor is
unavailable to respond to requests (giving Distributor time to do so in good
faith based on the exigencies of the distribution of the Picture), Company alone
may decide such matters.
(c)
Theatrical Marketing Commitment: Company and/or the Third Party P&A
Funder shall spend not less than Two Million Five Hundred Thousand Dollars
(i.e., US$2,500,000.00) for theatrical prints and advertising for the Picture
(“P &A Commitment”) in the United States of America. Company shall
spend not less than Five Hundred Thousand Dollars (i.e., US$500,000.00) of the
P&A Commitment solely for an ACADEMY AWARD ® campaign for a Best Actress
nomination for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (“Campaign Commitment’). Distributor
acknowledges that Two Hundred Fifty Thousand Dollars (US$250,000.00) of the
P&A Commitment shall be paid to NMF as an advance against fees payable to
NMF pursuant to the US Theatrical Distribution Agreement (the “NMF Fee
Advance”):
| | (i)
Notwithstanding the foregoing, Company and the Third Party P&A Funder shall
have the right to reduce the P&A Commitment; provided, however, in no event
shall (A) the total P&A Commitment be less than One Million Dollars (i.e.,
US$1,000,000.00) and (B) the Campaign Commitment be less than Five Hundred
Thousand Dollars (i.e., US$500,000.00) (e.g., for a total P&A Commitment of
One Million Five Hundred Thousand Dollars ($1,500,000.00)]. |
| | (ii)
For every dollar that the P&A Commitment is reduced (“Reduced P&A
Amount”), the Acquisition Price payable under Paragraph 5 above shall be
reduced by an amount equal to fifty percent (50%) of the Reduced P&A Amount.
By way of example only, if the P&A Commitment is reduced by $500,000, than
the Acquisition Price would be reduced by $250,000. |
(d)
Verification of Company P&A: In addition to Distributor’s audit
rights and Theatrical Accounting Statements as provided in Paragraph 9(h),
Company shall provide (and Company shall use best efforts to require NMF to
provide) to Distributor, upon Distributor’s request, verifiable invoices
and other documentation as to bona fide expenditures of actual third party
out-of-pocket costs incurred by Company or NMF, in the promotion, marketing and
exhibition (including prints and advertising) of the Theatrical Release.
(e)
In no event shall the Theatrical Release restrict Distributor’s right
and/or ability to exploit any Acquired Rights.
(f)
Distributor P&A Contribution: In the event that event that
(i) Distributor has approved the escrow instructions for the collection
account with respect to the U.S. theatrical release of the Picture by NMF as
such terms apply to the distributions to Distributor in accordance with
subparagraph (g) below, (ii) Cherlize Theron receives a 2004 GOLDEN GLOBE ®
Nomination for Best Actress for the Picture and (iii) Company (or the Third
Party P&A Funder) has spent at least Three Million Dollars (US$3,000,000) in
print and advertising costs for the Picture in the United States and Canada
pursuant to this Paragraph 9, then Distributor shall pay to NMF, within ten (10)
days of such nomination and reasonable satisfaction that the funds have been
spent, One Million Dollars (i.e., US$1,000,000.00) (“Distributor
P&A”) to be used solely for P&A expenditures is excess of Three
Million Dollars (US$3,000,000) with respect to the theatrical release of the
Picture in the United States and Canada.
(g)
Theatrical Revenue: As between Company and Distributor, Company is solely
responsible for any and all financing and/or funding of the P&A Commitment
for the Theatrical Release. In addition, as between Company and Distributor,
Company is solely responsible for any payment of any and all residuals and third
party supplemental payments resulting from such theatrical release, if
applicable. The parties hereby acknowledge that the theatrical distributor of
the Picture in the United States is NMF.
| | (i)
“Theatrical Gross Receipts” from the theatrical release of the Picture
by NMF (which for the purposes hereof shall have the same definition “Gross
Receipts” pursuant to the US Theatrical Distribution Agreement) shall be
paid into an escrow account (with the escrow instructions to be reasonably
approved by Distributor) to which Distributor is a party and divided as follows: |
| | (A) |
Distribution Fee: A distribution fee to NMF in accordance with the US
Theatrical Distribution Agreement (as a point of clarification, the NMF Fee
Advance is technically “recouped” by Company or the Third Party
P&A Funder by virtue of the fact that NMF does not retain its fee on the
first [approximately] One Million Six Hundred Thousand Dollars ($1,600,000) of
Theatrical Gross Receipts; provided that the NMF Fee Advance shall not be deemed
“recouped” under this Agreement until Company and/or the Third Party
P&A Funder actually receives Theatrical Gross Receipts in this amount
pursuant to paragraph 9(g)(i)(B) below); then
|
| | (B) |
Third Party P&A Funder Recoupment. To the Third Party P&A Funder,
if any, one hundred percent (100%) of direct, out-of-pocket costs actually
contributed by the Third Party P&A Funder in connection with the P&A
Commitment including the NMF Fee Advance, such amount not to exceed Three
Million Dollars (as a point of clarification, there shall be no double
recoupment. If Company or Third Party P&A Funder has received any portion of
the amounts to be disbursed pursuant to this paragraph, including any amounts
recoupable by Company or the Third Party P&A Funder of the NMF Fee Advance,
then the amount shall not be disbursed again); then
|
| | (C) |
Distributor P&A Recoupment: If, pursuant to Paragraph 9(f) above,
Distributor has paid the Distributor P&A, to Distributor, one hundred
percent (100%) of the Distributor P&A (If Distributor has recouped any
portion of the amount to be recouped pursuant to this subparagraph, Distributor
shall not be entitled to recoup such amounts again); then
|
| (D) |
Company P&A Recoupment if Company Funds Part of the Initial Three Million
Dollars ($3,000,000) of the P&A Commitment: Notwithstanding Paragraph
9(g)(i)(B) and (C), if Company, or any affiliate thereof, has funded the
entirety of the first Three Million Dollars ($3,000,000) of P&A Commitment
in lieu of a Third Party P&A Funder, then in lieu of the payments set forth
in paragraph 9(g)(i)(B) and (C), Company shall recoup the P&A Commitment and
Distribution shall recoup the Distributor P&A seventy-five percent (75%) to
Company and twenty-five percent (25%) to Distributor. If Company has funded
part, but not all, of the first Three Million Dollars ($3,000,000) of the
P&A Commitment, then after payment to Third Party P&A Funder of its
portion of the first Three Million Dollars ($3,000,000) of the P&A
Commitment pursuant to paragraph 9(g)(i)(B), Distributor shall then recoup,
pursuant to paragraph 9(g)(i)(C), the equivalent percentage of its Distributor
P&A, as the percentage that the Third Party P&A Funder contributed to
the first Three Million Dollars ($3,000,000) and then any unrecouped amounts of
the Distributor P&A remaining shall be recouped with Company’s share of
the first Three Million Dollars($3,000,000) of the P&A Commitment on a pro
rata basis. If Company or Distributor has received any portion of the amounts to
be received pursuant to this subparagraph, neither Company nor Distributor, as
applicable, shall be entitled to receive such amounts again.
|
| | (E) |
Company P&A Recoupment: Company shall retain one hundred percent
(100%) of direct, out-of-pocket costs actually paid by the Company or the Third
Party P&A Funder in connection with the P&A Commitment in excess of
Three Million Dollars ($3,000,000), if any. (As a point of clarification there
shall be no double recoupment. If Company or Third Party P&A Funder has
received any portion of the amounts to be disbursed pursuant to this
subparagraph, including any amounts recoupable by Company or the Third Party
P&A Funder of the NMF Fee Advance, then the amount shall not be disbursed
again); then
|
| | (F) |
Distributor’s Share of Theatrical Gross Receipts: The balance of
Theatrical Gross Receipts, if any, shall be split and paid seventy-five percent
(75%) to Company and twenty-five (25%) to Distributor (“Distributor’s
Share of Theatrical Gross Receipts”).
|
(h)
Accounting Statements: The Gross Receipts with respect to the US
Theatrical Distribution Agreement, Airline Agreement and the Ship Agreement are
to be accounted and paid to Distributor (“Company Accounting
Statements”) as follows.
| | (1)
The first report shall be generated by Company and delivered to Distributor no
later than forty-five (45) days following the first accounting calendar quarter
in which Company is in receipt of Theatrical, Airline or Ship Gross Receipts; |
|
(2) The next report(s) shall be
generated by Company forty-five (45) days following each accounting calendar
quarter thereafter for the first forty-eight (48) months following the date of
the first report; and thereafter |
| (3)
All reports shall be generated by Company forty-five (45) days following the end
of the calendar year during any year in which Company has received Theatrical,
Airline or Ship Gross Receipts hereunder, for the duration of the Term. As
applicable, Company shall remit payments, if any, due to Company with the
respective report. |
| (4)
All reports received by Company from NMF is accordance with the US Theatrical
Distribution Agreement and from the Airline Distributor in accordance with the
Airline Agreement and from the Ship Distributor in accordance with the Ship
Agreement shall be copied and forwarded to Distributor along with the Company
Accounting Statement. |
| | (5)
Notwithstanding the foregoing, Theatrical Gross Receipts shall be paid into an
escrow account with respect to the Picture and to the extent the accounting
provisions for the escrow account differ than as set forth herein, accountings
shall be made in accordance therewith. |
| | (6)
Audit of the Gross Receipts: Company shall maintain accurate and
complete books and records, which shall reflect all Theatrical Gross Receipts
and Airlines and Ships Gross Receipts. Distributor shall have the right upon
thirty (30) days prior written notice to audit Company’s, books and records
with regard to the Gross Receipts derived from exploitation of the (i)
Theatrical Release and/or the Theatrical Accounting statements and (ii) Airlines
and/or Ships Gross Receipts and the Airlines and/or Ships Accounting Statements
supplied to Distributor hereunder one (1) time per calendar year during the Term
of this Agreement and continuing for six (6) months following the date of
Distributor’s receipt of the later of the last payment or the last
respective Accounting Statement (“Distributor Audit”). Each such
Distributor Audit shall be subject to the following: |
| (A)
Commencement/Duration: Such Distributor Audit shall (1) commence no
earlier than thirty (30) days following written notice to Company, and (2) not
continue for more than thirty (30) consecutive business days or forty-five (45)
business days in total unless Distributor’s audit cannot be completed
within such time parameters as a result of unavailability of the applicable
business records or other delay.
|
| (B)
Auditor: Such Distributor Audit shall be performed by a first-class and
reputable firm of certified public accountants designated by Distributor in such
written notice, the designation of which shall be subject to the reasonable
approval of Company (“Auditor”).
|
| (C)
Audit Limitations: Such Distributor Audit shall be limited to an
examination of the books of account which relate to the Theatrical Gross
Receipts derived the Theatrical Release and/or the Airlines and Ships Gross
Receipts during the Term in order to verify the accuracy or the transactions or
items of information including, without limitation, Theatrical Distribution
Costs and recoupment thereof, (“Company Financial Information”) as
first reflected in any Accounting Statement received by Distributor, the date of
which occurred during the twenty-four (24) month period prior to the date of
commencement of field work by the Distributor Auditor. The Distributor Auditor
may make copies of or make excerpts from only such part of the applicable
company’s books of account which relate to the Company Financial Information
during the time frame subject to examination as herein provided. Such
Distributor Audit shall be made during reasonable business hours, Monday through
Friday, only at such place where said books of account are maintained, in such
manner as not to unreasonably interfere with normal business activities. The
records supporting the Company Financial Information reflected in the particular
Company Accounting Statement shall not be examined more then once except that
such records may be examined again in connection with the Distributor Audit of
another Company Accounting Statement to which they pertain. A true copy of all
reports made by the Distributor Auditor shall be delivered to the applicable
company at such time as written objection is delivered. Distributor agrees that
the date and other information collected by Distributor may be used by
Distributor only in connection with such Distributor Audit and to fulfill
Distributor’s commitment under this Agreement and such information shall be
deemed confidential and subject to the protections afforded in Paragraph 32
below.
|
| (D)
Incontestability: All Company Financial Information reflected in a
Company Accounting Statement rendered to Distributor, including any and all
information contained in the books of account and records and all supporting
documentation therein (collectively, “Company Picture Records”) shall
be conclusive and binding upon Distributor and, with the limited exception in
cases of fraud or gross negligence, Distributor shall forever be barred from
objecting for any reason or maintaining or instituting any action or proceeding
which relates to any transactions or questions of accuracy of any item of
information reflected therein, including any and all information contained in
the Company Picture Records which pertain in any way to such Company Financial
Information, unless a written objection specifying in detail the Company
Financial Information to which Distributor objects and the nature and reasons
for such objection is delivered within twenty-four months from the date of
Distributor’s receipt of the applicable Company Accounting statement in
which the Company Financial Information is first reflected irrespective of when
or if an audit of such Company Accounting Statement was initiated or completed.
Company Financial Information not specified in such written objection may not be
raised subsequent to the expiration of said twenty-four (24) month period. If
Distributor’s objections are not resolved amicably, Distributor’s
objections shall be deemed to have been waived unless Distributor maintains or
institutes an action or proceeding with respect thereto within twenty-four (24)
months after the expiration of said twenty-four (24) month period. The cost of
such an audit performed by or on behalf of Company shall be solely at the
expense of Company other than where the audit discloses an underpayment to
Company of the greater of: (i) seven percent (7%) or more of the statements being
audited, or (ii) Ten Thousand Dollars ($10,000) in which case the reasonable
costs of the audit shall be paid by Distributor.
|
10. Boxed Video Sets: If
Distributor bundles or boxes the Picture together with any other motion picture
for retail sale, the gross receipts realized by such bundled or boxed sets shall
be applied to the Picture as follows:
(a)
Theatrically Released Titles: If such boxed or bundled sets are comprised
solely of theatrically released titles, then such gross receipts received from
the bundled or boxed sets will be allocated to Picture in proportion to the
domestic US box office gross receipts as reported in Daily Variety received by
the respective titles.
(b)
Straight to Video Titles: If such boxed or bundled sets are comprised of
the Picture and only straight to video titles, then the gross receipts received
from the bundled or boxed sets will be allocated as follows:
| | (i)
If the Picture is bundled or boxed with one other movie, 75% of the gross
receipts that are realized by the bundled or boxed set will be applied to the
Picture, 25% will be applied to the other title. |
| | (ii)
If the Picture is bundled or boxed with two other movies, 60% of the gross
receipts that are realized by the bundled or boxed set will be applied to the
Picture, 20% will be applied to each of the other two titles. |
| | (iii)
If the Picture is bundles or boxed with three other movies, 50% of the gross
receipts that are realized by the bundled or boxed set will be applied to the
Picture, 16.67% will be applied to each of the other three titles. |
| | (iv)
If the Picture is bundled or boxed with four other movies, 40% of the gross
receipts that are realized by the bundled or boxed set will be applied to the
Picture, 15% will be applied to each of the other titles. |
(c)
Mixed Bundling: If such boxed or bundled sets are comprised of the
Picture, other theatrically released titles and straight to video titles, then
the gross receipts received from the bundled or boxed sets will be allocated as
follows:
| | (i)
If the Picture is bundled or boxed with another theatrically released title and
one straight to video title, then 20% of the gross receipts realized by the
bundled or boxed set will be applied to the straight to video title and the
balance of the gross receipts will be allocated to the Picture and the other
theatrical title in proportion to the domestic US theatrical box office gross
receipts as reported in Daily Variety received by the respective titles. |
| | (ii)
If, in a four title bundled or boxed set, the Picture is bundled or boxed with
either one or two more theatrically released titles and either one or two
straight to video titles, then 15% of the gross receipts realized by the bundled
or boxed set will be applied to each one of the straight to video titles and the
balance of the gross receipts will be allocated to the other theatrical titles
in proportion to the domestic US theatrical box office gross receipts as
reported in Daily Variety received by the respective titles. |
| | (iii)
If, in a five title boxed set, Picture and either one, two or three theatrically
released titles are released together with either one, two or three straight to
video titles, then 15% of the gross receipts realized by the boxed set will be
applied to each one of the video titles and the balance of the gross receipts
will be allocated to the other titles in proportion to the domestic US
theatrical box office gross receipts as reported in Daily Variety received by
the respective titles. |
11.
Editing:
(a)
Subject to contractual editing restrictions as timely provided by Company to
Distributor pursuant to a written contractual credit memorandum as required in
the Delivery Schedule, Distributor may cut or edit the Picture, at its sole cost
and expense, to cause the Picture to comply with standards and practices
(airline, broadcast and otherwise), running time, commercial breaks, potential
or actual legal claims, censorship, ratings, television, non-theatrical, panning
and scanning requirements, subtitling, dubbing and closed-captioning, in the
Territory. Distributor shall use commercially reasonable efforts to notify its
third party licensees of the foregoing cutting and editing rights; provided that
neither a third party’s failure nor any causal or inadvertent failure by
Distributor to comply with the immediately preceding statement will constitute a
breach or default of this Agreement.
(b)
Title of the Picture: Distributor and Company shall consult in good faith
with regard to changing the title of the Picture; provided, however, that
Distributor shall have the right to change the title: (i) with Company’s
prior approval which may be unreasonably withheld (ii) in the event of a
potential, actual or legal claim made with respect to the total, (iii) after the
later of the initial Video Exploitation and Television Exploitation in the
foreign territories or (iv) after the later of the initial Video
Exploitation and Television Exploitation in the United States. In the event that
Distributor changes the title of the Picture, Distributor shall do so at its
sole cost and expense (including a title report and opinion, if applicable which
may be deductible as a Distributor Cost), and in such event, Distributor shall
indemnify, defend and hold Company harmless from any and all third party claims
arising out of such changed title provided Company gives Distributor prompt written
notice of such claim. If Distributor elects to change the title, Company shall
assist Distributor in modifying the E&O certificate so that it covers the
Picture as newly titled.
12.
Delivery:
(a)
Delivery Date: Company shall deliver to Distributor no later than January
15, 2004 (the “Delivery Date”) those items specified in the Delivery
Schedule; provided that Company shall make a good faith effort to deliver
marketing and publicity materials as soon as possible. Company shall assume and
pay all costs of Delivery of the Picture to Distributor.
(b)
Completed Delivery Notice: Company shall notify Distributor in writing
when it has completed Delivery hereunder. Distributor shall review all delivery
items and within thirty (30) days of receipt of Company’s written notice of
Delivery, Distributor shall notify Company in writing of any deficiencies in the
delivery materials, whereupon Company shall undertake to rectify such
deficiencies within the next thirty (30) calendar days. Upon delivery of
rectified items, Distributor shall once again inspect the same and notify
Company in writing of any deficiencies, whereupon Company shall once again
attempt to rectify the same. If Distributor rejects any delivery materials more
than twice, Distributor shall have the right, but not the obligation, to create
any undelivered delivery items and Distributor shall have the right to offset
the cost thereof against the Compensation.
(c)
Language Tracks: Subject to availability, Company shall deliver or make
available to Distributor, at no additional cost to Company, any and all of the
following language tracks of the Picture: a German foreign language track, an
Italian foreign language track, a Spanish foreign language track, and a French
foreign language track (DVD region encoded for the United States and Canada, or
such other territorial encoding as may be exist from time to time to prevent
viewing outside of the intended territory). With respect to any language tracks
(other than English) that are not in the control of Company, Company shall use
commercially reasonable efforts to secure such tracks at the cost of duplication
and shipping (such costs to be paid by Distributor and deducted as a
Distribution Cost) with no additional add-on costs or markups.
(d)
Access: Each party shall have access to advertising, marketing and
publicity materials created by the other (and there subdistributors to the
extent available), provided that the ▇▇▇▇▇ granted access shall pay the cost of
duplication and shipping of such materials requested by it.
13. Residuals and Third Party
Participations and Deferments: Company represents and warrants that all third
party participations and payments (whether computed upon net profits, gross
proceeds or otherwise) worldwide will, as between Company and Distributor, be
borne solely by Company. Company is responsible for and will act as paymaster
for any collective bargaining payments and mandated residuals
(“Residuals”) payable to any party by reason of the exercise of the
Acquired Rights.
14. Credit: Subject to all
written credit memorandum that Company timely delivers to Distributor in
writing, any advertising and/or promotional materials, including, without
limitation, the videogram sleeve, may contain a logo of Distributor, its
subdistributors/sublicenses and releasing entity(ies). Distributor shall include
Company’s logo on the videogram sleeve. Distributor and its
subdistibutors/sublicensees and releasing entities shall each be entitled to its
animated logo on screen in first position in the Territory in all Acquired
Rights, provided that with respect to the initial Theatrical Release of the
Picture, Distributor’s logo shall be third Position. Except as otherwise
set forth herein, Distributor may only make such changes to the credits as are
reasonably required to conform the credits to guild and other legal
requirements, subject however, to any written contractual credit memoranda that
Company timely delivers to Distributor. Any paid ad credits and screen credits
shall be in accordance with the written paid ad credit statement(s) and written
screen credit statements as timely provided by Company to Distributor as
required in the Delivery Schedule. Notwithstanding the foregoing, Distributor
shall be given a presentation credit and logo credit on all positive prints of
the Picture, including but not limited to release prints and all advertising
(including consumer and trade) when Company or NMF receives credit or their logo
in a size no less favorable than applicable to Company or NMF. Distributor
acknowledges that certain release prints have been prepared by Company and
certain advertising material created prior to November 20, 2003 exist without
Distributor’s logo and these shall not be deemed a breach hereunder.
Company shall use reasonable good faith efforts to cure the foregoing on a
prospective basis as to new artwork and ad materials created after November 20,
2003.
15.
Representations and Warranties:
(a) By Company: Company represents and
warrants that: Company has all rights necessary to allow Distributor to exploit
the Acquired Rights under this Agreement and has the full right, power and
authority to enter into this Agreement; the Picture will not infringe on any
third party rights; all required clearances, including music clearances, have or
will have been obtained prior to Delivery for Distributor to fully exploit the
Acquired Rights throughout the Term in the Territory; the Picture will not
violate any applicable laws and regulations; there is no, and at the time of
delivery of the Picture shall be no, pending or threatened litigation or claims
against the Picture; Distributor shall have quiet enjoyment and possession of
the Acquired Rights; the Picture has not been exhibited in the Territory in any
media whatsoever (other than in one or more film festivals, private screenings or
market screening) prior to the date hereof; Company has obtained or shall obtain
by the Delivery Date customary errors and omissions insurance (as more fully set
forth in Paragraph 1(d) above); all credit information supplied by Company shall
be fully and completely accurate; and all the terms, covenants and conditions
provided to be kept or performed by Company under each and all of the agreements
relating in any way to the Picture have been and will be kept and fully
performed by Company and that at the time of delivery of the Picture there is
and will be no existing breach or other act of default by Company under any of
said agreements; and Company will keep complete and accurate accounting records
with respect to the transactions which are subject to Distributor’s audit
rights pursuant to this Agreement.
(b)
By Distributor: Distributor represents and warrants that: Distributor is
duly organized and existing under the laws of the state of its incorporation and
is duly qualified and in good standing in every other state in which the nature
of its business requires such qualification; the execution, delivery and
performance hereof are not in contravention law or of any indenture, agreement
or undertaking to which Distributor is a party or by which it is bound and the
same are within Distributor’s corporate powers, have been duly authorized
to enter into and completely perform this Agreement; and it will honor all
restrictions on the exercise of the licensed rights or any writing by Company in
conformity with this Agreement; and Distributor will keep complete and accurate
accounting records with respect to the transactions which are subject to
Company’s audit rights pursuant to this Agreement.
(c)
This Paragraph 15 shall survive the termination or expiration of this Agreement,
whether by operation of law or otherwise.
16.
Indemnity:
(a)
By Company: Company shall forever, indemnify, defend and hold harmless
Distributor, its parents, subsidiaries, divisions, affiliates, related
companies, and its distributors and its and their respective officers,
directors, employees, agents, successors, assigns and licensees from and against
all claims, actions, causes of action, losses, liability, costs, expenses,
damages, judgments, and settlements including attorneys’ fees and court
costs, which may be suffered, made or incurred by such parties arising out of or
in connection with any breach or alleged breach of any representations,
warranties, undertakings or agreement of any nature whatsoever made or entered
into by Company in connection with this Agreement, including but not limited to
claims for which the increased deductible set forth in Paragraph 1(d) apply.
Company shall be solely responsible and pay all deductible costs with respect to
any insured claims.
(b)
By Distributor: Distributor shall forever, defend, indemnify and hold
harmless Company, its parent, affiliates, subsidiaries and the officers,
director, employees, agents, successors and permitted assigns and licensees from
and against all third party claims, actions, causes of action, losses,
liability, costs, expenses, damages, judgments, and settlements including
reasonable outside attorneys’ fees and court costs, which, may be suffered,
made or incurred by such parties arising out of or in connection with any
material breach of any representations or warranties made by Distributor in
connection with this Agreement.
(c)
Notice of Indemnification: Either party seeking indemnification under
this Agreement (the “Indemnified Party”) shall afford the party
required to provide indemnification hereunder (the “Indemnifying
Party”) the opportunity to participate in any compromise, settlement,
litigation or other resolution of such claim, or, at the election of the
Indemnified Party, shall require the Indemnifying Party to assume the defense of
any such claim or litigation, with counsel of the Indemnifying Party’s own
choosing; provided, however, that in the event the Indemnified Party elects to
require the Indemnifying Party to assume such defense, the Indemnifying Party
shall afford the Indemnified Party the opportunity to participate fully is such
defense at the Indemnified Party’s expense. (The Indemnified Party shall
have the right to retain its own counsel at its own expense). Neither party
shall compromise, settle or otherwise resolve such claim or litigation without
the other party’s prior written consent, which shall not be unreasonably
withheld.
(d)
Limitation of Liability: EXCEPT WITH RESPECT TO EACH PARTY’S
INDEMNIFICATION OBLIGATIONS AS PROVIDED IN THIS PARAGRAPH 16 AND ANY BREACH OF
CONFIDENTIALITY OBLIGATIONS AS PROVIDED IN PARAGRAPH 32, NEITHER PARTY SHALL BE
LIABLE FOR ANY PUNITIVE/EXEMPLARY, SPECIAL, INDIRECT, CONSEQUENTIAL, OR
INCIDENTAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF BUSINESS
PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE)
ARISING OUT OF THIS AGREEMENT, ANY OF THE DOCUMENTS REFERENCED IN THIS
AGREEMENT, OR ANY ADDENDA OR AMENDMENTS HERETO OR ARISING OUT OF THE PICTURE
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(e)
This Paragraph 16 shall survive the expiration or termination of this Agreement,
whether by operation of law or otherwise.
17. Security Interest: As an
inducement to Distributor to enter into this Agreement and as security for the
performance by Company of all of its obligations hereunder including, but not
limited to, the obligation to timely deliver the Picture hereunder, Company
hereby grants and assigns to Distributor a security interest (“Security
Interest”) and a copyright mortgage in and to all Acquired Rights in and to
the Picture in the Territory granted to Distributor hereunder, and all of the
products and proceeds thereof. Company shall execute and deliver to Distributor
concurrently with the execution of this Agreement, a Mortgage of Copyright to
effectuate and perfect the Security Interest provided herein. Distributor shall
have the right, but not the obligation, to file an UCC-1 Financing Statement to
further perfect its Security Interest granted hereunder.
18. Default: Company will
default if: (a) Company becomes insolvent or fails to pay its debts when due;
(b) Company makes any assignment for the benefit of creditors, or seeks relief
under any bankruptcy law or similar law for the protection of debtors, or
suffers a petition of bankruptcy to be filed against it or a receiver or trustee
appointed for substantially all of its assets, and such is not removed within
thirty (30) days; or (c) Company breaches any material term, covenant, or
condition of this Agreement or any other agreement between Distributor and
Company. Distributor will give company written notice of any claimed default. If
the default is incapable of cure, then Company will be in default immediately
upon receipt of Distributor’s notice. If the default is capable of cure,
then Company will have thirty (30) days after its receipt of the default notice
to cure any non-monetary default if the default is incapable of cure, or if
Company fails to cure within the time provided, then Distributor, in addition to
any other rights or remedies, may foreclose on its Security Interest in the
Picture.
19. No Injunctive Relief: After
payment of the first installment of the Acquisition price pursuant to Paragraph
5(a)(i) above, no breach of this Agreement by Distributor, or any other action
by Distributor, shall entitle Company to enjoin the distribution, marketing,
publicity, promotion or other exploitation of the Picture and Company’s
sole remedy for any breach of this Agreement shall be limited to an action at
law for money damages.
20. Governing Law: This Agreement
shall be governed by the laws of the State of Texas applicable to agreements
wholly entered into and wholly performed within the state. The parties hereby
submit and consent to the exclusive jurisdiction of the courts of Dallas County
in the State of Texas and North Texas Federal Courts in any action brought under
or relating to this Agreement.
21.
Further Instruments: Company shall, of its expense, furnish and execute and
provide Distributor with any other instruments or documents that Distributor requires to
evidence, effectuate or protect any of the rights or interests granted under
this Agreement.
22.
Entire Understanding; Modification; Waiver: This Agreement (including any
Schedules and Exhibits hereto) contains the entire understanding of the parties
hereto relating to the subject matter hereof and no terms, obligations,
representations, promises, conditions (whether written or oral, express or
implied) relating to the subject matter hereof have bean made or relied upon,
other than those contained herein. This Agreement may not be modified, nor may
any provision be waived, except in a writing signed by both parties hereto.
Payment under this Agreement shall not operate as a waiver of any provision
hereof. No waiver of any breach or default under this Agreement shall operate as
a waiver of any preceding or subsequent breach or default.
23.
Notices: Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given and received on the date
of delivery or on the third (3rd) business day following the day of mailing
of the same, or on the day of transmission by telecopier or other form of
recorded communication service of the same, as the care may be to the party to
be notified at the addresses set forth below:
| If to Distributor: | DEJ Productions Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attn: Business Affairs/Vice President
(F) ▇▇▇-▇▇▇-▇▇▇▇ |
| with a copy to: | Blockbuster Inc,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: SVP General Manager Content
cc: General Counsel (default only)
cc: Corporate Counsel DEJ Production Inc.
(F) ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(F) ▇▇▇-▇▇▇-▇▇▇▇
|
| If to Company: | Media 8 Entertainment
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
(T) ▇▇▇-▇▇▇-▇▇▇▇
(F) ▇▇▇-▇▇▇-▇▇▇▇ |
| with a copy to: | Law Office of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(T) ▇▇▇-▇▇▇-▇▇▇▇
(F) ▇▇▇-▇▇▇-▇▇▇▇
Lantern Lane Entertainment
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(T) 818-222-2309
(F) ▇▇▇-▇▇▇-▇▇▇▇ |
24.
Assignment:
(a)
Company may not assign its rights and/or delegate its duties hereunder without
Distributor’s prior written consent, which consent may not be unreasonably withheld.
However, Company may assign the right to receive payments under this Agreement
to no more than two creditors upon timely written notice to Distributor.
(b)
Distributor may assign or sublicense this Agreement or any of its rights or
obligations hereunder in its sole discretion in which event it shall be relieved
of its obligations hereunder, provided however, Distributor shall not be
relieved of its obligations hereunder unless the assignment is to an affiliated
entity of Distributor or a major motion picture production, distribution or
financing entity or a major U.S. television or cable network which assumes the
obligations in writing.
25.
Relationship of the Parties: The parties are independent contractors, and
nothing in this Agreement shall be deemed or construed to create, or have been
intended to create a partnership, joint venture, employment or agency
relationship between the parties. Each party agrees that it neither has nor will
give the appearance or impression of possessing the legal authority to bind or
commit any other party in any way except as provided is this
Agreement.
26. Effect of Headings: The
headings and subheadings of the sections of this Agreement are inserted for
convenience of reference only and shall not control or affect the meaning or
construction of any of the agreements, terms, covenants and conditions of this
Agreement in any manner.
27.
Construction: This Agreement has been fully reviewed and negotiated by
the parties and their respective legal counsel. Accordingly, in interpreting
this Agreement, no weight shall be placed upon which party or its counsel
drafted the provision being interpreted.
28.
Severability: If any term or provision of this Agreement shall be found
to be void or contrary to law, such term or provision shall, but only to the
extent necessary to bring this Agreement within the requirements of law, be
deemed to be severable from the other terms and provisions of this Agreement,
and the remainder of this Agreement shall be given effect as if the parties had
not included the severed term herein.
29.
Counterparts: This Agreement may be executed in two or more counterparts,
each of which shall be deemed as original but all of which together shall
constitute one and the same instrument.
30.
Survival: All accounting, representations, warranties, indemnities and
return privileges made or provided herein shall survive the termination of this
Agreement and shall remain in full force and effect. All of a party’s
rights and privileges, to the extent they are fairly attributable to events or
conditions occurring or existing on or prior to the termination of this
Agreement, shall survive termination and be enforceable by such party and
its successors and assigns.
31.
Attorney’s Fees: In any action or proceeding between the parties
arising out of this Agreement, the prevailing party shall be entitled to recover
its reasonable attorney’s fees and costs from the non-prevailing
party.
32. Confidentiality: Except
as otherwise required by applicable federal and/or state law, neither party
shall disclose to any third party (other than respective employees, in their
capacity as such) any information with respect to the terms end provisions of
this Agreement during the Term of this Agreement and thereafter except (a) to
the extent necessary to comply with law, administrative order or rule or the
valid order or decree of a court of competent jurisdiction, in which a party
shall so notify the other and shall seek confidential treatment of such
information, or (b) as part of its normal reporting or review procedure to its
partners, its divisions, its affiliates, its financiers, its financial advisers,
auditors and its attorneys, and its profit participants (to the extent deemed
necessary by the disclosing party) provided, however, that any and all such
parties agree to be bound by the provisions of this Paragraph. Notwithstanding
anything herein to the contrary, any party to this Agreement (and any employee,
representative or other agent of any party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure, provided however, that such
disclosure may not be made to the extent required to be kept confidential to
comply with any applicable federal or state securities laws. Company shall in no
event cause or authorize the issuance, circulation, publication or
dissemination, by any means, of any publicity, news stories or articles relating
directly or indirectly, to this Agreement and to the licensing of the Picture.
Company’s compliance herewith shall be a material condition of this
Agreement. Notwithstanding the foregoing, Company and Distributor shall mutually
agree to the scope and timing of the initial press release regarding the
Picture.
| Intentionally Left Blank
Continues on Next Page |
33.
U.S. Dollars: All amounts set forth herein are stated in United States
Dollars.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed the day and year first above written.
| DEJ Productions Inc.
By:
Its:
Date:
Name:
|
| ACCEPTED AND AGREED:
Media & Entertainment
By:
Its:
Date:
Name:
MDP Distribution, Inc.
By:
Its:
Date:
Name:
| |