CONFIDENTIAL TREATMENT REQUESTED
The asterisked portions of this document have been
omitted and are filed separately with the Commission
MOVIE AND MOTION PICTURE PROGRAMMING AGREEMENT
This Agreement (this "Agreement") is entered into by and between ▇▇▇▇▇▇▇▇▇.▇▇▇
inc., a Delaware corporation ("▇▇▇▇▇▇▇▇▇.▇▇▇") and Overseas Filmgroup, Inc. a
Delaware corportation ("Overseas"), known jointly as the Parties, this 19th day
of July, 1999 (the "Effective Date"). In consideration of the mutual covenants
and agreements of the Parties herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1. DEFINITIONS:
(a) "Access Fee" is a fee paid by a User in order to access a
transmission, display or performance of the Movies on the System.
(b) "Access Page" is a Web page on the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site that is
designed by ▇▇▇▇▇▇▇▇▇.▇▇▇ in accordance with the "look and feel" of
the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site (subject to Overseas' reasonable approval),
through which the Movies will be accessible, and through which
consumers will be able to access, view, and order copies of the Movies
and the Merchandise.
(c) "Broadcast Inventory" shall mean internal program breaks within the
transmission of the Movies to ▇▇▇▇▇▇▇▇▇.▇▇▇ Users, similar in
character to traditional broadcast television commercial breaks or
theatrical film previews. The term shall not include framing,
messages, or any other material visible or audible during the entire
length of the Movie broadcast on any ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site or to any
User.
(d) "▇▇▇▇▇▇▇▇▇.▇▇▇ Licensee" is an on-line distributor or retailer of
hard copies of the Movies in videocassettes, DVDs, videodisks, or
similar format, as designated by ▇▇▇▇▇▇▇▇▇.▇▇▇.
(e) "Marks" are a party's logos, trade names, trademarks and service
marks, collectively.
(f) "Merchandise" shall include selected merchandise, other than video
cassettes, video discs, DVD, and similar hard copies of the Movies,
that relates to the Movies to be offered for sale by Overseas through
an Order Now Button on certain Access Pages as designated by
▇▇▇▇▇▇▇▇▇.▇▇▇.
(g) "Movies" are all movies and motion pictures and other audiovisual
works embodied in videotapes, DVD and/or other video masters listed on
the attached EXHIBIT A (each individually a "Movie") as may be updated
from time to time pursuant to Paragraph 6(h) herein, (which shall be a
minimum of 50 titles upon execution of this Agreement and shall
increase to a minimum of 70 titles pursuant to Paragraph 6(h) herein),
including related materials such as EPKs, synopses, reviews and
biographies of such Movies. The Movies provided by Overseas may be
movies, motion pictures and audiovisual works owned by Overseas or
licensed from third parties.
(h) "Order Now Button" is a button or text link on the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web
site linked directly to a Yahoo! Store on the Yahoo! Web site or the
Web site of a ▇▇▇▇▇▇▇▇▇.▇▇▇ Licensee, which button or text link
appears in close proximity to a description or other reference to the
Movies and/or Merchandise and which contains the words "Order Now,"
"Buy It" or words of similar import, and/or permits users to purchase,
or facilitates the purchase of, the applicable Movies and/or
Merchandise by clicking on such button or link.
(i) "System" is any wired network (including, without limitation, the
Internet, the Internet II, or any other online services network which
utilizes computer terminals, terminal servers, modems, cable modems,
HFC, coaxial cable, xDSL, routers, splitters, switches, multicasting
technology, power lines, or other high speed data connections and any
and all other wired networks whether now in existence or hereafter
devised) that distributes audio or video using digital algorithms, one
and/or two-way digital services, or any wireless network that provides
access to such wired network, also whether now in existence or
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hereafter devised (except traditional AM/FM radio broadcast stations
and television broadcast stations, direct broadcast satellite, pay
cable and basic cable). (j) "User" is a ▇▇▇▇▇▇▇▇▇.▇▇▇ Access Page
registered user. (k) "Yahoo! Store" is the merchant service owned and
operated by Yahoo! Inc. and marketed under the name "Yahoo! Store."
2. OVERSEAS COVENANTS:
(a) Rights. Overseas hereby grants to ▇▇▇▇▇▇▇▇▇.▇▇▇ the United States
exclusive right and license to encode (and modify to the extent
reasonably required to encode), store, publicly distribute, perform,
display, copy, transmit, broadcast, and market the Movies on the
System for the term of this Agreement. Such right and license will be
subject to the territory and Internet transmission dates, and third
party restrictions specified on EXHIBIT A as may be updated from time
to time. In addition, ▇▇▇▇▇▇▇▇▇.▇▇▇ has the right to maintain a copy
of the Movies to be included and preserved in ▇▇▇▇▇▇▇▇▇.▇▇▇'s archives
at ▇▇▇▇▇▇▇▇▇.▇▇▇'s sole discretion and expense. Further Overseas
grants ▇▇▇▇▇▇▇▇▇.▇▇▇ the right to use excerpts from the Movies,
including still images and likenesses, for general business purposes
and for promotion of ▇▇▇▇▇▇▇▇▇.▇▇▇ subject to third party restrictions
and the reasonable approval of Overseas which shall not be
unreasonably withheld. [*]
(b) Non-Disturbance Agreement. The grant of rights and license set forth
in Paragraph 2(a) of this Agreement shall be subject to a
Non-Disturbance Agreement entered into between ▇▇▇▇▇▇▇▇▇.▇▇▇ and
▇▇▇▇▇▇ & Co., and Bank Gesselschaft, in substantially the form set
forth on EXHIBIT B attached hereto and incorporated herein by
reference. In the event such Non-Disturbance Agreement is not executed
within thirty (30) days following the date of execution of this
Agreement, ▇▇▇▇▇▇▇▇▇.▇▇▇ shall have the right to terminate this
Agreement effective immediately upon notice to Overseas of such
termination.
(c) Promotion of ▇▇▇▇▇▇▇▇▇.▇▇▇. Overseas hereby agrees to place the
▇▇▇▇▇▇▇▇▇.▇▇▇ Marks on the Overseas Web site, solely in accordance
with ▇▇▇▇▇▇▇▇▇.▇▇▇'s trademark usage guidelines, to provide a
prominent hyperlink from the Overseas Web site to the Access Page(s),
and to use the Overseas Web site, press materials and publications, in
connection with the advertising and packaging of the Movies (all
subject to Paragraph 4(b)), to promote the transmission, distribution,
performance and display of the Movies by ▇▇▇▇▇▇▇▇▇.▇▇▇. In addition,
subject to restrictions of video and/or DVD distributors, Overseas
will provide ▇▇▇▇▇▇▇▇▇.▇▇▇ with promotional placement time in VHS and
DVD copies of the Movies, and will use good faith efforts to include
▇▇▇▇▇▇▇▇▇.▇▇▇'s logo and URL in connection with all promotions of the
hard and broadcast copies of the Movies, including, without
limitation, in movie posters.
(d) Overseas Materials. Within thirty (30) days of the effective date of
this Agreement, Overseas agrees to provide ▇▇▇▇▇▇▇▇▇.▇▇▇ with: (i)
master copies of the Movies in a format from which ▇▇▇▇▇▇▇▇▇.▇▇▇ will
have the commercially reasonable ability to encode and transmit on the
System as contemplated by this Agreement (e.g., on1/2inch, VHS, DVD,
D2 or other mutually acceptable format); (ii) written descriptions of
each Movie, including the plotline, running time and primary cast
members thereof; and (iii) the logo, product illustrations,
__________________
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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advertisements and other promotional material of Overseas requested by
▇▇▇▇▇▇▇▇▇.▇▇▇. Overseas will be deemed to have approved all such
materials so submitted by Overseas to ▇▇▇▇▇▇▇▇▇.▇▇▇.
(e) Overseas' Marks. Subject to any restrictions or limitations provided
by Overseas to ▇▇▇▇▇▇▇▇▇.▇▇▇ in writing, Overseas hereby grants to
▇▇▇▇▇▇▇▇▇.▇▇▇ the right and license to use Overseas' Marks, and the
marks, names, and likenesses of all third parties associated with the
Movies and Merchandise, in print, audio, on-line and other advertising
for the promotion of the Movies, the relationship of the Parties, and
in other means in connection with this Agreement. Unless stated
otherwise in writing, all artwork provided by Overseas to
▇▇▇▇▇▇▇▇▇.▇▇▇ shall be deemed acceptable for ▇▇▇▇▇▇▇▇▇.▇▇▇'s
promotional purposes (e.g. video boxes, one sheets).
(f) Merchandise Sales. ▇▇▇▇▇▇▇▇▇.▇▇▇ shall place Order Now Buttons on
the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site, at such locations as determined by
▇▇▇▇▇▇▇▇▇.▇▇▇, intended to link directly to a Yahoo! Store to enable
Users to purchase Merchandise. As between ▇▇▇▇▇▇▇▇▇.▇▇▇ and Overseas,
Overseas shall be solely responsible for processing all orders for
Merchandise through every aspect of each transaction, including
receiving, filling, shipping and handling, collecting payment,
tracking and transaction security ("Transaction Responsibilities").
All orders for Merchandise shall be placed by customers directly with
Overseas. Overseas agrees to comply with the Yahoo! Store standard
terms and conditions located at the following URL:
▇▇▇▇://▇▇▇▇▇.▇▇▇▇▇.▇▇▇/▇▇/▇▇▇▇▇▇▇▇.▇▇▇▇; provided however that the fee
structure shall be as follows: Overseas will pay ▇▇▇▇▇▇▇▇▇.▇▇▇ [*]
derived from the sale of Merchandise to Users that accessed the Yahoo!
Store through an Order Now Button.
(g) Movie Sales. ▇▇▇▇▇▇▇▇▇.▇▇▇ shall place Order Now Buttons on the
▇▇▇▇▇▇▇▇▇.▇▇▇ Web site, at such locations as determined by
▇▇▇▇▇▇▇▇▇.▇▇▇, intended to link directly to a Yahoo! Store to enable
Users to purchase hard copies of certain Movies. Overseas will be
solely responsible for processing all orders for the purchase of hard
copies of the Movies hereunder and for all related Transaction
Responsibilities. Overseas will pay ▇▇▇▇▇▇▇▇▇.▇▇▇ [*] as a result
of sales of Movies to Users that accessed the Yahoo! Store through an
Order Now Button. In addition, upon the mutual agreement of the
Parties, ▇▇▇▇▇▇▇▇▇.▇▇▇ may make the Movies available for sale on
videocassette, videodisc, DVD, or similar hard-copy media through a
▇▇▇▇▇▇▇▇▇.▇▇▇ Licensee. In such case, the Order Now Button on the
Access Page would then link to such ▇▇▇▇▇▇▇▇▇.▇▇▇ Licensee's Web page
and ▇▇▇▇▇▇▇▇▇.▇▇▇ shall pay Overseas [*] In the event Overseas does
not hold the right to sell hard copies of Movies provided by Overseas
to ▇▇▇▇▇▇▇▇▇.▇▇▇, Overseas will use its commercially reasonable
efforts to negotiate with all third parties who hold such rights for
the right to sell and distribute hard copies of such Movies as set
forth in this Paragraph 2(f), along with the right to grant all
necessary sublicenses to ▇▇▇▇▇▇▇▇▇.▇▇▇ to exercise those rights.
(h) Sales Tracking. Overseas will provide a mechanism to track Users
from the ▇▇▇▇▇▇▇▇▇.▇▇▇ site who purchase Movies and Merchandise from
Overseas. Overseas shall provide to ▇▇▇▇▇▇▇▇▇.▇▇▇ on a quarterly basis
an accounting of all such revenue and costs, and shall pay all sums
due and owing to ▇▇▇▇▇▇▇▇▇.▇▇▇ within thirty (30) days of the end of
each calendar quarter.
__________________
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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3. ▇▇▇▇▇▇▇▇▇.▇▇▇ COVENANTS:
(a) Infrastructure. ▇▇▇▇▇▇▇▇▇.▇▇▇ will use commercially reasonable
efforts to: (i) provide the communications infrastructure supporting
the access, transmission, display and performance of Movies on the
System to Users; and (ii) procure and maintain the technical hardware
and software necessary to distribute the Movies over the System.
(b) Encoding. ▇▇▇▇▇▇▇▇▇.▇▇▇ will use commercially reasonable efforts to
encode the Movies provided by Overseas and make such Movies available
on the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site for access and viewing by Users.
Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇.▇▇▇ will not have any
obligation to so encode or make available any Movies that
▇▇▇▇▇▇▇▇▇.▇▇▇ reasonably determines are inconsistent with
▇▇▇▇▇▇▇▇▇.▇▇▇'s general censorship standards (e.g. pornographic
material); provided, however, that ▇▇▇▇▇▇▇▇▇.▇▇▇ will not make any
such determination relative to materials rated by the MPAA as "R" or
less restrictive.
(c) Reporting. ▇▇▇▇▇▇▇▇▇.▇▇▇ will provide Overseas access to a password
protected Web page that will include the statistics relating to
viewership of the Movies. Such information will be updated on a weekly
basis.
(d) Pay-Per-View. The parties may mutually agree to make the Movies
available on a pay-per-view basis over the System, in which case
▇▇▇▇▇▇▇▇▇.▇▇▇ shall collect an Access Fee from Users on behalf of
Overseas in order to access the Movies. In the event the parties agree
to make the Movies available on a pay-per-view basis over the System,
such pay-per-view broadcast rights will be exclusive to ▇▇▇▇▇▇▇▇▇.▇▇▇
over the System[*]. The parties will mutually agree upon the prices to
be charged for Access Fees for each Movie; [*].
(e) Access Pages. ▇▇▇▇▇▇▇▇▇.▇▇▇ will host the Access Page(s) on the
▇▇▇▇▇▇▇▇▇.▇▇▇ domain. The Movies will be accessible for viewing from
such locations on the System designated by ▇▇▇▇▇▇▇▇▇.▇▇▇, including,
but not limited to, the Access Page(s). At Overseas' reasonable
request, ▇▇▇▇▇▇▇▇▇.▇▇▇ shall prepare separate Access Pages for each
Movie.
(f) Broadcast Inventory. ▇▇▇▇▇▇▇▇▇.▇▇▇ will have the sole, exclusive
right to sell Broadcast Inventory of the Movies. [*]
Overseas will be solely responsible for inserting the Broadcast
Inventory advertising into the Movies prior to delivery to
▇▇▇▇▇▇▇▇▇.▇▇▇; provided, however, that Overseas will not insert any
Broadcast Inventory into any Movie which is designated as Pay-Per-View
pursuant to Section 3(d). The Parties acknowledge and agree that the
Broadcast Inventory shall comprise no more than ten (10) minutes per
hour of any Movie. (g) Advertising. Notwithstanding any other
provision of this Agreement, Overseas acknowledges that ▇▇▇▇▇▇▇▇▇.▇▇▇
shall retain the exclusive right to sell all advertising, and to all
revenue derived therefrom, including sponsorships of the Movies and
Access Pages, audio/video gateway advertising, and all other
advertising that appears on the Access Pages, and shall accept or
refuse any such advertising in its sole discretion.
(g) Advertising. Notwithstanding any other provision of this Agreement,
Overseas acknowledges that ▇▇▇▇▇▇▇▇▇.▇▇▇ shall retain the exclusive
right to sell all advertising, and to all revenue derived therefrom,
including sponsorships of the Movies and Access Pages, audio/video
gateway advertising, and all other advertising that appears on the
Access Pages, and shall accept or refuse any such advertising in its
sole discretion.
__________________
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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(h) No Representations. Overseas acknowledges that ▇▇▇▇▇▇▇▇▇.▇▇▇ does not
make any representations or warranties regarding the ability or
exposure of the System, amount of revenue to be realized from the
System or associated advertising, and that there are no guarantees
regarding same. Overseas further acknowledges that there is no
assurance that the market opportunity for the Movies presently
believed to exist will continue to exist at a commercially reasonable
level. Accordingly, ▇▇▇▇▇▇▇▇▇.▇▇▇ will have no obligation to market or
to continue to market the Movies, and the determination as to whether
or not to market or to continue to market the Movies, for any reason
whatsoever, shall be made by ▇▇▇▇▇▇▇▇▇.▇▇▇ in its sole and absolute
discretion [*]. Overseas acknowledges that: (i) ▇▇▇▇▇▇▇▇▇.▇▇▇ has made
no representation as to the possible or expected success of, or
perceived need for, the Movies; and (ii) in entering into this
Agreement Overseas is not relying upon any representation by
▇▇▇▇▇▇▇▇▇.▇▇▇, except for representations, if any, expressly and
unambiguously set forth in this Agreement.
(i) No Modifications. ▇▇▇▇▇▇▇▇▇.▇▇▇ agrees that it will not edit or
modify the Movies except as otherwise expressly provided herein.
(j) ▇▇▇▇▇▇▇▇▇.▇▇▇ Marks. Subject to third party contractual restrictions
provided by ▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇▇▇▇.▇▇▇'s trademark usage
guidelines, ▇▇▇▇▇▇▇▇▇.▇▇▇ hereby grants to Overseas the right to use
▇▇▇▇▇▇▇▇▇.▇▇▇'s Marks in print, audio, on-line and other advertising
for the promotion of the Movies, the relationship of the Parties, and
in other means in connection with this Agreement, all consistent with
Overseas' covenants set forth herein.
4. CONFIDENTIALITY:
(a) Obligation. Neither party shall, without the prior written consent
of the other party, use or disclose, or permit any of its agents,
employees or professional advisors to use or disclose, any non-public
information disclosed by it to the other party. Each party shall only
transmit such confidential information to its agents, employees and
professional advisors who need to know such information and who shall
agree to be bound by the terms and conditions of this Paragraph.
Information regarded as confidential includes, but is not limited to,
the terms of this Agreement and data relating to the transmission,
distribution, performance and display of the Movies or materials
related thereto. Notwithstanding the foregoing, the provisions of this
Paragraph shall not apply to, and the term "confidential information"
shall exclude, information regarding the existence of this Agreement,
information generally available to the public, information rightfully
obtained from other sources, information previously known to the
receiving party, and information required to be disclosed pursuant to
law or court order (provided that the party subject to such law or
court order provides the other party with reasonable written notice
thereof).
(b) No Press Release. Neither Party shall issue a press release or make
a public announcement or any disclosure to any third party related to
the transactions contemplated by this Agreement without the prior
approval of such release, announcement or disclosure by the other
Party.
5. CONSIDERATION: In exchange for the strategic business relationship
described in this Agreement, and in exchange for the number and kind of
shares described in Section 5(b) below, and at ▇▇▇▇▇▇▇▇▇.▇▇▇'s sole
option, ▇▇▇▇▇▇▇▇▇.▇▇▇ will either (i) pay Overseas a cash fee equal to
$1,430,929, ("Payment Alternative") or (ii) issue ▇▇▇▇▇▇▇▇▇.▇▇▇ shares
of stock to Overseas as described in Section 5(a) below ("Stock
Alternative").
__________________
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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(a) Stock Alternative. At the sole option of ▇▇▇▇▇▇▇▇▇.▇▇▇ and subject
to the terms and conditions set forth in this Agreement, on the
Effective Date ▇▇▇▇▇▇▇▇▇.▇▇▇ shall sell and issue to Overseas, and
Overseas shall purchase from ▇▇▇▇▇▇▇▇▇.▇▇▇ 11,302 shares of
▇▇▇▇▇▇▇▇▇.▇▇▇'s common stock, par value $0.01 per share (the
"▇▇▇▇▇▇▇▇▇.▇▇▇ Stock"), in exchange for the number and kind of shares
described in Section 5(b) below and the strategic business
relationship described in this Agreement. On the Effective Date,
▇▇▇▇▇▇▇▇▇.▇▇▇ will acknowledge receipt of the consideration provided
in Section 5(b) below representing the purchase price for the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock and Overseas will acknowledge receipt of
▇▇▇▇▇▇▇▇▇.▇▇▇'s stock certificate representing the ▇▇▇▇▇▇▇▇▇.▇▇▇
Stock.
(b) Sale and Issuance of Overseas Stock.
(i) Stock Issuance. Subject to the terms and conditions set forth
in this Agreement, on the Effective Date Overseas shall sell and
issue to ▇▇▇▇▇▇▇▇▇.▇▇▇, and ▇▇▇▇▇▇▇▇▇.▇▇▇ shall purchase from
Overseas 562,527 shares of Overseas' common stock, par value
$0.01 per share (the "Overseas Stock"), in exchange for the fee
set forth above in the Payment Alternative or, at ▇▇▇▇▇▇▇▇▇.▇▇▇'s
sole option, in exchange for the number and kind of shares
described in the Stock Alternative in Section 5(a) above. On the
Effective Date, Overseas will acknowledge receipt of the
consideration provided in Section 5, representing payment in full
for the Overseas Stock and the license and other rights granted
to ▇▇▇▇▇▇▇▇▇.▇▇▇ under this Agreement and ▇▇▇▇▇▇▇▇▇.▇▇▇ will
acknowledge receipt of Overseas' stock certificate representing
the Overseas Stock.
(ii) Issuance Adjustment. If Overseas issues, within one (1) year
after the Effective Date, any Overseas Stock for a per share
consideration that is less than the effective per share
consideration of the Overseas Stock provided to ▇▇▇▇▇▇▇▇▇.▇▇▇
pursuant to Section 5(b)(i) as determined by dividing the number
of shares of Overseas Stock already issued to ▇▇▇▇▇▇▇▇▇.▇▇▇ into
the fee set forth in the Payment Alternative (the "Effective Per
Share Consideration") (such transaction being referred to as a
"New Issuance"), then Overseas shall issue to ▇▇▇▇▇▇▇▇▇.▇▇▇, on
the date of the New Issuance, such number of additional shares of
Overseas Stock as are necessary so that the Effective Per Share
Consideration, after taking into account the new shares issued to
▇▇▇▇▇▇▇▇▇.▇▇▇ pursuant to this section and any stock splits,
shall be equal to the per share consideration paid to Overseas in
the New Issuance. Notwithstanding the foregoing, the provisions
of this Paragraph 5(b)(ii) shall not apply to normal course
employee stock options and other issuances of Overseas stock, all
of less than one (1%) percent, cumulatively, of Overseas issued
and outstanding stock immediately following the Transaction.
(c) Representations and Warranties of Issuer.
(i) Representations and Warranties of ▇▇▇▇▇▇▇▇▇.▇▇▇ as Issuer under
Stock Alternative. In the event ▇▇▇▇▇▇▇▇▇.▇▇▇ elects the Stock
Alternative as described in Section 5(a) above, ▇▇▇▇▇▇▇▇▇.▇▇▇
represents and warrants to Overseas in connection with the sale
and issuance of the ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock as follows:
(a) Organization and Standing. ▇▇▇▇▇▇▇▇▇.▇▇▇ is a corporation
duly organized, validly existing under and by virtue of the
laws of the State of Delaware and is in good standing under
such laws.
(b) Authorization. On the Effective Date, the shares of the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock will be duly authorized and, when
delivered, will be duly and validly issued and outstanding,
fully paid and nonassessable, and are free to the holders
thereof of any liens, encumbrances and restrictions. No
person has any right of first refusal or any preemptive
rights in connection with the issuance of the shares of the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock.
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(c) Compliance With Other Instruments. ▇▇▇▇▇▇▇▇▇.▇▇▇ is not in
violation of any term of its Certificate of Incorporation or
Bylaws, or any material agreement, mortgage, indenture,
debenture, trust, instrument, judgment, decree, order,
statute, rule or governmental regulation to which it is
subject (the "Other Instruments") except for such failures
as individually or in the aggregate would not have a
material adverse effect on the results of operations or
financial condition (a "Material Adverse Effect") of
▇▇▇▇▇▇▇▇▇.▇▇▇. The execution, delivery and performance of
this Agreement and the issuance and sale of the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock, or the taking of any other action
contemplated by this Agreement will not result in any
material violation of or be in conflict with or constitute a
material default (with or without notice, lapse of time or
both) under any of the Other Instruments, except for such
violations or conflicts which would not have a Material
Adverse Effect.
(d) SEC Reports. ▇▇▇▇▇▇▇▇▇.▇▇▇ has delivered or made available
to Overseas copies of the following reports of ▇▇▇▇▇▇▇▇▇.▇▇▇
(the "SEC Reports") heretofore filed with the SEC:
Registration Statement on Form S-1 (Reg. No. 333.52877) in
the form declared effective by the SEC, Form 10-Q for the
fiscal quarters ended September 30, 1998 and June 30, 1998.
Except as disclosed therein, none of the SEC Reports as of
their respective dates of filing contained any untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made,
not misleading. The financial statements of ▇▇▇▇▇▇▇▇▇.▇▇▇
included in the SEC Reports, with the notes thereto, are in
accordance with the books and records of ▇▇▇▇▇▇▇▇▇.▇▇▇, have
been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except
as may be stated in the notes to such statements and, in the
case of unaudited statements, as permitted by Form 10-Q)
throughout the periods covered by such statements and
present fairly (subject, in the case of unaudited
statements, to normal year-end adjustments) in all material
respects the financial condition of ▇▇▇▇▇▇▇▇▇.▇▇▇ and the
results of its operations and cash flows for the periods
indicated.
(e) Absence of Changes. Since March 31, 1999, there has been
no event or condition of any character specifically relating
to ▇▇▇▇▇▇▇▇▇.▇▇▇ which is likely to have a Material Adverse
Effect.
(f) Litigation. Except as set forth in the SEC Reports, there
are no litigation, claims, actions, proceedings or
investigations pending or, to the knowledge of
▇▇▇▇▇▇▇▇▇.▇▇▇, threatened against ▇▇▇▇▇▇▇▇▇.▇▇▇, which might
have a Material Adverse Effect.
(g) Offering. Subject to the accuracy of the Overseas'
representations in Section 5 d(b) and 5 e(b) of this
Agreement, the offer, issuance and sale of the ▇▇▇▇▇▇▇▇▇.▇▇▇
Stock constitute transactions exempt from the registration
and prospectus delivery requirements of Section 5 of the
Securities Act and ▇▇▇▇▇▇▇▇▇.▇▇▇ has obtained (or is exempt
from the requirement to obtain) all qualifications, permits,
and other consents required by all applicable state laws
governing the offer, sale or issuance of securities.
(h) Governmental Consents. On the Closing date, no permit,
consent, approval or authorization of, or declaration to or
filing with, any governmental authority is required on
behalf of ▇▇▇▇▇▇▇▇▇.▇▇▇ in connection with the execution,
delivery or performance of this Agreement or the
consummation of any transaction contemplated hereby, except
as have been obtained or accomplished or as would not have a
Material Adverse Effect.
(i) Compliance with Laws. ▇▇▇▇▇▇▇▇▇.▇▇▇ is not in violation of
any law, regulation or requirement (including, but not
7
limited to, any law, regulation or requirement governing the
quality of the environment) which might have Material
Adverse Effect, and ▇▇▇▇▇▇▇▇▇.▇▇▇ has not received notice of
any such violation.
(j) Brokers. No finder, broker, agent, financial advisor or
other intermediary has acted on behalf of ▇▇▇▇▇▇▇▇▇.▇▇▇ in
connection with the offering of the ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock or
the negotiation or consummation of this Agreement or any of
the transactions contemplated hereby.
(ii) Representations and Warranties of Overseas as Issuer. Overseas
represents and warrants to ▇▇▇▇▇▇▇▇▇.▇▇▇ in connection with the
sale and issuance of the Overseas Stock as follows:
(a) Organization and Standing. Overseas is a corporation duly
organized, validly existing under and by virtue of the laws
of the State of Delaware and is in good standing under such
laws.
(b) Authorization. On the Effective Date, the shares of the
Overseas Stock will be duly authorized and, when delivered,
will be duly and validly issued and outstanding, fully paid
and nonassessable, and are free to the holders thereof of
any liens, encumbrances and restrictions. No person has any
right of first refusal or any preemptive rights in
connection with the issuance of the shares of the Overseas
Stock.
(c) Compliance With Other Instruments. Overseas is not in
violation of any term of their respective Charter, or any
material agreement, mortgage, indenture, debenture, trust,
instrument, judgment, decree, order, statute, rule or
governmental regulation to which it is subject (the "Other
Instruments") except for such failures as individually or in
the aggregate would not have a material adverse effect on
the results of operations or financial condition (a
"Material Adverse Effect") of Overseas. The execution,
delivery and performance of this Agreement and the issuance
and sale of the Overseas Stock, or the taking of any other
action contemplated by this Agreement will not result in any
material violation of or be in conflict with or constitute a
material default (with or without notice, lapse of time or
both) under any of the Other Instruments, except for such
violations or conflicts which would not have a Material
Adverse Effect.
(d) SEC Reports. Overseas has delivered or made available to
▇▇▇▇▇▇▇▇▇.▇▇▇ copies of the following reports of
▇▇▇▇▇▇▇▇▇.▇▇▇ (the "SEC Reports") heretofore filed with the
SEC: Form 10-K for the year ended December 31, 1998, and
Form 10-Q for the fiscal quarter ending March 31, 1999.
Except as disclosed therein, none of the SEC Reports as of
their respective dates of filing contained any untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made,
not misleading. The financial statements of Overseas
included in the SEC Reports, with the notes thereto, are in
accordance with the books and records of Overseas have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be
stated in the notes to such statements and, in the case of
unaudited statements, as permitted by Form 10-Q) throughout
the periods covered by such statements and present fairly
(subject, in the case of unaudited statements, to normal
year-end adjustments) in all material respects the financial
condition of Overseas and the results of its operations and
cash flows for the periods indicated.
(e) Absence of Changes. Since December 31, 1998, there has
been no event or condition of any character specifically
relating to Overseas which is likely to have a Material
Adverse Effect.
8
(f) Litigation. Except as set forth in the SEC Reports, there
are no litigation, claims, actions, proceedings or
investigations pending or, to the knowledge of Overseas,
threatened against Overseas which might have a Material
Adverse Effect.
(g) Offering. Subject to the accuracy of the ▇▇▇▇▇▇▇▇▇.▇▇▇'s
representations in Section 5 d(a) and 5 e(a) of this
Agreement, the offer, issuance and sale of the Overseas
Stock constitute transactions exempt from the registration
and prospectus delivery requirements of Section 5 of the
Securities Act and Overseas has obtained (or is exempt from
the requirement to obtain) all qualifications, permits, and
other consents required by all applicable state laws
governing the offer, sale or issuance of securities.
(h) Governmental Consents. On the Effective Date, no permit,
consent, approval or authorization of, or declaration to or
filing with, any governmental authority is required on
behalf of Overseas in connection with the execution,
delivery or performance of this Agreement or the
consummation of any transaction contemplated hereby, except
as have been obtained or accomplished or as would not have a
Material Adverse Effect.
(i) Compliance with Laws. Overseas is not in violation of any
law, regulation or requirement (including, but not limited
to, any law, regulation or requirement governing the quality
of the environment) which might have Material Adverse
Effect, and Overseas has not received notice of any such
violation.
(j) Brokers. Other than as specified on Exhibit B, No finder,
broker, agent, financial advisor or other intermediary has
acted on behalf of Overseas in connection with the offering
of the Overseas Stock or the negotiation or consummation of
this Agreement or any of the transactions contemplated
hereby.
(d) Representations and Warranties of Purchaser.
(i) Representations and Warranties of ▇▇▇▇▇▇▇▇▇.▇▇▇ as Purchaser.
▇▇▇▇▇▇▇▇▇.▇▇▇ represents and warrants to Overseas in connection
with its purchase of the Overseas Stock as follows:
(a) Purchase Entirely for Own Account. This Agreement is made
with ▇▇▇▇▇▇▇▇▇.▇▇▇ in reliance upon its representation to
Overseas, which by ▇▇▇▇▇▇▇▇▇.▇▇▇'s execution of this
Agreement ▇▇▇▇▇▇▇▇▇.▇▇▇ hereby confirms, that the Overseas
Stock to be received by it will be acquired for investment
for ▇▇▇▇▇▇▇▇▇.▇▇▇'s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any
part thereof, and that ▇▇▇▇▇▇▇▇▇.▇▇▇ has no present
intention of selling, granting any participation in, or
otherwise distributing the same. By executing this
Agreement, ▇▇▇▇▇▇▇▇▇.▇▇▇ further represents that it does not
have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of
the Overseas Stock.
(b) Disclosure of Information. ▇▇▇▇▇▇▇▇▇.▇▇▇ has received all
of the information it considers necessary or appropriate for
deciding whether to purchase the Overseas Stock.
▇▇▇▇▇▇▇▇▇.▇▇▇ has had an opportunity to ask questions and
receive answers from Overseas regarding the terms and
conditions of the offering of the Overseas Stock. The
foregoing, however, does not limit or modify the
representations and warranties of Overseas in Section 5 d(b)
or 5 e(b) of this Agreement.
(c) Investment Experience. ▇▇▇▇▇▇▇▇▇.▇▇▇ acknowledges that it
is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in
financial or business matters that it is capable of
evaluating the merits and risks of the investment in the
Overseas Stock.
9
(d) Restricted Securities. ▇▇▇▇▇▇▇▇▇.▇▇▇ understands that the
Overseas Stock it is purchasing is characterized as
"restricted securities" under the federal securities laws
inasmuch as they are being acquired from Overseas in a
transaction not involving a public offering and that under
such laws and applicable regulations such securities may be
resold without registration under the Securities Act, only
in certain limited circumstances. In this connection,
▇▇▇▇▇▇▇▇▇.▇▇▇ represents that it is familiar with Rule 144,
as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
(e) Accredited Investor. ▇▇▇▇▇▇▇▇▇.▇▇▇ is an accredited
investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
(ii) Representations and Warranties of Overseas as Purchaser. In the
event ▇▇▇▇▇▇▇▇▇.▇▇▇ elects the Stock Alternative as described in
Section 5(a) above, Overseas represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ in connection with its purchase of the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock as follows:
(a) Purchase Entirely for Own Account. This Agreement is made
with Overseas in reliance upon its representation to
▇▇▇▇▇▇▇▇▇.▇▇▇, which by Overseas' execution of this
Agreement Overseas hereby confirms, that the ▇▇▇▇▇▇▇▇▇.▇▇▇
Stock to be received by it will be acquired for investment
for Picture's own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part
thereof, and that Overseas has no present intention of
selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, Overseas
further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to
any third person, with respect to any of the ▇▇▇▇▇▇▇▇▇.▇▇▇
Stock.
(b) Disclosure of Information. Overseas has received all of
the information it considers necessary or appropriate for
deciding whether to purchase the ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock.
Overseas has had an opportunity to ask questions and receive
answers from ▇▇▇▇▇▇▇▇▇.▇▇▇ regarding the terms and
conditions of the offering of the ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock. The
foregoing, however, does not limit or modify the
representations and warranties of ▇▇▇▇▇▇▇▇▇.▇▇▇ in Section 5
d(a) or 5 e(a) of this Agreement.
(c) Investment Experience. Overseas acknowledges that it is
able to fend for itself, can bear the economic risk of its
investment and has such knowledge and experience in
financial or business matters that it is capable of
evaluating the merits and risks of the investment in the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock.
(d) Restricted Securities. Overseas understands that the
▇▇▇▇▇▇▇▇▇.▇▇▇ Stock it is purchasing is characterized as
"restricted securities" under the federal securities laws
inasmuch as they are being acquired from ▇▇▇▇▇▇▇▇▇.▇▇▇ in a
transaction not involving a public offering and that under
such laws and applicable regulations such securities may be
resold without registration under the Securities Act, only
in certain limited circumstances. In this connection,
Overseas represents that it is familiar with Rule 144, as
presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act. Following the
merger of ▇▇▇▇▇▇▇▇▇.▇▇▇ into Yahoo! Inc. ("Yahoo"), Overseas
will have the right to exchange its shares of ▇▇▇▇▇▇▇▇▇.▇▇▇
stock into shares of Common Stock of Yahoo! Inc. ("Yahoo
Stock"). Overseas will not sell or otherwise dispose of such
Yahoo Stock until at least one (1) year after the Effective
Date.
(e) Accredited Investor. Overseas is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
10
(e) Rule 144 Compliance. At all times after the date hereof, each of
▇▇▇▇▇▇▇▇▇.▇▇▇ and Overseas agrees to take such action as may be
necessary to enable a holder of its shares to complete the public sale
of such shares in accordance with Rule 144.
(f) Delivery of Certificates. Overseas will deliver to ▇▇▇▇▇▇▇▇▇.▇▇▇
certificates representing the purchase of the stock by ▇▇▇▇▇▇▇▇▇.▇▇▇
pursuant to this paragraph by no later than thirty days after the
Effective Date. In the event ▇▇▇▇▇▇▇▇▇.▇▇▇ elects the Stock
Alternative as described in Section 5(a) above, ▇▇▇▇▇▇▇▇▇.▇▇▇ will
deliver to Overseas certificates representing the purchase of the
stock by Overseas pursuant to this paragraph by no later than thirty
days after the Effective Date.
(g) Legend. The parties hereto further agree that any certificate
evidencing the ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock (under the Stock Alternative) or the
Overseas Stock shall bear one or more of the following legends, as
indicated:
(i) Unregistered Stock Legend. The ▇▇▇▇▇▇▇▇▇.▇▇▇ Stock and the
Overseas Stock shall have the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, HAVE
BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
SECURITIES ACT COVERING THE SALE OR OTHER TRANSFER OR AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE ISSUER, THAT REGISTRATION UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
(ii) Trading Restriction Legend. Any Yahoo Stock issued to Overseas
pursuant to Section 5(d)(ii)(d) of this Agreement shall have the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF ON OR BEFORE JULY 18, 2000.
(iii) Other Legend. Any legend required by the laws of any state or
other jurisdiction.
6. OVERSEAS REPRESENTATIONS AND WARRANTIES:
(a) Power and Authority. Overseas hereby represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ that: (i) Overseas has all requisite corporate power and
authority to execute and deliver this Agreement, and to perform its
obligations hereunder and to consummate the transactions contemplated
hereby; and (ii) this Agreement has been duly authorized, executed and
delivered by Overseas, constitutes the valid and binding agreement of
Overseas, and is enforceable against Overseas in accordance with its
terms.
(b) Ownership. Overseas hereby represents and warrants to ▇▇▇▇▇▇▇▇▇.▇▇▇
that (i) the Movies are owned by or licensed to Overseas, (ii)
Overseas has all necessary rights and licenses to license, sell and
distribute the Movies as provided herein, (iii) Overseas has all
necessary rights and licenses to grant to ▇▇▇▇▇▇▇▇▇.▇▇▇ the right and
11
license to use Overseas' Marks, and the marks, names, and likenesses
of all third parties associated with the Movies and Merchandise
subject to third party restrictions, as provided herein; (iv) Overseas
holds all rights material to this Agreement throughout the United
States and license periods set forth on the applicable EXHIBIT A or
replacement EXHIBIT A, including the encoding, transmission,
retransmission, distribution, performance, display and broadcast of
the Movies and the Broadcast Inventory by ▇▇▇▇▇▇▇▇▇.▇▇▇, (v)
▇▇▇▇▇▇▇▇▇.▇▇▇'s copying and broadcast of the Movies as contemplated by
this Agreement, and ▇▇▇▇▇▇▇▇▇.▇▇▇'s exercise of any rights granted by
Overseas herein, will not violate or infringe any right of privacy or
publicity, any patent, copyright, trademark, moral right or other
intellectual property right, or any other right of any third party,
and (vi) the Movies as provided by Overseas to ▇▇▇▇▇▇▇▇▇.▇▇▇ do not
contain any libelous, defamatory, obscene, scatological or unlawful
material.
(c) Third Party Rights. Overseas hereby represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ that Overseas has obtained or will obtain all third
party clearances, permissions and licenses which are necessary in
connection with the broadcast by ▇▇▇▇▇▇▇▇▇.▇▇▇ of the Movies, and the
exercise by ▇▇▇▇▇▇▇▇▇.▇▇▇ of its other rights under this Agreement, in
accordance with this Agreement, throughout the United States,
including, without limitation, with respect to the use of any
copyrighted and/or trademarked materials and the use of the name,
likeness and/or biographical materials, and for the payment of all
applicable guild, music licensing and/or other similar fees relating
to or arising from ▇▇▇▇▇▇▇▇▇.▇▇▇'s activities under this Agreement.
(d) Internet Broadcast Rights. Overseas hereby represents and warrants
to ▇▇▇▇▇▇▇▇▇.▇▇▇ that: (i) all Movies are licensed to ▇▇▇▇▇▇▇▇▇.▇▇▇
for unlimited Internet broadcast, subject only to the restrictions set
forth on EXHIBIT A; (ii) that Overseas has listed on EXHIBIT A all
applicable geographic and transmission limitations that apply to each
Movie; and (iii) Overseas will promptly provide to ▇▇▇▇▇▇▇▇▇.▇▇▇ a
replacement EXHIBIT A to update the Movies and restrictions listed in
the EXHIBIT A as such information may change from time to time.
(e) Consents and Permissions. Overseas hereby represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ that, to the extent required, Overseas has obtained or
will obtain all requisite consents and permissions of labor
organizations and pay any and all residuals, payments, fees or
royalties, if any, payable under any collective bargaining agreement
or otherwise, in connection with ▇▇▇▇▇▇▇▇▇.▇▇▇'s exercise of the
rights granted under this Agreement. By way of example, and not
limitation or obligation, as between ▇▇▇▇▇▇▇▇▇.▇▇▇ and Overseas,
Overseas would be liable to pay any residuals required to be paid
under any "Basic Agreement" of the Director's Guild of America, the
Writer's Guild of America, or the Screen Actor's Guild for
"Supplemental Market" showings of the Movies. ▇▇▇▇▇▇▇▇▇.▇▇▇ shall
provide to Overseas all information concerning the transmission and
distribution of the Movies as is reasonably necessary for Overseas to
comply with the obligations of this subparagraph.
(f) E&O Insurance. Overseas hereby represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ that Overseas has obtained, and will keep in force for
the entire term of this Agreement and two (2) years thereafter,
professional errors and omissions insurance in the amount of
$1,000,000 per occurrence and $3,000,000 in the aggregate to cover all
risks relevant to this Agreement and that ▇▇▇▇▇▇▇▇▇.▇▇▇ is an
additional insured party.
(g) Territory and Period Limitations. Overseas hereby represents and
warrants to ▇▇▇▇▇▇▇▇▇.▇▇▇ that all applicable territory and period
limitations will be provided by Overseas on EXHIBIT A, and that such
limitations will be no greater for any Movie than the contractual
limitations to which Overseas is bound pursuant to its third party
agreements relating to such Movie.
(h) Additional Movies. Overseas hereby represents and warrants to
▇▇▇▇▇▇▇▇▇.▇▇▇ that Overseas shall use its good faith commercially
reasonable efforts, to secure for the term of this Agreement the
United States right to broadcast and distribute additional movies,
motion pictures and/or other audiovisual works on the System in all
12
manners contemplated in this Agreement for up to at least 20
additional movies, motion pictures and/or other audiovisual works of
similar or better acclaim and popularity to the Movies to be delivered
to ▇▇▇▇▇▇▇▇▇.▇▇▇ between August 1, 2001 and August 1, 2002, along with
the right to grant all necessary sublicenses to ▇▇▇▇▇▇▇▇▇.▇▇▇ to
exercise those rights. ▇▇▇▇▇▇▇▇▇.▇▇▇ acknowledges that such additional
Movies may include movies, motion pictures and/or other audiovisual
works that have been previously licensed to third parties.
7. ▇▇▇▇▇▇▇▇▇.▇▇▇ REPRESENTATIONS AND WARRANTIES:
(a) Power and Authority. ▇▇▇▇▇▇▇▇▇.▇▇▇ hereby represents and warrants to
Overseas that (i) ▇▇▇▇▇▇▇▇▇.▇▇▇ has all requisite corporate power and
authority to execute and deliver this Agreement, and to perform its
obligations hereunder and to consummate the transactions contemplated
hereby; and (ii) this Agreement has been duly authorized, executed and
delivered by ▇▇▇▇▇▇▇▇▇.▇▇▇, constitutes the valid and binding
agreement of ▇▇▇▇▇▇▇▇▇.▇▇▇, and is enforceable against ▇▇▇▇▇▇▇▇▇.▇▇▇
in accordance with its terms.
(b) Period Restrictions. ▇▇▇▇▇▇▇▇▇.▇▇▇ hereby represents and warrants to
Overseas that ▇▇▇▇▇▇▇▇▇.▇▇▇ will comply with the period restrictions
specified on the most recently received replacement EXHIBIT A and such
other contractual restrictions provided to ▇▇▇▇▇▇▇▇▇.▇▇▇ in advance of
the broadcast and in writing by Overseas. ▇▇▇▇▇▇▇▇▇.▇▇▇ warrants that
it will also use commercially reasonable efforts to use the best
technology available to comply with the territorial restrictions
specified on such EXHIBIT A, including, but not limited to, requiring
Users to enter in their zip code and limiting access to the Movies to
such Users that do not enter in a zip code within the unrestricted
territories.
8. INDEMNIFICATION:
(a) Overseas Obligation. Overseas agrees to indemnify and hold harmless
▇▇▇▇▇▇▇▇▇.▇▇▇ and its officers, directors, employees and agents from
and against any and all losses, claims, damages, liabilities,
obligations, penalties, judgments, awards, costs, expenses and
disbursements, including without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing or
defending any action, suit, proceeding or investigation, caused by,
relating to, based upon, arising out of or in connection with any
breach by Overseas of the representations, warranties or agreements
made by it under this Agreement.
(b) ▇▇▇▇▇▇▇▇▇.▇▇▇ Obligation. ▇▇▇▇▇▇▇▇▇.▇▇▇ agrees to indemnify and hold
harmless Overseas and its officers, directors, employees and agents
from and against any and all losses, claims, damages, liabilities,
obligations, penalties, judgments, awards, costs, expenses and
disbursements, including without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing or
defending any action, suit, proceeding or investigation, caused by,
relating to, based upon, arising out of or in connection with any
breach by ▇▇▇▇▇▇▇▇▇.▇▇▇ of the representations, warranties or
agreements made by it under this Agreement.
(c) Indemnity Procedures. A party seeking indemnity under this Agreement
will inform the other party of the claim, demand or action promptly
after having been formally advised thereof. A party entitled to
indemnity under this Agreement will have the right, at its sole
expense, to participate in the defense of the claim, demand or action
with counsel of its own choice; provided, however, that the party
providing indemnity will have the right at all times, in its sole and
absolute discretion, to have ultimate control of the conduct thereof.
Pending the determination of any claim, demand or action for which a
party is entitled to indemnity, that party will have the right, in its
sole and absolute discretion, to withhold payment of any monies
13
otherwise payable to the party responsible for providing indemnity in
an amount reasonably related to such claim (including legal costs and
attorneys' fees) anticipated in connected therewith.
9. AUDIT:
The Parties shall maintain, for a minimum of two (2) years after the
completion of this Agreement, adequate books, records and supporting
documents to verify the amounts, recipients and uses of all
disbursements of funds passing in conjunction with said Agreement. All
books, records and supporting documents related to this Agreement shall
be made available to a Party for review and audit at the place where
such documents are normally retained upon thirty (30) days notice to
the other Party at such auditing Party's sole cost and expense unless
the audit reveals an underpayment of five percent (5%) by audited
Party, in which case the audited Party shall pay the auditing Party's
reasonable costs for the performance of such audit. Such audit shall
occur no more than once per year during normal business hours.
10. TERM:
(a) General. This Agreement shall be effective commencing July 19, 1999
and ending July 18, 2004.
(b) Termination for Cause. Notwithstanding the foregoing, either party
shall have the right at any time to terminate this Agreement,
effective upon written notice of termination, without prejudice to any
other legal rights to which such terminating party may be entitled,
upon the occurrence of any one or more of the other party's failure to
comply in any respect with its material obligations, representations
or warranties contained in this Agreement, and such party's failure to
cure the same within thirty (30) days of receipt of notice of such
failure.
(c) No Liability for Lawful Termination. Neither party to this Agreement
shall be liable to the other, solely by reason of the permitted
termination of this Agreement, for compensation, reimbursement or
damages on account of any loss of prospective profits on anticipated
sales or on account of expenditures, investments, leases or other
commitments relating to the business or goodwill of either party to
this Agreement, notwithstanding any law to the contrary
11. GENERAL:
(a) Entire Agreement. This Agreement shall constitute the entire
understanding between the Parties, and supersedes all prior
negotiations or understandings between the Parties concerning the
subject matter contained herein.
(b) Trademark Ownership. Each party acknowledges and agrees that: (i)
the other party's Marks are and shall remain the sole property of the
other party, (ii) nothing in this Agreement shall confer in the party
any right of ownership in the other party's Marks, and (iii) the party
shall not now or in the future contest the validity of the other
party's Marks.
(c) Survival. All provisions hereof regarding amounts payable by
Overseas to ▇▇▇▇▇▇▇▇▇.▇▇▇ and by ▇▇▇▇▇▇▇▇▇.▇▇▇ to Overseas (as
applicable) shall survive the expiration or earlier termination of
this Agreement until such amounts are paid in full to the payee;
further provided, Paragraphs 1, 4, 5, 6, 7, 8, 10 and 11, and all
portions of this Agreement limiting the use of any Confidential
Information, shall survive termination or expiration of this
Agreement.
(d) Governing Law and Venue. This Agreement shall be governed by the
laws of the state of Texas applicable to contracts entered into and to
be performed entirely within the State of Texas. The parties expressly
agree that any action at law or in equity arising out of or relating
to this Agreement shall be filed only in the state and federal courts
located in Dallas County, Dallas, Texas. The parties hereby consent
14
and submit to jurisdiction of such courts for the purposes of
litigating any such action.
(e) ▇▇▇▇▇▇▇▇▇.▇▇▇ Website. ▇▇▇▇▇▇▇▇▇.▇▇▇ will develop and display
materials on the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site to advertise the Movies, which
materials may, in the sole and absolute discretion of ▇▇▇▇▇▇▇▇▇.▇▇▇,
incorporate the materials delivered from Overseas to ▇▇▇▇▇▇▇▇▇.▇▇▇
under this Agreement. Notwithstanding anything in this Agreement to
the contrary, ▇▇▇▇▇▇▇▇▇.▇▇▇ will have sole and absolute discretion to
determine all aspects of the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site, including the
content, structure and sequence of all material appearing in the
▇▇▇▇▇▇▇▇▇.▇▇▇ Web site, and ▇▇▇▇▇▇▇▇▇.▇▇▇ reserves the right to reject
or remove any materials from the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site for any reason
at any time, regardless of any prior acceptance, display or
transmission of any such materials, and ▇▇▇▇▇▇▇▇▇.▇▇▇ reserves the
right to modify the ▇▇▇▇▇▇▇▇▇.▇▇▇ Web site in its sole discretion at
any time during the term of this Agreement.
(f) Implied Warranty Disclaimer. EXCEPT AS EXPRESSLY AND UNAMBIGUOUSLY
SET FORTH IN THIS AGREEMENT, THE ▇▇▇▇▇▇▇▇▇.▇▇▇ WEB SITE AND ANY
SERVICE FROM ▇▇▇▇▇▇▇▇▇.▇▇▇ ARE PROVIDED "AS IS" AND WITHOUT WARRANTY,
EXPRESS OR IMPLIED, AND ▇▇▇▇▇▇▇▇▇.▇▇▇ EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING ANY WARRANTY OF QUALITY, TITLE, PERFORMANCE,
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE.
(g) Liability Limits.
(i) Force Majeure. Neither party will be liable for any failure or
delay in performing under this Agreement where such failure or
delay is due to causes beyond its reasonable control, including
natural catastrophes, governmental acts or omissions, laws or
regulations, terrorism, labor strikes or difficulties,
communications systems breakdowns, hardware or software failures,
transportation stoppages or slowdowns or the inability to procure
supplies or materials. ▇▇▇▇▇▇▇▇▇.▇▇▇ SHALL NOT BE LIABLE FOR ANY
LOSS OF DATA, OR ANY INTERRUPTION OF SERVICE, DUE TO ANY CAUSE, DUE
TO ANY FACTORS NOT WITHIN ▇▇▇▇▇▇▇▇▇.▇▇▇'S CONTROL.
(ii) No Consequential Damages. IN NO EVENT WILL ▇▇▇▇▇▇▇▇▇.▇▇▇ BE
LIABLE TO OVERSEAS OR ANY THIRD PARTY FOR ANY LOST PROFITS, LOST
SAVINGS OR INCIDENTAL OR CONSEQUENTIAL DAMAGES, EVEN IF
▇▇▇▇▇▇▇▇▇.▇▇▇ IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
OCCURRING.
(iii) Liability Cap. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, WITH THE EXCEPTION OF THE INDEMNIFICATION OBLIGATIONS SET
FORTH IN PARAGRAPH 8, IN THE EVENT THAT ▇▇▇▇▇▇▇▇▇.▇▇▇ IS LIABLE TO
OVERSEAS OR ANY THIRD PARTY FOR DAMAGES, THE TOTAL LIABILITY OF
▇▇▇▇▇▇▇▇▇.▇▇▇ UNDER THIS AGREEMENT WILL BE LIMITED TO THE AMOUNT
PAID BY ▇▇▇▇▇▇▇▇▇.▇▇▇ TO OVERSEAS UNDER THIS AGREEMENT IN THE SIX
(6) MONTHS PRIOR TO THE EVENT GIVING RISE TO THE LIABILITY.
(h) No Partnership. The parties hereto are independent parties, and no
partnership, joint venture, enterprise or employment relationship
shall be created or inferred by the existence or performance of this
Agreement.
(i) Severability; Signature; Headings. Should any part of this Agreement
be found to be illegal or otherwise unenforceable, both Parties shall
continue to be bound under the remaining parts of this Agreement, if
the purpose and intent of the Parties can be carried out under the
remaining parts of this Agreement. A facsimile signature shall be
deemed an original for purposes of this Agreement. The headings of
this Agreement are for convenience of reference only, and do not limit
or alter the Parties' respective rights and obligations under this
Agreement.
15
(j) Assignment; Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective
successors and permitted assigns. ▇▇▇▇▇▇▇▇▇.▇▇▇ may assign this
Agreement to any entity. Overseas may, upon written notice to
▇▇▇▇▇▇▇▇▇.▇▇▇, to assign this Agreement, but only to a firm,
corporation or company which is owned and controlled by Overseas;
provided, however that: (i) Overseas has obtained the prior written
consent of ▇▇▇▇▇▇▇▇▇.▇▇▇ to any such assignment of this Agreement;
(ii) Overseas has provided ▇▇▇▇▇▇▇▇▇.▇▇▇ with a copy of such
assignment; (iii) such assignee assumed in writing all of the rights
and obligations of Overseas under this Agreement; (iv) such assignment
will not alter, impair or cause ▇▇▇▇▇▇▇▇▇.▇▇▇ to lose any of its
rights under this Agreement; and (v) Overseas and any such assignee
will execute such documents as ▇▇▇▇▇▇▇▇▇.▇▇▇ will require to preserve
the rights of ▇▇▇▇▇▇▇▇▇.▇▇▇ under this Agreement.
(k) No Breach Without Notice. ▇▇▇▇▇▇▇▇▇.▇▇▇ will not be deemed to be in
breach of this Agreement, unless, within thirty (30) days after
written notice from Overseas of such alleged breach, accompanied by
documentation sufficient to support such allegations sent by certified
or registered mail, return receipt requested, ▇▇▇▇▇▇▇▇▇.▇▇▇ does not
either: (i) cure such breach; or (ii) contest such claim, in whole or
in part, by written notice to Overseas. In the event that
▇▇▇▇▇▇▇▇▇.▇▇▇ contests any such claim, ▇▇▇▇▇▇▇▇▇.▇▇▇ will not be in
breach of this Agreement unless such claim is reduced to a final
non-appealable judgment by a court of competent jurisdiction and
▇▇▇▇▇▇▇▇▇.▇▇▇ has failed to cure such breach within thirty (30) days
after ▇▇▇▇▇▇▇▇▇.▇▇▇ has received written notice of the entry of such
final non-appealable judgment.
(l) No Third Party Beneficiaries. Nothing contained in this Agreement
will be deemed to create, or be construed as creating, any third party
beneficiary right of action upon any third party or entity whatsoever,
in any manner whatsoever.
(m) Marketing Practices. Overseas will: (i) conduct business in a manner
that reflects favorably at all times on the good name, goodwill and
reputation of ▇▇▇▇▇▇▇▇▇.▇▇▇; (ii) not employ deceptive, misleading or
unethical practices that are or might be detrimental to ▇▇▇▇▇▇▇▇▇.▇▇▇
or the public, including, without limitation disparagement of
▇▇▇▇▇▇▇▇▇.▇▇▇; (iii) not make any false or misleading representations
with regard to ▇▇▇▇▇▇▇▇▇.▇▇▇; (iv) not publish or employ or cooperate
in the publication or employment of any misleading or deceptive
advertising material; or (v) not engage in illegal or deceptive trade
practices, or any other practices proscribed under this Section 10(m).
(n) No Custom. It is expressly understood and agreed that, there being
no expectation of the contrary between the parties, no usage of trade
or custom and practice within the industry, and no regular practice or
method of dealing between the parties, will be used to modify,
interpret, supplement or alter in any manner the express terms of this
Agreement.
(o) Notice. Any and all notices, communications and demands required
herein by either party hereto shall be in writing and shall deemed to
have been given only when: (a) served personally to the addresses
listed below; (b) served by a recognized overnight delivery service
such as Federal Express, UPS or Express Mail to the addresses listed
below; (c) served by United States Mail, certified, postage prepaid,
return receipt requested to the addresses listed below, or (d)
received by facsimile (as evidenced by the transmission report of the
facsimile machine of the transmitting party acknowledging a good
transmission) if sent by facsimile to the numbers listed below:
If to Overseas, to: If to ▇▇▇▇▇▇▇▇▇.▇▇▇, to:
------------------- ------------------------
Overseas Filmgroup, Inc. ▇▇▇▇▇▇▇▇▇.▇▇▇ inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: 310/▇▇▇-▇▇▇▇ Telephone: 214/▇▇▇-▇▇▇▇
16
Facsimile: 310/855-0719 Facsimile: 214/748-6657
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
General Counsel
IN WITNESS WHEREOF, the Parties hereto have caused the foregoing agreement to be
signed by a duly authorized agent of each party, the day and year first above
written.
OVERSEAS: ▇▇▇▇▇▇▇▇▇.▇▇▇ INC.:
By: ___________________________ By: ___________________________
Name: ________________________ Name: _________________________
Title: _________________________ Title: __________________________
DATE: DATE:
17
EXHIBIT A
MOVIES
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__________________
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
EXHIBIT B
From: ▇▇▇▇▇▇ & Co. (as agent for itself and Berliner Bank A.G.) ( "The Bank")
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
To: ▇▇▇▇▇▇▇▇▇.▇▇▇ ("Broadcast")
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs,
Pursuant to an agreement ("the Agreement") dated as of May , 1999 between
Broadcast and Overseas Filmgroup, Inc. ("OFG"), Broadcast has acquired certain
rights ("the Broadcast Rights") in and to the motion pictures referred to
therein ("the Pictures") in the Territory (defined herein as in the Agreement)
and OFG has granted Broadcast a security interest ("the Broadcast Security
Interest") in and to the Broadcast Rights. Pursuant to various security
agreements and mortgages of copyright, OFG has granted to the Bank a security
interest ("the Bank's Security Interest") in and to certain collateral to secure
all amounts from time to time due, owing or payable by OFG to the Bank ("the
Indebtedness"). Such collateral includes without limitation the Broadcast
Rights. In this letter "the Bank's Broadcast Security Interest" means the Bank's
Security Interest in the Broadcast Rights only.
Subject to Broadcast not being in material breach or default of the Agreement,
the Bank agrees that the Bank's Broadcast Security Interest and the Broadcast
Security Interest shall have equal priority provided, however, that no exercise
of the Bank's Broadcast Security Interest will derogate from, diminish,
restrict, alter, modify, ▇▇▇▇▇, curtail, disturb, interrupt, suspend, terminate,
rescind, abrogate, interfere with, impair, nullify or otherwise adversely affect
Broadcast's full and unencumbered exercise of the Broadcast Rights, and Bank's
rights to pursuant to the Bank's Broadcast Security Interest shall be subject
and subordinate to all rights of Broadcast (and its licensees, assignees, agents
and subdistributors) to distribute and otherwise exploit the Pictures throughout
the Territory without interference by Bank or any person, firm or corporation
deriving title to the Bank's Broadcast Security Interest through Bank. Until
such time as Bank shall have been repaid all Indebtedness, Broadcast agrees that
it shall not take any action as a secured creditor or copyright mortgagee with
respect to the Broadcast Rights in such a manner so as to derogate from,
diminish, restrict, alter, modify, ▇▇▇▇▇, curtail, disturb, interrupt, suspend,
terminate, rescind, abrogate, interfere with, impair, or nullify Bank's
Broadcast Security Interest.
Very truly yours,
▇▇▇▇▇▇ & CO., AS AGENT FOR ITSELF AND BERLINER BANK
By:__________________________
Its:___________________________
Accepted and agreed to:
▇▇▇▇▇▇▇▇▇.▇▇▇
By:__________________________
Its:__________________________