EXHIBIT 10.38
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made the day of October, 2004
BETWEEN:
(1) KEYDATA MEDIA & MARKETING 1 LLP whose registered office is at 0 Xxxxxxx
Xxx, Xxxxxx XX0X 0XX (registered in England noOC308423) (the 'Partnership')
and
(2) TM FILM DISTRIBUTION INC. whose office is situated at 000 Xxxxxxx Xxxxx,
Xxxx Xxxx XX 00000 XXX (the 'Distributor')
RECITALS
(A) The Partnership owns or controls certain rights in films.
(B) The Partnership and the Distributor wish to enter into arrangements for the
distribution and exploitation of films upon the terms and conditions and
for the consideration set forth herein.
DEFINITIONS AND INTERPRETATION
The following definitions apply in this Agreement:
'Accounting Date' 60 days from the end of each Accounting Period
during the Term
'Accounting Period' successive 3 monthly periods ending on 31 March
30 June 30 September and 31 December in each
year
'Agreement' this agreement and any and all schedules
annexures and exhibits attached to it or
incorporated in it by reference
'Airline Rights' the right to show or play the Films by any
manner or means or make available Videograms to
passengers on aircraft registered in any
country in the Territory
'Average Occupants' in respect of any hotel motel or similar
establishment or other residential unit or
other dwelling whatever not being a private
residence the average number of persons
resident during any month
'Basic Cable' a group of Cable Television Channels selected
by or supplied to any Cable Television
Subscriber with or without Interactive Services
in consideration for a single aggregate
subscription or other periodic or other fee
charged by the Cable Operator which is not
allocated or apportioned to any channel
'Basic Satellite' a group of Satellite Television Channels
selected by or supplied to any Satellite
Television Subscriber in consideration for a
single aggregate subscription or other periodic
or other fee charged by the Satellite Operator
which is not allocated or apportioned to any
channel
'Broadcast' any transmission by Wireless Telegraphy which
is transmitted for presentation to and capable
of lawful reception by members of the public
and which originates from any terrestrial
station in the Territory which shall include
Secondary Transmission by Wireless Telegraphy
or from a satellite of any signals transmitted
to such satellite from the Territory and shall
include Secondary Transmission by means of MVDS
and by means of cable or satellite pursuant to
the provisions of the Cable and Xxxxxxxxxxxx
Xxx 0000, section 13(1), and the Broadcasting
Xxx 0000, section 134, Schedule 12, Part III,
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paragraph 444, or any amending or replacing or
analogous legislation but shall exclude
Secondary Transmission whether by Cable
Television Satellite Television MVDS Wireless
Telegraphy or any other means of any
transmission originating directly or indirectly
outside the Territory
'Cable Operator' any person firm or Partnership licensed by the
Department of Trade and Industry and/or the
Independent Television Commission and/or their
successor bodies or equivalent bodies pursuant
to the laws of any country to provide Cable
Programme Services
'Cable Programme Service' has the meaning ascribed to it in the
Copyright, Designs and Patents Xxx 0000
'Cable Television' Basic Cable and/or Pay Cable
'Cable Television Channel' any Cable Programme Service provided by a Cable
Operator
'Cable Television Rights' the right to authorise the exploitation of the
Film by Cable Television or Pay Cable
'Cable Television Subscriber' any Subscriber to a Cable Television Channel
'Channel' any Cable Television Channel or Satellite
Television Channel
'Delivery' delivery of the Delivery Material in accordance
with clause 7
'Delivery Date' the number of days after completion of each
Film as agreed between the parties
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'Delivery Material' the delivery material in respect of the Films
specified in Schedule 1 including without
limitation any Publicity Material referred to
in such schedule
'Distribution Expenses' any distribution expenses to the extent the
Distributor shall have produced vouchers or
other evidence satisfactory to the Partnership
of its expenditure approved by the Partnership
being of the type short particulars of which
are contained in Schedule 2 including the
Minimum Advertising Expenditure
"Distributor Loans" Loans which may be required by the Partnership
to be made by the Distributor to the
Partnership of amounts equal to the excess (if
any) of the amount specified in Schedule 5 for
the year in question over the amount of the
Partnership's share of Gross Receipts for that
year
'Films' the monochrome or colourcinema or television
films short particulars of which are contained
in Schedule 3 and such other films as the
Partnership may determine in its sole
discretion shall be made subject to the terms
of this Agreement as the same shall be
identified by Appendices to this Agreement as
signed by the parties from time to time
'Free Television' any Broadcast capable of reception without the
use of any decoding decrypting or similar
device by means of a standard television set
aerial or roof top aerial and/or any Broadcast
provided by
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Secondary Transmission by a Cable Operator
pursuant to the Broadcasting Xxx 0000 or any
amending replacing or analogous legislation for
which in either case no fee is paid by the
viewer other than statutory licence fees
government taxes or levies relating to the
reception of Broadcasts
'Free Television Rights' the right to exploit and/or authorise the
exploitation of the Films by Free Television
'Gross Receipts' 100% of all gross money and income of every
kind including without limitation any awards
subsidies or government allowances received or
receivable by the Distributor its
sub-distributors sub-licensees directly or
indirectly from the exercise of the Rights in
the Territory during the Term other than any
money or income derived from the Videogram
Rights and in respect of the Videogram Rights
the Royalty in respect of 100% of Videograms
sold or consigned for sale by the Distributor
its subsidiaries or licensees in the Territory
during the Term but expressly including all
other sums arising whether or not by way of
judgement settlement or compromise for
infringement or interference with any of the
Rights including without limitation any and all
advances minimum guarantees and security
deposits whether or not earned refundable or
recoupable which sums shall be and remain the
exclusive property of the Partnership and at
all times be held by the Distributor upon trust
for the
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Partnership until application in accordance
with the provisions of this Agreement
'Interactive Service' any service provided by a Cable Operator by
means of which a Subscriber is capable of
conveying to the Cable Operator any images
sounds data or information other than signals
sent for the control of the service
'Laboratory' the laboratory or duplicating house nominated
by the Partnership
'MVDS' multipoint microwave video distribution systems
operating at frequencies between 2 Mhz and 25
Mhz
'Minimum Advertising such amount as agreed between the parties,
Expenditure' both parties acting reasonably on a film by
film basis
'Minimum Prints' such number as agreed between the parties, both
parties acting reasonably on a film by film
basis
'Minimum Screens' such number as agreed between the parties, both
parties acting reasonably on a film by film
basis
'Non-Theatrical Rights' the right to show or play the Films and/or
authorise others to do so for screening before
an audience by institutions or organisations
not primarily engaged in the business of
exhibiting motion pictures to the public
including without limitation educational social
and religious institutions churches businesses
industrial and civic organisations hospitals
libraries prisons
6
convents and orphanages and marine and military
installationsbut excluding hotels motels and
similar establishments
'P&A' printing, advertising and exploitation costs of
the Films
'P&A Fund' a separate and designated fund held by the
Distributor from which the Distributor can
defray actual P&A expenses in accordance with
the terms of this Agreement
"Participants Deferments" those sums which are agreed to be paid to
participants in accordance with the
participants' contracts or union agreements
'Pay Cable' any Cable Television Channel other than Basic
Cable receivable by any Cable Television
Subscriber for which a premium in excess of
[......] per channel per month is payable
whether on a 'pay-per-view' 'pay-per-channel'
'pay' subscription or other periodic or other
fee basis
'Pay Satellite' any Satellite Television Channel other than
Basic Satellite receivable by any Satellite
Television Subscriber for which a premium in
excess of [......] per channel per month is
payable whether on a 'pay-per-view'
'pay-per-channel' 'pay' subscription or other
periodic or other fee basis
'Publicity Material' the material relating to the Films short
particulars of which are set out in Schedule 1
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'Release Date' in respect of the Films short particulars of
which are set out in Schedule 3 such date set
out therein or such other date or dates as may
be specified by the Partnership in respect of
any other Film or Films
'Rights' the rights granted to the Distributor pursuant
to clause 1
'Royalty' the royalty in respect of the Videogram Rights
set out in Schedule 6
'Satellite Operator' any person firm or partnership licensed by the
Department of Trade and Industry and/or the
Independent Television Commission and/or their
successor bodies or equivalent bodies pursuant
to the laws of any country to provide programme
services by means of satellite
'Satellite Television' Basic Satellite and/or Pay Satellite
'Satellite Television Channel' any television programme service provided by
Satellite Operator
'Satellite Television Rights' the right to authorise exploitation of the
Films by means of Satellite Television or Pay
Satellite including without limitation by means
of so-called 'direct broadcast by satellite'
'direct to home' and 'satellite master antenna
television'
'Satellite Television any Subscriber to a Satellite Television
Subscriber' Channel
'Secondary Transmission' the reception and immediate retransmission in
the Territory of any
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transmission by Wireless Telegraphy [excluding
any Broadcast originating outside the
Territory]
'Ship Rights' the right to show or play the Films by
any manner or means or make available
Videograms to passengers on ships registered in
any country in the Territory expressly
excluding ships engaged solely in national
voyages within the Territory
'Subscriber' a private residential home or other residential
unit or other dwelling whatever not being a
private residence the owner or occupier or
licensee of which has contracted with a
Satellite Operator or a Cable Operator to
receive any Channel and in respect of any hotel
or motel or similar establishment or other
residential unit or other dwelling whatever not
being a private residence the owner or occupier
or licensee or management of which has so
contracted the number of Subscribers shall be
deemed to be the number of the Average
Occupants
'Subscription Television' any Broadcast for which a premium is payable
whether on a 'pay-per-view' 'pay-per-channel'
'pay' subscription or other periodic or other
fee basis
'Subscription Television Rights' the right to authorise the exploitation of the
Films by means of Subscription Television
'Television Availability Date' in respect of Cable Television, Free
Television, Satellite Television, Subscription
Television, such dates as
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may be specified by the Partnership in respect
of the Films
'Television Rights' the rights granted to the Distributor pursuant
to clause 1.1(d)
'Term' 15 years
'Territory' The World
'Theatrical Rights' the right to show or play the Films in public
by any manner or means in any medium to any
audience which has paid or is deemed pursuant
to any statutory provision now existing or in
the future enacted to have paid for admission
to the place where any of the Films is to be
seen or heard
'United Kingdom' the United Kingdom of Great Britain and
Northern Ireland Eire Channel Islands Isle of
Man Malta Gibraltar all territorial waters of
the foregoing including expressly but without
limitation the United Kingdom sector of the
continental shelf as designated pursuant to the
Continental Shelf Xxx 0000, section 1(7), and
all ships and aircraft registered in or flying
the flag of any of the foregoing and all oil
marine and military vessels and installations
situate in any of the foregoing
'Videogram' any video cassette video disc tape compact disc
digital video disc or other electronic magnetic
or other device whatever whether existing now
or developed in the future which may be derived
in whole or in part from the Delivery Material
alone or in conjunction
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with other audio or audio-visual material by
means of which visual images with or without
sounds derived from the Films may be perceived
reproduced or otherwise communicated directly
or with the aid of any machine or device
'Videogram Rights' the right to sell Videograms for resale
purposes only which right shall expressly
prohibit the provision of any Videograms to any
person on terms which permit that person to
make Videograms available to others on a rental
basis
'Wireless Telegraphy' the sending of electro-magnetic energy over
paths not provided by a material substance
constructed or arranged for that purpose
Any reference in this Agreement to any statute or statutory provision order or
regulation shall be construed as including a reference to that statute or
statutory provision order or regulation as from time to time amended modified
extended or re-enacted whether before or after the date of this Agreement and to
all statutory instruments orders regulations and directives modifying or
extending the same.
Unless the context otherwise requires words denoting the singular shall include
the plural and vice versa and words denoting any one gender shall include all
genders and words denoting persons shall include bodies corporate unincorporated
associations partnerships and individuals..
The word 'copyright' means the entire copyright including rental and lending
right database right and design right subsisting under the laws of the United
Kingdom and all analogous rights subsisting under the laws of each and every
jurisdiction throughout the world.
Unless otherwise stated time shall be of the essence for the purpose of the
performance of the Distributor's obligations pursuant to this Agreement.
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Unless otherwise stated references to clauses sub-clauses paragraphs
sub-paragraphs schedules annexures and exhibits relate to this Agreement.
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IT IS AGREED as follows:-
1 GRANT OF RIGHTS
1.1 In consideration of the undertakings of the Distributor in this
Agreement and subject to and conditional on the full and timely
performance and observance by the Distributor of its obligations
warranties and undertakings contained in this Agreement the Partnership
grants to the Distributor on a sole and exclusive basis throughout the
Territory during the Term:
(a) the Airline Rights;
(b) the Non-Theatrical Rights;
(c) the Ship Rights;
(d) the following Television Rights
the Cable Television Rights;
the Free Television Rights;
the Satellite Television Rights;
the Subscription Television Rights;
(e) the Theatrical Rights;
(f) the Videogram Rights.
in the Films short particulars of which are set out in Schedule 3 and in
any other Films as solely determined by the Partnership.
1.2 The rights granted pursuant to clause 1.1 are subject expressly to the
provisions of clause 16.
1.3 The Distributor shall have the non-exclusive right to use for the
purposes of publicity in connection only with the Films the name
biography and likeness of persons connected with the Films for the
purpose of exploiting the Rights in the Territory but not for the
purpose of any merchandising or product indorsement or tie-ins or other
activities independent of the exploitation by the Distributor of its
rights in connection with the Films.
2 P&A FUND
2.1 In consideration of the undertakings of the Distributor and subject to
and conditional on the full and timely performance and observance by the
Distributor of its obligations warranties and undertakings contained in
this Agreement the Partnership shall pay into the P&A Fund such sums
upon such dates from time to
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time as the parties shall agree and as the same shall be evidenced by
executed memoranda.
2.2 The Distributor shall use the P&A Fund solely for the purposes of actual
expenditure of P&A of the Films PROVIDED THAT:
2.2.2 The Distributor provides the Partnership with a marketing plan
in respect of each of the Films;
2.2.3 the Partnership has prior approval of the Distributor's heads of
expenditure on each of the Films, such approval not to be
unreasonably withheld;
2.2.4 the Distributor provides the Partnership with a breakdown of all
expenditure on each of the Films including provision of invoices
and receipts within 60 days of each item of expenditure, and
2.2.5 the Partnership or their appointed representatives attend key
P&A meetings held by the Distributor.
3 APPLICATION OF GROSS RECEIPTS AND DISTRIBUTOR LOANS
3.1 The Distributor shall pay the Partnership the percentage of Gross
Receipts as set out in the Recoupment Schedule at Schedule 7 and the
Distribution Loans if any such fall to be paid and payment is required
by written notice from the Partnership.
3.2 Each and every Distributor Loan shall be-
(i) interest free, and
(ii) repayable by the Partnership to the Distributor by ten equal
annual instalments commencing on the sixth anniversary of the
date on which the loan in question was made.
4 PAYMENT
4.1 All sums shall be paid by the due dates to the account of the
Partnership at Gerrard Private Bank (IOM) Limited at 0 Xxxxx Xxxxxxxx,
Xxxxxxx, Xxxx xx Xxx.
4.2 The Distributor Loans and all Gross Receipts payable to the Partnership
pursuant to this Agreement shall be gross amounts after the deduction
only of such taxes
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(if any) as described in clause 24 of this Agreement and subject to VAT
(if any) as described in clause 25 .
4.3 If the Distributor shall be prohibited or restricted from making
payments to the Partnership of any sum of money due pursuant to this
Agreement by reason of laws or currency regulations of the Territory
then the Distributor shall give written notice to the Partnership
advising the Partnership of such fact and shall make payment of any sums
which it is not capable of remitting to the Partnership into any bank
account or to any other entity as the Partnership may designate.
4.4 Pounds sterling or United States dollars shall be the currency of
account of this Agreement and where any sums are received in any other
currency such sums shall be converted at the mid-market rate of exchange
prevailing as provided by Bloomberg LP in London on the date payment is
due.
5 DISTRIBUTION
5.1 The Distributor, at all times relying on its own commercial judgement,
shall procure the initial theatrical release of each Film by the Release
Date in not less than the Minimum Screens and undertakes to procure the
manufacture of the Minimum Prints for each Film and to maintain each
Film in continuous theatrical distribution in the Territory for a period
consistent with good business judgement in order to obtain the maximum
Gross Receipts from the exploitation of the Theatrical Rights in such
Film.
5.2 The Distributor, at all times relying on its own commercial judgement,
shall procure the release of Videograms of each Film in the Territory.
5.3 The Distributor, at all times relying on its own commercial judgement,
shall procure the exploitation of the Cable Television Rights Satellite
Television Rights and Subscription Television Rights and Television
Rights in each Film in the Territory.
5.4 The Distributor, at all times relying on its own commercial judgement,
shall seek to enter into licence agreements for the Television Rights in
each Film in the Territory as soon as reasonably possible.
5.5 The Distributor undertakes to exploit the Rights in the Films in the
fairest possible manner and undertakes not to discriminate against any
of the Films in any way or
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to enter into blanket arrangements in connection with any of the Films
or use any of the Films in order to secure more advantageous terms for
any other Film or films.
5.6 The Distributor shall consult with the Partnership throughout the Term
in connection with all material aspects relating to the exploitation of
the Rights in the Territory including without limitation advertising
budgets release dates release patterns places of exhibition and
marketing strategy for the Films and shall give consideration in good
faith to the views of the Partnership.
5.7 The Distributor shall have the right to appoint sub-distributors or
sub-licensees of the Distributor PROVIDED THAT
(i) all such appointments shall be upon arms' length commercial
terms; and
(ii) the Distributor shall not structure its affairs whereby Gross
Receipts may be adversely affected; and
(iii) such sub-distributors' and sub-licensees' commissions or fees
shall not exceed 20% of income at source.
5.8 The Distributor undertakes to advertise and publicise the Films
throughout the Territory during the Term so as to maximise the Gross
Receipts which may be derived from the exploitation of the Rights and
undertakes to procure the expenditure solely in connection with each
Film of not less than the relevant Minimum Advertising Expenditure
exclusive of any Value Added Tax or similar taxes or other costs
attributable to any Distributor-related entity and exclusive of any
rebates refunds discounts or other amounts paid back or credited to the
Distributor and in the event any advertising expenditure in connection
with any Film relates also to other films the apportionment of
expenditure between all films is to be made on a fair and reasonable
basis.
5.9 If the Distributor spends more than the Minimum Advertising Expenditure
in respect of any Film the excess shall not be recoverable by the
Distributor.
5.10 If the Distributor fails to procure the expenditure of the Minimum
Advertising Expenditure exclusively in connection with any Film the
Distributor confirms and agrees with the Partnership that the loss of
the Partnership shall not be capable of evaluation but undertakes in the
event of any shortfall in such Minimum Advertising Expenditure in
connection with any Film to pay to the Partnership
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within 30 days from the expiry of 6 months from the relevant Release
Date 150% of the amount of such shortfall by way of liquidated damages.
5.11 The Distributor shall audit and make checks at frequent intervals of all
approved sub-distributors and sub-licensees and all theatrical
exhibitors of the Films in the Territory and shall make the results of
all such checks and audits fully and freely available to the Partnership
and shall do all that is necessary to maximise and expedite collections
from exhibitors and all other persons in the Territory.
5.12 The Films shall not be exhibited as part of a double feature or other
multiple feature engagement without the prior written approval of the
Partnership and if any of the Films is exhibited in any cinema together
with any so-called 'short subject' then no more than 6% of the total
exhibition receipts shall be allocated to such short subject without the
prior written consent of the Partnership.
5.13 The Distributor shall not license the exhibition of the Films to any
cinema in which the Distributor or any officer or director of the
Distributor or any connected partnership has any direct or indirect
interest except upon terms and conditions which are consistent with
those entered into by such cinema with non-related distributors and upon
the best reasonably obtainable commercial terms.
5.14 The Distributor shall not enter the Films for presentation in any
festival or similar event without the prior written consent of the
Partnership.
6 DISTRIBUTOR'S REPRESENTATIONS AND WARRANTIES
The Distributor hereby represents and warrants to the Partnership that:
6.1 It has full power and authority to enter into and to execute, deliver
and perform this Agreement, which constitutes a legal, valid and binding
obligation of the Distributor enforceable in accordance with its terms;
6.2 The execution, delivery and performance of this Agreement will not
violate any provisions of any existing law or regulation or of the
articles of incorporation of the Distributor, or of any charge, trust
deed, contract or other instrument to which it is a party or which is
binding upon it or its assets;
6.3 It is accepting the grant of the Rights as a principal in the course of
its business.
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7 DELIVERY
To the extent that the Distributor is not already in possession of the same
prior there to the Partnership undertakes to deliver to the Distributor the
Delivery Material together with a schedule of contractual screen and advertising
credits in respect of each Film on the Delivery Date.
8 CREDITS AND NOTICES
8.1 The Distributor undertakes to follow strictly the schedule of credits
provided by the Partnership in connection with advertising and publicity
material relating to the Films and undertakes that all advertising
material made or created or used by the Distributor in connection with
the Films shall correspond in all respects to the schedule of credits
provided by the Partnership pursuant to clause 6 and confirms that the
Partnership shall have a right of prior approval over all artwork and
publicity material created by the Distributor. The Distributor shall
procure that the credits contained in the main and end titles of each of
the Films are not shortened or altered in any way and are shown in full
on each exploitation of each of the Films in the Territory during the
Term.
8.2 The Distributor shall have the right to insert before the main and after
the end titles of each of the Films the audio-visual logo of the
Distributor and shall also have the right to insert the visual logo and
the words 'distributed by (name of distributor)' or distributor's
designee in any advertising in connection with the Films.
8.3 The Distributor shall not make or permit there to be made in any
advertising or publicity material used in connection with the Films any
statement which might be understood to be an endorsement of any goods
articles services or product nor shall the Distributor enter into any
arrangement with any sponsor or advertiser in respect of the Films or
permit any sublicensee to do so without the prior written consent of the
Partnership.
8.4 The Distributor shall provide the Partnership with two sample copies of
each format of Videogram which the Distributor intends to distribute
pursuant to this Agreement prior to distribution for approval by the
Partnership of the quality of the Videogram and all associated
packaging, such approval not to be unreasonably withheld.
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8.5 All copies of the Films exhibited or distributed by the Distributor
shall conform in all respects to all credits trade xxxx notices
copyright notices trade names and other insignia appearing on the
Delivery Materials including expressly without limitation the name and
logo of the Partnership and no cuts or alterations or changes shall be
made in the Films the Delivery Material or any of the foregoing without
the express prior written approval of the Partnership.
9 RECORDS
9.1 The Distributor undertakes at all times throughout the Term and for the
period of 6 years after expiry to maintain full accurate and complete
books and records of account relating to the exploitation of the Rights
in the Films in the Territory. Such books and records of account shall
include details of all film rentals invoiced to exhibitors and all
collections of rentals and all permitted deductions offsets refunds
rebates and other reductions of film rentals and all such other details
as are normal and customary in the film industry and full and complete
records relating to the exploitation by the Distributor and its
permitted sublicensees of the Airline Rights the Non-Theatrical Rights
the Ship Rights the Television Rights the Videogram Rights which the
Partnership may reasonably require.
9.2 All books and records and transactions relating to the Films shall be
separate and distinct from any books and records and transactions
relating to other films or audio-visual product or other services.
10 STATEMENTS AND AUDITS
10.1 The Distributor undertakes to provide the Partnership with weekly
reports of Gross Receipts derived from exploitation of the Theatrical
Rights and the Non-Theatrical Rights in each Film by telex or telegram
or facsimile transmission for the first 4 weeks following the Release
Date of such Film. Such statements shall itemise all information
available to the Distributor including terms of exhibition agreements
box office receipts and expenses all of which shall be shown both on a
weekly basis and on a cumulative basis.
10.2 At the end of each quarter commencing at the end of the first month
after the Release Date of each Film the Distributor shall provide the
Partnership with a detailed report relating to the theatrical and
non-theatrical distribution of such Film which shall specify the matters
listed in clause 10.1 on an itemised basis in as much detail as is
available to the Distributor together with full and comprehensive
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information relating to the negotiation of licences in connection with
the Television Rights and details of all exploitation by third parties
of such rights.
10.3 Each statement referred to in clause 10.2 shall be delivered to the
Partnership within 60 days from the end of the period to which it
relates accompanied by payment in full made to the Partnership in
accordance with the directions contained in clause 4.1.
10.4 The Distributor shall on each Accounting Date render to the Partnership
a full and complete statement showing all Gross Receipts arising and all
money owing to the Partnership in respect of the preceding Accounting
Period. Each such statement shall be accompanied by payment in full of
all sums shown to be owing without reserve.
10.5 The statement of account referred to in clause 10.4 shall be in such
form as the Partnership may require and shall show the numbers of
Videograms manufactured and where stored and Videograms shipped returned
and sold together with all such reasonable information as the
Partnership may require in connection with the exploitation of the
Airline Rightsthe Ship Rightsthe Videogram Rightsthe Television Rights.
10.6 The statement referred to in clause 10.4 shall contain detailed
cumulative and current approved statements of Gross Receipts, P&A,
Distribution Expenses and all other expenses and permitted deductions
specifying the currency or currencies of receipts all sales taxes and
levies and all offsets refunds rebates and other reductions.
10.7 The Partnership or its authorised representative shall have the right at
any time during normal business hours and on not less than 5 days'
written notice to the Distributor during the Term and for the period of
6 years after expiry or termination to inspect audit and take copies of
all such books and records of account. In the event that any such audit
or inspection reveals any deficiency in money paid to the Partnership
pursuant to this Agreement then the Distributor shall immediately pay
the same to the Partnership together with interest from the date such
payment was due at the rate of the base rate from time to time of Royal
Bank of Scotland plus 3% together with all reasonable costs incurred by
the Partnership directly as a result of such inspection.
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11 FOREIGN LANGUAGE
11.1 The Distributor shall have the right at the Distributor's sole cost and
expense to make foreign language versions of the Films which shall be
dubbed if any of the languages of the relevant territory is French
German Italian or Spanish and in all other cases may at the election of
the Distributor be either dubbed or subtitled. The Distributor shall
consult with the Partnership and follow the Partnership's directions in
connection with the preparation of any foreign language version which
shall be based on a translation of the dialogue script approved by the
Partnership and which shall conform to all limitations and restrictions
imposed on the Partnership and its successors and licensees by any
arrangement or agreement in connection with the Films.
11.2 The copyright and all other rights in respect of any material created by
or for the Distributor for the purpose of preparing any foreign language
versions of the Films shall vest in the Partnership ab initio and it
shall be the responsibility and obligation of the Distributor to ensure
that no conflicting rights of copyright or moral rights or performer's
rights or other rights whatever in connection with such material which
might inhibit the free and unrestricted exploitation by the Partnership
its successors assigns and licensees of its or their rights exist in
favour of third parties and it shall further be the responsibility of
the Distributor to provide the Partnership with documentary evidence of
such facts if the Partnership shall require.
11.3 The Distributor warrants and agrees that all original negative and
original sound recording and photographic material created in connection
with any foreign language version shall be maintained in the Laboratory
in the sole name of the Partnership which undertakes to afford the
Distributor access to such material for the purpose of exploiting the
Rights licensed to the Distributor in this Agreement.
11.4 The Distributor agrees to provide the Partnership with a new release
print and trailer of each of the Films in its completed dubbed and/or
sub-titled version and a Videogram of each of the Films in its dubbed or
sub-titled version for approval by the Partnership prior to the release
by the Distributor of such dubbed or subtitled version.
12 EDITING
The Distributor shall not permit the Films or the Delivery Material to
be cut or otherwise in any way altered or added to nor shall any of the
credits titles
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copyright notices trade marks trade names and other logos or symbols
contained in any part of the Films or the Delivery Material in any way
whatever be altered in any manner by any person.
13 CENSORSHIP
13.1 The Distributor shall within 30 days from Delivery submit each of the
Films for censorship and/or certification in respect of each of the
categories of Rights licensed to the Distributor under this Agreement to
the duly authorised authority of each country in the Territory.
13.2 In the event that certification of any of the Films shall be withheld or
refused for any reason the Distributor shall advise the Partnership
immediately in writing identifying any scenes or dialogue which are
required to be changed or deleted and if the Partnership shall approve
the required changes or deletions in writing the Distributor shall cause
such changes to be made and obtain censorship approval or certification.
13.3 If the Partnership does not approve any changes or deletions required by
any censorship or certification authority or if such authority shall
have totally banned the distribution of any Film in the Territory the
Distributor shall take whatever steps are in the Distributor's power to
appeal or apply for re-hearings or pursue other remedies and shall keep
the Partnership at all times advised.
14 TITLE
14.1 Title in and to all Delivery Material and Publicity Material shall at
all times remain in the Partnership and the Distributor shall not
acquire any right title or interest in or to the goodwill relating to
the Films their characters or their names or the name of the Partnership
or any trade names or trade marks or insignia.
14.2 The Distributor confirms and agrees that all material including without
limitation foreign language versions of the Films and all artwork and
publicity material created by or for the Distributor and all rights in
such material including all rights of copyright and all other rights
shall be vested in the Partnership ab initio and the Distributor
undertakes to do any and all acts and execute any and all documents as
may from time to time be required by the Partnership in order to
transfer vest or assign any and all such rights to the Partnership and
in the event that the Distributor fails for any reason to do so
following a request from the Partnership then the Partnership shall have
the right to do any such acts or execute any such
22
document in the name of and in the stead of the Distributor and such
right shall be a power coupled with an interest and be irrevocable.
15 COPYRIGHT
15.1 The Distributor shall do any and all acts and pay any and all fees
necessary to protect the copyright and all other rights in the Films in
the Territory during the Term including without limitation to the
foregoing the timely satisfaction of any requirement or obligation to
register renew or extend the copyright in the Films. Such costs shall be
treated as Distribution Expenses PROVIDED THAT the same are agreed in
writing by the Partnership.
15.2 The Distributor shall take all such steps as may from time to time be
required in order to protect the Rights and to protect the interests of
the Partnership and the Distributor pursuant to this Agreement and to
restrain any person from doing or threatening to do any act which may
infringe any right of copyright or other right in the Films and if the
Distributor for any reason fails to take such action at the request of
the Partnership then the Partnership shall have the right to take such
action in the name of the Partnership and/or in the name of the
Distributor and the cost and expenses of such action shall be treated as
a Distribution Expense of the relevant Film pursuant to this Agreement
and borne or reimbursed entirely by the Distributor.
15.3 The Distributor undertakes to notify the Partnership as soon as possible
in writing of any infringement of the rights of the Partnership and/or
the Distributor pursuant to this Agreement.
16 MUSIC
16.1 The Rights are in all respects subject to the rights of composers
authors music publishers performing right societies and PPL VPL and
AGICOA in respect of the public performance Broadcast and Secondary
Transmission of the Films the exercise of the Television Rights and the
manufacture of Videograms and the Distributor shall not permit or
authorise the doing of any act in respect of the Films which may
constitute an infringement of any of such rights and shall be
responsible for the making of all necessary arrangements with all local
performing right societies mechanical right societies composers authors
and music publishers which may be necessary for the exploitation of the
Rights.
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16.2 Any money which may be payable to the owner or exclusive licensee of
copyright in any of the Films as a result of the exploitation of the
Films by the exercise of the Television Rights shall be the sole
property of the Partnership which shall have the sole and exclusive
right to apply for and collect such income through any source including
but not limited to agency societies and organisations such as PPL VPL
and AGICOA and in the event that any such money is paid to the
Distributor it shall be held by the Distributor upon trust for the
Partnership and the Distributor shall immediately notify the Partnership
and make payment of such money to the Partnership in accordance with the
directions contained in clause 4.1 such payment being accompanied by a
statement in writing setting out the nature and source of all sums
remitted.
17 RETURN OF MATERIAL
17.1 Upon the expiry or sooner determination of this Agreement the
Distributor undertakes to return to the Partnership at its address
aforesaid all Delivery Materials and any other materials including
Publicity Materials relating to the Films which the Distributor may have
in its possession or control.
17.2 In the event that any materials relating to the Films shall at the end
of the Term or at any time during the Term become lost or damaged or
destroyed or mislaid the Distributor undertakes to notify such loss
damage or destruction to the Partnership as soon as possible in writing
and to replace repair or make good such loss or destruction at the sole
cost and expense of the Distributor it being the responsibility of the
Distributor to maintain adequate insurance in all respects in connection
with the Films.
18 FORCE MAJEURE
18.1 The Partnership shall not be liable to the Distributor for any failure
to supply or procure the supply of the Delivery Material or any other
material to be supplied pursuant to this Agreement as a result of any
circumstance beyond the control of the Partnership and the Partnership
shall not incur any liability for any expenses or losses direct or
consequential or otherwise whatever which may be suffered by the
Distributor.
18.2 If because of any proceedings or threat of proceedings by a third party
the Partnership is advised to withdraw any of the Films from
distribution and gives notice in writing to the Distributor to this
effect or if at the date of this Agreement the production of any of the
Films mentioned in Schedule 3 has not begun or any
24
of the Films is subsequently for any reason not completed or abandoned
or curtailed the Partnership shall be entitled to withdraw such Film
from exploitation and shall then either as soon as possible supply a
substitute Film or cancel this Agreement in respect of such Film only.
19 DETERMINATION
It shall constitute the repudiation by the Distributor of its obligations under
this Agreement and the Partnership shall be entitled to accept such repudiation
determining the Distributor's rights under this Agreement by written notice if:
19.1 the Distributor fails to pay any amount due under this Agreement in full
within 5 business days of its due date and such failure is not remedied
within 15 days of receipt of written notice;
19.2 the Distributor is in breach of any material term of this Agreement
which is incapable of remedy or if capable of remedy is not remedied
within 30 days of the Distributor receiving notice of such breach from
the Partnership;
19.3 any of the Distributor's representations shall prove to have been
incorrect when made or become materially incorrect and the Partnership's
rights and entitlements under this Agreement are materially and
adversely affected;
19.4 the Distributor transfers disposes of or threatens to transfer or
dispose of any part of its assets which is likely in the reasonable
opinion of the Partnership to prevent or materially to inhibit the
performance by the Distributor of its obligations under this Agreement;
19.5 any indebtedness guarantee or similar obligation of the Distributor or
of any guarantor of the Distributor becomes due or capable of being
declared due before its stated maturity or is not discharged at maturity
or the Distributor or any guarantor of the Distributor defaults under or
commits a breach of the provisions of any guarantee or other obligation
(whether actual or contingent) of any agreement pursuant to which any
such indebtedness guarantee or other obligation was incurred all or any
of which shall in the reasonable opinion of the Partnership materially
affect its rights and entitlements under this Agreement;
19.6 the Distributor is declared or becomes insolvent;
25
19.7 the Distributor convenes a meeting of its creditors or proposes or makes
any arrangement or composition with or any assignment for the benefit of
its creditors or a petition is presented or a meeting is convened for
the purpose of considering a resolution or other steps are taken for the
winding up of the Distributor (save for the purpose of and followed by a
voluntary reconstruction or amalgamation previously approved in writing
by the Partnership) or if an incumbrancer takes possession of or a
trustee receiver administrator administrative receiver liquidator or
similar officer is appointed in respect of all or any part of its
business or assets or any distress execution or other legal process is
levied threatened enforced upon or sued out against any of such assets;
19.8 the Distributor shall abandon or announce that it intends to abandon the
business of distributing Films.
20 EFFECT OF DETERMINATION
20.1 Upon determination under clause 19 of the Distributor's rights under
this Agreement:
(a) the Partnership may without notice retake possession of all
Delivery Material and for that purpose be entitled to enter upon
any land or building in the possession power or control of the
Distributor where the Delivery Material may be situated or
believed to be situated;
(b) the Delivery Material shall no longer be in the Distributor's
possession or control with the Partnership's consent;
(c) without prejudice to any right to damages of the Partnership the
Distributor shall immediately pay to the Partnership all sums
owing and whether or not then due under this Agreement;
(d) the Distributor shall assign to the Partnership all its right
title benefit and interest in any agreements entered into by it
in respect of the Films (including the right to receive any
money payable pursuant to such agreements) on terms satisfactory
to the Partnership and shall immediately thereafter give notice
of such assignment to the other parties to such agreements in a
form and manner approved by the Partnership.
20.2 Upon the expiry of the Term by effluxion of time the Distributor shall
be responsible at its own risk for re-delivery of the Delivery Material
and the Films to such address in the United Kingdom as the Partnership
may direct in good and serviceable condition (fair wear and tear
excepted).
26
21 ASSIGNMENT
The Rights granted in this Agreement are personal to the Distributor who shall
not have the right to assign license or sublicense the whole or any part of the
Rights without the prior written consent of the Partnership, such consent not to
be unreasonably withheld. The Partnership shall have the right at any time to
assign its obligations pursuant to this Agreement and/or its right to receive
income pursuant to this Agreement and the Distributor undertakes to enter into
all such arrangements as may be reasonably required by the Partnership in order
to assist the Partnership in perfecting or finalising any arrangements relating
to the financing of the Partnership and/or the Films.
22 SET-OFF AND DEFAULT
The Distributor shall not be entitled to effect any set-off or apply any surplus
or deficit in the Gross Receipts derived from any of the Films or any other film
in connection with any claim which the Distributor may have or believe it may
have against the Partnership with respect to any of the Films or any other films
the subject of this Agreement or any other agreement. The Distributor shall be
entitled to set off or credit any money payable to the Partnership in respect of
any one medium or territory against any part of the Distribution Expenses by the
Distributor in any other medium or territory.
23 INDEMNITY
The Distributor and the Partnership undertake to one another to indemnify and
keep fully indemnified the other party from and against all actions proceedings
claims demands costs (including without prejudice to the generality of this
provision the legal costs of a solicitor) awards and damages (together "Losses")
arising directly or indirectly as a result of any breach or non-performance by
the other party of any its undertakings warranties or obligations under this
Agreement PROVIDED THAT such Losses are settled with the indemnifying party's
prior written consent or are subject to a non-appealable judgment of a court of
competent jurisdiction.
24 REMITTANCE TAX
It is expressly agreed and understood that the Distributor shall be responsible,
if required by law, for the payment on the Partnership's behalf of any and all
remittance withholding and similar taxes required in connection with the
remittance of any money due to the Partnership pursuant to this Agreement and
the Distributor undertakes to provide the Partnership with documentation
relating to all such payments together with the applicable payment of money
pursuant to this Agreement and all details and information provided by any
government or state department in connection with such taxes. Distributor shall
use reasonable endeavours to minimise any such withholding and similar taxes.
27
25 VALUE ADDED TAX
All sums payable in this Agreement are exclusive of Value Added Tax which may l
be payable by either party as required by law.
26 NOTICES
26.1 Any notice or other document required to be given under this Agreement
or any communication between the parties with respect to any of the
provisions of this Agreement shall be in writing in English and be
deemed duly given if signed by or on behalf of a duly authorised officer
of the party giving the notice and if left at or sent by pre-paid
registered or recorded delivery post or by telex telegram cable
facsimile transmission or other means of telecommunication in permanent
written form to the address of the party receiving such notice as set
out at the head of the Agreement or as notified between the parties for
the purpose of this clause.
26.2 Any such notice or other communication shall be deemed to be given to
and received by the addressee:
(a) at the time the same is left at the address of or handed to a
representative of the party to be served;
(b) by post on the day not being a Sunday or public holiday two days
following the date of posting;
(c) in the case of a telex telegram cable facsimile transmission or
other means of telecommunication on the next following day.
26.3 In proving the giving of a notice it should be sufficient to prove that
the notice was left or that the envelope containing the notice was
properly addressed and posted or that the applicable means of
telecommunication was addressed and despatched and despatch of the
transmission was confirmed and/or acknowledged as the case may be.
26.4 Communications addressed to the Partnership shall be marked for the
attention of Xxxxxxx Xxxx with a copy to Xxxxxxx-Xxxxxxx, 0 Xxxxxxx Xxx,
Xxxxxx XX0X 0XX f.a.o. Xxxxxx Ricklow.
27 MISCELLANEOUS
27.1 If any provision of this Agreement shall be prohibited by or adjudged by
a court to be unlawful void or unenforceable such provision shall to the
extent required be severed from this Agreement and rendered ineffective
as far as possible without
28
modifying the remaining provisions of this Agreement and shall not in
any way affect any other circumstances or the validity or enforcement of
this Agreement.
27.2 This Agreement contains the full and complete understanding between the
parties and supersedes all prior arrangements and understandings whether
written or oral appertaining to the subject-matter of this Agreement and
may not be varied except by an instrument in writing signed by all of
the parties to this Agreement. The Distributor and the Partnership
acknowledge that no representations or promises not expressly contained
in this Agreement have been made by either party or any of their
officers servants agents employees members or representatives.
27.3 No failure or delay on the part of any of the parties to this Agreement
relating to the exercise of any right power privilege or remedy provided
under this Agreement shall operate as a waiver of such right power
privilege or remedy or as a waiver of any preceding or succeeding breach
by the other party to this Agreement nor shall any single or partial
exercise of any right power privilege or remedy preclude any other or
further exercise of such or any other right power privilege or remedy
provided in this Agreement all of which are several and cumulative and
are not exclusive of each other or of any other rights or remedies
otherwise available to a party at law or in equity.
27.4 This Agreement shall not be deemed to constitute a partnership or joint
venture or contract of employment between the parties.
27.5 This Agreement shall be governed by and construed in accordance with the
law of England and Wales the courts of which shall be courts of
competent jurisdiction.
28 COUNTERPARTS
This Agreement may be executed in one or more parts by the parties on separate
counterpart or facsimile copies each of which when so executed by any party
shall be an original but all executed counterpart or facsimile copies shall
together when delivered constitute but one agreement. This Agreement shall not
be completed delivered or dated until each party has received counterpart or
facsimile copies validly executed by all other parties. The date of this
Agreement shall be the date in the United Kingdom on which validly executed
copies were received by all parties.
29
AS WITNESS the hands of the authorised representatives of the parties the day
month and year first above written:
30
SCHEDULE 1
DELIVERY MATERIAL
PUBLICITY MATERIAL
SCHEDULE 2
DISTRIBUTION EXPENSES
All expenses related to the marketing and exploitation of the Films wholly and
actually incurred by the Distributor, including but not limited to the
following:
o manufacturing and production of prints, dvd and tapes
o design and packaging of dvd and tapes
o ad design
o marketing costs
o overheads related directly and specifically to the distribution of the
Films (but excluding all overhead fees generally attributable to the
activities of the Distributor and the Distributor's employees)
o distribution fee of 20% of Gross Receipts
o residuals
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SCHEDULE 3
FILMS
(insert details as to title, director, producer, star artists, duration,
language, etc, as appropriate)
SCHEDULE 4
Television Rights Films
[DELIBERATELY DELETED]
SCHEDULE 5
DISTRIBUTOR LOANS
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
32
SCHEDULE 6
ROYALTY
Such amount as negotiated on a film by film basis
SCHEDULE 7
RECOUPMENT SCHEDULE - GROSS RECEIPTS
1. Participants Deferments
2. Distribution Expenses
3. LLP 50% as to remainder and Distributor 50% as to remainder pari passu
SIGNED by )
for and on behalf of )
KEYDATA MEDIA & MARKETING 1 LLP )
SIGNED by )
for and on behalf of )
TM FILM DISTRIBUTION INC )
33
