Exhibit 10.23
Portions of this exhibit have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment. The redacted portions are identified by brackets with the character
"x" indicating deleted information.
Exhibit 10.23
DISTRIBUTION RIGHTS ACQUISITION AGREEMENT
AGREEMENT dated as of September 1, 1990 ("Effective Date") between
TWENTIETH CENTURY FOX FILM CORPORATION ("Fox") and FOX CHILDREN'S NETWORK, INC.
("Licensor"). Capitalized words used herein not otherwise defined have the
meanings set forth in Exhibit "A" hereto and the Glossary attached to Exhibit
"A" as Schedule "1."
1. Scope of Agreement: This Agreement covers the distribution by Fox of
------------------
each Program which comprises a part of the programming ("FCN" Programming")
that Licensor provides to its affiliated television stations ("FCN
Affiliated Stations") as part of its national program service. As used
herein, "Program" means each Television Motion Picture or Television Series
currently existing or hereinafter produced by or on behalf of Licensor for
initial exhibition in the United States as part of FCN Programming,
including each of the following Television Series: "BOBBY'S WORLD,"
"ATTACK OF THE KILLER TOMATOES,"ZAZOO U," "PIGGSBURG PIGS" and "▇▇▇'▇
▇▇▇▇▇ PAN AND THE PIRATES."
2. LICENSE:
-------
(a) Distribution Rights: Subject to subsection (iii) below, Licensor
-------------------
grants and licenses to Fox the following, collectively referred to as
"Distribution Rights," for the term and the Territory specified below:
(i) General Grant of Rights: The sole and exclusive right and
-----------------------
license under copyright to exercise all rights of Free
Television Distribution, Free Television Exhibition, Pay
Television Distribution, Pay Television Exhibition, Home
Video Distribution, Home Video Exhibition, Theatrical
Distribution, Theatrical Exhibition, Non-Theatrical
Distribution and Non-Theatrical Exhibition with respect to
each program and trailers thereof and excerpts and clips
therefrom for an unlimited number of exhibitions in any
language version, including dubbed, subtitled and narrated
versions, using any form of Motion Picture Copy. Without
limiting the generality of the foregoing, Fox shall have
the right, in connection with the marketing, distribution
and exploitation of each Program, (A) to use and to
authorize others to use the title of each Program or to
change any such title, (B) to use and perform and to
authorize others to use and perform any musical material
contained in each Program, (C) to cut, edit and alter any
Program or any part thereof as Fox may reasonably deem
necessary to conform to censorship, import permit and other
legal requirements and/or to conform to time segment
requirements and/or the exhibition standards of licensees
or
exhibitors engaged in the Pay Television Exhibition, Free
Television Exhibition, Theatrical Exhibition, Non-
Theatrical Exhibition or Home Video Exhibition of the
Programs, and (D) to use Fox's name and trademark and/or
the name and trademark of any of Fox's Subdistributors and
licensees in such manner, position and form as Fox, its
Subdistributors or licensees may elect.
(ii) Advertising and Publicity Rights: For purposes of
--------------------------------
advertising and publicizing each Program, the right (A) to
publish and to license and authorize others to publish in
any language, in any media and in such form as Fox deems
advisable, synopses, summaries, adaptations, resumes and
stories of and excerpts from each Program and from any
literary, dramatic or musical material contained in each
Program or upon which each Program is based, (B) to use
and authorize others to use the name, voice and likeness
(and any simulation or reproduction thereof) of any person
appearing in or rendering services in connection with each
Program, (C) to broadcast and authorize others to broadcast
by radio and television in any language version excerpts
from each Program and from any literary, dramatic, or
musical material contained in each Program or upon which
each Program is based, and (D) to use Fox's name and
trademark and/or the name and trademark of any of Fox's
Subdistributors and licensees in such manner, position and
form as Fox, its Subdistributors or licensees may elect.
(iii) Limitation on Grant of Distribution Rights: To
------------------------------------------
the extent that the Distribution Rights granted to Fox
hereunder with respect to any of the Programs are limited
in any manner, such limitations are set forth on Exhibit
"D" hereto. To the extent that the Distribution Rights
granted to Fox hereunder are limited with respect to any
Program created after the date hereof, Licensor shall
deliver to Fox a written notice specifying the relevant
Program and the limitations on Fox's Distribution Rights
with respect thereto. Upon receipt by Fox, such notice
shall constitute an amendment to Exhibit "D" and shall be
deemed to be a part of this Agreement for all purposes.
(b) Secondary Transmission: Licensor grants Fox a beneficial
----------------------
interest in all revenues to which Licensor is entitled under the Law
of countries in the Territory by reason of the secondary transmission
of any Program by cable television or similar distribution system, the
primary transmission of which is
2
made pursuant to a valid license agreement from Fox. All such
revenues, whether collected by Licensor or Fox, shall be included
within Gross Receipts of the Programs. Licensor hereby names Fox its
duly appointed agent to make all necessary filings and to collect all
such revenues resulting from the secondary transmission of any Program
to which Licensor, as copyright owner, would otherwise be entitled and
to include such revenues within Gross Receipts of the Programs.
3. TERM: The period during which Fox may exercise the Distribution
----
Rights with respect to each Program ("Term") shall commence on the
Effective Date and shall continue in perpetuity, except as set forth on
Exhibit "D" hereto. To the extent that any Program created after the date
hereof shall have less than a perpetual Term, Licensor shall deliver to Fox
a written notice specifying the relevant Program and the duration of its
Term. Upon receipt by Fox, such notice shall constitute an amendment to
Exhibit "C" and shall be deemed to be a part of this Agreement for all
purposes.
4. TERRITORY: The "Territory" in which Fox may exercise the Distribution
---------
Rights shall consist of the entire world.
5. LICENSOR'S RESERVED RIGHTS/HOLDBACK:
-----------------------------------
(a) Reserved Rights: Licensor reserves all rights in the Programs
---------------
and the literary, dramatic and musical material on which they are
based which are not specifically granted to Fox hereunder or under any
other agreement between Licensor and Fox.
(b) Holdback: With respect to each Program, Fox shall not exercise
--------
or authorize others to exercise the Distribution Rights in the United
States until the expiration of the period during which the FCN
Affiliated Stations are entitled to exhibit the relevant Program as
part of FCN Programming under their applicable station affiliation
agreement. Licensor shall give Fox at least 6 months prior notice of
the availability date for each Program.
6. PAYMENTS TO LICENSOR:
--------------------
(a) Licensor's Share of Net Profits: [XXXXXXXXXXXXXXXXXXXXXXXXXXX
-------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(b) Terminology: As used herein, the term "Net Profits" means, with
-----------
respect to any particular Program, the amount, if any, remaining after
Fox has deducted and retained the aggregate of the following from the
Gross Receipts derived from
3
Fox's exercise of Distribution Rights in respect of such Program in
the following order of priority:
(i) Fox's Distribution Fees: Fox shall be entitled to keep for
-----------------------
its own account the following percentages of Gross Receipts from
the categories listed below:
Network Exhibitions and/or licenses
to a Network in the United States
(excluding Licensor's licenses of FCN
Programming to FCN Affiliated Stations).............[X]
Free Television Distribution in the
United States (excluding Network
Television and Barter Sales)........................[X]
Barter Sales from Free Television
Distribution in the United States
(excluding Network Television)......................[X]
Pay Television Distribution in the
United States.......................................[X]
Free Television Distribution and
Pay Television Distribution in Canada...............[X]
Free Television Distribution in the
Foreign Territory...................................[X]
Pay Television Distribution in the
Foreign Territory...................................[X]
Home Video Distribution in the
Domestic Territory..................................[X]
Home Video Distribution in the
Foreign Territory...................................[X]
Non-Theatrical Distribution in the
Domestic Territory and the Foreign
Territory...........................................[X]
4
Theatrical Distribution in the Domestic
Territory...........................................[X]
Theatrical Distribution in the Foreign
Territory...........................................[X]
All other Gross Receipts from the
Domestic Territory and the Foreign
Territory...........................................[X]
Fox agrees to notify Licensor at any time that the standard
distribution fee charged by Fox for any one of the categories
listed above is lower than the distribution fee set forth above
for such category. In such event, the parties agree to negotiate
in good faith with respect to the amount of such fee.
(c) Distribution Expenses: With respect to any particular Program,
---------------------
the aggregate of Distribution Expenses, as defined in Exhibit
"A," incurred in connection with Fox's exercise of Distribution
Rights in respect of such Program.
The computation of Gross Receipts shall be as set forth in Exhibit "A"
hereto. In connection therewith, the term "Participant's Percentage
Participation" as used in Exhibit "A" is synonymous with Licensor's
Share of Net Profits as defined in Paragraph 6.(a) above.
7. DELIVERY:
--------
(a) Delivery Date: The date on which delivery of all of the Delivery
-------------
Items set forth in subparagraph (b) of this Paragraph 7. is completed
is referred to herein as the "Delivery Date."
(b) Delivery: Delivery of each Program shall consist of the
--------
completion of the delivery of all of the following Delivery Items with
respect to such Program (to the extent that the relevant Program is a
Television Series, Licensor shall deliver the Delivery Items set forth
below with respect to each Episode of such Television Series):
(i) Laboratory Access Letters: Such number of fully-executed
-------------------------
laboratory access letters, substantially in the form of Exhibit
"B" hereto, as are necessary to enable Fox to obtain all of the
following physical materials with respect to each Program:
5
(A) Masters:
-------
(1) NTSC: 1 new one-inch (1") first generation high
----
band color videotape of each Program conformed to NTSC
specifications (523 line) in 1.33:1 ratio and suitable
for the reproduction of videotape copies therefrom of a
first-class quality, with picture and sound; and
(2) PAL: 1 new C-Format first generation color
---
videotape of each Program conformed to PAL
specifications (625 line) in 1.33:1 ratio and suitable
for the reproduction of videotape copies therefrom of a
first-class quality, with picture and sound.
Collectively, the foregoing first generation videotapes
shall be referred to herein as the "Masters."
(B) Sound Tracks:
------------
(1) Dialogue-Voice Track: A dialogue-voice track which
--------------------
is in perfect synchronization with each Master; and
(2) Music and Effects Track: A music and effects
-----------------------
track, including all music and effects in such Program,
which is in perfect synchronization with each Master.
Collectively, the foregoing sound tracks shall be referred
to herein as the "Sound Tracks." Sound Tracks shall be in
either 16mm optical or 1/4 magnetic version, containing a
new-pilot sync pulse and able to perform at 60 cycles and 7
1/2 inches per second or 60 cycles and 15 inches per
second, or, for tape materials, 59.9 cycles and 7 1/2
inches per second.
(ii) Documentation: As specified in subparagraph (c) of this
-------------
Paragraph 7.
(iii) Advertising Materials: As specified in subparagraph (d) of
---------------------
this Paragraph 7.
(iv) Exclusive License: A fully-executed Exclusive License with
-----------------
respect to each Program in the form of Exhibit "C" hereto, which is
incorporated herein by this reference.
6
Collectively, the laboratory access letters, together with the
Documentation, Advertising Materials and Exclusive License, are
referred to herein as the "Delivery Items."
(c) Documentation: Licensor shall deliver promptly to Fox the
-------------
following documents ("Documentation"):
(i) One copy of the music cue sheet for each Program:
(ii) Evidence of Errors and Omissions Insurance (as required
under Paragraph 8.(a) below) for each Program:
(iii) One copy of the final script, credit list and title list
for each Program; and
(iv) Statements setting forth (A) contractual restrictions (if
any) on the exercise of the Distribution Rights, and (B)
restrictions (if any) on the editing and dubbing of any
Program.
All of the foregoing materials shall be delivered to Fox at the
address set forth for notices in Paragraph 13. below, Attention: Legal
Department, Television Distribution. In addition, upon Fox's request,
Licensor shall deliver to Fox any other documentation of rights
requested by Fox that may in the reasonable opinion of Fox be
necessary for Fox to effectuate the purposes and intents of this
Agreement or the exercise of the Distribution Rights in the Territory.
(d) Advertising Materials: Licensor shall deliver to Fox still
---------------------
photographs and color transparencies, synopses, cast lists, trailers
and pressbooks for each Program as are available ("Advertising
Materials") at the address set forth for notices in Paragraph 13.
below. Attention: Creative Services, Television Distribution. If Fox
determines that additional materials are necessary for the advertising
and promotion of any Program in connection with Fox's exercise of the
Distribution Rights, Fox may request that Licensor deliver such
materials and Licensor shall inform Fox of the estimated cost of
preparing and delivering any such materials. If Fox so requests.
Licensor shall promptly prepare and deliver such materials to Fox or
its Subdistributor, provided, however, that Licensor's failure or
inability to provide any such materials to Fox or its Subdistributor
shall not constitute a breach of this Agreement. Fox shall reimburse
Licensor for the actual cost of preparing such materials, provided,
however, that such reimbursement shall not exceed 110% of the
estimated cost. Any such items so paid for by Fox shall be owned by
Fox but may only be used by Fox or its Subdistributor in accordance
with the terms and conditions of this Agreement.
7
(e) Disposition of Physical Materials Upon Expiration: Fox may retain
-------------------------------------------------
any and all Motion Picture Copies in its possession relating to a
particular Program during such Program's Term. All Motion Picture
Copies made by or for Fox shall be Fox's property. Upon expiration of
a particular Program's Term, all Motion Picture Copies, Advertising
Materials and other materials relating to such Program delivered to
Fox by Licensor which are existing and within Fox's control at the
time of such expiration (other than Documentation) shall, at Fox's
election, be returned to licensor to such place as Licensor shall
designate at Licensor's sole cost and expense or shall be destroyed
with certificates of destruction furnished to Licensor.
8. WARRANTIES AND INDEMNIFICATIONS:
-------------------------------
(a) Rights/Payments/Quality: Licensor warrants, represents and
-----------------------
agrees as follows:
(i) it has and shall continue to have during the Term,
exclusively, all rights necessary to enter into this Agreement
free and clear of any and all restrictions, claims, litigation,
encumbrances, impairments or defects of any kind;
(ii) it has not and will not commit or omit to perform any act
by which any of the Distribution Rights could or will be
encumbered, diminished or impaired;
(iii) neither the execution by Fox of this Agreement nor
anything contained in any Program nor the exercise by Fox of any
of the Distribution Rights will violate or infringe upon any
rights of any kind of any Party nor require Fox, its
Subsidiaries, Affiliates, Subdistributors or any of their
licensees or agents to make any payment of any kind to any Party
for any reason (such payments, if any, being the sole
responsibility and obligation of Licensor); and
(iv) each of Fox, its Subsidiaries, Affiliates and
Subdistributors and each of its and their licensees and agents
will peacefully enjoy and possess each and all of the rights and
licenses granted or purported to be granted herein throughout the
Term without impairment and without hindrance on the part of any
third Party.
(b) Guild Payments and Royalties: Licensor warrants, represents and
----------------------------
agrees that all payments required under applicable collective
bargaining agreements, including employer fringe benefits and taxes
payable with respect thereto, by reason of or as a condition to any
exhibition of any Program or any part thereof,
8
or any use or reuse thereof for any purposes or in any media
whatsoever, as well as the costs of all licenses required to permit
exhibition, distribution or other use of any Program or any part
thereof, including fees for use of any patented equipment or process,
synchronization, recording or performing royalties and fees with
respect to performance of lyrics and music and literary material,
shall be, have been and will be promptly paid as due by Licensor and
shall be the sole responsibility and obligation of Licensor.
(c) Copyright: Licensor warrants, represents and agrees as follows:
---------
(i) the copyright in each Program or any part thereof and in the
literary, dramatic and musical material upon which each Program
or any part thereof is based or which is contained therein will
be valid and subsisting during the Term throughout the Territory,
and no part of any Program or of any such literary, dramatic or
musical material is or will be in the public domain; and
(ii) it will secure, register, renew and extend all copyrights in
each Program and any part thereof and all related properties upon
eligibility for copyright registration, renewal and extension.
Licensor hereby irrevocably designates Fox as its attorney-in-
fact to do so if Licensor fails to do so, and also designates Fox
as its attorney-in-fact to take reasonable steps to defend said
copyrights against any and all infringements thereof. Licensor
agrees that the foregoing designations constitute powers coupled
with an interest, are irrevocable throughout the Term and may be
exercised at Fox's sole discretion. Fox shall not be liable to
Licensor for any action or failure to act on behalf of Licensor
within the scope of authority conferred on Fox under this
Paragraph 8.(c) unless such action or omission was performed or
omitted fraudulently or in bad faith or constituted wanton and
willful misconduct or gross negligence.
(d) Indemnity: Licensor agrees to indemnify and hold Fox, its parent
---------
company, Subsidiaries, Affiliates and Subdistributors and their
respective officers, agents, directors, employees and licensees
harmless from and against any kind and all claims, actions or
proceedings of any kind and from any and all damages, liabilities,
costs and expenses (including reasonable attorneys' fees) relating to
or arising out of any violation of any of the warranties,
representations or agreements or any error or omission in any of the
material or information furnished to Fox in accordance with this
Agreement. If Licensor shall fail to do so promptly upon Fox's
written request, Fox shall have the right to adjust, settle, litigate
and take any other action Fox deems necessary or desirable for the
disposition thereof. In any such event, Licensor shall reimburse Fox
on demand for all amounts paid or incurred by Fox, including
reasonable attorneys' fees, and
9
Fox shall have the right to deduct the amount thereof from sums
accruing to Licensor under this Agreement.
(e) Errors and Omissions Insurance: Licensor has as of the Effective
------------------------------
Date and shall maintain throughout the Term of this Agreement a policy
of Motion Picture Producers and Distributors Errors and Omissions
Insurance covering each Program in a form acceptable to Fox from a
qualified insurance company acceptable to Fox naming Fox and each and
all of the Parties indemnified herein as additional named insureds.
The insurance which is afforded by such policy shall be for a minimum
of $1 million for any single party's claim arising out of a single
occurrence and $4 million for all claims arising out of a single
occurrence. Such insurance shall provide for 30 days prior notice to
Fox in the event of any revision, modification or cancellation and
shall be deemed to afford primary insurance such that any insurance
coverage obtained by Fox shall be excess insurance not subject to
exposure until the coverage afforded under Licensor's policy shall be
exhausted in its entirety.
9. DISTRIBUTION AND EXPLOITATION: Fox shall have complete, exclusive and
-----------------------------
unqualified discretion and control as to the time, manner and terms of
distribution, exhibition and exploitation of any Program in accordance with
such policies, terms and conditions and through such Parties as Fox in its
sole business judgment may determine proper or expedient. Fox makes no
express or implied warranty or representation as to the manner or extent of
any distribution or exploitation of any Program, nor the amount of money to
be derived therefrom or expended in connection therewith. Fox does not
guarantee the performance of any Party in connection with the distribution
or exploitation of any Program.
10. MPEAA: Licensor acknowledges that Fox is a member of the Motion
-----
Picture Export Association of America, Inc. ("MPEAA"), and agrees that Fox
may, in Fox's sole discretion, abide by any regulations or directives of
the MPEAA, including but not limited to directives to its members not to
license or ship Motion Pictures for distribution or exhibition in any
geographic area of the world.
11. FOX'S DEFAULT: Licensor shall not have any right to terminate or
-------------
rescind this Agreement because of any default or breach of any kind by Fox,
its Subsidiaries, Affiliates, Subdistributors or their licensees. Licensor
shall not be entitled to seek or obtain any injunctive relief with respect
to the exercise of the Distribution Rights granted hereunder by reason of
any alleged default or breach by Fox or its Subsidiaries, Affiliates,
Subdistributors or their licensees, it being agreed that the only remedy of
Licensor in any such event shall be an action for an accounting or for
damages.
10
12. CHOICE OF LAW/VENUE: This Agreement will be interpreted in accordance
-------------------
with the Laws of the State of California applicable to contracts made
therein, but without regard to any principles of conflict of laws.
Licensor agrees that any legal action or proceeding relating to this
Agreement may be instituted in any State or Federal court in the County of
Los angeles, State of California and irrevocably submits to the
jurisdiction of such courts.
13. NOTICES: All notices to Licensor or Fox shall be in writing and shall
-------
be sent by registered or certified mail to the respective address set forth
below or such other address as shall be designated by written notice. The
address for all notices to Fox shall be as follows:
Twentieth Century Fox Film Corporation
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Business Affairs
Twentieth Television - Television Distribution
with an additional copy sent to the following person at the above address:
Attention: Vice President, Legal Affairs
Twentieth Television - Television Distribution
The address for all notices to Licensor shall be as follows:
Fox Children's Network
▇.▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President, Business Affairs
with an additional copy sent to the following person at the above address:
Attention: Legal Affairs
14. RELATIONSHIP OF PARTIES: Neither Fox nor Licensor is an agent or
-----------------------
representative of the other, and neither shall be liable for or bound by
any representation, act or omission whatever of the other. This Agreement
shall in no way create a joint venture or partnership nor be for the
benefit of any third Party. Neither Fox nor Licensor shall have the
authority to bind the other or the other's representatives in any way.
11
15. ENTIRE AGREEMENT: This Agreement and each of the Exhibits and
----------------
Schedules attached hereto embody the entire agreement between Fox and
Licensor as to the subject matter hereof, and expressly and unequivocally
supersedes all previous agreements, warranties or representations, oral or
written, which may have been made between Fox and Licensor as to the
subject matter hereof. This Agreement may only be amended by a written
agreement duly signed by Fox and Licensor.
By signing in the spaces provided below, Fox and Licensor accept and agree
to all of the terms and conditions of this Agreement.
FOX CHILDREN'S NETWORK, INC. TWENTIETH CENTURY FOX FILM
("Licensor") CORPORATION ("Fox")
By /s/ By /s/
-------------------------- ----------------------------
Its Its
[Executed by an authorized officer of each party to the agreement; however, the
signatures are illegible]
12
EXHIBIT "A"
Exhibit "A" to the Distribution Rights Acquisition Agreement dated as of
September 1, 1990 ("Agreement") between TWENTIETH CENTURY FOX FILM CORPORATION
("Fox") and FOX CHILDREN'S NETWORK, INC. (referred to as "Licensor" in the
Agreement and as "Participant" herein).
1. DEFINED TERMS: All words appearing within the text of this Exhibit
-------------
with initial letters capitalized (except the first word of a sentence and
proper nouns) and all words appearing within underlined paragraph captions
with initial letters capitalized and within quotation marks are
specifically defined terms for purposes of this Exhibit, the definitions
for which are set forth within the text of this Exhibit or the Glossary
attached hereto as Schedule "1." Words which appear within parenthesis
with initial letters capitalized and within quotation marks are
specifically defined terms for purposes of this Exhibit defined by the text
immediately preceding the parenthesis.
2. "PARTICIPANT'S PERCENTAGE PARTICIPATION": Participant's Percentage
----------------------------------------
Participation refers to the share of monies to which Participant is
entitled under the Agreement and which shall be accounted for and paid as
provided in the Agreement and this Exhibit.
3. "GROSS RECEIPTS": Gross Receipts means the aggregate of the following
----------------
received with respect to each Program:
(a) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX]
(b) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(i) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(ii) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
1
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(iii) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(A) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX]
(B) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX]
(c) [XXXXXXXXXXXXXXXXX]
(i) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
2
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
(ii) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX]
4. EXCLUSIONS FROM GROSS RECEIPTS: In no event shall the following be
------------------------------
included in Gross Receipts:
(a) Advances/Guarantees: Returnable advance payments and security
-------------------
deposits, until earned or forfeited, provided, however, that non-
returnable advances and guarantees shall be included in Gross Receipts
upon receipt.
(b) Rebates/Refunds/Adjustments: All adjustments, refunds or rebates
---------------------------
given by Distributor or Subdistributors to licensees of a Program. To
the extent any such amounts represent a return of amounts previously
included in Gross Receipts, an appropriate adjustment in Gross
Receipts and Fox Distribution Fees shall be made.
(c) Collected Taxes: Any amounts collected by Distributor of a
---------------
Subdistributor or licensee of a Program as taxes or for payment as
taxes, such as admission, sales and value-added taxes.
(d) Salvage: All monies received by Distributor of a Subdistributor
-------
from the scrapping or disposal of Motion Picture Copies or other
materials.
5. "DISTRIBUTION EXPENSES": The aggregate of the following:
-----------------------
(a) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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6. ACCOUNTING PRACTICES: Books of account which pertain to the
--------------------
distribution of each Program shall be maintained by Fox or under its
supervision at such place or laces as may from time to time be customary
with Fox pursuant to its ordinary business practices. All financial matters
shall be determined, accounted for an calculated in all respects pursuant
to participation accounting practices customarily used by Fox. Fox may
establish reasonable reserves for anticipated Distribution Expenses. If Fox
incurs any costs and/or receives any receipts pertaining to a Program
together with other matters, a portion of such costs and/or receipts shall
be allocated to such Program in accordance with the participation
accounting practices customarily used by Fox.
7. FOREIGN REMITTANCES: No monies shall be included in Gross Receipts
-------------------
unless and until such sums have been received in U.S. Dollars in the United
States. All Gross Receipts received in a foreign currency will be
converted into United States Dollars and remitted to Fox in the United
States as promptly as applicable Laws will permit. As to funds received in
a foreign country which are not includable in Gross Receipts as a result of
being in a Restricted Currency ("Restricted Proceeds"), Fox shall notify
Participant of the amount of such funds on the appropriate Participation
Statement. As and when Participant's Percentage Participation becomes
payable to Participant. Participant may notify Fox in writing that
Participant elects to require settlement of Participant's share of the
Restricted Proceeds remaining in any country (not yet converted
4
into United States Dollars and therefore not includable in Gross Receipts)
in the currency of such country, by designating a bank or other
representative in such country, to whom payment may be made for
Participant's account. Subject to the applicable laws affecting such
transactions, such payment shall be made to such bank or representative at
Participant's expenses and shall fully satisfy Fox's obligations to
Participant as to such funds and Participant's share thereof. Any taxes or
expenses incurred in connection with the making of such payments shall be
deducted from amounts paid, or otherwise charged to or paid by the
Participant, in advance, if so required. In no event shall Fox be obligated
to apply Gross Receipts not actually received by Fox in United States
Dollars in the United States to the recoupment of any costs deductible from
Gross Receipts hereunder.
8. STATEMENTS: Fox shall render to Participant periodic Participation
----------
Statements showing, in summary form, Gross Receipts for each Program during
the Term thereof and permitted deductions therefrom, accompanied by payment
of the amount, if any, shown thereon to be due Participant by check drawn
to the order of Participant. The initial Participation Statement shall be
rendered for the period ending as of the close of the calendar quarter
during which delivery of any Programs to Fox occurs. Participation
Statements shall be rendered for periods of 3 months in length following
the end of the period covered by the first Participation Statement for 2
years, and then for periods of 6 months in length for 3 years and
thereafter for periods of 12 months in length. The period covered by a
Participation Statement is referred to as a Statement Period during which
no Gross Receipts are received. Each Participation Statement shall be
furnished 90 days after the close of the Statement Period for which the
Participation Statement is rendered. Any Participation Statement may be
changed from time to time to effectuate year-end adjustments made by Fox's
Accounting Department or its certified public accountants or to correct any
errors or omissions. Each Participation Statement will be mailed to
Participant at Participant's then current address for Notices under the
Agreement.
9. WITHHOLDINGS: There shall be deducted from payments to or for the
------------
account of Participant hereunder, the amount of any tax or other
withholding which, pursuant to applicable Laws, is required to be made by
Fox, based upon, measured by, or resulting from payments to or for the
account of Participant. Such deduction shall be in accordance with the
good faith interpretation by Fox of such Laws. Fox shall not be liable to
Participant for the amount of such deductions because of the payment of
said amount to the Party involved. Participant shall make and prosecute
any and all claims which it may have as to such tax deductions and/or
withholdings directly with the Party involved.
10. OVERPAYMENT/OFFSET: If Fox makes an overpayment to Participant
------------------
hereunder for any reason or if Participant is indebted to Distributor for
any reason relating to the Agreement, Participant shall pay Fox such
overpayment or indebtedness
5
on demand, or at the election of Fox, Fox may deduct and retain for its own
account an amount equal to any such overpayment or indebtedness from any
sums that may become due or payable by Fox to Participant for the account
of Participant, or to any company owned by, owning, or under common
ownership with Participant.
11. AUDIT: If Participant requests, Fox shall permit during the Term of a
-----
Program, at the sole cost and expense of Participant, a first class and
reputable firm of certified public accountants to examine Fox's books of
account which relate to the Participation Statements rendered to
Participant in respect to such Program which have not become incontestable.
Participant may make copies of or make excerpts from only such part of
Fox's books of account which relate tot he matters subject to examination
as herein provided. Such examination shall be only at such place where
said books of account are maintained and during reasonable business hours
in such manner as not to interfere with Fox's normal business activities
and not more frequently than once each calendar year. NO examination may
last for more than 30 days. A true copy of all reports made by
Participant's representative pursuant to the foregoing provisions shall be
delivered to Fox at the same time as delivered to Participant. Such right
to examine is limited to the Programs and under no circumstances shall
Participant or its authorized representatives have the right to examine
records relating to Fox's business generally or which respect to any other
Motion Pictures for purposes of comparison or otherwise.
12. INCONTESTABILITY: All information on Participation Statements
----------------
rendered to Participant will be deemed conclusive and binding on
Participant unless a written statement specifying the transactions on items
to which Participant objects is delivered to Fox within 36 months after the
date of the first Participation Statement reflecting the transaction or
item in question. If Participant's objections are not resolved amicably,
Participant may maintain or institute an action with respect to an
objection raised and not resolved amicably if commenced within 6 months
after the expiration of said 36-month period or the expiration of the
period of the applicable statute of limitations established by Law as to
such transactions or items, whichever first occurs. The Fox books of
account and all supporting documentation need not be retained and may be
destroyed after the expiration of said 36-month period unless Participant
has duly objected prior thereto and instituted an action as herein
provided.
13. OTHER TERMS AND CONDITIONS:
--------------------------
(a) Creditor - Debtor Relationship: Participant expressly
------------------------------
acknowledges the relationship between Participant and Fox to be that
of creditor and debtor with respect to the payment of any monies due
Participant hereunder. Nothing contained herein shall be construed to
create a trust or specific fund as to Gross Receipts of any Program or
Participant's share thereof or any other monies, or to prevent or
preclude Fox from commingling Gross Receipts or any monies due
6
Participant with any other monies or to give Participant a lien on any
Program or an assignment of the proceeds thereof.
(b) Litigation: Participant waives any right which Participant may
----------
have at law or equity to revoke, terminate, diminish or enjoin any
rights granted or acquired by Fox hereunder by reason of any claim
which Participant may assert for non-payment of any monies claimed due
and payable hereunder, it being agreed that Participant shall be
limited to an action at law for recovery of any such monies claimed
and for damages (if any) as a result of non-payment.
(c) No Joint Venture or Partnership: Nothing contained herein shall
-------------------------------
be construed so as to create a joint venture or partnership between
Participant and Fox, or a third Party beneficiary relationship as to
any third Party. Except as otherwise specifically set forth herein,
neither Participant nor Fox shall be authorized or empowered to make
any representation or commitment or to perform any act which shall be
binding on the other unless expressly unauthorized or empowered in
writing.
(d) No Representations: Fox has not made any express or implied
------------------
representation, warranty, guarantee or agreement that any Program will
be distributed or that the quality of any Program will equal or exceed
any minimum standard of quality, or that any Program will earn a
minimum amount of Gross Receipts, Net Profits, or any minimum amount
of monies will be expended in connection therewith or that
Participant's Percentage Participation will equal or exceed any
minimum amount or that any program will be distributed or exploited in
any particular manner.
(e) Assignment of Participant: Subject to all applicable laws and to
-------------------------
the rights of Distributor hereunder, Participant may assign the rights
to Participant's Percentage Participation at any time after the
Delivery Date, provided that a Notice of Irrevocable Authority and
Acceptance in Fox's usual form shall be executed by Participant and by
the assignee and delivered to Fox. Fox shall not be obligated to pay
in accordance with any partial assignment if the formula or basis of
computation creates any doubt of interpretation whereby Fox takes any
risk whatsoever and/or it all the assignees fail to execute and
deliver an agreement in Fox's usual form appointing a single person as
a disbursing agent, to whom Fox may make all such payments thereafter
regardless of any further assignment(s). Fox's payment in accordance
with any such assignment or designation shall be deemed to be
equivalent of payment to Participant hereunder and shall please and
discharge Fox from any further liability or obligation to Participant
for the payment of monies hereunder. Participant's right to inspect
and audit Fox's books of account shall not be assignable without Fox's
prior written consent.
7
(f) Captions: Captions and paragraphs hereof are inserted for
--------
reference and convenience only and in no way define, limit or
prescribe the scope or intent of any provision hereof.
8
SCHEDULE "1"
GLOSSARY
Schedule "1" of Exhibit "A" of the Distribution Rights Acquisition Agreement
("Agreement") dated as of September 1, 1990 between TWENTIETH CENTURY FOX FILM
CORPORATION ("Fox") and FOX CHILDREN'S NETWORK, INC. (referred to as "Licensor"
in the Agreement and as "Participant" in Exhibit "A").
As used in Exhibit "A" and the Agreement, the following words and phrases have
the defined meanings set forth below:
A. "Affiliate": A joint venture or partnership or other entity, other than a
-----------
corporation, with respect to which Fox shares in the actual management,
operation, and expenses thereof, or a corporate entity in which Fox or a
Subsidiary has a financial interest represented by stock ownership in excess of
20%, but not more than 50%. of the total issued and outstanding voting stock of
such corporate entity.
B. "Barter Sales": The sale by Distributor of commercial time in connection
--------------
with Free Television Distribution of the Programs.
C. "Canada": Canada and military installations, aircraft and/or ships flying
--------
the Canadian flag, and aircraft and/or ships owned or operated by any entity
whose principal administrative office is located within any of the
aforementioned Territories but excluding territorial areas and possessions.
D. "Cassettes": Motion Picture Copies in the form of a cassette, cartridge,
-----------
videogram, video disc, tape or other similar device now known or hereafter
devised and designed to be used in conjunction with a reproduction apparatus
which causes a Motion Picture to be visible on the screen of a television
receiver, television monitor or comparable device now known or hereafter
devised.
E. "Distributor": Fox and Subsidiaries and Affiliates engaged in the
-------------
distribution of the Programs for exhibition by other Parties. The term
"Distributor" shall not include the following: theaters, television broadcast
stations, electronic transmission systems (including cable, direct broadcast
satellite, microwave and master antenna), program delivery services and radio
stations (or other exhibitors of Motion Pictures by any means now known or
hereafter devised), or laboratories producing and/or distributing Motion Picture
Copies, or merchandisers, manufacturers, sellers, wholesale dealers or retail
dealers of Cassettes or any other products, or book or music publishers, or
Parties producing or selling phonograph records, or advertising agencies, or
agents for barter sales, or any Parties similar to any of the foregoing excluded
Parties (whether or not any of the foregoing excluded parties are Subsidiaries
of Affiliates), or Subdistributors.
1
F. "Domestic Territory": The United States and Canada.
--------------------
G. "Episode": Each episodic program of a Television Series or Television
---------
Motion Picture, including a Pilot.
H. "Force Majeure": The interpretation of or material interference with the
---------------
preparation, production, completion, or distribution of any of the Programs or
of a substantial number of Motion Pictures produced and/or distributed or
proposed to be produced and/or distributed by Distributor or Home Video
Distributor by any cause or occurrence beyond the control of Fox or Participant
as the case may be, including fire, flood, epidemic, earthquake, explosion,
accident, riot, war (declared or undeclared), blockade, embargo, act of public
enemy, civil disturbance, labor dispute, strike, lockout, inability to secure
sufficient labor, power, essential commodities, necessary equipment or adequate
transportation or transmission facilities, failure or non-availability of any
means for electronic transmission or reception of Motion Pictures, any
applicable Law, or any act of God.
I. "Foreign Territory": All Territories other than the United States and
-------------------
Canada.
J. "Free Television Distribution": The lease or license of a Motion Picture
------------------------------
to one or more Parties with the right to engage in the Free Television
Exhibition of the Motion Picture and/or to grant licenses to other Parties to
engage in the Free Television Exhibition and/or Free Television Distribution of
the Motion Picture.
K. "Free Television Exhibition": Television Exhibition, other than Pay
----------------------------
Television Exhibition, without any fee being charged to the viewer for the
privilege of unimpaired reception of such exhibition. For purposes of this
definition, any government imposed fees or taxes applicable to the use of
television receivers generally or a regulate periodic access, carriage or
equipment fee (but not any optional premium subscription charge or fee paid with
respect to Pay Television Exhibition) paid by a subscriber to a cable television
transmission service or agency for the privilege of unimpaired reception shall
not be deemed a fee charged to the viewer.
L. "Home Video Distribution": The lease or license of a Motion Picture to one
-------------------------
or more Parties with the right to engage in the manufacture, distribution,
rental and/or sale of Cassettes of the Motion Picture to one or more Parties for
Home/Video Exhibition of the Motion Picture and/or to engage in the further
lease or license of the Motion Picture to other parties with the right to engage
in the manufacture, distribution, rental and/or sale of Cassettes of the Motion
Picture for Home Video Exhibition of the Motion Picture.
M. "Home Video Distributor": Home Video Distributor means Fox, a Subsidiary,
------------------------
or an Affiliate engaged in Home Video Distribution including Home Video
Distribution directly to wholesale dealers which sell Cassettes embodying the
Picture to retail outlets.
2
N. "Home Video Exhibition": The non-public exhibition of a Motion Picture by
-----------------------
means of a Cassette in a private residence for viewing at the place of origin of
such exhibition.
O. "Including": Whenever examples are used after the word "including," such
-----------
examples are intended to be illustrative only and shall not limit the generality
of the words preceding the word "including."
P. "In perpetuity": The most extensive period of time permitted, including
---------------
renewal and extension periods, if any, by any applicable Law.
Q. "Law": Any present or future statute or ordinance, whether municipal,
-----
county, state, national or territorial; any executive, administrative or
judicial regulation, order, judgment or decree; any treaty or international
convention, any rule or principle of common law or equity, or any requirement
with force of law.
R. "Literary Material": Written matter, whether published or unpublished, in
-------------------
any form, including a novel, treatment, outline, screenplay, teleplay, story,
manuscript, play or otherwise, which may be included in a Motion Picture or upon
which a Motion Picture may be based.
S. "Literary Publishing Rights": The right to publish and distribute for sale
----------------------------
to the public hardcover or soft-cover printed publications (including
novelizations, screenplays and teleplays) of all or any part of the Literary
Material or other material (other than music and/or lyrics) used in connection
with a Motion Picture, including artwork, logos or photographic stills (but
solely to the extent that the right to make such use of such other material has
been separately obtained from the owner thereof), other than the publications
included within Merchandising Rights.
T. "Merchandising Rights": The right to license, manufacture, distribute, and
----------------------
sell articles of merchandise and/or products (including toys, board and video
games, novelties, trinkets, souvenirs, wearing apparel, fabric, foods, beverages
and cosmetics) and the right to license, distribute, and sell services which
embody on or in such merchandise, products or services characters, designs,
visual representations, names, likenesses and/or characteristics of artists,
physical properties or other materials appearing or use in or in connection with
a Motion Picture or all or any part of the Literary Material and the right to
publish, distribute, and sell services, which embody on or in such merchandise,
products or services characters, designs, visual representations, names,
likenesses and/or characteristics of artists, physical properties or other
materials appearing or used in or in connection with a Motion Picture or all or
any part o the Literary Material and the right to publish, distribute, and sell
souvenir programs, pictures books, comic books, post cards, movie novels, photo
novels, illustration books, and activity books or booklets which embody on or in
the foregoing any or all of the characters, designs, visual representations,
names, likenesses and/or characteristics of artists, physical properties or
other materials appearing or used in or in connection with a Motion Picture or
all or any part of the Literary Material.
3
U. "Motion Picture": Pictures of every kind and character whatsoever,
----------------
including all present and future technological developments, whether produced by
means of any photographic, electrical, electronic, mechanical or other processes
or devices now known or hereafter devised, and their accompanying devices and
processes whereby pictures, images, visual and aural representations are
recorded or otherwise preserved for projection, reproduction, exhibition, or
transmission by any means or media now known or hereafter devised in such manner
as to appear to be in motion or in sequence, including computer-generated
pictures and graphics other than video games.
V. "Motion Picture Copy": Any negative or positive Motion Picture film in any
---------------------
gauge, video or electronic tape recording, Cassette, disc or other physical
material or substance of any kind produced by means of any photographic,
electrical, electronic, mechanical or other process or device now known or
hereafter devised, on or with respect to which a Motion Picture or any part
thereof is printed, imprinted, recorded, reproduced, duplicated or otherwise
preserved.
W. "Network": Each group of television stations affiliated with either
---------
Capitol Cities/ABC, Inc. ("ABC"), CBS, Inc. ("CBS"), or National Broadcasting
Company ("NBC") which transmits programs included in the program services of
ABC, CBS or NBC, respectively.
X. "Network Exhibition": The Free Television Exhibition of a Motion Picture
--------------------
by a Network.
Y. "Network Television": The transmission of the program services of ABC, CBS
--------------------
and NBC (as the case may be) by each Network.
Z. "Non-Theatrical Distribution": The lease or license of a Motion Picture to
-----------------------------
one or more Parties with the right to engage in the Non-Theatrical Exhibition of
the Motion Picture and/or to grant licenses to other Parties to engage in the
Non-Theatrical Exhibition and/or Non-Theatrical Distribution of the Motion
Picture.
AA. "Non-Theatrical Exhibition": The exhibition of a Motion Picture using any
---------------------------
form of Motion Picture Copy in any manner now known or hereafter devised by any
medium or process now known or hereafter devised, other than Theatrical
Exhibition, Television Exhibition, or Home Video Exhibition. Non-Theatrical
Exhibition includes the exhibition of a Motion Picture (1) in private residences
(other than Television Exhibition and Home Video Exhibition), (2) on airplanes,
trains, ships and other common carriers, (3) in schools, colleges and other
educational institutions, libraries, governmental agencies, business and service
organizations and clubs, churches and other religious oriented groups, museums,
and film societies (including transmission of the exhibition by closed circuit
within the immediate area of the origin of such exhibition), and (4) in
permanent or temporary military installations, shut-in institutions, prisons,
retirement centers, offshore drilling rigs, logging camps, and remote forestry
and construction camps (including transmission of the exhibition by closed
circuit within the immediate are of the origin of such exhibition).
4
AB. "Outright Sale": The exclusive leasing or licensing of a Motion Picture to
---------------
any Party for a fixed period of time solely for a fixed price without such fixed
price being computed and paid with respect to any monies or levels thereof
actually derived or expenses actually incurred by such Party from the
distribution or exhibition of the Motion Picture.
AC. "Party": Any individual, corporation, partnership, joint venture,
-------
organization or any other business entity or firm or governmental agency.
AD. "Pay Television Distribution": The lease or license of a Motion Picture to
-----------------------------
one or more Parties with the right to engage in the Pay Television Exhibition of
the Motion Picture and/or to grant licenses to other Parties to engage in the
Pay Television Exhibition and/or Pay Television Distribution of the Motion
Picture.
AE. "Pay Television Exhibition": Television Exhibition which is available on
---------------------------
the basis of the payment of a premium subscription charge or fee (as
distinguished from an access, carriage or equipment fee) for the privilege of
unimpaired reception of a transmission for viewing in a private residence or in
a hotel, motel, hospital or other living accommodation or non-public area,
whether (1) such transmission is on a pay-per-view, pay-per-show, pay-per-
channel or pay-per-time period basis, or (2) such premium subscription charge or
fee is charged to the operator of a hotel, motel, hospital or other living
accommodation.
AF. "Pilot": A Television Motion Picture produced as a prototype for the
-------
purpose of interesting an exhibitor, sponsor or distributing entity in ordering
a Television Series based upon such Television Motion Picture.
AG. "Restricted Currency": A currency which is or becomes subject to
---------------------
moratorium, embargo, banking or exchange restrictions or restrictions against
remittances, or which in the business judgment of Fox is commercially
impracticable to remit.
AH. "Subdistributor": A party licensed by Distributor to distribute or license
----------------
the Programs for exhibition in any portion of the Territory, other than a
Subsidiary, Affiliate, exhibitor, a licensee of an Outright Sale transaction, or
a licensee which is a program delivery service for Television Exhibition (such
as a network system for over-the-air television broadcast stations and/or for
cable systems and/or for direct broadcast satellite service and/or for hotels
and/or for hospitals).
AI. "Subsidiary": A Party in which Fox has a financial interest represented by
------------
stock ownership in excess of 50% of the total issued and outstanding voting
stock of such Party.
AJ. "Television Distribution": The lease or license of a Motion Picture to one
-------------------------
or more Parties with the right to engage in the Television Exhibition of the
Motion Picture and/or to grant licenses to other Parties to engage in the
Television Exhibition and/or Television Distribution of the Motion Picture.
5
AK. "Television Exhibition": The exhibition of a Motion Picture using any form
-----------------------
of Motion Picture Copy for transmission by any means now known or hereafter
devised (including over-the-air, cable, wire, fiber, master antenna, satellite,
microwave, closed circuit, ▇▇▇▇▇▇, multi-point distribution services or direct
broadcast systems) which transmission is received, directly or indirectly by
retransmission or otherwise, impaired or unimpaired, for viewing the motion
Picture on the screen of a television receiver or comparable device now known or
hereafter devised (including high definition television), other than Home Video
Exhibit or Theatrical Exhibition.
AL. "Television Motion Picture": A Motion Picture primarily intended to be
---------------------------
initially distributed for Television Exhibition, including a mini-series or any
other form of television program other than a Television Series. Where the
context required, "Television Motion Picture" shall mean each and every Episode
of such Television Motion Picture.
AM. "Television Series": Related Episodes intended to be distributed as a
-------------------
group in episodic format (in which a continuing cast of characters performs
roles in different factual situations in each Episode in accordance with an
established story line) or anthology format (in which there is no continuing
cast of characters performing roles and no continuing established story line) or
a combination of an episodic and an anthology format. Where the context
requires. "Television Series" shall mean each and every Episode in such
Television Series.
AN. "Territory": Any specific geographic area constituting a nation, country,
-----------
state, governmental entity or any subdivision thereof located anywhere in the
universe.
AO. "Theatrical Distribution": The lease or license of a Motion Picture to one
-------------------------
or more Parties with the right to engage in Theatrical Exhibition of the Motion
Picture and/or to grant licenses to other Parties to engage in the Theatrical
Exhibition and/or Theatrical Distribution of the Motion Picture.
AP. "Theatrical Exhibition": The exhibition of a Motion Picture using any form
-----------------------
of Motion Picture Copy by any process now known or hereafter devised in walk-in
or drive-in theaters open to the general public on a regularly scheduled basis
where a fee is charged for admission to vide the Motion Picture.
AQ. "United States": The continental United States of America, including the
---------------
District of Columbia, the States of Alaska and Hawaii, Puerto Rico, Guam, Samoa
and the U.S. Virgin Islands, and military installations, aircraft and/or ships
flying the United States flag, and aircraft and/or ships owned or operated by
any entity whose principal administrative office is located within any of the
aforementioned Territories.
6
