Exhibit 10.9
* REVENUE SHARING * AGREEMENT
THIS AGREEMENT (the "Agreement") is made the 13th day of October, 1998 (the
"Effective Date").
BETWEEN:
(1) BLOCKBUSTER INC. whose principal place of business is at 0000 Xxx Xxxxxx,
Xxxxxx, Xxxxx 00000 (hereinafter referred to as "Blockbuster," which shall be
deemed to include its assigns once assigned); and
(2) *
WHEREAS:
(A) Blockbuster and certain of its Affiliates (the terms initially capitalized
in this Agreement and not otherwise defined herein shall have the respective
meanings set forth in Paragraph 1 of this Agreement) own, operate and franchise
retail stores which, among other things, rent, sell and market pre-recorded
videocassette tapes to the general public; and
(B) * and certain of its Affiliates acquire, produce, license, market and sell
motion pictures on pre-recorded videocassette tapes;
(C) * and Blockbuster are willing to enter into this Agreement under which
Blockbuster licenses, and has the option to purchase at the end of the Revenue
Sharing Period from *, the specified number of Copies of each Rental Picture set
forth herein;
(D) Blockbuster is willing to report electronically on an ongoing basis during
the Revenue Sharing Period information as to the rental of Copies per Rental
Picture as set forth in Exhibit D, attached hereto and made a part hereof.
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under an application for confidential treatment", and the confidential
section has been marked with a star (*).
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NOW THEREFORE, based on the above premises and in consideration of the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS:
a. "Affiliate" shall mean (i) in the case of *, all companies which are
controlled by or in which * has a controlling interest or which have a common
direct or indirect parent; and (ii) in the case of Blockbuster, all companies
which are controlled by or in which Blockbuster has a controlling interest or
which have a common direct or indirect parent.
b. *
c. *
d. "Blockbuster Headquarters" shall mean the corporate office of
Blockbuster located at 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000.
e. "Copy(ies)" shall mean English language and Spanish sub-titled VHS
videocassettes of the Rental Pictures licensed by Blockbuster from * for Home
Video Distribution. All other formats, including laserdisc, digital, divx and
DVD are not included under this Agreement.
f. "Damaged Copies" shall mean those Copies which become materially
damaged by Participating Store personnel, customers, or otherwise, during the
first ninety (90) calendar days of the Revenue Sharing Period.
g. "Defective Copies" shall mean those Copies that are mechanically
defective, mispackaged or contain extraneous material. Such extraneous material
may include, without limitation, pornographic, obscene or scenes of an
inappropriate nature placed on Copies, provided, however, that such extraneous
material shall not include the actual feature motion
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picture content or trailers so long as such content is not altered in any way
and is in compliance with the MPAA rating and the definition of Rental Pictures.
h. "Distribution Center" shall mean Blockbuster's distribution center that
is currently in McKinney, Texas. Blockbuster may add an additional two (2)
delivery points in the United States at its option.
i. *
j. "Franchise Stores" shall mean Blockbuster franchise stores designated
by Blockbuster from time to time as ordering Copies through Blockbuster. If a
Franchise Store elects to participate hereunder and is therefore designated by
Blockbuster pursuant to this Paragraph, it shall be deemed a Participating
Store.
k. *
l. "Home Video Distribution" or "Home Video Distribution Rights" shall
mean the right to manufacture, record, sell and/or distribute a motion picture
on videocassettes.
m. "Month" or "Monthly" shall mean Blockbuster's accounting cycles that
are based upon a four week, four week, five week rotation as set forth in
Exhibit C attached hereto and made a part hereof.
n. "Non-Theatrical Rental Pictures" shall mean each and every
non-theatrical feature motion picture for which * owns or controls Home Video
Distribution Rights in the Territory except for * provided such picture; (1) is
at least seventy (70) minutes in length; (2) is within Blockbuster's guidelines
of the MPAA rating system (i.e., Blockbuster does not make available for rental
to its customers' pictures which are either not rated or which have a rating of
NC17 or more restrictive); (3) is not a sports event, concert film, stage play,
foreign film, (with the exception of foreign produced films in the English
language), documentary, video or theatrical re-release, or library film; and (4)
is initially distributed by * via a medium other than theatrical release (e.g.,
via home video, cable, pay or free television exhibition) which when released on
videocassette is priced and distributed by * at the then current "wholesale
price for rental" now estimated at Fifty-eight Dollars (US$58.00) (as opposed to
a "sell-through price"), and is intended by * to be rented rather than sold to
consumers. If * and a third party execute a direct
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revenue sharing agreement which contains more favorable compensation terms than
the terms of this Agreement (the "New Output Agreement"), then Blockbuster shall
have the option to substitute all, but not less than all, of the terms of the
New Output Agreement for the terms of this Agreement during the remainder of the
Term of this Agreement. Further, * shall exercise practices relating to the
acquisition and distribution of Rental Pictures throughout the Term of this
Agreement substantially similar to those in which it engages at the time of
entering this Agreement, and to the extent such practices deviate, it shall be a
basis for Blockbuster to refuse any Rental Picture.
o. "Participating Store" shall mean (i) any Video Store in the United
States, which at any time during the Term of this Agreement, is wholly owned
and/or operated by Blockbuster or its Affiliates under the Blockbuster
trademarks; (ii) if designated by Blockbuster as ordering Copies through
Blockbuster, any Video Store in the United States, which at any time during the
Term of this Agreement, is wholly owned and/or operated by Blockbuster or its
Affiliates not under the Blockbuster trademarks; and (iii) Franchise Store. With
regard to Blockbuster stores in Canada, it shall mean those stores designated by
Blockbuster or an Affiliate from time to time as ordering Copies through
Blockbuster. For Copy quantity allocation purposes, Kiosks and Video Vending
Machines (the "Special Formats") shall not be included in the definition of
"Participating Stores." Blockbuster will continue to test various Special
Formats and at the time of general adoption by Blockbuster of a Special Format
following completion of a test, the parties shall discuss the results of the
test and mutually develop a matrix to facilitate the license of Copies for such
Special Formats.
p. *
q. "Rental Picture" and "Theatrical Rental Picture" shall mean each and
every feature motion picture for which * owns or controls Home Video
Distribution Rights in the Territory except for *, provided such picture: (1) is
at least seventy (70) minutes in length; (2) is within Blockbuster's guidelines
of the MPAA rating system (i.e., Blockbuster does not make available for rental
to its customers pictures which are either not rated or which have a rating of
NC17 or more restrictive); (3) is not a sports event, concert film, stage play,
foreign film (with the exception of foreign produced films in the English
language), documentary, video or theatrical re-release, or library film; and (4)
is distributed by * when initially released on videocassette, is
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priced and priced by * at the then current "wholesale price for rental" now
estimated at Fifty-eight Dollars (US$58.00) (as opposed to a "sell-through
price"), and is intended by * to be rented rather than sold to consumers. If *
and a third party execute a direct revenue sharing output agreement which
contains more favorable compensation terms than the terms of this Agreement (the
"New Output Agreement"), then Blockbuster shall have the option to substitute
all, but not less than all, of the terms of the New Output Agreement for the
terms of this Agreement during the remainder of the Term of this Agreement.
Further, * shall exercise practices relating to the acquisition and distribution
of Rental Pictures throughout the Term of this Agreement substantially similar
to those in which it engages at the time of entering this Agreement, and to the
extent such practices deviate, it shall be a basis for Blockbuster to refuse any
Rental Picture.
r. *
s. "Rental Transaction" shall mean that period of time that a title is
rented to a customer, including any extended viewing period, as defined by
Blockbuster's then current practices across all videocassettes available for
rental from all videocassettes suppliers.
t. "Revenue Sharing Period" shall mean the period commencing on the Video
Street Date of the relevant Rental Picture and running for the twenty-six (26)
weeks immediately following.
u. "Video Store" shall mean a retail outlet that is at least one thousand
five hundred (1,500) square feet that is primarily engaged in the rental of
videocassettes to the public for home viewing entertainment purposes.
v. "Video Street Date" shall mean, with respect to any Picture, the first
date on which, in the Territory, both: (i) such Picture is authorized by * for
Home Video Distribution, and (ii) Copies of such Picture are actually available
to the general public.
2. AGREEMENT TERM:
The term of this Agreement shall be for * (the "Term"), commencing as of
the Effective Date.
3. TERRITORY:
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The territory for purposes of this Agreement with respect to each Rental
Picture shall be the United States, its territories and possessions, if and to
the extent * owns or controls such rights to territories and possessions of the
United States (the "Territory"). Blockbuster and * agree to discuss the
inclusion of Canada, its provinces, territories and possessions in the Territory
in accordance with the terms and conditions of this Agreement or comparable
terms mutually agreed upon by the parties.
4. BLOCKBUSTER COMMITMENTS:
Beginning as of the date of this Agreement for Participating Stores,
Blockbuster agrees as follows:
a. License: The following terms shall apply to Rental Pictures:
(1) *
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(2) *
(a) *
(1) *
(i) *
(ii) *
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(iii) *
(iv) *
(2) *
(b) *
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(1) *
(i) *
(ii) *
(iii) *
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(iv) *
(2) *
(3) *
b. Participating Franchise Stores: In accordance with the terms and
conditions of this Agreement, Blockbuster may distribute Copies of the Rental
Pictures received under this Agreement to its Franchise Stores. Terms for
implementation of this Agreement at the franchise level and franchise payments
thereunder will be controlled and administered by Blockbuster but shall not be
inconsistent with the terms and conditions of this Agreement. For purposes of
this Agreement if a Franchise Store elects to participate under this Agreement,
such Franchise Store shall be a Participating Store.
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c. *
d. Packing and Shipping: Blockbuster will be responsible for making the
Copies ready for consumer rental at the Distribution Center and will pay for
shipping the Copies from its Distribution Center to its Participating Stores.
e. Damages/Defective Copies: * shall deliver to Blockbuster, at no cost,
additional Copies of each Rental Picture in the amount of * of the Base Buy
Copies as set forth on Exhibit A for Blockbuster to retain at its Distribution
Center and to use solely as replacement of Defective Copies and Damaged Copies;
provided, however, that if any of these Copies are placed in the Participating
Stores, * shall receive its share of the Rental Revenue for the new Copy used
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to replace the Damaged or Defective Copy in place of its share of the Rental
Revenue for the Damaged or Defective Copy.
f. Reporting: On a weekly basis throughout each Rental Picture's
respective Revenue Sharing Period and until such time Revenue Share Copies of
such Rental Picture are purchased pursuant to Paragraph 4.c., Blockbuster shall
electronically (or by any other means mutually agreed to by * and Blockbuster)
deliver to * reports (in a form mutually agreed to by * and Blockbuster)
detailing the number of rental transactions per Rental Picture licensed pursuant
to this Agreement and in a format set forth on Exhibit D.
g. No First Sale: Blockbuster agrees that the license of a Copy of any
Rental Picture and every Non-Theatrical Rental Picture under this Agreement
shall not be deemed a "sale or other transfer of ownership" within the meaning
of Section 106(3) of the Copyright Act, 17 U.S.C. Section 106(3), and shall not
render Blockbuster an "owner" of the Copy of that Theatrical Rental Picture or
Non-Theatrical Rental Picture within the meaning of the Section 109(a) of the
Copyright Act, 17 U.S.C. Section 109(a). Blockbuster expressly agrees that as
license it has no right to "sell or otherwise dispose of the possession of any
Copy of any Rental Picture and every Non-Theatrical Rental Picture except as
expressly provided in this Agreement.
5. * COMMITMENTS:
x. Xxxxx: * grants Blockbuster the right to distribute the Copies of the
Rental Pictures to Participating Stores or Blockbuster owned alternative
distribution channels including, without limitation, video vending machines, for
the transfer of possession on a temporary or permanent basis to members of the
general public for home viewing purposes.
b . Marketing Support: In consideration for the various services and
activities which Blockbuster has agreed to perform hereunder for the benefit of
*, such as rental reporting functions, * agrees to credit Blockbuster on a per
Rental Picture basis (on the relevant invoice) with marketing support funds (the
"Marketing Support Funds") in a minimum amount of * of the fixed revenue
generated for * on the Base number of Copies by Theatrical Rental Pictures
(i.e., * x base number of Copies for those with * or greater x * x base number
of Copies for those with Gross Box Office of less than * Marketing Support
Funds) on * per respective Copy. * of the Marketing Support Funds shall be
utilized by Blockbuster at its discretion for title specific promotion of a
particular Rental Picture and advertising the availability or association of
such Rental Picture with Blockbuster (with a * right of consultation) while the
remaining * shall be utilized by * at its discretion (with a Blockbuster right
of consultation) for title specific promotion of particular Rental Pictures
featuring Blockbuster's trademarks and logos in any such
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advertisement where applicable (the "Advertisement"). All Advertisements and
marketing materials shall be submitted to the respective party at least fifteen
(15) days prior to broadcast or publication for written approval. If such party
fails to respond within the fifteen (15) days such submission shall be deemed
approved. Both parties shall attempt to work within the allotted time period for
the approval process, provided, however, that if such time period becomes
unreasonable for either Blockbuster or *, the parties shall discuss and extend,
if desired, the time period. In certain instances, based on written
communication of specific shorter deadlines, all reasonable efforts will be made
to meet these shorter deadlines. Each party shall promptly provide the other
with written documentation that funds have been spent in accordance with the
terms of this Paragraph.
c. Shipping: * will deliver the Copies to the Distribution Center at least
three (3) weeks prior to Video Street Date and will make a good faith effort to
deliver the Copies up to four (4) weeks prior to Video Street Date per each
respective Rental Picture as long as Blockbuster submits its order by the stated
deadline reasonably provided by *, provided, however, that consistent failure by
* to deliver the Copies within the specified time period will be considered a
material breach of this Agreement.
6. AUDIT:
a. Audit. During the Term and continuing until the date six (6) months
following the date of expiration or earlier termination of this Agreement,
Blockbuster agrees that * or * authorized designee with three (3) business days
advance written notice, may conduct, during normal business hours, Monday
through Wednesday; (i) a total of four (4) audits per year of Blockbuster's
business operation and records at the Blockbuster Headquarters; and (ii) a total
of ten (10) audits per year of the business records at a Participating Store
(i.e., ten (10) total audits and not ten (10) audits per Participating Store),
solely pertaining to the Copies licensed by Blockbuster pursuant to this
Agreement. Any additional audit request of information not provided for above
including, without limitation, any audit of Bad Debt or Promotional and
Operational Credits shall be performed by an independent certified public
accountant on an annual basis who will only be given access to those records
pertaining to * Revenue Share Copies. Any audits conducted pursuant to this
section shall relate to Blockbuster's compliance with the terms of this
Agreement and shall not unreasonably interfere with Blockbuster's daily business
operations. * agrees that the data and other information collected by * may be
used by * only in connection with such audits and to fulfill * commitments under
this Agreement. Blockbuster agrees to reimburse * for actual costs incurred if
any audit results in deviation of five percent (5%) or more between the
percentage of Rental Revenue paid to * by Blockbuster and the percentage of
Rental Revenue due to * by Blockbuster.
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b. Rentrak/SuperComm: Blockbuster shall provide a daily transaction file
in standard Blockbuster format for each Rental Picture to the entity designated
by *, which shall be either Rentrak or SuperComm, to allow Rentrak or SuperComm,
as the case may be, to account for revenues due to * pursuant to the terms of
this Agreement.
7. * REPRESENTATIONS AND WARRANTIES:
* represents and warrants that:
a. It is a corporation organized and existing under the laws of the * with
its principal place of business in the *.
b. The undersigned has the full right, power and authority to sign this
Agreement on behalf of *.
c. The execution, delivery and performance of this Agreement does not and
will not, violate any provisions of * articles or certificates of incorporation
and bylaws, or any contract or other agreements to which * is a party.
d. There is no broker, finder or intermediary involved in connection with
the negotiations and discussions incident to the execution of this Agreement,
and no broker, finder, agent or intermediary who might be entitled to a fee,
commissions or any other payment upon the consummation of the transactions
contemplated by this Agreement.
e. This Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of * enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or any other laws now or hereinafter in effect and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
f. Copies shall be new and unused and comparable in quality to other
videocassette units being purchased by * in rental distribution channels.
8. BLOCKBUSTER'S REPRESENTATIONS AND WARRANTIES:
Blockbuster represents and warrants that:
a. It is a corporation organized and existing under the laws of the State
of Delaware, with its principal place of business in the State of Texas.
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b. The undersigned has the full right, power and authority to sign this
Agreement on behalf of Blockbuster.
c. The execution, delivery and performance of this Agreement does not and
will not, violate any provisions of Blockbuster's articles or certificates of
incorporation and bylaws, or any contract or other agreement to which
Blockbuster is a party.
d. There is no broker, finder or intermediary involved in connection with
the negotiations and discussions incident to the execution of this Agreement,
and no broker, finder, agent or intermediary who might be entitled to a fee,
commissions or any other payment upon the consummation of the transactions
contemplated by this Agreement.
e. This Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of Blockbuster enforceable in accordance
with its terms, except as enforceability may be limited to bankruptcy,
insolvency, reorganization, moratorium or any other laws now or hereinafter in
effect and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
9. INDEMNIFICATION:
(i) * agrees to, at all times, defend, indemnify and hold Blockbuster, its
parent company, their affiliates, subsidiaries, franchisees and the
officers, directors, agents and employees of each, harmless from and
against any and all claims, suits, damages, losses, liabilities,
obligation, fines, penalties, cost and expenses (whether based on libel,
slander, invasion of privacy, breach of contract, product liability,
patent, trademark, license or copyright infringement or otherwise),
including legal fees and expenses, of whatever kind or nature
(collectively, "Loss"), arising out of or based on (a) a material breach
or violation of this Agreement by * or any failure by * to perform any of
the agreements, terms, covenants, conditions, representations or
warranties of this Agreement to be performed by *; (b) the content of any
Copy of a Rental Picture licensed by Blockbuster pursuant to this
Agreement; or (c) any negligent acts or omissions by * its employees
and/or agents.
(ii) Blockbuster agrees to, at all times, defend, indemnify and hold *,
its parent company, their affiliates, subsidiaries, franchisees and the
officers, directors, agents and employees of each, harmless from and
against any Loss, arising out of or based on (a) a material breach or
violation of this Agreement by Blockbuster any failure by Blockbuster to
perform any of the agreements, terms, covenants, conditions,
representations or
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warranties of this Agreement to be performed by Blockbuster, or (b)
negligent acts or omissions by Blockbuster, its employees and/or agents.
(iii) The Indemnified Party shall give written notice to the Indemnifying
Party and the Indemnifying Party will promptly, at the Indemnified Party's
request, assume and diligently conduct the entire defense of any suit or
action, or the making of any claim as to which indemnity may be sought
hereunder, including settlements and appeals, at the Indemnifying Party's
sole cost and expense, and the Indemnifying Party shall pay and discharge
any and all settlement amounts, judgments or decrees which may be
rendered.
(iv) The Indemnifying Entity shall not, except with the consent of the
Indemnified Party, consent to entry of any judgment or administrative
order or enter into any settlement that (i) could affect the intellectual
property rights or other business interest of the Indemnified Party; or
(ii) does not include as an unconditional term thereof the giving by the
claimant or plaintiff by the Indemnified Party of a release from all
liability with respect to such claim or litigation.
(v) In the event that the Indemnifying Party is not asked or does not
accept the defense of any matter as above provided, the Indemnified Party
shall have the full right to defend against any such claim or demand, and
shall be entitled to settle or agree to pay in full such claim of demand,
in its sole discretion without releasing any obligation or liability of
the Indemnifying Party.
10. TERMINATION:
The non-defaulting party may terminate this Agreement if a Default, as
defined below, by the other party has occurred and is continuing by giving
written notice to the defaulting party. The term "Default" shall mean any of the
following: (a) failure by a party to comply with or perform any provision or
condition of this Agreement that results in a material breach of this Agreement
and, if such material breach can be cured, continuance of such failure for
thirty (30) days after written notice to such party (if cure is not practicable,
the thirty (30) day notice period is not required); (b) a party becomes
insolvent, is unable to pay its debts as they mature or is the subject of a
petition in bankruptcy, whether voluntary or involuntary, or of any other
proceeding under bankruptcy, insolvency or similar laws; or makes an assignment
for the benefit of creditors; or is named in, or its property is subject to a
suit for appointment of a receiver, or is dissolved or liquidated; or (c) any
material warranty or representation made in this Agreement is breached, false or
misleading in any material respect. In the event of such termination, the
non-defaulting party shall be entitled to pursue any and all remedies provided
in law and recover any damages it may have suffered by reason of such Default,
provided, however, that * expressly
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waives its right to seek equitable relief including, without limitation, seeking
injunctive relief. Upon Default and/or termination hereunder, any Copies in
Blockbuster's possession at time of termination shall continue to be licensed
under the terms of this Agreement until such Copies are returned to * or
purchased by Blockbuster.
11. REMEDIES:
a. No remedy conferred by any of the specific provisions of this Agreement
is intended to be exclusive of any other remedy which is otherwise available at
law, in equity, by statute or otherwise, and except as otherwise expressly
provided for herein, each and every other remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law, in equity, by statute or otherwise and no provision hereof
shall be construed so as to limit any party's available remedies in the event of
a breach by the other party hereto. The election of any one or more of such
remedies by any of the parties hereto shall not constitute a waiver by such
party of the right to pursue any other available remedies.
b. Except as provided herein, no civil action with respect to any dispute,
claim or controversy arising out of or relating to this Agreement may be
commenced until:
(i) The parties attempt in good faith to resolve through negotiation
any dispute, claim or controversy arising out of or relating to this
Agreement. Either party may initiate negotiations by sending written
notice in letter form to the other party, setting forth the subject of the
dispute and the relief requested. The recipient of such notice will
respond in writing within five (5) business days with a statement of its
position on and recommend a solution to the dispute. If the dispute is not
resolved by this exchange of correspondence then representatives of each
part with full settlement authority will meet at a mutual agreeable time
and place within ten (10) business days of the date of the initial notice
in order to exchange relevant information and perspectives, and to attempt
to resolve the dispute. If the dispute is not resolved by these
negotiations, the matter will be submitted to J.A.M.S/ENDISPUTE, or its
successor, for binding arbitration; and
(ii) If the parties are unable to resolve the dispute, claim or
controversy arising out of or relating to this Agreement pursuant to the
above subparagraph b., such dispute, claim or controversy shall be
submitted to final and binding arbitration before J.A.M.S/ENDISPUTE, or
its successor, pursuant to the United States Arbitration Act, 9 U.S.C.
Sec. 1 et seq. Either party may commence the arbitration process called
for in this Agreement by filing a written demand for arbitration with
J.A.M.S/ENDISPUTE, with a copy to the other party. The arbitration will be
conducted in accordance with the provisions of J.A.M.S/ENDISPUTE's
Streamlined Arbitration Rules and Procedures in
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effect at the time of filing of the demand for arbitration. The parties
will cooperate with J.A.M.S/ENDISPUTE and with one another in selecting an
arbitrator from J.A.M.S/ENDISPUTE's panel of neutrals, and in scheduling
the arbitration proceedings. The parties covenant that they will
participate in the arbitration in good faith, and that they will share
equally in its costs. The provisions of this Paragraph may be enforced by
any court of competent jurisdiction, and the party seeking enforcement
shall be entitled to an award of all costs, fees and expenses, including
attorneys fees, to be paid by the party against whom enforcement is
ordered.
12. MISCELLANEOUS:
12.1 FORCE MAJEURE: Neither party shall be considered in default of this
Agreement or be liable for damage for any failure of performance hereunder
occasioned by an act of God, force of nature, war or warlike activity,
insurrection or civil commotion, labor dispute, lock out (whether or not such is
under the parties' control, transportation delay, governmental regulatory action
whether or not with proper authority or other cause similar or dissimilar to the
foregoing and beyond its reasonable control, provided the party so affected
gives prompt notice to the other. In the event of a suspension of any obligation
by reason of this section which extends beyond ten (10) days, the party not
affected may, at its option, elect to cancel those aspects of this Agreement
which are reasonably feasible to terminate. Such cancellation shall be effective
thirty (30) days after written notice of such cancellation has been given to the
other party.
12.2 NOTICE: Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given and received on the date
of delivery or on the third (3rd) business day following the date of mailing of
the same, or on the day of transmission by telecopier or other form of recorded
communication service of the same, as the case may be to the party to be
notified at the addresses set forth below:
If to Blockbuster: Blockbuster Inc.
0000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
cc: Chief Executive Officer
If to *: *
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with a copy to: *
or such other address as may be designated by either party by written notice to
the other as hereinabove provided.
12.3 ENTIRE AGREEMENT: This Agreement, together with all Exhibits attached
hereto, represents the entire agreement and understanding between the parties
with respect to the subject matter of this Agreement, and supersedes any other
agreement or understanding, written or oral, that the parties hereto may have
had with respect thereto. No statement or inducement with respect to the subject
matter by either party or by any agent or representative of either party which
is not contained in this Agreement shall be valid or binding between the
parties.
12.4 RELATIONSHIP OF PARTIES: The parties are independent contractors, and
nothing in this Agreement shall be deemed or construed to create, or have been
intended to create a partnership, joint venture, employment or agency
relationship between the parties. Each party agrees that it neither has nor will
give the appearance or impression of possessing the legal authority to bind or
commit any other party in any way except as provided in this Agreement.
12.5 EFFECT OF HEADINGS: The headings and subheadings of the sections of
this Agreement are inserted for convenience of reference only and shall not
control or affect the meaning or construction of any of the agreements, terms,
covenants and conditions of this Agreement in any manner.
12.6 CONSTRUCTION: The Agreement has been fully reviewed and negotiated by
the parties and their respective legal counsel. Accordingly, in interpreting
this Agreement, no weight shall be placed upon which party or its counsel
drafted the provision being interpreted.
12.7 SEVERABILITY: If any term or provision of this Agreement shall be
found to be void or contrary to law, such term or provision shall, but only to
the extent necessary to bring this Agreement within the requirements of law, be
deemed to be severable from the other terms and provisions of this Agreement,
and the remainder of this Agreement shall be given effect as if the parties had
not included the severed term herein.
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* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
20
12.8 AMENDMENTS: No provision of this Agreement may be modified, waived or
amended except by a written instrument duly executed by each of the parties. Any
such modifications, waivers or amendments shall not require additional
consideration to be effective.
12.9 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.10 IMPLIED WAIVER: Any failure on the part of either party to insist
upon the performance of this Agreement or any part of this Agreement, shall not
constitute a waiver of any right under this Agreement.
12.11 ASSIGNMENT: Neither party may assign its rights or delegate its
obligations under this Agreement without the other party's prior written
consent, subject to the following: (i) as to *, * may assign its rights or
delegate its obligations under this Agreement to an Affiliate, provided that
such entity obtains or retains substantially the same access to the trade
names/trademarks of * and the Home Video Distribution Rights to * "new" (i.e.,
yet-to-be-released) theatrical releases as * enjoyed immediately prior to the
applicable transfer; and (ii) * shall have the right to assign its right to
receive payments to any entity hereunder; and (ii) as to Blockbuster,
Blockbuster may assign its rights or delegate its obligations under this
Agreement, to an Affiliate, provided that such assignment is coextensive with an
assignment of all or substantially all the video rental business of Blockbuster.
12.12 SURVIVAL: All representations, warranties and indemnities made
herein shall survive the termination of this Agreement and shall remain in full
force and effect for a period of two (2) years. All of the party's rights and
privileges, to the extent they are fairly attributable to events or conditions
occurring or existing on or prior to the termination of this Agreement, shall
survive termination and shall be enforceable by such party and its successors
and assigns.
12.13 CONFIDENTIALITY: Except as otherwise required by applicable federal
and state laws, or as may be required for the preparation of tax returns or
other legally required documents or as reasonably necessary to the employees,
agents, lawyers, accountants, or auditors of either party, or in any action to
enforce the provisions hereof, each party shall keep the information regarding
the details of this Agreement confidential and restrict dissemination to each of
its own personnel and to third parties to only a "need to know" basis, using the
standard of care which each uses to protect its own information from disclosure
thereafter. The party disclosing confidential information to its own personnel
and third parties shall require that these persons be bound by the
confidentiality obligations set forth in this Agreement. In addition to the
foregoing, the parties must keep all information provided by each other in
accordance with this
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* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
21
Agreement confidential and any unauthorized disclosure shall be considered a
material breach of this Agreement. Any press release issued hereunder by either
party must be approved in writing by the other party prior to its release.
12.14 GOVERNING LAW: This Agreement shall be constructed in accordance
with the laws of the * without regard to its rules on conflicts of law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date and year first above
written.
* BLOCKBUSTER INC.
Name: * Name: Xxxxxx X. Xxxxx
--------------------------------
Signature: /s/ * Signature: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: * Title: EVP
-------------------------------
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* "Confidential material omitted and separately filed with the Commission
under an application for confidential treatment".
Exhibit A
Blockbuster Direct Revenue Sharing Matrix
*
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* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment. Two pages have been
omitted from Exhibit A.
Exhibit B
Spanish Sub-titled Matrix to be negotiated and inserted at a later date.
Exhibit C
Accounting calendar denoting timing of certain events.
Exhibit D
Electronic Reporting Format
*
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* "Confidential material omitted and separately filed with the Commission
under an application for confidential treatment".