CONFIDENTIAL TREATMENT REQUESTED BY ACCESS INTEGRATED TECHNOLOGIES
INC. OF CERTAIN PORTIONS OF THIS AGREEMENT IN ACCORDANCE WITH RULE 24B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EXHIBIT 10.1
DIGITAL CINEMA AGREEMENT
THIS DIGITAL CINEMA AGREEMENT (this "Agreement") is made and entered into
as of October 20, 2005 by and between UNIVERSAL CITY STUDIOS LLLP, a Delaware
corporation ("Distributor"), and CHRISTIE/AIX, INC., a Delaware corporation
("Christie/AIX").
RECITALS
WHEREAS, Christie/AIX is in the business of deploying digital systems for
use in exhibiting digital versions of theatrical feature films; and
WHEREAS, Distributor is in the business of producing and distributing
theatrical feature films, and is interested in distributing digital versions of
theatrical feature films.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and for other valuable consideration received, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
mutually agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings set forth below:
"Contract Year" means a one-year period beginning on November 1st of one
year and ending on October 31st of the following year. The first "Contract Year"
is November 1, 2005 to October 31, 2006.
"Cineplex" means a theater with multiple cinema auditoriums.
"DCI" means Digital Cinema Initiatives, LLC.
"DCI Specification" means the Digital Cinema System Specification V1.0
dated July 20, 2005 issued by DCI.
"Digital System" means collectively one or more Projection Systems, a
central storage server connecting all Projection Systems within a Cineplex,
Theater Management Software, and such other system components and software as
are required to meet the standards set forth in the DCI Spec, all of which have
an Installation Date within the Roll-Out Period.
"Digital Title" means a digitized version of a theatrical feature film
released by a motion picture studio.
"Engagement" means the period beginning with an opening date of a Digital
Title within a Cineplex and ending on the closing date (i.e. the last date of a
continuous run beginning on the opening date) of that Digital Title within that
same Cineplex.
"Exhibitor" means the owner or operator of one or more Cineplexes used for
the exhibition of theatrical feature films. . "Installation Date" means, in
respect of a Digital System, the date on which the Digital System becomes
operational.
"Major Studio" means Distributor, Disney, Fox, Paramount, Sony Pictures
Entertainment and Warner Bros.
"Projection System" means collectively a system deployed by Christie/AIX
consisting of a DLP Cinema 2k projector, capable of both 2-D and 3-D display,
and a digital cinema server for each theatre screen. Each Projection System will
be a part of a Digital System.
"Roll-Out Period" means *** through ***.
"Security Breach" means a failure to comply with the DCI Specification
which results in (i) the unauthorized copying of encrypted versions of content
stored in a Digital System, or (ii) the interception of the data stream as the
digitized content is moved within the Digital System or from one component of
the Digital System to another, such that (in either circumstance) an
unauthorized copy of such content is able to be duplicated and displayed in
unencrypted form on a device other than a Digital System in the same Cineplex.
"System Error" means any cause of a malfunction of a Digital System which
is completely internal to the Digital System without any external influence.
"Territory" means the United States, including its territories and
possessions, and Canada.
"Theater Management Software" means computer software that allows a Digital
System to be controlled and monitored and permits show programming.
"VPF" means a virtual print fee, in the applicable amount determined under
Attachment C hereto.
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2. TERM. Unless earlier terminated as provided for in this Agreement, the
term of this Agreement will commence on October 20, 2005 and end on October 31,
2017.
3. DEPLOYMENT.
(a) Christie/AIX will begin deployment of the Digital Systems immediately
upon reaching written agreement concerning the theatrical release of Digital
Titles with (i) Distributor and at least two Major Studios or, alternatively,
with Distributor, one Major Studio and both DreamWorks and New Line; and (ii) at
least one Exhibitor. Notwithstanding the foregoing, Christie/AIX reserves the
right to commence deployment at any time prior to entering into such written
agreements. Christie/AIX will retain the services of Christie to install the
Digital Systems.
(b) The maximum number of Projection Systems to be deployed and covered
under this Agreement will be *** Projection Systems.
(c) Christie/AIX will deploy fully operational Projection Systems for at
least ***% of the screens in any complex where any Projection System is deployed
by Christie/AIX.
4. DCI SPECIFICATION COMPLIANCE. Initially, Christie/AIX will deploy
Digital Systems that comply with the DCI Specification except to the extent that
technology necessary for compliance with the DCI Specification is not
commercially available, and in any event will have JPEG2000 capability. When the
technology necessary to make Digital Systems compliant with the DCI
Specification becomes commercially available, Christie/AIX will (a) thereafter
deploy Digital Systems that are compliant with the DCI Specification and (b)
within four (4) months after such availability (or, in the case of a Security
Breach, in such shorter time as may be reasonably practical) upgrade Digital
Systems previously deployed in order to bring such Digital Systems into
compliance with the DCI Specification. Christie/AIX will require each Exhibitor
to which Digital Systems are deployed to agree, in substance, to not do anything
which would render Digital Systems non-compliant with, or prevent Digital
Systems from being non-compliant with, the DCI Specification during the term of
this Agreement. Upon written notice by Distributor to Christie/AIX that a
Security Breach has occurred and is continuing, the parties shall promptly meet
and confer in good faith to discuss an appropriate solution to remedy such
Security Breach and shall use reasonable commercial efforts to reach a
reasonable remedy acceptable to both parties. If within one hundred twenty (120)
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days after such notice the parties are unable to agree on an appropriate remedy
for such Security Breach, or if within one hundred eighty (180) days after such
notice Christie/AIX has not implemented a mutually agreeable remedy to such
Security Breach, Distributor shall have the right to terminate this Agreement by
written notice to Christie/AIX. Digital Systems will consist of the equipment
listed on Attachment A and will have the capabilities described on Attachment A.
5. REPORTING AND MAINTENANCE.
(a) During the Roll-Out Period, Christie/AIX will provide to Distributor
(i) monthly written reports showing (A) all theater locations at which Digital
Systems were installed during the prior month and the number of screens for
which Digital Systems were installed at each such theater location, (B) all
theater locations at which Digital Systems became fully operational during the
prior month and the number of screens for which Digital Systems became fully
operational at each such theater location, and (C) on a cumulative basis all
theater locations where installed and fully operational Digital Systems are
located and the number of screens for which Digital Systems are installed and
fully operational at each such theater location (reflecting any changes in the
location of Digital Systems subsequent to initial installation). Upon the
installation of Digital Systems, Christie/AIX will promptly furnish to
Distributor certification by Christie (or the appropriate subcontractor if other
than Christie) that such Digital Systems are in compliance with the requirements
of Section 4.
(b) During the term of this Agreement, Christie/AIX or its subcontractors
will:
(i) during the hours of 5:00 am Pacific time to 2:00 am Pacific time
the following day, seven days a week, provide telephone technical support
for Digital Systems which have been employed; and
(ii) provide on-site regular preventative maintenance and emergency
repairs for Digital Systems which have been deployed, and perform all such
services in a professional and competent manner.
6. DISTRIBUTOR'S OBLIGATION REGARDING DIGITAL RELEASES.
(a) Distributor agrees that Digital Title versions of theatrical feature
films released by Distributor will be made available in accordance with
Attachment B.
(b) If Distributor agrees with an Exhibitor to license a theatrical feature
film to any auditorium for which a fully operational Projection System is
installed, Distributor will comply with Section 7. Subject to compliance with
Section 7, Distributor may in its discretion, in addition to providing a Digital
Title version of the theatrical feature film for the auditorium to which
licensed, also provide a physical film print of such theatrical feature film for
showing in such auditorium. Nothing herein shall preclude Distributor from
providing to an Exhibitor physical film prints for showing in any auditorium for
which a fully operational Projection System is not installed.
(c) Focus Features and Rogue Pictures will not have any obligation to
release Digital Title versions of any theatrical feature film either of them may
release release. In the event Focus Features or Rogue Pictures, in its
discretion, does release Digital Title versions of theatrical feature films
either of them may release, Distributor may elect, by written notice to
Christie/AIX, to have any or all of such Digital Titles included for all
purposes under this Agreement, including without limitation aggregation of VPFs
paid on such Digital Titles with other VPFs paid by Distributor for purposes of
VPF discounts provided for in Attachment C.
(d) In the event that a Digital System is subject to a Security Breach,
Distributor will have no obligation to provide a Digital Title to that Digital
System until such Security Breach is cured.
7. DISTRIBUTOR'S OBLIGATION REGARDING VIRTUAL PRINT FEES. Distributor will
pay to Christie/AIX one Virtual Print Fee ("VPF"), in the applicable amount
determined under Attachment C, per Engagement for each auditorium in a Cineplex
for which a Digital Title is booked by Distributor and shown on a Digital
System. Distributor will not pay a VPF for:
(i) Trailers;
(ii) Material of less than 15 minutes duration which Distributor programs
and licenses to be exhibited only with the Digital Title (e.g., short subjects,
cartoons);
(iii) Moveovers, i.e., presentation of a Digital Title in an auditorium
other than the auditorium where the Digital Title opened at the beginning of the
Engagement, but within the same Cineplex;
(iv) An auditorium where the Digital System malfunctions by reason of
System Error for two consecutive showings;
(v) Exhibition on a Projection System more than 10 years after the
Installation Date of that Projection System; or
(vi) Premieres, sneak previews or other one-off showings.
In addition, if, within a Cineplex, a Digital Title of a theatrical feature film
is booked to and opens in an auditorium in which a Projection System is
installed and fully operational and the Digital Title is thereafter moved to an
auditorium containing only a 35mm projector, with the result that Distributor
has to pay for the manufacture and delivery of a new 35mm print to such Cineplex
to enable the moveover, then Distributor will not pay a VPF for such Engagement
of such Digital Title at such Cineplex, or, if a VPF has already been paid,
Distributor will be entitled to a full refund or credit in the amount of such
VPF. In the event of any such moveover as described in the immediately preceding
sentence, Distributor will use all reasonable business efforts to deliver an
existing print from another location and otherwise minimize the need to
manufacture and deliver a new 35mm print.
8. MFN. Christie/AIX agrees that the VPFs charged by Christie/AIX to
Distributor in any Contract Year will not exceed the lowest VPFs charged by
Christie/AIX in such Contract Year to any other distributor of commercial motion
pictures, except as may result from the effect of quantity discounts which are
offered by Christie/AIX on comparable terms both to Distributor and to any other
distributor of commercial motion pictures.
9. DISTRIBUTOR'S OBLIGATION REGARDING WATERMARKING LICENSE FEES. If
Christie/AIX licenses watermarking technology in order to have Digital Systems
comply with the DCI Spec, Distributor will negotiate with Christie/AIX to
determine what additional fee should be paid by Distributor for the watermarking
technology, provided however that (i) the fee will be based upon Christie/AIX's
actual direct out-of-pocket costs pro-rated over all of Christie/AIX's
customers; (ii) the maximum fee will be an increase of $*** per VPF; and (iii)
the cost to Distributor to recover the watermark identification shall not exceed
any comparable DCI compliant watermarking systems.
10. INVOICING, RECORD KEEPING AND AUDITS. Christie/AIX will invoice
Distributor for VPFs in the month following the month in which the payment
obligation for the VPF accrues, and payment is due net forty-five (45) days from
the date of invoice. Distributor will regularly report to Christie/AIX details
of all bookings of Digital Titles by Distributor to such locations. Christie/AIX
will require Exhibitors to regularly report to Christie/AIX all showings of
Digital Titles on Digital Systems or otherwise permit Christie/AIX to have
access to such information, it being agreed by Distributor that Distributor will
not be permitted to audit or have access to such information without the consent
of the appropriate Exhibitors. Christie/AIX will, for at least three (3) years
from the date of invoice, keep records of all information on which invoices to
Distributor are based. Distributor, at its sole expense, will have the right to
audit, during normal business hours and upon reasonable advance notice, but no
more than once in any calendar year, such records solely for the purpose of
verifying amounts invoiced by Christie/AIX to Distributor. Distributor will, for
at least three (3) years, keep records of all bookings of Digital Titles, and
Christie/AIX, at its sole expense, will have the right to audit, during normal
business hours and upon reasonable advance notice, but no more than once in any
calendar year, such records solely for the purpose of verifying amounts payable
by Distributor to Christie/AIX.
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11. OTHER COSTS. Distributor is responsible for any and all costs relating
to producing, encoding, encrypting, packaging, marketing and delivering Digital
Titles. Except for payment of VPFs to Christie/AIX as required under this
Agreement, payment of amounts negotiated pursuant to Section 9 and payment for
any services provided by separate agreement between Christie/AIX and Distributor
pursuant to Section 12, Distributor will not be responsible for payment to
Christie/AIX with respect to any cost items arising in connection with the
deployment of Digital Systems, including installation, testing, or other on-site
costs.
12. SUPPLEMENTARY SERVICES. Christie/AIX, directly or through
subcontractors, will provide such content delivery, key management or other
supplementary services as may be agreed to between Distributor and Christie/AIX
from time to time in writing.
13. CITYWALK THEATERS. Christie/AIX will use reasonable commercial efforts
to take such steps as may be necessary to deploy Digital Systems to the Cineplex
doing business as "Universal Citywalk Hollywood" and the Cineplex doing business
as "Universal Citywalk Orlando," including the negotiation of mutually
acceptable equipment license agreements with the owners of such theaters.
14. NON-EXCLUSIVE. Nothing contained in this Agreement creates, or shall be
construed as creating, an exclusive relationship between the parties, and each
party shall be free to enter into agreements with any other party with respect
to all aspects of digital cinema.
15. INTELLECTUAL PROPERTY. Nothing contained in this Agreement grants, or
shall be construed as granting, to either party any right or license to use any
intellectual property of the other, and each party reserves all rights to its
intellectual property.
16. RELATIONSHIP OF PARTIES. The relationship between the parties
established under this Agreement is that of independent contractors, and neither
party is, or shall be construed to be, a partner, joint venture partner,
distributor, franchisee, agent or employee of the other. Neither party shall
have the right or power to act for the other to bind the other in any manner.
17. FORCE MAJEURE. If the performance of this Agreement or of any
obligation hereunder by either party is prevented, restricted or interfered with
by reason of war or other violence, terrorism, fire, flood, earthquake, typhoon
or other casualty or accident, strikes or labor disputes, governmental action,
or any other act or condition whatsoever beyond the reasonable control of such
party, such party shall be excused from performance for so long as such cause
continues.
18. TERMINATION.
(a) If for any reason Christie/AIX does not deploy a minimum of *** fully
operational Projection Systems by no later than ***, either party may terminate
this Agreement with no further obligation to Christie/AIX;
(b) If for any reason Christie/AIX does not meet the following
requirements, other than by reason of failing to obtain debt financing on
reasonable terms, Distributor may terminate this Agreement with no further
obligation to Christie/AIX:
(i) Deploy a minimum of *** fully operational Projection Systems no
later than ***; and
(ii) Deploy a minimum of *** fully operational Projection Systems no
later than the end of the Roll-Out Period.
(c) Either party may terminate this Agreement by written notice to the
other party in the event the other party materially breaches any of its
obligations hereunder and fails to cure such breach within sixty (60) days after
the non-breaching party gives written notice of such breach to the breaching
party; provided, however, that to the extent such breach is susceptible of cure
and the breaching party has commenced a cure within such period, such period
shall continue for as long as the breaching party diligently pursues a cure.
(d) Either party may terminate this Agreement with or without notice to the
other party in the event the other party dissolves or ceases to transact
business, or in the event a bankruptcy proceeding is commenced by or against the
other party, a receiver is appointed for all or substantially all of the assets
of the other party, or the other party admits in writing its inability to pay
its debts a they fall due.
19. SURVIVAL. Sections 1, 15, 19, 20, 22, 23 and 26-33 and any accrued
payment obligations shall survive any expiration or termination of this
Agreement.
20. CONFIDENTIALITY. Except as required under applicable law, including
federal securities laws, Distributor and Christie/AIX shall keep confidential,
and not disclose to any third party, the provisions and content of this
Agreement, and all information provided by either party to the other under or in
connection with this Agreement. The parties may, however, disclose such
provisions, content and information to their respective affiliates, attorneys,
accountants, lenders, advisors, consultants, subcontractors, agents and
representatives (collectively, "Representatives") on a confidential basis,
provided that each party shall be responsible for any failure of any of its
Representatives to observe the confidentiality obligations of such party under
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this Agreement. The confidentiality obligations under this Section 20 shall not
apply to any information which (a) is or becomes generally available to the
public other than as a result of disclosure by Distributor or Christie/AIX, (b)
is known to the receiving party at the time of disclosure and not subject to any
other confidentiality obligation by which the receiving party is bound; (c) is
received from a third party (other than a Representative of the other party)
which is not bound by a confidentiality obligation with respect to such
information. Each party may disclose information subject to the confidentiality
obligations of this Section 20 as required by subpoena or order of any court or
governmental entity, provided that such party gives prompt notice to the other
party to allow the other party the opportunity of seeking a protective order or
other relief. Distributor expressly agrees that auditors engaged by any other
motion picture distributor to conduct a most favored nations audit of
Christie/AIX in connection with digital cinema shall be permitted to review this
Agreement. The foregoing obligations will survive the expiration or any
termination of this Agreement.
21. PRESS RELEASES. Distributor may issue a press release regarding the
execution of this Agreement in such form as reasonably approved by Christie/AIX.
Christie/AIX may issue a press release regarding the execution of this
Agreement, in such form as reasonably approved by Distributor.
22. LIMITATION OF LIABILITY. The parties agree that in any arbitration or
other action regarding or related to this Agreement, the damages that may be
awarded shall be limited to any actual damages suffered; provided, however, that
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR ANY CLAIM FOR LOSS OF PROFITS,
LOST BUSINESS, OR LOST BUSINESS OPPORTUNITIES, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
23. DISPUTE RESOLUTION.
(a) Any controversy, claim, or dispute arising out of or related to this
Agreement or the interpretation, performance, or breach hereof, including but
not limited to alleged violations of state or federal statutory or common law
rights or duties (a "Dispute") shall be resolved according to the procedures set
forth in this Section 23 which shall constitute the sole dispute resolution
mechanism hereunder.
(b) In the event that the parties are unable to resolve any Dispute after
meeting and attempting in good faith to reach a negotiated resolution, such
Dispute(s) shall first be mediated by a retired judge or justice of any
California state or federal court. If the parties are unable to agree upon a
mediator, either party may apply to the Los Angeles office of JAMS/Endispute or
its successor ("JAMS") for the appointment of a mediator from a panel of retired
judges and justices maintained by that organization.
(c) If the parties are unable to resolve one or more Dispute(s) by
mediation, then either party may initiate arbitration of such Dispute(s). The
arbitration shall be initiated and conducted according to the JAMS/Endispute
Comprehensive Arbitration Rules and Procedures in effect as of the date hereof,
including the Optional Appeal Procedure provided for in such rules (the
"Arbitration Rules"). The arbitration shall be conducted in Los Angeles County,
California before a single neutral arbitrator appointed in accordance with the
Arbitration Rules, except that the parties shall be entitled to undertake
discovery in the arbitration in accordance with the statutory provisions and
rules applicable, as of the date of the first arbitration notice, to discovery
in civil actions before a Superior Court of the State of California in Los
Angeles County. The arbitrator shall have the authority to hear and rule upon
all discovery motions and, in connection therewith, to award sanctions as
appropriate in accordance with the then-prevailing California law. Any appeal
shall be heard and decided by a panel of three neutral arbitrators. The neutral
arbitrator and the members of any Appeal Panel shall be retired judges or
justices of any California state or federal court. In all their substantive (as
opposed to procedural or discovery-related) rulings, the arbitrator and Appeal
Panel shall apply California law. If either party refuses to perform any or all
of its obligations under the final arbitration award (following appeal, if
applicable) within thirty (30) days of such award being rendered, then the other
party may enforce the final award in any court of competent jurisdiction in Los
Angeles County. Except to the extent otherwise required pursuant to the
applicable JAMS rules and procedures and applicable law, each party will pay the
fees of its respective attorney(s), the expense of its witnesses, cost of any
record or transcript of the arbitration, and any other expenses connected with
the arbitration that such party might be expected to incur had the Dispute been
subject to resolution in court.
(d) Any Dispute or portion thereof, or any claim for a particular form of
relief (not otherwise precluded by any other provision of this Agreement), that
may not be arbitrated pursuant to applicable state or federal law may be heard
in a court of competent jurisdiction in Los Angeles County. If a party believes
in good faith that all or part of a Dispute, or any claim for relief or remedy
sought, is not subject to arbitration under then-prevailing law, then that party
may seek a determination to that effect from an appropriate court. If the court
determines that the matter is not arbitrable or that the remedy sought is not
available in arbitration, then the specific matter or request for remedy in
question shall be resolved by the court, sitting without a jury, and the parties
hereby irrevocably waive their respective rights to trial by jury of any cause
of action, claim, counterclaim or cross-complaint in any action or other
proceeding brought by any party against any other party or parties with respect
to any matter arising out of, or in any way connected with or related to, this
Agreement or any portion thereof, whether based upon contractual, statutory,
tort or other theories of liability. All other matters and claims for relief
shall be subject to resolution as set forth above.
(e) Notwithstanding anything to the contrary herein, the sole right of
Christie/AIX as to any breach or alleged breach hereunder by Distributor shall
be the recovery of money damages, and in no event may Christie/AIX obtain, and
Christie/AIX agrees not to seek, injunctive or other equitable relief with
respect to any breach of Distributor's obligations hereunder. For avoidance of
doubt, in no event shall Christie/AIX have the right to enjoin the development,
production, distribution, or exploitation of Distributor's content.
24. ASSIGNMENT. Neither party may assign this Agreement without the written
consent of the other party, and any attempted assignment without such consent
will be void; provided that either party may assign all (but not less than all)
of its rights and obligations hereunder without prior written consent (i) to a
corporation or entity controlled by, controlling, or under common control with
such party, (ii) to any corporation with which such party is merged or
consolidated, or (iii) to any corporation or entity which succeeds to all or
substantially all of such party's assets. No assignment will relieve the
assignor from its obligations under this Agreement. Notwithstanding the
foregoing, Christie/AIX may assign this Agreement to a bankruptcy remote vehicle
("BRV") established in connection with the financing of the acquisition of
Digital Systems for deployment as contemplated by this Agreement, and, in
connection with any such financing, Christie/AIX or any such BRV may grant
security interests in or collaterally assign this Agreement in favor of any bank
or insurance company which is directly or indirectly publicly held and whose
primary business is finance or insurance or any collateral agent for any such
banks or insurance companies; provided, however, that any such assignment will
not relieve the assignor from its obligations under this Agreement.
25. NOTICE. All notices and communications required or permitted under this
Agreement shall be in writing, shall be sent by facsimile, overnight courier
(e.g., Federal Express) or airmail, postage prepaid, in accordance with the
following, and shall be effective upon receipt:
CONFIDENTIAL TREATMENT REQUESTED BY ACCESS INTEGRATED TECHNOLOGIES, INC.
OF CERTAIN PORTIONS OF THIS AGREEMENT IN ACCORDANCE WITH
RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934
If to Christie/AIX: Christie/AIX, Inc.
c/o Access Integrated Technologies, Inc.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention:
Fax: 000-000-0000
If to Distributor Universal City Studios LLLP
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Attention:
Fax:
26. WAIVERS. Any waiver by either party of a breach of any provision of
this Agreement will not operate as or be construed to be a waiver of any other
breach of that or any other provision of this Agreement. Any waiver must be in
writing. Failure by either party to insist upon strict adherence to any
provision of this Agreement on one or more occasions will not deprive such party
of the right to insist upon strict adherence to that or any other provision of
this Agreement on any future occasion.
27. CHOICE OF LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without regard to conflict
of laws principles.
28. CONSTRUCTION. Each party has consulted with its own legal counsel in
connection with the negotiation and execution of this Agreement, and this
Agreement shall not be construed more strictly against one party than against
the other party by reason of such party's role in preparing this Agreement or
for any other reason.
29 HEADINGS. The headings and titles contained in this Agreement are for
the sake of convenience only and have no bearing on the content or substance of
this Agreement.
30. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
31. FACSIMILE. This Agreement may be executed by facsimile, and a facsimile
of this Agreement shall constitute an original for all purposes. In the event
this Agreement is executed by facsimile, either party may require the other
party to provide an executed original.
32. SEVERABILITY. If any provision of this Agreement is adjudicated void,
illegal, invalid or unenforceable, the remaining terms and conditions will not
be affected, and each of the remaining terms and conditions of this Agreement
will be valid and enforceable to the fullest extent permitted by law, unless a
party demonstrates by a preponderance of the evidence that the invalid provision
was an essential economic term of the Agreement.
33. ENTIRE AGREEMENT. This Agreement, including the attachments hereto,
contains the entire understanding of the parties relating to the subject matter
contained in this Agreement and supersedes all prior and contemporaneous
discussions and writings between them. This Agreement may only be amended by a
written instrument, signed by the duly authorized representatives of
Christie/AIX and Distributor, that expressly amends this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ACCEPTED AND AGREED:
For Christie/AIX, Inc.: X----------------------------------------
----------------------------------------
By:
Title:
For Universal City Studios LLLP: X----------------------------------------
----------------------------------------
By:
Title:
ATTACHMENT A
LIST OF EQUIPMENT AND DESCRIPTION OF CAPABILITIES
I. CENTRAL STORAGE SERVER (AKA LIBRARY MANAGEMENT SERVER (LMS)) QUANTITY - 1
PER COMPLEX
a. Capabilities
>> Central redundant storage for encrypted and compressed JPEG2000
content.
>> Provides an interface for content delivery services.
>> Allows full automation of content receipts.
>> Utilizes Theater Management Software (TCC) to schedule content
for any screen in the theatre complex.
>> SNMP enabled.
b. Equipment List
>> Rack enclosure
>> Rack power UPS and distribution unit
>> Rack mount Keyboard, Monitor and Mouse
>> KVM Switch
>> Dual "Server Class" computers
>> RAID Array Chassis with storage
>> Gigabit Ethernet Switch for Media distribution
>> Ethernet Switch for Management
II. PROJECTION SYSTEM
QUANTITY - 1 PER SCREEN
a. Capabilities
>> Playback of 2-D and 3-D JPEG 2000 encoded content.
>> Local management of playlist.
>> Automated control of booth equipment via hardware and software
interface.
b. Equipment List
>> 2k DLP Cinema projector
>> Pedestal and power supply
>> Xenon lamp
>> Primary zoom lens
>> Anamorphic lens and mount
>> Theatre automation interface
>> Equipment rack
>> JPEG 2000 screen server with local interface
>> UPS
>> Ethernet Network switch for auditorium management
>> Audio 6-channel interface
ATTACHMENT B
MINIMUM DIGITAL TITLE AVAILABILITY
During each period specified below, the number of Distributor Digital
Titles will, as a percentage of all Distributor wide release titles (defined as
*** or more screens on initial national release) during that period, equal or
exceed the applicable percentage shown below. (If the percentage results in a
fractional number, Distributor may round down to the next whole number.)
PERIOD MINIMUM PERCENTAGE
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March 1, 2006 - October 31, 2006 ***%
2nd Contract Year ***%
3rd Contract Year ***%
4th Contract Year ***%
5th Contract Year ***%
6th Contract Year ***%
7th Contract Year ***%
8th Contract Year ***%
9th Contract Year ***%
10th Contract Year ***%
11th Contract Year ***%
12th Contract Year ***%
13th Contract Year ***%
14th Contract Year ***%
15th Contract Year ***%
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***CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
ATTACHMENT C
VIRTUAL PRINT FEES ("VPF")
1. STANDARD RATE. The first *** VPFs paid by Distributor to Christie/AIX in
any Contract Year will be at the applicable rate set forth in the table
below (the "STANDARD RATE").
CONTRACT YEAR VIRTUAL PRINT FEE
-------------------------------------- -----------------------------------
1st $***
2nd $***
3rd $***
4th $***
5th $***
6th $***
7th $***
1. 8th $***
9th $***
10th $***
11th $***
12th $***
13th $***
14th $***
15th $***
2. DISCOUNT BASED ON NUMBER OF PARTICIPATING DISTRIBUTORS.
(a) For purposes of this Section 2, "Major Distributors" means Distributor,
Disney, Fox, Paramount, Sony Pictures Entertainment or Warner Brothers, or in
lieu of any of the foregoing, any affiliate of any of the foregoing which is a
primary releasing entity for its motion pictures. To the extent that any Major
Distributor is merged with or taken over by any other Major Distributor, the
successor entity shall count as two studios for purposes of this Section 2.
(b) If by the end of the first Contract Year:
(i) a total of *** Major Distributors have executed agreements with
Christie/AIX which relate to the same general subject matter as this
Agreement, then in the second through twelfth Contract Years VPFs will be
reduced by ***% from the amounts set forth in the table in Section 1 or
Section 4, as applicable; or
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***CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
(ii) a total of *** or more Major Distributors have executed
agreements with Christie/AIX which relate to the same general subject
matter as this Agreement, then in the second through twelfth Contract Years
VPFs will be reduced by ***% from the amounts set forth in the table in
Section 1 or Section 4, as applicable.
3. DISCOUNT BASED ON NUMBER OF VPFS.
(a) In the event that in any Contract Year no discount is in effect under
Section 2.(b)(i) or (ii), then:
(i) the first *** VPFs paid by Distributor to Christie/AIX in such Contract
Year will be at the applicable rate set forth in the table in Section 1 or
Section 4, as applicable;
(ii) thereafter, the next *** VPFs paid by Distributor to Christie/AIX in
such Contract Year (i.e. *** - *** VPFs) will be at a discount of ***% from the
applicable rate set forth in the table in Section 1 or Section 4, as applicable;
(iii) thereafter, the next *** VPFs paid by Distributor to Christie/AIX in
such Contract Year (i.e. *** - *** VPFs) will be at a discount of ***% from the
applicable rate set forth in the table in Section 1 or Section 4, as applicable;
and
(iv). thereafter, any VPFs paid by Distributor to Christie/AIX in such
Contract Year (VPFs in excess of *** VPFs) will be at a discount of ***% from
the applicable rate set forth in the table in Section 1 or Section 4, as
applicable.
(b) In the event that the discount provided for in Section 2(b)(i) goes
into effect, then any VPFs in excess of *** VPFs paid by Distributor to Christie
in any Contract Year for which such discount is effective, will be at a total
discount (including the ***% discount in effect under Section 2(b)(i)) of ***%
from the applicable rate set forth in the table in Section 1 or Section 4, as
applicable.
(c) In the event that the discount provided for in Section 2(b)(ii) goes
into effect, then no additional discount under Section 3 will thereafter be
available in any Contract Year for which such discount is effective.
4. DEPLOYMENT OF LESS THAN *** PROJECTION SYSTEMS. In the event that less
than *** Projection Systems have been deployed as of the end of the second
Contract Year, then the Standard Rate shall be revised as follows:
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***CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
CONTRACT YEAR VIRTUAL PRINT FEE
-------------------------------------- -----------------------------------
1st $***
2nd $***
3rd $***
4th $***
5th $***
6th $***
7th $***
8th $***
9th $***
10th $***
11th $***
12th $***
13th $***
14th $***
15th $***
5. TEN YEAR LIMIT. Although the VPFs set forth in the tables above are
specified according to Contract Year, Christie/AIX will charge a VPF for any
Digital System for only the ten (10) year period following the Installation Date
of that Digital System. For example:
(a) if a Digital System is installed during the 1st Contract Year and the
table set forth in Section 1 applies, VPFs on that Digital System will be
(before any applicable discount):
(i) $*** for the remainder of the 1st Contract Year,
(ii) $*** for the 2nd and 3rd Contract Years,
(iii)$*** for the 4th and 5th Contract Years,
(iv) $*** for the 6th Contract Year through the expiration of the ten
(10) year period occurring in the 11th Contract Year, and
(v) $*** for the remainder of the 11th Contract Year and for the 12th
, 13th, 14th and 15th Contract Years; and
(b) if a Digital System is installed during the 2nd Contract Year and the
table set forth in Section 1 applies, VPFs on that Digital System will be
(before any applicable discount):
(i) $*** for the remainder of the 2nd Contract Year,
(ii) $*** for the 3rd Contract Year,
(iii)$*** for the 4th and 5th Contract Years,
(iv) $*** for the 6th Contract Year through the expiration of the ten
(10) year period occurring in the 12th Contract Year, and
(v) $*** for the remainder of the 12th Contract Year and for the
13th, 14th, and 15th Contract Year.
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***CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
