“Monster” / Amendment to License Agreement
This amendment (the “Amendment”), dated as of January 14, 2004, is
hereby made with reference to that certain License Agreement (the
“Agreement”) dated as of October 1, 2003, between DEJ Productions
Inc., (“Distributor”) and Media 8 Entertainment and MDP Distribution,
Inc. (collectively, “Company”). Capitalized terms shall have the same
meaning as in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby amend the Agreement as follows:
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1. |
Paragraph 9 is amended as follows:
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a. |
Distributor acknowledges that Company has caused the Theatrical Release of the
Picture in conformity with Paragraph 9(a) and (c).
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b. |
Upon execution of mutually agreeable escrow designation instructions to the
escrow holder (the “Escrow Account”), with respect to the distribution
of Theatrical Gross Receipts to Company and Distributor as set forth in
Paragraph 9(g), as amended, Distributor shall immediately pay into the Escrow
Account or directly to NMF the $1 million set forth in said paragraph to the
Escrow Account, which sum shall be disbursed towards the continuation of the
Theatrical Release as NMF, Company and Distributor agree, Distributor
acknowledges that time is of the essence with respect to its contribution
towards the continued Theatrical Release. The definition of “Distributor
P&A” is redefined to mean all amounts paid to NMF or the Escrow Account
or paid at the direction of NMF, including the $1 million contributed pursuant
to this Paragraph and the amounts contributed pursuant to Paragraph c. below,
and expended by NMF or via the Escrow Account towards actual out-of-pocket,
third party expenses in respect of the Theatrical Release in accordance with
this Agreement (net of any return of unspent funds by NMF or the Escrow
Account). For avoidance of doubt, amounts paid by Distributor by way of in store
advertising during the Theatrical Release or other direct or indirect
expenditures in furtherance of the Theatrical Release not paid for through the
Escrow Account or paid to or at the direction of NMF, shall not be included in
Distributor P&A, but may still be recoupable by Distributor pursuant to
Paragraph 6(a)(ii).
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c. |
Distributor agrees to pay over to NMF, or into a mutually agreed escrow or other
mutually agreed arrangement, at least an additional $2 million (for a total of
no less than $3 million) to be spent by NMF towards the continued Theatrical
Release. In addition to such $2 million contribution, Distributor may contribute
such further funds as it may, in its sole discretion, choose to contribute to
NMF for furtherance of the Theatrical Release. All such funds contributed by
Distributor in accordance with this Paragraph shall be contributed and expended
as NMF and Distributor mutually agree in good faith and with the understanding
that time is of the essence with respect to such contributions in order to
maintain the integrity of the Theatrical Release. From the date hereof, Company
shall have meaningful consultation rights with respect to the expenditure of
such funds and the ongoing Theatrical Release, but all decisions with respect to
the ongoing Theatrical Release or the expenditure of funds contributed by
Distributor shall, as between Distributor and Company, be in Distributor’s
reasonable discretion. Notwithstanding the foregoing, Company shall have no
responsibility for any commitments made by Distributor to NMF nor for any
decisions made by Distributor or the actions of NMF. In this regard, Distributor
shall indemnify, in accordance with Paragraph 16(b), and hold Company harmless
from any actions, inactions or commitments made by Distributor with NMF or any
actions, inactions or commitments made in connection with the Theatrical Release
by Distributor.
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2. |
Paragraph 9(g)(I)(B), (C), (D) and (E) are deleted in their entirety and in lieu
thereof the following shall control:
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“(B) Company Recoupment: To Company or its designee, one hundred percent
(100%) of remaining Gross Receipts until Company or its designee has received
the sum of $3 million; then
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(C) Distributor Recoupment: To Distributor one hundred percent (100%) of
remaining Gross Receipts until Distributor has recouped the Distributor PSA;
then
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3. |
Paragraph 6 (c)(I) is deleted in its entirety and in lieu thereof the following
shall control:
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“(i) Notwithstanding any other provision in this Agreement, if Company has
not fully recouped the actual out-of-pocket, third party expenses paid by it
directly or through the escrow towards print and advertising costs for the
theatrical release of the Picture (the “Company P&A Expense”)
after crediting any payments theretofore made to Company pursuant to paragraphs
6(a)(v) against these amounts and/or Distributor has not fully recouped recouped
the Distributor P&A, after crediting any sums retained pursuant to Paragraph
6(a)(ii) in respect of recoupment of the Distributor P&A, and sums retained
by Distributor pursuant to Paragraph 6(a)(v), then Company and Distributor shall
be entitled to recoup in proportion to their respective unrecouped balances from
any amounts actually received by Distributor from the television licensing of
the Picture in the United States of America (“US TV License”) an
amount which is the greater of either: (A) the pay television license fee
actually received by Distributor for the first pay television license for the
Picture, or (B) the basic cable television license fee actually received by
Distributor the first basic cable television license for the Picture. Any
payments made to Company pursuant to this subparagraph 6(c)(i) shall hereinafter
be referred to as “Company’s TV Recoupment Payment”. Any sums
retained by Distributor pursuant to this subparagraph 6(c)(i) shall hereinafter
be referred to as “Distributor’s TV Recoupment Payment”.
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4. |
A new paragraph 6 (e) is added to the Agreement and shall read as follows:
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“In the event Distributor has not fully recouped the Distributor P&A
after taking into consideration sums theretofore retained by Distributor as the
Distributor’s TV Recoupment Payment pursuant to paragraph 6 (c)(i) and sums
retained pursuant to Paragraph 6(a)(ii) in respect of recoupment of the
Distributor P&A and sums retained pursuant to Paragraph 6(a)(v), which shall
be an offset against such recoupment. but shall not be double counted in such
recoupment, then fifty percent (50%) of the unrecouped amount
(“Distributor’s Shortfall”) shall be recoupable from fifty
percent (50%) of Company’s International Overages. As a point of
clarification, Distributor shall only have a right of participation In
Company’s International Overages to recoup the Distributor Shortfall, and
not an ongoing participation beyond such recoupment.
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For purposes of this Agreement Company’s International Overages shall mean
the amounts received by Company from licensees of distribution rights in the
Picture, other than Distributor, Remstar or pursuant to the Airline or Ship
Agreements, in excess of the Minimum Guarantees or “Deemed Minimum
Guarantees” paid by said licensees. Minimum Guarantees are the
nonrefundable sums, whether in the form of advances, flat fees and/or outright
license fees, paid to Company by such licensees. With respect to those licensee
that are so-called “straight distribution” agreements and have no
express minimum guarantee, the amounts set forth as the minimum take prices on
Schedule “1” hereto shall be the “Deemed Minimum Guarantee”
and only amounts in excess of such amounts shall be included in Company’s
International Overages.
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By way of example, if Company has licensed French video rights and the licensee
pays a minimum guarantee (as such term is commonly understood in the industry)
of $500,000 and later reports and pays to Company an additional $100,000 beyond
the stated minimum guarantee, the $100,000 is the “overage” and is
included in Company’s International Overages. Similarly, by way of
illustration, if Company licensed French video rights but on a straight
distribution basis without a minimum guarantee, then if Schedule “1”
hereto lists $75,000 as the minimum take price for such rights, then such sum
would be the Deemed Minimum Guarantee and only amounts paid by the distributor
in excess of such sum would be included in Company’s International
Overages”.
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Distributor shall notify Company in writing of the Distributor Shortfall (the
“Deficit Notice”) contemporaneously with payment to Company of the
Company’s TV Recoupment Payment, and shall from time to time notify Company
of any additional recoupments of the Distributor P&A pursuant to adjustments
in the Distributor Shortfall by reason of continuing recoupments pursuant to
Paragraph 6(a)(ii) and additional retentions pursuant to Paragraph 6(a)(v).
Company shall have inspection and audit rights with respect to the Distributor
Shortfall in the same manner as provided for Company’s audit rights in
accordance with Paragraph 6(b)(ii).
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Commencing upon receipt by Company of the Deficit Notice, Company shall account
and pay over to Distributor amounts payable in respect of the Distributor
Shortfall in the same manner as provided in Paragraphs 9 (h) (1), (2) and (3)
with respect to Theatrical, Airline or Ship Gross Receipts. Contemporaneously
with such payments, Company shall provide Distributor with copies of statements
received from licensee’s with respect to such licensee’s calculation
of overages. Distributor shall have audit and inspection rights in accordance
with Paragraph 9(h)(6) in the same manner as provided for Theatrical, Airline or
Ship Gross Receipts.
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In the event the amount divided between Company and Distributor pursuant to
Paragraph 6(c)(i) is adjusted as provided in paragraph 6(c)(ii) on
Distributor’s receipt of the television license fee from the second US TV
License, or by reason of adjustments in recoupments pursuant to Paragraphs
6(a)(ii) or (v), and such adjustments results in a reduction in the Distributor
Shortfall whereby Company shall have overpaid Distributor in respect of its
recoupment of the Distributor Shortfall, Distributor shall, within ten (10)
business days of demand, pay to Company such overpayment.
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5. |
Subject to Company obtaining the required consent from Film & Entertainment
VIP Medienfonds 2 GmbH and Xx.XX (“VIP”) to extend the Term, or
Company ever acquiring the rights to grant the foregoing, Paragraph 3(a) is
deleted in its entirety and in lieu thereof the following shall control:
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“(a) Term of the Agreement: The term of this Agreement (the
“Term”) commences on the Effective Date and continues for thirty (30)
years from the earlier of: (i) date of the initial release of the Picture by
Distributor anywhere in the Territory or (ii) the later of: (y) nine (9) months
after complete delivery of the Picture to Distributor or (z) nine (9) months
after the theatrical release of the Picture in the United States.”
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If by the time Distributor is to first make payments to Company pursuant to
Paragraph 6(a)(v) Company has not obtained the consent of VIP to extend the
Term, and only in such event, then Paragraph 3(a) shall not be amended as
aforesaid, and in lieu of the adjustment in the Term provided above, Paragraph
6(a)(v) shall be deleted in its entirety and in lieu thereof shall read as
follows:
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“If Distributor’s P&A was equal to or in excess of $5 million,
then the balance of Distributor Gross Receipts, if any, shall be split and paid
fifty percent (50%) to Company (“Company’s Share of Gross
Receipts”) and fifty percent (50%) to Distributor, or
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In the event Distributor P&A was less than $5 million, the balance of
Distributor Gross Receipts, if any, shall be split and paid fifty-five percent
(55%) to Company (“Company’s Share of Gross Receipts”) and
fourty-five percent (45%) to Distributor.”
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6. |
To the extent there is any inconsistency between this Amendment and any terms of
the Agreement, the terms of this Amendment shall control.
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7. |
Except as inconsistent with the terms set forth herein, all other terms and
conditions of the Agreement shall remain in full force and effect and the
Agreement is hereby reaffirmed.
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DEJ Productions Inc.
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Media 8 Entertainment
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By:
Its:
Date:
Name:
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/s/ X. Xxxxx
SVP
1/29/04
X. Xxxxx
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By:
Its:
Date:
Name:
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/s/ Xxxxxxx Xxxxxxx
Secretary
January 22, 2004
Xxxxxxx Xxxxxxx
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By:
Its:
Date:
Name:
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/s/ Xxxxx Xxxxxx
VP of Finance
1/22/04
Xxxxx Xxxxxx
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Schedule “1”
The following is Schedule 1 to the Amendment to License
Agreement referred to in paragraph 4 thereof:
Territory
Singapore
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Deemed Minimum Guarantee
$30,000
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