Contract
Exhibit 10.2
THE XXXXXXXXX COMPANY
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated as of December 24, 2009
The Film Department LLC
0000 Xxxxxx Xxxx.
0 0xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
The Film Department LLC
0000 Xxxxxx Xxxx.
0 0xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
| Re: | Amended and Restated Exclusive Output Distribution Agreement |
Dear Gentlepersons:
The following sets forth the terms of the agreement (this “Agreement”) between The Film Department
LLC, a limited liability company organized under the laws of the state of Delaware (inclusive of any of its
affiliated, subsidiary or related entities, herein collectively, “Licensor”) and The Xxxxxxxxx Company
LLC (“TWC”) regarding the exclusive license of certain rights in and to certain feature motion pictures as
further set forth herein. For good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto hereby agree as follows:
This Agreement when fully executed shall supersede and replace the Term Sheet dated as of December 24, 2009 entered
into between TWC and Licensor.
1. Output Agreement/Pictures:
(a) Eligible Pictures: “Eligible Pictures” shall have the meaning set forth on Schedule 1
attached hereto and incorporated herein.
(b) Pictures: “Pictures” shall have the meaning set forth on Schedule 1 attached hereto and incorporated herein.
(c) Rights: “Rights” shall have that meaning set forth on Schedule 1 attached hereto and
incorporated herein. Subject to the terms of Paragraph 1(d) below whereby Licensor is not required
to formally assign the Rights by delivery of the “Short Form Assignment” (as defined below) until the date set
forth in Paragraph 1(d) below, Licensor hereby grants TWC on an exclusive basis all Rights
in and to each Picture in the Territory for the duration of the “License Term” (as defined herein).
(d) Conditions Precedent: On a Picture-by-Picture basis, all of TWC’s obligations hereunder with
respect to each Picture shall be subject to the following conditions (collectively, the “Conditions Precedent”): (i) TWC’s receipt and
approval of the chain of title to such Picture including without
limitation “Security Documents” (as defined herein) and a short form assignment in the form attached
hereto and incorporated herein as Exhibit A (“Short Form Assignment”), which shall be provided by
Licensor to TWC promptly upon TWC’s request provided that Licensor shall not be required to deliver a
Short Form Assignment for a Picture until the earlier of (x) the date on which Licensor first provides
TWC with a “Release Date Notice” (as defined herein) for such Picture and (y) six (6) months prior to
the scheduled Initial Theatrical Release date for such Picture; and (ii) TWC’s receipt from Licensor, no
later than the date that is one hundred twenty (120) days prior to the Initial Theatrical Release of a
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Picture, of 100% of the amount of “P&A Budget”
(as defined herein) for such Picture or TWC’s receipt from
Licensor of such other financial assurances to secure TWC’s
receipt of the amount of the P&A Budget (in a form
acceptable to TWC in its sole discretion) for the full amount of
such P&A Budget (“Funding Condition
Precedent”). Notwithstanding the foregoing or anything
else to the contrary in this Agreement, the parties acknowledge
and agree that on a
Picture-by-Picture
basis, the actual “licensor” to TWC of the Rights set
forth herein may be a single purpose company which contains no
assets other than the applicable Picture
(“SPC”), and in such event, Licensor shall
cause the SPC to execute the Short Form Assignment in lieu
of Licensor provided that the SPC agrees in writing to be bound
by all of the terms, conditions and obligations hereof and
provided further that Licensor shall remain liable hereunder
with respect to all Pictures.
(e) Right of Withdrawal: TWC shall have the right to
notify Licensor at any time that any Eligible Picture or Picture
is withdrawn from TWC’s Pay Television Service for legal or
liability reasons as reasonably determined by TWC in TWC’s
good faith judgment. If TWC notifies Licensor of such
withdrawal, the applicable provisions of TWC’s Pay TV
license agreement then in-effect shall apply to such Eligible
Picture
and/or
Picture, and the rights and obligations of the parties under
this Agreement shall be adjusted accordingly. For purposes of
clarification, upon the expiration of the rights of TWC’s
Pay Television Service in a Picture following a withdrawal, the
License Term in the Pay TV Rights shall expire, and TWC’s
Pay TV Rights in such Picture shall also terminate (and
TWC’s lien solely in the Pay TV Rights for such Picture
shall terminate; provided that TWC shall remain entitled to
receive its fee on any Pay TV GR for such Picture).
(f) Development Schedules: Licensor shall provide
TWC throughout the Term, on a no-less-than monthly basis, with
detailed schedules of properties in development or which have
been acquired by Licensor and which are intended to be or which
may become an Eligible Picture hereunder. Such schedules shall
include all information relevant to TWC as distributor regarding
each such property including, without limitation, tentative
title and underlying rights (including without limitation drafts
of treatments
and/or
screenplays), key creative attachments, and development or
production status (including without limitation greenlight date,
actual or scheduled commencement of principal photography date,
and scheduled Initial Theatrical Release date).
2. Term/License Term: The term of this Agreement
shall commence as of January 1, 2010 and continue for four
(4) years (i.e., through December 31, 2013) (the
“Term”). The “License Term” for each
Picture shall have that meaning set forth in Schedule 1
attached hereto and incorporated herein.
3. Territory: the United States, the Bahamas,
Bermuda and Caribbean Basin, and their respective territories
and possessions, including, without limitation, Guam, Puerto
Rico, the U.S. Virgin Islands, the Xxxxxxxx Islands,
American Samoa, Northern Marianas Islands and Wake Islands
(collectively, the “Territory”). TWC’s
Theatrical Rights and Free Television Rights in the Bahamas and
Bermuda shall be on a non-exclusive basis. TWC’s rights in
the Caribbean Basin shall be limited solely to the Pay TV Rights
and shall be on a non-exclusive basis.
4. Creative Rights: With respect to each Picture,
the parties shall have the approval and consultation rights set
forth in Schedule 2 attached hereto and incorporated herein
by this reference.
5. Theatrical Exploitation:
(a) Marketing Materials and Costs: Subject to the
terms of Paragraph 4 above, Licensor shall be responsible
for creating, at its sole cost and expense, all marketing
materials for each Picture
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(including without limitation, all trailers, teasers, posters,
key art, etc.) and for delivering the same to TWC as part of
Delivery. Subject to the terms of Paragraph 4 above,
Licensor shall be responsible for creating each Picture a media
plan (“Media Plan”), P&A budget which
shall include 100% of the P&A Costs for each Picture
(“P&A Budget”) and P&A cashflow
schedule (“P&A Cashflow”). Licensor shall
be responsible for providing in advance and paying for 100% of
all “P&A Costs” for each picture as set forth in
Paragraph 1(d)(ii), above (i.e, “P&A
Costs” means all marketing, advertising, publicity,
promotion and releasing costs, charges and expenses incurred in
connection with the theatrical release of the Picture,
including, without limitation, the cost to test the Picture, buy
media, rate the Picture, create prints, television spots,
trailers, posters and all other artwork, and P&A Costs
expressly exclude any TWC overhead). Provided that the
Conditions Precedent have been satisfied, TWC shall exploit the
Theatrical Rights in each Picture pursuant to the Media Plan,
P&A Budget and P&A Cashflow for such Picture,
including, without limitation, (i) booking theaters (including
so-called “holdovers”) and buying media for each
Picture, (ii) collecting from, and settling with,
exhibitors using TWC’s reasonable good faith commercial
efforts to obtain settlement rates favorable to Licensor; (iii)
using reasonable good faith commercial efforts to place posters
and trailer for the Pictures in theaters that will be exhibiting
the Pictures; (iv) discussing box office reports and TWC’s
analysis of same with Licensor using TWC’s good faith
business judgement; (v) having weekly conference calls and/or
meetings with Licensor to discuss distribution matters related
to the Eligible Pictures and Pictures; and (vi) using TWC’s
reasonable good faith commercial efforts to provide Licensor
with prompt access to the relevant information contained in
TWC’s real-time computerized box-office reporting and NRG
tracking. For the avoidance of doubt, TWC shall not be required
under any circumstances to expend funds out of pocket or on
TWC’s own account for the distribution of any Picture.
(b) Media Plan: With respect to the implementation
of the Media Plan for each Picture, Licensor shall set up an
account (“Licensor Agency Account”) for each
Picture with Palisades Media or such other electronic (i.e.
television, radio and internet) media buying agent as designated
by TWC (“Media Agency”). Provided that no later
than the satisfaction of the Funding Condition Precedent for
such Picture Licensor has (i) created the Licensor Agency
Account and obtained the Media Agency’s written approval
with respect to the terms of this Paragraph 5(b) (including
Media Agency acknowledgement of the last sentence of this
subparagraph (b)) and (ii) provided the Licensor Agency Account
details to TWC, notwithstanding anything to the contrary set
forth herein, in lieu of Licensor paying TWC or providing other
financial assurances acceptable to TWC for that portion of the
P&A Costs that are allocated in the P&A Budget to be
spent on a Media Agency (“Media Spend”), TWC
shall book all electronic media (in accordance with the Media
Plan, P&A Budget and P&A Cashflow) for such Picture
directly with the Media Agency, but shall charge the entire
Media Spend to the Licensor Agency Account which shall then be
payable directly and solely by Licensor. Licensor acknowledges
and agrees that if the Licensor Agency Account is timely created
as set forth in this Paragraph 5(b), than TWC shall have no
obligation to pay and no liability in connection with the Media
Spend, Media Agency and/or the Licensor Agency Account, and,
provided that TWC has billed the Media Spend to the Licensor
Agency Account in accordance with the P&A Cashflow and
P&A Budget, Licensor does not hereby indemnify and
hold TWC harmless with respect to any claims regarding each
Media Spend, Media Agency, and/or Licensor Agency Account.
(c) Initial Theatrical Release Date: Notwithstanding
anything to the contrary set forth herein, Licensor shall
provide TWC with at least six (6) months prior written notice
(email is acceptable for these purposes) with such written
notice expressly stating that Licensor is setting an Initial
Theatrical Release date for a Picture for all purposes under
this Agreement (“Release Date Notice”), before
setting such Initial Theatrical Release date and at least three
(3) months prior written notice before changing a previously
established Initial Theatrical Release date for a Picture. If
Licensor provides less than three
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(3) months notice (from both the old date and the new date)
before changing a previous estimated Initial Theatrical Release
date for a Picture then TWC may, after good faith consideration
of such date, in its discretion refuse changes to the date (in
which case Licensor shall remain obligated to fund the P&A
Budget therefor), or if an initial date is being set with less
than three (3) months notice, TWC may reject such date (in
which case Licensor shall designate another date with at least
three (3) months notice and otherwise in accordance with
the terms hereof). Licensor agrees to coordinate its release
schedule in good faith with TWC so as not to set a release date
for a Picture hereunder is on the same weekend as other motion
pictures to be released by TWC and/or its affiliates (and solely
with respect to Pictures that are in a competing genre with
other TWC motion pictures, the initial release date for such
Picture shall not be less than then (10) days before or
after the release dates of other competing genre TWC motion
pictures). Notwithstanding the foregoing, TWC will not request
that Licensor change a release date for a Picture unless TWC
believes in good faith that such Picture may be directly
competitive with another TWC-released motion picture as to core
audience; provided that if TWC does believe in good faith that
the pictures are directly competitive as to core audience then
Licensor shall change the Initial Theatrical Release for such
Picture. For purposes of clarity, once Licensor has designated a
release date for a Picture pursuant to a Release Date Notice in
accordance with this Agreement, TWC shall not request a change
(and Licensor shall not be required to change) in
Licensor’s initially scheduled release date to accommodate
a later-scheduled TWC picture that may be competitive with such
Picture and TWC shall not schedule a release date for other
motion pictures to be released by TWC and/or its affiliates that
is one the same weekend as a Picture hereunder (and solely with
respect to TWC pictures that are in a competing genre with a
Picture hereunder, TWC shall not set a release date for such
picture that is less than ten (10) days before or after the
release date of such Picture). TWC shall use commercially
reasonable efforts to provide Licensor on a monthly basis with
the current scheduled theatrical release dates of all pictures
being distributed by the majors and mini-majors.
6. Pay TV Exploitation: The Pay TV Rights in
the Pictures shall be exploited by TWC pursuant to the terms and
conditions set forth on Schedule 3 attached hereto and
incorporated herein by this reference (and Licensor hereby
agrees to comply, and to require its licensees and assignees to
comply, with all such terms).
7. Free TV Exploitation: Subject to the terms
of Paragraph 4 above, TWC shall use its reasonable good
faith commercial efforts to license the Free TV Rights in each
Picture for the highest possible license fee.
8. Distribution Terms: “Gross
Receipts” shall be defined and allocated in accordance
with the terms and conditions set forth on Schedule 4
attached hereto and incorporated herein.
9. Delivery:
(a) “Delivery” means delivery to and
acceptance by TWC of each Picture in accordance with the terms
of this Agreement and in accordance with the delivery schedule
attached hereto and incorporated herein as Exhibit B (the
“Delivery Schedule”). All costs of Delivery to
TWC will be borne by Licensor. Licensor agrees to cause Delivery
of each Picture to occur on or before the date that is sixty
(60) days prior to the Initial Theatrical Release of such
Picture (“Outside Delivery Date”) provided that
publicity and promotional materials shall be delivered no later
than ninety (90) days prior to the Initial Theatrical
Release. Timely Delivery by Licensor to TWC is of the essence of
this Agreement and Licensor acknowledges and agrees that TWC
shall have no obligation to exploit a Picture if timely Delivery
of such Picture by the Outside Delivery Date has not occurred.
Licensor agrees that, in addition
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to the Delivery Schedule, in the event any foreign language or
other versions of the Pictures are created, TWC shall have free
access to any such materials
and/or
versions of such Pictures.
(b) The procedures for delivery, inspection and cure shall
be as follows:
(i) Inspection/Cure. TWC shall have
thirty (30) days following TWC’s receipt of written
notice from Licensor that complete Delivery has been effected
(the “Inspection Period”), to inspect and
review the delivery materials for compliance with the technical
delivery requirements hereunder. In the event TWC determines
that Delivery of an item has not been properly effected, then
prior to the expiration of the Inspection Period, TWC shall so
notify Licensor in writing (the “Rejection
Notice”), which Rejection Notice shall set forth with
specificity any Delivery items(s) furnished to TWC which are
defective
and/or any
Delivery item(s) not timely tendered to TWC for inspection.
Licensor shall have fourteen (14) days from its receipt of
the Rejection Notice to cure any defect in a given Delivery
item. If and when Licensor believes that Licensor has cured any
defect respecting any Delivery item, then Licensor shall so
notify TWC in writing (the “Cure Notice”) that
Delivery of the subject item has been effected. TWC shall have
fourteen (14) days from its receipt of the Cure Notice and
the
cured/additional
Delivery items(s) (the
“Re-Inspection
Period”) to
re-inspect
the subject item and accept delivery, or, alternatively, reject
delivery by sending another Rejection Notice to Licensor.
Subject only to the dispute resolution provision below, TWC
shall have no obligation to Licensor hereunder if Delivery is
not timely effected, and Licensor shall promptly reimburse TWC
for all payments theretofore made by TWC to Licensor hereunder
(provided that the foregoing shall not limit in any way
TWC’s right to assert any claims or remedies against
Licensor and to seek any other damages to which TWC may be
entitled as a result of such failure). For the sake of clarity,
a failure by TWC to deliver any required notice set forth above
shall be deemed acceptance of the item(s) in question by TWC.
(ii) Dispute Resolution. In the event of
any dispute between TWC and Licensor regarding Licensor’s
delivery
and/or
TWC’s acceptance of a Delivery item, the parties shall
proceed according to the IFTA dispute resolution procedures.
10. Credit: Subject to the terms of
Schedule 5 (attached hereto and incorporated herein by
reference) TWC shall receive a first position logo and first
position presentation credit in connection with each Picture on
screen (each on separate unshared cards) and in the billing
block of all paid ads in the Territory and shall receive a
static distributor logo as the last card in the end credit roll.
TWC shall also have the right to accord credits to any of its
subdistributors at the beginning or end of the Picture and in
connection with advertising for the Picture; provided that TWC
shall not accord credit to any subdistributor of the Theatrical
Rights without Licensor’s prior written approval. TWC shall
adhere to all credit obligations of which it is notified in
writing and provided further that no casual or inadvertent
failure by TWC or its subdistributors shall constitute a breach
hereof. Promptly following TWC’s receipt of written notice
detailing, with reasonable specificity, a failure by TWC to
comply with such credit obligations, TWC shall use commercially
reasonable efforts to prospectively cure such failure on
materials created after the date of such notice, provided that
in no event shall TWC be obligated to recall any materials
(including prints, one-sheets, etc.) created prior to such
notice. Each Picture as delivered to TWC shall contain all
required screen credits, and, provided that TWC does not alter
such credits, Licensor does hereby indemnify and hold TWC
harmless with respect to any claims regarding such screen
credits.
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will not be any, liens or encumbrance against each Picture which
may adversely affect TWC’s rights hereunder, other than
liens identified in Paragraph 19 hereof, which will be
subject to nondisturbance, intercreditor and/or subordination
agreements, as applicable, with such lien holders to be
negotiated in good faith; (c) each Picture and any
advertising or publicity materials supplied by Licensor
hereunder shall not contain any material which violates or
infringes or may violate or infringe, nor will exploitation of
the Rights in accordance with this Agreement violate or
infringe, the copyright of any person, firm or corporation or
any other common law or other right including without
limitation, any right of privacy or trademark, of any person,
firm or corporation; (d) every musical composition
contained in each Picture, every performance of a musical
composition contained in each Picture, and every photograph,
clip, likeness and all other materials contained in each Picture
have been licensed for use (or is otherwise fully cleared for
use) in and in connection with such Picture (and all advertising
therefor) for the entire License Term for the Territory, that
all required license fees are fully paid, and that TWC and its
licensees shall not be responsible for any additional fees
(whether in the nature of residuals or otherwise) in connection
therewith; (e) all costs of production of each Picture,
including, without limitation, all compensation, laboratory
costs, license fees and royalties will be paid in full prior to
Delivery except any deferred costs, participations and/or guild
residuals, all of which shall be payable by Licensor;
(f) there is no action, suit or proceeding relating to the
Pictures pending or threatened, before any court, administrative
or governmental body which might materially affect TWC’s
rights hereunder; (g) there are no defects in the
chain-of-title
to the Pictures which would affect any of TWC’s rights
hereunder; (h) Licensor has obtained the rights to use the
name and likeness of all cast, producers and the director in the
marketing and advertising of the Pictures subject to reasonable
name and likeness consultation and/or approval rights contained
in the cast, producer, and director agreements; (i) the
Pictures have not heretofore been exploited anywhere in the
universe in any medium and (j) E&O insurance with
standard limits of at least $3 million/$5 million and
deductibles of $25,000 to $50,000, respectively, has been
obtained or will be obtained prior to delivery by Licensor in
connection with each Picture and TWC (and any distributors that
TWC requests) will be added as an additional insured party
listed thereon. TWC and Licensor each represent and warrant that
it is duly formed and in good standing in its state of
incorporation and has full authority to enter into and perform
the terms of this Agreement.
12. Editing: With
respect to each Picture, TWC (and its subdistributors,
affiliates and licensees) shall not cut or delete or edit any
portion of any such Picture without the express written consent
of Licensor. Notwithstanding the foregoing, TWC (and its
subdistributors, affiliates and licensees) shall have the right
to
(i) time-compress
a Picture, (ii) modify the size of the end credits of a
Picture, (iii) make
voice-over
announcements over the end credits of a Picture,
(iv) exhibit the name
and/or logo
of a television station or service, its subdistributors,
affiliates and licensees during the exhibition of a Picture;
(v) dub
and/or
subtitle a Picture, (vi) cut for rating (provided that TWC
shall not cut the Picture for rating in the United States other
than in connection with television releases), censorship,
television commercial interruptions, to comply with broadcasting
statutory practices, standards or regulations,
and/or to
avoid any liability that TWC reasonably believes might be
imposed without such edits, cuts or alterations. Notwithstanding
anything herein, TWC
and/or
TWC’s Pay Television Service shall have the right to
down-convert,
scale,
up-convert,
pan and scan, center cut or alter the resolution of each Picture.
13. Indemnification: Licensor
will, at its own expense, defend, indemnify and hold harmless
TWC, its parent company and any and all related or affiliated
entities, its officers, employees, agents, licensees and
assignees, from any and all loss, damage, liability or expense
(including reasonable outside attorney’s fees and expenses
on a full indemnity basis) resulting from any material breach of
Licensor’s representations, warranties
and/or
agreements herein,
and/or
resulting from or arising from the development, production,
distribution, marketing, or other exploitation of the Pictures.
With regard to any matters for which Licensor is indemnitor,
Licensor may elect, in its sole discretion, to control the
applicable action or proceeding, in which event TWC may join in
any such action or proceeding and be
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represented by its own counsel at its sole cost; provided TWC
shall have the right (not to be unreasonably withheld) to
approve the counsel engaged by Licensor, which counsel shall be
experienced in motion picture law and disputes of the same
nature and (b) Licensor may not settle any claim without
TWC’s consent unless such settlement includes an explicit
confidentiality provision, a full release of TWC, does not
impose any payment obligations on TWC and does not require TWC
to admit any wrongdoing. TWC shall, at its own expense, defend,
indemnify and hold harmless Licensor, its parent company and any
and all related or affiliated entities, its officers, employees,
agents, licensees and assignees, from any and all loss, damage,
liability or expense (including reasonable outside
attorneys’ fees and expenses on a full indemnity basis)
resulting from any material breach of TWC’s
representations, warranties and/or agreements herein (other than
those claims for which Licensor must indemnify TWC as set forth
above). With regard to any matters for which TWC is indemnitor,
TWC may elect, in its sole discretion, to control the applicable
action or proceeding, in which event Licensor may join in any
such action or proceeding and be represented by its own counsel
at its sole cost. TWC may not settle any claim for which it is
indemnifying Licensor without Licensor’s consent unless
such settlement includes an explicit confidentiality provision,
a full release of Licensor, does not impose any payment
obligations on Licensor and does not require Licensor to admit
any wrongdoing.
14. Confidentiality/Press Release: The terms of
this Agreement shall remain confidential and neither party shall
disclose any such information without the other party’s
written consent. Notwithstanding the foregoing, confidential
information regarding this Agreement may be disclosed by either
party (i) to such party’s attorneys, investors, parent
companies, financiers, accountants and other advisors (provided
that such third parties, in each instance, agree to maintain
confidentiality on the same basis as set forth herein), and (ii)
to the extent such confidential information is required to be
disclosed by court order, subpoena or other judicial or legal
process or (iii) by TWC to the extent necessary to exploit
the Rights granted hereunder. If TWC or Licensor elects to issue
an initial press release concerning this Agreement, TWC shall
prepare the content and timing of such press release with
Licensor’s mutual approval. Notwithstanding anything to the
contrary in this Paragraph or elsewhere in this Agreement, the
Confidentiality Agreement between the parties dated
December 1, 2009 shall remain in full force and effect and
nothing herein shall be deemed to diminish Licensor’s
confidentiality obligations as set forth in said Confidentiality
Agreement.
15. Governing Law/Dispute Resolution: This
Agreement shall be construed in accordance with the laws of the
State of New York (without giving effect to principles of
conflict of laws). All disputes arising out of this Agreement or
the alleged breach of it shall be resolved and adjudicated in
the Federal, State or City Courts located in New York County.
Each of the parties hereto hereby submits to the jurisdiction
and venue of said courts and waives its rights to have disputes
arising out of this Agreement adjudicated in any other forum.
Notwithstanding the foregoing, any dispute regarding whether or
not Delivery has been effected shall be submitted to arbitration
pursuant to the IFTA Rules of Arbitration. In the event of any
dispute relating to the subject matter hereof, Licensor’s
sole remedy shall be to pursue an action at law for money
damages (or arbitration with respect to Delivery disputes), and
Licensor agrees that Licensor shall nor seek or be entitled to
enjoin the distribution, advertising or exploitation of any
Picture or the exercise of any of the Right granted herein or
terminate or rescind this Agreement. With respect to any breach
of this Agreement (other than delivery breaches which shall be
governed pursuant to Paragraph 9(b)), neither party shall be in
breach of this Agreement until they have received written notice
from the non-breaching party and been given a 15 business
day opportunity to cure following receipt of such written
notice. No failure on the part of Licensor or TWC to exercise,
and no delay in exercising, any right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive or in limitation of
any other right or remedy provided at Law or in equity except as
otherwise provided for herein. Notwithstanding
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anything to the contrary, this Paragraph shall be subject to the
terms and conditions set forth on Schedule 6 (attached
hereto and incorporated herein by reference).
16. Assignment: TWC, in its sole
discretion, shall have the right to assign or license any and
all of its rights and obligations hereunder to any person or
entity; provided that upon any such assignment TWC shall remain
primarily liable hereunder. TWC shall also have the right to
assign and pledge its rights hereunder in connection with
financing arrangements entered into by TWC and its affiliates,
it being understood and agreed that any such assignment and or
pledge shall not diminish or impair Licensor’s rights
hereunder. Licensor shall not assign this Agreement or any of
its rights or obligations hereunder without TWC’s prior
written consent. Nothing contained in this Agreement shall be
construed as creating an agency, partnership, joint venture or
fiduciary relationship between the parties. Licensor shall have
the right to assign and pledge its rights hereunder in
connection with financing arrangements entered into by Licensor
and its affiliates, it being understood and agreed that any such
assignment and or pledge shall not diminish or impair TWC’s
rights hereunder.
17. Accounting and Audit: TWC shall
maintain full and complete records of all matters relating to
the exploitation of the Rights in the Pictures. TWC shall
account to Licensor in a customary industry manner on a monthly
basis from the end of the first month following the release of
each Picture in the Territory and all accountings (and payments
when due as aforesaid), shall be on a monthly basis until the
date that is eighteen (18) months after the release of each
Picture, on a quarterly basis for the next two (2) years,
then on a semi-annual basis for the next two (2) years and
annually thereafter (to the extent there are Gross Receipts).
All accountings hereunder shall be sent to Licensor within
forty-five (45) days of the end of the relevant accounting
period and be accompanied by payment of all sums due to Licensor
thereunder. Licensor shall have customary motion picture
industry audit rights, at Licensor’s expense, in connection
with the Picture to be exercised not more than once per calendar
year during reasonable business hours to be conducted by a
certified public accountant and otherwise in accordance with
custom and practice in the industry and in a manner that will
not frustrate TWC’s business. Licensor shall notify TWC in
writing of its intention to audit TWC’s books, specifying
at least the statement upon which Licensor’s audit is to be
based, and such audit must be commenced within sixty
(60) days of such written notice and completed within
thirty (30) days of such commencement. Any statement to
which Licensor does not raise an objection within three
(3) years of its delivery shall be deemed conclusive and
final, and Licensor may not thereafter raise a claim with
respect to any item first reported on such statement (i.e., the
continued inclusion of any item on subsequent statements shall
not operate to extend the three (3) year period that
applies to such item as of the first statement on which it
appeared).
18. Holdback: Licensor shall not
authorize the Mexican
and/or
Canadian free or basic television exhibition (or exhibition on
another similar service) of any Picture (or any version thereof)
in the cities of Toronto, Niagara Falls, Windsor, Vancouver,
Tijuana or Xxxxxx, earlier than 30 days after the end of
the First Window for such Picture.
19. Security Interests:
(a) To the extent necessary for TWC to exercise the Rights
granted hereunder and to secure TWC’s rights to monies
hereunder, Licensor hereby agrees to grant to TWC (or if
applicable to cause the applicable SPC to grant to TWC) on a
Picture-by-Picture basis a first priority (subject to the final
sentence of this paragraph (a)) security interest in
all of Licensor’s (and/or the SPC’s, if applicable)
right, title and interest in and to the Rights in each Picture
in the Territory during each License Term and all results and
proceeds thereof (the “Collateral”). Licensor
agrees that such security interest shall be granted concurrently
with delivery to TWC of the Short Form Assignment, but in no
event later than the execution of an interparty agreement
between TWC and Licensor’s (and/or the SPC’s, if
applicable)
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financiers and completion guarantor. Licensor (and/or the SPC,
if applicable) agrees to take all actions reasonably requested
by TWC from time to time in order to create, perfect, protect,
preserve and maintain the perfection and priority of such
security interests in the Collateral to be granted by Licensor
(and/or the SPC, if applicable) to TWC in accordance with this
Agreement, including without limitation, (i) executing and
delivering to TWC a security agreement and all such financing
statements and other instruments (including, but not limited to,
a copyright mortgage with respect to each Picture) as TWC
reasonably shall request to create, perfect, protect, preserve
and maintain the perfection and priority of any such security
interest, the form of which the parties hereto agree to
negotiate in good faith (collectively, the “Security
Documents”), and (ii) filing, registering and/or
recording such Security Documents (as applicable).
Notwithstanding the foregoing, TWC acknowledges and agrees that
any security interest in the Collateral to be granted to TWC in
accordance with the terms hereof shall be subject to the rights
of any third party distributors and subject and subordinate to
the security interests of each Picture’s financiers,
completion guarantor and third party distributors and the
applicable guilds and labs pursuant to nondisturbance,
intercreditor and/or subordination agreements, as applicable, to
be negotiated in good faith.
(b) TWC will grant the SPC for each Picture, on a
Picture-by-Picture basis, a security interest in the Rights and
the products and proceeds thereof that are payable to Licensor
(or such SPC) solely in the Territory (“Licensor
Collateral”) to be negotiated in good faith subject to
customary non-disturbance language, including without
limitation, such lien being subject to the distribution rights
of TWC’s subdistributors and licensees, and subject to
SPC’s agreement to not exercise its remedies as a secured
creditor except (A) if (i) a third party judgment or
secured creditor of TWC takes action against a material portion
of the Licensor Collateral, and (ii) such action by the
third party judgment or secured creditor is reasonably likely to
result in this Agreement not being fully and timely performed by
TWC (including timely payment of all sums due and owing to
Licensor hereunder) or (B) in the event of TWC’s
bankruptcy (or other similar proceedings), SPC may exercise any
of its remedies as a secured creditor other than its foreclosure
remedies which foreclosure remedies may only be exercised if
(i) a third party judgment or secured creditor of TWC takes
action against a material portion of the Licensor Collateral,
and such action by the third party judgment or secured creditor
is reasonably likely to result in this Agreement not being fully
and timely performed by TWC (including timely payment of all
sums due and owing to Licensor hereunder) or (ii) there is
a subsequent material uncured breach by TWC of its material
obligations unless such breach or non-performance is a result of
a court order. In connection with TWC’s granting of such
security interest, TWC shall execute and deliver to SPC a
copyright mortgage and other required security documents
reflecting the foregoing (“Lien Documents”),
subject to good faith negotiations, and TWC covenants and agrees
that it has not and will not execute any conflicting transfer or
security interest prior to execution and delivery to SPC of such
Lien Documents. If, at the time that Licensor grants the Rights
to TWC, there is actually an existing lien on the Licensor
Collateral that TWC has previously granted, TWC shall have such
lien removed promptly or shall cause such lien holder to enter
into a customary intercreditor agreement with Licensor, subject
to good faith negotiation.
20. Further Documents: Licensor and TWC shall
execute or cause to be executed such documents and other
instruments and take or cause to be taken such further actions
as may be reasonably necessary or desirable to evidence,
effectuate or confirm the provisions of this Agreement and the
transactions contemplated by this Agreement. At TWC’s
written request, Licensor will execute, acknowledge and deliver
to TWC any and all additional documents TWC may deem reasonably
necessary to evidence and effectuate any and all of TWC’s
rights under this Agreement and Licensor hereby irrevocably
appoints TWC as attorney-in-fact with full power to execute,
acknowledge, deliver and record in the U.S. Copyright
Office or elsewhere any and all such documents Licensor fails to
execute, acknowledge and
The Xxxxxxxxx Company LLC
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deliver within five (50) business days after TWC’s request.
TWC shall provide Licensor with copies of all documents executed
on Licensor’s behalf; provided that inadvertent failure to
provide such copies shall not be a breach hereunder. The
appointment shall be a power coupled with an interest.
21. Compliance Warranty: With respect to all persons
filmed or photographed in connection with the Pictures on or
after March 18, 2009, Licensor represents, warrants and
covenants (or if Licensor is not the “Primary
Licensor”’ [as defined in 28 C.F.R. Sec.
75.1(c)(1)] of the Picture, Licensor in the name and on behalf
of any such Primary Licensor, represents, warrants and
covenants) that: (i) the Picture does not and shall not
contain any visual depiction that is child pornography [as
defined in 18 U.S.C. § 2256(8)] or is actual
sexually explicit conduct [within the definitions in
clauses (i) through (iv) of 18 U.S.C.
§ 2256(2)(A)]; (ii ) Licensor (or said Primary
Licensor) meets all of the eligibility requirements for the safe
harbor certification set forth in 18 U.S.C.
§ 2257A(h)(1) and 28 C.F.R.
§ 75.9(a)(1)-(3); (iii) Licensor (or said Primary
Licensor) regularly and in the normal course of business
collects and maintains, and with respect to the Picture, shall
collect and maintain, individually identifiable information
regarding all performers, including minor performers, employed
by Licensor (or said Primary Licensor), pursuant to tax, labor,
and other laws, labor agreements or otherwise pursuant to
industry standards, where such information includes the name,
address and date of birth of the performer, in accordance with
28 C.F.R. § 75; (iv) upon receipt of a
written demand from TWC with respect to one or more performer(s)
in the Picture, Licensor shall promptly deliver to TWC copies of
the individually identifiable information collected and
maintained by Licensor with respect to such performer(s);
(v) Licensor (or said Primary Licensor) has filed, or shall
file, by the deadlines established in 28 C.F.R.
§ 75.9(e), with the Attorney General of the United
States of America the certification (substantially in the form
set forth in the Delivery Schedule) provided under
18 U.S.C. § 2257A(h) and 28 C.F.R.
§ 75.9, and shall provide TWC with a true, correct and
complete copy of said certification, by the earlier of:
(A) promptly upon the filing of such certification with the
U.S. Attorney General; (B) Delivery of the Picture; or
(C) upon request; and (vi) the definitions set forth
in 18 U.S.C. § 2257, 18 U.S.C.
§ 2257A, 28 C.F.R. § 75 and the
explanatory notes by the Department of Justice of the United
States of America in 73 Fed. Reg. 77432 et seq. (Dec. 18,
2008) apply to the foregoing warranty, representation and
covenant.
22. Severability: In the event any one or more of
the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations
to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
23. Separate Counterparts: This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall constitute an
original, but all of which when taken together shall constitute
but one contract. Delivery of an executed counterpart of this
Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.
24. Entire Agreement: This Agreement sets forth the
entire agreement between the parties with respect to the subject
matter hereof, and upon the full execution hereof, shall
supersede and replace all prior
and/or
contemporaneous written or oral agreements pertaining hereto
(including, without limitation, the short form agreement
executed between the parties) and can only be modified by a
writing signed by both parties provided, for purposes of
clarification this Agreement shall not supercede or replace the
fully executed Confidentiality Agreement dated as of
December 1st,
2009 between the parties, which Confidentiality Agreement
remains in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized
officers as of the date first above written.
| THE XXXXXXXXX COMPANY LLC | ||||
By: |
/s/ Xxxxx Xxxxxxx | |||
Its:
|
PRESIDENT INTERNATIONAL | |||
| Accepted and Agreed: | ||||
| THE FILM DEPARTMENT LLC | ||||
By:
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/s/ Xxxx Xxxxxx | |||
Its:
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President & COO | |||
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