DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of the 30th day of January 1997.
BETWEEN:
PINOY PRODUCTIONS INC., a company duly incorporated
under the laws of the Province of British Columbia with an office
at 7527 Kingway, in the City of Burnaby, in the Province of
British Columbia.
("Licensor")
PARTY OF THE FIRST PART
AND:
ECLIPSE ENTERTAINMENT GROUP, INC., a company duly
incorporated under the laws of the State of Nevada with an office
at 00000 X.X. 0xx Xxxxxx, Xxxxx 000, in the City of Bellevue, in
the State of Xxxxxxxxxx, X.X.X., 00000
("Distributor")
PARTY OF THE SECOND PART
WHEREAS:
1. Licensor represents that it owns the rights granted to
Distributor; and
2. Distributor has agreed to accept such grant upon the terms
and conditions hereinafter set forth.
NOW THEREFORE WITNESS that in consideration of the covenants and
conditions hereinafter contained and other good and valuable
consideration, the parties agree as follows:
A. BASIC LICENSE TERMS
1. Elements
Title: Tentatively called "The Process."
Director: Xxxxx Xxxxx Xx.
In addition, to the foregoing, Distributor shall have approval of
the final script, music composer, editor, and final edit of the
Picture.
2. Licensed Rights/Territory/Language
Grant of Rights: Licensor hereby grants to Distributor the sole
and exclusive right and license to exhibit, distribute, and
license under copyright in the Territory, the exhibition of a
certain motion picture entitles "The Process" (the "Picture")
theatrically and non-theatrically and on television in all forms
whether now or hereafter known or hereafter known, including free
network television, syndicated television, pay television, pay
cable and by home video cassette, and all other devices whether
now or hereinafter known, without limitation or without
reservation in the original language version and in any other
language version in which the Picture will become available.
Territory: The territory shall consist of all of the Universe
(the "Territory").
3. Term
Starting on execution of this Agreement and ending 50 years after
delivery of the initial physical materials to Distributor.
4. Delivery Date
March 30, 1997.
B. FINANCIAL TERMS
In consideration of the rights, licenses and privileges herein
granted to Distributor, it is agreed that Distributor shall pay
to Licensor $100,000 U.S. to assist Licensor to complete the
Picture (the "Advance"). The Advance is payable once this
Agreement is signed and executed. The Gross Receipts derived
from the exhibition, distribution and exploitation of the Picture
in all media in the Territory shall be apportioned and paid as
follows:
1. On Gross Receipts to $250,000 U.S.: 100% to Distributor.
2. On Gross Receipts between $250,000 U/S/ and $1,000,000 U.S.:
75% to Distributor and 25% to Licensor.
3. On Gross Receipts between $1,000,000 U.S. and $2,500,000
U.S.: 80% to Distributor and 20% to Licensor.
4. On Gross Receipts above $2,500,000 U.S.: 85% to Distributor
and 15% to Licensor.
For purposes of this Agreement, "Gross Receipts" shall mean and
include all gross sums actually received by Distributor out of or
in connection with the exercise of the rights granted herein. In
no event shall the receipts of any exhibitor or other licensee of
Distributor be included in the Gross Receipts. Advance payments,
guarantees, and/or security deposits shall not be included in
Gross Receipts until earned by the exhibition of the Picture or
applied by Distributor to the Picture.
Once Distributor has paid Licensor $100,000 U.S. for completion
of the Picture, Licensor shall be irrevocably obligated to
transfer all rights in the Picture to Distributor, free and clear
of all liens and encumbrances. At that time, all rights to the
Picture shall be owned exclusively by Distributor.
C. RECOUPMENT OF EXPENSES.
The Distributor shall be entitled to deduct from the Gross
Receipts all reasonable expenses of distribution of the Picture
made by Distributor, up to a maximum of $150,000 U.S.
All of such expenses shall be recouped by Distributor prior to
payment of any monies to either party pursuant to paragraph B of
this Agreement.
D. ACCOUNTING AND PAYMENT
1. Distributor shall account and make payments to Licensor on a
quarterly basis within thirty days following the close of each
calendar quarter commencing on the initial release of the Picture
hereunder, and continuing until two years following such initial
release. Thereafter, accounting statements and payments shall be
made semi-annually for each semi-annual period during which the
Picture is in release hereunder. Accounting shall reflect Gross
Receipts and permitted deductions and shall be accompanied by
payment of such amount, if any, as may be payable to Licensor
hereunder. Notwithstanding anything to the contrary contained
herein, Distributor shall not be required to furnish statements
of account of any period in which there are no Gross Receipts or
Distribution Expenses after the date that is two years after the
initial release of the Picture. Licensor shall reimburse
Distributor on demand for any overpayments and Distributor may
deduct the amount thereof from any monies payable to Licensor
hereunder or under any other agreement between Licensor and
Distributor.
E. REPRESENTATION AND WARRANTIES OF LICENSOR
Licensor represents, warrants and covenants as follows:
1. Distributor shall have the right throughout the Term to
utilize, reproduce, transmit, broadcast, exploit, and publicize
the names, likenesses and voices of all persons appearing in or
rendering services, or contributing rights to the production of
the Picture.
2. Licensor will own or control all music in the Picture and
will have valid and subsisting synchronization, performing, and
other applicable licenses respecting such music as my be
necessary in connection with the full exercise by Distributor of
the rights.
3. The Picture shall be duly registered and otherwise protected
by copyright throughout the Territory prior to the date of
delivery hereunder and at all times during the Term.
F. DISTRIBUTOR'S DUTY
Distributor accepts the license herein granted to it and will in
good faith endeavor to distribute and exploit the Picture within
the Territory consistent with sound business policy. Subject to
the provisions of this Agreement, Distributor shall have full and
complete charge and control of the manner in which, and the terms
upon which, the Picture shall be marketed and distributed.
Nothing herein shall be construed as a representation of
Distributor as to the amount of Gross Receipts to be realized
pursuant to the distribution activities of Distributor.
G. INDEMNITY
1. Each of the parties hereto agrees to and does indemnify and
hold the other and the other's officers, employees, attorneys,
agents, principals, affiliates, successors, licensees, and
assigns harmless from and against any and all claims, losses,
liabilities, costs, expenses, and damages (including reasonable
legal fees and costs of suit) resulting from the breach or
alleged breach of any representation, warranty, or agreement
herein contained.
2. The rights and remedies of Licensor (or any person or entity
transferring rights or rendering services in connection with this
Picture), in the event of any breach of any provision of this
Agreement by Distributor, shall be limited to the right to
recover damages, if any, in an action at law, and in no event
shall Licensor or any such person or entity be entitled to enjoin
or restrain or otherwise interfere with the production,
distribution, or exhibition of the Picture or any part or element
thereof or the use, publication, or dissemination of any
advertising issued in connection with the Picture or to rescind
or terminate this Agreement.
H. DEFAULT
If Distributor shall fail to perform any of its material
obligations hereunder, or if Distributor shall breach any
material representation, warranty, or agreement contained herein,
Licensor's remedy shall be limited to an action or damages, and
in no event shall Licensor have the right whatsoever to terminate
or rescind this Agreement, interfere in any way with the
distribution of the Picture or seek to enjoin the distribution
and exploitation of the Picture, nor shall the rights acquired by
Distributor under this Agreement be subject to revocation or
rescission.
I. ASSIGNMENT
Licensor shall not have the right to any or all of its rights or
delegate any or all of its obligations hereunder to any person or
entity without the prior written consent of Distributor, which
consent shall not be unreasonably withheld or delayed.
Distributor may assign its rights or delegate its obligations to
any person or entity without restriction.
Notwithstanding anything to the contrary, this Agreement is
binding upon and shall enure to the benefit of the parties hereto
and their respective successors and assigns.
J. NO PARTNERSHIP
Nothing in this Agreement shall be construed to make Distributor
a partner, joint venturer, representative or agent of Licensor,
and neither Licensor not Distributor shall so hold itself out by
advertising or otherwise, nor shall either party be lawfully
bound by any representation, act or omission of the other.
K. ENTIRE AGREEMENT
This Agreement cannot be changed or terminated orally and no
amendments, modifications or assignments hereof shall be binding
upon either party until accepted in writing by a duly authorized
agent or officer of the other party. The titles of the
paragraphs of this Agreement are for convenience of reference
only and shall not in any way affect the interpretation of any
paragraph.
L. GOVERNING LAW
This Agreement is governed by the laws of the State of Nevada.
IN WITNESS WHEREOF the Licensor and Distributor have executed
this Agreement on the date first above written.
ECLIPSE ENTERTAINMENT GROUP, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
PINOY PRODUCTIONS INC.
/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
