AGREEMENT
Exhibit 10.29
AGREEMENT
“STREETS OF LEGEND” (a.k.a. “QUATTRO NOZA”)
This agreement (the “Agreement”) is made and entered into as of March 24, 2005, by and between
Sobini Films (“Grantor”) and Lions Gate Films Inc. (“LGF”) with respect to that certain motion
picture presently entitled “Streets of Legend” (a.k.a. “Quattro Noza”).
1. Picture: The “Picture” shall mean that certain motion picture presently entitled “Streets of
Legend” (a.k.a. “Quattro Noza”) and any and all versions thereof (if and as available) and all
“bloopers”, footage, trims and outtakes thereof (if and as available) (including, without
limitation, the Director’s Cut and the Final Cut and any and all versions of each of the foregoing,
all versions rated by the Motion Picture Association of America and unrated versions of the
Picture, “behind the scenes”, “making of” and any and all other documentary or short films
concerning the Picture, and all footage, “bloopers”, trims and out-takes of each of the foregoing),
produced by, on behalf of or at Grantor’s direction, in the year 2003, starring Xxxxxx Xxxxxxxx and
Xxxxxxxx Xxxxxxxxx in the principal lead and supporting roles, written by Xxxx Xxxxxx and Xxxxxx
Xxxxxxxxx and directed by Xxxx Xxxxxx.
2. Territory: The “Territory” shall mean and include each of the following: (a) United States of
America (including but not limited to, Guam. Saipan, Midway Island, the Trust Territory Islands,
the Xxxxxxxx Islands, the Xxxxxxxx Islands, the Virgin Islands, Puerto Rico and American Samoa)
(“U. S.”), its territories, possessions, trusteeships and commonwealths and all military bases,
ships at sea, airlines and oil rigs flying the flag of the U.S., (b) Canada (including, but not
limited to, Quebec, Xxxxxx Xxxxxx Island, the Northwest Territories, the Yukon Territories and
Newfoundland), its territories, possessions, trusteeships and commonwealths, and all military
bases, ships at sea, airlines and oil rigs flying the flag of Canada, and (c) for the purposes of
Television exploitation in the U. S. only (the “Additional Television Territory’’), Bermuda and the
Bahamas Islands.
3. Rights Granted: Grantor hereby grants to LGF, on an exclusive basis, all distribution rights in
and to the Picture and the underlying material with respect thereto throughout the Territory, under
copyright and otherwise, in all languages and in all media, whether now known or hereafter devised,
including, without limitation, all Theatrical, Non-Theatrical, Home Video, Television, and
ancillary and derivative rights in and to the Picture, by all methods of delivery, whether now know
or hereafter devised, including without limitation, all Internet Delivery Mechanisms, all as such
rights may be more specifically defined in Schedule “A”, which is attached hereto and incorporated
herein by this reference (collectively, the “Rights”), but expressly excluding the copyright in and
to the Picture, all soundtrack album, Electronic Publishing Rights, literary publishing (including,
without limitation, all print publication and novelization rights), merchandising rights, and all
remake, prequel and sequel rights (including, without limitation, any and all television spin-off
rights) in and to the Picture, except as otherwise set forth herein. Without limiting the
generality of the foregoing, the Rights granted to
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 2 of 10
DM.O6
Page 2 of 10
LGF hereunder shall include, without limitation, the exclusive right to market,
advertise, promote and publicize the Picture in all media, whether now known or hereafter
devised.
a. Remakes, Prequels & Sequels: LGF’s negotiation rights with respect to remakes,
prequels and sequels of the Picture shall be pursuant to the terms of that certain executed
employment agreement dated June 6, 2000 (as amended) by and between Lions Gate Entertainment Corp., a corporation incorporated under the laws of British Columbia and Xxxx Xxxx with respect to the
employment of Amin.
b. Television Exploitation: Upon LGF’s receipt of Grantor’s written request, which
written request must be received by LGF no later than December 31, 2005 (the “Television Notice”),
LGF shall submit the Picture to Showtime for inclusion under LGF’s pay television output agreement
with Showtime Networks (the “Showtime Agreement”). If LGF does not receive the Television Notice on
or before December 31, 2005, then (i) LGF shall not submit the Picture to Showtime for inclusion
under the Showtime Agreement (except as otherwise set forth in this subparagraph), and (ii) LGF and
Grantor shall cooperate in connection with the sale of the first cycle Television Rights in and to
the Picture in the Territory. Following December 31, 2005, Grantor shall have the right to issue
written notice to LGF requesting that LGF submit the Picture to Showtime for inclusion under the
Showtime Agreement (the “Secondary Notice”). Upon LGF’s receipt of the Secondary Notice, LGF shall
have the right, but not the obligation, to submit the Picture to Showtime for inclusion under the
Showtime Agreement. If, following LGF’s receipt of the Secondary
Notice, LGF elects not to submit
the Picture to Showtime for inclusion under the Showtime Agreement, then LGF and Grantor shall
continue to cooperate in connection with the sale of the first cycle Television Rights in and to
the Picture in the Territory until such time as such sale is complete. Any submission by LGF of the
Picture to Showtime for inclusion under the Showtime Agreement pursuant to the terms of this
subparagraph shall be subject to Showtime’s right to accept or reject such submission pursuant to
the terms of the Showtime Agreement.
4. Term: The “Term” of this Agreement shall commence as of the date first written above and shall
terminate seven (7) years from LGF’s initial commercial theatrical release of the Picture in the
Territory plus an additional six (6) month non-exclusive sell-off period. Notwithstanding the
foregoing, if the Picture is included in the Showtime Agreement pursuant to the terms of Paragraph
3(b) hereinabove, the Term, with respect to all rights necessary to give effect to the Showtime
Agreement, shall extend for the term of the Picture required under the Showtime Agreement. It is
understood and agreed that LGF shall not manufacture more Home Video devices during the last six
(6) months of the Term than it reasonably expects to sell during the Term exclusive of the sell-off
period (provided that no inadvertent over-manufacturing shall be deemed a breach of this
Agreement). Without limiting the generality of the foregoing, LGF shall have a right of first
negotiation (for a period of ten (10) days commencing prior to the expiration of the Term) with
respect to any extensions of the Term hereof.
5. Minimum Guarantee: Not applicable.
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 3 of 10
DM.O6
Page 3 of 10
6. Grantor P&A Commitment; Release Commitment:
a. Grantor P&A Commitment: Grantor shall spend no less than Two Hundred Thousand
Dollars ($200,000.00) (the “Grantor P&A Commitment”) solely in connection with the print,
marketing, advertising and publicity costs for LGF’s Theatrical release of the Picture in the
Territory. The Grantor P&A Commitment shall be spent pursuant to a mutually approved budget (to be
negotiated in good faith by the parties) (the “P&A Budget”). Any print and advertising expenditure
in connection with the initial commercial theatrical release of the Picture in excess of the
Grantor P&A Commitment shall be subject to mutual written approval between the parties, which
approval shall not be unreasonably withheld by Grantor and shall be deemed rejected if not given
within five (5) days of Grantor’s receipt of LGF’s written request for such approval. If any such
additional print and advertising costs are paid for by LGF, such costs shall be recoupable as
Distribution Expenses pursuant to the terms of Paragraph 7 hereinbelow.
b. Release Commitment: LGF shall cause the initial commercial theatrical release of
the Picture on one (1) screen in the Territory.
7. Financial Terms:
a. Grantor’s Participation: From One Hundred Percent (100%) of all monies received by
LGF on a non-refundable basis from the exploitation of the Picture in all media throughout the
Territory, LGF shall be entitled to deduct the following on a continuing basis and in the following
order: (i) LGF’s Distribution Fee for all media; and (ii) LGF’s Distribution Expenses (as that term
is defined hereinbelow), but expressly excluding the Grantor P&A Commitment. All revenues remaining
after the foregoing deductions shall be referred to herein as “AGR”. The AGR shall be allocated One
Hundred Percent (100%) to Grantor. That portion of the AGR allocated to Grantor pursuant to this
paragraph shall be referred to herein as “Grantor’s
Participation”. LGF shall be entitled to
cross-collateralize all revenues received by LGF in connection with the Picture from all media
throughout the Territory for the purposes of recouping LGF’s recoupable Distribution Expenses and
the Home Video Advance (as that term is defined hereinbelow). LGF shall not be entitled to
cross-collateralize revenues received by LGF from the exploitation of the Picture with revenues
received by LGF in connection with any other motion picture property. The Picture shall not be used
as a loss-leader. If LGF includes the Picture in a package of films licensed to a third party, then
the price allocated to the Picture shall be on the basis of a reasonable allocation of revenues in
light of the commercial worth of the motion pictures in the package, as determined by LGF in the
exercise of its reasonable good faith business judgment.
b. Home Video Advance: As an advance against Grantor’s Participation, Grantor shall be
entitled to receive a “Home Video Advance” for the Picture in an amount equal to Fifty Percent
(50%) of Grantor’s projected share of AGR derived from the Initial Home Video Release (as that term
is defined hereinbelow) of the Picture, as projected by LGF in its reasonable good faith business
judgment (which projection shall include a reserve for returns based upon LGF’s reasonable good
faith business judgment). As used herein, “Initial Home Video Release” shall be the period
commencing on LGF’s initial Home Video Street Date for the Picture and
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 4 of 10
DM.O6
Page 4 of 10
continuing until the end of the calendar quarter during which LGF’s initial Home Video
Street Date for the Picture occurs. Grantor hereby acknowledges and agrees that the AGR projection
made by LGF pursuant to the terms of this paragraph is an estimate that is subject to change and
that the financial information contained therein is not a true and accurate statement of the actual
amount of revenues that will be collected by LGF or the actual amount of revenues payable to
Grantor. Grantor shall not rely on any information contained in any such projection for any purpose
whatsoever. Grantor shall not have the right to dispute such projection (or any and all components
thereof). One Hundred Percent (100%) of the Home Video Advance shall be payable thirty (30) days
following the end of the first calendar quarter during which LGF’s initial Home Video Street Date
for the Picture occurs (unless LGF’s initial Home Video Street Date for the Picture occurs in the
second half of such quarter, in which event the Home Video Advance shall be payable ninety (90)
days following the end of the first calendar quarter during which LGF’s initial Home Video Street
Date for the Picture occurs). Notwithstanding the foregoing, if LGF’s initial Home Video Street
Date for the Picture is less than thirty (30) days prior to the end of the calendar quarter, then
One Hundred Percent (100%) of the Home Video Advance shall be payable thirty (30) days following
the end of the second calendar quarter following LGF’s initial Home Video Street Date for the
Picture.
c. LGF’s “Distribution Fee” shall equal Fifteen Percent (15%) of One Hundred Percent (100%) of
all Gross Receipts received by LGF from the exploitation of the Picture in all media throughout the
Territory.
d. As used herein, “Distribution Expenses” shall mean, with respect to all rights granted to
LGF hereunder, one hundred percent (100%) of the aggregate of all actual, direct, out-of-pocket,
third party costs expended or incurred by LGF in direct connection with the distribution and
exploitation of the Picture throughout the Territory in all media, including, without limitation,
all DLT Creation Costs, and all conversion, manufacturing, duplication, shipping, marketing,
advertising, promotion and publicity costs, and all costs to complete Delivery of the Picture (to
the extent (i) LGF elects to cure any failure of Grantor to complete Delivery of the Picture in
accordance with the Delivery Schedule and/or (ii) LGF is required to take “access” to any Delivery
Materials pursuant to the Delivery Schedule; and/or (iii) Grantor is not required to deliver such
elements under the Delivery Schedule). The Grantor P&A Commitment shall not be included in
Distribution Expenses hereunder.
e. Home Video Marketing Expenses: Grantor and LGF shall mutually approve the initial
marketing budget for the initial Home Video exploitation of the Picture in the Territory, which
budget shall include the advertising, duplication and DVD authoring, compression and replication
costs (the “Approved Marketing Budget”). LGF shall have the right to reallocate the subcategories
contained in the Approved Marketing Budget for the Picture and shall have the right to spend up to
ten percent (10%) above the Approved Marketing Budget. Commencing as of the date that is twelve
(12) months following LGF’s initial Home Video Street Date for the Picture, LGF’s Home Video
marketing expenses shall not exceed an amount that is equal to twelve percent (12%) of the Gross
Receipts received by LGF from the exploitation of the Home Video Rights in and to the Picture.
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 5 of l0
DM.O6
Page 5 of l0
f. DLT Creation Costs: As used herein, the term “DLT Creation Costs” shall
mean and include 100% of LGF’s actual, direct, out-of-pocket, third party costs of creating the
Digital Linear Tape (“DLT”) for the Picture, including, without limitation, DVD mastering and
authoring costs, manufacturing, duplication, and shipping and clearance costs (including, without
limitation, the cost of clearing “bonus” materials for such DVD).
8. Delivery: Grantor shall Deliver, at Grantor’s sole cost and expense, all Delivery Materials set
forth in the Delivery Schedule that are required to constitute complete Delivery on or before
September 30, 2005 (the “Delivery Date”). If any of the Delivery Materials are incomplete or fail
to meet LGF’s technical requirements, LGF shall notify Grantor in writing specifying the defects in
the Delivery Materials (the “Defect Notice”). Such Defect Notice shall be delivered within
forty-five (45) days of LGF’s receipt of all Delivery Materials set forth in the Delivery Schedule.
Grantor shall have fifteen (15) days from its receipt of the Defect Notice in which to cure the
defects set forth therein (the “Delivery Cure Period”). If Grantor fails to cure the defects set
forth in the Defect Notice prior to the expiration of the Defect Cure Period, then, without
limitation to LGF’s other available rights and remedies, LGF shall have the option in its sole
discretion to (A) secure acceptable replacement materials and deduct the costs thereof from
Grantor’s Participation, or any other monies owing to Grantor pursuant to this Agreement, or (B)
determine that it is economically prohibitive or otherwise unfeasible to secure acceptable
replacement materials and, as a result, terminate this Agreement upon written notice to Grantor. In
the event that LGF elects to terminate this Agreement, LGF shall be (I) relieved of its obligations
hereunder, and (II) Grantor shall reimburse LGF for all of LGF’s out-of-pocket costs theretofore
incurred by LGF under this Agreement. Without limitation to those requirements set forth in the
Delivery Schedule, all documents required to be Delivered to LGF pursuant to the Delivery Schedule
shall be Delivered in the English language.
a. Running Time: The Picture shall be Delivered to LGF have a running time of not less
than ninety (90) minutes, nor more than one hundred ten (110) minutes, inclusive of main and end
titles.
b. Rating: The Picture shall be delivered to LGF having been judged to receive a
rating by the M.P.A.A. that is no more restrictive than “R”.
9. Credits; Editing: LGF shall have the right to cut, edit, change or add to, delete from or revise
the Picture, including the title, for M.P.A.A. rating purposes, to conform the Picture to LGF’s
marketing campaign and for any other reason as LGF may in its sole discretion determine. Subject
only to Grantor’s third party contractual restrictions delivered to LGF, Grantor’s credit, and/or
any guild restrictions which Grantor has informed LGF are applicable to the Picture in writing not
later than the Delivery Date. LGF may, in its sole discretion, determine and arrange the placing
and size of credits including credits above the title and/or above the artwork title. Without
limiting the generality of the foregoing, LGF shall have the right to place its name and logo on
all materials concerning the Picture in the Territory, including, without limitation, in the main
and end credits of the Picture (e.g., LGF’s customary presentation credit), in the billing block,
and on all advertising materials. It is the essence of this Agreement that Grantor Deliver written
notice of all credit, name and likeness obligations and restrictions and all third party
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 6 of l0
DM.O6
Page 6 of l0
contractual approval and consultation rights to LGF in writing on or before the Delivery
Date. Without limiting the generality of the foregoing, in the event that a performer or other
agreement containing a credit, name and/or likeness provision or approval or consultation right is
unexecuted as of such Delivery Date, then Grantor shall deliver the most recent draft of such
agreement to LGF and LGF shall have the right to rely thereon. Without limiting the generality of
the foregoing, in the event that a performer or other agreement containing a credit, name and/or
likeness and/or approval or consultation provision is unexecuted as of the Delivery Date, then any
and all contractual credit, name and likeness obligations and restrictions and approval rights
negotiated after such Delivery Date must be approved by LGF in writing prior to Grantor entering
into any agreement with respect thereto. LGF shall not remove any credit or copyright notice
appearing on screen as the Picture is Delivered to LGF except as follows: (i) to comply with a
court order or the order of an arbitrator or mediator, (ii) as required in settlement of a dispute,
or (iii) as required by law. No casual or inadvertent failure by LGF or any third party to comply
with any credit, name or likeness obligation or restriction, or to comply with any approval or
consultation right, shall be deemed a breach of this Agreement, provided that LGF takes all
commercially reasonable steps to cure such failure on a prospective basis commencing on LGF’s
receipt of written notice thereof. The sole remedy of Grantor for a breach of any of the provisions
of this Paragraph 9 shall be an action at law for compensatory damages, it being agreed that in no
event shall Grantor be entitled to consequential or punitive damages, or to seek or obtain
injunctive relief, specific performance, or any other form of equitable relief, by reason of any
breach or threatened breach of any of the credit, name, likeness or other obligation or restriction
or approval or consultation right, nor shall Grantor be entitled to enjoin or restrain the
exhibition, distribution, marketing, advertising, promotion, or other exploitation of the Picture.
10. Holdbacks: LGF shall control the release dates of the Picture by means of the Home Video Rights
as well as all television exhibition in Mexico (in the English and Spanish languages): provided
that Grantor’s distributor(s) of the Picture in Mexico shall each be entitled to release the
Picture day and date with LGF’s initial commercial release of the Picture in like media in the
Territory. When applicable, LGF shall also control the wholesale and suggested retail price of the
distribution of the Picture by means of the Home Video Rights in Mexico (in the English and Spanish
languages): provided that Grantor’s distributor(s) of the Picture in Mexico shall each be entitled
to release the Picture by means of the Home Video Rights at the same price point as LGF’s release
of the Picture in the Territory. Grantor shall use all reasonable good faith efforts to cause the
distributor(s) of the Picture in Mexico to each confirm in writing its acknowledgement of such
holdback and price restrictions.
11. Grantor’s Representations and Warranties: Grantor represents and warrants as of the date hereof
and also upon Delivery of the Picture that: (a) there are no non-customary credit, name or likeness
obligations or restrictions or approval or consultation rights applicable to the Picture (all of
which, if any, shall be Delivered to LGF in writing on or before the Delivery Date and LGF shall
have the right to rely thereon) and that LGF shall have the right, but not the obligation, to
utilize the likeness and name of each of the principal cast members in the artwork and in trailers
for the Picture: (b) Grantor owns or controls all Rights granted to LGF under this Agreement and
that all such Rights are free of all liens, claims, charges, encumbrances, restrictions, and
commitments; (c) there is no agreement concerning the Picture with any person or entity which, if
breached, would or
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 7 of 10
DM.O6
Page 7 of 10
could in any way impair, interfere with, abrogate or adversely or otherwise affect any of the
Rights granted to LGF under this Agreement: (d) LGF’s exploitation of the Picture will not be
subject to any guild (e.g., WGA. DGA, and SAG) liens, or residuals; (e) it is a corporation duly
formed and validly existing in good standing under the laws of California and has the full right,
power, legal capacity and authority to enter into and carry out the terms of this Agreement: (f)
neither the Picture, nor any part thereof, nor any materials contained therein or synchronized
therewith, nor the title thereof, nor the exercise of any Right, license or privilege granted to
LGF hereunder, violates or will violate, or infringes or will infringe, any trademark, trade name,
service xxxx, patent, copyright (whether common law or statutory), or, to the best of Grantor’s
knowledge, the literary, dramatic, musical, artistic, personal, private, civil, “droit moral” or
property right or rights of privacy or any other right of any person or entity whatsoever, or
unfairly competes with or slanders or libels (or constitutes a trade disparagement of) any person
or entity whatsoever; (g) it has no agreement with or obligations to any third party with respect
to the Picture which might conflict or interfere with any of the provisions of this Agreement or
the use or enjoyment by LGF of any of the Rights granted; (h) the Rights granted to LGF herein have
not been previously granted, licensed sold, assigned, transferred, conveyed or exploited by any
person or entity and Grantor shall not sell, assign, transfer, convey to or authorize any person or
entity any right, title or interest in and to the Picture or any part thereof or in and to the
dramatic or literary material upon which the Picture is based, which is adverse to or in derogation
of the Rights granted to LGF; (i) there is no litigation, arbitration, claim, demand, or
investigation pending or threatened with respect to the Picture, or the literary, dramatic or
musical material upon which the Picture is based or which is contained therein, or concerning the
physical properties thereof; (j) Grantor has secured, or by the Delivery Date will have secured,
and shall for the duration of this Agreement maintain, all clearances (including, without
limitation, all music rights and music clearances) which arc necessary for LGF to use and enjoy the
Rights granted to LGF in and to the Picture throughout the Territory for the duration of the Term
and that no supplemental or additional use payments shall be required with respect to the
exploitation of the Picture (or any portion or element thereof, including, without limitation, the
music contained therein) and/or any use or exploitation of any advertising or promotion of the
Picture which contains the music as embodied in the Picture (including “in-context” uses thereof):
and (k) Grantor is in all respects in compliance with the requirements of the Child Protection and
Obscenity Enforcement Act of 1988, as amended by the Child Protection Restoration and Penalties
Enhancement Act of 1990, and all rules and regulations promulgated thereunder (collectively, the
“CPOEA”) and that the Picture is in all respects in compliance with the requirements of the CPOEA, and does not contain any material that would require Grantor to comply with the recordkeeping
requirements of the CPOEA,
12. Indemnities:
a. Grantor shall indemnify, defend and hold harmless LGF, its parent, subsidiaries,
affiliates, assignees, licensees, sublicensees, distributors, sub-distributors and dealers, and the
directors, officers, agents, consultants and representatives of the foregoing (the “LGF
Indemnitees”), from all claims, costs, liabilities, obligations, judgments or damages (including
reasonable outside attorneys’ fees but excluding lost profits and consequential damages), arising
out of or for the purpose of avoiding any suit, claim, proceeding or demand or the settlement
thereof, which may be brought against any of the LGF Indemnitees by reason of the actual or
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 8 of 10
DM.O6
Page 8 of 10
proposed production of the Picture, or the use or disposition of rights granted herein,
or in connection with the breach of any of the warranties, representations or obligations made
by Grantor, unless resulting from a breach of this Agreement by LGF.
b. LGF shall indemnify, defend and hold harmless Grantor, its parent, subsidiaries,
affiliates, assignees, and the directors, officers, agents, consultants and representatives of the
foregoing (the “Grantor Indemnitees”), from all claims, costs, liabilities, obligations, judgments
or damages (including reasonable outside attorneys’ fees but excluding lost profits and
consequential damages), arising out of or for the purpose of avoiding any suit, claim, proceeding
or demand or the settlement thereof, which may be brought against any of the Grantor Indemnitees by
reason of the distribution, advertising or promotion of the Picture, or in connection with the
breach of any of the warranties, representations or obligations made by LGF, except to the extent
that LGF is required to be indemnified by Grantor in accordance with paragraph 12(a) hereinabove.
c. The parties hereto shall meaningfully consult with each other with respect to the defense,
institution or settlement of litigation in connection with the rights granted hereunder and LGF’s
exploitation thereof during the Term and in the Territory.
13. Reporting Periods: Following exploitation by LGF of the rights granted herein, customary
reporting shall be rendered to Grantor quarterly for the duration of the Term. Statements and
payments shall be delivered to Grantor simultaneously and shall be delivered within ninety (90)
days of each reporting period.
14. Audit Rights: Grantor shall have the right to have a certified public accountant of its choice
audit LGF’s books and records with respect to the Picture(s) once per year (and only once with
respect to any particular records and/or statements) at Grantor’s sole cost and expense: such audit
shall take place in LGF’s principal place of business and shall not unreasonably interfere with
LGF’s course of business. Said audit shall be conducted at LGF’s principal place of business during
normal business hours. Grantor shall give LGF ten (10) business days prior written notice of its
intent to conduct such audit. All notices, statements and payments made pursuant to the Agreement
shall be deemed valid and shall not be subject to dispute or audit unless disputed within
twenty-four (24) months after first issued. In the event that an audit reveals (i) an underpayment
of seven and one-half percent (7.5%) or more of the total monies owed; (ii) the underpayment is
seven thousand five hundred dollars ($7,500.00) or more, and (iii) the amount of the audit is
reasonable and customary and does not exceed the amount of the underpayment, then LGF shall pay
Grantor the amount of the underpayment plus the reasonable, actual, direct, out-of-pocket, third
party costs of the audit up to the amount of the underpayment.
15. Assignment: LGF may grant, assign or sublicense this Agreement or any of its rights or
obligations herein to any third party: provided that LGF shall remain primarily liable for its
obligations hereunder unless such assignment is to (i) a parent, subsidiary or affiliated entity of
LGF, (ii) a company that acquires all or substantially all of LGF’s assets, and/or (iii) is to a
“major” or “mini-major’’ studio, and, in any event, provided that LGF shall remain secondarily
liable for its payment obligations hereunder. Grantor shall not assign this Agreement or any of
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 9 of 10
DM.O6
Page 9 of 10
their rights or obligations herein except that after Delivery of the Picture is accepted by
LGF. Grantor shall have the right to assign its right to receive payment on three (3) occasions in
bulk during the Term. Any purported assignment in violation of this Agreement shall be null and
void.
16. No Third Party Beneficiaries: Nothing contained in this Agreement shall be construed so as to
create any third party beneficiary hereunder. In this regard, nothing under this Agreement shall
entitle any third party to any remedies against LGF, at law, in equity, or otherwise, including,
without limitation, any additional audit rights or the right to seek or obtain injunctive relief
against LGF’s distribution of the Picture.
17. Default: If Grantor defaults (or breaches a material representation and warranty), which
default remains uncured for fifteen (15) business days following Grantor’s receipt of LGF’s written
notice to Grantor thereof, LGF shall be entitled to terminate this Agreement. In the event that
Grantor fails to fully Deliver the Delivery Materials set forth in the Delivery Schedule, which
failure is not timely cured, LGF may create such Delivery Materials, the reasonable, actual,
out-of-pocket cost of which shall be recoupable by LGF, in LGF’s sole discretion, as (i) as a
Distribution Expense, and/or (ii) from any other monies (e.g. Grantor’s Participation, bonuses,
etc.) which are then due and owing to Grantor, LGF’s rights and remedies shall be cumulative, and
none of them shall be exclusive of any other allowed by law. If LGF defaults, Grantor shall not be
entitled to terminate or rescind this Agreement, nor to obtain injunctive relief with respect to
the exercise by LGF of the rights granted hereunder and Grantor further waives all rights to seek
and recover punitive damages; Grantor’s sole remedy shall be an action at law for damages.
Notwithstanding the foregoing, LGF shall not be entitled to seek or obtain injunctive or equitable
relief with respect to the exploitation of the Picture outside the Territory.
18. Governing Law; Jurisdiction: This Agreement shall be construed and interpreted pursuant to the
Laws of the State of California as it applies to contracts entered into and performed wholly within
California or, if appropriate, the federal laws of the United States of America. Any dispute
regarding the validity, construction, terms or performance of this Agreement or any other matter
in connection therewith shall be submitted to binding arbitration before the JAMS in Los Angeles.
California in accordance with the following provisions:
a. If the parties cannot agree upon a single arbitrator, each party shall select one
arbitrator who has experience in the motion picture industry and both arbitrators so selected shall
select a third arbitrator.
b. The third arbitrator shall adjudicate the dispute applying the laws of the state of
California as it applies to contracts entered into and wholly performed within California or, if
appropriate, the federal laws of the United States of America.
c. The arbitrator shall issue a written opinion specifying the basis for their award and the
types of damages awarded.
“Streets of Legend” (a.k.a. “Quattro Noza”)
DM.O6
Page 10 of l0
DM.O6
Page 10 of l0
d. There shall be a court reporter record made of the arbitration hearing and said record
shall be the official transcript of the proceedings.
e. Witness lists, production of documents and subpoenas in the arbitration shall be in
accordance with Section 1280 et seq. of the California Code of Civil Procedure, except that the
fifteen (15) day periods set forth in subsections (a)(2)(A) and (B) of Section 1282.2 shall be
deemed to be periods of five (5) business days. If the dispute pertains to Delivery, there shall be
made available to the arbitrator all relevant materials submitted by LGF or Grantor which purport
to constitute completion and delivery of the Picture. The parties shall participate in an exchange
of information before the hearing. If any such discovery is not voluntarily exchanged among the
parties, the party desiring such discovery may apply to the arbitrator at the outset of the
arbitration for particular discovery requests. The arbitrator may deny only such discovery as is
unreasonable or is intended to unduly delay the prompt conclusion of me arbitration.
f. The decision of the arbitrator (or the majority of the arbitrators, if applicable) shall be
binding upon the parties, shall constitute a full and final adjudication of the controversy. The
parties shall each be responsible for paying fifty percent (50%) of all the arbitrator’s and court
reporter’s fees (including, without limitation, the cost of the arbitration), unless the arbitrator
for the majority of the arbitrators, if applicable) decides otherwise. A judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction thereof.
This Agreement (inclusive of Schedule “A”, Exhibit “A” and Exhibit “C”), when executed, is
legally binding unless and until superseded by a more formal agreement incorporating the terms set
forth above as well as additional provisions, which when and if executed, shall replace this
Agreement, Capitalized terms used herein and not otherwise defined shall have the same meaning as
in LGF’s standard long-form agreement, subject to good faith negotiations in accordance with LGF’s
and Grantor’s standard business practices. All items not addressed above shall be negotiated in
good faith pursuant to prevailing industry customs and standards and LGF’s and Grantor’s standard
business practices. This Agreement may not be changed, modified, amended or supplemented, except in
a writing signed by both parties.
AGREED TO AND ACCEPTED BY:
LIONS GATE FILMS INC.
|
SOBINI FILMS | |||
/s/ Xxxxx Xxxxx
|
/s/ Xxxx Xxxxxxxxxxxx | |||
| Xxxxx Xxxxx | Xxxx Xxxxxxxxxxxx | |||
| EVP & General Counsel | Attorney | |||
3/14/06
|
12/19/05 | |||
