Exhibit 10.1
THIS DISTRIBUTION AGREEMENT is made the 11th day of October, 2000
BETWEEN:
BACCHUS ENTERTAINMENT LTD., a company incorporated in
British Columbia under incorporation number 561260 whose
registered office is at 000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX X0X 0X0, XXXXXX (the "Company")
AND
XXXXXXXXXXXXXXX.XX, INC., a company incorporated under
the laws of the State of Delaware whose registered
office is Xxxxx 000, 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx,
XX, 00000, XXX (the "Distributor").
IT IS AGREED AS FOLLOWS:
The following definitions apply in this Agreement:
"Agreement"
-----------
this agreement and any and all schedules and exhibits attached to it or
incorporated in it by reference
"Airline Rights"
----------------
the right to show or play the Films by any manner or means or make available to
passengers on aircraft registered in any country in the Territory
"Basic Cable"
-------------
a group of Cable Television channels selected by or supplied to any subscriber
with or without Interactive Services in consideration for a single aggregate
subscription or other periodic or other fee which is not allocated or
apportioned to any channel
"Basic Satellite"
-----------------
a group of Satellite Television channels selected by or supplied to any
Satellite Television Subscriber in consideration for a single aggregate
subscription or other periodic or other fee charged by the Satellite Operator
which is not allocated or apportioned to any channel and which does not exceed
$1 per channel per month
"Cable Operator"
----------------
any person, firm or company licensed pursuant to the laws of any country within
the Territory to provide service of Basic Cable
"Cable Television"
------------------
Basic Cable and/or Pay Cable
"Delivery Material"
-------------------
the delivery material in respect of the Films specified in Schedule 1 including
without limitation any Publicity Material referred to in such schedule
"Digital rights"
----------------
the rights to encode the Films and stream them on the Internet or make them
available for download via the Internet, or to make the Films available to any
person by any electronic delivery service or by any other means of electronic
transmission.
"Disk"
------
any CD-ROM, DVD, compact disk, disk cassette or other physical carrier whether
digital or mechanical or electrical which contains the Films.
"Disk Rights"
-------------
the right to manufacture, sell and exploit Disks in accordance with the terms of
this Agreement.
"Films"
-------
the colour films short particulars of which are contained in Schedule 3
"Gross Receipts"
----------------
all money received from exploitation of the Rights in the Territory during the
Term
"Interactive Service"
---------------------
any service provided by a Cable Operator by means of which a Subscriber is
capable of conveying to the Cable Operator any images, sounds, data or
information other than signals sent for the control of the service
"Non-Theatrical Rights"
-----------------------
the right to show or play the Films and or to authorize others to do so for
screening before an audience by institutions or organizations not primarily
engaged in the business of exhibiting motion pictures to the public including
without limitation educational, social and religious institutions, churches,
business, industrial and civic organizations, hospitals, libraries, prisons and
convents, marine and military installations
"Pay Cable"
-----------
any service for television other than Basic Cable receivable by any Subscriber
for which a premium in excess of $1 per channel per month is payable whether on
a pay-per-view, pay-per-channel, pay, subscription, or other periodic or other
fee basis
"Publicity Material"
--------------------
the material relating to the Films as set out in Schedule 1
"Rights"
--------
the rights granted the Distributor pursuant to Clause 1
"Satellite Operator"
--------------------
any person, firm or company which provides television program service by mode of
satellite
"Satellite Television Rights"
-----------------------------
the right to authorize exploitation of the Films by a Satellite Operator
including without limitation by means of so-called `direct broadcast by
satellite', `direct to home' and `satellite master antenna television'
"Subscriber"
------------
a private residential home or other residential unit or other dwelling unit the
owner or occupier of which has contracted to receive any television channel
"Ship Rights"
-------------
the right to show or play the Films by any manner or means or make available
Videograms to passengers on ships registered in any country in the Territory
"Subscription Television"
-------------------------
any Broadcast for which a premium is payable whether on a `pay-per-view', `pay
channel' or `pay' subscription or other periodic or other fee basis and includes
digital television
"Subscription Television Rights"
--------------------------------
the right to authorize the exploitation of the Films by means of Subscription
Television
"Territory"
-----------
the Universe
"Term"
------
two years ending October 15, 2002
"Theatrical Rights"
-------------------
the right to show or play the Films in public by any manner or means in any
medium to any audience which has paid or is deemed pursuant to any statutory
provision now existing or in the future enacted to have paid for admission to
the place where any of the Films is to be seen or heard
"Videogram"
-----------
any video cassette, video disc, tape, compact disc, digital video disc or other
electronic magnetic or other device whatever, whether existing now or developed
in the future which may be derived in whole or in part from the Delivery
Material alone or in conjunction with other audio or audio-visual material by
means of which visual images with or without sound derived from the Films may be
perceived, reproduced or otherwise communicated directly or with the aid of any
machine or device.
1. GRANT OF RIGHTS
1.1 In consideration of the undertakings of the Distributor in this
Agreement and subject to and conditional on the full and timely
performance and observance by the Distributor of its obligation,
warranties an undertakings contained in this Agreement, the Company
grants to the Distributor on a sole and exclusive basis throughout the
Territory during the Term:
(a) the Airline Rights;
(b) the Non-Theatrical Rights;
(c) the Ship Rights;
(d) the following Television Rights:
i. the Cable Television Rights;
ii. the Free Television Rights;
iii. the Satellite Television Rights;
iv. the Subscription Television Rights;
(e) the Theatrical Rights;
(f) the Video Distribution Rights;
(g) the Digital Rights; and
(h) the Disc Rights.
1.2 The Distributor shall have the non-exclusive right to use for the
purposes of publicity in connection only with the Films the name
biography and likeness of person connected with the Films for the
purpose of exploiting the Rights in the Territory but not for the
purpose of any merchandising or product endorsement or tie-ins or other
activities independent of the exploitation by the Distributor of its
rights in connection with the Films.
1.3 All rights whether now existing or in the future invented which are not
specifically granted to the Distributor by this Agreement are expressly
reserved to the Company, its successors and assigns and sub-licenses
for its and their own unrestricted use and benefit including expressly
without limitation all merchandising rights, novelisation rights, sound
track recording rights, music publishing rights, publishing rights and
any other rights of whatever nature in or to any underlying rights or
elements contained in the Films.
2. REMUNERATION
2.1 The Distributor undertakes to pay the Company the Minimum Guarantee of
US$10,000, payable with 1,000,000 common shares of Xxxxxxxxxxxxxxx.xx,
Inc. at a value of US$0.01 each.
2.2 The amount of the Minimum Guarantee which the Distributor is entitled
to recoup from each medium of exploitation of each Film in each
territory is listed in Schedule 5.
2.3 All Distribution Expenses incurred by the Distributor in connection
with the exploitation of the Rights pursuant to this Agreement shall be
borne by the Distributor from the portion of Gross Receipts which the
Distributor shall be entitled to retain.
3. APPLICATION OF GROSS RECEIPTS
3.1 100% of the Gross receipts derived from the exploitation of the
Theatrical Rights and Non-Theatrical Rights in the Territory during the
Term in respect of the Film shall be retained by the Distributor until
such sums equal the amount of the Minimum Guarantee apportioned to the
Theatrical Rights and the Non-Theatrical Rights in such Films in the
Territory and after the Distributor shall have recouped such sums.
3.2 All Gross Receipts derived from each Film in the Territory during the
Term, otherwise than pursuant to clause 3.1 shall be paid as to 50% to
the Company and 50% to the Distributor.
3.3 The percentage of Gross Receipts which the Distributor is entitled to
retain pursuant to this Clause shall be inclusive of all distribution
fees and expenses payable to any sub-distribution licensees,
sub-licensees assigns or companies or persons connected to, associated
with, or employed by the Distributor.
3.4 The amount of any reimbursable expenses permitted deductions, refunds,
rebates, offsets or other reductions of film rentals in respect of each
Film payable by the Distributor or its sub-distributor or licensee as
between any exhibitor and the Distributor or its sub-distributor or
licensee shall be borne solely out of the Distributor's percentage of
Gross Receipts of such Film unless such amount shall have received the
prior approval of the Company in writing.
4. PAYMENT
4.1 All sums (other than the Minimum Guarantee which shall be payable in
accordance with the provision of Clause 2) shall be paid by the due
date to the Company in the form of certified check or money order.
4.2 The United States Dollars shall be the currency of account of this
Agreement and where any sums are received in any other currency such
sums shall be converted at the mid-market rate of exchange prevailing
at the Bank of America in New York on the date payment is due.
5. DISTRIBUTION
5.1 The Distributor undertakes to enter into licence agreements for the
Rights in each Film in the Territory as soon as reasonably possible.
5.2 The Distributor undertakes to exploit the Rights to the Films in every
possible manner and undertakes not to discriminate against any of the
Films.
5.3 The Distributor shall consult with the Company throughout the Term in
connection with all material aspects relating to the exploitation of
the Rights in the Territory including without limitation advertising
budgets, release dates, places of exhibition, and marketing strategy
for the Films and shall give consideration in good faith to the view of
the Company.
5.4 The Distributor undertakes to market the Films throughout the Territory
so as to maximize Gross Receipts from the exploitation of the Rights
and undertakes to spend no less than $5,000 in advertising and
marketing expenditure for the Films.
5.5 All advertising and publicity material which the Distributor wishes to
use in connection with the publicity for the Films (other than material
supplied by the Company) shall be subject to the prior written approval
of the Company in all respects and all rights of copyright and all
other rights in and to any such advertising or publicity material
created by the Distributor shall vest in the Company AB INITIO and at
the end of the Term the Distributor shall return to the Company all
original and duplicate copies of such material in the possession of the
Distributor.
5.6 The Distributor shall take all necessary steps at the cost and the
expense of the Distributor including where necessary and possible the
registration of copyright in the Films in the name of the Company and
such other steps as may be advisable or necessary in order to protect
the copyrights and other rights relating to the Films throughout the
Territory during the Term.
6. DELIVERY
6.1 The Company undertakes to deliver to the Distributor the Delivery
Materials together with a schedule of contractual screen and
advertising credits in respect of each Film.
7. CREDITS AND NOTICES
7.1 The Distributor undertakes to follow strictly the schedule of credits
provided by the Company in connection with advertising and publicity
material relating to the Films and undertakes that all advertising
material made or created or used by the Distributor in connection with
the Films shall correspond in all respects to the schedule of credits
provided by the Company. The Distributor shall procure that the credits
contained in the end titles of each of the Films are not shortened or
altered in any way and are shown on each exploitation of each of the
Films in the Territory during the Term.
7.2 The Distributor shall have the right to insert before the main and
after the end titles of each of the Films the audio-visual logo of the
Distributor and shall also have the right to insert the visual logo and
the words "distributed by Xxxxxxxxxxxxxxx.xx" or "Brought to you by
Xxxxxxxxxxxxxxx.xx" in any advertising in connection with the Films.
8. RECORDS
8.1 The Distributor undertakes at all times throughout the Term and for the
period of 6 years after expiry of the Term to maintain full and
accurate books and records for the account relating to the exploitation
of the Rights of the Films in the Territory.
9. STATEMENTS AND AUDITS
9.1 The Distributor undertakes to provide the Company with annual reports
of Gross Receipts derived from exploitation of the Theatrical Rights
and the Non-Theatrical Rights in each Film during the Term. Such
statements shall itemize all information available to the Distributor
including terms of exhibition agreements and expenses.
9.2 Each statement referred to in Clause 9.1 shall be delivered to the
Company within 30 days from the end of the period to which it relates
accompanied by payment in full made to the Company in accordance with
Clause 4.1.
10. TITLE
10.1 Title in and to all Delivery Material and Publicity Material shall at
all times remain in the Company and the Distributor shall not acquire
any right, title or interest in or to the goodwill relating to the
Films, their characters or their names or the name of the Company or
any trade names or trade marks of the Company.
11. DETERMINATION
11.1 It shall constitute the repudiation by the Distributor of its
obligations under this Agreement and the Company shall be entitled to
accept such repudiation determining the Distributor's rights under this
Agreement by written notice if:
(a) the Distributor fails to pay any amount due under this
Agreement in full within 5 business days of its due date and
such failure is not remedied within 3 days of receipt of
written notice;
(b) the Distributor is in breach of any material term of this
Agreement which is incapable of remedy or if capable is not
remedied within 7 days of the Distributor receiving notice of
such breach from the Company;
(c) any of the Distributor's representations shall prove to have
been incorrect when made or become materially incorrect and
the Company's rights and entitlements under this Agreement
are materially and adversely affected;
(d) the Distributor is declared or becomes insolvent; or
(e) the Distributor shall abandon or announce that it intends to
abandon the business of distributing films.
12. EFFECT OF DETERMINATION
12.1 Upon determination under Clause 11 of the Distributor's rights under
this Agreement:
(a) the Company may without notice retake possession of all
Delivery Material and Publicity Materials;
(b) without prejudice to any right to damages of the Company, the
Distributor will immediately pay to the Company all sums
owing or accruing due to the Company under this Agreement;
and
(c) the Distributor shall assign to the Company all its right,
title and interest in the Films (including the right to
receive any money payable pursuant to licensing of the
Films).
13. ASSIGNMENT
13.1 The Rights granted in this Agreement may be distributed by the
Distributor to its licensees, assignees, subsidiaries and associated
companies, without requiring the consent of the Company.
14. OPTION
14.1 The Company grants the Distributor the option to purchase all of the
interest and copyright in Daxula including expressly without limitation
all merchandising rights, novelisation rights, sound track recording
rights, music publishing rights, publishing rights and any other rights
of whatever nature in or to any underlying rights or elements contained
in the Films. (the "Option").
14.2 The Option is available for exercise by the Distributor any time prior
to January 5, 2003.
14.3 The Option may be exercised by issuing to the Company 2,000,000 shares
of Xxxxxxxxxxxxxxx.xx, Inc. or a number of shares equal to 10% of the
issued and outstanding shares of the Distributor, whichever is more.
14.4 Upon receiving written notice and confirmation that the Option has been
exercised in accordance with this Agreement, the Company shall sign
whatever documents are necessary to fully transfer the copyright in and
to Daxula, its underlying characters and plots.
15. MISCELLANEOUS
15.1 If any provision of this Agreement shall be prohibited by or adjudged
by a court or tribunal to be unlawful, void, or unenforceable, such
provision shall to the extent required be severed from this Agreement
and rendered ineffective as far as possible without modifying the
remaining provisions of this Agreement and shall not in any way affect
the validity of this Agreement.
15.2 This Agreement contains the full and complete understanding between the
parties and supersedes all prior arrangements and understandings wither
written or oral and may not be varied except by an instrument in
writing signed by all of the parties to this Agreement.
15.3 No failure or delay on the part of any parties to this Agreement
relating to the exercise of any right, power, privilege provided under
this Agreement operate as a waiver of such right, power, privilege, or
remedy or as a waiver of or partial exercise of such or any other
right, power, privilege or remedy provided in this Agreement.
AS WITNESS the hands of the authorized representatives of the parties the 11th
day of October, 2000.
BACCHUS ENTERTAINMENT LTD. per
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
President
XXXXXXXXXXXXXXX.XX, INC. per
/s/ Xxxx Xxxxxxxxxxx
------------------------------ ------------------------------
Xxxx Xxxxxxxxxxx
Executive Director
SCHEDULE 1
Delivery Material
1. digital video tapes of the Films in their entirety
Publicity Material
2. digital video tapes of rough footage
SCHEDULE 2
Distribution Expenses
Website To $50,000
CD-Rom To $50,000
SCHEDULE 3
Films
1.
Title: Daxula - episode 1, the Fool
Time: 5 minutes, 30 seconds
Language: English
Format: Digital Video
Director: Xxxxx Xxxxx
Producer: Xxxxx Xxxxx
Writers: Cat Xxxxxxxxxx and Xxxx Xxxxxx
Stars: Maritama Xxxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxxx
2.
Title: Daxula - episode 2, the five of pentacles
Time: 5 minutes, 30 seconds
Language: English
Format: Digital Video
Director: Xxxxx Xxxxx
Producer: Xxxxx Xxxxx
Writers: Cat Xxxxxxxxxx and Xxxx Xxxxxx
Stars: Maritama Xxxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxxx
SCHEDULE 4
RECOUPMENT OF MINIMUM GUARANTEE
Daxula, Episode 1 US$5,000
Daxula, Episode 2 US$5,000
