[EXHIBIT 10.1.22]
FINANCING, PRODUCTION AND DISTRIBUTION AGREEMENT
"Tournament of Dreams" Dated: As of July 25,2003
This Financing, Production and Distribution Agreement (this
"Agreement") is entered into between CMX PRODUCTIONS, INC.
("CMX") and MIRACLE ENTERTAINMENT, INC. ("MEI") in connection
with the Picture (as defined below). For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Picture: The "Picture" shall (i) be based on the screenplay
entitled "Tournament of Dreams" written by Xxx Xxxxxxxx ( any and
all drafts and version thereof, now or hereafter existing, and
all characters contained therein, the "Screenplay"), (ii) be
directed by Xxx Xxxxxxxx (or a mutually approved replacement) and
produced by Xxxx Xxxx ("Xxxx") and Xxx Xxxxxxx ("Xxxxxxx"), (iii)
be a first-class theatrical feature-length color 35mm live-action
motion picture suitable for worldwide theatrical release (with
its initial theatrical release to take place in the U.S.), (iv)
have a running time of not less than 93 nor more than 105
minutes, inclusive of main and end titles, and (v) shall qualify
for an MPAA rating no more restrictive than "R".
2. Financing: CMX shall have no obligation hereunder unless and
until the following conditions precedent have been satisfied: (i)
CMX receives a fully executed copy of this Agreement and a copy
of the preliminary "all in" budget for the Picture (which budget
shall not exceed US$1.5 Million), (ii) CMX approves the chain-of-
title for the Picture, (iii) CMX receives a fully executed
security agreement (in form and substance reasonably acceptable
to CMX) and related financing statements relating to the Picture
(i.e., CMX must be granted a first priority security interest in
the Picture and all underlying materials as collateral for MEI' s
obligations hereunder, including without limitation, MEI's
obligation to pay to CMX any and all sums due hereunder), and
(iv) CMX receives a fully executed copy of an agreement between
MEI and a third party, pursuant to which such third party is
unconditionally and irrevocably committed to provide adequate
advertising funding for the distribution of the Picture
(collectively, the "Conditions Precedent"). Upon satisfaction of
the Conditions Precedent and provided MEI is not in material
default hereunder, CMX shall finance the approved Budget as
follows: (i) One Hundred Fifty Thousand Dollars (US$150,000)
payable upon execution of this Agreement solely for use by MEI
for reasonable, actual out-of-pocket third party pre-production
costs directly related to the Picture (including budgeting and
engaging Xxx Xxxxxxxx and other key personnel [ e.g., casting
director and production assistants] mutually approved by the
parties); and (ii) following (a) CMX's receipt of fully executed
copies of a completion bond agreement and a collection account
management agreement relating to the Picture, in each case in
form and substance reasonably acceptable to CMX, and proof of
unconditional and irrevocable commitments from the Picture's
director and at least two (2) lead cast members, (b) CMX's
approval of the "all in" budget for the Picture (which budget
shall not exceed US$1.5 Million) (the "Budget") and the
production schedule for the Picture, ( c) the parties mutual
approval of the "all in" print and advertising budget for the
distribution of the Picture (the "P&A Budget"), and (d) CMX
receipt of proof of an unconditional and irrevocable commitment
for the financing of the P&A Budget, the balance of the approved
Budget will be payable pursuant to a cash flow
schedule mutually agreed by the parties in writing. CMX may
provide a portion of its funding obligation by means of goods and
services required for the production of the Picture. The value of
any such goods and services shall be mutually approved by the
parties after good faith negotiations.
3. Production: MEI shall be responsible for (i) developing,
producing and completing the Picture in accordance with the
approved Budget, the approved production schedule, and this
Agreement, (ii) causing the Picture to be available for delivery
to Licensees (as defined below) upon completion but in any case
no later than December 31,2004 (the "Delivery Date"), subject to
an extension of up to thirty (30) days resulting from Force
Majeure (as defined below), (iii) causing the Picture to be
delivered to Licensees in accordance with this Agreement and any
Exploitation Agreement, and (iv) any Budget overages, except
those resulting from CMX's specific request and approved by CMX.
The Picture shall start production on or about October 13,2003.
MEI shall meaningfully consult with CMX on all key creative
decisions relating to the Picture with MEI having the final
decision (but MEI shall not act in such a manner as to
arbitrarily overrule any positions expressed by CMX); provided,
however, that the parties shall mutually approve the two (2) lead
cast members, any replacement director and any third-party
producers. CMX shall have final approval over the Budget
(including each line item therein) and any changes thereto. IfMEI
(or any ofits affiliates) furnishes any ofits own facilities,
materials, services or equipment in connection with the Picture,
then the best available rate shall apply. MEI shall use good
faith efforts to make use of CMX owned and/or operated production
facilities in connection with the Picture, provided such
facilities are available at the time required by MEI and are at
rates no higher than comparable facilities otherwise available to
MEI. The copyright in and to the Picture and all underlying
materials shall be owned 50% CMX and 50% MEI. In connection with
the foregoing, MEI irrevocably assigns to CMX in perpetuity, by
means of a present and future assignment of copyright, a one-half
undivided interest in the worldwide copyright (and all related
extension, renewals, revivals and resuscitations) in and to the
Picture and all underlying materials (including, without
limitation, the Screenplay).
4. Sales Agent/Distribution: MEI shall serve as the sole and
exclusive worldwide sales agent for the Picture, and in such
capacity shall (i) arrange for and negotiate the sale and/or
license of the Picture (and all ancillary rights relating
thereto) worldwide to buyers, licensees, broadcasters,
exhibitors, distributors and other third parties (collectively
"Licensees"), (ii) supervise the distribution, marketing, and
advertising of the Picture worldwide, and (iii) supervise the
collection and payment of revenues derived from exploitation of
the Picture (and all ancillary rights relating thereto)
worldwide. For the avoidance of doubt, MEI will act as a sales
agent and will not be a licensee or grantee. The parties shall
mutually approve any and all agreements entered into with
Licensees in connection with the Picture (and any ancillary
rights relating thereto) (each, an "Exploitation Agreement"). Any
Exploitation Agreement not approved by CMX shall be null and
void. All sums payable by third parties pursuant to each
Exploitation Agreement and or otherwise in connection with the
Picture shall be paid to a collection account managed by a third
party collection agent (e.g., Fintage House) mutually approved by
the parties (the "Collection Account"). Each Exploitation
Agreement shall contain irrevocable instructions with respect to
the foregoing. If MEI (or any of its subsidiaries or affiliates)
receives any Gross Receipts (as defined below), MEI shall cause
such sums to be promptly paid over to the Collection Account. MEI
agrees to use its good faith efforts to sell and/or license the
Picture (and all ancillary rights relating thereto) in a manner
which will
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maximize the revenues therefrom. MEI does not guarantee the
performance of any Exploitation Agreement, and shall not be
liable or responsible to CMX for failure to collect any amount
becoming payable under the terms of any Exploitation Agreements,
but MEI will use commercially reasonable efforts to enforce all
Exploitation Agreement and collect all sums due thereunder .
5. Marketing/Distribution Expenses: The Budget shall include an
advance of Thirty Five Thousand Dollars ($35,000) for use by MEI
to cover its reasonable, actual, direct, out-of-pocket (and non
reimbursable) costs relating to the sale, marketing and
distribution of the Picture ("Marketing/Distribution Expenses").
Any portion of such advance not used within six (6) months
following completion of the Picture shall be promptly returned to
CMX. MEI shall incur and advance additional
Marketing/Distribution Expenses up to an additional Forty
Thousand Dollars ($40,000) (i.e., a total of Seventy Five
Thousand Dollars ($75,000) for Marketing/Distribution Expenses).
Any Marketing/Distribution Expenses in excess of Seventy Five
Thousand Dollars ($75,000) shall be mutually approved by the
parties. Marketing/Distribution Expenses shall be recovered as
provided in Paragraph 6 below.
6. Distribution of Gross Receipts: "Gross Receipts" means (i) (A)
any and all sums received by or credited to the Collection
Account or MEI (or its subsidiaries and/or affiliates) in
connection with the worldwide exploitation of any and all rights
(including, without limitation, all ancillary rights) in and to
the Picture and all underlying rights therein (including, without
limitation, any subsequent productions based on the Picture
and/or the Screenplay), in all media now known or hereafter
devised, in any and all languages, in perpetuity (including
without limitation, all sums payable by Licensees pursuant to
Exploitation Agreements), and (B) any and all tax subsidies,
rebates, benefits, grants or similar payments relating to the
Picture, less (ii) only actual fees and expenses paid in
connection with the Collection Account, and any residuals and/or
other reuse payments required by any applicable guild or
collective bargaining agreement. Gross Receipts shall be
distributed in the following order of priority:
a) In regard to Gross Receipts derived from exploitation in the
U.S.:
i. On a pro rata pari passu basis, (A) Ten Percent (10%) of Gross
Receipts in perpetuity to MEI as a sales agent fee; (B) Ten
Percent (10%) of Gross Receipts to CMX in perpetuity as a
financing fee; and (C) Eighty Percent (80%) of Gross Receipts to
(1) the financier of the U.S. prints for the Picture (the "Print
Financier") until the Print Financier has received an amount
equal to One hundred Fifty Percent (150%) of its investment in
such prints (CMX shall have the first opportunity and last
refusal right to be the Print Financier), and (2) the financier
of the U.S. advertising for the Picture (the "Advertising
Financier") until the Advertising Financier has received an
amount equal to One hundred Fifty Percent ( 150%) of its
investment in such advertising;
ii. After the Print Financier and Advertising Financier have been
paid in full in accordance with Paragraph 6.a)i. above, on a pro
rata pari passu basis, (A) Seventy Percent (70%) of Gross
Receipts to CMX
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until CMX has recouped from the percentages set forth in this
paragraph 6.a).ii. and Paragraph 6.b)iii. below an amount equal
to One Hundred Fifty Percent (150%) of its investment in the
Picture (including, without limitation, the Budget, any overages
paid by CMX and any Marketing/Distribution Expenses paid by CMX);
(B) Five Percent (5%) of Gross Receipts to the Print Financier in
perpetuity; and (C) Five Percent (5%) of Gross Receipts to the
Advertising Financier in perpetuity; and
iii. After CMX has been paid in full in accordance with Paragraph
6.a)ii above, on a pro rata pari passu basis, (A) Thirty Five
Percent (35%) of Gross Receipts to CMX in perpetuity; and (B)
Thirty Five Percent (35%) of Gross Receipts to MEI in perpetuity.
b) In regard to Gross Receipts derived from exploitation
throughout the World except the U.S.:
i. On a pro rata pari passu basis, (A) Fifteen Percent (15%) of
Gross Receipts in perpetuity to MEI as a sales agent fee; (B)
Fifteen Percent (15%) of Gross Receipts to CMX in perpetuity as a
financing fee; and (C) Seventy Percent (70%) of Gross Receipts to
CMX until CMX has recouped from the percentages set forth in this
Paragraph 6.b).i. and Paragraph 6.a)ii. above an amount equal to
One Hundred Percent (100%) of its investment in the Picture
(including, without limitation, the Budget, any overages paid by
CMX and any Marketing/Distribution Expenses paid by CMX);
ii. After CMX has been paid in full in accordance with clause (C)
of Paragraph 6.b)ii above, Seventy Percent (70%) of Gross
Receipts to MEI until MEI recoups an amount equal to any
Marketing/Distribution Expenses paid by MEI in excess of Thirty
Five Thousand Dollars ($35,000) (i.e., up to a maximum recoupment
amount of Forty Thousand Dollars (US$40,000)); and
iii. Thereafter, Seventy Percent (70%) of Gross Receipts shall be
paid to CMX in perpetuity.
7. Third-Party Contingent Payments: All deferrals, bonuses, third
party participations and other contingent payments (collectively,
"Contingent Payments") shall be the sole responsibility of MEI
and shall be borne solely out of MEI's share of Gross Receipts.
8. Credits: CMX shall be accorded a "Presented By" credit (along
with its logo) on screen in the main titles on a separate card
and in paid ads (including excluded ads where any other
presentation or producer credit is so accorded, other than
congratulatory ads naming only the honoree), in each case in a
size no smaller than any other presentation or producer credit
accorded. In addition, two (2) individuals designated by CMX
shall be accorded an Executive Producer credit on screen in the
main titles on a first position shared card (shared only with
each
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other) and in paid ads (including excluded ads where any other
presentation or producer credit is so accorded, other than
congratulatory ads naming only the honoree), in each case in a
size no smaller than any other producer credit accorded.
9. Statements/Audit Rights:
(a) Statements. Commencing upon the first receipt of Gross
Receipts by the Collection Account and/or MEI (or any of its
subsidiaries or affiliates) and continuing for the first eighteen
(18) months thereafter, within thirty (30) days of the end of
each month, MEI shall render to CMX a statement together with any
sums due thereunder, setting forth in reasonable detail, all
Gross Receipts received, by source (as well as the amount of each
contract and the balance yet to be paid), recoupable expenses,
interest earned and permitted fees (including showing the
cumulative amount of deferred and unpaid fees and expenses, if
any), the breakdown of the distribution of such Gross Receipts,
and any other information reasonably required by CMX. Such
statements shall be rendered quarterly thereafter.
(b) Copies of Third Party Accountings. MEI shall promptly deliver
to CMX, upon MEI's receipt of same, complete and accurate copies
of all accountings and evidence of payment received by or on
behalf of MEI (and/or the Collection Account) with respect to any
Exploitation Agreements, including, but not limited to, all third
party accounting statements, checks, wire transfer notice or
other remittance notice in any way relating to any Exploitation
Agreements or otherwise relating to the Picture.
(c) Audit Rights. MEI will maintain at its principal place of
business in Los Angeles County, California, complete and accurate
books and records relating to Gross Receipts and the Picture
(including, without limitation, sales, expenses and credits).
Upon at least two (2) weeks advance written notice, during normal
business hours and not so as to materially disrupt normal
business activities, MEI will permit CMX, or an independent
certified public accountant designated by CMX, to make an
examination, at CMX's expense, and to audit, inspect and copy all
of the books and records of MEI solely relating to the Picture
for the purpose of verifying the amounts remittable to CMX
pursuant to this Agreement, and such other information relevant
to this Agreement. CMX may exercise such audit and inspection
rights not more frequently than once during each calendar year
and any such audit shall be completed within a reasonable period
of time. If an audit results in a discrepancy of Five Percent
(5%) or more, then MEI shall pay the audit costs. Any payments
required to be made by MEI following any audit will be subject to
interest at Prime plus 2% calculated from the date such payment
was originally due through the date of actual payment.
(d) Foreign Funds. With respect to any Gross Receipts received in
foreign funds, such funds shall be converted into United States
currency at the time of receipt. The rate of exchange with
respect to any such funds shall be the Wall Street Journal rate
of exchange prevailing and available to Collection Agent at the
time of receipt. If the transmission of any Gross Receipts from
any countries or territories to the Collection Agent is prevented
by embargo, blocked currency regulations or other restrictions,
then, if CMX so requests by giving MEI written notice to such
effect, MEI shall (to the extent permitted under the laws of any
country wherein such monies are blocked or frozen) cause CMX's
share of Gross Receipts to which CMX would be entitled upon
transmission to the Collection Agent to be deposited in
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CMX's name (or in such name as CMX may designate) in any bank or
other depository designated by CMX in such territory or country
or in another country not blocked (and all interest from such
account shall belong to CMX). Such deposit will, for the purposes
of this Agreement, be deemed payment to CMX of the amount
deposited (computed at the rate of exchange quoted in The Wall
Street Journal at the time such deposit is made) and MEI shall
have no further liability to CMX in connection with any monies so
deposited.
10. Indemnity: MEI shall defend, indemnify and hold harmless CMX
(including its officers, directors, partners, owners,
shareholders, employees and agents) against any and all third
party claims, expenses (including, without limitation, reasonable
outside attorneys' fees and costs) and liabilities arising out of
any breach of any of MEI' s obligations, representations or
warranties set forth in this Agreement and/or from the
development, production, promotion, distribution and/or
exploitation of the Picture and/or any rights therein.
CMX shall defend, indemnify and hold harmless MEI (including its
officers, directors, partners, owners, shareholders, employees
and agents) against any and all third party claims, expenses
(including, without limitation, reasonable outside attorneys'
fees and costs) and liabilities arising out of CMX' s breach of
any of its obligations, representations or warranties set forth
in this Agreement other than those claims covered by MEI's
indemnity obligation and/or claims arising from MEI's negligence.
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11. Delivery: MEI shall cause to be available for delivery to
Licensees on or before the Delivery Date all of the delivery
items set forth in Exhibit "A" attached hereto and incorporated
herein by this reference. The completion bond shall provide for
delivery of all such delivery items listed on said Exhibit "A".
The laboratory shall be mutually selected by the parties. CMX
shall have the right to inspect and examine the delivery
materials.
12. Miscellaneous:
(a) Any disputes arising between the parties concerning this
Agreement, interpretation thereof or otherwise related hereto,
shall be settled by binding AFMA arbitration in Los Angeles,
California. Judgment on any award by the arbitrator against any
party may be entered in any court having jurisdiction thereof.
All costs of the arbitration, including outside attorneys' fees
and other out-of-pocket expenses of the parties, whether or not
such expenses might be deemed recoverable costs of litigation
under the California Rules of Court, may be awarded or
apportioned by the arbitrator to the party or parties that
prevail in the arbitration. Each party shall pay its own
attorneys' fees and expenses pending the allocation thereof in
the award to the prevailing party or parties.
(b) The parties agree to execute and deliver such further
documents and instruments consistent herewith as may be
reasonably necessary or desirable to evidence, effectuate or
confirm this Agreement, and any of the terms and conditions
hereof. If either party fails or refuses to execute or deliver to
the other party any such documents or instrument within five (5)
business days after delivery of any such document or instrument
and notice requesting the execution and delivery thereof, the
failing or refusing party hereby appoints the other party ( or
its designee) as its attorney-in-fact, with full power of
substitution and with the right, but not the obligation, to do
any and all acts reasonably 6neccssary to execute and deliver
such instrument or
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document, in the name and on behalf of the failing or refusing
party, which appointment being coupled with an interest, is
irrevocable. The party exercising its power of attorney set forth
in this paragraph shall promptly provide the other party copies
of any documents so executed.
(c) MEI hereby represents and warrants to CMX, and covenants
that: (i) MEI has full authority to enter into and completely
perform this Agreement and to grant the rights granted herein,
and MEI owns and controls all rights (including, without
limitation, the copyright) in and to the Screenplay and all
underlying materials relating thereto; (ii) there are no existing
or threatened claims or litigation relating to the Picture or any
literary or other materials incorporated in the Picture or upon
which the Picture is based, or which would adversely affect or
impair MEI's ability to completely perform under this Agreement;
(iii) MEI has not sold, assigned, transferred or conveyed and
will not sell, assign, transfer or convey, to any party, any
right, title or interest in and to the Picture or any part
thereof or any underlying rights (including, without limitation,
the Screenplay) inconsistent with the terms of this Agreement,
and MEI has not and will not authorize any other party to
exercise any right or to take any action which will derogate from
or compete with the rights herein granted or purported to be
granted to CMX; (iv) no element of the Picture, nor the exercise
of any of the rights in the Picture does or will (a) defame any
third party, or (b) infringe any copyright, trademark, right of
ideas, patent or any other property right or other right of any
third party; (v) MEI shall promptly discharge, when due, all
supplemental market, royalty or other residual payments and
Contingent Payments; (vi) there are, and will be, no claims,
liens, encumbrances, limitations, or restrictions of any nature
relating to the Picture or any of the rights therein, other than
customary liens in favor of Guilds; (vii) MEI will have, by the
Delivery Date, fully paid, satisfied, cured or discharged at the
time due or required all costs of producing and completing the
Picture and all claims and rights with respect to the use,
distribution, performance, exhibition and exploitation of the
Picture, and any music contained therein and any other payments
of any kind required to be made in respect, or as a result, of
any use of the Picture; (viii) MEI owns and controls, or will by
the Delivery Date, without any limitations or restrictions
whatsoever, all motion picture performance, synchronization,
mechanical license and all other rights in and to the Picture and
all subsidiary rights embodied therein and has obtained all
necessary licenses required for the exhibition, performance,
duplication, distribution, marketing and exploitation of the
Picture (including the music contained therein) throughout the
world in perpetuity, for any and all purposes and by every means,
method and device now or hereafter known; and, (ix) MEI agrees
that it shall, upon request, furnish CMX with copies of all
agreements and documents upon which any of the warranties and
representations referred to herein are based.
(d) CMX represents and warrants to MEI, and covenants that: (i)
CMX has full authority to enter into and completely perform this
Agreement; and (ii) there are no existing or threatened claims or
litigation which would adversely affect or impair CMX's ability
to completely perform under this Agreement.
(e) Notwithstanding anything contained herein to the contrary,
both parties shall be excused from any delay in performance
hereof for the period such delay is caused by any extraordinary
cause beyond its control, such as fire, earthquake, flood,
epidemic, accident, explosion, casualty, strike, lockout, labor
controversy, riot, civil disturbance, act of public enemy,
embargo, war, act of God, governmental ordinance or law, the
issuance of any executive or judicial order, any failure or delay
in respect to the electrical or sound equipment or apparatus,
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or by any laboratory, any failure, without fault, to obtain
material, transportation, power, or any other essential thing
required in the conduct of its business or any similar causes (
each, a "Force Majeure") Each party shall use reasonable
diligence to avoid such delay or default and to resume
performance under this Agreement as promptly as possible after
such delay.
(I) CMX may, after it has satisfied its funding obligations
hereunder, assign, transfer or sublicense any of its rights under
this Agreement, but no such assignment, transfer or sublicense
will relieve CMX of its obligations under this Agreement, unless
to an entity which acquires all or substantially all of CMX's
assets or into which CMX is merged. MEI cannot assign this
Agreement or any of its obligations hereunder without the
approval of CMX.
(g) In connection with the indemnities provided above, each party
agrees that, upon receipt or presentation of any claim or
notification of the institution of any action with respect to
which indemnification might be required hereunder, such party
will promptly notify the other party in writing thereof. With
respect to any such indemnification, the indemnitor shall have
the right to control the course and conduct of such defense. Any
such indemnitee shall have the right, in its discretion and at
its sole expense, to retain independent counsel and to
participate in any such defense. If an indemnitor fails to
promptly assume the defense of any claim, the indemnitee may do
so and the indemnitor shall promptly reimburse the indemnitee for
all costs and expenses (including but not limited to outside
attorneys' fees and disbursements) incurred in connection
therewith as such are incurred; in such case the indemnitee shall
not settle or compromise any claim without the consent of the
indemnitor, such consent not to be unreasonably withheld. All
indemnity obligations contained herein shall survive the
expiration or termination of this Agreement.
(h) MEI shall provide a customary "Errors and Omissions" policy
of insurance for the Picture, in form and coverage to CMX's
reasonable satisfaction, naming CMX as an additional insured.
Such policy shall be in place prior to the initial exhibition of
the Picture in any medium and shall be maintained for a period of
at least three (3) years following such initial exhibition. CMX
shall also be covered by MEI's general liability insurance policy
in connection with the Picture.
(i) All covenants, representations, and warranties contained
herein shall be true and correct at the time of the execution of
this Agreement, shall be deemed continuing, and shall survive the
expiration or termination of this Agreement.
0) The parties intend to formalize this Agreement more
specifically in a long form agreement incorporating the terms
contained herein as well as other terms and conditions as are
customary for agreements of this nature (such other terms and
conditions to be negotiated in good faith). Pending execution of
any such long form agreement, if ever, this Agreement when signed
by both parties, shall constitute a binding agreement between the
parties in regard to the subject matter hereof.
(k) This Agreement shall be construed in accordance with the laws
of the State of California applicable to agreements executed and
fully performed herein and may be signed in counterparts.
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(1) MEI guarantees that the Picture will be released theatrically
in the U.S.
(m) Notices: All notices shall be in writing and shall be sent to
the parties at the following addresses:
If to MEI: If to CMX:
Miracle Entertainment, Inc. CMX Productions, Inc.
0000 Xxxxxxxx Xxxxxxxxx 0000 Xxxxx Xxxxxx
Xxxxx 0000 Xxx Xxxxx, XX 00000
Xxx Xxxxxxx, XX 00000 Fax No.: (000) 000-0000
Fax No.: (000) 000.0000
With a courtesy copy to: With a courtesy copy to:
Xxxxxx X. Xxxxxxxxx, Esq. KMZ Xxxxxxx
0000 X. Xxxxxxxxx Xxxxxxxxx 0000 Xxxxxxx Xxxx Xxxx,
00xx Xxxxx Xxx Xxxxxxx, XX 00000
Xxx Xxxxxxx, XX 00000
Attn: Rik Toulon, Esq.
Fax No.: (000) 000-0000
(n) If either party determines that the other is in breach of a
material obligation hereunder, it shall give written notice to
such other party and the offending party shall have a period of
Thirty (30) days to cure any such breach (such cure period shall
be Ten (10) business days in regard to breaches that claim only a
failure to pay money). In the event the offending party does not
cure such breach within such time, the noticing party shall have
the right to terminate this Agreement. Notwithstanding the
foregoing, following CMX's satisfaction of its funding
obligations hereunder, if either party breaches any material
representation, warranty or agreement contained herein, the other
party's remedy shall be limited to an action for damages, and in
no event shall the other party have any right whatsoever to
terminate or rescind this Agreement, interfere in any way with
the distribution of the Picture and/or seek to enjoin the
distribution and exploitation of the Picture, nor shall the
rights acquired by CMX under this Agreement be subject to
revocation.
( o) Reference is made to that certain Print Fund Agreement
between the parties dated as of July 25, 2003 relating to CMX's
financing of U.S. prints for certain pictures (the "Print Fund
Agreement"). Any breach by MEI of the Print Fund Agreement will
constitute a breach hereunder.
(p) CMX will have the first opportunity to finance any Picture
produced by MEI and/or any of its subsidiaries or affiliates for
a term equal to the greater of (i) Three (3) years from the date
hereof and (ii) the term of the Print Fund Agreement. The terms
and conditions for any such financing shall be no less favorable
to CMX than those set forth herein with respect to the Picture.
Any such financing shall be pursuant to an agreement executed by
the parties in form and substance similar to this Agreement, with
any changes thereto agreed by the parties after good faith
negotiations.
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(q) The parties shall have mutually approve any and all press
releases pertaining to this Agreement and/or their involvement
with the Picture.
(f) All approvals required hereunder shall be in writing in
advance.
(s) Nothing herein will be construed to constitute a partnership
or joint venture between the parties.
(t) This Agreement constitutes the entire understanding and
agreement between the parties with reference to the subject
matter contained herein and supersedes all prior agreements,
written or oral. This Agreement may not be modified or amended
except by a subsequent agreement in writing signed by both
parties. If any provision of this Agreement shall be found to be
invalid or unenforceable, then such event or action shall not
invalidate or in any other way affect the enforceability of this
Agreement or any other provision hereof. The rights and remedies
of either party shall be cumulative and the exercise by either
party of its rights under any provision of this Agreement or its
rights under the law shall not be deemed an election of remedies.
The waiver by any party of any of the terms or provisions of this
Agreement shall not be deemed a permanent waiver nor a waiver of
any other provision hereof. This Agreement may be executed in
counterparts.
CMX PRODUCTIONS, INC.
("CMX")
By: /S/
--------------------------------
Its:
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MIRACLE ENTERTAINMENT, INC.
("MEI")
By: /S/
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Its:
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EXHIBIT A
SCHEDULE OF DELIVERY ITEMS
MEI shall cause to be available all delivery materials necessary
for the exploitation of the
Picture by Licensees or otherwise required pursuant to
Exploitation Agreements, including, without limitation, the
following:
1. COMPOSITE ELEMENTS
35mm Final Answer Print
Digital Component NTSC Video Master
Digital Component PAL Video Master
16:9 Format NTSC Video Master
16:9 Formal PAL Video Master
35mm Lo-Con Print
2. PICTURE ELEMENTS
35mm Original Negative
35mm Inter-positive (I/P) (As required)
35mm Inter-negative (I/N)
35mm Textless Background Negative
35mm Textless Background Inter-positive (IP)
3. SOUND ELEMENTS
35mm Optical Sound track
35mm Magnetic Sound track Master
35mm Magnetic Sound track Music Master and Effects (M & E)
Master DA88 Stereo Comp. (Full Mix)
DA88 Stereo, Fully Foleyed Music and Effects
4. DOCUMENTATION
Lab Access Letter or Letters
Certificate of Origin (notarized)
Chain of Title
Title Report
Motion Picture Copyright Certificate
Errors and Omissions (E&O) Insurance Certificate
Rating Certificate or Certificates
Statement of Credit Obligations
Statement of Guild Obligations
List of Persons Rendering Services
Statement of Budget and Final Top Sheet
Dialogue/Continuity Script
Final Shooting Script
Music Cue Sheets
Music Licenses
Stock Footage Licenses
5. MARKETING / PUBLICITY
Unit Photography (100 color slides minimum)
Publicity Materials (As available)
2000 - 8-1/2 x 11 four color Sell Sheets with synopsis/photos
on back
30 x 40 four color Mounted Poster
Betacam NTSC Sales Trailer
4 x 5 Textless Transparency of Key Art
300 VHS screening cassettes of the trailer and feature with
visible timecode
6. FILM TRAILER ELEMENTS
Trailer Dialogue/Continuity List
Trailer DA88/35mm
Trailer Digital NTSC Video Master (with releasable music and
clearances)
Trailer Digital P AL Video Master (with releasable music and
clearances)
35mm Negative Trims
