Contract
Exhibit
10.16
As
of
December 15, 1998
The
following
shall constitute the principal terms of a "first look" agreement between
the
parties identified below, it being the intent of the parties to enter into
a
more formal, long-form agreement with respect to the option, purchase and
sale
of any particular property (or properties) as contemplated below, which
agreement shall include the terms and conditions provided for herein (where
applicable), and such other terms and conditions
as are customary for such agreements in the motion picture industry taking
into
account the stature of Platinum Studios, LLC ("Platinum")
and Xxxxx
Xxxxxxxx Xxxxxxxxx therein (including, without limitation, accounting and
audit rights provisions, late payment financing charges, related party
transactions, etc.) to be negotiated in good faith between the
parties.
1. First
Look.
A. Dimension's
Rights. For the Term hereof (as extended,
if extended, as provided below), Miramax Film Corp. (including Dimension
Films)
(hereafter, collectively, "Dimension") shall have an exclusive "first look"
and
option to
purchase
(for the option fees and purchase prices as set forth below) any and all
properties, subject to Platinum's exclusions as set forth below, which are
solely owned and controlled by Platinum
(provided that if and to the extent any rights to any such properties are
not
solely owned and controlled by Platinum, then such rights therein as are
solely
owned and controlled by Platinum shall be subject to said "first look"),
from
the "Platinum Library" (as defined below), which Dimension desires to develop
as
a live-action feature film intended for initial theatrical release ("Feature
Film") anywhere in the universe. Upon payment of the applicable portion of
the
purchase price (as provided in paragraph 4.B. (i) below, Platinum shall assign
to Dimension (to the extent that said rights are owned and controlled by
Platinum) the sole and exclusive (subject to paragraph C.(i) below) right
under
copyright and otherwise, to develop, produce, distribute, advertise, promote
and
otherwise exploit a Feature Film based on the property purchased hereunder,
in
any language, in perpetuity '(subject to Platinum's reserved rights and
reversion right as set forth below), in any and all territories throughout
the
universe, and by any and all means and methods now or hereafter known
(including, but not limited to, Theatrical, Non-Theatrical, Television, Home
Video (encompassing videocassette, videodisc, all other forms of videograms
whether now known or hereafter devised), any computer-assisted media (including,
but not limited to, CD-ROM and similar disc systems (but not CD-I), DVD,
Internet distribution, cable-modem and any other devices or methods now existing
or hereafter devised) provided that the version of the Feature Film exploited
via any such computer-assisted media must be essentially the same version
exploited
in the other media (i.e., in a consecutive linear format and not an interactive
format) and certain allied and ancillary rights, including music, music
publishing, screenplay publishing and soundtrack rights (subject to Platinum's
reserved rights and administrative rights as set forth below) (collectively,
the "Rights"). The Rights shall also include the right to produce and exploit
Feature Film sequels, prequels and/or remakes (as such terms are customarily
understood in the motion
picture industry, i.e., with respect to sequels and/or prequels, Feature
Films
in which any of the characters appearing in
the
first Feature Film based on a property are depicted in new or different events
than those in which such characters participated
in such first Feature Film, and with respect to remakes, Feature Films in
which
the characters appearing in the first
Feature Film based on a property are depicted as participating for the most
part
in the same events in which said characters participated in such First Feature
Film) of any Feature
Film produced pursuant hereto, subject to the payment of the
applicable option fees and purchase prices and Platinum's reversion rights
as
set forth below.
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B. First
Look Submissions/Dimension Response Period.
(i) The
Parties acknowledge that the "Platinum Library"
consists of hundreds of comics, graphic novels, serializations,
storybooks, etc. During the Term (as defined in paragraph 2.C below), Platinum
shall select and present properties from the Platinum Library for Dimension's
first look consideration hereunder, provided that Platinum shall present
no less
than twenty-five (25) such properties in each year of the Term. The first
such
presentation shall consist of no less than ten
(10)
such properties. Those properties in the Platinum Library not so selected
and
presented by Platinum shall not be presented
(i.e., "pitched") by Platinum to third parties other -
than
talent (i.e., writers, directors and/or actors) during the Term, except that
Platinum shall have the right to present to any third parties those properties
that Platinum wishes to develop for
initial release in television and/or as animation (as opposed to live-action)
projects, provided that Platinum informs such parties of Dimension's Feature
Film "first look" rights hereunder with respect thereto.
(ii)' Within
ten (10) business days of Platinum's presentation
of a Platinum property to Dimension as provided above (provided that the
property in question is either an English-language property or an
English-language translation thereof is provided to Dimension by Platinum,
and,
if not, then Dimension shall have twenty (20) business days to respond)
(hereinafter, the "Dimension Response Period"), Dimension shall notify
Platinum in writing as to whether or not it will option such property hereunder.
Dimension's failure to provide any written
notice to Platinum within the Dimension Response Period (or
notice that it will not option such property) shall constitute a rejection
of
said property hereunder, giving Platinum the right to develop and/or produce
the
property elsewhere without any further obligation to Dimension; provided,
however, that Platinum shall not submit more than ten (10) properties for
Dimension's consideration hereunder within any consecutive ten (10) business
day
period (a "Bulk Submission"), unless the parties have mutually agreed in
good
faith on the time period in which Dimension must respond to the properties
included in such Bulk Submission. If Dimension notifies Platinum in writing
within the Dimension Response Period that it will option such property
hereunder, Dimension shall be obligated to pay the applicable option fee
as and
when provided for in paragraph 4 below (i.e., upon Platinum's furnishing
to
Dimension of a short- form option agreement and Dimension's approval of chain
of
title for the applicable property, subject to the additional terms and
conditions set forth in paragraph 4.A below), failing which Platinum shall
have
the right to develop and/or produce the property elsewhere without any further
obligation to Dimension.
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C. Platinum's
Reserved Rights.
(i) Platinum
hereby reserves (a) "television program
rights" (defined as the right to develop, produce, distribute, advertise,
promote and otherwise exploit any property as a television pilot,
movie-of-the-week, special or episodic series for initial exhibition in any
television medium, and not to be released theatrically unless the parties
otherwise mutually agree in writing on the terms of such theatrical exploitation
or unless and until Dimension's rights with respect to such property terminate
or revert to Platinum as provided for herein), subject to paragraph C.(ii)
and
(iii) below, (b) all print publication rights in any and all properties other
than screenplay
publishing,
subject to paragraph C.(iv) below,(c) all interactive
rights, (d) theme rights, (e) live theater and radio rights and (vi) all
animation rights, subject to paragraph C.(iii) below. Any rights not
specifically granted to Dimension herein are reserved to Platinum. Without
limiting the generality of the foregoing, Dimension hereby acknowledges and
agrees that it shall only acquire non-exclusive rights with respect to the
characters appearing in any Feature Film produced pursuant hereto, and that
Platinum shall have the right to use and exploit such characters (whether
or not
included in the original property) in connection with the exercise of any
of
Platinum's reserved (and/or reverted) rights hereunder, subject to paragraph
C.
(v) below. For the avoidance of doubt, if the property purchased by Dimension
hereunder is a serial (e.g., a comic book or strip with more than one episode,
volume or issue), Dimension's
rights to the elements appearing in the property (e.g., characters, settings,
devices, etc.) shall be negotiated in good faith as part of the long-form
option
agreement to be entered into with respect to such property pursuant hereto
(i.e., the
parties shall mutually agree on which elements of such property shall be
exclusively granted to Dimension for purposes of exercising Dimension's Rights,
subject always to Platinum's reserved rights as provided herein, and provided
that in no event shall Dimension's Rights include any elements which appear
in
the serial after the date of Dimension's purchase of such property hereunder,
all right, title and interest to which shall be reserved to Platinum). In
the
event that the parties are unable to so mutually agree with respect to such
elements, then Platinum shall have the right to withdraw said property from
this
first look agreement, and Platinum shall have the right to develop and/or
produce the property elsewhere without any further obligation to
Dimension.
(ii) other
than half-hour animated television series
rights which are addressed in paragraph C.(iii) below, the television program
rights to properties purchased by Dimension hereunder shall be subject to
a
first negotiation/first refusal right in favor of Dimension. For purposes
hereof, said first negotiation/first refusal right shall mean the following:
Platinum and Dimension shall negotiate in good faith for a period of ten
(10)
business days, and in the event that the parties cannot reach agreement within
said period on the terms and conditions of Dimension's acquisition of any
such
television program rights, then Platinum may negotiate with third parties
regarding such television program rights, but before Platinum may enter into
any
agreement with respect thereto on financial terms which are (on the whole)
equal
or less favorable to Platinum than the terms last offered by Dimension, Platinum
shall inform Dimension in writing of the principal terms of the less favorable
offer that Platinum is prepared to accept ("Acceptable offer"), and Dimension
shall have the option ("Acceptable Offer Matching Right") to acquire the
television program rights which are the subject of said Acceptable Offer
under
the same terms and - conditions set forth in the Acceptable Offer (provided
that
Dimension
shall not have to match non-financial terms which other third parties cannot
match), provided that Dimension must notify Platinum in writing of its election
to exercise such Acceptable Offer Matching Right as aforesaid within five
(5)
business days of its receipt of the terms of the applicable Acceptable offer;
otherwise, Platinum shall be free to accept the Acceptable Offer. In the
event
that Platinum does conclude an agreement for the disposition of such television
program rights with a third party pursuant to the foregoing, such agreement
must
provide for an 18 month holdback period on the exploitation of said rights
commencing from the earlier of (a) the date of the actual initial release
of the
Dimension Feature Film (in any medium) and (b) the date which is two (2)
years
from the date of the payment by Dimension of the option fee for the applicable
property hereunder.
(iii) all
half-hour animated television series rights to the properties in the Platinum
Library are reserved to Platinum, and Platinum shall be free to exploit same
in
Platinum's sole discretion without any obligation to Dimension whatsoever.
All
other animation rights to any properties purchased by Dimension hereunder
shall
be "frozen" and neither party shall have the right to exploit same unless
the
parties mutually agree otherwise in writing.
(iv) the
novelization rights with respect to any Feature Film produced pursuant hereto
shall be subject to a first negotiation/first refusal right in favor of
Dimension on the same terms and conditions as set forth in paragraph C.(ii)
above.
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(v) If,
in connection with the development and/or production of a property after
the
option and/or acquisition thereof
by Dimension hereunder, a new character is created by or at
the
direction of Dimension and/or any xecutives and/or employees
of Dimension (as opposed to an "evolution" of an original
character (or of a group or "race" of characters (e.g., "Klingons")),
such as a reverse gender or reverse race character or a character that
is
created with a reasonably discernable link between the original character
and
the evolved character (including,
without limitation, and for purposes of illustration only, a character
is
"aged", is given a new power or ability, is introduced as related to or
a part
of a family or recognized group
or
race of characters (e.g., "Supergirl", "Batgirl", etc.), the character's
name
reuses a name or part of a name such that it appears to be derived from
or
connected with the original character
(e.g., the "Xxxxxxxx Xxxxxxxx" character, which is introduced
as the son of Xxxx and Xxx Xxxxxxxx of the "Fantastic Four")), and as opposed
to
a character created by or at the direction
of Platinum and/or any executives and/or employees of Platinum ("New
Dimension-created Character"), then Dimension shall
own the rights to said character (subject to the other terms
and
conditions of this agreement), provided that Platinum shall
have the right to utilize any such New Dimension-created Character(s)
in connection with its exercise/exploitation of its reserved rights hereunder,
subject to the following: (i) with respect
to the merchandising of said character, the terms of paragraph
9 below shall apply, (ii) with respect to Platinum's exercise
of reserved publishing rights and interactive rights (including
video game rights), if the exercise thereof includes said
New
Dimension-created Character, Dimension shall be entitled to an amount equal
to
ten percent (10%) of all non-refundable, non-returnable
income received by Platinum from the exploitation of such rights (Platinum
Publishing/Interactive Gross Receipts), after Platinum's deduction "off-the-top"
from said Platinum Publishing/Interactive
Gross Receipts of a 25% distribution fee and
recoupment of all of Platinum's direct, out-of-pocket costs and
expenses incurred in connection therewith, and (iii) with respect
to Platinum's exercise of any other reserved rights to the
extent such exercise includes said New Dimension-created Character, Dimension
shall be entitled to an amount equal to ten percent (10%) of all non-refundable,
non-returnable net income received by Platinum from the exploitation of
such
rights (i.e., after recoupment by Platinum of any direct, out-of-pocket
cost and
expenses incurred, and/or direct, out-of-pocket investments made, by Platinum
in
connection therewith). Further, if and to the extent any new non-character
elements (such as a setting, a device, etc.) created by or at the direction
of
Dimension and/or any executives and/or employees of Dimension (as opposed
to by
or at the direction of Platinum and/or any executives and/or employees
of
Platinum) have identifiably unique properties or characteristics and names
(e.g., the "Starship Enterprise," the "neuralizer" used in "Men in Black"),
then
such non-character elements shall be treated as a New Dimension-created
Character for all purposes hereof, provided that new storylines and plots
created by or at the direction of Dimension and/or any executives and/or
employees of Dimension shall only receive such treatment if and to the
extent
that Platinum's exploitation thereof would otherwise constitute an infringement
of Dimension's rights under applicable copyright law. For the avoidance
of
doubt, for purposes of determining whether a new character or a new non-
character element has been created by or at the direction of Dimension
and/or
any executives and/or employees of Dimension for purposes of this paragraph
only, the existence of a "work-for- hire" or similar agreement between
Dimension
and any writer/creator
shall not be dispositive, but Platinum shall have the burden of furnishing
written evidence that such new character or new non-character element was
created by or at the direction of Platinum and/or executives and/or employees
of
Platinum (e.g., correspondence between a Platinum executive and the writer/creator
in question reflecting Platinum's instructions to said
writer/creator).
(vi)
Notwithstanding anything to the contrary herein,
in any and all events, Platinum shall have the right to use the title(s)
of,
and/or any logos (other than credit logos) created in connection with,
any
Feature Film, in connection with the exploitation of its reserved rights
hereunder, without any compensation being payable to Dimension
therefor.
D.
Platinum's Excluded Properties. The following properties and/or rights
shall not be subject to Dimension's "first look" hereunder:
(i)
any property which Platinum has developed, is developing
or hereafter develops at its U.S. (currently Xxxxxxx Hills) offices,
specifically including, without limitation, any property created by or with
Xxxxx Xxxxxxxx Xxxxxxxxx (e.g., "Cowboy & Aliens", "Ghosting",
etc.).
(ii) any
rights in any properties previously sold by Platinum to third parties (e.g.,
if
Platinum reserved sequel, remake and/or other rights in connection with the
sale
of "Cowboys and Aliens", such rights are not subject to the first look
hereunder).
(iii) any
property in which Platinum obtains any rights as a result of a pending
settlement with Crossroads Entertainment (and certain affiliated companies)
and
Xxx Xxxxxxx and certain affiliated companies.
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(iv) The
property currently entitled "Xxxxxx Y".
(v) Up
to
eight (8) properties in each of the Initial Term, the Second Term and the
Third
Term (all as defined below, and if and to the extent applicable) which Platinum
may designate, in its sole discretion, as a property to be developed as a
high-budget motion picture (i.e., with a Platinum proposed production budget
of
at least $30 Million Dollars) ("High Budget Project(s)"), provided that Platinum
shall first present such High Budget Project(s) to Dimension hereunder with
Platinum's rough budget proposal (which shall be confirmed in writing by
Platinum promptly after such presentation), and the following shall
apply:
(a) if
Dimension is not prepared to contractually commit to
acquiring/developing/producing the applicable High Budget Project in accordance
with Platinum's budget proposal (or at a higher budget) within the Dimension
Response Period, then Platinum shall be free to develop, produce and exploit
said High Budget Project(s) with one or more third parties without any further
obligation to Dimension whatsoever.
(b) if
Dimension is prepared to contractually
commit to acquiring/developing/producing the applicable High Budget Project
in
accordance with Platinum's budget proposal (or at a higher budget) within
the
Dimension Response Period, the parties will negotiate in good faith the terms
and conditions thereof for a period of- 10 business days (which 10 business
day
negotiation period shall commence no later than the last day of the Dimension
Response Period). If the parties cannot agree on such terms and conditions
within said 10 business days, then Platinum shall be free to develop, produce
and exploit said High Budget Project(s) with one or more third parties, provided
that if Platinum is willing to accept financial terms which on the whole
are
equal to or less favorable to Platinum than those last offered by Dimension,
Platinum shall offer Dimension the right to match such equal or less favorable
offer.
(vi) any
properties acquired by Platinum after the date
set
forth above, unless Dimension is prepared to contractually
commit to develop and produce said properties as an English-language production
budgeted between $14 and $30 Million and intended for general theatrical
release
in the U.S. within the Dimension Response Period and to recognize and comply
with any applicable third party entitlements or requirements of which Platinum
has notified Dimension in writing (provided that such properties shall otherwise
be subject to the terms and conditions of paragraph 1 .B.(i)
above).
2.
Term.
A. One
year from the date set forth above
("Initial Term"). The parties agree that Dimension shall option at least
one (1) property hereunder
within the first ninety (90) days of the Initial Term hereunder,
subject to
Platinum's making available to Dimension,
upon
commencement of the Initial Term hereunder, a minimum
of ten (10)
properties which are available for option under the terms
hereof. If at
the conclusion of such ninety (90) day period,
Dimension has
not optioned a Platinum property hereunder,
this agreement
shall be automatically terminated without
the need for any
further action on the part of Platinum or Dimension.
B. In
the
event that Dimension shall have either:
(i) optioned
three (3) properties from Platinum hereunder during the Initial Term,
or
(ii) commenced
principal photography (subject to events of force majeure as commonly understood
in the motion picture industry or cast or director unavailability, but only
if
such persons have previously been made "pay-or-play" in writing), and provided
that commencement of principal photography of any Feature Film shall only
count
for purposes hereof if any failure to complete production of the Feature
Film in
question is due only to events beyond the reasonable control of Dimension,
of at
least one Feature Film based on a purchased property hereunder during the
Initial Term, then the Initial Term shall automatically
be extended for an additional and consecutive twelve (12) month period ("Second
Term") under the same terms and conditions hereof. If the requirements for
such
automatic extension of the Initial Term are not fully satisfied, then this
agreement shall automatically expire at the end of the Initial Term without
the
need for any further action on the part of Platinum or Dimension, provided
that
any payments accrued and not yet paid in full to Platinum hereunder shall
remain
payable by Dimension. In the event that this agreement is extended for such
Second Term, but Dimension fails to option at least one (1) Platinum property
hereunder within the first ninety (90) days of such Second Term, then this
agreement shall be automatically terminated without the need for any further
action on the part of Platinum or Dimension, provided that any payments accrued
and not yet
paid in full to Platinum hereunder
shall remain payable by Dimension.
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C. In
the event that Dimension shall have (a) commenced
principal photography during the Second Term (subject to events of force
majeure
as commonly understood in the motion picture industry or cast or director
unavailability, but only if such persons have previously been made "pay-or-play"
in writing, and provided that commencement of principal photography of any
Feature Film shall only count for purposes hereof if any failure to complete
production of the film Feature Film in question is due
only
to events beyond the reasonable control of Dimension, of at least two (2)
Feature Films based on properties purchased hereunder, and (b) theatrically
released during the Initial Term and/or Second Term at least two (2) Feature
Films produced under this agreement on a minimum of twenty-five (25) screens
(for each such Feature Film) with respect to a foreign-language Feature Film,
and on a minimum of two hundred (200) screens in the United States with respect
to an English-language Feature Film, then the Second Term shall automatically
be
extended for an additional and consecutive twelve (12) month period ("Third
Term") under the same terms and conditions hereof. If the requirements for
such
automatic extension of the Second Term are not fully satisfied, then this
agreement shall automatically expire at the end of the Second Term without
the
need for any further action on the part of Platinum or Dimension, provided
that
any payments accrued and not yet paid in full to Platinum hereunder shall
remain
payable by Dimension. In the event that this agreement is extended for such
Third Term, but Dimension fails to option at least one (1) Platinum property
hereunder within the first ninety (90) days of such Third Term, then this
agreement shall be automatically terminated without the need for any further
action on the part of Platinum or Dimension, provided that any payments accrued
and not yet paid in full to Platinum hereunder shall remain payable by
Dimension. The Initial Term, if and to the extent extended to a Second Term
and
a Third Term as provided herein, is sometimes referred to herein as the
"Term".
3. Overhead
and
Development Funds.
A. During
the Initial Term, Dimension
shall provide Platinum with a non-accountable, non-recoupable (except as
provided in paragraphs 3.C and 5.A below) development fund ("Development
Fund")
of $150,000. The Development Fund shall be payable to Platinum in equal monthly
installments, subject to the terms of paragraph 2 above. Platinum shall have
the
right to expend the Development Fund in connection with the acquisition and
development of properties as Platinum shall determine in its sole
discretion.
B. During
the Initial Term, Dimension shall provide Platinum with a non-accountable,
non-recoupable (except as provided
in paragraph 3 .C below) contribution to Platinum's general overhead expenses
("Overhead Fund") of $250,000. The Overhead Fund shall be payable in equal
monthly installments (subject to the terms of paragraph 2 above), and shall
be
expended by Platinum in its sole discretion, provided that expenditures incurred
by Platinum in connection with any specific property after Dimension has
optioned same hereunder shall be reimbursed by Dimension to Platinum upon
submission of Platinum's invoices and accompanying "back-up" documentation
therefor and are not intended to be included in said overhead Fund.
C. Notwithstanding
that the Development and Overhead Funds
are
not recoupable from any financial entitlements of Platinum hereunder, Dimension
shall have the right to include 100% thereof in the Negative Cost of the
first
Feature Film produced pursuant hereto, and thereafter shall apportion such
Development and Overhead Funds equally among the Negative Cost of all Feature
Films produced pursuant hereto (e.g., if two such Feature Films are produced,
then 50% thereof shall be included in the Negative Cost of each such Feature
Film, and so on).
4. Option/Purchase
Prices.
A. In
consideration for a two (2) year option to acquire
the Rights to each property which Dimension elects to option in the Initial
Term
hereunder, the option fee shall be $300,000, payable upon execution of a
mutually approved short- form-option agreement and Dimension's approval of
chain
of title (provided
that (a)
such approval may not be unreasonably withheld, (b)
if no written objection thereto is furnished by Dimension
to Platinum within seven (7) business days of Platinum's submission thereof
to a
Dimension business affairs executive, said chain of title shall be deemed
accepted by Dimension for all purposes hereof, and (c) if any such written
objection is so timely furnished by Dimension and Platinum shall not be able
to
cure the deficiency specified by Dimension to Dimension's reasonable
satisfaction within fifteen (15) business days of Platinum's receipt of said
notice, Platinum shall have the right to exclude said property front this
agreement and to offer same to third parties, provided that (i) Platinum must first
notify
Dimension in writing of its intent to do so, and Dimension shall have a three
(3) business day period from its receipt of said notification to accept said
chain of title for purposes hereof and to pay the applicable option fee,
and
(ii) if the chain of title that Platinum intends to submit to a third party
is
materially different from that previously submitted to Dimension, Platinum
must
first submit the materially different chain of title to Dimension, which
submission shall be treated in the same manner as an initial submission of
chain
of title and all of the foregoing provisions shall apply with respect to
such
second submission, except that Dimension shall only have five (5) business
days
to review same). The applicable option fee for the
Rights to properties optioned in the Second Term if any, of the
agreement shall be $400,000 and the option fee for properties optioned in
the
Third Term, if any, of the agreement shall be $550,000 (all payable as provided
above).
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B. In
consideration for the acquisition of the Rights to
each
property which Dimension elects to purchase hereunder, Platinum shall be
paid an
amount equal to five percent (5%) of the amount by which such Feature Film's
final direct negative cost (excluding only overhead, third party bond fees
(if
any), unspent contingency and direct, out-of-pocket financing costs, but
inclusive of any fixed, as opposed to contingent, deferments) ("Negative
Cost"),
as certified to Platinum by the completion guarantor for the applicable Feature
Film, or if there is no such Guarantor, by an appropriate executive of Dimension
(provided that in all events Platinum shall have customary audit rights with
respect to such Negative Cost) exceeds $2,000,000 (no cap shall exist with
respect to the foregoing), which amount shall be payable to Platinum as
follows:
(i) one
half
of said sum shall be calculated based on the "all-in" final production budget
("Budget") approved by Dimension for such Feature Film (which Budget shall
be
furnished to Platinum no later than upon commencement of principal photography
thereof), and paid to Platinum no later than upon commencement of principal
photography of said Feature Film, and the Rights to the applicable property
shall then vest with Dimension only upon the payment to Platinum of such
amount,
and
(ii) the
balance of said sum shall be calculated based on the Negative Cost and paid
to
Platinum within fifteen (15) business days of Platinum's receipt of the Negative
Cost certification for such Feature Film, which certification shall be provided
to Platinum within thirty (30) days of complete. delivery to Dimension of
said
Feature Film, and in any and all events such certification must be provided
and
the applicable payment made to Platinum prior to the earlier of (a) the date
of
the initial release or screening of such Feature Film (including in film
festivals and press screenings) in any media, and (b) the date which is the
two
year anniversary of the commencement of principal photography of such Feature
Film.
C. The
option fees with respect to the Rights to any Feature
Film sequels, prequels and/or remakes to any of the properties purchased
hereunder shall be 150% of the applicable option fees payable for the original
property, which option fees shall be payable to Platinum no later than
commencement of principal photography of the sequel, prequel and/or remake
in
question, subject to paragraph 5.B below. The purchase price for the Rights
to
such Feature Film sequels, prequels and/or remakes shall be calculated and
paid
in the same manner as the purchase
price
for
the first Feature Film as provided in paragraph 4.B above.
5.
Reversion.
A. In
the
event that Dimension has optioned a Platinum property hereunder and not
commenced principal photography of a Feature Film based thereon within the
two
(2) year period following the option thereof (subject to events of force
maj
xxxx as commonly understood in the motion picture industry or cast or director
unavailability, but only if such persons have previously been made "pay-or-play"
in writing, and provided, however, that commencement of principal photography
of
any Feature Film shall only count for purposes hereof if any failure to complete
production of the Feature Film in question is due only to events beyond the
reasonable control of Dimension), then the Rights to such property shall
revert
to Platinum, subject to a lien in Dimension's favor in an amount equal to
that
portion of the Development Fund (if any) which was used by Platinum to
acquire/develop the property in question, plus interest thereon in the amount
of
prime plus 1 %, to be repaid to Dimension upon set-up elsewhere, but in no
event
later than commencement of principal photography of any production based
on such
property set up elsewhere by Platinum. The amount reimbursable to Dimension
pursuant to the foregoing shall also be subject to increase if and to the
extent
that Platinum also wishes to acquire the rights to any materials created
by
Dimension in connection with Dimension's development of such property, by
an
amount equal to Dimension's direct, out-of-pocket development costs incurred
in
connection with the creation of such materials plus interest thereon in the
amount of prime plus 1% (to be repaid on the same basis as provided in the
foregoing sentence).
B. dimension’s
right to produce a Feature Film sequel (or prequel) and/or remake to any
Feature
Film produced pursuant hereto will revert to Platinum with no further obligation
to Dimension if Dimension has not paid the option fee set forth above for
such
Feature Film sequel (or prequel) Rights within the time period ending on
the
earlier of (i) the date which is six (6) months after the date of the initial
release of the prior Feature Film upon which such sequel, prequel or remake
is
to be based ("Prior Feature Film") in any media, and (ii) the date which
is
eighteen (18) months after the start of principal photography of such Prior
Feature Film. Once the Rights to any such Feature Film sequel, prequel and/or
remake have been so optioned, if Dimension has not commenced principal
photography of a Feature Film based thereon within the two (2) year period
following such option (subject to events of force majeure as commonly understood
in the motion picture industry or cast or director unavailability, but only
if
such persons have previously been made "pay-or-play" in writing, and provided,
however, that commencement
of principal photography of any Feature Film shall only count for purposes
hereof if any failure to complete production of the Feature Film in question
is
due only to events beyond the reasonable control of Dimension), then such
Rights
shall revert to Platinum, subject to the lien described in paragraph 5 .A
above.
For the avoidance of doubt, if such sequel, prequel and/or remake rights
revert
to Platinum as provided for herein, this shall mean that all rights in and
to
all elements (including, without limitation, characters, settings, devices,
titles, etc.) of the Prior Feature Film(s) produced by (or on behalf of)
Dimension shall revert to Platinum and Platinum shall have the right to exploit
same without any further obligation to Dimension and Dimension shall no longer
have any interest in said rights except in connection with Dimension's
continuing exploitation of its Rights to such theretofore produced Feature
Films.
7
6.
Additional Compensation. With
respect to each Feature Film produced pursuant hereto, the following
additional compensation shall be paid to Platinum or Xxxxx Xxxxxxxx Xxxxxxxxx,
as applicable:
A.
Platinum.
(i) Contingent
compensation in an amount equal to ten
percent (10%) of adjusted gross receipts received by or credited to Dimension
from the exploitation of such Feature Film in any and all media and any sequels
and prequels thereto (not cross-collateralized among any such Feature Films),
with such adjusted gross receipts to be defined, calculated, accounted for
and
paid pursuant to a definition to be negotiated in good faith between the
parties
("AGR"), from all sources throughout the world after "cash breakeven" (as
such
term is customarily understood in the motion picture industry) with an
“across-the- percent (12.5%) of AGR after "cash breakeven" with an "across-
the-board" 25% distribution fee, and escalating further to fifteen percent
(15%)
of AGR at "initial actual breakeven" (as such term is customarily understood
in
the motion picture industry), provided that video receipts shall be calculated
as follows:
(a) on
the
basis of a 25% royalty for rental sales and 12-1/2% for sell-through sales
(it
being agreed that video royalties shall be based on the wholesale price and
no
distribution fee or costs or expenses shall be deductible therefrom);
and/or
(b) in
the
event that video exploitation is done on a "rentrak" or other rental revenue
sharing basis, then 25% of Dimension's gross receipts therefrom (without
any fees or costs whatsoever being deductible) shall also be included in
gross
receipts.
(ii) In
connection with each Feature Film produced pursuant
hereto, Platinum shall receive the following bonus payments, if any, which
bonus
payments shall be applicable against the Contingent Compensation payable
pursuant to subparagraph 6.A(i) above:
(a) With
respect to a U.S. Feature Film (as defined below), bonus payments of (a)
$100,000 if and when cumulative box office for the U.S. territory as reported
by
EDI reaches Fifty Million Dollars, (b) $100,000 if and when cumulative box
office for the rest of the world exclusive of the U.S. territory (the "Foreign
Territory") as reported by EDI, if readily available (or if such EDI statistics
are not readily available, then as reported by Daily Variety), reaches Fifty
Million Dollars, (c) $250,000 if and when cumulative box office for the U.S.
territory as reported by EDI reaches Seventy-Five Million Dollars, (d) $150,000
if and
when cumulative box office for the Foreign Territory as reported by EDI,
if readily available (or if such EDI statistics are not readily available,
then
as reported by Daily Variety), reaches Seventy-Five Million Dollars, (e)
$250,000 if and when cumulative box office for the U.S. territory as reported
by
EDI reaches one Hundred Million Dollars and (f) $250,000 if and when cumulative
box office for the Foreign Territory as reported by EDI, if readily available
(or if such EDI statistics are not readily available, then as reported by
Daily
Variety), reaches one Hundred Million Dollars.
(b) With
respect to a Foreign Feature Film (as defined below), bonus payments of $100,000
each if and when (a) cumulative box office for the Foreign Territory as reported
by EDI, if readily available (or if such EDI statistics are not readily
available, then as reported by Daily Variety),reaches an amount equal to
four
(4) times the Negative Cost of such Feature Film, (b) cumulative box office
for
the U.S. territory as reported by EDI reaches an amount equal to four (4)
times
the aggregate of (i) the direct, out-of-pocket print and advertising costs
(if
any) incurred by Dimension solely for the purposes of distributing such Foreign
Feature Film in the U.S. territory, plus (ii) any direct, out-of-pocket dubbing,
voice-over and/or subtitling costs (if any) incurred by Dimension solely
for the
purpose of distributing such Foreign Feature Film in the U.S. territory,
plus
(iii) any direct, out-of-pocket production costs (if any) incurred by Dimension
solely for the purpose of distributing such Foreign Feature Film in the U.S.
territory, but only to the extent such production costs are in addition to,
and
do not constitute part of, the Negative Cost of such Foreign Feature Film
( (i)
, (ii) and (iii) being collectively referred to hereinafter as "FFF U.S.
Distribution Costs"), (c) cumulative box office for the Foreign, Territory
as
reported by EDI, if readily during
pre-production of the applicable Feature Film and ninety percent (90%) thereof
on a weekly basis during principal photography of the applicable Feature
Film
(provided that such amounts shall be deemed to constitute an advance against
a
customary 20/60/10/10 payment schedule)'. To-the extent that the Negative
Cost
of such Feature Film is greater than the Budget, the payment of the balance
of
such executive producer/producer fee shall be paid to Platinum pursuant to
the
terms of paragraph 4.B.
(ii)
above (i.e., within fifteen (15) business days of Platinum's receipt of the
Negative Cost certification for the applicable Feature Film). producer/producer
fee payable as provided in subparagraph B.(i) available
(or if such EDI statistics are not readily available, then as reported by
Daily
Variety), reaches an amount equal to five (5) times the Negative Cost of
such
Feature Film, (d) cumulative
box office for the U.S. as reported by EDI reaches an amount equal to five
(5)
times the FFF U.S. Distribution Costs for such Feature Film, (e) cumulative
box
office for the Foreign Territory as reported by EDI, if readily available
(or if
such EDI statistics are not readily available, then as reported by Daily
Variety), reaches an amount equal to five and one-half (5.5)
times the Negative Cost of such
Feature Film, and (f) cumulative box office for the U. S. as reported by
EDI reaches an amount equal to five and one-half (5.5) times the FFF U.S.
Distribution Costs for such Feature Film.
8
(c) With
respect to all Feature Films, Dimension
shall furnish the EDI and Daily Variety box office reports to Platinum via
telecopier within three (3) business days of Dimension's receipt of
same.
B. Xxxxx
Xxxxxxxx Xxxxxxxxx.
(i) Xxxxx
Xxxxxxxx Xxxxxxxxx shall be entitled to an
executive producer/producer fee in an amount equal to five percent
(5%) of such Feature Film's Negative Cost (as certified and
subject to Platinum's audit rights as provided above), with a compensation
floor of $300,000 and a ceiling of $750,000, provided
that if the Budget for the Feature Film exceeds $30 Million,
then said ceiling shall be the greater of (a) $750,000 and
(b)
an amount equal to Xxxxx Xxxxxxxx Xxxxxxxxx'x then- prevailing
producer fee "quote" (as such term is commonly understood
in the U.S. motion picture industry). Said fee shall be
initially calculated based on the Budget of the applicable Feature
Film, and, based on such initial calculation, such amount shall
be
payable ten percent (10%) thereof on a weekly basis during
pre-production of the applicable Feature Film and ninety percent (90%)
thereof on a weekly basis during principal photography
of the applicable Feature Film (provided that such
amounts shall be deemed to constitute an advance against a customary
20/60/10/10 payment schedule)'. To-the extent that the Negative Cost of
such
Feature Film is greater than the Budget, the payment of the balance of
such
executive producer/producer fee shall be paid to Platinum pursuant to the
terms
of paragraph 4.B. (ii)
above (i.e., within fifteen (15) business days of Platinum's
receipt of the Negative Cost certification for the applicable Feature
Film).
(ii) Xxxxx
Xxxxxxxx Xxxxxxxxx shall also be paid an executive producer/producer development
fee ("Development Fee"), concurrently with the payment of the option fee
for a
Feature Film as provided in paragraph 4.A above, which Development
Fee shall be applicable against the executive producer/producer
fee payable as provided in subparagraph B.(i) above,
in
an amount equal to $12,500 with respect to the fourth Feature Film produced
pursuant hereto, and in an amount equal to $25,000 with respect to the
fifth
such Feature Film and all Feature
Films thereafter produced pursuant hereto.
7. Minimum
Budget. With respect to properties acquired by Dimension hereunder, if
Dimension produces an English-language Feature Film based thereon (except
for an
English-language production which takes place in the United Kingdom with
predominantly U.K. actors) ("U.S. Feature Film"), the Budget must be at least
$14 Million. If Dimension produces a foreign-language Feature Film based
thereon, or, an English-language Feature Film which takes place in the United
Kingdom with predominantly U.K. actors ("Foreign Feature Film"), there shall
be
no minimum production budget. Dimension acknowledges that the foregoing is
of
the essence and a material term of this agreement.
8. Credits.
With respect to each Feature Film produced by Dimension pursuant hereto,
Platinum and Xxxxx Xxxxxxxx Xxxxxxxxx (as applicable) shall be accorded and
entitled to the following credits:
A. Xxxxx
Xxxxxxxx Xxxxxxxxx will receive, at his option, a shared Executive Producer
or
Producer credit. In addition, Platinum can elect to receive up to two more
(shared) co-producer credits for 1-2 Platinum executives, at Platinum's sole
discretion, provided that if Xxxxx Xxxxxxxx Xxxxxxxxx and/or Platinum is
obligated to accord any such executive an executive producer or producer
credit
with respect to a particular project, one of such additional credits shall
be a
(shared) executive producer or producer credit, provided that Platinum has
notified Dimension in writing of such requirement by no later than concurrently
with the submission to Dimension of the chain-of- title for such
project.
B. Platinum
shall be entitled to a Platinum Studios Production Company credit, immediately
following the presentation credit, a Platinum Studios logo credit and a "Based
upon a Platinum Studios Comic" or similar mutually agreeable corporate
credit.
C. Dimension
shall comply with all reasonable credit obligations
incurred by Platinum to third parties in connection with Platinum's acquisition
of the applicable property and furnished to Dimension in writing, provided
that
no such credit obligations shall require a credit above or more prominent
than
the Miramax presentation and/or production credit. The
above
credits will be accorded in all on-screen credits in the main titles on a
separate card no less prominent than any other Producer, Executive Producer
and/or Production Company credits, and in all paid advertising and publicity
issued (or controlled)
by Dimension or any of the Feature Film's distributors.
Platinum and Dimension shall mutually approve, provided that in the event
of any
disagreement the decision of Dimension shall control, (a) any other Production
Company credit, and (b) if Dimension wishes to accord more than one other
Executive Producer and/or Producer credits, such additional Executive Producer
and/or Producer credits.
9.
Merchandising,
Soundtrack Screenplay
and Music Publishing, Commercial
Tie-Ups.
A. Any
and
all revenues derived from exploitation of merchandising, music publishing
and/or
soundtrack rights to a Feature Film produced by Dimension hereunder shall
be
accounted for separately with no cross-collateralization. With respect to
the
exploitation of such merchandising rights, Platinum shall control and administer
same and Platinum shall be entitled to a 25% distribution fee and the right
to
recoup all out=of-pocket costs and fees; thereafter, the balance, if any,
shall
be split 50/50 between the
parties hereto. With respect to the exploitation of such soundtrack
rights, which Dimension shall control and administer, Platinum shall be paid
a
direct "separate pot" royalty equal to 5% of the suggested retail list price
for
worldwide sales of such album in all channels of distribution calculated
with
respect to all income from record one (1) but payable after Dimension recoups
all direct out-of-pocket producing and marketing costs and expenses (excluding
overhead) paid to unaffiliated third parties directly in connection with
the
exploitation of such soundtrack rights (as opposed to in connection with
the
applicable Feature Film associated with said soundtrack). With respect to
the
exploitation of such music publishing rights, which Dimension shall control
and
administer, Platinum shall be paid a direct "separate pot" royalty equal
to 5%
of the net amounts payable to Dimension from the exploitation thereof. With
respect to the exploitation of screenplay publishing rights, which Dimension
shall control and administer, Platinum shall be paid a direct "separate pot"
royalty equal to 7% of the suggested retail price of published screenplays.
The
parties shall negotiate in good faith the terms of their respective
participation in the revenues derived from commercial tie-ups.
9
B. Platinum's
logo and/or trademark (collectively, the "Xxxx(s)") shall appear on the outside
packaging of all phonorecords (and tapes) in all configurations now known
or
hereafter devised, in all advertisements, on all marketing and promotional
materials, and wherever the logo and/or trademark of the record distributor
appears (it being acknowledged that if the approved billing block for the
Feature Film is utilized, this shall suffice in respect of the foregoing).
The
Xxxx(s) shall be in the same size and prominence as any other logo and/or
trademark. Platinum shall have the right to accord a shared executive
producer credit to such individual as Platinum may designate. Such credit
shall
appear on the outside packaging of all phonorecords (and tapes) in all
configurations known or hereafter
devised and in all advertisements where any other executive producer credit
appears. Such credit shall be in the same size, typestyle and prominence
as the
credit accorded to any executive producer in connection with such
phonorecords.
10. Platinum
Participation in Production. Platinum shall have
mutual approval with Dimension of the final screenplay for any Feature Film
(including sequels, prequels and remakes thereof), provided that as between
Platinum and Dimension, Dimension's decisions shall control in the event
of a
disagreement, provided further, however, that Dimension agrees to comply
with
and be subject to any consultation and/or approval rights and procedures
in
favor of third parties of which Dimension has been notified in writing by
Platinum concurrently with Platinum's submission to Dimension of the chain
of
title for such project. Platinum shall also have the right to approve of
any
third party profit participations accorded in connection with any Feature
Film
if and to the extent any such participations would dilute Platinum's profit
participation hereunder. Dimension shall meaningfully consult with Platinum
with
respect to the budget, cast, director and final cut of each Feature Film
(including sequels, prequels and remakes thereof). Platinum shall have the
right
(but not the obligation) to have a representative present at all reasonable
times during all production and post-production activities (including, without
limitation, on the set) for any Feature Film, at Dimension's cost, provided
that
the expenses for travel and accommodations and the per diem (and any other
perquisites) to be furnished by Dimension to accommodate such presence are
appropriate under the circumstances taking into account the Budget for the
applicable Feature Film, provided that if the Budget for a Feature Film is
equal
to or exceeds $14 Million, then Platinum and Xxxxx Xxxxxxxx Xxxxxxxxx shall
be
accorded Dimension's "first-class" treatment with respect to such presence,
and
provided further, that in all events, regardless of the Budget for the Feature
Film, Platinum and Xxxxx Xxxxxxxx Xxxxxxxxx shall be treated no less favorably
than the most favorable treatment accorded any other person attached to such
Feature Film in this regard. Platinum shall also have the right to have a
representative present when and where rough cut sequences and dailies of
any
Feature Film are being shown, provided that to the extent any such rough
cut
sequences and/or dailies of the Picture are being separately circulated to
any
other persons for viewing, Platinum shall be separately sent a copy thereof
for
viewing at its offices. Platinum shall be added as an additional named insured
on Dimension's commercial liability, production package and errors and omissions
insurance policies for each Feature Film. Platinum shall be provided with
a
minimum of three (3) complimentary videocassette copies of each Feature Film
produced pursuant hereto
no
later than when such Feature Film becomes generally commercially available
on
video, and shall have the right to purchase additional copies from Dimension
at
Dimension's cost (so long as such purchases thereof are not for further sale
by
Platinum). Platinum shall be provided with at least ten (10) invitations to any
premieres of any Feature Film and/or screenings at film festivals where any
such
Feature Film is included, together with first-class travel and accommodations
packages for three (3) persons (if available and used).
11. Representations
and Warranties. Each party hereby represents
and warrants to the other as follows: (a)
it has all necessary
authority to make this agreement, upon its execution, the valid, binding
and
enforceable obligation of such party; (b) no consent, waiver or approval
of any
third party is necessary to its entering into and performance of this agreement
or the consummation of the transactions contemplated hereby; and (c) this
agreement, when duly executed, will constitute legal, valid and binding
obligations of such party, enforceable against such party in accordance with
the
terms hereof (subject to equitable remedies and applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights generally).
12. Confidentiality.
Neither party shall disclose the existence or terms and conditions hereof
to
any third parties except (a) to the extent same has become public knowledge
other than as a result of a disclosure in violation of this agreement, (b)
to
their respective attorneys, accountants or other financial advisors (who
shall
also be required to observe such confidentiality
requirements), (c) as required (in the opinion of such counsel, accountants
or
other financial advisors) by applicable law, or legal, regulatory, governmental
or similar process, (d)
to the extent reasonably necessary to enforce such de party’s
rights hereunder and/or (e) pursuant to one or more mutually approved press
release(s); provided, however, that each party
shall also have the right to disclose its executive producer and/or producer
fees hereunder to third parties for purposes of confirming and/or establishing
"quotes" (as such term is customarily understood in the motion picture
industry).
13. Notices.
All notices which either party wishes to serve
on the other shall be in writing,
addressed as follows: to Platinum, Platinum Studios, LLC, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Telecopier (000)000-0000, Attention:
Mr. Xxxxx Xxxxxxxxx, with copies to Loeb &Loeb LLP, 00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx,Xxxxxxxxxx 90067,Telecopier (000) 000-0000, Attention:
Xxxxxxx Xxxxxxxx, Esq., and to Xxxxxxx Xxxxxx Agency, Inc.,
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Telecopier (310) 859- 4250, Attention Xx. Xxxx Xxxxxxxx; to
Dimension, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Telecopier (000) 000-0000, Attention
10
Xx.
Xxxx
Xxxxxx; and 00 Xxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx,
XX 00000, Telecopier (000) 000-0000, Attention: Xx. Xxxxx Xxxxxx. All notices
may only be served by one of the following methods: personally, by certified
or
registered mail (return receipt requested), courier service, telegraph,
facsimile or cable. Either party may designate a substitute address by written
notice to the other. The date which is one (1) day following personal delivery,
the date which is five (5) days after the deposit of such notice in the mail,
the date which is one (1) business day after delivery thereof to be telegraph
or
cable office, the date which is one (1) business day after sending by facsimile
(provided there is an electronic answerback confirmation of even date) or
the
date which is two (2) business days after delivery to a courier service,
shall
be deemed the date of service of any notice from either party to the other
party.
14.
Governing Law; Forum; Dispute Resolution. This agreement shall be governed
by
the laws of the State of California applicable to agreements executed and
wholly
to be performed therein. The forum for the resolution of any dispute related
to
this agreement shall be the federal and state courts located in Los Angeles,
California and the parties hereby submit to the in personam jurisdiction
of said
courts and hereby waive any claim that such courts are an improper venue
or an
inconvenient forum. In the event of a material breach by either party of
its
obligations hereunder, the other shall have the right to terminate this
agreement and seek damages resulting from such breach, provided that if such
breach is a failure by Dimension to pay monies when due hereunder, Platinum
shall only have the right to terminate the agreement if Dimension has failed
to
cure such breach within five (5) business days of its receipt of written
notice
from Platinum of such payment default, provided further that in no event
shall
Platinum have the right to injunctive relief with respect to the exploitation
of
any Feature Film produced pursuant hereto. The prevailing party in any legal
proceeding of any type related to this agreement shall receive, in addition
to
any other recovery, its actual attorneys’ fees and costs.
| MIRAMAX FILM CORP. | PLATINUM STUDIOS, LLC | |||
|
By:
/s/
Xxxx
Xxxxxx
|
By
: /s/
Xxxxx Xxxxxxxxx
|
|||
|
Its:
President
|
Its:
Chairman
|
|||
|
|
|
11
