[EXHIBIT 10.1.23]
LONG FORM SALES AGREEMENT
A license agreement ("Agreement") made this 12th day of November,
2002, between Endevour, Holdings Corp. (hereinafter referred to
as "Licensor") and Miracle Film Distribution, Inc. (hereinafter
referred to as "Sales Agent").
The parties hereby agree as follows:
1. PICTURE
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"St. Petersburg-Cannes Express" (the "Picture"), starring Xxxxx
Xxxxxxxx; photographed in the English language, on color
professional quality film with no hard matte; to be delivered
with a running time, inclusive of main and end titles, of between
40 and 110 minutes; capable of receiving an MPAA rating of no
more restrictive than an "R" (collectively, the
"Specifications").
2. TERRITORY
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Worldwide in all languages including, without limitation,
English, Spanish, and French and shall include all diplomatic
posts and military and government installations, wherever
located, all ships principally operating from or serviced from
the Territory where the principal booking or licensing office is
located, and all aircraft and oil rigs flying the flag of the
country licensed.
3. TERM
----
Commencing upon execution of this Agreement and continuing for
fifteen (15 years following acceptable Delivery (as defined
hereunder) of all of the items set out in the attached Schedule
"A".
4. RIGHTS GRANTED
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A. Licensor hereby grants to Miracle the sole and exclusive
right under copyright and otherwise to license the film for
exhibition, distribute, sub-distribute, advertise, promote,
publicize, market, sell, manufacture, license and otherwise
exploit the Picture in the Territory during the Term in any and
all languages (including, without limitation, English, French and
Spanish), in all forms of Theatrical, Free Television, Pay Cable,
Subscription Cable, Pay-Per-View, Home Video (including, without
limitation, videocassettes, DVD digital, videodisc, 8mm,
laserdiscs, optical, linear, and all other disk and other video
devices now known or hereafter devised and through any and all
means of distribution, now known or hereafter devised, including
without limitation, retail, mail order, catalogs, superstores,
record stores, book and drug chains, all television home shopping
clubs, QVC, infomercials and all other markets), (the "Rights").
Subject to the approval of Endevour Holdings Corp.
B. Licensor grants Miracle and Miracle's representatives the
sole, exclusive and irrevocable right to use the title of the
Picture, the names (including any professional names and
sobriquets), likenesses (including pictures, portraits and
posters), and biographical material of the performers, producers,
directors, writers and other contributors to the Picture, and a
summary of the content of the Picture in the distribution,
advertising, publicity and promotion of the Picture in the
Territory during the Term. Without limiting the generality of
the foregoing, Miracle shall have the unrestricted right to use
the names and likenesses of all cast related to the Picture,
including without limitation, in the distribution, advertising,
marketing, publicity and promotion of the Picture
C. Miracle shall have the right to use the music which is
contained in the soundtrack of the Picture (or music which is not
contained in the soundtrack of the Picture) for the purposes of
advertising, publicizing, promoting and marketing the Picture
and/or Miracle throughout the Territory, including, without
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limitation, in trailers, television spots and radio commercials,
in and out of context.
D. Miracle shall have the exclusive right to use the Picture or
up to five (5) minute portions thereof for the purpose of
advertising, selling, promoting, and publicizing the Picture in
the Territory during the Term.
E. In the Territory during the Term, the Licensor agrees not to
grant any right, title or interest in the Picture to any person,
firm, partnership or corporation other than the Miracle for use
in connection with the Rights granted herein.
5. DELIVERY MATERIAL
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"Delivery" shall mean delivery to and acceptance by Miracle of
all item listed on Schedule "A", attached hereto, which Miracle
will advance. Licensor agrees to provide any other items Miracle
may reasonably request, to the extent they are available to
Licensor, at no additional cost to Miracle. If Delivery cannot
be completed on or before February 7, 2002 (the "Delivery Date"),
unless extended by mutual agreement of the parties, Miracle shall
have the right to terminate this Agreement upon written notice to
Licensor, and in such event Licensor shall return any and all
payments made to Miracle pursuant to this Agreement, with
Interest.
6. MINIMUM GUARANTEE/ADVANCE
-------------------------
Miracle agrees to advance all post-production and delivery costs
recoupable from all gross receipts from worldwide income
collected by Miracle and/or Endevour Holdings Corp.
7. DIRECTIONS RE: PAYMENTS
-----------------------
Until such time as otherwise advised in writing by Licensor, the
parties hereby agree that Miracle is instructed to make all
payments due to Licensor pursuant to the terms of this Agreement
by mailing cheques to Licensor at the address listed in paragraph
20 of this Agreement, and for the purpose of this Agreement,
payments to Miracle Entertainment, Inc. shall constitute payments
to Licensor and shall receive copies of statements and cheque(s).
9. DISPOSTION OF GROSS RECEIPTS
----------------------------
Gross Receipts shall be applied on a continuous rolling basis as
follows:
(a) Miracle shall be entitled to recoup and retain all Sales
Expenses (as set forth herein); post production finishing costs
and
(b) Following the deduction stated above, the remaining Gross
Receipts shall be deemed Net Receipts; Licensor shall be entitled
to 80% of such Net Receipts and Miracle shall be entitled to 20%
of such Net Receipts.
It is understood that the Gross Receipts derived from
exploitation of the Picture in any media and/or in any country
granted to Miracle hereunder are fully cross-collateralized with
all other territories granted in respect of Miracles post and
sales advance costs plus post production costs that shall not
exceed USD$150,000.00.
10. SALES EXPENSES
--------------
All customary out of pocket costs and expenses paid or incurred
or caused to be paid or incurred in connection with prints,
duplication, replication, publicity, promotion, marketing,
advertising, editing, materials, financing charges, exploitation
and distribution of the Picture in the Territory.
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Miracle shall not spend in excess of Xxx Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxxx Dollars (USD$100,00.00) in connection with marketing
expenses in respect of the Picture ("Marketing Expense Cap")
unless the prior approval of Licensor is obtained, such approval
not to be unreasonably withheld. For greater certainty, such
Marketing Expense Cap shall not include the following:
a) Any expenses incurred by or on behalf of Miracle in respect
of Delivery Materials not provided by Licensor in accordance with
the terms of this Agreement;
b) Expenses related to the direct cost of sales (including,
without limitation, duplication, replication, sleeves, wraps,
freight, authoring encoding and filmwork). In connection
therewith, Miracle shall not charge any markup over its actual
duplication costs.
For greater certainty, although such items shall not be included
in the Marketing Expense Cap, they shall be fully recoupable by
Miracle as Sale Expenses hereunder.
Miracle shall not be responsible for any additional or third
party payments, including, without limitation, union or guild
residuals or supplemental market payments required, deferments,
profit participations, music payments or any other amounts
arising as a result of Miracle's exploitation of the Rights
granted hereunder.
11. MIRACLE'S DUTY
--------------
Miracle accepts the license herein granted to it and will in good
faith endeavor to sub-distribute/sell and exploit the Picture
within the Territory in a manner consistent with sound business
policy. Subject to the provisions of the Agreement, Miracle
shall have full and complete charge and control of the manner in
which, and the terms upon which, the Picture shall be marketed
and distributed, subject to the approval of the licensor's
acceptance of the advance guarantee for each territory. Nothing
herein shall be construed as a representation of Miracle as the
amount of Gross Receipts to be realized pursuant to the sale
activities of Miracle. Miracle shall have the right to change
the title of the Picture; provided that Miracle consults with
Licensor with respect to such title change.
12. ACCOUNTING
----------
On a quarterly basis during the first two (2) years of the Term,
and semi-annually thereafter, Miracle shall prepare and provide
Licensor detailed written accounting statements. Said statements
shall be forwarded to Licensor within sixty (60) days after the
end of the applicable accounting period and shall be accompanied
by a cheque to Licensor in an amount equal to all payments
reflected on such statement as being due to Licensor.
During the Term, Licensor, or its designated representatives,
shall have the right, at Licensor's own expense, no more than
once during each year of the Term, upon reasonable written notice
and during normal business hours at the location were Miracle's
books and records are maintained, to audit and inspect Miracle's
books, records and accounts in respect of the Picture and make
copies of same in order to determine the accuracy of any of
Miracle's statements rendered pursuant to this Agreement.
Notwithstanding the foregoing, if no issue as to the accuracy or
completeness of any particular accounting statement is raised in
writing with Miracle by Licensor within twelve (12) months of
receipt by Licensor of such accounting statement, such accounting
statement shall be deemed accepted by Licensor and Licensor shall
be precluded from later disputing the accuracy or completeness of
such accounting statement, save in the event of Manifest error or
fraud.
13. CREDITS
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Miracle shall be entitled to a first position presentation credit
(and/or logo) in all screen and paid advertising in the world
distribution. Miracle shall not make changes, cuts or edits
without the approval of Licensor, except where required for
censorship, such approval not to be unreasonably withheld. Any
such editing costs shall be treated as Sale Expense.
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Miracle agrees not to change the credits on the Picture as
delivered and to comply with Licensor's credit obligations of
which it has been given notice in writing in a timely manner.
14. REPRESENTATIONS AND WARRANTIES
------------------------------
Licensor represents and warrants to, and covenants with, Miracle
with respect to the Picture that:
A. Licensor has all the rights, capacity and authority
necessary to enter into this Agreement and to perform all of its
obligations hereunder and to grant, sell, assign, transfer and
convey to Miracle all the Rights granted or purported to be
granted herein. Licensor owns or controls all Rights granted to
Miracle under this Agreement. All Rights granted to Miracle are
free of all liens, claims, and encumbrances. To the best of
Licensor's knowledge, there are no defects in the chain-of-title
to the Picture, the screenplay or any other literary, musical or
dramatic material upon which the Picture is based which would
adversely affect any of Miracle's rights.
B. Licensor has not taken and will not take or authorize any
action to fail to take any action by which any of the rights
granted herein have been or may be in any way impaired.
Specifically, with respect to the Territory, Licensor has no
other agreement for license or distribution with any other person
or entity with respect to the Picture which may conflict or
interfere or be inconsistent with any of the provisions of the
Agreement or the enjoyment by Miracle of any rights granted to it
hereunder.
C. There are no liens or encumbrances against the Picture, and
all costs of its production (including, without limitation, all
compensation, laboratory costs, license fees, royalties, and any
and all music costs and/or licenses) have been paid and all
clearance of elements contained therein (including, without
limitation, music) have been secured for use by Miracle for the
full extent of all Rights granted herein.
D. There is no claim, action, suit, investigation or proceeding
relating to or affecting the Picture pending or threatened,
before any federal, state, provincial, county, municipal,
administrative or governmental instrumentality, as law or in
equity.
E. Nothing contained in the Picture or in the ancillary
material to be supplied to Miracle hereunder, nor the entering
into or performing of this Agreement, nor the exercise of any of
the rights granted hereunder, will violate or infringe upon any
rights whatsoever (including, without limitation, any copyright
(whether common law or statutory), patent, trademark, right of
privacy or publicity, or other moral, literary, artistic,
dramatic, private, personal, civil or proprietary right or
interest)of any third persons or result in any other liability.
Neither shall the Picture defame, slander, libel or hold in false
light any person or entity.
F. Licensor owns or controls or has the right to utilize as
part of the Picture for the duration of the Term, all literary,
dramatic, musical synchronization and mechanical rights contained
in the Picture. Licensor owns or controls the exclusive rights to
authorize the manufacture, distribution, exhibition, sale,
marketing, advertising, publicizing, promotion and exploitation
of the Picture throughout the Territory in the manner and form
contemplated by this Agreement. Without limiting the generality
of the foregoing, Licensor has obtained all of the rights,
permissions and licenses required to grant the Rights granted
herein to Miracle and to enable Miracle to fully exploit the
Picture (including, without limitation, the right to use
performers' names, images, likenesses and biographies to
advertise, publicize and promote the Picture), and Licensor shall
be solely responsible for the payment of all these third party
rights, including, without limitation, all production expenses,
taxes, fees, charges, salaries and all fees and charges required
to be paid by union guild arrangements.
G. There has been no prior exploitation in the Territory of the
Rights granted to Miracle herein in respect of the Picture,
either by Licensor or by any other party.
H. All materials required to be delivered pursuant to paragraph
5, above, shall be made available to Miracle pursuant to the
terms of paragraph 5, and all such materials will be of
technically acceptable quality.
I. The Picture shall be delivered in accordance with the
Specifications, as set forth above.
J. Licensor's representations and warranties herein are true
and complete as of the date of this Agreement and shall remain so
throughout the Term of this Agreement.
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K. Should Xxxx Xxxx, an individual, cease his tenure and is no
longer an employee of Miracle Entertainment, all rights, whether
granted or not, shall return to Licensor.
15. INDEMNITY
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Licensor shall at all times defend, indemnify and hold harmless
Miracle, its parent, subsidiary and affiliated companies, and its
respective successors, licensees, Miracles, and assigns and their
respective officers, directors, shareholders, employees,
attorneys, agents and other representatives from and against any
and all claims, actions, suits, judgments, obligations, damages,
losses, penalties, liabilities, costs and expenses (including,
without limitation, reasonable fees and disbursements of outside
counsel) of whatsoever kind and nature imposed on, incurred by or
asserted against Miracle in any action, claim or proceeding
between Miracle and Licensor or between Miracle and any third
party or otherwise (collectively "Claims"), arising out of or in
connection with the exercise of any of the Right granted herein
or out of any breach by Licensor of any representation, warranty,
covenant or other provision hereof.
Miracle shall at all times defend, indemnify and hold harmless
Licensor, its parent, subsidiary and affiliated companies, and
its respective successors, licensees, Miracles, and assigns and
their respective officers, directors, shareholder, employees,
attorneys, agents and other representatives from and against any
and all Claims arising out of or in connection with the exercise
of any of the Rights granted herein or out of any breach by
Miracle of any representation, warranty, covenant or other
provision hereof (other than claims covered by Licensor's
indemnity obligation above).
16. INSURANCE
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Licensor shall, at its own expense and for the duration of the
Term, secure and maintain in force standard producer's liability
(errors & omissions) insurance issued by a reputable insurer in
the minimum amount of USD$1,000,000.00 per claim and
USD$3,000,000.00 in the aggregate with respect to the Picture.
Licensor shall provide to Miracle a certificate of insurance
which shall provide that such insurance (i) cannot be modified,
terminated or cancelled by the carrier without its first
notifying Miracle of such event, and (ii) is not subject to any
non-standard exclusions from, restrictions of or limitations in
coverage or any material difference in deductibles as the
standard in the industry. Such policy shall name as additional
insureds the Miracle, its parent, subsidiary and affiliated
companies, successors, sub-Miracles, sub-licensees and assigns
and the respective officers, directors, shareholders, attorneys,
employees, agents and any other representatives of any and all of
the foregoing and shall contain an endorsement that negates the
"other insurance" clause in the policy and a statement that the
insurance being provided is primary and that any errors and
omissions insurance carried by Miracle or any other person or
entity (other than Licensor) is neither primary nor contributing.
17. MIRACLE'S RIGHT OF TERMINATION
------------------------------
Miracle may terminate this Agreement in the event of the
occurrence of any of the following incidents of default by the
Licensor: (i) failure to comply with any material provision of
this Agreement, if such non-compliance is not remedied within ten
(10) business days after written notice of such default is
provided to the Licensor; (ii) the filing of a voluntary
petition, by the Licensor, under any chapter of the United States
Bankruptcy Code or any similar state or foreign law; (iii) the
filing of any involuntary petition against the Licensor under the
United States Bankruptcy Code or any similar state or foreign law
which is not dismissed within one hundred and twenty (120) days;
or (iv) the appointment of a receiver for the Licensor.
Upon such termination, all rights and related materials granted
from Licensor to Miracle shall revert to Licensor.
19. FORCE MAJEURE
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Each of the parties shall be excused from performing its
obligations hereunder to the extent to which performance is
prevented by strikes, labor disturbances, failure or delay of
transportation facilities, failure of transmission facilities,
satellite failure, acts of God, act of government, or other
similar events (commonly known as Force Majeure) which could not
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reasonably be foreseen and which are not reasonably within the
control of such party. Neither party hereto shall be liable to
the other for any loss, damage or default occasioned by Force
Majeure.
20. NOTICES
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All notices hereunder must be in writing and must be personally
delivered or be sent by registered or certified mail, postage
prepaid, by courier and/or by fax. The address for all notices
required to be sent to Licensor shall be:
Endevour Holdings Corp.
X/X Xxxxxx X. Xxxxxxx
0 Xxx Xxxxxx
0000 Xxxxxx - Xxxxxx
Fax 000.000.00.00
Attn: Xxxxxx X. Xxxxxxx
With a mandatory copy to:
Miracle Entertainment, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax: 000.000.0000
Attn: Xxxx Xxxx
Either party may change such address by appropriate written
notice.
21. CONFIDENTIALITY
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Neither party shall disclose to any third party (other than their
respective employees, in their capacity as such) any information
with respect to the financial terms and provisions of this
Agreement except; (a) to the extent necessary to comply with law
or the valid order of a court of competent jurisdiction; (b) as
part of its normal reporting or review procedure to its parent or
subsidiary company, its partners, its auditors and its attorney;
and (c) in order to enforce or defend its rights pursuant to this
Agreement in a legal proceeding.
22. NO PARTNERSHIP OR JOINT VENTURE
-------------------------------
nothing herein contained shall in any way create any association,
partnership, joint venture or the relation of principal and agent
between the parties to constitute such. Neither of the parties
hereto shall hold itself out contrary to the terms of this
provision, by advertising or otherwise. This Agreement is not
for the benefit of any third party.
23. SUCCESSORS AND ASSIGNS
----------------------
Miracle shall have the right to assign all of its right, title
and interest under this Agreement without consent.
This Agreement may not be assigned by Licensor, either
voluntarily or by operation of law, without the prior written
consent of Miracle, and any such assignment shall not relieve the
assignor of its obligations hereunder. Notwithstanding the
foregoing, Licensor may assign this Agreement, or any of its
rights hereunder, without Miracle's consent (but with written
notice to Miracle), to any entity with which it may be merged to
consolidated or which acquires all or substantially all of its
assets, provided that such entity with which it is merged or
consolidated or which acquires all or substantially all of its
assets agrees in writing to assume all of its obligations under
this Agreement.
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Notwithstanding the foregoing, only after complete Delivery has
been accepted by Miracle, Licensor may assign only their right to
receive monies without consent, but no such assignment shall
relieve Licensor of any of its obligations, representations and
warranties hereunder.
24. GOVERNING LAW; JURISDICTION
---------------------------
The validity, interpretation and legal effect of this Agreement
shall be governed by the laws of the State of California
applicable therein.
25. HEADINGS
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The titles and captions in this Agreement are inserted for
reference and convenience only and in no way define, limit or
describe the scope of this Agreement or intent of any provision.
26. AMENDMENTS
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This Agreement cannot be amended, modified or changed except by a
written instrument duly executed by authorized officers of both
the parties hereto.
27. NO WAIVER
---------
No waiver by either party of a breach or default hereunder shall
be deemed a waiver by such party of a subsequent breach of like
or similar nature.
28. ENTIRE AGREEMENT
----------------
This Agreement, together with Schedule "A" attached hereto,
represents the entire Agreement between the parties hereto with
respect to the subject matter hereof and supersedes all previous
representations, understandings or agreements, oral or written,
between the parties with respect to the subject matter hereof.
29. COUNTERPARTS; FACSIMILES
------------------------
This Agreement may be signed in counterparts and each such
counterpart shall constitute an original document, and all such
counterparts, taken together, shall constitute one and the same
instrument. Counterparts delivered by facsimile shall have the
same force and effect as an original.
30. SEVERABILITY
------------
If a provision of this Agreement is prohibited or invalidated
under applicable law, the remainder of the Agreement shall remain
unaffected.
31. EXECUTION
---------
IN WITNESS WHEREOF the parties have executed this Agreement on
the date first written above.
Endevour Holdings Corp. Miracle Entertainment, Inc.
By:/s/Xxxxxx Xxxxxxx By: /s/Xxxx Xxxx
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Its: Its:
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