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EXHIBIT 10.28
SONY PICTURES CLASSICS
000 XXXXXXX XXXXXX (0XX XXXXX)
XXX XXXX, XX 00000
PHONE: 000-000-0000 FAX: 000-000-0000
As of February 8, 2001
VIA FAX: (000) 000-0000
VANS, INC.
00000 Xxxxxxxxx Xxxxxx
Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Gentlemen:
This letter will confirm the principal terms of the agreement between VANS, INC.
("Licensor"), with offices at 00000 Xxxxxxxxx Xxxxxx, Xxxxx Xx Xxxxxxx,
Xxxxxxxxxx, 00000 and SONY PICTURES CLASSICS INC. ("SPC"), with offices at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with respect to the English language
documentary motion picture entitled "DOGTOWN AND Z-BOYS," directed by Xxxxx
Xxxxxxx (hereinafter referred to as the "Picture"), for distribution by SPC in
(a) United States, its territories and possessions, Puerto Rico(1), Bermuda and
the Dominion of Canada (the "North American Subterritory"), (b) Australia, New
Zealand, Papua New Guinea and their territories and dependencies; the United
Kingdom of Great Britain and Northern Ireland and its territories and
possessions (including but not limited to the British Virgin Islands, Channel
Islands, England, Gibraltar, Isle of Man, Malta, Northern Ireland, Republic of
Ireland, Scotland, Wales, and the United Kingdom Continental Shelf); Republic of
South Africa (including the homelands of Bophuthatswana, Ciskei, Transkei, and
Venda), Lesotho, Swaziland, Namibia, Botswana, Zimbabwe, and their territories,
dependencies, homelands, and possessions (the "International Subterritory"); and
(c) all military, diplomatic and government installations of, and all ships and
aircraft flying the flag of, or of the registry of, or licensed by and/or any
country in the Territory and/or any political subdivision thereof (the
"Territory")for a period of twenty five (25) years from the earlier of
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(1) It being agreed that Licensor shall be entitled to exploit Spanish language
dubbed pay television rights in Puerto Rico, provided that (i) such pay
television exploitation occurs as part of a pay television license in Latin
America, which license customarily includes Puerto Rico as part of its area of
exhibition, (ii) the exploitation of the Picture by means of such a Latin
American pay television license shall not interfere or conflict with SPC's pay
television exploitation of the Picture in the Territory, and (iii) it is
expressly agreed that nothing contained herein shall in any way limit SPC's
right to exploit the Picture in the Spanish language. In the event that Licensor
has an opportunity to exploit Spanish language free television rights in Puerto
Rico as part of an overall license agreement in Latin America which customarily
includes Puerto Rico as part of its area of exhibition, SPC and Licensor shall
discuss such license in good faith.
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(i) the date of first theatrical release of the Picture by SPC in the Territory,
or (b) June 1, 2002 (the "Term"), under the following terms and conditions:
1. Subject to the terms hereof, including SPC's timely payment of the Advance
(provided that the conditions precedent to such payments have been met),
Licensor hereby grants an exclusive license to SPC of all rights enumerated
herein in and to the Picture in the Territory during the Term, under
copyright and otherwise, which rights shall be sole, exclusive and
irrevocable, and shall include but are not limited to all rights in all
markets and media whether now known or hereafter devised, discovered, or
created, including without limitation, theatrical, all forms of television
(e.g., free, pay [whether pay per view or subscription], cable, cable
retransmission, direct broadcast satellite, digital, high definition, and
closed circuit), nontheatrical (e.g., airlines, ships, common carriers, oil
rigs, armed services, educational, industrial and institutional
facilities), home video (e.g., video cassettes, digital variable discs,
laser-discs, CD-ROMs and analogous devices and formats), internet (provided
that, subject to SPC's right to advertise, publicize, and promote the
Picture by means of the internet, the right to exhibit the Picture by means
of the internet may only be exploited if SPC can contain the reception
thereof within the Territory), video on demand, near video on demand,
regardless of the means of distribution or transmission including without
limitation wire, broadcast, digital, film, tape, CD-ROM, all rights of
communication to the public, including the right of making available and
rental and lending rights, including the sole, exclusive and irrevocable
right to (and cause and license others to) exhibit, distribute, market,
display, promote, advertise, publicize, communicate to the public,
distribute to the public, turn to account, derive revenues from, and
otherwise exploit the Picture and trailers and excerpts therefrom (provided
that any film clips appearing in the Picture shall not be separately
licensed for commercial purposes not associated with the Picture), in any
and all languages and versions, on any and all sizes and widths of film,
tape or other materials, for any and all uses and purposes, and in and by
any and all other means, methods, processes, devices, media or markets (the
"Rights"). The Rights granted to SPC do not include the following: (a)
dramatic stage rights; (b) novelization rights; (c) merchandising rights;
(d) music publishing rights; (e) soundtrack album rights; and (f) the right
to produce any future motion pictures, television productions, or other
productions based on the Picture, whether as a documentary or dramatic
sequel, prequel, re-make, or otherwise ("Reserved Rights"). During the
Term, SPC shall have a right of first negotiation with respect to the
Rights granted hereunder following expiration of the Term, upon terms and
conditions to be mutually agreed upon between the parties, provided that if
no agreement is reached, SPC shall not have any right to exploit the
Picture after the expiration of the Term.
2. As a condition hereof (provided that Licensor has fully performed its
material obligations hereunder), and as consideration for the rights
granted to SPC hereunder, SPC shall pay to Licensor the sum of Three
Hundred Fifty Thousand U.S. Dollars (U.S.
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$350,000) (the "Advance"), which Advance is non-returnable but fully
recoupable with interest by SPC against all sums otherwise payable to
Licensor in accordance with Paragraph 4 below. Subject to the deduction by
SPC of any required withholding or other taxes (if any), the Advance shall
be paid in accordance with the following schedule:
2.1. Twenty-five percent (25%) of the Advance shall be payable upon SPC's
receipt of fully executed copies of the long-form agreement and all
documents attached thereto that are to be executed by Licensor and
SPC's receipt and approval of the chain of title and the copyright
status of the Picture and the underlying materials thereto (e.g., the
screenplay). SPC agrees that the initial draft of the long form
agreement shall be sent to Licensor no later than ten (10) business
days following execution of this Agreement, and each party shall use
best efforts to respond to the other's comments with respect to the
long-form within ten (10) business days of receipt of said comments;
and
2.2. Seventy Five percent (75%) of the Advance shall be payable upon full
and complete delivery of, and acceptance by SPC of, all delivery
items, including but not limited to: (A) the loan, for use in New
York, of all laboratory materials, print and pre-print materials
reasonably necessary or desirable for the release and exploitation of
the Picture, and (B) irrevocable lab access letters executed by
Licensor and by each laboratory in possession of any and all of the
original materials specified in the lab access letter, providing SPC
full and unlimited access to all such elements of the Picture at all
times during the Term.
3. SPC agrees that, unless otherwise agreed in writing between the parties,
and subject to SPC's receipt of full and complete delivery of the Picture
pursuant to the terms hereof, the Picture shall commence its theatrical
release Picture no later than June 1, 2002. In the event that full and
complete delivery has occurred and such theatrical release has not
commenced as of June 1, 2002 and no agreement to revise such release
exists, SPC shall pay Licensor a contingent additional advance in the
amount of One Hundred Thousand U.S. Dollars (U.S. $100,000) (the
"Additional Advance") which such Additional Advance (if any) shall be
non-returnable but fully recoupable with interest by SPC against all future
monies payable to Licensor hereunder. In the event that full and complete
delivery has occurred and SPC has not theatrically released the Picture by
December 1, 2002, it shall be deemed a material breach of this Agreement
and Licensor shall have the right to seek its rights and remedies at law
and in equity.
4. Subject to (i) SPC's right to recoup the Advance and any Specified Costs
(as defined below), plus interest thereon (as set forth in Paragraph 5
below) and (ii) SPC's right to
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recoup all Distribution Expenses (as defined below) on a fully
cross-collateralized basis other than from Licensor's and SPC's respective
20% share of Theatrical Gross Receipts (as set forth in Paragraph 5 below),
Gross Receipts (as defined below) shall be shared between the parties as
follows:
4.1. For Gross Receipts derived from the exploitation of the Picture in
the North American Subterritory:
4.1.1. THEATRICAL - After deduction of only customary "off the
tops,"(2) from the first dollar, Theatrical Gross Receipts
shall be allocated as follows: Licensor shall be entitled
to twenty percent (20%) of Theatrical Gross Receipts; SPC
shall be entitled to twenty percent (20%) of Theatrical
Gross Receipts; and the balance of sixty percent (60%) of
Theatrical Gross Receipts shall be utilized in the
recoupment of SPC's Distribution Expenses. Notwithstanding
any other provisions of this Agreement, Licensor's 20%
share of Theatrical Gross Receipts shall only be utilized
in the recoupment of the Advance and any Specified Costs,
plus interest as provided herein, and in no event shall any
other costs be recouped against such 20% share (i.e., if
Theatrical Gross Receipts are derived after recoupment of
the Advance, any Specified Costs, and interest as provided
herein, but prior to the Recoupment Point, then Licensor
shall receive its 20% share thereof without deductions of
any kind, other than the off-the-tops). After the
Recoupment Point (as defined below), Theatrical Gross
Receipts received by SPC shall be allocated, after the
deduction "off the top" of any additional Distribution
Expenses, Sixty percent (60%) to Licensor, and Forty
percent (40%) to SPC.
4.1.2. NON-THEATRICAL - After deduction "off the top" of all
customary non-theatrical Distribution Expenses, the
remaining Non-Theatrical Gross Receipts shall be shared
seventy percent (70%) to Licensor, and thirty percent (30%)
to SPC.
4.1.3. ALL FORMS OF TELEVISION - Subject to Section 6 below, after
deduction (in the following order) of a thirty percent
(30%)
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(2) Shall include only (i) taxes (if any), (ii) checking and collection costs
(expenses incurred or paid in connection with the collection of Gross Receipts,
if any), provided that such costs shall not exceed 1.5% of Theatrical Gross
Receipts, and (iii) industry dues and assessments, not to exceed .01% of Gross
Receipts (excluding the fee to obtain an MPAA rating).
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distribution fee to SPC and all Distribution Expenses
incurred in theexploitation of television rights, Licensor
shall receive one hundred percent (100%) of the remaining
monies.
4.2. For Gross Receipts derived from the exploitation of the Picture in
the International Subterritory:
4.2.1. THEATRICAL and NON-THEATRICAL - Subject to Section 6 below,
Licensor shall be entitled to receive 100% of the
Theatrical and Non-Theatrical Gross Receipts received by
SPC or its affiliates after deduction (in the following
order) of (I) a 35% distribution fee to SPC or its
affiliates, it being agreed that any fees to
subdistributors (if any) shall be included in such
distribution fee, and (II) all Distribution Expenses
incurred in the exploitation of such Theatrical and
Non-Theatrical rights.
4.2.2. ALL FORMS OF TELEVISION - Subject to Section 6 below,
Licensor shall be entitled to receive 100% of the
Television Gross Receipts received by SPC or its affiliates
after deduction (in the following order) of (I) a 50%
distribution fee to SPC or its affiliates, and (II) all
Distribution Expenses incurred in the exploitation of such
Television rights.
4.3. For Gross Revenues derived from the exploitation of the Home Video
Rights in and to the Picture throughout the Territory (including
sales made to Licensor pursuant to Section 7 below):
4.3.1. HOME VIDEO DEVICES - If Home Video Devices of the Picture
are distributed by Columbia TriStar Home Video or any other
SPC affiliate ("CTHV"), after deduction only of
manufacturing costs, any required third party payments (if
any), and sales taxes (if any) actually paid by CTHV, and
after reasonable provision for reserves against returns and
credits (which such reserves shall not exceed 10% of Home
Video Gross Revenues and shall be liquidated not less
frequently than every 12 months), Licensor shall receive a
royalty of twenty-five percent (25%) of Home Video Gross
Revenues from the sale or license or other exploitation of
Home Video Devices and/or any rights thereto throughout the
Territory. (For all Home Video Devices sold or licensed by
CTHV for "sell-through," the aforesaid royalty shall be
fifteen percent (15%) after the foregoing deductions.) If
Home Video Devices of the Picture are distributed by a home
video distributor (or subdistributor) other than CTHV
(e.g., in Canada), Licensor shall receive a royalty of
twenty-five
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percent (25%) of the Gross Revenues received by SPC in U.S.
dollars in the United States from such home video
distributor (or subdistributor) from the sale or license of
Home Video Devices throughout the Territory. (For all Home
Video Devices sold or licensed by such home video
distributor (or subdistributor) for "sell-through," the
aforesaid royalty shall be fifteen percent (15%).
4.4. "Gross Receipts" shall mean all monies actually received by SPC in
the United States in U.S. dollars from the exploitation of the
aforesaid Rights after deducting all costs incurred in the
collection thereof, including reasonable outside attorneys' fees
and after giving effect to any adjustments with exhibitors for
rebates, credits, allowances or refunds, whether occasioned by
settlement of disputes or otherwise, but only if directly related
to the Picture.
4.5. For purposes of this Agreement, the "Recoupment Point" is defined
as the first point (if ever) at which SPC has fully recouped out
of the Gross Receipts of the Picture (i) all Distribution Expenses
incurred in connection with the Picture, and (ii) any and all
advances, including the Advance and the Specified Costs (if any),
plus accrued interest thereon (to the extent provided herein).
4.6. For purposes of this Agreement, "Distribution Expenses" shall be a
sum equal to all usual and customary distribution costs and
expenses which have been actually expended or incurred (as defined
below) by SPC, including without limitation, all advertising and
publicity (creative and media) costs, all print and other
laboratory costs, manufacturing and mastering costs, import duties
and customs, and necessary third party license fees or other
payments resulting from SPC's distribution of the Picture, if any,
but not including the cost of any overhead or any salaries of
full-time personnel of SPC or its affiliates. No item deducted as
a distribution cost or expense hereunder shall be deducted and
recouped more than once. For purposes of this Agreement, a cost or
expense shall be deemed to have been "incurred" at the time when
bills actually received by SPC are approved for payment by
executives of SPC.
4.7. For purposes of this Agreement, "Specified Costs" shall be any and
all advances and any amounts paid or expenses incurred by SPC in
connection with the cost of creating any delivery item not
supplied by Licensor to SPC, English language translations (if
necessary) of any chain-of-title documents, errors and omissions
insurance, copyright and title reports, and copyright registration
and protection fees.
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5. Subject to Section 4.1.1 above, there shall be full
cross-collateralization with respect to (a) all Gross Receipts derived
from SPC's exploitation of the Theatrical, Non-Theatrical and Television
Rights hereunder, after deduction of all distribution fees
and Distribution Expenses described in Paragraph 4 above, and (b)
Licensor's Home Video royalty in the Territory for purposes of (i) SPC's
recoupment of any deductible Distribution Expenses incurred in connection
with the Picture, and (ii) SPC's recoupment of the Advance and any
Specified Costs, plus accrued interest thereon. For the purposes of SPC's
recoupment, the Advance and Specified Costs shall bear interest, until
the date which is one (1) year following the date of first commercial
release of the Picture, at the rate of one and one-half percent (1 1/2%)
over the base prime rate charged from time to time by Chase Manhattan
Bank at its primary business office in New York City, New York.
Distribution Expenses shall not accrue interest hereunder.
Notwithstanding anything contained in this Agreement to the contrary, no
monies shall be payable to Licensor until the full amount of the Advance
and Specified Costs shall have been fully recouped by SPC out of all sums
otherwise payable to Licensor pursuant to Paragraph 4 above, provided
that in the event that prior to the Recoupment Point SPC shall have
recouped the Advance and any Specified Costs, including interest thereon
to the extent set forth above, but not all of its Distribution Expenses,
Licensor shall be entitled to its twenty percent (20%) share of North
American Subterritory Theatrical Gross Receipts pursuant to Section 4.1.1
above.
6. SPC shall have the full and unfettered right in its sole discretion to
advertise, publicize and otherwise exploit the Picture and all rights
granted to SPC hereunder and to cause or permit others to do so in any
manner, provided that (a) within nine (9) months of the initial
theatrical release date, the Picture shall be released theatrically by
SPC in the top ten (10) and an additional twenty five (25) of the top
fifty (50) A.D.I. markets in the Territory, which markets shall be
mutually determined by SPC and Licensor, (b) upon Licensor's request, SPC
shall meaningfully consult with Licensor on a timely advance basis
regarding the initial U.S. theatrical marketing campaign materials and
release pattern for the Picture, provided that SPC's decisions in
connection therewith shall be controlling, (c) subject to Section 6
below, SPC shall meaningfully consult with Licensor on a timely advance
basis with respect to the U.S. video marketing campaign for the Picture,
(d) SPC and Licensor shall mutually agree with respect to marketing and
advertising to the "hard core" market (as defined on the attached Rider
A), provided that Licensor shall pay for a portion of the costs and
expenses for SPC's advertising and publicity campaign for the "hard core"
market, subject to good faith negotiations with respect to such share,
(e) solely with respect to third party theatrical sublicensing (if any)
(i.e., excluding theatrical distribution, exhibition, and marketing
activities by affiliates of SPC), SPC's direct distribution costs and
expenses with respect to any such theatrical sublicenses shall not exceed
$50,000, unless otherwise agreed between the parties (it being understood
that there shall be no restrictions with respect to any costs and
expenses incurred by any such
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subdistributors), and (f) Licensor shall have approval, such approval not
to be unreasonably withheld, regarding any proposed subdistribution
agreements of any video rights granted hereunder, it being understood
that SPC may sublicense video rights to video clubs, in Canada, and in
the South African subterritory without such approval. SPC shall not
sublicense the video rights hereunder, nor shall it sublicense airline
rights. Notwithstanding any other provisions to the contrary in this
Agreement, SPC shall not incur in excess of (i) $25,000 with respect to
North American Subterritory television distribution costs and expenses,
and (ii) $50,000 with respect to International Subterritory television
distribution costs and expenses, it being agreed that any additional
television distribution costs and expenses shall be subject to mutual
approval of the parties. Licensor shall promptly notify SPC of any
contractual limitations on, or third-party rights (e.g., a consultation
right) triggered by, SPC's exercise of the aforesaid advertising,
publicity and exploitation rights. Notwithstanding any limitations in the
agreements for any persons rendering services or granting rights in
connection with the Picture ("Persons") to the contrary, Licensor shall
use its reasonable efforts to cause Xxxxx Xxxxxxx, Xxxx Xxxx, Xxxx Xx,
and Xxxxx Steyczk, to be available and cooperate with SPC's efforts in
publicizing and promoting the Picture, including making personal
appearances and meeting with journalists to promote the Picture; provided
that any costs and expenses in connection therewith shall be advanced by
SPC and recouped as distribution expenses hereunder.
7. Solely for purposes of selling commercial video devices to consumers,
Licensor shall be entitled to purchase Home Video Devices of the Picture
directly from CTHV at CTHV's prevailing wholesale price for the retail
class of trade or, if applicable, as a wholesaler, provided that Licensor
qualifies for such status as follows: (a) Licensor must purchase, on an
annual basis, no less than US$250,000 of devices, and (b) Licensor meets
CTHV's credit worthiness standards based on financial and credit reports.
Upon Licensor's qualification, it shall qualify for video co-op
advertising funds and a return program from CTHV at levels consistent
with the policies and procedures of the applicable class of trade. In the
event that Licensor's is unable to purchase US$250,000 of home video
devices in a given year, Licensor shall have the right to purchase such
devices on a pre-paid basis at the same prices set forth above, and
subject to the same return policy. As part of the U.S. video marketing
plan, SPC and/or CTHV (as SPC shall designate) and Licensor shall
mutually determine the retail outlets to be controlled by Licensor for
purposes of video sales activities for the Picture.
8. At such time, if ever, as such become commercially available, SPC shall
provide to Licensor a total of twenty-five (25) copies of the Picture, on
videocassette and/or DVD based on available inventory, as generally
released on videocassette and/or DVD.
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9. SPC's obligations hereunder shall be subject to, and conditioned upon,
SPC's receipt and approval (such approval or disapproval to be given
within 30 days of the receipt thereof) of the following:
9.1. All chain of title documents, including, but not limited to, the
assignment of rights in and to the underlying property (if any) to
Licensor, the assignment of rights in and to the screenplay (if
any) to Licensor, the certificate of authorship from the
writer(s), all agreements with respect to the music utilized in
the Picture (including usage in context for all such music
throughout the Territory during the Term) and trailers and the
documents establishing Licensor's rights in the Picture (including
personal releases, film clip and photo licenses) throughout the
Term hereof. SPC, in its sole discretion, may select a reasonable
number of music cues from the Picture for out-of-context
advertising, publicity, and promotion, and Licensor shall obtain,
at its sole cost, the out-of-context rights for such cues;
9.2. All documents (and other materials) necessary (i) to establish
Licensor's valid copyright (under applicable law) of the Picture
throughout the Term hereof; and (ii) for SPC to file in the U.S.
and Canadian Copyright Offices and elsewhere throughout the
Territory, all documents (and other materials) necessary to
memorialize the grant of the license of Rights to SPC hereunder,
provided, that if any such documents are to be provided by SPC,
SPC furnishes them promptly to Licensor;
9.3. A policy of errors and omissions insurance covering any liability
of Company (and, if Company is not the owner of the Picture, such
owner) with respect to the Picture. Such Insurance shall (a) name
SPC as an additional insured, (b) have a minimum policy coverage
of Three Million Dollars ($3,000,000) for all claims in the
aggregate, and (c) continue for a period of at least three years
following SPC's release of the Picture, provided that in the event
that Licensor's policy shall expire earlier than described above,
SPC may require Licensor to extend such policy provided that SPC
shall pay the cost thereof and treat any such cost as a Specified
Cost, such term to be reasonably approved by SPC, but not in
excess of three (3) years from release; and
9.4. All 35mm laboratory materials, print and pre-print materials, lab
access letters and other delivery items reasonably necessary or
desirable for the release and exploitation of the Picture.
10. SPC agrees to provide Licensor with quarterly accountings, reflecting
each of the respective rights categories licensed hereunder (e.g.,
Theatrical Rights, Non-Theatrical Rights, Home Video Rights, Pay
Television Rights, and Free Television Rights),
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rendered approximately sixty (60) days after the close of the applicable
quarter, together with payments thereon, if any, for the first three (3)
years following initial release of the Picture. Thereafter, statements
and payments shall be rendered not less frequently than semi-annually. It
is acknowledged that the long-form agreement shall provide Licensor with
customary audit rights (which such rights are herein granted) and include
provisions with regard to the finality of statements insofar as they
pertain to the Picture, which shall be subject to good faith negotiation.
All monies payable by SPC to Licensor hereunder shall be paid by check,
drawn on a United States bank in United States dollars and shall be less
any withholding or other taxes required to be deducted by SPC pursuant to
U.S. law, if any.
11. Licensor represents and warrants that (a) Licensor has sole and full
power and authority to grant the Rights being granted to SPC hereunder,
(b) the Rights being granted to SPC hereunder have not been previously
sold, conveyed or encumbered to any other third party, (c) to the best of
Licensor's knowledge in the exercise of due diligence, there are, and
will be, no claims, liens, encumbrances, limitations, restrictions or
rights of any nature in or to the Picture or any part thereof (except for
customary bank, bond, and guild liens, if any) which can, will or might
impair or interfere with the rights of SPC hereunder (including, without
limitation, any liens or security interests in favor of any bank or other
third party which may have provided production financing for the
Picture); and (d) the Picture and each and every part thereof, including
the sound and music synchronized therewith, and the exercise by SPC of
any and all rights of SPC hereunder with respect thereto, will not
violate or infringe upon the trademark, tradename, copyright, patent,
literary, dramatic, music, artistic, personal, civil or property right,
right of privacy, or any other right or interest of any party, or
constitute a libel or slander or defamation or invasion of privacy or
unfair competition of or with respect to any party, (e) to the extent the
Picture or the underlying property is based upon, or related to, events
in the life of a real person, living or dead, Licensor has obtained all
personal releases and other rights necessary to permit SPC to exploit the
Picture in the manner provided herein without violating any third party
rights or incurring any obligation to any third party, and Licensor shall
provide true and correct copies of such personal releases to SPC as part
of the chain-of-title documents hereunder, it being understood that
certain clips utilized in the Picture are not available for
out-of-context advertising and publicity use; (f) the Picture, as
delivered to SPC, shall qualify for an MPAA rating no less restrictive
than "R," and shall have a running time of no less than 80 minutes,
excluding credits, and (g) SPC, in the exercise of the Rights granted to
it hereunder or as a result of the exploitation of the Picture, will not
be requested or obligated to make any payment to any third party involved
in the production of the Picture or who rendered services or granted
rights in connection therewith (whether as a share in the receipts of the
Picture, or otherwise), other than customary music small performing fees.
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12. SPC represents and warrants that (a) it shall not alter or remove the
copyright notice or the main and end title credits of the Picture, and
(b) subject to Section 6 hereof, it will not license clips or music from
the Picture for commercial purposes, unless such use is connected with
the Picture or a Person associated with the Picture.
13. The parties hereto hereby acknowledge and agree that this Agreement, and
all information contained in this Agreement, not otherwise known to the
public, is confidential and proprietary and neither party shall disclose
any provision hereof to third persons without the prior written consent
of the other party hereto, which shall not be unreasonably withheld or
delayed. Neither party shall disclose such information to any third party
(other than to officers, directors, employees and agents of either party
or the affiliates thereof) except:
13.1. To the extent necessary to comply with any law or order of a
governmental agency or court of competent jurisdiction or as part
of its normal reporting or review procedure to regulatory
agencies;
13.2. As part of its normal reporting or review procedure by its parent
company, its auditors or its attorneys; or
13.3. To the extent necessary to obtain appropriate insurance, to its
insurance agent or carrier.
14. Nothing herein shall be construed as barring or restricting SPC (or its
affiliates) from (i) issuing customary advertising, promotional and
publicity materials in connection with the distribution of the Picture,
subject to the terms of Section 6 above; (ii) providing its
subdistributors and the like with customary information required in the
normal course of business (including, without limitation, the term and
nature of SPC's rights hereunder); or (iii) complying with an audit by
any party having audit rights in connection with SPC's distribution of
the Picture.
15. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA AS
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN, AND WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OR CHOICE OF LAWS THEREOF.
THE PARTIES HERETO AGREE THAT ANY ACTIONS AT LAW OR IN EQUITY RELATING TO
THIS AGREEMENT OR OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT WITHIN THE STATE OF CALIFORNIA, AND
THE PARTIES IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH
COURT TO RECEIPT OF SERVICE OF PROCESS TO APPEAR BEFORE SUCH COURT.
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16. The parties hereto agree that any dispute or controversy relating to any
of the matters referred to above other than delivery matters shall be
determined by binding arbitration on an expedited basis by a panel of
three arbitrators with substantial motion picture experience in Los
Angeles, one (1) of such arbitrators to be selected by each of Licensor
and SPC (the "Picked Arbitrators") within five (5) days of the
notification (one party to the other) of the existence of a dispute
hereunder, and the third such arbitrator to be selected by the Picked
Arbitrators within five (5) days of their selection. Such arbitration
shall be held in accordance with the then current Commercial Rules of the
American Arbitration Association, all costs and expenses (including
reasonable attorney's fees) of such arbitration to be borne by the losing
party as determined by the arbitration panel. The parties shall not be
entitled to conduct discovery unless (a) the material sought is directly
relevant to the issues in dispute and the Arbitrators make a finding of
both necessity and good cause for such discovery, or (b) the parties
agree on such discovery. In any event, the arbitration shall be concluded
within ten (10) days of the selection of the third arbitrator as set
forth above. All arbitration proceedings shall be closed to the public
and confidential and all records relating thereto shall be sealed.
17. The foregoing shall constitute the basic terms of the Agreement between
the parties with respect to the Picture. Any remaining terms of the
Agreement shall be in accordance with SPC's current standard terms and
conditions (the "Standard Terms") incorporated herein by reference,
subject to good faith negotiations, but this Agreement shall be fully
binding on the parties unless and until the long-form agreement shall be
executed. In the event of a conflict between the terms of this Agreement
and the Standard Terms, the terms of this Agreement shall control. No
modifications, alterations or amendment of this Agreement shall be valid
or binding unless it is in writing and signed by the parties hereto.
Please signify your acceptance and approval of this Agreement in the appropriate
space below.
Very truly yours, Accepted and Agreed:
SONY PICTURES CLASSICS INC. VANS, INC.
By: /s/ XXXXXXX XXXXXX By: /s/ XXXXX X. XXXXXXXX
------------------------------- ----------------------------------
Xxxxxxx Xxxxxx Its: Vice President & General Counsel
Co-President --------------------------------
Its Authorized Signatory
cc: X. Xxxxxxx/X. Xxxxx/X. Xxxxxx - SPC
X. Xxxx/X. Xxxxxxx/X. Xxxxxxxx - SPE Legal
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