EXHIBIT 10.40
[SABAN LETTERHEAD]
As of January 1, 1995
DUVEEN TRADING LTD.
c/o The Directors
00 Xxxxx Xxxxxx
Xx. Xxxxxx
Xxxxxx
Channel Islands
Gentlemen:
This letter when fully signed shall constitute an agreement between Duveen
Trading Ltd. ("Distributor"), and Xxxxx International N.V. ("Owner").
1. (a) Owner hereby appoints Distributor, and Distributor hereby accepts such
appointment, as Owner's sole and exclusive distributor in the "Territory",
as hereinafter defined, of "Photoplays", as hereinafter defined, for which
and to the extent Owner owns or controls exploitation rights in the
Territory during the "Term" hereof, as hereinafter defined.
(b) "Photoplays" means all of Owner's television and motion picture
programming in which Owner has, or during the Term acquires, any
exploitation rights in the Territory, including, without limitation, all of
Owner's audiovisual and merchandising rights therein; provided, however,
that nothing in this agreement shall be deemed to transfer to Distributor
any ownership in any Photoplays or in the copyrights or trademarks therein.
From time to time during the Term, Owner shall provide Distributor with a
list of newly-produced and newly-acquired Photoplays and the exploitation
rights available therein for exercise in the Territory.
(c) Owner shall have the right to approve all marketing and promotional
materials, including artwork, formulated by Distributor or any third party
for the Photoplays. Distributor shall provide Owner, not less frequently
than each calendar quarter, with copies of Distributor's exploitation
agreements with third parties for the Photoplays.
(d) Distributors shall not use any sub-agent without the prior written
approval of Owner, which Owner may give or withhold in its sole discretion.
2. The Territory is Israel, including the West Bank and Gaza.
3. The Term commences on January 1, 1995, and ends on December 31, 1997,
subject to extension pursuant to paragraph 4 hereof. After the expiration
of the Term, Distributor's obligations and agreements under this Agreement
shall continue with respect to all exhibition agreements entered into
hereunder during the Term.
4. Owner shall have the right to extend the Term through December 31, 2000, by
giving Distributor written notice thereof not later than October 31, 1997.
5. (a) In consideration of the grant of distribution rights in Owner's
Photoplays herein during the initial three (3) year Term, Distributor shall
pay Owner the sum of Five Hundred Thousand United States Dollars (US$.
500,000), payable in full when this letter agreement is fully signed.
(b) If Owner exercises its option to extend the Term for an additional
three (3) years, in consideration of the grant of distribution rights in
Owner's Photoplays during such extended Term, Distributor shall pay Owner
the sum of Five Hundred Fifty Thousand United States Dollars (US$.
550,000), payable in full on or before January 1, 1998.
6. Distributor shall bear all costs of every kind and nature in connection
with Distributor's exercise of the distribution rights granted herein.
7. Upon expiration of this Agreement, all print, preprint, sales, and
publicity material supplied by Owner to Distributor shall be returned to
Owner or Owner's designee in the same condition as received by
Distributors, ordinary wear and tear excepted.
8. All transportation and shipping costs incurred in sending Photoplays to
Distributor will be paid by Owner unless pursuant to any exhibition
agreement which provides for materials to be accepted by the lessee thereof
on a collect basis. All transportation and shipping costs incurred in
returning Photoplays to Owner will be paid by Distributor unless pursuant
to any exhibition agreement which provides for materials to be returned at
the lessee's cost.
9. Distributor warrants and represents that Distributor shall not solicit,
offer, or enter into agreement exploiting any rights in any of the
Photoplays outside the Territory or after the Term, and Distributor shall
hold Owner harmless from and against all losses, costs, and damages of
every kind arising from Distributor's breach of this provision or any other
provision of this letter agreement.
10. Owner warrants and represents that it owns or controls, or with respect to
Photoplays produced or acquired during the Term, shall own or control, all
exploitation rights in each Photoplay as to which Owner gives Distributor
notice, and that no such Photoplay will infringe the legally redressable
rights of any third party in the Territory, and Owner shall hold
Distributor harmless from and against all losses, costs, and damages of
every kind arising from Owner's breach of this provision or any other
provision of this letter agreement.
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11. Distributor shall take all necessary steps and pay any and all fees
necessary or required to protect the Photoplays and the materials by
copyright in the Territory. If Owner requests, Distributor shall obtain a
copyright for the Photoplays in the Territory in such name as Owner shall
designate but in no other name. If, with or without Owner's permission,
such copyrights are obtained in Distributor's name, Distributor shall hold
such copyright in trust for the benefit of Owner, or such other party as
Owner designates, and, upon expiration of the Term or upon Owner's demand,
if sooner, all rights in and to such copyright shall be conveyed without
delay to Owner or its designee, as the case may be. Distributor shall
promptly notify Owner in writing of any infringement in the Territory of
the copyright or of the trademarks used in connection with the Photoplays
and, subject to Owner's direction, shall take any and all actions in the
name of Owner, Distributor, or any other parties designated by Owner, to
prevent and restrain any such infringement. Owner or a party designated by
Owner shall own the copyright throughout the universe for all elements
added to the Photoplays by Distributor or any lessees, including, without
limitation, foreign language or subtitle elements, and adaptations.
Notwithstanding anything to the contrary set forth herein, neither
Distributor nor any of its lessees of the Photoplays shall remove or
replace any music embodied in the soundtrack of any Photoplay.
12. In the event of any breach by Owner of this Agreement, Distributor shall be
limited to its remedy at law for damages, if any, and Distributor shall not
have the right to terminate or rescind this Agreement or to in any way
enjoin, restrain, or otherwise interfere with the production, distribution,
advertising, or exploitation of the Photoplays, whether by Owner or any of
Owner's assigns or designees.
13. This letter agreement shall be governed by and construed in accordance with
the laws of the Netherlands Antilles applicable to contracts entered into
and entirely performed therein, and courts located in the Netherlands
Antilles shall have sole and exclusive jurisdiction over resolution of any
dispute arising under this letter agreement. The terms set forth in this
letter agreement constitute the entire understanding between the parties
hereto with respect to the subject matter hereof, and no waiver or
modification of the terms shall be valid unless in writing signed by the
party to be charged and only to the extent therein set forth. Distributor
may not assign any rights granted by Owner herein. All other terms shall
be in accordance with Owner's standard terms for agreements of this nature,
subject only to such changes as are agreed to in writing following good
faith negotiation.
The parties hereto acknowledge and agree to the terms and conditions set forth
above.
AGREED TO AND ACCEPTED:
DUVEEN TRADING LTD. SABAN INTERNATIONAL N.V.
/s/ Signed - Illegible Signature /s/ X.X. xx Xxxx
-------------------------------- ------------------
By By X.X. xx XXXX
Its Director Its Managing Director
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