Direct Negative Cost definition
Direct Negative Cost means, with respect to a Motion Picture, (i) the aggregate of all out-of-pocket costs, charges and expenses incurred by the Development Company, MSI or the applicable Production Company in connection with the development, preparation, production, post-production, completion and delivery of such Motion Picture reduced by (ii) any Co-Financing Amounts. Except as provided in the following sentence, “Direct Negative Cost” shall not include any overhead costs of MPROD or any Marvel Company. Up to two percent (2%) of the Direct Negative Cost for a Motion Picture may consist of overhead for MPROD and any Marvel Company, which amount shall include the costs and expenses, including the allocable portion of employment compensation and benefits, for incremental contracted personnel hired by MPROD or any Marvel Company to work principally on the Motion Pictures being produced for MVL and to perform the obligations of the Master Distributor hereunder; provided, that the amounts in clause (ii) above shall not constitute reductions to the Direct Negative Cost of a Motion Picture for purposes of calculating such two percent (2%) cap. The costs and expenses described in the preceding sentence shall include costs and expenses under cost-sharing agreements between MPROD and any Marvel Company under which MPROD reimburses such Marvel Company for the costs and expenses incurred by such Marvel Company in providing its employees’ services to MPROD or the applicable Production Company principally on the Motion Pictures being produced for MVL and to perform the obligations of the Master Distributor hereunder. Such cost and expenses shall be calculated based upon the portion of such employees’ employment compensation and benefits accrued by such Marvel Company for the period during which their services are required by MPROD or the applicable Production Company (as reasonably estimated by such Marvel Company on an hourly basis). The foregoing limitation on overhead shall not limit the overhead that may be charged by the applicable Production Company with respect to any Motion Picture.
Direct Negative Cost means, with respect to a Motion Picture, all out-of-pocket costs and expenses directly related to such Motion Picture, in connection with the financing, development, production, completion and delivery of such Motion Picture.
Direct Negative Cost shall have the meaning set forth in the Master Agreement.