Exhibit 10.12
TAG ENTERTAINMENT, INC.
Distribution Agreement- Worldwide- Home Entertainment
This Agreement ("Agreement") is made and entered into as of __ day
of
_______ 200_, between _______________, Limited Partnership (the
"Owner") and TAG
Entertainment, Inc. (the "Licensee") and the parties agree as
follows:
1. Picture Involved: The program, which is the subject of this
Agreement,
is the feature length theatrical film entitled "_____________" (the
"Picture").
2. Rights Granted:
2.1 The media for which rights are granted to Licensee under this
agreement
are all audio/visual methods, devices, instruments and systems, now
known or
subsequently discovered or devised, intended primarily for private
viewing,
including but not limited to video cassettes, video discs, laser
discs, digital
versatile discs (DVD), CD-ROM, or other devices, whether now known
or hereafter
discovered or devised, on which is recorded a program which can be
exhibited
visually, with or without sound, through a television-type playback
system or
device, computer and digital drive. in-home wireless playback, or
any means of
display or transmission now known or hereafter developed ("Video
Device(s)").
The licensed uses expressly and specifically exclude closed-circuit
exhibition
and "pay-per-view" exhibition (as those terms are understood in the
television
industry), sound recordings (e.g., phono records and audio
cassettes), 16mm and
35mm film, and institutional use, including but not limited to any
exhibition in
public or common areas (except for any in-store or point-of-sale
exhibition or
exhibition in connection with Licensee's advertising, testing and
demonstrating
activities, as more fully set forth in Paragraph 2.5 below).
2.2 Owner grants to Licensee the exclusive right under copyright to
manufacture and have manufactured Video Devices containing the
Picture; to sell,
lease, license, sublicense, rent, distribute, advertise, publicize,
otherwise
market, exhibit and exploit by any means and under any trade names,
trademarks
and labels on a sale or rental basis or to refrain from any such
activities,
such Video Devices of the Picture under Owner's title (or a
translation of it)
in each country of the Licensed Area, and to license, sublicense,
and otherwise
authorize others to do so. During the Term or any extension and
Sell-Off Period
(as defined below in Paragraph 4.4), Owner agrees not to grant any
right, title
or interest in the Picture to any person, firm or corporation other
than
Licensee for use on or in connection with Video Devices in the
Licensed Area.
2.3 Licensee or its licensees shall reproduce and incorporate the
Picture
onto a Video Device in its entirety in the form delivered by Owner
to Licensee.
Licensee shall not cut, change, alter, omit or edit in any manner
whatsoever the
title of the Picture, or the credits, or other materials contained
in it,
without the prior written
1
approval of Owner; provided, however, that Licensee shall be
entitled in its
discretion to add sub-titles and make translations of dialogue and
written
materials used in connection with the Picture in connection with
its
exploitation in various countries within the Licensed Area,
provided, however,
if Owner has or obtains access to such materials it shall supply
the same to
Licensee at no cost or expense to Licensee. Licensee shall have the
right to
incorporate onto the Video Devices preceding and/or following the
main and end
titles of the Picture, Licensee's name, trademark and logos, or any
of them, and
Licensee's standard "opening" and "closing" sequences, which shall
consist of an
introductory visual "logo," with or without music, and any legal
notices or
other necessary information. Notwithstanding the foregoing,
Licensee shall have
the right in its discretion to make any and all changes and
modifications in the
Picture which Licensee shall determine to be necessary or desirable
by reason of
rulings, regulations or requirements of censorship or other legally
constituted
governmental or other authorities. Owner shall cooperate with
Licensee to clear
customs and censorship or equivalent authorities in each country of
the Licensed
Area.
2.4 Subject to Paragraph 2.5, the rights granted to Licensee here
do not
include the right to authorize the use of such Video Devices for
viewing in any
place where an admission fee is charged, or for viewing over any
television
broadcast or cable system, whether free or pay, or for theatrical
exhibition.
All rights not expressly granted to Licensee under this agreement
are reserved
to Owner.
2.5 Licensee shall have sole, full and complete discretion
concerning the
manufacture, distribution, marketing and other exploitation of all
Video Devices
containing the Picture. Owner agrees that the good faith judgment
of Licensee
and its sub distributors in regard to any matter affecting the
manufacture,
distribution or marketing of Video Devices containing the Picture
(including,
but not limited to, a determination of the quantity, if any, of
Video Devices to
be manufactured with respect to the Picture) shall be binding and
conclusive
upon Owner. Licensee shall also have the right to use the Picture
or portions of
it, for the purposes of advertising, publicizing and otherwise
promoting,
testing and demonstrating Video Devices containing the Picture and
the Video
Device playback systems or devices, and to broadcast excerpts for
such purposes
in any media or authorize others to do the same.
2.6 To the extent of Owner's rights as described in the materials
delivered
to Licensee pursuant to Paragraph 5.2(iv), Licensee shall have the
right without
any liability to any person, to use and to authorize others to use
the title of
the Picture; the names (including any professional names or
sobriquets),
likenesses (including pictures, portraits, and caricatures), and
biographical
material of the performers, producers, directors, writers and other
contributors
to the Picture, promotional material and artwork used in connection
with the
Picture as well as sets, designs, wardrobes and events, and the
story line (if
any) of the Picture (provided that the story line must be in
synopsis form, and
may not be offered for sale), in the
2
distribution, advertising, publicity and promotion of any Video
Device
containing the Picture.
2.7 Under no circumstances shall Licensee be liable or responsible
for any
breach of contract on the part of any of its customers, nor for any
exhibition
not authorized by Licensee, or use of any of the Video Devices by
any third
party; provided, however, that Licensee will cooperate with Owner
to the extent
practicable in combating any such uses.
2.8 Licensee shall have the right to incorporate onto the Video
Devices
preceding and/or following the main and end titles of the Picture,
Licensee's or
any of Licensee's sublicensees', affiliates' and affiliated
licensees' names,
trademarks and logos, or any of them, trailers of other films
distributed by
Licensee and Licensee's standard "opening" and "closing" sequences,
including an
introductory visual "logo," with or without music, and any legal
notices or
other necessary information as Licensee may determine. Licensee
shall cause to
be stamped or imprinted on the Video Devices of the Picture, or
their packaging,
a copyright notice in the form prescribed by Owner. Licensee shall
not at any
time delete, nor authorize the deletion of, the copyright notice
which appears
on the Picture when delivered to Licensee and Licensee is
prohibited from
releasing any Video Device containing the Picture without such
copyright notice
so affixed.
2.9 Licensee shall have the right to include more than one Picture
whether
acquired under this agreement or otherwise on any Video Device.
2.10 INTENTIONALLY DELETED
3. Licensed Area: The Licensed Area for which rights are granted
under this
agreement is the Universe.
4. Term of Rights:
4.1 The Term with respect to Video Devices of the Picture shall
mean the
period commencing on the date here and expiring on the date Twenty
(20) years
from Delivery as described in Paragraph 5 (the "Term").
4.2 At any time during the last six-month period prior to the end
of the
Term of this Agreement, Owner agrees to present to Licensee in
writing an offer
of terms (the "Offer") pursuant to which the rights granted under
this Agreement
may be extended for an additional Term. Thereafter, the parties
agree to
negotiate in good faith a written agreement for the extension of
these rights.
In the event that the parties cannot within sixty (60) days after
the receipt by
Licensee of the Offer, reach a mutually satisfactory agreement,
Owner shall be
free thereafter to make offers to and/or receive offers from other
parties with
respect to the rights granted under this agreement, and to enter
into agreements
with respect to it; provided that, with
3
respect to the Picture covered by this Agreement, Owner shall
notify Licensee in
writing of the terms of any bona fide offer which Owner may desire
to make or
accept from a third party with respect to the rights of the
Picture. Within ten
(10) days after Licensee's receipt of any such notice, Licensee
shall advise
Owner, in writing, of Licensee's election to make an agreement with
respect to
such rights on the terms set forth in such notice and the parties
shall proceed
as promptly as possible to conclude a written agreement on terms
substantially
the same as those set forth in such notice.
4.3 Licensee shall have the right for six (6) months following the
end of
the Term or any extensions of it (the "Sell-Off Period") to offer
for sale and
sell, lease, license, rent, distribute, advertise, and otherwise
market any
Video Device previously manufactured pursuant to the rights granted
here.
Notwithstanding termination of rights under this agreement,
Licensee shall have
the right to receive the proceeds from all such sales made during
the Sell-Off
Period and to apply and account for such proceeds as subsequently
provided.
Licensee shall not authorize or cause the manufacture of Video
Devices
containing the Picture following the end of the Term. At the end of
the Sell-Off
Period, Licensee shall, at Owner's election:
(i) Destroy any remaining inventory of Video Devices made in
accordance with the rights granted under this agreement, and
furnish to
Owner an appropriate certification of destruction evidencing same;
or
(ii) Sell to Owner the entire inventory then in Licensee's
possession
of such Video Devices, at Licensee's prevailing average closeout
price for
similar programs.
5. Delivery of Materials:
5.1 Within ten (10) days following the execution of this agreement
or the
availability to Owner of the materials herein described; whichever
comes last;
Owner shall deliver at Owner's expense the materials described in
Paragraph 5.2
to a laboratory of Licensee's choice and coincidentally deliver the
materials
described in Paragraph 5.2(i) through (vi) to Licensee's office at
4130 Cahuenga
Boulevard, 2nd Floor, Universal City, CA 91602 (the "Materials").
Licensee shall
review the Materials after delivery. If Licensee should determine
that any
delivered tape of the Picture is not technically suitable for its
purposes under
this agreement, then Licensee shall have the right to require Owner
to cause a
new first- class tape to be made and delivered to Licensee, such
tape to be
suitable for mastering Video Devices that meet the technical
standards of
Licensee, and Owner shall pay the cost of striking such tape,
including any
required preprint material.
5.2 Owner shall deliver to Licensee, in accordance with directions
from and
in consultation with Licensee, access to the original one-inch (1")
or Digi-Beta
or D-3 (as the case may be) videotape edited master, and a separate
stereo
soundtrack of
4
the Picture, from which Licensee shall cause to be transferred a
master
videotape for its use in manufacturing Video Devices under this
agreement. All
tapes provided to Licensee shall be color-balanced composite tapes,
free from
scratches, fully edited and assembled, main and end titled with the
stereo
soundtrack recorded on it in synchronization with the photographic
action and
with such proper color and shading intensity as is customarily
required for
network television exhibition. The separate soundtrack shall be
unused, splice
free, and in technically perfect synchronization with the
photographic action.
If originally recorded in the English language, Owner shall deliver
to Licensee
as many dubbed and/or subtitled foreign language versions as
Licensee may
request and as Owner may have available. If in Licensee's
discretion it
determines that Materials are incomplete or unacceptable, Licensee
shall notify
Owner of any defect(s) in Materials. In the event that Owner fails
to cure such
defective Materials within ten (10) days following such notice,
Licensee may
supply for itself any such Materials and treat the costs as
Advances. Delivery
of Materials shall be deemed complete when Licensee has approved
all of the
Materials by written notice to Owner. The date of such notice shall
constitute
the date of Delivery for all purposes here ("Delivery"). Licensee
shall retain
such Materials until the end of the Term, at which time they shall
be returned
to Owner.
(i) Upon request by Licensee. Owner shall provide Licensee with one
copy of the synchronization licenses permitting the reproduction on
Video
Devices of each musical composition embodied in the Picture, one
copy of
the customary music cue sheet for the Picture and one copy of all
relevant
contracts and agreements including but not limited to master
recording
licenses. All licenses shall be and remain in full force and
effect, and
shall permit the reproduction and distribution of each such musical
composition on Video Devices throughout the Licensed Area during
the Term.
Delivery of such synchronization licenses and master recording
licenses to
Licensee shall not relieve Owner of its warranties made in
Paragraph 9 of
the Agreement and shall not in any way affect Licensee's rights
under this
agreement in the event of a breach of such warranties evidencing
Owner's
ownership and rights in and to the Picture.
(ii) Owner shall provide Licensee with a list specifying Owner's
contractual requirements to give advertising or other credits to
persons
who rendered services or furnished materials for the Picture and a
list of
any restrictions of the type referred to in Paragraph 2.6 here, and
Licensee agrees to comply.
(iii) If and when requested by Licensee, Owner shall make
available,
for copying and use by Licensee, such stills, domestic and foreign
advertising materials, and manuals and other materials concerning
the
Picture including but not limited to a list of the cast and the
roles they
portrayed, a dialogue continuity script, pressbook, synopsis of
story,
original color artwork and black and white stills that Owner may
have in
its possession or to which it has access and that Licensee desires
to use
for or in connection with the exploitation of the rights granted
Licensee
under this agreement.
5
(iv) Title to all tapes and other elements made available by Owner
to
Licensee under this agreement shall be and remain vested in Owner,
subject
to the rights of Licensee to use the same in producing masters, and
other
reproduction materials and all intermediate materials and Video
Devices
under this agreement. Title to other material delivered by Owner
shall
similarly be and remain vested in Owner, subject to the right of
Licensee
to make use of such material for such reproduction and other
purposes as
are permitted by this Agreement; provided, however,
