EXHIBIT 10.38 DISTRIBUTION AGREEMENT

Distribution Agreement

You are currently viewing:

This Distribution Agreement involves

TM FILM DISTRIBUTION INC. | KEYDATA MEDIA & MARKETING 1 LLP

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: EXHIBIT 10.38 DISTRIBUTION AGREEMENT
Date: 1/31/2005

<PAGE>

EXHIBIT 10.38

DISTRIBUTION AGREEMENT

THIS AGREEMENT is made the day of October, 2004

BETWEEN:

(1) KEYDATA MEDIA & MARKETING 1 LLP whose registered office is at 4 Bedford

Row, London WC1R 4DF (registered in England noOC308423) (the 'Partnership')

and

(2) TM FILM DISTRIBUTION INC. whose office is situated at 101 Charles Drive,

Bryn Mawr PA 19010 USA (the 'Distributor')

RECITALS

(A) The Partnership owns or controls certain rights in films.

(B) The Partnership and the Distributor wish to enter into arrangements for the

distribution and exploitation of films upon the terms and conditions and

for the consideration set forth herein.

DEFINITIONS AND INTERPRETATION

The following definitions apply in this Agreement:

'Accounting Date' 60 days from the end of each Accounting Period

during the Term

'Accounting Period' successive 3 monthly periods ending on 31 March

30 June 30 September and 31 December in each

year

'Agreement' this agreement and any and all schedules

annexures and exhibits attached to it or

incorporated in it by reference

'Airline Rights' the right to show or play the Films by any

manner or means or make available Videograms to

passengers on aircraft registered in any

country in the Territory

<PAGE>

'Average Occupants' in respect of any hotel motel or similar

establishment or other residential unit or

other dwelling whatever not being a private

residence the average number of persons

resident during any month

'Basic Cable' a group of Cable Television Channels selected

by or supplied to any Cable Television

Subscriber with or without Interactive Services

in consideration for a single aggregate

subscription or other periodic or other fee

charged by the Cable Operator which is not

allocated or apportioned to any channel

'Basic Satellite' a group of Satellite Television Channels

selected by or supplied to any Satellite

Television Subscriber in consideration for a

single aggregate subscription or other periodic

or other fee charged by the Satellite Operator

which is not allocated or apportioned to any

channel

'Broadcast' any transmission by Wireless Telegraphy which

is transmitted for presentation to and capable

of lawful reception by members of the public

and which originates from any terrestrial

station in the Territory which shall include

Secondary Transmission by Wireless Telegraphy

or from a satellite of any signals transmitted

to such satellite from the Territory and shall

include Secondary Transmission by means of MVDS

and by means of cable or satellite pursuant to

the provisions of the Cable and Broadcasting

Act 1984, section 13(1), and the Broadcasting

Act 1990, section 134, Schedule 12, Part III,

<PAGE>

paragraph 444, or any amending or replacing or

analogous legislation but shall exclude

Secondary Transmission whether by Cable

Television Satellite Television MVDS Wireless

Telegraphy or any other means of any

transmission originating directly or indirectly

outside the Territory

'Cable Operator' any person firm or Partnership licensed by the

Department of Trade and Industry and/or the

Independent Television Commission and/or their

successor bodies or equivalent bodies pursuant

to the laws of any country to provide Cable

Programme Services

'Cable Programme Service' has the meaning ascribed to it in the

'Cable Television' Basic Cable and/or Pay Cable

'Cable Television Channel' any Cable Programme Service provided by a Cable

Operator

'Cable Television Rights' the right to authorise the exploitation of the

Film by Cable Television or Pay Cable

'Cable Television Subscriber' any Subscriber to a Cable Television Channel

'Channel' any Cable Television Channel or Satellite

Television Channel

'Delivery' delivery of the Delivery Material in accordance

with clause 7

'Delivery Date' the number of days after completion of each

Film as agreed between the parties

<PAGE>

'Delivery Material' the delivery material in respect of the Films

specified in Schedule 1 including without

limitation any Publicity Material referred to

in such schedule

'Distribution Expenses' any distribution expenses to the extent the

Distributor shall have produced vouchers or

other evidence satisfactory to the Partnership

of its expenditure approved by the Partnership

being of the type short particulars of which

are contained in Schedule 2 including the

Minimum Advertising Expenditure

"Distributor Loans" Loans which may be required by the Partnership

to be made by the Distributor to the

Partnership of amounts equal to the excess (if

any) of the amount specified in Schedule 5 for

the year in question over the amount of the

Partnership's share of Gross Receipts for that

year

'Films' the monochrome or colourcinema or television

films short particulars of which are contained

in Schedule 3 and such other films as the

Partnership may determine in its sole

discretion shall be made subject to the terms

of this Agreement as the same shall be

identified by Appendices to this Agreement as

signed by the parties from time to time

'Free Television' any Broadcast capable of reception without the

use of any decoding decrypting or similar

device by means of a standard television set

aerial or roof top aerial and/or any Broadcast

provided by

<PAGE>

Secondary Transmission by a Cable Operator

pursuant to the Broadcasting Act 1990 or any

amending replacing or analogous legislation for

which in either case no fee is paid by the

viewer other than statutory licence fees

government taxes or levies relating to the

reception of Broadcasts

'Free Television Rights' the right to exploit and/or authorise the

exploitation of the Films by Free Television

'Gross Receipts' 100% of all gross money and income of every

kind including without limitation any awards

subsidies or government allowances received or

receivable by the Distributor its

sub-distributors sub-licensees directly or

indirectly from the exercise of the Rights in

the Territory during the Term other than any

money or income derived from the Videogram

Rights and in respect of the Videogram Rights

the Royalty in respect of 100% of Videograms

sold or consigned for sale by the Distributor

its subsidiaries or licensees in the Territory

during the Term but expressly including all

other sums arising whether or not by way of

judgement settlement or compromise for

infringement or interference with any of the

Rights including without limitation any and all

advances minimum guarantees and security

deposits whether or not earned refundable or

recoupable which sums shall be and remain the

exclusive property of the Partnership and at

all times be held by the Distributor upon trust

for the

<PAGE>

Partnership until application in accordance

with the provisions of this Agreement

'Interactive Service' any service provided by a Cable Operator by

means of which a Subscriber is capable of

conveying to the Cable Operator any images

sounds data or information other than signals

sent for the control of the service

'Laboratory' the laboratory or duplicating house nominated

by the Partnership

'MVDS' multipoint microwave video distribution systems

operating at frequencies between 2 Mhz and 25

Mhz

'Minimum Advertising such amount as agreed between the parties,

Expenditure' both parties acting reasonably on a film by

film basis

'Minimum Prints' such number as agreed between the parties, both

parties acting reasonably on a film by film

basis

'Minimum Screens' such number as agreed between the parties, both

parties acting reasonably on a film by film

basis

'Non-Theatrical Rights' the right to show or play the Films and/or

authorise others to do so for screening before

an audience by institutions or organisations

not primarily engaged in the business of

exhibiting motion pictures to the public

including without limitation educational social

and religious institutions churches businesses

industrial and civic organisations hospitals

libraries prisons

<PAGE>

convents and orphanages and marine and military

installationsbut excluding hotels motels and

similar establishments

'P&A' printing, advertising and exploitation costs of

the Films

'P&A Fund' a separate and designated fund held by the

Distributor from which the Distributor can

defray actual P&A expenses in accordance with

the terms of this Agreement

"Participants Deferments" those sums which are agreed to be paid to

participants in accordance with the

participants' contracts or union agreements

'Pay Cable' any Cable Television Channel other than Basic

Cable receivable by any Cable Television

Subscriber for which a premium in excess of

[......] per channel per month is payable

whether on a 'pay-per-view' 'pay-per-channel'

'pay' subscription or other periodic or other

fee basis

'Pay Satellite' any Satellite Television Channel other than

Basic Satellite receivable by any Satellite

Television Subscriber for which a premium in

excess of [......] per channel per month is

payable whether on a 'pay-per-view'

'pay-per-channel' 'pay' subscription or other

periodic or other fee basis

'Publicity Material' the material relating to the Films short

particulars of which are set out in Schedule 1

<PAGE>

'Release Date' in respect of the Films short particulars of

which are set out in Schedule 3 such date set

out therein or such other date or dates as may

be specified by the Partnership in respect of

any other Film or Films

'Rights' the rights granted to the Distributor pursuant

to clause 1

'Royalty' the royalty in respect of the Videogram Rights

set out in Schedule 6

'Satellite Operator' any person firm or partnership licensed by the

Department of Trade and Industry and/or the

Independent Television Commission and/or their

successor bodies or equivalent bodies pursuant

to the laws of any country to provide programme

services by means of satellite

'Satellite Television' Basic Satellite and/or Pay Satellite

'Satellite Television Channel' any television programme service provided by

Satellite Operator

'Satellite Television Rights' the right to authorise exploitation of the

Films by means of Satellite Television or Pay

Satellite including without limitation by means

of so-called 'direct broadcast by satellite'

'direct to home' and 'satellite master antenna

television'

'Satellite Television any Subscriber to a Satellite Television

Subscriber' Channel

'Secondary Transmission' the reception and immediate retransmission in

the Territory of any

<PAGE>

transmission by Wireless Telegraphy [excluding

any Broadcast originating outside the

Territory]

'Ship Rights' the right to show or play the Films by

any manner or means or make available

Videograms to passengers on ships registered in

any country in the Territory expressly

excluding ships engaged solely in national

voyages within the Territory

'Subscriber' a private residential home or other residential

unit or other dwelling whatever not being a

private residence the owner or occupier or

licensee of which has contracted with a

Satellite Operator or a Cable Operator to

receive any Channel and in respect of any hotel

or motel or similar establishment or other

residential unit or other dwelling whatever not

being a private residence the owner or occupier

or licensee or management of which has so

contracted the number of Subscribers shall be

deemed to be the number of the Average

Occupants

'Subscription Television' any Broadcast for which a premium is payable

whether on a 'pay-per-view' 'pay-per-channel'

'pay' subscription or other periodic or other

fee basis

'Subscription Television Rights' the right to authorise the exploitation of the

Films by means of Subscription Television

'Television Availability Date' in respect of Cable Television, Free

Television, Satellite Television, Subscription

Television, such dates as

<PAGE>

may be specified by the Partnership in respect

of the Films

'Television Rights' the rights granted to the Distributor pursuant

to clause 1.1(d)

'Term' 15 years

'Territory' The World

'Theatrical Rights' the right to show or play the Films in public

by any manner or means in any medium to any

audience which has paid or is deemed pursuant

to any statutory provision now existing or in

the future enacted to have paid for admission

to the place where any of the Films is to be

seen or heard

'United Kingdom' the United Kingdom of Great Britain and

Northern Ireland Eire Channel Islands Isle of

Man Malta Gibraltar all territorial waters of

the foregoing including expressly but without

limitation the United Kingdom sector of the

continental shelf as designated pursuant to the

Continental Shelf Act 1964, section 1(7), and

all ships and aircraft registered in or flying

the flag of any of the foregoing and all oil

marine and military vessels and installations

situate in any of the foregoing

'Videogram' any video cassette video disc tape compact disc

digital video disc or other electronic magnetic

or other device whatever whether existing now

or developed in the future which may be derived

in whole or in part from the Delivery Material

alone or in conjunction

<PAGE>

with other audio or audio-visual material by

means of which visual images with or without

sounds derived from the Films may be perceived

reproduced or otherwise communicated directly

or with the aid of any machine or device

'Videogram Rights' the right to sell Videograms for resale

purposes only which right shall expressly

prohibit the provision of any Videograms to any

person on terms which permit that person to

make Videograms available to others on a rental

basis

'Wireless Telegraphy' the sending of electro-magnetic energy over

paths not provided by a material substance

constructed or arranged for that purpose

Any reference in this Agreement to any statute or statutory provision order or

regulation shall be construed as including a reference to that statute or

statutory provision order or regulation as from time to time amended modified

extended or re-enacted whether before or after the date of this Agreement and to

all statutory instruments orders regulations and directives modifying or

extending the same.

Unless the context otherwise requires words denoting the singular shall include

the plural and vice versa and words denoting any one gender shall include all

genders and words denoting persons shall include bodies corporate unincorporated

associations partnerships and individuals..

The word 'copyright' means the entire copyright including rental and lending

right database right and design right subsisting under the laws of the United

Kingdom and all analogous rights subsisting under the laws of each and every

jurisdiction throughout the world.

Unless otherwise stated time shall be of the essence for the purpose of the

performance of the Distributor's obligations pursuant to this Agreement.

<PAGE>

Unless otherwise stated references to clauses sub-clauses paragraphs

sub-paragraphs schedules annexures and exhibits relate to this Agreement.

<PAGE>

IT IS AGREED as follows:-

1 GRANT OF RIGHTS

1.1 In consideration of the undertakings of the Distributor in this

Agreement and subject to and conditional on the full and timely

performance and observance by the Distributor of its obligations

warranties and undertakings contained in this Agreement the Partnership

grants to the Distributor on a sole and exclusive basis throughout the

Territory during the Term:

(a) the Airline Rights;

(b) the Non-Theatrical Rights;

(d) the following Television Rights

the Cable Television Rights;

the Free Television Rights;

the Satellite Television Rights;

the Subscription Television Rights;

(e) the Theatrical Rights;

(f) the Videogram Rights.

in the Films short particulars of which are set out in Schedule 3 and in

any other Films as solely determined by the Partnership.

1.2 The rights granted pursuant to clause 1.1 are subject expressly to the

provisions of clause 16.

1.3 The Distributor shall have the non-exclusive right to use for the

purposes of publicity in connection only with the Films the name

biography and likeness of persons connected with the Films for the

purpose of exploiting the Rights in the Territory but not for the

purpose of any merchandising or product indorsement or tie-ins or other

activities independent of the exploitation by the Distributor of its

rights in connection with the Films.

2 P&A FUND

2.1 In consideration of the undertakings of the Distributor and subject to

and conditional on the full and timely performance and observance by the

Distributor of its obligations warranties and undertakings contained in

this Agreement the Partnership shall pay into the P&A Fund such sums

upon such dates from time to

<PAGE>

time as the parties shall agree and as the same shall be evidenced by

executed memoranda.

2.2 The Distributor shall use the P&A Fund solely for the purposes of actual

expenditure of P&A of the Films PROVIDED THAT:

2.2.2 The Distributor provides the Partnership with a marketing plan

in respect of each of the Films;

2.2.3 the Partnership has prior approval of the Distributor's heads of

expenditure on each of the Films, such approval not to be

unreasonably withheld;

2.2.4 the Distributor provides the Partnership with a breakdown of all

expenditure on each of the Films including provision of invoices

and receipts within 60 days of each item of expenditure, and

2.2.5 the Partnership or their appointed representatives attend key

P&A meetings held by the Distributor.

3 APPLICATION OF GROSS RECEIPTS AND DISTRIBUTOR LOANS

3.1 The Distributor shall pay the Partnership the percentage of Gross

Receipts as set out in the Recoupment Schedule at Schedule 7 and the

Distribution Loans if any such fall to be paid and payment is required

by written notice from the Partnership.

3.2 Each and every Distributor Loan shall be-

(i) interest free, and

(ii) repayable by the Partnership to the Distributor by ten equal

annual instalments commencing on the sixth anniversary of the

date on which the loan in question was made.

4 PAYMENT

4.1 All sums shall be paid by the due dates to the account of the

Partnership at Gerrard Private Bank (IOM) Limited at 5 Mount Pleasant,

Douglas, Isle of Man.

4.2 The Distributor Loans and all Gross Receipts payable to the Partnership

pursuant to this Agreement shall be gross amounts after the deduction

only of such taxes

<PAGE>

(if any) as described in clause 24 of this Agreement and subject to VAT

(if any) as described in clause 25 .

4.3 If the Distributor shall be prohibited or restricted from making

payments to the Partnership of any sum of money due pursuant to this

Agreement by reason of laws or currency regulations of the Territory

then the Distributor shall give written notice to the Partnership

advising the Partnership of such fact and shall make payment of any sums

which it is not capable of remitting to the Partnership into any bank

account or to any other entity as the Partnership may designate.

4.4 Pounds sterling or United States dollars shall be the currency of

account of this Agreement and where any sums are received in any other

currency such sums shall be converted at the mid-market rate of exchange

prevailing as provided by Bloomberg LP in London on the date payment is

due.

5 DISTRIBUTION

5.1 The Distributor, at all times relying on its own commercial judgement,

shall procure the initial theatrical release of each Film by the Release

Date in not less than the Minimum Screens and undertakes to procure the

manufacture of the Minimum Prints for each Film and to maintain each

Film in continuous theatrical distribution in the Territory for a period

consistent with good business judgement in order to obtain the maximum

Gross Receipts from the exploitation of the Theatrical Rights in such

Film.

5.2 The Distributor, at all times relying on its own commercial judgement,

shall procure the release of Videograms of each Film in the Territory.

5.3 The Distributor, at all times relying on its own commercial judgement,

shall procure the exploitation of the Cable Television Rights Satellite

Television Rights and Subscription Television Rights and Television

Rights in each Film in the Territory.

5.4 The Distributor, at all times relying on its own commercial judgement,

shall seek to enter into licence agreements for the Television Rights in

each Film in the Territory as soon as reasonably possible.

5.5 The Distributor undertakes to exploit the Rights in the Films in the

fairest possible manner and undertakes not to discriminate against any

of the Films in any way or

<PAGE>

to enter into blanket arrangements in connection with any of the Films

or use any of the Films in order to secure more advantageous terms for

any other Film or films.

5.6 The Distributor shall consult with the Partnership throughout the Term

in connection with all material aspects relating to the exploitation of

the Rights in the Territory including without limitation advertising

budgets release dates release patterns places of exhibition and

marketing strategy for the Films and shall give consideration in good

faith to the views of the Partnership.

5.7 The Distributor shall have the right to appoint sub-distributors or

sub-licensees of the Distributor PROVIDED THAT

(i) all such appointments shall be upon arms' length commercial

terms; and

(ii) the Distributor shall not structure its affairs whereby Gross

Receipts may be adversely affected; and

(iii) such sub-distributors' and sub-licensees' commissions or fees

shall not exceed 20% of income at source.

5.8 The Distributor undertakes to advertise and publicise the Films

throughout the Territory during the Term so as to maximise the Gross

Receipts which may be derived from the exploitation of the Rights and

undertakes to procure the expenditure solely in connection with each

Film of not less than the relevant Minimum Advertising Expenditure

exclusive of any Value Added Tax or similar ta

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates