INTERPARTY AGREEMENT

Exhibit 10.10

 

INTERPARTY AGREEMENT

 

between

 

DREAMWORKS L.L.C.

 

and

 

DREAMWORKS ANIMATION SKG, INC.

 

and

 

VIVENDI UNIVERSAL ENTERTAINMENT LLLP

 

dated as of October 7, 2004

 

TABLE OF CONTENTS

 

 

Table of Contents

(Continued)

 

 

Table of Contents

(Continued)

 

 

INTERPARTY AGREEMENT

 

between

 

DREAMWORKS L.L.C.

 

and

 

DREAMWORKS ANIMATION SKG, INC.

 

and

 

VIVENDI UNIVERSAL ENTERTAINMENT LLLP

 

dated as of October 7, 2004

 

THIS INTERPARTY AGREEMENT dated as of October 7, 2004 (this “Agreement”), is entered into by and among DreamWorks Animation SKG, Inc. (“DWA”), DreamWorks L.L.C. (“DW Studios”) and Vivendi Universal Entertainment LLLP (“Universal”).

 

WHEREAS DW Studios and Universal (as assignee of Universal Studios, Inc.) are parties to that certain Master Agreement (Amended and Restated as of October 31, 2003) (the “Master Agreement”), which includes certain other agreements as Exhibits A, B, C and D thereto (collectively, the Master Agreement and the other agreements attached as Exhibits A, B, C and D thereto are the “Universal Agreement”);

 

WHEREAS pursuant to Exhibit A of the Universal Agreement (the “Theatrical Distribution Agreement”) Universal has certain exclusive international theatrical distribution rights and obligations with respect to certain motion pictures (as more fully described and set forth in the Theatrical Distribution Agreement);

 

WHEREAS, pursuant to Exhibit B of the Universal Agreement (the “Home Video Fulfillment Services Agreement”) Universal has certain exclusive domestic and international home video fulfillment services rights and obligations with respect to certain motion pictures (as more fully described and set forth in the Home Video Fulfillment Services Agreement);

 

WHEREAS, pursuant to Exhibit C of the Universal Agreement (the “Amblin Agreement”), Universal and DW Studios agreed to certain procedures and allocations of rights to certain projects developed at least in part by Amblin Entertainment, Inc. and set forth on schedules to the Amblin Agreement (collectively, all such projects listed in schedules to the Amblin Agreement, the “Amblin Projects”);

 

WHEREAS, pursuant to Exhibit D of the Universal Agreement (the “Theme Park Agreement”) Universal has an exclusive option to acquire certain rights to exploit certain motion pictures in theme parks (as more fully described and set forth in the Theme Park Agreement);

 

WHEREAS, as part of the separation of DW Studios and DWA pursuant to the Separation Agreement dated as of the date hereof (“Separation Agreement”) by and among DW Studios, DreamWorks Animation L.L.C. and DWA, DW Studios and DWA have agreed to enter into a Distribution Agreement dated as of the date hereof (the “DW Distribution Agreement”); and

 

WHEREAS, the parties hereto have agreed to set forth herein the parties’ respective rights, privileges and obligations under the Universal Agreement and DW Distribution Agreement, and to enter into certain other agreements;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, DWA, DW Studios and Universal hereby agree as follows:

 

Section 1. Definitions and Usage .

 

1.1 Definitions :

 

a. The following terms shall have the same meaning as in the DW Distribution Agreement:

 

Accepted Additional Picture(s).

Affiliate of Any Person ; provided, however, that for purposes of this Agreement, none of DWA, DW Studios and Universal are Affiliates of any other party to this Agreement.

Animated Motion Picture(s) .

Bankruptcy Code

Business Day .

Control .

Delivery .

Distribution Rights .

Exhibit, Exhibition .

Good Faith Dispute .

Internet Rights .

Person .

Qualified Pictures .

Retained Rights .

Subdistributor ; provided, however, that for purposes of this Agreement a “Subdistributor” shall not include an Affiliate of DW Studios or of Universal.

Tangible Film Materials .

Television Exhibition .

 

b. The following terms shall have the meanings set forth below:

 

Animation Advance shall mean the $75 million amount advanced by Universal to DW Studios under the Master Agreement with respect to Animated Motion Pictures, which $75 million amount on the Effective Date shall be contributed by DW Studios to DWA pursuant to the Separation Agreement, as such $75 million amount may be adjusted pursuant to Section 5 of this Agreement.

 

Domestic Territory shall mean the territorial United States and its possessions, territories and commonwealths, including the U.S. Virgin Islands, Puerto Rico, Guam, and the U.S. Trust Territories of the Pacific Islands, including the Carolina Islands, the Marshall Islands and the Mariana Islands, Saipan and American Samoa; the Dominican Republic, the British Virgin Islands, Nassau, Bahamas, Bermuda, Saba Island, St. Eustatius Island, St. Kitts Island, St. Maarten Island, and Freeport; the Dominion of Canada and its possessions, territories and commonwealths; and all Army, Navy, Air Force, Red Cross and other national or governmental installations, diplomatic posts, camps, bases and reservations of the above mentioned countries, as well as oil rigs (including Aramco sites) and maritime facilities (and other commercial and/or industrial installations of the above mentioned countries and territories), wherever any of the aforementioned facilities or installations are located, to the extent that sales are made and/or servicing thereof is performed within the geographical areas set forth above, and all airlines and ships flying the flag of, or having the registry of, or whose principal office is located in the United States, Canada or Bermuda and other possessions, territories and commonwealths within the Domestic Territory.

 

DW Distributed Pictures shall mean Qualified Pictures and Accepted Additional Pictures.

 

Effective Date shall have the same meaning as the term “Separation Date” in the Separation Agreement.

 

Home Video Exhibition shall mean the Exhibition of Videograms.

 

Home Video Fulfillment Services Rights shall mean the right and obligation to provide fulfillment services under the Home Video Fulfillment Services Agreement.

 

Home Video Territory shall mean the territory in which fulfillment services are to be performed pursuant to the Home Video Fulfillment Services Agreement, excluding only (i) South Korea and North Korea to the extent and for the period licensed to DW Studios’ “Korean Shareholder” (as defined in the Home Video Fulfillment Services Agreement), and (ii) either (a) Japan or (b) The Federal Republic of Germany, the Republic of Austria, and German–language rights in Switzerland, Lichtenstein, Luxembourg and Alto Adige.

 

LLC Agreement shall mean the Limited Liability Limited Partnership Agreement of Holdco, dated as of October 7, 2004, by and among M&J K Dream Limited Partnership, M&J K B Limited Partnership, DG-DW, L.P., DW Lips, L.P., DW Investment II, Inc., Lee Entertainment, L.L.C. and Vivendi Universal Entertainment LLLP.

 

Licensed Picture has the meaning set forth in the DW Distribution Agreement as in effect on the Effective Date.

 

Motion Picture(s) (a) with respect to Theatrical Distribution Rights, shall mean all live-action and animated motion pictures (and combinations thereof), and (b) with

 

respect to Home Video Exhibition and Home Video Fulfillment Services Rights shall mean a theatrical motion picture, one or more television programs, television movies, television episodic series or direct-to-video motion picture.

 

Non-Theatrical Exhibition shall mean, with respect to each Prior Picture, DW Distributed Picture or Universal Licensed Picture, the right to exhibit a Picture as set forth in paragraph 2.a of Schedule A-TC to the Theatrical Distribution Agreement.

 

Prior Picture(s) shall mean the following Animated Motion Pictures: Antz; The Prince of Egypt; The Road to Eldorado; Chicken Run; Shrek; Spirit: Stallion of the Cimarron; Sinbad: Legend of the Seven Seas; Shrek 2; and Shark Tale.

 

Term shall mean the period commencing on the Effective Date and continuing until expiration or earlier termination of the Universal Term; provided , however, if the Effective Date does not occur on or before December 31, 2005 this Agreement shall terminate without taking effect.

 

Termination Amounts shall have the meaning set forth in the definition of Universal Term.

 

Theatrical Distribution Rights shall mean the right and obligation to distribute Pictures pursuant to the Theatrical Distribution Agreement. Theatrical Distribution Rights include Non-Theatrical Exhibition rights but do not include any other rights including Television Exhibition, Internet Rights, or any other form of distribution, exhibition or other method of exploitation of Motion Pictures, now known or hereafter devised.

 

Theatrical Exhibition shall mean all forms of Exhibition which are subject to the Theatrical Distribution Agreement.

 

Theatrical Territory shall mean the “Territory” as defined in the Theatrical Distribution Agreement.

 

Theme Park Rights shall have the same meaning as “Theme Park Rights” in paragraph 3 of the Theme Park Agreement.

 

Theme Park Supplemental Agreements shall mean, collectively, (i) the letter agreement dated as of January 20, 2000 between DW Studios and Universal Studios, Inc. relating to the exploitation of Chicken Run at the Universal Studios theme parks, (ii) the letter agreement dated as of February 27, 2001 between DW Studios and Universal Studios, Inc. relating to the exploitation of Shrek at the Universal Studios theme parks and adjacent Universal CityWalk locations, (iii) the letter agreement dated as of January 15, 2002 between DW Studios and Universal Studios, Inc. captioned “Universal-DreamWorks Theme Park Issues”, and (iv) the agreement dated as of March 12, 2002 between PDI/Dreamworks L.L.C. and Universal City Studios LLLP entitled “Shrek 4D Attraction at Universal Studios”, as amended by letter agreement dated as of March 13, 2002 and as assigned effective as of March 13, 2002 by PDI/Dreamworks L.L.C. to DreamWorks Animation LLC.

 

UIP shall mean United International Pictures, B.V. and its successors and assigns.

 

Universal Affiliate shall mean any Person that qualifies as an Affiliate of Universal pursuant to the definition of Affiliate set forth above.

 

Universal Exploitation Agreements shall mean the Master Agreement, the Theatrical Distribution Agreement and the Home Video Fulfillment Services Agreement only.

 

Universal Licensed Picture(s) shall mean any Motion Picture released after the Effective Date and during the Universal Term (A) for which DWA has acquired (i) Theatrical Distribution Rights in any portion of the Theatrical Territory, or (ii) Home Video Exhibition rights in any portion of the Home Video Territory (and Universal expressly acknowledges and agrees that all Home Video Exhibition rights are not “licensed” to Universal, and instead Universal is providing fulfillment services with respect thereto), or (iii) Theme Park Rights in any territory(ies), and (B) where some or all of such Theatrical Distribution Rights, Home Video Exhibition rights or Theme Park Rights have not been granted by DWA to DW Studios or as to which DW Studios no longer holds such rights, in each case for any reason including, without limitation, because DW Studios has declined or surrendered such rights, DW Studios no longer performs the distribution services in whole or in part as required under the DW Distribution Agreement, or the DW Distribution Agreement has expired or been terminated, in whole or in part.

 

Universal Term shall mean the period commencing on the Effective Date and terminating on the first date on which all of the following have occurred: (i) termination of the Theatrical Distribution Agreement, (ii) termination of the Home Video Fulfillment Services Agreement and (iii) the Advance Amounts, Animation Advance Amounts, Additional Amounts, Animation Additional Amounts, DW Adjustment amounts, DWA Animation Adjustment amounts and Special Termination Fee (as defined in the Master Agreement) (if applicable) have been paid in full; the Class U Preferred Stock together with all accrued and unpaid cash and non-cash distributions thereon, is redeemed and the redemption price paid in full in cash; and the Satisfaction Event with respect to Universal (as defined in the LLC Agreement) has occurred (the aggregate of the payments required pursuant to this clause (iii), the “Termination Amounts”).

 

Videogram(s) shall mean videocassettes, laserdiscs, Digital Versatile Discs (“DVD”) or video CDs intended for in-home use by members of the public and physically transported to the home for such use that is sold or rented and physically embodies (without need for further transfer of data or further activation or other authorization from outside the home) a Motion Picture for exhibition by a playback device which causes a visual image of the Motion Picture to be seen, in a linear fashion, as such Motion Picture is made available by the producer of such Motion Picture for video distribution, and which Motion Picture appears on the screen of a television receiver or other monitor in the home. CD-ROM, CD-I products, video games, and interactive products (including, but not limited to, DVD interactive products containing a Motion Picture[s]) or interactive pictures of any type, are not Videograms.

 

Certain other terms are defined elsewhere in this Agreement, as noted on Schedule 1.1.

 

1.2 Terms and Usage Generally .

 

The definitions in Section 1.1. and Schedule 1.1. as used herein shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Sections and Schedules shall be deemed to be references to Sections of, and Schedules to, this Agreement unless the context shall otherwise require. All Schedules attached hereto shall be deemed incorporated herein as if set forth in full herein. The words “include”, “includes” and “including” herein and in any Exhibit and Schedule hereto shall be deemed to be followed by the phrase “without limitation”. All accounting terms not defined in this Agreement shall have the meanings determined by United States generally accepted accounting principles as in effect from time to time. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to a Person are also to its permitted successors and permitted assigns. Unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.

 

Section 2. Confirmation of Universal’s Rights to Prior Pictures .

 

2.1 Prior Picture Rights Acquired by DWA Subject to the Universal Agreement. The Prior Pictures conveyed by DW Studios to DWA pursuant to the Separation Agreement have been conveyed subject to the Universal Agreement. DWA and DW Studios acknowledge and agree that certain exclusive distribution or other exploitation rights to each Prior Picture have been licensed or granted to Universal by DW Studios prior to the Effective Date under the Universal Exploitation Agreements, Theme Park Agreement and the Theme Park Supplemental Agreements and that such rights are unaffected by the Separation Agreement, the DW Distribution Agreement, or the transactions contemplated thereby. With respect to each Prior Picture, Universal shall have the rights and obligations to exploit the applicable Theatrical Distribution Rights and Home Video Fulfillment Services Rights as set forth in the Universal Exploitation Agreements during the Universal Term. Any sale, transfer, assignment, license, pledge or other encumbrance of a Prior Picture during the Universal Term shall be expressly subject to the Universal Agreement as and to the extent required by the Universal Agreement, and to the consent of Universal to such sale, transfer, assignment, license, pledge or other encumbrance if such consent is required pursuant to the Universal Agreement.

 

2.2 Relation Between DWA, DW Studios and Universal as to Prior Pictures . Notwithstanding anything to the contrary set forth in the DW Distribution Agreement, and subject to the further provisions of this Agreement, as to all Prior Pictures, DWA, DW Studios and Universal agree: (i) as between DWA and DW Studios, each Prior Picture shall be deemed to be a Licensed Picture under the DW Distribution Agreement, (ii) as between DW Studios and Universal, Universal retains all the rights to each Prior Picture granted under (including pursuant to Section 10 below), and is obligated to exploit such Prior Picture subject to the terms and conditions of, the Universal Exploitation Agreements; and (iii) as between DWA and Universal,

 

Universal shall have no duty or obligations to DWA with respect to the Prior Pictures or their distribution or other exploitation, and DWA shall not be a third party beneficiary of the Universal Exploitation Agreements, provided that to the extent any Prior Picture is not licensed by DWA to DW Studios under the DW Distribution Agreement, Universal shall distribute such Prior Picture directly for DWA, as if Sections 3.1 and 3.2 of this Agreement applied to such Prior Picture.

 

2.3 Transfer of Benefits; Retransfer . Subject to the other terms and conditions of this Agreement, Universal hereby approves the transfer from DW Studios to DWA of all of DW Studios’ benefits under the Universal Agreement with respect to the Prior Pictures, subject to the following: (a) DW Studios and DWA hereby agree that such transfer has no effect on Universal’s rights in the Prior Pictures pursuant to the Universal Agreement (as more fully set forth in Section 2.2.(ii), above); and (b) DWA hereby acknowledges and agrees that all such benefits are being retransferred from DWA to DW Studios pursuant to the Distribution Agreement (and accordingly, Section 2.2.(iii), above, applies as between DW Studios, DWA and Universal).

 

Section 3. Grant of Rights; Period of Distribution . The following shall apply only as and to the extent that a given Motion Picture constitutes a Universal Licensed Picture hereunder:

 

3.1 Grant of Rights. Subject to the terms and conditions hereof, DWA grants, licenses, and/or assigns (as applicable) to Universal, to the extent of the rights owned or controlled by DWA or any Affiliate Controlled by DWA thereof in and to each Universal Licensed Picture, the following rights: (i) throughout the Theatrical Territory, to exploit the Theatrical Distribution Rights on its initial theatrical release (as referenced in paragraph 1.a. of the Theatrical Distribution Agreement); and (ii) throughout the Home Video Territory, to exploit the Home Video Fulfillment Services Rights if DWA designates such Motion Picture for release as a Videogram. As between Universal and DWA, all rights to Universal Licensed Pictures not expressly granted or licensed (as applicable) to Universal pursuant to this Agreement, including the Retained Rights, shall remain vested in DWA. If and to the extent that DWA has licensed or granted (as applicable) rights to a Universal Licensed Picture to Universal pursuant to the first sentence of this Section 3.1., Universal and DWA shall each have the rights and obligations with respect to such Universal Licensed Picture set forth in the Theatrical Distribution Agreement and the Home Video Fulfillment Services Agreement, with DWA having all the rights and obligations of DW Studios to Universal under such agreements with respect to the Universal Licensed Picture, and Universal having all the rights and obligations to DWA as Universal would have to DW Studios under such agreements with respect to the Universal Licensed Pictures.

 

3.2 Period of Distribution. With respect to each Universal Licensed Picture, Universal shall have the rights and obligations to exploit the applicable Theatrical Distribution Rights and Home Video Fulfillment Services Rights granted pursuant to Section 3.1 above during the Universal Term (subject to the terms of the Universal Exploitation Agreements).

 

3.3 Clarification. For avoidance of doubt, in no event shall Universal have any right to exercise any rights with respect to any given Motion Picture pursuant to this Section

 

3, nor shall there be any executory obligations from DWA to Universal or from Universal to DWA hereunder with respect to such Motion Picture, so long as such Motion Picture constitutes a DW Distributed Picture pursuant to Section 4, below.

 

Section 4. Rights and Obligations With Respect to DW Distributed Pictures and Prior Pictures .

 

4.1 DWA Approval of Universal Exploitation Agreements . DWA hereby irrevocably approves the terms and conditions of the Universal Exploitation Agreements, which approval may not hereafter be withdrawn, terminated, qualified or conditioned.

 

4.2 Universal Not Bound by DW Distribution Agreement . The parties hereto acknowledge and agree that as to all DW Distributed Pictures and Prior Pictures, Universal shall have the rights to distribute and provide such fulfillment services therefor as set forth in the Universal Exploitation Agreements; that Universal’s sole obligations as to such DW Distributed Pictures and Prior Pictures are those it is required to render to DW Studios as set forth in the Theatrical Distribution Agreement and the Home Video Fulfillment Services Agreement; and that neither Universal nor any of its Affiliates, nor UIP, is bound by the provisions of the DW Distribution Agreement. Without limitation of the foregoing, and regardless of the provisions of the DW Distribution Agreement, Universal shall not be required to render services, or provide information, approval, consultation, access, audit or other rights to DWA with respect to DW Distributed Pictures or Prior Pictures. DWA and DW Studios acknowledge and agree that Universal is required to take instructions exclusively from, and is entitled to rely exclusively on all instructions of DW Studios with respect to such DW Distributed Pictures and Prior Pictures, regardless of any instructions by DWA, and that DW Studios may not delegate, transfer or assign any of its rights or obligations under the Universal Exploitation Agreements to DWA with respect to DW Distributed Pictures or such Prior Pictures. Universal’s (i) rights under the Theatrical Distribution Agreement apply to DW Distributed Pictures on the commencement of their theatrical distribution in the Domestic Territory, and (ii) rights under the Home Video Fulfillment Services Agreement apply to DW Distributed Pictures DW Studios distributes for DWA as Videograms during the Universal Term or within *** following the Motion Picture’s initial general U.S. theatrical release, which release occurs during the Universal Term.

 

4.3 Universal’s Rights of Collection, Deduction and Recoupment. DWA acknowledges that Universal has the right to collect receipts, deduct fees, and recoup expenses and other amounts (if any) with respect to the DW Distributed Pictures and Prior Pictures all as set forth in the Universal Exploitation Agreements. For so long as the DW Distribution Agreement is in effect, Universal shall pay over all amounts required to be remitted by it in respect of DW Distributed Pictures and Prior Pictures solely to DW Studios, and shall have no liability to DWA in respect of such payments. Notwithstanding the foregoing, Universal agrees that it shall make payments to DW Studios in respect of DW Distributed Pictures and Prior Pictures without setoff, counterclaim or defense except (a) for setoffs, counterclaims or defenses

 

*** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

related to DW Distributed Pictures and Prior Pictures, (b) if any Motion Pictures later become Universal Licensed Pictures hereunder, for setoffs, counterclaims or defenses related to such Universal Licensed Pictures or (c) for the obligations of DWA to Universal under Section 5 of this Agreement. DWA, DW Studios and Universal agree that if any and all fees or expenses related to DW Distributed Pictures and Prior Pictures and owed to Universal under the Universal Exploitation Agreements for any reason are not paid when due, Universal shall be entitled to recoup such amounts from all amounts collected by it related to the DW Distributed Pictures and Prior Pictures, together with interest on amounts due and owing as provided in the applicable Universal Exploitation Agreements.

 

4.4 Laboratory and Storage Access Letters. To the extent required for the exercise of Universal’s Theatrical Distribution Rights and Home Video Fulfillment Services Rights with respect to Licensed Pictures, Universal Licensed Pictures or Prior Pictures, DWA shall provide Universal with fully-executed access letters in reasonable and customary form for each laboratory or storage facility in which Tangible Film Materials for such Motion Pictures are held upon Universal’s request therefor from time to time. To the extent that DWA or DW Studios maintains possession of any Tangible Film Materials required for the exercise of Universal’s Theatrical Distribution Rights and Home Video Fulfillment Services Rights with respect to Licensed Pictures, Universal Licensed Pictures or Prior Pictures, Universal shall have the same right of access thereto as it would have under the above-referenced laboratory or storage-facility access letter had such Tangible Film Materials been held at a laboratory or storage facility.

 

Section 5. Animation Advance and Related Payment Obligations .

 

5.1 Animation Advance .

 

a. Article VIII of the Master Agreement is hereby deleted and amended to read as set forth in Schedule 5.1 to this Agreement, and incorporated herein as if fully set forth.

 

b. Universal, DW Studios and DWA agree that DWA shall be solely responsible for the payment of the Animation Advance Amount and all Animation Additional Amounts as and when due under the Universal Agreement. DWA acknowledges and agrees that such amounts may become due and payable in full due to the action or inaction of DW Studios, and that Universal is entitled to exercise against DWA any and all of its remedies under Section 5.1.a if and when such Animation Advance Amount or Animation Additional Amounts are due and payable, including rights of offset and recoupment and is entitled to Theatrical Distribution and Home Video Fulfillment Services Rights to all Licensed Pictures and Universal Licensed Pictures unless and until all amounts required to be paid to Universal by DW Studios or DWA pursuant to the Master Agreement have been repaid.

 

Section 6. No Adverse Amendment of DW Distribution Agreement; No DW Studios Assignment.

 

6.1 No Adverse Amendment of DW Distribution Agreement . DW Studios and DWA shall not at any time during the Universal Term, without the consent of Universal (not

 

to be unreasonably withheld), amend or modify the license granted to DW Studios under the DW Distribution Agreement or the transfer of “Animated Film Assets” as defined in and pursuant to the Separation Agreement in any manner that would have an adverse effect on Universal under the Universal Agreement and this Agreement.

 

6.2 No Assignment of DW Distribution Agreement by DW Studios . DW Studios may not at any time during the Universal Term assign any of its Theatrical Exhibition, Home Video Exhibition or Theme Park Rights under the DW Distribution Agreement if such assignment would result in a loss of any or all of Universal’s Home Video Fulfillment Services Rights, Theatrical Distribution Rights or Theme Park Rights.

 

Section 7. Representations, Warranties and Agreements . Each of the parties, severally and as of the Effective Date, represents and warrants as follows:

 

7.1 DWA . DWA makes the same representations and warranties with respect to this Agreement as made by DW Studios in Section XII.4 of the Master Agreement. If and when DWA licenses and/or grants rights to Universal Licensed Pictures to Universal, it will make the representations and warranties, and provide such indemnities to Universal with respect to such Universal Licensed Pictures as are set forth in the Universal Exploitation Agreements for DW Studios.

 

7.2 Universal . Universal makes the same representations and warranties with respect to this Agreement that it (or its predecessors in interest) made in Section XII.4 of the Master Agreement. If and when Universal is granted a license and/or rights to Universal Licensed Pictures, it will make the representations and warranties, and provide such indemnities to DWA with respect to such Universal Licensed Pictures as are set forth in the Universal Exploitation Agreements for Universal.

 

7.3 DW Studios . DW Studios makes the same representations and warranties with respect to this Agreement that it made in Section XII.4 of the Master Agreement. For purposes of clarity, DW Studios makes the same representations and warranties as to, and provides the same indemnities to Universal with respect to Prior Pictures and DW Distributed Pictures as DW Studios makes as to “Pictures” in the Theatrical Distribution Agreement and “DW Videograms” in the Home Video Fulfillment Services Agreement.

 

7.4 Amblin Projects . No Amblin Projects or any of DW Studios’ rights under the Amblin Agreement have been conveyed to DWA.

 

7.5 Bank Consent and Non-Disturbance Agreement . Neither DW Studios nor DWA shall convey, pledge or otherwise encumber Prior Pictures, DW Distributed Pictures or the Universal Licensed Pictures unless (i) all rights sufficient to grant Universal’s Theatrical Distribution Rights, Home Video Fulfillment Services Rights and Theme Park Rights are retained by DWA and DW Studios, or (ii) such conveyance or encumbrance is expressly subject to the rights and obligations of Universal under this Agreement and (to the extent applicable) the Universal Exploitation Agreements. In the event of a conveyance or encumbrance subject to clause (ii), effective no later than such transfer or encumbrance, the applicable transferee or encumbrance holder shall provide Universal with an acknowledgement of Universal’s rights

 

under this Agreement and (to the extent applicable) the Universal Exploitation Agreements and an agreement not to disturb, interfere or seek to terminate Universal’s rights under this Agreement or (to the extent applicable) the Universal Exploitation Agreements, such acknowledgement and agreement not to disturb to be in a form reasonably satisfactory to Universal.

 

Section 8. Rights Under Universal Agreement.

 

8.1 DW Studios – Sole Claimant . Except with respect to Universal Licensed Pictures (if any) and any Prior Pictures to which the last clause of Section 2.2 above applies, only DW Studios shall, as between DW Studios and DWA, have the right to bring any claim, action, or proceeding against Universal by reason of any actual or alleged breach of the Universal Agreement. (The foregoing is not intended to limit the scope of remedies available to DW Studios or Universal for any such breach.)

 

Section 9. Termination; Disputes .

 

9.1 Termination Rights . Except as set forth in Section 11, nothing in this Agreement shall limit or expand DW Studios’ or Universal’s rights to terminate the Theatrical Distribution Agreement or the Home Video Fulfillment Services Agreement, or (except as expressly set forth in this Section 9.1) their respective rights or obligations with respect to and following such termination, in each case in accordance with such agreements’ terms. DWA shall not have any right to terminate any of the Universal Exploitation Agreements unless DW Studios would have such right and has exercised it (or is no longer a party to the Universal Exploitation Agreements). DW Studios, DWA and Universal each acknowledge and agree that no termination of this Agreement, the Theatrical Distribution Agreement or the Home Video Fulfillment Services Agreement shall be effective against either or both of DW Studios or DWA unless and until the Termination Amounts are paid in full. Universal, DW Studios and DWA agree that notwithstanding the foregoing, (i) DWA shall not be liable for the payment of the Advance, Additional Amounts, DW Adjustment amounts, Special Termination Fee, or the redemption of the Class U Preferred Stock of DW Studios or distributions or other payments thereof, and (ii) DW Studios shall not be liable for the payment of the Animation Advance, Animation Additional Amounts, DWA Animation Adjustment amounts or Satisfaction Event as to Universal.

 

9.2 Disputes Under Universal Agreements. Notwithstanding anything to the contrary in the Universal Agreement, any dispute arising out of or relating to the Universal Agreement, or hereunder, shall be resolved as set forth in Section 19, below. With respect to any claim arising out of or relating to this Agreement, a party asserting such claim shall give the applicable other party written notice of such claim and a reasonable opportunity (not less than ***, nor more than ***) to cure prior to commencing proceedings in accordance with Section 19 below.

 

***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

Section 10. Grant of Rights (Theme Parks) . By its execution and delivery of this Agreement, DWA and Universal acknowledge and agree that Sections 1 (other than 1.D.), 3, 4.B, 5, 6, 7, and 9 of the Theme Park Agreement, and the first sentence of paragraph C of that certain Theme Park Supplemental Agreement dated as of January 15, 2002 between DW Studios and Universal Studios, Inc. captioned “Universal-DreamWorks Theme Park Issues”, shall apply to all “Eligible DWA Properties,” which are: (i) all P