EXHIBIT 10.3
IRON MAN
EXCLUSIVE
CROSS
LICENSE
AGREEMENT
This IRON MAN EXCLUSIVE CROSS
LICENSE AGREEMENT (" Agreement ") is made and entered into
as of September 29, 2006 (" Effective Date ") by and between
MVL Rights LLC, a Delaware limited liability company (" MRI
"), and MVL Film Finance LLC, a Delaware limited liability company
(" MVL "). All capitalized terms used herein without
definition shall have the meanings specified in the Credit
Agreement referred to below or the Master Agreement referred to
below.
WHEREAS, MVL entered into the Credit
Agreement pursuant to which the Lenders thereto and as defined
therein made available to MVL a film finance credit facility to
fund the production of a slate of theatrical motion pictures to be
developed and produced by MVL Productions LLC (" MPROD "), a
wholly-owned subsidiary of Marvel Studios, Inc. (" MSI ");
and
WHEREAS, MRI wishes to license to
MVL the right to develop, produce, distribute and exploit live
action or animated theatrical motion pictures based upon certain
comic book characters and groups of characters on the terms set
forth herein; and
WHEREAS, MVL wishes to accept such
exclusive license from MRI as more fully set forth herein and as
partial consideration therefor wishes to exclusively license to MRI
the MVL Granted Rights (as such term is defined below);
and
WHEREAS, MSI has advised Ambac
Assurance Corporation (“ Ambac ”) that the
Marvel characters “The Hulk” and “Iron Man”
have become Unencumbered Characters and wishes to finance an
Unencumbered Character Project with respect to each of them under
the facility available to MVL pursuant to the Credit Agreement;
and
WHEREAS, MVL entered into the
Amendment No. 1 to the Transaction Documents, dated as of the date
hereof, by and among MVL, MPROD, MSI, Marvel Characters, Inc.
(“ MCI ”), MRI, Ambac and HSBC Bank USA,
National Association, in its capacity as Collateral Agent (as
defined in the Credit Agreement) (the “ Amendment
”), pursuant to which certain of the Transaction Documents
were amended to permit (i) the transfer of Film Rights in the
Unencumbered Characters to the Borrower, (ii) the financing of
Motion Pictures based on the Unencumbered Characters as Main
Characters under the Transaction Documents and (iii) at MSI’s
request, the withdrawal of all rights in an Unencumbered Character
if in good faith the conditions to the Initial Funding that is a
Film Related Advance related to such Unencumbered Character have
not been satisfied and the Control Party has not waived any such
unsatisfied conditions as further articulated therein.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as
follows:
1.
DEFINED TERMS . When used in this Agreement, the following
terms shall have the following definitions:
|
|
1.1
|
" Approval Rights " shall
have the meaning set forth in Section 9.2 hereof.
|
1
1.2 "
Character Title(s) " shall have the meaning set forth in the
MCI Assignment Agreement.
1.3 "
Consultation Rights " shall have the meaning set forth in
Section 9.1 hereof.
1.4 "
Co-Promotion/Commercial Tie-In " means any advertisement or
other promotional item or arrangement, which (a) is intended to and
does promote both a Picture and the Property on which it is based
and one or more other products or services (other products or
services shall be referred to herein as " Tie-in Partners
"); and (b) contains prominent reference to each applicable Picture
as opposed to relating only to the Property; and (c) subject to
Section 14.5 of this Agreement, contains MEI’s logo or
just (a) and (b) above.
1.5 "
Co-Promotion/Commercial Tie-In Period " means with respect
to each Picture the period commencing nine (9) months prior to the
initial U.S. domestic theatrical release of the Picture and
continuing until the earlier of: (a) three (3) months following the
initial U.S. domestic DVD release of the Picture or; (b) nine (9)
months after the initial U.S. domestic theatrical release of the
Picture.
1.6 "
Co-Promotion/Commercial Tie-In Rights " means the right to
conduct Co-Promotions/Commercial Tie-Ins.
1.7 "
Credit Agreement " means that certain Credit and Security
Agreement, dated as of August 31, 2005 among MVL, as Borrower, the
financial institutions party thereto from time to time, as Lenders,
General Electric Capital Corporation, as the Administrative Agent,
and HSBC Bank USA, National Association, as Collateral Agent, as
the same may be from time to time amended, supplemented or
otherwise modified.
1.8 "
Derivative Works " shall have the meaning set forth in 17
USC, Section 101 et seq.
1.9 "
ECD Material " means all material acquired or created for
inclusion in the enhanced or multi-media portion of a CD, CD-Plus,
CD-ROM, DVD, virtual file, or any other format whether now known or
hereafter devised, including but not limited to, photography,
graphics, technology, software, and so-called hyperlinks to
URLs.
1.10 "
Ephemeral Recordings " means Records created solely for the
purpose of facilitating a transmission of a public performance of a
Record.
1.11 "
Laws " shall have the meaning set forth in the MCI
Assignment Agreement.
1.12 "
Literary Material " shall have the meaning set forth in the
Master Agreement, except that for the purposes of this Agreement,
Literary Material shall only pertain to the Main Characters or
Subsidiary Characters as defined herein.
1.13 "
Literary Publishing Rights " means, with respect to each
Picture, the right to publish and distribute for sale to the public
hardcover or soft-cover printed publications of all or any part of
the Literary Material (i.e., copies of the screenplay without
images) (other than music and/or lyrics) used in connection with
the Picture, at any stage of completion with the foregoing not in
any way limiting or including publications included within
Merchandising Rights.
2
1.14
" Main Character " means Iron Man (Tony Stark).
1.15 "
Marketing Rights " means, with respect to the advertising,
promotion and marketing of each Picture, the right to: (i) publish
and authorize others to publish in any language, in any media and
in any form, synopses, summaries, adaptations, resumes and stories
of and excerpts from the Picture, in each such case of no more than
1,000 words and in each case not offered for sale and not in "comic
book" or "comic" form unless approved in advance in writing by MRI;
it being agreed that MRI's publication of comic books including or
incorporating Picture-Related Items is included as a Reserved Right
or if applicable an MVL Granted Right and shall not be deemed
Marketing Rights; (ii) use and authorize others to use the name,
voice and likeness (and any simulation or reproduction thereof) of
any artist appearing in or rendering services in connection with
the Picture; (iii) exhibit and authorize others to exhibit in any
language by any media, including radio and television, excerpts and
clips from the Picture, provided such excerpts and clips will not
be offered for sale and will not exceed one (1) minute in length;
(iv) create, produce, fix, distribute, perform and otherwise
exploit trailers, advertisements, music videos, promotional films,
"behind-the-scenes" footage or films, "added value" or "bonus"
materials (e.g., director's commentary, promotional-type
featurettes) and (v) use any Picture-Related Item or
Picture-Related Element in connection with the marketing of the
Picture subject to the limitations set forth herein. With respect
to "bonus" materials and specifically bonus material on DVDs, MRI
shall have the right to include a reasonable amount of content on
each DVD of a Picture to promote, market, or advertise its own or a
third party product, good, or service licensed by MRI or one of its
affiliates. MVL shall have reasonable approval rights over such
inclusions, such approval not to be unreasonably
withheld.
1.16 "
Marvel Handbook " means the Official Handbook of the Marvel
Universe (1983 Edition), any other Official Handbook of the Marvel
Universe published thereafter and such other source reference
material identified by MRI to MVL in writing prior to the
commencement of development of a Picture for a Main
Character.
1.17 "
Master Agreement " means that certain Master Development and
Distribution Agreement, dated as of August 31, 2005 among MVL,
MPROD and MSI as the same may be amended, supplemented or modified
by agreement of the parties thereto.
1.18 "
MCI Assignment Agreement " means that certain Assignment
Agreement, dated as of August 31, 2005 between MCI and
MRI.
1.19
“
MEI ” means Marvel Entertainment, Inc.
1.20 "
Merchandising Rights " means, with respect to each Picture,
Literary Material and the Property, the exclusive, perpetual,
worldwide right to license, sublicense, manufacture, have
manufactured, distribute, or sub-distribute, sell, convey, market,
advertise, promote and publicize, in any manner and by any means
now known or hereafter devised, articles of merchandise and/or
products of any kind and nature (including, without limitation,
props, toys, board games, video games, home products, novelties,
trinkets, souvenirs, apparel, fabric, foods, candy, electronic
toys, trading card games, beverages and cosmetics) and the right to
license, sublicense, distribute, sub-distribute, sell, market,
advertise, promote and publicize, in any manner and by any means
now known or hereafter devised, services which embody on or in such
merchandise, products or services in whole or in part or in
combination with other intellectual property owned or controlled by
MCI or
3
MRI and/or the Property, New
Characters, other characters, designs, visual representations,
names, likenesses and/or characteristics of artists, physical
properties or any other materials appearing or used in or in
connection with the Picture, including the Picture-Related Items
and/or Picture-Related Elements, or all or any part of the Literary
Material, at whatever stage of completion, and the right to
publish, distribute, sub-distribute, sell, advertise, promote and
publicize, in any manner and by any means now known or hereafter
devised, souvenir programs, picture books, comic books, post cards,
movie novels, photo novels, illustration books and activity books
or booklets in electronic or physical form which embody the
foregoing in whole or in part or in combination with other
intellectual property owned or controlled by MRI or MCI and/or the
Property, New Characters, other characters, designs, visual
representations, names, likenesses and/or characteristics of
artists, physical properties or other materials appearing or used
in or in connection with the Picture, including without limitation
the Picture-Related Items and/or Picture-Related Elements, or all
or any part of the Literary Material, in whatever stage of
completion or Clip Rights in connection therewith. "Clips Rights"
shall mean a royalty-free right (excluding reuse fees, residuals
and any and all third party fees) by MRI to use or license third
parties to use stills and/or clips (and/or music), not exceeding
two (2) minutes in running time, from each of the Pictures in or in
conjunction with Merchandising Rights or Reserved Rights, including
articles, venues or services (including in its on-line services,
the worldwide web and other electronic means of distribution)
licensed by MRI and the right to use the same in connection with
the exercise by MRI of its Co-Promotion/Commercial Tie-In
Rights.
1.21 "
Minor Character " means those characters set forth under the
heading “ Iron Man ” on Schedule 1.17 of
Exhibit A to the Amendment.
1.22 "
MRI Family Co-Promotion/Commercial Tie-In " means a
co-promotion/commercial tie-in in which (A) the intellectual
property licensed by MRI includes not less than two (2) Main
Characters, Subsidiary Characters, or Minor Characters (or one (1)
of any of the foregoing with another Marvel character); and (B) no
one Main Character, Subsidiary Character or Minor Character shall
appear more prominently than any one other character in such
co-promotion/commercial tie-in.
1.23 "
Musical Composition " means a musical composition,
irrespective of length, comprised of, but not limited to, lyrics,
spoken words, sounds, arrangements and bridging passages.
Recordings of more than one (1) arrangement, translations,
adaptation, derivative work or version of the same Musical
Composition or Record shall be considered, collectively, a
recording of one (1) Musical Composition for all purposes under
this Agreement.
1.24 "
Music Publishing Rights " means, with respect to each
Picture, the right to: (i) publicly and privately perform, or
license the right to publicly and privately perform, the Musical
Compositions in any manner and in any and all media now known or
later developed, including, without limitation, all forms of
theatrical and non-theatrical exhibition, free, pay, subscription,
toll and basic origination television and radio whether programming
is transmitted or distributed by over-the-air broadcast,
terrestrial broadcast, microwave, cable, closed circuit or direct
broadcast, satellite, or so-called podcast, and use in trailers,
advertisements, promotional material, Records and all other forms
of audiovisual device for home use or otherwise, and any electronic
media, whether interactive or not, including, without limitation,
videogames, the Internet, or by any other means, methods or modes
now known or later developed; (ii) substitute a new title or titles
for Musical Compositions and to make, or license the right to make,
any arrangement, adaptation, derivative
4
work, translation, dramatization or
transposition of Musical Compositions, in whole or in part, and
couple Musical Compositions with any other musical, visual imagery,
literary or dramatic material; (iii) secure existing and new
copyrights and all registrations thereto, including any and all
renewals and extensions of copyright under any present or future
laws, and any and all other rights, claims and demands (to the
extent the party granting the rights described herein has any such
rights, claims or demands) that any artist, producer or other
copyright holder now has or to which they might be entitled or that
hereafter they could or might secure with respect thereto if these
presents had not been made, and to have and to hold the same with
respect to Musical Compositions, absolutely and forever throughout
the world in perpetuity; (iv) make, or license the right to make,
Records, sound tracks, pressings, and all other mechanical,
electrical or other reproductions of Musical Compositions, in whole
or in part, in any form or manner, including the right to
synchronize the same in timed relation with Records (including, but
not limited to sound motion pictures, television, home videos and
other media now known or later developed) and the right to copy,
manufacture, reproduce, advertise, license, publish, distribute,
sell or otherwise use and exploit Musical Compositions, and all
reproductions thereof, for any and all purposes and by any and
means, method or mode now or later developed, including, but not
limited to, over-the-air broadcasting, terrestrial broadcasting,
webcasting, podcasting, television and all other transmission or
distribution means, methods or modes now known or later developed;
(v) print, publish, display and sell sheet music orchestrations,
arrangements and other editions of Musical Compositions in all
forms, including, but not limited to, the right to include any and
all Musical Compositions in song folios and lyric magazines with or
without music, and the right to license others to include, any and
all Musical Compositions in song folios and lyric magazines with or
without music; and (vi) any and all other rights of every and any
nature now or hereafter existing under and by virtue of any common
law rights and any copyrights (and renewals and extensions thereof)
in any and all Musical Compositions.
1.25 "
Music Rights " means, with respect to each Picture, the
right to license, record, copy and/or reproduce musical
compositions for use in synchronization or timed relation with the
visual component of the Picture.
1.26 "
MVL Granted Rights " means: (A) (i) the Publishing Rights,
(ii) the Literary Publishing Rights, (iii) the Music Publishing
Rights in and to the Musical Compositions embodied in a Soundtrack,
(iv) the Soundtrack Recording Rights (and the right to receive
Statutory Copyright Revenues associated therewith), (v) the
Marketing Rights, on a non-exclusive basis, (vi) the right to use
and exploit in any manner now known or hereafter devised for any
purpose, in whole or in part, the Literary Material or the Picture,
subject to the Rights, (vii) exclusive, worldwide, transferable
(including sublicenseable), irrevocable, fully paid-up and
perpetual right and license to exploit any New Characters in any
manner now known or hereafter devised, including without
limitation, the right to make Derivative Works based on the New
Characters, subject to the Rights, provided however, to the extent
a New Character is an enhancement or modification to an existing
Subsidiary Character or Minor Character, MRI shall have the right
to use such New Character in any manner without restriction,
including without limitation any restriction imposed by the Rights,
(viii) all right, title and interest in and to the Merchandising
Rights on an exclusive, worldwide, perpetual, transferable
(including sublicenseable), fully paid-up basis to the extent and
if for any reason the Merchandising Rights are not determined to be
Reserved Rights and (ix) all right, title and interest in and to
the Publishing Rights on an exclusive, worldwide, perpetual,
transferable (including sublicenseable), fully paid-up basis to the
extent and if for any reason the Publishing Rights are not
determined to be Reserved Rights; and (B) the exclusive,
transferable (including sublicensable),
5
perpetual, irrevocable, fully
paid-up, worldwide right and license to use in any manner and for
any purpose, including without limitation, the right to modify,
alter, edit, add to, subtract from, or combine any Picture-Related
Item or Picture-Related Element or other elements or material from
the Picture, including without limitation, in connection with or as
part of the rights set forth in clause (A) of this
Section 1.29 , or in connection with or as part of the
Reserved Rights (as defined in Section 5 below), including
without limitation, the Merchandising Rights and the Publishing
Rights or in any other manner. The rights set forth in this
Section 1.29 further include without limitation the
exclusive, transferable, perpetual, irrevocable worldwide right and
license to market, promote, advertise, exploit, sell, license,
sublicense, distribute, subdistribute, alter, modify, edit, use and
create derivative works based on or using the rights set forth
herein, the right to bring any claims or causes of action in MRI's
name or in the name of MVL and to retain any sums received in
connection therewith in connection with the rights granted to or
reserved for MRI in this Agreement, and with respect to the Music
Publishing Rights to register the Musical Compositions with any
performing rights organizations.
1.27 "
New Characters " means all new characters and all
enhancements to pre-existing Main Characters, Subsidiary Characters
or Minor Characters and all other items or properties of any
description created by or for MVL, or which otherwise first appear
in a Picture or Derivative Work produced or created by or for MVL
or in connection with the marketing, distribution and/or
exploitation of any such Picture or Derivative Work or the exercise
by MVL of any of its Rights.
1.28 "
Picture " means a first-class live action (which may include
CGI) or animated (which may include CGI) motion picture produced in
the English language with a running time (excluding credits) of at
least 86 minutes and no longer than 150 minutes intended to be and
which shall be initially released and exhibited through Theatrical
Distribution in movie theaters in the United States (or
simultaneously around the world) based on either: (i) the Main
Characters (or the Subsidiary Characters subject to the
restrictions set forth in Section 3.2.2 below) or (ii) an
individual Character Title, which qualifies for an MPAA rating no
more restrictive than "PG-13" (or the equivalent thereof if such
rating no longer exists) and which has a Direct Negative Cost of
not less than $50 Million and not more than $165 Million (the "
Maximum Budget "); provided , however , the
Maximum Budget amount may be increased with the prior written
consent of the Control Party.
1.29 "
Picture-Related" or "Picture-Related Item " means any
merchandise, product, service, element or other item of any nature
relating to the Property with respect to which either the item
itself, or its packaging (or "hang-tags") or its marketing or
promotional materials, explicitly references a Picture (e.g., "Now
a major motion picture") or contains, uses or incorporates any
distinguishable element, artwork, design, logo or other material,
whether physical or digital, tangible or intangible, which first
appears in a Picture or is created by or for MVL in connection with
any Picture or Literary Material or the marketing or co-promotion
thereof, including without limitation, any New Character(s) or the
name or likeness of any actor or other creative element performing
services in connection with any Picture (a " Picture-Related
Element "), irrespective of whether such Picture-Related
Element is combined with other elements or images which are newly
created or are taken from the Property or other sources.
1.30 "
Property " means the Main Characters, Subsidiary Characters
and Minor Characters.
6
1.31
"
Premiums " shall have the meaning set forth in Section
8 .
1.32 "
Publishing Rights " means, in addition to such related
rights included in the Merchandising Rights, all publishing rights
(whether in digital or print form) with respect to each Picture,
the Property and Literary Material including without limitation the
right to create anthologies, series of books, novels, "how to"
books, guide books, fictional or non-fictional books based on all
or part of the Picture, Property or Literary Material in hard cover
or soft cover and the right to make text with or without
supplemental pictures, images or artwork or comic books (consisting
of text and pictures, images or artwork) based on each Picture, the
Property and/or Literary Material and the right to make any of the
foregoing available to a reader by means of a digital or electronic
delivery system (e.g., by means of CD-ROM, DVD or the Internet),
whether or not the foregoing includes characters in motion
accompanying such text, and the right to use continuous or
intermittent music in connection with the foregoing in its sole
discretion, in each such case, other than as limited by the
Distribution Rights granted to MVL hereunder.
1.33 "
Records " means all forms of reproductions and phonograph
records now known or later developed, including all material
objects, recordings of all type, virtual files, and products and
devices of every kind and character in which sound or sound
accompanied by visual images are fixed by any method now know or
later developed and from which sound or sound accompanied by visual
images can be recorded and later perceived, reproduced,
transmitted, downloaded or otherwise communicated to listeners,
either directly or with the aid of a machine or device now known or
later developed, including via radio, television, film, the
Internet or any other manner of medium.
1.34
"
Reserved Rights " has the meaning set forth in Section
5 .
1.35 "
Rights " has the meaning set forth in Section
3.1.
1.36 "
Soundtrack " means all Records manufactured or otherwise
derived, in whole or in part (including using Musical Compositions
from non-Picture sources), from any Musical Composition utilized in
the Picture or from a re-recording, re-arrangement, adaptation,
translation, derivative work or modified version of any Musical
Composition utilized in the Picture, including without limitation,
in whole or in part, any and all Musical Compositions and Records
created by or for MVL.
1.37 "
Soundtrack Recording Rights " means the right to: (i)
manufacture, reproduce, display, distribute, download, transmit or
otherwise deliver; (ii) sell, license, lease, rent, release,
import, export, transfer, convey, advertise, promote, publicize,
market, or otherwise deal in, dispose or exploit, under any
trademark, trade name and/or label, or refrain from such dealings;
(iii) adapt, create derivative works of, couple and otherwise use;
(iv) prepare Ephemeral Recordings of; (v) publicly and privately
perform, or license the right to publicly and privately perform, in
any manner and in any and all media now known or later developed,
including, without limitation, all forms of theatrical and
non-theatrical exhibition, free, pay, subscription, toll and basic
origination television and radio whether programming is transmitted
by over-the-air broadcast, terrestrial broadcast, microwave, cable,
closed circuit or direct broadcast satellite, so-called podcast,
use in trailers, advertisements, and promotional material thereof,
Records and all other forms of audiovisual device for home use or
otherwise, and any electronic media whether linear or not, and any
interactive uses including, without limitation, the Internet, or by
any other means, methods or modes now known or
7
later developed; and (vi) secure
existing and new copyrights and all registrations thereto,
including any and all renewals and extensions of copyright under
any present or future laws, and any and all other rights, claims
and demands that any writer, composer, producer or other copyright
holder now has or to which they might be entitled or that hereafter
they could or might secure with respect thereto if these presents
had not been made, and to have and to hold the same with respect to
all Records manufactured or otherwise derived, in whole or in part,
from the Soundtrack, absolutely and forever throughout the world in
perpetuity.
1.38 "
Sponsorship Rights " has the meaning set forth in Section
8 .
1.39 "
Statutory Copyright Revenue Rights " means the right to
collect Statutory Copyright Revenues, and the right to collect or
to arrange for the collection of Statutory Copyright Revenues
resulting from the secondary transmission or re-transmission of
each Picture, by any means now known or hereafter
devised.
1.40 "
Statutory Copyright Revenues " means, with respect to each
Picture, all royalties, fees and other revenues which are entitled
to be collected by reason of any statute, governmental regulation
or operation of law, based upon or in connection with, in whole or
in part, or directly or indirectly, any exercise of the
Distribution Rights in and to the Picture.
1.41 "
Subsidiary Characters " means those characters set forth
under the heading “ Iron Man ” on Schedule 1.27
of Exhibit A to the Amendment.
1.42 “
Unencumbered Character ” and “ Unencumbered
Characters ” shall have the meanings set forth in the
Amendment.
1.43 “
Unencumbered Character Project ” means live action or
animated feature length theatrical motion picture, the screenplay
for which is based on one or more Unencumbered
Characters.
2.
SUBSEQUENT NOTICE . MVL shall not be entitled to exercise
any of the Rights (as defined below), other than as may be
incidental to the pre-production of a Picture (for example, script
development and writing, production planning and the like) until
MRI shall have delivered a written notice to MVL authorizing MVL to
exercise the Rights. Such notice may be delivered to any party
entitled thereto as a condition to financing under the Credit
Agreement. MRI shall be entitled to give or not give such notice in
its sole discretion. MRI shall not assign the right to provide such
notice to any person except to an Affiliate of MEI. The requirement
to provide such subsequent notice shall in no event impair the
vesting of title in the Rights as licensed by this Agreement in
MVL.
|
3.
|
MRI - MVL GRANT OF
RIGHTS .
|
3.1
Grant of Rights . Subject to the terms and conditions of
this Agreement, and subject to the terms and conditions of the
Amendment, including Section 2 of the Amendment with respect to the
option to remove the Property, MRI hereby grants to MVL the
following rights (collectively, the " Rights "):
3.1.1 The
exclusive, worldwide, transferable (including without limitation
sublicenseable), irrevocable and perpetual right to produce the
Pictures (each of which shall initially
8
be released through Theatrical
Distribution), and sequels, prequels to and remakes of the Pictures
(the " Production Rights ");
3.1.2 The
Music Rights, on an exclusive, worldwide, transferable (including
without limitation sublicenseable), irrevocable and perpetual
basis;
3.1.3 The
Distribution Rights for each Completed Film based on Iron Man, on
an exclusive, worldwide, transferable (including without limitation
sublicenseable), irrevocable and perpetual basis;
3.1.4 The
Co-Promotion/Commercial Tie-In Rights, for each Completed Film
based on Iron Man, during the Co-Promotion/Commercial Tie-In Period
on an exclusive, worldwide, irrevocable, transferable (including
without limitation sublicenseable), basis subject to the terms of
Section 8 ;
3.1.5 The
Marketing Rights, on a non-exclusive, worldwide, transferable
(including without limitation sublicenseable), irrevocable and
perpetual basis;
3.1.6 The
Statutory Copyright Revenue Rights with respect to the Rights (as
opposed to the MVL Granted Rights) (e.g., Statutory Copyright
Revenues associated with Music Publishing Rights shall be retained
by MRI as part of the MVL Granted Rights), on an exclusive,
worldwide, transferable (including without limitation
sublicenseable), irrevocable and perpetual basis;
3.1.7 The
exclusive right, in connection with the exercise of the Rights
granted pursuant to Sections 3.1.1 through 3.1.5
above and subject to the limitations set forth in Section
3.2 below, to use the name of a Main Character, Subsidiary
Character, and Minor Character, as applicable, in or in connection
with a Picture based upon such Main Character, Subsidiary
Character, Minor Character or Character Title as applicable, it
being acknowledged by MVL that such right is exclusive only as to
the Pictures and that MRI retains such right in all other
circumstances; and
3.1.8 The
non-exclusive right, subject to Section 14.5 below to use
the "Marvel" name and logo in or in connection with each of the
forgoing rights specified in this Section 3.1 .
No rights set forth in Sections
3.1.1 and 3.1.8 may be transferred, licensed,
sublicensed or otherwise conveyed, granted to, or exercised by, a
Competitor (as defined in the Master Agreement). MVL may only
exercise the rights granted in this Section 3.1 in a manner
consistent with the terms hereof.
|
|
3.2
|
Grant of Rights
Limitations .
|
3.2.1
Title Limitations . Notwithstanding the foregoing or
anything else to the contrary set forth in this Agreement, MVL
shall only have the right to use the name of a Main Character or
Subsidiary Character, as applicable, as or as part of the title of
a Picture which is based upon such Main Character or Subsidiary
Character (e.g., the "Iron Man" name may only be used in or in
connection with a Picture based upon "Iron Man"). Further, MVL
shall not have the right to: (i) use the name of a Main Character
or Subsidiary Character as or as part of the title of a Picture
which is based upon a Character Title (e.g., the "Iron Man" name
may not be used as or as a part of
9
the title of a Picture based upon
the "Avengers;" provided , however , that for the
purpose of clarity such name may be used in or in connection with
such Picture, but not in the title, if the "Iron Man" character
appears in such Picture); or (ii) use a Character Title as or as
part of the title of a Picture which is based upon a Main Character
(e.g., "Avengers" may not be used as or as a part of the title of a
Picture based upon "Iron Man"; provided , however ,
that such limitation shall not apply if the Picture is based upon
the "Avengers" and the "Iron Man" character is a member of an
ensemble cast appearing in such Picture). Without the prior written
consent of MRI, each Main Character or Character Title may only be
used in or in connection with a Picture based upon such Main
Character or Character Title, as applicable; provided ,
however , that the Main Characters listed on Schedule
3.2.1 may be used in connection with a Picture based on the
applicable Character Title (e.g., "Iron Man" may only be used in or
in connection with a Picture based upon "Iron Man" or in a Picture
in which "Iron Man" is a member of an ensemble cast of the
"Avengers" and may not be used in a Picture based upon, for
example, "Doctor Strange").
3.2.2
Subsidiary Character and Minor Character Limitations . MVL's
right to use the Minor Characters in or in connection with a
Picture pursuant to the exercise of the grant of Rights set forth
in Section 3.1 above shall be at all times and instances
non-exclusive. Further, no Minor Character may be used in the title
of a Picture or be the principal character of a Picture, and each
Subsidiary Character or Minor Character may only be used in or in
connection with a Picture based upon the Main Character or
Character Title, as applicable, associated with the Subsidiary
Character or Minor Character (e.g., "Mandarin" may only be used in
or in connection with a Picture based upon "Iron Man" and may not
be used in a Picture based upon "Doctor Strange" or in a Picture in
which "Iron Man" is a member of an ensemble cast such as the
"Avengers"); provided however , if a Subsidiary
Character has appeared in a Picture, then thereafter, such
Subsidiary Character may be the principal character in a Picture
based on such Subsidiary Character (e.g., if Mandarin has appeared
in Iron Man, Mandarin may then be the principal character in a
movie about Mandarin). The preceding restrictions are of specific
importance and are conditions of the grant of Rights set forth in
Section 3.1 .
3.2.3
New Characters . The restrictions set forth in Section
3.2.2 shall not apply to New Characters.
4.
MVL - MRI GRANT OF RIGHTS . Subject to the terms and
conditions of the Amendment, including Section 2 of the Amendment
with respect to the option to remove the Unencumbered Characters,
in consideration of MRI's grant of rights to MVL as set forth above
and for other consideration the receipt and sufficiency of which is
hereby acknowledged, MVL hereby grants, conveys and transfers to
MRI, and MRI hereby accepts, a worldwide, exclusive (other than the
Marketing Rights which are non-exclusive), transferable,
irrevocable, fully-paid up and perpetual right and license to the
MVL Granted Rights. It is the intention of the parties that the
Merchandising Rights and Publishing Rights be Reserved Rights. If
for any reason whatsoever all or part of the Merchandising Rights
or all or part of the Publishing Rights are deemed not to be
Reserved Rights, then the grant of rights set forth in this
Section 4 shall automatically be deemed to include and shall
and does include a grant to MRI of the Merchandising Rights and or
Publishing Rights on an exclusive, perpetual, irrevocable,
transferable, sub-licenseable, worldwide, royalty free, fully paid
up basis and which grant shall be deemed by the parties to be part
of the MVL Granted Rights. The MVL Granted Rights include all
rights to any of such rights that may be hereafter created,
acquired or licensed-in by MVL.
10
5.
MRI’S RESERVED RIGHTS . Notwithstanding anything to
the contrary set forth in this Agreement, MRI hereby reserves all
rights of any kind and nature (including, without limitation, with
respect to each Picture, Property, Literary Material or other item,
right or material) not expressly granted to MVL pursuant to
Section 3.1 hereof, including without limitation
(collectively the " Reserved Rights "):
|
|
5.1
|
The Merchandising Rights;
|
5.3 The
exclusive, perpetual, irrevocable, transferable (including without
limitation sublicenseable), worldwide right to produce, distribute
and otherwise exploit any audio-visual work (or audio or visual),
either live action or animated, of any length, or cause any of the
foregoing to occur, which is produced for initial exploitation by
any means other than Theatrical Distribution, including without
limitation direct sales to the home market or the
Internet;
5.4 The
exclusive, perpetual, irrevocable, transferable (including without
limitation sublicenseable), worldwide right to produce, distribute
and otherwise exploit or cause any of the foregoing to occur
television programs, whether live action or animated, including
without limitation, movie of the week, mini-series, long form, and
episodic television programs which are intended for initial
exploitation by means of television;
5.5 The
exclusive, perpetual, irrevocable, transferable (including without
limitation sublicenseable), worldwide right to license, construct
and operate theme park attractions (including any and all
location-based attractions and outdoor amphitheater shows),
restaurants and arena shows (including ice shows and other touring
shows);
5.6 The
exclusive, perpetual, irrevocable, transferable (including without
limitation sublicenseable), worldwide right to produce or authorize
live stage productions. Notwithstanding the foregoing, no live
stage show may be recorded and/or transmitted for Theatrical
Distribution.
5.7 The
exclusive, perpetual, irrevocable, transferable (including without
limitation sublicenseable), worldwide right to broadcast by means
of radio, audio-only programs; provided , however ,
that the foregoing shall not limit MVL’s right to advertise
and promote each Picture by means of radio;
5.8 The
right to conduct co-promotions and/or commercial tie-ins with
respect to the Property that do not include the Picture on a
perpetual, irrevocable, transferable (including without limitation
sublicenseable), worldwide basis;
5.9 MRI
Family Co-Promotions/Commercial Tie-Ins, on a perpetual,
irrevocable, transferable (including without limitation
sublicenseable), worldwide basis;
5.10 With
respect to the Reserved Rights, the right to market, advertise and
promote any or all of such Reserved Rights by any means, manner or
medium now known or hereafter devised and the right to cause any of
the foregoing Reserved Rights to occur.
|
6.
|
SOUNDTRACK ROYALTY / MUSIC
PUBLISHING ROYALTY .
|
11
6.1 Subject
to (a) the effective grant of the applicable rights pursuant to
Section 4 (i.e., provided MVL has or acquires the Music
Publishing Rights with respect to a Musical Composition to grant to
MRI) or if MRI owns the Music Publishing Rights as a result of an
agreement with MVL or the applicable production services company to
create such Musical Composition and such agreement grants ownership
of the Music Publishing Rights to MRI; and (b) the terms of this
Agreement, MRI agrees to pay or cause to be paid to MVL the Music
Publishing Royalty set forth on Exhibit C attached
hereto.
6.2 Subject
to (a) the effective grant of the applicable rights pursuant to
Section 4 (i.e., provided MVL has or acquires the Soundtrack
Recording Rights to grant to MRI) or if MRI owns the Soundtrack
Recording Rights as a result of an agreement with MVL or applicable
production services company to create a Soundtrack for a Picture
and such agreement grants ownership of the Soundtrack to MRI; and
(b) the terms of this Agreement, MRI agrees to pay or cause to be
paid to MVL the Soundtrack Royalty set forth on Exhibit D
attached hereto.
7.
SERVICES FEE AND BACKEND PARTICIPATION . Following an Event
of Default (as defined in the Credit Agreement), if a Picture is
produced and MSI or its designee or assignee is not receiving its
Affiliate Producer Fee (as defined in the Master Agreement) then
MRI or its designee or assignee shall receive for each such Picture
a fixed service fee of US$750,000 (" Fixed Services Fee ")
and Two and One-Half Percent (2.5%) of One Hundred Percent (100%)
of the aggregate of Gross Receipts and Co-Financing Amounts (both
as defined in the Master Agreement) derived from the exploitation
of each Picture (" Back-End Services Fee "). No Back-End
Services Fee shall be paid to MRI or its designee or assignee with
respect to a Picture until the Participations (as defined in the
Master Agreement) otherwise payable to MSI or its designee or
assignee for said Picture equals the Fixed Services Fee. The Fixed
Services Fee shall be payable pursuant to the payment schedule for
the Fixed Producer Fee set forth in the Master
Agreement.
8.
CO-PROMOTION/COMMERCIAL TIE-IN RIGHTS . MVL shall not enter
into any Co-Promotion/Commercial Tie-In with a theme park without
MRI's prior written approval, such approval not to be unreasonably
withheld or delayed; provided , however , that MVL
shall be entitled to withhold its consent in its sole discretion
due to any conflict with that certain theme park licensing
agreement dated as of March 22, 1994 between MCA Inc. (" MCA
") and Marvel Entertainment Group, Inc., as amended (" MCA
Agreement "), or any other existing agreement pertaining to
theme parks. With respect to the use of " Premiums "
(Premiums to be defined as a giveaway, merchandise or other
promotional item used by or in connection with Tie-In Partners
(e.g., a "Iron Man" action figure, cup or t-shirt distributed with
children’s' meals at a fast food restaurant), MRI shall have
the right to approve all Premiums which approval may be withheld
for any reason or no reason. MVL shall fully consult with MRI
regarding, and give good faith consideration to, conducting
Co-Promotions/Commercial Tie-Ins with MRI's pre-existing
promotional partners. MVL shall not at any time enter into any
Co-Promotion/Commercial Tie-In agreement, which includes
exclusivity provisions or other terms, which would restrict MRI's
right to conduct or exercise its Merchandising Rights.
Notwithstanding anything contained in this Agreement to the
contrary, MRI shall at all times be permitted to conduct MRI Family
Co-Promotions/Commercial Tie-Ins. MRI shall have the right, at all
times, to conduct co-promotions/commercial tie-ins which do not
relate to any Picture. For the purpose of clarity, MRI's exercise
of its Reserved Rights and/or the MVL Granted Rights shall not at
any time and in any manner whatsoever be deemed to conflict with
MVL's Co-Promotions/Commercial Tie-In Rights. Further, the
exploitation by MCA of its rights pursuant to the MCA Agreement
shall not at any time
12
and in any manner whatsoever be
deemed to conflict with MVL’s Co-Promotion/Commercial Tie-In
Rights. For the avoidance of doubt, MVL's Co-Promotions/Commercial
Tie-In Rights shall not include "Sponsorship Rights" in any manner
or respect. “ Sponsorship Rights ” are defined
as a promotional arrangement between MRI (or a third party which
has been authorized by MRI) to conduct a live event and a company,
which desires to associate its products or its brand with such live
event; provided, however, that Sponsorship Rights shall not
preclude MVL from holding a premiere party for the Picture. MRI
shall have the right to conduct Co-Promotions/Commercial Tie-In
following the expiration of the Co-Promotion/Commercial Tie-In
Period.
9.
CONSULTATION/APPROVAL . MRI shall have the following
consultation and approval rights with respect to MVL's exercise of
the Rights in connection with each Picture:
9.1
Consultation Rights . MRI shall have a right of full and
meaningful creative consultation with respect to each of the
following (" Consultation Rights "): (i) all key creative
elements, personnel and facilities (e.g., budgets, writers,
producers, key crew members, principal visual effects vendor,
principal post-production facility); (ii) the worldwide marketing
budgets, plans and release schedules, and all other key creative
marketing aspects of each Picture, including without limitation,
all images, one sheets, billboards, trailers, packaging for Video
Items, newspaper ads and television ads. MRI shall exercise the
Consultation Rights in a reasonable manner and not so as to
frustrate the full and timely development, production and/or
exploitation of each Picture. For the avoidance of doubt,
"consultation" shall mean MVL ensuring in advance and in good faith
that MRI has the opportunity to participate in connection with the
above referenced Consultation Rights.
9.2
Approval Rights . MRI shall have the right to approve ("
Approval Rights "): (i) the story or other "first" writing
step (including the basic setting); (ii) each draft of the
screenplay, including without limitation, the final screenplay;
(iii) the powers, costumes, key animation design (if applicable)
and "look" of each Main Character, Subsidiary Character, Minor
Character and Character Title and any other element not expressly
set forth in order to ensure the consistency thereof to the Marvel
Handbook or such other source reference material identified by MRI
to MVL in writing prior to the commencement of development of a
Picture for such Character or Character Title (" Character
Integrity "); (iv) the advertising and marketing materials in
order to ensure Character Integrity; (v) the creation and use of
New Characters, including each New Character's powers, origin
story, costume, key animation design (if applicable) and "look";
(vi) the director; (vii) the principal cast members; (viii) the use
of any Trademark (as defined in the MCI Assignment Agreement); (ix)
the exercise of the Co-Promotion/Commercial Tie-In Rights as set
forth in Section 8 above; and (x) edits, dubs, subtitles and
other alterations to the Completed Film (as defined in the Master
Agreement) made in connection with the marketing, distribution or
exploitation of such Completed Film solely in order to ensure
Character Integrity .
9.3
Post Event of Default Creative Approval Rights . From and
after an Event of Default and following foreclosure on the
Collateral (as such terms are defined in the Credit Agreement), MRI
shall not have any of its rights set forth in Sections 9.1
and 9.2 above, but shall instead have the Approval Rights
set forth in this Section 9.3 , which rights shall be
limited to MRI's right to approve: (i) the story or other "first"
writing step (including the basic setting) solely in order to
ensure Character Integrity; (ii) each draft of the screenplay,
including without limitation, the final screenplay solely in order
to ensure Character Integrity; (iii) the powers, costumes, key
animation design (if applicable) and "look" of each Main Character,
Subsidiary Character, Minor Character
13
and Character Title and any other
element not expressly set forth solely in order to ensure Character
Integrity; (iv) the advertising and marketing materials solely in
order to ensure Character Integrity; (v) the creation and use of
New Characters, including each New Character's po
|
