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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended August 31, 1996
[X] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________ to ________
Commission file number: 000-24452
RMS TITANIC, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-2753162
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
17 Battery Place, Suite 203, New York, NY 10004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 558-6300
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the registrant's common stock on
October 18, 1996 was 16,137,119.
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The Quarterly Report on Form 10-Q for the quarterly period ended August
31, 1996 is amended by this Form 10-Q/A to revise Exhibit 10.3 in Item 6 of Part
II as follows:
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
10.3 Agreement dated July 22, 1996 between Discovery
Communications, Inc., Ellipse Programme and the Company
(as redacted to reflect the omission of confidential
information filed separately).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
RMS TITANIC, INC.
(Registrant)
Dated: November 10, 1998 By: s/George Tulloch
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George Tulloch,
Principal Executive Officer
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EXHIBIT INDEX
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Exhibit No. Description
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10.3 Agreement dated July 22, 1996 between Discovery
Communications, Inc., Ellipse Programme and the Company
(as redacted to reflect the omission of confidential
information filed separately).
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Agreement, dated as of July 22, 1996 (this "Agreement"), by and among
Discovery Communications, Inc. ("DCI"), a Delaware corporation having its
principal place of business at 7700 Wisconsin Avenue, Bethesda, Maryland 20814,
Ellipse Programme, a French corporation having its principal place of business
at 15 Square Vergennes, 75015 Paris, France ("Ellipse"), which entity is a
subsidiary of the Canal+ Group, and RMS Titanic, Inc., a Florida corporation
having its principal place of business at 17 Battery Place, Suite 203, New York,
New York 10004 ("RMST").
RECITALS
The parties hereto are involved in the undertaking of the Titanic
shipwreck scientific research expedition and recovery operation by RMST that is
scheduled to occur during the summer of 1996 (the "Expedition") and the
production and delivery of the documentary television programs described below
on the subject of the Titanic shipwreck and the Expedition (the "Programs" and,
together with the Expedition, are referred to collectively as the "Project").
In consideration of the foregoing and of the mutual promises and covenants
hereinafter set forth, the parties hereto hereby agree as follows:
1. The Expedition. The Expedition shall consist of the following activities
and events:
a. The vessels that will be participating in the Expedition are (i) the
Ocean Voyager vessel, together with its submersibles and other
assets and facilities (the "Ocean Voyager") belonging to Aqua+, a
subsidiary of the Canal+ Group ("Aqua+"), which vessel shall be
chartered by RMST, pursuant to a Charter Agreement to be entered
into between RMST and Aqua+ (the "Ocean Voyager Charter Agreement"),
which agreement shall provide, without limitation, that the Ocean
Voyager shall contain thereon at least all of the equipment listed
on Schedule 1(a) hereto) and which agreement shall reflect the terms
of the letter agreement of even date herewith between Aqua+ and RMST
attached hereto as Schedule 1(a)(1), and (ii) the Nadir vessel,
together with its submersibles and other assets and facilities (the
"Nadir", the Nadir and the Ocean Voyager may be referred to
collectively as the "Vessels") belonging to the French Institute for
the Research and Exploration of the Seas ("IFREMER") that RMST has
chartered for the Expedition pursuant to an agreement, dated June
12, 1996, between RMST and IFREMER (the "IFREMER Charter
Agreement"). The parties hereto agree that the charter of the Ocean
Voyager by RMST shall also be governed by and subject to the letter
agreement of even date herewith between DCI and RMST attached hereto
as Schedule 1(a)(2). The parties hereto further agree that DCI's
obligation to pay RMST the amount set forth in Section 1(c)(ii)
below is subject to DCI'S receipt, review and approval of the Ocean
Voyager Charter Agreement.
b. Subject to the terms of the IFREMER Charter Agreement, during late
July through early September of 1996, RMST shall cause the Nadir to
work in tandem with the Ocean Voyager to pursue and obtain coverage
of scientific research on the Titanic shipwreck as contemplated by
the editorial treatment for the Programs as determined by Producer
(as defined below). RMST shall cause IFREMER to (i) attempt to
illuminate and obtain video and still photography of the entire bow
and stern sections of the Titanic shipwreck and the surrounding
wreck site (the "Illumination
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Footage") and (ii) further the scientific and historical
conservation goals of the Expedition by recovering artifacts from
the Titanic, including the possible recovery from the debris field
surrounding the wreck and transport to the United States of a
section of the Titanic's hull having dimensions of approximately 25
ft. by 12 ft. DCI shall have the right to place its designated
production crew on site for purposes of filming, taping and
otherwise recording all activities associated with the Expedition
(the "DCI Production Activities"), and RMST and Ellipse agree to
accord DCI and its representatives full rights of access with
respect to the Expedition to accommodate any such DCI Production
Activities. Subject to the terms and conditions of the Agreement,
dated March 8, 1996, between RMST and Guiness Import Company (the
"Bass Ale Agreement"), as such Bass Ale Agreement exists on the date
of this Agreement, the parties hereto agree that, notwithstanding
the salvage rights of RMST, and RMST's right to retain all salvage
materials recovered thereby, (A) the production and editorial needs
of Producer with respect to the Programs, and the scheduling of such
shoots, shall in all events take priority over any dives or other
missions to salvage materials from the Titanic shipwreck and shall
be obtained primarily during the first two weeks of the Expedition,
and (B) the filming of all Expedition Recordings (as defined below)
undertaken by RMST will be done subject to Producer's control and in
a manner that does not interfere in any way with the DCI Production
Activities. Without limiting the generality of the foregoing, the
parties hereto further agree that RMST shall cause IFREMER's deep
diving submersible Nautile to procure for Producer the list of shots
set forth on Schedule 1(b) attached hereto on a first priority
basis. In addition, the parties hereto further agree that, where
feasible, RMST shall cause the Ocean Voyager submersibles, together
with the Nadir, to engage in a number of shallow water dives, which
shall be filmed to provide footage for Producer showing the
submersibles in operation under water.
c. Notwithstanding any other provision of this Agreement, the entering
into of this Agreement by DCI and DCI's participation in the Project
are expressly conditioned upon and subject to the written approval
by the parties hereto of the budget for the Project (the "Budget").
Each of the parties hereto hereby confirms its approval of the
Budget attached hereto as Schedule 1(c)(1) and incorporated by
reference herein. The maximum cost figure of the Budget, as set
forth thereon, is U.S. * Schedule 1(c)(2) attached hereto and
incorporated by reference herein summarizes the respective
obligations of each party hereto with respect to the funding of the
Budget, and the parties hereto agree to be bound thereby. In
addition, the parties hereto further agree as follows:
i. * shall pay to RMST the aggregate amount of 4.1 million French
francs which amount RMST is obligated to pay to IFREMER
pursuant to the IFREMER Charter Agreement, 2.1 million French
francs of which shall be payable thereby upon the execution
and delivery by the parties hereto of this Agreement, and 2.0
million French francs of which shall be payable thereby not
later than July 15, 1996. RMST hereby authorizes and directs *
to pay the foregoing amounts directly to IFREMER in
satisfaction of its obligations to pay to RMST such amounts
pursuant to this Subsection (c)(i).
ii. * shall pay to RMST the aggregate amount of U.S. $550,000
which amount RMST is obligated to pay to Aqua+ pursuant to
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* denotes redacted material
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the Ocean Voyager Charter Agreement, such amount to be paid as
it becomes due under such Agreement. RMST hereby authorizes
and directs * to pay the foregoing amount directly to Aqua+ in
satisfaction of its obligations to pay to RMST such amount
pursuant to this Subsection (c)(ii).
iii. subject to the last sentence of this Subsection (c)(iii),
* shall pay to RMST the aggregate amount of U.S. $80,000 which
amount RMST is obligated to pay to Cokin Communications
Company, Inc. ("CCC") pursuant to a Consulting Agreement to be
entered into between RMST and CCC (the "Consulting
Agreement"), such amount to be paid as it becomes due under
such Consulting Agreement. RMST hereby authorizes and directs
DCI to pay the foregoing amount directly to CCC in
satisfaction of its obligations to pay to RMST such amount
pursuant to this Subsection (c)(iii). The parties hereto agree
that DCI's obligation to pay RMST the amount set forth in this
Subsection (c)(iii) is subject to the receipt, review and
approval by DCI of the Consulting Agreement.
The Budget is inclusive of all obligations of the parties hereto to
Aqua+ and IFREMER (as stated above), and inclusive of all other
costs relating to the production, completion and delivery of the
Programs, other than (i) certain deferred payments that RMST has
agreed to make to IFREMER in an aggregate amount not to exceed U.S.
$980,000 (the "IFREMER Deferment"), (ii) the costs of creating the
illumination required to obtain the Illumination Footage and (iii)
additional costs relating to the preparation of the Ellipse Version
(defined herein) of each Program, as contemplated by Section
2(b)(ii)(D) below (such additional costs which are the sole
responsibility of Ellipse). RMST hereby confirms that it shall be
solely responsible for paying the IFREMER Deferment and all costs
associated with obtaining the Illumination Footage (which costs of
illuminating the bow section RMST represents are approximately U.S.
$700,000), and neither DCI nor Ellipse shall have any liability or
obligation whatsoever with respect to the same. DCI and Ellipse
hereby confirm that, subject to the last sentence of this Subsection
1(c), RMST has no obligation to fund the Programs, other than U.S.
$100,000 described on Schedule 1(c)(2) hereto (which amount shall be
partially set off by DCI, as set forth therein). The costs of any
and all elements of, or enhancements to, the Project not anticipated
and included in the Budget shall be borne solely by the party
requesting the same, absent the prior written consent of the party
or parties to be charged.
2. The Programs; Production of the Programs; Budget.
a. The Programs. The Programs shall consist of (i) one (1) program
which shall be 52 minutes in length (the "Initial Program") and (ii)
one (1) program which shall be 104 minutes in length (the
"Special"), each of which shall be of the subject matter contained
in each of the treatments attached hereto as Schedule 2(a).
Notwithstanding the foregoing, Ellipse may, at its sole cost, edit
(subject to the editorial standards set forth in this Agreement) the
Special for the exhibition thereby in the Ellipse Territory (as
defined herein) to instead consist of two (2) programs, each of
which shall be 52 minutes in length.
b. Production of the Programs.
* denotes redacted material
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i. Redacted material
ii. Redacted material
(A) Redacted material
(B) Redacted material
(C) Redacted material
(D) Redacted material
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(E) Redacted material
(F) Redacted material
(H) Redacted material
(I) Redacted material
(J) Redacted material
(K) Redacted material
iii. Redacted material
iv. Redacted material
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v. Redacted material
c. Budget. As previously noted in Subsection 1(c), attached hereto as
Schedule 1(c)(1) is a copy of the Budget which has been agreed upon
by the parties hereto in connection with the Project. Each of the
parties hereto shall be responsible for performing those activities
which are line items of the Budget for which the Budget identifies
such party as being financially responsible. In addition, each party
agrees that to the extent costs associated with any line item exceed
the amount budgeted therefor in the Budget, including, without
limitation, any overage incurred with respect to the ship the Nadir
(which overage shall be the responsibility of RMST and IFREMER) such
increase shall be the responsibility of such party; provided,
however, that to the extent that any party hereto requests additions
and or enhancements to the Programs or the Project, the overages
associated with such request shall be the sole financial
responsibility of such requesting party; and further provided,
however, that such overages for any line item which is the financial
responsibility of DCI shall not be DCI's responsibility, to the
extent that Ellipse is responsible for such activity pursuant to the
Co-Production Agreement, if pursuant to the Co-Production Agreement,
such overages are stated to be the financial obligation of Ellipse
(such overages shall be in respect of the Ellipse Version of each
Program). In addition, with respect to telephone and room and board
charges aboard the Ocean Voyager, Ellipse shall be obligated for
such charges to the extent reflected in the Budget, and each of the
parties hereto shall be responsible for overages in respect thereof
to the extent incurred by or on behalf individuals retained by such
party. Ellipse hereby confirms and agrees that neither it nor Aqua+
has any control over, or rights in, the Programs (other than the
Television Rights (as defined below) and Home Video Rights (as
defined below) licensed to Ellipse pursuant to this Agreement, other
than as set forth in the Co-Production Agreement, as modified by the
Side Letter, and after giving effect to the Side Letter, all work
done by Ellipse in connection with the Programs shall be and
constitute a work-for-hire, all right, title and interest therein
which shall remain with DCI; provided, that as set forth herein,
Ellipse shall retain ownership interest in the Ellipse Elements
(defined herein).
3. Redacted material
4. Exclusive Access Rights. RMST and, as applicable, Ellipse, hereby grant to
DCI the exclusive rights of access to and coverage of the Expedition
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for documentary programming purposes. In order to effectuate and
facilitate the exercise of such exclusive rights by DCI, RMST and Ellipse
agree as follows:
a. until the earlier of the delivery of the Programs to DCI by
Stardust, or June 30, 1997, each of Ellipse and RMST shall accord
DCI and its representatives unrestricted access to and use of all
scientific, technical and historical research and other materials
owned or procured by, or made available to, as applicable, RMST or
Ellipse (including, without limitation, RMST agrees to accord DCI
access to all RMST-owned footage from prior Titanic expeditions,
totaling approximately 400 hours and contact information for all
participating consultants, researchers and specialists)
(collectively, the "Other Materials"). Such right to use the Other
Materials shall be limited to the inclusion thereof in the Programs;
provided, however, that Other Materials incorporated into the
Programs may be used in Other Productions (as defined in Section
8(b)(i) below) and in the exploitation of Electronic Media Rights
pursuant to Section 8(c) below. Additionally, RMST agrees to
authorize DCI to use certain Other Materials for the marketing,
distribution and promotion of the Programs, Other Productions, and
derivative works of the Programs such as home videos and CD-ROMS
that may be produced (the "Derivative Works"); provided, that all
Other Materials which are utilized by DCI in a print format will be
jointly selected and approved by DCI and RMST, with RMST reserving
the right to approve, in its reasonable business judgement, the type
and amount of Other Materials that DCI will be permitted to so use
in the print format for marketing, distribution and promotional
purposes, in light of the potential impact of DCI's proposed use on
the impairment of the commercial value of such Other Materials to
RMST. Notwithstanding the foregoing, DCI shall have the right to
utilize segments of the Programs, Other Productions and Derivative
Works that incorporate Other Materials in connection with the
marketing, distribution and promotion thereof through television
commercials. RMST and Ellipse hereby each represent and warrant
that, except as set forth on Schedule 4(a) attached hereto, it has
all rights in the Other Materials owned thereby necessary to grant
such right of use to DCI throughout the world in perpetuity in all
media, and with respect to Other Materials not owned thereby, upon
notification by DCI that DCI intends to make use of the same in
accordance with the terms of this Agreement, it shall inform DCI of
the rights it has therein, and shall cooperate with DCI to permit to
obtain any additional rights DCI may require to so make use of such
Other Materials. RMST and Ellipse further represent and covenant
that, at the request of DCI, and at DCI's cost, Ellipse and RMST
shall use their best efforts to secure any such rights as shall be
required for use by DCI;
b. Subject to the Bass Ale Agreement and the next sentence of this
Subsection 4(b), each of RMST and Ellipse hereby grant to DCI and
its designees the right and option to participate in all major
activities and events associated with the Project, wherever and
whenever undertaken during the period commencing on the date hereof
through the earlier of (i) June 30, 1997 and (ii) the U.S. premiere
of the Special on Discovery Channel. RMST agrees that its approval
right set forth in paragraph 4(b) of the Bass Ale Agreement shall be
(A) jointly exercised by DCI and RMST with respect to (1) the use of
Expedition Recordings that do not depict images of efforts to
recover Bass Ale bottles and (2) images that include any DCI
trademark or logo and (B) exercised in a manner that is consistent
with the spirit and intent of this
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Agreement, and RMST further agrees that if it intends to permit
individuals to participate in a press conference pursuant to the
Bass Ale Agreement, such invitation is subject to the prior approval
of DCI, reasonably exercised;
c. each of Ellipse and RMST agree to coordinate in good faith with
DCI's marketing and communications groups to assure that DCI
controls the nature and scope of its brand exposure in connection
with the Expedition (including, if DCI so elects, the placement of
DCI signage on (i) the Aqua+ Vessel and equipment and (ii) the
IFREMER vessel and equipment, which RMST shall use its best efforts
to achieve, with DCI to retain sole control over all uses of its
trademarks, logos and variations incorporating the same at all
times) and DCI in connection therewith agrees that RMST and Ellipse
shall have the right to place signage of their own on such Vessels
and equipment, and DCI agrees that, to the extent DCI may in fact
have the ability to grant such right thereto, Ellipse and RMST shall
have the right to place their signage upon any vessel upon which DCI
is placing its signage (and further provided that DCI shall not take
or require any action to be taken which would cause or require the
names "Jules" and "Jim" not to remain visible on the Ocean Voyager's
submersibles;
d. (i) DCI and RMST reserve the right to approve or disapprove all
individuals brought to the site of the Expedition by Ellipse or
Aqua+, other than those individuals whose names appear in the
Budget, or who are employees of Aqua+ and who "man" the Ocean
Voyager pursuant to the Ocean Voyager Charter Agreement. Ellipse and
RMST shall each secure all requisite permissions and written
releases (by execution of an Appearance Release in substantially the
form attached hereto as Schedule 4(d)(i)) of all "key individuals"
brought to the Expedition thereby; including, without limitation,
RMST shall secure such releases and the active cooperation of George
Tulloch, Charles Haas, John Eaton, Alexander Lindsay and Buzz Aldrin
(which RMST hereby represents are the "key individuals" involved
with and which shall be on the site of the Expedition thereby), with
respect to the recording of interviews and procurement of other
materials for possible use in and in connection with the Programs
and any ancillary productions relating to the Project undertaken by
or with the authorization of DCI (e.g., "making of" programs,
on-line events, live television broadcasts, etc.), (ii) Ellipse and
RMST shall secure a written release, in substantially the form
attached hereto as Schedule 4(d)(ii), of all individuals brought to
the site of the Expedition thereby (including, without limitation,
individuals brought pursuant to the Bass Ale Agreement), whether on
the Nadir, the Ocean Voyager (and the Ocean Voyager Charter
Agreement shall so provide that Aqua+ shall ensure that each such
individual shall in fact execute such form of written release, prior
to boarding the Ocean Voyager) or otherwise, including, without
limitation, the individuals who "man" such vessels, pursuant to
which such individuals shall covenant that all stills and footage
taken thereby at the site of the Expedition is for their personal
use, and may not be sold, given or otherwise released to any entity
or individual for commercial use, by the media or otherwise;
provided, however, that Ellipse agrees to use best efforts to secure
releases, in the form attached hereto as Schedule 4(d)(ii), of the
twenty-six individuals (i.e., the nineteen sailors and nine
submersible operators) that are currently aboard the Ocean Voyager,
and (iii) Ellipse and RMST shall in addition use their best efforts
to secure written Appearance Releases, in the form of Schedule
4(d)(i) attached hereto, of Burt Reynolds, the survivors
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of the Titanic shipwreck, and all other individuals who are on board
the Vessels or otherwise brought to the site of the Expedition
thereby, with respect to the recording of interviews and procurement
of other materials for possible use in and in connection with the
Programs and any ancillary productions relating to the Project
undertaken by or with the authorization of DCI (e.g., "making of"
programs, on-line events, live television broadcasts, etc.);
e. RMST shall not amend or otherwise modify the Bass Ale Agreement
without the prior written consent of DCI; and
f to cooperate in good faith with DCI to obtain the original plans for
the Titanic from Harland & Wolff.
5. Media Coverage. RMST and Ellipse hereby acknowledge that is has always
been, and remains, a matter of critical importance to DCI that suitable
approaches are found to anticipate and address the controversies
associated with a research and recovery operation involving the Titanic
shipwreck, both in the planning and execution of the Project and in all
press releases and other public announcements. RMST and Ellipse also
acknowledge the importance to DCI of developing an effective means of
managing third party requests for media coverage of the Expedition so as
to avoid any dilution or impairment of the exclusive rights that DCI is
being granted with respect to the Project. Accordingly, RMST and Ellipse
hereby grant to DCI the unconditional right to review and approve:
a. the content of all press releases and other public announcements
concerning the Project issued by or with the authorization of RMST
or Ellipse excluding customary on-air promotional spots,
announcements by French broadcasters as part of a program line-up
and press releases (after the initial press release concerning this
Agreement and the relationship of the parties involved in the
Project) advertising the forthcoming exhibition of the Ellipse
Version of the Programs on television by licensees of Ellipse in the
Ellipse Territory (defined herein);
b. the terms and conditions of all agreements, oral and written, with
respect to proposed corporate sponsorships relating to the Project;
and
c. the granting of access and permissions to any person or entity
(other than those engaged by any of the parties hereto in connection
with the Project; provided, that each such individual shall have
been apprised of the restrictions on use set forth herein, and if
required hereby, shall also have executed a release in the form of
Schedule 4(d)(ii) hereof) seeking to record or procure still
photographs or film, video and/or other motion picture images of the
Expedition for use in print, television, radio, on-line and any
other media, irrespective of whether or not the proposed use is for
news, documentary or any other commercial or non-commercial purpose
(the "Media Requests"). DCI's foregoing approval rights shall
include the right to specify the terms and conditions of and to
review and approve the written agreement on which such Media
Requests are to be accommodated, if at all, and DCI's approval may,
at its election, be conditioned on DCI being accorded an appropriate
credit in conjunction with the permitted coverage. In addition, and
without limitation, to the extent that members of cruise ships or
other third party vessels are granted permission to film any part of
the Expedition for personal use, and to the extent that private
individuals are permitted to board
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any of the Vessels and to film any part of the Expedition for
personal use, such individuals shall be required to execute the
release, in the form of Schedule 4(d)(ii), pursuant to which such
individuals shall covenant that all stills and footage taken thereby
is for their personal use, and may not be sold, given or otherwise
released to any entity or individual for commercial use, by the
media or otherwise. RMST and Ellipse shall refer all Media Requests
to DCI, and the parties hereto shall work with one another in good
faith to develop and implement a process by which such Media
Requests can be managed in a manner that permits bona fide news
coverage of the Expedition while respecting and preserving DCI's
exclusivity and other rights as set forth herein. Without limiting
the generality of the foregoing, RMST and Ellipse hereby grant to
DCI the absolute and unconditional right to approve all television
coverage of the Project, whether or not on a live basis.
Notwithstanding the foregoing, the parties hereto agree that media
coverage of the Aqua+ Vessel and equipment, separate and apart from
the Expedition, and media coverage of each of the parties hereto,
not related to the Expedition, is not subject to such approval
process. In addition, subject to the limitation and requirements of
Section 8 hereof with respect to the utilization of the Wreck Site
Recordings and to the provisions of Section 8(e) hereof, the use of
still photographs exhibited in the print format, to the extent
exhibited in the Ellipse Territory in order to promote Ellipse's
exhibition of the Programs is hereby preapproved; provided, that
such exhibition of stills in print format does not appear in a
version of National Geographic magazine.
6. Definitions. As used herein, the following terms shall have the respective
meanings set forth below:
a. "DCI Programming Services" shall mean all programming services in
which DCI has an ownership interest or controls or shares control of
programming decisions, or to which DCI supplies programming in a
block for exhibition under the names and marks "TDC", "Discovery
Channel", "TLC", "The Learning Channel", "Discovery Animal Planet"
and any other DCI trademarks and any other logos or variations
incorporating the same.
b. "Electronic Media Rights" shall mean the rights to reproduce, copy,
modify, adapt, create derivatives, use or otherwise exploit any
portion of any work in combination with or as a composite of other
content of any nature, including, without limitation, text, data,
photographs, illustrations, and/or video or audio segments, and to
record or otherwise store the resulting combination or composite
product on any physical electronic medium from which the contents
can be accessed and retrieved by means of a central processing unit,
whether now known or hereafter to become known, including, without
limitation, magnetic tape, diskette, interactive CD, CD-ROM, laser
disk, optical disk, integrated circuit card and chip and to
distribute the resulting combination or composite product on such
medium by any means.
c. "Expedition Recordings" shall mean the Wreck Site Recordings (as
defined below) and all other audio recordings, still photographs and
film, video and other motion picture images (in all formats and
however recorded) made in the North Atlantic during the Expedition
by RMST, IFREMER and/or any third party authorized by either of the
foregoing entities (other than Stardust or any other person or
entity engaged by DCI or Stardust to work on the Programs including,
without limitation, to the extent made by
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Ellipse or Aqua+ pursuant to the Production Services Agreement or
any other agreement, exclusive of this Agreement, pursuant to which
DCI or Producer shall engage such entity to work on the Programs,
all of such works made pursuant to any such agreement with DCI each
of the parties hereto confirms shall constitute a work-for-hire, all
right, title and interest therein which shall be and remain with
DCI).
d. "Footage Rights" shall mean the right to license the use of limited
portions of a production for inclusion in an unrelated production,
which unrelated production may be exploited in any media.
e. "French-Speaking Territories" shall mean the French-speaking
territories throughout the world outside of France listed on
Schedule 6(e) attached hereto.
f. "Home Video Rights" shall mean the rights to distribute, license,
sell, rent and/or otherwise exploit (collectively "distribute" or
"distribution" as applicable) an audio-visual work on video
cassettes, videodiscs or in any other analogous format now known or
hereafter invented, for private viewing of the visual images and
synchronized audio-track by means of a playback device which causes
a visual image of the work to appear on the screen of a television
receiver or comparable device, where both the playback device and
the television receiver are located in consumer homes.
Notwithstanding the foregoing, Home Video Rights shall include any
Electronic Media Rights or any other distribution involving or
utilizing computer or other interactive technology (including,
without limitation, video discs).
g. "Non-Standard Television Rights" shall mean any and all forms of
television distribution, exhibition and display, whether now
existing or hereafter developed, other than by the exercise of
Standard Television Rights, including, without limitation,
exploitation on a subscription, license, rental, sale or other basis
(but not including theatrical exhibition to paying audiences, Home
Video Rights and Non-Theatrical Rights). Non-Standard Television
Rights shall include, but not be limited to, exhibition by cable,
pay cable, "over-the air pay" or subscription television, master
antenna, low power television, closed circuit, hotel (for private
in-room viewing only), multipoint distribution service and direct
broadcast satellite service, video-on-demand and near
video-on-demand.
h. "Non-Theatrical Rights" shall mean the distribution of a work in all
formats and by all means of technology now in existence or hereafter
discovered (other than Television) to schools, libraries, churches,
museums, hospital, prisons, summer camps, airline, cruise and other
markets customarily referred to as "in-flight" or "transportation",
or private businesses; provided, that Non-Theatrical Rights shall
not include (i) any distribution to any person, entity or venue
(including, without limitation, those described above, cinemas and
concert halls) for any exploitation or exhibition to audiences where
a charge for admission is made and (ii) any Electronic Media Rights
or any other distribution involving or utilizing computer or other
interactive technology (including, without limitation, video discs).
i. "On-Line Rights" shall mean the right to reproduce, copy, modify,
adapt, create derivatives, use or otherwise exploit any portion of
any work in combination with or as a composite of other content of
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any nature, including, without limitation, text, data, photographs,
illustrations for video or audio segments, and to store the
resulting combination or composite product in one or more central
processing units for the purpose of permitting third parties to
access and retrieve portions of such resulting product by means of
any public or proprietary on-line computerized interactive
information retrieval network or system.
j. "Standard Television Rights" shall mean conventional, over-the-air
television distribution of programming by a UHF or VHF television
broadcast station, the video and audio portions of which are
intelligibly receivable without charge by means of standard roof top
or television set built-in antennas; provided, that broadcasts like
those in England by the BBC shall be considered to be the exercise
of Standard Television Rights.
k. "Television Rights" shall mean Standard Television Rights and
Nonstandard Television Rights.
1. "Wreck Site Recordings" shall mean the Illumination Footage and all
other audio recordings, still photographs and film, video and other
motion picture images (in all formats and however recorded) made
undersea, on the ocean floor, at or in the vicinity of the Titanic
wreck site during the Expedition.
7. Ownership of Programs; Use of Programs.
a. Ownership of Programs. Except for the rights that shall be retained
by RMST and Ellipse or licensed by them to DCI as set forth in this
Agreement, the parties hereto agree that DCI shall be the sole owner
of the copyrights and all other rights in the Programs and all
elements thereof and relating thereto (the "Program Elements")
including, without limitation, concepts, outlines, development
materials, treatments, scripts, titles, stills, original music,
outtakes and performances (other than the Expedition Recordings and
Other Materials), all of which shall be created for DCI as a
"work-made-for-hire" (as such term is defined in the U.S. Copyright
Act). Notwithstanding the foregoing, the Ellipse Elements (defined
herein) shall not constitute Program Elements owned by DCI.
b. Use of Programs. Except for the licenses and other rights granted by
DCI to RMST and Ellipse as set forth in this Agreement or as
otherwise specified in this Agreement, DCI will have the sole and
exclusive right to exhibit, license, promote, distribute, sell and
otherwise use the Programs and the Program Elements and to exploit
all rights therein in any and all manner in all markets and in all
media now in existence or to be developed hereafter throughout the
world in perpetuity without any additional payment whatsoever to any
individual or entity.
i. Footage Rights. In connection with any footage with respect to
the Programs that DCI, in its sole discretion, elects to make
available to third parties for licensing as stock footage, DCI
hereby agrees to afford Ellipse a *
* discount from DCI's standard rate card for any such footage
licensed to Ellipse.
8. Exploitation of Expedition Recordings. DCI hereby confirms and agrees that
RMST owns all rights in and to the Expedition Recordings made thereby, and
that RMST shall retain the ownership of the copyrights, therein,
notwithstanding the license of DCI of all or any portion
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* denotes redacted material
<PAGE> 13
thereof pursuant to this Agreement. RMST hereby grants to DCI the
unlimited right and perpetual, fully paid license, to incorporate the
Expedition Recordings in the Programs and otherwise use and exploit the
Expedition Recordings which are incorporated in the Programs in and in
connection with the marketing, promotion, distribution, sale, licensing
and other exploitation of the Programs in any and all media, whether now
known or unknown, throughout the world in perpetuity; provided, that
Illumination Footage so incorporated into a Program is limited in length
to continuous sequences of not more than 180 seconds each and a maximum
aggregate running time of all sequences of Illumination Footage (x)
incorporated into any one Program of not greater than 8 minutes per 60
minutes of running time and (y) incorporated into both Programs of not
greater than 12 minutes of running time; and further provided, that such
right to use and exploit the Wreck Site Recordings shall be limited to the
inclusion thereof in the Programs; provided, however, that Wreck Site
Recordings incorporated into the Programs may be used in Other Productions
(as defined in Section 8(b)(i) below) and in the exploitation of
Electronic Media Rights pursuant to Section 8(c) below. Additionally, RMST
agrees to authorize DCI to use certain Wreck Site Recordings for the
marketing, distribution and promotion of the Programs, Other Productions,
and Derivative Works of the Programs; provided, that Wreck Site Recordings
which are utilized by DCI in a print format will be jointly selected and
approved by DCI and RMST, with RMST reserving the right to approve, in its
reasonable business judgement, the type and amount of Wreck Site
Recordings that DCI will be permitted to so use in the print format for
promotional purposes, in light of the potential impact of DCI's proposed
use on the impairment of the commercial value of such Wreck Site
Recordings to RMST, and further provided, that neither DCI nor Ellipse may
use or permit any Illumination Footage to be displayed in a magazine
without the prior consent of RMST, and RMST may withhold such consent for
any reason or no reason if it believes that such use would have a material
adverse effect on the commercial value of the Illumination Footage.
Notwithstanding the foregoing, DCI shall have the right to utilize
segments of the Programs, Other Productions and Derivative Works that
incorporate Wreck Site Recordings in connection with the marketing,
distribution and promotion thereof through television commercials. The
parties hereto further agree that notwithstanding such ownership thereby
or license thereto, as applicable, no other use or exploitation of the
Expedition Recordings will be undertaken or authorized by RMST, Ellipse or
DCI, except in accordance with the following:
a. Closed-Circuit TV. RMST shall have the non-exclusive right to
exploit the Expedition Recordings by means of closed-circuit
television on board the cruise ships being chartered by RMST for the
period the cruise ships are on location at the Titanic wreck site
for the time period during which the Expedition is taking place.
b. Footage Rights.
i. RMST hereby grants to DCI the non-exclusive right to exploit
Footage Rights with respect to the Expedition Recordings in
connection with productions other than the Programs (the
"Other Productions"); provided, that (A) any and each such
Other Production is intended for initial exhibition in all or
some part of the world via a DCI Programming Service,
regardless of whether or not DCI is the copyright proprietor
of such Other Production (i.e., DCI's Footage Rights will
apply to DCI-owned productions as well as productions and
presales in which exhibition rights for DCI Programming
Services are merely licensed), (B) DCI cannot, prior to
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<PAGE> 14
December 31, 1997, license or exhibit any such Other
Productions within the territories in respect of which Ellipse
shall have been granted a license to exhibit the Programs in
accordance with Section 9 of this Agreement and the License
Agreement, and (C) such footage so incorporated in such Other
Production is limited in length to continuous sequences of not
more than 120 seconds each and a maximum aggregate running
time of all sequences of Expedition Recordings incorporated in
such Other Production of not greater than 10 minutes per 60
minutes of running time.
ii. RMST shall reserve the non-exclusive right to exploit Footage
Rights with respect to Expedition Recordings not incorporated
in the completed Programs (i.e., RMST's reservation of
non-exclusive Footage Rights applies to out-takes only);
provided, that (A) such Footage Rights shall not be exploited
sooner than December 31, 1997 and (B) the maximum running time
of any continuous sequence of Expedition Recordings
incorporated into a single production shall be 120 seconds and
the maximum aggregate running time of all sequences of
Expedition Recordings incorporated into a single production
shall not exceed 10 minutes per 60 minutes of running time for
the applicable production.
iii. RMST shall reserve the non-exclusive right to incorporate
Illumination Footage into a large-screen theatrical production
being developed by RMST (the "Theatrical Production") without
such use being subject to the holdback and per sequence and
aggregate running time limits described in Subsection ii
above; provided, that (A) prior to June 30, 1998, there shall
be no commercial exploitation of such production except for
theatrical exhibition at RMST's proposed and future
exhibitions which are intended to display Titanic artifacts
recovered by RMST in a museum-quality environment and/or as a
free-standing exhibition (the "RMST Titanic Exhibitions"), (B)
the premiere exhibition of the Theatrical Exhibition in any
area of the DCI Territory where a RMST Titanic Exhibition is
appearing shall not occur until 30 days after the premiere of
the Initial Program on the DCI Programming Service exhibited
in such area of the DCI Territory, and (C) on and after June
30, 1998, RMST may commercially exploit the Theatrical
Production only at a theatrical venue (whether or not located
at an RMST Titanic Exhibition).
iv. RMST shall reserve the non-exclusive right to exploit Wreck
Site Recordings (including those portions incorporated into
the Programs) to create an audio-visual work to be distributed
to consumers on video cassettes, for private viewing of the
visual images and synchronized audio-track by means of a
playback device which causes a visual image of the work to
appear on the screen of a television receiver or comparable
device, where both the playback device and the television
receiver are located in consumer homes (the "RMST Illumination
Footage Video"); provided, that (A) the RMST Illumination
Footage Video shall not be sold, rented or otherwise
distributed prior to the earlier of (x) 30 days following the
premiere of the Initial Program on Discovery Channel in the
U.S., or (y) June 1, 1997 and (B) RMST shall not commercially
distribute, sell or otherwise exploit the RMST Illumination
Footage Video prior to June 1, 1998 except via (i) on-site
retail sales to visitors at the RMST Titanic
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<PAGE> 15
Exhibitions, and (ii) direct marketing to the names on RMST's
proprietary mailing list currently consisting of approximately
40,000 such names.
c. Electronic Media Rights. RMST hereby grants to DCI, and RMST shall
retain, the non-exclusive right to exploit Electronic Media Rights
with respect to the Expedition Recordings; provided, that RMST shall
have the right to approve any such exploitation of Illumination
Footage by DCI (which approval may be conditioned upon the
negotiation of DCI's payment of a fee for the right to use
Illumination Footage in connection with the exploitation of
Electronic Media Rights, and which approval may be withheld for no
reason or any reason and provided, further, that neither DCI nor
RMST shall commence the commercial exploitation of Electronic Media
Rights with respect to the Expedition prior to October 1, 1997, nor
shall DCI exploit its Electronic Media Rights with respect to any
CD-ROM product created incorporating Expedition Recordings and/or
Other Materials prior to September 1, 1999 unless Ellipse has waived
its right to exclusive use thereof during such period, and provided
further, that Expedition Recordings shall in no event be utilized by
DCI in connection with the exploitation of Electronic Medial Rights
at exhibitions at which patrons pay a fee or other consideration for
admission
d. Print Publishing. RMST shall retain the exclusive print publishing
rights with respect to Expedition Recordings and, in addition,
neither DCI nor Ellipse shall authorize the publication of any book
concerning the Expedition; provided, that:
i. subject to the limitations and requirements of the first
paragraph of this Section 8 hereof preceding Subsection 8(a)
hereof, with respect to the utilization of Wreck Site
Recordings, RMST grants to DCI and Ellipse the non-exclusive
right to exercise print publishing rights with respect to the
Expedition Recordings for purposes of advertising and
promoting the Programs in their respective territories
(Ellipse's territories as set forth in Section 9 below and
DCI's territories outside of the scope of its license to
Ellipse);
ii. in no event shall RMST use or authorize the use of any still
or motion picture images or artwork owned or controlled by DCI
without DCI's express prior written approval;
iii. RMST shall not authorize any publication of Expedition
Recordings in any magazine or other periodical in a territory
of DCI prior to six months following the premiere of the
Initial Program on Discovery Channel (or, if applicable, the
DCI Programming Service so exhibited in such territory) in
such territory of DCI; provided, that RMST shall have the
right to authorize the publication of Illumination Footage in
a magazine or other periodical (except for National
Geographic) 30 days after the premiere of the Initial Program
on the Discovery Channel. In addition, except as set forth in
the previous sentence, RMST's rights to authorize such use of
Expedition Recordings is in all events subject to the approval
rights of DCI set forth in Section 5 of this Agreement;
provided, that the terms "magazine or other periodical"
referred in this sentence shall not be deemed to include
pamphlets, catalogues or other small printed handouts
distributed in
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<PAGE> 16
connection with the promotion of the RMST or the RMST Titanic
Exhibitions.
e. Limitations on use of Still Images. In addition to the foregoing,
DCI agrees that, with respect to still images of Titanic artifacts
recovered during the Expedition, and with respect to still images of
the raising of the hull of the Titanic, which still images are owned
by DCI (collectively, "Restricted DCI Still Images"), DCI shall not
use any such Restricted DCI Still Images in connection with the
exercise of merchandising rights; and Ellipse agrees that, with
respect to still images of Titanic artifacts recovered during the
Expedition, and with respect to still images of the raising of the
hull of the Titanic, which still images are owned by Ellipse
(collectively, "Restricted Ellipse Still Images"), Ellipse shall not
use any such Restricted Ellipse Still Images in connection with the
exercise of its merchandising rights. Without limiting the
foregoing, the parties hereby agree that the inclusion, within a
home video distributed by DCI or Ellipse to consumers, in connection
with the exercise of Home Video Rights, of a poster of a Restricted
DCI Still Image or of a Restricted Ellipse Still Image, shall
constitute merchandising of such Restricted Still Image and shall be
prohibited by this Agreement.
9. Television Exhibition.
a. DCI and Ellipse hereby agree that Ellipse shall have the following
Television Rights on the following basis, with respect to the
Programs:
Redacted Material.
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<PAGE> 17
Redacted material
b. Redacted material
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<PAGE> 18
Redacted material
10. Home Video Exploitation. DCI shall pay to RMST an amount equal to ten
percent (10%) of Net Revenues (as defined on Schedule 10 hereto), derived
from DCI's exploitation of the Home Video Rights with respect to the
Programs and DCI shall retain for its sole account all of the remainder of
such revenues derived from the exploitation of the Home Video Rights with
respect to the Programs; provided, that Ellipse has the right to exploit
Home Video Rights in the Programs in France as well as in all of Ellipse's
Territory which constitutes the French-Speaking Territories, for the 10
year period running concurrently with the term of Ellipse's license to
exhibit the Special via Television in France, and Ellipse shall pay to
RMST an amount equal to ten percent (10%) of Ellipse Net Revenues (as
defined on Schedule 10(b) hereto) derived from Ellipse's exploitation of
such Home Video Rights, and shall retain for its accounts all such
remaining revenues derived by Ellipse therefrom; provided, that Ellipse
covenants and agrees that the packaging for each such home video of the
Programs sold or otherwise distributed in France pursuant to the exercise
of such rights of Ellipse shall contain the Discovery Channel logo on the
spine thereof and on the back thereof adjacent to a copyright notice in
DCI's name, the prominence, form and placement of which logos and
copyright notice shall be subject to DCI's express prior written approval.
DCI shall license to RMST the non-exclusive right to combine the Programs
with additional Illumination Footage (the "RMST Video") and exploit the
Home Video Rights with respect to the resulting production, on the
following conditions:
a. RMST shall not commercially distribute, sell or otherwise exploit
the RMST Video except via (i) on-site retail sales to visitors at
RMST Titanic Exhibitions, and (ii) direct marketing to the names on
RMST's proprietary mailing list currently consisting of
approximately 40,000 such names;
b. RMST shall not release or distribute an RMST Video combining
additional Illumination Footage with the Initial Program prior to 30
days after DCI shall release its home video of the Initial Program,
or if sooner, prior to 30 days after DCI shall release its home
video of the Initial Program. RMST shall not release or distribute
an RMST Video combining additional Illumination Footage with the
Special prior to 30 days after DCI shall release its home video of
the Special, or if sooner, prior to 30 days after DCI shall release
its home video of the Special. To the extent available thereto, DCI
shall provide RMST with reasonable notice of its schedules for the
release of the home video for each of the Initial Program and the
Special, and shall provide to RMST, at no charge to RMST, a master
copy of each, within 15 business days of receipt by DCI of the same.
c. RMST shall consult with DCI in good faith and secure DCI's prior
approval with respect to (i) all editorial content of the RMST
Video, including any proposed modifications to the editorial content
of the Programs and all Illumination Footage and/or other content
RMST proposes to include on the RMST Video in addition to the
Programs, (ii) the use of any DCI name, logo or other proprietary
mark on or in connection with the RMST Video and (iii) all packaging
and marketing materials created for use in connection with the
distribution of the RMST Video.
11. On-Line Exploitation.
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<PAGE> 19
a. Subject only to RMST's reservation of rights as described below,
RMST grants to DCI all On-Line Rights with respect to the Project in
all languages throughout the world, on an exclusive basis from the
date of this Agreement through September 15, 1997 (the "Exclusive
Period") and on a non-exclusive basis in perpetuity thereafter;
provided, that (i) the granting to DCI of such On-Line Rights with
respect to the Project shall not limit RMST's ability to maintain
the RMST Website (as defined below), subject to the restrictions set
forth in Subsection (b)(iii) below with respect to the content to be
distributed thereon, (ii) DCI shall not sublicense to third parties
for use on their websites content on the DCI Website (as defined
below) which is licensed to DCI by RMST, and (iii) all Expedition
Recordings used by DCI as content on the DCI Website will be jointly
selected and approved by RMST and DCI, based on reasonable
standards. In addition, the parties hereto hereby acknowledge that
RMST has granted certain on-line rights pursuant to the Bass Ale
Agreement in connection with the Bass Ale consumer promotion
described therein.
b. In full consideration of the license of On-Line Rights granted to
DCI pursuant to Subsection a above, DCI agrees to:
i. pay to RMST a flat fee of U.S. $40,000 (which fee DCI shall
set off against amounts owed by RMST as its share of the
Budget);
ii. include, for such time as DCI's website Discovery Channel
Online (the "DCI Website") shall contain content covering the
Project, at the main web page of the DCI Website which covers
the Expedition, a hotlink to RMST's website "Titanic Online"
(the "RMST Website");
iii. authorize RMST to use certain Expedition Recordings solely for
purposes of enabling limited daily updates during the
Expedition on the RMST Website; provided, that all Expedition
Recordings so used by RMST will be jointly selected and
approved by RMST and DCI, with DCI reserving the right to
approve, in its reasonable business judgment, the type and
amount of Expedition Recordings that RMST will be permitted to
use for such purposes, in light of the potential impact of
RMST's proposed use on the DCI Website's ability to generate
revenue by selling exclusive packages to its sponsors and
advertisers;
iv. following the Exclusive Period, accord RMST non-exclusive
access to all DCI owned and controlled artifacts relating to
the Project created for use on the DCI Website; provided, that
such content will be used by RMST solely for incorporation
into the RMST Website relating to the Titanic shipwreck; and
v. other than to the extent incorporated into the Programs, Other
Materials utilized by DCI in the exploitation of its OnLine
Rights will by jointly selected and approved by DCI and RMST,
with RMST reserving the right to approve, in its reasonable
business judgment, the type and amount of Other Materials that
DCI will be permitted to use for such purposes, in light of
the potential impact of DCI's proposed use on the impairment
or dilution of the commercial value of such Other Materials to
RMST.
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<PAGE> 20
12. Promotional Reel. DCI shall accord RMST access to all reasonably available
Program Elements (including out-takes, as well as the editorial content of
the completed Programs) for purposes of enabling RMST to create a
promotional reel for non-commercial internal use, and DCI agrees that
portions of such promotional reel, in reasonably limited segments
(approximately 5 minutes), may also be exhibited at the RMST Titanic
Exhibitions, in the areas where viewers are waiting in line for entrance
to such Exhibitions; provided, that RMST shall be solely responsible for
all costs of obtaining such elements (including all required third party
clearances) and DCI shall have the right to approve the content of any
such reel.
13. Delivery Elements. The Initial Program and Special shall be budgeted for
delivery of 52 minute and 104 minute seamless international master tapes,
respectively, and other customary physical elements and documentation as
customarily required by DCI for its high-end commissioned prime time
specials. Ellipse shall be solely responsible for all additional costs of
creating versions of the Programs for the Ellipse Territory. Details
concerning deliverables are set forth in Schedule 13 attached hereto.
14. Production Credits. The following production credits will be accorded on
the Programs:
a. On DCI Versions: A credit in substantially the form "Produced for
Discovery Channel by Stardust Visuals, Inc. and Ellipse Programme,
with the cooperation of RMS Titanic, Inc."; and
b. On Versions Licensed by Ellipse: A credit in substantially the form
"A Stardust Visual and Ellipse Programme Production for Discovery
Channel" "plus, at Ellipse's election, an "In Association With" or
"Co-Produced with" credit for any major co-financiers to whom
Ellipse sublicenses Television Rights in the territories of France,
Germany and Italy, produced with the cooperation of RMS Titanic,
Inc. In the event that the use of the above credit conflicts with
applicable government regulations, a credit in substantially the
form "A Discovery Channel/Stardust Visual/Ellipse Programme
Production" may be used in place of the portion of the credit that
states "A Stardust Visual and Ellipse Programme Production for
Discovery Channel."
15. First Negotiation Right. The parties agree that DCI shall be accorded a
customary right of first negotiation to participate on the next Titanic
expedition following the Expedition (the "Next Expedition") which right of
first negotiation shall be for a period of not less than 45 days,
commencing not earlier than February 1 of the calendar year in which the
Next Expedition shall occur (the "DCI Negotiating Period), and during
which period RMST shall negotiate exclusively (other than with Ellipse
with respect to the rights set forth below) and in good faith with DCI. If
DCI and RMST shall agree on terms in respect of such Next Expedition, and
if RMST shall thereafter fail to enter into an agreement with DCI with
respect thereto, but shall instead enter into an agreement with a
different media company on the same or less favorable terms (for RMST) as
those agreed to with DCI, RMST agrees that it shall not have the right to
commence the Next Expedition earlier than one year following the
termination of the DCI Negotiating Period. In addition, Ellipse shall be
accorded the same right of first negotiation, during the same time period
as the DCI Negotiating Period, with respect to its right to participate,
with respect to the Ellipse Territory, on the Next Expedition.
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<PAGE> 21
16. Agents' Fees. Except for the fee of Cokin Communications, Inc. set forth
as a line item in the Budget, RMST and Ellipse shall be solely responsible
for and pay all fees, commissions and expenses of their respective agents
and representatives, none of which shall be included in the Budget, it
being understood that DCI shall have no obligation or liability whatsoever
with respect to the same.
17. Representations and Warranties.
a. RMST hereby represents and warrants as follows:
i. RMST is duly organized and validly existing under the laws of
the State of Florida. RMST has the full legal right to enter
into this Agreement, to grant all rights granted herein and to
fully perform its duties and obligations hereunder. The person
executing the Agreement on behalf of RMST is fully empowered
to so execute the Agreement.
ii. Except for the Bass Ale Agreement, the Agreement, dated
January 26, 1996, between Ellipse and RMST regarding the
production of a CD ROM, and the IFREMER Charter Agreement,
true and complete copies of each, including any and all
amendments thereto, which have been delivered by RMST to DCI,
RMST has not entered and shall not enter into any arrangement
or agreement which will or could conflict with the rights
granted to the other parties hereto.
iii. RMST holds the exclusive salvage rights with respect to the
Titanic shipwreck.
iv. RMST will use all reasonable efforts, including seeking
injunctive relief where appropriate, to prevent any third
party from procuring footage or artifacts from the Titanic
wreck site during 1996.
v. Other than as set forth on Schedule 17(a) attached hereto, no
claims have been made or are pending against RMST with respect
to its exclusive salvage rights with respect to the Titanic.
b. DCI and Ellipse each hereby represents and warrants as follows:
i. It is duly organized and validly existing under the laws of
its jurisdiction of organization. It has the full legal right
to enter into this Agreement, to grant all rights granted
herein and to fully perform its duties and obligations
hereunder. The person executing the Agreement on behalf of it
is fully empowered to so execute the Agreement.
ii. It has not entered and shall not enter into any arrangement or
agreement which will or could conflict with the rights granted
to the other parties hereto.
18. Confidentiality. Except as may be required in connection with filings with
governmental agencies or courts or except as may be required under
applicable law, each party hereto shall keep strictly confidential and
shall not disclose to any other person or entity other than to its
officers and employees on a must-know basis, or to its respective lawyers
or accountants, the material terms and provisions of this Agreement. To
the extent that information with respect to this Agreement is revealed
pursuant to this Section, each party hereto shall
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<PAGE> 22
use its best efforts to ensure that each person or entity receiving such
information shall maintain it in confidence. In addition, RMST agrees that
if it files this Agreement with the United States Securities and Exchange
Commission (the "SEC") pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, it shall use best efforts to seek
confidential treatment of this Agreement with the SEC.
19. Indemnity. Each party (the "Indemnifying Party") shall at all times
indemnify and hold harmless the other parties, their respective
affiliates, licensees, assignees and affiliated companies, and the
officers, directors, shareholders, employees and agents of all such
entities (the "Indemnified Parties") against and from any and all claims,
damages, liabilities, costs and expenses (including, reasonable counsel
fees and disbursements) arising out of any breach or alleged breach by the
Indemnifying Party of any representation, warranty or other provisions
hereof. In the event of any claim or service of process upon the
Indemnified Parties involving the indemnification hereinbefore set forth,
the Indemnified Parties shall promptly notify the Indemnifying Party of
the claim. The Indemnifying Party shall promptly adjust, settle, defend or
otherwise dispose of such claim at its sole cost. In addition, if they so
elect, the Indemnified Parties shall have the right at their sole cost to
engage their own counsel in connection with such claim. In the event that
the Indemnified Parties determine that the Indemnifying Party is not
diligently and continuously defending any such claim, the Indemnified
Parties shall have the right, on their own behalf and as
attorney-in-fact for the Indemnifying Party, to adjust, settle, defend
or otherwise dispose of such claim. Any costs incurred by the Indemnified
Parties in connection therewith shall be promptly reimbursed by the
Indemnifying Party, and if the Indemnifying Party fails to so reimburse
the Indemnified Parties, the Indemnified Parties shall be entitled to
deduct such amounts from any other sums payable to the Indemnifying Party
under this Agreement.
20. Notices. All notices, requests, consents, demands and other communications
hereunder shall be in writing delivered by any of the following: personal
delivery; first class certified or registered mail, return receipt
requested; U.S. Express mail, or an express overnight service (such as
Federal Express), addressed to the respective parties to the Agreement at
the addresses set forth in the Agreement or to such other person or
address as a party hereto shall designate to the other parties hereto from
time to time in writing forwarded in like manner. Any notice, request,
consent, demand or other communication given in accordance with the
provisions of this Section shall be deemed to have been given and
effective (a) if by personal delivery or overnight mail, when actually
received, and (b) if by first class or certified mail, four business days
after so mailed.
21. Relationship of Parties. Nothing contained in this Agreement shall create
any partnership or joint venture by and among the parties. None of the
parties hereto may pledge the credit of the other or make binding
commitments on the part of the other, except as otherwise specifically
agreed hereunder. This Agreement is not for the benefit of any third party
not a signatory hereto and shall not be deemed to give any right or remedy
to any such party whether referred to herein or not.
22. Default. Subject to the next sentence of this Section 22, if any party
hereto (the "Defaulting Party") defaults in the performance of any of its
material obligations hereunder and such default shall not be cured within
ten (10) days after written notice thereof to the Defaulting Party, or if
the Defaulting Party becomes insolvent, or if a petition under any
bankruptcy law shall be filed by or against the Defaulting Party which
petition, if filed against the Defaulting Party, shall not
-22-
<PAGE> 23
have been dismissed within thirty (30) days thereafter, or if the
Defaulting Party executes an assignment for the benefit of creditors, or
if a receiver is appointed for the assets of the Defaulting Party, or if
the Defaulting Party takes advantage of any insolvency or any other like
statute (any of the above acts are hereinafter called an "Event of
Default"), then the non-defaulting parties may, in addition to any and
all other rights which it may have against the Defaulting Party, terminate
this Agreement by giving written notice to the Defaulting Party at any
time after the occurrence of an Event of Default. Notwithstanding the
foregoing, if either Ellipse or RMST defaults in the performance of any of
its material obligations hereunder and such default is incapable of being
cured, DCI may, in addition to any and all other rights which it may have
against either Ellipse or RMST, as the case may be, terminate this
Agreement by giving written notice to either Ellipse or RMST, as the case
may be, at any time after the occurrence of such default. Furthermore,
notwithstanding any termination pursuant to this Section 22, the
indemnities, warranties and representations set forth herein shall remain
in full force and effect, and all rights granted to the non-defaulting
parties shall remain vested in such non-defaulting parties.
23. Miscellaneous.
a. This Agreement contains the entire understanding and supersedes all
prior understandings between the parties hereto relating to the
subject matter herein and this Agreement cannot be changed or
terminated except in a writing executed by the parties hereto. No
employee, agent or other representative of any party hereto is
authorized to make any representations, warranties or agreements
except as specifically included herein, and the other parties hereto
acknowledge that they have not entered into this Agreement in
reliance upon any such representation, warranty or agreement. This
Agreement may not be assigned by the parties hereto. Each party
will, upon the other's request, promptly furnish to the other copies
of such agreements or other documents as the other may reasonably
desire in connection with any provisions of this Agreement.
b. Except as may be required in connection with filings with
governmental agencies or courts or except as may be required under
applicable law, each party shall keep strictly confidential and
shall not disclose to any other person or entity other than to its
officers and employees on a must-know basis, or to its respective
lawyers and accountants, the material terms and provisions of this
Agreement. To the extent that information with respect to this
Agreement is revealed pursuant to this subsection, each party shall
use its best efforts to ensure that each person or entity receiving
such information shall maintain it in confidence.
c. Unless otherwise stated herein, each of the parties hereto hereby
agrees that to the extent such party has approval rights with
respect to any matter, as set forth herein, such party shall
exercise such rights in good faith, subject to such standards as are
set forth herein with respect to any particular matter and to
standards of reasonableness, such approval rights which shall be
exercised in a timely fashion, taking into account the exigencies of
the situation with respect thereto.
d. If any party hereto (the "Non-Performing Party") is prevented from
or materially hampered in performing its obligations hereunder by
reason of any present or future statute, law,
-23-
<PAGE> 24
ordinance, regulation, order, judgement or decree, whether
legislative, executive or judicial (whether or not constitutional),
act of God, earthquake, flood, fire, epidemic, accident, explosion,
casualty, lockout, boycott, strike, labor controversy, riot, civil
disturbance, war or armed conflict, act of public enemy, embargo, or
any similar event of force majeure (all of the foregoing being
deemed "force majeure"), such a failure to perform by reason of such
an event of force majeure shall not be deemed a breach of or default
under this Agreement and the parties shall be liable to each other
therefor. If there shall be any occurrence of any such event of
force majeure which continues in effect for a period of more than
four (4) consecutive or six (6) aggregate weeks, then the other
parties shall have the right by notice to the Non-Performing Party
to terminate this Agreement without further liability to the Non-
Performing Party, except for appropriate payment or adjustment in
regard to payments to be made hereunder.
e. This Agreement shall be construed and enforced in accordance with
the laws of the State of New York. The parties hereto hereby consent
to and submit to the jurisdiction of the federal and state courts
located in the State of New York, and any action or suit under this
Agreement may be brought in any federal or state court with
appropriate jurisdiction over the subject matter established or
sitting in the State of New York. The parties hereto shall not raise
in connection therewith, and hereby waives, any defenses based upon
venue, the inconvenience of the forum, the lack of personal
jurisdiction, the sufficiency of service of process (as long as
notice of such action or suit is furnished in accordance with
Section 19 hereof) or the like in any such action or suit brought in
the State of New York.
f. In the event that any term, condition, covenant, agreement,
requirement or provision herein contained shall be held by any court
to be unenforceable, illegal, void or contrary to public policy,
such term, condition, covenant, agreement, requirement or provision
shall be of no effect whatsoever upon the binding force or
effectiveness of any of the other terms hereof, it being the
intention and declaration of the parties hereto that had they or any
of them known of such unenforceability, illegality, invalidity or
contrariety to public policy, they would have entered into a
contract, each with the other, containing all of the other terms,
conditions, covenants, agreements, requirements and provisions
hereof.
g. No waiver by any of the parties hereto of any breach hereof shall be
deemed a waiver of any preceding or succeeding breach hereof.
Notwithstanding any other provision of this Agreement, except as set
forth in the following sentence, the sole remedy of Ellipse and RMST
for breach by DCI of any of its obligations under this Agreement
shall be an action at law for damages and each of Ellipse and RMST
acknowledge that such damages are fully adequate to compensate such
party in the case of any breach by DCI hereunder. In no event shall
either Ellipse or RMST be entitled to rescission, injunctive or
other equitable relief other than to enjoin DCI from using the
Expedition Recordings and the Other Materials in contravention of
the terms and provisions of this Agreement.
h. Ellipse and RMST hereby acknowledge that the names and the marks
"TDC". "Discovery Channel", "TLC", "The Learning Channel",
"Discovery Animal Planet" and any other DCI trademarks and any
-24-
<PAGE> 25
logos and variations incorporating the same are, as among the
parties hereto, the exclusive property of DCI and that neither
Ellipse nor RMST has or will acquire any proprietary rights thereto
by reason of this Agreement. Neither Ellipse nor RMST shall have any
rights to use such names, logos, variations or titles except at the
times and in the manner expressly approved by DCI.
i. The headings of this Agreement or any sections hereof are inserted
only for the purpose of convenient reference, and it is acknowledged
that they may not accurately or adequately describe the contents of
the sections which they head. Such headings shall not be deemed to
limit, cover, or in any way affect the scope, meaning or intent of
this Agreement or any part thereof, nor shall they otherwise be
given any legal effect in the construction of any provision hereof.
j. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one
and the same instrument.
-25-
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first set forth above.
DISCOVERY COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
ELLIPSE PROGRAMME
By:_______________________________
Name:
Title:
RMS TITANIC, INC.
By:______________________________
Name:
Title:
-26-
<PAGE> 27
Schedule 1(a)
Redacted material (pages 1 to 5)
<PAGE> 28
Schedule 1(a)(1)
[Letterhead of Aqua +]
RMS Titanic, Inc.
17 Battery Place,
Suite 203
New York, New York 1004
Re: Charter By RMS Titanic, Inc. from Aqua + of the vessel the Ocean
Voyager.
Gentlemen:
This letter will serve as confirmation of the basic terms which shall be
contained in a charter agreement (the "Charter Agreement") between Aqua + and
RMS Titanic, Inc. ("RMST"), pursuant to which RMST shall charter from Aqua +
(the "Charter") the vessel owned by Aqua + and known as the "Ocean Voyager" (the
"Vessel"). Aqua + acknowledges that the Vessel is being chartered by RMST in
connection with the Tri-Party Agreement, dated of even date herewith, among
RMST, Discovery Communications, Inc. ("DCI") and Ellipse Programme, in the
undertaking of the Titanic shipwreck scientific research expedition and recovery
operation by RMST that is scheduled to occur during the summer of 1996 (the
"Expedition") and the production and delivery by and for DCI of the documentary
television programs described below on the subject of the Titanic shipwreck and
the Expedition (The "Programs" and, together with the Expedition, are referred
to collectively as The "Project").
Aqua + and RMST hereby confirm and agree that the Charter Agreement shall
contain, without limitation, the following terms:
1. Term of The Charter; Schedule.
The term of the charter Vessel commence on or about July 15, 1996, and
terminate on or about September 10, 1996 (The "Term"). During the Term, the
Vessel shall operate pursuant to the schedule set forth on Exhibit 1 attached
hereto (the "Schedule"), and shall be available for the dive shots set forth on
Exhibit 2 attached hereto (the "Dive List"), provided, however, that the
Schedule and the Dive List are each subject to modification at the reasonable
request of DCI, if required thereby as a result of the exigencies relating to
the production of the Programs.
2. Equipment; Crew.
The Vessel shall be equipped with all of its customary at sea assets,
which assets shall include, without limitation, the equipment listed on Exhibit
3 attached hereto. In addition, the Vessel shall have a full complement of
at-sea crew (the "Crew").
<PAGE> 29
3. Consideration.
In consideration for the Charter, RMST shall pay to Aqua + the sum of
550,000 U.S. Dollars, and 40 U.S. Dollars per night per individual (each a
"Guest") on the Vessel (exclusive of the Crew) for room and board. Telephone
communications made by Guests are an additional expense, at the customary rates
charged by Aqua + therefor.
4. Insurance.
Aqua + shall maintain with financially sound and reputable insurance
companies all ordinary and necessary insurance against at least such risks as
are customarily insured against in connection with the operation and charter of
an oceangoing vessel, including, without limitation, liability, property and
casualty insurance. All insurance shall name both RMST and DCI as additional
loss payee thereon. Aqua + shall deliver to each of RMST and DCI a detailed list
of insurance, and copies of insurance certificates naming each as additional
loss payee, not later than the execution of the Charter Agreement.
5. Releases, No Photography.
Aqua + shall use its best efforts to have each member of the Crew execute
and deliver a release in the form attached hereto as Exhibit 4 (each, a
"Release"). In addition, Aqua + shall ensure that all Guests shall execute and
deliver a Release. "Aqua + shall inform and direct its employees and agents,
including but not limited to its contractors and subcontractors, that no audio
or visual record, including, but not limited to, photographs (including
negatives), audio recording, video recordings, film and motion pictures, may be
taken by them during the Expedition.
The parties hereto agree to use best efforts to enter into the Charter
Agreement not later than July 24, 1996, provided, however, that each agree that
the Charter Agreement is in all respects subject to the approval of DCI.
By execution and delivery of this letter, where indicated, you agree to be
bound by the terms hereof.
Very truly yours,
Aqua +
------------------------
By:
Its:
Agreed to and accepted:
RMS Titanic, Inc.
- ---------------------------
By:
Its:
<PAGE> 30
Exhibit 1
---------
Ocean Voyager Schedule
(Portion of Schedule)
August 4 Rendezvous with Nadir at Titanic site
On or about August 6 Leave for St. John's to pick up lights at
earliest availability (presently assuming
lights will be ready for loading August 8)
On or about August 8 Arrive at St. John's, load lights and
additional production personnel (including
scientists), and leave for Titanic site
On or about August 10 Arrive at Titanic (add one extra day for
arrival date if shallow water dives with
Nadir are made en route)
On or about August 20 Leave Titanic site for St. John's
On or about August 22 Arrive at St. John's, drop off Phase 1 crew
and production personnel (including
scientists) and pick up Phase 2 crew and
production personnel, and leave for
Titanic site
On or about August 24 Arrive at Titanic site (add one extra day
for arrival date if shallow water dives
with Nadir are made en route)
August 29 Leave Titanic site for New York after
departure of the RMST cruise ships,
provided that an earlier date of departure
for New York will be permitted if, and only
if, DCI, in its sole good faith judgment,
determines that acceptable alternative
arrangements have been made for
accomodating the needs of the crew and
other production personnel (including,
without limitation, the Discovery Channel
On-Line team) required to remain at the
Titanic site until the end of the event
Page 1 of 1
<PAGE> 31
Exhibit 2
---------
(to Schedule 1(a)(1)
Redacted material (pages 1 to 18)
<PAGE> 32
Exhibit 3
---------
(to Schedule 1(a)(1)
Redacted material (pages 1 to 5)
<PAGE> 33
Exhibit 4
---------
GENERAL RELEASE AND WAIVER
OF RIGHTS AGREEMENT
NOTICE: YOUR PRESENCE ABOARD THE "NADIR" AND "OCEAN
VOYAGER" SURFACE VESSELS AND ANY OTHER VESSEL
CHARTERED FOR THE 1996 EXPEDITION
OF RMS TITANIC, INC. TO THE SITE OF
THE SINKING OF THE RMS TITANIC, AND
TRAVEL ON SUCK VESSELS TO AND FROM
LAND, IS AN INHERENTLY DANGEROUS AND HAZARDOUS
ACTIVITY. PRESENCE ABOARD SUCH VESSELS
IS AT YOUR OWN RISK.
I wish to be permitted aboard vessels that may be present at, or utilized
in connection with, the expedition by RMS Titanic, Inc. (the "RMST"), together
with the participation of Discovery Communications, Inc. ("DCI") and Ellipse
Programme ("Ellipse") on or about July 1996, to the site of the sinking of the
R.M.S. Titanic in the North Atlantic Ocean (the "Expedition"). I acknowledge
that RMST has chartered vessels owned by IFREMER and Aqua+ for such expedition.
Subject to the terms and conditions set forth below, I understand that I may be
permitted to be aboard the IFREMER "NADIR" vessel or the Aqua+ "OCEAN VOYAGER"
vessel, as the case may be, during the course of the Expedition. For convenience
of reference, the IFREMER "NADIR" and Aqua+ "OCEAN VOYAGER" vessels are
collectively referred to herein as the "Vessels".
I understand that presence upon the Vessels is an inherently dangerous and
hazardous activity.
In consideration of the Company permitting me to be aboard the Vessels, I
agree as follows:
GENERAL RELEASE
1. I hereby agree to assume all risks with respect to, and agree to
release and hold each of RMST, DCI, Ellipse, IFREMER, Aqua+ and Guiness Import
Company ("Guinness", which together with RMST, DCI, Ellipse, IFREMER and Aqua+
shall be collectively referred to herein as the "Companies") and their
respective officers, directors, employees and agents harmless from any and all
liabilities, claims, demands, causes of action, damages, costs, expenses and
obligations of any nature whatsoever for any personal injury, disease or
sickness, including death resulting therefrom, or for loss of, or damage to, my
property, while boarding, aboard or departing from the Vessels. I hereby agree
not to make any claim against and/or sue any of the Companies or their
respective officers, directors, employees and agents for any such injury,
disease, sickness, death, loss or damage.
2. I hereby release each of the Companies and their respective officers,
directors,
<PAGE> 34
employees and agents from any claims, demands, causes of action, damages, costs,
expenses and obligations of any nature whatsoever for any injuries or losses
arising out of the negligence of any of the Companies or their respective
officers, directors, employees or agents.
3. I hereby acknowledge that IFREMER or Aqua+, as the case may be, has
sole and exclusive control over the standards of care and conduct to be followed
by all persons aboard the Vessels, and agree to abide by all directives and
instructions, and rules and regulations, that may be issued by the crew, agents,
staff, and/or employees of IFREMER and Aqua+.
4. I hereby agree that I shall be solely responsible for all costs and
expenses in connection with my travel to and from the Nadir or the Ocean
Voyager, as the case may be, and agree that none of the Companies has undertaken
or has any responsibility or obligation, to make any arrangements for my travel
to and from the Nadir or the Ocean Voyager, as the case may be. I further
acknowledge that I have not paid any fees or any other form of compensation to
any of the Companies in consideration of my having been granted permission to
be aboard the Nadir or the Ocean Voyager, as the case may be.
OWNERSHIP OF PHOTOGRAPHIC
AUDIO, VIDEO AND FILM RIGHTS
5. I hereby agree that RMST, DCI or Ellipse, as the case may be
(collectively, the "Owners"), shall be the sole and exclusive owner of any and
all audio or visual records made on any medium, including, but not limited to,
photographs (including negatives), audio recordings, video recordings, film and
motion pictures (collectively "Artwork") that I may take or make of the Vessels
or while boarding, aboard or departing from the Vessels. I hereby agree to
surrender and deliver to the Owners any and all such audio and visual records
upon request of any of the Owners while I am aboard the Nadir or the Ocean
Voyager, as the case may be, or any time after I depart from the Nadir or Ocean
Voyager, as the case may be, and further agree that I shall not be entitled to
receive payment of any fees, compensation, royalties or any other remuneration
of any kind or description from any of the Owners or from any third party for
the rights to any such audio or visual records. I further agree not to release
any Artwork to any news, media or other commercial enterprise, but shall, to the
extent I retain the same pursuant hereto, use such Artwork only for my personal
use.
6. I hereby agree that the Owners shall have the right to copyright such
audio or visual records in their respective names or any name they may choose,
and to edit, use, re-use, publish, re-publish, the same, in whole or in part,
severally or in conjunction with other audio or visual works, in any medium and
for any purpose whatsoever including (but not by way of limitation)
illustrating, promotion and advertising, and trade, with or without credit or
attribution to me, as the Owners, in their sole discretion, shall deem
appropriate.
7. The Owners may, but shall not be obligated to, deliver to me copies of
any such audio or video record for my personal enjoyment and use, subject to
execution by me
2
<PAGE> 35
of an appropriate agreement prohibiting me from the use of any such audio or
video records for commercial purposes or for my direct or indirect pecuniary
gain, and subject further to such other terms and conditions as the Owners may,
in their sole discretion, may deem reasonable.
PHOTOGRAPHS AND
LIKENESS OF ME
8. I hereby agree that the Owners shall have an unrestricted, absolute and
irrevocable right, with respect to photographs and likenesses of me, or my voice
or appearance in any other visual or audio records of the Expedition, including,
but not limited to, photographs, video recording, film, taping and motion
pictures: (a) to copyright the same in the Owner's respective name or any other
name they may choose; (b) to edit, use, re-use, publish and re-publish the same
in whole or in part, severally or in conjunction with other such visual records,
in any medium and for any purpose whatsoever, including (but not by way of
limitation) illustration, promotion and advertising, and trade; and (c) to use
my name in connection therewith if the Owners so choose. I further hereby
release and discharge the Owners, their respective officers, directors,
employees and agents from any and all claims or demands of any kind whatsoever
arising from, or in connection with the use of such visual records, including
any and all rights to compensation, royalties or other remuneration, or any
claim for libel.
CONFIDENTIALITY AND
NON-DISCLOSURE AGREEMENT
9. I hereby agree that any and all information obtained by me concerning
the Expedition or while boarding, aboard or departing from the Vessels, is
confidential and the proprietary information of the Companies and is the sole
and exclusive property of the respective Companies. I agree that I shall not
divulge, disclose, distribute, publish, disseminate, record, duplicate or
replicate any such information, and further agree that by the disclosure of such
confidential and proprietary information to me, the respective Companies do not
grant any express or implied right for me to use such information for any
purpose.
10. I agree that I will not participate in any news conference, interview
or otherwise disclose any information concerning the Expedition or the Vessels,
without the prior consent of the Companies.
11. I hereby agree that monetary damages may not be a sufficient remedy
for my unauthorized disclosure of the Companies' proprietary and confidential
information and further agree that the respective Companies shall be entitled,
without waiving any other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction.
MISCELLANEOUS
3
<PAGE> 36
12. Miscellaneous.
(a) Waiver.
No purported waiver by either party of any default by the other party with
respect to any term or provision contained herein shall be deemed to be a waiver
of such term or provision unless the waiver is in writing and signed by the
waiving party. The waiver by either party hereto of any breach or violation of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach or violation.
(b) Entire Agreement.
This Agreement sets forth the entire understanding between the parties
concerning the subject matter hereof, and supersedes all prior negotiations and
understandings with respect thereto. There are no covenants, promises,
agreements, conditions or understandings, either oral or written, between the
parties and relating to the subject matter of this Agreement other than those
set forth herein. No alteration, amendment, change or addition to this Agreement
shall be binding upon either party unless in writing and signed by the party to
be charged.
(c) Governing Law.
This Agreement shall be construed in accordance with and be governed by
the laws of the State of New York, without recourse to its conflict of laws
principles. Jurisdiction and venue for any suit or proceeding brought with
regard to this Agreement shall be either in the Supreme Court of the State of
New York or the United States District Court for the Southern District of New
York.
(d) Indemnity.
I agree to Indemnity the Companies against any and all liability, damages,
costs or expenses (including reasonable attorneys' fees) arising from any
claims, demands or actions of libel, violation of the right of privacy,
infringement of copyright or other rights arising out of my breach of this
Agreement. I shall at my own cost and expense dispose of any such claim or
demand, or defend against any such action. The respective Companies shall have
the right, at my cost and expense, to participate in the defense of any such
action, and to be represented by counsel of the respective Companies' selection.
(e) Benefit.
This Agreement shall be binding upon my estate, heirs, executors,
administrators, successors and assigns.
(f) Severability.
4
<PAGE> 37
If any provision of this Agreement shall be held invalid or unenforceable,
the remainder of this Agreement which can be given effect without such invalid
or unenforceable provision shall remain in full force and effect, and the court
or agency having competent jurisdiction over the parties and the subject matter
shall be empowered to revise and/or construe said provisions of the agreement so
as to accomplish the intention of the parties within the bounds of permissible
legal limits. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.
(g) Captions.
The captions and section numbers appearing in this Agreement are inserted
only as a matter of convenience, and shall not be used to construe, define,
limit or describe the scope or intent of the provisions of this Agreement.
Dated: July , 1996
-------------------------------------------
Signature of
------------------------------
(Print Name)
5
<PAGE> 38
Rider to Exhibit 4
------------------
In the event that any "key individuals" at site refuse to execute Schedule
4(d)(ii), they shall in all events execute a form of written release consisting
of Sections 5, 6, 7 and 8 of the General Release and Waiver of Rights Agreement
annexed hereto.
<PAGE> 39
[Letterhead of Discovery Communications, Inc.]
Schedule 1(a)(2)
-----------------
July 22, 1996
RMS Titanic, Inc.
17 Battery Place
Suite 203
New York, New York 10004
Re: Charter by RMS Titanic, Inc. from
Aqua+ of the Ocean Voyager Vessel
Ladies and Gentlemen:
This letter serves as confirmation of your agreement to charter from
Aqua+, the vessel known as the "Ocean Voyager" that is owned by Aqua+, in
connection with the production of the Programs pursuant to the Tri-Party
Agreement, dated as of July 22, 1996 (the "Tri-Party Agreement"), by and among
Discovery Communications, Inc. ("DCI"), Ellipse Programme and RMS Titanic, Inc.
("RMST"). You hereby confirm and agree that the charter agreement (the "Charter
Agreement") between Aqua+ and RMST that is being entered into pursuant to which
RMST shall charter the Ocean Voyager from Aqua+ shall contain, without
limitation, the terms of the letter agreement dated of even date herewith,
between RMST and Aqua+. You further confirm that you will enter into the
Charter Agreement only upon prior written approval of DCI. Capitalized terms
used and not otherwise defined herein shall have the same meanings when used in
the Tri-Party Agreement.
In connection with the charter of the Ocean Voyager by RMST, RMST
and DCI hereby agree to the following:
1. To accord DCI full, unrestricted and unlimited access aboard
the Ocean Voyager for filming, taping and any other production
activity associated with the production of the Programs and in
a manner that respects DCI's rights and obligations pursuant
to the Tri-Party Agreement;
2. To request the master, crew and members of the Ocean Voyager,
at DCI's direction, to perform and implement any and all
reasonable actions and services in connection with the
production of the Programs; and
<PAGE> 40
RMS Titanic, Inc.
July 22, 1996
Page 2
3. DCI shall have the right to request that RMST bring an action,
suit or claim under the Charter Agreement, at DCI's cost and
expense, in order to enforce DCI's rights hereunder and with
respect to the Charter Agreement and the use of the Ocean
Voyager pursuant thereto.. RMST shall advise DCI in writing
within fifteen (15) days of receipt of DCI's request whether
it shall proceed with respect to such action, suit or claim.
In the event that RMST chooses not to proceed or does not
respond within the fifteen (15) day period, RMST agrees that
DCI shall have the right to proceed with such action, suit or
claim in the name of RMST, and on behalf of RMST. In
connection therewith, RMST hereby grants DCI a power of
attorney solely to bring such an action, suit or claim in the
name of RMST, which power constitutes a power coupled with an
interest, which shall survive the Charter Agreement, the
Tri-Party Agreement and this Letter Agreement. DCI shall bear
the costs and expenses of bringing such action, suit or claim.
RMST further agrees to cooperate fully with DCI in connection
with such action, suit or claim and, at DCI's expense, shall
supply DCI with all documents and other information as it may
reasonably request as necessary to such action, suit or claim.
All recoveries obtained by DCI in any such action, suit or
claim shall be retained by DCI.
By your execution and delivery of this letter, where indicated, you
agree to be bound by the terms and provisions of this letter.
Sincerely,
DISCOVERY COMMUNICATIONS, INC.
By:
----------------------------------------
Name:
Title:
Agreed to and Accepted:
RMS TITANIC, INC.
By:
----------------------------------------
Name:
Title:
<PAGE> 41
Schedule 1(b)
-------------
Redacted material (pages 1 to 18)
<PAGE> 42
Schedule 1(c)(1)
----------------
Redacted material (pages 1 to 16)
<PAGE> 43
Schedule 1(c)(2)
----------------
Redacted material (pages 1 to 2)
<PAGE> 44
Schedule 2(a)
-------------
Redacted material (pages 1 to 18)
<PAGE> 45
Schedule 2(b)(v)
----------------
Redacted material (pages 1 to 12)
<PAGE> 46
SCHEDULE 4(a)
-------------
1. RMST has licensed to John Gau Productions, London, England for use in
all media throughout the world, for an exclusive period of two years from March
17, 1995 and on a non-exclusive basis thereafter, less than two (2) minutes of
its underwater footage from prior Titanic expeditions as incorporated into the
television program known as "The Explorers of the Titanic."
2. RMST has licensed to Sygma in perpetuity the rights to photography
obtained during the 1987 expedition to the Titanic for use in newspapers and
magazines.
<PAGE> 47
Schedule 4(d)(i)
----------------
Form of Appearance Release shall consist of Section 8 of the form of
General Release and Waiver of Rights Agreement annexed hereto.
<PAGE> 48
Schedule 4(d)(ii)
-----------------
GENERAL RELEASE AND WAIVER
OF RIGHTS AGREEMENT
NOTICE: YOUR PRESENCE ABOARD THE "NADIR" AND "OCEAN
VOYAGER" SURFACE VESSELS AND ANY OTHER VESSEL
CHARTERED FOR THE 1996 EXPEDITION
OF RMS TITANIC, INC. TO THE SITE OF
THE SINKING OF THE R.M.S. TITANIC, AND
TRAVEL ON SUCH VESSELS TO AND FROM
LAND, IS AN INHERENTLY DANGEROUS AND HAZARDOUS
ACTIVITY. PRESENCE ABOARD SUCH VESSELS
IS AT YOUR OWN RISK.
I wish to be permitted aboard vessels that may be present at, or utilized
in connection with, the expedition by RMS Titanic, Inc. (the "RMST"), together
with the participation of Discovery Communications, Inc. ("DCI") and Ellipse
Programme ("Ellipse") on or about July 1996, to the site of the sinking of the
R.M.S. Titanic in the North Atlantic Ocean (the "Expedition"). I acknowledge
that RMST has chartered vessels owned by IFREMER and Aqua+ for such expedition.
Subject to the terms and conditions set forth below, I understand that I may be
permitted to be aboard the IFREMER "NADIR" vessel or the Aqua+ "OCEAN VOYAGER"
vessel, as the case may be, during the course of the Expedition. For convenience
of reference, the IFREMER "NADIR" and Aqua+ "OCEAN VOYAGER" vessels are
collectively referred to herein as the "Vessels".
I understand that presence upon the Vessels is an inherently dangerous and
hazardous activity.
In consideration of the Company permitting me to be aboard the Vessels, I
agree as follows:
GENERAL RELEASE
1. I hereby agree to assume all risks with respect to, and agree to
release and hold each of RMST, DCI, Ellipse, IFREMER, Aqua+ and Guiness Import
Company ("Guinness", which together with RMST, DCI, Ellipse, IFREMER and Aqua+
shall be collectively referred to herein as the "Companies") and their
respective officers, directors, employees and agents harmless from any and all
liabilities, claims, demands, causes of action, damages, costs, expenses and
obligations of any nature whatsoever for any personal injury, disease or
sickness, including death resulting therefrom, or for loss of, or damage to, my
property, while boarding, aboard or departing from the Vessels. I hereby agree
not to make any claim against and/or sue any of the Companies or their
respective officers, directors, employees and agents for any such injury,
disease, sickness, death, loss or damage.
2. I hereby release each of the Companies and their respective officers,
directors,
<PAGE> 49
employees and agents from any claims, demands, causes of action, damages, costs,
expenses and obligations of any nature whatsoever for any injuries or losses
arising out of the negligence of any of the Companies or their respective
officers, directors, employees or agents.
3. I hereby acknowledge that IFREMER or Aqua+, as the case may be, has
sole and exclusive control over the standards of care and conduct to be followed
by all persons aboard the Vessels, and agree to abide by all directives and
instructions, and rules and regulations, that may be issued by the crew, agents,
staff, and/or employees of IFREMER and Aqua+.
4. I hereby agree that I shall be solely responsible for all costs and
expenses in connection with my travel to and from the Nadir or the Ocean
Voyager, as the case may be, and agree that none of the Companies has undertaken
or has any responsibility or obligation, to make any arrangements for my travel
to and from the Nadir or the Ocean Voyager, as the case may be. I further
acknowledge that I have not paid any fees or any other foam of compensation to
any of the Companies in consideration of my having been granted permission to
be aboard the Nadir or the Ocean Voyager, as the case may be.
OWNERSHIP OF PHOTOGRAPHIC
AUDIO, VIDEO AND FILM RIGHTS
5. I hereby agree that RMST, DCI or Ellipse, as the case may be
(collectively, the "Owners"), shall be the sole and exclusive owner of any and
all audio or visual records made on any medium, including, but not limited to,
photographs (including negatives), audio recordings, video recordings, film and
motion pictures (collectively "Artwork") that I may take or make of the Vessels
or while boarding, aboard or departing from the Vessels. I hereby agree to
surrender and deliver to the Owners any and all such audio and visual records
upon request of any of the Owners while I am aboard the Nadir or the Ocean
Voyager, as the case may be, or any time after I depart from the Nadir or Ocean
Voyager, as the case may be, and further agree that I shall not be entitled to
receive payment of any fees, compensation, royalties or any other remuneration
of any kind or description from any of the Owners or from any third party for
the rights to any such audio or visual records. I further agree not to release
any Artwork to any news, media or other commercial enterprise, but shall, to the
extent I retain the same pursuant hereto, use such Artwork only for my personal
use.
6. I hereby agree that the Owners shall have the right to copyright such
audio or visual records in their respective names or any name they may choose,
and to edit, use, re-use, publish, re-publish, the same, in whole or in part,
severally or in conjunction with other audio or visual works, in any medium and
for any purpose whatsoever including (but not by way of limitation)
illustrating, promotion and advertising, and trade, with or without credit or
attribution to me, as the Owners, in their sole discretion, shall deem
appropriate.
7. The Owners may, but shall not be obligated to, deliver to me copies of
any such audio or video record for my personal enjoyment and use, subject to
execution by me
2
<PAGE> 50
of an appropriate agreement prohibiting me from the use of any such audio or
video records for commercial purposes or for my direct or indirect pecuniary
gain, and subject further to such other terms and conditions as the Owners may,
in their sole discretion, may deem reasonable.
PHOTOGRAPHS AND
LIKENESS OF ME
8. I hereby agree that the Owners shall have an unrestricted, absolute and
irrevocable right, with respect to photographs and likenesses of me, or any
voice or appearance in any other visual or audio records of the Expedition,
including, but not limited to, photographs, video recording, film, taping and
motion pictures: (a) to copyright the same in the Owner's respective name or any
other name they may choose; (b) to edit, use, re-use, publish and re-publish the
same in whole or in part, severally or in conjunction with other such visual
records, in any medium and for any purpose whatsoever, including (but not by way
of limitation) illustration, promotion and advertising, and trade; and (c) to
use my name in connection therewith if the Owners so choose. I further hereby
release and discharge the Owners, their respective officers, directors,
employees and agents from any and all claims or demands of any kind whatsoever
arising from, or in connection with the use of such visual records, including
any and all rights to compensation, royalties or other remuneration, or any
claim for libel.
CONFIDENTIALITY AND
NON-DISCLOSURE AGREEMENT
9. I hereby agree that any and all information obtained by me concerning
the Expedition or while boarding, aboard or departing from the Vessels, is
confidential and the proprietary information of the Companies and is the sole
and exclusive property of the respective Companies. I agree that I shall not
divulge, disclose, distribute, publish, disseminate, record, duplicate or
replicate any such information, and further agree that by the disclosure of such
confidential and proprietary information to me, the respective Companies do not
grant any express or implied right for me to use such information for any
purpose.
10. I agree that I will not participate in any news conference, interview
or otherwise disclose any information concerning the Expedition or the Vessels,
without the prior consent of the Companies.
11. 1 hereby agree that monetary damages may not be a sufficient remedy
for my unauthorized disclosure of the Companies' proprietary and confidential
information and further agree that the respective Companies shall be entitled,
without waiving any other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction.
MISCELLANEOUS
3
<PAGE> 51
12. Miscellaneous.
(a) Waiver.
No purported waiver by either party of any default by the other party with
respect to any term or provision contained herein shall be deemed to be a waiver
of such term or provision unless the waiver is in writing and signed by the
waiving party. The waiver by either party hereto of any breach or violation of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach or violation.
(b) Entire Agreement.
This Agreement sets forth the entire understanding between the parties
concerning the subject matter hereof, and supersedes all prior negotiations and
understandings with respect thereto. There are no covenants, promises,
agreements, conditions or understandings, either oral or written, between the
parties and relating to the subject matter of this Agreement other than those
set forth herein. No alteration, amendment, change or addition to this Agreement
shall be binding upon either party unless in writing and signed by the party to
be charged.
(c) Governing Law.
This Agreement shall be construed in accordance with and be governed by
the laws of the State of New York, without recourse to its conflict of laws
principles. Jurisdiction and venue for any suit or proceeding brought with
regard to this Agreement shall be either in the Supreme Court of the State of
New York or the United States District Court for the Southern District of New
York.
(d) Indemnity.
I agree to indemnify the Companies against any and all liability, damages,
costs or expenses (including reasonable attorneys' fees) arising from any
claims, demands or actions of libel, violation of the right of privacy,
infringement of copyright or other rights arising out of my breach of this
Agreement. I shall at my own cost and expense dispose of any such claim or
demand, or defend against any such action. The respective Companies shall have
the right, at my cost and expense, to participate in the defense of any such
action, and to be represented by counsel of the respective Companies' selection.
(e) Benefit.
This Agreement shall be binding upon my estate, heirs, executors,
administrators, successors and assigns.
(f) Severability.
4
<PAGE> 52
If any provision of this Agreement shall be held invalid or unenforceable,
the remainder of this Agreement which can be given effect without such invalid
or unenforceable provision shall remain in full force and effect, and the court
or agency having competent jurisdiction over the parties and the subject matter
shall be empowered to revise and/or construe said provisions of the agreement so
as to accomplish the intention of the parties within the bounds of permissible
legal limits. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.
(g) Captions.
The captions and section numbers appearing in this Agreement are inserted
only as a matter of convenience, and shall not be used to construe, define,
limit or describe the scope or intent of the provisions of this Agreement.
Dated: July , 1996
-------------------------------------------
Signature of
------------------------------
(Print Name)
5
<PAGE> 53
Schedule 4(d)(ii)
-----------------
In the event that any "key individuals" at site refuse to execute Schedule
4(d)(ii), they shall in all events execute a form of written release consisting
of Sections 5, 6, 7 and 8 of the General Release and Waiver of Rights Agreement
annexed hereto.
<PAGE> 54
Schedule 6(e)
THE FRANCOPHONE TERRITORY (FRENCH SPEAKING TERRITORIES)
-------------------------------------------------------
"The Francophone Territory" shall mean the land and waters belonging to or under
the jurisdiction of the following states:
France including: Metropolitan France, Monaco, Andorra, Corsica,
its overseas Departments,
its overseas Territories,
French Antilles
- ---------------
Guadeloupe
French Guiana
Saint-Pierre et Miquelon
Saintes Desirades
Marie-Galante
Martinique
Haiti
Saint-Barthelemy
Saint-Martin
French Oceanie and Polynesie
- ----------------------------
Comoro Island
Oripperton Island
Mauritius Island
Mozambique Island
La Reunion
Seychelles Island
Wallis and Futuna Islands
New Hebrides
New Caledonia
Madagascar
Mayotte
French Polynesie: (Tahiti, Society Island, Loyalty Island, The Marquisas,
Tuamotu Island, Gambier Island, Toubai Island)
Southern hemisphere: (Kerguelen Island, Amster, Saint-Paul, Crozet, Marion,
Prince Edouard, Adelie Coast)
Northern Africa
- ---------------
Algeria
Marocco
Tunisia
<PAGE> 55
French speaking Africa
- ----------------------
Benin
Burkina Faso
Burundi
Cameroon
Republic of Central Africa
Congo
Djibouti
Ivory Coast
Gabon
Guinea
High Volta
Mali
Mauritania
Nigeria
Rwanda
Senegal
Tchad
Togo
Zaire
French speaking Europe:
- ----------------------
Belgium
France
Switzerland
Luxemburg
Monaco
Andorra
and shall include with respect to those states any:
(1) colony;
(2) protectorate;
(3) trust territory
(4) protected state;
(5) dependency;
(6) embassy, governmental agency, military base administrated by the state
outside the state;
(7) train, ship, bus, aircraft or other international commercial carrier
originating from a state, or owned, directly or indirectly, by the state,
wherever geographically situated throughout the universe;
(8) base, camp, site, construction camp, installation, oil rig under the
control of the armed forces, governmental agencies or industrial concerns
of the State.
<PAGE> 56
Schedule 10
DCI HOME VIDEO NET REVENUES
---------------------------
1. RMST shall be entitled to an amount equal to ten percent (10%) of DCI's
"Net Revenues" (as defined below) from the exploitation of the Home Video Rights
in the Programs.
As used herein:
"Gross Revenues" shall mean all sums actually received by DCI from
the exploitation of the Home Video Rights in the Programs by DCI, provided that:
(a) Gross Revenues shall be determined after all refunds,
credits, discounts, allowances and adjustments granted to any third party
licensees of Home Video Rights in the Programs; and
(b) Advance payments, whether returnable or not, shall not be
included in Gross Revenues until actually earned or applied by DCI from such
exploitation.
In no event shall Gross Revenues include any receipts from
exploitation of derivative, subsidiary or ancillary rights of any kind or nature
(except as set forth to the contrary elsewhere herein), including, without
limitation, receipts from any spinoff, remake, sequel, non-theatrical
production, theatrical production, or other derivative use of the Programs or
any element thereof used in a home video. In no event shall Gross Revenues
include any amounts received by Ellipse in respect of Ellipse's exploitation of
Home Video Rights in the Programs.
"Net Revenues" shall mean Gross Revenues remaining after the
deduction therefrom on a continuing basis of the following in the order set
forth below:
(a) Any and all third party distribution fees and expenses
payable by DCI in connection with the exploitation of
the Home Video Rights;
(b) DCI's "Distribution Fee" of 30% where DCI does not use a
subdistributor, and of 10% where DCI does use a
subdistributor, in each case computed on 100% of Gross
Revenues;
(c) DCI's "Distribution Expenses" as set forth below; and
(d) DCI's "Special Production Expenses" as set forth below.
<PAGE> 57
DCI's "Distribution Expenses" shall include, without limitation, (i)
costs of goods computed on a per-unit basis (including, without limitation,
dubbing, packaging and shipping, insurance and other fulfillment costs), (ii)
actual bad debts, (iii) any sales, excise, use and value-added taxes, (iv)
actual returns, (v) a reserve for bad debts applicable to (ii) above not to
exceed 2% of gross billings and a reserve for Returns (defined below) applicable
to (iv) above not to exceed 6% of gross billings, said reserves to be adjusted
and liquidated at the end of the first six months following the initial release
of such Home Video, and quarterly thereafter with each subsequent accounting
period; and (vi) costs of promotion (third party payments only) directly related
to sales of the home videos of the Programs. Revenues and expenses from the
exploitation of the Home Video Rights in the Programs via each channel of
distribution shall be cross-collateralized against revenues and expenses from
the exploitation of the Home Video Rights in the Program via each other channel
of distribution.
DCI's "Special Production Expenses" shall mean all direct, out of
pocket costs and expenses incurred directly in connection with the creation of
alternative versions of the Programs in connection with the exploitation of the
Home Video Rights therein.
"Returns" shall mean copies of the Program in a Home Video format
returned to the distributor thereof by customers pursuant to such distributor's
normal return policy of accepting returns for any reason at any time.
2. DCI shall render to RMST periodic statements showing, in summary form,
the calculation of all Net Revenues pursuant to this Agreement, which shall be
accompanied by RMST's share thereof, if any. Statements shall be rendered on a
semi-annual basis, within sixty (60) days after the end of second quarter after
the initial distribution by DCI of a home video of a Program, provided, however,
that no statements need be rendered for any accounting period in which no Gross
Revenues are received by DCI. Should DCI make any overpayment to RMST hereunder
for any reason, DCI shall have the right to deduct the amount of such
overpayment from any further monies owing to RMST hereunder, or may demand
repayment from RMST, in which event RMST shall promptly repay the same to DCI.
3. RMST may, at its own expense, but not more than once each year, audit
DCI's records relating to the Programs at the offices of DCI for the purpose of
verifying the payments made to RMST hereunder. Any such audit shall be conducted
only by a certified public accountant (subject to DCI's reasonable approval)
during normal business hours upon reasonable prior written notice and shall not
continue for more than thirty (30) consecutive days. RMST shall not have the
right to examine, inquire into or object to any matter contained in any
statement after the expiration of twelve (12) months from the date of mailing of
the statement. RMST's right to examine DCI's records shall be limited to those
relating specifically to the exploitation of Home Video Rights in the Programs
by DCI, and under no circumstances shall RMST have the right to examine records
relating to DCI's
<PAGE> 58
the event that an audit by RMST discloses an underpayment of more than five
percent (5%) to RMST and of more than $5,000, and such underpayment is not the
subject of a good faith dispute, DCI shall reimburse Producer for the reasonable
costs of such audit.
4. DCI shall not be considered a trustee, pledgeholder, fiduciary or agent
of RMST by reason of anything done or any money collected by it, and shall not
be obligated to segregate receipts from DCI's exploitation of Home Video Rights
in the Programs from its other funds. RMST shall not have any lien or other
rights in or to the Gross or Net Revenues so derived by DCI, it being understood
that the references thereto are intended solely for the purpose of determining
the amount of monies payable to RMST hereunder, if any. DCI shall have the
complete authority to license, market and exploit the Home Video Rights, or to
refrain from so doing, as it may choose in its sole discretion, and RMST
acknowledges that DCI is not in any way making any representations or guarantees
of any kind whatsoever regarding the amount of Net Revenues which may be
received from the exploitation of such Home Video Rights.
<PAGE> 59
SCHEDULE 10(b)
"Ellipse Net Revenues" as used in Section 10 of the Agreement shall mean
"Gross Revenues" (as defined in Schedule 10(a) hereof) remaining after the
deduction therefrom on a continuing basis of the following in the order set
forth below:
(c) Any and all third party distribution tees and expenses payable
by Ellipse in connection with the exploitation of the Home
Video Rights;
(b) the sum of $139,000, all of which is to be retained by
Ellipse;
(c) the sum of $13,900, all of which is to be paid to RMST;
(d) Ellipse's "Distribution Fee" of 30% where Ellipse does not use
a subdistributor, and of 10% where Ellipse does use a
subdistributor, in each case computed on 100% of Gross
Revenues;
(e) Ellipse's "Distribution Expenses," as that term is defined in
Schedule 10(a) hereof with reference to DCI;
(f) Ellipse's "Special Production Expenses," as that term is
defined in Schedule 10(a) hereof with reference to DCI.
In all other respects, the terms and condition of Schedule 10(a) hereof
shall apply to and be binding upon Ellipse and RMST with regard to their
respective rights and obligations, with references to "Ellipse" being
substituted for "DCI" in all contexts thereof.
<PAGE> 60
Schedule 13
-----------
Redacted material (pages 1 to 8)
<PAGE> 61
SCHEDULE 17(a)
The only outstanding claim made or pending against RMST with respect to its
exclusive salvage rights to the Titanic shipwreck is an appeal to the United
States Court of Appeals for the Fourth Circuit from an order entered May 10,
1996 denying a motion filed pursuant to Rule 60 of the Federal Rules of Civil
Procedure seeking the entry of an order rescinding the June 7, 1994 award to
RMST of salvor-in-possession status of the Titanic shipwreck (R.M.S. Titanic,
Inc., V. The Wrecked and Abandoned Vessel believed to be the RMS TITANIC, in
rem, No. 2:293cv902).
