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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-25308
OVERSEAS FILMGROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3751702
(State or other (I.R.S. Employer
jurisdiction of incorporation Identification No.)
or organization)
8800 SUNSET BLVD., THIRD FLOOR, LOS ANGELES, CA 90069
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (310) 855-1199
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
(title of class)
Warrants to Purchase Common Stock
(title of class)
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
--- ---
Indicate by check mark if disclosures of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated herein by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
----
The aggregate market value of the voting stock held by non-affiliates of
the Registrant (assuming for these purposes, but without conceding, that all
executive officers and directors are "affiliates" of the Registrant) as of
March 24, 1997, (based on the closing sale price on such date as reported on the
OTC Bulletin Board) was $8,065,625.
The number of shares of Common Stock outstanding as of March 31, 1997 was
5,777,778.
DOCUMENTS INCORPORATED BY REFERENCE
NO DOCUMENTS ARE INCORPORATED BY REFERENCE INTO PARTS I, II OR III
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PART I
THIS ANNUAL REPORT ON FORM 10-K (INCLUDING, WITHOUT LIMITATION, PARTS I, II AND
III) CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS MAY CONSIST OF ANY
STATEMENT OTHER THAN A RECITATION OF HISTORICAL FACT AND CAN BE IDENTIFIED BY
THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "EXPECT," "ANTICIPATE,"
"ESTIMATE" OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR
COMPARABLE TERMINOLOGY. THE READER IS CAUTIONED THAT ALL FORWARD-LOOKING
STATEMENTS ARE NECESSARILY SPECULATIVE AND THERE ARE CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY
FROM THOSE REFERRED TO IN SUCH FORWARD-LOOKING STATEMENTS. THESE RISKS AND
UNCERTAINTIES INCLUDE, AMONG OTHER THINGS, THE HIGHLY SPECULATIVE AND INHERENTLY
RISKY AND COMPETITIVE NATURE OF THE MOTION PICTURE INDUSTRY. THERE CAN BE NO
ASSURANCE OF THE ECONOMIC SUCCESS OF ANY MOTION PICTURE SINCE THE REVENUES
DERIVED FROM THE PRODUCTION AND DISTRIBUTION OF A MOTION PICTURE (WHICH DO NOT
NECESSARILY BEAR A DIRECT CORRELATION TO THE PRODUCTION OR DISTRIBUTION COSTS
INCURRED) DEPEND PRIMARILY UPON ITS ACCEPTANCE BY THE PUBLIC, WHICH CANNOT BE
PREDICTED. THE COMMERCIAL SUCCESS OF A MOTION PICTURE ALSO DEPENDS UPON THE
QUALITY AND ACCEPTANCE OF OTHER COMPETING FILMS RELEASED INTO THE MARKETPLACE AT
OR NEAR THE SAME TIME, THE AVAILABILITY OF ALTERNATIVE FORMS OF ENTERTAINMENT
AND LEISURE TIME ACTIVITIES, GENERAL ECONOMIC CONDITIONS AND OTHER TANGIBLE AND
INTANGIBLE FACTORS, ALL OF WHICH CAN CHANGE AND CANNOT BE PREDICTED WITH
CERTAINTY. THEREFORE, THERE IS A SUBSTANTIAL RISK THAT SOME OR ALL OF THE
MOTION PICTURES RELEASED, DISTRIBUTED, FINANCED OR PRODUCED BY REGISTRANT WILL
NOT BE COMMERCIALLY SUCCESSFUL, RESULTING IN COSTS NOT BEING RECOUPED OR
ANTICIPATED PROFITS NOT BEING REALIZED. THE REGISTRANT'S RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 ARE NOT NECESSARILY INDICATIVE OF THE
RESULTS THAT MAY BE EXPECTED IN FUTURE PERIODS. DUE TO QUARTERLY FLUCTUATIONS
IN THE NUMBER OF MOTION PICTURES FOR WHICH THE REGISTRANT ACQUIRES DISTRIBUTION
RIGHTS AND THE NUMBER OF MOTION PICTURES DISTRIBUTED BY REGISTRANT, AS WELL AS
THE UNPREDICTABLE NATURE OF AUDIENCE RESPONSE TO MOTION PICTURES DISTRIBUTED BY
REGISTRANT, THE REGISTRANT'S REVENUES, EXPENSES AND EARNINGS FLUCTUATE
SIGNIFICANTLY FROM QUARTER TO QUARTER AND FROM YEAR TO YEAR. ADDITIONAL RISKS
AND UNCERTAINTIES ARE DISCUSSED ELSEWHERE IN APPROPRIATE SECTIONS OF THIS REPORT
AND IN OTHER FILINGS MADE BY REGISTRANT WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE RISKS HIGHLIGHTED ABOVE AND ELSEWHERE IN THIS REPORT SHOULD
NOT BE ASSUMED TO BE THE ONLY THINGS THAT COULD AFFECT FUTURE PERFORMANCE OF THE
REGISTRANT. THE REGISTRANT DOES NOT HAVE A POLICY OF UPDATING OR REVISING
FORWARD-LOOKING STATEMENTS AND THUS IT SHOULD NOT BE ASSUMED THAT SILENCE BY
MANAGEMENT OF THE REGISTRANT OVER TIME MEANS THAT ACTUAL EVENTS ARE BEARING OUT
AS ESTIMATED IN SUCH FORWARD-LOOKING STATEMENTS.
ITEM 1. BUSINESS
Overseas Filmgroup, Inc., a Delaware corporation (the "Company") is an
independent film company which specializes in the acquisition and worldwide
license or sale of distribution rights to independently produced, feature films
in a wide variety of genres (including action, "art-house," comedy, drama,
foreign language, science fiction and thrillers). The Company's executive
offices are located at 8800 Sunset Boulevard, Third Floor, Los Angeles,
California 90069, and its telephone number is (310) 855-1199.
BACKGROUND - THE OCTOBER 1996 MERGER
The Company was incorporated in December 1993 under the name
Entertainment/Media Acquisition Corporation" as a Specified Purpose Acquisition
Company-Registered Trademark-* in order to acquire an operating
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* "Specified Purpose Acquisition Company" is a registered servicemark of
GKN Securities Corp.
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business in the entertainment and media industry by merger or other similar
type of transaction. From inception until the October 1996 merger hereafter
described, its operations were limited to organizational activities,
completion of an initial public offering in February 1995, and the evaluation
and negotiation of possible business combinations. On October 31, 1996,
pursuant to an Agreement of Merger dated as of July 2, 1996, as amended as of
September 20, 1996, among the Company, Overseas Filmgroup, Inc. - a
privately-held Delaware corporation ("Pre-Merger Overseas"), and Ellen
Dinerman Little and Robert B. Little (as amended, the "Merger Agreement"),
the Company merged with Pre-Merger Overseas (the "Merger"), with the Company
as the surviving corporation in the Merger. Upon consummation of the Merger,
the Company changed its name to "Overseas Filmgroup, Inc.", and succeeded to
the business and operations of Pre-Merger Overseas which had been established
in 1980. Unless otherwise specifically indicated or the context otherwise
requires, the term the "Company," refers to the Registrant, Overseas
Filmgroup, Inc., and its wholly owned subsidiaries and references to the
operations of the Company are to the operations of Pre-Merger Overseas
through the date of the Merger and to the combined company following the
Merger. In addition, the term "EMAC" is sometimes used herein to refer to
the Registrant during the period from its inception as "Entertainment/Media
Acquisition Corporation" until the Merger.
The aggregate merger consideration paid by the Company to the three
stockholders of Pre-Merger Overseas consisted of (i) 3,177,778 shares of the
Company's common stock, par value $.001 per share ("Common Stock"), (ii)
$1,500,000 in cash, and (iii) a $2,000,000, five year, secured promissory note
(the "Merger Note"). The cash merger consideration was paid from the proceeds
of a trust fund which held approximately 90% of the net proceeds of the
Company's initial public offering. See "Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources".
In connection with the Merger, the Company entered into a number of
agreements with certain of the former stockholders and executive officers of
Pre-Merger Overseas including a Lock-up and Registration Rights Agreement (see
"Item 12 - Security Ownership of Certain Beneficial Owners and Management"),
employment agreements and non-competition agreements (see "Item 11 - Executive
Compensation - Employment and Related Agreements"), and a Tax Reimbursement
Agreement (see "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Certain Tax Related Matters"). The
Company also adopted two stock option plans (see "Item 11 - Executive
Compensation - Certain Information Concerning Stock Option Plans") and entered
into certain arrangements regarding management of the Company including a
Stockholders' Voting Agreement among certain stockholders of the Company (see
"Item 10 - Directors and Executive Officers of the Registrant - Management
Arrangements"). Upon consummation of the Merger, the Company adopted new Bylaws
and amended and restated its Certificate of Incorporation to, among other
things, change the Company's name, increase its authorized capital stock, and
enact certain anti-takeover provisions, including, without limitation, a
classified board of directors. Upon consummation of the Merger, the officers of
the Company resigned their respective positions and new officers, consisting of
the former officers of Pre-Merger Overseas, were appointed by the Company's new
Board of Directors which had been elected at the Company's Special Meeting of
Stockholders in lieu of 1996 Annual Meeting at which the Merger had been
approved by the Company's stockholders (see "Item 4 - Submission of Matters To A
Vote Of Security Holders" and "Item 10 - Directors and Executive Officers of the
Registrant"). Following the Merger, the fiscal year of the Company was changed
from November 30 to December 31 (Pre-Merger Overseas's fiscal year), effective
for the fiscal year ending December 31, 1996. References in this Report to the
Company's fiscal year are to the twelve month periods beginning January 1 and
ending December 31 of each year. References in this Report to the Company's
last fiscal year are to the twelve months ended December 31, 1996.
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STRATEGIC OBJECTIVE
The Company has accumulated a library of distribution rights in various
media and markets to over 200 feature films. See "The Company's Film Library of
Distribution Rights" below. Most of such motion pictures have had direct
negative costs between $1,000,000 and $6,000,000. This is substantially below
the average direct negative cost of films produced by the major studios, which
was approximately $39,800,000 in 1996. The Company's primary focus has been the
licensing of distribution rights (such as theatrical, video, pay television,
free television, satellite and other rights) to foreign sub-distributors in the
major international territories or regions. These activities accounted for
approximately 72% of the Company's total revenues in 1996. The Company has been
increasingly active, however, in the domestic (United States) market due to its
increasing acquisition of domestic distribution rights. The Company engages
directly in domestic theatrical distribution (booking motion pictures with
theatrical exhibitors, arranging for the manufacture of release prints from the
film negative, and promoting such motion pictures with advertising and publicity
campaigns) through the Company's domestic theatrical releasing division, First
Look Pictures. First Look Pictures has released such films as ANTONIA'S LINE
(winner of the 1996 Academy Award for Best Foreign Language Film), THE BIG
SQUEEZE (starring Lara Flynn Boyle and Danny Nucci), INFINITY (directed by
Matthew Broderick, starring Matthew Broderick and Patricia Arquette), THE SCENT
OF GREEN PAPAYA (which was nominated for the 1994 Academy Award for Best Foreign
Language Film), THE SECRET OF ROAN INISH (the critically acclaimed film by the
noted director, John Sayles) and PARTY GIRL (which the Company believes was the
first theatrical motion picture broadcast over the Internet).
The Company began its operations by acting primarily as a foreign sales
agent, licensing distribution rights in markets outside the United States to
independently produced films which were fully financed and continued to be owned
by others, in exchange for a sales agency fee. Currently, the Company generally
acquires from independent producers the distribution rights in a film for a
specified term in one or more territories and media and receives a distribution
fee in connection with its licensing activities. Often the Company commits to
pay an independent producer a minimum guaranteed payment (a "minimum guarantee")
at or after delivery of the completed film to the Company, ranging from
approximately $100,000 to $5,000,000 or more and representing varying portions,
including at times all or substantially all of a film's production costs. These
minimum guarantees may enable the independent producer to obtain financing for
its project and often results in the Company controlling more of the
distribution rights in the film and receiving more favorable distribution terms.
The Company also selectively produces certain of the motion pictures distributed
by it, generally acquiring fully developed projects ready for pre-production and
contracting out pre-production and production activities.
The Company's primary strategies are to:
- - seek to limit risk by continuing to balance the methods it uses for
acquiring distribution rights;
- - maintain a cost consciousness in its acquisition, financing, production and
distribution activities;
- - continue to develop First Look Pictures with the goal of achieving broader
theatrical distribution and exposure for its releases, which, among other
things, may increase potential revenues from ancillary media and foreign
markets;
- - gradually and selectively acquire rights to or produce films which have
greater production values (often through offering greater creative
opportunity to talent than major studios offer or as a result of larger
budgets) and greater potential for more wide-spread audience appeal; and
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- - seek both to develop relationships with emerging talent and to maintain
relationships with independent producers with reputations for producing
high quality films while also controlling costs.
THE MOTION PICTURE INDUSTRY
The motion picture industry consists of two principal activities which are
described in greater detail below: production, which involves the development,
financing and production of motion pictures; and distribution, which involves
the promotion and exploitation of feature-length motion pictures in a variety of
media, including theatrical exhibition, home video, television and other
ancillary markets, both domestically and internationally. The United States
motion picture industry is dominated by the "major studios," including The Walt
Disney Company, Paramount Pictures Corporation, Warner Brothers Inc., Universal
Pictures, Twentieth Century Fox, Columbia Pictures, Tri-Star Pictures and
MGM/UA. The major studios, which have historically produced and distributed the
vast majority of high grossing theatrical motion pictures released annually in
the United States, are typically large diversified corporations that have strong
relationships with creative talent, theatrical exhibitors and others involved in
the entertainment industry, and also extensive motion picture libraries. Motion
picture libraries, consisting of motion picture copyrights and distribution
rights owned or controlled by a film company, can be valuable assets capable of
generating revenues from worldwide commercial exploitation in existing media and
markets, and potentially in future media and markets resulting from new
technologies and applications. The major studios' motion picture libraries
provide a stable source of earnings which offset the variations in the financial
performance of their new motion picture releases and other aspects of their
motion picture operations.
During the past 15 years, "independent" production and distribution
companies (many with financial and other ties to the major studios) have played
an important role in the production and distribution of motion pictures for the
worldwide feature film market, including New Line Cinema Corporation/Fine Line
Features (SHINE, THE MASK, TEENAGE MUTANT NINJA TURTLES and the NIGHTMARE ON ELM
STREET series), now affiliated with Time Warner Entertainment Company, L.P.;
Miramax Films Corporation (SLING BLADE, THE ENGLISH PATIENT, PULP FICTION, IL
POSTINO (the Postman) and LIKE WATER FOR CHOCOLATE), now affiliated with The
Walt Disney Company; October Films (SECRETS & LIES, BREAKING THE WAVES);
Majestic Films, Limited (the international distributor of DANCES WITH WOLVES and
DRIVING MISS DAISY); Gramercy Pictures (FARGO, FOUR WEDDINGS AND A FUNERAL and
DEAD MAN WALKING), now affiliated with PolyGram Filmed Entertainment; and Orion
Pictures (THE SILENCE OF THE LAMBS), now affiliated with Metromedia
International Telecommunications. There are also a large number of other
production and distribution companies that produce or distribute motion
pictures. In contrast to the major studios, the independent production and
distribution companies generally produce or distribute fewer motion pictures and
do not own production studios, national or worldwide distribution organizations,
or associated businesses or extensive film libraries which can generate gross
revenues sufficient to offset overhead, service debt or generate significant
cash flow.
The motion picture industry is a world-wide industry. In addition to the
production and distribution of motion pictures in the United States, domestic
motion picture distributors generate substantial revenues from the exploitation
of motion pictures internationally. In recent years, there has been a
substantial increase in the amount of filmed entertainment revenue generated by
U.S. motion picture distributors from foreign sources. From 1985 to 1995,
international revenues of U.S. motion picture distributors from filmed
entertainment grew from approximately $1.76 billion (comprising approximately
31.4% of total revenues of U.S. motion picture distributors from filmed
entertainment in
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1985) to approximately $9.5 billion (comprising approximately 49% of total
revenues of U.S. motion picture distributors from filmed entertainment in
1995). This growth has been due to a number of factors, including, among other
things, the general worldwide acceptance of and demand for motion pictures
produced in the United States, the privatization of many foreign television
industries, growth in the number of foreign households with videocassette
players, and growth in the number of foreign theater screens.
Many countries and territories, such as the Australia, Canada, China,
France, Germany, Hong Kong, India, Italy, Japan, Spain, and the United
Kingdom have substantial indigenous film industries. In a number of these
countries, as in the United States, the film (and in some cases the
entertainment) industry is dominated by a small number of companies, often
large, diversified companies with production and distribution operations.
However, like in the United States, in most of such countries there are also
smaller, independent, motion picture production and distribution companies.
Foreign distribution companies not only distribute motion pictures produced
in their countries or regions but also films licensed or sub-licensed from
United States production companies and distributors. In addition, film
companies in many foreign countries produce films not only for local
distribution, but also for export to other countries, including the United
States. While most foreign language films distributed in the United States
are released on a limited basis, some foreign language films, such as LIKE
WATER FOR CHOCOLATE, IL POSTINO (the Postman) and ANTONIA'S LINE, and foreign
English-language films, such as THE ENGLISH PATIENT, SHINE, FOUR WEDDINGS AND
A FUNERAL, CROCODILE DUNDEE and THE CRYING GAME appeal to a wider U.S.
audience.
MOTION PICTURE PRODUCTION
The production of a motion picture begins with the screenplay adaptation of
a popular novel or other literary work acquired by the producer or the
development of an original screenplay having its genesis in a story line or
scenario conceived by a writer and acquired by the producer. In the development
phase, the producer typically seeks production financing and tentative
commitments from a director, the principal cast members and other creative
personnel. A proposed production schedule and budget are also prepared during
this phase. Upon completing the screenplay and arranging financing commitments,
pre-production of the motion picture begins. In this phase, the producer engages
creative personnel to the extent not previously committed; finalizes the filming
schedule and production budget; obtains insurance and secures completion
guaranties, if necessary; establishes filming locations and secures any
necessary studio facilities and stages; and prepares for the start of actual
filming. Principal photography (the actual filming of the screenplay) generally
extends from seven to 16 weeks for a film produced by a major studio and often
for a significantly shorter period (sometimes as little as four to eight weeks)
for low budget films and films produced by independent production companies,
depending in each case upon such factors as budget, location, weather and
complications inherent to the screenplay. Following completion of principal
photography (the post-production phase), the motion picture is edited, opticals,
dialogue, music and any special effects are added, and voice, effects and music
sound tracks and pictures are synchronized. This results in the production of a
negative from which release prints of the motion picture are made.
Production costs consist of acquiring or developing the screenplay,
compensation of creative and other production personnel, film studio and
location rentals, equipment rentals, film stock and other costs incurred in
principal photography, and post-production costs, including the creation of
special effects and music. Distribution expenses, which consist primarily of the
costs of advertising and preparing release prints, are not included in direct
production costs. The major studios generally fund production costs from cash
flow generated by motion pictures and related activities or, in some cases, from
unrelated businesses or through off-balance sheet methods. Substantial overhead
costs, consisting largely of salaries and related costs of the production staff
and physical facilities maintained by the major studios, also must be funded.
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Independent production companies generally avoid incurring overhead costs as
substantial as those incurred by the major studios by hiring creative and other
production personnel and retaining the other elements required for
pre-production, principal photography and post-production activities on a
picture-by-picture basis. As a result, these companies do not own sound stages
and related production facilities, and, accordingly, do not have the fixed
payroll, general administrative and other expenses resulting from ownership and
operation of a studio. Independent production companies may also finance their
production activities on a picture-by-picture basis. Sources of funds for
independent production companies include bank loans, "pre-licensing" of
distribution rights, foreign government subsidies, equity offerings and joint
ventures. Independent production companies generally attempt to obtain all or a
substantial portion of their financing of a motion picture prior to commencement
of principal photography, at which point substantial production costs begin to
be incurred and require payment.
As part of obtaining financing for its films, the independent production
company is often required by its lenders and distributors who advance production
funds to obtain a completion bond or production completion insurance from an
acceptable completion guarantor which names the lenders and applicable
distributors as beneficiaries. The guarantor assures the completion of the
particular motion picture on a certain date, and if the motion picture cannot be
completed for the agreed upon budgeted cost, the completion guarantor is
obligated to pay the additional costs necessary to complete the picture by the
agreed upon delivery date. If the completion guarantor fails to timely complete
and deliver such motion picture on or before the agreed upon delivery date, the
completion guarantor is required to pay the lenders and distributor, if
applicable, an amount equal to the aggregate amount the lenders and distributor
have loaned or advanced to the independent producer.
In connection with the production and distribution of a motion picture,
major studios and independent production companies generally grant contractual
rights to actors, directors, screenwriters, owners of rights and other creative
and financial contributors to share in net revenues from a particular motion
picture. Except for the most sought-after talent, these third-party
participations are generally payable after all distribution fees, marketing
expenses, direct production costs and financing costs are recouped in full.
Major studios and independent film companies in the United States typically
incur obligations to pay residuals to various guilds and unions including the
Screen Actors Guild, the Directors Guild of America and the Writers Guild of
America. Residuals are payments required to be made by the motion picture
producer to the various guilds and unions (on a picture-by-picture basis)
arising from the exploitation of a motion picture in markets other than the
primary intended market for such picture. Residuals are calculated as a
percentage of the gross revenues derived from the exploitation of the picture in
these ancillary markets. The guilds and unions typically obtain a security
interest in all rights of the producer in the motion picture being exploited to
ensure satisfaction of the residuals obligation. This security interest is
usually subordinate to the security interest of the lenders financing the
production cost of the motion picture and the completion bond company
guaranteeing completion of the motion picture. Under a producer's agreement with
the guilds and unions, the producer of a motion picture may transfer the
obligation to pay the residuals to a distributor if the distributor assumes the
obligation to make the residual payment. If the distributor does not assume
those obligations, the producer is obligated to pay those residuals.
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MOTION PICTURE DISTRIBUTION
GENERAL. Distribution of a motion picture involves domestic and
international licensing of the picture for (a) theatrical exhibition, (b)
videocassettes and laser discs (and, now, digital video discs), (c) presentation
on television, including pay-per-view, basic and premium cable, network,
syndication, or satellite, (d) marketing of the other rights in the picture and
underlying literary property, which may include books, CD-ROM, merchandising and
soundtracks, and (e) non-theatrical exhibition, which includes airlines, hotels
and armed forces facilities. Although releases by the major studios typically
are licensed and fully exploited in all of the foregoing media, often films
produced or distributed by independent film companies are not exploited in all
such media. For example, certain films may not receive theatrical exhibition in
the United States or various other territories and may instead go straight to
home video release or instead first "premiere" or otherwise be exploited on a
pay television service (in certain circumstances followed by a theatrical
release).
Production companies with distribution divisions, such as the major
studios, typically distribute their motion pictures themselves. Production
companies without distribution divisions may retain the services of sales agents
or distributors to exploit the motion pictures produced by them in various media
and territories, or in all media and territories. Distribution companies may
directly exploit distribution rights licensed to, or otherwise acquired by them,
for example, by booking motion pictures with theatrical exhibitors or selling
videocassettes to video retailers. Alternatively, they may grant sub-licenses to
domestic or foreign sub-distributors to exploit completed motion pictures.
ACQUISITION OF DISTRIBUTION RIGHTS. A sales agent does not generally
acquire distribution rights from the producer or other owner of rights in the
motion picture, but instead acts as an agent on behalf of the producer or rights
owner to license distribution rights to such motion picture to distributors on
behalf of the producer or rights owner in exchange for a sales agency fee,
typically computed as a percentage of gross revenues from licenses obtained by
the sales agent. A distributor generally licenses and takes a grant of
distribution rights from the producer or other rights owner of the motion
picture for a specified term in a particular territory or territories and media,
generally in exchange for a distribution fee calculated as a percentage of gross
revenues generated by exploitation of the motion picture by the distributor. The
distributor often agrees to pay the producer of the motion picture a certain
advance or minimum guarantee upon the delivery of the completed motion picture,
which amount is to be recouped by the distributor out of revenues generated from
the exploitation of the motion picture in particular media or territories. In
general, after receiving its ongoing distribution fee and recouping the advance
or minimum guarantee plus its distribution costs, the distributor pays the
remainder of revenues in excess of an ongoing distribution fee to the producer
of such motion picture. Obtaining license agreements with a distributor or
distributors prior to completion of a motion picture and which provide for
payment of a minimum guarantee (often referred to as the "pre-licensing" or
"pre-selling" of film rights), may enable the producer to obtain financing for
its project by using the contractual commitment of the distributor to pay the
advance or minimum guarantee as collateral to borrow production funding. In some
circumstances, the distributor is entitled to recoup any unrecouped costs and
advances from a film licensed to such distributor from the revenues from another
film or films also licensed to the distributor, commonly known as "cross
collateralizing".
In addition to obtaining distribution rights in a motion picture for a
limited duration, a distributor may also acquire all or a portion of the
copyright in such motion picture or license certain distribution rights in
perpetuity. Both major studios and independent film companies often acquire
motion pictures for distribution through a customary industry arrangement known
as a "negative pickup," under which the studio or independent film company
agrees to pay a specified minimum guaranteed amount to an
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independent production company in exchange for all rights to the film upon
completion of production and delivery of the film. The independent production
company normally finances production of the motion picture pursuant to financing
arrangements with banks and other lenders in which the lender receives an
assignment of the production company's right to payment of the minimum guarantee
and is granted a security interest in the film and in the production company's
rights under its arrangement with the studio or independent film company. When
the major studio or independent film company "picks up" the completed motion
picture, it pays the minimum guarantee or assumes the production financing
indebtedness incurred by the production company in connection with the film. In
addition, the independent production company is paid a production fee and
generally is granted a participation in net revenues from distribution of the
motion picture.
THE DISTRIBUTION CYCLE. Concurrently with their release in the United
States, motion pictures generally are released in Canada and may also be
released in one or more other international markets. As a general matter, a
motion picture which is released theatrically is typically available for
distribution in other media during its initial distribution cycle as follows:
MARKETPLACE (MEDIA) NUMBER OF MONTHS FOLLOWING INITIAL
DOMESTIC THEATRICAL RELEASE
Domestic theatrical --
International theatrical --
Domestic home video (initial release) 4-6 months
Domestic pay-per-view 6-9 months
International video (initial release) 6-12 months
Domestic pay television 12-15 months
International television (pay or free) 18-24 months
Domestic free television* 30-33 months
- --------------------------------------
* Includes network, barter syndication, syndication and basic cable.
Films often remain in distribution for varying periods of time. For
example, motion pictures which are released theatrically typically play in
theaters for several weeks following their initial release (for major
studios) or, at times, including for instance in the case of certain
successful independent "art-house" films which are released on a limited
basis, for several months. Once released on videocassette, a motion picture
may remain available for many years. Similarly a motion picture can be
licensed to various forms of television for many years after its first
release. The release periods set forth above represent standard "holdback
periods". A holdback period with respect to a certain media in which the
motion picture is being released represents a stipulated period of time
during which release of the motion picture in other media is prevented to
allow the motion picture to maximize its value in the media in which it is
being released. Holdback periods are often specifically negotiated with
various distributors on a media-by-media basis; however the periods set forth
above represent the Company's estimate of typical holdback periods in the
motion picture industry today .
9
<PAGE>
In general, if a film is not released theatrically in the United States and
instead is released straight to domestic home video, television exploitation
generally does not commence until six to eight months after such video release.
Thereafter, the same general release patterns indicated in the table above
typically apply. If a film "premieres" on United States pay television (which
generally means that no other distribution of the film in the United States has
occurred), the pay television service typically is licensed a four to six week
exclusive airing period. The license will generally provide for limited airings
(sometimes defined as five to eight "exhibition days" with multiple airings
permitted on each "exhibition day"). The provisions of such license also usually
provide for the pay television service to receive subsequent airing periods
following a period (typically a 10 to 12-month period) in which the film can be
released on video or sometimes even theatrically and a period when the film may
be broadcast on free television.
A substantial portion of a film's ultimate revenues are generated in a
film's initial distribution cycle (generally the first five years after the
film's initial domestic theatrical release), which typically includes
theatrical, video, and pay and free television. Commercially successful motion
pictures, however, may continue to generate revenues after the film's initial
distribution cycle from the relicensing of distribution rights in certain media,
including television and home video, and from the licensing of distribution
rights with respect to new media and technologies and in emerging markets.
Although there has been a substantial increase over the past fifteen years in
the revenues generated from the licensing of rights in ancillary (other than
domestic theatrical) media, such as home video, cable and pay-per-view, the
theatrical success of a motion picture remains a significant factor in
generating revenues in foreign markets and in other media such as television and
videocassettes. For example, despite the expansion in the market for
videocassettes for home use (which has slowed recently), retail video stores
have been increasingly purchasing fewer copies of videocassettes of motion
pictures which have not been theatrically released, and purchasing more copies
of major studio theatrical hits.
THEATRICAL. The theatrical distribution of a motion picture, whether in the
United States or internationally, involves the licensing and booking of the
motion picture to theatrical exhibitors (movie theatres), the promotion of the
picture through advertising and publicity campaigns and the manufacture of
release prints from the film negative. Expenditures on these activities,
particularly on promotion and advertising, are often substantial and may have a
significant impact on the ultimate success of the film's theatrical release. In
addition, such expenditures can vary significantly, depending upon the markets
and regions where the film is distributed, the media used to promote the film
(newspaper, television and radio), the number of screens on which the motion
picture is to be exhibited and the ability to exhibit motion pictures during
peak exhibition seasons. With a release by a major studio, the vast majority of
these costs (primarily advertising costs) are incurred prior to the first
weekend of the film's domestic theatrical release, so there is not necessarily a
correlation between these costs and the film's ultimate box office performance.
In addition, the ability to distribute a picture during peak exhibition seasons,
including the summer months and the Christmas holidays, and in the most popular
theaters may affect the theatrical success of a picture. Films distributed
theatrically by an independent film company are sometimes released on a more
limited basis which in some circumstances allows the distributor to defer
certain marketing costs until it is able to assess the initial public acceptance
of the film.
While arrangements for the exhibition of a film vary greatly, there are
certain economic relationships generally applicable to theatrical distribution.
Theater owners (the "exhibitors") retain a portion of the admissions paid at the
box office ("gross box office receipts"). The share of the gross box office
receipts retained by an exhibitor generally includes a fixed amount per week (in
part to cover overhead), plus a percentage of receipts that escalates over time.
Although these percentages vary widely, in the Company's general experience, an
exhibitor's share of a particular film's revenues will generally be
approximately 60% to 65% of gross box office receipts. The balance ("gross film
rentals") is remitted to
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<PAGE>
the distributor. The distributor then retains a distribution fee (typically 30-
35%) from the gross film rentals and recoups the costs incurred in distributing
the film, which consist primarily of the cost of marketing and advertising and
the cost of release prints for exhibition. The balance of gross film rentals,
after deducting distribution fees and distribution costs recouped by the
distributors ("net film rentals"), is then applied against the recoupment of any
advance paid for the distribution rights (with interest thereon) and the balance
is remitted to the producer or other rights owner of the film.
HOME VIDEO. A motion picture released theatrically typically becomes
available for videocassette distribution within four to six months after its
initial domestic theatrical release. As indicated above, certain films are not
initially released theatrically but may instead be initially released to home
video. This has become less prevalent recently than in the 1980's given the
preference of retail video stores for theatrical releases. Home video
distribution consists of the promotion and sale of videocassettes to local,
regional and national video retailers which rent or sell videocassettes to
consumers primarily for home viewing. Most films are initially made available in
videocassette form at a wholesale price of approximately $50 to $75 per
videocassette and are sold at that price primarily to wholesalers who then sell
to video rental stores at a price of approximately $75 to $105 per
videocassette, which rent the cassettes to consumers. Typically, owners of films
do not share in rental income. Following the initial marketing period, selected
films may be remarketed at a wholesale price of $10 to $15 or less for sale to
consumers. These "sell-through" arrangements are used most often with films that
will appeal to a broad marketplace or to children. A few major releases with
broad appeal may be initially offered by a film company at a price designed for
sell-through rather than rental when it is believed that the ownership demand by
consumers will result in a sufficient level of sales to justify the reduced
margin on each cassette sold. Home video arrangements in international
territories are similar to those in domestic territories except that the
wholesale prices may differ.
TELEVISION. Television rights for films initially released theatrically
are, if such films have broad appeal, generally licensed first to pay-per-view
for an exhibition period within six to nine months following initial domestic
theatrical release, then to pay television approximately 12 to 15 months after
initial domestic theatrical release, thereafter in certain cases to network
television for an exhibition period, and then to pay television again. These
films are then syndicated to either independent stations or basic cable outlets.
Pay-per-view allows subscribers to pay for individual programs. Pay television
allows cable television subscribers to view such services as HBO/Cinemax,
Showtime/The Movie Channel, Encore Media Services or others offered by their
cable system operators for a monthly subscription fee. Pay-per-view and pay
television is now delivered not only by cable, but also by satellite
transmission, and films are generally licensed in both such media. Certain films
which are not initially released in the domestic theatrical market may
"premiere" instead on pay television followed in some circumstances by
theatrical release. Groups of motion pictures are often packaged and licensed as
a group for exhibition on television over a period of time and, therefore,
revenues from these television licensing "packages" may be received over a
period that extends beyond five years from the initial domestic theatrical
release of a particular film. Motion pictures are also licensed and "packaged"
by producers and distributors for television broadcast in international markets
by government owned or privately owned television studios and networks. Pay
television is less developed outside the United States, but is experiencing
significant international growth. The prominent foreign pay television services
include Canal+, Premiere, STAR TV, British Sky Broadcasting and the
international operations of several U.S. cable services including HBO, the
Disney Channel and Turner Broadcasting.
NON-THEATRICAL AND OTHER RIGHTS. Films may be licensed for use by airlines,
schools, public libraries, community groups, the military, correctional
facilities, ships at sea and others. Music contained in a film may be licensed
for sound recording, public performance and sheet music publication. Rights in
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<PAGE>
motion pictures may be licensed to merchandisers for the manufacture of products
such as toys, T-shirts, posters and other merchandise. Rights may also be
licensed to create novels from a screenplay and to generate other related book
publications, as well as interactive games on such platforms as CD-ROM, CD-I or
other proprietary platforms.
MOTION PICTURE DISTRIBUTION BY THE COMPANY
INTERNATIONAL DISTRIBUTION. Management of the Company has considerable
expertise in international distribution. Ellen Dinerman Little and Robert B.
Little, the senior executive officers of the Company and founders of its
operations, have substantial experience in the business of licensing motion
pictures for distribution outside the United States and have been active in
international motion picture sales since 1975. Over the past 22 years, they have
developed, through their foreign sales activities, relationships with
distributors in most significant territories. In addition, the Company is a
founding member of the American Film Marketing Association which sponsors the
American Film Market, one of the three major annual international film markets
attended by significant international and regional distributors. The Company
generally participates annually with a sales office at all three major film
markets (the American Film Market, the Cannes Film Festival and MIFED), as well
as the major television (NAPTE, MIP, MIPCOM) and video (VSDA) markets. The
Company, may also, from time to time, engage independent representatives to
assist the Company in acquiring and/or licensing motion picture rights.
With respect to international territories, the Company licenses
distribution rights in various media (such as theatrical, video, pay television,
free television, satellite and other rights) to foreign sub-distributors on
either an individual rights basis or grouped in various combinations of rights
(which sometimes includes rights in all media). These rights are licensed by the
Company to numerous sub-distributors in international territories or regions
either on a picture-by-picture basis or, in certain circumstances, with respect
to a number of motion pictures pursuant to output arrangements. Currently, the
most important international territories for the Company are Australia, the
Benelux countries, Brazil, Canada, France, Germany, Italy, Japan, South Korea,
Scandinavia, Spain and the United Kingdom. See Note 11 of Notes to the
Company's Consolidated Financial Statements for certain geographic information
regarding the Company's foreign distribution activities.
The terms of the Company's license agreements with foreign sub-distributors
vary depending upon the territory and media involved and whether the agreement
relates to a single motion picture or multiple motion pictures. Most of the
Company's license agreements provide that the Company will receive a minimum
guarantee from the foreign sub-distributor with all or a majority of such
minimum guarantee paid prior to, or upon delivery of, the film to the
sub-distributor for release in the particular territory. The remainder of any
unpaid minimum guarantee is generally payable at specified intervals after
delivery of the film to the sub-distributor. The minimum guarantee is recouped
by the sub-distributor out of the revenues generated from exploitation of the
picture in such territory. The foreign sub-distributor retains a negotiated
distribution fee (generally measured as a percentage of the gross revenues
generated from its distribution of the motion picture), recoups its distribution
expenses and the minimum guarantee and ultimately (after recoupment by the
sub-distributor of the minimum guarantee and recovery of its distribution
expenses) remits to the Company the remainder of any receipts in excess of the
distributor's ongoing distribution fee. The Company must rely on the foreign
sub-distributor's ability to successfully exploit the film in order to receive
any proceeds in excess of the minimum guarantee.
In certain situations, the Company does not receive a minimum guarantee
from the foreign sub-distributor and instead negotiates terms which usually
result, in effect, in an allocation of gross revenues between the
sub-distributor and the Company. Typically the terms of such an arrangement
provide
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<PAGE>
for the sub-distributor to retain an ongoing distribution fee (calculated as a
percentage of gross receipts of the sub-distributor in the territory), recoup
its expenses and pay remaining receipts in excess of the ongoing distribution
fee to the Company. Alternatively, such as often with respect to video rights,
the terms may provide for a royalty to be paid to the Company calculated as a
percentage of the gross receipts of the sub-distributor from exploitation of the
video rights (without deduction for the sub-distributor's distribution
expenses).
The Company has entered into several output arrangements with local foreign
distributors in certain territories whereby the foreign sub-distributor receives
the right, typically for a specified period and/or a specified number of motion
pictures, to distribute in a particular territory, in designated media, motion
pictures released by the Company. These output arrangements include agreements
with Medusa Communications Ltd. in the United Kingdom and Ireland, an agreement
with Bealestreet Pictures International B.V. in South Africa and certain
adjoining territories, an agreement with Cinepix Film Properties Inc. in Canada,
an agreement with Polygram Pty Limited in Australia and New Zealand and an
agreement with RCV2001 in Belgium, The Netherlands, Luxembourg and certain ex-
colonies of Belgium and The Netherlands. In some circumstances, a minimum
guarantee is paid by the foreign sub-distributor to the Company; generally on a
picture-by-picture basis with each minimum guarantee having been either
pre-negotiated or computed as a stipulated percentage of the production cost or
acquisition cost of each picture. The Company enters into output arrangements
with foreign sub-distributors which the Company believes have the ability to
make the recurring payments. Nevertheless, in certain instances foreign
sub-distributors encounter financial difficulties that may preclude timely
payment, and as a result the Company may be forced to terminate or renegotiate
output agreements. See also "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Exchange Rate Considerations"
for certain additional considerations regarding the Company's international
distribution activities.
DOMESTIC DISTRIBUTION. The Company has increasingly obtained domestic
distribution rights to films. During 1996, various distribution rights to
approximately eighteen films, including various domestic distribution rights in
twelve films, became available for the first time to the Company for licensing
or distribution. The Company exploits its domestic distribution rights in a
variety of ways. In 1993, the Company's domestic theatrical releasing operation,
First Look Pictures, was established. Not all of the films distributed by the
Company, however, receive domestic theatrical release by First Look Pictures or
otherwise. Some films are licensed by the Company to domestic sub-distributors
for release initially on video or, in certain circumstances, the Company
licenses initially to the pay television services for "premiere" on pay
television (cable and/or satellite). Of the twelve films which first became
available to the Company in 1996 for licensing or distribution and in which the
Company controls various domestic distribution rights, eight were (or are
currently intended to be) released theatrically (all, but one, by First Look
Pictures), two premiered (or are intended to premiere) on pay television and two
were (or are intended to be) released directly to video.
In March 1996, the Company entered into an output arrangement for domestic
video rights with BMG Video, an affiliate of the international entertainment
company Bertelsmann Music Group. This arrangement covers, subject to certain
conditions, twelve specified films, including ANTONIA'S LINE and INFINITY, and
also generally any film delivered to the Company prior to December 31, 1996 (or
December 31, 1997 in the event the Company and BMG Video mutually elect to renew
the term for an additional year). Films for which the Company sells all domestic
rights to a single company may be excluded from this arrangement at the
Company's election. BMG Video has released seven motion pictures under this
arrangement through March 15, 1997, ONE GOOD TURN, ANTONIA'S LINE, SHAMELESS
a.k.a. MAD DOGS AND ENGLISHMEN, FIST OF THE NORTHSTAR, INFINITY, THE BIG SQUEEZE
and DOWNHILL WILLIE. Under this agreement,
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<PAGE>
BMG Video receives exclusive video distribution rights in the United States and
certain related territories, including Puerto Rico and the U.S. Virgin Islands,
with respect to each film for a five-year period following video release. BMG
Video has paid the Company an overall advance, and has agreed to provide minimum
guarantees with respect to each film. Under this arrangement, BMG Video deducts
a varying distribution fee based upon a negotiated percentage of its gross
receipts from exploitation of the video rights of each film, recoups its
distribution costs and the minimum guarantee, and remits any remaining receipts
to the Company in excess of BMG Video's ongoing distribution fee. As of March
31, 1997, the output arrangement with BMG has not been extended although the
parties are in discussions with respect thereto. In the event this output
arrangement is not extended, management of the Company will seek to obtain
another domestic video output arrangement, although there can be no assurance
that any new arrangement (or an extension of the BMG Agreement), if obtained,
will be on terms similar to the current arrangement with BMG Video.
In addition to its output arrangement with BMG Video, the Company licenses
distribution rights directly to pay television services including HBO, Showtime
and Encore, as well as smaller services, including pay-per-view services.
Although the Company has not engaged in significant licensing or syndication of
domestic free television rights except as part of a license of rights in
multiple media, it controls these rights to a significant portion of the films
in its library. In those circumstances where the Company has licensed such
television rights separately from other rights, the Company has typically
licensed these rights under terms which provide for no minimum guarantee to be
paid to the Company, but for all revenues to be paid to the Company in excess of
a distribution fee for the sub-distributor.
In some cases, the Company will license the right to distribute a film
domestically in multiple media to a major studio, a division of a major studio,
or an independent distributor. Although the terms of such licenses vary,
typically the Company will be paid a minimum guarantee. The sub-distributor then
retains a distribution fee (measured as a percentage of the gross receipts
received by the sub-distributor from exploitation of the film), recoups its
distribution costs and the advance paid to the Company, and ultimately remits to
the Company the remainder of any receipts in excess of an ongoing distribution
fee.
The Company does not always receive a minimum guarantee from the licensing
of distribution rights to foreign and domestic sub-distributors, thus increasing
the Company's reliance on the actual financial performance of the film being
distributed. In some circumstances, whether the Company receives a minimum
guarantee depends upon the media. For example, the Company is increasingly
(particularly with respect to motion pictures which have not been theatrically
released) entering into video distribution arrangements with sub-distributors
where no minimum guarantee is paid to the Company. Even if the Company does
obtain minimum guarantees from its sub-distributors, such minimum guarantees do
not assure the profitability of the Company's motion pictures or the Company's
operations. Additional revenues may be necessary from distribution of a motion
picture in order to enable the Company to recoup any investment in such motion
picture in excess of the aggregate minimum guarantees obtained from such
sub-distributors, pay for distribution costs, pay for ongoing acquisition and
development of other motion pictures by the Company and cover general overhead.
While the pre-licensing of distribution rights to sub-distributors in exchange
for minimum guarantees may reduce some of the risk to the Company from
unsuccessful films, it may also result in the Company receiving lower revenues
with respect to highly successful films than if such licensing of distribution
rights were made upon different terms that, for example, might have provided
lower minimum guarantees to the Company but also provided a lower distribution
fee (I.E., a lower percentage of gross revenues) to the sub-distributor.
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FIRST LOOK PICTURES. The Company, from its Los Angeles offices, directly
distributes some of the motion pictures for which it controls domestic rights to
theaters throughout the United States under the name First Look Pictures.
Although some of First Look Pictures' upcoming releases are intended to appeal
to a wide audience, many of the thirteen First Look Pictures releases to date
have been foreign language films, "art-house" films and other specialized motion
pictures generally characterized by underlying literary and artistic elements
intended to appeal primarily to sophisticated audiences.
Films distributed theatrically in the United States by First Look Pictures
have been typically released on a limited basis (initially less than 100
screens) and in selected cities, expanding to new cities or regions based upon
the performance of the film. In some circumstances, films are released in new
cities as prints become available from cities where the engagement has closed,
reducing the number of prints needed and the aggregate cost of such prints. In
select circumstances, the Company may release appropriate films with more mass
market appeal on a wide release basis either through First Look Pictures or,
more likely, by licensing such film to a domestic distributor with more
significant financial resources.
The cost to First Look Pictures to distribute a specialized motion picture
or "art-house" film on a limited-release basis has in the past typically ranged
from approximately $100,000 to $2,000,000, although in the future these costs
may exceed such range. Expenditures for prints, marketing and advertising
represent a substantial portion of the costs of releasing a film. Costs for
prints, marketing and advertising for the four films initially released by First
Look Pictures during 1996 ranged from approximately $350,000 to $1,450,000. In
connection with the acquisition of domestic theatrical rights to a film, the
Company sometimes commits to spend a minimum amount for prints and advertising
costs. These costs are in addition to the direct production or acquisition
costs and other distribution expenses of such films. Generally, in addition to
receiving a distribution fee, the Company is entitled to recoup its prints and
advertising expenditures. Although First Look Pictures may at times utilize
standard broadcast television advertising, First Look Pictures typically
supports its limited releases with local newspaper and some cable television
advertising. First Look Pictures also relies on national publicity, such as
reviews or articles in national publications and appearances of the film's
principal artists on radio and television talk shows. In contrast, distributors
of national, wide release films must rely primarily on national advertising
campaigns, including substantial television advertising, to attract
theatergoers.
The success of a domestic theatrical release by First Look Pictures can be
affected by a number of factors outside of its control, including audience and
critical acceptance, availability of motion picture screens and the success of
competing films in release (see "Competition" below), awards won by First Look
Pictures' releases or that of its competition, inclement weather, and competing
televised events (such as sporting and news events). As a result of the
foregoing, and depending upon audience acceptance of the films distributed
through First Look Pictures, the Company expects that, in many cases, it will
not recoup all of its distribution expenses or derive any profit solely from
domestic theatrical distribution of First Look Pictures' releases, without
taking into account revenues derived from such films in ancillary media and
international markets. In addition, there can be no assurance that total
revenues from any First Look Pictures' release will be sufficient to allow the
Company to recoup all of its costs or to realize a profit on such film.
Management of the Company, however, believes that it benefits in several
ways by theatrically distributing films in the United States directly through
First Look Pictures. The domestic theatrical success of a motion picture can be
a significant factor in generating revenues from distribution of the motion
picture in ancillary media and foreign markets. For example, retail video stores
have been increasingly purchasing fewer copies of videocassettes of motion
pictures that have not been theatrically released. In addition, the Company
believes it is generally able to obtain more favorable distribution terms in its
agreements with
15
<PAGE>
foreign sub-distributors and domestic sub-distributors in other media with
respect to motion pictures that have been theatrically released in the United
States. Management of the Company believes that, in some cases, its First Look
Pictures operations enable the Company to achieve domestic theatrical release
for films that might not otherwise be released in U.S. theaters. The Company
also believes that by theatrically releasing films itself in the United States,
it can manage, often more effectively than an unaffiliated distributor, the
timing and marketing of a film's theatrical release. As a result, even if the
Company does not recoup all of its marketing, advertising and print costs from a
First Look Pictures' release, the Company believes it can often obtain greater
overall revenues and achieve an overall profit on such films through increased
revenues in ancillary and foreign markets.
From January 1, 1996 through March 15, 1997, First Look Pictures released
the six motion pictures listed in the following chart. First Look Pictures
currently anticipates releasing approximately ten additional films in 1997
including those listed below under "Upcoming Releases".
16
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<TABLE>
<CAPTION>
RELEASED
TITLE MAJOR CREATIVE ELEMENTS STORYLINE RELEASE DATE AND
- ----- ----------------------- --------- DOMESTIC BOX OFFICE
RECEIPTS
--------
<S> <C> <C> <C>
ANTONIA'S LINE Writer/Director: Marleen Gorris (MRS. DALLOWAY) A celebration of the universal power Released in February 1996
Cast: Willeke van Ammelrooy. of women and family ties. Winner of with domestic box office
the 1995 Academy Award for Best receipts of approximately
Foreign Language Film. $3,843,242.
THE BIG Writer/Director: Marcus De Leon In this modern-day fable, a devilishly Released in September 1996
SQUEEZE Cast: Lara Flynn Boyle (THREESOME, "Twin clever scam twists and turns through with domestic box office
Peaks"), Danny Nucci (THE ROCK, ERASER), Peter love, lust, jealously and betrayal receipts of approximately
Dobson (THE FRIGHTENERS). until destiny plays its hand. $35,596.
INFINITY Director: Matthew Broderick A love story about the brilliant young Released in October 1996
Cast: Matthew Broderick (ADDICTED TO LOVE, THE scientist, Richard Feynman and the with domestic box office
CABLE GUY, FERRIS BUELLER'S DAY OFF and girl of his dreams, Arline Greenbaum, receipts of approximately
Broadway's How to Succeed in Business Without set against the backdrop of World War $180,834.
Really Trying), Patricia Arquette (BEYOND II and his work on the Atomic bomb.
RANGOON, TRUE ROMANCE, FLIRTING WITH DISASTER) Feynman won the Nobel Prize for
Physics in 1965.
BITTER SUGAR Co-Writer/Director: Leon Ichaso (SUGAR HILL) Living in the volatile, modern-day Released in October 1996
(AZUCAR Cast: Rene Lavan ("One Life To Live", TRUE Havana, an idealistic honor student with domestic box office
AMARGA) LIES), Mayte Vilan (THE SPECIALIST). falls in love with a beautiful dancer receipts through March 15,
with radically opposite political 1997 of approximately
views. $430,669.
JOHNS Writer/Director: Scott Silver A dark comic drama about two hustlers Released on January 31,
Cast: Lukas Haas (MARS ATTACKS!, EVERYONE SAYS working the dirty, sun-scorched 1997 with domestic box
I LOVE YOU, WITNESS) and David Arquette (SCREAM, pavement of Hollywood's Santa Monica office receipts through
BEAUTIFUL GIRLS, WILD BILL, BUFFY THE VAMPIRE Boulevard. March 15, 1997 of
SLAYER) approximately $148,899.
JERUSALEM Director: Bille August When a charismatic and messianic Released on March 7, 1997,
Cast: Maria Bonnevie, Ulf Friberg, Olympia preacher arrives in a small Swedish with domestic box office
Dukakis (MIGHTY APHRODITE, STEEL MAGNOLIAS) and village, the lives of two young lovers receipts through March 15,
Max von Sydow (PELLE THE CONQUEROR) are torn apart. Based on the novel by 1997 of approximately
Nobel Prize winner, Selma Lagerlof. $18,016.
</TABLE>
<TABLE>
<CAPTION>
UPCOMING RELEASES
TITLE MAJOR CREATIVE ELEMENTS STORYLINE ESTIMATED DOMESTIC
- ----- ----------------------- --------- THEATRICAL RELEASE DATE
-----------------------
<S> <C> <C> <C>
BROTHER'S KISS Writer/Director: Seth Zvi Rosenfeld Headstrong and hot-tempered, a man Spring 1997
Cast: Nick Chinlund (ERASER), Michael Raynor down on his luck falls in with the
(FEDERAL HILL), Michael Rapaport (METRO, wrong people. His brother, an NYPD
BEAUTIFUL GIRLS) John Leguizamo (EXECUTIVE officer, is torn between loyalty to
DECISION, TO WONG FOO, THANKS FOR EVERYTHING, his uniform and the person who
JULIE NEWMAR), Cathy Moriarty (CASPER, RAGING protected him as a kid on the tough
BULL), Rosie Perez (WHITE MEN CAN'T JUMP), streets of NY.
Marisa Tomei (UNHOOK THE STARS, MY COUSIN
VINNY).
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
TITLE MAJOR CREATIVE ELEMENTS STORYLINE ESTIMATED DOMESTIC
- ----- ----------------------- --------- THEATRICAL RELEASE DATE
-----------------------
<S> <C> <C> <C>
THE DESIGNATED Writer: Wallace Shawn (VANYA ON 42ND STREET, Straight from the National Theatre in Spring 1997
MOURNER MY DINNER WITH ANDRE) London and told completely in direct
Director: David Hare (STRAPLESS, PARIS BY address to the camera, the film
NIGHT) captures a three way conversation in
Cast: Mike Nichols (acclaimed director of THE which the characters (a snobbish
GRADUATE, THE BIRDCAGE and POSTCARDS FROM THE father, pretentious daughter and her
EDGE), Miranda Richardson (ENCHANTED APRIL, THE middlebrow husband) debate the
CRYING GAME, DAMAGE). emotional and intellectual bankruptcy
of high culture in the modern world.
THE OTHER SIDE Co-Writer/Director: Berit Nesheim (BEYOND THE A story of a young woman coming of Spring 1997
OF SUNDAY SKY, FRIDA - STRAIGHT FROM THE HEART) age in the parochial oppression of a
Cast: Marie Theisen, Bjorn Sundquist, Hildegun small Norwegian town where almost
everything is forbidden - especially Riise
the lure of sex, boys and
rock'n'roll.
DIFFERENT FOR Director: Richard Spence (YOU, ME AND MARLEY); A romantic gender-bender about two Summer 1997
GIRLS Cast: Rupert Graves (THE MADNESS OF KING young school boys, Karl and Paul, who
GEORGE, DAMAGE, A ROOM WITH A VIEW) and Steven meet again, accidentally, twenty
Mackintosh (GENTLEMEN DON'T EAT POETS, MEMPHIS years later. Paul does not recognize
BELLE). Karl who is now an attractive
transsexual named Kim.
ALIVE AND Director: Nancy Meckler (SISTER MY SISTER) A tender, funny and passionate love Summer 1997
KICKING (a/k/a Cast: Jason Flemyng (STEALING BEAUTY, ROB story of a talented young dancer
INDIAN SUMMER) ROY), Antony Sher (Broadway's "Stanley") living positively with AIDS.
MRS. DALLOWAY Director: Marleen Gorris (ANTONIA'S LINE) On one summer's day in London, in Summer/Fall 1997
Cast: Vanessa Redgrave (MISSION IMPOSSIBLE, 1923, Clarissa Dalloway remembers
SMILLA'S SENSE OF SNOW), Rupert Graves (THE that summer in the country, in 1890,
MADNESS OF KING GEORGE, A ROOM WITH A VIEW), when she was young and beautiful and
Natascha McElhone (THE DEVIL'S OWN, SURVIVING very much courted.
PICASSO)
SLAVES TO THE Director: Kristine Peterson Set against the Seattle "grunge rock" Fall/Winter 1997
UNDERGROUND Cast: Molly Gross, Marisa Ryan ("Major Dad") scene, a young girl named Shelly is
growing up in a confused world.
</TABLE>
There can be no assurance that any of the pictures scheduled for release by
First Look Pictures in 1997 or thereafter will actually be released or released
in accordance with the anticipated schedule set forth above. The motion picture
business is subject to numerous uncertainties, including financing requirements,
personnel availability and the release schedule of competing films. In addition,
there can be no assurance that the motion pictures scheduled for release but
which are not yet completed will necessarily involve all of the creative
elements and artists listed above.
ACQUISITION OF RIGHTS BY THE COMPANY, PRODUCTION AND FINANCING
The Company acquires distribution rights from a large variety of
independent production companies and producers. The Company generally acquires
distribution rights to single films, as compared to acquiring films pursuant to
multi-picture acquisition agreements with independent film companies or
producers. The Company commits to acquire rights to motion pictures at various
stages in the completion of a film, from films completed and ready for release
to developed (or undeveloped) film projects for which the Company may arrange
financing and/or production services to complete. In acquiring rights, the
Company generally seeks to obtain rights to commercially appealing motion
pictures with substantially lower direct negative costs than motion pictures
released by the major studios. The films distributed by the Company have
generally had direct negative costs ranging from $1,000,000 to $6,000,000.
However, from time to time, the Company may acquire rights to, finance or
produce, motion pictures with direct negative
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<PAGE>
costs (as well as marketing costs) below or substantially in excess of the
average direct negative costs (as well as marketing costs) of the films
historically distributed by the Company. In addition, as part of the Company's
overall business strategy it intends to gradually and selectively acquire rights
to, finance or produce films which the Company believes have greater production
values (often as a result of larger budgets) and greater potential for more
widespread audience appeal.
In certain circumstances, the Company acquires limited distribution or
sales rights and, in other circumstances, acquires worldwide rights (sometimes
including the copyright) to such films. Generally, this depends upon whether the
Company agrees to pay the producer or other owner of rights in the film (the
"rights owner") a substantial minimum guarantee. As part of its acquisition of
theatrical, video and/or television distribution rights, the Company may obtain
rights to exploit ancillary rights, such as music or sound track rights,
merchandising rights, or rights to produce CD-ROMs or other interactive media
products. Although the Company may license such rights to sub-distributors,
historically the Company has not derived any significant revenues from these
ancillary rights.
The Company is sometimes appointed as the sales agent for a particular
motion picture to license, on behalf of the rights owner, distribution rights in
the film to various distributors for exploitation on a territory-by-territory
basis. In exchange for its services as sales agent, the Company is generally
entitled to a sales agency fee which typically ranges from approximately 10% to
20% of the gross revenues from resulting licenses or sales. In such
circumstances, the Company generally advances limited funds toward the marketing
and distribution of the film (generally ranging from approximately $50,000 to
$150,000).
In some circumstances, the Company acts in much the same manner as a sales
agent but, rather than licensing or selling distribution rights to a film to a
third party on behalf of the rights owner, the Company itself licenses
distribution rights to the film from the rights owner for exploitation by the
Company for a given term in a given territory (or territories) and media. The
remainder of this arrangement (the fee structure and funds provided for
marketing and distribution) remains similar to that of a sales agency. The
Company generally prefers to enter into this type of a distribution arrangement
rather than a sales agency arrangement (which it now enters into more
infrequently than in the past) because it receives an actual license of
distribution rights which can serve as collateral for loans and provide other
benefits to the Company.
In both a sales agency arrangement and the distribution arrangement
described above, the amounts payable by the Company to the rights owner depend
upon the success of the Company in distributing the film and the financial
performance of the film itself. In acquiring distribution rights to a completed
or incomplete film, however, the Company will sometimes agree to pay the rights
owner a minimum guarantee that is independent of the financial performance of
the film. Historically, these minimum guarantees paid by the Company have ranged
from approximately $100,000 to $5,000,000, although in some circumstances they
may exceed such amounts. A minimum guarantee may be payable in full at the time
of delivery of the completed film to the Company, as in a typical negative
pickup arrangement or in installments following complete delivery of the film to
the Company, depending upon the particular arrangement. The rights owner may
also receive additional payments as a result of the Company's exploitation of
the distribution rights to the film. After receiving a distribution fee
(generally a percentage of gross receipts from exploitation of the distribution
rights) and recovering its distribution expenses and minimum guarantee, the
Company pays the remainder of revenues in excess of an ongoing distribution fee
to the rights owner. The Company typically receives a larger share of gross
receipts from the distribution of motion pictures for which it has provided a
minimum guarantee than when it does not. In addition, at times the minimum
guarantee paid by the Company may represent, in amount, all or a substantial
portion of the film's production costs. In those circumstances, such as a
typical negative pickup entered into by the
19
<PAGE>
Company, the Company generally receives worldwide distribution rights in all
media and generally will also obtain ownership of the copyright to the film,
with the production company from which the Company acquired the rights receiving
a production fee and generally a participation in net revenues from distribution
of the motion picture.
The Company's commitment to pay a minimum guarantee with respect to films
that have not begun production often enables the production company or producer
to obtain financing for its project, if needed. In some cases, the Company's
contractual commitment to pay a minimum guarantee upon delivery of a film serves
as sufficient collateral for a bank to lend production funds. The bank will
typically insure delivery of the film to the Company by the purchase of a
completion guaranty. In order to enable the production company or producer to
borrow production funding, or to borrow at preferential bank fees and interest
rates, it may also be necessary for the Company to secure its purchase or
acquisition commitment, which it generally does by obtaining the issuance of a
letter of credit from the Company's primary lenders, Coutts & Co., a subsidiary
of National Westminster Bank plc., and Berliner Bank A.G. See "Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources." In certain situations, the
production company or producer of a film may initially obtain certain funds from
other distribution companies which obtain distribution rights in certain media
or territories (for example, the domestic distribution rights or distribution
rights in Japan), from accessing foreign governmental film industry incentive
programs (such as programs offered in the past by England, Canada, Australia and
New Zealand) or by using its own resources or other resources available to it,
and then subsequently approach the Company to supply the remaining funds
necessary to complete or co-finance the film in exchange for the Company's
obtaining the remaining distribution rights to the motion picture. In order to
fund the acquisition costs of the films for which it acquires rights, the
Company relies primarily on: (i) its credit facility with Coutts & Co. and
Berliner Bank A.G.; (ii) other lenders willing to finance the contractual
minimum guarantee obligations of the Company to the film's producers or rights
owner, (iii) working capital; (iv) pre-sales (minimum guarantees obtained from
sub-distributors who have licensed rights to the film from the Company); and (v)
gap financing (where the lender is willing to finance the production costs of
the motion picture based on the Company's estimates of the ultimate sales in
connection with the motion picture).
Of the eighteen completed films which first became available to the Company
for distribution in 1996, six films, with average direct negative costs of
approximately $2,600,000, were produced by the Company through various
production companies controlled by the Company and to which the Company provided
all or substantially all of the production funds through various financing
arrangements such as minimum guarantee commitments and negative pickups.
Typically, the Company's production subsidiaries obtain production financing by
obtaining production loans using the Company's minimum guarantee commitment as
collateral, at times secured by a letter of credit issued under the Company's
credit facility. The Company attempts to minimize the risks associated with its
development and production activities in a variety of ways. The Company does not
maintain a substantial staff of creative or technical personnel. The Company
also does not own or operate sound stage and related production facilities
generally referred to as a "studio" and does not have the fixed payroll, general
and administrative and other expenses resulting from ownership of a studio. In
addition, the Company generally attempts to acquire fully developed projects
ready for pre-production with, when feasible, completed scripts and directors
and/or cast members who are committed to or are interested in the project. Many
projects also have a producer involved or committed. However, if at the time of
acquisition by the Company of rights in a project, a producer is not formally or
informally committed to a project, the Company also may engage a production
services company or a producer to supervise and arrange all pre-production,
production and post-production activities in exchange for a production fee and a
participation in net revenues from the film. The Company typically will arrange
for a production services company or a producer with whom the Company has
previously worked to be
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engaged to provide such production services on the project. The Company has and
seeks relationships with emerging talent and with independent producers with
reputations and experience producing quality films efficiently with controlled
costs.
The following chart provides certain information regarding completed motion
pictures first made available to the Company for distribution during 1996. For
purposes of the chart, "Sales Agency" refers to those situations where the
Company licenses distribution rights to third parties on behalf of the rights
owner; "Straight Distribution" refers to those situations where the Company
itself licenses distribution rights to a film from the rights owner for
exploitation by the Company for a given term in a given territory (or
territories) and media; "Minimum Guarantee" refers to those situations where the
Company acquires rights to a film in exchange for an agreement by the Company to
pay a minimum guaranteed amount upon (or after) delivery of the film to the
Company for exploitation; "Negative Pickup" refers to those situations where,
upon payment of the minimum guarantee, the Company acquires worldwide rights in
all media, including copyright ownership; and "Minimum P&A Commitment" refers to
those situations where, as part of its acquisition of rights, the Company
commits to spend a minimum amount on prints and advertising in connection with
domestic theatrical release of the film. The chart includes acquisitions of
rights from unaffiliated production companies or other rights owners, as well as
from production companies owned or controlled by the Company.
<TABLE>
<CAPTION>
MOTION GENRE TYPE OF ACQUISITION TERRITORIES ACQUIRED SELECTED CAST
PICTURE TITLE ----- ------------------- -------------------- -------------
- -------------
<S> <C> <C> <C> <C>
AL CENTRO DELL'AREA Comedy Straight Distribution World, excluding Germany, Marzia Aquilani, Christina Capone,
DI RIGORE Austria, and Italy Guillaume Fantannaz
BACK TO BACK Action Negative Pickup World, excluding Japan and Michael Rooker (THE TRIGGER EFFECT,
Hong Kong MALLRATS, CLIFFHANGER), Danielle Harris
(DAYLIGHT, FREE WILLY, THE LAST BOY
SCOUT), Bobcat Goldthwait (DESTINY TURNS
ON THE RADIO)
BITTER SUGAR Spanish Minimum P&A Commitment World, excluding Cuba and Rene Lavan (TRUE LIES, "One Life To
Language the Dominican Republic Live"), Mayte Vilan (THE SPECIALIST)
drama
A BROTHER'S KISS Drama Minimum Guarantee plus World Nick Chinlund (ERASER), Rosie Perez
Minimum P&A Commitment (WHITE MEN CAN'T JUMP), John Leguizamo
(EXECUTIVE DECISION, TO WONG FOO, THANKS
FOR EVERYTHING, JULIE NEWMAR), Michael
Rapaport (METRO, BEAUTIFUL GIRLS), Cathy
Moriarty (RAGING BULL)
COUNTDOWN Thriller Negative Pickup World Lori Petty (TANK GIRL, FREE WILLY, A
LEAGUE OF THEIR OWN), Jason London
(LEARNING CURVES), James LeGros (THE
DESTINY OF MARTY FINE, INFINITY, SAFE)
DOWNHILL WILLIE Comedy Minimum Guarantee World, excluding Canada Keith Coogan (DON'T TELL MOM THE
BABYSITTER'S DEAD, TOY SOLDIERS), Staci
Keanan (LISA, "Step By Step")
DRIVE Action Negative Pickup World Mark Dacascos (CRYING FREEMAN), Kadeem
Adventure Hardison (PANTHER, VAMPIRE IN BROOKLYN)
GRIND Drama, Straight Distribution World, excluding the United Adrienne Shelly (SLEEP WITH ME, THE
Romance States and English-speaking UNBELIEVABLE TRUTH), Billy Crudup
Canada (SLEEPERS, EVERYONE SAYS I LOVE YOU)
ILLEGALLY YOURS Comedy Negative Pickup * World, excluding the United Rob Lowe (MULHOLLAND FALLS, TOMMY BOY),
States Collen Camp (HOUSE ARREST, DIE HARD WITH
A VENGEANCE)
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
MOTION GENRE TYPE OF ACQUISITION TERRITORIES ACQUIRED SELECTED CAST
PICTURE TITLE ----- ------------------- -------------------- -------------
- -------------
<S> <C> <C> <C> <C>
INFINITY Drama Negative Pickup World Matthew Broderick (ADDICTED TO LOVE, THE
CABLE GUY, FERRIS BUELLER'S DAY OFF),
Patricia Arquette (BEYOND RANGOON, TRUE
ROMANCE, FLIRTING WITH DISASTER)
JOHNS Drama Minimum Guarantee, plus World Lukas Haas (MARS ATTACKS!, RAMBLING
Minimum P&A Commitment ROSE, WITNESS), David Arquette (Scream,
BEAUTIFUL GIRLS, WILD BILL, BUFFY THE
VAMPIRE SLAYER), Elliott Gould (BUGSY)
MESMER Period Straight Distribution World, excluding Canada, Alan Rickman (SENSE AND SENSIBILITY, DIE
Drama German-speaking Europe and HARD), Amanda Ooms
Poland
PUMPKINHEAD Horror Negative Pickup * World, excluding the United Lance Henriksen (POWDER, THE QUICK AND
States THE DEAD), John D'Aquino, Kerry Remsen
RED HOT Drama Minimum Guarantee World, excluding South Balthazar Getty (LOST HIGHWAY, WHITE
Africa, South America, Japan SQUALL), Carla Gugino (SHE'S THE ONE,
Italy and the UK MIAMI RHAPSODY)
SCORPION SPRING Drama Sales Agency World, excluding South Matthew McConaughey (A TIME TO KILL,
Africa, United States and LONE STAR), Ruben Blades (COLOR OF
Canada NIGHT, THE SUPER), Alfred Molina
(SPECIES)
SLAVES TO THE Drama Negative Pickup World Marisa Ryan ("Major Dad"), Molly Gross
UNDERGROUND Minimum P&A
Commitment
THIS IS THE SEA Drama Negative Pickup World, excluding the Richard Harris (SMILLA'S SENSE OF SNOW,
United Kingdom THE FIELD, PATRIOT GAMES), Gabriel Byrne
(SMILLA'S SENSE OF SNOW, THE USUAL
SUSPECTS, LITTLE WOMEN), John Lynch (IN
THE NAME OF THE FATHER, THE SECRET OF
ROAN INISH)
</TABLE>
- --------------------
* The Company acquired the copyright to this film, but the film was acquired
subject to pre-existing license agreements which were entered into prior to
acquisition of the film by the Company.
THE COMPANY'S FILM LIBRARY OF DISTRIBUTION RIGHTS
The Company's film library consists of rights to a broad range of films,
most of which were produced since 1980. As of March 15, 1997, the Company had
various distribution rights to approximately 200 motion pictures (including
approximately 72 motion pictures in which the Company owns an interest in the
copyright and approximately 55 motion pictures for which the Company acts as
sales agent on behalf of the producer or other owner of rights in the film). The
Company's distribution rights generally range from 12 to 25 years or more from
the date of acquisition, and typically extend to many, if not all, media of
exhibition worldwide or in specified territories.
In addition to exploitation of distribution rights to motion pictures in
its library in the major media (theatrical, video and television), in certain
situations the Company is able to exploit various ancillary rights in such
films. For example, in March 1996 the Company sold the rights to produce a
sequel of The
22
<PAGE>
Prophecy for $675,000. Additionally, Party Girl, a motion picture released by
First Look Pictures in 1995, was the basis for a short-lived Fox Television
series produced by Warner Bros. Television in which the Company earned a total
of $30,000 comprised of a pilot fee and per episode royalties. The Company has
also arranged for the music in several motion pictures it has distributed to be
released as soundtrack recordings (including The Secret of Roan Inish, Party
Girl, The Big Squeeze, and Infinity). Although exploitation of these soundtrack
and other ancillary rights has not generated significant revenues for the
Company to date, the Company's ownership or control of ancillary rights to
motion pictures in its library (including interactive rights, remake rights and
merchandising rights, among others) may provide future sources of additional
revenues.
MAJOR CUSTOMERS
Since January 1, 1994, only five customers have accounted for more than
10% of the Company's revenues (including for this purpose revenues of
Pre-Merger Overseas) in any full fiscal year: three in 1996 (BMG Video with
$3,068,000 or 10.7%, Helkon Media Filmvertrieb gmbH with $3,940,000 or 12.2%
and Columbia TriStar and its affiliates with $2,490,000 or 10.3%); one in
1995 (Columbia TriStar and its affiliates in 1995 with $4,366,000 or 20.1%);
and one in 1994 (Miramax Film Corporation with $3,000,000 or 14.5%).
EMPLOYEES
At March 15, 1997, the Company employed a total of 40 full-time employees
and two part-time employees. Certain subsidiaries of the Company are, for
certain films, subject to the terms in effect from time to time of various
industry-wide collective bargaining agreements, including the Writers Guild of
America, the Directors Guild of America, the Screen Actors Guild and the
International Alliance of Theatrical Stage Employees. In certain circumstances,
the Company also assumes a production company's obligation to pay residuals to
these various guilds and unions. A strike, job action or labor disturbance by
the members of any of these organizations could have a material adverse effect
on the production of a motion picture within the United States, and,
consequently, on the business, operations and results of operations of the
Company. These organizations have all engaged in strikes and similar activities.
The Company believes that its current relationship with its employees is
satisfactory.
COMPETITION
Motion picture distribution, finance and production are highly competitive
businesses. The competition comes both from companies within the same business
and from companies in other entertainment media which create alternative forms
of leisure entertainment. The Company competes with major film studios
(including The Walt Disney Company, Paramount Pictures Corporation, Universal
Pictures, Columbia Pictures, Tri-Star Pictures, Twentieth Century Fox, Warner
Brothers Inc. and MGM/UA) and their affiliates (including such previously
independent companies as Miramax and New Line Cinema) which are dominant in the
motion picture industry. The Company also competes with numerous independent
motion picture production and distribution companies, as well as numerous
foreign motion picture production and distribution companies. Many of the
organizations with which the Company competes have significantly greater
financial and other resources than does the Company. The Company's ability to
compete successfully depends upon the continued availability of independently
produced, domestic and foreign motion pictures and the Company's ability to
identify and acquire distribution rights and to distribute motion pictures
successfully. A number of formerly independent motion picture companies have
been acquired in recent years by major entertainment companies. These recent
transactions have significantly increased competition for the acquisition of
distribution rights to independently produced
23
<PAGE>
motion pictures by eliminating some available sources of independently produced
films and providing greater financial resources to other previously independent
companies engaged in the business of acquiring distribution rights to
independently produced films and distributing such films.
Films distributed or financed by the Company also compete for audience
acceptance and exhibition outlets with motion pictures distributed and
produced by other companies. As a result, the success of any of the films
distributed or financed by the Company is dependent not only on the quality
and acceptance of that particular film, but also on the quality and
acceptance of other competing films released into the marketplace at or near
the same time. With respect to the Company's domestic theatrical releasing
operations, a substantial majority of the motion picture screens in the
United States are typically committed at any one time to films distributed
nationally by the major film studios, which generally buy large amounts of
advertising on television and radio and in newspapers and can command greater
access to available screens. Although some exhibitors specialize in the
exhibition of independent, specialized motion pictures and "art-house" films,
there is intense competition for screen availability for these films as well.
The number of motion pictures released theatrically in the United States has
increased in recent years, thereby increasing competition for exhibition
outlets and audiences. In addition, there have also been rapid technological
changes over the past fifteen years. Although technological developments have
resulted in the creation of additional revenue sources from the licensing of
rights with respect to such new media, such developments have also resulted
in the popularity and availability of alternative and competing forms of
leisure time entertainment, including pay/cable programming, and home
entertainment equipment such as videocassettes, interactive games and
computers.
REGULATION
In 1994, the United States was unable to reach agreement with its major
international trading partners to include audio-visual works, such as television
programs and motion pictures, under the terms of the General Agreement on Trade
and Tariffs Treaty ("GATT"). The failure to include audiovisual works under GATT
allows many countries (including members of the European Union, which consists
of Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg,
The Netherlands, Portugal and the United Kingdom) to continue enforcing quotas
that restrict the amount of United States produced television programming which
may be aired on television in such countries. The Council of Europe has adopted
a directive requiring all member states of the European Union to enact laws
specifying that broadcasters must reserve a majority of their transmission time
(exclusive of news, sports, game shows and advertising) for European works. The
directive does not itself constitute law, but must be implemented by appropriate
legislation in each member country. In addition, France requires that original
French programming constitute a required portion of all programming aired on
French television. These quotas generally apply only to television programming
and not to theatrical exhibition of motion pictures, but quotas on the
theatrical exhibition of motion pictures could also be enacted in the future.
There can be no assurance that additional or more restrictive theatrical or
television quotas will not be enacted or that countries with existing quotas
will not more strictly enforce such quotas. Additional or more restrictive
quotas or more stringent enforcement of existing quotas could materially and
adversely affect the business of the Company by limiting the ability of the
Company to exploit fully its rights in motion pictures internationally and,
consequently, to assist or participate in the financing of such motion pictures.
Distribution rights to motion pictures are granted legal protection under
the copyright laws of the United States and most foreign countries, which laws
provide substantial civil and criminal sanctions for unauthorized duplication
and exhibition of motion pictures. Motion pictures, musical works, sound
recordings, art work, still photography and motion picture properties are
separate works subject to copyright
24
<PAGE>
under most copyright laws, including the United States Copyright Act of 1976, as
amended. Management of the Company is aware of reports of extensive unauthorized
misappropriation of videocassette rights to motion pictures, which may include
motion pictures distributed by the Company. Motion picture piracy is an
industry-wide problem. The Motion Picture Association of America ("MPAA"), an
industry trade association, operates a piracy hotline and investigates all
reports of such piracy. Depending upon the results of such investigations,
appropriate legal action may be brought by the owner of the rights. Depending
upon the extent of the piracy, the Federal Bureau of Investigation may assist in
these investigations and related criminal prosecutions.
Motion picture piracy is an international as well as a domestic problem.
Motion picture piracy is extensive in many parts of the world, including South
America, Asia (including Korea, China and Taiwan), the countries of the former
Soviet Union and other former Eastern bloc countries. In addition to the MPAA,
the Motion Picture Export Association, the American Film Marketing Association
and the American Film Export Association monitor the progress and efforts made
by various countries to limit or prevent piracy. In the past, these various
trade associations have enacted voluntary embargoes of motion picture exports to
certain countries in order to pressure the governments of those countries to
become more aggressive in preventing motion picture piracy. In addition, the
United States government has publicly considered trade sanctions against
specific countries which do not prevent copyright infringement of United States
produced motion pictures. There can be no assurance that voluntary industry
embargoes or United States government trade sanctions will be enacted. If
enacted, such actions could impact the amount of revenue that the Company
realizes from the international exploitation of motion pictures depending upon
the countries subject to such action and the duration of such action. If not
enacted or if other measures are not taken, the motion picture industry
(including the Company) may continue to lose an indeterminate amount of revenues
as a result of motion picture piracy.
The Code and Ratings Administration of the MPAA assigns ratings indicating
age-group suitability for theatrical distribution of motion pictures. The
Company sometimes, although not always, submits its motion pictures for such
ratings. In certain circumstances, motion pictures that the Company does not
submit for rating to the Code and Ratings Administration of the MPAA might have
received restrictive ratings had such motion pictures been submitted for rating,
including, in some circumstances, the most restrictive rating, which prohibits
theatrical attendance by persons below the age of seventeen. Unrated motion
pictures (or motion pictures receiving the most restrictive rating) may not be
exhibited by certain theatrical exhibitors or in certain locales, thereby
potentially reducing the total revenues generated by such films. United States
television stations and networks, as well as foreign governments, impose
additional restrictions on the content of motion pictures which may restrict in
whole or in part theatrical or television exhibition in particular territories.
The major broadcast networks and the major television production companies
(which consist primarily of the "major" films studios referred to in
"Competition" above) have recently begun to implement a system to rate
television programs. It is not possible to predict what impact such a
television rating system ultimately will have on the motion pictures distributed
by the Company. However, the possibility exists that the sale of theatrical
motion pictures for broadcast on domestic free television may become more
difficult because of potential advertiser unwillingness to purchase advertising
time on television programs that are rated for limited audiences. There can be
no assurance that current and future restrictions on the content of motion
pictures may not limit or adversely affect the Company's ability to exhibit
certain motion pictures in certain territories and media.
ITEM 2. PROPERTIES.
The Company's principal executive offices are located at 8800 Sunset
Boulevard, Third Floor, Los Angeles, California 90069 and consist of
approximately 10,000 square feet leased by the Company,
25
<PAGE>
the lease for which expires in September 1997. The Company has reached an
agreement in principle with the landlord to renew the lease for an additional
five years at a monthly rate of $2.00 per square foot (currently the monthly
rate is $1.65 per square foot). Under the terms of the agreement in principle,
the Company would also pay a percentage of operating costs, above a base year
calculation, beginning in the third year of the renewed lease. No assurances can
be given that a definitive lease renewal will be entered into or entered into on
the foregoing terms. If a definitive lease renewal is not entered into, the
Company believes that it will be able to locate comparable space on lease terms
similar to that of the foregoing agreement in principle, however, such terms may
differ from those of the agreement in principle depending on the location of the
space and conditions in the real estate market at the time. The Company does
not maintain any studio facilities or own any real estate, and its lease is with
an unaffiliated party.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not, as of March 31, 1997, a party to any litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
In order to seek approval of the Merger and certain related matters, on
October 25, 1996, the Company held a Special Meeting of Stockholders in lieu of
its 1996 Annual Meeting (the "Special Meeting"). At the Special Meeting, the
Company's stockholders approved the proposal to approve the Merger Agreement
(2,184,902 votes in favor, 16,620 votes against, no abstentions and 342,877
broker non-votes). In addition, at the Special Meeting, (i) Robert B. Little
and Stephen K. Bannon were elected to serve as Class I Directors of the Company
until the 1997 Annual Meeting of Stockholders and until their successors are
elected and have qualified, (ii) Ellen Dinerman Little and Scot K. Vorse were
elected to serve as Class II Directors of the Company until the 1998 Annual
Meeting of Stockholders and until their successors are elected and have
qualified, and (iii) William F. Lischak, Jeffrey A. Rochlis and Alessandro
Fracassi were elected to serve as Class III Directors of the Company until the
1999 Annual Meeting of Stockholders and until their successors are elected and
have qualified, in each case by a vote of 2,543,779 votes in favor of such
person's election and 620 votes withheld.
At the Special Meeting, the Company's stockholders also approved (i) a
proposal to amend and restate the Company's Certificate of Incorporation to,
among other things, change its name to "Overseas Filmgroup, Inc.", increase
the Company's authorized capital stock and enact certain anti-takeover
provisions (2,183,302 votes in favor, 8,220 votes against, 10,000 abstentions
and 342,877 broker non-votes); (ii) a proposal to approve the Company's 1996
Basic Stock Option and Stock Appreciation Rights Plan (2,182,302 votes in
favor, 19,220 votes against, no abstentions and 342,877 broker non-votes);
(iii) a proposal to approve the 1996 Special Stock Option Plan and Agreement
(2,180,802 votes in favor, 20,720 votes against, no abstentions and 342,877
broker non-votes); and (iv) a proposal to ratify the Company's appointment of
Price Waterhouse LLP as independent accountants for 1996 (2,542,779 votes in
favor, 1,620 votes against, no abstentions and no broker non-votes).
26
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET PRICE
The Company's Common Stock is quoted on the OTC Bulletin Board under the
symbol "OSFG." The Company's 4,500,000 Warrants to Purchase Common Stock (each
warrant entitling the registered holder to purchase one share of Common Stock at
an exercise price of $5.00 per share, subject to adjustment, until 5:00 p.m. New
York City time on February 16, 2002) (the "Warrants") are also quoted on the OTC
Bulletin Board under the Symbol "OSFGW." The following table sets forth the
high and low closing bid quotations for the periods indicated since the Common
Stock and Warrants commenced public trading on February 17, 1995. The
quotations represent prices between dealers and do not include retail markups or
markdowns or commissions. They may not necessarily represent actual
transactions.
COMMON STOCK WARRANTS
FISCAL 1995 HIGH LOW HIGH LOW
First Quarter (beginning February 17, 1995) 4-3/4 4-3/8 1-1/4 7/8
Second Quarter 4-3/4 4-1/4 1-1/4 1/2
Third Quarter 4-3/4 4-3/8 1 1/2
Fourth Quarter 4-3/4 4-3/8 97/100 9/16
FISCAL 1996
First Quarter 4-3/4 4-3/5 1 5/8
Second Quarter 5-5/16 4-5/8 1-3/8 11/16
Third Quarter 5-5/16 5-1/8 1-3/8 7/8
Fourth quarter 5-3/8 4-5/8 1-3/8 1/2
FISCAL 1997
First Quarter (through March 20, 1997) 4-5/8 3-1/2 1 3/8
HOLDERS
As of March 20, 1997, there were approximately twelve holders of record
of the Company's Common Stock, and there were 5,777,778 shares of Common
Stock issued and outstanding of the 25,000,000 shares authorized. As of
March 20, 1997, there were approximately eight holders of record of the
Company's Warrants. See Note 8 of the Notes to the Company's Consolidated
Financial Statements for information regarding certain additional securities
which have been issued by the Company.
DIVIDENDS
The Company has not paid cash dividends on its Common Stock either prior to
or since the Merger (other than S Corporation distributions made by Pre-Merger
Overseas to its stockholders prior to the Merger), and the Company presently
intends to retain future earnings to finance the expansion and development of
its business and not pay dividends on its Common Stock. Any determination to
pay cash
27
<PAGE>
dividends in the future would be at the discretion of the Company's Board of
Directors and would be dependent upon the Company's results of operations,
financial condition, contractual restrictions and other factors deemed relevant
at that time by the Company's Board of Directors. In addition, certain
covenants in the Company's credit facility substantially restrict payment of
cash dividends.
RECENT SALES OF UNREGISTERED SECURITIES
Pursuant to the terms of the Merger, on October 31, 1996, the Company
issued an aggregate of 3,177,778 shares of the Company's Common Stock to the
former shareholders of Pre-Merger Overseas as part of the merger consideration.
See "Item 1 - Background - The October 1996 Merger". Such shares were issued to
the three former shareholders of Pre-Merger Overseas in reliance upon the
exemption from registration under the Securities Act of 1933, as amended (the
"Securities Act"), provided by Section 4(2) thereof. On the same date, as part
of the compensation to Jefferson Capital Group, Ltd. for serving as financial
advisor to Pre-Merger Overseas in connection with the Merger, the Company issued
to Jefferson Capital Group, Ltd. a warrant to purchase 62,500 shares of Common
Stock at an exercise price of $5.00 per share. The warrant was issued in
reliance upon the exemption from registration under the Securities Act provided
by Section 4(2) thereof.
28
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
The following tables set forth selected financial data for the Company
which has been derived from the Company's financial statements as of and for
each of the five years ended December 31, 1996 which have been audited by
Price Waterhouse LLP, independent accountants. The pro forma statement of
income data set forth below and described in footnote (1) to this section
does not purport to be indicative of the results of operations that would
have occurred had the Merger Note been issued on January 1, 1995 or had the
Company's S corporation status terminated prior to January 1, 1992, or which
may be expected to occur in future periods. The selected financial data set
forth below should be read in conjunction with the Consolidated Financial
Statements of the Company, together with the related notes thereto included
elsewhere herein, and "Item 7 -Management's Discussion and Analysis of
Financial Condition And Results Of Operations."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Revenues $14,722,483 $17,951,977 $20,734,094 $21,672,510 $28,677,571
Film costs 10,683,951 13,962,255 16,395,902 16,320,694 23,449,114
Selling, general and administrative 2,234,774 2,401,509 2,151,214 2,721,745 3,595,660
Income from operations 1,803,758 1,588,213 2,186,978 2,630,071 1,632,797
Income before income taxes 2,074,926 1,997,872 2,441,960 2,894,066 1,665,269
Income taxes 511,937 300,628 296,487 432,905 3,131,367
Net income (loss) 1,562,989 1,697,244 2,145,473 2,461,161 (1,466,098)
Pro forma net income (1) 1,327,953 1,278,638 1,562,854 1,745,610 998,168
Pro forma net income per
share (1)(2) .42 .22
Weighted average number of shares outstanding (2) 4,177,778 4,444,445
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Film costs, net of accumulated amortization $7,837,619 $10,808,032 $12,377,123 $17,349,071 $28,358,324
Total assets 19,506,942 20,311,146 24,684,518 28,954,796 40,803,685
Notes payable, banks 3,000,000 3,700,000 6,058,279 7,421,893 16,607,137
Total liabilities 12,020,416 11,993,609 14,874,057 17,506,422 28,611,919
Total equity 7,486,526 8,317,537 9,810,461 11,448,374 12,191,766
</TABLE>
29
<PAGE>
NOTES TO SELECTED FINANCIAL DATA
(1) From January 1, 1989 to October 31, 1996, Pre-Merger Overseas
operated as an S Corporation under Subchapter S of the Internal Revenue Code.
The amounts shown reflect a pro forma charge which represents the estimated
income taxes, at an effective tax rate of 36% for both federal and state
income taxes (but excluding the one-time, non-recurring deferred federal
income tax charge relating to termination of the S Corporation status upon
consummation of the Merger) that would have been reported under FAS No. 109
had Pre-Merger Overseas been a C Corporation during the periods presented.
Additionally, the 1995 and 1996 amounts shown reflect a pro forma interest
charge related to the Merger Note as described in Note 2 to the Consolidated
Financial Statements of the Company.
(2) Pro forma net income per share is not indicative of what actual net
income per share would have been if the events described in note (1) had
occurred. Pro forma net income per share is computed by dividing pro forma
net income by the weighted average number of shares outstanding during the
period, adjusted to reflect (i) 3,177,778 shares which represents the
post-Merger equivalent of the 100 pre-Merger outstanding shares of Pre-Merger
Overseas as if they had been recapitalized and (ii) 1,000,000 shares
representing the number of new shares that would have to be issued at the
October 31, 1996 at an assumed price of $5.20 per share (which approximates
the market price at October 31, 1996) to pay the pro forma distribution of
$5,200,000 described in Note 2 to the Consolidated Financial Statements of
the Company. Historical earnings per share has not been presented in view of
the prior periods' S corporation status.
30
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
As described under "Item 1 - Business - Background - The October 1996
Merger," on October 31, 1996, the Company, a publicly-held company then known
as "Entertainment/Media Acquisition Corporation" ("EMAC") which was formed in
December 1993 in order to acquire an operating business in the entertainment
and media industry, succeeded by the merger (the "Merger") to the operations
of Overseas Filmgroup, Inc. ("Pre-Merger Overseas"), a privately-held
independent film company, the operations of which were established in 1980.
The three former shareholders of Pre-Merger Overseas received consideration
in the Merger consisting of 3,177,778 shares of the Company's Common Stock,
$1,500,000 in cash and the Merger Note (a $2,000,000, five-year, secured
promissory note), and also entered into various agreements with the Company.
See "Item 1 - Business -Background - The October 1996 Merger" and the other
sections of this Report referenced in such section for additional information
regarding the Merger and certain agreements entered into in connection
therewith.
For accounting and financial reporting purposes, the Merger was considered
a reverse acquisition of EMAC with Pre-Merger Overseas as the acquirer.
Specifically, the Merger was treated as a recapitalization of Pre-Merger
Overseas by an exchange of Common Stock for the net assets of EMAC, which
consisted primarily of the cash proceeds of EMAC's initial public offering then
held in trust. The Company has reflected in its consolidated financial
statements, the assets, liabilities and equity of Pre-Merger Overseas at their
historical book values. Assets and liabilities of EMAC were reflected at their
fair market value at the effective time of the Merger, which approximated their
historical book values. Accordingly, the results of operations and financial
position of the Company, for periods and dates prior to the Merger, are the
historical results of operations and financial position of Pre-Merger Overseas
for such periods and dates. All direct costs of the Merger, consisting
primarily of legal, accounting, consulting and certain other fees, have been
charged to paid in capital. Following the Merger, the fiscal year of the
Company was changed from November 30 to December 31 (Pre-Merger Overseas' fiscal
year).
The Company specializes in the acquisition and worldwide license or sale of
distribution rights to independently-produced feature films in a wide variety of
genres. The Company obtains rights to motion pictures at various stages of
completion (either completed, in production or in development) and licenses
distribution rights (including theatrical, video, pay television, free
television, satellite and other ancillary rights) of such motion pictures to
various sub-distributors in the United States and in foreign markets, as well as
directly distributing certain motion pictures in the domestic theatrical market.
The licensing of distribution rights to foreign distributors and
sub-distributors in the major international territories or regions has
historically been the Company's primary focus, accounting for a substantial
portion of the Company's total revenues. In fiscal 1994, 1995 and 1996,
approximately 74%, 66% and 72% of the Company's revenues were derived from such
activities.
In situations where, prior to the availability of a motion picture, the
Company is paid a minimum guarantee or other payment from the licensing of
distribution rights to foreign or domestic sub-distributors, the minimum
guarantee or other payment is recorded as deferred revenue and is recognized at
such time as the motion picture is available for release by the sub-distributor.
In most other cases, revenue is recognized at such time as the motion picture is
available for release by the sub-distributor and revenues are earned pursuant to
the terms of the Company's agreement with the sub-distributor. The timing of
actual cash payments by sub-distributors to the Company of minimum
31
<PAGE>
guarantees and other amounts earned by the Company varies in accordance with the
contractual terms of each agreement. Certain payments to the Company are made
prior to the recognition of income while other payments to the Company are made
after revenue is recognized. When the Company distributes a motion picture
directly to the domestic theatrical market, revenue is recognized over the
period of exhibition of the motion picture. However, cash payments to the
Company by a theatrical exhibitor typically are not made until the close of the
film's engagement in the exhibitor's theaters or chain of theaters. Since the
Company's specialized or "art-house" releases can have extended runs and are
often exhibited by a substantial number of independent theatre owners for which
it can be comparatively more difficult to monitor and enforce timely payment
than with national theatre chains, payment to the Company by theatre chains is
often not made for four to nine months from initial release for successful
releases, or longer. Revenues from the direct license by the Company of
distribution rights to a pay television service are recognized at such time as
the motion picture is available for telecast by such service and the license
agreement begins. Cash payments to the Company from such services are generally
made from between 60 and 90 days after the initial airing of the film on the pay
television service.
Film costs represent a major component of the Company's assets. Film costs
represent those costs incurred in the acquisition and distribution of motion
pictures or in the acquisition of distribution rights to motion pictures. This
includes minimum guarantees paid to producers or other owners of film rights,
recoupable distribution and production costs, and capitalized interest and
overhead. The Company amortizes film costs using the individual film forecast
method under which film costs are amortized for each film in the ratio that
revenue earned in the current period for such film bears to management's
estimate of the total revenue to be realized from all media and markets for such
film. Management of the Company regularly reviews its revenue and cost forecasts
and revises such estimates for each film, as necessary, when warranted by
management's appraisal of current market conditions. This may result in a change
in the rate of amortization and write-downs to net realizable value. Net income
in future years is in part dependent upon the Company's amortization of its film
costs and may be significantly affected by periodic adjustments in such
amortization.
The following table sets forth the Company's unamortized film costs as of
December 31, 1994, 1995 and 1996:
As of December 31,
------------------
1994 1995 1996
Films in release,
net of accumulated amortization $ 9,456,441 $12,162,975 $25,838,106
Films not yet available for release 2,920,682 5,186,096 2,520,218
--------- --------- ---------
$12,377,123 $17,349,071 $28,358,324
---------- ---------- ----------
---------- ---------- ----------
The increases in unamortized film costs from fiscal 1994 to 1995 and from
fiscal 1995 to 1996 generally reflect expansion of the Company's operations,
including increased acquisition of motion picture rights, and financing of
motion picture production. In addition, of the increase from fiscal 1995 to
1996, a significant portion was due to three of the Company's motion picture
production subsidiaries, each of which commenced operations in 1996.
32
<PAGE>
Based upon the Company's estimate as of December 31, 1996 of projected gross
revenues, approximately 75% of unamortized film costs applicable to films
released as of such date are expected to be amortized over the three-year period
ending December 31, 1999.
The Company directly distributes certain motion pictures in the domestic
theatrical market under the name "First Look Pictures." Prior to June 1995, the
Company's domestic theatrical operations were conducted by First Look Pictures,
Inc. ("FLP Inc."), which was wholly owned by Ellen Dinerman Little and Robert B.
Little. In anticipation of a merger of FLP Inc. with Pre-Merger Overseas, in
January 1995 Pre-Merger Overseas entered into a sales agency arrangement with
FLP Inc. whereby Pre-Merger Overseas advanced all costs of overhead as well as
distribution and releasing costs on behalf of FLP Inc. in exchange for FLP
Inc.'s assignment of all income relating to the motion pictures it released.
FLP Inc. was merged into Pre-Merger Overseas in June 1995.
The Company typically acquires distribution rights in a motion picture
for a specified term in one or more territories and media. See "Item 1 -
Business -Acquisition Rights by the Company, Production and Financing." In
some circumstances, the Company also acquires the copyright to the motion
picture. The arrangements the Company enters into to acquire rights often
includes the Company agreeing to pay an advance or minimum guarantee for the
rights acquired and/or agreeing to advance print and advertising costs,
obligations which are independent of the actual financial performance of the
motion picture being distributed. The risks incurred by the Company
dramatically increase to the extent the Company takes such actions. The
Company committed to pay an advance or minimum guarantee or advance print and
advertising costs with respect to approximately 13 films initially released
in 1996 (for an aggregate commitment in excess of the aggregate "pre-sale" or
"pre-license" commitments obtained from sub-distributors with respect to such
films of approximately $16,575,000). While the Company generally works with
independent producers who have already developed projects, the Company also
incurs significant risk to the extent it engages in development or production
activities itself, given the costs and risks associated with such activities,
including the uncertainty of whether any particular development project will
eventually result in a completed film. Although the Company may, in certain
circumstances, reduce some of the foregoing risks by sub-licensing certain
distribution rights in exchange for minimum guarantees from sub-licensees
such as foreign sub-distributors, the risks incurred by the Company are
generally greater the greater the "investment" by the Company in a motion
picture. This "investment" by the Company in a motion picture includes the
cost of acquisition of the distribution rights (including any advance or
minimum guarantee paid to the producer), the amount of the production
financed, and the marketing and distribution costs borne. For a variety of
reasons, including (i) the likelihood of continued industry-wide increases in
acquisition, production and marketing costs (See "Inflation and Other
Considerations" below); (ii) the Company's intent to gradually and
selectively acquire rights to or produce films which have greater production
values (often as a result of larger budgets); and (iii) the Company's
increasing role as the principal financier of a greater portion of the motion
pictures it distributes by providing minimum guarantee commitments, the
"investment" by the Company in the motion pictures it distributes in the
future and the associated risks faced by the Company are likely to increase.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Revenues increased by $7,005,061 (32.3%) to $28,677,571 for the year ended
December 31, 1996 from $21,672,510 for the year ended December 31, 1995. The
increase was primarily due to a greater number of larger budget films (generally
reflecting higher production values) becoming available for distribution and
generating relatively greater revenues than some of the Company's smaller budget
films,
33
<PAGE>
generally reflecting a marketplace preference during such period for films with
greater production values. During the year ended December 31, 1996, 21 motion
pictures each generated in excess of $200,000 in revenues, with an aggregate of
$24,426,627, or 85.2%, of total revenues for such year attributable to those
films. For the year ended December 31, 1995, 20 motion pictures each generated
in excess of $200,000 in revenues, with an aggregate of $16,584,445, or 76%, of
total revenues, for such year attributable to those films.
Film costs as a percentage of revenues increased to 81.8% for the year
ended December 31, 1996 from 75.3% for the year ended December 31, 1995. This
increase was primarily due to a write down of approximately $674,000 in the film
"Infinity" and approximately $88,000 in the film "The Big Squeeze."
Additionally, although the Company recognized $4,568,774 in gross revenues
relating to these two films, no gross margin resulted from either film. Gross
margins vary from film to film based upon many factors including the amount of
the Company's investment in a particular film. In some cases, the Company is
entitled to only a distribution fee based upon a percentage of the film's gross
revenues in a particular territory or territories and media. In other
circumstances, the Company may have a substantial investment in the film (for
example, as a result of minimum guarantee commitments, rights acquisition costs,
or print and advertising commitments) and is dependent upon the film's actual
performance in order to generate a positive gross margin. Other factors that
impact gross margins include market acceptance of a film, the budget of the
film, and management's analysis of the motion picture's prospects (which under
the individual film forecast method impacts the rate of amortization).
Selling, general and administrative expenses, net of amounts capitalized
to film costs, increased by $873,915 (32.1%) to $3,595,660 for the year ended
December 31, 1996 from $2,721,745 for the year ended December 31, 1995. The
Company capitalizes certain overhead costs incurred in connection with its
acquisition of rights to a motion picture and creation of marketing materials
for a motion picture by adding such costs to the capitalized film costs of
the motion picture. The increase in selling, general and administrative
expenses, net of amounts capitalized to film costs, was primarily due to
generally greater numbers of personnel in the year ended December 31, 1996
over that of the prior year, increased personnel costs related thereto,
bonuses of approximately $175,000 paid to the Company's executive officers
(other than Ellen Dinerman Little and Robert B. Little) relating to the
Merger, generally greater numbers of personnel in the year ended December 31,
1996 over that of the prior year and increased compensation paid in December
31, 1996 over that of the prior year. Additionally, bad debt expense
reflecting subdistributor cancellations for the year ended December 31, 1996
was approximately $100,000 greater than the year ended December 31, 1995.
Other income decreased by $231,523 (88%) to $32,472 for the year ended
December 31, 1996 from $263,995 for the year ended December 31, 1995. The
decrease was primarily the result of increased interest expense, net of
capitalized interest, of $88,432 over the prior year, as well as decreased
discounts from suppliers of approximately $85,000 in the year ended December
31, 1996 compared to December 31, 1995 and approximately $44,000 less income
from the rental of certain editing equipment that was sold in 1995. The
Company capitalizes interest associated with its acquisition of motion
pictures to the applicable motion picture's film costs.
As a result of the above, the Company, had income before taxes for the year
ended December 31, 1996 of $1,665,269 compared to income before taxes of
$2,894,066 for the year ended December 31, 1995.
Pre-Merger Overseas was an S-Corporation for federal income tax purposes
and, accordingly, was not subject to federal income taxes for periods from 1989
through the date of the Merger. See "Certain Tax Related Matters" below. The
Company's tax provision for 1996 includes a one-time, non-recurring deferred
federal income tax charge of approximately $2,600,000 relating to the
termination of Pre-Merger
34
<PAGE>
Overseas's S corporation status which occurred immediately upon the Merger.
The balance of the income tax provision for the year ended December 31, 1996
represents federal income tax of approximately $190,000 on income of the
Company for the two months following the Merger, state income taxes for the
year of approximately $110,000 and foreign tax withholdings of approximately
$231,000 on revenues generated in certain countries during the year that are
required to withhold taxes on film royalties paid to a U.S. company. As a
result of the federal income taxes for the two months following the Merger,
the Company's effective tax rate, exclusive of the one-time, non recurring
deferred federal income tax charge, increased to approximately 32% for the
year ended December 31, 1996 compared to 15% for the year ended December 31,
1995.
As a result of the foregoing including the one time, non-recurring deferred
federal income tax charge, the Company had a net loss for the year ended
December 31, 1996 of $1,446,098. This is in comparison to net income of
$2,461,161 for the year ended December 31, 1995.
On a pro forma basis, giving effect to the Merger Note being issued on
January 1, 1995, and concurrent termination of S Corporation status as if it
had occurred January 1, 1995 (by giving effect to assumed additional interest
expense relating to the Merger Note and a pro forma effective tax rate of
36%, but exclusive of the one-time non-recurring deferred federal income tax
charge), pro forma net income for the year ended December 31, 1996 was
$998,168 compared to pro forma net income for the year ended December 31,
1995 of $1,745,610. See "Item 6 - Selected Financial Information" and the
notes thereto as well as Note 2 to the Company's Consolidated Financial
Statements for additional information with respect thereto including pro
forma net income per share and the calculation thereof.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Revenues increased by $938,416 (4.5%) to $21,672,510 for the year ended
December 31, 1995 from $20,734,094 for the year ended December 31, 1994. This
increase was primarily due to domestic theatrical revenues generated by the two
motion pictures released by the Company through First Look Pictures in 1995, The
Secret of Roan Inish and Party Girl. The operations of First Look Pictures,
previously independent of the Company, were combined with the Company in 1995.
See "Overview" above. During the year ended December 31, 1995, 20 motion
pictures each generated in excess of $200,000 in revenues, with an aggregate of
$16,584,445, or 76%, of total revenues for such period attributable to those
films. During the comparable period in 1994, 15 motion pictures each generated
in excess of $200,000 in revenues, with an aggregate of $13,725,942, or 66%, of
total revenues for such period attributable to those films.
Film costs as a percentage of revenues decreased to 75.3% for the year
ended December 31, 1995 from 79.1% for the year ended December 31, 1994. The
decrease in the ratio of film costs to revenues was primarily due to both
higher distribution fees associated with those motion pictures generating
significant revenues released theatrically in the year ended December 31,
1995 (including motion pictures released theatrically in the United States by
First Look Pictures) compared to the prior year, as well as higher gross
profit margins generated by the Company during the fiscal year ended December
31, 1995 on motion pictures in which the Company owned an interest in the
copyright compared to the gross margins on such films in the prior year.
Selling, general and administrative expenses, net of amounts capitalized to
film costs, increased by $570,531 (26.5%) to $2,721,745 for the year ended
December 31, 1995 from $2,151,214 for the year ended December 31, 1994. This
increase was primarily due to the Company's absorption of the operations of
First Look Pictures, including space and personnel costs. Also, primarily as a
result of a general expansion in the
35
<PAGE>
Company's operations, including an increase in the number of films financed by
the Company, the Company hired additional staff and leased additional office
space in the year ended December 31, 1995.
Interest expense, net of capitalized interest, decreased by $90,113 (50.1%)
to $89,637 for the year ended December 31, 1995 from $179,750 for the year ended
December 31, 1994. The decrease was primarily due to interest rate reductions on
certain borrowings and capitalization of certain interest costs which previously
had been expensed.
Other income decreased by $116,161 (26.8%) to $317,917 for the year ended
December 31, 1995 from $434,078 for the year ended December 31, 1994. Other
income in such periods represented primarily volume rebates from suppliers,
equipment usage fees relating to computerized editing systems and, in 1994, a
one-time, non-recurring reversal of excess state income tax accrual. The
decrease was primarily due to the reversal in 1994 of the excess state income
tax accrual.
The Company's effective tax rate was 15% in 1995 compared to 12.1% in 1994.
As a result of the above, the Company had net income for the year ended
December 31, 1995 of $2,461,161 compared to net income of $2,145,473 for the
prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital for the acquisition of film rights, the
funding of distribution costs and expenses, the payment of ongoing overhead
costs and the repayment of debt. Apart from the funds provided as a result of
the Merger of Pre-Merger Overseas with EMAC, the principal sources of funds
for the Company's operations have been cash flow from operations and bank
borrowings, primarily through the Company's revolving credit facility
described below. Immediately preceding consummation of the Merger, EMAC held
cash of approximately $11,153,000 in a trust account, to be used exclusively
in connection with any concluded business combination. Upon consummation of
the Merger, $1,500,000 was paid from the trust account to the existing
shareholders of Pre-Merger Overseas as part of the Merger consideration and
the remainder of approximately $9,653,000 was released to the Company for its
unrestricted use. After consummation of the Merger, the Company repaid a
$3,500,000 loan from Coutts & Co., used to fund a $3,500,000 distribution to
the Pre-Merger Overseas shareholders, as more fully described below.
Additionally, the Company used funds provided by the Merger to pay expenses
of the Merger and to repay additional debt.
The Company's cash flows provided by/(used in) operating, investing and
financing activities in 1994, 1995 and 1996 were as follows:
Year Ended December 31,
1994 1995 1996
Operating. . . . . . . . $16,471,868 $21,352,387 $18,697,203
Investing. . . . . . . . (17,199,813) (21,376,982) (34,344,696)
Financing. . . . . . . . 1,705,730 540,366 13,480,620
Cash flow from operating activities consists primarily of cash collections
generated by the sale, license or other exploitation of distribution and other
film rights by the Company. Investing activities consist primarily of additions
to film costs, but also include expenditure on property and equipment and other
36
<PAGE>
activities that utilize cash. Financing activities include the funds provided
by the Merger as described above, as well as bank or other borrowings, and
other activities that give rise to additional cash to the Company (decreased
for periods prior to the Merger by distributions to the stockholders of
Pre-Merger Overseas and decreased for periods after the Merger by payments on
the Merger Note (the $2,000,000, five year, secured promissory note issued as
part of the Merger Consideration)).
From January 1, 1989 to October 31, 1996, Pre-Merger Overseas was treated
for federal income tax purposes as an S corporation under the Internal Revenue
Code of 1986, as amended. During the fiscal years ended December 31, 1994, 1995
and from January 1, 1996 through October 30, 1996, Pre-Merger Overseas declared
aggregate S corporation distributions to its stockholders of $652,549, $823,248
and $4,252,991, including a $3,500,000 distribution in July 1996 as described
below. No distributions have been made since the Merger. Management of the
Company presently intends to retain future earnings to finance the expansion
and development of its business and not pay dividends on its capital stock. In
addition, certain covenants in the Company's Credit Facility, described below,
substantially restrict the payment of cash dividends. See also "Item 5 - Market
for Registrant's Common Equity and Related Stockholder Matters - Dividends."
During the next twelve months, the Company currently intends to acquire
rights to and distribute approximately 12 to 18 films (including
approximately eight films to be distributed by the Company in the domestic
theatrical market through its First Look Pictures operations). The Company,
alone or in conjunction with others, currently intends to selectively finance
(typically by agreeing to pay a minimum guarantee in connection with
acquisition of distribution rights by the Company) all or a portion of the
production costs of, or produce, approximately six to ten of such films. As
the motion picture business is subject to numerous uncertainties, including,
among other things, financing requirements, personnel availability, and the
release schedule of competing films, no assurance can be given that such
goals will be met (or that such goals will not be exceeded). In addition to
the Company's obligations reflected on the balance sheet as of December 31,
1996, as of such date the Company had contractual obligations for advances,
minimum guarantee payments, and prints and advertising spending of $2,108,000
contingent upon completion and delivery of certain motion pictures. The
Company also has guaranteed a $325,000 loan from a bank to Neo Motion
Pictures, the balance of which at December 31, 1996 was approximately
$290,000 in principal and accrued interest. See "Item 13 - Certain
Relationships and Related Transactions." As of December 31, 1996, the Company
also had deferred revenue relating to distribution commitments and guarantees
from sub-distributors of approximately $553,000. For several reasons,
including (i) the likelihood of continued industry-wide increases in
acquisition, production and marketing costs (see "Inflation and Related
Considerations" below), (ii) the Company's intent to gradually and
selectively acquire rights to or produce films that have greater production
values (often as a result of larger budgets), and (iii) the Company's
increasing role as the principal financier of a greater portion of the motion
pictures it distributes by providing minimum guarantee commitments, the
Company's costs and expenses, and thus the capital required by the Company in
its operations are likely to increase in the future. See "Overview", above.
The Company has a revolving credit facility (the "Credit Facility") under
an agreement (the "Syndication Agreement") with Coutts & Co. ("Coutts"), as an
agent and lender, and Berliner Bank A.G. London Branch ("Berliner"), as a
lender. The Syndication Agreement provides for total borrowings of $27,000,000
(increased from $23,000,000 upon consummation of the Merger), of which up to
$5,000,000 may be borrowed on a revolving basis for the Company's working
capital needs (the "Operating Facility"), up to $1,000,000 (the "Local
Facility") is available to be issued as letters of credit to secure a local bank
line of credit (the "Local Line"), and up to $21,000,000 may be borrowed to fund
the acquisition of motion pictures or to fund distribution costs, including
print and advertising costs, associated with motion pictures
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acquired by the Company (the "Film Facilities"). The interest rate payable on
borrowings under the Syndication Agreement is 3% above the London Inter-Bank
Offered Rate ("LIBOR") in effect from time to time for one, three or six months,
as requested by the Company. In addition to an annual management fee, there is a
commitment fee on the daily unused portion of the Operating Facility of 1% per
annum, and fees with respect to the Local Facility of 2% of the face amount of
issued letters of credit. Fees on the Film Facilities include 2% of the amount
of cash advances or, in most circumstances, 2% of the face amount of each letter
of credit issued under the Film Facilities, as well as a percentage of gross
receipts of the film acquired or financed payable from the Company's net
earnings from the film, which amounted in 1996 to less than $10,000.
The Company borrows funds under Film Facilities' on a film-by-film basis,
with each such Film Facility treated as a separate loan, generally maturing 12
months after the first drawdown. Coutts and Berliner must approve each separate
Film Facility, such approval to be granted in their sole discretion. Amounts
available under the Film Facilities are also available to be issued as letters
of credit or bank guarantees. As of March 15, 1997, an aggregate of
approximately $17,416,972 was outstanding under the Film Facilities and
Operating Facility at an average interest rate on the outstanding amounts of
approximately 8.5% per annum. As of March 15, 1997, $1,000,000 in face amount
of letters of credit had also been issued under the Local Facility to secure a
line of credit that the Company has received from City National Bank (under
which $679,000 was outstanding as of March 15, 1997 bearing interest at 7.0% per
annum). If the letters of credit are drawn upon, the Company must repay the
amounts advanced by the banks upon demand.
Amounts outstanding under the Operating Facility must be repaid on the date
that the commitment to lend under the Syndication Agreement expires. The
commitment to lend under the Syndication Agreement is reviewed by Coutts and
Berliner on an annual basis and will expire on May 9, 1997, the date of the next
annual review. Based upon management's discussions with the lenders under the
Credit Facility, the Company currently anticipates that the Credit Facility
will be renewed for a one or two year period. In the event that the
commitment to lend under the Credit Facility is not renewed by Coutts and
Berliner upon its expiration, management of the Company anticipates that the
Company will seek to refinance the Credit Facility by obtaining a replacement
facility from another lender or group of lenders or enter into alternative
financing arrangements, although no assurances can be given that a
replacement facility or any alternative financing arrangements will be
entered into or that a replacement facility (or a renewal of the Credit
Facility or any alternative financing arrangements) will be entered into on
terms or in amounts similar to the Credit Facility.
The Syndication Agreement which is secured by substantially all of the
assets of the Company and its subsidiaries, contains a number of covenants
and other requirements, including requirements that the Company maintain a
certain consolidated net worth and that 30% of the amount outstanding under
the Film Facilities (including issued but unexercised letters of credit) be
collateralized by cash or receivables acceptable to the banks; requirements
that may substantially restrict the payment of dividends by the Company. The
Syndication Agreement also, among other things, restricts the creation or
incurrence of indebtedness and the issuance of additional securities and
requires aggregate key man life insurance on Ms. Little, Mr. Little and Mr.
Lischak of $6,750,000. Events of Default under the Syndication Agreement
include, among other things, a change of control of the Company, the failure,
in certain circumstances, of Ellen Dinerman Little or Robert B. Little to
serve as a director or be employed in the capacity set out in their
respective employment agreements, the failure of the Littles, together with
their director nominees (See "Item 10 - Directors and Executive Officers of
the Registrant - Management Arrangements"), to constitute a majority of the
Board of Directors of the Company, or a decrease in the Little's ownership
below certain levels.
In July 1996, Pre-Merger Overseas borrowed $3,500,000 from Coutts (the
"July Loan"). Such loan, which had a maturity of December 31, 1996, bore
interest at approximately 6.5% per annum and was secured by the personal
guarantees of the former stockholders of Pre-Merger Overseas (the Littles and
Mr. Lischak) and $3,500,000 in funds on deposit with Coutts provided by such
stockholders. Proceeds of the loan were used to make a distribution to the
stockholders of Pre-Merger Overseas in July 1996. At December 31, 1996, the
entire principal amount of the July Loan as well as approximately $12,250 in
accrued interest had been fully repaid and fees of $8,750 were accrued but
unpaid (which were paid as of March 15, 1997). None of such stockholders of
the Company are obligated to provide any funds to the Company or to guarantee
or secure the Credit Facility or any borrowings of the Company in the future.
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As of December 31, 1996, the Company had cash and cash equivalents of
$353,689 compared to cash and cash equivalents of $2,433,153 as of December 31,
1995. The difference relates primarily to lower borrowings on the Operating
Facility as of December 31, 1996 as compared to December 31, 1995. Additionally,
at December 31, 1996, the Company had restricted cash of $46,037 held by the
Company's primary lender, to be applied against various Film Facilities.
The Company believes that its existing capital, funds from operations,
borrowings under the Credit Facility, and other available sources of capital
will be sufficient to enable the Company to fund its planned acquisition,
distribution and overhead expenditures for the next 12 months.
INFLATION AND RELATED CONSIDERATIONS
Management of Overseas Filmgroup believes that neither the Company's
operating revenues nor costs materially increased in the last fiscal year due to
general economic inflation or general price changes. In particular, management
believes that no material increases in revenue were attributable to increases in
ticket prices for admission to motion picture theaters. The costs associated
with the production (such as the salaries of recognizable cast) and distribution
and marketing (such as print and advertising costs) of motion pictures have
increased dramatically in recent years. These costs will likely continue to
increase in the future, thereby increasing the capital required for the
operations of motion picture producers and distributors, including the Company,
and the risk borne by such parties. As a result, such cost increases may affect
results of operations of the Company in the future.
EXCHANGE RATE CONSIDERATIONS
A significant portion of the Company's revenue (approximately 72% in 1996)
is from the distribution of motion pictures and the licensing of distribution
rights in territories outside the United States. The Company's financial
results and results of operations could be negatively affected by such factors
as changes in foreign currency exchange rates and currency controls, as well as
trade protection measures, motion picture piracy, content regulation. longer
accounts receivable collection patterns, changes in regional or worldwide
economic or political conditions or natural disasters. Because the Company's
contracts are typically denominated in U.S. dollars, advances and minimum
guarantees of sublicense fees payable to the Company by foreign sub-
distributors, and advances and minimum guarantees to be paid by the Company to
foreign producers in connection with the acquisition of distribution rights, are
generally unaffected by exchange rate fluctuations. However, to the extent the
Company's agreements with foreign sub-distributors require such sub-distributors
to pay the Company a percentage of revenues in excess of any advance or minimum
guarantee, fluctuations in the currencies in which such revenues are received by
the sub-distributor may affect the amount of U.S. dollars received by
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the Company in excess of any minimum guarantee. Exchange rate fluctuations
could also affect the ability of sub-distributors to bid for and acquire rights
to motion pictures distributed by the Company. Management of the Company does
not believe exchange rate fluctuations have had a material effect on the
Company's results of operations in the past, although no assurances can be given
that these fluctuations will not have a material impact on its results of
operations in the future.
CERTAIN TAX RELATED MATTERS
From January 1989 until October 31, 1996, Pre-Merger Overseas was treated
for federal (but not state) income tax purposes as an S Corporation. As a
result, the Pre-Merger Overseas's taxable income during this period was taxed
for federal purposes directly to the Pre-Merger Overseas stockholders (Ellen
Dinerman Little, Robert B. Little and William F. Lischak), rather than to Pre-
Merger Overseas. Pursuant to the Merger Agreement, the Company entered into a
Tax Reimbursement Agreement, dated October 31, 1996, with Ms. Little, Mr. Little
and Mr. Lischak (the "Tax Reimbursement Agreement"). Under the Tax
Reimbursement Agreement, the Company agreed to reimburse these individuals for
up to $400,000 of federal income taxes payable for the short 1996 S corporation
taxable year of Pre-Merger Overseas ending at the time of the Merger (the "1996
Reimbursement Amount"). As of March 31, 1997, neither Pre-Merger Overseas nor
the Pre-Merger Overseas stockholders had filed their tax returns for the short
1996 S corporation taxable year of Pre-Merger Overseas and no amounts had been
paid under the Tax Reimbursement Agreement.
The corporate income tax returns of Overseas Filmgroup for its 1992 and
1993 fiscal years are currently under audit by the Internal Revenue Service
("IRS") and returns for the 1994 and 1995 fiscal years and the 1996 fiscal
year (which is currently on extension for filing) remain open to audit. In
the absence of the Tax Reimbursement Agreement, the stockholders of
Pre-Merger Overseas during such periods, and not the Company, would be
responsible for any tax liability assessed as a result of any federal income
tax audits of pre-Merger periods because of the S corporation status for such
periods. Under the Tax Reimbursement Agreement, the Company agreed to
indemnify the three stockholders of Pre-Merger Overseas for any federal
income tax liabilities of theirs (including penalties and interest) arising
from any adjustment to the income, deductions or credits of Pre-Merger
Overseas for periods prior to the Merger, together with any federal and state
income tax arising from such indemnity payments. The Company's reimbursement
obligations are limited to $150,000 (plus any of the $400,000 1996
Reimbursement Amount not used to reimburse such individuals for their federal
income taxes for the short 1996 S Corporation taxable year), except with
respect to adjustments to the Company's income, deductions or credits which
are reasonably expected to result in decreases to the Company's income or
increases in its deductions or credits after the Merger. For purposes of the
Consolidated Financial Statements of the Company, accrued expenses as of
December 31, 1996, include a $200,000 estimate of the aggregate payments to
be made to the shareholders of Pre-Merger Overseas pursuant to the Tax
Reimbursement Agreement. No such payments have been made under the Tax
Reimbursement Agreement through March 31, 1997. The actual amounts
ultimately paid under such agreement may be materially different from the
estimate based upon the tax returns of Pre-Merger Overseas and the
stockholders thereof for the short S Corporation taxable year once such
returns are filed and depending upon the results of audits of S Corporation
periods.
As a result of the termination of Pre-Merger Overseas's S corporation
status at the time of the Merger, the Company experienced a one-time,
non-recurring $2,600,000 accounting charge to income for deferred income taxes
resulting from such termination. The Company is now subject to federal and
state corporate income tax. In addition, certain foreign jurisdictions require
tax withholding on revenues payable to the Company by foreign sub-distributors
in such territories.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Report of Independent Accountants, Consolidated Financial Statements
and Notes to the Company's Consolidated Financial Statements appear in a
separate section of this Report (beginning on page F-1) following Part IV.
See the Index to Financial Statements under "Item 14 - Exhibits, Financial
Statement Schedules, and Reports on Form 8-K."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth information with respect to the current
directors and executive officers of the Company:
NAME AGE CURRENT POSITION WITH THE COMPANY
- ---- --- ---------------------------------
Robert B. Little 51 Co-Chairman of the Board and Co-Chief
Executive Officer
Ellen Dinerman Little 54 Co-Chairman of the Board, Co-Chief
Executive Officer and President
Stephen K. Bannon 43 Vice Chairman of the Board, Chairman of
the Executive Committee of the Board
William F. Lischak 39 Chief Operating Officer, Chief Financial
Officer, Secretary and Director
Richard S. Guardian 41 Senior Vice President, Worldwide
Distribution
MJ Peckos 42 Senior Vice President, Domestic
Distribution and Marketing
Mansour Mostaedi 45 Senior Vice President, Finance and
Accounting
Alessandro Fracassi 45 Director
Jeffrey A. Rochlis 51 Director
Scott K. Vorse 36 Director
The directors of the Company are divided into three classes having terms
expiring at the annual meeting of the Company's stockholders in 1997 (Robert B.
Little and Stephen K. Bannon), 1998 (Ellen Dinerman Little and Scot K. Vorse)
and 1999 (William F. Lischak, Jeffrey A. Rochlis and Alessandro Fracassi) or
such later dates as their successors are elected and have qualified. At each
annual meeting of stockholders, successors to the class of directors whose terms
expire at such meeting will be elected to serve for three-year terms and until
their successors are elected and have qualified. All officers serve at the
discretion of the Board of Directors, subject to any applicable employment
agreements. See "Employment Agreements" below. See also "Management
Arrangements" below for a description of certain arrangements regarding the
election of directors. Ellen Dinerman Little and Robert B. Little are married
to each other.
CURRENT DIRECTORS AND EXECUTIVE OFFICERS.
ROBERT B. LITTLE became Co-Chairman of the Board of Directors and
Co-Chief Executive Officer of the Company upon consummation of the Merger on
October 31, 1996. Mr. Little co-founded the predecessor of Pre-Merger
Overseas in February 1980 and served as Chairman of the Board of Pre-Merger
Overseas from February 1987 until the Merger and its Chief Executive Officer
from February 1990 until the Merger. Mr. Little was a founding member of the
American Film Marketing Association, the organization which established the
American Film Market, and served multiple terms on its Board of Directors. In
1993, Mr. Little served on the City of Los Angeles Entertainment Industry
Task Force, a task force composed of industry leaders focused on maintaining
and enhancing Los Angeles's reputation as the entertainment capital of the
world. Mr. Little is also a founding member of The Archive Council, an
industry support group for the
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University of California at Los Angeles (UCLA) Archive Film Preservation
Program, and a member of the Board of Directors of the Antonio David Blanco
Scholarship Fund, an endowment fund that annually benefits deserving students
in the UCLA Department of Film and Television.
ELLEN DINERMAN LITTLE became Co-Chairman of the Board of Directors,
Co-Chief Executive Officer and President of the Company upon consummation of
the Merger. Ms. Little co-founded the predecessor of Pre-Merger Overseas in
February 1980 and served as its President and Director, as well as the
President and a Director of Pre-Merger Overseas since its incorporation in
January 1984 until the Merger. Ms. Little is a founding member of The Archive
Council, serves on the Board of Directors of the Antonio David Blanco
Scholarship Fund, and has been an active participant in the American Film
Marketing Association, having served on various of its committees. Ms. Little
is Executive Producer of Richard III, which was nominated for two Academy
Awards.
STEPHEN K. BANNON has been a director of the Company since its
incorporation as EMAC in December 1993. Since the Merger, he has served as
Vice Chairman of the Board of Directors of the Company and Chairman of its
Executive Committee. Previously, from the incorporation of EMAC until the
Merger, he served as Chairman of the Board of Directors of EMAC. Since June
1991, Mr. Bannon has been the Chief Executive Officer of Bannon & Co., an
investment banking firm that specializes in the entertainment, media and
communications industries. In October 1996, Bannon & Co. entered into an
alliance agreement with Societe Generale, a private French bank. As part of
an investment banking assignment, from April 1, 1994 to December 31, 1995,
Mr. Bannon served as acting Chief Executive Officer of SBV, a division of
Decisions Investment Corp., which operates the Biosphere 2 project near
Oracle, Arizona. Bannon & Co. is a registered broker-dealer under the
Securities Exchange Act of 1934, as amended, and Mr. Bannon is a registered
principal with the National Association of Securities Dealers, Inc. ("NASD").
Bannon & Co. succeeded to the business of Talbott, Bannon & Co., of which Mr.
Bannon was a general partner from January 1990 to June 1991. From 1985 to
1990, Mr. Bannon was employed in various capacities by Goldman, Sachs & Co.,
most recently as Vice President, Investment Banking, where his
responsibilities included advising clients on mergers and acquisitions and
corporate finance in the entertainment and media industry.
WILLIAM F. LISCHAK became Chief Operating Officer, Chief Financial Officer
and Secretary of the Company upon consummation of the Merger. Mr. Lischak served
as Pre-Merger Overseas's Chief Operating Officer from September 1990 until the
Merger and its Chief Financial Officer from September 1988 until the Merger. Mr.
Lischak, a certified public accountant, previously had worked in public
accounting, including from 1982 to 1988 with the accounting firm of Laventhol &
Horwath. Mr. Lischak has a Masters Degree in Taxation and has taught courses in
the extension program at UCLA in accounting, finance and taxation for motion
pictures and television.
RICHARD S. GUARDIAN became Senior Vice President, Worldwide Distribution,
of the Company upon consummation of the Merger, having served since August 1994
in the same position with Pre-Merger Overseas. He joined Pre-Merger Overseas as
General Manager, Sales and Marketing in January 1991 and became Vice President,
Sales and Marketing in August 1992. Mr. Guardian also previously served in a
variety of other positions in the motion picture industry, including as
Distribution and Marketing Manager for the independent film company, De
Laurentiis Entertainment Group, Ltd., and North American Manager for the
Australian Film Commission.
MJ PECKOS became Senior Vice President, Domestic Distribution and Marketing
of the Company upon consummation of the Merger, having served since May 1995 in
the same position with Pre-Merger Overseas. From January 1995 through April
1995, Ms. Peckos served as Vice President of Advertising for Dazu Advertising, a
graphic design firm which is active in the entertainment industry. Prior to
that,
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she served from January 1992 to November 1994 as Senior Vice President of
Marketing & Distribution for Academy Entertainment, an independent film
company, and from July 1991 to December 1992 as Co-Managing Director of CLG
Films, also an independent film company. Ms. Peckos also previously served
with several other companies in the motion picture industry including The
Samuel Goldwyn Company, MGM and Warner Bros.
MANSOUR MOSTAEDI became Senior Vice President, Finance and Accounting of
the Company upon consummation of the Merger, having served since March 1996 in
the same position with Pre-Merger Overseas. Previously, he served as Vice
President, Finance and Accounting of Pre-Merger Overseas (beginning October
1994) and Controller (beginning March 1991).
ALESSANDRO FRACASSI, became a Director of the Company upon consummation of
the Merger. Mr. Fracassi founded Racing Pictures s.r.l. (an Italian motion
picture production and distribution company) in 1976 and has served as its
President since such date. Mr. Fracassi has extensive experience in the field of
Pan-European motion picture and television production. He has served as a Vice
President of the Italian Producers Association, an Italian entertainment
industry trade group. Additionally, Mr. Fracassi and his family are active
investors in various privately held businesses in Italy.
JEFFREY A. ROCHLIS has been a Director of the Company since its
incorporation as EMAC in December 1993 and also served from such date until
the Merger as President and Chief Executive Officer of EMAC. Mr. Rochlis is
the founding principal of Rochlis & Associates, a firm established in 1989
which specializes in new product/business development in the entertainment
and media industry. From 1987 through 1989, Mr. Rochlis served as the
Executive Vice President of Walt Disney Imagineering, responsible for the
development of new Disney theme parks and attractions around the world. From
1985 through 1987, he served as Executive Vice President of The Walt Disney
Studios, responsible for finance, administration, operations and new business
development for Walt Disney, Touchstone and Buena Vista motion picture,
television and home video divisions worldwide. From 1983 through 1985, Mr.
Rochlis was the President and Chief Operating Officer of the video game
company, Sega Enterprises, Inc. Mr. Rochlis served as a Director of Paramount
Pictures Corporation from 1983 through 1985.
SCOT K. VORSE became a Director of EMAC in January 1995 and continued to
serve as a Director of the Company following the Merger. From January 1995 until
the Merger, he served as Treasurer and Secretary of the EMAC, and from January
1995 until November 1996, he served as Vice President of the EMAC. Since June
1991, Mr. Vorse has been an Executive Vice President, Managing Director and the
Chief Financial Officer of Bannon & Co. Mr. Vorse is a registered principal with
the NASD. On October 1, 1996, Bannon & Co. entered into an alliance agreement
with Societe Generale a private French bank. From 1985 to May 1991, Mr. Vorse
was employed in various capacities by Goldman, Sachs & Co., most recently as
Vice President -- Corporate Finance, where his responsibilities included
advising clients on mergers and acquisitions and private and public financings.
EXECUTIVE COMMITTEE
Ellen Dinerman Little, Robert B. Little and Stephen K. Bannon currently
serve on the Executive Committee, with Mr. Bannon serving as Chairman of such
committee. During intervals between the meetings of the Board of Directors of
the Company, the Executive Committee exercises all powers of the Board of
Directors (except those powers specifically reserved by Delaware law or the
Company's Bylaws to the full Board of Directors) in the management and direction
of the business and conduct of the affairs of the Company in all cases in which
specific directions have not been given by the Board of Directors.
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COMPENSATION COMMITTEE
Messrs. Bannon and Vorse currently serve on the Compensation Committee. The
Compensation Committee administers the Company's stock option plans to the
extent contemplated thereby and reviews, approves, and makes recommendations
with respect to compensation of officers, consultants and key employees. See
"Stock Option Plans" under "Item 11 - Executive Compensation" below.
AUDIT COMMITTEE
The Audit Committee of the Company currently consists of Messrs. Bannon and
Vorse. The function of the Audit Committee is, among other things, to review
and approve the selection of, and all services performed by, the Company's
independent auditors; to meet and consult with and to receive reports from, the
Company's independent auditors and the Company's financial and accounting staff;
and to review and act with respect to the scope of audit procedures, accounting
practices and internal accounting and financial controls of the Company.
MANAGEMENT ARRANGEMENTS
In accordance with the Merger Agreement, the current directors of the
Company were elected at the Special Meeting of Stockholders in lieu of Annual
Meeting held in connection with the Merger. The current directors consist of
four persons designated prior to the Merger by Pre-Merger Overseas (Ellen
Dinerman Little, Robert B. Little, William F. Lischak and Alessandro Fracassi)
and three persons designated prior to the Merger by the Company (Stephen K.
Bannon, Jeffrey A. Rochlis and Scot K. Vorse). Pursuant to the Merger
Agreement, upon consummation of the Merger a Stockholders' Voting Agreement,
dated as of October 31, 1996, was entered into among the Company, Ellen Dinerman
Little, Robert B. Little, William F. Lischak, and certain persons who were
stockholders of the Company prior to consummation of the Company's initial
public offering (Jeffrey A. Rochlis, Barbara Boyle, the Hoberman Family Trust,
John Hyde, Sparta Partners III, Stephen K. Bannon, Scot K. Vorse and Gary M.
Stein - collectively, the "Initial Stockholders"). The parties to the
Stockholders' Voting Agreement have agreed to use their best efforts to cause
the Board of Directors of the Company to consist of seven members during the
term of such agreement, including four individuals designated by Ms. Little and
Mr. Little and three individuals designated by the Initial Stockholders. Each
party to the Stockholders' Voting Agreement also agreed that the following
actions shall require the affirmative vote of at least seventy-five percent of
the authorized number of directors of the Company: (i) any amendment to the
Restated Certificate of Incorporation of the Company or the Company's Bylaws
that would change the voting rights of stockholders, the number or classes of
directors, or the notice and quorum requirements for meetings of the Board of
Directors, its committees or the shareholders; (ii) a merger or sale of all or
substantially all of the assets of the Company; (iii) the designation or
issuance of any preferred stock and (iv) any amendments to the operating
guidelines described below (collectively, the "Supermajority Provisions"). The
Stockholders' Voting Agreement terminates eight and one-half years from the date
of the Merger or sooner if the employment of Ms. Little, Mr. Little and Mr.
Lischak is terminated. In addition, the right of Ms. Little and Mr. Little, and
of the Initial Stockholders, to designate directors (but not the obligation to
vote for the designees of others) will terminate (i) as to Ms. Little and Mr.
Little, (A) if they (and Mr. Lischak) own less than 794,444 shares of the
Company's Common Stock, they will be entitled to designate only two directors,
and (B) if they (and Mr. Lischak) own less than 20,000 shares, they will not be
entitled to designate any director; or (ii) as to the Initial Stockholders, (A)
if they own less than 175,000 shares of the Company's Common Stock, they will be
entitled to designate only two directors, (B) if they own less than 125,000
shares, they will be entitled to designate only one director, and (C) if they
own less than 20,000 shares, they will not be entitled to designate any
director.
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In connection with the Merger, operating guidelines for the Board of
Directors and management of the Company were established setting forth certain
general guidelines with respect to the authority and responsibilities of
officers of the Company, the structure and responsibilities of the Board of
Directors and the Executive Committee of the Company, and certain other general
business matters. The Board of Directors has also adopted operating resolutions
implementing the Supermajority Provisions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers and
persons who own more than 10% of the Company's Common Stock ("10% Stockholders")
to file with the Securities and Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Executive officers, directors and 10%
Stockholders of the Company are required by Commission regulations to furnish
the Company with copies of Section 16(a) forms they file. To the Company's
knowledge based solely upon a review of the Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, the Forms 5
furnished to the Company with respect to its most recent fiscal year, and
written representations of the Company's directors, executive officers and 10%
Stockholders, during the fiscal year ended December 31, 1996, all Section 16(a)
filing requirements applicable to the Company's executive officers, directors
and 10% Stockholders were complied with.
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ITEM 11. EXECUTIVE COMPENSATION
The following "Summary Compensation Table" sets forth individual
compensation information with respect to the Company's Co-Chief Executive
Officers (Ellen Dinerman Little and Robert B. Little), EMAC's Chief Executive
Officer until the Merger (Jeffrey A. Rochlis) and four other executive officers
of the Company during the fiscal year ended December 31, 1996 whose total salary
and bonus compensation during fiscal 1996 from the Company (including Pre-Merger
Overseas) was in excess of $100,000 (William F. Lischak, Richard Guardian, MJ
Peckos and Mansour Mostaedi). Such seven executives are referred to herein as
the "Named Executives." Mr. Rochlis, who served as President and Chief Executive
Officer of EMAC from December 1993 until the Merger, received no compensation
for such services other than reimbursement for out-of-pocket expenses incurred
by him in connection with his activities on behalf of EMAC. With respect to the
six Named Executives who were executive officers of Pre-Merger Overseas and
became executive officers of the Company upon consummation of the Merger, the
Summary Compensation Table provides compensation information for services
rendered to Pre-Merger Overseas during the fiscal year ended December 31, 1995
and to Pre-Merger Overseas and the Company during the fiscal year ended December
31, 1996.
Following the Summary Compensation Table are certain additional charts and
tables detailing other aspects of the compensation of the Named Executives
including (i) an Option/SAR Grants Table that includes information regarding
individual grants of options made to the Named Executives during fiscal 1996
along with the grant date present value of such options, and (ii) a table that
indicates whether any of the Named Executives exercised options in fiscal 1996
and includes the number and value of unexercised options held by the Named
Executives at December 31, 1996.
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
AWARDS
---------------------------------------------------------
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND COMPENSATION OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) SARS(#) COMPENSATION($)
- ------------------ ---- ---------- --------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ROBERT B. LITTLE 1996 $110,158 $25,000 $ -- (1) 1,100,000 $18,858 (2)
CO-CHAIRMAN OF THE 1995 90,000 0 37,709 (3) 0 16,455 (4)
BOARD AND CO-CHIEF
EXECUTIVE OFFICER
ELLEN DINERMAN LITTLE 1996 110,457 $25,000 -- (1) 1,100,000 24,812 (5)
CO-CHAIRMAN OF THE BOARD, 1995 90,000 0 38,720 (6) 0 30,134 (4)
CO-CHIEF EXECUTIVE
OFFICER AND PRESIDENT
JEFFREY A. ROCHLIS 1996 0 0 0 5,000 0
FORMER PRESIDENT AND 1995 0 0 0 0 0
CHIEF EXECUTIVE 1994 0 0 0 0 0
OFFICER OF EMAC
WILLIAM F. LISCHAK 1996 137,198 212,500 -- (1) 0 2,994 (7)
CHIEF OPERATING OFFICER, 1995 118,933 75,090 -- (1) 0 519 (7)
CHIEF FINANCIAL OFFICER
AND SECRETARY
RICHARD GUARDIAN 1996 126,244 81,529 -- (1) 0 2,942 (7)
SENIOR VICE PRESIDENT 1995 110,969 53,636 -- (1) 0 1,648 (8)
MJ PECKOS 1996 126,100 40,000 -- (1) 0 2,922 (7)
SENIOR VICE PRESIDENT 1995 67,976 0 -- (1) 0 434 (7)
MANSOUR MOSTAEDI 1996 87,923 20,000 -- (1) 0 1,723 (7)
SENIOR VICE PRESIDENT 1995 77,745 21,455 -- (1) 0 350 (7)
</TABLE>
47
<PAGE>
- ----------
* This table does not include distributions made to the stockholders of Pre-
Merger Overseas. See "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations."
(1) Perquisites with respect to such Named Executive did not exceed the
lesser of $50,000 or 10% of such executive officer's salary and bonus.
(2) Represents $2,049 for the Company's 1996 contributions on behalf of
such Named executive pursuant to the Company's 401(k) Plan and $16,809 for life
insurance premiums paid by the Company for the benefit of such Named Executive.
(3) Includes $13,959 for automobile lease and maintenance expenses and
$23,750 representing one-half the cost of a home sound system.
(4) Represents life insurance premiums paid by the Company for the benefit
of such Named Executive.
(5) Represents $2,049 for the Company's 1996 contribution on behalf of
such Named Executive pursuant to the Company's 401(k) Plan and $22,763 for life
insurance premiums paid by the Company for the benefit of such Named Executive.
(6) Includes $14,970 for automobile payments and $23,750 representing
one-half the cost of a home sound system.
(7) Represents the Company's contributions on behalf of such Named
Executive pursuant to the Company's 401(k) Plan.
(8) Represents $488 for the Company's 1995 contributions on behalf of
such Named Executive pursuant to the Company's 401(k) Plan and $1,160 for
life insurance premiums paid by the Company for the benefit of such Named
Executive.
48
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
----------------- -----
% OF TOTAL
NUMBER OF OPTIONS/SARS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES IN EXERCISE OR GRANT DATE
OPTIONS/SARS FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#)(1) YEAR ($/SH) DATE ($)
---- -------------- ---- ------ ---- ---
<S> <C> <C> <C> <C> <C>
Ellen Dinerman Little 537,500 (3) 24% $5.00 10/30/03 1,424,375 (2)
562,500 (4) 26% $8.50 10/30/03 1,051,875 (2)
Robert B. Little 537,500 (3) 24% $5.00 10/30/03 1,424,375 (2)
562,500 (4) 26% $8.50 10/30/03 1,051,875 (2)
Jeffrey A. Rochlis 5,000 (5) (2) $5.25 10/31/06 $12,950 (2)
William F. Lischak 0 - - - -
Richard S. Guardian 0 - - - -
MJ Peckos 0 - - - -
Mansour Mostaedi 0 - - - -
</TABLE>
(1) Although the Company's 1996 Basic Stock Option and Stock Appreciation
Rights Plan provides for the granting of stock appreciation rights, no
grant of such rights has been made by the Company.
(2) These values were established using the modified Black-Scholes stock option
valuation model which modifies the Black-Scholes model to include the
impact of the right to exercise options prior to their maturity. The actual
value, if any, an executive may realize upon exercise of such options will
depend upon the excess of the stock price over the exercise price on the
date the option is exercised. Therefore, there can be no assurance that the
value realized by an executive will be at or near the value estimated by
this Black-Scholes model. The estimated values under the model are based on
arbitrary assumptions as to variables and as to interest rates, stock price
volatility and future dividend yield. The above model assumes a period of
four years after grant until exercise, a volatility of the stock price
equal to that experienced by a peer company for the four years prior to
October 31, 1996 (standard deviation 57%), a risk free interest rate of
6.03% (rate as of the grant date of U.S. Treasury Notes with a term of four
years) and a dividend yield of 0%.
(3) The option was exercisable on October 31, 1996 for 100,000 shares of Common
Stock with the balance vesting in five equal annual installments beginning
on October 30, 1997.
(4) The option vests in five equal annual installments beginning on October 30,
1997.
(5) This option was granted after Mr. Rochlis resigned as President and Chief
Executive Officer of EMAC and represents an automatic grant pursuant to the
Company's 1996 Basic Stock Option
49
<PAGE>
and Stock Appreciation Rights Plan to Mr. Rochlis as a non-employee member
of the Company's Board of Directors. See "Board Fees" below. The option
becomes exercisable on October 31, 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE DECEMBER 31, 1996 AT DECEMBER 31, 1996
EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
<S> <C> <C> <C> <C>
Ellen Dinerman Little 0 $ 0 100,000/1,000,000 $0/0
Robert B. Little 0 0 100,000/1,000,000 0/0
Jeffrey A. Rochlis 0 0 0/5,000 0
William F. Lischak 0 0 0 (2) 0
Richard S. Guardian 0 0 0 (2) 0
MJ Peckos 0 0 0 (2) 0
Mansour Mostaedi 0 0 0 (2) 0
</TABLE>
- --------------------
(1) Although the Company's 1996 Basic Stock Option and Stock Appreciation
Rights Plan provides for the granting of stock appreciation rights, no
grant of such rights has been made by the Company.
(2) The Named Executive did not hold any options at December 31, 1996.
BOARD FEES
Pursuant to the Automatic Option Grant Program under the Company's 1996
Basic Stock Option and Stock Appreciation Rights Plan, each individual serving
as a non-employee Board member on the effective date of the Merger (Messrs.
Bannon, Fracassi, Rochlis and Vorse) was automatically granted a non-qualified
option to purchase 5,000 shares of the Company's Common Stock. In addition,
each member of the Board of Directors who is not employed by the Company
receives an automatic grant of a non-qualified option to purchase 5,000 shares
of the Company's Common Stock (i) upon becoming a Board member after the
effective date of the Merger, whether through election at a meeting of the
Company's stockholders or through appointment by the Board of Directors, and
(ii) on the date of each annual meeting of stockholders (beginning with the
annual meeting in 1997), if such individual is to continue to serve as a Board
member after such meeting. Each such automatic option grant is, among other
things, exercisable at the fair market value of the Common Stock on the date of
the automatic grant and is generally exercisable after completion of one year of
service to the Board of Directors measured
50
<PAGE>
from the automatic grant date. In addition, the Company reimburses all
directors for travel and related expenses incurred in connection with their
activities on behalf of the Company. Directors of the Company are not otherwise
compensated for serving on the Board of Directors.
Please see "Item 13 - Certain Relationships and Related Transactions" for a
description of certain transactions involving certain directors and their
affiliates and the Company and its affiliates.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was established upon consummation of
the Merger and currently consists of Messrs. Bannon and Vorse. Mr. Bannon was
Chairman of the Board of Directors of EMAC during 1996 until consummation of the
Merger and currently serves as Vice Chairman of the Company's Board of Directors
and Chairman of its Executive Committee. Mr. Vorse served as Vice President,
Treasurer, and Secretary of EMAC during 1996 through consummation of the Merger.
The Compensation Committee currently administers both of the Company's stock
option plans to the extent contemplated thereby. Prior to the Merger, no
executive officers of EMAC received any cash compensation for services rendered
to EMAC. Prior to the Merger, decisions regarding the compensation of executive
officers of Pre-Merger Overseas were made by Pre-Merger Overseas's principal
stockholders, Ellen Dinerman Little and Robert B. Little. The compensation
arrangements of the senior executive officers of the Company following the
Merger were negotiated between the parties to the Merger.
Messrs. Bannon and Vorse are officers, directors and stockholders of Bannon
& Co., Inc., which, prior to the Merger, made available to EMAC a small amount
of office space, as well as certain office and secretarial services, as required
by EMAC from time to time in consideration of $5,000 per month (an aggregate of
$50,000 in 1996). Such arrangement terminated upon consummation of the Merger.
Prior to the Merger, Messrs. Bannon and Vorse also were reimbursed for out-of-
pocket expenses incurred by them in connection with their activities on behalf
of EMAC.
INDEMNIFICATION
The Company has entered into indemnification agreements with its directors
(including those who are also executive officers) providing for indemnification
by the Company, including in circumstances in which indemnification is otherwise
discretionary under Delaware law. These agreements constitute binding
agreements between the Company and each of the parties thereto, thus preventing
the Company from modifying its indemnification policy in a way that is adverse
to any person who is a party to such an agreement.
EMPLOYMENT AND RELATED AGREEMENTS
ELLEN DINERMAN LITTLE AND ROBERT B. LITTLE. Virtually all decisions
concerning the conduct of the business of the Company, including the motion
picture properties and rights to be acquired by the Company and the arrangements
to be made for the distribution, production and financing of motion pictures by
the Company, are made or are significantly influenced by the Company's senior
executive officers, Ellen Dinerman Little and Robert B. Little. The loss of
either of their services for any reason would have a material adverse effect on
the Company's business and operations and its prospects for the future. In
addition, the Company's credit facility contains covenants and similar
provisions, generally requiring Ms. Little and Mr. Little's continued
involvement with, and control of, the Company. In connection with the Merger,
Ms. Little and Mr. Little each entered into an employment agreement with
51
<PAGE>
the Company with a five year term which commenced on October 31, 1996 and ends
on October 30, 2001. Ms. Little's and Mr. Little's employment agreements
provide for them to serve as Co-Chairs of the Board of Directors, members of the
Executive Committee of the Board of Directors, and Co-Chief Executive Officers
of the Company. Under Ms. Little's employment agreement, she also serves as
President of the Company. Pursuant to these employment agreements, they each
receive fixed annual compensation of $125,000 and an annual bonus of $25,000,
plus such additional bonus, if any, as may be awarded to them by the Company's
Board of Directors or compensation or similar committee, with Ms. Little and Mr.
Little abstaining from any vote thereon. The employment agreements also provide
for certain benefits including, among other things, life, disability and health
insurance, and an automobile allowance. In the event that the relevant
employment agreement is terminated by Ms. Little or Mr. Little for Good Reason
(as defined in the employment agreements and which includes certain changes in
control of the Company), or by the Company other than for Cause (as defined in
the employment agreements), she or he will receive (a) a lump-sum payment equal
to 250% of the greater of (i) the aggregate of all fixed annual compensation to
which she or he would otherwise have been entitled through the balance of the
term or (ii) an amount equal to the fixed annual compensation and annual bonus
for one full year; (b) a lump-sum payment equal to 250% of the aggregate of all
annual bonuses to which she or he would otherwise have been entitled through the
balance of the term; (c) such additional payments as may be necessary to take
into account and reimburse her or him for certain excise taxes which may be
applicable to payments and benefits relating to such termination; (d) for the
remainder of the term, life, disability and health insurance and other benefits
substantially similar to those received prior to termination; and (e) automatic
vesting of any stock options held. Such termination of the relevant employment
agreement would also constitute an event of default under the Merger Note. In
the event of the death or permanent disability of Ms. Little or Mr. Little, she
or he will be entitled to a disability benefit or death benefit to the
deceased's estate equal to the product of two times (i) the aggregate fixed
annual compensation that they were entitled to receive for the full employment
year in which the disability or death occurs, plus (ii) an amount equal to the
annual bonus.
In addition to their employment agreements, each of Ellen Dinerman Little
and Robert B. Little have entered into a Non-Competition Agreement, pursuant to
which she or he have agreed, for a period of five years commencing October 31,
1996, not to (i) own, manage, operate or control any business that competes with
the business of the Company (other than motion picture production activities and
activities that are specifically permitted under their employment agreements,
and other than the right to hold de minimis investments in publicly-held
companies) or (ii) solicit any Company employee or interfere with the
relationship of the Company with any employee, customer, supplier or lessee.
The non-competition obligations terminate earlier than the five-year term if the
individual party's employment is terminated by him or her for Good Reason or by
the Company other than for Cause (as such terms are defined in their employment
agreements), or if the Company fails to pay any amount due under the Merger Note
at a time when Ms. Little and Mr. Little do not control a majority of the Board
of Directors of the Company.
WILLIAM F. LISCHAK. William F. Lischak has an employment agreement with
the Company with a five year term which commenced on October 31, 1996 and ends
on October 30, 2001 and which provides for his services as Chief Operating
Officer and Chief Financial Officer of the Company. Under the agreement, Mr.
Lischak receives an annual base salary of $175,000 for each of the first two
years of the term, $200,000 for the third and fourth years of the term and
$225,000 in the final year of the term. In addition, Mr. Lischak is entitled to
a guaranteed bonus of $50,000 per year payable in quarterly installments, plus
such additional bonus, if any, as may be awarded to Mr. Lischak by the Company's
Board of Directors or compensation or similar committee. Mr. Lischak also is
entitled to certain benefits including, among other things, certain health, life
and disability insurance benefits, and an automobile allowance. In the event of
a material uncured breach by the Company of his employment agreement, Mr.
52
<PAGE>
Lischak is entitled to terminate the employment agreement and to receive his
base salary, fixed annual bonus, health, life and disability insurance benefits
due under the agreement through the remainder of the five-year term, and any
stock options held by Mr. Lischak will vest on the date of termination.
CERTAIN INFORMATION CONCERNING STOCK OPTION PLANS
The Company has two stock-based incentive compensation plans for the
Company's employees, directors and certain other persons providing services to
the Company: the 1996 Special Stock Option Plan and Agreement (the "Management
Option Plan") and the 1996 Basic Stock Option and Stock Appreciation Rights Plan
(the "Basic Plan") (collectively, the "Plans"). The Management Option Plan is a
primary vehicle for providing equity incentives to the Company's two principal
executive officers, Ellen Dinerman Little and Robert B. Little. Under the
Management Option Plan, at the effective time of the Merger, each of Ms. Little
and Mr. Little was granted two non-qualified options for a total of 1,100,000
shares each of Common Stock: one option for 537,500 shares of Common Stock at an
exercise price of $5.00 per share and one option for 562,500 shares at an
exercise price of $8.50 per share. See the "Option/SAR grants in Fiscal 1996"
table above for additional information regarding such grants. All 2,200,000
shares of Common Stock initially reserved for issuance under the Management
Option Plan were subject to the options granted to Ms. Little and Mr. Little.
Regular full-time employees of the Company, non-employee members of the
Company's Board of Directors, and independent consultants and other persons who
provide services on a regular or substantial basis to the Company are generally
eligible to participate in the Basic Plan (under which 550,000 shares of Common
Stock are reserved for issuance). As of March 31, 1997, options to purchase an
aggregate of 20,000 shares of Common Stock were outstanding under the Basic
Plan, each with an exercise price of $5.25 per share. The Plans are currently
administered by the Compensation Committee to the extent contemplated by the
respective Plans.
53
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 15, 1997 by (i) each person
known to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock, (ii) each current director of the Company, (iii) each of the Named
Executives listed in the Summary Compensation Table under "Item 11 - Executive
Compensation" above, and (iv) all current executive officers and directors of
the Company as a group. The number of shares and percentages in the table and
accompanying footnotes are based upon 5,777,778 shares of Common Stock
outstanding as of March 15, 1997. The shares of Common Stock underlying
immediately exercisable options, warrants or rights, or immediately convertible
securities, or shares of Common Stock underlying options, warrants, rights or
convertible securities that become exercisable or convertible within 60 days of
March 15, 1997, are deemed to be outstanding for the purpose of calculating the
number and percentage beneficially owned by the holder of such options,
warrants, rights or convertible securities, but are not deemed to be outstanding
for the purpose of computing the percentage beneficially owned by any other
person. Unless otherwise indicated in the footnotes following the table, the
person as to whom the information is given had, based upon information furnished
by such persons, sole voting and investment power over the shares of Common
Stock shown as beneficially owned by them, subject to community property laws
where applicable.
PERCENT OF
NUMBER OF SHARES COMMON STOCK
OF COMMON STOCK BENEFICIALLY
NAME BENEFICIALLY OWNED OWNED
- ---- ------------------ -----
Ellen Dinerman Little (2). . . . . . . . . . 3,377,778 (1)(4) 56.5%
Robert B. Little (2) . . . . . . . . . . . . 3,377,778 (1)(4) 56.5%
Stephen K. Bannon . . . . . . . . . . . . . 121,324 2.1%
William F. Lischak . . . . . . . . . . . . . 249,560 (3) 4.3%
Richard Guardian . . . . . . . . . . . . . . 0 0%
MJ Peckos. . . . . . . . . . . . . . . . . . 0 0%
Mansour Mostaedi . . . . . . . . . . . . . . 0 0%
Alessandro Fracassi. . . . . . . . . . . . . 0 0%
Jeffrey A. Rochlis . . . . . . . . . . . . . 132,353 2.3%
Scot K. Vorse. . . . . . . . . . . . . . . . 121,323 2.1%
Kingdon Capital Management Corporation (5) . 747,000 (6) 11.9%
Dolphin Offshore Partners, L.P. (7). . . . . 535,000 (8) 8.9%
All current executive officers
and directors as a
group (10 persons) . . . . . . . . . . . . 3,752,778 (9) 62.8%
- --------------------
(1) Includes shares of Common Stock held by Ellen Dinerman Little and Robert B.
Little as community property, and also includes the right to vote
approximately 249,560 shares of
54
<PAGE>
Common Stock pursuant to an irrevocable proxy granted to Ms. Little and Mr.
Little by Mr. Lischak. Such proxy will continue during Mr. Lischak's
ownership of the shares, until the fifth anniversary of the Merger (the
"Expiration Date"); provided, however, that such proxy terminates earlier
if the Littles own or control less than five percent of the outstanding
voting power of the Company, or if the shares to which the proxy relates
are sold in the public market. In addition until the Expiration Date, Ms.
Little and Mr. Little also have, under certain circumstances, certain
rights to acquire (while the shares are held by Mr. Lischak) the 249,560
shares of Common Stock held by Mr. Lischak. See footnote 3 below.
(2) Such person's business address is in care of the Company, 8800 Sunset
Boulevard, Los Angeles, California 90069.
(3) All of the shares indicated are subject in the event of transfer (including
voluntary and certain involuntary transfers) to a right of first refusal or
option to purchase at the then current market price (and a right of
repurchase at $2.00 per share in the event Mr. Lischak's employment with
the Company terminates for a reason other than death, disability or the
Company's material breach of Mr. Lischak's employment agreement) in favor
of Ellen Dinerman Little and Robert B. Little during Mr. Lischak's
ownership of such shares until the Expiration Date. In addition, Mr.
Lischak has granted the right to vote all such shares to the Littles
pursuant to an irrevocable proxy which continues during Mr. Lischak's
ownership of the shares until the Expiration Date, subject to earlier
termination in certain circumstances. See footnote 1 above.
(4) Includes (i) 100,000 shares of Common Stock subject to immediately
exercisable options granted to such person under the Management Option Plan
and (ii) 100,000 shares of Common Stock subject to immediately exercisable
options granted to such person's spouse under the Management Option Plan
which generally may only be exercised by such person's spouse (although
such person disclaims beneficial ownership of the shares subject to his or
her spouse's options). Does not include 1,000,000 shares of Common Stock
subject to options granted to such person under the Management Option Plan
or 1,000,000 shares of Common Stock subject to options granted to such
person's spouse under the Management Option Plan, the exercisability of
which, in each case, is subject to certain vesting requirements.
(5) The address of Kingdon Capital Management Corporation is 152 West 57th
Street, New York, New York 10019.
(6) Includes 498,000 shares of Common Stock issuable upon exercise of Warrants.
Information provided herein was obtained from a Schedule a 13D filed with
the Securities and Exchange Commission in March 1995 by Kingdon Capital
Management Corporation.
(7) The General Partner of Dolphin Offshore Partners is Peter E. Salas, and the
address of Mr. Salas and Dolphin Offshore Partners, L.P. is c/o Dolphin
Management, 129 East 17th Street, New York, New York 10003.
(8) Includes 200,000 shares of Common Stock issuable upon exercise of Warrants.
Information provided herein was obtained from the General Partner of
Dolphin Offshore Partners, L.P.
(9) Includes 100,000 shares of Common Stock subject to immediately exercisable
options granted to Ellen Dinerman Little under the Management Option Plan
and 100,000 shares of Common Stock
55
<PAGE>
subject to immediately exercisable options granted to Robert B. Little
under the same stock option plan.
The shares of Common Stock owned as of the date hereof by Messrs. Bannon,
Rochlis and Vorse, are being held in escrow with Continental Stock Transfer &
Trust Company, as escrow agent, until February 16, 1998. Until such date,
Messrs. Bannon, Rochlis and Vorse will not be able to sell or otherwise transfer
their respective shares of Common Stock, however, they have each retained the
voting rights with respect to their shares.
Pursuant to a Lock-Up and Registration Rights Agreement entered into by Ms.
Little, Mr. Little and Mr. Lischak upon consummation of the Merger, each such
person has agreed not to sell, or otherwise dispose of (except for estate
planning purposes and other limited exceptions), any shares received by them in
the Merger (2,928,218 shares held by the Littles and 249,560 shares held by Mr.
Lischak) (the "Merger Shares") for a period which commenced on the date of the
Merger and ends in three equal installments on February 16, 1998, February 16,
1999 and February 16, 2000. The lock-up will terminate earlier (i) with respect
to an individual, if such person's employment with the Company is terminated
Without Cause by the Company or for Good Reason by such person (as such terms
are defined in their respective employment agreements with the Company); (ii)
with respect to 10% of the Merger Shares subject to the Lock-Up and Registration
Rights Agreement if both Littles are deceased; (iii) with respect to any Merger
Shares held by Mr. Lischak that are purchased by Ms. Little or Mr. Little or
their designees pursuant to any right of first refusal or repurchase agreement;
(iv) with respect to any Merger Shares surrendered in satisfaction of any
indemnification obligation under the Merger Agreement; and (v) with respect to a
number of Merger Shares equal in value to the outstanding principal balance
(plus interest) of the Merger Note, if the Company fails to pay any amount due
under such note.
Pursuant to the Lock-Up and Registration Rights Agreement, the Littles and
Mr. Lischak have the right on three occasions (but not more than once in any
18-month period), on or after February 16, 1998 (or any earlier termination of
the lock-up), to require the Company, at its expense, to file a registration
statement under the Securities Act for the registration of a minimum of 250,000
of the Merger Shares released to them from the lock-up. These demand rights
terminate, as to one demand, eight years after the Merger date; as to the second
demand, 12 years after the Merger date; and as to the third demand, 15 years the
Merger date. In addition, the Littles and Mr. Lischak have unlimited
"piggyback" rights in connection with registration statements filed by the
Company under the Securities Act for a period of eight years after the Merger
date.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On October 31, 1996, as part of the Merger consideration, Ellen Dinerman
Little (Co-Chairman of the Board, Co-Chief Executive Officer and President of
the Company) and Robert B. Little (Co-Chairman of the Board and Co-Chief
Executive Officer of the Company) received the Merger Note, a $2,000,000 secured
promissory note of the Company, bearing interest at the rate of 9% per annum,
with principal and interest payable in monthly installments of $41,517 over a
five year period ending October 1, 2001. The Merger Note is secured by a
security interest (subordinate to the security interest of the Company's
commercial lenders) in substantially all of the Company's assets. During 1996,
an aggregate of $83,034 in principal and interest was paid to the Littles under
the Merger Note. At March 15, 1997, the aggregate amount outstanding (including
accrued interest) under such promissory note was $1,946,768. Pursuant to the
Merger Agreement, on October 31, 1996, the Littles also received an unsecured
promissory note of the Company in the principal amount of $137,061 representing
the cash value at the time of Merger of certain life insurance policies under
which the Company was named as the
56
<PAGE>
beneficiary. This promissory note bears interest at the rate of 9% per annum,
with principal and accrued interest payable on October 31, 1997. At March 15,
1997, the aggregate amount outstanding (including accrued interest) under such
promissory note was $139,117.
Neo Motion Pictures, Inc., a California corporation ("Neo") involved in the
production of motion pictures, has, on a non-exclusive basis, provided
production services with respect to approximately 12 motion pictures for Pre-
Merger Overseas from 1989 through the date of Merger and may provide production
services to motion pictures for Company in the future. With respect to each of
the films for which Pre-Merger Overseas arranged for Neo to provide production
services ("Produced Films"), Neo generally received a fee of $75,000 to
$150,000, an overhead allowance, plus in certain instances a net profit
participation. During 1996, Neo received $158,825 as overhead allowance and
$410,666 in production fees with respect to Produced Films. As permitted by his
employment agreement with the Company, Mr. Little performs consulting services
for Neo. During 1996, no consulting fees were paid by Neo to Mr. Little,
although, at March 15, 1997, Neo owed Mr. Little $269,121 in accrued but unpaid
consulting fees. Mr. Little also has an option to acquire a 50% interest in Neo
for a purchase price of less than $60,000. Mr. Little has granted fifty percent
of his interest in such option to the Company. The Company has guaranteed
payment by Neo of two promissory notes, each payable on May 9, 1997, under which
and aggregate of $290,000 in principal and accrued interest was outstanding as
of March 15, 1997.
Alessandro Fracassi, a Director of the Company, is the sole owner of
Original Film Company, an Italian corporation ("Original"), which owns or
controls, together with certain of its affiliates, distribution rights to 13
motion pictures for which the Company acts as sales agent pursuant to various
agreements. In exchange for licensing distribution rights to such films on
behalf of Original and its affiliates, the Company receives a sales agency
fee generally ranging from 5% to 15% of the revenues generated by such
licensing, depending on the film. During 1996, sales or licenses of
distribution rights to such films by the Company generated less than $12,000
in gross revenues. Until August 1996, Mr. Little was also a co-owner of
Original.
Mr. Fracassi is also the President and owner of Racing Pictures s.r.l., an
Italian corporation ("Racing Pictures") which is engaged in the production and
distribution of motion pictures. In 1990 and 1991, Pre-Merger Overseas licensed
to Racing Pictures various distribution rights (primarily Italian television and
video distribution rights) to approximately 86 motion pictures which the Company
owns or for which the Company controls various distribution or sales agency
rights. The licenses, which generally have terms of six to twelve years,
obligated Racing Pictures to pay aggregate minimum guarantees of approximately
$2,900,000 to Pre-Merger Overseas. With respect to video distribution rights
granted to Racing Pictures pursuant to such licenses, the Company is generally
entitled to a 25% royalty on all gross receipts of Racing Pictures relating to
Racing Pictures' exploitation of such video distribution rights. With respect to
television rights granted to Racing Pictures pursuant to such licenses, Racing
Pictures is generally entitled to a distribution fee of 25% of gross receipts
from exploitation of such television rights and recoupment of all Racing
Pictures' distribution expenses. The Company is entitled to the balance of the
gross receipts of Racing Pictures from exploitation of the television rights.
Both the video royalty payable to the Company and the Company's share of the
gross receipts from Racing Pictures' exploitation of the television rights are
applied first to Racing Pictures' recoupment of the minimum guarantees. As of
January 1, 1996, $2,347,000 of the minimum guarantees owed to Pre-Merger
Overseas had been paid, while the remainder of $693,000 was past due. From
January 1, 1996 through September 11, 1996, an additional $140,000 was paid to
Pre-Merger Overseas (including a portion through offset of amounts owed by Pre-
Merger Overseas to Racing Pictures as described below). Pre-Merger Overseas and
Racing Pictures agreed as of September 12, 1996 to terminate Racing Pictures'
distribution rights to five motion
57
<PAGE>
pictures, reduce the $553,000 in remaining past due minimum guarantees to
$413,000, and extend payment of such amount, which is non-interest bearing, to
September 30, 1998. Upon payment by Racing Pictures of the remaining minimum
guarantees to the Company, the Company would be entitled to retain approximately
$70,675 of the total amount as distribution fees, with the remainder of such
amount to be paid to the various parties from which distribution rights to the
films licensed to Racing Pictures were acquired.
Racing Pictures also owns or controls distribution rights to three motion
pictures for which the Company acts as sales agent or distributor pursuant to
various agreements. In exchange for licensing distribution rights in such films,
the Company receives a fee generally ranging from 10% to 20% of the revenues
generated by such licensing, depending on the film. During 1996, sales or
licenses of distribution rights to such films by Pre-Merger Overseas and the
Company generated $109,000 in gross revenues of which $75,000 was offset against
amounts due from Racing Pictures (as described above), $20,000 was retained by
Pre-Merger Overseas and the Company as fees and $14,000 was retained by Pre-
Merger Overseas and the Company as reimbursement for distribution expenses
incurred by Pre-Merger Overseas and the Company on behalf of Racing Pictures.
Racing Pictures has agreed that future revenues generated from licensing such
films will also be offset against the past due minimum guarantees from Racing
Pictures.
Stephen K. Bannon, Vice Chairman of the Board of Directors of the Company,
and Scot K. Vorse, a Director of the Company, are officers, directors and
stockholders of Bannon & Co., Inc., which, prior to the Merger, made available
to EMAC a small amount of office space, as well as certain office and
secretarial services, as required by EMAC from time to time in consideration of
$5,000 per month (an aggregate of $50,000 in 1996). Such arrangement terminated
upon consummation of the Merger. Prior to the Merger, Messrs. Bannon and Vorse
also were reimbursed for out-of-pocket expenses incurred by them in connection
with their activities on behalf of EMAC.
Pursuant to the Merger Agreement, the Company entered into the Tax
Reimbursement Agreement, with Ellen Dinerman Little, Robert B. Little and
William F. Lischak (Chief Operating Officer, Chief Financial Officer, Secretary
and a Director of the Company). During 1996, no payments were made pursuant to
the Tax Reimbursement Agreement. See "Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations Certain Tax Related
Matters" for additional information regarding the Tax Reimbursement Agreement.
Mr. Lischak and his spouse own BLAH, Inc. which provides the production
executive services of Mr. Lischak's spouse to the Company in accordance with the
a Loan-Out Agreement dated as of March 11, 1996, (the "Loan-Out Agreement"),
pursuant to which, BLAH, Inc. receives $1,200 per week (an aggregate of $48,733
in 1996).
58
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)1. INDEX TO FINANCIAL STATEMENTS
Page(s) in
Form 10-K
----------
Report of Independent Accountants . . . . . . . . . . . F-1
Consolidated Financial Statements:
Consolidated Balance Sheets - December 31, 1995
and 1996 . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Statements of Income - Years Ended
December 31, 1994, 1995 and 1996 . . . . . . . . . . F-3
Consolidated Statements of Shareholders' Equity - Years
Ended December 31, 1994, 1995 and 1996 . . . . . . . F-4
Consolidated Statements of Cash Flows - Years Ended
December 31, 1994, 1995 and 1996 . . . . . . . . . . F-5
Notes to Consolidated Financial Statements . . . . . . F-6
(a)2. INDEX TO FINANCIAL STATEMENTS SCHEDULES
The schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
(the "Commission") are not required under the related
instructions or are inapplicable, and therefore have been
omitted.
(a)3. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement of Merger among the Company, Pre-Merger
Overseas, and Ellen Dinerman Little and Robert B.
Little, dated as of July 2, 1996. Incorporated by
reference to Exhibit 10.7 to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1996.
59
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.2 Amendment to Agreement of Merger among the Company,
Pre-Merger Overseas and Ellen Dinerman Little and
Robert B. Little, dated as of September 20, 1996.
Incorporated by reference to Exhibit 10.8 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1996.
3.1 Restated Certificate of Incorporation. Incorporated by
reference to Exhibit 3.1 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
3.2 Bylaws. Incorporated by reference to Exhibit 3.2 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
4.1 Form of Common Stock Certificate. Incorporated by
reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
4.2 Form of Warrant Certificate. Incorporated by reference
to Exhibit 4.2 to the Company's Registration Statement
on Form S-1, Registration No. 33-83624.
4.3 Form of Unit Purchase Option. Incorporated by
reference to Exhibit 4.3 to the Company's Registration
Statement on Form S-1, Registration No. 33-83624.
4.4 Warrant Agreement between Continental Stock Transfer &
Trust Company and the Company. Incorporated by
reference to Exhibit 4.4 to the Company's Registration
Statement on Form S-1, Registration No. 33-83624.
4.5 Letter agreement, dated October 28, 1996, amending the
Unit Purchase Options. Incorporated by reference to
Exhibit 4.5 to the Company's Current Report on Form 8-
K, dated October 25, 1996, filed with the Commission on
November 12, 1996.
4.6 Form of Warrant issued in the Company's bridge
financing. Incorporated by reference to Exhibit 10.4
to the Company's Registration Statement on Form S-1,
Registration No. 33-83624.
60
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.7 Warrant, dated October 31, 1996, for Jefferson Capital
Group, Ltd. to purchase shares of Common Stock of the
Company. Incorporated by reference to Exhibit 4.6 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
10.1 Secured Promissory Note of the Company, dated October
31, 1996, payable to Robert B. Little and Ellen
Dinerman Little. Incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
10.2 Indemnity Agreement, dated October 31, 1996, between
the Company and Ellen Dinerman Little. Incorporated by
reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.3 Indemnity Agreement, dated October 31, 1996, between
the Company and Robert B. Little. Incorporated by
reference to Exhibit 10.3 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.4 Indemnity Agreement, dated October 31, 1996, between
the Company and William F. Lischak. Incorporated by
reference to Exhibit 10.4 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.5 Indemnity Agreement, dated October 31, 1996, between
the Company and Stephen K. Bannon. Incorporated by
reference to Exhibit 10.5 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.6 Indemnity Agreement, dated October 31, 1996, between
the Company and Scot K. Vorse. Incorporated by
reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.7 Indemnity Agreement, dated October 31, 1996, between
the Company and Jeffrey A. Rochlis. Incorporated by
reference to Exhibit 10.7 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
61
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.8 Indemnity Agreement, dated October 31, 1996, between
the Company and Alessandro Fracassi. Incorporated by
reference to Exhibit 10.8 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.9 Employment Agreement, dated as of October 31, 1996,
between the Company and Ellen Dinerman Little.
Incorporated by reference to Exhibit 10.9 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.10 Employment Agreement, dated as of October 31, 1996,
between the Company and Robert B. Little. Incorporated
by reference to Exhibit 10.10 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.11 Employment Agreement, dated as of October 31, 1996,
between the Company and William F. Lischak.
Incorporated by reference to Exhibit 10.11 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.12 Security Agreement, dated as of October 31, 1996,
between the Company and Ellen Dinerman Little and
Robert B. Little. Incorporated by reference to Exhibit
10.12 to the Company's Current Report on Form 8-K,
dated October 25, 1996, filed with the Commission on
November 12, 1996.
10.13 Tax Reimbursement Agreement, dated as of October 31,
1996, between the Company, Ellen Dinerman Little,
Robert B. Little and William F. Lischak. Incorporated
by reference to Exhibit 10.13 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.14 Promissory Note (the "Insurance Note"), dated October
31, 1996, payable to Ellen Dinerman Little and Robert
B. Little. Incorporated by reference to Exhibit 10.14
to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
62
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.15 Stockholders' Voting Agreement, dated as of October 31,
1996, by and among the Company, Ellen Dinerman Little,
Robert B. Little, William F. Lischak, Jeffrey A.
Rochlis, Barbara Boyle, the Hoberman Family Trust, John
Hyde, Sparta Partners III, Stephen K. Bannon, Scot K.
Vorse and Gary M. Stein. Incorporated by reference to
Exhibit 10.15 to the Company's Current Report on Form
8-K, dated October 25, 1996, filed with the Commission
on November 12, 1996.
10.16 Lock-Up and Registration Rights Agreement, dated as of
October 31, 1996, between the Company and Ellen
Dinerman Little, Robert B. Little and William F.
Lischak. Incorporated by reference to Exhibit 10.16 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
10.17 Non-Competition Agreement, dated as of October 31,
1996, between the Company and Ellen Dinerman Little.
Incorporated by reference to Exhibit 10.17 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.18 Non-Competition Agreement, dated as of October 31,
1996, between the Company and Robert B. Little.
Incorporated by reference to Exhibit 10.18 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.19 Overseas Filmgroup, Inc. 1996 Special Stock Option Plan
and Agreement. Incorporated by reference to Exhibit
99.1 to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
10.20 Overseas Filmgroup, Inc. 1996 Basic Stock Option and
Stock Appreciation Rights Plan. Filed herewith.
10.21 Agency Agreement, dated as of December 10, 1993,
between the Company and GKN Securities Corp., and
amendments thereto (without schedules). Incorporated
by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1, Registration No.
33-83624.
63
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.22 Letter Agreement among certain stockholders of the
Company, the Company and GKN Securities Corp. (without
schedules). Incorporated by reference to Exhibit 10.2
to the Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.23 Form of Stock Escrow Agreement between the Company and
Continental Stock Transfer & Trust Company.
Incorporated by reference to Exhibit 10.6 to the
Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.24 Letter Agreement regarding administrative support.
Incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.25 Restated and Amended Syndication Agreement dated as of
October 31, 1996, among Coutts & Co., Berliner Bank
A.G. London Branch, Overseas Filmgroup, Inc. and
Entertainment/Media Acquisition Corporation. Filed
herewith. +
10.26 Video Distribution Agreement dated March 15, 1996,
between the Company and BMG Video. Filed herewith. +
10.27 Loan Out Agreement dated as of March 11, 1996 between
the Company and BLAH, Inc. Filed herewith.
10.28 Agreement dated as of September 12, 1996, between the
Company and Racing Pictures s.r.l. Filed herewith.
10.29 Option Agreement dated as of September 13, 1996,
between Robert B. Little and the Company. Filed
herewith.
10.30 Overseas Filmgroup Lease Agreement dated April 21,
1987,as amended. Filed herewith
21 Subsidiaries of the Registrant. Filed herewith.
23 Consent of Price Waterhouse LLP. Filed herewith.
27 Financial Data Schedule (Filed electronically only)
Filed herewith.
- --------------------
+ Confidential treatment has been requested for portions of such exhibit.
(b) The following reports on Form 8-K were filed by the Company during the
last quarter of the period covered by this Report.
64
<PAGE>
Current Report on Form 8-K, dated October 25, 1996, filed by the Company with
the Commission on November 12, 1996 relating to the Merger and the approval and
consummation thereof. Such report included Item 1 (Changes in Control of the
Registrant), Item 2 (Acquisition or Disposition of Assets), Item 5 (Other
Events) and Item 7 (Financial Statements and Exhibits). Financial Statements of
the business acquired (unaudited financial statements for the six months ended
June 30, 1996 and audited financial statements for the years ended December 31,
1995 and 1994 of Pre-Merger Overseas) and pro forma financial information (an
unaudited pro forma combined balance sheet as of June 30, 1996 and unaudited pro
forma combined statements of income for the six months ended June 30, 1996 and
the year ended December 31, 1995) were filed with such Report (with the
financial statements of the business acquired being incorporated by reference
from the Company's definitive proxy statement dated September 25, 1996 filed
with the Commission pursuant to Section 14 of the Securities Exchange Act of
1934, as amended).
(c) See Item 14(a)3 above.
(d) Not applicable.
65
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
OVERSEAS FILMGROUP, INC.
By: /s/ Ellen Dinerman Little
Ellen Dinerman Little,
Co-Chairman of the Board of Directors,
Co-Chief Executive Officer, and President
Dated: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ellen Dinerman Little
Ellen Dinerman Little Co-Chairman of the Board of March 28, 1997
Directors, Co-Chief Executive
Officer, and President (Co-Principal
Executive Officer)
/s/ Robert B. Little
Robert B. Little Co-Chairman of the Board of March 28, 1997
Directors and Co-Chief Executive
Officer (Co-Principal Executive
Officer)
/s/ William F. Lischak
William F. Lischak Chief Operating Officer, Chief March 28, 1997
Financial Officer, Secretary, and
Director (Principal Financial and
Accounting Officer)
66
<PAGE>
/s/ Stephen K. Bannon
Stephen K. Bannon Director March 28, 1997
/s/ Alessandro Fracassi
Alessandro Fracassi Director March 28, 1997
/s/ Jeffrey A. Rochlis
Jeffrey A. Rochlis Director March 28, 1997
/s/ Scot K. Vorse
Scot K. Vorse Director March 28, 1997
67
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Overseas Filmgroup, Inc.
In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Overseas Filmgroup, Inc. and its subsidiaries (the "Company") at
December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Los Angeles, California
March 7, 1997
F-1
<PAGE>
OVERSEAS FILMGROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-------------------
1996 1995
---- ----
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 353,689 $ 2,433,153
Restricted cash (Note 2) 46,037 133,446
Accounts receivable, net of allowance for doubtful
accounts of $1,000,000 in 1996 and 1995 10,718,239 8,181,552
Related party receivable (Note 9) 413,000 -
Other receivables 10,000 324,000
Film costs, net of accumulated amortization (Note 4) 28,358,324 17,349,071
Fixed assets, net of accumulated depreciation (Note 5) 557,127 384,321
Other assets 347,269 149,253
------------ ------------
$ 40,803,685 $ 28,954,796
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $ 2,623,084 796,908
Payable to producers 3,712,812 6,976,621
Note payable to shareholders (Note 3) 2,085,886 -
Notes payable (Note 6) 16,607,137 7,421,893
Deferred income taxes (Note 7) 3,030,000 130,000
Deferred revenue 553,000 2,181,000
------------ ------------
28,611,919 17,506,422
------------ ------------
Commitments and contingencies (Note 10)
Shareholders' equity:
Preferred stock, $.001 par value, 2,000,000 shares
authorized, 0 shares outstanding
Common stock, $.001 par value, 25,000,000 shares
authorized, 5,777,778 and 3,177,778 outstanding 5,778 3,178
Additional paid-in capital 10,652,731 167,322
Retained earnings 1,533,257 11,277,874
------------ ------------
12,191,766 11,448,374
------------ ------------
$ 40,803,685 $ 28,954,796
------------ ------------
------------ ------------
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
OVERSEAS FILMGROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues $ 28,677,571 $ 21,672,510 $ 20,734,094
Expenses:
Film costs 23,449,114 16,320,694 16,395,902
Selling, general and administrative 3,595,660 2,721,745 2,151,214
------------ ------------ ------------
Total expenses 27,044,774 19,042,439 18,547,116
------------ ------------ ------------
Income from operations 1,632,797 2,630,071 2,186,978
Other income (expense):
Interest income 32,831 35,715 654
Interest expense (178,069) (89,637) (179,750)
Other income 177,710 317,917 434,078
------------ ------------ ------------
Total other income 32,472 263,995 254,982
------------ ------------ ------------
Income before income taxes 1,665,269 2,894,066 2,441,960
Income tax provision (Note 7) 3,131,367 432,905 296,487
------------ ------------ ------------
Net (loss) income $ (1,466,098) $ 2,461,161 $ 2,145,473
------------ ------------ ------------
------------ ------------ ------------
Unaudited pro forma data (Note 2)
Income before income taxes and
additional interest expense $ 1,665,269 $ 2,894,066 $ 2,441,960
Additional interest expense 105,631 166,550 -
------------ ------------ ------------
Income before income taxes 1,559,638 2,727,516 2,441,960
Income tax provision 561,470 981,906 879,106
------------ ------------ ------------
Pro forma net income $ 998,168 $ 1,745,610 $ 1,562,854
------------ ------------ ------------
------------ ------------ ------------
Pro forma net income per share $ 0.22 $ 0.42
------------ ------------
------------ ------------
Weighted average number of shares outstanding 4,444,445 4,177,778
------------ ------------
------------ ------------
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
OVERSEAS FILMGROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
-----------------------------------------------
(Shares in thousands)
<TABLE>
<CAPTION>
Common Stock
--------------------- Additional Retained
Shares Amount Paid-In Capital Earnings Total
------ ------ --------------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 3,178 $ 3,178 $ 167,322 $ 8,147,037 $ 8,317,537
Net income 2,145,473 2,145,473
Distributions to shareholder (652,549) (652,549)
---------- ---------- ----------- ----------- -----------
Balance at December 31, 1994 3,178 3,178 167,322 9,639,961 9,810,461
Net income 2,461,161 2,461,161
Distributions to shareholders (823,248) (823,248)
---------- ---------- ----------- ----------- -----------
Balance at December 31, 1995 3,178 3,178 167,322 11,277,874 11,448,374
Pre-merger distributions to
shareholders (4,452,991) (4,452,991)
Reclassification of earnings
due to termination of
S corporation status 3,825,528 (3,825,528) -
Merger transaction (Note 3) 2,600 2,600 7,703,682 7,706,282
Merger costs charged to capital (1,043,801) (1,043,801)
Net loss (1,466,098) (1,466,098)
---------- ---------- ----------- ----------- -----------
Balance at December 31, 1996 5,778 $ 5,778 $10,652,731 $ 1,533,257 $12,191,766
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
OVERSEAS FILMGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income $(1,466,098) $ 2,461,161 $ 2,145,473
Adjustments to reconcile net (loss) income to net
cash provided by operating activities -
Amortization of film costs 23,007,221 16,115,927 15,487,542
Depreciation of fixed assets 155,415 122,776 81,453
Change in assets and liabilities -
(Increase) decrease in accounts receivable (2,536,687) 926,669 (1,693,153)
Decrease (increase) in related party receivables (413,000) 435,088 117,901
Decrease (increase) in other receivables 314,000 (24,000) (82,568)
(Increase) decrease in other assets (198,015) 46,015 (106,949)
Increase (decrease) in accounts payable
and accrued expenses 1,826,176 (278,783) 243,381
Increase (decrease) in payable to producers (3,263,809) 1,121,294 (24,302)
Increase in deferred income taxes payable 2,900,000 10,000 -
(Decrease) increase in deferred revenue (1,628,000) 416,240 303,090
----------- ----------- -----------
Net cash provided by operating activities 18,697,203 21,352,387 16,471,868
----------- ----------- -----------
Cash flows from investing activities:
Additions to film costs (34,016,475) (21,087,875) (17,056,633)
Purchase of fixed assets (328,221) (289,107) (143,180)
----------- ----------- -----------
Net cash used in investing activities (34,344,696) (21,376,982) (17,199,813)
----------- ----------- -----------
Cash flows from financing activities:
Net borrowings under credit facilities 9,185,244 1,363,614 2,358,279
Merger cash, net of acquisition costs 8,791,440 - -
Distributions to shareholders (4,452,991) (823,248) (652,549)
Payments on note payable to shareholders (43,073) - -
----------- ----------- -----------
Net cash provided by financing activities 13,480,620 540,366 1,705,730
----------- ----------- -----------
Net (decrease) increase in cash (2,166,873) 515,771 977,785
Cash, cash equivalents and redirected cash
at beginning of year 2,566,599 2,050,828 1,073,043
----------- ----------- -----------
Cash, cash equivalents and restricted cash
at end of year $ 399,726 $ 2,566,599 $ 2,050,828
----------- ----------- -----------
----------- ----------- -----------
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 1,321,178 $ 849,632 $ 557,654
Income taxes $ 55,608 $ 30,130 $ 41,973
Foreign withholding taxes $ 231,367 $ 352,905 $ 226,487
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
OVERSEAS FILMGROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS:
Overseas Filmgroup, Inc., ("Overseas" or the "Company") was formed on February
11, 1980, and operated as a privately held company through October 30, 1996. As
discussed in Note 3, on October 31, 1996 the Company was acquired, through
merger, by Entertainment/Media Acquisition Corporation ("EMAC"), a publicly
traded company. Concurrent with the merger, EMAC changed its name to Overseas
Filmgroup, Inc.
The Company is principally involved in the acquisition and worldwide license or
sale of distribution rights to independently produced motion pictures. Certain
motion pictures are directly distributed by the Company in the domestic
theatrical market under the name First Look Pictures ("First Look").
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts of
Overseas and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.
REVENUES
Revenues from nonrefundable guarantees payable by subdistributors are recognized
when the film becomes available for release and certain other conditions are met
in accordance with Statement of Financial Accounting Standards No. 53 ("SFAS
53"), "Financial Reporting by Producers and Distributors of Motion Picture
Films". Amounts received in advance of the film being available are recorded as
deferred revenue. Revenues from direct theatrical distribution of films are
recognized on the dates of exhibition.
FILM COSTS AND AMORTIZATION
Film costs represent those costs incurred in the acquisition and distribution of
motion pictures or in the acquisition of distribution rights to motion pictures
which include advances, minimum guarantees paid to producers, recoupable
distribution and production costs, legal expenses, interest and overhead costs.
These costs have been capitalized in accordance with SFAS 53. Film costs are
amortized using the individual film forecast method whereby expense is
recognized in the proportion that current year revenues bear to management's
estimate of ultimate revenue from all markets.
F-6
<PAGE>
NOTE 2: (Continued)
Film costs are valued at the lower of unamortized cost or estimated net
realizable value. Revenue and cost forecasts for films are continually reviewed
by management and revised when warranted by changing conditions. When estimates
of total revenues and costs indicate that a film will result in an ultimate loss
additional amortization is provided to fully recognize such loss.
CASH
The Company considers all highly liquid instruments purchased with a maturity of
less than three months to be cash equivalents. The carrying value of the
Company's cash and cash equivalents approximate fair value due to their short-
term nature.
RESTRICTED CASH
Restricted cash consists of cash held in a collection account which is
restricted for the payment of film facilities in compliance with the Credit
Facility (Note 6).
FIXED ASSETS
Fixed assets are recorded at cost and include improvements that significantly
add to the productive capacity or extend the useful life of the asset. Costs of
maintenance and repairs are charged to expense. Depreciation is provided over
the estimated useful lives of the assets which range from 5 to 7 years using
methods which approximate straight line.
PAYABLE TO PRODUCERS
Payable to producers represents an accrual on a film-by-film basis of the
producers' share of revenues recognized by the Company in excess of the
recoupable costs incurred by Overseas. The producers' share of revenue is
expensed in conjunction with the amortization of film costs. Payments to
producers are typically made on a quarterly basis based on actual cash
collections.
INCOME TAXES
The Company records income taxes in accordance with the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The
standard requires, among other provisions, an asset and liability approach to
recognize deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying amounts and tax bases
of assets and liabilities.
F-7
<PAGE>
NOTE 2: (Continued)
Effective January 1, 1989 (and terminating October 31, 1996 as described below)
the Company elected to be treated as an S Corporation for federal income tax
purposes. Accordingly, all federal income tax liability was the responsibility
of the shareholders. The Company remained subject to income tax in the state of
California, the principal state of operation for the Company. As a result of
the merger described in Note 3, the Company's S Corporation status was
terminated effective October 31, 1996. The Company is liable for federal and
state income taxes from that date forward (Note 7).
ACCOUNTING FOR STOCK-BASED COMPENSATION
As permitted under Statement of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock Based Compensation", the Company has elected to use
the intrinsic value method prescribed by APB Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees" to account for compensation expense
for its stock-based employee compensation plans.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to credit risk
consist primarily of cash and accounts receivable. The Company places its cash
with a financial institution and, at times, such amounts may be in excess of the
FDIC insurance limits. Concentration of credit risk with respect to accounts
receivable is limited due to the large number and general dispersion of trade
accounts which constitute the Company's customer base. The Company performs
credit evaluations of its customers and generally does not require collateral.
At December 31, 1996 the Company has a trade receivable from two individual
subdistributors which represent approximately 21% and 11% of the Company's
accounts receivable.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Management estimates ultimate revenues and costs for motion pictures for each
market based on public acceptance and historical results for similar products.
Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to amounts reported in prior periods to
conform with the current year presentation.
F-8
<PAGE>
NOTE 2: (Continued)
UNAUDITED PRO FORMA STATEMENT OF INCOME
Pro forma net income reflects pro forma interest expense on the $2,000,000
shareholder note issued in the merger (Note 3), assumed to be outstanding as of
January 1, 1995, and a pro forma income tax provision, using an effective income
tax rate of 36%, to account for the estimated income tax expense of the Company
as if it had been subject to federal and state income taxes at the corporate
level for the period.
Pro forma net income per share has been computed using the weighted average
common shares outstanding of 4,444,445 and 4,177,778 for 1996 and 1995,
respectively. Such pro forma shares outstanding have been computed as the
weighted average, as applicable, of (i) 3,177,778 shares reflecting the
recapitalization of common stock as a result of the merger (Note 3) (ii)
1,000,000 shares representing the number of new shares that would have to be
issued at the October 30, 1996 market price of $5.20 per share to pay pro
forma distributions of $3,500,000 representing actual pre-merger
distributions, $1,500,000 representing cash consideration received by the
Overseas Shareholders and $200,000 representing accrual of an estimated
distribution to reimburse the Overseas Shareholders for federal income taxes
payable for S corporation years and (iii) the 2,600,000 EMAC shares issued
prior to the date of the merger, October 31, 1996. Historical earnings per
share has not been presented in view of the prior periods S corporation
status.
NOTE 3 - MERGERS AND ACQUISITIONS
On October 31, 1996 Entertainment/Media Acquisition Corporation ("EMAC"), a
public company formed for the sole purpose of acquiring an operating company
in the entertainment and media industry, acquired all of the outstanding
common stock of Overseas (the "Overseas Shares"). The shareholders of the
Overseas Shares received 3,177,778 shares of EMAC Common Stock, $1,500,000 in
cash and a $2,000,000 5-year secured promissory note which is payable monthly
and bears interest at the rate of 9% per year. EMAC also agreed to indemnify
the shareholders of the Overseas Shares from any potential losses with
respect to additional taxes (including interest and penalties) resulting from
the Company's operations during periods in which it was an S corporation, up
to a specified limit. The Company has estimated a liability of $200,000 with
respect to its indemnity obligation, which is included in accrued expenses as
of December 31, 1996. The issuance of the $2,000,000 secured promissory note
is a non-cash item and therefore it has not been reflected in the
Consolidated Statement of Cash Flows.
For accounting purposes Overseas is considered the acquirer (reverse
acquisition). The acquisition has been treated as a recapitalization of
Overseas reflecting the issuance of Overseas common stock for the net assets of
EMAC, which consist primarily of cash. Pro forma information reflecting the
combined companies had they merged on January 1, 1995, is not presented as the
combination is not considered a business combination for accounting purposes.
Historical shareholders' equity has been retroactively restated to reflect the
equivalent number of shares received in the merger. The historical financial
statements prior to October 31, 1996 are those of Overseas.
F-9
<PAGE>
NOTE 3: (Continued)
Concurrent with the acquisition, EMAC changed its name to Overseas Filmgroup,
Inc. and changed its year-end from November 30 to December 31. All direct
costs of the acquisition, consisting primarily of legal, accounting, consulting
and certain other fees have been charged to paid-in capital.
On June 20, 1995 the Company entered into a merger agreement with First Look
Pictures, Inc. ("First Look, Inc."), a domestic theatrical distributor which
was 100% owned by the Company's shareholders as of that date. The net assets of
First Look, Inc. of $412,395, primarily consisting of unamortized film costs,
were purchased through the forgiveness of the Company's advance, which
represented the funding of First Look since its inception. The merger has been
accounted for as a transaction between entities under common control and
therefore the net assets of First Look acquired by Overseas have been recorded
at book value.
NOTE 4 - FILM COSTS:
Film costs consist of the following:
December 31,
-------------------
1996 1995
---- ----
Films in release, net of
accumulated amortization $ 25,838,106 $ 12,162,975
Films not yet available for release 2,520,218 5,186,096
------------- -------------
$ 28,358,324 $ 17,349,071
------------- -------------
------------- -------------
Interest costs capitalized to films were $1,223,467, $744,176, and $568,537
during the years ended December 31, 1996, 1995 and 1994, respectively. Based on
the Company's estimates of projected gross revenues as of December 31, 1996,
approximately 75% of unamortized film costs applicable to films in release are
expected to be amortized during the next three years.
NOTE 5 - FIXED ASSETS:
Fixed assets consist of the following:
December 31,
-------------------
1996 1995
---- ----
Furniture and fixtures $ 243,520 $ 221,360
Office equipment 191,023 189,203
Computer equipment 657,487 447,038
Leasehold improvements 173,324 149,388
Automobiles 14,970 14,970
---------- ----------
1,280,324 1,021,959
Less accumulated depreciation (723,197) (637,638)
---------- ----------
Net fixed assets $ 557,127 $ 384,321
---------- ----------
---------- ----------
F-10
<PAGE>
NOTE 6 - NOTES PAYABLE:
The Company has a $27,000,000 credit facility with a two-bank syndicate (the
"Credit Facility"). The Credit Facility provides several levels of credit
including $21,000,000 of film financing ("Film Facilities"), $5,000,000 of
working capital ("Operating Facility") and a $1,000,000 guarantee facility
("Local Facility"). The Company maintains a $1,000,000 working capital credit
line (the "Local Line") with another bank which is guaranteed by the Local
Facility and expires on July 1, 1997. Outstanding balances are summarized as
follows:
December 31,
-------------------
1996 1995
---- ----
Credit Facility:
Film Facilities $ 14,529,137 $ 2,421,893
Operating Facility 1,850,000 4,000,000
Local Facility - -
Local Line 228,000 1,000,000
------------ ------------
$ 16,607,137 $ 7,421,893
------------ ------------
------------ ------------
Borrowings made under the Film Facilities are provided as revolving
facilities. Outstanding amounts from each draw against the Film Facilities
are reviewed by the two-bank syndicate on the one year anniversary of the
first draw for each film and repayment terms are varied as necessary to
ensure that no Film Facility is repaid later than six months from the date of
such review. Borrowings made under the Operating Facility are provided as
revolving overdraft facilities. Outstanding amounts are due on May 9, 1997
subject to annual review by the two-bank syndicate.
Interest on the Credit Facility is payable monthly at the London Interbank
Offered Rate ("LIBOR") plus 3% (5.50%, 5.56% and 5.60% for one, three and six
month LIBOR, respectively at December 31, 1996). The interest rate is set at
the commencement of each drawdown and is revised each one, three or six months
as requested by the Company at the date of the drawdown. Interest on the Local
Line is payable monthly at the bank's prime rate less 1.25%, (prime rate was
8.25% at December 31, 1996).
The Credit Facility requires the Company to pay closing fees on each Film
Facility drawdown, a commitment fee for unused portions of the Operating
Facility, a fee measured by a portion of the Company's distribution fee
earned on financed films, and an annual management fee. The Credit Facility
is collateralized by a security interest in the Company's assets and contains
various covenants including restrictions on the payment of dividends and the
maintenance of a minimum consolidated net worth and certain financial ratios.
The Credit Facility is available until May 9, 1997, however its terms will be
reviewed by the two-bank syndicate on an annual basis with a view to
determining whether the Credit Line should remain available after such date.
The carrying value of the Company's notes payable approximates their fair
value due to the fact that the interest rate is reset periodically and the
lack of a specified maturity.
F-11
<PAGE>
NOTE 7 - INCOME TAXES:
As discussed in Note 2, on October 31, 1996 the Company changed its tax
reporting status from S corporation to C corporation for federal income tax
purposes as a result of the merger with EMAC. As a result, the Company recorded
a non-recurring net charge to earnings of $2,600,000 in the fourth quarter of
fiscal 1996 for additional federal income tax expense related to the net change
required to adjust the deferred tax assets and liabilities to their appropriate
value utilizing C corporation rates. The deferred taxes relate primarily to
differences arising from the amortization of film costs for book and tax
purposes. The foreign withholding taxes are substantially recouped from the
producers share of revenue.
The historical provision for income taxes consists of the following:
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current
State $ 0 $ 70,000 $ 70,000
Foreign withholding 231,367 352,905 226,487
---------- ---------- ----------
231,367 422,905 296,487
---------- ---------- ----------
Deferred
State 110,000 10,000 -
Federal 190,000 - -
Deferred tax provision resulting
from the termination of S corporation
status 2,600,000 - -
---------- ---------- ----------
2,900,000 10,000 -
---------- ---------- ----------
$3,131,367 $ 432,905 $ 296,487
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The pro forma provision for income taxes differs from the amount of income
tax determined by applying the applicable U.S. statutory income tax rates to
pro forma income before taxes as a result of the following differences:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate 34% 34% 34%
State taxes, net of federal benefit 2% 2% 2%
--- --- ---
Pro forma effective tax rate 36% 36% 36%
--- --- ---
--- --- ---
</TABLE>
F-12
<PAGE>
NOTE 8 - SHAREHOLDERS' EQUITY
The Company is authorized to issue 2,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined by
the Board of Directors.
On October 31, 1996 the Company created a stock option plan under which
incentive and nonqualified stock options and stock appreciation rights may be
granted to certain employees and directors to purchase up to a maximum of
550,000 shares of common stock. The grant of options and option price shall be
determined by the Company's Board of Directors or applicable committee thereof
in accordance with the plan. In the case of an incentive stock option the
option price shall not be less than 100% of the fair market value of the common
stock on the date the incentive stock option is granted. Each option may be
granted subject to various terms and conditions established on the date of grant
including exercise and expiration provided, however, that all options will
expire no later than 10 years from their date of grant. On October 31, 1996,
5,000 non-qualified stock options were granted to each of four non-employee
directors. These options are exercisable on October 31, 1997 and have an
exercise price equal to the fair market value of the Company's stock on October
31, 1996. The options expire on the earlier of ten years from the date of grant
or three years from the date on which the Director ceases to be a director of
the Company.
The Company has also granted options to purchase 1,075,000 shares of common
stock at $5.00 per share ("$5.00 Options") and 1,125,000 shares of common stock
at $8.50 per share, ("$8.50 Options") to the majority owners of the Overseas
Shares, all of which expire on October 31, 2003. The $5.00 Options vest 200,000
on October 31,1996 and 175,000 on each anniversary date thereafter through 2001.
The $8.50 Options vest in equal increments of 225,000 on October 31, 1997 and
each anniversary date thereafter through 2001.
As discussed in Note 2 the Company uses the intrinsic value method prescribed by
APB 25 to account for compensation expense for its stock-based employee
compensation plans. Had compensation cost for the Company's stock-based
employee compensation plans been determined based on the fair value at the grant
date for options under those plans as consistent with SFAS 123, the Company's
pro forma net income and pro-forma net income per share would have been reduced
to $694,980 and $.16, respectively. The fair value of each option grant was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following assumptions:
Risk Free interest rate: 6.03%
Expected life: 4 years
Volatility: 57%
F-13
<PAGE>
NOTE 8: (Continued)
Warrants to purchase 4,500,000 shares of Common Stock are outstanding at
December 31, 1996. These warrants have an exercise price of $5.00 per share and
expire on February 16, 2002. The warrants are callable by the Company at $.01
per warrant if certain market price and other criteria are met. Options to
purchase 200,000 Overseas (formerly EMAC) Units (each unit consists of 1 share
of common stock and 2 warrants, described below) at an exercise price of $9.90
per unit are outstanding at December 31, 1996. The warrants attached to these
units are identical to the warrants described above except that they are
execisable at $5.85 per share and expire on February 16, 2000. These options
and warrants were issued in connection with the initial capitalization of EMAC.
Overseas also issued a warrant to purchase 62,500 shares of common stock to
its financial advisor in the merger described in Note 3. The warrant has an
exercise price of $5.00 per share and expires on October 30, 2003.
The exercise of outstanding options and warrants was not assumed in the
calculation of earnings per share because the effect would have been anti
dilutive.
NOTE 9 - RELATED PARTY TRANSACTIONS
The Company has a receivable of $413,000 from a subdistributor which is owned by
a member of the Company's Board of Directors. Pursuant to an executed agreement
this amount will be paid on September 30, 1998 and will not bear interest. The
Company is entitled to retain $70,675 of this receivable with the balance
payable to producers. The Company recognized $109,000 in revenue on film's
licensed to the Company by this subdistributor (as rights owner) during 1996.
During 1996 the Company paid $48,733 to a company owned by a member of the
company's management and has spouse for production executive services of such
spouse.
NOTE 10 - COMMITMENTS AND CONTINGENCIES:
As of December 31, 1996, the Company is committed under agreements with certain
sub-distributors to spend an aggregate of $938,000 for print and advertising on
motion pictures scheduled to be released in the domestic theatrical market which
have not yet been delivered to the Company. Additionally, the Company is
committed under various acquisition agreements to pay minimum guarantees of
$1,170,000 contingent upon delivery of the respective films to the Company.
The Company has guaranteed payment by an independent motion picture production
company of two promissory notes in the aggregate principal amount of $325,000,
each payable on May 9, 1997.
F-14
<PAGE>
NOTE 10: (Continued)
Total rental expense under various leases for the years ended December 31, 1996,
1995 and 1994 amounted to $293,279, $228,053 and $168,704, respectively.
Minimum annual rental payments under noncancelable leases are as follows:
1997 $206,890
1998 30,421
1999 15,703
2000 4,715
NOTE 11 - FOREIGN SALES AND SIGNIFICANT CUSTOMERS:
The Company's foreign export revenues are summarized as follows:
<TABLE>
<CAPTION>
Years ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Western Europe $ 9,581,698 $ 7,475,888 $ 7,005,708
Asia 4,936,735 2,411,261 3,574,100
Latin America 1,839,129 1,446,968 1,491,500
Eastern Europe 708,600 1,094,053 728,000
Other 2,850,896 1,792,603 2,611,876
------------ ------------ ------------
$ 19,917,058 $ 14,220,773 $ 15,411,184
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
Customers representing 10% or more of the Company's revenue accounted for
$9,498,000 (three customers), $4,366,246 (one customer) and $3,000,000 (one
customer) for the years ended December 31, 1996, 1995 and 1994, respectively.
F-15
<PAGE>
QUARTERLY FINANCIAL SUMMARY
(Unaudited)
<TABLE>
<CAPTION>
1996 (1) March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Revenue $6,522,687 $9,229,284 $5,003,263 $7,922,338
Operating income 571,836 1,011,320 501,124 (451,483)
Income before provision for
income taxes 662,239 1,002,423 588,686 (588,079)
Pro forma net income(loss)(2) 400,227 619,217 355,726 (589,066)
Pro forma earnings (loss) per share(3) .10 .15 .09 (.12)
1995
Revenue $5,412,018 $4,786,879 $3,870,352 $7,630,304
Operating income 678,380 613,277 484,176 854,279
Income before provision for
income taxes 696,496 659,408 557,361 980,843
Pro forma net income(2) 417,340 394,767 330,639 602,864
Pro forma earnings per share(3) .10 .10 .08 .14
</TABLE>
(1) Results after October 31, 1996 reflect the impact of the merger with EMAC
which is more fully described in Note 3 to the Consolidated Financial
Statements.
(2) Pro forma net income (loss) represents net income (loss) after a pro forma
tax provision reflecting the estimated income tax expense of the Company as if
it had been subject to federal and state income taxes at C corporation rates
and as if the Merger Note were issued on January 1, 1995. See "Notes to
Consolidated Financial Statements - Note 2".
(3) See Note 2 to the Consolidated Financial Statements regarding the
computation of pro forma earnings per share.
F-16
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement of Merger among the Company, Pre-Merger
Overseas, and Ellen Dinerman Little and Robert B.
Little, dated as of July 2, 1996. Incorporated by
reference to Exhibit 10.7 to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1996.
2.2 Amendment to Agreement of Merger among the Company,
Pre-Merger Overseas and Ellen Dinerman Little and
Robert B. Little, dated as of September 20, 1996.
Incorporated by reference to Exhibit 10.8 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1996.
3.1 Restated Certificate of Incorporation. Incorporated by
reference to Exhibit 3.1 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
3.2 Bylaws. Incorporated by reference to Exhibit 3.2 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
4.1 Form of Common Stock Certificate. Incorporated by
reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
4.2 Form of Warrant Certificate. Incorporated by reference
to Exhibit 4.2 to the Company's Registration Statement
on Form S-1, Registration No. 33-83624.
4.3 Form of Unit Purchase Option. Incorporated by
reference to Exhibit 4.3 to the Company's Registration
Statement on Form S-1, Registration No. 33-83624.
4.4 Warrant Agreement between Continental Stock Transfer &
Trust Company and the Company. Incorporated by
reference to Exhibit 4.4 to the Company's Registration
Statement on Form S-1, Registration No. 33-83624.
4.5 Letter agreement, dated October 28, 1996, amending the
Unit Purchase Options. Incorporated by reference to
Exhibit 4.5 to the Company's Current Report on Form 8-
K, dated October 25, 1996, filed with the Commission on
November 12, 1996.
4.6 Form of Warrant issued in the Company's bridge
financing. Incorporated by reference to Exhibit 10.4
to the Company's Registration Statement on Form S-1,
Registration No. 33-83624.
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.7 Warrant, dated October 31, 1996, for Jefferson Capital
Group, Ltd. to purchase shares of Common Stock of the
Company. Incorporated by reference to Exhibit 4.6 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
10.1 Secured Promissory Note of the Company, dated October
31, 1996, payable to Robert B. Little and Ellen
Dinerman Little. Incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
10.2 Indemnity Agreement, dated October 31, 1996, between
the Company and Ellen Dinerman Little. Incorporated by
reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.3 Indemnity Agreement, dated October 31, 1996, between
the Company and Robert B. Little. Incorporated by
reference to Exhibit 10.3 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.4 Indemnity Agreement, dated October 31, 1996, between
the Company and William F. Lischak. Incorporated by
reference to Exhibit 10.4 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.5 Indemnity Agreement, dated October 31, 1996, between
the Company and Stephen K. Bannon. Incorporated by
reference to Exhibit 10.5 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.6 Indemnity Agreement, dated October 31, 1996, between
the Company and Scot K. Vorse. Incorporated by
reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.7 Indemnity Agreement, dated October 31, 1996, between
the Company and Jeffrey A. Rochlis. Incorporated by
reference to Exhibit 10.7 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.8 Indemnity Agreement, dated October 31, 1996, between
the Company and Alessandro Fracassi. Incorporated by
reference to Exhibit 10.8 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.9 Employment Agreement, dated as of October 31, 1996,
between the Company and Ellen Dinerman Little.
Incorporated by reference to Exhibit 10.9 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.10 Employment Agreement, dated as of October 31, 1996,
between the Company and Robert B. Little. Incorporated
by reference to Exhibit 10.10 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.11 Employment Agreement, dated as of October 31, 1996,
between the Company and William F. Lischak.
Incorporated by reference to Exhibit 10.11 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.12 Security Agreement, dated as of October 31, 1996,
between the Company and Ellen Dinerman Little and
Robert B. Little. Incorporated by reference to Exhibit
10.12 to the Company's Current Report on Form 8-K,
dated October 25, 1996, filed with the Commission on
November 12, 1996.
10.13 Tax Reimbursement Agreement, dated as of October 31,
1996, between the Company, Ellen Dinerman Little,
Robert B. Little and William F. Lischak. Incorporated
by reference to Exhibit 10.13 to the Company's Current
Report on Form 8-K, dated October 25, 1996, filed with
the Commission on November 12, 1996.
10.14 Promissory Note (the "Insurance Note"), dated October
31, 1996, payable to Ellen Dinerman Little and Robert
B. Little. Incorporated by reference to Exhibit 10.14
to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.15 Stockholders' Voting Agreement, dated as of October 31,
1996, by and among the Company, Ellen Dinerman Little,
Robert B. Little, William F. Lischak, Jeffrey A.
Rochlis, Barbara Boyle, the Hoberman Family Trust, John
Hyde, Sparta Partners III, Stephen K. Bannon, Scot K.
Vorse and Gary M. Stein. Incorporated by reference to
Exhibit 10.15 to the Company's Current Report on Form
8-K, dated October 25, 1996, filed with the Commission
on November 12, 1996.
10.16 Lock-Up and Registration Rights Agreement, dated as of
October 31, 1996, between the Company and Ellen
Dinerman Little, Robert B. Little and William F.
Lischak. Incorporated by reference to Exhibit 10.16 to
the Company's Current Report on Form 8-K, dated October
25, 1996, filed with the Commission on November 12,
1996.
10.17 Non-Competition Agreement, dated as of October 31,
1996, between the Company and Ellen Dinerman Little.
Incorporated by reference to Exhibit 10.17 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.18 Non-Competition Agreement, dated as of October 31,
1996, between the Company and Robert B. Little.
Incorporated by reference to Exhibit 10.18 to the
Company's Current Report on Form 8-K, dated October 25,
1996, filed with the Commission on November 12, 1996.
10.19 Overseas Filmgroup, Inc. 1996 Special Stock Option Plan
and Agreement. Incorporated by reference to Exhibit
99.1 to the Company's Current Report on Form 8-K, dated
October 25, 1996, filed with the Commission on November
12, 1996.
10.20 Overseas Filmgroup, Inc. 1996 Basic Stock Option and
Stock Appreciation Rights Plan. Filed herewith.
10.21 Agency Agreement, dated as of December 10, 1993,
between the Company and GKN Securities Corp., and
amendments thereto (without schedules). Incorporated
by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1, Registration No.
33-83624.
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.22 Letter Agreement among certain stockholders of the
Company, the Company and GKN Securities Corp. (without
schedules). Incorporated by reference to Exhibit 10.2
to the Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.23 Form of Stock Escrow Agreement between the Company and
Continental Stock Transfer & Trust Company.
Incorporated by reference to Exhibit 10.6 to the
Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.24 Letter Agreement regarding administrative support.
Incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1,
Registration No. 33-83624.
10.25 Restated and Amended Syndication Agreement dated as of
October 31, 1996, among Coutts & Co., Berliner Bank
A.G. London Branch, Overseas Filmgroup, Inc. and
Entertainment/Media Acquisition Corporation. Filed
herewith. +
10.26 Video Distribution Agreement dated March 15, 1996,
between the Company and BMG Video. Filed herewith. +
10.27 Loan Out Agreement dated as of March 11, 1996 between
the Company and BLAH, Inc. Filed herewith.
10.28 Agreement dated as of September 12, 1996, between the
Company and Racing Pictures s.r.l. Filed herewith.
10.29 Option Agreement dated as of September 13, 1996,
between Robert B. Little and the Company. Filed
herewith.
10.30 Overseas Filmgroup Lease Agreement dated April 21,
1987,as amended. Filed herewith
21 Subsidiaries of the Registrant. Filed herewith.
23 Consent of Price Waterhouse LLP. Filed herewith.
27 Financial Data Schedule (Filed electronically only)
Filed herewith.
- --------------------
+ Confidential treatment has been requested for portions of such exhibit.
<PAGE>
OVERSEAS FILMGROUP, INC.
1996 BASIC STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE.
The purpose of this 1996 Basic Stock Option and Stock Appreciation
Rights Plan (the "Plan") of Overseas Filmgroup, Inc., a Delaware corporation
(the "Company"), is to secure for the Company and its stockholders the benefits
arising from stock ownership and participation in stock appreciation by selected
employees of the Company or any "parent corporation" or "subsidiary corporation"
within the meaning of Sections 424(e) and (f) of the Internal Revenue Code of
1986, as amended (the "Code") (each such parent or subsidiary corporation being
referred to herein as an "Affiliate"), Directors, consultants or other persons
as the Board of Directors of the Company (the "Board of Directors"), or a
committee thereof constituted for the purpose, may from time to time determine
consistent with the limitations set forth herein. The Plan will provide a means
whereby (i) such employees may purchase shares of the Common Stock of the
Company pursuant to options that will qualify as "incentive stock options" under
Section 422 of the Code, (ii) such employees, Directors, consultants or other
persons may purchase shares of Common Stock of the Company pursuant to "non-
qualified stock options," and (iii) such employees, Directors, consultants or
other persons may acquire the right to participate in the appreciation of the
Common Stock of the Company pursuant to "stock appreciation rights." Incentive
stock options and non-qualified stock options are sometimes referred to
collectively as "options." It is intended that the provisions of this Plan
pertaining to incentive stock options shall be consistent with the requirements
of the Code and other applicable law pertaining to incentive stock options, and
the Plan shall be interpreted and, if necessary, deemed modified to the extent
necessary to permit options granted hereunder as incentive stock options to so
qualify for federal income tax purposes.
2. ADMINISTRATION.
2.1 The Plan shall be administered by the Board of Directors or by one or
more committees of the Board of Directors, each consisting of two or more
Directors of the Company to whom administration of the Plan has been delegated
(the "Committee"). Any action of the Board of Directors or the Committee with
respect to administration of the Plan shall be taken by a majority vote or
written consent of its members.
2.2 Subject to the provisions of the Plan, the Board of Directors or the
Committee shall have authority (i) to construe and interpret the Plan, (ii) to
define terms used therein, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, (iv) to determine those eligible individuals
to whom and the time or times at which options or stock appreciation rights
shall be granted (with any such individual being referred to herein as a
"Participant"), whether any options granted will be incentive stock options or
non-
<PAGE>
qualified stock options, the number of shares to be subject to each option or
stock appreciation right, the exercise price of an option or the Initial Value
of a stock appreciation right, the number of installments, if any, in which each
option or stock appreciation right may be exercised, and the duration of each
option or stock appreciation right, (v) to approve and determine the duration of
leaves of absence which may be granted to Participants without constituting a
termination of their service for the purposes of the Plan, and (vi) to make all
other determinations necessary or advisable for the administration of the Plan.
All determinations and interpretations made by the Board of Directors or
Committee shall be binding and conclusive on all Participants in the Plan and
their legal representatives and beneficiaries.
3. SHARES SUBJECT TO THE PLAN; LIMITS UPON AWARDS.
Subject to adjustment as provided in Section 17 and Section 18 hereof:
3.1 Shares made subject to options under the Plan shall consist of the
Company's authorized but unissued Common Stock;
3.2 Stock appreciation rights awarded under the Plan shall be granted with
reference to shares of the Company's Common Stock, and the number of such shares
so referenced -- i.e., the number of stock appreciation rights awarded as
described in Section 8.1 below -- shall be deemed to be made subject to stock
appreciation rights for purposes of the limitations of this Section 3; and
3.3 The aggregate combined number of shares of the Company's Common Stock
made subject to options or stock appreciation rights granted under the Plan,
during the term hereof, to all recipients in total shall not exceed Five Hundred
Fifty Thousand (550,000) shares. In no event may any one individual be granted
stock options and independently exercisable stock appreciation rights under the
Plan for more than Two Hundred Thousand (200,000) shares of Common Stock in the
aggregate over the term of the Plan.
If any option or stock appreciation right granted under the Plan shall
expire or terminate for any reason, without having been exercised in full, the
unpurchased shares that were subject to such expired option or the unexercised
rights that were subject to such expired stock appreciation right, as
applicable, shall again be available to be made subject to options or stock
appreciation rights to be granted under the Plan.
4. ELIGIBILITY.
4.1 The following persons, and only the following persons, shall be
eligible to participate in and receive awards or grants under the Plan, as
follows:
2.
<PAGE>
4.1.1 All regular full-time employees of the Company or any
Affiliate shall be eligible to receive incentive stock options, non-qualified
stock options and stock appreciation rights.
4.1.2 Directors of the Company or any Affiliate who are not regular
salaried employees of the Company or any Affiliate, and consultants and other
persons who provide services to the Company or any Affiliate on a regular or
substantial basis, but who are not regular salaried employees of the Company or
any Affiliate, shall not be eligible to receive incentive stock options, but
shall be eligible to receive non-qualified stock options and stock appreciation
rights.
4.2 No stock option may be granted to any employee who, at the time such
stock option is granted, owns shares possessing more than ten percent (10%) of
the total combined voting power of all classes of stock in the Company or an
Affiliate (such employee to be hereinafter referred to as a "10% Shareholder"),
unless the exercise price of that stock option is at least one hundred ten
percent (110%) of the fair market value of the stock subject to such option at
the time of the grant, with such fair market value to be determined in
accordance with Section 9 hereof. If the stock option granted to such 10%
Shareholder is an incentive stock option under the federal tax laws, then such
stock option must not by its terms be exercisable after the expiration of five
(5) years from the date such incentive stock option is granted.
4.3 The aggregate fair market value of the Common Stock with respect to
which incentive stock options granted to any one employee under this Plan or any
other incentive stock option plan of the Company or an Affiliate are exercisable
for the first time during any calendar year shall not exceed $100,000,
determined on the basis of the fair market value of the Common Stock on the date
each respective option is granted (with such fair market value to be determined
in accordance with Section 9 hereof).
5. DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS.
Each option and stock appreciation right and all rights associated
therewith shall expire on such date as the Board of Directors or the Committee
may determine, but in no event later than ten years from the date on which the
option or stock appreciation right is granted, and shall be subject to earlier
termination as provided herein.
6. PRICE AND EXERCISE OF OPTIONS.
6.1 Subject to Section 4.2, the purchase price of the Common Stock covered
by each option shall be determined by the Board of Directors or the Committee in
accordance with the following provisions:
3.
<PAGE>
(i) The exercise price per share shall not be less than
eighty-five percent (85%) of the fair market value per share of Common Stock on
the option grant date.
(ii) In the case of an incentive stock option, the exercise
price per share shall not be less than one hundred percent (100%) of the fair
market value per share of Common Stock on the date the incentive stock option is
granted.
(iii) If the person to whom the option is granted is a 10%
Shareholder, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the fair market value per share of Common Stock on
the grant date.
The fair market value per share of Common Stock shall be determined in
accordance with Section 9 below.
Except to the extent the sale and remittance procedure described in
subparagraph (iv) below is utilized, the purchase price of the Common Stock upon
exercise of an option shall be paid in full at the time of exercise in one or
more of the forms specified below:
(i) in cash or by certified or cashier's check payable to the
order of the Company,
(ii) by cancellation of indebtedness owed by the Company to the
Participant,
(iii) by delivery of shares of Common Stock of the Company
already owned by and in the possession of the Participant and having an
aggregate fair market value equal to the total exercise price of the option
being exercised (provided such shares have been held by the Participant for at
least six (6) months),
(iv) to the extent such procedure is available at the time of
the option exercise, through a special sale and remittance procedure pursuant to
which the Participant shall concurrently provide irrevocable instructions to (a)
a Company-designated brokerage firm to effect the immediate sale of the shares
underlying the options being exercised and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for exercise of the options covering such
shares plus all applicable taxes required to be withheld by the Company by
reason of such exercise, and (b) the Company to deliver the certificates for the
shares underlying the options being exercised directly to such brokerage firm in
order to complete the sale,
4.
<PAGE>
(v) if authorized by the Board of Directors or the Committee
or if specified in the option being exercised, by a promissory note made by the
Participant in favor of the Company, subject to terms and conditions determined
by the Board of Directors or the Committee, secured by the Common Stock issuable
upon exercise, and in compliance with applicable law (including, without
limitation, state, corporate and federal requirements),
(vi) by any combination thereof, or
(vii) in such other manner as the Board of Directors or the
Committee may specify in order to facilitate the exercise of options by the
holders thereof.
Shares of Common Stock used to satisfy the exercise price of an option
in accordance with Section 6.1(iii) above shall be valued at their fair market
value determined in accordance with Section 9 hereof.
6.2 No option granted under this Plan shall be exercisable if such
exercise would involve a violation of any applicable law or regulation
(including, without limitation, federal and state securities laws and
regulations). The Board of Directors or the Committee shall have complete
discretion to grant options under the Plan which are immediately exercisable for
all of the option shares as either vested or unvested shares or which become
exercisable for the option shares in a series of installments over the
Participant's period of service with the Company. Unless otherwise determined
by the Board of Directors or the Committee, if the Participant shall not in any
given installment period purchase all of the shares which the Participant is
entitled to purchase during such installment period, then such Participant's
right to purchase any shares not purchased in such installment period shall
continue until the expiration date or sooner termination of the Participant's
option. No option may be exercised for a fraction of a share, and no partial
exercise of any option may be for less than ten shares.
7. ANNUAL GRANTS TO NON-EMPLOYEE DIRECTORS.
7.1 A non-qualified stock option to purchase Five Thousand (5,000) shares
of the Company's Common Stock (subject to the adjustments provided in Sections
17 and 18 below) shall be granted under this Plan to each eligible non-employee
Director in accordance with the following provisions:
(a) Each individual who is serving as a non-employee Director
on the effective date of the merger (the "Merger") of Overseas Filmgroup, Inc.,
a privately-held Delaware corporation, into the Corporation pursuant to which
the Corporation as the surviving company shall change its name from
Entertainment/Media Acquisition Group to Overseas Filmgroup, Inc. shall receive
such a non-qualified stock option on that date.
5.
<PAGE>
(b) Each individual who is first elected or appointed as a
non-employee Director at any time after the effective date of the Merger shall
receive, at the time of such initial election or appointment, such a
non-qualified stock option.
(c) On the date of each Annual Stockholders Meeting, beginning
with the 1997 Annual Meeting, each individual who is to continue to serve after
such meeting as a non-employee Director shall be granted such a non-qualified
stock option, provided such individual has served as a Director for at least six
(6) months.
7.2 Each such option shall include the following terms and provisions:
(a) The exercise price per share shall be equal to the greater
of (a) the fair market value of one such share of Common Stock (determined as
set forth in Section 9 hereof) on the date of grant of such option or (b) the
par value of one such share of Common Stock.
(b) The option shall be exercisable one year after the date of
grant of such option; provided, however, that the option shall become
exercisable for all the option shares immediately prior to the effective date of
a Corporate Transaction under Section 18. The option shall expire (subject to
Section 18) on the first to occur of the following: (a) the third anniversary of
the date upon which the optionee shall cease to be a Director or (b) the tenth
anniversary of the date of grant of such option.
(c) Payment of the exercise price of such option shall be made
in accordance with the provisions of Section 6.1 hereof.
(d) The option shall be subject to Sections 3, 4, 9, 10, 11,
15, 17, 18, 19, 20 and 21 hereof.
8. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
All stock appreciation rights shall be evidenced by a Certificate of
Grant (sometimes referred to herein as a "Certificate") in such form as the
Board of Directors or the Committee shall from time to time approve. Stock
appreciation rights granted to Directors or executive officers shall require
approval of the Committee. A grant of stock appreciation rights shall be
subject to the following terms and conditions:
8.1 Each stock appreciation right shall entitle a Participant to an amount
(the "Appreciation") equal to the excess of the Exercise Value of one share of
Common Stock over the Initial Value of one share of Common Stock. The Initial
Value for each stock appreciation right shall be specified in the Certificate of
Grant evidencing such right and shall equal the fair market value of a share of
Common Stock on the date of grant, with such fair market value to be determined
as set forth in Section 9 hereof. The Exercise Value for a stock appreciation
right shall equal the fair market value of a share of Common
6.
<PAGE>
Stock on the date the stock appreciation right is exercised, determined as set
forth in Section 9 hereof. The total Appreciation available to a Participant
from the exercise of any stock appreciation right shall be equal to the number
of stock appreciation rights exercised, multiplied by the amount of Appreciation
per stock appreciation right. Participants acknowledge that a stock
appreciation right is a method of incentive compensation for employees,
Directors, consultants and other persons and does not constitute an offering or
sale of Common Stock to anyone.
8.2 The Appreciation available to a Participant upon exercise of the
Participant's stock appreciation rights shall be paid to the Participant in cash
or Common Stock as determined by the Board of Directors or the Committee. If
payment is made in Common Stock of the Company, then the fair market value of
the Common Stock for purposes of calculating the number of shares of Common
Stock that shall be issued to pay the Appreciation of a stock appreciation right
shall be based upon the fair market value of the Common Stock as determined in
Section 9 hereof on the date of exercise of the stock appreciation right. If
the total Appreciation is paid in Common Stock, the total Appreciation will be
reduced to the largest amount divisible by the fair market value of one share of
Common Stock. Appreciation shall be paid as compensation and without interest
by the Company as specified in the Certificate of Grant.
8.3 All stock appreciation rights must have an Initial Value no less than
the fair market value of a share of Common Stock as determined in Section 9
hereof as of the date of grant of such rights.
8.4 A stock appreciation right (a "Related Right") may be granted under
this Plan pursuant to a Certificate of Grant providing that the exercise of the
stock appreciation right affects the exercise of an option granted pursuant to
this Plan (the "Related Option"). For example, to the extent permitted by
applicable law, the Certificate of Grant pursuant to which a Related Right is
granted may provide that the Related Right may be exercised only to the extent
to which a Related Option is simultaneously exercised. Alternatively, a
Certificate of Grant may provide that a Related Right may be exercisable only to
the extent to which the Related Option is exercisable, and then only in lieu of
the exercise of such Related Option, in which case (i) upon the exercise or
termination of the Related Right, the Related Option shall cease to be
exercisable and shall be canceled to the extent of the number of shares with
respect to which the Related Right was exercised or terminated, and (ii) upon
the exercise or termination of the Related Option, the Related Right shall cease
to be exercisable and shall be canceled to the extent of the number of shares to
which the Related Option was exercised or terminated. In addition to the
foregoing, if the Related Option is an "incentive stock option" granted pursuant
to the Plan, then the Related Right must satisfy the following conditions:
8.4.1 The Related Right must be granted only at the time of grant of
the Related Option;
7.
<PAGE>
8.4.2 The Related Right must expire no later than the expiration of
the Related Option;
8.4.3 The Related Right must be granted for an amount of
Appreciation equal to or less than one hundred percent of the difference between
the exercise price of the Related Option and the market price of the Stock
subject to the Related Option at the time the Related Right is exercised;
8.4.4 The Related Right may be transferable only when the Related
Option is transferable, and only under the same conditions;
8.4.5 The Related Right may be exercised only when the Related
Option is eligible to be exercised; and
8.4.6 The Related Right may be exercised only when the market price
of the Stock subject to the Related Option exceeds the exercise price of the
Related Option.
8.5 The exercise of any stock appreciation right or Related Right by an
executive officer or Director subject to the short-swing profit restrictions of
the Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), shall be subject to the approval of the Board of Directors or the
Committee at the time such right is exercised or may be pre-approved by the
Board of Directors or the Committee at any time prior to such exercise. If the
exercise of the stock appreciation right or Related Right is so pre-approved,
then that pre-approval shall be effective only if such right is exercised in
accordance with the terms of the Certificate of Grant and the provisions of this
Section 8 as in effect at the time of such pre-approval.
8.6 No stock appreciation right granted under this Plan shall be
exercisable if such exercise would involve a violation of any applicable law or
regulation (including, without limitation, federal and state securities laws and
regulations). Each stock appreciation right shall be exercisable in such
installments during the period prior to its expiration date as the Board of
Directors or the Committee shall determine; provided, however, that, unless
otherwise determined by the Board of Directors or the Committee, if the
Participant shall not in any given installment period exercise all of the stock
appreciation rights which the Participant is entitled to exercise in such
installment period, then the Participant's right to exercise any stock
appreciation rights not exercised in such installment period shall continue
until the expiration date or sooner termination of the Participant's stock
appreciation rights.
9. FAIR MARKET VALUE OF COMMON STOCK.
While the Common Stock is traded only on the OTC Bulletin Board, the
fair market value per share will be the average of the highest bid and lowest
asked prices of the Common Stock quoted on the relevant date. If the Common
Stock should subsequently become traded on the Nasdaq Small Cap Market, then the
fair market value per share will
8.
<PAGE>
be the average of the highest bid and lowest asked prices of the Common Stock
quoted for the relevant date; provided, however, that for any date in question
under the Plan on which there is a closing selling price quoted for the Common
Stock on the Nasdaq Small Cap Market, such closing selling price shall be deemed
to be the fair market value of the Common Stock on that date. Should the Common
Stock be admitted for trading on the Nasdaq National Market, the fair market
value per share of Common Stock on any relevant date under the Plan will be the
closing selling price per share on that date as reported by the National
Association of Securities Dealers on the Nasdaq National Market. If the Common
Stock is ever traded on a national securities exchange, then the fair market
value per share of Common Stock on any relevant date under the Plan will be the
closing selling price per share on that date on such exchange, as reported by
The Wall Street Journal.
10. WITHHOLDING TAX.
Upon (i) the disposition of shares of Common Stock acquired pursuant
to the exercise of an incentive stock option granted pursuant to the Plan within
two years of the granting of the incentive stock option or within one year after
exercise of the incentive stock option, (ii) the exercise of a non-qualified
stock option (or an incentive stock option treated as a non-qualified stock
option) or (iii) the exercise of a stock appreciation right, the Company shall
have the right to require such disposing or exercising person, and such person
by accepting the options or stock appreciation rights granted under the Plan
hereby agrees, to pay the Company the amount of any taxes which the Company may
be required to withhold with respect thereto. The Board of Directors or the
Committee shall have the authority, exercisable either at the time the option or
stock appreciation right is granted or at any time while such option or stock
appreciation right remains outstanding, to provide such person with the right,
exercisable in connection with a clause (i) or (ii) transaction or clause (iii)
exercise if the Appreciation is paid with Common Stock, to pay the amount of any
required withholding taxes by delivering to the Company shares of the Company's
Common Stock having a fair market value determined in accordance with Section 9
hereof equal to the withholding tax obligation determined by the Company. If
such right is granted to such disposing or exercising person, then the shares
which may be delivered in satisfaction of such withholding tax obligation may,
at such person's discretion, be either shares withheld by the Company upon the
exercise of the option or stock appreciation right or other shares of Common
Stock.
11. NONTRANSFERABILITY.
An option or stock appreciation right granted under the Plan shall, by
its terms, be nontransferable by the holder either voluntarily or by operation
of law, other than by will or the laws of descent and distribution, and shall be
exercisable during the holder's lifetime only by the Optionee.
9.
<PAGE>
12. HOLDING OF STOCK AFTER EXERCISE OF OPTION.
At the discretion of the Board of Directors or the Committee, any
option or stock appreciation right may provide that the Participant, by
accepting such option or stock appreciation right, represents and agrees, for
the Participant and the Participant's permitted transferees, that none of the
shares acquired upon exercise of an option or stock appreciation right will be
acquired with a view to any sale, transfer or distribution of said shares in
violation of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations promulgated thereunder, and the person entitled to exercise the
same shall furnish evidence satisfactory to the Company (including a written and
signed representation) to that effect in form and substance satisfactory to the
Company, including an indemnification of the Company in the event of any
violation of the Act by such person.
13. TERMINATION OF SERVICE.
The provisions below shall govern the exercise of any options held by
the Participant at the time of cessation of Service. A Participant shall be
deemed to continue in Service for so long as such individual renders services to
the Company (or any parent or subsidiary) in the capacity of an employee, a non-
employee Board member or an independent consultant, except to the extent
otherwise specifically provided in the documents evidencing the option grant.
(i) Should the Participant cease to remain in Service for any
reason (other than Disability, death or termination for Cause), then the
Participant shall have a period of three (3) months following the date of such
cessation of Service during which to exercise each outstanding option held by
such Participant.
(ii) Under no circumstances shall any such option be
exercisable after the specified expiration of the option term. Each outstanding
option under the Plan held by the Participant shall immediately terminate and
cease to be outstanding upon the termination of his or her Service for Cause.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of vested
shares for which the option is exercisable on the date of the Participant's
cessation of Service. Upon the expiration of the applicable exercise period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any vested shares for which the option has not
been exercised. However, the option shall, immediately upon the Participant's
cessation of Service, terminate and cease to be outstanding to the extent it is
not exercisable for vested shares on the date of such cessation of Service.
(iv) A leave of absence approved in writing by the Board of
Directors or the Committee shall not be deemed a termination of Service for the
purposes of this Section 13.
10.
<PAGE>
(v) For purposes of this Section 13, the term Cause shall have
the same meaning in effect for that term under any written employment agreement
existing between the Corporation (or any parent or subsidiary) and the
Participant at the time of his or her cessation of Service. In the absence of
such a written employment agreement, the term Cause shall mean the commission of
any act of fraud, embezzlement or dishonesty by the Participant, any
unauthorized use or disclosure by such person of confidential information or
trade secrets of the Corporation (or any parent or subsidiary), or any other
intentional misconduct by the Participant adversely affecting the business or
affairs of the Corporation (or any parent or subsidiary) in a material manner.
The foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any parent or subsidiary) may consider as
grounds for the dismissal or discharge of any Participant in the service of the
Corporation (or any parent or subsidiary).
14. DEATH OR PERMANENT DISABILITY OF OPTION HOLDER/EXTENSION OF EXERCISE PERIOD
14.1 If a Participant dies or becomes permanently disabled while in
the Service of the Company or an Affiliate, then each outstanding option held by
that Participant shall expire one year after the date of such death or permanent
disability or upon any earlier expiration of the option term. During such one-
year or shorter period, the option may not be exercised in the aggregate for
more than the number of vested shares for which the option is exercisable on the
date of the Participant's death or permanent disability. Upon the expiration of
such one-year period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. However, the option shall, immediately
upon the Participant's cessation of Service by reason of death or permanent
disability, terminate and cease to be outstanding to the extent that option is
not exercisable for vested shares on the date of such cessation of Service.
14.2 The Board of Directors or the Committee shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to extend the period of time for which the option is
to remain outstanding following the Participant's cessation of Service or death
from the limited period otherwise in effect for that option to such greater
period of time as the Board of Directors or the Committee deems appropriate, but
in no event beyond the expiration date of the option term.
15. PRIVILEGES OF STOCK OWNERSHIP.
No person entitled to exercise any option or stock appreciation right
granted under the Plan shall have any of the rights or privileges of a
stockholder of the Company with respect to any shares of Common Stock issuable
upon exercise of such option or stock appreciation right until certificates
representing such shares shall have been issued and delivered. No shares shall
be issued and delivered upon exercise of any option or stock appreciation right
unless and until, in the opinion of counsel for the Company, there shall have
been full compliance with any applicable registration requirements of the Act,
any
11.
<PAGE>
applicable listing requirements of any national securities exchange on which the
Common Stock is then listed, and any other requirements of law or of any
regulatory bodies having jurisdiction over such issuance and delivery.
16. REPURCHASE RIGHTS
The Plan Administrator shall have the discretion to grant options which are
exercisable for unvested shares of Common Stock. Should the Participant cease
Service while holding such unvested shares, the Company shall have the right to
repurchase, at the exercise price paid per share, all or (at the discretion of
the Company and with the consent of the Participant) any of those unvested
shares. The terms upon which such repurchase rights shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Board of
Directors or the Committee and set forth in the document evidencing such
repurchase right. The Board of Directors or the Committee may not impose a
vesting schedule upon any option grant or the shares of Common Stock subject to
the option which is more restrictive than twenty percent (20%) per year vesting,
with the initial vesting to occur not later than one (1) year after the option
grant date. However, this minimum vesting requirement shall not be applicable
with respect to any option granted to a Director, officer or consultant. All
outstanding repurchase rights under the Plan shall be assignable to the
successor corporation in any Corporate Transaction and shall terminate upon the
occurrence of such Corporate Transaction to the extent the successor corporation
does not accept such assignment.
17. ADJUSTMENTS. If the outstanding shares of the Common Stock of the
Company are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, an appropriate and proportionate adjustment
shall be made in the maximum number and kind of stock appreciation rights and
shares as to which options may be granted under this Plan on both an aggregate
and per-Participant basis. A corresponding adjustment changing the number or
kind of stock appreciation rights and shares allocated to unexercised options or
portions thereof, which shall have been granted prior to any such change, shall
likewise be made. Any such adjustment in the outstanding options shall be made
without change to the aggregate purchase price applicable to the unexercised
portion of the option but with a corresponding adjustment in the purchase price
for each share covered by the option. Any such adjustment in the outstanding
stock appreciation rights shall be made without change in the aggregate Initial
Value applicable to the unexercised portion of the stock appreciation rights but
with a corresponding adjustment in the Initial Value for each share covered by
the stock appreciation right.
12.
<PAGE>
17.1 Adjustments under this Section 17 shall be made by the Board of
Directors or the Committee, whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive. No
fractional shares of stock shall be issued under the Plan on any such
adjustment.
18. CORPORATE TRANSACTION
18.1 For purposes of this Section 18, "Corporate Transaction" shall mean
either of the following stockholder approved transactions to which the Company
is a party:
(a) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction; or
(b) the sale, transfer or other disposition of all or
substantially all of the Company's assets in a complete liquidation or
dissolution of the Company.
18.2 Each outstanding option (and stock appreciation right) shall be
assumable by the successor corporation (or parent thereof) in any Corporate
Transaction and shall, to the extent not so assumed, terminate and cease to be
outstanding on the effective date of such Corporate Transaction.
18.3 Each option and stock appreciation right assumed in connection with a
Corporate Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would be issuable in the consummation of such Corporate Transaction to a holder
of the same number of shares of Common Stock as are subject to such option or
stock appreciation right immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction and (ii) the exercise price payable per share under
each outstanding option and the Initial Value for each outstanding stock
appreciation right, provided the aggregate exercise price payable and Initial
Values for such securities shall remain the same, and (iii) the maximum number
of securities and/or class of securities for which any one person may be granted
options and separately exercisable stock appreciation rights under the Plan.
18.4 The grant of options and stock appreciation rights under the Plan
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
13.
<PAGE>
19. AMENDMENT AND TERMINATION OF PLAN.
19.1 Unless earlier terminated in accordance with its provisions, this
Plan shall terminate on October 30, 2006, and no grants or awards shall be made
hereunder after such date.
19.2 The Board of Directors or the Committee may at any time suspend or
terminate the Plan, or amend or revise the terms of the Plan, provided that any
such amendment or revision shall be subject to any applicable stockholder
approval requirements.
19.3 Subject to the provisions of Sections 17 and 18 above, no amendment,
suspension or termination of the Plan shall, without the consent of the holder,
alter or impair any rights or obligations under any option or stock appreciation
right theretofore granted under the Plan.
19.4 Except as provided in Sections 17 and 18 hereof, no modification may
be made to an option or stock appreciation right granted to a Participant who is
subject to Section 16 of the Exchange Act except in compliance with Rule 16b-3
of the General Rules and Regulations under the Exchange Act.
20. GENERAL PROVISIONS APPLICABLE TO PARTICIPANTS SUBJECT TO SECTION 16
OF THE EXCHANGE ACT.
20.1 It is the intent of the Company that this Plan comply in all respects
with Rule 16b-3 of the General Rules and Regulations under the Exchange Act
("Rule 16b-3") in connection with any option, or if applicable any stock
appreciation right, granted to a person who is subject to Section 16 of the
Exchange Act. Accordingly, if any provision of this Plan does not comply with
the requirements of Rule 16b-3 as then applicable to any such person, such
provisions shall be construed or deemed amended to the extent necessary to
conform to such requirements with respect to such person.
20.2 Unless a Participant could otherwise transfer an equity security,
derivative security or shares of the Company's Common Stock issued upon exercise
of a derivative security granted under the Plan without incurring liability
under Section 16(b) of the Exchange Act, (i) an equity security issued under the
Plan, other than an equity security issued pursuant to the exercise of a
derivative security granted under the Plan, shall be held for at least six
months from the date of acquisition, and (ii) with respect to a derivative
security granted under the Plan and the equity security issued pursuant to the
exercise thereof, at least six months shall elapse from the date of acquisition
of the derivative security to the date of disposition of the derivative security
(other than upon exercise or conversion) or its underlying equity security.
14.
<PAGE>
21. EFFECTIVE DATE OF PLAN.
No option or stock appreciation right granted under the Plan shall
become exercisable in whole or in part unless and until (i) the options and
underlying shares and stock appreciation rights have been registered under the
Act and qualified with the appropriate state regulatory agencies, or (ii) the
Company has been advised by counsel that such options, shares and stock
appreciation rights are exempt from such registration and/or qualification. The
Plan shall be submitted for approval by the holders of the outstanding voting
stock of the Company within the time period, and pursuant to the procedures,
required for compliance with the provisions of Rule 16b-3 and Code Section 422,
and in any event no later than twelve months from the date the Plan is adopted
by the Board of Directors. The Plan shall be deemed approved by the holders of
the outstanding voting stock of the Company if it is approved by (i) the
affirmative vote of the holders of a majority of the voting shares of the
Company represented and voting at a duly held meeting at which a quorum
representing a majority of all outstanding voting shares is present either in
person or by proxy, or (ii) the written consent of the holders of a majority of
the outstanding voting shares of the Company. Any options or stock appreciation
rights granted under the Plan prior to obtaining such stockholder approval shall
be granted under the conditions that the options or stock appreciation rights so
granted (i) shall not be exercisable prior to such approval, and (ii) shall
become null and void if such stockholder approval is not obtained.
15.
<PAGE>
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
SYMBOL "^" HAS BEEN USED IN THE EXHIBIT TO INDICATE WHERE CONFIDENTIAL
PORTIONS OF THE TEXT HAVE BEEN OMITTED FROM THE EXHIBIT AND FILED
SEPARATELY, ON A CONFIDENTIAL BASIS, WITH THE SECURITIES AND EXCHANGE
COMMISSION.
<PAGE>
DATED As of October 31,1996
- -------------------------------------------------------------------------------
COUTTS & CO.
and
BERLINER BANK A.G. LONDON BRANCH
and
OVERSEAS FILMGROUP, INC.
and
ENTERTAINMENT/MEDIA ACQUISITION CORPORATION
_______________________________________________________________________________
RESTATED AND AMENDED
SYNDICATION AGREEMENT
_______________________________________________________________________________
RICHARDS BUTLER
Beaufort House,
15, St. Botolph Street,
London EC3A 7EE
Telephone: 071-247-6555
Telex: 949494 RBLAW G
Fax: 071-247-5091
Ref: CB/RPSP
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- -----------------
<S> <C>
1. INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4. PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8. CHANGES IN APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . 46
9. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS . . . . . . . . . . . . . . 48
10. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 76
11. FINANCIAL OBLIGATIONS OF THE BORROWER . . . . . . . . . . . . . . . . . 79
12. EXECUTION OF FACILITY LETTERS . . . . . . . . . . . . . . . . . . . . . 86
13. THE PRIOR OBLIGATIONS AND EXISTING BORROWINGS . . . . . . . . . . . . . 88
14. NATURE OF THE BANKS' RIGHTS AND OBLIGATIONS . . . . . . . . . . . . . . 89
15. SECURITY AND APPLICATION OF MONIES . . . . . . . . . . . . . . . . . . . 90
16. PROCEDURE FOR FUNDING ADVANCES . . . . . . . . . . . . . . . . . . . . . 92
17. AVAILABILITY AND REVIEW . . . . . . . . . . . . . . . . . . . . . . . . 94
18. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
19. THE AGENT AND THE BANKS . . . . . . . . . . . . . . . . . . . . . . . . 97
20. CONSENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . 104
21. SHARING OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 105
22. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
23. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
24. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
25. FURTHER ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
26. CUMULATIVE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
27. GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . . . . . . . . . 125
28. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
29. RELATIONSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
30. CONFLICTS WITH FACILITY LETTERS . . . . . . . . . . . . . . . . . . . . 126
</TABLE>
<PAGE>
THIS RESTATED AND AMENDED SYNDICATION AGREEMENT is made the 31st day of October
1996
BETWEEN:-
(1) COUTTS & CO of 440 Strand, London WC2R OQS ("Coutts");
(2) BERLINER BANK A.G. LONDON BRANCH (the United Kingdom branch of a company
incorporated in Germany) of No. 1 Crown Court, Cheapside, London
EC2V 6JP ("Berliner");
(3) OVERSEAS FILMGROUP, INC. of 8800 Sunset Boulevard, Los Angeles CA 90069
("Old OFG"); and
(4) ENTERTAINMENT/MEDIA ACQUISITION CORPORATION of 8800 Sunset Boulevard, Los
Angeles, CA 90069 ("New OFG").
WHEREAS
(A) Pursuant to a syndication agreement dated 9th May 1994 between the Banks,
National Westminster Bank plc and Old OFG, as amended with effect from 9th
May 1995 and as extended pursuant to a commitment letter dated 12th August
1996 (effective as of 9th May 1996) from the Banks to Old OFG (such
agreement, as amended and extended being "the Existing Syndication
Agreement") the Banks made available certain facilities to Old OFG.
<PAGE>
(B) Pursuant to a facility letter ("the Distribution Facility Letter") dated 5th
July 1996 between the Agent and Old OFG, the Agent made available to Old OFG
a facility ("the Distribution Facility") of US$3,500,000 to enable Old OFG
to make a distribution to its principal shareholders.
(C) Pursuant to an Agreement of Merger dated as of July 2, 1996 executed by Old
OFG, New OFG, Ellen Dinerman Little and Robert B. Little, an Amendment to
Agreement of Merger dated as of September 20, 1996 executed by the same
parties (as amended, the Agreement of Merger is referred to herein as the
"Merger Agreement") and the certificate of merger ("the Certificate of
Merger") to be executed by new OFG and to be filed with the Secretary of
State of the State of Delaware Old OFG will merge with and into New OFG with
New OFG as the surviving corporation ("the Merger").
(D) Upon consummation of the Merger, New OFG will change its name from
Entertainment/Media Acquisition Corporation to Overseas Filmgroup, Inc.
(E) As a consequence of the Merger, New OFG will assume by law all of
the obligations of Old OFG under the Existing Syndication Agreement,
the Distribution Facility Letter and any and all agreements and
documents executed in connection therewith (including without
limitation facility letters, security agreements and any agreements
or documents executed as a pre-condition to the utilisation of any
<PAGE>
facility made available pursuant to the Existing Syndication Agreement)
(collectively "the Prior Obligations").
(F) Subject to the Merger being consummated, the Banks wish to continue to make
available facilities to New OFG on the terms set out herein.
(G) It is intended that this agreement be executed by all parties except New OFG
forthwith and by New OFG on consummation of the Merger.
IT IS AGREED as follows:-
1 INTERPRETATION
--------------
1.1 In this agreement:-
"the Acquisition shall mean each and every agreement
Agreements" described as "the Acquisition Agreement" in
each Facility Letter
"Agent" means Coutts, acting in its capacity as agent
for the Banks (including itself) hereunder;
"the Back End Fee" means in respect of each Film the fee referred
to in clause 6.1.3 hereof;
<PAGE>
"Banks" means Coutts and Berliner, and each is a
"Bank";
"the Borrower" means Old OFG up to the date of the
consummation of the merger and New OFG after
the date of the consummation of the merger;
"Business Day" means a day other than a Saturday or Sunday on
which commercial banks are open for business
generally in London, and (in the case of
payments to be made in United States Dollars)
New York City or (in the case of payments to
be made in other currencies) the principal
commercial centre of the country whose
currency is concerned;
"City National" means City National Bank;
"the City National Letter means the letters of credit issued
of Credit" prior to the date hereof by each Bank in
favour of City National Bank, each such
letter of credit being for up to a maximum
amount of ^;
<PAGE>
"the City means the facility to be made available
National Facility" hereunder for the purpose set out in
clause 2.7 hereof;
"the Collections Account" means the Collections Account (as defined in
the applicable Facility Letter or Facility
Letters);
"Commitment" means in relation to each Bank the amount
which, on the assumption that the Film
Facilities, the Operating Facility and the
City National Facility were fully utilised
each Bank would be committed to make available
by way of Loan and/or assume by way of
Obligation pursuant to the terms hereof and of
the Facility Letters, the amount of each
Bank's Commitment being the amount set
opposite its name in Schedule 1;
"Distribution Commission" in respect of each Film shall bear the meaning
ascribed to it in the applicable Facility
Letter;
<PAGE>
"Distribution Expenses" in respect of each Film shall bear the meaning
ascribed to it in the applicable Facility
Letter;
"Event(s) of Default" means collectively the events of default set
out in clause 22 hereof and all "Events of
Default" as defined in each Facility Letter
and each is an "Event of Default";
"the Employment Agreements" means the agreements to be dated the effective
date of the Merger between the Borrower,
Robert Little and Ellen Little relating to the
employment by the Borrower of Robert and Ellen
Little;
"the Excluded Amounts" means the aggregate of (i) to (v) below:
(i) receivables from ^ of the ^ up to a
maximum amount of ^ of the amount
outstanding from time to time under the
Film Facilities; and
(ii) any receivables which are doubtful in
the absolute opinion of the Agent; and
<PAGE>
(iii) amounts outstanding from the Borrower
to ^, which are secured by a security
interest ranking superior to, or equal
with, the Security Interests and which
relate to the films entitled ^ and/or ^
but only up to a maximum amount equal
to the Borrower's aggregate receivables
from time to time in respect of each
such film;
(iv) amounts due to any third party
(including without limitation any
producer) contractually payable
pursuant to the arrangements made or to
be made to enable the Borrower to
acquire rights to any films (including
without limitation the Films), other
than with respect to receivables that
are already part of "the Excluded
Amounts" by virtue of the other sub-
clauses of this definition; and
<PAGE>
(v) receivables in respect of films
financed by a third party financier or
financiers since 9th May 1994 which are
secured by a security interest ranking
superior to, or equal with, the
Security Interests, but only up to a
maximum amount equal to the Borrower's
outstanding indebtedness to the
applicable financier(s);
"Facilities" means collectively the Film Facilities, the
Operating Facility, and the City National
Facility and each is a "Facility";
"Facility Letter" means in relation to each Film Facility the
agreement executed between the Agent and
the Borrower setting out the terms (other
than the terms contained in this Agreement)
on which such Film Facility is made
available to the Borrower and includes,
without limitation, any facility letter
<PAGE>
issued pursuant to the
Existing Syndication Agreement;
"Facility Request" means a request by the Borrower to the Agent
for the making of a Film Facility for a Film
in accordance with the procedures set out in
clause 12 hereof;
"Film Facilities" means collectively the facilities made
available pursuant to this Agreement for the
purposes set out in clause 2.2.2 hereof, and
each is a "Film Facility";
"the Films" means each film or television programme in
respect of which a Film Facility is made
available hereunder, and each is a "Film";
"the Group Companies" means Jacaranda Music Inc., a corporation
incorporated under the laws of the state of
Delaware (Federal Identification Number 95-
3931503), Intrastate Film Distributors, Inc, a
corporation incorporated under the laws of the
<PAGE>
state of Delaware (Federal Identification
Number 95-3842874), Overseas Filmgroup (UK)
Limited, a company incorporated under the laws
of England and Wales (Company No. 2505219) and
Walrus Pictures Inc., a company incorporated
under the laws of the State of California
(Federal Identification Number 95-4345242);
"Gross Receipts" means Gross Receipts (as defined in the
applicable Facility Letter or Facility
Letters);
"Interest Period(s)" means in relation to each Loan, each period
ascertained in accordance with clause 5
hereof;
"Licence Agreements" means all agreements and arrangements to be
entered into by the Borrower and the Sub-
Distributors for the distribution, exhibition
or other exploitation of any Film or Films
"Loan" means in relation to each Film
<PAGE>
Facility the sum made available and remaining
outstanding by way of cash advance under the
relevant Facility Letter or hereunder and/or
paid by the Agent or the Banks under any
letter of credit or bank guarantee issued
pursuant to any such Facility Letter and in
relation to the Operating Facility the
aggregate of all sums advanced hereunder and
remaining outstanding and in relation to the
City National Facility all sums advanced under
the City National Letter of Credit and
remaining outstanding hereunder and
additionally in relation to each Facility any
interest fees or expenses to which the Agent
or the Banks are entitled and which are
outstanding whether hereunder or under the
relevant Facility Letter;
"Majority Banks" means the Banks whose Commitments in total
constitute a percentage in excess of ^ of the
amount of the aggregate Commitments of the
Banks provided always that in the event of
<PAGE>
any deadlock (following good faith
consultation) between the Agent (acting in
its capacity as a Bank) and (if applicable)
any other Bank ("the Agent's Allied Bank") on
the one hand and any other Banks on the other
hand, "Majority Banks" shall mean ^ and ^ the
^;
"the Merger Documents" any and all agreements or documents executed
or supplied in consummation of, or in relation
to, the Merger;
"Net Receivables" means the aggregate amount from time to time
outstanding to the Borrower from third parties
(other than ^), plus the aggregate amount of
any ^ held by Borrower and/or the Group
Companies (or any of them);
"Obligations" means in relation to each Film Facility, the
obligations undertaken by the Banks, or by
the Agent on behalf of the Banks, to third
parties (which shall for these purposes
include any one or more of the Banks acting
in a capacity other
<PAGE>
than that of a Bank hereunder) pursuant
to the terms of the relevant Facility Letter
and/or this Agreement including without
limitation, obligations undertaken by way of
the establishment of letters of credit or the
giving of guarantees;
"the Operating means the facility to be made available
Facility" hereunder for the purpose set out in clause
2.5 hereof;
"Permitted Encumbrances" means (a) the security interest of the Agent
and/or the Banks under this Agreement and the
other Relevant Agreements; (b) any other liens
approved in writing by the Agent; and (c) each
of the following:
(i) liens for taxes, the payment of which
is not yet delinquent;
(ii) statutory and common law liens of
landlords, carriers,
<PAGE>
warehousemen, mechanics,
material-men, film laboratories,
sound studios, collecting banks and
others or Liens imposed by law
incurred in the ordinary course of
business for sums not yet delinquent
or being contested in good faith, if
all reserves or other appropriate
provisions, if any, required by GAAP
have been made therefor;
(iii) liens (other than liens imposed by
ERISA) incurred or deposits made in the
ordinary course of business in
connection with workers' compensation,
unemployment insurance and other types
of social security, or to secure the
performance of tenders, statutory
obligations, surety and appeal bonds,
bids, leases, government contracts,
performance and return-of-money bonds
and other similar
<PAGE>
obligations (exclusive of
obligations for the payment of
borrowed money) or liens in favour
of governmental authorities arising
as a matter of law in connection
with the issuance of licenses and
permits necessary for the operation
of any of the Relevant Parties'
businesses in the ordinary course;
(iv) attachment or judgment liens not
constituting an Event of Default under
clause 22 hereof;
(v) any interest or title of a lessor under
any lease permitted by clause 11.1.3.7
hereof;
(vi) leases or subleases granted by a
Relevant Party to others not
interfering in any material respect
with the business of such Relevant
Party;
(vii) Easements, rights-of-way, restrictions,
servitudes,
<PAGE>
minor defects or irregularities in
title and other similar charges or
encumbrances not interfering in any
material respect with the ordinary
conduct of the business of Borrower;
(viii) Purchase money liens securing
obligations incurred in connection with
purchases or capitalised leases of
assets (other than Films) in the
ordinary course of business; provided
that, in each case, the same attaches
only to the specific asset purchased or
leased and provided further that the
indebtedness for borrowed money
incurred in connection with all such
liens does not exceed ^ in the
aggregate at any time;
(ix) liens in a Film or any other films or
TV programs acquired by or licensed to
the Borrower after the date of this
Agreement in favour of
<PAGE>
any bank providing production
finance to the producer of any of
the Films or any such other films or
TV programs or in favour of third
party completion guarantors or the
person or entity from whom the
Borrower acquired such Film or any
such other films or TV programs
granted as security for the monetary
and distribution obligations owing
to such production bank, guarantor,
person or entity, provided that
pursuant to an intercreditor
agreement acceptable to the Agent,
after delivery of the Film or any
such other films or TV programs and
payment of the applicable advance or
guarantee (or after repayment of the
"secured sums", as applicable) such
liens are junior and subordinate to
the Security Interests and further
provided that after
<PAGE>
delivery of the Film or any such
other films or TV programs to the
Borrower and the Borrower's payment
of the applicable minimum advance,
the lien shall be limited to the
secured party's share of the
proceeds thereafter payable by
Borrower under the applicable
Acquisition Agreement or inter-party
agreement or other applicable
acquisition or distribution
agreement;
(x) liens in a Film or other films or TV
programs owned licensed to, and/or
acquired by the Borrower after the date
of this Agreement pursuant to written
security agreements in favour of guilds
required pursuant to the terms of
collective bargaining agreements
securing the obligations of the
producer of such Film to such guilds
only with respect
<PAGE>
to such Film; and
(xi) contractual liens incurred in the
ordinary course of business with regard
to services rendered by laboratories
with respect to a Film to secure the
Borrower's obligations to such
laboratories only in connection with
such Film, provided that the Borrower
has provided to the Agent a laboratory
access agreement acceptable to the
Agent and provided the aggregate amount
of all secured obligations for each
Film does not exceed ^;
(xii) the security interest referred to in
clause 3.1.10 in favour of Robert
Little and Ellen Little;
(xiii) liens in any films or TV programs
(other than the Films) owned, licensed
to, and/or acquired by the Borrower
prior to the date
<PAGE>
hereof which have been disclosed to,
and approved by the Agent and
provided always that such liens are
limited to the film or TV program in
question. Details of such liens are
set out in Schedule 5 hereto
"Permitted Prior means the Permitted Encumbrances
Encumbrances" described in clauses ^ and ^ of the definition
of the term Permitted Encumbrances that by law
are accorded priority to the liens in favour
of the Agent, and those described in clauses ^
and ^ of the definition of the term Permitted
Encumbrances, subject to the limitations in
such clauses;
"Relevant Agreements" means this Agreement, the agreements referred
to in clause 3.1 hereof, the Facility Letters
and any document described in any Facility
Letter as a "Relevant Agreement" ;
"Relevant Parties" means the parties to the Relevant
<PAGE>
Agreements;
"the Security Agreements" means the agreements pursuant to which the
Borrower and the Group Companies will grant or
have granted to the Agent (as agent and
trustee for the Banks) the Security Interests
and each is a "Security Agreement";
"the Security Interests" means the security interests referred to in
clause 3.1.1 hereof and in relation to each
Film Facility the security interest given to
the Agent pursuant to any document executed in
fulfilment of the terms of the relevant
Facility Letter;
"Sub-Distributors" means the parties to the Licence Agreements
other than the Borrower;
"Tax(es)" means all taxes, levies, imposts, duties,
charges, fees, deductions and withholdings and
any restrictions or conditions resulting in a
charge; and
<PAGE>
"US $" and "United means lawful currency of the
United States Dollars" States of America.
1.2 In this agreement unless the context requires otherwise:-
1.2.1 references to "this Agreement" are references to this
agreement and its schedules, as amended or supplemented
at the relevant time, and any reference to a "Facility
Letter" is a reference to such document as amended or
supplemented at the relevant time;
1.2.2 each reference to a "person" shall be construed as a
reference to any person, firm, company, corporation,
government state, agency of a state, association or
partnership;
1.2.3 each reference to the Borrower, any Bank, or the Agent
shall where relevant be deemed to be a reference to or
to include, as appropriate, its successors or assigns;
1.2.4 each reference in this Agreement to "writing" and any
cognate expression, includes a reference to any
communication effected by
<PAGE>
facsimile transmission or other method of
reproducing words in permanent visible form;
1.2.5 each reference in this Agreement to a statute or a
provision of a statute is a reference to that statute
or provision as amended or re-enacted at the relevant
time;
1.2.6 the index to and the headings in this Agreement are for
convenience only and shall not affect its
interpretation; and
1.2.7 references to clauses and schedules are to clauses of,
and schedules to this Agreement.
2 FACILITIES
2.1 Subject to the terms of this Agreement and to an aggregate
facility limit of US$27,000,000 (twenty seven million United
States Dollars) (inclusive of fees, costs and expenses payable
hereunder), the Banks severally (pro rata to their respective
Commitments) hereby agree to make available to the Borrower:-
2.1.1 Film Facilities under which the aggregate total amount
outstanding at any time shall not exceed US$21,000,000
(twenty one million
<PAGE>
United States Dollars) or such lesser amount as
shall be determined pursuant to clause 2.11 hereof
(inclusive of fees, costs and expenses payable
hereunder in respect thereof);
2.1.2 the Operating Facility for an aggregate amount not
exceeding US$5,000,000; and
2.1.3 the City National Facility for an aggregate amount not
exceeding US$1,000,000.
2.2
2.2.1 Subject to the limit set out in clause 2.1 hereof as the same may
be varied pursuant to clauses 2.11 and/or 2.12 hereof the Film
Facilities shall be made available as a revolving facility. The
Film Facilities will be made available by the provision by the
Agent of cash advances or by the issue by the Agent (as agent for
the Banks) of a letter of credit or bank guarantee provided
always that the Agent shall have received prior to such issue a
counter-indemnity from Berliner pursuant to clause 16.1 hereof in
a form acceptable to the Agent. It is hereby agreed that the
Agent will make available cash advances as agent for each Bank
pro rata to the proportion which each Bank's Commitment bears to
the aggregate Commitments of the Banks and that in its capacity
as a Bank, the Agent shall only be obliged
<PAGE>
make its pro rata amount of such cash advance available. Each
Film Facility will be made available pursuant to a separate
Facility Letter to be entered into in accordance with the
procedures set out in clause 12 below. It is anticipated that
any Facility Letter entered into hereunder will relate to the
financing of the acquisition of a specific film or films, and
will provide for security to be granted over the rights of the
Borrower in or relating to such film or films as the Agent
shall require on behalf of the Banks.
2.2.2 The purpose of the Film Facilities is to assist the Borrower in:
2.2.2.1 the financing of its acquisition of the right to
distribute and exploit Films; and
2.2.2.2 as approved by the Agent the financing of print,
advertising and other distribution and sales expenses
relating to programmes and Films; and
2.2.2.3 as approved by the Agent the refinancing of sums
drawndown under the Operating Facility and advanced by
the Borrower to any producer of a Film prior to
delivery thereof in
<PAGE>
accordance with the applicable Acquisition Agreement
to pay for enhancements to such Film.
2.3 Subject to the terms of individual Facility Letters (where
applicable), each Film Facility will be reviewed on the
anniversary of first drawdown (in the case of cash advance
Facilities) or of encashment (in the case of letters of credit or
guarantee Facilities) and varied as necessary so as to ensure
that all outstanding amounts will in any event have been paid or
repaid in full within six months of the date of such review.
2.4 The Operating Facility shall subject to the terms and conditions
hereof be made available as a revolving overdraft facility.
2.5 The purpose of the Operating Facility is to meet the Borrower's
working capital requirements.
2.6 The City National Facility shall subject to the terms and
conditions hereof be made available by the provision of the City
National Letter of Credit.
2.7 The purpose of the City National Facility is to provide security
to City National for a revolving overdraft
<PAGE>
facility to the Borrower
2.8 The Loan with respect to the Operating Facility shall be repaid
on the earlier of 9th May 1997 (unless the Agent in its absolute
discretion agrees, following the review referred to in clause 17
hereof, to extend such repayment date) and the happening of an
Event of Default.
2.9 The City National Facility shall be repaid by the Borrower on
demand by the Agent provided always payment has then been made by
the Banks under the City National Letter of Credit it being
agreed that the Agent shall inform the Borrower if the City
National Letter of Credit is encashed. Upon the happening of an
Event of Default the Borrower will deposit with the Agent such
amount as the Agent shall deem sufficient to cover the Banks'
contingent liability under the City National Letter of Credit if
payment has not then been made thereunder.
2.10 Each Facility will at all times be maintained and shall be repaid
in United States Dollars.
2.11 In the event that upon the effective date of the Merger, the
actual cash balances of New OFG immediately prior to the Merger
(as determined by the Agent) are
<PAGE>
less than US$11,000,000, the lesser amount referred to in
clause 2.1.1 hereof shall be the greater of:-
2.11.1 US$18,800,000 (eighteen million eight hundred thousand
United States Dollars); and
2.11.2 US$21,000,000 less the amount by which such actual cash
balances are less than US$11,000,000.
2.12 Notwithstanding clause 2.1 hereof the Banks may agree to increase
the amount available under the Film Facilities by the amount by
which the Operating Facility is repaid (in which event the amount
available to be drawn under the Operating Facility shall be
correspondingly reduced) and by the amount by which the City
National Facility is repaid.
3 CONDITIONS PRECEDENT
3.1 Prior to any advance or the assumption of any Obligations
hereunder New OFG shall execute this agreement, and:
3.1.1 the Borrower shall execute a Security Agreement in a form satisfactory to
the Banks granting to the Agent (as agent and trustee for the Banks) a
security interest (subject in priority
<PAGE>
only to the Permitted Prior Encumbrances) over the entire undertaking
and assets present and future of the Borrower in favour of the Agent as
agent and trustee for itself and Berliner as security for all amounts
owed hereunder or under any Facility Letter and each of the Group
Companies shall enter into an agreement with the Agent in form and
substance satisfactory to the Agent which shall provide that references
in the cross-guarantees and security agreements executed prior to the
date hereof in fulfilment of the terms of the Existing Syndication
Agreement to Old OFG and the Existing Syndication Agreement shall
henceforth be deemed to be references in addition to the Borrower and
this Agreement;
3.1.2 the Borrower shall supply the Agent with an opinion
letter in a form and from attorneys qualified in the
State of California acceptable to the Agent confirming
that:
3.1.2.1 Old OFG has merged with and into
New OFG pursuant to the Merger
Agreement in compliance with the
Delaware General Corporation law;
3.1.2.2 the security interest referred to in clause
3.1.1 hereof is valid and enforceable in
accordance with its terms and that all
necessary
<PAGE>
registrations and filings with respect
thereto have been made and perfected; and
3.1.2.3 having made all usual and proper enquiries
such attorneys are satisfied that no third
party is entitled to any right which might
conflict with or derogate from the benefit
conferred upon the Agent and the Banks by the
Security Interests;
3.1.3 the Borrower shall supply to the Agent a board
resolution of Overseas Filmgroup (UK) Limited
authorising the entry into and performance of those of
the agreements specified in clause 3.1.1. hereof to
which such company is a party and a certificate of New
OFG, Old OFG and each of the Group Companies other than
Overseas Filmgroup (UK) Limited in a form satisfactory
to the Agent to which shall be attached appropriate
resolutions of the board of directors of Old OFG, New
OFG and each of such Group Companies and the Articles
of Incorporation of Old OFG, New OFG and each of such
Group Companies,
<PAGE>
signed by an authorised signatory of the Borrower
and each of such Group Companies and dated the date
hereof
3.1.3.1 verifying the incumbency and containing the
specimen signature(s) of the individual(s)
authorised to execute and deliver this
Agreement and the agreements referred to in
clause 3.1.1 hereof and any other agreements
ancillary thereto as required by the Agent on
behalf of Old OFG, New OFG and such Group
Companies; and
3.1.3.2 certifying that:-
3.1.3.2.1 the resolutions attached thereto
were duly adopted by the board of
directors of Old OFG, New OFG and such
Group Companies, and, on the date hereof,
such resolutions are in full force and
effect without amendment or other
modification thereof; and
3.1.3.2.2 the Articles of
<PAGE>
Incorporation attached thereto are true
and correct and have not been amended as
at the date of the Certificate; and
3.1.3.2.3 all necessary actions have been
taken by Old OFG, New OFG and such Group
Companies to authorise Old OFG and New OFG
to enter into this Agreement and to
authorise New OFG and such Group Companies
to enter into the agreements referred to
in clause 3.1.1 hereof and any other
agreements ancillary thereto as required
by the Agent; and
3.1.4 the Borrower shall supply to the Agent a valuation
prepared by the Borrower of the Borrower's interest in
its library of films in a form acceptable to the Agent
(receipt of which the Agent acknowledges);
3.1.5 the Borrower shall supply to the Agent a certificate of
good standing showing that New OFG and the Group
Companies (other than Overseas Filmgroup (UK) Limited)
are in good
<PAGE>
standing under the laws of the jurisdiction of their
organisation and certificates indicating that New
OFG and such Group Companies have qualified to
contract business and are in good standing in any
other jurisdiction in which New OFG and such Group
Companies are required to be so qualified;
3.1.6 the Borrower shall supply the Agent with such other
evidence or information (including without limitation
UCC searches for the states of California, New York and
Delaware and the County of New York of New OFG and the
Group Companies other than Overseas Filmgroup (UK)
Limited and as the Agent shall require to establish the
consummation of the transactions contemplated hereby,
the taking of all proceedings in connection therewith
and the compliance with the conditions set forth in
this Agreement; and
3.1.7 the Borrower will take out for the benefit of the Agent
as loss payee for the account of the Banks keyman
insurance in a form acceptable to the Agent on the
lives of each of Robert Little and Ellen Little with
not less than US $1,700,000 being payable
<PAGE>
thereunder upon the happening of the death of the
first of them in time and the difference between US
$5,250,000 and the amount paid upon the death of the
first of them on the death of the second of them in
time and on the life of William Lischak with not
less than US$1,500,000 being payable on the death of
William Lischak;
3.1.8 the Borrower shall name the Agent as loss payee on the
Borrower's disability insurance by the Agent prior
to any advance or the assumption of any Obligations
hereunder. The keyman insurance policy and
disability insurance policy referred to in clauses
3.1.7 and 3.1.8 shall provide that cancellation or
other termination or variation of any material terms
thereof may only occur on thirty days' prior notice
in writing to the Agent;
3.1.9 the Borrower shall supply the Agent with the filed
Certificate of Merger of the Borrower and such of the
Merger Documents as the Agent shall require (including
without limitation the Employment Agreements);
3.1.10 the Borrower shall supply to the Agent a
<PAGE>
subordination agreement from Robert Little and Ellen
Little to the Agent in a form acceptable to the
Agent relating to the subordination of the security
interests of Robert Little and Ellen Little over the
Borrower to the security interests of the Agent and
providing that, without the prior written consent of
the Banks, Robert Little and Ellen Little may not
sell any shares in the Borrower then or thereafter
held by either of them;
3.1.11 the Borrower shall supply the Agent with such evidence
as the Banks shall require that William Lischak has
assigned to Robert Little and Ellen Little the voting
rights in the shares of New OFG held by William
Lischak; and
3.1.12 the Borrower will supply the Agent with such other
documents agreements or information as the Agent shall
reasonably request.
3.2 Prior to any advance being made under any Film Facility or any
Obligation being committed thereunder, as well as fulfilling the
conditions specified in clause 3.1 the Borrower shall also supply
to the Agent such
<PAGE>
documents and information as shall be required as a condition
precedent to any such advance or commitment under the Facility
Letter applicable thereto.
4 PAYMENT
4.1 The Borrower hereby covenants with the Banks:
4.1.1 to repay to the Agent (for the account of the Banks)
the Loan with respect to each Film Facility on the
applicable Maturity Date (as defined in the applicable
Facility Letter); and
4.1.2 to repay to the Agent (for the account of the Banks)
the Loan with respect to the Operating Facility and the
City National Facility in accordance with respectively
clause 2.8 and 2.9 hereof.
4.2 In the event the Loan and all other amounts then due have not
been repaid in full in accordance with clause 4.1 hereof this
shall not prejudice or diminish the Agent's, or the Banks' rights
hereunder or under any of the Security Agreements or any Facility
Letter, including but not in limitation its or their rights to
full repayment of the Loan and all rights of indemnity and
reimbursement of Coutts, Berliner, or the Agent
<PAGE>
(for the account of the Banks) which rights shall remain in
full force and effect.
4.3 The Borrower shall procure the payment of the Gross Receipts for
each Film and all other income from the exploitation of that Film
by the Sub-Distributors to the Licence Agreements in the
Territory (as defined in the applicable Facility Letter) directly
into the Collections Account for that Film specified in the
Facility Letter or as otherwise directed by the Agent without any
deduction whatsoever save any withholding required by law (it
being agreed by the Borrower that if any such withholding is
required to be made the Borrower will use its best endeavours to
obtain appropriate tax deduction certificates from the applicable
Sub-Distributor) and shall ensure that all Licence Agreements
entered into after the date hereof and all invoices rendered in
connection with each Film shall irrevocably direct that all
monies due thereunder be paid directly into the applicable
Collections Account. If notwithstanding the foregoing any of
such sums are paid to any other account in the name of or
operated by the Borrower by telegraphic or other bank transfer or
are paid to the Borrower by cheque, draft, letter of credit or
other money order, then such sums shall forthwith upon
identification by the Borrower (and in any event within five
Business Days of receipt)
<PAGE>
be transferred or paid (as the case may be) into the
applicable Collections Account without any deduction or
set-off whatsoever. In the event the Borrower considers that
it will be put to disproportionate expense in complying with
the terms of this clause, it shall consult the Agent and
proceed as the Agent shall direct in the Agent's good faith
judgment.
4.4 In relation to each Film Facility the balance standing to the
credit of the Collections Account shall accrue interest at the
Bank's short term notice rate calculated on the basis of a 360
day year. On the last Business Day of each Interest Period, the
Agent shall apply such balance in the Collections Account (with
accrued interest thereon) in reduction of the Loan and all other
amounts outstanding relating to such Film Facility ^. After such
Loan (and accrued interest and the Agent's and the Banks'
outstanding fees costs and expenses) has been repaid in full,
such balance shall (unless and until an Event of Default occurs
or the Agent enforces any of the Security Interests) be applied:
4.4.1 first in payment to the Borrower of ^ the relating to
that Film Facility then accrued; and
<PAGE>
4.4.2 secondly rateably and pari passu in payment to the
Agent (for the account of the Banks) of the ^ relating
to that Film Facility then accrued and in payment to
the Borrower of the ^ relating to that Film Facility
then accrued; and
4.4.3 thirdly and thereafter in payment of any surplus
remaining thereafter to the Borrower.
4.5 The Agent may however in its absolute discretion agree to the
earlier application of any part of the balance on the Collections
Account for any Film in payment of the ^ accrued in relation to
such Film. In such event:
4.5.1 the Agent shall determine in its absolute discretion
the amount to be so applied;
4.5.2 the Agent shall determine the aggregate of such ^ then
accrued;
4.5.3 the Agent shall calculate what percentage ("the
Percentage") of such aggregate is represented by the
amount referred to in clause 4.5.1 hereof;
4.5.4 the Agent shall retain for the account of
<PAGE>
the Banks the Percentage of such ^ and pay to the
Borrower the Percentage of such ^ and ^.
4.6 It is hereby expressly agreed that the Loan is made available on
a full recourse basis and that nothing in this Agreement or any
Facility Letter shall be construed as implying that repayment in
full of the Loan with respect to any Film Facility, accrued
interest and the Agent's and the Banks' outstanding fees costs
and expenses and/or any other obligation of the Borrower to the
Agent or the Banks hereunder or under any Facility Letter is with
recourse only to the funds from time to time paid or payable
pursuant to the applicable License Agreements. The Banks shall ^
as ^ and unless and until ^.
4.7 Provided not less than three Business Days' notice in writing is
given to the Agent, the Borrower may at any time prepay or repay
the Loan with respect to any Facility together with accrued
interest and the Agent's and the Banks' outstanding fees costs
and expenses provided always any costs incurred in breaking
interest periods (if such prepayment or repayment is made on a
day other than the last Business Day of an Interest Period
applicable to such Facility) and (in any event) any losses
including any loss of profit expenses or charges (including
foreign exchange losses) incurred or
<PAGE>
suffered by any of the Banks as a result of such prepayment or
repayment are simultaneously reimbursed.
4.8 The Borrower hereby authorises the Agent for the account of the
Banks at any time or from time to time following the happening of
an Event of Default without notice to the Borrower which notice
the Borrower hereby waives to set off and to appropriate and to
apply any and all deposits and any other indebtedness which the
Agent may hold or owe to or for the credit of the account of the
Borrower against the whole or any part of the Loan and against
and on account of any other obligations and liabilities of the
Borrower hereunder or under any Facility Letter (including
without limitation all claims whatsoever arising out of or
connected with any such agreements) regardless of whether or not
by so doing any account in respect thereof shall be thereby
overdrawn or that the Agent shall have made any demand hereunder
or the Agent shall have declared the Loan and/or all other sums
due hereunder or any Facility Letter to be due and payable in
accordance with the terms hereof or thereof and notwithstanding
that the said obligations and liabilities, or any of them may be
contingent or unmatured.
4.9 All payments to be made by the Borrower hereunder shall
<PAGE>
be made without set-off or counterclaim and free of any
deduction or withholding (save any withholding required to be
made by law) on any ground whatsoever. If at any time the
Borrower is required by law to make any deduction or
withholding from any amount payable hereunder, the Borrower
shall pay such additional amount as may be necessary to ensure
that the Agent receives for the account of the Banks a net
amount equal to the full amount which it would have received
had no such deduction or withholding been made.
4.10 The Borrower hereby undertakes and agrees to indemnify and keep
each of the Banks indemnified from and against all actions
proceedings claims and demands which may be brought against the
Banks or any of them and all losses costs charges damages and
expenses which the Banks or any of them may incur or sustain or
for which the Banks or any of them may become liable by reason
whether directly or indirectly of the Banks having made any Loan
or the Agent or the Banks having issued any guarantee or letter
of credit pursuant to any Facility Letter or having issued the
City National Letter of Credit or made payment under any such
guarantee, letter of credit or the City National Letter of Credit
except for losses costs charges damages and expenses resulting
from the gross negligence or misfeasance of the Banks.
<PAGE>
5 INTEREST
5.1 Each Interest Period in respect of each Facility shall commence
on the borrowing of the Loan concerned whether by drawdown of the
Cash Advance (as defined in the applicable Facility Letter) or by
payment under the Guarantee or Letter of Credit (as such terms
shall be defined in the applicable Facility Letter) or by
drawdown under the Operating Facility or by payment under the
City National Letter of Credit or the deemed borrowing of the
Loan pursuant to clause 6.4 and/or 7.2 hereof and shall, subject
to the following provisions of this clause, be of one, three or
six month's duration as requested by the Borrower.
5.2 Subject to the following provisions of this clause, the first
Interest Period relative to any Loan in respect of each Facility
(other than the first Loan in respect of such Facility) shall end
on the same day as the current Interest Period relative to the
first Loan in respect of such Facility. Thereafter, all Interest
Periods relative to such Loans shall be co-terminous and such
Loans shall be treated as one Loan. Subject to the following
provisions of this clause, each subsequent Interest Period shall
commence on the same day as the then current Interest Period
ends.
<PAGE>
5.3 If any Interest Period relative to the Loan in respect of any
Film Facility would otherwise over-run the Maturity Date (as
defined in the applicable Facility Letter) such Interest Period
shall be shortened so that such Interest Period ends on such
date.
5.4 If any Interest Period relative to the Loan in respect of the
Operating Facility or the City National Facility would otherwise
overrun the date on which repayment of the principal amount in
respect thereof is due hereunder, such Interest Period shall be
shortened so that such Interest Period ends on the date such
principal falls due.
5.5 Interest for each Loan and for each Interest Period applicable
thereto will be calculated and charged at that rate determined by
the Agent as being 3% (three percent) per annum above the rate at
which US dollars are offered to the Agent in the London Interbank
Market at or about 11.00 a.m. two Business Days prior to the
start of that Interest Period in similar amounts to such Loan for
that Interest Period. The Borrower will be notified of the rate
of interest to be charged for each Interest Period as soon as
practicable after the start thereof.
5.6 Interest shall be calculated and accrue on the basis of the
<PAGE>
actual number of days elapsed and a 360 day year and will be
charged and paid at the end of each Interest Period to the Agent
for the account of the Banks. In the event that any sums fall
due for payment on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and the
amount of interest shall be adjusted accordingly. Interest will
be charged and paid gross without any deductions or withholding
whatsoever (save any withholding required to be made by law) in
U.S. dollars. If at any time the Borrower is required by law to
make any deduction or withholding from any amount payable
hereunder, the Borrower shall pay such additional amount as may
be necessary to ensure that the Agent receives for the account of
the Banks a net amount equal to the full amount which it would
have received had no such deduction or withholding been made.
5.7 If the Borrower fails to pay any amount when due in accordance
with this Agreement or any Facility Letter the Borrower shall pay
interest on that amount to the Agent for the account of the Banks
from the date of default up to the time of actual payment at a
rate per annum which is equal to the rate which would have been
charged under clause 5.5 hereof for the relevant amount for the
relevant period plus one per cent.
<PAGE>
5.8 If the provisions of this Agreement or any Facility Letter would
at any time require payment to the Agent or the Banks of an
amount of interest in excess of the maximum amount then permitted
by the law applicable to the Loan, such interest payments shall
be reduced to the extent necessary to ensure that the Agent
and/or the Banks shall not receive interest in excess of such
maximum amount.
6 FEES
6.1 In consideration of the Banks' agreement to make the Facilities
available, the Borrower hereby covenants with the Banks to pay
6.1.1 to the Agent for the account of the Banks a closing fee
equal to 1/2% (one half of one per cent) per quarter or
part thereof of the face value of any letter of credit
or guarantee issued or given pursuant to any Facility
Letter calculated from the date such letter of credit
or bank guarantee is issued or given until the date
payment is made under such letter of credit or
guarantee subject to a minimum fee in each case of 2%
of the face value of such letter of credit or bank
<PAGE>
guarantee; and
6.1.2 to the Agent for the account of the Banks a closing fee
of 2% (two per cent) flat of the amount of any Cash
Advance (as defined in the applicable Facility Letter)
and of the face value of the City National Letter of
Credit; and
6.1.3 to the Agent for the account of the Banks sums equal to
^ from time to time or in respect of ^ such other
amount in lieu of such fee as shall be specified in the
applicable ^; and
6.1.4 to the Agent for the account of the Banks sums equal to
1% per annum of the difference between the maximum
amount available to be drawn under the Operating
Facility and the amount of the Operating Facility
outstanding from time to time calculated on a daily
basis and payable quarterly in arrears;
6.1.5 to the Agent a management fee of US$150,000 per annum
or part thereof, such fee being payable in quarterly
instalments in advance until this Agreement is
terminated;
<PAGE>
6.2
6.2.1 The closing fee referred to in clause 6.1.1 hereof shall be
payable quarterly in advance, it being agreed that if 2% of the
face value of any letter of credit or guarantee referred to in
clause 6.1.1 has not been paid prior to encashment thereof, any
balance shall be paid on encashment. Payment of the first
quarterly payment shall be a condition precedent to the issue of
any such letter of credit or guarantee.
6.2.2 The closing fee referred to in clause 6.1.2 hereof shall be paid
in advance and shall be a condition precedent to drawdown
pursuant to any Facility Letter.
6.2.3 Part of the fees referred to in clauses 6.1.1, 6.1.2 and 6.1.4
hereof shall be paid by the Agent to Berliner pro rata to its
participation upon the Agent receiving the same from the
Borrower.
6.3 The fee referred to in clause 6.1.3 hereof shall be paid or
retained as provided in clauses 4.4 and 4.5 hereof and part of
such fee upon payment of or retention by the Agent shall be paid
by the Agent to Berliner pro rata to its participation.
6.4 In the event that any sums are due and unpaid under clauses 6.1.1
or 6.1.2 or 6.1.4 or 6.1.5 hereof the
<PAGE>
Banks pro rata to their respective Commitments shall be deemed
to have made a Loan to the Borrower hereunder of an amount
equal to any such sums and the amount of such Loan shall
thereafter bear interest calculated in accordance with clause
5 hereof at the rate specified in clause 5.5 hereof.
7 EXPENSES
7.1 The Borrower hereby agrees with the Banks that it will be liable
to the Agent (for the account of the Banks where appropriate) on
demand and on a full indemnity basis for all costs charges fees
and expenses (including without limitation reasonable travel and
accommodation expenses incurred by representatives of each Bank
whilst engaged in the annual review referred to in clause 17
hereof for the purpose of reviewing the Facilities and otherwise
whilst engaged in connection with the Facilities or a proportion
thereof allocated by the Agent in its good faith judgment in the
event either Bank conducts other business whilst so engaged and
legal fees and disbursements) incurred by the Banks in connection
with the negotiation, preparation and execution of this
Agreement, of each Facility Letter and of any other agreement or
document referred to herein or therein and in connection with the
operation confirmation repayment or enforcement of the Facilities
<PAGE>
(or any of them) or of any document between the Borrower and the
Banks and/or the Agent relating thereto (including but not in
limitation stamp duties or documentary or other taxes payable
thereon or in connection therewith) and in connection with the
protection and enforcement of the Banks' rights.
7.2 In the event that any sums are due and unpaid under clause 7.1
hereof for more than 30 days the Banks pro rata to their
respective Commitments shall be deemed to have made a Loan to the
Borrower hereunder of the equivalent in United States Dollars (as
determined by the Bank) of any such sums and the amount of such
Loan in United States Dollars shall thereafter bear interest
calculated in accordance with clause 5 hereof at the rate
specified in clause 5.5 hereof.
8 CHANGES IN APPLICABLE LAW
8.1 If any change in any applicable law or regulation or in the
interpretation thereof by any governmental or other authority
charged with the administration thereof shall:-
8.1.1 subject any of the Banks to any Taxes with respect to
any Loan or any Guarantee or Letter of Credit (as such
latter two terms
<PAGE>
may be defined in any Facility Letter) or the City
National Letter of Credit (other than usual taxes on
overall net income); or
8.1.2 change the basis of taxation to any of the Banks of any
payments of principal, interest, or otherwise in
respect of any Facility or any Loan or any Guarantee or
Letter of Credit (as such latter two terms may be
defined in any Facility Letter) or the City National
Letter of Credit; or
8.1.3 impose, modify or deem applicable any reserve
(including any special deposits) or capital adequacy
requirements against or in respect of any assets of or
loans by any of the Banks; or
8.1.4 impose on any of the Banks any other conditions with
respect to any Loan or any Guarantee or Letter of
Credit (as such latter two terms may be defined in any
Facility Letter) or the City National Letter of Credit
and the result of any of the foregoing is to increase the overall
cost to any of the Banks of making or maintaining the Loan by an
amount which any such Bank
<PAGE>
deems material, then and in any such case:-
8.2 the Agent shall notify the Borrower in writing thereof; and
8.3 the Borrower shall pay to the Agent for the account of such Bank
on the last Business Day of the then current Interest Period as
additional interest on that Loan such amounts as will compensate
such Bank for such additional cost calculated from the date of
notification to the Borrower; and
8.4 the Borrower shall be at liberty at any time thereafter to repay
all (but not part) of that Loan (including if appropriate by
making adequate payment on account of the Agent's remaining
contingent liability under the City National Letter of Credit and
any such Letter of Credit or Guarantee (as such latter two terms
may be defined in any Facility Letter)) to the Agent for the
account of the Banks after paying as additional interest only
such amounts as may be due under clause 8.3 thereof up to the
date of actual repayment together with all other amounts
outstanding hereunder or under any Facility Letter, whereupon the
Agent's and the Banks' obligations to the Borrower hereunder or
under any Facility Letter (but not for the avoidance of doubt and
without limitation the entitlement of the Agent or
<PAGE>
Berliner to any fees due in accordance with clause 6 hereof)
shall be cancelled.
9 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
9.1 The Borrower acknowledges that the Banks have entered into this
Agreement and the Agent will enter into Facility Letters in full
reliance upon the representations and warranties by the Borrower
in the following terms and the Borrower hereby represents and
warrants to each of the Banks (and shall be deemed to repeat such
representations and warranties in accordance with the facts and
circumstances then subsisting on the effective date of the Merger
and on every day thereafter on which a Facility Letter is
executed or on which any drawing is made hereunder or under any
Facility Letter (whether by cash advance or payment under the
City National Letter of Credit or under any guarantee or letter
of credit issued pursuant to any Facility Letter) or on which the
City National Letter of Credit any such letter of credit or
guarantee is given or issued):-
9.1.1 that the Borrower is a corporation duly incorporated
and validly existing and in good standing under the
laws of the state of Delaware with the power to own
assets and
<PAGE>
carry on its business as currently conducted and
that the Borrower has the requisite power and
authority to enter into and perform this Agreement
and any Facility Letter entered into on the date
this warranty is given or repeated and to assume,
execute, perform and discharge the obligations
herein and therein contained;
9.1.2 that the Relevant Agreements executed at the time this
warranty is given or repeated constitute the legal,
valid and binding obligations of the Borrower
enforceable in accordance with their respective terms
including but not in limitation in the case of the
Security Agreements those terms relating to the ranking
or priority of such agreements or documents and/or the
liens created thereby;
9.1.3 that neither the acceptance nor the performance by the
Borrower of any Relevant Agreement executed at the time
this warranty is given or repeated will or does:
9.1.3.1 contravene any law regulation or similar
enactment applicable to the
<PAGE>
Borrower, or any judgment injunction or
award of any court or authority applicable
to the Borrower, or any provision of any
existing contract applicable to the
Borrower or its Certificate of
incorporation or by-laws or any limitation
on the powers of either directors or other
officers of the Borrower; or
9.1.3.2 cause any Event of Default to occur; or
9.1.3.3 except for the Permitted Encumbrances give
rise to the creation or imposition of any
security interest lien charge or encumbrance
on any of the undertaking property or assets
of the Borrower, present or future (including
uncalled capital) other than the Security
Interests;
9.1.4 that no litigation, arbitration or administrative
proceedings before or of any court, arbitrator or
authority are presently
<PAGE>
pending or, to the best of the Borrower's knowledge
and belief, threatened against it or any other
Relevant Parties at the time this warranty is given
or repeated or any of their assets which might
materially and adversely affect its or their ability
to perform its or their obligations hereunder or
under any of the Relevant Agreements executed at the
time this warranty is given or repeated provided the
failure to perform such obligations materially
adversely affects or will materially adversely
affect the Banks hereunder as determined by the
Banks in good faith;
9.1.5 the signature acceptance execution and performance by
the Borrower and the Relevant Parties have been duly
authorised by all appropriate action on its or their
part;
9.1.6 the information set out in the Relevant Agreements
executed at the time this warranty is given or repeated
is true and accurate in all material respects which
materially affect or will materially affect the Banks
hereunder as determined by the Banks in good faith and
the Borrower has fully disclosed all facts
<PAGE>
and information relating to the Borrower and the
production and financing of each of the Films which
the Borrower knows or ought having exercised due
diligence to know are material to the Banks in the
context of the transaction contemplated by this
Agreement and the Facility Letters executed at the
time this warranty is given or repeated and that if
any such facts or information are received or
discovered or which would on enquiry (whether of
professional advisers or others) be received or
discovered after the date hereof the Borrower will
forthwith notify the Agent and the Borrower
specifically warrants that the Borrower has not
received any information nor knows of any
information which would or be likely to affect the
Banks' decision to extend any Facility extended
hereunder at the time this warranty is given or
repeated and that if any such facts or information
are received or discovered or which would on enquiry
(whether of professional advisers or others) be
received or discovered after the date hereof the
Borrower will forthwith notify the Agent;
9.1.7 that the ^ and ^ specified in respect of ^
<PAGE>
for ^ in the ^ in which the Borrower has ^ in such ^
and in respect of ^ set out in the Borrower's ^ and
reproduced in each ^ executed at the time this warranty
is given or repeated and upon which the Banks have
relied in deciding to make ^ are or will be in the
Borrower's good faith business judgement ^ and are or
will in the Borrower's good faith business judgement
be ^ to the ^ which may be ^ likely to be ^ from the ^
which may be ^ likely to be ^ from the ^ of each such ^
and that to the best of the Borrower's knowledge and
belief all the ^ required under the ^ executed at the
time of this warranty is given or repeated in respect
of each such ^ will be promptly ^ when ^;
9.1.8 that to the best of the Borrower's knowledge and belief
none of the Relevant Parties is in breach ("breach" for
this purpose being limited to a breach which materially
adversely affects, or will materially adversely affect,
the Banks hereunder as determined by the Banks in good
faith) of any of the Relevant Agreements executed at
the time this warranty is given or repeated or in
material default ("default" for this purpose
<PAGE>
being limited to a default which materially
adversely affects, or will materially affect the
Banks hereunder as determined by the Banks in good
faith) thereunder or under any other instrument or
agreement to which any of such parties is a party or
by which it is bound relating to any of the Films or
their financing, production or exploitation, all of
which Relevant Agreements the Borrower warrants and
represents to the best of the Borrower's knowledge
and belief are unencumbered insofar as the material
interests of the Banks are not or will not be
materially adversely affected thereby as determined
by the Banks in good faith (except for the Permitted
Encumbrances or as otherwise as provided for herein
or in any Facility Letter executed at the time this
warranty is given or repeated) in full force and
effect and with the terms of which all such parties
have complied and will continue to comply and to the
best of the Borrower's knowledge and belief that,
except as to the Permitted Encumbrances, no party
(save the Agent) has or is in the process of
perfecting any charge or lien or any other security
over any of the undertaking and assets of such
<PAGE>
parties relating to any such Film without the prior
written consent of the Agent;
9.1.9 that the Borrower is or will become and remain (without
further action or fulfilment of any condition) entitled
to the exclusive right for the full term of each
Acquisition Agreement executed at the time this
warranty is given or repeated to arrange for the
exhibition distribution and other exploitation of the
Film or Films to which each such Acquisition Agreement
relates (including all necessary rights in the music on
the soundtrack of the Film) and the Ancillary Rights
(as such term is defined in the applicable Facility
Letter) throughout the applicable territory without
further licence or fee (other than as agreed with
applicable third parties and approved by the Agent);
9.1.10 that subject to any contractually required collection
arrangement approved in writing by the Agent all the
Gross Receipts in respect of each Film will (prior to
any enforcement of any of the Security Interests by the
Agent) be paid into the applicable
<PAGE>
Collections Account in accordance with the
provisions of the applicable Facility Letter;
9.1.11 that the Borrower will maintain or procure the
maintenance of any insurance in respect of each Film
required by the Bank as a condition precedent to
drawdown or issue of any letter of credit or guarantee
pursuant to clause 3.3.8 hereof or pursuant to any
Facility Letter until delivery of such Film in
accordance with the provisions of the applicable
Acquisition Agreement and thereafter maintain or
procure the maintenance of Errors and Omissions cover
for a total period of three years from commencement of
production (it being agreed that in the event the Loan
with respect to the applicable Film Facility has not
then been repaid in full the Borrower will, at the
written request of the Agent extent such cover or
obtain new cover as directed by the Agent) in amounts
to be approved by the Agent but not to exceed US$1
million per claim and US$3 million in the aggregate;
9.1.12 that each Film will conform to the screenplay specified
in the Facility Request relating
<PAGE>
thereto will star, will be produced by and directed
by those persons specified in the Facility Request
relating thereto subject to any replacements thereof
substituted with the approval of the completion
guarantor for the applicable Film and that each Film
will have a running time of not less than 90 and not
more than 120 minutes (all unless otherwise approved
by the Agent in writing) and that production of each
Film will be or has been undertaken in accordance
with the applicable Acquisition Agreement and in a
timely manner in strictest conformity with the best
industry practice to the intent that each such
completed Film will be or is of first-class
technical quality suitable for first run theatrical
release (if a theatrical film) throughout the
territory in respect of which the Borrower is
granted distribution rights pursuant to the
applicable Acquisition Agreement and that the
Borrower will use reasonable efforts to ensure that
full and adequate delivery of each Film may be made
in a timely manner on or before the delivery date
specified in the applicable Acquisition Agreement
and that the Borrower will ensure that full and
adequate delivery of each Film
<PAGE>
is made in a timely manner on or before the delivery
dates specified in the applicable Licence Agreements
(as the same may be varied in writing by the
Borrower and the applicable Sub-Distributor) and
otherwise in all respects and with all delivery
items required thereby and that to the best of the
Borrower's knowledge and belief (but subject always
to the Permitted Encumbrances) there is not now and
the Borrower does not know of anything which in the
future might give rise to any claim, lien, charge,
imperfection in title or copyright, inadequacy in
production or direction, censorship or other reason
whatsoever now preventing or hampering full delivery
of each Film exactly in accordance with the
applicable Acquisition Agreement and the applicable
Licence Agreements or receipt and application of the
applicable Gross Receipts as provided for in the
applicable Facility Letter or the Borrower from
lawfully and freely exercising all rights under such
agreements and that the Borrower knows of no reason
why delivery of each such Film as aforesaid should
not be accepted under all such agreements provided
always that no breach of any of the foregoing
provisions
<PAGE>
shall constitute a breach of the Borrower's
representations and warranties hereunder unless such
breach materially adversely affects or will
materially adversely affect the Banks hereunder as
determined by the Banks in good faith;
9.1.13 in terms identical (mutatis mutandis) to the warranties
and representations made by the Borrower in the
Acquisition Agreements executed at the time this
warranty is given or repeated as if the same were
hereinafter set out in full;
9.1.14 that it has provided Bannon & Company with all
documents and information required by Bannon & Company
to prepare its valuation of the Borrower's library of
films and that all such information is true and
accurate in all material respects; and
9.1.15 that prior to any drawdown hereunder all conditions
precedent to, and all consents necessary to permit, the
Merger pursuant to the Merger Agreement shall have been
satisfied and no material breach of any term or
provision of any Merger Document shall
<PAGE>
have occurred and no action shall have been taken by
any competent authority which restrains, prevents or
imposes material adverse conditions upon, or seeks
to restrain, prevent or impose material adverse
conditions upon, the Merger;
9.1.16 that prior to any drawdown hereunder Old OFG shall have
merged with and into the Borrower pursuant to the
Merger Agreement in compliance with the Delaware
General Corporation Law;
9.1.17 that prior to any drawdown hereunder the Certificate of
Merger executed by the Borrower shall have been filed
with the Secretary of State of the State of Delaware
and filed or recorded in each other place wherein it is
required to be so filed or recorded, in each case
evidencing the consummation of the Merger and such
Certificate of Merger complies as to form and substance
with the requirements of the Delaware General
Corporation Law;
9.1.18 that prior to any drawdown hereunder the approval of
the Merger and the other
<PAGE>
transactions and matters related thereto by the
Board of Directors and shareholders of Old OFG and
the Borrower respectively shall not have been
rescinded, modified or withdrawn;
9.1.19 that the Borrower is in compliance with all applicable
state and federal securities laws and regulations;
9.1.20 that:
9.1.20.1 when the Merger is consummated Robert Little
and Ellen Little will own, free and clear
from any liens, 2,928,218 shares of the
5,777,778 then outstanding shares of the
voting stock of the Borrower and William
Lischak will own 249,560 of such then
outstanding voting stock;
9.1.20.2 further approximately US$42,000,000 of equity
(less any applicable fees and expenses) is
capable of being paid to the Borrower upon
exercise of options, warrants and units of
the Borrower that will be
<PAGE>
outstanding upon consummation of the
Merger (disregarding for such purpose any
means of cashless exercise);
9.1.20.3 upon consummation of the Merger pursuant to
the Merger Documents, the board of directors
of the Borrower will comprise Robert Little,
Ellen Little, William Lischak and Allesandro
Fracassi ("the OFG Directors") and three
nominees of New OFG ("the EMAC Directors");
9.1.20.4 Section 1(e) of the Stockholders' Voting
Agreement to be entered into upon
consummation of the Merger provides that:
"During the term of this Agreement, the
Overseas Stockholders shall not vote to
remove any director designated by the
Founders and who is still entitled to be a
director hereunder, and the Founders shall
not vote to remove any director
<PAGE>
designated by the Overseas Stockholders
and who is still entitled to be a director
hereunder; provided, however, that as soon
as practicable after the receipt of a
written request from holders of a majority
of the Shares held by all Overseas
Stockholders to remove an Overseas
Stockholders Designee, or from holders of
a majority of the Shares held by all
Founders to remove a Founders Designee,
the other Stockholders agree to use their
best efforts to take, or cause to be
taken, all appropriate action to effect
the removal and replacement of such
Overseas Stockholders Designee or Founders
Designee, as the case may be."
9.1.20.5 Section 3.01 of the Bylaws of New OFG to be
effective upon consummation of the Merger
provide that:
"Subject to the provisions of the
<PAGE>
laws of the State of Delaware and the
Certificate of Incorporation, the business
and affairs of the corporation shall be
managed and all corporate powers shall be
exercised by or under the direction of the
Board. The board may delegate the
management of the day-to-day operations of
the business of the corporation to a
management company or other person
provided that the business and affairs of
the corporation shall be managed and all
corporate powers shall be exercised under
the ultimate direction of the Board."
9.1.20.6 The Operating Guidelines of New OFG after the
Merger will further provide with respect to
the Board:
"The Board will have regular meetings on a
quarterly basis. The Executive Committee of
the Board, chaired by the Vice Chairman of
the Board, will have the Co-Chief Executive
Officers on as permanent
<PAGE>
members, and the members of the Executive
Committee will use their reasonable best
efforts to meet bi-weekly to review
business operations. During intervals
between meetings of the Board of Directors
of the Corporation, the Executive
Committee shall exercise all powers of the
Board of Directors (except those
specifically reserved by Delaware law to
the full Board of Directors) in the
management and direction of the business
and conduct of the affairs of the
Corporation in all cases in which specific
directions have not been given by the
Board of Directors."
9.1.20.7 Section 1.1 of the Employment Agreement of
each of Robert B Little and Ellen Dinerman
Little (the "Employment Agreement") to be
entered into upon consummation of the Merger
provides in part:
"The Services and authority of
<PAGE>
Employee shall include management and
supervision of (A) the general business,
affairs, management and operations of the
Company, (B) the distribution of motion
pictures, and (C) other principal business
activities of the Company and its
Affiliates."
Section 1.5.2 of the Employment Agreement
provides:
"During the Term, all officers and employees
of the Company shall report to, and only to,
Employee and the Co-Executive (directly or
through such channels as Employee and the Co-
Executive shall designate). During the Term,
there shall be no officer or employee of the
Company whose title, position or authority
with the Company is equal to Employee (other
than the Co-Executive) or superior to that of
Employee."
Section 1.5.4 of the Employment
<PAGE>
Agreement provides:
"In addition to the other duties and
authority of Employee set forth herein,
Employee and the Co-Executive (and no other
person without Employee's consent) shall
have, subject to Section "V" of the Company's
Operating Guidelines attached hereto as
Exhibit "A", the sole and ultimate authority
and responsibility to make all creative
decisions for the Company with respect to all
motion pictures financed, produced or
distributed by the Company or its Affiliates.
This authority shall include, without
limitation, the creative decisions for
acquiring and developing properties,
attaching all creative elements,
greenlighting films for acquisition, and
approving the motion pictures or other
properties to be financed or acquired by the
Company, as well as by its Affiliates. In
addition, Employee
<PAGE>
and the Co-Executive shall have sole
authority and responsibility to make all
employment decisions regarding Company
personnel, including personnel of the
Company's Affiliates."
9.1.20.8 The Operating Guidelines of New OFG after the
Merger will provide with respect to the
authority/responsibility of the Co-
Chairpersons and Co-Chief Executive Officers:
"Such officers shall have general
supervision, direction and control of the
business and affairs of the Corporation and
the general powers and duties of management
usually vested in such officers of a
corporation. They shall preside at all
meetings of the Board and at all meetings of
the shareholders. They shall serve on the
three member Executive Committee of the
Board. Such officers (and no other persons)
shall have the sole and
<PAGE>
ultimate authority and responsibility to
make all creative decisions for the
Corporation. In addition, such officers
shall have the sole authority and
responsibility to make all employment
decisions regarding Corporation personnel
with decisions regarding key senior
management to be made in consultation with
the Executive Committee. All other
officers and employees of the Corporation
shall report to, and only to, such
officers (directly or through such
channels as they may designate)."
9.1.20.9 The following actions must be approved by
more than a simple majority of a quorum of
the New OFG Board pursuant to the New OFG
Bylaws and/or Operating Guidelines:
(i) Any amendments to the Restated
Certificate or the Bylaws of New OFG which
would alter (A) the voting rights of the
holders of
<PAGE>
stock in New OFG, (B) the number or
classes of directors on the New OFG Board,
or (C) the notice and quorum requirements
for meetings of the New OFG Board or its
committees or of the shareholders of New
OFG;
(ii) Any merger or sale of all or
substantially all of the assets of New OFG
(other than in connection with the
liquidation, dissolution or winding up of New
OFG);
(iii) The designation or issuance of any
preferred stock of New OFG;
(iv) Any amendments to the New OFG operating
guidelines; and
(v) amendment or repeal of the New OFG
Bylaws or any New OFG Bylaw.
9.1.20.10 the provisions cited in clauses 9.1.20.4,
9.1.20.5, 9.1.20.6, 9.1.20.7, 9.1.20.8 and
9.1.20.9 hereof are not contradicted, amended
or modified in a material
<PAGE>
manner by any other provisions in any of
the Merger Documents or any other
agreement or document by which the
Borrower is bound.
9.2 The Borrower hereby undertakes for the benefit of the Banks (and
shall be deemed to repeat such undertakings on every day
hereafter on which a Facility Letter is executed or on which any
drawing is made hereunder or under any Facility Letter (whether
by cash advance or payment under the City National Letter of
Credit or under any guarantee or letter of credit issued pursuant
to any Facility Letter) or on which the City National Letter of
Credit or any such letter of credit or guarantee is issued or
given):-
9.2.1 that while any sum is outstanding hereunder, the
Borrower will not at any time without the prior written
consent of the Agent sell, transfer or in any way
dispose of all or a substantial part of its undertaking
or assets or create or permit to subsist any mortgage,
charge (whether fixed or floating) or other security or
possessory interest (other than the Permitted
Encumbrances) upon any of its undertaking or assets nor
allow nor permit any of its subsidiaries or associates
to do
<PAGE>
any of the same nor alter its charter document;
9.2.2 that the Borrower shall not at any time prior to the
repayment and payment of all amounts due hereunder or
under any Facility Letter to Coutts or the Agent for
the account of the Banks without the prior written
consent of the Agent assign, novate, discount, pledge,
charge, terminate or otherwise dispose of or deal with,
or authorise third party rights to arise over, or
authorise or agree to any material alteration of (which
alteration materially adversely affects or will
materially adversely affect the Banks hereunder as
determined by the Banks in good faith), any or all of
the Relevant Agreements executed at the time this
undertaking is given or repeated and shall procure that
no person firm or corporation over whom the Borrower
exercises any control, and use best endeavours to
procure that no other person firm or corporation, shall
at any time revoke alter or countermand or attempt or
purport to revoke alter or countermand any or all of
the directions as to payment into the Collections
Account contained in the Licence Agreements
<PAGE>
or in any notice of acknowledgement of assignment
executed in fulfilment of the terms hereof or of any
Facility Letter provided always that if the Borrower
considers it will be put to disproportionate cost in
procuring the same or considers that legal
proceedings will be necessary to procure the same,
it will first consult the Agent and thereafter
proceed as the Agent shall in good faith direct;
9.2.3 that the Borrower shall not accept and has not accepted
partial, late or incomplete Delivery (as that term is
defined in any applicable Acquisition Agreement
executed at the time this undertaking is given or
repeated) of any Film without the prior written consent
of the Agent unless such partial, late or incomplete
delivery does not prevent the Borrower from fully
complying with its obligations under the Licence
Agreements for that Film, in which event the Borrower
shall notify the Agent of such partial, late or
incomplete Delivery but shall not be obliged to obtain
the Agent's consent before accepting the same;
<PAGE>
9.2.4 that the Borrower will, and will use all reasonable
endeavours to procure that the Relevant Parties will
promptly and fully comply with their respective
obligations under the Relevant Agreements and will
observe keep and perform all the terms and conditions
thereof;
9.2.5 the Borrower will ensure that the Agent is fully
consulted in connection with the exploitation of
each Film and the Ancillary Rights (as defined in
the applicable Facility Letter) thereto and that ^
will be ^ after the date hereof without first
obtaining the consent of the Agent, unless either
the Agent does not respond to a written request for
such consent within 3 Business Days or the amount of
the ^ or ^ thereunder ^ for the ^ and ^ in question
the ^ set out in the second column of the applicable
Schedule to the applicable ^ in which event and
without further formality but subject to clause 11.3
hereof the Agent shall be deemed to have given its
consent and that forthwith upon the execution thereof
the Agent shall be sent a copy of all such agreements;
<PAGE>
9.2.6 that it shall be a term of all of the Licence
Agreements that by irrevocable direction to that effect
all monies due and payable to the Borrower thereunder
(whether minimum guarantees, advances, overages or
otherwise) shall be paid directly into the Collections
Account specified in the applicable Facility Letter
without any deductions whatsoever (save those as may be
required by local law);
9.2.7 that simultaneously with the execution and delivery of
each completed Licence Agreement entered into after the
date of this Agreement the Borrower shall deliver a
notice of assignment of such Licence Agreement to the
licensee party thereto in the form of the notice set
out in Exhibit II to the Schedule 3 hereto and shall
use good faith efforts to procure that the form of
acknowledgement and receipt attached thereto is duly
executed by the applicable Sub-Distributor and
delivered to the Agent to the extent only that the
provisions of such notice and acknowledgement are not
contained in the Licence Agreement itself. In the
event that any Sub-Distributor refuses to sign such
acknowledgement and receipt or requests
<PAGE>
changes thereto, the Borrower shall notify the Agent
and shall only conclude the applicable Licence
Agreement with the consent of the Agent.
Notwithstanding the foregoing, in the event that the
Agent does not respond within 3 Business Days of
such notice from the Borrower, the Borrower may
conclude such Licence Agreement;
9.2.8 that the copyright in the screenplay of each Film has
been registered with the U.S. Copyright Office (or such
registration has been applied for) and upon completion
of each Film the copyright therein and the grant of
distribution rights to the Borrower under the
applicable Acquisition Agreement will be recorded by
appropriate documentation with the U.S. Copyright
Office;
9.2.9 that the Borrower will maintain the keyman insurance
referred to in clause 3.1.7 hereof;
9.2.10 that the Borrower will notify the Agent forthwith upon
becoming actually aware of the occurrence or threatened
occurrence of an Event of Default;
<PAGE>
9.2.11 that the Borrower will not deliver any Film to any Sub-
Distributor pursuant to any Licence Agreement which
provides for any payment in whole or in part of the
minimum guarantee or advance to be made prior to
delivery until all such payments have been made in
full.
9.2.12 that the cash balance of New OFG as at the effective
date of the Merger will be applied as follows:
9.2.12.1 US$1,500,000 will be paid to Robert Little
and Ellen Little;
9.2.12.2 US$3,500,000 will be used to repay amounts
outstanding under the Distribution Facility
Letter on or before the maturity thereof; and
9.2.12.3 the balance shall be used to repay amounts
outstanding under the Existing Syndication
Agreement or for investment in film or
television projects or for working capital
purposes of the Borrower.
<PAGE>
9.2.13 that without the Banks' prior written consent, the
provisions cited in clauses 9.1.20.4, 9.1.20.5,
9.1.20.6, 9.1.20.7 and 9.1.20.8 hereof will not be
amended, modified, or repealed by the Borrower in a
manner which would or might have a material and adverse
effect upon the Banks hereunder.
9.3 The Borrower agrees to indemnify and keep indemnified the Banks
from and against all costs expenses (including legal fees and
disbursements on an indemnity basis) claims losses damages
liabilities or proceedings suffered by the Banks whatsoever
arising directly or indirectly from any Event of Default or
actual or alleged breach of or non-compliance with the
representations warranties undertakings and obligations herein
contained and the Banks reserve the right (without prejudice to
their other rights and remedies) on the happening of any Event of
Default or any such breach or non-compliance to withhold any
amount of the Loan not then drawn down until the breach or non-
compliance complained of is remedied and if the breach or non-
compliance is not remedied within five Business Days or is an
Event of Default, to demand immediate repayment by the Borrower
to the Agent for the account of the Banks or Coutts (as
applicable) of that part of the Loan which has by then been
advanced hereunder
<PAGE>
together with interest thereon at the rate provided for herein
and the Banks' unpaid fees and expenses or if the Loan (or any
part thereof) has not by then been advanced to require the
Borrower to make such provision as the Banks in their
discretion deem adequate against the Banks' contingent
liability under any Guarantee or Letter of Credit issued
pursuant to any Facility Letter or under the City National
Letter of Credit.
10 FINANCIAL INFORMATION
10.1 The Borrower hereby undertakes to send copies of the following to
the Agent in a form satisfactory to the Agent:
10.1.1 monthly facility schedules setting out all amounts
outstanding or committed (in the case of letters of
credit or guarantee facilities) under each Facility,
all amounts due under the Licence Agreements for any of
the Films (or in the case of unsigned agreements, all
amounts expected to be due) when such amounts were or
will be due, from which Sub-Distributor such amounts
were or will be due and which such amounts are secured
by letters of credit or bank guarantees;
<PAGE>
10.1.2 monthly itemised cash flow forecasts setting out the
anticipated cash flow of the Borrower for the
succeeding 12 months;
10.1.3 monthly schedules showing in respect of each Sub-
Distributor all amounts due or to become due in
relation to each Film, when such amounts were or will
be due and which such amounts are secured by letters of
credit or bank guarantees;
10.1.4 monthly unaudited management accounts setting out the
profit and loss account, balance sheet and cash flow
(itemised in the same way as set out in clause 10.1.2
above) of the Borrower for the previous month;
10.1.5 the budgeted profit and loss account and balance sheet
of the Borrower for the succeeding financial year;
10.1.6 the annual accounts of the Borrower audited in
accordance with generally accepted accounting
principles in the United States of America by a firm of
certified public accountants approved by the Agent
(Price Waterhouse are hereby approved);
<PAGE>
10.1.7 monthly bank statements relating to the Borrower's
overdraft with City National; and
10.1.8 copies of all Form 10-K, 10-Q, 8-K and all other
periodic reports filed or required to be filed by the
Borrower pursuant to the security laws or regulations
of the United States and any applicable state security
laws or regulations.
10.2 The material specified in clauses 10.1.1 and 10.1.2, 10.1.3 and
10.1.7 hereof shall be sent no later than 10 Business Days after
the end of the month to which it relates, the material specified
in clause 10.1.4 shall be sent no later than 20 Business Days
after the end of the month to which it relates, the material
specified in clause 10.1.5 hereof shall be sent no later than
31st January of each year until this Agreement is terminated, the
material specified in clause 10.1.6 shall be sent no later than
six months from the end of the year to which it relates and each
item specified in clause 10.1.8 shall be sent no later than 7
Business Days after the same is filed with the United States
Securities and Exchange Commission or applicable state regulatory
authority.
<PAGE>
10.3 In addition to the material specified in clause 10.1 hereof and
any other information or documentation which the Borrower may be
obliged to supply pursuant to any Facility Letter, the Borrower
shall promptly meet any request for additional financial,
management or other information or documentation as the Agent may
from time to time request in the management of the Facilities.
The Borrower also agrees that its officers will make themselves
available to speak to the Agent's duly authorised representatives
upon reasonable notice and if so required no less frequently than
weekly.
11 FINANCIAL OBLIGATIONS OF THE BORROWER
11.1 The Borrower undertakes that:-
11.1.1 The Borrower will maintain a consolidated net worth (as
the expression is understood in accordance with
generally accepted accounting principles in the United
States of America) of not less than US$12,000,000 in
1996 (or, if the provisions of clause 2.11 hereof
apply, not less than US$11,000,000) and in succeeding
years the consolidated net worth for the previous year
plus 50% of the annual net income (as such term or any
term analogous thereto shall be defined in the
<PAGE>
Borrower's audited accounts) for such previous year.
11.1.2 The Borrower, the Group Companies and any affiliate or
subsidiary of the Borrower or any of the Group
Companies shall not pay any dividend or make any
distribution of its profits unless and until the Agent
is satisfied that the Borrower is not in breach of
clause 11.1.1 hereof and that such payment or
distribution will not lead to the Borrower being in
breach of such clause.
11.1.3 The Borrower shall not, without the prior written
consent of the Banks, create or incur, nor permit any
of the Group Companies to create or incur, any
indebtedness for borrowed money or for the deferred
purchase price of property under capital leases, or
become liable as a surety, guarantor, accommodation
endorser, or otherwise for or upon the obligation for
any other person, firm or corporation; provided,
however, that this sub-clause shall not be deemed to
prohibit:
11.1.3.1 unsecured liabilities incurred in
<PAGE>
the ordinary course of business as
presently conducted in connection with the
acquisition or lease of goods, supplies or
merchandise and the distribution of Films
(but in no event for borrowed money) and
current accounts payable which are payable
within one year and are not owing and
unpaid in excess of forty-five days after
the due date;
11.1.3.2 the execution of bonds or undertakings in the
ordinary course of business as presently
conducted;
11.1.3.3 the endorsement of negotiable instruments
received in the ordinary course of business
as presently conducted;
11.1.3.4 the borrowing of up to US$1,000,000 under the
Borrower's existing overdraft with City
National ;
11.1.3.5 indebtedness in connection with taxes nor yet
required to be paid;
<PAGE>
11.1.3.6 unsecured liabilities (or liabilities secured
by Permitted Encumbrances) for advances,
royalties, participations, deferments or
residuals in connection with films;
11.1.3.7 capital leases in an aggregate amount not to
exceed ^;
11.1.3.8 indebtedness for borrowed money incurred in
connection with the Permitted Encumbrances
described in the definition of the term
Permitted Encumbrances, subject to the
limitations contained in such definition;
11.1.3.9 indebtedness in respect of judgments which do
not constitute an Event of Default under
clause 22.9;
11.1.3.10 indebtedness for borrowed money owing to the
Agent or the Banks under this Agreement;
<PAGE>
11.1.3.11 indebtedness of US$2,000,000 plus interest
thereon to Robert Little and Ellen Little pursuant to a
secured promissory note to be dated the effective date
of the Merger.
11.1.4 Solely with respect to either (a) Licence Agreements
where a minimum guarantee or advance of greater than ^
is payable and the Sub-Distributor has not been
approved by the Agent or (b) Licence Agreements where
the minimum guarantee or advance is not payable in full
prior to delivery of the applicable Film to the
applicable Sub-Distributor no less than ^ of the
minimum guarantee or advance which is contractually due
to the Borrower from each Sub-Distributor pursuant to
each Licence Agreement and in any event the ^ of the ^
of such ^ or ^ shall, unless the Agent shall notify the
Borrower to the contrary, be secured by an irrevocable
letter of credit or bank guarantee issued by such
person as the Agent shall approve substantially in the
form of the letter of credit or bank guarantee attached
as Schedule 4 or such other form as the Agent shall
approve.
<PAGE>
11.1.5 The Borrower shall keep full, complete, accurate and
faithful books of account and records relating to the
delivery distribution and exploitation of each Film and
the Agent shall be entitled at the Borrower's expense
on reasonable prior notice on any Business Day and
either directly or through an appointed representative
to inspect all such books of account and records as
aforesaid and to take copies of the same or extracts
thereof and/or once annually to cause such books to be
audited. The Borrower will promptly deliver to the
Bank copies of all statements to be rendered under any
Acquisition Agreement and any Licence Agreement and in
any event within five Business Days of receipt or
despatch thereof.
11.1.6 The Borrower shall provide or has provided in all
Licence Agreements for the right of the Borrower to
audit and inspect the book of accounts of the Sub-
Distributors. Such provision shall be in a form
acceptable to the Agent. The Borrower will also upon
demand by the Agent exercise such of its right to audit
and inspect the books of account of the licensees under
any of the
<PAGE>
Licence Agreements as the Agent may specify in such
demand and provide the Banks with such full record
of such audit and inspection as the Agent shall
require.
11.1.7 The Borrower will maintain Net Receivables of ^ of the
amount of the contingent liability from time to time of
the Banks under the City National Letter of Credit.
11.2 The Borrower shall set an itemised annual budget acceptable to
the Agent for operational overheads of the Borrower and notify
the Agent accordingly. The Borrower will not exceed the total of
^ of such budget (although it may apply savings on any one item
against excess on another item) without the prior written consent
of the Agent, which shall not be unreasonably withheld.
11.3 The Agent shall have the absolute right to approve the identity
of all Sub-Distributors and to determine the maximum aggregate
unpaid amount of minimum guarantees owed by each Sub-Distributor
to the Borrower at any time. It is intended that the Borrower
shall submit a list of Sub-Distributors to the Agent for its
approval and that during the term hereof the Borrower may submit
further Sub-Distributors for the Agent's approval.
<PAGE>
Once the Agent has approved a Sub-Distributor in writing to
the Borrower, such Sub-Distributor will continue to be
approved until the Agent notifies the Borrower to the contrary
in writing.
11.4 The Borrower shall procure that at all times the aggregate of:
11.4.1 cash on deposit in respect of Films in respect of which
the Film Facility has not been fully repaid, which the
Borrower owns, which is not held for a third party, and
which has not then been applied in reduction of any
amounts outstanding hereunder or under any Facility
Letter; and
11.4.2 receivables acceptable to the Banks in respect of Films
in respect of which the Film Facility has not been
fully repaid
shall equal not less than 30% (thirty per cent) of the amount
outstanding or committed (by way of letters of credit or
guarantees issued but unencashed) in connection with the Film
Facilities.
For the purpose of clause 11.4.2 only, a Film Facility shall be
deemed fully repaid when all amounts
<PAGE>
outstanding to the Agent or the Banks hereunder or under any
Facility Letter (excluding only the ^ to ^ have been fully
repaid.
11.5 For the avoidance of doubt, the Borrower hereby acknowledges that
the Banks may refuse to grant a Film Facility if this would
result in the Borrower being in breach of this clause 11.4.
12 EXECUTION OF FACILITY LETTERS
12.1 Subject to the Facility Limit set out in clauses 2.1, 2.3 and
12.2 hereof the Borrower may at any time during the term hereof
request the Agent to make available a Film Facility for a Film.
Each such Facility Request shall be in the form set out in
Schedule 2 or in such other form as the Agent may from time to
time require and shall be sent to the Agent. When making such
request (and thereafter), the Borrower shall provide the Agent
with such information documentation and details as the Agent
shall at its reasonable discretion require.
12.2 In no event shall any Facility Request seek a Film Facility the
amount of which when aggregated with the amount of all other Film
Facilities then outstanding might exceed US$21,000,000 (twenty
one million United
<PAGE>
States Dollars) or such greater amount as such limit shall
have been permitted pursuant to clause 2.12 hereof or such
lesser amount as such limit shall be as determined by clause
2.11 hereof. For these purposes, liability under all Film
Facilities then outstanding shall consist of the value of
Loans and accrued interest thereon and/or which the Banks
might be required to advance thereunder and the face value of
any Obligations which the Banks might be required to accept.
12.3 The Agent shall notify Berliner of each Facility Request. The
Agent shall further supply to Berliner such details and
information relating thereto as it possesses in order to permit
Berliner to understand the purpose and nature of the proposed
Facility. Berliner shall be entitled to discuss with the Agent
any aspect of the proposed borrowing, and to make such
recommendations to the Agent as it feels appropriate.
12.4 The Agent (on behalf of the Banks hereunder) may in its sole and
absolute discretion and without giving any reasons decline to
grant any Film Facility requested by a Facility Request, it being
the intention that each such proposed financing be considered on
its own merits. The Agent will notify the Borrower of its
decision within 10 Business Days of receipt by it of a
<PAGE>
Facility Request. Once the Facility Request has been approved
and a Facility Letter entered into, the Agent and/or the Banks
shall make available the requested loan in accordance with the
provisions of the applicable Facility Letter.
12.5 It is anticipated that each Film Facility for a Film will be made
available in accordance with the terms and conditions of a
Facility Letter which will be substantially in the form of the
draft set out in Schedule 3. The Agent specifically reserves the
right, however to stipulate an alternative form of agreement at
its discretion, and shall stipulate whatever requirements in
relation to security for the Banks it feels are appropriate in
the circumstances of each Film Facility.
12.6 A Film Facility for a Film shall be made available hereunder by
signature by the Borrower, and (upon its being authorised to do
so as provided in clause 19.1 hereof) by the Agent on behalf of
the Banks, of a Facility Letter. If, in relation to a Facility
Request, the Borrower shall decline to sign the Facility Letter
as stipulated by the Agent, it shall be under no obligation to do
so. It shall, however, be liable to pay the out of pocket
expenses of the Agent in connection with such request, as set out
below.
<PAGE>
13 THE PRIOR OBLIGATIONS AND EXISTING BORROWINGS
13.1 With effect from the effective date of the Merger, New OFG hereby
expressly and unconditionally assumes the Prior Obligations.
Such Prior Obligations shall be deemed obligations hereunder as
well as obligations under the Agreements pursuant to which they
were assumed by Old OFG.
13.2 It is hereby acknowledged that all amounts outstanding, due,
paid, repaid or borrowed under the Existing Syndication Agreement
or any Facility Letter or other document ancillary thereto shall
be deemed outstanding, due, paid, repaid or borrowed hereunder.
13.3 Amounts outstanding, due, paid, repaid or borrowed under the
Distribution Facility shall be deemed outstanding, due, paid or
repaid under the Operating Facility.
13.4 It is hereby acknowledged that the provisions of clauses 13.1,
13.2 and 13.3 hereof shall not operate so as to terminate the
Existing Syndication Agreement or the Distribution Facility
Letter or any other agreement pursuant to which the Prior
Obligations were originally assumed, all of which shall remain in
full force and
<PAGE>
effect provided always that the Borrower shall not be liable
twice for the same obligation. It is expressly acknowledged
that this Agreement is an amendment to and restatement of the
Existing Syndication Agreement.
14 NATURE OF THE BANKS' RIGHTS AND OBLIGATIONS
14.1 The obligations of the Banks hereunder are several, and failure
by a Bank to carry out those obligations shall not relieve any
other party of its obligations hereunder, or under any Facility
Letter or other document entered into pursuant hereto or thereto.
In executing a Facility Letter, the Agent acts as agent for each
Bank severally, and does not by its signature assume
responsibility in respect of the obligations of any Bank, other
than itself in its capacity as a Bank. In entering into an
Obligation, the Agent likewise acts as agent for each Bank
severally and Berliner agrees to indemnify the Agent for that
part of the Obligation which equates to its Commitment. No Bank
shall be responsible for the obligations of any other Bank
hereunder or under any Facility Letter.
14.2 The obligations of the Borrower towards each of the Agent and the
Banks hereunder and under each Facility Letter are undertaken to
each of them as separate and
<PAGE>
independent rights.
15 SECURITY AND APPLICATION OF MONIES
15.1 The Agent shall hold and enforce the Security Interests as agent
and trustee for itself and Berliner in accordance with their
respective rights hereunder and subject to clause 15.3 hereof.
15.2 Notwithstanding anything to the contrary contained in any
Facility Letter to be entered into hereafter or any other
agreement, all Security Interests held by the Agent for the
liabilities of the Borrower in respect of any of the Facilities
shall be held as security for the liabilities of the Borrower in
respect of all of the Facilities.
15.3 Amounts received by the Agent from the Borrower or recovered by
the Agent upon enforcement of the Security Interests or any of
them shall be applied in the following order:
15.3.1 in repayment of fees or expenses (including without
limitation any expenses incurred by the Agent in
enforcing the Security Interests or any of them)
outstanding from the Borrower hereunder or under any
Facility Letter or any
<PAGE>
Security Agreements;
15.3.2 in repayment of any interest outstanding from the
Borrower relating to the Facilities;
15.3.3 in repayment of all other amounts of principal
outstanding from the Borrower hereunder or under any
Facility Letter;
15.3.4 in repayment of any other amount outstanding from the
Borrower hereunder, under any Facility Letter or under
any document ancillary thereto;
15.3.5 the surplus will be paid to the Borrower or as
otherwise required by law.
15.4 At the written request of the Borrower, the Agent will agree in
writing with any Sub-Distributor that provided such Sub-
Distributor is not in breach of the Licence Agreement to which
such Sub-Distributor is a party the Agent will not exercise its
Security Interest in any way which will interfere with the quiet
enjoyment by such Sub-Distributor of the rights granted or
licensed to such Sub-Distributor pursuant to such Licence
Agreement.
<PAGE>
15.5 Where necessary in relation to any Film or any other film or TV
program acquired by or licensed to the Borrower after the date of
this Agreement, the Agent and/or the Banks will enter into an
intercreditor agreement with other parties secured on such Film,
other film or TV program to be negotiated in good faith, to
establish the priority set out in Clause (c)(ix) of the
definition of "Permitted Encumbrances".
16 PROCEDURE FOR FUNDING ADVANCES
16.1 ^ Business Days before the assumption by the Agent of an
Obligation on behalf of the Banks, Berliner undertakes for the
express benefit of the Borrower and the Agent to provide the
Agent with a ^ substantially in the form agreed providing for
the ^ in respect of the applicable Facility.
16.2 In the case of each Loan to be made available under a Facility,
the Agent shall notify Berliner of the date on which such Loan is
to be made to the Borrower at least ^ Business Days before the
date on which such Loan is to be made or such shorter period as
shall be practicable in the circumstances. In the case of any
payment by the Agent in respect of an Obligation it shall give to
Berliner notice of its intention to make a payment in respect
thereof ^ Business Days before the
<PAGE>
date on which payment is made, or shall give such shorter
period of notice as may be practicable in the circumstances.
Failure by the Agent, however, to give notice to Berliner as
set out in this sub-clause shall not relieve Berliner of its
other obligations under this clause or otherwise under this
Agreement.
16.3 Berliner undertakes for the express benefit of the Borrower and
the Agent to pay to the Agent so that the Agent receives value
therefor on the day on which the Agent proposes to disburse the
same, such proportion of the total amount proposed to be
disbursed as Berliner's Commitment bears to the aggregate
Commitments of the Banks.
16.4 All payments to be made hereunder shall be made, if in United
States Dollars, to the account of Coutts with ^ or to such other
account as the Agent may specify and if in any other currency, to
such account of the Agent as the Agent shall from time to time
specify.
16.5 If, for whatever reason, Berliner shall have failed to make any
payment to the Agent as required by this clause 16, then,
provided Berliner has received the notice referred to in clause
16.2 hereof, the Agent may at its discretion (but shall in no
event be obliged to) make the relevant payment on behalf of
Berliner. In
<PAGE>
this event and in consideration of the Agent's agreement to
pay to Berliner Berliner's share of fees payable by the
Borrower hereunder, Berliner shall forthwith reimburse the
Agent for the amount so expended, and pending reimbursement,
the amount concerned shall bear interest at the rate specified
in clause 5.5 hereof. In addition, Berliner shall indemnify
the Agent against all losses, expenses and costs incurred by
the Agent in funding such payment. The amount of such costs
shall be certified to Berliner by the Agent, and the
certificate shall be binding and conclusive for all purposes,
save in the case of manifest error. Any interest payable
hereunder by Berliner shall accrue from day to day and shall
be calculated on the basis of a 360 day year, in the case of
amounts payable in United States Dollars, and on whatever
basis may be customary in the London Interbank market from
time to time in the case of amounts payable in currencies
other than United States Dollars.
17 AVAILABILITY AND REVIEW
The Facilities will be available subject to the terms of this Agreement
until 9th May 1997 or the earlier happening of an Event of Default. The
Banks will review the Facilities made available by this Agreement before
9th May 1997 with a view to determining whether the Facilities should
remain available after such date.
<PAGE>
Prior to such review, the Borrower will supply to the Agent its
internal valuation of the Borrower's interest in its library of films
in a form acceptable to the Agent or, if the Agent shall so request,
such a valuation audited by a firm of certified public accountants
acceptable to the Agent. Such valuation shall value the library at no
less than US$20,000,000. The Agent will consult the Borrower prior to
such review and notify the Borrower of the decision of the Banks as
soon as practicable thereafter.
Such review shall be without prejudice to the terms of any Facility Letter
executed prior thereto.
18 ASSIGNMENT
18.1 This Agreement shall be binding upon, and inure to the benefit
of, the Banks, the Agent, the Borrower and their respective
successors.
18.2 The Borrower shall not assign or transfer any of its rights
and/or obligations under this Agreement.
18.3 Each Bank may at any time with the consent of the Agent (which it
may give or withhold at its discretion but not until it has first
consulted the Borrower) and the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed) assign or
transfer all or any part of its rights or benefits under this
<PAGE>
Agreement by assigning to any one or more banks or other lending
institutions (each of which is in this clause called an
"Assignee") all or any part of such Bank's rights and benefits
under this Agreement
PROVIDED that:-
18.3.1 such assignment or transfer may only be effected if the
Assignee, by delivery of such undertaking as the Agent
may approve, becomes bound by the terms of this
Agreement;
18.3.2 the assignor Bank shall pay to the Agent on demand all
expenses (including but not limited to legal fees) and
any Value Added Tax thereon, certified by the Agent as
having been properly incurred by it in connection with
such transfer by the assignor Bank under this clause;
AND PROVIDED that no Bank may make such assignment or transfer if such
assignment or such transfer will (as appears at the time of such transfer)
result in the Borrower becoming obliged to pay under this Agreement any
greater amounts than it would have been obliged to pay had such assignment
not been made.
18.4 If any Bank assigns or transfers all or any part of its
<PAGE>
rights, benefits and obligations under this Agreement as
provided in clause 18.3 above, all references in this
Agreement to such Bank shall subsequently be construed as
references to such Bank and such Assignee to the extent of
their respective participation and the Borrower shall
subsequently look only to the Assignee (to the exclusion of
such Bank) in respect of that proportion of the Bank's
obligations under this Agreement as correspond to such
Assignee's participation in this Agreement and accordingly
such Bank's Commitment under this Agreement shall be
proportionately reduced and the Assignee shall assume a
Commitment equivalent to such reduction. The Agent shall
notify the Borrower of any such assignment or transfer.
18.5 A Bank may with the prior written consent of the Agent and the
Borrower disclose to a potential Assignee such information about
the Borrower and its financial condition as shall have been made
available to the Banks generally.
19 THE AGENT AND THE BANKS
19.1 Each Bank hereby appoints the Agent to act as the agent of such
Bank for the purposes of this Agreement and for such purposes
irrevocably authorises the Agent to hold
<PAGE>
the Security Interests on its behalf and to take such action
on its behalf and to exercise such powers hereunder as are
specifically delegated to it by this Agreement together with
such powers as are reasonably incidental to them.
Notwithstanding anything else contained herein (including the
provisions of clause 19.13 hereof) the Banks shall jointly and
unanimously decide whether each--should be accepted and the
terms of each--. The approval of each Bank shall be evidenced
by its execution of a copy of each--immediately prior to the
execution thereof by the Agent and the Borrower. Subject to
the terms of this sub-clause the Agent will act or refrain
from acting in accordance with any direction received from
Majority Banks.
19.2 The Agent will account to each Bank for such Bank's due
proportion of all sums received by the Agent for such Bank's
account, whether by way of repayment of principal or payment of
interest, fees or otherwise. The Agent may retain for its own use
and benefit (and shall not be liable to account to the Banks for
all or any part of) any sums received by it by way of
reimbursement of expenses incurred by it (including legal fees)
and by way of agency fees payable for the Agent's own account.
19.3 The Agent shall not be obliged to take any steps
<PAGE>
to ascertain whether any Event of Default (other than default
in repayment of principal or in payment of interest, fees or
any other sums due hereunder or pursuant to any Facility
Letter) has happened or exists. Until the Agent shall have
received express notice from the Borrower or Berliner to the
contrary or has actual knowledge that an Event of Default has
happened or exists, the Agent shall be entitled to assume that
no Event of Default (other than as above) has happened or
exists. Upon receipt of such notice or the possession of such
knowledge the Agent will inform Berliner and will thereafter
proceed in relation to:-
19.3.1 the making or refraining from making of any demand for
repayment of some or all of the amounts then
outstanding or due and unpaid under any of the
Facilities; and
19.3.2 the advance of any further funds to the Borrower under
any of the Facilities
strictly in accordance with the decisions of the Majority Banks,
notwithstanding anything to the contrary herein or in any
Facility Letter.
19.4 The Agent will be entitled to rely on any communication or
document believed by it to be genuine and correct
<PAGE>
and to have been communicated or signed by the person by whom
it purports to be communicated or signed and shall not be
liable to any of the parties to this Agreement for any of the
consequences of such reliance.
19.5 The Agent shall not be obliged to take any proceedings against
the Borrower, any Bank or any other person for the recovery of
any sum due under this Agreement.
19.6 Neither the Agent nor any of its directors, officers, employees
or agents shall be liable for the consequences of any action
taken or omitted by it or them or the exercise of any discretion
or power under or in connection with this Agreement unless caused
by its or their gross negligence or wilful misconduct. The Agent
shall not be responsible for any statements, representations or
warranties made by the Borrower in this Agreement any Facility
Letter or otherwise or for or in respect of any information
supplied or provided or subsequently to be supplied or provided
by the Agent or any of the Banks which is in any way connected
with the Borrower or this Agreement or any Facility Request,
Facility Letter or any of the matters contemplated by this
Agreement. The Agent shall send Berliner monthly reports on the
operation and management of the Facilities. The Agent shall also
meet any reasonable request for additional information within its
knowledge
<PAGE>
relating to the Facilities as soon as practicable but
otherwise save as specifically provided in this Agreement, the
Agent shall not be under any duty or obligation, either
initially or on a continuing basis, to provide Berliner with
any credit information or other information with respect to
the financial condition of the Borrower or otherwise relevant
to the Facilities. Furthermore, the Agent shall not be
responsible for the execution, effectiveness, genuineness,
validity, enforceability or sufficiency of this Agreement or
any of the other documents referred to in this Agreement or
for the recoverability of any Loan or any other sums to become
due and payable pursuant to this Agreement.
19.7 The Agent shall be entitled to rely on the advice of any
professional advisers selected by it given in connection with
this Agreement and any of the matters contemplated by it and
shall not be liable to Berliner for any of the consequences of
such reliance.
19.8 In performing its functions and duties under this Agreement the
Agent shall act solely as the agent of the Banks. Nothing in this
Agreement shall constitute the Agent a trustee for any Bank (save
as expressly provided herein) or trustee or agent of the
Borrower. The Agent shall be under no liability or responsibility
<PAGE>
of any kind to the Borrower or to Berliner arising out of or in
relation to any failure or delay in performance or breach by
Berliner or, as the case may be, the Borrower of any of its
obligations pursuant to this Agreement.
19.9 With respect to its own participation as a Bank in the
Facilities, Coutts shall have the same rights, liabilities and
powers under this Agreement as though it were not also acting as
the Agent for the Banks. The Agent may, without liability to
account, accept deposits from, lend money to and generally engage
in any kind of banking or trust business with or for the Borrower
as if it were not the Agent for the Banks.
19.10 Berliner agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower) rateably according to its
participation herein from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature
whatsoever (except where caused by the wilful misconduct or gross
negligence of the Agent and except in respect of any agency or
other fee due to the Agent in its capacity as Agent) which may be
imposed on, incurred by or asserted against the Agent in its
capacity as Agent in any way relating to or arising out of this
Agreement or any
<PAGE>
action taken or omitted by the Agent in enforcing or
preserving the rights of the Banks under this Agreement.
19.11 Berliner will notify the Agent of, and provide the Agent with a
copy of, any communication between either of them and the
Borrower on any matter concerning the Facilities. The Agent
shall promptly notify Berliner upon receipt of any notices and
documents concerning the Facilities from or to the Borrower and
will immediately send to Berliner copies (or details of the
contents) of such notices and documents of which notification is
given as stated above. The Agent shall also promptly notify
Berliner in writing of its exercise (whether orally or in
writing) of any power of approval, consent, discretion, variation
or waiver vested in it by virtue of the terms hereof or of any
Facility Letter or its being a party thereto as agent for the
Banks.
19.12 Berliner acknowledges that it has, independently and without
reliance upon the Agent based on such documents and information
as it has deemed appropriate, made its own analysis of the
financial condition and affairs of, and its own appraisal of the
creditworthiness of, the Borrower and made its own decision to
enter into this Agreement. Berliner also acknowledges that it
will,
<PAGE>
independently and without reliance upon the Agent and based
on such documents and information as it shall deem appropriate at
the time, continue to make its own decisions in taking or not
taking action under this Agreement (save where it has
specifically agreed to delegate the making of such decisions to
the Agent).
19.13 The Agent may grant waivers or consents, vary the terms of this
Agreement and do or omit to do all such acts and things in
connection with this Agreement as may be authorised in writing by
the Majority Banks. Any such waiver, consent, variation, act or
omission so authorised and effected by the Agent shall be binding
on all the Banks and the Agent shall be under no liability
whatsoever in respect of any such waiver, consent, variation, act
or omission. Except with the prior written Agreement of Berliner
(in the case of clause 19.13.1 - 19.13.4 inclusive), nothing in
this clause shall authorise (as between the Agent and the Banks):
19.13.1 any change in the rate at which any interest is payable
hereunder;
19.13.2 any extension of the date for payment, or alteration in
the amount or currency, of any principal, interest,
fees or any other amount
<PAGE>
payable under any Facility Letter or hereunder
(excluding the fee payable pursuant to clause 6.1.5
hereof);
19.13.3 any increase in any Bank's Commitment; or
19.13.4 any variation of the definition of "Majority Banks" in
clause 1;
19.14 With the consent of the Borrower (not to be unreasonably withheld
or delayed) Coutts may for any reason which Coutts itself
considers sufficient justification retire at any time as Agent
hereunder and as trustee for the Banks of the Security Interests
by giving to the Borrower and each of the Banks not less than 30
days' notice of its intention to do so. In such event the
identity of the bank to be appointed agent and trustee in Coutts'
stead shall be decided by the Majority Banks. Upon such other
bank as the Majority Banks may decide being so appointed, the
retiring Agent shall be discharged from any further obligations
as agent under this Agreement and the Security Agreements and its
successor and each of the other parties to this Agreement shall
have the same rights and obligations and interest as they would
have had if such successor had been a party to this Agreement.
The retiring Agent shall make over to its
<PAGE>
successor all such records as its successor requires to carry
out its duties.
20 CONSENTS AND WAIVERS
Subject to the warranties contained in clauses 9.1.15, 9.1.16, 9.1.17,
9.1.18 and 9.1.19 being true and accurate in all respects the Banks hereby
consent to the Merger.
21 SHARING OF PAYMENTS
21.1 If either Bank ("the Sharing Bank") at any time shall obtain
(whether by way of voluntary payment or pursuant to this
Agreement or otherwise including, but not in limitation, by way
of set-off, counterclaim or other withholding) a proportion in
respect of its participation in any sum due from the Borrower
under this Agreement which is greater than the proportion
obtained by the Bank or Banks obtaining the smallest proportion
of its participation in it, including a nil receipt, (the amount
so obtained by the Sharing Bank which is attributable to such
excess being called the "excess amount") then:
21.1.1 the Sharing Bank shall immediately pay to the Agent an
amount equal to the excess amount, whereupon the Agent
shall notify the Borrower
<PAGE>
of such amount and its receipt by the Agent;
21.1.2 the Agent shall treat such payment as if it were a
payment by the Borrower on account of the sum owed to
the Banks as above; and
21.1.3 as between the Borrower and the Sharing Bank the excess
amount shall be treated as not having been paid, while
as between the Borrower and each Bank (including the
Sharing Bank) it shall be treated as having been paid
to the extent receivable by such Bank
PROVIDED THAT:
21.1.4 notwithstanding the above provisions, no Bank shall be
entitled to commence any action or proceeding for the
recovery of any sum payable to it for its account by
any other Bank under this Agreement prior to the
expiration of 30 Business Days from receipt by such
other Bank of such sum;
21.1.5 every payment and adjustment made pursuant to clauses
21.1.1, 21.1.2 and 21.1.3 above shall be subject to the
condition that if the excess amount (or any part of it)
<PAGE>
subsequently falls to be repaid by the Sharing Bank to
the Borrower or to be paid to any third person, the
Agent (if it shall then hold the same) and each of the
Banks which has received any part of it from the Agent
shall repay the excess amount (or the relevant part, as
the case may be) to the Sharing Bank together with such
amount (if any) as is necessary to reimburse to the
Sharing Bank the appropriate proportion of any interest
it shall be obliged to pay when repaying such amount as
above, and the relevant adjustments pursuant to clauses
21.1.1, 21.1.2 and 21.1.3 above shall be cancelled; and
21.1.6 if any Bank shall commence an action or proceedings
against the Borrower in any court to enforce its rights
under this Agreement and, as a result of or in
connection with such action or proceedings, shall
receive any excess amount such Bank shall not be
required:
21.1.6.1 to share any portion of such excess amount
with a Bank that has the legal right to, but
does not, join
<PAGE>
such action or proceedings or commence
and diligently prosecute a separate
action or proceedings to enforce its
rights in the same or another court; or
21.1.6.2 to share any portion of such excess amount
with the Bank which has or have joined the
same action or proceeding or has or have
commenced and prosecuted a separate action or
proceedings to enforce its or their rights in
the same or in another court if, by reason of
the negligence or wilful default of such
Bank, or Banks obtain(s) a sum which is
proportionately smaller (including a nil
receipt) than that received by the Sharing
Bank; or
21.1.6.3 to share any portion of such excess amount in
circumstances where both the Banks join the
same action or proceedings.
21.2 Each Bank exercising any rights giving rise to a receipt or
receiving any payment of the type referred
<PAGE>
to in clause 21.1 or instituting legal proceedings to recover
sums owing to it pursuant to this Agreement shall as soon as
practicable afterwards give notice to the Agent, which will as
soon as practicable afterwards give notice to the other Bank.
22 EVENTS OF DEFAULT
In any of the following events:-
22.1 if any of the Relevant Parties commits any material breach of or
omits or fails to observe any of the material obligations or
undertakings contained in the Relevant Agreements and such breach
or omission materially adversely affects or will materially
adversely affect the Banks hereunder as determined by the Banks
in good faith or if any material representation or warranty
contained in any of the Relevant Agreements (or in any of the
documents presented when any guarantee or letter of credit issued
pursuant to any Facility Letter is paid) is or becomes untrue or
ceases to be accurate and the same materially adversely affects
or will materially adversely affect the Banks hereunder as
determined by the Banks in good faith or if any of such
agreements is terminated (whether or not lawfully) or ceases to
be in force for whatever reason and, in the Agent's absolute
opinion,
<PAGE>
such termination materially adversely affects the Banks'
rights hereunder or if the Borrower otherwise ceases to be the
exclusive distributor of any Film as provided for in the
applicable Acquisition Agreement and such cessation materially
adversely affects or will materially adversely affect the
Banks hereunder as determined by the Banks in good faith; or
22.2 if while any sum is outstanding hereunder the Borrower at any
time sells transfers or in any way disposes of all or a
substantial part of its undertaking or assets or creates or
permits to subsist any mortgage, charge (whether fixed or
floating) lien or encumbrance or other security or possessory
interest (other than the Permitted Encumbrances) upon any of its
undertaking or assets or allows or permits any of its
subsidiaries or associates to do any of the same or alters its
charter; or
22.3 if the Borrower fails to make or procure the making of any
payment of principal when due or of interest or of fees or
expenses or other payment whatsoever hereunder or under any
Facility Letter on the due date; or
22.4 if any of the Relevant Parties (a) becomes insolvent or (b) is
unable, deemed unable or admits in writing its inability to meet
its respective debts as they fall due
<PAGE>
or (c) makes an assignment for the benefit of creditors or to
an agent authorised to liquidate any substantial amount of its
properties or assets or (d) applies for or consents to the
appointment of a receiver or trustee for it or for a
substantial part of its property or business or institutes or
has instituted against it any proceedings for relief under any
bankruptcy law or any law for the relief of debtors or has
entered against it any order or judgment decreeing its
dissolution or division (provided, however, that, in the event
such a receiver or trustee is appointed or such proceedings
are instituted or order or judgement is entered, without the
consent of the applicable Relevant Party, it is not discharged
within thirty (30) days after such appointment institution and
entrance or (e) if a meeting of creditors is convened or any
composition or arrangement for the benefit of creditors is
proposed or entered into provided always that if any of the
foregoing occurs with respect to a Relevant Party other than
the Borrower the same shall only be an Event of Default if it
materially adversely affects or will materially adversely
affect the Banks hereunder as determined by the Banks in good
faith by any of the aforesaid or (f) if a petition is
presented for the purpose of considering a resolution for the
liquidation (except, and subject to the Agent's prior written
consent as aforesaid, in the event of bona fide company
<PAGE>
reorganisation or amalgamation) of any of the Relevant Parties
or (g) if similar proceedings are taken for the winding up,
bankruptcy or dissolution of any of the aforesaid or (h) if so
called Chapter VII or Chapter XI proceedings are commenced
against any of the Relevant Parties or (i) if any event
analogous to the foregoing occurs in any jurisdiction provided
always that if any of the foregoing occurs with respect to a
Relevant Party other than the Borrower the same shall only be
an Event of Default if it materially adversely affects or will
materially adversely affect the Banks hereunder as determined
by the Banks in good faith; or
22.5 if any of the Relevant Parties shall cease or threaten to cease
to carry on business and such cessation materially adversely
affects or will materially adversely affect the Banks hereunder
as determined by the Banks in good faith or if the existence of
the Borrower is terminated without the Agent's prior written
consent; or
22.6 if an encumbrancer takes possession or a trustee, administrative
receiver or receiver or similar officer is appointed, of the
whole or a material (in the opinion of the Agent) part of the
assets or undertaking of any of the Relevant Parties or if any
event analogous to the foregoing occurs in any jurisdiction
<PAGE>
and such event materially adversely affects or will materially
adversely affect the Banks hereunder as determined by the
Banks in good faith; or
22.7 if the Agent becomes aware of any circumstances which lead the
Agent acting reasonably and in good faith to believe that a
petition for an administration order under Section 9 of the
Insolvency Act 1986 may be presented to the Court in respect of
any of the Relevant Parties and the Agent is satisfied that any
of the Relevant Parties is or may become unable to pay its debts
(within the meaning given to that expression in Section 123 of
that Act) or if such a petition is so presented or if any event
analogous to any of the foregoing occurs in any jurisdiction and
such event materially adversely affects or will materially
adversely affect the Banks hereunder as determined by the Banks
in good faith; or
22.8 if a distress or execution shall be levied or enforced upon or
sued out against the whole or any part of the property of any of
the Relevant Parties and shall not be paid within 5 Business Days
or if any event analogous to any of the foregoing occurs in any
jurisdiction and such event materially adversely affects or will
materially adversely affect the Banks hereunder as determined by
the Banks in good faith; or
<PAGE>
22.9 if there shall be entered or filed against any of the Relevant
Parties or any material portion of its assets, money judgements,
writs or warrants of attachment or similar process in an
aggregate amount greater than US$200,000 (two hundred thousand
United States Dollars) which shall remain unvacated, unbonded,
unstayed or unsatisfied for a period of 30 (thirty) days or in
any event later than five (5) days prior to the date of any
proposed sale thereunder and such event materially adversely
affects or will materially adversely affect the Banks hereunder
as determined by the Banks in good faith;
22.10 if control (as defined in Section 416 of the Income and
Corporation Taxes Act 1988 or in relevant analogous local
legislation) of any of the Relevant Parties (other than the
Borrower) shall be passed to any person or group of persons whose
control in the Agent's reasonable opinion results in a material
deterioration in any of the Relevant Parties' or the Borrower's
creditworthiness or if there is any disagreement or deadlock
amongst the owners or managers of any of the Relevant Parties
(excluding, in the case of any disagreement only, the Borrower)
which the Agent reasonably believes (acting in good faith) will
materially adversely affect the Borrower's ability to
<PAGE>
meet its obligations hereunder or if any event analogous to
any of the foregoing occurs in any jurisdiction; or
22.11 if any of the Security Interests shall not be or shall cease to
be in force or effect or (subject to the Permitted Prior
Encumbrances) shall cease to be a first priority security
interest; or
22.12 if for any reason whatsoever any of the Licence Agreements under
which payments which the Agent shall in its sole opinion deem
material to the security of any Facility and the repayment of any
Loan are due but unpaid shall be terminated or cancelled or if
any such payments are not made when due; or
22.13 if ^ or ^ of ^ from the ^ of ^ and supplied to the Banks and
upon which the Banks have relied or from time to time rely in
deciding whether to ^ or ^ any ^ are found to be materially
inaccurate or unreliable; or
22.14 if any Film is not delivered to any of the licensees in all
material respects in accordance with the provisions of the
relevant Licence Agreements and such failure in delivery results
in any material delay in payment or any non-payment by the
applicable Sub-Distributor or if any Film is not delivered to the
Borrower in all
<PAGE>
material respects in accordance with the provisions of any
Acquisition Agreement in respect of a Film for which the
Borrower has drawndown under any Facility prior to such
delivery and such failure materially adversely affects or will
materially adversely affect the Banks hereunder as determined
by the Banks in good faith; or
22.15 if the amount outstanding to under the Borrower's overdraft
facility with City National at any time exceeds US$1,000,000; or
22.16 if the Borrower defaults under any agreement involving the
borrowing of money or the extension of credit to which the
Borrower is a party and such default consists of the failure to
pay any amount when due or results in any party other than the
Borrower to such agreement having the right to accelerate any
obligation to pay under such agreement and such failure
materially adversely affects or will materially adversely affect
the Banks hereunder as determined by the Banks in good faith; or
22.17 if, without the Banks' prior written consent, Robert and Ellen
Little shall cease to beneficially own and control, directly or
indirectly, free and clear from any liens, at least twenty-five
percent (25%), in the
<PAGE>
aggregate, of the then outstanding voting stock of Borrower or
at least thirty-seven percent (37%), in the aggregate, of the
voting stock of the Borrower on a fully diluted basis
(assuming for the latter purpose that voting stock underlying
options, warrants and convertible securities forms part of the
voting stock of the Borrower on a fully diluted basis, whether
or not such options, warrants or securities are then presently
exercisable or convertible);
22.18 if Robert Little and Ellen Little shall cease to be members of
the board of directors of the Borrower, or cease to be employed
by the Borrower in the capacity set out in their respective
Employment Agreements or if Robert Little and Ellen Little shall
die or become disabled to an extent rendering them incapable of
performing their current jobs for the Borrower; or
22.19 if Robert Little and Ellen Little (or a replacement for one of
Robert Little or Ellen Little approved pursuant to clause 22.20
hereof) and their designees or nominees do not constitute a
majority of the board of directors of the Borrower and the same
affects the Borrower's ability to meet its obligations hereunder
(as determined by the Banks in their absolute discretion); or
<PAGE>
22.20 if either Robert Little or Ellen Little shall cease to be a
member of the board of directors of the Borrower or shall cease
to be employed by the Borrower in the capacity set out in their
respective Employment Agreements or if Robert Little or Ellen
Little shall die or become disabled to an extent rendering them
incapable of performing their jobs for the Borrower (each such
event being a "Termination") and a replacement therefor approved
by the Banks (such approval not to be unreasonably withheld) is
not engaged within 3 months of the Termination upon terms
approved by the Banks (such approval not to be unreasonably
withheld) (it being specifically agreed by the parties hereto
that, notwithstanding anything to the contrary contained herein,
from Termination until the engagement of a replacement approved
by the Banks, the Banks may, in their absolute discretion permit
no further borrowings hereunder); or
22.21 if any person, entity or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act) other than Robert
Little, Ellen Little and/or William Lischak shall have acquired
beneficial ownership of any outstanding class of capital stock of
New OFG which beneficial ownership carries 20% or more of the
outstanding ordinary voting power of New OFG (including without
limitation the outstanding voting power in the
<PAGE>
election of directors of New OFG) whether or not such power
is exercised;
22.22 if any circumstances arise which in the Agent's opinion acting
reasonably and in good faith will materially and adversely affect
the Borrower's ability to meet its obligations hereunder or the
security conferred or intended to be conferred on the Agent or
the Banks hereunder or under any Facility Letter including
without limitation, any invalidity, breach, repudiation or
threatened repudiation of any of the Security Agreements or any
guarantee or letter of credit issued or given under any Facility
Letter
then:
(i) on the expiry of notice requiring remedy within five Business
Days (or at any time after such expiry) in the case of any such
event which is capable of remedy which then remains unremedied
and in all other cases at once (or at any time thereafter) the
Banks and the Agent shall be under no further obligation to issue
any guarantee or letter of credit pursuant to any Facility Letter
if not then issued or to issue the City National Letter of Credit
if not then issued and in the case of all Event of Defaults other
than an Event of Default under clause 22.4 hereof the Agent may
by notice to the
<PAGE>
Borrower terminate all Facilities and in the case of an Event
of Default under clause 22.4 hereof the Facilities shall
automatically terminate and upon any such termination the Loan
(and at the Agent's election all other amounts outstanding
hereunder or any Facility Letter) shall immediately become due
and repayable to the Agent (for the account of the Banks) (as
applicable) together with interest accrued to the date of
actual repayment thereof and an amount equal to the loss of
profit suffered by the Banks as a result of the termination of
each Film Facility prior to the Maturity Date (as defined in
each applicable Facility Letter) and any other charges,
expenses or amounts outstanding but unpaid hereunder or under
any Facility Letter, all without any further demand,
presentment or notice, all of which the Borrower hereby
expressly waives, notwithstanding anything to the contrary
contained herein; and
(ii) if any guarantee or letter of credit has pursuant to any Facility
Letter by then been issued or if the City National Letter of
Credit has by then been issued:-
(aa) to the extent payment in full under any such guarantee
or letter of credit or the City National Letter of
Credit has not been made by the Agent or the Banks it
shall remain
<PAGE>
valid and payable and the Borrower shall remain
liable for all its obligations hereunder and under
any Facility Letter irrespective of any action the
Agent may take (and it shall be under no obligation
to take any action) otherwise to secure repayment of
the Loan (if and whenever made) and all other
amounts then outstanding hereunder or under any
Facility for itself or for the account of the Banks
(as applicable); and
(bb) the Agent may require the Borrower to make such
provision by deposit with the Agent or otherwise as the
Agent in its absolute discretion deems adequate against
the Agent's or the Banks' contingent liability under
any such letter of credit or guarantee or the City
National Letter of Credit; and
(cc) the Agent may at its option by notice to the Borrower
terminate any or all of the Facilities and any part of
the Loan then made shall immediately become due and
repayable together with interest accrued to the date of
actual repayment thereof, an amount equal to the loss
of profit suffered by the Agent as a result of any such
parts of the Loan being
<PAGE>
repaid before the Maturity Date (as defined in the
applicable Facility Letters) and any other charges
expenses or amounts outstanding but unpaid hereunder
or under any Facility Letter; and
(iii) if any Event of Default shall have occurred and be continuing
then the Agent (as agent and trustee for the Banks) and the Banks
shall be entitled to exercise all of the rights and remedies
available to a secured party upon default under the California
Uniform Commercial Code in effect at the time which shall be
applicable for the purpose of establishing the relative rights of
the Agent (as agent and trustee of the Banks) and of the Banks
and of the Borrower, under procedures to be followed in the event
clause 22 hereof shall become operative, including, but not
limited to, the right to sell, license or distribute the
Collateral in respect of which the Security Interests shall have
been granted or any portion thereof, and, in addition thereto,
the rights and remedies provided for in this Agreement, in any
Facility Letter in the Security Agreements or in any other
Relevant Agreement and such other rights and remedies as may be
provided by law or in equity. All rights and remedies existing
under this Agreement, any Facility Letter, any of the Security
Agreements or any other Relevant Agreement are cumulative with,
and not
<PAGE>
exclusive of, any rights or remedies otherwise available.
23 NOTICES
23.1 Any notice or other communication required to be given to the
Agent under this Agreement or any Facility Letter shall be sent
to the Agent at 440 Strand, London WC2R OQS facsimile number
0171-753 1059, marked for the attention of R.E.J. Payne Esq., or
such other address, facsimile number and/or for such other
attention as may be notified to the parties in accordance with
this clause and a copy of such notice shall be sent to Richards
Butler, Beaufort House, 15 St. Botolph Street, London EC3A 7EE
facsimile number 0171-247 5091 marked for the attention of R.P.S.
Philipps Esq. and Michael Maxtone-Smith Esq. or such other
address, facsimile number and/or for such other attention as may
be notified to the parties in accordance with this clause.
23.2 Any notice or other communication required to be given to the
Borrower under this Agreement or any Facility Letter shall be
sent to the Borrower at 8800 Sunset Boulevard, Los Angeles, CA-
90069 facsimile number 310 855 0719, marked for the attention of
W. Lischak Esq. or such other address, facsimile number and/or
for such other attention as may be notified to the parties in
<PAGE>
accordance with this clause.
23.3 Any notice or other communication required to be given to
Berliner under this Agreement or any Facility Letter shall be
sent to Berliner at No. 1 Crown Court, Cheapside, London EC2V 6JP
facsimile number 0171 572 9397 or 0171 572 9399 marked for the
attention of S. Robbins Esq., or such other address, facsimile
number and/or for such other attention as may be notified to the
parties in accordance with this clause.
23.4 Any notice or other communication to be given or made pursuant to
this Agreement or any Facility Letter shall in writing and shall
be sent by personal delivery, be given or made by registered
first class mail (airmail if overseas) or facsimile transmission
(with a hard copy by mail) and shall, save as specified below, be
effective when such personal delivery, first class mail or
facsimile transmission is actually received. In the case of
airmail such notice shall be deemed to be effective 7 Business
Days after being posted. If the Agent is unable, after using
reasonable efforts, to assure itself of the safe arrival of any
notice given hereunder or under any Facility Letter and it elects
then to send or resend the same by registered first class prepaid
post, then such notice shall be deemed to be effective 2 Business
Days after being posted.
<PAGE>
24 CONFIDENTIALITY
The Agent shall have the right to insist that its association and the
association of Berliner with any Film is not disclosed to third parties
(other than professional advisers) or otherwise made public. In any
event, the Borrower shall keep the terms of this Agreement and any
Facility Letters confidential and shall not, other than as required by
law, disclose them to third parties (other than its professional advisers)
without the Agent's prior written consent. Where disclosure is required
by law, the Borrower shall where possible, consult with the Agent about
the disclosure required to be made and shall in any event make only such
disclosure as is necessitated by the applicable legal requirements. The
Banks shall keep confidential all information supplied to them by the
Borrower and shall not other than as required by law disclose it to third
parties other than to their professional advisers or (with the prior
written consent of the Borrower, which consent shall not be unreasonably
withheld or delayed) to any bank to whom any of them shall wish to sub-
participate or assign any of its rights hereunder and/or to any such
bank's professional advisers.
25 FURTHER ASSURANCE
The Borrower shall at the Borrower's expense furnish the Agent with and
shall execute acknowledge and deliver and cause to be
<PAGE>
executed acknowledged and delivered to the Agent any agreements
documents or instruments (including without limiting the generality of
the foregoing short form assignments of copyright and of any of the
Licence Agreements) in such form and substance as shall be approved or
designated by the Agent which the Agent may from time to time in its
discretion reasonably require or deem necessary or proper to evidence
establish protect enforce or secure any of the arrangements or
transactions made or envisaged by this Agreement or any Facility Letter
or more fully to put into effect or carry out the purposes provisions
or intent of this Agreement or any Facility Letter. Should the
Borrower within ten (10) Business Days of being requested so to do fail
to execute acknowledge and deliver any such supplemental documents
required by the Agent then the Agent shall have the right to execute
acknowledge and deliver such documents on behalf of and in the name of
the Borrower. The Agent is hereby irrevocably appointed the lawful
attorney of the Borrower for the purposes of this clause such
appointment constituting a power coupled with an interest.
26 CUMULATIVE RIGHTS
The rights of the Banks and the Agent under this Agreement and any
Facility Letter are cumulative and may be exercised as frequently as any
Bank or the Agent considers necessary and any waiver by any Bank of any
breach default or non-compliance hereunder or herewith (and whether or not
the same constitutes an
<PAGE>
Event of Default) will not be construed as a continuing waiver of the same
or any other breach default or non-compliance hereunder or herewith.
Notwithstanding anything to the contrary herein contained any reference
in this Agreement or any Facility Letter to the termination thereof shall
in each place in which it occurs be entirely without prejudice to the
rights of Coutts or Berliner to payment in full of all amounts (of
whatsoever kind) outstanding or arising hereunder which right shall remain
enforceable against the Borrower at all times.
27 GOVERNING LAW AND JURISDICTION
27.1 This Agreement and all Facility Letters shall be governed by and construed
in accordance with English law and the parties hereby submit to the non-
exclusive jurisdiction of the English Courts and the state and federal
courts located in Los Angeles, California.
27.2 THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY AND ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUIT, ACTION OR PROCEEDING,
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY FACILITY LETTER OR ANY
SECURITY AGREEMENT OR ANY OTHER RELEVANT AGREEMENT BROUGHT IN THE STATE OF
CALIFORNIA, COUNTY OF LOS ANGELES AND HEREBY FURTHER IRREVOCABLY WAIVES
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF
CALIFORNIA, COUNTY OF LOS ANGELES HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
<PAGE>
28 SEVERABILITY
If any of the provisions of this Agreement or any Facility Letter become
invalid illegal or unenforceable in any respect under any law or for any
other reason whatsoever, the validity legality and enforceability of the
remaining provisions hereof or thereof shall not in any way be affected or
impaired.
29 RELATIONSHIP
Nothing in this Agreement or in any Facility Letter shall constitute or be
deemed to constitute a partnership or joint venture between any of the
Banks and the Borrower and nothing shall create or be deemed to create a
relationship of principal and agent between any of the Banks and the
Borrower. It is hereby acknowledged that any and all provisions of this
Agreement creating rights and obligations of the Banks to each other are
of no concern to the Borrower.
30 CONFLICTS WITH FACILITY LETTERS
In the event of any conflict or inconsistency between this Agreement and
any Facility Letter or other agreement, the terms of this Agreement shall
prevail.
AS WITNESS the hands of the duly authorised representatives of the
<PAGE>
parties the day and year first before written.
<PAGE>
Signed by )
for and on behalf of ) /S/ Christopher P. Collins
Coutts & Co. )
in the presence of:- ) /S/ Judith Chan
Signed by )
for and on behalf of ) /S/ Amanda Burgess
Berliner Bank A.G. London )
Branch in the presence of:- ) /S/ Christopher P. Collins
Signed by )
for and on behalf of ) /S/ William F. Lischak
Overseas Filmgroup Inc. )
in the presence of:- ) /S/ Michael Maxtone-Smith
Signed by )
for and on behalf of ) /S/ William F. Lischak
Entertainment/Media Acquisition )
Corporation in the presence of:- ) /S/ Michael Maxtone-Smith
<PAGE>
Exhibit 10.26*
*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
SYMBOL "^" HAS BEEN USED IN THE EXHIBIT TO INDICATE WHERE CONFIDENTIAL PORTIONS
OF THE TEXT HAVE BEEN OMITTED FROM THE EXHIBIT AND FILED SEPARATELY, ON A
CONFIDENTIAL BASIS, WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
March 15, 1996
Neal H. Edelson, Esq.
BMG Video
Vice President, Business and Legal Affairs
1540 Broadway
New York, New York 10036-4098
Re: VIDEO DISTRIBUTION AGREEMENT - Deal Memo
Dear Neal:
Pursuant to our conversations, the following sets forth the basic terms of our
agreement in connection with a video distribution agreement (the "Agreement")
between Overseas Filmgroup, Inc.("OFG") and BMG Video ("BMG"):
A. TERM: The term of the Agreement shall be one year, commencing on January
1, 1996 and terminating on December 31, 1996 (the "Term"). With respect to each
picture, the Term shall expire five (5) years from the applicable videogram
release date. OFG and BMG shall have the option to extend the Term of this
Agreement for one additional year by mutual consent (the "Extension").
B. TERRITORY/RIGHTS: BMG will be granted video distribution rights (the
"Rights") to the Pictures (as defined in Paragraph C. below) throughout the
United States and its respective territories, commonwealths and possessions,
including Puerto Rico and the United States Virgin Islands (the "Territory").
Video distribution rights shall be defined as the sole and exclusive right to
manufacture, advertise, promote, sell, lease and distribute on a sale or rental
basis, all video product of the Pictures in all linear (non-interactive) formats
intended for home use including, but not limited to, videocassettes, laser
discs, CD-I, CD-ROM, Digital Video Disc and any other video format hereafter
created.
C. PICTURES: The pictures which are part of the Agreement (the "Pictures")
include the titles attached hereto on Exhibits A through L, as well as any
picture delivered to OFG within the Term of the Agreement, excluding only those
pictures which OFG determines to sell all rights in the Territory to one buyer
(an "All Rights Sale Exception") and those pictures which are "Excluded
Pictures" as defined below. With respect to each All Rights Sales Exception
only, BMG shall have a right of first negotiation.
With respect to each Picture, OFG shall inform BMG of its release plans in the
Territory, such release plans will generally fall into two categories. The
first category shall be those Pictures
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 2
which are expected to be released theatrically as the first window of
exploitation in the U.S., including any Picture released theatrically by OFG
doing business as First Look Pictures (a "Theatrical Release Picture"). The
second category shall be those Pictures which are not expected to be released
theatrically in the U.S. as the first window of exploitation (a "Non-Theatrical
Release Picture").
With respect to each Picture, OFG and BMG shall negotiate in good faith in order
to reach an agreed level of ^ and based upon the ^ as described below, the ^
which OFG shall earn ^. In the event, OFG and BMG cannot agree on the ^ after
good faith negotiation, OFG shall be entitled to remove such picture from the
terms of this Agreement (an "Excluded Picture"). Notwithstanding the foregoing,
OFG agrees that, with respect to any Excluded Picture, OFG will provide to BMG
the significant financial terms of any bona fide third party offer which OFG
intends to accept, if the terms of any such third party offer (the "Qualifying
Third Party Offer") includes a ^ of gross receipts to OFG which is not at least
^ more than the Guarantee (as defined below). BMG will then have the right (the
^ ) to offer distribution of the Excluded Picture on ^ and ^ as the
Qualifying Third Party Offer. The ^ shall be exercised, if at all, by BMG
giving OFG notice within three business days of its receipt of a summary of the
Qualifying Third Party Offer. In the event BMG exercises its ^, OFG shall be
obligated to accept the BMG offer made by way of the ^ . BMG and OFG warrant
and agree to keep the terms of any Qualifying Third Party Offer and the ^ of
this Agreement (as well as any other material business provision of this
Agreement) completely and highly confidential. Additionally, with respect to
any Excluded Picture, in the event BMG has last provided estimates of unit
sales, costs, expenses and ^ more than ^ prior to OFG's receipt of any third
party offer OFG intends to accept, OFG agrees that BMG will be afforded a
reasonable time period to provide updated ^ and ^ prior to OFG's accepting any
third party offer.
Further, with respect to each of the Theatrically Released Pictures and the Non-
Theatrically Released Pictures OFG and BMG agree as follows:
(1) ^ PICTURE(S) With respect to each ^ Picture:
a) Fee: BMG shall be entitled to a distribution fee of ^ of
all gross receipts generated from exploitation of the Rights
until such time as the share of such gross receipts payable
to OFG is equal to ^ of the ^ . Thereafter, BMG shall be
entitled to a distribution fee of ^ of all gross receipts
^ to the ^ of gross receipts payable only from gross
receipts in ^ of ^ of the ^ and only until such time as
gross receipts ^ to OFG is ^ to ^ of the ^. Thereafter, BMG
shall be entitled to a ^ distribution fee of ^ of all
gross receipts
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 3
generated from exploitation of the Rights in ^ of those
needed to pay OFG ^ of the ^ .
b) Guarantee: BMG guarantees the ^ from the exploitation of the
Rights shall not be ^ than ^ of ^ of the ^ .
Notwithstanding the foregoing, the ^ for the Theatrical
Release Pictures named in Exhibits A through D (the "Initial
Theatrical Release Picture(s)") shall be as provided in each
of Exhibits A through D.
c) P & A Commitment: With respect to each Theatrical Release
Picture, OFG and BMG shall negotiate in good faith to arrive
at an agreed minimum theatrical print and advertising
commitment to be made by OFG (the "Minimum P & A
Commitment"). OFG shall determine the Minimum P & A
Commitment prior to BMG providing its final estimates of
units sales, costs, expenses and the Theatrical Release
Picture Guarantee with respect to a particular Theatrical
Release Picture. With respect to the Initial Theatrical
Release Picture(s), the Minimum P & A Commitment is provided
on Exhibits A through D.
(2) ^ PICTURE(S): With respect to each ^ Picture:
a) Fee: BMG shall be entitled to a distribution fee of ^ of
all gross receipts generated from exploitation of the Rights
until such time as the share of such gross receipts ^ to OFG
is ^ to ^ of the ^ . Thereafter, BMG shall be entitled to
a distribution fee of ^ of all gross receipts ^ in ^ of
^ of the ^ . At such time as the share of gross receipts ^
to OFG equals ^ of the ^ , BMG shall be entitled to a
distribution fee ^ of all gross receipts ^ to the ^ of
gross receipts but payable only from gross receipts in ^
of ^ of the ^ .
b) Guarantee: BMG shall guarantee OFG's share of gross receipts
from the exploitation of the Rights shall ^ be ^ than ^ .
Notwithstanding the foregoing, the ^ for the ^ named in
Exhibits E through L shall be as provided in each of Exhibit
E through L.
Each of the ^ and the ^ shall sometimes be referred to as a "Guarantee" and
each Guarantee shall be paid ^ days following the video release of the
respective Picture. With respect to the ^ and the ^ , OFG and BMG acknowledge
and confirm their agreement on estimated ^ , the ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 4
or ^ and, if applicable, the Minimum P & A Commitment.
D. ^ BMG shall pay OFG an ^ of ^ which shall be payable (i) ^ upon signature
by OFG of this Agreement and delivery to BMG of a finished and edited D-2
Master of at least ^ Pictures; and (ii) ^ upon signature by OFG of a ^ and
delivery of certain ^ to be specified within the ^ . The ^ shall be ^ by
BMG both (i) by applying any ^ of actual receipts payable to OFG based on
the distribution of a particular Picture and the ^ paid, which ^ , if any,
shall be ^ upon the ^ accounting period with respect to each Picture, and
(ii) against any amounts payable to OFG with respect to any Picture in ^ of
any ^ paid. Should, at the end of the Term, any portion of the ^ be ^ as
provided above ^ such ^ shall be available to be ^ to Pictures becoming a
part of this Agreement during the Extension, if any.
BMG shall pay OFG an additional ^, less any ^, if any, ^ on December 30,
1996, (OFG hereby acknowledges that BMG will not be in breach so long as
actual payment of the ^ is received by ^ ) should both OFG and BMG ^ to the ^
of the ^ of this Agreement for an additional one year period, which ^ shall
be ^ against Pictures becoming a part of the Agreement (which OFG warrants
shall be ^ than ^ additional Pictures) during the Extension and which ^
shall be ^ in the same manner and on the same basis as the ^ but against such
future pictures only.
E. EXPLOITATION DECISIONS: OFG shall name a person (the "Point Person")
who will be the primary contact with respect to exploitation decisions
with respect to the Pictures. This Point Person may be changed by OFG
at its sole election and at such times as OFG shall determine.
Initially, MJ Peckos shall be such Point Person. Where OFG is
provided certain consultation rights under this paragraph, the Point
Person will be the primary party to which BMG shall provide such
rights.
With respect to each Picture, OFG is hereby given the right to seriously and
meaningfully consult (the "Consultation Right") with respect to all areas of
the marketing and distribution of the Pictures as provided under this
Agreement. Such Consultation Right will apply to projected unit sales,
selling price per unit, budgeted levels of marketing, selling and
manufacturing costs, video release dates, marketing plans (including
selection of third party creative designers, the purchase of video
distributor and trade advertising, the creation of key art and "box" art to
be used, any sales incentive plans to be used, any marketing development
funds ("MDF's"), so called "spiffs", packaging of units, the design and
implementation of promotional campaigns) and all other material marketing and
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 5
sales decisions. BMG agrees to provide ongoing information, both written and
oral, to OFG throughout all planning, marketing and distribution phases of
each Picture and specifically to provide OFG with multiple designs of artwork
intended for use as both key art and "box" art prior to BMG's final
selection. In addition, OFG shall be given notice of and allowed, as
appropriate, to participate in all meetings (both held internally and with
outside vendors, if any) with respect to areas of planning, marketing and
distribution of each Picture. Nothing contained in this paragraph is meant
to provide an undue burden on BMG in providing OFG with this Consultation
Right.
F. REPORTING: With respect to each Picture, beginning with the fiscal quarter
(based upon BMG's fiscal year end) of the videogram release date of such
Picture, BMG shall issue to OFG a true and correct statement of accounting
within 60 days following each fiscal quarter for the first two years following
the video release of such Picture. Thereafter, BMG shall account to OFG on a
semiannual basis. Such accountings shall include units sold, price per unit,
gross receipts, sales, marketing and manufacturing costs, a reserve for returns,
and OFG's share of gross receipts. The report shall also reflect the ^ paid
and any application of the ^ or the ^ . Payment of any amounts owing to OFG
shall be made and included with each accounting. At OFG's request, BMG will
provide supporting information and documentation (including third party
invoices) with respect to any area outlined above.
The foregoing is meant only to summarize the principle business points between
OFG and BMG. OFG and BMG intend to enter into a long form agreement in a
reasonable time period following the execution of this Agreement which long form
agreement shall set forth the remaining terms of this agreement and which long
form agreement will be subject to good faith negotiations between OFG and BMG,
however, until such time as the long form agreement is executed this Agreement
shall be binding upon both parties.
Very truly yours,
/s/ William F. Lischak
William Lischak
COO/CFO
Overseas Filmgroup, Inc.
Agreed to this 20th day of March, 1996
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 6
BMG VIDEO
By: /s/ Joe Schultz
Its: General Manager
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 7
EXHIBIT "A"
TITLE: "ANTONIA'S LINE"
CATEGORY: Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
MINIMUM P & A COMMITMENT: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 8
EXHIBIT "B"
TITLE: "INFINITY"
CATEGORY: Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
MINIMUM P & A COMMITMENT: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 9
EXHIBIT "C"
TITLE: "THIS IS THE SEA"
CATEGORY: Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
MINIMUM P & A COMMITMENT: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 10
EXHIBIT "D"
TITLE: "BODY OF A WOMAN"
CATEGORY: Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
MINIMUM P & A COMMITMENT: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 11
EXHIBIT "E"
TITLE: "MANHATTAN MERINGUE"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 12
EXHIBIT "F"
TITLE: "FIST OF THE NORTH STAR"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 13
EXHIBIT "G"
TITLE: "ONE GOOD TURN"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 14
EXHIBIT "H"
TITLE: "MAD DOGS AND ENGLISHMEN"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 15
EXHIBIT "I"
TITLE: "DOWNHILL WILLIE"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 16
EXHIBIT "J"
TITLE: "BOSTON KICKOUT"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 17
EXHIBIT "K"
TITLE: "BACK TO BACK"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
Neal Edelson, Esq.
March 6, 1996
Page 18
EXHIBIT "L"
TITLE: "SHORTCUT TO PARADISE"
CATEGORY: Non-Theatrical Release Picture
ESTIMATED UNITS: ^
ESTIMATED OFG GROSS RECEIPTS: ^
GUARANTEE: ^
<PAGE>
LOAN OUT AGREEMENT
THIS LOAN OUT is effective as of March 11, 1996, between Overseas
Filmgroup, Inc. ("Company"), whose principal place of business is at 8800
Sunset Boulevard, Los Angeles, California 90069 and BLAH, Inc. ("Lender"),
whose principal place of business is at 601 North Sweetzer, Unit B, Los
Angeles, California 90048.
In consideration of Company's engagement of Lender to provide the
services of Anita Hope ("Hope") to Company and in consideration of Lender's
acceptance of such appointment, Lender and Company agree as follows:
1. TERM OF AGREEMENT. The business relationship between Lender and
Company shall commence on March 11, 1996, and shall continue until
termination by either of Company or Lender.
2. SERVICES. Company hereby engages Lender to cause Hope to render
services to Company as a Production Executive. Lender shall cause Hope to
render all services customarily rendered by directors of production
executives in the motion picture industry, including but not limited to,
coordination and supervision of all pre-production, production and post
production activities of any designated production in which the Company has
an interest and so designates. Lender shall cause Hope to render such
services on an exclusive basis.
3. COMPENSATION. In consideration for the services to be performed by
Hope, Company agrees to pay Lender One Thousand Two Hundred Dollars ($1,200)
to be paid weekly on Company's regular payday.
4. NOTICE. Any notice of communication given hereunder by either party
to the other shall be forwarded to the address given below or such other
address for which notice has been given:
To Company: Overseas Filmgroup, Inc.
8800 Sunset Boulevard, Third Floor
Los Angeles, California 90069
Facsimile: (310) 855-0719
Attention: Mr. William Lischak
To Lender: BLAH, INC.
601 North Sweetzer,
<PAGE>
Unit B
Los Angeles, California 90048
Attention: Ms. Anita Hope
Facsimile: (213) 655-1320
5. CONSENT TO JURISDICTION. Both parties consent to the jurisdiction of
any court, state or federal, in the State of California, provided notice is
given of the commencement of such action, as provided in paragraph 4.
6. ASSIGNMENT. This Agreement shall be binding upon the parties hereto,
their respective successors and assigns; provided, however, Lender shall not,
without prior written approval of Company or its Designee, assign the whole
or part of its interest in this Agreement; and any unapproved assignment
shall be void.
7. ENTIRE AGREEMENT. this Agreement replaces all other contracts, oral
or written, between the parties hereto and contains all of the agreements and
understandings between said parties. This is an integrated document.
8. MODIFICATIONS. This Agreement may be modified or amended only by a
writing executed by all parties.
9. GOVERNING LAW. This Agreement will be governed by the laws of the
State of California.
This Agreement contains the entire understanding of the parties.
The signatures of Lender and Company below acknowledge review,
understanding and full, knowing and voluntary acceptance by Lender and
Company of the terms and conditions set forth in this Agreement.
BLAH, INC.
/s/ Anita Hope
-----------------------
By: Anita Hope Dated: 03/25/97
------------------- -------------------
Its: President
------------------
OVERSEAS FILMGROUP, INC.
/s/ William F. Lischak
-----------------------
By: William F. Lischak Dated: 03/25/97
------------------- -------------------
Its: CFO, COO
------------------
<PAGE>
EXHIBIT 10.28
AGREEMENT
This Agreement dated as of September 12, 1996, by and between OVERSEAS
FILMGROUP, INC. ("OFG") and RACING PICTURES srl ("Racing") amends and
restates in its entirety that certain agreement dated as of December 31, 1994
between OFG and Racing as amended by that certain Amendment dated as of
December 1, 1995 between OFG and Racing.
RECITALS
1. Pursuant to various fully executed License Agreements (collectively the
"Sales Agreements"), copies of which are attached hereto as Exhibit C, OFG has
licensed certain distribution rights of various motion pictures for the
territory of Italy (the "OFG Motion Pictures") to Racing Pictures on behalf of
various producers or other rights holders.
A portion of the license fees due pursuant to certain Sales Agreements are
outstanding as specifically detailed in Exhibit A attached hereto (such Exhibit
A not being a full history of all license fees and motion pictures licensed by
Racing from OFG).
2. Racing has engaged OFG to sell, license and otherwise distribute certain
motion pictures or programs (the "Racing Motion Pictures"), including without
limitation "Soccer Shootout" and "Soccer Spectacular", on its behalf throughout
the world under various arrangements (collectively the "Distribution
Agreements"), copies of which are attached hereto as Exhibit D, pursuant to
which OFG is entitled to earn a fee and recoup its expenses and other costs and
is then to remit the net receipts to Racing.
3. OFG has applied certain sums owing to Racing under the various Distribution
Agreements to amounts owing from Racing to OFG for the OFG Motion Pictures.
AGREEMENT
OFG and Racing hereby acknowledge and confirm the above Recitals and agree as
follows:
A. OFG and Racing hereby mutually agree to terminate Racing's distribution
rights in connection with the following motion pictures effective as of the
date hereof:
On The Make Heaven Becomes Hell
Rachel River Educating Crystal
The Invisible Kid
<PAGE>
Racing Pictures srl Agreement
As of September 12, 1996
Page 2
B. Racing acknowledges its past due license fees on the OFG Motion Pictures as
of September 12, 1996, equals $418,000 as detailed in Exhibit B as a result of
the foregoing termination of distribution rights.
C. Racing agrees to make payment of such remaining unpaid balance on or before
September 30, 1998.
D. OFG shall continue to sell, license and otherwise distribute the Racing
Motion Pictures pursuant to the Distribution Agreements and shall apply all
amounts arising therefor otherwise payable to Racing pursuant to the various
license agreements relating to the "Racing Motion Pictures" to the amount set
forth in paragraph B above.
E. Following full payment of the license fees provided in the Sales
Agreements, all net receipts otherwise payable to Racing shall be paid to Racing
as provided in the Distribution Agreements.
F. Failure by Racing to make payments as provided herein shall result in OFG
canceling the Sales Agreements at its election.
Except as otherwise modified as provided herein, all other terms and conditions
shall remain in full force and effect as provided in the various license
agreements or other agreements as may exist between OFG and Racing.
Agreed and Accepted by:
OVERSEAS FILM GROUP, INC.
BY: /s/ Robert Little
-------------------------
ITS:
-------------------------
RACING PICTURES SRL
BY: /s/ Alessandro Fracassi
-------------------------
ITS:
-------------------------
<PAGE>
Racing Pictures srl Agreement
As of September 12, 1996
Page 3
EXHIBIT "A"
FILM TITLE OUTSTANDING BALANCE
- ---------- -------------------
Assault on Precinct 13 $ 19,000.00
Aloha Summer $ 10,000.00
Hydra $ 24,000.00
Shape Up $ 24,000.00
Mission Manila $ 12,000.00
Rest In Pieces $ 24,000.00
Edge of the Ax $ 24,000.00
Buckeye & Blue $ 10,000.00
Breaking Loose $ 10,000.00
Platinum Triangle $ 24,000.00
Trained to Kill $ 18,000.00
Katy Meets the Aliens $ 24,000.00
Z-Man $ 12,000.00
Psychocop $ 10,000.00
On The Make $ 30,000.00
Rachel River $ 30,000.00
The Invisible Kid $ 30,000.00
Heaven Becomes Hell $ 25,000.00
Came a Hot Friday $ 12,000.00
Palette On the Floor $ 25,000.00
Lockdown $ 12,000.00
Educating Crystal $ 25,000.00
Job Man $ 25,000.00
Funny $ 8,000.00
Body Boarding Down Under $ 7,000.00
Edge Of Honor $ 30,000.00
Danger Zone III $ 25,000.00
Soul Mates $ 24,000.00
-----------
$553,000.00
-----------
-----------
<PAGE>
Racing Pictures srl Agreement
As of September 12, 1996
Page 4
EXHIBIT "B"
FILM TITLE OUTSTANDING BALANCE
- ---------- -------------------
Assault on Precinct 13 $ 19,000.00
Aloha Summer $ 10,000.00
Hydra $ 24,000.00
Shape Up $ 24,000.00
Mission Manila $ 12,000.00
Rest In Pieces $ 24,000.00
Edge of the Ax $ 24,000.00
Buckeye & Blue $ 10,000.00
Breaking Loose $ 10,000.00
Platinum Triangle $ 24,000.00
Trained to Kill $ 18,000.00
Katy Meets the Aliens $ 24,000.00
Z-Man $ 12,000.00
Psychocop $ 10,000.00
Came a Hot Friday $ 12,000.00
Palette On the Floor $ 25,000.00
Lockdown $ 12,000.00
Job Man $ 25,000.00
Funny $ 8,000.00
Body Boarding Down Under $ 7,000.00
Edge Of Honor $ 30,000.00
Danger Zone III $ 25,000.00
Soul Mates $ 24,000.00
-----------
$413,000.00
-----------
-----------
<PAGE>
Racing Pictures srl Agreement
As of September 12, 1996
Page 5
EXHIBIT "C"
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: ALOHA SUMMER starring Chris Makepiece, Yuki Okumoto, Tia Carrere,
directed by Tommy Lee Wallace
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VlDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) l" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PI.C. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste.
302, Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via
dei tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: ARIZONA HOME starring Michael Parks, Denise Crosby, Hugh Harrington,
directed by John G. Thomas
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (e)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) l" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(e) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of January 1, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: ASSAULT ON PRECINCT 13 starring Austin Stoker, Written and Directed
by: John Carpenter
Territory: ITALY ONLY.
Term: Twelve (12) years commencing on January 1, 1989 and ending on January 1,
2001. The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., Overseas Filmgroup Inc.,
8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069, ("Owner/Licensor") and
Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197 Roma, Italy (Tel 39 6
808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: ASTONISHED starring Liliana Komorowska, Directed by: Travis Preston
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: BLACKOUT starring Carol Lynley, Gail O, Grady, Micahel Keys Hall,
Joanna Miles, directed by Doug Adams.
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Flat Out
Entertainment Pty.,LTD. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste.
302, Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via
dei tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: BLOWN AWAY starring Robby Naish, Bob McTavish, Produced and directed
by Paul Witzig
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD15,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 3,000.00 Upon signature of this Agreement.
USD12,000.00 within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Flat Out
Entertainment Pty.,LTD. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste.
302, Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via
dei tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: BODY BOARDING DOWN UNDER Produced and directed by Peter Taylor
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD7,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 1,400.00 Upon signature of this Agreement.
USD5,600.00 within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: BREAKING LOOSE Starring Peter Phelps, Vince Martin, Abigail, written
and directed by Rod Hay
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: BUCKEYE AND BLUE Starring Robyn Lively, Jeffrey Osterhage, written and
directed by J.C. Compton
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: THE CARRIER Starring Gregory Fortescu, Steve Dixon, produced and
directed by Nathan White
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between A & Z Co.,
LTD. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA
90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10,
00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: CAT IN THE CAGE Starring Behrooz Vossoughi, produced and directed by
Tony Zarindast
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD5,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 1,000.00 Upon signature of this Agreement.
USD4,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: COUNTERFORCE Starring George Rivero, George Kennedy, Andrew Stevens,
directed by J. Anthony Loma
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD40,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 8,000.00 Upon signature of this Agreement.
USD32,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: DANCE Starring Johan Revnal, Ellen Troy, Calrton Wilborn, Charlene
Campbell, directed by Robin Murray
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: DEADTIME STORIES Starring Nicole Picard, Scott Valentine, directed by
Jeffrey S. Delman
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between United
Entertainment Corp. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los
Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre
Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: DEATH FLASH Starring Arthur Jeremy Nay, Doreen Alderman, directed by
Tony Zarindast
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste.
302, Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via
dei tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: DREAMS OF HOME Starring Shaun Bao, Harry Ip, Peter Chin Geeling,
directed by Leon Narby
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: EDGE OF THE AX starring Barton Faulks, Christina Marie Lane, directed
by Jeffrey S. Delman
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference. ).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: FAMILY REUNION starring Mel Novak, Pam Phillips, directed by Michael
Hawes
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD50,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 10,000.00 Upon signature of this Agreement.
USD40,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than _____ months after ____ .
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: FINE GOLD starring Ted Wass, Jane Badler, Tia Carrere, written and
directed by J. Anthony Loma
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: GHOST CHASE starring Jason Lively, Tim McDaniel, Jill Whitlow,
directed by Roland Emmerich
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD50,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 10,000.00 Upon signature of this Agreement.
USD40,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between A & Z Co.,
LTD. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA
90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10,
00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: GUNS AND THE FURY starring Peter Graves, Cameron Mitchell, Michael
Ansara, directed by Tony Zarindast
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between United
Entertainment Corp. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los
Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre
Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: HARDCASE AND FIST starring Ted Prior, Carter Wong, produced and
directed by Tony Zaridast
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between United
Entertainment Corp. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los
Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre
Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: HEAVEN CAN HELP starring Tony Nova, Jinx, Diana Copeland, produced and
directed by Tony Zaridast
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: HOLLYWOOD DREAMING starring Ben Glass, Orson Bean, produced and
directed by Jill Wilson
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: ICE HOUSE starring Melissa Gilbert, Bo Brinkman, directed by Eagle
Penell
Territory: ITALY ONLY.
Term: 12 years commencing on January 1, 1989 and ending on January 1, 2001. The
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: KATY MEETS THE ALIENS animation by Moro Creative Assoc., directed by
Jose Luis and Santiago Moro
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: KILL LINE starring Bobby Kim, written and directed by Richard H. Kim
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: LOCKDOWN starring Richard Lynch, Chris de Rose, directed by Frank
Harris
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: MEDIUM STRAIGHT starring Jerome LePage, Richard Schiff, Anne Lilly,
directed by Adam Friedman
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: MINDGAMES starring Maxwell Caulfield, Edward Albert, Shawn Weatherly,
directed by Bob Yari
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: MISSION MANILLA starring Larry Wilcox, Robin Eisenman, written and
directed by Peter M. MacKenzie
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: NECROMANCER starring Elizabeth Cayton, Russ Tamblyn, Rhonda Dorton,
directed by Dusty Nelson
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD45,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 9,000.00 Upon signature of this Agreement.
USD36,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: NIGHTSCREAMS starring Joe Manno, Ron Thomas, Randy Lundsford,
directed by Allen Plone
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD35,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 7,000.00 Upon signature of this Agreement.
USD28,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: NO SAVE HAVEN starring Wings Hauser, Robert Tessier, Rober Ahola,
directed by Ronnie Rondell
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD35,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 7,000.00 Upon signature of this Agreement.
USD28,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Notwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT/SCHEDULE A
THIS AGREEMENT is entered into as of June 30th, 1988 by and between OVERSEAS
FILMGROUP INC., 8800 Sunset Bl., Suite 302, L.A., CA 90069 ("Owner/Licensor")
and RACING PICTURES, Via Dei Tre Orologi 10, 00197 Roma, Italy. As used in this
Agreement, the following terms shall have the meanings indicated:______________
DEAL TERMS
Picture: ON THE LINE starring David Carradine, directed by Jose Luis Borau
Territory: ITALY Only.
TERM: Ten (10) years commencing on June 30, 1988. The term shall be subject to
events of force majeure.
The rights licensed herein: Theatrical, Non-Theatrical, Videogrammes, Pay and
Free Television only.
Language version: Italian version only.
Distribution Terms:
(a) Minimum Guarantee USD 20,000.00 payable as follows:
USD 4,000.00 upon signature of this agreement, but
in any event no later than July 30, 1988.
USD 8,000.00 upon delivery of dubbing materials, but
in any event no later than Oct. 30, 1988.
USD 8,000.00 upon access to Internegative, to
manufacture Italian prints, but in any
event, no later than Dec. 30, 1988.
Disposition of Gross Receipts:
THEATRICAL AND NON-THEATRICAL: Distributor is authorized to recoup distribution
expenses as per Article 6A. Thereafter, all gross receipts shall be divided 50%
to Licensor and 50% to Distributor.
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 20% of the gross wholesale price of such Video Device
and 20% of Distributor's gross receipts from any other form of Video Device
distribution.
PAY TELEVISION: 50% to Licensor and 50% to Distributor. Distribution expenses
as per Article 6A to be deducted from Licensor's share.
FREE TELEVISION: 50% to Licensor and 50% to Distributor. Distribution expenses
as per Article 6A to be deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
INITIALS
/s/ RL
--------
/s/ AF
--------
<PAGE>
2
Holdbacks on exercise of rights retained by Licensor: Those checked below for
the duration indicated thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
--------------
[ ] Pay Television Distribution Rights. Duration: N/A
--------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
--------------
[ ] Other: Duration: N/A
-------------------------------------- --------------
Holdbacks on exercise rights licensed herein: Those checked below, for the
duration indicate thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
--------------
[ ] Pay Television Distribution Rights. Duration: N/A
--------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
--------------
[ ] Other: Duration: N/A
-------------------------------------- --------------
Distributor's Release Obligations: TO BE MUTUALLY AGREED UPON ONE MONTH PRIOR TO
RELEASE.
Key Cities:
Minimum Initial Release: ____________ cities, including at least ______________
Key Cities, not later than ____ months after __________________________________
Minimum Initial Print Order: __________________________________________________
Minimum Advertising Expenditures: ______________ within ____________ months
after _________________________________________________________________________
Maximum Deductions For Advertising Expenditures: ______________________________
Initial order of materials: Distributor hereby orders at least the materials
described in the attached Schedule of Initial Order of Materials (which, if
attached, is incorporated herein by reference).
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
licensor Approvals (which, if attached, is incorporated herein by reference).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
Licensor shall remain sole owner of Italian Soundtracks.
INITIALS
/s/ RL
--------
/s/ AF
--------
<PAGE>
3
In consideration of the mutual covenants herein contained, the parties hereby
agree as follows:
I. LICENSE
1. LICENSE. Licensor hereby grants to Distributor, subject to payments
provided for in paragraph 4 below and to the due performance by Distributor of
its other obligations hereunder, and Distributor hereby accepts, a limited
license under the copyright of the Picture in and throughout the Territory, and
nowhere else, and only for the Term stated herein to (a) exercise the rights
licensed herein to the Picture on film in 30 mm (if available); 35 mm and 10 mm
gauge only, and (b) advertise and publicize the exploitation of the rights
licensed herein, all as provided in the Deal Terms and elsewhere herein
provided, however, that Distributor shall not itself, nor shall it permit others
to advertise, publicize, or exercise these rights licensed herein which are
subject to a holdback for the duration of such holdback, all as indicated in the
Deal Terms.
All rights of whatsoever kind and nature now or hereafter known which
are not specifically granted to Distributor herein are hereby expressly reserved
to Licensor for its unrestricted use and disposition, except that Licensor shall
not, and shall not authorize others to exploit in the Territory during the Term
the rights retained by Licensor which are subject to a holdback for the duration
indicated in the Deal Terms (although nothing herein shall prevent Licensor from
advertising, publicizing, and/or licensing or otherwise disposing of such rights
at anytime, subject only to such holdback on the exploration thereof).
Licensor hereby warrants and represents that it has the right to enter
into this Agreement and to grant to Distributor all of the rights and licenses
herein granted. Licensor makes no representations or warranties, express or
implied, except as specifically set forth in the preceding sentence.
Distributor hereby warrants and represents that it has the right to enter into
this Agreement.
2. TERRITORY. The Territory shall mean the country or countries listed
under the Deal Terms as its or their political boundaries exist on the date of
this Agreement, exclusive of non-contiguous colonies, possessions and similar
non-contiguous areas.
3. TERM.
(a) Distributor shall not permit the distribution or exhibition of the
Picture or the exercise of any other rights licensed herein beyond the
expiration date of the Term as specified in the Deal Terms.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Licensor shall have the right to terminate this Agreement if Licensor
(in its sole discretion), believes that the distribution or continued
distribution of the Picture hereunder might involve the creation or aggravation
of civil or criminal liability. Such termination shall be effective thirty (30)
days after Licensor gives notice thereof and Distributor shall cancel any
bookings contemplating exhibition of the Picture after the effective
termination date. Distributor shall include in each agreement for the
exhibition of the Picture a commensurate right of withdrawal and termination.
II. MINIMUM GUARANTEE AND DISPOSITION OF GROSS RECEIPTS
4. MINIMUM GUARANTEE. Distributor shall pay to Licensor the Minimum
Guarantee specified in the Deal Terms by paying to Licensor the percentages
thereof as and when specified above. Payment of that portion of the Minimum
Guarantee not paid concurrently with the execution of this Agreement, if any,
shall be secured by the security arrangements specified in the Deal Terms.
If a letter of credit specified as the security, then in addition to such
other conditions for it specified in the Deal Terms, it shall be an
irrevocable letter of credit in the form attached hereto, if any (which form,
if it is attached is incorporated herein by reference), and if no form is
attached, said letter of credit shall be in form and substance satisfactory
to Licensor and issued by a bank approved by a Licensor.
5. GROSS RECEIPTS. The terms "gross receipts" as used in this Agreement
shall mean:
(a) All gross monies and income of every kind (including, (without
limitation) any awards, subsidies or other governmental allowances) derived or
realized by Distributor and its Subsidiaries (as hereinafter defined) from the
lease, license, rental, dealing in and distribution of the Picture (including
trailers thereof, bill posters, lithographs and any other advertising
accessories) and the exercise of any rights granted to Distributor under this
Agreement and
(b) All monies, less only the reasonable direct out-of-pocket costs
actually paid by Distributor in obtaining same, derived or realized by
Distributor or its Subsidiaries by reason of the infringement or interference in
the Territory by third persons of or with the Picture of any parts thereof or
any rights granted to Distributor.
6. DISPOSITION OF GROSS RECEIPTS. Distributor may deduct and retain from
the gross receipts only the items permitted under Disposition of Gross Receipts
specified in the Deal Terms, and only in the sequence therein specified. For
such purpose, the terms used in the Deal Terms shall have the following
meanings:
(a) DISTRIBUTION EXPENSES. The direct out-of pocket costs (exclusive of
any overhead costs whatsoever and any discounts, rebates and other similar
allowances, however denominated), actually paid by Distributor for the following
items:
(i) Positive prints of the Picture and the trailers thereof.
(ii) Subject to the provisions of Paragraph 9, advertising and
publicity in connection with the distribution of the Picture, which shall not
exceed a sum to be agreed upon between Licensor and Distributor without the
prior written approval of Licensor.
(iii) Subtitling, dubbing, editing, and censorship fees and costs of
editing to meet censorship requirements to the extent such costs have been
approved by Licensor in advance, and to the extent made in conformity with
paragraphs 17 and 18 below.
(iv) Insurance premiums on prints, costs of packaging, pre-print
materials or other physical properties of the Picture.
(v) All taxes, however denominated, imposed or levied by any
jurisdiction in the Territory against Distributor, Licensor or the prints, pre-
print material or other physical properties of the Picture or based upon the
gross monies derived by Distributor or Licensor from the distribution and
exploitation of the Picture in the Territory, as more specifically described
in paragraph 12 (b) hereof; provided, however, that nothing herein contained
shall be deemed to permit Distributor to recoup hereunder any part of its net
income, corporate franchise, excess profits or any other similar tax or levy,
however denominated imposed on Distributor as a corporate entity as
distinguished from taxes imposed by reason of the distribution and exploitation
of the Picture.
(vi) All of the expenses described in this sub-paragraph (a) above
are recoupable only when and to the extent actually paid to third parties in
terms length transactions, and in no event shall include salaries of
Distributor's employees, or fees to any Distributor-Related Entity or any other
cost to Distributor or any such Distributor-Related Entity not directly
attributable solely to the distribution of the Picture. All such recoupable
expenses must be fully approved and consistent with good business practices for
distribution of motion pictures in the Territory.
(vii) All other expenses of any kind or nature and any unapproved
excess in the foregoing expenses shall be BORNE solely by Distributor and shall
be non recoupable.
(b) DISTRIBUTION FEE. Distributors distribution fee is the percentage
of gross receipts specified in the Deal Terms. It is understood and agreed that
Distributor's Subsidiaries or licensees shall not be entitled to charge
Distributor or Licensor a distribution fee in connection with licenses of the
Picture and their rights licensed herein by Distributor's Subsidiaries or
licensees.
<PAGE>
4
III DISTRIBUTOR'S RELEASE OBLIGATIONS
7. DISTRIBUTION POLICIES:
(a) It is the essence of this Agreement that Licensor shall be consulted on
an on-going basis with respect to all significant aspects of the distribution of
the Picture in the Territory, including without limitation, the advertising
budget release dates, release pattern, theaters in Key Cities, marketing
strategy
and any and all modifications and amendments to the foregoing.
(b) Distributors shall further:
(i) place the Picture in general theatrical release in not less than
that number of cities and Key Cities specified under "Minimum Initial Release"
in the Deal Terms, within the period therein provided.
(ii) Place the Minimum initial Paint Order specified in the Deal
Terms and shall use its best efforts to distribute the Picture throughout the
Territory
(iii) Maintain the Picture in continuous distribution throughout the
Territory for a period consistent with reasonable business judgement and
endeavor to contain the largest possible gross receipts from the distribution
and exploitation of the rights licensed herein.
(iv) accord the picture the fairest possible treatment and not
discriminate against the Picture in any fashion or use the Picture to secure
more advantageous terms for any other motion picture, product, or service.
8. EXHIBITION AGREEMENTS:
(a) The exhibition agreements for the Picture in the Territory shall be
made separate and independent from the exhibition agreements for any other
motion picture product or service. Distributor shall check and audit exhibition
engagements for the Picture consistent with the practice of first class
distributors in the Territory The results of such checking and auditing shall be
made freely available to Licensor and its representatives.
(b) The Picture shall in no event during the first run be exhibited
anywhere in the Territory on a flat license or 4- wall basis, or as out of a
double feature or other multiple feature engagement, unless all relevant terms
of each proposed agreement for such exhibition [including (without limitations)
the proposed allocation to the Picture of box office receipts, permitted
advertising costs, license fee, and film rentals] shall have been approved by
Licensor in writing in each instance. If the Picture is exhibited in any
theater together with any so-called "short subjects", not more than one percent
(1%) of the total exhibition receipts or Five Hundred Dollars ($500), whichever
is less, shall be allocated in the aggregated to such "short subjects" for that
exhibition run in that theater: provided, however, that any laws requiring a
different allocation shall be complied with and distributor shall inform
Licensor of such laws at the time this Agreement is entered into.
(c) As used herein a "control theater" shall mean a theater in which
distributor or any officer director or shareholder (owning 10% or more of the
outstanding stock or other equity) of Distributor shall have any interest,
directly or indirectly, in the operation thereof. Distributor shall not license
the Picture or rights connected therewith to a controlled theater except upon
terms and conditions which are consistent with those entered into by such
controlled theater for the exhibition of comparable motion pictures furnished by
non-related distributors.
9. ADVERTISING.
(a) GENERAL. Distributor shall advertise and publicize the Picture in
the Territory during the Term pursuant to the provisions of this Paragraph, and
in a manner designed to maximize the gross receipts payable to Licensor, in this
regard, Distributor agrees that within the period of time specified above for
such expenditures, it shall expend not less than the Minimum Advertising
Expenditures, if any, indicated in the Deal Terms for direct out-of-pocket costs
of preparing and placing advertisements of the Picture, exclusive of any value
added tax or similar taxes: any rebates, refunds, discounts or other amounts
paid back or credited back to Distributor in connection with such expenditures
shall be applied so as to reduce the amount of advertising expenditures which
Distributor will be considered to have expended. Any expenditures in excess of
the Maximum Deductions for Advertising Expenditures. If any, indicated in the
Deal Terms shall not be deducted under paragraph 6(a) without Licensor's prior
written approval. Any allocations of advertising expenditures between the
Picture and other motion pictures shall be made on a fair and reasonable basis,
with due regard to all relevant factors, including without limitation the
proportion of the advertising space that is devoted to the Picture, the relative
cost of such space, and the relative position, prominence and emphasis given to
the picture.
(b) ADVERTISING MATERIALS. Licensor shall supply Distributors such
advertising and publicity materials relating to the Picture as Distributors may
request to the extent that Licensor has such material readily available.
Distributors shall pay for such material and for all shipping or other expenses
in the currency specified by Licensor on or before delivery. Distributors shall
have the right, at its sole expense to make or cause to be made advertising
materials with respect to the Picture, provided that such advertising material
shall adhere in all respects to the billing and credits specified in Paragraph
14. Notwithstanding the foregoing, it is specifically understood that
Distributor's right to advertise the picture does not include any publication or
merchandising rights whatsoever.
IV. ACCOUNTING AND PAYMENT
10. KEEPING OF RECORDS.
(a) Distributors agrees to maintain the accurate and complete books and
records in the currency or currencies of the Territory of at Distributor's
transactions in connection with the picture and the exercise of the rights
licensed herein. All accountings by Distributors shall be on all rentals
invoiced, all cash collections and all reimbursable expenses advanced, both with
regard to gross receipts and permitted deductions therefrom, except that if any
exhibitor effects any offset against amounts due to Distributors for the Picture
or if Distributors permits any refund, rebate or other reduction of film rentals
(either directly or by permitting the cancellation of any exhibition agreement
or otherwise) without first securing Licensor's specific consent thereto, the
amount of such offset, refund, rebate or other reduction shall be shown as such
on statements to Licensor for the applicable period, and shall nonetheless be
included in gross receipt Distributors shall do all things necessary to maximize
collections from exhibitors and to do as quickly as is reasonably possible.
(b) For all purposes of this Agreement including (but not limited for
accounting for gross receipts deductions of distribution expenses, deduction of
distribution fees, payment and recoupment of the Minimum Guarantee. Submitting
statements keeping books and records and making any payments to Licensor
hereunder the Picture shall be treated as separate as separate and distinct from
all other motion pictures and all other products or services distributed by
Distributor.
(c) As in any other motion picture in which licensor has heretofore
granted or shall hereafter grant, any distribution rights to Distributors,
Distributor shall not be entitled to effect setorts or surpluses in the receipts
deriving from any such motion picture in connection with any claim which
Distributors may have, or believe it has against Licensor in respect of the
Picture. Similarly, any claim which Distributors may have, or believe it has,
against Licensor in respect of any motion picture other than the Picture may not
be settled under the terms of this Agreement or claimed by Distributor as
grounds for exercising a right of retention with respect to any monies, or other
material relating to the Picture.
<PAGE>
5
11. STATEMENTS; AUDIT RIGHTS.
(a) Distributors agrees to furnish to Licensor monthly for a period of
twenty-four (24) months from and after the initial release of the Picture
anywhere in the Territory, and thereafter quarterly, a detailed report regarding
the distribution of the Picture in the Territory. Each report hall be in
English language and shall contain such information, reported in any local
currency or currencies of the Territory, as is customary in the industry,
including (without limitation) detailed cumulative and current periodic
statements of the gross receipts, the permitted deductions therefrom, at other
expenses (regardless of whether deductible) incurred in connection with the
distribution of the Picture and any other information requested by Licensor.
Each such repair shall be furnished to Licensor within thirty (30) days after
the close of the period for which such report is made. Subject to the
provisions of paragraph 13. Distributors shall concurrently with the delivery
of each report pay to Licensor any sums to which it may be entitled. All sums
paid to Licensor pursue to this Agreement shall be sent to the address specified
above or to such other payee and/or address as Licensor may from time to tome
designate in writing.
(b) During the Term of this Agreement and thereafter for not less than
three (3) years (but in any event for so long as any dispute may be outstanding
with respect to any item, thing or transaction related to the Picture or to
Distributor's exercise of its rights hereunder), Licensor shall have the
absolute right through its representatives and accountants and at its own cost,
at all times during regular business hours to fully examine, except from and
copy all books, records, papers, correspondence contracts, vouchers, receipts
and all other data relating in any way, directly or indirectly , to the
distribution of the Picture and Distributor's exercise of its rights hereunder.
During the foregoing period, Distributor shall keep such data reasonable
available to Licensor in the event any audit reveals a sum owing to Licensor in
the event any audit reveals a sum awing to Licensor of five percent (5%) or more
of the sum shown to be payable to Licensor on the statement furnished by
Distributor for the month or quarter involved, then Distributor shall on demand,
also pay the fees and disbursement of Licensor's representatives and accountants
for the audit or examination in which the underpayment was discovered.
12. PAYMENT, REMITTANCES, AND CURRENCY EXCHANGE.
(a) As used herein, the words "payment" ,"pay" , "payable", "paid" or
words of similar meaning when applied to obligation o Distributor to Licensor
mean the actual, receipt by Licensor by the case payment was to have been made
in the amount and currency specified herein or by Licensor of either (i) cash,
(ii) a bank transfer of funds to Licensor's account unencumbered and immediately
withdrawable. (iii) the unconditional clearance of a check or bank draft drawn
on a United States bank. Or (iv) the DR down by Licensor of a previously
approved and existing letter of credit from a United States bank pursuant to the
terms thereof. Payment in any other manner shall not be deemed "paid" t
Licensor until the proper amount and currency are actually received and
available for expenditure by Licensor and Distributors taxes the risk that any
transfer of funds (whether due to the method of transfer failure to obtain
necessary permits or otherwise) will not be so received by Licensor within the
time periods herein required for particular payments.
(b) Distributors shall timely obtain all governmental permits necessary
to make all payments to Licensor as and when required under this Agreement
including the Minimum Guarantee. Distributor shall also pay without limitation
any tax, levy or charge, however denominated, imposed or levied by any
jurisdiction in the Territory against Distributor, Licensor, or the Picture
(excluding only taxes based on Licensor's net income), including (without
limitation quotas value added taxes, so called "remittance" and similar taxes,
licenses, contingents, turnover taxes, import permits and duties, and national,
state, county, city or other taxes, however denominated, relating to or imposed
upon the Minimum Guarantee or any part thereof, any other amounts payable to
Licensor, film rentals, negatives, prints or other material, or the right or
privilege to use the same in connection with the Picture. It is the intent
hereof that the Minimum Guarantee and any other amounts payable to Licensor
shall be net amounts, free and clear of any tax, levy or charge of whatsoever
kind or nature however denominated, and if Distributor claims it is required to
deduct any taxes or other sums from any such amounts, Distributor shall present
the original government receipt showing the amount paid and deducted. Any tax
levy or other tax paid by Distributor pursuant to this Paragraph shall be
deemed paid on Licensor's behalf and Licensor shall have the right to treat such
payments for all purposes as payments made solely by Licensor. Distributor may,
after presentation to Licensor of the original government receipt indicating
that any of the foregoing taxes have been duly paid recoup the same as a
distribution expense from subsequent sums payable to Licensor hereunder.
(c) Unless specified otherwise in any Schedule of Additional Currency
Remittance provisions attached hereto which Schedule, if attached, is
incorporated herein by reference the following currency conversion provisions
shall apply.
(i) Any and all amounts paid or payable hereunder shall be paid in
the currency specified herein regarding of the currency of the Territory and
Distributors shall make whatever conversion necessary to make such payment.
(ii) As to amounts payable to Licensor not expressed in a
particular currency Distributor shall convert such amounts from the currency a
which they were originally earned directly into United States dollars (or such
other currency as Licensor may from time to time designate in writing at the
rate of exchange prevailing at Chase Manhattan Bank in New York City at the
close of the accounting period for which Distributor was obligated to accounting
to Licensor hereunder for such earnings.
(iii) The Minimum Guarantee shall be recouped as, I and when the
United States dollars otherwise remittable to Licensor equal the amount of the
Minimum Guarantee.
All costs of currency conversion including (without limitation remittance and
withholding taxes, banking charges permit fees and transmittal costs shall be
the sole responsibility of Distributor and shall not reduce the amounts due
Licensor hereunder.
(d) Any sums payable to Licensor under this Agreement which are not
paid when due shall bear interest from the due date until the date of payment at
a rate per annum two percent (2%) higher than the prime rate charged from time
to time by Chase Manhattan Bank in New York. The foregoing interest payments
shall be in addition to any other rights Licensor may have hereunder or at law.
13. BLOCKED FUNDS, in the event that Distributors shall be prohibited or
restricted from making payment of any monies at the time when same are due and
payable to Licensor hereunder by reason of the laws of currency regulations
within the Territory. Distributors shall promptly so advise Licensor in writing
Distributors shall , upon Licensor's request deposit any such blocked funds to
the credit of Licensor in a bank or banks or other depository in the Territory
designated in writing by Licensor or pay them promptly to such persons or
activities as Licensor may designate in writing.
V. CREDITS
14. Licensor shall have the right to pre-approve all advertising and
publicity Distributor uses with respect to the Picture Distributor shall
strictly adhere to the credit schedule supplied by Licensor in the main and/or
and titles of the Picture and in all advertising and publicity with respect
thereto. If Licensor does not provide such a credit schedule, then Distributor
must demand same from Licensor in writing before preparing any advertising or
publicity for the Picture. The require credits are herein after elected loss
credits.
Provided Distributor complies with and ADVISES by the credits Licensor
shall indemnify and hold Distributor harmless from any claim, loss, damage or
expense including reasonable legal fees and expenses arising as result of the
giving of such credits on the screen or in advertising issued by or under
Distributor's control. Distributor shall indemnify and hold Licensor harmless
from any claim loss from any claim loss damage or expense (including reasonable
legal fees and expenses) arising out of any errors or omissions in the giving of
credits on the screen or in advertising issued by or under Distributor's
control, or any failure by Distributor to adhere to and observe the credits it
Distributor's may aware of any violation of its credits obligation. It shall
correct all such violations in the future outgoing such shall not be deemed a
cure of any previous breach, nor an election of remedies by Licensor.
Distributor shall have the right but not the obligation to include in the
main and end titles of the Picture and in all advertising and publicity material
for the Picture, in a manner which is not inconsistent with other credits for
the Picture the words "Distributed by (name of Distributor)", or a similar
indication of Distributor's function.
Distributor shall not make or permit to be made in any advertising,
publicity or otherwise, any statements which directly or indirectly, expressly
or by implication, constitute or may be understood to be an endorsement of any
product, article, or service by Licensor or anyone else associated with the
Picture. Any advertising or publicity referring to such person shall be limited
to indicated that such person appears in or rendered services in connection with
the Picture.
<PAGE>
6
DELIVERY RETURN OF MATERIALS
15. DELIVERY. Delivery of the Picture to Distributor shall be accomplished
in the manner hereinafter set forth:
(a) Within thirty (30) days after Licensor gives notice to Distributor
that Licensor is prepared to deliver the Picture. Distributor shall send to
Licensor a written order for whatever number of prints or quantity of pre-print
materials, advertising materials, accessories, and trailers relating to the
Picture (which together with the Initial Order of Materials described above, are
referred to as "Initial Materials") Distributor may require subject to the
written approval of Licensor. Licensor will send to Distributor a pro forma
invoice setting forth the cost. F.O.B. place of shipment of the Initial
Material and Distributor shall pay such cost to Licensor in the currency
invoiced. Promptly after receipt of such payment, Licensor shall deliver the
Initial Materials to Distributor in the manner provided in paragraph (b) hereof.
(b) Delivery of the Picture for all purposes hereunder shall consists
of sending Distributor either (1) written notice that one or more release print
are available to it or (2) a laboratory access letter in substantially the form
attached hereto and incorporated herein by reference (the "Laboratory Access
Letter') signed by a laboratory having possession or release prints or pre-print
material. It shall be in Licensor sole discretion to elect either (1) or (2)
above.
(c) If any interpositives, interrogatives, soundtracks or any other
materials (including dubbed or subtitled materials) required for the manufacture
of prints (collectively the "Printing Materials") constitute or are induced
among the materials shipped to Distributor or manufactured by or on behalf of
Distributor , then prior to shipment of any Printing Materials to the
laboratory, Distributor shall supply Licensor with a written agreement from the
laboratory in substantially the form of the Laboratory Access Letter.
(d) Licensor shall designate the laboratory in its sole discretion and
may change the laboratory at any time, so long as is furnishes Distributor with
a signed Laboratory Access Letter from any new laboratories.
(e) With respect to all prints of the Picture . The Initial Materials.
The Printing Materials, advertising accessories and all other material relating
to the Picture which shall be procure by distributor which shall be delivered to
Distributor or to the laboratory pursuant to this agreement, Distributor shall
have all cost and expenses in connection with the shipping, transportation and
delivery of such material to Distributor or to the laboratory and the entry into
their Territory, including (without limitation) customs duties, packing,
forwarding and shipping charges, the cost of fees cans and containers brokerage
fees, consular fees, censorship fees and forwarding insurance.
16. RETURN OF MATERIALS. Upon expiration of the Term or earlier
termination of this Agreement Distributor shall at Distributor's sole cost and
expense return to Licensor at such location as Licensor shall designate (or
Licensor fails to designate any location to the address specified above)
(a) All prints and preprint material in their original feels, cans or
containers, in as good condition as when delivered, subject to reasonable wear
and tear.
(b) All dubbed soundtracks, sub-titled or sub-titling material, and all
optical and/or magnetic soundtracks, and/or positive prints of the Picture
containing optical and/or magnetic soundtracks, which were manufactured by, for
or at the instance of Distributor, whether or not any or said tracks, materials
or positive prints are actually used by Distributor in connection with the
exercise of the rights licensed hereunder: and
(c) All other material which was delivered or prepared hereunder.
Notwithstanding the foregoing. Licensor (in its sole discretion may require
that all or any portion of the aforementioned materials or parts thereof be
destroyed at Distributor's sole cost and under the supervision of a person
designated by Licensor, and in such event the Distributor shall deliver to
Licensor a duly authenticated certificate of destruction thereof. In the event
of any loss, theft or destruction of any print of the Picture or any trailer
thereof during the term, Distributor shall furnish Licensor with certification
of such loss, theft or destruction within thirty (30) days after any such event.
VII. CUTTING ALTERING
17. CUTTING AND ALTERING. The Picture and any trailers supplied by
Licensor shall be exhibited in their original continuity, without change,
alteration, interpolation, cut or elimination. Notwithstanding the foregoing
sentence, and subject to third party consultation, editing, or approval rights
of which Licensor has informed Distributor, Distributor may edit the Picture for
the following purposes only:
(a) To add a foreign language title, which title shall be subject to
the approval of Licensor
(b) Dubbing or subtitling as provided for in Paragraphs 17 and 18
hereof:
(c) Changes required to secure approval by duly autherized censorship
authorities, if, as, and to the extent permitted pursuant to this Agreement; and
(d) Changes required to secure approval by duly authorized censorship
authorities, if as, and to the extent permitted pursuant to this Agreement: and
the original tenor and purpose of the Picture, and provided further that
Distributor shall consult with Licensor about any significant editing of or
changes to the television version of the Picture. In no event may any credit,
trademark, trade name, symbol or copyright notice be eliminated or altered. All
cuts and other alterations shall be made and restore at Distributor's sole cost
and expense.
18. FOREIGN LANGUAGE VERSIONS.
(a) Distributor may make foreign language versions of the Picture,
dubbed or subtitled, all at Distributor's sole cost and expense (subject to
recoupment of same as a distribution expense. Distributor shall consult with
Licensor and abide by Licensor's instructions in connection with the cost and
preparation of dubbed and/or subtitled versions of the Picture, in any event,
Distributor shall strictly conform to all relevant restrictions applicable to
artists and other third parties of which Licensor shall advise Distributor.
Distributor shall indemnify and hold Licensor harmless from any claims, loss,
damage, or expense including reasonable legal fees and expenses) arising out of
or in connection with the dubbing or subtitling of the Picture.
(b) At all times, Licensor shall have access, without cost to:
(i) any subtitled subtitling material including main and end title
credits and any dubbed or dubbing material, of whatever character, which
Distributor may cause to be made or created with respect of the Picture or any
trailer thereof:
(ii) any edited versions of the Picture or any trailer thereof
which Distributor may cause to be made or created: and
(iii) any trailers of the Picture which Distributor may cause to be
created.
Distributor agrees to maintain printing or recording masters of all such
versions or materials during and after the Term of this Agreement at
Distributor's cost. Licensor may at its own cost and expense make for its own
use from any of the foregoing material such dupe negatives, fine grain prints,
magnetic soundtracks and other material of any character as Licensor may deem
appropriate Licensor shall also have the right to order from Distributor at the
cost charged by the laboratory for reproducing same release prints and trailers
of the Picture in such dubbed and/or subtitled and/or edited versions as
Distributor may have made or caused to be made. Licensor shall also have the
right to order from Distributor all trailers of the Picture which have been
substantially created by Distributor at a fee to be negotiated in good faith.
Distributor shall execute and deliver to Licensor at the time any of the
foregoing material is created, access letters to the applicable film and sound
laboratories in substantially the for of the Laboratory Access Letter.
(c) During the Term and thereafter if Licensor so requests, Distributor
shall cause the applicable sound laboratory(ies) to store the original dubbed
magnetic soundtracks of the Picture and any trailers thereof which storage shall
be at Distributor's sole cost and expense
VIII. OWNERSHIP INFRINGEMENT
19. LEGAL TITLE. Legal title to all prints, pre-print material and other
material provided to Distributor hereunder shall at all times remain in Licensor
or in the party or parties from whom Licensor obtains the rights herein licensed
to Distributor. and legal title in and to any material, including, without
limitation, dubbed or subtitled prints and/or pre-print material created by, for
or at the instance of Distributor, and all rights (including copyrights) therein
shall vest in Licensor upon the creation thereof, subject only to possession and
control thereof by Distributor during the Term solely for the purpose of
exercise of the rights licensed herein. The goodwill pertaining to the Picture,
the characters and the names of the characters and the name of Licensor shall
execute, acknowledge and deliver to Licensor any instruments of transfer,
conveyance or assignment in or to any such material deemed by Licensor alone or
in a combination of other words, and the tradename or trademark or other
identification of Licensor shall belong exclusively to Licensor. Distributor
shall execute, acknowledge and deliver to Licensor any instruments of transfer,
conveyance or assignment in or to any such material deemed by Licensor necessary
of desirable to evidence or effectuate Licensor's ownership thereof and in the
event that Distributor fails or refuses to execute, acknowledge or deliver any
such instrument or documents upon ten (10) days written notice, then Licensor
shall be, and Distributor hereby irrevocably nominates, constitutes and appoints
Licensor as its true and lawful attorney in fact to execute and deliver all such
instruments and documents in Distributor's name or other wise, if being
acknowledged that such power is a power coupled with an interest. If requested
by Licensor in writing, Distributor will notify Licensor in writing within
thirty (30) days following the close of each month during the Term of this
Agreement of the location of all prints delivered or utilized hereunder. Except
as other wise expressly provided herein. Distributor will not make copies or
prints or pre-print material or permit others to do so, nor shall Distributor
permit any prints or pre-print material to be removed from Territory.
<PAGE>
7
20. COPYRIGHT; INFRINGEMENT.
(a) Distributor shall take all steps and pay any and all fees necessary
to protect the Picture and prints delivered or manufactured hereunder by
copyright in the Territory, such copyright to be taken in the name of Licensor
or as Licensor shall designate, and to renew or extend such copyright.
(b) Distributor shall promptly take all reasonable legal steps
necessary (subject to Licensor's prior approval with regard to the institution
of any legal proceeding) to protect the interests of both parties and to obtain
redress and to restrain anyone from unauthorized exhibition of the Picture or
duplication of any print or the doing of any act which infringes upon the
Picture, the prints, any Printing Materials or any advertising materials or the
copyrights or trademarks therein. Licensor shall be free to participate in such
action using counsel of its choice, at Licensor's expense provided that
Licensor's expenses thereof shall be repaid to Licensor out of any recovery in
such action, pari passu with Distributor's expenses therein. If Distributor
shall not be obligated to, or shall fail or refuse to take any of the foregoing
actions, then, in addition to any other rights Licensor shall have hereunder or
at law, Licensor may (but shall not be obligated to) do so, in Licensor's and/or
Distributor's name. Any recovery from such action undertaken by Licensor shall
be paid to Licensor. Any net loss from such action shall be treated as a
distribution expense of the Picture under this Agreement.
(c) Distributor agrees that Licensor shall not be responsible for any
unauthorized prints of the Picture or any trailers thereof which may appear in
the Territory.
(d) Distributor shall notify Licensor in writing of the occurrence of
any event relation to the provisions of the Paragraph and all actions taken with
regard thereto.
(e) Distributor agrees to submit to Licensor in writing any change of
title of the Picture that Distributor wants to use. Licensor shall promptly,
either approve or disapprove any such change of title of the Picture by
Distributor and if Licensor so disapproves, Distributor shall not use such
change of title of the Picture by Distributor and if Licensor so disapproves.
Distributor shall not use such change of title of the Picture. Distributor
shall indemnify Licensor against any and all damage, costs and expenses,
including attorney' fees, and shall relieve Licensor of all liability in
connection with any claim or action respecting any change of title of the
Picture by Distributor approved by Licensor.
21. MUSIC PERFORMANCES FEES. Distributor shall pay all royalties or
license fees to any performing rights society for the public performance in the
Territory of music recorded in the Picture. The rights licensed hereunder are
subject in all respects to all rights of composers, authors, music publishers,
and performing rights societies with respect to the performance of the music
synchronized with the Picture and Distributor shall not permit or authorize any
exhibition of the Picture under such circumstances or in such places as may
constitute an infringement of any performance rights in any music synchronized
with the Picture.
22. DEFINITIONS. As used herein the following terms shall have the
following meanings:
(a) THE "PICTURE": The "Picture" is individually and collectively the
motion picture photoplay(s) listed in Schedule A attached hereto and
incorporated herein by this reference, but only in the language or languages
specified in Schedule A.
(b) "VIDEO DEVICE": "Video Device" means a videocassette embodying the
Picture which is sold or rented to the public for home us only by means of a
playback device directly connected to or forming an integral part of a
television receiver or device.
(c) "MASTER"": "Master" means material of a first class technical
quality from which duplicated Masters ("Sub-Masters"), suitable for use in the
manufacture of Video Devices, can be made.
23. Grant of Rights.
(a) Subject to the limitations, terms and conditions set forth in this
Agreement, Owner hereby grants to Licensee the exclusive right, license and
privilege throughout the Territory during the Term to manufacture Video Devices
and to sell, rent, advertise and otherwise market such Video Devices to retailer
and the public for private home use only. Licensee shall not permit any Video
Devices sold or rented by Licensee to be exported out of the Territory.
(b) Licensee may dub and/or subtitle the Picture (but only in the
language or languages set forth in Schedule A); provided that neither Licensee
nor any of its licensees shall: (i) otherwise edit the Picture in any manner,
including, without limitation, changing the title of the Picture, without
Owner's prior written consent: (ii) alter or delete any credit, logo or
copyright notice appearing on the Picture; or (iii) include any other motion
picture or other material (including advertisements or commercial material) on
the Video Device.
(c) To the extent of Owner's rights therein, Licensee shall have the
right to use and authorize others to use the name, physical likeness (whether by
photograph or otherwise) and voice of any person who appears recognizably in the
Picture, solely for the purpose of advertising, publicizing or exploiting Video
Devices of the Picture; provided that:
(i) Licensee shall, and shall cause its licensees to, strictly
abide by all relevant restrictions imposed upon Owner with respect to the use of
any person's name likeness and/or voice pursuant to this subparagraph 2(c); and
(ii) The name, likeness and/or voice of any person shall not be
used as a direct or indirect endorsement of any product, services or commodity.
(d) Notwithstanding anything to the contrary contained herein, the
rights granted to Licensee hereunder do not include the right to use or permit
the use of any Video Devices for viewing in any place of public assembly where
an admission fee or viewing fee is charged, for broadcast by television or
cable, whether free or pay, for theatrical exhibition, or for broadcast or
exhibition in hotels, military camps and installations, embassies, prisons,
busses, oil rigs, aircraft, ships, educational institutions, hospitals or by
other so-called "non-standard" or "non-theatrical" means, now known or hereafter
devised.
(e) All rights to the Picture which have not been granted to Licensee
pursuant to Paragraph 2(a) above are hereby expressly reserved to Owner and
Owner shall be entitled to exercise, exploit and/or dispose of any such reserved
rights throughout the world (including without limitation in the Territory; at
any time without prior notice or any obligation to Licensee whatsoever.
24. OBLIGATIONS OF LICENSEE.
(a) Licensee shall use its best efforts, skill and ability in the
manufacture, distribution, marketing and other exploitation of Video Devices
hereunder.
(b) Licensee shall strictly comply with all contractual requirements
for advertising credit to persons who rendered services or furnished materials
in connection with the Picture of which Owner notifies Licensee.
(c) Licensee shall include on the Picture (if not already thereon), the
Video Devices and the packaging thereof: (i) the name and logo of Owner or
Owner's designee in a size and location specified by Owner: and (ii) the
following statement and copyright notice (the year of copyright for each Picture
being set forth in Schedule A):
"LICENSED BY ___________________"
"-C- _______________, 19________, All Rights Reserved"
<PAGE>
8
Licensee may also include its name and logo on the Video Devices and the
packaging thereof, but only in a size of type no larger than seventy-five
percent (75%) of the size of type used to display Owner's name and logo, and
only in a location approved by Owner in writing.
Licensee shall also include on the Picture (in the very beginning of the
Picture), the Video Devices and the packaging thereof, the packaging thereof,
the following legend in prominent type and in the language specified in Schedule
A.
"WARNING: FOR PRIVATE HOME USE ONLY ANY UNAUTHORIZED COPYING, HIRING,
LENDING OR PUBLIC PERFORMANCE OF THIS PROGRAM IS PROHIBITED BY LAW,
VIOLATORS WILL BE SUBJECT TO PROSECUTION."
(d) Licensee shall be solely responsible for all manufacturing,
distributing, marketing, advertising and all other cost incident to the
exploitation of the rights granted hereunder.
25. PAYMENTS.
(a) Licensee shall timely obtain all governmental permits necessary to
make all payments to Owner as and when required under this Agreement
Notwithstanding anything to the contrary contained herein, there shall be no
deductions whatsoever from the Advance or any other payments made to Owner
hereunder on account of bank charges, withholding or remittance taxes (however
denominated), conversion taxes or for any other reason, it being the intent
hereof that the Advance and any other amounts payable to Owner hereunder shall
be net amounts, free and clear of any tax, levy or charge whatsoever.
(b) Licensee shall submit to Owner a statement setting forth in detail
the computation of royalties earned during the preceding accounting period,
including, without limitation, the number of Video Devices sold or rented during
such period, the price of each Video Device sold or rented and the royalty per
Video Device. Each statement shall be accompanied by payment of the royalties
due and payable in accordance with this Agreement. Said statements shall be
rendered on the first day of each month with respect to the monthly period
ending thirty (30) days prior thereto, except that subsequent to the first two
(2) years of the Term, said statements shall be rendered within thirty (30) days
following the last day of March, June, September and December of each year with
respect to the immediately preceding calendar quarter. Timely payment by
Licensee is the essence of this Agreement. Interest at a rate equal to the
lesser of twenty percent (20%) per annum or the highest rate permissible under
the laws of the State of California shall accrue on any amount due and not paid
hereunder, calculated from and after the date upon which such amount was due
until the date of payment.
(c) Royalties shall be computed in the national currency of the
Territory and shall be paid to Owner in United States Dollars at the rate of
exchange prevailing at Chase Manhattan Bank in New York City on the last day of
business of the applicable quarterly accounting period: provided, that if such
royalties shall not be paid within the time period provided in subparagraph 6(b)
above, such royalties shall be paid at the highest rate of exchange prevailing
between the due date and the date of payment.
(d) Licensee shall keep true and accurate books and records of sales
and rentals of Video Devices hereunder. Owner shall have the right from time to
time to audit and make extracts of the books and records of Licensee, its
subsidiaries, affiliates and licensees, wherever the same may be located,
insofar as said books or records pertain to the manufacture, sale or rental of
Video Devices hereunder. Any such audit shall take place upon not less than
seven (7) days advance written notice, during normal business hours of normal
business days and at reasonable intervals. Any such audit shall take place upon
not less than seven (7) days advance written notice, during normal business
hours of normal business days and at reasonable intervals. And such audit shall
be at Owner's expense unless a discrepancy in the amount of ten percent (10%) or
more is discovered, in which event Licensee shall bear the cost of such audit.
In the vent that the calculation of royalties hereunder is determined by a
computer based system, than the "books of records" of Licensee shall include,
without limitation, the machine sensible data (e.g. punch cards, magnetic tapes,
discs, etc.) utilized by such system and the related documentation describing
such system.
26. MUSIC SYNCHRONIZATION AND PERFORMANCE FEES. The rights granted to
Licensee under this Agreement are subject in all respects to the rights of
composers, authors, music publishers and performing rights societies of all
music embodied in the Picture and licensee shall pay any and all applicable
royalties or license fees to any and all such persons and organizations arising
out of the manufacture and/or exploitation of Video Devices in the Territory.
27. EFFECT OF EXPIRATION OR TERMINATION. Upon the expiration or
termination of the Term of this Agreement, for whatever reason, Licensee and its
licensees shall immediately cease all manufacturing of Video Devices, and all
material in Licensee's possession or control used in the manufacture of Video
Devices (including, but not limited to, Masters and Sub-Masters) and all Video
Devices in Licensees possession or control shall promptly, at the option of
Owner and upon its written instructions, either:
(i) be shipped by Licensee to Owner or Owner's designee, at Owner's
cost; or
(ii) be destroyed by Licensee under the supervision of Owner or Owner's
designee, or Owner's written request, destroyed by Licensee without such
supervision, provide Licensee provides Owner with an affidavit of such fact,
sworn to by a principal officer of Licensee.
Licensee shall not manufacture or permit the manufacture of a greater number of
Video Devices during the last six (6) months of the Term than were manufactured
during the immediately preceding six (6) months of the Term.
28. Protection of Video Devices. Licensee shall take all steps and pay
any and all fees necessary to protect the copyright in the Picture and the Video
Devices, and all material manufactured or delivered hereunder, in the Territory,
and, if applicable, to renew or extend such copyright. Licensee shall promptly
take all reasonable legal steps necessary (subject to Owner's prior approval
with respect to the institution of any legal proceeding). To protect the
interests of Owner and Licensee in the Picture and the Video Devices, and to
obtain redress and restrain any third party from any authorized use of the
Picture or Video Devices or from the duplication of any print or the doing of
any act which infringes upon the Picture or any materials manufactured or
delivered hereunder. Owner shall be free to participate in such action using
counsel of its own choice, at Owner's expense provided that Owner's expenses
thereof shall be repaid to Owner out of any recovery from such action, pari
passu with the repayment to Licensee of its expenses. If Licensee shall fail or
refuse to take any of the foregoing actions, then, in addition to any of the
rights which Owner shall have hereunder or at law or in equity, Owner may (but
shall not be obligated to) take such action n Owner's and/or Licensee's name in
which event any recovery from such acting undertaken by Owner shall be the sole
property of Owner, Licensee shall notify Owner in writing of the occurrence of
any event relating to the provisions of this paragraph and all actions taken
with regard thereto.
<PAGE>
9
IX. BREACH: TERMINATION
29. BREACH. Any of the following occurrences shall constitute a material
breach of this Agreement by Distributor and at any time after the occurrence
thereof (or of any other material breach hereof) Licensor shall have the right
to terminate this Agreement, effective immediately upon sending notice to such
effect to Distributor, without refunding or rebating any amounts whatsoever to
Distributor (Licensor being entitled to retain such amounts by way of partial
liquidated damages):
(a) Any failure to pay any sum due Licensor as and when required
hereunder, it being agreed that time is of the essence with regard to all
payments:
(b) Distributor's failure to order and pay for the Initial Material
when and as called for in Paragraph 15 above.
(c) The shipment or transportation of any print. Printing Materials or
other materials relating to the Picture outside the Territory either by
Distributor or by any other person with the knowledge, consent or through the
negligence of Distributor, without Licensor's written authorization:
(d) Any failure on the part of Distributor to comply with Distributor's
Release Obligations as set forth in Section III above.
(e) The reproduction or copying without Licensor's written
authorization of any print or Printing Materials of the Picture either by
Distributor by any other person with the knowledge, consent or through the
negligence of Distributor:
(f) Distributor's ceasing to engage in the business of motion picture
distribution for a continuous period of thirty (30) days:
(g) Any substantial change in the ownership or control of Distributor,
or the dissolution, merger or consolidation of Distributor, without Licensor's
written consent.
(h) The entry by any party of any final judgment against Distributor
which shall remain unsatisfied or unstayed for a period of thirty (30) days:
(i) The filing of any voluntary or involuntary petition in bankruptcy
or institution of any other insolvency proceeding by or against Distributor,
which is not dismissed within thirty (30) days:
(j) The appointment of a trustee, receiver or similar official for a
substantial portion of Distributor's assets, which appointment is not discharged
or vacated within thirty (30) days:
(k) Distributor's making of a general assignment for the benefit of
creditors: or
(l) Distributor's failure within ten (10) days after demand by Licensor
to remedy completely any other act or failure constituting a breach of this
Agreement.
A material breach of this Agreement may be treated by Licensor as a material
breach under all other licenses and agreements between Licensor and Distributor,
and shall entitle Licensor, at its option, to terminate any or all of same.
30. TERMINATION. Upon the termination of this Agreement by Licensor for any
reason, all rights of Distributor hereunder shall terminate and, except as
specifically provided in this Agreement to the contrary, Licensor shall have the
right to collect and retain for Licensor's own account all monies due or to
become due to Distributor under any license or agreement theretofore made by
Distributor with respect to the exhibition, distribution or other exploitation
of the Picture, all such licenses and agreements, and all monies payable
thereunder, being automatically assigned to Licensor in such event. Distributor
shall execute, acknowledge and deliver to Licensor any and all further
assignments and instruments deemed by Licensor necessary or desirable to
evidence or effectuate such assignment and, in the event that Distributor fails
or refuses to execute, acknowledge or deliver to licensor any such assignments
or instruments upon then (10) days written notice, then Licensor shall be, and
Distributor hereby irrevocably nominates, constitutes and appoints Licensor as
Distributor's true and lawful attorney-in-fact to execute and deliver all such
assignments and instruments in Distributor's name or otherwise, it being
acknowledged that such power is a power coupled with an interest. Further, in
the event of termination hereof Distributor shall comply fully with Licensor's
instructions and with the provisions of Paragraph 16 above in connection with
the redelivery of all materials relating to the Picture. Licensor shall continue
to be entitled, notwithstanding termination of this agreement, to incur and to
recover from Distributor reasonable legal and/or collection agency fees and
expenses in order to enforce the provisions of this Agreement Licensor may
exercise any of the rights herein provided in addition to and without prejudice
to any other rights or remedies Licensor may have against Distributor under this
Agreement or at law or in equity.
31. FORCE MAJEURE
(a) Should the production or delivery of the Picture be hampered,
interrupted or interfered with by reason of fire, flood, casualty , lockout,
strike, labor condition, unavoidable accident, national calamity, mechanical or
other breakdown of electrical or sound equipment, failure or delay on the part
of any laboratory or supplier, delay in or lack of transportation, export
embargo, riot, war, civil commotion, act of God, the act of any legally
constituted authority or by any other cause or causes (whether similar or
dissimilar to the foregoing) beyond the reasonable control of Licensor. then
Licensor'' obligations in respect of the Picture shall be suspended during the
period or occurrence of such event, and Distributor shall not be entitled to
claim damages from Licensor or to cancel this Agreement.
(b) Furthermore. Licensor shall not be liable for any failure,
misfeasanse, malfeasance or non-feasance or any carrier, transportation agency,
laboratory or any other persons, firms or corporations, or for any causes not
within the reasonable control of Licensor, or for any action, omission or delay
not directly due to the negligence or default of Licensor or its authorized
employees. In any of such events. Licensor shall be discharge from any liability
whatsoever and any and all claims arising therefrom are hereby expressly waived
by distributor.
(c) notwithstanding anything in this Agreement to the contrary, in no
event shall Licensor be liable for lost profits or consequential damages of any
kind, whether or not Licensor is advised of the possibility of such damages and
whether or not any or all of such damages are attributable to Licensor's acts or
omissions.
<PAGE>
10
32. INDEMNITY. Distributor shall upon Licensor's request at any time or
times during or after the term of this Agreement. indemnify Licensor, its
officers, directors, agents, employees, parents. Subsidiaries, affiliates,
successors, and assigns and hold it and each of them harmless from and against
any claim, loss, damage or expense ( including reasonable legal fees and
expenses) arising out of or in connection with any breach by Distributor of any
covenant, agreement, representation or warranty made in this Agreement or any
agreement, act or omission of Distributor, its Subsidiaries, affiliates,
successors or assigns, or the officers, directors, agents or employees of the
foregoing relating to the advertising, distribution or exhibition of the Picture
(including trailers thereof and advertising accessories.)
X. ASSIGNMENT
33. ASSIGNMENT. Licensor may freely, at any time or times, assign this
Agreement or all or any portion of Licensor's rights or obligations hereunder.
Neither the license herein granted to Distributor nor this Agreement may be
assigned, sublicensed, sold or otherwise disposed of by distributor, in whole or
in part either voluntarily or by operation of law, without the written consent
of Licensor, It being agreed that the Picture shall be distributed only by
Distributor or its Subsidiaries throughout the Territory. Any attempted or
purported assignment or other disposition by distributor in violation of this
providing shall be null and void and of no force or effect: As used herein, a
"Subsidiary" shall mean any entity in which Distributor, or any officer,
director, shareholder., or employee of Distributor, owning ten percent (10%) or
more of the outstanding stock or other equity of Distributor, shall have any
interest, directly or indirectly in the operation thereof.
XI. GENERAL CONDITIONS
34. NO JOINT VENTURE. Nothing in this Agreement shall be construed to
create or evidence a joint venture, partnership or agency relationship between
the parties hereto Neither party shall hold itself out contrary to the terms of
this Paragraph and neither party shall become liable by any representation,
acts, or omissions of the other. This Agreement is not for the benefit of any
third party and shall not be deemed to create or evidence any right or remedy of
any such third party, whether referred to herein or not.
35. NO WAIVER. No waiver by either party hereto of any breach of any
provision of this Agreement shall be deemed to be a waiver of (i) any preceding
or succeeding breach of the same provision or (ii) any breach of any other
provision of this Agreement, and no waiver shall be effective unless made in
writing and then only to the extent specifically set forth. The exercise of any
rights granted to either party hereunder shall not operate as a waiver of any
default or breach on the part of the other party hereto. Each and all of the
several rights and remedies of the parties hereunder shall be construed as
cumulative and no one of them as exclusive of the others or of any right or
priority allowed by law.
36. SEVERABILITY. Nothing in this Agreement shall be construed so as to
require the commission of any act contrary to law. and wherever there is any
conflict between any provisions of this Agreement and any statue, law or
ordinance, contrary to which the parties have no legal right to contract. the
latter shall prevail, bin in such event the provision of this Agreement affected
shall be curtailed and limited only to the extent necessary to bring it within
the legal requirements.
37. CAPTIONS. Captions and paragraph headings contained in this Agreement
are for convenience only and shall not be considered for any purpose in
interpreting or construing this Agreement.
38. ARBITRATION: APPLICABLE LAW: SERVICE OF PROCESS. This Agreement is
entered into pursuant to the laws of the State of California and shall be
interpreted in accordance with the laws applicable to agreements entered into
and wholly performed therein. Any controversy or claim arising out of or
relating to this Agreement or the validity, construction or performance of this
agreement, or the breach thereof, shall be resolved by arbitration in accordance
with rules and procedures of the American film Marketing Association ("AFMA") as
such may be amended from time to time, which rules and procedures are
incorporated into and made a part of this Agreement by reference. The parties
agree to abide by and perform in accordance with any award rendered by the
arbitrator in such arbitration proceedings and that judgements of a court having
jurisdiction may be entered upon such award. In the event such rules and
procedures of AFMA do not exist at the time such claim arises, Distributor
hereby consents to the jurisdiction of the State and Federal Courts in the
County of Los Angeles, California and Distributor hereby irrevocable appoints
__________________________ of Los Angeles, California or the Secretary of State
of the State of California as its agent to receive service of process in
connection with any action between Licensor and Distributor arising out this
Agreement which is brought by Licensor in a State or Federal Court in
California. In the event the blank space in this Paragraph is not filled in.
Distributor shall be deemed to have appointed the Secretary of the State of
California and its said agent.
39. MODIFICATION. This Agreement including all Schedules and any other
exhibits or attachments made a part hereof, is complete and constitutes the
entire agreement between the parties regarding the subject matter hereof, all
prior understandings (oral or written), if any, having been supersede hereby. No
officer, employee ore representative of either party has any authority to make
any representation or promise in connection with this Agreement or the subject
matter hereof which is not contained herein and each party acknowledges that it
has not executed this Agreement in reliance upon any such representation or
promise. No reported modification or amendment to this Agreement shall be
effective unless in writing signed by the parties hereto.
40. INCONSISTENCY. In the event of inconsistency or variation between the
provisions of this document and any Schedules, exhibits, or attachments made a
part hereof, the latter shall prevail.
XII. NOTICES
41. NOTICES. All notices required or desired to be given hereunder shall be
in writing unless otherwise herein specified and shall be transmitted by
personal delivery or by prepaid telegram, cable or telex ore prepaid air mail.
Licensor's and Distributor's respective addresses for notices shall be as set
forth above. Either party may change its address for notices by so advising the
other party in writing. All notices given by mail shall bed deemed given when
received but in any event not later than five (5) days from the date of deposit
in the mail. All notices sent by telegram, cable or telex shall be deemed given
when received by in any event not late than two (20 days from the date of
deposit in the telegraph or cable office or with respect to a telex from the
date of transmission of such telex all notices given by personal delivery shall
be deemed given when received.
OVERSEAS FILMGROUP, INC RACING PICTURES
- ------------------------------------- --------------------------------------
Licensor Distributor
BY: /s/ Lisa Wacht BY: /s/ Alessandro Fracassi
---------------------------------- -----------------------------------
ITS: ITS:
---------------------------- -----------------------------
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: PALLET ON THE FLOOR starring Bruce Spence, Peter McCauley, Jillian
O'Brian, directed by Lynton Butler
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery
at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___ .
Minimum Initial Print Order: N/A
Minion Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market rate,
copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: PLATINUM TRIANGLE starring Peter Lochran, Lori Lethin, Alex Courtney,
directed by Anthony Christopher.
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery
at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___.
Minimum Initial Print Order: N/A
Minion Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: PSYCHOCOP starring Bobby Ray Shafer, written and directed by Wallace
Potts
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: REST IN PIECES starring Scott Thompson Baker, Lorin Jean, directed by
Joseph Braunstein
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery
at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___ .
Minimum Initial Print Order: N/A
Minion Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT/SCHEDULE A
THIS AGREEMENT is entered into as of June 30th, 1988 by and between
--------------------
UNICORN PICTURES c/o OVERSEAS FILMGROUP, 8800 Sunset Blvd., #302,
- --------------------------------------------------------------------------------
L.A., CA 90069 ("Owner/Licensor")
- --------------------------------------------------------------------------------
and RACING PICTURES, Via Dei Tre Orologi 10, 00197 Roma, Italy
---------------------------------------------------------------------------
("Distributor/Licensee").
- ---------------------------------------------------
As used in this Agreement, the following terms shall have the meanings
indicated:
----------------------------------------------------------------------
DEAL TERMS
Picture: RETRIBUTION starring Dennis Libscomb, directed by Guy Magar
Territory: ITALY Only.
TERM: Ten (10) years commencing on June 30, 1988 . The term shall
-------------- -----------------------
be subject to events of force majeure.
The rights licensed herein: Theatrical, Non-Theatrical, Videogrammes, Pay and
Free Television only.
Language version:
Italian version only.
Distribution Terms:
(a) Minimum Guarantee USD 70,000.00 payable as follows:
------------------------
USD 14,000.00 upon signature of this
agreement, but in any event no
later than July 30, 1988.
USD 28,000.00 upon delivery of dubbing
materials, but in any event no
later than Oct. 30,1988.
USD 28,000.00 upon access to Internegative,
to manufacture Italian prints,
but in any event, no later
than Dec. 30, 1988.
PAYMENTS TO BE MADE TO OVERSEAS FILMGROUP INC
Disposition of Gross Receipts:
THEATRICAL AND NON-THEATRICAL: Distributor is authorized to recoup distribution
expenses as per Article 6A. Thereafter, all gross receipts shall be divided
50% to Licensor and 50% to Distributor.
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 20% of the gross wholesale price of such Video Device
and 20% of Distributor's gross receipts from any other form of Video
PAY TELEVISION: 50% to Licensor and 50% to Distributor. Distribution
expenses as per Article 6A to be deducted from Licensor's share.
FREE TELEVISION: 50% to Licensor and 50% to Distributor. Distribution
expenses as per Article 6A to be deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
INITIALS
/s/ RL /s/ AF
----------
<PAGE>
2
Holdbacks on exercise of rights retained by Licensor: Those checked below for
the duration indicated thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
--------------------------------------- ---------------
Holdbacks on exercise rights licensed herein: Those checked below, for the
duration indicate thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
--------------------------------------- ---------------
Distributor's Release Obligations: TO BE MUTUALLY AGREED UPON ONE MONTH PRIOR TO
RELEASE.
Key Cities:
Minimum Initial Release: __________________ cities, including at least
____________ Key Cities, not later than ________________ months ______________
after ___________________
Minimum Initial Print Order: ____________________________________
Minimum Advertising Expenditures: _______________ within _______________ months
after ____________________
Maximum Deductions For Advertising Expenditures: _______________________________
Initial order of materials: Distributor hereby orders at least the materials
described in the attached Schedule of Initial Order of Materials (which, if
attached, is incorporate4 herein by reference).
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
licensor Approvals (which, if attached, is incorporated herein by reference).
Applicable law: CALIFORNIA
----------------------------
Additional Terms and Conditions:
Licensor shall remain sole owner of Italian Soundtracks.
INITIALS
/s/ RL /s/ AF
----------
<PAGE>
3
In consideration of the mutual covenants herein contained, the parties hereby
agree as follows:
I. LICENSE
1. LICENSE. Licensor hereby grants to Distributor, subject to payments
provided for in paragraph 4 below and to the due performance by Distributor of
its other obligations hereunder, and Distributor hereby accepts, a limited
license under the copyright of the Picture in and throughout the Territory, and
nowhere else, and only for the Term stated herein to (a) exercise the rights
licensed herein to the Picture on film in 30 mm (if available); 35 mm and 10 mm
gauge only, and (b) advertise and publicize the exploitation of the rights
licensed herein, all as provided in the Deal terms and elsewhere herein
provided, however, that Distributor shall not itself, nor shall it permit others
to advertise, publicize, or exercise these rights licensed herein which are
subject to a holdback for the duration of such holdback, all as indicated in the
Deal Terms.
All rights of whatsoever kind and nature now or hereafter known which
are not specifically granted to Distributor herein are hereby expressly reserved
to Licensor for its unrestricted use and disposition , except that Licensor
shall not, and shall not authorize others to exploit in the Territory during the
Term the rights retained by Licensor which are subject to a holdback for the
duration indicated in the Deal Terms (although nothing herein shall prevent
Licensor from advertising, publicizing, and/or licensing or otherwise disposing
of such rights at anytime, subject only to such holdback on the EXPLORATION
thereof).
Licensor hereby warrants and represents that it has the right to enter
into this Agreement and to grant to Distributor all of the rights and licenses
herein granted. Licensor makes no representations or warranties, express or
implied, except as specifically set forth in the preceding sentence.
Distributor hereby warrants and represents that it has the right to enter into
this Agreement.
2. TERRITORY. The Territory shall mean the country or countries listed
under the Deal Terms as its or their political boundaries exist on the date of
this Agreement, exclusive of non-contiguous colonies, possessions and similar
non-contiguous areas.
3. TERM.
(a) Distributor shall not permit the distribution or exhibition of the
Picture or the exercise of any other rights licensed herein beyond the
expiration date of the Term as specified in the Deal Terms.
(B) Notwithstanding anything to the contrary contained in this
Agreement, Licensor shall have the right to terminate this Agreement if Licensor
(in its sole discretion), believes that the distribution or continued
distribution of the Picture hereunder might involve the creation or aggravation
of civil or criminal liability. Such termination shall be effective thirty (30)
days after Licensor gives notice thereof and Distributor shall cancel any
bookings contemplating exhibition of the Picture after the effective
termination date. Distributor shall include in each agreement for the
exhibition of the Picture a commensurate right of withdrawal and termination.
II. MINIMUM GUARANTEE AND DISPOSITION OF GROSS RECEIPTS
4. MINIMUM GUARANTEE. Distributor shall pay to Licensor the Minimum
Guarantee specified in the Deal Terms by paying to Licensor the percentages
thereof as and when specified above. Payment of that portion of the Minimum
Guarantee not paid concurrently with the execution of this Agreement, if any,
shall be secured by the security arrangements specified in the Deal Terms. If a
letter of credit specified as the security, then in addition to such other
conditions for it specified in the Deal Terms. Shall be an irrevocable letter
of credit in the form attached hereto, if any (which form, if it is attached is
incorporated herein by reference), and if no form is attached, said letter of
credit shall be in form and substance satisfactory to Licensor and issued by a
bank approved by a Licensor.
5. GROSS RECEIPTS. The terms "gross receipts" as used in this Agreement
shall mean:
(a) All gross monies and income of every kind (including without
limitation) any awards, subsidies or other governmental allowances) derived or
realized by Distributor and its Subsidiaries (as hereinafter defined) from the
lease, license, rental, dealing and distribution of the Picture (including
trailers thereof, bill posters, lithographs and any other advertising
accessories) and the exercise of any rights granted to Distributor under this
Agreement and
(b) All monies, less only the reasonable direct out-of-pocket costs
actually paid by Distributor in obtaining same, derived or realized by
Distributor or its Subsidiaries by reason of the infringement or interference in
the Territory by third persons of or with the Picture of any parts thereof or
any rights granted to Distributor.
6. DISPOSITION OF GROSS RECEIPTS. Distributor may deduct and retain from
the gross receipts only the items permitted under Disposition of Gross Receipts
specified in the Deal Terms, and only in the sequence therein specified. For
such purpose, the terms used in the Deal Terms shall have the following
meanings:
(a) DISTRIBUTION EXPENSES. The direct out-of pocket costs (exclusive of
any overhead costs whatsoever and any discounts, rebates and other similar
allowances, however denominated), actually paid by Distributor for the following
items:
(i) Positive prints of the Picture and the trailers thereof.
(ii) Subject to the provisions of Paragraph 9, advertising and
publicity in connection with the distribution of the Picture, which shall not
exceed a sum to be agreed upon between Licensor and Distributor without the
prior written approval of Licensor.
(iii) Subtitling, dubbing, editing, and censorship fees and costs of
editing to meet censorship requirements to the extent such costs have been
approved by Licensor in advance, and to the extent made in conformity with
paragraphs 17 and 18 below.
(iv) Insurance premiums on prints, costs of packaging, pre-print
materials or other physical properties of the Picture.
(v) All taxes, however denominated, imposed or levied by any
jurisdiction in the Territory against Distributor , Licensor or the prints, pre-
print material or other physical properties of the Picture or based upon the
gross monies derived by Distributor or Licensor from the distribution and
exploitation of the Picture in the Territory , as more specifically described
in paragraph 12 (b) hereof; provided, however, that nothing herein contained
shall be deemed to permit Distributor to recoup hereunder any part of its net
income, corporate franchise, excess profits or any other similar tax or levy,
however denominated imposed on Distributor as a corporate entity as
distinguished from taxes imposed by reason of the distribution and exploitation
of the Picture.
(vi) All of the expenses described in this sub-paragraph (a) above
are recoupable only when and to the extent actually paid to third parties in
terms length transactions, and in no event shall include salaries of
Distributor's employees, or fees to any Distributor-Related Entity or any other
cost to Distributor or any such Distributor-Related Entity not directly
attributable solely to the distribution of the Picture. All such recoupable
expenses must be fully approved and consistent with good business practices for
distribution of motion pictures in the Territory.
(vii) All other expenses of any kind or nature and any unapproved
excess in the foregoing expenses shall be BORNE solely by Distributor and shall
be non recoupable.
(b) DISTRIBUTION FEE. Distributors distribution fee is the percentage
of gross receipts specified in the Deal Terms. It is understood and agreed that
Distributor's Subsidiaries or licensees shall not be entitled to charge
Distributor or Licensor a distribution fee in connection with licenses of the
Picture and their rights licensed herein by Distributor's Subsidiaries or
licensees.
<PAGE>
4
III DISTRIBUTOR'S RELEASE OBLIGATIONS
7. DISTRIBUTION POLICIES:
(a) It is the essence of this Agreement that Licensor shall be consulted
on an on-going basis with respect to all significant aspects of the distribution
of the Picture in the Territory, including without limitation, the advertising
budget release dates, release pattern, theaters in Key Cities, marketing
strategy and any and all modifications and amendments to the foregoing.
(b) Distributors shall further:
(i) place the Picture in general theatrical release in not less
than that number of cities and Key Cities specified under "Minimum Initial
Release" n the Deal Terms, within the period therein provided.
(ii) Place the Minimum initial Paint Order specified in the Deal
Terms and shall use its best efforts to distribute the Picture throughout the
Territory
(iii) Maintain the Picture in continuous distribution throughout the
Territory for a period consistent with reasonable business judgement and
endeavor to contain the largest possible gross receipts from the distribution
and exploitation of the rights licensed herein.
(iv) accord the picture the fairest possible treatment and not
discriminate against the Picture in any fashion or use the Picture to secure
more advantageous terms for any other motion picture, product, or service.
8. EXHIBITION AGREEMENTS:
(a) The exhibition agreements for the Picture in the Territory shall be
made separate and independent from the exhibition agreements for any other
motion picture product or service. Distributor shall check and audit exhibition
engagements for the Picture consistent with the practice of first class
distributors in the Territory The results of such checking and auditing shall be
made freely available to Licensor and its representatives.
(b) The Picture shall in no event during the first run be exhibited
anywhere in the Territory on a flat license or 4- wall basis, or as out of a
double feature or other multiple feature engagement, unless all relevant terms
of each proposed agreement for such exhibition [including (without limitations)
the proposed allocation to the Picture of box office receipts, permitted
advertising costs, license fee, and film rentals] shall have been approved by
Licensor in writing in each instance. If the Picture is exhibited in any
theater together with any so-called "short subjects", not more than one percent
(1%) of the total exhibition receipts or Five Hundred Dollars ($500), whichever
is less, shall be allocated in the aggregated to such "short subjects" for that
exhibition run in that theater: provided, however, that any laws requiring a
different allocation shall be complied with and distributor shall inform
Licensor of such laws at the time this Agreement is entered into.
(c) As used herein a "control theater" shall mean a theater in which
distributor or any officer director or shareholder (owning 10% or more of the
outstanding stock or other equity) of Distributor shall have any interest,
directly or indirectly, in the operation thereof. Distributor shall not license
the Picture or rights connected therewith to a controlled theater except upon
terms and conditions which are consistent with those entered into by such
controlled theater for the exhibition of comparable motion pictures furnished by
non-related distributors.
9. ADVERTISING.
(a) GENERAL. Distributor shall advertise and publicize the Picture in
the Territory during the Term pursuant to the provisions of this Paragraph,
and in a manner designed to maximize the gross receipts payable to Licensor,
in this regard, Distributor agrees that within the period of time specified
above for such expenditures, it shall expend not less than the Minimum
Advertising Expenditures, if any, indicated in the Deal Terms for direct
out-of-pocket costs of preparing and placing advertisements of the Picture,
exclusive of any value added tax or similar taxes: any rebates, refunds,
discounts or other amounts paid back or credited back to Distributor in
connection with such expenditures shall be applied so as to reduce the amount
of advertising expenditures which Distributor will be considered to have
expended. Any expenditures in excess of the Maximum Deductions for
Advertising Expenditures. If any, indicated in the Deal Terms shall not be
deducted under paragraph 6(a) without Licensor's prior written approval. Any
allocations of advertising expenditures between the Picture and other motion
pictures shall be made on a fair and reasonable basis, with due regard to all
relevant factors, including without limitation the proportion of the
advertising space that is devoted to the Picture, the relative cost of such
space, and the relative position, prominence and emphasis given to the
picture.
(b) ADVERTISING MATERIAL. Licensor shall supply Distributors such
advertising and publicity materials relating to the Picture as Distributors may
request to the extent that Licensor has such material readily available.
Distributors shall pay for such material and for all shipping or other expenses
in the currency specified by Licensor on or before delivery. Distributors shall
have the right, at its sole expense to make or cause to be made advertising
materials with respect to the Picture, provided that such advertising material
shall adhere in all respects to the billing and credits specified in Paragraph
14. Notwithstanding the foregoing, it is specifically understood that
Distributor's right to advertise the picture does not include any publication or
merchandising rights whatsoever.
IV. ACCOUNTING AND PAYMENT
10. KEEPING OF RECORDS.
(a) Distributors agrees to maintain the accurate and complete books and
records in the currency or currencies of the Territory of at Distributor's
transactions in connection with the picture and the exercise of the rights
licensed herein. All accountings by Distributors shall be on all rentals
invoiced, all cash collections and all reimbursable expenses advanced, both with
regard to gross receipts and permitted deductions therefrom, except that if any
exhibitor effects any offset against amounts due to Distributors for the Picture
or if Distributors permits any refund, rebate or other reduction of film rentals
(either directly or by permitting the cancellation of any exhibition agreement
or otherwise) without first securing Licensor's specific consent thereto, the
amount of such offset, refund, rebate or other reduction shall be shown as such
on statements to Licensor for the applicable period, and shall nonetheless be
included in gross receipt Distributors shall do all things necessary to maximize
collections from exhibitors and to do as quickly as is reasonably possible.
(b) For all purposes of this Agreement including (but not limited for
accounting for gross receipts deductions of distribution expenses, deduction of
distribution fees, payment and RECOUPMENT of the Minimum Guarantee. Submitting
statements keeping books and records and making any payments to Licensor
hereunder the Picture shall be treated as separate as separate and distinct from
all other motion pictures and all other products or services distributed by
Distributor.
(c) As in any other motion picture in which licensor has heretofore
granted or shall hereafter grant, any distribution rights to Distributors,
Distributor shall not be entitled to effect setorts or surpluses in the receipts
deriving from any such motion picture in connection with any claim which
Distributors may have, or believe it has against Licensor in respect of the
Picture. Similarly, any claim which Distributors may have, or believe it has,
against Licensor in respect of any motion picture other than the Picture may not
be settled under the terms of this Agreement or claimed by Distributor as
grounds for exercising a right of retention with respect to any monies, or other
material relating to the Picture.
<PAGE>
5
11. STATEMENTS; AUDIT RIGHTS.
(a) Distributors agrees to furnish to Licensor monthly for a period of
twenty-four (24) months from and after the initial release of the Picture
anywhere in the Territory, and thereafter quarterly, a detailed report regarding
the distribution of the Picture in the Territory. Each report hall be in
English language and shall contain such information, reported in any local
currency or currencies of the Territory, as is customary in the industry,
including (without limitation) detailed cumulative and current periodic
statements of the gross receipts, the permitted deductions therefrom, at other
expenses (regardless of whether deductible) incurred in connection with the
distribution of the Picture and any other information requested by Licensor.
Each such repair shall be furnished to Licensor within thirty (30) days after
the close of the period for which such report is made. Subject to the
provisions of paragraph 13. Distributors shall concurrently with the delivery
of each report pay to Licensor any sums to which it may be entitled. All sums
paid to Licensor pursue to this Agreement shall be sent to the address specified
above or to such other payee and/or address as Licensor may from time to tome
designate in writing.
(b) During the Term of this Agreement and thereafter for not less than
three (3) years (but in any event for so long as any dispute may be outstanding
with respect to any item, thing or transaction related to the Picture or to
Distributor's exercise of its rights hereunder), Licensor shall have the
absolute right through its representatives and accountants and at its own cost,
at all times during regular business hours to fully examine, except from and
copy all books, records, papers, correspondence contracts, vouchers, receipts
and all other data relating in any way, directly or indirectly , to the
distribution of the Picture and Distributor's exercise of its rights hereunder.
During the foregoing period, Distributor shall keep such data reasonable
available to Licensor in the event any audit reveals a sum owing to Licensor in
the event any audit reveals a sum awing to Licensor of five percent (5%) or more
of the sum shown to be payable to Licensor on the statement furnished by
Distributor for the month or quarter involved, then Distributor shall on demand,
also pay the fees and disbursement of Licensor's representatives and accountants
for the audit or examination in which the underpayment was discovered.
12. PAYMENT, REMITTANCES, AND CURRENCY EXCHANGE.
(a) As used herein, the words "payment" ,"pay" , "payable", "paid" or
words of similar meaning when applied to obligation o Distributor to Licensor
mean the actual, receipt by Licensor by the case payment was to have been made
in the amount and currency specified herein or by Licensor of either i) cash,
ii) a bank transfer of funds to Licensor's account unencumbered and immediately
withdrawable. iii) the unconditional clearance of a check or bank draft drawn
on a United States bank. Or IV) the DR down by Licensor of a previously
approved and existing letter of credit from a United States bank pursuant to the
terms thereof. Payment in any other manner shall not be deemed "paid" t
Licensor until the proper amount and currency are actually received and
available for expenditure by Licensor and Distributors taxes the risk that any
transfer of funds (whether due to the method of transfer failure to obtain
necessary permits or otherwise) will not be so received by Licensor within the
time periods herein required for particular payments.
(b) Distributors shall timely obtain all governmental permits necessary
to make all payments to Licensor as and when required under this Agreement
including the Minimum Guarantee. Distributor shall also pay without limitation
any tax, levy or charge, however denominated, imposed or levied by any
jurisdiction in the Territory against Distributor, Licensor, or the Picture
(excluding only taxes based on Licensor's net income), including (without
limitation quotas value added taxes, so called "remittance" and similar taxes,
licenses, contingents, turnover taxes, import permits and duties, and national,
state, county, city or other taxes, however denominated, relating to or imposed
upon the Minimum Guarantee or any part thereof, any other amounts payable to
Licensor, film rentals, negatives, prints or other material, or the right or
privilege to use the same in connection with the Picture. It is the intent
hereof that the Minimum Guarantee and any other amounts payable to Licensor
shall be net amounts, free and clear of any tax, levy or charge of whatsoever
kind or nature however denominated, and if Distributor claims it is required to
deduct any taxes or other sums from any such amounts, Distributor shall present
the original government receipt showing the amount paid and deducted. Any tax
levy or other tax paid by Distributor pursuant to this Paragraph shall be
deemed paid on Licensor's behalf and Licensor shall have the right to treat such
payments for all purposes as payments made solely by Licensor. Distributor may,
after presentation to Licensor of the original government receipt indicating
that any of the foregoing taxes have been duly paid recoup the same as a
distribution expense from subsequent sums payable to Licensor hereunder.
(c) Unless specified otherwise in any Schedule of Additional Currency
Remittance provisions attached hereto which Schedule, if attached, is
incorporated herein by reference the following currency conversion provisions
shall apply.
(i) Any and all amounts paid or payable hereunder shall be paid in
the currency specified herein regarding of the currency of the Territory and
Distributors shall make whatever conversion necessary to make such payment.
(ii) As to amounts payable to Licensor not expressed in a
particular currency Distributor shall convert such amounts from the currency a
which they were originally earned directly into United States dollars (or such
other currency as Licensor may from time to time designate in writing at the
rate of exchange prevailing at Chase Manhattan Bank in New York City at the
close of the accounting period for which Distributor was obligated to accounting
to Licensor hereunder for such earnings.
(iii) The Minimum Guarantee shall be recouped as, I and when the
United States dollars otherwise remittable to Licensor equal the amount of the
Minimum Guarantee.
All costs of currency conversion including (without limitation remittance and
withholding taxes, banking charges permit fees and transmittal costs shall be
the sole responsibility of Distributor and shall not reduce the amounts due
Licensor hereunder.
(d) Any sums payable to Licensor under this Agreement which are not
paid when due shall bear interest from the due date until the date of payment at
a rate per annum two percent (2%) higher than the prime rate charged from time
to time by Chase Manhattan Bank in New York. The foregoing interest payments
shall be in addition to any other rights Licensor may have hereunder or at law.
13. BLOCKED FUNDS, In the event that Distributors shall be prohibited or
restricted from making payment of any monies at the time when same are due and
payable to Licensor hereunder by reason of the laws of currency regulations
within the Territory. Distributors shall promptly so advise Licensor in writing
Distributors shall , upon Licensor's request deposit any such blocked funds to
the credit of Licensor in a bank or banks or other depository in the Territory
designated in writing by Licensor or pay them promptly to such persons or
activities as Licensor may designate in writing.
V. CREDITS
14. Licensor shall have the right to pre-approve all advertising and
publicity Distributor uses with respect to the Picture Distributor shall
strictly adhere to the credit schedule supplied by Licensor in the main and/or
and titles of the Picture and in all advertising and publicity with respect
thereto. If Licensor does not provide such a credit schedule, then Distributor
must demand same from Licensor in writing before preparing any advertising or
publicity for the Picture. The require credits are herein after elected loss
credits.
Provided Distributor complies with and ADVISES by the credits Licensor
shall indemnify and hold Distributor harmless from any claim, loss, damage or
expense including reasonable legal fees and expenses arising as result of the
giving of such credits on the screen or in advertising issued by or under
Distributor's control. Distributor shall indemnify and hold Licensor harmless
from any claim loss from any claim loss damage or expense (including reasonable
legal fees and expenses) arising out of any errors or omissions in the giving of
credits on the screen or in advertising issued by or under Distributor's
control, or any failure by Distributor to adhere to and observe the credits it
Distributor's may aware of any violation of its credits obligation. It shall
correct all such violations in the future outgoing such shall not be deemed a
cure of any previous breach, nor an election of remedies by Licensor.
Distributor shall have the right but not the obligation to include in
the main and end titles of the Picture and in all advertising and publicity
material for the Picture, in a manner which is not inconsistent with other
credits for the Picture the words "Distributed by (name of Distributor)", or a
similar indication of Distributor's function.
Distributor shall not make or permit to be made in any advertising,
publicity or otherwise, any statements which directly or indirectly, expressly
or by implication, constitute or may be understood to be an endorsement of any
product, article, or service by Licensor or anyone else associated with the
Picture. Any advertising or publicity referring to such person shall be limited
to indicated that such person appears in or rendered services in connection with
the Picture.
<PAGE>
6
DELIVERY RETURN OF MATERIALS
15. DELIVERY. Delivery of the Picture to Distributor shall be accomplished
in the manner hereinafter set forth:
(a) Within thirty (30) days after Licensor gives notice to Distributor
that Licensor is prepared to deliver the Picture. Distributor shall send to
Licensor a written order for whatever number of prints or quantity of pre-print
materials, advertising materials, accessories, and trailers relating to the
Picture ( which together with the Initial Order of Materials described above,
are referred to as "Initial Materials") Distributor may require subject to the
written approval of Licensor. Licensor will send to Distributor a pro forma
invoice setting forth the cost. F.O.B. place of shipment of the Initial
Material and Distributor shall pay such cost to Licensor in the currency
invoiced. Promptly after receipt of such payment, Licensor shall deliver the
Initial Materials to Distributor in the manner provided in paragraph (b) hereof.
(b) Delivery of the Picture for all purposes hereunder shall consists
of sending Distributor either (1) written notice that one or more release print
are available to it or (2) a laboratory access letter in substantially the form
attached hereto and incorporated herein by reference (the "Laboratory Access
Letter') signed by a laboratory having possession or release prints or pre-print
material. It shall be in Licensor sole discretion to elect either (1) or (2)
above.
(c) If any interpositives, interrogatives, soundtracks or any other
materials (including dubbed or subtitled materials) required for the manufacture
of prints (collectively the "Printing Materials") constitute or are induced
among the materials shipped to Distributor or manufactured by or on behalf of
Distributor , then prior to shipment of any Printing Materials to the
laboratory, Distributor shall supply Licensor with a written agreement from the
laboratory in substantially the form of the Laboratory Access Letter.
(d) Licensor shall designate the laboratory in its sole discretion and
may change the laboratory at any time, so long as is furnishes Distributor with
a signed Laboratory Access Letter from any new laboratories.
(e) With respect to all prints of the Picture . The Initial Materials.
The Printing Materials, advertising accessories and all other material relating
to the Picture which shall be procure by distributor which shall be delivered to
Distributor or to the laboratory pursuant to this agreement, Distributor shall
have all cost and expenses in connection with the shipping, transportation and
delivery of such material to Distributor or to the laboratory and the entry into
their Territory, including (without limitation) customs duties, packing,
forwarding and shipping charges, the cost of fees cans and containers brokerage
fees, consular fees, censorship fees and forwarding insurance.
16. RETURN OF MATERIALS. Upon expiration of the Term or earlier
termination of this Agreement Distributor shall at Distributor's sole cost and
expense return to Licensor at such location as Licensor shall designate (or
Licensor fails to designate any location to the address specified above)
(a) All prints and preprint material in their original feels, cans or
containers, in as good condition as when delivered, subject to reasonable wear
and tear.
(b) All dubbed soundtracks, sub-titled or sub-titling material, and all
optical and/or magnetic soundtracks, and/or positive prints of the Picture
containing optical and/or magnetic soundtracks, which were manufactured by, for
or at the instance of Distributor, whether or not any or said tracks, materials
or positive prints are actually used by Distributor in connection with the
exercise of the rights licensed hereunder: and
(c) All other material which was delivered or prepared hereunder.
Notwithstanding the foregoing. Licensor (in its sole discretion may require
that all or any portion of the aforementioned materials or parts thereof be
destroyed at Distributor's sole cost and under the supervision of a person
designated by Licensor, and in such event the Distributor shall deliver to
Licensor a duly authenticated certificate of destruction thereof. In the event
of any loss, theft or destruction of any print of the Picture or any trailer
thereof during the term, Distributor shall furnish Licensor with certification
of such loss, theft or destruction within thirty (30) days after any such event.
VII. CUTTING ALTERING
17. CUTTING AND ALTERING. The Picture and any trailers supplied by
Licensor shall be exhibited in their original continuity, without change,
alteration, interpolation, cut or elimination. Notwithstanding the foregoing
sentence, and subject to third party consultation, editing, or approval rights
of which Licensor has informed Distributor, Distributor may edit the Picture for
the following purposes only:
(a) To add a foreign language title, which title shall be subject to
the approval of Licensor
(b) Dubbing or subtitling as provided for in Paragraphs 17 and 18
hereof:
(c) Changes required to secure approval by duly authorized censorship
authorities, if, as, and to the extent permitted pursuant to this Agreement; and
(d) Changes required to secure approval by duly authorized censorship
authorities, if as, and to the extent permitted pursuant to this Agreement: and
the original tenor and purpose of the Picture, and provided further that
Distributor shall consult with Licensor about any significant editing of or
changes to the television version of the Picture. In no event may any credit,
trademark, trade name, symbol or copyright notice be eliminated or altered. All
cuts and other alterations shall be made and restore at Distributor's sole cost
and expense.
18. FOREIGN LANGUAGE VERSIONS.
(a) Distributor may make foreign language versions of the Picture,
dubbed or subtitled, all at Distributor's sole cost and expense (subject to
recoupment of same as a distribution expense. Distributor shall consult with
Licensor and abide by Licensor's instructions in connection with the cost and
preparation of dubbed and/or subtitled versions of the Picture, in any event,
Distributor shall strictly conform to all relevant restrictions applicable to
artists and other third parties of which Licensor shall advise Distributor.
Distributor shall indemnify and hold Licensor harmless from any claims, loss,
damage, or expense including reasonable legal fees and expenses) arising out of
or in connection with the dubbing or subtitling of the Picture.
(b) At all times, Licensor shall have access, without cost to:
(i) any subtitled subtitling material including main and end title
credits and any dubbed or dubbing material, of whatever character, which
Distributor may cause to be made or created with respect of the Picture or any
trailer thereof:
(ii) any edited versions of the Picture or any trailer thereof
which Distributor may cause to be made or created: and
(iii) any trailers of the Picture which Distributor may cause to
be created.
Distributor agrees to maintain printing or recording masters of all such
versions or materials during and after the Term of this Agreement at
Distributor's cost. Licensor may at its own cost and expense make for its own
use from any of the foregoing material such dupe negatives, fine grain prints,
magnetic soundtracks and other material of any character as Licensor may deem
appropriate Licensor shall also have the right to order from Distributor at the
cost charged by the laboratory for reproducing same release prints and trailers
of the Picture in such dubbed and/or subtitled and/or edited versions as
Distributor may have made or caused to be made. Licensor shall also have the
right to order from Distributor all trailers of the Picture which have been
substantially created by Distributor at a fee to be negotiated in good faith.
Distributor shall execute and deliver to Licensor at the time any of the
foregoing material is created, access letters to the applicable film and sound
laboratories in substantially the for of the Laboratory Access Letter.
(c) During the Term and thereafter if Licensor so requests, Distributor
shall cause the applicable sound laboratory(ies) to store the original dubbed
magnetic soundtracks of the Picture and any trailers thereof which storage shall
be at Distributor's sole cost and expense
VIII. OWNERSHIP INFRINGEMENT
19. LEGAL TITLE. Legal title to all prints, pre-print material and other
material provided to Distributor hereunder shall at all times remain in Licensor
or in the party or parties from whom Licensor obtains the rights herein licensed
to Distributor. and legal title in and to any material, including, without
limitation, dubbed or subtitled prints and/or pre-print material created by, for
or at the instance of Distributor, and all rights (including copyrights) therein
shall vest in Licensor upon the creation thereof, subject only to possession and
control thereof by Distributor during the Term solely for the purpose of
exercise of the rights licensed herein. The goodwill pertaining to the Picture,
the characters and the names of the characters and the name of Licensor shall
execute, acknowledge and deliver to Licensor any instruments of transfer,
conveyance or assignment in or to any such material deemed by Licensor alone or
in a combination of other words, and the tradename or trademark or other
identification of Licensor shall belong exclusively to Licensor. Distributor
shall execute, acknowledge and deliver to Licensor any instruments of transfer,
conveyance or assignment in or to any such material deemed by Licensor necessary
of desirable to evidence or effectuate Licensor's ownership thereof and in the
event that Distributor fails or refuses to execute, acknowledge or deliver any
such instrument or documents upon ten (10) days written notice, then Licensor
shall be, and Distributor hereby irrevocably nominates, constitutes and appoints
Licensor as its true and lawful attorney in fact to execute and deliver all such
instruments and documents in Distributor's name or other wise, if being
acknowledged that such power is a power coupled with an interest. If requested
by Licensor in writing, Distributor will notify Licensor in writing within
thirty (30) days following the close of each month during the Term of this
Agreement of the location of all prints delivered or utilized hereunder. Except
as other wise expressly provided herein. Distributor will not make copies or
prints or pre-print material or permit others to do so, nor shall Distributor
permit any prints or pre-print material to be removed from Territory.
<PAGE>
7
20. COPYRIGHT; INFRINGEMENT.
(a) Distributor shall take all steps and pay any and all fees necessary
to protect the Picture and prints delivered or manufactured hereunder by
copyright in the Territory, such copyright to be taken in the name of Licensor
or as Licensor shall designate, and to renew or extend such copyright.
(b) Distributor shall promptly take all reasonable legal steps
necessary (subject to Licensor's prior approval with regard to the institution
of any legal proceeding) to protect the interests of both parties and to obtain
redress and to restrain anyone from unauthorized exhibition of the Picture or
duplication of any print or the doing of any act which infringes upon the
Picture, the prints, any Printing Materials or any advertising materials or the
copyrights or trademarks therein. Licensor shall be free to participate in such
action using counsel of its choice, at Licensor's expense provided that
Licensor's expenses thereof shall be repaid to Licensor out of any recovery in
such action, pari passu with Distributor's expenses therein. If Distributor
shall not be obligated to, or shall fail or refuse to take any of the foregoing
actions, then, in addition to any other rights Licensor shall have hereunder or
at law, Licensor may (but shall not be obligated to) do so, in Licensor's and/or
Distributor's name. Any recovery from such action undertaken by Licensor shall
be paid to Licensor. Any net loss from such action shall be treated as a
distribution expense of the Picture under this Agreement.
(c) Distributor agrees that Licensor shall not be responsible for any
unauthorized prints of the Picture or any trailers thereof which may appear in
the Territory.
(d) Distributor shall notify Licensor in writing of the occurrence of
any event relation to the provisions of the Paragraph and all actions taken with
regard thereto.
(e) Distributor agrees to submit to Licensor in writing any change of
title of the Picture that Distributor wants to use. Licensor shall promptly,
either approve or disapprove any such change of title of the Picture by
Distributor and if Licensor so disapproves, Distributor shall not use such
change of title of the Picture by Distributor and if Licensor so disapproves.
Distributor shall not use such change of title of the Picture. Distributor
shall indemnify Licensor against any and all damage, costs and expenses,
including attorney' fees, and shall relieve Licensor of all liability in
connection with any claim or action respecting any change of title of the
Picture by Distributor approved by Licensor.
21. MUSIC PERFORMANCES FEES. Distributor shall pay all royalties or
license fees to any performing rights society for the public performance in the
Territory of music recorded in the Picture. The rights licensed hereunder are
subject in all respects to all rights of composers, authors, music publishers,
and performing rights societies with respect to the performance of the music
synchronized with the Picture and Distributor shall not permit or authorize any
exhibition of the Picture under such circumstances or in such places as may
constitute an infringement of any performance rights in any music synchronized
with the Picture.
22. DEFINITIONS. As used herein the following terms shall have the
following meanings:
(a) THE "PICTURE": The "Picture" is individually and collectively the
motion picture photoplay(s) listed in Schedule A attached hereto and
incorporated herein by this reference, but only in the language or languages
specified in Schedule A.
(b) "VIDEO DEVICE": "Video Device" means a videocassette embodying the
Picture which is sold or rented to the public for home us only by means of a
playback device directly connected to or forming an integral part of a
television receiver or device.
(c) "MASTER": "Master" means material of a first class technical
quality from which duplicated Masters ("Sub-Masters"), suitable for use in the
manufacture of Video Devices, can be made.
23. GRANT OF RIGHTS.
(a) Subject to the limitations, terms and conditions set forth in this
Agreement, Owner hereby grants to Licensee the exclusive right, license and
privilege throughout the Territory during the Term to manufacture Video Devices
and to sell, rent, advertise and otherwise market such Video Devices to retailer
and the public for private home use only. Licensee shall not permit any Video
Devices sold or rented by Licensee to be exported out of the Territory.
(b) Licensee may dub and/or subtitle the Picture (but only in the
language or languages set forth in Schedule A); provided that neither Licensee
nor any of its licensees shall: (i) otherwise edit the Picture in any manner,
including, without limitation, changing the title of the Picture, without
Owner's prior written consent: (ii) alter or delete any credit, logo or
copyright notice appearing on the Picture; or (iii) include any other motion
picture or other material (including advertisements or commercial material) on
the Video Device.
(c) To the extent of Owner's rights therein, Licensee shall have the
right to use and authorize others to use the name, physical likeness (whether by
photograph or otherwise) and voice of any person who appears recognizably in the
Picture, solely for the purpose of advertising, publicizing or exploiting Video
Devices of the Picture; provided that:
(i) Licensee shall, and shall cause its licensees to, strictly
abide by all relevant restrictions imposed upon Owner with respect to the use of
any person's name likeness and/or voice pursuant to this subparagraph 2(c); and
(ii) The name, likeness and/or voice of any person shall not be
used as a direct or indirect endorsement of any product, services or commodity.
(d) Notwithstanding anything to the contrary contained herein, the
rights granted to Licensee hereunder do not include the right to use or permit
the use of any Video Devices for viewing in any place of public assembly where
an admission fee or viewing fee is charged, for broadcast by television or
cable, whether free or pay, for theatrical exhibition, or for broadcast or
exhibition in hotels, military camps and installations, embassies, prisons,
busses, oil rigs, aircraft, ships, educational institutions, hospitals or by
other so-called "non-standard" or "non-theatrical" means, now known or hereafter
devised.
(e) All rights to the Picture which have not been granted to Licensee
pursuant to Paragraph 2(a) above are hereby expressly reserved to Owner and
Owner shall be entitled to exercise, exploit and/or dispose of any such reserved
rights throughout the world (including without limitation in the Territory; at
any time without prior notice or any obligation to Licensee whatsoever.
24. OBLIGATIONS OF LICENSEE.
(a) Licensee shall use its best efforts, skill and ability in the
manufacture, distribution, marketing and other exploitation of Video Devices
hereunder.
(b) Licensee shall strictly comply with all contractual requirements
for advertising credit to persons who rendered services or furnished materials
in connection with the Picture of which Owner notifies Licensee.
(c) Licensee shall include on the Picture (if not already thereon), the
Video Devices and the packaging thereof: (i) the name and logo of Owner or
Owner's designee in a size and location specified by Owner: and (ii) the
following statement and copyright notice (the year of copyright for each Picture
being set forth in Schedule A):
"LICENSED BY ___________________"
"-C- _______________, 19________, All Rights Reserved"
<PAGE>
8
Licensee may also include its name and logo on the Video Devices and the
packaging thereof, but only in a size of type no larger than seventy-five
percent (75%) of the size of type used to display Owner's name and logo, and
only in a location approved by Owner in writing.
Licensee shall also include on the Picture (in the very beginning of the
Picture), the Video Devices and the packaging thereof, the packaging thereof,
the following legend in prominent type and in the language specified in Schedule
A.
"WARNING: FOR PRIVATE HOME USE ONLY ANY UNAUTHORIZED COPYING, HIRING,
LENDING OR PUBLIC PERFORMANCE OF THIS PROGRAM IS PROHIBITED BY LAW,
VIOLATORS WILL BE SUBJECT TO PROSECUTION."
(d) Licensee shall be solely responsible for all manufacturing,
distributing, marketing, advertising and all other cost incident to the
exploitation of the rights granted hereunder.
25. PAYMENTS.
(a) Licensee shall timely obtain all governmental permits necessary to
make all payments to Owner as and when required under this Agreement
Notwithstanding anything to the contrary contained herein, there shall be no
deductions whatsoever from the Advance or any other payments made to Owner
hereunder on account of bank charges, withholding or remittance taxes (however
denominated), conversion taxes or for any other reason, it being the intent
hereof that the Advance and any other amounts payable to Owner hereunder shall
be net amounts, free and clear of any tax, levy or charge whatsoever.
(b) Licensee shall submit to Owner a statement setting forth in detail
the computation of royalties earned during the preceding accounting period,
including, without limitation, the number of Video Devices sold or rented during
such period, the price of each Video Device sold or rented and the royalty per
Video Device. Each statement shall be accompanied by payment of the royalties
due and payable in accordance with this Agreement. Said statements shall be
rendered on the first day of each month with respect to the monthly period
ending thirty (30) days prior thereto, except that subsequent to the first two
(2) years of the Term, said statements shall be rendered within thirty (30) days
following the last day of March, June, September and December of each year with
respect to the immediately preceding calendar quarter. Timely payment by
Licensee is the essence of this Agreement. Interest at a rate equal to the
lesser of twenty percent (20%) per annum or the highest rate permissible under
the laws of the State of California shall accrue on any amount due and not paid
hereunder, calculated from and after the date upon which such amount was due
until the date of payment.
(c) Royalties shall be computed in the national currency of the
Territory and shall be paid to Owner in United States Dollars at the rate of
exchange prevailing at Chase Manhattan Bank in New York City on the last day of
business of the applicable quarterly accounting period: provided, that if such
royalties shall not be paid within the time period provided in subparagraph 6(b)
above, such royalties shall be paid at the highest rate of exchange prevailing
between the due date and the date of payment.
(d) Licensee shall keep true and accurate books and records of sales
and rentals of Video Devices hereunder. Owner shall have the right from time to
time to audit and make extracts of the books and records of Licensee, its
subsidiaries, affiliates and licensees, wherever the same may be located,
insofar as said books or records pertain to the manufacture, sale or rental of
Video Devices hereunder. Any such audit shall take place upon not less than
seven (7) days advance written notice, during normal business hours of normal
business days and at reasonable intervals. Any such audit shall take place upon
not less than seven (7) days advance written notice, during normal business
hours of normal business days and at reasonable intervals. And such audit shall
be at Owner's expense unless a discrepancy in the amount of ten percent (10%) or
more is discovered, in which event Licensee shall bear the cost of such audit.
In the vent that the calculation of royalties hereunder is determined by a
computer based system, than the "books of records" of Licensee shall include,
without limitation, the machine sensible data (e.g. punch cards, magnetic tapes,
discs, etc.) utilized by such system and the related documentation describing
such system.
26. MUSIC SYNCHRONIZATION AND PERFORMANCE FEES. The rights granted to
Licensee under this Agreement are subject in all respects to the rights of
composers, authors, music publishers and performing rights societies of all
music embodied in the Picture and licensee shall pay any and all applicable
royalties or license fees to any and all such persons and organizations arising
out of the manufacture and/or exploitation of Video Devices in the Territory.
27. Effect of Expiration or Termination. Upon the expiration or
termination of the Term of this Agreement, for whatever reason, Licensee and its
licensees shall immediately cease all manufacturing of Video Devices, and all
material in Licensee's possession or control used in the manufacture of Video
Devices (including, but not limited to, Masters and Sub-Masters) and all Video
Devices in Licensees possession or control shall promptly, at the option of
Owner and upon its written instructions, either:
(i) be shipped by Licensee to Owner or Owner's designee, at Owner's
cost; or
(ii) be destroyed by Licensee under the supervision of Owner or Owner's
designee, or Owner's written request, destroyed by Licensee without such
supervision, provide Licensee provides Owner with an affidavit of such fact,
sworn to by a principal officer of Licensee.
Licensee shall not manufacture or permit the manufacture of a greater number of
Video Devices during the last six (6) months of the Term than were manufactured
during the immediately preceding six (6) months of the Term.
28. PROTECTION OF VIDEO DEVICES. Licensee shall take all steps and pay
any and all fees necessary to protect the copyright in the Picture and the Video
Devices, and all material manufactured or delivered hereunder, in the Territory,
and, if applicable, to renew or extend such copyright. Licensee shall promptly
take all reasonable legal steps necessary (subject to Owner's prior approval
with respect to the institution of any legal proceeding). To protect the
interests of Owner and Licensee in the Picture and the Video Devices, and to
obtain redress and restrain any third party from any authorized use of the
Picture or Video Devices or from the duplication of any print or the doing of
any act which infringes upon the Picture or any materials manufactured or
delivered hereunder. Owner shall be free to participate in such action using
counsel of its own choice, at Owner's expense provided that Owner's expenses
thereof shall be repaid to Owner out of any recovery from such action, pari
passu with the repayment to Licensee of its expenses. If Licensee shall fail or
refuse to take any of the foregoing actions, then, in addition to any of the
rights which Owner shall have hereunder or at law or in equity, Owner may (but
shall not be obligated to) take such action n Owner's and/or Licensee's name in
which event any recovery from such acting undertaken by Owner shall be the sole
property of Owner, Licensee shall notify Owner in writing of the occurrence of
any event relating to the provisions of this paragraph and all actions taken
with regard thereto.
<PAGE>
9
IX. BREACH: TERMINATION
29. BREACH. Any of the following occurrences shall constitute a material
breach of this Agreement by Distributor and at any time after the occurrence
thereof (or of any other material breach hereof) Licensor shall have the right
to terminate this Agreement, effective immediately upon sending notice to such
effect to Distributor, without refunding or rebating any amounts whatsoever to
Distributor (Licensor being entitled to retain such amounts by way of partial
liquidated damages):
(a) Any failure to pay any sum due Licensor as and when required
hereunder, it being agreed that time is of the essence with regard to all
payments:
(b) Distributor's failure to order and pay for the Initial Material
when and as called for in Paragraph 15 above.
(c) The shipment or transportation of any print. Printing Materials or
other materials relating to the Picture outside the Territory either by
Distributor or by any other person with the knowledge, consent or through the
negligence of Distributor, without Licensor's written authorization:
(d) Any failure on the part of Distributor to comply with Distributor's
Release Obligations as set forth in Section III above.
(e) The reproduction or copying without Licensor's written
authorization of any print or Printing Materials of the Picture either by
Distributor by any other person with the knowledge, consent or through the
negligence of Distributor:
(f) Distributor's ceasing to engage in the business of motion picture
distribution for a continuous period of thirty (30) days:
(g) Any substantial change in the ownership or control of Distributor,
or the dissolution, merger or consolidation of Distributor, without Licensor's
written consent.
(h) The entry by any party of any final judgment against Distributor
which shall remain unsatisfied or unstayed for a period of thirty (30) days:
(i) The filing of any voluntary or involuntary petition in bankruptcy
or institution of any other insolvency proceeding by or against Distributor,
which is not dismissed within thirty (30) days:
(j) The appointment of a trustee, receiver or similar official for a
substantial portion of Distributor's assets, which appointment is not discharged
or vacated within thirty (30) days:
(k) Distributor's making of a general assignment for the benefit of
creditors: or
(l) Distributor's failure within ten (10) days after demand by Licensor
to remedy completely any other act or failure constituting a breach of this
Agreement.
A material breach of this Agreement may be treated by Licensor as a material
breach under all other licenses and agreements between Licensor and Distributor,
and shall entitle Licensor, at its option, to terminate any or all of same.
30. TERMINATION. Upon the termination of this Agreement by Licensor for any
reason, all rights of Distributor hereunder shall terminate and, except as
specifically provided in this Agreement to the contrary, Licensor shall have the
right to collect and retain for Licensor's own account all monies due or to
become due to Distributor under any license or agreement theretofore made by
Distributor with respect to the exhibition, distribution or other exploitation
of the Picture, all such licenses and agreements, and all monies payable
thereunder, being automatically assigned to Licensor in such event. Distributor
shall execute, acknowledge and deliver to Licensor any and all further
assignments and instruments deemed by Licensor necessary or desirable to
evidence or effectuate such assignment and, in the event that Distributor fails
or refuses to execute, acknowledge or deliver to licensor any such assignments
or instruments upon then (10) days written notice, then Licensor shall be, and
Distributor hereby irrevocably nominates, constitutes and appoints Licensor as
Distributor's true and lawful attorney-in-fact to execute and deliver all such
assignments and instruments in Distributor's name or otherwise, it being
acknowledged that such power is a power coupled with an interest. Further, in
the event of termination hereof Distributor shall comply fully with Licensor's
instructions and with the provisions of Paragraph 16 above in connection with
the redelivery of all materials relating to the Picture. Licensor shall continue
to be entitled, notwithstanding termination of this agreement, to incur and to
recover from Distributor reasonable legal and/or collection agency fees and
expenses in order to enforce the provisions of this Agreement Licensor may
exercise any of the rights herein provided in addition to and without prejudice
to any other rights or remedies Licensor may have against Distributor under this
Agreement or at law or in equity.
31. FORCE MAJEURE
(a) Should the production or delivery of the Picture be hampered,
interrupted or interfered with by reason of fire, flood, casualty , lockout,
strike, labor condition, unavoidable accident, national calamity, mechanical or
other breakdown of electrical or sound equipment, failure or delay on the part
of any laboratory or supplier, delay in or lack of transportation, export
embargo, riot, war, civil commotion, act of God, the act of any legally
constituted authority or by any other cause or causes (whether similar or
dissimilar to the foregoing) beyond the reasonable control of Licensor. then
Licensor'' obligations in respect of the Picture shall be suspended during the
period or occurrence of such event, and Distributor shall not be entitled to
claim damages from Licensor or to cancel this Agreement.
(b) Furthermore. Licensor shall not be liable for any failure,
misfeasance, malfeasance or non-feasance or any carrier, transportation agency,
laboratory or any other persons, firms or corporations, or for any causes not
within the reasonable control of Licensor, or for any action, omission or delay
not directly due to the negligence or default of Licensor or its authorized
employees. In any of such events. Licensor shall be discharge from any liability
whatsoever and any and all claims arising therefrom are hereby expressly waived
by distributor.
(c) notwithstanding anything in this Agreement to the contrary, in no
event shall Licensor be liable for lost profits or consequential damages of any
kind, whether or not Licensor is advised of the possibility of such damages and
whether or not any or all of such damages are attributable to Licensor's acts or
omissions.
<PAGE>
10
32. INDEMNITY. Distributor shall upon Licensor's request at any time or
times during or after the term of this Agreement. indemnify Licensor, its
officers, directors, agents, employees, parents. Subsidiaries, affiliates,
successors, and assigns and hold it and each of them harmless from and against
any claim, loss, damage or expense ( including reasonable legal fees and
expenses) arising out of or in connection with any breach by Distributor of any
covenant, agreement, representation or warranty made in this Agreement or any
agreement, act or omission of Distributor, its Subsidiaries, affiliates,
successors or assigns, or the officers, directors, agents or employees of the
foregoing relating to the advertising, distribution or exhibition of the Picture
(including trailers thereof and advertising accessories.)
X. ASSIGNMENT
33. ASSIGNMENT. Licensor may freely, at any time or times, assign this
Agreement or all or any portion of Licensor's rights or obligations hereunder.
Neither the license herein granted to Distributor nor this Agreement may be
assigned, sublicensed, sold or otherwise disposed of by distributor, in whole or
in part either voluntarily or by operation of law, without the written consent
of Licensor, It being agreed that the Picture shall be distributed only by
Distributor or its Subsidiaries throughout the Territory. Any attempted or
purported assignment or other disposition by distributor in violation of this
providing shall be null and void and of no force or effect: As used herein, a
"Subsidiary" shall mean any entity in which Distributor, or any officer,
director, shareholder., or employee of Distributor, owning ten percent (10%) or
more of the outstanding stock or other equity of Distributor, shall have any
interest, directly or indirectly in the operation thereof.
XI. GENERAL CONDITIONS
34. NO JOINT VENTURE. Nothing in this Agreement shall be construed to
create or evidence a joint venture, partnership or agency relationship between
the parties hereto Neither party shall hold itself out contrary to the terms of
this Paragraph and neither party shall become liable by any representation,
acts, or omissions of the other. This Agreement is not for the benefit of any
third party and shall not be deemed to create or evidence any right or remedy of
any such third party, whether referred to herein or not.
35. NO WAIVER. No waiver by either party hereto of any breach of any
provision of this Agreement shall be deemed to be a waiver of (i) any preceding
or succeeding breach of the same provision or (ii) any breach of any other
provision of this Agreement, and no waiver shall be effective unless made in
writing and then only to the extent specifically set forth. The exercise of any
rights granted to either party hereunder shall not operate as a waiver of any
default or breach on the part of the other party hereto. Each and all of the
several rights and remedies of the parties hereunder shall be construed as
cumulative and no one of them as exclusive of the others or of any right or
priority allowed by law.
36. SEVERABILITY. Nothing in this Agreement shall be construed so as to
require the commission of any act contrary to law. and wherever there is any
conflict between any provisions of this Agreement and any statue, law or
ordinance, contrary to which the parties have no legal right to contract. the
latter shall prevail, bin in such event the provision of this Agreement affected
shall be curtailed and limited only to the extent necessary to bring it within
the legal requirements.
37. CAPTIONS. Captions and paragraph headings contained in this Agreement
are for convenience only and shall not be considered for any purpose in
interpreting or construing this Agreement.
38. ARBITRATION: APPLICABLE LAW: SERVICE OF PROCESS. This Agreement is
entered into pursuant to the laws of the State of California and shall be
interpreted in accordance with the laws applicable to agreements entered into
and wholly performed therein. Any controversy or claim arising out of or
relating to this Agreement or the validity, construction or performance of this
agreement, or the breach thereof, shall be resolved by arbitration in accordance
with rules and procedures of the American film Marketing Association ("AFMA") as
such may be amended from time to time, which rules and procedures are
incorporated into and made a part of this Agreement by reference. The parties
agree to abide by and perform in accordance with any award rendered by the
arbitrator in such arbitration proceedings and that judgements of a court having
jurisdiction may be entered upon such award. In the event such rules and
procedures of AFMA do not exist at the time such claim arises, Distributor
hereby consents to the jurisdiction of the State and Federal Courts in the
County of Los Angeles, California and Distributor hereby irrevocable appoints
- --------------------------------------------------------------------------------
of Los Angeles, California or the Secretary of State of the State of California
as its agent to receive service of process in connection with any action between
Licensor and Distributor arising out this Agreement which is brought by Licensor
in a State or Federal Court in California. In the event the blank space in this
Paragraph is not filled in. Distributor shall be deemed to have appointed the
Secretary of the State of California and its said agent.
39. MODIFICATION. This Agreement including all Schedules and any other
exhibits or attachments made a part hereof, is complete and constitutes the
entire agreement between the parties regarding the subject matter hereof, all
prior understandings (oral or written), if any, having been supersede hereby. No
officer, employee ore representative of either party has any authority to make
any representation or promise in connection with this Agreement or the subject
matter hereof which is not contained herein and each party acknowledges that it
has not executed this Agreement in reliance upon any such representation or
promise. No reported modification or amendment to this Agreement shall be
effective unless in writing signed by the parties hereto.
40. INCONSISTENCY. In the event of inconsistency or variation between the
provisions of this document and any Schedules, exhibits, or attachments made a
part hereof, the latter shall prevail.
XII. NOTICES
41. NOTICES. All notices required or desired to be given hereunder shall be
in writing unless otherwise herein specified and shall be transmitted by
personal delivery or by prepaid telegram, cable or telex ore prepaid air mail.
Licensor's and Distributor's respective addresses for notices shall be as set
forth above. Either party may change its address for notices by so advising the
other party in writing. All notices given by mail shall bed deemed given when
received but in any event not later than five (5) days from the date of deposit
in the mail. All notices sent by telegram, cable or telex shall be deemed given
when received by in any event not late than two (20 days from the date of
deposit in the telegraph or cable office or with respect to a telex from the
date of transmission of such telex all notices given by personal delivery shall
be deemed given when received.
OVERSEAS FILMGROUP, INC RACING PICTURES
- -------------------------------------- -------------------------------------
Licensor Distributor
BY: /s/ Lisa Wacht BY: /s/ Alessandro Fracassi
----------------------------------- ----------------------------------
ITS: ITS:
----------------------------- --------------------------
<PAGE>
1
LICENSE AGREEMENT/SCHEDULE A
THIS AGREEMENT is entered into as of June 30th, 1988 by and between
------------------------------
SPECTRUM ENT. c/o OVERSEAS FILMGROUP, 8800 Sunset Blvd., # 302,
- --------------------------------------------------------------------------------
L.A., CA 90069 ("Owner/Licensor")
- --------------------------------------------------------------------------------
and RACING PICTURES, Via Dei Tre Orologi 10, 00197 Roma, Italy
---------------------------------------------------------------------------
("Distributor/Licensee).
- -------------------------------------------------------
As used in this Agreement, the following terms shall have the meanings
indicated:
----------------------------------------------------------------------
DEAL TERMS
Picture: SAKURA KILLERS starring Chuck Connors, directed by Richard Ward.
Territory: ITALY Only.
TERM: Seven (7) years commencing on June 30, 1988 .
---------------- ---------------------------------------
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES Only
Language version:
Italian Version only
Distribution Terms:
(a) Minimum Guarantee: USD 5,000.00 ,payable as follows:
--------------------------
USD 5,000.00 no later than ten (10) days
after delivery of acceptable
1" Master (at Distributor's
sole cost), and M&E Track on
loan.
PAYMENTS TO BE MADE TO OVERSEAS FILMGROUP INC.
Disposition of Gross Receipts:
THEATRICAL AND NON-THEATRICAL: Distributor is authorized to recoup distribution
expenses as per Article 6A. Thereafter, all gross receipts shall be divided
N/A to Licensor and N/A to Distributor.
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 20% of the gross wholesale price of such Video Device
and 20% of Distributor's gross receipts from any other form of Video Device
distribution.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid. Distributor is also authorized to recoup cost of
dubbing Picture into Italian.
INITIALS
/s/ RL /s/ AF
----------
<PAGE>
2
Holdbacks on exercise of rights retained by Licensor: Those checked below for
the duration indicated thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
-------------------------------------- ---------------
Holdbacks on exercise rights licensed herein: Those checked below, for the
duration indicate thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
-------------------------------------- ---------------
Distributor's Release Obligations: TO BE MUTUALLY AGREED UPON ONE MONTH PRIOR TO
RELEASE
Key Cities:
Minimum Initial Release:__________________cities, including at least
__________________Key Cities, not later than___________________months
after__________________________
Minimum Initial Print Order:_______________________________
Minimum Advertising Expenditures:_______________within________________months
after__________________________
Maximum Deductions For Advertising Expenditures:________________________________
Initial order of materials: Distributor hereby orders at least the materials
described in the attached Schedule of Initial Order of Materials (which, if
attached, is incorporate4 herein by reference).
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference).
Applicable law: CALIFORNIA
-----------------------------------
Additional Terms and Conditions:
Distributor is authorized to release picture through Image Video.
Licensor shall remain sole owner of Italian Soundtracks.
INITIALS
/s/ RL /s/ AF
----- -----
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: SCARED ALIVE starring Barry Dove, Rick Dean, Red McVay, produced and
directed by Bill Naud
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD15,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 3,000.00 Upon signature of this Agreement.
USD12,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery
at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market rate,
copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release Date
in each Media Licensed.
(e) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT/SCHEDULE A
THIS AGREEMENT is entered into as of June 30th, 1988 by and between
----------------------------
SPECTRUM ENT. c/o OVERSEAS FILMGROUP, 8800 Sunset Blvd., #302, L.A.,
- --------------------------------------------------------------------------------
CA 90069 ("Owner/Licensor")
- --------------------------------------------------------------------------------
and RACING PICTURES, Via Dei Tre Orologi 10 00197 Roma, Italy
---------------------------------------------------------------------------
("Distributor/Licensee").
- ----------------------------------------------------
As used in this Agreement, the following terms shall have the meanings
indicated:
----------------------------------------------------------------------
DEAL TERMS
Picture: SCARED ALIVE starring Barry Dove, directed by Bill Naud
Territory: ITALY Only.
TERM: Seven (7) years commencing on June 30, 1988 . The
--------------- -------------------------------
term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES Only
Language version:
Italian Version Only
Distribution Terms:
(a) Minimum Guarantee USD 3,000.00 payable as follows:
--------------------------------
USD 3,000.00 no later than ten (10)
days after delivery of
acceptable 1" Master (at
Distributor's sole cost),
and M&E Track on loan.
PAYMENTS TO BE MADE TO OVERSEAS FILMGROUP INC
Disposition of Gross Receipts:
THEATRICAL AND NON-THEATRICAL: Distributor is authorized to recoup distribution
expenses as per Article 6A. Thereafter, all gross receipts shall be divided
N/A to Licensor and N/A to Distributor.
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 20% of the gross wholesale price of such Video Device
and 20% of Distributor's gross receipts from any other form of Video Device
distribution.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid. Distributor is also authorized to recoup cost of
dubbing Picture into Italian.
INITIALS
/s/ RL /s/ AF
----- -----
<PAGE>
2
Holdbacks on exercise of rights retained by Licensor: Those checked below for
the duration indicated thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
-------------------------------------- ---------------
Holdbacks on exercise rights licensed herein: Those checked below, for the
duration indicate thereafter:
[ ] Free Television Distribution Rights. Duration: N/A
---------------
[ ] Pay Television Distribution Rights. Duration: N/A
---------------
[ ] Video Cassette and Disc Distribution Rights. Duration: N/A
---------------
[ ] Other: Duration: N/A
-------------------------------------- ---------------
Distributor's Release Obligations: TO BE MUTUALLY AGREED UPON ONE MONTH PRIOR TO
RELEASE.
Key Cities:
Minimum Initial Release:____________________cities, including at least
_____________Key Cities, not later than months after____________________________
Minimum Initial Print Order:______________________________
Minimum Advertising Expenditures:__________________within__________________
months after________________________________________
Maximum Deductions For Advertising Expenditures:________________________________
Initial order of materials: Distributor hereby orders at least the materials
described in the attached Schedule of Initial Order of Materials (which, if
attached, is incorporate4 herein by reference).
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
licensor Approvals (which, if attached, is incorporated herein by reference).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
Distributor is authorized to release picture through Image Video.
Licensor shall remain sole owner of Italian Soundtracks.
INITIALS
/s/ RL /s/ AF
----- -----
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: SHAPE UP starring Daniel greene, Alice Moore, produced by Jose Frade,
directed by Marice Tobias.
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD 6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery
at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___.
Minimum Initial Print Order: N/A
Minion Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market rate,
copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release Date
in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little
- -------------------------------------- -------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: SIGHT UNSEEN starring Susan Blakely, Edward Albert, producer Richard
L. Albert, director Greydon Clark.
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD45,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD9,000.00 Upon signature of this Agreement.
USD36,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: THROUGH THE FIRE starring Tamara Hext, Tom Campitelli, Randy
Strickland, directed by Gary Marcum
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD25,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD5,000.00 Upon signature of this Agreement.
USD20,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: TRAINED TO KILL starring Chuck Connors, Henry Silva , Frank Zagarino,
directed by H. K. Dyle
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD35,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD7,000.00 Upon signature of this Agreement.
USD28,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between A & Z Co.,
LTD. c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA
90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10,
00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: TREASURES OF THE LOST DESERT starring Bruce Miller, Susan West,
producer/director Tony Zarindast
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____ .
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Spectrum
Entertainment Group PLC c/o Overseas Filmgroup Inc., 8800 Sunset Blvd. Ste. 302,
Los Angeles, CA 90069, ("Owner/Licensor") and Racing Pictures, s.r.l., Via dei
tre Orologi 10, 00197 Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691)
("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: WHITE PHANTOM starring Jay Roberts, Jr., Bo Swenson, directed by Dusty
Nelson
Territory: ITALY ONLY.
Term: Six (12) years commencing on January 1, 1989 and ending on January 1,
2001. The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD30,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD6,000.00 Upon signature of this Agreement.
USD24,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT / SCHEDULE A
THIS AGREEMENT is entered into as of April 30, 1991 by and between Overseas
Filmgroup Inc., 8800 Sunset Blvd. Ste. 302, Los Angeles, CA 90069,
("Owner/Licensor") and Racing Pictures, s.r.l., Via dei tre Orologi 10, 00197
Roma, Italy (Tel 39 6 808 3645, Fax 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: Z MAN starring Toby Alejar, Bon Vibar, Lia Barretto, directed by Rico
Maria Llarde
Territory: ITALY ONLY.
Term: 11 1/2 years commencing on January 1, 1989 and ending on July 1, 2001.
The term shall be subject to events of force majeure.
The rights licensed herein: VIDEOGRAMMES, PAY & FREE TELEVISION ONLY.
Language version: ITALIAN DUBBED LANGUAGE VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version other
than the dubbed version authorized herein.
Distribution Terms:
(a) Minimum Guarantee: USD20,000.00, [see Additional Terms & Conditions (f)],
NET, payable as follows:
USD4,000.00 Upon signature of this Agreement.
USD16,000.00 Within forty-five (45) days notification by Licensor that
materials are ready for delivery at Distributor's own cost.
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 Century Park East, Los Angeles, CA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
Disposition of Gross Receipts:
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (Twenty-Five Percent) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (Twenty-Five
Percent) of Distributor's gross receipts from any other form of Video Device
distribution.
PAY & FREE TELEVISION: 75% (Seventy-Five Percent) to Licensor and 25% (Twenty-
Five Percent) to Distributor. Distribution expenses as per Article 6A to be
deducted from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Delivery: THIS PICTURE IS AVAILABLE FOR IMMEDIATE DELIVERY.
Key Cities:
Minimum Initial Release: N/A cities, including at least ____ Key Cities, not
later than ____ months after ____.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ____ months after ____.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Distributor hereby orders at least 1 - 35mm Print
and separate soundtrack and/or one (1) 1" SUB MASTER video tape.
Additional Licensor approvals: Licensor shall have the additional approval
and/or consultation rights described in the attached Schedule of Additional
Licensor Approvals (which, if attached, is incorporated herein by reference.).
Applicable law: CALIFORNIA
Additional Terms and Conditions:
(a) Reporting shall be quarterly.
(b) Distributor grants to Licensor the right to purchase at current market
rate, copies of the subtitled and/or dubbed versions, posters, etc., created by
Distributor; at Licensor's sole cost and expense.
(c) Distributor shall supply Licensor with two (2) Free VHS copies of the
Release Videocassette in the Original Packaging as created by Distributor plus
two (2) copies of the Video Slick.
(d) Distributor shall only license to stations the telecast of which is
transmitted from within the licensed territory and the signal of which is
received primarily inside the licensed territory.
(e) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(f) Nothwithstanding "Article (b) Paragraph 12" of the standard terms and
conditions hereunder, Licensee is authorized to deduct the withholding tax of 8%
(Eight Percent) between the USA and Italy. All other standard terms and
conditions remain in force.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ Robert Little /s/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES S.R.L., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: AFTERSHOCK starring Jay Roberts Jr., Richard Lynch, Christopher
Mitchum, and John Saxon.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$50,000.00 NET (US$54,347.83 Gross less 8% withholding tax)
payable as follows:
(a) US$ 5,000.00 UPON SIGNATURE OF THIS AGREEMENT; and
(b) US$ 45,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of which
is transmitted from within the licensed territory and the signal of which
is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions along
with the name, address, phone and fax of Sub-Licensee. Nothing herein
contained shall be construed as permission to reduce the amounts payable to
Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to pay
any remittance or withholding tax on amounts due Licensor other than the
Guarantee, then Distributor will provide Licensor with all documentation
indicating Distributor's payment of the required amount on Licensor's
behalf before deducting Distributor's payment from any sums due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/S/ Robert Little /S/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") (Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES S.R.L., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: ALL DOWN THE LINE starring Dave Macauley, Jeff Booth, Daniel Wills,
directed by Paul Wilzig.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$15,000.00 NET (US$16,304.35 Gross less 8% withholding tax)
payable as follows:
(a) US$ 1,500.00 UPON SIGNATURE OF THIS AGREEMENT; and
(b) US$ 12,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of which
is transmitted from within the licensed territory and the signal of which
is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions along
with the name, address, phone and fax of Sub-Licensee. Nothing herein
contained shall be construed as permission to reduce the amounts payable to
Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to pay
any remittance or withholding tax on amounts due Licensor other than the
Guarantee, then Distributor will provide Licensor with all documentation
indicating Distributor's payment of the required amount on Licensor's
behalf before deducting Distributor's payment from any sums due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/S/ ROBERT LITTLE /S/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") (Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES S.R.L., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: BLIND TERROR starring Richard Beymer. Bill Mosely, directed by Monte
Hellman.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; and
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of which
is transmitted from within the licensed territory and the signal of which
is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions along
with the name, address, phone and fax of Sub-Licensee. Nothing herein
contained shall be construed as permission to reduce the amounts payable to
Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to pay
any remittance or withholding tax on amounts due Licensor other than the
Guarantee, then Distributor will provide Licensor with all documentation
indicating Distributor's payment of the required amount on Licensor's
behalf before deducting Distributor's payment from any sums due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/S/ ROBERT LITTLE /S/ ALESSANDRO FRACASSI
- ------------------------------ ----------------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") (Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES S.R.L., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: BLUE DESERT starring Courtney Cox, D.B. Sweeney, Craig Sheffer,
directed by Bradley Battersby.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$120,000.00 NET (US$130,434.78 Gross less 8% withholding
tax) payable as follows:
(a) US$ 12,000.00 UPON SIGNATURE OF THIS AGREEMENT; and
(b) US$ 108,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of which
is transmitted from within the licensed territory and the signal of which
is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions along
with the name, address, phone and fax of Sub-Licensee. Nothing herein
contained shall be construed as permission to reduce the amounts payable to
Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to pay
any remittance or withholding tax on amounts due Licensor other than the
Guarantee, then Distributor will provide Licensor with all documentation
indicating Distributor's payment of the required amount on Licensor's
behalf before deducting Distributor's payment from any sums due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/S/ Robert Little /S/ Alessandro Fracassi
- ------------------------------ ----------------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") (Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: CAME A HOT FRIDAY starring Peter Bland, Philip Gordon, and
Michael Lawrence.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums due
Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------------ ------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: CTHULU MASION a.k.a. BLACK MAGIC MANSION starring Frank Finley,
Marcia Layton, Brad Fisher, Melanie Shatner, directed by J.P. Simon.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$50,000.00 NET (US$54,347.83 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums due
Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT lITTLE /s/ ALESSANDRO fRACASSI
- ------------------------------------ ------------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: DANGER ZONE III starring Jason Williams, Robert Random; Directed
by Douglas Bronco.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$25,000.00 NET (US$27,173.92 Gross less 8% withholding tax)
payable as follows:
(a) US$ 2,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 22,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal
of which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------------ -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between
OVERSEAS FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: DEADLY DECEPTION starring Clare Hoak, Andrew Stevens, Lloyd
Bochner, directed by Anthony J. Loma.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$40,000.00 NET (US$43,478.26 Gross less 8% withholding tax)
payable as follows:
(a) US$ 4,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 36,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal
of which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums due
Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ----------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: DEATH IN BRUNSWICK starring Sam Neill, Zoe Carides, and John
Clarke. Directed by John Ruane.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$100,000.00 NET (US$108,695.65 Gross less 8% withholding
tax) payable as follows:
(a) US$ 10,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 90,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums due
Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------------ -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: DUMB LUCK IN VEGAS starring Joey Travolta, Jeff Conaway, Frank
Sivero, directed by Raymond Martino.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$45,000.00 NET (US$49,913.04 Gross less 8% withholding tax)
payable as follows:
(a) US$ 4,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 40,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums due
Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no additional
charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: DYING TIME starring Jimmy Stathis, Deborah Downey and Paul Drake,
directed by Allan Kuskowski.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as well
as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER FULL
PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR during the
term of this Agreement provided that Licensee and Sub-Licensee jointly and
severally remain fully responsible for all obligations, warranties and
representations hereunder. Once any Sub-License agreement has been made,
Licensee shall notify Licensor in writing of its terms and conditions
along with the name, address, phone and fax of Sub-Licensee. Nothing
herein contained shall be construed as permission to reduce the amounts
payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed on
March 01, 1990, is incorporated herein by this reference and by signature
below Distributor acknowledges that they have been read and agrees to be
bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ---------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: EDGE OF HONOR starring Cory Feldman, Meredith Salenger, Scott
Reeves, Ken Jenkins, Don Swayze.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: PAY AND FREE TELEVISION only, subject to delivery of
the Picture to Licensor and payment of the Minimum Guarantee by Licensee as
provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(b) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(c) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(d) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
<PAGE>
2
(e) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(f) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: FISTFIGHTER starring George Rivero, Mike Connors, and Edward
Albert. Directed by Frank Zuniga.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$70,000.00 NET (US$76,086.96 Gross less 8% withholding tax)
payable as follows:
(a) US$ 7,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 63,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------ -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: GIRL TALK starring Liz Torres, Dari Michaelson, Deanna Lund, Jane
Wald, Lauren Chiles.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$15,000.00 NET (US$16,304.35 Gross less 8% withholding tax)
payable as follows:
(a) US$ 1,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 13,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: HYDRA starring Timothy Bottoms, Jared Martin, Taryn Power, Jack
Taylor, directed by Gergoru Greens.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH
01, 2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: INSTANT KARMA starring Craig Sheffer, Chelsea Noble, and David
Cassidy. Directed by Roderick Taylor.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$35,000.00 NET (US$38,043.48 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 31,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: INVISIBLE MANIAC starring Noel Peters, Shannon Wilsey, Mellosa
Moore, Robert R. Ross, Rod Sweitzer, Jason Logan.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$20,000.00 NET (US$21,739.13 Gross less 8% withholding tax)
payable as follows:
(a) US$ 2,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 18,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: JOBMAN starring Kevin Smith, Tertius Meintjies, and Lynn Gaines.
Directed by Darrell Roodt.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$25,000.00 NET (US$27,173.91 Gross less 8% withholding tax)
payable as follows:
(a) US$ 2,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 22,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax
all wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: LOWER LEVEL starring Elizabeth Gracen, David Bradley and Jeff
Yeager; directed by Kristine Peterson.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: PAY AND FREE TELEVISION only, subject to delivery of
the Picture to Licensor and payment of the Minimum Guarantee by Licensee as
provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$75,000.00 NET (US$81,521.74 Gross less 8% withholding tax)
payable as follows:
(a) US$ 7,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 67,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(b) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(c) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(d) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
<PAGE>
2
(e) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(f) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
1
LICENSE AGREEMENT/SCHEDULE A
THIS AGREEMENT is entered into as of NOVEMBER 1, 1991 by and between OVERSEAS
FILMGROUP INC., 8800 SUNSET BLVD. STE. 302, LOS ANGELES, CA 90069,
("Owner/Licensor") and RACING PICTURES, VIa Dei Tre Orologi 10, 00197 ROMA,
ITALY (TEL 39 6 808 3654, FAX 39 6 808 8691) ("Distributor/Licensee").
As used in this Agreement, the following terms shall have the meaning indicated:
DEAL TERMS
Picture: MANIAC COP III, WRITTEN BY LARRY COHN AND DIRECTED BY WILLIAM LUSTIG.
Territory: ITALY AND ITALIAN SPEAKING MALTA ONLY.
Term: TEN (10) years commencing on DELIVERY. The term shall be subject to
events of force majeure.
The rights licensed herein: THEATRICAL, NON-THEATRICAL, VIDEOGRAMME, TELEVISION
(INCLUDING SATELLITE TRANSMISSION LIMITED TO AN ENCRYPTED OR SCRAMBLED SIGNAL
ONLY) AND ANCILLARY.
Language version: ITALIAN DUBBED ONLY. Distributor shall have an exclusive
license throughout the world in the Italian Language version of the picture
PROVIDED THAT distributor shall only exploit such version within the licensed
territory. Distributor agrees to make at its sole cost and expense such dubbed
version of the picture. Distributor is expressly prohibited from exploiting any
language version other than the dubbed version authorized herein.
DISTRIBUTION TERMS:
(a) MINIMUM GUARANTEE: USD 250,000.00, gross (including 8% withholding tax),
payable as follows:
USD 25,000.00 WITHIN FIFTEEN (15) DAYS OF FORMAL ADVICE STATING THE START
DATE OF PRINCIPAL PHOTOGRAPHY.
USD 25,000.00 UPON NOTIFICATION THAT PRINCIPAL PHOTOGRAPHY HAS BEGUN.
USD 25,000.00 UPON NOTIFICATION THAT PRINCIPAL PHOTOGRAPHY HAS BEEN
COMPLETED.
USD175,000.00 UPON DELIVERY OF THE 35 MM INTERNEGATIVE AND M & E "ON
LOAN" FOR SIXTY (60) DAYS.
(ALL SHIPPING AND OTHER MATERIALS ARE AT
DISTRIBUTOR'S OWN COST.)
BANKING INFORMATION FOR WIRE TRANSFERS:
MERCANTILE NATIONAL BANK
1840 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067
ACCOUNT OF: OVERSEAS FILMGROUP, INC., ACCOUNT # 002-203081
PLEASE REFERENCE FILM TITLE
LICENSOR'S ASSIGNMENT FOR FINANCING PURPOSES. If Licensor elects to assign or
pledge this Agreement or Licensor's right to receive any payment to a lender or
other person as security for or in consideration of any loan or other
obligation, then Distributor will promptly on request execute a reasonable and
customary standard form Notice of Assignment, Acceptance and Acknowledgement by
Distributor, or similiar document as necessary to establish or perfect the
lender's interest to secure its rights. Distributor agrees to abide by
consistent written instuctions from Licensor and such lender with regard to
making any payments otherwise due Licensor to such lender. Distributor agrees
not to assert any offset rights against such lender or to assert any rights it
may have against Licensor to delay or diminish the payment of any sums assigned
or pledged to such lender, but instead to treat such offsets or rights as a
separate and unrelated matter soley between Licensor and Distributor.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------- ----------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
2
Disposition of Gross Receipts:
THEATRICAL AND NON-THEATRICAL: Distributor is authorized to recoup distribution
expenses as per Article 7A, cost off the top. Thereafter, all gross receipts
shall be divided 50% (FIFTY) to Licensor and 50% (FIFTY) to Distributor.
VIDEOGRAMMES: With respect to each Video Device sold, Distributor shall pay
Licensor a sum equal to 25% (TWENTY-FIVE PERCENT) of the Distributor's gross
wholesale price of such Video Device sold by Distributor and 25% (TWENTY-FIVE
PERCENT) of Distributor's gross receipts from any other form of Video Device
distribution.
TELEVISION: 70% (SEVENTY PERCENT) to Licensor and a 30% (THIRTY PERCENT)
COMMISSION to Distributor.
ANCILLARY: 70% (SEVENTY PERCENT) to Licensor and a 30% (THIRTY PERCENT)
COMMISSION to Distributor.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
Key Cities:
Minimum Initial Release: N/A cities, including at least ___ Key Cities, not
later than ___ months after ___.
Minimum Initial Print Order: N/A
Minimum Advertising Expenditures: N/A within ___ months after ___.
Maximum Deductions for Advertising Expenditures: N/A
Initial order of materials: Licensor hereby agrees to make one (1) - 35mm
Internegative and 35 mm Music & Effects Soundtrack available to Distributor "On
Loan" for Sixty (60) days.
Applicable Law and Forum: CALIFORNIA
Additional Terms and Conditions:
(a) REPORTING SHALL BE QUARTERLY FOR THE FIRST TWO (2) YEARS AND
BI-ANNUALLY THEREAFTER.
(b) DISTRIBUTOR GRANTS TO LICENSOR THE RIGHT TO PURCHASE AT CURRENT
MARKET RATE, COPIES OF THE DUBBED VERSION, POSTERS, ETC., CREATED BY
DISTRIBUTOR; AT LICENSOR'S SOLE COST AND EXPENSE.
(c) DISTRIBUTOR SHALL SUPPLY LICENSOR WITH TWO (2) FREE VHS COPIES OF
THE RELEASE VIDEOCASSETTE IN THE ORIGINAL PACKAGING AS CREATED BY DISTRIBUTOR
PLUS TWO (2) COPIES OF THE VIDEO SLICK.
(d) DISTRIBUTOR SHALL ONLY LICENSE TO STATIONS THE TELECAST OF WHICH
IS TRANSMITTED FROM WITHIN THE LICENSED TERRITORY AND THE SIGNAL OF WHICH IS
RECEIVED PRIMARILY INSIDE THE LICENSED TERRITORY.
(e) DISTRIBUTOR SHALL ADVISE LICENSOR IMMEDIATELY IN WRITING OF THE
RELEASE DATE IN EACH MEDIA LICENSED.
(f) LICENSEE IS AUTHORIZED TO SUB-LICENSE THE RIGHTS GRANTED HEREIN
DURING THE TERM OF THIS AGREEMENT PROVIDED THAT LICENSEE AND SUB-LICENSEE
JOINTLY AND SEVERALLY REMAIN FULLY RESPONSIBLE FOR ALL OBLIGATIONS, WARRANTIES
AND REPRESENTATIONS HEREUNDER. ONCE ANY SUB-LICENSE AGREEMENT HAS BEEN MADE,
LICENSEE SHALL NOTIFY LICENSOR IN WRITING IMMEDIATELY.
(g) STANDARD TERMS AND CONDITIONS AND A SCHEDULE OF DEFINITIONS ARE
ATTACHED AND INCORPORATED HEREIN BY THIS REFERENCE.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- ------------------------------- ----------------------------------
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between
OVERSEAS FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: MOON 44 starring Michael Pare, Lisa Eichhorn, Malcolm McDowell,
directed by Roland Emmerich.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$125,000.00 NET (US$135,869.56 Gross less 8% withholding
tax) payable as follows:
(a) US$ 12,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 112,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: OMEGA COP starring Ron Marchini, Adam West, Meg Thayler, Stuart
Whitman, directed by Paul Kyriazi.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: POPULATION ONE starring Tomata DuPLenty, Sheela Edwards, written
& directed by Rene Daalder.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$5,000.00 NET (US$5,434.78 Gross less 8% withholding tax)
payable as follows:
(a) US$ 500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 4,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: ROAR starring Tippi Hedren, Melanie Griffith, John Marshall,
written & directed by Noel Marshall.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: PAY AND FREE TELEVISION only, subject to delivery of
the Picture to Licensor and payment of the Minimum Guarantee by Licensee as
provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: SON OF DARKNESS starring Rosalind Allen, Steve Bond, Scott
Jacoby, Michael Praed, Jay Underwood & Amanda Wyss.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on NOVEMBER 01, 1991 and ending on OCTOBER 31,
2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$75,000.00 NET (US$81,521.74 Gross less 8% withholding tax)
payable as follows:
(a) US$ 7,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 67,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: SOULMATES A.K.A. ETERNAL DESIRE starring Tristan Rogers,
Arabella Holzbog and Tyrone Power, Jr., directed by Thunder Levin.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$30,000.00 NET (US$32,608.70 Gross less 8% withholding tax)
payable as follows:
(a) US$ 3,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 27,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: STRIKEBOUND starring Chris Haywood, Carol Burns, directed by
Richard Lowenstein.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$25,000.00 NET (US$27,173.91 Gross less 8% withholding tax)
payable as follows:
(a) US$ 2,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 22,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: THE SURFER starring Gary Day, Gosia Dobrowolska, directed by
Frank Shields.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$25,000.00 NET (US$27,173.91 Gross less 8% withholding tax)
payable as follows:
(a) US$ 2,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 22,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: TIMESCAPE A.K.A THE GRAND TOUR starring Jeff Daniels, and Ariana
Richards. Directed by David N. Twohy.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: THEATRICAL, VIDEO, PAY AND FREE TELEVISION only,
subject to delivery of the Picture to Licensor and payment of the Minimum
Guarantee by Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$350,000.00 NET (US$380,434.78 Gross less 8% withholding
tax) payable as follows:
(a) US$ 35,000.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 315,000.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
THEATRICAL: Distributor is authorized to recoup distribution expenses as per
Article 6 (a), costs off the top. Thereafter, all gross receipts shall be
divided 50% (FIFTY PERCENT) to Licensor and 50% (FIFTY PERCENT) to Distributor.
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 3O% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
<PAGE>
2
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of SEPTEMBER 01, 1991 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: VOYAGE OF THE HEART starring Bill Ackridge, Dunja Djordjevic,
and Geoffrey Dunn.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on SEPTEMBER 01, 1991 and ending on AUGUST
31, 2001. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$15,000.00 NET (US$16,304.35 Gross less 8% withholding tax)
payable as follows:
(a) US$ 1,500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 13,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
2
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
LICENSE AGREEMENT
THIS AGREEMENT is entered into as of MARCH 01, 1990 by and between OVERSEAS
FILMGROUP, INC., 8800 Boulevard, Suite 302, Los Angeles, CA 90069
("Owner/Licensor") and RACING PICTURES s.r.l., Via dei Tre Orologo, 10, 00197
Rome, Italy ("Distributor/Licensee").
As used in this Agreement, the following term shall have the meaning indicated:
DEAL TERMS
PICTURE: WHAT HAPPENED TO KEROUAC? Featuring Jack Kerouac, directed by
Richard Lerner & Lewis MacAdam.
TERRITORY: ITALY ONLY.
TERM: TEN (10) YEARS commencing on MARCH 01, 1990 and ending on MARCH 01,
2000. The term shall be subject to events of force majeure.
THE RIGHTS LICENSED HEREIN: VIDEO, PAY AND FREE TELEVISION only, subject to
delivery of the Picture to Licensor and payment of the Minimum Guarantee by
Licensee as provided below.
LANGUAGE VERSION: ITALIAN LANGUAGE DUBBED VERSION ONLY. Distributor agrees to
make at its sole cost and expense such dubbed version of the Picture.
Distributor is expressly prohibited from exploiting any language version of the
picture other than the ITALIAN dubbed version authorized hereunder.
MINIMUM GUARANTEE: US$5,000.00 NET (US$5,434.78 Gross less 8% withholding tax)
payable as follows:
(a) US$ 500.00 UPON SIGNATURE OF THIS AGREEMENT; AND
(b) US$ 4,500.00 Prior to delivery of Picture, but not later than
JANUARY 01, 1992.
BANKING INFORMATION FOR WIRE TRANSFERS:
City National Bank
400 North Roxbury Drive, Suite 100, Beverly Hills, CA 90210
Account of OVERSEAS FILMGROUP INC.
ABA No.: 122 016 066; Account No.: 001 120 891
Please reference the film title on the wire transfer authorization and fax all
wire transfer information to Mr. Mansour Mostaedi, Senior VP of Finance &
Accounting; Fax: 310-855-0719.
DISPOSITION OF GROSS RECEIPTS
VIDEO: With respect to each Video Device Sold, Distributor shall pay Licensor a
sum equal to 25% (TWENTY-FIVE) of the gross wholesale price of such Video Device
and 25% (TWENTY-FIVE) of Distributor's gross receipts from any other form of
Video Device distribution.
PAY AND FREE TELEVISION: 70% (SEVENTY PERCENT) to Licensor and 30% (THIRTY
PERCENT) to Distributor. Distribution expenses as per Article 6A to be deducted
from Licensor's share.
RECOUPMENT OF THE ADVANCED MINIMUM GUARANTEE: Distributor is authorized to
recoup the advanced minimum guarantee from Licensor's share of gross receipts in
the amount of the equivalent local currency at the date when the advanced
minimum guarantee is paid.
APPLICABLE LAW: California
ADDITIONAL TERMS AND CONDITIONS
(a) The name and logo of OVERSEAS FILMGROUP, INC. shall appear on all
advertising of titles and on the video cassette and disc cartons in a
prominent position as an "OVERSEAS FILMGROUP PRESENTATION".
(b) Distributor shall supply Licensor with two (2) VHS copies of the Release
Videocassette in the Original Packaging as created by Distributor, as
well as the trailer, in the dubbed and/or subtitled version. Thereafter,
Distributor grants to Licensor the right to purchase at laboratory cost,
additional copies of the subtitled and/or dubbed versions, posters, etc.,
created by Distributor.
(c) Distributor shall only license to Television Stations the telecast of
which is transmitted from within the licensed territory and the signal of
which is received within the licensed territory.
(d) Distributor shall advise Licensor immediately in writing of the Release
Date in each Media Licensed.
<PAGE>
(e) Licensee is authorized to Sub-License the rights granted herein AFTER
FULL PAYMENT OF THE MINIMUM GUARANTEE HAS BEEN RECEIVED BY LICENSOR
during the term of this Agreement provided that Licensee and Sub-Licensee
jointly and severally remain fully responsible for all obligations,
warranties and representations hereunder. Once any Sub-License agreement
has been made, Licensee shall notify Licensor in writing of its terms and
conditions along with the name, address, phone and fax of Sub-Licensee.
Nothing herein contained shall be construed as permission to reduce the
amounts payable to Licensor.
(f) That certain document, the Standard Terms and Conditions, fully executed
on March 01, 1990, is incorporated herein by this reference and by
signature below Distributor acknowledges that they have been read and
agrees to be bound by them.
(g) No taxes (other than withholding taxes identified in the Distribution
Terms) or other charges may be deducted from the Minimum Guarantee. If
Distributor is required to pay withholding tax, a copy of the legal tax
certificate must be sent to the Licensor. If Distributor is required to
pay any remittance or withholding tax on amounts due Licensor other than
the Guarantee, then Distributor will provide Licensor with all
documentation indicating Distributor's payment of the required amount on
Licensor's behalf before deducting Distributor's payment from any sums
due Licensor.
(h) Distributor will give Licensor access to any dubbed tracks at no
additional charge.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
/s/ ROBERT LITTLE /s/ ALESSANDRO FRACASSI
- -------------------------------- -----------------------------
OVERSEAS FILMGROUP, INC. RACING PICTURES SRL
("Owner/Licensor") ("Distributor/Licensee")
<PAGE>
Racing Pictures srl Agreement
As of September 12, 1996
Page 6
EXHIBIT "D"
<PAGE>
As of July 1, 1990
Alessandro Fraccassi
Racing Pictures s.r.l.
Via dei Tre Orologi, 10
00197 Roma
Re: "WORLD CUP ITALIA 90"/DEAL MEMO
-------------------------------
Dear Alessandro:
This will confirm the principal terms of the agreement between
the undersigned OVERSEAS FILMGROUP, INC. ("Overseas") and RACING PICTURES
S.R.L.("Producer") with respect to Overseas' acquisition of distribution rights
in the above-referenced motion picture ("Picture"), as follows:
1. RIGHTS GRANTED TO OVERSEAS:
(a) MEDIA - All media, whether now known or
hereafter invented.
(b) TERRITORY - The Universe excluding Italy.
(c) TERM - Commencing on the date hereof and
continuing thereafter in perpetuity.
2. GROSS RECEIPTS: All nonreturnable sums received by Overseas
from distribution of the Picture ("Gross Receipts") shall be applied as follows
in accordance with the indicated order of priority:
(a) FIRST, Overseas shall retain distribution
fees computed as provided in paragraph 5 below.
(b) SECOND, Overseas shall recoup an amount equal to (i) all
distribution expenses incurred by Overseas in connection with the distribution
and exploitation of the Picture, plus (ii) an overhead allowance equal to ten
percent (10%) of all such distribution expenses, plus (iii) interest on the
foregoing computed at a rate ("Interest Rate") equal
<PAGE>
to two percent (2%) over the prime rate charged from time to time by Overseas'
principal bank.
(c) THIRD, All remaining Gross Receipts after
the deductions and. payments provided for in (a) and (b) above shall be paid to
Producer.
3. DISTRIBUTION FEES: Overseas shall be entitled to deduct and
retain a distribution fees of twenty percent (20%) of al1 gross receipts on
sales of the picture.
4. DELIVERY: Delivery shall be in accordance with Overseas' standard
terms and shall include all items set forth in Exhibit "A" attached hereto and
incorporated herein by this reference, subject to such additions and deletions
as may be agreed to in writing by Overseas and Producer. In addition, Producer
shall provide Overseas with a video trailer, key art, press kits, a reasonable
selection of still photos and other promotional materials of first class quality
as required by Overseas. Overseas may itself create any delivery or promotional
items described above which Producer fails to deliver or which are
unsatisfactory to Overseas, it being agreed that the costs and expenses incurred
by Overseas in connection therewith may be recouped by Overseas as a
distribution expense hereunder, at Overseas' sole discretion.
5. THIRD PARTY OBLIGATIONS: Producer shall be solely responsible for
all third party payments, including, without limitation, all production costs,
deferments, profit participations, royalty payments, music synchronization or
other music costs, license fees, and any residual, supplemental market or other
payments to any guild or union.
6. WARRANTY: Producer represents and warrants that it owns all
rights herein assigned to Overseas, that such rights are not the subject of any
encumbrance, claim or litigation, and that Overseas may freely exploit such
rights without interference from any person or entity and without violating the
rights of any others.
7. All other terms shall be Overseas' standard terms and conditions
(including, without limitation, delivery, accounting, representations,
warranties and indemnity) .
The parties anticipate entering into a long-form agreement with
respect to the foregoing. However, until such time as the long-form agreement is
entered into (if ever), this letter agreement shall constitute a binding
agreement between Overseas and Producer.
2
<PAGE>
Please indicate your agreement to the foregoing by executing this
agreement in the space provided below.
Very truly yours,
OVERSEAS FILMGROUP, INC.
By /s/ Robert Little
------------------------------------------
Its
----------------------------------------
ACCEPTED AND AGREED TO:
Producer
By /s/ Alessandro Fraccassi
-------------------------
Its
-----------------------
1
<PAGE>
EXHIBIT "A"
DELIVERY ELEMENTS
-----------------
1. One (1) complete original 35mm negative of the feature as finally cut,
edited and assembled, with main and end titles together with the
original magnetic English language soundtrack including music effects and
dialogue contained in the edited final form of the feature
synchronized therewith each without scratches or injury and in all respects
ready to serve in the manufacture of release materials of first class
technical quality.
2. One (1) complete 35mm picture negative of the textless backgrounds of the
main and end titles and all written captions appearing in the feature.
3. One (1) complete 35mm optical soundtrack negative of the feature.
4. One (1) complete 35mm inter-positive of the feature.
5. One (1) complete 35mm inter-negative of the feature complete with
combined titles.
6. One (1) 35mm inter-positive of textless background of main and end titles
and all inserts of the feature.
7. One (1) 35mm inter-negative of textless background of main and end titles
and all inserts of the feature.
8. One (1) 35mm magnetic 3-stripe of the feature (with separate music,
effects and dialogue tracks). If Dolby, we require additional 35mm
magnetic 4-track stereo of feature and trailers with separate music,
effects and dialogue tracks.
9. One (1) 35mm low-contrast print of the feature.
10. One (1) NTSC 1" videotape master and one (1) PAL 1" videotape master
of the feature.
11. One (1) 1/4" or 1/2" magnetic tape of all music score in the feature.
EXHIBIT "A"
A-1
<PAGE>
EXHIBIT "A"
(continued)
12. All sound and pre-print materials of the television version of the feature.
13. One (1) 35mm release print of the feature.
14. Two (2) dialogue/continuity lists of feature.
15. Two (2) music cue sheets.
16. Twenty (20) signed original certificates of origin.
17. Twenty (20) original notarized affidavits of rights (in Overseas' customary
form).
18. Two (2) credit lists as on screen.
19. Two (2) foreign theatrical advertising credits.
20. One (1) full set (at least 75 different stills) of black and white
negatives.
21. One (1) full set (at least 50 different stills) of color negatives.
22. One (1) sample of publicity materials (one sheet posters, etc.), if and
when available.
23. Production notes including biographies of stars, crew and directors.
24. One (1) Laboratory Access Letter (in Overseas' customary form).
25. One (1) NTSC 3/4 inch video cassette of feature and trailer.
26. One (1) Certificate of United States Copyright Registration for the
Picture, or if not yet available, a copy of the application therefor
accompanied by the letter of transmittal to the U.S. Copyright Office.
27. One (1) Certificate of United States Copyright Registration for
the screenplay, or if not yet available, a copy of the application therefor
accompanied by the letter of transmittal to the U.S. Copyright Office.
28. One (1) Certificate of Errors and Omissions insurance coverage for the
feature issued by a carrier approved by Overseas, fully prepaid for 3
years commencing upon delivery of the feature to Overseas, naming
Overseas as
EXHIBIT "A"
A-2
<PAGE>
EXHIBIT "A"
(continued)
an additional insured with coverage amounts not less than $1,000,000/
$3,000,000 and having a deductible not exceeding $10,000. Said
insurance policy shall provide for notification to Overseas not later than
30 days prior to any cancellation or change in coverage.
29. One (1) MPAA rating certificate.
30. All literary and music chain of title and other clearance documentation
for the feature in form and substance satisfactory to Overseas.
All delivery items to be delivered to Overseas Filmgroup, Inc., 8800 Sunset
Boulevard, Suite 302, Los Angeles, California 90069.
3
<PAGE>
As of July 1, 1990
Alessandro Fraccassi
Racing Pictures s.r.l.
Via dei Tre Orologi, 10
00197 Roma
Re: "SOCCER SPECTACULAR - THE ROAD TO ROME"/DEAL MEMO
-------------------------------------------------
Dear Alessandro:
This will confirm the principal terms of the agreement between
the undersigned Overseas Filmgroup, Inc. ("Overseas") and Racing Pictures
s.r.l.("Producer") with respect to Overseas' acquisition of distribution rights
in the above-referenced motion picture ("Picture"), as follows:
1. RIGHTS GRANTED TO OVERSEAS:
(a) MEDIA - All media, whether now known or
hereafter invented.
(b) TERRITORY - The Universe excluding Italy.
(c) TERM - Commencing on the date hereof and
continuing thereafter in perpetuity.
2. GROSS RECEIPTS: All nonreturnable sums received by
Overseas from distribution of the Picture ("Gross Receipts") shall be applied as
follows in accordance with the indicated order of priority:
(a) FIRST, Overseas shall retain distribution
fees computed as provided in paragraph 5 below.
(b) SECOND, Overseas shall recoup an amount equal to (i) all
distribution expenses incurred by Overseas in connection with the distribution
and exploitation of the Picture, plus (ii) an overhead allowance equal to ten
percent (10%) of all such distribution expenses, plus (iii) interest on the
foregoing computed at a rate ("Interest Rate") equal
<PAGE>
to two percent (24) over the prime rate charged from time to time by Overseas'
principal bank.
(c) THIRD, All remaining Gross Receipts after
the deductions and payments provided for in (a) and (b) above shall be paid to
Producer.
3. DISTRIBUTION FEES: Overseas shall be entitled to deduct and
retain a distribution fees of twenty percent (20%) of all gross receipts on
sales of the picture.
4. DELIVERY: Delivery shall be in accordance with Overseas' standard
terms and shall include all items set forth in Exhibit "B" attached hereto and
incorporated herein by this reference, subject to such additions and deletions
as may be agreed to in writing by Overseas and Producer. In addition, Producer
shall provide Overseas with a video trailer, key art, press kits, a reasonable
selection of still photos and other promotional materials of first class quality
as required by Overseas. Overseas may itself create any delivery or
promotional items described above which Producer fails to deliver or which are
unsatisfactory to Overseas, it being agreed that the costs and expenses incurred
by Overseas in connection therewith may be recouped by Overseas as a
distribution expense hereunder, at Overseas' sole discretion.
5. THIRD PARTY OBLIGATIONS: Producer shall be solely responsible
for all third party payments, including, without limitation, all production
costs, deferments, profit participations, royalty payments, music
synchronization or other music costs, license fees, and any
residual, supplemental market or other payments to any guild or union.
6. WARRANTY: Producer represents and warrants that it owns all
rights herein assigned to Overseas, that such rights are not the subject of any
encumbrance, claim or litigation, and that Overseas may freely exploit such
rights without interference from any person or entity and without violating the
rights of any others.
7. All other terms shall be Overseas' standard terms and conditions
(including, without limitation, delivery, accounting, representations,
warranties and indemnity).
The parties anticipate entering into a long-form agreement with
respect to the foregoing. However, until such time as the long-form agreement
is entered into (if ever), this letter agreement shall constitute a binding
agreement between Overseas and Producer.
2
<PAGE>
Please indicate your agreement to the foregoing by executing this
agreement in the space provided below.
Very truly yours,
OVERSEAS FILMGROUP, INC.
By /s/ Robert Little
------------------------------------------
Its
----------------------------------------
ACCEPTED AND AGREED TO:
Producer
By /s/ Alessandro Fraccassi
---------------------------
Its
-------------------------
1
<PAGE>
EXHIBIT "A"
DELIVERY ELEMENTS
-----------------
1. One (1) complete original 35mm negative of the feature as finally cut,
edited and assembled, with main and end titles together with the
original magnetic English language soundtrack including music effects and
dialogue contained in the edited final form of the feature
synchronized therewith each without scratches or injury and in all respects
ready to serve in the manufacture of release materials of first class
technical quality.
2. One (1) complete 35mm picture negative of the textless backgrounds of the
main and end titles and all written captions appearing in the feature.
3. One (1) complete 35mm optical soundtrack negative of the feature.
4. One (1) complete 35mm inter-positive of the feature.
5. One (1) complete 35mm inter-negative of the feature complete with
combined titles.
6. One (1) 35mm inter-positive of textless background of main and end titles
and all inserts of the feature.
7. One (1) 35mm inter-negative of textless background of main and end titles
and all inserts of the feature.
8. One (1) 35mm magnetic 3-stripe of the feature (with separate music,
effects and dialogue tracks). If Dolby, we require additional 35mm
magnetic 4-track stereo of feature and trailers with separate music,
effects and dialogue tracks.
9. One (1) 35mm low-contrast print of the feature.
10. One (1) NTSC 1" videotape master and one (1) PAL 1" videotape master
of the feature.
11. One (1) 1/4" or 1/2" magnetic tape of all music score in the feature.
12. All sound and pre-print materials of the television version of the
feature.
EXHIBIT "A"
A-1
<PAGE>
EXHIBIT "B"
(continued)
13. One (1) 35mm release print of the feature.
14. Two (2) dialogue/continuity lists of feature.
15. Two (2) music cue sheets.
16. Twenty (20) signed original certificates of origin.
17. Twenty (20) original notarized affidavits of rights (in
Overseas' customary form).
18. Two (2) credit lists as on screen.
19. Two (2) foreign theatrical advertising credits.
20. One (1) full set (at least 75 different stills) of black and white
negatives.
21. One (1) full set (at least 50 different stills) of color negatives.
22. One (1) sample of publicity materials (one sheet posters, etc.), if and
when available.
23. Production notes including biographies of stars, crew and directors.
24. One (1) Laboratory Access Letter (in Overseas' customary form).
25. One (1) NTSC 3/4 inch video cassette of feature and trailer.
26. One (1) Certificate of United States Copyright Registration for the
Picture, or if not yet available, a copy of the application therefor
accompanied by the letter of transmittal to the U.S. Copyright Office.
27. One (1) Certificate of United States Copyright Registration for
the screenplay, or if not yet available, a copy of the application therefor
accompanied by the letter of transmittal to the U.S. Copyright Office.
28. One (1) Certificate of Errors and Omissions insurance coverage for the
feature issued by a carrier approved by Overseas, fully prepaid for 3
years commencing upon delivery of the feature to Overseas, naming
Overseas as an additional insured with coverage amounts not less than
$1,000,000/ $3,000,000 and having a deductible not exceeding $10,000.
Said insurance policy shall provide
EXHIBIT "A"
A-2
<PAGE>
EXHIBIT "B"
(continued)
for notification to Overseas not later than 30 days prior to any
cancellation or change in coverage.
29. One (1) MPAA rating certificate.
30. All literary and music chain of title and other clearance documentation
for the feature in form and substance satisfactory to Overseas.
All delivery items to be delivered to Overseas Filmgroup, Inc., 8800 Sunset
Boulevard, Suite 302, Los Angeles, California 90069.
3
<PAGE>
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of May
26, 1986, by and between RACING PICTURES s.r.l.("Racing") and OVERSEAS
FILMGROUP, INC. ("Overseas"), with reference to the following facts:
WHEREAS, Racing previously granted to Spectrum Entertainment Limited
("Spectrum") distribution rights to BODY COUNT (the "Picture") pursuant to a
distribution agreement which can not be located;
WHEREAS, Spectrum assigned all its rights in and to the Picture to Overseas
as of June 4, 1993;
NOW THEREFORE, Racing and Overseas desire to supercede any previous
agreements between Racing and Spectrum and memorialize the agreement between
Spectrum and Overseas pursuant to the terms hereunder:
Racing hereby assigns to Overseas the rights to distribute, license and
otherwise exploit the Picture in the "Territory" for the "Term" and for the
"Media," all as hereinafter specified.
a. "TERRITORY": The universe excluding Italy.
b. "TERM": Commencing as of May 26, 1986 and continuing thereafter in
perpetuity.
c. "MEDIA": All media (whether now known or hereafter devised).
d. "DISTRIBUTION FEE": 25% of all Gross Receipts.
Racing hereby appoints Overseas, its successors and assigns, as its irrevocable
attorney-in-fact with the right (but not the obligation) (i) to enforce and
protect all rights, licenses and privileges granted and assigned herein and
granted under any and all copyrights (and renewals and extensions thereof), and
(ii) to prevent any infringement of said copyright and to litigate, collect and
receive all damages arising from such infringement of such rights, licenses and
privileges, using the names of Racing and joining Racing as party plaintiff or
defendant in any suit or proceeding (in the discretion of Overseas). Racing
agrees to cooperate with Overseas in any suit or action instituted by Overseas
hereunder.
Racing agrees to execute and deliver and cause to be executed and delivered to
Overseas any and all documents and instruments necessary to effect and complete
the transfer by Racing of all rights granted and assigned to Overseas. In the
event Racing fails to execute and deliver such other documents and instruments
after demand thereof by Overseas, Overseas is hereby authorized and appointed
attorney-in-fact of and for Racing to make, execute and deliver any and all such
documents and instruments.
<PAGE>
It is understood that Overseas's aforementioned powers as attorney-in-fact of
Racing are powers coupled with an interest and irrevocable.
This License and the provisions hereof shall be binding upon Racing, its
successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned have executed this short-form License by
their respective duly authorized officers as of May 24, 1986.
Date of Execution: 03/25, 1997.
RACING PICTURES s.r.l.
By /s/ ALESSANDRO FRACASSI
--------------------------------
Its
---------------------------
OVERSEAS FILMGROUP, INC.
By /s/ ROBERT LITTLE
-------------------------------
Its
---------------------------
<PAGE>
OPTION AGREMEENT
THIS OPTION AGREEMENT (the "Agreement") is entered into as of September 13,
1996, by and between ROBERT LITTLE ("Little") and OVERSEAS FILMGROUP, INC.,
("OFG") with reference to the following facts:
WHEREAS, NEO Motion Pictures, Inc. (the "Corporation") is a corporation
duly organized and existing under the law of the State of California;
WHEREAS, Joel Soisson ("Soisson"), the sole stockholder of the Corporation,
has entered into that certain Stock Option Agreement dated as of September 12,
1996, with Little (the "Soisson Agreement") wherein Soisson has granted Little
the option (the "NEO Option") to purchase up to 500 shares (subject to
adjustment) of the common stock of the Corporation (the "Optioned Shares");
NOW, THEREFORE, for the payment to Little of the sum of $100.00 and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Little and OFG hereby agree as follows:
1. GRANT OF OPTION. Subject to and upon the terms and restrictions set
forth in this Agreement and subject to Little's exercise of the NEO
Option pursuant to the Soisson Agreement, Little hereby grants to OFG an
option to purchase, at such times (subject to the terms hereof) and in
such amounts as OFG shall determine, up to one-half of any Optioned
Shares actually acquired by Little pursuant to Little's exercise of the
NEO Option, at the exercise price of $25.00 per share (the "Little
Option"). The Little Option shall be exercisable by OFG with respect to
any Optioned Shares acquired by Little within 90 days of Little's
acquisition of such shares (the "Exercise Period"). In addition, the
Little Option shall also expire in its entirety (and the Exercise Period
shall terminate) at the time the NEO Option expires. Little, in his sole
and absolute discretion, may at any time prior to the exercise of the NEO
Option cancel the Little Option and, in lieu thereof, assign to OFG fifty
percent of Little's interest in the NEO Option, exercisable by OFG only
at such time (and in the same amounts and for the same exercise price) as
Little exercises the portion of the NEO Option that he retains.
2. MANNER OF EXERCISING OPTION; LIMITATIONS. In order to exercise the
Little Option with respect to all or any portion of the Optioned Shares acquired
by Little and for which the Little Option is then exercisable, OFG must, within
the Exercise Period, deliver to Little a prior written notice of OFG's intent
to exercise, which notice shall be delivered to Little at least five (5)
business days prior to the effective day of the exercise and which notice shall
specify the number of Optioned Shares acquired by Little with respect to which
the Little Option is being exercised, and the effective date of the exercise.
OFG shall pay the exercise price, in full, in cash or check on the effective
date of the exercise. The Little Option shall not be exerciseable by OFG (and,
in the event of an assignment of fifty percent of the NEO Option to OFG, OFG
shall not be deemed an assignee of the NEO Option from Little) unless OFG
simultaneously executes a NEO
<PAGE>
stockholder agreement in form and substance substantially equivalent to any
NEO stockholder agreement to which Little is a party; provided, however,
that OFG shall not be required to execute a stockholder agreement that
would prevent OFG from exercising the Little Option because of any effect
on the Corporation's S Corporation status for federal income tax
purposes. Little and his spouse, Ellen Dinerman Little, agree to abstain
from any OFG decisions to exercise or not exercise the Little Option.
3. ADJUSTMENT AND CHANGES IN THE COMMON STOCK. The Little Option shall
adjust in the same manner as the NEO Option; it being the intent of Little and
OFG that the Little Option represent (subject to the expiration provisions set
forth herein) the right of OFG to acquire one-half of the securities acquired by
Little pursuant to the exercise of the NEO Option for the same purchase price
per share that Little exercises the NEO Option, and Little and OFG agree that
the Little Option shall be further adjusted as necessary to effectuate the
foregoing.
4. TERMINATION. This Agreement and the Little Option granted hereunder
shall terminate and be of no further force and effect (i) upon the written
agreement of all the parties hereto; or (ii) as set forth in Section 1 above.
5. NON-TRANSFERABILITY OF OPTION. OFG may not transfer all or any portion
of the Little Option or grant an interest in the Little Option to other persons
or entities (other than wholly-owned subsidiaries of OFG) without the prior
written consent of Little; provided, however, that the merger of OFG with and
into Entertainment/Media Acquisition Corporation shall not be deemed a transfer
for purposes of this Section 5.
6. NO REPRESENTATIONS AND WARRANTIES. OFG understands, acknowledges and
agrees that Little, is making no representations or warranties as to the NEO
Option, the Optioned Shares, the Soisson Agreement, and the subject matter of
this Agreement, including, without limitation the enforceability of the NEO
Option, or the value of the Little Option, the NEO Option or the Optioned
Shares. OFG further acknowledges and agrees that Little may choose to exercise
or not exercise the NEO Option in his sole and absolute discretion, and shall be
under no obligation whatsoever to exercise the NEO Option during the term
thereof.
7. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California
regardless of the law of conflict of laws, or choice of law, of that or any
other jurisdiction.
8. ATTORNEY'S FEES. In the event of any litigation or arbitration
between the parties hereby respecting or arising out of this Agreement, the
prevailing party, whether or not such litigation or arbitration proceeds to
final judgment or determination, shall be entitled to recover all of the
attorney's fees incurred with respect to such legal efforts, in each and every
such action, suit or other proceeding, including any and all appeals or
petitions therefrom. As used herein, the term "attorneys fees" shall be deemed
to mean the full and actual cost of any legal services actually performed in
connection with the
<PAGE>
matters involved, calculated on the basis of usual fees charged by the
attorneys performing such services.
9. NOTICES. All notices or demand shall be in writing and may be
delivered personally, electronically or by express or certified mail or
registered mail or by private overnight express mail services.
TO LITTLE:
Mr. Robert Little
12309 Viewcrest Road
Studio City, California 91604
Facsimile: (818) 760-2981
TO OFG:
Overseas Filmgroup, Inc.
8800 Sunset Boulevard, Third Floor
Los Angeles, California 90069
Attention: Mr. William Lischak
Facsimile: (310) 855-0719
10. TERMINATION. OFG agrees that Little may amend, modify, supplement,
extend or terminate the Soisson Agreement and the NEO Option without any
further signature, acknowledgment, agreement or consent on OFG's part.
11. COUNTERPARTS. This Agreement may be executed in counterparts which,
taken together, shall constitute the whole of the agreement as between the
parties.
IN WITNESS WHEREOF, Little and OFG have executed this Agreement as of
the date first above written.
/s/ Robert Little
- ------------------------------
Robert Little
OVERSEAS FILMGROUP, INC.
By: /s/ WILLIAM F. LISCHAK
------------------------------
Its: COO/CFO
----------------------------
ACKNOWLEDGED AND AGREED:
/s/ Joel Soisson
- --------------------------------
Joel Soisson
<PAGE>
OVERSEAS FILM GROUP, INC.
OFFICE LEASE
TABLE OF CONTENTS
PAGE NO.
ARTICLE 1 - TERM..................................................... 1
ARTICLE 2 - RENTAL................................................... 1
ARTICLE 3 - SECURITY DEPOSIT......................................... 4
ARTICLE 4 - HOLDING OVER............................................. 4
ARTICLE 5 - PERSONAL PROPERTY TAXES.................................. 4
ARTICLE 6 - USE...................................................... 5
ARTICLE 7 - CONDITION OF PREMISES.................................... 5
ARTICLE 8 - REPAIRS AND ALTERATIONS.................................. 5
ARTICLE 9 - BUILDING SERVICES........................................ 6
ARTICLE 10 - RIGHTS OF LANDLORD....................................... 6
ARTICLE 11 - DAMAGES TO PROPERTY...................................... 7
ARTICLE 12 - INSURANCE................................................ 7
ARTICLE 13 - ASSIGNMENT AND SUBLETTING................................ 8
ARTICLE 14 - DAMAGE OR DESTRUCTION.................................... 8
ARTICLE 15 - SUBORDINATION............................................ 10
ARTICLE 16 - EMINENT DOMAIN........................................... 11
ARTICLE 17 - DEFAULT.................................................. 11
ARTICLE 18 - REMEDIES................................................. 12
ARTICLE 19 - RULES AND REGULATIONS.................................... 14
ARTICLE 20 - APPLICABLE LAW........................................... 14
ARTICLE 21 - SURRENDER OF PREMISES.................................... 14
ARTICLE 22 - QUIET POSSESSION......................................... 14
ARTICLE 23 - SUCCESSORS AND ASSIGNS................................... 14
ARTICLE 24 - NOTICES.................................................. 15
ARTICLE 25 - WAIVERS OF SUBROGATION................................... 15
ARTICLE 26 - BROKERS.................................................. 15
ARTICLE 27 - WAIVER................................................... 15
ARTICLE 28 - TENANT ESTOPPEL CERTIFICATE.............................. 16
ARTICLE 29 - INTEREST ON PAST DUE OBLIGATIONS......................... 16
ARTICLE 30 - LIABILITY OF LANDLORD.................................... 16
ARTICLE 31 - INABILITY TO PERFORM..................................... 16
ARTICLE 32 - SEVERABILITY............................................. 17
ARTICLE 33 - ATTORNEYS' FEES.......................................... 17
ARTICLE 34 - TIME OF ESSENCE.......................................... 17
ARTICLE 35 - HEADINGS................................................. 17
ARTICLE 36 - LANDLORD AND TENANT...................................... 17
ARTICLE 37 - ENTIRE AGREEMENT......................................... 18
ARTICLE 38 - CONSTRUCTION OF PREMISES................................. 18
ARTICLE 39 - RESERVED AREA............................................ 18
ARTICLE 40 - Intentionally Omitted.................................... 18
ARTICLE 41 - NO OPTION................................................ 18
ARTICLE 42 - USE OF BUILDING NAME..................................... 18
ARTICLE 43 - PAYMENT OF INITIAL RENT
AND SECURITY DEPOSIT..................................... 18
ARTICLE 44 - TENANT IMPROVEMENTS...................................... 19
ARTICLE 45 - CPI ADJUSTMENT........................................... 20
ARTICLE 46 - TRANSFER BY TENANT....................................... 20
ARTICLE 47 - AS-IS.................................................... 21
ARTICLE 48 - COMMON AREAS............................................. 21
ARTICLE 49 - BUILDING SECURITY........................................ 22
ARTICLE 50 - EASEMENTS................................................ 22
ARTICLE 51 - AUTHORITY................................................ 22
ARTICLE 52 - VEHICLE PARKING.......................................... 23
RULES AND REGULATIONS................................................. 24
FLOOR PLAN........................................................ Exhibit A
Agreement for Completion of Premises.............................. Exhibit B
<PAGE>
8800 SUNSET BLVD.
OFFICE LEASE
THIS LEASE ("Lease") is made and entered into this 21th day of April,
1987, by and between Carolco Pictures Inc., a Delaware corporation
(hereinafter referred to as "LANDLORD"), and Overseas Film Group, Inc., a
Delaware corporation, and Ellen Little (collectively hereinafter referred
to as "TENANT").
In consideration of their respective agreements contained herein,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises described as Suite ____ on the 3rd floor, containing approximately
3,637 rentable squares feet and located on the west side and adjoining one
third portion of the north side of such third floor, as designated on the
plan attached hereto as Exhibit "A" (hereinafter referred to as the
"PREMISES") (with the exact square footage of the Premises to be determined
in accordance with Building Owners & Managers Association Standards and from
the final construction plans for the Premises approved by Landlord and
Tenant) in the building known as the 8800 Sunset Building (hereinafter
referred to as the "BUILDING"), the address of which is 8800 Sunset
Boulevard, Hollywood, California 90069, for the term and upon the terms and
conditions hereinafter set forth, and Landlord and Tenant hereby agree as
follows:
ARTICLE 1
TERM
The term of this Lease shall commence on July 1, 1987, (hereinafter
referred to as the "COMMENCEMENT DATE") or on such earlier date as Tenant
first takes possession of the Premises, and shall end five years after the
Commencement Date (the "Term"). If Landlord is unable to deliver possession
of the Premises to Tenant on or before the Commencement Date, Landlord shall
not be subject to any liability for its failure to do so, and such failure
shall not affect the validity of this Lease nor the obligations of Tenant
hereunder, but the term hereof shall commence either (a) ten (10) days
following the day that Landlord gives Tenant written notice that the Premises
are ready for occupancy or (b) on the day that Tenant first occupies the
Premises, whichever first occurs, and the expiration date set forth above
shall be extended by that length of time between the Commencement Date and
the date the term hereof actually commences. If permission is given to Tenant
to occupy the Premises prior to the Commencement Date, such occupancy shall
be subject to all of the provisions of this Lease and, if the Term hereof
commences on a date later than the Commencement Date pursuant to the
provisions set forth above, the parties hereto agree to execute and
acknowledge a written statement setting forth the date of commencement and
the date of expiration of this Lease, but this Lease shall not be affected in
any manner should either party fail or refuse to execute such statement.
There should be no abatement of the monthly rental nor any delay in
commencement of this Lease if for any reason Tenant is not able to take
possession of the Premises, including without limitation any delays caused by
acts or omissions of the Tenant, its agents, employees and contractors.
ARTICLE 2
RENTAL
(a) MONTHLY RENTAL. Tenant agrees to pay to Landlord during the Term
hereof, at Landlord's office or to such other person at such other place as
directed from time to time by written notice to Tenant from Landlord, a
monthly rental of $1.70 per rentable square foot per month for a total
monthly rent of Six Thousand One Hundred Eighty Three Dollars ($6,183),
payable in advance on the first day of each calendar month commencing on the
first day of the fifth month of the Term, without demand or setoff or
deduction, and in the event the term of this Lease commences or the
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date of expiration of this Lease occurs other than on the first day or last
day of a calendar month, the rent for such month shall be prorated for the
actual days elapsed. The first month's rental shall be due on execution as
set forth in Article 43. Landlord represents as of the date hereof that no
other tenant has received a lower monthly rental rate per square foot.
(b) INCREASE OR DECREASE IN DIRECT COSTS. If, commencing one year
after Landlord first occupies the Building, in each succeeding one year
period during the Term of this Lease, the "direct costs" (as hereinafter
defined) paid or incurred by Landlord shall be higher or lower than the
direct costs for the preceding twelve month period (hereinafter referred to
as the "COMPARISON YEAR"), rent payable by Tenant for each and every one year
period subsequent to the Comparison Year shall be increased or decreased, as
the case may be, by 5.13 percent (.0513%) (hereinafter referred to as
"TENANT'S PROPORTIONATE SHARE") [Tenant's percentage portion of the Building]
of such increase or decrease, except that in no event shall the monthly
rental be reduced to an amount less than that specified in Article 2(a)
hereof. Tenant's Proportionate Share shall be a percentage computed from a
fraction, the numerator of which is the number of square feet of rentable
area of the Premises and the denominator of which is the total number of
square feet of rentable area of the Building at and above grade. If, by
reason of amendment or modification hereof, the number of square feet in the
Premises is increased or decreased, Tenant's Proportionate Share shall be
adjusted accordingly. In the event this Lease shall terminate on any date
other than the last day of any such one year period, the amount of increase
in rent payable by Tenant or decrease in rent to which Tenant is entitled
during any such one year period in which this Lease terminates shall be
prorated on the basis of the relationship which the number of days which have
elapsed from the commencement of said one year period to and including said
date on which this Lease terminates bears to three hundred sixty (360).
(c) DEFINITIONS. As used herein the term "DIRECT COSTS" shall mean the
following:
(i) "TAX COSTS" shall mean any and all real estate taxes and other
similar charges on real property or improvements, assessments, water and
sewer charges and all other charges assessed, levied, imposed or becoming a
lien upon the Building and appurtenances thereto and the parking or other
facilities thereof, or the real property (hereinafter referred to as the
"PROPERTY") thereunder or attributable thereto or on the rents, issues,
profits or income received or derived therefrom imposed, levied, assessed or
charged by the United States, the State of California, the County of Los
Angeles, or the City of Los Angeles, or any local government authority or
agency or any political subdivision thereof, but shall not include any net
income, franchise, capital stock, estate or inheritance taxes; provided,
however, if at any time subsequent to the date of this Lease the methods of
taxation prevailing as of the date of this Lease shall be altered so that in
lieu of or as a supplement to or a substitute for the whole or any part of
any taxes, charges or assessments now levied, assessed or imposed on the
Building and appurtenances thereto and the facilities thereof or the
Property, there shall be levied, assessed or imposed (a) a tax, assessment,
levy, imposition or charge wholly or partially as a net income, capital or
franchise levy or otherwise on the rents, issues, profits or income derived
therefrom, (b) a tax, assessment, levy (including, but not limited to, any
municipal, state or federal levy), imposition or charge measured by or based
in whole or in part upon the Building and appurtenances thereto and the
facilities thereof or the Property and imposed upon Landlord, or (c) a
license fee measured by the rent payable under this Lease, then all such
taxes, assessments, levies, impositions or charges, or the part thereof so
measured or based, shall be deemed to be included in the term "DIRECT COSTS".
If the assessed valuation or tax costs of the Building for the Comparison
Year shall not be based upon a completed Building at lease ninety-five percent
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(95%) occupied on floors 2 through 7, then the Tax Costs for the Comparison
Year shall be adjusted to reflect the taxes which would have been payable for
the Comparison Year if the Building had been completed and were ninety-five
percent (95%) occupied on floors 2 through 7. Taxes for the subsequent one
year periods shall be the taxes paid in the respective year.
(ii) "OPERATING COSTS" shall mean any and all expenses incurred by
Landlord in connection with the maintenance, operation and repair of the
Building, the equipment, adjacent walks, malls and landscaped areas,
including, but not limited to, salaries, wages, medical, surgical and general
welfare benefits and pension payments, payroll taxes, workmen's compensation,
uniforms and drycleaning thereof for employees engaged in the operation,
maintenance and repair of the Building; the cost of all charges for
electricity, steam, water and other utilities furnished to the Building,
including any taxes thereon (but excluding any charges directly and
completely passed through to specific tenants); the cost of all charges for
fire and extended coverage, liability and all other insurance for the
Building to the extent that such insurance is required to be carried by
Landlord under any lease, mortgage or deed of trust covering the whole or a
substantial part of the Property or the Building or if not required under any
such lease, mortgage or deed of trust, then to the extent such insurance is
carried by owners of buildings comparable to the Building (but excluding any
charges directly and completely passed through to specific tenants); the cost
of all building and cleaning supplies and materials; the cost of all charges
for cleaning, maintenance and service contracts and other services with
independent contractors. In the event during the Comparison Year the
Building is less than ninety-five percent (95%) occupied on floors 2 through
7, the operating costs for the Comparison Year shall be adjusted to reflect
the operating costs of the Building as though ninety-five percent (95%)
occupied on floors 2 through 7 and the increase and decrease in rent shall be
based upon such operating costs as so adjusted.
(b) DETERMINATION AND PAYMENT
(i) On or before the first day of the month of the Commencement
Date of each calendar year commencing with the calendar year after the first
calendar year for which Tenant's rent may be adjusted under this Article 2,
Landlord shall furnish to Tenant a written statement showing in reasonable
detail Landlord's direct costs for the Comparison Year and for the calendar
year preceding the year in which any such statement is furnished, and showing
the amount, if any, of any increase or decrease in the rent due from Tenant
for such calendar year. The failure of Landlord to so furnish said statement
shall not constitute a default by Landlord hereunder or a waiver of
Landlord's right to any rent adjustment herein provided for.
(ii) On the monthly rental payment date next following Tenant's
receipt of such statement, Tenant shall pay to Landlord (in case of a rent
increase), or Landlord shall credit against the next rent due from Tenant (in
case of a rent decrease), an amount equal to the sum of (a) the rent
adjustment for the entire preceding calendar year as shown in said statement
and (b) one-twelfth (1/12th) of the rent adjustment for the preceding
calendar year multiplied by the number of rental payment dates having elapsed
during the then current calendar year to be applied on account of the rent
adjustment for the then present calendar year. The monthly rental payment
then due and subsequent monthly rental payments during the then current
calendar year shall be increased or decreased by one-twelfth (1/12th) of the
rent adjustment for the preceding calendar year.
(iii) If Landlord shall receive a refund of Tax Costs for any tax
year for which Tenant's Proportionate Share has been charged to Tenant, then
Landlord shall credit Tenant with Tenant's Proportionate Share of refund
after deducting therefrom
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Tenant's Proportionate Share of the costs and expenses of obtaining such
refund.
(iv) In the event of any dispute as to any additional rental due
hereunder, Tenant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office and if, after such inspection, Tenant still disputes such
additional rental, a certification as to the proper amount shall be made by
Landlord's independent certified public accountant which shall be final and
conclusive. Tenant agrees to pay the cost of such certification, unless it
is subsequently determined that Landlord's original statement was in error by
more than two percent (2%) of the direct costs.
ARTICLE 3
SECURITY DEPOSIT
Tenant has deposited with Landlord the sum of Six Thousand One Hundred
Eighty Three Dollars ($6,183) as security for the full and faithful
performance of every provision of this Lease to be performed by Tenant. If
Tenant defaults with respect to any material provision of this Lease,
including, but not limited to, the provisions relating to the payment of
rent, Landlord may use, apply or retain all or any part of this security
deposit for the payment of any rent or any other sum in default, or for the
payment of any other amount which Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If
any portion of said deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with Landlord in an
amount sufficient to restore the security deposit to its original amount.
Landlord shall not be required to keep this security deposit separate from its
general funds and Tenant shall not be entitled to interest on such deposit.
If Tenant shall fully and faithfully perform in all material respects every
provision of this Lease to be performed by it, the security deposit or any
balance thereof shall be returned to Tenant (or, at Landlord's option, to the
last transferee of Tenant's interest hereunder) as soon as possible at the
expiration of the Lease term and upon Tenant's vacation of Premises.
ARTICLE 4
HOLDING OVER
Should Tenant, with or without Landlord's written consent, hold over
after the termination of this Lease, Tenant shall become a tenant from
month-to-month only upon each and all of the terms herein provided as may be
applicable to a month-to-month tenancy and any such holding over shall not
constitute an extension of this Lease. During such holding over, Tenant
shall pay in advance, monthly, rent at the highest monthly rate provided for
herein, plus an amount equal to fifteen percent (15%) thereof.
ARTICLE 5
PERSONAL PROPERTY TAXES
Tenant shall pay prior to delinquency all taxes assessed against or
levied upon fixtures, furnishings, equipment and all other personal property
of Tenant located in the Premises, including improvements which are in excess
of Landlord's Standard Installations described in the Agreement for
Completion of Premises attached hereto as Exhibit "B", and when possible
Tenant shall cause said fixtures, furnishings, equipment and other personal
property to be assessed and billed separately from the property of Landlord;
provided, that no such taxes need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted. In the
event any or all of Tenant's fixtures, furnishings, equipment and other
personal property shall be assessed and taxed with the property
4.
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of Landlord, Tenant shall pay to Landlord its share of such taxes within ten
(10) days after delivery to Tenant by Landlord of a statement in writing
setting forth the amount of such taxes applicable to Tenant's property.
ARTICLE 6
USE
Tenant shall use and occupy the Premises only for general office use and
shall not use or occupy the Premise or permit the same to be used or
occupied for any other purpose without the prior written consent of Landlord,
and Tenant agrees that it will use the Premises in such a manner so as not to
interfere with or infringe on the rights of other tenants in the Building.
Tenant shall not use or occupy the Premises in violation of any law,
ordinance or regulation or other directive of any governmental authority
having or exercising jurisdiction thereof or of the certificate of occupancy
issued for the Building and, at Tenant's cost and expense, shall fully comply
therewith, and shall, upon five (5) days' written notice from Landlord,
discontinue any use of the Premises which is declared by any governmental
authority having or exercising jurisdiction thereover to be a violation of any
law, ordinance, regulation or directive or of said certificate of occupancy.
Tenant shall not do or permit to be done any thing which will invalidate or
increase the cost of any fire and extended coverage insurance policy covering
the Building and/or property located therein and Tenant shall comply with all
rules, orders, regulations and requirements of the Pacific Fire Rating Bureau
or any other organization performing a similar function. Tenant shall
promptly upon demand reimburse Landlord for any additional premium charges
for such policy by reason of Tenant's failure to comply with the provisions
of this Article.
ARTICLE 7
CONDITION OF PREMISES
Tenant acknowledges that neither Landlord nor any agent nor any
employee of Landlord has made any representation or warranty with respect to
the Premises or the Building or with respect to the suitability of either for
the conduct of Tenant's business. The taking of possession of the
Premise by Tenant shall conclusively establish that the Premises and the
Building were at such time satisfactory condition, except that Landlord
shall repair or replace, as necessary, such defective items furnished or
constructed by Landlord of which Tenant has advised Landlord in writing not
later than thirty (30) days after the date of commencement of the Term.
ARTICLE 8
REPAIRS AND ALTERATIONS
Tenant shall keep the Premises in good condition and repair. All
damage or injury to the Premises or the Building caused by the act or
negligence of Tenant, its employees, agents or visitors, shall be promptly
repaired by Tenant, at its sole cost and expense, to the satisfaction of
Landlord. Landlord may make any repairs which are not promptly made by
Tenant and charge Tenant for the cost thereof. Tenant shall be responsible
for the design and function of all Building non-standard improvements,
whether or not installed by Landlord at Tenant's request. Tenant waives all
rights to make repairs at the expense of Landlord, or to deduct the cost
thereof from the rent, and all rights under Sections 1941 and 1942 of the
California Civil Code. Tenant shall make no alterations, changes or
additions in or to the Premises without Landlord's prior written consent, and
then only by contractors or mechanics approved by Landlord; provided,
however, that Tenant may perform minor, nonstructural work (e.g., installation
of shelving) on the Premises not exceeding a total cost of $2,500 without the
consent of Landlord. Tenant hereby indemnifies and agrees to hold Landlord
free and harmless from all liens and claims of lien, and all other liability,
claims and demands arising out of any work done or material supplied to the
Premises
5.
<PAGE>
by or at the request of Tenant. If any permitted alterations, changes or
additions are made, they shall be made at Tenant's expense and shall be and
become the property of Landlord, except that Landlord may, by written notice
to Tenant given at least thirty (30) days prior to the end of the term,
require Tenant at Tenant's expense to remove all partitions, counters,
railings and the like installed by Tenant, and to repair any damages to the
Premises caused by such removal.
ARTICLE 9
BUILDING SERVICES
Landlord agrees to furnish to the Premises, at its expense, so long as
Tenant is not in default hereunder, during the hours of 8:00 a.m. to 6:00
p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. on Saturdays (except
holidays), air conditioning and heat, and 24 hour elevator service, electric
current for normal lighting and fractional horsepower office machines and, on
the same floor as the Premises, water for lavatory and drinking purposes, all
in such reasonable quantities as in the judgment of Landlord is necessary for
the comfortable occupancy of the Premises. Janitorial and maintenance
services will be furnished five (5) days per week. Tenant shall comply with
all rules and regulations which Landlord may reasonably establish for the
proper functioning and protection of the air conditioning, heating, elevator,
electrical and plumbing systems. Landlord shall not be liable for any
stoppage or interruption of any of such services caused by riot, strike,
labor disputes, breakdowns, accidents, necessary repairs or other cause
except for those caused by the gross negligence or willful misconduct of
Landlord, its agents or employees. Except as specifically provided in this
Article 9, Tenant agrees to pay for all utilities and other services utilized
by Tenant for all overtime or additional building services furnished to
Tenant not uniformly furnished to all tenants of the Building at Landlord's
expense. Landlord represents that the Building and Common Areas shall be
maintained in a similar manner as other first class buildings in West Los
Angeles and West Hollywood are maintained.
ARTICLE 10
RIGHTS OF LANDLORD
Landlord and its agent shall have the right to enter the Premises at
all reasonable times for the purpose of cleaning the Premises, examining or
inspecting the same, serving or posting and keeping posted thereon notices as
provided by Section 3094 of the Civil Code of the State of California or by
any other law of that state or which Landlord deems necessary for the
protection of Landlord or the Property, showing the same to prospective
tenants or purchasers of the Building, in the case of an emergency, and for
making such alterations, repairs, improvements or additions to the Premises
or to the Building as Landlord may deem necessary or desirable upon
reasonable notice to Tenant. If Tenant shall not be personally present to
open and permit an entry into the Premises at any time when such an entry by
Landlord is necessary or permitted hereunder, Landlord may enter by means of
a master key or may enter forcibly, without liability to Tenant except for
any failure to exercise due care for Tenant's property, and without affecting
this Lease. If during the last month of the Term hereof, Tenant shall have
removed substantially all of its property therefrom, Landlord may immediately
enter and alter, renovate and redecorate the Premises without eliminating or
abating any rent or incurring any liability to Tenant. Landlord during the
entire term of this Lease shall have the right upon ninety (90) days' prior
written notice to Tenant to change the name, number or designation of the
Building without liability or obligation to Tenant.
6.
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ARTICLE 11
DAMAGES TO PROPERTY
Tenant indemnifies and holds harmless Landlord against and from any and
all claims of damage or injury arising from Tenant's use of the Premises or
the conduct of its business or from any activity, work or thing done,
permitted or suffered by Tenant in or about the Premises, and shall further
indemnify and hold harmless Landlord against and from any and all claims
arising from any breach or default in the performance of any obligation of
the Tenant hereunder, or arising from any act or omission of Tenant, or any
of its agents, employees, invitees or licensees, and against and from all
costs, attorneys' fees, expenses and liabilities incurred in or about any
such claim or any action or proceeding brought thereon, and in case any
action or proceeding be brought against Landlord by reason for any such
claim. Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord. Tenant, as a material
part of the consideration to Landlord, hereby assumes all risk of damage to
property or injury to persons in, upon or about the Premises or the Building
from any cause other than the gross negligence or willful misconduct of
Landlord, its agents, representatives and employees, and Tenant hereby waives
all claims in respect thereof against Landlord.
Landlord shall not be liable for interference with light, air or other
similar benefit, nor shall Landlord be liable for any unknown latent defect
in the Premises or in the Building. Tenant shall give prompt notice to
Landlord in case of fire or accidents in the Premises or in the Building or
of defects therein or in the fixtures or equipment thereof. Landlord shall
not be liable for any damage to property entrusted to employees of the
Building, nor for the loss of, or damage to, any property by theft or
otherwise, nor for any injury or damage to persons, property or Tenant's
business resulting from construction, repair or alteration of premises
adjoining the Premises or of the Building or from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak from any part
of the Building or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or from any other place or resulting from
dampness or any other cause whatsoever, unless caused by or due to the
negligence of Landlord, its agents, servants or employees.
ARTICLE 12
INSURANCE
Tenant agrees during the Term hereof to carry Comprehensive General
Public Liability insurance with Broad Form General Liability Endorsement
acceptable to Landlord covering the Premises in an amount of not less than
$1,000,000.00 for injury and/or death to any number of persons in any one
accident and property damage insurance acceptable to Landlord in an amount
sufficient to cover not less than 100% of the full replacement cost of
Tenant's personal property located at the Building for fire and extended
coverage insurance, with vandalism and malicious mischief and sprinkler
leakage endorsements in companies satisfactory to Landlord in the name of
Tenant (with Landlord named as an additional insured), to pay the premiums
therefor and to deliver said policies or certificate thereof to Landlord, and
the failure of Tenant either to effect said insurance in the names herein
called for or deliver said policies or certificates or duplicates thereof to
Landlord shall permit Landlord to procure said insurance and pay the
requisite premiums therefor, which premiums shall be repayable to Landlord
with the next monthly rental payment. Each insurer under the policies
required hereunder shall agree by endorsement on the policy issued by it, or
by independent instrument furnished to Landlord, that it will give Landlord
no less than ten (10) days' written notice before the policy or policies in
question shall be altered or cancelled. Tenant hereby releases and relieves
the Landlord and waives its entire right of recovery against Landlord for
direct or consequential loss or damage aris-
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ing out of or incidental to the perils covered by property insurance carried
by the Tenant whether due to negligence of Landlord or Tenant or their
agents, employees, contractors and/or invitees. If necessary, all property
insurance policies required under this Lease shall be endorsed to so provide.
ARTICLE 13
ASSIGNMENT AND SUBLETTING
Tenant shall not and shall have no power to, either voluntarily or by
operation of law, sell, assign, transfer or hypothecate this Lease, or sublet
the Premises or any part thereof, or permit the Premises or any part thereof
to be occupied by anyone other than Tenant or Tenant's employees without the
prior written consent of Landlord, which will not be unreasonably withheld
pursuant to Article 46 below. If Tenant is a corporation, unincorporated
association or partnership, the sale, assignment, transfer or hypothecation of
any stock or other ownership interest in such corporation, association or
partnership in the aggregate in excess of twenty-five percent (25%) shall be
deemed an assignment within the meaning and provisions of this Article 13;
provided, however, that so long as prior to such sale the corporate Tenant,
Overseas Films Group, Inc., is wholly owned by Ellen Little, then Ellen
Little may in the aggregate transfer up to 40% of her voting control of
Tenant without consent of Landlord, but no additional assignments by Ellen
Little would then be permitted without Landlord's prior written consent. Any
sale, assignment, hypothecation, transfer or subletting of this Lease shall be
void and shall, at the option of Landlord, terminate this Lease; provided,
however, Tenant may assign this Lease to any entity which controls, is
controlled by, is under common control with or which merges with or into
Tenant. If this Lease is assigned, Tenant shall still remain fully liable
hereunder.
ARTICLE 14
DAMAGE OR DESTRUCTION
(a) DEFINITIONS.
(1) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(2) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that
the cost to repair is less than fifty percent (50%) of the then Replacement
Cost of the Building.
(3) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is fifty percent (50%) or more of the then
Replacement Cost of the Building.
(4) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(5) "Office Building Project Buildings Total Destruction" shall
mean if the Office Building Project Buildings are damaged or destroyed to the
extent that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(6) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
Article 12. The fact that an Insured loss has a deductible amount shall not
make the loss an uninsured loss.
(7) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the condition
that existed immediately prior to the damage occurring, excluding all
improvements made by tenants, other than those installed by Landlord at
Tenant's expense.
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(b) PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE
(1) INSURED LOSS: Subject to the provisions of paragraphs 14(d)
and 14(e), if at any time during the Term of this Lease there is damage which
is an Insured Loss and which falls into the classification of either Premises
Damage or Premises Building Partial Damage, then Landlord shall, as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Landlord's expense,
repair the damage (but not Tenant's fixtures, equipment or tenant
improvements originally paid for by Tenant) to its condition existing at the
time of the damage, and this Lease shall continue in full force and effect.
(2) UNINSURED LOSS: Subject to the provisions of paragraphs
14(d) and 14(e), if at any time during the Term of this Lease there is damage
which is not an Insured Loss and which falls within the classification of
Premises Damage or Premises Building Partial Damage, unless caused by a
negligent or willful act of Tenant (in which event Tenant shall make the
repairs at Tenant's expense), which damage prevents Tenant from making any
substantial use of the Premises, Landlord may at Landlord's option either (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to cancel and terminate
this Lease as of the date of the occurrence of such damage, in which event
this Lease shall terminate as of the date of the occurrence of such damage.
(c) PREMISES BUILDING TOTAL DESTRUCTION; OFFICE BUILDING PROJECT TOTAL
DESTRUCTION. Subject to the provisions of paragraphs 14(d) and 14(e), if at
any time during the Term of this Lease there is damage, whether or not it is
an Insured Loss, which falls into the classification of either (i) Premises
Building Total Destruction, or (ii) Office Building Project Total
Destruction, then Landlord may at Landlord's option either (i) repair such
damage or destruction as soon as reasonably possible at Landlord's expense
(to the extent the required materials are readily available through usual
commercial channels) to its condition existing at the time of the damage, but
not Tenant's fixtures, equipment or tenant improvements, and this Lease shall
continue in full force and effect, or (ii) give written notice to Tenant
within thirty (30) days after the date of the occurrence of such damage of
Landlord's intention to cancel and terminate this Lease, in which case this
Lease shall terminate as of the date of the occurrence of such damage and any
rents received for the period after the date of occurrence of such total
destruction shall be returned to Tenant.
(d) DAMAGE NEAR END OF TERM
(1) Subject to paragraph 14(d)(2), if at any time during the last
twelve (12) months of the Term of this Lease there is substantial damage to
the Premises, Landlord may at Landlord's option cancel and terminate this
Lease as of the date of occurrence of such damage by giving written notice to
Tenant of Landlord's election to do so within thirty (30) days after the date
of occurrence of such damage.
(2) Notwithstanding paragraph 14(d)(1), in the event that Tenant
has an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Tenant shall exercise such
option, if it is to be exercised at all, no later than twenty (20) days after
the occurrence of an Insured Loss falling within the classification of
Premises Damage during the last twelve (12) months of the Term of this Lease.
If Tenant duly exercises such option during said twenty (20) day period,
Landlord shall, at Landlord's expense, repair such damage, but not Tenant's
fixtures, equipment or tenant improvements, as soon as reasonably possible
and this Lease shall
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continue in full force and effect. If Tenant fails to exercise such option
during said twenty (20) day period, then Landlord may at Landlord's option
terminate and cancel this Lease as of the expiration of said twenty (20) day
period by giving written notice to Tenant or Landlord's election to do so
within ten (10) days after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option to the contrary.
(e) ABATEMENT OF RENT; TENANT'S REMEDIES
(1) In the event Landlord repairs or restores the Building or
Premises pursuant to the provisions of this Article 14, and/or any part of
the Premises are not usable (including loss of use due to loss of access or
essential services), the rent payable hereunder (including Tenant's share of
Operating Expenses) for the period during which such damage, repair or
restoration continues shall be abated, provided (1) the damage was not the
result of the negligence of Tenant, and (2) such abatement shall only be to
the extent the operation and profitability of Tenant's business as operated
from the Premises is adversely affected. Except for said abatement of rent,
if any, Tenant shall have no claim against Landlord for any damage suffered
by reason of any such damage, destruction, repair or restoration unless such
damage is caused by the gross negligence or willful misconduct of Landlord or
its agents, representatives or employees.
(2) If Landlord shall be obligated to repair or restore the Premises
or the Building under the provisions of this Article 14 and shall not commence
such repair or restoration within ninety (90) days after such occurrence, or
if Landlord shall not complete the restoration and repair within six (6)
months after such occurrence, Tenant may at Tenant's option cancel and
terminate this lease by giving Landlord written notice of Tenant's election
to do so at any time prior to the commencement or completion, respectively, of
such repair or restoration. In such event this Lease shall terminate as of
the date of such notice.
(f) TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Article 14, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's security deposit as
has not theretofore been applied by Landlord.
(g) WAIVER. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
ARTICLE 15
SUBORDINATION
This Lease is subject and subordinate to all ground or underlying
leases, mortgages and deeds of trust which now affect the Property or the
Building and to all renewals, modifications, consolidations, replacements and
extensions thereof; provided, however, if the lessor under and any such lease
or the holder or holders of any such mortgage or deed of trust shall advise
Landlord that they desire or require this Lease to be prior and superior
thereto, upon written request of Landlord to Tenant, Tenant agrees to
promptly execute, acknowledge and deliver any and all documents or
instruments which Landlord or such lessor, holder or holders deem necessary
or desirable for purposes thereof. Landlord shall have the right to cause
this Lease to be and become and remain subject and subordinate to any and all
ground or underlying leases, mortgages or deeds of trust which may hereafter
be executed covering the Premises, the Building or the Property or any
renewals, modifications, consolidations, replacements or extension thereof,
for the full amount of all advances made or to be made thereunder and without
regard to the time or character of
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such advances, together with interest thereon and subject to all the terms
and provisions thereof; and Tenant agrees, within ten (10) days after
Landlord's written request therefor, to execute, acknowledge and deliver upon
request any and all documents or instruments requested by Landlord or
necessary or proper to assure the subordination of this Lease to any such
mortgages, deeds of trust or leasehold estates; provided, however, that the
foregoing provisions with respect to such election of subordination by
Landlord shall not be effective unless the owner or holder of any such
mortgage or deed of trust or the lessor under any such leasehold estate shall
execute with Tenant a non-disturbance and attornment agreement under which
such owner, holder or lessor shall agree to accept the attornment of Tenant
upon the terms and conditions contained in this Lease for the then unexpired
term hereof in the event of termination of such leasehold estate or upon the
foreclosure of any such mortgage or deed of trust, if Tenant is not then in
default. Notwithstanding anything to the contrary set forth in this Article
15, Tenant hereby attorns and agrees to attorn to any person, firm or
corporation purchasing or otherwise acquiring the Premises, the Building or
the Property at any sale or other proceeding or pursuant to the exercise of
any rights, powers or remedies under such mortgages, deeds of trust or ground
or underlying leases, as if such person, firm or corporation had been named
as Landlord herein, it being intended hereby that if this Lease is
terminated, cut off or otherwise defeated by reason of any act or actions by
the owner or holder of any such mortgage or deed of trust or the lessor under
any such leasehold estate, then, at the option of any such person, firm or
corporation so purchasing or otherwise acquiring the Premises, the Building
or the Property, this Lease shall continue in full force and effect. Tenant
hereby appoints Landlord the attorney-in-fact of Tenant irrevocably to
execute and deliver any document or documents provided for in this Article 15
for and in the name of Tenant. Such power, being coupled with an interest,
is irrevocable.
ARTICLE 16
EMINENT DOMAIN
If the whole of the Premises or the Building or so much thereof as to
render the balance unsuitable by Tenant for its continued use (as reasonably
determined solely by Landlord) shall be taken under power of eminent domain,
or sold, transferred or conveyed in lieu thereof, this Lease shall
automatically terminate as of the date of such condemnation or as of the date
possession is taken by the condemning authority, whichever is later. No
award for any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that
nothing contained herein shall be deemed to give Landlord any interest in or
to require Tenant to assign to Landlord any award made to Tenant for the
taking of personal property and fixtures belonging to Tenant and removable by
Tenant at the expiration of the Term hereof as provided hereunder or for the
interruption of, or damage to, Tenant's business. In the event of a partial
taking, or a sale, transfer or conveyance in lieu thereof, which does not
result in a termination of this Lease, the rent shall be apportioned
according to the ratio that the part of the Premises remaining usable by
Tenant bears to the total area of the Premises.
ARTICLE 17
DEFAULT
(1) DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Tenant:
(a) The vacation or abandonment of the Premises by Tenant. Vacation
of the Premises shall include the failure to occu-
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py the Premises for a continuous period of sixty (60) days or more, whether
or not the rent is paid.
(b) The breach by Tenant of any of the covenants, conditions or
provisions of Articles 8 (alterations), 13 (assignment or subletting),
17(1)(a) (vacation or abandonment), 17(1)(e) (insolvency), 17(1)(f) (false
statement), 28 (estoppel certificate), 50 (easements) or 15 (subordination),
all of which are hereby deemed to be material, non-curable defaults without
the necessity of any notice by Landlord to Tenant thereof.
(c) The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Landlord to Tenant. In the event that Landlord serves Tenant
with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer
statutes such Notice Pay Rent or Quit shall also constitute the notice
required by this subparagraph.
(d) The failure by Tenant to observe and perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Tenant other than those referenced in subparagraphs (b) and (c) above,
where such failure shall continue for a period of thirty (30) days after
written notice thereof from Landlord to Tenant; provided, however, that if the
nature of Tenant's noncompliance is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commenced such cure within said thirty (30) day period and
thereafter diligently pursues such cure to completion. To the extent
permitted by law, such thirty (30) day notice shall constitute the sole and
exclusive notice required to be given to Tenant under applicable Unlawful
Detainer statutes.
(e) (i) The making by Tenant of any general arrangement or general
assignment for the benefit of creditors; (ii) Tenant becoming a "debtor" as
defined in the United States Bankruptcy Code or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same is
dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within thirty (30) days. In the event that any provision of this
paragraph 17(1)(e) is contrary to any applicable law, such provision shall be
of no force or effect.
(f) The discovery by Landlord that any financial statement given to
Landlord by Tenant, or its successor in interest or by any guarantor of
Tenant's obligation hereunder, was materially false.
(2) DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a
reasonable time, but in no event later than thirty (30) days after written
notice by Tenant to Landlord and to the holder of any first mortgage or deed
of trust covering the Premises whose name and address shall have theretofore
been furnished to Tenant in writing, specifying wherein Landlord has failed
to perform such obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required
for performance then Landlord shall not be in default if Landlord commences
performance within such thirty (30) day period and thereafter diligently
pursues the same to completion.
ARTICLE 18
REMEDIES
(a) In the event of a breach of or default under this Lease as provided
in Article 17 hereof or if Tenant abandons the Premises at any time during
the Term of this Lease, Landlord may, at Landlord's option and without
limiting Landlord in the exercise
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of any right or remedy Landlord may have on account of such default and
without any further demand or notice, terminate this Lease, re-enter the
Premises, with or without process of law, and remove all persons and property
therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant.
(b) If Landlord elects to terminate this Lease as provided in
subparagraph (a) above, Landlord shall be entitled to recover from Tenant the
aggregate of:
(i) The worth at the time of award of the unpaid rent and charges
equivalent to rent earned as of the date of termination hereof;
(ii) The worth at the time of award of the amount by which the unpaid
rent and charges equivalent to rent, which would have been after the date of
termination hereof until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which the unpaid
rent and charges equivalent to rent for the balance of the Term hereof after
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease which, in the ordinary course of things, would be likely to
result therefrom; and
(v) Any other amount which Landlord may by law hereafter be permitted
to recover from Tenant to compensate Landlord for the detriment caused by
Tenant's default.
For the purpose of this Article, the "TIME OF AWARD" shall mean the date
upon which the judgment in any action brought by Landlord against Tenant by
reason of such default is entered or such earlier date as the court may
determine, the "worth at the time of award" of the amounts referred to in
subparagraphs (i) and (ii) hereof shall be computed by allowing interest at
the rate of ten percent (10%) per annum and the "worth at the time of award"
of the amount referred to in subparagraph (iii) hereof shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
(c) Nothing in this Article 18 shall be deemed to affect Landlord's
right to indemnification for liability or liabilities arising prior to the
termination of this Lease for personal injuries or property damage under the
indemnification clause or clauses contained in this Lease.
(d) Notwithstanding anything to the contrary set forth herein,
Landlord's re-entry to perform acts of maintenance or preservation of or in
connection with efforts to re-let the Premises or any portion thereof, or the
appointment of a receiver upon Landlord's initiative to protect Landlord's
interest under this Lease shall not terminate Tenant's right to possession of
the Premises or any portion thereof and, until Landlord does elect to
terminate this Lease, this Lease shall continue in full force and effect and
Landlord may enforce all of Landlord's rights and remedies hereunder,
including, without limitation, the right to recover from Tenant as it becomes
due hereunder all rent, additional rent and other charges required to be paid
by Tenant under the terms hereof.
(e) All rights, powers and remedies of Landlord hereunder, and under any
other agreement now or hereafter in force between Landlord and Tenant, shall
be cumulative and not alternative and shall be in addition to all rights,
powers and remedies given to
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Landlord by law, and the exercise of one or more rights or remedies shall not
impair Landlord's right to exercise any other right or remedy.
(f) To the fullest extent permitted by law, the avails of any re-letting
shall be applied:
First, to pay to Landlord the costs and expenses of such re-letting
(including, without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing
new tenants, and, if Landlord shall maintain and operate the Premises, the
cost thereof) and necessary or reasonable alterations;
Second, to the payment of any indebtedness of Tenant to Landlord
other than rent, additional rent and other sums due and unpaid hereunder; and
Third, to the payment of rent, additional rent and other sums due
and unpaid hereunder, and the residue, if any, shall be held by Landlord and
applied to payment of other or future obligations of Tenant to Landlord as
the same become due and payable.
ARTICLE 19
RULES AND REGULATIONS
Tenant shall observe faithfully and comply strictly with the Rules and
Regulations attached to this Lease and made a part hereof, and such other
rules and regulations as Landlord may from time to time reasonably adopt for
the safety, care and cleanliness of the Building or the Property, the
facilities thereof, or the preservation of good order therein. Landlord
shall not be liable to Tenant for violation of any such Rules and
Regulations, or for the breach of any covenant or condition in any lease by
any other tenant in the Building.
ARTICLE 20
APPLICABLE LAW
This Lease shall be governed by and construed in accordance with the laws
of the State of California.
ARTICLE 21
SURRENDER OF PREMISES
At the termination of this Lease, Tenant shall surrender the Premises to
Landlord in as good condition and repair as reasonable and proper use thereof
will permit. If not then in default hereunder, Tenant shall have the right,
at the end of the term of this Lease, to remove any equipment, furniture,
trade fixtures or other personal property (other that carpeting, floor
coverings, wall coverings, drapes, lighting and hardware fixtures) placed in
the Premises by Tenant, but not physically attached thereto, provided that
Tenant promptly repair any damage to the Premises caused by such removal.
ARTICLE 22
QUIET POSSESSION
Upon Tenant's paying the rent, additional rent and other sums provided
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the entire term hereof,
subject to all of the provisions of this Lease.
ARTICLE 23
SUCCESSORS AND ASSIGNS
All of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives,
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successors and assigns, subject at all times, however, to all agreements and
restrictions herein contained with respect to assignment, subleasing and
hypothecation.
ARTICLE 24
NOTICES
Any notice required or permitted to be given hereunder shall be in writing
and may be given by personal service or by mail, and if given by mail, shall
be deemed sufficiently given if sent by registered or certified mail,
addressed to Tenant at the Premises or the Landlord at the address of the
place from time to time established for the payment of rent. Either party
may by notice to the other specify a different address for notice purposes,
except that, upon Tenant's taking possession of the Premises, the Premises
shall constitute Tenant's address for notice purposes. A copy of all
notices to be given to Landlord hereunder shall be concurrently transmitted
by Tenant to such party hereafter designated by notice from Landlord to
Tenant.
ARTICLE 25
WAIVERS OF SUBROGATION
Each of the parties hereto hereby waives any and all rights to recovery
against the other or against any other tenant or occupant of the Building, or
against the officers, employees, agents, representatives, customers or
business visitors of such other party or of such other tenant or occupant of
the Building, for loss of or damage to such waiving party or its property or
the property of others under its control arising from any cause insured
against under the standard form of fire insurance policy with all permissible
extensions and endorsements covering additional perils or under any other
policy of insurance carried by such waiving party in lieu thereof. Such
waiver shall be effective only so long as the same is permitted by each
party's insurance carrier without payment of an additional premium.
ARTICLE 26
BROKERS
In connection with this Lease, Tenant warrants and represents that it has
had no dealings with any brokers and that it knows of no other person who is
or might be entitled to a commission, finder's fee or other like payment in
connection herewith and does hereby indemnify and agree to hold Landlord
harmless from and against any and all loss, liability and expense that
Landlord may incur should such warranty and representation prove incorrect.
ARTICLE 27
WAIVER
No waiver by Landlord of any provision of this Lease shall be deemed to be
a waiver of any other provision hereof or of any subsequent breach by
Tenant of the same or any other provision. Landlord's consent to or approval
of any act by Tenant requiring Landlord's consent or approval shall not be
deemed to render unnecessary the obtaining of Landlord's consent to or
approval of any subsequent act of Tenant, whether or not similar to the act
so consented to or approved. No act or thing done by Landlord or Landlord's
agents during the Term of this Lease shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing and signed by Landlord. No employee of Landlord or
of Landlord's agents shall have any power to accept the keys to the Premises
prior to the termination of this Lease, and the delivery of the keys to any
such employee shall not operate as a termination of the lease or a surrender
of the Premises. If Tenant at any time desire to have Landlord sublet, or
attempt to sublet, the Premises for Tenant's account, Landlord or Landlord's
agents are authorized to receive said keys for such purposes without
releasing Tenant from any of the obligations under this Lease, and Tenant
hereby re-
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lieves Landlord of any liability for loss or damage to any of Tenant's
effects in connection with such subletting or attempted subletting.
ARTICLE 28
TENANT ESTOPPEL CERTIFICATE
Tenant shall, at any time and from time to time, upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge and
deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as modified, is in full
force and effect), the dates to which the rental and other charges are paid
in advance, if any, and the amount of Tenant's security deposit, if any, and
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, and no events or conditions then
in existence which, with the passage of time or notice, or both, would
constitute a default on the part of Landlord hereunder, or specifying such
defaults, events or conditions, if any are claimed. It is expressly
understood and agreed that any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the Property.
Tenant's failure upon Landlord's reasonable request to deliver such statement
within such time shall, at the option of Landlord, constitute a default under
this Lease.
ARTICLE 29
INTEREST ON PAST DUE OBLIGATIONS
Any amount due from Tenant to Landlord hereunder which is not paid when
due shall bear interest at the rate of ten percent (10%) per annum from the
due date until paid, unless otherwise specifically provided herein, but the
payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
ARTICLE 30
LIABILITY OF LANDLORD
In the event of any transfer or transfers of Landlord's interest in the
Premises, other than a transfer for security purposes only, the transferor
shall be automatically relieved of any and all obligations and liabilities on
the part of the Landlord accruing from and after the date of such transfer;
provided, however, that any funds in the hands of Landlord at the time of
such transfer in which Tenant has an interest shall be turned over to the
transferee and any amount then due and payable to Tenant by Landlord under
any provisions of this Lease shall be paid to Tenant, it being intended
hereby that the covenants and obligations contained in this Lease on the part
of Landlord shall, subject as aforesaid, be binding on Landlord, its
successors and assigns, only during and in respect of their respective
successive periods of ownership. Tenant agrees to look solely to Landlord's
estate and interest in the Property, the Building and the Premises (or the
proceeds thereof) for the satisfaction of any remedy of Tenant for the
collection of a judgment (or other judicial process) requiring the payment of
money by Landlord in the event of any default by Landlord hereunder, and no
other property or assets of Landlord shall be subject to levy, execution of
other enforcement procedure for the satisfaction of Tenant's remedies under
or with respect to this Lease, the relationship of Landlord and Tenant
hereunder, or Tenant's use or occupancy of the Premises.
ARTICLE 31
INABILITY TO PERFORM
This Lease and the obligations of Tenant hereunder shall not be affected
or impaired because Landlord is unable to fulfill any of its obligations
hereunder or is delayed in doing so, if such inability or delay is caused by
reason of unavailability of mate-
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rials, strike or other labor troubles or any other cause beyond the
reasonable control of Landlord. If Landlord is unable to give possession of
the Premises to Tenant as provided for under Article 1 hereof within one (1)
year after the Commencement Date, this Lease shall automatically terminate,
and Landlord shall not, by reason thereof, be subject to any liability,
except that Landlord shall return to Tenant all monies which Landlord has
theretofore received from Tenant as prepaid rent or as a security deposit.
For the purposes of Article 1 of this Lease, the Premises shall be deemed
ready for occupancy when Landlord has substantially completed construction of
Landlord's Standard Installation as provided in Article 38 hereof and the
building services to be provided by Landlord as set forth in Article 9 of
this Lease are available to the Premises. Landlord shall not be deemed to be
in default in the performance of any obligation required to be performed by
it hereunder, unless and until it has failed to perform such obligation
within thirty (30) days after written notice by Tenant to Landlord specifying
wherein Landlord has failed to perform such obligation; provided, however,
that if the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, then Landlord shall not be deemed
to be in default if it shall commence such performance within such thirty
(30)-day period and thereafter delinquently prosecute the same to completion.
ARTICLE 32
SEVERABILITY
Any provision of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision
hereof and such other provisions shall remain of full force and effect.
ARTICLE 33
ATTORNEYS' FEES
In the event of any litigation between Tenant and Landlord to enforce any
provision of this Lease or any right of either party hereto, the unsuccessful
party in such litigation shall pay to the successful party all costs and
expenses, including attorneys' fees, incurred therein by the successful
party. If either party hereto without fault is made a party to any litigation
instituted by or against the other party to this Lease, such other party
shall indemnify the party who without fault has been made a party to such
litigation against and save it harmless from all costs and expenses,
including reasonable attorneys' fees, incurred by it in connection therewith.
ARTICLE 34
TIME OF ESSENCE
Each of Tenant's covenants herein is a condition and time is of the
essence with respect to the performance of every provision of this Lease and
the strict performance of each shall be a condition precedent to Tenant's
right to remain in possession of the Premises or to have this Lease continue
in effect.
ARTICLE 35
HEADINGS
The article headings contained in this Lease are for convenience only and
do not in any way limit or amplify any term or provision hereof.
ARTICLE 36
LANDLORD AND TENANT
The terms "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular, the neuter shall include the masculine and feminine
genders and the obligations herein imposed upon Tenant shall be joint and
several as to each
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of the persons, firms or corporations of which Tenant may be composed.
ARTICLE 37
ENTIRE AGREEMENT
This Lease and the exhibits and any rider attached hereto constitute the
entire agreement between the parties hereto with respect to the subject
matter hereof, and no prior agreement or understanding pertaining to any such
matter shall be effective for any purpose. No provision of this Lease may be
amended or supplemented, except by an agreement in writing signed by the
parties hereto or their successors in interest.
ARTICLE 38
CONSTRUCTION OF PREMISES
Landlord agrees to cause the Premises to be completed in accordance with
the plans, specifications and agreements approved by both parties on the
terms, conditions and provisions set forth in the Agreement for Completion of
Premises attached hereto as Exhibit "B", and Tenant agrees to perform each
and all of its covenants, agreements and obligations at the time and in the
manner therein provided.
ARTICLE 39
RESERVED AREA
Tenant hereby acknowledges and agrees that the exterior walls of the
Premises and the area between the finished ceiling of the Premises and the
slab of the floor of the Building thereabove have not been demised hereby and
the use thereof together with the right to install, maintain, use, repair and
replace pipes, ducts, conduits and wires leading through, under or above the
Premises in locations which will not materially interfere with Tenant's use
of the Premises and serving other parts of the Building are hereby excepted
and reserved unto Landlord. Tenant is specifically prohibited from placing
any sign on the exterior of the Building. Tenant's lease of the Premises does
not include any air rights or subsurface rights related to the Premises,
Building or Common Areas.
ARTICLE 40
[Intentionally Omitted]
ARTICLE 41
NO OPTION
The submission of this Lease by Landlord, its agent or representative, for
examination or execution by Tenant does not constitute an option or offer to
lease the Premises upon the terms and conditions contained herein or a
reservation of the Premises in favor of Tenant, it being intended hereby that
this Lease shall only become effective upon the execution hereof by Landlord
and delivery of a fully executed counterpart hereof to Tenant.
ARTICLE 42
USE OF BUILDING NAME
Tenant shall not be allowed to use the name, picture or representation of
the Building, or words to that effect, in connection with any business
carried on in the Premises or otherwise (except as Tenant's address) without
the prior written consent of Landlord.
ARTICLE 43
PAYMENT OF INITIAL RENT AND SECURITY DEPOSIT
Notwithstanding anything to the contrary contained in this Lease, the
first month's rent, as provided in Article 2(a) hereof, and the security
deposit, as provided in Article 3 hereof,
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shall be paid to Landlord concurrently with the execution of this Lease.
ARTICLE 44
TENANT IMPROVEMENTS
Any alterations, additions or improvements to be installed by Tenant, its
contractors or agents at any time prior to or during the Term of this Lease,
shall only be done in compliance with the following:
(a) No such work shall proceed without Landlord's prior written
approval of (i) Tenant's contractor; (ii) certificates of insurance from a
company or companies approved by Landlord, furnished to Landlord by tenant's
contractor, for public liability and automobile liability and property damage
insurance with limits of not less than $100,000.00/$300,000.00/$50,000.00,
endorsed to show Landlord as an additional insured and for workmen's
compensation as required; and (iii) detailed plans and specifications for
such work in accordance with the terms set forth in Exhibit B.
(b) All such work shall be done in conformity with a valid building
permit or other permits or licenses when and where required, copies of which
shall be furnished to Landlord before the work is commenced, and any work not
acceptable to any governmental authority or agency having or exercising
jurisdiction over such work, or not reasonably satisfactory to Landlord,
shall be promptly replaced at Tenant's expense. Notwithstanding any failure
by Landlord to object to any such work, Landlord shall have no responsibility
therefor.
(c) All work by Tenant, its contractors or agents shall be scheduled
through Landlord and Tenant shall pay to Landlord on demand an amount equal
to Landlord's reasonable overhead and expenses for plan review,
coordination, scheduling and supervision thereof as reasonably determined by
Landlord.
(d) Tenant shall reimburse Landlord for any extra expense incurred
by Landlord by reason of faulty work done by Tenant or its contractors, or by
reason of delays caused by such work, or by reason of inadequate cleanup.
(e) All such work shall be done with union labor in accordance with
any applicable master or other labor agreement.
(f) Tenant or its contractors will in no event be allowed to
install plumbing, mechanical, electrical wiring or fixtures, acoustical or
integrated ceilings, or partitions over five feet, ten inches (5'10") in
height, unless approved in writing by Landlord.
(g) All data processing, Xerox, copying and other special electrical
equipment shall have a separate duplex outlet and shall be installed only
under the supervision of Landlord or its electrical contractor and Tenant
shall pay any additional costs on account of any increased support to the
floor load necessary therefor or for any other equipment.
(h) Landlord will permit Tenant and its agents to enter the
Premises prior to the Commencement Date in order that Tenant may perform
through its own contractors in accordance with the provisions hereof such
other work and decorations as Tenant may desire at the same time that
Landlord's contractors are working in the Premises. The foregoing license to
enter the Premises is granted to Tenant's workmen and mechanics to work in
harmony and not interfere with the labor employed by Landlord, Landlord's
mechanics or contractors, or by any other tenant or their contractors and in
compliance with all rules and regulations of the Building as Landlord shall
from time to time establish. If at any time such entry shall cause disharmony
or interference therewith, this license may be withdrawn by Landlord upon
forty-eight
19.
<PAGE>
(48) hours, written notice to Tenant. Such entry shall be deemed to be under
all of the terms, covenants, provisions, and conditions of the lease, except
as to the convenant to pay rent or except as otherwise expressly provided
for herein. Landlord shall not be liable in any way for injury, loss or
damage which may occur to any of Tenant's decorations or installations so
made prior to the Commencement Date, except due to Landlord's or its agents',
representatives' or employees' gross negligence or willful misconduct, the
same being solely at Tenant's risk.
ARTICLE 45
CPI ADJUSTMENT
Notwithstanding anything set forth in Article 2(a) of the lease, Tenant
hereby agrees that commencing January 1, 1988 and on each January 1 during
the remainder of the Term hereof (the "ADJUSTMENT DATE"), the monthly rental
in Article 2(a) hereof (as previously adjusted pursuant to this Article 45)
shall be increased by the percentage of increase, if any, shown by the
"Consumer Price Index - for the U.S. and Selected Areas for Urban Wage
Earners and Clerical Workers, All Items" published by the U.S. Department of
Labor, Bureau of Labor Statistics in the geographical area in which the
Premises are located, for the month which immediately precedes the Adjustment
Date as compared with the Index for the month which immediately precedes the
immediately preceding year's Adjustment Date, or with respect to the first
adjustment, the Commencement Date of this Lease; provided, however, that such
increase shall be limited to 4% of the monthly rental for the month which
immediately precedes the Adjustment Date. The amount of such increase in the
monthly rental shall be calculated by Landlord after the U.S. Department of
Labor publishes the statistics upon which the amount of the increase is to be
based. Upon its calculation thereof, Landlord shall give written notice of
the amount of the increase multiplied by the number of installments of rent
due hereunder since such Adjustment Date, and Tenant shall pay such amount
together with the monthly rent next becoming due hereunder and shall
thereafter pay the monthly rent due hereunder at such increased rate. The
failure of Landlord to make the calculations required hereunder promptly
shall not be deemed a waiver of Landlord's right to adjust the monthly rental
due hereunder, nor shall it affect the obligations of Tenant to pay such
increased monthly rental. If the Bureau of Labor Statistics ceases to use
the 1967 average of 100 as the basis of calculation for the Consumer Price
Index or if a substantial change is made in the items or number of items
contained in the Consumer Price Index, then the Consumer Price Index shall be
adjusted to that figure that would have been arrived at had the change in the
manner of computing a similar price index been in effect at the date of this
Lease. If, at the time required for the determination of the amount of any
increase in monthly rent payable under this Lease, said Consumer Price Index
is no longer published or issued, a reliable governmental or other
non-partisan publication evaluating the information theretofore used in
determining said Consumer Price Index shall be used.
ARTICLE 46
TRANSFER BY TENANT
Notwithstanding anything set forth in Article 13 hereof, it shall be a
condition to Landlord's consent to any subleasing, assignment or other
transfer of part or all of Tenant's interest in the Premises (hereinafter
referred to as a "TRANSFER") that (i) Tenant shall be required to pay
Landlord's reasonable attorneys' fees and other costs incurred in connection
with the review and execution thereof; (ii) upon Landlord's consent to any
Transfer, the basic rent, as to that portion under Article 2(a) hereof, shall
be readjusted to the then prevailing rental rate, provided, however, in no
event shall such rate be less than the amount set forth in Article 2(a)
hereof, subject to increase or decrease pursuant to Article 2(b), as of the
effective date of such Transfer; (iii) any sublessee of part or all of
Tenant's
20.
<PAGE>
interest in the Premises shall agree that in the event Landlord gives
such sublessee notice that Tenant is in default under this Lease, such
sublessee shall thereafter make all sublease or other payments directly to
Landlord, which payments will be received by Landlord without any liability
whether to honor the sublease or otherwise (except to credit such payments
against sums due under this Lease), and any sublessee shall agree to attorn
to Landlord or its successors and assigns at their request should this Lease
be terminated for any reason, except that in no event shall Landlord or its
successors or assigns be obligated to accept such attornment; (iv) any such
Transfer and consent shall be effected on forms, supplied or approved by
Landlord and/or its legal counsel; (v) any assignee or sublessee possesses
the net worth deemed reasonably sufficient by Landlord to enable such party
to meet the financial obligations under this Lease; (vi) any assignee or
sublessee possesses the reputation and stature in the local business
community (as reasonably determined by Landlord in its sole discretion) of
other tenants of the Building; and (vii) Landlord may require that Tenant not
then be in default hereunder in any respect. If such transfer pertains to a
portion of the Premises only, the basic rent under Article 2(a) for such
portion adjusted to the prevailing rental rate shall be computed on the
assumption that Tenant's rental and other sums due hereunder are allocable on a
pro rata, per square foot basis. Tenant hereby agrees and acknowledges that
the above conditions imposed upon the granting of Landlord's consent to any
proposed sublease, assignment or other transfer by Tenant are an articulation
of the standard of reasonableness of such consent and Landlord's imposition
of such conditions shall under no circumstances impair or limit Landlord's
rights and remedies under California Civil Code Section 1951.4 or any related,
successor or similar provision of law.
ARTICLE 47
AS-IS
Except as provided in Article 7, Tenant hereby agrees that the Premises
shall be taken "as-is" and "with all faults", and Tenant hereby agrees and
warrants that it has inspected the condition of the Premises and the
suitability of same for Tenant's purposes, and Tenant does hereby waive and
disclaim any obligation to, cause of action based upon, or claim that its
obligations hereunder should be reduced or limited because of the condition of
the Premises or the suitability of same for Tenant's purposes.
ARTICLE 48
COMMON AREAS
The term "Common Areas" is defined as all areas and facilities outside the
Premises and within the exterior boundary line of the Building that are
provided and designated by Landlord from time to time for the general,
non-exclusive use of the Landlord, Tenant and other tenants of the Building
and their respective employees, suppliers, shippers, customers and invitees,
including but not limited to common entrances, lobbies, corridors, stairways
and stairwells, public restrooms, elevators, escalators, parking areas to the
extent not otherwise prohibited by this Lease, loading and unloading areas,
trash areas, roadways, sidewalks, walkways, parkways, ramps, driveways,
landscape areas and decorative walls. Tenant agrees to abide by and conform
to the Rules and Regulations attached hereto and to cause its employees,
suppliers, shippers, customers and invitees to so abide and conform.
Landlord shall have the right, in Landlord's sole discretion, from time to
time:
(a) to make changes to the Building interior and exterior and the Common
Areas, including without limitation, changes in the location, size, shape,
number and appearance thereof, including but not limited to lobbies, windows,
stairways, airshafts, elevators, restrooms, escalators, driveways,
entrances, parking spaces, parking areas, loading and unloading areas,
ingress, egress, direction of traffic, decorative walls, landscaped areas
21.
<PAGE>
and walkways; provided, however, Landlord shall at all times provide the
parking facilities required by applicable law;
(b) to close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) to designate other land and improvements outside the boundaries of
the Building to be a part of the Common Areas, provided that such other land
and improvements have a reasonable and functional relationship to the
Building;
(d) to add additional buildings and improvements to the Common Areas;
(e) to use the Common Areas while engaged in making additional
improvements, repairs and alterations in the Building, or any portion thereof;
(f) to do and perform such other acts and make such other changes in,
to or with respect to Common Areas and Building as Landlord may, in the
exercise of sound business judgment, deem to be appropriate.
ARTICLE 49
BUILDING SECURITY
Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the
benefit of the Premises or the Building. Tenant assumes all responsibility
for the protection of Tenant, its agents and invitees and the property of
Tenant and of Tenant's agents and invitees from acts of third parties.
Nothing herein contained shall prevent Landlord, at Landlord's sole option,
from providing security protection for the Building or any part thereof, in
which event the cost thereof shall be included within the definition of
Operating Costs, as set forth in paragraph 2(c)(ii).
ARTICLE 50
EASEMENTS
Landlord reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Landlord deems necessary or desirable
and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Tenant. Tenant shall sign any of
the aforementioned documents upon request of Landlord and failure to do so
shall constitute a material default of this Lease by Tenant without the need
for further notice to Tenant. The obstruction of Tenant's view, air or light
by any structure erected in the vicinity of the Building, whether by Landlord
or third parties, shall in no way affect this Lease or impose any liability
upon Landlord.
ARTICLE 51
AUTHORITY
If Tenant is a corporation, trust or general or limited partnership,
Tenant, and each individual executing this Lease on behalf of such entity,
represent and warrant that such individual is duly authorized to execute and
deliver this Lease on behalf of said entity. If Tenant is a corporation,
trust or partnership, Tenant shall, within thirty (30) days after execution
of this Lease, deliver to Landlord evidence of such authority satisfactory to
Landlord.
22.
<PAGE>
ARTICLE 52
VEHICLE PARKING
So long as Tenant is not in default, and subject to the rules and
regulations attached hereto, and as established by Landlord from time to
time, Tenant shall be entitled to rent and use ten parking spaces in the
Building parking area at the monthly rate of $65 per month for unreserved
parking and $85 per month for reserved parking for the first year of the
Term, and then at the monthly rate applicable from time to time for monthly
parking as set by Landlord and/or its licensee based upon the prevailing
market rate per month for other similar office buildings located within the
Beverly Hills, West Hollywood areas. If Tenant commits, permits or allows
any of the prohibited activities described in the Lease or the rules then in
effect, then Landlord shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as
of the day and year first above written.
"LANDLORD"
CAROLCO PICTURES INC.,
a Delaware corporation
By: /s/ Warren Braverman
__________________________
Its CFO
"TENANT"
OVERSEAS FILM GROUP, INC.,
a Delaware corporation
By: /s/ Ellen Little
--------------------------
Its President
/s/ Ellen Little
--------------------------
Ellen Little
23.
<PAGE>
CAROLCO PICTURES INC.
8800 SUNSET BOULEVARD
SEVENTH FLOOR
LOS ANGELES, CALIFORNIA 90069
September 15, 1987
Ellen and Robert Little
Overseas Film Group, Inc.
Hollywood Center Studios
1040 N. Las Palmas Ave., Bldg. 5
Los Angeles, California 90038
Re: AMENDMENT NO. 1 TO CAROLCO/
OVERSEAS FILM GROUP, INC. OFFICE LEASE
Dear Ellen and Robert:
When executed by you, this Letter Agreement shall amend that certain lease
dated April 21, 1987 ("Lease") made and entered into between Carolco Pictures
Inc., a Delaware corporation ("Landlord") and Overseas Film Group, Inc., a
Delaware corporation ("Tenant"). Landlord and Tenant hereby modify paragraph
2 of the introduction to the Lease, paragraph (a) of Article 2 of the Lease
and Exhibit A to the Lease as follows:
That portion of the second paragraph of the Lease, third line, which
currently reads:
". . . the 3rd floor, containing approximately 3,637 rentable square
feet and located on the west side and adjoining one third portion of the
north side of such third floor . . ."
is hereby amended to read as follows:
". . . the 3rd floor which contains 3,729 rentable square feet and 3,198
usable square feet and located on the west side and adjoining one third
portion of the north side of such third floor."
Any reference in the Lease to rentable or usable square feet shall refer
to the figures set forth in this Letter Agreement.
-1-
<PAGE>
That portion of Article 2(a), fourth line, which currently reads:
". . . $1.70 per rentable square foot per month for a total monthly
rent of Six Thousand One Hundred Eighty Three Dollars ($6,183), . . ."
is hereby amended to read as follows:
". . . $1.70 per rentable square foot per month for a total monthly
rental of Six Thousand Three Hundred Thirty Nine Dollars ($6,339),
. . ."
That portion of Article 2(b), ninth line, which currently reads:
". . . as the case may be, by 5.13 percent (.0513%) (hereinafter
referred to as "TENANT'S PROPORTIONATE SHARE") . . ."
is hereby amended to read as follows:
". . . as the case may be, by 5.26 percent (.0526%) (hereinafter
referred to as "TENANT'S PROPORTIONATE SHARE") . . ."
Exhibit A attached to the Lease is hereby deleted in its entirety
and replaced with a new Exhibit A which is attached hereto and hereby
incorporated into the Lease by reference.
Except as hereby amended, the Lease shall remain in full force and
effect.
-2-
<PAGE>
As we are sure these modifications are acceptable to you, please
execute the enclosed copy of this Letter Agreement where set forth below and
return one fully executed copy to us as soon as possible. If you have any
questions, please do not hesitate to contact us.
Very truly yours,
CAROLCO PICTURES INC.,
a Delaware corporation
By: /s/ Warren Braverman
--------------------
Its E.V.P.
------------------
Agreed and Accepted this
___ day of September, 1987.
OVERSEAS FILM GROUP, INC.
a Delaware corporation
By: /s/ Robert Little
--------------------
Its
----------------
-3-
<PAGE>
AMENDMENT TO LEASE
This Amendment to Lease is entered into as of July 16, 1992, by and
between Carolco Pictures, Inc., a Delaware corporation (the "Landlord"), and
Overseas Film Group, Inc., a Delaware corporation (the "Tenant"). This
Amendment is made with reference to the following facts and objectives:
A. Landlord, Tenant and Ellen Little are parties to that certain
Office Lease dated April 21, 1987 (as previously amended, the "Lease") relating
to certain premises consisting of approximately 3,637 square feet (the
"Original Premises") located in the building commonly known as 8800 Sunset
Boulevard, Hollywood, California (the "Building") and outlined on Exhibit "A"
attached to the Lease.
B. The term of the Lease commenced on October 1, 1987, and is
scheduled to expire on September 30, 1992 (the "Original Expiration Date").
C. The parties hereto desire to amend the Lease in certain
respects as hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. The term of the Lease is hereby extended for five years, so
that it shall now expire on September 30, 1997.
2. The leasehold premises are hereby increased in size so that in
addition to the Original Premises outlined on Exhibit "A" to the Lease, they
shall also include the approximately 3,000 rentable square feet of space
(the "New Premises") located on the south side of the Building and outlined
on the plan attached to this Amendment as Exhibit "I". From and after the date
of this Amendment the term "Premises", as used herein and in the Lease, shall
mean both the Original Premises and the New Premises.
3. Effective as of the earlier of (i) October 1, 1992, or (ii)
the date on which Tenant completes the preparation of the New Premises for
its occupancy as contemplated by Paragraph 8 hereof, the monthly rental payable
by Tenant under the Lease shall be increased from the current amount to the
total amount of Ten Thousand Dollars.
4. For each "Comparison Year" (as defined in Paragraph (b) of
Article 2 of the Lease) ending after the Original Expiration Date, "Tenant's
Proportionate Share", as originally defined in said Paragraph (b), shall be
9.49 percent.
5. The monthly rental established in Paragraph 3 of this
Amendment shall be subject to CPI Adjustments on each January 1 during the
extended term of the Lease, commencing on January 1, 1994, all in accordance
with the provisions of Article 45 of the Lease.
<PAGE>
6. Article 52 of the Lease is hereby amended to permit Tenant, at
any time and from time to time, to rent and use up to twenty-two parking spaces
in the Building parking area, on the terms and subject to the conditions set
forth in said Article 52.
7. Tenant acknowledges that it is leasing the New Premises on an
"as-is" basis. Landlord agrees that the New Premises include all furniture,
cabinets and fixtures currently located therein; provided, however, that the
New Premises shall not include any audio visual equipment, computer equipment
or telecommunications equipment of Landlord currently located in said New
Premises, all of which shall be immediately removed by Landlord.
8. Landlord acknowledges that Tenant intends to make alterations
to the New Premises to tie it into the Original Premises, including but not
limited to removing the wall which currently separates the New Premises from
the Original Premises, constructing new walls and reconfiguring offices within
the New Premises, and carpeting and painting the New Premises. Tenant agrees
that it will promptly undertake such work and Landlord hereby consents thereto.
9. From and after the Original Expiration Date, Ellen Little shall
no longer be considered a Tenant under the Lease, and shall have no further
liability with respect thereto.
10. In the event Landlord fails to perform any of its obligations
under the Lease, and such failure continues for thirty days after written
notice thereof from Tenant, Tenant shall have the option (but not the
obligation) to cure such default, in which event Tenant shall further be
entitled to offset all amounts expended in curing such default against future
rental or other amounts due to Landlord under the Lease.
11. Promptly after the execution of this Amendment, Landlord
shall use its best efforts to obtain (i) a consent to this Amendment from its
lender, the Equitable Life Assurance Society of the United States,
and (ii) a recognition and nondisturbance agreement in favor of,
and in form reasonably acceptable to, Tenant, from any other
lenders having liens on the Building. In the event Landlord fails
to deliver either of such items to Tenant within 30 days of the
date of this Amendment, Tenant shall have the right and option to
terminate this Lease by sending written notice to Landlord at any
time prior to Tenant's receipt of said items.
12. If at any time during the term of this Lease, as extended by
this Amendment, any additional space on the third floor of the Building
becomes available for lease, Landlord shall offer the same to Tenant at the
same per square foot rental rate as then being paid by Tenant hereunder.
Landlord shall have no right to lease any space on the third floor of the
Building to any other person or entity unless Tenant fails to accept such
offer to lease said space within 30 days after Tenant's receipt of written
notice of its availability. In the event Landlord is then unsuccessful in
leasing said space for a period of six months, Landlord shall again offer the
space to Tenant.
2
<PAGE>
13. Tenant shall have the right and option to extend the term of
this Lease for an additional five year period by giving written notice to
Landlord at least six months prior to the Lease expiration date. The rental
rate for the extended term shall be the fair market rental value (but
without reference to any improvements made to the Premises by Tenant) as
agreed upon by Landlord and Tenant. In the event Landlord and Tenant are
unable to agree upon fair market rental value, the same shall be determined
by arbitration to be conducted in accordance with the rules of the American
Arbitration Association.
14. Except as herein set forth, the Lease shall remain unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
to Lease as of the day and year first above written.
LANDLORD: TENANT:
Carolco Pictures, Inc., a Overseas Film Group, Inc., a
Delaware corporation Delaware corporation
By: /s/ Robert Goldsmith By: /s/ William F. Lischak
-------------------- ----------------------
Title: Senior V.P. Title: COO/CFO
----------------- -----------------
3
<PAGE>
AMENDMENT TO LEASE
This Amendment to Lease is entered into as of January 1, 1995 (the "1995
Amendment") by and between Carolco Pictures Inc., a Delaware corporation (the
"Landlord"), and Overseas Film Group, Inc., a Delaware corporation (the
"Tenant"). This Amendment is made with reference to the following facts and
objectives:
A. Landlord and Tenant are parties to that certain Office Lease
dated April 21, 1987 (the "1987 Lease") relating to certain premises
consisting of approximately 3,637 square feet (the "Original Premises")
located in the building commonly known as 8800 Sunset Boulevard, Hollywood,
California (the "Building") and outlined in Exhibit "A" attached to the 1987
Lease.
B. Landlord and Tenant are parties to that certain Amendment to
Lease dated as of July 16, 1992 (the "1992 Amendment") relating to, among
other things, the increase in size of the leasehold premises by approximately
3,000 square feet (the "New Premises") as outlined on Exhibit "I" to the 1992
Amendment.
C. From and after the date of this 1995 Amendment, the term "Lease,"
as used herein and in the 1987 Lease and the 1992 Amendment, shall mean the
1987 Lease, the 1992 Amendment and the 1995 Amendment. Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the Lease.
D. The parties hereto desire to amend the Lease in certain respects
as hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. The leasehold premises are hereby increased in size so that in
addition to the Original Premises outlined on Exhibit "A" to the 1987 Lease
and the New Premises outlined on Exhibit "I" to the 1992 Amendment, they
shall also include the approximately 1,176 rentable square feet of space (the
"1995 New Premises") outlined on the plan attached to this 1995 Amendment as
Exhibit "I." From and after the date of this 1995 Amendment, the term
"Premises," as used herein and in the Lease, shall mean the Original
Premises, the New Premises and the 1995 New Premises.
2. Effective as of date first written above, the monthly rental
payable by Tenant under the Lease shall be increased from the current amount
to the total amount of Twelve Thousand One Hundred Dollars, which amount
includes the January 1, 1995 CPI Adjustment (as provided in Article 45 of the
Lease) relating to the Original Premises and the New Premises.
3. For each "Comparison Year" (as defined in Paragraph (b) of
Article 2 of the Lease) ending after the Original Expiration Date, "Tenant's
Proportionate Share," as originally defined in said Paragraph (b), shall be
11.02 percent.
<PAGE>
4. The monthly rental established in Paragraph 2 of this 1995
Amendment shall be subject to CPI Adjustment on each January 1 during the
term of the Lease, commencing on January 1, 1996, all in accordance with the
provisions of Article 45 of the Lease.
5. Tenant acknowledges that it is leasing the 1995 Premises on an
"as-is" basis. Landlord agrees that the 1995 Premises include all
furniture, cabinets and fixtures currently located therein; provided,
however, that the 1995 Premises shall not include any audio visual equipment,
computer equipment or telecommunications equipment of Landlord currently
located in said 1995 Premises, all of which shall be immediately removed by
Landlord.
6. Promptly after execution of this Amendment, Landlord shall use
its best efforts to obtain (i) a consent to this 1995 Amendment from its
lender, the Equitable Life Assurance Society of the United States and (ii) a
recognition and non-disturbance agreement in favor of, and in form reasonably
acceptable to, Tenant, from any other lenders having liens on the Building.
In the event Landlord fails to deliver either of such items to Tenant within
90 days of the date of this 1995 Amendment, Tenant shall have the right and
option to terminate this Lease by sending written notice to Landlord at
any time prior to Tenant's receipt of said items.
7. Except as herein set forth, the Lease shall remain unchanged and
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this 1995 Amendment
as of the day and year first above written.
LANDLORD: TENANT:
Carolco Pictures Inc., Overseas Film Group, Inc.,
a Delaware corporation a Delaware corporation
By: /s/ Robert Goldsmith By: /s/ William F. Lischak
-------------------- ----------------------
Title: SR. V.P. Title: COO/CFO
--------- ------------
<PAGE>
FOURTH AMENDMENT TO OFFICE LEASE
BY AND BETWEEN
DOLPHINSHIRE, L.P.
a California limited partnership ("Landlord")
AND
OVERSEAS FILM GROUP, INC.
a Delaware corporation ("Tenant")
- -------------------------------------------------------------------------------
THIS FOURTH AMENDMENT (the "Fourth Amendment") is dated as of the 9th day of
October, 1995, and constitutes on amendment to that certain Office Lease
dated April 21, 1987 (the "1987 Lease"), executed by and between Landlord's
predecessor in interest, Carolco Pictures, Inc., a Delaware corporation and
Tenant.
A. Landlord and Tenant are the current parties to the 1987 Lease
relating to certain premises consisting of approximately 3,637 rentable
square feet (the "Original Premises") located in the building commonly known
as 8800 Sunset Boulevard, Hollywood, California (the "Building").
B. Landlord and Tenant are the current parties to the Amendment to
Lease dated as of July 16, 1992 (the "1992 Amendment"), relating, among other
things, to the increase in size of the leasehold premises by approximately
3,000 rentable square feet (the "New Premises").
C. Landlord and Tenant are the current parties to the Amendment to
Lease dated January 1, 1995 (the "1995 Amendment"), relating, among other
things, to the increase in size of the leasehold premises by approximately
1,176 rentable square feet (the "1995 New Premises").
D. From and after the date of this Fourth Amendment, the term "Lease,"
as used herein and in the 1987 Lease, the 1992 Amendment and 1995 Amendment,
shall mean the 1987 Lease, the 1992 Amendment, the 1995 Amendment and this
Fourth Amendment. Capitalized terms not otherwise defined herein shall have
the meaning ascribed to them in the Lease.
E. The parties hereto desire to amend the Lease in certain respects
as hereinafter set forth.
1
<PAGE>
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. From and after the "Effective Date" (as defined below) the
leasehold premises are hereby increased so that in addition to the Original
Premises, the New Premises and the 1995 New Premises, they shall also include
the remainder of the third floor of the Building (the "Expansion Premises").
From and after the Effective Date, the term "Premises," as used herein and in
the Lease, shall mean the Original Premises, the New Premises, the 1995 New
Premises, and the Expansion Premises. The parties hereto agree that the
total rentable square footage contained in the third floor of the Building is
10,195.
2. As used in this Fourth Amendment, the term "Effective Date"
shall mean the date on which possession of the Expansion Premises is tendered
to Tenant with all of the tenant improvements referred to in Paragraph 6
hereof substantially completed. A notice confirming the Effective Date shall
be sent by Landlord to Tenant upon substantial completion of such tenant
improvements. It is the intent of the parties that the Effective Date occur
on or before November 1, 1995.
3. Nothing in this Fourth Amendment shall alter the expiration
date of the Lease, which is currently scheduled to occur on September 31,
1997.
4. The basic monthly rent (calculated on a fully serviced gross
basis) shall be increased to the amounts set forth below.
11/01/96 - 9/31/96 $1.55 psf $15,802.25 per month
10/01/96 - 9/31/97 $1.60 psf $16,312.00 per month
Additionally Tenant occupies a portion of P302 as storage facility
consisting of 42 square feet, for which the monthly rental is $31.50
(42 sq. ft. x $.75).
5. The "Comparison Year" for computing Tenant's share of
"direct costs" (as said terms are defined in Paragraph (b) of Article 2 of
the 1987 Lease) shall be 1995. Additionally, Tenant shall have no
responsibility for any share of direct costs incurred prior to November 1,
1996. As a result of the square footage added to the Premises by this
Amendment, from and after November 1, 1996, "Tenant's Proportionate Share,"
(as defined in Paragraph (b) of Article 2 of the 1987 Lease) shall be 12.9%,
based upon the Building's square footage of 78,877.
6. Landlord will promptly improve the Expansion Premises with
the tenant improvements described on the floor plan attached hereto as
Exhibit "A" (which improvements shall also include air balancing the
Premises, minor carpet repair, minor and water damage stain removal in two
areas). The reasonable out-of-pocket cost incurred by Landlord in making
such tenant improvements (up to a maximum amount of $5,200.00) shall be
reimbursed by Tenant, in monthly installments commencing on
2
<PAGE>
the Effective Date and amortized over the remaining term of the Lease at ten
(10%) percent interest.
Tenant further acknowledges that it is otherwise leasing the 1995
Expansion Premises in an "as-is" basis. The 1995 Expansion Premises includes
all furniture, cabinets and fixtures currently located therein, possession of
which will be returned to Landlord upon vacation of the Premises by Tenant.
7. The Lease, as modified hereby, is hereby reaffirmed, and the
provisions thereof, as so modified, shall remain in full force and effect.
Without limiting the generality of the foregoing, it is understood that all
provisions of the Lease which could be reasonably and logically construed as
applying to this Fourth Amendment (including, without limitation, the
authority and counterpart execution provision thereof) shall apply to this
Fourth Amendment as well as the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this document
as of the date first set forth above.
"LANDLORD" "TENANT"
Dolphinshire, L.P., Overseas Film Group, Inc.,
a California limited partnership a Delaware corporation
By: Dolphin Partners, Inc.,
Its Authorized Agent
By: /s/ Kevin Pitts By: /s/ Ellen Little
----------------------- -------------------------
Kevin Pitts, Ellen Little,
Vice President President
3
<PAGE>
OVERSEAS FILMGROUP, INC. SUBSIDIARIES
Alien Towers, Inc., a California corporation
Code 99 Productions, Inc., a California corporation
Enough Rope, Inc., a California corporation
Intrastate Film Distributors, Inc., a Delaware corporation
Jacaranda Music, Inc., a Delaware corporation
Overseas Filmgroup (UK) Limited, a corporation organized under the laws of the
United Kingdom
Positive, Inc., a California corporation
Road to Ruin, Inc., a California corporation
Walrus Pictures, Inc., a California corporation
OVERSEAS FILMGROUP (UK) LIMITED SUBSIDIARIES
Elphich Limited, a corporation organized under the laws of the United Kingdom
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-22023 and 333-16997) of Overseas Filmgroup,
Inc. of our report dated March 7, 1997 appearing on page F-1 of this Form
10-K.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Los Angeles, California
March 26, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF OVERSEAS FILMGROUP, INC. FOR THE YEAR
ENDED DECEMBER 31, 1996 ON PAGES F-1 THROUGH F-16 OF OVERSEAS FILMGROUP, INC.'S
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDING THE NOTES THERETO.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 399,726
<SECURITIES> 0
<RECEIVABLES> 11,141,239
<ALLOWANCES> 1,000,000
<INVENTORY> 28,358,324<F1>
<CURRENT-ASSETS> 0
<PP&E> 557,127<F2>
<DEPRECIATION> 723,197<F2>
<TOTAL-ASSETS> 40,803,685
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 5,778
<OTHER-SE> 12,185,988
<TOTAL-LIABILITY-AND-EQUITY> 40,803,685
<SALES> 28,677,571
<TOTAL-REVENUES> 28,677,571
<CGS> 23,449,114
<TOTAL-COSTS> 3,595,660
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 250,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,665,269
<INCOME-TAX> 3,131,367<F3>
<INCOME-CONTINUING> (1,466,098)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,466,098)
<EPS-PRIMARY> 0.22<F4>
<EPS-DILUTED> 0
<FN>
<F1>SEE NOTE 4 TO THE CONSOLIDATED FINANCIAL STATEMENTS FOUND ON PAGE F-1
THROUGH F-16 OF OVERSEAS FILMGROUP, INC.'S FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1996.
<F2>SEE NOTE 5 TO THE CONSOLIDATED FINANCIAL STATEMENTS FOUND ON PAGE F-1
THROUGH F-16 OF OVERSEAS FILMGROUP, INC.'S FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1996.
<F3>SEE NOTE 7 TO THE CONSOLIDATED FINANCIAL STATEMENTS FOUND ON PAGE F-1
THROUGH F-16 OF OVERSEAS FILMGROUP, INC.'S FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1996 REGARDING THE ONE TIME CHARGE TO INCOME AS A
RESULT OF THE CHANGE IN TAX STATUS FROM S TO C CORPORATION.
<F4>REPRESENTS PRO FORMA NET INCOME AS DESCRIBED IN NOTE 2 TO THE CONSOLIDATED
FINANCIAL STATEMENTS FOUND ON PAGE F-1 THROUGH F-16 OF OVERSEAS FILMGROUP,
INC.'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996.
</FN>
</TABLE>
