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<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<DESCRIPTION>JOINT VENTURE AGREEMENT
<TEXT>
JOINT VENTURE AGREEMENT
-----------------------
This Agreement is made this 12th day of May, 1997 by and between
SYRACUSE PRODUCTIONS, L.L.C., a New York limited liability company with offices
at 58 Copley Street, Auburn, New York 13021 (hereinafter referred to as
"Syracuse") and NEW SKY COMMUNICATIONS, INC., a New York corporation with
offices at 700 Reynolds Arcade, Rochester, New York 14614 (hereinafter referred
to as "New Sky") (Syracuse and New Sky are hereinafter sometimes referred
individually and collectively as "Venturer" or "Venturers").
R E C I T A L S
WHEREAS, Syracuse and New Sky are the General Partner and Special
Limited partner, respectfully, in Syracuse Film Partners, L.P., a New York
limited partnership ("Limited Partnership") which was formed to produce and
exploit an original screenplay currently entitled "FREAK TALKS ABOUT SEX" based
on an original idea created by Michael M.B. Galvin, and adapted for the screen
by Galvin, Peter M. Speakman and Paul N. Todisco (the "Screenplay") as a
theatrical motion picture (the "Picture") (the idea, Screenplay and/or Picture
and all ancillary rights thereto and therein are hereinafter collectively
referred to as the "Property"); and
WHEREAS, in addition to their relative rights and obligations as set
forth in the separate Agreement of Limited Partnership for Syracuse Film
Partners, L.P., Syracuse and New Sky wish to formalize their understanding with
respect to ancillary dealings and agreements in connection with the production
and distribution of the Picture and future movie production activity;
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NOW THEREFORE, in consideration for the mutual covenant set forth
herein, the parties hereto agree as follows:
1. CONTRACTS AND AGREEMENTS.
-------------------------
(a) All contracts or agreements to be entered into by or on behalf
of or for the benefit of the Venture must be signed by all parties hereto, it
being understood that no party shall have the right to bind the Venture without
the express written consent of the other party. It is understood that if any
contract or agreement is entered into by either party without the written
consent of the other party, the party purporting to enter into such unauthorized
contract or agreement on behalf of the Venture will indemnify and hold harmless
the non-contracting party from all claims, liabilities, damages and costs
(including attorneys' fees and court costs) arising out of or pertaining to such
unauthorized contract or agreement. It being further understood that this
paragraph shall not apply to contracts and agreement. It being further
understood that this paragraph shall not apply to contracts and agreements
reasonable and necessary to further the production of the Picture, so long as
they do not materially differ from the final budget of the Picture as set forth
in the Confidential Offering Memorandum for the Limited Partnership dated April
2, 1997 ("Offering Memorandum").
(b) The proceeds of any contracts entered into by any party hereto
for personal services of such party as a writer, producer, director,
actor/actress or otherwise with any third party motion picture company after
such motion picture company has acquired the Property hereunder shall belong
solely to such party;
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provided, however, that it is specifically agreed that any such agreement with a
motion picture company must agree to employ both parties hereunder as producers
of any motion picture based upon the Property and all credits for such motion
picture are in accordance with the credit provisions of Paragraph 3 of this
Agreement.
2. ALLOCATION OF PROFITS FROM LIMITED PARTNERSHIP. Syracuse and New Sky
-----------------------------------------------
agree that any third party net or gross profit participations which are
negotiated in connection with the production and distribution of the Property
shall be paid from New Sky's or Syracuse's respective share of all distributions
from the Limited Partnership, except for any profit participation agreed to in
advance by both parties. In this regard, Syracuse and New Sky hereby agree that
any profit participation negotiated with Steve Zahn shall be shared equally by
New Sky and Syracuse from their Limited Partnership distributions.
3. CREDITS.
-------
(a) Charles M. LaLoggia and Carl R. Reynolds shall be accorded the
following credit on a single card, in the main credits, on screen and in paid
ads controlled by Syracuse and in which any other Producer (for purposes of the
Agreement "Producer" shall mean James D. Daddabbo and Angela J. Daddabbo
collectively) is accorded credit, and in size of type (as to height, width,
thickness and
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boldness) equal to the largest size type in which any other Producer is
accorded credit:
"Executive Producers
Charles M. LaLoggia
Carl R. Reynolds"
(b) New Sky and Roxbury Partners shall be accorded the following
credit on a single card, in the main credits, on screen and in paid ads
controlled by Syracuse and in which any other Producer (for purposes of this
Agreement "Producer" shall mean James D. Daddabbo and Angela J. Daddabbo
collectively) in accorded credit, and in size of type (as to height, width,
thickness and boldness) equal to the largest size type in which any other
Producer is accorded credit:
"New Sky Communications, Inc. and Roxbury Partners Present"
4. DEVELOPMENT FEES. A development fee of $20,000 shall be paid to
----------------
New Sky under the Offering Memorandum upon the closing of the Offering. A
development fee of $20,000 shall be payable to Syracuse under the Offering
Memorandum on the earlier of the return of any Screen Actor's Guild bond posted
for the Picture, or along with other deferred compensation negotiated in the
budget for the Picture.
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5. EXCLUSIVITY AND OPTION.
-----------------------
(a) None of the parties shall be exclusive to the Venture and each
party may develop other properties and engage in other activities in the motion
picture and television industry or any other business, which may be competitive
in nature with the Venture, separate and apart from the Venture and the other
party. However, it is agreed that each party will devote as much time to the
business of the Venture as is reasonably necessary to fulfill its duties and
obligations herein.
(b) Any and all rights, that Syracuse now or hereinafter acquires in
the Property which are not specifically assigned, or otherwise transferred to
the Partnership, including but not limited to, theatrical remakes or sequel
rights, shall be jointly owned by the parties hereto. Neither party may exercise
any joint right under this Agreement without the written consent of the other
party.
(c) If Syracuse intends to product another picture within seven (7)
years of the date of this Agreement or five (5) years of the date of the initial
theatrical release (if any) of the Picture, whichever is later, then Syracuse
hereby grants New Sky the exclusive right and option to raise the production
financing for said subsequent picture (and one picture only), with the
understanding that the ownership rights in any subsequent picture, and financial
terms and conditions for its production shall be no less favorable to Syracuse
than those set forth herein and in the Offering Memorandum. Syracuse shall give
written notice to New Sky of its intent to commence production of the any
subsequent picture prior to entering into
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any agreement with any third party whereby such third party would acquire the
right to finance all or part of the picture. After such written notice, the
parties shall negotiate in good faith to finalize an agreement (which
negotiations shall not exceed 90 days), and New Sky shall have a period of one
year after finalization of the agreement to provide such financing. If New Sky
is unable to provide financing as agreed within the one year period, Syracuse
may proceed with the production concerned without the involvement of New Sky and
the parties shall have no further obligation to each other with respect to such
production.
6. TERM. The term of this Joint Venture shall commence on the effective
----
date of this Agreement, and, unless sooner terminated in accordance with the
provisions hereof, shall continue for the aggregate term of any and all
agreements relating to the Picture and Screenplay. This Agreement shall commence
and take effect only upon the closing of the Offering Memorandum.
7. PARTNERSHIP AGREEMENT. This Agreement shall be subject to the
---------------------
Agreement of Limited Partnership for the Limited Partnership, and to the extent
that that agreement is inconsistent with this Agreement, the terms and
provisions of the Agreement of Limited Partnership shall supersede any term or
provision of this Agreement.
8. REPRESENTATIONS AND WARRANTIES. Each party hereto represents and
------------------------------
warrants to the other as follows:
23
(a) (i) that it possesses the legal authority and capacity and has
obtained the necessary Board of Director or Member approval to enter into this
Agreement:
(ii) that there are not outstanding liens, claims,
administrative orders, judgments, contracts or other circumstances which
adversely affect either the substance of this Agreement or the ability of either
party to enter into or perform this Agreement;
(iii) that it shall not encumber or sell any property, assets,
or intangible rights of the Venture without the written consent of the other
party;
(iv) that it shall not assign, mortgage, hypothecate or encumber
its interest in the Venture without the written consent of the other party;
(v) that it shall not loan any funds or extend any credit of the
Venture to any person or entity without the written consent of the other party;
(vi) that it shall not incur any expense, cost, liability or
obligation in the name of or on the credit of the Venture without the written
consent of the other party;
(b) Each party hereby indemnifies and holds harmless the other party
from and against any and all claims, liabilities, damages and costs
24
(including but not limited to reasonable attorneys' fees and court costs)
arising from any breach by such party of any representation, warranty or
agreement made by such party herein.
(c) Any loss sustained by the Venture because of the breach by any
party of any representation or warranty shall be deducted from such party's
share of distributions from the Limited Partnership.
9. DISSOLUTION AND TERMINATION.
----------------------------
(a) The Venture shall be dissolved and terminated and its business
wound up upon the first of the following:
(i) The expiration of the term set forth herein;
(ii) Mutual agreement of the parties;
(iii) Operation of law;
(iv) Material breach of the Agreement by any party, which breach is
not cured in thirty (30) days after written notice thereof from the
non-defaulting party; provided, however, it is understood that only the
non-defaulting party; provided, however, it is understood that only the
non-defaulting party shall have the right to terminate the Venture pursuant
thereto. Such termination shall not release the defaulting party from any of the
obligations or liabilities to the other party whether pursuant to this Agreement
or at law or in equity.
10. ASSIGNABILITY. This Agreement shall not be assigned without the
-------------
written permission of the other party.
25
11. AMENDMENT. This Agreement may be amended in writing only and shall
---------
be binding upon and inure to the benefit of the successors and assigns of the
parties.
12. ARBITRATION. The parties agree that should any dispute arise
-----------
hereunder such dispute shall be resolved by arbitration in accordance with the
rules and regulations of the American Arbitration Association, as those rules
may be amended. Such rules are incorporated herein and made a part of this
Agreement by reference. The parties agree to abide by and perform any award
rendered in such arbitration and that any court having jurisdiction may issue a
final judgment based upon such award.
13. CONSTRUCTION. This Agreement shall be construed under the laws of
------------
the State of New York applicable to agreements executed and to be wholly
performed within such state and the parties hereby designate New York as the
sole convenient forum for the resolution of disputes hereunder.
14. NO CONFLICT. Nothing herein contained shall be construed to require
-----------
any action or payment of any compensation contrary to law or in violation of any
guild or union agreement which, from time to time, may be in effect. If there is
any conflict between any provision of this Agreement and any such law, or guild
or union agreement, and the letter shall prevail, then the affected provisions
of this Agreement shall be modified only to the extent necessary to remove such
conflict.
26
15. OTHER DOCUMENTS. Each party agrees to execute all documents and
---------------
take all further actions reasonably necessary in connection with the performance
of the obligations hereunder.
16. WAIVER. No waiver by any party hereto of any failure by any other
------
party to keep or perform any convenant or condition hereof shall be deemed a
waiver of any preceding or succeeding breach of the same or any other covenant
or condition.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
and date first above written.
SYRACUSE PRODUCTIONS, L.L.C.
By: /S/ JAMES D. DADDABBO
---------------------
James D. Daddabbo, Member
NEW SKY COMMUNICATIONS, INC.
By: /s/ CARL R. REYNOLDS
--------------------
Carl R. Reynolds, President
27