EXHIBIT 10.17
AGREEMENT made with effect from the lst day of June 1996, but executed on
the 28th day of June 1996, BETWEEN UNITED INTERNATIONAL PICTURES of 45 Beadon
Road, London W6 OEG ("LICENSOR") and MAGNET CORPORATION of 405 Tasman Drive,
Sunnyvale, CA 94089, USA ("LICENSEE").
IT IS HEREBY AGREED as follows:
1. LICENSOR hereby grants to LICENSEE a limited non-exclusive license
under copyright or otherwise to distribute the PICTURES for Hotel Guest
Exhibition in the HOTELS in the Territory for their respective Exhibition
Periods.
2. In consideration for the license granted herein,:
(a) LICENSEE shall pay to LICENSOR in respect of those HOTELS in the
Territory engaged in Guest To Pay Exhibition (as defined below) a monthly
Royalty which shall be the greater of:
(i) [***] of the Guest To Pay Gross Receipts (as defined
below) derived from the Guest To Pay Exhibition of the PICTURES in such HOTELS
during that month PROVIDED THAT LICENSOR may, at the time of announcing
availability of PICTURES, at its reasonable discretion and upon consultation
with LICENSEE on a PICTURE-by-PICTURE basis, direct that such Royalty rate be
increased to any percentage up to [***] in respect of Gross Receipts attribu-
table to specified PICTURES; or
(ii) the Minimum Guarantee payable in respect of that month.
For the purpose of this Clause 2(a), the "Minimum Guarantee" payable each month
this Agreement remains in effect shall be calculated as follows:
- the sum of [***] per month; plus
- to the extent that the number of Rooms notified by
LICENSEE in accordance with Clause 3(c) of the General Terms and Conditions from
time to time falls within the following levels:
NO. OF ROOMS ROOM RATE
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[***] [***]
[***] [***]
[***] [***]
the applicable Room Rate multiplied by the number of Rooms within that level and
by the number of days in that month in which PICTURES are available for Hotel
Guest Exhibition at the HOTELS.
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
(b) LICENSEE shall pay a separate monthly Royalty to LICENSOR in
respect of LICENSEE's Guest to Pay Exhibition of the PICTURES at the Lotte Hotel
in Seoul, Korea by way of a traditional "pay per day" service (the "Pay Per Day
Service") over and above the separate Video On Demand service which shall
continue to be supplied by LICENSEE to that HOTEL and to other HOTELS pursuant
to Clause 2(a) above. The monthly Royalty payable in respect of the Pay Per Day
Service to the Lotte Hotel pursuant to this Clause 2(b) shall be separately
accounted for and payable in addition to the Royalty which shall continue to be
payable in respect of that Hotel pursuant to Clause 2(a) above. The separate
monthly Royalty due under this Clause 2(b) shall be the greater of:
(i) [***] of the Guest To Pay Gross Receipts derived from
the Pay Per Day Service during the month in question; and
(ii) a separate Minimum Guarantee applicable to the Pay Per
Day Service for that month equal to [***] for each Room to which that Service is
provided multiplied by the number days in that month in which PICTURES are
available on the Pay Day Service at the HOTEL in question.
Subject to prior written approval from LICENSOR in each instance (such approval
being at LICENSOR's absolute discretion), LICENSEE may include additional HOTELS
within the Pay Per Day Service subject to and on the terms set out in this
Clause 2(b).
(c) Subject again to written approval from LICENSOR in each instance
(such approval being at LICENSOR's absolute discretion), LICENSEE may supply a
separate Free to Guest Exhibition service to specified HOTELS separate from and
in addition to the Guest To Pay Exhibition service made available to the same
HOTELS pursuant to Clause 2(a) above. Separate from the Royalty payable in
respect of such HOTELS pursuant to Clause 2(a), LICENSEE shall pay a further
monthly Royalty in respect of the Free to Guest Exhibition permitted hereunder,
calculated at the rate of [***] for each Room at the HOTELS the subject of this
Clause 2(c) multiplied by the number of days in that month in which PICTURES are
available for such Free To Guest Exhibition.
(d) For the purpose of this Agreement.
(i) "Free To Guest Exhibition" shall mean Hotel Guest
Exhibition of the PICTURES for which no charge whatsoever is made to any guest
or resident of any Hotel in connection with the exhibition of the PICTURES in
that Hotel;
(ii) "Guest To Pay Exhibition" shall mean Hotel Guest
Exhibition of the PICTURES for which LICENSEE or the Hotel concerned shall make
a charge to any guest or resident of such Hotel in connection with the
exhibition of the PICTURES in that Hotel, and
(iii) "Guest To Pay Gross Receipts" shall mean any and all
sums which are charged or which (save as a result of legitimate guest complaints
fully documented in writing) should
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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be charged to Hotel guests or residents in connection with the Guest To Pay
Exhibition of the PICTURES, without any deductions of any kind whatsoever;
(e) Within sixty (60) days after the end of each month, LICENSEE
shall submit to LICENSOR a royalty return in the form set out in Schedule C
together with payment in full of the total Royalty due in aggregate pursuant to
Clauses 2(a)-(c) above.
(f) Save to the extent expressly agreed otherwise in respect of the
HOTELS specified at Clause 2(c) above, LICENSEE shall ensure that in no event
shall the PICTURES be exhibited in any HOTEL free of charge to any guest or
resident of the Hotel/s.
(g) All payments hereunder shall be made in United States Dollars by
wire transfer to the credit of LICENSOR's US$ account at:
Bank of America N.T. & S.A.
Assubel Building
Uitbreidingstraat 180, Box 6,
B-2600 Antwerp
BELGIUM
Account No.: 685.3658014.18
or such other account as LICENSOR may from time to time designate. Royalties
payable to LICENSOR shall be net of all income or other taxes, customs duties or
other levies or charges attributable in anyway to the supply and exhibition of
the PICTURES pursuant to this Agreement and LICENSEE shall make no deductions or
withholdings in this respect.
(h) In the event that payment of any amounts due to LICENSOR
hereunder shall be overdue then LICENSOR shall be entitled to charge interest at
the rate of two percent (2%) above the rate from time to time charged by
LICENSOR's principal bank as from the due date until cleared funds representing
full settlement of such amount is received by LICENSOR.
3. LICENSOR shall supply such number of PICTURES per annum (up to sixty
(60) subject to availability) and such number of Video Cassettes per PICTURE as
shall be determined by LICENSOR in its reasonable discretion upon consultation
with LICENSEE, which shall be delivered to LICENSEE in accordance with Clause
1(b) of the General Terms and Conditions attached hereto. At the end of each
year of this Agreement, at LICENSOR's sole option, LICENSEE shall erase, destroy
or return all Video Cassettes supplied during the previous year in accordance
with the procedures set out in Clause 5 of the General Terms and Conditions
attached hereto unless, upon request by LICENSEE, LICENSOR in its sole
discretion permits LICENSEE to retain some or all of such Video Cassettes for
Hotel Guest Exhibition for the succeeding year of this Agreement, such retained
cassettes to be deducted from the agreed number of Video Cassettes to be
supplied for that succeeding year. Payment for all PICTURES including retained
titles shall be made in accordance with Clause 2 of this Agreement.
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4. Subject at all times to the terms of Clause 13 of the General Terms
and Conditions attached hereto, this Agreement shall be for a period of thirteen
(13) months commencing on the effective date hereof and shall automatically
continue thereafter for successive periods of one (1) year unless and until
terminated by either party by giving written notice to that effect not less than
thirty (30) days prior to 30th June in each year.
5. (a) In each new Hotel notified to LICENSOR in accordance with Clause
3(c)(ii) of the General Terms and Conditions attached hereto, Hotel Guest
Exhibition shall not commence without the prior written approval of LICENSOR for
such Hotel, which approval LICENSOR shall not unreasonably withhold. Upon such
approval Schedule A shall be deemed amended accordingly.
(b) LICENSEE shall notify LICENSOR of any cancellation for any Hotel
in accordance with Clause 3(c)(iii) of the General Terms and Conditions attached
hereto.
6. The Territory licensed hereunder shall consist of Australia, Fiji,
France, Hong Kong, Israel, Japan, New Zealand, the Philippines, South Africa,
Singapore, South Korea, Taiwan, Thailand, the United Kingdom and such other
countries which may be added to this Agreement by letter of amendment from time
to time.
7. This Agreement shall be governed in accordance with the laws of
England and shall be subject to the non-exclusive jurisdiction of the English
courts.
8. Terms defined in the General Terms and Conditions shall have the same
meaning herein and those defined herein shall have the same meaning in the
General Terms and Conditions.
9. In all other respects the General Terms and Conditions attached hereto
shall govern. If this Agreement is inconsistent with the General Terms and
Conditions this Agreement shall govern.
10. This Agreement includes the General Terms and Conditions and Schedules
A, B, C and D attached hereto.
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IN WITNESS WHEREOF the parties have executed this Agreement the day and
year first above written.
UNITED INTERNATIONAL PICTURES
By: \s\ Brian F. Reilly
----------------------------------------
Typed Name: Brian F. Reilly
Typed Title: Director's Representative
MAGINET CORPORATION
By: \s\ Paul D. Coss
----------------------------------------
Typed Name: Paul D. Coss
Typed Title: Director of Program Acquisitions
and Development
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GENERAL TERMS AND CONDITIONS
----------------------------
Supplementing the special terms and conditions set forth in the Agreement
attached ("the Agreement") made between the LICENSOR and LICENSEE named in the
Agreement.
DEFINITIONS
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In the Agreement and in these Terms and Conditions, the following words
shall have the following meanings:
"Hotels": The Hotel(s) in the Territory listed by name and
location in Schedule A to the Agreement as
amended from time to time under Clause 3(c),
PROVIDED THAT all such Hotels shall be bona fide
hotel establishments; (i) whose rooms are made
available exclusively to overnight hotel guests
for the principal purpose of providing such
guests with short-term temporary accommodation;
and (ii) in which the exhibition of motion
pictures to guests in their rooms constitutes a
service which is merely ancillary to providing
accommodation to such guests.
"Rooms": The individual Hotel rooms or suites in each
Hotel which (i) are available for occupancy by
overnight hotel guests (regardless of actual
occupancy); and (ii) have equipment installed
for Hotel Guest Exhibition. The number of Rooms
in each Hotel is set out in Schedule A to the
Agreement as amended from time to time under
Clause 3(c).
"Commencement Date": For each Hotel the date on which Hotel Guest
Exhibition is to commence in such Hotel as set
out in Schedule A to the Agreement as amended
from time to time under Clause 3(c).
"Hotel Guest Exhibition": Exhibition solely in individual Hotel rooms or
suites, to which only overnight guests of the
Hotel have access, such exhibition being by
means of video cassettes on closed circuit
television systems. Hotel Guest Exhibition does
not include exhibition in any room or area to
which members of the general public (i.e.,
persons, including persons attending
conferences, who are not overnight guests of the
Hotel) have access nor does it include
exhibition by any means or media except as
specifically described above.
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"PICTURES": The feature length motion pictures identified in
Schedule B of the Agreement to the extent
available, or those feature length motion
pictures selected by LICENSOR in its sole
discretion.
"Video Cassettes": The video cassettes of the PICTURES in finished
form and an agreed format and standard delivered
by LICENSOR to LICENSEE (either directly or
through an approved laboratory as specified in
Clause 5(a)) for Hotel Guest Exhibition
hereunder.
"Availability Date": The date upon which LICENSOR is able to supply
the Video Cassettes of the PICTURE in the agreed
format to LICENSEE in the Territory for use
pursuant to the Agreement. Availability Dates
for each PICTURE are established by LICENSOR's
ultimate suppliers, in view of such suppliers'
own interests and rights, as well as by the
technical requirements of producing the
appropriate format, etc., and are not subject to
LICENSOR's control.
"Termination Date": The date upon which the Agreement is terminated
under Clause 4 of the special terms above or
Clause 13 below, whichever is earlier.
"Exhibition Period": For each PICTURE separately, the period during
which the exhibition pursuant to the Agreement
is allowed, such Exhibition Period to commence
from the earlier of the date of first Hotel
Guest Exhibition of that PICTURE or the expiry
of fifteen (15) days from the date of actual
delivery to LICENSEE and to continue for a
period of one (1) year subject to earlier
termination as at: (i) the Termination Date, or
(ii) any date on which LICENSOR's right to
license the PIC under the Agreement shall cease.
Any extension of the Exhibition Period shall be
subject to LICENSOR's prior consent and in
addition conditional upon prior clearance by
LICENSOR with its suppliers that such PICTURE is
not the subject of any previously agreed period
of exclusivity for Hotel pay-per-view exhibition
by any third party.
LICENSE
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1. (a) LICENSOR has granted to LICENSEE a limited non-exclusive
license under copyright or otherwise to distribute the PICTURES for Hotel Guest
Exhibition in the Hotels in the Territory for their respective Exhibition
Periods.
(b) LICENSOR will arrange for delivery of the Video Cassettes to
LICENSEE subject to the Availability Dates of the relevant PICTURES and to the
timely payment of Royalties and all other sums due under the Agreement. In no
event shall LICENSEE permit the exhibition of PICTURES or deliver Video
Cassettes of such PICTURES to the Hotels prior to their Availability Dates.
(c) LICENSEE undertakes to ensure the exhibition of the PICTURES
solely in the manner and location provided herein and solely during their
Exhibition Periods. LICENSEE further undertakes not to permit the exhibition of
any of LICENSOR's Pictures the exhibition rights of which have not been
specifically granted to LICENSEE hereunder.
(d) LICENSOR reserves all rights in and to each PICTURE except as
expressly licensed hereunder and LICENSOR may exercise any of its reserved
rights without limitation and regardless of the extent to which such exercise is
competitive with LICENSEE or the license hereunder granted.
(e) The Agreement shall expire on the Termination Date. All rights in
the PICTURES shall revert to LICENSOR upon the termination of their Exhibition
Periods or the Termination Date, whichever is earlier.
ACCOUNTING AND AUDIT
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2. (a) LICENSEE shall keep complete and accurate books of account
and shall preserve all contracts and other records relative to the exhibition of
each of the PICTURES during the term of the Agreement and for a period of not
less than two (2) years thereafter. Should any dispute arise with reference to
any accounting item, the relevant books and records shall be preserved until the
dispute has been resolved and the two (2) year period shall be extended
accordingly.
(b) LICENSOR, by its auditors (whether external or internal), agents
(including any designated collection agent), representatives and/or employees
shall have the right to audit books of account and records of LICENSEE relative
to the PICTURES and make copies thereof and take excerpts therefrom at any time
during normal business hours during the term of the Agreement and for a period
of not less than two (2) years after the expiry of such term. All fees in
connection with such audit shall be paid by LICENSOR PROVIDED THAT in the event
such audit reveals cumulative under-reporting and under-payment to LICENSOR in
excess of One Thousand United States Dollars (US$1,000) (or its local currency
equivalent) then, in addition to immediate repayment of the amount concerned,
and without prejudice to any other rights available to LICENSOR in respect
thereof LICENSEE shall bear all the expenses incurred by LICENSOR in such audit
together with compound interest (at such commercial rate as LICENSOR may
specify) upon the understated amount from the date first due to LICENSOR.
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REPORTS
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3. (a) LICENSEE shall render to LICENSOR royalty returns in the form
set out in Schedule C within sixty (60) days after the end of each calendar
month.
(b) LICENSEE shall provide as of June 30 of each year, or as of such
other time as is mutually agreed by the parties, an inventory in a format
satisfactory to LICENSOR stating the PICTURE title, type and location of all
Video Cassettes in the possession of LICENSEE. This inventory shall be sent to
LICENSOR no later than 30 July of each year. LICENSOR reserves the right to
spot-check the inventory at any time during the term of the Agreement during
normal business hours.
(c) At the same time as submitting royalty returns to LICENSOR in
accord with Clause 3(a), LICENSEE shall notify LICENSOR on a monthly basis of:
(i) any changes in the number of Rooms in a Hotel;
(ii) (subject at all times to the requirement for LICENSOR'S
prior approval being obtained pursuant to Clause 5(a) of the Agreement), new
Hotels due to have equipment installed for Hotel Guest Exhibition the following
month and the proposed Commencement Date for Hotel Guest Exhibition and Rooms in
each new Hotel; and
(iii) existing Hotels due for cancellation the following month.
Upon request by LICENSOR, LICENSEE agrees to provide LICENSOR with a letter from
a Hotel stating the number of Rooms in such Hotel and/or confirming the
effective commencement or cancellation dates of such Hotel.
TAXES
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4. LICENSEE shall pay and bear the cost of all present and future
taxes (including, but not limited to, remittance taxes, withholding taxes and
value added taxes), customs duties, levies, censorship charges (including
interest and penalties on any such amount) connected with the licensing, rental,
delivery, import, export, exhibition, possession or use of the PICTURES or any
Video Cassettes or the payments made and received pursuant to the Agreement.
DELIVERY AND RETURN
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5. (a) In respect of each PICTURE, LICENSOR shall deliver to
LICENSEE Video Cassettes in the quantity set out in the Agreement. Delivery
shall be made either directly by LICENSOR or subject to LICENSOR's prior written
consent by a laboratory approved by LICENSOR and the Motion Picture Association
(MPA), in LICENSOR' sole discretion. If delivery is to be made through an
approved laboratory, LICENSEE must give its purchase orders for Video
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Cassettes directly to LICENSOR who shall place such orders with such laboratory.
LICENSEE is not authorized to place orders directly with such laboratory.
(b) LICENSEE shall be entitled to use only the Video Cassettes, The
reproduction by LICENSEE of any Video Cassettes, in whole or in part, is
prohibited. Any cutting, re-editing, change of title or any other alteration of
Video Cassettes may take place only with the prior consent in writing, of
LICENSOR and shall be at LICENSEE's entire cost.
(c) LICENSEE shall bear all costs in connection with the production
of Video Cassettes and the shipping, handling and clearance charges for delivery
of Video Cassettes to LICENSEE, the cost of the manufacture, transportation and
copying and censorship of the Video Cassettes and the cost of making any further
Video Cassettes. All costs and fees incurred by such laboratory as is referred
to in Clause 5(a) above shall be invoiced by the laboratory directly to LICENSEE
or if LICENSOR supplies the Video Cassettes directly, LICENSOR as above to
LICENSEE, and LICENSEE undertakes to pay all such invoices promptly and in any
event within thirty (30) days of receipt of LICENSOR's invoice in respect
thereof. For the avoidance of doubt, the cost of manufacturing masters and the
cost of delivery thereof to the laboratory shall be borne by LICENSOR.
(d) Upon the termination of the Exhibition Period for each PICTURE or
on the Termination Date, whichever is earlier, LICENSEE shall erase or destroy
the relevant Video Cassettes as set out in Clause 5(e).
(e) If LICENSEE determines during the term of the Agreement or upon
its expiry for any reason that certain Video Cassettes should be erased or
destroyed it must obtain the prior written approval of LICENSOR for the erasure
or destruction of such Video Cassettes and for the proposed methods and
locations of such erasure or destruction. If such Video Cassettes are to be
erased then LICENSEE must ensure that the erasure process completely erases the
contents of the Video Cassettes. LICENSEE shall submit destruction certificates
to LICENSOR in a form to be agreed with LICENSOR for each Video Cassette erased
or destroyed. Notwithstanding Clause 6(a), after erasure LICENSEE is entitled
to retain all blank video cassettes.
(f) Any breach by LICENSEE of this Clause 5, including specifically
the use of video cassettes of the PICTURES other than the Video Cassettes, shall
constitute a material breach of the Agreement.
OWNERSHIP
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6. (a) All Video Cassettes delivered hereunder shall remain the
property of LICENSOR or its suppliers and title to the Video Cassettes shall
remain vested in LICENSOR or its suppliers at all times.
(b) LICENSEE shall not remove nor permit others to remove any
copyright notice or trademark from any of the Video Cassettes or advertising
material pertaining to the PICTURES.
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LICENSEE shall not exhibit or permit the exhibition of any Video Cassette
without a copyright warning notice in the form set out at Schedule D hereto or
as otherwise previously approved in writing by LICENSOR.
(c) LICENSEE shall have no right of its own to the trademarks of
LICENSOR and its suppliers and it shall not use the same except with reference
to the PICTURES.
(d) LICENSEE undertakes not to use the Video Cassettes of the
PICTURES or of any other motion picture the property of LICENSOR or its
suppliers for any purpose (including previews), other than as specified in the
Agreement without LICENSOR's prior written consent.
(e) LICENSEE shall take all possible steps to ensure that the Video
Cassettes supplied to the Hotels are not used by third parties for any purpose
other than as specified in the Agreement. LICENSEE further agrees that it will
secure from its customers undertaking that said customers will use their best
endeavours to protect the Video Cassettes from any unauthorised use,
distribution and/or commercialisation. LICENSEE confirms that it will refuse to
supply customers failing to comply with the above undertaking. LICENSEE shall
further use its best efforts to ensure that video cassette recorders and other
audio visual devices cannot be connected to television sets placed in the rooms
in the Hotels on which the closed circuit exhibition of the PICTURES is received
and that all video cassettes are stored and transported in the most secure way
possible to prevent theft, loss and/or damage.
(f) Should LICENSEE learn of any infringement of copyright or
trademark relative to the PICTURES or any trademarks used in connection with the
PICTURES, it shall promptly notify LICENSOR.
(g) Any breach by LICENSEE of this Clause 6 shall constitute a
material breach of the Agreement.
WARRANTIES
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7. (a) LICENSOR warrants that the exercise of the rights licensed
hereunder will require no further licenses and shall not infringe upon the
rights of any third party with the exception of public performance or mechanical
reproduction rights of copyrighted material contained in the PICTURES. However,
LICENSOR neither warrants nor makes any representation concerning the local laws
or regulations applicable to the exercise of any of the rights licensed
hereunder in any particular country, compliance with such laws and/or
regulations being the sole responsibility of LICENSEE, and LICENSEE further
hereby agrees to indemnify LICENSOR and hold LICENSOR harmless from any claims
which may arise concerning compliance under local laws and/or regulations.
(b) LICENSEE warrants that it has or will acquire all permits and
licenses that may be required for the importation, distribution and exhibition
of the PICTURES in the Hotels in
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the Territory during the Exhibition Period and for making all payments as
provided in the Agreement.
(c) LICENSEE further warrants that it has binding agreements with the
Hotels to exhibit the PICTURES beginning on the Commencement Dates set out in
Schedule A as amended from time to time under Clause 3(c) and warrants that at
no time during the term of the Agreement is it or will it be in default under
any such agreements.
INDEMNIFICATION
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8. (a) LICENSOR agrees to indemnify and hold harmless LICENSEE against
and from any and all claims, damages, liabilities, costs and expenses, including
reasonable counsel fees arising out of the exercise of any rights granted herein
or out of any breach by LICENSOR of any representation, warrant or other
provision hereof. LICENSEE warrants that it will not exploit the PICTURE(S) in
excess of rights granted in this Agreement.
(b) LICENSEE agrees to indemnify and hold LICENSOR harmless from any
cost, liability, expense and/or damage, including reasonable loss of profit,
incurred by LICENSOR by virtue of the violation of the terms or conditions of
the Agreement by LICENSEE, the Hotels or any other person, natural or juridical,
acting on behalf of or pursuant to authorisation received from either LICENSEE
or an employee, officer or agent of LICENSEE.
(c) Save as otherwise provided herein, neither LICENSOR nor LICENSEE
shall be liable for any consequential, indirect, special or incidental damages
arising out of its performance under this Agreement.
INSURANCE
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9. (a) LICENSEE shall be responsible for insuring against theft, loss
and/or damage to all Video Cassettes.
(b) Should any Video Cassettes be stolen, damaged, lost or destroyed,
LICENSEE shall promptly supply LICENSOR with an affidavit setting forth the
facts in form satisfactory to LICENSOR.
EXHIBITION
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10. (a) The PICTURES shall be exhibited in original continuity of subject
in synchronization with recorded sound. No cuts or other changes, including
change of title, shall be made except as authorised pursuant to Clause 5(b).
(b) Without prejudice to sub-clause (a) above, the PICTURES are not
to be exhibited in conjunction with any advertisement other than those for hotel
services, without the prior written consent of LICENSOR. In no event shall the
continuity of any PICTURE be broken or
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affected in anyway by any advertisement, whether or not such advertising has
otherwise been approved by LICENSOR hereunder.
(c) LICENSEE shall pay or cause the Hotels to pay all royalties, fees
and taxes that may be required in connection with the diffusion and exhibition
in the Hotels of the PICTURES with recorded sound.
(d) LICENSOR shall have the right to review any room cards, display
material or other material promoting the PICTURES produced by LICENSOR and
utilised by LICENSEE.
(e) This subparagraph hereby authorises a preview of not more than
five (5) minutes as further described herein. LICENSOR hereby authorizes
LICENSEE to promote the PICTURES and LICENSEE or any of LICENSEE's Hotels may
exhibit the PICTURES on a Free to the Hotel "Preview" basis in order to induce
purchases of programming on a Guest Pay System basis by such Hotels, it being
understood that LICENSOR shall not be entitled to receive any compensation
therefor. No such Preview shall be more than five (5) minutes in duration.
NO AGENCY OR PARTNERSHIP
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11. LICENSEE is not an agent or representative of LICENSOR and the
Agreement does not constitute a partnership or a joint venture. LICENSOR shall
not be bound by any representation of LICENSEE nor shall LICENSOR be liable for
any act or omission of LICENSEE.
12. LICENSEE shall be entirely responsible for the payment of all the
costs and assumption of risks for the following:
(a) shipment of Video Cassettes to and within the Territory;
(b) adequate and safe storage of Video Cassettes within the
Territory;
(c) compliance with import procedures and fiscal controls imposed in
or with respect to the Territory;
(d) obtaining censorship clearance in the Territory and obtaining any
and all other clearances and permits that may be required in or with respect to
the Territory.
DEFAULT
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13. (a) The following shall be "Events of Default" under the Agreement:
(i) if LICENSEE applies for or commits an act of bankruptcy,
applies for a moratorium on payments, or in the case of a company, a resolution
is passed or an order is made for the winding-up of the company;
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(ii) if LICENSEE commits any material breach, which includes
but is not limited to a breach of Clause 5 or Clause 6; or
(iii) if LICENSEE breaches any other provision hereof, which
breach is not ended and remedied within ten (10) days after notice thereof by
LICENSOR.
(b) Upon the occurrence of any Event of Default, LICENSOR may, in
addition to any other rights it may have, at its option, declare the Agreement
terminated and the balance of the Royalty for PICTURES which have been supplied
and other previously accrued amounts payable to LICENSOR hereunder shall become
immediately due and payable. In the event of such termination, LICENSEE shall
immediately return all Video Cassettes to LICENSOR without LICENSOR becoming
accountable for payments previously received from LICENSEE. LICENSOR has the
right to inform the Hotels about such termination. LICENSOR shall not be liable
for any loss or damage suffered by LICENSEE as a consequence of such
termination.
(c) The foregoing rights and remedies are in addition to any other
rights and remedies which LICENSOR may have by law or otherwise.
FORCE MAJEURE
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14. Notwithstanding any other provision of the Agreement, if either party
is unable to perform its obligations hereunder or is limited, delayed or
prevented in whole or in part by any reason whatsoever not reasonably within the
control of such party, including without limitation, fire, storm and tempest,
war, invasion, act of foreign enemy, hostilities (whether war be declared or
not), civil war, civil strike, strikes or industrial disputes or by any law,
rule, regulation, order or other action by any public authority, or
transportation delays, such party shall be excused, released and discharged
without penalty from performance of the Agreement to the extent that such
performance is so limited, delayed or prevented, PROVIDED THAT no part of the
Royalty shall be refundable, nor shall any other sums become due from LICENSOR
to LICENSEE as a result of LICENSEE's inability, from any cause beyond the
reasonable control of LICENSOR, to exhibit the PICTURES in the Hotels or
otherwise to fully realise LICENSEE's expectations regarding exhibition in the
Territory.
ETHICS
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15. (a) LICENSEE agrees that no part of the consideration paid pursuant
to the Agreement shall be offered, paid or promised, directly or indirectly, to
any governmental official, any political party or official thereof, or any
candidate for political office, for the purpose of:
(i) influencing any act or decision of such person or party;
or
(ii) inducing such person or party to use his or its influence
to affect or influence any act or decision or any national, state or local
government or instrumentality thereof.
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For the purposes of this Clause, the term Governmental official" shall include
any officer or employee of a national, state or local government or any
department, agency or instrumentality thereof, or any person acting in an
official capacity for or on behalf or such government or department, agency or
instrumentality.
(b) LICENSEE shall comply with all applicable laws and regulations in
the Territory in performing its obligations hereunder and shall require its
employees, agents and any other persons with whom it contracts in furtherance of
its obligations hereunder to so comply, PROVIDED THAT non-compliance by
LICENSEE's agents and employees shall not relieve LICENSEE from its obligations
hereunder.
COMPLIANCE WITH MOTION PICTURE ASSOCIATION ("MPA")
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16. At the request of LICENSOR, LICENSEE shall comply with and shall adopt
and apply any regulations or resolutions relative to the Territory or any part
thereof that may be adopted by the MPA or any successor association representing
the interests of distributors of American motion pictures except if and to the
extent that such conduct would violate local law or prior contractual
obligations of LICENSEE.
GENERAL
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17. (a) All notices hereunder must be in writing sent by personal
delivery or registered mail or telefax (provided the recipient's answerback code
appears at the beginning and end of the sender's copy) unless otherwise
specified. Such notice will be deemed served at the time of delivery for
personal delivery; on the seventh (7th) day after the date such notice is posted
by registered mail; or at the time of dispatch of such telefax.
(b) Waiver of any breach shall not be construed as a waiver of any
other breach.
(c) The Agreement may not be assigned in whole or in part by LICENSEE
without LICENSOR's prior written consent (not to be unreasonably withheld).
LICENSOR may not assign the Agreement in whole or in part to any company
affiliated with LICENSOR or in connection with a corresponding transfer of its
business to a third party without LICENSEE's prior written consent (not to be
unreasonably withheld).
(d) LICENSEE may not sub-license any of the rights granted by the
agreement nor use agents except if and to the extent LICENSOR agrees thereto in
writing which approval LICENSOR may withhold for any or no reason.
(e) The Agreement is the entire Agreement of the parties. All prior
understandings, oral or written, (including but not limited to the prior
agreement between LICENSOR and LICENSEE, under LICENSEE's previous name of
Pacific Pay Video Limited, effective July 1, 1995) for the exhibitions hereunder
have been merged herein, or if not merged, are
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hereby cancelled. No representations have been made by LICENSOR except those
expressly set forth herein.
(f) Any amendment or discharge of the Agreement must be in writing
and signed by both parties.
(g) LICENSOR's rights and/or payment due hereunder shall not be
subject to any claim of LICENSEE under any other agreement between LICENSEE and
LICENSOR.
(h) Paragraph titles are for identification only and shall have no
effect in the application or construction of the provisions hereof
(i) Reference to clause numbers are to clauses in these General
Terms and Conditions unless otherwise specified.
(j) If any of the Clauses or sub-clauses of the Agreement become
invalid or be so judged, the remaining Clauses or sub-clauses shall be deemed
severable and shall remain in full force and effect.
CONFIDENTIALITY
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18. Neither LICENSOR nor LICENSEE shall disclose to any third party (other
than its respective employees, in their capacity as such) any information with
respect to the financial terms and provisions of this Agreement except: (i) to
the extent necessary to comply with law or the valid order of a court of
competent jurisdiction, in which event the party making such disclosure shall so
notify the other and shall seek confidential treatment of such information, (ii)
as part of the party's normal reporting or review procedure to its parent
companies, auditors and attorneys PROVIDED THAT such parent companies, auditors
and attorneys agree to be bound by the provisions of this Paragraph 18 or (iii)
in order to enforce the party's rights pursuant to this Agreement.
UNITED INTERNATIONAL PICTURES
By: \s\Brian F. Reilly
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Typed Name: Brian F. Reilly
Typed Title: Directors Representative
MAGINET CORPORATION
By: \s\ Paul D. Coss
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Typed Name: Paul D. Coss
Typed Title: Director of Program Acquisitions
and Development
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SCHEDULE B
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PICTURES
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SCHEDULE C
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(TO BE AGREED)
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