International Television Distribution Agreement

INTERNATIONAL TELEVISION DISTRIBUTION AGREEMENT

THIS AGREEMENT made as of this XXXXXXXXXX, BETWEEN: XXXXXXXXXX (hereinafter called the "Producer"); AND XXXXXXXXXX, at XXXXXXXXXX (herein called the "Distributor"). WHEREAS the Producer has the exclusive right to distribute and otherwise exploit the television Motion Picture entitled "XXXXXXXXXX" (hereinafter called the "Motion Picture"); AND WHEREAS the Producer wishes to appoint Distributor the sole and exclusive distributor of the Motion Picture in the Territory as herein defined; NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants contained in this agreement, the parties agree as follows:

1.00 GRANT OF RIGHTS

1.01 Producer grants to Distributor the sole and exclusive right to distribute, sub-distribute, license, reproduce for servicing all agreements entered into hereunder, and market (collectively "distribute") the Motion Picture in all languages and in the media, territories (the "Territories") and for the term (the "Term") described in Schedule "A" annexed hereto. The agreement shall thereafter renew itself automatically for further periods of one (1) year, which renewal periods shall be subject to the right of termination by either party by the giving of ninety (90) days' written notice prior to the expiry of the Term or any renewal period.

1.02 The rights granted to Distributor include the following rights:

(i) Distribution Rights: The right to distribute the Motion Picture in all of the granted media which shall include; the right to distribute the Motion Picture on all forms of television now known or hereafter devised including, without limitation, free, pay, closed circuit, Direct Broadcast Satellite, CATV, syndicated or otherwise; the right to distribute the Motion Picture in the home video market. Distributor shall have the right to arrange distribution of the Motion Picture in multimedia, CD-ROM, interactive media and distribution via the Internet, for a period of 18 months from the date of this Agreement, provided that any such distribution shall be subject to the prior written approval of the Producer. All other media, including but not limited to, theatrical, print and electronic publishing, radio, dramatic, non-theatrical, direct marketing, merchandising and music publishing rights to the soundtrack are reserved to Producer.

(ii) Versions: To make such dubbed, sub-titled and close captioned versions of the Motion Picture and any promotional materials for use in such parts of the Territory as Distributor may deem advisable.

(iii) Distributor is granted the right to make such changes, alterations, cuts, additions, interpolations, deletions and eliminations into and from the Motion Picture and any promotional materials as (a) may be required by any duly authorized censorship authority or industry organization; (b) as may be required for distribution of the Motion Picture for use in any form of

television or on airlines; and (c) to repackage the Motion Picture or parts thereof for distribution in the home video market. The credits, English-language title, and copyright notice shall not be changed or deleted unless approved by Producer and such approval shall not be unreasonably withheld. No other changes will be made without the prior approval of Producer.

(iv) Advertising and Publicity: To create and issue by way of broadcast or otherwise by any means or authorize others to do so, publicity in connection with the Motion Picture (including the names, photographs, likenesses, biographies, acts, poses, voices and other sound effects, as well as transcriptions, films and other reproductions thereof, of the director(s), musicians, writers, composers, author, all members of the cast and all other persons rendering services in connection with the Motion Picture), and to use clips and stills from the Motion Picture and in connection therewith, to use Distributor's name and trademark and/or the name and trademark of any of Distributor's licensees. Not later than delivery of the Motion Picture, Producer will advise Distributor in writing of any customary restriction on such rights contained in any agreement entered into with the above-noted personnel and Distributor agrees to abide by such customary restriction.

(v) Claims: The right in the name of Distributor or otherwise to institute and prosecute all actions or proceedings which Distributor may deem necessary for the purpose of establishing, maintaining or preserving any of the rights herein granted or purported to be granted to Distributor and

similarly to defend any action or proceeding which may be brought against Distributor or assigns with respect to the Motion Picture or any of the right herein granted or purported to be granted to Distributor or which in any manner questions or disputes any of the rights of Distributor in and to the said Motion Picture or any of the rights herein granted to it at Distributor's sole expense, provided however that all recoveries from such dispute constitute Gross Receipts and all expenses incurred in connection therewith shall constitute Direct Distribution Costs.

2.00 DISTRIBUTOR'S BUSINESS JUDGMENT

2.01 The Distributor agrees to use reasonable good faith efforts to distribute the Motion Picture in good faith in accordance with sound business policies.

2.02 The Producer hereby expressly understands, acknowledges and agrees that the Distributor has not made and does not make any representation or warranty with respect to the amount of the license fees or other amounts which will or may be earned from the exploitation of the Motion Picture.

3.00 DISTRIBUTION FEES, COSTS AND EXPENSES

3.01 As consideration for its services, Distributor shall retain as its sole and exclusive property the distribution fees equal to the percentage of Gross Receipts as set out in Schedule A" (the "Distribution Fees").

3.02 "Gross Receipts" shall be defined to mean all monies actually received by Distributor or its sub-distributors arising from the exploitation of the Motion Picture. Gross Receipts do not include taxes paid, collection costs incurred, and any payment for duplication or manufacturing of materials.

3.03 After the termination or expiry of this Agreement, Distributor shall nevertheless be entitled to receive Distribution Fees and recoupment of Direct Distribution Costs due to it in respect of all agreements ("Original Agreements") made by or on behalf of the Distributor between the dates of

the commencement and termination of rights granted to Distributor hereunder from exploitation of the Motion Picture in the Territory.

3.04 "Direct Distribution Costs" means all reasonable and verifiable costs incurred in connection with the promotion, distribution, exploitation, licensing or sale of the Motion Picture. Such expenses include, long distance phone charges, photocopying, fax, shipping and courier charges, clearance and brokerage fees, warehouse and handling charges, insurance, transcoding, pro-rata share of Market Expenses, bank transfer charges, promotional material duplication (i.e. slides and black & white prints), any direct publicity or Promotional Expenses (e.g. cost of creation of advertising materials, paid advertising), taxes and duties including withholding taxes (but excluding Distributor's income taxes), copyright registrations and searches (if required). Such expenses shall not exceed 10% of Gross Receipts and shall be net of any third party contributions, such as Telefilm IMAF Funds. Duplication of screening cassettes and program master tapes, PAL duplication, dubbing, and foreign language versioning expenses shall be excluded from the 10% expense cap. Market and Promotional Expenses are further limited as set forth in paragraph 3.05.

3.05. Limit on Recoupable Expenses. As used herein, the term expenses and/or recoupable expenses shall mean all of Distributor's Direct Distribution Costs actually spent on behalf of the Motion Picture limited as follows:

(i) Market Expenses: These expenses include all costs to attend film markets such as MIP, MIP-COM and NATPE. Such expenses may include airfare, hotel, shipping, and telephone expenses incurred to attend a film market. Such expenses shall be recoupable for the first year of distribution only, and only for those markets, which Distributor is actively participating (i.e., Distributor attends, has a booth, and attempts to sell the Motion Picture). Distributor may recoup a total of $1,500 per market attended with an overall cap of no more than $5,000 overall market cap for the year. Distributor agrees to attend no less than three (3) markets during the first year of distribution. Should the distribution term extend beyond one year, no market expenses shall be recoupable during the second and any subsequent years.

(ii) Promotional Expenses: These expenses include the cost of preparing posters, one-sheets, trailers and advertising. Distributor agrees to spend no less than $$$$$$$$$$$$$$ and no more than $$$$$$$$$$$$$$` on promotional expenses. These expenses are limited to direct out-of-pocket expenses actually spent on behalf of the Motion Picture. At Producer's request, Distributor shall provide receipts for each and every expense or forgo recoupment. Recoupable promotional expenses do not include any of Distributor's general office, overhead, legal or staff expenses or expenses for attendance at any market. Distributor agrees to spend the minimum necessary to adequately promote the Film, including preparation of a one-sheet, videocassettes and customary promotional material, if these items have not been supplied by Producer. Distributor will use its best efforts to promote the Motion Picture, and will promote the Motion Picture in a no less favorable manner than any of Distributor's other films.

4.00 APPLICATION OF GROSS RECEIPTS

4.01 Gross Receipts shall be allocated as follows:

(i) Firstly to payment of Distribution Fees;

(ii) Secondly to recoupment of Direct Distribution Costs, as limited by paragraphs 3.04 and 3.05.

(iii) The balance will be paid to Producer.

Any tax credits for withholding taxes shall be given to Producer.

5.00 REPORTS AND ACCOUNTING

5.01 Distributor shall deliver to Producer at Producer's address set forth above, a written statement relating to the Gross Receipts received and Direct Distribution Costs deducted during the period to which the statement pertains. Such statements shall be delivered quarterly. Producer's share of Gross Receipts shall be forwarded by cheque with such reports. Distributor shall report blocked funds in accordance with paragraph 5.04. At Producer's Request, Distributor shall promptly supply Producer with a copy of any license agreement under which any third party acquires any rights to the Motion Picture.

5.02 Any statement and report submitted to Producer by Distributor hereunder shall be binding upon Producer and not be subject to any objection for any reason if not disputed in writing within three years after such statement or report shall have been delivered to Producer.

5.03 Distributor shall keep and maintain at its offices in the City of XXXXXXXXXX, complete and accurate books of account and records relating to the distribution, exploitation and licensing of the Motion Picture. Said books of account and records shall be kept and maintained under a standard system customarily used in the television industry in accordance with generally accepted accounting principles. Throughout the Term and for a period of one year after the expiration or sooner termination of either thereof, but not more than once in each calendar year, Producer shall have access for the purposes of conducting an audit, upon giving 5 business days' notice to Distributor, and during customary business hours to all said books and records insofar as they relate to the previous two years of distribution, exhibition and exploitation of the Motion Picture. Producer and its agent shall have the right to make extracts or copies therefrom. Producer acknowledges that this agreement and the books of account and records of the

Distributor contain confidential trade information. Neither the Producer nor the Producers' representatives shall reveal or use on the Producer's behalf or on behalf of any other person any facts or information arising from this agreement or any inspection of the Distributor's book of accounts and records hereunder. In the event that an audit discloses that Producer has been underpaid five percent (5%) or more, Distributor shall reimburse Producer for all audit costs. Otherwise, all audit expenses shall be borne by the Producer.

5.04 Gross Revenues which are frozen, blocked or incapable of being remitted from a territory (the "BlockedTerritory") shall be placed in Distributor's bank account in the BlockedTerritory and the Distributor shall notify Producer to such effect. Upon written request by Producer, Producer's share of Gross Revenues shall, at Producer's cost, be transferred to Producer's bank account in the BlockedTerritory and in its currency. Such notice and transfer shall satisfy Distributor's obligation to pay and remit such Gross Revenue.

6.00 PRODUCER'S REPRESENTATIONS AND WARRANTIES

6.01 Producer represents and warrants, to the best of its knowledge and belief, and agrees as follows:

(a) Producer is duly organized under the laws of the State of ______, has the full, complete and unrestricted right and power to enter into this Agreement and grant, sell, assign, transfer and convey to the Distributor all rights and licenses herein contained for the Term and in the Territory and in any manner or form whatsoever herein granted; it has taken all necessary action to authorize the execution and delivery of this Agreement and the same does not and will not violate any other agreement to which Producer is a party.

(b) Producer owns or controls all the licenses, property and all other rights herein granted including, without limitation, all rights of copyright throughout the Territory, musical synchronization rights, still photo rights, videotape and film footage licenses and other appropriate rights and licenses for constituent elements of the Motion Picture together with the right to use the same in publicizing, advertising and exploiting the Motion Picture. Producer shall at Distributor's request deliver to Distributor copies of all such documents as are evidence of Producer's chain of title or evidence that such rights are in the public domain.

(c) Producer has not and will not sell, assign, convey or encumber any of the rights herein granted to Distributor and Producer will not do or commit any act or thing that is in derogation of the rights herein granted to Distributor and the rights granted hereunder are free of any claims, liens or encumbrances in favor of any person whatsoever. Producer has not entered into, and will not enter into, any agreement which is inconsistent with any of the provisions of this Agreement and will not exercise any right to take any action which conflicts with, prejudices or derogates from the rights herein granted to Producer. There are no claims, demands or actions instituted, pending or threatened against the Motion Picture (other than Producer's obligations to pay Guild and union residuals and contingent compensation, which obligations will be satisfied by Producer) which if adversely determined, would impair or prevent the exercise by Distributor of its rights hereunder.

(d) Neither the Motion Picture nor any part thereof (including the music, sound and dialogue synchronized therewith), nor the exercise by any authorized party of any rights granted to the Distributor hereunder, will violate or infringe upon the trademark, tradename, copyright, patent, literary, artistic, personal, private, civil or property right or the right to privacy or any other right of any person, firm or corporation. The Motion Picture and the publicity materials delivered by Producer will not contain any material which is libelous, slanderous or defamatory.

(e) Producer has or will obtain a waiver of moral rights from all writers, composers and other persons having moral rights with respect to the Motion Picture.

(f) Producer has obtained, or will obtain on a timely basis and by no later than delivery of the Motion Picture:

(i) licenses or grants of authority to use the results of the services of performers, musicians and other persons connected with the production of the Motion Picture which are sufficient to permit Distributor to exercise all the rights granted under this Agreement; and

(ii) the consent of persons to use their names, voices, likenesses and biographies for the purposes of advertising and exploiting the Motion Picture.

(g) The Producer has obtained the synchronization and performing rights in the music contained in the Motion Picture and the Producer warrants that in respect of the uses granted hereunder that said rights are either:

(i) controlled by a performing rights society having jurisdiction in the Territory; or

(ii) in the public domain; or

(iii) owned or controlled by Producer.

(h) The Producer has not and will not itself nor has it nor will it authorize any other party during the Term to produce, distribute or exhibit any television or home video production based in whole or in part upon underlying literary material or real life incidents or material and will not itself nor will it authorize any other party to exercise any right to take action which would tend to derogate from or compete with the rights herein granted or agreed to be granted to Distributor.

(i) Distributor, in the exercise of its rights hereunder will not be requested to make any payment to any third party involved in the production of the Motion Picture or who rendered services in connection therewith, or any music performance fees, or to or on account of any union, guild or otherm collective bargaining agent because of any exploitation by Distributor, and any such payments shall be borne solely by Producer, and Distributor shall have no responsibility whatsoever with respect thereto.