NON-THEATRICAL LICENSE AGREEMENT
This Non-Theatrical License Agreement (“Agreement”) dated January 1, 2013 (“Effective Date”), is made by and between Columbia Pictures Corporation Limited (“Licensor”), and Filmbank Distributors Limited (“Licensee”). For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
PRINCIPAL TERMS AND CONDITIONS OF TITLE-BY-TITLE LICENSE
(“Title-by-Title Principal Terms”)
1. CERTAIN DEFINITIONS. For purposes of this Title-by-Title License, the following
definitions shall apply:
1.1 “Approved DC Delivery” shall mean the secured Encrypted delivery via Streaming of audio-visual content to an Approved DC Device via the global, public network of interconnected networks (including the so-called Internet, Internet2 and World Wide Web), each using technology which is currently known as Internet Protocol (“IP”), free to the consumer (other than a common carrier/ISP access charge), whether transmitted over cable, DTH, FTTH, ADSL/DSL, broadband over power lines (BPL) or other means (the “Internet”). For the avoidance of doubt, “Approved DC Delivery” shall not include delivery over any so-called “walled garden” or closed ADSL/DSL, cable or FTTH service, other subscriber-based system or service, Bluetooth kiosks, side-loading or any other delivery means not set forth herein, unless such delivery mechanisms are approved in writing by Licensor.
1.2 “Approved DC Device” means a Personal Computer.
1.3 “Authorized DC Viewer” means an authenticated student of an Authorized Educational Institution in the Territory, who has been authenticated by the DC FOD Service to be enrolled, at the time of reception of a FOD Program, in the specific class for which the relevant FOD Program is being made available on the DC FOD Service.
1.4 Authorized Educational Institution” means a college, university or other similar educational institution which, pursuant to an agreement with Licensee (solely as allowable pursuant to this Agreement), has been granted the right to make available to enrolled students the DC FOD Service for the viewing of FOD Programs for educational purposes in connection with educational courses being offered by such educational institution.
1.5 “DC FOD Service” means the private Non-Theatrical FVOD programming service (which is not primarily supported by advertisement revenues and sponsorships) that is, and at all times during the Term shall be, (a) wholly-owned and controlled by Licensee (Licensor acknowledges that certain technical aspects of the service may be operated through a third-party back-end service provider as set forth below in this section), (b) currently branded as the “Digital Campus” programming service (with such branding subject to change by Licensee at Licensee’s discretion subject to prior written notice to Licensor), and (c) accessible through the websites of Authorized Educational Institutions as authorized by Licensee in accordance with this Agreement. Licensor acknowledges that Licensee shall be engaging Non Theatrical Digital Partners Limited. (“NTD”), an affiliate of Licensee, or another third party systems provider for its technical delivery systems to deliver the DC FOD Service (if Licensee engages a party other than NTD such engagement shall be subject to Licensor’s prior written approval), however, Licensee shall not be relieved of any of its obligations under this Agreement as a result of its utilization of a third party’s systems and Licensee shall be responsible for ensuring that any relevant third party provider complies with the terms of this Agreement including, without limitation, the Content Protection Requirements and Obligations. Additionally, any act or omission by a third party service provider that would be a breach of this Agreement if done or failed to be done by Licensee shall be deemed to be a breach of this Agreement by Licensee, and Licensee shall indemnify Licensor for any claims arising from any such breach or any actions of any such third party service provider.
1.6 “FDLR Scheme”: means Licensee’s learning resource licensing program under which Licensee shall distribute certain Title-by-Title Programs (identified by Licensee and approved by Licensor) for Non-Theatrical Exhibition for educational purposes, pursuant to the terms of this Agreement.
1.7 “Home Video Street Date” or “HVSD” means for a program, the date on which such program is first made generally available for rent in the relevant country of the Territory on a non-exclusive basis to the general public in the DVD format.
1.8 “Title-by-Title Authorized Exhibitor” means each person or entity that is authorized by Licensee in writing to exhibit a Title-by-Title Program on a Title-by-Title Non-Theatrical Exhibition basis.
1.9 “Title-by-Title Program” means each feature-length film and/or television episode that Licensor, in its sole discretion, approves, authorizes, and makes available to Licensee for Title-by-Title Non-Theatrical Exhibition during the Term.
1.10 “Title-by-Title Gross Receipts” means all monies received by Licensee, as film rentals, license fees, or any other revenues in all cases net of value added tax (“VAT”) derived in the Territory from the use or exhibition of each Title-by-Title Program without offset or deduction of any kind (except for VAT).
1.11 “Title-by-Title License Fee” means the fee payable by Licensee to Licensor pursuant to Section 3 of the Title-by-Title Principal Terms.
1.12 “Title-by-Title Non-Theatrical Exhibition” means the exhibition of Authorized Media of Title-by-Title Programs for the number of exhibitions, period of time and/or time of day as specified by Licensee.
2. GRANT OF LICENSE.
2.1 Subject to the terms and conditions set forth in this Agreement, Licensor grants to Licensee, and Licensee accepts from Licensor, a non-exclusive license to exhibit, and to license Title-by-Title Authorized Exhibitors to exhibit, each Title-by-Title Program during such Title-by-Title Program’s License Period solely by means of Authorized Delivery throughout the Territory in the Licensed Language by means of Title-by-Title Non-Theatrical Exhibition of Physical Media and Digital Media on a Linear and/or On-Demand basis in the Public Areas of all Non-Theatrical Venues and in the Temporary Dwelling Units of all Non-Theatrical Venues other than those listed at Section 1.15(i)(g) of the Standard Terms and Conditions (“STAC”) before the respective patrons of such Non-Theatrical Venues while, for the avoidance of doubt, such patrons are located within such Non-Theatrical Venues, except as specifically provided for pursuant to this Section 2. With respect to any Title-by-Title Program that is exhibited pursuant to the terms of this Section prior to its HVSD, any such exhibition shall be subject at all times to the content protection requirements and obligations set forth on Schedule B attached hereto. For the avoidance of doubt, Licensee may bring to Licensor different content delivery systems to be used for the exploitation of Programs for approval hereunder. For the avoidance of doubt, the rights granted hereunder specifically exclude the right to exhibit any Title-by-Title Program in any Temporary Dwelling Unit of Non-Theatrical Venues listed at Section 1.15(i)(g) of the Standard Terms and Conditions attached hereto as Schedule A.
2.2 Licensee may exhibit, and authorize Authorized Educational Institutions (which shall be deemed Title-by-Title Authorized Exhibitors) to exhibit, each Title-by-Title Program that has been pre-approved in writing by Licensor (“FOD Programs”) during its License Period in the Licensed Language, on a Non-Theatrical FVOD basis on the DC FOD Service solely to Authorized Viewers (whether or not such Authorized Viewers are located within such Authorized Educational Institution at the time of exhibition) in the Territory, delivered by Approved DC Delivery in Standard Definition for reception on Approved DC Devices and using VCR Functionality, subject at all times to the content protection requirements and obligations set forth on Schedule B attached hereto.
2.3 Licensor may withdraw any FOD Program from exploitation on a Non-Theatrical FVOD basis and via the DC FOD Service at any time upon written notice, and Licensee shall remove any withdrawn programs from the DC FOD Service within 2 business days of Licensor’s notice. Withdrawal of an FOD Program under this section shall in no event be deemed to be, or in any way constitute, a breach of the Agreement, and Licensee shall not be entitled to any rights or remedies as a result of such withdrawal including, without limitation, any right to recover for lost profits or interruption of its business. All revenues generated by Licensee from exploiting a FOD Program on a Non-Theatrical FVOD basis shall be included in Title-by-Title Gross Receipts for such FOD Program and subject to the calculation of Licensor’s Title-by-Title License Fee for any such FOD Program pursuant to Section 3 of these Title-by-Title Principal Terms.
3. TITLE-BY-TITLE LICENSE FEE. In consideration of the license herein granted, Licensee shall pay to Licensor a license fee (“Title-by-Title License Fee”) with respect to each Title-by-Title Program licensed hereunder as set forth below:
3.1 Except as set out in Section 3.2 below, the Title-by-Title License Fee for each Title-by-Title Program shall be 65% of One Hundred Percent (100%) of the Title-by-Title Gross Receipts with respect to such Title-by-Title Program. The Title-by-Title License Fee specified herein is exclusive of and shall be unreduced by any tax, levy or charge, the payment of which shall be the responsibility of Licensee. The Title-by-Title License Fee shall be payable in British pounds. For the avoidance of doubt Licensee shall be entitled to retain 35% of One Hundred Percent (100%) of the Title-by-Title Gross Receipts with respect to each Title-by-Title Program under this Section 3.1.
3.2 The Title-by-Title License Fee for each Title-by-Title Program exploited and distributed by Licensee as part of the FDLR Scheme shall be 50% of One Hundred Percent (100%) of the Title-by-Title Gross Receipts with respect to such Title-by-Title Program. The Title-by-Title License Fee specified herein is exclusive of and shall be unreduced by any tax, levy or charge, the payment of which shall be the responsibility of Licensee. The Title-by-Title License Fee shall be payable in British pounds. For the avoidance of doubt Licensee shall be entitled to retain 50% of One Hundred Percent (100%) of the Title-by-Title Gross Receipts with respect to each Title-by-Title Program under this Section 3.2
4. STATEMENTS; PAYMENTS; AUDITING RIGHTS. Licensee shall provide monthly statements (“Title-by-Title Statements”) to Licensor for each month during the Term showing, in detail reasonably satisfactory to Licensor for each Title-by-Title Program under license during such month, the appropriate calculations with respect to any License Fees payable to Licensor hereunder with respect to such Title-by-Title Program during such month, within thirty (30) days after the close of such month. Upon acceptance of each such Title-by-Title Statement, Licensor will invoice Licensee for the amount due to Licensor and Licensee shall pay such invoice within thirty-five (35) days of the date of receipt of such invoice. Acceptance by Licensor of any such Title-by-Title Statement and accompanying payment shall not preclude Licensor from thereafter questioning the accuracy thereof and exercising its audit rights with respect thereto.
5. APPROVED SUB-DISTRIBUTORS. For the purposes of this Agreement, Licensor expressly agrees and acknowledges that Licensee’s existing appointments of the following sub-distributors of Title-by-Title Programs in the following countries, as of the date of this Agreement (and any existing percentage distribution fees currently retained by such sub-distributors pursuant to such appointments) are hereby approved:
(i) M&M Viihdepalvelu Oy Finland
(ii) PM Movie S.R.L Italy
(iii) ProVideo Romania and Hungary
(iv) Seachoice Ltd United Kingdom, and Denmark, Norway, Sweden, Finland, Iceland and the Faroe Islands (“Scandinavia”)
(v) Walport International Limited United Kingdom, Scandinavia, Germany, Greece and Cyprus
(vi) Shooting Stars (LLC) United Arab Emirates
(vii) GFD Communications Ltd Republic of Ireland
(viii) VDA UK Ltd United Kingdom
6. REMAINING TERMS. The remaining terms and conditions of this Title-by-Title License are set forth in Schedule A attached hereto. In the event of a conflict between any of the Title-by-Title Principal Terms and Schedule A, the Title-by-Title Principal Terms shall control over Schedule A.
2
PRINCIPAL TERMS AND CONDITIONS OF BLANKET LICENSE
(“Blanket Principal Terms”)
1. CERTAIN DEFINITIONS. For purposes of this Blanket License, the following definitions shall apply:
1.1 “Blanket Authorized Exhibitor” means a Non-Theatrical Venue that is authorized by Licensee in writing to exhibit Blanket Programs on a Blanket Non-Theatrical Exhibition basis.
1.2 “Blanket Gross Receipts” means all monies received by Licensee by Blanket Authorized Exhibitors in respect of such Blanket Authorized Exhibitors’ participation in Licensee’s blanket license program in the Territory, net of VAT, without any other offset or deduction of any kind.
1.3 “Blanket License Fee” means the fee payable by Licensee to Licensor pursuant to Section 3 of the Blanket Principal Terms.
1.4 “Blanket Program” means each feature-length film and/or television episode available in either Physical Media and/or Digital Media during the Term under license from Licensor or an affiliate of Licensor in the Territory.
1.5 “Blanket Non-Theatrical Exhibition” means the exhibition of Authorized Media of Blanket Programs without restriction as to the number of exhibitions, or the date or time of such exhibitions, but subject at all times to, for the avoidance of doubt, the applicable License Period.
2. GRANT OF LICENSE. Subject to the terms and conditions set forth in this Agreement, Licensor grants to Licensee, and Licensee accepts from Licensor, an exclusive license to grant Blanket Authorized Exhibitors the right to exhibit each Blanket Program during such Blanket Program’s License Period solely by means of Authorized Delivery throughout the Territory in the Licensed Language by means of Blanket Non-Theatrical Exhibition of Physical Media and Digital Media on a Linear and/or On-Demand basis in the Public Areas of all Blanket Non-Theatrical Venues before the respective patrons of such Non-Theatrical Venues while, for the avoidance of doubt, such patrons are located within such Non-Theatrical Venues. Notwithstanding the foregoing, Licensee may exhibit and authorize Blanket Authorized Exhibitors of Non-Theatrical Venues listed at Section 1.15(ii)(f) of the STAC to exhibit, each Blanket Program in DVD or Blu-Ray format in the Temporary Dwelling Units of those Non-Theatrical Venues listed at such Section 1.15(ii)(f). Licensor shall notify Licensee within a reasonable time of any feature-length films and/or television episodes for which Licensor owns or controls the non theatrical blanket licensing exhibition rights in the Territory but which the Licensee may not include in Licensee’s blanket licensing program.
3. BLANKET LICENSE FEE. In consideration of the rights granted hereunder, Licensee shall pay to Licensor a license fee determined in accordance with this Section 3 (the “Blanket License Fee”) which shall be the sum of all license fees owed in the Territory in consideration of the blanket licenses granted to Licensee hereunder, whether calculated pursuant to the UK Blanket License Fee calculation or the Non-UK Blanket License Fee calculation. For each Blanket License Term Year, the Blanket License Fee shall be determined as set forth within this Section 3.