7 Collection Agreements

 

If you can count your money, you don't have a billion dollars.

J. Paul Getty

 

 

Collection Agreements

In the world of multiparty film financing, investors, or those entitled to a share of revenues arising from the exploitation of a film, always have an interest in getting their money back or seeing a net profit.

Collection Account Management Agreements have become an important aspect of a film financing transaction. Before the widespread use of collection accounts and the engagement of collection management companies, revenues from the sale of a film to international distributors were usually administered by the sales agents. Those entitled to receive revenues from sales would sometimes find it difficult to get statements or payments to which they were entitled from the sales agent. Many sales agents would mix funds with the sales from other films and, in some cases, charge exorbitant costs on top of their already expensive sales commissions. When challenged by an investor or the producer, certain sales agents would make it very difficult to provide proper reports. In many cases, a sales agent would go bankrupt and therefore any funds that the investor or producer were entitled to would be virtually impossible to collect.

Now that film financing transactions have in some circumstances become so complex, those with a financial interest in the production will make it a condition of their financing that a collection account manager is appointed to the film in order to receive, administer and disburse any revenues that are collected.

The involvement of a collection management company forces all parties in a film financing transaction to focus on specific details about the allocation of potential revenues for the film at an earlystage. It also ensures that the recoupment schedule for a film is completed prior to the closing of all financial contributions to the film. The collection account manager acts as an independent third party looking after the interests of all investors and financiers. The collection account manager will charge a fee for providing their services that will be collected first, before it disburses any funds to investors. In some cases, a collection account manager will charge a minimum fee up front and then take a smaller fee based on a percentage later on. A standard collection account manager's fee would be 1 per cent of the revenues collected. However, in some cases this may be higher or lower depending on the specific deal and amount of work involved.

Those with a financial interest in a film include: co-producers, financiers, investors, film funds, sales agents, completion guarantors and talent.

The collection account manager will open a collection account at a designated bank in a designated country. In some circumstances, the location of the bank account can have certain tax implications. For example, a sale to some territories will result in withholding tax. Withholding tax is a type of tax whereby a distributor purchasing the rights to a film will have to hold back a certain percentage of that sale in their home territory. Therefore, structuring the sales through the collection account manager in a certain jurisdiction will result in greater net income from the sale to that territory that would otherwise be subject to withholding tax.

The sales agent will be a party to the Collection Account Management Agreement, which requires the sales agent to instruct local distributors who purchase the film for their home territory to pay all minimum guarantees into the collection account.

The collection account manager will be the sole signatory to the collection account and will receive, administer, allocate and disburse all revenues in accordance with the recoupment schedule, which is usually annexed to the Collection Account Management Agreement. The collection account manager will provide all parties to the agreement with reports that reflect all sales made in relation to the film. The report will also show actual payments received in the collection account and who has been allocated any sums under the recoupment schedule.

By utilizing an independent third party, all financial parties involved in a film financing can closely monitor the revenue streams and allocation of funds.

The following is a Collection Account Management Agreement used by a well-known collection management company, Freeway Entertainment Group BV. Their details are as follows:

Freeway Entertainment Group BV
Andrassy ut 12
1061 Budapest
Hungary
Tel: +36 14734300
Fax: +36 14734301
E-mail:  www­.wg­awr­egi­str­y.o­rgg­adi­.wi­lds­tro­m@f­ree­way­-en­ter­tai­nme­nt.­com­
cec­ile­.hu­ber­ts@­fre­ewa­y-e­nte­rta­inm­ent­.co­m
mar­tij­n.m­eer­sta­dt@­fre­ewa­y-e­nte­rta­inm­ent­.co­m

Sample Agreement

DATED AS OF THE [   ] DAY OF [   ], 2004

 

FREEWAY CAM BV
-and-
STICHTING FREEWAY CUSTODY

-and-
THOSE PERSONS, FIRMS OR OTHER ENTITIES SPECIFIED IN SCHEDULE 1

 

COLLECTION ACCOUNT MANAGEMENT AGREEMENT

Collection Account Management Agreement

 

RE: [‘FILM TITLE’]

 

AGREEMENTdated as of the [   ] day of [   ], 2004

 

BETWEEN:

 

1. FREEWAY CAM B.V.(a company registered under the laws of The Netherlands) c/o Andrássy út 12, 1061 Budapest, Hungary (‘FCAM’);

2. STICHTING FREEWAY CUSTODY(a foundation registered under the laws of The Netherlands) c/o Andrássy út 12, 1061 Budapest, Hungary (‘FCustody’); and

3. THOSE PERSONS, FIRMS OR OTHER ENTITIES SPECIFIED IN SCHEDULE 1 HERETO(together ‘Parties’ and individually ‘Party’ which expressions shall include each of the Parties successors in title and assigns).

 

IT IS HEREBY AGREEDthat the Parties jointly appoint FCustody to open the Collection Account and that FCustody accepts such appointment.

 

Furthermore, it is hereby agreed that the Parties jointly appoint FCAM to administer the collection and distribution of Collected Gross Receipts on behalf of the Parties in accordance with the provisions of the Schedules hereto and FCAM's Standard Terms of Agreement and that, in consideration of FCAM's Remuneration, FCAM accepts such appointment.

Schedule 1: Names and Addresses of the Parties

[To include the ‘Completion Guarantor’, ‘Producer’ and ‘Distributor’]

Schedule 2: Definitions

In this Agreement the following words and expressions shall have the meanings hereby ascribed to them which meanings shall apply to this Agreement and the Schedules hereto:

‘Accounting Currency’ ‘Beneficiary (ies)’
 [please advise];
those persons, firms or entities specified in Schedule 4;
‘Business Day’ any day excluding baturdays, Sundays and any days which are public holidays in the country in which any of the Parties has its principal place of business;
‘Collection Account’ a designated bank account held in the name of FCustody and referring to the name of the film into which all Gross Receipts are paid, established with; Account Name: '[title film]' Account No: [123456789] SWIFT address: [   ];
‘Collected Gross Receipts' all Gross Receipts actually received in the Collection Account and interest thereon;
‘Completion Guarantee’ the agreement dated [   ] and made between the Completion Guarantor and [   ] relating to the Film;
‘Completion Guarantor’
‘Delivery Date’		 [   ];
the date upon which the Film is delivered in accordance with the provisions of the Completion Guarantee;
‘Distribution Agreement’ the agreement dated [   ] and made between the Producer and the Distributor relating to the exploitation of the Film and any additional or replacement agreement;
‘Distributor’ [   ] and any additional or replacement agent duly appointed by the Producer;
‘Entitlement(s)’ that part of the Collected Gross Receipts payable to a Beneficiary pursuant to the terms of this Agreement;
‘FCAM Expenses' all expenses incurred by FCAM as provided for in this Agreement;
‘FCAM's Remuneration’ the sum of ( ) to be paid from the first Collected Gross Receipts together with [   ] % of all Gross Receipts;
‘Film’ the [feature film/ television programme] a brief specification of which is set out in Schedule 3;
‘Gross Receipts' all monies or any other proceeds derived from Sub-Distribution Agreements or from any other source of exploitation relating to the Film or the Rights received by any Party directly or indirectly;
‘Net Profit Participants' the persons, firms or entities specified in Schedule 6;
‘Net Profits' as specified in Schedule 5;
‘'Person’ means any of the Parties or the Beneficiaries or any other individual, corporate entity or partnership;
‘Producer’ [   ];
‘'Residuals'’ any sums of money payable to any person, firm or entity providing services, facilities and/or rights for the purposes of the production of the Film (other than monies included in the budgeted cost of the Film or which are payable by any of the Parties) which become payable pursuant to any union or guild agreement relating to the production of the Film by reference to the manner or place or means by which the Film is exploited and which have been notified to FCAM in writing;
‘Rights’ all copyright and similar rights in and to the Film and all ancillary or associated rights thereto or in the underlying rights thereof the proceeds from the exploitation of which are intended by the Parties to be collected and distributed pursuant to the terms hereof;
‘Statement’ a statement by FCAM specifying the sources from which Collected Gross Receipts have been derived and their allocation;
‘Sub-Distribution Agreement(s)’ all agreements with bub-Distributors for the exploitation of the Film and the Rights throughout the Territory;
‘Sub-Distributors' those persons, firms or other entities who enter into Sub-Distribution Agreements;
‘Territory’ [the world].

1.1 Where the context so admits, words importing the singular shall include the plural and vice versa and words importing the neuter gender shall include the masculine or feminine gender and words importing persons shall include firms and corporations.

1.2 References to paragraphs and Schedules shall, save where otherwise expressly stated, be construed as references to the paragraphs of and Schedules to this Agreement.

1.3 Any reference in this Agreement to an Act of Parliament shall include every statutory amendment and re-enactment thereof and every regulation and order made thereunder or under any Act replacing the same.

Schedule 3: Film Specification

Film Title:[   ]

Writer: [   ]

Director: [   ]

Individual Producer: [   ]

Principal Artists: [   ]

Delivery Date: [   ]

Budget Cost: [   ]

Schedule 4: Beneficiaries

[Including the Parties]

Schedule 5: Distribution of Collected Gross Receipts

  1. To FCAM in payment of FCAM's Remuneration and the FCAM Expenses; and thereafter
  2. any Residuals as notified to FCAM; and thereafter
  3. the Completion Guarantor in respect of monies paid out (if any) pursuant to the terms of the Completion Guarantee; and thereafter
  4. the Distributor in respect of such fees, commissions and expenses as shall have been notified to FCAM pursuant to Clause 5.5 of FCAM's Standard Terms of Agreement; and thereafter
  5. pari passu the deferees as follows:
  1. [Name] as to USD [   ]
  2. [Name] as to USD [   ]
  3. [Name] as to USD [   ]; and thereafter
  4. the balance remaining after the payment of all the sums referred to above shall form the ‘Net Profits' of the Film and shall be paid to the Net Profit Participants as set out in Schedule 6.

(NB any other beneficiaries due to be paid from the Collected Gross Receipts and who are not Net Profit Participants to be inserted in this Schedule at the appropriate position)

Schedule 6: Net Profit Participants

  1. [Name] as to [   ]%
  2. [Name] as to [   ]%
  3. [Name] as to [   ]%

to be paid pro-rata in accordance with their percentage entitlement.

FCAM'S Standard Terms of Agreement

  1. Gross Receipts

    1.1 Any Party owning or controlling any Rights hereby undertakes with FCAM and the other Parties hereto to issue irrevocable instructions to Sub-Distributors in a form approved in writing by FCAM to pay all Gross Receipts directly into the Collection Account.

    1.2 The Producer hereby undertakes to procure that the Distributor or, if no Distributor is appointed, the Producer itself will promptly notify FCAM of delivery of the Film to the respective Sub-Distributor(s) and, to the extent known, the respective release dates of the Film.

    1.3 If any Party shall receive Gross Receipts itself, that Party will promptly inform FCAM of such receipt and transfer such Gross Receipts into the Collection Account without deduction (other than bank charges).

  2. FCustody's and FCAM's Obligations

    FCustody shall:

    2.1 hold all Collected Gross Receipts upon trust for the benefit of the Beneficiaries to the extent of the Beneficiaries' respective interests as specified in this Agreement;

    FCAM shall:

    2.2 pay into the Collection Account any Gross Receipts directly received by FCAM from Sub-Distributors, Distributor or any other person;

    2.3 provided FCAM shall have been given a copy of the relevant completed Sub-Distribution Agreement(s), monitor the dates upon which payments of Gross Receipts fall due to be paid to the Collection Account;

    2.4 use reasonable endeavours to ensure the Collected Gross Receipts earn interest at the most favourable rate available at the CA Bank for similar accounts and amounts;

    2.5 use reasonable endeavours to advise upon request of any of the Parties who are parties to a Sub-Distribution Agreement if payments of Gross Receipts due under the said Sub-Distribution Agreement have not been received;

    2.6 convert Collected Gross Receipts received in a currency other than the Accounting Currency into the Accounting Currency at the exchange rate prevailing on the day of such conversion;

    2.7 calculate the amount of Collected Gross Receipts payable to each Net Profit Participant and pay and distribute Collected Gross Receipts to all Beneficiaries in the manner, amounts and order set out in Schedules 5 and 6;

    2.8 on written request provide any Party with copies of statements and/or accounts received by FCAM from the Distributor or Sub-Distributors.

  3. Distribution of Gross Receipts

    3.1 FCAM shall commence distribution of Collected Gross Receipts from the Collection Account from the later of the Delivery Date or the last date of the month during which Gross Receipts are first credited to the Collection Account and then monthly thereafter for the first year, quarterly for the following two years and annually thereafter.

    3.2 FCAM shall not be obliged to remit Entitlements to any Beneficiary unless such Beneficiary is entitled to be paid not less than USD 500.00.

    3.3 FCAM shall not be obliged to pay on behalf of the Producer or any other Party any withholding tax, income tax, corporation tax, value added tax or other sales tax or any similar payments when distributing Collected Gross Receipts unless agreed in writing between the relevant parties or unless FCAM is required so to do by law.

    3.4 Residuals shall only be payable by FCAM upon written notification being received by FCAM from the Producer and/or the Distributor.

    3.5 FCAM shall not be obliged to make any payment out of Collected Gross Receipts if the making of such payment would constitute a breach of any court order or would otherwise be unlawful.

  4. Accounting

    4.1 For the first twelve (12) months after the Delivery Date or the last date of the month during which Gross Receipts are first credited to the Collection Account, in respect of each calendar month during which Gross Receipts are credited to the Collection Account, FCAM shall provide the Partieswith a Statement within twenty (20) Business Days of the end of each calendar month to which it relates.

    4.2 From the thirteenth (13th) month after the Delivery Date or the last date of the month during which Gross Receipts are first credited to the Collection Account until thirty six (36) months thereafter, FCAM shall provide the Parties with a Statement on a quarterly basis, within twenty (20) Business Days of the end of each quarter to which it relates.

    4.3 Thereafter, until termination of this Agreement, FCAM shall provide the Parties with Statements on an annual basis.

    4.4 Unless specifically requested by the Parties in writing, no Statements shall be provided to Parties that have received their Entitlement in full. Any such Parties shall have no further rights pursuant to this Agreement after such receipt.

    4.5 FCAM will pay the Entitlements simultaneously with or within five (5) Business Days from the issue of a Statement.

    4.6 FCAM shall at all times keep at its principal place of business complete and accurate books of account and records relating to all monies received in and paid from the Collection Account.

    4.7 Any Party hereto shall have the right on giving prior reasonable notice no more than once in any twelve (12) month period to audit the books and accounts of FCAM in relation to the Film at its office and such audit shall be at the expense of the requesting party unless such audit reveals an error of the greater of five per cent (5%) or USD 5,000.00 against the interests of the requesting party, in which case FCAM shall pay the reasonable costs of such audit which costs shall not form part of the FCAM Expenses for the purposes of this Agreement;

    4.8 Provided FCAM distributes Collected Gross Receipts in accordance with the terms of this Agreement, no liability shall attach to FCAM on account of its application of any sums received by FCAM under this Agreement or for any other obligations on the part of FCAM under this Agreement save as provided for by Clause 4.7 above or in the event of gross negligence or wilful misconduct on the part of FCAM. FCAM will make good any underpayments on its part provided that a claim has been lodged in writing with FCAM within 20 Business Days after the date of payment to which such claim relates.

  5. Obligations of the Parties

    Each of the Parties agrees with FCAM, FCustody and with the other Parties:

    5.1 that they will not during the term of this Agreement authorize or permit any third party to collect or administer Gross Receipts nor will any Party interfere with, frustrate or take any action contrary to the terms of this Agreement;

    5.2 to provide FCAM promptly with copies of all Sub-Distribution Agreements, other relevant agreements, irrevocable instructions or other information FCAM may reasonably request in order to perform its obligations under this Agreement;

    5.3 that if any Party receives a sum in excess of their Entitlement or if withholding tax on Gross Receipts has to be refunded, the relevant Party shall immediately repay such amount into the Collection Account. If any such sum is not repaid by the relevant Party within 5 Business Days of written notification by FCAM, FCAM shall not be obliged to make any further payments to such Party until the amount due has been either deducted from the next Entitlement (if any) of the Party concerned or repaid in full plus interest (calculated from the date of receipt of such excess or request to refund withholding tax) at the rate of LIBOR plus 1% p.a.;

    5.4 that FCAM shall not be required to incur any expense under this Agreement on its account nor to make any payment to any Beneficiary save from Collected Gross Receipts;

    5.5 to provide FCAM prior to the Delivery Date with the following information and such further information as FCAM may require in order to discharge its obligations under this Agreement:

    5.5.1   names and address of all Beneficiaries;

    5.5.2   fees, commissions and incurred expenses of the Distributor;

    5.5.3   procedure for approval of Distributor's expenses and of expenses payable to any other person; and

    5.5.4   names and addresses of persons entitled to Residuals with details of the amounts to be paid.

    5.6 that the Parties shall jointly and severally indemnify FCAM and agree to hold FCAM safe, harmless, defended and indemnified against any liabilities, losses, damages, costs or expenses (including legal fees and costs and arbitrationfees and costs) by reason of any claim, action or proceeding arising out of or in connection with FCAM's acceptance of or performance under this Agreement (including third party claims and the costs of any legal advice taken by FCAM pursuant to Clause 7);

    5.7 that they shall not put or attempt to put any lien, charge or any similar legal instrument over the Collection Account or the Collected Gross Receipts or any other monies standing to the credit of the Collection Account.

  6. General

    6.1 In the performance of its duties and exercise of its powers under this Agreement, FCAM will be entitled to rely upon any document reasonably believed by FCAM to be genuine and to have been sent or signed by the person by whom it purports to have been sent or signed and the opinion and statements of any professional advisor selected by FCAM in connection herewith and shall not be liable to any Party for any consequence of any such assumption, action or reliance.

    6.2 FCAM and FCustody shall have no duties or obligations pursuant to this Agreement save as expressly set forth herein.

    6.3 If FCAM is unable for reasons outside its control to carry out any of the provisions hereof, FCAM shall incur no liability as a consequence thereof for so long as the relevant situation continues and during such period FCAM shall have no responsibility for its inability to carry out or perform the relevant provisions hereof.

    6.4 If FCAM is unable at any time to make payments out of Collected Gross Receipts by reason of the failure of the Parties to provide any information required by FCAM, FCAM shall not be obliged to make any further payments to any Beneficiary until such time as any Party hereto shall have provided sufficient information to FCAM in order to make such payments.

    6.5 FCAM shall have no obligation to protect the copyright or any similar rights in or to the Film in any part of the world whether by registration or otherwise.

    6.6 Notwithstanding anything to the contrary of the provisions contained in Clause 6.11, if claims conflicting with the interpretation of the terms of this Agreement are notified to FCAM by any Party relating to the Collection Account or the Collected Gross Receipts, or if any third party shouldassert claims in respect thereof, FCAM shall be entitled, at FCAM's discretion, to:

    6.6.1   notwithstanding any other provision herein contained, suspend the distribution of Collected Gross Receipts without liability to any Party until any conflict is in the opinion of FCAM resolved; and/or

    6.6.2   invoke the arbitration procedure referred to in Clause 8 hereof.

    6.7 FCAM shall not be obliged to take any action under this Agreement which may in FCAM's opinion involve any expense or liability on FCAM's part unless FCAM shall have first been furnished with an indemnity from the Parties in a form acceptable to FCAM. Any such expense incurred by FCAM pursuant to this Clause 6.7 shall be deemed FCAM Expenses for the purposes of this Agreement.

    6.8 FCAM shall be entitled without liability to engage in its normal and customary business with any Party or any affiliate or associate of any Party provided that nothing in this sub-paragraph shall affect the right of the Parties to receive their Entitlements.

    6.8 If any payment by FCAM is subject to the approval of one or more of the Parties, and such approval has not been received in writing by FCAM within seven (7) Business Days after a request for the same in writing, such Party shall be deemed to have given its approval to the relevant act or payment and FCAM shall be entitled to make the relevant payment or otherwise act in accordance with the terms and conditions of this Agreement.

    6.10   This Agreement shall be deemed to be the sole document relating to the distribution of the Collected Gross Receipts.

    6.11   In the event of any conflict between the provisions of this Agreement and the provisions of any other agreement relating to the Film with respect to the disbursement of receipts from the Film, the provisions of this Agreement shall prevail.

    6.12   The Parties agree that FCAM shall be entitled to a credit on all copies of the Film in the form ‘World revenues collected and distributed by Freeway CAM B.V.’.

    6.13   The Parties, FCAM and FCustody jointly and severally agree with each of the others that the terms of Schedules 5 and 6 of this Agreement are confidential to the Parties, FCAM and FCustody and shall not be disclosed to anythird party, save that any Party, FCAM and FCustody shall be entitled to reveal such terms to its professional advisors and to any Beneficiary in relation to matters which affect such Beneficiary.

    6.14   The parties hereto agree and declare that the provisions of the United Kingdom Contracts (Rights of Third Parties) Act 1999 (or any similar provision in any other relevant jurisdiction) shall not apply to this Agreement and that no term or condition of this Agreement shall confer or be construed as conferring any right on any third party.

    6.15   The clause and paragraph headings in this Agreement are provided for convenience only and shall not affect the construction, interpretation or effect of this Agreement.

    6.16   The Distributor shall provide FCAM with one VHS (PAL) video cassette or one DVD and one poster of the Film as soon as these become available.

    6.17   Nothing herein shall constitute a partnership or joint venture between the parties hereto or any two or more of them.

  7. Legal Advice

    7.1 FCAM may at any time and in its absolute discretion (but after having consulted with each of the Parties) seek independent legal advice with regard to any non-payment of Gross Receipts by any Sub-Distributor or to any other matter relating to or affecting the performance of FCAM's duties or powers set out in this Agreement and each Party hereby undertakes to assist FCAM to obtain as fully informed and accurate legal advice as possible by:

    7.1.1   providing FCAM with copies of any relevant document in the possession of that Party;

    7.1.2   taking all reasonable steps to procure that copies of any relevant documents that have been but are no longer in that Party's possession are provided to FCAM; and

    7.1.3   informing FCAM of any relevant information in the knowledge of that Party or (if appropriate) in the knowledge of its officers, servants and/or agents.

    7.2 FCAM shall provide to each of the Parties a copy of any legal advice so obtained.

    7.3 The Parties jointly and severally indemnify FCAM against all costs, charges and expenses connected with or arisingout of obtaining any such legal advice and such costs, charges and expenses shall be deemed to be FCAM's Expenses for which FCAM is entitled to be reimbursed in accordance with Schedule 5. If at any time FCAM shall determine that the amount of Collected Gross Receipts then standing credited to the Collection Account is not sufficient to discharge such costs, charges and expenses as are to be or have been incurred by FCAM the Parties (excepting FCAM) shall forthwith pay to FCAM the amount of any such shortfall or the estimated amount thereof and shall be jointly and severally responsible therefore.

    7.4 Any sums paid by the Parties to FCAM pursuant to Clause 3 shall (notwithstanding the provisions of Schedule 5) be repaid to the Parties in first position out of Collected Gross Receipts.

  8. Arbitration

    8.1 Should any dispute arise between any two or more of the Parties or between any of the Parties and FCAM, the dispute shall be resolved by arbitration in [London] under the Rules then in force for International Arbitration of the American Film Marketing Association subject to the provisions of this Clause 8.

    8.2 FCAM shall provide the Parties with a written notice summarizing the dispute and the relevant Parties shall within ten (10) Business Days after such notification mutually appoint at their own expense an AFMA approved arbitrator. If the Parties fail to agree upon the appointment of an arbitrator within such period, the Arbitral Agent of AFMA will then appoint an arbitrator as soon as possible after such application. The Parties shall provide the arbitrator with all relevant information and documentation within thirty (30) days of the appointment and the arbitration shall commence at a location in [London] as expeditiously as possible and in any event within thirty (30) business days after the appointment of the arbitrator.

    8.3 Forthwith after a decision by the arbitrator, the Parties shall forthwith comply with that decision in accordance with the terms thereof.

    8.4 All costs, charges and expenses incurred by FCAM in relation to the resolution of the dispute, inclusive of time spent by FCAM executives at a reasonably hourly rate,shall be deemed FCAM Expenses, provided that if FCAM itself is a party to the arbitration proceedings, the payment of any costs incurred by FCAM shall be subject to any award of costs made by the arbitrator.

  9. Termination

    9.1 FCAM and FCustody may at any time terminate this Agreement upon thirty (30) Business Days by written notice to all of the Parties provided that FCAM's and FCustody's notice shall specify the arrangements proposed to be made by FCAM and FCustody to pay Entitlements which, apart from such termination, would then have been payable to Beneficiaries under the provisions hereof and FCAM and FCustody shall give good faith consideration to any representations made to FCAM and FCustody concerning such proposed arrangements as any Beneficiary may provide to FCAM and FCustody within fourteen (14) Business Days thereafter.

    9.2 All the Parties and Beneficiaries shall have the right to terminate this Agreement by unanimous written notice to FCAM and FCustody at any time subject to FCAM's right to FCAM's Remuneration and FCAM Expenses unpaid at that date.

    9.3 This Agreement may be terminated by the Parties without notice if FCAM either commits a material breach of the terms of this Agreement which is not remedied within twenty one (21) Business Days of written notice given by a majority of the Parties, of which the Producer must be one, or if FCAM shall enter into liquidation (except for the purpose of a scheme for amalgamation or reconstruction) or if any winding-up petition is issued against FCAM and remains undischarged for a period of twenty eight (28) Business Days.

    9.4 Upon termination pursuant to this Clause 9, the Parties shall within twenty one (21) Business Days instruct FCAM and FCustody in writing to transfer the administration of Collected Gross Receipts less FCAM Remuneration and FCAM Expenses up to and including the termination date to a successor collection account manager.

    9.5 As from the date of termination pursuant to this paragraph, FCAM and FCustody shall have no further obligation to perform its obligations hereunder and shall be fully released and discharged therefrom, without prejudice toany accrued rights and obligations in respect of the period prior to such termination.

  10. Notices

    10.1   Any notice required or permitted to be given under this Agreement shall be in writing and sent by hand, first-class recorded letter or facsimile addressed to the relevant Party at the Party's address given in this Agreement or such other address as may be notified to by that Party to the other hereto.

    10.2   Any such notice sent by first-class recorded letter shall be deemed to have been received five (5) Business Days after posting; any such notice sent by facsimile shall be deemed to have been received at the time of despatch if during the recipient's business hours and otherwise at the commencement of the next Business Day of the recipient provided always that the sender shall have received a successful transmission report; any such notice sent by hand shall be deemed to have been received at the time of delivery.

  11. Execution

    11.1   This Agreement may be executed in any number of counterparts (each of which shall be deemed an original) and all of which, taken together, shall constitute one and the same agreement and any party may enter into this Agreement by executing a counterpart.

    11.2   If one or more parties do not execute this Agreement, it shall nevertheless be in full force and effect as between the Parties that have executed this Agreement and FCAM and FCustody. The Entitlement(s) of any Parties who do not sign the Agreement will be retained in the Collection Account for thirty six (36) months after the Delivery Date or until such Parties duly execute the Agreement and FCAM has received the same, whichever first occurs. FCustody shall be released from any obligations pursuant to Clause 2.1 above in respect of any Party failing to execute this Agreement within thirty six (36) months after the Delivery Date whereupon any such Party's Entitlement will be allocated to the other Beneficiaries in accordance with the terms hereof.

  12. Governing Law

    This Agreement shall be construed and performed in all respects in accordance with and shall be governed by [English] Law and the parties irrevocably submit to the arbitration procedure contained in Clause 8.

    AS WITNESS the hands of the parties hereto the day and year first above written.

EXECUTED and unconditionally
delivered as its Agreement by

FREEWAY CAM B.V.

 

[   ]

EXECUTED and unconditionally
delivered as its Agreement by

STICHTING FREEWAY CUSTODY

 

[   ]

EXECUTED and unconditionally
delivered as its Agreement by

 

[   ]

EXECUTED and unconditionally
delivered as its Agreement by

 

[   ]

EXECUTED and unconditionally
delivered as its Agreement by

 

[   ]

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