Appendix | B

Sample U.S. Distribution Contract

Agreement made and entered into as of May 1, 2012, by and between hereby known as Distributor [Enter address, telephone, fax, email, production company] and hereby known as Producer [Enter address, telephone, fax, email]. In consideration of their respective covenants, warranties, and representations, together with other good and valuable consideration, Distributor and Producer hereby agree as follows:

I.PICTURE: Producer will deliver to Distributor the documentation, advertising, and physical materials (the “Materials”) set forth in the attached Delivery Schedule (Exhibit “A”), relating to the motion picture with the running time of 80 minutes currently entitled [Enter title of film].
II.RIGHTS GRANTED:
A.Producer hereby grants to Distributor the irrevocable, right, title, and interest in and to the distribution of the Picture, its sound, and music, in the Territory (as hereinafter defined), including, without limitation, the sole, exclusive, and irrevocable right and privilege, under Producer’s copyright and otherwise, to distribute, license, and otherwise exploit the Picture, its image, sound, and music (as embodied in the Picture only) during the Term (as hereinafter defined) throughout the Territory (as hereinafter defined) for Home Video/DVD, Video On Demand (VOD), and Internet (collectively, the “Media”). Such rights do not include the rights to produce other motion pictures, or sequels, or remakes of the Picture, or any right to produce television series, miniseries, or programs or the rights to license clips from the Picture or other so-called ancillary rights (herein called “Reserved Rights”). Without limiting the generality of the foregoing, or any other rights granted to Distributor elsewhere in this Agreement, Producer •• the following rights:
1.Home Video/DVD Rights: All rights in and to the manufacture, distribution, exploitation, and nontheatrical, nonadmission, free home-use exhibition of the Picture, its sound, and music (whether by sale or by rental), by means of any and all forms of videocassette, videodisc, video cartridge, tape, memory cards, or other similar device (“Videogram”) now known or hereafter devised and designed to be used in conjunction with a reproduction apparatus which causes a visual image (whether or not synchronized with sound) to be seen on the screen of a television receiver, personal computer, personal handheld device (e.g., phone, PDA), or any comparable device now known or hereafter devised, including DVD (the “Home Video Rights” or “Video Rights” or “DVD Rights”).
2.Video On Demand (VOD) and Internet: All rights in and to the distribution, exhibition, marketing, and other exploitation of the Picture, its sound, and music by means of “Internet” & “Video On Demand” as that expression is commonly understood in the motion picture industry.
B.Advertising: Distributor shall have the exclusive right throughout the Territory during the Term to advertise and publicize (or have its subdistributors advertise and publicize) the Picture by any and all means, media, and method whatsoever, including by means of the distribution, exhibition, broadcasting, and telecasting of trailers of the Picture, or excerpts from the Picture prepared by Distributor or others, subject to any customary restrictions upon and obligations with respect to such rights as are provided for in the contracts in relation to the production of the Picture.
C.Title: Distributor shall have the right to use the present title of the Picture.
D.Distributor may add its own logo/branding/advertising to the packaging, advertising materials, and at the end or beginning of the Picture. Additionally, Distributor may add a “ghost logo” superimposed on Picture.
E.Licensing: Distributor has the right to grant licenses and other authorizations to one or more third parties to exercise any or all of said rights and privileges provided herein, for any and all territories throughout the Territory.
III.RESERVED RIGHTS: All other rights not expressly written herein, including, but not limited to, electronic publishing, print publication, music publishing, live-television, radio, and dramatic rights, are reserved to the Producer.
IV.TERRITORY: The Territory (herein “Territory”) for which rights are granted to Distributor consists of The World.
V.TERM: The rights granted to Distributor under this Agreement will commence on the date of delivery to Distributor of all delivery items listed in Delivery Items (Exhibit “A”), and continue thereafter for nine (9) years (“Initial Term”). This Agreement will thereafter renew automatically for successive three (3)-year periods (each, a “Renewal Term”), unless either party notifies the other in writing at least thirty (30) days prior to the end of the Initial Term or any Renewal Term that it does not wish to renew. If such notification is given by either party, this Agreement will remain in full effect for a one (1)-year “transition period” after the end of the then-current Term, to allow both parties time to make alternate arrangements. Exception: If Producer has not received fifty thousand dollars ($50,000) prior to the end of the fourth year (during the “Initial Term”), Producer may terminate this Agreement by written notice to Distributor, thirty (30) days prior to the fourth-year anniversary of this contract.
VI.ADVERTISING: Producer will supply to Distributor advertising and marketing materials as set forth on the attached Delivery Schedule (Exhibit “A”).
VII.COPYRIGHT: Producer represents and warrants that the Picture is, and will be throughout the Term, protected by copyright. Each copy of the Picture will contain a copyright notice conforming to and complying with the most current requirements of the United States Copyright Act.
VIII.PRODUCTION COSTS: As between Producer and Distributor: Producer is and will be responsible for and has paid or will pay all production costs, taxes, fees, and charges with respect to the Picture and/or the Materials, except as provided herein. As used herein, “production costs” will include all costs incurred in connection with the production of the Picture and the Materials, including payments to writers, producers, directors, artists, and all other persons rendering services in connection with the Picture and/or the materials, all costs and expenses incurred in acquiring rights to use music in connection with the Picture, including synchronization, performance, and mechanical reproduction fees and union residuals.
IX.PRODUCER’S REPRESENTATION AND WARRANTIES: Producer warrants and represents to Distributor, to the best of Producer’s knowledge and belief, as follows:
A.Producer has full right, power, and authority to enter into and perform this Agreement and to grant to Distributor all of the rights herein granted and agreed to be granted hereunder.
B.Producer has acquired, or will have acquired prior to the delivery of the Picture hereunder, and will maintain during the Term all rights in and to the literary and musical material upon which the Picture is based or which are used therein, and any other rights necessary and required for the exploitation of the Picture, as permitted hereunder.
C.Producer will state that neither the Picture nor the Materials nor any part thereof, nor any literary, dramatic, or musical works or any other materials contained therein or synchronized therewith, nor the exercise of any right, license, or privilege herein granted, violates or will violate, or infringes or will infringe, any trademark, trade name, contract, agreement, copyright (whether common law or statutory), patent literary, artistic, dramatic, personal, private, civil, or property right or right of privacy or “moral right of author,” or any law or regulation or other right whatsoever of, or slanders or libels, any person, firm, corporation, or association.
D.Producer has not sold, assigned, transferred, or conveyed, and will not sell, assign, transfer, or convey, to any party, any right, title, or interest in and to the Picture or any part thereof, or in and to the dramatic, musical, or literary material upon which it is based, adverse to or derogatory of or which would interfere with the rights granted to Distributor, and has not and will not authorize any other party to exercise any right or take any action which will derogate from the rights herein granted or purported to be granted to Distributor.
E.Producer will obtain and maintain all necessary licenses for the production, exhibition, performance, distribution, marketing, and exploitation of the Picture and/or the Materials, including, without limitation, the synchronization and performance of all music contained therein, throughout the Territory during the Term for any and all purposes contemplated hereunder. Producer further represents and warrants that as between the Producer and Distributor, the performing rights to all musical compositions contained in the Picture and/or the Materials will be controlled by Producer to the extent required for the purposes of the Agreement, and that no payments will be required to be made by Distributor to any third party for the use of such music in the Materials or on television or in Videogram embodying the Picture (or, if any such music payments are required, Producer will be solely responsible therefore).
F.Producer represents and warrants all artists, actors, musicians, and persons rendering services in connection with the production of the Picture or the materials have been or will be paid by Producer the sums required to be paid to them under applicable agreements, and the sums required to be paid pursuant to any applicable pension or similar trusts (e.g., WGA, DGA, SAG, AFTRA) required thereby will be made by Producer, in a due and timely manner.
G.Producer warrants that the Picture and Advertising Materials and Distributor’s use thereof do not and will not
1.infringe upon or violate any copyright, trademark, trade name, trade secret, patent, moral right, literary, artistic, dramatic, contract, or other intellectual or proprietary or other right of any third party;
2.infringe upon the right of privacy or publicity of any person;
3.constitute a libel or slander of any person;
4.violate any applicable law, statute, ordinance, or regulation; or
5.be deemed to be obscene or pornographic. Producer has not been charged or threatened with infringement or violation of any intellectual property or other right of any person or entity in connection with the Picture or Advertising Materials. The Picture and Advertising Materials do not and will not contain any defects, viruses, worms, Trojan horses, date bombs, time bombs, or other harmful components.
X.DISTRIBUTOR’S WARRANTIES: Distributor warrants that it is solvent and not in danger of bankruptcy. Distributor has the authority to enter into this Agreement, and there are and, to the best of Distributor’s knowledge and belief, will be, no claims, actions, suits, arbitrations, or other proceedings or investigations pending or threatened against or affecting the Distributor’s ability to fulfill its obligations under this Agreement, at law or in equity, or before any federal, state, county, municipal, or other governmental instrumentality or authority, domestic or foreign. Distributor warrants that all payments from subdistributors and other distributors will be by check, cash, wire transfer, letter of credit, or money order payable in the name of Distributor.
XI.INDEMNITY: Each party hereby agrees to defend, indemnify, and hold harmless the other (and its affiliates, and its and their respective successors, assigns, distributors, officers, directors, employees, subsidiaries, licensees, and representatives) against and for any and all claims, liabilities, damages, costs, and expenses (including reasonable outside attorney’s fees and court costs) arising from or related to any breach or alleged breach (or claim which, if proven, would be such breach) by the indemnifying party of any of its undertakings, representations, or warranties under this Agreement, and/or arising from or related to any and all third-party claims which, if proven would be such breach. Each party agrees to notify the other in writing of any and all claims to which this indemnity will apply, and to afford the indemnifying party the opportunity to undertake the defense of such claim(s) with counsel approved by the indemnified party (which approval will not be unreasonably withheld), subject to the right of the indemnified party to participate in such defense at its cost. In no event shall any such claim be settled in such a way as would adversely affect the rights of the indemnified party in the Picture without such party’s prior written consent; provided, however, that Producer hereby consents to any settlement entered into under any of the following circumstances:
A.the applicable insurance authorized the settlement;
B.the settlement relates to a claim for injunctive relief which has remained unsettled or pending for a period of thirty (30) days or longer which otherwise interferes with Distributor’s distribution of the Picture hereunder; or the settlement is for not more than ten thousand dollars ($10,000). All rights and remedies of the parties hereunder will be cumulative and will not interfere with or prevent the exercise of any other right or remedy which may be available to the respective party.
XII.DELIVERY MATERIALS: The Picture will be delivered as follows: (a) Within fourteen (14) days of signing this document, Producer will deliver to Distributor the materials specified in Exhibit “A” hereto, accompanied by a fully executed lab access letter (irrevocable for the Term) for access to the Master materials, if applicable. If any said materials are not acceptable to Distributor, Distributor will notify the Producer of any technical problems or defects within ten (10) business days, and Producer will promptly replace the defective materials at Producer’s sole expense. Distributor shall have no right to terminate this Agreement unless and until Producer has failed to cure any such defects within thirty (30) days after notice thereof from Distributor. If no objection is made within ten (10) business days of delivery of an item, the item will be deemed acceptable. If Distributor creates its own artwork and trailers for the Picture, ownership of these materials shall vest in Producer, and Producer shall have the right to use said materials after the Term of this Agreement expires. (b) Producer will concurrently with the delivery of the materials deliver to Distributor a list of contractual requirements for advertising credits to persons who rendered services or furnished materials for such Picture and a list of any restrictions. (c) All materials delivered to Distributor shall be returned to Producer within thirty (30) days of the end of the Term.
XIII.ADVANCE/GUARANTEE: There shall be no advance.
XIV.ALLOCATION OF GROSS RECEIPTS: As to proceeds derived from Distributor’s exploitation of all rights outlined in Paragraph II, division of the Gross Receipts will be made as follows: (a) Gross Receipts: As used herein, the term “Gross Receipts” shall mean all monies actually received by and credited to Distributor, less any refunds, returns, credit card/bank fees, taxes, collection costs, shipping & handling, and manufacturing or duplication costs. Distributor may receive advances, guarantees, security deposits, and similar payments from persons or companies licensed by Distributor to subdistribute or otherwise exploit the Picture. Notwithstanding Distributor’s receipt of such monies, if any, and notwithstanding anything to the contrary contained herein, no such monies will be deemed to be Gross Receipts hereunder unless and until such monies are earned. (b) From the Distributor’s exploitation of Home Video/DVD, Video On Demand, and Internet, Distributor shall recoup all Recoupable Expenses (see Paragraph XV). From the remaining revenues, Distributor shall deduct and retain thirty percent (30%) of Gross Receipts. The net proceeds shall be paid to Producer. Copies of all statements, notices, and reports shall be sent to Producer at the address set forth above. (c) Deductions from Gross Receipts shall be taken in the following order: (1) Recoupable Expenses incurred by Distributor, (2) Distribution Fee of thirty percent (30%) of Gross Receipts, (3) Net Proceeds shall be paid to Producer.
XV.RECOUPABLE EXPENSES: As used herein, the term “Expenses” and/or “Recoupable Expenses” shall mean all of Distributor’s actual expenses on behalf of the Picture, limited as follows: (a) DVD production and replication costs: These expenses include all direct out-of-pocket costs to produce and replicate professional standard DVDs. (b) Internet costs include, but may not be limited to, transferring and encoding. (c) Promotional Expenses: These expenses include the cost of preparing artwork (e.g., DVD covers, Internet images), posters, one-sheet, trailers, and advertising relating to the Picture. (d) Delivery Expenses: Delivery Expenses are the direct out-of-pocket costs incurred by Distributor to manufacture any of the film, video, or digital deliverables (as listed on Exhibit “A”) which Producer did not supply. Delivery Expenses also include the direct out-of-pocket costs incurred between markets for shipping, duplicating, and delivery of marketing materials (i.e., screeners) to foreign buyers, although Distributor will make best efforts to keep these low. At Producer’s request, Distributor shall provide receipts for each and every expense. (e) Recoupable Expenses do not include any of the Distributor’s general office overhead, but may include expenses tied directly to the management of Producer’s materials (DVD inventory, fulfillment, communication).
XVI.DEFAULT/TERMINATION:
A.Distributor Default: If it is found and proven that Distributor has defaulted on its obligations under this Agreement, upon notification in writing, including details of alleged default here-under sufficient so as to enable Distributor to effectuate a cure, sent to the address above of that fact from Producer, Distributor will have thirty (30) days from receipt of said notice to cure said default. If the default is not cured within the allotted period, the Producer will have the right to initiate arbitration.
B.Producer Default: Distributor shall notify Producer in writing, including details of alleged default hereunder sufficient so as to enable Producer to effectuate a cure. Producer shall have thirty (30) days from receipt of said notice to correct alleged default before Distributor initiates arbitration.
C.Termination Rights: Failure by either party hereto to perform any of its obligations under this Agreement shall not be deemed to be a material breach of this Agreement until the nonbreaching party has given the breaching party written notice of its failure to perform, and such failure has not been corrected within ten (10) business days (thirty [30] days in the event of a monetary breach) from and after the giving of such notice. In the event of an incurred material breach, either party shall be entitled to terminate this Agreement (subject to arbitration) by written notice to the other party, obtain monetary damages and other appropriate relief, and, in the case of Producer, regain all of its rights in the Picture from Distributor, provided that Producer shall continue to honor all existing executed contracts and licenses respecting Picture. Producer shall have the right to terminate this Agreement and cause all rights herein conveyed to Distributor to revert to Producer, provided that Producer shall continue to honor all third-party agreements conveying rights in the Picture (in respect to which Producer shall be deemed an assignee of all of Distributor’s rights therein in respect to the Picture), by written notice to Distributor in the event that Distributor files a petition in bankruptcy or consents to an involuntary petition in bankruptcy or to any reorganization under Chapter 11 of the Bankruptcy Act or dissolved by action at law.
XVII.  ACCOUNTINGS:
A.Distributor will render or cause to be rendered to Producer semiannual accounting statements showing expenses and receipts. Statements will be produced fifteen (15) days after the 30th of June and the 31st of December. Processing of these statements will begin six (6) months after the signing of this Agreement and delivery of materials listed in Exhibit “A.” All monies due and payable to Producer pursuant to this Agreement will be paid simultaneously with the rendering of such statements. Distributor has the option to hold back up to five thousand dollars ($5,000) at the end of each six (6)-month window if funds are anticipated to be needed to cover Recoupable Expenses in the next six (6)-month window.
B.Producer will be deemed to have consented to all accountings rendered by Distributor or its assignees or successors, and all such statements will be binding upon Producer unless specific objections in writing, stating the basis thereof, are given within ten (10) days after receipt of statements by Producer.
C.Distributor shall keep and maintain at its office, until expiration of the Term and for a period of three (3) years thereafter, complete detailed, permanent, true, and accurate books of account and records relating to the distributing and exhibition of the Picture, including, but not limited to, detailed collections and sales by country and/or buyer, detailed billings thereon, detailed play dates if applicable thereof, detailed records of expenses that have been deducted from collections received from the exploitation of the Picture, and the whereabouts of prints, trailers, accessories, and other material in connection with the Picture. Records shall be kept in accordance with Generally Accepted Accounting Principles (GAAP). Producer shall be entitled to inspect such books and records of Distributor relating to the Picture during regular business hours, and shall be entitled to audit such books and records of Distributor relating to the Picture upon ten (10) business days’ written notice to Distributor, and provided that not more than one audit is conducted every twelve (12) months during each calendar year, and further provided that such audit shall last not more than ten (10) consecutive business days once begun and does not interfere with Distributor’s normal operations. Within thirty (30) days of the completion of the audit, Producer will furnish Distributor with a copy of said audit. In the event that the audit discloses that Producer has been underpaid twenty-five thousand dollars ($25,000) or more, Distributor shall reimburse Producer for all reasonable •• be borne by Producer.
XVIII.NOTICES: All notices and other communications under this Agreement will be in writing and will be deemed given when delivered by hand or upon confirmed receipt of a facsimile transmission, two (2) days after being deposited with an overnight courier, or five (5) days after mailing, postage prepaid, by registered or certified mail, return receipt requested, to the address and numbers specified above or such other addresses as either party will specify in a written notice to the other. In all instances, hard copies will follow all fax correspondence.
XIX.ASSIGNMENT: This Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective successors and permitted assigns. Producer may assign its rights to payment of monies. Distributor may assign its rights without the prior written consent of Producer, provided that Distributor assigns its rights to a successor company that may arise from Distributor’s merging, being acquired, or partnering with another company.
XX.DISPUTE RESOLUTION: The parties agree that, in the event of an alleged breach or a dispute (“Dispute”) in connection with this Agreement, they will first work together in good faith to resolve the matter informally by discussions between their management. In the event such attempts have not resolved the Dispute within forty-five (45) days following either party’s request to resolve a Dispute, the Dispute will be settled by binding confidential arbitration administered by the American Arbitration Association (“AAA”) in accordance with its then-applicable rules. The arbitration will be conducted in San Francisco, California, U.S.A., in English, by a single arbitrator familiar with entertainment law, who will be selected by mutual agreement of the parties, or, if the parties cannot agree, by the AAA. The award of the arbitrator will be final and binding, and judgment on the award may be entered and enforced in any court having jurisdiction thereof. The parties agree to equally share the fees and expenses of the arbitrator. For purposes of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, known as the “New York Convention,” the award will be deemed an award of the United States. Nothing in this section will preclude either party from seeking interim or provisional relief concerning any breach or dispute, including a temporary restraining order, a preliminary injunction, or an order of attachment, either prior to or during informal discussions or arbitration.
XXI.ENTIRE AGREEMENT: This Agreement is intended by the parties hereto as a final expression of their Agreement and understanding with respect to the subject matter hereof, and as a complete and exclusive statement of the terms thereof (unless amended in writing by both parties), and supersedes any and all prior and contemporaneous agreements and understanding thereto. This Agreement will be understood to in all respects lay under the jurisdiction of California law and the laws of the United States of America. In the event of any conflict or action between the parties, the prevailing party shall be entitled to recoup its reasonable attorney fees and court costs and expenses from the nonprevailing party. Paragraph headings in this Agreement are used for convenience only, and will not be used to interpret or construe the provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date hereof.

AGREED AND ACCEPTED: FILM COMPANY:

By:___________________________   Date:___________________________

By:___________________________   Date:___________________________

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