Exhibit 10.29
AGREEMENT
“STREETS OF LEGEND” (a.k.a. “QUATTRO NOZA”)
     This agreement (the “Agreement”) is made and entered into as of March 24,
2005, by and between Sobini Films (“Grantor”) and Lions Gate Films Inc. (“LGF”)
with respect to that certain motion picture presently entitled “Streets of
Legend” (a.k.a. “Quattro Noza”).
1. Picture: The “Picture” shall mean that certain motion picture presently
entitled “Streets of Legend” (a.k.a. “Quattro Noza”) and any and all versions
thereof (if and as available) and all “bloopers”, footage, trims and outtakes
thereof (if and as available) (including, without limitation, the Director’s Cut
and the Final Cut and any and all versions of each of the foregoing, all
versions rated by the Motion Picture Association of America and unrated versions
of the Picture, “behind the scenes”, “making of” and any and all other
documentary or short films concerning the Picture, and all footage, “bloopers”,
trims and out-takes of each of the foregoing), produced by, on behalf of or at
Grantor’s direction, in the year 2003, starring Robert Beaumont and Brihanna
Hernandez in the principal lead and supporting roles, written by Joey Curtis and
Albert Hernandez and directed by Joey Curtis.
2. Territory: The “Territory” shall mean and include each of the following:
(a) United States of America (including but not limited to, Guam. Saipan, Midway
Island, the Trust Territory Islands, the Caroline Islands, the Marshall Islands,
the Virgin Islands, Puerto Rico and American Samoa) (“U. S.”), its territories,
possessions, trusteeships and commonwealths and all military bases, ships at
sea, airlines and oil rigs flying the flag of the U.S., (b) Canada (including,
but not limited to, Quebec, Prince Edward Island, the Northwest Territories, the
Yukon Territories and Newfoundland), its territories, possessions, trusteeships
and commonwealths, and all military bases, ships at sea, airlines and oil rigs
flying the flag of Canada, and (c) for the purposes of Television exploitation
in the U. S. only (the “Additional Television Territory’’), Bermuda and the
Bahamas Islands.
3. Rights Granted: Grantor hereby grants to LGF, on an exclusive basis, all
distribution rights in and to the Picture and the underlying material with
respect thereto throughout the Territory, under copyright and otherwise, in all
languages and in all media, whether now known or hereafter devised, including,
without limitation, all Theatrical, Non-Theatrical, Home Video, Television, and
ancillary and derivative rights in and to the Picture, by all methods of
delivery, whether now know or hereafter devised, including without limitation,
all Internet Delivery Mechanisms, all as such rights may be more specifically
defined in Schedule “A”, which is attached hereto and incorporated herein by
this reference (collectively, the “Rights”), but expressly excluding the
copyright in and to the Picture, all soundtrack album, Electronic Publishing
Rights, literary publishing (including, without limitation, all print
publication and novelization rights), merchandising rights, and all remake,
prequel and sequel rights (including, without limitation, any and all television
spin-off rights) in and to the Picture, except as otherwise set forth herein.
Without limiting the generality of the foregoing, the Rights granted to

 

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LGF hereunder shall include, without limitation, the exclusive right to market,
advertise, promote and publicize the Picture in all media, whether now known or
hereafter devised.
     a. Remakes, Prequels & Sequels: LGF’s negotiation rights with respect to
remakes, prequels and sequels of the Picture shall be pursuant to the terms of
that certain executed employment agreement dated June 6, 2000 (as amended) by
and between Lions Gate Entertainment Corp., a corporation incorporated under the
laws of British Columbia and Mark Amin with respect to the employment of Amin.
     b. Television Exploitation: Upon LGF’s receipt of Grantor’s written
request, which written request must be received by LGF no later than
December 31, 2005 (the “Television Notice”), LGF shall submit the Picture to
Showtime for inclusion under LGF’s pay television output agreement with Showtime
Networks (the “Showtime Agreement”). If LGF does not receive the Television
Notice on or before December 31, 2005, then (i) LGF shall not submit the Picture
to Showtime for inclusion under the Showtime Agreement (except as otherwise set
forth in this subparagraph), and (ii) LGF and Grantor shall cooperate in
connection with the sale of the first cycle Television Rights in and to the
Picture in the Territory. Following December 31, 2005, Grantor shall have the
right to issue written notice to LGF requesting that LGF submit the Picture to
Showtime for inclusion under the Showtime Agreement (the “Secondary Notice”).
Upon LGF’s receipt of the Secondary Notice, LGF shall have the right, but not
the obligation, to submit the Picture to Showtime for inclusion under the
Showtime Agreement. If, following LGF’s receipt of the Secondary Notice, LGF
elects not to submit the Picture to Showtime for inclusion under the Showtime
Agreement, then LGF and Grantor shall continue to cooperate in connection with
the sale of the first cycle Television Rights in and to the Picture in the
Territory until such time as such sale is complete. Any submission by LGF of the
Picture to Showtime for inclusion under the Showtime Agreement pursuant to the
terms of this subparagraph shall be subject to Showtime’s right to accept or
reject such submission pursuant to the terms of the Showtime Agreement.
4. Term: The “Term” of this Agreement shall commence as of the date first
written above and shall terminate seven (7) years from LGF’s initial commercial
theatrical release of the Picture in the Territory plus an additional six
(6) month non-exclusive sell-off period. Notwithstanding the foregoing, if the
Picture is included in the Showtime Agreement pursuant to the terms of Paragraph
3(b) hereinabove, the Term, with respect to all rights necessary to give effect
to the Showtime Agreement, shall extend for the term of the Picture required
under the Showtime Agreement. It is understood and agreed that LGF shall not
manufacture more Home Video devices during the last six (6) months of the Term
than it reasonably expects to sell during the Term exclusive of the sell-off
period (provided that no inadvertent over-manufacturing shall be deemed a breach
of this Agreement). Without limiting the generality of the foregoing, LGF shall
have a right of first negotiation (for a period of ten (10) days commencing
prior to the expiration of the Term) with respect to any extensions of the Term
hereof.
5. Minimum Guarantee: Not applicable.

 

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6. Grantor P&A Commitment; Release Commitment:
     a. Grantor P&A Commitment: Grantor shall spend no less than Two Hundred
Thousand Dollars ($200,000.00) (the “Grantor P&A Commitment”) solely in
connection with the print, marketing, advertising and publicity costs for LGF’s
Theatrical release of the Picture in the Territory. The Grantor P&A Commitment
shall be spent pursuant to a mutually approved budget (to be negotiated in good
faith by the parties) (the “P&A Budget”). Any print and advertising expenditure
in connection with the initial commercial theatrical release of the Picture in
excess of the Grantor P&A Commitment shall be subject to mutual written approval
between the parties, which approval shall not be unreasonably withheld by
Grantor and shall be deemed rejected if not given within five (5) days of
Grantor’s receipt of LGF’s written request for such approval. If any such
additional print and advertising costs are paid for by LGF, such costs shall be
recoupable as Distribution Expenses pursuant to the terms of Paragraph 7
hereinbelow.
     b. Release Commitment: LGF shall cause the initial commercial theatrical
release of the Picture on one (1) screen in the Territory.
7. Financial Terms:
     a. Grantor’s Participation: From One Hundred Percent (100%) of all monies
received by LGF on a non-refundable basis from the exploitation of the Picture
in all media throughout the Territory, LGF shall be entitled to deduct the
following on a continuing basis and in the following order: (i) LGF’s
Distribution Fee for all media; and (ii) LGF’s Distribution Expenses (as that
term is defined hereinbelow), but expressly excluding the Grantor P&A
Commitment. All revenues remaining after the foregoing deductions shall be
referred to herein as “AGR”. The AGR shall be allocated One Hundred Percent
(100%) to Grantor. That portion of the AGR allocated to Grantor pursuant to this
paragraph shall be referred to herein as “Grantor’s Participation”. LGF shall be
entitled to cross-collateralize all revenues received by LGF in connection with
the Picture from all media throughout the Territory for the purposes of
recouping LGF’s recoupable Distribution Expenses and the Home Video Advance (as
that term is defined hereinbelow). LGF shall not be entitled to
cross-collateralize revenues received by LGF from the exploitation of the
Picture with revenues received by LGF in connection with any other motion
picture property. The Picture shall not be used as a loss-leader. If LGF
includes the Picture in a package of films licensed to a third party, then the
price allocated to the Picture shall be on the basis of a reasonable allocation
of revenues in light of the commercial worth of the motion pictures in the
package, as determined by LGF in the exercise of its reasonable good faith
business judgment.
     b. Home Video Advance: As an advance against Grantor’s Participation,
Grantor shall be entitled to receive a “Home Video Advance” for the Picture in
an amount equal to Fifty Percent (50%) of Grantor’s projected share of AGR
derived from the Initial Home Video Release (as that term is defined
hereinbelow) of the Picture, as projected by LGF in its reasonable good faith
business judgment (which projection shall include a reserve for returns based
upon LGF’s reasonable good faith business judgment). As used herein, “Initial
Home Video Release” shall be the period commencing on LGF’s initial Home Video
Street Date for the Picture and

 

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continuing until the end of the calendar quarter during which LGF’s initial Home
Video Street Date for the Picture occurs. Grantor hereby acknowledges and agrees
that the AGR projection made by LGF pursuant to the terms of this paragraph is
an estimate that is subject to change and that the financial information
contained therein is not a true and accurate statement of the actual amount of
revenues that will be collected by LGF or the actual amount of revenues payable
to Grantor. Grantor shall not rely on any information contained in any such
projection for any purpose whatsoever. Grantor shall not have the right to
dispute such projection (or any and all components thereof). One Hundred Percent
(100%) of the Home Video Advance shall be payable thirty (30) days following the
end of the first calendar quarter during which LGF’s initial Home Video Street
Date for the Picture occurs (unless LGF’s initial Home Video Street Date for the
Picture occurs in the second half of such quarter, in which event the Home Video
Advance shall be payable ninety (90) days following the end of the first
calendar quarter during which LGF’s initial Home Video Street Date for the
Picture occurs). Notwithstanding the foregoing, if LGF’s initial Home Video
Street Date for the Picture is less than thirty (30) days prior to the end of
the calendar quarter, then One Hundred Percent (100%) of the Home Video Advance
shall be payable thirty (30) days following the end of the second calendar
quarter following LGF’s initial Home Video Street Date for the Picture.
     c. LGF’s “Distribution Fee” shall equal Fifteen Percent (15%) of One
Hundred Percent (100%) of all Gross Receipts received by LGF from the
exploitation of the Picture in all media throughout the Territory.
     d. As used herein, “Distribution Expenses” shall mean, with respect to all
rights granted to LGF hereunder, one hundred percent (100%) of the aggregate of
all actual, direct, out-of-pocket, third party costs expended or incurred by LGF
in direct connection with the distribution and exploitation of the Picture
throughout the Territory in all media, including, without limitation, all DLT
Creation Costs, and all conversion, manufacturing, duplication, shipping,
marketing, advertising, promotion and publicity costs, and all costs to complete
Delivery of the Picture (to the extent (i) LGF elects to cure any failure of
Grantor to complete Delivery of the Picture in accordance with the Delivery
Schedule and/or (ii) LGF is required to take “access” to any Delivery Materials
pursuant to the Delivery Schedule; and/or (iii) Grantor is not required to
deliver such elements under the Delivery Schedule). The Grantor P&A Commitment
shall not be included in Distribution Expenses hereunder.
     e. Home Video Marketing Expenses: Grantor and LGF shall mutually approve
the initial marketing budget for the initial Home Video exploitation of the
Picture in the Territory, which budget shall include the advertising,
duplication and DVD authoring, compression and replication costs (the “Approved
Marketing Budget”). LGF shall have the right to reallocate the subcategories
contained in the Approved Marketing Budget for the Picture and shall have the
right to spend up to ten percent (10%) above the Approved Marketing Budget.
Commencing as of the date that is twelve (12) months following LGF’s initial
Home Video Street Date for the Picture, LGF’s Home Video marketing expenses
shall not exceed an amount that is equal to twelve percent (12%) of the Gross
Receipts received by LGF from the exploitation of the Home Video Rights in and
to the Picture.

 

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     f. DLT Creation Costs: As used herein, the term “DLT Creation Costs” shall
mean and include 100% of LGF’s actual, direct, out-of-pocket, third party costs
of creating the Digital Linear Tape (“DLT”) for the Picture, including, without
limitation, DVD mastering and authoring costs, manufacturing, duplication, and
shipping and clearance costs (including, without limitation, the cost of
clearing “bonus” materials for such DVD).
8. Delivery: Grantor shall Deliver, at Grantor’s sole cost and expense, all
Delivery Materials set forth in the Delivery Schedule that are required to
constitute complete Delivery on or before September 30, 2005 (the “Delivery
Date”). If any of the Delivery Materials are incomplete or fail to meet LGF’s
technical requirements, LGF shall notify Grantor in writing specifying the
defects in the Delivery Materials (the “Defect Notice”). Such Defect Notice
shall be delivered within forty-five (45) days of LGF’s receipt of all Delivery
Materials set forth in the Delivery Schedule. Grantor shall have fifteen
(15) days from its receipt of the Defect Notice in which to cure the defects set
forth therein (the “Delivery Cure Period”). If Grantor fails to cure the defects
set forth in the Defect Notice prior to the expiration of the Defect Cure
Period, then, without limitation to LGF’s other available rights and remedies,
LGF shall have the option in its sole discretion to (A) secure acceptable
replacement materials and deduct the costs thereof from Grantor’s Participation,
or any other monies owing to Grantor pursuant to this Agreement, or (B)
determine that it is economically prohibitive or otherwise unfeasible to secure
acceptable replacement materials and, as a result, terminate this Agreement upon
written notice to Grantor. In the event that LGF elects to terminate this
Agreement, LGF shall be (I) relieved of its obligations hereunder, and
(II) Grantor shall reimburse LGF for all of LGF’s out-of-pocket costs
theretofore incurred by LGF under this Agreement. Without limitation to those
requirements set forth in the Delivery Schedule, all documents required to be
Delivered to LGF pursuant to the Delivery Schedule shall be Delivered in the
English language.
     a. Running Time: The Picture shall be Delivered to LGF have a running time
of not less than ninety (90) minutes, nor more than one hundred ten
(110) minutes, inclusive of main and end titles.
     b. Rating: The Picture shall be delivered to LGF having been judged to
receive a rating by the M.P.A.A. that is no more restrictive than “R”.
9. Credits; Editing: LGF shall have the right to cut, edit, change or add to,
delete from or revise the Picture, including the title, for M.P.A.A. rating
purposes, to conform the Picture to LGF’s marketing campaign and for any other
reason as LGF may in its sole discretion determine. Subject only to Grantor’s
third party contractual restrictions delivered to LGF, Grantor’s credit, and/or
any guild restrictions which Grantor has informed LGF are applicable to the
Picture in writing not later than the Delivery Date. LGF may, in its sole
discretion, determine and arrange the placing and size of credits including
credits above the title and/or above the artwork title. Without limiting the
generality of the foregoing, LGF shall have the right to place its name and logo
on all materials concerning the Picture in the Territory, including, without
limitation, in the main and end credits of the Picture (e.g., LGF’s customary
presentation credit), in the billing block, and on all advertising materials. It
is the essence of this Agreement that Grantor Deliver written notice of all
credit, name and likeness obligations and restrictions and all third party

 

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contractual approval and consultation rights to LGF in writing on or before the
Delivery Date. Without limiting the generality of the foregoing, in the event
that a performer or other agreement containing a credit, name and/or likeness
provision or approval or consultation right is unexecuted as of such Delivery
Date, then Grantor shall deliver the most recent draft of such agreement to LGF
and LGF shall have the right to rely thereon. Without limiting the generality of
the foregoing, in the event that a performer or other agreement containing a
credit, name and/or likeness and/or approval or consultation provision is
unexecuted as of the Delivery Date, then any and all contractual credit, name
and likeness obligations and restrictions and approval rights negotiated after
such Delivery Date must be approved by LGF in writing prior to Grantor entering
into any agreement with respect thereto. LGF shall not remove any credit or
copyright notice appearing on screen as the Picture is Delivered to LGF except
as follows: (i) to comply with a court order or the order of an arbitrator or
mediator, (ii) as required in settlement of a dispute, or (iii) as required by
law. No casual or inadvertent failure by LGF or any third party to comply with
any credit, name or likeness obligation or restriction, or to comply with any
approval or consultation right, shall be deemed a breach of this Agreement,
provided that LGF takes all commercially reasonable steps to cure such failure
on a prospective basis commencing on LGF’s receipt of written notice thereof.
The sole remedy of Grantor for a breach of any of the provisions of this
Paragraph 9 shall be an action at law for compensatory damages, it being agreed
that in no event shall Grantor be entitled to consequential or punitive damages,
or to seek or obtain injunctive relief, specific performance, or any other form
of equitable relief, by reason of any breach or threatened breach of any of the
credit, name, likeness or other obligation or restriction or approval or
consultation right, nor shall Grantor be entitled to enjoin or restrain the
exhibition, distribution, marketing, advertising, promotion, or other
exploitation of the Picture.
10. Holdbacks: LGF shall control the release dates of the Picture by means of
the Home Video Rights as well as all television exhibition in Mexico (in the
English and Spanish languages): provided that Grantor’s distributor(s) of the
Picture in Mexico shall each be entitled to release the Picture day and date
with LGF’s initial commercial release of the Picture in like media in the
Territory. When applicable, LGF shall also control the wholesale and suggested
retail price of the distribution of the Picture by means of the Home Video
Rights in Mexico (in the English and Spanish languages): provided that Grantor’s
distributor(s) of the Picture in Mexico shall each be entitled to release the
Picture by means of the Home Video Rights at the same price point as LGF’s
release of the Picture in the Territory. Grantor shall use all reasonable good
faith efforts to cause the distributor(s) of the Picture in Mexico to each
confirm in writing its acknowledgement of such holdback and price restrictions.
11. Grantor’s Representations and Warranties: Grantor represents and warrants as
of the date hereof and also upon Delivery of the Picture that: (a) there are no
non-customary credit, name or likeness obligations or restrictions or approval
or consultation rights applicable to the Picture (all of which, if any, shall be
Delivered to LGF in writing on or before the Delivery Date and LGF shall have
the right to rely thereon) and that LGF shall have the right, but not the
obligation, to utilize the likeness and name of each of the principal cast
members in the artwork and in trailers for the Picture: (b) Grantor owns or
controls all Rights granted to LGF under this Agreement and that all such Rights
are free of all liens, claims, charges, encumbrances, restrictions, and
commitments; (c) there is no agreement concerning the Picture with any person or
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could in any way impair, interfere with, abrogate or adversely or otherwise
affect any of the Rights granted to LGF under this Agreement: (d) LGF’s
exploitation of the Picture will not be subject to any guild (e.g., WGA. DGA,
and SAG) liens, or residuals; (e) it is a corporation duly formed and validly
existing in good standing under the laws of California and has the full right,
power, legal capacity and authority to enter into and carry out the terms of
this Agreement: (f) neither the Picture, nor any part thereof, nor any materials
contained therein or synchronized therewith, nor the title thereof, nor the
exercise of any Right, license or privilege granted to LGF hereunder, violates
or will violate, or infringes or will infringe, any trademark, trade name,
service mark, patent, copyright (whether common law or statutory), or, to the
best of Grantor’s knowledge, the literary, dramatic, musical, artistic,
personal, private, civil, “droit moral” or property right or rights of privacy
or any other right of any person or entity whatsoever, or unfairly competes with
or slanders or libels (or constitutes a trade disparagement of) any person or
entity whatsoever; (g) it has no agreement with or obligations to any third
party with respect to the Picture which might conflict or interfere with any of
the provisions of this Agreement or the use or enjoyment by LGF of any of the
Rights granted; (h) the Rights granted to LGF herein have not been previously
granted, licensed sold, assigned, transferred, conveyed or exploited by any
person or entity and Grantor shall not sell, assign, transfer, convey to or
authorize any person or entity any right, title or interest in and to the
Picture or any part thereof or in and to the dramatic or literary material upon
which the Picture is based, which is adverse to or in derogation of the Rights
granted to LGF; (i) there is no litigation, arbitration, claim, demand, or
investigation pending or threatened with respect to the Picture, or the
literary, dramatic or musical material upon which the Picture is based or which
is contained therein, or concerning the physical properties thereof; (j) Grantor
has secured, or by the Delivery Date will have secured, and shall for the
duration of this Agreement maintain, all clearances (including, without
limitation, all music rights and music clearances) which arc necessary for LGF
to use and enjoy the Rights granted to LGF in and to the Picture throughout the
Territory for the duration of the Term and that no supplemental or additional
use payments shall be required with respect to the exploitation of the Picture
(or any portion or element thereof, including, without limitation, the music
contained therein) and/or any use or exploitation of any advertising or
promotion of the Picture which contains the music as embodied in the Picture
(including “in-context” uses thereof): and (k) Grantor is in all respects in
compliance with the requirements of the Child Protection and Obscenity
Enforcement Act of 1988, as amended by the Child Protection Restoration and
Penalties Enhancement Act of 1990, and all rules and regulations promulgated
thereunder (collectively, the “CPOEA”) and that the Picture is in all respects
in compliance with the requirements of the CPOEA, and does not contain any
material that would require Grantor to comply with the recordkeeping
requirements of the CPOEA,
12. Indemnities:
          a. Grantor shall indemnify, defend and hold harmless LGF, its parent,
subsidiaries, affiliates, assignees, licensees, sublicensees, distributors,
sub-distributors and dealers, and the directors, officers, agents, consultants
and representatives of the foregoing (the “LGF Indemnitees”), from all claims,
costs, liabilities, obligations, judgments or damages (including reasonable
outside attorneys’ fees but excluding lost profits and consequential damages),
arising out of or for the purpose of avoiding any suit, claim, proceeding or
demand or the settlement thereof, which may be brought against any of the LGF
Indemnitees by reason of the actual or

 

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proposed production of the Picture, or the use or disposition of rights granted
herein, or in connection with the breach of any of the warranties,
representations or obligations made by Grantor, unless resulting from a breach
of this Agreement by LGF.
          b. LGF shall indemnify, defend and hold harmless Grantor, its parent,
subsidiaries, affiliates, assignees, and the directors, officers, agents,
consultants and representatives of the foregoing (the “Grantor Indemnitees”),
from all claims, costs, liabilities, obligations, judgments or damages
(including reasonable outside attorneys’ fees but excluding lost profits and
consequential damages), arising out of or for the purpose of avoiding any suit,
claim, proceeding or demand or the settlement thereof, which may be brought
against any of the Grantor Indemnitees by reason of the distribution,
advertising or promotion of the Picture, or in connection with the breach of any
of the warranties, representations or obligations made by LGF, except to the
extent that LGF is required to be indemnified by Grantor in accordance with
paragraph 12(a) hereinabove.
          c. The parties hereto shall meaningfully consult with each other with
respect to the defense, institution or settlement of litigation in connection
with the rights granted hereunder and LGF’s exploitation thereof during the Term
and in the Territory.
13. Reporting Periods: Following exploitation by LGF of the rights granted
herein, customary reporting shall be rendered to Grantor quarterly for the
duration of the Term. Statements and payments shall be delivered to Grantor
simultaneously and shall be delivered within ninety (90) days of each reporting
period.
14. Audit Rights: Grantor shall have the right to have a certified public
accountant of its choice audit LGF’s books and records with respect to the
Picture(s) once per year (and only once with respect to any particular records
and/or statements) at Grantor’s sole cost and expense: such audit shall take
place in LGF’s principal place of business and shall not unreasonably interfere
with LGF’s course of business. Said audit shall be conducted at LGF’s principal
place of business during normal business hours. Grantor shall give LGF ten
(10) business days prior written notice of its intent to conduct such audit. All
notices, statements and payments made pursuant to the Agreement shall be deemed
valid and shall not be subject to dispute or audit unless disputed within
twenty-four (24) months after first issued. In the event that an audit reveals
(i) an underpayment of seven and one-half percent (7.5%) or more of the total
monies owed; (ii) the underpayment is seven thousand five hundred dollars
($7,500.00) or more, and (iii) the amount of the audit is reasonable and
customary and does not exceed the amount of the underpayment, then LGF shall pay
Grantor the amount of the underpayment plus the reasonable, actual, direct,
out-of-pocket, third party costs of the audit up to the amount of the
underpayment.
15. Assignment: LGF may grant, assign or sublicense this Agreement or any of its
rights or obligations herein to any third party: provided that LGF shall remain
primarily liable for its obligations hereunder unless such assignment is to
(i) a parent, subsidiary or affiliated entity of LGF, (ii) a company that
acquires all or substantially all of LGF’s assets, and/or (iii) is to a “major”
or “mini-major’’ studio, and, in any event, provided that LGF shall remain
secondarily liable for its payment obligations hereunder. Grantor shall not
assign this Agreement or any of

 

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their rights or obligations herein except that after Delivery of the Picture is
accepted by LGF. Grantor shall have the right to assign its right to receive
payment on three (3) occasions in bulk during the Term. Any purported assignment
in violation of this Agreement shall be null and void.
16. No Third Party Beneficiaries: Nothing contained in this Agreement shall be
construed so as to create any third party beneficiary hereunder. In this regard,
nothing under this Agreement shall entitle any third party to any remedies
against LGF, at law, in equity, or otherwise, including, without limitation, any
additional audit rights or the right to seek or obtain injunctive relief against
LGF’s distribution of the Picture.
17. Default: If Grantor defaults (or breaches a material representation and
warranty), which default remains uncured for fifteen (15) business days
following Grantor’s receipt of LGF’s written notice to Grantor thereof, LGF
shall be entitled to terminate this Agreement. In the event that Grantor fails
to fully Deliver the Delivery Materials set forth in the Delivery Schedule,
which failure is not timely cured, LGF may create such Delivery Materials, the
reasonable, actual, out-of-pocket cost of which shall be recoupable by LGF, in
LGF’s sole discretion, as (i) as a Distribution Expense, and/or (ii) from any
other monies (e.g. Grantor’s Participation, bonuses, etc.) which are then due
and owing to Grantor, LGF’s rights and remedies shall be cumulative, and none of
them shall be exclusive of any other allowed by law. If LGF defaults, Grantor
shall not be entitled to terminate or rescind this Agreement, nor to obtain
injunctive relief with respect to the exercise by LGF of the rights granted
hereunder and Grantor further waives all rights to seek and recover punitive
damages; Grantor’s sole remedy shall be an action at law for damages.
Notwithstanding the foregoing, LGF shall not be entitled to seek or obtain
injunctive or equitable relief with respect to the exploitation of the Picture
outside the Territory.
18. Governing Law; Jurisdiction: This Agreement shall be construed and
interpreted pursuant to the Laws of the State of California as it applies to
contracts entered into and performed wholly within California or, if
appropriate, the federal laws of the United States of America. Any dispute
regarding the validity, construction, terms or performance of this Agreement or
any other matter in connection therewith shall be submitted to binding
arbitration before the JAMS in Los Angeles. California in accordance with the
following provisions:
          a. If the parties cannot agree upon a single arbitrator, each party
shall select one arbitrator who has experience in the motion picture industry
and both arbitrators so selected shall select a third arbitrator.
          b. The third arbitrator shall adjudicate the dispute applying the laws
of the state of California as it applies to contracts entered into and wholly
performed within California or, if appropriate, the federal laws of the United
States of America.
          c. The arbitrator shall issue a written opinion specifying the basis
for their award and the types of damages awarded.

 

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          d. There shall be a court reporter record made of the arbitration
hearing and said record shall be the official transcript of the proceedings.
          e. Witness lists, production of documents and subpoenas in the
arbitration shall be in accordance with Section 1280 et seq. of the California
Code of Civil Procedure, except that the fifteen (15) day periods set forth in
subsections (a)(2)(A) and (B) of Section 1282.2 shall be deemed to be periods of
five (5) business days. If the dispute pertains to Delivery, there shall be made
available to the arbitrator all relevant materials submitted by LGF or Grantor
which purport to constitute completion and delivery of the Picture. The parties
shall participate in an exchange of information before the hearing. If any such
discovery is not voluntarily exchanged among the parties, the party desiring
such discovery may apply to the arbitrator at the outset of the arbitration for
particular discovery requests. The arbitrator may deny only such discovery as is
unreasonable or is intended to unduly delay the prompt conclusion of me
arbitration.
          f. The decision of the arbitrator (or the majority of the arbitrators,
if applicable) shall be binding upon the parties, shall constitute a full and
final adjudication of the controversy. The parties shall each be responsible for
paying fifty percent (50%) of all the arbitrator’s and court reporter’s fees
(including, without limitation, the cost of the arbitration), unless the
arbitrator for the majority of the arbitrators, if applicable) decides
otherwise. A judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
     This Agreement (inclusive of Schedule “A”, Exhibit “A” and Exhibit “C”),
when executed, is legally binding unless and until superseded by a more formal
agreement incorporating the terms set forth above as well as additional
provisions, which when and if executed, shall replace this Agreement,
Capitalized terms used herein and not otherwise defined shall have the same
meaning as in LGF’s standard long-form agreement, subject to good faith
negotiations in accordance with LGF’s and Grantor’s standard business practices.
All items not addressed above shall be negotiated in good faith pursuant to
prevailing industry customs and standards and LGF’s and Grantor’s standard
business practices. This Agreement may not be changed, modified, amended or
supplemented, except in a writing signed by both parties.
AGREED TO AND ACCEPTED BY:

         
LIONS GATE FILMS INC.
  SOBINI FILMS    
 
       
/s/ Wayne Levin
  /s/ Jill Courtemanche    
 
Signature
 
 
Signature       Wayne Levin   Jill Courtemanche    
 
Print Name  
 
Print Name       EVP & General Counsel   Attorney    
 
Title  
 
Title      
3/14/06
  12/19/05    
 
Date
 
 
Date