Document:

Exhibit 10.2

Exhibit 10.2

SECURED PROMISSORY NOTE

			
	 	 	 
	$2,500,000
	 	April 14, 2010

FOR VALUE RECEIVED, the undersigned, IRVINE SENSORS CORPORATION, a Delaware corporation
(“Maker”), promises to pay to the order of Timothy Looney (“Payee”), whose address
is set forth on Schedule I attached hereto, the sum of Two Million Five Hundred Thousand Dollars
($2,500,000), together with simple interest on the unpaid principal balance from time to time
remaining at a rate per annum (calculated on the basis of actual days elapsed, but computed as if
each calendar year consisted of 365 days) which shall be equal to 10%.

The principal balance of this note and accrued interest thereon shall be due and payable as
provided on Schedule I attached hereto. All payments due hereunder shall be made by wire transfer
of immediately available funds to the account and pursuant to the wire transfer instructions set
forth on Schedule I hereto or such other account as Payee may direct in writing provided that such
other wire transfer instructions are received by Maker at least five Business Days (hereinafter
defined) prior to any payment date set forth on Schedule I. Except for prepayments of principal
made pursuant to paragraph 1 below, all amounts paid hereunder shall be applied first to accrued
and unpaid interest and then to principal.

All past due payments on this note shall bear simple interest from their respective due dates
(stated or by acceleration) until paid at the rate of 18% per annum (the “Default Rate”).

1. Prepayments. The unpaid principal balance of this note may be prepaid by Maker in
whole or in part at any time without premium or penalty and if the unpaid principal balance of this
note is prepaid in full on or before the date that is 18 calendar months after the date hereof, the
original principal of this note shall be reduced to $2,450,000, and accordingly, the total amount
that Maker shall be required to pay in order to pay this note in full shall be reduced by $50,000.
Any prepayment in full of the unpaid principal balance of this note shall be accompanied by the
payment of all accrued and unpaid interest on this note.

2. Settlement Agreement. This note and the Security Agreement (hereinafter defined)
are being executed and delivered pursuant to that certain Settlement Agreement and Release (the
“Settlement Agreement”) dated as of March 26, 2010, between Maker, Payee and certain other
parties. Reference is made to the Settlement Agreement for certain terms and conditions governing
this note and the Security Agreement.

3. Collateral. The payment of this note is secured by the liens and security
interests created by that certain Security Agreement (the “Security Agreement”) dated as of
the date hereof, executed by Maker in favor of Payee. The term “Collateral” shall have
such meaning as set forth in the Security Agreement.

4. Representations and Warranties. Maker represents and warrants to Payee as of the
date hereof as follows:

(a) Existence, Etc. Maker is a corporation validly existing and in good
standing under the laws of the State of Delaware and is qualified to do business and is in
good standing in California.

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(b) Power and Authority. Maker has all requisite corporate power and
authority to own or lease its properties, to conduct its business as now conducted and to
execute, deliver and perform this note, the Security Agreement, the Settlement Agreement,
or any other document or instrument executed and delivered in connection herewith
(collectively the “Loan Documents”).

(c) Authorization and Enforceability. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate action of Maker
and, except as described in the Settlement Agreement, require no consent of any person,
entity or governmental authority that has not been obtained, and the Loan Documents
constitute valid and binding obligations of Maker, enforceable in accordance with their
terms, except as such enforceability may be limited by Debtor Relief Laws (hereinafter
defined) and by general principles of equity.

(d) No Violation. The execution, delivery and performance of the Loan
Documents do not and will not violate Maker’s charter or bylaws, any laws applicable to
Maker or, subject to the receipt of certain consents as described in the Settlement
Agreement, any agreement to which Maker is a party or by which Maker is bound, except for
violations of laws or agreements that would not have a material adverse effect on the
business, operations or financial condition of Maker or on the ability of Maker to perform
or comply with the terms and conditions of the Loan Documents (such a material adverse
effect being herein called a “Material Adverse Effect”).

(e) Financial Statements. The financial statements of Maker contained in its
Annual Report on Form 10-K for the fiscal year ended September 27, 2009, and its Quarterly
Report on Form 10-Q for the fiscal quarter ended December 27, 2009, each which has been
filed with the Securities and Exchange Commission, have been prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”) and fairly presents the
financial condition and results of operations of Maker in all material respects as of the
dates thereof and for the periods covered thereby.

(f) Payments. Subject to the receipt of the consents as described in the
Settlement Agreement, all payments to be made by Maker under this note shall be made by
Maker with funds entitled to be paid to Payee by Maker, and none of such funds shall be
subject to any claim by any other person or entity.

(g) Indebtedness; Liens. As of the date hereof, (i) Maker has no indebtedness
secured by the Collateral except for the Permitted Debt and (ii) the assets of Maker are
subject to no liens or security interests except for liens or security interests securing
the Permitted Debt. As of March 26, 2010, (i) the outstanding balance on the Longview
Indebtedness (as hereafter defined), including accrued interest, was $172,263.92 and no
additional Longview Indebtedness has been incurred since such date (other than accrued
interest) and (ii) the outstanding balance on the Summit Indebtedness (as hereafter
defined), including accrued interest, was $377,024.05.

5. Covenants. Unless and until this note has been paid in full or Payee otherwise
agrees in writing, Maker agrees as follows:

(a) Financial Statements, etc. Maker will deliver to Payee, (i) as soon as
available, but in any event within 30 days after the end of each fiscal month, a company
prepared consolidated balance sheet and income statement of Maker as of the end of and for
such fiscal month; and (ii) as soon as available, but in any event not later than thirty
(30) days after the end of each fiscal month, company prepared reports of sales, backlogs,
accounts receivable and accounts payable of Maker as of the end of and for such fiscal
month; (iii) as soon as available,

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copies of all statements, reports and notices sent or provided by Maker to its
security holders or to any holders of its debt; (iv) promptly, if requested by Payee in
writing, copies of all Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission;

(b) Books and Records. Maker will keep its financial books and records in
accordance with GAAP and permit Payee to inspect and to discuss with its officers such
books and records and its properties and business operations during reasonable business
hours and upon reasonable advance notice to Maker.

(c) Existence and Qualification. Maker will maintain its corporate existence
and its qualification to do business and good standing in Delaware and California.

(d) Insurance. Maker will maintain insurance (including self insurance) in
such amounts with such deductibles, and against such risks as is comparable to Maker’s
existing coverage as of the date hereof.

(e) Dividends and Distributions. Maker will not make any cash dividend or
cash distribution on its capital stock (other than dividends that are required to be paid
on shares of the Maker’s preferred stock outstanding as of the date hereof), or redeem or
purchase any of its capital stock (other than pursuant to the terms of Maker’s equity
incentive plans in existence on the date hereof).

(f) Indebtedness. Maker will not incur or suffer to exist any indebtedness
for borrowed money that is secured by the Collateral or under capital leases or for the
purchase price of property, except for the following (the “Permitted Debt”): (i)
indebtedness owing to Longview Fund, L.P. (“Longview”) and/or Alpha Capital Anstalt as of
the date hereof as set forth in Section 4(g) above, together with interest as may be
accrued from time to time in connection with such indebtedness (collectively, the
“Longview Indebtedness”); (ii) indebtedness now, or in the future, owing to or held
by Summit Financial Resources, L.P. (the “Summit Indebtedness”) incurred by Maker
to factor or finance its accounts receivable; (iii) indebtedness evidenced by this note;
(iv) indebtedness under capital leases and other purchase money financings of capital
assets; (v) other indebtedness that is subordinated in right of payment to the indebtedness
evidenced by this note; and (vi) extensions, refinancings and renewals of any item above,
provided that with respect to item (i) above, the principal amount may not increased and
the terms may not be modified to impose more burdensome terms upon Maker.

(g) Liens. Maker will not incur or suffer to exist any liens or security
interests on any of the Collateral that are senior in priority to the security interest
granted to Payee under the Security Agreement, except (i) landlords’, carriers’,
warehousemen’s, mechanics’ and other similar liens arising by operation of law; (ii) liens
arising by operation of law out of pledge or deposits under worker’s compensation,
unemployment insurance, pension, social security, retirement benefits or other similar
legislation; (iii) liens securing the Longview Indebtedness, the Summit Indebtedness or any
Permitted Debt (provided that any liens or security interests securing Permitted Debt
described in clause (v) of Section 5(f) must be subordinate and junior to the liens and
security interests securing this note); (iv) liens for taxes not yet due or which are being
contested in good faith; (v) easements, rights of way, restrictions and other similar
charges or liens relating to real property; (vi) liens to secure purchase money financings
of capital assets provided that the liens only secure payment of the indebtedness so
incurred and extend only to the capital asset purchased or leased; (vii) liens existing on
the date of this note that are evidenced and perfected by the filing of financing statements with the Secretary of
State of Delaware; and (viii) liens renewing and extending liens permitted by this
subparagraph.

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(h) Sales of Assets. Maker will not sell any assets, except (i) sales of
inventory in the ordinary course of Maker’s business; (ii) dispositions of accounts
receivable pursuant to agreements evidencing and creating the Summit Indebtedness; (iii)
dispositions of obsolete or worn out equipment or equipment no longer used in its business;
(iv) sales of other equipment, provided such equipment is promptly replaced with equipment
of equal or greater value and utility to Maker), (v) licenses and similar arrangements for
the use of the property of Maker in the ordinary course of business or any outstanding
licenses existing as of the date hereof; (vi) the sale of any assets in connection with the
sale of all or substantially all of Maker’s business provided that either (A) the buyer of
such assets agrees in writing to be bound by all of Maker’s obligations under this Note and
the other Loan Documents; or (B) Payee consents to such sale; and (vii) any other
dispositions of assets of Maker that do not in the aggregate exceed $200,000 during any
fiscal year.

(i) Fundamental Changes. Maker will not liquidate or dissolve or merge or
consolidate with any other person or entity other than a merger or consolidation in which
(i) the surviving entity assumes all of Maker’s obligations hereunder and the other Loan
Documents or (ii) all principal then outstanding and all accrued interest under this note
shall be repaid at the closing of such merger or consolidation.

(j) Compensation. Unless and until there are two consecutive fiscal quarters
ending after the date of this note for which Maker has positive income from continuing
operations, Maker will not cause or permit the aggregate compensation in whatever form paid
by Maker or any of its subsidiaries to John C. Carson or John J. Stuart to be in an amount
in excess of the aggregate compensation in whatever form paid by Maker or any of its
subsidiaries to each such person during or in respect of the fiscal year of Maker ended
September 27, 2009.

6. Default and Remedies. Any one or more of the following events or occurrences shall
constitute a default (a “Default”) under this note:

(a) The failure or refusal of Maker to make any payment on this note as and when same
becomes due and payable in accordance with the terms hereof, and such failure or refusal is
not cured within five (5) Business Days after notice of such failure or refusal is given to
Maker in accordance with Paragraph 10 below; or

(b) A material breach by Maker of any provision of this note or any other Loan
Document, including any representation or warranty contained herein or therein, and, if
such breach is capable of being cured by Maker, such breach is not cured by Maker within
thirty (30) days after notice of such breach is given to Maker in accordance with Paragraph
10 below; or

(c) Maker shall (i) voluntarily seek consent to, or acquiesce in the benefit or
benefits of any Debtor Relief Law, or (ii) be made the subject of any proceeding provided
for by any Debtor Relief Law that could suspend or otherwise affect any of the rights of
the holder hereof. As used herein, “Debtor Relief Laws” means the Bankruptcy Code of the
United States, as amended and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization or similar
debtor relief laws from time to time in effect affecting the rights of creditors generally;
or

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(d) (i) The occurrence of a default or event of default under any indebtedness that is
secured by the Collateral; provided, however, that in the case of the Longview Indebtedness
or the Summit Indebtedness, Maker shall have also received notice of such default or event
of default; or (ii) any action is taken by any secured creditor to foreclose on or
otherwise proceed against any of the Collateral; or

(e) Any action is taken against any of the Collateral in connection with any money
judgment, writ, or similar final process that has been entered or filed against Maker or
any of the Collateral.

Upon the occurrence of a Default, the holder of this note may (a) by written notice to Maker,
declare the entire unpaid principal balance of this note, together with any accrued and unpaid
interest, immediately due and payable, (b) offset against this note any sum or sums owed by the
holder hereof to Maker, (c) foreclose any or all liens or security interests given to secure the
repayment of the indebtedness evidenced by this note, (d) proceed to protect and enforce its rights
either by suit in equity and/or by action at law, or by other appropriate proceedings, whether for
the specific performance of any covenant or agreement contained in this note or any other Loan
Document or in aid of the exercise of any power or right granted by this note or any other Loan
Document or to enforce any other legal or equitable right of the holder of this note or any other
Loan Document and (e) exercise any other rights or remedies available under the Settlement
Agreement.

7. Cumulative Rights. No delay on the part of the holder of this note in the exercise
of any power or right under this note, or under any other Loan Document, shall operate as a waiver
thereof, nor shall a single or partial exercise of any other power or right. Enforcement by the
holder of this note of any security for the payment hereof shall not constitute any election by it
of remedies so as to preclude the exercise of any other remedy available to it.

8. Waiver. Maker, and each other surety, endorser, guarantor, and other party ever
liable for the payment of any sum of money payable on this note, jointly and severally waive
demand, presentment, protest, notice of nonpayment, notice of intention to accelerate, notice of
acceleration, notice of protest, and any and all lack of diligence or delay in collection or the
filing of suit hereon which may occur, and agree that their liability on this note shall not be
affected by any renewal or extension in the time of payment hereof, by any indulgences, or by any
release or change in any security for the payment of this note, and hereby consent to any and all
renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals,
extensions, indulgences, releases, or changes.

9. Attorneys’ Fees and Costs. In the event a Default shall occur, and in the event
that thereafter this note is placed in the hands of an attorney for collection or in the event this
note is collected in whole or in part through legal proceedings of any nature, then and in any such
case Maker promises to pay all costs of collection, including, but not limited to, reasonable
attorneys’ fees incurred by the holder hereof on account of such collection, whether or not suit is
filed.

10. Notices. Any notice or demand given hereunder shall be deemed to have been given
and received (a) when actually received by the recipient, if delivered in person or by courier or
messenger, or (b) five (5) Business Days (hereinafter defined) after a letter containing such
notice, certified or registered, with postage prepaid, addressed to the recipient, is deposited in
the United States Mail. The address of Maker is 3001 Red Hill Avenue, Building 4, Suite 108, Costa
Mesa, California 92626 or such other address as Maker shall advise Payee by notice given pursuant
hereto, and the address of Payee is set forth on Schedule I.

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11. Governing Law; Jurisdiction; Waiver of Jury Trial. This note is being executed
and delivered and is intended to be performed, in the State of California, and the laws of such
state shall govern the construction, validity, enforcement and interpretation hereof, except to the
extent federal laws otherwise govern the validity, construction, enforcement and interpretation
hereof. TO THE EXTENT ALLOWED BY LAW, MAKER AND PAYEE EACH WAIVE JURY TRIAL IN ANY ACTION OR
PROCEEDING RELATING TO THIS NOTE.

12. Headings. The headings of the sections of this note are inserted for convenience
only and shall not be deemed to constitute a part hereof.

13. Successors and Assigns. All of the covenants, stipulations, promises and
agreements in this note contained by or on behalf of Maker shall bind its successors and assigns,
whether so expressed or not; provided, however, that Maker may not, without the prior written
consent of the holder hereof, assign any rights, duties, or obligations under this note.

14. Maximum Interest Rate. Regardless of any provision contained herein, or in any
other document executed in connection herewith, the holder hereof shall never be entitled to
receive, collect or apply, as interest hereon, any amount in excess of the maximum rate of interest
permitted to be charged from time to time by applicable law, and in the event the holder hereof
ever receives, collects or applies, as interest, any such excess, such amount which would be
excessive interest shall be deemed a partial prepayment of the principal hereof and treated
hereunder as such; and, if the principal hereof is paid in full, any remaining excess shall
forthwith be paid to Maker. In determining whether or not the interest paid or payable, under any
specified contingency, exceeds the highest lawful rate, Maker and the holder hereof shall, to the
maximum extent permitted under applicable law, (a) characterize any nonprincipal payment as an
expense, fee, or premium rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) spread the total amount of interest throughout the entire contemplated term
hereof; provided that if the indebtedness evidenced hereby is paid and performed in full prior to
the end of the full contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the maximum lawful rate, the holder hereof shall refund to Maker the
amount of such excess or credit the amount of such excess against the principal hereof, and in such
event, the holder hereof shall not be subject to any penalties provided by any laws for contracting
for, charging, or receiving interest in excess of the maximum lawful rate.

15. Business Day; Payments. As used herein, the expression (a) “Business Day”
means every day on which banks located in the States of Texas and California are generally open for
business, and (b) “Nonbusiness Day” means every day which is not a Business Day. Each
payment of the principal of or accrued interest on this note shall be due and payable in lawful
money of the United States of America. In any case where a payment of principal or interest hereon
is due on a Nonbusiness Day, Maker shall be entitled to delay such payment until the next
succeeding Business Day, but interest shall continue to accrue until the payment is, in fact, made.

16. Modifications in Writing. No waiver or modification of any of the terms or
provisions of this note shall be valid or binding unless set forth in a writing signed by Maker and
Payee, and then only to the extent therein specifically set forth.

17. Confidentiality. Payee agrees to maintain the confidentiality of (and not to
disclose) any information regarding Maker and its business and operations that is provided by Maker
or any of the directors, officers, employees, agents, attorneys and accountants (collectively, the
“Representatives”) of Maker to Payee pursuant hereto or any of the other Loan Documents
(the “Information”). The term “Information” includes, but is not limited to, Maker’s
financial information, results of operations, projections, prospects, products, technologies,
contract terms and negotiations, financings, strategies,

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books and records, and other proprietary, confidential or other non-public information about
or related to Maker or its business and operations, whether in written, verbal, visual, electronic
or other form.. The term “Information” shall not include information which (i) Payee can show was
already in the possession of Payee prior to disclosure by Maker or Maker’s Representatives and
which was not acquired or obtained from Maker or Maker’s Representatives, (ii) is or becomes
generally available to the public other than as a breach by Payee of this Section 17, or (iii)
becomes available to Payee on a non-confidential basis from a source other than Maker’s
Representatives, which source is not prohibited from transmitting the information to Payee by a
legal, contractual or fiduciary obligation to Maker. Notwithstanding the foregoing, nothing
contained herein shall prevent Payee from disclosing any Information (A) as may be required by
applicable law or by any subpoena or similar legal process; provided that Payee provides advance
written notice of such disclosure and limits the disclosure to the extent possible that which is
required to be disclosed, or (B) as may be necessary to exercise Payee’s remedies hereunder or
under any of Payee’s Loan Documents or any action or proceeding relating to this note or any of
Payee’s other Loan Documents; provided that Payee limits the disclosure to the extent possible that
is necessary to protect Payee’s rights under this Section 17, or (C) pursuant to the prior written
consent of Maker. The obligations of Payee contained in this Section 17 shall survive and continue
in effect for one year following the repayment in full or other termination of this note.

THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION
HEREWITH, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

[Remainder of Page Left Blank.

Signature Page Follows.]

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IN WITNESS WHEREOF, the undersigned has executed this note as of the day and year first above
written.

	 	 	 	 	 
	 	MAKER:

IRVINE SENSORS CORPORATION

 	 
	 	By:  	/s/ John J. Stuart, Jr.
 	 
	 	 	Name:  	John J. Stuart, Jr. 	 
	 	 	Title:  	Sr. Vice President & CFO 	 
	 

	 	 	 	 	 
	ACCEPTED AND AGREED:

PAYEE:

 	 	 
	/s/ Timothy Looney
 	 	 
	Timothy Looney 	 	 
	 	 	 
	 

Signature Page to Secured Promissory Note

 

 

 

Schedule I

Payment Schedule and Amount

The principal balance of this note and accrued interest thereon shall be due and payable on
the following dates and in the following amounts:

	 	 	 	 	 
	Payment Dates	 	Amount of Each Payment	 
	May 14, 2010, June 14, 2010 and July 14, 2010
	 	$	8,000	 
	August 14, 2010, September 14, 2010, October 14,
2010, November 14, 2010, December 14, 2010 and
January 14, 2011
	 	$	20,000	 
	February 14, 2011, March 14, 2011 and April 14, 2011
	 	$	35,333	 
	May 14, 2011, June 14, 2011, July 14, 2011, August
14, 2011, September 14, 2011 and October 14, 2011
	 	$	100,000	 
	November 14, 2011, December 14, 2011 and January
14, 2012
	 	$	150,000	 
	February 14, 2012, March 14, 2012 and April 14, 2012
	 	$	200,000	 
	May 14, 2012 and June 14, 2012
	 	$	300,000	 
	July 14, 2012
	 	Remaining principal balance and all accrued interest.

Address of Payee for Notices

4306 Savannah

Parker, TX 75002

Attn: Mr. Timothy Looney

Or such other address as Payee shall advise

Maker by notice given pursuant to this note

Initial Wire Instructions for Payee:

Name of Financial Institution: Bank of America, N.A.

ABA Routing No.: 111000025

Name on Account: Timothy W. Looney

Account No.: 0341510858

Schedule I to Secured Promissory Noteexv10w2

Exhibit 10.2

THE WEINSTEIN COMPANY

375 Greenwich Street, 3rd Floor

New York, New York 10013

Dated as of December 24, 2009

The Film Department LLC

8439 Sunset Blvd.
4
2nd Floor

West Hollywood, CA 90069

			
	     Re:	 	Amended and Restated Exclusive Output Distribution
Agreement

Dear Gentlepersons:

The following sets forth the terms of the agreement (this “Agreement”) between The Film Department
LLC, a limited liability company organized under the laws of the state of Delaware (inclusive of any of its
affiliated, subsidiary or related entities, herein collectively, “Licensor”) and The Weinstein Company
LLC (“TWC”) regarding the exclusive license of certain rights in and to certain feature motion pictures as
further set forth herein. For good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto hereby agree as follows:

This Agreement when fully executed shall supersede and replace the Term Sheet dated as of December 24, 2009 entered
into between TWC and Licensor.

1. Output Agreement/Pictures:

     (a) Eligible Pictures: “Eligible Pictures” shall have the meaning set forth on Schedule 1
attached hereto and incorporated herein.

     (b) Pictures: “Pictures” shall have the meaning set forth on Schedule 1 attached hereto and incorporated herein.

     (c) Rights: “Rights” shall have that meaning set forth on Schedule 1 attached hereto and
incorporated herein. Subject to the terms of Paragraph 1(d) below whereby Licensor is not required
to formally assign the Rights by delivery of the “Short Form Assignment” (as defined below) until the date set
forth in Paragraph 1(d) below, Licensor hereby grants TWC on an exclusive basis all Rights
in and to each Picture in the Territory for the duration of the “License Term” (as defined herein).

     (d) Conditions Precedent: On a Picture-by-Picture basis, all of TWC’s obligations hereunder with
respect to each Picture shall be subject to the following conditions (collectively, the “Conditions Precedent”): (i) TWC’s receipt and
approval of the chain of title to such Picture including without
limitation “Security Documents” (as defined herein) and a short form assignment in the form attached
hereto and incorporated herein as Exhibit A (“Short Form Assignment”), which shall be provided by
Licensor to TWC promptly upon TWC’s request provided that Licensor shall not be required to deliver a
Short Form Assignment for a Picture until the earlier of (x) the date on which Licensor first provides
TWC with a “Release Date Notice” (as defined herein) for such Picture and (y) six (6) months prior to
the scheduled Initial Theatrical Release date for such Picture; and (ii) TWC’s receipt from Licensor, no
later than the date that is one hundred twenty (120) days prior to the Initial Theatrical Release of a

	 	 	 	 	 
	

	 	-1-
	 	 

 

    Picture, of 100% of the amount of “P&A Budget”
    (as defined herein) for such Picture or TWC’s receipt from
    Licensor of such other financial assurances to secure TWC’s
    receipt of the amount of the P&A Budget (in a form
    acceptable to TWC in its sole discretion) for the full amount of
    such P&A Budget (“Funding Condition
    Precedent”). Notwithstanding the foregoing or anything
    else to the contrary in this Agreement, the parties acknowledge
    and agree that on a
    Picture-by-Picture
    basis, the actual “licensor” to TWC of the Rights set
    forth herein may be a single purpose company which contains no
    assets other than the applicable Picture
    (“SPC”), and in such event, Licensor shall
    cause the SPC to execute the Short Form Assignment in lieu
    of Licensor provided that the SPC agrees in writing to be bound
    by all of the terms, conditions and obligations hereof and
    provided further that Licensor shall remain liable hereunder
    with respect to all Pictures.

 

    (e) Right of Withdrawal: TWC shall have the right to
    notify Licensor at any time that any Eligible Picture or Picture
    is withdrawn from TWC’s Pay Television Service for legal or
    liability reasons as reasonably determined by TWC in TWC’s
    good faith judgment. If TWC notifies Licensor of such
    withdrawal, the applicable provisions of TWC’s Pay TV
    license agreement then in-effect shall apply to such Eligible
    Picture
    and/or
    Picture, and the rights and obligations of the parties under
    this Agreement shall be adjusted accordingly. For purposes of
    clarification, upon the expiration of the rights of TWC’s
    Pay Television Service in a Picture following a withdrawal, the
    License Term in the Pay TV Rights shall expire, and TWC’s
    Pay TV Rights in such Picture shall also terminate (and
    TWC’s lien solely in the Pay TV Rights for such Picture
    shall terminate; provided that TWC shall remain entitled to
    receive its fee on any Pay TV GR for such Picture).

 

    (f) Development Schedules: Licensor shall provide
    TWC throughout the Term, on a no-less-than monthly basis, with
    detailed schedules of properties in development or which have
    been acquired by Licensor and which are intended to be or which
    may become an Eligible Picture hereunder. Such schedules shall
    include all information relevant to TWC as distributor regarding
    each such property including, without limitation, tentative
    title and underlying rights (including without limitation drafts
    of treatments
    and/or
    screenplays), key creative attachments, and development or
    production status (including without limitation greenlight date,
    actual or scheduled commencement of principal photography date,
    and scheduled Initial Theatrical Release date).

 

    2. Term/License Term: The term of this Agreement
    shall commence as of January 1, 2010 and continue for four
    (4) years (i.e., through December 31, 2013) (the
    “Term”). The “License Term” for each
    Picture shall have that meaning set forth in Schedule 1
    attached hereto and incorporated herein.

 

    3. Territory: the United States, the Bahamas,
    Bermuda and Caribbean Basin, and their respective territories
    and possessions, including, without limitation, Guam, Puerto
    Rico, the U.S. Virgin Islands, the Caroline Islands,
    American Samoa, Northern Marianas Islands and Wake Islands
    (collectively, the “Territory”). TWC’s
    Theatrical Rights and Free Television Rights in the Bahamas and
    Bermuda shall be on a non-exclusive basis. TWC’s rights in
    the Caribbean Basin shall be limited solely to the Pay TV Rights
    and shall be on a non-exclusive basis.

 

    4. Creative Rights: With respect to each Picture,
    the parties shall have the approval and consultation rights set
    forth in Schedule 2 attached hereto and incorporated herein
    by this reference.

 

    5. Theatrical Exploitation:

 

    (a) Marketing Materials and Costs: Subject to the
    terms of Paragraph 4 above, Licensor shall be responsible
    for creating, at its sole cost and expense, all marketing
    materials for each Picture

 

	 	 	 	 	 
	

	
 
	
   -2-
	
 
	
 

 

 

    (including without limitation, all trailers, teasers, posters,
    key art, etc.) and for delivering the same to TWC as part of
    Delivery. Subject to the terms of Paragraph 4 above,
    Licensor shall be responsible for creating each Picture a media
    plan (“Media Plan”), P&A budget which
    shall include 100% of the P&A Costs for each Picture
    (“P&A Budget”) and P&A cashflow
    schedule (“P&A Cashflow”). Licensor shall
    be responsible for providing in advance and paying for 100% of
    all “P&A Costs” for each picture as set forth in
    Paragraph 1(d)(ii), above (i.e, “P&A
    Costs” means all marketing, advertising, publicity,
    promotion and releasing costs, charges and expenses incurred in
    connection with the theatrical release of the Picture,
    including, without limitation, the cost to test the Picture, buy
    media, rate the Picture, create prints, television spots,
    trailers, posters and all other artwork, and P&A Costs
    expressly exclude any TWC overhead). Provided that the
    Conditions Precedent have been satisfied, TWC shall exploit the
    Theatrical Rights in each Picture pursuant to the Media Plan,
    P&A Budget and P&A Cashflow for such Picture,
    including, without limitation, (i) booking theaters (including
    so-called “holdovers”) and buying media for each
    Picture, (ii) collecting from, and settling with,
    exhibitors using TWC’s reasonable good faith commercial
    efforts to obtain settlement rates favorable to Licensor; (iii)
    using reasonable good faith commercial efforts to place posters
    and trailer for the Pictures in theaters that will be exhibiting
    the Pictures; (iv) discussing box office reports and TWC’s
    analysis of same with Licensor using TWC’s good faith
    business judgement; (v) having weekly conference calls and/or
    meetings with Licensor to discuss distribution matters related
    to the Eligible Pictures and Pictures; and (vi) using TWC’s
    reasonable good faith commercial efforts to provide Licensor
    with prompt access to the relevant information contained in
    TWC’s real-time computerized box-office reporting and NRG
    tracking. For the avoidance of doubt, TWC shall not be required
    under any circumstances to expend funds out of pocket or on
    TWC’s own account for the distribution of any Picture.

 

    (b) Media Plan: With respect to the implementation
    of the Media Plan for each Picture, Licensor shall set up an
    account (“Licensor Agency Account”) for each
    Picture with Palisades Media or such other electronic (i.e.
    television, radio and internet) media buying agent as designated
    by TWC (“Media Agency”). Provided that no later
    than the satisfaction of the Funding Condition Precedent for
    such Picture Licensor has (i) created the Licensor Agency
    Account and obtained the Media Agency’s written approval
    with respect to the terms of this Paragraph 5(b) (including
    Media Agency acknowledgement of the last sentence of this
    subparagraph (b)) and (ii) provided the Licensor Agency Account
    details to TWC, notwithstanding anything to the contrary set
    forth herein, in lieu of Licensor paying TWC or providing other
    financial assurances acceptable to TWC for that portion of the
    P&A Costs that are allocated in the P&A Budget to be
    spent on a Media Agency (“Media Spend”), TWC
    shall book all electronic media (in accordance with the Media
    Plan, P&A Budget and P&A Cashflow) for such Picture
    directly with the Media Agency, but shall charge the entire
    Media Spend to the Licensor Agency Account which shall then be
    payable directly and solely by Licensor. Licensor acknowledges
    and agrees that if the Licensor Agency Account is timely created
    as set forth in this Paragraph 5(b), than TWC shall have no
    obligation to pay and no liability in connection with the Media
    Spend, Media Agency and/or the Licensor Agency Account, and,
    provided that TWC has billed the Media Spend to the Licensor
    Agency Account in accordance with the P&A Cashflow and
    P&A Budget, Licensor does not hereby indemnify and
    hold TWC harmless with respect to any claims regarding each
    Media Spend, Media Agency, and/or Licensor Agency Account.

 

    (c) Initial Theatrical Release Date: Notwithstanding
    anything to the contrary set forth herein, Licensor shall
    provide TWC with at least six (6) months prior written notice
    (email is acceptable for these purposes) with such written
    notice expressly stating that Licensor is setting an Initial
    Theatrical Release date for a Picture for all purposes under
    this Agreement (“Release Date Notice”), before
    setting such Initial Theatrical Release date and at least three
    (3) months prior written notice before changing a previously
    established Initial Theatrical Release date for a Picture. If
    Licensor provides less than three

 

	 	 	 	 	 
	

	 	-3-	 	 

 

 

    (3) months notice (from both the old date and the new date)
    before changing a previous estimated Initial Theatrical Release
    date for a Picture then TWC may, after good faith consideration
    of such date, in its discretion refuse changes to the date (in
    which case Licensor shall remain obligated to fund the P&A
    Budget therefor), or if an initial date is being set with less
    than three (3) months notice, TWC may reject such date (in
    which case Licensor shall designate another date with at least
    three (3) months notice and otherwise in accordance with
    the terms hereof). Licensor agrees to coordinate its release
    schedule in good faith with TWC so as not to set a release date
    for a Picture hereunder is on the same weekend as other motion
    pictures to be released by TWC and/or its affiliates (and solely
    with respect to Pictures that are in a competing genre with
    other TWC motion pictures, the initial release date for such
    Picture shall not be less than then (10) days before or
    after the release dates of other competing genre TWC motion
    pictures). Notwithstanding the foregoing, TWC will not request
    that Licensor change a release date for a Picture unless TWC
    believes in good faith that such Picture may be directly
    competitive with another TWC-released motion picture as to core
    audience; provided that if TWC does believe in good faith that
    the pictures are directly competitive as to core audience then
    Licensor shall change the Initial Theatrical Release for such
    Picture. For purposes of clarity, once Licensor has designated a
    release date for a Picture pursuant to a Release Date Notice in
    accordance with this Agreement, TWC shall not request a change
    (and Licensor shall not be required to change) in
    Licensor’s initially scheduled release date to accommodate
    a later-scheduled TWC picture that may be competitive with such
    Picture and TWC shall not schedule a release date for other
    motion pictures to be released by TWC and/or its affiliates that
    is one the same weekend as a Picture hereunder (and solely with
    respect to TWC pictures that are in a competing genre with a
    Picture hereunder, TWC shall not set a release date for such
    picture that is less than ten (10) days before or after the
    release date of such Picture). TWC shall use commercially
    reasonable efforts to provide Licensor on a monthly basis with
    the current scheduled theatrical release dates of all pictures
    being distributed by the majors and mini-majors.

 

    6.  Pay TV Exploitation: The Pay TV Rights in
    the Pictures shall be exploited by TWC pursuant to the terms and
    conditions set forth on Schedule 3 attached hereto and
    incorporated herein by this reference (and Licensor hereby
    agrees to comply, and to require its licensees and assignees to
    comply, with all such terms).

 

    7.  Free TV Exploitation: Subject to the terms
    of Paragraph 4 above, TWC shall use its reasonable good
    faith commercial efforts to license the Free TV Rights in each
    Picture for the highest possible license fee.

 

    8.  Distribution Terms: “Gross
    Receipts” shall be defined and allocated in accordance
    with the terms and conditions set forth on Schedule 4
    attached hereto and incorporated herein.

 

    9.  Delivery:

 

    (a) “Delivery” means delivery to and
    acceptance by TWC of each Picture in accordance with the terms
    of this Agreement and in accordance with the delivery schedule
    attached hereto and incorporated herein as Exhibit B (the
    “Delivery Schedule”). All costs of Delivery to
    TWC will be borne by Licensor. Licensor agrees to cause Delivery
    of each Picture to occur on or before the date that is sixty
    (60) days prior to the Initial Theatrical Release of such
    Picture (“Outside Delivery Date”) provided that
    publicity and promotional materials shall be delivered no later
    than ninety (90) days prior to the Initial Theatrical
    Release. Timely Delivery by Licensor to TWC is of the essence of
    this Agreement and Licensor acknowledges and agrees that TWC
    shall have no obligation to exploit a Picture if timely Delivery
    of such Picture by the Outside Delivery Date has not occurred.
    Licensor agrees that, in addition

 

	 	 	 	 	 
	

	
 
	
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    to the Delivery Schedule, in the event any foreign language or
    other versions of the Pictures are created, TWC shall have free
    access to any such materials
    and/or
    versions of such Pictures.

 

    (b) The procedures for delivery, inspection and cure shall
    be as follows:

 

    (i) Inspection/Cure.  TWC shall have
    thirty (30) days following TWC’s receipt of written
    notice from Licensor that complete Delivery has been effected
    (the “Inspection Period”), to inspect and
    review the delivery materials for compliance with the technical
    delivery requirements hereunder. In the event TWC determines
    that Delivery of an item has not been properly effected, then
    prior to the expiration of the Inspection Period, TWC shall so
    notify Licensor in writing (the “Rejection
    Notice”), which Rejection Notice shall set forth with
    specificity any Delivery items(s) furnished to TWC which are
    defective
    and/or any
    Delivery item(s) not timely tendered to TWC for inspection.
    Licensor shall have fourteen (14) days from its receipt of
    the Rejection Notice to cure any defect in a given Delivery
    item. If and when Licensor believes that Licensor has cured any
    defect respecting any Delivery item, then Licensor shall so
    notify TWC in writing (the “Cure Notice”) that
    Delivery of the subject item has been effected. TWC shall have
    fourteen (14) days from its receipt of the Cure Notice and
    the
    cured/additional
    Delivery items(s) (the
    “Re-Inspection
    Period”) to
    re-inspect
    the subject item and accept delivery, or, alternatively, reject
    delivery by sending another Rejection Notice to Licensor.
    Subject only to the dispute resolution provision below, TWC
    shall have no obligation to Licensor hereunder if Delivery is
    not timely effected, and Licensor shall promptly reimburse TWC
    for all payments theretofore made by TWC to Licensor hereunder
    (provided that the foregoing shall not limit in any way
    TWC’s right to assert any claims or remedies against
    Licensor and to seek any other damages to which TWC may be
    entitled as a result of such failure). For the sake of clarity,
    a failure by TWC to deliver any required notice set forth above
    shall be deemed acceptance of the item(s) in question by TWC.

 

    (ii) Dispute Resolution.  In the event of
    any dispute between TWC and Licensor regarding Licensor’s
    delivery
    and/or
    TWC’s acceptance of a Delivery item, the parties shall
    proceed according to the IFTA dispute resolution procedures.

 

    10. Credit: Subject to the terms of
    Schedule 5 (attached hereto and incorporated herein by
    reference) TWC shall receive a first position logo and first
    position presentation credit in connection with each Picture on
    screen (each on separate unshared cards) and in the billing
    block of all paid ads in the Territory and shall receive a
    static distributor logo as the last card in the end credit roll.
    TWC shall also have the right to accord credits to any of its
    subdistributors at the beginning or end of the Picture and in
    connection with advertising for the Picture; provided that TWC
    shall not accord credit to any subdistributor of the Theatrical
    Rights without Licensor’s prior written approval. TWC shall
    adhere to all credit obligations of which it is notified in
    writing and provided further that no casual or inadvertent
    failure by TWC or its subdistributors shall constitute a breach
    hereof. Promptly following TWC’s receipt of written notice
    detailing, with reasonable specificity, a failure by TWC to
    comply with such credit obligations, TWC shall use commercially
    reasonable efforts to prospectively cure such failure on
    materials created after the date of such notice, provided that
    in no event shall TWC be obligated to recall any materials
    (including prints, one-sheets, etc.) created prior to such
    notice. Each Picture as delivered to TWC shall contain all
    required screen credits, and, provided that TWC does not alter
    such credits, Licensor does hereby indemnify and hold TWC
    harmless with respect to any claims regarding such screen
    credits.

 

	 	 	 	 	 
	

	
 
	
   -5-
	
 
	
 

 

 

    will not be any, liens or encumbrance against each Picture which
    may adversely affect TWC’s rights hereunder, other than
    liens identified in Paragraph 19 hereof, which will be
    subject to nondisturbance, intercreditor and/or subordination
    agreements, as applicable, with such lien holders to be
    negotiated in good faith; (c) each Picture and any
    advertising or publicity materials supplied by Licensor
    hereunder shall not contain any material which violates or
    infringes or may violate or infringe, nor will exploitation of
    the Rights in accordance with this Agreement violate or
    infringe, the copyright of any person, firm or corporation or
    any other common law or other right including without
    limitation, any right of privacy or trademark, of any person,
    firm or corporation; (d) every musical composition
    contained in each Picture, every performance of a musical
    composition contained in each Picture, and every photograph,
    clip, likeness and all other materials contained in each Picture
    have been licensed for use (or is otherwise fully cleared for
    use) in and in connection with such Picture (and all advertising
    therefor) for the entire License Term for the Territory, that
    all required license fees are fully paid, and that TWC and its
    licensees shall not be responsible for any additional fees
    (whether in the nature of residuals or otherwise) in connection
    therewith; (e) all costs of production of each Picture,
    including, without limitation, all compensation, laboratory
    costs, license fees and royalties will be paid in full prior to
    Delivery except any deferred costs, participations and/or guild
    residuals, all of which shall be payable by Licensor;
    (f) there is no action, suit or proceeding relating to the
    Pictures pending or threatened, before any court, administrative
    or governmental body which might materially affect TWC’s
    rights hereunder; (g) there are no defects in the
    chain-of-title
    to the Pictures which would affect any of TWC’s rights
    hereunder; (h) Licensor has obtained the rights to use the
    name and likeness of all cast, producers and the director in the
    marketing and advertising of the Pictures subject to reasonable
    name and likeness consultation and/or approval rights contained
    in the cast, producer, and director agreements; (i) the
    Pictures have not heretofore been exploited anywhere in the
    universe in any medium and (j) E&O insurance with
    standard limits of at least $3 million/$5 million and
    deductibles of $25,000 to $50,000, respectively, has been
    obtained or will be obtained prior to delivery by Licensor in
    connection with each Picture and TWC (and any distributors that
    TWC requests) will be added as an additional insured party
    listed thereon. TWC and Licensor each represent and warrant that
    it is duly formed and in good standing in its state of
    incorporation and has full authority to enter into and perform
    the terms of this Agreement.

 

    12.     Editing:  With
    respect to each Picture, TWC (and its subdistributors,
    affiliates and licensees) shall not cut or delete or edit any
    portion of any such Picture without the express written consent
    of Licensor. Notwithstanding the foregoing, TWC (and its
    subdistributors, affiliates and licensees) shall have the right
    to
    (i) time-compress
    a Picture, (ii) modify the size of the end credits of a
    Picture, (iii) make
    voice-over
    announcements over the end credits of a Picture,
    (iv) exhibit the name
    and/or logo
    of a television station or service, its subdistributors,
    affiliates and licensees during the exhibition of a Picture;
    (v) dub
    and/or
    subtitle a Picture, (vi) cut for rating (provided that TWC
    shall not cut the Picture for rating in the United States other
    than in connection with television releases), censorship,
    television commercial interruptions, to comply with broadcasting
    statutory practices, standards or regulations,
    and/or to
    avoid any liability that TWC reasonably believes might be
    imposed without such edits, cuts or alterations. Notwithstanding
    anything herein, TWC
    and/or
    TWC’s Pay Television Service shall have the right to
    down-convert,
    scale,
    up-convert,
    pan and scan, center cut or alter the resolution of each Picture.

 

    13.     Indemnification:  Licensor
    will, at its own expense, defend, indemnify and hold harmless
    TWC, its parent company and any and all related or affiliated
    entities, its officers, employees, agents, licensees and
    assignees, from any and all loss, damage, liability or expense
    (including reasonable outside attorney’s fees and expenses
    on a full indemnity basis) resulting from any material breach of
    Licensor’s representations, warranties
    and/or
    agreements herein,
    and/or
    resulting from or arising from the development, production,
    distribution, marketing, or other exploitation of the Pictures.
    With regard to any matters for which Licensor is indemnitor,
    Licensor may elect, in its sole discretion, to control the
    applicable action or proceeding, in which event TWC may join in
    any such action or proceeding and be

 

	 	 	 	 	 
	

	
 
	
   -6-
	
 
	
 

 

     represented by its own counsel at its sole cost; provided TWC
    shall have the right (not to be unreasonably withheld) to
    approve the counsel engaged by Licensor, which counsel shall be
    experienced in motion picture law and disputes of the same
    nature and (b) Licensor may not settle any claim without
    TWC’s consent unless such settlement includes an explicit
    confidentiality provision, a full release of TWC, does not
    impose any payment obligations on TWC and does not require TWC
    to admit any wrongdoing. TWC shall, at its own expense, defend,
    indemnify and hold harmless Licensor, its parent company and any
    and all related or affiliated entities, its officers, employees,
    agents, licensees and assignees, from any and all loss, damage,
    liability or expense (including reasonable outside
    attorneys’ fees and expenses on a full indemnity basis)
    resulting from any material breach of TWC’s
    representations, warranties and/or agreements herein (other than
    those claims for which Licensor must indemnify TWC as set forth
    above). With regard to any matters for which TWC is indemnitor,
    TWC may elect, in its sole discretion, to control the applicable
    action or proceeding, in which event Licensor may join in any
    such action or proceeding and be represented by its own counsel
    at its sole cost. TWC may not settle any claim for which it is
    indemnifying Licensor without Licensor’s consent unless
    such settlement includes an explicit confidentiality provision,
    a full release of Licensor, does not impose any payment
    obligations on Licensor and does not require Licensor to admit
    any wrongdoing.

 

     14. Confidentiality/Press Release: The terms of
    this Agreement shall remain confidential and neither party shall
    disclose any such information without the other party’s
    written consent. Notwithstanding the foregoing, confidential
    information regarding this Agreement may be disclosed by either
    party (i) to such party’s attorneys, investors, parent
    companies, financiers, accountants and other advisors (provided
    that such third parties, in each instance, agree to maintain
    confidentiality on the same basis as set forth herein), and (ii)
    to the extent such confidential information is required to be
    disclosed by court order, subpoena or other judicial or legal
    process or (iii)  by TWC to the extent necessary to exploit
    the Rights granted hereunder. If TWC or Licensor elects to issue
    an initial press release concerning this Agreement, TWC shall
    prepare the content and timing of such press release with
    Licensor’s mutual approval. Notwithstanding anything to the
    contrary in this Paragraph or elsewhere in this Agreement, the
    Confidentiality Agreement between the parties dated
    December 1, 2009 shall remain in full force and effect and
    nothing herein shall be deemed to diminish Licensor’s
    confidentiality obligations as set forth in said Confidentiality
    Agreement.

 

     15. Governing Law/Dispute Resolution: This
    Agreement shall be construed in accordance with the laws of the
    State of New York (without giving effect to principles of
    conflict of laws). All disputes arising out of this Agreement or
    the alleged breach of it shall be resolved and adjudicated in
    the Federal, State or City Courts located in New York County.
    Each of the parties hereto hereby submits to the jurisdiction
    and venue of said courts and waives its rights to have disputes
    arising out of this Agreement adjudicated in any other forum.
    Notwithstanding the foregoing, any dispute regarding whether or
    not Delivery has been effected shall be submitted to arbitration
    pursuant to the IFTA Rules of Arbitration. In the event of any
    dispute relating to the subject matter hereof, Licensor’s
    sole remedy shall be to pursue an action at law for money
    damages (or arbitration with respect to Delivery disputes), and
    Licensor agrees that Licensor shall nor seek or be entitled to
    enjoin the distribution, advertising or exploitation of any
    Picture or the exercise of any of the Right granted herein or
    terminate or rescind this Agreement. With respect to any breach
    of this Agreement (other than delivery breaches which shall be
    governed pursuant to Paragraph 9(b)), neither party shall be in
    breach of this Agreement until they have received written notice
    from the non-breaching party and been given a 15 business
    day opportunity to cure following receipt of such written
    notice. No failure on the part of Licensor or TWC to exercise,
    and no delay in exercising, any right hereunder shall operate as
    a waiver thereof; nor shall any single or partial exercise of
    any right hereunder preclude any other or further exercise
    thereof or the exercise of any other right. The remedies herein
    provided are cumulative and not exclusive or in limitation of
    any other right or remedy provided at Law or in equity except as
    otherwise provided for herein. Notwithstanding

 

	 	 	 	 	 
	

	
 
	
   -7-
	
 
	
 

 

 

    anything to the contrary, this Paragraph shall be subject to the
    terms and conditions set forth on Schedule 6 (attached
    hereto and incorporated herein by reference).

 

    16.  Assignment: TWC, in its sole
    discretion, shall have the right to assign or license any and
    all of its rights and obligations hereunder to any person or
    entity; provided that upon any such assignment TWC shall remain
    primarily liable hereunder. TWC shall also have the right to
    assign and pledge its rights hereunder in connection with
    financing arrangements entered into by TWC and its affiliates,
    it being understood and agreed that any such assignment and or
    pledge shall not diminish or impair Licensor’s rights
    hereunder. Licensor shall not assign this Agreement or any of
    its rights or obligations hereunder without TWC’s prior
    written consent. Nothing contained in this Agreement shall be
    construed as creating an agency, partnership, joint venture or
    fiduciary relationship between the parties. Licensor shall have
    the right to assign and pledge its rights hereunder in
    connection with financing arrangements entered into by Licensor
    and its affiliates, it being understood and agreed that any such
    assignment and or pledge shall not diminish or impair TWC’s
    rights hereunder.

 

    17.  Accounting and Audit: TWC shall
    maintain full and complete records of all matters relating to
    the exploitation of the Rights in the Pictures. TWC shall
    account to Licensor in a customary industry manner on a monthly
    basis from the end of the first month following the release of
    each Picture in the Territory and all accountings (and payments
    when due as aforesaid), shall be on a monthly basis until the
    date that is eighteen (18) months after the release of each
    Picture, on a quarterly basis for the next two (2) years,
    then on a semi-annual basis for the next two (2) years and
    annually thereafter (to the extent there are Gross Receipts).
    All accountings hereunder shall be sent to Licensor within
    forty-five (45) days of the end of the relevant accounting
    period and be accompanied by payment of all sums due to Licensor
    thereunder. Licensor shall have customary motion picture
    industry audit rights, at Licensor’s expense, in connection
    with the Picture to be exercised not more than once per calendar
    year during reasonable business hours to be conducted by a
    certified public accountant and otherwise in accordance with
    custom and practice in the industry and in a manner that will
    not frustrate TWC’s business. Licensor shall notify TWC in
    writing of its intention to audit TWC’s books, specifying
    at least the statement upon which Licensor’s audit is to be
    based, and such audit must be commenced within sixty
    (60) days of such written notice and completed within
    thirty (30) days of such commencement. Any statement to
    which Licensor does not raise an objection within three
    (3) years of its delivery shall be deemed conclusive and
    final, and Licensor may not thereafter raise a claim with
    respect to any item first reported on such statement (i.e., the
    continued inclusion of any item on subsequent statements shall
    not operate to extend the three (3) year period that
    applies to such item as of the first statement on which it
    appeared).

 

    18.  Holdback: Licensor shall not
    authorize the Mexican
    and/or
    Canadian free or basic television exhibition (or exhibition on
    another similar service) of any Picture (or any version thereof)
    in the cities of Toronto, Niagara Falls, Windsor, Vancouver,
    Tijuana or Juarez, earlier than 30 days after the end of
    the First Window for such Picture.

 

    19.  Security Interests:

 

    (a) To the extent necessary for TWC to exercise the Rights
    granted hereunder and to secure TWC’s rights to monies
    hereunder, Licensor hereby agrees to grant to TWC (or if
    applicable to cause the applicable SPC to grant to TWC) on a
    Picture-by-Picture basis a first priority (subject to the final
    sentence of this paragraph (a)) security interest in
    all of Licensor’s (and/or the SPC’s, if applicable)
    right, title and interest in and to the Rights in each Picture
    in the Territory during each License Term and all results and
    proceeds thereof (the “Collateral”). Licensor
    agrees that such security interest shall be granted concurrently
    with delivery to TWC of the Short Form Assignment, but in no
    event later than the execution of an interparty agreement
    between TWC and Licensor’s (and/or the SPC’s, if
    applicable)

 

	 	 	 	 	 
	

	
 
	
-8-
	
 
	
 

 

 

    financiers and completion guarantor. Licensor (and/or the SPC,
    if applicable) agrees to take all actions reasonably requested
    by TWC from time to time in order to create, perfect, protect,
    preserve and maintain the perfection and priority of such
    security interests in the Collateral to be granted by Licensor
    (and/or the SPC, if applicable) to TWC in accordance with this
    Agreement, including without limitation, (i) executing and
    delivering to TWC a security agreement and all such financing
    statements and other instruments (including, but not limited to,
    a copyright mortgage with respect to each Picture) as TWC
    reasonably shall request to create, perfect, protect, preserve
    and maintain the perfection and priority of any such security
    interest, the form of which the parties hereto agree to
    negotiate in good faith (collectively, the “Security
    Documents”), and (ii) filing, registering and/or
    recording such Security Documents (as applicable).
    Notwithstanding the foregoing, TWC acknowledges and agrees that
    any security interest in the Collateral to be granted to TWC in
    accordance with the terms hereof shall be subject to the rights
    of any third party distributors and subject and subordinate to
    the security interests of each Picture’s financiers,
    completion guarantor and third party distributors and the
    applicable guilds and labs pursuant to nondisturbance,
    intercreditor and/or subordination agreements, as applicable, to
    be negotiated in good faith.

 

    (b) TWC will grant the SPC for each Picture, on a
    Picture-by-Picture basis, a security interest in the Rights and
    the products and proceeds thereof that are payable to Licensor
    (or such SPC) solely in the Territory (“Licensor
    Collateral”) to be negotiated in good faith subject to
    customary non-disturbance language, including without
    limitation, such lien being subject to the distribution rights
    of TWC’s subdistributors and licensees, and subject to
    SPC’s agreement to not exercise its remedies as a secured
    creditor except (A) if (i) a third party judgment or
    secured creditor of TWC takes action against a material portion
    of the Licensor Collateral, and (ii) such action by the
    third party judgment or secured creditor is reasonably likely to
    result in this Agreement not being fully and timely performed by
    TWC (including timely payment of all sums due and owing to
    Licensor hereunder) or (B) in the event of TWC’s
    bankruptcy (or other similar proceedings), SPC may exercise any
    of its remedies as a secured creditor other than its foreclosure
    remedies which foreclosure remedies may only be exercised if
    (i) a third party judgment or secured creditor of TWC takes
    action against a material portion of the Licensor Collateral,
    and such action by the third party judgment or secured creditor
    is reasonably likely to result in this Agreement not being fully
    and timely performed by TWC (including timely payment of all
    sums due and owing to Licensor hereunder) or (ii) there is
    a subsequent material uncured breach by TWC of its material
    obligations unless such breach or non-performance is a result of
    a court order. In connection with TWC’s granting of such
    security interest, TWC shall execute and deliver to SPC a
    copyright mortgage and other required security documents
    reflecting the foregoing (“Lien Documents”),
    subject to good faith negotiations, and TWC covenants and agrees
    that it has not and will not execute any conflicting transfer or
    security interest prior to execution and delivery to SPC of such
    Lien Documents. If, at the time that Licensor grants the Rights
    to TWC, there is actually an existing lien on the Licensor
    Collateral that TWC has previously granted, TWC shall have such
    lien removed promptly or shall cause such lien holder to enter
    into a customary intercreditor agreement with Licensor, subject
    to good faith negotiation.

 

    20. Further Documents: Licensor and TWC shall
    execute or cause to be executed such documents and other
    instruments and take or cause to be taken such further actions
    as may be reasonably necessary or desirable to evidence,
    effectuate or confirm the provisions of this Agreement and the
    transactions contemplated by this Agreement. At TWC’s
    written request, Licensor will execute, acknowledge and deliver
    to TWC any and all additional documents TWC may deem reasonably
    necessary to evidence and effectuate any and all of TWC’s
    rights under this Agreement and Licensor hereby irrevocably
    appoints TWC as attorney-in-fact with full power to execute,
    acknowledge, deliver and record in the U.S. Copyright
    Office or elsewhere any and all such documents Licensor fails to
    execute, acknowledge and

	 	 	 	 	 
	 
	 	-9-
	 	 

 

 

    deliver within five (50) business days after TWC’s request.
    TWC shall provide Licensor with copies of all documents executed
    on Licensor’s behalf; provided that inadvertent failure to
    provide such copies shall not be a breach hereunder. The
    appointment shall be a power coupled with an interest.

 

    21. Compliance Warranty: With respect to all persons
    filmed or photographed in connection with the Pictures on or
    after March 18, 2009, Licensor represents, warrants and
    covenants (or if Licensor is not the “Primary
    Licensor”’ [as defined in 28 C.F.R. Sec.
    75.1(c)(1)] of the Picture, Licensor in the name and on behalf
    of any such Primary Licensor, represents, warrants and
    covenants) that: (i) the Picture does not and shall not
    contain any visual depiction that is child pornography [as
    defined in 18 U.S.C. § 2256(8)] or is actual
    sexually explicit conduct [within the definitions in
    clauses (i) through (iv) of 18 U.S.C.
    § 2256(2)(A)]; (ii ) Licensor (or said Primary
    Licensor) meets all of the eligibility requirements for the safe
    harbor certification set forth in 18 U.S.C.
    § 2257A(h)(1) and 28 C.F.R.
    § 75.9(a)(1)-(3); (iii) Licensor (or said Primary
    Licensor) regularly and in the normal course of business
    collects and maintains, and with respect to the Picture, shall
    collect and maintain, individually identifiable information
    regarding all performers, including minor performers, employed
    by Licensor (or said Primary Licensor), pursuant to tax, labor,
    and other laws, labor agreements or otherwise pursuant to
    industry standards, where such information includes the name,
    address and date of birth of the performer, in accordance with
    28 C.F.R. § 75; (iv) upon receipt of a
    written demand from TWC with respect to one or more performer(s)
    in the Picture, Licensor shall promptly deliver to TWC copies of
    the individually identifiable information collected and
    maintained by Licensor with respect to such performer(s);
    (v) Licensor (or said Primary Licensor) has filed, or shall
    file, by the deadlines established in 28 C.F.R.
    § 75.9(e), with the Attorney General of the United
    States of America the certification (substantially in the form
    set forth in the Delivery Schedule) provided under
    18 U.S.C. § 2257A(h) and 28 C.F.R.
    § 75.9, and shall provide TWC with a true, correct and
    complete copy of said certification, by the earlier of:
    (A) promptly upon the filing of such certification with the
    U.S. Attorney General; (B) Delivery of the Picture; or
    (C) upon request; and (vi) the definitions set forth
    in 18 U.S.C. § 2257, 18 U.S.C.
    § 2257A, 28 C.F.R. § 75 and the
    explanatory notes by the Department of Justice of the United
    States of America in 73 Fed. Reg. 77432 et seq. (Dec. 18,
    2008) apply to the foregoing warranty, representation and
    covenant.

 

    22. Severability: In the event any one or more of
    the provisions contained in this Agreement should be held
    invalid, illegal or unenforceable in any respect, the validity,
    legality and enforceability of the remaining provisions
    contained herein shall not in any way be affected or impaired
    thereby. The parties shall endeavor in good faith negotiations
    to replace the invalid, illegal or unenforceable provisions with
    valid provisions, the economic effect of which comes as close as
    possible to that of the invalid, illegal or unenforceable
    provisions.

 

    23. Separate Counterparts: This Agreement may be
    executed by the parties hereto in separate counterparts, each of
    which when so executed and delivered shall constitute an
    original, but all of which when taken together shall constitute
    but one contract. Delivery of an executed counterpart of this
    Agreement by facsimile transmission shall be effective as
    delivery of a manually executed counterpart of this Agreement.

 

    24. Entire Agreement: This Agreement sets forth the
    entire agreement between the parties with respect to the subject
    matter hereof, and upon the full execution hereof, shall
    supersede and replace all prior
    and/or
    contemporaneous written or oral agreements pertaining hereto
    (including, without limitation, the short form agreement
    executed between the parties) and can only be modified by a
    writing signed by both parties provided, for purposes of
    clarification this Agreement shall not supercede or replace the
    fully executed Confidentiality Agreement dated as of
    December 1st,

    2009 between the parties, which Confidentiality Agreement
    remains in full force and effect.

 

	 	 	 	 	 
	

     

	
 
	
   -10-
	
 
	
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized
officers as of the date first above written.

	 	 	 	 	 
	THE WEINSTEIN COMPANY LLC	 	 
	 
	 	 	 	 
	By:
	 	/s/ David Glasser	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Its:

	 	PRESIDENT INTERNATIONAL	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Accepted and Agreed:	 	 
	 
	 	 	 	 
	THE FILM DEPARTMENT LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Neil Sacker	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Its:

	 	President & COO	 	 

	 	 	 	 	 
	

 

	
 
	-11-
	
 
	
 

 

EXHIBIT A

SHORT FORM ASSIGNMENT

For good and valuable consideration, receipt of which is hereby
acknowledged,
                   
                     
(“Assignor”) hereby sells, grants, conveys, transfers and assigns to
The Weinstein Company LLC (“Assignee”), its successors, licensees and assigns, exclusively, the
“Rights” throughout the “Territory” for the duration of the “License Term” (all as defined on the
attached Schedule 1 attached hereto and incorporated herein) in and to the motion picture
currently entitled
“               
           ” (the “Picture”), including the exclusive distribution
rights under copyright in the Territory to the extent held by Assignor.

This Assignment of Copyright is made expressly subject to the terms and conditions contained in the
Amended and Restated Exclusive Output Distribution Agreement dated as of December 24, 2009 between
The Film Department LLC and Assignee (“Output Agreement”). Assignor hereby agrees to be bound by
and adhere to all the terms and conditions of the Output Agreement solely with respect to the
Picture.

This Assignment is made and entered into as of                                         

IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly executed as of the date written
above.

 

	 	 	 	 	 
	By:  	
 	 	 
	 	Title 	 	 	 

On
                    , 200___, before me,                     , a Notary Public in and for the
State, personally appeared                                         , known to me personally (or proved to
me on the basis of satisfactory evidence) to be the person who executed the within instrument, as
the                             
 of the corporation that executed the within instrument, and
acknowledged to me that such corporation executed the within instrument pursuant to its by-laws
and consent of its board of directors.

WITNESS my hand and official seal

 

Notary Public for

The State of:                                      

					
	 	 	 	 	 
	
	 	-12-
	 	 

 

 

SCHEDULE 1 to Short Form Assignment

The “TERRITORY” shall be defined as: the United States, the Bahamas, Bermuda and Caribbean Basin,
and their respective territories and possessions, including, without limitation, Guam, Puerto
Rico, the U.S. Virgin Islands, the Caroline Islands, American Samoa, Northern Marianas Islands and
Wake Islands; provided Assignee’s Theatrical Rights and Free Television Rights in the Bahamas and
Bermuda shall be on a non-exclusive basis; provided further that Assignee’s rights in the
Caribbean Basin shall be limited solely to the Pay TV Rights and shall be on a non-exclusive
basis.

The “LICENSE TERM” shall be defined as: Commencing as of the date of the Short Form Assignment and
continue through the expiration of the Third Window for such Picture; provided that
notwithstanding the foregoing the License Term shall be automatically extended for the duration of
any and all existing grants and/or licenses to third parties by TWC pursuant to this Agreement
with respect to such Picture.

The “RIGHTS” shall be defined as: Collectively, the exclusive right to exploit the Theatrical
Rights, Pay TV Rights and Free TV Rights in the Pictures (including, to the extent necessary to
exploit the Rights, the copyright therein) in all languages in which motion pictures are
customarily distributed in the Territory (subtitled and/or dubbed), and the right to advertise,
publicize and promote any and all of the foregoing.

Theatrical Rights means the right to distribute motion pictures theatrically as such term is
commonly understood in the U.S. motion picture industry. Pay TV Rights means the right to
distribute motion pictures pursuant to a “Pay Television Service”. Pay Television Service means a
subscription programming service, which service (a) is not an advertiser-supported basic cable or
broadcast television network, and (b) is available alone or in a package with other services for
which a consumer in a home or other non-public area is required to pay a fee (which fee, when such
service is available via what is currently known as “cable” television, is generally in addition to
the charge for access to “basic” or “expanded basic” programming) for the right to receive such
service(s) on a monthly basis, provided however, that with respect to a consumer in a hotel or
motel, such consumer is not required to pay a separate fee for the right to receive such service
and there is no requirement that such service be available to such consumer on a monthly basis. In
no event shall a Pay Television Service make pictures available to consumers on a Pay-Per-View or
other “pay-per-film” economic basis. A Pay Television Service may be made available (I) in a
sequentially scheduled “linear” format (whereby all viewers accessing such Pay Television Service
at a given point in time in a given time zone (e.g. eastern time zone) would be able to view the
same exhibition of the same program at such point in time) and/or (II) on an “on demand” access
basis (whereby a given viewer has discretion to select the time(s) for viewing of a given program
or group of programs featured on such Pay Television Service.) Free TV Right means (A) a linear,
scheduled exhibition over television broadcast stations, whether network stations or independent
stations, where no charge is made to the viewer; and/or (B) linear, scheduled exhibition by any
means of electronic or digital distribution including but not limited to satellite, cable
television, internet, IPTV and/or wireless, for which subscribing members of the public pay for the
transmission service provided by the satellite, cable system, internet provider, or wireless
carrier; and/or (C) so-called “free on demand” exhibition by any distribution medium or means
provided that such rights are associated with the license of rights described in the foregoing
clauses (A) and/or (B).

					
	 	 	 	 	 
	
	 	-13-
	 	 

 

 

EXHIBIT B

DELIVERY SCHEDULE

					
	 	 	 	 	 
	
	 	-14-
	 	 

 

 

SCHEDULE 1

DEFINITIONS

	 	1.	 	“Eligible Pictures” means each motion picture (1) for which Licensor, produces,
co-produces, finances, owns or controls the “Rights” in the “Territory” during the “Term”
(as all such terms are defined herein); (ii) that when produced is intended to be
“Initially Theatrically Released” (as defined herein) during the Term on at least two
hundred (200) screens simultaneously at some point during its theatrical release prior to
commercial exploitation in any other media; and (iii) is at least 85 minutes in length
(including main and end credits). Provided the motion picture “Earthbound” is at least 85
minutes in length, such picture is acknowledged to be an “Eligible Picture” hereunder.
Notwithstanding the foregoing, the following motion pictures shall be excluded from the
definition of Eligible Pictures: (A) documentary, (B) black & white, (C) foreign language
or primarily foreign language, (D) concert, filmed stage play and clip-compilation films,
(E) films that are not rated by the MPAA or films with a rating more restrictive than MPAA
“R”, (F) films that contain any depiction of “Explicit Sexual Conduct” (where “Explicit
Sexual Conduct” means, collectively, human sexual intercourse including genital-genital,
oral-genital, anal-genital, or oral-anal, whether between those of same or opposite sex,
bestiality, masturbation, or sadistic or masochistic abuse), with respect to which
depiction the performer(s) were actually engaged in the applicable act while being filmed,
and (G) motion pictures that would otherwise qualify as Eligible Pictures hereunder for
which Licensor acquired rights in such picture after the commencement of principal
photography (“Acquired Pictures”). For purposes of clarification, Eligible Pictures may
include motion pictures for which Licensor acquired rights prior to the commencement of
principal photography for such motion picture provided that the criteria for “Eligible
Pictures” is otherwise satisfied. “Initial Theatrical Release” (and its variations,
e.g., “Initially Theatrically Released”) shall mean the first day of general commercial
theatrical release in the United States, excluding only preview, sneak and/or Academy Award
qualification exhibitions. Notwithstanding anything to the contrary set forth above, with
respect to (x) animated motion pictures, (y) motion pictures with an MPAA rating of “G”,
and/or (z) motion pictures that contain any depiction of (a) lascivious exhibition of a
performer’s genitals or pubic area or (b) “Simulated” Explicit Sexual Conduct
(where “Simulated” means that the applicable act is depicted in a manner such that the
ordinary viewer would conclude that the performer(s) actually engaged in such act
notwithstanding that they did not actually do so and expressly excludes conduct that is
merely suggested), TWC has the exclusive option in its sole discretion to determine whether
or not to include any such pictures as “Eligible Pictures”. TWC shall make its election
in writing to Licensor within forty five (45) days following its receipt from Licensor of a
screener DVD copy of such Eligible Picture.
	 
	 	2.	 	“Pictures” means, collectively (and each, a “Picture”), (i) the first seven (7)
Eligible Pictures which are actually Initially Theatrically Released during each calendar
year of the Term on at least two hundred (200) screens simultaneously at some point during
its theatrical release prior to exploitation in any other media; and (ii) any “Designated
Pictures” (as defined herein). TWC shall have the exclusive option, in its sole
discretion, of designating as “Pictures” hereunder any Eligible Pictures Initially
Theatrically Released on at least two hundred (200) screens during any calendar year of the
Term in excess of seven (7), and/or any Acquired Pictures (all pictures for which TWC
exercises its foregoing option are referred to as “Designated Pictures”). With respect to
each potential Designated Picture, TWC shall make its election in writing to Licensor
within forty five (45) days following its receipt from Licensor of a screener DVD copy of
the completed version of such picture. With respect to any Eligible Picture which TWC has
not elected as a Designated Picture, TWC shall nonetheless consider in good faith, upon
Licensor’s

					
	 	 	 	 	 
	 
	 	-15-
	 	 

 

 

	 	 	 	written request and on a picture-by-picture basis, entering into a separate
distribution arrangement with Licensor on terms to be negotiated in good faith; provided
that the failure to enter into such separate agreement shall not be a breach hereof. For
purposes of clarification, after the selection process for Designated Pictures has been
completed with respect to an applicable motion picture, if TWC does not select such motion
picture as a Designated Picture, then TWC shall have no further rights to such picture, and
Licensor may freely license such picture to a third party.
	 
	 	3.	 	The “Rights” mean, collectively, the exclusive right to exploit the “Theatrical
Rights”, “Pay TV Rights” and “Free TV Rights” in the Pictures (including, to the extent
necessary to exploit the “Rights”, the copyright therein) in all languages in which motion
pictures are customarily distributed in the Territory (subtitled and/or dubbed), and the
right to advertise, publicize and promote any and all of the foregoing.

	 	a.	 	“Theatrical Rights” means the right to distribute motion pictures
theatrically as such term is commonly understood in the U.S. motion picture
industry.
	 
	 	b.	 	“Pay TV Rights” means the right to distribute motion pictures pursuant
to a “Pay Television Service”. “Pay Television Service” means a subscription
programming service, which service (a) is not an advertiser-supported basic cable
or broadcast television network, and (b) is available alone or in a package with
other services for which a consumer in a home or other non-public area is required
to pay a fee (which fee, when such service is available via what is currently known
as “cable” television, is generally in addition to the charge for access to
“basic” or “expanded basic” programming) for the right to receive such
service(s) on a monthly basis, provided however, that with respect to a consumer in
a hotel or motel, such consumer is not required to pay a separate fee for the right
to receive such service and there is no requirement that such service be available
to such consumer on a monthly basis. In no event shall a Pay Television Service
make pictures available to consumers on a Pay-Per-View or other “pay-per-film”
economic basis. A Pay Television Service may be made available (I) in a
sequentially scheduled “linear” format (whereby all viewers accessing such Pay
Television Service at a given point in time in a given time zone (e.g. eastern time
zone) would be able to view the same exhibition of the same program at such point
in time) and/or (II) on an “on demand” access basis (whereby a given viewer has
discretion to select the time(s) for viewing of a given program or group of
programs featured on such Pay Television Service.)
	 
	 	c.	 	“Free TV Rights” means (A) a linear, scheduled exhibition over
television broadcast stations, whether network stations or independent stations,
where no charge is made to the viewer; and/or (B) linear, scheduled exhibition by
any means of electronic or digital distribution including but not limited to
satellite, cable television, internet, IPTV and/or wireless, for which subscribing
members of the public pay for the transmission service provided by the satellite,
cable system, internet provider, or wireless carrier; and/or (C) so-called “free on
demand” exhibition by any distribution medium or means provided that such rights
are associated with the license of rights described in the foregoing clauses (A)
and/or (B).

	 	4.	 	For each Picture individually, subject to Paragraph l(e) of the Agreement, the “License
Term” shall commence as of the date of the Short Form Assignment for such Picture and
continue through the expiration of the “Third Window” (as defined herein) for such Picture;
provided that notwithstanding the foregoing the License Term shall be automatically
extended for the duration

					
	 	 	 	 	 
	 
	 	-16-
	 	 

 

 

	 	 	 	of any and all existing grants and/or licenses to third parties by TWC pursuant to this
Agreement with respect to such Picture.

					
	 	 	 	 	 
	 
	 	-17-
	 	 

 

 

SCHEDULE 2

CREATIVE RIGHTS

     (a) Creative Decisions: The parties shall meaningfully consult with one another
concerning all key creative decisions in connection the development, production, post production,
marketing, promotion and distribution of each motion picture intended to be or which may become an
Eligible Picture or a Picture hereunder including, without limitation, with respect to the
engagement of writers, directors, cast and key production crew, screenplays, editing and cutting,
and the creation of marketing materials and campaigns. In the event of a disagreement between the
parties as to any of the foregoing decisions or any other creative matters, Licensor shall have
control and may exercise such decision, provided that notwithstanding anything to the contrary,
Licensor shall not have any approval rights with respect to the exploitation of the Pay TV Rights
for each Picture, which Pay TV Rights shall be exploited in accordance with the terms of this
Agreement. For the avoidance of doubt, TWC shall not have any approval rights with respect any of
the foregoing decisions.

     (b) Business Decisions: The parties shall meaningfully consult with one another
concerning all key business decisions in connection with each motion picture intended to be or
which may become an Eligible Picture or a Picture hereunder including, without limitation, with
respect to the production budget, talent agreements, third party participations, P&A Budgets, P&A
Cashflow, initial release date and pattern (including number and identity of theaters), marketing
campaigns and the amount of the Free TV license fee obtained by TWC pursuant to this Agreement. In
the event of a disagreement between the parties as to any of the foregoing decisions or any other
business decisions, Licensor shall have control and may exercise such decision and/or, subject to
the other terms of this Agreement, may instruct TWC as to such business decision; provided that
notwithstanding anything to the contrary Licensor shall not have any approval rights with respect
to the exploitation of the Pay TV Rights for each Picture or any third party agreement in
connection with the Pay TV Rights or the Theatrical Rights, which rights shall be exploited in
accordance with the terms of this Agreement. For the avoidance of doubt, except as may otherwise be
expressly set forth in this Agreement, TWC shall not have any approval rights with respect any of
the foregoing decisions. Notwithstanding the foregoing, for all services rendered by TWC
hereunder TWC shall use its vendors and/or labs (in TWC’s discretion but at Licensor’s expense at
the actual cost charged by such vendors to TWC for the applicable services) for the servicing,
replication and shipping of all prints and marketing materials (including without limitation, print
management, print services, digital cinema services and marketing services).

					
	 	 	 	 	 
	 
	 	-18-
	 	 

 

 

SCHEDULE 3

PAY TV WINDOWS, INTERVALS AND RESTRICTIONS

     (a) First Window: The “First Window” for each Picture shall be eighteen (18) months
and shall commence twelve (12) months after such Picture’s Initial Theatrical Release; provided
that with respect to up to two Pictures Initially Theatrically Released in each calendar year of
the Term, TWC may in its sole discretion delay the commencement of such Picture’s First Window
until a date which is no later than fifteen (15) months after such Picture’s Initial Theatrical
Release. During the First Window, each Picture may be exhibited on an unlimited number of
“Exhibition Days” (i.e., any period of 24 consecutive hours) on an “on-demand” basis and on up to
400 Exhibition Days over all linear channels of “TWC’s Pay Television Service” (as defined below).
Prior to the commencement of the First Window, a Picture (including any and all versions thereof)
may be exploited solely by means of Theatrical, “Non- Theatrical”, “Pay-Per-View”,
“Video-On-Demand”, “Home Video” and “Video Downloading” distribution (as such terms are
defined below). During the First Window, a Picture (including any and all versions thereof) may be
exploited (other than by TWC’s Pay Television Service) solely by means of Theatrical,
Non-Theatrical, Home Video and Video Downloading distribution, and solely during the last six (6)
months of a Picture’s First Window, a Picture (including any and all versions thereof) may also be
exploited by means of Pay-Per-View and Video-On-Demand.

     (b) Definitions: (i) “Home Video” distribution means the physical distribution of
physical devices, including but not limited to audio-visual cassettes, videotapes, digital video
discs and laser discs, containing a copy of a motion picture, for the intended purpose of
non-commercial viewing of such motion picture by consumers in their places of dwelling on
videocassette or videodisc players (or on any functionally equivalent audiovisual apparatus
now known or hereafter invented). (ii) “Video Downloading” means the electronic or other
non-tangible transmission of a single motion picture (including bonus features and/or other
added-value audio visual materials) to a device in the home or other place of dwelling for storage
on such device (or at the recipient’s election, outside such dwelling in a so-called “digital
locker”) under circumstances whereby the recipient of such transmission purchases, in exchange for
the payment of a distinct, material and separate non-recurring fee which non-recurring fee does not
include the receipt by such recipient of any other motion picture(s), program(s), product(s) or
service(s), a permanent license to access and view a copy of such stored motion picture (including,
without limitation, the right to view such copy of such motion picture an unlimited number of times
on such device or any other device to which such consumer is permitted to transfer the motion
picture as part of the initial license). (iii) “Pay-Per-View” means the electronic or other
non-tangible transmission of a motion picture (but only for viewing by an individual consumer in
his place of dwelling or other non-public or non-common space), whereby a consumer purchases, on a
fee-per-individual motion picture basis, the right to view a single exhibition (or multiple
exhibitions within a single, continuous 48- hour period) of such motion picture in circumstances
where such consumer accesses and views such exhibition(s) at a time(s) scheduled by a Pay-Per-View
distributor. (iv) “Video-On-Demand” means the electronic or other non-tangible transmission of a
motion picture (but only for viewing by an individual consumer in his place of dwelling or other
non-public or non-common space), whereby a consumer purchases, on a fee-per-individual motion
picture basis, the right to view a single exhibition (or multiple exhibitions within a single,
continuous 48-hour period) of such motion picture in circumstances where such consumer accesses and
views such exhibition(s) at a time(s) selected by a consumer in such consumer’s discretion. (v)
“Non-Theatrical” exhibition means exhibition of a motion picture (other than by means of Theatrical
distribution) for viewing by groups of people in public or in common areas of venues (such as
hospital day rooms and auditoriums in educational and institutional facilities and in public or
private areas of common carriers, such as airplanes, cruise ships, trains, hotels, motels, military
bases, oil rigs, etc.), so long as such exhibition of a motion picture is not part of an exhibition
of a

					
	 	 	 	 	 
	 
	 	-19-
	 	 

 

 

collection or package of motion pictures and/or other programming available to a consumer or
end user. (vi) “TWC’s Pay Television Service” means the applicable licensee to whom TWC licenses
the Pay TV Rights in a Picture. Notwithstanding anything herein, Pictures transmitted or delivered
by TWC’s Pay Television Service on an “on-demand” basis may contain advertisements so long as such
advertisements are not exhibited immediately prior to, after the selection of, during or
immediately following the exhibition of a Picture on such “on-demand” services.

     (c) Second Window: The “Second Window” shall be twelve (12) months with respect to
Pictures Initially Theatrically Released during 2010, and nine (9) months for Pictures Initially
Theatrically Released thereafter. The Second Window for each Picture will commence six (6) years
and sixty (60) days following the conclusion of its First Window, provided however TWC may elect in
its sole discretion to start a Picture’s Second Window on a date that is not earlier than one (1)
year and sixty (60) days following the conclusion of such Picture’s First Window. During the
Second Window, a Picture may be exhibited on an unlimited number of Exhibition Days on an
“on-demand” basis and on up to 250 Exhibition Days over all linear channels of TWC’s Pay Television
Service. During the Second Window, a Picture (including any and all versions thereof) may be
exploited (other than by TWC’s Pay Television Service) solely by means of Theatrical,
Non-Theatrical, Home Video and Video Downloading distribution, and solely during the last six (6)
months of a Picture’s Second Window, such Picture (including any and all versions thereof) may also
be exploited by means of Pay-Per-View and Video-On- Demand.

     (d) Third Window: The “Third Window” shall be six (6) months, commencing on the date
which is six (6) years and sixty (60) days following the conclusion of each Picture’s Second
Window, provided however TWC may elect in its sole discretion to start a Picture’s Third Window on
a date that is not earlier than one (1) year and sixty (60) days following the conclusion of such
Picture’s Second Window. During the Third Window, a Picture may be exhibited on an unlimited
number of Exhibition Days on an “on-demand” basis and on up to 150 Exhibition Days over all linear
channels of TWC’s Pay Television Service. During the Third Window, a Picture (including any and all
versions thereof) may be exploited (other than by TWC’s Pay Television Service) solely by means of
Theatrical, Non-Theatrical, Home Video and Video Downloading distribution, as well as on a
third-party Pay Television Service.

     (e) Intervals: Subject to the “Black-Out Periods” described below, during the
period between the First Window and Second Window for each Picture (the “First Interval”), a
Picture may be exploited in any and all media other than on a third-party Pay Television Service or
other similar subscription service, and solely after the expiration of the first year of such First
Interval, TWC may also exploit such Picture by means of a third-party Pay Television Service or
other similar subscription service that is solely made available on an “on-demand” access basis
subject to certain restrictions (the foregoing prohibition shall not be construed to preclude TWC
from selling, licensing or exhibiting such Pictures (or any version thereof) on the “on demand”
services of an advertiser-supported basic cable or broadcast television network such as, for
example, TBS, Turner, AMC, A&E and other similar channels). Subject to the Black-Out Periods,
during the period between the Second Window and Third Window for each Picture (the “Second
Interval”), a Picture may be exploited in any and all media including, without limitation,
on a third-party Pay Television Service.

     (f) Advertising/Promotion Restrictions: Neither TWC nor Licensor (nor any of their
licensees) shall advertise, promote or publicize, or authorize the advertisement, promotion or
publicity of, any exhibition of any Picture (or any version thereof) in the Territory which is to
occur during the First Interval earlier than the commencement of such First Interval (and in no
event shall any such advertisement, promotion or publicity occur during such Picture’s First Window
or Second Window),

					
	 	 	 	 	 
	 
	 	-20-
	 	 

 

 

Neither TWC nor Licensor (nor any of their licensees) shall advertise, promote or publicize,
or authorize the advertisement, promotion or publicity of, any exhibition of a Picture (or any
version thereof) in the Territory which is to occur during the Second Interval earlier than the
commencement of such Second Interval (and in no event shall any such advertisement, promotion or
publicity occur during such Picture’s Second Window or Third Window). Neither TWC nor Licensor
shall advertise, promote or publicize, or authorize the advertisement, promotion or publicity of,
any exhibition of a Picture (or any version thereof) on a third-party Pay Television Service in
the Territory which is to occur during the Third Window for such Picture, earlier than the date on
which TWC’s Pay Television Service is permitted to advertise, publicize and promote such Picture
in connection with such Picture’s exhibition on such service during its Third Window. Nothing
contained in this Paragraph shall prohibit TWC and Licensor (as applicable) from advertising,
promoting or publicizing, or authorizing the advertisement, promotion or publicity of, (x) the
Theatrical, Non-Theatrical, Home Video and Video Downloading distribution of each Picture in the
Territory at any time, or (y) the Pay-Per-View and Video-On-Demand exhibition of each Picture in
the Territory at any time during the last six (6) months of such Picture’s First Window or Second
Window or in the Black-Out Period immediately following such First Window or Second Window, or (z)
the exhibition of each Picture in the Territory on a third-party Pay Television Service during
such Picture’s Third Window.

     (g) Previews: Each Picture may be exhibited during five (5) national previews, in the
aggregate, during each of the First, Second and Third Windows for such Picture. With respect to
non-national previews, TWC’s Pay Television Service will not authorize a Picture to be exhibited
during more than six (6) such previews during each of the First, Second and Third Windows for such
Picture per channel of TWC’s applicable Pay Television Service in a given system of a given
distributor. Notwithstanding the foregoing, during each of the First, Second and Third Windows for
a Picture, TWC’s Pay Television Service will not authorize such Picture to be exhibited during
more than two (2) national previews during a given window for such Picture “on demand” (with each
of such “on demand” previews being a maximum of five (5) consecutive days’ duration).

     (h) Black-Out Periods: Following each of the First Window and the Second Window
with respect to each Picture, and preceding each of the Second Window and Third Window with respect
to each Picture, there shall be a “Black-Out Period” of thirty (30) days during which such Picture
(including any and all versions thereof) may be exploited solely by means of Theatrical,
Non-Theatrical, Home Video and Video Downloading distribution (and, during the Black-Out Periods
following each of the First Window and Second Window, Pay-Per-View and Video-On-Demand).

     (i) Miscellaneous: The parties acknowledge that certain customary terms and conditions
exist (as the same may be amended, extended, and/or restated) between TWC and TWC’s Pay Television
Service including, without limitation, as to items to be delivered in connection with each Picture;
use of company names/logos in connection with exploitation of the Pay TV Rights; representations,
warranties and indemnities to be given to TWC’s Pay Television Service as to the rights in and to
the Pictures; and events of force majeure. Licensor agrees to accept and comply with such terms,
and to undertake responsibility for same, insofar as the Pictures are concerned. Notwithstanding
the foregoing, the parties agree that the Pay TV Rights granted to TWC hereunder with regard to
windows, intervals, black-out periods and holdbacks shall be materially consistent with the terms
generally applicable to other TWC pictures licensed to TWC’s Pay Television Service and that, in
the event TWC’s Pay Television Service modifies any of the foregoing terms or definitions for other
motion pictures licensed to it by TWC, such modifications shall apply to the Pictures in the same
manner as such modifications apply to other TWC pictures licensed to TWC’s Pay Television Service.

					
	 	 	 	 	 
	 
	 	-21-
	 	 

 

 

SCHEDULE 4

GROSS RECEIPTS

(a) Definition of Gross Receipts — “Gross Receipts” means, collectively, all “Theatrical
GR”, “Pay TV GR” and “Free TV GR” (as such terms are defined herein), subject to TWC’s customary
“gross receipts exclusions” as set forth in Paragraph (a)(iv) below. TWC makes no representation
or warranty as to the amount or sufficiency of Gross Receipts. For purposes of clarification, if
TWC enters into a transaction with respect to the distribution of a Picture with any affiliate
company, the arrangement shall be an arms length transaction in accordance with the motion picture
industry’s customary business practices. Upon payment thereof to TWC, all Gross Receipts shall be
deposited in the first instance in TWC’s segregated account prior to being disbursed as set forth
herein.

          (i) “Theatrical GR” means all non-refundable sums actually received by or credited to TWC or
its affiliates from exploitation of the Theatrical Rights in the Pictures during the License Term.
Theatrical GR shall be calculated on an “at source” basis (i.e., at the level of the direct
distributor or sub-distributor, but not at the level of the end user [e.g., theatrical exhibitor,
television network, etc.]), notwithstanding whether TWC or any sub-distributor is the first
source.

          (ii)
 “Pay TV GR” means with respect to each Picture the applicable license fees set forth on
the following chart to the extent actually earned and received by TWC during the License Term (and
for purposes of this Agreement, “U.S. Film Rentals” means, on a Picture-by-Picture basis, the
amount of Theatrical GR actually earned, collected and retained by TWC in the first 12 months
following

	 	 	 	 	 	 	 	 	 	 	 	 	 
	U.S. Film Rentals	 	% Fee	 	License Fee (at max)	 	Cumulative
	$0 - $5,000,000
	 	 	49.50	%	 	$	2,475,000	 	 	$	2,475,000	 
	$5,000,000 - $10,000,000
	 	 	34.20	%	 	$	1,710,000	 	 	$	4,185,000	 
	$10,000,000 -$20,000,000
	 	 	26.10	%	 	$	2,610,000	 	 	$	6,795,000	 
	$20,000,000 - $30,000,000
	 	 	13.05	%	 	$	1,305,000	 	 	$	8,100,000	 
	$30,000,000 - $42,500,000
	 	 	11.70	%	 	$	1,463,000	 	 	$	9,563,000	 
	$42,500,000 - $54,000,000
	 	 	9.00	%	 	$	1,035,000	 	 	$	10,598,000	 

such Picture’s Initial Theatrical Release):

          (iii)
“Free TV GR” means all non-refundable sums actually received by or credited to
TWC or its affiliates from exploitation of the Free TV Rights in the Pictures during the License
Term.

          (iv) TWC’s “gross receipt exclusions” means box office receipts, concession receipts, entrance
or ride receipts or any other receipts of any theatre or other exhibitor or any theme park and
receipts of: broadcasters and other transmitters, including, but not limited to, radio and
television (e.g., free, pay, basic cable and pay-per-view) by any means or device, whether now
known or hereafter devised including, but not limited to, over-the-air, cable, closed circuit,
satellite, microwave, laser and the like; book or music publishers; entities who make payments to
music publishers; wholesale or retail distributors, licensors or sellers of phonograph records,
printed editions of music, audio-visual cassettes, DVD’s, laser discs, video discs or any similar
devices hereafter devised; record companies and retailers or any other similar user, whether or not
any or all of such foregoing entities are owned, operated or controlled in whole or in part by TWC
or its affiliates; (ii) Amounts collected as taxes for payment of taxes as admission, sales, use or
value-added taxes; (iii) Film rental contributed to charitable organizations; (iv) Receipts from
“Subsequent Productions” (i.e., productions such as theatrical or direct-to-video prequels,
sequels, remakes, television series and productions, stage plays, or other productions based in
whole or in part upon an Eligible Picture or any element thereof) or any other derivative works

					
	 	 	 	 	 
	 
	 	-22-
	 	 

 

 

(e.g., live stage plays); (v) The amounts of all adjustments, credits, allowances (other than
advertising allowances) rebates and refunds given or made to sub-distributors, exhibitors and
licensees; provided that all such adjustments, credits, etc. shall be commercially reasonable and
made in good faith. To the extent such amounts represent a return of amounts previously included
in Gross Receipts, an appropriate adjustment shall be made.

     (b) Distribution Fee: “Distribution Fee” means 5% of Gross Receipts (inclusive
of
subdistributor fees, if any); provided, however, that if aggregate U.S. Film Rentals for
Pictures Initially
Theatrically Released in any given calendar year of the Term exceeds $37,500,000 (calculated
based on
the total number of Pictures Initially Theatrically Released in a given year, regardless of
when the
Theatrical GR for such Pictures are actually received), the Distribution Fee shall be
prospectively
reduced to 2.5% solely with respect to Theatrical GR in excess of $37,500,000 for the Pictures
Initially
Theatrically Released in such calendar year. For the avoidance of doubt, the Distribution Fee
on Pay TV
GR and Free TV GR shall always remain at 5% irrespective of the amount of U.S. Film Rentals.

     (c) Application of Gross Receipts — Gross Receipts shall be applied on a continuing
and
rolling basis as follows: (i) first, to TWC in the amount of the applicable Distribution Fee,
and (ii) then
100% to Licensor. TWC shall be entitled to deduct withholding and any other applicable tax
on any
amounts due and payable to Licensor, if such tax is required by law. Notwithstanding the
foregoing,
TWC will pay Licensor its share of Pay TV GR as follows: (a) 2/3 within five (5) business days
following the date which is sixty (60) days after the commencement of the First Window and (b)
1/3 five
(5) business days following the date which is twelve (12) months after the date on which the
first
payment is due. In the event Licensor does not receive timely payment of Pay TV GR and TWC
fails to
cure such failure within five (5) business days after receipt of written notice from Licensor,
Licensor
shall have the right to prospectively terminate this Agreement (i.e., as to Pictures the
Rights to which
have not yet formally been transferred to TWC) subject to any and all existing grants and/or
licenses to
third parties.

     (d) Third Party Participations/Residuals —  Licensor shall be solely and
exclusively
responsible for the calculation, accounting and payment of any and all third party
participations (whether
in the form of percentage contingent compensation, deferments, bonuses or otherwise) and
guild-mandated residual and supplemental market payments (if any) that become payable by reason of
the
exploitation of the Picture in the Territory, and Licensor does hereby indemnify and hold TWC
harmless
with respect to any claims by any person or entity in connection with any such payment.

     (e) Cross-Collateralization — All Gross Receipts with respect to each Picture shall be
cross-collateralized among all media and all territories comprising the Territory but
shall not be cross-collateralized with other Pictures or with any other motion pictures.

					
	 	 	 	 	 
	 
	 	-23-
	 	 

 

 

Schedule 5

Credits

In the event Licensor requests one or more changes in the credit provisions, TWC agrees to give
good faith consideration to any such requests. Without limitation of the foregoing, TWC agrees upon
Licensor’s written request to ask TWC’s Pay Television Service to approve a modification to the
credits allowing Licensor’s credit to appear in first position. In the event such request is
denied, TWC agrees that Licensor’s credit shall appear more prominently than TWC’s (e.g., larger
and/or of longer duration) in a manner to be mutually agreed by the parties in good faith.

					
	 	 	 	 	 
	 
	 	-24-
	 	 

 

 

Schedule 6

Termination

Each of Licensor and TWC shall have a right (but not the obligation) solely for 30 days following
the occurrence of one of the following events, to terminate this Agreement prospectively (and such
termination shall expressly not apply to any Picture for which the Rights were granted to TWC
prior to the date of such termination) effective upon written notice to the other party (within
such 30 day period) in the event that (i) TWC ceases to carry on business as a motion picture
distributor or (ii) an “Insolvency Event” (as defined below) has occurred for either party hereto;
provided that in the event of any such termination, TWC shall be entitled to its share of Gross
Receipts (as set forth in the Agreement) for all Pictures for which the Rights were granted to TWC
prior to the date of such termination and Licensor’s representations and warranties and
indemnification obligations hereunder shall survive any such termination.

As used herein, “Insolvency Event” means with respect to either party, the occurrence of the
following: (a) (i) a case or other proceeding shall be commenced, without the application or
consent of such person, in any court, seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of such person, the appointment of
a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such person of
all or substantially all of its assets, or any similar action with respect to such person under any
law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of
debts, or an order for relief in respect of such person shall be entered in an involuntary case
under the United States federal bankruptcy laws or other similar laws now or hereafter in effect in
any jurisdiction, or (ii) such person shall commence a voluntary case or other proceeding under any
applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar
law now or hereafter in effect in any jurisdiction, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee (other than a trustee under a deed
of trust, indenture or similar instrument), custodian, sequestrator (or other similar official)
for, such person or for any substantial part of its property; and (b) provided such filing or
proceeding is involuntary, such case or proceeding shall continue undismissed, or unstayed and in
effect, for a period of forty five (45) consecutive days.

					
	 	 	 	 	 
	 
	 	-25-

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