Document:

Exhibit 10.39

Exhibit 10.39

AMENDMENT TO PROMISSORY NOTE OF MARCH 3, 2008

The undersigned, Loco Lobo, LLC (“Payee”), at 1201 First St. North, #203, Jacksonville Beach, FL 32250, agrees to modify the terms of the Promissory Note (“Original Note”) for $75,000 made by Crystal Magic, Inc., a Florida corporation (“Maker”) dated March 3, 2008, as follows:

The first paragraph of the aforementioned note shall now be replaced with the following two paragraphs:

FOR VALUE RECEIVED, Crystal Magic, Inc., a Florida corporation ("Maker"), promises to pay to the order of Loco Lobo, LLC (“Payee”), at 1201 First St. North, #203, Jacksonville Beach, FL 32250, the principal sum of seventy-five thousand dollars ($75,000) simultaneous with the closing of any additional financing that exceeds $1.5 million that occurs after the Company has begun trading as a publicly trading company on the OTC bulletin board (the "Maturity Date"), unless Payee consents to an extension of the Maturity Date,­­ together with inter­est on the principal amount hereof at the rate of 6% per annu­m. Payments on both principal and interest are to be made in lawful money of the United States of America unless Payee agrees to another form of payment.

Notwithstanding the paragraph above, should John Wolf be terminated from his employment with Propell Corporation under his current Employment Agreement as amended on December 21, 2008, for any reason other than Cause (as defined in such Employment Agreement) or voluntary termination, this note shall become payable, such payment to be made in three equal monthly installments of $25,000 each, together with inter­est on the remaining principal amount hereof at the rate of 6% per annu­m, with the first of the three payments due within 30 days of such termination.

All other terms of the Original Note remain in force, unless superseded by this document.

						
	CRYSTAL MAGIC, INC.

	 
	LOCO LOBO, LLC

	 
	 
	 

	By:

	/s/ Steven M. Rhodes
	 
	By:

	/s/ John C. Wolf

	Name:  Steven M. Rhodes

	 
	Name:  John C. Wolf

	Title:    President

	 
	Title:

	Manager

In the event that Crystal Magic, Inc. fails to make a payment under the Original
  Note as amended (the “Amended Notes”) when due, Propell Corporation hereby guarantees payment of the debt evidenced by the Amended Notes in
  accordance with the terms of the Amended Notes, such guarantee to be effective only from and after the date that (i) the Option Agreement that provides
  Steve Rhodes with the option to purchase shares of Class A Preferred Stock of Crystal Magic, Inc, is terminated  without exercise, (ii) the financial
  statements of Crystal Magic, Inc are consolidated with the financial statements of Propell Corporation in compliance with accounting standards and principles,
  including, GAAP and all  SEC rules and regulations and (iii) the board of directors of Propell Corporation  is  comprised of five or more
  members, a majority of which are  deemed to be independent under Item 407 of Regulation S-K. 

			
	PROPELL CORPORATION

	 

	 
	 

	By:

	/s/ Edward L. Bernstein
	 

	Name:  Edward L. Bernstein

	 

	Title:    CEOUnassociated Document

    EXHIBIT
10.18

    SEVEN
ARTS FILMED ENTERTAINMENT LIMITED

    30
Farringdon Street

    London
EC4A 4HJ

    UK

    

    As of
November 1, 2004

    

    

    Seven
Arts Pictures Inc.

    6310 San
Vicente Boulevard, Suite 510

    Los
Angeles, California 90048

    

    Re:  INTERCOMPANY
AGREEMENT

    

    Gentlemen:

    

    You ("SAP") are hereby appointed as the
independent agent of us ("SAFE") to enter into agreements and to conduct
business on behalf of us in all aspects related to the motion picture
business.  All of your actions will be taken pursuant to the direction
of the Board of Directors of us and you shall take no actions without our
approval.  All results and proceeds of any actions and services
performed by you shall belong to us and are hereby assigned to us in full for no
further consideration.  The intention of this agreement is that SAP
will be an independent agent under the terms of the tax treaty between the
United States and the United Kingdom as in effect or as it may be amended from
time to time, and therefore the office of SAP in the United States shall not be
and is not intended to be a "permanent establishment" of us.

    

    Please confirm you agreement to the
foregoing by signing below where indicated.

    

    SEVEN ARTS PICTURES
FILMED

    ENTERTAINMENT LIMITED

    

    

    By:  __/s/ John
Bottomley__________

    

    AGREED
AND ACCEPTED

    

    

    SEVEN
ARTS PICTURES INC.

    

    

    By:  __/s/
Peter Hoffman_____________

    
 

    
      
         

      

      
        1exhibit10-19.htm

    
      EXHIBIT
10.19

      SEVEN
ARTS PICTURES INC.

       

      10202 W.
Washington Blvd.

       

      David
Lean Bldg. #430

       

      Culver
City, CA 90232

       

      September
2, 2004

       

      SEVEN
ARTS FILMED ENTERTAINMENT LIMITED The Old Laundry, Ossington
Buildings

       

      London W1
U 4 JZ

       

      UNITED
KINGDOM

       

      RE: Intercompany
Agreement

       

      Gentlemen:

       

      Please
make reference to the attached Intercompany Agreement among your predecessors in
interest (the "UK Companies") and us ("SAP"). You ("SAFE") as successor in
interest agree to be bound by the terms of the Intercompany Agreement in the
same manner as the UK Companies and on the same terms. Pursuant to the Share
Exchange Agreement between SAP and your parent company Seven Arts Pictures PLC
("PLC"), and this Agreement, SAP has agreed that the gross sums realized by SAP
of concurrent date under the Intercompany Agreement and this, Amendment less any
costs incurred by SAP and taxes due by SAP to any taxing authorities shall be
payable to PLC as additional capital contributions by SAP.

       

      SAP and
SAFE agree to the following miscellaneous terms:

       

    

    
              1.           Further Assurances. The parties hereto
agree to promptly do, make, execute, deliver or cause to be done, made, executed
or delivered all such further acts, documents and things as may reasonably be
required for the purpose of giving full force and effect to this Agreement,
whether or not after the execution hereof

       

              2.           No Waiver. The failure at any time to
require performance of any provision of this Agreement shall not affect the full
right to require such performance at any later time. The waiver of a breach of
any provision shall not constitute a waiver of the provision of any succeeding
breach.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

              3.           Severability. Should any provision of
this Agreement be held to be invalid, the remainder of this Agreement shall be
effective as though such invalid provision had not been contained in this
Agreement.

       

              4.           Counterparts. This Agreement may be
executed in several counterparts, each of which shall constitute an original and
all which together shall constitute one agreement.

       

              5.           Effective Agreement. The transaction
of transfer, assignment and assumption as contemplated herein shall be effective
upon the execution hereof without further act or formality.

       

              6.           Inurement.  This Agreement
shall endure to the benefit of and be
binding upon the parties hereto, their heirs, executors, administrators,
successors and assigns.

       

      Please
confirm your agreement to the foregoing by signing below where
indicated.

       

    

     

                                    Very truly yours,
 

    SEVEN ARTS PICTURES
FILMED

    ENTERTAINMENT LIMITED

    

    

    By:  _____/s/ Peter
Hoffman_______________

    

    AGREED
AND ACCEPTED

    SEVEN
ARTS PICTURES INC.

    

    

    By:  __/s/
John Bottomley__________

    

    

    
      
        
        

      

      
        2exhibit10-20.htm

    EXHIBIT
10.20

    SEVEN
ARTS PICTURES PLC

    30
Farringdon Street

    London
EC4A 4HJ

    UK

    

    As of November 1, 2004

    

    

    

    Seven
Arts Pictures Inc.

    6310 San
Vicente Boulevard, Suite 510

    Los
Angeles, California 90048

    

    Re:  INTERCOMPANY
AGREEMENT

    

    Gentlemen:

    

    You ("SAP") are hereby appointed as the
independent agent of us ("PLC") to enter into agreements and to conduct business
on behalf of us in all aspects related to the motion picture
business.  All of your actions will be taken pursuant to the direction
of the Board of Directors of us and you shall take no actions without our
approval.  All results and proceeds of any actions and services
performed by you shall belong to us and are hereby assigned to us in full for no
further consideration.  The intention of this agreement is that SAP
will be an independent agent under the terms of the tax treaty between the
United States and the United Kingdom as in effect or as it may be amended from
time to time, and therefore the office of SAP in the United States shall not be
and is not intended to be a "permanent establishment" of us.

    

    Please confirm you agreement to the
foregoing by signing below where indicated.

    

    

    SEVEN ARTS PICTURES PLC

    

    

    By:  ___/s/ Peter
Hoffman___________

    

    AGREED
AND ACCEPTED

    

    

    SEVEN
ARTS PICTURES INC.

    

    

    By:  ___/s/
Susan Hoffman____________

     

    
      
        
        

      

      
        1Unassociated Document

    EXHIBIT
10.21

    DISTRIBUTION
AGREEMENT

     

    THIS DISTRIBUTION AGREEMENT (the
"Agreement") is dated as of March 31, 2008 between SEVEN ARTS FILMED
ENTERTAINMENT (UK) LIMITED (the "Owner"); and SEVEN ARTS PICTURES LOUISIANA LLC
(the "Distributor").

     

    WHEREAS:

     

    1. The Owner
owns the right to distribute the motion pictures listed on Schedule 1 (the
"Pictures").

     

    2. The Owner
wishes to grant the Distributor the exclusive right to exhibit, distribute and
otherwise exploit the Pictures in the Territory on the terms and conditions
hereinafter set forth.

     

    3. The
Distributor wishes to exhibit, distribute and otherwise exploit the Pictures in
the Territory on the terms and conditions hereinafter set forth.

     

    4. All terms
herein shall have the meanings described herein or on Exhibit "4."

     

    NOW THEREFORE in consideration
of the mutual covenants and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     

    ARTICLE
I

     

    GRANT
OF RIGHTS

     

        1.1 Grant of Rights. The Owner
hereby grants to the Distributor the following rights
("the Rights") to exhibit, exploit and distribute the Pictures in the Territory
and throughout the Term: Theatrical Rights, Non-Theatrical Rights, Television
Rights, Home-Video Rights, all Incidental Rights in and to any of the foregoing
Rights, as well as any Derivative Rights, Music Rights, Phonorecord Rights,
Merchandising Rights, or Publishing Rights.

     

        1.2 Approvals. Distributor shall
have the right to approve all "cuts," including the "final"
cut of the Pictures and the right to re-edit the Pictures as Distributor
determines is reasonable or appropriate in the Distributor's sole
discretion.

     

    ARTICLE
2

     

    DELIVERY
AND CREDITS

     

        2.1Credits. The Distributor shall
comply with the Owner's written instructions to credits
to be accorded on the screen or in any paid advertising and publicity issued by
the Distributor or under the Distributor's control, and shall provide in its
agreements with sub-distributors and licensees that such sub-distributor and/or
licensee shall also comply therewith and shall include the same provisions in
any agreements entered into by such sub-distributor
with its sub-distributor(s), if any, provided that such written instructions
have been approved in advance and in writing by the Distributor. 

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This
undertaking by the Distributor is solely for the benefit of the Owner and not
for the benefit of any third party. No casual or inadvertent failure to comply
with contractual obligations as to credits to be accorded on the screen or in
any paid advertising and publicity by the Distributor or any of its
subsidiaries, affiliates, sub-distributors or licensees to comply with
contractual obligations as to credits to be accorded on the screen or in any
paid advertising and publicity shall constitute a breach of this Agreement. Upon
Distributor's receipt of notice from the Owner that the Distributor or its
subsidiaries have failed to comply with the credits furnished to the Distributor
by the Owner, the Distributor shall take all such steps as are reasonably
practical to cure such failure with respect to future screen credits,
advertising and publication, provided the credits accorded by the Owner conform
to the provisions of this section. In the event that such failure was casual or
inadvertent, there shall be no other remedy available to any person against the
Distributor, its subsidiaries, affiliates, sub-distributors or licensees for any
such failure. In no event shall the Owner be entitled to seek or receive
injunctive relief in connection with any failure by the Distributor to comply
with the provisions of this Section. In no event shall the Distributor be liable
or have any responsibility for any acts or omissions with respect to credits
created by or under the control of an exhibitor, newspaper, magazine,
broadcaster or other parties who are not subsidiaries of the
Distributor.

     

        2.2 Delivery. The Pictures shall be
delivered to the Distributor in accordance with a delivery
schedule approved by the Distributor, but in no event later than June 30, 2008
(the "Expected Delivery Date"). However, the Expected Delivery Date may be
extended for up to a period up to 90 days at the Owner's option. Delivery of the
Pictures shall be accompanied by delivery to the Distributor of the materials
set forth on Exhibit "2" hereto.

     

    ARTICLE
3

     

    TERM

     

        3.1 Initial Term. The initial term (the
"Initial Term") of license granted in this Agreement
shall be 25 years from the date hereof

     

        3.2
Extensions.
This Agreement shall be automatically renewed for two further
periods
of 25 years and 45 years (the "Second and Third Terms", respectively), unless
notice of termination is delivered to the Owner by the Distributor between six
months and three months prior to the expiration of the Initial Term or the
Second Term, as the case may be.

     

        3.3 Right of First Negotiation /Last Refusal After the
Term has expired:

     

            (a)If the
Owner proposes to sell, license or otherwise exploit any Rights granted
to the Distributor hereunder, the Owner shall first give the Distributor notice
thereof The Distributor shall have the exclusive right to negotiate in good
faith with the intention of reaching an agreement to acquire the applicable
Rights specified in the Notice, for a period of 60 days after receipt of the
Notice. The parties agree that the first negotiation/last refusal rights set out
herein are material and that damages are an inadequate remedy for any violation
of any such Rights. Therefore, the Distributor shall be entitled to equitable
relief to prevent a breach of or to mandate compliance with its first
negotiation/last refusal rights granted herein. If the Distributor and the
Owner do not reach an agreement as to the material terms for an agreement to
acquire such Rights within the 60 day period, the Owner may negotiate with third
parties with respect to such Rights, subject to the provisions of Subsection 3.3
(b) below.

    
      
         

      

      
        2

        
          

        

      

      
         
        (b)If the
Owner makes or receives a bona fide offer with respect to the applicable
Rights, the material terms of which are less favorable than the last offer made
by the Distributor, and if the Owner proposes to accept such offer, the Owner
shall give Notice to the Distributor of the material terms and conditions of the
third party offer and the name of the person making the offer. The Distributor
shall have the right to acquire the interest in the applicable Rights on the
same material terms and conditions as the third party offer by giving Notice of
acceptance thereof within 15 days after the Notice Date. Otherwise, the Owner
shall be free to accept the third party offer. However, if the proposed third
party transaction is not consummated, the Distributor's first negotiation/last
refusal rights under this Section 3.3 will apply to each further offer relating
to the applicable Rights of the Owner.

    

     

    ARTICLE
4

     

    PAYMENTS

     

        4.1
Distributor shall pay and guarantee the following to Owner:

     

              100% of
Net Receipts as defined on Exhibit "3" attached hereto.

     

        4.2 Security Interest. As security
for the full and timely payment and performance of
Distributor's obligations hereunder, the Distributor hereby grants to Owner a
security interest, charge and lien upon: (i) all of Distributor's rights and
interest in the Rights licensed hereunder; (ii) all of Distributor's rights and
interest as lessor or licensor under each of the Sub-Distribution Agreements,
including without limitation, Distributor's right to payment and all payments
there under, and (iii) any and all other rights and interest of Distributor
in,
to and in connection with the Pictures, now or hereafter acquired,
including without limitation, all tangible and intangible assets, contracts,
instruments, chattel paper, accounts, deposit accounts, cash, rights to payment,
inventory, rights under copyright, and any and all proceeds, substitutions or
replacements of any of the foregoing (collectively the "Distributor's
Collateral").

     

    ARTICLE
5

     

    DISTRIBUTION
POLICY

     

        5.1 General. With
respect to the Rights, the Distributor shall have the broadest possible
latitude in the exploitation thereof, and the exercise of its judgment in all
matters pertaining thereto shall be final. In this connection, the Distributor
shall have complete authority to exploit the Rights in accordance with such
sales methods, policies and terms as it may, in its sole discretion, determine;
provided that it shall employ its reasonable best efforts to maximize the
commercial benefits to the Owner from the exploitation of the Pictures. Subject
to the foregoing, the Distributor has not made any express or implied
representation, warranty, guarantee or agreement as to the total amount of
proceeds which will be derived from the exploitation of the Rights, nor has the
Distributor made any express or implied representation, warranty, guarantee or
agreement that there will be any sums payable to the Group hereunder or
that the
Rights will be exploited continuously. All matters relating to the exploitation
of the Rights (including the scope and duration thereof) shall be decided by the
Distributor in its sole discretion. In no event shall the Distributor incur any
liability based upon any claim by the Owner that the Distributor has failed to
realize receipts or revenue which should or could have been realized. The
Distributor may settle, compromise, adjust, cancel, waive, give allowances to,
not collect or not seek any remedy for collection of any contracts, debts or
sums due with respect to any Rights, for any reason whatsoever.

    
      
         

      

      
        3

        
          

        

      

      
         
    5.2
Sub-Distributors.
Subject to the terms hereof, the Distributor may exploit the
Rights
either itself or through such other parties, including Affiliates of the
Distributor, as the Distributor may, in its sole discretion, determine and,
without limiting the foregoing, shall have the express right to enter into
sub-distribution and licensing agreements which may extend beyond the Term of
this Agreement. The Distributor may license the Rights connected therewith, in
whole or in part, in good faith as may be consistent with the Distributor's
general practice in such matters, to any and all other agencies in which the
Distributor or its Affiliates may have an interest directly or indirectly upon
such terms and rentals as the Distributor may deem fair and proper under the
circumstances.

    

     

    ARTICLE
6

     

    REPRESENTATIONS,
WARRANTIES AND COVENANTS

     

        6.1 The
Owner's Warranties. The Owner hereby warrants, represents and covenants
as follows:

     

    (a) Owner is
a corporation organized under the laws of England.

     

    (b) Owner has
full power, right and authority to execute, deliver and fully perform this
Agreement, and the execution, delivery and performance of this Agreement by the
Owner has been duly authorized and this Agreement will be binding upon the Owner
upon its execution.

     

    (c) Owner
owns or will own all of the Rights, and has not previously assigned, licensed or
transferred in any way any of the Rights.

     

    (d) There
are, and will be, no claims, liens, encumbrances, limitations, restrictions or
rights of
the nature (including, without limitation, any liens or security interests in
favor of any bank or other third party which may provide production financing
for the Pictures or may have otherwise loaned money to the Owner or any other
producer of the Pictures) in or to the Pictures or any part thereof, except in
favor of the Bank, or unless first expressly approved by the Distributor in
writing, excluding only any liens which as a standard practice in the industry
are required to be entered into in favor of any collective bargaining entity in
connection with the Pictures, and then only if such entity enters into a
standard subordination agreement with respect to such lien subordinating its
security interest in and to the Rights.

     

    (e) The Owner
has, or will have, as of the date of Delivery of the Pictures, fully paid,
satisfied,
cured or discharged at the time due or required all of the
following:

    
      
         

      

      
        4

        
          

        

      

      
         
            i) all claims
and rights of any person in respect of copyrights in literary,
dramatic, musical rights and other property or rights in or to all stories,
plays, scripts, scenarios, themes, incidents, plots, characters, dialogue,
music, words and other material of any nature whatsoever appearing, used or
recorded in the Pictures;

    

     

             ii) all
claims and rights of any person in respect of inventions and patent rights with
respect to the recording of any and all dialogue, music and other sound effects
recorded in the Pictures and with respect to the use of all equipment,
apparatus, appliances and other materials used in the photographing, recording
or otherwise in the manufacture of the Pictures;

     

                iii) all
claims and rights with respect to the use, distribution, performance, exhibition
and exploitation of the Pictures, and any music contained therein;

     

                iv) all costs
of producing and completing the Pictures, including, without limitation, any and
all compensation including residuals (to the extent only that residuals payable
in connection herewith are then due and payable), pension and welfare benefits
and other payments required by applicable guild or union agreements, due or
which may become due to any actors, musicians, directors, writers or others who
participated in the Pictures;

     

                v) any
liens, claims, charges, encumbrances, restrictions, agreements, commitments or
arrangements whatsoever with any person, firm or corporation, or any obligation
then due and payable and all defaults under, or breaches of, any contract,
license or agreement which could, or would, in any way interfere with, impair,
abrogate or adversely or otherwise affect any of the Rights granted to the
Distributor hereunder; and

     

                vi) any other
payments of any kind required to be made in respect, or as a result of any use
of the Pictures, except to the extent expressly required to be defrayed by the
Distributor hereunder.

     

            (f) None of
the Pictures, nor any parts thereof, nor any materials contained therein or
synchronized therewith, nor the titles thereof, nor the exercise by the
Distributor of any right, license or privilege respecting the Pictures, violates
or will violate, or infringes or will infringe, any trademark, trade name,
contract, agreement, copyright (whether common law or statutory), patent,
literary, artistic, dramatic, personal, private, civil or property right or
right of privacy or "moral rights of authors" or any other right whatsoever of,
or slanders or libels, any person, firm, corporation or association
whatsoever.

     

            (g) The Owner
owns and controls, or prior to Delivery of the Pictures hereunder will own or
control, without any limitations or restrictions whatsoever, except as expressly
approved by the Distributor in writing, all motion pictures, performance and all
other Rights in and to the Pictures and all the soundtracks thereof, and has
obtained or will obtain all necessary licenses required for the production,
synchronization, exhibition, performance, distribution, marketing and
exploitation of the Pictures (including the music contained therein, subject
only to the payment of such performing fees, if any, as are customarily payable
by exhibitors to such performing rights society as shall have jurisdiction) for
any and all purposes and for every means,
method and device now or hereafter known or required for the full, complete and
unlimited exercise and enjoyment by the Distributor of each and all of the
Rights.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

            (h)The
performing rights to all musical compositions contained in the Pictures are, or
will be
prior to Delivery, (i) controlled by the American Society of Composers, Authors
and Publishers, Broadcast Music Inc. or their Affiliates, or (ii) in the public
domain, or (iii) owned or controlled by the Owner.

     

            (i)The
copyright in the Pictures is and will be valid and subsisting at all times
hereafter
and no part thereof (excluding music), is in the public domain, except for stock
or re-used film and except as expressly approved by the Distributor in writing.
All material upon which the Pictures is based or which is contained in the
Pictures is either (i) owned by the Owner, (ii) properly licensed to the Owner,
or (iii) in the public domain.

     

            (j)The main
and end titles of the negative and pre-print materials of the Pictures
contain,
or will contain, on Delivery:

     

                i) A
copyright notice in the form complying with the United States Copyright Revision
Act of 1976, as amended, and the Universal Copyright Convention, with the phrase
"All Rights Reserved";

     

                ii) The
following legend shall appear in accordance with the Distributor's customary
practice (i.e., located in the end titled at or near the cast of
characters):

     

    "THIS
MOTION PICTURE IS PROTECTED UNDER THE
LAWS OF CANADA
AND THE UNITED STATES OF AMERICA
AND OTHER COUNTRIES. UNAUTHORIZED DUPLICATION, DISTRIBUTION OR EXHIBITION
MAY RESULT IN CIVIL LIABILITY AND CRIMINAL PROSECUTION"; and

     

                iii) All
necessary and proper credits for the actors, directors, writers and all other
persons appearing in or in connection with the production of the Pictures who
are entitled to receive the same. The Distributor shall have the right to
designate the form of, and to receive, credit in connection with the rights
granted herein (including, without limitation, a distributor's credit and a
so-called "presentation" credit), all subject to the credit obligations of
Owner.

     

            (k)All
information provided to the Distributor by the Owner as required by this
Agreement
shall at the time provided and continuously thereafter be true, correct and
complete.

     

            (1)The
Distributor will quietly and peacefully enjoy and possess each and all of the
Rights,
licenses and privileges in the Pictures herein granted or purported to be
granted to it without interference or hindrance by any person.

     

        6.2 Distributor's Representations,
Warranties and Covenants. The Distributor hereby
represents, warrants and covenants to Owner as follows:

    
      
         

      

      
        6

        
          

        

      

      
         
        (a) The
Distributor is a limited liability company duly organized, validity existing and
in good legal standing under the laws of Louisiana.

    

     

            (b) The
Distributor has the legal power, right and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The officers
executing this Agreement and any agreement contemplated by this Agreement on
behalf of the Distributor have the legal power, right and actual authority to
bind the Distributor to the terms and conditions hereof and thereof. This
Agreement constitutes the legal, valid and binding agreement of the Distributor,
enforceable in accordance with its taints.

     

            (c) There are
no suits, actions, arbitrations, or legal, administrative or other proceedings,
or governmental investigations pending or, to the best knowledge of the
Distributor, threatened, against the Distributor.

     

        6.3 Indemnity. Distributor and Owner (in
this capacity "Indemnitor") do hereby and shall at all times indemnify and hold
harmless the other parties, their successors and assignees, and all officers,
directors, agents, attorneys and employees of the foregoing (herein collectively
referred to as "Indemnitees") from and against any and all costs, claims,
charges, recoveries, losses, expenses (including, but not limited to, attorneys'
fees and disbursements), liabilities, damages, judgments, settlements,
injunctions, compromises, penalties, decrees or any other loss of any kind or
nature whatsoever (all referred to herein as "Loss") which may be made,
asserted, maintained or secured against, or suffered by, any Indemnitee caused
by or arising out of any breach by the Indemnitor of any of its representations
warranties, agreements or undertakings herein, including, without limitation,
any consequential or special damages proximately caused by the foregoing.
Indemnitees agree to give Notice to the Indemnitor of any claim, demand or
action which is or may be subject to this section ("Claim") promptly after
obtaining knowledge thereof and shall on request make available to the
Indemnitor all documents relating to the Claim, but failure to give Notice shall
not affect the right of any Indemnitee to indemnification herein if the
Indemnitee can establish that the Indemnitor is not prejudiced by such failure.
Promptly upon receipt of such Notice or upon obtaining knowledge of any Claim,
the Indemnitor agrees to assume the defense of the Claim on behalf of itself and
Indemnitees at the sole cost of the Indemnitor. The Indemnitees or each of them
shall have the right to participate in the defense of any Claim through counsel
of their choice at their own expense. If the Indemnitor fails to promptly assume
the defense of any Claim, the Indemnitees or any of them may do so and the
Indemnitor shall promptly reimburse the Indemnitees for all costs and expenses
(including, but not limited to attorney's fees and disbursements) incurred in
connection therewith as such are incurred; in such case the Indemnitees shall
not settle or compromise any Claim without the Consent of the Indemnitor, such
Consent not to be unreasonably withheld. If the Indemnitor shall fail to so
reimburse the Indemnitees, then, without waiving their rights otherwise to
enforce such reimbursement, the Indemnitor shall, on behalf of the Indemnitees,
have the right to deduct the said amount of such payments, costs and expenses,
or any part thereof, from any sums accruing to or for the account of the
Indemnitor under this Agreement.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ARTICLE
7

    TERMINATION,
DEFAULTS

        7.1 Limitations. This Agreement
may not be terminated, revoked, cancelled, rescinded
or otherwise abrogated for any reason whatsoever prior to the expiration of the
Term, without the Consent of Distributor.

     

        7.2 Effect on Existing Agreements.
Notwithstanding any other provision of this Agreement, with respect to
any sub-distribution or licensing agreements or any assignments entered into by
the Distributor in connection with the Rights ("Sub-Distribution Agreements"),
the following shall apply:

     

            (a) any
termination, expiration, revocation, cancellation, rescission, repudiation,
abrogation or failure of any aspect of this Agreement, occurring for any reason
whatsoever, shall so far as the Owner is concerned be subject to and shall in no
way affect any Sub-Distribution Agreements, regardless of (inter alia) the length of
the remaining term of any such Sub-Distribution Agreements;

     

            (b) the Owner
shall do nothing to disturb or interfere in any way with any rights under the
Sub-Distribution Agreements; and in connection with the foregoing, at the end of
the Term of this Agreement, any agreements entered into, or Rights granted,
prior thereto by the Distributor in the exercise of its Rights under this
Agreement (or by any of its sub-distributors or licensees in the exercise of the
Rights granted to them by the Distributor), which have not by their terms
terminated or expired, shall remain in effect and the Group shall succeed to the
Distributor's position thereunder;

     

            (c) all
sales, assignments, pledges, encumbrances or other transfers of any nature
whatsoever, made at any time whatsoever by, on behalf of or under the authority
of the Owner of all or any part of the Owner's rights in the Pictures, shall be
subject to all such Sub-Distribution Agreements; and

     

            (d) if by
operation of law or otherwise any rights in such Sub-Distribution Agreements
roves in or revert to the Owner, then the Owner will grant to such persons as
the Distributor may designate effective immediately upon any such revesting or
reverting all such rights under the affected Sub-Distribution Agreements as
necessary, appropriate or convenient in the Distributor's sole discretion, and
the Owner hereby irrevocably appoints the Distributor as the Owner's exclusive
attorney-in-fact, for its use and benefit, with full power of delegation,
substitution and re-substitution, for the purpose of executing, acknowledging,
filing and recording any and all documents and instruments and doing all other
acts necessary or advisable to further accomplish the purposes aforesaid, this
power of attorney to survive the dissolution, bankruptcy or other legal
incapacity of the Owner.

     

        7.3 Events of Default -
Distributor. An
"Event of Default" by the Distributor shall mean the occurrence of any of the
following events.

     

        (a)The breach
or failure of the Distributor to keep or perform any other agreement or
obligation
or any representation or warranty of the Distributor made under this Agreement,
which
breach or failure continues for a period of 30 days following a receipt of a
Notice from the Owner requiring the Distributor to fully perform or remedy such
breach and is confirmed by a final judgment of a court of competent
jurisdiction, if Distributor disputes any such claim of breach;

    
      
         

      

      
        8

        
          

        

      

      
         
        (b) The
making by the Distributor of any general arrangement or assignment for the
benefit
of its creditors;

    

     

            (c) The
commencement of any bankruptcy, insolvency, reorganization or liquidation
proceeding
by or against the Distributor; or

     

            (d) The
appointment of a conservator, trustee or receiver for the administration of the
Distributor's
financial affairs, or to take possession of substantially all of the
Distributor's assets.

     

        7.4.
Cure Period. In the
event of a breach or default by the Owner or by the Distributor,
other than those breaches and defaults set forth as Events of Default in
Sections 7.3 hereof, no such event shall be actionable at law or in equity
unless and until:

     

                (i) The
breaching party receives Notice of the event of breach or default from the other
party; and

     

                (ii) The
breaching party fails to cure the breach or default within 30 days of the Notice
Date.

     

        7.5 Remedies. All rights and
remedies granted to the Distributor under this Agreement
are cumulative and the exercise of one shall not limit or affect the
Distributor's right concurrently or subsequently to exercise any other right or
remedy, and shall be in addition to such other rights or remedies as the
Distributor may have at law, in equity, under this Agreement or otherwise. The
Owner acknowledges and agrees that the rights granted to the Distributor
hereunder are of a special, unique and extraordinary nature, the breach, loss or
impairment of which would cause irreparable harm to the Distributor, and could
not adequately be compensated for by money damages. Accordingly, in the event of
any actual or anticipatory breach, loss or impairment of such rights, in
addition to all other remedies which may be available to the Distributor, the
Distributor shall be entitled to injunctive relief against the Owner and against
each and every one of its predecessors and successors and assigns with respect
to the rights granted to the Distributor hereunder to prevent any such breach,
loss or impairment. In no event shall the Owner be entitled to seek or obtain
any injunctive relief with respect to the exercise by the Distributor of any
Rights granted to the Distributor hereunder, it being agreed that the only
remedy of the Owner shall be an action for an accounting or for damages, without
limiting the Owner's rights pursuant to Section 7.3 hereof.

     

        7.6
Force
Majeure. Notwithstanding any other provisions of this Agreement,
neither
party shall be liable to the other in damages or otherwise because of any
failure to perform hereunder caused by fire, earthquake, flood, epidemic,
catastrophic accident, explosion, casualty, strike, lock-out, riot, civil
disturbance, act of public enemy, embargo, war, act of God, by any municipal,
state or federal ordinance or law, by any legally constituted authority, whether
municipal, state or federal, by the issuance of any executive or judicial order,
or the unavailability of the director or any principal cast member (which
unavailability is beyond the reasonable
control of the producer of the Pictures and of the Distributor and
which

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    prevents
production of the Pictures; due to their death, incapacity or default of their
agreements with the production entity that produces the relevant Pictures (to
the extent not covered by insurance). In no event shall inclement weather be
deemed to be or considered as an event of force majeure for any purpose of this
Agreement. If the distribution of the Pictures shall be materially interrupted
by any such cause, or if, for any reason whatsoever, the majority of the motion
picture theatres in any country comprising the Territory exhibiting motion
pictures shall be closed for one week or more, then at the election of the
Distributor, the Distributor's obligations under this Agreement may be suspended
with respect to such country in the Distributor's sole discretion for such time
as such conditions may exist.

     

    ARTICLE
8

     

    LEGAL
PROCEEDINGS

     

        8.1 Copyright Infringement. If any
person shall do or perform any acts which the Distributor believes constitute in
the Territory a copyright infringement of the Pictures or of any of the
literary, dramatic or musical material contained in the Pictures, or constitute
a plagiarism, or violate or infringe any right of the Owner, the Distributor or
any sub-distributor or licensee of the Distributor (as the case may be) or if
any person shall do or perform any acts which the Distributor believes
constitute an unauthorized or unlawful distribution, exhibition, or use thereof,
then and in any such event, the Distributor (and any of its sub-distributors or
licensees) may and shall have the exclusive right to take such steps and
institute such suits or proceedings as the Distributor (or any of its
sub-distributors or licensees) may deem advisable or necessary to prevent such
acts and conduct and to secure damages and other relief by reason thereof, and
to generally take such steps as may be advisable, necessary or proper for the
full protection of the rights of such parties, and if the Distributor fails to
take any such action, any one of the Owner or IDC may do so in the Distributor's
name but at the sole expense of the prosecuting party. The name of the Owner,
may be utilized to the extent permitted by law in any suits or proceedings which
may be brought by the Distributor or its sub-distributors or
licensees.

     

        8.2 Right to Defend. If any claim
shall be made against the Owner in respect of:

     

            i) the
Pictures,

     

            ii) any of
the Rights granted to the Distributor hereunder, or

     

            iii) any
matter for which the Distributor is required to indemnify the Owner
hereunder,

     

    the Owner
undertakes to give notice to the Distributor of such claim, as promptly as is
reasonably possible, and in no event later than fifteen (15) days after the
Notice Date and the Distributor shall have the right to engage such legal
representatives as it shall require in connection therewith and the exclusive
right to control the defense, prosecution or settlement of the applicable claim
(whether or not by the issuance of legal proceedings to the extent permitted by
law), subject to the Owner being indemnified by the Distributor against any
legal and other costs occasioned by the Owner in respect of such claim unless
the Owner shall elect to

    participate
in the applicable proceeding together with the Distributor through counsel of
the Owner's choice. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

        8.3Further Assurances. If the
Distributor deems it necessary or appropriate to effectuate,
confirm. and protect any of its rights granted to it hereunder, the Owner agrees
to promptly execute any documents and do any acts reasonably appropriate to
confirm and effect such rights (specifically including those rights set forth in
Article 7 and this Article), and if the Owner shall fail to do so within two (2)
business days after the Distributor's request, the Distributor shall have the
right to execute such documents and perform such acts in the name of the Owner
on its behalf but for the Distributor's benefit, and the Owner does hereby
irrevocably appoint the Distributor as their attorney-in-fact (with full power
of delegation, substitution and re-substitution) for such purposes.

     

    ARTICLE
9

     

    MISCELLANEOUS

     

        9.1 No Third Party Beneficiary.
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties hereto (and in the
case of Indemnities, any Indemnitee) any right, remedy or claim, legal or
equitable, under or by reason of this Agreement or any provision hereof, this
Agreement and all of its provisions being intended to be and being for the sole
and exclusive benefit of the parties hereto.

     

        9.2 Waivers. Any party may waive
the benefit of any term, condition, warranty or covenant in this Agreement or
any right or remedy at law or in equity but only by an instrument in writing
signed by the party to be charged. The waiver of any breach of this Agreement or
any right or remedy granted hereunder or at law or in equity shall not be deemed
a waiver of any preceding or succeeding breach of the same or any other
provisions hereof or of the opportunity to exercise such right or remedy at any
preceding or subsequent time.

     

        9.3Assignment. The Distributor
may not assign its rights and delegate its obligations

    under
this Agreement to any person without the prior written Consent of the Owner,
which Consent shall not be unreasonably withheld, unless to a person controlled
by or under common control with Peter M. Hoffman. The Owner may not assign their
rights or delegate their obligations without the prior written Consent of the
Distributor, which Consent shall not be unreasonably withheld. Subject to the
foregoing, this Agreement shall endure to the benefit of and be binding upon the
successors and assigns of each party.

     

        9.4 Amendments. This Agreement may
not be altered, modified, amended, cancelled, rescinded, discharged or
terminated except as specifically herein provided or by an instrument in writing
signed by both parties.

     

        9.5 Entire Agreement. No person,
whether or not an officer, agent, employee or representative of any party
hereto, has made for or on behalf of that party any agreement, representation,
warranty, statement, promise, arrangement or understanding ("Other Agreements")
not expressly set forth in this Agreement. This Agreement and all agreements
referred to herein constitute the entire agreement between the parties and
supersede all prior or concurrent oral or written, express or implied Other
Agreements with respect to the subject

    matter
hereof. The parties acknowledge that in entering into this Agreement, they have
not relied and will not in any manner rely upon any Other Agreements, other than
those Agreements specifically set forth in this Agreement or in any agreements
referred to therein.

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

          9.6 Governing
Law. This Agreement shall be deemed a contract made under and shall be
construed and enforced and the legality and validity of each term and condition
shall be determined in accordance with the laws of California and the parties
hereto attorn to the jurisdiction of the courts of Los Angeles,
California.

    

     

        9.7 Captions.
Captions or paragraph headings are used herein for convenience of
reference only, shall not constitute a part of this Agreement and shall not be
utilized or referred to in the construction or interpretation of this
Agreement.

     

        9.8 Currency.
Unless otherwise indicated, all references herein to any sum of money
shall be deemed to be a reference to lawful currency of the United States of
America and all sums or amounts payable hereunder shall be paid in such
currency.

     

        9.9
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original hereof and which together shall
constitute one agreement.

     

        9.10 Notices.
All notices, approvals, requests or demands ("Notices") which any party
is required or may desire to give to the other hereunder shall be in writing,
unless otherwise specified, and shall be addressed to the address provided for
herein. All Notices shall be given in one of the following
ways:

     

    
      	
              (i)  

            	
              by
      delivery to the address set forth below for such
  party;

            

    

     

    
      	
              (ii)  

            	
              by
      mail, registered or certified (return receipt requested), postage prepaid,
      airmail (if available); or

            

    

     

    
      	
              (iii)  

            	
              by
      transmittal by any electronic means whether now known or hereafter
      developed, including but not limited to, telex, telecopier, or facsimile
      transmissions, able to be received by the party intended to receive
      notice. If so delivered, mailed, telegraphed, cabled, or transmitted, each
      Notice shall, except as herein expressly provided, be conclusively deemed
      to have been given when delivered, or when electronically transmitted, or
      on the fifth business day following the date of mailing, as the case may
      be. The addresses of the parties shall be those of which the other party
      actually receives written Notice and until further notice
    are:

            

    

     

    To the
Distributor:

     

    SEVEN
ARTS PICTURES LOUISIANA LLC 1100 Poydras Street, Suite 2810

    New
Orleans, LA 70163

    Tel: 504)
576-6959

    Attn:
Michael Arata

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    To
Owner:

     

    SEVEN
ARTS FILMED ENTERTAINMENT (UK) LIMITED 38 Hertford Street

     

    London WU
7SG UK

     

    Tel: +44
20 3006 8222

    Fax:
(310) 556-8945

    Attn:
Larry Barnett

     

        9.11 Severability. Nothing
contained in this Agreement shall be construed so as to require the commission
of any act contrary to law, and wherever any provision of this Agreement is held
to be invalid or illegal under any material statute, law, ordinance, order or
regulation, such provision shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements and such curtailment or
limitation shall not affect the validity of the remainder of this Agreement or
any other provisions hereof.

     

        9.12 Time. Time is of the essence
with respect to this Agreement.

     

        9.13 Name and Gender. Whenever the
singular number is used in this Agreement and when required by the context, the
same shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders, and the neuter gender shall include the
masculine and feminine, as the context requires; and the words "person" or
"party" shall include corporations, firms, Owner, or other forms of
association.

     

        9.14 Attorneys' Fees. In any
action, suit or proceedings brought by either party with respect to this
Agreement, its subject matter or the actions, statements or conduct of the
parties hereunder, the prevailing party shall be entitled to recover from the
other party all costs and expenses incurred in connection therewith, including
but not limited to attorneys' fees, attorneys' costs and court
costs.

     

        9.15 Further Assurances. Each
party shall execute and deliver such other documents or instrument as may be
necessary or desirable to evidence, effectuate or confirm this Agreement, and
any of the terms and conditions hereof.

     

        9.16 Not a Joint Venture or Sale.
Nothing herein contained shall constitute a partnership between, or joint
venture by, the parties hereto or constitute either party the agent of the
other; and neither shall anything contained herein constitute a purchase or sale
agreement. The parties hereby acknowledge that this Agreement constitutes a
license of certain distribution rights as to the Pictures and grant of certain
ancillary rights and obligations in connection therewith. Neither party shall
hold itself out contrary to the terms of this paragraph, and neither party shall
become liable for the representation, act or omission of the other contrary to
the provisions hereof.

     

        9.17 Definitions. Unless otherwise
defined, all capitalized terms shall have the meanings ascribed to them in
Exhibit "4" hereof.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

          9.18 Exhibits. Each and every Exhibit
attached hereto is incorporated herein by this reference as if set forth in
full.

    

     

    IN WITNESS WHEREOF, the parties have
executed this Agreement effective as of the date first written
above.

     

     

    SEVEN
ARTS
PICTURES LOUISIANA LLC

     

     

    By:____/s/
Peter Hoffman___

    Name: Peter Hoffman

    Title: CEO

     

    SEVEN
ARTS FILMED ENTERTAINMENT (UK) LIMITED

     

     

    By:____/s/
Elaine New______

    Name: Elaine New

    Title: Finance Director

     

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    LIST OF
EXHIBITS

    TO

    INTERNATIONAL
DISTRIBUTION AGREEMENT

     

    EXHIBIT
"I" Pictures

     

    EXHIBIT
"2"Delivery Requirements

     

    EXHIBIT
"3"Entitlement Schedule and Certain Other Provisions

     

    EXHIBIT
"4" Definitions

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    EXHIBIT
“1”

    TO

    PICTURES

     

    Asylum

    Stander

    No
Good Deed

    I’ll
Sleep When I’m Dead

    Supercross

    A
Shot At Glory

    Johnny
Mnemonic

    Never
Talk To Strangers

    Shattered
Image

    The
Hustle

    Pool
Hall Prophets aka Shooting Gallery

    Boo

    Cemetery
Gates

    Popstar

    Red
Riding Hood

    Back
In The Day

    Captivity
Mirror
Wars Getting’
It

    The
Wedding Chest

    The
Mesmerist

    A
Broken Life

    Drunkboat Deal

    Noise aka
The
Rectifier

    American
Summer aka The Pool Boys

    Autopsy

    Knife
Edge

    Nine
Miles Down

    Hades
aka The Black Waters of Echo Pond

    Night
of the Demons

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    EXHIBIT
"2"

    TO

    INTERNATIONAL
DISTRIBUTION AGREEMENT

     

    DELIVERY
REQUIREMENTS

     

    I. Delivery Items: Delivery of
the Pictures shall consist of the Owner making physical delivery,
at the sole cost and expense of the Owner, of the items required in the
Sub-Distribution Agreements or the items set forth herein to such delivery
location as hereinafter designated or as the parties shall otherwise
designate.

     

    A.Delivery
Locations:

     

        1. "Laboratory" means Deluxe, Los
Angeles, California.

        

    B.Picture
Items:

     

        1.Original Picture Negative: The original
35mm picture negative, which shall:
(a) conform to the American National Standards Institute Catalogue reference
P.H. 22.59, "35mm Motion Picture Camera Aperture Images"; (b) be fully cut,
edited and assembled complete with credits and main, narrative (if any), end and
all descriptive titles; (c) conform in all respects to the final edited version
of the action work print of the Pictures; and (d) be in all respects ready and
suitable for use in the printing of commercially acceptable positive
prints.

     

        2. Magnetic Soundtrack: One (1)
35mm original three-track magnetic master, Dolby-A encoded (if applicable),
which shall: (a) consist of separate dialogue, music and sound effects, fully
recorded; (b) be equalized and in perfect synchronization with the Picture
action; (c) conform in all respects to the Answer Print; and (d) be technically
acceptable and if the Picture is to be released with an alternate sound system
(e.g. Dolby Stereo): (a) a standard four-track magnetic sound master that
includes left, centre, right, and surround signals, and that is Dolby-A encoded;
or (b) a Dolby Stereo optical encoded two-stripe magnetic sound master. If the
Picture is to be released in 70mm: a six-track magnetic sound master that
includes left, centre, right, surround signals and two boom tracks. All
soundtracks that are Dolby-A encoded shall include at least 30 seconds of "Dolby
set level tone" at the head of each reel and 30 seconds of "pink noise" at the
head of one reel.

     

        3. Soundtrack Negative: One (1)
fully mixed and recorded original 35mm optical soundtrack negative of the
Pictures, which shall be: ' (a) made from the Magnetic Soundtrack; (b) of
technically acceptable quality; (c) prepared for printing in perfect
synchronization with the Answer Print; and (d) technically acceptable in
accordance with Paragraph 1.02 of the Agreement. If the Picture is to be
released with an alternate sound system (e.g. Dolby Stereo), the appropriate
stereo optical soundtrack negative is to be delivered. If the Picture is to be
released in 70mm, the optical soundtrack negative corresponding to 70mm is to be
delivered.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

        4. Answer Print: One (1)
first-class —35mm composite, fully timed print of the Pictures, which
shall be: (a) manufactured from the Original Picture Negative and Soundtrack
Negative, (b) fully titled, (c) in perfect synchronization and conformed to the
final edited version of the action work print of the Pictures, (d) approved by
the Distributor, and (e) technically acceptable in accordance with Paragraph 1.2
of the Agreement, and in all respects ready and suitable for distribution and
exhibition.

     

        5. Color Interpositive Protection
Master: If the Picture is in color, one (1) 35mm fully timed
interpositive master of the Picture, conformed in all respects to the Answer
Print. If the Picture is in black and white, one (1) 35mm fully timed fine
grain master of the Picture, conformed in all respects to the Answer
Print.

     

        6. Internegative: If included in
the approved Pictures budget, one (1) intemegative manufactured from the
interpositive conformed in all respects to the delivered and accepted answer
print, and one (1)
composite spliceless check print from each such
internegative.

     

        7. Titles/Textless Background:
(a) One (1) 35mm fully timed textless background negative of the main,
credits, narrative (if any), and end titles, conformed in all respects to the
Original Picture Negative, and (b) one (1) 35mm action-only positive print made
from the timed textless negative.

     

        8. Deleted.

     

        9. Television Cover Shots: Cover
shots of the Pictures satisfactory to the Distributor which will enable the
Distributor to make a version of the Pictures acceptable for exhibition on
television in the Territory.

     

        10. Film Materials: Prints,
interpositives, sound effects tracks, dialogue tracks, music tracks and other
film materials including lifts, trims, and outtakes made in connection with the
production of the Pictures.

     

        11. Work Materials: The action
work print and cutting continuity book including the film editor's script notes
and logs.

     

        12. Continuities: One (1) legible
typewritten copy in the English language of a detailed, final dialogue and
action continuity of the Pictures containing all dialogue, narration, song
vocals, as well as a cut by cut description of the Pictures action, conforming
exactly to the photographic action and soundtracks of the completed Pictures as
embodied in the Answer Print. The Continuities shall be in such form as to be
suitable for transmission to censorship authorities and for use in connection
with dubbing and sub-titling of the Pictures. If the dialogue of the Pictures
was recorded in a language other than English, the Continuity shall contain a
literal English translation.

     

        13. Music Cue Sheets: One (1) copy
of a music cue sheet showing the particulars of all music contained in the
Pictures, including the sound equipment used, the title of each composition, the
names of composers, publishers, and copyright Owners, the usages (whether
instrumental, instrumental-visual, vocal, vocalvisnal or otherwise), the place
and number of such uses showing the film footage
and running time for each cue, the performing rights society involved, and any
other information customarily set forth in music cue sheets.

    
      
         

      

      
        18

        
          

        

      

      
         

      

          14. Musical Score/Lead Sheets/Songs:
The conductor's score of all instrumental and vocal parts of all music
recorded for the Pictures, and the composer's orchestra sketches, if prepared,
and the composer's lead sheets for the entire musical score of the Pictures and
for the music and lyrics of each song composed for the Pictures. A notated score
of all instrumental and vocal parts of all music recorded for the
Pictures.

    

     

        15. French
Dubbed/Spanish Dubbed and Subtitled Versions: If held
by or under the control of the Owner, the Owner shall permit the Distributor, or
if held by
or under the control of the Distributor or its Affiliates, the Distributor shall
permit the Owner
to have free access to the following material at the time such material
is available:

     

    
      	
              i)  

            	
              One
      (1) 35mm composite Magnetic Soundtracks dubbed in the French or Spanish
      language;

            

    

     

    
      	
              ii)  

            	
              Main
      end title negatives in the French and Spanish
  languages;

            

    

     

    
      	
              iii)  

            	
              One
      (1) 35mm release print each of the French dubbed and Spanish dubbed
      versions of the Pictures;

            

    

     

    
      	
              iv)  

            	
              One
      (1) high contrast positive overlay title role in the Spanish language for
      the Western Hemisphere; and

            

    

     

    
      	
              v)  

            	
              Foreign
      language continuity books for the French dubbed, Spanish dubbed and
      Spanish sub-titled versions of the
Pictures.

            

    

     

    (b)The
applicable party shall deliver to the other party laboratory access
letters, in substantially the forms attached to this Exhibit "A" as Schedules "
1 " and "2", dated on or prior to the date of delivery of the Pictures, and
executed by both the Owner or the Distributor, as applicable, and the laboratory
having possession of the necessary material. Said laboratory access letters
shall provide the Distributor with access to all elements necessary to make the
French dubbed and Spanish dubbed and sub-titled motion picture copies, at the
expense of the party ordering such materials, required by the Distributor in the
exercise of its rights hereunder.

     

    C.Trailer Production Materials:
The Owner shall deliver to the Distributor not later
than two (2) weeks after the completion of the first cut of the Pictures
prepared by the director and presented to the Owner (the "Distributor's First
Cut"), unless the Distributor notifies the Owner that the Distributor
anticipates that it will release the Pictures on a date more than two months
after the proposed delivery date, in which case the Owner
shall deliver not later than one (1) week after completion of the last cut of
the Pictures prepared by the director or the Owner prior to the final mix of the
Pictures (the "Last Cut"), the following:

    
      
         

      

      
        19

        
          

        

      

      
         
    1. Black and White Dupe: One (1)
black and white dupe of the action work print of the Director's First Cut
or the Last Cut, as applicable.

    

        

        2. Soundtrack: One (1) 35mm full
coat magnetic film soundtrack consisting of separate dialogue, music and sound
effects and conforming to the soundtrack of the action work print of the
Director's First Cut or the Last Cut, as applicable.

     

    D.Documentation:

     

        1. Literary Materials: A copy of
the story, screenplay and final shooting script of the Pictures and of all
preliminary drafts, treatments, continuities, and other literary material
relating to the Pictures, and all related copyright filings.

     

        2. Deleted.

     

        3. Production Information: One (1)
copy of all Production Reports and complete information, verified as true
and accurate by the Owner, of: (a) all costs incurred in connection with the
preparation, production, completion and delivery of the Pictures, if requested
by the Distributor; (b) dates of commencement and conclusion of principal
photography; (c) all locations of photography, including retakes; (d) where
edited; and (e) where scored.

     

        4. Dubbing Restrictions: A
statement of any restrictions as to the dubbing of the voice of any player
including dubbing dialogue in a language other than the language in which the
Pictures was recorded.

     

        5. Contracts: To be delivered if
requested by the Distributor: Duplicate originals or legible copies of all
agreements, licenses, waivers or other documents relating to the production of
the Pictures, including but not limited to:

     

            (a) Basic Material: Those covering
the acquisition of literary, dramatic and other works and material of whatever
nature upon which the Pictures may be based and/or used in the production of the
Pictures, including copyright and title search reports.

     

            (b) Music and Lyrics: Those
covering the acquisition and performance of all music and lyrics utilized in
connection with the Pictures.

     

            (c) Service Contracts: Those
covering the rendition of services by writers, players, producers, directors,
extras, and all other persons rendering any services in connection with the
Pictures.

     

            (d) Rental Contracts: Those
covering set and location rentals and clearances, and equipment rentals.
(Deliver to Production Accounting).

     

            (e) Production Contracts: Those
covering photographic releases and the rendition of services by production
personnel. (Delivery to Production Accounting).

    
      
         

      

      
        20

        
          

        

      

      
         
        (f)Featurette
Clearances: Those covering the right to use an individual's
name and likeness in featurette motion pictures dealing with the
Pictures.

    

     

        6.Music
Licenses and Assignment: A copy of valid licenses for the full
period of
copyright in the Pictures for the synchronous recording of all copyrighted music
in the Pictures and the performance thereof in the Territory, and evidence of
full payment therefor. If the rights granted to the Distributor include music
publishing rights, an assignment from the composer of all original music written
for the Pictures, to the Distributor or its designee, duly executed and
acknowledged by such composer.

     

        7. E
& 0 Insurance: A copy of a "Motion Picture Producer and Distributor
Errors and Omissions" insurance policy naming the Distributor as an additional
named insured, which policy shall have limits of at least $1,000,000 with
respect to any one claim relating to the Pictures and $3,000,000 with respect to
all claims relating to the Pictures in the aggregate. Said policy shall be for a
term of not less than three (3) years commencing as of delivery of the Pictures
to the Distributor together with evidence indicating that the premium for such
policy has been paid in full for the three (3) year term. Said policy shall
include a provision that it may not be revised, modified or cancelled without
the written consent of the Distributor and shall include a provision that it
shall be deemed to be primary insurance and that any insurance obtained by the
Distributor shall be excess insurance not subject to exposure until the
insurance coverage of the delivered policy shall be exhausted. Said policy to be
delivered to the Distributor not later than three (3) weeks prior to the
commencement of principal photography of the Pictures.

     

        8. Laboratory
Access Letters: Any laboratory access letters which may be requested by
the Distributor and which are in form and substance acceptable to the parties
hereby acting reasonably.

     

    E.Publicity
and Advertising Materials: To be delivered to the Distributor not later
than
three (3) weeks after the completion of principal photography of the Pictures
(if principal photography has not been completed at the time of the signing of
this Agreement) or upon the conclusion of the signing of this Agreement (if
principal photography of the Pictures has been completed at such
time):

     

        1.Stills:
The original negative and one (1) positive print of five hundred
(500)
different black and white still photographs, and color transparencies of three
hundred fifty (350) different color still photographs, all photographed by an
experienced still photographer assigned to the Pictures during at least three
(3) weeks of principal photography of the Pictures. Said still photographs shall
depict different scenes from the Pictures, production activities, and infoimal
poses, the majority of which depict the principal members of the cast. Each
still photograph shall be accompanied by a notation identifying the persons and
events depicted and shall be suitable for reproduction for advertising and
publicity purposes. If a player has still approval, the Owner shall furnish the
Distributor an appropriate written clearance from the player. The Owner shall
furnish the Distributor a positive
print or color transparency of all other still photographs photographed in
connection with the production of the Pictures. The Distributor shall have the
right to borrow, for a reasonable time, the negative of any of such other
material for the purpose of making reproductions thereof.

     

        2. Biographies: One (1) biography (one to
three typewritten pages in length) of each of the principal players, writers,
individual producer and director of the Pictures, including information, if
available, as to the individual's height, weight, color of hair and eyes, and,
in the case of actresses, clothing size.

     

        3. Stories: A minimum of three (3) news
stories (50 to 150 words in length) on various aspects of events during
production of the Pictures prepared by a publicist assigned to the Pictures
("Unit Publicist") and a minimum of six (6) feature stories of 600 words each
prepared by the Unit Publicist, involving the principal players, supporting
players, writer, individual producer, director, production personnel, locations
and special interest material for publicity purposes, including at least three
(3) stories on each of the principal players and two (2) stories regarding the
physical production of the Pictures as to location and technical
considerations.

     

        4. Production Notes: Notes as to the
production of the Pictures prepared by the Unit Publicist, including items
relating to: underlying work (original screenplay, book, etc.); places where the
Picture was photographed; any interesting anecdotes dealing with the production
or background of the Pictures.

     

        5.Synopsis: Ten (10) copies of the brief
synopsis in the English language (one
type-written page in length) of the story of the Pictures and ten (10) copies of
a synopsis in the English language (three type-written pages in length) of the
story of the Pictures.

     

        6. Advertising Materials: One (1) copy of
all advertisements, paper accessories and other advertising materials, if any,
prepared by the Owner or by any other party in connection with the Pictures,
including samples of one-sheet posters and individual advertising art elements
and transparencies necessary to make proofs thereof.

     

        7. Credits: The statement of credits
applicable to the Pictures including verification of the writing credits by the
appropriate writers guild and photographic excerpts of all the Owner's
obligations (taken from the actual contract) to accord credit on the screen, in
advertising, in paperbacks and on recordings; and excerpts as to any
restrictions as to use of name and likeness. Said credits shall conform to the
standard credit requirements of the Distributor for comparable artists unless
otherwise agreed to in the Agreement.

     

        8. Cast: One (1) copy of a list indicating
the name of the character portrayed by each player and a complete description of
the character.

     

        9. Technical Crew: One (1) copy of a list
of all technical personnel (including their title or assignment) involved in the
production of the Pictures.

    
      
         

      

      
        21

        
          

        

      

      
         
    10. Titles: Two (2) typewritten lists of the
main credits and end titles of the Pictures.

    

     

        11. French and Spanish Language Materials:
Access to French and Spanish language publicity and advertising
materials: the Owner will arrange for the Distributor to have access, where
located, at such time as the material is available, to the following, dubbed in
French and Spanish language and sub-titled in the Spanish language for the
Western Hemisphere:

     

    
      	
                  (a)  

            	
              All
      Picture advertising original art material or transparencies,
      and

            

    

                      

                       (b) All
Picture publicity material, and

     

    
      	
              (c)  

            	
              35mm
      color interpositive protection masters of theatrical trailers and
      television spots for the picture,
and

            

    

     

    
      	
              (d)  

            	
              Master
      tapes of radio spots,

            

    

     

    to permit
the Distributor to make or have, at laboratory cost, advertising and publicity
material for use by the Distributor and its Licensees in the exercise of the
Distributor's rights hereunder.

     

    ILIncomplete Delivery: To the extent that
any such materials or documents are incomplete or fail to meet the
requirements specified herein, the Distributor shall so notify Owner, and
the Owner shall
immediately thereafter correct all such deficiencies by making delivery to the
Distributor of the proper
materials and documents required hereunder. Acceptance by the Distributor of less than all of the
items required for delivery of the Pictures and/or release of the Pictures shall not be construed as a
waiver by the Distributor of Owner's obligation to deliver any item required hereunder. Under no
circumstances shall Owner be relieved of the obligation to deliver all of the
materials and documents required hereunder, nor shall the Distributor be
deemed to have waived any
of the said delivery requirements unless the Distributor shall so notify the Owner in writing designating
the particular item or items which need not be delivered by the Owner to the
Distributor. The cost of any item of delivery which is omitted by the Owner or
is supplied by the Distributor by reason of Owner's failure to deliver the item
shall be charged to the
Pictures as a Distribution Expense item or deducted from the first amounts
otherwise payable to the
Producer under the Agreement, or shall be paid for by the Owner immediately upon
the Distributor's request, as the Distributor in its sole discretion may
determine. THE
TIMELY
AND COMPLETE DELIVERY OF THE ITEMS SPECIFIED IN THIS SCHEDULE
IS A CONDITION PRECEDENT TO ANY OBLIGATION THE DISTRIBUTOR
MAY HAVE OR MAY UNDERTAKE TO PAY ANY AMOUNTS, OTHER
THAN ANY ADVANCES PAYABLE HEREUNDER, DUE TO THE OWNER PURSUANT
TO THIS AGREEMENT, INCLUDING ANY RESIDUALS PURSUANT TO THE
APPLICABLE COLLECTIVE BARGAINING AGREEMENTS.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    EXHIBIT
"3"

    TO

    INTERNATIONAL
DISTRIBUTION AGREEMENT

     

    ENTITLEMENTS
SCHEDULE AND CERTAIN OTHER PROVISIONS

     

    I. Net Receipts.
Net
Receipts means the amount of Gross Receipts at the close of any Period
remaining, if any, after first deducting from Gross Receipts, on a continuing
and cumulative basis, the aggregate of the following items in the order of
priority set forth below:

     

        A. any
Distribution Fees and Expenses incurred by the Distributor in connection with
the distribution, exhibition or exploitation of any of its Rights hereunder
which have not previously been recouped by the Distributor;
and

     

        B. all third
party participations payable in connection with the
Pictures.

     

    II.Gross
Receipts.

        

        A.Gross
Receipts means the aggregate of the following at the close of each Period
(as
defined in Paragraph V below):

     

            1.Gross Film
Rentals. All monies actually received and earned by the
Distributor
from licenses of the Rights to exhibit the Pictures hereunder (including by
means of television devices or networks and through all other non-theatrical
methods of distribution) by means of any size or gauge of film or other material
in any and all languages and versions. Outright Sales Receipts and receipts from
the exploitation of Video Rights shall not be deemed Gross Film Rentals.
Calculation of Gross Film Rentals shall be subject to the
following:

     

    
      	
              a)  

            	
              No
      costs (however incurred, paid or allowed) shall be deducted in calculating
      Gross Receipts (including co-operative or theater advertising), and if
      deducted at the source, shall be added back to Gross Receipts for purposes
      hereof.

            

    

     

    
      	
              b)  

            	
              Amounts
      to be included as Gross Receipts shall be determined after all refunds,
      credits, discounts, allowances and adjustments for whatever reason
      granted. Until earned, forfeited or applied to the Pictures, neither
      advance payments nor security deposits shall be included in Gross
      Receipts. Without limiting the foregoing, non-returnable advances or
      guarantees shall not be included in Gross Receipts except to the
      extent recouped from actual revenues derived by the
      Distributor.

            

    

            

            2.Outright
Sale Receipts. All net monies actually received by the Distributor
or its Affiliates from Outright Sales

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

            3.Video
Royalties. All earned net royalties received by the Distributor or its
Affiliates
(or credited against an advance or guarantee previously received) under the
terms of licenses granting Video Rights to any Person.

     

            4.Subsidies.
All net monies received by the Distributor or its Affiliates as government
subsidies solely with respect to the Pictures (and without regard to future
production activities), net of any income taxes imposed by the government

             granting the
subsidy.

     

             5.Miscellaneous Receipts.
All monies received by the Distributor and its Affiliates solely with
respect to any infringement of the copyright in the Pictures after first
deducting all direct costs and expenses incurred in
connection

             therewith,
including attorney's fees.

     

    B.For the
purposes of this Agreement, Gross Receipts shall specifically not
include:

     

    1. Receipts
of any exhibitors (whether theatres, television or otherwise), broadcasters,
cable operators, laboratories, phonorecord retailers and distributors, music or
book publishers, merchandisers, Persons who exercise Video

     Rights,
or any distributor which is not a Distributor hereunder (collectively "Excluded
Persons").

     

    2. Gross
Receipts contributed or paid to charitable organizations (not to exceed one
percent (1 %) of Gross Receipts).

     

    3. All
amounts received by any Person as Taxes or for payment of Taxes, such as
admissions, sales or value-added taxes (other than taxes calculated as a
percentage of income, i.e. income taxes).

     

    4. All
amounts received by any Person for the scrapping or disposal of prints or other
Materials respecting the Pictures.

     

    5. All
amounts received by any Person from the sale, rental or other Use of materials
and supplies, including props, sets, costumes and equipment used in connection
with the Pictures.

     

    6. All
amounts received by any Person from the Use of stock footages, film and sound
material retained for library purposes and photographs created in connection
with the Pictures.

     

    7. All
amounts received by any Person from any Use of the written property(s),
screenplay(s) or other literary materials on which the Picture is based (such as
the license for any Use in other motion pictures), except to the
extent

     specifically
included as receipts from the Use of Publishing or Merchandising
Rights.

     

    8. All
amounts received by any Person for a transfer of Ownership in the copyright,
negative or substantially all distribution rights of the Pictures, for financing
or investment in any aspect of the Pictures or its distribution, or
for

     transfer
of any tax or similar benefits associated with Ownership, control or
distribution of the Pictures.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    III.
Distribution
Fees. The Distributor shall be entitled to receive a distribution fee
(the "Distribution
Fee") equal to 20% of all Gross Receipts derived from the exhibition,
exploitation and distribution of the Pictures as calculated under the terms
hereof.

     

    IV.Distribution
Expenses. All costs, expenses and charges paid
or incurred by the Distributor
(which for purposes of this Paragraph shall include sub-distributors and
licensees of the Distributor) by reason of, in connection with, or allocable to
the derivation of the Gross Receipts from all the Pictures in all markets and
media including, among other things, the following:

     

        A.Costs of Collection and
Other Costs. The aggregate of the following:

     

            1.ConversionCosts.
All costs of conversion of monies, including cable expense
and any discounts taken for the conversion thereof directly or indirectly into
United States dollars and all costs of transmission of such monies to
the

    United
States.

        

            2.Taxes.
All taxes, imposts, duties, tariffs and governmental fees of any
nature, however
denominated or characterized, imposed by any taxing authority in any Territory,
directly or indirectly, on any receipts (irrespective of character or origin) of
the Pictures or in connection with the Pictures, prints, trailers and other
material relating to the Pictures, or the lease, license, distribution,
exhibition or other disposition thereof, or the collection, conversion or
remittance of monies, including personal property, turnover, sales, use,
transaction, film hire, excise, stamp, added value, remittance, release, income
and franchise taxes. Where local Law limits the Owner's right to receive any
payment to an amount less than as provided herein, the Distributor shall be
entitled to deduct, from the amount allowed to be paid to the Owner pursuant to
such local Law, the total amount of all Taxes payable with respect to any monies
which would otherwise have been payable to the Seller pursuant to this Exhibit,
except for such limitation. Any amount withheld by reason of such limitation
shall constituted Restricted Proceeds. All monies required to be paid on account
of import fees, export fees, duties, imposts, customs and costs to acquire
permits in connection with shipment, delivery, license, exhibition or other Use
of the Pictures and prints or any Materials, and all payments and expenses with
respect to contesting, compromising or settling (whether by litigation or
otherwise) of any Taxes, together with any interest and penalties with respect
thereto, shall be treated as Taxes. If any monies are required to be paid to a
local institution, group, individual or fund, such payments shall be treated
as
Taxes. In no event shall the Owner be entitled to take any credits,
deductions or other benefits with respect to any Taxes, nor shall the deductible
amount of any Taxes (however determined) be decreased (nor Gross Receipts
increased) because of the manner in which Taxes and tax credits are
treated by the Distributor in filing its net income, corporate franchise, excess
profits or other similar tax returns. The Owner shall not be required to pay or
participate in the Distributor's own United States federal and state income
taxes and franchise taxes (however denominated) based on the Distributor's
actual net earnings or any income tax (however denominated) payable by the
Distributor to any Territory, based on the actual net earnings of the
Distributor in such Territory, it being agreed that any Taxes (however
denominated) required to be withheld by any Territory in order to permit the
remittance
of monies from any such Territory shall not be deemed to be a tax based on the
actual net earnings of the Distributor.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

            3.Checking Costs. All
costs incurred to investigate unauthorized exhibition or
distribution of the Pictures and to determine full utilization of the Rights
granted, whether such costs are direct expenses or an allocable portion of the
aggregate general checking expenses incurred by the Distributor in connection
with the exploitation of the Rights granted.

     

            4.Collection Costs. All
costs incurred in connection with the collection of monies
includable within Gross
Receipts, including reasonable fees of attorneys and auditors, and loss,
damage or liability suffered or incurred by the Distributor in the collection of
such monies, whether by litigation or otherwise.

     

            5.Trade Association Fees. An
allocable portion of dues, assessments and contributions
of the Distributor to the Motion Pictures Association of America, Association of
Motion Picture and Television Buyers, Motion Picture Export Association, Academy
of Motion Picture Arts and Sciences, and any similarly constituted or substitute
organizations throughout the world which are:

     

    
      	
              a)  

            	
              an
      incidence of membership in such
organization,

            

    

                 

              b) in
support of the purposes of such organization, and

     

    
      	
              c)  

            	
              an
      obligation of a majority of the major motion picture distributors who are
      members of such organization.

            

    

     

            6.Guild Payments. All
costs incurred with respect to payments required, including
employer fringe benefits and Taxes payable with respect thereto, under
applicable collective bargaining agreements by reason of or as a condition to
any exhibition of the Pictures, or any part thereof, or any Use or reuse thereof
for any purpose or in any media whatsoever. If the Owner or any Affiliate of the
Owner is entitled, either directly or by way of participation in any fund, to
any Guild Payments (the "Owner's Residuals"), to the extent permissible under
applicable collective bargaining agreements, the amount of the Owner's Residuals
shall not be a deductible Distribution Expense, but shall be treated as an
advance against the sums due to the Owner; and conversely any sums due to the
Owner paid to the Owner shall constitute an advance against the Owner's
Residuals.

     

            7.Industry Assessments.
An allocable portion of industry assessments levied by the
AMPTP, MPAA, MPEA or any similarly constituted or substitute organizations which
are:

     

    a) an
incidence of membership in such organization,

                

                b) in
support of the purposes of such organization, and

     

    c) an
obligation of a majority of the major motion picture distributors who are
members of such organization, including industry campaigns endorsed and
supported by all or substantially all the major Persons in the motion
picture

     industry;
contributions to legal fees and related overhead of counsel
retained to monitor and investigate infringement of copyright in motion pictures
distributed by the Distributor; assessments for awards,
settlements,

     contributions,
judgments, legal fees and other costs incurred in connection with anti-trust
proceedings (including law suits and arbitrations) of any kind in which the
Distributor is involved.

    
      
         

      

      
        26

        
          

        

      

      
         
        8.Quota
Losses. Expenditures in a Territory outside the United States which
result from the acquisition of one or more motion pictures produced in that
Territory as a pre-requisite to the eligibility of the Pictures for distribution
in any market or media in that Territory.

    

     

            9.Sub-distributor
Fees. Any and all fees payable to any sub-distributors or licensees of
the Distributor, with respect to any receipts of such sub-distributors or
licensees which are included as Gross Film Rentals under paragraph 2(a)
above.

     

    B.Print and Advertising Costs. The
aggregate of the following (but not to exceed $250,000
unless otherwise approved by the Owner):

     

            1.Advertising
Costs. All costs incurred to advertise, publicize and promote
the
Pictures in any way, including the following:

     

                a) Publications.
Costs of purchasing advertising space in newspapers, magazines,
periodicals, trade papers and other printed publications, all charged at the
standard prices or card rates in effect at the time any applicable cost
is

                 incurred, as maintained by the
agencies or facilities generally used by the Distributor, regardless of how
actually placed or the Cost thereof.

     

                b) Radio
and Television. Costs of purchasing advertising time on the radio and
television, all charged at the standard prices or card rates in effect at the
time any applicable cost is incurred, as maintained by the agencies
or

                 facilities generally used by the
Distributor, regardless of how actually placed or the Cost thereof; costs of
physical materials used in the production and broadcasting of commercials by
radio and television; cost of preparation,

                 production and shipping of
commercials; costs of placement, integration and monitoring of
commercials.

     

                c) Direct
Mail. Costs of preparing and mailing printed advertising and promotional
materials, including an allocable share of the salaries and employee benefits of
employees of the Distributor directly engaged in any of the

                 foregoing.

     

                d) Display.
Costs of purchasing advertising space on billboards and other locations,
all charged at the standard prices or card rates in effect at the time any
applicable cost is incurred, as maintained by the agencies or
facilities

                 generally used by the Distributor,
regardless of how actually placed or the Cost thereof; and of preparation,
production and distribution of display materials.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

            e) Promotional
Activities. Salaries, fees and living, travel and business expenses of
publicists, press representatives and field and exploitation men, allocated on
the basis of time spent on the Pictures, whether paid to the

                 Distributor's employees or other
persons; salaries, fees and living, travel and business expenses relating to
tours and personal appearances of personalities connected with the Pictures,
whether paid to the Distributor's

                 employees or other persons; costs
of previews, screenings and premiers; living, travel and business expenses (but
not salaries) of the Distributor's advertising and publicity personnel when
travel is directly attributable to or

                 occasioned by the
Pictures.

     

                f) Entertainment.
Costs of entertaining press and personalities.

     

    g) Commercial
Tie-Ins.
Costs of creation, procurement, preparation, placement and supervision of
promotional tie-ins with commercial products, including the purchase of
advertising space and time, all charged at the standard

     prices
or card rates in effect at the time any applicable cost is incurred, as
maintained by the agencies or facilities generally used by the Distributor,
regardless of how actually placed or the Cost thereof

     

    h) Research
Surveys and Tests. Costs of formulation, performance and evaluation of
research, surveys, studies and tests of advertising concepts, advertising
campaigns, media effectiveness, market demographics and the like
on

     a
qualitative and quantitative basis.

     

    i) Promotional
Materials. Costs of creation, preparation, production, fabrication and
distribution of press books, press kits, screening invitations, tickets,
programs, featurettes, teaser trailers, trailers, film clips,
special

     photography,
biographies, synopses, billing sheets, lobby displays, stills, publicity
releases, posters, advertising accessories and sound
records.

     

    j) Printing
Materials. Costs of creation, preparation, production and fabrication of
art work, engravings, cuts, plates, color separations and mechanicals, including
the physical materials required therefor.

     

    k) Convention
Expenses. Costs incurred at sales conventions or festivals, including
travel, entertainment, lodgings, promotional activities and other matters as
allocated to the Pictures.

     

                1)Co-op
Advertising. Any of the foregoing items of expenses
incurred
to advertise, publicize and promote the Pictures in any manner in connection
with the Use of the Theatrical Rights, whether paid by the Distributor
or

                 charged
to him as a credit against or a deduction from Gross Receipts in accountings
rendered to the Distributor.

     

            2.Advertising
Overhead. An amount equal to ten percent (10%) of the aggregate
of all costs deductible under the preceding sub-paragraph (a) above to cover
salaries and indirect operating costs of the Distributor's advertising and
publicity personnel.

     

    
      
         

      

      
        28

        
          

        

      

      
         
        3.Costs
of Prints and Other Materials. All costs, to the extent not included in
Negative Costs, incurred to manufacture, prepare, duplicate or deliver positive
prints of the Pictures and any other negative or positive film in any gauge,
video or electronic tape recording, cassette, disc or other physical material or
substance of any kind produced by means of any photographic, electrical,
electronic, mechanical or other process or device now known or hereafter
devised, on or with respect to which the Pictures or any part thereof is
printed, imprinted, recorded, reproduced, duplicated or otherwise preserved (the
"Materials"), charged at commercially reasonable costs (which are the
Laboratories approved by the Distributor and the Owner hereunder) or any
facility of similar quality mutually approved by the Distributor and the Owner
to be utilized in connection with the Pictures, including without limitation the
following:

    

     

                a) Material
Costs. All costs of manufacture of positive prints or other Materials,
including laboratory, labor, service, materials and facilities, and costs in
connection therewith.

     

                b) Foreign
Version Costs. All costs incurred to make and deliver foreign language
versions of the Pictures, whether dubbed and/or sub-titled in one or more
languages including transaction, narration, looping,
re-titling,

                 superimposing, re-cutting,
spotting, re-recording, re-mixing, re-dubbing and re-editing of the Pictures and
trailers; and transportation, packing and handling of prints and parts thereof
with respect to the preparation of foreign

                 language versions of the
Pictures.

     

                c) Re-Editing
Costs. All costs incurred to re-cut, re-edit, rerecord, re-score, re-mix
and re-dub the Pictures, including changes, eliminations or additions with
respect to the Pictures for any use of the Pictures; and
conforming

                 (voluntarily or involuntarily) the
Pictures to requirements of censorship, classification and rating by
governmental or local organizations or other Persons, including exhibitors and
religious and ethnic Group, and to national

                 and/or
political regulations of any Territory.

     

                d) Shipping/Delivery
Costs. All costs of inspection, repair and renovation of prints, reels
and containers, and all costs of packing, storing, shipping and delivery
thereof.

     

    C.Miscellaneous Costs. All costs incurred by
the Distributor in connection with the exploitation
of the Rights, including, without limitation, the following:

     

            1.Royalties.
The costs of all licenses required to permit the exhibition, distribution or
other Use of the Pictures, trailers and prints thereof, including fees for use
of any patented equipment or processes; synchronization, recording and
performing royalties and fees with respect to performance of lyrics and music
and literary material; any re-use fees and, costs advanced by the Distributor;
any costs, not included in. Negative Cost, incurred to acquire, use and publish
any Music Rights advanced by the Distributor.

     

            2.Insurance
Costs. All costs for insurance coverage of any and all risks of loss with
respect to the Pictures and any components thereof, to the extent not
included
in Negative Cost, including errors and omissions insurance and loss or damage to
prints and physical material insurance. The Distributor may elect to self-insure
as to any items of risk and charge as an Insurance Cost an amount equal
to the insurance premium the Distributor would otherwise have paid for such
insurance. The Distributor shall, in its sole discretion, determine whether or
not to obtain or maintain any insurance or to self-insure any items of
risk.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

            3.Copyrighting
Costs. All costs, not included in Negative Cost, to obtain copyright and
the extension and renewal thereof, and other similar protections throughout the
world, wherever and whenever incurred within the Distributor's sole
discretion.

            

            4.Copyright
Infringement Costs. All costs incurred to protect the copyright Ownership
in the Pictures and to prevent any infringement of copyright or violation of
rights in and to the Pictures or any elements thereof (whether by litigation or
otherwise) and reasonable attorneys' fees of outside counsel in connection
therewith.

     

            5.Claims
and Litigation Costs. All costs incurred by reason of claims asserted by
third parties which arise out of the production, distribution, exhibition and/or
exploitation of the Pictures (including claims of infringement, unfair
completion, violation of any right of privacy, defamation or breach of contract)
including reasonable attorneys' fees of outside counsel, litigation expenses,
investigation expenses and reasonable reserves established by the Distributor in
its good faith business judgment as reasonably necessary to protect against the
probability of ultimate expense, loss, damage or liability as to claims the
Distributor determines in its sole business judgment to be of sufficient merit
as to warrant such reserves. The Distributor shall have the right, in its sole
discretion to settle and pay any such claim. After settlement or final judicial
determination of any such claim, any reserve taken shall be adjusted to reflect
the actual costs paid by the Distributor and the net balance after such
adjustment, if any, shall be credited to Gross Receipts.

     

            6.Communication
Costs. Costs of telephone, telegraph, cable, postage, messenger and
xeroxing costs.

     

            7.Other.
Any other actual costs of any nature reasonably paid or incurred by the
Distributor in connection with the derivation of revenues from all Pictures in
all markets and media.

     

    V.Statements and Payments.

     

    A.
Delivery. The Distributor agrees to render to the Owner periodic
statements ("Statements") showing in summary form the calculation of any sums
due to the Owner under this agreement including, but not limited to, Gross
Receipts, peomitted fees and expenses hereunder. Each Statement shall be
accompanied by payment of the amount (if any) shown to be due to the Owner by
check drawn on any, of the Distributor's banks in United States dollars.
Statements shall be rendered with respect to each of the following periods
("Periods"):

    
      
         

      

      
        30

        
          

        

      

      
         
    1.An
initial period beginning on the date hereof and ending on December 31,
2005.

    

     

        2.Four
periods of twelve (12) months each next succeeding the Period defined
in Paragraph V(A) above.

     

    B. Subsequent
Periods. All Periods thereafter shall mean successive six month periods
in which either at least $50 is due to the Owner (and for this purpose any
amounts due under $50 shall not be forfeited but accumulated and carried to
subsequent Periods until the total amounts due are equal to or greater than
$50), or the Distributor receives a written request for a Statement from the
Owner, prior to the end of the applicable Period. Except as otherwise
specifically provided herein, all Periods shall end on the regular statement
dates selected by the Distributor from time to time for reports hereunder and
the length of any Period may be extended or shortened by up to 45 days to
conform to these dates as they may change from time to time. Except as
specifically provided herein, all Statements and payments due with respect
thereto shall be mailed to the Owner in accordance with Article 9 hereof within
60 days after the end of each Period. Any Statement may be changed from time to
time to effectuate year end or other adjustments by the Distributor's accounting
department or chartered accountants, to correct any errors or omissions or for
similar purposes.

     

    C. Inspection
of Accounts. The Distributor agrees to keep written books of account in
the Distributor's customary form relating to the calculation of the sums due to
the Owner pursuant to this Agreement (the "Participation Account"). Subject to
the limitations set forth below, the Owner shall have the right, at its sole
expense, to inspect the Participation Account to verify the accuracy of any
Statement which has not become incontestable under the terms hereof (an
"Inspection"). The Owner agrees that any Inspection and their respective right
to contest or object to any Statement or any payment made pursuant hereto will
be subject to the following:

     

        1.An
Inspection shall be conducted only by a firm of certified accountants
approved
by the Distributor (whose approval shall not be unreasonably withheld) and which
shall not then be engaged in an examination of the Distributor for
any

         other
person.

     

        2.An
Inspection (i) shall be conducted only once with respect to each Statement,
only during normal business hours in such a manner as to not unreasonably
interfere with the Distributor's normal business activities and only at such
places as

         the
Participation Accounts are kept, (ii) shall not continue for more than 30
consecutive days, and (iii) shall not be conducted more than once in any one
year period.

     

        3.Each
Statement (and all items and information contained therein) shall be
deemed
correct and shall be conclusive and binding on the Owner and not subject to
objection or contest for any reason, unless:

     

            a)the
Distributor shall receive from the Owner an objection, in writing,
specifying in detail the items or transactions which the Owner contests, on or
before the last day of the 6th full calendar month next succeeding the date
the

             applicable Statement is mailed to
or otherwise furnished to the Owner; and

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

            b)if no
written agreement resolving such objection is entered into, the Owner shall commence an action in
arbitration based only on the claims made in the applicable written
objection on or before the earlier of: (y) the last day of the
12th

             full calendar month next succeeding
the date the applicable
Statement is mailed to or otherwise furnished to the Owner as herein provided; or (z) the expiration
of the applicable statute of limitations.

     

    VI.General
Provisions.
The following shall be applicable to this Exhibit:

     

    A. All
financial matters relating to the calculation of the sums due to the Owner
hereunder
shall be determined and accounted for in all respects pursuant to the
Distributor's customary participation accounting practices. The Distributor
shall be entitled to establish reasonable reserves for anticipated costs which
may be deducted in determining the sums due to the Owner hereunder. In no event
shall any item be included or deducted or excluded more than once in the
calculation of the sums due to the Group hereunder.

     

    B. Wherever
the Distributor (i) receives from any license either a flat sum or a
percentage
of the receipts, or both, for any rights to a group of motion pictures
(including any of the Pictures) which does not specify what portion of the
payments apply to the respective motion pictures in the group or (ii) receives
foreign currency under the next paragraph hereof relating to a group of motion
pictures (including any of the Pictures), then in any and all such situations
the Distributor shall include in, or deduct from, the Gross Receipts, as the
case may be, such sums, determined in good faith, as may be consistent with the
Distributor's usual practice in such matters. All costs deducted in determining
sums due to the Owner hereunder shall be apportioned to the Pictures if incurred
or expended on an industry basis, or in conjunction with other motion Pictures
distributors, or with respect to the Pictures and other motion pictures
distributed by the Distributor as determined by the Distributor in good faith
and as may be consistent with the Distributor's usual practice in such
matters.

     

    C. No sums
received by the Distributor relating to the Pictures shall be included in
Gross
Receipts unless and until such sums have been (i) received by the Distributor in
United States dollars in the United States in freely available funds; or (ii)
used by the Distributor for the production or acquisition of motion pictures
which can be lawfully removed from the Territory involved, in which event they
shall be included in Gross Receipts for the Period during which an amount
(computed at the official or unofficial rate of exchange, as the Distributor may
elect) equal to the amount expended for such production or acquisition, plus
interest thereon as herein provided, has been recouped by the Distributor (in
excess of normal distribution fees and Distribution Expenses) from distribution
thereof outside the Territory involved; or (iii) used by the Distributor for the
acquisition of tangible personal property which can be and is lawfully exported
from the Territory involved, in which event the United States dollar equivalent
of the currency utilized to acquire such property shall be included in Gross
Receipts hereunder for the Period during which such property was so exported,
such United States dollar equivalent to be computed at the official or
unofficial rate of exchange, as the Distributor may elect, in effect on the date
of export. Any sums not includable in Gross Receipts due to the foregoing are
"Restricted Proceeds". The Distributor will, promptly after receipt of a written
request from the Owner (but not more frequently than annually), advise
the

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    Owner in
writing as to any revenues which are then Restricted Proceeds, and the
Distributor shall, at the written request and expense of the Owner (subject to
any and all limitations, restrictions, laws, rules and regulations affecting
such transactions), deposit into a bank designated by the Owner in the Territory
involved, or pay to any other Person designated by the Owner in such Territory,
such part thereof as would have been payable to the Owner hereunder. Such
deposits or payments to or for the Owner shall constitute due remittance to the
Owner, and the Distributor shall have no further interest therein or
responsibility therefor. The Distributor makes no warranties or representations
that any part of any such foreign currencies may be converted into United States
dollars or transferred to the account of the Owner in any foreign Territory. In
no event shall the Distributor be obligated to apply Gross Receipts of any
Territory not actually received by the Distributor in United States dollars in
the United States to the recoupment of any costs or expenses incurred with
respect to the Pictures in any other Territory.

     

    D. The
relationship between the Owner and the Distributor is solely that of debtor and
creditor with respect to sums due pursuant to this Agreement. The Owner
expressly acknowledges that the Owner has and will have no right, title or
interest of any kind or character whatsoever in or to the proceeds of the
Pictures (other than as specified herein) throughout the Territory and during
the Term of this Agreement, and no lien thereon or other rights in or to any
receipts of the Pictures; and that the same shall be and remain the
Distributor's sole and exclusive property, and the Distributor shall not be
deemed a trustee, pledgeholder or fiduciary. The Distributor may commingle any
Gross Receipts with other monies as it shall determine, and the Distributor
shall, as between it and the Owner, have the right to make any use of these
monies (whether or not Gross Receipts hereunder) as it shall determine in its
sole discretion and to retain for its account all interest and earnings thereof.
The Owner shall have no right to receive any interest on any sums earned by the
Distributor prior to payment hereunder. The Distributor shall have the right to
mortgage, pledge, assign for security purposes or grant a security interest in
any Gross Receipts as it shall determine in its sole discretion. As between the
Owner and the Distributor, the Distributor shall have complete authority to
distribute the Pictures and to license the exhibition thereof throughout the
Territory for the Term of this Agreement, all as set forth in the
Agreement.

     

    E. The
Distributor may deduct from any payments to or for the account of the Group
hereunder the amount of any Taxes or other withholding which, pursuant to
applicable Laws, is required to be made by the Distributor, based upon, measured
by or resulting from payments to or for the account of the Owner. Such deduction
shall be in accordance with the good faith interpretation by independent legal
counsel of the Distributor of any Laws. The Distributor shall not be liable to
the Owner for the amount of such deductions because of the payment of said
amount to the Person involved. The Owner shall make and prosecute any and all
claims which it may have as to such tax deductions and/or withholdings directly
with the Person involved.

     

    F. If the
Distributor or any of its Affiliates makes any overpayment to the Group or any
of its Affiliates hereunder or if the Owner or any of its Affiliates is indebted
to the Distributor or any of its Affiliates for any reason, the Owner shall pay
the Distributor such overpayment or indebtedness on demand or at the election of
the Distributor, the Distributor may deduct and retain for its own account an
amount equal to any such overpayment or indebtedness from any sums that may
become due or payable by the Distributor to the Owner or for the account of the
Owner.

    
      
         

      

      
        33

        
          

        

      

      
         
G.The
Group waives any right which the Owner may have at law or equity to revoke,
terminate, diminish or enjoin any rights granted or acquired by the Distributor
under the Agreement by reason of any claim which the Owner may assert for
non-payment of any monies claimed due and payable hereunder, it being agreed
that the Owner shall be limited to an action at law for recovery of any such
monies claimed.

    

     

    
      
         

      

      
        34

        
          

        

      

      
         

    

    EXHIBIT
"4"

    TO

    INTERNATIONAL
DISTRIBUTION AGREEMENT

     

    DEFINITIONS

     

    Unless
otherwise defined, the following terms, when used in the Distribution Agreement
or in the Exhibits thereto, shall have the following meanings:

     

    1. "Advertising Materials" shall
mean any signature, name and likeness or biographical material and any materials
available to be used by the Distributor, in the exercise of any Rights
hereunder, including, without limitation, any trailers, teasers, key artwork,
advertising accessories and lithographs, whether prepared by or under the
authority of or otherwise delivered to the Distributor.

     

    2. "Affiliate" means any Person
owned or controlled by, controlling or under common
control with the Distributor or the Owner, as the case may be. For purposes of
this Agreement, Ownership directly or indirectly of more than 50% of 100% of the
voting stock and/or other voting equity security of a Person shall be deemed
"control".

     

    3. "Agreement" means this
international distribution agreement including any and all schedules or exhibits
hereto, and all amendments made by written agreement among the partners
hereto.

     

    4,Intentionally
Deleted.

     

    5. "Consent" of either party
shall mean an approval of a particular matter clearly set forth in writing and
given prior to the matter for which Consent is required. A Consent may be
withheld for any reason deemed sufficient by the party entitled to
Consent.

     

    6. Intentionally
deleted.

     

    7. "Delivery" shall mean Delivery
of the Pictures to the Distributor in accordance with the provisions of this
Agreement. Deliver when used as a noun or verb shall mean Delivery in accordance
with Exhibit "2".

     

    8. "Derivative Rights" shall mean
all Remake and Sequel Rights and all Television Series and Television Special
Rights.

     

    9. "Derivative Works" shall mean
all motion pictures (including remakes, sequels, and prequels) and television
spin-offs, series and specials produced relating to the Pictures.

     

    10. "Distribution Fee" has the
meaning ascribed thereto in Paragraph 4 of Exhibit "3" to this
Agreement.

     

    11. "Exhibits" shall mean the
Schedules and/or Exhibits attached to this Agreement by reference as if set
forth in full.

     

    12."Event of Default" shall have
the meaning ascribed hereto in Section 7.3 hereof.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    13. "Force Majeure" shall have the meaning ascribed
to it in Section 7.6 hereof.

     

    14. "Foreign Versions" means the right in the
Distributor's sole discretion to make foreign and other language versions of the
Pictures including, but not limited to, cut-in, superimposed, dubbed and
synchronized versions, and exhibition prints thereof, for use in such countries
in the Territory as the Distributor deems advisable and in the Distributor's
sole discretion, and the right to grant to its licensees or sub-distributors in
the Territory the right to make such versions.

     

    15. "Free Television Rights" means
all rights to exhibit the Pictures by means of television transmission which is
available for reception by the general public in private homes or offices
without a separate consideration for viewing the applicable Pictures and which
is transmitted to television receivers at least in part by over-the-air
broadcast signals originating within the Territory.

     

    16. "Home-Video Rights" means all rights
to manufacture, distribute, rent and sell videocassettes, videodiscs, videograms
and other devices embodying the Pictures in any format, whether now known or
hereafter invented or discovered, which enables a motion picture to be perceived
visually when displayed through or as part of any electronic, mechanical or
other apparatus (such as a television-type playback system) and primarily
intended for private non-commercial use. Home-Video Rights do not include
Theatrical, Non-Theatrical or Television Rights.

     

    17. "Incidental Rights"
means:

     

    
      	
              (a)  

            	
              The
      right to perform by Use of the Pictures and Advertising Materials any and
      all

            

    

    
      	
               
      

            	
              music,
      lyrics, scores and musical works embodied in or synchronized with the
      Pictures and/or with the soundtrack thereof ("Music") only as synchronized
      with and embodied in the Pictures or Advertising Material as
      Delivered.

            

    

     

    
      	
              (b)  

            	
              The
      right to Use the title or titles of the Pictures and to change the title
      of the

            

    

    
      	
               
      

            	
              Pictures
      from time to time (including translation into languages other than
      English).

            

    

     

    
      	
              (c)  

            	
              The
      right to exercise or authorize others to exercise the Rights and all
      Incidental

            

    

    
      	
               
      

            	
              Rights
      under any Terms and in any such manner as the Distributor may deem
      appropriate in its sole discretion.

            

    

     

    
      	
              (d)  

            	
              The
      right to make and use dubbed and sub-titled versions of the Pictures and
      the

            

    

    
      	
               
      

            	
              trailers
      thereof, including, but not limited to, cut-in, synchronized and
      superimposed versions thereof.

               

            

    

    
      	
              (e)  

            	
              The
      right to permit commercial messages to be broadcast or telecast before,
      during

            

    

    
      	
               
      

            	
              and
      after the Use of the Pictures.

            

    

     

    
      	
              (f)  

            	
              The
      right to publicize and advertise the Pictures and to cause or permit
      others to

            

    

    
      	
               
      

            	
              do
      so by Use of Advertising Materials and otherwise and, without limiting the
      generality of the foregoing, the Incidental Rights shall include for
      purposes of publicity and advertising the Pictures:

               

            

    

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    (i) The right
to publish or cause or permit to be published, and in such form as the
Distributor may deem advisable, synopses, summaries, resumes or abridgments of
the Pictures or screenplays and properties upon which the Pictures are based in
newspapers, heralds, magazines, trade periodicals, comic books, programs,
booklets, posters, lobby displays, press book and other publications and in all
other media of advertising and publicity, none of which shall include more than
10,000 words taken from the Pictures or screenplays and properties upon which
the Pictures are based.

     

    (ii) The right
to broadcast or license or authorize others to broadcast by radio or television
adaptions, versions or sketches of the Pictures or any parts or portions
thereof, from sound records, with living persons or otherwise, none of which
shall include material from the Pictures with a regular running time of more
than fifteen 0 5) minutes.

     

    (iii) The right
to use the Advertising Materials in connection with any Person as to whom the
Owner has obtained such rights in connection with the Pictures.

     

    (iv) The sole
right (but not the obligation) at such times and places in the Territory and for
purposes as it may desire, to preview and otherwise exhibit each Picture prior
to its release to the general public.

     

    (v) The right
to advertise and publicize the production or Delivery of each Picture and all
elements thereof in the Territory.

     

    
      	
              (g)  

            	
              The
      right to assert and prosecute all claims, demands or causes of actions
      against any and all Persons for the unauthorized or illegal Use in the
      Territory of any Rights or any materials upon which the Pictures are based
      and to otherwise enforce, protect and defend all or any
      Rights.

            

    

     

    
      	
              (h)  

            	
              The
      right to make such additions, alterations, cuts, interpolations,
      eliminations or other changes in the pictures, Advertising Materials,
      Prints or other material solely:

            

    

     

    
      	
              (i)  

            	
              to
      comply with all requirements imposed by any Person as a condition to the
      Use of any Rights and to comply with any Law in any area of the Territory
      (such as censorship or restrictive
ratings);

            

    

     

    (ii) to permit
the Distributor to exercise its other Incidental Rights;

     

    (iii) to add to
the front or rear of the Pictures (either before or after the completed Pictures
are Delivered) a credit to the Distributor indicating that the Distributor is
the distributor of the Pictures in the Territory and to grant a similar right to
other distributors or exhibitors in the Territory, all of which may embody logos
and artwork as customary for such credit;

     

    (iv) for Use
of Television Rights;

     

    (v) to enable
the Pictures to comply with the Terms hereof (such as limits on lengths and
requirements and MPAA rating); and

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    (vi) in
order to conform to the peculiar national and political prejudices in any nature
in the Territory.

     

    (i)The
right to make Foreign Versions of the Pictures.

     

    18. "Indemnification
Provisions" means the provisions of Paragraph 6.3 of this Agreement and
any "Loss" as to any "Indemnities"
or any "Claim"
shall be as therein defined.

     

    19. "Initial
Release Date" means the date on which the first Use of Theatrical Rights
in the Pictures commences in more than one major metropolitan area in the
Territory and other than previews, whether or not paid, and other promotional
screenings.

     

    20. "Initial
Term" shall have the meaning ascribed thereto in Section 3.1
hereof.

     

    21. "Law"
means any present or future statute or ordinance, whether municipal,
state, national or territorial, any executive, administrative or judicial
regulation, order, judgment or decree, any treaty or international convention,
any rule or principle of common law or equity or any requirement, custom or
practice with equivalent force of law.

     

    22. "Merchandising
Rights" means the right to sell, lease, license, distribute, exploit,
sub-license and otherwise deal in and turn to account, and to authorize others
so to do, the right to arrange for commercial tie-ups with and endorsements,
distribution and use of any article, product or service (including, without
limitation, souvenir programs, picture or comic books, electronic games, toys,
clothing, school supplies and the like) based upon or developed or created from
any part or all of the Pictures or the screenplay thereof, or the plot,
characters, incidents, objects, logos, artwork, Advertising Materials or
elements contained in said screenplay or the Pictures all of which are
hereinafter collectively called "Merchandising Rights", subject to any
applicable union, guild or collective bargaining agreement, or any third party
contractual restrictions which have been approved in writing by the Distributor.
The Owner hereby assigns, to the Distributor for the Distributor's use
throughout the Territory, the right to utilize the Advertising Rights
(including, without limitation, the name and/or likeness of actors or other
Persons rendering services in connection with the Pictures), in connection with
any Merchandising Rights set forth above, to the extent the Owner has secured or
shall secure such Rights in the Owner's or its predecessors in interest's
agreements with such actors or other persons. The Owner hereby agrees to use its
best efforts to obtain such Rights from such predecessors in interest, or from
such actors or other persons rendering services in connection with the Pictures.
The Distributor shall have complete discretion to utilize the Merchandising
Rights and to determine in its discretion and on what terms such Rights shall be
supplied to the Owner or sponsors of commercial products or whether any
consideration so paid shall be payable in whole or in part to the Persons whose
names are utilized in that connection.

     

    23. "Music
Rights" means all rights under copyright and otherwise, throughout the
Territory in and to the soundtrack and all original musical compositions and
sound recordings contained upon the soundtrack of the Pictures (collectively the
"Music") (it being agreed that the copyright shall be held by the Group), for
the Term hereof, and all other rights with respect to the Music granted by third
parties to the Owner or its predecessor in interest, including, without
limitation, writers, performers and producers. The Music Rights specifically
include, but are not limited to the sole and exclusive synchronization and
public performance rights (whether or not for profit and whether or not in
conjunction with the exhibition of the Pictures) of and to any and all of the
Music recorded or contained upon the soundtrack of the Pictures. The Music
Rights also include all music publishing rights in original music compositions,
including, without

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    limitation,
the sole and exclusive right to collect and receive any and all royalties, fees
and all other forms of remuneration for or in connection with such rights or the
license or exercise thereof. Except for nonexclusive synchronization and
performance licenses, the Music Rights shall include the sole right to grant
licenses and to authorize others to grant licenses with respect to all rights
under copyright in the Music. For the purposes of exploiting such Rights and
collecting the fees, royalties and other remuneration which may be derived
therefrom, the Distributor shall be entitled in its discretion to employ the
services of, or assign said rights (in whole or in part) to, one or more
publishers, including the Distributor's own subsidiaries and Affiliates, to
charge and deduct therefrom their commissions, fees, expenses and other charges,
and to charge and deduct for transmission to the writers of the musical
compositions the royalties and other payments due to such writers. Agreements
with such publishers shall, if reasonably possible, provide for the semi-annual
payment of royalties. The Distributor shall be authorized to grant to such
publishers, including the Distributor's own subsidiaries and Affiliates, the
benefit of any warranties, representations and indemnities made by the Owner
hereunder. At the Distributor's request, the Owner agrees to enter into
agreements with such publishers, including the Distributor's own subsidiaries
and Affiliates, with respect to the Rights granted to the Distributor hereunder.
The Owner hereby irrevocably appoints the Distributor, or its nominee, the
Owner's attorney-in-fact (the Owner hereby acknowledges that such appointment is
coupled with an interest) during the term of the grant of rights hereunder, in
the name of the Distributor or its nominee, or in the name of the Owner, to
enter into such agreements in the event of the Owner's failure to do so. The
Owner agrees that the Distributor or its nominees or assignees shall be entitled
to enter into direct agreements with the writers of the music regarding the
rights transferred hereunder, and regarding the payment of royalties to such
writers. Wherever practicable the agreements between the Owner (or its
predecessor in interest) and the writers shall provide that the writers will
enter into such direct agreements at the request of the Distributor or its
nominees or assignees.

     

    24. "Non-Theatrical
Rights" means all Rights to exhibit the Pictures directly to paying
audiences including for educational, industrial, commercial and trade purposes.
Non-Theatrical Rights shall not include any Theatrical Rights, Television Rights
or Home-Video Rights.

     

    25. "Notice"
means a written notice served on a party hereto in accordance with
Section 9.10 of the Agreement.

     

    26. "Notice
Date" means the date of either Party's receipt of a Notice as set forth
in the Agreement.

     

    27. "Other
Agreements" shall have the meaning ascribed thereto in Section 9_5
hereof.

     

    28. "Outright
Sale" means any exclusive lease of Theatrical Rights to any Person for a
term more than one (1) year in consideration of a fixed sum with no obligation
to account to the Distributor or its Affiliates.

     

    29. "Participation
Account" shall have the meaning ascribed thereto in Paragraph 6 of
Exhibit "3" to this Agreement.

     

    30. "Pay
Television Rights" means all Television Rights which are not Free
Television Rights.

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    31. "Person"
means any natural person or any firm, corporation, association,
organization or other enterprise organized or operating under the Laws of any
jurisdiction.

     

    32. "Phonorecord
Rights" means the right, privilege and authority to use and reproduce, to
grant licenses to use and to reproduce, and to authorize others to grant
licenses to use and to reproduce, the soundtrack of the Pictures (except for
musical compositions for which there is only a non-exclusive synchronization and
performance license) or any part thereof in the manufacture of and for the
purpose of manufacturing, selling or otherwise distributing and exploiting said.
soundtrack in the form of phonograph records, tapes, transcriptions, or any
other form of medium of any nature (collectively the "Phonorecords") whatsoever
throughout the Territory. The Phonorecord Rights shall also include any and all
rights throughout the Territory under copyright and otherwise, and the right to
secure copyright throughout the Territory in and to the Phonorecords, for the
full period of copyright and any renewals and extensions thereof. The Owner
agrees that in the advertising, publicity and exploitation of the Music and
Phonorecord Rights set forth herein above, the Distributor and its
representatives, successors, assigns and agents, including any Subsidiaries and
Affiliates of the Distributor, shall be entitled to use the title of and scenes
from the Pictures, artwork and design used in and in connection with the
Pictures, and the name, photographs, physical likenesses, biographical data,
signatures and reproductions of the voice of any persons rendering services in
connection with the Pictures, including, but not limited to, the cast, composer
and the conductor.

     

    33. "Picture
means a feature length motion picture being produced by, or on behalf of,
the Owner for distribution throughout the world presently entitled
"Noise".

     

    34. "Publishing
Rights" means all Rights, to the extent held by the Owner, to publish,
distribute and sell hard cover or soft cover printed publications of all or any
part of the literary materials on which the Picture is based or artwork, logos
or photographic stills created for use in the Picture which may be included in
any novelization of this literary material, for sale to the public. The
Publishing Right shall include so-called "Novelization Rights", which include
the right, to the extent held by the Owner, to publish or cause to be published
the screenplays of the Pictures and/or novelizations and/or other adaptions
thereof including any translations thereof, into any language, throughout the
Territory, if the screenplays are not based on any previously published literary
property or previously produced stage play; or if the screenplays of the
Pictures are based on previously published literary property(s) or previously
produced stage play(s) and if the Owner (or its predecessor in interest) has
obtained such rights from the author(s) or publishers of such previously
published literary property(s) or previously produced stage play(s) (the Owner
hereby agreeing to use its best efforts to obtain such rights from said
predecessor in interest or said author or authors), the right to publish or
cause to be published the screenplays of the Pictures and/or novelizations
and/or other adaptions of the screenplays of the Pictures, including any
translations thereof into any language, throughout the
Territory.

     

    35. "Prequel,
Remake and Sequel Rights" means all prequel, remake and sequel rights in
and to the Pictures and the underlying property (including, without limitation,
all rights to make, create, and/or produce any additional motion pictures based
on the Pictures or the underlying literary material on which the Pictures is
based, or incorporating, derived from, or using any story elements and/or
characters and/or situations contained in the Pictures or the applicable
underlying literary materials, and to exploit any such additional motion picture
in all media in perpetuity throughout the universe).

    
      
         

      

      
        40

        
          

        

      

      
         
36. "Rights" means all or any particular
rights, licenses or privileges, under copyright or otherwise, granted to the
Distributor by the Owner under this Agreement to make Use of the Pictures, as
more particularly set out in Section 1.1 hereof.

    

     

    37. "Second Term"
shall have the meaning ascribed thereto in Section 3.2
hereof.

     

    38. "Statements" shall have the
meaning ascribed thereto in Paragraph 6 of Exhibit "3" to this
agreement.

     

    39. "Sub-Distribution Agreements" shall mean
those distribution, license or sales agency agreements entered into by the
Distributor in respect of the Rights in the Territory.

     

    40. "Television Rights" means all forms of
television rights, including "free television" and "pay television" rights in
the Pictures; the right to use film, tape, wire, discs and/or any other means,
methods, modes or devices, whether now known or hereafter conceived or created,
of any and all gauges; and the right to project, exhibit, reproduce, broadcast,
transmit and perform the Pictures by means of television transmission. With
respect to the Television Rights granted hereunder, for purposes of accounting
hereunder, "free television" shall be deemed to include basic cable television.
As used herein, "basic cable television" shall mean telecasting by means of
cable delivery system but shall not include "pay cable television" where the
subscriber to a basic cable services pays a per program or per channel charge in
addition to the charge paid for the regular cable service or an over-the-air
service where the subscriber pays a separate charge for the receipt of such
service.

     

    41. "Television Series" and "Television Special
Rights" means all television series and so-called "television special"
rights, and any other allied rights (including, without limitation, theatrical
stage rights) in and to the Pictures and the property upon which it is based
(including, without limitation, all rights to make, create, and/or produce any
additional motion pictures based on the Pictures or the underlying literary
material on which the Pictures is based, or incorporating, derived from, or
using any story elements and/or characters and/or situations contained in the
Pictures or the applicable underlying literary materials, and to exploit any
such additional motion picture in all media in perpetuity throughout the
universe).

     

    42. "Term" means collectively, the Initial
Term, the Second Term and the Third Term, if applicable.

     

    43. "Territory" means every country, state,
republic, principality, federation or other association of any kind existing now
or in the future in the universe.

     

    44. "Theatrical Rights" means all rights to
exhibit the Picture in theatres open to the general public where a fee is
charged for admission to view the Pictures.

     

    45. "Third Term" shall have the meaning
ascribed thereto in Section 3.2 hereof.

     

    46. "Use" when used as a noun, means any
exhibition, broadcast, transmission, publication or other exercise which may be
made of any particular Rights, materials or property, tangible or intangible, as
the context may require.

    
      
         

      

      
        41

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