distribution agreement “untitled eric singer project

Fairhillcatcher DistnAgmt 1aH:\LEGAL\SGerse\Untitled Kathryn Bigelow\DistnAgmt3.1.doc

1 Formatted: Font: 12 pt

DISTRIBUTION AGREEMENT “UNTITLED ERIC SINGER PROJECTFOXCATCHER”

This Distribution Agreement ("Agreement") is made and entered into as of October 19, 2012May 16, , 2012 by and between COLUMBIA PICTURES INDUSTRIES, INC. ("Columbia"), on the one hand, and FAIRHILL, LLCANNAPURNA FILMS, INC. (“LicensorFairhill”), with respect to the proposed motion picture project currently entitled “Untitled Eric Singer Picture" aka “American BullshitFoxcatcher” (“Picture”).

1. CONDITIONS PRECEDENT

1.1

. All of Columbia’s obligations with respect to the Picture are subject to the satisfaction of all of the following conditions precedent (the “Conditions Precedent”):

Executed Agreement

1.2

. Columbia’s receipt of copies of this Agreement and all exhibits thereto executed by LicensorFairhill, in form and substance satisfactory to Columbia.

Chain of Title and Copyright Status

1.3

. Columbia’s written approval of all documents and the copyright status of all materials upon which the Picture is based, evidencing LicensorFairhill’s clear and unencumbered chain of title with respect to the Picture and each and every element thereof and the production, distribution and other exploitation thereof and LicensorFairhill’s ownership of all rights in the Picture required in order for LicensorFairhill to grant to Columbia all rights granted herein, free and clear of all liens, claims and encumbrances (other than Permitted Encumbrances, as defined below) (collectively, the “Chain of Title”).

Security Documents

1.4

. LicensorFairhill’s execution and delivery to Columbia of such security documents (in accordance with Section ___17 below) and other instruments reasonably consistent herewith as Columbia may require to evidence and and/or perfect its security interest and other rights in the Picture, including, without limitation, a short form Instrument of Transfer in the form attached hereto as Exhibit “B” and, a Security Agreement and Mortgage of Copyright in the form attached hereto as Exhibit “C”, which shall authorize Columbia to prepare and record and UCC-1 Financing Statements in form and substance satisfactory to Columbia.

Insurance Policies

1.5

. LicensorFairhill’s procurement of insurance policies and delivery to Columbia of copies of such policies and certificates of insurance in accordance with the requirements of Section ___18 of this Agreement.

[Guarantee

1.6

. Columbia’s receipt of a corporate guarantee of LicensorFairhill’s obligations hereunder from Annapurna Films, Inc. (“Annapurna”), in the form attached hereto as Exhibit “D”. ]

Formatted: Indent: First line: 0.98", Outlinenumbered + Level: 2 + Numbering Style: 1, 2,3, … + Start at: 1 + Alignment: Left + Alignedat: 0.56" + Tab after: 0.56" + Indent at: 0.06", Don't adjust space between Latin andAsian text, Tab stops: 1.04", Left

Formatted: Bullets and Numbering

Security For Theatrical Distribution Expense Backstop Obligation. Columbia's receipt, not later than three (3) months prior to the then-scheduled initial theatrical release of the Picture, of security for the payment of the maximum possible Theatrical



Distribution Backstop Obligation which is satisfactory in form and substance to Columbia in its sole good faith discretion, which may take the form of (a) an irrevocable letter of credit issued by a U.S. commercial bank satisfactory to Columbia in its sole discretion, (b) a personal guarantee from an individual or corporate officer who has signing authority over an account at a U.S. commercial bank with sufficient funds in it to cover any possible Theatrical Distribution Expense Shortfall Payment, or (c) other security documentation satisfactory to Columbia in its sole discretion.

1.7 Zero Dark Thirty Agreement

2.

. Columbia's receipt of (i) fully executed copies of a Distribution Agreement between Columbia and Zero Dark Thirty LLC which contains a P&A Backstop Obligation with respect to such motion picture (the "Zero Dark Thirty P&A Backstop Obligation") which is substantially identical in economic effect to the P&A Backstop Obligation provided for in this Agreement and which is otherwise satisfactory in form and substance to Columbia in its sole discretion, and (ii) Columbia's receipt of a irrevocable letter of credit (or other security documentation) which is satisfactory in form and substance to Columbia in its sole discretion and which (A) provides satisfactory security (as determined by Columbia in its sole discretion) for payment in full of, or provides for direct payment in full of, the Zero Dark Thirty P&A Backstop Obligation, (B) is issued by a commercial bank or other financier satisfactory to Columbia in its sole discretion, (C) is in all other respects satisfactory in form and substance to Columbia in its sole discretion.

APPROVALS / CONSULTATION / PICTURE SPECIFICATIONS

2.1 Existing Creative Elements

.

Mutual Approvals, No Tie-Breaker

2.1.1 The shooting script ("Shooting Script") for the Picture is a The screenplay upon which the Picture shall be based, subject only to non-material changes (“Approved Screenplay”) (the screenplay dated January 6, 2012 __________________ written by E. Max Frye and Dan Futterman Eric Singer (“Singer”) is pre-approved as the Approved Screenplay and is an essential element);

. The parties acknowledge that the Picture commenced principal photography and that the following elements ("Existing Creative Elements") (“Approvable Elements”) shall be subject to Columbia’s and LicensorFairhill’s prior mutual approval, with no tie-breaker have already been used or engaged for the Picture:

2.1.2 The director of the Picture is Bennett Miller ("Approved Director") (“Approved Director”) and any grant of final cutting rights to the Approved Director (David O. Russell [“Russell”] is pre-approved as the Approved Director and is an essential element as director);

2.1.3 The three two lead actors for the Picture are Channing Tatum, Mark Rufalo and Steve Carell ("Approved Leads")(“Approved Leads”) (Jeremy Renner in the role of “_____” and Bradley Cooper in the role of “________” are pre-approved as the Approved Leads and are essential elements); and .

Formatted: Font: Bold

Formatted: Underline





2.1.4 The producers of the Picture (“Approved Producers”) ( are Megan Ellison and Chuck Roven are pre-approved as producer), Bennett Miller, Anthony Bregman and John Kilik. ; and

2.1.5 The production and post-production schedules for the Picture, it being understood that “Delivery” (as defined below) shall be scheduled to occur no later than the “Delivery Date” (as defined below).

2.2 Columbia Consultation Rights

2.3

. LicensorFairhill shall from time to time over the course of the production and post-production of the Picture meaningfully consult with Columbia in good faith regarding all other key creative matters pertaining to the pre-production, production and post-production of the Picture (including meaningful consultation with respect to the cutting of the Picture), provided that, subject to the Picture as delivered to Columbia conforming to the Picture Specifications and subject also to Columbia's approval rights with respect to the replacement of the Approved Director and the Approved Leads and with respect to the final cut of the Picture for the Columbia Territory, in the event of disagreement, LicensorFairhill’s decision shall be final.

Picture Specifications

2.3.1

. LicensorFairhill shall cause the Picture as delivered to strictly conform to the Approvable Elements mutually approved by Columbia and LicensorFairhill and the following requirements and specifications (“Picture Specifications”), except as the parties may mutually agree in writing:

Delivery

2.3.2

. The Picture shall be completed and delivered to Columbia in accordance with Section 9 below on or prior to the “Delivery Date” (as defined below).

Running Time

2.3.3

. The Picture shall have a running time (including main and end titles) of not less than ninety-five (95) minutes and not more than one hundred fifteen (115) minutes and shall not contain, without Columbia’s consent in each instance, any stock or reused film or stock or reused sound recordings (other than customary sound effects of no more than three (3) minutes in the aggregate).

Color/35mm. Unless otherwise specified by Columbia, the Picture shall be photographed in its entirety (i) in color, using 35mm raw stock negative film, (ii) on a full frame negative, (iii) exposed without a hard matte in the camera, using a standard academy aperture with the 1.33/1 aspect ratio on academy aperture center line, inside of which aperture the Picture composed for a 1.85/1 composition aspect ratio, having the same vertical center line, and (iv) with lettering on main and end titles not in excess of 71.3% of the width of said 1.85/1 composition with the same vertical center line, so that the lettering shall appear on the television screen in any television exhibition of the Picture; and was or will be recorded, synchronized and dubbed in a manner pre-approved by Columbia using Sony Dynamic Digital Sound. In the production and delivery of the Picture, LicensorFairhill shall use only first-class facilities and equipment for photography, recording, film processing, scoring, dubbing and other aspects of production and post-production of the Picture.



2.3.4 Original; Synchronized

2.3.5

. The Picture shall be an entirely new and original live action sound film telling a continuous story with all necessary dialogue (which dialogue shall be originally recorded primarily in the English language except where the Approved Screenplay specifies another language), music, lyrics and sound effects, fully edited, titled, and assembled with the sound track fully synchronized with the photographic action thereof; and shall be of first class technical quality, with a picture negative and soundtrack from which commercially acceptable positive release prints commercially acceptable for exhibition in first-class theaters can be made.

MPAA Rating

2.3.6

. The Picture shall conform to the standards and requirements of the Production Code of the Motion Picture Association of America (or any successor thereof) and upon submission will qualify for a rating not more restrictive than “PG-13R” (or the equivalent thereof) by the Code and Rating Administration of such Association or any successor thereto.

Negative Cost.

2.3.7

The Picture as delivered to Columbia shall have a final “Certified Negative Cost” (as defined below) of no less than Forty Million Dollars ($40,000,000)________________. As used herein, the term “Certified Negative Cost” shall mean the aggregate of direct, out of pocket, third party costs, charges, and expenses paid and incurred in connection with the development, production, completion, and Delivery of the Picture to Columbia, prior to deduction of any subsidies or rebates. No finance and/or interest expense or cost, no overhead charge to any person or entity other than LicensorFairhill, no so-called “soft costs”, and no participation and/or contingent compensation shall be included or made part of Certified Negative Cost unless specifically approved in advance by Columbia.

Title

2.3.8

. The Picture as delivered to Columbia shall have a title approved by Columbia andwhich has been cleared for both MPAA and legal purposes..

No Violations

2.3.9

. The Picture shall not, either in whole or in part, constitute or contain any material which constitutes a violation of any law or administrative regulation or rule, or an invasion, violation or infringement of any right or interest of any third party; and shall be produced in accordance with all applicable laws, statutes, ordinances, rules, regulations and requirements of all governmental agencies and regulatory bodies, both domestic and foreign, having jurisdiction with respect to the production of the Picture. To the extent required by Columbia, LicensorFairhill (or a single-purpose production entity owned by LicensorFairhill formed to produce the Picture) shall have become signatory to all applicable collective bargaining agreements. LicensorFairhill’s activities in connection with the Picture have not, are not and will not be in violation of any applicable collective bargaining agreements.

Creative Elements. The Picture as delivered to Columbia shall be based on the Shooting Script, which shall not be materially changed without Columbia's consent. The services of the Approved Director and Approved Leads shall not be terminated except for cause (i.e., by reason of their material default, death or long-term disability) or with Columbia's and Fairhill's mutual consent. If the services of the Approved Director and/or any of the Approved Leads are so terminated, then Columbia and Fairhill shall have true mutual approval



(with no tie-breaker) over their replacement(s). be based on the Approved Screenplay, shall have been directed by the Approved Director, shall star the Approved Leads, and shall have been produced by the Approved Producer. For the avoidance of doubt, Columbia shall have no obligation to (i) accept delivery of a Picture which does not contain, or (ii) approve any replacement(s) for, any of those elements listed as “essential elements” in Section 2.1 above.

2.3.10 Encumbrances

2.3.11 Clearances. Upon Delivery of the Picture to Columbia, all of the rights, services, performances, materials, equipment, sound, music, locations, names, products and logos used in the Picture shall be owned by or licensed to Producer in all media, throughout the "Territory" (as defined below), in perpetuity (or for at least the Distribution Term) pursuant to fully executed agreements which are fully assignable and which include a grant of all rights necessary for the production, distribution, promotion, advertising and other exploitation of the Picture (including, without limitation, work-for-hire language in all employment agreements) and which are in all respects in accordance with LicensorFairhill's representations and warranties set forth in Section 14 below.

. Upon Delivery of the Picture to Columbia, the Picture shall be free and clear of any claims, liens or encumbrances, excluding only: (i) the laboratory liens; (ii) talent deferments and participations (which shall be borne solely by LicensorFairhill except as specifically set forth herein); (iii) customary security interests granted to a financial institution providing production financing for the Picture (the "Bank"), provided that the Bank such financial institution has entered into an inter-party agreement (“IPA”) with LicensorFairhill and Columbia providing for release of such security interest and customary non-disturbance provisions; and (iv) customary security interest granted to applicable guilds (if any); and (v) a customary security interest granted and/or to a completion guarantor providing a completion guaranty in connection with the Picture (“Completion Guarantor”), provided such financial institution Completion Guarantor has entered into IPA with LicensorFairhill and Columbia providing for release of such security interest and customary non-disturbance provisions. The items set forth in clauses (i), (iii), (iv) and (v) of this paragraph are referred to herein (collectively, as the "Permitted Encumbrances"), all as set forth in Exhibit PE attached hereto and incorporated by reference. Columbia agres to entire into an IPA with Fairhill, the Bank and the Completion Guarantor upon terms and conditions within Columbia's customary parameters for agreements of such nature, including without limitation the terms set forth hereinabove.

2.3.12 Minors. Upon Delivery of the Picture, all agreements with minors

rendering services on the Picture shall have been approved by a court of relevant jurisdiction, and Producer shall have made all withholdings and/or trust account deposits required by such court order.

2.3.13 Accurate Representations and Warranties. The Picture shall comply in all respects with LicensorFairhill’s representations and warranties set forth in Section 14 below.

2.3.14 Net Production Budget. The "Net Production Budget" means an amount equal to (i) the in-going (as of the date of commencement of principal photography)




Direct Cost all-in, above-the-line and below-the-line, production budget for the Picture, inclusive of a contingency equal to Ten Percent (10%) of all other budgeted costs (the "Gross Production Budget"), less (ii) Fairhill's good faith estimate of all Production Incentives that will be received or credited to Fairhill or its affiliates or designees in connection with the Picture. [The parties acknowledge that the Gross Production Budget is $______________ and the Net Production Budget is $_______________________.]

3. DISTRIBUTION TERM, TERRITORY, GRANT OFCO-FINANCING, RIGHTS OWNERSHIP AND DISTRIBUTION

3.1 Co-Financing. Columbia and Fairhill hereby commit to co-finance the production and distribution of the Picture on the terms set forth in this Agreement. Subject only to the satisfaction of the Conditions Precedent, both Fairhill and Columbia shall be irrevocably committed to co-finance the production and distribution of the Picture and to perform all of their other respective obligations hereunder

.

3.2. Ownership

3.1

. Subject to Columbia's timely payment of the Purchase Price, Fairhill hereby grants to Columbia an undivided one-half interest in and to all copyrights and trademarks relating to the Picture. Fairhill and Columbia shall be deemed the joint author of the Picture and shall each own an undivided one-half interest in the Picture, and, to the extent necessary to exploit the Picture, all elements thereof including, without limitation, all copyrights and trademarks therein, and all renewals and extensions of copyright, all screenplays, music and all other elements of the Picture throughout the universe in perpetuity. Such rights in the Picture may only be exploited in accordance with the terms of this Agreement, and neither party shall have the unilateral right to sell, lease, transfer, assign or otherwise hypothecate such rights except as provided herein. Upon payment of the Purchase Price, the parties shall execute and deliver Short Form Assignments of Copyright, for purposes of filing in the Office of the U.S. Register of Copyrights in Washington, D.C., which shall have the effect of vesting in each party a one-half undivided interest in the copyright of the Picture and which shall be deemed to be effective as of the date of this Agreement.

Distribution Termritories and Term

3.1.1

. Columbia shall distribute the Picture in the Columbia Territory and Fairhill shall distribute the Picture in the Fairhill Territory. The Distribution Term of each party's Columbia’s Ddistribution Rrights under this Agreement (“Distribution Term”) shall commence on the date hereof and continue in perpetuity, but in no event for a period less than the full term of the copyright of the Picture, including any and all extensions and renewalsuntil the date which is twenty (20) years from the date of Columbia’s initial commercial release of the Picture in the Columbia Territory, as may be extended pursuant to Section 3.1.1 below.

Term Extension. If “Distributable Receipts” (as defined below), after recoupment of any “Defined Gross Proceeds Participation” (as defined below) theretofore paid, are not reached on or before the date on which the Distribution Term would otherwise expire, then the Distribution Term shall be automatically extended for an additional five (5) years.

Formatted: Indent: First line: 1", Don't adjustspace between Latin and Asian text

Formatted: Font: Not Bold



3.1.2 Sublicenses

3.2 Territoriesy.

. Notwithstanding the foregoing, Columbia shall be entitled to enter into sublicense agreements with third parties (collectively, “Sublicense Agreements”) during the Distribution Term, provided that (i) the terms of which Sublicense Agreements may not continue beyond the expiration of the Distribution Term, and (ii) Columbia can enter into sublicense agreements only in those territories and/or media (e.g. non-theatrical, video clubs, internet, etc.) for which Columbia customarily sublicenses at the time with respect to motion pictures produced by Columbia and its affiliates. Columbia will have the right to continue to collect all sums payable under any such Sublicense Agreements for the entire license term thereof (which shall not exceed the Distribution Term), and the obligation to service and continue to account to Producer in accordance with the provisions of this Agreement with respect to all sums received by Columbia.

3.2.1 Columbia Territory. The “Columbia Territory” shall mean the (i)

United States and its territories and possessions, including, without limitation, Baker Island, Caroline Islands, Guam, Marshall Islands, Northern Marianas, Puerto Rico, American Samoa, US Virgin Islands (St. John, St. Thomas, and St. Croix) and Wake Island, St. Kitts, Tortola, (ii) Bermuda, (iii) the Bahamas (non-exclusive with respect to television rights), and (iv) English language rights in St. Maarten; and (v) Canada..

3.2.2 The Columbia Territory shall include (i) airlines flying the flag of

the United States, (ii) oil rigs, maritime facilities and/or industrial installations, Red Cross and national and governmental installations, diplomatic posts and military camps, bases and reservations of the countries, territories and geographical areas included in the Domestic Territory, wherever any of the aforementioned facilities, installations, and/or transportation devices are located, and (iii) ships flying the flag or registered in the geographical areas included within the Domestic Territory as well as all ships serviced from or whose principal offices are in the Domestic Territory, regardless of the country of the “flag flown” or registry. For the avoidance of doubt, Aramco sites shall be included in the Columbia Territory.

3.2.3 LicensorFairhill Territory. The “LicensorFairhill Territory” shall

mean the universe excluding the Columbia Territory.

3.3 Grant of Distribution Rights. Licensor Each party in its respective distribution territory shall have, hereby grants, sells and assigns to Columbia, its successors, licensees and assigns, throughout the Columbia Territory and for the full Distribution Term, the sole, exclusive and irrevocable right, license and privilege, under copyright and otherwise, to (and to license others to) exhibit, distribute, market, display, project, perform, advertise, publicize, exploit, sell copies of, fix, encode, transcode, create, reproduce, release, transmit, broadcast, dispose of and/or otherwise manufacture or produce prints, home video devices, digital files (including related metadata) and other physical materials embodying the Picture and all elements thereof in connection with the distribution of the Picture and exploitation of all other rights relating to the Picturegranted to Columbia hereunder, including, without limitation, the screenplay for the Picture, and trailers, clips and excerpts from the Picture for advertising and



promotional purposes, in any and all languages and versions, on any and all sizes, gauges, widths of film or tape or other materials, for any and all uses and purposes and by any and every means, method, process or device and in any and all markets and/or media whether now known and used now known and hereafter used, or hereafter known or devised and used, including, without limitation, all of the following: (i) theatrical; non-theatrical (including airlines, ships and other carriers, oil rigs, 16mm, military, educational, industrial and institutional facilities and the like); pay-per-view; home video (including video-cassettes, digital videodiscs, laserdiscs, CD-ROMs, high definition discs, Blu-ray, Flash memory, SD card, UMD, SIM cards, and all other formats), video-on-demand; near video-on-demand and subscription-on-demand and all other linear formats (provided that the foregoing shall not limit Columbia’sthe right to utilize formats such as DVDs, which include chapter stops and/or allow end-users to make non-linear choices in addition to incorporating a version of the Picture which may be exhibited in linear fashion); all forms of television (including pay, free, network, syndication, cable, satellite, high definition and digital); all forms of digital, electronic, wireless, WiFi or on-line exploitation, distribution and/or transmission (including, without limitation, the internet, download-to-own, electronic sell-through, streaming, Ultraviolet), interactive cable, satellite, CD-ROMs, fiber optic or other exhibition, broadcast and/or delivery systems and/or computerized or computer-assisted media; all rights of communication to the public, rights of distribution to the public, rights of making available or other forms of public or private communication and/or distribution; and all forms of dissemination, communication or distribution to one or more locations or parties, whether embodied or transmitted utilizing analog, digital or other formats or methods; and the right to use and perform all sound and music synchronized therewith, (ii) all commercial tie-in and co-promotion rights in and to the Picture (it being understood that the parties Columbia shall consult with Licensoreach other with respect to any proposed commercial tie-ins and/or co-promotions in connection with the Picture, with each party's Columbia’s decision being final in its respective distribution territory), and (iii) the right to make or publish excerpts, synopses or summaries based on the Picture for purposes of advertising, publicizing or exploiting the foregoing rights in and to the Picture and (iv) all Ancillary Rights with respect to the Picture (collectively, “Distribution Rights”). Licensor also assigns to Columbia, for theEach party shall have for its respective distribution Columbia Tterritory throughout and the Distribution Term, all of Licensor’s rights, if any, to authorize, prohibit and/or control the renting, lending, fixation, reproduction, importation and/or other exploitation of the Picture by any media and/or means now or hereafter known or devised as may be conferred upon Licensor the copyright proprietor under applicable laws, regulations or directives, including, without limitation, any so-called “Rental and Lending Rights” pursuant to any treaty directives and/or enabling or implementing legislation, or any law or regulation enacted by any jurisdiction comprising the Columbia Territory. Except for the “Reserved Rights” (as defined below), Licensor covenants and agrees that it shall not license or otherwise dispose of any right, title and interest in or relating to the Picture in the Columbia Territory prior to Delivery. Without in any way limiting the generality of the foregoing, the Distribution Rights shall include, and Columbia and Fairhill shall each have in its respective distribution territory, the following exclusive rights throughout the Columbia Territory for the Distribution Term:



3.3.1 Title

3.3.2

. To release the Picture in any and all parts of the Columbia Territory under the title as determined pursuant to Section 2.3.7 (or a translation into a local language other than English, it being understood that the partiesColumbia shall consult with Licensor with respect to any translation of the title, with each party's Columbia’s decision being final in its respective distribution territory).

Cutting and Editing

3.3.3

. To cut and edit the Picture to the extent set forth in Section 5 below.

Distribution Controls

3.3.4

. To release and distribute (and/or refrain from releasing and distributing) the Picture in such manner and media and through such releasing or distribution entity or entities (and/or to engage such subdistributors or licensees or assign rights to such assignees as set forth in subparagraph 6.5 below) as the applicable distributorColumbia may determine in its sole discretion.

Television Exhibition

3.3.5

. Subject to any contractual restrictions in favor of the director of the Picture, to cause or permit the interpolation of advertising material at intervals during the television, cable or similar exhibition of the Picture and otherwise to conform to the needs, practices and customs of any such exhibition.

Video Devices

3.3.6

. To cause or permit the inclusion on “Video Devices” (as defined in Exhibit “A”) of advertising materials, trailers or similar materials not relating to the Picture prior to or following the Picture on such Video Devices or accessible through a menu. To cause or permit the inclusion on Video Devices of commentaries, deleted scenes, trailers and other advertising materials, featurettes and other promotional material and/or other “bonus” or “value added” materials relating to the Picture as selected by Columbia, subject to any applicable guild restrictions and contractual restrictions to which LicensorFairhill is subject, it being understood that LicensorFairhill has no obligation to shoot any behind-the-scenes footage, but shall provide Columbia with any approved footage which LicensorFairhill has shot.

Presentation and Releasing Credits

3.3.7

. In accordance with Section 11 below, to announce and include on the positive prints of the Picture and trailers thereof and in all advertising and publicity relating thereto, in such manner, position, form and substance as Columbia may elect (i) the applicable distributor's Columbia’s logo, trademark and presentation announcement and those of itsColumbia’s licensees and affiliates (as more particularly set forth in Section 11 below); (ii) a releasing credit the designationng of Columbia as the distributor of the Picture in the Columbia Tapplicable territory; and (iii) any and all of the credits and matters specified in Section 11.

Copies of Picture. To manufacture or cause to be manufactured such positive prints, pre-print and other materials and to cause the performance of such laboratory work with respect to the Picture as the applicable distributorColumbia may require and to cause trailers of the Picture to be produced, manufactured, exhibited and distributed by



every means, method or device now or hereafter known. The applicable distributor Columbia shall be the owner of all such materials.

3.3.8 Advertising

3.3.9

. To manufacture and distribute or cause to be manufactured and distributed advertising and advertising accessories of all types and kinds, which shall be the property solely of the applicable distributorColumbia, and to advertise, publicize and exploit the Picture by such means, methods and devices and in such media, and to such extent as the applicable distributorColumbia in its sole discretion may deem desirable.

Publicity and Promotion

3.3.10

. To issue and authorize publicity and to use, produce, transmit, broadcast, exploit, publicize, exhibit and control in connection with the production, distribution, exhibition, advertising and exploitation of the Picture and/or in connection with general corporate or institutional uses by Columbiathe applicable distributor and/or its parents, affiliates or subsidiaries (e.g., trade shows, Columbia promotions, financial prospectuses and/or annual reports), the names, photographs, likenesses, voices and other sound effects, as well as recordings, transcriptions, films, clips and other reproductions thereof, of the director, all members of the cast, and all other persons rendering services in connection with the Picture, including all so-called commercial tie-ins and co-promotion rights (subject to any restrictions on the use of commercial tie-ins or other endorsements which are contained in any contracts with creative talent of which Licensor informs Columbia in advance in writing, provided that there shall be no restrictions on the use of any name or likeness in the key art or the use of any name in the billing block on an item of commercial tie-in).

Promotional Films

3.3.11

. To create (at Columbia’s cost) so-called “making of” or other promotional films. LicensorFairhill shall afford Columbia and its designees engaged by Columbia reasonable access upon prior reasonable advance notice to LicensorFairhill’s shooting locations and employees for the purposes of photographing so-called “behind-the-scenes” footage suitable for use in such “making of” or other promotional films (subject to any contractual restrictions to which LicensorFairhill is subject and of which Fairhill timely informs Columbia). In addition and without limiting LicensorFairhill’s delivery obligations, LicensorFairhill shall give Columbia free access to promotional films and behind the scenes footage and other promotional materials created by LicensorFairhill or to which LicensorFairhill has access (for which LicensorFairhill shall be responsible for all third party clearances), and Columbia shall give LicensorFairhill free access to promotional films and behind the scenes footage and other advertising, marketing, and promotional materials created by Columbia or to which Columbia has access (for which Columbia shall be responsible for all third party clearances).

Ancillary Rights. Notwithstanding any contrary provision hereof, Fairhill shall administer all Ancillary Rights with respect to the Picture on a worldwide basis in accordance with Sections ____ and ____ below. "Ancillary Rights" means all of the following: (i) the sole and exclusive right, on a worldwide basis, to record, produce, and exploit one or more soundtrack albums in connection with the Picture (“Soundtrack Rights”); (ii) the sole and exclusive right, on a sole and exclusive basis, to use, perform, exploit and publish all music and lyrics created for or in connection with or used in the Picture (“Music Publishing Rights”); (iii)

Formatted: Don't adjust space between Latinand Asian text, Tab stops: 1.39", Left




the sole and exclusive merchandising rights, on a worldwide basis, including, without limitation, the right to make, use, sell, exercise or otherwise exploit and license or authorize others to make, use, sell, exercise or otherwise exploit tangible personal property of any and all kinds based upon, utilizing or embodying the Picture or any of the characters (including, without limitation, names, likeness or other characteristics of the actors portraying such characters, story or other elements thereof or any title, credit, catchword, slogan, situation, design, equipment or events depicted herein, or any trademark, trade name or copyright related thereto other than Columbia marks), interactive game including without limitation video games (e.g., PC, platform, mobile, handheld, on-line, and future methods), interactive (i.e., any audio-visual or other work regardless of the physical medium in which the work is fixed, now known or hereafter discovered, invented, developed, devised or created which work is designed with a primary purpose of permitting the viewer to substantially interact in a non-linear manner), and book publishing rights (e.g., novelization and screenplay publication rights) (“Merchandising Rights”), but not any commercial tie-in or co-promotion rights to the Picture (which rights are granted to Columbia but not included within the Domestic Ancillary Rights), (iv) the right to license film clips from the Picture, and (v) all theme park rights[Intentionally Deleted. ].

3.3.12 Physical Properties

3.3.13

. To use for any purpose, or dispose of, any and all physical properties (e.g. film materials) prepared or acquired by LicensorFairhill in connection with the Picture.

Legal Proceedings

3.3.14 Performance Payments. To collect so-called producer performance payments with respect to the following secondary uses of the Film: retransmission rights, private copy or blank tape rights, rental or lending rights, rights related to the public performance of television broadcasts, performance royalties related to the sale of videocassettes and DVD’s (to the extent such rights are collectively administered) and theatrical box office levies and the like.

. To take, in its own name and at its sole expense (subject to LicensorFairhill’s indemnification obligations below), such steps as Columbia may reasonably deem necessary or appropriate by action at law, or otherwise, to prevent unauthorized reproduction, exhibition or distribution of the Picture, or any infringement of the copyright of the Picture, or to prevent any impairment of, encumbrance on, or infringement upon the rights of LicensorFairhill or Columbia under this Agreement. Solely for such purposes, LicensorFairhill hereby irrevocably appoints Columbia its attorney in fact to execute, acknowledge, deliver and/or record any document necessary or advisable to effect the foregoing in the name, place and stead of LicensorFairhill if LicensorFairhill fails to execute, acknowledge, deliver and/or record such document reasonably consistent herewith within ten (10) business days after LicensorFairhill’s receipt of Columbia’s written request therefor. Columbia shall promptly provide LicensorFairhill with copies of any such instruments executed in LicensorFairhill’s name; provided, that Columbia’s inadvertent failure to do so shall not be deemed to be a breach of this Agreement.

3.4 Licensor Reservation of Derivative ProductionReserved Rights. Fairhill hereby reserves the Licensor hereby reserves the following rights in and to the Picture: (i) the



sole and exclusive right, on a worldwide basis, to record, produce, and exploit one or more soundtrack albums in connection with the Picture (“Soundtrack Rights”); (ii) the sole and exclusive right, on a sole and exclusive basis, to use, perform, exploit and publish all music and lyrics created for or in connection with or used in the Picture (“Music Publishing Rights”); (iii) the sole and exclusive merchandising rights, on a worldwide basis, including, without limitation, the right to make, use, sell, exercise or otherwise exploit and license or authorize others to make, use, sell, exercise or otherwise exploit tangible personal property of any and all kinds based upon, utilizing or embodying the Picture or any of the characters (including, without limitation, names, likeness or other characteristics of the actors portraying such characters, story or other elements thereof or any title, credit, catchword, slogan, situation, design, equipment or events depicted herein, or any trademark, trade name or copyright related thereto other than Columbia marks), interactive game (e.g., PC, platform, mobile, handheld, on-line, and future methods), interactive (i.e., any audio-visual or other work regardless of the physical medium in which the work is fixed, now known or hereafter discovered, invented, developed, devised or created which work is designed with a primary purpose of permitting the viewer to substantially interact in a non-linear manner), and book publishing rights (e.g., novelization and screenplay publication rights) (“Merchandising Rights”), but not any commercial tie-in or co-promotion rights to the Picture (which rights are granted to Columbia), (iv) the right to license film clips from the Picture, (v) all theme park and live stage rights in and to the Picture, (vi) all derivative production rights with respect to the Picture, including without limitation the right to produce and exploit subsequent productions and live stage productions based onto the Picture (subject to Columbia’s rights pursuant to Section 15 below).,

(vii) subject to Licensor’s grant of the Distribution Rights to Columbia hereunder, all trademarks and copyrights in and to the Picture and the underlying materials (as opposed to the Distribution Rights in the Columbia Territory, which are controlled by Columbia during the Distribution Term), and (viii) the Distribution Rights in the Licensor Territory (collectively, the “Reserved Rights”).

3.5 LicensorFairhill Holdbacks. LicensorFairhill may not itself exploit the Picture or license or otherwise authorize the Picture to be exploited:

3.5.1 By any means or medium in any part of the LicensorFairhill Territory from the date hereof until the earlier of: (i) the date of the initial theatrical release of the Picture in the Columbia Territory, or (ii) six (6) months after completion of “Delivery” (as defined below) of the Picture; provided, however, that if Delivery of the Picture is not completed before the “Delivery Date” (as defined below), the period in this subparagraph (ii) shall be increased to nine (9) months after completion of Delivery of the Picture.

3.5.2 By means of Video Devices or other exploitation of Home Video Rights (as defined in Exhibit “A”) in any part of the LicensorFairhill Territory from the date hereof until the date (“Home Video Availability Date”) which is the earlier of: (i) the date of Columbia’s initial exhibition of the Picture by means of Video Devices or other exploitation of Home Video Rights (but not including any so-called “Premium VOD” or “Premium Home Theater” release) in the Columbia Territory, (ii) four (4) months after the initial theatrical release

Formatted: Font color: Auto



by Columbia, or (iii) twelve (12) months after completion of Delivery; provided, however, that if Delivery of the Picture is not completed before the “Delivery Date” (as defined below), and Columbia does not agree to extend the Delivery Date, the period in this subparagraph (iii) shall be increased to fifteen (15) months after completion of Delivery of the Picture.

3.5.3 By means of any form of television, as follows:

3.5.3.1 With respect to Canada, (a)

3.5.3.2 Mexican Holdback/Restrictions: In order to avoid impairing Columbia’s ability to license the Picture for exhibition in the Domestic Territory, Fairhill hereby agrees as follows:

the pay television release of the Picture in Canada may occur on the earlier of the following: (i) the date the Picture is first released by way of pay television in the United States; and (ii) 10 months from the theatrical release of the Picture in the U.S.; and (b) the free television release of the Picture in Canada may occur on the earlier of the following: (i) the date that the Picture is first released by way of free television in the United States; and (ii) 30 months from the theatrical release of the Picture in the U.S. (it being further agreed that if the distributor of the Picture in Canada has obtained shorter windows in agreements for pictures released by a U.S. major studio, then Columbia shall give good faith consideration to agreeing to such shorter windows with regard to the Picture, it being understood that it shall have no obligation to do so);

(i) Definitions.

(A) The “Availability Date” for the Picture shall be a date determined by Columbia in its sole discretion; provided, however, that, unless Columbia in its sole discretion notifies Fairhill not later than 60 days after the initial theatrical release of the Picture of a later Availability Date by reason of the Picture falling within an applicable contractual exception or exclusion under Columbia's then-applicable U.S. pay television and/or subscription video-on-demand output agreement, such date shall be no later than the earliest to occur of:

(w) 13 months after such Picture’s initial theatrical release in the United States, but specifically excluding film festivals, test and marketing previews, so-called “sneak previews, free and/or charitable screenings, private, limited screenings, and releases made on no more screens and for no longer than required to comply with Academy Award qualification rules (collectively, “Special Releases”);

(x) 10 months after such Picture’s general theatrical release (i.e., the first day on which the Picture has been released cumulatively on 100 or more screens other than for Special Releases) in the United States;

(y) 3 ½ months after such Picture’s initial pay-per-view or video-on-demand release intended primarily for viewing in a private residence (as opposed to a hotel or motel room or non-theatrical venue) in the United States, but specifically excluding any premium home theater exhibitions; and

Formatted: DWTNorm, Space After: 0 pt, Tabstops: 0", Left + 2.5", Left

Formatted: Indent: First line: 0.05", Tabstops: 2.5", Left

Formatted: Indent: Left: 0", First line: 1.5",Tab stops: 2.99", Left


Formatted: Tab stops: 3.47", Left



(z) 4 ½ months after such Picture’s initial home video release (including electronic sell-through) in the United States.

(B) The “Holdback Period” for the Picture shall be the period commencing on the Availability Date and, ending 16 months thereafter if the initial theatrical release of the Picture occurs in 2013, or 18 months thereafter if the initial theatrical release of the Picture occurs in 2014 or later, unless Columbia in its sole discretion notifies Fairhill not later than ___ days after the initial theatrical release of the Picture of a longer Holdback Period by reason of the Picture falling within an applicable contractual exception or exclusion under Columbia's then-applicable U.S. pay television and/or subscription video-on-demand output agreement.

(ii) Holdbacks/Restrictions. Fairhill agrees that it will not itself engage in, nor authorize or license others to engage in:

(A) Prior to the Availability Date, the exhibition (or the promotion or advertisement of any such exhibition) of any version of the Picture in any language by any means of Pay Television Exhibition in Mexico; or

(B) Prior to the expiration of the Holdback Period, the exhibition (or the promotion or advertisement of any such exhibition) of any version of the Picture in any language by any means of television in Mexico if the signal from such exploitation of free television in Mexico can be received in any portion of the Domestic Territory or if the channel or service exploiting such free television rights in Mexico is retransmitted on any cable system or other television system in any portion of the Domestic Territory; or

(C)The exhibition of the Picture in Tijuana by any form of television at any time.

(D) Any other advertising, promotion or exploitation of the Picture in Mexico that is prohibited under Columbia's then-applicable U.S. pay television and/or subscription video-on-demand output agreement.

With respect to Mexico, the Parties will in good faith negotiate customary provisions regarding holdbacks, windows, and other protections in connection with the exhibition or promotion of the Picture by means of free, over-the-air television which originates from Mexico and is intelligibly receivable in the United States, or any cable retransmission within the United States of any broadcast from Mexico, in order to prevent infringement or breach of Columbia’s agreement with Starz/Encore (or then-current agreement);

3.5.3.3 With respect to the rest of the LicensorFairhill Territory, the television release of the Picture may occur four and one-half months (4.5) months after the Home Video Availability Date.




Formatted: No underline




3.5.4 LicensorFairhill shall not, and shall not authorize any party to, exhibit, broadcast, transmit, promote, or advertise (by any means or media) the exhibition of the Picture in, or broadcast or transmit any version of such Picture into, the Columbia Territory. Columbia shall not, and shall not consent to or authorize any party to, exhibit, broadcast, transmit, promote, or advertise (by any means or media) the exhibition of a Picture outside of, or broadcast or transmit any version of the Picture into territories other than, the Columbia Territory. Limited overspill of television signals and Internet or world-wide-web advertising and promotion as permitted in Sections 3.3.8 and 3.3.9 shall not be deemed a violation of this paragraph by either party.

3.5.5 Broadcast Originating Outside the Columbia Territory: LicensorFairhill shall not exhibit or promote, or authorize the exhibition or promotion of, the Picture by means of any form of television in or which originates in the Columbia Territory irrespective of the means of broadcast or delivery and irrespective of whether such exhibition or promotion is encrypted or unencrypted. In addition, LicensorFairhill shall use reasonable commercial efforts, consistent with its prudent business judgment, to thereafter prevent any exhibition of the Picture into the Columbia Territory in a manner that is capable of being intelligibly received in the Columbia Territory and that originates from outside the Columbia Territory. Notwithstanding the foregoing, except as otherwise provided under subparagraph e below, de minimis exhibition of the Picture into the Columbia Territory that originates from outside the Columbia Territory shall not, in and of itself, constitute a breach of this Section 3.5.5.

3.5.6 Broadcast Originating Outside the LicensorFairhill Territory: Columbia shall not exhibit or promote, or authorize the exhibition or promotion of, the Picture by means of any form of television into the LicensorFairhill Territory at any time in a manner that is capable of being intelligibly received in the LicensorFairhill Territory, irrespective of the means of broadcast or delivery and irrespective of whether such exhibition or promotion is encrypted or unencrypted. In addition, Columbia shall use reasonable commercial efforts, consistent with its prudent business judgment, to thereafter prevent any exhibition of the Picture into the LicensorFairhill Territory in a manner that is capable of being intelligibly received in the LicensorFairhill Territory and that originates from outside the LicensorFairhill Territory. Notwithstanding the foregoing, except as otherwise provided under subparagraph e below, de minimis exhibition of the Picture into the LicensorFairhill Territory that originates from outside the LicensorFairhill Territory shall not, in and of itself, constitute a breach of this Section 3.5.6.

3.6 Internet Distribution. Neither Columbia nor LicensorFairhill shall itself,

or authorize another party to, distribute, display, project, transmit, reproduce, broadcast, perform or otherwise make available to viewing the Picture in whole or in part, by means of the Internet except by means of technology which utilizes: (1) at least one form of no less than industry standard geofiltering techniques or technologies and/or other commercially reasonable methods capable of restricting the reception of the Picture only by consumers in each party’s Territory, including but not limited to, confirming: (a) that the consumer’s IP address is within the licensed Territory, or (b) that the consumer’s credit card billing address is located within the licensed Territory (collectively “Geofiltering Technology”); and (2) industry standard copy protection



and digital rights management systems and security technologies that prevent the unauthorized copying, viewing, duplication, projection, display, electronic forwarding, distribution and/or other transmission of the Picture (collectively “Copy Protection Technology”). Further, neither (a) the ability of a limited number of technologically advanced individuals (i.e., "hackers") to circumvent the Geofiltering Technology and/or Copy Protection Technology shall be deemed to limit either party's right to transmit the Picture by means of the Internet, nor (b) incidental and intentional overspill resulting from unanticipated and inadvertent failure of the Geofiltering Technology and/or Copy Protection Technology by either party or its licensees shall be deemed a breach hereof; provided that

in each case Columbia and LicensorFairhill shall, and shall cause any licensee to, use prompt and commercially reasonable efforts as soon as the overspill or circumvention is discovered to address any breach of any Copy Protection Technology and Geofiltering Technology that results or is likely to result in harm to Columbia or LicensorFairhill or their licensees, and shall withdraw the Picture from any such compromised system and otherwise cease or prevent such circumvention from resulting in further access by or exhibition to unauthorized viewers in order to mitigate any such harm. Notwithstanding the foregoing, there shall be no limitation on a party's right to engage in or authorize third parties to engage in customary and reasonable advertising and promotion of the Picture within its respective Territory by means of the Internet (it being acknowledged, however, that Columbia’s and LicensorFairhill’s and/or their respective licensee’s website(s) may be accessible by customers outside of their Territory. For the avoidance of doubt, nothing herein limits Columbia or LicensorFairhill or their licensees from distributing the Picture via DSL, fiber optic cable or other similar Internet Protocol within a “closed system.”

4. PRODUCTION OF THE PICTURE

4.1

.

General2

. The Picture shall be produced in accordance with Columbia’s rights of approval and consultation and the Picture Specifications, all as set forth in Section above. As between Columbia and LicensorFairhill, LicensorFairhill shall have all legal, creative, business and financial control over the production of the Picture, except as otherwise expressly set forth herein and LicensorFairhill shall be responsible for all costs of completing and delivering the Picture hereunder.

4.2 Production Information

LicensorFairhill shall provide Columbia with copies of all daily production reports (including without limitation, script supervisor’s reports and production summaries) and any other materials provided to the completion guarantor and/or any other financier of the Picture. All such reports and dailies shall be sent via fax or overnight courier, as applicable, to the applicable person designated by Columbia.

. Without limiting the generality of Sections 2.1, 2.2, and 2.3 above, LicensorFairhill shall keep Columbia informed generally with regard to material creative, business and financial matters relating to the Picture including casting and start dates for principal photography of the Picture.

4.3 Dailies. Columbia shall also have the right to view all dailies viewed by LicensorFairhill immediately following LicensorFairhill’s viewing of same, and all assemblages



and cuts of the Picture concurrently with LicensorFairhill’s viewing of the same. LicensorFairhill shall notify Columbia when each assemblage and applicable cut of the Picture (e.g., the director’s first cut and any and all subsequent cuts) are completed, each of which shall be shown to Columbia in a timely manner consistent with the applicable dates, if any, provided for in the Approved Schedules.

4.4 Overages/Enhancements

4.4.1.

:

Enhancements

4.4.2

. Enhancements to the budget of the Picture (as the term "enhancements" is generally understood in co-financing agreements between major studios in Los Angeles, including added scenes, new special effects not originally contemplated, cast breakage, etc.) shall require mutual approval of Columbia and Fairhill.

Other Production Overages

5. CUTTING.

. With respect to all production overages other than enhancements, Fairhill shall consult with Columbia prior to approving any such production overages, with Fairhill's decisions with respect thereto being final. If at any time prior to the payment of the Purchase Price Fairhill estimates that the final Direct Cost of the Picture will exceed the Gross Production Budget (such excess being "Excess Overbudget Costs"), Fairhill will give Columbia written notice of the nature and amount of such Excess Overbudget Costs. Within 10 business days after receipt of such notice, Columbia will notify Fairhill whether Columbia elects to fund 50% of such Excess Overbudget Costs, with Columbia's failure to respond being deemed an election not to fund such Excess Overbudget Costs.

5.1 Approved Final Cut. Columbia and Fairhill shall have joint cutting authority with respect to the Picture. , Columbia shall have final cutting authority with respect to the Picture in the Columbia Territory. Columbia shall advance any costs in connection with such cutting and editing, and Columbia shall have the right to recoup such costs as “Distribution Expenses” pursuant to Section 7.2.2 below. Provided that Fairhill has fully consulted with Columbia regarding the cutting of the Picture and that the cut of the Picture delivered to Columbia under Section 9 hereof (i) conforms to the Picture Specifications and (ii) has been mutually approved by Columbia and Fairhill or, if the parties do not agree, said cut has been determined in accordance with Section __ hereof, (a cut satisfying all of the foregoing requirements being the "Approved Final Cut"), said cut of the Picture shall be deemed the "final cut" of the Picture for (A) theatrical distribution, (B) exhibition by means of premium pay television in the United States and in the top ten foreign territories, and (C) initial release in the home video market in the United States and in the top ten foreign territories; provided that Columbia shall have the right to distribute a Family Version of the Picture and a so-called "descriptive video" version of the Picture for the blind and vision-impaired in addition to (but not in lieu of) the Approved Final Cut and, in addition, Columbia and Fairhill may alter the Approved Final Cut as provided in Section 5.3 below.

5.2 Procedures. During the post-production of the Picture (and prior to the


Formatted: Font: Times New Roman, 12 pt,Not Bold, No underline





















delivery of the Picture to Columbia), Columbia's respresentatives will be invited to attend all screenings of each cut of the Picture that is attended by Fairhill's representatives. Columbia and Fairhill will then use good faith efforts to agree on creative/cutting notes to be given to production personnel. If the parties are unable to agree on an Approved Final Cut, Fairhill and Columbia may each prepare separate notes and Fairhill shall cause the production personnel to prepare separate cuts of the Picture implementing the separates notes of Fairhill and Columbia. If after viewing both such cuts, Fairhill and Columbia still cannot agree, Fairhill and Columbia shall cause both of such cuts to be screened before recruited audiences reflecting the target demographics for the Picture and the cut that achieves the higher score from the recruited audience (provided that such cut conforms to the Picture Specifications) shall be deemed to be the Approved Final Cut. The cost of all cuts up to and including the preparation of the Approved Final Cut shall be included within the "cost of production" of the Picture.

5.3 Editing of Approved Final Cut. Notwithstanding any contrary provision hereof, Columbia and Fairhill may (and/or may authorize others to): (i) alter the Approved Final Cut (by cutting and editing, adding disclaimers or otherwise) if, in the opinion of Columbia's or Fairhill's legal counsel, it is necessary to do so to avoid potential legal liability, (ii) edit or modify the Approved Final Cut in order to secure permission to import and/or exploit the Picture in any territory or to meet the requirements of censorship, registration or similar governmental or quasi-governmental requirements or community standards in any territory (which community standards may include any applicable national, local or regional political, religious or social sensibilities), (iii) conform the Approved Final Cut to the Picture Specifications or to the running time requirements or exhibition standards and practices (including the inclusion of commercial breaks) of airlines, television stations, broadcasters or programmers, (iv) create dubbed, subtitled and/or other foreign language versions, (v) alter the Approved Final Cut to create a Family Version of the Picture which does not contain any swear words or nudity, and, in addition, does not contain any violence or sexual content which is inconsistent with a "PG" rating; (vi) pan and scan the Picture for exhibition by any and all means and media other than theatrical exhibition, (vii) add to the Picture any credits or logos which Columbia or Fairhill and/or their respective affiliates or licensees are entitled to be accorded under the terms of this Agreement; and/or (viii) add watermarking or other security methods, devices, techniques or technologies to be utilized in connection with the Picture. Notwithstanding any contrary provision hereof, Columbia and Fairhill shall have the right to designate the final cut of the Picture for all territories and/or media other than those specified in Section 5.1 hereof. Columbia or Fairhill, as applicable, shall advance any costs in connection with any cutting and editing under this Section 5.3, and shall have the right to recoup such costs as “Distribution Expenses.”

6. DISTRIBUTION OF THE PICTURE

6.1

.

Advertising and Publicity. Columbia and Fairhill shall each, at all times after the date hereof during the Distribution Term, and throughout the Columbia Territory have the sole and exclusive right to advertise, promote and publicize the production, delivery and exploitation of the Picture and all elements thereof (except for the Reserved Rights) and/or their




Formatted: Tab stops: 0.97", Left + 1.46",Left


Formatted: Font: Times New Roman, 12 pt

Formatted: Font: Times New Roman, 12 pt,No underline













Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...

Formatted ...



respective Columbia’s Distribution Rights throughout their respective distribution territories hereunder by any and all means and media now or hereafter known. Neither Columbia nor LicensorFairhill shall not issue or authorize the issuance of any advertising or publicity relating to the Picture or this Agreement within (or intended to be disseminated in) the other party's distribution Columbia Tterritory relating to the Picture or this Agreement without the other party'sColumbia’s prior written consent; provided, however, (i)in publicity relating generally to LicensorFairhill or Columbia and its activities, LicensorFairhill or Columbia, as applicable, may make incidental, non-derogatory reference to the Picture, and (ii) each party may engage in customary advertising and promotion on the internet, as provided in Section 3.6. Columbia may assign to the Picture, at Columbia’s expense, such publicity persons and photographers as it may deem advisable and recoup the cost thereof as a Distribution Expense. Licensor shall have the right to consult in good faith with Columbia with respect to the initial United States theatrical and home video advertising campaign and initial United States theatrical and home video release pattern; provided, however, that in the event of disagreement Columbia’s decision shall be final. Without limiting the generality of the foregoing, Licensor shall have the right of mutual approval with respect to material marketing and distribution issues, including the initial theatrical release date in the Columbia Territory, as well as material award campaign issues, provided that in the event of disagreement Columbia’s decision shall be final.

6.2 Release Commitment; Theatrical and Home Entertainment Print and AdvertisisingP&A Costs

6.2.1

.

Advancing of Theatrical Distribution Expenses

6.2.3

. Columbia shall advance all theatrical Distribution Expenses “P&A Ccosts” (as defined below) in connection with the advertising, publicity and promotion of the Picture during the Distribution Term and throughout in the Columbia Territory and recoup such costs as Distribution Expenses under Section __ hereof. Fairhill or its licensees shall advance all theatrical Distribution Expense in connection with the Picture during the Distribution Term in the Fairhill Territory; however such costs shall not be recoupable as Distribution Expenses under Section 7.2 hereof (although nothing contained herein shall prevent local subdistributors licensed by Fairhill from recouping such expenses from receipts in their respective distribution territories).

Approvals and Consultations. Provided that the Picture is delivered to Columbia by the Delivery Date and conforms to the Approvals and Picture Specifications set forth in Section 2 above, Columbia and Fairhill shall have mutual approval over the print and advertising budget for the initial theatrical release of the Picture in the Columbia Territory, with Columbia's decision being final if the parties do not agree.theatrically on at least 2000 screens in the Columbia Territory over the course of the initial release (i.e. Columbia may release the Picture on a so-called “rollout” basis, provided that at some point the Picture is being released simultaneously on at least 2000 screens), and shall incur minimum “P&A Costs” (as defined below) of Twenty-Five Million Dollars ($25,000,000) in connection with the initial theatrical release of the Picture in the Columbia Territory; provided, however, that such minimums (i.e., 2000 screens and $25,000,000 P&A) are subject to reduction in the event of force majeure, including without limitation theaters not accepting the film for exhibition despite Columbia’s good faith efforts to get them to do so. LicensorFairhill shall have the right to



approve, such approval not to be unreasonably withheld, any proposed P&A Costs in connection with the initial theatrical release of the Picture (not including any expenditures in connection with award or nomination campaigns for the Picture [“Award Costs”] ) in excess of Forty-Five Million Dollars ($45,000,000), and any Award Costs in excess of Six Million Dollars ($6,000,000). There shall be no cap on the amount of home video marketing expenses, provided that Columbia shall meaningfully consult with LicensorFairhill in good faith with respect to home video marketing expenses in the Columbia Territory, it being understood that Columbia’s decision is final. Columbia shall also meaningfully consult with LicensorFairhill in good faith with respect to the budget and cash flow schedule for print and advertising the P&A cCosts in the Columbia Territory, it being understood that Columbia’s decision is final. Columbia and LicensorFairhill shall have mutual approval with respect to material marketing and distribution decisions with respect to the Picture for the Columbia Territory, including the advertising campaign and key marketing materials (e.g., key art, one-sheet, trailers, and television spots) for the Picture and the nomination and award campaign for the Picture, provided that in the event of disagreement, Columbia’s decision shall be final and binding. . Fairhill shall have the right to consult in good faith with Columbia with respect to the initial United States home video advertising campaign and initial United States home video releasing plans; provided, however, that in the event of disagreement Columbia’s decision shall be final.

For the avoidance of doubt, Columbia shall have no obligations pursuant to this Agreement if the Picture is not timely delivered hereunder or does not contain the mutually-approved Approvable Elements or conform to the Picture Specifications. Except as specifically set forth above, Columbia’s decision with respect to the distribution of the Picture and the amount of P&A Costs incurred by Columbia shall be final (subject to Licensor’s approval rights as set forth above with respect to P&A Costs in excess of $45,000,000 or Award Costs in excess of $6,000,000). “P&A Costs” shall mean all direct costs incurred by Columbia in connection with the initial theatrical release of the Picture in the Columbia Territory, including without limitation, the cost of creating and implementing a marketing campaign for the Picture, costs of advertising the Picture in various media and of printing and distributing promotional materials, and costs of making, packaging, shipping, insuring, delivering and storing release prints and other film and sound materials. Columbia shall be entitled to recoup all P&A Costs as “Distribution Expenses” (as defined in Exhibit “A”). .

6.3 Release Date. Columbia and Fairhill will have mutual approval over the initial theatrical release date for the Picture in the Columbia Territory, with Columbia's decision being final if the parties do not agree; provided that if Delivery of the Picture is completed not later than September 30, 2013, then Columbia shall not without Fairhill's consent select an initial theatrical release date that is earlier than than September 1, 2013 or later than December 31, 2012.

6.4 Theatrical Distribution Expense Shortfall Payment. On or before the date which is five (5) months after the initial theatrical release of the Picture, Columbia will notify Fairhill of the amount Theatrical Distribution Expense Shortfall Amount. Within thirty (30) days after receipt of such notice, Fairhill shall pay to Columbia an amount equal to one-half (1/2) of the Theatrical Distribution Expense Shortfall Amount (the "Theatrical Distribution Expense


Formatted: DWTNorm, Indent: First line: 1",Tab stops: 1.5", Left

Formatted: Indent: First line: 1", Don't adjustspace between Latin and Asian text, Tab stops: 1.5", Left



Shortfall Payment") The "Theatrical Distribution Expense Shortfall Amount" means the amounts, if any, by which Columbia projects (based on its good faith business judgment) that (i) the aggregate of (A) all Distribution Expenses other than residuals which are incurred by Columbia in connection with the initial theatrical release of the Picture, (B) an amount equal to 50% of residuals costs incurred by Columbia (or which Columbia projects will be incurred) in connection with First Cycle Media, and (C) all Third Party Participations payable by Columbia (or which Columbia projects will be payable) in connection with First Cycle Media in connection with receipts from First Cycle Media, will exceed (ii) an amount equal to the total Defined Gross Receipts which Columbia projects will be Received by Columbia based solely on the projected financial results of the Picture from First Cycle Media less all Home Entertainment Distribution Expenses incurred by Columbia (or which Columbia projects will be incurred) in connection with First Cycle Media. "First Cycle Media" means the initial theatrical release of the Picture and Columbia's distribution of its first cycle home video rights and the applicable rate card payment to Columbia under Columbia's pay television output deal. Fairhill acknowledges that the projections to be made by Columbia under this Section 6.3 shall be based upon information available to and assumptions made by Columbia at the time such projections are prepared, that such projections may in fact turn out to be incorrect, and even if such projections are correctly computed, actual results may vary materially from the projected results described therein. Therefore, delivery of such projections to Fairhill shall not constitute or be deemed any representation or warranty, express or implied, by Columbia or its Affiliates, and Columbia shall not have any liability to Fairhill, its Affiliates, investors or lenders by reason of any error or inaccuracy in any such projections.

6.5 Previews

6.6

. The budget of the Picture shall be inclusive of at least two (2) “creative” recruited previews in the Columbia Territory (at a location to be mutually agreed by Columbia and LicensorFairhill), to which Columbia shall be invited and shall be provided with all information, including response cards. Columbia shall have the sole right (but not the obligation) at such times and places and for such purposes as it may desire, to conduct additional “marketing” previews and otherwise exhibit the Picture prior to its release to the general public and representatives from LicensorFairhill shall have the right to attend such screenings. Columbia shall conduct all such marketing previews and shall advance the cost of such previews and shall be entitled to recoup such costs as Distribution Expenses. LicensorFairhill shall have the right to consult with Columbia regarding the times and demographics of such previews, it being understood that Columbia’s decision shall be final.

Trailers

6.7

. LicensorFairhill shall not release, issue and/or otherwise exploit any advertising, trailers or promotional materials relating to the Picture in the Columbia Territory without Columbia’s prior written consent, and all trailers released, issued and/or otherwise exploited relating to the Picture in the Columbia Territory shall be prepared or caused to be prepared by Columbia and not by LicensorFairhill.

Assumption of Obligations: Each of Fairhill and Columbia hereby assumes and shall fully perform any and all third party obligations arising in connection with the distribution and exploitation of the Picture in its respective Territory, including, without limitation, creative rights, consultation/approval rights, dubbing and doubling rights and

Formatted: Indent: First line: 0.5", Don'tadjust space between Latin and Asian text, Tabstops: 0.97", Left



restrictions, credit obligations, name and likeness restrictions and/or other obligations contained in any talent or other agreements with respect to the Picture; and all residual, supplemental market and other obligations arising under any applicable guild or union collective bargaining agreement. Notwithstanding the foregoing, as Fairhill is the "lead studio," it is agreed that Columbia shall not be obligated to perform any third party obligations in its applicable distribution territory unless Fairhill has given prior written notice to Columbia thereof. Furthermore, Columbia shall have a right of reasonable prior approval with respect to third party obligations which would require Columbia to accord extraordinary creative or approval rights (by way of example only, the according of cutting rights to an individual other than the director), or to observe any restrictions on use of any third party's name or likeness which are not customary given the stature of the individual involved. Each of Fairhill and Columbia agree to notify each and all of their respective licensees or assignees of any third party obligations assumed by them hereunder.

6.8 Subdistribution

. Columbia shall not utilize unaffiliated subdistributors except in connection with those markets and/or media with respect to which Columbia uses subdistributors for the majority of its own motion pictures.

6.9 Ancillary Rights

6.9.1.

. Fairhill shall administer all Ancillary Rights with respect to the Picture on a worldwide basis subject to the following:

Columbia's Rights.

6.9.2. Procedures.

Columbia shall have a right of meaningful consultation regarding the exercise of the Ancillary Rights and the licensing of any Ancillary Rights to any third party. Columbia's designee (Sony Music) shall have a right of First Negotiation and First Refusal regarding each proposed license of Soundtrack Album Rights and/or Music Publishing Rights (individually and collectively, the "Negotiable Rights).

A First Negotiation. If at any time Fairhill intends to license, sell, transfer, assign, hypothecate or in any way convey or dispose of any of the Negotiable Rights or any portion thereof, Owner shall, before offering such Negotiable Right(s) to any other party, give Columbia written notice ("Notice") identifying the Negotiable Right(s) which Fairhill wishes to so convey ("Offered Right(s)") and the terms on which Fairhill wishes to negotiate in respect of such Offered Right(s). Columbia shall have the right, exercisable by written notice to Fairhill within ten (10) business days following Columbia's actual receipt of the Notice, to advise Fairhill as to whether Columbia wishes to negotiate regarding the Offered Right(s). If Columbia notifies Fairhill that it wishes to so negotiate, Fairhill and Columbia shall negotiate in good faith regarding such Offered Right(s). If Fairhill and Columbia reach agreement as to financial terms, including any term relating to the consideration to Fairhill which can be readily reducible to a determinable sum of money, upon which Fairhill will dispose of such Offered Right(s) to Columbia, such Offered Right(s) shall vest in Columbia, and Columbia and Fairhill shall be deemed to have an agreement with respect thereto on the same terms and conditions set forth in this Agreement to the extent the same are not inconsistent with the agreed upon financial terms. If either (A) Columbia fails to give Fairhill notice of its desire to negotiate within the

Formatted: Don't adjust space between Latinand Asian text, Tab stops: 0.97", Left

Formatted: Indent: First line: 0.5", Don'tadjust space between Latin and Asian text, Tabstops: 1.04", Left

Formatted: No bullets or numbering, Don'tadjust space between Latin and Asian text, Tabstops: 1.53", Left








aforementioned ten (10) business day period or (B) Columbia and Fairhill fail to reach an agreement regarding the Offered Right(s) within twenty-one (21) days following the commencement of their negotiations with respect thereto, Fairhill shall have the right, subject to clause B, below, to offer the Offered Right(s) to other parties.

6.3.1 B First Refusal. Subject to Columbia's right of first negotiation as provided in Section 12.1, above, if, at any time Fairhill proposes to accept any bona fide offer to license, lease, purchase or in any way acquire any of the Excluded Right(s), which offer is equal to or less favorable to Fairhill in any material respect than the last ask made by Fairhill (the “Last Ask”), Fairhill shall not accept such Third Party Offer until Fairhill offers Columbia the opportunity in writing to match the material terms of such Third Party Offer. Fairhill shall notify Columbia in writing ("Sale Notice") setting forth (A) the Excluded Right(s) that are the subject of such offer ("Sale Rights"), (B) the name and address of the offeror ("Offeror"), and (C) all of the material terms and conditions of such offer, including the financial terms of the offer (collectively, the "Terms"). During the period of ten (10) business days following Columbia's actual receipt of the Sale Notice, Columbia shall have the exclusive option ("Sale Rights Option") to license, lease and/or purchase the Sale Right(s) upon the Terms. If Columbia elects to exercise the Sale Rights Option, Columbia shall notify Fairhill accordingly within said ten (10) business day period, and Columbia shall, upon payment to Fairhill of the consideration specified in the Sale Notice, automatically acquire such Sale Right(s) on the Terms as supplemented by all of the terms and conditions of this Agreement not inconsistent therewith; provided, however, that Columbia may exclude from the Terms and may exercise the Sale Rights Option without agreeing to any Term which may not as easily be met by one person as another (e.g., a term which relates to services of any particular person or entity or to any particular property other than the Picture). If Columbia fails to exercise the Sale Rights Option within the aforementioned ten (10) business day period or notifies Fairhill in writing that it will not exercise the Sale Rights Option, Fairhill may convey the Sale Rights(s) to the Offeror on the Terms at any time during the following one hundred twenty (120) day period. For the avoidance of doubt, if the Terms of the Third Party Offer are equal to or more favorable to Fairhill than the Last Ask, Fairhill has no obligation to offer Columbia the opportunity to match the terms of such Third Party Offer

6.10

.

Presale of Foreign Distribution Rights. It is the intention of the parties to presell (i.e., license distribution rights prior to the initial release of the Picture) to one or more third parties the right to distribute the Picture in various countries within the Fairhill Territory. Presales will be conducted through Fairhill's affiliated sales agent Panorama ____________ ("Panorama"). Fairhill will receive a sales agency fee ("Sales Agency Fee") in an amount equal to 5% of all proceeds received or credited to Fairhill or its affiliates or sales agents from the presale of any and all such rights ("Presale Revenues") and will bear the fees of Panorama and any other sales agents engaged in connection with the presale of such rights. Fairhill and Columbia will have mutual approval over all issues relating to the presale of such distribution rights, including without limitation potential licensees and sales agents and the terms and conditions of each potential license, with Fairhill's decision being final as to all matters except that Columbia's decision shall be final with respect to the manner in which residuals are to be reported to applicable unions and guilds. "Net Presale Revenues" means an amount equal to (i)

Formatted: No bullets or numbering, Don'tadjust space between Latin and Asian text, Tabstops: 1.53", Left


Formatted: Indent: Left: 0", Don't adjustspace between Latin and Asian text



all Presale Revenues less (ii) the total of (A) the applicable Sales Agency Fee and (B) all costs incurred by Fairhill in connection with the applicable presales. Net Presale Revenues shall be applied as follows:

6.10.1. Sums Received Prior to Release

6.10.2

. All Net Presale Revenues received by or credited to Fairhill (or its affiliates or sales agents) prior to the date on which Fairhill invoices Columbia for the Purchase Price under Section 7.1, shall be applied to reduce the Purchase Price in accordance with Section 7.1 below.

Sums Received After Release

7.

. All Net Presale Revenues received by or credited to Fairhill (or its affiliates or sales agents) after the date on which Fairhill invoices Columbia for the Purchase Price under Section 7.1 (i.e., all Net Presale Revenues other than the Presale Offset Amount) shall be included in the Defined Gross Receipts waterfall under Section 7.2 and 7.3 below.

PURCHASE PRICE/ALLOCATION OF DEFINED GROSS RECEIPTS

7.1

.

Defined Gross Proceeds Participation.

7.1

Provided that there is not an Event of Default, Columbia shall pay Licensor an amount (the "Defined Gross Proceeds Participation") equal to Ten Percent (10%) of the “Defined Gross Proceeds” of the Picture.

Purchase Price

7.2

. On or after the date on which Fairhill completes Delivery of the Picture to Columbia in accordance with Section 9 below, Fairhill shall deliver to Columbia an invoice for the Purchase Price accompanied by a statement setting forth a computation of the Net Direct Cost of the Picture and the Purchase Price Columbia will pay the Purchase Price to Columbia within five (5) business days after receipt of the invoice, The "Purchase Price" means an amount equal to one-half (1/2) of (a) the lesser of the Net Direct Cost of the Picture, or the Net Production Budget, plus (b) all Excess Overbudget Costs that Columbia has agreed to co-finance under Section 4.4. "Net Direct Cost" of the Picture means an amount equal to (i) the estimated final Direct Cost of the Picture as of the date of the invoice, less (ii) the total of (A) all Net Presale Revenues received prior to the date of the invoice, and (B) all Net Production Incentives received by or credited to Fairhill or its affiliates or designees in connection with the Picture on or before the date of the invoice. "Net Production Incentives" means an amount equal to (x) all production benefits in the form of (or received with respect to) governmental rebates, governmental production incentives or governmental production subsidies, including financing transactions contemplated by or carried out pursuant to motion picture subsidy legislation or regulations, less (y) all out of pocket costs incurred by Fairhill or its affiliates in obtaining such production benefits.

Defined Gross Receipts istributable Receipts Participation Waterfall.


Formatted: Bullets and Numbering

Provided that there is not an ‘Event of Default” (as defined below), “Defined Gross Receipts” (as defined below) from the distribution of the Picture in the Columbia Territory shall be allocated as follows on a continuing and cumulative basis:



7.2.1 First, Columbia shall deduct and retain for its own account a Distribution Fee in an amount equal to Tenwelve and One-Half Percent (102.5%) of Defined Gross Receipts; with respect to those markets/media with respect to which Columbia customarily engages an unaffiliated third party subdistributor (e.g. non-theatrical, video clubs, internet, etc.), Columbia’s Distribution Fee shall be an over-ride fee equal to Five Percent (5%) of all amounts actually received by Columbia from the third party subdistributor, provided that with respect to the theatrical and television distribution of the Picture, the sum of the subdistributor’s distribution fee and Columbia’s Distribution Fee shall not exceed Twenty Percent (20%) of Columbia’s Gross Receipts;

7.2.2 Second, Columbia shall deduct and retain for its own account an amount equal to all “Distribution Expenses” (as defined below) incurred by Columbia in connection with the Picture; and provided that if Fairhill makes a Theatrical Distribution Expense Shortfall Payment to Columbia under Section 6.3, then, (i) upon receipt thereof by Columbia, Columbia’s unrecouped Distribution Expenses shall be deemed to be reduced by the amount of the Theatrical Distribution Expense Shortfall Payment, and (ii) Fairhill's Theatrical Distribution Expense Shortfall payment shall be recoupable as Distribution Expenses (on a pari passu basis with Columbia's recoupment of its Distribution Expenses) only from and after the point when (A) Columbia's unrecouped Distribution Expenses divided by Columbia's Percentage Share is equal to (or less than) (B) Fairhill's Theatrical Distribution Expense Shortfall payment divided by Fairhill's Percentage Share;

7.2.3 Third, Columbia shall deduct and retain for its own account an amount equal to any third party participations actually paid or incurred by Columbia on LicensorFairhill’s behalf pursuant to Section 8 below;

7.2.4 Defined Gross Receipts remaining after the deductions in Sections 7.2.1, 7.2.2, and 7.2.3 above are “Distributable Receipts.” Columbia shall retain for its own account Columbia's Percentage Share of Distributable Receipts and , and Columbia shall pay to LicensorFairhill an amount equal to Fairhill's Percentage Share One Hundred Percent (100%) of Distributable Receipts.

7.3 Definitions.

7.3.1 “Defined Gross Receipts” shall be defined as set forth in Exhibit “A”, as modified by the Rider, both attached hereto and incorporated herein by this reference, provided, however, solely for the purpose of determining Defined Gross Receipts for purposes of Section 7.2 above (and not for purposes of determining Defined Gross Proceeds in Section 7.1 above), (i) in Section 2.A.(ii) of Exhibit "A" the phrase "Twenty Percent (20%) of Home Entertainment Gross Proceeds" shall be amended to "One Hundred Percent (100%) of Home Entertainment Gross Proceeds", and(ii) all Net Presale Revenues received after Fairhill invoices Columbia for the Purchase Price shall be included in Defined Gross Receipts, and (iii) all Net Production Incentives received after Fairhill invoices Columbia for the Purchase Price shall be included in Defined Gross Receipts. in Section 6 of Exhibit “A”, Distribution Expenses shall also include any and all expenses incurred in connection with the exploitation of Home



Entertainment Rights, including, without limitation, all expenses of mastering, authoring, encoding, re-editing, dubbing, subtitling, closed captioning, raw materials, copy protection and/or preparation of additional content to be included on Video Devices, manufacturing, duplication, packaging, shipping, distributing, advertising, and/or marketing, ;

7.3.2 “Distribution Expenses” for the Picture shall have the meaning as

set forth in Paragraph 6 of Exhibit “A” (Defined Gross Proceeds and Defined Net Proceeds), as modified by the Rider, provided that (i) the “Advertising Overhead” set forth in the last sentence of Paragraph 6.B. shall not be charged and (ii) in Section 6 of Exhibit “A”, Distribution Expenses shall also include any and all expenses incurred in connection with the exploitation of Home Entertainment Rights, including, without limitation, all expenses of mastering, authoring, encoding, re-editing, dubbing, subtitling, closed captioning, raw materials, copy protection and/or preparation of additional content to be included on Video Devices, manufacturing, duplication, packaging, shipping, distributing, advertising, and/or marketing.;

7.3.3 “Defined Gross Proceeds” for the Picture shall have the meaning

set forth in Paragraph 3 of Exhibit “A” (Defined Gross Proceeds and Defined Net Proceeds), as modified by the Rider, provided that with respect to Home Entertainment Rights, solely for the purpose of determining Defined Gross Proceeds, in Section 2.A.(ii) of Exhibit “A”, the phrase "Twenty Percent (20%) of Home Entertainment Gross Proceeds" shall be amended to "Thirty-Five Percent (35%) of Home Entertainment Gross Proceeds."

7.3.4 Each party's "Percentage Share" shall be the amount contributed

by such party toward the Direct Cost of the Picture (after giving effect to Columbia's election whether or not to fund Excess Overbudget Costs) divided by the total final Direct Cost of the Picture. If there are no Excess Overbudget Costs or Columbia elects to fund 50% of all Excess Overbudget Costs, each party's Percentage Share shall be 50%. If there are Excess Overbudget Costs and Columbia declines to fund 50% thereof, then the Percentage Shares of the parties shall be adjusted accordingly. [By way of example, if the Gross Production Budget (inclusive of contingency) is $25 million and the final Direct Cost is $30 million and Columbia declines to fund any Excess Overbudget Costs (i.e., Columbia funds a total of $12.5 million and Fairhill funds $17.5 million), then Columbia's Percentage Share shall be 41.67% and Fairhill's Percentage Share shall be 58.33%).

7.3.5 "Direct Costs" shall have the meaning set forth in Exhibit A to this

Agreement except that no Third Party Participations shall be deducted in determining Direct Costs.

7.4 General. LicensorFairhill acknowledges that Columbia is not obligated to

pay any advance, minimum guarantee, or purchase price in connection with the Picture. Columbia makes no representation that the Picture will generate any Defined Gross Receipts, Distributable Receipts, Defined Gross Proceeds, or any particular amount of Defined Gross Receipts, Distributable Receipts, or Defined Gross Proceeds.










7.5 Payment Address

__________________________

. Columbia shall account to LicensorFairhill under this Section 7 in accordance with the terms and conditions of Exhibit “A” attached hereto. To the extent that anything in Exhibit “A” conflicts with this Agreement, this Agreement shall prevail. Accounting reports and any payments due and owing to LicensorFairhill pursuant to the terms hereunder shall be sent to:

__________________________ __________________________ Attention: _________________

7.6 Audit

“We have examined the calculation of Columbia’s ‘Distribution Expenses’ in connection with prints and Video Devices reported on the participation statement rendered for the period ________________ with respect to the motion picture entitled ‘Untitled Eric Singer PictureFoxcatcher’. Our examination was performed in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included such procedures as we considered necessary in the circumstances.

. LicensorFairhill shall not be entitled to receive the benefit of any signing or other bonuses or any quantity discounts under Columbia’s contract with any duplicator of prints or Video Devices (“Lab”). LicensorFairhill’s audit, if any, of Columbia’s contract with any such Lab will be separate from the general audit rights set forth in Exhibit “A”, and is subject to the following conditions: The audit must be conducted by Columbia’s customary corporate auditor, and the auditor will confirm in writing to LicensorFairhill the following:

In our opinion, the ‘Distribution Expenses’ in connection with prints and Video Devices referred to above were calculated and reported on the participation statement rendered for the period _______________ in conformity with the terms of the Agreement.”

8. THIRD PARTY PARTICIPATIONS/ RESIDUALS.

LicensorFairhill shall be responsible for the preparation of statements and the payment of all participations, deferments and other contingent compensation payable to third parties in connection with the Picture and hold Columbia harmless therefrom. Columbia shall have no obligation or liability in connection with any third party participations or other contingent compensation.

8.1 In no event shall LicensorFairhill grant any third party the right to audit Columbia, to require direct payment to such party by Columbia, and/or to seek redress from Columbia for non-payment of any amounts which may allegedly be owed such party.



8.2 [Provided that LicensorFairhill provides Columbia with all necessary information on a timely and accurate basis, Columbia shall sign assumption agreements/qualified distributor letters for the Picture with the applicable guilds (which LicensorFairhill has advised Columbia will be SAG, WGA and DGA) for the Columbia Territory and Distribution Term and Columbia shall prepare and file all necessary reports with the applicable guilds and pay all guild residuals (“Residuals”) for the Columbia Territory during the Distribution Term. As part of its Delivery obligations for the Picture, LicensorFairhill shall deliver to Columbia all employment agreements, cast lists, call sheets and the like necessary in order for Columbia to account for and pay residuals. Columbia will be entitled to rely on the accuracy of reports that it receives from LicensorFairhill. Columbia shall have the right to settle guild audits with respect to the Columbia Territory and the Distribution Term. In the event that LicensorFairhill fails to deliver the Residuals documentation set forth in Section 7 of Schedule “A” by the Delivery Date and Columbia incurs any penalties in connection with a delinquent payment due to LicensorFairhill’s failure to timely provide such proper Residuals documentation, LicensorFairhill shall be liable for such amounts. Columbia shall be entitled to fully recoup all payments of Residuals and any such penalties and interest as Distribution Expenses.]

8.3 Without limiting the applicability generality of the foregoing with respect to all other Participations of any nature agreed to by Fairhill, Columbia has agreed to advance contingent bonuses, if applicable, up to a total of $600,000, including $25,000 to David O. Russell for Golden Globe nomination bonus and $50,000 to David O. Russell for Golden Globe win bonus, and the remainder for Academy Award nomination and win bonuses contractually committed by LicensorFairhill to talent on the Picture, which Columbia may recoup pursuant to Paragraph 7.2.3 above.

9. DELIVERY OF PICTURE

9.1

.

Delivery

2

. The completed Picture, free of all liens, claims and encumbrances (except for the Permitted Encumbrances) which would diminish, affect, alter or otherwise impair, Columbia’s Distribution Rights in the Picture, fully cut, edited, scored and ready for release in all respects, and complying with all of the terms, conditions, specifications and mutually-approved elements of Section above of this Agreement, shall be delivered in accordance with the at the addresses set forth in the Columbia’s customary Delivery Schedule attached hereto as Schedule “A” and incorporated herein by this reference (“Delivery Schedule”), in accordance with the Delivery Schedule, at LicensorFairhill’s sole cost and expense, on or before ___________ (“Delivery Date”) for delivery of so-called “basic” delivery items (“Primary Delivery”), time being of the essence, with delivery of so-called “non-basic” delivery items to be delivered no later than thirty (30) days after the Delivery Date; provided however, that prior to the Delivery Date (i) on such earlier date as Columbia may reasonably require, LicensorFairhill shall deliver to Columbia at Columbia’s cost, a work print of the Picture which will be suitable for exhibition in the anti-blind bidding states and for selected long lead media if available (and, if a work print is not available, LicensorFairhill shall deliver to Columbia a rough cut of the Picture on video), (ii) as soon as reasonably possible following completion of principal photography of the Picture, LicensorFairhill shall deliver to Columbia




such other selected Picture materials as may be required by Columbia to prepare trailers and other advertising and/or publicity materials, and (iii) as soon as possible after the date hereof LicensorFairhill shall deliver to Columbia all other materials which, under the Delivery Schedule, are required to be delivered as soon as available.

9.2 Delivery Requirements

9.3

. Delivery pursuant to this Section 9 shall not be deemed complete until LicensorFairhill has delivered the following to Columbia: (i) all items enumerated in the Delivery Schedule (including documents) for which physical delivery is required, (ii) laboratory access letters irrevocably granting Columbia access during the Distribution Term to the original negative of the Picture and all other film and sound materials identified as “access items” in Schedule “A,” attached hereto and incorporated herein by this reference, and (iii) for purposes of confirming the Picture Specifications set forth in Section 2.3, a certificate (in the form attached hereto as Exhibit “D” and incorporated herein by reference (the “Final Certified Cost Statement”), which may contain accruals for expenses incurred but not yet paid, signed by the Completion Guarantor, the production accountant and an officer of LicensorFairhill setting forth and certifying the actual total production cost of the Picture, with Columbia having the right to verify (including, without limitation, the right to review the books and records of LicensorFairhill or any applicable third party to the extent LicensorFairhill has the right to review such third parties books and records) said Final Certified Cost Statement; and (iv) all other items required by any provision of this Agreement to be delivered to Columbia. All audio and/or visual materials required to be delivered by LicensorFairhill to Columbia hereunder shall be of a technical quality suitable for commercial exploitation and shall fully comply with all of the terms, conditions and specifications of this Agreement. Complete and timely delivery in strict compliance with all of the requirements of this Section 9 is hereinafter referred to as “Delivery”.

Delivery Notice

9.4

. At such time as LicensorFairhill believes that it has completed Primary Delivery hereunder, LicensorFairhill shall send Columbia written notice to that effect (“Delivery Notice”) specifying the dates of delivery, the items delivered and the person and address where each item was delivered.

Acceptance of Delivery/Non-Conforming Picture/Non-Conforming Delivery. Notwithstanding anything to the contrary contained in this Agreement, if the completed Picture does not conform to all of the requirements and specifications set forth in this Agreement (a “Non-Conforming Picture”) or if the delivery of the Picture does not conform to the requirements of this Section 9 (“Non-Conforming Delivery”), Columbia shall not be required to accept Delivery of the Picture. Columbia shall give LicensorFairhill written notice of its acceptance of Delivery or of Columbia’ contention that there is a Non-Conforming Picture or Non-Conforming Delivery within thirty (30) days of Columbia’ receipt of the Delivery Notice (as each such term is defined below). In the event of any Non-Conforming Picture or Non-Conforming Delivery, Columbia shall advise LicensorFairhill in writing of the reasons for such non-conformity and LicensorFairhill shall have the opportunity for thirty (30) days to cure such non-conformity and re-tender delivery of the Picture to Columbia within such thirty (30) day period; provided that nothing contained herein shall extend the Delivery Date (other than for the thirty (30) day cure period) and LicensorFairhill shall be required to complete any such cure and



re-tender by the applicable Delivery Date plus thirty (30) days. If LicensorFairhill does not cure the non-conformity by the applicable Delivery Date and Columbia does not accept Delivery of the Picture, Columbia shall have no further obligation to release the Picture as provided herein (e.g., the release date, minimum P&A spend and minimum screen commitments provided for in this Agreement shall no longer apply). If there is a disagreement between the parties as to whether complete Delivery has been timely made (or whether a cure has been timely effected), such dispute shall be determined by binding arbitration in accordance with the procedure set forth in the Completion Guaranty. Notwithstanding the foregoing, Columbia shall have the right, exercisable in its sole discretion, to accept a Non-Conforming Delivery and/or to accept delivery of a Non-Conforming Picture and to require LicensorFairhill to deliver a Non-Conforming Picture and, in such event, Columbia shall have the right to withhold from the minimum P&A spend and any amounts payable to LicensorFairhill hereunder, Columbia’s good faith estimate of the actual direct cost of conforming the Picture and/or delivery to the requirements of this Agreement, to be subsequently reconciled with the actual direct costs of conforming the Picture and/or delivery.

9.5 Last Refusal re Rejected Picture

9.6

. If Columbia rejects Delivery of the Picture pursuant to Section 9.5 above, Columbia shall have a right of Last Refusal in accordance with the procedure set forth in Section 12.3 below, with respect to any proposed sale (or exploitation by LicensorFairhill) of any of the Distribution Rights with respect to the Columbia Territory (or any portion thereof).

Columbia’s Distribution Rights With Respect to Undelivered Picture

9.7

. If LicensorFairhill does not make Delivery of the Picture in accordance with the requirements of this Agreement and, at any time in the future (i.e., after the Delivery Date), LicensorFairhill completes the Picture, LicensorFairhill must tender Delivery of the Picture to Columbia pursuant to the provisions of this Section 9 and Columbia shall have the option (exercisable within thirty [30] days of such Delivery) of accepting Delivery of the Picture pursuant to the terms of this Agreement, provided that Columbia’s exercise of its option to accept the Picture shall not be deemed to be a waiver of Columbia’s rights and remedies with respect to LicensorFairhill’s failure to make timely Delivery; provided, however, that if Columbia does accept delivery of such Picture, without waiving its other rights in connection with LicensorFairhill’s failure to make delivery (including without limitation its right to offset any costs of conforming delivery, etc. from any amounts otherwise payable to LicensorFairhill hereunder), Columbia’s rights and other obligations with respect to the Picture other than its (e.g. the release commitment pursuant to Section 6.2 above (e.g., and Columbia's obligation to pay the Purchase Price and to pay to Fairhill its share of the allocation of receipts pursuant to Section 7 above) shall remain in full force and effect. If Columbia does not exercise its option to accept delivery on the Picture as set forth above, Columbia shall have a right of First Negotiation and Last Refusal in accordance with the procedures set forth in Sections 12.1 and 12.3, below, with respect to any proposed sale (or exploitation by LicensorFairhill) of any of the Distribution Rights with respect to the Columbia Territory (or any portion thereof).

Access to Physical Elements and Other Materials and to Marketing Materials. To enable Columbia to exploit the Distribution Rights granted hereunder in



connection with the Picture, Columbia shall have free access to all physical elements for all versions of the Picture and all marketing and promotional material created by LicensorFairhill (if any) and/or created by LicensorFairhill’s licensees and agents, which elements shall include, without limitation, all digital, film and sound pre-print and other duplicating materials for all foreign language versions, including any dubbed or subtitled versions of the Picture and all DVD value-added materials (if any). Such access shall be confirmed by execution of customary laboratory access letters, in substantially the form attached hereto as Schedule “D”, directed to all third party laboratories (if any) holding any of the Picture’s physical film and/or sound elements. All actual, direct, out of pocket duplication costs incurred by Columbia associated with such laboratory access to such physical elements shall be advanced borne by Columbia and recouped as a Distribution Expense. Columbia and LicensorFairhill shall each provide the other with free access to advertising materials (including, without limitation, trailers) prepared by the respective party, provided that each accessing party shall be responsible for the costs of access (e.g., duplication and shipping) and for the clearance of such materials (including without limitation music) in their respective territories, and the parties shall consult with each other regarding obtaining worldwide clearance (and sharing the applicable costs) of music and other materials.

9.8 TV/Airline

10.

. LicensorFairhill shall, at LicensorFairhill’s expense, produce, shoot and record and will deliver to Columbia, in accordance with the provisions of the Delivery Schedule all so-called “cover shots” or alternative scenes, sound or dialogue (which can be used in lieu of any unacceptable scenes, sound or dialogue) necessary in order for Columbia to conform the Picture to the requirements for U.S. free television broadcasting (“TV Version”) and in-flight exhibition (“Airline Version”). Columbia shall provide LicensorFairhill with free access to any TV Version and Airline Version prepared by Columbia, provided that LicensorFairhill shall be responsible for the costs of access (e.g. duplication and shipping).

CONTRACTS; MUSIC LICENSES

10.1

.

Third Party Contracts. As part of LicensorFairhill’s Delivery obligations hereunder, LicensorFairhill shall obtain and deliver to Columbia copies of those contracts, assignments and licenses in connection with the production and exploitation of the Picture set forth in the Delivery Schedule. Insofar as Columbia’s rights are affected thereby, all agreements between LicensorFairhill and third parties shall contain customary provisions granting to LicensorFairhill and its licensees all rights necessary in order for Columbia to exercise all rights and privileges granted to Columbia hereunder and to properly and effectively distribute and exploit the Picture as contemplated by this Agreement. Without limiting the generality of the foregoing, all agreements with all principal cast members and the screenwriter and director shall provide that (i) Columbia shall have customary rights to use the names and likenesses of such parties in connection with the distribution, advertising and promotion of the Picture (including, without limitation, customary use of such names and likenesses in commercial tie-ins), subject to any contractual restrictions to which Columbia is subject; and (ii) such persons will be required to render, at Columbia’s request and expense (to be recouped as Distribution Expenses hereunder), reasonable and customary promotional and publicity services in connection with the release of the Picture in the Columbia Territory.



10.2 Music Licenses

11.

. Without limiting the generality of the foregoing, in the event that any music or lyrics or sound recordings synchronized with or recorded for the Picture are not in the public domain, LicensorFairhill shall obtain from the copyright proprietor thereof (and with respect to music or lyrics synchronized with or recorded for the Picture which are composed by an employee-for-hire of LicensorFairhill or are otherwise owned by Licensor, LicensorFairhill Columbia shall own an undivided ½ interest and shall have the right to exploit shall license to Columbia as part of the Distribution Rights) all applicable synchronization, performing and master use rights with respect thereto and licenses, as appropriate, pursuant to which Columbia shall have, upon Delivery of the Picture, the right throughout the Columbia Territory and for the Distribution Term to perform publicly said material for profit or non-profit, and to authorize others so to perform same, and otherwise to use said material, in connection with the Picture and excerpts therefrom. For score and all other music written as work-made-for-hire, LicensorFairhill shall obtain the right in the Columbia Territory to use the music both “in context” and “out of context” in synchronization with all forms of trailers, advertisements, featurettes, promotions and co-promotions, as the same may be exploited theatrically, non-theatrically, on television (free, pay, cable and otherwise) and by any and all other means (including, without limitation, by means of video cassettes, video discs or other similar devices) (collectively “Advertising and Promotional Media”) and in any and all media, now or hereafter known or devised. In connection with all music licenses (synch and master), (i) LicensorFairhill shall obtain the right in the Columbia Territory to use the music in synchronization with the Picture in all media now known or hereafter devised, and (ii) LicensorFairhill shall obtain the right in the Columbia Territory to use the music “in context” in synchronization in Advertising and Promotional Media.

CREDITS

11.1

.

Credit Abstracts. As soon as reasonably possible but no later than completion of principal photography of the Picture, LicensorFairhill shall deliver to Columbia a written statement showing, in customary form, the exact form and manner of all advertising credit obligations accompanied by copies of the full text of all advertising credit obligations. As soon as shall be practicable but in no event later than ninety (90) days prior to the scheduled date for Delivery of the Picture, LicensorFairhill shall deliver to Columbia a written statement showing the exact form and manner of the main and end titles of the Picture. After Columbia’s receipt of each such statement, the parties will consult with each other with respect to the credits to be accorded in the paid advertising relating primarily to the Picture issued by, or under the direct control of, Columbia (“Paid Ads”), as applicable, and attempt to agree upon the final form of such credits, consistent with the following: (i) LicensorFairhill’s contractual obligations, (ii) contractual obligations under collective bargaining agreements and the Underlying Agreements, and (iii) customary major studio policies and parameters. Columbia agrees that it will not withhold its approval of LicensorFairhill’s credit list provided said credits are customary in the United States motion picture industry and consistent with major studio policies and practices regarding credit. LicensorFairhill shall not prepare the final title cards of the Picture until such credits have been determined as aforesaid.



11.2 Contractual Credit Provisions

11

. LicensorFairhill hereby agrees to comply with customary major studio guidelines in each contract entered into by LicensorFairhill in which provision is made for the giving of credit to any party. In particular, but not by way of limitation, there shall be no artwork likeness ties or guarantees and no ties or guarantees with respect to credit in conjunction with the artwork title accorded without Columbia’s prior written approval and unless Columbia shall otherwise consent in advance in writing, and each contract entered into by LicensorFairhill in which provision is made for the giving of credit to any party shall limit the obligation to give such credit in the manner and to the extent as hereinabove set forth in this Section . Without limiting the generality of the preceding sentence, each such contract shall (i) contain a clause pursuant to the terms of which the obligation to give such credit shall not apply to the excluded advertising described in Section 11.5 below (it being understood that a tie to other individuals or entities in excluded advertising may be agreed if consistent with such individual’s or entity’s precedence and stature), and (ii) contain an exculpatory clause limiting the rights and remedies of such party in the event of any breach of such credit provision as set forth in Section 11.8 below. Except as otherwise expressly provided herein, LicensorFairhill shall have the right to determine the order and placement of on screen credits for the Picture (subject to applicable contractual and/or guild obligations and/or restrictions). Provided said credits are customary in the United States motion picture industry and consistent with major studio policies and practices regarding credit, Columbia agrees to abide by the contractual credit obligations of LicensorFairhill with respect to the Picture of which Columbia is timely notified.

11.3 Production Credit; Presentation Credit; Animated Logo


. In the Columbia Territory, (i) Columbia (and/or its affiliated distribution entities, such as Sony Pictures Home Entertainment, Sony Pictures Television, etc.), and Fairhill's designee Annapurna Films ("Annapurna") will each be accorded an animated logo on screen at the beginning of the Picture, and in all trailers for the Picture (it being understood that such logos may be “flashed” and Annapurna’s logo shall be no longer in duration than Columbia’s), with Columbia’s in first position in the Columbia Territory and Annapurna's logo being in first position in the Fairhill Territory; and (ii) Columbia (and/or its affiliated distribution entities) and Annapurna shall be accorded a “presentation” credit on a shared card in the main titles of the Picture, with Columbia's credit being in first position in the Columbia Territory and Annapurna's credit being in first position in the Fairhill Territory, substantially in the form “Columbia Pictures and Annapurna Films Presents” or " Annapurna Films and Columbia Pictures Present," as applicable. No other person or entity shall be entitled to a logo, presentation, or production credit without Columbia’s prior written approval. Columbia may accord its distribution partners logo and/or presentation credit prior to Columbia’s logo and/or credit, as applicable. Columbia may also receive and/or accord appropriate releasing credits and/or logos in the end titles of the Picture (e.g. “Released by Sony Pictures Releasing Columbia Pictures, a Sony Pictures Entertainment Company”). LicensorFairhill shall include in the end titles of the Picture, in a size, place, form and style designated by Columbia, copyright notices, and such seals, emblems, and disclaimers (as may be designated by Columbia). LicensorFairhill shall not agree to accord any other logos or presentation credits on the Picture without Columbia’s prior written approval, and Columbia



shall not accord any other producer, executive producer, production company or animated logo credits on the Picture without LicensorFairhill’s prior written consent.

11.4 Paid Ads in the Columbia Territory

11.5

. In the Columbia Territory, (i) Columbia (and/or its affiliated distribution entities) and Annapurna shall each be accorded a shared “presentation” credit, with Columbia in first position in the Columbia Territory and Annapurna's credit being in first position in the Fairhill Territory, substantially in the form “Columbia Pictures and Annapurna Films Present” or " Annapurna Films and Columbia Pictures Present," as applicable, substantially in the form “Columbia Pictures and Annapurna Films Presents” in the billing block of all any paid advertising issued by or under the direct control of Columbia or the distributor of the Picture in the applicable territory and on the home video packaging for the Picture, and (ii) Columbia (and/or its designee(s)) and Annapurna shall each be accorded a static “bug” logo, with Columbia’s in the lower right corner beneath the billing block and Annapurna’s in the lower left corner in the Columbia Territory. In the Columbia Territory, Columbia and LicensorAnnapurna shall each be accorded (i) an animated (or “flashed”) logo on screen following (and no longer in duration than) Columbia’s (and/or its designees’) animated (or flashed) logo, and (ii) the shared presentation credit set forth above, on theatrical trailers and on any television or other advertising (including “Excluded Ads”) of the Picture of more than thirty (30) seconds in which the applicable distributor's Columbia’s (and/or its designees’) animated (or flashed) logo appears.

Copyright Notice

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

. The copyright notices shall be in conformity with the laws of the United States and the Universal Copyright Convention relating to the form and content of copyright notices. The Picture shall also contain the following legend, such legend to appear on the Picture in accordance with Columbia’s customary practice (i.e., located at the end titles):

11.6 Exclusions and Exceptions. Notwithstanding any provision of this Agreement, Columbia shall not be obligated to give LicensorFairhill or Annapurna (except as set forth in Sections 11.3 and 11.4 above) or any third party credit in the following forms of Paid Ads (“Excluded Ads”): group, list, institutional or so-called teaser advertising; announcement advertising; advertising relating primarily to the source material upon which the Picture is based, or to the author, any member of the cast, the producer(s), writer(s) or any other personnel involved with the production of the Picture; so-called “award” or “congratulatory” advertisements in which only the nominee or awardee is mentioned, including advertisements or announcements relating to consideration or nomination for an award (the foregoing to be collectively referred to as “Special Ads”); trailers (including promotional films) or other screen, radio or television advertising; advertising in narrative form; advertising for film festivals, film markets and the like; advertising one-half page (or the equivalent in SAU’s) in size or less; outdoor advertising (including, but not limited to so-called 24-sheets); theater display



advertising; advertising in which no credit is accorded other than credit to one (1) or two (2) stars of the Picture and/or to Columbia. The following items shall not be considered Paid Ads or excluded advertising for the purpose of determining any credit obligations: videocassettes, videodiscs and other home video devices and the covers, packages, containers or jackets therefor; publicity and promotional items and materials; advertising relating to subsidiary or ancillary rights in the Picture (including, but not limited to novelizations, screenplays or other publications, products, merchandising, music publishing or soundtrack recordings); voiceovers; advertising, publicity and exploitation relating to by-products or commercial tie-ins; and other advertising not relating primarily to the Picture. LicensorFairhill may contractually agree that any of the “Produced By,” “Executive Producer,” screenwriting and/or “Directed By” credits may be tied in “size” (which term means only height and width and thickness of letters) and in ad placement to one another in excluded advertising (other than award, congratulatory, nomination, voice over, film marketing and film festival advertising). Notwithstanding the generality of the foregoing, Columbia agrees that a tie to other individuals or entities in excluded advertising may be agreed if consistent with such individual’s or entity’s precedentsnce and stature.

11.7 Credit Size

11.8

. All references to the title of the Picture in any provision of this Agreement, or in any agreement between LicensorFairhill and a third party, relating to credit shall be deemed to refer to the so-called regular title of the Picture and not to any artwork title used in connection with the Picture, unless such reference is specifically made to the artwork title. LicensorFairhill shall not agree to accord any credit above (or in conjunction with) the artwork title or the size of which is measured by the artwork title except with Columbia’s prior written consent or if such credit is for a lead actor who customarily receives such credit.

Breach; No Injunctive Relief

11.9

. No casual or inadvertent failure of Columbia or Fairhill to comply with any provision hereof relating to credit hereunder, nor any failure by third parties to comply with such requirements, shall constitute a breach of this Agreement by Columbia. LicensorFairhill and Columbia each represents, warrants and agrees that (notwithstanding anything to the contrary contained in agreements with third parties delivered to Columbia) the rights and remedies of LicensorFairhill or Columbia or any such third party, as applicable, in the event of any breach relating to credit by Columbia or Fairhill, as applicable, shall be limited to the right to recover damages, if any, in an action at law and in no event shall LicensorFairhill, Columbia or any such party by reason of any such breach have the right to terminate this Agreement or to enjoin or restrain the exhibition or other exploitation of the Picture, or the use, publication or dissemination of any advertising issued in connection with the Picture.

Subdistributors

11.10

. Columbia and Fairhill shall each advise its respective licensees and sub-distributors of the Picture of Columbia’sall applicable credit obligations on the Picture; provided that in no event shall Columbia or Fairhill be liable for any error or omission of any licensee, subdistributor or other third party.

Prospective Cure. In the event of Columbia’s or Fairhill's inadvertent or any third party’s failure to comply with any of its credit obligations hereunder, Columbia or Fairhill, as applicable, shall, upon receipt of written notice of such failure, use reasonable efforts



to correct such failure in Paid Ads, excluded ads, ancillary items, and home video packaging for and copies of the Picture on a prospective basis only (i.e. only those Paid Ads (if any) and home video packaging prepared or prints/copies manufactured after Columbia’s receipt of such notice (allowing for adequate time after receipt of notice to implement such correction)).

12. First Negotiation; First Refusal. Columbia shall also have a the right of first negotiation and last refusal with respect to any proposed license, sale or other disposition by LicensorFairhill of any “Termination Rights” (as defined in Section 12.5 below) (the Termination Rights are collectively referred to as the “Negotiable Rights”):

12.1 First Negotiation. If at any time LicensorFairhill intends to license, sell, transfer, assign, hypothecate or in any way convey or dispose of any of the Negotiable Rights or any portion thereof, Owner shall, before offering such Negotiable Right(s) to any other party, give Columbia written notice ("Notice") identifying the Negotiable Right(s) which LicensorFairhill wishes to so convey ("Offered Right(s)") and the terms on which LicensorFairhill wishes to negotiate in respect of such Offered Right(s). Columbia shall have the right, exercisable by written notice to LicensorFairhill within ten (10) business days following Columbia's actual receipt of the Notice, to advise LicensorFairhill as to whether Columbia wishes to negotiate regarding the Offered Right(s). If Columbia notifies LicensorFairhill that it wishes to so negotiate, LicensorFairhill and Columbia shall negotiate in good faith regarding such Offered Right(s). If LicensorFairhill and Columbia reach agreement as to financial terms, including any term relating to the consideration to LicensorFairhill which can be readily reducible to a determinable sum of money, upon which LicensorFairhill will dispose of such Offered Right(s) to Columbia, such Offered Right(s) shall vest in Columbia, and Columbia and LicensorFairhill shall be deemed to have an agreement with respect thereto on the same terms and conditions set forth in this Agreement to the extent the same are not inconsistent with the agreed upon financial terms. If either (A) Columbia fails to give LicensorFairhill notice of its desire to negotiate within the aforementioned ten (10) business day period or (B) Columbia and LicensorFairhill fail to reach an agreement regarding the Offered Right(s) within thirty (30) days following the commencement of their negotiations with respect thereto, LicensorFairhill shall have the right, subject to Section 12.3, below, to offer the Offered Right(s) to other parties.

12.2 First Refusal. Subject to Columbia's right of first negotiation as provided in Section 12.1, above, if, at any time LicensorFairhill proposes to accept any bona fide offer to license, lease, purchase or in any way acquire any of the Excluded Right(s), which offer is equal to or less favorable to LicensorFairhill in any material respect than the last ask made by LicensorFairhill (the “Last Ask”), LicensorFairhill shall not accept such Third Party Offer until LicensorFairhill offers Columbia the opportunity in writing to match the material terms of such Third Party Offer. LicensorFairhill shall notify Columbia in writing ("Sale Notice") setting forth (A) the Excluded Right(s) that are the subject of such offer ("Sale Rights"), (B) the name and address of the offeror ("Offeror"), and (C) all of the material terms and conditions of such offer, including the financial terms of the offer (collectively, the "Terms"). During the period of ten (10) business days following Columbia's actual receipt of the Sale Notice, Columbia shall have the exclusive option ("Sale Rights Option") to license, lease and/or purchase the Sale Right(s) upon the Terms. If Columbia elects to exercise the Sale Rights Option, Columbia shall notify



LicensorFairhill accordingly within said ten (10) business day period, and Columbia shall, upon payment to LicensorFairhill of the consideration specified in the Sale Notice, automatically acquire such Sale Right(s) on the Terms as supplemented by all of the terms and conditions of this Agreement not inconsistent therewith; provided, however, that Columbia may exclude from the Terms and may exercise the Sale Rights Option without agreeing to any Term which may not as easily be met by one person as another and/or any term which is not readily reducible to a determinable sum of money (e.g., a term which relates to services of any particular person or entity or to any particular property other than the Picture). If Columbia fails to exercise the Sale Rights Option within the aforementioned ten (10) business day period or notifies LicensorFairhill in writing that it will not exercise the Sale Rights Option, LicensorFairhill may convey the Sale Rights(s) to the Offeror on the Terms at any time during the following one hundred twenty (120) day period. For the avoidance of doubt, if the Terms of the Third Party Offer are equal to or more favorable to LicensorFairhill than the Last Ask, LicensorFairhill has no obligation to offer Columbia the opportunity to match the terms of such Third Party Offer.

12.3 Last Refusal. Subject to Company's right of first negotiation as provided in Section 12.1, above, if, at any time LicensorFairhill receives any bona fide offer to license, lease, purchase or in any way acquire any of the Termination Right(s), and LicensorFairhill proposes to accept such offer, whether or not such offer is more, less, or equally favorable to Owner than the Last Ask, LicensorFairhill shall not accept such Third Party Offer until LicensorFairhill offers Columbia the opportunity in writing to match the material terms of such Third Party Offer. LicensorFairhill shall notify Columbia in writing ("Sale Notice"), setting forth (A) the Termination Right(s) that are the subject of such offer ("Sale Rights"), (B) the name and address of the offeror ("Offeror"), and (C) all of the material terms and conditions of such offer, including the financial terms of the offer (collectively, the "Terms"). During the period of twelve (12) business days following Columbia's actual receipt of the Sale Notice, Columbia shall have the exclusive option ("Sale Rights Option") to license, lease and/or purchase the Sale Right(s) upon the Terms. If Columbia elects to exercise the Sale Rights Option, Columbia shall notify LicensorFairhill accordingly within said twelve (12) business day period, and Columbia shall, upon payment to LicensorFairhill of the consideration specified in the Sale Notice, automatically acquire such Sale Right(s) on the Terms as supplemented by all of the terms and conditions of this Agreement not inconsistent therewith; provided, however, that Columbia may exclude from the Terms and may exercise the Sale Rights Option without agreeing to any Term which may not as easily be met by one person as another and/or any term which is not readily reducible to a determinable sum of money (e.g., a term which relates to services of any particular person or entity or to any particular property other than the Picture). If Columbia fails to exercise the Sale Rights Option within the aforementioned twelve (12) business day period or notifies LicensorFairhill in writing that it will not exercise the Sale Rights Option, LicensorFairhill may convey the Sale Rights(s) to the Offeror on the Terms at any time during the following one hundred twenty (120) day period.

12.4 Continuing Right. The provisions of Sections 12.1, 12.2, and 12.3 shall continue in full force and effect so long as LicensorFairhill retains any right, title or interest in or to any of the Negotiable Right(s) and Columbia's failure to acquire any Negotiable Rights at any time shall not affect Columbia's continuing rights of first negotiation and last refusal with respect



to any subsequent proposed license, sale or other disposition of the same or any other Negotiable Rights. In the event Columbia exercises any Sale Rights Option (an "Exercised Option"), LicensorFairhill shall not submit to Columbia any other offer with respect to any of the Negotiable Right(s) that are the subject of the Exercised Option in the country or countries covered by the Exercised Option until after the expiration of one (1) year from the termination date of Columbia's rights pursuant to the license Columbia acquired upon its exercise of the Exercised Option and, during said period, LicensorFairhill shall not use said Negotiable Right(s), nor shall LicensorFairhill license or lease said rights to others. If Columbia exercises any Sale Rights Option, LicensorFairhill shall execute and deliver to Columbia such further instruments and documents as may be necessary to vest in Columbia each and all of the rights so acquired by it, although LicensorFairhill’s failure to do so shall not adversely affect the vesting of rights.

12.5 Termination Right. If at any time LicensorFairhill is deemed to have any right to terminate any or all of the Distribution Rights or other interest under copyright granted or to be granted to Columbia hereunder pursuant to any provision of the copyright laws of the United States or any other copyright or similar or analogous laws, rules or regulations from time to time in effect in any jurisdiction of the world ("Termination Right") or if by operation of law or otherwise any of the Distribution Rights are deemed to have revested in LicensorFairhill (or any of its successors), and if LicensorFairhill (or its statutory representatives) ("Terminating Party") exercises any such Termination Right or acquires any Distribution Rights or other copyright interest by operation of law or otherwise, the Terminating Party shall notify Columbia thereof in writing within the time required for the giving of such notice under applicable law, and Columbia shall have the rights of first negotiation and last refusal, in accordance with the terms of Sections 12.1 and 12.3, above, with respect to the reacquisition of any or all of the Distribution Rights or other copyright interest so terminated or revested (the "Negotiable Rights"), prior to the Terminating Party's exercise, disposition or utilization of any such Distribution Rights.

13. DEFAULT

13.1

.

Events of Default

13.1.1 Any failure, refusal or neglect of LicensorFairhill to perform any of its material obligations under this Agreement, including but not limited to, LicensorFairhill’s obligation to effect Delivery of the Picture to Columbia on or before the Delivery Date in accordance with the terms, conditions, requirements and specifications of this Agreement, or any material breach by LicensorFairhill of, or any material inaccuracy on LicensorFairhill’s part with respect to, any representation or warranty or any breach of any other material term or provision of this Agreement; or

. The following shall each constitute an “Event of Default”:

13.1.2 The adjudication of LicensorFairhill as a bankrupt, or the filing of a petition by LicensorFairhill for (or consent by LicensorFairhill to) any relief under any bankruptcy or other debtor’s relief act, or the appointment of a receiver, liquidator, trustee or



custodian for all or a substantial part of LicensorFairhill’s assets (whether or not at the petition of LicensorFairhill) not discharged within ninety (90) days.

13.2 Cure

13.3

. No act or omission hereunder shall constitute an Event of Default or breach of this Agreement unless the non-defaulting party shall first notify the other in writing setting forth such alleged breach or default, and the defaulting party shall not cure the same within thirty (30) days after receipt of such notice.

Columbia’s Right to Terminate

13.4

. If at any time an Event of Default shall occur by LicensorFairhill, Columbia shall have the right, exercisable in its sole discretion at any time thereafter, in addition to all of its other rights and remedies hereunder, to terminate this Agreement by notice in writing to such effect to LicensorFairhill.

Effect of Termination

13.5

. If Columbia terminates this Agreement pursuant to Columbia’s right to do so, as set forth herein, except as otherwise specifically provided herein, both parties shall be released and discharged from all further obligations under this Agreement. Notwithstanding the foregoing, (i) Columbia shall have all of its rights and remedies at law and in equity, and (ii) termination of the Agreement shall not affect Columbia’s rights of Last Refusal with respect to a rejected Picture pursuant to Section 16 below. For the avoidance of doubt, notwithstanding any termination of this Agreement by either party for any reason whatsoever, the Distribution Rights shall remain vested in Columbia until Columbia has indefeasibly recouped an amount equal to the sum of the Distribution Expenses in full.

Rights and Remedies 13.6. Subject to Section below, all rights and remedies granted to each party hereunder are cumulative and the exercise of one shall not limit or affect a party’s right concurrently or subsequently to exercise any other right or remedy. Each party’s rights and remedies hereunder shall be in addition to such other rights or remedies as Columbia may have at law, in equity, under this Agreement or otherwise.

13.6 Injunctive and Equitable Relief

14.

. The rights and remedies of LicensorFairhill or any party transferring rights or rendering services in connection with the Picture, in the event of any breach of any provision of this Agreement by Columbia, including, without limitation, any provision hereof relating to credit, shall be limited to the right to recover damages, if any, in an action at law, and in no event shall LicensorFairhill or any such party be entitled by reason of any such breach to terminate or rescind this Agreement or Columbia’s rights with respect to the Picture or to enjoin or restrain or otherwise interfere with Columbia’s distribution or exhibition of the Picture in the Columbia Territory during the Distribution Term, or Columbia’s use, publication or dissemination of any advertising issued in connection with the Picture.

WARRANTIES AND INDEMNITIES

14.1

.

LicensorFairhill’s Warranties. With respect to the Picture, LicensorFairhill warrants and represents that:



14.1.1 LicensorFairhill has the right to enter into and perform the obligations set forth in this Agreement and to grant and to assign to Columbia all of the rights, licenses and privileges granted and assigned to Columbia hereunder.

14.1.2 Subject only to the terms of this Agreement and such limitations in agreements with third parties of which Columbia has been notified in writing, Columbia shall have all rights in and to all literary, dramatic, musical or other material or services utilized in the production of the Picture and the results and proceeds of all thereof (including, without limitation, so-called “name and likeness” rights of all persons rendering services and/or granting rights in connection with the Picture) required for Columbia’s full and unfettered exercise and enjoyment of all Distribution Rights of Columbia hereunder within the Columbia Territory pursuant to the terms of this Agreement.

14.1.3 Except for the Permitted Encumbrances, there are, and will be, no claims, liens, encumbrances, limitations, restrictions or rights of any nature in or to the Picture or any part thereof which can, will or might impair or interfere with the rights of Columbia hereunder.

14.1.4 The Picture and each and every part thereof, including, without limitation, the sound and music synchronized therewith and the underlying literary property, and the exercise by Columbia of any and all rights of Columbia hereunder with respect thereto, will not, to the best of LicensorFairhill’s knowledge in the exercise of due diligence, violate or infringe upon the rights of any third party, including, without limitation, the trademark, tradename, copyright, patent, literary, dramatic, music, artistic, “droit morale,” personal, civil or property right, right of privacy, or any other right or interest of any party, or constitute a libel or slander or defamation or invasion of privacy or unfair competition of or with respect to any party. [Licensor has either (i) obtained a legal opinion from Leopold, Petrich & Smith stating that releases are not required from any actual person who may be portrayed or depicted in the Picture, or (ii) has obtained releases (in form and substance satisfactory to Columbia) from all actual persons who may be portrayed or depicted in the Picture.]

14.1.5 Except for those obligations expressly assumed by Columbia in this Agreement (i.e., the obligation to account for and pay to certain third parties residuals in the Columbia Territory during the Distribution Term), all obligations of LicensorFairhill with respect to the Picture, and the production, distribution, and exploitation thereof, including, without limitation, all salaries, royalties, residuals, license fees, service charges, laboratory charges and the like, shall have been or shall be fully paid or discharged by LicensorFairhill in a timely fashion, and any and all such obligations payable prior to the Delivery of the Picture shall have theretofore been paid or discharged, but in no event later than Delivery of the Picture. In this regard, LicensorFairhill shall have paid all employer payroll deductions required to have been made to any and all union or guild pension, health or welfare plans and shall have prepared and submitted all reports and other information required in connection with the Picture.



14.1.6 The Picture shall be produced in accordance with all applicable laws, statutes, ordinances and requirements of all governmental agencies and regulatory bodies having jurisdiction with respect to the production of the Picture.

14.1.7 LicensorFairhill is duly organized and existing entities and currently in good standing under the laws of the state or country of their incorporation, and the execution and delivery of this Agreement does not, and will not, violate any provisions of its formation documents, its by-laws or any contract or other agreement to which it is a party.

14.1.8 LicensorFairhill shall obtain all synchronization and performing rights licenses (other than customary blanket licenses which broadcasters obtain from public performance societies with respect to exhibition on television) for use, in context (and with respect to score and any other compositions created for the Picture as a work for hire only, out-of-context), in the exhibition and sale of the Picture in all media now known or hereafter devised and in connection with the promotion and advertising of the Picture, of all of the music to be contained in the Picture, at no cost, at any time, to Columbia in its capacity as distributor.

14.1.9 Prior to Delivery of the Picture, neither the Picture nor any part thereof shall have been released, distributed or exhibited for any purpose or in any medium anywhere in the Columbia Territoryworld (except for customary limited tests and previews conducted by Columbia or film festivals or other screenings which are approved in writing by Columbia).

14.1.10 The Approved Screenplay for the Picture was written by the writer(s) thereof and LicensorFairhill owns all right, title and interest therein. All contributions of all individuals engaged in connection with the Picture shall be a work-made-for-hire for LicensorFairhill, and subject to the terms of this Agreement, LicensorFairhill and Columbia shall own all right, title and interest therein as co-authors and co-copyright holders thereof.

14.1.11 There will be no impediment to Columbia’s use of the title of the Picture selected by LicensorFairhill in connection with the distribution of the Picture in the Columbia Territory and other exploitation of the Distribution Rights.

14.1.12 No claims, litigation or other proceedings have heretofore been asserted and/or brought and to the best of LicensorFairhill’s knowledge in the exercise of due diligence, no claims, litigation or proceedings are pending or threatened relating to the Picture, the Distribution Rights and/or to any of the other rights and privileges granted or to be granted to Columbia hereunder.

14.1.13LicensorFairhill is directly or indirectly the sole and exclusive owner of all copyrights, of the Distribution Rights and of all other rights and privileges granted or to be granted to Columbia hereunder, and LicensorFairhill has the full right, power and authority to make and perform this Agreement without obtaining the consent or approval of any person or entity.



14.1.14The Picture shall not depict, show nor unduly emphasize photography of any product, commodity or services which is a competitor of Columbia or Sony in such manner as to constitute any express or implied endorsement or promotion thereof (e.g., a product placement) without the prior written approval of Columbia.

14.2 Indemnity by LicensorFairhill. LicensorFairhill shall indemnify and hold harmless Columbia and its parents, subsidiaries and affiliates, and its and their officers, directors and employees (“Indemnitees”), from and against any and all claims, actions, damages, liability, costs and expenses (including, without limitation, reasonable outside attorneys’ fees whether or not in connection with litigation and court costs) (collectively, “Claims”) which any of them may sustain or suffer by reason of or relating to a breach of any of the covenants, agreements, representations or warranties of LicensorFairhill contained in this Agreement and/or LicensorFairhill’s development, production, distribution and/or exploitation of the Picture, except to the extent arising from a matter for which Columbia indemnifies LicensorFairhill pursuant to Section 14.3.1 below. If any third party files a claim against Columbia or any other Indemnitee hereunder, alleging facts which, if true, would be subject to LicensorFairhill’s indemnity hereunder, Columbia shall notify LicensorFairhill in writing of such claim and LicensorFairhill shall have the right to provide defense with counsel of LicensorFairhill’s choice (subject to Columbia’s reasonable approval of such counsel). If LicensorFairhill does not timely provide such approved defense, Columbia and any such Indemnitee shall be entitled to representation by the counsel of its choice in such action and the reasonable cost thereof (if outside counsel) shall be included in LicensorFairhill’s indemnity hereunder. Notwithstanding the foregoing, in connection with any third party claim alleging facts which, if true, would be subject to LicensorFairhill’s indemnity hereunder, Columbia shall have the right, but not the obligation, to defend such claim on behalf of itself and (if applicable) LicensorFairhill at Columbia’s own expense; provided, that if Columbia at any time determines in good faith, based upon such information as may then be available to Columbia, that there has been an actual breach of LicensorFairhill’s representations and warranties hereunder, Columbia may discontinue its defense of LicensorFairhill, as applicable, with respect to such claim. If Columbia undertakes LicensorFairhill’s defense in connection with any such claim: (i) LicensorFairhill shall cooperate fully with Columbia and comply with Columbia’s reasonable instructions in connection with the defense thereof; (ii) Columbia shall control the defense of any such claim and following good faith, meaningful consultation with LicensorFairhill, Columbia shall have the right to dispose of and/or settle such claim as Columbia deems appropriate; and (iii) LicensorFairhill shall not compromise or settle any such claim without Columbia’s prior written consent. LicensorFairhill may have its own counsel present, at LicensorFairhill's sole expense, but Columbia shall have the sole right to control the legal defense of any such claim, including the right to select counsel of its choice and to compromise or settle any such claim. Columbia shall not, as part of any settlement, make an admission of liability on behalf of LicensorFairhill. Columbia shall notify LicensorFairhill if Columbia intends to settle any claim on behalf of both Columbia and LicensorFairhill. If LicensorFairhill advises Columbia that LicensorFairhill does not wish Columbia to settle the claim against LicensorFairhill, and if Columbia is able to consummate such settlement for itself without settling the claim against LicensorFairhill on a basis which is no less favorable to Columbia than if the claim against both



Columbia and LicensorFairhill were settled concurrently, and if not settling the claim against LicensorFairhill would not materially adversely affect any of Columbia's rights in any way, then Columbia shall not settle such claim against LicensorFairhill, but shall have no further obligation to defend or indemnify LicensorFairhill in connection with such claim. LicensorFairhill shall not, without the prior written consent of Columbia, do or fail to do any act or thing which could reasonably be foreseen to adversely affect the Distribution Rights of Columbia. In addition to any and all rights and remedies granted to Columbia hereunder, Columbia shall have the right to set off against any monies payable to LicensorFairhill hereunder the amount of any such liability, damage, cost or expenses which are subject to LicensorFairhill’s indemnity hereunder.

14.3 Representations/Indemnity By Columbia

14.3.1 Columbia represents that it has the right to enter into this Agreement, Columbia is a duly organized and existing corporation and is currently in good standing under the laws of the state or country of its incorporation, and the execution and delivery of this Agreement do not, and will not, violate any provisions of its formation documents, its by-laws or any contract or other agreement to which it is a party.

.

14.3.2 Columbia shall indemnify and hold harmless LicensorFairhill and its parents, subsidiaries and affiliates, and its and their officers, directors and employees (“Indemnitees”), from and against any and all Claims, which any of them may sustain or suffer arising out of or relating to (A) any breach of any of the covenants, agreements, representations or warranties of Columbia contained in this Agreement, except to the extent arising or resulting from any breach or alleged breach of any of the covenants, agreements, representations or warranties of LicensorFairhill contained in this Agreement (provided that if, pursuant to Section 14.1.2 above, Columbia elects to defend a claim alleging facts which, if true, would be subject to LicensorFairhill’s indemnity hereunder, Columbia shall be responsible for its own attorneys’ fees incurred in connection with defending such claim), (B) any materials supplied by Columbia, and (C) Columbia’s exploitation of the Picture, except to the extent arising from a matter for which LicensorFairhill indemnifies Columbia pursuant to Section 14.2. above. If any third party files a Claim against LicensorFairhill or any other Indemnitee hereunder, alleging facts which, if true, would be subject to Columbia’s indemnity hereunder, LicensorFairhill shall notify Columbia in writing of such claim and Columbia shall have the right to provide defense with counsel of Columbia’s choice. If Columbia does not timely provide such defense, LicensorFairhill and any such Indemnitee shall be entitled to representation by the counsel of its choice in such action and the reasonable cost thereof if outside counsel shall be included in Columbia’s indemnity hereunder.

15.

15.1 LicensorFairhill represents, warrants, and agrees that neither it nor any person or entity acting on its behalf or under its control or direction will make any payment, offer to pay, promise to pay, or authorize, or act in furtherance of, any payment or exchange of money or anything of value, directly or indirectly, to any “Government Official” (as defined below) in

FOREIGN CORRUPT PRACTICES / ANTI-BRIBERY.



order to obtain or retain business for LicensorFairhill or Columbia or to secure any improper business advantage for LicensorFairhill or Columbia. For purposes hereof, “Government Official” refers to: (i) any director, officer, employee, appointee or official representative of a government (or department, agency, entity, instrumentality or branch of a government, including the legislative, executive and judicial branch) or of a public international organization; (ii) any political party or party official; (iii) any candidate for political or judicial office; or (iv) any official of local government (including regional/county-level government). An “instrumentality of government” refers to any entity owned or controlled by the government; therefore, any director, officer, employee or official representative of a state-owned company is a “Government Official”.

15.2 LicensorFairhill represents, warrants and agrees that no Government Official has or will have any legal, financial or beneficial interest in the Picture or this Agreement or any payments from the Approved Budget or otherwise made by LicensorFairhill or any person or entity acting on LicensorFairhill’s behalf in connection with the Picture, or payments by Columbia to LicensorFairhill hereunder, without the prior written consent of Columbia.

15.3 LicensorFairhill agrees that it will not use any subagents in connection with the production of the Picture or this Agreement without the prior written consent of Columbia.

15.4 LicensorFairhill will promptly inform Columbia if it violates any of the foregoing provisions or becomes aware of any improper payment to a Government Official in connection with the Picture or this Agreement.

15.5 Notwithstanding any other provisions to the contrary, Columbia may withhold payments under this Agreement and/or suspend or terminate this Agreement (without any one or more of such actions constituting a waiver of any right or remedy available to it under this Agreement or otherwise), without liability, at any time upon learning information giving it a reasonable belief that LicensorFairhill or anyone acting on LicensorFairhill’s behalf, or may have caused Columbia to violate, the Federal Corrupt Practices Act or any applicable anti-bribery laws.

15.6 LicensorFairhill represents, warrants and agrees that none of its owners, key employees, officers or agents is a Government Official.

16. SUBSEQUENT PRODUCTIONS

16.1

. Columbia’s rights with respect to Subsequent Productions for the Picture shall be subject to the following:

Subsequent Productions Defined. “Subsequent Production” means a sequel or any remake, prequel, or other audio-visual derivative work of any nature, irrespective of the intended medium of exploitation (e.g., theatrical, television, direct-to-dvd, etc.) and irrespective of the medium of production (i.e., including both live-action and animated programs), which is (a) financed by Annapurna or an affiliated entity, and (b) either (i) has a story which is the same



as (or a continuation of) the story of the Picture, and/or (ii) incorporates any of the principal characters from the Picture, and/or (iii) uses a title which indicates it is a Subsequent Production of the Picture (e.g., “__________ 2”) and/or (iv) is otherwise sold or promoted as a sequel to or any remake or subsequent production of the Picture.

16.2 Subsequent Productions

17.

. Provided that Columbia is not in breach or default of any of its material obligation under this Agreement, if LicensorFairhill, Annapurna (or any of their respectiveits affiliates, assignees, designees or successors-in-interest) intends to develop and/or produce a Subsequent Production which is intended to be a theatrical motion picture or direct-to-video production, LicensorFairhill or Annapurna shall (or shall cause the producer or financier of such Subsequent Production to) submit the script, budget, principal cast, director, contingent compensation and any other then-existing material information for such Subsequent Production, and Columbia shall have the option, exercisable by written notice given within 30 days after Columbia's receipt of such notice, right to co-finance such Subsequent Production and exercise all Distribution Rights with respect to such Subsequent Production for the Columbia Teritory on the same term as provided for herein (except that all provisions of this Agreement requiring the engagement of any particular personnel or the release of the Picture on a particular date or the expenditure of a particular sum of money (or prohibiting the expenditure of more than or less than a particular sum) in connection with the production or distribution of the Picture shall be disregarded in applying the terms of this Agreement to a Subsequent Production). If Columbia declines to exercise the foregoing option, Columbia shall thereupon have rightss of First Negotiation and First Refusal (as set forth in Paragraphs 12.1 and 12.2 above, provided that Columbia shall be entitled to match any third party offer if any single material financial term contained in any such third party offer that LicensorFairhill is willing to accept is less favorable to LicensorFairhill when compared to such term contained in LicensorFairhill’s last written offer to Columbia during the first negotiation period) with respect to the possible co-financing of such Subsequent Production and/or with respect to the possible acquisition of to acquire the Distribution Rights in the Columbia Territory for the Distribution Term for such Subsequent Production with respect to either (i) the Columbia Territory, (ii) substantially the entire Fairhill Territory in a single or related transactions, or (ii) substantially the entire world. LicensorFairhill shall not submit a Subsequent Production to Columbia earlier than one (1) year after the initial theatrical release of the Picture. If Columbia does not acquire distribution rights for a theatrical Subsequent Production as set forth above, then LicensorFairhill shall not be obligated to submit subsequent theatrical Subsequent Productions to Columbia.

SECURITY INTEREST. In order to secure LicensorFairhill’s performance of its obligations under this Agreement and the Distribution Rights, LicensorFairhill hereby grants to Columbia a continuing lien and security interest in and to the Distribution Rights granted herein to the Picture and, solely to the extent necessary for Columbia to exercise the Distribution Rights, any and all underlying materials or properties acquired, produced, and/or created in connection with the Picture, other than material created solely in connection with the LicensorFairhill Territory, whether now owned or hereafter acquired by LicensorFairhill directly or indirectly and wherever situated, and any results, proceeds or products therefrom, including without limitation, the physical materials specified in the Delivery Schedule, the screenplay, original music composed for the Picture, and all other elements thereof or pertaining thereto



(collectively, the “Collateral”). For the avoidance of doubt, such security interest does not extend to any rights reserved by LicensorFairhill. Columbia shall have all the rights of a secured party under the California Commercial Code and the right to pursue and exercise any and all remedies available to a secured party at law, in equity or otherwise. This security interest shall commence on the date hereof and shall continue throughout the world until expiration of the Distribution Term, as the Distribution Term may be extended hereunder, and shall be senior to all other security interests, liens, pledges, charges and encumbrances, it being understood that the IPA shall govern the priority of Columbia’s security interest vis-à-vis the Permitted Encumbrances. In order to evidence further Columbia’s security interest, LicensorFairhill shall execute and deliver to Columbia any and all documents reasonably consistent herewith which Columbia may deem reasonably necessary or desirable, including without limitation any and all customary security documents as required under the Uniform Commercial Code of California, and/or any other state designated by Columbia. LicensorFairhill agrees to execute such other and further documents, including but not limited to, copyright mortgages, laboratory access letters, the Security Agreement and Mortgage of Copyright attached hereto as Exhibit “C”, other security documentation reasonably required by Columbia and any such other document as Columbia may reasonably require to perfect, protect or evidence the foregoing security interest. In the event LicensorFairhill fails to so execute and deliver such documents within five (5) business days following Columbia’s written request therefor, solely for such purposes LicensorFairhill hereby appoints Columbia as its true and lawful attorney-in-fact (it being acknowledged that such appointment is irrevocable and coupled with an interest) with full power of substitution and delegation to make, execute, deliver and file any and all such documents (Columbia shall provide a copy to LicensorFairhill of any such document signed on LicensorFairhill’s behalf) and to enforce and protect Columbia’s rights hereunder and to prevent the infringement thereof, and to litigate and collect and receive all damages, penalties and other recoveries arising from any such infringement and, in Columbia’s sole discretion, to join LicensorFairhill as a party plaintiff or defendant in any such action or proceeding. LicensorFairhill shall cooperate with Columbia in connection with any suit or action threatened or instituted by or against Columbia relating to any rights granted or to be granted to Columbia, to the full extent of LicensorFairhill’s ability. Upon an Event of Default (as defined above), Columbia shall have the right to proceed against the Collateral, and to exercise any and all rights and remedies of a secured creditor, as Columbia shall determine.

18. INSURANCE

18.1

.

E & O Coverage. LicensorFairhill agrees to obtain and maintain, at its sole cost and expense, for the benefit of Columbia, a policy of errors and omissions insurance placed with an insurance company reasonably acceptable to Columbia, which policy shall (i) be delivered to Columbia not later than the commencement of principal photography of the Picture; (ii) have limits of liability not less than Five Million Dollars ($5,000,000) per each claim or occurrence (with no exclusions whatsoever and with such deductible amounts as are customary and approved in writing by Columbia, Columbia hereby approving a $25,000 deductible) and Five Million Dollars ($5,000,000) in the aggregate; (iii) pursuant to its terms provide primary errors and omissions coverage and not contributory coverage, notwithstanding any other errors and omissions insurance which LicensorFairhill and/or Columbia may obtain or maintain, (iv) be



maintained in full force and effect by LicensorFairhill in the Columbia Territory, at LicensorFairhill’s sole cost and expense, for a period of 3 years following completion of Delivery, it being understood that in the event of cancellation or non-renewal of said policy of LicensorFairhill’s errors and omissions insurance, LicensorFairhill shall obtain and maintain a substitute policy therefor (and promptly deliver to Columbia evidence of the maintenance of such substitute policy), the terms of which substitute policy shall be in accordance with the provisions of this Section 18, (v) cover all means and methods of exhibition of the Picture; (vi) provide that it is not subject to cancellation, except upon thirty (30) days prior written notice to LicensorFairhill (and if any such errors and omissions policy is canceled, LicensorFairhill shall cause it to be replaced promptly with another policy which complies with the requirements of this Section). LicensorFairhill shall cause Columbia, its parent, subsidiaries and related companies, its licensees and affiliates and its officers, directors, agents and employees, representatives and assigns to be named as additional insureds and joint loss payee and such addition shall be endorsed by the insurance carrier and acknowledged by the underwriter (individually and collectively, the “Additional Insureds”) and will also indicate it is primary and any insurance maintained by the Additional Insureds is non-contributory.

18.2 General Liability

18.3

. LicensorFairhill shall cause Columbia to be named as an additional insured and joint loss payee under the general liability and “production package” insurance policies for the Picture and shall promptly after signature hereof provide Columbia with certificates of such insurance.

Claims and Recoveries

19.

. If any claim shall be made against LicensorFairhill and/or Columbia in respect of any of the insurance policies for the Picture or any rights relating thereto, the party receiving such claim shall forthwith advise the other party in writing in respect thereof and LicensorFairhill and Columbia shall cooperate with one another and the insurance carriers in respect of such claim. Any recovery under any insurance policy shall be paid to Columbia and/or LicensorFairhill as their interests appear therein.

SECURITY REQUIREMENTS

20.

: LicensorFairhill and Columbia agree to be bound by and adhere to the procedures and requirements set forth in Exhibit “D” attached hereto and incorporated herein by this reference, which delineates certain security steps which all telecine/mastering vendors must follow with respect to work performed in connection with the Picture.

RIGHTS UNIQUE

21.

. LicensorFairhill acknowledges and agrees that the rights granted to Columbia hereunder are of a special, unique and extraordinary nature, the breach, loss or impairment of which would cause irreparable harm to Columbia, and accordingly 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, Columbia shall be entitled to seek injunctive relief against LicensorFairhill, and against each and every one of its predecessors and successors and assigns with respect to the rights granted to Columbia hereunder to prevent any such breach, loss or impairment.

GENERAL.



21.1. Confidentiality

21.2

. The terms of this Agreement are and shall remain confidential, except for incidental publicity references and disclosure to attorneys, accountants, other professional advisors. Neither party hereto shall, nor shall either party authorize any person, firm or corporation to, disclose any information relating to this Agreement (or any terms hereof) or development or production of the Picture. Information shall not be deemed confidential hereunder if (i) previously became or becomes public due to no fault of the disclosing party (ii) was previously known to the disclosing party or (iii) is required to be disclosed by applicable law, regulation, government compulsion or legal process.

Licenses and Permits, Etc

21.3

. LicensorFairhill shall duly and promptly apply for and procure all necessary consents, licenses and permits which may be required from any governmental agencies in connection with this Agreement and the production of the Picture, including, without limitation, the qualification of the Picture for “nationality” of the country (or countries) of production, for all aid, subsidies, licenses, quota and other benefits resulting or accruing therefrom, all work permits, immigration requirements and all permits required for the export of the Picture from the place of production and the import thereof into any portion of the Columbia Territory for the purpose of effecting Delivery hereunder.

Assignment/Licensing

21.3.1.

.

By LicensorFairhill

21.3.2

. LicensorFairhill shall have the right to assign this Agreement and/or all of its rights hereunder, and/or to delegate all of its duties hereunder at any time and from time to time, in whole or in part, and LicensorFairhill shall thereupon be released and discharged of and from any and all of its duties, obligations and liabilities arising under this Agreement, if such assignment is to: (A) a person or entity into which LicensorFairhill merges or is consolidated, (B) a person or entity which acquires all or substantially all of LicensorFairhill’s business and assets, or (C) a person or entity which is controlled by, under common control with, or controls LicensorFairhill, and such assignee or delegee assumes in writing the performance of all obligations of LicensorFairhill hereunder to be performed from and after such assignment. LicensorFairhill may also assign its right to receive payments of the Defined Gross Proceeds and/or Distributable Receipts to which LicensorFairhill may be entitled hereunder, provided that LicensorFairhill and the assignee(s) have executed any confirming documentation reasonably requested by Columbia and with respect to the Picture, Columbia shall not be required to make payment Licensor’s Gross Receipts to more than one payee at any time), no rights hereunder shall devolve by operation of law or otherwise upon any receiver, trustee or assignee of LicensorFairhill and LicensorFairhill shall not assign, subcontract or delegate any of its production obligations hereunder.

By Columbia. Columbia shall have the right to assign this Agreement and/or all of its rights hereunder, and/or to delegate all of its duties hereunder at any time and from time to time, in whole or in part, and Columbia shall thereupon be released and discharged of and from any and all of its duties, obligations and liabilities arising under this Agreement, if such assignment is to: (A) a person or entity into which Columbia merges or is consolidated, (B) a person or entity which acquires all or substantially all of Columbia’s business and assets, (C) a person or entity which is controlled by, under common control with, or controls



Columbia, (D) any major motion picture company or (E) any similarly financially responsible entity and such assignee or delegee assumes in writing the performance of all obligations of Columbia hereunder to be performed from and after such assignment. Notwithstanding the foregoing, Columbia shall not assign the theatrical distribution rights to the Picture in the Columbia Territory, and shall not sublicense such rights except in those territories (e.g. non- for which Columbia customarily sublicenses at the time with respect to motion pictures produced by Columbia and its affiliates.

21.3.3 Licensing. Except as otherwise specifically provided herein, Columbia shall have the unrestricted right to assign or license to any entity, on either an exclusive or non-exclusive basis, or otherwise exploit, any or all of their respective rights, licenses or privileges hereunder by such manner and means and on such terms and conditions as Columbia deems appropriate, including, without limitation, the assignment or licensing of any exhibition, performance, broadcasting, or distribution rights to exhibitors, broadcasters, subdistributors, consumers, end-users and other persons and the granting to other entity of the right to further license or assign the rights granted to them by Columbia. Nothing contained in this Section is intended to limit or restrict in any manner the full and unrestricted exercise by Columbia (and its licensees) of its rights as Columbia deems appropriate to exploit the Picture and generate revenues therefrom, and this Section is intended by the parties to be a specific consent by LicensorFairhill to such licensing and assignment (and further licensing and assignment by the other and each of their respective assignees and licensees) and to overcome any restrictions on licensing or assignment of any or all of Columbia’s rights arising under the case Gardner v. Nike

21.4.

.

Supplemental Documents

21.5.

. LicensorFairhill will from time to time, upon Columbia’s request, execute, acknowledge and deliver such instruments, consistent with the terms hereof, as may be reasonably necessary and proper to carry out and effectuate the purposes and intent of this Agreement, including, without limitation, any instruments necessary to evidence, maintain, effectuate or defend any and all of the rights of Columbia under any provision of this Agreement. Should LicensorFairhill fail to execute, acknowledge or deliver any such supplemental document within five (5) business days following Columbia’s written request (including, without limitation, any document renewing and/or extending the copyright in the Picture), Columbia shall have, and is hereby granted solely for this purpose, the rights for and on behalf of LicensorFairhill, as LicensorFairhill’s attorney-in-fact, to execute, acknowledge and deliver such document (Columbia shall provide a copy to LicensorFairhill of any such document signed on LicensorFairhill’s behalf). LicensorFairhill hereby agrees that the foregoing appointment is irrevocable and constitutes a power coupled with an interest.

No Partnership or Joint Venture. Nothing herein contained shall constitute a partnership between, or joint venture by, the parties hereto or constitute either party the agent or the other. Neither party shall hold itself out contrary to the terms of this Section, and neither party shall become liable for the representation, act or omission of the other contrary to the provisions hereof. No officer, employee or representative of either party has any authority to make any representation or promise not contained in this Agreement, and each party acknowledges that it has not executed this Agreement in reliance upon any promise or



representation not expressly set forth in this Agreement. Except as specifically set forth herein (i.e., expiration of the Distribution Term), neither the expiration of this Agreement nor any other termination or cancellation thereof shall affect Columbia’s ownership of the Distribution Rights or any other rights or privileges of Columbia hereunder, or any warranty or undertaking of LicensorFairhill under this Agreement, and the parties’ respective representations and warranties hereunder shall survive any such expiration, termination and/or cancellation. Wherever Columbia is entitled in this Agreement to act as LicensorFairhill’s attorney-in-fact, said appointment shall be a power coupled with an interest and Columbia shall have full power of delegation and substitution.

21.6 Notices

ANNAPURNA FILMS, INC. FAIRHILL LLC

. All notices, or other documents (collectively “notices”) which any party shall be required to or shall desire to give to the other hereunder shall be in writing, unless otherwise specified, and shall be addressed or directed to the party intended to receive the same at its address provided for herein. All such notices shall be given in one of the following ways: (i) by personal delivery, (ii) by United States mail, postage prepaid, airmail (if available), (iii) by delivery, toll prepaid to a telegraph or cable company or (iv) by transmittal by any electronic means whether now known or hereafter developed, including, without limitation, telex, telecopier or laser transmissions, able to be received by the party intended to receive notice. If so delivered, mailed, telegraphed, cabled or transmitted, each such notice shall, except as herein expressly provided, be conclusively deemed to have been given when personally delivered or on the next business day after the date of delivery to the telegraph or cable company or on the next business day in the place of receipt when electronically transmitted or on the third business day following the date of mailing if mailed within the same country or on the tenth business day following the date of mailing if mailed internationally, as the case may be. Any such notice shall be given to LicensorFairhill addressed as follows:

9262 Nightingale Drive Los Angeles, CA 90069 Attn: Megan Ellison and Ted Schipper

With a copy to: [Ziffren Brittenham LLP 1801 Century Park West Los Angeles, CA 90067 Attention: Skip Brittenham and Julian Zafjen]

and notices to Columbia shall be addressed as follows: COLUMBIA PICTURES INDUSTRIES, INC. 10202 W. Washington Blvd. Culver City, California 90232 Attention: Executive Vice President, Legal Affairs



Facsimile: (310) 244-1512

21.7 GOVERNING LAW, LEGAL PROCEEDINGS AND REMEDIES

21.7.1 THE SUBSTANTIVE LAWS (AS DISTINGUISHED FROM THE CHOICE OF LAW RULES) OF THE STATE OF CALIFORNIA AND THE UNITED STATES OF AMERICA APPLICABLE TO CONTRACTS MADE AND PERFORMED ENTIRELY IN CALIFORNIA SHALL GOVERN (i) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, (ii) THE PERFORMANCE BY THE PARTIES OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER, AND (iii) ALL OTHER CAUSES OF ACTION (WHETHER SOUNDING IN CONTRACT OR IN TORT) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TERMINATION OF THIS AGREEMENT.

.

21.7.2 The parties hereto agree that any and all disputes or controversies of any nature between them arising at any time (whether or not relating to the Picture or to any of the matters referred to in clauses (i), (ii) and/or (iii) of Section 1921.7.1 above), shall be determined by binding arbitration in Los Angeles under the rules of JAMS, including appellate arbitration rules (or, with the agreement of the parties, ADR Services) before a single neutral arbitrator (“Arbitrator”). The Arbitrator shall be an attorney with at least ten (10) years experience in the motion picture industry or a retired judge with at least ten (10) years experience in the motion picture industry (e.g., the arbitrators designated in the DGA, SAG or WGA collective bargaining agreements or persons having comparable qualifications) and shall be mutually agreed upon by Columbia and LicensorFairhill. If Columbia and LicensorFairhill are unable to agree on an Arbitrator, the Arbitrator shall be appointed by JAMS. The fees of the Arbitrator shall be borne equally by Columbia and LicensorFairhill, provided that the Arbitrator may require that such fees be borne in such other manner as the Arbitrator determines is required in order for this arbitration clause to be enforceable under applicable law. The parties shall be entitled to conduct discovery in accordance with Section 1283.05 of the California Code of Civil Procedure, provided that (a) the Arbitrator must authorize such all discovery in advance based on findings that the material sought is relevant to the issues in dispute and that the nature and scope of such discovery is reasonable under the circumstances, and (b) discovery shall be limited to depositions and production of documents unless the Arbitrator finds that another method of discovery (e.g., interrogatories) is the most reasonable and cost efficient method of obtaining the information sought. There shall be a record of the proceedings at the arbitration hearing and the Arbitrator shall issue a Statement of Decision setting forth the factual and legal basis for the Arbitrator’s decision. If neither party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the Arbitrator’s decision shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Superior Court, which may be made ex parte, for confirmation and enforcement of the award. If either party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the award of the Arbitrator shall be appealed to three (3) neutral arbitrators (the “Appellate Arbitrators”), each of whom shall have the same qualifications and be selected through the same procedure as the Arbitrator. The appealing party shall file its appellate brief within thirty (30) days after its written notice requesting the appeal



and the other party shall file its brief within thirty (30) days thereafter. The Appellate Arbitrators shall thereupon review the decision of the Arbitrator applying the same standards of review (and all of the same presumptions) as if the Appellate Arbitrators were a California Court of Appeals reviewing a judgment of the California Superior Court, except that the Appellate Arbitrators shall in all cases issue a final award and shall not remand the matter to the Arbitrator. The decision of the Appellate Arbitrators shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Superior Court, which may be made ex parte, for confirmation and enforcement of the award. The party appealing the decision of the Arbitrator shall pay all costs and expenses of the appeal, including the fees of the Appellate Arbitrators and the reasonable outside attorneys’ fees of the opposing party, unless the decision of the Arbitrator is reversed, in which event the expenses of the appeal shall be borne as determined by the Appellate Arbitrators. The Arbitrator shall have the power to enter temporary restraining orders, preliminary and permanent injunctions, except to the extent that injunctive relief has been waived in any agreement between the parties. Prior to the appointment of the Arbitrator or, in the case of remedies beyond the jurisdiction of an arbitrator, at any time, either party may seek pendente lite relief in a court of competent jurisdiction in Los Angeles County, California without thereby waiving its right to arbitration of the dispute or controversy under this paragraph. All arbitration proceedings (including proceedings before the Appellate Arbitrators) shall be closed to the public and confidential and all records relating thereto shall be permanently sealed, except as necessary to obtain court confirmation of the arbitration award. The provisions of this Section 21.7.2 shall supersede any inconsistent provisions of any prior agreement between the parties with respect to the Picture.

21.8. Non-Waiver; Severability

21.9.

. No waiver by LicensorFairhill or Columbia or any failure by the other to keep or perform any covenant or condition of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other covenant or condition except as specifically provided in this Agreement. Nothing contained in this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any statute, law, ordinance, order or regulation the latter shall prevail, but in such event any provision of this Agreement so affected shall be curtailed and limited only to the extent necessary to bring it within the legal requirements.

Columbia’s Remedies. All remedies accorded herein or otherwise available to Columbia shall be cumulative and no one such remedy shall be exclusive of any other. Without waiving any rights or remedies under this Agreement or otherwise, Columbia may from time to time recover, in one or more arbitration proceedings under Section 21.7.2 above, any damages (subject to Sections 21.11 and 21.12 below) arising out of any breach of this Agreement by LicensorFairhill and may institute and maintain subsequent arbitrations for additional damages (subject to Sections 21.11 and 21.12 below) which may arise from the same or other breaches. The commencement or maintaining of any such action or actions by Columbia shall not constitute an election on Columbia’ part to terminate this Agreement nor constitute or result in the termination of this Agreement unless Columbia shall expressly so elect by written notice to LicensorFairhill. The pursuit by Columbia of any remedy under this



Agreement or otherwise shall not be deemed a waiver of any other or different remedy which may be available under this Agreement or otherwise, either at law or in equity.

21.10. LicensorFairhill’s Remedies

21.11.

. The rights and remedies of LicensorFairhill in the event of any breach by Columbia of this Agreement or any of Columbia’s obligations hereunder shall be limited to LicensorFairhill’s right to recover damages (subject to Sections 21.11 and 21.12 below), if any, in one or more arbitration proceedings under Section 21.7.2 above, and LicensorFairhill hereby waives any right or remedy in equity, including without limitation any right to terminate, rescind or cancel this Agreement or any right granted to Columbia hereunder and/or to seek or obtain injunctive or other equitable relief with respect to any breach of Columbia’s obligations hereunder and/or to enjoin or restrain or otherwise impair in any manner the production, distribution, exhibition or other exploitation of the Picture, or any parts or elements thereof, or the use, publication or dissemination of any advertising in connection therewith.

Limitation on Damages

21.12

. To the maximum extent permitted by applicable law, no party hereto will be liable for, or have any obligation to pay to the other, consequential damages and/or special damages in connection with the breach of this Agreement, all of which are expressly excluded, and each of the parties hereto hereby waive any right to recover any such damages from any other party hereto.

Punitive Damages

21.13.

. The parties waive the right to such punitive damages and the arbitrator shall have no authority to award such damages.

Captions

21.14.

. The captions used in connection with the Sections and subparagraphs of this Agreement are inserted only for the purpose of reference. Such captions shall not be deemed to govern, limit, modify, or in any other manner affect the scope, meaning, or intent of the provisions of this Agreement or any part thereof, nor shall such captions otherwise be given any legal effect.

Entire Agreement

21.15

. This Agreement, together with the exhibits and schedules attached hereto, constitutes the entire understanding of the parties hereto and replaces any and all former agreements, understandings and representations relating in any way to the subject matter hereof. No modification, alteration or amendment of this Agreement shall be valid or binding unless it is in writing and signed by the party to be charged with such modification, alteration or amendment.

Counterparts/Copies. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Copies and facsimiles of this Agreement may be used for all purposes as an original.



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

COLUMBIA PICTURES INDUSTRIES, INC.

By:

Its: FAIRHILL, LLC By: ___________________________________________ Its: ___________________________________________

The undersigned consents to the foregoing Agreement and agrees to be bound by the provisions of Section 16 thereof relating to Subsequent Productions. ANNAPURNA FILMS, INC.

By: Its:

Formatted: Indent: Left: 0"

Formatted: Tab stops: 2.21", Left + 3.02",Left




EXHIBIT “B”

INSTRUMENT OF TRANSFER ANNPURNA FILMS, INC. ("LicensorFairhill"), for good and valuable consideration, hereby grants to COLUMBIA PICTURES INDUSTRIES, INC. ("Columbia") an undivided one-half (1/2) interest in and to all copyrights and trademarks relating to the the theatrical motion picture tentatively entitled "Foxcatcher” (the "Picture"). Fairhill and Columbia shall be deemed the joint author of the Picture and shall each own an undivided one-half interest in the Picture, and, to the extent necessary to exploit the Picture, all elements thereof including, without limitation, all copyrights and trademarks therein, and all renewals and extensions of copyright, all screenplays, music and all other elements of the Picture throughout the universe in perpetuity. In addition Columbia shall have the exclusive right to the Ddistribution and exploit Rights in and to the theatrical motion picture tentatively entitled "Untitled Eric Singer Picture” (the "Picture") the Picture, including without limitation, the right to exhibit, distribute, market, advertise, license or otherwise exploit the Picture by any and all means and media now known or hereafter devised throughout the Columbia Territory in perpetuity. for the Distribution Term. Subject to the aforesaid, Columbia will be empowered to bring, prosecute, defend and appear in suits, actions and proceedings of any nature, concerning any copyright in and to the Picture, or any infringement of such copyright or violation of any of the Distribution Rights licensed to Columbia herein. Any recovery of damages, penalties, costs or otherwise arising by reason of infringement of any such copyright(s) or violation of the Rights transferred to Columbia herein has been assigned, and shall be paid, to Columbia. This Instrument of Transfer is executed pursuant to and is subject to all the terms and conditions of the agreement (the "Agreement") dated as of May 16October 19, 2012 between LicensorFairhill and Columbia with respect to the Picture, and all capitalized terms used herein shall have the same meanings as provided in such Agreement. IN WITNESS WHEREOF, LicensorFairhill hereby executes the within Instrument of Transfer as of May 16, 2012.

FAIRHILL, LLCANNAPURNA FILMS, INC. By: __________________________ Its: _________________________





Exhibit “C”

SECURITY AGREEMENT AND MORTGAGE OF COPYRIGHT

AGREEMENT (“Security Agreement”) dated as of October 19May 16, 2012, as it may be amended from time to time, between FAIRHILL, LLCANNAPURNA FILMS, INC. (collectively, “Debtor”), on the one hand, and COLUMBIA PICTURES INDUSTRIES, INC. (“Secured Party”), on the other hand. 1. “PICTURE” The Picture is the theatrical motion picture presently entitled “FOXCATCHERUNTITLED ERIC SINGER PICTURE” (the “Picture”). 2. SECURITY INTEREST IN THE PICTURE (a) Grant: In order to induce Secured Party to enter into that certain agreement dated as of October 19May 16, 2012, between Debtor and Secured Party with respect to the Picture (as the same may be modified, amended or replaced, the “Agreement”), and to perform all of its obligations to Debtor thereunder and in order to insure that Debtor shall deliver the Picture or cause the Picture to be delivered to Secured Party and to secure Secured Party's rights under the Agreement (“Distribution Rights”) in the Picture and in consideration of various of Secured Party's agreements in connection with the exploitation of the Picture, and in order to induce Secured Party to enter into any applicable “Interparty Agreement” (as said term is defined below), Debtor hereby grants and assigns to Secured Party a continuing security interest in and copyright mortgage on all of Debtor's right, title and interest in and to the items listed in Paragraph 2(b) below, which items are hereinafter collectively referred to as “Collateral.” This security interest and copyright mortgage shall commence on the date of this Security Agreement, and shall continue throughout the “Distribution Territory” (as such term is used in the Agreement) in the Collateral during the “Distribution Term” (as such term is used in the Agreement) and shall be senior to all other security interests, liens, pledges, charges and encumbrances (except as otherwise provided for in Paragraph 3 below). (b) Collateral: The term “Collateral,” as used herein, includes all of the following both before and after complete “Delivery” (as defined in the Agreement) of the Picture has occurred:

(i) Distribution Rights: The continuing rights to exercise all of the rights granted to the Secured Party under the Agreement with respect to the Picture (the “Distribution Rights”), including, without limitation on the foregoing, the right to exclusively distribute and exhibit the Picture theatrically, non-theatrically, and via home video, video-on-demand, near video-on-demand, video disc (and all forms of video device rights), television (all forms), and airline in the Columbia Territory and the proceeds and products of the foregoing.



(ii) Physical Properties: Solely to the extent necessary for Secured Party to exercise the Distribution Rights, all positive and negative film and sound materials relating to the Picture required for “Delivery” of the Picture under the Agreement, whether now or hereafter acquired by Debtor, and wherever located, and the proceeds and products of the foregoing; (iii) Underlying Properties: Solely to the extent necessary for Secured Party to exercise the Distribution Rights in the Picture, all literary, musical, dramatic and other written materials created for the Picture or upon which the Picture is based or which are used in or in connection with the Picture, including, without limitation, rights in the screenplay and the underlying materials on which the screenplay is based, and (before complete Delivery, for any purpose, and following complete Delivery solely to the extent necessary to exercise the rights set forth in (i) above), and the proceeds and products of the foregoing; (a) Copyrights: All common law and statutory United States and Canada copyrights and the copyrights of any foreign jurisdictions in the Columbia Territory, renewals and extensions of copyright relating to the Picture, and (before complete Delivery, for any purpose, and following complete Delivery solely to the extent necessary to exercise the rights set forth in (i) above), and the proceeds and products of the foregoing; and (b) Contract Rights: All rights in all agreements and understandings (whether or not evidenced in writing) with third parties furnishing services and/ or rights relating to the production of the Picture or to any of the elements described in subparagraphs (ii) and (iii)(a) above, and any rights derived therefrom or relating thereto, and (before complete Delivery, for any purpose, and following complete Delivery solely to the extent necessary to exercise the rights set forth in (i) above), and the proceeds and products of the foregoing.

(c) Purpose of Grant: The security interest hereby granted to Secured Party is being granted to Secured Party to secure the performance of all of Debtor's obligations to Secured Party hereunder and under the Agreement and the continuing right of Secured Party to:

(i) Insure Delivery of Picture: Insure that Debtor shall complete “Delivery” (as defined in the Agreement) of the Picture to Secured Party; (ii) Exploitation of the Picture: Exploit, exhibit and distribute the Picture and the Distribution Rights in the manner set forth in the Agreement; and

(iii) Advances: Recoup all advances, if any, actually paid by Secured Party to or on behalf of Debtor and/or any third party designated by Debtor, as provided for in the Agreement, and to receive the Deferments set forth therein; and

(iv) Gross Proceeds: Receive, retain and own the amounts of Secured



Party's allocable portion of Gross Proceeds under the Agreement from the exercise by Secured Party of all rights in the Picture granted by Debtor to Secured Party in the Agreement and by Debtor in this Security Agreement.

(d) Events of Default: As used herein, the term “Event of Default” shall mean the occurrence of any of the following events with respect to the Picture:

(i) Debtor shall not make and complete Delivery of the Picture in accordance with the Agreement on or before the “Delivery Date”, if any, provided for in the Agreement.

(ii) Debtor shall perform any act, or shall fail to perform any act, the result of which act or failure shall be to materially impair, presently or prospectively, any of the Distribution Rights.

(iii) Debtor shall fail to fully pay, satisfy, perform or comply with any material obligation of Debtor under this Security Agreement relating to the Picture or under the Agreement (each, an “Obligation”) in a due and timely manner, or there shall otherwise be a material breach of or failure or default on any such Obligation.

(iv) The event that (A) Debtor is adjudicated a bankrupt, or (B) any action of any nature whatsoever (whether voluntary or involuntary) is taken for Debtor's relief under any bankruptcy, reorganization, receivership, liquidation, insolvency, compromise, arrangement or moratorium statute, law or regulation, whether now in force or hereafter enacted, or (C) any assignment is made for the benefit of Debtor's creditors, or (D) any petition (whether voluntary or involuntary) is made or filed for the appointment of a receiver, liquidator, trustee or custodian for any of Debtor's assets, or if any receiver, liquidator, trustee or custodian for any of Debtor's assets is appointed, and such petition or such receiver, liquidator, trustee or custodian is not withdrawn or discharged within 30 days from the date of filing, making petition or appointment, or (E) the Collateral or any portion thereof is attached or levied upon and such attachment or levy is not released within 10 days thereafter, or (F) Debtor is dissolved or its business is substantially terminated for any reason whatsoever.

(v) In the event that any of Debtor’s representations and warranties set

forth in this Agreement shall be false or misleading when made, or Debtor shall fail to timely, fully and completely perform and comply with each of Debtor’s covenants made under this Agreement.

(e) Remedies upon Default: Upon the occurrence of any Event of Default, Secured Party shall have all the rights and remedies of a secured party under the Uniform Commercial Code of the State of California, and all other rights and remedies under the applicable laws. Secured Party shall be entitled, upon the occurrence of any Event of Default, to exercise its remedies hereunder with respect to all or any part or parts of the Collateral, and from time to time with respect to different parts of the Collateral. If Debtor shall fail to make any



payment to any third party or do any act required herein or in the Agreement the Secured Party will have the right, but not the obligation and is hereby authorized, to make such payments and do such acts as the Secured Party deems necessary to preserve and/or protect its security interest in the Collateral, and to employ counsel and pay reasonable fees and expenses therefore, and Debtor agrees to pay immediately upon demand all sums so expended by the Secured Party, and Debtor's obligation to repay such sums shall be added to the Obligations secured by this Security Agreement.

(f) Further Documents: Debtor hereby agrees to execute, acknowledge and deliver to Secured Party concurrently with the execution of this Agreement, and at such time or times thereafter as Secured Party may in its reasonable discretion under the circumstances require, all notices, mortgages, mortgages and assignments of copyright, financing statements, continuation statements, security agreements, assignments, transfers, laboratory pledgeholder agreements and other documents and instruments as Secured Party shall request which are reasonably required to further evidence, perfect, effect, protect and/or enforce any or all of Secured Party’s liens, copyright mortgage and security interest in the Collateral and any and all of Secured Party’s rights as a secured party and copyright mortgagee hereunder (all of which documents and instruments shall be subject to the approval of the Debtor, which approval shall not be unreasonably withheld), and hereby authorizes Secured Party to file, register and/or record the same under the Uniform Commercial Code and/or the United States Copyright Act, and all other similar applicable laws of any state and any other jurisdiction where Secured Party deems such filing, registration and/or recordation to be necessary and/or appropriate. Debtor hereby irrevocably appoints and authorizes Secured Party, as Debtor’s attorney-in-fact (Debtor hereby acknowledging that such appointment is coupled with an interest and is irrevocable throughout the Term of the Agreement) to take all steps and/or execute such documents and instruments in Secured Party’s name and/or in the name of Debtor but for Secured Party’s use and benefit, as may be reasonably required under the circumstances for the purpose of further evidencing, perfecting, effecting, protecting and/or enforcing any or all of Secured Party’s liens, copyright mortgage and security interest in the Collateral and any and all of Secured Party’s rights as a secured party and copyright mortgagee hereunder in the event that Debtor fails to take any such steps within five (5) business days (subject to shortening to not less than three (3) business days if exigent circumstances exist) of any written request by Secured Party to do so.

(g) Rights of Secured Party under UCC: With respect to the security interest hereby granted to Secured Party, Secured Party and any of its assignees shall at all times have all of the rights, power and privileges of a secured party under the California Commercial Code as the same may be amended from time to time.

(h) Exercise of Rights: Secured Party or any of its assignees shall be entitled to exercise the rights granted hereunder with respect to the Collateral only if and when Debtor (or any person or entity acting on Debtor's behalf of in its place and stead or any person or entity which owns or controls, directly or indirectly, any portion of Debtor) terminates, attempts to terminate, disaffirms or attempts to disaffirm the Agreement and/or this Security Agreement in breach of either the Agreement or this Security Agreement or fails in any material way and at



any time to act as if the Agreement or this Security Agreement is in full force and effect.

(i) Termination Statement: Upon full and complete payment and performance or other satisfaction (as applicable) of each and every Obligation secured hereunder, upon Debtor's written request, Secured Party hereby agrees to sign and either deliver to Debtor or file with the appropriate government agency all documents necessary to record the termination of the security interest granted herein to Secured Party. 3. DEBTOR'S WARRANTIES AND REPRESENTATION.

Debtor confirms, warrants, represents and covenants to Secured Party; that (a) Debtor’s exact legal name is ___________, (b) is a limited liability company duly organized and validly existing and in good standing under the laws of the State of ______________, (c) Debtor has the right to enter into this Security Agreement and sign and deliver the Financing Statements to Secured Party, (d) no other security interest has been or will be granted by Debtor in the Collateral which is in or would in any way conflict or interfere with or have priority over the security interest herein granted by Debtor except for (i) liens required under applicable collective bargaining agreements, and (ii) liens to be granted to _______________________________ (“Bond Company”) as the completion guarantor of the Picture and _________________ (“Bank”) as the bank providing the production financing for the Picture, and which completion guarantor and bank liens shall be granted subject to the terms and conditions of any executed Interparty Agreement (“Interparty Agreement”) entered by Debtor, Bond Company, Bank, and Secured Party, (e) no agreements, understandings or other arrangements have been made or entered into by Debtor which are in or would in any way conflict or interfere with the rights granted by Debtor to Secured Party in this Security Agreement, the Financing Statements or in the Agreement, and (f) Debtor shall not change its name, or its state of organization, its type of organization, or conduct its business under a name other than its present name unless it (i) gives Secured Party notice of its intent to change its name, or its state of organization, or its type of organization, or conduct its business under another name, at least ten (10) business days before it does so, and (ii) shall have concurrently with such notice delivered to Secured Party all such new, appropriate Uniform Commercial Code financing statements and other documents and instruments (executed and notarized, if applicable) as Secured Party shall reasonably require in order for Secured Party to continue the perfection and relative priority of the security interests granted hereunder. 4. GOVERNING LAW This Security Agreement shall be governed by the laws of the State of California and the United States of America, applicable to agreements wholly executed and performed therein, and without giving effect to the principles of conflict of laws thereof. 5. ANY LEGAL ACTION

Any legal proceedings shall be as provided in the Agreement.



6. NOTICES All notices or other documents (collectively “notices”) which any party shall be required or shall desire to give to the other hereunder shall be in writing, unless otherwise specified, and shall be addressed or directed to the party intended to receive the same at its address provided for herein. All such notices shall be given in one of the following ways: (i) by personal delivery; or (ii) by mail, registered or certified (return receipt requested), postage prepaid, airmail (if available); or (iii) by delivery, toll prepaid to a telegraph or cable company; or (iv) by transmittal by any electronic means whether now known or hereafter developed, including, but not limited to, telex, telecopiestelecopier, or laser transmissions, able to be received by the party intended to receive notice. If so personally delivered, telexed or mailed, each such notice shall be conclusively deemed to have been given when personally delivered at the address specified below or when telexed (provided an “answer back” is received) or 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: DEBTOR: ANNAPURNA FILMS, INC.FAIRHILL, LLC

Attention: Facsimile: SECURED PARTY:

COLUMBIA PICTURES INDUSTRIES, INC. 10202 W. Washington Blvd. Culver City, California 90232 Attention: Executive Vice President, Legal Affairs Facsimile: (310) 244-1512

By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Security Agreement.

“SECURED PARTY”

COLUMBIA PICTURES INDUSTRIES, INC. By:___________________________________ Its:___________________________________



“DEBTOR” FAIRHILL, LLCANNAPURNA FILMS, INC. By ___________________________

Its:___________________________