REVENUE SHARING AGREEMENT
THIS AGREEMENT (the 'Agreement') is made the 29th day of September, 1998 (the
'Effective Date').
BETWEEN:
(1) BLOCKBUSTER INC. whose principal place of business is at 1201 Elm Street,
Dallas, Texas 75270 (hereinafter referred to as 'Blockbuster,' which shall be
deemed to include its assigns once assigned); and
(2) *
WHEREAS:
(A) Blockbuster and certain of its Affiliates (the terms initially capitalized
in this Agreement and not otherwise defined herein shall have the respective
meanings set forth in Paragraph 1 of this Agreement), own, operate and franchise
retail stores which, among other things, rent, sell and market pre-recorded
videocassette tapes to the general public; and
(B) * and certain of its Affiliates acquire, produce, lease, market and sell
motion pictures on pre-recorded videocassette tapes; and
(C) Blockbuster is willing to lease from * on a per Participating Store basis a
specified number of Copies of each Rental Picture released during the Term as
set forth herein; and
(D) * is willing to lease to Blockbuster on a per Participating Store basis a
specified number of Copies of each Rental Picture released during the Term as
set forth herein; and
(E) Blockbuster is willing to report electronically on an ongoing basis during
the Revenue Sharing Period information as to the rental of Copies per Rental
Picture as set forth in Exhibit C, attached hereto and made a part hereof.
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under an application for confidential treatment', and the confidential
section has been marked with a star (*).
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NOW THEREFORE, based on the above premises and in consideration of the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS:
a. 'Affiliate' shall mean an entity in which either party has a
controlling interest or any entity that has a direct or indirect parent in
common.
b. *
c. *
d. 'Blockbuster Headquarters' shall mean the corporate office of
Blockbuster located at 1201 Elm Street, Dallas, Texas 75270.
e. 'Copy(ies)' shall mean VHS videocassettes of the Rental Pictures leased
by Blockbuster from * under this Agreement. Other formats, including laserdisc
and DVD are not included under this Agreement.
f. 'Defective Copies' shall mean those Copies that are mechanically
defective, mispackaged or contain extraneous material upon delivery to
Blockbuster.
g. 'Distribution Center' shall mean Blockbuster's distribution center that
is currently in McKinney, Texas. Blockbuster may add two (2) additional delivery
points at its option.
h. 'Franchise Stores' shall mean Blockbuster franchise stores operated
under the Blockbuster trademarks and designated by Blockbuster from time to time
as ordering Copies through Blockbuster, subject to Paragraph 4.c. hereof.
i. *
j. 'Home Video Distribution' or 'Home Video Distribution Rights' shall
mean the right to manufacture, record, sell and/or otherwise distribute a motion
picture on videocassette.
k. 'Month' or 'Monthly' shall mean Blockbuster's accounting cycles that is
based upon a four week, four week, five week rotation as set forth in Exhibit B,
attached hereto and made a part hereof.
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l. 'Participating Store' shall mean (i) any Video Store in the United
States, which at any time during the Term of this Agreement, is wholly owned
and/or operated by Blockbuster and/or its Affiliates under the Blockbuster
trademarks; and (ii) Franchise Stores subject to Paragraph 4.c. hereof.
m. *
n. 'Rental Picture' shall mean each and every feature motion picture for
which * owns or controls Home Video Distribution Rights in the Territory,
provided such picture: (1) (A) is offered in Copy form to the rental trade by *
at a wholesale 'rental price' (as opposed to a 'sell-through-price') of no less
than Thirty-five Dollars (US$35.00) per unit whether purchased as a single unit
or in multiple unit quantities; (B) if rated by the MPAA, is not rated NC-17 or
more restrictive; and (C) upon initial release in Copy form, is intended by * to
be rented rather than sold to consumers, and (2) is either (A) a picture
previously released theatrically in the Territory; or (B) if not previously
released theatrically, is either a Movie of the Week ('MOW') or Direct to Video
('DTV'), is at least seventy (70) minutes in length, and is not a sports event,
documentary or concert film, stage play (i.e., film of an on-stage performance),
theatrical re-release, or library film.
o. *
p. 'Revenue Sharing Period' shall mean the period commencing upon the
first rental of the applicable Rental Picture Copy and running for the
twenty-six (26) weeks after the Video Street Date of such Rental Picture.
q. 'Rental Transaction' shall mean that period of time that a title is
rented to a customer, including any extended viewing period, as defined by
Blockbuster's then current practices across all videocassettes available for
rental from all videocassette suppliers.
r. 'Video Store' shall mean a retail outlet which has at least one
thousand five hundred (1,500) square feet that is primarily engaged in the
rental of videocassettes to the public for home viewing entertainment purposes.
s. 'Video Street Date' shall mean, with respect to any Rental Picture, the
first date on which, in the Territory such Rental Picture is authorized by * for
Home Video Distribution.
2. AGREEMENT TERM:
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The term of this Agreement shall be for * (the 'Term'), commencing as of
the Effective Date, but * may terminate this Agreement as of December 22, 1999
by giving Blockbuster ninety (90) days prior written notice. However, any Copies
in Blockbuster's possession at the time of termination shall continue to be
leased under the terms of this Agreement until such Copies are returned to * or
sold by Blockbuster.
3. TERRITORY:
The territory for the purposes of this Agreement with respect to each
Rental Picture shall be the United States, its territories and possessions, if
and to the extent * owns or controls such rights to territories and possessions
of the United States (the 'Territory').
4. BLOCKBUSTER COMMITMENTS:
Beginning as of the date of this Agreement, Blockbuster agrees as follows:
a. Ordering Requirements: Blockbuster shall timely submit orders of
Copies of Rental Pictures in compliance with this Agreement. Blockbuster
may purchase or otherwise obtain VHS videocassettes of Rental Pictures
from sources other than * (the 'Excess Copies'). All such Excess Copies,
regardless of how obtained, shall be deemed to be 'Copies' and reported
and * share of Rental Revenue and PVT Share paid as if such VHS
videocassettes were obtained under this Agreement unless * has materially
breached its obligations under Paragraph 5.c. hereof. In such event,
Blockbuster shall not be obligated under the Agreement for any such Excess
Copies.
b. Lease: The following terms shall apply to Rental Pictures:
(1) *
(2) *
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(3) *
a. *
b. *
(4) *. If Blockbuster fails to provide * with all information
required by Exhibit C when due, then Blockbuster shall provide a
good faith estimate of all such information so that * can generate
appropriate invoices. Following delivery of all information required
by Exhibit C to * shall reconcile the information estimated by
Blockbuster with the actual information, * shall promptly issue
appropriate invoices and/or credits to Blockbuster. Nothing herein
shall serve to limit * remedies regarding Blockbuster's failure to
provide * with all information required by Exhibit C when due.
c. Participating Franchisees: Blockbuster may distribute Copies of
the Rental Pictures received under this Agreement to its Franchise Stores
that have elected to participate for at least the lesser of six (6) months
or the remaining Term of this Agreement, provided however, that Franchise
Stores who elect to participate may not start and stop more than one time
each. Subject to the requirements of this Paragraph 4.c., terms for
implementation of this Agreement at the franchise level and franchise
payments thereunder will be controlled and administered by Blockbuster.
For purposes of this Agreement and to the extent a Franchise Store elects
to participate hereunder, such Franchise Store shall be considered a
Participating Store. Blockbuster agrees that Franchise Stores shall be
obligated to Blockbuster to perform to terms that will provide *
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with all of the benefits of this Agreement, including, without limitation,
with respect to *'s audit rights under Paragraph 6 hereof.
d. *
e. Packing and Shipping: Promptly upon receipt of any Copies at the
Distribution Center and prior to any shipment to another location or
rental or sale thereof, Blockbuster shall barcode each Copy. Thereafter,
Blockbuster shall make all Copies (including Replenishment Copies) ready
for consumer rental and shall ship such Copies (except for Replenishment
Copies) to all Participating Stores for rental to members of the public
beginning no sooner and no later than the Video Street Date. Promptly upon
receipt of any Copies at a Participating Store and prior to any rental or
sale thereof, each Participating Store shall enter all applicable barcodes
and related information in such Participating Store's POS system.
Blockbuster shall comply with all generally applicable Video Street Date
policies of *, shall not copy any Copies or related marketing materials
nor rent any Copies to any customer it has knowledge intends to copy such
Copies. Blockbuster shall not cause or permit Copies to be sold, leased or
otherwise transferred to or by distributors, sub-distributors or Video
Stores other than Participating Stores, except as permitted in Paragraph
4.c. and 4.d. hereof. Blockbuster shall maintain and/or store all Copies
only at the Participating Store to which they were originally delivered,
except as follows: (i) during rentals to the public or following PVT sales
as permitted under Paragraph 4.c. and 4.d. hereof; (ii) during viewing by
employees of Blockbuster, provided such viewing is accounted for on a
dated employee checkout log or in accordance with Blockbuster's ordinary
checkout procedure for employees; or (iii) following shipment from one
Participating Store to another, provided that each such shipment and the
location of all Copies shipped is reported to * at all times during the
applicable Revenue Sharing Period pursuant to Exhibit C. Except as
required by Paragraph 4.d. hereof, Copies shall not be shipped from a
Participating Store to the Distribution Center at any time during the
Revenue Sharing Period, unless such Copies are Defective Copies.
Blockbuster shall be responsible for all physical distribution of Copies
following delivery by * to the Distribution Center, including shipment,
return and replacement of Defective Copies and non-defective Copies to and
from each Participating Store.
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f. Rental and Sale of Copies: (i) Blockbuster shall consult with *
with respect to all of Blockbuster's plans for marketing, advertising and
promotion of each Rental Picture Title, if any, including, without
limitation, all expenditures to be reimbursed by * pursuant to this
Agreement; (ii) Blockbuster shall display Revenue Share Copies of each
Rental Picture in the 'new release' or equivalent section of each
Participating Store for at least the period commencing upon the applicable
Video Street Date and ending fourteen (14) weeks thereafter; and (iii)
prior to December 22, 1999, Blockbuster shall spend at least One Million
Dollars (US$1,000,000) of its own marketing funds (subject to proof of
performance and not using any Marketing Support Funds, Promotional and
Operational Credits or other amounts deducted from amounts due to *
hereunder) on advertisements relating to Rental Pictures to be selected by
mutual agreement.
g. Title to Copies: As between * and Blockbuster, title in and to
the Copies and risk of loss shall remain in * until the earlier of the end
of the Revenue Sharing Period or until sell-off by Blockbuster in
accordance with the above subparagraph 4.d.
h. Missing Copies: For any Copy that is lost, stolen or destroyed
subsequent to delivery to Blockbuster, Blockbuster agrees to pay to * of
such Copy's then applicable suggested retail price ('SRP') (the
'Replacement Value') less the Upfront Fee and revenue share amounts
already paid to *. Blockbuster shall determine whether a Copy is lost,
stolen or destroyed; however, no Copy shall be unaccounted for longer than
forty-five (45) days. The Replacement Value shall be due and payable
within ten (10) days of the loss, theft or destruction of a Copy. Copies
discovered missing in the ordinary course of business are to be recorded
and paid for when discovered as if they had been sold off pursuant to
Paragraph 4.d. of this Agreement. Blockbuster shall notify * of any theft
or loss of any Copy that occurs outside of the ordinary course of business
at the time Blockbuster discovers the same.
i. Returns/Exchanges: Blockbuster shall destroy any Defective
Copies. In lieu of any obligation to return or account to * for Defective
Copies, Blockbuster shall have the right to deduct an allowance for
Defective Copies in the amount of * of each order, which deduction shall
be reflected in the invoice issued by * that corresponds to such order.
There shall be no other charge to * for Defective Copies.
j. Reporting: Blockbuster shall comply with the reporting
requirements set forth in Exhibit C. Notwithstanding the foregoing, *
shall have the right to modify its reporting requirements from time to
time provided it notifies Blockbuster at least ninety
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(90) days in advance of any proposed modification, and provided further,
that Blockbuster is able to comply with each such proposed modifications,
without business disruption or material expense, following good faith
efforts to do so. Blockbuster shall only be obligated to report to * until
the earlier of such time Copies of a Rental Picture are sold pursuant to
Paragraph 4.d. or the end of the Revenue Sharing Period.
5. * COMMITMENTS:
a. Grant: * grants Blockbuster the right to distribute the Copies of
the Rental Pictures to Participating Stores for the transfer of possession
on a temporary or permanent basis to members of the general public for
home viewing purposes.
b. Marketing Support: For each Rental Picture, Copies of which are
leased to Blockbuster under this Agreement, * grants to Blockbuster an
allowance for cooperative advertising and market development funds equal
to * of the aggregate of the Upfront Fees, * share of Rental Revenues
(after all deductions for Bad Debt and Promotional and Operational
Credits) and * PVT Share received by * with respect to such Rental Picture
(the 'Marketing Support Funds'). Such Marketing Support Funds shall be
available solely for advertising Rental Pictures in compliance with *
published advertising conditions, including without limitation, those
contained in Exhibit F * attached hereto and made a part hereof. * shall
have the right to audit Blockbuster's use of the Marketing Support Funds
as provided in Paragraph 6 below.
C. Shipping: Assuming Blockbuster is not in Default under this
Agreement as defined in Paragraph 10 hereof, * will deliver the Copies to
the Distribution Center at least three (3) weeks prior to Video Street
Date per Rental Picture but shall use reasonable commercial business
efforts to deliver the Copies four (4) weeks prior to Video Street Date
per Rental Picture.
6. AUDIT:
During the Term and continuing until the date six (6) months following the
date of expiration or earlier termination of this Agreement, Blockbuster agrees
that *, with twenty-four (24) hours advance written notice, may conduct, during
normal business hours: (a) a reasonable number of audits per year of
Blockbuster's business operations and records relating to performance under this
Agreement at the Blockbuster Headquarters; and (b) a reasonable number of audits
per year, to be conducted Monday through Wednesday only, of business operations
and records at Participating Stores, solely pertaining to the Copies leased by
Blockbuster pursuant to
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this Agreement and limited to the information specified in Section 7 of Exhibit
C. Any additional audit request of information not provided for above including,
without limitation, any audit of Bad Debt or Promotional and Operational Credits
shall be performed by Blockbuster's certified public accountant on an annual
basis. Any audits conducted pursuant to this section shall relate to
Blockbuster's compliance with the terms of this Agreement and shall not
unreasonably interfere with Blockbuster's daily business operations. Within six
(6) business days following * or its designee's reasonable request, Blockbuster
shall deliver to * or its designee (including an on-site auditor for either) a
list of every Rental Picture, Copies of which are leased to Blockbuster under
this Agreement, the number and location of each Copy of each Rental Picture in
each Participating Store and in the Distribution Center, and, if such Copy is
rented to a consumer, the Participating Store from which such Copy was rented. *
agrees that the data and other information collected by * may be used by * only
in connection with such audits to fulfill * commitments under this Agreement. If
any such audit establishes a material breach of this Agreement, Blockbuster
shall promptly pay any deficiency (to the extent such amount is disputed) and
the reasonable cost to conduct such audit.
7. * REPRESENTATION AND WARRANTIES:
* represents and warrants that:
a. It is a corporation organized and existing under the laws of the * with
its principal place of business in the *.
b. * is the proper entity to be entering into this Agreement and
performing its respective obligations provided hereunder.
c. The undersigned has the full right, power and authority to sign this
Agreement on behalf of *.
d. The execution, delivery and performance of this Agreement does not and
will not, violate any provisions of * articles or certificates of incorporation
and bylaws, or any contract or other agreement to which * is a party.
e. There is no broker, finder or intermediary involved in connection with
the negotiations and discussions incident to the execution of this Agreement,
and no broker, finder or intermediary who might be entitled to a fee,
commissions or any other payment upon the consummation of the transactions
contemplated by this Agreement.
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f. This Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of * enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
g. Copies shall be new and unused and comparable in quality to other
videocassette units being sold by * in rental distribution channels.
8. BLOCKBUSTER'S REPRESENTATIONS AND WARRANTIES:
Blockbuster represents and warrants that:
a. It is a corporation organized and existing under the laws of the State
of Delaware, with its principal place of business in the State of Texas.
b. Blockbuster Inc. is the proper entity to be entering into this
Agreement and performing its respective obligations provided hereunder.
c. The undersigned has the full right, power and authority to sign this
Agreement on behalf of Blockbuster.
d. The execution, delivery and performance of this Agreement does not and
will not, violate any provisions of Blockbuster's articles or certificates of
incorporation and bylaws, or any contract or other agreement to which
Blockbuster is a party.
e. There is no broker, finder or intermediary involved in connection with
the negotiations and discussions incident to the execution of this Agreement,
and no broker, finder or intermediary who might be entitled to a fee,
commissions or any other payment upon the consummation of the transactions
contemplated by this Agreement.
f. This Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of Blockbuster enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereinafter
in effect, affecting the enforcement of creditors' rights in general and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
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9. INDEMNIFICATION:
(i) * agrees to, at all times, defend, indemnify and hold
Blockbuster, its parent company, their affiliates, subsidiaries,
franchisers and the officers, directors, agents and employees of each,
harmless from and against any and all claims, suits, damages, losses,
liabilities, obligations, fines, penalties, costs and expenses (whether
based on libel, slander, invasion of privacy, breach of contract, product
liability, patent, trademark, license or copyright infringement or
otherwise), including legal fees and expenses, of whatever kind or nature
(collectively, 'Loss'), arising out of or based on (a) a breach or
violation of this Agreement by * or any failure by * to perform any of the
agreements, terms, covenants, conditions, representations or warranties of
this Agreement to be performed by *; (b) the content of any Copy of a
Rental Picture leased by Blockbuster pursuant to this Agreement; or (c)
negligent acts or omissions by * its employees and/or agents.
(ii) Blockbuster agrees to, at all times, defend, indemnify and hold
*, its parent company, their affiliates, subsidiaries and the officers,
directors, agents and employees of each, harmless from and against any
Loss, arising out of or based on (a) a breach or violation of this
Agreement by Blockbuster or any failure by Blockbuster to perform any of
the agreements, terms, covenants, conditions, representations or
warranties of this Agreement to be performed by Blockbuster; (b)
Blockbuster's distribution of Copies including the use of advertising
materials not supplied by * and the actual rental and/or retail sale
thereof; or (c) negligent acts or omissions by Blockbuster, its employees
and/or agents.
(iii) The Indemnified Party shall give written notice to the
Indemnifying Party and the Indemnifying Party will promptly, at the
Indemnified Party's request, assume and diligently conduct the entire
defense of any suit or action, or the making of any claim as to which
indemnity may be sought hereunder, including settlements and appeals, at
the Indemnifying Party's sole cost and expense, and the Indemnifying Party
shall pay and discharge any and all settlement amounts, judgments or
decrees which may be rendered.
(iv) The Indemnifying Party shall not, except with the consent of
the Indemnified Party, consent to entry of any judgment or administrative
order or enter into any settlement that (i) could affect the intellectual
property rights or other business interest of the Indemnified Party; or
(ii) does not include as an unconditional term thereof the giving by the
claimant or plaintiff to the Indemnified Party of a release from all
liability with respect to such claim or litigation.
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(v) In the event that the Indemnifying Party is not asked or does
not accept the defense of any matter as above provided, the Indemnified
Party shall have the full right to defend against any such claim or
demand, and shall be entitled to settle or agree to pay in full such claim
or demand, in its sole discretion without releasing any obligation or
liability of the Indemnifying Party.
10. TERMINATION:
The non-defaulting party may terminate this Agreement if a Default, as
defined below, by the other party has occurred and is continuing by giving
written notice to the defaulting party. The term 'Default' shall mean any of the
following: (a) failure by a party to comply with or perform any provision or
condition of this Agreement that results in a material breach of this Agreement
and, if such material breach can be cured, continuance of such failure for
thirty (30) days after written notice to such party (if cure is not practicable,
the thirty (30) day notice period is not required); (b) a party becomes
insolvent, is unable to pay its debts as they mature or is the subject of a
petition in bankruptcy, whether voluntary or involuntary, or of any other
proceeding under bankruptcy, insolvency or similar laws; or makes an assignment
for the benefit of creditors; or is named in, or its property is subject to a
suit for appointment of a receiver; or is dissolved or liquidated; or (c) any
material warranty or representation made in this Agreement is breached, false or
misleading in any material respect. In the event of such termination, the
non-defaulting party shall be entitled to pursue any and all remedies provided
in law and recover any damages it may have suffered by reason of such Default,
provided however, that * expressly waives its right to seek equitable relief
including, without limitation, seeking injunctive relief. * acknowledges that no
specification of a particular legal or equitable remedy by Blockbuster shall be
construed as a waiver, prohibition or limitation of any legal or equitable
remedies in the event of a breach of this Agreement. Upon Default, any Copies in
Blockbuster's possession at time of termination shall continue to be leased
under the terms of this Agreement until such Copies are returned to * or sold by
Blockbuster in accordance with the terms and conditions of this Agreement.
11. REMEDIES: No remedy conferred by any of the specific provisions of this
Agreement is intended to be exclusive of any other remedy which is otherwise
available at law, in equity, by statute or otherwise, and except as otherwise
expressly provided for herein, each and every other remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law, in equity, by statute or otherwise and no provision
hereof shall be construed so as to limit any party's available remedies in the
event of a breach by the other party hereto. The election of any one or more of
such remedies by any of the parties hereto shall not constitute a waiver by such
party of the right to pursue any other available remedies.
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12. MISCELLANEOUS:
12.1 FORCE MAJEURE: Neither party shall be considered in default of this
Agreement or be liable for damages, for any failure of performance hereunder
occasioned by an act of God, force of nature, war or warlike activity,
insurrection or civil commotion, labor dispute, transportation delay,
governmental regulatory action whether or not with proper authority or other
cause similar or dissimilar to the foregoing and beyond its reasonable control,
provided the party so affected gives prompt notice to the other. In the event of
a suspension of any obligation by reason of this section which extends beyond
ten (10) days, the party not affected may, at its option, elect to cancel those
aspects of this Agreement which are reasonably feasible to terminate. Such
cancellation shall be effective thirty (30) days after written notice of such
cancellation has been given to the other party.
12.2 NOTICE: Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given and received on the date
of delivery or on the third (3rd) business day following the day of mailing of
the same, or on the day of transmission by telecopier or other form of recorded
communication service of the same, as the case may be to the party to be
notified at the addresses set forth below:
If to Blockbuster: Blockbuster Inc.
1201 Elm Street, 21st Floor
Dallas, Texas 75270
Attn: General Counsel
cc: Chief Executive Officer
If to *: *
*
*
Attn: *
or such other address as may be designated by either party by written notice to
the other as hereinabove provided.
12.3 ENTIRE AGREEMENT: This Agreement, together with all Exhibits attached
hereto, represents the entire agreement and understanding between the parties
with respect to the subject matter of this Agreement, and supersedes any other
agreement or understanding, written or oral, that the parties hereto may have
had with respect thereto. No statement or inducement
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with respect to the subject matter by either party or by any agent or
representative of either party which is not contained in this Agreement shall be
valid or binding between the parties.
12.4 RELATIONSHIP OF PARTIES: The parties are independent contractors, and
nothing in this Agreement shall be deemed or construed to create, or have been
intended to create a partnership, joint venture, employment or agency
relationship between the parties. Each party agrees that it neither has nor will
give the appearance or impression of possessing the legal authority to bind or
commit any other party in any way except as provided in this Agreement.
12.5 EFFECT OF HEADINGS: The headings and subheadings of the sections of
this Agreement are inserted for convenience of reference only and shall not
control or affect the meaning or construction of any of the agreements, terms,
covenants and conditions of this Agreement in any manner.
12.6 CONSTRUCTION: This Agreement has been fully reviewed and negotiated
by the parties and their respective legal counsel. Accordingly, in interpreting
this Agreement, no weight shall be placed upon which party or its counsel
drafted the provision being interpreted.
12.7 SEVERABILITY: If any term or provision of this Agreement shall be
found to be void or contrary to law, such term or provision shall, but only to
the extent necessary to bring this Agreement within the requirements of law, be
deemed to be severable from the other terms and provisions of this Agreement,
and the remainder of this Agreement shall be given effect as if the parties had
not included the severed term herein.
12.8 AMENDMENTS: No provision of this Agreement may be modified, waived or
amended except by a written instrument duly executed by each of the parties. Any
such modifications, waivers or amendments shall not require additional
consideration to be effective.
12.9 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.10 IMPLIED WAIVER: Any failure on the part of either party to insist
upon the performance of this Agreement or any part of this Agreement, shall not
constitute a waiver of any right under this Agreement.
12.11 ASSIGNMENT: * may not assign its rights or delegate its obligations
under this Agreement except to a parent, subsidiary or Affiliate, without
Blockbuster's prior written
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consent. Any attempted assignment, sublicense, transfer, encumbrance or other
disposal by * (other than as permitted by this Paragraph 12.11) without such
consent shall be void and shall constitute a material breach of this Agreement.
'Transfer' within the meaning of this Section 12.11 shall include any merger or
consolidation involving *, any sale or transfer of all or substantially all of
*'s assets and any transaction or series of related transactions resulting in
the transfer of thirty percent (30%) or more of the voting stock of *.
Blockbuster may assign its rights and obligations under this Agreement, provided
that the assignment is coextensive with an assignment of the video rental
business of Blockbuster and the obligations of Blockbuster under this Agreement
are assumed with any assignment (including where applicable the required use of
the Blockbuster trademarks).
12.12 SURVIVAL: All representations, warranties and indemnities made
herein shall survive the termination of this Agreement and shall remain in full
force and effect. All of a party's rights and privileges, to the extent they are
fairly attributable to events or conditions occurring or existing on or prior to
the termination of this Agreement, shall survive termination and shall be
enforceable by such party and its successors and assigns.
12.13 CONFIDENTIALITY: Except as otherwise required by applicable federal
and state laws, each party shall keep the information regarding the details of
this Agreement confidential and restrict dissemination to each of its own
personnel and to third parties to only a 'need to know' basis, using the
standard of care which each uses to protect its own information from disclosure
during the Term of this Agreement and for two (2) years thereafter. The party
disclosing confidential information to its own personnel and third parties shall
require that these persons be bound by the confidentiality obligations set forth
in this Agreement. In addition to the foregoing, both parties agree to keep all
information provided hereunder in accordance with this Agreement confidential
and any unauthorized disclosure shall be considered a material breach of this
Agreement.
12.14 GOVERNING LAW: This Agreement shall be construed in accordance with
the laws of the * without regard to its rules on conflicts of law.
----------
* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
16
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
* BLOCKBUSTER INC.
-------------------------------
Name: * Name: Edward B. Stead
-------------------------- --------------------------------
Signature: /s/ * Signature: /s/ Edward B. Stead
--------------------- ---------------------------
Title: Title: EVP
------------------------- -------------------------------
----------
* 'Confidential material omitted and separately filed with the Commission
under an application for confidential treatment'.
Exhibit A
Matrix
(See Attached)
Matrix of Base Units/Location
*
----------
* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
Exhibit B
Accounting calendar denoting timing of certain events.
Exhibit C
Electronic Reporting
*
----------
* 'Confidential material omitted and separately filed with the Commission
under an application for confidential treatment'. Five pages have been
omitted from Exhibit C.
Exhibit D
Average Minimum for Rental Pictures with a Video Street Date during the
Period Commencing on the Effective Date and continuing through *.
*
---------
* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
Exhibit E
Average Minimum for Rental Pictures with a Video Street Date of * and
thereafter during the Term of this Agreement.
*
---------
* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment.
Exhibit F
*
----------
* Confidential material omitted and separately filed with the Commission
under an application for confidential treatment. Fifteen pages have been
omitted from Exhibit F.
Revenue Sharing Agreement - Blockbuster Inc.
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