{"id":42758,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/revenue-sharing-term-sheet-paramount-home-video-and-blockbuster.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"revenue-sharing-term-sheet-paramount-home-video-and-blockbuster","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/revenue-sharing-term-sheet-paramount-home-video-and-blockbuster.html","title":{"rendered":"Revenue Sharing Term Sheet &#8211; Paramount Home Video and Blockbuster Inc."},"content":{"rendered":"<pre>\n                                 PHV\/Blockbuster\n                                 Revenue Sharing\n                                   TERM SHEET\n                              (As of July 29, 1999)\n\n1. License        PHV hereby grants and BB accepts a license to sell and rent *\n                  VHS Units of PHV rental Titles on a revenue sharing basis in\n                  the Territory during the Term subject to the terms and\n                  conditions set forth herein.\n\n2.                *\n\n3. Unit Fee       BB shall pay to PHV as a Unit Fee * for each Base Unit (which,\n                  for the avoidance of doubt, shall be included in the *, Base\n                  Multiple Unit and Enhanced Multiple Unit. BB shall pay to PHV\n                  * for each Hyper-Buy Unit up to a multiple of * and * for each\n                  Hyper-Buy Unit at a multiple of * or above [* of each Unit Fee\n                  shall be denominated as the 'Buy-Out-Fee.'] For example, if\n                  the Grid provides for a purchase of * Base Unit and a multiple\n                  of * applies, BB would pay a * of * (or *), and * in total for\n                  Unit Fees for the Units in excess of the Base Unit (* Units in\n                  total).\n\n4. Splits          With respect to each Title BB shall pay to PHV:\n\n                  (A)   * of * rental revenues derived from such Title during\n                        weeks * of its License Period; and\n\n                  (B)   * of * rental revenues derived from such Title during\n                        weeks * of its License Period; and\n\n5. Split          Notwithstanding the splits described in Section 4 above, the\n   Adjustment     following adjustment may apply if the corresponding conditions\n                  are met.\n\n----------------\n*     Pages where confidential treatment has been requested are stamped\n      'Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment', and the confidential\n      section has been marked with a star (*).\n\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n                  'A' Tranches will consist of * consecutive Titles with US\/Can\n                  gross box office equal to or in excess of * each. 'B' Tranches\n                  will consist of * consecutive Titles with US\/Can gross box\n                  office less than * each.\n\n                  *\n\n6. PVT            BB shall have the right, as consignee, to sell previously\n                  viewed Units ('PVTs') in accordance with the following:\n\n                  A.    With respect to each Title, BB shall not sell any PVT\n                        Units prior to * after its street date and then only\n                        subject to its standard *.\n\n                        BB shall not sell PVT Units * computed for all PHV Units\n                        sold during each * period starting with the Commencement\n                        Date and BB shall not market or sell PVT Units of PHV\n                        Titles for * the PVT Units of titles from *. For the\n                        avoidance of doubt and without limiting anything else in\n                        this section 6A, BB shall have the right * based on BB's\n                        marketing and sales needs and the performance of\n                        individual titles as determined by BB.\n\n                  B.    Subject to 6A above, after the License Period BB shall\n                        have the right to keep or sell all Base and Base\n                        Multiple Units and retain all\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 2\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n                        proceeds from such sales.\n\n                  C.    Subject to 6A above, after the License Period * as a PVT\n                        Unit, BB keeps all proceeds from such sale.\n\n                  D.    Subject to 6A above, after the License Period *, PHV\n                        shall have the option to instruct BB to (i) * (ii) to\n                        keep such Unit and to the extent BB sells such Unit as\n                        PVT Unit, BB keeps all proceeds from such sale.\n\n                  E.    Notwithstanding 6 B, C and D above, *\n\n                  F.    *. Major Studio in this Term Sheet shall mean: Disney,\n                        Universal, Warner Bros., Twentieth Century Fox, Sony,\n                        MGM, Dreamworks including any of their successors or\n                        affiliates.\n\n                  G.    In all instances in this Section 6 where PHV *, such\n                        notification shall be made on or before the order\n                        cut-off date for such Units.\n\n                  H.    BB shall be permitted to offer PVT Units to ultimate\n                        consumers in the Territory by means of advertising on\n                        the internet (i.e., no sales to wholesalers, middlemen\n                        or brokers) all in accordance with the terms of this\n                        Agreement.\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 3\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n7. *              BB shall pay to PHV the * fees for each transaction: \n   Price Per      \n   Transaction    For theatrical Titles with US\/Can gross box office receipts \n                  greater than *:\n\n                         *\n\n                  For theatrical Titles with US\/Can gross box office receipts\n                  equal to or less than * and non-theatrical Titles:\n\n                         *\n\n                  Throughout the Term BB shall apply credits and bad debts to\n                  PHV product in a manner consistent with the way BB applies\n                  credit and bad debt with respect to the product of the other\n                  Major Studios.\n\n8. Recoupability  With respect to each Title, BB shall have the right to recoup\n                  from the * the revenues due to PHV from its share of rental\n                  revenues for such Title. (For the avoidance of doubt, there is\n                  no recoupment from Unit Fees other than Bases Unit Fees,\n                  which are included in the *.)\n\n9. Payment        BB shall pay monies due to PHV in accordance with the\n   Schedule       following schedule:\n\n                  *: Due and payable no later than *\n\n                  Unit Fees: Due and payable no later than *\n\n                  PHV's Share of Rental Revenues: Due and payable no later than\n                  *\n\n10. Territory     United States. Canada will be included using separate Units\n                  Per Store Grids for US, English-speaking Canada and\n                  French-speaking Canada. Terms for Canada will be on the same \n                  economic basis factoring in\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 4\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n                  currency exchange and cost of goods differences (if any) to\n                  be determined and discussed by PHV and BB.\n\n11. Output        The product licensed hereunder shall be all product which PHV\n                  distributes * for the VHS rental market (i.e., with a net\n                  effective wholesale price of * and above) for which it\n                  unilaterally controls the rights necessary to grant the rights\n                  hereunder.\n\n                  Notwithstanding the above, the following product is not\n                  licensed hereunder.\n\n                  o     less than 70 minutes in duration;\n                  o     rated NC-17 or unrated;\n                  o     live sports programs;\n                  o     musical concerts;\n                  o     stage plays which are filmed;\n                  o     theatrical re-releases; and\n                  o     catalog titles at rental prices.\n\n                  In addition, BB shall license *, which are distributed by PHV\n                  hereunder except that BB shall not be required to license in\n                  excess of * such title in the aggregate per year. If PHV\n                  releases more than * such titles in any year, BB shall have\n                  the right to choose which * titles per year it shall license.\n                  With respect to all such such * the * (inclusive of the Unit\n                  fee) for each Base Unit.\n\n                  Note that titles which may contain non-substantial amounts of\n                  documentary footage, live sports footage, musical concert\n                  footage or excerpts of live stage plays shall not be excluded\n                  under this sub-paragraph.\n\n12. Term          This Agreement shall apply with respect to Units with\n                  Street Dates after July 26, 1999 and before August 1, 2003.\n                  (For the avoidance of doubt, this Agreement begins with the\n                  street date for PAYBACK and runs for 4 years.)\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 5\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n13. License       With respect to each Title the license period shall be\n    Period        26 weeks commencing on the Street Date for such Title.\n\n14. Grid          BB commits to license a Minimum Number of Base Units per\n                  store in accordance with the following:\n\n                  a. July 1, 1999-June 30, 2000 - Grid 'A' (attached)\n                  b. July 1, 2000-June 30, 2001 - Grid 'B' (attached)\n                  c. July 1, 2001-end of Term - Grid 'C' (attached)\n\n                  *\n\n                  Multiples are in three brackets (see attached Matrix);\n\n                  A.    Base Multiple with ranges from *;\n\n                  B.    Enhanced Multiple which at BB's sole option allows BB to\n                        increase any buy to a * multiple wherever it is below\n                        that threshold (high end films) provided that on or\n                        after January 1, 2000 * then the reference to * shall be\n                        increased to *;\n\n                  C.    Hyper-buys with mutual approval, allows BB to raise its\n                        buy to as high as a * multiple wherever it is below that\n                        level.\n\n15. Advertising   With respect to each Title PHV shall grant to BB an\n    Allowances    advertising allowance of * of gross rental revenues generated\n                  by such Title.\n\n16. Audit         PHV shall have the right to audit BB's performance hereunder\n                  at BB's headquarters as well as a reasonable number of stores\n                  and participating franchises provided that PHV shall not have\n                  access to data concerning its competitors. Data, to the\n                  extent needed to verify PHV's results, shall be audited by a\n                  third party auditor, which\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 6\n\n\nPHV\/Blockbuster\nRevenue Sharing\nTERM SHEET\n(As of July 29, 1999)\n\n                  shall advise PHV only whether BB is in compliance or not.\n\n17. In Store      PHV products shall be placed in the new release section or its\n    Placement     equivalent of each store and PHV product *\n\n18. Participa-    BB shall have the right to distribute PHV product in all\n    ting          retail store locations owned and operated by BB and all\n    Stores        participating franchises. To participate, franchises must\n    Franchises    commit for minimum * periods and allow PHV its audit\n                  hereunder. BB shall be financially responsible for each\n                  participating franchisee's payment to PHV.\n\n19. Lost Units    With respect to each Title, if any Units are not traceable at\n                  any time during the License Period (up to * of total Units for\n                  that Title) BB shall pay PHV an amount equal to the average\n                  per Unit rental revenue generated by the Units of such Title\n                  which were not lost less any earned revenues from the\n                  applicable Unit prior to its being lost (so long as such\n                  revenues are paid). It will be a material breach of this\n                  Agreement if Units in excess of * for any Title are not\n                  traceable at any time during the license period.\n\n20. Computer &amp; BB must have the minimum levels of electronic reporting\nAdministrative    capabilities required by PHV pursuant to the attached exhibit.\nRequirements\n\n21. Program       While participating in revenue sharing with PHV, BB must not\n    Restriction   obtain any PHV Rental Titles licensed hereunder through any\n                  other means, including any other distributor or program, in\n                  any of its store locations, including participating\n                  franchisees.\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment.\n\n\n                                     Page 7\n\n\n                            GRID 'A' - REMAINING 1999\n\n\n\nBLOCKBUSTER VIDEO MATRIX\nPARAMOUNT PROPOSAL 7\/15\/99\n\n                            GRID 'A' - REMAINING 1999\n\n                                        *\n\n\n\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment. Two pages have been\n      omitted from Grid 'A'.\n\n\n\n                           GRID 'B' - REMAINING 2000\n\n\n\nBLOCKBUSTER VIDEO MATRIX\nPARAMOUNT PROPOSAL 7\/15\/99\n\n                            GRID 'B' - REMAINING 2000\n\n                                        *\n\n\n\n\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment. Two pages have been\n      omitted from Grid 'B'.\n\n\n\n                           GRID 'C' - REMAINING 2001\n\n\n\n\n\n\n\n\nBLOCKBUSTER VIDEO MATRIX\nPARAMOUNT PROPOSAL 7\/15\/99\n\n                            GRID 'C' - REMAINING 2001\n\n                                        *\n\n\n\n\n\n\n\n----------------\n*     Confidential material omitted and separately filed with the Commission\n      under an application for confidential treatment. Two pages have been\n      omitted from Grid 'C'.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6911,9252],"corporate_contracts_industries":[9469,9465],"corporate_contracts_types":[9613,9616],"class_list":["post-42758","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-blockbuster-inc","corporate_contracts_companies-viacom-inc","corporate_contracts_industries-media__rental","corporate_contracts_industries-media__broadcasting","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42758"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42758"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42758"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}