Amendment to Home Entertainment Licensing Agreement

Transcription

1 Amendment to Home Entertainment Licensing Agreement This Amendment (this Amendment ) is entered into as of February 1, 2013, with an effective date of June 30, 2012 ( Amendment Effective Date ) by and between THE WALT DISNEY COMPANY (ARGENTINA) S.A. ( Disney ) and SONY PICTURES HOME ENTERTAINMENT INC. ( Sony ), and amends that certain Home Entertainment Licensing Agreement dated as of November 11, 2010 (the Agreement ). Unless otherwise defined, all capitalized terms used in this Amendment shall have the meaning ascribed to them in the Agreement. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree to amend the Agreement, as follows: 1. Effective as of the Amendment Effective Date: a. The Term in Paragraph 3 shall be amended by replacing 2012 with b. Paragraph 6 shall be amended by replacing Intentionally Left Blank with the following: 6. ORDERING Throughout the Term, (a) in the case of DVD Products, Disney will submit orders for such DVD Products directly to Teltron S.A. and (b) in the case of BD Products, Disney will submit orders for such BD Products (each, a BD Order ) to either Sony DADC or Sony in accordance with the following: each BD Order will contain information including but not limited to title of Content, quantity and delivery destination. In the case of any BD Order submitted directly to Sony, upon Sony s approval, Sony will authorize the applicable Replicators (defined in Paragraph 17.1) to fulfill such BD Order. c. The following shall be added as new Paragraphs 7.6, 7.7 and 7.8, respectively: 7.6 Notwithstanding anything to the contrary set forth herein, Disney will pay to Sony a non-refundable, recoupable sum of US$800,000 (the Minimum Guarantee ) for the period commencing on July 1, 2012 and ending on June 30, 2013 (the Minimum Guarantee Term ). The Minimum Guarantee will be due and payable in four (4) equal quarterly installments of in accordance with Paragraph 8.2, but only to the extent a Minimum Shortfall Payment (as calculated in Paragraph 7.7) is payable by Disney to Sony as of each Measurement Date specified below. The Accumulated Minimum Guarantee with respect to any Measurement Date will mean the aggregate

2 amount of the Minimum Guarantee installments payable on and prior to such Measurement Date. Measurement Date September 30, 2012 December 31, 2012 March 31, 2013 June 30, 2013 Minimum Guarantee 7.7 For the avoidance of doubt, as of each Measurement Date, if the cumulative Royalties earned from the first day of the Minimum Guarantee Term through such Measurement Date are less than the Accumulated Minimum Guarantee as of such Measurement Date, Disney will pay Sony an amount equal to the shortfall between such cumulative Royalties and such Accumulated Minimum Guarantee (each, a Minimum Guarantee Shortfall Payment ). Each Minimum Guarantee Shortfall Payment will be non-refundable, but recoupable by Disney from and against Royalties payable with respect to the sale of Product on a fully cross-collateralized basis through the earlier of (a) the last day of the Term and (b) the date this Agreement is terminated by either party pursuant to Paragraph In the event this Agreement is terminated by Disney for cause as set forth in Paragraph 22 prior to the payment of the entire Minimum Guarantee, then the Minimum Guarantee will be apportioned on a pro rata basis for the period from July 1, 2012 to the date of termination. In the event this Agreement is terminated by Sony for cause as set forth in Paragraph 22 prior to the payment of the entire Minimum Guarantee, then any remaining amount of the Minimum Guarantee shall be due and payable as of the date of termination. d. Paragraph 8.1 shall be deleted in its entirety and replaced with the following: 8.1 Disney will pay Sony: with respect to each calendar month during the Term, an amount equal to (x) the Royalties earned with respect to all Product sold during such calendar month less (y) any unrecouped portion of the Minimum Guarantee Shortfall Payment(s), and with respect to each Measurement Date, the Minimum Guarantee Shortfall Payment, if any, as calculated in accordance with Paragraph 7.7 above. By way of example, assume that cumulative Royalties earned from the first day of the Minimum Guarantee Term through the September 30, 2012 Measurement Date amounts to US$150,000; as such Disney will make a

3 US$50,000 Minimum Guarantee Shortfall Payment to Sony. If Royalties subsequently earned for the monthly period ending on October 31, 2012 amount to: Example 1. US$75,000, then Disney will first recoup the US$50,000 Minimum Guarantee Shortfall Payment and then pay Sony the remaining US$25,000 in earned Royalties. However, if no further Royalties are earned during the period starting November 1, 2012 and ending on the December 31, 2012 Measurement Date, then Disney will pay Sony another Minimum Guarantee Shortfall Payment of US$175,000 = US$400,000 (the Accumulated Minimum Guarantee through such Measurement Date) less US$225,000 (cumulative Royalties earned through such Measurement Date). Example 2. US$275,000, then Disney will first recoup the US$50,000 Minimum Guarantee Shortfall Payment and then pay Sony the remaining US$225,000 in earned Royalties. Also, even if no further Royalties are earned during the period starting November 1, 2012 and ending on the December 31, 2012 Measurement Date, Disney will not be required to make any Minimum Guarantee Shortfall Payment because the cumulative Royalties earned through such Measurement Date amounts to US$425,000 (which exceeds the US$400,000 Accumulated Minimum Guarantee through such Measurement Date). e. Paragraph 8.2 shall be amended by: i. Inserting or Measurement Date (in the case of a Minimum Guarantee Shortfall Payment) immediately after the phrase the last day of each month. ii. Adding the following sentence at the end of the first sentence: Notwithstanding the immediately preceding sentence, the parties acknowledge and agree that any and all Royalties, Minimum Guarantee Shortfall Payment and any other amounts owed by Disney to Sony hereunder for the months of July 2012, August 2012, September 2012, October 2012, November 2012, December 2012 and January 2013 shall be paid by Disney to Sony no later than February 28, f. Paragraph 9.1 shall be amended by inserting the parenthetical (including (i) the Accumulated Minimum Guarantee and (ii) if a Measurement Date falls within such month, the Minimum Guarantee Shortfall Payment (if any)) after the phrase with monthly Royalty reports. g. The following shall be added as a new Paragraph 11.3:

4 11.3 Notwithstanding anything to the contrary set forth in this Paragraph 11, solely to the extent that, despite Disney s good faith efforts to satisfy its obligations set forth in Paragraph 11.1 (i.e., make all payments under this Agreement in United States Dollars), Argentine law and/or any Argentine governmental agency (including without limitation, the Argentine Central Bank) prohibits Disney from making such payments under this Agreement in United States Dollars ( Currency Conversion Prohibition ), the parties agree, on a non-precedential basis, that Disney shall be permitted to make such payments to Sony (or to any other Sony affiliate as may be instructed by Sony in writing) in local currency. For the avoidance of doubt, upon the repeal, lifting, or other expiration of the Currency Conversion Prohibition, Disney s obligations under Paragraph 11.1 shall immediately be reinstated and enforceable without any further action by Sony. h. Paragraph 16.2 shall be deleted in its entirety and replaced with Intentionally Left Blank. i. The first paragraph in Paragraph 17.1 shall be deleted in its entirety and replaced with the following (for the avoidance of doubt, Paragraphs and shall remain unchanged): 17.1 Replication: For quality assurance, anti-piracy and technical reasons, Disney will have DVDs and BDs manufactured only by Sony DADC in the case of BDs, and Teltron S.A. in the case of DVDs, and such other replicators as the parties may mutually agree upon in writing (each, Replicators ). The manufacturing will be (a) based on terms and conditions to be agreed between each Replicator and Disney, (b) a Cost of Goods under Paragraph 1.1.8, (c) invoiced directly by such Replicator (or Sony s authorized agent) to Disney, and (d) paid directly to such Replicator (or Sony s authorized agent) by Disney. j. Paragraph shall be amended by adding 11.2, after the words Paragraphs 6, 7, 9,. 2. Effective as of July 1, 2012: a. The definition of Territory in Paragraph shall be amended by inserting, Uruguay after Argentina. b. Paragraph 2.3 shall be amended by inserting the following sentence immediately after the first sentence therein: For purposes of this Paragraph 2.3, Sony hereby approves Astromax S.A. (RUT: ) as Disney s subdistributor of Product throughout Uruguay.

5 c. The first sentence of Paragraph shall be amended by inserting, Uruguay after Argentina. d. The following shall be added to the end of Paragraph 17.3: Notwithstanding any to the contrary set forth herein, with respect to all BDs and DVDs embodying Content held throughout Uruguay by Censa Video as Sony inventory (the Uruguay Units ), Disney will (a) purchase from (and negotiate directly with) Censa Video any or all of the Uruguay Units no later than August 31, 2012 (such Uruguay Units purchased by Disney are deemed to Products hereunder) and (b) in addition to its reporting obligations set forth in Paragraph 9, furnish Sony with an inventory report for such Uruguay Units purchased by Disney no later than ten (10) calendar days following the completion of such purchase, with the same level of detail as the monthly inventory reports furnished pursuant to Paragraph 9.6. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

6 Except as expressly amended hereby, all terms and conditions of the Agreement are and shall remain in full force and effect and constitute the legal, valid, binding, and enforceable obligations of the parties and nothing herein shall be deemed or construed to be a waiver of any such terms or conditions for the future or of any existing or subsequent breach thereof. This Amendment, including the Agreement and any amendments and attachments thereto, is the complete agreement of the parties and supersedes any prior agreements or representations, whether oral or written, with respect thereto. In the event of a conflict between the terms of this Amendment and the Agreement and any pre-existing amendments and attachments thereto, the terms of this Amendment shall govern as to the subject matter referenced herein IN WITNESS WHEREOF, the parties have executed this Amendment as of February 1, THE WALT DISNEY COMPANY (ARGENTINA) S.A. SONY PICTURES HOME ENTERTAINMENT INC. By: Its: By: Its: