A/V Production Agreement - Colorado Satellite Broadcasting Inc. and Diorio Productions Inc.
A/V PRODUCTION AGREEMENT THIS AGREEMENT made the _____ day of ___________, 1997. BETWEEN: COLORADO SATELLITE BROADCASTING, INC. ("CSB") THE FIRST PARTY AND: DIORIO PRODUCTIONS INC. ("DPI") THE SECOND PARTY WHEREAS: (1) CSB operates several satellite television channels; (2) DPI is in the business of developing and producing television and film products; and (3) CSB desires to cause DPI to develop and produce broadcast quality audio-visual promotions and interstitials for its channels on the terms set forth in this Agreement. FOR VALUABLE CONSIDERATION, the receipt and sufficiency, of which are acknowledged, the parties agree as follows: 1. Subject to receiving broadcast quality, commercially acceptable audio-visual promotional pieces from DPI in a timely manner, CSB agrees to purchase Cdn$270,000 (the "Retainer") in services and products from DPI (in addition to reimbursement to DPI for any production disbursements incurred by DPI, with CSB's prior approval, in performing such services or supplying such products, which disbursements shall be paid forthwith by CSB upon invoice from DPI). The Retainer shall be paid to DPI in 9 equal monthly installments of Cdn$30,000 commencing _______. DPI shall invoice CSB for <PAGE> 2 its services inaccordance with its standard billing practices and shall apply payments of the Annual Retainer against such invoices. If and when the cumulative amount of invoices issued by DPI exceed Cdn$270,000, invoices shall become payable within 60 days of invoice date. 2. DPI agrees to create, as an agent of CSB, derivative works of films, photographs and other audio-visual materials ("Audio-Visual Works") for the purpose of promoting or advertising and producing interstitials of such Audio-Visual Works, provided that all such derivative works must be suitable for broadcasting "in the clear" (i.e., not contain x-rated or xxx-rated material). DPI is granted no other rights herein and DPI does not have the right to alter the fundamental character of the Audio-Visual Works or to make any other use of the Audio-Visual Works provided to it other than for the purposes of this Agreement. The derivative works created on behalf of CSB shall be the property of CSB. DPI warrants that the services it provides under this Agreement to CSB shall be substantially similar in quantity, quality, and price to those services provided by DPI to 1043133 Ontario Inc. in connection with the adult movies business which was acquired by CSB from 1043133 Ontario Inc. 3. The parties expressly agree that in all respects pertaining to this Agreement and its subject matter their rights, obligations and remedies shall be governed exclusively by the terms of this Agreement and that this Agreement supersedes any prior understandings and agreements between them with respect to its subject matter. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express or implied or statutory, between the parties other than as expressly made in this Agreement. For greater certainty, the parties expressly exclude the application of or recourse to any rights, obligations and remedies in tort. 4. No provision in this Agreement may be amended or waived except in writing. 5. Should any dispute be commenced between the parties concerning any provision of this Agreement or the rights and duties of any party in relation thereto, the party prevailing in such dispute shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its attorneys fees in such connection with enforcing its rights or defending itself, as the case may be. 6. Neither party may, without the prior written consent of the other party, assign, sublease or otherwise transfer its rights or obligations hereunder. 7. This Agreement shall be given by and construed in accordance with the laws in force in the State of Colorado and federal laws applicable therein. 8. The parties agree that this Agreement is an agreement for the purchase of services and does not create any partnership or joint venture between the parties. 9. This Agreement and any amendment thereto may be executed in any number of counterparts, all of which taken together, shall constitute one and the same instrument, <PAGE> 3 and any of the parties hereto may execute this Agreement by signing any such counterpart. 10. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 11. This Agreement is non-exclusive and CSB shall have the right to contract with other parties for similar services. Further, nothing herein stated shall obligate or require CSB to include or use the derivative works provided by DPI. IN WITNESS OF WHICH the parties have executed this Agreement. ) COLORADO SATELLITE ) BROADCASTING, INC. ) ) ) Per: ) ------------------------------------ ) ) DIORIO PRODUCTIONS INC. ) ) ) ) Per: ) ------------------------------------ )