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32 ORIGINAL PETITION.
manufactured for it by the Patents Cpmpany, licensees, without the consent in writing of the Ucensor.
(3) The Film Company agrees to pay a royalty to the licensor on all motion pictures purchased by it at the maximum rateof one-half cent per running foot. (Paragraph 9.) This royalty is subject to reduction if the amount purchased is over 4,000,000 running feet. If it runs as high as 10,000,000 feet, the royalty is reduced to 3^ mills per running foot. (Paragraph 10.)
(4) The Film Company agrees not to lease, sell, or otherwise dispose of motion pictures to anyone purchasing, using, dealing in, etc., motion pictures which are not the output of the General Film Company or of other licensees of the Patents Company. (Paragraph 12.)
(5) The Film Company agrees that no lease of positive motion pictures manufactured for or purchased by the licensee shall be made in the United States except upon certain conditions w^hich are practically the same as those which were stated in the rental exchange agreement executed between the Patents Company and the rental exchanges (supra, pp. 19 to 22) (paragraph 14), to wit:
1. The lessee (that is, the exhibitor) shall not dispose of the pictures, but shall only have the right to use them in machines licensed by the Patents Company under patents ow^ned or thereafter acquired by the Patents Company.
2. The lessee shall not sublet the motion pictures.
3. The licensee, that is, the Film Company, shall on the first day of every month withdraw from the market an amount of positive motion pictures equal to the amount of such motion pictures leased by it during the seventh month preceding the date of each such withdrawal.
4. The violation of any of these conditions entitles the lessor (General Film Company) to immediate possession of such motion pictures.