Motion Picture News (Jul - Sep 1930)

August 23, 1930 Motion Picture News 39 Distributor Draft of Proposed Contract HERE is the final text of distributors' proposed standard licensing agreement, completed by them following the Atlantic City meetings of the '"5-5-5" conference, held early in July, at which proposed changes in the agreement were drafted by distributors, the M. P. T. O. A. and Allied States Association. There still are a number of controversial points to be settled, it is understood. There are two forms to the agreement, a "long" and "short." The former, appearing below, is immediately followed by the "short" agreement: Agreement of license under copyright of the motion pictures distributed by the distributor for exhibition at the theatre of the exhibitor respectively named and specified in a Short Form License Agreement (hereinafter referred to as the Short Form) containing the Schedule hereinafter referred to, and in which Short Form by reference hereto there shall be deemed incorporated and made a part thereof all of the provisions of this Standard License Agreement as if therein fully set forth. This agreement of License and said Short Form shall be for all purposes deemed one complete and single instrument. WARRANTY AS TO FORM The distributor warrants that this license agreement contains all of the provisions of the twenty-six (26) numbered articles of the "Standard License Agreement" recommended by the Motion Picture Producers and Distributors of America, Inc.; the Motion Picture Theatre Owners of America and the Allied States Association of Motion Picture Exhibitors, an authenticated copy of which has been filed with each of said organizations. That any and all additional provisions arc not inconsistent with or in contradiction of the provisions of said numbered articles and are printed or written in the Schedule of the Short Form under the caption "Added Articles"; and that any such added provision shall be deemed to have been so added after the date of the recommendation of this form of Standard License Agreement, to conform with the distributor's own business policy. LICENSE AND TIME AND PLACE OF EXHIBITION First: Subject to the terms and conditions hereinafter stated, and those specified in the Short Form in which by reference hereto all the provisions hereof shall be deemed incorporated therein, the distributor hereby grants to tils' exhibitor and the exhibitor accepts a limited license under the respective copyrights of the motion pictures designated and described in the Schedule of the said Short Form all the provisions of print shall be deemed to include the records, discs and any other device which by this reference thereto are made a part hereof as if herein fully set forth; and if in such Short Form it is provided that this license is for sound motion pictures, under any copyright of any matter included in any sound recorded therefor, to exhibit pub'icity said motion pictures and to reproduce for public performances such recorded sound in synchronism therewith, but only at the said theatre for the number of successive days and for the sums in the said Schedule specified and for no other use or purpose. Each such license so to reproduce such recorded sound is granted upon the exhibitor's express warranty and upon condition (a) that the sound reproducing equipment in the said theatre will operate reliably and efficiently to reproduce such recorded sound with adequate volume and high quality whether recorded upon a print or upon records, discs or other similar devices; and (b) if copyrighted musical compositions are included in such recorded sound, the exhibitor now has or will have at the date or dates of the exhibition of each of such motion pictures and the reproduction of such recorded sound, an effective license from the copyright proprietor or from any licensee of the copyright proprietor to peform publicly the said copyrighted musical compositions. The distributor reserves the right to record the sound for reproduction in synchronism with the exhibition of said motion pictures or any of them on the print thereof or on records or discs as the distributor may from rime to time determine, provided that if the sound reproducing equipment in said theatre will reproduce sound recorded only on prints or only on discs, as represented and specified by the exhibitor in the Short Form, then upon written notice to the exhibitor of the recording of such sound only by means other than that specified in the Short Form, the exhibitor shall have the right to cancel this license agreement as to all motion pictures affected by such other method of recording upon written notice to such effect given to the distributor not later than fourteen (14) days after the receipt by the exhibior of he said notice of the distributor and upon the giving of such notice by the exhibitor the license as to each such picture shall terminate and revert to the distributor. If, however, the sound reproducing equipment in said theatre is thereafter during the term hereof changed by the exhibitor and as then changed reproduces sound recorded by such other method of recording, the exhibitor's notice of cancellation shall be deemed revoked and the license of the said motion pictures affected thereby reinstated upon written notice to such effect by the distributor, provided that said motion pictures shall not have been in the meantime licensed to another exhibitor for the same run in the same locality as that granted to the exhibitor and specified in the Short Form. If more than one theatre is designated no motion picture is licensed hereunder for exhibition at more than one of such theatres unless otherwise specifically agreed itnon in the Short Form. Provided this license is for sound motion pictures and the recorded sound is not recorded upon a print, all references hereinafter made to a upon which sound is recorded for reproduction in synchronism with the exhibition of a print. PAYMENT UPON PERCENTAGE BASIS SECOND: (a) If the license fee or any part thereof, of any of said motion pictures shall be computed upon the exhibitor's receipts, or any part thereof, the exhibitor shall deliver to the distributor at the end of each day's exhibition a correct itemized statement of the gross receipts of said theatre for admission thereto upon the exhibition date or dates of each motion picture for which payment is so required to be made, signed by the exhibitor or the exhibitor's manager and the exhibitor's cashier or treasurer, which statement shall include such additional facts and figures, if required in the Schedule, for the determination of the license fee. Should the distributor so require, such itemized statement shall be made upon forms furnished by the distributor. Upon the exhibition date or dates of each motion picture an authorized representative of the distributor is hereby given the right to verify the sale of all tickets of admission to said theatre, and the receipts therefrom; and for such purpose shall have access to the theatre, includine t*<» hoy o<f>cp. and also the rieht tn examine all entries relating to such gross receipts and such facts and figures in all the exhibitor's books and records, and if hereunder it is provided that the exhibitor make certain expenditures and/ or deductions, to examine all entries relating to such expenditures and/or deductions. The distributor, or its authorized representative, also shall have access for a period of four (4) months after the receipt by the distributor of each such statement, to all entries in all of the exhibitor's books and records relating to such gross receipts, expenditures and/or deductions and such facts and figures for the purpose of verifying such statement. The distributor agrees, unless such representative is an employee of the distributor or employed as a checker, not to employ as a representative for such purpose any person a resident of or employed in the place where the said theatre is located, other than a person engaged in business as an accountant. The distributor agrees that any information obtained pursuant to the provisions of this clause will be treated as confidential, excepting in any arbitration proceeding or litigation in respect to this license. LIQUIDATED DAMAGES FOR BREACH IF LICENSED UPON PERCENTAGE BASIS (b) If the license fee or any part thereof, of any of said motion pictures shall be computed either in whole or in part, upon a percentage of the admission receipts of said theatre or any part thereof or upon a percentage of such receipts and a fixed sum and if the exhibitor fails or refuses to exhibit any such motion picture as herein provided, the exhibitor shall pay to the distributor as liquidated damages for eaih day that the exhibitor fails or refuses to exhibit such motion picture, a sum equal to such percentage of the average daily gross receipts of such theatre during the period of thirty (30) operating days immediately prior to the date or dates when said motion picture should have been so exhibited, hereunder or, as the case may be. equal to such percentage of said average daily gross receipts plus such fixed sum provided, however, that if the exhibitor shall exhibit such motion picture for less than the full number of days provided for in the Short Form, for each dav less than the said full number of days, the sum equal to sixty-five per cent (65%) of the gross receipts of said theatre during the last day of the exhibition thereat of such motion picture. A sworn statement of the said daily gross receipts shall be delivered by the exhibitor to the distributor upon demand therefor. TERM THIRD: The term of this agreement shall begin with the date fixed or determined as hereinafter provided for the exhibition at the said theatre of the first motion picture deliverable heerunder and shall continue for a period of one year thereafter unless otherwise in the Short Form provided; or unless any of the motion pictures shall not be available for exhibition hereunder during said period of one year by reason of the provisions of Article Eighth hereof, then the said one_ year term sha 1 be deemed to be extended to the date of the expiration of the period of protection, if any, granted in respect to the last of said motion pictures deliverable hereunder and if no period of protection shall have been granted then to the last date of exhibition hereunder of such last motion picture. DELIVERY AND EXHIBITION OF PRINTS FOURTH: (a) The distributor agrees during the term of the license and within a reasonable time after each of said motion pictures is generally released for public exhibition and become available for exhibition by the exhibitor hereunder to deliver to the exhibitor a print in physical condition for exhibition, and if the license is for sound motion pictures, which will clearly reproduce the recorded sound in synchronism therewith, and the exhibitor agrees to exhibit such print of each of said motion pictures upon the date or dates during said term as herein provided. Such date or dates so fixed or determined shall be for all purposes the exhibition date or dates of each such motion picture as though definitely specified in the Short Form before execution thereof by the exhibitor. GENERAL AND PRE-RELEASE (b) The public exhibition of any of said motion pictures for three (3) consecutive days at prices customarily and usually charged for admission to the theatre where so exhibited in the territory wherein is located the exchange out of which the exhibitor is served, excepting any "road show," "tryout," "preview," or "pre-release" exhibitions thereof, shah be deemed the general release for public exhibition of such motion picture but only in such territory. A "pre-release" exhibition shall be deemed any exhibition because of seasonal conditions making desirable exhibitions in advance of general release as herein defined. EXHIBITION IN ORDER OF GENERAL RELEASE (c) The exhibitor agrees to exhibit each of the motion pictures licensed hereunder in the_ order of its general re ease by the distributor in the exchange territory in which the said theatre is located. The exhibitor shall have the right to select any of the motion pictures for exhibition out of the order of its general release, subject to prior runs and/or protections granted other exhibitors, on the date or daUs determined as provided in Article Seventh hereof or otherwise agreed upon, but only upon the following conditions (a) that the exhibitor is not in default hereunder and shall have fully complied with all the provisions, if any, set forth in the Short Form for the exhibition of one or more of said motion pictures at specified intervals; and (b) that the distributor and the exhibitor shall then agree upon the date or dates upon which all of the motion pictures generally released prior to the general release of such motion pictures and available for exhibition hereunder shall be exh bited bv the exhibitor, which date or dates shall be within thirty days from the first exhibition date of the motion picture to be exhibited out of the order of its general release; or in the alternative the exhibitor shall then pay to the distributor the license fee for each cf such motion pictures then generally released and av^i ah'e for exhibition hereunder, and as to any thereof which shall not be exhibited by the exhibitor within thirty days from the _ first exhibition date of the motion picture to be exhibited out of the order of its general release, the grant of the run and protection period in respect thereof shall be deemed waived by the exhibitor. Upon the failure or refusal of the, exhibitor to exhibit any of such motion pictures* then generally released and available for exhibition hereunder withm said thirty days period or to pay the license fee thereof, the right of the exhibitor to thereafter select for exhibition any motion picture out of the order of its general release shall be forfeited. The provisions of this paragraph (c) shall not be deemed to limit or qualify the provisions of Article Seventh hereof excepting as in this paragraph (c) specifically providi d. DELIVERY BY DISTRIBUTOR FIFTH: The Distributor shall make deliveries hereunder to the Exhibitor, or the Exhibitor's authorized agent, by delivery at the Distributor's exchange' or to a common carrier, or to the United States Postal Authorities. If deliveries