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.greement

STANLEY WARNER CINERAMA CORPORATION

ROBIN INTERNATIONAL, INC.

AND

CINERAMA, INC.

DATED: JULY 3), 1954

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AGREEMENT made this twentieth day of July, 1954, by and between STANLEY WARNER CINERA:\fA CORPORATION, a Delaware corporation, having its principal offices at 321 West 44th Street, New York 36, New York (hereinafter referred to as "STANLEY WARNER"), ROBIN INTERNATIONAL, INC., a New York corporation, having its principal office at 11 West 42nd Street, New York 36, New York, (hereinafter referred to .as the "SUBLICENSEE") and CINERAMA, INC., a New York corporation, having its mailing address at Box 120, Oyster Bay, Long Island, New York (hereinafter referred to as "CINERAMA") as follows:

RECITALS:

(a) The Vitarama Corporation, a New York corporation (hereinafter referred to as "VITARAMA") is the owner of a certain process for producing and projecting motion pictures utilizing multiple cameras for photographing such pictures and utilizing multiple projectors for projecting such pictures on wide angle curved screens. Certain methods and apparatus used in such process are covered by Letters Patent and applications for Letters Patent in the United States and elsewhere, all of which are owned by VITARAMA. This process is hereinafter referred to as the "Cinerama Process" and rights under such patents and patent applications are hereinafter referred to as the "Patent Rights."

VITARAMA has granted to CINERAMA (subject to certain specific reservations) the exclusive right and license to use the Cinerama Process and the Patent Rights for the production and presentation of motion pictures, together with the exclusive right and license to manufacture or have manufactured for it such apparatus and equipment as may be required for such use, together with the exclusive right to lease such equipment to motion picture producers, exhibitors and others for the production and exhibition of motion pictures according to the Cinerama Process.

Such exclusive license extends for the full term for which the Letters Patent have been or may. be granted, unless sooner terminated as provided in such agreement, and carries with it the right to grant sublicenses.

(b) By agreement dated August 13, 1953 (such agreement and all modifications thereof are hereinafter referred to as the "Basic Agreement") CINERAMA has granted to STANLEY WARNER· a license for the United States and elsewhere to exhibit and produce motion pictures for theatrical purposes in the Cinerama Process for the term of CINERAMA's license from VITARAMA. Said license granted to STANLEY WARNER is exclusive until December 31, 1958, and non-exclusive thereafter and carries with it the right to grant sublicenses. The term -of such grant, the exclusive period of such term and the right to grant sublicenses are all subject to the conditions set forth in the Basic Agreement.

(c) Under the Basic Agreement, STANLEY WARNER also received from Cinerama Productions Corp., a New York corporation, (hereinafter referred to as "CINERAMA PRODUCTIONS") the exclusive license to exhibit a motion picture utilizing the Cinerama Process entitled "THIS IS CINERAMA." Such license extends throughout the world for the duration of the copyright and any renewal thereof and carries with it the right to grant sublicenses.

(d) SUBLICENSEE desires to obtain from STANLEY WARNER the right to use the Cinerama Process for the exhibition of motion pictures in certain countries other than the United States and Canada and a license to exhibit certain motion pictures produced in the Cinerama Process and SiANLEY WARNER is willing to grant such r.ghts to SUBLICENSEE upon all the terms and conditions herein set forth.

(e) To further effectuate the grant by STANLEY WARNER of said licenses, SUBLICENSEE desires to enter into certain agreements with CINERAMA for purposes which include, among others, extension of the exclusive period of SUBLICENSEE's rights, supervising the installation of exhibi.

tion equipment and the securing of facilities for the dubbing and transfer of sound tracks and CINERAMA is willing to' enter into such agreements upon the terms and conditions herein set forth ..

(f) STANLEY WARNER and CINERAMA have agreed to modify the duties owed to each other under the Basic Agreement so as to permit thcm to enter into the aforesaid agreements with SUBLICENSEE:

NOW, THEREFORE, m consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I.

Exhibition.

1. Grant of Sublicense to Sublicensee.

(a) Grant. STANLEY WARNER hereby grants to SUBLICENSEE a license, subject to the conditions herein, under the Patent Rights for, and only for, the territory, as hereinafter defined and limited in Subparagraph (c), Subdivision (vi), to exhibit or cause to be exhibited for theatrical purposes motion pictures in the Cinerama Process on the terms and conditions hereinafter set forth, such sublicense to continue for the term of the license granted to STANLEY WARNER in the Basic Agreement unless sooner terminated in accordance with the provisions of this agreement.

(b ) Countries. The territory licensed hereunder shall be located in the following countries:

Great Britain Brazil

France Italy

West Germany Japan Uruguay

Mexico Australia Spain Cuba Belgium

and Switzerland

subject to the limitations set forth in this agreement.

(c) Licensed Cities. (i) Immediately upon the execution of this agreement, SUBLICENSEE will select a theatre for the exhibition of motion pictures in the Cinerama Process in each of the following cities: London, Paris, Rome (or Milan), Duesseldorf (or one other city in West Germany in lieu of Duesseldorf) and Tokyo, and will open such theatres within the time and in the manner specified in Paragraph 5 of this agreement.

(ii) At any time within six (6) months from the date of commencement of exhibition by SUBLICENSEE under this license in any of the cities set forth in (i) above, SUBLICENSEE may designate any other city in the country in which such exhibition is commenced and such city or cities shall be included within the territory granted in this license, subject to all the terms and conditions of this agreement, and SUBLICENSEE agrees to open a theatre in each of such cities within the time and in the manner specified in Paragraph 5 hereof.

(iii) In addition, SUBLICENSEE may at any time on or before January 1, 1955, designate a city or cities within the remaining countries listed in (b) above for the exhibition of motion pictures in the Cinerama Process, to wit:

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Uruguay Brazil Mexico Australia

Spain

Cuba Belgium Switzerland

and such city or cities shall be included within the territory granted in this license, subject to the terms and conditions of this agreement and SUBLICENSEE agrees to open a theatre in each of such cities within the time and in the manner specified in Paragraph 5 hereof.

(iv) At any time within six (6) months from the date of commencement of exhibition by SUBLICENSEE under this license in any cities designated pursuant to subdivision (iii) above, SUBLICENSEE may designate any other city or cities in the country in which such exhibitions have commenced. and such city or cities shall be included within the territory granted in this license, subject to all the terms and conditions of this agreement, and SlJBLICE1\SEE agrees to open a theatre in each of such cities within the time and in the manner specified in Paragraph 5 hereof.

(v) Each of the five (5) cities set forth in Subdivision (i ) above and any other city designated by SUBLICENSEE pursuant to (ii), (iii) and (iv) above is hereinafter referred to as a "Licensed City." Such Licensed City shall include the area within the country of the Licensed City bounded by a circle whose center is the licensed theatre in such city and whose radius is Two .Hundred and Fifty (250) miles but in no event shall the city of Osaka be included in the area of Tokyo nor shall the city of Milan be included in the area of Rome (or vice versa).

(vi) Anything in this Paragraph 1 to the contrary notwithstanding, the territory of the license herein granted shall be limited to the five (5) Licensed Cities set forth in Subdivision (i) and such further Licensed Cities as may be designated and for which deposits shall have been made pursuant to Subparagraph (d) of this Paragraph 1.

(d) Designations. The right of SUBLICENSEE to designate cities as provided in this Paragraph 1 may only be exercised in the event that SUBLICENSEE shall have performed all the terms and conditions of this agreement on its part to be performed up to the date on which such designation is made. All designations by SUBLICENSEE shall be made by written notice sent to STANLEY WARNER by registered mail and must be accompanied by evidence satisfactory to STANLEY WARNER of a deposit to the credit of ST ANLEY WARNER for each theatre in each Licensed City so designated of the equivalent of ONE HUNDRED THOUSAND ($100,000) UNITED STATES DOLLARS in the currency of the country of the designated city at the official rate of exchange prevailing on the date such designation is mailed to ST ANLEY WARNER. Each such deposit shall be made in the manner and shall be subject to the terms and conditions set forth in Paragraph 18 hereof. All designations shall be deemed to have been made on the date when such notice with evidence of such deposit is mailed to ST ANLEY WARNER.

(e) Patent Protection. SUBLICENSEE understands that patent protection has not been obtained for the Cinerama Process in Cuba and Uruguay. CINERAMA acknowledges that STANLEY WARNER's license extends to Cuba and Uruguay and agrees that it will make application for such patent protection, provided that the cost of such patent protection is advanced by SUBLICENSEE . to CINERAMA and SUBLICENSEE shall have the right to recoup the cost of each such advance

from, and only from, the royalties otherwise payable to CINERAMA pursuant to Paragraph 19 hereof

On account of SUBLICENSEE's exhibition in each of such countries. •

(f) Theatrical Purposes. As used in this agreement, "theatrical purposes" is defined to include all exhibitions of motion pictures for which admission fees are charged.

2. Exc:lusive Period of SubUc:eIl8e.

STANLEY WARNER agrees that the sublicense granted in Paragraph 1 hereof shall be exclusive for the Licensed Cities so long as STANLEY WARNER's license from CINERAMA under the Basic Agreement shall be exclusive. SUBLICENSEE is aware that the exclusive period of STANLEY WARNER's license expires on December 31, 1958, but may expire prior to that time upon certain conditions set forth in the 'Basic Agreement. STANLEY WARNER shall not be liable to SUBLICENSEE nor shall SUBLICENSEE's obligations under this agreement be in any way modified or altered in the event that the exclusive period of STANLEY WARNER's license shall end prior to December 31, 1958. SUBLICENSEE acknowledges that it has examined the Basic Agreement, a copy of which has been initialled by SUBLICENSEE for identification, and is familiar with its provisions.

So long as SUBLICENSEE shall not be in default under this agreement, CINERAMA and STANLEY WARNER agree that regardless of when the exclusive period of STANLEY WARNER's license shall end, they will not license others to exhibit before December 31, 1960, motion pictures in

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the Cinerama Process in the Licensed Cities which have been duly 'designated within eig hteen (18) months from the signing of this agreement.

3. Right of Sublicensee to License Others.

The sublicense herein granted carries with it the right to sublicense others to exhibit motion pictures in the Cinerama Process for theatrical purposes in the Licensed Cities. Unless STANLEY WARNER shall consent in writing, no such sublicense shall be granted by SUBLICENSEE unless the royalties or other payments with respect to the exhibition by persons so licensed, shall equal the amount which would be payable by SUBLICENSEE hereunder if it had itself carried on the operations so sublicensed. Unless CINERAMA shall consent in writing no such sublicense shall be granted by SUBLICENSEE unless the royalties or other payments to be made to CINERAMA with respect to the exhibition by persons so licensed shall equal the amount which would be payable by SUBLICENSEE to CINERAMA hereunder if it had itself carried on the operation so sublicensed. SUBLICENSEE hereby guarantees full performance of all the obligations of its licensees in respect to said licensees' obligations to STANLEY WARNER and CINERAMA.

4. Supplying of Exhibition Equipment.

SUBLICENSEE recognizes that extensive special equipment is necessary to exhibit motion pictures in the Cinerama Process and that a certain amount of such equipment must be procured through CINERAMA. The items of equipment leased or purchased by STANLEY WARNER solely from CINERAMA for one (1) theatre are set forth in Schedule A annexed hereto and made a part hereof. The equipment set forth in Schedule A is hereinafter referred to as a "set of exhibition equipment." SUBLICENSEE understands that aside from the set of exhibition equipment as set forth in Schedule A, other parts and equipment, some of which are of special design, are necessary for the exhibition of Cinerama motion pictures, and SUBLICENSEE agrees that it will pay all costs thereof, recouping the same asa pre-opening expense, to the extent and in the manner set forth in Paragraph 19 hereof. STANLEY WARNER and CINERAMA .shall be under no duty or obligation to supply the same, but an of such other parts and equipment which SUBLICENSEE may wish to purchase from CINERAMA, will be purchased by SUBLICENSEE on the same terms and conditions as the same have been purchased by STANLEY WARNER, except that all payments to CINERAMA shall be made in advance of delivery.

STANLEY WARNER agrees to lease to SUBLICENSEE as many sets of exhibition equipment as shall be necessary to provide SUBLICENSEE with one (1) set for each of the Licensed Cities. Such sets of exhibition equipment will be made available to SUBLICENSEE at the factory of CINERAMA at Albertson, Long Island, New York, or at such other place in the State of New York designated by CINERAMA, (such other place to be not substantially further from New York City than Albertson, Long Island); such sets of exhibition equipment to be made available to SUBLICENSEE uncrated. All sets shall be made available by STANLEY WARNER after the theatre selected by SUBLICENSEE has been approved as provided in Paragraph 6 hereof and after written plans have been completed for the placement of screens and projectors. Anything in the foregoing to the contrary notwithstanding, STANLEY WARNER shall not be required to make more than two (2) sets available to SUBLICENSEE before August 1, 1954.

SUBLICENSEE understands that any sets of exhibition equipment beyond eight (8) will not be ready for delivery until at least six (6) months from the date of order, and that any such further sets will involve substantially greater costs to STANLEY WARNER than the cost of such eight

(8) sets. .

The initial lease period as to each set of exhibition equipment will be for four (4) years, less one day, from the date of its installation in a theatre.

STANLEY WARNER will advance the aggregate rental for the initial lease period for each of the sets of exhibition equipment (i.e., the items set lorthin Schedule A), such rental to be the

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rental and cost paid by STANLEY WARNER for each set of exhibition equipment. STANLEY WARNER shall make such payment for the rental and cost of the set of exhibition equipmentto CINERAMA prior to delivery. Such advance by STfu~LEY WARNER shall be recouped by STANLEY WARNER as a pre-opening expense in the manner provided in Paragraph 19 hereof, unless this agreement shall be sooner terminated as provided in Article VI il! which event, the rental for all sets which have already been made available to SUBLICENSEE shall immediately become due and owing to STANLEY WARNER by SUBLICENSEE.

SUBLICENSEE acknowledges that the equipment used in the exhibition of Cinerama motion pictures is extremely delicate. Accordingly, STANLEY WARNER and CINERAMA make no representations or warranties, express or implied, as to the operation, durability, freedom from defects, latent or patent, in the equipment rented by STANLEY WARNER to SUBLICENSEE hereunder. SUBLICENSEE accepts the agreement of CINERAMA to replace defective parts (as set forth in Paragraph 6) in full substitution for any claims which SUBLICENSEE might have against STANLEY WARNER or CINERAMA by reason of any such defect or failure in the exhibition equipment.

Prior to the expiration of the said initial lease period for any set of exhibition equipment, SUBLICENSEE agrees to negotiate with CINERAMA and STANLEY WARNER, for a renewal of the lease of said exhibition equipment. STANLEY WARNER and CINERAMA agree that they will not

. enter into an agreement for the extension of the lease of exhibition equipment whose leases expire after July 20, 1958, unless they shall offer to renew the lease of that portion of SUBLICENSEE's sets of exhibition equipment which are leased to STANLEY WARNE~ by CINERAMA upon substantially the same terms and conditions. In the event that no agreement is reached prior to the expiration of such lease, SUBLICENSEE agrees to remove the set of exhibition equipment from the theatre in which it is then located and redeliver the same to such place in the United States or elsewhere as shall be designated by ST ANLEY WARNER (such place to be not substantially further from the theatre in which the equipment is located than is New York City, N. Y.). Such redelivery shall take place no later than the expiration of such initial lease period. After redelivery of such set by SUBLICENSEE, STANLEY WARNER shall have thirty (30) days in which to examine such equipment and if STANLEY WARNER shall find that such equipment is not in good working condition (reasonable wear and tear excepted) or any parts thereof are missing, it shall submit to SUBLICENSEE a statement showing the cost of placing the equipment in good working condition (reasonable wear and tear excepted) and replacing any missing parts, and SUBLICENSEE shall promptly pay such cost to

STANLEY WARNER. .

SUBLICENSEE recognizes that STANLEY WARNER's lease under the Basic Agreement of the main items of the sets of exhibition equipment expires one (1) day after the lease granted to SUBLICENSEE by STANLEY WARNER expires. SUBLICENSEE readily understands that its failure to redeliver any set of exhibition equipment on or before the date its lease on such equipment expires may result in special damages to STANLEY WARNER. SUBLICENSEE hereby agrees to pay and to indemnify STANLEY WARNER against all claims, damages and expenses, including reasonable attorney's fees arising out of SUBLICENSEE's failure to redeliver the sets as aforesaid.

Where possible SUBLICENSEE will obtain permission to re-export the set of exhibition equipment to the United States prior to importing such set of exhibition equipment into a foreign country.

5. Commitment of Sublicensee to Open Theatres.

SUBLICENSEE agrees that, not later than One hundred and thirty-nine (139) days from the date of this agreement, it will have two (2) theatres, one of which shall be in London, and one of which shall be in Paris, Rome (or Milan), Duesseldorf (or some other city in West Germany), or Tokyo, fully equipped for the giving of/public exhibitions of motion pictures in the Cinerama Process and shall have actually commenced the giving of ,such public exhibitions, provided, however, if SUBLICENSEE shall have used due diligence in its efforts to commence such public exhibitions as aforesaid, but is unable so to do by reason of delays caused by governmental authorities, SUBLI-

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CENSEE shall be entitled to an additional period of time in which to commence such exhibitions equal to the period of delay, but in no event shall such period be longer than sixty (OJ) days.

SUBLICENSEE further agrees that on or before the first day of January, 1955, it will have three (3) further theatres, (viz. one in each of the remaining five (5) Licensed Cities set forth in Paragraph l(c)(i» fully equipped for the giving of public exhibitions of motion pictures in the Cinerama Process and shall have actually commenced the giving of such public exhibitions, provided, however, if SUBLICENSEE shall have used due diligence in its efforts to commence such public exhibitions, as aforesaid, but is prevented from so doing by delays caused by governmental authorities" SUBLICENSEE shall be entitled to an additional period of time in which to commence such exhibitions equal to the period of such delay, but in no event shall such period be longer than thirty (30) days.

In addition to the 60 day and 30 day grace periods as aforesaid, .if SUBLICENSEE shall have used due diligence in its efforts to ship the set of exhibition equipment to the country in which such exhibition is to commence and shall have actually commenced the shipment at least three (3) weeks prior to opening dates set forth above, but nevertheless the actual shipping time required shall be greater than three (3) weeks, SUBLICENSEE shall be entitled to an additional period of time in which to commence such exhibitions equal to the period in excess of three (3) weeks required for shipping time. As used in the preceding sentence, shipping time. shall mean the time required to ship the set of exhibition equipment from the port of exit in the United States to the port of entry in a foreign country, but such shipping time shall not include any time required to obtain customs and other clearances for the importing of the exhibition equipment into such foreign country.

SUBLICENSEE further agrees that in the event it shall designate further cities beyond the initial five (5) Cities set forth in Subdivision (i), Subparagraph (c) of Paragraph I hereof, it will within six (6) months from the date such designation i~ received by STANLEY WARNER have a theatre in said city fully equipped for the giving of public exhibitions of motion pictures in the Cinerama Process and shall have actually commenced the giving of such public exhibitions.

After a theatre shall have commenced the giving of such public exhibitions, it will give performances of motion pictures in the Cinerama Process continuously thereafter, i.e., at least one (1) such performance shall be given each day on which motion pictures are not prevented from being shown by reason of local customs or laws or governmental regulations.

In the event that CINERAMA shall require more than thirty (30) days from the receipt of the drawings and specifications of the theatre in the Licensed City selected by SUBLICENSEE and approved by STANLEY WARNER to complete the equipment and make the plans and drawings for the theatre installations and in the event that CINERAMA shall require more than six (6) weeks to dub the foreign language version (such six (6) weeks' period to commence from the date on which SUBLICENSEE has made available to CINERAMA an approved script and the services of actors for such script and such six (6) week period not to include preliminary rehearsals or delays caused solely by the persons engaged by SUBLICENSEE) or in the event that CINERAMA shall require more than one (1) week to complete theatre sound prints or in the event that STANLEY WARNER shall not deliver theatre picture prints to SUBLICENSEE in the time set forth in Paragraph 14 hereof, SUBLICENSEE shall be entitled to an additional period of time equal to the period of delay in their performance by STANLEY WARNER and CINERAMA, or either of them, in which to open the theatre in the manner aforesaid. The foregoing time extensions shall apply only in the event that SUBLICENSEE has taken all steps which. are prerequisite to performance by STANLEY WARNER or CINERAMA, as the case may be, sufficiently prior to the opening dates set forth in this Paragraph so as to afford STANLEY WARNER and CINERAMA adequate opportunity to complete the acts required to be performed by each of them prior to said opening dates. Any time extensions granted to SUBLICENSEE under this Paragraph 5 shall run concurrently where the delays on account of which such extensions have been granted occur concurrently.

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6. Installation and Maintenance of Cinerama Exhibition Equipment.

With respect to the installation of each set of exhibition equipment, STANLEY WARNER shall have the right to disapprove of any theatre if the theatre's design is such that from a technical viewpoint it is not feasible to make the installations or if in the sole opinion of STANLEY WARNER the location of the theatre is not desirable.

Prior to STANLEY WARNER's decision on each theatre it will consult with CINERAMA and if CINERAMA shall disapprove of such theatre because from a technical viewpoint it is not feasible to make the installation, STANLEY WARNER shall so indicate CINERAMA's disapproval to SUBLICENSEE. If CINERAMA shall disapprove but STANLEY WARNER shall approve the theatre, SUBLICENSEE agrees that CINERAMA shall have no responsibility for the quality of performances in such theatre. If STANLEY WARNER does not notify SUBLICENSEE of its approval of a theatre within 15 days from the receipt of written notice by STANLEY WARNER of the name of a theatre tentatively selected by SUBLICENSEE, such theatre will be deemed to have been approved by STANLEY WARNER. STANLEY WARNER agrees that any theatre of which it shall disapprove shall not be used or licensed by it for the exhibition of Cinerama motion pictures unless SUBLICENSEE shall first have been given the opportunity to include such theatre under its license, subject to all the terms and conditions of this agreement.

If in any Licensed City CINERAMA shall deem it necessary to survey a theatre with its own personnel in order to determine the technical feasibility of making an installation in such theatre, the direct salary, living and travel expenses of personnel engaged in such survey shall be considered as part of the cost to CINERAMA of the erection and installation of the equipment in the Licensed City whether or not the theatre surveyed by CINERAMA personnel is the theatre actually selected for the installation of the Cinerama exhibition. The expenses previously incurred by CINERAMA in surveying the Casino Theatre in London and the Normandie Theatre in Paris shall be included in the survey expenses of those respective cities,

CINERAMA agrees to supervise the erection and installation of the equipment necessary to employ the Cinerama Process in all theatres of SUBLICENSEE in the Licensed Cities, using such exhibition equipment. SUBLICENSEE agrees to follow all the recommendations of CINERAMA with respect to all installations. SUBLICENSEE agrees that items used with a set of exhibition equipment which affect the technical operation of the equipment must be approved by CINERAMA with respect to suitability and performance characteristics before they may be used; it being understood that CINERAMA will not unreasonably withhold such approval. CINERAMA agrees that all installations shall be as nearly as possible of the same quality and general character as are the in'stallations in the theatres in the United States now exhibiting Cinerama motion pictures.

SUBLICENSEE understands that CINERAMA will require approximately thirty (30) days from the date of receipt of the plans of the theatre designated by SUBLICENSEE and approved by STANLEY WARNER in which to complete the drawings and specifications of the equipment for such theatre and will further require approximately six (6) weeks in which to complete the installation and one (1) week to train the projectionists used in such theatre. Such' time limits are estimates based upon CINERAMA's experience with installations in the United States and may vary in accordance with the necessities of the local situation. CINERAMA estimates that with the personnel presently available for supervising installations it can supervise two (2) installations simultaneously, provided the second of such installations is commenced not more than three (3) weeks prior to the scheduled completion date of the first of such installations and provided, further, that no extensive travel time is required between sites.

Prior to the commencement of exhibitions in any of the Licensed Cities, CINERAMA will train projectionists and theatre engineers who will be engaged by SUBLICENSEE for the operation of the theatres. CINERAMA will also supply a quality control group which will advise SUBLICENSEE on the methods of maintaining proper operating standards. SUBLICENSEE agrees to compJy with CINERAMA's instructions as to quality control and to make no changes in the exhibition equipment or in the manner of exhibition unless CINERAMA shall first approve. Nothing herein contained shall be deemed to require CINERAMA to provide any maintenance or repair service for the equipment.

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SUBLICENSEE agrees to pay to CINERAMA TEN THOUSAND ($10,000) DOLLARS for each theatre opened by SUBLICENSEE, only one such payment to be made by SUBLICENSEE for each such theatre .. Said payment shall be made when plans and specifications of a theatre are delivered to CINERAMA. In addition, SUBLICENSEE shall pay to CIXElv\l\l;\ the direct cost of the salaries, travel and living expenses of CINERAMA's personnel engaged in the installation of each set of equipment, such payments to be made to CIKERAl\IA fr0111 time to time ill advance of the incurring of such costs by CINERAMA. The payments provided in this Paragraph shall be full compensation for all of the survey, supervision, training and quality control services to be performed by CINERAMA for SUBLICENSEE pursuant to this Paragraph.

Equipment parts which must be replaced by reason of ordinary wear and tear wiII be paid for by SUBLICENSEE at the same rate as is paid by STANLEY WARNER for like parts, payment to be made in advance of delivery. Equipment parts which have been supplied by CINERAMA and which CINERAMA in its sole discretion determines are defective, wiII be replaced by CINERAMA at its own expense.

In the event that any of the equipment becomes obsolete during the term of the lease of such equipment, STANLEY WARNER (if requested by SUBLICENSEE) will use its best efforts to obtain from CINERAMA up-to-date equipment to be leased by STANLEY WARNER to SUBLICENSEE on the basis of STANLEY WARNER's cost, as the same may be defined by STANLEY WARNER and CINERAMA for the replacement of obsolescent. equipment in STANLEY WARNER'S own theatres, for a lease of four (4) years, less one (1) day. Such rental shall be paid directly by SUBLICENSEE to CINERAMA in advance of delivery and may be recouped by SUBLICENSEE concurrently with the recoupment of the item recouped under Subparagraph 19B( 4).

The obligation of CINERAMA to SUBLICENSEE under this Paragraph shall be in full satisfaction for any similar obligations to STANLEY WARNER under the Basic Agreement as to, but only as to, the sets of exhibition equipment rented hereunder to SUBLICENSEE by STANLEY WARNER.

7. Cancellation of Underlying License.

In the event that the license granted to STANLEY WARNER by CINERAMA under the Basic Agreement shall be cancelled during the term of this agreement for causes other than a default by SUBLICENSEE, CINERAMA agrees to grant to SUBLICENSEE, the licenses, leases and other rights herein granted by STANLEY WARNER to SUBLICENSEE insofar as such licenses, leases and other rights are under the control of CINERAMA. In that event, payments hereunder to be made to STANLEY WARNER shall be made to CINERAMA, provided, however, that if STANLEY WARNER's pre-opening expenses for any theatre have not been recouped CINERAMA agrees that STANLEY WARNER shall continue to recoup its pre-opening expenses from the theatre receipts in the manner provided in Paragraph 19 hereof, and provided, further, that STANLEY WARNER shall continue to receive 35% of gross theatre receipts as film rental for motion pictures licensed to SUBLICENSEE by STANLEY WARNER, as provided in Paragraph 19 hereof.

If, after the termination of STANLEY WARNER's license, SUBLICENSEE shall require further sets of exhibition equipment and STANLEY WARNER shall be unwilling to supply the same, CINERAMA shall have an option to (a) itself advance the cost of the equipment, in which event, CINERAMA shall be entitled to all the payments from the theatre in which the equipment is placed which STANLEY WARNER would otherwise have been entitled to, except the film rental for films licensed to SUBLICENSEE by STANLEY WARNER, or (b) request that SUBLICENSEE advance the cost of such equipment and in that event CINERAMA will be entitled to receive, after the recoupment by SUBLICENSEE of pre-opening expenses for such theatre, 1 % of the gross theatre receipts from the theatre in which the equipment is used. The payments provided to CINERAMA under the exercise of either alternative shall be in addition to the royalties and other payments provided for CINERAMA. In the event that SUBLICENSEE shall make

designations, as provided in Paragraph 1 hereof, after STANLEY WARNER's license shall be cancelled, the payment of the equivalent of ONE HUNDRED THOUSAND ($100,000) DOLLARS provided in' said Paragraph to be made with each designation shall be placed in escrow with a bank of CINERAMA's choosing in the designated city, and shall be released to CINERAMA in the event that SUBLICENSEE fails to open the theatre in such designated city in the time and in the manner provided in Paragraph 5 hereof. SUBLICENSEE agrees, to accept such licenses and leases from CINERAMA in full substitution for any and all obligations and liabilities of STANLEY WARNER hereunder and releases and relieves STANLEY WARNER of any and all such liabilities and obligations of STANLEY WARNER to it or its licensees as of the date of the cancellation by CINERAMA of its license to STANLEY WARNER. SUBLICENSEE and STANLEY WARNER agree that if SUBLICENSEE shall thus become the direct licensee of CINERAMA, CINERAMA shall have the right to enforce any and all of the rights and remedies provided to STANLEY WARNER under this agreement, provided, however, that STANLEY WARNER shall also retain all of such rights and remedies but may only exercise them with respect to (a) the sets of exhibition equipment' for which the rental has not been recouped in full by STANLEY WARNER, and (b) the Cinerama motion pictures then being exhibited by SUBLICENSEE which shall have been licensed to it by STANLEY WARNER.

8. Legal Title to Equipment.

Legal title in all Cinerama exhibition equipment and parts thereof furnished hereunder to SUBLICENSEE shall remain and be vested in CINERAMA and STANLEY WARNER, as the case may be, subject only to the, right of SUBLICENSEE to the use thereof, in accordance with and subject to the terms of this agreement. SUBLICENSEE agrees at its own cost and expense "to insure each set of exhibition equipment for the full insurable value thereof in the name of CINERAMA and STANLEY WARNER, as their interest may appear, against all risks, including but not limited to loss or damage by reason of fire, flood, theft or other casualty whether or not caused by SUBLICENSEE's negligence. Said insurance shall be placed with recognized United States companies and shall be taken out by SUBLICENSEE when the set of exhibition equipment is made available to SUBLICENSEE. Within ten (10) days after the taking out of such insurance SUBqCENSEE will deliver to STANLEY WARN1:R and CINERAMA certificates evidencing such insurance.

ARTICLE II.

Liceueof Cinerama Motion Pictures. 9. Grant of LiceDSeS of Cinerama Motion Pictures to SublicellSee.

STANLEY WARNER hereby grants to SUBLICENSEE a license to exhibit "THIS IS CINERAMA" and all other 'motion pictures produced or to be produced in the Cinerama 'Process b¥ or for STANLEY WARNER. Such license is granted subject to all the terms and conditions of this agreement and is to continue for the length of the initial run of such Cinerama motion pictures in each theatre licensed hereunder, unless sooner terminated in accordance with the provisions of this agreement, provided, however, if by exercising the rights granted to it under Paragraph 11 hereof such initial run of any such Cinerama motion picture shall be interrupted by STANLEY WARNER, SUBLICENSEE shall have a license to re-run such interrupted motion picture. The license for such re-run is granted on condition that such re-run commences immediately after the run of Cinerama motion pictures for which playing time has been designated by STANLEY WARNER pursuant to Paragraph 11 hereof. In the event that such re-run is interrupted by the further exercise by STANLEY WARNER of the rights granted to it under Paragraph 11 hereof, a license for additional re-runs will be granted to SUBLICENSEE provided such additional re-runs commence immediately after the run of the Cinerama motion picture for which playing time has been designated by STANLEY WARNER pursuant to Paragraph 11 hereof. The license herein granted is confined to the exhibition of

9

each such motion picture solely and only in the Cinerama Process and in SUBLICENSEE's theatres and in those theatres licensed by SUBLICENSEE in the Licensed Cities solely for viewing by patrons present in such theatre and in no other manner and place. STANLEY WARNER hereby reserves and retains all other rights of every cnaracter and nature to and in such motion pictures and the right to exercise any and all such other rights concurrently with the exercise by SUBLICENSEE of the rights granted to it hereunder, provided, however, that in the Licensed Cities STANLEY WARNEl{ shall not license the exhibition or exhibit or cause others to license or exhibit any such motion picture in non-Cinerama motion picture form or to televise such picture (except that STANLEY W ARNER may at all times televise an excerpt of not more than three (3) minutes duration for the purpose of exploiting such other rights as are retained by it) until sixty (60) days after the end of the initial run or any licensed re-run (as set forth in this Paragraph), whichever is later, of the Cinerama version of such picture in such city, nor shall STANLEY WARNER advertise or announce or permit others to advertise or announce the exhibition of any such non-Cinerama motion picture form or television performances until the initial run or re-run in the Cinerama version as aforesaid, whichever is later, has been completed in such Licensed City.

SUBLICENSEE agrees that each motion picture shall be exhibited in its original continuity of subject and that it will not remove or eliminate or permit the removal or elimination f.rom any print of any musical compositions or other music (background, visual, vocal, or otherwise) which may be recorded upon or synchronized in said print as delivered to SUBLICENSEE hereunder and SUBLICENSEE agrees that it will not in any wise substitue for or replace or permit the substitution or replacement of any such music with any other music and that the motion picture licensed hereunder will not be added to, altered, deleted, interpolated or otherwise change in any manner whatsoever, excepting the substitutions of a foreign language sound track for the American version (such foreign language sound track to be a translation of the American version) and excepting such further changes as may be necessary to oonform to the laws of any country or city herein embraced or rulings of legally constituted authorities thereof.

Prior to the making of such .foreign language sound track SUBLICENSEE will submit to STANLEY WARNER five (5) copies of the script in the foreign language for such sound track. STANLEY WARNER shall have the right of approval for such script and once such approval has been obtained, no changes shall be made in such script without obtaining STANLEY WARNER's further approval. Failure by STANLEY WARNER to disapprove of such script within five (5) business days after its receipt by STANLEY WARNER shall be deemed to be approval by STANLEY WARNER.

SUBLICENSEE agrees to submit to STANLEY WARNER an itemized list of any changes or deletions required to be made by SUBLICENSEE for the exhibitions herein licensed to it, in compliance with the requirements of any board of censors or other duly constituted authority and where there are alternative methods of complying with such requirements STANLEY WARNER shall have the right to designate the alternative to be followed by SUBLICENSEE.

SUBLICENSEE agrees that with respect to each picture exhibited by it under this agreement, it will obtain such licenses and pay such fees as may be required to reproduce any copyrighted music contained in such motion picture, including but not limited to theatre licenses and other licenses and fees which may be required by the performing right society or association, if any, functioning in the territory in which such theatre or other place of entertainment is located.

'SUlBLICENSEE agrees to notify STANLEY WARNER at least fifteen (15) days prior to the first public exhibition of each motion picture licensed to it hereunder in each of the Licensed Cities.

10. Polley.

SUBLICENSEE agrees that it will exhibit all films licensed to it under this agreement in each of , the Licensed Cities. Each such Cinerama motion picture shall be exhibited alone and not in conjunction . with any other motion picture or 'other attraction in the theatre. Each such exhibition shall be under

10 .

a "road show" policy as such term is understood in the motion picture industry. SUBLICENSEE agrees to consult with STANLEY WARNER in respect to the number of performances per day but ' SUBLICENSEE shall be entitled to make the final determination on this matter.

Prior to opening any theatre for the exhibition of Cinerama motion pictures, SUBLICENSEE shall submit to STANLEY WARNER a schedule in writing of the admission prices proposed to be charged in such theatre, such proposed prices shall be subject to STANLEY WARNER's approval; once approved the price schedule shall be strictly adhered to by SUBLICENSEE and any changes proposed by SUBLICENSEE shall be subject to STANLEY WARNER's prior approval. All price schedules to be submitted to STANLEY WARNER under this Paragraph shall be deemed approved by STANLEY WARNER unless disapproved by STANLEY WARNER within five (5) business days from their receipt by STANLEY WARNER. If at any time after a price schedule has been approved, there should be a change in the official rates of exchange SUBLICENSEE agrees that it will forthwith adjust its prices so that the minimum admission price after admission taxes, is One Dollar ($1.00) at the official rate of exchange then prevailing.

I

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11. Runs of the Licensed Cinerama Motion Pictures.

Themotion pictures licensed to SUBLICENSEE shall be exhibited in the order of delivery. However, if STANLEY WARNER's arrangements with producers or co-producers of Cinerama motion pictures shall make it desirable, in the opinion of ST ANLEY WARNER, to commence exhibition of such Cinerama motion pictures in the Licensed Cities at a particular time, STANLEY WARNER shall have the right to require SUBLICENSEE to commence the exhibition of such Cinerama

, motion pictures at such time and SUBLICENSEE shall comply with the requirements of STANLEY WARNER even if compliance shall require the interruption of the run of any other Cinerama motion picture, and STANLEY WARNER shall exercise this right by notice sent to SUBLICENSEE at least thirty (30) days prior to the date on which STANLEY WARNER shall request such exhibition to commence.

Notwithstanding the foregoing, STANLEY WARNER shall not designate a date for the commencement of the exhibition of any such Cinerama motion picture in any of the Licensed Cities earlier than one (1) year after the commencement of the first exhibition of such Cinerama motion picture in the United States.

SUBLICENSEE will give to Cinerama motion pictures licensed by STANLEY WARNER priority of exploitation and exhibition dates over any Cinerama motion picture which may be licensed to it by others or may be produced by or for it after the exclusive period of STANLEY WARNER's license to produce Cinerama motion pictures has expired.

12. Royalty Expense to Parties Other Than Cinerama.

SUBLICENSEE is aware of the fact and acknowledges that for the Licensed Cities there may be royalties payable to one or more parties which may own patent rights in connection with 'the recording, synchronization, the dubbing, re-dubbing and re-recording of the sound in connection with any such motion pictures and agrees to pay all such royalties.

13. Advertising by SUblicensee.

SUBLICENSEE agrees that all advertising, including announcements in newspaper and other publications, publicity matter and advertising accessories shall generally conform where possible with the form of announcement used by STANLEY WARNER in the United States with respect to such motion picture. Advertising, publicity and advertising accessories need not be approved in advance by STANLEY WARNER but copies of all advertising, publicity and advertising accessories shall be submitted to STANLEY WARNER and any advertising, publicity and advertising accessory disapproved by STANLEY WARNER shall be withdrawn.

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14. Delivery of Cinerama Motion Picture to Sublicensee;

As used in this agreement delivery of a Cinerama motion picture to SLiilLICEl\SEE shall constitute delivery of the following:

(a) An authorization to Cinerama permitting Cinerama to lise the sound tracks of said picture, to reproduce theatre sound prints and to dub foreign language versions. ST:\I\LEY WARNER will supply CINERAMA with separate sound tracks and sound negative necessary for making theatre sound prints and foreign language dubbing's,

(b) One (1) theatre release picture print of the completed picture to be delivered to CINERAMA's studio. Such print may be used by SUBLICENSEE in 'its theatre subject to the conditions of this Paragraph.

(c) One (1) music cue sheet showing particulars of all music synchronized with the motion picture.

(d) Ten (10) copies of a detailed dialogue and action continuity of the picture.

Except as is otherwise specified above, delivery shall be made to SUBLICENSEE at its office 111 the City of New York. SUBLICENSEE agrees to pay to STANLEY WARNER the cost of all materials delivered as set forth in (b) through (d) above, in advance of such delivery.

SUBLICENSEE will order theatre release picture prints for the Cinerama motion pictures delivered to it only from STANLEY WARNER. Accompanying such order must be a payment to STANLEY WAl{NEl{ covering the cost of manufacturing such theatre picture prints and the cost of assembling such prints on reels. STANLEY WARNER will order such theatre picture prints from Technicolor Motion Picture Corporation, and will assemble such prints on reels and thereafter will deliver them to SUBLICENSEE at STANLEY WARNEl{'s office in New York. SUBLICENSEE agrees that the requirements of STANLEY WARNER for prints for the United States and Canada and for other facilities supplied by Technicolor Motion Picture Corporation and the requirements of STANLEY WARNER for the use of its facilities for assembling prints on reels for its own use shall have absolute priority over' the orders of SUBLICENSEE. SUBLICENSEE agrees that STANLEY WARNER shall not be liable to SUBLICENSEE in any manner because of delays in delivery of prints whether or not such delays are caused by such priority of STANLEY W ARNER, except that the failure of STANLEY WARNER to deliver the first order for each theatre to SUBLICENSEE (to wit, three (3) sets of release picture prints for each of SUBLICENSEE's theatres), sixty-three (63) days after the order and accompanying payment have been received shall give SUBLICENSEE an extension of its time to open the theatre for which the prints are ordered equal to the delay. SUBLICENSEE waives any and all warranties, express or implied, regarding theatre picture prints delivered to it by STANLEY WARNER pursuant to this Paragraph, except that without liability or expense on its part, STANLEY WARNER will extend to SUBLICENSEE the benefit of any and all warranties" express or implied, made to it by Technicolor Motion Picture Corporation. It is understood and agreed by the parties hereto that the prints supplied to SUBLICENSEE shall at all times remain the sole and exclusive property of STANLEY WARNER and that such prints are leased to SUBLICENSEE only until the end of the period of the license of each Cinerama motion picture, as defined in Paragraph 9. Notwithstanding the foregoing, if this agreement shall be terminated as provided in Paragraphs 26 and 27 hereof, the lease on all prints furnished to SUBLICENSEE shall end on the date of such termination. Upon the expiration of such lease period, SUBLICENSEE agrees to return promptly to ST ANLEY WARNER all prints supplied by STANLEY WARNER not previously returned by SUBLICENSEE. It is understood that SUBLICENSEE may move prints from one theatre operated by it to any other theatre operated by it exhibiting the same Cinerama motion picture subject to the requirements that SUBLICENSEE returns a worn-out print to STANLEY WARNER for each print moved over as provided below.

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The initial order by SUBLICENSEE shall request no more than three (3) sets of release picture prints for each of SUBLICENSEE's theatres and thereafter STANLEY WARNER shall not be required to supply a greater number of prints than shall be reasonably necessary to meet SUBLICENSEE's operating requirements in each theatre. Sixty (60) days after the receipt of a new print from STANLEY WARNER (other than one of the initial order), or after the replacement of a print with one in another theatre, SUBLICENSEE will return to STANLEY WARNER the worn out print which is replaced.

In the event that any. dispute shall arise between SUBLICENSEE and STANLEY WARNER, which STANLEY WARNER shall believe entitles it to cease delivery of prints to SUBLICENSEE, it shall notify SUBLICENSEE in writing to this effect. Within two weeks from the receipt of such notice by SUBLICENSEE, SUBLICENSEE and STANLEY WARNER will submit such dispute to arbitration, the sole arbitrator to be Mr. S. H. Fabian. Mr. Fabian shall establish the manner of procedure to be followed in such arbitration. The only question which shall be presented to the arbitrator shall be whether or not STANLEY WARNER is entitled to cease delivery of prints to SUBLICENSEE, and the decision of Mr. Fabian shall be final and binding on both parties. No other rights or remedies of the parties shall be affected by the aribitrator's decision except that neither party shall be liable to the other in any manner if it shall thereafter carry out the decision of the arbitrator. The parties understand that Mr. Fabian is presently the President and a Director of STANLEY WARNER and has an interest in a stockholder of STANLEY WARNER CORPORATION which corporation is the majority stockholder in STANLEY WARNER, and may therefore have an interest in the outcome of the arbitration. SUBLICENSEE agrees that it, its successors, assigns, licensees or other contractees shall not at any time or place or in any proceeding whatsoever hold or attempt to hold Mr ~ Fabian liable in any way by reason of any decision or action that he may take or that may result from this arbitration and SUBLICENSEE for itself, its successors and assigns does agree to indemnify Mr. Fabian for any and all cost and expense, including attorney's fees, which he may incur by reason of his acting as arbitrator or by reason of any action or proceeding which may be brought against him because of such arbitration. During the period of arbitration, STANLEY WARNER will authorize Technicolor Motion Picture Corporation or will itsel£continue to honor the orders of SUBLICENSEE for theatre picture prints subject to the terms and conditions of this Paragraph. The foregoing provision of this Paragraph relating to the arbitration of a dispute between STANLEY WARNER and SUBLICENSEE shall not apply in the event that STANLEY WARNER shall terminate this agreement in its entirety as provided in Paragraphs 26 and 27 hereof.

SUIBLICENSEE agrees that the theatre sound print necessary for the exhibition of Cinerama motion pictures will only be produced at the studios of CINERAMA which are now located at Oyster Bay, New York. and understands that these facilities of CINERAMA are required for the making of sound prints for STANLEY WARNER and that CINERAMA has agreed to·give to STANLEY WARNER first priority in the use of such sound facilities. Subject to all of the foregoing, CINERAMA agrees that it will make for SUBLICENSEE theatre sound prints for the Cinerama motion pictures solely at SUBLICENSEE's expense; the charge to SUBLICENSEE to be the' same as the charge agreed to be paid by STANLEY WARNER for similar services and payment for such theatre sound prints shall accompany the order for such prints. At this time CINERAMA charges to STANLEY WARNER seven cents (7¢) per foot for the sound print but such charge is subject to change. CINERAMA shall not be responsible to SUBLICENSEE for any delays in the scheduling or completion of such sound prints caused by the necessity of giving priority to orders of STANLEY WARNER as aforesai4, except that the failure of CINERAMA to deliver the theatre sound prints to SUBLICENSEE at its office in New York City, N. Y. one (1) week after the order and accompanymg payment have been received by CINERAMA shall give SUBLICENSEE an extension of its time to open the theatre for which such sound prints are ordered equal to the delay.

SUBLICENSEE shan have the right to have dubbed into the sound print a foreign language translation of the dialogue of the American version. . SUBLICENSEE agrees that such dubbing

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- ------._ -_-._. __ ._ ---_.- .. - - - -_._--. -_. -. _"_. _._- -- -.-.- _._ .. --'_ ~ -,' _._.

,,-..__ ( '.

-- .. , .~ ... - .. - .. ~-.~ ...... _--_- ... _-

will only be performed at the facilities of CINER,-AMA now located at Oyster Bay, New York. (In the event that CINERAMA's facilities cannot be used for such dubbing by reason of fire, strikes or reasons beyonci 'CINERAMA's control, CINERAMA will use its best efforts to obtain another studio facility at which such dubbing can be performed, and if CINERAMA is unsuccessful in obtaining studio facilities for such dubbing STAN LEY WARNER agrees that it will obtain dubbing facilities for SUBLICENSEE). Subject to the first priority of STANLEY WARNER on the use of such facilities. CINERAMA agrees that it will co-operate with SUBLICENSEE in making its facilities available for the dubbing of such foreign language versions, but CINERAMA shall not be responsible to SUBLICENSEE for any delays in the scheduling or completion of such dubbing, caused by the necessity of giving priority to STANLEY WARNER as aforesaid. All such dubbing shall be at SUBLICENSEE's sole cost and expense and SUBLICENSEE agrees that payment for such cost shall be made to CINERAMA within thirty (30) days from billing. SUBLICENSEE agrees that in no event shall it permit more than TEN THOUSAND ($10,000) DOLLARS of unpaid billings to be outstanding at anyone time and CINERAMA will submit to STANLEY WARNER at the end of each calendar month a statement showing the amount of SUBLICENSEE's billings then unpaid. The charge by CINERAMA to SUBLICENSEE for such facilities' shall be the same as the charge to be paid by STANLEY WARNER for comparable services. The present rate of such charges are set forth in Schedule B annexed hereto and made a part hereof, and the prices shown on such Schedule are subject to change.

SUBLICENSEE agrees that all release prints and sound tracks used by it or its licensees shall be kept in first-class condition in order to give the proper projection and performance thereof.

15. Dates of Delivery of Cinerama Motion Pictures to Sublicensee.

Delivery of Cinerama motion pictures, as defined in Paragraph 14 hereof, will be made by STANLEY WARNER to SUBLICENSEE not later than sixty (60) days after the first exhibition of such motion picture in the United States. As to "THIS IS CINERAMA," STANLEY WARNER will make such delivery to SUBLICENSEE fifteen (15) days from the date of the signing of this agreement.

STANLEY WARNER shall be under no duty to make such delivery of any Cinerama motion picture or of any theatre release picture prints, if SUBLICENSEE shall have committed a default as defined in Paragraph Zlhereof, .and until SUBLICENSEE shall have paid for all costs of such delrvery.

16. Credits in Licensed Motion Pictures.

SUBLICENSEE agrees to grant appropriate credit to Merriam C. Cooper and Lowell Thomas and SUBLICENSEE agrees to continue all other existing credits as now shown in "THIS IS CINERAMA" and agrees further that Rockaways' Amusement Park shall be given credit pursuant to their agreement with CINERAMA PRODUCTIONS dated January 21, 1953, in the exhibition of what is now known as the "Roller Coaster Scene" of "THIS IS CINERAMA" (a copy of said agreem~nt. o( January 21, 1953 has been initialled by SUBLICENSEE for indentification).

Upon delivery by STANLEY WARNER of any other Cinerama motion picture to SUBLICENSEE, STANLEY WARNER will accompany such delivery with complete statements or extracts from contracts relating to all credits to be given on the film. accessories, printing, advertising and publicity matter, to authors, artists, directors, producers and others entitled thereto. SUBLICENSEE agrees that it and its licensees and contractees will abide by such statements and will give credit in strict accordance with such statements and further agrees not to remove or alter or permit the removal or alteration of . the. name of the producer, director, author or artists or any other designation or credit from release prints shown in the theatre.

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· ARTICLE III.

Expenses and Distribution of Proceeds.

17. Expenses of Sublicensee.

Except as otherwise specifically provided, SUBLICENSEE agrees to take all necessary steps and incur all necessary expenses in connection with the alteration of theatres and the installation of the set of exhibition equipment, exhibition, distribution and exploitation of Cinerama motion pictures under this license, it being the intention of the parties that STANLEY WARNER is not to payor advance any funds for this purpose other than those which STANLEY WARNER has specifically agreed to advance under Paragraph 4 of this agreement. Without limiting the generality of the foregoing, SUBLICENSEE agrees that it will assume and pay all taxes, duties, shipping charges, fees, censorship and other charges which may be necessary· to properly alter the theatre, install the set of exhibition equipment, exhibit, distribute and exploit any such Cinerama motion picture in the Licensed Cities.

18. Security Payments.

SUBLICENSEE agrees that for each Licensed City or designated city in which it will exhibit· Cinerama motion pictures, it will deposit in the local currency at the official rates of exchange prevailing on the date of the deposit, the equivalent of ONE HUNDRED THOUSAND ($100,000) U. S. DOLLARS in a bank in each of the foreign countries in which a Licensed City is located, or with a designee of STANLEY WARNER in such foreign country, and such depository bank or designee shall be named solely by STANLEY WARNER. Such deposits shall be unconditionally made in STANLEY WARNER's name (or the name of the designee of STANLEY WARNER) and the deposit shall be subject only to STANLEY WARNER's unconditional withdrawal. Such deposit shall be free and clear of all liens or charges. Nothing herein contained shall require STANLEY WARNER to hold said deposit as a trust or fiduciary fund and it is hereby expressly agreed that said deposit may be used or transferred by STANLEY WARNER for any purpose whatsoever and may be comingled with the general funds of STANLEY WARNER or its designee.

Anything in the foregoing paragraph to the contrary notwithstanding, two (2) days after the opening by SUBLICENSEE of a Cinerama theatre and the commencement of the exhibition of motion pictures in the Cinerama Process on the date and in the manner set forth in Paragraph 5 hereof, STANLEY WARNER will repay to SUBLICENSEE or any designee of SUBLICENSEE the amount deposited by SUBLICENSEE in the Licensed City in which such theatre has opened and commenced exhibitions as aforesaid. Such repayment shall be made in the country in which such theatre is opened less any taxes, fees or other payments required to be made to governmental authorities or banks by reason of the deposit or the repayment thereof thereafter to SUBLICENSEE.

SUBLICENSEE agrees that STANLEY WARNER shall not be liable to it in the event that such repayment cannot be made by reason of the imposition of any statute or governmental regulations or court order which affects the transfer of such funds. ST ANLEY WARNER, agrees that it will not remove the said deposit from the country in which it is made unless and until SUBLICENSEE shall have failed to open a Cinerama theatre and commenced the exhibition of motion . pictures in the Cinerama Process on the date and in the manner set forth in Paragraph 5 hereof.

With respect to the first five (5) Licensed Cities enumerated in Paragraph l(c)(i) SUBLICENSEE will deposit security payments provided for in this Paragraph 18 within three (3) business days from the date of this agreement. With respect to other cities which may be designated pursuant to Paragraphs 1 (c)(ii), (iii) and (iv), SUBLICENSEE will deposit the security payments at the time set forth in Subparagraph 1 (d).

19. Allocation of Gross Receipts.

A. The gross receipts of each theatre exhibiting Cinerama motion pictures in the Licensed Cities shall be distributed prior to the recoupment of pre-opening expenses (as set forth below) as follows:

(a) Six percent (6%) thereof shall be paid to CINERAMA as Patent royalties until CIN.

ERAMA shall have received as such royalties a sum equivalent to six (6) times the cost to

15

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CINERAMA of the salaries. travelling and living expenses of its personnel used in surveying theatres in each Licensed City and supervising the installation of the exhibition equipment in each theatre '(for the purpose of this computation, where such costs have been incurred by CINERAMA in dollars, they shall be deemed to have been incurred in the local currency at the official rate of exchange prevailing on the date when this distribution is made) and thereafter the patent royalties payable to CINERAMA shall be reduced to five percent (50/0).

(b) Forty percent (400/0) hereof shall be retained by SUBLICENSEE to cover all the operating costs of the theatre whether or not such theatre is owned or leased by SUBLICENSEE or by its licensees, such operating costs include but are not limited to expenses for advertising and promotion which relate to the period after the theatre has been opened, actual rentals of the theatre property under lease or to be leased, salaries of, employees, rentals for the sets of exhibition equipment after the expiration of the initial lease period (four (4) years, less one (1) day), property taxes and all other expenses incurred in the operation of the theatre, it being understood that the forty percent (400/0) to be retained by SUBLICENSEE in full reimbursement for all operating costs even though the actual cost of these items may be greater or less than such amount.

(c) Five percent (5%) shall be retained by SUBLICENSEE as an administrative fee, such fee shall be divided and paid eighty percent (SO % ) to SUBLICENSEE and twenty percent (20%) to STANLEY WARNER.

(d) From the balance of such gross receipts then remaining, SUBLICENSEE shall deduct and retain for Itself the cost of theatre picture and sound prints beyond the cost of the original three (3) sets of such prints. For the purpose of this computation, the cost of such prints shall be the cost to SUBLICENSEE in United States Dollars converted at the official rate of exchange prevailing on the date this deduction is made.

(e) The balance of such .gross receipts remaining after the payments provided in Subparagraphs (a), (b), (c) and (d) have been made, shall be paid to SUBLICENSEE and STANLEY WARNER for the recoupment of their respective pre-opening expenses for the theatre, such payment to be distributed to each party in the same proportion as their respective unrecouped pre-opening expenses bear to each other on the date distribution is made. Solely for the purpose of determining this proportion in which such recoupment shall be repaid to SUBLICENSEE and STANLEY WARNER, the following rules shall be applicable:

(i) The pre-opening expenses incurred by either party in United States Dollars shall be treated as having been incurred in the local (foreign) currency at the official rate of exchange prevailing on the date distribution of recoupment monies is made.

(ii) So long as CINERAMA shall receive royalty payments at six percent (6%), one-sixth of such payment shall be deemed to be payments made to SUBLICENSEE towards the recoupment of the pre-opening expenses of SUBLICENSEE recoupable under Subparagraph (i) of SUBLICENSEE's preopening expense (i.e. such payments shall be counted toward the, equivalent of SEVENTY-FIVE THOUSAND ($75.000) DOLLARS).

The pre-opening expenses of STANLEY WARNER which may be recouped under this

Paragraph shall be limited to the rental for the set of exhibition equipment advanced by STANLEY WARNER for SUBLICENSEE pursuant to Paragraph 4 hereof. plus the actual amount spent for all remittance taxes and other charges imposed by governmental authorities which are required to be paid on account of the transfer or conversion of the recoupment payments from' the currency in which the recoupment monies are realized into the currency in which such preopening expenses were actually incurred, if incurred in United States dollars.

The pre-opening expenses of SUBLICENSEE which may be recouped under this Paragraph 19 shall be limited to the aggregate of the following:

(i) The equivalent of SEVENTY FIVE THOUSAND ($75,000) DOLLARS in the local currency at the official rate of exchange prevailing on the date the recoupment pay-

16

merit is made. SUBLICENSEE agrees that prior to the opening of the theatre it will present proof to STANLEY WARNER of the 'expenditure of the equivalent of at least FIFTEEN THOUSAND ($15,000) DOLLARS on pre-opening advertising.

(ii) The actual cost to SUBLICENSEE of the additional equipment listed in Schedule "C", dubbing the foreign language version used in the theatre, the original three (3) sets of the theatre picture and sound prints, customs duties, and transportation, crating and shipping costs for exhibition equipment.

(iii) The actual amount spent for all remittance taxes and other charges imposed by governmental authorities which are required to be paid on account of the transfer or conversion of the recoupment payments from the currency in which the recoupment monies are realized into the currency in which such pre-opening expenses were actually incurred, if incurred in United States dollars.

Recoupment of pre-opening expenses will continue until both parties shall have recouped such pre-opening expenses in the currency in which each such expenditure was actually made. For the purpose of this Paragraph 19, the pre-opening expenses of either party shall be deemed to have been made in the currency in which each expenditure was actually made or, with respect to theatres opened in countries other than England, France, Italy, West Germany and Japan, the currency in which loans to meet pre-opening expenses are actually' and solely required to be repaid, provided proof is presented (satisfactory to all parties) that the loan was made specifically for the sole purpose of meeting pre-opening expenses.

B. After the pre-opening expenses of STANLEY WARNER and SUBLICENSEE have been recouped as set forth in Subparagraph (e) above, the gross receipts of each theatre exhibiting Cinerama motion pictures in the Licensed Cities shall be distributed as follows:

(1) Distributions and payments as set forth in (a), (b) and (c) above shall be made.

(2) Thirty-five percent (350/0) of such gross receipts shall be paid to STANLEY WARNER as a film rental.

(3) From the remaining gross receipts SUBLICENSEE shall deduct and retain for itself the payments set forth in (d) above.

(4) From the gross receipts remaining after the deductions and payments provided in Subparagraphs (1), (2) and (3) have been made, SUBLICENSEE shall deduct and retain for itself a reserve for restoration which shall be the equivalent of One Hundred Ninety Two Dollars and Thirty One Cents ($192.31) at the official rate of exchange prevailing on the date such' deduction is made, deducted each week for a three (3) year period' from the date of the commencement of exhibition of a Cinerama motion picture in the.theatre and SUBLICENSEE shall further deduct and retain for itself the rental paid by it, if any, for replacements of obsolete equipment pursuant to Paragraph 6.

(5) The balance of the gross receipts after the deductions and payments set forth in (1), (2), (3) and (4) have been made, shall be divided and paid sixty percent (60%) to SUBLICENSEE and forty percent (40%) to STANLEY WARNER.

As used in this agreement, gross receipts shall mean the box office receipts less those governmental taxes normally deducted at the box office which are not rebateable, refundable or credited to the SUBLICENSEE or its licensees.

Ten (10) days after the end of each week (the week to end after the last performance on Saturday) SUBLICENSEE shall render accounts to STANLEY WARNER and CINERAMA, such accounts to include daily box office receipts from each theatre. Each such account shall be in the form of statements certified by a duly authorized responsible officer of the SUBLICENSEE and shall indi-

cate the manner and amount of the distribution of such box office receipts. '

The gross receipts of each theatre shall be accounted for separately. The losses in one theatre in anyone week may not be applied against a profit in the same or any other theatre for anysuc-

17

ceeding or preceding week, except that if a theatre's receipts in anyone week are not sufficient to provide for the payments to be made for that theatre pursuant to Subparagraph A(d) and B(3) above or the reserve for restoration provided in Subparagraph B (4) above, then the deficiency may be carried forward to a succeeding week of operation of that theatre.

SUBLICENSEE will accompany every fourth such weekly statement submitted to CINEl{AMA with a payment in Dollars (calculated at the official rate of exchange for patent royalties prevailing on the date of payment) of the amount therein shown to be due to CINERAMA for the entire four week period. If, and only if, the laws or regulations of the government of the country in which a theatre is located prohibit such payment to CINERAMA in Dollars, SUBLICENSEE shall have the right to submit to CINERAMA a deposit receipt (as provided in Paragraph 23 hereof) for the amount shown on the statement to be due to CINERAMA. Notwithstanding the foregoing sentence, SUBLICENSEE will use its best efforts to obtain permission from the local government to transmit said payments to CINERAMA in Dollars. When CINERAMA's royalties are at the rate of Six percent (60/0) of the gross receipts, the first 5/6ths of such royalties shall be the absolute property of CINERAMA and the remaining l/6th shall be paid by CINERAMA to SUBLICENSEE in the currency in 'which it is received by CINERAMA, the payment to SUBLICENSEE to continue until SUBLICENSEE has recouped the amount advanced to CINERAMA for the direct costs of the salaries, travel and living expenses of CINBRAMA's personnel engaged in the survey of theatres and the installation of said equipment.

SUBLICENSEE 'will accompany every fourth such weekly statement submitted to STANLEY WARNER by a payment in Dollars or a deposit receipt (as provided in Paragraph 23 hereof) for the amount therein shown to be due to STANLEY WARNER for the entire four week period.

The acceptance of any payment or deposit receipt by STANLEY WARNER or CINERAMA shall not act as ail estoppel against them nor be considered a waiver of any rights they may have to contest the accuracy of any or all of the items contained in the said statement, except as provided in Paragrapb 36 hereof.'

20. Cinerama Royalties.

Under Paragraph 1.11 of the Basic Agreement, CINERAMA is entitled to certain payments from STANLEY WARNER. CINERAMA agrees that the provisions for payment to it set forth in Paragraph 19 above constitute the full and complete payment due to it under said Paragraph 1.11 of the Basic Agreement for and from all the Cinerama exhibitions under this sublicense.

CINERAMA further agrees that STANLEY WARNER may add such payments by SUBLICENSEE to the royalties otherwise paid to CINERAMA by STANLEY WARNER in determining the percentage royalty due CINERAMA by STANLEY WARNER and the minumum royalty payments provided in the Basic Agreement, provided, however, that such payments shall not be added to the royalties otherwise paid to CINERAMA by STANLEY WARNER until such payments have been received by CINERAMA in dollars or if such payments are not transmitted into dollars, until such payment is spent by ONERA14A. (For the purpose of this latter computation, if payments in foreign currencies are spent by CINERAMA prior to their conversion into dollars, they shall be deemed to have been received by CINERAMA in dollars computed at the official rate of exchange prevailing on - the date of the expenditure 'by CINERAMA for the purpose of applying such payments to the percentage royalty and the minimum royalty.)

,

21. ConcessioDL

In the event that SUBLICENSEE or its licensees sells or makes arrangements with concessionaires to sell in the Cinerama theatre candy, food, drinks or any other merchandise or service, from the gross receipts received by SUBUCENSEE, it will keep and retain for itself Four percent (4%) and will pay to STANLEY WARNER One percent (1ro). From the net receipts derived by SUBLICENSEE it will pay to CINERAMA Five percent (5%). (Net receipts as used in this Paragraph shall mean the gross receipts less the actual cost to SUBLICENS~E of goods sold and salaries

18

of employees whose sole duties are the sale of goods or services and other expenses pertaining solely thereto and there shall not be deducted from the gross receipts for the purpose of calculating the net receipts the 50/0 of such gross receipts paid to SUBLICENSEE and STANLEY WARNER). The balance of the net receipts, less the payments above provided to SUBLICENSEE, STANLEY WARNER and CINERAMA, shall be divided and paid Forty percent (4070) to STANLEY WARNER and Sixty percent (600/0) to SUBLICENSEE. As used in this Paragraph the gross receipts shall mean the amount received by SUBLICENSEE from customers (less applicable sales taxes) if SUBLICENSEE itself manages the sales of such goods or services, or the amount received by SUBLICENSEE from concessionaires if SUBLICENSEE permits a concessionaire to sell .such goods or services.

The receipts derived from such concessions shall be segregated from all other receipts and the method of accounting and payments shall be similar in all respects to and subject to all the terms and conditions of the methods of accounting and payments set forth in Paragraph 19 hereof, except that the payment to CINERAMA shall be made in a like manner as the payment to STANLEY WARNER.

SUBLICENSEE makes no representation that it will be able to install such concessionaires or sell such goods and services in any or all of the Cinerama theatres in the Licensed Cities but SUBLICENSEE agrees that it will use its best efforts to do so. As used in this Paragraph 21 and in Paragraph 22, the word "SUBLICENSEE" shall include the SUBLICENSEE and any companies affiliated with SUBLICENSEE or the guarantors or persons related to, the guarantors of SUBLICENSEE.

. 22. Programs.

STANLEY WARNER shall supply to SUBLICENSEE copies of the program sold in the Cinerama theatres in the United States and SUBLICENSEE will have this program printed in the languages of the countries of the Licensed Cities at its own cost and expense and will sell the same in the theatres in connection with Cinerama exhibitions. The receipts derived from such sale shall be kept segregated from all other receipts and shall be accounted for and paid for in the same manner as the receipts derived from concessions as set forth in the preceding paragraph (except that net receipts as used in this accounting shall mean the gross receipts derived from the sale of programs, less the actual cost to SUBLICENSEE per program of printing, translation, transportation, 'salaries of employees whose sale duty is the vending of such program and other expenses pertaining solely thereto and there shall not be deducted from the gross receipts for the purpose of calculating the net receipts, the Five percent (570) of such gross receipts paid to SUBLICENSEE and STANLEY WARNER).

SUBLICENSEE will at its own cost and expense procure in the name of STANLEY WARNER all necessary copyright or similar protection for such program.

23. Foreign Currencies.

All payments required to be made under this agreement by SUBLICENSEE, to STANLEY WARNER or to CINERAMA shall be made in United States Dollars except for the distribution to be made by SUBLICENSEE of the theatre, concession and program receipts as set forth in Paragraphs 19, 21 and 22 hereof (but the payments to CINERAMA for patent royalties shall nevertheless be made in Dollars subject to the provisions in said paragraphs) and except for the payments as set forth in Paragraph 18 hereof. As to the distribution of theatre receipts (except the patent royalty to CINERAMA) and the concession and program receipts, SUBLICENSEE shall deposit the sums to which each party may be entitled in the foreign country in which such receipts are derived in the currency of such country. Such deposits shall be made into an account and in a bank designated by the party entitled thereto, and such account shall be in the name of the party entitled thereto or, its designee, and subject only to such party's or its designee's withdrawal. The

19

presentation of a deposit receipt showing such deposit shall constitute payment of the amount so

deposited. '

In the event that SUBLICENSEE shall attempt in any country to convert local currency equivalent to all or part of its portion of such theatre, concession and program receipts realized in said country into United States Dollars or into any other currency foreign to such country it shall first notify STANLEY WARNER and CINERAMA of its intention so to do and of the terms and conditions of such conversion. If CINERAMA shall so direct, the first monies to be converted shall be CINERAMA's local foreign currency. If STANLEY WARNER shall so direct, SUBLICENSEE will convert for the account of STANLEY \VAR:-.JER a portion of the local foreign currency on deposit in its account in said country. The portion of SUBLICENSEE's and STANLEY WARNER's funds to be thus included in the total amount converted shall be determined by the proportion which their respective shares of the gross receipts not theretofore remitted bear to each other on the date of the conversion, excluding from such proportion the payment of Forty percent (40%) of the gross receipts to SUBLICENSEE which represents the cost of the operation' of each theatre. The, charges, costs and expenses of conversion shall be shared by each of the parties participating therein in the same proportion as the proportion of their funds included in the conversion.

ARTICLE IV.

Rights in the Word "Cinerama".

24. Use of the Word "Cinerama" by Sublicensee.

It is understood that SUBLICENSEE desires that it or its subsidiary have the right to use in the exercise of its rights under this agreement, the corporate title "Cinerama International Inc." and the word "Cinerama". It is also understood that CINERAMA is willing to grant such rights to SUBLICENSEE provided CINERAMA does not thereby impair any of its trade-mark or trade name rights in any country of the world. Accordingly permission is hereby granted by CINERAMA to SUBLICENSEE to use said corporate title and to use the word "Cinerama" in the manner stated above subject to the following conditions:

(a) Such right to use the word "Cinerama" (whether as part of a corporate title or otherwise) is subject at all times to such conditions as shall be reasonably necessary in the opinion of CINERAMA's counsel to protect CINERAMA's trade-mark and trade name rights in the word "Cinerama". In this connection it is understood that, if CINERAMA's counsel's opinion indicates that any use by the SUBLICENSEE or its subsidiary will endanger CINERAMA's trade-mark or trade name rights in the word "Cinerama", then the SUBLICENSEE or its subsidiary will discontinue such use immediately after receipt of written notice thereof from CINERAMA. Furthermore, SUBLICENSEE or its subsidiary will promptly, upon request by CINERAMA, execute and file such documents as CINERAMA's counsel may from time to time deem necessary or advisable in order to protect CINERAMA's trade-mark or trade name rights.

(b) SUBLICENSEE agrees that it will use the word "Cinerama" only upon or in relation to motion pictures produced in the Cinerama Process, or equipment supplied to SUBLICENSEE by CINERAMA or produced by or for SUBLICENSEE in accordance with standards, specifications and instructions furnished by CINERAMA. SUBLICENSEE agrees that it will not use the word "Cinerama" in connection with any other business or product.

(c) The permission granted to SUBLICENSEE hereby shall not deprive CINERAMA of any trade-mark or trade name rights which it would otherwise have if this permission had not been granted. SUBLICENSEE shall not have the right to register any trade-marks which include the word "Cinerama" unless it is done at CINERAMA's request and for CINERAMA's benefit. Furthermore, CINERAMA shall have the same rights which CINERAMA would have had if this agreement had not been made, to authorize other persons to use the word "Cinerama" in connection with their products or their corporate title provided that CINERAMA shall not authorize anyone to use a corporate title which contains the combination of words "Cinerama"

and "International", .

20

'/

ARTICLE V.

Acceptance of Grant by Sublicensee.

25. Acceptance of Grant and Agreement to Exploit.

SUBLICENSEE hereby accepts all the licenses and other grants made to it under this agreement upon all the terms and conditions of this agreement and will in good faith vigorously and conscientiously exploit these licenses and grants and use its best efforts so to do.

ARTICLE VI.

Defaults and Remedies.

26. Reversion of Rights and Properties.

Default by SUBLICENSEE as defined in Paragraph 27 hereof shall relieve STANLEY WARNBR from the obligation to continue the term of the grant of any and all of the licenses herein or to deliver or authorize the delivery to SUBLICENSEE of Cinerama exhibition equipment or Cinerama motion pictures or any other property relating to this license, including but not limited to theatre prints. sound prints, programs and advertising material, and shall entitle STANLEY WARNER to terminate this agreement and the licenses granted hereunder and to have returned to it all Cinerama exhibition equipment. all Cinerama motion pictures and any other property relating to this license, including but not limited to theatre picture prints, sound prints, programs and advertising material, at SUBLICENSEE's sole cost and expense and without charge of any kind to STANLEY WARNER and shall thereupon cause the reversion to STANLEY WARNER of all rights, privileges and licenses granted hereunder.

27. Remedies against Sublicensee.

If one or more of the following events (herein called "defaults") shall occur:

(a) Default shall be made by SUBLICENSEE in the payment of any monies due STANLEY WARNER or CINERAMA, and such default shall have continued for a period of thirty (30) days after written notice to the SUBLICENSEE specifying such default, or

(b) Default shall be made by SUBLICENSEE in the making of the deposits for each of the Licensed Cities as provided in Paragraphs 1 and 18 hereof, or

(c) Default shall be made by SUBLICENSEE in failing to furnish ST-ANLEY WARNER or CINERAMA with all the periodic statements and reports required to be so furnished hereunder in the form and manner and at the times as herein provided and any such default shall have continued for a period of thirty (30) days after written notice to the SUBLICENSEE specifying

such default; or .

(d) Default shall be made by SUBLICENSEE in the due performance of the agreements, undertakings and obligations required to be performed by the SUBLICENSEE except those which are to be performed pursuant to the provisions of Paragraphs 4, 13 & 42 and such default shall continue for a Period of thirty (30) days after written notice to SUBLICENSEE specifying such default or breach; or

(e) Default shall be made by SUBLICENSEE in the due performance of its agreement to open theatres for the exhibition of Cinerama motion pictures and the commencement and continuance of exhibitions of Cinerama motion pictures upon the dates and in the manner provided in Paragraph 5 hereof; or

(f) SUBLICENSEE shall become involved in financial difficulties as evidenced:

(i) by its filing a petition in bankruptcy or tor re-organization or for the adoption of an arrangement under the Bankruptcy Act (as now or in the future amended) or an answer seeking the relief therein provided;

21

,"_' _ - .. __ .. - ....... - ... -~-~~---~ .. -.---- ..... _,---'_._-_.- .. -.- ...

r-

(ii) by its making an assignment for the benefit of its creditors;

(iii) by its consent to the appointment of a receiver for all or a substantial part of its property;

(iv) by its adjudication as a bankrupt;

(v) by the entry of a court order appointing a receiver for all or a substantial part of its property which order is not vacated within thirty (30) days from the date of entry or by approving a petition filed against it under the said Bankruptcy Act;

(vi) by the assumption of custody or sequestration by a court of competent jurisdiction of all or substantially all of its property which custody or sequestration is not released with- ' in thirty (30) days;

(vii) by assigning or encumbering this agreement or any part thereof or any property delivered to SUBLICENSEE pursuant to this agreement in any manner whatsoever contrary to the terms of this agreement; or

(viii) by suffering a final judgment to be entered against it or a levy to be made upon any of its property or assets which judgment or levy is not bonded or vacated within thirty (30) days;

then, and in each and every event, at the election of STANLEY WARNER, all rights, privileges and licenses granted hereunder shall cease and terminate and STANLEY WARNER may exercise this right by terminating this' entire agreement or by terminating the license for those Licensed Cities to which the default shall relate, provided, however, that in the event of a default pursuant to the provisions of Subparagraph (e) of this Paragraph 26, STANLEY WARNER may terminate all the rights, privileges and licenses granted hereunder only with respect to the Licensed City in which or with respect to which such default shall have occurred.

As to those defaults for which a thirty (30) day notice is required to be sent by STANLEY WARNER and as to which such notice is actually sent, STANLEY WARNER agrees that within sixty (60) days of the expiration of such thirty (30) day period if the default has not been cured, it will send a further notice of termination to SUBLICENSEE or waive the, right to terminate because of said instance of default. The foregoing sentence shall not be deemed to require STANLEY WARNER to send notice of default except where such notice is specifically required in the foregoing Subparagraphs (a) through (f) of this Paragraph Zl, nor shall the foregoing sentence be deemed to require STANLEY WARNER to send such notice of default within any particular time from the happening of such default;

In the event of termination pursuant to the provisions of this Paragraph, STANLEY WARNER, in addition to any other rights or remedies it may have by law or otherwise, may forthwith retake possession of and seize without legal process all Cinerama exhibition equipment, all Cinerama motion pictures and any other property relating to this license, including but not limited to theatre picture prints, sound prints, programs and advertising material, whether or not standing in the name of SUBLICENSEE or its contractees and wherever located' and STANLEY WARNER may collect and retain all monies due or to become due SUBLICENSEE under any contract heretofore made by it with respect to the exhibition of Cinerama motion pictures. The SUBLICENSEE' hereby assigns to ST AN~EY WARNER absolutely in the event that the SUBLICENSEE's rights and privileges are terminated as in this agreement provided, all contracts, leases and monies due or to become due thereunder which the SUBLICENSEE may have with respect to the exploitation and exhibition of Cinerama motion pictures under this license. STANLEY WARNER shall have the right in its sole discretion to modify, amend, cancel or adjust all such contracts.

STANLEY WARNER agrees to notify SUBLICENSEE within fourteen (14) days from the date of termination as to which such contracts, leases, and other rights it will accept the assignment of hereunder and assume SUBLICENSEE's obligation thereunder. In the event that STANLEY WARNER shall assume any theatre leases, S~LICENSEE agrees, that it will immediately pay

..... __ .. _- ._-- .... _- ~--- .. -- -_------_ .... ~ .. - ......

over to STANLEY WARNER all of the reserve for restoration for such theatre (in the currency and in the country where such theatre is located) free and clear of all liens and charges.

In the event that after termination STANLEY WARNER shall continue an exhibition commenced by SUBLICENSEE in a theatre in respect to which SUBLICENSEE has not recouped its pre-opening expenses after STANLEY WARNER shall have fully recouped all of its pre-opening expenses SUBLICENSEE shall be entitled to recoup its pre-opening expenses in the manner set forth in Paragraph 19 and STANLEY WARNER shall account to SUBLICENSEE with respect to such recoupment monthly.

The rights of STANLEY WARNER to damages upon a default by SUBLICENSEE, including, but not limited to the right to liquidated damages provided in Paragraph 30 hereof, shall continue and survive any termination in whole or in part of this agreement.

28. Failure to Supply Sufficient Product.

If, after the payment of Cinerama royalties, the gross receipts from any of the theatres in the Licensed Cities shall for four (4) consecutive weeks fail to equal the actual operating costs (the items which comprise the operating costs are set forth in Paragraph 19A(b) hereof) and if at such' time all Cinerama motion pictures which have been delivered to SUBLICENSEE have already been exhibited in said theatre, and if STANLEY WARNER shall not request a further exhibition of a Cinerama motion picture already played, SUBLICENSEE may cease the exhibition of Cinerama motion pictures. Prior to such termination of the exhibition of Cinerama motion pictures, SUBLICENSEE will notify STANLEY WARNER of the date that such termination will occur and will accompany such notice with a statement, verified by a duly authorized responsible officer, showing the actual operating costs and the gross receipts for the previous four-week period. Following such termination, any receipts derived from the use of such theatre for such purposes other than exhibiting Cinerama motion pictures, shall belong to SUBLICENSEE, provided, however, that if such termination shall take place prior to the time when pre-opening expenses for the theatre have been recouped, the net receipts from the operation of the theatre after such termination shall be credited by SUBLICENSEE against its and STANLEY WARNER's pre-opening expenses for such theatre, in the same manner as provided in Paragraph 19 and after such pre-opening expenses have been fully recouped, such net receipts shall be applied against the reserve for restoration at the rate equivalent to $192.31 per week, converted into local currency at the official rate of exchange prevailing on the date such application is made SUBLICENSEE shall submit to STANLEY WARNER every four (4) week period a statement showing the gross receipts, operating expenses and net receipts derived from the operation of the theatre during such period.

If at any time after such termination of the run of Cinerama motion pictures, STANLEY WARNER shall tender delivery of a further Cinerama motion picture to SUBLICENSEE, as such delivery is defined in Paragraph 14 hereof, SUBLICENSEE shall discontinue as soon as possible, but no later than thirty (30) days from the date of such tender of delivery, whatever performance or exhibition is then in progress in such theatre and as promptly as possible thereafter shall commence the exhibition of such Cinerama motion picture in such theatre, such exhibition to be in full compliance with all the terms and conditions of this agreement.

It is understood that STANLEY WARNER makes no representation as to the number of Cinerama motion pictures which it will deliver to SUBLICENSEE or the length of time which any or all such pictures shall be able to run prior to such termination.

Anything in Paragraphs 26 and 27 to the contrary notwithstanding, the termination of the run of a Cinerama motion picture pursuant to the provisions of this Paragraph shall not be

deemed to be a default by SUBLICENSEE under this agreement. .

29. Injunction.

The SUBLICENSEE acknowledges that the value of the exploitation of the Cinerama Process in the Licensed Cities and the patronage of the public and others depend upon their timely and un-

23

interrupted exhibition of Cinerama motion pictures; that in the event of the expiration or sooner termination of this. agreement, and the SUBLICEKSEE's rights hereunder, irreparable and irremediable damage will be caused to ST:\~LEY W;\H.XER unless STANLEY WARNER is immediately revested and repossessed with physical possession of the Cinerama exhibition equipment, the Cinerama motion pictures delivered to SUBLICE:\SEE, all theatre prints of Cinerama motion pictures and all other property pertaining to this license and is assigned all exhibition or distribution contracts and theatre leases entered into by SUBLICENSEE. For the purpose of enforcing STANLEY WARNER's right to have such immediate possession of the property, as aforesaid, the SUBLICENSEE consents that mandatory injunctions may be issued by a court of competent jurisdiction in favor of STANLEY WARNER and against SUBLICENSEE and its contractees (and the SUBLICENSEE will by contract require similar consent from its licensees and other contractees) to compel delivery to STANLEY WARNER of the aforesaid properties as well as the books, records and data in connection therewith. The continued exhibition by the SUBLICENSEE or its licensees under this license after the expiration or sooner termination thereof shall constitute an infringement of copyright and patent rights for the abatement of which the SUBLICENSEE specifically consents that an injunction in favor of STANLEY WARNER or the holder of the copyright and patents may issue against SUBLICENSEE and its contractees (and the SUBLICENSEE will by contract require similar consent from its licensees and other contractees).

30. Liquidated Damages.

SUBLICENSEE recognizes that in the event of a default by SUBLICENSEE, STANLEY WARNER will suffer severe damage; the actual ascertainment of which might be difficult to measure. SUBLICENSEE therefore agrees that the partial liquidated damages due to STANLEY WARNER in the event that SUBLICENSEE shall fail to open theatres at the time and in the manner set forth in Paragraph 5 hereof, shall be the amount of the payment made by SUBLICENSEE as provided in Paragraphs 1 and 18 hereof, each of such payments being the partial liquidated damages for the failure to open the theatre in the country in which such deposit is made, In addition to all of the other rights granted to STANLEY WARNER, upon any default by SUBLICENSEE, SUBLICENSEE agrees that for a failure to open a Cinerama theatre as aforesaid, STANLEY WARNER shall have the irrevocable right to keep such payment as its absolute property toward the recovery of such partial liquidated damages. For the purpose of evidencing this grant, SUBLICENSEE hereby assigns to STANLEY WARNER all its rights, title and interest in and to the repayment to be made by STANLEY WARNER pursuant to Paragraph 18 hereof, as of the date of its failure to open the theatres as aforesaid.

In the event that SUBLICENSEE's default shall consist in not opening a theatre in one of the Licensed Cities (as set forth in Paragraph 5 hereof) by reason of restrictions imposed by governmental authorities after the expiration of the grace period provided in such event, the liquidated damages due to STANLEY WARNER shall be TWENTY-FIVE THOUSAND ($25,000.00)' U. S. DOLLARS unless, within ninety (90) days after the expiration of the grace period, SUBLICENSEE shall have opened the theatre for the exhibition of Cinerama motion pictures in such Licensed City in which event no liquidated damages shall accrue to STANLEY WARNER by reason of the failure to open because of delays caused by governmental authorities as aforesaid.

31. Rights of Cinerama on Termination.

In view of the guarantee by STANLEY WARNER, as set forth in Paragraph 44 hereof, except as provided in Paragraph 7 hereof, CINERAMA agrees that STANLEY WARNER shall have the sole right to enforce any remedy herein provided in the event of default and CINERAMA further agrees that any Claim which it may have against SUBLICENSEE shall be fully subordinated to the claim of STANLEY WARNER.

32. No Estoppel or Continuing Waiver.

The failure of STANLEY WARNER, CINERAMA or SUBLICENSEE to enforce any provision of this agreement on any occasion shall not .estop any of them from enforcing such provision

24

on any other occasion if STANLEY WARNER, CINERAMA or SUBLICENSEE, as the case may be, shall so elect and no waiver by STANLEY WARNER, CINERAMA or SUBLICENSEE, express or implied, of any part of this agreement shall be construed to be a general or continuing waiver. Nothing in this agreement contained shall restrict, limit, prejudice or preclude any other legal or equitable right or remedy which STANLEY WARNER shall have against SUBLICENSEE, its licensees and contractees and nothing in this agreement contained shall restrict, limit, prejudice or preclude any legal or equitable right or remedy which SUBLICENSEE may have against STANLEY WARNER or CINERAMA. Any of the rights and remedies granted to STANLEY WARNER hereunder upon default by SUBLICENSEE may be exercised singly or partially (except as provided in Paragraph 27 hereof) as STANLEY WARNER shall in its sole discretion determine but the exercise or partial exercise of anyone right or remedy shall not preclude STANLEY WARNER from exercising all or any part of its rights or remedies hereunder at the same time or at some time thereafter.

ARTICLE VI.

General Provisions.

33. Contracts with United States Gove~ent.

Anything In this agreement to the contrary notwithstanding C;INERAMA shall be at liberty at any time to contract with or grant licenses to the United States Government or any of its instrumentalities for any use of the Cinerama Process and CINERAMA specifically reserves for itself alone all non-theatrical rights in the Cinerama Process.

i ,

I

34. Patent Infringements.

CINERAMA agrees to indemnify SUBLICENSEE against any judgment against it obtained in a court of competent jurisdiction if such judgment is based upon any alleged infringements resulting from the use by SUBLICENSEE in the projection or exhibition of motion pictures of the Patent Rights or any apparatus or equipment furnished hereunder by CINERAMA; CINERAMA further agrees to defend any suits based on such patents, and pay all costs in connection therewith. SUBLICENSEE may participate in such suit by its own counsel at its own expense. SUBLI~NSEE agrees to notify CINERAMA and STANLEY WARNER immediately upon receipt of any notice, oral or written, of any claim for alleged infringement asserted against SUBLICENSEE, CINERAMA or STANLEY WARNER.

In the event that CINERAMA or STANLEY WARNER shall refuse to defend such infringement suits (such refusal to be evidenced by the failure of CINERAMA or STANLEY WARNER to file an answer or notify SUBLICENSEE of its intention to answer at least five (5) days prior to the date when such answer is due) SUBLICENSEE may appear and defend in such suit in its own name or in the name of CINERAMA and may deduct the expenses of such litigation from royalties otherwise due to CINERAMA. For the purpose of permitting SUBLICENSEE to thus defend such suits, CINERAMA hereby appoints SUBLICENSEE its Attorney-in-Fact to execute all documents in CINERAMA's name and to take all the steps that may be necessary for such defense.

SUBLICENSEE agrees to notify STANLEY WARNER and CINERAMA promptly of any devices, processes or products which it believes may infringe the Cinerama Process and, subject to the provisions of this Paragraph, to take all steps and to execute all documents requested by ST ANLEY WARNER or CINERAMA for the protection of the Cinerama Process.

The foregoing ~eement of CINERAMA shall be in full substitution for any obligation of STANLEY WARNER to SUBLICENSEE by reason of any patent infringement claim asserted against SUBLICENSEE.

. In the event that any of the patents comprising the Patent Rights or any of the claims under

these patents shall be declared invalid Of in the event that any of the patent applications previously or hereafter made for the Cinerama Process shall not be granted, SUBLICENSEE agrees that this

25

agreement shall. nevertheless continue in full force and effect as the license of a secret process and STANLEY WARNER and CINERAMA shall not be liable to SUBLICENSEE in any way because of such invalidity of patents or claims 'or rejection of applications.

SUBLICENSEE agrees not to challenge the validity of any of the patent rights involved and agrees to insert a similar clause in any license granted by it, but SUBLICENSEE shall not be responsible to CINERAMA or STANLEY WARNER for any breach of this clause by any of its licensees.

35. New Developments.

SUBLICENSEE, on behalf of itself and its licensees, agrees that so long as the license hereby granted shall continue, it will make available to CINERAMA and STANLEY WARNER promptly any improvements within the Cinerama Process which it may make, acquire or control. Any improvements or developments relating to the Cinerama Process which SUBLICENSEE or its licensees may make, develop, acquire or otherwise gain control of during the term of this license, shall be the property of CINERAMA, and SUBLICENSEE shall not be entitled to receive any compensation whatsoever for such improvements or developments, and SUBLICENSEE on behalf of itself and its licensees agrees to execute any documents and take any action necessary to evidence title in CINERAMA. Nothing in this Paragraph contained shall be deemed to grant to SUBLICENSEE the right to experiment with, alter or modify the exhibition equipment or any other aspect of the Cinerama Process.

SUBLICENSEE, on behalf of itself and its licensees and contractees, agrees that all information relating to the Cinerama Process shall be kept in strict confidence and shalt not be divulged or revealed to any other persons or corporations except as may be necessary to effectuate this agreement. SUBLICENSEE agrees that it will insert a similar provision in any agreement it shall make with its licensees.

36. Reports and Books of Account.

THE SUBLICENSEE shall keep and maintain at an office in New York, New York, complete detailed permanent and accurate books of account and all other records for each licensed theatre relating to the installation of the exhibition equipment, distribution, exploitation and exhibition of all the Cinerama motion pictures, including but without limitation the records of the original daily box office receipts (whenever and wherever obtained), concession and program receipts, cost of installation and pre-opening expenses, costs of operation of theatres and the costs of prints. Said books of account and records of SUBLICENSEE shall be kept and maintained under a standard system approved by STANLEY WARNER. The forms of all reports and statements required to be prepared and submitted by SUBLICENSEE to STANLEY WARNER under this agreement shall be subject to the approval of STANLEY WARNER and SUBLICENSEE agrees to use such approved form for all reports and statements. Without limiting the generality of the foregoing such reports and statements shall include daily box office receipts and the original and photostatic copies of all reports (including admission or similar tax returns) made by SUBLICENSEE to governmental authorities and reports made by governmental authorities on the operation of the theatre by SUBLiCENSEE or its licensees;

During the term of this agreement and over a period of three (3) years after expiration or sooner termination thereof, STANLEY WARNER shall have free access at all times during customary business hours to all the said books of account and other records of the SUBLICENSEE relating to expenditures under and receipts from this license, and STANLEY WARNER shall have the right at any such times to make extracts or copies therefrom. The SUBLICENSEE will keep

'. said books and records throughout the term hereof, and for three (3) years after the expiration or soon~r termination oE this agreement

26

r+-.

ST ANLEY WARNER may designate one or more representatives for the purpose of visiting the places of business of SUBLICENSEE at any time during business hours to observe the operations and audit the box office involved in the exhibition of Cinerama motion pictures. Said representative shall have access to all the books of account and records of the SUBLICENSEE relating to this license; said representatives, however, shall have no right to manage or supervise the business operations of the SUBLICENSEE.

SUBLICENSEE will deliver promptly to both STANLEY WARNER and CINERAMA one (I) complete and fully conformed copy of all agreements entered into between SUBLICENSEE and its licensees and all leases for theatres entered into by SUBLICENSEE and its licensees. In addition, all other contracts affecting this license shall be kept by SUBLICENSEE with its books of account.

Nothing contained in this Paragraph shall require SUBLICENSEE to' disclose the manner in which or the persons to whom the Forty per cent (4070) of the gross theatre receipts (Subparagraph 19A(b» shall be distribtued by SUBLICENSEE unless and until this license shall be terminated, in which event SUBLICENSEE will deliver to STANLEY WARNER two (2) days after such termination a sworn statement showing the manner in which and the persons to whom such Forty percent (4070) is to be distributed.

In the event that the principal office of SUBLICENSEE shall not be in New York, New York, SUBLICENSEE shall nevertheless keep such copies of such books of account and records in New York, and will, in addition, permit STANLEY WARNER to examine the original records.

All the foregoing rights granted to STANLEY WARNER as set forth in this Paragraph shall likewise be granted to STANLEY WARNER by any licensee of SUBLI(:ENSEE and SUBLICENSEE shall insert in any agreement with its licensees appropriate provisions to insure to STANLEY WARNER these rights.

The rights granted to STANLEY WARNER hereunder to examine and inspect the records and operations of SUBLICENSEE and its licensees are similarly granted to CINERAMA to the extent that CINERAMA may' reasonably require for the purpose of ascertaining the accuracy of the payments to be made to it under this agreement.

Any accounting made hereunder which is not objected to by a notice in writing within three (3) years from the date of its receipt shall be deemed to be accepted as accurate and binding upon the party receiving the same.

37. Compliance With Laws.

In the event that any local law, statute or ordinance or any decree, judgment orsuling of any court or governmental agency, whether of the United States or of a foreign country having jurisdiction, shall be applicable to this agreement then SUBLICENSEE will forthwith fully comply with and conform to the provisions of such law, statute, ordinance, judgment or ruling in its performance under this agreement.

The parties understand that in certain of the Licensed Cities there are government regulations requiring that domestically produced motion pictures be exhibited for a certain period of time each year. SUBLICENSEE will use its best efforts to procure exemptions from such requirements in respect to the exhibition of Cinerama motion pictures under this agreement.

SUBLICENSEE will also use its best efforts to obtain exemption of the Cinerama motion pictures from any governmental regulation or statute requiring that the dubbing of the foreign language version be done in the country in which such version is to be exhibited. In the event that such exemption cannot be obtained, SUBLICENSEE shall nevertheless exhibit such Cinerama motion picture using appropriate subtitles.

38. Force Majeur.

Should any of the parties to this agreement be prevented from performing their obligations by reason of fires, floods, strikes or lockouts, Acts o£ God, riots, wars, public insurrections or civil com-

21

motions, or should performance by any of them be made impossible or illegal by reason of restrictions (other than income taxes) imposed by governments or their military authorities, this agreement shall nevertheless continue, but the party unable to perform for such reasons shall be excused from performance for a period equivalent to the delay caused by the occurrence of any such event. Notwithstanding the foregoing, the restrictions imposed by governmental authorities shall not excuse delay by SUBLICENSEE in opening theatres in the Licensed Cities (except as set forth in Paragraph 5 hereof) and if SUBLICENSEE is delayed in opening- theatres in the Licensed Cities by reason of fires, floods, strikes or lockouts, Acts of God, riots, wars, public insurrections or civil commotions for a period longer than six (6) months. it shall be entitled to have repaid to it the amount of the security deposit for such Licensed City and the Licensed City will thereupon be excluded from the territory of the license granted in Paragraph 1 hereof.

Anything in the foregoing to the contrary notwithstanding, the time in which SUBLICENSEE is to make the security deposits provided in Paragraphs 1 and 18 hereof. shall not be subject to extensions by reason of force majeure.

39. No Partnership.

Nothing in this agreement shall be construed to make the parties hereto partners, joint venturers, representatives or agents of each other and no party shall so hold itself out by advertising or otherwise, nor shall any party be liable or bound by any representation, act and/or omission of the other.

40. Right of Assignment and Limitations Thereof.

The obligations and undertakings of the SUBLICENSEE hereunder are personal and this agreement and the rights and privileges granted hereby may not be sold, transferred, assigned, encumbered, pledged or otherwise hypothecated in whole or in part by the SUBLICENSEE either voluntarily or by operations of law or otherwise, provided that SUBLICENSEE may transfer or otherwise pledge and encumber its right to receive a portion of the theatre concession and program receipts, as set forth in Paragraphs 19, 21 and 22 hereof, but such action by the SUBLICENSEE shall not relieve SUBLICENSEE of its primary liability for the performance of each obligation of the SUBLICENSEE under this agreement, and, provided further, SUBLICENSEE may assign this agreement in whole or in part to a corporation all of whose stock is owned by SUBLICENSEE and/or one or both of the initial guarantors of SUBLICENSEE's obligations under guarantee dated July 20, 1954, but only if SUBLICENSEE shall remain primarily, jointly and severally liable with such assignee for performance of each and every obligation of the SUBLICENSEE under this agreement and for all representations of SUBLICENSEE herein and all acts and deeds of the assignee in performing its duties hereunder. Nothing in this Paragraph shall be construed to prevent SUBLICENSEE from sublicensing the right to exhibit Cinerama motion pictures as provided for in Paragraph 3 hereof.

SUBLICENSEE and its licensees may not sell, transfer, assign, encumber, pledge or otherwise hypothecate, in whole or in part, or permit any lien to be placed upon any of the Cinerama exhibition equipments or Cinerama motion pictures or any other property relating to this license including but not limited to theatre picture prints, sound prints, programs and advertising material. Leases for theatres entered into by SUBLICENSEE or its licensees, shall include a specific provision prohibiting the landlord's placing any lien upon any of the Cinerama exhibition equipment, Cinerama motion pictures or any other property relating to this license including but not limited to theatre picture prints, sound prints, programs and advertising material.

41. Notices.

Whenever any notice or statement is required to be given by one party to the other, it shall be sent by regular mail, postage prepaid, or by cable ot telegram addressed to the parties as follows:

STANLEY WARNER CINERAMA CORPORATION, 321 W. 44th St. New York 36, N. Y.

28

CINERAMA, INC., Box 120, Oyster Bay, Long Island, New York. ROBIN INTERNATIONAL, INC., 11 W. 42nd St., New York 36, N. Y.

The foregoing addresses may be changed by written notice given by any party to the others.

4-2. New York Law to Apply.

This agreement shall be construed and interpreted according to the laws of the State of New York and all licenses granted by SUBLICENSEE shall contain a similar provision.

43. Captions.

The captions of the Arti~les and Paragraphs and Schedules of this agreement have been inserted for conveniences in reference only and shall not be considered part of the provisions of the agreement nor be deemed to construe or interpret any of the provisions of this agreement,

44. Modification of Basic Agreement.

Except where modification or revision of a term of the Basic Agreement is made in a provision of this agreement by specific reference to the Basic Agreement, nothing in this agreement contained shall be deemed to modify, amend, limit or construe any of the provisions of the Basic Agreement.

Without limiting the generality of the foregoing, STANLEY WARNER guarantees full and prompt performance by SUBLICENSEE· and its licensees, of all the obligations of SUBLICENSEE and its licensees to CINERAMA. This guarantee shall be solely for the benefit of CINERAMA, its successors and assigns. In the event that STANLEY WARNER's license under the Basic Agreement shall be terminated as a result of action instituted by CINERAMA this guarantee by STANLEY WARNER shall not continue as to acts occuring after such termination but shall apply only to the performance by SUBLICENSEE and its licensees of their obligations up to the date of such termination.

Any modification, alteration, or amendment of the obligations of SUBLICENSEE granted or permitted by CINERAMA without STANLEY WARNER's prior consent in writing shall release and relieve STANLEY WARNER of all its obligation under this guarantee.

45. Entire Agreement.

This agreement constitutes the sole and entire agreement of STANLEY WARNER and CINERAMA with SUBLICENSEE, and may not be altered, supplemented, modified or amended in whole or in part unless in a writing executed by the duly authorized officers of the respective parties.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed, sealed and delivered by their duly authorized officers, the day and year first above written.

(Seal) ATTEST:

STANLEY WARNER CINERAMA' CORPORATION

DAVID FOGELSON See'y

By S. H. FABIAN Pres.

(Seal)

CINERAMA, INC.

ATTEST:

ROBERT H. MONTGOMERY, JR.

Ass't See'y.

By WENTWORTH D. FLING

V. Pres.

(Seal) ATTEST:

CLAIRE LYNCH Seey

By JOHN H. HARTLEY Treasurer

ROBIN INTERNATIONAL, INC.

By N. REISINI President

~- ........ .--~~--_._ -_._. -- -- . _- .-- . .- __ .--

STATE OF NEW YORK, COUNTY OF NEW YORK,

} SS.:

On the 20th day of July, in. the year 1954, hefore me personally came S. H. FABIAN, to me known, who, being by me duly sworn, did depose and say that he resides at 625 Park Ave., New York City, N. Y.; that he is President of STANLEY WARNER CINERAMA CORPORATION, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.

JANET SHAPIRO JANET SHAPIRO

Notary Public for the State of New York No. 31-3613200

Qualified in New York County Ccrtif. Filed with N. Y. Co. Reg.

Commission Expires March 30, 1955

STATE OF NEW YORK, COUNTY OF NEW YORK,

} SS.:

On the 20th day of July, in the year 1954, before me personally came NICOLAS REISINI, to me

. known, who, being by me duly sworn, did depose and say that he resides at 325 E. 57th Street, New York City, N. Y.; that he is the President of ROBIN INTERNATIONAL, INC., one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.

JANET SHAPIRO JANET SHAPIRO

Notary Public for the State of New York No. 31-3613200

Qualified in New York County Certif. Filed with N. Y. Co. Reg.

Commission Expires March 30, 1955

STATE OF NEW YORK,

. COUNTY OF NEW YORK,

ISS.:

On the 20th day of July, in the year 1954, before me personally came WENTWORTH FLING AND JOHN HARTLEY, to me known, who, being by me duly sworn, did depose and say that they reside at 14 Davis Road, Port Washington, New York and Skyline Trail, Middlefield, Mass. respectively; that they are the Vice President and Treasurer respectively of CINERAMA, INC., one of the corporations described in and which executed the above instrument; that they know the seal of said corporation; that the seal affixed to said instrument is such corporate; seal; that it was so affixed by authority of the Board of Directors of said corporation, and that they signed their names thereto by like authority.

JANET SHAPIRO JANET SHAPIRO

Notary Public for the State of New York No. 31-3613200

Qualified in New York County Certif. Filed with N. Y. Co. Reg.

Commission Expires March 30, 1955

30

SCHEDULE A-Attached to and made a part of Agreement dated July , 1954 by and between STANLEY WARNER CINERAMA CORPORo\TION, ROBIN INTERNATIONAL, INC., and CINERAMA, INC.

Items contained in One Set of Cinerama Exhibition Equipment:

Screen Equipment

1 Center Screen-for radius screen

1 set Left Hand Louvres

1 set Right Hand Louvres

1 set Louvre Guide Holder Assemblies 1 set Center Screen Spacers

1 set Scaffolding

1 set Screen Supports (Channelling)

Projection Equipment

3 Projector Heads with Intermittents

3 Projector Pedestals with Junction Boxes

3 sets Projector Rails with Cross Members (Hardware)

18 Projector Pad Plates

3 Lower Projector Magazines

3 Upper Projector Magazines

3 Water Recirculators

3 Lamphouse Assemblies with Reflectors

3 Intensity Control Gate Housing Assemblies

3 Rectifiers

3 Super Snaplite Lenses

Sound Equipment

1 Rack #1 (Sound Head) with Junction Box

1 Lower Magazine '

1 Upper Magazine

1 Rack #2AP (Preamplifiers)

1 Monitor Speaker

1 Rack #34AH (Power Amplifiers)

5 A-4 Speaker Systems (Stage)

5-Horns L.F. lO-Speakers L.F. lO-Horns H.F. lO-Speakers H.F. IO-Throats

5-Networks

5 Speaker Platforms

8 Speaker Systems (Auditorium)

8-Cabinets

8-Horns

8-Speakers 802B 8-Networks

I6-Speakers 800A 8-Assemblies

Control Equipment

1 Servo Control Console

1 Sound Console

1 set Microphone and Headset, with gooseneck mount 1 set Patch Cords and Cable Assemblies

5-Sou nd Patch Cords

6-Single Phase Power Cords I-Three Phase Power Cords B223 3-Three Phase Power Cords B224 I-I.e. Cable 3-wire

I-I.e. Cable 2-wire

31

SCHEDULE A (continued)

Control Equipment (continued)

I-Head Connecting Cable 3-2-lv Cable Assemblies

3-117v Control Cable Assemblies

1 24v D.C. Power Supply

3 Rack #S (Projector Controls and Servo Amplifiers)

Intercoms and Crossboxes

Portable Intercoms-with potentiometer Portable Intercoms-without potentiometer Console Junction Crossbox

Sound Booth Crossbox, Servo & Intercom Booth Crossboxes, Servo & Intercom

'I:

I:

I.

Spare Parts for Foreign Installations

2 Projector Head with Intermittent

2 Intermittent

1 Differential Gear Box

2 Film Gate Assembly

2 Water Pump & Motor Assembly.

2 Projector Drive Chain

2 Differential Drive Chain

2 Vertical Shaft

2 Main Drive Gear

2 Intermittent Drive Gear

2 Sprocket Drive Gear

2 Shutter Drive Gear

1 Rectifier .

1 Drive Motor Assembly

1 Take-up Motor Assembly

1 Servo Motor

3 Lamphouse Reflector

3 Lower Magazine Spindle w /adaptor & stop nuts

3 Upper Magazine Spindle w/adaptor & stop nuts

2 Projector Take-up Belt

2 Sound Take-up Belt

2 Sound Drive Belt

2 Synchro Generator

2 Synchro Differential

2 Synchro Transformer

2 Allied Relay

2 Allied Relay

2 AH & H Contactor

2 Guardian Solenoid

6 Micro Switches

2 Switches

1 Center Off Switch

2 DPST Switches

4 Selenium Rectifier Stacks

3 Super Snaplite Lenses

1 Servo Amplifier

2 sets Glassware, each set containing: 4 Tubes. G.E. 0072

3" "5814

4 " RCA 6146

1 Tube, G.E. 6136 3 Tubes. 12AX7

1 Tube 12AT7

2 Tubes 6BL7GT

32

SCHEDULE A (continued)

Spare Parts for Foreign Installations (continued) 1 Tube 6SN7

1 " 6SL7

1 " 6AS7G

1 " 6J5

1 6J7

2 Tubes 6L6G t Tube 6V6GT 3 Tubes 5Y3T 1 5U4G Tube

2 Tubes 5R4GY

1 OB2(VR), G.E.

2 Tubes OA2(VR), R.CA.

2 Tubes 6N015 (Delay) Amperite 1 Tube l1SNOS (Delay) Amperite 1 Box 1 amp Fuses (3AG)

3 Boxes 1 amp Fuses (3AG-Slow Blow) 1 6y.1: amp Fustat

1 Box NE-Sl 'Pilot Lamps 1 " 47 Pilot Lamps

1 " E24 Mazda Lamps 1 " 313 G.E. Lamps

1 Bimetallic Tube

Operating Supplies

~ 30~" Cinerama Reels

5 Reel Lifters for above

10 SP-5 Reels 2000 ft.

33

SCHEDULE B-Attached to and made a part of Agreement dated July ,1954, by and between STANLEY WARNER CINERAMA CORPORATION, ROBIN INTERNATIONAL, INC., and CINERAMA, INC.

Charge to Sublicensee for use of Cinerama Studio for dubbing foreign language versions of Cinerama Motion Pictures:

1. $880.00 per day ora part thereof," plus :

2. Screening

(i) Picture Only-A.B.C. (i.e. 3 Panels)

3 Projectionists } .

1 Console Operator .

Picture &; Sound-A.B.C.

} : .

(ii)

. 3 Projectionists

1 Console Operator 1 Sound Man

(iii) B Panel Only &; Sound 1 Projectionist

1 Sound Man

} .

Recording Narration

(iv) Full Picture

3 Projectionists 1 .

~ ~~~~leM?~erator .

1 Recordist (v) B Panel Only

~ ~~~~dt~~~t } ' .

1 Recordist

Scoring Music

(vi) Picture &; Sound, A.B.C.

3 Projectionists I

t ~~~~::~~rator .

1 Asst. Recordist 1 "Boom" Man

} .

(vii)

Without Picture

1 Sound Man 1 Recordist

1 Asst. Recordist 1 "Boom" Man

Mixing

(viii) Mmng with Picture 3 Mixers

4 Projectionists 1 Recordist

3 Asst. Recordists

(ix) Mixing without Picture

~ ~;~~;dists } : .

3 Asst. Recordists

(x) Playback multiple tracks with picture or re-recording

~ ~~~~~~i~!;ator } .

} ..•..........................•

34

Day Week

$110.00

150.00

75.00

190.00

115.00

245.00

125.00

340.00

240.00

210.00

$ 460.00

650.00

350.00

825.00

525.00

1,025.00

555.00

1,455.00

995.00

910.00

SCHEDULE B (continued)

Note: ,It is understood that all studio work will be scheduled on reasonable notice but not less than twenty-four (24) hours.

If the present union rates are increased, or if any of the above services are rendered under circumstances requiring additional sound men, "boom" men, rewind men or other personnel for special effects, etc., overtime, holiday time or other items requiring additional compensation under union contracts, such additional compensation will be charged at actual cost. The following is the existing schedule of overtime charges under the union contract:

Any work in excess of eight hours from 8:30 A. M. to 5:30 P. M. Monday to Friday, inclu-

sive, will be at the following rates: . .

5 :30 P. M. to Midnight-time and half

Midnight to 8:00 A. M. and thereafter-double time. Saturday-time and a half

Sundays and holidays-double time.

. . A char~e will be made for royalties payable by CINERAMA to Westrex or companies supplying

Similar services. ,

35

-_. -~ .. -. ~ - -_ ......... _- - _. - - -.--._...__,

SCHEDULE C-Attached to and made a part of Agreement dated July ,1954, by and between

STANLEY WARNER CINERAMA CORPORATION, ROBIN INTERNATIONAL, INC., and CINERAMA, INC.

Additional equipment necessary for Cinerama exhibitions, the actual cost of which is pre-opening expense of Sublicensee, pursuant toParagraph 19:

Rewind and Inspection Equipment

I Special 3-unit Cutting Table (24") complete with 4-way dynamics, extra spacers

and 4-way synchronizer

I Porcelain Top Table 6Ox24x30 drilled for and complete with motor rewind set-up.

I Formica Top Table 6Ox24x30 drilled for and complete with motor rewind set-up.

3 Steel top tables 6Ox18x30 drilled for and complete with motor rewind set-up.

5 . Steel Chairs 28"

1 Utility Cabinet

4 Scrap Film Cans

I Immersion Barrel

2 Cutting Barrels

1 ER-2 Rack

3 Lining Bags

1 DAF-2 Film Flange

2 Griswold R-2 Splicers

1 Magnetic Reader Model 700

1 • Portable Bell and Howell Splicer Model 198-A

1 Rewind Table drilled for and complete with hand rewinds

\ OR

1 Bell & Howell Professional Splicer Model 5692-A2 with extension stands and

31" dynamics.

Operating Supplies

12 pro Film Gloves

1 can Special Motor Lubricant (for motor rewinds)

25 ft. Belting 34"

1 btl. Energine

I pkg. Q-tips

15 pkgs. Lens Tissues

4 sets Allen Wrenches 3 pro Carbon Pliers

6 Screwdrivers

6 Flexible-spout Oil Cans

1 gal. Century Projector Oil

. 1 lb. Lubriplate 630AA

1 pt. SAE 20 Oil

1 pt. Sta-Put 316 Lubricant

~ oz. Dow Corning Damping Fluid 1 btl. Strong Lubricant 23066

1 tube Strong Lube 23057

1 tube Strong Lube 23068

Curtain Equipment

1 set Operating Curtains with motors, etc. 1 set Track for Traverse Curtains

1 set Screen Masking

Test Equipment

3 Magnification Gauges

3 Lamp Alignment Assemblies with 500w bulbs

2 Match Line Fixtures (T -100*)

1 roll Standard Frequency Test Film AT*FR 3 loops scoo cycle Azimuth Test AT-8K

3 loops 1000 cycle Standard Level Test AT-IK

1 Hewlett Packard 200AB Oscillator

I Hewlett Packard 400D Vacuum Tube Voltmeter

1 Hickock 380A Oscilloscope

1 Simpson 260RT Meter

36