Information on License/ Royalty Agreement for Educhiro DVD Distribution

The following terms are designed for the distributor of the Big Idea. The Educhiro may license the right to distribute the production in North America to one distributor, and license the European rights to a sales agent.

Territory

This specifies the countries in which the film can be distributed by the distributor.

Term

This sets out the period of time the distributor will hold distribution rights in the film. All rights are subject to a period of 5 years to be renegotiated at the end of this period as per the contract signing date.

Rights granted

This agreement distinguishes between the media rights granted to the distributor (theatrical, video and DVD, television rights etc.) and those media rights which are reserved to the Educhiro e.g. radio rights. You should determine whether the rights granted are exclusive or non-exclusive. The agreement does not give exclusive rights to show the Big Idea within the specified media/territory/term.

Educhiro's warranties and representations

Educhiro will provide assurances that there is no infringement of copyright.

Gross receipts

this means all monies actually received by the distributor from the exploitation of the DVD before any deductions have been made.

Net proceeds

this is the amount payable to the Educhiro from the proceeds derived from the exploitation of the DVD after costs incurred by the distributor have been deducted. Costs can include distributor fees, commission and expenses.

Expense caps

Expense caps are applicable for unreasonable claim amounts by the distributor, which would reduce the amount left for the Educhiro to recoup.

Distributor's obligations

Distributors should use their best efforts to realise gross receipts from marketing and exploitation of the DVD.

Accounting

The distributor should be under obligations to maintain accurate and true records of expenditure and Educhiro should have the right to receive regular accounting statements on the DVD.

Termination

Educhiro reserves the right to terminate this agreement at any time based on the value given by distributors for showing the Big Idea. The distributor will have the right to increase and/or extend the viewing of the Big Idea in terms of license/ royalty fees. If the distributor is unable to increase and/or extend the viewing of the Big Idea and thereby minimizing the revenue generated directly therein, Educhiro may opt to select an alternative distributor.

Payments

A percentage royalty on viewing of the Big Idea will be paid to Educhiro from the net proceeds. The terms of payment are to be:

Territory	Fee per Minute
United States	$70 USD - $300 USD
Canada	$70 CAD - $250 CAD
Europe	€50 - €250
Australia	$100 AUD - $400 AUD

If exclusive rights in the selected territories are negotiated this fee will be amended.

Sales & Income

Any sales of the Big Idea made from direct viewing through the distributors networks will be subject to a percentage for the distributor to e negotiated.

Withholding Tax on Licensed Films

It is worth noting that countries the EU member states, the UK and the USA, can legally withhold up to 40% of the due license fee as withholding tax, until Educhiro is able to provide the Licensee with a Certificate of Residency from the local tax office, where Adjustment Productions (AP) is registered. If AP does not have a registered company, AP will not be able to avoid the tax. The certificate changes annually and is needed in order to prove where AP's main business takes place from an overseas office. If AP has a distributor, you will be able to deal with this for you, as they will have submitted annual Certificates of Residency to each international Licensee / Broadcaster.

In the USA AP will also need to register for an UIN (Unique Identification Number) and fill out the W1/BEN form from the Inland Revenue in the USA to avoid additional taxation.