4.1 Subject to Mandatory Delivery (as hereinafter defined) being effected, the Licensee hereby agrees to make payment of the Licence Fee to the Bank as provided in Paragraph 2 hereof, in full, without offsets, withholdings, counterclaims or defences which the Licensee may have or claim against the Producer pursuant to the Licence Agreement (including without limitation, any right of cross-collateralization with respect to any other films or programmes), all of which are expressly reserved by the Licensee as against the Producer but only to the extent that the exercise of such rights does not alter, impair or derogate from the Bank's rights to receive timely payment of the Licence Fee in full hereunder. The Licensee shall have no claim against the Bank for return or refund of any funds paid to the Bank hereunder, such rights being reserved by the Licensee as against the Producer as provided elsewhere herein.
It is essential to the Bank that the Licensee's rights in the Film (including copyright) do not vest and that the Licensee does not become entitled to enjoy its rights in the Film until the License has been paid. It is imperative that the Bank (or the Producer on behalf of the Bank) is able to exercise its rights with respect to the Film and reexploit the rights granted to the Licensee in the event that the Licensee does not pay for the Film. Depending on the jurisdiction, this type of clause is also important to overcome the claims of an administrator, receivers or trustees of a Licensee in circumstances of bankruptcy and insolvency. A provision is added for the benefit of and to comfort the Licensee which permits the Licensee to promote and market the programme prior to vesting. Terms have also been added to confirm the Bank's first priority security and to provide the Licensee with quiet enjoyment of its rights unless and until it defaults.
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