Security Interest

a. To the extent, if any, that the Producer owns any right, title or interest in the Collateral, the Producer hereby grants to the Guarantor a security interest in the Collateral to secure repayment of the Secured Sums, if any. Said security interest shall be subject to the Prior Rights, but shall have priority over any other rights or security interests of any other person, company or entity in or with respect to the Collateral, including deferments and gross receipts or net profit participations. The Collateral, as that term is used in this Completion Agreement, consists of: (i) all positive and negative film, all sound tracks and all other physical properties of or relating to the Film, whether now or hereafter in existence and wherever located; (ii) all literary property and ancillary rights in relation to the Film, including without limitation the Screenplay, the Underlying Literary Property, if any, and the copyrights thereof, (iii) the copyright or copyrights of the Film; (iv) the music of the Film; (v) all rights to distribute, lease, license, sell, exhibit, broadcast or otherwise deal with the Film by all methods and means and in all media throughout the universe; (vi) all contracts and contract rights, accounts, inventories and general intangibles of the Producer relating to the Film or to any literary property and ancillary rights and any other elements of the Film referred to in this subparagraph; (vii) the Gross Receipts and all other financial proceeds of the Collateral, including all income and receipts derived and to be derived from the marketing, distribution, licensing, sale, exhibition, broadcasting and other exploitation of the Film and of the other elements of the Collateral, and (subject to paragraph 3 of these Standard Terms) all proceeds of insurance relating to the Film; (viii) the Reserved Rights.

b. With respect to its security interest, the Guarantor, its successors and assigns, are hereby granted all of the rights, powers and privileges of a secured party under the California Uniform Commercial Code in force and effect from time to time.

c. The Producer agrees to execute and deliver to the Guarantor, when requested by the Guarantor from time to time, UCC Financing Statements and a Mortgage of Copyright in form satisfactory to the Guarantor for recording purposes, confirming and evidencing the Guarantor's security interest in and to the Collateral. The Guarantor is hereby irrevocably appointed the Producer's attorney-in-fact to execute such instruments in the name and stead of the Producer, should the Producer fail to do so upon request, and to file or record them as deemed necessary or advisable by the Guarantor.

d. The Producer shall not (i) grant any rights or security interests (other than the Prior Rights) ranking in priority to or pari passu with the security interest hereby granted; (ii) while any monies are due to the Guarantor hereunder, agree to market or exploit any of the Collateral, other than pursuant to the Distribution Agreements, and the Financing Agreement, without the prior written consent of the Guarantor.

e. The security interest hereby granted shall terminate: (i) if and when it is finally determined that the Guarantor will incur no liability under the Completion Guaranty; or (ii) (if such liability has been incurred) if and when the Guarantor has received payment in full of the Secured Sums. When and if said security interest terminates, the Guarantor shall execute such instruments as may be necessary to evidence the release and termination of its security interest.

f. In the event that, pursuant to the Completion Guaranty, the Guarantor repays any financing provided by the Financier, then, in addition to its security interest hereunder, the Guarantor shall automatically be subrogated to the security interests of the Financier in relation to such financing, and shall in all respects succeed to the position of the Financier under the Financing Agreement and under all instruments ancillary thereto.

9. Additional Remedies. As an additional remedy, but subject to and so as not to adversely affect the rights of the Distributors pursuant to the Distribution Agreements, and of the Financier pursuant to the Financing Agreement, or any other Prior Rights, if the Guarantor expends or advances any Secured Sums the Guarantor shall, after consulting with the Producer, have all or any of the following rights (either itself or by appointment of an agent, on such terms as to the compensation of such agent and otherwise as the Guarantor shall reasonably determine):

a. To take possession of the Collateral or any part thereof;

b. To manage and control, or to supervise the management and control, of the business of the Producer in relation to the Film, and for this purpose to raise or borrow monies upon the security of the Collateral or any part thereof, and to engage such personnel or such other companies as it shall consider necessary;

c. To enter into distribution, exhibition, sales and leasing agreements in relation to the Film or any of the Collateral for any media and for any territories, and to make any settlements, arrangements and compromises, and to do such other acts and things in relation to the Film as the Producer would itself have the right to do.

All such acts of the Guarantor shall be such as in its good faith judgment it considers to be in the best interests of the Guarantor, the Distributors, the Financier and the Producer. If called upon by the Guarantor, the Producer shall, without compensation, render such assistance to the Guarantor in connection with such action by the Guarantor or its appointee as the Guarantor may reasonably require from time to time. The Producer irrevocably appoints the Guarantor its attorney-in-fact, with power to appoint other persons as attorney-in-fact, to execute such instruments in the name and stead of the Producer as they may consider necessary and proper in acting pursuant to this paragraph 9. The powers and authority of the Guarantor pursuant to this paragraph 9 shall cease when the Guarantor has recouped the Secured Sums, without prejudice however to any acts done by the Guarantor or its appointee and the continued effectiveness of all instruments executed by them or either of them pursuant to this paragraph. Subject to the Prior Rights, all monies received by the Guarantor or its appointee pursuant to the exercise of the Guarantor's powers and authority under this paragraph, which remain after payment or recoupment of all costs, charges and expenses incidental to the exercise of such powers and authority, and after payment of the Secured Sums, shall be paid to the Producer or other party entitled thereto.

10. Statements. If and as long as there are any unrecouped Secured Sums, the Producer shall deliver or cause to be delivered to the Guarantor, concurrently with or immediately following delivery thereof to the Producer, copies of all statements and reports which the Producer receives from the Distributors and other third parties in relation to the marketing and exploitation of the Film, or any of the other Collateral.

11. The Completion Guaranty. The Producer hereby acknowledges and confirms that it is not entitled to nor does it have any interest in the benefit of the Completion Guaranty, and the Producer hereby waives and releases all interest and benefit in the Completion Guaranty, present or future.

12. Miscellaneous Provisions. This Completion Agreement has been executed in the State of California, and shall in all respects be interpreted, enforced and governed by the laws of that State. The language of this Completion Agreement shall be construed as a whole according to its fair meaning and not strictly for or against either of the parties. If the Producer consists of more than one company, this agreement shall be binding jointly and severally upon such companies and each of them. Any term used in this Completion Agreement in the singular shall be deemed to be used in the plural wherever appropriate. The Producer acknowledges that the Guarantor has entered into agreements with certain insurers who insure certain of the Guarantor's obligations in relation to the Film. Pursuant to those arrangements, such insurers shall have the right to assume the Guarantor's obligations and rights under this Completion Agreement, subject to the terms hereof. If any one or more of the provisions of this Completion Agreement shall be held to be illegal or unenforceable in any respect, the legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. No modification or waiver of any provision of this Completion Agreement or waiver of any default hereunder shall be effective, unless in writing and signed by the parties hereto (in the case of a modification) or by the waiving party (in the case of a waiver), and any such waiver shall apply only to the specific matter waived.

13. Notices. Notices may be served by either party hereto on the other by mail, telecopy or telegram, and shall be deemed to have been served at the expiration of one business day after the date of mailing, postage pre-paid, or the date of dispatching the telecopy or telegram, charges pre-paid or otherwise provided for. In proving such service it shall be sufficient to show (by affidavit of the person who sent the notice) that the telecopy, telegram or letter was dispatched or posted as aforesaid. The respective addresses of the parties shall be as stated at the beginning of the Principal Agreement, but either party may change its address from time to time by written notice to the other party.

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Film Making

Film Making

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