Term: March 16, 2012 (the “Effective Date”), to March 14, 2013 (“Term”). Current Business



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AMAZON FULFILLMENT SERVICES, INC. (“AMAZON”)/
SONY PICTURES HOME ENTERTAINMENT INC. (“SPHE”)
FY13 RETAIL PROGRAM




  1. Term: March 16, 2012 (the “Effective Date”), to March 14, 2013 (“Term”).




  1. Current Business: The following retail program (“Retail Program”) applies to Amazon’s existing business during the Term of this agreement (“Agreement”). In the event that Amazon’s purchase volume materially increases as a direct result of Amazon merging with or acquiring another entity, the parties agree to review and amend the Retail Program to accommodate such increase; provided, however, that if the parties are unable to agree on such amendments within sixty (60) days of the commencement of the review, then no amendments shall be made to this Agreement and this Agreement shall remain in full force and effect.




  1. Formats: This Retail Program applies to the DVD and/or Blu-ray Disc™ formats only (“Qualifying Formats”). For the avoidance of doubt, any and all forms of digital transmission, including but not limited to digital sell-through and VOD, will not be included in the Retail Program.




  1. Qualifying Titles: A “New Release” title is defined as any SPHE feature-length theatrical motion picture that (a) is purchased by Amazon during the Term within ninety (90) days following such title’s initial release date on any of the Qualifying Formats (“Release Date”) and (b) has a DVD SRP over nine dollars and ninety-five cents ($9.95). New Releases will include any SPHE direct-to-video or made-for-television feature-length motion picture that is purchased by Amazon during the Term within ninety (90) days following such title’s Release Date. A “Catalog Title” is defined as any SPHE theatrical, direct-to-video or made-for-television feature-length motion picture that is purchased by Amazon during the Term on any of the Qualifying Formats and that is not a New Release. A “TV Title” is defined as any SPHE audiovisual work (including, without limitation, works originally created for television) that is purchased by Amazon during the Term on any of the Qualifying Formats and that is not a New Release or a Catalog Title. New Releases, Catalog Titles and TV Titles are collectively referred hereinafter as the “Titles”. For the avoidance of doubt, the following shall be excluded from this Agreement: (aa) any feature-length motion picture made available with a DVD SRP of less than nine dollars and ninety-five cents ($9.95) and (bb) any title with a Release Date after March 14, 2013.




  1. Rebate Calculations and Processing:




    1. For purposes of calculating the Rebate (as defined in Section 6), “Qualifying Net Purchases” means all direct purchases by Amazon and its Affiliates (as defined below), less returns, price protection adjustments and Non-Qualifying Purchases (as defined in Section 10). All rebates hereunder will be paid in the form of a credit authorization issued by SPHE to Amazon or an Affiliate designated by Amazon. In the case of all rebates herein, no credit authorizations shall be issued until after all returns processing has been completed and the applicable reporting from Amazon has been received by SPHE.Affiliate” means, with respect to Amazon, any entity that controls, is controlled by or is under common control with Amazon. For the avoidance of doubt, Amazon will remain primarily liable for all of Amazon’s obligations hereunder, regardless of whether such obligations are to be performed by Amazon or an Affiliate.




    1. For purposes of processing the Rebate, SPHE will provide Amazon with Rebate reporting and credit authorizations based on Qualifying Net Purchases that occur within each of the following periods (“Rebate Periods”): (i) Effective Date, through June 15, 2011 (“Q1 FY13”); (ii) June 16, 2012, through September 14, 2012 (“Q2 FY13”); (iii) September 15, 2012, through December 7, 2012 (“Q3 FY13”); and (iv) December 8, 2012, through March 14, 2013 (“Q4 FY13”); provided, however, such Rebate reporting and credit authorizations will not be issued until the end of the calendar quarter in which the applicable Rebate Period ends. SPHE will make commercially reasonable efforts to issue such credit authorizations within sixty (60) days of the end of each calendar quarter, provided that SPHE has received the applicable reporting from Amazon. Amazon agrees not to charge back or take any deductions for any Rebates until the corresponding credit authorization is provided by SPHE; provided however that Amazon may charge back or take a deduction for such Rebate if SPHE, after receipt of the applicable reporting from Amazon for such Rebate, does not issue a credit authorization within sixty-one (61) days following the end of the applicable calendar quarter.




  1. Rebates; Merchandising Sponsorship: In consideration for the Placements described in Section 7 and Merchandising Sponsorship Credit described in Section 8 below, SPHE will:




    1. Provide Amazon with a seven and four-tenths percent (7.4%) rebate credit (the “Rebate”) on all Qualifying Net Purchases of any and all Titles; and




    1. Spend at least one million dollars ($1,000,000) throughout the Term in merchandising sponsorships in connection with the advertising of various Titles (as determined by SPHE in its sole discretion) (“Merchandising Sponsorships”) on Amazon’s consumer facing website (www.amazon.com).




  1. Placement Commitments: Amazon agrees that it or one of its Affiliates will provide, at no additional cost to SPHE, the following “Placements” throughout the Term.




    1. For Titles designated as high priority Titles (“High Priority Titles”) on Exhibit A attached hereto and incorporated herein, Amazon will (i) create campaigns for such High Priority Titles and provide rotational placement on Amazon’s “Movies and TV” homepage and/or “Blu-ray” homepage, as applicable by format, including a custom designed site stripe on its “Movies and TV” homepage that will remain in rotation starting three (3) weeks prior to the Release Date and continuing one (1) week after the Release Date, (ii) provide a single new product (“SNP”) e-mail campaign to a targeted group of unique customers.




    1. For Titles designated as medium priority Titles (“Medium Priority Titles”) on Exhibit A, Amazon will provide prominent placement on Amazon’s “Movies and TV” homepage and/or “Blu-ray” homepage, as applicable by format, including a face-out in a so-called “three-pack” or “six-pack” placement that will remain in rotation starting three (3) weeks prior to the Release Date and continuing one (1) week after the Release Date. With respect to each Title listed on Exhibit A, the parties acknowledge and agree to review and make adjustments (to the extent necessary) to the High Priority Title / Medium Priority Title designations on a quarterly basis.




    1. All Amazon.com merchandising support (e.g., SNPs) and placements are dependent upon SPHE providing and uploading images and descriptions for its products onto a mutually acceptable FTP site accessible by Amazon; provided, however, that on a case-by-case basis, SPHE may, in its sole discretion, elect to use Amazon’s current uploading process to upload such images and descriptions.




    1. If requested in advance by SPHE on a Title-by- Title basis, Amazon will include all New Releases with North American box office receipts greater than one hundred million dollars ($100,000,000) with Gateway rotational placement (to be scheduled as “King of the Hill”) at no additional cost to SPHE for three (3) weeks prior to the Release Date and continuing one (1) week after the Release Date.




    1. Amazon will provide a Sony Pictures Classics browse bar on the following genre pages in the “Movies and TV” store (if and to the extent Amazon continues to maintain such genre pages) throughout the Term: Drama, Foreign Language & International, Documentary, and Indie & Art House.




    1. Notwithstanding anything to the contrary in this Agreement, Amazon may modify or discontinue particular types of Placements as long as Amazon (i) provides notification of any such modifications or discontinuations to SPHE, and (ii) replaces such Placements with placements intended to provide SPHE with a similar quality and level of exposure. In the event Amazon modifies or discontinues any such Placements, Amazon will discuss the potential substitute placements with SPHE.




  1. Merchandising Sponsorship Credit: Amazon agrees that it or one of its Affiliates will provide to SPHE up to six hundred thousand dollars ($600,000) in credit for SPHE to apply, from time to time, towards Merchandising Sponsorships purchased by SPHE throughout the Term (the “Merchandising Sponsorship Credit”). For the avoidance of doubt, the Merchandising Sponsorship Credit is incremental to, and may not be applied against, the Merchandising Sponsorships SPHE is obligated to purchase pursuant to Section 6(b).




  1. Ordering Logic; Payment Terms: When ordering units of a Title, Amazon will use rounding logic for carton quantities of twenty percent (20%) of a case, rather than sixty percent (60%), meaning for cartons containing a maximum of thirty (30) units of a Title, Amazon will round up to such maximum quantity of thirty (30) units for orders of six (6) units or more of a given Title. If five (5) units or less are needed of a Title, Amazon will order in individual units. SPHE agrees Amazon’s payments terms will be net seventy-five (75) days.




  1. MAP Policy: Amazon will make independent business decisions related to SPHE’s Minimum Advertised Price Policy (“MAP Policy”) and will determine the retail prices of products in its sole discretion. In the event that an advertisement published by Amazon with a Title does not comply with the MAP Policy, then any purchases by Amazon of such Title during the time period during which Amazon is publishing such advertisement will be considered “Non-Qualifying Purchases.”




  1. SPHE Provided Materials: Without SPHE’s prior written approval, in no event will Amazon edit any SPHE-provided images used in connection with fulfilling its obligation to provide the Placements (other than resizing that does not change the relative dimensions) or change or delete any copyright notice, trademark notice or similar notices, credits or billings (including but not limited to the size or prominence or position of any such credits or billings) and/or any depiction or images of talent included in such SPHE-provided images. Notwithstanding the foregoing, Amazon may obscure or otherwise render such images or notices (or portion of such images or notices) not visible for marketing purposes (e.g., due to “stacked” or “fanned” images containing the notices). If SPHE requests that Amazon update or replace any SPHE-provided content used in connection with providing the Placements in order to comply with any restrictions, requirements or guidelines to which SPHE is bound, Amazon will either (i) update or replace such SPHE-provided content as requested by SPHE or (ii) discontinue its distribution of such SPHE-provided content. Amazon will not use, or authorize the use of, any SPHE-provided materials to create any direct or indirect promotions, endorsements or commercial tie-ins with any other product or service, and Amazon’s use of SPHE’s and/or its affiliates’ registered and unregistered trademarks, trade names, service marks, logos, commercial symbols and other designations shall, at all times, inure to the benefit of SPHE and/or its affiliates, as applicable. As between SPHE and Amazon, all SPHE-provided materials, including without limitation all versions and elements thereof and all images and sound embodied therein, are the sole property of SPHE and/or its affiliates, subject only to any rights Amazon may have under this Agreement, under any other valid license, or under applicable law, and, except by official order of a governmental authority or court of law, Amazon will not grant or authorize any lien, charge, pledge, mortgage or encumbrance that attaches thereto. If SPHE believes that Amazon has used any SPHE-provided materials in a manner that breaches this Section 11, SPHE shall provide Amazon with written notice specifically describing the alleged breach, the location on the Amazon Site where the alleged breach occurred, and the SPHE-provided materials involved in the alleged breach (such notice, an “Objectionable Use Notice”). Except for any breach of this Section 11 due to the gross negligence and/or the willful or intentional misconduct of Amazon, its employees or agents, Amazon will be deemed not to have breached this Section 11 if, within five (5) business days (reducible to two (2) business days if SPHE describes in reasonable detail any exigent circumstances on the Objectionable Use Notice) after Amazon’s receipt of the Objectionable Use Notice, Amazon discontinues its distribution of the SPHE-provided materials identified in the Objectionable Use Notice in the manner described in the Objectionable Use Notice.




  1. SPHE Third Party Distribution: If SPHE now controls or gains control of home entertainment distribution rights in the Territory for a third-party produced title or a third-party line of product, then SPHE, in its sole discretion, may, at anytime: (a) include such title or line of product within the definition of New Release, Catalog Title or TV Title, or (b) exclude such title or third-party line of product from this Agreement.




  1. Termination Rights: The parties agree that should either party not be in compliance with the terms of this Agreement, and does not cure such non-compliance within thirty (30) days of written notice thereof, the other party may, in addition to any other remedies it may have, upon written notice, cancel the remaining portion of the Agreement. Each party’s obligations hereunder will survive expiration or termination of this Agreement to the extent there are any outstanding obligations relating to the pre-termination or pre-expiration period, and any provision of this Agreement, which by its nature should survive, will survive the termination or expiration of this Agreement.




  1. Reporting: On a daily basis, Amazon will provide SPHE, via EDI, POS information on a Title-by-Title basis.




  1. Site Control: Amazon will determine the content, appearance, functionality and all other aspects of the Amazon Site in its sole discretion, and Amazon may redesign, modify, and alter the content, appearance, and functionality of the Amazon Site from time to time in its sole discretion.




  1. Limitation of Liability: Except for amounts arising out of a breach of a party’s confidentiality obligations set forth in Section 17, neither party will be liable under this Agreement for any special, incidental, indirect, or consequential damages or any lost revenue, profits, or business arising out of or in connection with this Agreement even if a party has been advised of the possibility of the damages by the other party.




  1. Confidentiality: As used in this Agreement, “Confidential Information” means: (1)  any trade secrets and other non-public information that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential, including without limitation non-public information relating to either party’s customers, web sites, product plans, designs, costs, prices or names, finances, marketing plans, business opportunities, personnel, research, development or know-how; and (2) the existence, terms and conditions of this Agreement. Confidential Information does not, however, include information that: (A) is or becomes generally known or available by publication, commercial use or otherwise through no fault of the receiving party; (B) is known and has been reduced to tangible form by the receiving party prior to the time of disclosure and is not subject to restriction; (C) is independently developed by the receiving party without the use of the other party’s Confidential Information; (D) is lawfully obtained from a third party that has the right to make such disclosure; or (E) is made generally available by the disclosing party without restriction on disclosure. Each party shall protect the other’s Confidential Information that it receives in connection with this Agreement from unauthorized dissemination and use with the same degree of care that such party uses to protect its own like information and in no event using less than a reasonable degree of care. Neither party will use the other’s Confidential Information for purposes other than those necessary to directly further the purposes of this Agreement. Neither party will disclose to third parties the other’s Confidential Information without the prior written consent of the other party. Except as expressly provided in this Agreement, no ownership or license rights are granted in any Confidential Information. The other provisions of this Agreement notwithstanding, either party will be permitted to disclose the Confidential Information to its outside legal and financial advisors, and to the extent required by applicable laws, provided however that before making any such required filing or disclosure, the disclosing party will first give written notice of the intended disclosure to the other party and cooperate in seeking to obtain any available confidential treatment for the same. Without limiting the generality of this Section 17, neither party will issue any press release or make any other public disclosure regarding this Agreement or its terms without the other party’s or its Affiliates’ prior written consent.




  1. Governing Law; Jurisdiction; Venue. This Agreement will be governed by the laws of the State of New York, without reference to its conflicts of law rules. The United Nations Convention on Contracts for the International Sale of Goods will not apply. For any dispute arising out of this Agreement, the parties agree that any action, claim or suit by the parties will be subject to the venue and exclusive jurisdiction of the courts located in New York, New York. The parties waive their respective rights to trial by jury for any action, claim or suit brought by either party against the other on any matter whatsoever arising out of, or in any way connected with, this Agreement.




  1. Assignment. Neither party may assign this Agreement, in whole or in part, without the other party’s prior written consent (which will not be unreasonably withheld), except to any of its corporate Affiliates or in connection with any merger, consolidation, reorganization, sale of all or substantially all of its assets, or similar transaction. Subject to the foregoing, this Agreement will be binding on and enforceable by the parties and their respective successors and permitted assigns. Any attempted assignment in violation of this provision will be null and void.




  1. Notices. Any notice or other communication under this Agreement given by a party to the other party will be in writing and will be sent to the intended recipient by registered letter, receipted commercial courier, or electronically receipted facsimile transmission at the address(es) set forth on the signature page of this Agreement. Either party may change its address for notices by delivery of written notice in accordance with this Section 20.




  1. Changes to Agreement. No modification or waiver of this agreement shall be binding unless executed in writing by the parties.




  1. Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or electronic scan), each of which will be considered an original but all of which together will constitute one agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

This Agreement constitutes the complete, final and exclusive statement of the terms of the agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions of the parties.
This Agreement is signed by duly authorized representatives of the parties as of the Effective Date.


Sony Pictures Home Entertainment Inc.

(“SPHE”)

By:

Name:

Title:



Address:

Sony Pictures Home Entertainment Inc.


10202 West Washington Blvd.
Culver City, CA 90232
Attention: Senior Vice President, Business Affairs
Facsimile: (310) 244-0341
With copies to:

Sony Pictures Home Entertainment Inc.


10202 West Washington Blvd.
Culver City, CA 90232
Attention: President
Facsimile: (310) 244-1146
Sony Pictures Entertainment Inc.

10202 West Washington Blvd.

Culver City, CA 90232

Attention: General Counsel

Facsimile: (310) 244-0510
Sony Pictures Entertainment Inc.

10202 West Washington Blvd.

Culver City, CA 90232

Attention: Executive Vice President, Corporate Legal

Facsimile: (310) 244-2169


Amazon Fulfillment Services, Inc.

(“Amazon”)

By:

Name:

Title:



Address:

Amazon Fulfillment Services, Inc.


PO Box 400818
Las Vegas, NV 89140-0818
Facsimile: (702) 361-6405
With a copy to:

Amazon.com, Inc.

410 Terry Avenue North

Seattle, WA 98109-5210

Facsimile: (206) 266-7010

Attention: General Counsel





EXHIBIT A
High and Medium Priority Titles


Title

Priority

May 2012

 

WOMAN IN BLACK, THE

Medium

June 2012

 

THREE STOOGES, THE – ULTIMATE COLLECTION

Medium

GHOST RIDER SPIRIT OF VENGEANCE

High

21 JUMP STREET (2012)

High

ARTIST, THE

High

DAMAGES – SEASON 4

Medium

July 2012

 

SALMON FISHING IN THE YEMEN

Medium

DETENTION (2012)

Medium

HATFIELD AND MCCOYS

Medium

August 2012

 

JESSE STONE: BENEFIT OF THE DOUBT

High

RAID, THE: REDEMPTION

Medium

THINK LIKE A MAN

Medium

DARLING COMPANION

Medium

PIRATES! BAND OF MISFITS, THE

High

September 2012

 

LAWRENCE OF ARABIA (RESTORED VERSION) (DLX-3)

High

MEN IN BLACK 3

High

RESIDENT EVIL: DAMNATION

Medium

November 2012

 

AMAZING SPIDER-MAN (3D), THE

High

ARTHUR CHRISTMAS

High

THAT’S MY BOY

Medium

TOTAL RECALL (2012)

High

HOPE SPRINGS

Medium

SPARKLE

High

December 2012

 

RESIDENT EVIL: RETRIBUTION

Medium

January 2013

 

BEN HUR (2010)

High

LOOPER

Medium

PREMIUM RUSH

Medium

TO ROME WITH LOVE

Medium

HOTEL TRANSYLVANIA

High

ROBOT AND FRANK

Medium

February 2013

 

CELESTE AND JESSE FOREVER

Medium

HERE COMES THE BOOM

Medium

KILL FOR ME

Medium

March 2013

 

ISHTAR

Medium




CONFIDENTIAL of




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