(Additional provision)

[The following provision may be inserted in this clause, and the other clauses correlated therewith]:

For the purpose of determining the cost of production of the negative of each of said photoplays, it is mutually agreed that the following items only of expense actually incurred in the production of each of said photoplays shall be included in the statement of cost of production:

Camera:

Salary of Cameraman Salary of Assistant Cameraman Rental of Extra Equipment

Cast:

Salary of - (leading actor) Salaries of Leads Salaries of Extras

Direction:

Salary of - (director)

Salary of Assistant Director and Staff

Electrical:

Salaries of Electricians and Assistants Charges for Current Rental of Extra Equipment

Laboratory:

Raw Stock at Cost Inserts and Titles Developing and Printing Salaries of Cutters

Details of Items of Negative Cost.

Location:

Transportation - Automobile Hire, Hotels,

Meals, Railroad Fare

Location Rent Properties:

Salaries of Property Men

Rental of Furniture and Props

Cost of materials Rent:

Rent of Studio Scenic:

Salary of Scenic Artist

Wages of Stage Carpenters, Wood Workers, Stage Hands and Laborers

Materials for Sets and Scenes Stills:

Salary of Cameraman

Materials Story:

Cost of Story Cost of Scenario or Continuity Wardrobe:

Rental of Costumes. Sundries:

Expenses incurred in the rental or purchase of materials, etc., not specifically mentioned above but necessarily used in the respective production, including trucking, expressage, special labor, and items of a similar nature. Overhead:

Salaries of Executives

Salaries of Clerical Force

Stationery and Printing

Insurance

Executive Office Rent

Sundries not specifically mentioned above. 10. (a) It is mutually agreed that Distributor shall receive for its services in distributing and

Compensation.

exploiting each of such photoplays and for providing the exchange facilities for the handling and distribution thereof, and shall deduct from all amounts collected by it or by its distributing agency, a sum equivalent to........per cent.

(......___%) of all gross amounts collected by it or by its distributing agency as the rental of positive prints of each of said photoplays in the United States of America and as royalties on, or as proceeds, of the sale, rental or other disposal of any right, license or privilege granted to any firm, corporation or individual to lease, license, exhibit, exploit or distribute said photoplays or any of them in any country outside of the United States of America, and a sum equivalent to the remaining ........per cent. (.......___%) of said gross collections shall accrue to the Producer but shall be retained by the Distributor as follows:

1st. To the repayment of the amounts advanced by Distributor or for Distributor's account for positive prints' supplied hereunder for exploitation in the United States, for advertising and publicity and for insurance premiums.

2nd. To the prepayment to the Producer of the actual cost of the production of the negative of the photoplays, which the parties have agreed shall not exceed the sum of........

dollars ($......) for each photoplay.

3rd. To the repayment of all sums, expended by Distributor or on Distributor's behalf, in procuring action upon the said photoplays, by the National Board of Review, and by any Board of Censors or other censoring body.

4th. To the repayment of any and all sums due or coming due to the Distributor upon other photoplays released pursuant to this agreement by reason of the Distributor's advances for the making of positive prints, for advertising and exploitation, for repayment of negative costs, or agreed percentages thereof, and for repayment of censorship and review charges, (b) After all the amounts provided to be repaid in subdivision (a) of this clause have been repaid, it is mutually agreed that the Distributor shall receive for its services, as in said subdivision set forth, a sum equivalent to........per cent

(......___%) of all gross amounts described in said subdivision and a sum equivalent to..........

per cent (......___%) of said gross amounts shall accrue and be paid to the Producer. Distributor agrees to pay the balance to the Producer concurrently with the rendering of the statements provided for in clause........hereof.

11. The Producer hereby agrees that each feature unit deliverable to Distributor hereunder shall be free and clear of and from any claim, hen, mortgage, or other encumbrance of any kind or character whatsoever and that Distributor shall have and is hereby granted a first lien upon each such feature unit and each and every part thereof, as security for the advances to be made against the respective production; that such lien shall attach and come into being forthwith upon the delivery of the respective feature unit to the carrier for transportation to the Distributor, and shall continue as a first, prior and only lien or encumbrance upon the respective photoplay from such date until the expiration of the period for which the rights in the respective photoplay are hereby granted to the Distributor, and the Producer hereby agrees that the Distributor shall have the right to pledge any of the photoplays deliverable hereunder to third persons (including corporations), as security for any advances made by such persons, on account of such photoplay or photoplays

Distributor Granted First lien.

for negative or production cost, positive prints, advertising or otherwise, and that if and when such advances are made by such third persons, the lien hereby granted to Distributor shall be deemed to be granted to the persons making the advances as fully as if such third persons were a party to this agreement.