How Arnold Schwarzenegger Defines Cash Break Even

Cash Breakeven shall be defined as the point at which there shall have been recouped from Adjusted Gross Receipts an amount equaling all actual distribution expenses attributable to the Picture (provided there shall be no double deductions for any item, including without limitation residuals), all costs of production of the Picture (including without limitation any pre-break participations, mutually-approved deferments and completion bond fee), actual interest and actual financing costs related to the Picture, a producer fee in the aggregate amount of $5,000,000 for Andy Vajna and Mario Kassar and an overhead charge to Intermedia Film Equities Limited equal to ten percent (10%) of the bonded budget (with no interest on overhead or overhead on interest). For purposes of calculating Cash Breakeven only, Adjusted Gross Receipts shall include a 100% home video royalty (i.e. home video revenues less costs, provided no such costs shall be deducted if such costs were previously deducted hereunder) to the extent that Producer is accounted by distributors at a 100% home video royalty or if Producer is not accounted for at a 100% home video royalty, with respect to any Adjusted Gross Receipts, such Adjusted Gross Receipts shall include and be calculated with a home video royalty equal to the home video royalty Producer receives with respect to such Adjusted Gross Receipts, but in no event less than a 35% home video royalty. For all other purposes (other than calculating Cash Breakeven), including the calculation of [Schwarzenegger] Participation and the Deferred Participation, Adjusted Gross Receipts shall include a 35% home video royalty, or if the agreement for the services of the director of the Picture so provides, then such greater home video royalty shall be included in the Adjusted Gross Receipts of the Picture for purposes of calculating [Schwarzenegger]Participation and the Deferred Participation.
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