Who

VIP motion - producers and distributors of motion picture films

specialized in action adventure films.

popular among teens (men).

been in business 7 years.

Produced multiple hits (and many minor) films

Just completed production of 5 films (one being Super fighter)

Other four (filler films)

Super fighter Projected to be the box office hit

PlexMedia Theatres- Large Theater chain (475 across US)

July 2006VIP and PMT entered into an exclusive contract.

Granted right to show films (rights, license, and permission)

Agreement

Plex can show movies (five films) Exclusive right (only their theatre will be showing VIP motions films)

VIP receives:

5,000,000 payable

2,500,000 Upon contract Signing (half up front)

the remaining half on Sept 1, 2006

and 500 for reach film showing in each theater.

Facts

v Contract begins on Sept., 1, 2006. (6-month period) ends March 1, 2006.

v They can't show Super fighter no more the 42 times (per location)

v The other 4 movies no fewer than 18 times.

v PlexMedia has no comp.

PlexMedia agrees to terms by accepting the contract

Paid the initial 2.5 mil

Then made the second half payment on Sept 1, 2006.

Approx. 4 moths they payed and additional $462,000 (Sep 1,2006 to Jan., 20, 2007)

End of the year Statement as of DEC., 31, 2006

Films: SF and the other 4

# of showings :

SuperFighter=8,550=$4,275,000

Other 4=2,375=$1,187,500

Total: 10,925= $5,462,500

More Facts

Plex demand money back (threatened lawsuit)

because Movie theatre in Toronto showing film (Feb 2007)

Did VIP Motion breach the contract? Specifically discuss whether the showing by a

competitor movie chain in Toronto constituted a violation of the VIP Motion and

PlexMedia agreement.