Independent Production Protocol

Terms of Trade Guidelines for Independent Producers of English-language television programs intended for broadcast by CBC or CBC Newsworld

September 2002

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TERMS OF TRADE

CONTENTS

1. Preamble

2. Definitions

3. Shared Aims and Obligations 3.01 CBC’s Aims 3.02 CFTPA’s Aims 3.03 Rights in Programs 3.04 The Importance of Independent Producers to the CBC 3.05 The Importance of the CBC to Independent Producers 3.06 In-House Production 3.07 In-House Production and Independent Production 3.08 Certification 3.09 Third-Party Obligations

4. Methods of Contracting - An Overview

5. Development 5.01 Submission of Proposals 5.01.01 The Process 5.01.02 Stage of Development 5.01.03 Proposal Contents 5.02 Development 5.02.01 Development Budget 5.02.02 Development Contract 5.02.03 Materials and Schedule 5.02.04 Rights 5.02.05 Creative Approval 5.02.06 Option Period 5.03 Green Light 5.04 Red Light 5.05 No Obligation 5.06 Development Prior to Submission

6. Acquisition of Independently Produced Programs 6.01 Definition 6.02 Licence Fee 6.03 Preparation of Contracts 6.04 Conditional Provisions

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7. Independent Productions 7.01 Definition 7.02 CTF Guidelines 7.02.01 Compliance 7.02.02 Non-Compliance 7.03 Commissioning 7.04 Broadcast Letter 7.05 The Licensed Independent Production Contract 7.06 Budget and Cash Flow 7.06.01 Production Budget 7.06.02 Budget Approval 7.06.03 Cash Flow 7.07 Financing 7.07.01 Financing Structure 7.07.02 Underages 7.07.03 Overages 7.08 Completion Guarantee 7.09 Conditions 7.10 CBC's Financial Participation 7.10.01 CBC's Contribution 7.10.02 CBC's Cash Payments 7.10.03 CBC Facilities 7.10.04 CBC Equity 7.10.05 Reporting Requirements 7.11 Approvals 7.11.01 Documentation 7.11.02 Creative 7.12 Production and Post-Production 7.12.01 Presence During Production 7.12.02 CBC Representative 7.12.03 Approvals During Production 7.13 Consultation and Dispute Resolution for Creative Issues 7.14 Final Delivery 7.15 Rights 7.15.01 General Provisions 7.15.02 Third Party Rights 7.15.03 French-Language Rights 7.15.04 Newsworld Rights 7.15.05 Distribution 7.16 Holdbacks 7.17 Publicity

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8. Other Methods of Contracting 8.01 Introduction 8.02 Pre-sale 8.02.01 Definition 8.02.02 Conditions 8.02.03 Licence Fee 8.03 Barter 8.03.01 Definition 8.03.02 Licence Fee 8.03.03 CBC Facilities and Services 8.03.04 CBC Billboard and Commercial Airtime 8.04 CBC Funded Commission 8.04.01 Definition 8.04.02 CBC's Contribution 8.04.03 Budget 8.04.04 Rights 8.04.05 Creative Approval

9. CBC In-House Production 9.01 Definition 9.02 CBC's Rights 9.03 Independent Opportunities

10. Regions 10.01 General 10.02 CTF and The Regions 10.03 CBC Regional Offices 10.04 Production with CBC Regions 10.05 The TransCanada Fund

11. Review and Dispute Resolutions 11.01 Standing Committee 11.02 Frequency of Meetings 11.03 Primary Function 11.04 Individual Disputes

12. Fair Dealing 1 ARTICLE 1 - PREAMBLE

About this Protocol... This Protocol sets out guidelines to be normally followed by the Canadian Broadcasting Corporation ( "CBC" ) and independent television producers ( "Producers" ) for the production and exploitation of English-language television programs intended for broadcast by CBC or CBC Newsworld.

This Protocol is intended to increase the transparency of the relationship between CBC and Producers. We note that in the CBC’s licence renewal (Public Notices CRTC 2000- 1, 2000-2, and 2000-3), the Commission stated:

“...the CBC and the Canadian Film and Television Production Association (CFTPA), have been working towards the formalization of a “Terms of Trade” agreement which will govern the relationship between the Corporation and independent producers. The public broadcaster should be a model for others in respect of its dealings with independent producers. Its plans should be transparent, in order to foster collaboration with the independent production industry. The Commission anticipates that this agreement will ensure a mutually satisfactory relationship between these two important sectors of Canadian cultural life.”

CBC and individual Producers will negotiate individual contracts with each other in good faith. This Protocol will serve as a starting point and reference guide for completing contracts. However, because individual contracts are open to negotiation, this Protocol is not intended to be legally binding on specific negotiations, and exceptions to the guidelines set out in this Protocol will occur. This Protocol has been negotiated on behalf of the Canadian English-language television production community by the Canadian Film and Television Production Association ("CFTPA" ), but it is intended to be applicable to all independent television producers, including those who are not members of the CFTPA.

Further Information... Detailed and reasonably up-to-date information is available at a special CBC website created specifically for the English-language independent television production community, at www.indiepro.cbc.ca (the "Website" ). The Website contains information including: submission policies, guidelines and additional information from each of ٠ the CBC areas responsible for ordering independent productions, namely: Arts & Entertainment ٠ Arts, Music, Science & Variety ٠ Children's and Youth ٠ Dramatic Series ٠ Movies and Mini-Series ٠

3 ARTICLE 2 - DEFINITIONS

Terms that are required for this Protocol are defined in the body of the text. Both parties acknowledge that different agencies may define terms differently.

ARTICLE 3 - SHARED AIMS AND OBLIGATIONS

3.01 CBC's Aims

CBC is accountable under the Broadcasting Act to the Parliament of Canada and ultimately to its viewers, the people of Canada. This accountability requires that CBC must act appropriately as stewards of public monies, and this will be reflected in all CBC business practices.

CBC is committed to programming that is distinctive in that it reflects Canada and its regions and contributes to Canadian cultural expression and shared national consciousness and identity. In particular, CBC is committed to, among other things: (a) fulfilling its public service mandate as Canada's national public broadcaster; (b) providing programming of interest to all Canadians; (c) providing a pan-Canadian reflection throughout CBC programming; (d) providing a distinctive reflection of the country's various regions; (e) providing Canada's premier news and information service; (f) providing a special emphasis on children's, youth, arts programming and documentaries; and (g) continuing to build its strength in Canadian drama, comedy, prestigious special projects, and the showcasing of Canadian talent.

3.02 CFTPA’s Aims

The CFTPA is committed, through its members to, among other things: (a) nurturing and stimulating the creation of film, television, internet productions and other interactive media; (b) ensuring the production of programming which is of interest to all Canadians and which distinctly reflects the country's various regions; (c) showcasing Canadian talent and providing children’s, youth and arts programming, documentaries, distinctively Canadian drama, comedy, and prestigious special projects; (d) creating an environment that promotes a diversity of expression and protects the rights of Canadian Producers here and abroad; (e) encouraging a stable and coherent economic environment for Producers here and abroad; and (f) enhancing international market opportunities and partnerships for Canadian- content producers.

4 3.03 Rights in Programs

CBC recognizes the importance to Producers of the rights in the programs they produce, and their desire to ensure that such rights are fairly remunerated and fully exploited.

Given the high volume of independent programming broadcast by CBC, CFTPA in turn recognizes CBC's need to acquire sufficient exclusive telecast rights in such programming so as to render CBC's schedule distinctive from that of other Canadian broadcasters.

These guidelines aim to ensure that the funding which CBC provides, in return for the rights it is granted, fairly reflects the value of such rights to CBC, and that both parties are adequately compensated for the risks they have taken.

3.04 The Importance of Independent Producers to the CBC

CBC recognizes the important contribution that Producers make to CBC and its viewers in fulfilling its commitments. CBC acknowledges that Producers make possible much of the programming which CBC must make available as part of its mandate, including, among other things: pan-Canadian and distinctive regional programming; children's, youth, and arts programming and documentaries. In this regard, the parties acknowledge that the majority of CBC's English-language programming (excluding news and investigative journalism) is currently obtained from Producers.

3.05 The Importance of the CBC to Independent Producers

Producers recognize the important contribution that CBC makes to Producers’ exploitation of their projects: a) in Canada’s small market, CBC is the primary exhibitor of distinctive programming; b) CBC licences trigger outside funding; and c) CBC licences trigger outside confidence in a project.

3.06 In-House Production

CFTPA acknowledges that CBC's mandate as Canada's national public broadcaster requires CBC to have ownership and control of selected programming. Accordingly, it is important for CBC to retain a significant capability for in-house CBC production, particularly in light of the emerging technologies, the resulting industry consolidations, the constantly shifting funding climate for Producers and the need, in the face of all this, for CBC to telecast distinctive Canadian programming at all times. As well, CFTPA acknowledges that programming requiring journalistic balance and objectivity such as news, certain types of documentaries, live sports and event programming, some variety, performance and arts programs and program genres ineligible for outside funding are therefore produced by CBC. 5 3.07 In-House Production and Independent Production

In respect generally of those programs which could appropriately be produced as CBC in- house productions or as independent productions licensed from Producers, having taken into account all relevant factors and principles, including those set out in Sections 3.06 and 9.02, and given current circumstances, it is CBC’s practice to proceed with such productions as independent productions.

3.08 Certification

Notwithstanding any other provisions of this Protocol, CBC and the Producer agree to fulfill their obligations to each other in a manner which will not jeopardize obtaining certification by CAVCO for the program or (where applicable) obtaining certification of the program as an international treaty co-production, if CBC and the Producer agree that such certification is required.

3.09 Third Party Obligations

CBC acknowledges that, in many cases, the licence fee it contributes offsets only a fraction of the production costs of the program. Therefore, CBC acknowledges that Producers must retain as much control of their projects as possible in order to fully exploit and be fully compensated for their work. Producers may have to work with third parties in order to create and fully exploit their programs, and the commitments that are made or are required to be made by Producers to third parties in respect of a program need to be taken into account when determining the agreement between CBC and the Producer. CBC acknowledges that it may need to lessen its rights requirements in a program where the financial contributions of third party broadcasters are larger than its own.

ARTICLE 4 - METHODS OF CONTRACTING - AN OVERVIEW

In fulfilling its mandate to Canadian viewers while being responsible to its Board of Directors and Canadian taxpayers, CBC endeavours to explore all avenues of program production and is open to a wide variety of entrepreneurial relationships. There are many opportunities for Producers to work with CBC. The driving force of the process is the idea and once CBC has accepted the creative concept, the parties work together to determine the best manner of development and production. Many factors are involved in the decision-making process regarding the method of contracting; while cost- effectiveness is one of those factors, it is not the only determining one. The rights granted and the funding arrangements will be major factors in determining the contractual relationship between the parties. The methods of contracting normally available are those for:

6 (a) the Development of a program, whereby CBC contributes to the development of a concept in exchange for a certain on-going interest in that project (see Article 5 for more information pertaining to "Development"); (b) the Acquisition of fully completed programs, for which CBC pays a licence fee (see Article 6 for more information pertaining to "Acquisitions"); (c) Independent Productions, whereby programs are produced by Producers in association with CBC, for which CBC pays an appropriate licence fee comprised of cash and/or facilities and services ( "CBC Facilities" ), and may also contribute cash and/or CBC Facilities as an equity investment in the program (see Article 7 for more information pertaining to "Independent Productions"); (d) other arrangements including, but not limited to, pre-sale agreements, barter agreements and CBC-funded commissions (see Article 8 for more information pertaining to "Other Methods of Contracting"); and (e) the development or production of wholly-owned CBC In-House programs, which may involve the contracting of a Producer as a Specific Services Producer to develop, produce and deliver a program for CBC (see Article 9 for more information pertaining to CBC In-House production).

ARTICLE 5 - DEVELOPMENT

5.01 Submission of Proposals

5.01.01.1 The Process

Producers will normally submit program proposals to the appropriate CBC representatives as set out on the Website (www.indiepro.cbc.ca ). In submitting a proposal, Producers should consult with the relevant creative representative with respect to CBC's timelines for the delivery of materials and CBC responses. In this regard, both CBC and Producers need to be aware of any relevant Agency funding deadlines.

5.01.01.2 Stage of Development

A program proposal can be submitted to the CBC either as a fully developed proposal or before it is fully developed. In the latter case, CBC will consider the proposal and advise the Producer in good faith of the likelihood of CBC’s interest in a fully developed proposal. A program proposal can be submitted by the CBC to a Producer. The Producer will consider the proposal and advise CBC in good faith of the likelihood of the Producer’s interest in working with CBC on its proposal.

5.01.03 Proposal Contents

In any event, a proposal submitted to CBC needs to include all the relevant creative information necessary for the CBC to decide whether to pursue it further. It is advisable that Producers contact the relevant CBC creative representative to determine the creative 7 materials required in a pitch. If, following review of the initial creative materials submitted, the relevant creative area expresses interest in the creative proposal and materials, the Producer will be asked to submit a business proposal. The business proposal will include all of the relevant business information necessary for the CBC to decide whether to participate in development, including a clear indication of the nature, value and cost of the proposed program. The business proposal will include copies of all underlying rights agreements, details of any relevant pre-existing contractual or financial commitments, development budget and production budget estimate, development financial structure, key production and creative personnel, and suggested locations. Unless and until otherwise negotiated by CBC and Producer, the Producer shall be entitled to all rights and ownership in the proposal and CBC shall treat the idea behind the proposal as confidential to and the property of the Producer.

5.02 Development

5.02.01 Development Budget

The Development Budget should include all allowable costs associated directly with the development, including industry standard Producers' fees and overheads (set out on the Website (www.indiepro.cbc.ca ). Where there are other parties participating in the development of the program, in addition to the Development Budget, the Producer will submit a Financing Plan. The Development Budget and Financing Plan will be subject to CBC's approval and, once approved, no changes will be made without CBC's prior written approval. Formulas for the level of CBC's financial participation in Development are available from Business Managers in the relevant division (Arts & Entertainment/News, Current Affairs and Newsworld).

5.02.02 Development Contract

Upon approval by CBC of the Development Budget, Financing Plan, and on approval of a "ballpark" Production Budget and with an understanding of CBC's anticipated financial contribution, CBC will prepare and issue a Development Contract covering the terms and conditions under which the program will be developed. A Development Contract will ordinarily be payable in stages, including: signature (and for Arts & Entertainment, receipt and approval of all Chain of Title documentation and, in some instances, financing agreements), upon delivery of materials (one or more stages depending on the nature of the program) and upon proof of monies paid in the development of the program equal to the amount of the Development Budget. The total amount of CBC's contribution will ordinarily be an advance (the "Development Advance" ) against any future licence fee which may be payable to the Producer or production company for the production of the program.

8 5.02.03 Materials and Schedule

The Development Contract will include a list of materials (the "Materials" ) to be developed by the Producer which may include, where appropriate, but are not limited to: an outline, treatment, production schedule, production budget, financing plan, and: (a) in the case of an Arts & Entertainment program: bible, draft scripts, series arc, preliminary casting; and (b) in the case of a News, Current Affairs or Newsworld program: confirmation of participants (non-contractual) and copies of videotape which may be shot as part of the approved development process. The Materials will be delivered to CBC's representative on a date(s) to be mutually agreed upon and set out in the Development Contract.

5.02.04 Rights

In consideration of CBC's contribution to the development of the program, CBC will normally receive the first and exclusive right to: (a) request changes to the delivered Materials; (b) participate in additional development of the program; (c) participate in the production of the program by providing cash or a combination of cash and CBC Facilities; and (d) acquire specified Canadian telecast rights in the program.

5.02.05 Creative Approval

CBC will have approval over the Materials submitted. With respect to all creative approvals, CBC and the individual Producer will work together in good faith to determine the creative direction the project will take.

In the event of a creative disagreement, both parties will endeavour to reach a mutually agreeable resolution. Failing such resolution, the CBC’s decision will be final, as per the provisions set out below in section 7.13, to the extent applicable to development.

In the case of News & Current Affairs programming, the program must meet with CBC’s Journalistic Standards and Practices.

Producers will also be expected to comply with other guidelines and statements which CBC may from time to time publish or distribute to Producers.

5.02.06 Option Period

CBC's rights in the program will ordinarily be for a period of twelve (12) months (the "Option Period" ), commencing, at the latest, upon delivery and acceptance by CBC of the Materials. CBC commits to advise the Producer in good faith as soon as possible, if it has made a decision not to proceed with the program. If CBC decides not to proceed 9 with the program, following discussion with Producer, CBC will issue a Letter of Termination and upon receipt by Producer of the Letter of Termination, the Option Period will be immediately ended.

CBC endeavours to make its decisions regarding production as soon as possible and consistent with Agency deadlines, following delivery and acceptance of the Materials. However, certain circumstances may require that CBC retain its rights for the full Option Period. For example, CBC's production commitment schedule is cyclical. Should development be entered into at a non-standard time, or should delivery of Materials be delayed for any reason, it may not be possible to proceed with a production decision or production in the timely manner originally contemplated.

Notwithstanding the above, a Producer who has delivered development Materials may contact CBC at any time during the Option Period to enquire as to the status of the Producer's project.

5.03 Green Light

If, after delivery and acceptance of the Materials, CBC elects to exercise its right under the Development Agreement to proceed with the production of the program, the parties will negotiate in good faith the terms and conditions of an agreement for the production of the program.

5.04 Red Light

If, after delivery and acceptance of the Materials and the expiration of the Option Period, or at an earlier, mutually agreed time, CBC does not elect to exercise its rights under the Development Agreement or the parties fail to come to agreement following good-faith negotiations, the Producer: (a) may offer those rights to a third party, subject only to CBC's right to match any third party offer; and, (b) may proceed with production of the program with a third party if CBC does not match, in which case the Producer will be required to repay CBC's Development Advance on or before the first day of production (or principal photography), or upon an assignment of the project by the Producer to a third party, and CBC will receive a development credit on the resulting program.

5.05 No Obligation

The CBC will be under no obligation to license or otherwise participate in any program in which it has participated in development. CBC's obligations in relation to the development project will be limited to those specifically set out in the Development Agreement.

10 5.06 Development Prior to Submission

Where development of the program is fully completed prior to submission of the program proposal, the development phase may be by-passed.

In the event that CBC proceeds with the Producer in producing the program, the approved development costs (including mutually approved development costs incurred prior to CBC’s involvement in the program) will be included in the Production Budget for the program.

ARTICLE 6 - ACQUISITION OF INDEPENDENTLY PRODUCED PROGRAMS

6.01 Definition

An "Acquisition" is an independently produced program which is fully completed prior to CBC's entering into negotiations to acquire specified rights, for which CBC pays a licence fee (the term "Acquisition" may also be referred to as a "Procurement"). CBC does not acquire any interest in the copyright to an Acquisition.

Acquisitions come to CBC in a number of ways: (a) submitted directly to CBC by the Producer, unsolicited; (b) submitted to CBC by a distributor on behalf of the Producer. Distributors make it part of their business to be aware of the programming strands of broadcasters and frequently contact senior executives, producers and commissioning editors for those strands when they have what they believe is appropriate programming for the strand; and (c) CBC contacts a distributor or a Producer directly following awareness of the program through catalogues, program buying/selling markets, festivals, other screenings or word of mouth.

Acquisitions should be submitted to appropriate CBC representatives as set out on the Website (www.indiepro.cbc.ca ).

6.02 Licence Fee

CBC will pay a negotiable cash licence fee for an Acquisition. The licence fee is payable no earlier than on delivery and acceptance of the program by CBC. In negotiating the licence fee, CBC will take into account the following factors: (a) Exclusivity of CBC's rights: (i) prior telecast history, e.g., Is it a world premiere? (ii) the length of CBC's exclusive period, if one (iii) U.S. broadcasters/holdbacks

11 (b) CBC's rights: (i) number of plays (ii) any other rights granted (c) Term of the Agreement (i) number of years (d) Length of Program: (i) thirty-minute (ii) sixty-minute (iii) ninety-minute (iv) feature-length (v) series (e) Intended telecast time: (i) prime time (ii) off-prime (f) Anticipated audience (g) Whether or not the program is closed-captioned or video-described.

6.03 Preparation of Contracts

Following negotiation with the business unit of the relevant creative area, contracts for Acquisitions will be prepared by CBC Business Affairs. These are standard, pre-printed contracts with an additional page which, as well as detailing the particulars of the producing company, program, delivery requirements and negotiated licence fee and rights, includes provision for non-standard language or additional terms and conditions, should this be necessary.

6.04 Conditional Provisions

Producers entering into Acquisition agreements with CBC should be aware of certain conditional provisions of the contract including commitments that: (a) the program must be delivered fully cleared in order to grant CBC the rights specified in the agreement; (b) for all Canadian independently produced programs, the program must have received a one hundred percent (100%) (and for applicable genres, one hundred fifty percent (150%)) Canadian Content Rating as defined by the Canadian Radio- Telecommunications Commission ( CRTC ) and/or the Canadian Audio-Visual Certification Office ( CAVCO) ; (c) in the case of News & Current Affairs programming, the program must meet with CBC's Journalistic Standards and Practices; and (d) in the case of all programming, the program must be covered by a valid policy of Errors and Omissions Insurance covering the period for which rights are granted to CBC.

12 ARTICLE 7 - INDEPENDENT PRODUCTIONS

7.01 Definition

"Licensed Independent Productions" are programs which are produced by Independent Producers in association with CBC. There are two basic types of Independent Productions: (a) Agency Productions: While recognizing the existence of many provincial government and privately financed and operated funding programs available to Producers, for the purposes of this Protocol, "Agency Productions" are those which are produced with the financial participation of the Canadian Television Fund ( "CTF" ), including the Licence Fee Program ( "LFP") administered by the CTF and/or the Equity Investment Program ( "EIP" ) administered by Telefilm Canada . (The CTF and Telefilm are collectively referred to as the "Agencies" ). (b) Non-Agency Productions: For the purposes of this Protocol, "Non-Agency Productions" are those which are produced without the financial participation of the Agencies.

7.02 CTF Guidelines

7.02.01 Compliance

When licensing Agency Productions, CBC conforms to the requirements of the CTF's Licence Fee Program and Equity Investment Program as published annually in their Guidelines. CBC acknowledges that Producers’ chances of obtaining CTF funding is dependent, in part, upon licence fees, and CBC will in good faith take this into consideration when negotiating fees with Producers.

7.02.02 Non-Compliance

Notwithstanding CBC's agreement to conform to CTF Guidelines when licensing Agency Productions, CBC reserves the right to withhold compliance in certain circumstances including, but not limited to, the following: (a) guidelines published subsequent to the adoption of this Protocol with which CBC at its sole discretion determines that it cannot comply; (b) if, following delivery and acceptance of a completed program, legal action arises, such as a court-ordered injunction, CBC will not be able to telecast the program; and (c) if, following delivery and acceptance of a completed program (especially in the case of a documentary), actualities relating to the nature and content of the program are significantly altered or new information is revealed so as to make the program inaccurate or out of date, CBC will not telecast the program.

13 When CBC, at its discretion, determines that it cannot comply with CTF Guidelines, it will immediately advise the Producer and the CTF in order to resolve concerns through good-faith discussions. Every reasonable effort will be made to ensure that the Producer is not adversely affected by CBC's decision not to telecast, except where CBC's inability to telecast results from an act of negligence on the part of the Producer.

7.03 Commissioning

Once a program proposal has been submitted, developed and accepted by CBC's responsible creative representatives as set out on the Website (www.indiepro.cbc.ca ), the Producer will be advised that CBC wishes to license the program and the parties will enter into good-faith negotiations to arrive at the terms and conditions of an independent production agreement.

7.04 Broadcast Letter

CBC will present its offer to the Producer in the form of a Broadcast Letter. A "Broadcast Letter" is a letter of commitment which will outline in a short-form CBC's understanding regarding the production and licensing of the program. The Broadcast Letter will include such points as: (a) creative and production elements which have been or are to be approved; (b) a breakdown of CBC's proposed financial contribution; (c) rights that CBC will expect to receive in consideration of its contribution; (d) restrictions that CBC will expect the Producer to comply with, especially with respect to exclusivity; (e) conditions fundamental to CBC's commitment; (f) a copy of the approved financing structure; (g) an expiry date by which time, if the Producer has not secured financing or met other fundamental conditions, and/or if the parties have not reached agreement on the terms and conditions of a long-form agreement, CBC's offer and understanding will become null and void; and (h) other points as may be necessary.

After the parties have successfully negotiated the terms of the Broadcast Letter, they will each sign the Broadcast Letter signifying acceptance of the mutually agreed upon terms and conditions.

The executed Broadcast Letter will be used by the Producer in making application to the Agencies and securing commitments from other financial participants, and by CBC in preparing its long-form agreement. It will also serve as the basis for the long-form agreement. The terms of the long-form agreement not already agreed upon in the Broadcast Letter will be negotiated by CBC and the Producer in good faith.

14 7.05 The Licensed Independent Production Contract

The "Licensed Independent Production Contract" (the " Contract ") is the long-form agreement containing the terms and conditions relating to the production and exploitation of the program. It is important to note that while certain provisions are standard and expected as part of every Contract, each deal is unique and subject to negotiation.

7.06 Budget and Cash Flow

7.06.01 Production Budget

The Producer will prepare a detailed budget for the production of the program (the "Production Budget" ) to be delivered in standard industry format. CBC will have the right to a line-by-line review of the Production Budget with the Producer or the Producer's delegate to ensure that the production has been appropriately budgeted to meet the needs of the final approved creative proposal and production schedule, and to provide for the necessary rights and clearances which may be required for the program. In its consideration of Production Budgets, CBC recognizes the budget guidelines of the CTF, particularly with regard to Producer fees, overhead and related party transactions.

For documentary programs produced for CBC News, Current Affairs and Newsworld, Producers should be aware that no budget amounts will be permitted for payment to subjects of documentaries (for example, "Life & Times") except as may be required by collective agreements for their appearances in stock footage which may form part of the program. This is in accordance with CBC's published Journalistic Standards and Practices.

The Producer will be responsible for all costs of the program unless otherwise agreed to in writing. All monies received by the Producer with respect to the production of the program will be deposited in a separate production bank account maintained solely for the production of the program. The Producer will agree to adhere to the Production Budget and all monies paid out of the production bank account will be in payment of bona fide expenses incurred pursuant to the Production Budget.

7.06.02 Budget Approval

Once approved by CBC, the total Production Budget will not be changed without the prior written consent of CBC. CBC's consent is also required for material changes to line items of the Production Budget. A copy of the locked Production Budget, or a summary thereof, will be attached as a schedule to the Contract.

7.06.03 Cash Flow

At the request of CBC, the Producer will provide a cash flow based on the Production Budget. 15 7.07 Financing

7.07.01 Financing Structure

The Financing Plan approved by CBC will be attached as a schedule to the Contract. No payment will be due from CBC under the Contract until CBC has received written evidence satisfactory to CBC that the Producer has secured the financing or made the necessary financial arrangements to permit production of the program at the approved Production Budget level (such evidence will include signed long-form financing agreements and evidence of interim financing where the cash flow schedule indicates the need for same). The Producer will be solely responsible for any shortfall in financing.

In the case of documentary programs produced for CBC News, Current Affairs and Newsworld, Producers should be aware that no financing amounts will be permitted from any source associated with the subject of a documentary. Furthermore, Producers should be aware that individuals or entities that are the principal subjects of documentaries are not to be given any approval rights, nor will they be allowed to screen the final program prior to its broadcast. Prior to seeking participation of subjects and soliciting financing, Producers are strongly advised to review in detail provisions relating to conflict of interest as set out in CBC's published Journalistic Standards and Practices and/or consult with CBC's representatives for CBC News, Current Affairs and Newsworld.

7.07.02 Underages

The Producer will be solely responsible for reporting underages. If, after delivery and acceptance of the final audited cost report an underage has occurred with respect to the Production Budget, in the case of Agency Productions, underages will be disbursed in compliance with the guidelines of the CTF and Telefilm Canada. In the case of Non- Agency Productions, underages will be dealt with on a case-by-case basis subject to the size and nature of CBC's contribution and the other financial participants. In certain circumstances, underages may be treated as revenue.

7.07.03 Overages

If, after delivery and acceptance of the final audited cost report, an overage has occurred with respect to the Production Budget, unless otherwise agreed to by CBC in advance and in writing, the Producer will be solely responsible for any overages incurred in the production of the program. It is understood, however , that the Producer will have the right to amend specific budget line items provided that the total Production Budget level is not changed and so long as material changes in line items have received CBC’s consent.

In the case of documentary programs produced for CBC News and Current Affairs and Newsworld, where CBC requests changes and/or additions to the program which were not included in the final approved production plan, upon delivery and acceptance of a 16 final audited cost report, where such costs have not been covered by Production Budget underages or contingency, CBC will contribute an additional amount equal to the portion of the overage directly attributable to the changes and/or additions to the program requested by CBC. The terms relating to CBC’s additional contribution will be negotiated in good faith in light of the requirements of any third party financiers and may result in the conveyance of additional rights to the CBC.

7.08 Completion Guarantee

The Producer will be expected to provide written evidence to CBC that CBC is a beneficiary of a Completion Guarantee from an established guarantor acceptable to CBC.

In consideration of lower-budget programs, in lieu of a third party completion guarantee, CBC may accept evidence of a completion arrangement whereby the Producer has placed an amount equal to ten percent (10%) of B + C of the Production Budget in escrow or in a separate bank account to be held in trust for the completion of the program. Subject to the production being on time and on budget, with CBC's approval, this amount may be withdrawn by the Producer as follows: one third upon completion of production or principal photography, one third upon completion of the rough cut and one third upon completion of the fine cut.

7.09 Conditions

In addition to those conditions already documented herein and in addition to whatever other conditions may be relevant to an individual project, the Producer will be expected to comply with the following conditions: (a) [see section 5.02.0 5 Development - Creative Approval] CBC will have approval over all the creative elements of a program; in this regard, CBC and the Producer will work together in good faith to determine the appropriate creative direction for the program. (b) the Producer will secure and evidence to CBC all right, title and interest necessary to produce the program and grant to CBC the rights granted to it under the Contract; (c) the Producer has or will obtain policies of insurance which will be subject to CBC's approval, underwritten by an established insurer specializing in film and television insurance for: (i) death, injury, illness and disability of the: executive producer(s), producer(s), director, principal performers and other key creative personnel (or for those as may be determined to be applicable by the Producer and/or CBC); (ii) loss or destruction of the master tape or original negatives of the program; (iii) comprehensive general public liability insurance; and (iv) errors and omissions insurance; and

17 (d) the music in the program will be produced and recorded in Canada under a valid collective agreement with the American Federation of Musicians of the United States and Canada ( "AFM" ) or a Letter of Adherence to a collective agreement with AFM. The Producer will not utilize music taken from recordings without the express prior written consent of CBC.

7.10 CBC's Financial Participation

7.10.01 CBC's Contribution

In the case of Agency Productions, CBC will pay an appropriate cash licence fee which will take into account industry standard producers’ fees and overheads set out on the Website (www.indiepro.cbc.ca) and, at a minimum, the requirements of the CTF’s Licence Fee Program and Equity Investment Program, as published annually in their Guidelines . Under certain limited circumstances, CBC may also contribute an equity investment. Occasionally, subject to applicable Agency guidelines on Agency projects, CBC's contribution may be provided in the form of CBC Facilities in whole or in part.

7.10.02 CBC's Cash Payments

No money or CBC Facilities will be paid or contributed until the Contract has been fully executed by both parties and the Producer has complied with all pre-payment conditions. CBC's total contribution will be payable in stages, recognizing cash flow needs and the exigencies of the production. Stages of payment may include, but will not be limited to: (a) signature; (b) delivery and approval of the final shooting script; (c) commencement of pre-production and, where relevant, approval of cast, director and other key production personnel; (d) commencement of principal photography; (e) delivery and approval of the program assembly if required, as with movies; (f) delivery and approval of the rough cut; (g) delivery and approval of the fine cut; (h) delivery and approval of promotional materials; (i) delivery and approval of payment documentation relating to talent; and (j) delivery and creative and technical approval of the completed, closed-captioned program.

In addition and as applicable, CBC will pay the Goods and Services Tax ( "GST") , Harmonized Sales Tax ( "HST" ), or Québec Sales Tax ( "QST" ).

7.10.03 CBC Facilities

If CBC Facilities (which may include stockshot materials) are provided as part of the negotiated arrangement with the Producer, they will be provided under the following terms and conditions: 18 (a) provision of CBC Facilities is subject to availability; (b) in order that CBC’s value can be apparent and the Producer can work such value into the Producer’s budget, CBC Facilities will be itemized, including an hourly rate, and provided to the Producer;

(c) use of CBC Facilities will be tracked by CBC and reported to the Producer who, unless otherwise agreed to in writing, will be responsible for any cost overruns or use of CBC Facilities not contemplated under the Contract; (d) the Producer will be required to pay any GST, HST, or QST which may be applicable to the CBC Facilities provided; (e) provision of CBC stockshot materials will be restricted to CBC-owned materials, and where such materials require further clearances (for example, writing, performer and/or music payments required under CBC's established collective agreements), the cost of such additional clearances will be the responsibility of the Producer. CBC reserves the right to restrict the provision of its stockshot materials for any reason. (f) if applicable by reason of using CBC personnel, the Producer will comply, to the extent necessary, with any relevant trade union agreements and applicable CBC rates governing the employment of such personnel.

7.10.04 CBC Equity

(a) With respect to Agency Productions, CBC will recoup its equity investment in the program from Production Revenue as defined by Telefilm Canada in respect of the program, according to a recoupment schedule no less favourable to CBC than the most beneficial schedule accorded to any other equity investor. Thereafter CBC will receive a percentage of Production Revenue from the sale and exploitation of the program and ancillary rights in accordance with the terms and conditions negotiated with the Producer but calculated in a manner no less favourable to CBC than the manner in which any other equity investor's profit participation is calculated; and (b) With respect to Non-Agency Productions, CBC's recoupment and profit participation will be negotiated on a project-by-project basis.

7.10.05 Reporting Requirements

(a) Relating to production of the program, if requested by CBC, or if there are overages in excess of ten percent (10%) in any Production Budget category, the Producer will provide CBC with cost statements on a bi-weekly basis during the course of production and thereafter until an audited final cost report is submitted to CBC which will occur not later than twelve (12) months after delivery to and acceptance of the program by CBC.

19 (b) Relating to distribution of the program, where CBC has equity, the Producer will be expected to provide, or ensure that the distributor provides, CBC with exploitation statements on a semi-annual basis for the first two years and annually thereafter, or on such other basis consistent with Telefilm Canada’s reporting requirements for Agency Productions .

7.11 Approvals

7.11.01 Documentation

CBC will have the right to review and approve any and all documents relating to the production and exploitation of the program insofar as these documents relate to warranties and representations made by the Producer to CBC and/or are essential to the rights granted to CBC. Such documents will include but not be limited to: evidence of financing; financing agreements, distribution agreements, Chain of Title documentation; Completion Guarantees; policies of insurance; documentation relating to AFM and other music/stock footage clearances; and agreements with talent. CBC reserves this right of review and approval to: ensure that rights have been obtained necessary to grant to CBC the rights negotiated under the Contract; and to ensure that no rights have been granted to third parties which may be in conflict with CBC's rights or requirements, or which may prevent CBC from exercising its rights under the Contract (especially in the area of telecast windows and holdbacks). CBC will negotiate in good faith with respect to rights or requirements that are in conflict with rights or requirements which have been granted to or imposed by third party broadcasters whose financial contribution is larger than the CBC’s, or which may prevent such third parties from exercising rights under the third party contract with the Producer.

7.11.02 Creative

CBC will have the right to approve creative and technical components of the program production including, but not limited to: (a) key creative elements: writer(s), script(s), cast, director(s), and composer(s); (b) materials produced for the program: credits, rushes, program assembly where applicable, rough cuts, fine cuts, and completed program; (c) key production personnel: executive producers, producers, and production manager; (d) production and delivery schedule; and (e) publicity and promotion for the program.

7.12 Production and Post-Production

7.12.01 Presence During Production

CBC's Executive Director, TV Arts & Entertainment (or, as applicable, CBC's Editor-in- Chief, CBC NEWS and Current Affairs, CBC Radio and Television and Executive 20 Director, CBC TV News, Current Affairs and Newsworld) or their delegates have the right to be present during production of the program. The Producer will agree to schedule screenings of rushes, assemblies of material, rough cuts and fine cuts of the program at times acceptable to CBC for the purpose of review and approval.

7.12.02 CBC Representative

CBC may appoint a representative(s) (the "Representative(s)" ) to act as liaison between CBC and the Producer. The Producer and the representative will consult with each other in good faith during all phases of the production. The Representative(s) will also have the right to be present during the production of the program and screenings.

7.12.03 Approvals During Production

(a) Unless otherwise agreed to, all CBC approvals and acceptances will be given by CBC's Executive Director, TV Arts & Entertainment (or, as applicable, CBC's Editor-in-Chief, CBC NEWS and Current Affairs, CBC Radio and Television and Executive Director, CBC TV News, Current Affairs and Newsworld) or his/her delegate. CBC will have ten (10) business days from receipt from the Producer of materials for approval or acceptance within which to give its approval or acceptance in respect of any production element. If CBC fails to so inform the Producer within ten (10) business days, approvals or acceptances will be deemed to have been given.

CBC recognizes that the exigencies of production often require that approvals are given in a shorter period of time and in such circumstances CBC agrees that it will not unreasonably cause delay. Equally, Producers recognize that CBC must have a reasonable amount of time for its approval process and will use best efforts to ensure that materials are delivered in a timely fashion pursuant with the approved production and delivery schedule.

(b) If CBC notifies the Producer of its objection to or rejection of any element, the Producer will use best efforts to remedy any faults or to effect any reasonable changes to the program or any part thereof as required by CBC. Such changes will be effected at the Producer's sole expense. The Producer will effect such remedies or changes within ten (10) business days of receipt of CBC's notification that it requires changes and thereupon the Producer will re-submit the program, or part thereof, to CBC for approval.

(c) If CBC does not approve the program, or any part thereof, by reason of the Producer's inability to make reasonable changes requested by CBC, CBC will not be required to make any payment for the program in whole or in part until such time as the Producer completes the required changes. Continued disagreement under this section will be subject to section 7.13.

21 7.13 Consultation and Dispute Resolution for Creative Issues

In the event of a disagreement between the CBC's Representative(s) and the Producer, both parties will consult with each other and use their best endeavours to mutually agree to a resolution. (At this stage, the CBC consultant will be a senior CBC employee). If the CBC and the Producer are unable to reach mutual agreement, the decision of the CBC in the matter in dispute will be final, taking into account in good faith the requirements of third party financiers, and the Producer will give effect to the CBC's requirements. The CBC recognizes that in circumstances where the Producer is dissatisfied with any final resolution of a matter in dispute the Producer may wish its credit to be removed.

If, after the consultation process with CBC the Producer is, in good faith, either unwilling or unable to accept CBC's requirements for changes to the program or any element thereof, CBC will have the right to prepare, at its own cost, a separate version of the program for CBC's use (" CBC Version ") and for such purpose, the Producer will provide to CBC all materials required by it to produce the CBC Version.

CBC will have the right to exploit such CBC Version only as set out in the Contract in respect of the program. The Producer will undertake, on a best efforts basis, to facilitate the assignment of all contracts related to the program and to negotiate all talent agreements and copyrights to the extent required by CBC, to complete the CBC Version of the program for telecast. While the CBC will not have copyright ownership of the CBC Version, it shall be entitled to retain physical possession of same and Producer will not have access to or use of the CBC Version.

7.14 Final Delivery

(a) The program will be delivered to CBC in conformity with CBC's technical specifications which will be attached as a schedule to the Contract. All programs will be delivered closed-captioned (except for programs delivered for "Witness," "Life & Times" and "Rough Cuts" in which case CBC will close-caption the program as part of its series packaging, and only for CBC's telecasts). (b) The delivered program must be acceptable to CBC in respect of content, treatment and technical quality, and CBC's decision in that regard will be final, provided that once CBC's approval has been given with respect to any particular element or aspect, such approval will not be withdrawn, unless the Producer alters, modifies, or edits same after said CBC approval has been granted. (c) CBC may edit the program at its own cost as it deems necessary to meet CBC's technical standards and to conform the program to CBC's scheduling and time requirements. CBC undertakes to consult with Producer where reasonably possible concerning such editing. CBC will not remove credits or copyright notices but in the case of hosted programs such as "Nature of Things" and "Life & Times", CBC may move the credits and copyright notice to the end of the episode embodying the program.

22 7.15 Rights

7.15.01 General Provisions

Consistent with the other provisions of this Protocol, the rights which CBC acquires will be negotiated on a project-by-project basis. CBC acknowledges that the Producer will retain all rights and interests in the Material and any related product other than the rights expressly acquired by the CBC pursuant to the Contract.

At the time of the writing of this Protocol, CBC does not normally acquire any right to receive a share of retransmission or other such similar royalties unless it is a copyright owner of, or equity investor in, a program.

At the time of the writing this Protocol, CBC does not normally acquire Internet transmission rights unless CBC is a copyright owner of a program. CBC’s practice may change as the television broadcast and Internet distribution systems evolve. Currently, to protect CBC’s broadcast rights, no use of a program in Canada by any means, including Internet transmission, is permitted during the term of CBC’s broadcast rights, except that the Producer may stream up to two (2) minutes of each episode or program via the Internet for publicity purposes. Furthermore, the CBC has the right to participate in the creation of the program-related website on terms to be negotiated in good faith and in any event, the right of consultation over such website

7.15.02 Third Party Rights

CBC acknowledges that Producers may have to work with third party equity participants in order to create and fully exploit their programs, and that the rights of such third parties must be taken into account when determining the rights which CBC will take in the programs.

7.15.03 French-Language Rights

(a) Unless a French-language broadcaster is part of the financing of the program, CBC will expect to be granted the exclusive right of first negotiation and last refusal for thirty (30) business days following contact by the producer with Société Radio-Canada ( "SRC" ) to acquire French-language telecast rights to the program. (b) For the documentary series “Life & Times”, CBC acquires the right to use the program on its French-language specialty service Réseau d’information (“RDI”) . These rights are acquired in order to ensure this series is accessible to all Canadians. RDI produces, at its expense, the French-language version of the program used for the RDI transmission (some costs are incurred by the “Life & Times” unit in Toronto for this version). In consideration of the rights granted to RDI for telecast, the Producer, in turn, has access to the French-language version of the program as may be required for distribution and exploitation. 23 7.15.04 Newsworld Rights

When CBC Newsworld was launched in 1989, it was understood at the time of licensing that Newsworld would have access to all main channel News and Current Affairs programming. Since that time all licence agreements for CBC News & Current Affairs programming have included the right to unlimited play on its Newsworld service for two (2) years.

7.15.05 Distribution

CBC conforms to the requirements of Telefilm with respect to distribution of Agency Productions with EIP participation. At the same time, it is acknowledged that CBC has a competitive distribution service in CBC International Sales ( "CBC Sales" ). Sales revenue is critical to CBC in the Canadianization of its schedule and therefore CBC actively pursues distribution opportunities. CBC's practice regarding distribution rights has been as follows: (a) if the program financing includes EIP investment, then the Contract will include language such as: (i) (if there is no distributor) "...the right of negotiation to acquire television distribution rights in the Program by CBC International Sales ("CBC-IS"), which right may be exercised by CBC-IS no earlier than two (2) weeks after Producer and CBC negotiated a licence fee commitment which date was <>"; or (ii) (if there is a distributor) "...the right of negotiation to acquire television distribution rights in the Program by CBC International Sales ("CBC-IS") if the Program ceases to be distributed by the Distributor;" (b) if the program financing does not include EIP investment but there is a Canadian distributor involved, then CBC will expect to have the right of first negotiation and last refusal to acquire those distribution rights not already granted to the Canadian distributor tied to the project (there may be territories and/or other ancillary rights available), and the rights held by the existing distributor if it ceases to distribute the program; and (c) if the program financing does not include EIP investment, no distributor has committed to providing an advance, and the Producer is not in a position to self- distribute, then CBC will expect to have the exclusive right of first negotiation and last refusal to acquire television distribution and merchandising rights, subject to negotiating in good faith to pay competitive, marketplace fees.

The terms and conditions of any distribution agreement between CBC Sales and the Producer are negotiated between the Producer and CBC Sales.

The right of last refusal, where applicable, must be exercised by the CBC within thirty (30) days of written notification by the Producer.

24 7.16 Holdbacks

CBC's standard holdback provisions are as follows: the Producer will not authorize or permit, nor will it enter into arrangements which would authorize or permit: (a) the program to be telecast by a third party anywhere in the U.S. or Canada prior to CBC's first telecast; (b) the program to be telecast by a third party anywhere outside of the U.S. or Canada prior to the earlier of (i) CBC's first telecast; or (ii) six (6) months from delivery to and acceptance by CBC of the program; (c) the program to be telecast on U.S. Network Television in the U.S. until seven (7) days following CBC's first telecast 1; and (d) subject to (c), any other telecast, exhibition or use of the program in Canada in any other way by any other means, including but not limited to any Internet transmission or U.S. Conventional Television, U.S. Pay Television or U.S. discretionary television service whose signal is distributed by means of a Canadian cable, satellite or MDS distribution system or is otherwise legally receivable in Canada, prior to the expiry of CBC's telecast rights period in the program, except that the Producer may use clips of the program not exceeding two (2) minutes in length for the purposes of the program website.

CBC may, in some instances, be prepared to consider less exclusivity; however, that would have an impact on the licence fee offered.

7.17 Publicity

CBC's current practice is to allocate its publicity and promotion resources to selected programs. This Section describes the protocol for programs targeted by CBC for promotion.

CBC and the Producer agree to consult regarding the publicity and promotion of the program to ensure that the presentation of such program in publicity materials is in keeping with the tone and style of the originally created program. To this end, the CBC promotion department will typically consult with the Producer prior to production and at an appropriate time before telecast. The Producer will adhere to the terms of the Publicity and Promotion guidelines which will be attached to the contract. All publicity and promotion released by the Producer will acknowledge CBC’s participation in the program and shall be approved by CBC. Unless an exception is approved by CBC, no such materials shall make reference to times or dates.

CBC and the Producers acknowledge that during certain time periods during the CBC schedule, known as "Reserved Time," all of the 34 stations in the CBC Full Network must broadcast the programming set by CBC. During all other time periods, known as

1. Producers should note that these holdback provisions restrict the concurrent licensing of programs to CBC and to PBS (which specifically is not considered by CBC to be “U.S. Network Television”) or to A&E (whose service is carried on Canadian cable systems). 25 "Available Time," 18 of the CBC stations known as the "Metronet Stations" must broadcast the programming set by CBC, but the other 16 stations known as the "Affiliate Stations" have the option to license and carry different programming. As a result, a program which is scheduled in "Available Time" will have a lower potential audience. Producers should be aware that normally CBC is unable to actively promote programs which are scheduled in Available Time because of concern from those Affiliate Stations which do not intend to broadcast the program that their audience will be led to expect a program which in fact will not be broadcast to that audience.

ARTICLE 8 - OTHER METHODS OF CONTRACTING

8.01 Introduction

From time to time CBC and the Producer may wish to enter into contractual arrangements other than Acquisition or Independent Productions. While contractual options always evolve with the changing production and broadcast environment, three other potential methods of contracting are set out below.

8.02 Pre-Sale

8.02.01 Definition

A "Pre-sale" agreement is essentially an Acquisition contracted prior to commencement of production of the program. Most often a Pre-sale is a Non-Agency Production which is financed through an accumulation of licence fees. Electing to contract rights in a program by pre-sale may come about because the Producer or production company may have an established working relationship with one or more foreign broadcasters; for example, a Producer who owns the rights to the concept for a television documentary with a universal theme such as global climate change may have solicited commitments from broadcasters in the United Kingdom, France, and the United States of America. The combined licence fees from these broadcasters, plus a licence fee from a Canadian broadcaster, together with whatever provincial and/or federal tax credits may be applicable, will finance production of the program.

8.02.02 Conditions

For CBC to participate in a Pre-sale, certain conditions must be met: (a) preferably the program will contain Canadian content. In the case of the above example, CBC will expect the program to address how Canada has contributed to and/or may be directly affected by global climate change. If it is necessary to accommodate all foreign broadcasters, CBC will expect to receive a separate version of the program for CBC's use. In the case of an Arts & Entertainment program, CBC will expect the program to feature themes relevant or of interest to Canadians, Canadian cast members and/or Canadian locations; and, 26 (b) CBC must have creative involvement including but not limited to: approval of script and key production and creative personnel, cast, locations, rough cuts, fine cuts and delivery of the final program.

8.02.03 Licence Fee

CBC will pay a negotiable licence fee for a Pre-sale taking into account those factors set out under Article 6.02 of Acquisition of Independently Produced Programs, while also taking into account CBC's creative involvement in the production of the program. In the case of a Pre-sale, CBC's licence fee will be payable in stages including, but not limited to, signature, rough cut, fine cut, delivery and/or telecast.

8.03 Barter

8.03.01 Definition

A "Barter" agreement is one in which CBC Facilities and/or billboard and/or commercial air time are exchanged for telecast and other rights in a program.

8.03.02 Licence Fee

Under a Barter agreement, the value of CBC's contribution will be commensurate with an appropriate licence fee for the program, again taking into account those factors set out under Article 6.02 of Acquisition of Independently Produced Programs. Any portion of CBC's contribution which will be greater than the established licence fee for the program may entitle CBC to increased rights, to be negotiated by the parties in good faith.

8.03.03 CBC Facilities and Services

CBC Facilities (which may include stockshot materials) will be provided under the terms and conditions set out in Article 7.10.03.

8.03.04 CBC Billboard and Commercial Airtime

CBC billboard and/or commercial airtime will be provided under terms and conditions including the following: (a) use of the CBC billboard and/or commercial airtime will be subject to CBC's Advertising Standards and Commercial and Journalistic Policies and Practices; (b) where such CBC billboard and/or commercial airtime is provided to a Producer for re-sale to a third party, such re-sale and its terms is subject to approval by CBC; (c) depending on the conditions of the Barter agreement, the commercial airtime provided may not necessarily be scheduled in the program for which the Barter agreement is made, but may be in the run-of-schedule, at CBC's discretion; 27 (d) any and all costs associated with the creation of billboards and/or materials for the commercial airtime will be the sole responsibility of the Producer and such material will be delivered ready for use by CBC; and (e) CBC does not guarantee audience targets for such CBC billboard and/or commercial airtime, and CBC will not be responsible for any loss due to transmission failure.

8.04 CBC Funded Commission

8.04.01 Definition

A "CBC Funded Commission" is a program produced by a Producer which is funded substantially by CBC and in which CBC holds extensive telecast, equity and other rights, save and except copyright which is retained by the Producer. When a Producer submits a proposal to CBC, CBC may decide that the program, because of its potentially "evergreen" appeal to Canadians, is one in which CBC wishes to participate more extensively in exchange for a broader range of rights and/or equity held over a lengthy period of time.

8.04.02 CBC's Contribution

Regarding CBC's contribution toward a CBC Funded Commission: (a) CBC is prepared to contribute the majority of the production budget, which must be approved by CBC. The Producer will be expected to contribute a portion of the production budget; (b) CBC's contribution may consist of cash, or cash and CBC Facilities (subject to availability). CBC's cash contribution will be payable in stages to be established in consultation with the Producer based on the production cash flow needs; (c) CBC's contribution will be apportioned between a licence fee commensurate with the rights to be held by CBC, distribution advance, equity and other rights if acquired by CBC such as Internet and other non-broadcast rights; and (d) CBC Sales will distribute the program and CBC and the Producer will share in profit participation at a rate to be negotiated, following recoupment of the distribution advance and equity investment.

8.04.03 Budget

The budget for the program will be prepared as a standard independently produced production budget (including Producer fees).

8.04.04 Rights

Because CBC bears a high percentage of the costs, it also takes the greatest risk associated with the production. In return, CBC will acquire the majority of rights in the program. 28 8.04.05 Creative Approval

CBC will have final creative approval over the CBC Funded Commission.

ARTICLE 9 - CBC IN-HOUSE PRODUCTION

9.01 Definition

A "CBC In-House Production" is a program or series which is wholly owned and controlled by CBC and for which CBC has universal exclusive rights in perpetuity (subject to applicable laws), including copyright.

9.02 CBC's Right

CBC reserves the right to produce its own in-house programming. The Producers acknowledge that, as Canada's national public broadcaster, it is imperative that CBC continue to produce programming which is consistent with its mandate and programming priorities but which is not viable or may not be attractive for the independent sector to produce, or programming in which it is important that CBC retain all rights. While this is particularly true for News and Current Affairs programming, it may apply to CBC Arts & Entertainment programming as well. There is no one factor which determines which program will be produced in-house. As there are many factors influencing the method of contracting for independently produced programs, so too there are many factors influencing the decisions as to whether a program should be produced in-house or independently, foremost of which is the creative idea. The Producers recognize that: (a) much of the current affairs and journalism programming produced by CBC is done so with considerable legal risk. CBC controls, assumes and manages the risk for such programming. Over the years CBC has developed a globally respected reputation for its journalism and current affairs programming and this is an area which will largely continue to be produced in-house; (b) many of the programs produced by CBC in response to its mandate and in reflecting the cultural and regional diversity of Canada, are considered experimental, or "niche" programming and may not be commercially viable for the independent production sector; (c) CBC has contractual commitments with its in-house unions to continue to produce significant amounts of in-house programming. While these unions have facilitated CBC's changing circumstances in recent years of funding cutbacks, commitments still exist which must be honoured; and (d) CBC in-house programming is an important source of revenue to help sustain CBC as it faces increasing costs and decreasing revenues within the framework of an expanding and technologically exploding universe.

29 9.03 Independent Opportunities

CBC in-house programming provides the independent community with opportunities. Producers and other members of the independent community are engaged to produce, direct, write and perform in CBC in-house productions and productions that CBC will own. CBC frequently engages "freelance" technicians (camera/sound) as well as independent editing/post-production facilities when CBC Facilities are not available.

ARTICLE 10 – REGIONS

10.01 General

CBC is committed to producing and presenting programs that reflect Canada to Canadians. Programming on CBC encompasses the culture and ideals, the controversies and issues, the celebrations and sobering events that impact the daily lives of a multi- cultural people, whether urban or rural, aboriginal or of immigrant heritage, who are Canadian. Overall, CBC maintains a sense of balance in reflection of the country in its programming; however, the level of CBC programming rooted in particular regions varies from year to year, as program proposals submitted to CBC are approved on the basis of creative merit and readiness for production rather than quotas.

10.02 CTF and The Regions

Producers are requested to review the CTF rules with care, particularly with regard to underlying rights ownership and control, as CTF's conditions for characterization of a program as regional for purposes of bonusing or EIP application location are quite specific and focus on more than regional reflection.

10.03 CBC Regional Offices

CBC has established corporate offices across the country (called "CBC Regions" ). CBC Regions may have regional/local airtime for which they may produce or acquire programming and they may also participate in the development, production or acquisition of programs intended for network audiences. When Producers have program proposals intended for regional audiences, they are encouraged to submit such proposals directly to a CBC Regional Director. (A list of the CBC Regions and information regarding regional contacts may be found on the Website (www.indiepro.cbc.ca ). Proposals for programs intended for network audiences should be submitted to the Network Arts & Entertainment and News and Current Affairs contacts for Independent Productions as set out on the Website (www.indiepro.cbc.ca ).

30 10.04 Production With CBC Regions

CBC’s programming priorities in the regions are articulated at the Website (www.indiepro.cbc.ca ). After these priorities are met, Regional Directors, at their discretion, may use whatever available regional capacity exists to acquire independently produced programming or to enter into co-production or barter arrangements with Producers for the production of programs for their regional/local timeslots. A Regional Director may also be able to negotiate a multi-regional or network telecast of a program in which it has participated and which had originally been intended for a local audience. Producers should be aware of the following: (a) while CBC may pay a negotiable cash licence fee, licence fees for regional telecasts are lower than network licence fees given the limited reach of such programs; and (b) "Available Regional Capacity" consists of those regional/local facilities and services which are not committed to network or regional/local production at a given time. Where such available capacity exists, there will be little or no flexibility in its scheduling, and the resources will be subject to the priority of CBC programming requirements (for example, an event such as the Red River flood in Manitoba would have demanded that all available capacity in the Manitoba Region be assigned to the national coverage of this event with little or no notice).

10.05 The TransCanada Fund

In addition to the above provisions which represent CBC’s ongoing standard practice with respect to the regions, the Producers should be aware of a special initiative of the CBC. In the year 2000 CBC created The TransCanada Fund (“ the Fund ”). The Fund is directed towards development in Canada’s regions over a five-year period. Guidelines for the Fund are as follows: (a) one hundred percent (100%) of the Fund will be directed toward development in Canada’s regions; (b) the Fund may be applied to proposal development, piloting, script development, budget and financing development, training and apprenticeship, competitions and prizes; (c) the Fund may be applied to television, new media, convergence, cross-media and cross-cultural projects. All genres of programming are eligible. Drama projects longer than a commercial half-hour must be supported by both the Region and the relevant network department. Short form drama must have broadcast interest from "ZeD" or "Canadian Reflections"; (d) development proposals should focus on programs that are suitable for national broadcast and reflect the regions from which they originate; (e) the Fund is designed to increase development activity primarily with the independent production community; (f) submissions must include a description of the project, development budget outline, financing plan, pertinent information regarding the creative team, and a 31 description of why and where the project belongs on CBC Television and current status of discussion, if any, with the relevant network department; and (g) sixty percent (60%) of the Fund is available for allocation by the Regional Directors of CBC Television and forty percent (40%) by programmers in the network departments of Arts & Entertainment and News & Current Affairs.

Proposals for the Fund should be sent to the contacts as set out on the Website (www.indiepro.cbc.ca).

ARTICLE 11 - REVIEW AND DISPUTE RESOLUTIONS

11.01 Standing Committee

CBC and CFTPA recognize the value of an ad hoc standing committee to review this Protocol to ensure transparency and accountability in dealings between CBC and the independent production sector. Accordingly, it is agreed that a small group of six (6) will be nominated composed of equal representation from CBC on the one hand and from CFTPA on the other. Such representatives will be the nominees of the respective parties and therefore subject to change from time to time at the discretion of the nominating party. The names of the representatives to the committee will be available on the Website (www.indiepro.cbc.ca ).

11.02 Frequency of Meetings

The ad hoc standing committee will initially meet within six (6) months following the adoption of this Protocol, and thereafter will meet as frequently as the committee deems appropriate, but in no event less frequently than annually.

11.03 Primary Function

The primary function of the ad hoc standing committee will be to review the working of this Protocol in the light of day-to-day practices, and to recommend changes to this Protocol in light of those practices. While the comments and recommended changes of the ad hoc standing committee will be given due consideration, the CBC and Producers cannot guarantee that they will be binding given the priority of mandate and business issues.

11.04 Individual Disputes

Disputes between CBC and individual Producers are not intended to be addressed directly by the ad hoc standing committee. Either party should contact their respective committee representatives if they are of the view that practices need to be altered in order to give effect to the spirit and intent of this Protocol.

32 ARTICLE 12 - FAIR DEALING

The parties undertake to take due account of the guidelines set out in this Protocol, and to deal amicably, efficiently and fairly with each other.