Holliday, Lee Settle ‘Malcolm X’ Dispute : Courts: Filmmaker reportedly agrees to pay cameraman about $100,000 for use of King beating footage.

Videotape of the Rodney G. King beating will be included in the movie “Malcolm X” as a result of an eleventh-hour agreement between film director Spike Lee and George Holliday, who shot the famous footage, the two sides announced Thursday.

Terms of the settlement were not disclosed but sources knowledgeable about the movie said Lee has agreed to pay Holliday about $100,000--more than one-fourth of what Holliday demanded--for use of his tape of the March, 1991, incident.

The deal was reached late Wednesday after the U.S. 9th Circuit Court of Appeals for the second time declined to expedite a hearing on Holliday’s motion to enjoin Lee from using the tape.

Warner Bros., which is releasing the film starring Denzel Washington as the martyred black nationalist, had said a final print was needed by Thursday so the picture can be shown to exhibitors and open as scheduled Nov. 20.

Robert G. Friedman, the studio’s president for marketing and publicity, said he did not know how much Holliday will receive for rights to the tape. But he expressed relief over the settlement.

“We’re very happy that there is no more controversy about the release of the film and that everything is continuing to move forward,” he said.

In a copyright infringement suit filed in U.S. District Court last month, Holliday accused Lee of knowingly negotiating an invalid contract with a lawyer who was not authorized to grant rights to the tape. Lee said he believed he had a proper licensing agreement allowing him to show the tape for $50,000, half of which was paid.

In his suit, Holliday also said that including the tape in “a highly controversial montage sequence” would harm his reputation. Used in the film’s opening sequence, the beating is seen after an American flag explodes in flame, forming the letter X.

But on Thursday, Ronald W. Grigg, Holliday’s lawyer, said his client had agreed to drop his lawsuit as a result of “extensive talks” about the relationship of the videotape to the theme of the movie. Lee has said the tape is meant to show how the racism Malcolm X fought against persists today.

Grigg said proceeds from the licensing agreement will go to Social Reform Inc., a nonprofit organization Holliday set up after last spring’s riots. The lawyer, who also serves as president of the organization, said he will not charge Holliday for his legal services.

“It was never Holliday’s intention to act as a censor,” he said. “We’re glad to get this behind us.”

Lee, who will bear the extra cost himself, said in a statement: “I’m glad people will now be able to see the film as I originally intended.”

Still pending is another federal lawsuit in which Holliday contends that several broadcasting companies made unauthorized use of his videotape. Grigg said a trial date has been set for May 4.