OPTION AGREEMENT
Exhibit
10.6
| DATED: | As of August 1, 2004 | ||
| PRODUCER: | Platinum Studios, LLC | ||
| Attention: Xxxxx Xxxxxxxx Xxxxxxxxx | |||
| 0000 Xxxxxxxx Xxxx., Xxxxx 000 | |||
| Xxxxxxx Xxxxx, XX 00000 | |||
| OWNER: | Top Cow Productions, Inc. | ||
| Attention: Xxxx Xxxxxxxxx or Xxxx Xxxxxxx | |||
| 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000 | |||
| Xxx Xxxxxxx, XX 00000 |
This
document
confirms the terms and conditions of the agreement (the
"Agreement") between Platinum Studios, LLC ("Producer")
and Top Cow Productions, Inc. ("Owner") with respect to
Producer's option to acquire certain rights in and to all "Subject
Properties" (as defined below):
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1.
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DEFINITIONS: For
the purposes of this Agreement:
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(a) (i) A
"Property" means a particular comic book, graphic
novel, or comic-book series or miniseries (including any character,
story, concept, or artwork or other element thereof and
all
copyrights, trademarks, and similar intellectual property rights therein or
thereto and the right to exploit same) including,
without limitation, all past, present, and future versions
thereof (all to the extent owned or controlled by Owner in
each
instance).
(ii) Not
to limit the generality of the foregoing, any
"Property" shall include, to the extent owned or controlled by
Owner,
all original parts and elements of that Property. Without
limiting the foregoing, a Property includes, to the extent
owned or controlled by Owner, the comic-book name, copyright,
trademark, and logo of that Property; the name, likeness,
and image of each and every character, human or otherwise,
original to and appearing in that roperty; the name, likeness
and image of any original noncharacter asset or entity appearing
in that Property; the script, plot, and storyline of that
Property; and all art (other than in advertising) appearing in
that
Property.
(iii) A
particular Property shall include any derivative
publication having essentially the same title and characters
as the Property in question that is similar in tone, setting,
and characters. For example, without limitation, a miniseries
or second series based on Owner's "The Darkness" property
set in the same universe and time and with the same art approach would be part
of that Property, but a "Medieval Darkness"
or "Li’l Darkness" mini-series or spin-off would be a different
Property.
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(iv) Notwithstanding
the foregoing or anything else
to
the contrary contained herein, a particular Property shall
not
be deemed to include any crossover issues, elements, or material, or any guest
appearances by a character or element that is not a regular recurring part
of
that Property. Publications published or distributed by Owner that shall not
be
Properties, and characters or other elements from any publication of Owner
that
are
not owned or controlled by Owner are sometimes referred to herein as "Excluded
Material."
(b) An
"AV Production" means a motion-picture, television, direct-to-video, or
other audio-visual production.
(c) "Subject
Properties" means all Properties owned or controlled
by Owner, subject to paragraphs (a) and (c)(i) hereof
and the other terms hereof.
(i) Notwithstanding
anything to the contrary contained
herein, the following Properties shall not be Subject Properties:
(A) Any
Property that is the subject of an agreement
with a third party (a "Committed Property") for development,
production, or otherwise as an AV Production (as hereinafter
defined) to the extent of such agreement, including, without
limitation: (1) the agreement with respect to animation and
other
rights in Owner's "Witchblade" Property between Owner and (2)
the agreement between Owner and Warner Bros. Television Production,
a division of Time-Warner Entertainment Co., L.P., concerning
Owner's "Witchblade" Property.
For
avoidance of doubt, any rights to a Committed Property that are not subject
to
such a third-party agreement (including,
without limitation, any holdback or future- negotiation
provisions) concerning that Committed Property shall, but to such extent only,
be a Subject Property; or
(B) Any
Property for which Owner is prohibited
from granting the rights otherwise to be granted hereunder,
or for which Owner does not own or control such rights (provided, however,
that
if Owner jointly owns or controls a Property
[beyond Owner having any approval, consent, or consultation
right or a financial participation, which such rights
or
participation alone shall not be deemed Ownership or
control by Owner], then Owner shall not grant any Production rights
to
a third party to the extent of Owner's Ownership or control
without Producer's prior written consent); or
(C) Without
limiting paragraph 1(c)(i)(B) above,
any Property for which another person or entity owns or controls
any or all of the AV Production rights (including, without
limitation, Wanted, Freshmen, "Zero," and the proposed Xxxx
Xxxxxx project); provided, however, that if (and to the extent)
Owner acquires AV Production rights in such an excluded Property,
then such Property shall be deemed a Subject Property hereunder.
(ii) Without
limiting any of the foregoing, "Subject
Properties" shall not include any rights that are currently
granted or licensed to Spacedog, Inc. or GDH or to be licensed
to Vidiator Technology (US) Inc. or any other wireless rights
licensee.
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(iii) Notwithstanding
anything to the contrary contained
herein, if pursuant to any agreement with a creator or licensor
of a Property, Owner is required to relinquish, to assign,
or to terminate any AV Production rights, then, to the extent
Producer shall have not entered into a bona fide agreement with a third party
for such rights, such rights shall no longer be subject hereto as a Subject
Property (but only to that extent).
(d) A
"Production" means an AV Production based on a Subject
Property. The first commercial-length motion-picture, television,
or direct-to-video Production intended for release to general
public is sometimes referred to herein as the "First Production"
for the Subject Property in question. Without limitation,
animatics, games, flash-animation clips, trailers, ads,
shorts, student films, webisodes, hand-held-device productions,
and "interstitials," do not qualify to be a First Production.
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2.
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OPTION:
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(a) In
consideration of the payment to Owner of 250,000(the
"Advance"), the receipt of which Owner acknowledges, which shall
be
applicable against and recoupable from any and all other payments to Owner
hereunder, Owner hereby grants to Producer during
the Option Period (as defined below) the exclusive and irrevocable
option for each and every Subject Property to purchase
all of the Rights (as defined below) in and to such Subject
Property on and subject to the terms and conditions herein
contained (individually an "Option" and collectively "Options").
(b) (i) The
Option for any Subject Property shall be effective
only during the Option Period (as hereinafter defined) for that Subject
Property. Each "Option Period" shall consist of the Initial Option Period (as
defined below) plus, if applicable, the First Extended Period (as defined
below), and, if also applicable, the Second Extended Period (as defined
below).
(ii) The
"Initial Option Period" for each Subject Property
shall commence as of the date hereof (or, in the case of a
Property that becomes a Subject Property after the date hereof, upon
the
date such Property becomes a Subject Property) and shall continue
until December 31,2007.
(iii) If,
prior to the expiration of the Initial Option
Period, Owner has received payments pursuant to this Agreement
in the amount of $350,000 or more (inclusive of the Advance),
then the Initial Option Period shall be extended for an additional
period of thirty (30) consecutive months (the "First Extended
Period") to June 30, 2010. Notwithstanding the foregoing,
if Owner has not received payments of $350,000 or more by
the
expiration of the Initial Option Period, Producer may extend
the Option Period through the First Extended Period by payment to Owner before
the expiration of the Initial Option Period
of
the difference of the amounts received by Owner hereunder
and $350,000. Owner acknowledges the receipt from Producer
of $425,000 as of the date of Owner's execution
hereof.
(iv) If
prior to the expiration of the First Extended
Period, Owner has received payments of $700,000or more (inclusive
of the Advance) hereunder, then the First ExtendedPeriod
shall extend for an additional twelve (12) consecutive month
period (the "Second Extended Period"). Notwithstanding the foregoing,
if Owner has not received payment of $700,000 or more hereunder by the
expiration of the First Extended Period, Producer
may extend the option Period through the Second Extended Period by payment
to
Owner before the expiration of the First Extended
Period of the difference between the amounts received by Owner
hereunder and $700,000.
(v) In
addition, if Producer shall have entered into
a
development agreement approved by Owner for a Production for
a
particular Subject Property, then Producer shall have the right
to
extend the option Period as follows for only that Subject
Property (but not for any other Subject Property) by written
notice thereof to Owner. Accordingly, the Option Period for such Subject
Property shall, pursuant to the immediately preceding
sentence, continue until the earlier of (A) such time as
Producer exercises the Option with respect to such Subject Property,
if ever, and (B) the date twelve (12) months after the described
in the first sentence of this paragraph (at least as it relates
to such roperty) and [2] the termination of such development agreement (at
least
as it relates to such Property); provided
such twelve (12) month period shall toll during all periods
that such Subject Property is the subject of an option agreement
with a third party approved by Owner.
(c) If
Owner shall receive during the Option Period, directly
or indirectly, any bona fide professional inquiry whatsoever (whether
in writing or otherwise) regarding the availability
and/or exploitation of any AV Production rights to any part of a Subject
Property, including, but not limited to, the
inclusion or adaptation of the Subject Property, or of any part thereof, in
or
for any form of AV Production, then Owner shall
immediately notify Producer in writing of such inquiry, providing
full details thereof, including, without limitation(to the extent Owner knows
same) the name, company, postal and email addresses and telephone and facsimile
numbers of any person making such inquiry, together with a full account of
such
inquiry.
If Owner fails to refer such an inquiry to Producer and then enters into an
agreement with the inquirer within twelve (12)
months from the expiration of Producer's rights related to the applicable
Subject Property, Producer shall be irrevocably attached to the project, with
fees and credit for Producer to be negotiated in good faith.
3. OPTION
EXERCISE: Prior to the expiration of the Option Period
for a particular Subject Property, and not later than upon commencement of
principal photography of a First Production for such Subject Property, Producer
shall exercise the option with respect
to such Subject Property by (a) written notice to Owner of such commencement
of
principal photography of such First Production
and (b) as a condition precedent to the effectiveness of such exercise, payment
to Owner of the amount designated as "Owner's
Share" in paragraph 4(a)(i) hereof (which such condition shall be deemed
satisfied if Producer shall have received in full the purchase price for the
First Production of such Subject Property
pursuant to an agreement approved by Owner).
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4. CONTINGENT
COMPENSATION:
(a) Producer
shall account for and pay to Owner the amounts of
Adjusted Gross Revenues (as hereinafter defined), if any, designated
as "Owner's Share" for each and every Production:
(i) For
the first One Million Six Hundred Thousand
Dollars ($1,600,000) of Adjusted Gross Revenue for a
Production,
Owner's Share shall equal fifty percent (50%) thereof and
Producer's Share shall equal fifty percent (50%) thereof,
(ii) For
the next Two Million Dollars ($2,000,000) of
Adjusted Gross Revenue for that Production, Owner's Share shall
equal forty percent (40%) thereof and Producer's Share shall
equal sixty percent (60%) thereof, and
(iii) For
any other Adjusted Gross Revenue for that Production,
Owner's Share shall equal fifty percent (50%) thereof and
Producer's Share shall equal fifty percent (50%)thereof.
(b) The
payments described in paragraph 4(a) hereof shall apply
to
each Production based on a Subject Property.
(c) Owner
shall be solely responsible for all payments to any
third
party creators, writers, or any other underlying rights holders
claiming by or through Owner, if any.
(d) "Adjusted
Gross Revenues" for a particular Production means 100%
of Gross Revenues (as defined below) less only (to be
deducted
on an off-the-top basis) any reasonable and out-of- pocket
third-party agent, attorney, and manager costs (which such agent,
attorney, and manager costs in the aggregate shall not exceed
fifteen percent [15%] of Gross Revenues for that Production
without Owner's consent [it being agreed that Owner shall
consent to a larger amount for aggregate agent, attorney, and
manager costs on any particular Production subject to Producer's
guarantee that all aggregate agent, attorney, and manager
costs for all Productions hereunder shall not exceed fifteen
percent (15%) of all Gross Revenues]), and creative- artwork
costs directly related to only such Production.
(e) "Gross
Revenue" for a particular Production or Subject Property means any and all
compensation actually received by or credited to Producer, Owner, Xxxxx Xxxxxxxx
Xxxxxxxxx ("Xxxxxxxxx"),
Xxxx Xxxxxxxxx ("Xxxxxxxxx"), or Xxxx Xxxxxxx ("Xxxxxxx")
or any Owner, subsidiary, affiliate, or agent of any of the foregoing related
to
or arising out of that Production or any other development hereunder of the
Subject Property on which such Production is based or any other exploitation
of
the Rights hereunder (all
of which shall be aggregated and paid to Producer who
shall
then account for and pay to Owner hereunder in accordance
with the terms hereof). Gross Revenues shall not include
any amounts Owner, Xxxxxxxxx, or Xxxxxxx receives for any artwork,
writing, or directing services, but shall include any settlements,
awards, damages, or other nonsales amounts [except to
the
extent directly related to any derived for any services other
than producing or consulting provided by Owner, Xxxxxxxxx, or
Xxxxxxx]).
(f) Producer
does not represent or warrant that there will be any Adjusted Gross Revenues
from any Productions. Nothing herein shall be construed as vesting in Owner
any
right, title, or interest whatsoever in any Production or the gross receipts
thereof, or any lien or charge thereon or assignment thereof.
(g) Owner's
Shares of Adjusted Gross Revenues are and shall at all times be
Owner's separate property held in trust by Producer
free and clear of any claims or encumbrances by any person
or
entity until paid to Owner.
5. STATEMENTS
AND PAYMENTS:
(a) Producer
shall maintain true, accurate, and complete books
of
account and records relating to any exploitation of Subject
Properties hereunder and any other exercise of Producer's rights
hereunder and/or any other receipt of Gross Revenues.
(b) Within
thirty (30) days of receiving any Gross Revenues (but not less frequently than
by the date thirty [30] days after the end of each fiscal calendar quarter),
Producer shall furnish to Owner full and accurate statements in sufficient
detail to show
all
relevant information relating to Gross Revenues and Adjusted
Gross Revenues. Such statements shall be submitted to the address shown page
1
hereof. Simultaneously with the submission
of each quarterly statement, Producer shall pay any amounts
due to Owner. All statements shall become final and binding
if Owner does not object thereto in writing within thirty-six
(36) months of receiving the applicable statement.
6. THIRD-PARTY
AGREEMENTS. Producer shall not enter into any
agreement with a third party with respect to any Rights or any
Subject Property without Owner's approval thereof (which approval
shall not be withheld or delayed unreasonably, and which shall
take into account then-current industry standards for the type of exploitation
contemplated by the proposed agreement). Notwithstanding
anything to the contrary contained herein, Owner's
right to approve third-party agreements shall extend to only
to
the parties involved and the material terms thereof.
Producer
may request that Owner preapprove certain parties or terms (either
individually or as a list), and Owner shall approve or disapprove the submitted
parties and/or terms within a reasonable
period of time. Owner shall also have the right to approve
the specific provisions of any third-party agreement or related
document to the extent necessary to avoid a conflict with any other agreement
or
document to which Owner is a party or with any applicable law, treaty, or
regulation, and to ensure compliance
with Owner's other approval rights hereunder and the other
terms hereof.
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7.
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CREDIT:
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(a) For
each Production, Producer shall accord Owner the following
credits (except to the extent Owner agrees otherwise in writing):
(i) Customary
source material credit substantially
as follows: "Based on the Top Cow Productions, Inc.[comic
book, comic books, or graphic novel, as appropriate]" on screen,
on a card to be shared with only any other source material
(and, if shared, then in first position), in the main titles;
(ii) An
"in association with" production credit for
Owner
on screen, in the main titles, shared, if at all, only with
Producer's production credit and the production credit, if any,
of
any other person or entity approved by Owner;
(iii) An
Executive Producer credit for Xxxxxxxxx and
a
Co-Producer or Co-Executive Producer credit for Xxxxxxx, each on screen, on
a
card to be shared only with other executive producer credits or Co-Producer
or
Co-Executive Producer credits, as applicable, in the main titles.
(b) Except
as specifically set forth in the Agreement, all characteristics
of Owner's credits shall be in Producer's sole good
faith discretion, provided that the size of type and on-screen
duration for the credits for Xxxxxxxxx and Xxxxxxx shall be
no
less than the size of type of any credit for Xxxxxxxxx or any
other
producer; and the size of type and on-screen duration of
Owner's source-material credit shall be not less than the size of type and
of
not less of a duration than any writing or other source-material
credits.
(c) Owner's
credits under this paragraph 7shall appear in all
paid
ads, inserts, and packaging wherever the billing block appears
or wherever any writer, Producer, Xxxxxxxxx, or any other producer
receives credit. Producer shall contractually require all
distributors or other licensees to comply with the credit provisions
set forth herein. Neither the inadvertent failure by Producer,
nor the failure by any third party, to accord credit in accordance
with the provisions of the Agreement shall be deemed a breach
of
the Agreement; provided, however, that upon Producer's receipt
of written notice from Owner setting forth in reasonable detail
any failure to so accord credit, Producer shall cause such failure
to be cured on a prospective basis. If Owner (through Producer
or otherwise) shall receive more favorable credit provisions
from any third party for a particular Production, then the
terms
hereof shall be amended to include such more-favorable terms
in
Owner's favor for such Production.
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8.
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GRANT
OF RIGHTS:
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(a) Subject
to Owner's "Reserved Rights"(as defined below),
upon Producer's exercise of the option for a Subject Property
as herein provided, if ever, Owner hereby grants to Producer,
exclusively in perpetuity and throughout the universe, all
right, title and interest in only that Subject Property, which
includes but is not limited to the following:
(i) all
copyrights and trademarks (and extensions and
renewals thereof) and the goodwill associated therewith in such Subject
Property;
(ii) all
motion-picture rights in such Subject Property;
(iii) all
television rights (pay, free, film, tape, cable,
live and otherwise) in such Subject Property;
(iv) merchandising
rights in such Subject Property;
provided, however, that "Property-Based Merchandising" [as
defined below] is excluded;
(v) theme-park
ride-naming and live-public- performance
rights in such Subject Property;
(i) all
customary reasonable ancillary, allied and
incidental rights in such Subject Property. Such rights shall include, by
way of
further illustration, sequel rights, but in each event subject to Producer
receiving the following applicable payment from the applicable studio,
production company, or other entity: (A) At least one hundred percent (100%)
of
the producer fees and rights payments and other payments -- fixed and/or
contingent-- payable for the immediately preceding theatrical Production
for any
derivative theatrical Production, with such proportionate increases as any
other
producer receives
and
calculated, where applicable, based on the budget of the derivative Production;
or (B) Such fees and rights payments and other payments -- fixed and/or
contingent -- approved by Owner for any other exploitation of Rights in any
and
all media and by any and all means now known or hereafter devised (other
than
exploitations of Owner's Reserved Rights).
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(vii) music
and
music-publishing rights, soundtrack-album and other soundtrack exploitation
rights, promotional and advertising rights in such Subject Property;
and
(viii) the
right
to distribute, to transmit, to
exhibit,
to broadcast and otherwise to exploit all works produced pursuant to the
rights
granted hereunder by means of any and all media and devices whether now known
or
hereafter devised, and in any and all markets whatsoever, as well as the
right
of Producer in its discretion to make any and all changes in, additions to,
and
deletions from the Subject Property to the extent required for any agreement
with a third party hereunder.
(b) All
of
the foregoing shall be sometimes collectively referred to herein as the
"Rights." The Rights granted by Owner to Producer hereunder are in addition
to
-- and this Agreement shall in no way limit -- any right with respect to
a
Subject Property or the subject matter thereof that Producer may now or
hereafter enjoy as a member of the general public.
(c) Owner
reserves the following rights (the "Reserved Rights") in and to each Subject
Property, subject to the terms and conditions set forth below.
(i) Publishing
Rights: Any and all publishing rights
in
and to such Subject Property (including, without limitation, the following
rights), except, if Producer shall have exercised the Option for a particular
Subject Property, Producer shall then have the right to publish excerpts
from
and summaries of such Subject Property, or any motion picture or other versions
thereof based upon that Subject Property, for advertising and/or publicizing
purposes only (not for sale or resale) of any work produced pursuant to the
Rights and the right to publish souvenir booklets (for release only at those
theaters exhibiting a Production based on that Subject Property and produced
pursuant to the Rights granted hereunder) and "making-of-the-movie" and
"coffee-table" type books relating to the Production, provided that no such
publication shall contain excerpts or summaries taken from such Subject Property
in excess of 7,500 words in the aggregate or ten percent (10%) of the text
of
the Subject Property in the aggregate, or ten percent (10%) of the illustrations
from the Subject Property in the aggregate (whichever
is less), but not to exceed fifteen (15) full comic- book pages or the
equivalent for the Subject Property for any particular Production (and subject
to Owner's right to approve any such publication). The foregoing limitation
is
not intended to and shall not preclude Producer's publication of advertising
and/or publicity materials in installments, subject to the foregoing
limitations. With respect to any "making-of-the-movie" type books, such book(s)
shall be titled differently than the Subject Property (but such title may
contain the title of the Subject Property such as "The Making of the Film"),
and
Owner's name will not appear on the cover, the title page of the spine thereof
other than as part of the billing block or credit list, if any, for the
underlying picture, but Owner shall be accorded such copyright and trademark
notices as Owner designates, as well as an "appears courtesy of Top Cow
Productions, Inc." credit in any such book or periodical:
(A) Print
Editions: The right to print, publish, sell, and otherwise distribute print
editions of any Subject Property in comic-book, graphic-novel, or other book
form, whether hardcover or softcover, and in magazines or other periodicals,
whether in installments or otherwise, including, without limitation, in
comic-book or comic-strip form, and on posters or trading cards or any other
print format.
(B) Recorded
Readings: The right to publish, sell, and otherwise distribute recorded readings
of any Subject Property in the form of audiocassettes, CDs, DVDs, or other
audiodiscs or similar audio devices.
(C)
Digital or other Electronically Read or Transmitted Editions: The right to
publish the text and/or illustrations of any Subject Property (or text and/or
illustrations based thereon [including, without limitation, novelizations
or
wallpapers]) in the form of, without limitation, CD-ROM, DVD, videocassette
tape, or similar electronically or optically read devices, and by means of
any
electronic, digital, or other transmission on-demand or over the Internet
or any
other network or system or on or by cell phones or other handheld devices.
Such
editions may contain moving (but not fully animated) or nonmoving illustrations
or effects and music and/or narration; but shall not be deemed AV
Productions(animated or otherwise) (it being agreed that Owner's use of moving
illustrations in any edition hereunder or of any flash or other web-site
animation for promotional or advertising purposes shall not -- taking into
account
duration,
quality, and extensiveness of the moving illustrations or animation -- conflict
with Producer's rights hereunder).
(ii) Property-Based
Merchandising: Property-Based Merchandising rights are reserved to Owner
throughout the universe and in perpetuity. "Property-Based Merchandising"
shall
mean any merchandising items, regardless of whether licensed or otherwise
exploited by Owner (or Owner's successor[s], licensee[s] and/or assignee[s]),
which are derived from and/or based upon a Subject Property; provided, however,
that it is understood and agreed that Property-Based Merchandising rights
do not
include the right to use any "Picture Elements" (defined as any element that
is
unique to a Production), but do extend to any other reserved right. Owner
shall
consider in good faith any third-party reasonable proposal to allow such
party
to share in increases in Owner's merchandising revenues for a particular
Subject
Property if such proposal is part of an overall acquisition of AV Production
rights to that Subject Property and if a game based on such Subject Property
shall have not been released during the relevant time period for calculating
such third party's share in increases in Owner's merchandising revenues for
that
Subject Property.
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(iii) Reserved
Copyrights and Trademarks: To the extent of the other Reserved Rights hereunder,
Owner reserves all copyrights in each Subject Property. Also to the extent
of
the other Reserved Rights hereunder, Owner reserves any trademark rights
in each
Subject Property in Owner's own name which shall be limited solely to trademark
classes corresponding to the Reserved Rights.
(iv) Game
Rights: Owner reserves all game rights
(handheld,
interactive, internet, wireless, video, and otherwise) in and to each Subject
Property. The Rights for a particular Subject Property may, nonetheless,
if
necessary to close an agreement for an AV Production for a particular Subject
Property, include the right to produce and to exploit interactive games based
on
that AV Production (but not of the underlying Subject Property itself) subject
to any pre-existing agreement for the game rights to that Subject Property
(including, without limitation, Owner's current and/or planned agreements
with
Eido s Interactive, Union Entertainment, or any individual game company (or
any
successor thereto), and any successor or replacement agreements). In such
instance, Owner shall be willing to be subject to reasonable and customary
holdback periods governing Owner's exploitation of game rights to the Subject
Property in question.
(d) Owner
shall have no right to utilize any elements from any work produced hereunder
pursuant to the Rights or any new or changed material created by or for Producer
in the exercise of the Reserved Rights or otherwise (but nothing contained
herein shall in any way limit any rights Owner may now or hereafter enjoy
as a
member of the general public); provided that if Producer does not exercise
the
option for a particular Subject Property, Producer's use (if any) of such
new or
changed material shall be subject to Owner's rights therein and thereto).
Notwithstanding the foregoing, but subject to any bona fide third-party
agreements, any ideas, suggestions, or elements suggested, required, or added
by
Producer shall become Owner's property, which Owner shall be free to use
without
any obligation to Producer.
(e) In
connection with the exercise by Owner of any of the Reserved Rights hereunder,
Owner shall have the right (notwithstanding anything to the contrary contained
herein) to advertise and to publicize same in any and all media, now known
or
hereafter devised (including, without limitation, radio and television)
throughout the universe.
9. REACQUISITION:
(a) If
Producer exercises the Option for a Subject Property but
does
not commence principal photography of the First Production
based thereon within three (3) years after the date of
such
exercise (which three-year period may be extended by Producer for an additional
two [2] years by the payment to Owner of $100,000 at any time prior to the
expiration of the initial three-year period), such rights, as well as any
material developed by or for Producer in connection with the Property (and
any
and all rights in and to such material) shall automatically revert to and
be
assigned and transferred to Owner, subject to any third-party agreements
or
rights to such material (to the extent specifically and expressly approved by
Owner)and also subject, if applicable, to a lien in Producer's favor (which
lien
shall be extinguished not later than the date Owner enters into a Production
option, purchase, or license agreement with a third party with respect to
the
reverted Subject Property) for the following amounts:
(i) An
amount
equal to all amounts paid to Owner therefor hereunder; and
(ii) The
actual direct out-of-pocket cost paid to
third
parties of creating such material developed by or for Producer plus simple
interest on only those costs at the "prime rate" of Bank of America or at
Producer's standard interest rate,
whichever
is lower.
(b) In
the event of such a reacquisition by Owner, Producer shall
remain attached to the reverted Subject Property in accordance with and subject
to the terms hereof (including, without limitation, the applicable time periods
specified in paragraph 2 hereof). The provisions of this paragraph 9(b) are
not
assignable by Producer.
10.
ANNOTATION:
If a Subject Property is based in whole or in part on a true story, Owner
shall
annotate or cooperate with Producer in annotating the Subject Property following
Producer's customary and reasonable annotation guidelines and deliver the
annotation to Producer on a date to be reasonably designated by
Producer.
11. SECURITY
INTEREST: Producer hereby grants to Owner a first- position security interest
(subject only to prior existing liens as of the date hereof) in and to all
rights licensed or granted hereunder to secure Owner's rights hereunder,
including the right to receive income. Producer shall execute any documents
Owner reasonably requires, including Mortgages of Copyright and XXX- 0 Xxxxxxxxx
Xxxxxxxxxx, to perfect Owner's security interest.
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12. VIDEO
CASSETTE/DVD: Owner shall be entitled to
receive one
(1)
videocassette and one (1) DVD copy of each Production or other program produced
hereunder at such time, if ever, as they become commercially
available.
13. PREMIERES:
Xxxxxxxxx and Xxxxxxx and one guest apiece shall be invited to the first
United
States premiere of any Production.
14.
TERMINATION:
(a) Owner
shall have the right to terminate the Option
Period
and any rights granted hereunder that are not the subject of an agreement
with a
third party immediately upon notice to Producer, if Xxxxx Xxxxxxxxx is no
longer
running the day-to-day affairs of Producer or otherwise is no longer affiliated
with Producer.
(b) The
Option Period and any rights granted hereunder that are
not
the subject of an agreement with a third party shall automatically and
immediately terminate in the event (i) Producer is bankrupt, insolvent, or
in
receivership, reorganizes, or consents to the appointment of a receiver,
liquidator, trustee, or assignee in bankruptcy, or any action or proceeding
under any bankruptcy or insolvency law is taken by, for, or against
Producer
(other than a claim filed by Producer as a creditor), or (ii) Producer makes
or
attempts to make an assignment for the benefit of creditors or a composition
with creditors.
15.
STANDARD TERMS AND CONDITIONS: The balance of the terms
of
this
Agreement consists of Producer's Standard Terms and Conditions ("Standard
Terms
and Conditions"), attached hereto and incorporated herein by
reference.
If
the
foregoing accurately reflects the agreement between the parties, please so
indicate by signing below.
AGREED
AND ACCEPTED: PLATINUM STUDIOS, LLC
|
By:
/s/ Xxxxx Xxxxxxxx Xxxxxxxxx
|
Xxxxx
Xxxxxxxx Xxxxxxxxx
Its:
TOP
COW
PRODUCTIONS, INC.
|
By:
/s/ Xxxx Xxxxxxxx
|
Xxxx
Xxxxxxx
Its:
President
8
STANDARD
TERMS AND CONDITIONS
Following
are the Standard Terms and Conditions of the Agreement between Producer and
Owner in connection with the Subject Property. All defined terms set forth
in
these Standard Terms and Conditions shall be deemed to be defined as set
forth
in the Agreement. In the event of any conflict between the Standard Terms
and
Conditions and the main Agreement, the provisions of the main Agreement shall
control.
A. RENTAL
AND LENDING RIGHTS: To the extent required under any agreement with a
third-party distributor, financier, studio, or production company, Owner
hereby
waives the benefit of any provision of law known as "droit moral" or moral
rights of authors or any similar or analogous law or decision in any country
of
the world. Owner, on Owner's own behalf and on behalf of Owner's
successors-in-interest, heirs, executors,
administrators
and assigns hereby assign to Producer in perpetuity all rental and lending
rights under national laws
(whether
implemented pursuant to the EC Rental and Lending Rights Directive or otherwise)
to which Owner may now be or hereafter may become entitled therefrom. Owner
agrees, on Owner's own behalf and on behalf of Owner's successors-in-interest,
heirs, executors, administrators and assigns, not to institute, support,
maintain or permit directly or indirectly any litigation or proceedings
instituted or maintained on the ground that Producer's (or its designee's)
exercise of the rights granted to Producer in the First Production in any
way
constitutes an infringement or violation of any such rental or lending right
as
aforesaid. Owner hereby acknowledges that the consideration to which Owner
is
entitled pursuant to this Agreement includes consideration for the assignment
of
rental and lending rights provided for in this paragraph and that the said
consideration is an equitable and adequate part of the revenues derived or
to be
derived by Producer from the said rights.
B. AUTOMATIC
EXTENSION OF OPTION PERIOD: The Option Period for a particular Subject Property
shall be extended automatically with respect to that Subject Property as
follows
and as
applicable:
(1)
Force
Majeure: The Option Period shall be extended by a period of time equal to
the
period of time of any event of force maj xxxx which shall interrupt, delay
or
otherwise
materially
interfere with the development, pre-production or production of the First
Production (including, without
limitation,
any strikes, walkouts, lockouts or other labor unrest
in
the
entertainment industry) not to exceed six months, but only the Option Period
for
Productions directly affected by any such event.
(2)
Unresolved Claims: Without limiting any other rights Producer may have
hereunder, Owner agrees that if there is any claim, arbitration or litigation
(collectively "Claim") alleging
a
material breach of Owner's representations and warranties with respect to
the
First Production of the Subject Property in question, and by reason of which
Producer elects in its sole good-faith judgment to suspend development,
pre-production
and
production activities in connection with that First Production, the Option
Period for that Subject Property shall be extended for any period during
which
such Claim is outstanding (such suspension and extension shall not exceed
six
[6] months unless an action is commenced). At any time during the pendency
of
any such Claim, Producer may, in addition to all its other legal and equitable
remedies, rescind this Agreement and, in such event and if Owner is actually
in
material breach hereof, Owner shall pay Producer any and all monies received
from Producer in connection with the Subject Property. Each party's
representations, warranties and resultant obligation to indemnify the other
in
the event of any breach hereof shall survive rescission of this
Agreement.
9
Producer
shall give Owner written confirmation of any such extension promptly after
the
commencement thereof.
C. NO
OBLIGATION TO USE: Producer shall have no
obligation
actually
to exercise any of the rights granted to Producer hereunder, or to produce,
or
exploit a First Production, or to continue production, or exploitation, if
commenced.
D. BOOKS
AND
RECORDS; AUDIT RIGHTS:
Not
more
than once per year, Owner shall have the right, on not less than ten ( 10)
business days' prior notice to examine and to audit all books of account
and
records in Producer's possession or under its control relating to this agreement
(including any software or digital records). Such audits shall be conducted
by
an independent accounting firm at Producer's premises or where Producer keeps
such books and records (provided such location shall be within the State
of
California). Owner shall not audit the same records more than once; provided,
however, that an audit for one year may include an audit for any previous
year
for which no audit was conducted. Such audits shall be at Owner's cost and
expense, except that if an audit establishes
a deficiency of more than five percent (5%), all actual
and reasonable costs and expenses of and incurred by Owner in connection
with
such audit shall be paid by Producer, along with the amount of the deficiency
plus interest thereon.
Owner's
exercise, in whole or in part, of its right to inspect or to audit records
and
accounts (or of any other right herein granted), the receipt or acceptance
by
Owner of any statement, payment, and/or report or the deposit by Owner of
any
payment from Producer shall be without prejudice to any other rights or remedies
of Owner and, without limiting the foregoing, shall not stop or prevent Owner
from thereafter disputing the completeness, accuracy, and/or correctness
of any
such statement, report, or payment at any time and, in the event that any
inconsistencies or mistakes are discovered in any statements or payments,
Producer shall immediately rectify same and make the appropriate payments
in
accordance with this Agreement's terms.
Time
is of
the essence with respect to all payments to be made
hereunder to Owner. If Producer fails to make payment when due of any monies
owed hereunder, then, without limiting any of Owner's rights or remedies,
Owner
shall be entitled to interest on such overdue amount at a rate equal to seven
percent (7%) per annum, or such lower rate as may be the maximum rate permitted
under applicable law, during the period between the date the payment first
becomes due and the date such amount is actually paid.
E.
WARRANTIES: Owner represents and warrants as follows
(1) Owner
has
not and will not enter into any commitment which will conflict materially
in any
way with any of Owner's contractual obligations under any of the provisions
hereunder.
(2) Owner
has
not done or omitted to do and will not do or omit to do any act or thing
by
license, grant or otherwise, which will (or probably will) impair or encumber
materially any of the rights herein granted, or interfere with the full
enjoyment of said rights.
(3)
Except for any Excluded Material, Owner is the sole Owner of all rights herein
granted and has full power and authority to grant said rights to Producer
and
Owner has not granted, encumbered, or otherwise disposed of in any manner
to
any
person.
(4) Except
for any Excluded Material, Owner has not exploited any Subject Property (or
any
version or adaptation thereof), as an AV Production anywhere throughout the
world.
(5) Each
Subject Property is or shall be original with Owner (or Owner's licensors
or
predecessors in interest) or in the public domain. To the best of Owner's
knowledge, the Subject Properties do not and shall not violate the copyright
or
any other right of any third party; and are not presently the subject of
any
litigation or of any claim that is likely to give rise to
litigation.
F. INDEMNIFICATION/E&O:
Owner agrees to indemnify Producer against and to hold Producer harmless
from
any damages, liability, losses, costs, expenses, obligations or claims
(including
reasonable outside attorneys' fees) (collectively "Claims") arising out of
a
breach of Owner's obligations, representations and warranties hereunder that
are
reduced to an adverse judgment or settlement with Owner's consent (not to
be
withheld or delayed unreasonably).
10
Producer
agrees to defend and to indemnify Owner and to hold Owner harmless from any
Claims arising with respect to (i) material added to the Subject Property
by
Producer or at
Producer's
request and/or based on any information which is known to Producer which
conflicts with Owner's annotation; and (ii) the development, production,
exhibition, promotion, advertising, publicity, or exploitation of any Production
(except to the extent arising out of the breach of Owner's obligations,
representations, or warranties hereunder).
Owner
shall be an additional insured on any errors & omissions/media perils
insurance policy for each Production.
G. REMEDIES:
Owner's sole and exclusive remedy for any breach, termination or cancellation
by
Producer hereof or any term hereof (including any term pertaining to credit)
shall be an action for damages and Owner irrevocably waives any right to
rescission or equitable or injunctive relief.
H. ASSIGNMENT:
Each party hereto shall have the right to
assign
this Agreement and all or any part of its rights hereunder, provided that
no
such assignments shall relieve such party of its obligations
hereunder.
I. NOTICES:
Notices hereunder shall be in writing and shall be given
by
certified or express mail, courier, or personal delivery to
the
appropriate party, and the date of such personal delivery, or the date three
(3)
days after the date of such mailing or courier dispatch shall be the date
of the
giving of such notice.
All
approvals hereunder may be given by email. A copy of all notices to Owner
shall
be sent concurrently to Law Offices of Xxxxxx X. Xxxxxx XX, P.C., 0000X Xxxxx
Xxxxxx Xxxxxxxxx, #000,
Xxxx Xxxxxxxxx, XX
00000-0000. Owner shall be copied on any document,
instrument, draft, and/or correspondence Producer sends or receives concerning
any Subject Property or Production.
J. ADDITIONAL
DOCUMENTS: Each party shall execute any customary
documents and do any other acts consistent with the terms set forth herein
as
may be reasonably required by the other (or its or their assignees or licensees)
to further evidence
or to effectuate their rights as set forth in this Agreement. Upon either
party's failure promptly to do so after reasonable notice and opportunity
to
review any such document, such party hereby appoints the other party hereto
as
such party's attorney-in-fact for such purposes (it being acknowledged that
such
appointment is irrevocable and coupled with interest) with full power of
substitution and delegation. Each party shall promptly furnish the other
party
with a copy of any such document executed by such party hereunder. Upon exercise
of the option with respect to any Subject Property and subject to all of
the
other terms hereof, Producer shall complete the form Short-Form Assignment
attached hereto with respect to that Subject Property and Owner shall promptly
execute it.
K. CONFIDENTIALITY:
Neither party will disclose any material provision
of this Agreement to any third party unless reasonably necessary to do so.
Additionally, Owner shall not issue publicity for any Production without
Producer's prior consent, except that Owner may issue publicity which relates
primarily to a Subject Property in which any Production and/or Producer and/or
any personnel in connection therewith are mentioned incidentally, provided
that
such reference is not derogatory of any Production. Neither party shall disclose
to any third party (except on a confidential basis to their business
representatives) any proprietary information relating to any Production or
to
the other party (or their parent companies, subsidiaries and
affiliates)(including, without limitation, the budget of any Production,
the contents of any contingent compensation statement or the terms of any
agreements pertaining to any Production), without prior written consent of
the
other.
L. BREACH:
Neither party shall be deemed in breach hereunder unless the party has received
written notice setting for the alleged breach and then fails to cure the
alleged
breach within thirty (30) days of the date thereof(five [5] business days
for
any
payment or accounting obligation).
MISCELLANEOUS:
The Agreement, with the Standard Terms and Conditions, contains the full
and
complete understanding between the parties and supersede all prior agreements
and understandings pertaining hereto and cannot be modified except by a writing
signed by each party. This agreement is governed by the laws of the United
States and of the State of California, and both parties consent to the
jurisdiction of the state and federal courts residing in the County of Los
Angeles to adjudicate any disputes with respect hereto. If any action or
any
other proceeding is brought for the enforcement of this agreement, or if
a
dispute arises under this agreement, the successful or prevailing party shall
be
entitled to recover actual and reasonable outside attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other relief
to
which it may be entitled. Any party in whose favor a judgment has been entered
shall also be entitled to recovery of its attorney's fees and costs in enforcing
such judgme
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