[EXHIBIT 10.1.31]
August 15, 2005
Kenwood Xxxxxxx
c/o Xxxx Xxxxxxx
Xxxxxx XxXxxx & Xxxxxxx, LLP
000 Xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000-0000
RE: "Cheeseheads" by Kenwood Xxxxxxx ("Owner")
Dear Kenwood:
When countersigned by you , this letter will confirm
the agreement between you (referred to herein as "Owner") and
the undersigned, Blood and Bones Productions, Inc., a Writers
Guild of America ("WGA") Signatory ("Purchaser") for the
acquisition of all rights and copyright including, without
limitation, the worldwide, perpetual motion picture, television,
allied and ancillary rights in and to the screenplay presently
entitled "Cheeseheads" ("the Screenplay") solely written by
Owner and all drafts or other versions thereof and characters
contained therein. We have agreed as follows:
A. Reference is hereby made to the option/purchase
agreement (the "Prior Agreement") between Owner and Purchaser
and Owner acknowledges receipt of payment in the amount of
$12,500 pursuant to the Prior Agreement for an option (the
"Option") to acquire the rights in the Screenplay. Owner
hereby grants Purchaser an extension to the Option granted
pursuant to the Prior Agreement for a period of 6 months
commencing from the date of execution by Owner accepting
the terms of this letter.
1. Upon payment of the Purchase Price set forth below,
Owner hereby assigns to Purchaser all right, title and
copyright throughout the Universe in and to the Screenplay
in perpetuity throughout the universe including, but not
limited to, all motion picture, television and allied
rights which shall include, without limitation., the
exclusive worldwide, perpetual rights to produce one or
more motion pictures and remakes and sequels thereof,
television long form and series rights, merchandising and
commercial tie-up rights, screenplay publishing rights,
promotional rights for any advertising related to any
production based upon the rights acquired and ancillary
rights, and the perpetual, exclusive, universe-wide right
to distribute, exploit
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and other otherwise use any such production in any and all
media whether now known or hereafter discovered, including,
without limitation, soundtrack album, free television, cable
television, syndication, pay television, satellite, pay-per-view
television, closed circuit telecast, home video, CD and laser
disk, DVD, internet, and non-theatrical rights and any and all
other distribution and delivery media, whether now known or
hereafter discovered. Without limiting the foregoing, Owner
hereby irrevocably assigns, licenses and grants to Purchaser,
throughout the universe, in perpetuity, the rights, if any,
of Owner to authorize, prohibit and/or control the renting,
lending, fixation, reproduction and/or other exploitation of
any motion picture or other production based on the Screenplay
by any media and means now known or hereafter devised as may be
conferred upon Owner under applicable laws, regulations or
directives, including without limitation, any so-called rental
and lending rights pursuant to any European Economic Community
("EEC") directives and/or enabling or implementing legislation,
laws or regulations enacted by the member nations of the EEC,
an xxxxxx acknowledges that the compensation payable under this
Agreement, includes, without limitation, adequate and equitable
remuneration for the "Rental and Lending Rights". Purchaser
shall have the sole, perpetual right to use, exploit, advertise
and exhibit the foregoing and the advertising, publicity and
promotion thereof, in any and all media whether now known or
hereafter devised, in all languages, as Purchaser in its sole
and unfettered discretion shall determine. The rights granted
to Purchaser hereunder are irrevocable and shall not be subject
to reversion except as provided in the WGA Agreement. Owner
hereby agrees that in the event of a breach of this agreement
by Purchaser, Owner remedies shall be limited to an action for
damages and Owner specifically acknowledges that, in no event,
shall Owner have, and he hereby waives, any right to seek
injunction, rescission or other equitable relief in connection
with any such breach or alleged breach. Purchaser shall have
no obligation to use the results of Owner's services. Purchaser
shall have the right to use Owner's name and approved likeness
solely in connection with the exploitation, distribution,
promotion and advertising of the Picture, and any rights
therein or derived therefrom.
2. (a) The purchase price for the Screenplay shall be
One Hundred Thousand Dollars ($100,000) which sum shall be paid
on the first day of principal photography of the Picture. If
payment is not made on or before expiration of the Option, all
rights in and to the Screenplay shall remain vested in Owner and
any rights granted to Purchaser hereunder shall revert to Owner.
(b) Owner shall be paid One Hundred Fifty Thousand
Dollars ($150,000) which sum shall be deferred and paid only
after the Financier(s)s of the Picture have been paid in full for
the actual cost of production of the Picture plus interest, in
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accordance with the agreements pursuant to which such
financier(s) provide their financing. At such time Owner shall be
paid the amount of the deferred compensation, pro rata and pari
passu with all other sums deferred and payable to persons or
entities providing materials, services or rights to the Picture,
if any. For purposes of clarification, such deferred compensation
shall be paid no later than deferred compensation to any other
individual or entity (i.e., on a most favored nations basis);
accordingly, no deferred compensation may be paid to any
individual or entity unless Owner is also being paid on a pro
rata pari passu basis.
(c) Owner shall be paid for each theatrical motion
picture sequel or prequel one-half (1/2) and for each theatrical
motion picture remake one-half (1/2), of the applicable amounts
payable pursuant to paragraph 6(a) above, plus, one-half (1/2)
of the contingent compensation payable under paragraph 6(b) above,
and paragraphs 6(g) and 6(h), below.
(d) In the event of any made for television movie or
mini series produced after the First Picture, Owner shall be paid
Fifteen Thousand Dollars ($15,000) per hour up to a maximum of
Eighty Thousand Dollars ($80,000).
(e) In the event a television series based on the
Screenplay or the First Picture is produced, then, for each
episode thereof broadcast on first run over prime time network
television (CBS, NBC, ABC or FOX) based upon the Screenplay,
Owner shall be entitled to receive and the following amounts
payable upon the initial broadcast of each episode, as applicable.
i. Two Thousand Five Hundred Dollars ($2,500)
for each episode of up to thirty (30)
minutes in length;
ii. Three Thousand Five Hundred Dollars ($3,500)
for each episode of up to sixty (60) minutes
in length;
iii. Five Thousand Dollars ($5,000) for each
episode of more than sixty (60) minutes in
length;
iv. As a buyout for all royalties due Owner for
reruns of television episodes produced and
distributed by or under license from
Purchaser or its assignees, Owner shall be
entitled to receive an amount equal to one
hundred percent (100%) of the applicable
initial royalty payment, allocated twenty
percent (20%) to each of the first five
reruns, payable within thirty (30) days of
broadcast of the applicable rerun.
(f) In the event a television program described in
paragraphs (d) or (e) is produced for syndication, non prime-time
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network or for free cable each payment provided for in said
paragraphs (d) and (e) above shall be reduced by fifty percent
(50%), and in the event produced for pay cable (e.g., Showtime,
HBO), each payment provided for in said paragraphs (d) and (e)
above shall be seventy-five (75%) of the otherwise applicable
payment.
(g) If a television series based on the Screenplay
or the First Picture is produced then for any spinoff series
based upon a character appearing in the Screenplay, Owner
shall receive one-half (1/2) of the royalties paid to Owner
pursuant to subparagraph (e) or (f) above.
(h) If a motion picture based on the Screenplay
is produced and Owner is not in breach hereof, then in
addition to the amount paid pursuant to paragraph 2 (a) and
(b) above, Purchaser shall pay Owner (or cause Owner to be
paid) contingent consideration equal to five percent (5%) of
100% the net profits derived by the Producer of the Picture.
For the purposes of this subparagraph 2 (h), if there is a
single worldwide financier/distributor, net profits shall
be computed, defined, accounted for and paid in the same
manner as applies to Purchaser (but excluding cross-
collateralization and over-budget penalties). If there
is no single worldwide financier/distributor net
profits shall mean all sums received b y Purchaser
from the distribution or exploitation of the Property
or any motion picture based thereon in excess of the
full, final negative cost of such motion picture, any
actual out of pocket sales costs incurred by
Purchaser, and the portion of net profits paid to any
financier of the First Picture. The definition of net
profits shall be no less favorable than the definition
accorded to any other net profits participant.
(i) At such time as Three Million Dollars ($3,000,000)
("the Triggering Amount") is received by or credited
to the Producer of the Picture from the exploitation
of the Picture throughout the universe in all media,
whether now known or hereafter devised in perpetuity
("Producer"s Gross"), Owner shall be paid $50,000, and
an additional $50,000 for each additional $1,000,000
in Producer's Gross received by or credited to
Producer after the Triggering Amount. Owner shall have
customary accounting and audit rights. For purposes of
this paragraph 3(b), Producer shall be deemed to
include Purchaser and any subsidiary or affiliate of
Purchaser that acts as the Producer of the Picture,
but shall not include a studio or other similar
distribution and financing entity which shall also
distribute the Picture. If Producer or an affiliate of
Producer acts as Distributor of the Picture, the
amount deemed to be received by Producer or such
affiliate shall be that amount remaining after
deduction or reasonable customary arms length
distribution fees and actual distribution costs.
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Payment shall be made to Owner within Thirty (30) days
after Producer receives Triggering Amount. Producer's
Gross shall be defined on a most favored nations basis
among all participants entitled to a deferral based
upon Producers Gross.
(j) Owner agrees any and all sums received under
Paragraph 2(i) above shall be credited against and be
deductible from any amounts due and payable under the
terms of Paragraph 2(h) above.
(k) Owner agrees that all sums paid hereunder shall
constitute payment in full for all rights acquired
herein. In the event any other parties are entitled to
share in these payments or shall be entitled to any
payment for the Rights (or any part thereof) granted
hereunder, Owner shall be responsible for making such
payment and shall indemnify Purchaser against any
obligation in regard thereto. The rights granted to
Purchaser hereunder are irrevocable and shall not be
subject to reversion. Owner and Writer hereby agree
that in the event of a breach of this agreement by
Purchaser, Owner and Writer's remedies shall be
limited to an action for damages and in no event shall
owner or Writer be entitled to seek rescission,
reversion, to injunctive or other equitable relief.
3. In furtherance of the provisions of this Agreement,
Owner agrees to execute and deliver, or cause the execution,
acknowledgement and delivery to Purchaser of all such
further documents consistent herewith which Purchaser
reasonably requires to evidence such grant of rights and
the intent of this Agreement after a reasonable opportunity
to review and negotiate such documents in good faith,
including, without limitation and if requested by
Purchaser, a more formal acquisition of rights agreement
and synchronization and performing rights licenses. As part
of this obligation, upon execution of this agreement, Owner
will execute and return to Purchaser the Short Form
Copyright Assignments in the form attached hereto as
Exhibit "A".
4. The rights granted to Purchaser hereunder may be
assigned by Purchaser to any person, firm or corporation.
Owner shall be informed prior of such sale. Purchaser shall
be released from any of its obligations hereunder only if
the assignee assumes in writing all of such obligations, and
is a major motion picture studio or U.S. television network
or other similarly financially responsible party.
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5. Owner is a member of the WGA. In the event a motion
picture is produced based on the Screenplay, Owner shall
receive the credit in accordance with the provisions of the
WGA Basic Agreement. Such credit shall be given on a
separate card on all positive prints in the main titles if
the Director's credit is contained in the main titles and
shall be in no smaller letters than the Director's credit.
Such credit shall also be given in paid ads where the
Director receives credit, and on video and DVD packaging,
subject to the exceptions usually applicable in the motion
picture industry. All other aspects of the credits shall be
in Purchaser's sole discretion. If there is an omission of
such credit in the Picture of any advertising where credit
is required, and Owner gives written notice of such
omission, reasonable best efforts will be asserted to
prospectively cure such omission. Furthermore, in the event
of such omission, Owner agrees that Owner shall not be
entitled to enjoin the distribution or exhibition of such
motion picture or obtain any other form of equitable
relief, but shall be solely limited to a remedy at law for
damages.
6. (a) Subject to Article 28 of the WGA Basic Agreement,
Owner warrants that the Screenplay is wholly original with
Owner; that Owner is authorized and empowered to enter into
this Agreement and to transfer the rights herein
transferred; that to the best of Owner's knowledge, the
Screenplay does not violate or infringe upon the personal
or Screenplay rights, or any other rights, or constitute a
libel or slander of any person or entity; and that Owner
has the unencumbered and complete fright and power to enter
into this Agreement, and to make the grant of rights
contained herein and that none of the rights granted have
been granted or assigned to any other person, firm or
corporation. In addition, Owner agrees to indemnify and
hold Purchaser harmless from any and all claims,
liabilities, and costs, including reasonable outside
attorneys' fees and costs arising out of Owner's breach of
the warranties set forth in this paragraph 10(a).
(b) Purchaser agrees to defend and indemnify Owner and
to hold Owner harmless from any and all claims, liabilities
and costs, including reasonable attorneys' fees and costs,
arising out of any breach by Purchaser of its obligations
and agreements hereunder or from any material created by or
under direction or authority of Purchaser and/or included
in any picture based upon the Screenplay and/or arising out
of the development, production, financing, distribution or
exploitation of the Screenplay and/or any production
hereunder, or any element thereof. Owner shall be named as
an additional insured under the errors and Omissions and
General Liability Insurance Policies obtained for the
Picture.
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7. No act or omission of either party shall constitute a
material breach hereof unless the non-performing party has
failed to cure such act or omission within thirty (30) days
after receiving written notice by the other party
specifying the act or omission that requires correction
which period shall be Ten (10) days in regard to failure to
make payment.
8. This Agreement shall be in all respects governed by and
construed under the laws of the State of California and
Owner and Purchaser each hereby submits to the jurisdiction
of the tribunals in that State. Any dispute pertaining to
this Agreement shall be submitted to binding arbitration in
the County of Los Angeles, State of California in
accordance with the rules and procedures of the American
Arbitration Association. If an action is brought in
connection with this Agreement, the prevailing party shall
be entitled to collect from the losing party all legal fees
and costs incurred therein.
9. (h) Any notices required or desired hereunder shall be
directed as follows:
If to Purchaser:
Blood and Bones Productions, Inc.
c/o Film and Music Entertainment
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
With a courtesy copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to Owner:
Kenwood Xxxxxxx
c/o Xxxx Xxxxxxx
Xxxxxx XxXxxx & Xxxxxxx, LLP
000 Xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000-0000
(i) Notices shall be deemed received when delivered, if
given personally, two (2) days after delivery to postal
authorities (or mail company) if given by overnight mail,
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and Seven (7) days after deposit in the United States
mail, first class postage prepaid.
(j) All payments shall be sent to Owner in care of the
address set forth in paragraph 9 above, unless Owner
directs otherwise in writing.
10. Purchaser agrees that in the event that the development
of a theatrical or television remake or sequel or prequel
(including the first episode of a television series, if no
pilot is produced) is commenced by or under authority from
Purchaser (or its assignee or designee) within seven (7)
years of the first release or exploitation in the United
States of the first Picture based on the Screenplay,
Purchaser shall notify Owner and if Owner is readily
available to commence services, Purchaser will enter into
good faith negotiations with Owner for Owner to write the
first draft screenplay for such sequel or remake on terms
no less favorable than the terms of this Agreement. If
negotiations do not result in an agreement within Ten (10)
business days after the commencement of such negotiations,
Purchaser shall have no further obligations to Owner in
regard to such sequel, prequel or remake other than to make
the payments provided for in paragraph 2(c). This provision
shall apply on a "rolling" basis to each subsequent remake,
sequel or prequel within 7 years of the release or
exploitation of the prior remake, sequel or prequel.
11. Owner and one (1) non-business companion shall be
invited to all premieres, major festival exhibitions, previews
and cast/crew screenings of the Picture and in connection with
the principal U.S. celebrity premiere of the Picture, if
such premiere is at a location, Owner and Owner's guest
shall be provided with round-trip transportation, hotel
accommodations and an appropriate per diem allowance.
12. Owner shall be provided with one (1) VHS videocassette
of the Picture and one (1) DVD copy of the Picture at such
time, if ever, as VHS videocassettes of the Picture and DVD
copies of the Picture, respectively, become generally
commercially available, if ever.
13. Owner shall be deemed a "professional writer" as such
term is defined and applied pursuant to the terms of the WGA
Minimum Basic Agreement.
14. The remainder of the terms of this Agreement shall be
those terms customary in the industry for agreements of this
type, subject to good faith negotiations between the
parties hereto. This Agreement expresses the entire
understanding of the parties hereto and replaces any and
all former agreements, negotiations and understanding,
written or oral, relating to the subject matter hereof.
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If the foregoing meets with your approval, then please
have the four enclosed copies of this memorandum agreement
fully executed (including attached Exhibits "A" and "B"
before a notary public as indicated) and return them to us
in order to confirm our agreement.
Very truly yours,
Blood and Bones Productions, Inc.
By: Signature Illegible (Sig.) 9/6/5
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Its: Xxx Xxxxxx, Chairman
AGREED TO AND ACCEPTED:
"Owner"
Kenwood Xxxxxxx (Sig.)
-------------------------------
Kenwood Xxxxxxx
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EXHIBIT "A"
ASSIGNMENT - LITERARY PURCHASE AGREEMENT
KNOW ALL PERSONS BY THESE PRESENTS: That for good and valuable
consideration, receipt whereof is hereby acknowledged, the
undersigned, KENWOOD XXXXXXX, has granted to Blood and Bones
Productions, Inc. (hereinafter referred to as "Purchaser"), and its
representatives, successors and assigns forever, all motion picture,
television and allied rights throughout the world in perpetuity in and
to that certain original literary work described as follows:
Title: "Cheeseheads" - the Screenplay
Author: Kenwood Xxxxxxx
The undersigned and Purchaser have entered into an Agreement of
Sale and Purchase of Literary Material relating to the transfer and
assignment and possible reversion of the foregoing rights in and to
said literary work, which rights are or will be more fully described
in said Agreement or Sale and Purchase of Literary Material, and this
Assignment is expressly made subject to all of the terms, conditions
and provisions contained or to be contained in said Agreement of Sale
and Purchase of Literary Material.
IN WITNESS WHEREOF, the undersigned has executed this Assignment
this 15th day of August, 2005.
By: Kenwood Xxxxxxx (Sig.)
---------------------------
KENWOOD XXXXXXX
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