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Exhibit 10.4
AGREEMENT
This agreement dated this 15th day of May, 1995 between REALM PRODUCTION and
ENTERTAINMENT, INC., a Florida Corporation ("Producer" and/or "REI") and XXXX
XXXXXX ("Owner"), with respect to Producer's purchase of the exclusive rights
in and to owner's creation tentatively entitled YAHOO BUGABOOS (hereinafter
referred to as the "PROPERTY")
Owner hereby agrees to provide to Producer all rights, title and interest to
the Property and other services, as set forth herein, and further agrees to
accept the compensation set forth herein as full consideration for all of the
rights and services being transferred or provided pursuant to this Agreement.
In consideration of the mutual covenants and agreements herein contained, Owner
and Producer hereby agree as follows:
1. RIGHTS
A. In consideration of Producer's payment to Owner of Five Thousand
($5000.00) Dollars, (which such payment shall be due and payable on or before
June 10, 1995), Owner shall transfer all rights, title and interest to the
Property for perpetuity, forever and throughout the universe, and in any and
all languages, including but not limited to, all ancillary and allied rights to
merchandising, music, scripts, stage, music publication, characters, sequels,
motion picture, radio and/or television broadcast,
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video, book publishing, CD-ROM, or other electronic media rights, distribution,
marketing, licensing, copyrights and trademarks.
B. Nothing herein contained shall, however, be deemed to prohibit
Producer from (i) concurrently using Owner's name or biography in connection
with any personal or business activity to promote the Property; or (ii)
appearing on talk, magazine or news shows to discuss the Property, and/or giving
interviews in any television or print media.
2. OWNER'S SERVICES
A. PILOT EPISODES. Owner agrees to consult with, and lend his aid and
knowledge to Producer and it's successors, affiliates, licensees and assigns if
requested, and to act in the capacity of an Independent Contractor For Hire to
fully complete the pilot episodes (herein defined as Three (3) half hour
episodes, consisting of approximately 22 minutes each, in English of the
Property) including but not limited to consulting, directing, writing the
scripts, lyrics and bible, supervising editing and other pertinent services
relating to same, for consideration of Producer's payment to Owner in the
amount of Nine Thousand ($9,000) Dollars, (which such payment shall be due and
payable Five Thousand ($5000) Dollars at commencement of principal photography,
and the full balance of Four Thousand ($4000) Dollars, sixty (60) days
thereafter. In addition to the Nine Thousand ($9,000) Dollar fee, Owner shall
receive expenses in the amount of Two Thousand ($2000) Dollars which is all
inclusive of, but not limited to, travel, hotel and living, food,
transportation, etc., payable at commencement of principal photography.
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B. THE SERIES. If the Producer, at his sole discretion, decides to
expand production beyond the Pilot Episodes into a Series (defined as a total
of thirteen (13) episodes including the Pilot), then in that event Owner shall
receive the following compensation:
I. Three and one half (3.5%) percent of ADJUSTED GROSS MERCHANDISING
ROYALTY revenues (defined as the percentage of Merchandise License
Royalty of Gross Merchandise Revenues (the funds actual collected for
both domestic and international markets), less only merchandising
agency fees and third party marketing costs (with said third party
marketing costs not to exceed forty (40%) percent of the funds actually
collected). Said funds, as collected, shall be placed into an
institutional escrow account acceptable to Owner, whose approval shall
not be unreasonably withheld. Owner shall receive payments from the
escrow account within 30 days of receipt of funds therein.
FOR EXAMPLE PURPOSES: IF ONE (1) YEAR ANNUAL MERCHANDISING
REVENUES ARE:
Gross wholesale merchandise revenues $100,000,000
Merchandising License royalty @ 8% $ 8,000,000
3rd party Fees and Costs @ 40% $ 3,200,000
ADJUSTED GROSS MERCHANDISING ROYALTY $ 4,800,000
Owner's 3.5% of adjusted gross $ 168,000
For purposes of the example above, Gross wholesale merchandise revenues are
defined as "all revenues generated by the Property in all medias of the
universe, except for video and broadcast (free and paid)" until such time as
REI has received two hundred (200%) percent of the production budget per
episode (including hard and soft costs actually expended, accrued and
deferred). Once REI receives funds equal to two hundred (200%) percent of the
production budget, then, at that time, Owner shall be
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entitled to collect the three and a half (3.5%) percent of ADJUSTED GROSS
MERCHANDISE ROYALTY on video and broadcast revenues, as actually collected by
REI.
II. Compensation for services. The Owner shall have the option to perform
services as listed in 2A above or the schedule below, for the initial twenty
six (26) episodes, and the continuing option for these same services for a
minimum of seven (7) episodes of every subsequent thirteen (13) episodes of the
series for the consideration as listed below. The production and shooting
schedules are to be mutually agreed upon by Owner and REI, subject to delivery
requirements by the Merchandising Agent and Broadcasters.
OWNER'S COMPENSATION PER EPISODE
Episodes
(beyond the Pilot Direct/Head Writer Writing Scripts and
Episodes) Other Services Lyrics Only Total
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1-13 $2,500 $2,000 $4,500
14-26 $2,750 $2,250 $5,000
27-39 $3,000 $2,500 $5,500
40-52 $3,250 $2,750 $6,000
53 and thereafter $4,000 $3,000 $7,000
III. If Owner decides to perform services (as outlined in 2A and 2B (II)
above) Owner shall receive additional compensation at a rate of Seven Hundred
and Fifty ($750) Dollars per week, in the form of
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reimbursement of all expenses while Owner is displaced from his primary
residence, and working full time on the Series. Said expense reimbursements
include but are not limited to, travel, hotel and living, food, ground
transportation, etc. It is agreed that Owner shall also receive the sum of
Three Hundred ($300) Dollars for air fares upon completion of each six (6)
episodes for which Owner performs the delineated services.
IV. If REI decides to produce any long form versions of the Property, and for
any reason Owner is not hired to Direct same, then in that event, Owner shall
receive two (2%) percent of any and all long form production budgets (hard costs
only), as total compensation for consulting services to be provided by Owner as
an Independent Contractor for hire.
3. REVERSION
If Producer does not produce a minimum of thirteen (13) episodes, including the
Pilot episodes, within thirty (30) months hereof, then in that event only, all
rights, title and interest to the Property shall revert to Owner, subject to
all written and executed agreements then in force which are the subject of the
Property. Owner shall provide ninety (90) days written notice of intent
pursuant to exercising the rights contained within this clause.
4. REPRESENTATIONS
Both Owner and Producer hereby represents and warrant that they have the full
right and authority to enter into this Agreement; and that the consent of no
other person or entity is necessary to fully perform under this Agreement.
Further, Owner specifically represents that he is the sole owner of the
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Property, and will not cause, allow or sanction any use of the Property, or any
part thereof to anyone other than Producer and its successors, affiliates,
licensees or assigns, or make any agreement with any other person, firm or
entity which is in conflict or otherwise inconsistent with this Agreement. At
Producer's request, Owner hereby agrees at all times to defend, indemnify and
hold harmless the Producer and its successors, affiliates, licensees and
assigns from and against any and all claims, liabilities, damages, losses and
expenses which may arise from any breach or alleged breach of any
representation, warranty or agreement made by Owner hereunder. Owner further
agrees to use his best efforts to assist Producer in executing all reasonable
documentation pursuant to Producer's rights hereunder. REI similarly
indemnifies Owner for any claim arising out of the development, production, and
distribution of the Pilot and Series of the Property, provided such claim does
not involve a breach by Owner.
5. RIGHT TO EQUITABLE RELIEF
Owner hereby acknowledges that the rights, title and interest to the Property
hereunder are of a special, unique, unusual, extraordinary and intellectual
character, which gives them a peculiar value, for the loss of which Producer
can not be reasonably or adequately compensated in damages, and a breach by
Owner of the provisions of this Agreement will cause Producer irreparable
injury and damage. Therefore Owner expressly agrees that Producer shall be
entitled to seek injunctive and other equitable relief to prevent a breach of
this Agreement or any part hereof by Owner, and to secure its enforcement.
Resort to such equitable relief, however, shall not be construed to be a waiver
of any other rights or remedies which Producer may have.
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6. ASSIGNMENT
Producer shall have the right at any time to assign or otherwise transfer this
Agreement, in whole or in part, or any or all of Producer's rights or
obligations hereunder, to any third party.
7. APPLICABLE LAW
This Agreement is made and entered into in the State of Florida. In the event
of a dispute concerning the subject matter of this Agreement, Florida law shall
be applicable with respect thereto.
8. CREATIVE CONTROL
Both Owner and Producer shall have mutual creative control of the Property
subject to the production episode budget, not to exceed Sixty Five Thousand
($65,000) Dollars per episode, which includes any and all hard and soft costs.
In the event that there is a disagreement between Owner and Producer of a
creative decision, both Owner and Producer hereby agree to appoint Mr. Xxxx
Xxxxxxx, of the firm Xxxxxx/Xxxxxxx Entertainment, Inc., with full authority
given to Xx. Xxxxxxx to make the final and binding decision, subject to budget
restrictions. If for any reason Xx. Xxxxxxx is unable to perform these
services, then in that event Owner and Producer shall mutually approve a
substitute independent third party, and said approval shall not be unreasonably
withheld.
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9. CREDITS
Producer shall accord Owner (unless Owner elects to decline such credit ) a
screen credit to read "Created by Xxxx Xxxxxx", and a screen credit for any and
all services rendered by Owner of the Pilot and each episode of the series,
which is normal and customary of industry standards for similar Properties. No
casual or inadvertent failure of the Producer to comply with this credit
provision shall constitute a breach of this Agreement by Producer. Both Owner
and Producer acknowledge that screen credits must be approved by outside third
parties, including but not limited to, broadcasters, merchandisers, etc., and
that all such credits are subject to their changes and standards.
10. PLACE OF BUSINESS
The principal place of business shall be solely determined by the Producer.
11. TERM
The term of this Agreement shall commence upon execution of this Agreement, and
shall continue for perpetuity unless sooner terminated in accordance with the
following:
a) The duration of any and all trademarks, copyrights of the Property to be
held and owned by REI.
b) So long as REI shall be entitled to compensation of the Property for any
agreements and/or licenses to third parties.
c) Mutual agreement to terminate this Agreement signed in writing by the
parties hereto.
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12. TITLE, TRADEMARKS AND COPYRIGHTS
The copyright and trademarks (past, present and future) and all rights
thereunder, shall be held, registered and extended in the name of REI, of it's
assigns.
13. CONTROL OF THE ASSETS
Owner hereby relinquishes all of his rights and title to the Property for the
Universe, and agrees to execute all reasonable documentation (including short
form assignment of copyright) requested by REI, to assure proper assignment of
said title and interest to REI. If Owner, for any reason whatsoever, fails to
sign said documents within five (5) days of request, Owner hereby appoints REI
his irrevocable attorney-in-fact to do any necessary act with regard to
implementation of the copyright and any other documentation pursuant to this
Agreement.
14. NO OBLIGATION TO PRODUCE
It is understood and agreed by Owner that REI shall have no obligation to
produce, complete, release, distribute, advertise or exploit the Property, and
Owner specifically releases REI from any liability for any loss or damage
either or both parties may suffer by reason of REI's failure to produce,
complete, release, distribute, advertise or exploit the Property. Nothing
contained in this Agreement shall constitute a partnership. Joint venture by
the Owner or REI hereto, or constitute either party an agent of the other.
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15. DISABILITY
In the event Owner is disabled REI shall have the right to suspend compensation
for Owner's services except for the three and one half (3.5%) percent
compensation as outlined in paragraph BI.
16. MISCELLANEOUS:
A. All such notices which any party is required to may desire to serve
hereunder shall be in writing and shall be served by personal delivery to the
other parties or by prepaid registered or certified mail addressed to the
parties at their respective addresses as set forth in the recitals hereof, or
at such other address as the parties may from time to time designate in writing
to the other. Notices by mail shall be deemed received three (3) days after
deposit in the United States Mail.
B. This agreement may be executed in Counterparts with each being deemed
a whole and complete copy.
C. Both REI and Owner agree that all payments to Owner hereunder shall
be paid directly to the Fifi Oscard Agency, Inc. at 00 X. 00xx Xx., XX, XX.
00000, attn: Xxxxx XxXxxxx.
17. ARBITRATION: In the event of any dispute among the parties to enforce the
terms of this Agreement, (except as to paragraph 5) such dispute shall be
exclusively resolved under the auspices of the American Arbitration Association
in Miami, Florida. In all events, the prevailing party shall be entitled to
recover from the non-prevailing party all costs of attorneys' fees and other
costs of arbitration.
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18. COMPLETE AGREEMENT: This Agreement shall contain the entire and Complete
Agreement among the parties and shall not be modified except in writing, signed
by all parties hereto.
AGREED:
REALM PRODUCTION
AND ENTERAINMENT, INC.
/S/ Xxxxxx Xxxxxxxxx /s/ Xxxx Xxxxxx
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XXXXXX XXXXXXXXX, PRESIDENT XXXX XXXXXX, "OWNER"
"REI AND/OR PRODUCER"
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