As of July 3, 1996
CINERGI PICTURES ENTERTAINMENT INC.
(f/s/o Xxxxxx X. Xxxxx)
0000 Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxx, Esq.
RE: "EATERS OF THE DEAD"/XXXXXX X. XXXXX (EXECUTIVE PRODUCER)
Gentlemen:
The following letter confirms the principal terms of the agreement between
Xxxx Disney Pictures ("WDPc") and Cinergi Pictures Entertainment Inc. ("Lender")
for the executive producing services of Xxxxxx X. Xxxxx ("Artist") in connection
with a possible motion picture project currently entitled "Eaters of the Dead"
(the "Picture").
A. CONDITIONS PRECEDENT. WDPc shall have no obligation hereunder unless and
until:
1. WDPc receives a fully executed original of this letter of agreement
(in form and substance acceptable to WDPc).
2. WDPc receives a fully executed original of the agreement (in form and
substance acceptable to WDPc) for the underlying rights in and to the book
written by Xxxxxxx Xxxxxxxx ("Xxxxxxxx") entitled "Eaters of the Dead" (the
"Book") and the producing services of Xxxxxxxx in connection with the
Picture.
3. WDPc receives a fully executed original of the agreement (in form and
substance acceptable to WDPc) for the rights, directing and producing
services of Xxxx XxXxxxxxx ("XxXxxxxxx") in connection with the Picture.
4. WDPc receives a fully executed original of the quitclaim agreement
(the "Quitclaim Agreement") (in form and substance acceptable to WDPc) for
all of the rights of Cinergi Film Productions Co. (and/or any affiliate or
subsidiary thereof) ("Cinergi") in and to the Picture.
5. WDPc approves of the chain of title to the Book and the Picture,
approves all agreements with respect thereto and receives all assignments,
releases and other instruments and documents which it reasonably requires
in connection therewith [including but not limited to an assignment of all
rights from Xxxxxxx Xxxxxx ("Xxxxxx") in and to the screenplay for the
Picture written by Xxxxxx].
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6. WDPc approves and validates the "all-in" final budget (I.E., all
above-the-line elements and all below-the-line elements excluding) for the
Picture.
The aforesaid Conditions Precedent shall be deemed satisfied only upon
written confirmation thereof by a WDPc Business Affairs Executive.
B. LOAN-OUT. The services of Artist are being furnished to WDPc by Lender and
consequently all services and obligations to be performed hereunder by Artist
shall be deemed to be performed by Artist at the direction of Lender and all
compensation and other payments for the performance of such services and
obligations shall be paid by WDPc to Lender. All warranties and representations
made by either Lender or Artist shall be deemed made in addition by the other
and a breach of this Agreement by either Lender or Artist shall be deemed a
breach by both.
C. EXECUTIVE PRODUCING SERVICES. If WDPc elects in it sole discretion to
proceed with production of the Picture, then Lender shall cause Artist to
personally render all services customarily rendered by an executive producer in
the motion picture industry in connection with the development, preproduction,
production, post production and delivery of the Picture, subject to the
provisions of Paragraph I.2 below. Artist's services hereunder shall be on a
non-exclusive basis to WDPc.
D. FIXED COMPENSATION. If the Picture is produced as a theatrical motion
picture and if Artist fully performs all services and material obligations, then
Lender shall be entitled to receive the flat sum of $1,500,000, which sum shall
be fully applicable against and recoupable by WDPc from the contingent
compensation set forth in Paragraph E below and which sum shall accrue and
become payable on WDPc's receipt of a fully executed original of this Agreement
and the Quitclaim Agreement (both in form and substance acceptable to WDPc) and
the earlier to occur of: (1) commencement of principal photography of the
Picture; and (2) WDPc giving notice to Xxxxxxxx and/or XxXxxxxxx that all the
Conditions Precedent set forth in Paragraph A above are either satisfied or
waived. Said compensation is an all-inclusive flat fee and no additional
compensation shall be payable by reason of overtime, weekend work, holidays,
etc.
E. CONTINGENT COMPENSATION. If the Picture is produced and released as a
theatrical motion picture and if Artist is not in default hereunder, then Artist
shall be entitled to receive (it being understood and agreed that any sums
payable to Artist under Paragraph D above shall be deemed an advance against and
recoupable from any sums payable pursuant to this Paragraph E) an amount equal
to 5% of 100% of the "Adjusted Gross Receipts" (as defined in Paragraph F.1
below), if any, of the Picture (less all sums paid to Artist pursuant to
Paragraph D) until such time, if ever, that Artist has received therefrom the
additional sum of $1,000,000 (at which time Artist's entitlement to said 5% of
100% of the Adjusted Gross Receipts, if any, shall terminate), thereafter
Artist's participation shall escalate on a prospective basis to an amount equal
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to 10% of 100% of the Adjusted Gross Receipts, if any, of the Picture at such
time, if ever, that the Picture achieves "Cash Breakeven" (as defined in
Paragraph F.2 below).
F. DEFINITIONS.
1. "Adjusted Gross Receipts" as referenced herein shall be defined,
computed and paid in accordance with WDPc's Exhibit "GRP" (and Rider
thereto) as the Gross Receipts under Paragraph I.A. thereof (subject to the
exclusions in Paragraph I.B. thereof) less the deductions in Paragraph I.C.
thereof, but substitution theatrical reissue costs in place of Paragraph
I.C.8. which relates to Theatre Level Advertising.
2. "Cash Breakeven" as referenced herein shall be defined as the end of
the accounting period in which Gross Receipts (as defined in WDPc's Exhibit
"NP" and Rider thereto) first equals the aggregate of the following: (a)
an "off the top" Distribution Fee in the amount of 10% on all Gross
Receipts; (b) all Distribution Costs as set forth in Paragraph IV. of
Exhibit "NP"; (c) Accrued Interest as set forth in Paragraph V.C. of
Exhibit "NP"; (d) Overhead as set forth in Paragraph V.B. of Exhibit "NP";
and (e) Cost of Production as set forth in Paragraph V.A. of Exhibit "NP".
G. EXECUTIVE PRODUCER CREDIT. If the Picture is produced as a theatrical
motion picture and if Artist is not in default hereunder, and further subject to
WDPc's standard exclusions and exceptions (including artwork title exceptions),
WDPc shall accord Artist an individual "Executive Producer" credit (which may be
shared, with Artist in first position of such individual "Executive Producer"
credits unless WDPc, in order to engage the services of one or more third
parties, in good faith accords one or more third parties an individual
"Executive Producer" credit in a position prior to that of Artist (and in such
case, Artist's credit shall follow such other credits) as follows:
1. ON SCREEN: On a separate card (which may be shared with others), in
the main titles if the director, cast, other producer credits etc. are in
the main titles (otherwise in the end titles) in a size of type not less
than the larger of (a) fifty percent (50%) of the size of the title; (b)
one hundred percent (100%) of the size of the "Screenplay by" credit or (c)
one hundred percent (100%) of the size of any other individual "Executive
Producer" credit in connection with the Picture, with placement and all
other characteristics of such credit at WDPc's discretion.
2. IN PAID ADS ISSUED OR CONTROLLED BY WDPc IN WHICH THE REGULAR BILLING
BLOCK APPEARS: In a size of type not less than the larger of (a) thirty-
five percent (35%) of the size of the regular title; (b) one hundred
percent (100%) of the size of the "Screenplay by" credit in such billing
block (c) or one hundred percent (100%) of the size of any other individual
"Executive Producer" credit in connection with the Picture, with placement
and all other characteristics of such credit at WDPc's discretion.
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3. EXCLUDED ADS. Notwithstanding the above, Artist's paid ad credit
pursuant to Paragraph G.2 above shall appear in any so-called "excluded
ads" in which any other individual "Screenplay by" or individual "Executive
Producer" credit appears in connection with the Picture (except for
congratulatory, nomination and/or award ads, special ads excepted under the
DGA Basic Agreement, ads announcing a personal appearance, radio ads and
the audio portion of teasers, trailers and television ads).
4. As used herein, "size" shall mean height, width and thickness.
H. APPROVALS AND CONTROLS. WDPc shall retain all approvals and the right to
initiate action at any time and in any respect in connection with the Picture.
I. GENERAL
1. The results and proceeds of Artist's services hereunder in connection
with the Picture shall be deemed a work-made-for-hire specially ordered or
commissioned by WDPc. WDPc shall exclusively own all now known or hereafter
existing rights of every kind throughout the universe, in perpetuity and in all
languages, pertaining to such results and proceeds, the Picture, and all
elements therein for all now known or hereafter existing uses, media, and forms.
Lender acknowledges that Lender solely owns all of the results and proceeds of
Artist's services in connection with the Picture prior to the date hereof.
Lender and Artist hereby assign the results and proceeds of Artist's services in
connection with the Picture rendered by Artist prior to the date of this
Agreement.
2. WDPc is not obligated to develop, produce, distribute, and/or exploit
the Picture, or to use the services of Artist hereunder or the results and
proceeds thereof in whole or in part and WDPc may (at its sole discretion)
abandon the Picture at any time without further obligation hereunder.
3. This letter agreement (including WDPc's Standard Terms and Conditions
for a Producer/Loan-Out, Form I-9, WDPc's Exhibit "NP" and Exhibit "GRP"
incorporated herein by this reference) contains the full and complete
understanding between the parties and supersedes all prior agreements and
understandings pertaining hereto.
4. Lender's and Artist's sole and exclusive remedy for WDPc's breach,
termination, or cancellation of this letter agreement (including any provision
relating to credit) shall be an action for damages and Lender and Artist
irrevocably waive any right to seek and/or obtain equitable or injunctive
relief.
5. Lender and Artist shall be covered as additional insureds on WDPc's
errors and omissions insurance policy in connection with Artist's services for
the Picture hereunder, during customary periods of pre-production, production
and distribution of
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the Picture, subject to the restrictions, limitations and terms of said policy.
Artist shall, as and to the extent Artist is deemed an employee of WDPc, be
covered as an additional insured on WDPc's general liability insurance policy in
connection with Artist's services for the Picture, subject to the limitations,
restrictions and terms of said policy. The provisions of this Paragraph I.5
shall not be construed so as to limit or otherwise affect any obligations,
representation, warranty or agreement of Lender and/or Artist's hereunder.
6. Except with respect to claims to which Cinergi, Lender and/or Artist
have indemnified WDPc and except with respect to any claims arising from any
other breach by Cinergi, Lender and/or Artist and/or any tortious and/or
criminal conduct of Cinergi, Lender and/or Artist, WDPc hereby defends,
indemnifies and holds Lender and Artist, and their respective successors and
assigns, harmless from and against any and all damages, loss, liability, cost,
penalty, guild fee or award or other expense of any kind (including reasonable
attorneys' fees) that may be obtained against, imposed upon or suffered by
Lender or Artist arising from any claim, demand or action relating to the
production or exploitation by WDPc of the Picture.
XXXX DISNEY PICTURES
By: /s/ Xxxxxxx Xxxx
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Its: Vice President
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XXXXXXX XXXX
ACCEPTED AND AGREED:
CINERGI PICTURES ENTERTAINMENT INC.
By: /s/ Xxxxxxxx X. Xxxx
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XXXXXXXX X. XXXX
Its: Senior Vice President
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Federal I.D. No.:
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By: /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
Social Security No.:
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