THIS LITERARY OPTION & PURCHASE AGREEMENT, including any exhibits and attachments hereto, (hereinafter “Agreement”) is made and entered into as a user of our services by and between the Buyer (hereinafter “Production Company”, “Us” or “We”) and Vendor, (herein “You” or “Author”) with respect to the work sold within the ScreenExchange Marketplace, owner by Author (hereinafter “Work”). The Work, and the title, themes, stories and all other contents thereof, and the characters therein, and all translations, adaptations and other versions thereof now or hereafter owned by Author, whether now existing or hereafter created, are herein referred to collectively as the “Property”.
1. Conditions Precedent:
Production Company’s obligations hereunder are subject to its receipt items purchased on the Screen Exchange platform, in form and pursuant to terms and conditions satisfactory to Production Company, of copies of all chain of title documents with respect to the Property including without limitation the executed Publisher’s Releases further described in Paragraph
Author hereby grants to Production Company an non-exclusive and irrevocable option to purchase all rights in the Property as set forth in Paragraph 5 hereof (the “Rights”) upon and subject to the following terms and conditions:
(a) Option Period: The initial option period (“Initial Period”) shall commence on the date hereof and shall continue for a period of twelve (12) months following the date of receipt by Production Company of this Agreement signed by Author (“Execution Date”) as indicated below. The Initial Period is hereafter referred to as the “Option Period”.
(b) Option Payments: Production Company shall pay to Author the following sums in consideration of the option herein granted:
(i) For the Initial Period, The price set by the Author’s listing price in the ScreenExchange Marketplace. (“Initial Payment”), payable promptly upon execution of this Agreement by the parties hereto.
(c) Development Activities: During the Option Period, Production Company may engage in customary development and preproduction activities with respect to motion pictures and/or other productions based on the Property. If in connection with such development or preproduction activities Author or another party is engaged by or on behalf of Production Company to write revisions of the Property, all such revisions shall be and remain Production Company’s sole and exclusive property, whether or not Production Company exercises the option hereunder; provided,
however, that if Production Company does not exercise said option, Production Company’s use (if any) of such revisions shall be subject to Author’s rights in the Property.
(d) Automatic Extensions: The Initial Period shall be not extended without notice for a period equal to the length of time which elapses, if any, between the Execution Date and the date on which the condition precedent is satisfied.
The Initial Period and/or Extension Period(s), as applicable, shall be extended without notice for periods equal to the length of the time necessary to settle or otherwise resolve any third party claims arising during the Option Period which in Production Company’s reasonable good faith judgment would adversely affect Production Company’s acquisition and/or exercise of the Rights and of labor disputes and other force majeure events, which interfere with Production Company’s development and preproduction of the Property and for such additional time as is reasonably necessary for Production Company to recommence its usual business operations.
In the event that the Initial Period or Extension Period(s) would otherwise expire on a Saturday, Sunday or national holiday, said period shall be extended without notice until the end of the next following business day.
3. Purchase Price/Exercise of Option:
If Production Company exercises its option, the above Initial Payment will apply toward the purchase price of the Rights which shall be a total of Three Percent (3%) of the gross receipt, if and when, the Property is exploited for exhibition by a third-party production company or distributor (the “Purchase Price”).
The Purchase Price shall be recouped, before the end of each calendar year that the Production Company chooses to exploit the Work, upon the gross receipts.
Notwithstanding anything to the contrary, in no event shall Author’s payment hereunder be more than the standard union minimum(s) set forth by the Writer’s Guild of America (WGA).
The option, if exercised, shall be exercised by written notice or by commencement of principal photography of any motion picture content based on the Property produced pursuant to the Rights (the “Picture”).
4. Additional Payments/Participation:
Author shall be entitled to the additional payments for theatrical sequels and remakes as follows: If a theatrical sequel or remake motion picture based on the Property is produced pursuant to the Rights, a sum equal to Three Percent (3%) of the previous theatrical motion picture’s gross receipts in the case of a sequel or remake, payable within the calendar year- of any year which the Producer exploits the motion picture for capital gains, following the completion of principal photography of each such sequel or remake;
The Author shall receive no more the minimum requirements of compensation set forth by industry unions (eg. Writers Guild of America) for each such sequel or of each such remake, defined, accounted for and paid in accordance with Production Company’s standard definition thereof.
5. Grant of Rights:
If the option is exercised, Production Company shall own, and Author assigns and sells to Production Company, non-exclusively, in perpetuity and throughout the universe, all right, title and interest in the Property except for the Reserved Rights expressly set forth in Paragraph 6 below. Without limiting the generality of the foregoing, the Rights in the Property herein granted include:
(a) Audiovisual Works: All motion picture rights (including all silent, sound dialogue and musical motion picture rights), all television motion picture and other television rights, with limited radio broadcasting rights and 7,500 word publication rights for advertisement, publicity and exploitation purposes, and certain incidental and allied rights, throughout the exploitation purposes, and certain incidental and allied rights, throughout the world, in and to the Property and in and to the copyright of it and all renewals and extensions of copyright. Included among the rights granted
to Production Company hereunder (without in any way limiting the grant of rights hereinabove made) are the following sole and exclusive rights throughout the world:
(i) To make, produce, adapt and copyright one or more motion picture adaptations or versions, whether fixed on film, tape, disc, wire, audio- visual cartridge, cassette or through any other technical process whether now known or from now on devised, based in whole or in part on the Property, of every size, gauge, color or type, including, but not limited to, musical motion pictures and pictures in series or serial form, and for such purposes to record and reproduce and license others to record and reproduce, in synchronization with such motion pictures, spoken words taken from or based upon the text or theme of the Property and any kinds of music, musical accompaniments and/or lyrics to be performed or sung by the performers in any such motion picture and any other kinds of sound and sound effects.
by all means or technical processes whatsoever, whether now known or from now on devised including, by way of example only, film, tape, disc, wire, audio-visual cartridge, cassette or television (including commercially sponsored, sustaining and subscription or pay-per-view television, or any derivative of it; and anywhere whatsoever, including homes, theaters, and elsewhere, and whether a fee is charged, directly or indirectly, for viewing any such motion picture.
(ii) To broadcast, transmit or reproduce the Property or any adaptation or version of it (including without limitations any motion picture produced hereunder and/or any script or other material based on or using the Property or any of the characters, themes or plots of it), by means of television or any process analogous thereto whether now known or from now on devised (including commercially sponsored, sustaining and subscription or pay-per-view television) , by motion pictures produced on films or by means of magnetic tape, wire, disc, audio-visual cartridge or any other device known or from now on devised an including such television productions presented in series or serial form, and the exclusive right generally to exercise for television purposes all the rights granted to Production Company hereunder for motion picture purposes.
(iii) Without limiting any other rights granted Production Company, to broadcast and/or transmit by television or radio or any process analogous thereto whether now known or from now on devised, all or any part of the Property or any adaptation or version of it including any motion picture or any other version or versions of it, and announcements about said motion picture or other version or versions, for advertising, publicizing or exploiting such motion picture or other version or versions, which broadcasts or transmissions may be accomplished with living actors performing simultaneously with such broadcast or transmission or by any other method or means including the use of motion pictures (including trailers) reproduced on film or by means of magnetic tape or wire or through other recordings or transcriptions.
(iv) To publish and copyright or cause to be published and copyrighted in the name of Production Company or its nominee in any languages throughout the world,
in any form of media, synopses, novelizations, serializations, dramatizations, abridged and/or revised versions of the Property, not exceeding 7,500 words each, adapted from the Property or from any motion picture and/or other version of the Property for advertising, publicizing and/or exploiting any such motion picture and/or other version.
(v) For the foregoing purposes to use all or any part of the Property and any of the characters, plots, themes and/or ideas contained therein, and the title of the Property and any title or subtitle of any component of the Property, and to use said titles or subtitles for any motion picture or other version of adaptation whether the same is based on or adapted from the Property and/or as the title of any musical composition contained in any such motion picture or other version or adaptation.
(b) To use and exploit commercial or merchandise tie-ups and recordings of any sort and nature arising out of or connected with the Property and/or its motion picture or other versions and/or the title or titles of it and/or the characters of it and/or their names or characteristics.
(c) Copyrights/Exploitation Rights: With respect to works produced pursuant to the rights granted in subparagraph (a) above, all copyrights, neighboring rights, trademarks and any and all other Authorship and exploitation rights in the Property now or hereafter recognized in any and all territories and jurisdictions (including by way of illustration only, reproduction, distribution, adaptation, performance, fixation, rental and lending rights, exhibition, broadcast and all other rights of communication to the public) and the right to exploit such works in all media, markets and languages and in any manner now known or hereafter devised subject to Author’s Reserved Rights.
(d) Alteration Rights: The right to change, add to, delete or take from, translate, or otherwise modify the Property in any manner Production Company may in its discretion determine in connection with the Picture and other works that will embody all or part of the Property. To the fullest extent allowable under any applicable law, Author hereby irrevocably waives or assigns to Production Company its so-called “moral rights” or “droit moral”. Author expressly acknowledges that many parties will contribute to the Picture and other works that will embody all or part of the Property. Accordingly, if under any applicable law the above waiver or assignment by Author of “moral rights” or “droit moral” is not effective, then Author agrees to exercise such rights in a manner which recognizes the contribution of and will not have a material adverse effect upon such other parties.
(e) Name, Likeness, Biography, and Life Story: The right to use, in a reasonable and customary manner, Author’s Life Story. For purposes of this Agreement “Life Story” shall mean the irrevocable, exclusive, perpetual, and universal right to use Author’s name, likeness, sobriquet, voice, and biography, to depict, portray, impersonate, or simulate Author in any way whatsoever, and make use of all the incidents of Author’s life that Production Company deems in its sole discretion necessary or appropriate to produce one or more motion pictures, whether wholly or partially factual or fictional; and use any and all information and materials in Author’s possession or under Author’s control, which Author shall, at Production Company’s request, disclose and provide to Production Company freely,
completely, and candidly, including but not limited to, copies of any newspaper or magazine clippings, photographs, transcripts, journals, notes, letters, recordings, home movies, videotapes, books, or other physical materials relating to Author’s life story and all of all Author’s thoughts, observations, recollections, reactions and experiences surrounding, arising out of, or concerning all of those events, circumstances, and activities relating to Author’s life story (all of the aforementioned rights hereinafter collectively referred to as “Life Story”).
(f) Rental Right: Author acknowledges that the assignment by Author hereunder also includes, without limitation, the assignment, on Author’s own behalf and on behalf of Author’s heirs, executors, administrators and assigns, in perpetuity, of all rental and lending rights (including any right to equitable remuneration) under national laws (whether implemented pursuant to the Economic Community Rental and lending Rights Directive or otherwise) to which Author may now be or hereafter become entitled with respect to the Property and all versions thereof, and Author acknowledges that the consideration hereunder includes consideration for all such lending and rental rights and is an adequate part of the revenue derived or to be derived from said rights and constitutes equitable remuneration.
(g) General Public Rights: The rights herein granted by Author to Production Company are in addition to, and this Agreement shall in no way limit, the rights with respect to the Property or the subject matter thereof which Production Company may now or hereafter enjoy as a member of the general public.
(h) No Obligation to Proceed: Nothing contained in this Agreement shall be construed as requiring Production Company to exercise or exploit, or continue to exercise or exploit, any of the rights herein granted.
All rights, licenses, privileges and property herein granted Production Company shall be cumulative and Production Company may exercise or use any or all said rights, licenses, privileges or property simultaneously with or in connection with or separately and apart from the exercise of any other of said rights, licenses, privileges and property.
If Author from now on makes or publishes or permits to be made or published any revision, adaptation, translation or dramatization or other versions of the Property, then Production Company shall have and Author hereby grants to Production Company without payment therefore all of the same rights therein as are herein granted Author.
The terms ‘Picture’ and “Pictures’ as used herein shall be deemed to mean or include any present or future kind of motion picture production based upon the Property, with or without sound recorded and reproduced synchronously with it, whether the same is produced on film or by any other method or means now or from now on used for the production, exhibition and/or transmission of any kind of motion picture productions.
6. Reserved Rights:
Author reserves the following rights (the “Reserved Rights”) in the Property, subject to the terms and conditions set forth below, it being expressly acknowledged and agreed that Author shall have the tight to revoke the non-exclusive rights provided to the Production Company, to execute any exclusive deal from a “more favorable” agreement.
In such case, the Author must provide written notice in any form (regularly by email provided in the transaction details via the ScreenExchange invoice) thirty (30) days before exercising the MFN (most-favored-nation) agreement.
The agreement cannot affect any work currently in production, or that has been produced under any previous agreement this contract awards. To be clear, any work completed before the MFN agreement cannot be included or “grandfathered” in towards any terms of the MFN agreement, without written consent from the rights holder(s) applicable to the Work.
Once the Author exercises their right to revoke rights from the Production Company(ies), no further rights can be exploited on any future derivatives, sequels, spin-offs, remakes etc. by the Production Company without written consent from the authorized rights holder.
(a) Publishing Rights: The following publishing rights in the Property, except that Production Company shall have the right to publish excerpts from and summaries of the Property, or any motion picture or other versions thereof based upon the 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 the Picture or other productions produced pursuant to the Rights granted hereunder) and “making-of-the- movie” and “coffee-table” type books relating to the Picture, provided that no such publication shall contain excerpts or summaries in excess of 7,500 words in the aggregate (not to be serialized) taken from the Property. The foregoing limitation on serializing is not intended to and shall not preclude Production Company’s publication of advertising and/or publicity materials in installments.
(i) Print Editions: The right to publish print editions of the Property in book form, whether hardcover or softcover and in magazines or other periodicals, whether in installments or otherwise, it being acknowledged that unless the Property has heretofore been published in comic book or comic strip form, the right to publish comic books and/or comic strips shall be deemed included within the merchandising rights granted to Production Company in Paragraph 5(a) hereof.
(ii) Recorded Readings: The right to publish recorded readings by a single narrator of the text of published print editions of the Property in the form of audiocassettes, audio disks or similar audio-only devices individually purchased by the end-user.
(iii) Electronically Read Editions: The right to publish the text of published print editions of the Property in the form of CD-ROM, DVD, videocassette tape or similar electronically read devices individually purchased by the end-user. Such electronically read editions may not contain visual images (other than the text) or audio tracks of any kind.
Production Company shall take all steps necessary to protect the copyright in the Property as it may be contained in any publication by Production Company. With respect to any excerpts from the Property (if any) used by Production Company as aforesaid, Production Company shall identify Author as the author of the Property from which the excerpts were taken, but any summaries of the Property (as distinguished from actual excerpts) shall not be attributable to Author.
(b) Stage Rights: Subject to subparagraphs (e) and (f) below, the right to perform the Property or adaptations thereof on the live stage with actors appearing in person in the immediate presence of the audience (including the right to record a cast album) provided no broadcast, telecast, photography or the reproduction of such performance is made, except for archival purposes and for the use of customary minor excerpts in award programs and for advertising and publicity purposes solely in connection with the exploitation of such stage rights.
(c) Radio Rights: Subject to subparagraphs (e) and (f) below, the right to produce for and broadcast on radio audio-only versions of the Property and adaptations thereof; provided, however, that Production Company shall have the right to broadcast on radio excerpts from (not to be serialized) and publicity regarding the Property for advertising and publicity purposes only (and not for sale or resale) and only in connection with the exercise of the Rights granted to Production Company hereunder; provided, however, that any such excerpts contained in a radio broadcast shall be limited to 3 minutes in length. The foregoing limitation on serializing is not intended to and shall not preclude Production Company’s broadcast of advertising or publicity materials in installments.
(d) Author Written Sequels: Subject to subparagraphs (e) and (f) below, the right to write and publish printed versions of author written sequels to the Property, whether hardcover or softcover and in magazines or other periodicals, whether in installments or otherwise. An author written sequel is a work of authorship, whether created by or under license from Author before or after the creation of the Property, using one or more of the characters appearing in the Property participating in different events from those found in the Property.
(e) Holdbacks: Except for publishing rights, Author shall not exercise or exploit, or suffer or knowingly permit the exercise or exploitation of, any of the Reserved Rights until seven (7) years after the first general release of the Picture in the United States, or ten (10) years after the date of exercise of the option by Production Company, whichever occurs first. Further, Author agrees that if Author writes a work which is an author written sequel to the Property, Author will not dispose of or exploit rights in such author written sequel corresponding or equivalent to the Rights (the “Equivalent Rights”) or to the Reserved Rights other than publishing rights (the “Equivalent Reserved Rights”) until seven (7) years after the first general release of the Picture in the United States or ten (10) years after the date of exercise of the option by Production Company, whichever occurs first, it being acknowledged and agreed that, with respect to the Equivalent Rights, Author’s right to do so is in any case limited to new characters and material contained in such author written sequel and not previously contained in the Property.
(f) First Negotiation: If Author at any time proposes to negotiate with any party for the license, exercise or other disposition of any or all of the Reserved Rights (other than publishing rights), or the Equivalent Rights or the Equivalent Reserved Rights, Author shall give Production Company notice thereof and an opportunity to so negotiate prior to Author so negotiating with any third party. If Production Company elects to so negotiate, Author and Production Company shall negotiate in good faith for a period of not less than sixty (60) days from the commencement of such negotiations, and if an agreement does not result therefrom Author may thereafter negotiate with any third party.
If Author is at any time prepared to enter into an agreement with a third party for the license, exercise or other disposition of any or all of the Reserved Rights (other than publishing rights), or the Equivalent Rights or the Equivalent Reserved Rights, Author shall, before entering into such agreement, give Production Company notice of the proposed terms thereof (and all modifications of such terms) and the party involved. In each instance, Production Company shall then have ten (10) business days in which to elect to acquire the rights involved on the terms contained in the notice.
7. Representations and Warranties:
Author hereby represents and warrants that: (a) the Property was written solely by and is original with Author; (b) the Property is not based in whole or in part on the life of any real person other than Author; (c) neither the Property nor any element
thereof infringes the copyright in any other work; (d) the Property does not violate the rights to privacy or publicity of any person or constitute a defamation against any person, or in any other way violate the rights of any person whomsoever; (e) Author owns all rights assigned to Production Company free and clear of any liens, encumbrances, other third party interests of any kind, and, to the best of Author’s knowledge, free of any claims or litigation, whether pending or threatened; (f) Author has full right and power to make and perform this Agreement without the consent of any third party; (g) Author has not previously authorized or consented to exploitation of the Property as a motion picture production (including without limitation television, video and internet productions) or in any other form of audiovisual exploitation and, to the best of Author’s knowledge, the Property has not previously been so exploited; and (h) without limiting Production Company’s rights to do so, Author will maintain copyright protection in the Reserved Rights. The term “person” as used in this Agreement shall mean any person, firm, corporation or other entity. Author shall indemnify Production Company against any liability, damages, costs and expenses (including outside attorneys’ fees and expenses) incurred by Production Company by reason of any claim which if true would constitute a breach of any of Author’s representations, warranties and/or agreements contained in this Agreement. Upon presentation of any such claim to Author, or the institution of any such action naming either or both of the parties as defendants, Author shall promptly notify Production Company thereof. In any such claim or action, Author may engage independent counsel, at Author’s sole cost and expense, and said counsel may participate on Author’s behalf, provided that Production Company shall be entitled to maintain control of the conduct of the defense of any such claim or action. Production Company shall have the right to adjust or settle any such claim or action as it may determine in its sole discretion in good faith without affecting the foregoing indemnity.
8. Additional Documents:
At Production Company’s request, Author will execute, acknowledge and deliver to Production Company any and all additional documents which Production Company may reasonably deem necessary to evidence and effectuate the purposes of this Agreement including, without limitation short-form options and assignments in the form attached hereto. Author hereby irrevocably appoints Production Company as attorney-in-fact with full power to execute, acknowledge, deliver and record in the U.S. Copyright Office and elsewhere any and all such documents which Author fails to execute within five (5) business days after Production Company’s request therefor. The appointment shall be a power coupled with an interest.
Concurrently with or promptly after execution by Author of this Agreement, and as a condition to payment by Production Company hereunder, Author will deliver to Production Company a Publisher’s Release, which is attached to this Agreement as Exhibit “A” and hereby incorporated by this reference, and executed by an authorized signatory of each party to whom Author has granted publishing rights in the Property.
Author shall receive a credit on screen on a separate card in the main titles (meaning the credits, whether before or after the body of the Picture) of all positive prints of the Picture in connection with the WGA (Writers Guild of America) standards (subject to applicable guild requirements). No casual or inadvertent failure by Production Company to accord such credit, nor the failure for any reason by third parties to comply with the provisions of this paragraph, shall be deemed a breach hereof by Production Company.
10. Irrevocability and No Equitable Relief:
All rights granted and agreed to be granted to Production Company under this Agreement shall be irrevocably vested in Production Company in perpetuity, including without limitation, for the full term of copyright protection everywhere in the world and any and all renewals, extensions and revivals thereof.
No breach by Production Company of this Agreement shall entitle Author to equitable relief, whether injunctive or otherwise, against or with respect to the Picture or any other works produced pursuant to the Rights granted hereunder or their exploitation, it being acknowledged and agreed that Author’s remedy of money damages in accordance with the dispute resolution provisions set forth below is adequate. If the rights granted to Production Company hereunder should revert to Author pursuant to the provisions of any copyright law or similar law.
If the Author at any time thereafter is prepared to enter into an agreement with a third party for the exclusive license, exercise or other disposition of all or any of such rights, Author shall, before entering into such agreement, give Production Company notice of the proposed terms thereof (and all modifications of such terms) and the party involved. In each instance, Production Company shall then have thirty (30) business days in which to elect to acquire the rights involved on the terms contained in the notice.
If the Production Company(ies) fail to respond within thirty (30) business days, Author reserves the right to revoke all rights granted to Production Company, and Author forfeits all payments & conditions required by the terms of this agreement.
Production Company shall have a limited, non-exclusive, non-transferable right to the Author’s Work.
12. Force Majeure:
“Force Majeure” means any fire, flood, earthquake, or public disaster; strike, labor dispute or unrest; embargo, riot, war, insurrection or civil unrest; any act of God, any act of legally constituted authority; or any other cause beyond the Production Company’s control which would excuse Production Company’s performance as a matter of law. If because of force majeure, Production Company’s performance hereunder is delayed or prevented then the option period provided herein and any performance by purchase shall be extended for the time of such delay or prevention.
Any dispute under this Agreement will be resolved by final and binding arbitration under the Independent Film & Television AllianceTM Rules for International Arbitration in effect as of the effective date of this Agreement (“IFTATM Rules”). Each party waives any right to adjudicate any dispute in any other court or forum, except that a party may seek interim relief before the start of arbitration as allowed by the IFTATM Rules. The parties will abide by any decision in the arbitration and any court having jurisdiction may enforce it. The parties agree to accept service of process in accordance with the IFTATM Rules and agree that service in accordance with the IFTATM Rules satisfies all requirements to establish personal jurisdiction over the parties.
(a) Entire Agreement: Except as herein expressly provided, this Agreement, including all Exhibits hereto, cancels and supersedes all prior negotiations and undertakings relating to the Property and contains all terms and conditions, pertaining to the subject hereof. If there is any
conflict between any provision of this Agreement and any present or future statute, law, ordinance, regulation or collective bargaining agreement the latter shall prevail; provided, that the provision hereof so affected shall be limited only to the extent necessary and no other provision shall be affected.
(b) Notices: All written notices which either party hereto is required or may desire to give to the other shall be given by delivering or mailing the same to the other at the address shown hereinabove, or at such other address as may be designated in writing in a notice to the other given as aforesaid. Notices shall be sufficiently given when hand-delivered or when the same shall be deposited so addressed, postage prepaid, in the United States mail and/or when the same shall have been transmitted by facsimile or similar means and the date of said delivery, mailing or transmission shall be the date of the giving of such notice.
(c) Governing Law/Dispute Resolution: This Agreement shall be construed in accordance with the laws of the State of Virginia applicable to agreements executed and wholly performed within said state and the parties consent to the exclusive jurisdiction of the state and federal courts thereof with respect to any and all disputes arising under this agreement or related to its subject matter.
(d) Relationship of the Parties: This Agreement is not a partnership between or joint venture of the parties hereto and neither party is the agent of the other. This Agreement is not for the benefit of any third party, whether or not referred to herein. Paragraph headings and organization are for convenience only and shall not be used to construe meaning. A waiver of any breach shall not waive a prior or subsequent breach. All remedies shall be cumulative and pursuit of any one shall not waive any other. This Agreement may be signed in counterparts, each of which shall be deemed an original, but all of which together shall constitute the Agreement.