Option Purchase Agreement

Dear  :

This will letter will confirm the terms of the agreement (the “Agreement”) between you (“Owner“) and  Producer, Company, (“Producer”) regarding the literary property written and owned by Owner including and related to the Series Bible “[Title of Work]”, including the title and all themes, plots, contents, characters, stories, elements, translations, adaptations, and versions thereof in existence or hereafter written or created by Owner or under Owner’s authority (collectively, the “Property”). Owner and Producer hereby agree as follows:

CONDITIONS PRECEDENT. Producer’s obligations under this Agreement are conditioned upon the following:

A. The parties entering into and signing this Agreement and Owner signing the Short Form

Option attached hereto.

B Producer’s receipt and approval of any chain of title documents with respect to the Property.

C. Producer’s receipt of the signed and notarized Short Form Option (attached hereto) upon signature of this Agreement.

1. OPTION. 

Owner hereby grants to Producer the exclusive and irrevocable right and option (the “Option”) to purchase all right, title and interest in and to the Property -such rights are more fully described in Section 6 below.

2. OPTION PERIOD.

The initial option period shall commence as of the date of this Agreement continue for six (6) months after the date on which the Conditions Precedent are satisfied. 

Producer will have the right to extend the initial option period for an additional eighteen (18) months by written notice to Owner at any time prior to the expiration of the initial option period. The initial option period as extended is referred to herein as the “Option Period.”

2.2 The Option Period shall be automatically extended:

2.2.1 For the duration of any period during which a claim with respect to the Property has been asserted and remains unresolved, and during any period during which Producer’s development activities based upon the Property are interrupted or postponed due to the occurrence of any event of force majeure, including, but not limited to, any strike or labor dispute, but in no event shall the Option Period be extended for an aggregate of more than three (3) months and may not be extended for the same claim more than once. Producer shall promptly notify Owner in writing if the Option Period is to be automatically extended.

2.2.2 For the duration of any proven and uncured material breach or default by Owner of any representation, warranty or agreement made hereunder, or of any claim or litigation asserted against Owner and/or Producer relating to the Property which interferes with Producer’s development, financing, production or exploitation of the rights granted hereunder and such additional time as is reasonably necessary for Producer to recommence its development of the Property.

2.2.3 If the last day of the Option Period falls on a Saturday, Sunday, or holiday, the Option Period shall continue through and including the next business day following such Saturday, Sunday or holiday (as used herein, “holiday” means any holiday which is recognized by the State of New Mexico or the United States government).

3.1 For 6 month option the amount of $  payable upon execution of this Agreement and satisfaction of the Conditions Precedent. 

3.2 For 18 month option extension the amount of $ payable upon Option Period extension for additional 18 months.

3.3 Purchase Price An amount equal to  % of the below-the-line approved budget, with a floor of $  to be paid to the owner upon written notice of OPTION TO  PURCHASE for production of Pilot and the series bible (series guide) of  the Property.  Payment of the floor amount upon notice to purchase, then any additional payment within 30 days of principal photography commencement. Owner’s representative will have the right to examine, in writing, a full and accurate accounting of the below-the-line budget before accepting the purchase price.

3.4 BONUS COMPENSATION: Producer shall pay Owner an amount equal to 3% of one hundred percent (100%) of the Producers Share of Net proceeds from any production based on the Work for which Producer receives any other payment under this agreement for, and paid in the same manner for Owner as for Producer, whether Producer’s contingent compensation is called Net Profit, Adjusted Grosse Profits or otherwise.

3.5 WRITING FEES:

REWRITES: Owner will have the right of the first refusal to execute re-writes. Owner will provide a polish (changes in dialogue, narration or actions) at no additional cost. Owner will be paid $  per rewrite (significant plot, story and character changes) on the Pilot or re-write on subsequent episodes written solely by the Owner.

EPISODE WRITING: Owner fee for writing an episode $ .

3.6 SUBSEQUENT PRODUCTIONS: PASSIVE ROYALTIES: Royalties of ½ purchase price for sequels and prequels, 1/3 for remakes, and customary fee of ½ of spin-off per episode. 

4. RIGHT TO ENGAGE IN DEVELOPMENT ACTIVITIES. Owner agrees that throughout

the Option Period, Producer shall have the right, but not the obligation to negotiate for and enter into agreements relative to the financing, production and distribution or other exploitation of the Property and to do any and all other acts customarily done by producers in connection with the development and pre-production of motion pictures or other audio-visual works. 

5. CREDIT. 

5.1 Subject to Owner not being in material breach of this Agreement and subject to any collective bargaining agreement rules governing credit (if applicable), Owner shall receive standard and customary credit as the creator of and writer of. No casual or inadvertent failure or Producer or any third party to comply with these credit terms shall be a breach of this Agreement. Upon receipt of written notice from Owner of such failure, Producer agrees to use its best efforts and take reasonable steps to cure such failure on a prospective basis.5.2 OWNERS ATTACHMENT: Once option is exercised, the Owner will be attached as          co-writer to be paid per episode, the terms of the engagement shall be negotiated in good faith by both parties.

6. GRANT OF RIGHTS. Upon exercise of the Option (as may be extended) by Producer and subject to the terms of this Agreement, including Owner’s reserved rights pursuant to paragraph 6.2, Owner grants to Producer the following exclusive rights in perpetuity subject to the terms and conditions in this Agreement (the “Rights”):

6.1 Rights.  All motion picture, television (in all forms, whether free, pay, cable or otherwise),

audio visual, home video (by means of cassettes, discs and all other devices whether now or hereafter known), interactive and computer driven format rights, and allied, subsidiary and derivative rights, including, without limitation, sequel and remake rights, merchandising and commercial tie-up rights, rights to the title and characters contained in the Property, and promotional and advertising rights, in all languages, for the entire universe. Without limiting the generality of the foregoing, (a) Producer shall have the sole and exclusive right to copy, publicly display, produce, distribute, advertise, publicize and otherwise exploit any motion picture or other audio visual production based on the Property, by any method and by any means whatsoever, whether now known or hereafter devised, (b) Producer shall have the right to copyright in Producer’s name all motion pictures or other productions or works created in the exercise of Producer’s rights hereunder, and Producer shall be the sole owner of such derivative copyrights, and  (c) Producer may (in Producer’s sole discretion) make any and all changes in, additions to, and deletions from the Property, combine same with material created by others, alter the title of the Property or use new title(s). The rights granted to Producer hereunder shall include, without limitation, those rights now or hereafter known as the “lending right” and “rental right” in and to the Property, and Owner agrees that the compensation hereunder includes an equitable payment of any sums that may hereafter become due Owner in respect of the exploitation of the lending and rental or any other rights in relation to the Property in any territory in the world.

6.2 Owner Reserved Rights. Owner reserves to Owner the right to publish and authorize

publication of the Property in book form including the right to publish graphic novels and nondramatic audio recording rights, radio broadcasts and electronic formats in text only and that do not contain any elements created by Producer in connection with the rights granted hereunder, and live stage rights based solely on the Property.

6.3 Name and Likeness/Publicity: Producer shall have the perpetual right to use and authorize others to use the name, approved voice and approved likeness of Owner and biographical information concerning Owner for advertising and publicity purposes in connection with any use or proposed use of the Property, the Picture or any other motion picture, television program or other production based on the Property; provided, however, that Owner shall not be portrayed as using or endorsing any product or service without Owner’s prior written consent. Owner shall have the right to issue or authorize publicity regarding the Property, but Owner shall not at any time issue or authorize publicity or disclose any confidential information relating to this Agreement or any work produced as a result of this Agreement or concerning Producer (as distinguished from personal publicity relating primarily to Owner which may include a nonderogatory, incidental reference to any work) to the press or media without Producer’s written consent in each case.

7. RIGHT OF FIRST REFUSAL/LAST OFFER. 

During the Option Period and if Owner is paid

the Purchase Price, then perpetually, Producer will have a right of first refusal with respecto the acquisition of the Rights in one or more literary properties written by Owner or at Owner’s

direction featuring the principal character and recurring characters in the Property (“Additional

Property(ies)”) Producer will notify Owner of its intention to acquire such Additional

Property(ies) and Owner agrees to negotiate in good faith with respect thereto. The financial

terms for acquisition of an Additional Property(ies) will be no less than the terms of this

Agreement. If Producer and Owner are unable to reach agreement, Owner will be free to

negotiate with third parties for the sale of the Rights in Additional Property(ies) provided that

upon receipt of an acceptable third party offer, Owner will promptly notify Producer and

Producer will have ten (10) business days in which to match such third party offer and acquire

the Rights in the Additional Property(ies). If Producer elects not to acquire an Additional

Property(ies), Owner’s Rights as set forth in paragraph 6 above and solely with respect to the

rights in the characters, will become non-exclusive.

8. REPRESENTATIONS AND WARRANTIES/INDEMNITY. Owner hereby represents and

warrants that:

8.1 Owner is the sole owner of all of the rights herein granted to Producer in and to the

Property, and Owner has the full and sole right and authority to enter into this Agreement and

convey all of the rights hereby conveyed to Producer.

8.2 The Property is wholly original with Owner in all respects (except material in the public

domain) and no part thereof has been copied from any other copyrighted literary, dramatic or

musical material or any motion picture or television production and its use hereunder by

Producer will not in any way infringe upon or violate any copyright, common law rights, literary,

dramatic or motion picture rights or other rights, or constitute a defamation or invasion of the

rights of privacy and/or publicity, of any person, firm or corporation.

8.3 No part of the rights herein conveyed to Producer has in any way been encumbered,

conveyed, granted or otherwise disposed of, and the same are free and clear of any liens or

claims, and there are no claims or litigation pending, outstanding or threatened which might in

any way prejudice, interrupt or interfere with the use by Producer of the rights transferred

hereunder.

8.4 The Property has been registered or is qualified to be registered for copyright in the

United States and, to the best of Owner’s knowledge (including that which Owner should have

known with the exercise of reasonable prudence) is protected elsewhere so far as the laws of

other countries provide for such protection.

8.5 Owner will sign additional copies of the Short Form Assignment and will sign such other

documents as Producer deems reasonably necessary to evidence the transfer of the Rights as

specified hereunder.

8.6 The foregoing representations and warranties are made by Owner to induce Producer to

exercise this Agreement and Owner acknowledges that Producer has executed this Agreement

in reliance thereon.

9. INDEMNITY.

9.1 Owner hereby agrees to indemnify and hold Producer and its employees, agents,

successors, licensees and assigns, harmless from and against any and all liabilities, claims,

costs, damages or expenses (including, without limitation, reasonable attorneys’ fees) arising

out of or in connection with a breach by Owner of any warranties, representations or

agreements contained in this Agreement.

9.2 Producer hereby agrees to indemnify Owner against any liability, loss, damage, cost or

expense (including reasonable outside attorneys’ fees) incurred by reason of any claim arising

from the development, production, distribution or exploitation of the Rights (other than with

respect to those claims for which Owner is required to indemnify Producer as provided above

and claims arising out of Owner’s gross negligence or tortuous conduct).

10. REMEDIES. 

Owner agrees that the rights and privileges granted to Producer hereunder are of a special, unique, unusual, extraordinary and intellectual character involving skill of the 

highest order which gives them a peculiar value, the loss of which cannot be reasonably or

adequately compensated by damages in an action at law, and that a breach by Owner of any of

the provisions contained herein will cause Producer to suffer irreparable injury and damage.

Owner hereby expressly agrees that Producer will be entitled to seek injunctive and other

equitable relief to prevent or cure any breach of this Agreement by Owner. Resort by Producer

to injunctive or equitable relief, however, will not be construed as a waiver of any of the rights

which Producer may have against Owner for damages or otherwise. The waiver by either party

of any breach hereof shall not be deemed a waiver of any prior or subsequent breach hereof. All

remedies of either party shall be cumulative and the pursuit of one remedy shall not be deemed

a waiver of any other remedy. Notwithstanding the foregoing, in the event of any breach or

alleged breach of this Agreement by Producer, Owner’s sole right shall be to seek the recovery

of money damages, and Owner shall not have the right to terminate or rescind this Agreement

or in any way to enjoin or restrain the development production, distribution, exhibition,

advertising or exploitation of any works based on the Property.

11. NO OBLIGATION TO PROCEED. Nothing contained herein shall in any way obligate

Producer to exploit the Rights or produce works based on the Property.

11.5  REVERSION (TURNAROUND):  If Producer exercises the Option and fails to commence principal photography within seven (7) years thereafter, Owner may send Producer written notice that the rights will revert to Owner unless principal photography commences within ninety (90) days of the receipt of such notice.

12. ASSIGNMENT. Producer shall have the right to assign this Agreement, in whole or in

part, in any manner and to any party as Producer shall determine in Producer’s sole discretion;

provided that no such assignment shall relieve Producer of Producer’s obligations hereunder

unless such obligations are assumed in writing by a financially responsible party.

13. ADDITIONAL DOCUMENTS. Owner shall deliver to Producer the Short Form Option

duly executed by Owner in accordance with the terms hereof and at Producer’s request, any

and all further assignments and other instruments reasonably necessary to carry out the

purposes and intent of this agreement. Owner hereby irrevocably appoints Producer the true

and lawful attorney-in-fact of Owner (it being acknowledged that such appointment is irrevocable and shall be deemed a power coupled with an interest) to execute, acknowledge

and deliver any such assignment or instrument if Owner shall fail or refuse to execute,

acknowledge or deliver the same within five (5) business days after Producer’s request therefor.

14. NOTICES AND PAYMENTS. All notices hereunder shall be in writing and shall be deemed given hereunder on the date delivered by hand, overnight delivery service or email or a date three (3) business days after the date mailed, emailed or delivered. Until further notice, the

addresses of the parties for notice and payment shall be as follows:

15. MISCELLANEOUS.

15.1 Owner acknowledges that this agreement is not subject to any collective bargaining

agreement.

15.2 The titles of the paragraphs of this agreement are for convenience only and shall not in

any way affect the interpretation of this agreement.

15.3 This Agreement shall be governed by and construed in accordance with the laws of the

State of New Mexico applicable to contracts entered into and fully performed therein. The venue

for any action, suit or proceeding arising from or based upon this agreement shall be the

appropriate state and federal courts located in the State of New Mexico.

15.4 Owner acknowledges that Owner has entered into this Agreement with Producer in

entire reliance upon Owner’s own judgment or on the advice of Owner’s representatives and

has in no way relied upon any representation made by Producer or Producer’s representatives.

15.5 This Agreement contains the entire understanding of the parties hereto relating to the

subject matter hereof and supersedes any prior understandings or agreements of the parties.

Owner acknowledges that no representation or agreement not expressly contained in this

Agreement has been made by Producer or any of Producer’s agents, employees or

representatives. This Agreement may not be modified or amended except in writing signed by

the party to be charged.

15.6 Counterparts. This agreement may be signed in counterparts. Facsimile and scanned copies shall be deemed originals for all purposes.

THIS IS AN IMPORTANT LEGAL DOCUMENT. BY SIGNING BELOW, OWNER

ACKNOWLEDGES THAT: (i) OWNER HAS REVIEWED THIS AGREEMENT WITH THEIR INDEPENDENT LEGAL COUNSEL OR HAS KNOWINGLY AND WILLINGLY DECLINED THE OPPORTUNITY TO REVIEW IT WITH SUCH COUNSEL, (ii) OWNER’S FAILURE TO EVIEW THIS AGREEMENT WITH THEIR LEGAL COUNSEL SHALL IN NO WAY IMPAIR THE LEGALLY BINDING NATURE OF THIS AGREEMENT, (iii) THIS AGREEMENT HAS BEEN COMPLETELY READ BY OWNER, AND (iv) OWNER FULLY UNDERSTANDS AND VOLUNTARILY ACCEPTS ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT.

If you are in agreement with the foregoing, please so indicate by signing below.

Very truly yours,

By:

 ____________________________________ Date__________________

ACCEPTED AND AGREED TO:

By:

  _________________________________ Date__________________

SHORT FORM OPTION

For good and valuable consideration, receipt of which is hereby acknowledged, the undersigned, 

  (“Owner”), hereby grants to   (“Producer”) and its representatives, heirs, successors and assigns, the sole and exclusive, irrevocable option to purchase the Rights as

described in the Agreement in and to the original literary property (“Property”) described as

follows:

Title: “[Title of Work]”

Created by:   

Written by:  

Published by:

Date of Publication:

Copyright:

The Property includes but is not limited to: all plots, themes, titles, dialogue, language,

incidents, action, story, characters and copyrights thereof and all renewals and extensions of

such copyright, and any translations, dramatizations, sequels, remakes and other

adaptations or versions thereof, now made or hereafter created, made or permitted to be made

by the undersigned.

This instrument is executed in accordance with and is subject to the Option Purchase

Agreement between the undersigned and the Producer (the “Agreement”), relating to the option granted to the Producer to purchase the above-mentioned rights in the Property, which rights are more fully described in said Agreement. All of Producer’s obligations pursuant to the Agreement and Producer’s obligation to pay the purchase price set forth in the Agreement shall be contingent upon Owner’s execution hereof.

IN WITNESS WHEREOF, the undersigned has executed this Short Form Option as of

Date:________________________

OWNER:   _____________________________________

(Notarize here)

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