This agreement (hereinafter referred to as the "Agreement") is made by and between John Q. Screenwriter (hereinafter referred to as the "Screenwriter") and Dave W. Producer hereinafter referred to as the "Producer") on this the 8th day of June, 1992 and relates to that one certain literary property acquisition agreement by and between the same parties and dated on June 1, 1992 (hereinafter referred to as the "Acquisition Agreement"). Said Acquisition Agreement provides for the terms and circumstances under which the Producer has acquired the right to develop and produce a motion picture (hereinafter referred to as the "Project") based on the Screenwriter's literary property entitled "Invasion From Chunga" (hereinafter referred to as the "Screenplay").
1. TURNAROUND--If the Producer elects not to proceed with the further development of the Screenplay or the production of the Project, the Producer shall immediately give written notice to the Screenwriter. The Screenwriter shall then have a two (2) year period (the "Turnaround Period") from the date of delivery of such notice in which to acquire all of the right, title and interest of the Producer in the Screenplay or Project pursuant to the terms and conditions herein provided.
2. BUY-OUT PRICE--The Screenwriter shall have the exclusive right during the Turnaround Period to acquire all of the rights, title and interests of the Producer in the Screenplay and Project by reimbursing the Producer for all expenses and charges incurred by the Producer in connection with the Screenplay and Project including all monies paid to the Screenwriter (hereinafter referred to as the "Advances"), plus an administrative overhead charge of 10% of such Advances (hereinafter referred collectively as the "Investment), plus interest on the Investment computed weekly from the week in which an item of Investment was incurred until repaid to the Producer as herein provided at an annual percentage rate of 2% above the prime interest rate charged by the Chemical Bank on the date first above stated, but in no event shall interest be in excess of 12% per annum unless permitted by state law (the Investment amount plus the above stated interest is hereinafter referred to as the "Buy- Out Price").
If during the Turnaround Period, (1) the Screenwriter enters into an agreement for the development of the Screenplay or production of the Project, (2) the Screenwriter or any party with whom the Screenwriter is negotiating does or authorizes any writing to be done in connection with the Screenplay or Project or (3) the Screenwriter or any party with whom the Screenwriter is negotiating commences or authorizes the commencement of photography on the Project, the Screenwriter will upon the occurrence of such an event, pay the Producer the Buy-Out Price and furnish to the Producer an indemnity agreement, in a form reasonably satisfactory to the Producer, signed by a party having financial responsibility reasonably satisfactory to the Producer, covering all obligations and liabilities in connection with the Screenplay and Project. Upon receipt of said Buy-Out Price and the above mentioned indemnity, the Producer will quitclaim its right, title and interest in the Screenplay and Project to the Screenwriter, and the Producer will warrant that the Producer has not theretofore transferred, hypothecated or otherwise disposed of any or its rights, title and interests in the Screenplay or Project.
3. FIRST REFUSAL PROCEDURE--If, prior to the Screenwriter's payment to the Producer of the Buy-Out Price within the Turnaround Period, the Screenwriter introduces any significant new, or substantially alters any existing, elements ("Changed Elements") and/or introduces any significant changed terms and conditions including the financial terms regarding the Screenwriter's involvement or the involvement of the Screenwriter's Screenplay in the Project ("Changed Terms"), the Screenwriter shall prepare and present to the Producer a written description of such changed elements and terms. The Producer then shall have a period of two (2) business days after receipt thereof to reject the Screenwriter's submission of Changed Elements or Changed Terms or to elect to proceed with the development of the Screenplay and/or production of the Project predicated upon the use, presence or involvement of such Changed Elements or Changed Terms. It is hereby agreed as between the Producer and Screenwriter, however, that the election of the Producer to proceed with the development of the Screenplay or the production of the Project shall not require the acceptance of any specific Changed Element or Changed Term which cannot be honored on a financial basis or the acceptance of financial terms more favorable to the Screenwriter than the financial terms originally established in agreements between the Screenwriter and the Producer regarding the Screenplay and Project. If the Producer rejects the Screenwriter's submission of Changed Elements or Changed Terms or fails to accept such submission within the aforementioned two (2) business day period, the Screenwriter may acquire the right, title and interest of the Producer as herein provided; but the aforesaid first refusal procedure shall be repeated during the Turnaround Period each time the Screenwriter introduces Changed Elements and/or Changed Terms until the Screenwriter has paid the Buy-Out Price to the Producer.
4. REPRESENTATIONS AND WARRANTIES--The Screenwriter hereby represents and warrants that as of the date hereof, the Screenwriter has not caused any screenplays or screenplay revisions to be written in connection with the Screenplay other than those heretofore delivered by the Screenwriter to the Producer. The Screenwriter further represents and warrants that as of the date hereof, the Screenwriter has not employed, made commitments to or obtained commitments from any performer, director, writer or other personnel or parties concerning the Screenplay or Project other than those individuals and parties who have heretofore negotiated or entered into an agreement with the Screenwriter with the approval of the Producer, or with the Producer regarding the Screenplay or Project, or who have heretofore been rejected by the Producer for the Screenplay or Project.
5. ASSIGNMENTS--This Agreement and the rights granted to the Screenwriter hereunder are personal to the Screenwriter and the Screenwriter agrees not to assign any right or obligation hereunder in whole or in part or to authorize any party to undertake any actions with respect to the Screenplay or Project. After the Screenwriter has paid to the Producer the Buy-Out Price and the Producer has quitclaimed her right, title and interest in the Screenplay and Project to the Screenwriter pursuant to a Quitclaim Agreement, the Screenwriter shall have the right to freely assign such right, title and interest provided that the Screenwriter causes the assignee thereof to assume all of the Screenwriter's obligations hereunder pursuant to such Quitclaim Agreement and that the Screenwriter remains primarily liability for all such obligations.
6. EXPIRATION OF RIGHTS--If the Screenwriter does not elect to exercise the Screenwriter's rights hereunder within the Turnaround Period, the Screenwriter shall have no further right to acquire the right, title and interest of the Producer in the Screenplay or Project. In addition, the Producer shall have no obligation whatsoever to involve the Screenwriter in the further development of the Screenplay or production of the Project, and the Screenwriter shall have no further rights in the Project or in the Screenplay. Further, the Screenwriter shall execute and deliver such instruments as the Producer may reasonably require in order to effectuate the purposes and intents hereof, and the Screenwriter irrevocably grants the Producer the power coupled with an interest to execute such instruments in the Screenwriter's name.
IN WITNESS WHEREOF, the undersigned parties both acknowledge receipt of a copy of this Turnaround Agreement and both parties accept the terms and conditions set forth above.
PRODUCER:
(signature)
(printed name)
SCREENWRITER:
(signature)
(printed name)