OPTION AGREEMENT FOR RIGHTS TO ORIGINAL SCREENPLAY THIS AGREEMENT made effective as of the _____ day of ______________, _______. BETWEEN: [NAME OF PRODUCER/PRODUCTION COMPANY] a body corporate incorporated under the laws of _______ / a partnership consisting of _____________ [revise to fit the circumstances] (“Producer”) - and [NAME OF SCREENWRITER] an individual resident in the City of ______, _______ (“Writer”) THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: 1. Grant of Option Writer hereby grants to Producer the exclusive and irrevocable right and option to purchase from Writer all motion picture, television, ancillary, exploitation and merchandising rights (“Rights”) to an original screenplay written by Writer, entitled ”___________________________” (the “Work”). 2. Term of Option; Consideration (a) The term of the option (“Option”) shall be for a period of ______ year(s) from the date of execution of this Agreement. (b) The Producer agrees to pay an option fee of $_____ within ___ business days of execution of this agreement, which shall be applied against the Purchase Price. (c) At any time prior to the expiration of the initial option period, Producer may extend the Option for an additional period of _________ year(s) by written notice to Writer and upon payment to Writer of an additional $________, which shall be applied against the Purchase Price (as hereinafter defined). (d) If Producer has obtained a development and/or production commitment, Producer or its assignee shall have the right to further extend the Option for one additional period of ____ [month(s)/year], upon payment to Writer of an additional $__________. 3. Compensation If Producer exercises its option or any extension thereof, it is agreed that: (a) Writer shall grant to Producer the right to produce an original motion picture based on the Work, including remakes and sequels, television motion picture and series rights, and 7,500 word publication rights for advertisement, publicity and exploitation purposes. (b) Producer or its assignee shall pay Writer a purchase price (“Purchase Price”) of _____________________ DOLLARS ($______), or (___%)of the direct cost budget of the Picture, with a floor of _____________________ DOLLARS ($______) and a ceiling of _____________________ DOLLARS ($______). The term “direct cost budget” shall be deemed to mean the final approved (and bonded, if a completion guarantor guarantees completion) “going in” budget of the Picture, excluding all finance costs, interest charges, completion bond fees, contingency amounts and deferments. -2- (c) In addition to the aforesaid Purchase Price, Writer shall receive bonus compensation as follows: (i) if a motion picture is produced based on the Work with a final production budget of _____________________ DOLLARS ($______) or more, and if Writer receives sole or shared screenplay credit, a bonus of _____________________ DOLLARS ($______) shall be paid to Writer ____ days after the day that principal photography commences; (ii) if a motion picture is produced based on the Work, and if Writer receives sole or shared screenplay credit, and if the motion picture generates U.S. theatrical box office receipts of _____________________ DOLLARS ($______) or more in the first year of theatrical release, an additional bonus of _____________________ DOLLARS ($______) shall be paid to Writer. (d) For any sequel produced based on the Work, in whole or in part, Producer will pay Writer onehalf (1/2) of the original compensation payable under sub-clauses (a) and (b) of this Section; and for any remake produced based upon the Work, in whole or in part, Producer will pay Writer one-third (1/3) of the original compensation under sub-clauses (b) and (c) of this Section. The compensation described in sub-clause (b) shall be paid to Writer upon commencement of principal photography of any such sequel or remake. (e) For any television series produced based on the Work, Producer will pay Writer the following royalties per initial production upon completion of production of each program: ______________________ DOLLARS ($_________________) up to 30 minutes; ______________________ DOLLARS ($_________________) over 30 minutes, but not more than 60 minutes; ______________________ DOLLARS ($_________________) over 60 minutes; and in addition to the foregoing, one hundred percent (100%) of the applicable initial royalty amount, as a buy-out of all royalty obligations, to be paid in equal installments over _____ reruns, payable within _________ days after each such rerun, or subject to Writers Guild of America (“WGA”) minimum, whichever is greater. (f) Producer shall pay Writer a percentage participation of four (4%) percent of one hundred (100%) percent of the net profits (including all allied rights and exploitation of ancillary markets) of each motion picture and television program or series based on the Work if Writer receives sole screenplay credit. If Writer receives shared credit, they shall receive two (2%) percent of one hundred (100%) percent of the net profits. The net profits shall be defined in the same as the net profit participation granted to Producer. (g) If in Producer’s sole discretion, Producer decides to have the script rewritten, Writer will be offered the first opportunity to be employed to do a rewrite for a flat fee of ______________________ DOLLARS ($______), which shall be full and complete compensation for Writer. Producer shall have no obligation to employ Writer for any subsequent rewrites or polishes. Any work created by Writer for such a rewrite shall be a work for hire and all rights to Writer’s work shall be owned by Producer or its assigns. (h) All the sums set forth as compensation in this Section are for the total amount of monies payable by Producer. Unless Writer instructs Producer otherwise, sums shall be payable __________ (___%) percent to each Writer. 4. Representations and Warranties of Writer Writer represents and warrants to Producer that: (a) Writer has sole and exclusive ownership of all rights of every kind and character throughout the world in and to the Work, free and clear of any liens, encumbrances, claims, or litigation, whether pending or threatened; -3- (b) the Work was written solely by and is original to Writer; (c) neither the Work nor its exploitation will violate the rights to privacy or publicity of any person or constitute defamation or libel against any person, or in any other way violate the rights of any person whomsoever; (d) Writer has not sold, transferred, optioned or otherwise disposed of the Rights; (e) Writer has the full right and power to enter into and to perform this Agreement and to grant the rights granted hereunder; (f) the Work has not previously been exploited as a motion picture, television production, play, or otherwise, and no rights have been granted to any third party to do so; (g) Writer has not and will not do anything that might interfere with the grant of the Option to Producer under this Agreement. Writer hereby indemnifies Producer against any loss or damage (including reasonable attorney’s fees) incurred by any reason of breach or claim of breach of the foregoing representations and warranties. The term “person” as used herein shall mean any person, firm, corporation or other entity. 5. Rights Acquired and Reserved (a) The Option granted hereunder covers the sole, exclusive, perpetual, and worldwide motion picture, television and allied and incidental rights in the Work and any and all screenplays or other adaptations thereof, whether heretofore or hereafter written by Writer or any other person, including theatrical, television (whether filmed, taped, or otherwise recorded, and including series rights), cassette and other compact devices, sequel, remake, and advertising rights (including 7,500 word synopsis publication rights); all rights to exploit, distribute and exhibit any motion picture or other production produced hereunder in all media now known or hereafter devised; all rights to make any and all changes to and adaptations of the Work; merchandising, soundtrack, music publishing, and exploitation of the rights granted hereunder; and all other rights customarily obtained in connection with formal literary purchase agreements. (b) Producer hereby acknowledges that Writer reserves live television, radio, book publication, and legitimate stage rights, subject to Producer’s customary limited advertising and promotion rights. (c) Writer will not exercise or dispose of, or permit the exercise or disposition of such reserved rights for a period of _____ (___) years after the release of the first motion picture based on the Work, or ____ (___) years from the date on which Producer exercises its option, whichever first occurs. THIS IS AN 11-PAGE DOCUMENT, including any schedules or attachments. Get the full form at: www.megadox.com/d/7151