Pacific Gold Entertainment Inc. OPTION & LITERARY PURCHASE AGREEMENT
OPTION
& LITERARY PURCHASE AGREEMENT
THIS
OPTION & LITERARY PURCHASE AGREEMENT,
made
and entered into as of July 10, 2006, by and between Pacific Gold Entertainment
Inc., having an office at #▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇, ▇▇▇▇▇▇ (“PGE”)
and
Somnambulist Imagery Inc., having an office at #6 - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ (the”
Seller”).
1. SELLER’S
REPRESENTATIONS AND WARRANTIES:
| (a) |
Sole
Proprietor:
The Seller represents and warrants to PGE that the Seller is the
sole and
exclusive proprietor, throughout the world of that certain original
literary material written by ▇▇▇▇ ▇▇▇▇ entitled SUBHUMAN (previously
known
as SHELF LIFE) (the “Literary
Property”).
|
| (b) |
Facts:
The Seller represents and warrants to PGE that the following statements
are true and correct in all respects with respect to said literary
material:
|
| (i) |
The
Seller is the sole author of the Literary
Property.
|
| (ii) |
The
Literary Property was registered for copyright in the name of SUBHUMAN,
under copyright registration number (Pending), in the Office of the
United
States Register of Copyrights, Washington,
D.C.
|
No
Motion
Picture or dramatic version of the Literary Property, or any part of it, has
been manufactured, produced, presented or authorized; no radio or television
development, presentation or program based on the Literary Property, or any
part
of it, has been manufactured, produced, presented, broadcast or authorized;
and
no written or oral agreements or commitments at all with any respect to the
Literary Property or with respect to any right therein, have previously been
made or entered by or on behalf of the Seller (except with respect to the
publication of the Literary Property as set forth above).
| (c) |
No
Infringement or Violation of Third Party Rights:
The Seller represents and warrants to PGE that the Seller has not
adapted
the Literary Property from any other literary, dramatic or other
material
of any kind, nature or description, nor, excepting for material which
is
in the public domain, has the Seller copied or used in the Literary
Property the plot, scenes, sequence or story of any other literary,
dramatic or other material; that the Literary Property does not infringe
upon any common law or statutory rights in any other literary, dramatic,
or other material; that as far as the Seller has knowledge, no material
in
the Literary Property is libelous or vocative of the right of privacy
of
any person and the full use of the rights in the Literary Property
which
are covered by the within option would not violate any rights of
any
person, firm or corporation; and that the Literary Property is not
in the
public domain in any country in the world where copyright protection
is
available.
|
| (d) |
No
Impairment of Rights:
The Seller represents and warrants to PGE that the Seller is the
exclusive
proprietor, throughout the world, of the rights in the Literary Property,
which are covered by the within option; that the Seller has not assigned,
licensed nor in any manner encumbered, diminished or impaired these
rights; that the Seller has not committed nor omitted to perform
any act
by which these rights could or will be encumbered, diminished or
impaired;
and that there is no outstanding claim or litigation pending against
or
involving the title, ownership and/or copyright in the Literary Property,
or in any part of it, or in the rights which are covered by the within
option. The Seller further represents and warrants that no attempt
hereafter will be made to encumber, diminish or impair any of the
rights
herein granted and that all appropriate protections of such rights
will
continue to be maintained by the
Seller.
|
Without
limiting any other rights PGE may have in the Literary Property, the Seller
agrees that if there is any claim and/or litigation involving any breach or
alleged breach of any such representations and warranties of the Seller, the
option period granted hereunder and any periods within which PGE may, pursuant
to the provisions of Clause 3 hereof, extend the option, will automatically
be
extended until no claim and/or litigation involving any breach or alleged breach
of any such representation and warranties of the Seller is outstanding, but
in
any event not for a period more than one additional year.
Ex
4.1 - 1
Any
time
after the occurrence of such a claim and/or litigation until the expiration
of
the option period, as extended, PGE may, besides any other rights and remedies
PGE may have in the Literary Property, rescind this agreement and in such event,
despite anything else to the contrary contained herein, the Seller agrees to
repay PGE any monies paid by PGE to the Seller hereunder concerning the Literary
Property and any reasonable amounts expended by PGE in developing or exploiting
the Literary Property. Without limiting the generality of the foregoing, the
Seller agrees that the Seller will not, any time during the option period,
exercise or authorize or permit the exercise by others of any of the rights
covered by the option or any of the rights reserved by the Seller under the
provisions of Exhibit “A”, which are not to be exercised or licensed to others
during any period therein specified.
| 2. |
CONSIDERATION
FOR OPTION:
In
consideration of the payment to the Seller of the sum of $1.00, receipt
of
which is acknowledged, the Seller agrees to and does give and grant
to PGE
the exclusive and irrevocable option to purchase from the Seller
the
rights in the Literary Property as described in Exhibit “A” for the total
purchase price specified and payable as provided in Exhibit “A”, provided
that any sums paid under this Clause 2 or any other provision of
this
agreement with respect to the option will be credited against the
first
sums payable on account of such purchase price. If PGE fails to exercise
this option, then the sums paid to the Seller hereunder with respect
to
the option will be and remain the sole property of the
Seller.
|
| 3. |
OPTION
PERIOD:
The within option will be effective during the period commencing
on July
10, 2006 and ending August 1, 2008 (the “Initial
Option Period”).
|
| 4. |
EXERCISE
OF OPTION:
|
| (a) |
Notice
of Exercise:
If PGE elects to exercise the within option, PGE (any time during
the
Initial Option Period) will serve upon the Seller notice of the exercise
of it.
|
| (b) |
The
purchase price will be paid to the Seller according to Exhibit
“A”.
|
| 5. |
EFFECTIVENESS
OF EXHIBITS “A” AND“B”:
Concurrently with the execution of this agreement, the Seller has
executed
Exhibits “A” (Literary Purchase Agreement) and “B” (Short Form Option
Agreement for Recordation), which are undated, and it is agreed that
if
PGE exercises the option (but not otherwise), then the signature
of the
Seller to Exhibits “A” and “B” will be deemed to be effective, and these
Exhibits will constitute valid and binding agreements and assignment
effective as of the date of exercise of such option, and PGE is authorized
and empowered to date such instruments accordingly. If PGE fails
to
exercise the option, then the signature of the Seller to Exhibits
“A” and
“B” will be void and of no further force or effect whatever, and PGE
will
not be deemed to have acquired any rights in or to the Literary Property
other than the option hereinabove provided for. If PGE exercises
the
option, PGE will execute and deliver to the Seller copies of Exhibit
“A”,
dated as of the date of the exercise of the option, and the Seller
will,
if so requested by PGE, execute and deliver to PGE additional copies
of
Exhibits “A” and “B”. Notwithstanding the failure or omission of either
party to execute and/or deliver such additional documents, it is
agreed
that upon the exercise of the option by PGE pursuant to the provisions
of
Exhibit “A” will be deemed vested in PGE, effective as of the date of
exercise of the option, which rights will be
irrevocable.
|
| 6. |
RIGHT
TO ENGAGE IN PRE-PRODUCTION:
The Seller acknowledges that PGE may, at its own expense, during
the
Initial Option Period, undertake pre-production activities in connection
with any of the rights to be acquired hereunder including, without
limitation, the preparation and submission of treatments and/or
screenplays based on the Literary
Property.
|
| 7. |
RESTRICTIONS:
During the Initial Option Period, the Seller will not exercise or
otherwise use any of the rights herein granted to PGE and as more
particularly described in Exhibit “A” hereof nor the rights reserved to
the Seller pursuant to Clause 2 (Rights Reserved) of Exhibit “A”, nor will
the Seller permit the use of nor will the Seller use any other right
the
Seller has reserved in a way that would in any manner or for any
purpose
unfairly compete with, interfere with or conflict with the full and
unrestricted use of the rights herein granted to PGE and as described
in
Exhibit “A”.
|
Ex
4.1 - 2
| 8. |
ASSIGNMENT:
This agreement and the rights granted hereunder may be assigned by
PGE to
any other person, firm or corporation without the consent of the
Seller,
provided the assignee accepts all the obligations of PGE under this
agreement as a condition of the
assignment.
|
| 9. |
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 PGE’s control which would excuse PGE’s performance as a
matter of law. If because of Force Majeure, PGE’s performance hereunder is
delayed or prevented, then the Initial Option period will be extended
for
the time of such delay or
prevention.
|
| 10. |
SECTION
HEADINGS:
The headings of paragraphs, sections and other subdivisions of this
agreement are for convenient reference only and they will not be
used in
any way to govern, limit, modify, construe this agreement or any
part or
provision of it.
|
| 11. |
ARBITRATION:
Any controversy or claim arising out of or in relation to this agreement
or the validity, construction or performance of this agreement, or
the
breach thereof, will be resolved by arbitration in accordance with
the
rules and procedures of the American Film Marketing Association,
as said
rules may be amended from time to time with rights of discovery if
requested from the arbitrator. Such rules and procedures are incorporated
and made a part of this agreement by reference. If the American Film
Marketing Association refuses to accept jurisdiction of such dispute,
then
the parties will arbitrate such matter before and in accordance with
the
rules of the Canadian Arbitration Association under its jurisdiction
in
Vancouver, British Columbia before a single arbitrator familiar with
entertainment law. The parties will have the right to engage in
pre-hearing discovery in connection with such arbitration proceedings
if
approved by the arbitrator. The parties hereto will abide by and
perform
any award rendered in any arbitration conducted pursuant hereto,
that any
court having jurisdiction thereof may issue a judgment based upon
such
award and that the prevailing party in such arbitration and/or
confirmation proceeding will be entitled to recover its reasonable
attorneys fees and expenses. The arbitration award will be final,
binding
and non-appealable.
|
| 12. |
ENTIRE
AGREEMENT:
This agreement, including the Exhibits attached hereto, contains
the
complete understanding and agreement between the parties with respect
to
the within subject matter, and supersedes all other agreements between
the
parties whether written or oral relating thereto, and may not be
modified
or amended except by written instrument executed by both of the parties
hereto. This agreement will in all respects be subject to the laws
of the
Province of British Columbia applicable to agreements executed and
wholly
performed within such Province. All the rights, licenses, privileges
and
property herein granted to PGE are irrevocable and not subject to
rescission, restraint, or injunction under any or all
circumstances.
|
IN
WITNESS WHEREOF, the parties hereto have signed this Option & Literary
Purchase Agreement as of the day and year first hereinabove
written.
Per: /s/
▇▇▇ Loudoun
___________________________________
BUYER:
▇▇▇ Loudoun (CFO)
Somnambulist
Imagery Inc.
Per: /s/
▇▇▇▇ ▇▇▇▇
___________________________________
SELLER:
▇▇▇▇ ▇▇▇▇ (President)
Ex
4.1 - 3
EXHIBIT
“A”
This
Literary Purchase Agreement made on July 10, 2006, by and between Somnambulist
Imagery Inc. (hereinafter the “Seller”)
and
Pacific Gold Entertainment Inc. (hereinafter “PGE”).
WITNESSETH
WHEREAS,
the Seller is the sole and exclusive owner throughout the world of all rights
in
and to the literary work entitled: SUBHUMAN (previously known as SHELF LIFE),
written by ▇▇▇▇ ▇▇▇▇, which work has been filed in the United States Copyright
Office under Copyright Registration Number (Pending); this work, including
all
adaptations and/or versions, the titles, characters, plots, themes and
storyline, is collectively called the “Literary
Property”;
and
WHEREAS,
PGE wants to acquire certain rights of the Seller in consideration for the
purchase price provided herein and in reliance upon the Seller’s representations
and warranties;
NOW,
THEREFORE, the parties agree to as follows:
| 1. |
RIGHTS
GRANTED:
The Seller sells, grants, conveys and assigns to PGE, its successors,
licensees and assigns exclusively and forever, all motion picture
rights
(including all silent, sound dialogue and musical motion picture
rights),
all television motion-picture and other television rights, with all
radio
broadcasting rights and all publication rights for advertisement,
publicity and exploitation purposes, and certain incidental and allied
rights, throughout the world, in and to the Literary Property and
in and
to the copyright of it and all renewals and extensions of copyright.
Included among the rights granted to PGE hereunder (without in any
way
limiting the grant of rights hereinabove made) are the following
sole and
exclusive rights throughout the
world:
|
| (a) |
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, DVD, or through any other technical process
whether
now known or from now on devised, based in whole or in part on the
Literary Property, of every size, gauge, colour or type, including,
but
not limited to, musical motion pictures and remakes of and sequels
to any
motion picture produced hereunder and motion 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.
|
| (b) |
To
exhibit, perform, rent, lease and generally deal in and with any
motion
picture produced hereunder:
|
| (i) |
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, DVD, or television (including
commercially sponsored, sustaining, and subscription or pay-per-view
television, or any derivative of it);
and
|
| (ii) |
anywhere
whatsoever, including homes, theatres and elsewhere, and whether
a fee is
charged, directly or indirectly, for viewing any such motion
picture.
|
| (c) |
To
broadcast, transmit or reproduce the Literary Property or any adaptation
or version of it (including without limitations to, any motion picture
produced hereunder and/or any script or other material based on or
using
the Literary 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, Internet and Video on Demand),
by
motion pictures produced on films or by means of magnetic tape, wire,
disc, audio-visual cartridge, DVD, or any other device now known
or from
now on devised and 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 PGE hereunder for motion
picture purposes.
|
Ex
4.1 - 4
| (d) |
Without
limiting any other rights granted PGE, 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 Literary 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.
|
| (e) |
To
publish and copyright or cause to be published and copyrighted in
the name
of the PGE or its nominee in any languages throughout the world,
in any
form or media, synopses, novelizations, serializations, dramatizations,
abridged and/or revised versions of the Literary Property, adapted
from
the Literary Property or from any motion picture and/or other version
of
the Literary Property for advertising, publicizing and/or exploiting
any
such motion picture and/or other
version.
|
| (f) |
For
the foregoing purposes to use all or any part of the Literary Property
and
any of the characters, plots, themes and/or ideas contained therein,
and
the title of the Literary Property and any title or subtitle of any
component of the Literary Property, and to use said titles or subtitles
for any motion picture or other version or adaptation whether the
same is
based on or adapted from the Literary Property and/or as the title
of any
musical composition contained in any such motion picture or other
version
or adaptation.
|
| (g) |
To
use and exploit commercial or merchandise tie-ups and recordings
of any
sort and nature arising out of or connected with the Literary 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.
|
All
rights, licenses, privileges and property herein granted PGE will be cumulative
and PGE 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
the Seller from now on makes or publishes or permits to be made or published
any
revision, adaptation, sequel, translation or dramatization or other versions
of
the Literary Property, then PGE will have and the Seller grants to PGE without
payment therefore all of the same rights therein as are herein granted PGE.
The
terms “Picture”
and
“Pictures”
as
used
herein will be deemed to mean or include any present or future kind of motion
picture production based upon the Literary Property, with or without sound
recorded and reproduced synchronously with it, whether the same is produced
on
film or digitally 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.
| 2. |
RIGHTS
RESERVED:
The following rights are reserved to the Seller for the Seller’s use and
disposition, subject, however, to the provisions of this
agreement:
|
| (a) |
Stage
Rights:
The right to perform the Literary Property or adaptations of it on
the
spoken stage with actors appearing in person in the immediate presence
of
the audience, provided no broadcast, telecast, recording, photography
or
other reproduction of such performance is made. The Seller agrees
not to
exercise, or permit any other person to exercise, said stage rights
earlier than three (3) years after the first general release or telecast,
if earlier, of the first Picture produced hereunder, or five (5)
years
after the date of exercise of PGE’s option to acquire the Literary
Property, whichever is earlier.
|
| (b) |
Author-Written
Sequel:
A
literary property (story, novel, drama or otherwise), whether written
before or after the Literary Property and whether written by the
Seller or
by a successor in interest of the Seller, using one or more of the
characters appearing in the Literary Property, participating in different
events from those found in the Literary Property, and whose plot
is
substantially different from that of the Literary Property. The Seller
will have the right to exercise publication rights (i.e., in book
or
magazine form) any time.
|
Ex
4.1 - 5
| (c) |
The
Seller agrees not to exercise, or permit any other person to exercise,
any
other rights (including but not limited to motion picture or allied
rights) of any kind in or to any author-written sequel earlier than
one
year after the first general release of the first Picture produced
hereunder, or two years after the date of exercise of PGE’s option to
acquire the Literary Property, whichever is earlier, provided such
restriction on the Seller’s exercise of said author-written sequel rights
will be extended to any period during which there is in effect, in
any
particular country or territory, a network television broadcasting
agreement for a television motion picture, (i) based upon the Literary
Property, or (ii) based upon any Picture produced in the exercise
of
rights assigned herein, or (iii) using a character or characters
of the
Literary Property, plus one year, which will also be a restricted
period
in such country or territory, whether such period occurs wholly or
partly
during or entirely after the one (1) year period first referred to
in this
clause. Any disposition of motion picture or allied rights in an
author-written sequel made to any person or company other than PGE
will be
made subject to the following limitations and
restrictions:
|
| (d) |
Since
the characters of the Literary Property are included in the exclusive
grant of motion picture rights to PGE, no sequel rights or television
series rights to the Literary Property may be granted, but such characters
from the Literary Property which are contained in the author-written
sequel may be used in a motion picture and remakes of it whose plot
is
based substantially on the plot of the respective author-written
sequel.
|
It
is
expressly agreed that the Seller’s reserved rights under this sub clause relate
only to material written or authorized by the Seller and not to any revision,
adaptation, sequel, translation or dramatization written or authorized by PGE,
although the same may contain characters or other elements contained in the
Literary Property.
| 3. |
RIGHT
TO MAKE CHANGES:
The Seller agrees that PGE will have the unlimited right to vary,
change,
alter, modify, add to and/or delete from the Literary Property, and
to
rearrange and/or transpose the Literary Property and change the sequence
of it and the characters and descriptions of the characters contained
in
the Literary Property, and to use a portion or portions of the Literary
Property or the characters, plots, or theme of it with any other
literary,
dramatic or other material of any kind. The Seller waives the benefits
of
any provisions of law known as the “droit moral” or any similar law in any
country of the world and agrees not to permit or prosecute any action
or
lawsuit on the ground that any Picture or other version of the Literary
Property produced or exhibited by PGE, its assignees or licensees,
in any
way constitutes an infringement of any of the Seller’s droit moral or is
in any way a defamation or mutilation of the Literary Property or
any part
of it or contains unauthorized variations, alterations, modifications,
changes or translations.
|
| 4. |
DURATION
AND EXTENT OF RIGHTS GRANTED:
PGE will enjoy, solely and exclusively, all the rights, licenses,
privileges and property granted hereunder throughout the world, in
perpetuity, as long as any rights in the Literary Property are recognized
in law or equity, except as far as such period of perpetuity may
be
shortened due to any now existing or future copyright by the Seller
of the
Literary Property and/or any adaptations of it, in which case PGE
will
enjoy its sole and exclusive rights, licenses, privileges and property
hereunder to the fullest extent permissible under and for the full
duration of such copyright or copyrights, whether common law or statutory,
and any renewals and/or extensions of it, and will after that enjoy
all
such rights, licenses, privileges and property non-exclusively in
perpetuity throughout the world. The rights granted herein are in
addition
to and will not be construed in derogation of any rights which PGE
may
have as a member of the public or pursuant to any other agreement.
All
rights, licenses, privileges and property granted herein to PGE are
irrevocable and not subject to rescission, restraint or injunction
under
any circumstances.
|
| (a) |
All
rights granted or agreed to be granted to PGE under this agreement
will be
irrevocably vested in PGE and will not be subject to rescission by
the
Seller or any other party for any cause, nor will said rights be
subject
to termination or reversion by operation of law or otherwise, except
to
the extent, if any, that the provisions of any copyright law or similar
law relating to the right to terminate grants of, or recapture rights
in,
literary property may apply. If, pursuant to any such copyright law
or
similar law, the Seller or any successor or any other legally designated
party (all herein referred to as the “terminating
party”)
becomes entitled to exercise any right to reversion, recapture or
termination (the “termination
right”)
with respect to all or any part of the rights granted or to be granted
under this Agreement,
|
Ex
4.1 - 6
| (b) |
and
if the terminating party exercises said termination right with respect
to
all or part of said rights (the “recaptured
rights”),
then from and after the date on which the terminating party has the
right
to transfer to a third party all or part of the recaptured rights,
PGE
will have the first right to purchase and acquire the recaptured
rights
from the terminating party. If the terminating party is prepared
to accept
a bona fide offer from a third party with respect to all or part
of the
recaptured rights, then in each such instance the terminating party
will
notify PGE of such offer which the terminating party is prepared
to accept
and the name of the third party who made the offer to the terminating
party, and the terminating party will offer PGE the right to enter
into an
agreement with the terminating party with respect to the recaptured
rights
on the aforesaid terms and conditions. PGE will have 30 days from
the date
of its receipt of such written offer within which to notify the
terminating party of its acceptance of such offer. If PGE acquires
from
the terminating party all or part of the recaptured rights, then
the
terminating party agrees to enter into appropriate written agreements
with
PGE covering said acquisition. If PGE elects not to purchase the
recaptured rights from the terminating party, then the terminating
party
may dispose of said recaptured rights, but only to the aforesaid
third
party and only upon the terms and conditions specified in the aforesaid
written notice given by the terminating party to PGE, it being understood
and agreed that the terminating party may not dispose of said recaptured
rights either to: (i) any other proposed transferee; or (ii) upon
terms
and conditions which are more favorable to any transferee than the
terms
and conditions previously offered to PGE hereunder, without again
offering
to enter into an agreement with PGE on: (A) the terms offered to
such
other transferee; or (B) such more favorable terms and conditions
offered
to said proposed transferee, whichever of (A) or (B) will apply.
Any such
required offer made to PGE by the terminating party will be governed
by
the procedure set forth in the preceding four sentences of this Paragraph.
The unenforceability of any portion of this paragraph will not invalidate
or affect the remaining portions of this paragraph or this
agreement.
|
| 5. |
CONSIDERATION:
As
consideration for all rights granted and assigned to PGE and for
the
Seller’s representations and warranties, PGE agrees to pay to the Seller,
and the Seller agrees to accept:
|
| (a) |
For
a theatrical or television motion picture $32,000. CDN payment (payable
first day of production, in equal but not preferred order to other
parties
involved in receiving deferred payment), besides any sums paid in
connection with the option periods so payable upon exercise of the
option
to acquire the Literary Property.
|
| 6. |
REPRESENTATIONS
AND WARRANTIES:
|
| (a) |
Sole
Proprietor:
The Seller represents and warrants to PGE that the Seller is the
sole and
exclusive proprietor, throughout the universe, of that certain original
literary material written by the Seller entitled “SUBHUMAN” (formerly
known as “SHELF LIFE”).
|
| (b) |
Facts:
The Seller represents and warrants to PGE as
follows:
|
(i)
The
Seller is the sole author and creator of the Literary Property.
(ii)
The
Literary Property was registered for copyright in the name of SUBHUMAN, under
copyright registration number (Pending) in the Office of the United States
Register of Copyrights, Washington, D.C.
(iii)
No
motion picture or dramatic version of the Literary Property, or any part of
it,
has been manufactured, produced, presented or authorized; no radio or television
development, presentation, or program based on the Literary Property, or any
part of it, has been manufactured, produced, presented, broadcast or authorized;
and no written or oral agreements or commitments at all with respect to the
Literary Property, or with respect to any rights therein have been made or
entered by or on behalf of the Seller (except with respect to the Publication
of
the Literary Property as set forth above).
| (iii) |
None
of the rights herein granted and assigned to PGE have been granted
and/or
assigned to any person, firm or corporation other than
PGE.
|
Ex
4.1 - 7
| (c) |
No
Infringement or Violation of Third-Party Rights:
The Seller represents and warrants to PGE that the Seller has not
adapted
the Literary Property from any other literary, dramatic or other
material
of any kind, nature or description, nor, except material which is
in the
public domain, has the Seller copied or used in the Literary Property
the
plot, scenes, sequence or story of any other literary, dramatic or
other
material; that the Literary Property does not infringe upon any common
law
or statutory rights in any other literary, dramatic or other material;
that no material contained in the Literary Property is libelous or
violative of the right of privacy of any person; that the full utilization
of any and all rights in and to the Literary Property granted by
the
Seller pursuant to this agreement will not violate the rights of
any
person, firm or corporation; and that the Literary Property is not
in the
public domain in any country in the world where copyright protection
is
available.
|
| (d) |
No
Impairment of Rights: The Seller represents and warrants to PGE that
the
Seller is the exclusive proprietor, throughout the universe, of all
rights
in and to the Literary Property granted herein to PGE; that the Seller
has
not assigned, licensed or in any manner encumbered, diminished or
impaired
any such rights; that the Seller has not committed or omitted to
perform
any act by which such rights could or will be encumbered, diminished
or
impaired; and that there is no outstanding claim or litigation pending
against or involving the title, ownership and/or copyright in the
Literary
Property, or in any part thereof, or in any rights granted herein
to PGE.
The Seller further represents and warrants that no attempt will be
made
hereafter to encumber, diminish or impair any of the rights granted
herein
and that all appropriate protection of such rights will continue
to be
maintained by the Seller.
|
| 7. |
INDEMNIFICATION:
|
| (a) |
The
Seller agrees to indemnify PGE against all judgments, liability,
damages,
penalties, losses and expense (including reasonable attorneys’ fees) which
may be suffered or assumed by or obtained against PGE by reason of
any
breach or failure of any warranty or agreement made by the Seller
in this
agreement.
|
| (b) |
PGE
will not be liable to the Seller for damages of any kind in connection
with any Picture it may produce, distribute or exhibit, or for damages
for
any breach of this agreement (except failure to pay the money
consideration herein specified) occurring or accruing before PGE
has had
reasonable notice and opportunity to adjust or correct such
matters.
|
| (c) |
All
rights, licenses and privileges herein granted to PGE are irrevocable
and
not subject to rescission, restraint or injunction under any
circumstances.
|
| 8. |
PROTECTION
OF RIGHTS GRANTED:
The Seller grants to PGE the free and unrestricted right, but at
PGE’s own
cost and expense, to institute in the name and on behalf of the Seller,
or
the Seller and PGE jointly, any and all suits and proceedings at
law or in
equity, to enjoin and restrain any infringements of the rights herein
granted, and assigns and sets over to PGE any and all causes of action
relative to or based upon any such infringement, as well as any and
all
recoveries obtained thereon. The Seller will not compromise, settle
or in
any manner interfere with such litigation if brought; and PGE agrees
to
indemnify and hold the Seller harmless from any costs, expenses,
or
damages that the Seller may suffer as a result of any such suit or
proceeding.
|
| 9. |
COPYRIGHT:
Regarding the copyright in and to the Literary Property, the Seller
agrees
that:
|
| (a) |
The
Seller will prevent the Literary Property and any arrangements, revisions,
translations, novelizations, dramatizations or new versions thereof,
whether published or unpublished and whether copyrighted or not
copyrighted, from vesting in the public domain, and will take or
cause to
be taken any and all steps and proceedings required for copyright
or
similar protection in any and all countries in which the same may
be
published or offered for sale, insofar as such countries now or hereafter
provide for copyright or similar protection. Any contract or agreement
entered into by the Seller authorizing or permitting the publication
of
the Literary Property or any arrangements, revisions, translations,
novelizations, dramatizations or new versions thereof in any country
will
contain appropriate provisions requiring such publisher to comply
with all
the provisions of this clause.
|
Ex
4.1 - 8
Pacific
Gold Entertainment Inc.
| (b) |
Without
limiting the generality of the foregoing, if the Literary Property
or any
arrangement, revision, translation, novelizations, dramatization
or new
version thereof is published in the United States or in any other
country
in which registration is required for copyright or similar protection
in
accordance with the laws and regulations of such country, and the
Seller
further agrees to affix or cause to be affixed to each copy of the
Literary Property or any arrangement, revision, translation,
novelizations, dramatization or new version thereof which is published
or
offered for sale such notice or notices as may be required for copyright
or similar protection in any country in which such publication or
sale
occurs.
|
| (c) |
At
least six months prior to the expiration of any copyright required
by this
provision for the protection of the Literary Property, the Seller
will
renew (or cause to be renewed) such copyright, as permitted by applicable
law, and any and all rights granted PGE hereunder will be deemed
granted
to PGE throughout the full period of such renewed copyright, without
the
payment of any additional consideration, it being agreed that the
consideration payable to the Seller under this agreement will be
deemed to
include full consideration for the grant of such rights to PGE throughout
the period of such renewed
copyright.
|
| (d) |
If
the Literary Property, or any arrangement, revision, translation,
novelization, dramatization or new version thereof, will ever enter
the
public domain, then nothing contained in this agreement will impair
any
rights or privileges that the PGE might be entitled to as a member
of the
public; thus, the PGE may exercise any and all such rights and privileges
as though this agreement were not in existence. The rights granted
in this
agreement by the Seller to PGE, and the representations, warranties,
undertakings and agreements made under this agreement by the Seller,
will
endure in perpetuity and will be in addition to any rights, licenses,
privileges or property of PGE referred to in this sub clause
(d).
|
| 10. |
CREDIT
OBLIGATIONS:
PGE will have the right to publish, advertise, announce and use in
any
manner or medium, the name, biography and photographs or likenesses
of the
Seller in connection with any exercise by PGE of its rights hereunder,
provided such use will not constitute an endorsement of any product
or
service.
|
During
the term of the Writers Guild of Canada Minimum Basic Agreement (“WGC
Agreement”),
as it
may be amended, the credit provisions of the WGC Agreement will govern the
determination of credits, if any, which the PGE will accord the Seller hereunder
in connection with photoplays.
Subject
to the foregoing, the Seller will be accorded the following credit at Producer’s
discretion on screen and in paid ads controlled by PGE and in which any other
writer is accorded credit, and in size of type (as to height, width, thickness
and boldness) equal to the largest size of type in which any other writer is
accorded credit:
“Written
by ▇▇▇▇ ▇▇▇▇”
Additionally,
if PGE exploits any other rights in and to the Literary Property, then PGE
agrees to give appropriate source material credit to the Literary Property,
to
the extent that such source material credits are customarily given in connection
with the exploitation of such rights.
No
casual
or inadvertent failure to comply with any of the provisions of this clause
will
be deemed a breach of this agreement by the PGE. The Seller expressly
acknowledges that in the event of a failure or omission constituting a breach
of
the provisions of this paragraph, the damage (if any) caused the Seller thereby
is not irreparable or sufficient to entitle the Seller to injunctive or other
equitable relief. Consequently, the Seller’s rights and remedies in the event of
such breach will be limited to the right to recover damages in an action at
law.
PGE agrees to provide in its contracts with distributors of the Picture that
such distributors will honor PGE’s contractual credit commitments and agrees to
inform such distributors of the credit provisions herein.
Ex
4.1 - 9
Pacific
Gold Entertainment Inc.
| 11. |
RIGHT
OF FIRST NEGOTIATION:
The term “Right
of First Negotiation”
means that if, after the expiration of an applicable time limitation,
the
Seller desires to dispose of or exercise a particular right reserved
to
the Seller herein (the “Reserved
Right”),
whether directly or indirectly, then the Seller will notify PGE in
writing
and immediately negotiate with PGE regarding such Reserved Right.
If,
after the expiration of 90 days following the receipt of such notice,
no
agreement has been reached, then the Seller may negotiate with third
parties regarding such Reserved Right subject to Clause 12
infra.
|
| 12. |
RIGHT
OF LAST REFUSAL:
The term “Right
of Last Refusal”
means that if PGE and the Seller fail to reach an agreement pursuant
to
PGE’s right of first negotiation, and the Seller makes and/or receives
any
bona fide offer to license, lease and/or purchase the particular
Reserved
Right or any interest therein (a “Third-Party
Offer”),
and if the proposed purchase price and other material terms of a
Third-Party Offer are no more favorable to the Seller than the terms
which
were acceptable to PGE during the first negotiation period, the Seller
will notify PGE, by registered mail or telegram, if the Seller proposes
to
accept such Third-Party Offer, the name of the offerer, the proposed
purchase price, and other terms of such Third-Party Offer. During
the
period of 30 days after PGE’s receipt of such notice, PGE will have the
exclusive option to license, lease and/or purchase, as the case may
be,
the particular Reserved Right or interest referred to in such Third-Party
Offer, at the same purchase price and upon the same terms and conditions
as set forth in such notice. If PGE elects to exercise thereof by
registered mail or telegram within such thirty (30) day period, failing
which the Seller will be free to accept such Third-Party Offer; provided
that if any such proposed license, lease and/or sale is not consummated
with a third party within 90 days following the expiration of the
aforesaid 30 day period, PGE’s Right of Last Refusal will revive and will
apply to each and every further offer or offers at any time received
by
the Seller relating to the particular Reserved Right or any interest
therein; provided, further, that PGE’s option will continue in full force
and effect, upon all terms and conditions of this paragraph, so long
as
the Seller retains any rights, title or interest in or to the particular
Reserved Right. PGE’s Right of Last Refusal will inure to the benefit of
PGE, its successors and assigns, and will bind the Seller and the
Seller’s
heirs, successors and assigns.
|
| 13. |
NO
OBLIGATION TO PRODUCE:
Nothing herein will be construed to obligate PGE to produce, distribute,
release, perform or exhibit any motion picture, television, theatrical
or
other production based upon, adapted from or suggested by the Literary
Property, in whole or in part, or otherwise to exercise, exploit
or make
any use of any rights, licenses, privileges or property granted herein
to
PGE.
|
| 14. |
ASSIGNMENT:
PGE may assign and transfer this agreement or all or any part of
its
rights hereunder to any person, firm or corporation without limitation,
and this agreement will be binding upon and inure to the benefit
of the
parties hereto and their successors, representatives and assigns
forever.
|
| 15. |
NO
PUBLICITY:
The Seller will not, without PGE’s prior written consent in each instance,
issue or authorize the issuance or publication of any new story or
publicity relating to (i) this agreement, (ii) the subject matter
or terms
hereof, or to any use by PGE, its successors, licensees and assigns,
and
(iii) any of the rights granted PGE
hereunder.
|
| 16. |
AGENT
COMMISSIONS:
PGE will not be liable for any compensation or fee to any agent of
the
Seller in connection with this
Agreement.
|
| 17. |
ADDITIONAL
DOCUMENTATION:
The Seller agrees to execute and procure any other and further instruments
necessary to transfer, convey, assign and copyright all rights in
the
Literary Property granted herein by the Seller to PGE in any country
throughout the world. If it will be necessary under the laws of any
country that copyright registration be acquired in the name of the
Seller,
PGE is authorized by the Seller to apply for said copyright registration
thereof; and, in such event, the Seller will and does assign and
transfer
the same unto PGE, subject to the rights in the Literary Property
reserved
hereunder by the Seller. The Seller further agrees, upon request,
to duly
execute, acknowledge, procure and deliver to PGE such short form
assignments as may be requested by PGE for the purpose of copyright
recordation in any country, or otherwise. If the Seller fails to
so
execute and deliver, or cause to be executed and delivered, the
assignments or other instruments herein referred to, PGE is irrevocably
granted the power coupled with an interest to execute such assignments
and
instruments in the name of the Seller and as the Seller’s
attorney-in-fact.
|
Ex
4.1 - 10
Pacific
Gold Entertainment Inc.
| 18. |
NOTICES:
All notices to PGE under this agreement will be sent by Canada Post
registered mail, postage prepaid, or by telegram addressed to PGE
at #7 -
534 Cambie Street Vancouver BC V6B- 2N7, and all notices to the Seller
under this agreement will be sent by Canada Post registered mail,
postage
prepaid, or by telegram addressed to the Seller at #▇ - ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇. The date of such deposit will
be
deemed to be the date of service of such
notice.
|
| 19. |
ARBITRATION:
Any controversy or claim arising out of or in relation to this Agreement
or the validity, construction or performance of the Agreement, or
the
breach thereof, will be resolved by arbitration in accordance with
the
rules and procedures of the American Film Marketing Association,
as said
rules may be amended from time to time with rights of discovery if
requested from the arbitrator. Such rules and procedures are incorporated
and made a part of this Agreement by reference. If the American Film
Marketing Association will refuse to accept jurisdiction of such
dispute,
then the parties will arbitrate such matter before and in accordance
with
the rules of the Canadian Arbitration Association under its jurisdiction
in Vancouver, British Columbia before a single arbitrator familiar
with
entertainment law. The parties will have the right to engage in
pre-hearing discovery in connection with such arbitration proceedings
if
approved by the arbitrator. The parties hereto will abide by and
perform
any award rendered in any arbitration conducted pursuant hereto,
that any
court having jurisdiction thereof may issue a judgment based upon
such
award and that the prevailing party in such arbitration and/or
confirmation proceeding will be entitled to recover its reasonable
attorneys fees and expenses. The arbitration award will be final,
binding
and non-appealable.
|
[This
space intentionally left blank]
Ex
4.1 - 11
Pacific
Gold Entertainment Inc.
| 20. |
MISCELLANEOUS:
|
| (a) |
Relationship:
This agreement between the parties does not constitute a joint venture
or
partnership of any kind.
|
| (b) |
Cumulative
Rights and Remedies: All rights, remedies, licenses, undertakings,
obligations, covenants, privileges and other property granted herein
will
be cumulative, and PGE may exercise or use any of them separately
or in
conjunction with any one or more of the
others.
|
| (c) |
Waiver:
A waiver by either party of any term or condition of this agreement
in any
instance will not be deemed or construed to be a waiver of such term
or
condition for the future, or any subsequent breach
thereof.
|
| (d) |
Severability:
If any provision of this agreement as applied to either party or
any
circumstances will be adjudged by a court to be void and unenforceable,
such will in no way affect any other provision of this agreement,
the
application of such provision in any other circumstance, or the validity
or enforceability of this
agreement.
|
| (e) |
Governing
Law: This agreement will be construed in accordance with the laws
of the
Province of British Columbia applicable to agreement which are executed
and fully performed within said
Province.
|
| (f) |
Captions:
Captions are inserted for reference and convenience only and in no
way
define, limit or describe the scope of this agreement or intent of
any
provision.
|
| (g) |
Entire
Understanding: This agreement contains the entire understanding of
the
parties relating to the subject matter, and this agreement cannot
be
changed except by written agreement executed by the party to be
bound.
|
IN
WITNESS WHEREOF, the parties hereto have signed this Agreement.
Somnambulist
Imagery Inc.
Per: /s/
▇▇▇▇ ▇▇▇▇ 10
July
2006
__________________________________ ___________________________________
▇▇▇▇
▇▇▇▇
(Writer) Date
Pacific
Gold Entertainment Inc.
Per: /s/
▇▇▇ Loudoun 10
July
2006
__________________________________ ___________________________________
▇▇▇
Loudoun (CFO) Date
Ex
4.1 - 12
Pacific
Gold Entertainment Inc.
EXHIBIT
“B”
OPTION
AGREEMENT
(Short
Form)
For
good
and valuable consideration, receipt of which is acknowledged, the undersigned
grants to Pacific Gold Entertainment Inc. (“PGE”), its successors and assigns,
the sole and exclusive option to purchase all motion picture and certain allied
rights, in the original literary and/or dramatic work (the “Work”)
described as follows:
Title:
Subhuman (formerly known as Shelf Life)
Author:
▇▇▇▇ ▇▇▇▇
Copyright
Registration: (Pending)
The
Work
includes but is not limited to: (i) all contents; (ii) all present and future
adaptations; (iii) the title, characters and theme; and (iv) the copyright
and
all renewals and extensions of copyright.
This
instrument is executed in accordance with and is subject to the agreement (the
“Option
Agreement”)
between the undersigned and the PGE dated as of July 10, 2006, relating
to the option granted to the PGE to purchase the above-mentioned rights in
the
Work, which rights are more fully described in the Purchase Agreement, attached
to the Option Agreement.
Per: /s/
▇▇▇▇ ▇▇▇▇ 10
July
2006
__________________________________ ___________________________________
▇▇▇▇
▇▇▇▇
(Writer) Date
Attest:
/s/
Witness
10
July
2006
__________________________________ ___________________________________
(Witness) Date
Ex
4.1 - 13