Services Agreement - Filmmakers
 

This Magic Rock Inc. Intellectual Property Acquisition and Service Agreement (“Agreement”) is made as of the date of signing between ______________________ (“Producer”), on the one hand, and NeoFlix, a division of Magic Rock Inc., and Magic Rock Inc. a Delaware Company, (collectively “Magic Rock”) on the other. Producer and Magic Rock are collectively referred to herein as the “Parties.” The Agreement pertains to the mutual consideration rendered by the Parties to one another for the sale and distribution of Producer’s film(s) and/or video projects, currently entitled ____________________________, and related merchandise and product (collectively the “Picture”). The Parties agree to the following terms and conditions.

1. Picture. Producer represents and warrants that it has the right and authority to enter into this Agreement and grant the rights herein. Producer further represents and warrants as follows:

  • 1.1. That the Picture’s entire copyright is protected under U.S. Copyright law;
  • 1.2. That there are no outstanding lawsuits or claims or potential lawsuits or claims against the Picture or against any party that may encumber any of the rights granted by Producer under this Agreement;
  • 1.3. That the Picture or any part or right therein is not subject to a security interest, lien, claim, lawsuit, or has been pledged as collateral, or other legal entanglement or encumbrance inconsistent with or which could tend to diminish the rights granted to Magic Rock hereunder;
  • 1.4. That the Producer has obtained all necessary consents and clearances from all sources, including but not limited to consents and clearances from all actors (or subjects), musicians, writers, directors, artists, photographers, and designers;
  • 1.5. That the Picture, if rated by the MPAA, has or will receive a rating no more restrictive than “R”;
  • 1.6. That Producer and not Magic Rock is responsible for any of the following costs and fees related to the Picture: residuals, dues, overages, production costs, performance fees, license fees, fees or tax due to government bodies, union costs fees or penalties, or professional fees or costs;
  • 1.7. That any and all intellectual property in the film is either owned by Producer, properly licensed (in the case of music, said licensing includes master use rights and synchronization rights), in the public domain, or subject to fair use according to the written opinion of a properly qualified and licensed American attorney at law;
  • 1.8. That Producer is properly complying with any terms and conditions of any license for the use, copying and/or display of any third-party intellectual property located in the Picture;
  • 1.9. That Producer has performed a proper title search and determined that no other work exists with the same or substantially similar features which would plausibly give rise to an infringement action by third party involving the Picture for violation of trademark, service mark, or trade dress rights;
  • 1.10. That the Producer has received no notice from a third party challenging the Picture’s use of any intellectual property.

2. Term. This Agreement shall run the length of one (1) month, beginning on the first day of the month and ending on the last second of the last day of the month; referred to hereinafter as a “Term.” At the end of the Term, the Agreement shall automatically renew itself for another single Term of identical length. In the event that this Agreement commences on a day other than the first day of the month, then the Agreement shall run from the date of commencement, set as the day Producer affixes her signature or electronic signature to this Agreement, and runs until the last day of the month, and thereafter the Term shall run regularly, and be automatically renewed regularly. Automatic renewal shall occur indefinitely, unless terminated per the terms of the sub-section, below.

  • 2.1. How Terminated. This Agreement may be terminated in two ways, either through breach, or through notice of termination.
  • 2.1.1. Notice of Termination. Automatic renewal, as discussed in the above sub-section, shall occur indefinitely, unless, prior to the automatic renewal date, one of the Parties provides written notice to the other of its intent to terminate this Agreement. Said written notice must (1) be sent by one Party to the other at least thirty (30) days prior to the last day of the Term, (2) express its intent to terminate, and (3) properly state the date of termination. Upon the passage of the properly noticed termination date, this Agreement shall terminate. Notice of termination may be issued by either Party for any reason or for no reason at all.
  • 2.1.2. Termination Via Breach. Violation of any of the terms, conditions or prohibitions contained in this Agreement shall result in the immediate termination of this Agreement. This Agreement may also be immediately terminated by a Party’s anticipatory breach: i.e. an expression by a Party that, although it has not yet, it does intend to breach the Agreement in the future.

3. Territory

  • 3.1. Territory. Territory for distribution of the Picture shall be accounted for in the following spheres: (1) internet and (2) all other media.
  • 3.1.1. Territory for Digital Download Via Internet. The territory for distribution of the Picture for digital download via the internet, shall be the entire universe unless the Producer initials below, in which case the Picture shall not be available from Magic Rock for digital download.

By initialing here ______________, Producer prohibits distribution of the Picture for digital download.

  • 3.1.2. Territory for All Other Media. With the exception of the internet territory discussed in the sub-section above, the territory for distribution of the Picture in all other medias, and on all other platforms, shall be the entire universe, unless the Producer initials below, in which case the territory for distribution of the Picture shall be limited to the United States, its possessions and territories, the Caribbean Islands, Puerto Rico, and Canada.

Precluding internet territory, which is accounted for by the previous sub-section, Producer initials here _______________and thereby limits distribution of the Picture in all other (non-internet) medias and on all other (non-internet related) platforms, to United States, its possessions and territories, the Caribbean Islands, Puerto Rico, and Canada. Magic Rock shall not be liable for unauthorized third-party export of the Picture outside the Territory described here.

4. Rights. Producer grants to Magic Rock a non-exclusive license to distribute copies of the Picture for sale and/or rental or performance on all media now known or unknown, including without limitation sale of digital discs (such as laser disc, DVD, or Blueray Disc), home video viewing by direct download, streaming download, or view to own, Video On Demand (VOD), television of any kind, various digital or analog tape formats, or transmission over the Internet to be received by an end-user in whatever form and viewed by whatever device as exists or will exists (such as, for example, via computer browser or other software, phone, or pda device).

  • 4.1. Additionally, for purposes of marketing and promotion, Producer grants to Magic Rock a non-exclusive license to use, host, and render available in any and all media known or not yet known, the following items: trailer(s) of Picture, short clips of Picture, information pertaining to the Picture such as the Picture’s name, the Producer’s personal or stage name, the name and biographical information f the cast and crew, photographic and still images related to the Picture, and other similar materials.
  • 4.2. Additionally, Producer grants to Magic Rock license to sell, license, or distribute the Picture to educational institutions and public libraries, unless Producer initials below so prohibiting said distribution.

By initialing here ______________, Producer prohibits distribution of the Picture to educational institutions, public libraries, and/or the following institution (s) _______________________________________.

  • 4.3. Use of NeoFlix Logo and Trademarks. During the term of this Agreement, Magic Rock grants to Producer a non-exclusive license throughout the universe to use and display the NeoFlix logo and trade name on the Picture website and Picture marketing and advertising materials. Producer shall avoid disparaging, parodying, or making a satire of NeoFlix, Magic Rock and/or any of its parent, daughter, or sister companies in the use of the NeoFlix logo, NeoFlix trade name or in any other way.

5. Fee for Services. Magic Rock shall charge Producer for various services rendered. Charges issued and fees rendered are stated on the NeoFlix website in a document entitled “Producer Fees.” Magic Rock has unilateral authority to change these fees without any prior notification to Producer. Magic Rock will make appropriate accounting reports and payments as follows.

  • 5.1. Producer shall be paid via check at the address stated at the end of this Agreement, unless Producer opts to receive payment via Paypal per the following terms.
  • 5.2. Producers will be paid via PayPal at the following account(s): .
  • 5.3. Magic Rock will send periodic statements regarding sales and fees via e-mail. Producer may also access current statements via the NeoFlix website.

6. Policy and Terms Located on Magic Rock Website. Certain terms and policies creating rights and obligations on the parties, such as Magic Rock’s privacy policy, or its Payout Terms, are maintained on the Magic Rock website at www.magicrock.com. Said policies and terms may be changed at any time, unilaterally by Magic Rock with 35 days prior notification. If Producer objects to any change of terms or policies, Producer may timely notice termination of this Agreement per sub-section 2.1, above.

7. Indemnification and Limitation of Liability

  • 7.1. Non-liability for Producer Negligence. Neither Magic Rock nor any of its sister businesses, parent, nor daughter companies, if any, principals, nor agents (collectively the “Magic Rock Indemnitees”) shall be answerable nor accountable in any manner for any harm nor damage that may occur to any third party as a direct or indirect result of Producer’s negligence, carelessness, or recklessness, whether in act or omission related to the Picture, Producer’s Website, internet presence, or other electronic or non-electronic communication. Said harm or damage includes but is not limited to Producer’s: violation of products liability law, violation of contract or warranty, defamation of another, violation of copyright or patent law, violation of law pertaining to privacy rights, false advertising, misrepresentation, violation of laws covering electronic communication, such as the Digital Millennium Copyright Act, the CAN SPAM Act, or other laws or rules pertaining to the internet such as those issued by foreign governments or non-governmental authority.
  • 7.2. Indemnification. To the fullest extent permitted by law, Producer shall indemnify and hold harmless the Magic Rock Indemnitees against any and all claims for damages, costs, liabilities, losses, expenses, liens, demands, and causes of action pertaining or related to a third party arising out of Producer’s negligence, carelessness, or recklessness, whether in act or omission, related to the Picture, Producer’s Website, internet presence, or other electronic or non-electronic communication. Similarly, Producer shall indemnify and hold harmless the Magic Rock Indemnitees against any and all costs, expenses, attorney's fees and liability incurred by the Magic Rock Indemnitees in defending against such claims, alleged by a third party whether the same proceed to judgment or not.
  • 7.3. Defense. In the event of any such action as contemplated in this section, is filed against the Magic Rock Indemnitees, then the Magic Rock Indemnitees shall either permit Producer to conduct a defense, at Producer’s own expense, under the provisions of this Agreement, or shall, at the Magic Rock Indemnitees’ unilateral option, choose to mount its own defense in accordance with Cal. Civ. Code § 2778. In the event the Magic Rock Indemnitees desire the Producer to so defend, then Magic Rock Indemnitees shall provide notice of same in writing, and shall cooperate with Producer in good faith for the purposes of defending the suit.
  • 7.4. Effect of Settlement on Indemnity. In the event the Magic Rock Indemnitees tender their defense to Producer in writing as set out in the previous sub-section, and in the event Producer declines to offer a defense to the Magic Rock Indemnitees, or declines to reimburse the Magic Rock Indemnitees for same, then any subsequent settlement between the Magic Rock Indemnitees and the third partie[s] bringing suit establishes conclusive evidence of Producer liability, for which indemnity is owed under the terms of this section.
  • 7.5. Promissory Estoppel Liability. Producer understands and acknowledges that involving itself with the NeoFlix Service may cause Producer to expend time, energy, and/or resources in seeking to replicate, ship, store, sell, and/or market its Picture. Other unforeseen expenses may result as well. Producer further understands that, given these foreseeable and unforeseeable expenses, participation in the NeoFlix Service, may or may not result in net profit to Producer. Producer assumes the risk that gross expenditures of this sort may exceed profits. Producer further understands that given the Termination Clause, above, as well as the ever-present threat of other unforeseen events, Producer may be removed from the NeoFlix Service prior to profitability. Producer assumes the risk of that possibility as well. In short, Producer relies upon no certitude not clearly stated in this Agreement regarding profitability from participation in the NeoFlix Service, and waives any right to allege promissory estoppel against Magic Rock or any of its sister businesses, parent, or daughter companies, if any, principals, or agents, for any promise not explicitly made herein.
  • 7.6. Service Interruption. Occasionally the NeoFlix service will experience service interruptions due to factors beyond our NeoFlix control. Additionally, from time- to-time, NeoFlix may interrupt the Service in order to perform regularly schedule maintenances or make upgrades to the system. Producer waives any right to seek compensation for said interruptions and NeoFlix shall not be held responsible any lost sales or presumed lost sales, or any other damages suffered by Producer during these service interruptions or as a consequence of these service interruptions.
  • 7.7. Damages. In the event that this Agreement is breached, terminated, rescinded, revoked, or otherwise voided for any reason, all Parties waive the right to seek equitable or injunctive relief. Any and all relief sought and/or acquired by the Parties shall be limited to damages.
  • 7.8. Shifting Fees. In the event of any breach of this Agreement, or a cause of action, or arbitration occurring related to this Agreement, any Party aggrieved thereby shall be entitled to recover, as the prevailing Party, not only the amount of any judgment which may be awarded in favor of such Party, and against the losing Party, but also such other damages, costs and expenses as may be incurred by such Party, including court costs, reasonable attorney’s fees, arbitration fees, and other costs and expenses, taxable or otherwise, incurred in preparing for litigation or litigating such action, in establishing or maintaining the applicability of this Agreement or any provision hereof, or in prosecuting any cross-complaint based hereon. This section shall also apply in the event a Party seeks to appeal an arbitration award.
  • 7.9. Assumption of the Risk re Product. Producer is hereby notified that the Picture and its related physical products—such as, but not limited to DVDs, promotional clothing, or posters—stored on Magic Rock premises may be damaged or destroyed for a variety of reasons such as flood, fire, theft, vandalism, or accidental loss. Magic Rock shall not compensate Producer for loss nor damage of Producer’s physical product and Producer assumes the risk of such loss, or other unforeseeable loss, and waives all right to compensation from Magic Rock. Producer is hereby notified that Magic Rock shall acquire no insurance to cover said losses and that Producer is advised to obtain its own insurance, as it deems necessary.

8. Arbitration

  • 8.1. Arbitration Before JAMS. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles County, before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures, amended and superseded only by the following Rules.
  • 8.1.1. No Discovery. The Parties have no right to demand discovery from each other in any form qualified by the following exceptions. Discovery may be demanded pertaining to:
  • 8.1.1.1. Unprivileged documents that a Party intends to introduce as exhibits at the Arbitration Hearing;
  • 8.1.1.2. Names and contact information of any individual with knowledge about the dispute or claim;
  • 8.1.1.3. Names of all experts who may be called upon to testify or whose report may be introduced at the Arbitration Hearing.
  • 8.1.2. Excluded Evidence. Documents that were not previously exchanged, or witnesses and experts that were not previously identified, may not be considered by the Arbitrator at the Hearing, unless agreed by the Parties or upon a showing of good cause.
  • 8.2. Entry of Award. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.
  • 8.3. Allocation of Fees and Costs. The arbitrator may, in the Award, allocate all or part of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party.
  • 8.4. Alter Ego. In the event that either Party alleges alter ego against the other, or seeks to pierce the corporate veil, by bringing into any given action individuals named personally, then those personally named individuals, whether signatories to this Agreement or not, are authorized to invoke this arbitration clause, and, in that event, said clause shall continue to be binding on all Parties to this Agreement.

9. Miscellaneous Terms

  • 9.1. Ambiguities. This Agreement, and each of the provisions hereof, has been reached as the result of negotiations between the Parties. Each of the Parties hereto expressly acknowledges and agrees that this Agreement shall not be deemed to have been prepared by or drafted by any particular Party or Parties, and that the normal rule of construction to the effect that ambiguities are to be resolved against the drafting Party or Parties shall not be employed in the interpretation of this Agreement.
  • 9.2. Binding. This Agreement shall be binding upon, and shall inure to the benefit of, each Party hereto, each Party’s respective subsidiaries and affiliated companies, heirs, successors, and/or assigns.
  • 9.3. Modification. No modification or amendment of this Agreement shall be of any force or effect unless in writing and executed by all Parties hereto.
  • 9.4. Independent Contractors. Producer is an independent contractor. Neither this Agreement, nor any other document, nor any other course of dealing, nor any other oral representations shall create any form of partnership, joint venture, agency, franchise, sales representative, or employment relationship between and/or among the Parties.
  • 9.5. Controlling Law. This Agreement shall be construed in accordance with and be governed by the laws of the State of California, without regard to the conflicts of law principles thereof. Any lawsuit arising from this Agreement shall be brought in the federal or state courts located in Los Angeles County, California.
  • 9.6. Publicity Solicitation. Producer shall not issue any press release nor make any other similar public announcement that in any way makes any reference to NeoFlix nor Magic Rock without Magic Rock’s prior written consent.
  • 9.7. Force Majeure. The Parties’ performance under this Agreement shall be excused to the extent that such performance is hindered, delayed or made commercially impractical by causes beyond the respective Parties’ reasonable control.
  • 9.8. No Waiver. The failure of any Party to enforce strict performance of any provision of this Agreement shall not constitute a waiver of that Party’s right to subsequently enforce said provision or any other provision of this Agreement.
  • 9.9. Entire Agreement. This Agreement contains the entire Agreement of the Parties with respect to the matters covered hereby, and supersedes any oral or written understandings or Agreements between the Parties with respect to the subject matter of this Agreement. No person nor Party is authorized to make any representations nor warranties except as set forth herein, and no agreement, statement, representation nor promise by any Party hereto which is not contained herein shall be valid nor binding.
  • 9.10. Representations. Each Party to this Agreement acknowledges that it has not relied upon any warranties, representations, statements or promises by any of the other Parties herein.
  • 9.11. Counterparts. This Agreement may be executed simultaneously or in any number of counterparts, each of which shall be deemed an original, equally admissible in evidence, but all of which together shall constitute one and the same Agreement, notwithstanding that the signatures, or Electronic Signatures of each Party or their respective representatives do not appear on the same page of this Agreement.
  • 9.12. Severance. If any provision, or any part of any provision, of this Agreement is, for any reason, held to be invalid, unenforceable, or contrary to any public policy, law, statute or regulation, then the remainder of this Agreement shall not be affected thereby, and shall remain valid and fully enforceable.
  • 9.13. Written Notice. Written notice as described herein shall include not only paper documents delivered via U.S. Mail or reliable delivery service but shall also include written text delivered via e-mail or documents sent via facsimile.
  • 9.14. Pronoun. The feminine pronoun operates as the masculine and vice-versa. The rules of Cal. Civ. Proc. Code § 17 apply to this Agreement unless there is a conflict, in which case the terms of this Agreement shall control.

SO AGREED:

You must check this box to continue. By checking this box, Producer acknowledges that she has read and understood the terms and conditions of the Agreement, and agrees to be legally bound by them. A copy of this agreement will be emailed to you upon sign-up. Please print two copies of this agreement, sign both, and mail back to Magic Rock at P.O. Box 5665, Hacienda Heights, California 91745, USA

PLEASE TYPE YOUR FIRST AND LAST NAME. THIS WILL BE CONSIDERED YOUR SIGNATURE ON BEHALF OF YOURSELF AND YOUR BUSINESS REFERRED TO HEREIN AS THE “PRODUCER”

Typing your name here operates in the exact same way as if you had used a pen and executed this Agreement with a signature to the Agreement, in your own hand.

Addendum A: Producers Fees

(Effective April 1, 2009)

All amounts $ are in U.S. Dollars

[1] Initial Sign-up: $238.00. One-time fee.

[2] Transactions:

  • 12% if an item is under $200.00 (Minimum $2.00 per transaction)
  • 8% if an item is over $200.00

[3] Monthly Account:

  • Tier “A”: $25.00 per month. Tier A are clients who average less than $600.00 sales per month over a 6-month period.
  • Tier “B”: $36.00 per month. Tier B are clients who average more than $600.00 sales per month over a 6-month period.

Reconciliation Schedule

Tier “A”. Receives reconciliation reports every Quarter (3 months) as follows:

  • January to March: Report by April 30th
  • April to June: Report by July 31th
  • July to September: Report by October 31st
  • October to December: Report by January 31st

Tier “B”. Reconciliation reports issued every month, by the last day of the following month. For example, report for January is issued by last day of February.

Optional Services

Shipping Requests:

  • Client requested shipments: $14 per request (1 location) plus $3.00 per carton or enveloped shipped plus freight or postage fees.
  • Sub-distributor shipping:
    • i. For up to 3 items into a single carton or envelope: $5.00 plus freight or postage.
    ii. For over 5 items – Same as client requested shipment.

Manual Order Processing:

Accepting, processing, invoicing, and collecting payment for orders submitted by distributors, retail outlets, educational entities, institutions, and all other common entities who require off-line paperwork processing: (Note: shipping charges are not included)

  • There is a minimum $30 per order processed. An exception is made for public library orders under $100 where we will charge a flat $10 fee.
  • Orders up to $1000: 12% ($30 minimum fee applies)
  • Orders over $1000: 10%

Library Orders and Institutional Orders Programs.

  • Producer and Magic Rock splits Gross proceeds 50%-50%. Magic Rock pays for all marketing and overhead expenses for its share. For example, if a film sells to an institution for $200, client receives $100 and no other fees are deducted, and Magic Rock receives $100.
  • In the event of returns, then the amount paid to Producer for that order will be carved back in the next reconciliation report; however, no return shipping or any other fees will be assessed to Producer above the 50% gross revenues.

Amazon – Marketplace Store.

Magic Rock charges between thirty and fifty percent (30-35%) of the gross proceeds from the Amazon sale, including shipping and handling. Amazon charges Magic Rock twenty percent (20%) for each listing that successfully sells. Magic Rock pays Amazon directly for the fees from Magic Rock’s portion of proceeds. Client is not charged any monthly service fee for participating in the Amazon Marketplace sales channel program. Any refunds of previously settled sales are carved back from future client statements.

Video On Demand (VOD) to TV Cable and Satellite.

Magic Rock charges between twenty five to fifty (25-50%) of the gross proceeds for the license fee earned from each VOD-TV negotiated contract that it directly or indirectly refers to the licensor of the content. The final terms of the license is governed by a contract to be executed at the time of engagement.

Future Services and Distribution Channels.

Fees for Digital Download Services and any other Transactional Services or Sales Channels that are not listed in this agreement will be published to Producer before the services can take effect. Magic Rock will not automatically enter client into any new service without client agreement.