§ 5.30[D]    Form Agreement
OPTION AGREEMENT FOR ANIMATION RIGHTS
This Agreement (“Agreement”) is entered into this [Date] by and between [Name of Licensor] (“Licensor”), with offices at [Address of Licensor] and [Name of Animation Studio] (“Animator”) with offices at [Address of Animation Studio].
      Whereas, Licensor is the owner and creator of property entitled [Property] (“Property”); and
      Whereas, Animator is interested in the development, production and exploitation of motion picture, interactive/multimedia, publishing, live stage, and certain other rights more particularly described herein based on the Property created and owned by Licensor and the characters, events, stories and elements thereof as heretofore or hereafter constituted.
      Now, therefore, in consideration of the promises and agreements set forth herein, the parties, each intending to be legally bound hereby, do promise and agree as follows.
1. OPTION
      A. In consideration of the payment to Licensor of the sum of [Amount] ($##.##) upon execution hereof, receipt of which is hereby acknowledged, Animator is hereby granted the exclusive, irrevocable option to acquire all rights described below for the period ending [number] (#) year(s) after the date this agreement is signed and returned to Animator by Licensor (“Initial Option Period”).
      B. Animator shall have the right to extend the option term for an additional successive period of [number] (#) year(s) (“Second Option Period”) upon written notice to Licensor prior to the expiration of the Initial Option Period and payment to Licensor of an additional sum of [Amount] ($##.##)
      C. The option payments shall be applied against the purchase price to be paid pursuant to Paragraph l(d) below.
      D. If Animator exercises its option above (which it shall be deemed to do if it commences principal production on a motion picture or multimedia/interactive production), it shall concurrently pay Licensor the sum of [Amount] ($##.##) less the amounts paid with respect to the Initial and/or Second Option Periods.
      E. During the Initial and Second Option Periods, Animator may engage in customary development and preproduction activities relating to the rights optioned herein, but neither party may exercise or exploit the rights under option herein.
2. RIGHTS
      A. Rights Granted. In the event Animator exercises its option, Animator and/or its designees shall acquire, subject only to the rights specifically reserved to Licensor herein, all exclusive, worldwide rights of every kind and nature in and to the Property, in all territories, in all languages, in all media now known or hereafter devised, for the terms hereinafter set forth, including (without limitation) the following:
      (i) Motion Pictures: The right to produce animated or live action motion pictures and to exploit same and all elements thereof in all media, including, without limitation, television (free, pay, cable or otherwise), theatrically, home video, and non-theatrically (schools, institutions, museums, film festivals, filmstrips) or otherwise.
      (ii) Multimedia/Interactive Productions: The right to produce multimedia/interactive productions and to exploit them in all forms now or hereafter known, including (without limitation) on CDROM, platforms, online, in arcades, and personal computers. Notwithstanding the foregoing, if Animator has not commenced negotiations, or entered into an agreement, with an interactive publisher on or before the date that [number] television episodes based on the Property have been broadcast, Licensor shall also be permitted to produce one or more multimedia/interactive productions itself (Licensor may not license said rights to any third party without the prior written consent of Animator), subject to the obligation to pay to Animator [number] percent (#%) of Licensor's gross revenues (without deductions of any kind) with respect thereto.
      (iii) Exclusivity: The right to grant exhibitors, distributors, and publishers the exclusivity to the Property, its characters and elements which they customarily receive, including (without limitation) exclusive television rights to the Property and its components during the network and/or syndicated runs.
      (iv) Music Publishing and Sound Recordings: The perpetual right to publish and exploit all music created in connection with any production produced hereunder, and the perpetual right to incorporate the foregoing music in sound recordings and/or story records based on the Property, identifying it as from said production and using artwork and graphics therefrom.
      (v) Print Publishing: The right to publish and exploit print publishing (books, comic books, comic strips, cutout books, popup books and other similar formats).
      (vi) Live Stage. The right to produce one or more live stage productions to be performed before a live audience. Animator shall pay to Licensor a standard royalty to be negotiated in good faith based on the type of production produced (and all revenues derived therefrom shall be expressly excluded from gross receipts for purposes of Paragraph 5 below).
      (vii) Commercial TieIns. The right to do promotions and commercial tieins related to television programs, feature films and other productions produced by Animator hereunder. All revenues derived therefrom shall be included in gross receipts for purposes of Paragraph 5 below.
      (viii) Advertising and Publicity Rights: The perpetual right to advertise and publicize its rights hereunder or the exploitation thereof in any and all media.
      B. Reserved Rights: Licensor reserves the exclusive right to exploit merchandise relating to the Property. “Merchandise” shall include, but not be limited to, [Product Categories]. Licensor shall also be responsible for managing the merchandising program for the Property; provided, that if at any time during the New Production Term Licensor elects not to actively promote merchandise relating to the Property in general or in any particular product category, Animator shall be entitled to seek out merchandise proposals on Licensor's behalf. Notwithstanding the foregoing, in no event shall Licensor be permitted to engage the services of an agent or representative to act on its behalf to procure merchandise deals, nor shall Licensor be permitted to assign or transfer any merchandise rights to any other person, firm or corporation, without first offering Animator the right to act as Licensor's agent/representative or to acquire said merchandise rights, as applicable, on terms to be negotiated in good faith.
      (i) With respect to merchandise sold in the U.S. and Canada, commencing upon exercise of the option granted hereunder and continuing until such time as Animator has reached Breakeven (as defined in the attached Definition of Net Profits) with respect to all productions produced by Animator based on the Property, Animator shall be entitled to receive an amount equal to [number] percent (#%) of the amount by which Gross Merchandising Revenues exceed the Base Year Amount. With respect to merchandise sold outside the U.S. and Canada, Animator's right to share in merchandising revenues in a particular territory shall be as set forth in the immediately preceding sentence except that such right shall commence upon the date of initial broadcast in that territory of the first television program or other production produced hereunder. For purposes hereof, “Gross Merchandising Revenues” shall mean all amounts received or utilized by, or credited to the account of, Licensor or any affiliate with respect to merchandise, less only (A) foreign taxes actually withheld and (B) fees paid to any nonaffiliated third-party agent with respect to services rendered outside the U.S. and Canada, not to exceed [number]%. “Base Year Amount” shall mean the Gross Merchandising Revenues received by Licensor in the twelve (12) month period immediately preceding the date Animator exercises the option granted herein. After Animator has reached Breakeven with respect to all motion pictures or productions produced by Animator hereunder, Animator shall be entitled to receive an amount equal to [number] percent (#%) of the amount by which Gross Merchandising Revenues exceed the Base Year Amount.
      (ii) Animator's right to participate in Gross Merchandising Revenues shall continue until the last to occur of (A) five years after the New Production Term ends and (B) three years after Animator reaches Breakeven with regard to all motion pictures or productions produced by Animator based on the Property.
3. TERM
      A. New Production Term. The term (“New Production Term”) of Animator's rights to produce new motion pictures, interactive/multimedia productions and other materials based on the Property shall commence on the date Animator exercises its option under this Agreement and end on the date [number] (#) years after the last to occur of (i) broadcast of the last television production produced by Animator based on the Property, (ii) the end of the initial release cycle of the last motion picture, home video or multimedia/interactive production produced by Animator based on the Property or (iii) the final distribution or performance of any publication or stage production produced by Animator based on the Property. Thereafter, all such new production rights shall revert to Licensor with the exception of the right to produce remakes and sequels of any such motion pictures or productions, worldwide, in any media now known or hereafter known, which rights shall remain exclusively vested in Animator, in perpetuity.
      B. Distribution Term: The term of Animator's rights to distribute and advertise/publicize the motion pictures, multimedia/interactive productions, publications, live stage productions, music and other materials produced hereunder, and all elements thereof, shall be in perpetuity, in all media (now or hereafter known), in all territories.
4. ROYALTIES
      In the event that Animator produces motion pictures or multimedia/interactive productions based on the Property, Animator shall pay Licensor:
      (a) For each new motion picture produced for initial exhibition on U.S. network television (which shall include only ABC, CBS, NBC and Fox) or for exhibition on HBO or Showtime, payable on commencement of principal photography thereof:
      One half-hour non-prime-time:
•	Series episode: $[Amount]
•	Special: _______$[Amount]
      One half-hour prime-time:
•	Series episode: $[Amount]
•	Special: $[Amount]
      (b) For each new motion picture produced for initial U.S. exhibition in syndication, on cable or for UPN or the WB, payable on commencement of principal photography thereof:
      One half-hour non-prime-time:
•	Series episode: $[Amount]
•	Special: _______$[Amount]
      One half-hour prime-time:
•	Series episode: $[Amount]
•	Special: $[Amount]
      (c) Royalties for new motion pictures in the foregoing categories to be initially broadcast outside the U.S. shall be reduced by one-half. Royalties for new motion pictures in the foregoing categories of different lengths (e.g., one hour non-prime-time series episodes or miniseries) shall be negotiated in good faith.
      (d) For each motion picture for initial home video release, payable on commencement of principal photography thereof:
•	if less than 41 minutes in length: $[Amount]
•	if 41 minutes but not more than 80 minutes in length: $[Amount]
•	more than 80 minutes in length: $[Amount]
      (e) For each multimedia/interactive production, [Amount] Dollars ($##.##), payable on delivery of the gold master to the publisher thereof.
      (f) For each feature length theatrical motion picture, an amount equal to two [number] (#%) of the direct cash production budget with a minimum of $[Amount] and a maximum of $[Amount], payable on commencement of principal photography thereof.
      (g) For each new live action television series for initial exhibition on U.S. network television during primetime, Licensor shall also be entitled to receive a series sale bonus in the amount of $[Amount] if a pilot is ordered, payable upon commencement of principal photography of the pilot and/or $[Amount] if Animator receives a firm order of not less than [number] episodes, payable upon receipt by Animator of said series order and payment of the license fee. Said amounts shall be reduced by onehalf if said series is initially broadcast during non- primetime or outside the U.S.
5. NET PROFITS
      Animator shall pay Licensor a sum equal to [number] percent (#%) of Animator's net profits derived from all sources. Net Profits shall be as defined in Animator's attached Definition of Net Profits.
6. APPROVALS; OWNERSHIP AND COPYRIGHT
      A. Licensor shall be afforded the reasonable right to co-approve the principal character development and design for each motion picture produced hereunder, and Animator shall consult with Licensor concerning overall development of all other productions; provided, that Animator's decisions shall be final in all matters having financial consequences. Licensor's approvals shall be exercised promptly in accordance with production demands, shall not increase Animator's budget, and shall be consistent with previously approved elements. Animator shall have complete and final control over all other creative matters (provided only that due regard is given to maintaining the integrity of the Property) and all financial matters.
      B. Licensor shall remain the exclusive owner of the Property and all rights under copyright or trademark therein. Animator shall be the exclusive owner of all motion pictures, productions, materials and elements thereof produced hereunder, and Animator shall be entitled to the copyright therein; provided, however, that any spinoff or ancillary characters created by Animator in the exercise of the rights granted herein shall be jointly owned by Animator and Licensor.
      C. Animator shall be the sole and exclusive owner of any and all such results and proceeds and Animator shall have the complete unencumbered, exclusive and perpetual right throughout the universe to exhibit, record, reproduce, broadcast, televise, transmit, publish, copy, print, reprint, vend, sell, distribute, perform and use for any purpose, in any manner, and by any means, whether or not now known, invented, used or contemplated, and whether separately or in synchronism or timed relation with motion pictures, or otherwise, all or any part of the matters and things referred to in this paragraph and to refrain from all or any part of the foregoing. Animator may add to, subtract from, arrange, rearrange, revise and adapt all such material in any manner, and Licensor hereby waives the “moral rights of authors” as said term is commonly understood, to the full extent now or hereafter permitted by applicable law.
7. SCREEN CREDIT
      Provided that such characters appear recognizably in the motion pictures and multimedia/interactive productions produced hereunder and Licensor is not in material breach hereof, Animator shall accord screen credit on such motion pictures and multimedia/interactive productions substantially as follows:
“[Property] characters created by [Name of Licensor]”
“Additional characters created by [Name of Licensee]”
“Coexecutive Producers [Name of Licensor]”
      To the extent Licensee acts as writer and/or consultant on the pilot or any television series episode and Licensee is not in material breach hereof, Licensee shall also be entitled to receive “Written by” or “Consultant” credit, as appropriate, it being acknowledged that all writing credits shall be determined in accordance with the rules of the Writers Guild of America Basic Agreement. On screen, each such credit shall be on a separate card (except that the credits accorded Licensor and Licensee relating to the creation of characters shall be on a shared card), and on feature length theatrical motion pictures such credit shall be in the main titles. The size, style, placement and any other characteristics of such credits shall be determined in Animator's sole discretion. No casual or inadvertent failure of Animator to comply with the provisions of this paragraph, and no failure of others to comply with their obligation to Animator, shall constitute a breach of this Agreement by Animator. Licensor shall not be entitled to any injunctive or equitable relief for breach of the provisions of this Paragraph.
8. WARRANTIES AND INDEMNITIES
      A. Licensor represents and warrants that:
      (i) Licensor is free to enter into and fully perform this Agreement and is not subject to any conflicting obligations which will prevent Licensor from, or interfere with, the execution and performance of this Agreement, or impair the complete enjoyment of the rights granted to Animator hereunder;
      (ii) Licensor is the sole and exclusive owner of all rights granted to Animator hereunder;
      (iii) The Property is wholly original to Licensor and does not infringe upon or violate any copyright of, or the right of privacy of, any person, or constitute a libel or slander of any person, and does not infringe upon or violate any other right of any person;
      (iv) Licensor has not heretofore granted, assigned, hypothecated or in any other manner transferred or encumbered any right, title or interest in and to the rights granted Animator hereunder, and Licensor will not do so in the future;
      (v) There are no adverse claims nor is there pending any litigation or threat of litigation in or against the rights granted Animator hereunder;
      (vi) There has not been any production nor is there presently any planned production of any theatrical motion picture, television program, stage play, book, CD ROM or any other project based in whole or in part on the rights granted Animator hereunder;
      (vii) There is no other contract or assignment affecting the rights granted Animator hereunder which would interfere with the rights or Animator's exercise of the rights granted Animator hereunder; and
      (viii) Contemporaneously with the execution of this Agreement, Licensor will execute and deliver to Animator a Short Form Option in the form attached hereto as Exhibit A and a Short Form Assignment in the form attached hereto as Exhibit B. Animator agrees that it will not record the Short Form Assignment with the U.S. Copyright Office or distribute such Assignment to any third party until such time as the option granted hereunder has been exercised.
      B. Licensor agrees to indemnify and hold harmless Animator and its officers, directors, employees, representatives, agents, licensees, successors and assigns from and against any and all claims, demands, losses and/or expenses (including reasonable attorneys' fees) arising out of or resulting from any breach by Licensor of any of its representations, warranties, indemnities and/or agreements contained herein.
      C. Animator represents and warrants that:
      (i) Animator is free to enter into and fully perform this Agreement and is not subject to any conflicting obligations which will prevent Animator from, or interfere with, the execution and performance of this Agreement; and
      (ii) All materials to be created by Animator relating to the Property will be wholly original to Animator, or in the public domain, and will not infringe upon or violate any copyright of, or the right of privacy of, any person, or constitute a libel or slander of any person, and will not infringe upon or violate any other right of any person.
      (d) Animator agrees to indemnify and hold harmless Licensor and its officers, directors, employees, representatives, agents, licensees, successors and assigns from and against any claims, demands, losses, damages and/or expenses (including reasonable attorneys' fees) resulting from any breach by Animator of any of its representations, warranties, indemnities and/or agreements contained herein.
9. ASSIGNMENT
      Animator may assign this Agreement, in whole or in part, to any entity, including (without limitation) any parent, subsidiary or affiliated company or to any entity with whom any parent, subsidiary or affiliated company is merged or consolidated or to any entity acquiring all or substantially all of the stock or assets of any such parent, subsidiary or affiliated company and Animator shall be relieved of its obligations hereunder. Licensor's right to receive compensation hereunder may be assigned but all other rights or obligations, including the approval rights of Licensor, are not assignable.
10. FORCE MAJEURE
      If by reason of earthquake or other similar act of God, fire, labor dispute or strike or other similar event beyond Animator's control (referred to as “force majeure”) the development, preproduction, production or post-production of any production by Animator based on the Property is prevented or delayed, then the term of the Initial or Second Option Period and the New Production Term, as the case may be, shall be extended by the actual period during which such force majeure prevents or delays the development, preproduction, production or postproduction thereof, but not more than [number] (#) weeks.
11. EXECUTION OF DOCUMENTS
      Licensor agrees to execute such further documents and instruments as Animator may request in order to effectuate the terms and intentions of this Agreement, and if Licensor fails to execute any such documents or instruments within [number] hours after receipt thereof (unless exigencies require otherwise in which case such [number]-hour period shall be waived), Licensor hereby appoints and grants to Animator and Animator's designee, the right as Licensor's attorneyinfact, irrevocably and coupled with an interest, to execute, acknowledge, deliver and record any such documents or instruments.
12. REMEDIES
      The pursuit of any remedy under this Agreement or otherwise shall not be deemed to waive any other or different remedy which may be available under this Agreement or otherwise, either at law or in equity. No waiver of any breach of this Agreement shall be deemed a waiver of any preceding or succeeding breach of the same or any other provision hereof. Licensor acknowledges that the services herein agreed to be performed by Licensee and the rights herein granted by Licensor are of a special, unique, unusual, extraordinary and intellectual character which gives them a peculiar value, the loss of which cannot be reasonably compensated in damages in an action at law, and that Licensor's default will cause Animator irreparable injury and damage. Licensor agrees that in the event of a breach or threatened breach by Licensor, Animator shall be entitled to injunctive or equitable relief. In addition to such injunctive or equitable relief, Animator shall be entitled to such other remedies as may be available at law, including, without limitation, damages. Licensor agrees that, in the event of any default by Animator, Licensor's only remedy shall be an action at law for damages, if any, actually suffered by Licensor and in no event shall Licensor be entitled to rescind this Agreement or to receive injunctive or other equitable relief.
13. NO OBLIGATION TO PRODUCE
      Licensor fully understands that Animator shall have no obligation to produce, complete, release, distribute or otherwise exploit any motion picture or other production based upon the Property or the rights granted Animator hereunder, and Licensor releases Animator from any liability for any loss or damage Licensor may suffer by reason of Animator's failure to produce, complete, release or distribute any such motion picture or production.
14. INTEGRATION
      This Agreement constitutes the entire understanding between the Licensor and Animator, and revokes and supersedes all prior agreements between the parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.
15. JURISDICTION/DISPUTES
      This Agreement shall be governed in accordance with the laws of the State of [State]. All disputes under this Agreement shall be resolved by litigation in the courts of the State of [State], including the federal courts therein, and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.
16. HEADINGS
      The headings used are for reference purposes only and shall not in any manner affect the scope or meaning of the provisions of this Agreement nor shall they be given any legal effect.
17. NO JOINT VENTURE
      Nothing contained herein shall constitute a partnership or joint venture between Licensor and Animator, nor shall either constitute the agent of the other or have the right to bind the other.
18. NAME; LIKENESS
      Licensor hereby grants Animator the right, in perpetuity and throughout the universe, to use Licensor's name, likeness and biography in connection with the advertising, publicizing and exploitation of any of the rights granted to Animator hereunder.
19. SEVERABILITY
      If any term, clause, or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause, or provision and such invalid term, clause, or provision shall be deemed to be severed from the Agreement.
      Please acknowledge your agreement to the foregoing by executing this letter in the space provided below.
      ACCEPTED AND AGREED:
		
[Name of Licensor]	[Name of Animator]	
By:	By:	
Title:	Title:	
Date:	Date:	
DEFINITION OF NET PROFITS
1. Net Profits shall be computed, accounted for and paid by deducting from the Gross Receipts, Distribution Fees, Distribution Expenses, the Cost of Production, and all Contingent Amounts, in that order.
      (a) “Gross Receipts” shall mean all amounts paid to and actually received and earned by Animator in U.S. Dollars on account of the license or exploitation of the motion pictures, productions or other materials which are subject to this participation (the “Programs”) for exhibition or exploitation.
      (b) “Distribution Fees” shall be defined as follows:
      (i) If the Programs are distributed by a third party distributor unrelated to Animator, the Distribution Fees shall be those actually charged by the third party sub distributor, plus an administrative fee for Animator of [number] percent (#%) of the amount of the sub distributor's gross receipts.
      (ii) If the Programs are distributed by Animator or any of its related companies, then the Distribution Fees shall be [number] percent (#%) of Gross Receipts.
      (c) “Distribution Expenses” shall be all expenses paid or incurred by or for the account of Animator or any distributor in connection with the advertising, distribution, licensing, or other exploitation of the Programs and rights therein, or which are customarily treated as deductible expenses in the applicable industry.
      (d) The “Cost of Production” shall mean all costs of producing the Programs or which are customarily treated as part of the Cost of Production in the applicable industry. To direct costs, there shall be added an overhead figure to compensate Animator for its indirect costs of producing the Programs in the amount of [number] percent (#%) of the direct cost. The Cost of Production shall also bear interest until recouped at the rate of [number] percentage points above the prime rate from time to time in effect.
      (e) The “Contingent Amounts” shall mean any deferments, participations in gross receipts payable by Animator in connection with the Programs, or any participation in the proceeds from the Programs payable to any entity for financing, exhibiting or distributing any of the Programs.
      2. “Breakeven” shall be that point (computed anew on each statement) at which Net Profits are first payable to Licensor hereunder.
      3. In computing Net Profits, all television programs, theatrical motion pictures, multimedia/interactive productions, publications and other productions based on the Property shall be cross collateralized.
      4. Animator agrees to keep normal accounting records with reference to the Programs, and Licensor shall have the right to cause records to be audited by a reputable CPA on reasonable notice, during business hours, and at the place where Animator normally keeps such records. No such examination shall occur more than once per year, nor shall records greater than [number] (#) years be examined, nor shall records which have previously been examined be examined again, nor shall such audit continue beyond [number] (#) days alter its commencement. Animator shall furnish semiannual statements to Licensor [number] (#) days after the end of each such period showing the calculation of Net Profits hereunder, and such statements shall be accompanied by any payments shown to be due. Animator shall have reciprocal accounting and audit rights as to participations due from Licensor under this Agreement.

EXHIBIT A
SHORT FORM OPTION
      The undersigned, [Name of Licensor] (“Licensor”), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby grants to [Name of Animator] (“Animator”), and its successors, licensees and assigns, effective as of the date hereof, an exclusive option to acquire certain motion picture, multimedia/interactive and other rights relating to the toy line and concept currently entitled [Name of Property] and the characters, events, stories and elements thereof, all as more expressly set forth in that certain agreement dated [date] between Licensor and Animator.
      IN WITNESS WHEREOF, Licensor and Animator have caused this Short Form Option to be executed this [date].
      ACKNOWLEDGED AND AGREED TO:
		
[Name of Licensor]	[Name of Animator]	
By:	By:	
Title:	Title:	
Date:	Date:	

EXHIBIT B
SHORT FORM ASSIGNMENT
      The undersigned, [Name of Licensor] ( “Licensor”), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby assigns, transfers and conveys to [Name of Animator] (“Animator”), and its successors, licensees and assigns, effective as of the date hereof, certain motion picture, multimedia/interactive and other rights relating to the toy line and concept currently entitled [Name of Property] and the characters, events, stories and elements thereof, all as more expressly set forth in that certain agreement dated [date] between Licensor and Animator.
      IN WITNESS WHEREOF, Licensor and Animator have caused this Short Form Assignment to be executed this [date].
      ACKNOWLEDGED AND AGREED TO:
		
[Name of Licensor]	[Name of Animator]	
By:	By:	
Title:	Title:	
Date:	Date: