7.
Purchased Rights
Upon the exercise (if any) by Purchaser of the Option, Owner shall grant and shall be deemed to have granted to Purchaser, and Purchaser shall own and shall be deemed to own solely and exclusively, in perpetuity and throughout the universe, the rights set forth below (collectively, the "Purchased Rights").
All right, title and interest (including all copyrights, and renewals and extensions thereof) to create and produce the Picture (i.e., one motion picture based on the Property) and to own, control, distribute, and exploit said Picture in all media now known or hereinafter discovered, throughout the universe, in perpetuity, (subject to the Reserved Rights and Frozen Rights detailed in Paragraph 9 below), including, by way of illustration, all theatrical and non-theatrical motion picture rights, all television rights (pay, free, cable, and otherwise), all home video rights, and all allied, ancillary and subsidiary rights in the Picture and all other rights of distribution and other exploitation, and publishing rights in accordance with Paragraph 9 (a) below, solely for purposes of promotion, advertising, and exploitation of the Picture and the Purchased Rights.
Purchaser shall have the right, throughout the universe, in perpetuity, and in all media, to use and reproduce, and to license others to use and reproduce Owner's name, approved likeness and approved biography only in connection with the production, exhibition, advertising, promotion, and/or other exploitation of the Picture, and/or subsidiary and/or ancillary rights of any nature relating thereto.
Owner acknowledges that the compensation payable under this Agreement includes adequate and equitable remuneration for the "Rental and Lending Rights" (as defined below) and to the fullest extent permitted by applicable law, constitutes a complete worldwide buy-out of all Rental and Lending Rights, in perpetuity. Owner hereby irrevocably grants to Purchaser throughout the world in perpetuity, the right to collect and retain for Purchaser's own account all amounts payable to Purchaser and/or Owner in respect of Rental and Lending Rights and irrevocably directs any collecting societies or other persons or entities receiving such amounts to pay them to Purchaser. "Rental and Lending Rights" means all rights of Owner to authorize, prohibit, control or receive money (other than as provided in this Agreement) from the rental, lending, fixation, reproduction or other exploitation of the materials, results and proceeds of Owner's services, or any motion picture, program or other production based thereon, by any media or means now known or hereafter devised as may be conferred upon Owner under applicable laws, regulations or directives, in any jurisdiction throughout the world, including any so-called rental and lending rights pursuant to the European Community directives or enabling or implementing legislation, laws or regulations enacted by member nations of the European Community.
This sets out the rights the Producer has if the option is actually exercised. Ideally, the rights granted under an option agreement are limited to the type of initial production to be produced (for example, if the initial production is to be a motion picture, then the rights granted should be limited to just the rights associated with the development, creation and exploitation of the motion picture). Studios, like publishers, will try to obtain all rights, but it is important that if the underlying property is a book, publishing and author written sequel rights are reserved, with the publishing rights not subject to the holdback provision set out i below in Paragraph 8. Likewise, ideally the Owner would want to specifically retain merchandising, musical publishing and licensing rights as well as live stage rights, but a lot of production companies will insist on retaining these rights because they have beenso valuable in recent years when connected to a motion picture or TV series.