Reserved and Frozen Rights
Notwithstanding the provisions of Paragraph 8 hereinabove:
Owner hereby reserves throughout the universe the following rights in, to, and with respect to the Property ("Reserved Rights"):
All publishing rights in the Property of every kind and nature, and the right to authorize others to publish the Property, in books, magazines, periodicals and all other forms of media consisting of the printed word, including non-dramatic reading for audiobooks, streaming audio and other electronic transmissions, electronic publishing of the Property (including but not limited to electronic book or similarly read devices individually purchased by the end-user, or electronic transmissions via the internet and online); CD-ROM, videocassette tape, interactive computer, and multimedia rights (it being understood that excerpts from the Picture shall not be included as part of any electronic or multimedia version of the Property without the prior written approval of the Purchaser) ("Publishing Rights".) Notwithstanding the foregoing, Purchaser shall have the right to publish or cause to be published – but solely for advertising and publicity purposes – synopses and summaries, of the Property, not to exceed Seven Thousand Five Hundred (7500) words in length, in any and all languages, in newspapers, magazines, trade periodicals and any and all other types of publications; to use excerpts from and resumes and summaries of the Property in programs, booklets, posters, lobby displays, press books, newspapers, magazines and other periodicals, scrapbooks, so-called production logs (all subject to the aforementioned length limitation with regard to excerpts), commercial and other tie-ups, and all other media of advertising and publicity whatsoever, and to copyright any or all of the foregoing in the name of Purchaser or Purchaser's nominees. The aforesaid use of any excerpts from the Property shall bear the Owner's name and applicable copyright notice.
The right to exercise all radio and audio-only rights ("Radio Rights"), namely single or multiple dramatic and non-dramatic reading and public readings of all or part of the Property, the reservation of which rights shall not limit Purchaser's right to promote the Picture on radio and/or simulcast the Picture and/or transmit the Picture's soundtrack or any part thereof by radio.
The right to produce and to authorize others to produce the Property and dramatizations and adaptations thereof upon the spoken stage, including operas. operettas, and dance, with performers personally appearing and speaking in the immediate presence of the viewing and listening audience, as well as stage-related merchandising and all other allied, ancillary, and subsidiary rights in connection therewith, including live television, that is live on tape recordings of a live performance ("Live Stage Rights").
The right to write and license printed versions of "author-written sequels" to the Property, whether hardcover or softcover and in magazines or other periodicals, whether in installments or otherwise. An "author-written sequel" is a work of authorship, whether created by or under license from Owner before or after the creation of the Property of a similar nature to and covering the same or a substantially similar subject as that of the Property and including main or featured characters who appear in the Property ("Author-Written Sequels").
With regard to Owner's Reserved Rights, the following shall apply:
Holdback Period. Owner agrees not to exercise, or to authorize or permit the exercise of, or to sell, license, or otherwise dispose of any of the Reserved Rights in the Property and/or rights in any Author-Written Sequel corresponding or equivalent to the Purchased Rights (the "Equivalent Purchased Rights") or to the Reserved Rights (the "Equivalent Reserved Rights"), or agree to do so, to any third party, until after the expiration of the "Holdback Period." The "Holdback Period" shall mean the period commencing on the date Owner executes this Agreement and expiring five (5) years after the first theatrical exhibition, national television broadcast, or other national exhibition as the case may be, in the United States, of the first production produced hereunder, or seven (7) years after the date of exercise of the Option, whichever first occurs. If Purchaser commences principal photography of any remake, prequel, sequel, television program or other subsequent production based on the Purchased Rights ("Subsequent Production"), then the foregoing restriction shall also apply during the period commencing, in each case, on commencement of principal photography of such Subsequent Production and ending either seven (7) years thereafter, or five (5) years after the first theatrical exhibition, national television broadcast, or other national broadcast as the case may be, in the United States of such Subsequent Production, whichever first occurs. After the applicable Holdback Period, Owner shall not use, exercise, license, dispose of or otherwise transfer any of the Reserved Rights (other than Owner's Publishing Rights) or Equivalent Purchased Rights or Equivalent Reserved Rights, except in accordance with "Purchaser's Right of First Negotiation and Last Refusal" as set forth below.
Right of First Negotiation and Last Refusal. "Purchaser's Right of First Negotiation and Last Refusal" shall mean that Owner shall notify Purchaser in writing, prior to contacting any third parties of Owner's desire to sell or otherwise dispose of the Reserved Rights or Equivalent Purchased Rights or Equivalent Reserved Rights. Purchaser shall have thirty (30) days from receipt of such notice, to notify Owner in writing whether Purchaser desires to negotiate, in good faith, with respect to such rights ("Negotiation Notice"). If Purchaser serves such Negotiation Notice but Purchaser and Owner fail to reach an agreement with respect to such rights within forty-five (45) days of service of the Negotiation Notice, Owner may negotiate with third parties subject to Purchaser's "right of last refusal." If Owner obtains a third-party offer (an "Offer") to purchase such rights, Owner shall present such Offer in writing to Purchaser and Purchaser shall have fifteen (15) business days following receipt of such writing to match the Offer with respect to the financial aspects of such Offer. In the event Purchaser matches such Offer, Owner shall enter into an agreement with Purchaser with respect to the exploitation of said rights based on the terms thereof. If Purchaser fails to match such Offer within such fifteen (15) day period, the Offer may be accepted without further obligation to Purchaser, except as set forth below. If any such Offer is not the subject of a final agreement or if finalized, lapses, then each further disposition of such rights shall be subject to the procedure set forth herein. Purchaser's Right of First Negotiation and Last Refusal shall continue in force and effect upon all of the terms and conditions of this provision so long as Owner or any assignee, transferee or other successor in interest of Owner shall own any right, title, or interest in or to said rights. Notwithstanding anything contained in the foregoing to the contrary, in no event shall Owner's exercise of any of said rights be construed as a limitation or restriction on Purchaser's rights to use the characters contained or described in the Property in any remake, sequel, television production or other production based on the Property or in any other manner permitted hereunder.
"Frozen Rights", as used herein shall mean all derivative, ancillary, and allied rights in and to the Picture, including, without limitation, remakes and/or the sequels, if applicable, and including, without limitation, episodic television, animated motion pictures, and television programs, direct-to-video productions, theme park and gaming rights, and novelization), other than the Purchased Rights and the Reserved Rights. Commencing on the date hereof and continuing until the Option has expired, or is exercised in perpetuity, neither party hereto shall exploit, or authorize the exploitation of the Frozen Rights, or any portion thereof, without the prior written consent of the other party.
This sets out the rights that the Owner expressly reserves, including the right to license publication of the Property in books and other printed formats, as well as audio rights and the right to create stage dramatizations of the Property. However, the Owner agrees not to exercise these rights for a period of time (the "holdback period"). If the Owner envisions exploiting these rights in a shorter period of time, the holdback should be shortened or there should be a carveout for those specific rights.
"Frozen Rights" refers to derivative rights (including the right to create remakes or sequels, episodic TV, etc.) which the parties agree not to exploit without the written consent of the other party.
This paragraph also provides the Purchaser with the right of first negotiation and last refusal with respect to the reserved rights, and on what terms (such as how long a period of time the Producer has to exercise these rights and to match an offer made by a third party).