1. DESCRIPTION OF SERVICES
Crystalline Studios agrees to produce and deliver to Client (“Company”) the audio-visual recording (“Video”), as specified in the Statement of Work (“Statement of Work”) attached hereto and made a part of this Agreement.
The budget (“Project Budget”) for the Video shall be as specified in the Statement of Work.
3. PRODUCTION SCHEDULE
The parties agree that the Video shall be produced and completed in accordance with the production schedule (“Production Schedule”) as set forth in the Statement of Work.
4. COMPANY’S APPROVALS; REPRESENTATIVE
(a) Crystalline Studios shall obtain Company’s approval, which shall not be unreasonably withheld, at the stages of production as set forth in the Production Schedule. Company agrees to correct and approve Crystalline Studios’s work as set forth in the Addendum (if applicable), and where corrections are required, Company shall be specific and constructive so that Crystalline Studios is able to make corrections promptly and professionally.
(b) Company’s representative is as specified in the Addendum, or such other person as may be designated in writing by Company from time to time. Such representative shall have the authority to make decisions and provide approvals on behalf of Company.
5. PRODUCTION OF VIDEO
(a) Crystalline Studios shall produce the Video pursuant to the terms hereof and such Video shall adhere to and be based upon the materials to be prepared and delivered by Crystalline Studios for the Video. No later than the date set forth in the Production Schedule, or as may be otherwise agreed upon by Crystalline Studios and Company, Crystalline Studios will deliver the Video to Company and such Video will contain everything described in the Statement of Work according to the specifications set out therein (“Delivery Commitment”). The Video shall be produced in accordance with the quality standards of Crystalline Studios’s work and productions as previously exhibited to Company.
(b) All references in this Agreement to “Video” shall be deemed to include all applicable production elements including, without limitation, film negative, video master, answer print, workprint picture and mixing elements, selected negatives for opticals, optical elements (hi-cons, mattes, etc.), interpositive for opticals, tapes of daily sound/wildtrack tapes, positive trims and cuts, original negative, original negative of n/g (“no good”) takes, all music tracks and dubs. Title to all materials provided by Company to Crystalline Studios and materials created by Crystalline Studios shall remain with Company. Crystalline Studios agrees at the expiration of this Agreement to return to Company all materials delivered by Company to Crystalline Studios and any materials created by Crystalline Studios hereunder.
(c) Crystalline Studios agrees to timely notify Company, when such becomes known to Crystalline Studios, of any potential over-budget situations and further agrees not to proceed with any production cost overages without the prior written consent of Company.
6. COMPENSATION; CANCELLATION FEE
(a) In consideration of Crystalline Studios’ and its employees’ services hereunder, Company agrees to pay to Crystalline Studios the sums in accordance to the Payment, Terms and Conditions as set forth in the Statement of Work.
(b) A retainer amount, as specified in the Payment Terms and Conditions of the Statement of Work, is required at the time of acceptance to initiate project work. The balance will be invoiced as described in the Project Payment Schedule described above. Company shall pay the amount set forth on such invoices, within thirty(30) days of receipt thereof.
(c) Typical reasonable business expenses are not included in this Agreement and may be billed to Company. These include, but are not limited to, shipping and courier services, computer and video media, media licensing fees, including specific stock video and pictures that Company may request, which Crystalline Studios currently does not own, and any approved expenses associated with Company business.
(d) Typical reasonable travel business expenses are not included in this proposal and will be billed to Company. These include, but are not limited to, mileage, lodgings, meals, airport parking, and any approved expenses associated with Company business if applicable.
(e) Crystalline Studios reserves the right to refuse to begin, complete or deliver any work until the fees agreed upon have been paid according to the billing cycle specified in this agreement. Should Crystalline Studios be required to retain attorneys to collect its invoices, Company will pay our reasonable attorneys fees and expenses and such fees and court costs in effecting collection, as well as any interest charges incurred.
(f) This Agreement may be terminated by the Company upon 15 days written notice to Crystalline Studios. If this Agreement is so terminated by Company prior to its completion, Company shall pay Crystalline Studios a cancellation fee of 25% of the total project fee set forth in the Statement of Work. Further, Company shall also pay all-third-party costs incurred pursuant to the Budget prior to the termination of this Agreement. Crystalline Studios shall submit to Company invoices, bills, copies of agreements or other verifications in connection with such third-party costs. Immediately thereafter, Company shall pay Crystalline Studios monies due and owing.
(g) In the event Company fails to make timely payments as specified in the Statement of Work, Crystalline Studios shall have the right upon written notice to suspend production of the Video until payments due are received. Crystalline Studios agrees to resume such production immediately on receipt of such payment.
7. COMPANY CHANGES; COMPANY’S PERSONNEL AND PROPERTIES
(a) If Company elects to make changes either before or after interim or final approvals, Crystalline Studios shall make such requested changes. If these changes involve additional expenses for Crystalline Studios, which will change the Budget, Crystalline Studios shall, before incurring this additional expense, provide Company its best estimate of the amount of additional expenses and the reason these changes will cause the final price to exceed the previously agreed upon Budget. Crystalline Studios shall not proceed with the changes until Company has approved in writing the additional sum Crystalline Studios will charge Company. Such changes shall be evidenced by a written amendment to this Agreement.
(b) If Company fails to provide facilities, personnel, properties, creative assets, or other requirements at the time and place agreed upon between Company and Crystalline Studios, thereby increasing costs to Crystalline Studios, Company shall reimburse Crystalline Studios for such additional costs.
(c) Company agrees that, once Company approves one phase of work as set forth in the Production Schedule and authorize Crystalline Studios to proceed to the next phase, Company may not revise or order revision of earlier approved work unless Crystalline Studios agrees to do so, in which case Company will reimburse Crystalline Studios for the costs of such revisions as set forth in clause 7 (a) above.
8. CRYSTALLINE STUDIOS’S RIGHTS, RELEASES, AND EXPENSES
(a) Crystalline Studios shall be solely responsible for obtaining all clearances, releases, licenses and applicable guild or union agreements necessary for the completion of the production and delivery of the Video and to enable Company to exploit the Video free and clear of any claims relating to (i) use of any material and/or equipment utilized by Crystalline Studios in connection with the Video (other than the material and/or personnel supplied by Company) and (ii) the performances of any persons rendering services in connection with the Video (other than persons engaged and supplied by Company). Notwithstanding the foregoing, Company shall be solely responsible for obtaining all clearances, releases and licenses necessary to enable Company to exploit the Video free and clear of any claims relating to the use of the musical compositions and the master recordings (including fixation, synchronization, public performance, master use and other necessary use or re-use licenses).
(b) Crystalline Studios shall be solely responsible for and shall pay any and all costs incurred in the production and delivery of the Video including without limitation all costs and expenses relating to (i) all material and equipment utilized by Crystalline Studios in connection with the Video(except for the material supplied by Company) and (ii) all compensation, fees, royalties, and any other sums payable to all persons rendering services in connection with the Video (other than persons engaged by Company and specific location fees) (iii) all payments necessary to discharge any transportation, hotel and living expenses, and per diems incurred in connection with the attendance of all such persons at the place or places of all pre-production, production, and post- production sessions for the Video.
(c) All contracts for personnel, studio hire, purchase of goods or services, laboratory work and all other licenses, contracts and obligations in connection with the production of the Video by Crystalline Studios, shall be made and entered into by Crystalline Studios in its name as principal and not as agent for Company thereunder. All such contracts or undertakings shall be “work-for hire” contracts and consistent with the provisions of this Agreement and industry custom and practice. Crystalline Studios shall discharge all obligations of an employer with respect to all persons engaged by Crystalline Studios to render services in connection with the Video including the payment of payroll taxes, the payment of applicable minimum scale compensation, the payment of any pension, health and welfare contributions and the like to unions and guilds, the making of all deductions and withholdings required by law, and the maintenance of Worker’s Compensation Insurance, if applicable. The writer, director, actors, crew, and all other personnel employed by Crystalline Studios for the Video shall be selected by Crystalline Studios.
9. COMPANY’S RIGHTS, RELEASES, AND EXPENSES
Company shall obtain all rights, releases, licenses, permits, or other authorizations to use photographs, materials, artwork, footage, music, or any other property supplied by Company and/or necessary permissions and consents for the participation of employees or personnel supplied by Company.
10. WORK FOR HIRE
(a) The Video from the inception of production will be considered a “work for hire” (as such term is defined in the U.S. Copyright Act of 1976) for Company. Notwithstanding the foregoing, if the Video is for any reason deemed not to be a “work for hire,” the Video and any and all rights related thereto shall be deemed transferred and assigned to Company by this Agreement. The Video, and all duplications thereof in whatever form, together with the performances embodied thereon, shall be the sole and exclusive property of Company in perpetuity, free from any claim whatsoever by Crystalline Studios or any other person. Company shall have the unlimited right to exploit the Video for all purposes by any means now or hereafter developed, and in any form whatsoever, under any trademarks, tradenames and labels with no additional compensation payable to Crystalline Studios.
(b) Company grants to Crystalline Studios with respect to the Video a limited, non-exclusive license to exhibit the Video to prospective clients for demonstration purposes only, to include portions of the Video in Crystalline Studios’s promotional reel, and for home use only. Crystalline Studios may not copy or make any use of the Video other than as specifically set forth in this letter agreement. Company agrees that Crystalline Studios may retain one (1) copy of any and all original video tape and the completed master for the purposes set forth in this provision.
11. REPRESENTATIONS AND WARRANTIES
(a) Crystalline Studios warrants and represents, on behalf of itself and the individuals employed by it, that all work supplied by Crystalline Studios shall be wholly original and prepared specifically for the Video and shall not infringe upon or violate the rights of privacy or publicity of, or constitute a libel or slander against, or violate any common law or any other rights of, any person, firm or corporation and that no Materials, as hereinafter defined, furnished or selected by Crystalline Studios, or any use thereof, will violate any law or infringe upon or violate the rights of any person or entity. “Materials,” as used in this clause means all musical, dramatic, artistic and literary materials, ideas and other intellectual properties contained in the Video supplied by Crystalline Studios.
(b) Company warrants and represents, on behalf of itself and the individuals employed by it, that all work supplied by Company shall be not infringe upon or violate the rights of privacy or publicity of, or constitute a libel or slander against, or violate any common law or any other rights of, any person, firm or corporation and that no Materials, as hereinafter defined, furnished or selected by Company, or any use thereof, will violate any law or infringe upon or violate the rights of any person or entity. “Materials,” as used in this clause means all musical, dramatic, artistic and literary materials, ideas and other intellectual properties contained in the Video supplied by Company.
(c) Crystalline Studios and Company warrant and represent that they have the right and power to enter into and fully perform this Agreement.
Crystalline Studios and Company agree to indemnify, defend and hold each other harmless from any losses, claims, damages, expenses (including reasonable counsel fees and legal costs), arising out of or in connection with any breach by the other party of any above-mentioned warranty, representation or this agreement and each will promptly reimburse the other and/or its licensees on demand for any payment made at any time after the date hereof in respect of any liability or claim for which such party or its licensees are entitled to be indemnified hereunder.
Crystalline Studios will obtain sufficient production insurance as is customarily obtained for a video of this type, size and kind and will carry public liability and property damage insurance in a minimum amount of one million ($1,000,000) dollars to insure against the risks assumed by Crystalline Studios under this clause. Crystalline Studios further represents and warrants that Crystalline Studios is covered by applicable workmen’s compensation insurance as specified in the applicable state’s law where services will be rendered hereunder. Crystalline Studios shall name Company as additional insured under the above-mentioned insurance policies and, if requested by Company, shall deliver certificates of insurance in compliance with the provisions of this clause to Company prior to the commencement of the shooting of principal photography of the Video.
14. CONTROL OF PRODUCTION
Crystalline Studios shall have immediate supervision and control over the production of the Video until delivery thereof to Company, however, Crystalline Studios agrees to keep Company continuously and closely advised of the nature and progress of the production of the Video. Company’s representatives may attend and participate in any or all pre- production, production and post-production meetings, conferences, and other activities in connection with the Video.
15. RELATIONSHIP OF PARTIES
Nothing herein shall be deemed to constitute a partnership or joint venture between Company and Crystalline Studios. In entering into this Agreement, and in providing services pursuant hereto, Crystalline Studios has and shall have the status of an independent contractor and nothing herein contained shall contemplate or constitute Crystalline Studios as Company’s agent or employee and neither Company nor Crystalline Studios shall have any authority to bind the other in any way.
Except for payment of compensation and approvals for the Video to be made by Company, all notices hereunder shall be in writing and shall be given by personal delivery, registered or certified mail or telegraph (prepaid), at the addresses shown above, or such other address or addresses as may be designated by either party. Notices shall be deemed given when mailed or delivered to a telegraph office, except that notice of change of address shall be effective only from the date of its receipt.
17. FORCE MAJEURE
If development, preparation and/or production of the Video is hampered, prevented and/or canceled because of: act of God, inevitable accident, fire, strike, lockout or other labor dispute, riot or other civil commotion, act of public enemy, enactment, rule, order or act of any government or governmental instrumentality (federal, state or local), failure of production facilities, failure or delay of transportation facilities, or other cause of a similar or different nature not within Crystalline Studios’s control, or
by any other so-called “force majeure” event, or by the death, illness or incapacity of the producer, director or any principal cast or crew member, then, Crystalline Studios may, by written notice to Company, postpone the commencement of or suspend the rendition of its services and the running of time hereunder for such time as the disability continues. In such event, Company shall have the right to terminate this Agreement upon written notice. In the event of such termination, Company shall pay compensation to Crystalline Studios as set forth in clause 6(f) herein.
18. ENTIRE AGREEMENT; WAIVER
This Agreement contains the entire understanding of the parties relating to its subject matter. No change of this Agreement will be binding upon the parties unless it is made by an instrument signed by each party. A waiver by either party of any provision of this Agreement in any instance shall not be deemed a continuing waiver for the future. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party.
19. VENUE AND JURISDICTION
This Agreement has been entered into in the Commonwealth of Pennsylvania, and the validity, interpretation and legal effect of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania applicable to contracts entered into and performed entirely within the Commonwealth of Pennsylvania. The Pennsylvania courts (state and federal), only, will have jurisdiction over any controversies regarding this Agreement; any action or other proceeding which involves such a controversy will be brought in those courts and not elsewhere. Any process in any such action/proceeding may, among other methods, be served by a party upon the other party by delivering it or mailing it, by registered or certified mail, addressed to said party at the address first above written or such other address as each may designate pursuant to clause 17 hereof. Any such delivery or mail service shall be deemed to have the same force and effect as personal service within the State of Pennsylvania. This Agreement shall not become effective until executed by all the parties hereto:
iN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have caused this Agreement to be duly executed by their authorized representatives as of the respective date indicated in the Payments, Terms, and Conditions section of the Statement of Work.
20. EQUIPMENT RENTAL TERMS and CONDITIONS
The following terms always apply when gear leaves Crystalline Studios without a Crystalline Studios hired personnel unless otherwise stated.
These terms and conditions form part of a rental contract between you and Crystalline Studios, LLC., and apply to all the equipment rented by you. These terms and conditions constitute additional provisions of and guides to interpretation of the rental contract. In the event of a conflict between these terms and conditions hereof and the rental contract, the terms of the rental contract shall prevail.
TESTING THE EQUIPMENT
Equipment is rented in good working order. All rental equipment may be tested to determine that it is in good working order.
TRANSPORTING THE EQUIPMENT
PICK UP & RETURN of equipment at the rental facility is your responsibility. At your request and expense delivery, pick-up or shipping can be arranged.
YOUR RESPONSIBILITY REGARDING EQUIPMENT
YOU ASSUME ALL RISKS OF LOSS. Once you have taken delivery of the equipment, your responsibility includes, but is not limited to, risks while in transit, in use or storage at all locations named and unnamed, at all studios or while at your own location.
RESTRICTIONS UPON USE OF THE EQUIPMENT
LOCAL USE ONLY UNLESS OTHERWISE AGREED. NO SUBLEASE BY YOU IS PERMITTED. You may not sublease all or any part of the equipment without written consent of Crystalline Studios, LLC. DO NOT REMOVE SERIAL NUMBERS OR COMPANY LOGOS.
RENTAL CHARGES AND LATE CHARGES
ALL RATES ARE SUBJECT TO CHANGE WITHOUT NOTICE. You must return the equipment on the date and time specified in the Rental Contract or be subject to additional charges. IF YOU RETURN THE EQUIPMENT IN DAMAGED OR NON-WORKING CONDITION, the lease period will extended by the shortest reasonable time necessary to repair such damage or replace non-repairable equipment and return the item(s) to Crystalline Studios, LLC’s inventory.
EQUIPMENT DAMAGED OR DESTROYED
LOSS & DAMAGES. Upon return of the damaged equipment, Crystalline Studios, LLC. will make a determination of the extent of the damage and the required repairs. You and /or your representative(s), will have a reasonable amount of time to inspect the damage. In determining whether the equipment should be replaced or repaired, Crystalline Studios, LLC’s judgment shall be conclusive upon you. Should Crystalline Studios, LLC determine that the equipment should be replaced, you will be responsible for the cost to replace the same item or the closest comparably equipped model, at the current retail prices less any discounts available, without deduction for depreciation
LOST STOLEN OR DESTROYED EQUIPMENT
In the event that after delivery to you, any of the equipment is lost, stolen, damaged beyond repair, destroyed or otherwise disappears or is not returned for any reason, you will be responsible for the cost to replace the same item or the closest comparably equipped model, at the current retail prices less any discounts available, without deduction for depreciation.
YOU MUST INSURE ALL THE EQUIPMENT. You shall at your expense, and at all times during the rental, maintain in full force and effect insurance covering all equipment rented, from all sources, for full replacement cost, except vehicles which are at actual cash value, and for the loss of use (rents) of the equipment. Coverage must begin from the time you or your agents accept delivery of the equipment and continue until the time the equipment is returned.
A CERTIFICATE OF INSURANCE must be furnished to Crystalline Studios, LLC prior to taking possession of the equipment. The Certificate must be satisfactory to Crystalline Studios, LLC and cover appropriate Liability Coverage, Property Coverage and Workers Compensation Insurance. Crystalline Studios, LLC must be named as Additional Insured / Additional Loss Payee.