**EXHIBIT 10.6**

** **

**OUT OF THE BLUEPRODUCTIONS, LLC.**

9300 Wilshire Boulevard, Suite508

Beverly Hills, California 90212

 

As of February 17, 2004

As Revised April 15, 2004

 

Five Timz Productions

c/o Daisy Wu/Jack Gilardi

InternationalCreative Management

8942 WilshireBoulevard

Beverly Hills, California 90211

 

Re:                               “***CLOUD 9***” (WorkingTitle) (a/k/a *“Out of the Blue”*)

**Five TimzProductions** f/s/o **D.L. Hughley**as Performer

 

Ladies and Gentlemen:

 

The following will confirm theagreement between **FIVE TIMZ PRODUCTIONS**(“you”) and **OUT OF THE BLUE PRODUCTIONS, LLC.**(“we” or “us”) with respect to your furnishing to us the services of **D.L. Hughley** (the “Employee”) as hereinprovided:

 

1.                                       Youagree to furnish to us the services of Artist upon all of the terms andconditions set forth in this letter agreement and in the agreement attachedhereto as Exhibit “A” and incorporated herein by this reference (both of whichshall together be referred to herein as the “Agreement”).

 

2.                                       Notwithstandingthe fact that Exhibit “A” is drafted in the form of an agreement between Artistand us, it is understood and agreed that you are supplying Artist’s services tous and that we are utilizing said services in accordance with the terms andprovisions of this Agreement.  Inconnection with the above-referenced motion picture, you hereby assign to usall of your rights in Artist’s services and the results and proceeds thereof(including all copyrights therein and all renewals and extensions thereof, ifany), which shall be considered a work for hire.  We shall have all of the rights to Artist’s services and theresults and proceeds thereof to the same extent as if we had employed Artistdirectly under Exhibit “A.”

 

3.                                       Youhereby represent and warrant that (a) you are a duly organized and existing corporationand are presently in good standing under the law of the jurisdiction of yourincorporation and all other jurisdictions in which you transact business, (b)you have a valid, binding and subsisting written agreement with Artist pursuantto which you are entitled to lend the exclusive services of Artist and all ofthe results and proceeds thereof which are or will be required under theAgreement, (c) you have the right to enter into the Agreement and to grant therights, furnish the services and make the representations and warranties setforth herein, (d) you have not made and will not make any grant or assignmentwhich will conflict with or impair the rights and privileges granted to ushereunder, and (e) you are a bona fide corporate business entity establishedfor a valid business purpose within the meaning of the tax laws of the UnitedStates and not a mere sham, conduit or agent for Artist.  You further acknowledge that the foregoingrepresentations and warranties will be relied upon by us for the purpose ofdetermining whether or not it is necessary to make withholdings for U.S.Federal taxes from monies being paid to you hereunder, and you agree that ifwithholdings are not made from said payments, and if thereafter it isdetermined that such withholdings were legally required, you and Artist willindemnify, defend and hold us harmless from and against any and all losses,costs, damages and expenses relating thereto.

 

4.                                       Oncondition that neither Artist nor you is in material breach under this Agreement,we shall pay to you, and not to Artist, as full consideration for all servicesto be rendered and rights granted under this Agreement, all compensationpayable to Artist under Exhibit “A.”  Ifsaid compensation is at least Six Thousand Dollars ($6,000) or such otherminimum applicable amount as is specified in Section 3423 of the CaliforniaCivil Code and Section 526 of the California Code of Civil Procedure, you agreeto compensate Artist at the rate of not less than Six Thousand Dollars ($6,000)per annum or such other minimum applicable amount as is specified in Section3423 of the California Civil Code and Section 526 of the California Code ofCivil Procedure.  If California lawshall be changed to provide for different minimum compensation as aprerequisite to obtaining injunctive relief, the references in the precedingsentence to Six Thousand Dollars ($6,000) or such other minimum applicableamount as is specified in Section 3423 of the California Civil 

 

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Code and Section 526 of theCalifornia Code of Civil Procedure shall be deemed to be references to suchdifferent minimum compensation.

 

5.                                       Subjectto Paragraph 6 hereof, you hereby agree to discharge us from all obligationsimposed on employers including, without limitation, the payment of Artist’scompensation, the withholding and payment of taxes, payments relating tounemployment compensation or insurance, FICA, workers’ compensation, anddisability pensions, and the making of all payments required to be made underany applicable collective bargaining agreement by reason of Artist’s servicesrendered pursuant hereto.  You agree todefend, indemnify and hold us harmless from and against any and all judgments,liabilities, penalties, interest, damages, costs, expenses and attorneys’ fees whichwe may incur by reason of your failure to pay any compensation, tax, or othercontribution required to be paid in respect of Artist’s services hereunder.

 

6.                                       Weshall make all payments to pension, health or welfare funds required pursuantto any applicable collective bargaining agreement by reason of Artist’sservices hereunder, provided, however, that (a) such payment shall not exceedthe amounts which we would have been required to make had we employed Artistdirectly and (b) such payment shall not include Artist’s share of any suchpayment.

 

7.                                       In theevent of a breach or anticipatory breach of this Agreement by you or by Artist,we shall be entitled to seek legal, equitable and other relief against youand/or against Artist in our discretion, and we shall have all rights andremedies against Artist which we would have had if Artist had been directlyengaged by us.  We shall not be requiredfirst to resort to or exhaust any rights or remedies which we may have againstyou before exercising our rights and remedies against Artist.

 

8.                                       If youor your successors in interest should be dissolved, should cease to remainqualified to do business as a corporation for any reason, or should otherwisecease to exist, or for any reason whatsoever should fail, refuse or neglect tocomply with the terms and conditions of this Agreement, Artist shall at ourelection be engaged directly by us for the balance of the term of thisAgreement upon the terms and conditions contained in Exhibit “A.”

 

9.                                       Anyand all notices to be given hereunder shall be given to the parties hereto atthe address set forth above, provided that a copy of any notice to us shall betransmitted to us by mail, facsimile, or telegraph to Out of the BlueProductions, LLC, 9300 Wilshire Boulevard, Suite 508, Beverly Hills, California90212, Attention:  Gray Frederickson,and Out of the Blue Productions, LLC, c/o Robert M. Angel, A ProfessionalCorporation, 939 North Hill Avenue, Pasadena, California 91104, and to anyother address which we may designate at a later time, and a courtesy copy ofany notice to you will be sent to Hirsch Jackoway Tyerman Wertheimer AustenMandelbaum & Morris, 1888 Century Park East, 18th Floor, Los Angeles,California 90067-1722, Attention:  DavidJ. Matlof, Esq., Fax (310) 553-5036 (it being agreed that the inadvertentfailure to send any such courtesy copy of a notice shall not be deemed a breachof this Agreement).  The date of mailingof any notice (whether sent by registered mail, with or without return receiptrequested, certified mail, airmail and/or ordinary mail) or the date the noticeis transmitted from the sender’s facsimile machine, or the date the notice isdelivered to the telegraph office, as the case may be, shall be deemed the dateof service of the notice.

 

10.                                 Notwithstandingthat you are furnishing Artist’s services to us, for the purposes of any andall applicable Workers’ Compensation statutes, an employment relationshipexists between Artist and us such that we are Artist’s special employer and youare Artist’s general employer (as the terms “Special Employer” and “GeneralEmployer” are understood for purposes of Workers’ Compensation statutes).  The rights and remedies, if any, of Artistand Artist’s heirs, executors, administrators, successors and assigns, againstus and/or our officers, directors, agents, employees, successors, assigns orlicenses, by reason of injury, illness, disability or death arising out of oroccurring in the course of Artist’s rendition of services hereunder shall begoverned by and limited to those provided under such Workers’ Compensationstatutes, and neither we, nor our officers, directors, agents, employees,successors, assigns or licensees, shall have any other obligation or liabilityby reason of any such injury, illness, disability or death.  If the applicability of any Workers’Compensation statutes to the engagement of Artist’s services hereunder isdependent upon, or affected by an election on the part of you or Artist, suchelection is hereby made by each of you in favor of such application.

 

11.                                 ThisAgreement shall be construed and enforced in accordance with the laws of theState of California.  You and we consentto the jurisdiction of the courts of the State of California and the courts ofthe United States located in the State of California in connection with anylawsuit arising out of or relating hereto.

 

Pleaseindicate your agreement to the foregoing by signing in the space providedbelow.

 

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|                       | Very truly  yours,                     |
|----------------------------|----------------------------------------|
|                       | **OUT OF THE BLUE  PRODUCTIONS, LLC.** |
|                       |                                   |
|                       | By:                                    | /S/GRAY FREDERICKSON |   |
| ACCEPTED AND AGREED:       |                                   |   |
| **FIVE TIMZ PRODUCTIONS**  |                                   |   |
|                       |                                   |   |
| By:                        | /S/D.L. HUGHLEY                        |   |   |
|                       |                                   |   |
| Title: President & CEO |                                   |   |
|                            |                                        |  |  |  |  |  |

 

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As of February 17, 2004

As Revised April 15, 2004

 

OUT OF THE BLUE PRODUCTIONS, LLC.

9300 Wilshire Boulevard, Suite 508

Beverly Hills, California 90212

 

Gentlemen:

 

I have read the attached letteragreement (the “Agreement”) dated as of February 17, 2004, as revised April 15,2004, from you to Five Timz Productions (“Lender”) and, as an inducement to youto enter into the Agreement, I hereby represent, warrant and agree as follows:

 

1.                                       I amfamiliar with all of the terms and conditions of the Agreement and I herebyconsent to the execution thereof.  Ishall perform and comply with all of the terms, conditions and obligations ofthe Agreement as if I had executed it directly as an individual, even if theemployment agreement between me and Lender should hereafter expired, terminateor be suspended.  I, as an individual,hereby join in and confirm all grants, representations, warranties andagreements made by Lender under the Agreement.

 

2.                                       UnlessI am deemed substituted for Lender as a direct party to Exhibit “A” pursuant toparagraph 4 below, I shall look solely to Lender and not to you for the paymentof compensation for my services and for the discharge of all other obligationsof any employer with respect to my services under the Agreement.

 

3.                                       In theevent of a breach or anticipatory breach of the Agreement by Lender or by me,you shall not be required first to resort to or exhaust any rights or remediesagainst Lender before exercising your rights and remedies against me.

 

4.                                       IfLender or its successors in interest should be dissolved or should otherwisecease to exist, or for any reason should fail, refuse or neglect to perform,observe or comply with the terms and conditions of the Agreement I shall, atyour election, be deemed to be employed directly by you for the balance of theterm of the Agreement upon the terms and conditions set forth in Exhibit “A”.

 

5.                                       If youshall serve Lender with any notices, demands or instruments relating to theAgreement, or to the rendition of my services thereunder, service upon Lendershall also constitute service upon me.

 
|   |   |   |   |   |   |   | Very truly yours, |   |
|--------|--------|--------|--------|--------|--------|--------|-------------------|--------|
|   |   |   |   |   |   |   |              |   |
|   |   |   |   |   |   |   |              |   |
|   |   |   |   |   |   |   | /S/D.L. HUGHLEY   |   |
|   |   |   |   |   |   |   | **D.L. HUGHLEY**  |   |

 

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#### **EXHIBIT“A”**

#### ** **

#### **SAG MOTION PICTURE CONTRACT – WEEKLYPERFORMER**

 

AGREEMENT made as of February 17, 2004,as revised April 15, 2004, between **OUT OF THEBLUE PRODUCTIONS, LLC** (“Producer”), 9300 Wilshire Boulevard, Suite 508, Beverly Hills,California 90212, Attention:  GrayFrederickson, and **D.L. HUGHLEY**(“Artist”), c/o International Creative Management, 8942 Wilshire Boulevard, 5thFloor, Beverly Hills, California 90211, Attention:  Daisy Wu/Jack Gilardi (the “Agreement”).

 

Re:                               ***“CLOUD 9”***(WorkingTitle) (a/k/a *“Out of the Blue”*)

 

This will confirm the pay-or-playagreement (“Agreement”) between Producer and Artist with respect to the actingand related services of Artist in and in connection with the Picture, asfollows:

 

A.                                 ConditionsPrecedent:  Notwithstandinganything to the contrary contained in this Agreement, Producer’s obligationsunder this Agreement are subject to the fulfillment of all of the followingconditions (each, a “Condition Precedent” and collectively, “ConditionsPrecedent”):

 

I.                                         Artist’sproviding Producer with all documents which may be required by any governmentagency or other­wise for Artist to render services hereunder for the fullperiod during which such services may be required by Producer, including,without limitation, if applicable, a completed (to Producer’s satisfaction) INSForm I-9 (Employment Eligibility Verification Form), original documentsestablishing Artist’s employ­ment eligibility and any and all other visas, workpermits and other documents establishing Artist’s right to enter and work inthe applicable jurisdiction(s);  and

 

II.                                     Artist’squalifying for all insurance which Producer deems necessary (*e.g.*, life, health, accident and/or castinsurance) at customary rates and subject only to customary exclusions anddeductible amounts (if any), provided that Artist may pay any excess premiumsand such condition shall be deemed satisfied as of the first day of Artist’sservices during principal photography of the Picture.

 

1.                                       EMPLOYMENT:  Producer hereby employs Artist on apay-or-play basis and Artist agrees to perform services as a performer in therole of “Tenspot” in the feature length theatrical motion picture currentlyentitled ***“CLOUD 9”***(a/k/a *“Out of the Blue”*) (the“Picture”).  Picture principalphotography is currently scheduled to commence on or about April 15, 2004.  The start date for Artist’s services iscurrently contemplated to be approximately April 19, 2004 (i.e., not earlierthan April 12, 2004 and not later than April 26, 2004).  It is understood that Artist may be requiredto render preparatory services (including one [1] free wardrobe day and one [1]free rehearsal day) prior to the start date for Artist’s services.

 

2.                                       COMPENSATION

 

(a)                                  Uponcondition that Artist faithfully performs all of the material terms andconditions of this Agreement in connection with the Picture, and subject toProducer’s usual and customary rights of suspension and/or termination in theevent of Artist’s material breach or incapacity, or the occurrence of an eventof force majeure for which all other cast members are likewise suspended orterminated, Producer shall pay Artist the sum of One Hundred Thousand Dollars($100,000) (“Guaranteed Compensation”), which amount shall include payment forArtist’s services for [i] four (4) work or production weeks in the Los Angelesmetropolitan area tentatively scheduled to commence approximately April 19,2004 (i.e., not earlier than April 12, 2004 and not later than April 26, 2004),[ii] one (1) consecutive free week, and [iii] subject to Artist’s professionalavailability, three (3) non-consecutive looping, dubbing, retakes, added scenesand re-shooting days (collectively, “Guaranteed Period”).  Producer shall deposit the GuaranteedCompensation in an escrow account with Artist’s agents, International CreativeManagement, not later than the commencement of Artist’s services in principalphotography in accordance with mutually approved escrow instructions, and theGuaranteed Compensation shall be payable from such escrow account on a weeklybasis, as and when Artist renders services hereunder.  If Artist’s services are used in work days in excess of theGuaranteed Period for other than looping, dubbing, retakes, added scenes andre-shooting, Producer shall pay Artist additional compensation on a pro ratadaily basis (based on four [4] five [5]-day weeks).  In addition to the Guaranteed Compensation, subject to Artist notbeing in material breach of Artist’s obligations hereunder and appearingrecognizably in the Picture as initially released commercially, Artist shall beentitled to receive contingent compensation of two and one-half percent (2.5%)of one hundred percent (100%) of Producer’s share of net profits from theexploitation of the Picture, with no other participant in Producer’s netprofits from the Picture to receive a more favorable definition of “netprofits” and such definition to be negotiated in good faith within Producer’scustomary parameters for artists of comparable stature in the motion pictureindustry to Artist.

 

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(b)                                 To theextent permitted by the 2001 Screen Actors Guild Basic Agreement (“SAGAgreement”), including any applicable Schedule thereof, and on no lessfavorable a basis as is applicable to the other three (3) lead performers inthe Picture, the Guaranteed Compensation shall constitute a pre-payment for alladditional sums payable pursuant to the SAG Agreement (*i.e.*, all meal penalties, forced calls,saga sells, reprises, “premium” days, etc.). Behind-the-scenes footage, “making of” footage, and clips from thePicture and (subject to clearance from the owners thereof) from other motionpictures for which Artist has rendered services may be utilized in connectionwith such promo­tional films and trailers without additional compensation toArtist, provided that the use thereof shall be subject to Artist’s writtenapproval which shall not be unreasonably withheld or delayed.  For each foreign television use,supplemental market use, or other use (other than theatrical exhibition) of thePicture which contains the results and proceeds of Artist’s services, Artistshall be paid the minimum additional compensation, if any, required by the SAGAgreement.

 

(c)                                  Artistwarrants and represents that Artist is eligible to be employed in the UnitedStates in compliance with the Immigration Reform & Control Act of1986.  As a condition precedent toArtist’s receipt of any payment hereunder, Artist will complete the requiredI-9 form and will present such form to Producer along with the requisitedocumentation, as specified in the form, that Artist may be lawfully employed.

 

3.                                       CREDIT:

 

(a)                                  Artistshall be accorded on a separate card in third star billing below the title inthe main titles of the Picture if there are credits in the main titles(otherwise in the equivalent position in the end titles), with no member of thecast to receive a larger credit and no other performer to receive credit abovethe title.  Subject to the previoussentence, Producer shall determine the size, placement, nature and all othercharacteristics of such billing in Producer’s sole discretion.

 

(b)                                 Subjectto customary exclusions, Artist shall be accorded billing of the same relative sizeand in the same position as hereinabove set forth in the billing block and inall paid print advertisements (other than group advertisements [*i.e.*, where more than one (1) Picture isadvertised] and special advertisements [such as congratulatory advertisementsand advertisements relating to prizes, awards, or personal appearances]) issuedunder the control of and paid for by Producer in which any other performerreceives credit in connection with the Picture.  Notwithstanding the foregoing, [1] Producer shall not beobligated to accord Artist billing in any paid advertisement in which no othercast member in the Picture is accorded billing, and [2] Producer shall useArtist’s name, photograph or likeness in any paid print advertisement or“excluded ad” if the name, photograph or likeness, as applicable, of any othermember of the principal cast of the Picture appears in the applicable printadvertisement or “excluded ad,” unless such excluded ad relates solely to theother cast member (such as a congratulatory ad or an ad relating to a personalappearance of such cast member).  Theforegoing credit obligations shall apply to Producer’s use of Artist’s name (asopposed to Artist’s likeness) in the billing block of any advertisements,publicity (e.g., one-sheets), or home video packaging related to the Picture.

 

(c)                                  Producershall have no obligation to accord Artist billing in trailers relating to thePicture, provided, however, that Producer shall have the right, exercisable inProducer’s sole discretion, to accord any such billing.

 

(d)                                 It isunderstood that the billing obligations set forth in this Paragraph 3 shall notbe applicable if the results and proceeds of Artist’s services are not utilizedin connection with the Picture.  Anyinadvertent failure to comply with the billing requirements hereof shall not bedeemed a breach of this Agreement; provided, however, that in the event of anyfailure or omission by Producer (or any third party) to accord proper credit,Producer shall, if Artist notifies Producer in writing of such failure oromission (specifying in such notice all information in Artist’s possessionrelative thereto), (i) exert its commercially reasonable best efforts tocorrect such failure or omission if such failure or omission relates to a creditaccorded by Producer, it being understood that any such correction shall bemade only on a prospective basis, and/or (ii) exert its commercially reasonablebest efforts to notify any applicable third party of their failure or omissionof such credit.  Producer shall usereasonable efforts to notify third parties of the credit provisions of thisAgreement and to attempt to bind such third parties contractually to complytherewith.

 

4.                                       MANNEROF SERVICE:  Artist shalldevote Artist’s best talents, efforts and abilities in connection with Artist’sservices and shall render services in a competent, painstaking, artistic,timely and professional manner.  Artistshall render all services under Producer’s supervision, direction andcontrol.  Artist shall comply promptlyand faithfully with all of Producer’s instructions, directions, requests, rulesand regulations.  If and when Producerrequests, Artist shall report for wardrobe fittings, photo sessions,hairdressing, make-up, production conferences and the making of stills.  Without limiting the foregoing, Artist shallbe available for a photography session at Producer’s designated photo gallerybefore, during, or after production, for up to five (5) in-person interviewsand two (2) half-days of telephone interviews before, during, or after 

 

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production, as arranged byProducer’s press and publicity representatives subject to the approval ofArtist (which approval shall not be unreasonably withheld or delayed) and toArtist’s professional availability.

 

5.                                       DRESSINGFACILITY; CELLULAR TELEPHONE; LOCAL TRANSPORTATION; WARDROBE:  While Artist is rendering services inconnection with the Picture, Producer shall provide Artist with (a) a dressingfacility which will be not less than one-third (1/3) of a three banger and noless favorable than the dressing facility accorded to other cast membersreceiving a dressing facility in a three banger or comparable or smallerdressing facility, (b) a cellular telephone for Artist’s exclusive use, and (c)reasonable first class local transportation to and from Artist’s residence andthe Picture locations which shall be no less favorable than the localtransportation furnished to any other cast member receiving local transportationin connection with the Picture. Inasmuch as all locations to be used for the Picture will be in the LosAngeles area, there will be no air transportation, hotel accommodations or perdiem required for Artist’s services, but if a distant location is utilizedwhich is more than fifty (50) miles from Los Angeles, Producer and Artist shallnegotiate in good faith with respect to any necessary travel, accommodationsand per diem applicable to any such distant location.  Producer shall supply “character” or “period” costumes, modernwardrobe and wearing apparel reasonably necessary for the portrayal of Artist’spart.

 

6.                                       OWNERSHIPRIGHTS AND RIGHTS TO EDIT: Artist grants to Producer perpetually and exclusively all rights of anykind and character whatsoever in and to services and performances under thisAgreement and in and to the results and proceeds of those services andperformances in connection with the Picture only.  Producer shall have the perpetual and exclusive right toreproduce and license others to reproduce, exhibit and/or distribute by anymethods or combination of methods, any part or all of Artist’s acts, poses,appearances and voice in the Picture. Artist agrees that Artist shall have no right, title or interest in orto the Picture or any material contained in the Picture, including withoutlimitation the title, format and dialogue, regardless of any contributions madeby Artist.  Any material written orcreated by Artist for Producer shall be considered a work made for hire.  Artist waives all moral rights of authors (*droit moral*) which the laws of anyjurisdiction may now or later recognize, and the Picture may be edited, cut,modified and lengthened from time to time as its licensees and/or assigneeselect.  Furthermore, subject to affordingArtist the first opportunity to dub Artist’s performance in the Englishlanguage on a minimum of two (2) weeks advance notice, Producer may “dub”Artist’s voice and/or use a double instead of Artist as and when Producer mayelect to the extent permitted by the SAG Agreement.

 

7.                                       EXCERPTS;TRAILERS:  Producer mayrequire Artist to perform in trailers for the Picture during principalphotography and may utilize film clips or sound track of Artist’s services inthe Picture in trailers in perpetuity to promote the Picture, and Artist shallnot be entitled to any additional compensation therefor.

 

8.                                       EXHIBITIONRIGHTS:  Producer shallhave the unlimited, perpetual right throughout the world to exhibit the Picturein whole or in part in theaters, on television, in supplemental markets (asdefined in the SAG Agreement), on the Internet, and by any and all othermethods now known or discovered in the future, subject to the terms andconditions of this Agreement and of the SAG Agreement.  Without limiting the foregoing, Producer maymake and use and authorize others to use the Picture for audition, file, andreference purposes, and for audience previews and other screenings.

 

9.                                       NAME,BIOGRAPHY AND LIKENESS:

 

(a)                                  Artistgrants to Producer the exclusive perpetual right to use and to license the useof Artist’s name and likeness (subject to Paragraph 9(b) below) in connectionwith the Picture and in the advertising, promotion, publicity or otherexploitation thereof by any means now or hereafter known, provided, however,that in no event shall Artist’s name and likeness be used as a directendorsement by Artist of any product or service without Artist’s prior writtenconsent.

 

(b)                                 Artistshall be entitled to approve the still photographs and likenesses of Artistused in the advertising and publicity materials (or any other permitted uses ofphotographs and likenesses) issued by or under the control of Producer inaccordance with and subject to the following:

 

[1]                                  StillApproval.  Producer shallsubmit to Artist a reasonable number of still photographs (“Stills”)  (which may be on “proof” or “contact’’sheets) which Producer intends to use in connection with the advertising and/orpublicity for the Picture.  Artist shallapprove at least fifty percent (50%) of the Stills within five (5) businessdays after Artist’s receipt thereof, or such shorter period (but not less thanforty-eight [48] hours) as Producer may require due to marketingexigencies.  Artist’s failure to notifyProducer of Artist’s disapproval of any Stills received by Artist within suchfive (5) business day (or shorter, if applicable) period shall be deemed toconstitute Artist’s approval of the Stills submitted; provided, however, thatif Artist approves fewer than fifty percent (50%) of the Stills so submitted,Producer may only deem 

 

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approved by Artist such numberof Stills as equal the difference between fifty percent (50%) and thepercentage of Stills from such submission actually approved by Artist.

 

[2]                                  LikenessApproval.  Artist shall havethe right to approve one hundred percent (100%) of all non-photographiclikenesses of Artist for use in connection with Producer’s advertising and/orexploitation of the Picture.  If Artistdisapproves a non-photographic likeness, then Artist will advise Producer ofArtist’s specific objections to the disapproved non-photographic likenesswithin five (5) business days after submission thereof (or such shorter timeperiod as Producer may require due to marketing exigencies, but not less thanforty-eight [48] hours). Artist’s failure to notify Producer of Artist’sdisapproval of any non­-photographic likenesses received by Artist within suchfive (5) business day (or shorter, if applicable) period shall be deemed to constituteArtist’s approval of the non-photographic likenesses submitted.  If Artist disapproves a non-photographiclikeness, Artist shall specify precisely which elements of Artist’s physicalappearance (for example, nose, hair and eyes, as opposed to position ordimension) as presented in the non-photographic likeness Artistdisapproves.  Producer shall thereaftercontinue to submit to Artist corrected likenesses and Artist shall approve ordisapprove same (but strictly in accordance with the foregoing provisions ofthis Paragraph 9(b)[2]) until Artist approves such likeness; provided, however,that if due to Producer’s marketing exigencies and deadlines Producer does nothave time to continue such resubmission process, then provided Artist has hadat least two (2) opportunities to specify which elements of the likeness Artistdisapproves and Producer has revised the likeness to correct such elements atleast two (2) times, then upon such correction, such non-photographic likenessshall be deemed approved.  Once Artistapproves or is deemed to have approved any non-photographic likenesses, itshall be deemed approved for all purposes in connection with the exploitationof the Picture (except purposes expressly prohibited by this Agreement).

 

(c)                                  Theuse of Artist’s name and/or likeness in connection with merchandising,commercial tie-ins or tie-ups, or soundtrack shall be subject to Artist’swritten approval (which shall not be unreasonably withheld or delayed) in eachinstance.  Producer agrees not to utilizeArtist’s name or likeness in connection with merchandising or commercialtie-ins without Artist’s consent, it being agreed, however, that Artistconsents to the use of Artist’s name in the billing block.  If any use of Artist’s name and likeness isin connection with any merchandising or commercial tie-in or tie-up activitiesor the soundtrack, Producer shall pay to Artist five percent (5%) of onehundred percent (100%) of any money or financial consideration (after deductingProducer’s expenses in connection therewith) which Producer or any parent,subsidiary, or officer of Producer derives from such use.  No royalty will be payable solely as aresult of Artist’s name appearing in a list of cast credits in a billing blockon any merchandising or commercial tie-ins or tie-ups.

 

(d)                                 Biography: Notlater than thirty (10) days after commencement of Artist’s services hereunder,Artist shall provide Producer with an approved biography for the use byProducer and its licensees, successors and assigns in connection with credits,advertising, publicity and exploitational material relating to the Picture andArtist’s services therein, provided that this shall not limit Producer’s rightto refer to Artist’s prior entertainment industry credits.  If Artist does not provide such biography ina timely manner after a written request from Producer, Producer may utilize itsown biography of Artist.

 

10.                                 ASSIGNMENTAND LOANOUT OF SERVICES: Producer may assign this Agreement in whole or in part to any person,firm, or corporation, provided, however, that no such assignment shall relieveProducer of any of its obligations hereunder. Artist may not assign this Agreement or any of Artist’s rights and/orobligations hereunder.  At any time andfrom time to time Producer may lend Artist’s services hereunder to any person,firm, or corporation.

 

11.                                 PAY ORPLAY:  Producer shall notbe obligated to produce, exhibit, distribute, broadcast or exploit the Pictureor to utilize any rights granted by Artist to Producer or any materials furnishedby Artist.  If Producer elects not toutilize Artist’s services or to exhibit, distribute, or broadcast the Picture,Producer shall have the right to discharge its obligations completely by payingArtist the Guaranteed Compensation provided for in this Agreement.

 

12.                                 MAIL:  Any mail addressed to Artist will beforwarded to Artist at the address stated on the first page of this Agreement.

 

13.                                 RELIEF;REMEDIES:  Artist agrees thatthe services to be furnished by Artist, and the rights and privileges grantedto Producer under this Agreement, are of a special, unique, unusual,extraordinary and intellectual character which gives them a peculiar value, theloss of which cannot reasonably or adequately be compensated for in damages atan action in law, and that Artist’s failure to perform Artist’s obligationsunder this Agreement will cause Producer irreparable injury and damage.  Artist, therefore, agrees that Producershall be entitled, as a matter of right, to injunctive relief against Artist toprevent Artist from furnishing the same or similar services and/or grantingsimilar and/or conflicting rights to others. If Artist 

 

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breaches any of Artist’srepresentations, warranties or agreements under this Agreement and does notcure such breach within forty-eight hours (48) hours after notice thereof,Producer may terminate and/or suspend this Agreement.  If this Agreement is suspended pursuant to this Paragraph 13, itwill remain in full force and effect, except that Artist’s services will bepostponed to a date selected by Producer and Artist will not be entitled to anycompensation during any such suspension. This Agreement may be terminated during any such suspension.  Producer’s rights and remedies under thisAgreement shall be cumulative, and the exercise by Producer of one or more ofthe rights or remedies shall not preclude the exercise by Producer of any otherright or remedy under this Agreement, at law or in equity.

 

14.                                 ARTIST’SDISABILITY:  Producer shallhave the right to suspend and/or terminate this Agreement by giving Artistnotice of suspension and/or termination if during production Artist suffers anymental or physical disability, any material alteration in Artist’s facial orphysical appearance, or any impairment of Artist’s voice which, in Producer’sreasonable opinion, interferes with the proper performance of any or all ofArtist’s obligations under this Agreement, or Artist or Producer receives or arestraining order or injunction with respect to an actual or alleged contractor commitment of Artist.  If thisAgreement is suspended under this Paragraph 14, Producer will have the rightswith regard to suspension stated under Paragraph 13 above.

 

15.                                 FORCEMAJEURE:  If the productionof the Picture is prevented, suspended, postponed or discontinued by reason ofa governmental regulation or order, strike, war, civil unrest, fire, earthquakeor similar act of God or by the failure or refusal of a cast member or of thedirector to perform, or by any other cause of a similar or dissimilar naturebeyond the control of Producer (“Force Majeure”), Producer shall have theexclusive right, subject to the SAG Agreement, to suspend or terminate Artist’semployment at any time during the continuation of such condition, and further,Producer shall have the exclusive right to extend the Guaranteed Period for aperiod of time equal to the continuation of such Force Majeure condition.  Producer shall not selectively suspend orterminate Artist for a Force Majeure event. If a suspension of Artist for Force Majeure continues for a minimum ofeight (8) weeks, Artist may terminate this Agreement by written notice toProducer unless Producer reinstates Artist with pay within one (1) week afterreceipt of such proposed termination notice from Artist.

 

16.                                 WARRANTIES:  Artist agrees, represents, and warrantsthat:  Artist has the right to enterinto this Agreement and to grant the rights granted to Producer; Artist neitherhas nor will make any contractual or other commitments which would conflict orinterfere with the rights granted Producer; Artist is a member of and willremain a member of the Screen Actors Guild; and if Artist provides any ideas,creations, literary, musical or artistic material (collectively andindividually referred to as “artistic material”), the artistic material will beArtist’s own and original creation except for matters in the public domain andthe use of the artistic material will not infringe upon or violate any rightsof any kind or nature whatsoever of any person or entity.  Producer represents and warrants thatProducer is a signatory to the SAG Agreement.

 

17.                                 CONSULTATIONREGARDING OTHER PERSONNEL: Producer shall meaningfully consult with Artist regarding the engagementof hairdresser, makeup artist and wardrobe personnel for Artist and Artist’sstand-in to be utilized for the Picture, and use good faith efforts to attemptto incorporate Artist’s input with regard to such personnel within the timelimits of pre-production exigencies and the parameters of the Picture budget;provided, however, in the event of any disagreement with respect to the subjectmatter of such consultations, Producer’s determination shall be final andcontrolling and no casual, inadvertent or unintentional failure by Producer toconsult with Artist hereunder (by reason of shortage of time or otherwise) willbe deemed to be a breach of this Agreement by Producer.  Artist acknowledges that such consultationshave occurred and, notwithstanding the foregoing, Producer shall have allbusiness controls in connection with the development, production andexploitation of the PIcture.

 

18.                                 INDEMNITIES:  Artist agrees to indemnify and hold harmlessProducer, distributor of the Picture (the “distributor”), the distributor’sparent and subsidiary companies, and the officers, directors, attorneys, agentsand employees of each from and against any and all claims, damages,liabilities, costs and expenses, including, but not limited to, reasonableattorneys’ fees arising out of (a) any breach of any representation, warrantyor agreement made by Artist in this Agreement; (b) the use or dissemination ofany materials furnished by Artist, and/or (c) any acts done or words spoken byArtist in connection with the production, rehearsal, recording or broadcastingof the Picture, other than acts done or words spoken by Artist at Producer’sdirection.  Producer’s approval ofmaterial supplied by Artist shall not constitute a waiver of this indemnity.  Producer will indemnify and hold Artistharmless from and against any and all claims, damages, liabilities, costs andexpenses, including reasonable attorneys’ fees arising out of the use of anymaterials that Producer or its employees supplies to Artist in the Picture, andthe development, production and exploitation of the Picture.  The indemnitee shall give the indemnitorprompt written notice of any claim or lawsuit to which the indemnificationagreement in this Paragraph 18 relates. The indemnitee shall have the right to participate in the defense and/orsettlement of any lawsuit and/or claim for which indemnitee is beingindemnified.  If the indemnitee settlesany claim, demand or action for which indemnity is provided, without the priorwritten 

 

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consent of the indemnitor, theindemnitor shall be released from any and all liability under theindemnity.  When Artist’s indemnity ofProducer applies, Producer may elect to employ Producer’s own attorney(s) insteadof using the services of Artist’s attorney(s) but Artist’s indemnity shallstill apply.

 

19.                                 PUBLICITY:  Artist shall not authorize the publishingof, or furnish material relating to the Picture, or Artist’s services inconnection with the Picture, without the prior written consent of Producer.

 

20.                                 UNIONCOMPLIANCE:  The SAG Agreementshall govern the terms and conditions of Artist’s services.  If there is any inconsistency between thisAgreement and the SAG Agreement, the SAG Agreement shall prevail and thisAgreement shall be deemed modified to the minimum extent necessary to resolvethe conflict and shall continue in full force and effect.  Producer shall be entitled to the maximumrights, privileges, and benefits conferred upon or permitted to Producer underthe SAG Agreement for the minimum payments required, except as otherwisespecifically provided in this Agreement.

 

21.                                 ARBITRATIONOF DISPUTES:  If any dispute orcontroversy arises between the parties hereto with reference to this Agreement,or the employment herein provided for, such dispute or controversy shall besettled and determined by conciliation and arbitration in accordance with theconciliation and arbitration provisions of the SAG Agreement, and suchprovisions are hereby referred to and by such reference incorporated herein andmade a part of this Agreement with the same effect as though the same were setforth herein in detail.

 

22.                                 PERSONALAPPEARANCES:  When Producer sorequests, and subject to Artist’s availability, Artist shall make personalappearances at such places and on such occasions as Producer or the distributorof the Picture may determine in connection with the Picture, including withoutlimitation promotional activities, interviews, and television guestappearances.  Artist shall be providedwith reasonable first class travel (if used and if available) if necessary inconnection with any such personal appearance and all out-of-pocket expensesreasonably incurred in connection with such appearances.

 

23.                                 ENFORCEABILITYOF CONTRACT:  If a court or othertribunal having jurisdiction determines any provision of this Agreement to bevoid or unenforceable, the provision in question shall in no way affect anyother provision of this Agreement, and this Agreement shall continue in fullforce and effect.  Neither theexpiration of this Agreement nor any termination or suspension of it shallrelieve Artist of Artist’s obligations with respect to any representation,warranty or indemnification agreement made under this Agreement.  No waiver by any party to this Agreement ofa breach of any obligation imposed by this Agreement or of a breach of anyrepresentation or warranty made under this Agreement shall be deemed to be awaiver of any preceding or succeeding breach of the same or of a differentobligation, representation or warranty. Failure on the part of any party to complain of any failure to act ofthe other party or to declare the other party in default, irrespective of howlong the failure continues, shall not constitute a waiver by the party of itsrights under this Agreement.

 

24.                                 INSURANCE:  Producer may secure life, health, accident,cast or other insur­ance covering Artist, or Artist and others, and Artistshall have no right, title or interest in or to such insurance.  As soon as possible after Artist’s executionof this Agreement, Artist shall submit to usual and customary medicalexaminations for Producer’s insurance purposes (including, without limitation,self-insurance) and will sign such applications and/or other documentsreasonably required.  Artist may haveArtist’s own physician present at any such examination at Artist’s ownexpense.  Prior to commencement ofprincipal photography Producer may terminate this Agreement without any furtherobligation or liability of any kind to Artist (other than payment to Artist ofany unpaid compensation under this Agreement which has, as of the date of suchtermination, accrued and been earned by Artist in accordance with the terms andconditions of this Agreement) if: (i) any such examination establishes asubstantial doubt as to Artist’s physical ability to perform and/or completeArtist’s services hereunder; or (ii) if cast insurance cover­ing Artist cannotbe obtained for normal premiums and without exclusions (other than minor andcustomary exclusions), provided, however, that if Artist pays the amount of theexcess premiums above the customary premiums for cast insurance, Producer willnot terminate Artist for failure to qualify for customary cast insurancepremiums.  From the date two (2) weeksbefore the scheduled start date of principal photography until comple­tion ofall services required of Artist hereunder, Artist will not ride in anyaircraft, other than as a passenger on a scheduled flight of a United States ormajor international air carrier maintaining regularly published schedules, orengage in any extrahaz­ardous activity without Producer’s written consent ineach case.  Artist shall be coveredunder Producer’s policies of errors and omissions and general liabilityinsurance (if any) for the Picture, subject to all of the terms and limitationsset forth in such policies; provided, however, that Producer shall have noobligation to obtain or maintain any such policy or policies.

 

25.                                 NOTICES:  All notices which Producer is required ormay desire to serve upon Artist in connection with this Agreement may be servedby delivering the notice to Artist personally in writing or orally or bysending the notice to Artist by 

 

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mail, facsimile or telegraphaddressed to Artist at the address specified above, with a courtesy copy toHirsch Jackoway Tyerman Wertheimer Austen Mandelbaum & Morris, 1888 CenturyPark East, 18th Floor, Los Angeles, California 90067-1722, Attention:  David J. Matlof, Esq., Fax (310) 553-5036(it being agreed that the inadvertent failure to send any such courtesy copy ofa notice shall not be deemed a breach of this Agreement), or at any otheraddress which Artist has designated in writing.  Artist may serve any notice which Artist may be required or maydesire to serve upon Producer by sending the notice to Producer at the addressabove or at any other address which Producer has designated in writing.  The date of mailing of any notice (whethersent by registered mail, with or without return receipt requested, certifiedmail, air mail or ordinary mail) or the date the notice is deposited fortransmission by facsimile or telegraph, as the case may be, shall be deemed thedate of service of the notice.

 

26.                                 HEADINGS:  The headings of this Agreement are merelyfor convenience and shall have no legal effect or significance.

 

27.                                 GOVERNINGLAW; COMPLETE UNDERSTANDING: This Agreement shall be construed and enforced in accordance with thelaws of the State of California applicable to agreements made and to beperformed wholly within the State of California regardless of where performanceof this Agreement may occur.  ThisAgreement sets forth the complete understanding between Artist and Producerwith respect to the subject matter hereof, and all prior agreements, whetherwritten or oral, have been merged in this Agreement.  This Agreement may only be modified by a written instrument whichthe party to be charged has signed. Artist acknowledges that neither Producer nor any of its agents, employeesor representatives has made any representations or promises which are notexpressly contained in this Agreement.

 

ACCEPTED AND AGREED:

 
|             | **OUT OF THE BLUE  PRODUCTIONS, LLC.** |
|------------------|----------------------------------------|
|             |                                   |
|             |                                   |
| /S/D.L. HUGHLEY  |                                   | By: | /S/GRAY FREDERICKSON |   |
| **D.L. HUGHLEY** | **Its:**                               |   |   |
|                  |                                        |  |  |  |

 

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