Film option agreement

An agreement granting an option to purchase the rights in an existing original screenplay for a feature film. The option is for an initial period, which the potential purchaser can extend by a further set period. The rights-owner receives a one-off option fee which is offset against any income received after the exercise of the option, plus (if the option is extended) an extension fee which cannot be offset in this way. The agreement contains provisions giving the owner a share of net profits from any film that is made on the basis of the screenplay, including any remake or sequel.