I need some serious advice on this agreement issue...

 
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Koa
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Joined: 04 Apr 2009
Posts: 22
Location: Puerto Rico

PostPosted: Thu Apr 16, 2009 5:29 pm    Post subject: I need some serious advice on this agreement issue... Reply with quote

I mentioned a game which I am involeved with. The creator of the game sent out an "agreement" to everyone on the game. I refuse to sign it. It has a ton of grey areas and loopholes that a tank can go thru them.

I spoke with him on the phone yesterday and his reasoning is that he cannot give me exact numbers because he has no idea how many people will eventually be working on the game and potential investors will complicate matters. I understand his predicament.

Yet, the way he has written the "agreement", he can place me from a percentage basis and convert me to a paid employee. If he does that, I have no idea how much he is going to pay me and on top of that, if he decides to convert me to an employee or work for hire, then he can potentially (read: will) take and own all copyrights on all images submitted for an amount he deems fair.

But I do understand one point he has. He needs investors and an investor is not going to put up any money if they think I might get miffed, up and leave the project and decide to take my copyrights with me. In other words, any images used and scanned are lost and so is the work they have done to that point.

His concern is that several people have already left the project and he's worried that I may do the same. He wants to keep all work. I say he can lease the work.

Long story short, the "agreement" is below. What I need to do is write and sign something stating that I will not pull the images should I leave the project (should I get pissed, die, sickness or whatever). He needs to assure his potential investors that the work will remain with the game. But he's not giving me any guarantees on payment etc. Read the "agrrement" and tell me what you think. Is there is a way to satisfy him without screwing myself in the process especially since he is not giving me a definite amount of payment (or even if I will get paid)?

Hi Koa,
Here is the agreement I am asking all team members to sign. I removed any reference to ownership because you and I will be dealing with that in a separate photography agreement (in our case I am leasing your works).

Please let me know if you have any questions, otherwise please sign and mail a copy to me and I will sign and send one to you. We also need to determine which photography agreements we should use.

Thank you!
XXName deletedXX

Welcome to the Arrival project! We hope you feel the same passion and enjoyment
about the Taino people that we do. Please read over the following information which
covers what we are offering and our expectation regarding the work done. Once you are
done, please print, sign and mail this document to:
Arrival
XXAddress deletedXX

Payment

At the moment Arrival is not funded therefore we are only able to offer a percentage of
the profits. The exact percentage will depend on the total number of team members,
time on the project and each team member's contribution to the project. We have
allocated 40% of Arrival's profit to be distributed among team members. All profit
sharing percentages will be calculated once the main Arrival video game is completed.

Additional Arrival Products

As we state on our web site, what started out as a video game idea has ballooned out
into numerous areas. Our plans include an iPhone/facebook "starter" game, selling
Arrival-themed products on CafePress, selling an authentic music CD (as an affiliate) and
the main Arrival game. There are some potential ideas on the table as well. The profit
sharing percentage a team member receives will cover profit from all of Arrival's
products.

Leaving the Project

Any member of the team may leave at any time. This will cause their percentage to be
lowered, the exact amount depends on when the team member leaves. It is possible for
the percentage to be reduced to 0.

Company Ownership

The percentage offered to a team member reflects their profit sharing percentage, this
does not entitle a team member to ownership of the company or the Arrival intellectual
property.

Funding (investor)

We are actively seeking funding for our projects. How much, when or even if funding
occurs is presently unknown. If we do receive funding we may be very limited in it's
use. There is a good chance it will need to be specifically applied to one product such as
the iPhone game. Team members who are working on a funded piece of Arrival may be
converted to a paid position instead of getting their profit sharing percentage. In that
case, a team member that becomes a paid employee/contractor would also be paid
retroactively for all prior work done on Arrival.

Arrival is Profitable (sales of products, non-investor)

The ideal income breakdown is 20% marketing, 10% operations, 30% R&D and 40%
profit. To get Arrival off the ground, it is likely the breakdown will be 80% marketing
and 20% operations. Arrival will become profitable once $200,000 in sales (paid to
Arrival, not at retail) is reached. This threshold varies per game:

A small iPhone or Facebook game (we may make more than one) selling for
$2.99 (Apple keeps 30%, Arrival gets $2.09) would require 96,000 units to be
sold.
The main game will be sold in episodes. The total for all episodes if purchased in
advance will be $29.99, more if each episode is purchased separately. The exact
percentage Arrival keeps will vary based on where the game is sold (Steam and
Direct 2 Drive are two examples), if we assume Arrival keeps 60% of the sale,
the amount would be $17.99. 11,125 units would need to sell for the main
game to become profitable.

Please note the $200,000 threshold could change if our expenses are higher than
anticipated and the exact number of units needed will also vary depending on the
income received per unit. The numbers above are an estimate.

I agree to the terms stated above

Team Member

Name (print)

Title

Signature Date



I bring this matter to you folks because you are preofessionals who deal with this sort of thing on a regular basis. I respect your work and the manner in which you all conduct your business. Any input you can offer in this matter will be greatly appreciated. Thank you.

-Koa-
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rod
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Joined: 02 Sep 2008
Posts: 68
Location: New York, NY

PostPosted: Thu Apr 16, 2009 5:41 pm    Post subject: Reply with quote

I don't like this agreement.

You have some truly amazing images and I think the imagery is key to the success of this project and you should be properly compensated and protected. Attorney time.

Good luck and keep up the great work! I love your project!

rod
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Leslie
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Joined: 14 Mar 2006
Posts: 227
Location: San Diego

PostPosted: Fri Apr 17, 2009 1:38 am    Post subject: Reply with quote

Take this to a lawyer if you are at all interested in trying to work with these people. Seriously. There is no reason for you to even think of signing a complex deal like this without having it reviewed by a professional and you need someone who is on your side.

Best--
Leslie
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James Cook
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Location: Saugatuck

PostPosted: Sat Apr 18, 2009 12:05 pm    Post subject: Reply with quote

I'd never sign such an agreement without a lawyer looking at it first.

That said, I'm not sure if I'd get so far as to see a lawyer. I'd be inclined to reject it outright. There are too many vague conditions in in, that "might change". Who decides on the change? There's far to much wiggle room which leaves them the ability to avoid ever having to give you anything, and if you go away, they've even said so.
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Gordon Moat
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Joined: 24 Aug 2008
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PostPosted: Tue Apr 21, 2009 8:56 pm    Post subject: Re: I need some serious advice on this agreement issue... Reply with quote

Koa wrote:
. . . . . . . .

Hi Koa,
Here is the agreement I am asking all team members to sign. I removed any reference to ownership because you and I will be dealing with that in a separate photography agreement (in our case I am leasing your works).

. . . . . . . . . . . .


That's it. He already notes that you two will have a separate photography agreement. Therefor the rest of what he sent you does not apply to you.

It's really convoluted, though you could work at it, if you felt it still held merit. The problem is that he is trying to make you an investor in a back door sort of way. You are not a bank, and should not be financing projects, unless you would have invested in it without working on it. That's the real question you should ask yourself on this, would you invest in this without working on it.
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