POW! ENTERTAINMENT, INC. (f/s/o Stan Lee) c/o Ganfer & Shore
As of
December 18, 2009
(f/s/o
Xxxx Xxx)
c/o
Ganfer & Shore
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxxxxx, Esq.
Re: XXXX
XXX / OVERALL AGREEMENT / FIFTH AMENDMENT
Gentlemen:
Reference is made to:
a. the
overall agreement (the “Overall Agreement”), dated as of March 20, 2006, between
Silver Creek Pictures, Inc. ("Silver Creek") and POW! Entertainment,
Inc. (“Lender”) for (a) the submission by Xxxx Xxx (“Artist”), on an exclusive
“first look” basis, of any and all ideas, material and/or Properties owned or
controlled by Lender or Artist that Artist is interested in developing in any
medium or media and (b) the producing services of Artist in connection with the
development, production and distribution of such Properties in any medium or
media;
b. the
letter agreement, dated as of September 12, 2006 (the “First Amendment”) between
Silver Creek and Lender amending the Overall Agreement;
c. the
letter agreement, dated as of March 13, 2007 (the “Second Amendment”) between
Silver Creek and Lender amending the Overall Agreement and the First
Amendment;
d. the
letter agreement, dated as of September 10, 2007 (the “Third Amendment”) between
Silver Creek and Lender amending the Overall Agreement, the First Amendment and
the Second Amendment; and
e. the
letter agreement, dated as of May 2, 2008 (the “Fourth Amendment”) between
Silver Creek and Lender amending the Overall Agreement, the First Amendment, the
Second Amendment, and the Third Amendment.
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The
Overall Agreement, First Amendment, Second Amendment, Third Amendment and Fourth
Amendment shall collectively be referred to herein, as the context may require,
as the “Agreement.” Capitalized terms not defined herein shall have
the same meaning as set forth in the Overall Agreement, the First Amendment, the
Second Amendment, the Third Amendment or the Fourth Amendment, as
applicable. For purposes of clarification and the avoidance of doubt,
all references to the term “Lender” in the Agreement and herein, shall be deemed
to include Lender’s and its affiliates, and their respective employees, staff,
principals, officers and directors.
In
consideration of the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Silver Creek, Lender and Artist hereby further amend the
Agreement as follows:
1. Condition
Precedent. Silver Creek shall have no obligation to perform
pursuant to this amendment dated as of December 18, 2009 (“Amendment”) unless
and until Silver Creek receives an executed original of this Amendment (in form
and substance acceptable to Silver Creek).
2. Term. Reference
is made to Paragraph 2 of the Fourth Amendment. The Term is hereby
extended for a period of five (5) years commencing upon the later of January 1,
2010 or satisfaction of the Condition Precedent set forth in Paragraph 1 above,
subject to Silver Creek’s right to suspend and extend the Term as set forth in
the Agreement (the “Extended Term”). For the purposes of clarity, the
terms of this Amendment shall apply to Properties submitted to Silver Creek on
or after January 1, 2010, and shall exclude those Rejected Properties listed on
Appendix “A” hereof.
3. Exclusivity. Lender
and Artist shall be exclusive solely in connection with creative content
distributed or exploited in the following ways: theatrical
exhibition, television distribution, video devices, home entertainment
distribution, internet distribution, mobile phone distribution,
interactive/games distribution, and theme parks.
4. Exclusive First
Look. Reference is made to Paragraph I.E of the
Agreement. Notwithstanding anything to the contrary contained herein
or in the Agreement, Xxxxxx Xxxxxxxxx (“Xxxxxxxxx”) is not obligated to submit
projects to Silver Creek that he acquires solely for himself or his son and
which projects shall not be developed, produced or otherwise exploited by or on
behalf of Lender or Artist. If Xxxxxxxxx or his son submits any such
project to Lender or Artist for development, such projects shall be submitted to
Silver Creek as set forth in Paragraph I.E of the Agreement. In the
event that Artist becomes unavailable to render services under the Agreement,
Lender and Artist further acknowledge and agree that Lender’s exclusive “first
look” obligations shall continue for the duration of the Extended
Term.
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5.
Consulting. Subject
to Artist’s being available to render consulting services as requested by Silver
Creek hereunder, and provided that the Condition Precedent set forth in
Paragraph 1 above has been satisfied, and neither Lender nor Artist willingly
and knowingly breaches a material term and/or a continued series of breaches
after notice thereof hereunder or under the Agreement, Lender shall be entitled
to receive the flat sum of $1,250,000 (the “Consulting Fee”) per year of the
Extended Term which will accrue and become payable to Lender in equal monthly
installments in consideration of the exclusive consulting services of Artist
regarding the optimum exploitation of the film library and other assets owned by
Marvel Entertainment, Inc. (and its subsidiaries). The Consulting Fee
shall be paid to Lender in accordance with the terms set forth in Paragraph 8
below.
6. Guarantee.
a. Provided
neither Lender nor Artist willingly and knowingly breaches a material term
and/or a continued series of breaches after notice thereof hereunder or under
the Agreement, Lender shall be entitled to receive a guarantee of $550,000 (the
“Guarantee”) per year, which sum shall accrue and become payable to Lender in
accordance with the terms set forth in Paragraph 8 below, and which sum shall be
deemed an advance against and shall be fully recoupable by Silver Creek from any
fixed (including any rights payments) and contingent compensation (including any
box office bonuses and merchandising royalties) earned by and/or payable to
Lender under the Agreement for development or otherwise (specifically excluding
the Consulting Fee and the “Extended Term Overhead Allowance” as defined in
Paragraph 7 below as well as monies payable to third parties such as writers)
(the “Services Compensation”) (provided that the Guarantee shall only be deemed
an advance and fully recoupable by Silver Creek from fifty percent [50%] of the
aggregate applicable fixed compensation which Lender may be entitled to receive
pursuant to Paragraphs II.C.2.a.i, II.C.2.b.i or II.C.3.a through f. of the
Agreement, as applicable), and the Services Compensation shall be deemed an
advance against and fully recoupable from any unrecouped Guarantee; provided
that after five Properties are actually exploited under the Agreement, only 50%
of the Guarantee shall be recoupable as set forth herein. To the
extent that the Services Compensation exceeds the accrued and paid or payable
portion of the Guarantee at the time any Services Compensation has accrued and
is payable, Silver Creek agrees to pay Lender the excess thereof in the manner
herein provided, and no further portion of the Guarantee shall be payable
hereunder so long as the Services Compensation which has accrued and is payable
on any given date exceeds the portion of the Guarantee accrued and paid through
such date. Conversely, if at any time the amount of the Guarantee
which is accrued and paid or payable to Lender exceeds the Services Compensation
then paid and/or payable, Silver Creek shall resume payment of the
Guarantee. Sums payable to third parties pursuant to a notice of
irrevocable authority and assignment (executed by Lender or Artist) of all or a
portion of any fixed compensation or contingent compensation payable to a third
party shall be included as part of the Services Compensation for all purposes
hereunder, except for Rejected Properties set up with third
parties.
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b. Following
the expiration of the Extended Term, any unearned Guarantee shall be credited
against any Services Compensation which Lender may be entitled to receive after
the expiration of the Extended Term.
c. No
compensation from which the Guarantee is to be recouped shall be paid to Lender
(regardless of whether or not other sections of the Agreement call for such
compensation to be payable to Lender) but instead shall be retained by WDP and
credited toward recoupment of the Guarantee until the aggregate amount of the
Guarantee is fully recouped. All compensation earned after the
Guarantee is fully recouped shall be paid to Lender when and as specified in the
applicable paragraph of the Agreement.
d. For
purposes of clarity, the full aggregate amount of the Guarantee shall be deemed
an advance against and fully applicable by Silver Creek from any and all
Pictures and Non-Picture Projects produced under the Agreement, provided that
Silver Creek shall not recoup any sum more than once (e.g., if a portion of
the Guarantee is recouped from a theatrical project, that same portion may not
also be recouped from a DTV project).
e. Silver
Creek shall not have further recourse against Lender solely in the event that
the amount payable to Lender as Services Compensation is insufficient for Silver
Creek to fully recoup its Guarantee under this Paragraph 6.
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7.
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Overhead Allowance;
Recoupment of Costs.
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a. Notwithstanding
anything to the contrary in the Agreement, Paragraph III.G (Overhead Allowance)
of the Agreement is hereby deleted in their entirety and replaced with the
following:
“G. OVERHEAD
ALLOWANCE
1. Overhead
Allowance. Provided neither Lender nor Artist willingly and
knowingly breaches a material term and/or a continued series of breaches after
notice thereof hereunder or under the Agreement, Silver Creek shall provide
Lender with an accountable allowance in the amount of $700,000 (the “Extended
Term Overhead Allowance”). The Extended Term Overhead Allowance shall
be payable in accordance with the terms set forth in Paragraph 8 below, provided
that on no less than a quarterly basis, Lender shall provide Silver Creek with
verification of such expenses (in form and substance acceptable to Silver Creek)
incurred in connection therewith. The Extended Term Overhead
Allowance shall be deemed reimbursement for all accountable expenses of Lender
which are deemed business expenses under the Internal Revenue Code, as
applicable. In no event will Silver Creek be required to pay more
than $700,000 per year for the Extended Term for Lender’s and/or Artist’s
overhead expenses.
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2. General. Except
as set forth herein and in Paragraph III.C above, Silver Creek shall not be
responsible for any expenses or perquisites of Lender, Artist, or Lender’s
staff. Notwithstanding anything to the contrary set forth herein
above, the transportation and expenses provision set forth in Paragraph III.C
above shall apply in connection with Artist’s services on a Picture which has
been provided a “green light” by Silver Creek, in its sole discretion, which
travel expenses (subject to the terms and conditions of such Paragraph III.C)
shall be charged to such “greenlit” Picture and not against the Extended Term
Overhead Allowance.
3. Inapplicability of Overhead
Allowance. For purposes of clarification and the avoidance of
doubt, notwithstanding anything to the contrary set forth in the Agreement
(including the Fourth Amendment), the Extended Term Overhead Allowance shall not
be applicable against or recoupable from Lender’s Services Compensation other
than as may be reimbursable as set forth in subparagraph 4 below.
4. Third Party
Payment. If at any time (a) Lender and/or Artist grants an
option in, assigns, sells or otherwise “sets up” with a third party a Rejected
Property or an Artist-Submitted Property that has been accepted by Silver Creek
for development but is later abandoned, or (b) as permitted pursuant to
Paragraph 3 above, Lender and/or Artist renders services to third parties in
connection with any Rejected Properties and any Artist-Submitted Properties that
have been accepted by Silver Creek for development but are later abandoned
(collectively, a “Permitted Project”),
then Silver Creek shall receive a third-party payment as a portion of the
Extended Term Overhead Allowance in the amount of $100,000 per Permitted Project
if such Permitted Project is a theatrical motion picture and in the amount of
$50,000 if such Permitted Project is other than a theatrical motion picture,
which applicable amount shall be payable to Silver Creek upon a project being
“set up” with a third party or Lender’s and/or Artist’s commencement of services
in connection with the applicable Permitted Project, but in no event later than
the commencement of principal photography (if applicable) of or the
exploitation (if
other than a film, television or direct-to-video project) of the applicable
Permitted Project. Silver Creek shall be entitled to the foregoing in
connection with any Permitted Project(s) that is “set up” with a third party or
on which Lender and/or Artist renders services during the Extended Term and for
a period of two (2) years after expiration of the Extended Term.”
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b. Recoupment of
Costs. Reference is made to Paragraph III.H of the
Agreement. In subparagraph 1. thereof, the words “not recouped” in
line five are hereby deleted and replaced with “not reimbursed as set forth in
Paragraph III.G.4 above.” In addition, Paragraph III.H.2 is hereby
deleted in its entirety.
8. Payment
Schedule.
a. Consulting
Fee. With respect to the first through fifth years of the
Extended Term, subject to the provisions set forth in Paragraphs 5, 6, and 7
above, and provided that Artist fully performs those consulting services as set
forth in Paragraph 5 above, and further provided that neither Lender nor Artist
willingly and knowingly breaches a material term and/or a continued series of
breaches after notice thereof hereunder or under the Agreement, Lender shall be entitled
to receive the Consulting Fee in equal monthly installments. In the
event that Artist becomes unable to perform by reason of Artist’s accident,
illness, mental or physical disability, or death, then for the balance of the
Extended Term commencing with the first month following Artist’s inability to
perform hereunder, all future payments of Consulting Fee shall immediately
terminate.
b. Guarantee. Provided
that Lender is entitled to receive the Guarantee pursuant to the terms of
Paragraph 6.a above, the Guarantee shall be payable to Lender in equal monthly
installments for the second through fifth years of the Extended
Term.
c. Extended Term Overhead
Allowance. Provided that Lender is entitled to receive the
Extended Term Overhead Allowance pursuant to the terms of Paragraph 7 above, the
Extended Term Overhead Allowance shall be payable to Lender in equal monthly
installments for the second through fifth years of the Extended
Term.
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9. Rejected and Abandoned
Properties Produced/Exploited by Third Parties. If at any time
during the Extended Term or after the earlier termination or expiration thereof,
Lender and/or Artist grants an option in, assigns, sells or otherwise “sets up”
with a third party a Rejected Property or an Artist-Submitted Property that has
been accepted by Silver Creek for development but is later abandoned, in
addition to the lien as set forth in the Agreement, Lender and Artist shall
assign to Silver Creek (pursuant to documents acceptable to Silver Creek) an
amount equal to fifty percent (50%) of one hundred percent (100%) of all
advances, development fees, fixed and contingent (including any profit
participation, deferments, box office bonuses,
merchandise, publication or other royalties or advances, etc.)
compensation payable to and/or received by Lender or Artist in connection with
the first five (5) such Properties that are developed and/or exploited (provided
that Silver Creek will credit fifty percent [50%] of any advances and
development fees to any payments owed to Silver Creek if such Properties are not
among the first five [5] Properties exploited beyond development), provided that
with respect to any Property exploited after the first five (5) such exploited
Properties, the foregoing participation will be reduced to an amount equal to
twenty-five percent (25%) of one hundred percent (100%) of all such amounts, in
each case payable to and/or received by Lender or Artist in connection with any
subsequent Properties that are exploited, which amount shall become payable to
Silver Creek immediately upon Lender’s and/or Artist’s receipt
thereof. Lender and Artist hereby agree to execute any document
consistent herewith that Silver Creek deems in its interest to confirm any such
assignment. In the event of the failure of Lender or Artist to
execute and deliver or cause to be executed and delivered to Silver Creek all
instruments required in accordance with the provisions of this Paragraph 9,
Owner hereby irrevocably appoints Silver Creek, or its nominee, as Silver
Creek’s attorney-in-fact (which power is acknowledged by Lender and Artist to be
coupled with an interest) in Lender’s and Artist’s name and on Lender’s and
Artist’s behalf, with the right, but not the obligation, to do any and all acts
and things consistent herewith for the obtaining of such assignment, and to
execute and deliver all such instruments for the purposes aforesaid.
Notwithstanding the foregoing, Silver Creek’s participation with respect to the
five Properties which were available to be submitted under the Agreement listed
on Appendix “B” hereof shall be 25%.
10. Executive Producer Credit;
Gill Champion (“Champion”). Reference is made to Paragraph 2
of the Fifth Amendment. The words “and Champion” shall be inserted
after the work “Artist” in fifth line thereof to read “if Artist and Champion
fully perform all producing services and material obligations in connection with
such Picture . . . .”
11. Offices. Silver
Creek shall provide Lender with two (2) offices (determined by Silver Creek in
its sole discretion) for each of Artist and Champion. Lender shall
determine in which offices it and Artist will reside and at what
times.
12. Arbitration. Any
dispute, claim or controversy arising out of or relating to this Agreement
hereunder or the breach, termination, enforcement, interpretation or validity
thereof shall be determined by final and binding arbitration at JAMS in Los
Angeles County, California, before a single arbitrator.
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Except as
specifically set forth herein, all provisions of the Agreement shall remain in
full force and effect and may not be modified except by a writing executed by
all parties to the Agreement.
If the foregoing correctly represents
your understanding, please so acknowledge and accept as provided
below.
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SILVER
CREEK PICTURES, INC.
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By:
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Its:
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ACCEPTED
AND AGREED:
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By:
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Its:
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Federal
ID No.: 00-0000000
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APPENDIX
“A”
REJECTED
PROPERTIES
Alchemist
Baad
Alienz
Breezy
Pals
Chakra
Comic
Book Superhero/Reality TV Show
Devil’s
Quintet
Demon’s
Attack (Angels and Demons)
Diabella/Hellana
Digital
Avenger
Earthwalker
Excelsior!
TRADEMARK
Faithology
Fantom
Fearsome
Foursome
Heroes at
Large
Hero
Hero
Man
Huckster
Jonas
Brother Superhero Comic Book
Last
Ninja
Lipstik
Mighty
Xxxxxx
Mystic
Machines
Nightbird
Portal
Quartz
Retaliator
Revolt of
the Titanic Ten
Savior
Scavenger
Seekers
Spectra
Stanleeology
Superchick/Xxxxx
Xxxxxx
Superhero
Christmas
Superheroes
of Sector 9 (aka Trifecta)
Super
Seven
Trifecta
Experiment
Ugly
Truth About Superheroes
Ultimo
Vampirates
Vindicator
9
Ying and
Yang
TV
Ultimo
Xxxxxx
Fearsome
Foursome
Vindicator
EarthWarrior
(formerly Retaliato)
Trifecta
Experiment
Chakara
(Indian superhero)
Titanic
Ten
Annihilator
(Asian Superhero)
Fantom
Portal/Legends
Xxxxxx
and the Troll (animated)
EarthWalker
Heroman
Japanese Consortium Disney Japan
Vampirates
Cookie Jar
Firebrand
Heroes at
Large
Savior
Xxxx
Xxx’x Super Hero Christmas
Battle of
the Yin and Yang
Ugly
Truths about Superheroes
Hero the
book
Striperella
PROJECTS
NOT UNDER POW!‘S CONTROL (STRATEGIC PARTNERS ARE ADVISED OF DISNEY FIRST
LOOK)
True
Believer - Xxxx Xxx Documentary feature film length not screened for Disney yet;
1821 Films Financed (history of comics)
Xxxxxx
Xxxxxxxx documentary Comiccon 2010 Pow! Executive producers
Boom 3
comic titles begin 2nd
quarter
Xxxxxx
Comics & A squared to develop new graphic novels, comics
First one
Super Seven script being written (Disney passed)
1821
Films 3 graphic novels titles commencing 2010
Futuristic
Romeo and Juliet, Count of Xxxxx Xxxxxxx and untitled Mermaid
story
Negotiating
with Radical Comics
Xxxxx
side of Xxxx Xxx- three way Xxxxx Xxxxxxx Heavy Metal & JEA
First
one- Little Red Riding Hood
NHL
PROJECT
KID
FITNESS health and obesity program presently at Disney
Notes to
Self TV,
Vigilante
TV,
Xxxx Xxxx
TV untitled
Xxxx Xxxx
(feature)
10
Navigator
(feature)
Legion of
5 (feature)
Manifest
Destiny (mobile)
WidowMaker
TV
AlexaTV
Near Mint
TV
Xxxxxx
Shop TV
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APPENDIX
“B”
PROJECTS
READY TO BE PITCHED
Cry
Werewolf
Antilight
B
team
SkyLord
Avenging
Angel
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