EXHIBIT 10.20
LOAN OUT AGREEMENT
FOR EXECUTIVE PRODUCER SERVICERS
OF
XXXXXXX XXXXX
AGREEMENT dated as of October 29, 1999 between Marvel Enterprises,
Inc., a Delaware corporation (the "Company"); and Brentwood Television Funnies,
Inc. (the "Lender") for the services of its employee, Xxxxxxx Xxxxx (the
"Producer").
1. Services, employment and acceptance. The Company engages the Lender
and Lender agrees to supply and make available to the Company, the services of
the Producer to serve as Executive Producer on all television programs involving
the Marvel characters during the term of this agreement, along with such other
individuals as the Company may select as Executive Producers on such television
programs, provided, that, if the Lender or the Producer shall be entitled to any
fees as a result of the same, the Lender or the Executive, as the case may be,
shall assign to the Company any such rights to such fees.
2. Term. The term of the engagement provided for in Section 1 of this
Agreement (the "Term") shall commence on October 25, 1999 and shall end on
October 25, 2002 (the "Expiration Date"). The Term shall end earlier than the
Expiration Date if sooner terminated pursuant to Section 4 of this Agreement.
The Company and the Producer are parties to an employment agreement, dated the
same date as this agreement, pursuant to which the Producer is to be employed by
the Company as President of the Company's Marvel Characters Group (the
"Employment Agreement"). If the term of the Producer's employment under the
Employment Agreement (the "Employment Term") is extended to a date which is
later than the Expiration Date, the Expiration Date shall be automatically
postponed, and the Term shall be automatically extended, to the later date to
which the Employment Term is extended.
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3. Compensation. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay Lender during the Term a
producer fee, payable bi-weekly in arrears, at the annual rate of $175,000.
Lender shall be paid as a fully independent contractor and shall be solely
responsible for any withholdings and deductions required by applicable law and
regulations. The producer fee shall be reviewed no less frequently than annually
by the Board of Directors and may be increased, but not decreased, by the Board
of Directors. The producer fee as in effect from time to time is referred to in
this Agreement as the "Producer Fee". If there ceases to be any television
production by the Company during the Term, the Company shall continue to pay the
Producer Fee to the Lender which shall, in such event, provide the services of
Producer as a creative consultant to Company for the Company's other creative
ventures.
4. Termination.
4.1 Death. If the Producer shall die during the Term, the Term shall
terminate immediately.
4.2 Disability. If during the Term, the Producer shall become
physically or mentally disabled, whether totally or partially, such that the
Producer is unable to perform the Producer's principal services hereunder for
(i) a period of six consecutive months or (ii) for shorter periods aggregating
six months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six months, by
written notice to the Producer (but before the Producer has recovered from such
disability), terminate the Term.
4.3 Cause. The Term may be terminated by the Company upon notice to
the Lender upon the occurrence of any event constituting "Cause" as defined
herein. As used herein, the term "Cause" means: (i) the Lender's or the
Producer's willful and intentional failure or refusal to perform or observe any
of their material duties, responsibilities or obligations set forth in this
Agreement; provided, however, that the Company shall not be deemed to have Cause
pursuant to this clause (i) unless the Company gives the Lender written notice
that the specified conduct has occurred and making specific reference to this
Section 4.3(i) and the Lender or the Producer, as the case may be, fails to cure
the conduct within thirty (30) days after the Lender's receipt of such notice;
(ii) breach by the Lender or the Producer of any of their obligations under
Section 5 hereof; (iii) any willful and intentional acts of the Producer or the
Executive involving fraud, theft, misappropriation of funds, embezzlement or
material dishonesty affecting the Company or willful misconduct by the Lender or
the Producer which has, or could reasonably be expected to have, a material
adverse effect on the Company; or (iv) the Lender's or the Executive's
conviction of, or plea of guilty or nolo contendre to, an offense which is a
felony in the jurisdiction involved.
4.4 Other Permitted Termination by the Company. The Term may be
terminated by the Company at any time if the Employment Term is terminated by
the Company as permitted by, and not in breach of, the Employment Agreement or
if the Employment Agreement is terminated by the Executive for any reason.
4.5 Permitted Termination by the Lender. (a) The Term may be
terminated by the Lender upon notice to the Company of any event constituting
"Good Reason" as defined herein. As used herein, the term "Good Reason" means
the occurrence of any of the following, without the prior written consent of the
Lender: (i) assignment of the Producer to duties materially inconsistent with
the Producer's position as described in Section 1.1 hereof; (ii) any material
breach of this Agreement by the Company which is continuing; or (iii) the
occurrence of a Third Party Change in Control (as defined in Section 4.6(d))
provided, however, that the Lender shall not be deemed to have Good Reason
pursuant to clauses (i) and (ii) above unless the Lender gives the Company
written notice that the specified conduct or event has occurred and making
specific reference to this Section 4.5 and the Company fails to cure such
conduct or event within thirty (30) days of receipt of such notice.
(b) The Term may be terminated by the Lender at any time by giving the
Company a notice of termination specifying a termination date no less than sixty
(60) days after the date the notice is given.
(c) The Term may be terminated by the Lender at any time if the
Employment Term is terminated by the Producer pursuant to Section 4.5(a) of the
Employment Agreement.
4.6 Termination Fee. (a) If the Term is terminated (A) pursuant to
Section 4.1, 4.2 or 4.3 of this Agreement,(B) by the Lender other than pursuant
to Section 4.5(a) of this Agreement, or (C) by the Company pursuant to Section
4.4 of this Agreement in connection with or following termination of the
Employment Term under the circumstances described in clauses (A) or (B) or
Section 4.6(a) of the Employment Agreement, the Lender shall be entitled to
receive its Producer Fee at the rate provided in Section 3 hereof to the date on
which such termination shall take effect.
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(b) Except as provided in Section 4.6(c) of this Agreement, if the
Term is terminated (A) by the Lender pursuant to clauses (i) or (ii) of Section
4.5(a) of this Agreement, (B) by the Company other than pursuant to Section 4.1,
4.2, 4.3 or 4.4 of this Agreement, (C) by the Lender pursuant to Section 4.5(c)
of this Agreement in connection with or following termination of the Employment
Term under the circumstances described in clause (A) or (B) of Section 4.6(b) of
the Employment Agreement, or (D) if the Employment Term expires as a result of
the Company giving a Notice of Nonrenewal under the Employment Agreement, the
Company shall continue thereafter to pay the Producer Fee to the Lender until
the second anniversary of the date of termination. The Lender shall have no duty
or obligation to mitigate the amounts or benefits required to be provided
pursuant to this Section 4.6(b), nor shall any such amounts or benefits be
reduced or offset by any other amounts to which Lender may become entitled;
provided, that if the Producer becomes employed by a new employer or
self-employed prior to the earlier of the Expiration Date or twelve (12) months
after the date of termination, up to one-half of the Producer Fee payable to the
Lender pursuant to this Section 4.6(b) shall be reduced by an amount equal to
the amount earned from such employment with respect to that period (and the
Lender shall be required to return to the Company, without interest, any amount
by which such payments pursuant to Section this 4.6(b) exceed the Producer Fee
to which the Executive is entitled after giving effect to that reduction). As a
condition to the Lender receiving the payments under Section 4.6(b), the Lender
agrees to cause the Producer to permit verification of his employment records
and Federal income tax returns by an independent attorney or accountant,
selected by the Company but reasonably acceptable to the Lender, who agrees to
preserve the confidentiality of the information disclosed by the Producer except
to the extent required to permit the Company to verify the amount received by
the Producer from other active employment.
(c) If the Term is terminated upon or following the occurrence of a
Third Party Change in Control (as defined in Section 4.5(d)) or in contemplation
of a Third Party Change in Control, and such termination is by the Lender
pursuant to Section 4.5(a) of this Agreement, by the Company other than pursuant
to Section 4.1, 4.2, 4.3 or 4.4 of this Agreement, by the Lender pursuant to
Section 4.5(c) of this Agreement in connection with or following termination of
the Employment Term under the circumstances described in clause (A) or (B) of
Section 4.6(b) of the Employment Agreement, or occurs as a result of the Company
giving a Notice of Nonrenewal under the Employment Agreement, the Company shall
thereafter pay to the Producer an amount equal to two (2) times the then current
Producer Fee.
(d) For purposes of this Agreement, a Third Party Change in Control
shall be deemed to have occurred if (i) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than an Excluded Person or Excluded Group
(as defined below) (hereinafter, a "Third Party"), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities
entitled to vote in the election of directors of the Company, (ii) the Company
is a party to any merger, consolidation or similar transaction as a result of
which the shareholders of the Company immediately prior to such transaction
beneficially own securities of the surviving entity representing less than fifty
percent (50%) of the combined voting power of the surviving entity's outstanding
securities entitled to vote in the election of directors of the surviving entity
or (iii) all or substantially all of the assets of the Company are acquired by a
Third Party. "Excluded Group" means a "group" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) that (i) includes one or more Excluded
Persons; provided, that the voting power of the voting stock of the Company
"beneficially owned" (as such term is used in Rule 13d-3 promulgated under the
Exchange Act) by such Excluded Persons (without attribution to such Excluded
Persons of the ownership by other members of the "group") represents a majority
of the voting power of the voting stock "beneficially owned" (as such term is
used in Rule 13d-3 promulgated under the Exchange Act) by such group or (ii)
exists solely by virtue of the fact that the members of such group are parties
to the Stockholders' Agreement, dated as of October 1, 1998, by and among the
Company, Xxxxx Xxxxxxxxxx, Xxx Xxxx, Xxxx Xxxxxxxxx, The Xxxxx Manhattan Bank,
Xxxxxx Xxxxxxx & Co. Incorporated, Whippoorwill Associates Incorporated and
various other stockholders of the Company, as that agreement may be amended from
time to time (the "Stockholders Agreement"). "Excluded Person" means (i) while
the Stockholders Agreement is in effect in substantially its current form, any
person or entity who or which is a party to the Stockholders Agreement as of the
Effective Date and any affiliate of such a party to the Stockholders Agreement
who becomes a party to the Stockholders Agreement, and (ii) Xxxxx Xxxxxxxxxx and
Xxx Xxxx or any of their affiliates.
5. Inventions and Patents.
5.1 The Lender agrees that, except as provided in Section 5.2, all
processes, technologies and inventions, including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by the Lender or the Producer during the Term or for
one year thereafter (collectively, "Inventions") shall belong to the Company,
provided, that such Inventions grew out of the Producer's work with the Company
or any of its subsidiaries or affiliates, are related to the business
(commercial or experimental) of the Company or any of its subsidiaries or
affiliates or are conceived or made on the Company's time or with the use of the
Company's facilities or materials. The Lender shall promptly disclose such
Inventions to the Company and shall, subject to reimbursement by the Company for
all reasonable expenses incurred by the Lender or the Producer in connection
therewith, (a) assign, and cause the Producer to assign, to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (b) sign, and cause the Producer to sign,
all papers necessary to carry out the foregoing; and (c) cause the Producer to
give testimony in support of the Producer's or the Lender's inventorship.
5.2 The Company acknowledges that the Lender and the Producer may
conceive, develop or invent Inventions in connection with the Producer's work on
the Prior Projects and Other Permitted Activities. The Company agrees that it
shall have no interest in any Inventions which relate primarily to the Prior
Projects or Other Permitted Activities. Nothing contained herein shall be
construed so as to grant the Company any interest whatsoever in any such
Inventions or in any Inventions which were created prior to the Effective Date.
6. Intellectual Property.
6.1 Except as provided in Section 5.2, the Company shall be the sole
owner of all the products and proceeds of the Lender's and the Producer's
services hereunder, including, but not limited to, all materials, ideas,
concepts, formats, suggestions, developments, arrangements, packages, programs
and other intellectual properties that the Lender or the Producer may acquire,
obtain, develop or create in connection with and during the Term (collectively,
"Intellectual Property"), free and clear of any claims by the Lender or the
Producer (or anyone claiming under the Lender or Producer) of any kind or
character whatsoever (other than the Lender's right to receive payments
hereunder). The Lender shall, and shall cause the Producer to, at the request of
the Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or
interest in or to any such Intellectual Property.
6.2 The Company acknowledges that the Lender and the Producer will
acquire, obtain, develop and create Intellectual Property in connection with the
Producer's work on the Prior Projects and Other Permitted Activities. The
Company agrees that it shall have no right, title or interest in any
Intellectual Property which was developed in connection with, or relates
primarily to, the Prior Projects or Other Permitted Activities. Nothing
contained herein shall be construed so as to grant the Company any right, title
or interest whatsoever in any Intellectual Property which was created or
acquired by the Executive prior to the Effective Date.
7. Lender Representations. The Lender represents that it is a validly
existing corporation and has the sole and exclusive right and authority to
provide the services of the Producer to the Company as contemplated by this
Agreement, and that the entering into and performance of this agreement by the
Lender and the provision of services hereunder by the Producer and the
acceptance thereof by the Company will not violate any law, rule, regulation,
order, contract or agreement to which either the Lender or the Producer is a
party or is bound or affected.
8. Independent Contractors; No Joint Venture. The parties acknowledge
and agree that the relationship between the Company and the Lender is that of
independent contractors and not that of employer and employee. Nothing in this
agreement is intended to create or will be deemed to create or constitute a
joint venture or partnership between the Company and the Lender.
9. Payroll Taxes. The Lender will be responsible for the payment of
all withholding, payroll and other taxes payable in respect of the payments
received by the Lender under this agreement and hereby agrees to indemnify and
hold the Company harmless from any obligation or penalty arising from the
failure to pay such taxes.
10. Arbitration; Legal Fees. Any dispute or controversy arising out of
or relating to this Agreement shall be resolved exclusively by arbitration in
New York City in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. Judgment on the award may be
entered in any court having jurisdiction thereof. The Company shall reimburse
the Lender's reasonable costs and expenses incurred in connection with any
arbitration proceeding pursuant to this Section 10 if the Lender (and, if the
arbitration proceeding also relates to the Employment Agreement, the Executive)
is the substantially prevailing party in that proceeding.
11. Notices. All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
If to the Company, to:
Marvel Enterprises, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
If to the Lender, to:
Brentwood Television Funnies, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
12. General.
12.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York, without regard to the conflict of law
principles of such state.
12.2 The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
12.3 This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth. This Agreement expressly supersedes all agreements and understandings
between the parties regarding the subject matter hereof and any such agreement
is terminated as of the date first above written.
12.4 This Agreement, and the Lender's rights and obligations
hereunder, may not be assigned by the Lender. The Company may assign its rights,
together with its obligations, hereunder (i) to any affiliate or (ii) to third
parties in connection with any sale, transfer or other disposition of all or
substantially all of its business or assets; in any event the obligations of the
Company hereunder shall be binding on its successors or assigns, whether by
merger, consolidation or acquisition of all or substantially all of its business
or assets.
12.5 This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
12.6 This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE COMPANY:
MARVEL ENTERPRISES, INC.
/s/ F. Xxxxx Xxxxx
By: --------------------------
Name: F. Xxxxx Xxxxx
Title: President & Chief
Executive Officer
THE LENDER:
BRENTWOOD TELEVISION FUNNIES, INC.
/s/ Xxxxxxx Xxxxx
By: --------------------------
Name: Xxxxxxx Xxxxx
Title:
Ratification
The undersigned, Xxxxxxx Xxxxx, hereby consents to the terms and conditions of,
and agrees to perform all of the duties, obligations and services required of
the Producer under the foregoing agreement. In addition, the undersigned
unconditionally guarantees the payment of any obligations by the Lender to the
Company arising under or by virtue of the provisions of Section 9 of the
foregoing Agreement. The undersigned further agrees to look solely to the Lender
and not to the Company for all compensation and benefits to which he may be
entitled under the Agreement for performing the duties, obligations and services
required therein.
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
