POW! ENTERTAINMENT, INC. (f/s/o Stan Lee) c/o Ganfer & Shore
As of May
2, 2008
(f/s/o
▇▇▇▇ ▇▇▇)
c/o
Ganfer & Shore
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▇▇▇ ▇▇▇▇,
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Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Re:
▇▇▇▇ ▇▇▇ / OVERALL AGREEMENT / FOURTH AMENDMENT
Ladies
and 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 ▇▇▇▇ ▇▇▇ (“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;
and
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.
The
Overall Agreement, First Amendment, Second Amendment and Third 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 or the Third Amendment, as applicable.
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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 May 2, 2008 (“Amendment”) unless and
until Silver Creek receives an executed original of this Amendment (in form and
substance acceptable to Silver Creek).
2. Reference
is made to Paragraph 2 of the Second
Amendment. The Term is hereby extended for a
period of two (2) years commencing as of May 2, 2008 (i.e., through and
including May 1, 2010), subject to Silver Creek’s right to suspend and extend
the Term as set forth in the Agreement (the “Extended Term”).
3. Reference
is made to Paragraph I.E.1 of the Overall Agreement (Exclusive First Look;
General). Silver Creek shall consult in good faith with Lender and
Artist with respect to the media for which an Artist-Submitted Property will be
developed and possibly produced, provided that in the event of a disagreement
between the parties, Silver Creek’s decision with respect to the choice of media
shall be final and binding on Lender and Artist.
4. Reference
is made to Paragraph II.C.1.a of the Overall Agreement (Live-Action
Picture[s]). One-half (1/2) of the aggregate Overhead Allowance paid
or payable pursuant to Paragraph III.G.1 of the Overall Agreement (as amended by
Paragraph 8 below) (and not otherwise recouped pursuant to Paragraph III.H of
the Overall Agreement) shall be deemed an advance against and such one-half
(1/2) portion shall be fully recoupable by Silver Creek from one hundred percent
(100%) of the aggregate fixed and contingent compensation (e.g., fixed
compensation, box office bonuses, contingent ancillary payments) payable to
Lender in connection with each Live-Action Theatrical Picture (as defined in
Paragraph 5 below), and no such consideration shall be payable to Lender unless
and until the applicable amount of the Overhead Allowance is recouped pursuant
to Paragraph III.H.1 of the Overall Agreement.
5. Reference
is made to Paragraph II.C.1.a.i of the Overall Agreement (Live-Action
Picture[s]). Subject to the terms and conditions contained therein,
Lender shall be entitled to receive, in lieu of the Live-Action Theatrical Fixed
Compensation set forth therein, the fixed compensation set forth below for each
applicable live-action feature-length theatrical motion picture based on an
Artist-Submitted Property (each, a “Live-Action Theatrical
Picture”). The amount of the Live-Action Theatrical Fixed
Compensation to which Lender shall be entitled to receive shall be determined by
the order in which such Live-Action Theatrical Pictures (if any) are produced as
opposed to the order in which such Live-Action Theatrical Pictures are set up
for development (e.g., if a
Live-Action Theatrical Picture is based on the first Artist-Submitted Property
accepted for development and is the second Live-Action Theatrical Picture
produced under the Agreement, then Lender shall be entitled to receive the
amount set forth in Paragraph 4.b below; if a Live-Action Theatrical Picture is
based on the second Artist-Submitted Property accepted for development and is
the first Live-Action Theatrical Picture produced hereunder, then Lender shall
be entitled to receive the amount set forth in Paragraph 4.a
below).
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a. First Live-Action Theatrical
Picture. The flat sum of $450,000, less an amount equal to
one-half (1/2) of the aggregate Overhead Allowance paid or payable pursuant to
Paragraph III.G.1 of the Overall Agreement (as amended by Paragraph 8 below)
(and not otherwise recouped pursuant to Paragraph III.H of the Overall
Agreement), which Live-Action Theatrical Fixed Compensation shall not be payable
hereunder unless and until the applicable amount of the Overhead Allowance is
recouped pursuant to Paragraph III.H.1 of the Overall Agreement.
b. Second Live-Action
Theatrical Picture. The flat sum of $500,000, less an amount
equal to one-half (1/2) of the aggregate Overhead Allowance paid or payable
pursuant to Paragraph III.G.1 of the Overall Agreement (as amended by Paragraph
8 below) (and not otherwise recouped pursuant to Paragraph III.H of the Overall
Agreement), which Live-Action Theatrical Fixed Compensation shall not be payable
hereunder unless and until the applicable amount of the Overhead Allowance is
recouped pursuant to Paragraph III.H.1 of the Overall Agreement.
c. Third Live-Action Theatrical
Picture. The flat sum of $600,000, less an amount equal to
one-half (1/2) of the aggregate Overhead Allowance paid or payable pursuant to
Paragraph III.G.1 of the Overall Agreement (as amended by Paragraph 8 below)
(and not otherwise recouped pursuant to Paragraph III.H of the Overall
Agreement), which Live-Action Theatrical Fixed Compensation shall not be payable
hereunder unless and until the applicable amount of the Overhead Allowance is
recouped pursuant to Paragraph III.H.1 of the Overall Agreement.
d. Fourth and Subsequent
Live-Action Theatrical Pictures. The flat sum of $750,000,
less an amount equal to one-half (1/2) of the aggregate Overhead Allowance paid
or payable pursuant to Paragraph III.G.1 of the Overall Agreement (as amended by
Paragraph 8 below) (and not otherwise recouped pursuant to Paragraph III.H of
the Overall Agreement), which Live-Action Theatrical Fixed Compensation shall
not be payable hereunder unless and until the applicable amount of the Overhead
Allowance is recouped pursuant to Paragraph III.H.1 of the Overall
Agreement.
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6. Reference
is made to Paragraph II.C.1.a.ii of the Overall Agreement (Live-Action
Theatrical Box Office Bonuses). Subject to the terms and conditions
contained therein, Lender shall be entitled to receive, in lieu of the Box
Office Bonuses set forth therein, the following Box Office Bonuses for each
applicable Live-Action Theatrical Picture; provided, however, Silver Creek shall
first be entitled to recoup from the Box Office Bonuses one-half (1/2) of the
aggregate unrecouped Overhead Allowance payable pursuant to Paragraph III.G.1 of
the Overall Agreement (as amended by Paragraph 8 below) (and not otherwise
recouped pursuant to Paragraph 5 above and/or Paragraph III.H of the Overall
Agreement) and the Box Office Bonuses shall not be payable unless and until such
unrecouped Overhead Allowance is first recouped thereunder:
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a.
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First Live-Action
Theatrical Picture.
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i.
The flat sum of $150,000 at such time, if ever, that DBO Receipts equal or
exceed an amount equal to two and one-half (2-1/2) times the Negative Cost of
the Picture (the “Theatrical DBOR Trigger Point”);
ii. The
additional flat sum of $250,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $25,000,000;
iii. The
additional flat sum of $250,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $50,000,000;
iv. The
additional flat sum of $250,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $100,000,000;
v. The
additional flat sum of $250,000 at each time, if ever, that DBO Receipts of the
Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) an additional $25,000,000 (i.e., at Theatrical
DBOR Trigger Point plus $125,000,000; at Theatrical DBOR Trigger Point plus
$150,000,000 in DBO Receipts; at Theatrical DBOR Trigger Point plus
$175,000,000, and so on).
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b. Second and Subsequent
Live-Action Theatrical Pictures.
i. The
flat sum of $300,000 at such time, if ever, that DBO Receipts equal or exceed
the Theatrical DBOR Trigger Point;
ii. The
additional flat sum of $500,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $25,000,000;
iii. The
additional flat sum of $500,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $50,000,000;
iv. The
additional flat sum of $500,000 at such time, if ever, that the DBO Receipts of
the Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) $100,000,000;
v. The
additional flat sum of $500,000 at each time, if ever, that DBO Receipts of the
Picture equal or exceed an amount equal to the combined total of: (A) the
Theatrical DBOR Trigger Point; plus (B) an additional $25,000,000 (i.e., at Theatrical
DBOR Trigger Point plus $125,000,000; at Theatrical DBOR Trigger Point plus
$150,000,000 in DBO Receipts; at Theatrical DBOR Trigger Point plus
$175,000,000, and so on).
7. Reference
is made to Paragraph II.C.1.a.iii of the Overall Agreement (Live-Action
Theatrical Merchandising Royalty). Subject to the terms and
conditions contained therein, solely in connection with Live-Action Theatrical
Pictures based on Artist-Submitted Properties submitted to Silver Creek for
development during the Extended Term (and not Live-Action Theatrical Pictures
based on Artist-Submitted Properties submitted to Silver Creek for development
prior to the commencement of the Extended Term, for which Lender shall be
entitled to receive the Live-Action Theatrical Merchandising Royalty set forth
in Paragraph II.C.1.a.iii of the Overall Agreement), Lender shall be entitled to
receive, in lieu of the Live-Action Theatrical Merchandising Royalty set forth
in Paragraph II.C.1.a.iii of the Overall Agreement, the following merchandising
royalty for each applicable Live-Action Theatrical Picture; provided, however,
Silver Creek shall first be entitled to recoup from the Live-Action Theatrical
Merchandising Royalty one-half (1/2) of the aggregate unrecouped Overhead
Allowance payable pursuant to Paragraph III.G.1 of the Overall Agreement (as
amended by Paragraph 8 below) (and not otherwise recouped pursuant to Paragraphs
5 and/or 6 above and/or Paragraph III.H of the Overall Agreement) and the
Live-Action Theatrical Merchandising Royalty shall not be payable unless and
until such unrecouped Overhead Allowance is first recouped
thereunder:
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a. Licensed
Merchandise. For items sold by a licensee of WDP:
i.
In the event that Artist’s name appears on any item of
merchandise or the packaging for any item of merchandise in an average size of
type equal to at least fifty percent (50%) of the average size of type used for
Silver Creek or the distributor of the applicable Live-Action Theatrical
Picture, then in lieu of the royalty set forth in Paragraph II.C.1.a.iii of the
Agreement, Lender shall be entitled to receive an amount equal to seven and
one-half percent (7-1/2%) of one hundred percent (100%) of the royalties WDP
receives from such licensee.
ii. In
the event that (a) Artist’s name appears on any item of merchandise or the
packaging of any item of merchandise in an average size of type equal to less
than fifty percent (50%) of the average size of type used for Silver Creek or
the distributor of the applicable Live-Action Theatrical Picture or (b) Artist’s
name does not appear on any item of merchandise or the packaging of any item of
merchandise, then in lieu of the royalty set forth in Paragraph 7.a.i above and
Paragraph II.C.1.a.iii of the Agreement, Lender shall be entitled to receive an
amount equal to five percent (5%) of one hundred percent (100%) of the royalties
WDP receives from such licensee.
b. Vertical
Merchandise. For items sold by WDP at the wholesale or retail
level (at WDP’s discretion), in lieu of the royalty set forth in Paragraph
II.C.1.a.iii of the Agreement, Lender shall be entitled to receive an amount
equal to five percent (5%) of one hundred percent (100%) of an amount equal to
either (i) seven percent (7%) of the wholesale price of such items sold by WDP
at the wholesale level (less a reasonable allowance for returns) or (ii) seven
percent (7%) of fifty percent (50%) of the gross retail revenues of such items
sold by WDP at the retail level (less a reasonable allowance for
returns).
c. Interactive
Product. Lender’s royalty with respect to Interactive Product
shall not be amended by the provisions of this Paragraph 7 and shall instead be
calculated as set forth in the Overall Agreement.
d. General. Lender’s
contingent ancillary payment shall be inclusive of any amounts payable to Lender
for the services of Artist (other than as a producer) in connection therewith
pursuant to any applicable guild agreements (which shall be deemed paid at the
minimum applicable payment required). In no event shall any items of
merchandise be treated as falling under both Paragraphs 6.a and 6.b
above.
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8.
Reference is made to Paragraphs III.G.1 of the Overall Agreement (Overhead
Allowance). Commencing as of the date hereof, in lieu of the amounts
set forth therein, Silver Creek shall provide Lender with an accountable
overhead allowance in the amount of (a) $500,000 for the first year of the
Extended Term and (b) $550,000 for the second year of the Extended
Term.
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.: ▇▇-▇▇▇▇▇▇▇
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