Warner Bros. Inc. 4000 Warner Blvd. Burbank, CA 91522 818-954-6000 Cable Address: Warbros
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Warner
Bros. Inc.
0000
Xxxxxx Xxxx.
Xxxxxxx,
XX 00000
818-954-6000
Cable
Address: Warbros
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EXHIBIT
10.21
July
1,
1984
Studio 21 Productions, Inc.
c/o
Xxxxxxx Xxxxxx Agency, Inc.
000
Xx
Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
RE:
"VACATION '84" - XXXXX XXXXXXX
Gentlemen:
Reference
is made to that certain agreement dated December 16, 1981 (“Agreement”), setting
forth the terms and conditions between Warner Bros. Inc. (“Warner”) and Studio
21 Productions, Inc. (“Studio 21”) in connection with the above-referenced
matter.
Pursuant
to the Agreement, Studio 21 furnished the services of Xxxxx Xxxxxxx to produce
a
motion picture entitled “National Lampoon’s Vacation”. In accordance with
Paragraph 12 of the Agreement, Warner intends to produce a sequel to such
motion
picture, which picture is presently entitled “Vacation ‘84” (the ”Picture”).
Studio 21 shall furnish the services of Xxxxx Xxxxxxx to serve in the capacity
of individual producer on the picture, on the following terms and
conditions:
| 1. |
Development:
|
Xxxxx
Xxxxxxx to perform all development services required by Warner for a total
consideration of $35,000 which Studio 21 acknowledges has already been paid
by
Warner to Studio 321.
| 2. |
Producer
Fee:
|
If
Warner
sets the Picture for production, Xxxxx Xxxxxxx to produce for consideration
payable to Studio 21 of $350,000, payable 20%, less the development fee of
$35,000, payable when the Picture is set for production, 60% at 3% per week
for
20 weeks beginning 6 weeks prior to the schedule commencement of principal
photography of the Picture, 10% upon completion of scoring, and 10% upon
delivery on the answer print. Subject to default, incapacity, or force majeure,
Xxxxx Xxxxxxx shall be pay-or-play to produce the Picture when the Picture
is
set for production by Warner. The Picture shall be deemed “set for production”
by Warner at such time as the screenplay and budget have been approved by
Warner, the principal cast members and director have been engaged by Warner,
and
a definite starting date has been scheduled for commencement of principal
photography, subject to acceleration or delay to accommodate the availability
of
facilities, locations, or principal cast members.
| 3. |
Use
of the Name “National Lampoon”:
|
| A. |
For
the use of the name “National Lampoon” in the Picture, Studio 21 shall
receive $250,000 upon commencement on principal photography plus
(i) 2½ of
the adjusted gross receipts of the Picture in excess of the greater
of two
times the cost of production of the Picture and interest once or
actual
cash breakeven including interest once, to actual breakeven; (ii)
an
allocation from Studio 21’s net profits of 5% of the gross receipts of the
Picture in excess of actual moving breakeven; and (iii) deferments
of
$250,000 each from the gross receipts in excess of gross receipts
equal to
the aggregate of actual moving breakdown plus $10,000,000 of the
gross
receipts, and each $10,000,000 gross receipts thereafter. In the
event
production of the Picture is abandoned after commencement of principal
photography, for any reason other than a default by Studio 21 or
National
Lampoon, Inc., Studio 21 shall repay Warner on demand that portion
of that
$250,000 paid on commencement of principal photography as the number
of
weeks from commencement of principal photography to abandonment bears
to
the scheduled number of weeks of principal photography of the Picture.
In
the event of a material default by Studio 21 or National Lampoon,
Inc.,
Studio 21 shall repay Warner the entire $250,000 on demand without
any
prejudice to any claim by Warner which it may have or assert against
Studio 21 or National Lampoon, Inc. as a result of said
default.
|
| X. |
Xxxxxx
shall have the right and obligation, subject to this paragraph B
and
paragraph 13E of the Agreement (incorporated by reference herein),
to use
the “National Lampoon” name as part of the title of the Picture and in
connection with the advertising, distribution and marketing of the
Picture. Whenever any draft of a screenplay is delivered to Warner,
if
Studio 21 advises Warner with the delivery of the screenplay or revised
draft screenplay that Studio 21 disapproves of said screenplay or
revised
draft for the use of the name “National Lampoon” then if Warner elects to
proceed with the development of the Picture, or hire another writer,
or
request revisions from the writer delivering the screenplay or revised
draft, or sets the Picture for production, then Warner may elect
(i) to
terminate the agreement with Studio 21 including the right to use
the name
“National Lampoon” in connection with the Picture and Warner may proceed
with the development and/ or production of the Picture and Warner
and
Studio 21 shall be released and discharged of any obligations to
one
another in connection with the Picture, or (ii) to proceed with the
development and/ or the production of the Picture pursuant to this
agreement with Studio 21 without the right to use the name “National
Lampoon” in connection with the Picture without prejudice to Studio 21’s
approval or disapproval of the next revised draft of the screenplay
and
the use of the name “National Lampoon” in connection with the
Picture.
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2
4. Incorporation
by reference:
Xxxxxxxxx
0, 0, 0, 0, 0, 0, 0, 00, 11, 12, 13C, 13D, 13E, 13F and 16 are incorporated
herein by reference and made a part hereof, provided that each reference
to the
“picture” in the Letter Agreement shall be read to mean the Picture for purpose
of this Agreement.
Please
indicate your acceptance of the foregoing by signing the bottom portion of
this
letter and returning it to the undersigned.
Very
truly yours,
WARNER
BROS. INC.
By
______________________
Vice
President
ACCEPTED
AND AGREED:
NATIONAL
LAMPOON, INC.
By
_____________________________
Its
STUDIO
21
PRODUCTION, INC.
By
_____________________________
Its
________________________________
Xxxxx
Xxxxxxx
3
