Documente Academic
Documente Profesional
Documente Cultură
-\
• J
nieo
1 MARTIN J. BRILL (State Bar No. 53220)
CRAIGM. RANKIN (State Bar No. 169844)
DAVID B. GOLUBCHIK {State Bar No. 185520) 01 NOV 27
3 LEVENE, NEALE, BENDER¥ RANKIN & BRILL L.L.P.
1801 Avenue of the Stars, Suite 1120
4 Los Angeles, California 90067
BY.
Telephone: (310} 229-1234 •^tz:^f^ -[rp
5 Facsimile: (310) 229-1244
6 Attorneys for Chapter 1l
o 7
Debtors and Debtors in Po!session
8
UITED STATES B A K U P T C Y COURT
9
10 CENTRAL-'DISTRICT OF CALIFOnIA
25
//1
26
ill
27
28
III
III
BMBIX n
03364
%
• "
i) 1
Table of contents
2
M M O A D U M OF-POINTS A D AUTH01UTIES
•• .6
I. STATEMENT OF FACTS ,6
4 BACGROUND
03365
iXHlBlX
• '-''-^ - ^ " - 1 • . " •
^ Q ^ 03366
.
-^
•V
.j
1
ties
2 {
3 CAE
Coastal Indus.. Inc. v. U.S. Internal Revenue Service (In re Coastal Indus.. Inc.),
4 63 B.R. 361,368 (Bankr. N.D. Ohio 1986) - 23
5 In Ie Abbotts Dairies of Pennsylvania. Inc., .
1 8 F . 2 d 143. 149 (3d Cir. 19&6) - - 2 , 26, 27
6
1988) - -27
7
In re Apex Oil Co..
8 92 B.R. 847.869 ( . EDMo. 1988),
cfting In reBxennium:inc.. 115 f.2d 1401, 1404-05 (yi Cir. 198 3) - 27 :
-
9 In re Atlanta PackaRing Products, Inc,.
99 B.R. 124, 131 (.a n r . N.D. Ga. 198.)- -24
10
In re Continental Airlines. Inc.
11 1 8 F.2 d 1223(SIh Cr.- 1986)• -20
In ^GeorEe Walsh Chevrolet. Inc..
12 118 B.R. 99, 102 (Bankr. E.D. Mo. 1990)T -19
In
17 r S H . CoaS^SD.W.Va.1996) - - - : - - - - - - - - - . : __„__ . - - 1 9
18 In re Lionel Corp..
722 F.2d 1063, 1071 (ld CiT. 1983)- -lg.20
19 I re Oneida Lake Development. Inc,
114 B.R 352 (Bankr. N.D.N.Y, 1990) -30
20
In re Rock Tndus. Macfa. Corp! .
21 572 F.2d 1195, 119& ( Cir. 1 9 1 8 ) - - - - - - - - - - - - - -27
In re Snvder.
22 74 B.R. 872, 878 (ankr. ED. Pa 1987)- -24
23 I r Terrce Gardens Paric Partnership.
96 B.R. 707 (BanT. W.D.Te. 1989)- -31
24 Inre TheLandiiig,
156 B.R. 246,249 (Bankr. E.D Mo. 1993) - —19
25
In re-The Seychelles.
- • " - Partnership
m - and Genius Corp v. Banyan Corp..
26 32 B.R. 708i(.D. Tex 1983)- - - - - -24
03367
EXHIBIT .JLmGEJiiL
-,
1
InreWiIde Horse Enterprises. Inc..
2 i36 B.R. 830, 84.-2 ( a r . CD. C t 1991) - -19,24; 26, 27
3 S u n C r . B.A.P." -20,21
4
WilemainfiS^'c. 1985}. - : 2 3
5
STATUTES
6
363(b)(1): -18
7 11 US.C.m^ 29
8
OTHER AuTHORmEs
3 Collier on Bankruptcy § 363.06[4}, at pp. 363-46v (15* ed. Rev. 2001)-
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
IV
03368
B(HlBt _j_mRpll
:. . "
1
PLEASE T A NOTICE that a hearing will be held on January 8,
2
2002, at 10:00 a.m., before the Honorable Kathleen T. Lax, United
3
States Bankruptcy Judge for the Central District of California,
4
in -her Courtroom "301'1, located at 21041 Burbank Boulevard,
5
Woodland Hills, California, to consider the motion (the "Motion")
8 Lee Media, Inc., a Colorado corpo ration" debtors and deb tors in
9 possession in the aboye-captioned Chapter ' 11 cases (the
26 created de "
27 pop-culture icon Stan Lee, co-creator of such classic characters
28
2
03369
EXHIBf JLf
1 Incredible Hulk™ and the X-Mep'. Pre-
as Spider-Man', the
petition,
pi stan Lee «s employed pursuant to an employment
agreement with the Debtors, which Stan Lee contends was b "
c6ntention,
a .PAGE.
(3370
..
1
Agreement is in the best interest of the
e s ·
Agreement will result in creating value out of the Creative'
3
Assets, which value, the Debt o rs believe, can only be created
4
with the direct involvement of Stan Lee.
5
The Motion is based upon this Notice o: MotioI and Motion,
6
7 the Memorandum of Points and Authorities, and the Declaration of
8 Kenneth S. Williams annexed hereto, 11 U .S.C. §§ 105, 363 and
9 Federal Rules of Bankruptcy Procedure 2002 and 6004, the
1 ee. io(
03372
• •
-• I
:
1
2
1. STATEMENT OF FACTS
4
Stan Lee Media, Inc., a Delaware corporation ("Stan Lee
03373
EXHIBIX
1 Employment Agreement and S ta n Lee d ecl are d: the stan Lee
2
Employment Agreement to be terminated as of January 29, 2001,
3
both of which contentions the Debtors' dispute .
4
Notwithstanding the foregoing, the Debtors belieye that any
5
litigation regarding the validity of Stan .Lee's employment
6
agreemelt is likely to be time consuming, expensive and I,Y
10 Assets.
11 Although the Debtors do own certain minimal offfice
21 2. Co-Brands Produced:
a) The Backstreet Project.
22
23 3. Co-Brands In De.el6p»ent:
a)) Gene Ro ddenberry's Starshipi
24 b) Mary J. BIlge;
c) X-Treme Heroes;
25 d) Police Force 2220;
26 e) Chrysallis;
f) The Stqne Giant;
27 g} Battle School Tranquility;
28 I The Creative Assets which are the subject exclude the 7th
Portal Project, which is the subject of a dispute with salim/Stagg.
03374
!£^\,% HiSi^'a i
1
,
I
• h) Story Bible; and
2 i} Stan, Junior.
4 . . Developed Deals:
a) ?O% interest in Lee Schultz Partnership.
_4
5. Other projects (Undeveloped; Debtors acting as agent
5 for assets only):
6 a} DCComicsi
p) Toon 800m:
c) Cyberworld;
d) Mobius;
8 e) Hollywood Christmas Parade;
f) Scuzzlei and
g) Scuzzle Design. -
to 6, All trademarks, copyrights, original artwork and
promotional material relating.to the foregoing Creative
11 Assets.
12
13
14
Due to_ lack of finanCing, pre-petition the Debtors laid off
15
most of their employees and generally ceased ongoing operations.
16
The Debtors filed the instant cases in order to find a strategic
17
part
18
recovery for the estates.
19
the outset of these cases, the Debtors created a sales
20
memorandum, (the "Marketing - '
21
2 listing of the Debtors' assets, primarily consisting of the
1 J6g 03375
."
28
9
gXHSt 1 PAC
03376
^C..'
;^^ 1 .}
28
11
03318
BCHi _i„PAGiJy/
1 Creative Assets and exploit them, with the estates sharing in
2 future revenues .. Based on the Debtors' unsuccessful marketing
3
efforts and the importance of Stan Lee's personal involvement in
4
the productions, it was evident that the highest and best use for"
5
the estates' assets would be through the exploitation of such
6
assets by Stan Lee. Accordingly, the Debtors engaged in
7
negotiations with Stan Lee,. who was represented by independent
8
9 counsel, regarding the development apd exploitation or the
03379
EXHffi!T_
.: /
"t
Creative Assets.
S
3. The sale shall specifically exclude the follow:ng;
7
ao All cash, bank deposits and/or cash equivalents of
8 : the Debtors.
9 bo All of the Debtors' office equipment, computers,
and serv.rs. .
10
c. Claims, lawsuits ard causes of action of the
11 Debtors. "
d. Tax refunds and tax attributes.
12
e. Claims for relief under any of the avoiding powers
13 provided for under Chapter 5 of the Bankruptcy
Code.
14
All books and records of the Debtors that do not
15 relate to the Assets.
g. The Debtors' corporate charter or qualifications
16 to conduct business as a corporation, arrangements
with' registered agents relating to foreign
17 qualifications, taxpayer ard other identification
nuiers, seals, minute books, transfer books, and
18 other documents relating to the organization,
19 maintenance, and existence of the Debtors as a
corporation; or any of the rights of the Debtors
20 under this Agreement.
h. The Debtors· interest in Conan Properties, Inc.
21 and any rights or interests, including
22 intellectual property rights, and interest: in any
of the properties and assets of CPT .
23 4.. In consideration for the sale <£ the Creative Assets,
24
the following revenue-sharing program shall pe implemented by the
25
parties;
26
Until such time as the allowed secured claim of
27 Interfase is satisfied in full by the Debtors or
their estates , (the "first Target"), the Purchaser
28 shall pay {to the Debtors, or their estates, for
13
.AFitt 1 03380
1 payment to Interfase, 60% of the gross income
2 received by the Purchaser frof the.explo:tation of
the Primary Assets, which are set forth in
3 Sections 1.1.1,- 1.1.2, and 1.1.4 of the AgJEement.
©CHIBIX 1
03381
, '
eCHlBIt
1 PAGE,J-/X 03382
- X
*J ^^ ///T' 03383
mm
1 . Therefore, in the event that the exploitation Assets
2
results in gross income of $4 million, the Debtors' estates will
3
generate, after payment of Interfase's secured claim," the sum of
4
$1,683,333.00.
5
6
7 H. Projected pistribution Based on $7 Miliion Total Return.
In the event that the Purchaser "hits a jackpot" with the
26 results
. in gross income of $7 mllli9n, the Debtors' estates will'
27
28
17
1 M B 03384
'^-- .
..
•:"-"• A
1071 (2d Cit. 1983). The pa)ty moving under Section 363 (b)
03385
' t PAGE UJ
a -•
..V
with insiders.
11 re George Walsh Chevrolet, Inc., 118 B.R. 99, 102 . (Bankr. E.D.
12 Mo. 1990); In re WBQ Partnership, 189 B.R.. 97, 102 (Bankr.
13 E.D.Va. 1995}; ln re Lady H. Coal Co., Inc., 193 B . R. 233 (Bankr.
1 4 S.D.W.Va. 1996).
15 The Debtors' proposed sale to Purchaser meets the foregoing
16 criteria, is appropriate and should be approved by the Court,
17 1 Soud Business Puxpoae
18
There must be some articulated business justification, other
19
than appeasement of major creditors, for u5ing, selling or
20
leasing property out of the ordinary course of business before
21
the bankruptcy judge , may order such disposition under Section
2
23 363(b). In re Lionel Corp., supra, 722 F.2d at 1070. - The Ninth
n ^. 1/5 03386
1
the estate under Section 363 {b} . In Walter, the Bankruptcy
2
Appellate panel, adopting the reasoning of the Fifth Circuit in
3
In re Continental Airlines;. Inc., 780 F.2d 1223 (5th Cir. 1986)
4
and the Second Circuit in In re Lionel Corp., supra, articulated
5
the standard to be applied under Section 363{b) as foilows:'
6
"Wlether the proffered busiJess justification
7 is suf ficient depends on the case . As the
se cond Circuit held in Lio nel, the b ankru ptcy
8 j rdge should consider all salient factors
9 peltaining to t he , proceeding and,
accordingly, act to further the diverse
10 interests of the Debtor, creditors and equity
hoiders,- alike. He might ; for'fexample, look
11 to such relevant facts as the, proportionate
value of the asset to the estate as a wholei
12 the amount of elapsed time since the filing,
the likelihood that a plan' of reorganization
13 • will be p roposed and confirmed in the near
'future, the effect of the proposed
14 disposition on future plans of
reorganization, the proceeds to be obtained
15 f:om the disposition vis-a-vis any appraisals
16 of the property, which of the alternatives of
use, sale or lease the proposal enViSlons
17 . and, most importantly perhaps, wh!ther the
as s et is it;creasing, or decreasing in valle.
18 This list is not intended to be exclusive,
but merely to provide guidance to the
19 '. bankruptcy judge."
20 In Re Walter, supra, 83 B.R. at 19-20j citing In re Continental
21 Air Lines, Inc., 780 F. 2d 1223, 1226 (5't Cir. 1986).
2 The facts pertaining to the Debtors' proppsed sale to
23
Ptrchasers amply substantiate the Debtors' business decision that
24
their contemplated asset sale to Purchaser in accordance with the
25
terms of the Agreement is in the best interests of the Debtors'
26
estates and 1heir creditors and merits the approval of this
21
28 C o u r t .
• '
03387
eCKIBft 1 mG^M
:„ <
•} •••J - • •-
10 clear that such entities·..did not care as much about the Creative
11 Assets as they cared aboqt bringin9 Stan Lee on board. However,
12 due. to the alleged breach of Stan Lee's employment agreement and
13 the fact that it is unlikely that a personal services contract
14 can be assumed and assig ne d over Stan Lee's objection, the
15 negotiation . process was very difficult for the Debtors.
16
Eventually, the Debtors were able to reach an agreement with Stan
17
Lee with respect to the Creative Assets, which agreement the
18
Debtors believe is acceptable to the Committee, pursuant to which
19
the estates - will share in a percentage of the gross income
20
derived, by the Purchaser from the exploitation of the Creative
21
Assets.
2
23 Based on the foregoing, the Debtors were able to monetize
Code.
'(3d. Cir. 1986), Willemain . v. Kivitz, 764 F.2d 1019 (4th Cic.
5
1985}i In re Snyder,' 74 B.R. 872, 818 (Bankr. E.D. Pa. 1987); In
32 B.R. 708 {N.D. Tex. 1983}. However, the Debtors also reaUze
12 (Bankr. S.D.N.Y. 1992) " a f f d, 147 B.R. 650 (S.D.N. Y; 1992). "It
13 is a well-established principle of
14 objective of bankruptcy sales and the [debtor's] duty with
15 respect to s,ch sales is to obtain the highest price or greatest
16 overall benefit possible f6r the estate." In re Atlanta
17 Packaging Products, Inc., 99 (Bankr. N.D. Ga.
18
1988); see also In re Wilde Horse Enterprises, supra, 136 B.R. at
19
841 ["in aDY: sale of estate assets, the ultimate purpose is to
20
obtain the highest price for the property sold"] .
21
The Debtors believe that the terms of the Agreement
2
sharing in the future revenue stream of the exploitation of the
23
2 Creative AssEts) constitltes a fair arid reasonable pU'rchase price
25 for the assets under the cU.rrent circumstances for the following
26 reasons;
27
28
23
the terms of the sale, which terms have now been approved and
11 was clear that the only way to maximize the value of the Creative
12 Assets was. to have a package. deaL with Stan Lee. Pursuant to the
13 Ag reement, Stan Lee will be the person that is primarily
14 responsible "or exploiting the assets. As a result, the Debtors
15 were able to overcome the primary obstacle to maximizing the
16 value of the Creative Assets.
17
3. Based on the revenue-sharing arrangement se t forth in
18
the Agreement, the of tne Debtors are aligned with
19
those of the Purchaser. In other words, i: the revenue stream is
03391
fe#\HiBiT PAGE
•:
i ) ;
1
the active involvement of"the Committee, and represents the best,
2
and only, offer received by the Debtors. For all of the reasons
3
described above, consummating the proposed asset sale to
4
Purchaser in .. accordance _ with the terml of .the_ Agreement is
5
clearly the -,b"est option available for the Debtors' estates and
6
their creditors.
1
.4. Good Faith • .. . •
S
9 When a bankruptcy court authorizes a sale of assets pursuant
19
•"Good faith" encompasses fair further speaks to
20
the integrity of the transaction. ln re Wilde HorSe Enterprises,
-21
supra,, 136 B.R. at 842. With respect to the Debtor's conduct ,in
2
conjtnction with the Sale, the good faith requirement "focuses
23
principally on, the element of special treatment of the Debtor's
24
insiders in the sale transaction." See In re .Industrial Valley
25
26 Refrig. and -Air Condo Supplies, Inc., supra, 77 B.R. 15,
27 With respect to Purchaser's conduct, this Court shOUld consider
28
25
i
^iX^M 03392
- - . • >
^:^
12 Exennium, Inc., ' 715 F.2d 1401, 1404-05 (9th Cir. 1983).
28
26
03393
.TI .PAGE I^k'
'^
27 propertYi
28
27
03394
[HIBIT_IL=.PAGEJQ3
, -S
:
(4) such interest is in bona fide dispute;
2 or "
3
(5)' such entity could be compelled, in a
4
legal or equitable proceeding, to accept a
5
6
11 U.S.C. §363(f). section 363 (fl of the Bankruptcy Code was-
7
drafted in the disj unctive. Thus, a debtor need only meet the
8
pro'isions of one of the five subsections of Section 363(f) in
9
10 order for a sale of property free and clear of interests to be
11 permissIble.
12 3. The Proposed Asset Sale is l e : s s i l e
" U.S.C. Section 363{£) (2).
13
The only secured creditor in these cases is Interfase" which
14
provided post-petition financing ($250,000) to the Debtors and
15
which .eceived a blanket security interest upon all of the
16
Debtors' assets, including the assets subject to this M.tion.
17
Thie Agreement acknowledges the existence of the Interfase secured
18
and provides for the payment of secured claim before
19
20 any distribution is made to the estates. The Debtors believe
22 that its liens attach to the proceeds derived from such assets.
03395
iXHIBIX 3^?AG^J^
-v
:
1 of all liens on such property." Interfase is the only creditor
2
that holds a security interest in the creative Assets. As
28
29
t J L P A G i ^ "0.3396
£X
--
r
1 IJJ,. CONCLUSION
2
For all,: of the
3
foregoing r e as ons, the Debtor9 respectfully
4
.request that :the Court tl} grant the Motion; (2) approve the sale
5
upon the terms and conditions set forth in the Agreement; and ([3)
6
grant such further and additiohal relief as the Court deems just
8 and pxoper. • . . .
ING.,
Delaware corporation
Dated: November 2001 STAN LEE MEDIA,
arid
STAN LEE MSSl A, INC.,
. .. .. a Colora«^o corFO-i^ct^i.?
10
11
12 FIN" .
^AIG M. RANKIN
13 DAVID B. GOLlCHIK
LEVENE, NEALE, BENDER, RANKIN
14 & BRILL L.L.P.
Attorneys for Chapter 11 Debtoxs
15 and Debtors in Possession
16
17
18
19
20
21
22
23
24
25
26
27
28
30
03397
EA rjl.5
-;.
••}
1 D E C L T I O N OF K T N H S. "WILLIAS
2 .
3 I , t e n n e t h $ . W i l l i a m s , do h e r e b y d e c l a r e a s f o l l o w s : ,
17 d e b t o r s i n p o s s e s s i o n p u r s u a n t t o 11 U. s . c . §§ 1107 and 1 1 0 8 .
18 4. Stan.;Lee Delaware i s a wholly-owned s u b s i d i c : y of Stan
J9 Lee C o l o r a d o : s t a n Lee Colorado is a public corporation that,
20 p r i o r t o t h e P e t i t i o n Date, t r a d e d on
21 "SLEE" .
2 5. The Debtors operated as a digital entertainment studiQ
23
that,^ prior, to the Petition Date" developed and distributed
24
branded entertainment properties under the direction of pop-
25
culture icon stan Lee, co-creator of such classic characters as
26
Spider-Mar, the Incr,edible Hulk™ and the X-Men'.
27
28
31
03398
1
") ':
23
24 9. Due to lack of financing, pre-petition the Debtors'
25 m€magement laid off most of the Debtors' employees generally
26 ceased ongoing operations. The Debtors filed the ins .
27
28 2 The Creative Assets are the subject of this Motion ex(
Portal Project, which is the subject of a dispute with Salim/Stag'
32 ' • - • :
i) 1
~X
28
33
EXHIB! 1 0300
^
.301
.
1 in the United states and in Canada. However, as a result of
2 Interfase's iexclusivil:Y period, other potential deals "f e·11
3
apar,t" and could not be revived by the Debtors. Additionally,
4
through discussions with such third partiesr it was clear that
5
(1) no party would recapitaiize the Debtors through a plan of
6
reorganization due primarily to the fact that the D^ebtors' public
7
shares (SLEEl have been damaged by the bad press and federal
10
stan Lee" personally, and his creative abilities.
11
15. As discussed above, Stan Lee contended that his.
12
13 emp19yment agreement with the Debtors was breached and terminated
,.Q.,". -ir.'rtfrf'rrif.'
D=.
E)CHIBfi: 13
•^
03403
EXHIBIT.D-B^EJMI
• ^
20. On the other hand, the . Agreement allows Stan Lee to-
1 .PAGE, 03404
..
t^.
1 characters will succeed and which will not. The general industry
2
standard is to develop a multitude of characters and "bet" on a
3
few characters succeeding.
4
23. Based on the foregoing industr y standards. and
5
assumptions, I estimate that the Assets. can generate between
6
$7 million over the next five years. As a result, I believe that
7
the terms of the Agreement (i. e. I sh<ring in the future revenue
io fair and reasonable purchase price for the assets under the
11 current circumstances
12
13 24. The terms of the proposed sale of the Debtors' assecs to
14 Purchaser were negotiated in good faith in arm's-length process.
15 The Purchaser was represented by independent counsel at all
16 stages of negotiations. Additionally, due tq the existing
17 relationship between the Debtors and stan Lee, the Debtors sought
18
and obtained the involvement of the C o r t t e e , as , the entity
19
representing and protecting the interests of the creditor base.
20
To the best of my knowledge, the proposed sale confers no special
21
or undis<losed insider of the Debtors, other
-.
(HIBlt :i 03406
1 1 - 2 7 " 9 1 "12!li 10=3184716898 . .„_-
J/WO' oo
9 California. ' l
10
11 KENErH S . WILLI.AS
14
16
11
18
19
20
21
22
23
24
26
2«
27
28
39
FROM:'
1
evi
X
A S PURCHASE AGREEMENT
i
THIS A<REEMENT made this 19"' day of NoveIber 20 6 1, by and between Stan Lee
Media, Inc:. a Delaware co ajoration, and Stan t Media, Inc., a Colorado corporation, whose
address is PO Box 116, Van Nuya, Califora_914G8 (collectively, the "Debtors"), and s t c , LLC,
a. clifornia limited liability compaly to b f o r e d and controlled by Stan Lee, whose address is
clo Arthur Liebepnan, Liebermaa & Nowak, LLP. 350 Fifth AvenQc, #7412, New York, NY
10118 ("Purchaser").
WEREAS, on February 16, 2001 (the "Petition Date"), the Debtors fled'voluntary
petiti6ns under Chaptef 11 ofUtle II, of the United States Code ("Banluptcy Code"); '
WEREAS, since · t e filing of their bankruptcy cases, the Debtor-have .een operating
their business and managing their financial affairs as debtors in posseSion;
WHEREAS, prior to the Petition Date, the Debtors operated as a digital entertairn<t
studio that developed and distributed branded e n t e r inment properties under the direction of pop-
culture icon stan Lee, cOreator qf such c l a i c characters as Spider-Ma n™ , the Incredible
Hulk™ a the X-Men™.
WHEREAS: prior to the Petition Date, Stan Lee was employed by the Debtors pursuant to
a employment agreement (the "Stan Lee Employment Agreement");
WHEREAS. prior-to the Petition Date, Stan Lee contrtded that the Debtors were in
breach under the Stan Lee Employment Agreement and Stan Lee declared the Stan Lee
Emp{oyment Agreement to 1e tenninated a of January 29,20of. both of which Cnlntions the
Debtors dispute;
WHEREAS, the Debtors believe that without the active I\Qlvement of Stan Lee, the
Debtors will not be able to exploit the value of certain of the Debtors' assets;
WHEREAS. in order to maximize the value of the Debtors' asset' for the benefit (f all
creditors, the parties hereto desire that certain assets of the Debtors be sold f e and clear of all
liens. daims and encumbrances to Purchaser pursuant to t h e t e n s and conditions s t forth herein
" a subject to Banfcnjptcy C u approval; and .
WHEREAS; the parties hereto desire to set forth certain representations, warranties and
covenants made by each to the other, as an inducement to the GOrtsummation, of the sale,
assumption and assignment described herein. and certain additional a g r n ements related to the sae.
assumption and assigmnent;
StanLe A et P
October29. 20 Pu „ . ., ,,r-.,-r-
t\o
03408
•• .. - .
1.1 Purchased Assets. Subject to and upon the terms and conditions set forth herein
and sUbject to Bankruptcy C o U approval, the Debtors agree to and will sell, tmqfer, assign and
. deliver to Purchaser at the Closing (as hereinafler defined), . a d Purchaser agrees to and wll
purchase, acquire and take assignme!t and delivery of the following. a more particularly
- -
dicribed in Exhibit 1.1 hereto (conective1y, the "ASsetS't: . - ---- .-
CBrands In Development:
. . 1:1.3.5 Chtysallis;
•O- PAGEJM
P^HiaiT_JL^rA'^C.==i=^=^ ' 03409
h)
1.1.5 Other Projects (Undeveloped: Debtors acting as agent for assets onM:
Other
L
- 1.1.5.1 D Comics;
1. 1.5.3 Cyberwodd;
1. 1 .5.4 Mobius;
• 1. 1.5.6 S c u l e ; and
1.2.1 All cash, bank deposits and/or cash equivalents of the Debtors.
1.2.5 Claims for relief under any o f he avoiding powers provided for under
Chapter 5 of the B a n I p t c y Code.
1.2.6 AU books and records of the Debtors that do not relateto the Assets.
1.2.& The Debtors' interest in Conan Propertie. I1c. ("Cpr" and any rights or
interests. including intellectual property r i g t , a r d uterests in any of the properties and assets of
CPL .
1.2.9 Any property or interests b P[O perty not expressly included in Section 1.1.
A ^
St O o D sset Pindiasc ^ ^ 3
October 2 3 . 2 o l '
1^7.
EXHIBIT 1 P A G E 0310
ATICLE2
2.1 In consideration for the p m h a s e of the Assets described in Sections 1.1.1, 1.1.2,
and L1.4 (50% interest in' Lee Schultz JPaitA erhip) other than the those Assets d C e b e d in
Sections 1,1.3 and 1.1 .5 above (the "Priniary A s ets"), the Purchter s h a pay to t e Debtors, a
percentage ofthe Gross Income, as defined in Section Z 3 below, received by the Purcbaser ftom
the exploitation of the :rimary A$sets,-.pursuant to Sections 2_Ll-2.1.3 helow. T O e percenttte of
Gross Income to which rIe Debtors u m entitled hereunder shalt not be re O uced of limited by or
Subject to deduction, ofiset or recoiqjrnent on account of any expenses or obligations paid or
incuired by Purchasf, including withou t limitation any compensation or lenefits paid to, or on
'behalf o f Stan Lee, subject to te.provisions of Sections 2.1.1-2.1.3 below.
2.1.1 Until such tinie as the allowed secured claim of Interfase is satisfied in full
by the Debtors on their estate for paymeiif t o Interfese (the «First Targe;t"), t e Purchaser shal l
pay to the Debtors, or their estates, 60% of the Gross Income received by the Purchaser from the
exploitation of the Primary ASsets: For example, if the Purchaser is entitled to 50% of the
revenue ("Purchaser's Share") from a production (e,g: Lee Schultz Partnership) the Debtors, or
their estates, will receive 600/ 0. of Purchaser's Share or - 0 % of the revenues generated from that
production.
2.1.2 Upon successfully achieving the First Target and until such time as the
Debtors or their estates recover $ 5 0 , 0 0 0 from the Purchaser's exploitation of tne Primary Assets
(the "Second Target"), the Purchaser shall pay to the DebtorS, or their estate. 40% of the Gross
Income ieceived by the Purchaser from the exploitation of the Primary Assets.
2.1.3 Upon succesflly achieving the Second Target and until such time as the
Purchaser recovers its advance described in Section 2;1.1 above, Wherein Purchaser consented to
.
increaSe the Debtors' share of the exploitation of the Primary Assets from 40% jo 60% of Gross
Income received by Purchaser until such time a Interfase's security interest is satisfied in f l l ( t h e
« h i r d Target"), the Purchaser shall pay to the Debtors, or t e i r estates, 20% of the Gross Income
received b y the Purchaser from the exPloitation of the Primary Assets.
2.10 Upon successfWly achieving the Third Target and until such time as (a) all
allowed c a m s (excluding any equity interests in the D e b t f rs) are satisfie t in fiU; and (b) t U e
Debtor'' estates receive the sum of one (1) million dollars from the exploitation of the Assets over
and above the amount n e c e s s r to satisfy all- allowed claims, the Purchaser shan p y to the
Debtors, or their - est m tes, 40% of the Gr a ss Income received by the Purchaser from the
exploitation of the Pritnary Assets.
2.2 In consideration for the purchase of the assets cescribed in Sections 1.1.3 and 1.1.5
above (the "Agency Assets"), the Purchaser shall pay to the Debtors, or their estates, 12% of the
G r s fncine received by the PUrchaser from the exploitation of the Agency Assets:
^4 . ; .
IXHBITJLPAGEJM^ 03 411
• : .
2.3 F(f purposes of this Agreement "Gross Income" shaIi mean a d include all
i ncome, revenue. benefits and consideration o f any kind, and in any form derived, directly or
indirectly from the Assts includini without limitation all rights and interests in any cash,
, accounts receivable, stock, joint venture interests, p a t r s h i p interests, limited liability company
interests, securities, promissory notes, license agreements, distribution agreeinent and accounts
receivable relatingin any Wy to t l e eXploitation of the Assets including that which is derived
f r ! the personal services'" ofStan Lee inc1uding services as a creator, writer, producer, animator
or consultant *
2S Purchaser shall not be entitl ed to any revenues derived from any agreements or
joint ventures in existence as of February t6, 2001 or agreements created during the Debtors'
Chapter 11 cases, including. without limitation, any revenue, profit participation or distribution
from a n I agreement relating to any of the characters. projects and intellectual property rights
described in Section 1.1 hereof,
2.6 Purchaser and Stan Lee, individually, shall not be required to share with the
Debtors any income or profit resulting from any a s s t now owned by Sta' Lee or herei t f t e r
created, develope4 or otherwise to oe acquired by Stan Lee other than the Asets, T e Parties
hereby acknowledge that ,the following ti^emarks are being conveye L to Stan Lee personally
without any obligation of any payment or duty of any kind fiom Stan Lee or Purchaser:
2.7 Payment. The Consideration shall be paid quarterly by Purchaser in cash, crtifed
f d s or wire transfer, commencing on January 1, 2002, and each first business day of the
following calendar q u a r e , to the extent that the Assets generate Income. To the extent that the
Assets do not generate Income durng any quarter; the Purchaser shall not be obligated to make
any payments t t Debtors or their estates.
ARTICLE 3
PURCHASER '.
3.1 Limitations. Purchaser sh11 be formed and o p e r e d for t e exclusive and limited
p u r o of exploiting the A s s t a i g n e d to Purchaser liereuooer and protding the personal
services of Stan Lee. Purchaser's governing documents shall reflect sucg limited purpose and
. S I l ^ P l c h a e Ageement 5
October 2 , ZOOI
H?
r
BCHiBVC / PAGE 1 ^ 1
- - ' I ' ' '
shall prohibit P t rchaser ftom conducting any other busineSs. Purchaser's governing. documents
shatt also restrict and prohibit Purchaser from granting any liens or security interests or
e n c u * bering any of its assets, .inCluding tire Assets acquired hereunder, w e th the sole and
exclusive exception of the security interest provided for t d e r this agreenient. Purchaser's
goveJng docinnents shall also restrict P u r h e r t o m borrowing or incurring any indebtedness.
with the sole e n ception ofiildebtedness created in the o r d i n a coune of Purchaser's business.
^Purchaser shaii rio t acquire any assets other than the Assets.acquired hereunder ot acquir· in
connection with the exploitation of said Assets. Purchaser shall not t a f e r , convey, a O ign or
create a y inte e t m a y of the Assets acquired hereunder or any of t e revenue or other
consideralion or value g m i e r a t e d therefrom, without the expiessw ritten conseot of the . e btors
and the Creditors Cpnanittee.
ARTICLE 4
4.2 Closing. Subiect t Bankrxiptcy Court approva. the parties $hall close (tiie
"Closing") t e transaction contemplated by t £ i s Agreement (the "Transaction") within ten (10)
days afer the entry of said Order as required in Section 4.1 (the "Closing Date"). The Closing
shall take place at·a location to be agreed u I n by the partiys, or by facsimile and overnight
courier for the conve[ience of the parties.
SIa. l e J set P u r A g r e t 6
Oobe 2J. 2001
EXHIBll 03413
4.3.2 Such other docwnents a may be reasonably requested by Purchaser in
connection with the convexance of the Assets and the continued effective operation thereot
4.4 . Closing Documents - Debtors. At the c lo s ing and thereafter, Purchaser shall
. deliver t Debtors all documents. necessary to effectuate the terms and provisions of this
Agreement . ' .'
ARTICLES
LIEN-FRJEE SALE
5.1 Up S e n t a r e Clos t g and cnsSent with the Order of the Bankruptcy Court
au1orizing the sale," all right, title and interest in and to the Assets shall be immediately vested in
Purchaser free and'clear of any and all liens, claims, encumbrances and security interests of any
..t P pe wh s tsoever, pursuant to Bankruptcy Code Sections 363(b) and (Q
ARTICLE6
6.1.i.2 Filings wit h nkruptcy Court Made. All filings with the
Bankruptcy C u required by S o n 3.t hereof shall have been made by the Debtors and all
approvals and Orders sought from such Bankruptcy Court t h erein shall have been g t e d .
6 ..1.1.3 Al. liens on the Assets shall have been either " removed or
Wived or (ii) made the subject of an Order from the Bankruptcy C u permitting the sale of the
Assets free andclearof any liens.
6.1.2 Condition o Obligation ofthe Debtors. The obl t gation of the Debtors to
consummate the transact6ns to be perfQ n e d by it in conneCion with tie Closing is subject to
satisfaction of the following conditions: .
6. 12.1 The Purchaser sbaR have performCd and complied with all of its
covenants hereunder in aI"'material respects through the Closing.
03414
---. )
6_12.2 The Bankruptcy Court shall have issued an Order approving the
t c t i o n s as deScribed herein.
ARTICLE7
MS(ELLANEOUS PROVISIONS
7.1 AccouwR. The Purchaser shall provide the Debtors, their estates, and the
Creditors' Committee vrith a wtten accounting, in such reasonable detaji a the Debtors, their
.estate u or the Creditors' Committee shall request, prepared in accordance w i t genel1lly accepted
accountjiig principle; at the end of each c!enda quarter of all income and expenses attributable
to t e tssets. Purchaser shall provide the Debtors, their estates and the Cteditor'' Committe
w i t suc 1 accounting Qn October I, January 1, April l, and July 1 of each calendar year,
c(1rencing on O o tober 1, 2001. In the event that Rcounting teporting date occurs on a
Saturday, Sunday dr legal holiday, such acfounting will b due the f r t business day thereafter.
Debtors, their estates and the Creditors' Committee shall have the right to request an audit of such
accountings by giving 10 days w r t e n notice to Purchaser. P i h l e r and Debtors shall seleCt a
iutually, reasonably acceptable f r of accountao t .s to udertake such audit Purchaser shall
m e available to such accountants during normal busines bours any and all documentation and
information reasonably requested by such accountants in connection with such audit. In the event
that an audit determines that there is a discrepancy in any amounts paid, the party that has
received any excess shall promptly remit such amounts (plus interest at 8% per armum) to t h e
other party. The costs of one audit per year shall be shared equally between Purchaser and
Debtors; the costs of any additional audit requested by Debtors shall be borne by the DebtIs
uIlesS sucb audit discoverS a discrepancy in the Debtors' favor of at least 1 0 / of the expMises or
income reported during the audit penod, at which time the costs of the audit shall be bore by the
Purchaser.
7.7 Disclosure of Projects. In the event that the Purchaser enters into any contracts;
joint ventures, projects, etc. (hereinafter, "New Project"), with regard to any of the Assets, the
Debtors and the Creditors'. C m t t e e shall be provided with a copy of all agreements or contracts
relating to such New Project and any amendments or modificatioDs thereto.
-. 7.3 Future of Stan Lee, Individually. Debtors acknowledge that Stan Lee shall be free,
in the future, to pursue oiler similar or competing economic endeavors and form Corporations or
companies for those p U e s . Stan Le e , however, a i es, on behalf of himself and Euhaser,
that he shll exercise reasonable business j u g e n t in pursuing opportunities a they present
themselves wth respect to the Assets which are the subject of this Agreement and shall use
reasonable efforts in attempting to exploit the Assets in light of Stp Lee's other economic
endeavors. • -
Imafjyy 03415
invalidating the refaining provisions hereto; and any s c h prohibition in any jurisdiction shaU not
invalidate such provision in any other juisdiction.
7.5 Choice of Law. This Agreement shall be governed by P e iniema1 1aws (and not
t e law of conflicts) of the State of California.
7.7 Survival and t d i n g Agreemert. The terms and conditions hereof shall survive
the Closing and shall inute to the benefit of and be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assig, s. "
7.9 Assignment Neither party to this Agreement may, asagn any <f its rights or
delegate any of its responsibilities under this Agreement, witho1t the cS nsent of the other party;
provided, however, the Debtors may assign their rights under this Agreement p u r s ! t to an order
of the Bankniptcy Court
///
///
111 . '
Ii
/1
II '
II
II ,
if.
Oober2; 201.
\%
1 M 0316
t o
".
-Y)
7.11 Termination. I addition to the rights of the parties to terminate this Agreement as
set-forth elsewhere h e i n , this Agreement may be terminated at any time, by the mutual
agreement of the Debtors and Purchaser.
/ • .
ui _ .
I I _ • •
. / • , • ,
1 . • ] - . . .
I • : - -
% - :
S · L e Aset l c h c A g e . 10
· O e r 23, l o t i
So·
03417
1 1 : 2 t11--33 1 12.11
II>=31.8a7I6838 . t-w^r „ o
DEBTORS:
STAN LEEMEDTA, INC.
a D c f l w corporatjon, a C d
STAN LE r M I . INC,
a Colofrado egrpoiaiion
. .^
By: ^
Kenneth S. W i e s
T c r Chief Executive Officer
--. PURcHER:
SLC. LLC
a California Limited Liability Company
By: .
Namc:
Its:
Sf
EXHIBItH 03413
Oc. 22 01 03:29p • , - - . lee media ca^^580-67'8 . p.2
a
IN WITNESS .WHEREf. or the <bY :M
DEBTOR.
' -• S T A e LaEE M r l J
a Dcliwaie cotporauon, and
STAN I E E M F I A INC..
aCol(r( c r t l i l
WlllinlT
PURCHAER:
SLC.LIC
a CaUfcniia Uinrtw^iabilUy Coinpnny
By: _ _^. ^ ^ .
* « « i . » J a 3 03419
j EmlTl.l
Stanlee.NET
Wholly o v e d , Production
So-
O e d Produced (contd)
TheAccnser
WhoUy Owned Produced
Description:
D e Mason, a criminal defense lawyer, could Qutmaneuver any prosecutor. helping some of the
cit a s mostheinous criminals walk with barely more than 1 slap on the W But when an attaak
by a disgruntled former client leaves his wife dead and Mason p a r a l y e he desperately wishes
for the chance to redem: h m s e t fulled from the brink of d e t by a mysterious stranger, he is
given ail amazing wheelchair, which t a f o r m s into a suit offiJturisticarmor — not only
alowing Mason to walk again, but dramatically muitiplying his streng;th and p r o v d g . him an
arsenal of exotic weapons. Mason takes to the streets, voWng to bring t n e criminals he once set
free to justice.
. Webisodes!
22 Webisodes produced and orgnglly distributed by Shockwave.com. Shockwave:cm
maintains limited back end in p r o p r until recoupmentof licensing fee.
The rest of the world is available for primary exploitation (Subject to Fox Kids Latin America
Agreement)
Gnies:
Flash Bs
Based, Iteractive Games
T e Accuser's Revenge
Print Engines:
SLM has creatca series of flash based print engines t h a have the ability to print a number of
fun and different paper-based activities:
- Clendars
• Trading Cards
5S
The. Drffer *
Wholly Owned in Production ~~ ' ' •• ' ''.
. c p o : - " • • - • - • . .
Dethew Zane, code nameS "Drifter", is a man from nightmare f t 20'4 who has survived
' e Crash," a woridwide coraputer m e i d w t f at has k i l e 423 million people worldwide and
cause e another t O o billion t m go insane within twenty-f b v r hours. Using untested time travel
research, Zane arriveS in present day 2000. His lission is t v prevent key developing
technologies f m dohiinating mankind's descendants' lives and crushing the human s , t . A the
'Drifter" p u S e s his goal, he must evade security agent^ a r m the f t e , intent on his
d . ' . ,.
Webisodes:
12 Webisodes ordered fiom scifi,com
8 of 12 Webisodes completed in MicmeOia Flash
Deal Points:
Sci Pi pays Y of the production costs for all 12 webisodes up to $12,500 per webisode
Sci P i receives 14-week exclusive distribution period
Sci Fi a d SLM share revenues generated from syndication 50150
G m e B a e Interactive Q
Dri a er Racer ^
AOL =
T Treatment
Live action TV treatment available
b^
B C H l B T L l ^ m S i J J ^ 03422
?--\
Description . . {
S t n clones himself but something goes horribiy wrong producing an evil, and highly
opinionated, version of himself. .
Screen Friends; -
The Screenfriends Inter(Face)TM delivers a · entertaining and creative way for people t( interact
withflieircompllters using vocal dialogue" instead ofa mouse or keyboard. ScxeenFriends wQrk
wit t just about any PC compUer and there is no tcining or special equipment required. Users
c choosefroman ever-expanding set of characters that appear on the computer screen, ready
and able to operate the entire sySem. S c r r e can open computer programs, search the
web and help user r buy merchandise online. SLM created an Evil Clone ScreepFriend that talks
back in hilarious rantsfromthe real Stan Lee.
5^
1 PMm l 5 3 - °^«^
• • • - > )
Description:
" T C Backstreef
Backt Project," an animated s e p r ying the Backstreet Boys as eyber C r s e r e ,
each witii wlque powers too DTOtect
protect :the
e Earth
E .•
- • SLM entitled to recoup costs, thereafter 65/J5 revenue split between B W SLM
• Parties co-ow aU rigt
• Exploitation subject to joint control
Weblsodes:
8 Webisodes produced in Macromedia Flash
2 minute conceit introduction produced and used on their last tour
Backstreet Project.cpm:
T: c e Backsteetjectcom is a fiilly fonctional entertainment portal revolving aroun a he
superhero alter egos of the famous BackStrete Boys Music 9roup. T i website has all the
element of stanJe[net
• Webisode w - "
• Games;· easy to difficult 4-5 games
• Activities, c s mics composer, print engines,
Graphic Novel: .
.4000 copies of fist edition were sold at seven venues on the last BSB concert tour.
10,000 copies offirstedition sold on line.
Approximately 45;000 2n edition sold at retail.
First S3QO,OOO
Approved Script for 2R comichok
5(s>
Description:
SLM has partnered vrith . e estate of sci-fi Jegend and "Star Trek" creator Gene Roddenberiy to
develop a newly discovered origin( Roddenber project,"Starship"; into a global, muliimedia
enterfeinment franchi se under the collective brands ofRod: enbeny and Stan Lee.
Deal Points
• SLM and Majd Roddenber I John Semper entitled to 50150revenuesplit after
SLM recoups costs; · '
• Joint control of offlini exloitation;
• Reversion rghts exist i f c e r n perfon a c e targets are not met;
• Roddenber and Semper have claimed anticipatory breach of agreement in light
of SLM's suspension Of oPerations.
5,
SLM developed new animated franchise with R&i songstress Mary J. Blige to portray her as a
fantasy Sperhero. Series is heavily : u b . with M a r po$ayed as a high tech "hero of the
hood."
Deal Points
• SLM and Mary J. Blige entitled to 50/50 revenue split after SLM recoups costs;
Website
Gated
Lmited activities
SmaU Game
A fve-year agreeInent ha§ b n forged with Kentuck n-based sports m gement f a r OMS Ltd; •
to c J e e sup e hero alter-egos for Mike L a R o c , Bea Bostr m Missy Giove, S ebastia n Tortel1i.
S l J t Summers and 4 c e laac7 rcing stars who are known in the world of two-wheeled
e e me sports, reaching an estiraated audience of over 450 million recorded annual impressions.
Under the agreemet. the companieS will jointly develop and own "animated bran&extensions"
of these popular athletes for all media exploitaton. with Stan Lee M e d i a r n i n g the s91e right
to distribute projects for Internet, home video, cable. sa:tellite and other meditims. including
traditioni licensing and merchandising . "
D e Points
• SLM and OMS entitled to ?0/50 revenue split after SLM recoups costs;
• SLM control of exploittion:'§ubjeqt to some consents ·fom OMS;
• SLM nQt obligated to produce under agreement prior to ob t i i n g sufficient
Police Fo.rce2220
Co-Branded in Development
Description: .
Set intiieyear2220, "POLICE FORCE 2220" is a futuristic vision of the world of crime
fighting that focuses on a U elite t i o ofpolice officers as they strujggle to save the world firom
global crises of the 2 3 t Century. tangley and Lee said they intend to expand the " P O L I c
FORCE 2220" franchise to live-action television and feature fil while building a global
audience on the Internet .
• SLM and Langley entitled to SO/50 revenue split after feCoUpS costs;.
• SLM controls online media exploitation, Langley controls ofiSine media
exploitation;
• Webisodes to be initially co-distributed on staree.net and crime.com..
An an reatment evision t^tment has been created based upon this property.
i:) -^
^j . . - .
In t e e far f t U , in a barbiic world of sor i ery and swords, a sonically gifted w o r n searches
For a cure for her tripe and" discovers there is a mystery to her origins ..•
A e LAPD detective left to die in a toxic dump, gains the power to temporarily t i s f o f 1 into a
Colossal crime-fightng creatUre of stone, tattooed with miysterious rune.like sym b ols of
Unknown origi!.
Battle SchoolTranquiJity
Developed Property
Description
With a impending alien invasion, Earth's a t hope is a group of telekinetically gifted teenagers
training to use alien battle suits at a special academy o n the moon.
S t r Bible -' ;
Character development ;
Television
Are iinfinal
fnal discussions regarding
reg entering into a development agreement with FoxKids for the
deve[o f ent and production of a pilot based upon the property.
Stan Junior
Developed Property •
Description
Stan Jr. is an animated s e f e which tells stories on t c o levels: (I) the everyday life of
Cntemporaiy Stan Jr.. portrayed in traditional cartoon animation style, and (2) the world of Stan
Jr.'s imag-advettures, where even the most "commont events become uncommon. amazng
." adventures when flterd ! o u g h Stan Jr.'s psyche.
SLM is in a 50/50 partnership with TLC to produce a pilot and pitch series.
Devdoped Property
D e l Description
SLM and Lany Schulfe are partners in a joint .venture relating to the production and d c ibution
of a number of properties (Se attached schedule). Many of t e p r p e s a Significantly
developed and ready t e be pitched to television and motion picture studios. For instanc,
Tribune Entertainment h expressed significant interest in a possible teleVsion series
suroooding t e "Diabella" propert. a we have receive i a great deal of interest with respect to
t e "!, Werewolf property.
:
l . I ^ OTHER PROJECTS
DC Comics
Developed Property
Deal Descriptiom
SLM has entered into an agreement with DC Comics, whereby Stan Lee has agreed to create
" a f t r a versions" of the major DC Cbmics cbaracteI (Superman, Bat h an. Wonder Woman.
The Flash. ctc.) to be published in a special edition series, currently entitled "What If Stan Lee
had Created the DC Universe." Under the tcnns of this deal, SLM receives a royalty of5.0% of
the cover price on p t sales of the f r t 200,000 copies of such iSsue; and 6.0% ofthe cover price
on net sale of s u c issue in excess of 200 ,090 copies.
Toon Boom'
Developed Contract
Deal Description:
SLM has entered into an agreement Wth the Canadian software company. Toon Boom, cre<tors
of US Animation, the standard in traditional animation digital ink and pint programs. Pursuant
to the terms of t h i agreement, SLM has non-exClusive right to distribute US Animation software
in the U.S. SLM has o\ligations to fbnn and execute amarketing pla C for the software, and to
develop a user interface for the product. SLM a S owns warrants to acquire up to 1,044,888
shares of Toon Boom Technologies, Inc., at Canadian $.70 per share, of which 348,296 are
currently vested.
Cyberworld
Developed Contract
©CHIWTLJ=»=J^^^
''••l^
Mobfus
Developed MOU
Deal Description:
D
SLM is in advanced negotaons wit m Glob w l Digital Development. Ltd. regarding t e
production of a 3-D q 1 aniniate n rao^de; written by Stan Lee and the world-faous Ftnch
artist, "Mobius.' Under the terms of t v is antiCipated agreement, SLM would receive a 15%
backend after the producer recovers its h d out-of-pocket costs a o i a t e d with producing and
distributing the f,m . 8LM would also control merchitdising for t e film a d woU.d receive a
20% fe e for such services.
-
H D l l o o d C h r i t a Parade
Developed Contract
Deal Description:
SLM has entered into ah a g e e n t w t the Hollywood C h a b r ofCqmmerce granting SLM
certain exclusive rights (including broadcast rights. merchandising rights, etc.)relatingto the
Hollywood ChristmaS Parade. The agreemenr grants these rights through to the 2005 parade.
8LM is requied to pay $250,000, and certain guaranteed revenue amounts must be generated in
each yearto maintain the rigt. SLM and t e H o l l y o Oamber of Commerce are currently
in a dispute regarding ptUported breaches by both p i e s in connection with the 2000 par de .
EXHIi 03431
', -",
-i
EXHIBIT 1.1.4.1
L e c b u l t z P r o p e r t y Schedule
Guardians
Haywire (aka fixers)
War Is Heck
Braindead
Fissure
Op: Aliein
Plsnet
Captain Super
Bots/The Retrievers
Adjuster
Con Man a d the Cop
Glardians
Micro-Man/Micro-TC
Missing Link
Pandora's Box
T r om ple Helix
Tomorw
Demolisher
Death Hunt
Talon
Raiders of Space.
The Visitor (Quarantine)
Carman
Cougar
Femizons
Hobson's Choices
The Un-Huma
Diabelta
Tarantula
I-Wercwolf
X-Isles
T e Terminal
Vindicator -
Decoy
The Lighthouse
Disaster Blasters
Stronghold
Mumoo Jumbo
Rocker
^c
> ^ ^?.^
' ^
EXHIBIt 1 03433
.
.V
-. ..-
. -
.
EXHIBITS -"
- ,.-;
. -- - -. ... ..
^"-CR.>-^
' ^ ^ • • • : ^ s •;
0^34
BOiiBIIULPAGE.
'•- r ••
CounselJ B Ame E can Express RSN. American Express Cousc fot Douglas Eminett Realty F u
i851 E o F m nSl35119) 1997-<'t935-1C
D n Sheuoothristian S. Molnar
11990 San Vicentc Blvd. 1240
L Angeles. CA. . 9 - 5 0 0 4
- D V s e l CorHti & K z b ton -0935-121t counsel forHU & Knowltonn935-122. C e l for EMwrah Schlfchting (1935-17.
David A. Scbwartz/EliEabeth L Rosenbfatt Neal H K l U e r / A m y Benen tt Banr R G r e E q
I r l & Mann Da 4 & G l Clackson; Gore & M a i l l a
1800 Avenue of theStais, #900 3424 Ca es C n St.. #350
Toirancc, C 8 ; 503
L Angeles, C 9 6 0 7
• ( 3 4 3 5
SKHlBff.
rl1 . I N. Uct, 2 6 2 1
V * •
hiF" F=AX
CD:.
The =
success of such C h l c d e d s supon uponits achieving a television or m o ' e
Cntract w c h may be a kened to t r e anchor tenant in a strip b k L To this televmon or
movie contracl is t e n attached merchandise- I p p a e l , comic : c s , an4 b i k c o n t r a ^ 3
majoT sub-clegories.
-s $
j_^50jOO-500,000
MJlndC
; M o v e .1 IO0.O00 •JOC.WW Boolo
JO.O0O
ComScs
25.000
Aoparet
25.000
w -^MHB!T____Ll_
i
• ^
03436
Da4IBIU»==.^fi^
. ^ - --- ..- - - -
• . .
.-::-.)
,13
Finally. if the s y e s m s are worKe weU a the time of the movie, o t show
with t e ' e c t to merchandising, book eic de^als> a retom of $8,000,000 - $15,000,00 f
over 5 ye a a wouid l t b c unlieey. It is 1 v t t to n o t h t at t s is not t ssg gesi that
a y Oi e particular chax»5tc« selcete l a dvance would achieve stich a success, but xathw
that one of the forty characters wjou d i hteve such sucossJust as Marvel's busine^ pla t
virse based was l o n a C ery large i n v e n i l of c Saracters ia create the probabi lity that
several would ' e successful.
.4
Ul
0337
• BCHiilT 1
— . • • - — —
-')
1
PJROOF OF SERVICE
I a a" e p l e i the County of Los Angeles, State ofCaKoma . I a over the age l 18
and am not a party toftew t n ac^on; my business addres i : 1801 Avenue of the Stars, Suite 112O,
Los Angles Catfom 90067.
24
25
Barabi Clark
26
27
28
Attorneys for Fidelity Leasing Counsel for u s Bank Counsdfr Warer Brothers
s u Kay B o n (1935-34) Wedell G KUsef Esq Wayne M. Stith Esq
H e . Rousso & He!d u s B c o r p l g a l Dept Wamcr Bros. (1935-35)
15910 Ventura Blvd., l : Floor PO Box 1 Q 40 u a Warner Blvd
B«rbenJ:. CA 91522
EncJno CA 91436-2829 Porland OR 9702200
Coiitsdl for Fox Latin A m e r c Channel CounSl for GE Capital Coonsel forfaterfase Capita! L
D i d M Posner Esq (1935-1 I i ) ?arshall F Golderg Esq (1935-112) LaTsrence Peitz l an, Esq. (19351-13)
Squadron. Evlenol et a! Glass &. G 0 ldberg P wlzmffli, Classman & Weg LLP
21700 &xrordSt..Ste 430 1900 Ave. of Ue Stais, I650
Los Angee CA 9006.7
WooJand l d l , CA 91367-3665
03439