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KEY WEST OFFICE

1010 KENNEDY DRIVE, SUITE 201


MEMORANDUM
KEY WEST, FL 33040-4019
TELEPHONE: 305.296.8480
FACSIMILE: 305.293.7825 TO: Bill Andersen, The Andersen Firm
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G
Stan Lee Media, Inc., James Nesfield
Chris Belland,

FROM: The Andersen Firm

DATE: January 26, 2007

RE: Stan Lee Media, Inc./Statement of Facts


____________________________________________________________

I. Parties

A. Stan Lee

Stan Lee is the American pop icon writer and super hero creator of 80% of the character franchises owned by
Marvel Entertainment, Inc., formerly Marvel Comics, Inc., which has been a publicly traded company since
1994 (“Marvel”).
From approximately 1961 through 1971, Stan Lee wrote various comic books, introducing characters that have
become among the largest entertainment franchises in the world today. Stan Lee wrote the comic books on a
"free-lance" basis at home when he needed extra money. He was paid separately from his salary as an Editor,
Art Director and Chief Writer, working in Marvel's offices. Thus, Stan Lee has reasonably asserted his co-
creator's interest in the copyrights that Marvel filed as publisher have remained his and were not ever ceded to
Marvel as Works For Hire, as evidenced by Marvel's conduct in dealing with him since his first contract in
1968.

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During 1961-1971, Stan Lee's co-creations included Spider Man, X-Men, Fantastic Four, The Incredible Hulk,
Ironman, Daredevil, Silver Surfer as well as many super-villains notably, Dr. Doom. Spider Man would be the
most vulnerable to Stan Lee's claims of co-ownership because he created it over the objection of, and against
the specific directive by his publisher and employer, not to create a teenage super hero based on a spider.

The determining issue under the 1909 Copyright Act, applicable to Stan Lee’s activities from 1961-1971, is
whether Stan Lee's co-creator's rights are owned by him or Marvel. The primary issue has never been
adjudicated, contractually resolved, and remains the biggest question in the Entertainment business today. As
set forth below, Stan Lee's rights are now legally owned and recorded in the copyright office in the name of
Stan Lee Media Inc. (“SLM”)
The enforceability of Stan Lee's co-creator's rights to Marvel's flagship character franchises can only be
resolved by a factual determination whether Stan Lee's free lance writing at home constituted a “work for hire”
under the 1909 Copyright Act based on facts known to only two living witnesses, without any contemporaneous
documentary evidence surviving. The senior intellectual property partners of two multinational firms have been
unanimous that if Stan Lee's rights were litigated, they would survive summary judgment and would finally be
decided by a jury. One intellectual property expert described such jury consideration of Stan's rights as a “horse
race” that Marvel could never afford to bet on.

There are no documents that survive the various mergers and acquisitions of the predecessor companies that
ultimately became Marvel, which was so named by Stan Lee. Copyrights were filed by Marvel's predecessor,
Timely Comics, Inc., as publisher of the compilation of works. However, Stan Lee never signed any
independent, formal recorded documents with the United States Copyright Office. Stan Lee's co-creator rights
to Marvel's copyrights were only assigned in connection with a succession of Employment Agreements with
Marvel between 1975 and 1998.

Until SLM recorded the Assignment made by Stan Lee in October 1998, of all of Stan Lee's creations and
named titles, including those referred to above and “Stan Lee Presents”, there is no prior record of any
assignment by Stan Lee, including the November 1998 assignment to Marvel, which is discussed below. A copy
of an email from Peter Paul to Chris Belland, entitled, “The History of Stan Lee Creative Rights”, describes in
great detail what characters and images constitute the intellectual property at issue. (Exhibit “A”).

B. Timely Comics, Inc.

Timely Comic, Inc. employed Stan Lee from 1945 through 1960 when it became Marvel Comics, Inc. During
Stan Lee’s employment at Timely Comics, Inc., he was responsible for the unprecedented creation of a
consumer friendly culture that incorporated the consumer as a member of the “family” with the publisher and its
employees.

C. Marvel Comics, Inc. (“Marvel”)


Marvel employed Stan Lee continuously from 1960 to August 1998. In August 1998, Marvel was in the process
of being acquired out of Chapter 11 Bankruptcy protection by Toy Biz, Inc. Stan Lee’s contract with Marvel
was voided. When the contract was voided, Stan Lee’s exclusive license to use his creations, and his bar on
making any claims to his co-creator rights, was also voided. After Stan Lee’s contract was voided, Stan Lee
sought the assistance of Peter Paul to find a lawyer to represent his interest and to possibly negotiate a new
contract with Marvel that allowed him for the first time to start his own company and compete with Marvel..

D. POW Entertainment, L.L.C. (“POW”)


POW is a Delaware limited liability company, incorporated by Stan Lee's lawyer, Arthur Lieberman, on
November 8, 2001, in preparation for a step transfer of assets from SLC to POW without notice to the creditors
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and Court, and in violation of express warranties in the Court approved Sale of Assets not to transfer assets
without approvals from the secured creditor. In 2003, there was a purported transfer of assets from SLC-(which
still did not legally exist)-to POW, which itself went public in a reverse merger in 2004 and trades under the
symbol, POWN:PK.

E. QED Productions, L.L.C. (“QED”)


QED is another Delaware limited liability corporation that was incorporated by Stan Lee’s attorney, Mr. Arthur
Lieberman, the same day as POW, November 8, 2001, in contemplation of transferring assets from SLC. QED
has been alleged to be a subsidiary of POW and in July, 2006 certain character creations, such as the Accuser
and Drifter, developed by Stan Lee for SLM, which were sold to SLC in the Sale of Assets, were later
purportedly assigned by SLM to QED in a transfer recorded with the copyright office and signed by Debtor in
Possession Representative, Kobyashi, and QED as COO Champion, both of whom are officers in POW with
Stan Lee and Arthur Lieberman. The fraudulent assignment by SLM to QED in July 2006 was never ratified by
the bankruptcy court, and occurred after the same assets had purportedly been sold under the Sale of Assets. It
was done when SLM was dissolved and had no force or effect under Colorado law (“Assignment of
Copyright”) (Exhibit “B”).

F. Stan Lee Media, Inc. (“SLM”)


SLM of Delaware merged into a trading “shell”, BCOI Inc of Colorado, in July, 1999, and thereby became a
publicly traded company. It is now a duly formed corporation of the State of Colorado. BCOI adopted the name
SLM through the merger. SLM was formed under Colorado law on April 22, 1996. SLM was accepted on
NASDQ in May, 2000 and was forced to close its doors when its stock ceased trading on December 19, 2000,
during the dot com crisis. In February, 2001, SLM filed for Chapter 11 protection as Debtor in Possession.

G. Stan Lee Media, Inc. (“SLM”), a Delaware Corporation


Stan Lee Entertainment, Inc. incorporated Stan Lee Media, Inc. on or about April, 1999 in anticipation of
identifying a trading public company with which to merge.

H. Stan Lee Entertainment, Inc. (“SLE”)


In 1998, Stan Lee formed SLE, an internet based production and marketing company. SLE is a corporation duly
formed under the laws of the state of Delaware on or about October 7, 1998. In order to capitalize SLE, Stan
Lee's complete equity contribution consisted of his assignment of all intellectual property rights in the creative
universe that he owned or controlled as of October 15, 1998 to SLE. SLE executed the original Assignment
with Stan Lee. SLM is SLE’s successor in interest.

I. SLC, L.L.C.
After SLM filed for Chapter 11 protection in February 2001, it attempted to sell all identifiable intellectual
property assets to a holding company ostensibly created by Stan Lee and a bankruptcy remote principal-(never
named)-under terms and conditions first presented to the bankruptcy court for approval in November, 2001. The
holding company that Stan Lee warranted would be the Purchaser, which was to be incorporated in California
and be competent to enter into and perform all terms provided in the Sale of Assets Agreement as of the date of
closing on April 22, 2002, was SLC, for which Lee signed the Sale of Assets as President. The records of the
California Secretary of State do not reflect any such LLC as ever being incorporated, thereby rendering false all
express warranties and representations by Stan Lee in the Sale of Assets regarding the existence and
competence of SLC to serve as Purchaser of the assets of SLM.

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The Sale of Assets provided the New York offices of Stan Lee's lawyer and partner in other companies, Arthur
Lieberman, as the address for the non-existent LLC. Liebreman was Stan Lee's partner and 1/3 owner of POW
and QED..
.

J. Chris Belland
Majority shareholder of SLM, he is the President and CEO of Historic Tours of America, the largest historic
tour company in the US with 1000 employees in 8 cities. He is also a major real estate investor in Key West,
FL. He is the assignee and beneficial owner of approximately 5.01 million shares and proxies to voting rights in
SLM..

K. James Nesfield

Current President, CEO and Chairman of the Board of SLM. Mr. Nesfield is a well known Wall Street
whistleblower, exposing the Mutual Fund Market Timing scandal, appearing on 60 Minutes and before Senate
Committees on the subject. He acquired more than 5 million proxies to revive the company after its dismissal
from Chapter 11, which was allowed to be administratively dissolved in Colorado in March, 2002. Pursuant to a
special shareholders meeting held on December 7, 2006, he appointed new board members and officers.

II. Statement of Facts

A. Stan Lee’s Employment with Marvel Comics, Inc. (1945-1998)


Employment and “Freelancing”
Stan Lee was employed by Marvel, and its predecessors, continuously from 1945-1998, in a variety of
capacities, primarily as Editor, Art Director, and Publisher. He also created numerous comic book characters
through free lance comic book writing. Stan Lee was often paid on a per script basis, at his discretion as he was
hiring himself, “when he needed extra income above his salary as a full time employee of Marvel”.

Salary Employment

Stan Lee was also paid a salary for his work as Editor and Art Director of Marvel.
Co-Creator Rights
Stan Lee never independently assigned any of his creative rights to Marvel as publisher of said comic books.
Marvel always referred to Stan Lee as co-creator of all of his creations for Marvel.
During Stan Lee’s work with Marvel, Stan Lee created the Spider Man character. In 1961, Stan Lee introduced
the idea of Spider Man to Marvel’s publisher and Stan Lee's employer, Martin Goodman. Martin Goodman not
only rejected the idea of creating a teenage super hero who derived his super powers from a spider, but
Goodman specifically directed Stan Lee not to create such a character and not to publish it in any of Marvel's
books.
Stan Lee disregarded the directive of his employer with the expectation that he would be fired for such
insubordination, and proceeded to create Spider Man at his home. Stan Lee secretly inserted the Spider Man
creation and story in the last issue of a comic book series scheduled to be discontinued, without the knowledge
of his employer. When the character became popular, the publisher agreed to formally adpt it as a Marvel
character.
Marvel copyrighted each character created by Stan Lee as publisher and thereby protected Stan Lee's co-creator
interest in the joint work (between Lee as writer and the artists employed by Marvel) . Because Marvel always
paid Stan Lee a premium under his Employment Agreements- which included the only assignments of Stan's
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co-creator's rights, Marvel was in effect hiding its royalty-co-creator payments to Stan under the ruse of a
succession of Agreements denomintaed as Employment Agreements rather than Rights Assignments.

Bankruptcy of Marvel
On August 12, 1998, during the course of its reorganization proceedings in Chapter 11 bankruptcy (1997-1998),
Marvel rejected Stan Lee’s lifetime exclusive $1,000,000.00 per year employment and the appurtenant rights
assignment agreement that was the last of a succession of employment agreements with Stan Lee since the late
1980's contract. Marvel's new owners, Toy Biz, Inc., then offered Stan Lee a new two year $500,000.00 per
year contract on a “take it or leave it” basis in September 1998. Stan Lee rejected Marvel’s $500,000.00 per
year offer and retained, for the first time in his career, an intellectual property lawyer, Arthur Lieberman, who
advised Stan Lee that he could claim his co-creator’s interest in Marvel's copyrights and survive a summary
judgment. Based on the threat of Stan Lee's litigation for his rights, Marvel negotiated an exponentially superior
contract to the one it voided in August 1998 and executed it with Stan Lee on November 17, 1998.
During the intervening period from the voiding of Stan Lee's exclusive Marvel contract in August 1998 and the
execution of a new non-exclusive employment agreement in November 1998, all intellectual property rights
Stan Lee ever owned “throughout the creative universe” reverted to him. While Stan did not know definitively
what those rights were, they vested in him by operation of the copyright law, and his creation of those rights
was never and has never been denied by Marvel.

B. SLM/Stan Lee
Stan Lee’s Assignment to SLM
On October 15, 1998, Stan Lee entered into an employment agreement and rights assignment with SLM (the
“Assignment”)(Exhibit “E”). The Assignment is part of a hybrid Employment and Rights Assignment
Agreement which was identical in form as the agreements Stan Lee had with Marvel through August 1998.
Sections 1 through 3 set forth terms for a semi-exclusive employment services agreement, including but not
limited to, consideration in the amount of $250,000 per year, bonus payments, stock options plans, and
insurance benefits. Sections 4 through 7 set forth the assignment of Stan Lee’s intellectual property rights
”forever” including but not limited to, “all right title and interest [Stan Lee] has or control[s], now and in the
future.”
Stan Lee served as Chairman and Chief Creative Officer of SLM. Stan Lee received the agreed upon
compensation for his performance as an employee of SLM. In addition, he was issued and received 3.6 million
"founders" shares in SLM in consideration for his rights assignment. The stock was worth more than $10
million based on the trading value of the stock in Sep 1999. The stock was worth $100 million based on the
trading price of $29 share in Feb 2000. In early 2000 Paul transferred $510,000 in free trading shares to Lee
through his daughter and paid Lieberman on lee's behalf more than $250,000 on behalf of the company.1
Except for a Modification and Ratification letter enhancing the terms of the agreement for the company's
benefit, Stan Lee has never made any effort to challenge the continued validity and vitality of the Assignment.
In fact, in references made and assets transferred under the Sale of Assets Agreement, Stan Lee ratified the
uninterrupted validity of the Agreement through relying on it to attempt to regain his name and likeness, and to
excuse his exclusivity of services which by his actions confirmed his acceptance of its application to him.

Ratification of the Assignment


On October 19, 1999, the SLM Assignment was modified and re-ratified by Stan Lee acting with advice of
financial and legal counsel. The Assignment was incorporated into SLM’s March 30, 2000, 10K Annual Report
as filed with the S.E.C. In addition to incorporating the Assignment into SLE’s 10K Annual Report, an
Amendment to Employment Agreement/Rights Agreement was also included (the “Amendment”). A copy of
1 See Demand Letter from Peter Paul to Stan Lee.
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the Amendment is attached hereto as Exhibit “F”. The Amendment references that SLM is SLE’s successor in
interest to the original Assignment from Stan Lee to SLM.

C. Marvel/Stan Lee Contract


In November 17, 1998, Marvel and Stan Lee entered into a non-exclusive Employment Agreement for which
Stan Lee received a ramped up compensation restoring his $1 million a year salary for his life, $500,000 for the
life of his wife should she survive him, and $100,000 a year for five years thereafter for his only daughter. Stan
Lee was allowed to spend 90% of his time working in any competitive endeavor and use references to his
Marvel creations to compete with Marvel. Stan Lee was uniquely-(over any other marvel employee)-granted a
10% profit participation in the profits derived from all TV and movie exploitation of his characters and he was
allowed to continue to independently write and syndicate a newspaper comic strip of Spider Man and receive
directly from the publisher $175,000 a year in addition to his million dollar a year salary (the “Marvel
Contract”). A copy of the Marvel Contract is attached hereto as Exhibit “G”.
SLM did not ratify or have any knowledge of the terms of the Marvel Contract, which was at all times hidden
from the world by Stan Lee and Marvel.
The Marvel Contract was expressly conditioned upon and relied on Stan Lee's assignment of all creative rights
Stan Lee ever owned, and continued to own as of November 1, 1998, and his forbearance to ever sue upon those
rights, whatever they were. Such assignment was never disclosed to SLM, or Marvel’s shareholders and
creditors, during its pre-bankruptcy existence.
A material provision of the Marvel Contract was the following: Stan Lee warranted that he had all his creative
rights and that he never made any previous assignment of those rights.

For example, in paragraph 5(a) of the Marvel Contract, Stan Lee agreed to “assign, convey, and grants (without
representations or warranties of any kind except as set forth herein) to Marvel forever throughout the universe
all right, title, and interest solely and exclusively which you may have or control […] to any of the following.”
The Marvel Contract then defines various intellectual property rights. In addition, paragraph 5(b) of the Marvel
Contract adds: “you hereby warrant that you have not assigned, licensed, pledged or otherwise hypothecated
[…] any of the Property and Rights to anyone other than Marvel, its affiliates, predecessors or their designees
and will not do so in the future.”
Between November 1998 and November 2002, Marvel failed to disclose the Marvel Contract to its shareholders
or the S.E.C., or lenders of half a billion dollars to whom Marvel warranted that “it knew of no claims
whatsoever against any of its collateral”. In addition, Stan Lee failed to provide SLM shareholders with a copy
of the Marvel Contract, thereby failing to disclose the second rights assignment to Marvel made in the Marvel
Contract.
Marvel's first disclosure of the Stan Lee Employment Agreement occurred in its 10Q filed in November 2002
with the S.E.C., as a result of Lee's threatened litigation under the 10% profit for TV and Movie clause in that
agreement.

D. SLM Chapter 11

On December 19, 2000, SLM was forced to close operations for lack of operating funds.
On February 7, 2001, SLM filed for Chapter 11 protection as Debtor in Possession (“DIP”). Junko Kobyashi
served as the DIP representative. While DIP representative, Kobyashi, became the CFO and Treasurer of POW
in 2002 with Lieberman and Lee serving as directors and officers. In 2002, Kobyashi permitted SLM to be
administratively dissolved by the State of Colorado for failure to maintain a resident agent in the state. From
2002 though 2006, Kobyashi, without notifying the secured creditor DIP lender, WildBrain, which retained a
security interest in all assets of SLM including those purportedly sold to SLC, continued to transfer assets to
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POW and its subsidiary QED while avoiding efforts by other asset purchasers to purchase the remaining
personal property in the SLM Estate. As stated in more detail below, during November 2006, after the court
dismissed the bankruptcy protection for cause and pursuant to the non-objection of the DIP, SLM shareholders
revived the company in Colorado, called the first ever meeting of shareholders in December 7, 2006, and
appointed new officers and directors.2
The Schedule of Assets, Personal Property Schedule B, filed by the DIP in the bankruptcy proceedings
intentionally hid the Stan Lee October 15, 1998 Assignment even though such Assignment was referred to as
the company's primary asset included within SLM’s 10K Annual Report (the “Schedule”)(Exhibit “H”). During
such time, Ken Williams, who remained President and CEO of the DIP, attempted to reorganize SLM and
obtain all SLM’s hidden intangible property assets free of creditors and shareholders. Ken Williams hid the
primary asset of SLM-(the Assignment)-during the bankruptcy proceedings. Peter Paul foils Ken Williams’
attempt to buy the assets out of bankruptcy by issuing a press release in May, 2001, to expose his actions. The
assets were labeled under the term “Intangible Property, Copyrights, and Trademarks” with the value stated as
“undetermined” and effectively 0. Peter Paul ensures that the fraud is brought to light.

Asset Purchase Agreement


On November 19, 2002, SLM and SLC (the phantom corporation), entered into an Asset Purchase Agreement
for the sale acquisition of certain assets as described therein (the “Asset Purchase Agreement”). A copy of the
Asset Purchase Agreement is attached hereto as Exhibit “I”.
The sale of assets was structured by the DIP while in bankruptcy. The sale originally intended to close on
November 19, 2001 by and between SLM and SLC. The Sale of Assets Agreement was amended on January
20, 2002. Prior to the execution of the Sale of Assets Agreement, WildBrain demanded an Amendment be made
to include a re-conveyance right for both SLM and WildBrain should minimal benchmarks in performance and
payment under the agreement not be made (the “Re-conveyance”)(Exhibit “J”). This re-conveyance constituted
valuable rights after default by SLC as purchaser which was also hidden from the SLM Estate.
The assets transferred to SLC under Asset Purchase Agreement include Stan Lee's name, Stan Lee's release
from the exclusivity under the Assignment of October 1998 and the Accuser and Drifter character franchises.
Benchmarks agreed by SLC in performance of Asset Purchase Agreement required three "deals in production"
by September 2003 or SLM has right to demand re-conveyance of all assets from SLC by written demand for
re-conveyance at no cost within 30 days from notice. Such benchmarks were never achieved, yet DIP never
exercised re-conveyance rights under Asset Purchase Agreement to recover the assets as provided in the
agreement. WildBrain automatically retained these re-conveyance rights if SLM abandoned them. WildBrain
also had the right to consent to any transfer of these assets, and retained a priority security interest in all assets
sold under the Sale of Assets, which has never been released.
The Accuser and Drifter were transferred to POW by SLC in 2004, then inexplicably transferred again from
SLM to QED in July, 2006, without any notice to the creditors the Court or WildBrain, a month before POW
announced deal with Sprint Mobil, on September 2006, to launch Mobil animation network with the Accuser
and Drifter.

2 Secondary Transfer of Asset: The only other direct transfer of assets attempted by SLM was a secret transfer of the
assets that have now become the subject of the copyright infringement suit brought by Stan Lee and QED and POW. That
transfer was made by the DIP for Stan Lee Media of Delaware on July 31, 2006, for which no Bankruptcy court approval
was apparently obtained. There is no reference to any action on the docket sheet based on date of the Assignment recorded
with copyright office. No notice of this transfer was given to the priority secured creditor DIP lender who retained a
security interest in the assets. The transfer from SLM to QED was executed by DIP representative Kobyashi as "agent" for
SLM, the Delaware Company while she was also Treasurer and CFO for QED's parent. The conflict of interest was never
disclosed either. The other problem with this is that SLM Delaware was merged into SLM Colorado in July, 1999, and its
assets were acquired by SLM of Colorado so it could not on its own transfer clear title all other things being equal.

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POW, which Stan Lee took public in 2004 and QED, a subsidiary of POW, were both formed in Delaware on
November 8, 2001. Such information was never disclosed to creditors.

Order Granting Sale of Assets

On April 9, 2001, the United States Bankruptcy Court entered an order authorizing DIP financing (the “Order
of Financing”). The Order of Financing is attached hereto as Exhibit “K”.
On April 11, 2002, the bankruptcy court approved the Sale of Assets to Stan Lee’s phantom holding company,
SLC, subject to the WildBrain re-conveyance clause and a retained first lien by SLM and WildBrain in all
assets until fully paid along with a right to approve any transfers of assets from SLC. However, SLC secretly
conveyed all rights to Stan Lee’s new public company, POW. The conveyance from SLC to POW violated the
Order Granting Sale of Assets (the “Order Granting Sale of Assets”). A copy of the Order Granting Sale of
Assets is attached hereto as Exhibit “L”. On April 11, 2002, Stan Lee signs a Sale of Assets Agreement with
Stan Lee’s new holding company, SLC. SLC warrants that it is a limited liability company duly formed under
the laws of the State of California. Stan Lee signs the agreement as president of the SLC.

Paragraph 11 of the Sale of Assets states that a security interest is retained by SLM and WildBrain (Exhibit
“M”). This security interest was never released, nor were the re-conveyance rights.

Emergence of SLM from Bankruptcy


In January 2006-a private group backed by Chris Belland, SMASH LLC, offers $100,000 for remaining assets
of the SLM Estate. DIP lawyer Golubchik refuses to submit offer to creditor's committee and refuses to allow
inspection of remaining property so purchasers can confirm value of remaining assets and modify upward its
offer. Immediately thereafter Golubchik and Kobyashi stop communicating with purchaser group's attorney,
bankruptcy counsel Steven Schwaber in Los Angeles. In March, 2006, Golubchik secretly structures a deal with
the creditor-warehouse that housed the remaining property and books and records were suddenly removed.
March, 2006- Marvel attorney notifies James Nesfield, who was soliciting investment in a fund to acquire
WildBrain's DIP loan, to cease and desist from disparaging Marvel's rights to its character properties by
slanderous statements that Marvel defrauded lenders and the estate of SLM with rights assigned by Stan Lee.
Marvel never follows up demands and threats and has remained silent ever since.
November 15, 2006- Shareholders grant 5 million plus voting proxies (of 11,150,000 issued, outstanding and
eligible to vote) to Nesfield President who is thereby appointed interim director and President of SLM to take
all actions necessary and reasonable protect it from malfeasance by DIP Kobayashi and attorney Golubchik
after a motion is filed in bankruptcy October 7, 2006, to authorize destruction of all books, records and
remaining property of the company. Company is revived in Colorado by Nesfield on behalf of shareholders
after DIP allowed it to be dissolved by Secretary of State in Colorado. Shareholder meeting called pursuant to
Bylaws for December 7, 2006.

Shareholder meeting called December 7, 2006. A copy of the resolution passed at the Shareholder’s meeting is
attached hereto as Exhibit “N”.

November 20, 2006-SLM is revived from administrative dissolution in Colorado. Nesfield takes control of
SLM. He has never transferred any assets or the Assignment. Ownership of the Assignment is perfected in
Copyright Recordation on November 28, 2006.

November 28, 2006-SLM records the October 15, 1998 Assignment with the U.S. Copyright Office to perfect
its priority interest in Stan Lee’s co-creator rights to Spider Man, X-Men, etc. SLM obtains a Certificate of
Recordation from the United States Copyright Office for the Assignment and other characters created by Stan
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Lee. (Exhibit “O”).
December 7, 2006- Shareholder's meeting appoints new directors and officers, recapitalizes company with
reverse stock split. Shareholder’s decide to recover and assert all assets and claims. The company ratifies all
actions taken by shareholders and interim officers and directors on behalf of all shareholders.

SLM: Final Bankruptcy Dismissal

In Case No. SV-01-11329-KT, Notice of Non-Opposition to Dismissal of Chapter 11 Bankruptcy Cases, SLM
was dismissed from bankruptcy with the court stating that there are no “assets brought into the estate […] which
may benefit creditors.” (Exhibit “P”). Schedule B-Personal Property in Case No. SV-01-11329-KT, states that
there is an unknown value as to the patents, trademarks, copyrights, licensing rights and other intangibles of
SLM.

E. Stan Lee’s Suit with Marvel

In November 2002, Stan Lee sued Marvel under the November, 1998, Marvel Contract for 10% of profits from
television and movie revenues (the “Marvel Suit”). Estate of SLM in Chapter 11 is not advised of such suit or
that Stan Lee transferred intellectual property rights to Marvel. Marvel never defends against Stan Lee's claims
or refuses the $15 million “secret” settlement based on the obvious defense that the Marvel Contract was void
because of the previous October, 1998 Assignment from Stan Lee to SLM.
In April 2005, Marvel settles the Marvel Suit with Stan Lee for a secret amount, approximately $15,000,000.00.
A day later, Marvel announces a contract with HSBS for $500,000,000.00 secured credit line for Marvel to
produce its own movies. Stan Lee’s character franchises are principal assets used as collateral for the loan from
HSBC to Marvel. Marvel warrants as part of loan agreement that it knows of no claims against collateral.

On January 17, 2005, the United States District Court for the Southern District of Virginia, issued an Opinion in
Stan Lee v. Marcel Enterprises, Inc., and Marvel Characters, Inc. 02 Civ. 8945 (RWS) (the “Opinion”)(Exhibit
“Q”).

F. Deposition of Stan Lee


In a deposition of Stan Lee, dated February 23, 2005, Stan Lee claims that he intended to convey all rights he
owned at the time to SLM (the “Deposition”). A copy of the Deposition is attached hereto as Exhibit “R”. Peter
Paul had a lawyer depose Stan Lee in reference to the Marvel Contract. The Deposition was taken 2 months
before Stan Lee announced his $15 million secret settlement with Marvel.

III. SLM’s Principal Assets as of January 2007

The newly reorganized Stan Lee Media Inc of Colorado was dismissed from bankruptcy in December, 2006,
and presently owns various assets and causes of action, including:

A. The Assignment, dated October 15, 1998, which was never published or
described in SLM’s bankruptcy filings. This includes rights to Stan Lee's name,
signature slogans and Stan Lee Presents. The rights to Stan Lee's name and Stan
Lee Presents are currently being used by Marvel and by Starz Channel of Liberty
Media based on fraudulent transfers out of the Estate.

B. A claim for conversion of Stan Lee's IP rights, owned by SLM. Stan Lee obtained
a settlement of $15 million from Marvel in April, 2005 based on a fraudulently
obtained "secret" contract with Marvel in November, 1998 that attempted to re-
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convey Stan Lee’s IP rights, which Stan Lee previously conveyed to SLM in the
Assignment, dated October, 1998.

C. Claim to all of Stan Lee's co-creator's interests in the principal character


franchises owned by Marvel, including Spider Man and X-Men. Other claims
regarding fraudulent conveyances from the bankruptcy estate from 2001-2006
also exist in which Stan Lee has personal liability.

D. 7th Portal- produced in 22 "webisodes" used on internet and by FOX Kids


channel in South America. Most successful new super hero team to be created by
Stan Lee in 30 years, copyrights and Trademarks owned by SLM challenged by
two writers who let Stan lee read their script in 1995, when SLM went into
Chapter 11. Such suit settled by Stan lee and never defended in court. Paramount
theme parks paid settlement of $500k to these writers for use of 7th Portal as a 3D
ride attraction in five of their theme parks. Such characters and names are owned
by SLM and were excluded from estate inventories and reports.

E. The Accuser and The Drifter. Such characters were produced in 16 "webisodes"
of 3-5 minutes each. The characters were sold under the Sale of Assets
Agreement to SLC. Such assets were then transferred to Stan Lee's new public
company, POW Entertainment in 2005. The assets were then transferred by SLM
to QED in July 2006 and licensed to POW for a deal with Sprint Mobil.

F. Excelsior!, which is a Biography of Stan Lee and published by Simon and


Schuster in 2002. SLM is entitled to 50% of all royalties of the book.

G. DC Comics deal with Stan Lee reinventing all major DC super heroes for a series
of DC comics entitled, “What If Stan Lee created...." Revenues never disclosed to
SLM and may be owned by SLM.

H. Warner Bros. movie contract for Conan the Barbarian to be produced by the
Warchovsky Brothers. A $2 million pay or play option contract with SLM in
October 2000 was never disclosed. Conan rights were "settled" by SLM in
bankruptcy through Arthur Lieberman who was a control party in Conan
originally and refused money that would resolve dispute over Conan purchase by
SLM.

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