Marvel/Sony Confidential Non-Binding Discussion Document ...



Confidential Non-Binding Discussion Document

Summary of Marvel / SPE Spider-Man Discussion

June 8, 2011

Overall:

• We are seeking an equitable and simple solution and a clean delineation and definition of roles and economics.

• SPE will have the freedom and flexibility to produce and market and distribute films. Marvel will cease to receive film license fees or any participation on film related revenues.

• Marvel will have the freedom and flexibility to manage and maximize the merchandise programs. SPE will cease to receive merchandise fees or any participation on merchandise related revenues.

Economics and Terms:

[Discussing impact of audit]

• Upfront: Marvel shall pay SPE $175MM.

• Backend: Marvel shall pay SPE a straight proration up to (and not to exceed) $35MM based on a sliding scale on WWBO of up to $1B on each future initial Spider-Man film release (excludes re-releases). (E.g. WWBO divided by $1B multiplied by $35MM = payment). Specific WWBO language to be discussed in long-form to address potential of in-home viewing during theatrical window and include those revenues in determining WWBO -TBD

• Backend Cap: The backend payments shall be capped at $130MM per 10 year period.

• Marvel Participation: Marvel shall not participate in the Spider-Man film revenues (box office and home video), music, and SPE promotions or co-promotions

• SPE Participation: SPE shall not participate in Spider-Man merchandising and Marvel promotions or co-promotions

Merchandise Approvals and Controls: Marvel shall be autonomous and have full control over the Classic and Film merchandise program. SPE will have a good faith consultation right to review film merchandise.

Film Approvals and Controls -- General: SPE is seeking a relaxation on the current approval and controls and move towards the concept of consultation.

Marvel Proposal: Conceptually the current language would be revised to be more collaborative and proactive and time sensitive. Marvel’s rights would be limited to only departures/deviations from clear and unambiguous guidelines related to core powers, costume elements, origin story and basic setting elements. Marvel is willing to accept that to the extent a Core Element has been depicted: (a) in a prior Spider-Man movie; or (b) in Marvel made-for-television animation in a manner that departs from the Core Elements, then SPE shall be permitted to use such depiction that departs. In addition, to the extent that SPE determines to utilize an alternative version of Spider-Man (e.g., Spider-Man 2099) in a Picture or TV, any departure from the Core Elements that is part of the story of such alternate version in the comic books shall be permitted. Notwithstanding the foregoing, a departure from the Spider-Man Character Traits marked with an asterisk “**” (e.g., he does not use illegal drugs) shall not be permitted.

SPE Proposal: Submission requirements would be removed. Marvel would have consultation rights only. SPE's specific proposal is spelled out below, but as a general matter, SPE would agree that, to the extent that Core Elements are depicted in a film, SPE would not “fundamentally” deviate from the Core Elements listed below as those Core Elements are depicted in any works approved by Marvel at any time (so that anything authorized or approved by Marvel at any time in any films, comic books, handbooks, animated series, web sites, etc would be fair game). If SPE fundamentally deviates from Core Elements, and Marvel puts SPE on notice of the deviation promptly after Marvel is provided with the relevant materials, Marvel’s sole remedy shall be limited to claims for money damages to the Spider-Man brand. Marvel would have no right to obtain injunctive or other equitable relief of any kind for SPE’s allegedly wrongful exploitation of Spider-Man (e.g., an alleged failure to conform to Core Elements). Marvel would not be able to enjoin SPE’s production, distribution, or advertising of Spider-Man Pictures or Television Programs and SPE would not be able to enjoin Marvel’s merchandising activities. For the avoidance of doubt, SPE would retain the right to seek to enjoin Marvel from producing or authorizing a non-SPE film that includes Spider-Man (or any other element(s) of the Licensed Property) and Marvel would retain the right to seek to enjoin SPE from producing a film that includes Marvel IP (e.g., Iron-Man) that is not part of the Licensed Property, but Marvel’s sole remedy for SPE’s exploitation of the Licensed Property in a way that fails to conform to Spider-Man’s Core Elements (powers, costumes, etc.) would be money damages. In no event would Marvel have the right to terminate, cancel, rescind, suspend or otherwise interfere with SPE's continuing exploitation of the rights.

APPROVED CHARACTERS. Clarify that SPE holds exclusive film rights to all characters in the Spider-Man universe. In an effort to avoid ambiguity the parties will agree on a list of Marvel characters that already exist and are in the Spider-Man Universe. "Approved Characters" that are being licensed by Marvel to SPE means all characters appearing on the agreed list plus "New Characters," as described below. The following applies with respect to the depiction of Approved Characters:

• SPE has no creative obligations or limitations, and Marvel has no approval rights, of any kind with respect to character traits, origin story, powers, costume or any other matters with respect to any Approved Character other than Spider-Man (and his alter-ego(s) such as Peter Parker).

• SPE has exclusive motion picture (and live action television) rights with respect to all Approved Characters. Approved Characters cannot appear in any other motion picture produced or authorized by Marvel. For example, SPE has the right to include Spider-Girl, Venom, etc. in its films and Spider-Girl, Venom, etc. cannot appear in non-SPE films.

• If Marvel does not have all rights in an Approved Character (e.g., Spider-Boy, which is a mash-up of Spider-Man and Superboy, which is controlled by DC Comics), then Marvel will grant to SPE whatever rights Marvel has and SPE will have the right to use the character if it gets the necessary rights from the third party (and indemnifies Marvel).

• For the avoidance of doubt, there is no limitation on SPE's right to include in Spider-Man motion pictures new characters created by SPE, including characters with super-human powers and abilities. SPE has the right to create new characters with Spider-Man-like name, powers, and costumes. For example, SPE would have the right to create Spider-Boy and/or Spider-Woman characters that are distinct from the Marvel/DC mash-up character “Spider-Boy” or the Avengers-related Spider-Woman. As provided in Section 11.c the existing agreement, SPE will own all rights in all such SPE-Created Characters, subject to the following: (i) SPE will assign to Marvel all new characters that are first or second degree blood relations of Peter Parker, and (ii) Marvel will have merchandising rights in the SPE-created characters until the expiration of SPE's production rights.

Agreed List of Characters: SPE is in the process of reviewing Marvels’ most recent mark-up to the proposed character list and expects to have additional comments. But as a starting point, the following guidelines would apply:

1. As a general principle, rights to all characters with Spider-Man-like powers, with “Spider” in their name (e.g., Spider-Woman), or with Spider-Man-like costumes (e.g., a spider logo or insignia, webbing, etc.) would be granted exclusively to SPE for Film and Live Action TV. SPE will consider allowing Marvel to exclude from the grant to SPE specified characters that are primarily associated with other parts of the Marvel Universe (e.g., both parties may agree that one or two of the “Spider-Woman” characters are primarily associated with the Avengers), but those characters must be frozen. As a result, during SPE’s Production Term, there won’t be any “Spider” characters in any non-SPE movies or live-action TV shows that are produced or authorized by Marvel.

2. For “Spider” characters that are “mash-ups” or cross-overs with other rights holders (e.g., the “Spider-Boy” character that is a mashup between Spider-Man and Superboy, which is controlled by DC Comics), Marvel would license to SPE Marvel’s share of rights in these characters for Film and Live Action TV. SPE would have the right to exploit these characters if it secures the necessary third party rights (e.g., from DC) and indemnifies Marvel.

3. For “mash-ups” or cross-overs with other rights holders that relate to important Spider-Man Universe villains (e.g., Scavulture relates to The Vulture), Marvel would license to SPE Marvel’s share of rights in these characters for Film and Live Action TV. SPE would have the rights to exploit these characters if it secures the necessary third party rights (e.g., from DC) and indemnifies Marvel.

4. SPE would be granted Film and Live Action TV rights to any character that is a blood relative of Spider-Man, Spider-Man’s alter egos (e.g., Peter Parker, Miguel O’Hara), major protagonists (e.g., Mary Jane), major villains (e.g., The Green Goblin), and major villains alter egos (e.g., Norman Virgil Osborn).

5. Under the existing agreement, SPE gets all characters primarily associated with the Spider-Man Universe except for so-called “traveling characters” that had their own comic book series prior to the execution of the agreement in 1999 (see Section 2.b of the current agreement). So characters such as Silver Sable, which are primarily associated with the Spider-Man Universe and are not really “traveling characters,” should come to SPE, even if they have had limited comic book series of their own.

6. In addition, so-called traveling characters (e.g., Tinkerer) which did not have their own line of comic books prior to 1999 and which appear primarily in Spider-Man comic books, come to SPE even if they appear non-exclusively in other publications (see Section 2.b of the current agreement).

7. SPE’s grant of rights includes characters that are primarily associated with Spider-Man (e.g., Jack-o-Lantern), even if those characters are also associated with or initially appeared in another comic book series.

8. The Amended agreement would clarify that SPE’s grant of rights would include Kingpin (and related characters such as The Rose), and Morbius.

9. SPE gets all the minor characters that are associated with or related to major characters that come to SPE (e.g., henchmen of major villains such as Kingpin).

New Characters: The parties will also agree on a mechanism to capture for SPE any such characters that appear in the future in any works authorized by Marvel. A proposed mechanism is as follows:

With respect to new characters (i.e., characters first appearing after the Amendment Effective Date), the exclusive rights granted to SPE in the Property shall extend to and specifically include all new characters which first appear in: (a) the comic books listed below; and (b) any comic book, television series or other work published, produced or authorized by Marvel or its affiliates which has in its main title “Spider”, “Spider-Man” or “Peter Parker” except for works that have “Spider”, “Spider-Man” or “Peter Parker” and a character not exclusively granted to SPE (a team-up book) as of the amendment effective date (such as Astonishing Spider-Man and Wolverine) in the main title shall not be included in the Property. Notwithstanding the foregoing, the property entitled Immortal Weapons - Bride of the Nine Spiders is not considered part of the Property. In addition, the exclusive rights granted to SPE in the Property shall extend to and specifically include all new characters created by Marvel which either: (a) shoot spider-webs; (b) sticks to walls; (c) have “Spider” in their name or (d) have a costume that is not fundamentally different from an Approved Costume.

Comic Books (collectively “Publications”)

Amazing Spider-Man

Black Cat

Carnage

Deadly Foes of Spider-Man

Friendly Neighborhood Spider-Man

Giant-Size Spider-Man

Lethal Foes of Spider-Man

Marvel Adventures: Spider-Man

Marvel Age Spider-Man

Peter Parker: Spider-Man

Peter Parker: The Spectacular Spider-Man

Sensational Spider-Man

Spectacular Spider-Man

Spider-Man Loves Mary Jane

Spider-Man

Spider-Man/Black Cat

Spider-Man’s Tangled Web

Ultimate Spider-Man

Untold Tales of Spider-Man

Venom

Venom vs. Carnage

Web of Spider-Man

[Spider-Girl]

[Spider-Man 2099]

[Scarlet Spider]

Merchandise:

• Blackouts: All merchandising Blackout/restrictions will be eliminated and replaced with a loose commitment for Marvel to develop and execute a Spider-Man film merchandising program in the time period around the initial release of each Picture.

• Retail: Marvel shall have the sole right to manage the retail relationships for the film merchandise and shall structure programs to benefit the licensees and the film. Marvel and SPE agree that in order to maximize the retail opportunities for the merchandise and the film, the parties need to collaborate and partner when and where appropriate. SPE’s consumer products (or similar) marketing team shall, where appropriate and reasonable, make themselves available for retail meetings upon Marvel’s reasonable request. Marvel’s consumer products team shall, where appropriate and reasonable, make themselves available for retail meetings upon SPE’s reasonable request. Solely for consultation and not approval, SPE and Marvel each agree to regularly and in advance share information related to Marvel’s general retail plans for movie merchandise and general plans for SPE’s movie co-promotions. SPE agrees to regularly and in advance share with Marvel the following information when available: strategy and target lists and general terms (media and marketing support/spends, territories, pack-outs, exclusivity, marketing plans, etc,…). Marvel agrees to regularly and in advance share information related to how/when/where the Spider-Man movie CMF spends are intended to be spent and provide specifics of actual CMF expenditures once spent.

• Access to Materials: SPE shall continue to provide Marvel access to film materials, assets, scripts, marketing materials, clips, sizzles, updates, and the like based on the list and timeline attached to this document. Those materials cannot be included by Marvel or its licensees in merchandise (or in any marketing, advertising or promotional materials) available to the public prior to the dates set forth on attached schedule regarding Public Availability of Assets. Marvel shall create the style guides for use in the Spider-Man merchandising program and SPE shall have the right to consult, but not approve the style guide. If SPE fails to produce assets by the defined timeline, Marvel would have the right to seek damages.

• Line Reviews: Marvel shall provide SPE bi-annual line reviews of the movie license products for SPE’s consultation, but not approval.

Product Categories - Licensing and Co-Promotions:

• 5 Categories:

1. Consumer Electronics:

SPE proposes: shall have the right without restriction to conduct Spider-Man movie marketing and promotional executions in connection with all other Sony businesses. Sony’s right to utilize Spider-Man film assets for Corporate Use would be broadened. SPE is seeking a perpetual right to use Spider-Man in its co-promotions with other Sony businesses with no windows.

Marvel proposes: Sony shall have the right without restriction to conduct Spider-Man movie marketing and promotional executions in connection with Sony Electronics, limited to Sony Electronics and Playstation or other Sony console video game hardware. Marvel shall have the right to license all consumer electronics including those provided in Category A-2 provided each licensed product a) targets children and young adults and b) includes aesthetic elements which target children and young adults, e.g. a laptop with a molded Spider-Man on the cover or DJ style headphones with retro Spider-Man artwork. Marvel agrees to modify the current promotion window for the SPE Consumer Electronics to a period beginning 9 months prior to the release of each picture until 9 months after.

2. SPE Exclusive: SPE shall have exclusive rights to execute co-promotions for the following categories and Marvel shall be prohibited from licensing merchandising or entering into promotions or sponsorship deals (Including Marvel Family co-promotions outside of SPE’s window) in these categories at any time. Current promotional window for the SPE Exclusive categories (12 months prior/7 post) would be modified to a period beginning (SPE proposes this remain 12; Marvel proposes decreasing this to 9) months prior to the release of each picture until (SPE proposes increasing this to 12; Marvel proposes increasing this to 9) months after

• Carbonated Soft Drinks (e.g. Pepsi)

• Quick Serve Restaurants (e.g. McDonalds)

• Airlines (e.g. Virgin)

• Telephone service providers (e.g., Verizon) We need clarify that this does not prohibit Marvel from licensing or structuring content distribution agreements with operators who act as “retailers” or aggregators of the content. [Note: SPE is open to clarifying, need to sort specific language]

• Auto (e.g. Audi) (excluding accessories)

• Gum and Mints

• Branded Sugar Confectionary and Branded Chocolate, e.g. Wrigley’s Starburst and Hershey’s Twizzlers (including but not limited to liquorice, lollipops, hard candy, candy bars, jelly candies, etc.) Marvel shall be permitted to license non-branded confectionary and non-branded chocolate.

• Additional categories previously included on Schedule 7 and listed below as “SPE Exclusive Categories Previously Included on Schedule 7”

Note: Action figure premiums with QSRs would be no more than 5 inches tall and would have no more than 3 points of articulation.

3. Marvel Exclusive: Marvel shall have exclusive rights to structure merchandise licensing deals and promotional deals for all goods previously listed on “Schedule 7” and now listed below as “Marvel Exclusive Categories Previously Included on Schedule 7” as well as “Chocolate Novelty Items.” Marvel can conduct film-related or classic merchandising in these Marvel Exclusive Categories at any time, with no windows or blackouts, and can conduct classic promotions outside of the film release window, but cannot conduct classic promotions during the film release window and cannot conduct film-related promotions at any time. SPE shall not be permitted to seek or enter into promotions for these categories at any time except with Marvel’s consent. If Marvel wishes to pursue an opportunity to structure a promotional overlay with a merchandise licensee in the Marvel Exclusive category within the movie period, Marvel shall alert SPE to the opportunity. If SPE approves of the promotion, SPE would be responsible for negotiating, documenting, and executing the promotion.

4. Windowed: SPE shall have exclusive rights to execute co-promotions for “Windowed Categories” and Marvel shall have exclusive merchandising rights to Windowed Categories but shall be prohibited from licensing merchandising deals during SPE’s Exclusive Window (the period from 9 or 12 months prior to the release of each picture until 9 or 12 months after the release of each picture). Windowed Categories would include:

• All frozen foods not listed as either “Marvel Exclusive” or “SPE Exclusive”

• Bakery Snacks

• CRACKERS

5. Shared: All other categories of goods shall be shared by Marvel and SPE. Marvel can conduct a classic and/or film merchandising license at any time and a classic promotion only outside SPE’s exclusive promotion window around the release of each Picture. Marvel would not have the right to conduct film promotions. SPE can conduct film-related promotions in these categories only during its exclusive promotional window. The current promotion window for the Shared categories would be modified to a period beginning (SPE proposes 12 months; Marvel proposes decreasing this to 9) months prior to the release of each picture until (SPE proposes 12; Marvel proposes 9) months after.

[Note: On a practical basis, SPE may, upon request from Marvel, allow Marvel, on a case-by-case basis, to license merchandise in categories exclusive to SPE if and when SPE has no plans to exploit such categories, but it cannot be a contractual obligation.]

For the avoidance of doubt, internet, mobile or social games / applications will be a “Shared” category. SPE shall have the right to make internet, social, and/or mobile promotional games and applications available at no charge to consumers to promote the Film, limited to the SPE Exclusive Window . Marvel will retain the right to license internet, mobile and social games and applications to be sold as merchandise or on a promotional basis at any time or to be offered on a co-promotional basis outside of SPE’s exclusive window.

Synergy: Marvel and SPE shall endeavor, where appropriate and feasible, to introduce and include the other party to its respective film merchandise licenses and/or film promotion relationships in efforts to allow for promotional overlays for film merchandise licensees and merchandise license overlay for film promotional partners.

SPE Ancillary Merchandising Licenses – SPE Proposal: SPE will continue to have the right to authorize ancillary merchandising licenses in connection with promotions conducted by SPE in any SPE Exclusive Category. SPE will no longer have the right to authorize ancillary merchandising licenses in connection with promotions in the “Shared” category.

Film Reversion: SPE is seeking a longer reversions window beyond what is currently provided for in the agreement.

• Currently: 9 months post film release to pay ”rights extension payment”, 3 years and 9 months post the preceding film release to commence Principal Photography, 5 years and 9 months post the preceding film release to release a new film.

• SPE’s proposal: The “rights extension payment” would be eliminated, along with per-picture advances. SPE seeks to extend the reversion periods as follows: Between films- 5 years post the preceding film release to commence Principal Photography and 7 years post prior film release to release a new film. Between Trilogies- (any set of three films) 8 years post the preceding film release to commence Principal Photography and 10 years post prior film release to release a new film.

• Marvel Proposal: TBD month’s post the preceding film release to commence Principal Photography, TBD months post the preceding film release to release a new film.

Clarify Contract Language: Once there is agreement in principle in the fundamental business points discussed in this Summary, the parties shall discuss clarification of any technical contract language that has been the subject of disputes in the past.

DETAILED PROPOSALS REGARDING FILM APPROVALS/CONTROLS/CREATIVE REQUIREMENTS

NOTE: SPE is willing to entertain modifications to Section 13 that include many of the elements suggested by Marvel in its proposed contract language and is in the process of creating a proposal of specific language for Marvel's consideration. Proposed modifications by SPE will include, without limitation, the following points:

• Marvel’s designated individual will not have access to sets or creative meetings

• Anything not timely objected to by Marvel is deemed approved by Marvel, once and for all, and Marvel cannot later object to that element.

• Period for Marvel to respond is shorter during active pre-production and production

• Clarify there is no obligation for SPE to depict all core Elements in any particular picture.

• With respect to “Spider-Man Character Traits and Origin Story” (listed below) SPE would not be in breach unless it depicts them in a way that fundamentally deviates from the manner in which those elements are described below. With respect to Spider-Man's "Approved Powers,” and Spider-Man’s "Approved Costumes,” SPE proposal is set forth below

• If SPE fundamentally deviates from a Core Element, and Marvel puts SPE on notice of the deviation promptly after Marvel is provided with the relevant materials, SPE would be in breach but Marvel’s sole remedy would be a claim for damages to the Spider-Man brand.

• Marvel’s right to injunctive or other equitable relief of any kind would be eliminated.

Marvel Response: Marvel is willing to accept the notes set forth above with the following caveats: (a) injunctive relief (see comments earlier in draft); (b) SPE’s new “fundamental deviation” standard isn’t agreed; and (c) with respect to any depiction in any work being “fair game” Marvel response (as set forth earlier in the draft) is:

Marvel is willing to accept that to the extent a Core Element has been depicted: (a) in a prior Spider-Man movie; or (b) in Marvel made-for-television animation in a manner that departs from the Core Elements, then SPE shall be permitted to use such depiction that departs. In addition, to the extent that SPE determines to utilize an alternative version of Spider-Man (e.g., Spider-Man 2099) in a Picture or TV, any departure from the Core Elements that is part of the story of such alternate version in the comic books shall be permitted. Notwithstanding the foregoing, a departure from the Spider-Man Character Traits marked with an asterisk “*” (e.g., he does not use illegal drugs) shall not be permitted.

CORE ELEMENTS

Spider-Man Character Traits and Origin Story:

• His full name is Peter Benjamin Parker.

• ** He is a heterosexual male.

• He is Causasian.

• His parents become absent from his life during his childhood.

• From the time his parents become absent, he is raised by his Aunt May and Uncle Ben.

• He is raised in a middle class household in Queens, New York, attends or attended high school in Queens, New York and attends or attended college in New York City, New York.

• He gains his powers during the period while he is attending middle, high school, or college student as a result of being bitten by a spider.

• He designs his first red and blue costume [Note: black costume is a symbiote and is not designed by him].

• ** He does not deliberately torture. He does not deliberately kill humans other than in defense of self or others. [This term does not apply to actions attributable to the black/symbiote suit provided the foregoing activity in undertaken while in the black /symbiote suit]]

• ** He does not use foul language beyond what is permitted in a PG-13 rated film.

• ** He does not smoke tobacco. He does not use illegal drugs. He does not abuse alcohol. [This term does not apply to actions attributable to the black/symbiote suit provided the foregoing activity in undertaken while peter parker is in the black /symbiote suit]

• ** He does not engage in sexual relations before the age of 16 or with anyone below the age of 16.

Note: If SPE depicts a Spider-Man character other than Peter Parker (e.g., Spider-Man 2099), only those traits marked with asterisk ** will apply

Spider-Man Approved Powers:

• Marvel Proposal: When he has his full powers, they consist of any or all of the powers listed on the attached Exhibit 1 and all other powers that Spider-Man is portrayed as having or using (or stated to have or use) in any: (a) in a prior Spider-Man movie; or (b) in Marvel made-for-television animation. In addition, to the extent that SPE determines to utilize an alternative version of Spider-Man (e.g., Spider-Man 2099) in a Picture or TV, any departure from Spider-Man’s powers that is part of the story of such alternate version in the comic books shall be permitted.

• SPE’s proposal: When Spider-Man has his full powers, they consist of the following (“Approved Powers”): (a) all of the powers listed below (“Listed Powers”), (b) all other powers that Spider-Man is portrayed as having or using (or stated to have or use) in any comic book, motion picture, TV show, website or other work produced or authorized by Marvel at any time after the date of this agreement (“New Powers”), and (c) all other powers that are reasonable or logical extensions of the powers authorized under (a) or (b) above (“Logical Extensions”). See clarifying example of logical extensions under “General Notes” below. Except for the Approved Powers (including Listed Powers, New Powers and Logical Extensions), Spider-Man’s physical makeup is that of a normal human being and he does not have any other super-human powers and abilities; therefore SPE cannot depict the Spider-Man character as having super-human powers other than the Approved Powers. The details of SPE's proposal are as follows:

I. Listed Powers:

o Spider-Sense. Spider-Man’s Spider-Sense alerts him to hidden threats and danger. This precognitive ability helps him to act instinctively, avoiding danger and the impact from objects (fists/feet, bullets, moving objects, environmental risks, etc) as well as warning him of disguised enemies. Spider-Man’s Spider-Sense also assists in his accuracy when operating his web-shooters and can act like radar in the darkness or if Spider-Man is blinded. He is also able to detect certain radio frequencies (used for his Spider-tracers). Spider-Sense also warns Spider-Man/Peter Parker of possible danger to or exposure of his secret identity and warns him of danger to those to whom his is emotionally attached (e.g., Aunt May, Mary Jane or Gwen) or to those in his immediate vicinity. It is permissible to depict a visual or audio manifestation of Spider-Man/Peter Parker being warned by his Spider-Sense (e.g., eyes turn green, twitching ears or buzzing sound).

o Super-Human-Strength. Spider-Man has the proportionate strength of a spider. This means he can lift or press 10 tons or more. Spider-Man’s Spider-Strength allows his attacks against foes to be far more damaging than a normal human being.

o Super-Human -Jumping Ability. Spider-Man has the proportionate jumping ability of a spider. This means he can jump vertically 5 stories (approximately 50 feet) and/or horizontally the length of a city block (approximately 264 feet).

o Super-Human-Agility. Spider-Man has superhuman agility. This means he can maneuver his limbs and joints at speeds and angles and with flexibility greater than that of an Olympic level athlete or contortionist and with a faster reaction time than a normal human being. Spider-Man’s Agility gives him the ability to dodge bullets and acrobatically maneuver himself around opponents and dangerous objects.

o Super-Human Speed and Reflexes. He is able to run at superhuman speeds for short distances (e.g., can overtake speeding cars) and has reflexes so fast that he can evade bullets – even from automatic weapons.

o Super-Human-Durability. Spider-Man possesses superhuman durability. Spider-Man can be injured as any other human being, however as a result of his superhuman durability he is able to withstand severe punishment. Injuries which would be fatal or result in broken bones in normal human beings are not fatal and do not break Spider-Man’s bones.

o Super-Human-Metabolic Efficiency and Endurance and Healing Power. Spider-Man possesses superhuman metabolic efficiency and endurance. Spider-Man’s superhuman endurance allows for extended periods of physical and mental exertion. His accelerated metabolism increases his tolerance to toxins, meaning a larger dose is needed to cause the intended effect and he recovers from the effects quickly. Spider-Man is capable of healing injuries faster and more extensively than ordinary humans, but is not invulnerable and can be hurt badly (e.g. a gunshot). Although he is still affected by disease and infection his recovery time is typically shorter than that of an ordinary human. He is even able to overcome what would seem to be permanent diseases, such as blindness or vampirism.

o Super-Human Mutations. Spider-Man is vulnerable to further mutations in which he might take on additional properties of a spider, such as growth of additional arms, development of spinnerets, etc.

o Super-Human-Adherence. Spider-Man is able to stick to walls or ceilings and stick/climb on almost any surface (he cannot cling or stick to frictionless surfaces). His Spider-Adherence allows for him stick to a surface as easily as most people can walk on the ground.

o Super-Human Webbing. Spider-Man possesses organic or artificial web shooters which allow him to shoot strong adhesive webbing. Spider-Man’s webbing allows him to swing from buildings, tie up villains, safely catch falling bystanders and use the fluid in various configurations for props and structures (such as shields, thrown balls, parachutes, trampolines, hang-gliders, etc.). Like a real spider, Spider-Man can feel vibrations in his web lines. He can use webbing between the arms and torso of his costume to glide or soar for long distances (like a hang-glider).

o Super-Human-Balance. Spider-Man has superhuman balance and coordination and can maintain his equilibrium better than an Olympic level gymnast.

o Super-Human-Fighting Skills. Spider-Man combines all of his Core Power’s and Abilities to create a unique superhuman improvisational acrobatic freestyle fighting style that functionally encompasses the usage of his strength, speed, flexibility, wits, intelligence, and his "spider-sense", in order to work his strengths against his opponents' weaknesses

o Improved Vision. When Peter Parker is transformed into Spider-Man, he no longer needs glasses and has 20/20 vision.

o Intelligence. Peter Parker has extremely high intelligence with a significant focus on engineering, math, and the sciences and is also a gifted inventor and photographer. He also demonstrates a strong sense of humor.

o Additional Powers of Symbiote Black Costume. When Spider-Man/Peter Parker is wearing the symbiote black costume all of the foregoing powers are enhanced (e.g., he has greater strength, agility, etc.) and he also has the following additional powers: the ability to instantaneously change from street clothes to black Spider-Man costume and an inexhaustible supply of super-strong organic webbing, etc.

o Additional Powers of Other Alter Egos. If any comic book, motion picture, TV show, website, or other work authorized by Marvel at any time either before or after the date of this agreement depicts Spider-Man as having further super-human powers (in addition to the powers listed above) when Spider-Man is portrayed as having an alter-ego other than Peter Parker (e.g., Miguel O'Hara), then Spider-Man and that alter-ego may be depicted by SPE in a film or television program as having any and all additional powers that such Spider-Man/alter-ego are depicted as having in the relevant Marvel work(s) (e.g., when Spider-Man is Miguel O'Hara, SPE may depict Spider-Man as having any and all additional powers that Spider-Man is depicted as having in Marvel's Spider-Man 2099 comic books).

o Additional Powers of Named Costumes or New Costumes. If any comic book, motion picture, TV show, website, or other work authorized by Marvel at any time either before or after the date of this agreement depicts a Named Costume or New Costume (as defined below) as having further super-human powers (in addition to the powers listed above), then SPE may depict Spider-Man (or his alter-ego) as having the applicable further super-human powers associated with the applicable Named Costume or New Costume, provided that (i) Spider-Man is wearing the applicable Named Costume or New Costume), and (ii) the alter-ego of Spider-Man depicted by SPE as using such additional powers in a Film or Television Program must be the same alter-ego that is depicted as wearing the applicable Named Costume or New Costume in the relevant Marvel-authorized work (e.g., if Spider-Man is depicted in a Film as using additional super-human powers associated with the Spider-Man 2099 Costume, then Spider-Man's alter ego must be Miguel O'Hara).

II. SPE is Under No Obligation to Depict in a Picture All of Spider-Man’s Approved Powers - There is no obligation for SPE to depict all of Spider-Man’s Approved Powers in any particular Picture. SPE shall have the right to depict as many, or as few, of Spider-Man’s Approved Powers in any particular Picture as SPE determines (in its sole discretion).

III. Depiction of Listed Powers and/or New Powers Based on Examples in Marvel-approved Works

SPE would have the right to depict each Listed Power and/or each New Power in any way that does not fundamentally deviate from (i.e., “is in the same general ballpark” as) any depiction of the applicable power(s) in any comic book, motion picture, TV show, website, or other work authorized by Marvel at any time either before or after the date of this agreement. In other words, any manner in which a Listed Power or a New Power is depicted in any work authorized by Marvel at any time would be fair game; and SPE would not be in breach as long as its portrayal of the applicable power does not fundamentally deviate from the portrayal of that power in the Marvel authorized work. For example, if a Marvel-authorized work portrays Spider-Man as being able to (i) use his Spider Sense to sense vibrations or “see” when blinded, or (ii) lift 25 tons (rather than the 10 tons listed above), then SPE may depict these items in its films.

IV. Depiction of Logical Extensions

SPE would have the right to depict Spider-Man as having any power that is a logical extension of one or more Listed Powers or New Powers. For example, if Spider-Man has “Improved Vision,” “Super-Human Speed and Reflexes,” and “Intelligence,” SPE would have the right to depict Peter Parker as being able to speed read as a logical extension of those abilities.

V. SPE is Under No Obligation to Depict Spider-Man’s Approved Powers at Full Strength - SPE shall have the right to depict any of Spider-Man’s Approved Powers in any particular Picture at up to full strength and/or as having any lesser strength as SPE shall determine (in its sole discretion) is appropriate. By way of example only, if one of Spider-Man’s Approved Powers is the ability to lift 10 tons or more, his failure to be able to lift 2 tons (whether due to exhaustion, that his powers have not fully matured, or otherwise) in any particular Picture or part thereof shall not be considered a deviation from Spider-Man’s Approved Powers.

Spider-Man’s Approved Powers Apply to His Alter-Ego as Well - Peter Parker, and other alter egos of Spider-Man, such as Miguel O'Hara, share Spider-Man’s Approved Powers (although they generally hide these powers from the public).

Spider-Man’s Approved Costumes:

• SPE’s proposal: When Spider-Man is in his full costume, it must be one of the following “Approved Costumes”:’

(a) primarily red and blue (or red and black with blue highlights, which was essentially the color scheme in the original 1962 comic book), form-fitting, with a Spider insignia on the front and/or back. [Note: need not conform to the design of any particular past red and blue costume.]

(b) primarily black and gray, form-fitting, with a Spider insignia on the front and/or back (the “symbiote costume”) [Note: need not conform to the design of any particular past black costume.]

(c) any costume that is not fundamentally different from (i.e., is "in the same general ballpark" as) one of the costumes on an agreed list of “Named Costumes” that were used or authorized by Marvel in prior works (below)

, or

(d) any costume that is not fundamentally different from (i.e., is "in the same general ballpark" as) any new costume that Spider-Man is portrayed as wearing in any comic book, motion picture, TV show, website or other work authorized by Marvel at any time after the date of this agreement (each, a "New Costume").

SPE Proposed “Named” Costumes (pictures attached):

• Spider-Man 2099

• Spider-Man 2020

• Commando Spider-Man 2099

• Spider-Man MegaMorph

• The Spider from Exiles

• Millenial Visions (Marvel Universe Appendix)

• Earth X Spider-Man

• Spider-Man Noir

• Wrestling Costume in Amazing Fantasy #15

• Spider-Armor

• Insulated costume / Electro Suit

• The Future Foundation

• Marvel Proposal: As a compromise to close this deal agreed provided:

1) (d) (and the 2nd sentence) is limited to: (a) a prior Spider-Man movie; or (b) in Marvel animation; and

2) the “fundamentally different” standard is not agreed.

Other Issues and Considerations:

1. Talent Likeness and merchandise participation fees would be borne by Marvel. Discuss mechanism for negotiating these deals (SPE initially proposed Marvel negotiate these deals in parallel with SPE negotiating deals to secure talent for films

2. Distinguish Sponsorships (Marvel can enter into w/o limitation or windowing) from co-promotions. SPE Proposal: Marvel would have the same rights with respect to Sponsorship of Live Events as under the existing contract, meaning Marvel would not have the right to structure sponsorships with partners in SPE Exclusive categories. OK to prohibiting SPE Exclusive categories but not with any timing or other restrictions.

3. Remove restrictions on motion comics. [Ok as long as there is no live-action]

4. Section 20a of the current agreement relating to injunctive relief would be revised

5. Section 39 of the current agreement would be deleted

6. The entire agreement would be revised to delete language that is no longer relevant post-deal

7. ADDITIONAL NOTES TBD.

Asset Delivery Timeline

General Note: Assets will be provided “As is” based on the timing described below. Assets (e.g., film synopsis) may continue to evolve after initial delivery.

SPE is willing to consider tying delivery of certain elements to the scheduled release date, but the dates must reflect the reality of production schedules. For example, let’s discuss number of months before release that production is expected to begin on Avengers and when that production will make various elements available to merchandising licensees.

|Item |Format notes |Timing |

|Production Sketches* |Hard copy only |30 days prior to SOP [ but in any event drafts no later than TBD months |

| | |prior to release] |

|Costume designs and illustrations* |Hard copy only |30 days prior to SOP; [but in any event drafts no later than TBD months |

| | |prior to release] |

|Film Synopsis |Hard copy only |SOP; [but in any event draft no later than TBD months prior to release] |

|Shooting script |Hard copy to Marvel with watermark|SOP; [but any event draft no later than TBD months prior to release. |

| |in name of Marvel’s head of |Note, if production has not started, script would be a then-current draft |

| |security; 3rd parties may only |rather than shooting script] |

| |view with SPE permission in Marvel| |

| |secure facility Master toy | |

| |partners and interactive should be| |

| |pre-approved (note: they will not | |

| |get their own watermark; will need| |

| |to be under Marvel’s). | |

|Talent List | |SOP |

|Character Maquettes & Reference* |Hard visuals only |SOP; but in any event drafts no later than TBD months prior to release |

|Talent Restrictions | |Monthly (as available) |

|Press Releases | |Prior to distribution as FYI |

|Exterior/Interior Production Designs |Hard copy only |Day of Shooting or when Director Approves |

|Prop Images & Sketches |Hard copy only |-Day of Shooting or when Director Approves |

|Sales Presentation and Deck | |30 days after SOP; but in any event draft no later than TBD months prior |

| | |to release |

|Logo Treatment | |Non-binding target: 6 mos. After SOP (Target subject to studio/director |

| | |approval) |

|International Logo translations | |8 months after SOP |

|[200] movie stills featuring various key | |TBD Months Prior to Initial Release |

|characters and scenes | | |

|Final trailer / one-sheet | |60 days prior to Release Date |

* For any/all key characters within such Picture including, key villain(s), heroes and Spider-Man.

Limitations on Public Availability of Assets - JOSH is STILL WAITING ON COMMENTS.

|CATEGORY |PRODUCTS DEVELOPED |ON-SHELF DATE |NOTES / COMMENTS |

|Toys/Games |Figures, play sets, role play |60-90 days prior to theatrical release |Varies by retailer |

|Interactive |Video Game |One to two weeks before theatrical |Pre-orders occur 30-60 days prior |

| | |release | |

|Mobile, Social, & Casual |Games, apps, social networks |One month prior to theatrical release |  |

|Online | | | |

|Sporting Goods |balls, gear, outdoor play |No earlier than 3 months prior to |Pool, water, and outdoor could release Feb-March |

| | |theatrical release | |

|Halloween |Costumes, decorations |6 weeks prior to theatrical release |Halloween companies also sell role play |

|Apparel |T's, underwear, pants, shoes |6 weeks prior to release of theatrical |  |

|Accessories |belts, glasses, wallets |6 weeks prior to theatrical release |  |

|Health & Beauty |Shampoo, soap |6 weeks prior to theatrical release |  |

|Food & Beverage |Cereal, packages goods |No earlier than 3 months prior to |  |

| | |theatrical release | |

|Publishing |Comics, novelizations, coloring|6 weeks prior to theatrical release |Pre-order 60-90 days prior |

|Back-to-School |Pencils, notebooks, backpacks |6 weeks prior to theatrical release |  |

|Stationery & Party Goods |Greeting cards, plates, cake |6 weeks prior to theatrical release |  |

| |decorations, balloons | | |

|Domestics/housewares |Towels, bedding |6 weeks prior to theatrical release |  |

|Gift & Novelties |Cups, mugs, key chains |6 weeks prior to theatrical release |  |

SPE Exclusive Categories Previously Included on Schedule 7

ALL BEVERAGES OTHER THAN ASCEPTIC JUICES and milk based beverages (milk, chocolate milk, etc,…)

ALL FROZEN FOODS THAT COULD BE COMPETITIVE WITH QSR PROMOTIONAL DEALS [NOTE: Specific language to be drafted, but would include frozen pizza, frozen hamburgers, frozen tacos, and restaurant-branded frozen foods (e.g., Marie Calendar’s)]

BLANK AUDIO/VIDEO MEDIA

DIP/DIP MIXES - SINGLE SERVING

FOILS & WRAPS

FOOD & TRASH BAGS [Note: Clarify this excludes Tupperware-type food containers and cloth-based lunch bags / lunch boxes]

MEXICAN FOODS / ETHNIC FOODS [NOTE: “Ethnic Foods” is an added clarification to the current contract] [Note: Clarify approach to “Mexican Food” in Mexico]

PASTRY/DOUGHNUTS

PHOTOGRAPHY SUPPLIES [Note: Need to discuss exceptions for camera cases and review in light of Consumer Electronics clause (i.e., camera cases may still be problematic if Sony competes in that segment)

PIZZA – REFRIGERATED

PIZZA PRODUCTS

POPCORN/POPCORN OIL [except Marvel may license non-branded items with unique packaging, e.g. collector tins]

REFRIGERATED DIPS

RICE/POPCORN CAKES

SALTY SNACKS (including but not limited to chips, crisps, snack mixes, trail mix, puffs, pretzels, etc.) [NOTE: examples are clarifications to the existing contract] [Note: Discuss exception for Italian Dolce Preziosi]

SNACK BARS/GRANOLA BARS/POWER AND ENERGY BARS

SNACK NUTS/SEEDS/CORN NUTS

Marvel Exclusive Categories Previously Included on Schedule 7

ALL OTHER BREAKFAST FOOD

ALL OTHER SAUCES

ASEPTIC JUICES

Milk based beverages

BAKED GOODS – REFRIGERATED. [Except on-site retail bakery (non branded)]

BAKING MIXES

BREAKFAST MEATS

CANNED MEAT

CANNED/BOTTLED FRUIT

COLD CEREAL

COOKIES [except for on-site retail bakery (non-branded)]

CREAM CHEESE/CREME CHEESE SPREAD

DESSERT TOPPINGS

DESSERTS – REFRIGERATED

DINNER SAUSAGE

DOUGH/BISCUIT DOUGH – REFRIGERATED

DRY FRUIT SNACKS

DRY PACKAGED DINNERS

ENGLISH MUFFINS

EVAPORATED/CONDENSED MILK

FRANKFURTERS

FRESH BREAD & ROLLS

FROSTING

FROZEN BREAD/FROZEN DOUGH

FROZEN BREAKFAST FOOD

FROZEN COOKIES [except for on-site retail bakery (non-branded)]

FROZEN DESSERTS/TOPPING

FROZEN MEAT

FROZEN PIES

FROZEN POT PIES

GELATIN/PUDDING MIXES

GLAZED FRUIT

HOT CEREAL

ICE CREAM CONES/MIXES

JELLIES/JAMS/HONEY

LUNCHEON MEATS

LUNCHES – REFRIGERATED - Lunchables

MARSHMALLOWS

MEAT PIES

MILK FLAVORING/COCOA MIXES

MUSTARD & KETCHUP

NATURAL CHEESE

PANCAKE MIXES

PASTA – REFRIGERATED

PASTA

PEANUT BUTTER

PICKLES/RELISH/OLIVES

PIES & CAKES (INCLUDING CHEESECAKES)- [Marvel to license, but may not allow licensees to conduct co-promotions relating to the Property or sell licensed goods relating to the property at any restaurant during any Exclusive Co-Promotion Window].

POWDERED MILK

PROCESSED CHEESE

REFRIGERATED ENTREES

REFRIGERATED MEAT/POULTRY PRODUCTS

REFRIGERATED SIDE DISHES

REFRIGERATED TORTILLA/EGGROLL/WONTON WRAP

SOUP

SPREADS – REFRIGERATED

SINGLE SERVING DINNERS

SYRUP/MOLASSES

TEA – INSTANT TEA MIXES

TOASTER PASTRIES/TARTS

YOGURT

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