All evidentiary protections apply for settlement discussion purposes only



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NON-BINDING CONFIDENTIAL SETTLEMENT COMMUNICATION

ALL EVIDENTIARY PROTECTIONS APPLY



FOR SETTLEMENT DISCUSSION PURPOSES ONLY



Process

  • Nothing is binding until long-form is signed

  • No press, general public communications, and/or communications with customers or other third parties until a mutually agreed joint statement and/or communications plan is agreed



Economics, Audits, Hasbro Claim, Arbitration

  • Deal economics are unchanged, all audits, Hasbro Claim, and Arbitration are dropped (i.e., litigation must be stayed) subject to SPE agreeing to either:




    • Grant Marvel the right to license in Consumer Electronics with these constraints

      • Give Sony right of first and last (with 90 days to respond – SPE may need longer, sorting internally)

      • If Sony does not do the deal itself, any license Marvel cuts must:

        • Be within pre-defined categories (SPE needs Marvels input on categories they expect to license. Marvel will want these to be examples. SPE will want this to be the extent of the available categories)

        • Be below a certain price point ($20? TBD price)

        • Be non-branded

        • Targeted at “young kids,” (better define, TBD) not “young adults,” including characteristics such as being character molded

OR

    • SPE to be responsible for getting merch name and likeness rights from talent and SPE to bear any royalties in excess of 5% reducible to 2.5%. likeness (TBD if some other mechanism, but need this solved)




OR


  • Something else to be proposed by SPE (TBD)


New Powers, Costumes, Characters

  • SPE is, after the date of the agreement, entitled to incorporate new Powers, Costumes, Characters from:

    • Animated series

    • Console video games (Marvel looking at their approvals over Activision)

    • Comic books (both printed and motion comics), if used in 6 issues or 2 different story arcs (clarify definition of story arcs)

    • Casual games – subject to some minimum number of units being sold some mechanism for being a “real” game (TBD – multiple versions released or units sold or number of users)


Core Elements

  • Non-Spider-Man characters are not required to conform to anything. Even those that have Spider in their name (e.g., Spidercide clones)


Material vs. Fundamental

  • Powers – SPE cannot materially deviate (Subject to SPE internal discussion)

  • Costumes – Standard is TBD, idea is “material +” or “between material and fundamental” – let’s discuss “the general public would say the costume we’ve created in the film “looks like” Spider-Man”


Powers

  • Listed Powers

    • Spider-Man may mutate

    • Spider-sense is not limited to “immediate vicinity.” It is along the lines of “reasonable proximity,” (e.g., across town is ok. From LA to Tokyo is not ok)”
    • Super-Human Jumping is not limited to 5 stories and 1 city block. Rather, it is “approximately” 5 stories and “approximately 1 city block”


    • Adherence – strike prohibition on his ability to stick to frictionless surfaces

  • “Porting Powers”

    • SPE can, for example, use Spider-Man 2099 powers (if any) that are not “Listed” or “Logical Extensions” if they also use:



Costumes

  • “Color Scheme” – SPE has right to create any costume that is form fitting and primarily red/blue, red/blue/black or black/gray with a spider on front or back

  • Add costumes for other “Approved Alternative Spider-Mans” to approved costume list (e.g., Spider-Man 2211 and Ben Reilly). Clarify “Approved Costumes” or for any way those costumes have been depicted. Not just the pictures SPE attached

  • “Porting” – SPE may use any “Approved Costume” on Peter Parker. But note “porting powers” has restrictions mentioned above


Existing Characters

  • If SPE gets a major character, they will also get the associated characters (henchmen, etc.)

  • The parties will trade a list of characters updated to address the following. There may be other characters to sort as well (TBD)

  • Kingpin – SPE is granted the rights that Marvel is able to grant (subject to Fox Grant; Marvel will rep and warrant to the status of these rights). If Kingpin is not available today but becomes available, SPE get him later. However, if all Daredevil comes back to Marvel, Kingpin is shared

  • Marvel retains (due to rights issues):

    • Ben EurachUrich

    • Baache

    • Ethan Edward / Virtue

    • Golden Horde

    • William


    • World Habitual Offenders

    • Randolph Winston Cheery

    • Dr. Armstrong Smith

  • Marvel also retains:

    • Cloak

    • Dagger

    • Punisher

    • Jigsaw

    • Speedball

    • Phil Sheldon

  • SPE gets:

    • Silver Sable

    • Tinkerer

    • The Rose

    • Morbius and his relations

    • Empire State University

    • The Dentist

    • The Rose

  • Sort

    • All Villains related to Kingpin (Do these come to SPE before Kingpin is available? If so, do they remain exclusive if/when Daredevil comes back to Marvel? And how is the answer impacted by Kingpin related villains being more clearly associated with the Spider-Man Universe?)

  • Jessica Drew is “shared” with constraints (TBD if same approach for Julia Carpenter and Arachne)

    • Marvel cannot portray Jessica with any “Spider” elements. No Spider powers. No “Spider” in her name. Costume is not “Spider-Man-like”

  • Spider-ham, and Spider-Zombie, other TBD “out there” variants, and “What If” characters will be frozen

  • Mash-ups with other Marvel characters outside the Spider-Man Universe and other IP holders (like DC) will be frozen



New Characters

  • New characters created “in the Spider-Man Universe” are SPE’s, whether they are created by Marvel or its affiliates

  • List of comics will be streamlined. No need to list titles with “Spider” for example as they’ll be covered by “rules”
  • A new “rule” will be – if an SPE exclusive character is in the title (and it’s not a team-up with a non-Spider-Man character like Wolverine) – it’s a source of new characters for SPE. This will not include the “What If” comics


  • Anything created by Marvel (whether in the Spider-Man Universe or not) that has any of the following is granted to SPE

    • Shoots webs, or

    • Spider in name,

    • Spider on costume, or

    • Webbing on costume, or

    • Costume is [TBD something between “similar to” or “virtually the same as” -- let’s discuss “the general public would say the costume for the character Marvel created “looks like” Spider-Man”]

  • New characters created by SPE – Leave 11.c as is



Merchandising and Co-Promotions (This section needs to read in conjunction with the window restrictions, which are not explicitly addressed below)


  • SPE Ancillary / Marvel Film Promotions

    • Ancillary merchandise licenses structured by SPE are extensions of a promotional partners’ own products (e.g., if Orville Redenbacher is a promotional partner, an ancillary merchandise license would allow them to make red and blue “Spidey Popcorn”)

    • SPE can negotiate ancillary merch terms with its partners in SPE exclusive and ‘Windowed” categories

    • Film promotions structured by Marvel are overlies to merchandise licensing deals and cannot be structured independent of licensing deals

    • Marvel can negotiate film promotion deals with its partners in Marvel Exclusive and “Shared” categories

    • Each hands the deal to the other to paper and execute, but cannot alter the underlying headline terms (TBD – discuss mechanism to address terms that are not reasonably possible to perform, e.g. walk-on roles)

  • Premiums

    • Rules apply only to Toys, Clothes, Back-to-school. Other than that, SPE is not restricted

    • Rules are:
      • TBD – Along the lines of height and point of articulation restrictions on action figures. SPE’s Ppreference is for “clear rules” rather than price/value/cost constraints


  • Marvel Family Co-Promotions

    • Marvel may conduct (including using Spider-Man as one of the previously agreed minimum number of characters) in SPE’s film window (including in Marvel Exclusive and Shared categories; excluding in SPE Exclusive and Windowed Categories) if the licensee/co-promotion partner also conducts a film promotion (subject to SPE execution) in that the film window. Otherwise, Spider-Man must be pulled from the promotion. (TBD what is a qualifying Film Promotionlanguage to ensure the film promotions are legitimate)

  • Digital Games

    • Marvel may give away a free level under the “freemium” model. But Marvel cannot just give away promotional games (i.e., games or levels that promote anything other than the paid game itself) during the Film Window


Consumer Electronics

  • Marvel clarified it’s position that “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” means:

    • Now windowsBroadened window (greater than 24 months, specific duration TBD)

    • No “deal” needs to be papered between the parties

    • No “call to action” for the film required



Windows

  • SPE Exclusive Categories; Windowed Categories; Shared Categories– 12 months before film / 12 months after film

  • Marvel Exclusive Categories – 9 months before film / 6 months after film



Asset Timeline
  • Add Sizzle Reel to the list. To be provided in time for Licensing Show and Key Toy Shows. Note, if the sizzle reel is shown at a Disney event, SPE needs to present it. General idea is, Disney can’t imply ownership of pictures


  • SPE uses reasonable efforts to provide script/synopsis (and other items normally tied to SOP, TBD) 18 months before film release date, but in no event not more than 15 months before film release date


Injunctive Relief

  • As previously discussed “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”

  • Beyond that, Marvel can seek to enjoin a picture only if SPE’s film materially deviates from the “**” items, which are

    • ** He is a heterosexual Caucasian male.

    • ** 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.

  • To be clear, there are not liquidated damages


Windows between Films

  • The same as today except

    • No rights fee payment

    • If Marvel releases 3 pictures in 8 years, the window is then extended to 7 years for the next film



Live Action TV

  • Leave as it reads in the current agreement


Other

  • SPE will furnish Marvel with “an individual of notable importance” (e.g., the Director or an Actor or a Producer) for 1 meeting per film to meet with licensees

  • The holdback on Villains in the animated series will allow leeway to use a villain in up to 3 episodes per 26 episode season

  • The holdback on Marvel’s ability to release animated series DVD around the home video release of the movies remains in place






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