EXHIBIT 1

EXHIBIT 1 TO PLAINTIFFS' REPLY MEMORANDUM

UNDISPUTED FACTS EVIDENTIARY SUPPORT DEF. RESPONSE

QED is registered owner of an item of l. Exhibits 1 1 & 13,U.S. Copyright Not controverted by declaration
l.
original artwork related to The Accuser Records; or other written evidence
Heronimus Dec. 15
QED is the registered owner of all right, 2. Exhibits 12 & 13,U.S. Copyright Not controverted by declaration
2.
. title,interest and copyright in certain Records; Heronimus Dec. 15 or other written evidence
animated webisodes of The Accuser
QED is the registered owner of all right, 3. Exhibit 11, U.S. Copyright Record; Not controverted by declaration
3.
title,interest and copyright in certain Heronimus Dec. 15 or other written evidence
animated webisodes of The Drifter
QED is the registered owner of an item 4. Exhibits 11 & 14,U.S. Copyright Not controverted by declaration
4.
of original artwork related to The Records; Heronimus Dec. 15 or other written evidence
Drifter

QED is the registered owner of all right, 5. Exhibit 15,U.S. Copyright Record; Not controverted by declaration
5.
title,interest and copyright in certain Heronimus Dec. 15 or other written evidence
animated webisodes of Stan's Evil
Clone

POW! is the registered owner of the 6. Exhibit 16,U.S.P.T.O. Record; Not controverted by declaration
6.
trademark STAN LEE PRESENTS Heronimus Dec. 15 or other written evidence

POW! is the registered owner of the 7. Exhibit 17,U.S.P.T.O. Record; Not controverted by declaration
7.
trademark EXCELSIOR! Heronimus Dec. 15 or other written evidence

Stan Lee Media, Inc. ("SLMI"), 8. SAC 124 Not controverted by declaration
8.
formerly known as Stan Lee or other written evidence

EXHIBIT
1
.
 Entertainment,Inc. ("SLE"),was an
internet-based production and
marketing company co-founded by
Peter Paul and Stan Lee.
There is a purported agreement between 9.
9.
Stan Lee Entertainment,Inc. and Stan
Lee with a printed date of October 15,
1998 and a handwritten date of October
20,1998 (Plaintiffs makes this
statement for the fact of the existence of
the document,and do not contend it is
valid or enforceable).
10
Toward the end of 2000,SLMI failed to
pay Lee any salary,failed to pay for his
life insurance,and failed to pay other
benefits that were to be paid to Lee
pursuant to the SLE Agreement.
Exhibit 9 Opp. Defendants dispute its
interpretation,whether it was
terminated,and whether it is
void,but they are complete
strangers to the agreement.
Additionally,Opp. Defendants
do not present any evidence in
the form of a declaration or other
written evidence to support their
contention.
10. SAC �� 45 - 46; Not controverted by declaration
Exhibit 19,Lee Dec. � 2; Exhibit 10, or other written evidence
Lieberman letter

11
As such,on or about January 1,2001, 11. Exhibit 19,Lee Dec. � 2; Exhibit 10, Not controverted by declaration
Stan Lee,through his counsel, tendered Lieberman letter or other written evidence
a letter to SLMI terminating the SLE
Agreement because of these material
breaches as described in # 10 above.

Because of the material breaches,all
12
Property and Rights described in the
Employment Agreement with SLMI are
12. Exhibit 9,Employment Not controverted by declaration
AgreementlRights Assignment or other written evidence
2
 Stan Lee's.
On February 16, 2001, SLMI filed a 13. Exhibits 1 & 2, Bankruptcy Petitions; Not controverted by declaration
13.
Chapter 11 bankruptcy petition in the Heronimus Dec. "Il 2 or other written evidence
Central District of Califomia, Case No.
SVOI-I I329KL, jointly administered
with Case No. SVOI-II331KL,
(hereinafter the "Bankruptcy Case").
In November 2001, SLMI entered into 14. Exhibit 6, Asset Purchase Agreement; Not controverted by declaration
14.
an agreement ("Asset Purchase Exhibit 20, Kobayashi Dec. "Il 4 or other written evidence
Agreement") to transfer certain assets
of SLMI to a company controlled by
Stan Lee.
The Asset Purchase Agreement 15. Exhibit 6, Asset Purchase Agreement Not controverted by declaration
15.
approved by the Bankruptcy Court or other written evidence
refers to the transferee company as "a
California limited liability company to
be formed and controlled by Stan Lee."
The Asset Purchase Agreement 16. Exhibit 6, Asset Purchase Agreement Not controverted by declaration .
16.
addressed certain of the assets at issue or other written evidence
in this case, including The Accuser, The
Drifter, Stan's Evil Clone, STAN LEE
PRESENTS,STAN LEE'S
SOAPBOX, and Stan Lee & Design.

3
 The November 27, 2001 Motion for 17. Exhibit 3, Motion to Approve Sale of Not controverted by declaration
17.
Order to Approve the Sale of Assets Assets; or other written evidence
Free and Clear of Liens specifically Heronimus Dec. � 2
represented to the Court, Stan Lee's
personal involvement in the assets at
issue in this Action was needed to
obtain the highest and best use for the
assets.
SLMI's Motion to Approve the Sale of 18. Exhibit 3, Motion to Approve Sale of Not controverted by declaration
18.
Assets stated the following: Assets; or other written evidence
Heronimus Dec. � 2
a. "[I]n order to exploit the Creative
Assets and generate funds for the
estates,it is crucial that Stan Lee be a
12art of such eX12loitation. The Debtors
believe that the Creative Assets have
minimal or no value without Stan Lee's
involvement." Motion, p. 3, 11. 7-
11(emphasis added).

b. "Pursuant to the Agreement,the Not controverted by declaration

parties agreed that the Debtors will sell or other written evidence
the Creative Assets to the Purchaser,an
entity creatively controlled by Stan
Lee." Motion,p. 3,11. 16-24 (emphasis
added).

- - -- ------

4
c. "The Debtors believe that the Not controverted by declaration
Agreement is in the best interest of the or other written evidence
estates in that the Agreement will result
in creating value out of the Creative
Assets, which value,the Debtors
believe, can only be created with the
direct involvement of Stan Lee."
Motion, p. 3, I. 27 - p. 4, I. 5.
Not controverted by declaration
d. "[T ]hrough discussions with such
or other written evidence
third parties,it was clear that . . . any
sale transaction must involve Stan Lee,
personally, and his creative abilities."
Motion,p. 10,I. 22 - p. 11,I.
2(emphasis added).

e. " [I ]t is likely that Stan Lee's

personal services employment Not controverted by declaration
agreement is not one which can be or other written evidence
assumed and assigned over Mr. Lee's
objection [. ]" Motion,p. 11, II. 10-12.

f. "After it was clear that the

Debtors would not be able to Not controverted by declaration
consummate a transaction with third or other written evidence
parties in that the Debtors had no ability
to monetize their productions, Stan Lee
5
contacted the Debtors to advise them
that Stan Lee would be interested in
trying to exploit and monetize the
Debtors' assets." Motion,p. l l , II. 22-26
(emphasis added).
g. "Based on the Debtors'
unsuccessful marketing efforts and the
Not controverted by declaration
importance of Stan Lee's personal
or other written evidence
involvement in the productions,it was
evident that the highest and best use for
the estates' assets would be through the
exploitation of such assets by Stan
Lee." Motion,p. 1 2,11. 2-7 (emphasis
added).
h. "Accordingly,the Debtors
engaged in negotiations with Stan Lee,
who was represented by independent
counsel,regarding the development and Not controverted by declaration
exploitation of the Creative Assets. The or other written evidence
Creditors' Committee was also
involved in such negotiations and
assisted the Debtors in obtaining a
result which is much more favorable for
the estate than originally proposed by
Stan Lee." Motion,p. 1 2,11. 7- 1 3
(emphasis added).

6
 1. "From the outset of the Debtors' Not controverted by declaration
marketing efforts,it was abundantly or other written evidence
clear that without the active
involvement of Stan Lee, the Debtors
will not be able to exploit the value of
the Creative Assets or generate a
return." Motion,p. 21, ll. 5-9
(emphasis added).
Not controverted by declaration
J. "[Wlithout the involvement of
or other written evidence
Stan Lee,the Debtors believe that the
Creative Assets have virtually no
value." Motion, p. 29, 11. 13-15
(emphasis added).

At the hearing on the Motion to 19. Exhibit 4, Transcript of Proceedings Not controverted by declaration
19
Approve the Sale of Assets,Counsel for re Motion to Approve Sale of Assets; or other written evidence
the Creditors' Committee stated the Heronimus Dec. , 4
following:
a. "because this transaction is with
Stan Lee" Transcript of Proceeding re: Not controverted by declaration
Motion to Approve Sale of Assets, p. 4, or other written evidence
1. 5;

b. "I don't think these assets really Not controverted by declaration

could have been exploited by the or other written evidence
company without Mr. Lee's cooperation
and involvement[.]" Transcript of
7
Proceeding re: Motion to Approve Sale
of Assets, p. 4, 11. 11-13;
c. "[W]e've built in incentives for Not controverted by declaration
Mr. Lee to go out and exploit [the
or other written evidence
assets ] and we will hopefully get a fair
return on them." Transcript of
Proceeding re: Motion to Approve Sale
of Assets,p. 4, 11. 15 - 17 (emphasis
added);
Not controverted by declaration
d. "[W]e think at the end of the day
or other written evidence
both the agreement with Stan Lee and
the agreement with Wild Brain are
reasonable and in the interest of the
estate." Transcript of Proceeding re:
Motion to Approve Sale of Assets,p. 4,
II. 23-25 - p. 5, I. 1 (emphasis added);
e. "At some point under this Not controverted by declaration
agreement, Mr. Lee, the purchaser, or other written evidence
which will actually be through another
entity forming,will not have to
continue sharing with the estate."
Transcript of Proceeding re: Motion to
Approve Sale of Assets,p. 5, 11. 20-23
(emphasis added);

8
 The critical factor in the transfer
20
approved by the Bankruptcy COUlt in
SLMI's Bankruptcy Case was Stan
Lee's personal and direct involvement
in the development of the assets.
The Asset Purchase Agreement was
21
approved by Order of the Bankruptcy
Court on April 11, 2002.
QED was formed and controlled by
22
Stan Lee.
POW! and Stan Lee own his name,
23
likeness, signature, persona and certain
trademarks.
SLMI assigned the titles and rights to
24
copyrights of The Drifter, The Accuser
and Stan's Evil Clone to QED.
Stan Lee chose to change the entity
25
name from "SLC, LLC" to "QED" so
that the new entity would not be
associated with SLML
LlTiGATlON/056380 100211 566420.1
20. Exhibits 3, Motion to Approve Sale
of Assets; 4, Transcript of
Proceedings re Motion to Approve
Sale of Assets; & 5, Order Granting
Motion to Approve Sale of Assets
2l. Exhibit 5, Order Granting Motion to
Approve Sale of Assets;
Heronimus Dec. � 2
22. Exhibit 8, Cert of Fonnation
23. Exhibits 6, Asset Purchase
Agreement and 18, Membership
Purchase and Employment
Agreement
24. Exhibits 7, Assignment of Copyright;
& 1 1 - 15, U.S. Copyright Records
25. Exhibit 19, Lee Dec �6
9
Not controverted by declaration
or other written evidence
Not controverted by declaration
or other written evidence
Not controverted by declaration
or other written evidence
Not controverted by declaration
or other written evidence
Not controverted by declaration
or other written evidence
Not controverted by declaration
or other written evidence
EXHIBIT 2
1 MCGUIRE WOODS LLP
DAVIDB. VAN ETTEN #119049
2 LESLIE M. WERLIN #67294
1800 Century Park East, 8 Floor
�
3 Los AngeleS California 90067
Telephone: 310) 315-8200
4 Facsllnile:'()flO) 315-8210
DVanetten@.mclnlirewoods.com
5 L_WerJm@mcl:mrrewoods.com

6 SHERMAN & HOWARD, L.L.C.

Mark W. Williams (appearing Pro Hac Vice)
7 Marcy M. Heronimus (appearing Pro Hac nee)
633 Seventeenth Street, Suite 3000
8 Denver, CO 80202
MWilliam;(@�he rmanhoward.com
9 I Mtteronlmus(a),shennanhoward.com

10 Attorneys for Plaintiffs

11 UNITED STATES DISTRICT COURT

12 CENTRAL DISTRICT OF CALIFORNIA

13 QED Productions LLC, et al. CASE NO. 07-CV-00225-SVW (SSx)

14 Plaintiffs, The Hon. Stephen V. Wilson

Dept. 6
15 vs.
DECLARATION OF DAVID B.
16 James Nesfield et al. GOLUBCHIK

17 Defendants.
Date: January 5, 2009
18 Time: 1:30 pm
Ctroom: 6
19

20

21

22

23

24

25

26

27

28

EXHIBIT
DECLARATION OF DAVID B. GOLUBCHIK
CASE NO. 07-CV-OO225-SVW (SSx) 2
1 DECLARATION OF DAVID B. GOLUBCIDK

2 I, DavidB. Golubchik, declare:

3 1. I am an attorney at law, specializing in bankruptcy law, and am a partner

4 in the law firm Levene, Neale, Bender, Rankin & Brill L.L.P. in Los Angeles,

5 California. The facts set forth herein are based on my personal knowledge.

6 2. Levene, Neale,Bender, Rankin &Brill L.L.P. represented debtor Stan

7 Lee Media, Inc., a Colorado corporation ("SLMI") in the bankruptcy proceeding in

8 the Central District of California, Case No. SV-01-11329-KL,jointly administered

9 with Case No. SV-01-11331-KL ("theBankruptcy Case"). I was one of the attorneys

10 principally responsible for representing SLMI in the Bankruptcy Case.

11 3. On or about November 19,2001, SLMI entered into an Asset Purchase

12 Agreement whereby certain SLMI assets were to be transferred to a company that

13 would utilize the active involvement of Stan Lee in order to exploit the value of the

14 Stan Lee created assets being transferred ("the Asset Purchase Agreement").

15 4. On November 27,2001 Levene, Neale,Bender, Rankin &Brill L.L.P

16 filed on behalf of SLMI a Motion for Order to Approve Sale of Assets Free and Clear

17 of Liens. The purpose of this motion was to obtain Court approval for the sale by

18 SLMI of certain creative assets, including the properties and characters known as The
19 Accuser, The Drifter and Stan's Evil Clone, which are the subject of the Complaint in
20 this case.

21 5. The primary focus of the transfer was that Stan Lee be involved. In fact,

22 as we stated in the Motion, "[I]n order to exploit the Creative Assets and generate

23 funds for the estates,it is crucial that Stan Lee be a part of such exploitation. The

24 Debtors believe that the Creative Assets have minimal or no value without Stan Lee's

25 involvement." The paramount factor was that the transferee entity be creatively

26 controlled by Stan Lee.

27 6. As we further stated in the Motion, "The Debtors believe that the

28 Agreement is in the best interest of the estates and that the Agreement will result in

2
DECLARATION OF DAVID B. GOLUBCHIK
r '" c:!'C MA 1)7 ro" nn..,.,.c; c:!"U1 (QC'v)
1 creating value out of the Creative Assets, which value, the Debtors believe, can only

2 be created with the direct involvement of Stan Lee." Thus, any sale transaction must

3 have involved Stan Lee personally as without the involvement of Stan Lee, the

4 Debtors believed that the Creative Assets had no value.

5 7. I believe that the primary factor in the transfer was Stan Lee. In my

6 opinion, the name of the entity acquiring the properties was not important to the

7 debtors or the creditors.

8 8. I believe that it was of no import that SLC, LLC (the company originally

9 referred to in the Asset Purchase Agreement) did not acquire the Creative Assets, but

10 rather QED did. From the bankruptcy estate's perspective, the primary factor was

11 that Stan Lee controlled the entity and was involved with the exploitation of the

12 properties.

13 I declare under penalty of peIjury under the laws of the United States of

14 America that the foregoing is true and correct. Executed this 1 th day of December,

15 2008.

16

17

18

19

20

21

22

23

24

25

26

27

28

3
DECLARATION OF DAVID B. GOLUBCIDK
,.. It ct:: M('\ "7 ("''' n".,.,,, C"'lT I<.!<.!v'
EXHIBIT 3
 1 DECLARATION OF GILL CHAMPION

2 I,

3 1. I am a shareholder of Stan Lee Media, Inc., a Colorado corporation

4 (" SLMI" ) , and am asserting certain derivative claims in this case on behalf of SLMI

5 shareholders. According to a shareholder list of SLMI dated January 5,

6 55,000

7 matters set forth in this Declaration and,

8 testify competently thereto under oath.

9 2. I worked for SLMI until sometime in mid-2001 . Subsequently,

10 working for another company formed to develop and exploit other Stan Lee-created

11 properties,

12 Operating Officer of POW!

. 13 3. Sometime after SLMI had filed a Chapter 11 bankruptcy proceeding in

14 early 2001 , I was informed that some creditors of SLMI approached Stan Lee and

15 asked if Mr. Lee would take over some of the SLMI projects then in existence

16 because SLMI could not develop the projects without Stan Lee,

17 projects required further development.

18 4. As of N ovember200 1 ,

19 Membership Purchase and Employ ment Agreement,

20 between POW! and Stan Lee for Mr. Lee to be employed by POW! and its

21 subsidiaries,

22 interest Stan Lee may have or control in ideas,

23 logos,

24 and likeness. A true and correct copy of this agreement is attached· as Exhibit "3"

25 hereto ("the Lee-POW! Employment Agreement").

26 5. QED is a limited purpose company which has been used for the sole

27 purpose of exploiting assets obtained from SLMI pursuant to the Asset Purchase

28 Agreement approved by the court in the Bankruptcy Case. Paragraph 4(b) of the
�-....-"
..
K;\3903-]\PlE\OPPOSTlON TO MOT SUMM JUDG 082901.wpd 30
OPPOSITION TO MSJ EXHIBIT
3
 1 Lee-POW! Employment Agreement attached as Exhibit "3 " hereto specifically

2 indicates that QED was formed to receive intellectual property from Stan Lee

3 M edia.

4 6. Shortly after we were informed that the Court in the Bankruptcy Case

5 approved the Asset Purchase Agreement and the Properties were turned over from

6 SLMI to QED, QED actively began attempting to develop and exploit many of the

7 assets. This effort began in 2002. Among other things, Stan Lee and I met with

8 writers and artists, pitched properties to numerous networks, production partners and

9 distribution outlets and sought to find interest in exploitation of the Properties.

10 These efforts continued from 2002 after the approval in the Bankruptcy Case was

11 obtained t o the time this lawsuit was fli ed.

12 approval, we focused on developing the Properties and did not focus on the fact that

13 the Asset Purchase Agreement listed a transferee name of"SLC, LLC" instead of

14 QED. The most important issue to me was to develop the Properties.

15 7. POW! had a first look agreement with MGM during the period October

16 1,2001 through September 20,2002. After QED obtained the Properties, some of

17 the projects obtained by QED were submitted to MGM for its review in connection

18 with potential development. MGM ultimately determined not to exploit the

19 Properties.

20 8. There were various discussions with a company called Hollywood

21 Licensing to develop certain of the Properties, including The Accuser and The

22 Drifter, beginning in February 2003. Attached as Exhibit "4" hereto is a true and

23 correct copy of an agreement between QED and Hollywood Licensing for

24 Hollywood Licensing to represent QED as a non-exclusive representative in

25 connection with the licensing and merchandising of The Accuser and The Drifter.

26 Hollywood Licensing was ultimately unable to enter into any licensing or

27 merchandising agreements for these Properties.

28 9. Beginning in approximately October 2004, I engaged in various

K.:\390J-3\PlE\OPPOSTION TO MOT SUMM JUDdo82907.wpd 31

OPPOSITION TO MSJ
 1 discussions with Connie Wong, the CEO ofVidiator Technology, and ultimately

2 agreed on or about December 21,2004 to provide The Drifter and The Accuser
3 products as mobile phone clips and other mobile phone applications.

4 10. In addition, beginning in 2002, Stan Lee and I and others at QED under

5 my direction met with writers, pitched to networks and studios, and engaged in other

6 efforts to seek potential development of the intellectual properties obtained by QED

7 from SLMI. The following list reflects some of these meetings and efforts to

8 develop these projects.

9 A. The Drifter - Met with the following writers or writer

10 representatives: Kevin Arkadie, Mark Banker, Matt Cirulnick,

11 Lewis Collick, Ben Edlund, David Furry , Mazk Isreal, Meerson

12 & Krikes, Ed Neumeir, Rob Schrab, David Tynan.

13 Pitched to: FBC-pass, UPN -pass, WPN -pass, SCI-Fl-pass,

14 SHOWTIME-pass, TBS-pass, TNT-pass, USA-pass, FX-pass,

15 TRIBUNE-pass.

16 B. The Accuser - Met with the following writers or writer

17 representatives: Les Bohm, Matt Cirulnick, Lewis Collick, Ben

18 Furry, Mark Isreal, Darren Lamke, Meerson & Krikes, Ed

19 N eumeir, David Ty nan, DanVeber.

20 Pitched to: UPN -possible, WPN-possible, SCI-FI-possible,

21 SHOWTIME-pass, TBS-pass, TNT-possible, USA-possible, FX­

22 possible, TRIBUNE-pass.

23 Met with the following Studios: MGM-pass, FOX-pass,

24 DISN EY-pass.

25 e. Police Force 2020 - Met with the following Studios: MGM­

26 pass, FOX-pass, DISNEY-pass.

27 D. Battle School Tranquility - We pursued discussions with Disney

28 through July 12,2002, but an agreement could not be reached.

K:\390J-3\PLBOPPOSTION TO MoT SUMM JUDG 082907.wpd 32

OPPOSITION TO MSJ
 1 E. Cougar - Discussions with Scott Zakarian and Peter Jaysen of

2 C reative Light Entertainment, LLC until December 15 ,2003,

3 when a short-form co-production agreement to produce a full­

4 length feature film was reached. An agreement for financing,

5 however, could not be reached. Other possible deals were

.

6 discussed in February 2005 with John Petrovitch of NIC

7 Entertainment for an animated direct-to-DVD project which was

8 not produced, and in June 2005 with Lewis Chesler of

9 CheslerlPerimutter Productions, but the funding could not be

10 secured.

11 F. Diabella - Sony developed the project beginning in the spring of

12 2002 as a television project, and two different writers were hired.

13 Two drafts of scripts were written, with meetings relating to each

14 draft. After spending considerable funds, Sony eventually

15 passed in 2006 or 2007.

16 G. I-Werewolf Discussions with MGM with no successful

-

17 conclusion.

18 H. Microman � Pitched to: FBC-pass, NBC-pass, UPN -pass, WPN­

19 pass, SCI-FI-pass, SHOWTIME-pass, TBS-pass, TNT-pass,

20 USA-pass, TRIBUNE-pass.

21 11. In August 2005 , The Drifter and The Accuser were presented to David

22 Ozer, Executive Vice President, Television ofIDT Entertainment, in connection

23 with potential development. IDT passed on these projects.

24 12. QED experienced significant difficulty in pitching and exploiting the

25 SLMI intellectual properties for various reasons. These .included the negative

26 publicity associated with SLMI's bankruptcy case and from its association with Peter

27 Paul who "had fled to Brazil, the fact that the "internet bubble had burst," and the fact

28 that many of the Properties had already been distributed on the internet by SLMI.

c' K,IJ90J·JlPlEIOPPOSTlON TO MOT SUMM lUDG082907.wpd 33

OPPOSITION TO MSJ
 1 1:). Duting2002jhr0l\gh the present time, I estirmltethatTspent
2 apptQx:ilh�<:ilY jO,2P%ofjnyoveralJ work time (approx;ima!ely20o"JaohoUJ's,o;f
3tiiP.efu:@1�lYHnp4Ql),eegnvetSlltions, developing pitches for<:ilw@t!';]:s, IT\eefu.lgs
4 ,��tite)i,S, meetit):gIiwjj;j1 $t!,t(jjQ� lilldnegot,iatingincolll):el1tj:Qt1 With tlw
s 4eY�lqpm�:p,tdftiieJ'ltbpettie$ QPtainedqy QED from SLM[. HQ�ever; (iJ;iriI'lf!i
6p0t#Ops�jjj,%00§, tliY!JWQjtV@<idJ'Ori The Drifter anciThe A¢i!Jf.�e!·W?s

'7 ,ap'pt()�!lJetI25% Q:fIfllitiI).1e.

;8 " 14. 1 irilttietiiiW-i,ite 6f'any objection inadeby Rl1;yone'ihvQlYl;tlWi1;b. t�
9 ,���(tPte-y Gase.sr ·atty:ene,else te the. assigill:i:\.elitt(),·()td�veMlPrn:e:nto:ftl:r�
:to ,�(ijp�iJ.'el(:by �ED,prmto the allegations being hladebyDefeiidmtsin'c0ruw�#oo,
.t� ' witlLtl'itl! .�,�on,
!t� ,1$1 i{pmic;ontfuued,atllattempt,to develop.and'expll§lU:tli�Irl'(:l:pe.tti.es'4'M'th.e,
'll ib�IteJiit�Qff$LMX ::miI SU4.!'l; lilr'l1ditotsaud,sila1'eh01ders, untittl£lsJawSliit-cwas,;;ffie'd..
14.' • l�\T�;'bf!ilP d¢�iY!:lti:v:e.c1itims intbiseaseand am s¢eIda$to�t\teet .
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1$" l;li..¢mr.�ttl�f$.)[f."S'��,�.lIr�Qtd��,s·bC!lqau.s", the·Def<mda,n,t$'illlC':w.ron�:tse¢kinJ?i
'til ';��'"@'g�tfu!��l1'te��:);E@.$fe;; i:1!.il.t �11partie� ass0Qiatpdw{th SJ.,W"l; ll'��y

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1 13 . During2002 tlrrough the present time, I estimate that I spent

2 approximately10-20% of my overall work time (approximately200 -300 hours of

3 time annually) in phone conversations, developing pitches for characters, meetings

4 with writers, meetings with studios and negotiating in connection with the

5 development of the Properties obtained by QED from SLMI. However, during

6 portions of2005 , my involvement on The Drifter and The Accuser was

7 approximately25% of my time.

8 14. I am not aware of any objection made by anyone involved with the

9 SLMI Bankruptcy Case or anyone else to the assignment to or development of the

10 Properties by QED, prior to the allegations being made by Defendants in connection

11 with this litigation.

12 IS. QED continued its attempt to develop and exploit the Properties for the

13 benefit of SLMI and SLMI's creditors and shareholders until this lawsuit was filed.

14 16 . I have brought derivative claims in this case and am seeking to protect

15 the interests of SLMI's shareholders because the Defendants are wrongfully seeking

16 to undermine the asset transfer that all parties associated with SLMI's Bankruptcy

17 Case intended and approved.

18 I declare under penalty of perjury under the laws of the State of California

19 and the United States of America that the foregoing is true and correct.

20 Executed on this _ day of September, 2007, at Los An ge les , California.

21

22

23
GILL CHAMPION
24

25

26

27

28

K,\3903·3\PLElOPPOSTION TO MOT SUMM JOOO 082907.wpd 35

OPPOSITION TO MSJ
 M£MIIf;RSIJ/P PURCHASE AND E:11PL01'11lENT AGRE/:",l/ENT, made as of the
day of November, 2001, by and between, Stan Lee, an individual w ith an address at
c:-:--:-::-:-' CA ("Stan Lee") and POW! Entertainment LLC, a Delaware Limited
Liability Company with an address at ("POW!")

INTI/OOUCTlO,\,. Stan Lee has caused POW! to be fonued to: enter an agreement
with MGM relating to the development of ideas and other intellectual property created by
and/or under the supervision of Stan Lee, and to develop and capitalize on such
intellectual property. Stan Lee wishes to be employed by POW' and to agree upon the
tenus of his being so employed, and the ' tenus under which Gil Champion ("Champion")
and Arthur Liebemlan ("Liebemlan") will provide services to POW' in connection with
the development and capitalization of such intellectual property.

I. IYITIAL OlVAH/SHIP. The initial ownership of POW! is as follows.

(a) In consideration, for Stan Lee's agreement to be employed by POW! as

provided in §2 below, and the assignment of income provided in §4 below,
Stan Lee will receive 5, 100,000 Units of Membership Interest, all of
which will be inunediately vested.

(b) In co nsi deratio n for Champion's a greemen l lo be employed by POW! on a

ttlll lime basis pursuant to a to be agreed upon employment agreement,
Champion will receive 750,000 Units of Membership Interes!' of which
250;000 will be deemed initially vested, and an additional, 250,000 will be
vesl al lhe end of each year so that all Units will be vested at the end of
two years.

(c) In consjderation for Liebemlan's agreemenl to provide POW!, on a part

time b�sis. those non:-legal services provided in a to be agreed upon.
employment agreement, Liebennan will receive 2,900.000 Units of
Membership Interest, of which 2,000,000 will be deemed initially vested,
and an additional 900,000 will be vest ,at the end of the first year.

(d) The Uuvested Units issued to Champion and Liebenuan will be forfeited
to POW! if Champion or Liebemlan cease providing the services provided
in. their respeclive agreements with POW!. However, until any such
divestiture, they shan be entitled to receive all income and exercise all
rights as Members with 'respect to such Units.

(e) An additional. 1,000.000 Units are reserved lor issuance to future

e mployees or cOl1traciors, andlor for issuance to future investors.

(I) U pon issuarice of the foregoing Units, and assuming issuance of the
1,{lOO,OOO Units provided in e., the percentage ownership of POW! will be

"

..\ .

EXHIBIT: 3 PAGE 1\\

 Stan Lee, 51 %. Arthur LiebemlaJl 29%, Gil Champion, 7.5% and other
employees and investors 12.5%

2. EMPLOlMEIVT 01" ST.4N LEE. Stan Lee will serve as Chairman and Chief
Creative Officer of POW!. Stan Lee will be based in Los Angeles, for a teml
commencing on the date hereof and tenuinating with his death [or 10 years if
sooner]. Stan Lees services shall be full-time and exclusive with the exception of
those services pro\�ded under a lifetime agreement with Marvel, which requires
no more than average of 10 - 15 hours per week on its behalf. All other services
perfomled. and intellectual property created for POW! or for any other entity,
which entity shall be approved in writing by POW!, shall inure to the benefit of
POWL Exempt income shall be autographs, book introductions, lectures, fees for
roles and any other honorarium type payments agreed to by the parties.

Stan Lee's services to POW! shall include, but not be limited to, the following;

( a) Berve and be listed in all directories and publications as Chaimlan. and

Chief Creative Officer of POW!, including attending corporate meetings,
developing and supervising development and produciion of intellectual
property in any and all media, directing and guiding the creative staff or
staffs of POW!, all subsidi ..ies and affiliates as reasonably requested by
POW!.

(b) Act as Co-Executive Producer for all media productions, all fees generated
thereby shall belong to POW! with the exception of Conan and Red Sonja
- Producer fees.

(c) Apply his good faith, best efforts to enhance the brand and good will of
POW!, support and stimulate strategic alliances, joint ventures, sponsors,'
prodnction partners and all direct ..ld ancillary business of POW!.

(d) Serve as spokesman for POW! to all media and assemblies as reasonably
requested by POW!.

(e) Take all actions and' contribute all creative talents within Stan' Lee's
reasonable capability; pnrsuant to his good faith detemlination of his
schedule, as may reasonably be required to advance the interests of POW! .

.3, .5.4LARJe As ·compensation to him for all rights· and services contributed by
you and notwithstanding any disability, POW! shall provide ihe following compensation
.
for life:

(a) A base salary of$250,000 per annum and unless earlier financed
for at le.ast
first two years of POW!' exists and a balloon-payment of the
balance, without interest promptly thereafter.

2
EXHIBIT 3 PAGE \ \"V
 (b) Stan Lee will receive prompt reimbursements for all ordinary and
necessary business expenses incurred by him on behalf of POW' in
the past and future,and POW! shall permit his customary first
class,travel with sedan limousine and stay in deluxe hotels. Past is
approximately �'beferred and to be paid after all expenses of
Lieberman, Champion, and Lee is $150.000 of deferred income
dollar for dollar with the deferred income of Liebemlan and
Champion.

(c) POW! shan seek to acquire medical msurance if not otherwise

provided for Stan Lee and his family.

(d) If Stan Lee 'becomes disabled so as to be unable to perfotm his

duties for POW!, his annual.salary shall be reduced to $125,000
per year.

4. ASSIGNMENT BY STAN LEE. In consideration for the foregoing Stan Lee agrees
as follows:

(a) To assign, convey and grant 'to POW' forever, all right, title and
iIiterest Stan Lee may have or control, now or in the future, in the
following: Any and all ideas: names, titles, characters, symbols,
logos. designs, likenesses. visual representations, artwork, stories,
plots, scripts, episodes, literary property, and the conceptual
universe related thereto,including my name and likeness (the
"Property") which will or have been in whole or part disclosed in
writing to, published, merchandise, advertised, andlor licensed by
POW!� its affiliates and successor in interests and licensees (which
by agreement inures to POW!'s benefit) or any of them and any
copyrig htS, tradem'arks, statutory rights,common law, goodwill.
nloralrights and any other rights :whatsoever in the Property in any
and all countries and in all media andlor fields, including all rights
to renewal or ext�nsiqns of copyright (the ·'Rights").

(b) Tb assign, convey and grant to POW! forever, all right title and
interest that Stan Lee may have in any income arising [rom the
'OVvnership of a Membership interest in QED Productions LLC
("QED:') or arising ftom the sale of the ownership of such
Membership Interest. . QEp',(o(1ifi'y \lthll(eptnp.'!.!iY§�fQf:ine�}is
f6nn-�li' to. ret"iv¢titeitlte1ledfua:/.priiperiy from St<iilLee Media,
sian Lee represents and wairants that he will not cal.l�e or pemli!
any ownership interest to be issued to any other party without the
consent of Managers of POW! other than Stan Lee.

(c) To execute upon request POW! and documents i! deems

reasonably necessary to effect the purposes of this agreement.

3
EXHIBIT -3�PAGE \\':)_
' .

5. DISCLOSllRE or- l;-:rORMATION AND NON-COMPETITION:

tal Stan Lee Agrees to keep confidential all confidential infomlation

regarding POW! and not to use any such infonnation except
pursuant to his duties for POW!

(b) Stan Lee agrees that during his employment for POW!. and for a
period of two years thereafter, he will not be employed by. or
provide consulting or other services, directly or indirectly, for any
entity which creates, develops or markets like Property, except foy; �UJ//
- ��
.
�
fulfilling Stan Lee's current agreement with Marvel Comics.
.
6. OPERA n,,'C ACREE1IE.'T. It is a condition to this agreement that Stan Lee,
����.
Liebemlan and Cha�lpion. each sign the Operating Agreement of POW!. The Operating
. Agreement \vill proVide. among other things, that:

(a) Stan Lee and Arthur Liebennan will be the two Managers of
POW'. The Managers orPOW! will make all decisions, including
whether to appoint additional Managers, by the consent or vote of
a majority ofPOW!'s Managers (or of both Managers at such time
as there are only two Managers; and

(b) No Member of POW! may sell or transfer any of his Membership

Interest in POW' except (a) to other Members (b) 10 family
members for estate planning.

7. !ll!�·CELL.-L\"£OUS.

(a) This AgreemenL including the assigr1ffie nt set forth herein, shall be
binding upon the parties hereto, their affiliates and subsidiaries,
legal representatives, successors and predecessors in interest heirs
.

and assigns.

(b) 11,e invalidity of any pro v Isi on··or parth�reof or obligation

hereunder, or the contravention thereby of any law.· niie or
regulation of any State; the ·Federal Governnlent or any. agency,
shall not relieve any party from its obligation under, nor dep,;ve
any party of advantages of any ot her provision "f this AgreemenL

(c ) This agreement shall be governed by and construed under the laws

of the State of California,

(d) All notices under this agreement shall be in writing and shall be sent
to the addresses Illst set forth above, or such other addresses of
which either party notifies the ot her from time. to time.

4
 '-'

(e) Tills agreement constitutes U,e entire Agreement among the parties
with respect to the subject matter contained herein and supersedes
all prior agreements, understandings. oral or wriuen� with' respect
to the subject matter contained herein. This Agreement may not be
amended, modified or tenninated except in writing executed by
each of the parties hereto.

Lv W/T.YESS IVHEREOF, the parties hereto have signed, or caused to be

signed this agreement as of the date first set forth herein.

Sta�
.By. .

5
E)<HIB!1:3
· }

EXECUTED
Hollywood Licensing, LLC
15821 Ventura Blvd. Suite 110
Encino, CA 91436

Dated:March 25, 2003

Mr. Gill Champion revised: July 17, 2003
QED Productions, LLC revised: July 21, 2003
2450 Broadway, #500 revised: July 22, 2003
Santa Monica,CA 90404

Dear Gill:

The following constitutes the agreement (the·Agreemenqbetween you (QED Productions, lLC) and us (Hollywood
Licensing, LLC):

1. ENGAGEMENT: You hereby engage us as yOlJr non-exclusive representative,in connection with all matters
relating to the licensing and merchandising of your Properties:The Accuser, TheDrifter. We hereby accept such
engagement.

2. TERM: The initial term of the Agreement shall be for

however,that the term shall automatically be extended foran additional one (1)year unless you or we give written
notice of termination to the other on or before 30 <1ays prior to the end of the initial term.

3. COMMISSIONS: I n consideration of our entering into this Agreement, and for other good and valuable
consideration, you hereby agree to pay us, as and when applicable gross income is received by you or on your
behalf from any negotiated licenses or agreements, (a)a commission.equal to 35 percent (35%)of allgross
income derived from all revenue generated byus during the term hereof and payable immediately upon of receipt of
any and all license fees; and (b) the same percentage commission of all gross income which you mayreceive or
earnfollowing the expiration of the term hereof in connection with any licenses which began during the term and all
extensions, modifications, renewars and substitutions theroo f
. (Le.in the event an agreement is
continues into the year{s)following the termination of this Agreement aUcommissions are due within 5 days
following the payment of such extensions.) The term -gross income-as used herein shall mean all monies received
by or for you andlor payable to you, wjthout deduction, from any license agreement originally negotiated by us.
Further,any repeat business generated originallybyus through a specific "'client'"during the term of this Agreement
shall be commissioned at the 35 percent ( 35%) fee regardless of whether the second or subsequent request comes
directly to you or us.

4. EXPENSES: You shall be required to pay your own costs for any duplication of materials or otherincidental
expenses whichmay occur related to the possible licensesor merchandising agreements.

5. AUTHORIZATIONS: (a) To collect and receive (during or after the term hereof)all checks and other to rms
of payment representing your gross income that is commtssionable by us hereunder, as well as endorse your name
upon and cash any and all such checks,and deduct and retain therefrom all commissions and expenses to which
we are entitled hereunder. However,if any gross income that is commissionable by us hereunder s I
directly by the third party payor toyour company,business manager or other representative,you will instructsuch
agent, business manager or other representative (as applicable) toimmediately upon receipt deduct from said
gross income and remit directly to us all commissions an�expenses to which we are entitled hereunder. Further,
QED Productions,LLC shall be the signing party on the Agreements generated by us and QED Productions,
shall �ave final approval over all Agreement terms.

6. INDEPENDENT CONTRACTOR: This Agreement shall not be construed to create a partnership between you
and us. We are acting h
_ ereunder

7. DEFAULT: Due to the difficulty which you arid we may have in determining the amount of services to which
you may be entttled, we shall not be deemed to be n
i
written notice, by certified
 fact:r�li.i(:ed to, render sL!ch serl.c.e hereuh�er� and-ifwe shall fh-ereaftef�have Jailed for.·a" -,penGO oh5 con-sec_otiVe:
blfsiii-ess days to con1mence:ren-ditlon ofthe ·p"i 1F11ctda( $elYlc�'.

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