SB-2/A

As filed with the Securities and Exchange Commission on October 31, 2007

Registration No. 333-145871

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

Amendment No. 1

to

  FORM SB-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PLATINUM STUDIOS, INC.

(Name of small business issuer in its charter)

California	2721	20-5611551
(State or other Jurisdiction	(Primary Standard Industrial	(I.R.S. Employer
of Incorporation or Organization)	Classification Code Number)	Identification No.)

  11400 W. Olympic Blvd., 14thFloor

Los Angeles, California 90064

(310) 807-8100

(Address and telephone number of principal executive offices and principal place of business)

Scott Mitchell Rosenberg

Chief Executive Officer

PLATINUM STUDIOS, INC.

11400 W. Olympic Blvd., 14thFloor

Los Angeles, California 90064

(310) 807-8100

  (Name, address and telephone number of agent for service)

Copies to:

Gregory Sichenzia, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32 ^nd Floor

New York, New York 10006

(212) 930-9700

(212) 930-9725 (fax)

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:

From time to time after this Registration Statement becomes effective.

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: o _X_______

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o ________

(COVER CONTINUES ON FOLLOWING PAGE)

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o ________

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o ________

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  o ________

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TITLE OF EACH CLASS OF SECURITIES TO BE  REGISTERED	AMOUNT TO BE  REGISTERED (1)		PROPOSED   MAXIMUM   OFFERING PRICE  PER SHARE (2)		PROPOSED   MAXIMUM   AGGREGATE  OFFERING PRICE		AMOUNT OF  REGISTRATION  FEE
Common stock, $.0001 par value	$	66,255,825	$	$0.10	$	$6,625,583	$	$203.41
Total					$	$6,625,583	$	$203.41	*

(1) Includes 100% of the shares of our common stock, par value $.0001 per share, issued to the selling stockholders prior to the date of this prospectus, under certain Subscription Agreements dated October 12, 2006, which may be offered pursuant to this registration statement.

(2) Estimated solely for the purpose of calculating the registration fee required by Section 6(B) of the Securities Act of 1933, as amended, and computed pursuant to Rule 457 under the Securities Act.

 * Previously paid.

The registrant amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine.

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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED OCTOBER  31, 2007

PLATINUM STUDIOS, INC.

66,255,825 SHARES OF

COMMON STOCK

This prospectus relates to the resale by the selling stockholders of up to 66,255,825 shares of our common stock presently outstanding. The selling stockholders may be deemed underwriters of the shares of common stock, which they are offering. We will pay the expenses of registering these shares.

We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from this offering. We have paid the expenses of preparing this prospectus and the related registration expenses.

There is currently no public market for our securities. The selling shareholders will sell shares from time to time at a fixed price equal $.10 per share. Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.

INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE "RISK FACTORS"

BEGINNING ON PAGE  9.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is ________, 2007.

The information in this Prospectus is not complete and may be changed. This Prospectus is included in the Registration Statement that was filed by Platinum Studios, Inc. with the Securities and Exchange Commission. The selling stockholders may not sell these securities until the registration statement becomes effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the sale is not permitted.

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TABLE OF CONTENTS 

Cautionary Note Regarding Forward-Looking Statements	5
Prospectus Summary	6
Risk Factors	8
Use Of Proceeds	16
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	19
Description Of Business	25
Description Of Property	34
Legal Proceedings	34
Management	35
Executive Compensation	37
Certain Relationships And Related Transactions
Security Ownership Of Certain Beneficial Owners And Management	39
Description Of Securities	40
Commission’s Position On Indemnification For Securities Act Liabilities	40
Plan Of Distribution	41
Selling Stockholders	53
Legal Matters	67
Experts	67
Available Information	67
Index to Financial Statements	F-1

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and any prospectus supplement contain forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events.

In some cases, you can identify forward-looking statements by words such as "may," "should," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

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PROSPECTUS SUMMARY

The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "risk factors" section, the financial statements and the notes to the financial statements. As used throughout this prospectus, the terms “Platinum Studios”, the “Company”, “we”, “us” and “our” refer to Platinum Studios, Inc.

PLATINUM STUDIOS, INC.

OUR BUSINESS

We are an entertainment company that works with independent comic book creators and small publishers to form an independent library of over 3,800 comic book characters which we adapt and produce for all forms of media.  Our library contains characters in a full range of genre and styles.  With deals in place with film studios and media players, our management believes we are positioned to become a leader in the creation of new content across all media.  

We are focused on adding titles and expanding our library with the primary goal of creating new franchise properties and characters.  In addition to in-house development and further acquisitions, we are developing content with professionals outside the realm of comic books.  We have teamed up with screenwriters, producers, directors, movie stars, and novelists to develop entertainment content and potential new franchise properties.  We believe our core brand offers a broader range of storylines and genres than the traditional superhero-centric genre.  Management believes this approach is maintained with Hollywood in mind, as the storylines offer the film industry fresh, high-concept brandable content as a complimentary alternative to traditional super hero storylines.

Over the next several years, we are working to become the leading independent comic book commercialization producer for the entertainment industry across all platforms including film, television, direct-to-home, publishing, and digital media, creating merchandising vehicles through all retail product lines.  Our management believes this will allow us to maximize the potential and value of our owned content creator relationships and acquisitions, story development and character/franchise brand-building capabilities while keeping required capital investment relatively low.

Platinum Studios derives revenues from a number of sources in each of the following areas:  Print Publishing, Digital Publishing, Filmed Entertainment, and Merchandise/Licensing.

We have incurred losses since our inception. For the years ended December 31, 2006 and December 31, 2005, the Company generated revenue of $180,500 and $162,500 respectively.  For the same periods, the Company incurred net losses of $4,272,780 and $2,080,915 respectively.  For the six months ended June 30, 2007, we generated revenue of $1,676,800 with a net loss of $1,484,673.  At December 31, 2006 and December 31, 2005, total assets were $1,141,088 and $514,720, respectively.  Total assets at June 30, 2007 were $1,378,586. At June 30, 2007, the Company had a working capital deficit of $1,202,574.

 In the audit report dated July 13, 2007, our auditors noted the financial statements of the Company were prepared assuming the Company will continue as a going concern.  Due to the recurring losses from operations and insufficient assets available to fund activities, they expressed a “going concern” opinion reflective of their substantial doubt about the ability of the Company to continue as a going concern.

We were founded as a California limited liability company on November 20, 1996.  On September 15, 2006, we filed Articles of Incorporation with Statement of Conversion to convert to a California stock corporation.  The Plan of conversion provided for the issuance of an aggregate of 135,000,000 shares to the former members of the limited liability company. Our principal offices are located at 11400 W. Olympic Blvd. Suite 1400, Los Angeles, CA 90064 and our phone number is (310) 807-8100.

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The Offering

Common stock offered by selling stockholders	Up to 66,255,825 shares, including the following:
	-      up to 49,047,250 shares of common stock issued prior to the date of this prospectus to certain of the selling stockholders pursuant to certain Subscription Agreements in October 2006 for an aggregate purchase price of $4,904,725, less offering costs of $217,312
	-    17,208,575 shares of common stock issued prior to the date of this prospectus to a selling stockholder pursuant to an agreement dated July 1, 2007 in consideration for relief of long-term debt of $1,625,000 plus interest of $95,858.
	This number represents 32.92% of our current outstanding stock.
Common stock to be outstanding after the offering	Up to 201,255,825 shares
Use of proceeds	We will not receive any proceeds from the sale
	of the common stock.

The above information regarding common stock to be outstanding after the offering is based on 201,255,825 shares of common stock outstanding as of October 30, 2007, which includes the shares being offered by the selling stockholders in this prospectus and 17,208,575 shares issued pursuant to a cancellation of indebtedness agreement dated July 1, 2007.

There is currently no public market for our securities.. The $0.10 per share offering price of the common stock being sold under this prospectus has been arbitrarily set. This price does not bear any relationship to our assets, book value, earnings or net worth and it is not an indication of actual value.

TRANSACTIONS BEING REGISTERED IN THIS PROSPECTUS

In October 2006, we entered into Subscription Agreements with various accredited investors (the “October 2006 Private Placement”) pursuant to which the investors subscribed to purchase a total of 49,047,250 shares of our common stock, resulting in proceeds to the company of $4,904,725, less offering costs of $217,312. The offering closed on April 30, 2007.  In connection with the offering, we agreed to use our reasonable best efforts to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock sold in the private placement within 180 days following the closing of the offering.

On July 1, 2007, we entered into a Cancellation of Indebtedness Agreement with our CEO Scott Mitchell Rosenberg, pursuant to which we agreed to issue 17,208,575 shares in exchange for canceling $1,625,000 in long-term debt plus $95,858 in accrued interest for said debt.  Mr. Rosenberg directed the shares to be issued in the name of Charlotte Rosenberg, his mother, from whom he personally borrowed the funds, which he then loaned to the Company’s predecessor in interest, Platinum Studios LLC.

We claim an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.

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SUMMARY FINANCIAL INFORMATION

The following information for the years ended December 31, 2006 and 2005 have been derived from our audited financial statements, which appear elsewhere in this prospectus. The following information as at June 30, 2007 and for the six months ended June 30, 2007 has been derived from our unaudited financial statements, which appear elsewhere in this prospectus.

Statement of Operations Information:

	Six Months Ended June 30,						Year Ended December 31,
	2007			2006			2006			2005
Revenues:
Net Revenue	$	1,676,800		$	30,500		$	180,500		$	162,500
Operating income/(loss)		(1,344,286	)		(1,566,159	)		(3,825,346	)		(1,696,441	)
Other income / (expense)		(140,387	)		(191,710	)		(447,434	)		(384,474	)
Net income (loss)		(1,484,673	)		(1,757,869	)		(4,272,780	)		(2,080,915	)
Weighted average shares of common stock outstanding (basic)		172,167,375			-			145,908,250			-
Income per share (diluted)	$	(0.01	)		-		$	(0.03	)		-
Weighted average shares of common stock outstanding (diluted)		172,167,673			-			145,908,250		_

Balance Sheet Information:

	June 30, 2007			December 31, 2006
Working capital	$	(1,202,574	)	$	(2,027,806	)
Total assets		1,378,586			1,141,088
Total liabilities		5,330,462			6,026,803
Retained earnings		(5,757,453	)		(4,272,780	)
Stockholders’ equity		(3,951,876	)		(4,885,715	)

RISK FACTORS

This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means you could lose all or a part of your investment.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

WE HAVE A LIMITED OPERATING HISTORY UPON WHICH YOU CAN BASE AN INVESTMENT DECISION.

Our company was formed on November 20, 1996 and has only recently begun to fully exploit our library of characters.  The first ten years of our existence were spent acquiring and building our library.  There can be no assurance at this time that we will operate profitably or that we will have adequate working capital to meet our obligations as they become due.  Management believes that our success will depend in large part on the continued shift from print to digital media as well as the ability to monetize that shift.  We intend to invest heavily in developing and marketing our library of characters, primarily for the web and traditional media outlets, i.e. film and television, with print as a secondary medium.  However, there can be no assurance that such investments will yield the anticipated returns.

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COMPETITION FROM PROVIDERS OF SIMILAR PRODUCTS AND SERVICES COULD MATERIALLY ADVERSELY AFFECT OUR REVENUES AND FINANCIAL CONDITION

The industry in which we compete is a rapidly evolving, highly competitive and fragmented market, which is based on consumer preferences and requires substantial human and capital resources. We expect competition to intensify in the future. There can be no assurance that we will be able to compete effectively.  We believe that the main competitive factors in the entertainment, media and communications industries include effective marketing and sales, brand recognition, product quality, product placement and availability, niche marketing and segmentation and value propositions. They also include benefits of one's company, product and services, features and functionality, and cost. Many of our competitors are established, profitable and have strong attributes in many, most or all of these areas. They may be able to leverage their existing relationships to offer alternative products or services at more attractive pricing or with better customer support. Other companies may also enter our markets with better products or services, greater financial and human resources and/or greater brand recognition. Competitors may continue to improve or expand current products and introduce new products. We may be perceived as relatively too small or untested to be awarded business relative to the competition. To be competitive, we will have to invest significant resources in business development, advertising and marketing.  We may also have to rely on strategic partnerships for critical branding and relationship leverage, which partnerships may or may not be available or sufficient. We cannot assure you that we will have sufficient resources to make these investments or that we will be able to make the advances necessary to be competitive. Increased competition may result in price reductions, reduced gross margin and loss of market share. Failure to compete successfully against current or future competitors could have a material adverse effect on the Company’s business, operating results and financial condition.  

THE SPECULATIVE NATURE OF THE ENTERTAINMENT, MEDIA AND COMMUNICATIONS INDUSTRY MAY RESULT IN OUR INABILITY TO PRODUCE PRODUCTS OR SERVICES THAT RECEIVE SUFFICIENT MARKET ACCEPTANCE FOR US TO BE SUCCESSFUL.

Certain segments of the entertainment, media and communications industry are highly speculative and historically have involved a substantial degree of risk. For example, if a property is optioned by a studio, the option may not get exercised, or if exercised, a film may still not be made, or even if a film is made, the success of a particular film, video game, program or recreational attraction depends upon unpredictable and changing factors, including the success of promotional efforts, the availability of alternative forms of entertainment and leisure time activities, general economic conditions, public acceptance and other tangible and intangible factors, many of which are beyond our control. If we are unable to produce products or services that receive sufficient market acceptance we may not generate sufficient revenues to maintain our operations and our business will be unsuccessful.

CHANGES IN TECHNOLOGY MAY REDUCE THE DEMAND FOR THE PRODUCTS OR SERVICES WE MAY OFFER FOLLOWING A BUSINESS COMBINATION.

The entertainment, media and communications industries are substantially affected by rapid and significant changes in technology. These changes may reduce the demand for certain existing services and technologies used in these industries or render them obsolete. We cannot assure you that the technologies used by or relied upon or produced by a target business with which we effect a business combination will not be subject to such occurrence. While we may attempt to adapt and apply the services provided by the target business to newer technologies, we cannot assure you that we will have sufficient resources to fund these changes or that these changes will ultimately prove successful. If we are unable to respond to quickly to changes in technology our business will fail.

WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS MODEL, WHICH IS SUBJECT TO INHERENT UNCERTAINTIES.

Our business model is predicated on our ability to control all of the rights surrounding our IP in order to properly monetize and exploit each property in the most appropriate medium.  We cannot assure that there will be a large enough audience for our IP or the media projects or merchandise based on them, or that prospective customers will agree to pay the prices that we propose to charge.  In the event our customers resist paying the prices we set for our products, our business, financial condition, and results of operations will be materially and adversely affected.

MANY OF OUR COMPETITORS ARE LARGER AND HAVE GREATER FINANCIAL AND OTHER RESOURCES THAN WE DO AND THOSE ADVANTAGES COULD MAKE IT DIFFICULT FOR US TO COMPETE WITH THEM.

The global media industry is competitive.  There are a substantial number of traditional and established print publishers, film studios, production companies and internet media companies with which we compete directly and indirectly, many of which have significantly greater financial resources, higher revenues, and greater economies of scale than us.  While we believe that we are unique in our utilization of web-based comics as our primary publishing option, new technologies may be developed in the future which will compete with our publishing plan, and such technology may already be in development.  We will attempt to distinguish ourselves from our competitors, but there can be no assurance that we will be able to penetrate the market.  We believe that our intellectual property is attractive to an online audience in light of the recent worldwide trend to move publishing from print to electronic media.  Nevertheless, there is no assurance that we will compete successfully with existing or future competitors in the film industry. If we are not successful in competing with these traditional and established businesses we will be unable to generate any revenues.

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WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY FROM INFRINGEMENT BY THIRD PARTIES.

Our business plan is significantly dependent upon exploiting our intellectual property. There can be no assurance that we will be able to control all of the rights for all of our property or that some of the rights may not revert to their original owners after the expiration of their respective option periods. We may not have the resources necessary to assert infringement claims against third parties who may infringe upon our intellectual property rights. Litigation can be costly and time consuming and divert the attention and resources of management and key personnel. We cannot assure you that we can adequately protect our intellectual property or successfully prosecute potential infringement of our intellectual property rights. Also, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of ours or that we will be able to successfully resolve these types of conflicts to our satisfaction. Our failure to protect our intellectual property rights may result in a loss of revenue and could materially adversely affect our operations and financial condition.

OUR FILMS MIGHT BE LESS SUCCESSFUL ECONOMICALLY THAN WE ANTICIPATE.

We cannot predict the economic success of any of our films because the revenue derived from the distribution of a film depends primarily upon its acceptance by the public, which cannot be accurately predicted. The economic success of a film also depends upon the public’s acceptance of competing films, critical reviews, the availability of alternative forms of entertainment and leisure time activities, piracy and unauthorized recording, transmission and distribution of films, general economic conditions, weather conditions and other tangible and intangible factors, none of which can be predicted with certainty. We expect to release a limited number of films per year as part of our film slate. The commercial failure of just one of those films could have a material adverse effect on our results of operations in both the year of release and in the future.

OUR FILMS MIGHT BE MORE EXPENSIVE TO MAKE THAN WE ANTICIPATE.

We expect that future financing which we may obtain will provide the capital required to produce our film slate. Expenses associated with producing the films could increase beyond projected costs because of a range of factors such as an escalation in compensation rates of talent and crews working on the films or in the number of personnel required to work on films, or because of creative problems or difficulties with technology, special effects and equipment. In addition, unexpected circumstances sometimes cause film production to exceed budget.

WE MIGHT BE DISADVANTAGED BY CHANGES OR DISRUPTIONS IN THE WAY FILMS ARE DISTRIBUTED.

The manner in which consumers access film content has undergone rapid and dramatic changes. Some ancillary means of distribution, such as the DVD market, have gained importance, while others have faded. We cannot provide any assurance that new distribution channels will be as profitable for the film industry as today’s channels or that we will successfully exploit any new channels. We can also not provide any assurance that current distribution channels, such as the DVD market, will maintain their profitability. In addition, films and related products are distributed internationally and are subject to risks inherent in international trade including war and acts of terrorism, instability of foreign governments or economies, fluctuating foreign exchange rates and changes in laws and policies affecting the trade of movies and related products.

WE MIGHT LOSE POTENTIAL SALES BECAUSE OF PIRACY OF FILMS AND RELATED PRODUCTS.

With technological advances, the piracy of films and related products has increased. Unauthorized and pirated copies of our films will reduce the revenue generated by those films and related products.

OUR SUCCESS IS DEPENDENT UPON AUDIENCE ACCEPTANCE OF OUR  ENTERTAINMENT CONTENT WHICH IS DIFFICULT TO PREDICT

The production and distribution of comic books, online publishing, television programs, motion pictures and other entertainment content are inherently risky businesses because the revenues we derive and our ability to distribute and license rights to our content depend primarily upon its acceptance by the public, which is difficult to predict. Audience tastes change frequently and it is a challenge to anticipate what content will be successful at a certain point in time.  In addition, the commercial success of our content also depends upon the quality and acceptance of competing programs, motion pictures and other content available or released into the marketplace at or near the same time. Other factors, including the availability of alternative forms of entertainment and leisure time activities, general economic conditions, piracy, digital and on-demand distribution and growing competition for consumer discretionary spending may also affect the audience for our content. Furthermore, the theatrical success of a feature film may impact not only the theatrical revenues we receive but also those from other distribution channels, such as DVD sales, pay television and sales of licensed consumer products. A poor theatrical performance may also impact our negotiating strength with distributors and retailers, resulting in less desirable product promotion. Consequently, reduced public acceptance of our entertainment content has the ability to affect all of our revenue streams and would have an adverse effect on our results of operations.

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WE MUST RESPOND TO AND CAPITALIZE ON RAPID CHANGES IN CONSUMER BEHAVIOR RESULTING FROM NEW TECHNOLOGIES AND DISTRIBUTION PLATFORMS IN ORDER TO REMAIN COMPETITIVE AND EXPLOIT NEW OPPORTUNITIES

Technology in the online and mobile arenas is changing rapidly. We must adapt to advances in technologies, distribution outlets and content transfer and storage (legally or illegally) to ensure that our content remains desirable and widely available to our audiences while protecting our intellectual property interests. The ability to anticipate and take advantage of new and future sources of revenue from these technological developments will affect our ability to continue to increase our revenue and expand our business. We may not have the right, and may not be able to secure the right, to distribute some of our licensed content across these, or any other, new platforms and must adapt accordingly. Similarly, we also must adapt to changing consumer behavior driven by technological advances such as video-on-demand and a desire for more short form and user-generated and interactive content. These technological advances may impact traditional distribution methods, such as reducing the demand for DVD product and the desire to see motion pictures in theaters. If we cannot ensure that our content is responsive to the lifestyles of our target audiences and capitalize on technological advances, our revenues will decline which may cause us to curtail operations.

A DECLINE IN ADVERTISING EXPENDITURES COULD CAUSE OUR REVENUES AND OPERATING RESULTS TO DECLINE SIGNIFICANTLY IN ANY GIVEN PERIOD OR IN SPECIFIC MARKETS

We anticipate deriving revenues from the sale of advertising in print and on our digital media outlets. A decline in advertising expenditures generally or in specific markets could significantly adversely affect our revenues and operating results in any given period. Declines can be caused by the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Disasters, acts of terrorism, political uncertainty or hostilities could lead to a reduction in advertising expenditures as a result of economic uncertainty. Our advertising revenues may also be adversely affected by changes in audience traffic, which advertisers rely upon in making decisions to purchase advertising. A decrease  in our advertising revenues will adversely impact our results of operations.

WE COULD BE ADVERSELY AFFECTED BY STRIKES AND OTHER UNION ACTIVITY

We and our suppliers engage the services of writers, directors, actors and other talent, trade employees and others who are subject to collective bargaining agreements. If we or our suppliers are unable to renew expiring collective bargaining agreements, certain of which are expiring in the next year or two, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, higher costs in connection with these agreements or a significant labor dispute could adversely affect our business by causing delays in the production, the release date or by reducing the profit margins of our programming or feature films.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDING, OUR BUSINESS OPERATIONS WILL BE HARMED AND IF WE DO OBTAIN ADDITIONAL FINANCING, OUR THEN EXISTING SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.

There is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay any indebtedness or that we will not default on our debt obligations, jeopardizing our business viability.  Furthermore, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct our business. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.

IF WE DO NOT MAINTAIN THE CONTINUED SERVICE OF OUR EXECUTIVE OFFICERS, OUR BUSINESS OPERATIONS MAY BE AFFECTED.

Our success is substantially dependent on the performance of our executive officers and key employees.  Given our early stage of development, we are dependent on our ability to retain and motivate high quality personnel.  Although we believe we will be able to engage qualified personnel for such purposes, an inability to do so could materially adversely affect our ability to market, sell, and enhance our products.  The loss of one or more of our key employees or our inability to hire and retain other qualified employees, including but not limited to development staff, business development staff, digital publishing staff and corporate office support staff, could have a material adverse effect on our business.

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WE MAY INCUR UNINSURED LOSSES IN THE OPERATION OF OUR BUSINESS.

There is no assurance that we will not incur uninsured liabilities and losses as a result of the conduct of our business.  We plan to maintain comprehensive liability and property insurance at customary levels.  We will also evaluate the availability and cost of business interruption insurance.  However, should uninsured losses occur we may be unable to cover these losses from our existing work capital which may cause us to incur significant losses.

WE MAY INCUR LIABILITIES THAT WE MIGHT BE UNABLE TO REPAY IN THE FUTURE

We may incur liabilities with affiliated or unaffiliated lenders.  These liabilities would represent fixed costs which would be required to be paid regardless of the level of our business or profitability.  There is no assurance that we will be able to pay all of our liabilities.  Furthermore, we are always subject to the risk of litigation from customers, suppliers, employees, and others because of the nature of our business, including but not limited to consumer lawsuits.  Litigation can cause us to incur substantial expenses and, if cases are lost, judgments, and awards can add to our costs. An increase in our costs may cause us to increase the prices at which we charge our customers which may lead to our customers to seek alternatives to our products. In such event, our revenues will decrease and we may be forced to curtail our operations.  Our current liabilities as of June 30, 2007 were as follows:  Accounts Payable $241,918, Accrued Expenses $133,410, Short-Term Notes Payable to Shareholder $1,267,100, Related Party Payable $193, 079, and Capital Lease Obligations of $72,190 for total current liabilities of $1,907,697.

WE MAY INCUR UNANTICIPATED COST OVERRUNS WHICH MAY SIGNIFICANTLY AFFECT OUR OPERATIONS.

We may incur substantial cost overruns in the development and enhancement of our electronic comics, printed comics, and merchandise.  Management is not obligated to contribute capital to us.  Unanticipated costs may force us to obtain additional capital or financing from other sources if we are unable to obtain the additional funds necessary to implement our business plan. There is no assurance that we will be able to obtain sufficient capital to implement our business plan successfully.  If a greater investment is required in the business because of cost overruns, the probability of earning a profit or a return of the Shareholders’ investment will be diminished.

OUR PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS WILL OWN A CONTROLLING INTEREST IN OUR VOTING STOCK AND INVESTORS WILL NOT HAVE ANY VOICE IN OUR MANAGEMENT.

Our principal stockholders, officers and directors, in the aggregate, beneficially own approximately 67.08% of our outstanding common stock.   Our Chairman, Scott Rosenberg and President and Chief Operating Officer, Brian Altounian own approximately 128,250,000 and 6,750,000 shares of our outstanding common stock, respectively. As a result, our principal stockholders, officers and directors, acting together, have the ability to control substantially all matters submitted to our stockholders for approval, including:

· election of our board of directors;

· removal of any of our directors;

· amendment of our certificate of incorporation or bylaws; and

· adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.

As a result of their ownership and positions, our principal stockholders, directors and executive officers collectively are able to influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, sales of significant amounts of shares held by our principal stockholders, directors and executive officers, or the prospect of these sales, could adversely affect the market price of our common stock. Their stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

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WE MAY NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS OR AT ALL.

While we were successful in raising $4,904,725, less offering costs of $217,312  in the recent completed financing we may be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations.   We estimate that our capital requirements in the next six months will be approximately $2,400,000. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all.  The inability to obtain additional capital may reduce our ability to continue to conduct business operations.  If we are unable to obtain additional financing, we will likely be required to curtail our research and development plans.  Any additional equity financing may involve substantial dilution to our then existing shareholders.

BECAUSE OF OUR DEPENDENCE ON A LIMITED NUMBER OF TRADITIONAL MEDIA OUTLETS, ANY SIGNIFICANT REDUCTION IN DEALS WITH MAJOR FILM STUDIOS AND TELEVISION/CABLE NETWORKS MAY IMPAIR OUR ABILITY TO OPERATE PROFITABLY.

Our business to date has been dependent upon a small number of licensing transactions with major studios and television/cable networks. For the first six months of 2007 and the year ended December 31, 2006, a very small number of transactions accounted for a disproportionately large percentage of our revenue. As of June 30, 2007, two transactions, one to each of two customers accounted for 87% of our revenues.  An acquisition sale and a rights option agreement provided 60% and 27% of the year to date revenues, respectively.  For the year ended December 31, 2006, three transactions (two rights options and an acquisition deal) accounted for 100% of our revenue. The loss of or significant reduction in transactions to any of these traditional media outlets could impair our ability to operate profitably and that we may not be able to replace any decline in revenue. 

RISKS RELATING TO OUR COMMON STOCK

IF YOU PURCHASE SHARES IN THIS OFFERING, YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION.

The $0.10 per share offering price of the common stock being sold under this prospectus has been arbitrarily set. The price does not bear any relationship to our assets, book value, earnings or net worth and it is not an indication of actual value. Accordingly, if you purchase shares in this offering, you will experience immediate and substantial dilution. You may also suffer additional dilution in the future from the sale of additional shares of common stock or other securities.

THERE IS NO MARKET FOR OUR COMMON STOCK, WHICH MAY MAKE IT MORE DIFFICULT FOR YOU TO DISPOSE OF YOUR COMMON STOCK.

There is no established public trading market for our securities. Hence, there is no central place, such as a stock exchange or electronic trading system, to resell your common stock. If you want to resell your shares, you will have to locate a buyer and negotiate your own sale. It is our plan to utilize a market maker who will apply to have our common stock quoted on the Over-the-Counter Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the Over-the-Counter Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor will be unable to liquidate his investment except by private sale.

SHOULD OUR STOCK BECOME LISTED ON THE OTC BULLETIN BOARD, IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.

Companies trading on the Over-The-Counter Bulletin Board, such as we are seeking to become, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our Company.

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ONCE PUBLICLY TRADING, THE APPLICATION OF THE "PENNY STOCK" RULES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON SHARES AND INCREASE YOUR TRANSACTION COSTS TO SELL THOSE SHARES.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

· that a broker or dealer approve a person's account for transactions in penny stocks; and

· the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

· obtain financial information and investment experience objectives of the person; and

· make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

· sets forth the basis on which the broker or dealer made the suitability determination; and

· that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FUTURE; ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF OUR COMMON STOCK.

We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our Common Stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders of our Common Stock, and in any event, a decision to declare and pay dividends is at the sole discretion of the our Board of Directors. If we do not pay dividends, our Common Stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any proceeds from the sale of shares of common stock in this offering. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. Any transfer taxes payable on these shares and any commissions and discounts payable to underwriters, agents, brokers or dealers will be paid by the selling stockholder. The proceeds of loans from Scott Rosenberg to Platinum were made pursuant to the terms of the Company operating agreement and were used for working capital purposes from January, 2001 thru December, 2006. Upon cancellation of the debt in exchange for the issuance of 17,208,575 shares on July 1, 2007, we did not receive any additional proceeds.

Market for Common Stock and related Stockholders Matters

Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.

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HOLDERS

As of October 30, 2007, our common stock was held by 311 stockholders of record and we had 201,255,825 shares of common stock issued and outstanding, which includes the shares being offered by the selling stockholders in this prospectus.

Transfer Agent

The transfer agent of our securities is Computershare Limited, whose address is 1745 Arden Avenue, Glendale, CA 91204.  The phone number of the transfer agent is (800) 962-4284.

Dividends

We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. The payment by us of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

EQUITY COMPENSATION PLAN INFORMATION

The following table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance as from inception (November 20, 1996) through June 30, 2007.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
	(a)		(b)		(c)
Equity compensation plans approved by security holders		30,000,000		-0-		30,000,000
Equity compensation plans not approved by security holders		0-		-0-		-0-
Total		30,000,000		-0-		30,000,000

Description of the Platinum Studios, Inc. 2007 Incentive Plan

The Platinum Studios, Inc. 2007 Incentive Plan (the “Plan”) has initially reserved 30,000,000 shares of common Stock for issuance. Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not ("Non-ISOs") intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded.

Purpose . The primary purpose of the Plan is to attract and retain the best available personnel in order to promote the success of our business and to facilitate the ownership of our stock by employees and others who provide services to us.

Administration . The Plan is administered by the compensation committee of our Board of Directors, for any period in which the Company is subject to the reporting requirements of the Exchange Act shall consist of not less than two members of the Board each of whom shall qualify as non-employee directors.

Eligibility .   Under the Plan, options may be granted to employees, directors or consultants of the Company, as provided in the Plan.

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Terms of Options . The term of each option granted under the Plan shall be for such period as may be determined by the Committee but not to exceed ten years. Each option grants shall be contained in a stock option agreement between the optionee and Platinum Studios and such terms shall be determined by the Board of Directors consistent with the provisions of the Plan, including the following:

(a) Purchase Price. The purchase price of the common stock subject to each stock option shall be determined by the Committee at the time the Option is granted but shall not be less than 100% fair market value on the date of grant. If any Employee to whom an option that is an incentive stock option is granted owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent corporation, within the meaning of Section 424(e) of the Internal Revenue Code of 1986 (the “Code”), or any subsidiary corporation of the Company, within the meaning of Section 424(f) of the Code, then the exercise price per share shall not be less than one hundred ten percent (110%) of the fair market value per share on the date of grant and the option term shall not exceed five (5) years measured from the date of grant.

 (b) Vesting. The dates on which each option (or portion thereof) shall be exercisable and the conditions precedent to such exercise, if any, shall be fixed by the Committee, in its discretion, at the time such option is granted. All options or grants which include a vesting schedule will vest in their entirety upon a change of control transaction as described in the Plan;

(c) Expiration. The expiration of each option shall be fixed by the Committee, in its discretion.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Some of the information in this prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "may," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:

· discuss our future expectations;

· contain projections of our future results of operations or of our financial condition; and

· state other "forward-looking" information.

We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."

GENERAL

We are a comics-based entertainment company.  We own the rights to a library of over 3,800 of comic book characters, which we adapt and produce for film, television and all other media. Our library contains characters in a full range of genre and styles.  With deals in place with film studios and media players, our management believes we are positioned to become a leader in the creation of new content across all media.  

We are focused on adding titles and expanding our library with the primary goal of creating new franchise properties and characters.  In addition to in-house development and further acquisitions, we are developing content with professionals outside the realm of comic books.  We have teamed up with screenwriters, producers, directors, movie stars, and novelists to develop entertainment content and potential new franchise properties.  We believe our core brand offers a broader range of storylines and genres than the traditional superhero-centric genre.  Management believes this approach is maintained with Hollywood in mind, as the storylines offer the film industry fresh, high-concept brandable content as a complimentary alternative to traditional super hero storylines.

Over the next several years, we are working to become the leading independent comic book commercialization producer for the entertainment industry across all platforms including film, television, direct-to-home, publishing, and digital media, creating merchandising vehicles through all retail product lines.  Our management believes this will allow us to maximize the potential and value of our owned content creator relationships and acquisitions, story development and character/franchise brand-building capabilities while keeping required capital investment relatively low.

We derive revenues from a number of sources in each of the following areas:  Print Publishing, Digital Publishing, Filmed Entertainment, and Merchandise/Licensing.

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Set forth below is a discussion of the financial condition and results of operations of Platinum Studios, Inc. (the “Company”, “we”, “us,” and “our”) for the twelve months ended December 31, 2006 and 2005, and the six months ended June 30, 2007 and June 30, 2006.  The following discussion should be read in conjunction with the information set forth in the consolidated financial statements and the related notes thereto appearing elsewhere in this report.

RESULTS OF OPERATIONS – SIX MONTHS ENDED JUNE 30, 2007 COMPARED TO THE SIX MONTHS ENDED  JUNE 30, 2006

NET REVENUE

Total Revenue increased by $1,646,300 from $30,500 for the six months ended June 30, 2006 to $1,676,800 for the six months ended June 30, 2007.  This increase is primarily due to a $1,000,000 acquisition fee for the sale of a comic book property realized in March of 2007 and $450,000 from a multi-property, first-look agreement which expired in May of 2007, thus allowing the Company to recognize previously deferred revenue.  The Company may realize future revenue related to commercialization of the acquired property, however, there are no guarantees of such revenue.  The first-look agreement will not provide any future revenue and there are no other material contracts with these customers.

The Company recognized revenue on both the option/acquisition and first-look agreements in accordance with guidance provided in Securities and Exchange Commission Staff Accounting Bulletin No. 104 “Revenue Recognition”.  Under the SAB 104 guidelines, revenue is recognized when the earnings process is complete.  This is considered to have occurred when persuasive evidence of an agreement between the customer and the Company exists, when the properties are made available to the licensee and the Company has satisfied its obligations under the agreement, when the fee is fixed or determinable and when collection is reasonably assured.

Typically, clients purchase an option on a property for a period of time (i.e. 1 year, for example) and at the end of the option period the client either purchases the property or the property reverts back to Platinum.  Also, the option fee may or may not be applicable to the final purchase price of the rights to the property.  If the option is not applicable to the purchase price, the Company will utilize subscription accounting for the option revenue over the option period.  If the option fee is applicable to the final purchase price, the Company will defer the revenue until the earlier of the option period expiring or the property is purchased.

The $1,000,000 option agreement was for the acquisition of all right, title and interest in and to a graphic novel written and owned by Platinum.  The option was exercised via a formal letter from the client to the Company and the full purchase price received by the Company prior to the expiration of the option to purchase.  There was a contractual agreement between the parties, the property was made available to the optionee, the Company had completed its obligations, the fee was fixed, determinable and paid.  There was no obligation by the optionee to further commercialize the property.  The option fee was applicable to the purchase price so the initial $300,000 option payment was held as deferred revenue until the option was exercised (at which time Platinum received the remaining $700,000).

The $450,000 first-look agreement, was an option to have the right of first refusal over (5) properties (Youngblood, Barry Ween, Quiver, Nathan Never and The Fog or other substitute titles) meaning Platinum could still market these properties to other buyers but if another buyer expressed an interest to option one of the named properties, this client had the right to exercise its option to purchase the property.  Again, the option payment was applicable to the final purchase price so the payment received upon execution of the option agreement was recorded as deferred income as it was not determinable as to which, if any properties would be purchased or produced.

Platinum is currently negotiating with other customers for similar and material contracts, but does not currently have any additional executed contracts similar in nature to the two material transactions recognized in the first six months of 2007.

EXPENSES

OPERATIONS– Operating expenses increased by $1,092,535 from $1,275,419 for the six months ended June 30, 2006 to $2,367,954 for the six months ended June 30, 2007, an increase of 86%.  This reflects the increased operating expenses initiated in the second half of 2006 as the Company shifted from a predominantly contractor-based workforce to hiring internal staff and increased its public relations and advertising efforts to expedite the establishment of additional sales distribution channels.  Legal expenses were lower in 2007 due to the hiring of an internal corporate counsel and reducing external legal fees.  On July 10, 2006, the Company entered into a lease for new office facilities in Los Angeles, CA to accommodate its plans for future growth and miscellaneous expenses primarily consist of website costs and supplies.  A detailed schedule of significant expense types within “Operations” is as follows:

	2007					2006
	Jan - Jun		%			Jan - Jun		%			$ Change
Salaries/Benefits		1,025,495		43	%		99,089		8	%		926,406
Contractors		366,090		15	%		663,101		52	%		(297,011	)
Travel & Entertainment		150,072		6	%		67,201		5	%		82,872
Marketing Activities		222,887		9	%		16,056		1	%		206,831
Accounting & Tax		83,735		4	%		33,212		3	%		50,523
Legal		71,211		3	%		180,805		14	%		(109,595	)
Facilities		257,073		11	%		78,816		6	%		178,257
Miscellaneous		191,391		8	%		137,139		11	%		54,251
Total operating expense		2,367,954		100	%		1,275,419		100	%		1,092,535

RESEARCH AND DEVELOPMENT– Research and Development expenses consist primarily of salaries and related personnel costs and independent, work-for-hire fees associated with product development.  Research and Development expenses increased from $310,205 for the six months ended June 30, 2006 to $457,854 for the six months ended June 30, 2007, an increase of $147,649 (48%).  This increase was primarily due to the development activities associated with the delivery of new comic book titles and books on multiple platforms implemented in the second quarter of 2006.

DEPRECIATION AND AMORTIZATION EXPENSE– Depreciation and Amortization expenses increased by $69,630 for the six month period, from $11,035 for the six months ended June 30, 2006 to $80,665 for the six months ended June 30, 2007.  This 631% increase consisted of $45,652 in amortization expense related to other assets which were $0 in 2006 and $23,978 in increased depreciation expense due to additional investments in computer equipment, software and furniture and fixtures.

INTEREST EXPENSE– Interest expense decreased by $51,323 (27%) from $191,710 for the six months ended June 30, 2006 to $140,387 for the six months ended June 30, 2007.  This decrease is primarily due to the conversion of $5,731,057 in principal and accrued interest into equity in September, 2006.

NET LOSS BEFORE INCOME TAXES– As a result of the factors described above, we reported a net loss before income taxes of $1,757,869 for the six months ended June 30, 2006 compared to a loss of $1,484,673 for the six months ended June 30, 2007, an improvement of $273,196.

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RESULTS OF OPERATIONS – YEAR ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR ENDED DECEMBER 31, 2005

NET REVENUE

Total Revenue increased by $18,000 year over year, from $162,500 for the year ended December 31, 2005 to $180,500 for the year ended December 31, 2006, an increase of 11%.  For the year ended December 31, 2006, three transactions (two rights options and an acquisition deal) to three different customers, accounted for 100% of the revenue.  The acquisition sale contributed 82% of the total revenue and one of the rights options provided an additional 14% of total revenue.  The Company does not currently have any additional executed contracts for similar transactions with these or other clients. The Company may realize future revenue related to future commercialization from the acquisition transaction, however there are no guarantees of such revenue.  Additionally, one of the properties that was under a rights option in 2006, which has since expired, is currently under negotiation with another interested party in 2007. The Company entered into an agreement with Dimension Studios on 11/2/04 for which $125,000 was received for the perpetual license to utilize the title “The Darkness” and a option fee of $150,000 which expired on 11/2/06. The Company entered into a one-year option agreement with Relativity Media, LLC on 6/12/05 for the property Witchblade from Top Cow.  The agreement did not provide for a fee for the option and no fee was paid.

EXPENSES

OPERATIONS– Operating expenses increased by $1,560,406 (97%), from $1,607,672 for the year ended December 31, 2005 to $3,168,078 for the year ended December 31, 2006.  The Company increased staffing primarily in the second half of 2006 to address the ramp-up in contractor expense (138% year over year) as Platinum launched its Mobile, Digital and Print Publishing efforts initially utilizing contractor resources in order to expedite operations.  Marketing and travel expenses increased $180,993 in real dollars over 2005 related to the investment in establishing additional sales distribution channels and marketing activities such as the Comic Book Challenge but remained fairly unchanged as a percentage of total operating expense.  Legal expense increased by $224,747 or 526% related to financing activities during 2006 while facility costs increased by $167,445 (115%) as the Company moved into new offices in LA during the summer of 2006.  A detailed schedule of significant expense types within “Operations” is as follows:

	2006					2005
	Jan - Dec		%			Jan - Dec		%			$ Change
Salaries/Benefits		640,186		20	%		458,780		29	%		174,922
Contractors		1,018,742		32	%		423,593		26	%		584,832
Travel & Entertainment		180,025		6	%		86,954		5	%		93,071
Marketing Activities		206,978		7	%		115,137		7	%		91,841
Accounting & Tax		166,559		5	%		173,969		11	%		(7,410	)
Legal		266,974		8	%		42,227		3	%		224,747
Facilities		310,574		10	%		143,129		9	%		167,445
Miscellaneous		378,041		12	%		163,883		10	%		214,157
Total operating expense		3,168,078		100	%		1,607,672		100	%		1,543,605

RESEARCH AND DEVELOPMENT– Research and Development expenses consist primarily of salaries and related personnel costs and independent, work-for-hire fees associated with product development.  Research and Development expenses were $243,833 and $764,282 for the years ended December 31, 2005 and December 31, 2006, respectively.  This 213% increase in year over year costs was due to the increased commitment in development activities associated with the delivery of new comic book titles and books on multiple platforms.

DEPRECIATION AND AMORTIZATION EXPENSE– Depreciation and Amortization expenses increased $66,050 year over year, from $7,436 for the year ended December 31, 2005 to $73,486 for the year ended December 31, 2006.  This 888% increase consisted of $30,435 in amortization expense related to other assets which were $0 in 2005 and $35,615 in increased depreciation expense due to additional investments in computer equipment, software and furniture and fixtures.

GAIN/(LOSS) ON DISPOSTION OF ASSETS– In the year ended December 31, 2006, the Company took in a one-time charge of $33,260 as a result of a physical inventory taken as part of the move to its new facilities.

INTEREST EXPENSE– Interest expenses remained essentially flat year over year with $390,288 for the year ended December 31, 2005 versus $391,745 for the year ended December 31, 2006.  This interest expense is primarily due to servicing the interest on debt obligations used to fund the company operations.

OTHER EXPENSE– The Company had a one-time expense of $25,000 during the year ended December 31, 2006 to write-off a deposit related to a potential acquisition target which the Company elected to not consummate.

NET LOSS BEFORE INCOME TAXES– As a result of the factors described above, we reported a net loss before income taxes of $2,080,915 for the year ended December 31, 2005 compared to a loss of $4,272,780 for the year ended December 31, 2006.

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LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2007, we had a cash balance of $423,256 and negative working capital of $1,202,574.  Effective July 1, 2007, the Company and Scott Rosenberg executed an agreement by which $1,625,000 in debt (principal of $258,153 Short-term and $1,366,847 Long-term), plus accrued interest of $95,858 were paid off through the issuance of common stock and warrants.  In addition, management believes it will not have to pay the $745,850 principal in Short-term debt also due to Mr. Rosenberg, during 2007 unless the Company can generate sufficient revenues from normal operations and will be allowed to pay interest only on this loan for the remainder of 2007.  These two actions would eliminate the $1,004,003 debt obligation identified as a cash requirement during 2007 and materially improve the working capital position of the Company.  Management does believe there will be an increase in overall expenses to expand the Company’s operations during 2007 and although revenues are expected to increase, it is anticipated that additional cash resources will be required during the next twelve months.  We are currently projecting operational cash requirements of $2,400,000 over the next six months and may undertake additional debt or equity financings to meet these or future long-term needs to better enable us to grow and meet our operating and capital requirements.  However, we cannot guarantee that any additional equity or debt financing will be available in sufficient amounts or on acceptable terms when needed.  If such financing is not available in sufficient amounts or on acceptable terms, our results of operations and financial condition may be adversely affected.  In addition, equity financing may result in dilution to existing stockholders and may involve securities that have rights, preferences or privileges that are senior to or common stock, and any debt financing obtained must be repaid regardless of whether or not we generate profits or cash flows from our business activities.

Net cash used in operating activities was $2,359,870 for the six months ended June 30, 2007 as compared to $1,133,028 for the six months ended June 30, 2006, an increased cash requirement of $1,226,842 or 108.3%.  The increase in net cash used in operating activities is primarily the result of our increased staffing, investment in research and development, and enhanced marketing activities to expand our sales channels.

Below is a description of significant financings we completed during the fiscal year ended December 31, 2006.

OCTOBER 2006 FINANCING

In October 2006, we entered into Subscription Agreements with various accredited investors (the “October 2006 Private Placement”) pursuant to which the investors subscribed to purchase a total of 49,047,250 shares of our common stock, resulting in proceeds to the company of $4,904,725, less offering costs of $217,312.  The offering closed on April 30, 2007.  In connection with the offering, we agreed to use our reasonable best efforts to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock sold in the private placement within 180 days following the closing of the offering.

We agreed to use our reasonable best efforts to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock sold in the private placement on or prior to 180 days following the closing of the offering.

Midtown Partners, registered broker-dealer, acted as placement agent for a portion of the common stock sold in the offering.  In connection with the closing we paid the placement agents a cash fee of an aggregate $32,102.  In addition, the Company issued to the placement agent 458,600 warrants to purchase shares of our common stock with an exercise price of $0.10 per share exercisable for a period of five years. The shares underlying the warrants are not included in this prospectus.

We claim an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.

GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  Since Platinum Studios, Inc.’s inception, we have incurred losses, had an accumulated deficit, and have experienced negative cash flows from operations.  We expect this trend to continue.  The expansion and development of our business will likely require additional capital.  This condition raises substantial doubt about our ability to continue as a going concern.  We expect cash flows from operating activities to improve, primarily as a result of an increase in revenues, although there can be no assurance thereof.  The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.  If we fail to generate positive cash flows or obtain additional financing when required, we may have to modify, delay or abandon some or all of our business and expansion plans.

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OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity, or capital expenditures.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The policies discussed below are considered by our management to be critical to an understanding of our financial statements because their application places the most significant demands on our management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain.  Specific risks for these critical accounting policies are described below.  For these policies, our management cautions that future events rarely develop as forecast, and that best estimates may routinely require adjustment.

The SEC has issued cautionary advice to elicit more precise disclosure about accounting policies management believes are most critical in portraying our financial results and in requiring management’s most difficult subjective or complex judgments.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments and estimates. On an on-going basis, we evaluate our estimates, the most significant of which include establishing allowances for doubtful accounts and determining the recoverability of our long-lived assets.  The basis for our estimates are historical experience and various assumptions that are believed to be reasonable under the circumstances, given the available information at the time of the estimate, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources.  Actual results may differ from the amounts estimated and recorded in our financial statements.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Reclassification:  Certain prior year amounts have been reclassified in order to conform to the current year’s presentation.  In 2006, the Company transitioned into a new accounting system that allows for a more detailed analysis of project expenses and revenues.  Financials from earlier years have been reclassified to account for this transition.

Revenue Recognition:  The Company derives its licensing revenue primarily from options to purchase rights, the purchase of rights to properties and first look deals.  For options that contain non-refundable minimum payment obligations that are not applied to the purchase price, revenue is recognized ratably over the option period, prior to the collection of all amounts ultimately due, provided all the criteria for revenue recognition under SAB 104 have been met.  Option fees that are applicable to the purchase price are deferred and recognized as revenue at the later of the expiration of the option period or in accordance with the terms of the purchase agreement.  Revenue received under first look deals is recognized ratably over the first look period, which varies by contract provided all the criteria for revenue recognition under SAB 104 have been met.  First look deals that have contingent components are deferred and recognized at the later of the expiration of the first look period or in accordance with the terms of the first look contract.

For licenses requiring material continuing involvement or performance based obligations, by the Company, the revenue is recognized as and when such obligations are fulfilled.  The Company records as deferred revenue any licensing fees collected in advance of obligations being fulfilled or if a licensee is not sufficiently creditworthy, the Company will record deferred revenue until payments are received.  License agreements typically include reversion rights which allow the Company to repurchase property rights which have not been used by the studio (the buyer) in production within a specified period of time as defined in the purchase agreement.  The cost to repurchase the rights is generally based on the costs incurred by the studio to further develop the characters and story lines. Reversion rights have no impact on the revenue recognition nor timing of the revenue recorded, not is any portion of the revenue deferred.

Character development costs:  Character development costs consist primarily of costs to acquire properties from the creator, development of the property using internal or independent writers and artists, and the registration of a property for a trademark or copyright.  These costs are capitalized in the year incurred if the Company has executed a contract or is negotiating a revenue generating opportunity for the property.  If the property derives a revenue stream that is estimable, the capitalized costs associated with the property are expensed as revenue is recognized.  If the Company determines there is no determinable market for a property, it is deemed impaired and is written off.

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Recent accounting pronouncements:   In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainly in Income Taxes” (“FIN 48”).  FIN 48 applies to all tax positions related to income taxes subject to SFAS 109, “Accounting for Income Taxes”.  Under FIN 48 a company would recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position.  FIN 48 clarifies how a company would measure the income tax benefits from the tax positions that are recognized, provides guidance as to the timing of the de-recognition of previously recognized tax benefits and describes the methods for classifying and disclosing the liabilities within the financial statements for any unrecognized tax benefits.  FIN 48 also addresses when a company should record interest and penalties related to tax positions and how the interest and penalties may be classified within the income statement and presented in the balance sheet.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  For Platinum, FIN 48 will be effective for the first quarter of fiscal 2007.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections , which replaces APB No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements . SFAS No. 154 requires that a voluntary change in accounting principle be applied  retrospectively  with  all prior period financial statements presented as if the new accounting principle had always been used. SFAS No. 154 also requires that a change in method of depreciating or amortizing long-lived non-financial assets be accounted for prospectively, in the period of change and in future periods, if applicable, as a change in estimate, and requires the correction of errors in previously issued financial statements be termed a “restatement”. SFAS No. 154 is effective for accounting changes and correction errors made in fiscal years beginning after December 15, 2005.  The implementation of SFAS 154 is not expected to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, which amends APB Opinion 29 (APB 29), Accounting for Nonmonetary Transactions . The guidance in APB 29 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged and included certain exceptions to that principle. SFAS No.153 amends APB29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. This Statement will be effective for the Company for nonmonetary asset exchanges occurring on or after January 1, 2006.

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BUSINESS

INTRODUCTION

Our Company was formed and operated as a California limited liability company from its inception on November 20, 1996 through September 14, 2006.  On September 15, 2006, we filed with the State of California to convert Platinum Studios, LLC into Platinum Studios, Inc., a California corporation.

Our corporate website address is www.platinumstudios.com. Our website and the information contained on our website are not incorporated into this prospectus or the registration statement of which it forms a part. Further, our references to the URLs for this and any and all other company-owned websites (including www.platinumstudiosmobile.com, www.drunkduck.com, www.platinumstudioscomics.com, www.PlatinumStudiosComics.com, store.platinumstudios.com, www.pt78mobile.com,) are intended to be inactive textual references only.

We are a comics-based entertainment company.  We own the rights to a library of over 3,800 of comic book characters, which we adapt and produce for film, television and all other media. Our continually expanding library consists of characters that have appeared in comics in 25 languages and in more than 50 countries. Our library of comics-based characters spans across multiple genres and multiple target audiences. Not only have we developed many of our characters in-house, but we have also aggregated content from several third-party comics publishers, acquiring the rights to use these characters via all media except print publishing.  We believe that the size of our library gives us a competitive edge over other comics-based libraries, as we will be able to go to market quicker with new opportunities to exploit our characters, such as electronic comics.

We seek to be a leader in producing entertainment content for all platforms including film, television, direct-to-home, publishing, and digital media based on comic book characters providing new merchandising vehicles across all retail product lines.  By combining our character commercialization strategy with our extensive storytelling, packaging, and corporate management abilities, we seek to build a strategically diversified and profitable character-based entertainment business.

We believe our library has broader audience appeal than other comic character companies whose libraries comprise primarily of the traditional superhero characters. Our library includes characters that span all story genres, including science fiction, fantasy, horror, mystery, romance, comedy, crime, action/adventure, and family.  While our library includes superhero characters, management believes this broad spectrum allows us to be protected by any unforeseen downturn in audience reaction to any single genre.

In addition to a broad universe of more than 1,000 characters developed in-house, we also acquired the rights to the characters and storylines of Italian-based, SBE Publishing’s Horror/Sci-Fi Universe and French-based, Hexagon Comics, as well as U.S.-based Top Cow and Barry Wean. We believe that this library gives us an established international audience for our media exploitation plans. In addition to the international exploitation of these properties, there are significant other benefits to our relationships with SBE and Hexagon Comics, including providing us with the advantage of owning all content created, without the burden of overhead to run extensive publishing entities, thus providing us with a constant source of new material. As our publishing partners expand their library, our character and story lists expand as well.  Our management believes that our strategy provides numerous synergies, including:

· Development of individual character franchises by leveraging feature films, television programming, Internet/wireless, licensees, promotional partners, and advertisers.

· Development and introduction of new characters, planted spin-offs and tie-ins with branded characters.

· Reduced marketing and promotions costs by cross marketing the characters through different distribution media.

· Interactive feedback from various affiliated and co-branded online destinations.

We believe that our strategy will offer the ability to communicate with audiences from around the world providing market analysis from fan, industry and creative perspectives that gauge the appeal of new Characters and stories.

Library of Characters

Universe of Characters	Origins	# of Characters
SBE Horror / Sci-Fi	Europe	1,000 + (ongoing)
Awesome Comics	North America	500 + (ongoing)
Top Cow Comics	North America	300 + (ongoing)
Hexagon Comics	Europe	600+ (ongoing)
Platinum Studios Macroverse	Worldwide	1,000 + (ongoing)
Platinum Studios Acquisitions	Worldwide	400+ (ongoing)

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SBE Horror/Sci-Fi

This library comprises of the following characters:

·   Characters: 1,103

Dylan Dog acquired from SBE:  319 characters

Legs Weaver acquired from SBE:  271 characters

Nathan Never acquired from SBE:  456 characters

Barry Ween acquired directly from creator:  57 characters  

Our rights:We have all rights worldwide, not including print comic publishing rights.  We acquired all rights to all characters in the Barry Ween property and there is no reversion of rights.  On the SBE properties, we have acquired all right, title and interest in and to all 3 properties (Dylan Dog, Legs Weaver, Nathan Never), excluding only comic book print publication rights.  The Company originally had 10 years in which to produce a motion picture or television program based on these properties to preclude a reversion of rights.  This 10-year period expired July 2, 2007.  However, the rights do not revert until Platinum receives notice of reversion, which we have not received as of this date.  Even if such notice is received, the Company effectively has 14 months from the date of such notice to commence principal photography on a picture, whereupon reversion rights would be terminated.

Awesome Comics/RIP Media

·   Characters: 516

Our rights: We have all rights worldwide, not including print comic publishing rights. Currently, we have the exclusive right to enter into agreements related to the licensing of motion picture rights and allied/ancillary rights until the date upon which Platinum Studios’ CEO, Scott Mitchell Rosenberg is no longer at least one of the following: (a) an executive officer of the Company; (b) a member of the Board of Directors of the Company, or (c) holds at least 30% of the outstanding capital stock of the Company.

Top Cow

·   Characters: 546

Our rights: We have all rights for film and television worldwide. Publishing is excluded and certain non-film ancillary rights subject to preexisting deals (certain properties only) are also excluded.  Currently, we have the exclusive right to enter into agreements related to the licensing of motion picture rights and allied/ancillary rights through January 30, 2010. If we pay an additional $350,000 on or before June 30, 2010, these rights are extended through January 30, 2011.

Hexagon Library from Mosaic Multimedia

·   Characters: 703

Our rights: We have all rights worldwide, not including print comic publishing rights, contingent on verification of chain-of-title and European legal documentation (on completion of paperwork, Platinum will have a long-term, exclusive option, with provision to buy out all restrictions and third-party approvals). Currently, we have the exclusive right to enter into agreements related to the licensing of motion picture rights and allied/ancillary rights through January 1, 2014.  If we pay $196k on or before January 1, 2011, we then have until January 1, 2016. If we pay $600,000 by January 1, 2016, we then have the right in perpetuity.  The agreement requires the formation of an LLC that is co-owned by Mosaic Multimedia and Platinum Studios with Platinum acting as manager.  Company will move forward on formation of the LLC when it appears likely that exploitation will occur on one or more of the properties. 

Recent Developments

Print Publishing

After launching our first graphic novel in December, 2006, we have published over 30 comic books and graphic novels for distribution through traditional domestic channels.  In July, 2007, we began developing an international channel for worldwide print distribution.  We entered a co-production deal with KISS Catalog to produce a new line of comic material based on the 1970’s legendary rock band, KISS, that includes a 50% ownership in all material derived from this comics line for exploitation in other merchandise and licensing opportunities.

Digital Publishing

Since the 3 ^rd quarter of 2006, we have launched an online “e-commerce” store to sell merchandise, comic books and other products (store.platinumstudios.com), an online comics site to highlight the printed comics and graphic novels ( www.platinumstudioscomics.com ), a mobile storefront for distribution of digital content ( www.platinumstudiosmobile.com ), a web-comics site to host the digital distribution of our printed comic material and as a resource for independent comics creators to post new material ( www.drunkduck.com ) and we have developed multiple destination sites for individual comic properties. This digital publishing group has also created digital images that consumers can download to their mobile phones and personal computers for wallpapers and screensavers.

Filmed Entertainment

We currently have film and television development deals with several major film producers and in 2007, we successfully sold one property, Unique, to Disney Studios, with the anticipation that it will go into production in 2008.  Additionally, in June, 2007, we entered into negotiations on a 2-year option agreement with Dreamworks, Universal Studios, Paramount Pictures, and Imagine Entertainment to acquire the film production rights to our property Cowboys & Aliens , the #1-ordered graphic novel in the U.S. in 2006 (Entertainment Weekly, January, 2007) with the goal to produce a feature film. This film’s production schedule has not been officially set yet but it is anticipated to begin pre-production sometime within the next 24 months.  In 2006, we entered into a co-production and distribution deal with Arclight Films to produce a slate of 8 feature films based on a number of our properties over the next 3 years.  We are currently in contract negotiations with various talent on our first film from that slate, Dylan Dog: Dead of Night and we hope to begin production in 2008.

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Merchandise/Licensing

In addition to the KISS Comics line as mentioned above, we have created a line of apparel called Number Zero Limited that takes a unique approach to t-shirt and other clothing design, highlighting images from comics on the outside of the shirt and additional story material printed on the inside.  We are negotiating with console and pc-based video game developers to create games based on our material and we are exploring a number of toys and other merchandise opportunities.  We have extended our branding philosophy to include our annual “Comic Book Challenge”, a competition that allows independent creators to pitch original comic book ideas to a panel of live judges.  The winning contestant gets a publishing deal with revenue sharing across all distribution outlets.  In 2007, we signed a 3-year corporate sponsorship deal with AT&T and secured other sponsorship arrangements with 5 other corporations to underwrite the event and expose the Company to a wide audience.

Industry Overview

The comic book market is highly sought after by the entertainment industry for the purpose of mining for new material.  As proof of this appeal, two recent trade articles have pinpointed the virtues of comics publishing as a credible source of new material in Hollywood.  Daily Variety and Hollywood Reporter have each reported separately that the big moneymakers are fresh concepts and comicbooks. “Among the better averages were pics based on comicbooks: There were only 13 such films, and the $2.8 billion total means that each comicbook hit averaged a $215 million gross.  Which explains why Hollywood is so hot to film comicbooks.” (“How to make box-office gold”, Marc Graser, Daily Variety 7/6/07).

Additionally, IDT Internet Mobile acquired comics publisher IDW in a recent transaction as reported July 24, 2007.  According to Daily Variety, the reasoning behind this acquisition was to give IDT the ability to “take IDW’s properties and sell them to traditional film and television outlets and it will develop them for new media platforms.” IDT was recently acquired by John Malone’s Liberty Media in 2007, marking an expansion of a traditional telco into the content development and media industry.  (“IDT buys comics publisher IDW”, Steven Zeitchik, Daily Variety , 7/24/07).

It was also reported in July, 2007 that UK-based sales, production and finance house Intandem is embarking on a “new corporate strategy by acquiring a 5% stake in Los Angeles-based comic book publisher Radical Publishing and sister movie company Blatant Pictures, providing the company with another source of quality commercial product for studios and top distributors.” (“Intandem has Radical idea for content”, Stuart Kemp, Hollywood Reporter , 7/17/07).  These industry announcements all support our contention that comic-books and graphic novel publishing is a viable source for multiple forms of media exploitation.

Print Publishing

Every project we publish is designed for eventual adaptation to other media, including film and television.  Our core business model focuses on the exploitation of our characters in all media.  We license our characters and stories for domestic and/or international comics publishing.  In some cases, we produce our own publications under the “Platinum Studios Comics” label, but we also have agreements with other publishers and original copyright holders whereby our agreement provides for these parties to continue publishing comic books, generating new characters and stories which are added to our ever-growing library of material.  Under these agreements, the publisher retains the publishing rights and generates ongoing serial publications, maintaining large staffs within their publishing and distribution organizations to achieve these goals.  We benefit tremendously from this relationship as all new characters and story lines generated from new publications are added to our library, without the burden of carrying an entire publishing and distribution staff.  One such example of this arrangement is the Bonelli Publishing library from Italy, which has been producing comic books in printed form for over 50 years.  Popular characters from the Bonelli library include Nathan Never, Legs Weaver and Dylan Dog. Pursuant to our agreement with Bonelli Publishing characters which they develop are added to our library.

Print Publishing Schedule

After a successful launch of our inaugural graphic novel, Cowboys & Aliens, in December, 2006, we have established a steady schedule of 23 books with an additional 20 titles to be published before the end of 2007. These titles have are all published under the Platinum Studios Comics banner and they are sold directly to comic book stores through the industry’s sole distributor, Diamond Distribution.   The writers and artists of these titles are hired on a work-for-hire basis.

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Distribution Model

We currently have four distribution channels to sell our products: (1) direct to comic book stores, (2) online, (3) traditional book retail stores, and (4) international distributors.

All products offered directly to the thousands of comic book retailers throughout the United States must be listed through Diamond Comic Distributors.  Diamond was established in 1982 to provide comic book specialty retailers with wholesale, non-returnable comic books and related merchandise. Diamond has a vast network of strategically-located Distribution Centers throughout the world.

Currently, we have a distribution agreement with Top Cow Productions to list our titles in Diamond’s wholesale catalog for retail comic book stores. By capitalizing on Top Cow Production’s long-standing relationship with Diamond, we have been able to procure better placement in this wholesale catalog.  To date this has been our primary distribution chain; however, as an adjunct to our Top Cow Productions arrangement, we have also recently established a direct contractual relationship with Diamond for the listing of our properties, giving us more flexibility regarding the types and number of products we offer to this direct market.

We also distribute our products to consumers and retailers via our Web store and comic book site ( www.PlatinumStudiosComics.com ). The site allows the comic book fan to get a closer look at the books, the creators and sample artwork.  We have also created a strategy of launching the published book online, updating one page per day, giving the readers and fans a place to preview the book and communicate with the creators one-on-one via our webcomic hosting site, DrunkDuck (www.drunkduck.com).

We also distribute our products through established distribution companies, such as our current arrangement with Ingram.  Ingram has agreed to distribute our KISS 4K books to book stores and libraries.  Currently, they distribute to Borders, Barnes & Noble, Hastings and newsstands.  Ingram Book Company is the leading wholesale distributor of book product.

Finally, we have recently established relationships with international publishing entities to distribute translated versions of our completed series of comic books to over 100 countries throughout the world.  These publishers generally pay advances against sales royalties without charging for translations and/or printing, making this distribution option a significant way to offset the costs of the domestic distribution chain.

Digital Publishing

We have established ourselves as a leader in comics-based entertainment, and continue to build our already substantial library of characters and storylines.  We are currently pursuing a strategy to leverage our momentum in the entertainment space and commercialize our intellectual property through the most viable media outlets and channels, including the online content space.

Our Digital Publishing Division’s mission is to leverage our library of intellectual property across multiple online channels and distribution platforms, and create an online community for fans of comic-based entertainment in all media.

We plan to aggregate several online comic properties and develop an online comics “portal,” where we can further interact with the comic-creator and -fan communities via content, reference information, community tools and other interactive features.  By engaging the community through this network/portal strategy, we believe we will increase our volume of property, story and character submissions, promote our online and offline properties, track key trends in the comic entertainment space and continue to brand the company with the comic fan base. Revenues for this portal will be derived from advertising and sponsorship and intelligently monetized through tie-ins, merchandise and other long-tail strategies.

Online Comics Community / Portal

In 2006, we acquired Drunk Duck (www.drunkduck.com), an online web comic community boasting over 3,000 strips and 10 million monthly page views. Since the acquisition, we implemented several programming and feature upgrades to enhance the functionality and user-friendly interface of Drunk Duck, including a new section for print publishers to post their printed works online as well.  In less than one year, we have seen increased numbers across the board for Drunk Duck, where as of June 30, 2007, the site hosts over 8,000 strips/stories and the monthly page views now exceed 30,000,000.

Our ongoing strategy is to create a network of sites dedicated to the online comic genre (which includes web based comic strips similar to the traditional newspaper format, online comic books and graphic novels, and streaming/electronic comics) anchored by Drunk Duck.  The goal is to aggregate the comic fan base across the internet, monetize the traffic through subscriptions, advertising and sponsored content, embedded product placement, licensed exploitation opportunities and casual gaming, as well as provide an access point for the Company to launch and promote its properties and characters in all forms of media – print, film, television, mobile/wireless and gaming.

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We have identified several additional key sites as potential acquisition targets covering specific aspects of the community – original comic content, industry news, historical comic reference material, fan sites – which will be combined to create a grassroots network that speaks directly to the comic book fan-base.  By employing a technique known as a “hat”- a branded identifying navigational tool commonly found across of the top of the page (i.e. Slate.com and Fox.com are part of the MSN.com network, and MSN.com’s navigational “hat” appears across the top left of each), we believe we can combine several of these sites to form a comic content network.  The focal point of this network will be Drunk Duck which will feature our streaming electronic comics, supported by daily content updates and comic strips, industry news provided by Broken Frontier, interviews, games, podcasts, fan involvement (blogs; forums; wikis; profiles of fans and comic creators), contests, etc.

Our network of online comic sites will speak directly to the fan community and strive to offer fans a sense of ownership in the properties, with editors for much of the content selected from the fan base itself. We intend to take this one step further, where the best fan writers would be welcomed onto the official staff, creating an “it can happen to you” feeling among the loyal followers, thereby deepening their attachment to a series.

Of significant value to us is the ability to monetize the traffic generated across the entire network through several avenues, including subscriptions, advertising and sponsored content, embedded product placement, and licensed exploitation opportunities.  Each of these revenue streams can be active on every site within the network, as they work to drive traffic to one another, further maximizing the revenue potential of every visitor.  As the characters and stories themselves begin to establish a broader audience, additional revenue streams such as licensed products, merchandising and additional media outlets become viable options.

Casual Games

Due to a renewed interest in retro arcade games like pac-man, asteroids and centipede, as well as new titles inspired by retro games, card and board games, puzzle games and the like, a new gaming sector, often collectively referred to as “casual games,” has evolved. The category is loosely defined as games with simple rules, that are easy to learn and can be played in very small increments of time – perfect for a 5-10 minute break at work. The most prevalent casual game genres today are puzzles, word games, and casual-action games, followed by tile/card and board games.

Our Drunk Duck portal includes a casual gaming section, with a variety of games featuring characters and story lines from our library.  We are in discussions with leading game developers to “re-skin” an assortment of casual games with our properties (i.e. changing the cosmetic nature of the game characters without changing the underlying software of the program), and we are evaluating several ways to monetize this product. In the past few years, the dominant business model for targeting the casual games audience was offering free online games that were monetized by advertising and sponsorships. A number of business models have now emerged, including fee-based downloadable games, premium online subscription services, skill-based gaming tournaments, in-game advertising and free game play supported by video advertising and sponsorships.

Digital Studio Model

We are in the process of creating a “digital studio,” which management believes will be positioned to exploit our intellectual property across the web and expand our audience for comic-based entertainment. Content developed through the digital studio will be tailored to current and burgeoning web distribution platforms, including electronic comics, streaming video/video-on-demand, and instant messaging, and distributed through partnerships with online portals such as AOL, MSN, Google, and Yahoo!, all of which are aggressively pursuing content plays via in-house development, acquisitions and joint ventures.  In addition, we will exploit the rapidly growing world of wireless/mobile content.

Following the lead of our broadcast entertainment studio model, our Digital Publishing team will develop several series of “tentpole” electronic comics based on characters from our intellectual property library, which combine the best elements of animation and comics. These electronic comics will be roughly 3-5 minutes in length, merging the unique visual animated template of comics with top-flight directing, writing, editing and voicing, all created to fit with the viewing habits of online users in the target demographic.

The distribution platform for our electronic comics includes establishing relationships with the online entertainment content portals and search destinations such as AOL, MSN, Yahoo and Google.  These portals will utilize the content within their entertainment channels, and revenues will be derived through advertising and sponsorship, managed by each individual portal.  With the continuing evolution of web-based video content delivery, broadband penetration to the home and the forecasted growth in online ad spending, this will provide Platinum with a significant revenue stream. Additionally, by providing content through any of these partners to their vast audience, the Company believes it can generate significant exposure for many of its properties and characters.

Online content/streaming content models have shifted in recent years, however ad supported and subscription models are still recognized as the most lucrative and cost-effective. There has been an upswing in the downloadable content model (i.e. – iTunes, Rhapsody, Google’s Online Video Store) in late 2005 and early 2006, and we will continue to explore these and other avenues for the distribution of content created by its digital studio.  One of the strongest components of the digital studio as part of the Company’s overall Digital Publishing Division initiative, is its ability to be self sustaining – expending capital and resources to produce the content, and generate revenue by licensing that content across the web through multiple destinations and partners.

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Drunk Duck itself will provide us with not only an online destination for fans of the comic genre, but also a distribution platform for content developed in the digital studio. Furthermore, this also provides a place where new stories and concepts can be critiqued and fine-tuned by an audience who not only knows the genre, but also begins to feel a sense of involvement and ownership as they contribute to the evolution of their favorite characters.

Mobile/Wireless Distribution

In June, 2006, we began pursuing a strategy to leverage our momentum in the entertainment space and commercialize our intellectual property through the most viable media outlets and channels, including the wireless and mobile content space. Our Wireless/Mobile Content group mission is to leverage our library of intellectual property across multiple mobile distribution platforms and further expand the audience for our characters and stories.  Through affiliations and partnerships with mobile content developers, syndicators, and distributors, we intend to make available an array of downloadable content, including ring tones, wallpapers, and games, featuring characters, icons and concepts from our library of characters.  We believe that utilizing the internet as a key access point to reach the mobile customer will keep production and overhead costs to a minimum and develop a very robust revenue stream.  In addition to the potentially lucrative revenue stream from the sale of each phone and service contract, we will gain an additional point of contact to reach a dedicated fan base for specific properties. The subscriber base can be offered exclusive content, promotions, early access to other media properties, and other key benefits to keep them engaged with our various content offering.

As a mobile content provider, we will focus primarily on the delivery of content in various forms, including downloadable images, ringtones, voicetones, wallpapers, video, animation, games, and interactive applications (such as e-mail, web browsing, SMS and instant messaging) to a range of wireless devices.  This will be achieved through partnerships with Mobile Content Syndicators, who aggregate and package content from multiple providers and distribute it through alliances with various channels or portals.

Filmed Entertainment:  Feature Films

We are aggressively pursuing a multi-pronged approach to create feature films:

· Licensing characters and stories to third-party producers and/or affiliated major studios for production

· Secure outside financing to produce our own slates of films

Licensing Deals

Some examples of our current projects with major studios based on previously unbranded characters include:

· Unique (Disney) - Based on a comic book series released in early 2007, Disney acquired the film rights to this project and tentative production schedule is set for sometime in 2008.

· Cowboys & Aliens (Dreamworks/Paramount/Imagine/Universal) – In June, Dreamworks agreed to option our property for development and production for joint distribution through Paramount and Universal with Imagine Entertainment as a producing partner.

Production Slate Financing

As an alternative to licensing properties to studios, independent financing arrangements are becoming more prevalent in the entertainment industry.  While there are many ways to finance films, one of the options is to create an Intellectual Property-Backed Securitization vehicle to facilitate the funding efforts.  The structure is designed to (1) isolate the Intellectual Property assets needed for the production and exploitation of theatrically released films into a bankruptcy-remote vehicle, thus protecting the financial integrity of the Company from potential adverse performance of the picture slate, and (2) mitigate the performance risk across a number of films through structural credit enhancements.

The vast majority of issuance by dollar volume has occurred in the film industry because film catalogs represent large, predictable assets with clearly defined historical cash flows and relatively little variance. Similarly, future flows transactions backed by film catalogs tend to show less volatility as the film industry has followed the same pattern for many years where a few blockbusters (perhaps 5% of the total releases) finance the rest of the releases. This “all or nothing” type of economics, where the few hits pay for the many flops, works well for slates because the catalogs behave like a portfolio of assets whose diversification smoothes the volatility of revenues.

Intellectual property backed securitization is a recent phenomenon and the total market to date remains relatively small.  In 1997 there were $380 million in known IP backed securitization transactions. In 2000 there were $1.13 billion. The total known transaction volume in those years was greater that $2 billion.  The total asset value of patents worldwide is estimated to be many trillion dollars. (Source: Bernhard H. Fischer, “New Patent Issue: BioPharm Royalty Trust”, “From Ideas to Assets: Investing  Wisely in Intellectual Property”, Bruce Berman (editor), (New York, John Wiley & Sons, Inc.)  p. 484).

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We are working with Havenwood Media LLC and Arclight Films to arrange a financing slate of eight low-budget (between $6 and $12 million) motion pictures intended for theatrical release.  Together with Arclight, we will put together a combination of equity, tax incentives and other financing to fully fund the production of these films.

Along with our partners, Arclight and Havenwood, we have identified the following eight (8) properties for our current slate (although various circumstances may require us to substitute alternative titles for those listed):

· Witchblade

· The Darkness

· Dead of Night (from Dylan Dog )

· The Hunter

· Ghosting

· Hive

· Mal Chance

· Blood Nation

Our first project in this slate, Dead of Night , is in early stages of pre-production as of August 27 as we are in final negotiations with key talent.  We anticipate production to begin the first quarter of 2008.  The second film identified for potential 2007 production schedule is Ghosting .   In addition to this current slate with Havenwood and Arclight, we are reviewing additional slate opportunities such as direct-to-home video slate and genre-specific, low-budget slates.

Filmed Entertainment: Television                                                                

In television, we intend to (1) continue our strategy of licensing our characters and stories to third-party producers for sale to broadcast and cable television networks: and (2) secure third-party financing to produce our own specials and series .

Licensing Deals

We are currently working with several well-known producing partners in order to help bring other characters to the small screen as follows:

· Film 44 Peter Berg ( Friday Night Lights ) is directing and Raphael Alverez ( The Wire )   is writing the hour-long drama, Down, for NBC Universal/Television Studio based on the Top Cow Productions property by Warren Ellis.

· Raimi-Donen Sam Raimi ( Spider Man 1, 2 & 3 ) is developing Rising Stars , by J.M.S. ( Babylon 5 ) as a mini-series.

· Roundtable Entertainment Gina Matthews ( 13 going on 30 ) and Phil Stark ( Dude, Where’s My Car ) are working   to develop Utopia , a single-camera half-hour sitcom for 20 ^th Century Fox.

Merchandise/Licensing

We recognize a targeted merchandising and licensing strategy can produce significant revenues from characters who build their audience / fan base through any form of media exploitation – feature film, television, home video/DVD, print, online, wireless and gaming. We will seek to develop relationships with category leaders to help secure more retail support, increase the distribution of its products, and make us a key franchise for our licensees.

Licensees recognize the potential that comic based properties afford them in diversifying their retail mix with lines for multiple characters within one story, and, in so doing, expanding the potential consumer audience interested in their merchandise. It is not uncommon for a major theatrical release in the comic to film genre to secure over 50 licensees for an array of products, from action figures, games and trading cards, to party supplies, costumes, furniture, and packaged foods.

The opportunities within the merchandising and licensing arena for us are equally as wide ranging, including toys/games, collectibles, apparel, and numerous consumer goods.  We will pursue opportunities via the following channels:

· General merchandising agreements with third parties in each major territory where films, television and new media will be released.

 · Collectible merchandising: cultivating the worldwide collector market by allowing licensees in other countries to break with the normal tradition of shipping only within their territory. In these agreements, we will allow such licensees to ship product to special retailers who have partnership arrangements with the Company. These items will carry a double royalty: the original royalty from the licensee and the additional royalty from the retailer allowed to carry the material.

 · The licensing of the Characters for customized advertising campaigns and/or media purchase campaigns.

 · Leveraging individual partners and licensees’ efforts together globally and locally to create critical mass, including promotions, contests, and third-party advertising on radio, television and new media.

 · The leveraging of our relationships with hundreds of comic book publishers and distributors worldwide for the distribution of the Characters in print form.

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Collectibles Merchandising Strategy

Our collectible merchandising strategy will be an important area for income and branding. The collectible markets worldwide will be developed through the combination of an online and offline merchandising model.  We will establish merchandise-licensing arrangements that enable individual licensees’ ability to sell merchandise outside their territories through our distribution partners. Where licensees traditionally cannot cross borders to sell products available within their own licensed territories, we will establish a global capability for individual territory merchandise licensees to make their product available worldwide over our website (including co-branded and syndicated versions of the website).

KISS Comics Group Venture

Spinning off from the successful marketing empire of the 70’s rock superstars, KISS, KISS 4K is a multi-platform comic property that follows the adventures of superheroes based off the KISS band personalities.   KISS 4K is the first launch of the Kiss Comics Group, a 50/50 licensing venture with KISS.  Concepts developed in KISS 4K will be spun off into separate titles, which will include appearances by the members of KISS.  The comic lends itself to unique merchandising opportunities.   KISS 4K merchandising will target higher-end product, including clothing, collectibles, cell phone accessories and plug-ins and electronics.  Additionally, there are many opportunities for sponsors to dress/equip the characters with specific products within the comic.

Merchandise LicensingIndustry

According to License Magazine , character-based licensed products – which include entertainment, television and movie characters - generated more than $39B at retail in 2003. Licensed toy lines in the character category increased by more than 5% in 2003 to just over $5.6B ( NPD Group/FunWorld ).  Top action properties, including Spider-Man , Buffy the Vampire Slayer , The X-Men , Hercules , and Star Wars , have built lucrative licensing programs across all product categories. In fact, franchises such as Teenage Mutant Ninja Turtles, Star Wars Episode I , Toy Story , and even Barney have garnered over $1 billion sales each in the U.S. alone.  We are looking to expand our merchandise lines in ways that benefit our franchises beyond current licensing agreements.

Merchandise licensing can include various products including sporting goods, apparel, home furnishings, stationery, packaged goods, books, and more, but the largest segment in this industry is toys.  In the toy business, companies like Mattel and Hasbro may develop their own core brands that include characters and storylines to drive and support their toy lines. Often they look to third parties, including entertainment studios, video game companies, and book authors & publishers to bring popular storylines and characters to their products.

Through co-ventures, direct manufacturing, and merchandise licensing, we hope to expand our   franchises into a tactile world that extends consumers relationships with the characters and stories that they know and love. 

DESCRIPTION OF PROPERTY

Our offices are located at 11400 W. Olympic Blvd., Suite 1400, Los Angeles, CA  90064, and consist of approximately 12,400 square feet.  We entered into a five year lease for our offices which requires payments of $31,857 per month or minimum annual payments of $127,429 in 2006, $387,383 in 2007, $402,878 in 2008, $418,993 in 2009, $435,753 in 2010 and $298,147 in 2011. Our lease expires on August 31, 2011.

LEGAL PROCEEDINGS

We are not currently a party to any legal proceedings. There has been no bankruptcy, receivership or similar proceedings. 

There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.  As of the date of this prospectus, there are no material proceedings to which any of our directors, executive officers, affiliates or stockholders is a party adverse to us.

Employees

As of the date of this prospectus, we have twenty-two (22) full-time and eight (8) part-time employees. We have not experienced any work stoppages and we consider relations with our employees to be good.

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MANAGEMENT 

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The following table sets forth information about our executive officers, key employees and directors as of July 1, 2007.

Name	Age	Position
Scott Mitchell Rosenberg	44	Chairman & Chief Executive Officer
Brian Kenneth Altounian	43	President, Chief Operating Officer and Director
Jill Zimmerman	44	Director
Helene Pretsky	43	Corporate Secretary and General Counsel

__________________

Scott Rosenberg has been our Chairman since September 15, 2006 and Mr. Rosenberg served as the Chairman of Platinum Studios, LLC, our predecessor, since November 1996.   Mr. Rosenberg established Platinum Studios, LLC in 1996 following a successful, high-profile career in the comic book industry. As founder and head of Malibu Comics, Rosenberg produced the Men In Black comic book, which he took to Sony to become a billion-dollar film franchise. At Malibu, Rosenberg developed an innovative grass-roots marketing approach, reaching out directly to fans, retailers, and press to allow Malibu to be distributed alongside top industry players at a fraction of what the major companies spent—notably, in the pre-Internet age, without the opportunities and advantages provided by the web. Malibu’s marketing savvy and ability to create and develop new characters and new ideas led to a fierce bidding war to acquire the company, and in 1994 Malibu was bought by Marvel Comics. Mr. Rosenberg holds an undergraduate degree from the University of Denver.

Brian Altounian has been our Chief Operating Officer since June 2005 and was appointed to serve as President in September 2006. Mr. Altounian's background includes business development, finance, operations and administration and he has applied those skills to a variety of start-ups, Fortune 100 companies, and public and private organizations. Mr. Altounian has worked extensively in the entertainment and high-tech industries, the bread and butter of Los Angeles' commercial culture.

He currently sits on the Board of Directors of Cereplast, Inc. (CERP.OTC), a manufacturer of proprietary bio-based, renewable plastics, where he has served as the Audit Committee Chairman since May, 2005.  From August, 2004 through June, 2006, he sat on the Board of Directors of Machine Talker (MTKN.OTC), which has created a breakthrough technology in smart security wireless networks.  From May, 2003 through June, 2006, he sat as Chairman of the Board of Directors of XsunX, Inc. (XSNX.OTC), a developer of revolutionary thin film photovoltaic solar cell technology. His expertise is in the area of developing corporate infrastructure and assisting early-stage companies to execute on their business plans and grow, often through the access of capital through the public equity markets and from December, 2003 through June, 2007, he has provided advisory support to a number of these early-stage technology companies such as Warp9 (WNYN.OTC), Imaging3, Inc. (IMGG.OTC), BioSolar, Inc (BSRC.OTC), Carbon Sciences, Inc. (CABN.OTC) and Origin Oil, Inc. (private).  His first foray in the high-tech space came as Executive Vice President of Main Course Technologies, a wireless applications developer which he co-founded in January 2000 and ran until May, 2003.

Prior to his adventures in the high-tech arena, Mr. Altounian spent 12 years in the entertainment industry with a successful consulting practice, advising entertainment companies in the areas of finance, administration, operations and business development. His clients have included Disney Interactive, Two Oceans Entertainment Group, The Santa Barbara Grand Opera Association, International Documentary Association, In-Finn-Ity Productions and many others.  He also held senior management positions in-house at Lynch Entertainment, a television production company where he held the position of Vice President, Finance from January 1998 through December 1999;  Time Warner Interactive, a CD-ROM and interactive game company where he served as Vice President, Finance from July, 1995 – May, 1996; National Geographic Television, serving as Finance Director for this world-renown documentary film production company, specifically for the National Geographic Specials for the NBC Television Network from July, 1992 – June, 1996; and from 1987 through June, 1992, as Business Services Manager for WQED, the country’s first community-owned Public Television stations where he oversaw the finances and operations for numerous television documentary series.

Most recently, he was Consulting Producer on Random 1, a reality television series that debuted in November 2005 on the A&E Network and Executive Producer on the documentary feature film Lost in Woonsocket.  Mr. Altounian also recently founded a non-profit media organization, Lost & Found in America, Inc., where he currently sits as Chairman of the Board for this company that creates media projects that support local community-based non-profit groups serving underserved segments of the US population.

Mr. Altounian holds an MBA from Pepperdine University and an undergraduate degree from UCLA.

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Jill M. Zimmerman has been a director since September 16, 2006.  Since May 2005, Ms. Zimmerman has served as a Vice President at the Alford Group, a consulting firm based in Evanston, Illinois. Ms. Zimmerman previously served as a Crisis Program Supervisor and Director of Development at Alternatives, Inc. a not-for profit corporation from November 1994 through May 2005. Ms. Zimmerman holds a Bachelor of Arts from the University of California at Santa Barbara and a Masters degree from the University of Chicago.

Helene Pretsky has been our general counsel since January, 2006 and our corporate secretary and Executive Vice President since October 1 2006. Ms. Pretsky, a securities/corporate attorney with expertise in intellectual property, has focused her twenty-year legal career on representing start-up, early-stage revenue companies in the high-tech, emerging technologies and entertainment industries. Ms Pretsky was an associate at Brobeck, Phleger & Harrison from 1987 to 1994,  and associate at Kinsella, Boesch, Fujikawa & Towle from 1994 to 2000 where Ms. Pretsky provided the full range of corporate representation for private and public companies, including public offerings, private placements, mergers and acquisitions and preferred stock financings; complex patent, trade secret, copyright and trademark licensing and protection agreements; cooperative research, development and commercialization agreements; and domestic and international distribution and sales arrangements. From 2000 to 2005, Ms. Pretsky served as General Counsel and VP of Business Affairs of Virtual Fonlink, Inc., a cutting edge mobile payment services hardware and software solutions company, which she also co-founded.  Ms. Pretsky provided the full range of corporate and securities work for such company, including preparation and negotiation of private placements, technology development and license agreements and strategic partnership contracts with Motorola, Nextel, Sprint, SAfeNet and TNS. She was also instrumental in creating the company's overall business and intellectual property strategies.

Ms. Pretsky, a magna cum laude, Phi Beta Kappa graduate of the University of California, Los Angeles, received her J.D. from the UCLA School of Law, where she graduated in the top 15% of her class and was a member of its prestigious Law Review.

SIGNIFICANT EMPLOYEES

Norman “Hank” Lambert

Executive Vice President, Business Development and Operations

Hank Lambert came to Platinum as VP of Business Development in November 2006 and has served as Executive Vice President, Business Development and Operations since August 2007. From 1995 through 2006, as CEO of 3Notch, Inc., Mr. Lambert consulted with C-level executives and start-up entrepreneurs developing new strategic initiatives and business models for organizations such as Dot Hill Systems, TeraGlobal Communications, Universal Home Video, New South Federal Savings Bank, and Mother and Me. In addition to strategy development services, 3Notch, Inc provided implementation and execution strategies for their clients and shared in the revenue growth they generated.

Mr. Lambert has a BS degree in Business from the University of Alabama and his MBA from the University of Southern California.

Sean O’Reilly

Vice President, Publishing and Animation

Sean O’Reilly joined Platinum Studios as VP, Publishing & Animation in August, 2007.  In 2004, Sean created Arcana Studios, where he released five original comic titles, all of which have now been translated and distributed throughout the world.  The company won the Shuster Award for Outstanding Publisher, as voted by the retailers and readers throughout Canada.  Arcana Studio was nominated for a Harvey Award in its first year, a feat unprecedented in the quarter century tenure of the award.

Sean earned his B.Sc. in Biology from Simon Fraser University in Vancouver, B.C. Canada in 1997.  Sean received a second degree in 1999 with his B.Ed. from the University of British Columbia in Vancouver, B.C. and then completed his M.Sc. in Leadership and Administration at the University of Oregon in 2002. Sean is currently pursuing his Ph.D. in a Doctoral of Management Information Services and Technology.

Richard Marincic

Director of Film/Television Development

Mr. Marincic also worked in the literary management department of Management 360, whose client roster includes Toby Maguire, Reese Witherspoon, director James Mangold (Walk the Line), and director Frank Coraci (Wedding Singer). Mr. Marincic worked at the company from the day it opened the doors of its Beverly Hills offices until he started with Platinum Studios, in 2004.  He has worked in almost all aspects of the Film and TV business over the last decade including a stint as Associate Producer Bravo in 2003, Production Assistant for Spelling Entertainment in 2000 and various other production positions since June, 1999.

Mr. Marincic earned his Bachelors degrees in Television and Film Production as well as Theater from Southern Illinois University in 1999. He has also written and directed several plays in his hometown of Chicago.

Dan Forcey

Vice President, Content Development

Mr. Forcey has served as Platinum’s Vice President of Content Development since January of 2007.  Prior to that, he served as Platinum’s Communications Manager from December of 2002, coordinating their public relations efforts and managing multiple websites for the company, including the corporate site platinumstudios.com, the fan portal, jeremiahportal.com, and the Unique Experience alternative reality game. 

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For the past 10 years, Mr. Forcey has worked extensively across the United States and Canada as a stuntman, fight choreographer, and teacher of movement and stage combat and is a world-recognized expert in fencing and swordfighting. Mr. Forcey 's stunt work includes multiple television shows and feature films both in the U.S. and abroad, including Oscar-nominated movies like Master and Commander: The Far Side of the World, Flags of Our Fathers, and Letters from Iwo Jima. 

From 1997 through 2002, Mr. Forcey has held faculty positions at York University, the Centre for Indigenous Theatre, the University of Southern California, Cal State University, Long Beach, Cal Poly Pomona, and the Cerritos Center for the Performing Arts. During his various tenures, he has instructed students in acting, movement for actors, stage combat and clowning.

On 1996, Mr. Forcey graduated cum laude from the University of Southern California with an undergraduate degree in theatre with a minor in philosophy.   Mr. Forcey graduated Magna cum laude from York University while receiving his graduate degree in acting and movement, writing his master's thesis on the use of the British quarterstaff.

Zachary Pennington

Vice President, Creative Design

Mr. Pennington is a multiple award-winning designer, editor and art director who has spent the last 14 years designing projects for both the entertainment and Internet industries and has worked on projects for almost every major studio in Hollywood. Prior to joining Platinum Studios in 2006 he was Senior Art Director at The Cimarron Group from 2002-2006, an advertising agency serving the entertainment industry.   From 1998 to 2002 he worked as a freelance art director and creative director for entertainment agencies and Internet companies, including NeoPets, an on-line community games site, and CUShopper, an Inc 500 company.

Mr. Pennington’s designs have earned him acclaim and numerous awards including a Hollywood Reporter Key Art Award and three nominations, an Andy Award and two nominations, and a feature in Print Magazine’s The Big Event. His work includes the home video and DVD campaigns for To Kill a Mockingbird,Rocky 1-5, The Omen (the film collection), X-Men 1, 2 and 3, Minority Report, Casino, Dune, The Bourne Supremacy, Dawn of the Dead (2004), Night of the Living Dead, Million Dollar Baby, Platoon, The Terminator, Fantastic Four, The Devil Wears Prada, The Sentinel, Look, Up in the Sky! The Amazing Story of Superman, the best-selling Riddick Trilogy and the multi-award-wining campaign for The Texas Chainsaw Massacre as well as the multi-award winning campaign for Titanic. He also received much acclaim for his work designing the DVD release of the original Star Wars Trilogy.

Amongst the many theatrical campaigns he has worked on are Disney’s Mulan, Hercules, The Little Mermaid, as well as Species, Saw 3, Blue Streak and Ripley Under Ground.   Mr. Pennington is also well respected in the entertainment and comic book industries for his work for the Independent Spirit Awards and the Hero Initiative.

CONFLICT OF INTEREST

Our officers and directors devote 100% of their time to our business. Our Chief Executive officer, Scott Mitchell Rosenberg , is permitted to enter into separate producer agreements for our productions through his own loanout corporation, Scott Mitchell Rosenberg Productions, Inc., provided that all compensation that he receives through these agreements are considered as compensation he receives as CEO of the Company and therefore taken into account in setting his annual compensation. The Producer agreements are standard in the industry for heads of media companies and in no way can negatively impact, impede or affect the Company’s ability to make deals with production companies for its properties. Mr. Rosenberg did not receive any compensation under this arrangement for the years ended December 31, 2005 and 2006.

TERM OF OFFICE

Pursuant to our bylaws, our directors are elected at our annual meeting of stockholders and each director holds office until his successor is elected and qualified. Officers are elected by our Board of Directors and hold office until an officer's successor has been duly appointed and qualified unless an officer sooner dies, resigns or is removed by the Board.

COMMITTEES OF THE BOARD

We currently do not have an audit committee, compensation committee, nominations and governance committee of our board of directors.

FAMILY RELATIONSHIPS

There are no family relationships among our executive officers and directors.

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CODE OF ETHICS

We have adopted our Code of Ethics and Business Conduct for Officers, Directors and Employees that applies to all of our executive officers and directors. Our Code of Business Conduct and Ethics is posted on our corporate website at www.platinumstudios.com.  Upon request, we will provide to any person without charge a copy of our Code of Ethics. Any such request should be made to the Company, 11400 W. Olympic Blvd. 14^th Floor, Los Angeles, California, 90064, and Attention: Brian Altounian.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid or accrued by us to our Chief Executive Officer and President and Chief Operating Officer and each of our other officers whose compensation exceeded $100,000 for each of the Company’s last two completed fiscal years.

Name and Principal Position	Year	Salary ($)		Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Scott  Mitchell Rosenberg, CEO	2006 2005	$34,615 -		- -	- -	- -	- -	- -	- -	$34,615 -
Brian K. Altounian, President/COO	2006 2005	$299,039    $63,961	(1)(2)	- -	- -	- -	- -	- -	- -	$299,039 $63,961
Helene Pretsky, EVP Bus. Affairs	2006 2005	$161,187 -	(3)	- -	- -	- -	- -	- -	- -	$161,187 -

Notation: B.Altounian compensation for 2005 was 100% as a contractor, for 2006, $250,000 was as a contractor (of which 243,079 was deferred) and $49,039 as an employee.

H.Pretsky compensation for 2006 was $130,417 as a contractor and $30,770 as an employee.

Outstanding Equity Awards at Fiscal Year-End Table.

The following table sets forth information with respect to grants of options to purchase our common stock to the named executive officers at December 31, 2006.

Option Awards											Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Scott Mitchell Rosenberg		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Brian Altounian		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-

(1) $250,000 (of which $243,079 was deferred) Mr. Altounian's compensation in 2006 was earned in his capacity as an independent contractor and $49,039 as an employee of the Company.

(2) Mr. Altounian's compensation in 2005 was earned in his capacity as an independent contractor.

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Director Compensation

The following table sets forth with respect to the named directors, compensation information inclusive of equity awards and payments made for the fiscal year ended December 31, 2006.

Name   (a)	Fees Earned or Paid in Cash   ($)   (b)		Stock Awards   ($)   (c)		Option   Awards ($)   (d)		Non-Equity Incentive Plan Compensation ($)   (e)		Change in Pension Value and Nonqualified Deferred Compensation Earnings   (f)		All Other Compensation   ($)   (g)		Total   ($)   (h)
Scott Mitchell Rosenberg		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Brian Altounian		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Jill Zimmerman		-0-		-0-		-0-		-0-		-0-		-0-		-0-

EMPLOYMENT AGREEMENTS

We currently have no employment agreements with our executive officers.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of October  30, 2007, the number of and percent of our common stock beneficially owned by:

· all directors and nominees, naming them,

· our executive officers,

· our directors and executive officers as a group, without naming them, and

· persons or groups known by us to own beneficially 5% or more of our common stock:

We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

A person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from October 30, 2007upon the exercise of options, warrants or convertible securities. Each beneficial owner's percentage ownership is determined by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person, and which are exercisable within 60 days of  October 30, 2007 have been exercised and converted.

Title of Class	Name of Beneficial Owner	Number of Shares Beneficially Owned		Percent of Total
Common Stock	Scott Rosenberg (1)		128,250,000		63.7%
Common Stock	Brian Altounian		6,750,000		3.3%
Common Stock	Jill Zimmerman		-0-		*
Common Stock	Helene Pretsky		-0-		*
Common Stock	Charlotte Rosenberg		17,208,575		8.6%
Common Stock	All Executive Officers and Directors as a Group (3 persons )		135,000,000		100.00%

*Less than one percent.    

(1)   Includes 135,000 shares of common stock beneficially owned by Pamela Rosenberg, the wife of Scott Rosenberg. Mr. Rosenberg disclaims beneficial ownership of these shares.  Also includes 16,875,000 shared held by the Scott Mitchell Rosenberg GRIT, of which Mr. Rosenberg is the Trustee.

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Certain Relationships and Transactions

We have an exclusive option to enter licensing/acquisition of rights agreements for individual characters, subject to existing third party rights, within the RIP Awesome Library of RIP Media, Inc., a related entity in which Scott Rosenberg is a majority shareholder. The Company did not exercise this right during the years ended December 31, 2006 and 2005.

Our Chief Executive officer, Scott Mitchell Rosenberg , is permitted to enter into separate producer agreements for our productions through his own loanout corporation, Scott Mitchell Rosenberg Productions, Inc., provided that all compensation that he receives through these agreements are considered as compensation he receives as CEO of the Company and therefore taken into account in setting his annual compensation. The Producer agreements are standard in the industry for heads of media companies and in no way can negatively impact, impede or affect the Company’s ability to make deals with production companies for its properties.  Mr. Rosenberg did not receive any compensation under this arrangement for the years ended December 31, 2005 and 2006.

At December 31, 2005, we owed RIP Media $20,000 in uncollateralized loans.  During 2006, we repaid in full the $20,000 uncollateralized loans received during 2004. These loans accrued interest at 5% and 6% for the years ended December 31, 2005 and 2006, respectively.

At December 31, 2006, we owed $243,079 to Brian Altounian for consulting services provided prior to his employment.

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 500,000,000 shares of Common Stock, $0.001 par value per share, of which 201,255,825 shares were issued and outstanding as of October  30, 2007.

The holders of Common Stock are entitled to one vote for each share held of record on all matters to be voted on by the stockholders. The holders of Common Stock are entitled to receive dividends ratably, when, as and if declared by the Board of Directors, out of funds legally available therefore. In the event of a liquidation, dissolution or winding-up of our business, the holders of Common Stock are entitled to share equally and ratably in all assets remaining available for distribution after payment of liabilities.

The holders of shares of Common Stock, as such, have no conversion, preemptive, or other subscription rights and there are no redemption provisions applicable to the Common Stock. All of the outstanding shares of Common Stock are, and the Common Stock offered hereby, when issued will be, validly issued, fully paid and non-assessable.

We have never paid any cash dividends on our Common Stock and do not anticipate paying any cash dividends in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our By-laws, as amended, provide to the fullest extent permitted by California law, our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director's or officer's fiduciary duty. The effect of this provision of our By-laws, as amended, is to eliminate our right and our shareholders (through shareholders' derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our By-laws, as amended, are necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act” or “Securities Act”) may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In May, 2007, the Company entered into indemnification agreements with each of the Officers and Directors of the Corporation individually.

37

PLAN OF DISTRIBUTION

The selling stockholders and any of their respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:

· ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;

· block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

· purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

· an exchange distribution in accordance with the rules of the applicable exchange;

· privately-negotiated transactions;

· broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

· a combination of any such methods of sale; and

· any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, or Regulation S, rather than under this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if they deem the purchase price to be unsatisfactory at any particular time.

The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at a price per share which may be below the then market price. The selling stockholders cannot assure that all or any of the shares offered in this prospectus will be sold by the selling stockholders. The selling stockholders and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be "underwriters" as that term is defined under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the rules and regulations under such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

38

We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding brokerage commissions or underwriter discounts.

The selling stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. No selling stockholder has entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.

The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholders defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that the selling stockholders are deemed affiliated purchasers or distribution participants within the meaning of Regulation M, then the selling stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions.

We have agreed to indemnify the selling stockholders, or their transferees or assignees, against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may be required to make in respect of such liabilities.

If the selling stockholders notify us that they have a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholders and the broker-dealer.

PENNY STOCK

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

· That a broker or dealer approve a person's account for transactions in penny stocks; and

· the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must

· obtain financial information and investment experience objectives of the person; and

· make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

· Sets forth the basis on which the broker or dealer made the suitability determination; and

· That the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

39

SELLING STOCKHOLDERS

The table below sets forth information concerning the resale of the shares of common stock by the selling stockholders , which we previously issued to the selling stockholders . We will not receive any proceeds from the resale of the common stock by the selling stockholders. Assuming all the shares registered below are sold by the selling stockholders, none of the selling stockholders will continue to own any shares of our common stock.

The following table also sets forth the name of each person who is offering the resale of shares of common stock by this prospectus, the number of shares of common stock beneficially owned by each person, the number of shares of common stock that may be sold in this offering and the number of shares of common stock each person will own after the offering, assuming they sell all of the shares offered.     

Name (1)	Beneficial Ownership Before the Offering	Number of Shares of Common Stock Included in Prospectus	Beneficial Ownership After the Offering (2)
Nelson A. Abiva	250,000	250,000	0
Alfredo Aceituno Jr.	50,000	50,000	0
Karl Adler	100,000	100,000	0
Jonas E. Agin	50,000	50,000	0
Arthur & Kelli Altounian	50,000	50,000	0
Niki Anagnos Trust(3)	100,000	100,000	0
Ross Anderson	50,000	50,000	0
Matt Andrews & Teresa Andrews,	50,000	50,000	0
Fereshteh and Sharokh Atiabi	330,000	330,000	0
Krystianne E. Avedian	6,000	6,000	0
Fred & Sandy Ayala	10,000	10,000	0
Kathie Baker	50,000	50,000	0
Jon Bales	50,000	50,000	0
Yvonne C. Bartling	100,000	100,000	0
Eric Belusa	140,000	140,000	0
Ronald Belusa	50,000	50,000	0

40

Andrew Berk	110,000	110,000	0
The Eugene W. Berk Living Trust dtd. 6/1/90  (4)	50,000	50,000	0
Michael D. Berk, Trustee of the Berk Family Trust U/D/T 2/18/93 (5)	100,000	100,000	0
Melissa Berler	50,000	50,000	0
John Joseph Bial	315,000	315,000	0
Connie Blankenship	50,000	50,000	0
Christopher V. Bonbright & Lisa C. Bonbright-TTEES O/T Christopher & Lisa Bonbright Trust Dtd. 8/2/95 (6)	150,000	150,000	0
Sharon Bonney	70,000	70,000	0
TMI Partners, LLC (7)	500,000	500,000	0
Edward Bouryng & Ester Bouryng	200,000	200,000	0
William E. Boyd	100,000	100,000	0
Chris Boyte	15,000	15,000	0
Doug Bradley	20,000	20,000	0
Lawrence J. Brenner, Trustee of the Lawrence J. Brenner Trust Agmt. Dtd. March 24,2005 (8)	50,000	50,000	0
Arthur & Margaret Briggs	100,000	100,000	0
Howard K. Brodwin	20,000	20,000	0
Lynn Elizabeth Brody Living Trust (9)	250,000	250,000	0
Michael Brown and Linda Engelsiepen	100,000	100,000	0
Scott C. Bublin	50,000	50,000	0
Frank L. Buckley	250,000	250,000	0
Jason W. Callaway	100,000	100,000	0
Eric M. Campbell	500,000	500,000	0
Michael Canales	50,000	50,000	0
Rachel M. Capelouto	50,000	50,000	0
Randolph and J. Denise Capri Trust (10)	100,000	100,000	0
Gary R. Carlson Trust dated 5/3/91 (11)	100,000	100,000	0
Christopher Jamie Carr and Susan Lettween Carr	100,000	100,000	0
Robert J. Castillo	10,000	10,000	0
Robert Cavalleri	150,000	150,000	0
Lisa Cheek	50,000	50,000	0
Jeffrey Chiprin	50,000	50,000	0
Keith Chow & Chui Chow	50,000	50,000	0
Steven Chow and Alicia Chow	150,000	150,000	0
Robert Christian and Yerina S. Christian	50,000	50,000	0
John Scott Ciganko	50,000	50,000	0
Patricia Clipper	50,000	50,000	0
Brett J. Cohen	100,000	100,000	0
Mitchell B. Cohen and Anna Marie Cohen	50,000	50,000	0
Albert Andy Cohn and Vivian Cohn	90,000	90,000	0

41

Joanna and Timothy Collins	100,000	100,000	0
Rayann Congrove and Rebecca E.M. Williams	50,000	50,000	0
Kimberly E. Conlin and James P. Laware	75,000	75,000	0
Christopher J. Cook	50,000	50,000	0
Klava Cousin	50,000	50,000	0
Crane Family Trust of 1989 (12)	150,000	150,000	0
Stacia Crawford	5,000	5,000	0
Bradford Creger	300,000	300,000	0
Bradford Creger or Sheri Creger, Trustees of the B  & S Creger Living Trust dtd 10/30/04 (13)	2,125,000	2,125,000	0
Sheri Creger	425,000	425,000	0
William D. or Cheri D. Curren	50,000	50,000	0
Daniel S. Dagg	50,000	50,000	0
Erik and Merin Dahlerbruch	50,000	50,000	0
Randall J. Dean	300,000	300,000	0
Luka DeKelaita	20,000	20,000	0
Victor L. Delpine	400,000	400,000	0
Spree DeSha	100,000	100,000	0
Harinder Dhillon	400,000	400,000	0
Terry Divyak	50,000	50,000	0
Terry Divyak and Rosanne Balcazar	400,000	400,000	0
Nicholas J. Doko and Lauren A. Doko	50,000	50,000	0
Denny Dunlap	50,000	50,000	0
James H. Dupont	200,000	200,000	0
Scott E. Dyke	295,750	295,750	0
Perry Engel and Donna Engel	15,000	15,000	0
Paula E. Eylar Living Trust 2006 (14)	200,000	200,000	0
Mary E. Falso	20,000	20,000	0
J. Mark Ferrara and Maria A. Vachula-Ferrara	3,000,000	3,000,000	0
Fiorito Family Trust (15)	150,000	150,000	0
Robert J. Fisher	150,000	150,000	0
Phil Fistori and Ingrid M. Enoex-Fistori	50,000	50,000	0
Florence Franco	50,000	50,000	0
Amy L. Frazer & Franklin W. Frazer	100,000	100,000	0
Freedman Living Trust dated September 29, 2003 (16)	50,000	50,000	0
Ronald H. Friedman	250,000	250,000	0
Next Venture, Inc. dba:  Sierra Group (17)	100,000	100,000	0
Taisei Fujimura	100,000	100,000	0
Russell L. Furie	100,000	100,000	0

42

Howard and Alice Gamse	50,000	50,000	0
Susan B. Garber	100,000	100,000	0
Stephan O. Garden	100,000	100,000	0
Daniel A. Garrett	30,000	30,000	0
Dan Gense	12,000	12,000	0
Laura Gerritsen	50,000	50,000	0
Amy E. Gibbons and Claudia J. Hoover,	50,000	50,000	0
Aaron L. Gilbert	150,000	150,000	0
Jill A. Goldner	50,000	50,000	0
California Quintet LLC (18)	1,000,000	1,000,000	0
Donald A. Goldstein	50,000	50,000	0
Scott Goligoski	250,000	250,000	0
Dawn M. Gomez	10,000	10,000	0
Tommy P. and Dawn M. Gomez	80,000	80,000	0
Mruthyunjaya Gonchigar	100,000	100,000	0
Steven W. and Mary G. Gordon	160,000	160,000	0
Matthew Gross	100,000	100,000	0
Jeffrey A. Grossman	300,000	300,000	0
William L. Guggemos, Sr. & Nancy A. Guggemos	10,000	10,000	0
Caryl E. Hamilton	50,000	50,000	0
Mildred B. Hamilton	50,000	50,000	0
James Hammond and Linda Strout	50,000	50,000	0
Greg & Carol Hampson	500,000	500,000	0
Larry and Jeri Hannah	100,000	100,000	0
Robert Hanning and Amy Welsh Hanning	50,000	50,000	0
Lindsay and Terry Harding	70,000	70,000	0
C & R Consultants, Inc. Pension Plan (19)	50,000	50,000	0
Joel & Wendy Hecht	125,000	125,000	0
Software Technologies, LLC Defined Benefit Retirement Trust (20)	125,000	125,000	0
Jason A. Heeney	50,000	50,000	0
Hein Family Trust, Ronald Lee Hein / TTEE, Andrea P. Hein, TTEE (21)	75,000	75,000	0
Ronald D. Hejnal & Barbara A. Hejnal,	100,000	100,000	0
The Held Surviving Spouse Trust (22)	500,000	500,000	0
Tonny K. Ho	400,000	400,000	0
Paul Hoen and Susan Hoen	100,000	100,000	0

43

Christopher Horton	5,000	5,000	0
Hosaka Revocable Trust 2006 (23)	100,000	100,000	0
Shannon and Richard Howard	120,000	120,000	0
Lynlee Bybee-Hughes	15,000	15,000	0
Ben & Maureen Hunter	400,000	400,000	0
Brian Inerfeld	50,000	50,000	0
Inerfeld Family Limited Partnership (24)	100,000	100,000	0
Dean Janes	118,500	118,500	0
Donn & Candace Janes	100,000	100,000	0
Kathryn Janes and Wendy L. Whitaker	50,000	50,000	0
Michael Jaramillo	80,000	80,000	0
Lynn Joffe & Richard Anderson	75,000	75,000	0
Janet A. Johnson	100,000	100,000	0
James Kirk Kahla	100,000	100,000	0
Tim Kaiser	100,000	100,000	0
Gregory or Diana Kalaitzian	50,000	50,000	0
Jamila Kanan-Cioffi	55,000	55,000	0
Kevin A. Karo & Stefanie Karo	100,000	100,000	0
Larry J. Kaufman	700,000	700,000	0
Stanley K. Kawanishi and Carol M. Kawanishi	500,000	500,000	0
Victoria Keller	50,000	50,000	0
Susan Kelly	250,000	250,000	0
Ronald Kenny and Francine Kenny	50,000	50,000	0
Jesse Thomas Kerns	75,000	75,000	0
Gregory A. Kerrebrock	150,000	150,000	0
Kessler Family Trust (25)	100,000	100,000	0
Adrian & Nazila Khaghan	1,000,000	1,000,000	0
Robert D. & Pamela M. King	200,000	200,000	0
Ken Kirshner	50,000	50,000	0
Morts Associates(26)	500,000	500,000	0
Randyl M. Kirshner, TTE and Gaby Kirshner Living Trust u/t/d 5/16/2003 (27)	100,000	100,000	0
KIG Inc. Retirement Trust (28)	200,000	200,000	0
Coral Kline	50,000	50,000	0

44

Gerald Kline and Melanie Miles	50,000	50,000	0
Charmaine Klohe	80,000	80,000	0
Richard J. and Linda Klug	100,000	100,000	0
Alice Kofman	60,000	60,000	0
Jeff F. Konecke	100,000	100,000	0
Israel L. Kunin Living Trust dated 3/17/00 (29)	500,000	500,000	0
Patrick L. and Terri A. Lamontagne	40,000	40,000	0
Janice Lansing	300,000	300,000	0
Edward C. Le Cara	50,000	50,000	0
David D. Lee	100,000	100,000	0
Jeffery K. Lee and Paula J. Lee	100,000	100,000	0
Dana Levy	200,000	200,000	0
Pamela Lindsay & Mark Lindsay	100,000	100,000	0
Robert W. Litter	1,100,000	1,100,000	0
Richard Loehr	50,000	50,000	0
Lawrence S. Long	50,000	50,000	0
Jennifer Lowe & Daniel Lowe	100,000	100,000	0
Jennifer Lowe & Jehanne Lowe	100,000	100,000	0
Monica T. Macera	50,000	50,000	0
Anne H. Madden	50,000	50,000	0
Kenneth Mantlo	50,000	50,000	0
Jonathan and Jacqueline Mates-Muchin	100,000	100,000	0
Dea McNealy	350,000	350,000	0
Dane F. Medley	160,000	160,000	0
Armen S. Megerdichian	400,000	400,000	0
Mark C. Mehrali	110,000	110,000	0
Mehrali Family Trust (30)	100,000	100,000	0
Jonathan C. Milrod	50,000	50,000	0
Yuichiro Bryan Miyamoto	50,000	50,000	0
Madeleine Mizrahi	125,000	125,000	0
Grigor Greg Mkrtchyan and Leana Mkrtchyan	100,000	100,000	0
Morton Family Trust (31)	250,000	250,000	0
Jerome & Carol Muchin Family Trust Dated 9/15/05 (32)	100,000	100,000	0
Michael and Emma Muchin	150,000	150,000	0

45

Andrea and Neil Muchin	50,000	50,000	0
Peter Murietta	50,000	50,000	0
Mark Myers	100,000	100,000	0
Brian Negri	70,000	70,000	0
David Negri	30,000	30,000	0
Kari A. Negri	200,000	200,000	0
Joselito Neri & Daisy Neri	5,000	5,000	0
Cable Neuhaus & April Neuhaus	50,000	50,000	0
Tue Duc Nguyen and Giao Q.T. Nguyen	300,000	300,000	0
Diane R. Noahr	25,000	25,000	0
James Odell	200,000	200,000	0
David and Desiree Ohman	200,000	200,000	0
Oliver Family Trust (33)	50,000	50,000	0
Clive Otsuka	30,000	30,000	0
Clive and Mari Otsuka	300,000	300,000	0
Albert R. and Virginia R. Ovadia Trustees of the Ovadia Family Trust (34)	250,000	250,000	0
Al and Joyce Parde	50,000	50,000	0
Eric Parde	200,000	200,000	0
Kristianna M. Parde	50,000	50,000	0
Anthony Peckham	250,000	250,000	0
J. Wade Pedrotti	50,000	50,000	0
Zachary & Jacqueline Pennington	100,000	100,000	0
Charles E. Perry Jr. & Sharon M. Eley	100,000	100,000	0
Daniel B. Peters & Elizabeth H. Peters Trustees of The Peters Family Trust dated April 30, 2004 (35)	200,000	200,000	0
Richard & Madeline Peters	100,000	100,000	0
Richard M. Peters and Madeline I. Peters as Trustees of the Peters Family Trust dtd. 11/2/80 (36)	300,000	300,000	0
Richard M. Peters, O.D., an Optometric Corporation profit sharing plan (37)	200,000	200,000	0
Marilyn Pipp	50,000	50,000	0
Daniel Pitlik	40,000	40,000	0
David Pitlik	30,000	30,000	0
Michael Pitlik	30,000	30,000	0

46

Helen R. Pomilio	50,000	50,000	0
Alan M. Quon	50,000	50,000	0
Junaid Quraishi	50,000	50,000	0
Danny Lee Ramsey and Barbara E. Ramsey	200,000	200,000	0
Kerwin & Laveta Rice	50,000	50,000	0
Glenn H. Rigberg	100,000	100,000	0
Lionel Rodriguez Jr.	100,000	100,000	0
Rongine Enterprises LLC (38)	50,000	50,000	0
Charlotte Rosenberg	17,208,575	17,208,575,	0
William Rude	150,000	150,000	0
Jon & Susan Safier	50,000	50,000	0
Ron Salvo	50,000	50,000	0
Travis F. Sanchez	100,000	100,000	0
John A. Sanderson	50,000	50,000	0
Andrew Sandler 1990 Trust (39)	150,000	150,000	0
Lisa Sandler	700,000	700,000	0
Marco Daniel Santos	150,000	150,000	0
Frederic Scheer & Jocelyne Scheer	100,000	100,000	0
The Mark Scheiner Living Trust (40)	500,000	500,000	0
Michael Schreibman & Michelle Schreibman	50,000	50,000	0
Zoe & Barry J. Schulman	1,000,000	1,000,000	0
James Schwartzman & Karen Maxwell	50,000	50,000	0
Renaurd Avery Scott	50,000	50,000	0
Truman L. Scott	50,000	50,000	0
Sandeep Sherlekar	100,000	100,000	0
Royce Shimamoto	100,000	100,000	0
Andrea B. Simon	50,000	50,000	0
Zamira Kanan Singer	50,000	50,000	0
Eric Slaim	100,000	100,000	0
Danon Slinkard	75,000	75,000	0
Damian Smith	200,000	200,000	0
Karen A. Smith	110,000	110,000	0
Howard J. Smuckler	750,000	750,000	0
Herbert V. Sorell & Kim C. Sorell	200,000	200,000	0
Sam & Nancy Spear	100,000	100,000	0
Sam Spear	100,000	100,000	0

47

Russell B. Spencer	110,000	110,000	0
Warren Dale Spencer	90,000	90,000	0
Eric David Spratt	50,000	50,000	0
Donald G. Sproat	75,000	75,000	0
Scott & Heidi Steele	50,000	50,000	0
Vernon Christopher Steele	50,000	50,000	0
Anthony R. Stella	100,000	100,000	0
Gary Stephenson	50,000	50,000	0
Kevin & Vicki Stringer	50,000	50,000	0
Fenway Advisory Group (41)	1,500,000	1,500,000	0
Jeffrey S. Swartz & Donna F. Swartz	50,000	50,000	0
Stanley & Elaine Swartz Trust est. under agmt 10/7/1982 (42)	100,000	100,000	0
Craig M. Taggart	20,000	20,000	0
Bruce H. Tashjian	100,000	100,000	0
Bryan Tashjian	50,000	50,000	0
Damyon and Pattie Tashjian	75,000	75,000	0
Edward Tashjian	50,000	50,000	0
Gregory Tashjian	50,000	50,000	0
Sona Tashjian	50,000	50,000	0
Laurie & Walter Tayenaka	30,000	30,000	0
M. Lewis Temares & Louise Temares	100,000	100,000	0
Steve Timmerman & Jeannie Melancon	70,000	70,000	0
Scott Piwonka-Totten	50,000	50,000	0
April M. Tronson	10,000	10,000	0
Trust of Charles E. & Mary Jane Tronson dated July 20, 1982 (43)	250,000	250,000	0
Daniel C. Tronson & Ellen S. Tronson	500,000	500,000	0
Dane Tronson	50,000	50,000	0
David S. Tronson	320,000	320,000	0
Jennifer N. Tronson	10,000	10,000	0
John Tronson	100,000	100,000	*
Steven Powers Tronson and Alicia Jane Tronson	100,000	100,000	0
Mauricia Valadez	50,000	50,000	0
Wilmer Valderrama	200,000	200,000	0
Marika Van Adelsberg	100,000	100,000	0

48

Emmanuel C. Vasilomanolakis	210,000	210,000	0
Aaron & Dawn Vest	100,000	100,000	0
Scott Wagner	20,000	20,000	0
Carol Warfield	50,000	50,000	0
Thomas L. Webb and Miriam R. Webb	200,000	200,000	0
Richard Weingart & Elizabeth Weingart	300,000	300,000	0
Randy J. Weinzoff	50,000	50,000	0
Tammy Weinzoff	110,000	110,000	0
Weinzoff Family Trust (44)	100,000	100,000	0
Graham G. Weiss	250,000	250,000	0
Faryl E. Weisser	70,000	70,000	0
Troy D. Wiles	100,000	100,000	0
Dwane Winchester	50,000	50,000	0
Malissa Wise	50,000	50,000	0
Lisa Christine Saiki Wong Revocable Trust (45)	250,000	250,000	0
Russell D. Wong Revocable Trust (46)	750,000	750,000	0
Wyman & Isaacs Profit Sharing Plan (47)	250,000	250,000	0
Robert Zenner	50,000	50,000	0

The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling stockholders has sole or shared voting power or investment power and also any shares, which the selling stockholders has the right to acquire within 60 days.

(1) All of the selling stockholders purchased our shares pursuant to our October 2006 Private Placement Subscription Agreement, described below.

(2) Assumes that all securities will be sold.

(3) In accordance with rule 13d-3 under the securities exchange act of 1934, Niki Anagnos, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(4) In accordance with rule 13d-3 under the securities exchange act of 1934, Eugene Berk, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(5) In accordance with rule 13d-3 under the securities exchange act of 1934, Michael D. Berk, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(6) In accordance with rule 13d-3 under the securities exchange act of 1934, Christopher Bonbright, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(7) In accordance with rule 13d-3 under the securities exchange act of 1934, Melissa Bordy  as managing member, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(8) In accordance with rule 13d-3 under the securities exchange act of 1934, Lawrence J. Brenner, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(9) In accordance with rule 13d-3 under the securities exchange act of 1934, Lynn Brody, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(10) In accordance with rule 13d-3 under the securities exchange act of 1934, Randolph Capri, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(11) In accordance with rule 13d-3 under the securities exchange act of 1934, Gary Carlson, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(12) In accordance with rule 13d-3 under the securities exchange act of 1934, Bryan G. Crane, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

49

(13) In accordance with rule 13d-3 under the securities exchange act of 1934, Sheri A. Creger, as co-trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(14) In accordance with rule 13d-3 under the securities exchange act of 1934, Paula E. Eylar, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(15) In accordance with rule 13d-3 under the securities exchange act of 1934, Daniel J. Fiorito, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(16) In accordance with rule 13d-3 under the securities exchange act of 1934, Douglas M. Freedman, as co-trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(17) In accordance with rule 13d-3 under the securities exchange act of 1934, Carl Frommer may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(18) In accordance with rule 13d-3 under the securities exchange act of 1934, Russell  Goldsmith may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares

(19) In accordance with rule 13d-3 under the securities exchange act of 1934, Carol Haskin, as plan fiduciary, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares

(20) In accordance with rule 13d-3 under the securities exchange act of 1934, Joel B. Hecht, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(21) In accordance with rule 13d-3 under the securities exchange act of 1934, Andrea P. Hein, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(22) In accordance with rule 13d-3 under the securities exchange act of 1934, Harold A. Held, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(23) In accordance with rule 13d-3 under the securities exchange act of 1934, Todd Hosaka, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(24) In accordance with rule 13d-3 under the securities exchange act of 1934, Ivan Inerfeld may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(25) In accordance with rule 13d-3 under the securities exchange act of 1934, Mort Kessler, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(26) In accordance with rule 13d-3 under the securities exchange act of 1934, Morton Kirshner may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(27) In accordance with rule 13d-3 under the securities exchange act of 1934, Randy Kirshner, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(28) In accordance with rule 13d-3 under the securities exchange act of 1934, Randy Kirshner, as co-trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(29) In accordance with rule 13d-3 under the securities exchange act of 1934, Israel L. Kunin, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(30) In accordance with rule 13d-3 under the securities exchange act of 1934, Lavender Mehrali & Mehdi Mehrali, as co- trustees, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(31) In accordance with rule 13d-3 under the securities exchange act of 1934, Lon Morton, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

50

(32) In accordance with rule 13d-3 under the securities exchange act of 1934, Jerome D. Muchin, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(33) In accordance with rule 13d-3 under the securities exchange act of 1934, Michael A. Oliver, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(34) In accordance with rule 13d-3 under the securities exchange act of 1934, Albert Ovadia and Virginia Ovadia, as co-trustees, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(35) In accordance with rule 13d-3 under the securities exchange act of 1934, Daniel B. Peters may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(36) In accordance with rule 13d-3 under the securities exchange act of 1934, Richard Peters may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(37) In accordance with rule 13d-3 under the securities exchange act of 1934, Richard Peters, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(38) In accordance with rule 13d-3 under the securities exchange act of 1934, Rondine Volpert and Regina Modica may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(39) In accordance with rule 13d-3 under the securities exchange act of 1934, Larry Sandler, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(40) In accordance with rule 13d-3 under the securities exchange act of 1934, Mark Scheiner, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(41) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan, as President and sole shareholder, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(42) In accordance with rule 13d-3 under the securities exchange act of 1934, Stanley Swartz, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(43) In accordance with rule 13d-3 under the securities exchange act of 1934, Charles E. Tronson, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(44) In accordance with rule 13d-3 under the securities exchange act of 1934, Warren Weinzoff, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(45) In accordance with rule 13d-3 under the securities exchange act of 1934, Lisa C.S. Wong, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(46) In accordance with rule 13d-3 under the securities exchange act of 1934, Russell D. Wong, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(47) In accordance with rule 13d-3 under the securities exchange act of 1934, Bruce Isaacs & Robert A. Wyman, as co-trustees, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

51

TRANSACTIONS WITH THE SELLING STOCKHOLDERS PURSUANT TO WHICH THEY ACQUIRED THEIR SHARES

OCTOBER 2006 PRIVATE PLACEMENT

In October 2006, we entered into Subscription Agreements with various accredited investors (the “October 2006 Private Placement”) pursuant to which the investors subscribed to purchase a total of 49,047,250 shares of our common stock, resulting in proceeds to the company of $4,904,725, less offering costs of $217,312, which stock we issued to the selling stockholders prior to the date of this prospectus.  We granted registration rights to our investors in our October 2006 Private Placement.  The offering closed on April 30, 2007.  In connection with the offering, we agreed to use our reasonable best efforts to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock sold in the private placement within 180 days following the closing of the offering.

On July 1, 2007, we entered into a Cancellation of Indebtedness Agreement with our CEO Scott Mitchell Rosenberg, pursuant to which we agreed to issue 17,208,575 shares in exchange for canceling $1,625,000 in long-term debt plus $95,858 in accrued interest for said debt.  Mr. Rosenberg directed the shares to be issued in the name of Charlotte Rosenberg, his mother, from whom he personally borrowed the funds, which he then loaned to the Company’s predecessor in interest, Platinum Studios LLC.

LEGAL MATTERS

Sichenzia Ross Friedman Ference LLP, New York, New York will issue an opinion with respect to the validity of the shares of common stock being offered hereby.

EXPERTS

Our financial statements appearing in this prospectus and registration statement have been audited by HJ Associates & Consultants, LLP, independent registered public accountants, as set forth on their report thereon appearing elsewhere in this prospectus, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

We have filed a registration statement on Form SB-2 under the Securities Act of 1933, as amended, relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of Platinum Studios, Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission.

We are subject to the informational requirements of the Securities Exchange Act of 1934 which requires us to file reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information may be inspected at public reference facilities of the SEC at 100 F Street N.E. Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at 100 F Street N.E. Washington, D.C. 20549 at prescribed rates. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC's Internet website at http://www.sec.gov.

52

INDEX TO FINANCIAL STATEMENTS

PLATINUM STUDIOS, INC.

FINANCIAL STATEMENTS

CONTENTS

	Page
INTERIM FINANCIAL STATEMENTS: SIX MONTHS ENDED JUNE 30, 2007
Balance Sheet as of June 30, 2007 (Unaudited)	F-1
Statements of Operations for the six months ended June 30, 2007 (Unaudited)	F-2
Statements of Stockholders' Equity as of June 30, 2007	F-3
Statements of Cash Flows for the six months ended June 30, 2007	F-4
Notes to Financial Statements	F-5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
Balance Sheets as of December 31, 2006 and 2005	F-13
Statements of Operations for the years ended December 31, 2006 and 2005	F-14
Statements of Stockholders' Equity as of December 31, 2006	F-15
Statements of Cash Flows for the years ended December 31, 2006 and 2005	F-16
Notes to Financial Statements	F-17

  PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

BALANCE SHEETS

	Platinum Studios, Inc.			Platinum Studios, LLC
	June 30, 2007			December 31, 2006
	(unaudited)
Current assets:
Cash	$	423,256		$	331,435
Accounts receivable, net		9,518			-
Inventories, net		55,131			-
Prepaid expenses		215,224			105,603
Other Assets		1,994			12,100
Total current assets		705,123			449,138
Property and equipment, at cost, net		295,846			268,981
Other assets
Web sites		64,000			64,000
Deposits		39,704			39,404
Library of character rights, net		273,913			319,565
Total other assets		377,617			422,969
Total assets	$	1,378,586		$	1,141,088
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable	$	241,918		$	231,849
Accrued expenses		133,410			192,118
Deferred revenue		-			750,000
Short-term notes payable to shareholder		1,004,003			1,004,078
Related party payable		193,079			243,079
Capital leases payable, current		72,190			55,820
Total current liabilities		1,644,600			2,476,944
Long-term liabilities:
Long-term notes payable to shareholder		3,411,132			3,326,107
Accrued interest due to shareholder		132,271			75,031
Capital leases payable, non-current		142,459			148,721
Total long-term liabilities		3,685,862			3,549,859
Total liabilities		5,330,462			6,026,803
Stockholders' equity/(deficit):
Common stock, $.0001 par value, 500,000,000 shares authorized,
184,047,250 issued, and 158,056,000 outstanding at June 30, 2007		18,405			15,806
and December 31, 2006, respectively
Additional paid-in capital		1,787,172			(628,741	)
Retained earnings/(deficit)		(5,757,453	)		(4,272,780	)
Total stockholders' equity/(deficit)		(3,951,876	)		(4,885,715	)
Total liabilities and stockholders' equity/(deficit)	$	1,378,586		$	1,141,088

The accompanying footnotes are an integral part of these financial statements

F-1

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENT OF OPERATIONS

(unaudited)

	Platinum Studios, Inc.			Platinum Studios, LLC
	Six Months Ended June 30,
	2007			2006
Net revenue	$	1,676,800		$	30,500
Costs and expenses:
Cost of revenues		114,613			-
Operating expenses (excluding depreciation expense)		2,367,954			1,275,419
Research and development		457,854			310,205
Depreciation and amortization expense		80,665			11,035
Total costs and expenses		3,021,086			1,596,659
Operating income/(loss)		(1,344,286	)		(1,566,159	)
Other income/(expense)
Interest income/(expense)		(140,387	)		(191,710	)
Total other income/(expense)		(140,387	)		(191,710	)
Net income/(loss)	$	(1,484,673	)	$	(1,757,869	)
Basic and diluted net income per share:
Weighted average shares outstanding:
Weighted average shares for basic earnings per share		172,167,375
Net income/(loss) per share:
Basic	$	(0.01	)
Diluted	$	(0.01	)

The accompanying footnotes are an integral part of these financial statements

F-2

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENT OF CASH FLOWS

(unaudited)

	Platinum Studios, Inc.			Platinum Studios, LLC
	Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2007			2006
Net income/(loss)	$	(1,484,673	)	$	(1,757,869	)
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Depreciation		35,013			11,035
Amortization		45,652			-
Decrease (increase) in operating assets:
Accounts receivable		(9,518	)		-
Inventories		(55,131	)		-
Prepaid expenses		(109,621	)		(12,526	)
Other assets		9,806			(35,000	)
Increase (decrease) in operating liabilities:
Accounts payable		10,070			409,623
Accounts payable related party		(50,000	)		143,079
Accrued expenses		(59,680	)		(46,283	)
Accrued interest		58,212			179,913
Deferred revenue		(750,000	)		(25,000	)
NET CASH FLOWS USED IN OPERATING ACTIVITIES		(2,359,870	)		(1,133,028	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment		(17,250	)		(24,949	)
Other Assets - Website Acquisition		-			(40,000	)
NET CASH FLOWS USED BY INVESTING ACTIVITIES		(17,250	)		(64,949	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party loans		285,000			832,525
Payments on related party loans		(200,050	)		(119,400	)
Payments on capital leases		(34,521	)		(4,651	)
Issuance of common stock		2,418,512			-
Capital contributions		-			500,000
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		2,468,941			1,208,474
NET INCREASE/(DECREASE) IN CASH		91,821			10,497
Cash, at beginning of year		331,435			11,843
Cash, at end of period	$	423,256		$	22,340
Supplemental disclosure of cash flow information:
Cash paid for interest	$	91,385		$	3,532
Cash paid for taxes	$	-		$	-
Property and equipment additions through financing	$	44,629		$	84,575

The accompanying footnotes are an integral part of these financial statements

F-3

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)

	Members Equity			Common Stock Shares		Common Stock Amount		Additional Paid-In Capital			Retained Earnings (Deficit)			Total
Balance at December 31, 2004	$	(7,068,677	)		-	$	-	$	-		$	-		$	(7,068,677	)
Net income/(loss)		(2,080,915	)		-		-		-			-			(2,080,915	)
Balance at December 31, 2005		(9,149,592	)		-		-		-			-			(9,149,592	)
Capital Contribution - B.Altounian		500,000			-		-		-			-			500,000
Capital Contribution - S.Rosenberg		5,731,057			-		-		-			-			5,731,057
Convert LLC interests to common stock		2,918,535			135,000,000		13,500		(2,932,035	)		-			-
Common stock issued in private placement at $0.10 per share, $0.0001 par value		-			23,056,000		2,306		2,303,294			-			2,305,600
Net income/(loss)		-			-		-		-			(4,272,780	)		(4,272,780	)
Balance at December 31, 2006		-			158,056,000		15,806		(628,741	)		(4,272,780	)		(4,885,715	)
Common stock issued in private placement at $0.10 per share, $0.0001 par value (unaudited)		-			25,991,250		2,599		2,379,214			-			2,381,813
Warrants issued for services (unaudited)		-			-		-		36,699			-			36,699
Net income/(loss) (unaudited)		-			-		-		-			(1,484,673	)		(1,484,673	)
Balance at June 30, 2007	$	-			184,047,250	$	18,405	$	1,787,172		$	(5,757,453	)	$	(3,951,876	)

The accompanying footnotes are an integral part of these financial statements

F-4

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

(1 ) Description of business

Nature of operations–  The Company controls a library consisting of more than 3,800 characters and is engaged principally as a comics-based entertainment company adapting characters and storylines for production in film, television, publishing and all other media.

Platinum Studios, LLC was formed and operated as a California limited liability company from its inception on November 20, 1996 through September 14, 2006.  On September 15, 2006, Platinum Studios, LLC filed with the State of California to convert Platinum Studios, LLC into Platinum Studios, Inc., (“the Company”, “Platinum”) a California corporation.

This change to the Company structure was made in preparation of a private placement memorandum and common stock offering in October, 2006 (Note 12).

(2 ) Basis of financial statement presentation

The accompanying unaudited condensed financial statements of Platinum Studios, Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair statement of financial position, results of operations and cash flows for the periods presented have been included. The unaudited condensed Statements of Operations for the six-month period ended June 30, 2007 and the unaudited condensed Statements of Cash Flows for the six-month period ended June 30, 2007 are not necessarily indicative of those for the full year ending December 31, 2007.  The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

( 3 ) Going concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred significant losses which have resulted in an accumulated deficit of $5,757,453 as of June 30, 2007.  The Company plans to seek additional financing in order to execute its business plan, but there is no assurance the Company will be able to obtain such financing on terms favorable to the Company or at all.  These items raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments to reflect the possible future effects related to recovery and classification of assets, or the amounts and classifications of liabilities that might result from the outcome of this uncertainty.

( 4 ) Summary of significant accounting policies

Reclassifications– Certain prior year amounts have been reclassified in order to conform to the current year’s presentation.

Revenue recognition - Revenue  from  the  licensing  of  characters  and  storylines  (“the properties”) owned by the Company are recognized in accordance with guidance provided in Securities and Exchange Commission Staff Accounting Bulletin No. 104 “Revenue Recognition” (an amendment of Staff Accounting Bulletin No. 101 “Revenue Recognition”) (“SAB 104”).  Under the SAB 104 guidelines, revenue is recognized when the earnings process is complete.  This is considered to have occurred when persuasive evidence of an agreement between the customer and the Company exists,

F-5

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

( 4 ) Summary of significant accounting policies (continued)

when the properties are made available to the licensee and the Company has satisfied its obligations under the agreement, when the fee is fixed or determinable and when collection is reasonably assured.

The Company derives its licensing revenue primarily from options to purchase rights, the purchase of rights to properties and first look deals.  For options that contain non-refundable minimum payment obligations that are not applied to the purchase price, revenue is recognized ratably over the option period, prior to the collection of all amounts ultimately due, provided all the criteria for revenue recognition under SAB 104 have been met.  Option fees that are applicable to the purchase price are deferred and recognized as revenue at the later of the expiration of the option period or in accordance with the terms of the purchase agreement.  Revenue received under first look deals is recognized ratably over the first look period, which varies by contract provided all the criteria for revenue recognition under SAB 104 have been met.  First look deals that have contingent components are deferred and recognized at the later of the expiration of the first look period or in accordance with the terms of the first look contract.

For licenses requiring material continuing involvement or performance based obligations, by the Company, the revenue is recognized as and when such obligations are fulfilled.

The Company records as deferred revenue any licensing fees collected in advance of obligations being fulfilled or if a licensee is not sufficiently creditworthy, the Company will record deferred revenue until payments are received.

License agreements typically include reversion rights which allow the Company to repurchase property rights which have not been used by the studio (the buyer) in production within a specified period of time as defined in the purchase agreement.  The cost to repurchase the rights is generally based on the costs incurred by the studio to further develop the characters and story lines.

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and cash equivalents– The Company considers all highly liquid investment securities with an original maturity date of three months or less to be cash equivalents.

Concentrations of risk - Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of uninsured cash balances.  The Company maintains  its  cash  balances with what  management believes to be a  high credit  quality financial institution. At times, balances within the company’s cash accounts may exceed the Federal Deposit Insurance Corporation (FDIC) limit of $100,000.

During the six months ended June 30, 2007 and 2006, the Company had customer revenues representing a concentration of the Company’s total revenues. In 2007, two customers represented approximately 60% and 27% of total revenues and during 2006, two customers represented approximately 82% and 18% of the Company’s total revenues.

Depreciation - Depreciation is computed on the straight-line method over the following estimated useful lives:

F-6

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

( 4 ) Summary of significant accounting policies (continued)

Fixed assets	Useful  Lives
Furniture and fixtures	7 years
Computer equipment	5 years
Office equipment	5 years
Software	3 years
Leasehold improvements	Shorter of lease term or useful economic life

Character development costs - Character development costs consist primarily of costs to acquire properties from the creator, development of the property using internal or independent writers and artists, and the registration of a property for a trademark or copyright.  These costs are capitalized in the year incurred if the Company has executed a contract or is negotiating a revenue generating opportunity for the property.  If the property derives a revenue stream that is estimable, the capitalized costs associated with the property are expensed as revenue is recognized.

If the Company determines there is no determinable market for a property, it is deemed impaired and is written off.

Purchased intangible assets and long-lived assets– Intangible assets are capitalized at acquisition costs and intangible assets with definite lives are amortized on the straight-line basis.  The Company periodically reviews the carrying amounts of intangible assets and property in conformance with the Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144).  Under SFAS 144, long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, the impairment charge to be recognized is measured by the excess of the carrying amount over the fair value of the asset.

Advertising costs - Advertising costs are expensed the later of when incurred or when the advertisement is first run.  For the six months ended June 30, 2007 and 2006, advertising expenses were $68,990 and $2,462, respectively.

Research and development - Research and development costs, primarily character development costs and design not associated with an identifiable revenue opportunity, are charged to operations as incurred.  For the six months ended June 30, 2007 and 2006, research and development expenses were $457,854 and $310,205, respectively.

Income taxes– From inception thru September 14, 2006 the Company operated as a limited liability company and elected to be taxed similar to a partnership.  Accordingly, each member was responsible for reporting its  respective  share  of  the  Company’s  net income  or  loss  for  Federal  and California income tax purposes and the Company did not pay Federal income tax.  From September 15, 2006 forward the Company has accounted for income taxes using the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  The Company was subject to an annual minimum tax of $800 and a fee based on gross receipts in California from inception through September 14, 2006.

F-7

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

( 4 ) Summary of significant accounting policies (continued)

Net income/(loss) per share– In accordance with SFAS No. 128 “Earnings Per Share”, basic income per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the periods, excluding shares subject to repurchase or forfeiture.  Diluted income per share increases the shares outstanding for the assumption of the vesting of restricted stock and the exercise of dilutive stock options and warrants, using the treasure stock method, unless the effect is anti-dilutive.

Recent accounting pronouncements– In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainly in Income Taxes” (“FIN 48”).  FIN 48 applies to all tax positions related to income taxes subject to SFAS 109, “Accounting for Income Taxes”.  Under FIN 48 a company would recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position.  FIN 48 clarifies how a company would measure the income tax benefits from the tax positions that are recognized, provides guidance as to the timing of the de-recognition of previously recognized tax benefits and describes the methods for classifying and disclosing the liabilities within the financial statements for any unrecognized tax benefits.  FIN 48 also addresses when a company should record interest and penalties related to tax positions and how the interest and penalties may be classified within the income statement and presented in the balance sheet.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  For Platinum, FIN 48 will be effective for the first quarter of fiscal 2007.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections , which replaces APB No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements . SFAS No. 154 requires that a voluntary change in accounting principle be applied  retrospectively  with  all prior period financial statements presented as if the new accounting principle had always been used. SFAS No. 154 also requires that a change in method of depreciating or amortizing long-lived non-financial assets be accounted for prospectively, in the period of change and in future periods, if applicable, as a change in estimate, and requires the correction of errors in previously issued financial statements be termed a “restatement”. SFAS No. 154 is effective for accounting changes and correction errors made in fiscal years beginning after December 15, 2005.  The implementation of SFAS 154 is not expected to have a material impact on the Company’s financial statements.

( 5 ) Inventory

	June 30, 2007		December 31, 2006
Kiss Merchandise	$	53,170	$	-
T-Shirts		1,961		-
	$	55,131	$	-

( 6 ) Property and equipment

Property and equipment are recorded at cost. The cost of repairs and maintenance are expensed when incurred, while expenditures refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized.  Upon asset retirement or disposal, any resulting gain or loss is included in the results of operations.

F-8

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

( 6 ) Property and equipment (continued)

	June30, 2007			December 31, 2006
Property and equipment, cost:
Office equipment	$	10,804		$	10,804
Furniture and fixtures		118,140			107,317
Computer equipment		150,393			105,054
Software		91,292			85,576
Leasehold improvements		20,557			20,557
		391,187			329,308
Less accumulated depreciation		(95,340	)		(60,327	)
Net property and equipment	$	295,846		$	268,981

For the six months ended June 30, 2007 and year ended December 31, 2006, property and equipment at cost includes assets acquired under capital leases of $44,629 and $203,833, respectively.   Depreciation expense charged to operations for the six months ended June 30, 2007 and 2006 were $35,013 and $11,035 including $25,793 and $6,487, applicable to assets acquired under capital leases, respectively.

(7 )   Other assets

	June30,			December 31
	2007			2006
Web Sites	$	64,000		$	64,000
Deposits		39,704			39,404
Character Library - Top Cow		350,000			350,000
Character Library Amortization - Top Cow		(76,087	)		(30,435	)
	$	377,617		$	422,969

(8 ) Due to related party 

	June30, 2007		December 31, 2006
B.Altounian - Consulting prior to employment	$	193,079	$	243,079
	$	193,079	$	243,079

During 2006, the Company repaid in full the uncollateralized loans received from Rosenberg IP during 2004.  These loans accrued interest at 5% and 6% for the years ended December 31, 2005 and 2006, respectively.

F-9

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

(9 ) Short-term and long-term debt

	June 30, 2007			December 31,2006
Loan payable to shareholder - uncollateralized; payable in monthly installments of interest only at variable interest rates. This note is due on demand at the shareholder's discretion. At June 30, 2007 and 2006, the interest rates were 7.847% and 7.257%, respectively.	$	745,850	$	745,925
Loan payable to shareholder - uncollateralized; payable in monthly installments of interest only at variable interest rates. At June 30, 2007 and 2006, the interest rates were 7.708% and 6.151%, respectively. Monthly payments of principal and interest begin on July 1, 2009; final payment due June 1, 2034.		1,294,260		1,294,260
Loan payable to shareholder- uncollateralized; principal advances accrue at variable interest rates. At June 30, 2007 and 2006, the interest rates were 5.0% and 5.0%, respectively . The loans are due June 30, 2010.		750,025		665,000
Loan payable to shareholder - uncollateralized. Effective January 1, 2006, interest became fixed at 3.8% for the remaining life of the loan.  Monthly payments of principal and interest begin on July 1, 2007; final payment due June 30, 2010.		1,625,000		1,625,000
Total short-term and long-term debt	$	4,415,135	$	4,330,185

The following summarizes future cash payment obligations:
Years Ending December 31,	June 30, 2007
		-
2007	$	1,004,003
2008		531,233
2009		560,475
2010		1,052,297
2011		19,907
Thereafter		1,247,220
Total short-term and long-term debt obligations	$	4,415,135

F-10

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

(10 )  Operating and capital leases

The Company has entered into operating leases having expiration dates through 2011 for real estate and various equipment needs, including office facilities, computers, office equipment and a vehicle.

On July 10, 2006, the Company entered into an operating agreement for the lease of real property located in Los Angeles, California.  The agreement has a five year term, commencing September 1, 2006 and ending August 31, 2011.

Rent expense under non-cancelable operating leases were $206,218 and $58,971 for the six months ended June 30, 2007 and 2006, respectively.

At June 30, 2007, future minimum rental payments required under non-cancelable operating leases that have initial or remaining terms in excess of one year are as follows:

Years Ending December 31,	Operating Leases
2007	$	219,122
2008		427,510
2009		427,637
2010		442,815
2011		302,855
Thereafter		-
Total minimum obligations	$	1,819,939

The company has various non-cancelable capital leases for computer and office equipment, at cost of $44,629 and $203,833 at June 30, 2007 and December 31, 2006, respectively.  The capital leases are secured by the assets which cannot be freely sold until the maturity date of the lease.  Accumulated amortization for equipment under capital lease totaled $34,521 and $11,026 at June 30, 2007 and December 31, 2006, respectively.

Future required payments at June 30, 2007 under these leases are as follows:

Years Ending December 31 ,		Capital  Leases
2007	$	46,547
2008		89,947
2009		57,334
2010		37,947
2011		24,705
Thereafter		-
Total minimum obligations	$	256,480
Less amounts representing interest		41,831
Present value of net minimum obligations		214,649
Less current portion		72,190
Long-term portion	$	142,459

F-11

(11 )  Commitments

During 2004, the Company entered into an agreement with Top Cow Productions, Inc. to acquire certain rights in and to certain comic books, related characters, storylines and intellectual property (the properties).  The current agreement period expires on June 30, 2010.  The Company has the right to extend the agreement for an additional twelve month period for an additional $350,000 and has pre-paid $75,000 toward this extended period.  If the Company enters into production on a particular property, additional fees based on a percentage of the adjusted gross revenue resulting from the production, as defined in the agreement, will be due to the owner.  The agreement is collateralized by a security interest in and to all rights licensed or granted to the Company under this agreement including the right to receive revenue.  The current agreement period cost of $350,000 is included in Other Assets on the balance sheet (Note 7) and is being amortized on a straight-line basis beginning in 2006 when the rights became available for exploitation.

( 12 ) Related party transactions

The Company has an exclusive option to enter licensing/acquisition of rights agreements for individual characters, subject to existing third party rights, within the RIP Awesome Library of RIP Media, Inc., a related entity in which Scott Rosenberg is a majority shareholder. The Company did not exercise this right during the six months ended June 30, 2007 or the year ended December 31, 2006.  During 2006, the Company repaid uncollateralized loans of $20,000 in full (Note 8).

Our Chief Executive officer, Scott Mitchell Rosenberg , is permitted to enter into separate producer agreements for our productions through his own loanout corporation, Scott Mitchell Rosenberg Productions, Inc., provided that all compensation that he receives through these agreements are considered as compensation he receives as CEO of the Company and therefore taken into account in setting his annual compensation. The Producer agreements are standard in the industry for heads of media companies and in no way can negatively impact, impede or affect the Company’s ability to make deals with production companies for its properties. Mr. Rosenberg did not receive any compensation under this arrangement for the years ended December 31, 2005 and 2006.

( 13 ) Stockholders equity

As of May 1, 2006, the Company issued a five percent (5.0%) ownership interest in Platinum Studios, LLC to Brian Altounian in consideration of a capital contribution in the amount of $500,000.

On September 14, 2006, Scott Mitchell Rosenberg converted $5,731,057 in outstanding principal and interest as a capital contribution in Platinum Studios, LLC in fulfillment of commitments made to the Company prior to the issuance to Brian Altounian.

Platinum Studios LLC filed Articles of Incorporation with the Secretary of the State of California on September 15, 2006, by which Platinum Studios, LLC converted from a California limited liability company into Platinum Studios, Inc., a California corporation.  On September 15, 2006, 135,000,000 common shares were issued for conversion of LLC interests as all members of the limited liability company became shareholders of the corporation, maintaining their same percentage ownership, with no additional contribution required by any of the members to the corporation.

A Private Placement Memorandum was issued on October 12, 2006, offering up to 50,000,000 shares of common stock, $0.0001 par value per share, for sale to Accredited Investors (as defined in the memorandum), at a price of $0.10 per share on a “best efforts” basis, for a total offering price to investors of $5,000,000.  The proceeds of the offering are expected to be used for property acquisitions, marketing and general and administrative expenses.  The offering was closed on April 30, 2007 with the Company having sold 49,047,250 shares resulting in proceeds of $4,904,725, less offering costs of $217,312.

( 14 )    Subsequent events

Effective July 1, 2007, a Cancellation of Indebtedness Agreement was executed between the Company and Scott Mitchell Rosenberg related to certain loans and interest totaling $1,720,857. Whereas the parties are amenable to the cancellation of the loans and interest through the issuance of stock and warrants, a Platinum Studios common stock certificate will be issued for the number of shares equal to the amount of the principal plus interest $1,720,857.46 divided by $0.10 and a common stock warrant to purchase a number of shares of the Company’s common stock equal to 15% of the principal only $1,625,000 divided by $0.10 per share.

Effective July 12, 2007, the Company obtained board approval of an incentive plan under which equity incentives would be granted to officers, employees, non-employee directors and consultants of the Company.  The board further resolved for 30,000,000 shares of the Company’s common stock, $0.0001 par value, be reserved for issuance in accordance with the requirements of this plan.

F-12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

PLATINUM STUDIOS, INC.

Los Angeles, CA

We have audited the balance sheet of Platinum Studios, Inc. as of December 31, 2006 and the related statements of operations, stockholders' equity deficit, and cash flows for the year ended December 31, 2006. We have audited the balance sheet of Platinum Studios, LLC as of December 31, 2005 and the related statements of operations, members’ equity deficit, and cash flows for the year ended December 31, 2005.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Platinum Studios, Inc. as of December 31, 2006, and the results of its operations and its cash flows for the year ended December 31, 2006 and the financial position of Platinum Studios, LLC as of December 31, 2005, and the result of its operations and its cash flows for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has insufficient assets available to fund activity, which raises substantial doubt about its ability to continue as a going concern.  Management's plans regarding those matters also are described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HJ Associates & Consultants, LLP

Salt Lake City, Utah

July 13, 2007

F-13

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

BALANCE SHEETS

	Platinum Studios, Inc.			Platinum Studios, LLC
	December 31, 2006			December 31, 2005
ASSETS
Current assets:
Cash	$	331,435		$	11,843
Prepaid expenses		105,603			89,347
Stock offering costs		12,100			-
Total current assets		449,138			101,190
Property and equipment, at cost, net		268,981			61,969
Other assets
Web sites		64,000			-
Deposits		39,404			1,561
Library of character rights		319,565			350,000
Total other assets		422,969			351,561
Total assets	$	1,141,088		$	514,720
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable	$	231,849		$	131,131
Accrued expenses		192,118			64,352
Deferred revenue		750,000			175,000
Short-term notes payable to shareholder		1,004,078			-
Related party payable		243,079			20,000
Capital leases payable, current		55,820			6,441
Total current liabilities		2,476,944			396,924
Long-term liabilities:
Long-term notes payable to shareholder		3,326,107			7,436,332
Accrued interest due to shareholder		75,031			1,067,465
Deferred revenue, non-current		-			750,000
Capital leases payable, non-current		148,721			13,591
Total long-term liabilities		3,549,859			9,267,388
Total liabilities		6,026,803			9,664,312
Stockholders' equity/(deficit):
Common stock, $.0001 par value, 500,000,000 shares authorized,
158,056,000 issued, and outstanding at December 31, 2006		15,806			-
Additional paid-in capital		(628,741	)		-
Members equity/(deficit)		-			(9,149,592	)
Retained earnings/(deficit)		(4,272,780	)		-
Total stockholders' equity/(deficit)		(4,885,715	)		(9,149,592	)
Total liabilities and stockholders' equity/(deficit)	$	1,141,088		$	514,720

The accompanying footnotes are an integral part of these financial statements

F-14

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENTS OF OPERATIONS

	Platinum Studios, Inc.			Platinum Studios, LLC
	Years Ended December 31,
	2006			2005
Net revenue	$	180,500		$	162,500
Operating expenses:
Operating expenses (excluding depreciation expense)		3,168,078			1,607,672
Research and development		764,282			243,833
Depreciation and amortization expense		73,486			7,436
Total costs and expenses		4,005,846			1,858,941
Operating income/(loss)		(3,825,346	)		(1,696,441	)
Other income/(expense)
Other income		2,571			5,814
Gain/(Loss) on disposition of assets		(33,260	)		-
Interest income/(expense)		(391,745	)		(390,288	)
Other expense		(25,000	)		-
Total other income/(expense)		(447,434	)		(384,474	)
Net income/(loss)	$	(4,272,780	)	$	(2,080,915	)
Basic and diluted net income per share:
Weighted average shares outstanding:
Weighted average shares for basic earnings per share		145,908,250
Weighted average shares for diluted earnings per share		145,908,250
Net income/(loss) per share:
Basic	$	(0.03	)
Diluted	$	(0.03	)

  The accompanying footnotes are an integral part of these financial statements

F-15

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENT OF CASH FLOWS

	Platinum Studios, Inc.			Platinum Studios, LLC
	Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES	2006			2005
Net income/(loss)	$	(4,272,780	)	$	(2,080,915	)
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Depreciation		43,051			7,436
Amortization		30,435			-
(Gain)/loss on disposal of assets		33,260			-
Decrease (increase) in operating assets:
Prepaid expenses		(7,918	)		(89,544	)
Other assets		(113,943	)		322,649
Increase (decrease) in operating liabilities:
Accounts payable		92,381			29,667
Accounts payable related party		243,079			-
Accrued expenses		118,320			51,442
Accrued interest		258,805			345,915
Deferred revenue		(175,000	)		300,000
NET CASH FLOWS USED IN OPERATING ACTIVITIES		(3,750,310	)		(1,113,350	)
Investment in property and equipment		(79,478	)		(37,075	)
NET CASH FLOWS USED BY INVESTING ACTIVITIES		(79,478	)		(37,075	)
Proceeds from related party loans		2,609,457			1,170,010
Payments on related party loans		(1,246,354	)		-
Payments on capital leases		(19,323	)		(1,890	)
Issuance of common stock		2,305,600			-
Capital contributions		500,000			-
Overdraft repayment		-			(5,852	)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		4,149,380			1,162,268
NET INCREASE/(DECREASE) IN CASH		319,592			11,843
Cash, at beginning of year		11,843			-
Cash, at end of year	$	331,435		$	11,843
Cash paid for interest	$	128,137		$	68,289
Cash paid for taxes	$	-		$	-
Conversion of notes payable into members' equity	$	4,521,588		$	-
Conversion of accrued interest into members' equity	$	1,209,469		$	-
Disposed fixed assets and leasehold improvements	$	79,543		$	-
Property and equipment additions through financing	$	203,833		$	21,922

 The accompanying footnotes are an integral part of these financial statements

F-16

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)

	Members Equity			Common Stock Shares		Common Stock Amount		Additional Paid-In Capital			Retained Earnings (Deficit)			Total
Balance at December 31, 2004	$	(7,068,677	)		-	$	-	$	-		$	-		$	(7,068,677	)
Net income/(loss)		(2,080,915	)		-		-		-			-			(2,080,915	)
Balance at December 31, 2005		(9,149,592	)		-		-		-			-			(9,149,592	)
Capital Contribution - B.Altounian		500,000			-		-		-			-			500,000
Capital Contribution - S.Rosenberg		5,731,057			-		-		-			-			5,731,057
Convert LLC interests to common stock		2,918,535			135,000,000		13,500		(2,932,035	)		-			-
Common stock issued in private placement at $0.10 per share, $0.0001 par value		-			23,056,000		2,306		2,303,294			-			2,305,600
Net income/(loss)		-			-		-		-			(4,272,780	)		(4,272,780	)
Balance at December 31, 2006		-			158,056,000		15,806		(628,741	)		(4,272,780	)		(4,885,715	)

The accompanying footnotes are an integral part of these financial statements

F-17

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(1 )   Description of Business

Nature of operations–  The Company controls a library consisting of more than 3,800 characters and is engaged principally as a comics-based entertainment company adapting characters and storylines for production in film, television, publishing and all other media.

Platinum Studios, LLC was formed and operated as a California limited liability company from its inception on November 20, 1996 through September 14, 2006.  On September 15, 2006, Platinum Studios, LLC filed with the State of California to convert Platinum Studios, LLC into Platinum Studios, Inc., (“the Company”, “Platinum”) a California corporation.

This change to the Company structure was made in preparation of a private placement memorandum and common stock offering in October, 2006 (Note 12).

( 2 ) Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred significant losses which have resulted in an accumulated deficit of $4,272,780 as of December 31, 2006.  The Company plans to seek additional financing in order to execute its business plan, but there is no assurance the Company will be able to obtain such financing on terms favorable to the Company or at all.  These items raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments to reflect the possible future effects related to recovery and classification of assets, or the amounts and classifications of liabilities that might result from the outcome of this uncertainty.

( 3 ) Summary of significant accounting policies

Reclassifications– Certain prior year amounts have been reclassified in order to conform to the current year’s presentation.

Revenue recognition - Revenue  from  the  licensing  of  characters  and  storylines  (“the properties”) owned by the Company are recognized in accordance with guidance provided in Securities and Exchange Commission Staff Accounting Bulletin No. 104 “Revenue Recognition” (an amendment of Staff Accounting Bulletin No. 101 “Revenue Recognition”) (“SAB 104”).  Under the SAB 104 guidelines, revenue is recognized when the earnings process is complete.  This is considered to have occurred when persuasive evidence of an agreement between the customer and the Company exists, when the properties are made available to the licensee and the Company has satisfied its obligations under the agreement, when the fee is fixed or determinable and when collection is reasonably assured.

The Company derives its licensing revenue primarily from options to purchase rights, the purchase of rights to properties and first look deals.  For options that contain non-refundable minimum payment obligations that are not applied to the purchase price, revenue is recognized ratably over the option period, prior to the collection of all amounts ultimately due, provided all the criteria for revenue recognition under SAB 104 have been met.  Option fees that are applicable to the purchase price are deferred and recognized as revenue at the later of the expiration of the option period or in accordance with the terms of the purchase agreement.  Revenue received under first look deals is recognized ratably over the first look period, which varies by contract provided all the criteria for revenue recognition under SAB 104 have been met.  First look deals that have contingent components are deferred and recognized at the later of the expiration of the first look period or in accordance with the terms of the first look contract.

F-18

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

( 3 ) Summary of significant accounting policies (continued)

For licenses requiring material continuing involvement or performance based obligations, by the Company, the revenue is recognized as and when such obligations are fulfilled.

The Company records as deferred revenue any licensing fees collected in advance of obligations being fulfilled or if a licensee is not sufficiently creditworthy, the Company will record deferred revenue until payments are received.

License agreements typically include reversion rights which allow the Company to repurchase property rights which have not been used by the studio (the buyer) in production within a specified period of time as defined in the purchase agreement.  The cost to repurchase the rights is generally based on the costs incurred by the studio to further develop the characters and story lines. The reversion rights have no impact on revenue recognition nor timing of the revenue recorded, nor is any portion of the revenue deferred.  The purpose of the reversion rights is to allow the Company the contractual right to reclaim the property at some distant point.

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and cash equivalents– The Company considers all highly liquid investment securities with an original maturity date of three months or less to be cash equivalents.

Concentrations of risk - Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of uninsured cash balances.  The Company maintains  its  cash  balances with what  management believes to be a  high credit  quality financial institution. At times, balances within the company’s cash accounts may exceed the Federal Deposit Insurance Corporation (FDIC) limit of $100,000.

During the years ended December 31, 2006 and 2005, the Company had customer revenues representing a concentration of the Company’s total revenues. In 2006, two customers represented approximately 82% and 14% of total revenues and during 2005, three customers represented approximately 64%, 19% and 17% of the Company’s total revenues.

Depreciation - Depreciation is computed on the straight-line method over the following estimated useful lives:

Fixed Assets	Useful  Lives
Furniture and fixtures	7 years
Computer equipment	5 years
Office equipment	5 years
Software	3 years
Leasehold improvements	Shorter of lease term or useful economic life

Character development costs - Character development costs consist primarily of costs to acquire properties from the creator, development of the property using internal or independent writers and artists, and the registration of a property for a trademark or copyright.  These costs are capitalized in the year incurred if the Company has executed a contract or is negotiating a revenue generating opportunity for the property.  If the property derives a revenue stream that is estimable, the capitalized costs associated with the property are expensed as revenue is recognized.

F-19

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(3 )     Summary of significant accounting policies (continued)

If the Company determines there is no determinable market for a property, it is deemed impaired and is written off. 

Purchased intangible assets and long-lived assets– Intangible assets are capitalized at acquisition costs and intangible assets with definite lives are amortized on the straight-line basis.  The Company periodically reviews the carrying amounts of intangible assets and property in conformance with the Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144).  Under SFAS 144, long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, the impairment charge to be recognized is measured by the excess of the carrying amount over the fair value of the asset.

Advertising costs - Advertising costs are expensed the later of when incurred or when the advertisement is first run.  For the years ended December 31, 2006 and 2005, advertising expenses were $14,017 and $8,042, respectively.

Research and development - Research and development costs, primarily character development costs and design not associated with an identifiable revenue opportunity, are charged to operations as incurred.  For the years ended December 31, 2006 and 2005, research and development expenses were $764,282 and $243,833, respectively.

Income taxes– From inception thru September 14, 2006 the Company operated as a limited liability company and elected to be taxed similar to a partnership.  Accordingly, each member was responsible for reporting its  respective  share  of  the  Company’s  net income  or  loss  for  Federal  and California income tax purposes and the Company did not pay Federal income tax.  From September 15, 2006 forward the Company has accounted for income taxes using the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  The Company was subject to an annual minimum tax of $800 and a fee based on gross receipts in California from inception through September 14, 2006.

Net income/(loss) per share– In accordance with SFAS No. 128 “Earnings Per Share”, basic income per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the periods, excluding shares subject to repurchase or forfeiture.  Diluted income per share increases the shares outstanding for the assumption of the vesting of restricted stock and the exercise of dilutive stock options and warrants, using the treasure stock method, unless the effect is anti-dilutive.  For the years ended December 31, 2006 and 2005, there were no restricted shares, stock options or warrants outstanding.

Recent accounting pronouncements– In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainly in Income Taxes” (“FIN 48”).  FIN 48 applies to all tax positions related to income taxes subject to SFAS 109, “Accounting for Income Taxes”.  Under FIN 48 a company would recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position.  FIN 48 clarifies how a company would measure the income tax benefits from the tax positions that are recognized, provides guidance as to the timing of the de-recognition of previously recognized tax benefits and describes the methods for classifying and disclosing the liabilities within the financial statements for any unrecognized tax benefits.  FIN 48 also addresses when a company should record interest and penalties related to tax positions and how the interest and penalties may be classified within the income statement and presented in the balance sheet.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  For Platinum, FIN 48 will be effective for the first quarter of fiscal 2007.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections , which replaces APB No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements . SFAS No. 154 requires that a voluntary change in accounting principle be applied  retrospectively  with  all prior period financial statements presented as if the new accounting principle had always been used. SFAS No. 154 also requires that a change in method of depreciating or amortizing long-lived non-financial assets be accounted for prospectively, in the period of change and in future periods, if applicable, as a change in estimate, and requires the correction of errors in previously issued financial statements be termed a “restatement”. SFAS No. 154 is effective for accounting changes and correction errors made in fiscal years beginning after December 15, 2005.  The implementation of SFAS 154 is not expected to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, which amends APB Opinion 29 (APB 29), Accounting for Nonmonetary Transactions . The guidance in APB 29 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged and included certain exceptions to that principle. SFAS No.153 amends APB29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. This Statement will be effective for the Company for nonmonetary asset exchanges occurring on or after January 1, 2006.

( 4 ) Property and equipment

Property and equipment are recorded at cost. The cost of repairs and maintenance are expensed when incurred, while expenditures refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized.  Upon asset retirement or disposal, any resulting gain or loss is included in the results of operations.

	December 31,
	2006			2005
Property and equipment, cost:
Office equipment	$	10,804		$	69,633
Furniture and fixtures		107,317			24,108
Computer equipment		105,054			37,974
Software		85,576			3,345
Leasehold improvements		20,557			23,728
		329,308			158,788
Less accumulated depreciation		(60,327	)		(96,819	)
Net property and equipment	$	268,981		$	61,969

F-20

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

( 4 ) Property and equipment (continued)

For the years ended December 31, 2006 and 2005, property and equipment at cost includes assets acquired under capital leases of $203,833 and $21,922, respectively.   Depreciation expense charged to operations for the years ended December 31, 2006 and 2005 were $43,051 and $7,436 including $26,429 and $1,679, applicable to assets acquired under capital leases, respectively.

(5 )     Character development costs

	December 31,
	2006		2005
Balance, beginning of year	$	-	$	248,225
Capitalized costs		-		-
Impairments		-		(248,225	)
Cost of revenue		-		-
Balance, end of year	$	-	$	-

During 2005, the Company determined the character development costs to be impaired and were written off.

(6 )  Other assets

	December 31,
	2006			2005
Web Sites	$	64,000		$	-
Deposits		39,404			1,561
Character Library - Top Cow		350,000			350,000
Character Library Amortization - Top Cow		(30,435	)		-
	$	422,969		$	351,561

(7 ) Due to related party

During 2006, the Company repaid in full the uncollateralized loans of $20,000 received from RIP Media during 2004.  These loans accrued interest at 5% and 6% for the years ended December 31, 2005 and 2006, respectively.  At December 31, 2006 and 2005, the Company owed $243,079 to Brian Altounian for consulting services provided prior to his employment and $20,000 to RIP Media, respectively.

F-21

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(8 )  Short-Term and Long-Term Debt

		December 31,
		2006		2005
Loan payable to shareholder - uncollateralized; payable in monthly installments of interest only at variable interest rates. The note is due on demand at the shareholder's discretion. For the year ended December 31, 2006, the interest rate was 7.9%.	$	745,925	$	-
Loan payable to shareholder - uncollateralized; payable in monthly installments of interest only at variable interest rates. At December 31, 2006 and 2005, the interest rates were 7.708% and 6.151%, respectively. Monthly payments of principal and interest begin on July 1, 2009; final payment due June 1, 2034.		1,294,260		1,308,711
Loan payable to shareholder  - uncollateralized; principal advances accrue at variable interest rates. At December 31, 2006 and 2005, the interest rates were 5.0% and 6.0%, respectively . The loans are due June 30, 2010.		665,000		5,312,621
Loan payable to shareholder  - uncollateralized; principal includes accrud interest.  Effective January 1, 2006, interest became fixed at 3.8% for the remaining life of the loan.  At December 31, 2005, the interest rate was 6.0%.  Monthly payments of principal and interest begin on July 1, 2007; final payment due June 30, 2010.		1,625,000		815,000
Total short-term and long-term debt	$	4,330,185	$	7,436,332

     The following summarizes future cash payment obligations:

Years Ending December 31,	December 31, 2006
2007	$	1,004,078
2008		531,233
2009		560,475
2010		967,272
2011		19,907
Thereafter		1,247,220
Total short-term and long-term debt obligations	$	4,330,185

F-22

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(9 )  Operating and capital leases

The Company has entered into operating leases having expiration dates through 2011 for real estate and various equipment needs, including office facilities, computers, office equipment and a vehicle.

On July 10, 2006, the Company entered into an operating agreement for the lease of real property located in Los Angeles, California.  The agreement has a five year term, commencing September 1, 2006 and ending August 31, 2011.

Rent expense under non-cancelable operating leases were $220,623 and $114,669 for the years ended December 31, 2006 and 2005, respectively.

At December 31, 2006, future minimum rental payments required under non-cancelable operating leases that have initial or remaining terms in excess of one year are as follows:

Years Ending December 31,	Operating Leases
2007	$	430,088
2008		421,416
2009		426,833
2010		442,815
2011		302,855
Thereafter		-
Total minimum obligations	$	2,024,007

The company has various non-cancelable capital leases for computer and office equipment, at cost of $203,833 and $21,922 at December 31, 2006 and 2005, respectively.  The capital leases are secured by the assets which cannot be freely sold until the maturity date of the lease.  Accumulated amortization for equipment under capital lease totaled $11,026 and $1,257 at December 31, 2006 and 2005, respectively.  Future required payments at December 31, 2006 under these leases are as follows:

Years Ending December 31,	Capital Leases
2007	$	74,683
2008		71,535
2009		41,474
2010		32,940
2011		24,705
Thereafter		-
Total minimum obligations	$	245,337
Less amounts representing interest		40,796
Present value of net minimum obligations		204,541
Less current portion		55,820
Long-term portion	$	148,721

F-23

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(10 )  Commitments

During 2004, the Company entered into an agreement with Top Cow Productions, Inc. to acquire certain rights in and to certain comic books, related characters, storylines and intellectual property (the properties).  The current agreement period expires on June 30, 2010.  The Company has the right to extend the agreement for an additional twelve month period for an additional $350,000 and has pre-paid $75,000 toward this extended period.  If the Company enters into production on a particular property, additional fees based on a percentage of the adjusted gross revenue resulting from the production, as defined in the agreement, will be due to the owner.  The agreement is collateralized by a security interest in and to all rights licensed or granted to the Company under this agreement including the right to receive revenue.  The current agreement period cost of $350,000 is included in Other Assets on the balance sheet (Note 6) and is being amortized on a straight-line basis beginning in 2006 when the rights became available for exploitation.

(11 )   Related party transactions

The Company has an exclusive option to enter licensing/acquisition of rights agreements for individual characters, subject to existing third party rights, within the RIP Awesome Library of RIP Media, Inc., a related entity in which Scott Rosenberg is a majority shareholder. The Company did not exercise this right during the years ended December 31, 2006 and 2005.  During 2006, the Company repaid uncollateralized loans of $20,000 in full (Note 7).

Our Chief Executive officer, Scott Mitchell Rosenberg , is permitted to enter into separate producer agreements for our productions through his own loanout corporation, Scott Mitchell Rosenberg Productions, Inc., provided that all compensation that he receives through these agreements are considered as compensation he receives as CEO of the Company and therefore taken into account in setting his annual compensation. The Producer agreements are standard in the industry for heads of media companies and in no way can negatively impact, impede or affect the Company’s ability to make deals with production companies for its properties.

(12 )  Stockholders equity

As of May 1, 2006, the Company issued a five percent (5.0%) ownership interest in Platinum Studios, LLC to Brian Altounian in consideration of a capital contribution in the amount of $500,000.

On September 14, 2006, Scott Mitchell Rosenberg converted $5,731,057 in outstanding principal and interest as a capital contribution in Platinum Studios, LLC in fulfillment of commitments made to the Company prior to the issuance to Brian Altounian.

Platinum Studios LLC filed Articles of Incorporation with the Secretary of the State of California on September 15, 2006, by which Platinum Studios, LLC converted from a California limited liability company into Platinum Studios, Inc., a California corporation.  On September 15, 2006, 135,000,000 common shares were issued for conversion of LLC interests as all members of the limited liability company became shareholders of the corporation, maintaining their same percentage ownership, with no additional contribution required by any of the members to the corporation.

A Private Placement Memorandum was issued on October 12, 2006, offering up to 50,000,000 shares of common stock, $0.0001 par value per share, for sale to Accredited Investors (as defined in the memorandum), at a price of $0.10 per share on a “best efforts” basis, for a total offering price to investors of $5,000,000.  The proceeds of the offering are expected to be used for property acquisitions, marketing and general and administrative expenses.  As of December 31, 2006, the Company had sold 23,056,000 shares resulting in proceeds of $2,305,600.

F-24

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

(13 ) Income taxes

As discussed in Note 3 regarding income taxes, the Company operated as a limited liability company and was taxed as a partnership prior to September 15, 2006.  Effective September 15, 2006, the Company is being taxed as a corporation.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets and liabilities consist of the following components:

	September 15, thru December 31, 2006
Deferred tax assets:
Net operating loss	$	593,828
Reserves, allowances and accruals		142,227
Basis in acquired intangibles		12,123
		748,178
Less: deferred tax asset valuation allowance		(748,178	)
Net deferred tax asset	$	-

The income tax provision differs from the amount of income tax determined by applying the statutory U.S. federal income tax rate to the pre-tax loss as a result of the following:

	September 15, thru December 31, 2006			%
Statutory federal tax rate	$	534,925			34
Expected state tax, net of federal		91,793			6
Effect of permanent differences		(1,785	)		-
Effect of deferred tax asset		-			-
Other		41,355			3
Valuation allowance		(666,288	)		(43	)
Total provision for income taxes	$	-			-

The difference between the deferred tax asset and valuation allowance above is $81,890, which is attributable to the Related Party Payable as of September 14, 2006.

At December 31, 2006, the Company had net operating loss carryforwards of approximately $1,386,000 that may be offset against future taxable income from the year 2006 through 2026.  No tax benefit has been reported in the December 31, 2006 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

F-25

PLATINUM STUDIOS, INC. FORMERLY

PLATINUM STUDIOS, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

( 13 )       Income taxes (continued)

Due to the change in ownership provisions of the Tax reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations.  Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

( 14 )       Subsequent events

On January 18, 2007, the Company entered into a one-year content and license distribution agreement with Menfond Electronic Art & Computer Design Co., LTD to make certain Platinum content available for download over mobile telephony platforms and to mobile and handheld wireless devices and handsets in the People’s Republic of China.

On February 22, 2007, the Company entered into a one-year, non-exclusive, worldwide content and license distribution agreement with Mobinex, LLC to create licensed Avatars from certain Platinum content.  They would be available for download to personal computers (excluding mobile and handheld wireless devices and handsets).

On March 12, 2007, Walt Disney Pictures (“WDP”) exercised their option to acquire all rights, title and interest in and to the unpublished graphic novel entitled “UNIQUE”.

On April 30, 2007, the Company closed the private placement offering, having sold an additional 25,991,250 shares of common stock to accredited investors.  In total, the placement sold 49,047,250 shares of common stock and raised $4,904,725 in additional funds for acquisitions and operations.

On May 29, 2007, a licensing, services and sponsorship agreement was executed between Platinum and AT&T Operations, Inc. (“AT&T”) formalizing AT&T as the “Presenting Sponsor” of the Comic Book Challenge for the years 2007, 2008 and 2009.

F-26

UP TO 49,047,250 SHARES

OF OUR

OF COMMON STOCK

Platinum Studios, Inc.

PROSPECTUS

________, 2007

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our By-laws, as amended, provide to the fullest extent permitted by California law, our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director's or officer's fiduciary duty. The effect of this provision of our By-laws, as amended, is to eliminate our right and our shareholders (through shareholders' derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our By-laws, as amended, are necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act” or “Securities Act”) may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:

NATURE OF EXPENSE AMOUNT

SEC Registration fee	$	203.41
Accounting fees and expenses		15,000.00	*
Legal fees and expenses		40,000.00	*
Miscellaneous		4,796.59	*
TOTAL	$	60,000.00	*
·Estimated

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

In October 2006, we entered into Subscription Agreements with various accredited investors (the “October 2006 Private Placement”) pursuant to which the investors subscribed to purchase a total of 49,047,250 shares of our common stock, resulting in proceeds to the company of $4,904,725, less offering costs of $217,312, which stock we issued to the selling stockholders prior to the date of this prospectus.  We granted registration rights to our investors in our October 2006 Private Placement.

On July 1, 2007, we entered into a Cancellation of Indebtedness Agreement with CEO Scott Mitchell Rosenberg, pursuant to which we agreed to issue 17,208,575 shares in exchange for canceling $1,625,000 in long-term debt and $95,858 in interest expense.

*We claim an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.

II-1

ITEM 27. EXHIBITS.

The following exhibits are included as part of this Form SB-2.

Exhibit No.	Description
3.1	Articles of Incorporation of Platinum Studios, Inc. filed with the Secretary of State of the State of California on September 15, 2006. (Incorporated by reference to the Registrant’s registration statement on Form SB-2 as filed on September 4, 2007)
3.2	Certificate of Amendment of Articles of Incorporation filed with the Secretary of State of the State of California on October 16, 2006 (Incorporated by reference to the Registrant’s registration statement on Form SB-2 as filed on September 4, 2007)
3.3	Bylaws of Platinum Studios, Inc. (Incorporated by reference to the Registrant’s registration statement on Form SB-2 as filed on September 4, 2007)
4.1	Platinum Studios, Inc. 2007 Incentive Plan*
5.1	Opinion of Sichenzia Ross Friedman Ference LLP. *
10.1	Form of Subscription Agreement dated as of October 12, 2006. (Incorporated by reference to the Registrant’s registration statement on Form SB-2 as filed on September 4, 2007)
10.2	Distribution Agreement between Platinum Studios, Inc. and Top Cow Productions, Inc. effective as of January 1, 2007*
10.3	Publisher Distribution Agreement between Ingram Periodicals Inc. and Platinum Studios, Inc.  dated as of 7/13/07*
10.4	Co-Development, Financing and Production Agreement dated as of December 19, 2006 between Platinum Studios, Inc. and Arclight Films International PTY, LTD. *
10.5	Cancellation of Indebtedness Agreement dates as of July 1, 2007 (Incorporated by reference to the Registrant’s registration statement on Form SB-2 as filed on September 4, 2007)
10.6	Option Agreement between Platinum Studios, LLC and Top Cow Productions dated as of August 1, 2004.*
10.7	Publishing License Agreement between Kiss Catalog Ltd. and Platinum Studios LLC dated April 28, 2005.*
10.8	Lease Agreement between Douglas Emmett 1995, LLC and Platinum Studios, LLC dated July 10, 2006*
10.9	Bonelli Rights Agreements dated as of July 2, 1997*
10.10	Agreement between Diamond Comic Distributors, Inc. and Platinum Studios, Inc. dated August 30, 2007*
10.11	Licensing Services and Sponsorship Agreement dated May 29, 2007 between AT&T and Platinum Studios, Inc.*
10.12	Option Agreement dated September 16, 2006 by and among Scott Mitchell Rosenberg, RIP Media and Platinum Studios, Inc.*
10.13	Agreement with Escape Artists Productions, LLC dated as of February 15, 2002*
10.14	Option Acquisition of Rights Agreement with Walt Disney Pictures dated as of December 11, 2003*
10.15	Title and Option Agreement with Dimensions Films dated as of November 2, 2004*
10.16	First Look Agreement with Miramax Film Corp dated as of December 15, 1998*
23.1	Consent of Sichenzia Ross Friedman Ference LLP (included in Exhibit 5.1).
23.2	Consent of HJ Associates & Consultants, LLP*
24.1	Power of Attorney (included on signature page herewith)

*Filed herewith.

II-2

ITEM 28. UNDERTAKINGS.

The undersigned registrant hereby undertakes to:

(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");

(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and

(iii) Include any additional or changed material information on the plan of distribution.

(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.

(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

(4) For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: 

(i) Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and

(iv) Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.

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( 5) For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.

 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(6)     Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A , shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on October  31, 2007.

PLATINUM STUDIOS, INC.
By:	/s/ Scott Mitchell Rosenberg
	Name: Scott Mitchell Rosenberg
	Chief Executive Officer(Principal Executive Officer)

By:	/s/ Brian K. Altounian
	Name Brian K. Altounian
	President, Chief Operating Officer & Principal Financial and Accounting Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian Altounian his true and lawful attorneys-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this registration statement and to sign a registration statement pursuant to Section 462(b) of the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:

SIGNATURE	TITLE	DATE
/S/ SCOTT MITCHELL ROSENBERG	CHAIRMAN AND CHIEF EXECUTIVE OFFICER	October  31, 2007
SCOTT MITCHELL ROSENBERG
/S/ BRIAN K. ALTOUNIAN	PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR	October  31, 2007
BRIAN K. ALTOUNIAN
/S/ JILL ZIMMERMAN	DIRECTOR	October  31, 2007
JILL ZIMMERMAN

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EX-4.1

Exhibit 4.1

PLATINUM STUDIOS, INC.

2007 INCENTIVE PLAN

SECTION 1.Purpose of the Plan

The Platinum Studios, Inc. 2007 Incentive Plan (the “Plan”) is intended to promote the interests of Platinum Studios, Inc., a California corporation (the “Company”), and its shareholders by encouraging officers, employees, non-employee directors and consultants of the Company and its Affiliates to acquire or increase their equity interests in the Company and to provide a means whereby they may develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to remain with and devote their best efforts to the business of the Company thereby advancing the interests of the Company and its stockholders. The Board of Directors of the Company also contemplates that through the Plan, the Company and its Affiliates will be better able to attract and retain the services of individuals who are essential for the growth and profitability of the Company. The Plan provides for payment of various forms of incentive compensation and accordingly is not intended to be a plan that is subject to the Employee Retirement Income Security Act of 1974, as amended, and shall be administered accordingly.

SECTION 2.Definitions.

As used in the Plan, the following terms shall have the meanings set forth below:

“Affiliate” shall mean (i) any “parent corporation” of the Company (as defined in Section 424(e) of the Code), (ii) any “subsidiary corporation” of any such parent corporation (as defined in Section 424(f) of the Code) of the Company and (iii) any trades or businesses, whether or not incorporated, which are members of a controlled group or are under common control (as defined in Sections 414(b) or (c) of the Code) with the Company, substituting (for the purpose of determining whether Options or Other Stock-Based Awards that may be subject to Section 409A of the Code are derived in respect of “stock of the service recipient” within the meaning of that term under regulatory guidance issued by the appropriate governmental authority under Section 409A of the Code) “50 percent” in place of “80 percent” in determining a controlled group under Section 414(b) of the Code and in determining trades or businesses that are under common control for purposes of Section 414(c) of the Code.

“Award” shall mean any Option, Restricted Stock, Performance Award, Bonus Shares or Other Stock-Based Award.

“Award Agreement” shall mean any written agreement, contract, or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

“Board” shall mean the Board of Directors of the Company.

“Bonus Shares” shall mean an award of Shares granted pursuant to Section 6(d) of the Plan.

“Change in Control” shall mean the occurrence of any one (1) of the following events:

(a)any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified in Section 13(d) and 14(d) of the Exchange Act) other than (i) the Company or any of its subsidiaries; (ii) any employee benefit plan of the Company or any of its subsidiaries; (iii) or any Affiliate; (iv) a company owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company; or (v) an underwriter temporarily holding securities pursuant to an offering of such securities (a “Person”), becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the shares of voting stock of the Company then outstanding;

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(b)the consummation of any merger, organization, business combination or consolidation of the Company or one (1) of its subsidiaries with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination or consolidation more than fifty percent (50%) of the combined voting power of the voting securities of the Company or the surviving company or the parent of such surviving company;

(c)the consummation of a sale, lease, transfer, conveyance or other disposition (including by merger or consolidation) by the Company in one (1) or a series of related transactions, of all or substantially all of the Company’s assets, other than any such transaction if the holders of the voting securities of the Company outstanding immediately prior thereto hold securities immediately thereafter which represent more than fifty percent (50%) of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets;

(d)the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company; or

(e)individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election by the Board was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (i) an actual or threatened election contest (as such terms are used in Rule 14A-11 of Regulation 14A promulgated under the Exchange Act) with respect to the election or removal of directors or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (ii) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board.

Solely with respect to any Award that is subject to Section 409A of the Code, this definition is intended to comply with the definition of change in control under Section 409A of the Code as in effect commencing January 1, 2005 and, to the extent that the above definition does not so comply, such definition shall be void and of no effect and, to the extent required to ensure that this definition complies with the requirements of Section 409A of the Code, the definition of such term set forth in regulations or other regulatory guidance issued under Section 409A of the Code by the appropriate governmental authority is hereby incorporated by reference into and shall form part of this Plan as fully as if set forth herein verbatim and the Plan shall be operated in accordance with the above definition of Change in Control as modified to the extent necessary to ensure that the above definition complies with the definition prescribed in such regulations or other regulatory guidance insofar as the definition relates to any Award that is subject to Section 409A of the Code.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder.

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“Committee” shall mean the compensation committee of the Board which, for any period in which the Company is subject to the reporting requirements of the Exchange Act, shall consist of not less than two (2) members of the Board, each of whom shall qualify as a “non-employee director” (as that term is defined in Rule 16b-3 of the General Rules and Regulations under the Exchange Act) appointed by and serving at the pleasure of the Board to administer the Plan or, if none, the Board; provided however, that with respect to any Award granted to a Covered Employee which is intended to be “performance-based compensation” as described in Section 162(m)(4)(C) of the Code, the Committee shall consist solely of two (2) or more “outside directors” as described in Section 162(m)(4)(C)(i) of the Code.

“Company” shall mean the corporation described in Section 1 of the Plan or any successor thereto that assumes and continues the Plan.

“Consultant” shall mean any individual, other than a Director or an Employee, who renders consulting services to the Company or an Affiliate for a fee.

“Covered Employee” shall mean any of the Chief Executive Officer of the Company and the four (4) highest paid officers of the Company other than the Chief Executive Officer as described in Section 162(m)(3) of the Code or any individual Consultant, Director or other Employee, or class of Consultants, Directors or Employees, who the Committee specifies in an Award shall be treated as a Covered Employee.

“Director” shall mean a member of the Board who is not an Employee of the Company.

“Effective Date” means the date that the Plan is (i) adopted by the Board; and (ii) approved by shareholders of the Company, provided that such shareholder approval occurs not more than one (1) year prior to or after the date of such adoption. The provisions of the Plan are applicable to all Awards granted on or after the Effective Date.

“Employee” shall mean any employee of the Company or an Affiliate.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean, with respect to Shares, the closing sales price of a Share on the applicable date (or if there is no trading in the Shares on such date, on the next preceding date on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the Committee). In the event the Shares are not publicly traded at the time a determination of its fair market value is required to be made hereunder, the determination of fair market value shall be made in good faith by the Committee.

“Option” shall mean an option granted under Section 6(a) of the Plan. Options granted under the Plan may constitute “incentive stock options” for purposes of Section 422 of the Code or nonqualified stock options.

“Other Stock-Based Award” shall mean an award granted pursuant to Section 6(e) of the Plan that is not otherwise specifically provided for, the value of which is based in whole or in part upon the value of a Share.

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“Participant” shall mean any Director, Employee or Consultant granted an Award under the Plan.

“Performance Award” shall mean any right granted under Section 6(c) of the Plan.

“Performance Objectives” means the objectives, if any, established by the Committee that are to be achieved with respect to an Award granted under this Plan, which may be described in terms of Company-wide objectives, in terms of objectives that are related to performance of a business, division, subsidiary, department, unit or function within the Company or an Affiliate in which the Participant receiving the Award is employed or in individual or other terms, and which will relate to the period of time determined by the Committee. Which objectives to use with respect to an Award, the weighting of the objectives if more than one (1) is used, and whether the objective is to be measured against a Company-established budget or target, an index or a peer group of companies, shall be determined by the Committee in its discretion at the time of grant of the Award. One or more of the following business criteria for the Company shall be used by the Committee in establishing Performance Objectives for Performance Awards granted to a Participant: (i) earnings per share; (ii) increase in price per share, (iii) increase in revenues; (iv) increase in cash flow; (v) return on net assets; (vi) return on assets; (vii) return on investment; (viii) return on equity; (ix) economic value added; (x) gross margin; (xi) net income; (xii) pretax earnings; (xiii) pretax earnings before interest, depreciation, depletion and amortization; (xiv) pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (xv) operating income; (xvi) total stockholder return; (xvii) debt reduction; and (xviii) any of the above goals determined on the absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or components thereof or a group of comparable companies. A Performance Objective need not be based on an increase or a positive result and may include, for example, maintaining the status quo or limiting economic losses.

“Person” shall mean an individual or a corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

“Plan” means the plan described in Section 1 of the Plan and set forth in this document, as amended from time to time.

“Restricted Period” shall mean the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and/or is not exercisable by the Participant.

“Restricted Stock” shall mean any Share, prior to the lapse of restrictions thereon, granted under Sections 6(b) of the Plan.

“Rule 16b-3” shall mean Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.

“SEC” shall mean the Securities and Exchange Commission, or any successor thereto.

 “Shares” or “Common Shares” or “Common Stock” shall mean the common stock of the Company, $.0001 par value, and such other securities or property as may become the subject of Awards under the Plan.

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SECTION 3.Administration

The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. No member of the Committee shall vote or act upon any matter relating solely to himself. Grants of Awards to members of the Committee must be ratified by the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any stockholder and any Employee, Consultant or Director. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted hereunder and the members of the Board and the Committee shall be entitled to indemnification and reimbursement by the Company and its Affiliates in respect of any claim, loss, damage or expense (including legal fees) arising therefrom to the full extent permitted by law.

SECTION 4.Shares Available for Awards

(a)Shares Available. Subject to adjustment as provided in Section 4(c), the number of Shares with respect to which Awards may be granted under the Plan shall be Thirty Million (30,000,000) Shares. In addition, during any calendar year in which Section 162(m) of the Code shall apply to the Company, the number of Shares reserved for issuance under the Plan which are subject to Options that may be granted to any one (1) Participant shall not exceed 30,000,000 Shares.  If any Award is exercised, paid, forfeited, terminated or canceled without the delivery of Shares, then the Shares covered by such Award, to the extent of such exercise, payment, forfeiture, termination or cancellation, shall again be Shares with respect to which Awards may be granted; provided, however, that Shares not delivered due to withholding or payment of taxes or payment of exercise price shall not again be Shares with respect to which Awards may be granted.

(b)Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award shall consist of authorized and unissued Shares.  No fractional Shares shall be issued under the Plan; payment for any fractional Shares shall be made in cash.

(c)Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) with respect to which Awards may be granted; (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards; and (iii) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award.

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SECTION 5.Eligibility

Any Employee, Director or Consultant shall be eligible to be designated a Participant and receive an Award under the Plan.

SECTION 6.Awards

(a)Options. Subject to the provisions of the Plan, the Committee shall have the authority to determine the Participants to whom Options shall be granted, the number of Shares to be covered by each Option, the purchase price therefor and the conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.

(i)Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee at the time the Option is granted, but shall not be less than one hundred percent (100%) of the Fair Market Value per Share on such grant date. If any Employee to whom an Option that is an incentive stock option is granted owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent corporation, within the meaning of Section 424(e) of the Code, or any subsidiary corporation of the Company, within the meaning of Section 424(f) of the Code, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant and the option term shall not exceed five (5) years measured from the date of grant.  For purposes of the immediately preceding sentence, the attribution rules under Section 424(d) of the Code shall apply for purposes of determining an Employee’s ownership.

(ii)Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part (which may include the achievement of one (1) or more Performance Objectives), and the method or methods by which, and the form or forms in which payment of the exercise price with respect thereto may be made. In that connection, in order to exercise an Option, the person or persons entitled to exercise it shall deliver to the Company payment in full for (A) the shares being purchased and (B) unless other arrangements have been made with the Committee, any required withholding taxes. The payment of the exercise price for each Option shall either be (x) in cash or by check payable and acceptable to the Company (y) with the consent of the Committee, by tendering to the Company shares of Common Stock owned by the person for more than six (6) months having an aggregate Fair Market Value as of the date of exercise that is not greater than the full exercise price for the shares with respect to which the Option is being exercised and by paying any remaining amount of the exercise price as provided in (A) above, or (z) with the consent of the Committee and compliance with such instructions as the Committee may specify, by delivering to the Company and to a broker a properly executed exercise notice and irrevocable instructions to such broker to deliver to the Company cash or a check payable and acceptable to the Company to pay the exercise price and any applicable withholding taxes. Upon receipt of the cash or check from the broker, the Company will deliver to the broker the shares for which the Option is exercised. In the event that the person elects to make payment as allowed under clause (z) above, the Committee may, upon confirming that the optionee owns the number of additional shares being tendered, authorize the issuance of a new certificate for the number of shares being acquired pursuant to the exercise of the Option less the number of shares being tendered upon the exercise and return to the person (or not require surrender of) the certificate for the shares being tendered upon the exercise. The date of sale of the shares by the broker pursuant to a cashless exercise under (z) above shall be the date of exercise of the Option.

(iii)Option Repricing. With shareholder approval, the Committee, in its absolute discretion, may grant to holders of outstanding Options that are not incentive stock options, in exchange for the surrender and cancellation of such Options that are not incentive stock options, new Options that are not incentive stock options having exercise prices lower (or higher with any required consent) than the exercise price provided in the Options so surrendered and canceled and containing such other terms and conditions as the Committee may deem appropriate.

(iv)Incentive Stock Options. The terms of any Option granted under the Plan intended to be an incentive stock option shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision, and any regulations promulgated thereunder. Incentive stock options may be granted only to employees of the Company, while it is a “corporation” described in Section 7701(a)(3) of the Code and Treas. Reg. Section 1.421-1(i)(l), and its parent corporation and subsidiary corporations, within the meaning of Section 424 of the Code. To the extent the aggregate Fair Market Value of the Shares (determined as of the date of grant) of an Option to the extent exercisable for the first time during any calendar year (under all plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such Option Shares in excess of $100,000 shall not be incentive stock options. No Option that is an incentive stock option shall be exercisable more than three (3) months after the Participant ceases to be an Employee for any reason other than death or disability, or more than one (1) year after the Participant ceases to be an Employee due to death or disability.

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(b)Restricted Stock. Subject to the provisions of the Plan, the Committee shall have the authority to determine the Participants to whom Restricted Stock shall be granted, the number of Shares of Restricted Stock to be granted to each such Participant, the duration of the Restricted Period during which, and the conditions, including Performance Objectives, if any, under which if not achieved, the Restricted Stock may be forfeited to the Company, and the other terms and conditions of such Awards.

(i)Dividends. Dividends paid on Restricted Stock may be paid directly to the Participant or may be subject to risk of forfeiture and/or transfer restrictions during any period established by the Committee in its discretion.

(ii)Registration. Any Restricted Stock may be evidenced in such manner as the Committee shall deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.

(iii)Forfeiture and Restrictions Lapse. Except as otherwise determined by the Committee or the terms of the Award that granted the Restricted Stock, upon termination of a Participant’s employment (as determined under criteria established by the Committee) for any reason during the applicable Restricted Period, all Restricted Stock shall be forfeited by the Participant and reacquired by the Company. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be issued to the holder of Restricted Stock promptly after the applicable restrictions have lapsed or otherwise been satisfied.

(iv)Transfer Restrictions. During the Restricted Period, Restricted Stock will be subject to the limitations on transfer as provided in Section 6(f)(b)(iii).

(c)Performance Awards. The Committee shall have the authority to determine the Participants who shall receive a Performance Award, which shall confer on the Participant the right to receive payment of such Award, in whole or in part, upon the achievement of such Performance Objectives during such performance periods as the Committee shall establish with respect to the Award.

(i)Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the Performance Objectives to be achieved during any performance period, the length of any performance period, the amount of any Performance Award and the amount of any payment or transfer to be made pursuant to any Performance Award.

(ii)General. In the case of any Award granted to a Covered Employee, Performance Objectives shall be designed to be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder (including Treasury Regulations sec. 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee are such that the achievement of performance goals is “substantially uncertain” at the time of grant. The Committee may determine that such Performance Awards shall be granted and/or settled upon achievement of any one (1) performance goal or that two (2) or more of the performance goals must be achieved as a condition to the grant and/or settlement of such Performance Awards. Performance Objectives may differ among Performance Awards granted to any one (1) Participant or for Performance Awards granted to different Participants.

(iii)Performance Period; Timing for Establishing Performance Goals. Achievement of Performance Objectives in respect of Performance Awards that are granted to a Covered Employee and intended to meet the requirements of Section 162(m) of the Code shall be measured over a performance period of not less than six (6) months and not more than ten (10) years, as specified by the Committee. Performance Objectives in the case of any Award granted to a Participant shall be established not later than ninety (90) days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

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(iv)Settlement of Performance Awards; Other Terms. After the end of each performance period, the Committee shall determine the amount, if any, of Performance Awards payable to each Participant based upon achievement of business criteria over a performance period. Except as may otherwise be required under Section 409A of the Code, payment described in the immediately preceding sentence shall be made by the later of (i) the date that is 2 ½ months after the end of the Participant’s first taxable year in which the Performance Award is earned and payable under the Plan and (ii) the date that is 2 ½ months after the end of the Company’s first taxable year in which the Performance Award is earned and payable under the Plan, and such payment shall not be subject to any election by the Participant to defer the payment to a later period. The Committee may not exercise discretion to increase any such amount payable in respect of a Performance Award which is intended to comply with Section 162(m) of the Code. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of Performance Awards.

(v)Written Determinations. All determinations by the Committee as to the establishment of Performance Objectives, the amount of any Performance Award, and the achievement of Performance Objectives relating to Performance Awards shall be made in a written agreement or other document covering the Performance Award. The Committee may not delegate any responsibility relating to such Performance Awards that are granted to a Covered Employee and intended to meet the requirements of Section 162(m) of the Code.

(vi)Status of Performance Awards under Section 162(m) of the Code. It is the intent of the Company that Performance Awards granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) of the Code and regulations thereunder (including Treasury Regulations sec. 1.162-27 and successor regulations thereto) shall constitute “performance-based compensation” within the meaning of Section 162(m) of the Code and regulations thereunder. Accordingly, the terms of this Section shall be interpreted in a manner consistent with Section 162(m) of the Code and regulations thereunder. Notwithstanding the foregoing, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean any person designated by the Committee, at the time of grant of a Performance Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan as in effect on the date of adoption or any agreements relating to Performance Awards that are intended to comply with Section 162(m) of the Code does not comply or is inconsistent with the requirements of Section 162(m) of the Code or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

(d)Bonus Shares. The Committee shall have the authority, in its discretion, to grant Bonus Shares to Participants. Each Bonus Share shall constitute a transfer of an unrestricted Share to the Participant, without other payment therefor, as additional compensation for the Participant’s services to the Company.

(e)Other Stock-Based Awards. The Committee may also grant to Participants an Other Stock-Based Award, which shall consist of a right which is an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares as is deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan, including the Performance Objectives, if any, applicable to such Award, the Committee shall determine the terms and conditions of any such Other Stock-Based Award. Notwithstanding any other provision of the Plan to the contrary, any Other Stock-Based Award shall contain terms that (i) are designed to avoid application of Section 409A of the Code or (ii) are designed to avoid adverse tax consequences under Section 409A should that Code section apply to such Award.

(f)General Provisions Applicable to all Awards.

(i)Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company or any Affiliate. No Award shall be issued in tandem with another Award if the tandem Awards would result in adverse tax consequences under Section 409A of the Code. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

(ii)Forms of Payment by Company Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments.

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(iii)Limits on Transfer of Awards.

A.Except as provided in (C) below, each Award, and each right under any Award, shall be exercisable only by the Participant during the Participant’s lifetime, or by the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution. Notwithstanding anything in the Plan to the contrary, a nonqualified stock option shall be transferable pursuant to a domestic relations order.

B.Except as provided in (C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.

C.Notwithstanding anything in the Plan to the contrary, to the extent specifically provided by the Committee with respect to a grant, a nonqualified stock option may be transferred to immediate family members or related family trusts, or similar entities on such terms and conditions as the Committee may establish. In addition, Awards may be transferred by will or the laws of descent and distribution.

(iv)Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided, that in no event shall the term of any Award exceed a period of ten (10) years from the date of its grant (or such shorter term as may be required in respect of an Option that is an incentive stock option under Section 422 of the Code).

(v)Share Certificates. All certificates for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Shares or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(vi)Delivery of Shares or other Securities and Payment by Participant of Consideration. No Shares or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any exercise price, tax payment or tax withholding) is received by the Company. Such payment may be made by such method or methods and in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards or other property, withholding of Shares, cashless exercise with simultaneous sale, or any combination thereof; provided that the combined value, as determined by the Committee, of all cash and cash equivalents and the Fair Market Value of any such Shares or other property so tendered to the Company, as of the date of such tender, is at least equal to the full amount required to be paid pursuant to the Plan or the applicable Award Agreement to the Company.

(vii)Code Section 409A.  Notwithstanding any other provision of the Plan to the contrary, any Award shall contain terms that (i) are designed to avoid application of Section 409A of the Code to the Award or (ii) are designed to avoid adverse tax consequences under Section 409A of the Code should that Code Section apply to the Award.

SECTION 7.Amendment and Termination

Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan:

(a)Amendments to the Plan. The Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan without the consent of any shareholder, Participant, other holder or beneficiary of an Award, or other Person; provided, however, no such amendment may be made without stockholder approval to the extent that such approval is required by (i) applicable legal requirements or (ii) the requirements of any securities exchange or market on which the Shares are listed. Notwithstanding the foregoing, the Board or the Committee may amend the Plan in such manner as it deems necessary in order to permit Awards to meet the requirements of the Code or other applicable laws, or to prevent adverse tax consequences.

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(b)Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 7(c), in any Award shall materially reduce the benefit to Participant without the consent of such Participant.

(c)Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

SECTION 8.Adjustments Upon Changes in Stock/Change in Control

(a)Adjustments Upon Changes in Stock. If any change is made in the Shares subject to the Plan, or subject to any Award, without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan pursuant to Section 4(c) and the outstanding Awards will be appropriately adjusted in the class(es) and number of shares and exercise price per share of stock subject to such outstanding Awards. Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a “transaction not involving the receipt of consideration by the Company”.)

(b)Change in Control. Unless otherwise provided in the Award, in the event of a Change in Control described in clauses (b), (c) or (d) of the definition of Change in Control under Section 2 of the Plan, (i) if the Company does not survive as an independent corporation (excluding as a subsidiary), the surviving corporation or an affiliate of such surviving corporation shall assume the Awards outstanding under the Plan or substitute similar awards (including an award to acquire the same consideration paid to the stockholders of the Company in the transaction effecting the Change in Control) for those outstanding under the Plan, or (ii) if the Company continues as an independent corporation (excluding as a subsidiary), such Awards shall continue in full force and effect. In the event of a Change in Control in which the Company does not survive as an independent corporation (excluding as a subsidiary), if any surviving corporation and its affiliates refuse to assume or continue the Awards, or to substitute similar awards for those outstanding under the Plan, then unless otherwise provided in the Award:

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(i)All Options then outstanding shall become immediately vested and fully exercisable immediately prior to the Change in Control, notwithstanding any provision therein for exercise in installments;

(ii)All restrictions and conditions of all Restricted Stock then outstanding shall be deemed satisfied, and the Restricted Period or other limitations on payment in full with respect thereto shall be deemed to have expired immediately prior to the date of the Change in Control; and

(iii)All outstanding Performance Awards and any Other Stock or Performance-Based Awards shall become fully vested, deemed earned in full immediately prior to the date of the Change in Control and promptly paid to the Participants as of the date of the Change of Control, without regard to payment schedules and notwithstanding that the applicable performance cycle, retention cycle or other restrictions and conditions shall not have been completed or satisfied.

(c)Right of Cash-Out. If approved by the Board prior to or within thirty (30) days after such time as a Change in Control shall be deemed to have occurred, the Board shall have the right for a forty-five (45) day period immediately following the date that the Change in Control is deemed to have occurred to require all, but not less than all, Participants to transfer and deliver to the Company all Awards previously granted to the Participants in exchange for an amount equal to the “cash value” (defined below) of the Awards. Such right shall be exercised by written notice to all Participants. For purposes of this Section, the cash value of an Award shall equal the sum of (i) all cash to which the Participant would be entitled upon settlement or exercise of any Award which is not an Option and (ii) in the case of any Award that is an Option, the excess of the “market value” (defined below) per share over the option price, if any, multiplied by the number of shares subject to such Award. For purposes of the preceding sentence, “market value” per share shall mean the higher of (i) the average of the Fair Market Value per share of Common Stock on each of the five (5) trading days immediately following the date a Change in Control is deemed to have occurred or (ii) the highest price, if any, offered in connection with the Change in Control. The amount payable to each Participant by the Company pursuant to this Section shall be in cash or by certified check and shall be reduced by any taxes required to be withheld.

SECTION 9.General Provisions

(a)No Rights to Awards. No Director, Employee, Consultant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Employees, Consultants, or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each recipient.

(b)Withholding. The Company or any Affiliate is authorized to withhold at the minimum statutory rate from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, Shares that would otherwise be issued pursuant to such Award, other Awards or other property) of any applicable taxes payable in respect of an Award, its exercise, the lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. In addition, the Committee may provide, in an Award Agreement, that the Participant may direct the Company to satisfy such Participant’s tax obligation through the “constructive” tender of already-owned Shares or the withholding of Shares otherwise to be acquired upon the exercise or payment of such Award.

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(c)No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

(d)Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of California and applicable federal law.

(e)Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

(f)Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance of transfer or such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.

(g)No Trust or Fund Created. Neither the Plan nor the Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any Affiliate.

(h)No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

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(i)Securities Laws Compliance. Unless the Shares have been registered under the Securities Act of 1933 (and, in the case of any Participant who may be deemed an affiliate of the Company for securities law purposes, such Shares have been registered under such Act for resale by such Participant), or the Company has determined that an exemption from registration is available, the Company may require prior to and as a condition of the exercise or payment of any Award that (i) the Participant desiring to exercise or receive payment such Award give the Company written notice thereof and that such notice may not be given by the Participant until forty-five (45) days thereafter (which time period may be waived by the Committee in its sole discretion) in order to allow the Company the opportunity to provide to such Participant any disclosure materials, or to make such filings, as may be required under federal and state securities laws and (ii) the Participant desiring to exercise or be paid such Award furnish the Company with a written representation in a form prescribed by the Committee to the effect that such person is acquiring said Shares solely with a view to investment for his or her own account and not with a view to the resale or distribution of all or any part thereof, and that such person will not dispose of any of such Shares otherwise than in accordance with the provisions of Rule 144 under the Act unless and until either the Shares are registered under the Act or the Company is satisfied that an exemption from such registration is available.

(j)Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

(k)Code Section 409A. Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under the Plan would result in the imposition of an applicable tax under Code Section 409A and related regulations and Treasury pronouncements (“Section 409A”), that Plan provision or Award may be reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect the Participant’s rights to an Award.

(l)No Guarantee of Tax Consequences. None of the Board, the Company nor the Committee makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any person participating or eligible to participate hereunder.

SECTION 10.Term of the Plan

No Award shall be granted under the Plan after the tenth (10^th) anniversary of the date the Plan is adopted by the Board as the Plan shall expire on that date unless earlier terminated pursuant to Section 7. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such expiration or termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such expiration or termination date.

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EX-5.1

EXHIBIT 5.1

October  31, 2007

VIA ELECTRONIC TRANSMISSION

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

RE: Platinum Studios, Inc.

Form SB-2 Registration Statement (File No. 333-145871)

Ladies and Gentlemen:

We refer to the above-captioned registration statement on Form SB-2 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), filed by Platinum Studios, Inc., a California corporation (the “Company”), with the Securities and Exchange Commission.

We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such latter documents.

Based on our examination mentioned above, we are of the opinion that the outstanding shares of common stock being sold pursuant to the Registration Statement are legally and validly issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under “Legal Matters” in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission.

Very truly yours,
By:	/s/ Sichenzia Ross Friedman Ference
	Sichenzia Ross Friedman Ference LLP

EX-10.2

Exhibit 10.2

DISTRIBUTION AGREEMENT

The Distribution Agreement (the "Agreement") is entered into as of March 2007 (the "Execution Date") but effective as or January 1, 2007 (the Effective Date") between Platinum Studios, Inc. ("Platinum") and Top Cow Productions, Inc. ("Top Cow"), with reference to the following:

WHEREAS, Top Cow is party to a print-publishing distribution agreement with Image Comics, Inc. ("Image"), which is a party to a Sales Agent Agreement with Diamond Comic Distributors, Inc. ("Diamond");

WHEREAS. Platinum and Top Cow desire to enter into an agreement pursuant to which Top Cow will cause the distribution of certain of Platinum's comics and graphic novels through Diamond's agreement with Image, all under the terms and conditions set forth below;

1.(a)           Top Cow shall distribute printed copies of Platinum's comic-hook and graphic-novel properties that have been designated by Platinum and approved by Top Cow ("Comic Properties") through Diamond (via the Image's agreement with Diamond) during the Term (defined below), which approval shall not be unreasonably withheld; provided that, if at anytime during the Term, the majority of Top Cow's own titles arc solicited in a section of previews other than the Image section, then Top Cow shall provide Platinum with the similar placement through Diamond (but subordinate to Top Cow's own titles) that Top Cow receives for its own titles. Comic Properties shall include, without limitation, Platinum's "Kiss" Comic Properties ("Kiss Tides"). As part of its services hereunder, Top Cow shall provide the services listed in Exhibit ''A" attached hereto. Platinum grants to Top Cow all rights necessary (whether under copyright, trademark, or otherwise) to perform all of Top Cow's obligations hereunder.

(b)           If, at any time during the 'Fenn, Top Cow enters into an agreement to distribute all or substantially all of its printed comics to the "direct market" through channels other than Diamond ("Other Distribution Channels"), Platinum shall have the option to have the Comic Properties distributed through such Other Distribution Channels, as well, on terms to be negotiated in good faith.

2.Top Cow shall not be obligated to distribute hereunder more than 60 Comic Properties per year ("Comics Titles Maximum"), excluding variant-cover and limited editions of Comic Properties ("Variant Covers"). Notwithstanding the foregoing, Top Cow shall also distribute hereunder up to 24 Kiss Titles ("Kiss 'Titles Maximum") per year.

(b)           Subject to timely delivery, Top Cow's approval as set forth in Section

(a) above, and no more than one full-page per item, and provided Platinum shall solicitat least two titles for the month in question, Top Cow shall provide two full pages in Diamond's "Previews" catalogue (the "Diamond Catalogue") each month of the Term for Comic Properties solicitations.

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3. During the Term:

^(a).1^-op Cow shall he responsible for arranging the printing of all Comic Properties listed with Diamond pursuant hereto at prices at least equal to the prices charged by the same printer for Top Cow's own regular titles, but Top Caw's obligations extend only to standard printing, and do not include enhanced versions (such as, without limitation, 3D effects, foils, or other special effects);

(b)Top Cow shall provide to Platinum at no additional charge forty-four (44) standard-sized pages of standard comic-book lettering (no obligation to hand letter) per month of the Term for Comic Properties.

(c)           Top Cow shall be responsible for collecting, either directly or via Image,

all monies payable to Platinum by Diamond for sales of Comic Properties and Ancillary Products hereunder; but Top Cow shall have no obligation to litigate, w arbitrate, or to use third-party collectors:, provided, however, that Top Cow covenants and agrees to employ the general level of efforts to collect monies payable to Platinum hereunder as it uses to collect monies payable directly to Top Cow for Top Cow's own properties from Image and/or Diamond.

4.          Top Cow shall be entitled to receive the following:

(a)           $3,000.00 for each Comic Property listed with Diamond (the "Listing

Fee"), provided that no Listing Fee shall be payable for variant covers of a Comic Property listed with Diamond. The Listing lee for a Comic Property shall he due and payable to Top Cow as of the date that Diamond publishes its preview book listing such Comic Property.

(b)           ten percent (10%) of Net Revenues, defined below ("Top Cow Receipts"); "Net Revenues" shall mean the gross revenues paid or credited by Diamond to Image or Top Cow for sales of Comic Properties and Variant Covers ("Gross Revenues") less only

(A) the actual, documented, out-of-pocket printing eosts,

(B) Diamond's direct marketing set-vices costs which are incurred at the request of Platinum; (C) audit and other documented collection costs (pro-rated); (D) the Listing Fee, but only if not previously paid by Platinum as set forth in Section 4 (a) above; (E) other directly related costs incurred by Top Cow or Image in connection with the Comic Properties that have been approved by Platinum (the "Costs"). Top Cow does not represent or warrant that there will he any Net Revenues; and

(c)           a nonrefundable fee of Fifty Thousand US Dollars (US $50,000) (the "Distribution Fee") payable on the execution hereoll The timely receipt of portion of this fee shall be a condition precedent to the continuing effectiveness of any of Top Cow's obligations hereunder.

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(d)           Not more frequently than once per calendar month, Top Cow shall provide Platinum with an invoice for Costs not recouped from Gross Revenues, if any, together with any appropriate documentation. Platinum shall remit payment to Top Cow for such recouped Costs within thirty days following receipt of such invoice. Any disputes shall be resolved via arbitration as set forth in Section 11(c) below.

5.           (a)           Within thirty days of receipt by Top Cow of Gross Revenues (either

directly from Diamond or from Image), Top Cow shall remit to Platinum 90% of Net Revenues (the "Platinum Receipts") derived from those Gross Revenues hereunder.

(b)Within thirty (30) days of the end of each calendar month during the Term and, to the extent applicable, following any expiration or termination of this Agreement, Top Cow shall provide to Platinum a written report of all Net Revenues received by image and/or 'Fop Cow during said calendar month, together with a. calculation of the Platinum Book Receipts and Platinum Product Receipts due thereon, including all deductions made for Costs broken out on a title-by-title and product-by­product basis (each, a "Monthly Fee Report"). Simultaneously with the delivery of the Monthly Fee Report to Platinum. Top Cow shall remit to Platinum the Platinum Book Receipts and the Platinum Product Receipts shown on such Monthly lee Report to he due and owing to Platinum, less any Platinum Book Receipts and/or Platinum Product Receipts already paid by Top Cow in respect of such Monthly Fee Report pursuant to Section 5(a) above. All amounts payable hereunder are to be in United States Dollars.

(c)           Audit Rights. Platinum shall have the right during the Term and, to the extent applicable, following any expiration or termination of this Agreement, at its own expense and during reasonable business hours, to have an independent certified public accounting firm examine the relevant books and records of account of Top Cow regarding Net Revenues, Platinum Receipts, Top Cow Receipts, listing Fees and Costs, to determine whether appropriate accounting and payment of Platinum Receipts has been made under the Monthly Fee Reports; provided that Platinum shall be prohibited from exercising such inspection rights (i) with respect to Platinum Receipts payable under any Monthly Fee Report more than eighteen months following delivery of such Monthly Fee Report to Platinum; and (ii) more often than once each twelve-month period. If any such audit accurately discloses that Top Cow underpaid Platinum Receipts due hereunder, then absent any dispute by Top Cow, Top Cow covenants and agrees to pay Platinum, within five (5) business days of such disclosure, an amount equal to the deficient amount disclosed by such audit. If the amount of additional Platinum Receipts shown by such audit to be owed by Top Cow for such time period shall be in amount in excess of ten percent (10%) of the aggregate amount of Platinum Receipts actually paid by Top Cow during the same time period (and also not less than $5,000), then Top Cow shall reimburse Platinum for all costs and expense incurred in conducting such audit within ten days of submission to Top Cow of a written invoice for all such costs and expense. In the event of any dispute under this Section, the parties shall submit to binding arbitration as sct forth in Section I 1(d) hereof within sixty days of such dispute arising.

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6.          (a)          The term of this Agreement (the "Term") will commence on the Effective Date and will continue for one year, unless earlier terminated pursuant to the provisions of Section 6(h) below. For purposes of clarification, Platinum shall be prohibited from submitting solicitations to Top Cow hereunder if such solicitations would appear in the Diamond previews catalogue after December 31, 2007.

(b)            The Temi may be terminated by either party hereto in accordance with the following;

(i)upon thirty days prior written notice detailing a material breach of this Agreement that remains uncured for said thirty-day period;

(ii)immediately upon

(A)  Image or any party hereto filing a voluntary petition in bankruptcy or insolvency or petitions for reorganization under any bankruptcy law;

(B)  Image or any party hereto consenting or being subject to an involuntary petition in bankruptcy or if a receiving order is made against it under applicable bankruptcy legislation;

(C)  an order, judgment or decree by a court of competent jurisdiction, upon the application of a creditor, being entered approving a petition seeking reorganization or appointing a receiver, trustee or liquidator of all or a substantial part of the assets of Image or any party hereto and such order, judgment, or decree continues in effect for a period of thirty (30) consecutive days;

(iii)upon at least ninety (90) days prior written notice to the other party here, without cause; or

(iv)if either party ceases to conduct business.

7.          The provisions of Section 8, 9 and 11 shall survive any termination or expiration of this Agreement.

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8.          (a)          Top Cow hereby represents and warrants to Platinum that

(i) it is fully authorized to execute this Agreement and perform its obligations hereunder in accordance with its terms,

(ii) the execution and performance of this Agreement by Top Cow does not and will not conflict with or violate the terms of any other agreements by which lop Cow is or may he hound; and

(iii) 'l'op Cow has the power, ability and authority to cause the listing of Comic Properties through Image's agreement with Diamond and the collection of Net Revenues form Diamond directly or through Image and the remittance of the Net Revenues as required hereunder.

 (b)  By Platinum. Platinum hereby represents and warrants to Top Cow that

(i) it is fully authorized to execute this Agreement and perform its obligations hereunder in accordance with its terms,

(ii) the execution and performance of this Agreement by Platinum does not and will not conflict with or violate the terms of any other agreements by which Platinum is or may be bound and Platinum's execution and performance hereof shall not violate any law, rule, or governmental regulation; (iii) neither the distribution of Platinum's Comic Properties as contemplated hereunder nor the performance by Platinum of its obligations hereunder, will violate or infringe any third party rights or interest; (iv) all the rights herein licensed to 'fop Cow are clear and unencumbered, and that there are no actions or claims pending or threatened in connection therewith; and (v) Top Cow shall have no obligation or liability whatsoever (e.g. to pay, to report, or otherwise) to any third party, whether artists, writers, other contributors, licensors, or owners as a result of its actions hereunder. In connection herewith, Platinum covenants and agrees to add Top Cow as an additional named insured under it Errors and Omissions Policy.

9.Subject to the terms and conditions of this Agreement, (I) each party ("Inticmnitor") agrees to defend, hold harmless, and indemnify the other party, its employees, directors, officers and agents ("Indemnitee(s)") from and against all claims, actions, damages, and/or liabilities, together with any and all losses, lines, penabies, costs, and expenses, including, without limitation, attorneys' fees and expenses or penalties imposed by governmental entities (collectively, the "Liabilities") by reason of or resulting from any breach by Indemnitor of any of the provisions of this Agreement or any action or inaction of Indemnitor or its directors, officers, employees and agents that is illegal or constitutes gross negligence or intentional misconduct in the performance of Indemnitor's obligations under this Agreement; provided, however, that Inderrmitor's liability to an Indemnitee under this Section shall be reduced to the extent, and in the proportion, that such I ,iahilities have been proximately caused by any Indemnitee's negligence, recklessness, or intentional misconduct provided that Top Cow shall have no duty to investigate, review, or inquire about any Comic Property.

10.The relationship of the parties established by this Agreement is that of independent contractors, and nothing contained in this Agreement should he construed to give either party the power to

(i) act as an agent or

(ii) direct or control the day-to-day activities of the other  All financial and other obligations associated with each party's business are the sole responsibility of that party.

I I.           (a)           Any notice required or permitted to be given under this Agreement will be effective if it is in writing and sent by prepaid certified or Express mail, or insured or overnight courier (i.e., FedEx, UPS, or DILL), return receipt requested, to the appropriate party at. the address set ihrth below and with the appropriate postage affixed or costs prepaid. Either party may change its address for receipt ornotice by notice to the other party in accordance with this Section. Notices are deemed given two business days following the date of mailing or one business day following delivery to a courier.

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To Platnum:

Platinum Studios, Inc.

Attention: Brian Altounian, President 11400 W. Olympic Blvd., leFloor Los Angeles. CA 90064

Fax: (310) 887-3943

With a copy to:

Tide% Pretsky, Executive VP, Business Affairs & (ieneral Counsel Platinum Studios, Inc.

11400 W. Olympic Blvd., 14¹' Floor Los Angeles, CA 90064

Fax: (310) 887-3943

To Top Cow:

Top Cow Productions, Inc.

Attention: Mutt Hawkins

10350 Santa Monica Rlvd,, Suite 100 Los Angeles_; CA 90025

Fax: (866) 221-3759

With a copy sent concurrently to:

Law Offices of Harris M. Miller II, P.C. 8424A Santa Monica Boulevard, #127 West Hollywood, CA 90069

Fax: (323) 656-0384

(a)Other than payment of the Distribution Fee, nonperformance of either party will be excused to the extent that performance is rendered impossible by strike, Fire, flood, governmental acts, orders, restrictions, or any other reason where failure to perlbrrn is beyond the control and not caused by the negligence of the non-performing party.

(b)This Agreement shall be governed by and construed in accordance with the laws of the Stale ot^.California, without giving effect to provisions related to choice of laws or conflict or laws.

(c)Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement or any law (hereinafter "Arhitral Dispute") shall be submitted to arbitration in Los Angeles County, California, and selected in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as the exclusive remedy for any such claim or Arbitral Dispute. The decision of the arbitrator shall be final, conclusive and binding upon the parties. Should any party to this Agreement pursue any Arbitral Dispute by any method other than said arbitration (except as required by law), the responding party shall be entitled to recover from the initiating party all damages, costs, expenses and attorneys' fees incurred as a result of such action.

(d)The prevailing party in any action or Arhitral Dispute arising from or relating to this Agreement or a dispute between the parties is entitled to recover its costs, including reasonable attorney foes, in addition to any other relief to which it may be entitled. Any party in whose favor a judgment ur d;1,eeis.on has been entered shall also he entitled to recovery of its attorney's lees and costs in enforcing such judgment or decision.

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(f)           The waiver by either party of any breach of this Agreement does not waive any other breach. The failure of any party to insist on strict performance of any covenant or obligation under this Agreement will not be a waiver of such party's right to demand strict compliance in the future, nor will the same be construed as a novation of this Agreement. If any part of this Agreement is unenforceable, the remaining portions of this Agreement will remain in full force and effect. The parties have had an equal opportunity to participate in the negotiation and drafting of this Agreement and the attached schedules and exhibits. No ambiguity will be construed against any party based upon a claim that that party drafted the ambiguous language. Whenever required by context, a singular number will include the plural, the plural number will include the singular, and the gender of any pronoun will include all genders

(g)This Agreement, including any exhibits and schedules referred to herein, is the final and complete expression of all agreements between these parties and supersedes all previous oral and written agreements regarding these matters. It may be changed only by a written instrument signed by the party against whom en liffcemeni is sought.

(h)The Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute but one and the same instrument. The Agreement may be executed and delivered by facsimile or PDF and the parties agree that such execution and delivery will have the same force and effect as delivery of an original document with original signatures, and that each party may use such electronic signatures as evidence of the execution and delivery of this Agreement by all parties to the same extent that an original signature could he used.

(i)           Neither party may assign its rights and obligations under this Agreement without the written consent of the other, except pursuant to a merger, acquisition, or sale of all or substantially all of its assets, Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the parties and their successors and assigns. Any Assignee shall execute a counterpart of this Agreement and deliver it to the other party within Fifteen days of the assignment.

TOP COW P1 S 1NU.

President: IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above

	PLATINUM STUDIOS, INC.
Date	By:	/s/ Brian Altounian
		Brian Altounian
		President

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EXHIBIT A

ADDITIONAL SUPPORT SERVICES

*Trafficking of print quotes from Quebecor and other printers

*Coordination of files and press time with Quebecor and other printers

*Coordination of marketing services as they apply directly to Diamond Comic Distributors

*Access to al] Diamond Comic Distributors marketing and other services at Image's preferred rates

        *   Coordination of marketing services as they apply to direct-market retailers Facilitation or Diamond order codes for all product

        *   Facilitation of UPC codes for all product

        *   Coordination olPRIs (Print Run, Instructions) between Image and Diamond

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EX-10.3

Exhibit 10.3

Ingram Periodicals Inc.

Publisher Distribution Agreement

Publisher:Platinum Studios Inc.

Address 11400 W Olympic Blvd 14th Floor

Los Angeles, CA 90064

Title(s): KISS 4K

Ingram Periodicals Inc. (IPI) and Platinum Studios inc. (Publisher) hereby agree to the following:

IPI shall have the distribution rights to KISS 4K of Publisher's titles, to service any Barnes & Noble, Inc., Gander Mountain, Hastings, Jo-Ann's, or any Canadian or U.S. account who wishes to order above title(s) through IPI.Publisher shall provide IPI with written notification of any new or acquired title and IPI will have ten (10) business days to notify Publisher in writing whether or not IPI will distribute the title.

TERMS OF PURCHASE:

Discount: A fifty five percent (55%) discount from the United States cover price for product distributed to all locations except Canada. For product distributed into Canada, the Canadian cover price will be converted to U.S. dollars, and a discount of fifty five percent (55%) will be applied. Purchases for Canadian distribution will be converted to U.S. dollars at the exchange rate in effect on the first business day of the month and that rate will apply for the full transaction term for each issue.

Payments: Payment for all copies sold, net of distribution charges (which includes all returns received by payment date), shall be paid sixty (60) days after IPI invoices a subsequent issue. If, for any reason, IPI makes an over-advance or overpayment to Publisher, such over-advance or overpayment shall be immediately deducted by IPI from any subsequent advances or payments due on any issue of any publication which IPI purchased from Publisher.

Returns:    One hundred percent (100%) of copies are fully returnable by affidavit.

Term: Three (3) years, automatically renewable without notice to Publisher. This Agreement is binding for three (3) years and is initiated with the IPI invoice date for the first issue distributed by IPI after the date this Agreement is signed by both parties. Either party must notify of their intention not to automatically renew this Agreement with written notice a minimum of one hundred twenty (120) days prior to the end of the term of this Agreement. Either party may terminate this Agreement, by written notice effective immediately, in the event that a voluntary or involuntary petition shall be filed by or against the other party under any bankruptcy or insolvency law, or if a receiver of the other party or of the other party's property is appointed, or if the other party makes an assignment for the benefit of its creditors.

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MISCELLANEOUS:

·   All titles will have a scanable UPC code on the front cover of all magazines. Titles not coded are subject to a title set up fee and stickering charge of twenty-five cents ($.25) per copy.

·   Publisher will accept pass-through shrink charges.

o   Publisher will supply IPI with a print order schedule each year. IPI will only distribute product quantities indicated by the print order for each issue.

·   Publisher will provide complete shipping documentation with each delivery to the IPI warehouse(s).

m Publisher is responsible for ensuring that all IPI Warehouse locations receive delivery of product according to the instructions on the print order(s). If product is not delivered to the proper warehouse location, any routing of shipments between IPI warehouses will be at the expense of the Publisher and will be credited against any amounts due now, or in the future, to Publisher.

·   Publisher will pay IPI for a one time initial set up fee of two hundred fifty dollars ($250.00) per title.

·   All price changes will be received in writing sixty (60) days in advance of receipt of affected issue or payment will be made based on previously recorded price.

An invoice must be sent to IPI's Accounts Payable department for each shipment sent to IPI in order to receive payment

Send invoices to: Ingram Periodicals Inc.

Accounts Payable Department

P.O. Box 7000

LaVergne, TN 37086-7000

    0   All shipments sent COD will be charged a one hundred dollar ($100.00) fee, and the actual freight charges will be deducted from IPI liability to Publisher.

 ·   A one hundred fifty dollar ($150.00) annual catalog fee applies to each title.

    ·   IPI reserves the right to refuse distribution based on content and reserves the right to edit fliers.

·   Shipments arriving by 9:00 am Monday at our LaVergne, TN or Chambersburg, PA warehouses and by noon Monday at our Ontario, CA warehouse will be in the stores by the following Friday. Any deliveries arriving after that time will go out the following week. The delivery schedule is open to change during holiday periods or for special issues.

·   The terms of this Agreement and all proprietary business information are to be kept strictly confidential by the parties.

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INDEMNIFICATION:

Publisher represents and warrants the following regarding all product presented by Publisher to IPI for purchase:

1.   That Publisher is the owner of the product and all copyrights related thereto, and for has the authority to sell and distribute the product in accordance with the terms hereof;

2.   That the product or its sale and distribution does not infringe on any copyright or violate any privacy or other right of any person;

 3.   That Publisher will promptly notify IPI in writing if it receives or otherwise becomes aware of a claim that alleges facts, which, if true, would be a breach of any of the foregoing representations or warranties.

Publisher agrees to defend, indemnify and hold IPI harmless, at Publisher's expense, for all loss, cost, expenses and damages incurred by IPI in connection with any suit, claim, or proceeding brought against IPI that alleges facts which, if true, would be a breach of any of the foregoing representations or warranties.

DISTRIBUTION CHARGES:

"Service Fee" a comprehensive service fee of $ .45 per lb of publication received for receiving, handling, packaging and shipping of publications

These rates are subject to change with thirty (30) days written notice.

Service Fee per Pound

$ .45

SIGNATURES: Please sign and return this Agreement to^. Publisher Relations Ingram Periodicals Inc Attn:

18 Ingram Blvd.

LaVergne, TN 37086-7000

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IPI shall have the right, during the Term of this Agreement, to use Publisher's trademarks and logos in connection with its services hereunder. All uses of Publisher's trademarks and logos shall comply with such guidelines as Publisher may from time to time establish. IPI shall acquire no rights in any such trademarks or logos and all uses thereof by IPI shall be for Publisher's benefit. Upon the termination of this Agreement for any reason, IPI shall immediately discontinue use of any such trademarks. IPI acknowledges that the trademarks of Publisher are unique and irreplaceable and that any breach or violation of the provisions of this paragraph by lPI shall cause immediate and irreparable injury to Publisher.

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, supersedes all previous and contemporaneous agreements, oral or written, and may be amended only by a written agreement signed by both parties hereto.

Nothing contained in this Agreement shall be deemed to create any partnership, joint venture or employment relationship between the parties. Neither party has any authority to incur any obligation or liability on behalf of the other party without the other party's express prior written consent.

Neither party shall be liable to the other for lost profits, or any incidental, consequential, punitive or special damages.

Neither party shall be liable for delays or failure in performance that are the result of causes beyond its reasonable control, including but not limited to acts of God, acts of governmental or military authority, fires, floods, war, or terrorist acts. In the event that any such force majeure condition continues for a period of thirty (30) days, the other party may terminate this Agreement without any further obligation or liability.

This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee.

By signing this Publisher Agreement you accept its terms and conditions and warrant that this Agreement does not breach any existing agreements you have in force with any other companies.

	Publisher
Date: 07/13/2007	By:	/s/ Brian K. Altounian
		Brian K. Altounian
		President/COO

	Ingram Periodicals Inc.
Date: 03/15/2007	By:	/s/Bruce Jones
		Bruce Jones
		VP Publisher Relations

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EX-10.4

Exhibit 10.4

Co-Development, Financing and Production Agreement

The following sets forth the agreement dated as of November 3, 2006 between Platinum Studios, Inc. (“Platinum”) and Arclight International PTY, LTD.  (“Arclight”) with respect to the co-development, financing and production of certain motion picture projects (each a “Picture”) based on certain Platinum comic book properties as set forth below.  Platinum and Arclight are each a “Party” and collectively the “Parties.”

1)   Properties.  Platinum is the owner of motion picture rights in the following  properties (each a “Property” and collectively the “Properties”):

a)   THE WITCHBLADE (“Witchblade”)

b)   THE DARKNESS (“Darkness”)

c)   DYLAN DOG aka DEAD OF NIGHT (“Dead of Night”)

d)   THE HUNTER

e)   GHOSTING

f)   HIVE

g)   MAL CHANCE

h)   YOUNGBLOOD

2)   Purpose.  The Parties intend to develop, finance, co-produce and distribute at least eight Pictures based on said Properties over a period of Five (5) years, with per picture budgets in the range of $6,000,000 to $12,000,000 dollars (“Range”).  Upon mutual agreement by the Parties, the budget for a Picture may be increased or decreased outside the Range on a case by case basis.

3)   Development and Financing.  The Parties intend to mutually develop and produce each Picture based on a Property.  Platinum intends to provide the Properties on which the Pictures shall be based, and Arclight shall provide the financing and international distribution for such Pictures via its international sales arm.  In addition, Arclight agrees to engage Havenwood Media, LLC to shall furnish the producing services of Steve Squillante to assist in development, budgeting and overseeing physical production of each Picture.  Arclight agrees to use best efforts to finance each Picture via Arclight’s financing arrangement with GE Capital or alternative sources.  The Parties also intend to access “soft money” deals where available as part of the Picture financing.  A pro forma waterfall of gross receipts from a Picture is attached as Exhibit A hereto.

4)   Domestic Distribution.  The Parties shall mutually determine how to pursue domestic distribution for each Picture, although the sales, fulfillment and delivery of such a sale to domestic distributor shall lie with Arclight.  It is understood that Arclight is required to obtain theatrical domestic distribution as a condition to accessing the GE Capital fund and is actively pursuing such distribution.   The titles are intended for theatrical release, but the Parties acknowledge that those not suited for such release may be licensed for direct to video or special cable premiere slots.  The Parties shall use test screenings, etc. to determine the optimal release strategy for each Picture.

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5)   Development and Selection of Properties.

a)   Initial Development Properties.  The Parties have selected the following Properties as the first Properties to be developed for production under this agreement.  Such Properties are Dead of Night, The Witchblade, Ghosting, and The Darkness (the “Development Properties”).  The Properties not identified as the Development Properties are the “Additional Properties.”  During the first three years of the “Term” (as defined below)  of this Agreement, each time a Development Property commences principal photography hereunder, the parties shall mutually select an Additional Property to be deemed a Development Property, and Platinum, in consultation with Arclight, shall select another Platinum property as an Additional Property.

b)   Development Commitment.  The term of this Agreement (“Term”) shall commence as of the date of this Agreement and end five (5) years from the date hereof, unless earlier terminated as set forth herein.  During the Term Arclight agrees to engage writers (subject to Platinum’s approval rights in Section 5(f) below) to develop screenplays based on the Development Properties and provide other related development money for budgeting, location scouting, etc.  Arclight has already committed funds to develop Dead of Night and The Witchblade, and agrees to commit a similar amount to develop Ghosting and The Darkness.  At all times during the Term, Arclight agrees to have at least two (2) Properties in active development (meaning that Arclight shall have committed development funds to such Properties and shall be actively trying to get them into production).  If at any time Arclight does not have two (2) Properties in active development, then Platinum shall give written notice thereof to Arclight, and Arclight shall have 30 days to commence active development as required herein.  If Arclight does not commence such active development, then Platinum shall have the right to terminate this agreement.

c)   Platinum Exclusivity Commitment.  In consideration for Arclight’s commitment of such development funds and Arclight’s other obligations under this Agreement, Platinum agrees to exclusively develop the Development Properties with Arclight during the Term.  In addition, during the Term, Platinum agrees not to actively “shop” any Additional Properties, but if any third party expresses an interest in developing, producing, licensing rights in or purchasing rights in any Additional Property, Platinum shall notify Arclight of such interest in writing.  If Arclight and Platinum are unable to come to any agreement with respect to such Additional Property (within 5 business days) Platinum shall be free to enter into an agreement with such third party and such Additional Property shall be excluded from this Agreement.

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d)   Termination.  If at the end of the first year of the Term no Properties have commenced principal photography hereunder, Platinum shall have the right to terminate this Agreement; provided if the Parties are in “Pre-Production” with respect to one or more Development Properties (defined as Arclight backing  pay or play offers to lead actors, or in active “pre-production” as such term is commonly understood in the entertainment industry  - i.e., there is a detailed budget for the Picture and Arclight is actively scouting locations, identifying key crew and a director is attached) then the Term shall be extended for the length of the Pre-Production period but in no event for more than six additional months.  Thereafter, if during any twelve month period no Picture commences principal photography, Platinum shall have the right to terminate this agreement (i.e., an additional Picture must commence principal photography under this agreement no later than twelve months after the commencement of principal photography of the immediately preceding Picture on a rolling basis or Platinum shall have the right to terminate this agreement); provided if at the time Platinum elects to so terminate this Agreement one or more Properties are in Pre Production, then this Agreement shall continue only for the lesser of an additional six (6) months or the period of such Pre-Production, but only with respect to such Projects in Pre-Production, and this Agreement shall terminate with respect to all other Properties.

e)   Reversion.  At such time as this Agreement is terminated for any reason, then all right,  title and interest of Arclight or its affiliates in the Properties, including all right, title and interest of Arclight or its affiliates in any screenplays, budgets, and development materials commissioned or owned by Arclight or its affiliates, shall automatically revert to Platinum, subject to a lien in favor of Arclight in an amount equal to  110% of all of Arclight’s (or it’s affiliate’s) actual out of pocket script development costs paid in connection with the development of such Property but only for scripts actually utilized by Platinum, payable on the first day of principal photography of any picture incorporating the Arclight material (provided it is understood that Platinum shall not be required to reimburse Arclight for use of Arclight material that comprises modifications to characters already found in the Property or “generic” storylines common in comic book adaptations unless such use incorporates detailed storylines or actual use of substantial portions of any script paid for by Arclight); provided further, it is understood that rights in produced Pictures shall continue per the terms for that particular Picture.

f)   Controls and Approvals.  During the Initial Period (as it may be extended pursuant to the terms of this agreement), the Parties shall mutually determine how to develop the Development Properties.  All decisions regarding development, financing, and distribution shall be made mutually.  Notwithstanding the foregoing, neither party shall submit a Development Property to any agencies, talent, studios, third party financiers or other entities without the consent of the other party.  In connection with Arclight’s funding of development for the Development Properties, all attachments, writer agreements and terms thereof shall be subject to the prior written approval of Platinum, which approval shall not be unreasonably withheld, and if Platinum fails to respond to any written request for approval within five (5) business days such approval is requested, such matter shall be deemed approved and Arclight will promptly give Platinum notice in writing of such deemed approval.  Arclight shall submit drafts of all agreements prior to execution and no attachments to any Property shall survive the termination of this Agreement without the written consent of Platinum.

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6)   Licensed and Reserved Rights.  Platinum has advised Arclight that due to the interweaving of characters and storylines and other intellectual property elements within the Properties, the specific grant of rights for a particular Property shall be sufficient to grant the rights required to produce, distribute and exploit each Picture on a worldwide basis, but character, sequel, and other related rights shall be reserved by Platinum as Platinum determines in good faith is advisable.  Upon financing of a Picture based on a Property under this agreement (or at such earlier time as the Parties mutually agree is necessary or advisable, Platinum shall execute an assignment of rights into a special purpose production entity for such Picture and at such time the definition of rights to be contributed by Platinum shall be negotiated).  Notwithstanding the foregoing, Platinum’s reserved rights shall in any event include (a) all publication rights, (b) theme park rights, (c) all animation rights, (d) all interactive rights whether or not game oriented (including video games, online games, games and other non-theatrical entertainment on any device or though any delivery method), (e) live theater and radio rights, and (f) any and all Property based rights.  In addition,  Platinum shall have the right to use and exploit any new character rights in any Picture produced pursuant to this agreement in connection with the exercise of any of Platinum’s reserved (and/or reverted) rights with respect to any Picture.

7)   Rights Fees To Platinum.  Because of the unique nature of each Property, and  because certain Properties such as WitchBlade, Darkness and Youngblood have  additional participants entitled to compensation for exploitation of such rights, Platinum and Arclight shall negotiate in good faith the license fee to be paid to Platinum for the rights for each Property.

8)   Producing Fees and Participation.  Platinum and Arclight shall each take an equal producer fee out of the budget of each Picture.  Arclight agrees to engage Havenwood Media, LLC to furnish the non-exclusive services of Steve Squillante to render producing services for each Picture and Arclight and Platinum shall bear on a 50/50 basis all fees and participation payable to Havenwood Media for the services of Steve Squillante.  Havenwood Media’s fees and participation are as follows: 2.5% of the budget (which is 1.25% from Platinum and 1.25% from Arclight.  Havenwood Media shall be entitled to receive 5% of the profits of each film, subject to the same definitions, terms and conditions applicable to Arclight and Platinum.  Arclight shall provide the non-exclusive services of Harrison Kordestani (subject to his other professional obligations) and in connection therewith the special purpose production entity for a Picture shall enter into a separate agreement with Kordestani’s loanout company for his producing services, with such fees and contingent compensation to be negotiated in good faith.  Platinum shall provide the non-exclusive services of Scott Rosenberg (subject to his other professional obligations) and in connection therewith the special purpose production entity for a Picture shall enter into a separate agreement with Rosenberg’s loanout company for his producing services, with such fees and contingent compensation to be negotiated in good faith.  It is anticipated that the total producing fees to be split between Arclight and Platinum (inclusive of Rosenberg and Kordestani) shall be no more than 8% of the ingoing budget of each Picture (inclusive of third party producer fees, if any).

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9)   Distribution Fees and Expenses for Arclight.  In consideration for Arclight’s services as international sales agent for a Picture produced under this agreement, Arclight shall earn a 20% sales fee on all foreign sales it makes, ½ of which shall be payable on a non deferred basis and one half shall be deferred behind the financing.  In addition, Arclight shall be entitled to recoup its marketing expenses in connection with each picture “off the top” ahead of its sales fee and the financier.  It is anticipated that the marketing budget for each Picture will be $150,000 to $250,000 including preparation of one sheet, trailer, etc. and shall include a “market charge” to Arclight of [$35,000] in lieu of any recoupable costs for attending film markets, general overhead, cost of promotion of Arclight’s slate as a whole, etc.

10)   Profits.  Arclight and Platinum agree to split on a 50/50 basis all profits from a Picture (with Havenwood’s participation, when payable, off the top per Section 8 above) and net of all third party costs, financing fees, etc.  Exhibit “A” sets forth a pro forma “waterfall” of picture receipts.  Platinum shall bear out if its share of profits the contingent compensation payable to Rosenberg.

11)   Credit.  For each Picture produced under this Agreement, Each of Platinum and Arclight shall receive two (2) Executive Producer credits, two (2) Co-Executive Producer credits, and one (1) Produced by Credit.  In addition, Havenwood Media shall be entitled to one (1) Produced By credit, one (1) Executive Producer credit, and one (1) Co-Producer credit for all Pictures for which it renders services.  In addition, subject to the approval or Arclight and Platinum, all third party rights holders entitled to credit shall receive such credit as required by such agreements with such third parties.  All of the foregoing credits shall be in the main titles and in paid ads, subject to customary size and excluded ad ties, exclusions, etc. with position to be negotiated.  Platinum shall also be entitled to an animated company production credit in the main titles of each Picture and a logo “bug” on one sheets.  Each of Platinum and Arclight shall be entitled to presentation credits on screen and in paid ads, with position and other terms to be negotiated in good faith between the parties and the domestic distributor of the Picture.

12)   Sequels/Remakes/Derivative Productions.  With respect to any Picture produced under this agreement, theatrical sequel, prequel and remake rights shall be frozen for a five year period from first exploitation of such rights (or 6 ½ years from the commencement of principal photography of such Picture, whichever occurs sooner.  With respect to television exploitation (including original programming for internet exploitation) Platinum shall control such rights; provided Arclight shall be entitled to a passive payment equal to [5%] of all of Platinum’s fees, rights payments and profits received from the exploitation of such rights (it being understood, however, that if a television series or other production is based on rights reserved to Platinum under Section 6 above, the provisions of this Section shall not apply).

13) Merchandising.  For all Picture based merchandising rights with the exception of Platinum reserved rights  Arclight shall be entitled to an amount equal to twenty five  percent (25%) of all non-refundable, non-returnable income received by Platinum from the exploitation of such rights after Platinum’s deduction “off-the-top” from said Platinum receipts of a 20% distribution fee and recoupment of all of Platinum’s direct, out-of-pocket costs and expenses incurred in connection therewith including agents and legal.  “Picture based” merchandise shall be defined an merchandise based solely on the characters and elements that appear in the Picture, and shall terminate within a customary period of time after initial exploitation of the Picture;  Thereafter, all merchandising rights in the Picture and the characters therein shall be deemed reserved rights of Platinum.

14)   Key Man.  In the event Harrison Kordestanti and Steven Squillante are no longer rendering services on behalf of Arclight, then Platinum shall have the right to terminate this agreement.  Upon such termination by Platinum, all properties not greenlit shall revert to Platinum subject to Section 5(e) above.  Upon termination by Arclight, Arclight’s obligations with respect to financing and development under this agreement shall terminate.  Notwithstanding the foregoing, for any Pictures greenlit prior to such termination, the Parties’ rights and obligations with respect to such Picture shall continue.

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15)   Assignment.  Neither party may assign its rights and obligations under this agreement without the consent of the other (except to a successor company under the same management as the current company).

16)   Long Form Agreements.  The Parties agree to enter into long form agreements as and when reasonably necessary (including formal option agreements for the rights, producing agreements, financing agreements, etc.)

17)   Remedies; Governing Law.  If either party is in material breach of this agreement, then upon written notice by the non breaching party to the breaching party, the breaching party shall promptly commence to cure such breach, and cure such breach within 5 business days.  If such breach is not cured as set forth above, or if such breach is not capable of cure, then, in addition to any other rights and remedies under this agreement, the  non-breaching party shall have the right to terminate this agreement.  This agreement and its validity, construction and effect shall be governed by the laws of the State of California applicable to contracts wholly to be performed therein.  Any controversy, claim or dispute arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate shall be determined by confidential binding arbitration in Los Angeles, California.  The arbitrator shall be a member of the American Arbitration Association (“AAA”) Law Practice Panel of Neutrals.  The arbitration shall be administered by the AAA pursuant to its Commercial Rules and Supplementary Procedures for Large, Complex Disputes.  Judgment on the binding arbitration shall be final and binding and may be entered into in any court having jurisdiction.  As a practical matter, by agreeing to arbitrate, all Parties are waiving jury trial. The Arbitrator will render a detailed written decision. The loser of such arbitration hearing will pay the associated fees and costs to arbitrate (including, without limitation, attorneys’ fees and costs) of the winner. The arbitration process will include a customary appeal procedure. In the event of termination of this agreement by Platinum with or without cause, Arclight shall be entitled to an action at law for damages (excluding lost profits or consequential damages) but in no event shall Arclight be entitled to seek equitable relief.  Notwithstanding the foregoing, upon the greenlighting of any Picture based on a Property, the remedies of the Parties shall be as set forth in the agreements regarding the financing and production of such Picture.

18)   Arclight shall execute and deliver any further and additional documents which Platinum may reasonably deem necessary to carry out and effectuate the purpose and intent of this Agreement with respect to the reversion of rights to Platinum hereunder.  If Arclight fails to execute and deliver to Platinum any such further documents required of them under this Agreement within five (5) business days after Platinum's request therefor, or if Arclight fails to take any action reasonably necessary or reasonably desirable to effectuate the purposes of this Agreement (including, without limitation timely exercise of any rights of Arclight under any agreement between Arclight and a third party that pertains to any Property), and Arclight fails to respond within five (5) business days of Platinum's notice or request therefor, then Arclight hereby irrevocably appoints Platinum as its attorney-in-fact to execute such documents and take any such actions.  Said appointment is coupled with an interest and shall be irrevocable. Platinum shall furnish copies of all documents executed as Arclight’s attorney in fact.

19)    Each party ("Indemnifying Party") hereby indemnifies, defends and holds harmless the other party and its successors, licensees, assigns, and employees, officers and directors (collectively for the purposes of this Paragraph "Indemnified Party") from and against any and all liability, loss, damage, cost and expense, including, without limitation, reasonable attorney's fees (but excluding lost profits or consequential damages) arising out of any breach or alleged breach, or claim by a third party with respect to any warranty, representation or agreement made by the Indemnifying Party herein.  The Indemnified Party shall promptly notify the Indemnifying Party of any claim to which the foregoing indemnification applies and the Indemnifying Party shall undertake, at its own cost and expense, the defense thereof.  The Indemnified Party may, at its option and expense, engage its own counsel.  If the Indemnifying Party fails to promptly appoint competent and experienced counsel, the Indemnified Party may engage its own counsel and the reasonable charges in connection therewith shall promptly be paid by the Indemnifying Party.  If the Indemnified Party settles or compromises any such suit, claim or proceeding, the amount thereof shall be charged to the Indemnifying Party, provided that the Indemnifying Party's reasonable prior approval has been secured.

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20.           Marketing Plan:  Arclight shall use good faith efforts to carve out a percentage of the marketing budget to utilize Platinum’s unique marketing strategy and channels.

AGREED AND ACCEPTED

PLATINUM STUDIOS, INC.

BY /s/ Scott Rosenberg

ITS CEO

ARCLIGHT INTERNATIONAL PTY, LTD.

BY: Harrison Kordestani

ITS: Principal and its Authorized Signatory

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Exhibit A

The following is a pro-forma waterfall of Picture receipts.  The recoupment position of the equity financier is based on arrangement contemplated by Arclight’s agreement with GE Capital.

EXHIBIT A

RECOUPMENT SCHEDULE

Subject to the repayment of any production lender, gap or super-gap financing, and collection fee payable to Fintage, all Gross Receipts received into the Fintage collection account shall be payable on a continuing and rolling basis as follows:

(i)   First, to debt and equity financing (such as GE Capital) until Equity recoups its negotiated rate (which all parties will be privy to.

(ii)   If necessary, a corridor of recoupement during the equity recoupement, to Platinum, Top Cow, and/or Awesome Comics of the underlying properties for the payment of the deferred Rights Fee, if any.  If this payment or obligation exists, it shall be recoupable prior or simultaneously to any fees or commissions to Arclight;

(iii)   Next, to Arclight for payment of the Marketing fee;

(iv)   Then, to Arclight for payment of the 10% non-deferred Sales Agency Fee as a corridor;

(v)   Then, to recoup any other distribution expenses and residual payments;

(vi)   Then, to Arclight, to recoup the 10% deferred Sales Agency Fee (accrued from first dollar)

(vii)   Lastly, the balance of all monies payable pari passu as follows:

a.   Equity investors based on the proportion of the budget that they financed (to be negotiated);

b.   Profit participants on the pictures (i.e., cast, director, etc.);

c.   The remainder of all monies to be split 50% to Platinum and 50% to Arclight

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EX-10.6

Exhibit 10.6

OPTION AGREEMENT

DATED:	As of August 1, 2004
PRODUCER:	Platinum Studios, LLC
	Attention: Scott Mitchell Rosenberg
	9744   Wilshire Blvd., Suite 210
	Beverly Hills, CA 90212
OWNER:	Top Cow Productions, Inc.
	Attention: Marc Silvestri or Matt Hawkins
	10350  Santa Monica Boulevard, Suite 100
	Los Angeles, CA 90025

 This document confirms the terms and conditions of the agreement  (the "Agreement") between Platinum Studios, LLC ("Producer") and Top Cow Productions, Inc. ("Owner") with respect to Producer's option to acquire certain rights in and to all  "Subject Properties"  (as defined below):

1. DEFINITIONS:  For the purposes of this Agreement:

  (a)           (i)                    A "Property" means a particular comic book, graphic novel, or comic-book series or miniseries (including any character, story, concept, or artwork or other element thereof and all copyrights, trademarks, and similar intellectual property rights therein or thereto and the right to exploit same) including, without limitation, all past, present, and future versions thereof (all to the extent owned or controlled by Owner in each instance).

   (ii)                    Not to limit the generality of the foregoing, any "Property" shall include, to the extent owned or controlled by Owner, all original parts and elements of that Property. Without limiting the foregoing, a Property includes, to the extent owned or controlled by Owner, the comic-book name, copyright, trademark, and logo of that Property; the name, likeness, and image of each and every character, human or otherwise, original to and appearing in that roperty; the name, likeness and image of any original noncharacter asset or entity appearing in that Property; the script, plot, and storyline of that Property; and all art (other than in advertising) appearing in that Property.

   (iii)                    A particular Property shall include any derivative publication having essentially the same title and characters as the Property in question that is similar in tone, setting, and characters. For example, without limitation, a miniseries or second series based on Owner's "The Darkness" property set in the same universe and time and with the same art approach would be part of that Property, but a "Medieval Darkness" or "Li’l Darkness" mini-series or spin-off would be a different Property.

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(iv)                    Notwithstanding the foregoing or anything else to the contrary contained herein, a particular Property shall not be deemed to include any crossover issues, elements, or material, or any guest appearances by a character or element that is not a regular recurring part of that Property. Publications published or distributed by Owner that shall not be Properties, and characters or other elements from any publication of Owner that are not owned or controlled by Owner are sometimes referred to herein as "Excluded Material."

  (b)          An "AV Production" means a motion-picture, television, direct-to-video, or other audio-visual production.

  (c)          "Subject Properties" means all Properties owned or controlled by Owner, subject to paragraphs (a) and (c)(i) hereof and the other terms hereof.

  (i)             Notwithstanding anything to the contrary contained herein, the following Properties shall not be Subject Properties:

  (A)          Any Property that is the subject of an agreement with a third party (a "Committed Property") for development, production, or otherwise as an AV Production (as hereinafter defined) to the extent of such agreement, including, without limitation:  (1) the agreement with respect to animation and other rights in Owner's "Witchblade" Property between Owner and         (2) the agreement between Owner and Warner Bros. Television Production, a division of Time-Warner Entertainment Co., L.P., concerning Owner's "Witchblade" Property.

For avoidance of doubt, any rights to a Committed Property that are not subject to such a third-party agreement (including, without limitation, any holdback or future- negotiation provisions) concerning that Committed Property shall, but to such extent only, be a Subject Property; or

  (B)          Any Property for which Owner is prohibited from granting the rights otherwise to be granted hereunder, or for which Owner does not own or control such rights (provided, however, that if Owner jointly owns or controls a Property [beyond Owner having any approval, consent, or consultation right or a financial participation, which such rights or participation alone shall not be deemed Ownership or control by Owner], then Owner shall not grant any Production rights to a third party to the extent of Owner's Ownership or control without Producer's prior written consent); or

  (C)          Without limiting paragraph 1(c)(i)(B) above, any Property for which another person or entity owns or controls any or all of the AV Production rights (including, without limitation, Wanted, Freshmen, "Zero," and the proposed John Ridley project); provided, however, that if (and to the extent) Owner acquires AV Production rights in such an excluded Property, then such Property shall be deemed a Subject Property hereunder.

  (ii)           Without limiting any of the foregoing, "Subject Properties" shall not include any rights that are currently granted or licensed to Spacedog, Inc. or GDH or to be licensed to Vidiator Technology (US) Inc. or any other wireless rights licensee.

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  (iii)          Notwithstanding anything to the contrary contained herein, if pursuant to any agreement with a creator or licensor of a Property, Owner is required to relinquish, to assign, or to terminate any AV Production rights, then, to the extent Producer shall have not entered into a bona fide agreement with a third party for such rights, such rights shall no longer be subject hereto as a Subject Property (but only to that extent).

  (d)          A "Production" means an AV Production based on a Subject Property. The first commercial-length motion-picture, television, or direct-to-video Production intended for release to general public is sometimes referred to herein as the "First Production" for the Subject Property in question. Without limitation, animatics, games, flash-animation clips, trailers, ads, shorts, student films, webisodes, hand-held-device productions, and "interstitials," do not qualify to be a First Production.

2. OPTION:

 (a)          In consideration of the payment to Owner of 250,000(the "Advance"), the receipt of which Owner acknowledges, which shall be applicable against and recoupable from any and all other payments to Owner hereunder, Owner hereby grants to Producer during the Option Period (as defined below) the exclusive and irrevocable option for each and every Subject Property to purchase all of the Rights (as defined below) in and to such Subject Property on and subject to the terms and conditions herein contained (individually an "Option" and collectively "Options").

  (b)           (i)                    The Option for any Subject Property shall be effective only during the Option Period (as hereinafter defined) for that Subject Property. Each "Option Period" shall consist of the Initial Option Period (as defined below) plus, if applicable, the First Extended Period (as defined below), and, if also applicable, the Second Extended Period (as defined below).

  (ii)                    The "Initial Option Period" for each Subject Property shall commence as of the date hereof (or, in the case of a Property that becomes a Subject Property after the date hereof, upon the date such Property becomes a Subject Property) and shall continue until December 31,2007.

  (iii)                    If, prior to the expiration of the Initial Option Period, Owner has received payments pursuant to this Agreement in the amount of $350,000 or more (inclusive of the Advance), then the Initial Option Period shall be extended for an additional period of thirty (30) consecutive months (the "First Extended Period") to June 30, 2010. Notwithstanding the foregoing, if Owner has not received payments of $350,000 or more by the expiration of the Initial Option Period, Producer may extend the Option Period through the First Extended Period by payment to Owner before the expiration of the Initial Option Period of the difference of the amounts received by Owner hereunder and $350,000. Owner acknowledges the receipt from Producer of    $425,000 as of the date of Owner's execution hereof.

  (iv)                    If prior to the expiration of the First Extended Period, Owner has received payments of $700,000or more  (inclusive of the Advance) hereunder, then the First ExtendedPeriod shall extend for an additional twelve (12) consecutive month period  (the "Second Extended Period"). Notwithstanding the foregoing, if Owner has not received payment of $700,000 or more hereunder by the expiration of the First Extended Period, Producer may extend the option Period through the Second Extended Period by payment to Owner before the expiration of the First Extended Period of the difference between the amounts received by Owner hereunder and $700,000.

  (v)                    In addition, if Producer shall have entered into a development agreement approved by Owner for a Production for a particular Subject Property, then Producer shall have the right to extend the option Period as follows for only that Subject Property (but not for any other Subject Property) by written notice thereof to Owner. Accordingly, the Option Period for such Subject Property shall, pursuant to the immediately preceding sentence, continue until the earlier of (A) such time as Producer exercises the Option with respect to such Subject Property, if ever, and (B) the date twelve (12) months after the described in the first sentence of this paragraph (at least as it relates to such roperty) and [2] the termination of such development agreement (at least as it relates to such Property); provided such twelve (12) month period shall toll during all periods that such Subject Property is the subject of an option agreement with a third party approved by Owner.

  (c)          If Owner shall receive during the Option Period, directly or indirectly, any bona fide professional inquiry whatsoever  (whether in writing or otherwise) regarding the availability and/or exploitation of any AV Production rights to any part of a Subject Property, including, but not limited to, the inclusion or adaptation of the Subject Property, or of any part thereof, in or for any form of AV Production, then Owner shall immediately notify Producer in writing of such inquiry, providing full details thereof, including, without limitation(to the extent Owner knows same) the name, company, postal and email addresses and telephone and facsimile numbers of any person making such inquiry, together with a full account of such inquiry. If Owner fails to refer such an inquiry to Producer and then enters into an agreement with the inquirer within twelve (12) months from the expiration of Producer's rights related to the applicable Subject Property, Producer shall be irrevocably attached to the project, with fees and credit for Producer to be negotiated in good faith.

3.          OPTION EXERCISE: Prior to the expiration of the Option Period for a particular Subject Property, and not later than upon commencement of principal photography of a First Production for such Subject Property, Producer shall exercise the option with respect to such Subject Property by (a) written notice to Owner of such commencement of principal photography of such First Production and (b) as a condition precedent to the effectiveness of such exercise, payment to Owner of the amount designated as "Owner's Share" in paragraph 4(a)(i) hereof (which such condition shall be deemed satisfied if Producer shall have received in full the purchase price for the First Production of such Subject Property pursuant to an agreement approved by Owner).

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4.           CONTINGENT COMPENSATION:

 (a)          Producer shall account for and pay to Owner the amounts of Adjusted Gross Revenues (as hereinafter defined), if any, designated as "Owner's Share" for each and every Production:

 (i)                    For the first One Million Six Hundred Thousand Dollars    ($1,600,000) of Adjusted Gross Revenue for a Production, Owner's Share shall equal fifty percent (50%) thereof and Producer's Share shall equal fifty percent (50%) thereof,

 (ii)                    For the next Two Million Dollars ($2,000,000) of Adjusted Gross Revenue for that Production, Owner's Share shall equal forty percent (40%) thereof and Producer's Share shall equal sixty percent (60%) thereof, and

 (iii)                    For any other Adjusted Gross Revenue for that Production, Owner's Share shall equal fifty percent (50%) thereof and Producer's Share shall equal fifty percent (50%)thereof.

 (b)          The payments described in paragraph 4(a) hereof shall apply to each Production based on a Subject Property.

 (c)          Owner shall be solely responsible for all payments to any third party creators, writers, or any other underlying rights holders claiming by or through Owner, if any.

 (d)          "Adjusted Gross Revenues" for a particular Production means  100% of Gross Revenues  (as defined below) less only (to be deducted on an off-the-top basis) any reasonable and out-of- pocket third-party agent, attorney, and manager costs (which such agent, attorney, and manager costs in the aggregate shall not exceed fifteen percent [15%] of Gross Revenues for that Production without Owner's consent [it being agreed that Owner shall consent to a larger amount for aggregate agent, attorney, and manager costs on any particular Production subject to Producer's guarantee that all aggregate agent, attorney, and manager costs for all Productions hereunder shall not exceed fifteen percent (15%) of all Gross Revenues]), and creative- artwork costs directly related to only such Production.

 (e)          "Gross Revenue" for a particular Production or Subject Property means any and all compensation actually received by or credited to Producer, Owner, Scott Mitchell Rosenberg ("Rosenberg"), Marc Silvestri ("Silvestri"), or Matt Hawkins ("Hawkins") or any Owner, subsidiary, affiliate, or agent of any of the foregoing related to or arising out of that Production or any other development hereunder of the Subject Property on which such Production is based or any other exploitation of the Rights hereunder   (all of which shall be aggregated and paid to Producer who shall then account for and pay to Owner hereunder in accordance with the terms hereof). Gross Revenues shall not include any amounts Owner, Silvestri, or Hawkins receives for any artwork, writing, or directing services, but shall include any settlements, awards, damages, or other nonsales amounts [except to the extent directly related to any derived for any services other than producing or consulting provided by Owner, Silvestri, or Hawkins]).

 (f)          Producer does not represent or warrant that there will be any Adjusted Gross Revenues from any Productions. Nothing herein shall be construed as vesting in Owner any right, title, or interest whatsoever in any Production or the gross receipts thereof, or any lien or charge thereon or assignment thereof.

 (g)          Owner's Shares of Adjusted Gross Revenues are and shall  at all times be Owner's separate property held in trust by Producer free and clear of any claims or encumbrances by any person or entity until paid to Owner.

5.          STATEMENTS AND PAYMENTS:

 (a)          Producer shall maintain true, accurate, and complete books of account and records relating to any exploitation of Subject Properties hereunder and any other exercise of Producer's rights hereunder and/or any other receipt of Gross Revenues.

 (b)          Within thirty (30) days of receiving any Gross Revenues (but not less frequently than by the date thirty [30] days after the end of each fiscal calendar quarter), Producer shall furnish to Owner full and accurate statements in sufficient detail to show all relevant information relating to Gross Revenues and Adjusted Gross Revenues. Such statements shall be submitted to the address shown page 1 hereof. Simultaneously with the submission of each quarterly statement, Producer shall pay any amounts due to Owner. All statements shall become final and binding if Owner does not object thereto in writing within thirty-six (36) months of receiving the applicable statement.

6.          THIRD-PARTY AGREEMENTS.  Producer shall not enter into any agreement with a third party with respect to any Rights or any Subject Property without Owner's approval thereof (which approval shall not be withheld or delayed unreasonably, and which shall take into account then-current industry standards for the type of exploitation contemplated by the proposed agreement). Notwithstanding anything to the contrary contained herein, Owner's right to approve third-party agreements shall extend to only to the parties involved and the material terms thereof.

Producer may request that Owner preapprove certain parties or terms (either individually or as a list), and Owner shall approve or disapprove the submitted parties and/or terms within a reasonable period of time. Owner shall also have the right to approve the specific provisions of any third-party agreement or related document to the extent necessary to avoid a conflict with any other agreement or document to which Owner is a party or with any applicable law, treaty, or regulation, and to ensure compliance with Owner's other approval rights hereunder and the other terms hereof.

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7. CREDIT:

 (a)          For each Production, Producer shall accord Owner the following credits (except to the extent Owner agrees otherwise in writing):

 (i)           Customary source material credit substantially as follows: "Based on the Top Cow Productions, Inc.[comic book, comic books, or graphic novel, as appropriate]" on screen, on a card to be shared with only any other source material (and, if shared, then in first position), in the main titles;

 (ii)           An "in association with" production credit for Owner on screen, in the main titles, shared, if at all, only with Producer's production credit and the production credit, if any, of any other person or entity approved by Owner;

 (iii)          An Executive Producer credit for Silvestri and a Co-Producer or Co-Executive Producer credit for Hawkins, each on screen, on a card to be shared only with other executive producer credits or Co-Producer or Co-Executive Producer credits, as applicable, in the main titles.

 (b)          Except as specifically set forth in the Agreement, all characteristics of Owner's credits shall be in Producer's sole good faith discretion, provided that the size of type and on-screen duration for the credits for Silvestri and Hawkins shall be no less than the size of type of any credit for Rosenberg or any other producer; and the size of type and on-screen duration of Owner's source-material credit shall be not less than the size of type and of not less of a duration than any writing or other source-material credits.

 (c)          Owner's credits under this paragraph 7shall appear in all paid ads, inserts, and packaging wherever the billing block appears or wherever any writer, Producer, Rosenberg, or any other producer receives credit. Producer shall contractually require all distributors or other licensees to comply with the credit provisions set forth herein. Neither the inadvertent failure by Producer, nor the failure by any third party, to accord credit in accordance with the provisions of the Agreement shall be deemed a breach of the Agreement; provided, however, that upon Producer's receipt of written notice from Owner setting forth in reasonable detail any failure to so accord credit, Producer shall cause such failure to be cured on a prospective basis. If Owner (through  Producer or otherwise) shall receive more favorable credit provisions from any third party for a particular Production, then the terms hereof shall be amended to include such more-favorable terms in Owner's favor for such Production.

8. GRANT OF RIGHTS:

 (a)          Subject to Owner's "Reserved Rights"(as defined below), upon Producer's exercise of the option for a Subject Property as herein provided, if ever, Owner hereby grants to Producer, exclusively in perpetuity and throughout the universe, all right, title and interest in only that Subject Property, which includes but is not limited to the following:

 (i)                     all copyrights and trademarks (and extensions and renewals thereof) and the goodwill associated therewith in such Subject Property;

 (ii)                    all motion-picture rights in such Subject Property;

 (iii)                    all television rights (pay, free, film, tape, cable, live and otherwise) in such Subject Property;

 (iv)                    merchandising rights in such Subject Property; provided, however, that "Property-Based Merchandising" [as defined below] is excluded;

 (v)                    theme-park ride-naming and live-public- performance rights in such Subject Property;

 (i)all customary reasonable ancillary, allied and incidental rights in such Subject Property. Such rights shall include, by way of further illustration, sequel rights, but in each event subject to Producer receiving the following applicable payment from the applicable studio, production company, or other entity: (A) At least one hundred percent (100%) of the producer fees and rights payments and other payments -- fixed and/or contingent-- payable for the immediately preceding theatrical Production for any derivative theatrical Production, with such proportionate increases as any other producer receives

and calculated, where applicable, based on the budget of the derivative Production; or (B) Such fees and rights payments and other payments -- fixed and/or contingent -- approved by Owner for any other exploitation of Rights in any and all media and by any and all means now known or hereafter devised (other than exploitations of Owner's Reserved Rights).

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(vii)music and music-publishing rights, soundtrack-album and other soundtrack exploitation rights, promotional and advertising rights in such Subject Property; and

(viii)the right to distribute, to transmit, to

exhibit, to broadcast and otherwise to exploit all works produced pursuant to the rights granted hereunder by means of any and all media and devices whether now known or hereafter devised, and in any and all markets whatsoever, as well as the right of Producer in its discretion to make any and all changes in, additions to, and deletions from the Subject Property to the extent required for any agreement with a third party hereunder.

(b)All of the foregoing shall be sometimes collectively referred to herein as the "Rights." The Rights granted by Owner to Producer hereunder are in addition to -- and this Agreement shall in no way limit -- any right with respect to a Subject Property or the subject matter thereof that Producer may now or hereafter enjoy as a member of the general public.

(c)Owner reserves the following rights (the "Reserved Rights") in and to each Subject Property, subject to the terms and conditions set forth below.

(i)                    Publishing Rights: Any and all publishing rights in and to such Subject Property (including, without limitation, the following rights), except, if Producer shall have exercised the Option for a particular Subject Property, Producer shall then have the right to publish excerpts from and summaries of such Subject Property, or any motion picture or other versions thereof based upon that Subject Property, for advertising and/or publicizing purposes only (not for sale or resale) of any work produced pursuant to the Rights and the right to publish souvenir booklets (for release only at those theaters exhibiting a Production based on that Subject Property and produced pursuant to the Rights granted hereunder) and "making-of-the-movie" and "coffee-table" type books relating to the Production, provided that no such publication shall contain excerpts or summaries taken from such Subject Property in excess of 7,500 words in the aggregate or ten percent (10%) of the text of the Subject Property in the aggregate, or ten percent (10%) of the illustrations from the Subject Property in the aggregate (whichever is less), but not to exceed fifteen (15) full comic- book pages or the equivalent for the Subject Property for any particular Production (and subject to Owner's right to approve any such publication). The foregoing limitation is not intended to and shall not preclude Producer's publication of advertising and/or publicity materials in installments, subject to the foregoing limitations. With respect to any "making-of-the-movie" type books, such book(s) shall be titled differently than the Subject Property (but such title may contain the title of the Subject Property such as "The Making of the Film"), and Owner's name will not appear on the cover, the title page of the spine thereof other than as part of the billing block or credit list, if any, for the underlying picture, but Owner shall be accorded such copyright and trademark notices as Owner designates, as well as an "appears courtesy of Top Cow Productions, Inc." credit in any such book or periodical:

(A)Print Editions: The right to print, publish, sell, and otherwise distribute print editions of any Subject Property in comic-book, graphic-novel, or other book form, whether hardcover or softcover, and in magazines or other periodicals, whether in installments or otherwise, including, without limitation, in comic-book or comic-strip form, and on posters or trading cards or any other print format.

(B)Recorded Readings: The right to publish, sell, and otherwise distribute recorded readings of any Subject Property in the form of audiocassettes, CDs, DVDs, or other audiodiscs or similar audio devices.

(C) Digital or other Electronically Read or Transmitted Editions: The right to publish the text and/or illustrations of any Subject Property (or text and/or illustrations based thereon [including, without limitation, novelizations or wallpapers]) in the form of, without limitation, CD-ROM, DVD, videocassette tape, or similar electronically or optically read devices, and by means of any electronic, digital, or other transmission on-demand or over the Internet or any other network or system or on or by cell phones or other handheld devices. Such editions may contain moving (but not fully animated) or nonmoving illustrations or effects and music and/or narration; but shall not be deemed AV Productions(animated or otherwise) (it being agreed that Owner's use of moving illustrations in any edition hereunder or of any flash or other web-site animation for promotional or advertising purposes shall not -- taking into account

duration, quality, and extensiveness of the moving illustrations or animation -- conflict with Producer's rights hereunder).

(ii)Property-Based Merchandising: Property-Based Merchandising rights are reserved to Owner throughout the universe and in perpetuity. "Property-Based Merchandising" shall mean any merchandising items, regardless of whether licensed or otherwise exploited by Owner (or Owner's successor[s], licensee[s] and/or assignee[s]), which are derived from and/or based upon a Subject Property; provided, however, that it is understood and agreed that Property-Based Merchandising rights do not include the right to use any "Picture Elements" (defined as any element that is unique to a Production), but do extend to any other reserved right. Owner shall consider in good faith any third-party reasonable proposal to allow such party to share in increases in Owner's merchandising revenues for a particular Subject Property if such proposal is part of an overall acquisition of AV Production rights to that Subject Property and if a game based on such Subject Property shall have not been released during the relevant time period for calculating such third party's share in increases in Owner's merchandising revenues for that Subject Property.

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(iii)Reserved Copyrights and Trademarks: To the extent of the other Reserved Rights hereunder, Owner reserves all copyrights in each Subject Property. Also to the extent of the other Reserved Rights hereunder, Owner reserves any trademark rights in each Subject Property in Owner's own name which shall be limited solely to trademark classes corresponding to the Reserved Rights.

(iv)                      Game Rights: Owner reserves all game rights

(handheld, interactive, internet, wireless, video, and otherwise) in and to each Subject Property. The Rights for a particular Subject Property may, nonetheless, if necessary to close an agreement for an AV Production for a particular Subject Property, include the right to produce and to exploit interactive games based on that AV Production (but not of the underlying Subject Property itself) subject to any pre-existing agreement for the game rights to that Subject Property (including, without limitation, Owner's current and/or planned agreements with Eido s Interactive, Union Entertainment, or any individual game company (or any successor thereto), and any successor or replacement agreements). In such instance, Owner shall be willing to be subject to reasonable and customary holdback periods governing Owner's exploitation of game rights to the Subject Property in question.

(d)Owner shall have no right to utilize any elements from any work produced hereunder pursuant to the Rights or any new or changed material created by or for Producer in the exercise of the Reserved Rights or otherwise (but nothing contained herein shall in any way limit any rights Owner may now or hereafter enjoy as a member of the general public); provided that if Producer does not exercise the option for a particular Subject Property, Producer's use (if any) of such new or changed material shall be subject to Owner's rights therein and thereto). Notwithstanding the foregoing, but subject to any bona fide third-party agreements, any ideas, suggestions, or elements suggested, required, or added by Producer shall become Owner's property, which Owner shall be free to use without any obligation to Producer.

(e)In connection with the exercise by Owner of any of the Reserved Rights hereunder, Owner shall have the right (notwithstanding anything to the contrary contained herein) to advertise and to publicize same in any and all media, now known or hereafter devised (including, without limitation, radio and television) throughout the universe.

9.             REACQUISITION:

 (a)                      If Producer exercises the Option for a Subject Property but does not commence principal photography of the First Production based thereon within three (3) years after the date of such exercise (which three-year period may be extended by Producer for an additional two [2] years by the payment to Owner of $100,000 at any time prior to the expiration of the initial three-year period), such rights, as well as any material developed by or for Producer in connection with the Property (and any and all rights in and to such material) shall automatically revert to and be assigned and transferred to Owner, subject to any third-party agreements or rights to such material (to the extent specifically and expressly approved by Owner)and also subject, if applicable, to a lien in Producer's favor (which lien shall be extinguished not later than the date Owner enters into a Production option, purchase, or license agreement with a third party with respect to the reverted Subject Property) for the following amounts:

(i)An amount equal to all amounts paid to Owner therefor hereunder; and

(ii)The actual direct out-of-pocket cost paid to

third parties of creating such material developed by or for Producer plus simple interest on only those costs at the "prime rate" of Bank of America or at Producer's standard interest rate,

whichever is lower.

(b)            In the event of such a reacquisition by Owner, Producer shall remain attached to the reverted Subject Property in accordance with and subject to the terms hereof (including, without limitation, the applicable time periods specified in paragraph 2 hereof). The provisions of this paragraph 9(b) are not assignable by Producer.

10.ANNOTATION: If a Subject Property is based in whole or in part on a true story, Owner shall annotate or cooperate with Producer in annotating the Subject Property following Producer's customary and reasonable annotation guidelines and deliver the annotation to Producer on a date to be reasonably designated by Producer.

11.SECURITY INTEREST: Producer hereby grants to Owner a first- position security interest (subject only to prior existing liens as of the date hereof) in and to all rights licensed or granted hereunder to secure Owner's rights hereunder, including the right to receive income. Producer shall execute any documents Owner reasonably requires, including Mortgages of Copyright and UCC- 1 Financing Statements, to perfect Owner's security interest.

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12.VIDEO CASSETTE/DVD:      Owner shall be entitled to receive one (1) videocassette and one (1) DVD copy of each Production or other program produced hereunder at such time, if ever, as they become commercially available.

13.PREMIERES: Silvestri and Hawkins and one guest apiece shall be invited to the first United States premiere of any Production.

14. TERMINATION:

(a)            Owner shall have the right to terminate the Option

Period and any rights granted hereunder that are not the subject of an agreement with a third party immediately upon notice to Producer, if Scott Rosenberg is no longer running the day-to-day affairs of Producer or otherwise is no longer affiliated with Producer.

(b)                      The Option Period and any rights granted hereunder that are not the subject of an agreement with a third party shall automatically and immediately terminate in the event (i) Producer is bankrupt, insolvent, or in receivership, reorganizes, or consents to the appointment of a receiver, liquidator, trustee, or assignee in bankruptcy, or any action or proceeding under any bankruptcy or insolvency law is taken by, for, or against

Producer (other than a claim filed by Producer as a creditor), or (ii) Producer makes or attempts to make an assignment for the benefit of creditors or a composition with creditors.

15.             STANDARD TERMS AND CONDITIONS:    The balance of the terms of this Agreement consists of Producer's Standard Terms and Conditions ("Standard Terms and Conditions"), attached hereto and incorporated herein by reference.

If the foregoing accurately reflects the agreement between the parties, please so indicate by signing below.

AGREED AND ACCEPTED: PLATINUM STUDIOS, LLC

By:  /s/ Scott Mitchell Rosenberg

Scott Mitchell Rosenberg

Its:

TOP COW PRODUCTIONS, INC.

By: /s/ Matt Hawkings

Matt Hawkins

Its: President

8

STANDARD TERMS AND CONDITIONS

Following are the Standard Terms and Conditions of the Agreement between Producer and Owner in connection with the Subject Property. All defined terms set forth in these Standard Terms and Conditions shall be deemed to be defined as set forth in the Agreement. In the event of any conflict between the Standard Terms and Conditions and the main Agreement, the provisions of the main Agreement shall control.

A.RENTAL AND LENDING RIGHTS: To the extent required under any agreement with a third-party distributor, financier, studio, or production company, Owner hereby waives the benefit of any provision of law known as "droit moral" or moral rights of authors or any similar or analogous law or decision in any country of the world. Owner, on Owner's own behalf and on behalf of Owner's successors-in-interest, heirs, executors,

administrators and assigns hereby assign to Producer in perpetuity all rental and lending rights under national laws

(whether implemented pursuant to the EC Rental and Lending Rights Directive or otherwise) to which Owner may now be or hereafter may become entitled therefrom. Owner agrees, on Owner's own behalf and on behalf of Owner's successors-in-interest, heirs, executors, administrators and assigns, not to institute, support, maintain or permit directly or indirectly any litigation or proceedings instituted or maintained on the ground that Producer's (or its designee's) exercise of the rights granted to Producer in the First Production in any way constitutes an infringement or violation of any such rental or lending right as aforesaid. Owner hereby acknowledges that the consideration to which Owner is entitled pursuant to this Agreement includes consideration for the assignment of rental and lending rights provided for in this paragraph and that the said consideration is an equitable and adequate part of the revenues derived or to be derived by Producer from the said rights.

B.AUTOMATIC EXTENSION OF OPTION PERIOD: The Option Period for a particular Subject Property shall be extended automatically with respect to that Subject Property as follows and as

applicable:

(1) Force Majeure: The Option Period shall be extended by a period of time equal to the period of time of any event of force maj eure which shall interrupt, delay or otherwise

materially interfere with the development, pre-production or production of the First Production (including, without

limitation, any strikes, walkouts, lockouts or other labor unrest

in the entertainment industry) not to exceed six months, but only the Option Period for Productions directly affected by any such event.

(2) Unresolved Claims: Without limiting any other rights Producer may have hereunder, Owner agrees that if there is any claim, arbitration or litigation (collectively "Claim") alleging

a material breach of Owner's representations and warranties with respect to the First Production of the Subject Property in question, and by reason of which Producer elects in its sole good-faith judgment to suspend development, pre-production

and production activities in connection with that First Production, the Option Period for that Subject Property shall be extended for any period during which such Claim is outstanding (such suspension and extension shall not exceed six [6] months unless an action is commenced). At any time during the pendency of any such Claim, Producer may, in addition to all its other legal and equitable remedies, rescind this Agreement and, in such event and if Owner is actually in material breach hereof, Owner shall pay Producer any and all monies received from Producer in connection with the Subject Property. Each party's representations, warranties and resultant obligation to indemnify the other in the event of any breach hereof shall survive rescission of this Agreement.

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Producer shall give Owner written confirmation of any such extension promptly after the commencement thereof.

C.NO OBLIGATION TO USE:   Producer shall have no obligation

actually to exercise any of the rights granted to Producer hereunder, or to produce, or exploit a First Production, or to continue production, or exploitation, if commenced.

D.BOOKS AND RECORDS; AUDIT RIGHTS:

Not more than once per year, Owner shall have the right, on not less than ten ( 10) business days' prior notice to examine and to audit all books of account and records in Producer's possession or under its control relating to this agreement (including any software or digital records). Such audits shall be conducted by an independent accounting firm at Producer's premises or where Producer keeps such books and records (provided such location shall be within the State of California). Owner shall not audit the same records more than once; provided, however, that an audit for one year may include an audit for any previous year for which no audit was conducted. Such audits shall be at Owner's cost and expense, except that if an audit establishes a deficiency of more than five percent (5%), all actual and reasonable costs and expenses of and incurred by Owner in connection with such audit shall be paid by Producer, along with the amount of the deficiency plus interest thereon.

Owner's exercise, in whole or in part, of its right to inspect or to audit records and accounts (or of any other right herein granted), the receipt or acceptance by Owner of any statement, payment, and/or report or the deposit by Owner of any payment from Producer shall be without prejudice to any other rights or remedies of Owner and, without limiting the foregoing, shall not stop or prevent Owner from thereafter disputing the completeness, accuracy, and/or correctness of any such statement, report, or payment at any time and, in the event that any inconsistencies or mistakes are discovered in any statements or payments, Producer shall immediately rectify same and make the appropriate payments in accordance with this Agreement's terms.

 Time is of the essence with respect to all payments to be made hereunder to Owner. If Producer fails to make payment when due of any monies owed hereunder, then, without limiting any of Owner's rights or remedies, Owner shall be entitled to interest on such overdue amount at a rate equal to seven percent (7%) per annum, or such lower rate as may be the maximum rate permitted under applicable law, during the period between the date the payment first becomes due and the date such amount is actually paid.

E. WARRANTIES: Owner represents and warrants as follows

(1)Owner has not and will not enter into any commitment which will conflict materially in any way with any of Owner's contractual obligations under any of the provisions hereunder.

(2)Owner has not done or omitted to do and will not do or omit to do any act or thing by license, grant or otherwise, which will (or probably will) impair or encumber materially any of the rights herein granted, or interfere with the full enjoyment of said rights.

(3) Except for any Excluded Material, Owner is the sole Owner of all rights herein granted and has full power and authority to grant said rights to Producer and Owner has not granted, encumbered, or otherwise disposed of in any manner to any person.

 (4)Except for any Excluded Material, Owner has not exploited any Subject Property (or any version or adaptation thereof), as an AV Production anywhere throughout the world.

 (5)Each Subject Property is or shall be original with Owner (or Owner's licensors or predecessors in interest) or in the public domain. To the best of Owner's knowledge, the Subject Properties do not and shall not violate the copyright or any other right of any third party; and are not presently the subject of any litigation or of any claim that is likely to give rise to litigation.

F.INDEMNIFICATION/E&O: Owner agrees to indemnify Producer against and to hold Producer harmless from any damages, liability, losses, costs, expenses, obligations or claims (including reasonable outside attorneys' fees) (collectively "Claims") arising out of a breach of Owner's obligations, representations and warranties hereunder that are reduced to an adverse judgment or settlement with Owner's consent (not to be withheld or delayed unreasonably).

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Producer agrees to defend and to indemnify Owner and to hold Owner harmless from any Claims arising with respect to (i) material added to the Subject Property by Producer or at

Producer's request and/or based on any information which is known to Producer which conflicts with Owner's annotation; and (ii) the development, production, exhibition, promotion, advertising, publicity, or exploitation of any Production (except to the extent arising out of the breach of Owner's obligations, representations, or warranties hereunder).

Owner shall be an additional insured on any errors & omissions/media perils insurance policy for each Production.

G.REMEDIES: Owner's sole and exclusive remedy for any breach, termination or cancellation by Producer hereof or any term hereof (including any term pertaining to credit) shall be an action for damages and Owner irrevocably waives any right to rescission or equitable or injunctive relief.

H.ASSIGNMENT: Each party hereto shall have the right to

assign this Agreement and all or any part of its rights hereunder, provided that no such assignments shall relieve such party of its obligations hereunder.

I.NOTICES: Notices hereunder shall be in writing and shall be given by certified or express mail, courier, or personal delivery to the appropriate party, and the date of such personal delivery, or the date three (3) days after the date of such mailing or courier dispatch shall be the date of the giving of such notice.

All approvals hereunder may be given by email. A copy of all notices to Owner shall be sent concurrently to Law Offices of Harris M. Miller II, P.C., 8424A Santa Monica Boulevard, #127, West Hollywood, CA 90069-4267. Owner shall be copied on any document, instrument, draft, and/or correspondence Producer sends or receives concerning any Subject Property or Production.

J.ADDITIONAL DOCUMENTS: Each party shall execute any customary documents and do any other acts consistent with the terms set forth herein as may be reasonably required by the other (or its or their assignees or licensees) to further evidence or to effectuate their rights as set forth in this Agreement. Upon either party's failure promptly to do so after reasonable notice and opportunity to review any such document, such party hereby appoints the other party hereto as such party's attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and coupled with interest) with full power of substitution and delegation. Each party shall promptly furnish the other party with a copy of any such document executed by such party hereunder. Upon exercise of the option with respect to any Subject Property and subject to all of the other terms hereof, Producer shall complete the form Short-Form Assignment attached hereto with respect to that Subject Property and Owner shall promptly execute it.

K.CONFIDENTIALITY: Neither party will disclose any material provision of this Agreement to any third party unless reasonably necessary to do so. Additionally, Owner shall not issue publicity for any Production without Producer's prior consent, except that Owner may issue publicity which relates primarily to a Subject Property in which any Production and/or Producer and/or any personnel in connection therewith are mentioned incidentally, provided that such reference is not derogatory of any Production. Neither party shall disclose to any third party (except on a confidential basis to their business representatives) any proprietary information relating to any Production or to the other party (or their parent companies, subsidiaries and affiliates)(including, without limitation, the budget of any Production, the contents of any contingent compensation statement or the terms of any agreements pertaining to any Production), without prior written consent of the other.

L.BREACH: Neither party shall be deemed in breach hereunder unless the party has received written notice setting for the alleged breach and then fails to cure the alleged breach within thirty (30) days of the date thereof(five [5] business days for any payment or accounting obligation).

MISCELLANEOUS: The Agreement, with the Standard Terms and Conditions, contains the full and complete understanding between the parties and supersede all prior agreements and understandings pertaining hereto and cannot be modified except by a writing signed by each party. This agreement is governed by the laws of the United States and of the State of California, and both parties consent to the jurisdiction of the state and federal courts residing in the County of Los Angeles to adjudicate any disputes with respect hereto. If any action or any other proceeding is brought for the enforcement of this agreement, or if a dispute arises under this agreement, the successful or prevailing party shall be entitled to recover actual and reasonable outside attorneys' fees and other costs incurred in that action or proceeding, in addition to any other relief to which it may be entitled. Any party in whose favor a judgment has been entered shall also be entitled to recovery of its attorney's fees and costs in enforcing such judgme

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EX-10.7

Exhibit 10.7

PUBLISHING LICENSE AGREEMENT

Publishing License Agreement between Kiss Catalog Ltd. and Platinum Studios LLC dated April 28, 2005. Incorporated as PDF version.

EX-10.8

Exhibit 10.8

OFFICE LEASE

Between

DOUGLAS EMMETT 1995, LLC,

a Delaware limited liability company

as Landlord

and

PLATINUM STUDIOS, LLC,

a California limited liability company

as Tenant

Dated

July 10, 2006

OFFICE LEASE

BASIC LEASE INFORMATION

Date: Landlord: Tenant: July 10, 2006 DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company PLATINUM STUDIOS, LLC, a California limited liability company

SECTION
1.1	Premisses:	11400 West Olympic Boulevard, Suite 1400  Los Angeles, California 90064
1.4	Rentable Area of Premises:	Approximately 12,493 square feet
1.4	Usable Area of Premises:	Approximately 11,357 square feet
2.1	Delivery Date	One (1) business day after the full execution of the Lease
	Beneficial Occupancy Period	Delivery Date until August 31, 2006
	Term:	Five (5) Years
	Commencement Date:	September 1, 2006
	Expiration Date:	August 31, 2011
3.1	Fixed Monthly Rent:	$31,857.15 per month for the first twelve (12) calendar months of the Term.
3.3	Date of First Increase:	September 1, 2007, and then annually thereafter
	Fixed Monthly Rent Increase on	Four percent (4%) percent per annum
	September 1, 2007:
3.7	Security Deposit:	$37,268.36
4.1	Tenant's Share	5.50%
4.2	Base Eyar for Operating Expenses:	2007
6.1	Use of Premises:	General office use consistent with the operation of
		a first-class office building on the Olympic Corridor
		in the West Los Angeles area
16.1	Tenant's Address for Notices:
	Before the Commencement Date:	9744 Wilshire Boulevard, Suite 210
		Beverly HIlls, California 90212
	After the Commencement Date:	114400 West Olympic Boulevard,
		Suites 1100 and 1400
		Los Angeles, California 90064
	Contact:	Mr. Scott Mitchell Rosenberg
	Landlord's Addres for Notices:	DOUGLASS EMMETT 1995, LLC
		Director of Property Management
		c/o Douglas, Emmett and Company
		808 Wilshire Boulevard, Suite 200
		Santa Monica, California 90401
20.5	Brokers:	Douglas, Emmett and Company
		808 Wilshire Boulevard, Suite 200
		Santa Monica, California 90401 and
		Bietler Commercial Realty Services
		825 South Barrington Avenue
		Lost Angeles, California 90049
20.25	Guarantors:	Scott Mitchell Rosenberg, and individual, and
		Brian K. Altounian, an individual, jointly and
		severally
21.1	Parking Permits:	Tenant shall have the right, but not the obligation to
		purchase thirty-four (34) permits for unreserved
		spaces
23.	Letter of Credit	$336,000.00
Exhibit G

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Except as noted hereinbelow, the foregoing Basic Lease Infirmation is hereby incorporated into and made a pail of the Lease. The Section referemce in the led? margin of the Basic Lease litfotwunion exists solely to indicate u^,here such reference initialb^, appeinw in the Lease elocument, Except as specified hereinbelow, each such reference in the Lease document shall incorporate the applicable Basic Lease In [Munition.

iii

OFFICE LEASE

TABLE OF CONTENTS

ARTICLE		PAGE
ARTICLE 1	DEMISE OF PREMISES	1
ARTICLE 2	COMMENCEMENT DATE AND TERM	2
ARTICLE 3	PAYMENT OF RENT, LATE CHARGE	2
ARTICLE 4	ADDITIONAL RENT	4
ARTICLE 5	ETHICS	8
ARTICLE 6	USE OF PREMISES	8
ARTICLE 7	CONDITION UPON VACATING & REMOVAL OF PROPERTIES	9
ARTICLE 8	UTILITIES AND SERVICES	10
ARTICLE 9	TENNANT'S IDEMNIFICATION AND LIMITATION ON LANDLORD'S LIABILITY	12
ARTICLE 10	COMPLIANCE WITH LAWS	13
ARTICLE 11	ASSIGNIMENT AND SUBLETING	13
ARTICLE 12	MAINTENACE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND OR ALTERATION	17
ARTICLE 13	CONDEMNATION	21
ARTICLE 14	MORTGAGE SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE	22
ARTICLE 15	ESTOPPEL CERTIFICATES	23
ARTICLE 16	NOTICES	23
ARTICLE 17	DEFAULT AND LANDLORD'S OPTION TO CURE	23
ARTICLE 18	DAMAGES; REMEDIES; RE-ENTRY BY LANDLORD; ETC	25
ARTICLE 19	INSURANCE	26
ARTICLE 20	MISCELLANEOUS	28
ARTICLE 21	PARKING	31
ARTICLE 22	CONCIERGE SERVICES	31
ARTICLE 23	LETTER OF CREDIT	32
Exhibits
A --	Premises Plan
B --	Improvement Construction Agreement - Tennant Build
B -1--	Construction by Tenant During Term
C --	Rules and Regulations
D --	First Amendment Memorandum of Lease Term Dates and Rent   INTENTIONALLY DELETED
E --	Guaranty of Lease
F --	Asbestos Rider INTENTIONALLY DELETED
G --	Form of Letter of Credit
H --	Subordination, Non-Disturbance and Attornment Agreement

iv

OFFICE LEASE

This Office Lease, dated July 10, 2006, is by and between DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company ("Landlord"), with an office at 508 Wilshire Boulevard, Suite 200, Sant'a Monica, California 90401, and PLATINUM STUDIOS, LLC, a California limited liability company ("Tenant"), with an office at 9744 Wilshire Boulevard, Suite 210, Beverly Hills, California 90212.

ARTICLE 1

DEMISE OF PREMISES

Section 1.1. Demise. Subject to the covenants and agreements contained in this Lease, Landlord leases to Tenant and Tenant hires from Landlord, Suite Number 1400 (the "Premises") on the fourteenth (14^th) (Moil, in the building located at 11400 West Olympic Boulevard, Los Angeles, Cali lomia 90064 (the "Building"). The configuration of the Premises is shown on Exhibit A, attached hereto and made a part hereof by reference.

Tenant acknowledges that it, has made its own inspection of and inquiries regarding the Premises, whidh are already improved. Therefore„ Tenant accepts the Premises in their "as-is" condition. Tenant further acknowledges that Landlord has made no representation or warranty, express or implied, except as are contained in this Lease and its Exhibits, regarding the condition, suitability or usability of the Preniises or the Building for the purposes intended by Tenant.

The Building, the Building's parking facilhies, any outside plaza areas, land and other improvements surrounding the Building which are designated from time to time by Landlord as common areas appurtenant to or servicing the Building, and the land upon which any of the foregoing are situated, are herein sometimes collectively referred to as the "Real Property."

Section 12. Tenant's Non-Exclusive Use Tenant is granted the nonexclusive use of the common corridors and hallways, stairwells, elevators, restrooms, parking facilities, lobbies and other public or common areas located on the Real Property. However, the manner in which such public and common areas are maintained and operated shall be at the reasonable discretion of Landlord, and Tenant's use thereof shall be subject to such reasonable and non-discriminatory rules, regulations and restrictions as Landlord may make from time to time.

Section 1.3. Landlord's Reservation of Rights. Landlord specifically reserves to itself use control and repair of the structural portions of all perimeter walls of the Premises, any balconies, terraces or roofs adjacent to the Premises (including any flagpoles or other installations on said walls, balconies, terraces or roofs) and any space in and/or adjacent to the Premises used for shafts, stairways, pipes, conduits, ducts, mail chutes, conveyors, pneumatic tubes, electric or other utilities, sinks, fan rooms or other Building facilities, and the use thereof, as well as access thereto through the Premises. Landlord also Specifically reserves to itself the following rights:

a) To designate all sources furnishing sign painting or lettering 

b) To Consistantly have pass to the Premises

c) To grant to anyone the exclusive right to conduct any, particular business or undertaking in the Building, so long as Landlord's granting of the same does, not prohibit Tenant's use of the Premises for Tenant's Specified Use, as defined in Article 6

d)   To enter the Premises at reasonable times with reasonable prior notice (except for emergencies) to inspect, repair, alter, improve, update or make additions to the Premises or the Building, so long as Tenant's access to and use of the Premises is not materially impaired thereby;

e)   During the last six (6) months of the Term, to exhibit the Premises to prospective future tenants upon not less than 24 hours prior notice and accompanied by a representative of Tenant;

f) Subject to the provisions of Article 12, to at any time and from time to time whether at Tenant's request or pursuant to governmental requirement, repair, alter, make additions to improve, or decorate all or any portion of the Real Property, or the Building at any reasonable time with prior reasonable notice (except for emergencies), so long as Tenant's access to and use of the Premises is not materially impaired thereby. In connection therewith, and without limiting the generality of the foregoing rights, Landlord shall specifically have the right to remove, alter, improve or rebuild all or any part of the lobby of the Building as the same is presently or shall hereafter be constituted;

g) Subject to the provisions of Article 12, Landlord reserves the right to make alterations or additions to dr change the location of elements of the Real Property and any common areas appurtenant thereto at any reasonable time with prior reasonable notice (except for emergencies), so long as Tenant's access to and use of the Premises is not materially impaired thereby; and/or

h) To take such other actions as may reasonably be necessary when the same are required to preserve. protect or improve the Premises, the Building, or Landlord's interest therein at any reasonable time with prior reasonable notice (except for emergencies).

Section 1.4. Area.Landlord and Tenant agree that the usable area (the "Usable Area") of the Premises has been measured using the June, 1996 standards published by the Building Owners' and Managers' AssoCiation ("BOMA"), as a guideline, and that Landlord is utilizing a deemed add-on factor of 10.00% to compute the rentable area (the "Rentable Area") of the Premises. Rentable Area herein is calculated as 1.1000 times the estimated Usable Area regardless of what the actual square footage of the common areas; of the Building may be, and whether or not they are more or less than 10.00% of the total estimated

1

Usable Area of the Building. The purpose of this calculation is solely to provide a general basis for comparison and pricing of this space in relation to other spaces in the market area.

Landlord and Tenant further agree that even if the Rentable or Usable Area of the Premises and/or the total Building Area are later determined to be more or less than the figures stated herein, for all purposes of the Lease, the figures stated herein shall be conclusively deemed to be the actual Rentable or Usable Area of the Premises, as the case may be.

Section 1.5. Quiet Enjoyment. Subject to all of the covenants, agreements, terms, provisions and conditions of this Lease Tenant shall lawfully and quietly hold, occupy and enjoy the Premises during the Term.

Section 1.6. No Light, Air or View Easement. Any diminution or shutting off of light, air or view by any structure which is now or may hereafter be erected on lands adjacent to the Building shall in no way affect this Lease or impose any liability on Landlord, provided Landlord shall not (i) construct any signhge or other appendage to the Building that materially affect the view from the Premises, or (ii) permit any tenant to construct any signage or other appendage to the Building that materially affect the view from the Premises. Noise, dust or vibration or other ordinary incidents to new construction of improvements on lands adjacent to the Building, whether or not by Landlord, shall in no way affect this Lease or impose any liability on Landlord.

Section 1.7. Relocation. INTENTIONALLY OMITTED.

ARTICLE 2

DELIVERY DATE, COMMENCEMENT DATE AND TERM

Section 2.1. Delivery Date, Commencement Date and Term.

Subject to Tenant's prior delivery to Landlord and Landlord's receipt of the written evidence of insurance coverage required under Lease Section 19.2 herein, Tenant may enter and take possession of the Premises on the date that is one (1) business day following the full execution of the Lease (the "Delivery Date") for among other things, Tenant's Contractor performing Tenant's Improvements contemplated under Exhibit B attached hereto and incorporated herein. Tenant's occupancy of the Premises as of the Delivery Date until August 31, 2006 (the "Beneficial Occupancy Period") shall be subject to Tenant complying with all of the provisions and covenants contained herein, except that Tenant shall not be obligated to pay Fixed Monthly Rent or Additional Rent from the Delivery Date until the expiration of the Beneficial Occupancy Period. Landlord and Tenant shall confirm the finalized Deliiery Date, and Beneficial Occupancy Period, if any as soon as they are determined.

This Lease shall commence on September 1, 2006 (the "Commencement Date"), and shall end, unless sooner terminated as otherwise provided herein, at midni^ght on August 31, 2011 (the "Termination Date").

Section 2.2. Holding Over If Tenant fails to deliver possession of the Premises on the Termination Datd., but holds over after the expiration or earlier termination of this Lease without the express prior written consent of Landlord, such tenancy shall be construed as a tenancy from month-to-month (terminable by either Landlord or Tenant upon 30 days' prior written notice to the other) on the same terns and conditions as are contained herein, except that the Fixed Monthly Rent payable by Tenant durinu such period of holding over shall automatically increase as of the Termination Date to an amount equaf to one hundred and fifty percent (150%) of the Fixed Monthly Rent payable by Tenant the calendar month immediately prior to the date when Tenant commences such holding over (the "Holdover Rent

.

Tenant's payment of such Holdover Rent, and Landlord's acceptance thereof, shall not constitute a waiver by Landlord of any of Landlord's rights or remedies with respect to such holding over, nor shall it be deemed to be a consent by Landlord to Tenant's continued occupancy or possession of the Premises past the time period covered by Tenant's payment of the Holdover Rent.

Furtlaerrnore, if Tenant fails to deliver possession of the Premises to Landlord within forty-five (45) days following the expiration or earlier termination of this Lease, and Landlord has theretofore notified Tenant in writing, at least sixty (60) days prior to the expiration or earlier termination of this Lease, that Landlord requires possession of the Premises for a succeeding tenant, then, in addition to my other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys' fees and expenses) and liability resulting from such failure, including without limiting the foregoing, any claims made by any succeeding tenant arising out of Tenant's failure to so surrender, and any lost profits to Landlord resulting therefrom.

Notwithstanding the provisions contained hereinabove regarding Tenant's liability for a continuing holdover, Landlord agrees to use commercially reasonable efforts to insert into any future lease of another tenant proposing to occupy the Premises provisions, permitting mitigation of Tenant's damages arising out of Tenant's temporary holdover.

ARTICLE 3

PAYMENT OF RENT, LATE CHARGE

SectiOn 3.1. Payment of Fixed Monthly Rent and Additional Rent. "Rent" shall mean: all payments of monies in any form whatsoever required under the terms and provisions of this Lease, and shall consist of:

a)	"Fixed Monthly Rent," which shall be payable in equal monthly installments of 531,857.15; plus
b)	Additional Rent as provided in Article 4 and elsewhere in this Lease.

2

Section 3.2. Manner of Payment. Tenant shall pay Fixed Monthly Rent and Additional Rent immediately upon the same becoming due and payable, without demand therefor, and without any abatiment except as set forth in this Lease, set off or deduction whatsoever, except as may be expressly provided in this Lease. Landlord's failure to submit statements to Tenant stating the amount of Fixed Monthly Rent or Additional Rent then due, including Landlord's failure to provide to Tenant a calcdlation of the adjustment as required in Section 3.3 or the Escalation Statement referred to in Artiqle 4, shall not constitute Landlord's waiver of Tenant's requirement to pay the Rent called for herein, unless Landlord fails to provide an Escalation Statement described in Article 4 within three (3) years after the calendar year to which such Escalation Statement is applicable, in which event Landlord shalllbe deemed to have waived its right to collect any Additional Rent for such calendar year for which Tenant had not theretofore been billed. Tenant's failure to pay Additional Rent as, provided herein shall constitute a material default equal to Tenant's failure to pay Fixed Monthly Rent when due.

Rent shall be payable in advance on the first day of each and every calendar month throughout the Term, in lawful money of the United States of America, to Landlord at 11400 West Olympic Boulevard, Suite 150, Los Angeles, California 90064, or at such other place(s) as Landlord designates in writing to Tenant. Tenant's obligation to pay Rent shall begin on the Commencement Date and continue throtighout the Tenn, without abatement, setoff or deduction, except as otherwise specified hcreinbelow.

Concurrent with Tenant's execution and delivery to Landlord of this Lease, Tenant shall pay to Landlord the Fixed Monthly Rent due for the first month of the Term.

Section 3.3. Fixed Monthly Rent Increase (Suite 1100 and 1400). Commencing on September I, 2007, and continuing through August 31, 2008, the Fixed Monthly Rent payable by Tenant shall Mcrease froml $31,857.15 per month to $33,131.44 per month.

Commencing on September 1, 2008, and continuing through August 31, 2009, the Fixed Monthly Rentpayable by Tenant shall increase from $33_' 131.44 per month to $34,456.69 per month.

Commencing on September 1, 2009, and continuing through August 31, 2010, the Fixed Monthly Rentlpayable by Tenant shall increase from $34,456.69 per month to $35,834.96 per month.

Commencing on. September I, 2010; and continuing throughout the remainder of the initial Tenn, the Fixed Monthly Rent payable by Tenant shall increase from $35,834.96 per month to S37,268.36 per month.

Section 3.4. Tenant's Payment of Certain Taxes. Tenant shall, within thirty (30) days following Tendnt's receipt of substantiating documentation from Landlord, reimburse Landlord, as Additional Rent; for any and all taxes, surcharges, levies, assessments, fees and charges payable by Landlord when:

a)   assessed on measured by or reasonably attributable to the cost or value of Tenant's equipment, furniture, fixtures and other personal property located in the Premises;

b)   assessed on or measured by any rent payable hereunder, including, without limitation, any gross income tax, gross receipts tax, or excise tax levied by the City or County of Los Angeles or any other governmental body with respect to the receipt of such rent (computed as if such rent were the only income of Landlord), but solely when levied by the appropriate City or County agency in lieu of or as an adjunct to, such business license(s), fees or taxes as would otherwise have been payable by Tenant directly to such taxing authority; or

c) upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof.

Said taxes shall be due and payable whether or not now customary or within the contemplation of Landlord and Tenant. Notwithstanding the above, in no event shall the provisions of this Section 3.4 serve to entitle Landlord to reimbursement from Tenant for any federal, state, county or city income tax payable by Landlord or the managing agent of Landlord, or any gift, estate, transfer or inheritance taxes assessed against Landlord or any of its partners, shareholders or members.

Section 3.5. Certain Adjustments. If

a)   the Commencement Date occurs on other than January 1st of a calendar year or the Lease expires or terminates on other than December 31st of a calendar year; or

b) any abatement of Fixed Monthly Rent or Additional Rent occurs during a calendar year, then_Ithe amount payable by Tenant or reimbursable by Landlord during such year shall be adjusted proportionately on a daily basis, and the obligation to pay such amount shall survive the expiration or earlier termination of this Lease.

If the Commencement Date occurs on other than the first day of a calendar month, or the Lease expires on a day other than the last day of a calendar month, then the Fixed Monthly Rent and Additional Rent payable by Tenant shall be appropriately apportioned on a prorata basis for the number of days remaining in the month of the Term for which such proration is calculated.

If the amount of Fixed Monthly Rent or Additional Rent due is modified pursuant to the terms of this Lease, such modification shall take effect the first day of the calendar month immediately following the date such modification would have been scheduled.

Section 3.6. Late Charge and Interest. Tenant acknowledges that late payment by Tenant to Landlord of Fixed Monthly Rent or Additional Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which are extremely difficult and impracticable to fix. Such costs include, withOut limitation, processing and, accounting charges and late charges that may be imposed on Landlord by the terms of any encumbrance and note secured by any encumbrance covering the Premises.

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Therefore, if any installment of Fixed Monthly Rent or Additional Rent and other payment due from Tenant hereunder is not received by Landlord within five (5) business days of the date it becomes due, Tentint shall pay to Landlord on demand an additional sum equal to five percent (5%) of the overdue amount as a late charge. The parties agree that this late, charge represents a fair and reasonable settlement against the costs that Landlord will incur by reason of Tenant's late payment. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, or prevent Landlord from exercising any of the other rights and remedies available to Landlord.

Every installment of Fixed Monthly Rent and Additional Rent and any other payment due hereunder from Tenant to Landlord which is not paid within twelve (12) days after the same becomes due and payable shall, in addition to any Late Charge already paid by Tenant, bear interest at the rate of ten percent (10%) per annum from the date that the same originally became due and, payable until the date it is paid. Landlord shall bill. Tenant for said interest, and Tenant shall pay the same within five (5) business days of receipt of Landlord's billing.

Notwithstanding the foregoing, Tenant shall not be assessed any late charge for the first two (2) late payMents in each twelve (12) month period of the Term so long as Tenant pays such amount within five (5) husiness days of Tenant's receipt of written notice that such amount has not been paid.

Section 3.7. Security Deposit Concurrent with Tenant's execution and tendering of this Lease to Landlord, Tenant shall deposit the sum of $37,268.36 (the "Security Deposit"), which amount Tenant shall; thereafter at all times maintain on deposit with Landlord as security for Tenant's full and faithful observance and performance of its obligations under this Lease (expressly including, without limitation, the payment as and when due of the Fixed Monthly Rent, Additional Rent and any other sums or damages payable by Tenant hereunder and the payment of any and all other damages for which Tenant shall; be liable by reason of any act or omission contrary to any of said covenants or agreements). Landlord shall have the right to commingle the Security Deposit with its general assets and shall not be obligated to pay Tenant interest thereon.

If at any time Tenant defaults in the performance of any of its obligations under this Lease, after the expiration of any applicable notice and cure period, then, Landlord may

a) apply as much of the Security Deposit as may be reasonably necessary to cure Tenant's non-payment of the Fixed Monthly Rent, Additional Rent and/or other sums or damages due from Tenant; and/or;

h)  if an Event of Default (as hereinafter defined) has occurred; apply so much of the Security Deposit as May be reasonably necessary to reimburse all expenses incurred by Landlord in curing such default; or

c)  if the Security Deposit is insufficient to pay the sums specified in Section 3.7 (a) or (h), elect to apply the entire Security Deposit in partial payment thereof, and proceed against Tenant pursuant to the provisions of Article 17 and Article 18 herein.

If as a result of Landlord's application of any portion or all of the Security Deposit, the amount held by Landlord declines to less than $37,268.36, Tenant shall, within ten (10) days after demand therefor, deposit with Landlord additional cash sufficient to bring the then-existing balance held as the Security Deposit to the amount specified hereinabove. Tenant's failure to deposit said amount shall constitute a material breach of this Lease.

At the expiration or earlier termination of this Lease, Landlord shad deduct from the Security DepOsit being held on behalf of Tenant any unpaid sums, costs, expenses or damages payable by Tenant pursuant to the provisions of this Lease; and/or any costs required to cure Tenant's default or performance of any other covenant or agreement of this Lease, and shall, within thirty (30) days after the expiration or earlier termination of this Lease, return to Tenant, without interest, all or such part of the Security Deposit as then remains on deposit with Landlord.

ARTICLE 4

ADDITIONAL RENT

Section 4.1. Certain Definitions. As used in this Lease:

a)   ''Escalation Statement" means a statement by Landlord, setting forth the amount payable by Tenant Or by Landlord, as the case may be, for a specified calendar year pursuant to this Article 4.

b)   "Operating Expenses" means the followinu in a referenced calendar year including the Base Year as hereinafter defined, calculated assuming the Building is at least ninety-five percent (95%) occupied: all costs of management, operation, maintenance, and repair of the Building.

By way of illustration only Operating Expenses shall include, but not be limited to management fees paid by Landlord to any third-party, which shall not exceed those reasonable and customary in the geographic area in which the Building is located; water and sewer charges; any and all insurance premiums not otherwise directly payable by Tenant; license, permit and inspection fees; air conditioning (including repair of same); heat; light; power and other utilities; steam; labor; cleaning and janitorial services; guard services; supplies; materials; equipment and tools.

Operating Expenses shall also include the cost or portion thereof of those capital improvements made to the Building by Landlord during the Term:

i)   to the extent that such capital improvements reduce other direct expenses, when the same were made to the Building by Landlord after the Delivery Date, or

ii)   that are required under any governmental law or regulation that was not applicable to the Building as of the Delivery Date.

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Said capital improvement costs, or the allocable portion thereof (as referred to in clauses (i) and 6i) above), shall be amortized over the useful life of any such capital improvement pursuant to generally-accepted accounting principles, together with interest on the unamortized balance at the rate of ten percent (10%) per, annum.

Operating Expenses shall also include all general and special real estate taxes, increases in assessments or special assessments and any other ad valorem taxes, rates, levies and assessments Paid during a calendar year (or portion thereof) upon or with respect to the Building and the personal Property used by Landlord to operate the Building, whether paid to any governmental or quasi-governmental authority, and all taxes specifically imposed in lieu of any such taxes (but excluding taxes referred to in Section 3.4 for which Tenant or other tenants in the Building are liable) including fees of counsel and experts, reasonably incurred by or reimbursable by Landlord in connection with any application for a reduction in the assessed valuation of the Building and/or the land thereunder or for a judicial review thereof, (collectively "Appeal Fees"), but solely to the extent that the Appeal Fees result directly in a reduction of taxes otherwise payable by Tenant. However, in no event shall the portion of Operating Expenses used to calculate any billing to Tenant attributable to real estate taxes and assessments for any expense year be less than the billing for real estate taxes and assessments during the Base Year.

Operating Expenses shall also include, but not be limited to the premiums for the following insurance coverage: all-risk, structural, fire, boiler and machinery, liability, earthquake and for replacement of tenant improvements to a maximum of $35.00 per usable square foot, and for such other coverage(s), and at such policy limit(s) as Landlord deems reasonably prudent and/or are rcquired by any lender or ground lessor, which coverage and limits Landlord may, in Landlord's reasonable discretion, change from time to time, subject to the following paragraph

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If, in any calendar year following the Base Year, as defined hereinbelow (a "Subsequent Year"), a new expense item (e.g. earthquake insurance, concierge services; entry card systems), is included in Operating Expenses which was not included in the Base Year Operating Expenses, then the cost of such new item shall be added to the Base Year Operating Expenses for purposes of determining the Additional Rent payable under this Article 4 for such Subsequent Year During each Subsequent Year the same amount shall continue to be included in the computation of Operating Expenses for the Base Year resulting in each, such Subsequent Year Operating Expenses only including the increase in the cost of such new item over the Base Year, as so adjusted.

Conversely, as reasonably determined by Landlord, when an expense item that was originally included in the Base Year Operating Expenses is in any Subsequent Year no longer included in Operating Expenses, then the cost of such item shall be deleted from the Base Year Operatino Expenses for purposes of determining the Additional Rent payable under this Article 4 for such Subsequent Year. The same amount shall continue to be deleted from the Base Year Operating Expenses for each Subsequent Year thereafter that the item is not included. However, if such expense item is again included in the Operating Expenses for any Subsequent Year, then the amount Of said expense item originally included in the Base Year Operating Expenses shall again be added back to the Base Year Operating Expenses.

i)   Any ground lease rental;

ii)   The costs of repairs to the Building and the Real Property, to the extent the costs of such repairs is reimbursed by the insurance carried by Landlord or subject to award under any eminent domain porceeing

iii)   Costs, including permit, license and inspection costs, incurred with respect to the installation of Tenant's or other occupant's improvements or incurred in renovating or otherwise imporving, decorating, painting or redecorating vacant space for Tenant or other occupants of the Building.

iv)         Depreciation, amortization and interest payments, except as specifically permitted herein or except on materials, tools supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party where such depreciation, amortization and interest payments would otherwise have been included in the charge for such third party's services. In such a circumstance, the inclusion of all depreciation, amortization and interest payments shall be determined pursuant to generally accepted accounting principles, consistently applied, amortized over the reasonably anticipated useful life of the capital item for which such amortization, depreciation or interest allocation was calculated;

 v)       Marketing costs, including leasing commissions, attorneys' fees incurred in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Building;

 vi)     Expenses for services not offered to Tenant or for which Tenant is charged directly, whether or not such services or other benefits are provided to another tenant or occupant of the Building;

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vii)   Costs incurred due to Landlord's or any tenant of the Building's violation, other than Tenant, of the terms and conditions of any lease or rental agreement in the Building;

viii)   That portion of any billing by Landlord, its subsidiaries or affiliates for goods and/or services in the Building, to the extent that such billing exceeds the costs of such goods and/or services if rendered by an unaffiliated third parties on a competitive basis;

  ix)   Costs incurred by Landlord for structural earthquake repairs or any seismic retrofit requirements necessitated by the January 17, 1994 earthquake that occurred in the vicinity of the Building;

x)   Interest, principal, points and fees on debts or amortization on any mortgage or mortgages or any other debt instrument encumbering the Building or the land thereunder;

 xi)      Costs associated with operating the entity which constitutes Landlord, as the same are distinguished from the costs of operation of the Building, including partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord's interest in the Building, costs (including attorneys' fees and costs of, settlement judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitration pertaining to Landlord's ownership of the Building;

xii)   Advertising and promotional expenditures, and costs of signs in or on the Building identifying the owner of the Building or other tenants of the Building;

xiii)     Electric, gas or other power costs for with Landlord has been directly reimbursed by another tenant or occupant of the Building, or for which any tenant directly contracts with the local public service company;

xiv)     Tax penalties and interest incurred as a result of Landlord's negligent or willful failure to make payments and/or to file any income tax or informational return(s) when due, unless such non-payment is due to Tenant's nonpayment of rent;

xv)     Costs incurred by Landlord to comply with notices of violation of any applicable laws or ordinances including the Americans With Disabilities Act, as amended, when such notices are for conditions existing prior to the Delivery Date;

xvi)   Any charitable or political contributions;

xvii)   The purchase or rental price of any sculpture, paintings or other object of art, whether or not installed in, on or upon the Building;

 xviii)     Any compensation paid or expenses reimbursed to clerks, attendants or other persons working in any commercial concession(s) operated by Landlord, and any services provided, taxes attributable to and costs incurred in connection with the operation of any retail, parking or restaurant operations in the Building;

 xix)       Any accelerated payment(s) made at Landlord's election on obligations undertaken by Landlord which would not otherwise become due, to the extent that such accelerated payment(s) exceed the amount otherwise payable had Landlord not elected to accelerate payment thereof. Notwithstanding such exclusion, the balance of such accelerated payment shall be included by Landlord in operating expense calculations for succeeding years, as if the payment had been made when originally due prior to such acceleration.

 xx)     Costs, including attorneys' fees`and settlement judgments and/or payments in lieu thereof, arising from actual or potential claims, disputes, litigation or arbitration pertaining to Landlord and/or the Building;

 xxi)   Insurance deductibles in excess of reasonable and customary deductible amounts;

 xxii)     Costs of repairs that would have been covered by casualty insurance but for Landlord's failure to maintain casualty insurance to cover the replacement value of the Building as required by this Lease;

 xxiii)   Capital expenditures not otherwise permitted hereunder;

 xxiv)     The assessment or billing of operating expenses that results in Landlord being reimbursed more than one hundred percent (100%) of the total expenses for the calendar year in question;

 xxv)     Any cost or expenditure for which Landlord may be reimbursed, whether by insurance proceeds, warranties, service contracts or otherwise, except through rent adjustment or other tax or operating expense pass-through provisions;

 xxvi)   Salaries, fringe benefits and other compensation of employees above the grade of building manager;

 xxvii)     Expenses for painting, redecorating or other work which Landlord, at its expense, performs for Tenant or for any other tenant in leased areas of the Building other than painting, redecorating or other work for common areas of the Building;

 xxviii)     The cost of alterations, additions, changes or decorations (including leasehold improvements, construction allowances and work letters) made for or paid to any tenant of the Building or made in order to prepare space in the Building for occupancy by a tenant;

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xxix)   The cost of repairs in or to a tenant's premises incurred by reason of breach by a tenant of its lease for the space in the Building;

xxx)   Payments for rented equipment the cost of which would constitute a capital expenditure if the equipment was purchased;

xxxi)     Professional fees, not allocated to the operation of the Building and professional fees allocable to disputes with or preparation of leases for other tenants and prospective tenants of the Building;

xxxii)   The costs of services or other benefits provided to other tenants of the Building without charge, but which are only provided to Tenant by payment of a seperate charge;

xxxiii)   Cost, expenses, fines and penalties incurred by the Lanlord due to a violation by Landlord of any lease or of any laws or legal requirements;

xxxiv)   Any bad debt loss, rent loss or reserves for bad debts or rent loss;

xxxv)     The cost and expense incurred by Landlord in furnishing any service to any retail or non-office portions of the Building which is not furnished to the office space portions of the Building;

xxxvi)   The cost of any judgment resulting from any tort liability of Landlord and any attorneys' fees incurred in connection with the same;

xxxvii)   The cost of correcting defects in building construction for the Building including noncompliance with governmental codes and laws, and repairs or replacements caused by Landlord's negligence or the negligence, of its agents, employees or contractors;

xxxviii)   Any expenses, costs and disbursements relating to or arising in any way, directly or indirectly from handling, removal, treatment, disposal or replacement of asbestos, asbestos containing materials or other Hazardous Materials in the Building;

xxxix)   Costs reimbursed to Landlord by governmental authorities; and

xxxx)   All other items which under generally accepted accounting principles, as consistently applied in the real estate industry for first-class office buildings are properly classified as capital expenditures except, however, as specifically permitted by this Lease.

 d)   "Tenant's Share means 5.50%, which is calculated by dividing the Usable Area of the Premises (11,357 square feet) by the Usable Area of the Building (206,488 square feet) multiplied by 100.

Section 4.2. Calculationof Tenant's Share of Increases in Operating Expenses. If commencing withrthe calendar year 2008, the Operating Expenses for any calendar year during the Term, or portion thereof, (including the last calendar year of the Term), have increased over the Operating Expenses for the Calendar year 2007 (the "Base Year"), then within thirty (30) days after Tenant's receipt of Landlord's computation of such increase (an "Escalation Statement"), Tenant shall pay to Landlord, as Additional Rent, an amount equal to the product obtained by multiplying such increase by Tenant's Share. if Landlord fails to provide an Escalation Statement within three (3) years after the calendar year to which suchⁱEscalation Statement is applicable, Landlord shalt be deemed to have waived its right to collect any Additional Rent for such calendar year for which Tenant had not theretofore been billed.

Landlord may at or after the start of any calendar year subsequent to the Base Year notify Tenant or the amount which Landlord estimates will be Tenant's monthly share of any such increase in Operating Expenses for such calendar year over the Base Year and the amount thereof shall be added to the Fixed Monthly Rent payments required to be made by Tenant in such year If Tenant's Share of any such increase in rent payable hereunder as shown on the Escalation Statement is greater or less than the total amounts actually billed to and paid by Tenant during the year covered by such statement, then within thirty (30) days thereafter, Tenant shall pay in cash any sums owed Landlord or if applicable, Tenant shall either receive a credit against any Fixed Monthly Rent and/or Additional Rent next accruing for any sum I owed Tenant, or if Landlord's Escalation Statement is rendered after the expiration or earlier termination of this Lease and indicates that Tenant's estimated payments have exceeded the total amount to which Tenant was obligated, then provided that Landlord is not owed any other sum by Tenant, Landlord shall issue a cash refund to Tenant within thirty (30) days after Landlord's completion of such Escalation Statement.

Section 4.2.1 Audit Right. Within one (1) year after receipt, of a statement by Tenant, if Tenant disputes the amount of Additional Rent set forth in the statement, an accountant (which accountant is not working on a contingency fee basis and which shall be hereinafter referred to as "Tenant's Accountant"), designated and paid for by Tenant, may after reasonable notice to Landlord and at reasonable times, inspect and copy Landlord's records with respect to such statement at Landlord's offices, provided that Tenant is not then in default under this Lease beyond any applicable notice and cure period and Tenant has paid all amounts required to be paid under the applicable statement. In connection with such inspection, Tenant and Tenant's agents must agree in advance to follow Landlord's reasonable rules and procedures regarding inspections of Landlord's records, and shall execute a mutually acceptable confidentiality agreement regarding such inspection. Tenant's failure to dispute the amount of Additional Rent set forth in any Statement within one (1) year of Tenant's receipt of such statement shall be deemed to be Tenant's approval of such statement and Tenant, thereafter, waives the right or ability to dispute the amounts set forth in such statement. If after such inspection, Tenant still disputes such Additional Rent, a determination as to the proper amount shall be made, at Tenant's expense, by an independent certified public accountant selected by Landlord (which accountant has not previously been retained by Landlord and which shall he hereinafter referred to as "Landlord's Accountant") and subject to Tenant's reasonable approval; provided that if such determination by Landlord's Accountant proves that Operating Expenses were overstated by more than five percent (5%), then the overstated amount shall be repaid to Tenant and the cost of Landlord's Accountant and the costs of Tenant's Accountant shall be paid for by Landlord. Tenant hereby acknowledges that Tenant's sole right to inspect and copy Landlord's books and records and io contest the amount of Operating Expenses payable by Tenant shall be as set forth in this Section 4.2 and Tenant hereby waives any and all other rights pursuant to applicable law to inspect such books and records and/or to contest the amount of Operating Expenses payable by Tenant. In the event Tenant does not agree as to the determination made by Landlord's accountant, Tenant may notify Landlord that Tenant desires to have such disagreement determined by an arbiter, and within fifteen (15) days thereafter Landlord and Tenant shall designate a certified public accountant (the ?Arbiter") whose determination made in accordance with this Section 4.2 shall be binding upon the arties. If Tenant fails to notify Landlord of Tenant's desire to have such disagreement determined by an Arbiter within 60 days after the determination of Landlord's Accountant, then the determination of Landlord's Accountant shall be conclusive and binding on Tenant. IT the Arbiter Shall substantially confirm the determination of Landlord's Accountant, then Tenant shall pay the cost of the Arbiter. If the Arbiter shall substantially confirm the determination of Tenant, then Landlord shall pay the cost of the Arbiter. In all other events, the cost of the Arbiter shall be borne equally by Landlord and Tenant, The Arbiter shall be a member of a national independent certified public accounting firm, which has not been previously employed by Landlord or Tenant and with not less than ten (10) years experience in commercial leasing. If Landlord and Tenant shall be unable to agree upon the designation of the Arbiter within fifteen (15) days after receipt of written notice from Tenant requesting agreement as to the designation of the Arbiter, which notice shall contain the names and addresses of two or more certified public accountants meeting the requirements set forth above who are acceptable to Tenant, then either party shall have the right to request, the American Arbitration Association, Jams/endispute (or any organization which is the successor thereto) (the ^qA.A.A")to designate as the Arbiter a member of a national certified public accounting firm whose written determination shall be conclusive and binding upon the parties, and the cost of such certified public accountant shall be borne as provided above in the case of the Arbiter designated by Landlord and Tenant. The Arbiter's written determination shall be made within thirty (30) days of the Ai, -biter's appointment and shall only apply to the additional rent in dispute. In rendering such written determination such Arbiter shall not add to, subtract from or otherwise modify the provisions of this Lease. If Tenant shall prevail in such contest, Landlord shall make an appropriate refund to Tenant Within thirty (30) days of the written determination of the Arbiter.

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Section 4.3. Tenant's Payment of Direct Charges, as AdditionalRent. Tenant shall promptly and duly; pay all costs and expenses incurred for or in connection with any Tenant Change (as such term is defined in Section 12.12 of this Lease) or Tenant Service (as such term is defined in Section 8.10 of this Lease), and discharge any mechanic's or other lien created against the Premises, Building or the Real Property arising as a result of or in connection with any Tenant Change or Tenant Service as Additional Rent by paying the same, bonding or manner otherwise provided by law.

Any other cost, expense, charge, amount or sum (other than Fixed Monthly Rent) payable by Tenant as provided in this Lease shall also be considered Additional Rent.

Certain individual items of cost or expense may, in the reasonable determination of Landlord, be separately charged and billed to Tenant by Landlord, either alone or in conjunction with another party or parties, if they are deemed in good faith by Landlord to apply solely to Tenant and/or such other party or parties and are not otherwise normally recaptured by Landlord as part of normal operating expenses. Insofar as is reasonable, Landlord shall attempt to give Tenant prior notice and the opportunity to cure any circumstance that would give rise to such separate and direct, billing.

Said separate billing shall be paid as Additional Rent, regardless of Tenant's Share. Such allocations by Landlord shall be binding on Tenant unless patently unreasonable, and shall be payable within ten (10) days after receipt of Landlord's billing therefor.

ARTICLE`5

ETHICS

Section 5.1. Ethics. Landlord and Tenant agree to conduct their business or practice in compliance with any appropriate and applicable codes of professional or business practice.

ARTICLE 6

USE OF PREMISES

Section 6.1. Use. The Premises shall only be used for general office use consistent with the operation of a first-class office building on the;Olympic Corridor in the West Los Angeles area (the "Specified Use") and for no other purposes, without Landlord's prior written consent, which consent shall be in Landlord's sole discretion. Any proposed revision of the Specified Use by Tenant shall be for a use consistent with those customarily found in first-class office buildings. Reasonable grounds for Landlord withholding its consent shall include. but not be limited to:

a)   the proposed use will place a disproportionate burden on the Building systems;

b)   the proposed user is for governmental or medical purposes or for a company whose primary business is that of conducting boiler-room type transactions or sales;

   c) the proposed use would generate excessive foot traffic to the Premises and/or Building.

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So long as Tenant is in control of the Premises, Tenant covenants and agrees that it shall not use, suffer or permit any person(s) to use all or any portion of the Premises for any purpose in violation of the laws of the United States of America, the State of California, or the ordinances, regulations or requirements of the City or County of Los Angeles, or other lawful authorities having jurisdiction over the Building,

Tenant shall not do or permit anything to be done in or about the Premises which will materially obstriict or unreasonably interfere with the rights of other tenants or occupants of the Building, or injure them; Tenant shall not use or allow the Premises to be used for any pornographic or violent purposes, nor shall Tenant cause, commit, maintain or permit the continuance of any nuisance or waste in, on or aboui the Premises. Tenant shall not use the Premises in any manner that in Landlord's reasonable judgrhent would adversely affect or interfere with any services Landlord is required to furnish to Tenant or to any other tenant or occupant of the Building, or that would interfere with or obstruct the proper and economical rendition of any such service.

Section 6.2. Exclusive Use Landlord represents that Tenant's Specified Use of the Premises does not conflict with exclusive use provisions granted by Landlord in other leases for the Building. Landlord further agrees that it shall, in the future, not grant an exclusive use privilege to any other tenant in the Building that will prevent Tenant from continuing to use the Premises for its Specified Use.

Tenant acknowledges and agrees that it shall not engage in any of the uses specified hereinbelow, for NvItich Landlord has already granted exclusive rights:

As a primary business, an Italian-style restaurant.

Provided that Tenant has received written notice of the same from Landlord, and further provided that Landlord does not grant a future exclusive use right that'prohibits Tenant from engaging in the Specified Use then Tenant agrees that it shall not violate any exclusive use provision(s) granted by Landlord to other tenants in the Building.

Section 6.3.Rules and Regulations. Tenant shall observe and comply with the rules and regulations set forth in Exhibit C and such other and further reasonable and non-discriminatory rules and regulations as Landlord may make or adopt and communicate to Tenant at any time or from time to time, when said rules, in the reasonable judgment of Landlord, may be necessary or desirable to ensure the first-class operation, maintenance, reputation or appearance of the Building. However, if any conflict arises between the provisions of this Lease and any such rule or regulation, the, provisions of this Lease shall 'control.

Provided Landlord makes commercially reasonable efforts to seek compliance by all occupants of the building with the rules and regulations adopted by Landlord, Landlord shall not be responsible to Tenant for the failure of any other tenants or occupants of the Building to comply with said rules and regulations.

ARTICLE  7

CONDITION UPON VACATING & REMOVAL OF PROPERTY

Section 7.1. Condition upon Vacating. At the expiration or earlier termination of this Lease, Tenant shall;

a)  terminate its occupancy of quit and surrender to Landlord, all or such portion of the Premises upon Which this Lease has so terminated, broom-clean and in substantially similar condition as received except for:

i)   ordinary wear and tear, or

ii)   loss or damage by fire or other casualty which shall not have been caused by the gross negligence or willful misconduct of Tenant or its agents, clients, contractors, employees, invitees, licensees, officers, partners or shareholders; and

b) surrender the Premises free of any and all debris and trash and any of Tenant's personal property, furniture, fixtures and equipment that do not otherwise become a part of the Real Property, pursuant td the provisions contained in Section 7.2 hereinbelow; and,

c) at Tenant's sole expense, forthwith and with all due diligence remove any Specialty Alteration (as liereinafter defined) made by Tenant, provided Landlord has previously notified Tenant of its obligation to remove such Specialty Alteration at the time Landlord approved Tenant's request for such Specialty Alteration. If Tenant fails to complete such removal and/or to repair any damage caused by the removal of any Specialty Alterations, Landlord may do so and may charge the reasonable cost thereof to Tenant. For purposes of this Lease, "Specialty Alterations" shall mean any Tenant Change, work, alteration or installation that are not typical or standard office alterations. Tenant shall have no obligation to remove any Tenant Change or other work, alteration or installation that is not a Specialty Alteration. Tenant shall not be obligated to remove any of the IMprovements (as such term is defined in Exhibit B).

Section 7.2.Tenant's Property. All fixtures, equipment, improvements and installations attached or built^linto the Premises at any time during the Term shall, at the expiration or earlier termination of this Lease, be deemed the properly of Landlord; become a permanent part of the Premises and remain therein. However, if said equipment, improvements and/or installations can be removed without causing any structural damage to the Premises, then, provided after such removal Tenant restores the Premises to the condition existing prior to installation of Tenant's trade fixtures or equipment Tenant shall be permitted, at Tenant's sole expense, to remove said trade fixtures and equipment.

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ARTICLE 8

UTILITIES AND SERVICES

Section 8.1. Normal Building Hours / Holidays. The "Normal Business Hours" of the Building, during which Landlord shall furnish the services specified in this Article 8 are defined as 8:00 A.M. to 6:001 P.M., Monday through Friday, and 9:00 A.M. to 1:00 P.M. on Saturday, any one or more Holiday(s) excepted.

The ‘`Holidays" which shall be observed by Landlord in the Building are defined as any federally-recognized holiday and any other holiday specified herein, which are New Years Day, Presidents' Day, Mentorial Day, the 4th of July, Labor Day, Thanksgiving Day, the day after Thanksgiving, and Christmas Day (each individually a '`Holiday"). Tenant acknowledges that the Building shall be closed on etich and every such Holiday, and Tenant shall not be guaranteed access to Landlord or Landlord's manging agent(s) on each such Holiday.

Section 8.2. Access to the Building and General Services. Subject to Force Majeure and any power outage(s) which may occur in the Building when the same are out of Landlord's reasonable control, Landlord shall furnish the following services to the Premises twenty-four (24) hours per day, seven days per Week:

a)	during Normal Business Hours, bulb replacement for building standard lights;
b)	access to and use of the parking facilities for persons holding valid parking permits;
c)	access to and use of the elevators and Premises;
d)	use of electrical lighting on an as-needed basis within the Premises; and
e)	use of a reasonable level of water for kitchen and toilet facilities in the Premises and common area bathrooms.

Section 8.3. Janitorial Services. Landlord shall furnish the Premises with reasonable and customary janiterial services five (5) days per business week, except when the Building is closed on any Holiday. Landlord shall retain the sole discretion to choose and/or revise the janitorial company providing said services to the Premises and/or Building.

Section 8.4. Security Services. Tenant acknowledges that Landlord currently provides uniformed guard service to the Building twenty-four (24) hours per day, seven (7) days per week, solely for the purposes of providing surveillance of, and information and directional assistance to persons entering the Building.

Tenant acknowledges that such guard service shall not provide any measure of security or safety to the Building or the Premises, and that Tenant shall take such actions as it may deem necessary and reasonable to ensure the safety and security of Tenant's property or person or the property or persons of Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders. Tenant agrees and acknowledges that except in the case of the gross negligence or willful misconduct of Landlord or its directors, employees, officers, partners or shareholders, Landlord shall not be liable to Tenant in any manner whatsoever arising out of the failure of Landlord's guard service to secure any person or property from harm.

Tenant agrees and acknowledges that Landlord, in Landlord's sole discretion, shall have the option, but not the obligation to add, decrease, revise the hours of and/or change the level of services being provided by any guard company serving the Building, so long as such services are in keeping with the standards of Comparable Buildings. Tenant further agrees that Tenant shall not engage or hire any outside guard or security company without Landlord's prior written consent, which shall be in Landlord's sole discretion.

Section 8.5. Utilities. During Normal Business Hours Landlord shall furnish a reasonable level of water, heat, ventilation and air conditioning ("HVAC") to the Premises consistent with that provided by landlords of comparable first-class office buildings in the West Los Angeles area and a sufficient amount of electric current to provide customary business lighting and to operate ordinary office business machines, such as a single personal computer and ancillary printer per one hundred tmd twenty (120) rentable square feet contained in the Premises, facsimile machines, small copiers customarily used for general office purposes, and such other equipment and office machines as do not result in above standard use of the existing electrical system. So long as the same remain reasonably cost competitive, Landlord shall retain the sole discretion to choose the utility vendor(s) to supply such services to the Premises and the Building.

Except with the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned and/or delayed, Tenant shall not install or use any equipment, apparatus or device in the Premises that requires the installation of a 220 voltage circuit; consumes more than five (5) kilowatts per hour per, item; or the aggregate use ofwhich will in any way increase the connected load to more than 5 Watt's per square foot, or cause the amount of electricity to be furnished or supplied for use in the PreMises to more than 1.2 kWh per usable square foot, per month.

Except with the prior written consent of Landlord, Tenant shall not connect any electrical equipment to the electrical system, of the Building, except through electrical outlets already existing in the Premises, nor shall Tenant pierce, revise, delete or add to the electrical, plumbing, mechanical or HVAC systems in the Premises.

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Section 8.6. After Hours HVAC and/or Excess Utility Usage. If Tenant requires HVAC service during other than Normal Business Hours ("Excess HVAC"), Tenant shall make its request in writing at least three (3) hours before the close of the normal business day. Otherwise, Landlord shall have no obligation to provide Excess HVAC. Tenant's request shall be deemed conclusive evidence of its willingness to pay Landlord's actual costs specified herein, As of the date of the Lease, the prevailing afterThours HVAC charge in the Building is $65.00 per hour.

If Tenant requires electric current in excess of the amounts specified hereinabove, water or gas in excess of that customarily furnished to the Premises as office space ("Excess Utility Use"), Tenant shall first (procure Landlord's prior written consent to such Excess Utility Use, which Landlord may reasonably refuse.

In lieu of Landlord's refusal, Landlord may cause a meter or sub-meter to be installed to measure the amount of water, gas and/or electric current consumed by Tenant in the Premises. The cost of any such meter(s), and the installation, maintenance, and repair thereof; shall be paid by Tenant as Additional Rent

After completing installation of said meter(s), and/or if Tenant requests Excess HVAC, then Tenant shallipay, as Additional Rent, within thirty (30) calendar days after Tenant's receipt of Landlord's billing, for the actual amounts of all water, steam, compressed air, electric current and/or Excess HVAC consumed beyond the normal levels Landlord is required herein to provide. Said billing shall he calcUlated on the usage indicated by such meter(s), sub-meter(s), or Tenant's written request_, therefor, and shall be issued by Landlord at the rates charged for such services by the local public utility lumiShing the same, plus any additional expense reasonably incurred by Landlord in providing said Excess Utility Use and/or in keeping account of the water, steam, compressed air and electric current so consumed.

Section 8.7. Changes affecting HVAC. Tenant shall also pay as Additional Rent for any additional costs) Landlord incurs to repair any failure of the HVAC equipment and systems to perform their function when said failure arises out of or in connection with any change in, or alterations to, the arrangement of partitioning in the Premises after the Delivery Date, or from occupancy by, on average, more than one person for every two hundred and fifty (250) usable square feet of the Premises, or from Tenant's failure to keep all HVAC vents within the Premises free of obstruction.

Section 8.8. Damaged or Defective Systems. Tenant shall give written notice to Landlord within twenty-four (24) business hours of any alleged damage to, or defective condition in any part or appurtenance of the Building's sanitary, electrical, HVAC or other systems serving, located in, or passing throtigh, the Premises. Provided that the repair or remedy of said damage or defective condition is within the reasonable control of Landlord, it shall be remedied by Landlord with reasonable diligence. Otherwise, Landlord shall make such commercially reasonable efforts as may be available to Landlord to effect such remedy or repair, but except in the case of Landlord's gross negligence and/or willful misconduct or the gross negligence and/or willful misconduct of Landlord's agents, contractors, direetors, employees, officers, partners, and/or shareholders, Landlord shall not be liable to Tenant for any failure thereof.

Tenant shall not be entitled to claim any damages arising from any such damage or defective condition nor shall Tenant be entitled to claim any eviction by reason of any such damage or defective condition unless:

a)   the same was caused by Landlord's gross negligence or willful misconduct while operating or maintaining the Premises or the Building;

b)   the damage or defective condition has substantially prevented Tenant from conducting its normal business operations; and

c)   Landlord shall have failed to commence the remedy thereof and proceeded with reasonable diligence to complete the same after Landlord's receipt of notice thereof from Tenant.furthermore, if such damage or defective condition was caused by, or is attributed to, a Tenant Change or the gross negligence or willful misconduct of Tenant or its employees, licensees or invitees:

d)   the cost of the remedy thereof shall be paid by Tenant as Additional Rent pursuant to the provisions of Section 4.3;

e)   in no event shall Tenant be entitled to any abatement of rent as specified below: and

f)   Tenant shall be estopped from making any claim for damages arising out of Landlord's repair thereof

Section 8.9. Limitationon Landlord's Liability for Failure to Provide Utilities and/or Services. Except in the case of Landlord's gross negligence or willful misconduct or the;gross negligence or willful misconduct of Landlord's agents, contractors, directors, employees, licensees, officers, partners or shareholders, Tenant hereby releases Landlord from any liability for damages, by abatement of rent or otherwise, for any failure or delay in furnishing any of the services or utilities specified in this Article 8 (incliKling, but not limited to telephone and telecommunication services), or for any diminution in the quality or quantity thereof.

Tenant's release of Landlord's liability shall be applicable when such failure, delay or diminution is occasioned, in whole or in part, by repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by Landlord's inability to secure electricity, gas, water or other fuel at the Building after( Landlord's reasonable effort to do so, by accident or casualty whatsoever, by act or default of Tenant or parties other than Landlord, or by any other cause beyond Landlord's reasonable control. Such failures, delays or diminution shall never be deemed to constitute a constructive eviction or disturbance of Tenant's use and possession of the Premises, or serve to relieve Tenant from paying Rent or performing any of its obligations under the Lease.

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Furthermore, Landlord shall not be liable under any circumstances for a loss of injury to, or interference with Tenant's business, including, without limitation, any loss of profits occurring or arising through or in connection with or incidental to Landlord's failure to furnish any of the services or utilities required by this Article 8.

Notwithstanding the above, Landlord shall use commercially reasonable efforts to remedy any delay, defect or insufficiency in providing the services_, and or utilities required hereunder.

Notwithstanding the foregoing, if Tenant is prevented from using and does not use the Premises or any portion thereof, as a result of (i) Landlord's failure to provide services or utilities as required by this Lease, or (ii) Landlord's exercise of its rights under Section 12,11 below (an "Abatement Event"), then five 15) consecutive business days after Landlord's receipt of any such Notice (the "Eligibility Period"), Tena t shall give Landlord Notice of such Abatement Event and if such Abatement Event continues for and such failure is in no way attributable to or caused by the negligence or willful misconduct of

Tenant, then the Fixed Monthly Rent and Additional Rent shall be abated or reduced, as the case may be„after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using, and does not use the Premises, or a portion thereof, in the proportion that the rentable area of the portion of the Premises that Tenant is prevented from using, and does not use ("Unusable Area"), bears to the total rentable area of tile Premises; provided, however, in the event that Tenant is prevented from using, and does not use the Unusable Area for a period of time in excess of the Eligibility Period and the remaining portion of the Premises is not sufficient to allow Tenant to effectively conduct its business therein and if Tenant does not conduct its business from such remaining portion, then for such time after expiration of the Eligibility Period during which Tenant is so prevented from effectively conducting its business therein, the Fixed Monthly Rent and Additional Rent for the entire Premises shall be abated for such 1 time as Tenant continues to be so prevented from usMg, and does not use the Premises, If however, Tenant reoccupies any portion of the Premises during such period, the Rent allocable to such reoccupied portion, based on the pmportion that the rentable area of such reoccupied portion of the Premises bears to the total rentable area of the Premises, shall be payable by Tenant from the date Tenant reoccupies such portion of the Premises. Such right to abate Fixed Monthly Rent and Additional Rent shall be Tenant's sole and exclusive remedy at law or in equity for an Abatement Event.

Section 8.10. Tenant Provided Services. Tenant shall make no contract or employ any labor in connection with the maintenance, cleaning or other servicing of the physical structures of the Premises or for installation of any computer, telephone or other cabling, equipment or materials provided in or to the Premises (collectively and individually a "Tenant Service") without the prior consent of Landlord, which consent shall not be unreasonably withheld. Tenant shall not permit the use of any labor, material or equipment in the performance of any Tenant Service if the use thereof, in Landlord's reasonable judgment, would violate the provisions of any agreement between Landlord and any union providing work, labor or services in or about the Premises, Building and/or create labor disharmony in the Building.

ARTICLE 9

TENANT'S INDEMNIFICATION AND LIMITATION ON LANDLORD'S LIABILITY

Section 9.1. Tenant'sIndemnification and Hold Harmless. For the purposes of this Section 9.1, "Indemnitee(s)" shall jointly and severally refer to Landlord and Landlord's agents, clients, contractors, directors, employees, officers, partners, and/or shareholders.

Tenant shall indemnify and hold Indemnitees harmless from and against all claims, suits, demands, damages, judgments, costs, interest and expenses (including reasonable attorneys fees and costs incurred in th;defense thereof) to which any Indemnitee may be subject or suffer to the extent arising out of the negligence or willful misconduct of Tenant or the negligence or willful misconduct of Tenant's a^gents, contractors, directors, employees, licensees, officers, partners or shareholders in connection with the use of work in construction to or actions in on upon or about the Premises, including any actions relating to the installation, placement, or removal of any Tenant Chang; improvements, fixtures and/or equipment in, on, upon or about the Premises.

Tenant's indemnification shall extend to any and all claims and occurrences, whether for injury to or death of any person or persons, or for damage to property (including any loss of use thereof), or otheliwise, occurring during the Term or prior to the Commencement Date (if Tenant has been given early access to the Premises for whatever pin-pose), and to all claims arising from any condition of the Premises due to or resulting from any default by Tenant in the keeping, observance or performance of any covenant or provision of this Lease, or from the negligence or willful misconduct of Tenant or the negligence or willful misconduct of Tenant's agents, contractors, directors, employees, licensees, officers, partners or shareholders.

Section 9.2. Nullityof Tenant's Indemnification in Event of Negligence. Notwithstanding anything to the contrary contained in this Lease, Tenant's indemnification shall not extend to the negligence or willful misconduct of Landlord or the negligence or willful misconduct of Landlord's agents, contractors, directors, employees, officers, partners or shareholders, nor to such events and occurrences for which Landlord otherwise carries insurance coverage.

Section 9.3. Tenant's Waiver of Liability. Provided and to the extent that any injury or damage suffered by Tenant or Tenant's agents, clients, contractors, directors, employees, invitees, officers, partners, and/or shareholders did not arise out of the negligence or willful misconduct of Landlord or the negligence or willful misconduct of Landlord's agents, contractors, employees, officers, partners or sharehOlders, Tenant shall make no claim against Landlord and Landlord shall not be liable or responsible in any way for and Tenant hereby waives all claims against Landlord with respect to or arisiniout of injury or damage to any person or property in or about the Premises by or from any cause whatsoever under the reasonable control or management of Tenant.

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Section 9.4. Limitation of Landlord's Liability. Tenant expressly agrees that notwithstanding anything in this Lease and/or any applicable law to the contrary, the liability of Landlord and Landlord's agents,: contractors, directors, employees, licensees, officers, partners or shareholders, including any succesSor in interest thereto (collectively and individually the "Landlord Parties"), and any recourse by Tenant! against Landlord or the Landlord Parties shall be limited solely and exclusively to an amount i which is equal to the interest of Landlord in the Building and any insurance or sale proceeds or profits received by Landlord.

Tenant specifically agrees that neither Landlord nor any of the Landlord Parties shall have any personal liability therefor. Further, Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by through or under Tenant.

Section 9.5. Transfer of Landlord's Liability. Tenant expressly agrees that to the extent that any transferee assumes the obligations of Landlord hereunder, and provided Landlord has either transferred the coinpletc Security Deposit held pursuant to this Lease or refimded the same to Tenant as of the dine of such transfer, then the covenants and agreements on the part of Landlord to be performed under this Lease which arise and/or accrue after the date of such transfer shall not be binding upon Landlord herein named from and after the date of transfer of its interest in the Building.

Section 9.6. Landlord's Indemnification. Notwithstanding any contrary provision of this Lease, Landlord shall indemnify, and hold Tenant and Tenant's agents, clients, directors, officers, partners, emploYees, shareholders and contractors harmless from and against, any and all claims, causes of action, liabilities, losses, costs and expenses, including reasonable attorney's fees and court costs, arising from or in connection with:

a)   Any activity occurring, or condition existing, at or in the Building and/or the Real Property (other than in the Premises) when such activity or condition is under the reasonable control of Landlord, except and to the extent the same is caused by the negligence or willful misconduct of Tenant or Tenant's employees, agents, licensee, invitees, or contractors, or by Tenant's breach or default in the performance of any obligation under this Lease;

b)   Any activity occurring, or condition existing in the Premises when, and to the extent caused by the negligence or willful misconduct of Landlord or Landlord's employees, agents or contractors; or

c)   Any breach by Landlord of any of Landlord's obligations under this Lease.

ARTICLE 10

COMPLIANCE WITH LAWS

SectiOn 10.1.Tenant's Compliance with Laws. Tenant shall not use permit to be used or permit anything to be done in or about all or any portion of the Premises which will in any way violate any laws, statutes, ordinances, rules, orders or regulations duly issued by any governmental authority having jurisdiction over the Premises or the provisions of this Lease, or by the Board of Fire Undenvriters (or any successor thereto) (collectively "Codes" or "Applicable Laws").

Section 10.2. TenanttoComply at SoleExpense. Tenant shall, at its sole expense, promptly remedy any violation of such Codes, provided, however, that nothing contained in this Section 102 shall require Tenant to make any structural changes to the Premises, unless such changes are required due to either Tenant or Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders use of the Premises for purposes other than general office purposes consistent with ;.J. Class A office building.

Section 10.3.Conclusive Evidence of Violation.Intentionally Omitted.

Section 10.4. Landlord'sOperation of Building. Landlord shall operate, lease, manage and maintain the Bnilding, common areas, parking facilities and Real Property at all times during the Term in a first class Manner similar to other Class A office buildings located in along the Olympic Corridor in the West Los Angeles area of the Building.

ARTICLE 11

ASSIGNMENT AND SUBLETTING

Section 11.1.Permission Required for Assignment or Sublet. Unless Landlord's prior written consent has been given, which consent shall not be unreasonably withheld, conditioned and/or delayed (subject to the express provisions of this Article 11), this Lease shall not nor shall any interest herein, be assignable as to the interest of Tenant by operation of law; nor shall Tenant:

a)   assign Tenant's interest in this Lease; or

b)   sublet the Premises or any part thereof or permit the Premises or any part thereof to be utilized by anyone other than Tenant, whether as by a concessionaire, franchisee, licensee, permittee or otherwise (collectively, a "sublease")

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In addition, except for Transfers under clauses (a) or (b), Tenant shall not mortgage, pledge, encumber or otherwise transfer this Lease, the Term, and/or estate hereby granted or any interest herein withOut Landlord's prior written consent, which consent may be granted or withheld in Landlord's sole and absolute discretion.

Any assignment, mortgage, pledge, encumbrance, transfer,or sublease (collectively, any `Transfer") without Landlord's prior written consent shall be voidable, and, in Landlord's sole election, shall constitute a material default under this Lease.

Seetion 11.2. Voluntary Assignment due to Changes in Structure of Tenant. Any dissolution, merger, consolidation, or other reorganization of Tenant, or the single sale or other transfer of a controlling percentage of the capital stock of Tenant (other than the sale of such stock pursuant to a nubile offering that results in a majority of the same members of the Board and executive officers remaining in control of said corporation) and or the single sale of fifty percent (50%) or more of the value of the assets of Tenant, shall be deemed a voluntary assignment. The phrase "controlling percentage" means the ownership of, and the right to vote stock possessing fifty percent (50%) or more of the total combined voting power of all classes of Tenant's capital stock issued, outstanding, and entitled to vote for the election of directors. Notwithstanding anything to the contrary contained herein, the preceding paragraph shall not apply to corporations whose stock is traded through a recognized United States exchange or over the counter.

Any withdrawal or change (whether voluntary, involuntary, or by operation of law) in the partnership by one or more partners who own, in the aggregate fifty percent (50%) or more of the partnership, or the dissolution of the partnership, shall be deemed a voluntary assignment.

If Tenant is comprised of more than one individual, a purported assignment (whether voluntary, involuntary, or by operation of law), by any one of the persons executing this Lease shall be deemed a voluntary assignment.

Secion 11.2.1. Tenant Affiliated Companies/Restructuring of Business Organization. Any contrary provision of this Article 11, notwithstanding and provided Tenant is not in Default, the assignment or subletting by Tenant of all or any portion of this Lease or the Premises to (i) a parent or subsidary of (x) Tenant or (y) any person or entity which controls Tenant, or (ii) any person or entity which controls, is controlled by or under common control with Tenant or a person or entity which controls tenant, or (iii) any entity which purchases all or substantially all the assets or stock of Tenant, or (iv) any entity into which Tenant or a person or entity which controls Tenant is merged or consolidated (all such persons or entities described in (i), (ii), (iii) and (iv) being sometimes hereinafter referred to as "Tenant Affiliates") shall not be deemed a Transfer under this Article 11 and thus shall not be subject to Landlord's prior consent, and Landlord shall not be entitled to any Net Rental Profit resulting therefrom, provided that:

       a) any such Tenant Affiliate was not formed as a subterfuge to avoide the obligations of this Article11;

       b) Tenant gives Landlord written notice of any such assignment or sublease to a Tenant Affiliate;

       c) if said transfer of Tenant's interest is accomplised through an assignment, assignee shall assume, in a written document reasonably satisfactory to Landlord and delivered to Landlord upon or prior to the effective date of such assignment, all the obligations of Tenant under this Lease will respect to that portion of the Premises which is the subject of such Transfer; and

       e) Tenant and any Guarantor shall remain fully liable for all obligations to be performed by Tenant under this Lease.

If  Tenant fails to comply with the requirements of Section 11.2.1 (a) through (e), then any purported assignement or sublease which was made shall at the sole option of Landlord be made null, void and of no effect whatsoever.

Section 11.3. Request to. Assign or Sublease. If at any time during the Term, Tenant wishes to assign this Lease or any interest therein, or'to sublet all or any portion of the Premises, then at least twenty (20) days prior to the date when Tenant desires the assignment or sublease to be effective, Tenant shall give written notice to Landlord setting forth the name, address, and business of the proposed assignee or sublessee, business and personal credit applications completed on Landlord's standard application forms, and information (including references and such financial documentation as Landlord shall reasonably prescribe) 'concerning the character and financial condition of the proposed assignee or sublessee, the effective date of the assignment or sublease, and all the material terms and conditions of the proposed assignment, and with reference solely to a sublease: a detailed description of the space proposed to be sublet together with any rights of the proposed sublessee to use Tenant's improvements and/or ancillary services with the Premises.

Section 11.4.Landlord's Consent. Landlord shall have thirty (30) days after Tenant's notice of assi^gnment and/or sublease is received with the financial information reasonably requested by Landlord (the ('Section 11.3 Notice") to advise Tenant of Landlord's (i) consent to such proposed assigrunent or sublease, or (ii) withholding of consent for reasonable reasons to such proposed assignment or sublease, in which event Landlord's notice shall be accompanied by an explanation of the reason for such disapproval, or (iii) election to terminate this Lease as to all of the space proposed to be sublet or as to the entire premises in the event of an assignment , such termination to be effective as of the date of the commencement of the proposed assignment or subletting (the "Effective Date"). If Landlord shall exercise its termination right hereunder, Landlord shall have the right to enter into a lease or other occupancy agreement directly with the proposed assignee or subtenant, and Tenant shall have no right to any of the rents or other consideration payable by such proposed assignee or subtenant under such other leasel or occupancy agreement, even if such rents and other consideration exceed the rent payable under this Lease by Tenant. Landlord shall have the right to lease the Premises to any other tenant, or not lease the Premises, in its sole and absolute discretion. Landlord and Tenant specifically agree that Landlord's right to terminate this Lease under clause (iii) above is a material consideration for Landlord's agreement to enter into this Lease and such right may be exercised in Landlord's sole and absolute discretion and no test of reasonableness shall be applicable thereto.

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11.4.1. Recapture Right Notice. In as much as Landlord has the right per Section 11.4(i6) above to elect to terminate the Lease as to all of the space proposed to be sublet or as to the entire premises in the event of an assignment, prior to giving Landlord a Section 11.3 Notice, Tenant may, give Landlord an advance written notice prior to Tenant actually selecting a broker to go to the marketplace to procure any specific transferee (in which case such advance notice from Tenant shall specify, with particularity whether Tenant intends to assign this Lease or sublease all or a specified portion of the Premises, and if a sublease, such advance notice shall also specify the term of the intended sublease (the "Recapture Right Notice").

11.4.2 Retractionof Transfer Notice or Recapture Right Notice. Tenant shall have the right to retract Tenant's Section 11.3 Notice, or Recapture Right Notice upon written notification given to Landlord within five (5) business days of the date of Landlord's notice to Tenant electing to terminate the Lease. If Tenant does not timely provide Landlord with Tenant's notice retracting Tenant's Section 11.3 Notice or Recapture Right Notice and

(1) Landlord terminates the Lease in whole, in the case of an assignment or a sublease of all of the Premises for a portion of the then Lease Term, then neither Landlord nor Tenant shall be liable to the other under the Lease from and after the Effective Date, except for matters, which shall have arisen prior to such date; or

(2) Landlord terminates the Lease in part in the case of a sublease of a portion of the Premises, then neither Landlord nor Tenant shall be liable to the other under the Lease with respect to said proposed subleased portion from and after the Effective Date, except for matters, which shall have arisen prior to such date.

11.4.3 Consent Criteria. Tenant acknowledges that Landlord's consent shall be based upon the criteria listed in Sections 11.4 (a) through (e) below, and subject to Landlord's right to unilaterally disapprove of any proposed assignment and/or sublease, based on the existence of any condition contained within Section 11.5 hereinbelow. If Landlord provides its consent within the time period specified, Tenant shall be free to complete the assignment and/or sublet such space to the party contained in Tenant's notice, subject to the following conditions:

a)   The assignment and/or sublease shall be on the same terms as were set forth in the notice given to Landlord;

b)   The assignment and/or sublease shall be documented in a written format that is reasonably acceptable to Landlord, which form shall specifically include the assignee's and/or sublessee's acknowledgement and acceptance of the obligation contained in this Lease, in so far as applicable;

c)   The assignment and/or sublease shall not be valid, nor shall the assignee or sublessee take possession of the Premises, or subleased portion thereof, until an executed duplicate original of such sublease and/or assignment has been delivered to Landlord;

d)   Theassignee and/or sublessee shall have no further right to assign this Lease and/or sublease the Premises, except as permitted herein;

e)   In the event of any Transfer, Landlord shall receive as Additional Rent hereunder (and without affecting or reducing any other obligation of Tenant under this Lease) fifty percent (50%) of Tenant's "Net Rental Profit" derived from such Transfer. In the event of a Transfer which is a sublease, "Net Rental Profit" shall mean all rent, Additional Rent or other consideration actually received by Tenant during the term of such sublease from such subtenant and/or actually paid by such subtenant to Tenant in connection with the space covered by the sublease ("Transferred Space") less: (1) the gross revenue paid to Landlord by Tenant durinu the sublease term with respect to the Transferred Space; (2) any improvement allowance or other economic concession (planning allowance, moving expenses, etc.), paid by Tenant to sublessee; (3) reasonable brokers' commissions; (4) reasonable attorneys' fees; (5) costs of advertising the space for sublease; and (6) unamortized cost of initial improvements to the Premises by Tenant (items (1) through (6) referred to' collectively as the "Subleasing Costs"). In the event of a Transfer other than a. sublease, "Net Rental Profit" shall mean key money, bonus money or other consideration paid by the Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to the Transferee for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to the Transferee in connection with such Transfer. If part of the'Net Rental Profit shall be payable by the Transferee other than in  cash, then Landlord's share of such non-cash consideration shall be in such form as is reasonably satisfactory to Landlord exist and sends Tenant a notice requesting such information, Tenant shall deliver to Landlord If Landlord so requests because it reasonably believes a Net Rental Profit may a statement within thirty (30) days after the end of each calendar year and/or within thirty (30) days after the expiration or earlier termination of the Term of this Lease in which any such Transfer has occurred, specifying for each such Transfer: i)the date of its execution and delivery, the number of square feet of the Rentable Area demised thereby, and the Term thereof, and ii)a computation in reasonable detail showing the amounts (if any) paid and payable by Tenant to Landlord pursuant to this Section 11.4.3 with respect to suchTransfer for the period covered by such statement, and the amounts (if any) paid and payable by Tenant to Landlord pursuant to this Section 11.4 with respect to  any payments received from a Transferee during such period but, which relate to an earlier period.

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Section 11.5. Reasonable Grounds for Denial of Assignment and/or Sublease. Landlord and Tenant agree that, in addition to such other reasonable grounds as Landlord may assert for withholding its consent, it shall be reasonable under this Lease and any applicable law for Landlord to withhold its consent to any proposed Transfer, where any one or more of the following conditions exists:

a) The proposed sublessee or assignee (a "Transferee") is, in Landlord's reasonable judgment, of a character or reputation which is not consistent with those businesses customarily found in a Class A office building owned or operated by Landlord or "Landlord Affiliate" [meaning (A) an entity which is controlled by, controls or is under common control with Landlord, or (B) an entity which merges with or acquires or is acquired by Landlord or a parent, subsidiary or member of Landlord, or (C) a transferee of substantially all of the assets or stock of Landlord], in a comparable location, or by comparable landlords of comparable buildings along the Olympic Corridor in the West Los Angeles area of the Building (the "Comparable Buildings");

b) The Transferee is engaged in a business or intends to use all or any portion of the Premises for purposes which are not consistent with those generally found in the Building or other Comparable Buildings, provided, however, that in no event shall Landlord be permitted to decline Tenant's request for a Transfer solely on the basis of said Transferee's intent to change the Specified Use from that of Tenant, unless such proposed change shall violate any Exclusive Use provision already granted by Landlord;

c) The Transferee is either a governmental agency or instrumentality thereof;

d) The Transfer will result in more than a reasonable and safe number of occupants within the Premises;

e) The Transferee is not a party of reasonable  financial worth and;or financial stability in light of the responsibilities involved under the sublease, if a sublessee, or the Lease, if an assignee, on the date consent is requested, or has demonstrated a prior history of credit instability or unworthiness, but in making such determination, consideration shall be given to credit enhancements in the form of letters of credit, security deposits and guarantees;

f) The Transfer will cause Landlord to be in violation of another lease or agreement to which Landlord is a party, or would give another occupant of the Building a rid.t to cancel its lease;

g) The Transferee will retain any right originally granted to Tenant to exercise a right of renewal, right of expansion, right of first offer or other similar right held by Tenant, except as permitted under this Lease;

h) Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee is (I) a tenant in the Building at the time Tenant requests approval of the proposed Transfer and Landlord is able to provide comparable space in the Building to such tenant, or (2) is engaged in on-going negotiations with Landlord to lease space in the Building at the time Tenant requests approval of the proposed Transfer;

i) The Transferee intends to use all or a portion of the Premises for medical procedures or for a primary btisiness which is as a boiler-room type sales or marketing organization.

If Landlord withholds or conditions its consent and Tenant believes that Landlord did so contrary to the terms of this Lease, Tenant may, prosecute an action for declaratory relief and/or damages to determine if Landlord properly withheld or conditioned its consent.

Section 11.6. Tenant's Continued Obligation. Any consent by Landlord to an assignment of this Lease and/or sublease of the Premises shall not release Tenant from any of Tenant's obligations hereunder or be deemed to be a consent by Landlord to any subsequent hypothecation, assignment, subletting, occupation or use by another person, and Tenant shall remain liable to pay the Rent and/or perfOrm all other obligations to be performed by Tenant hereunder. Landlord's acceptance of Rent or Additional Rent from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease. Landlord's consent to one assignment or subletting shall not be, deemed consent to any subsequent assignment or subletting.

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If any assignee or sublessee of Tenant or any successor of Tenant defaults in the performance of any of the provisions of this Lease, whether or not Landlord has collected Rent directly from said assignee or sublessee, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee, sublessee or other successor-in-interest'.

Provided that in no event shall any further assignment, sublease, amendment or modification to this Lease serve to either increase Tenant's liability or expand Tenant's duties or obligations hereunder, or relieve Tenant of its liability under this Lease, then Landlord may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with any assignee, without notifying Tenant or any successor of Tenant, and without obtaining their consent thereto.

Section 11.7.Tenant To Pay Landlord's Costs. If Tenant assigns or sublets the Premises or requests the consent of Landlord to any assipment, subletting or other modification of this Lease, or if Tenant reqUests the consent of Landlord for any act that Tenant proposes to do, whether or not Landlord shall arant consent thereto, then Tenant shall, concurrent with Tenant's submission of any written request therefor, pay to Landlord as reasonable consideration for Landlord's considering and processing the applicable request, plus the amount reasonably estimated by`Landlord as its anticipated legal fees to be incurred by Landlord in connection therewith not to exceed $2,000.00.

Section 11.8. Successors and Assigns. Subject to the provisions contained herein, the covenants and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant, their respective successors and assigns and all persons claiming by, through or under them.

Section 11.9. Occupancy by Others. Notwithstanding anything to the contrary in this Article 11, Tenant may allow any person or company which is a bona fide client or customer of Tenant or which is providing service to Tenant or one of Tenant's clients (a "Permitted Occupant") to occupy certain portions of the Premises without such permitted occupancy being deemed a Transfer as long as: (i) such portions of the Premises occupied by any Permitted Occupants do not exceed more than ten percent (10°)p) in the aggregate of the Premises and for, a period not to exceed more than nine (9) consecutive months^. (ii) no new demising walls are constructed to accomplish such occupancy; and (iii) such relationship was not created as a subterfuge to avoid the obligations set forth in this Article 11.

ARTICLE 12

MAINTENANCE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR

ALTERATION

Section 12.1. Tenant's andLandlord's Obligation to Maintain. Tenant shall, at Tenant's sole expense, maintain the non-Building Structure and non-Building Systems (both as defined below) portion of the Premises in good order and repair, and shall also keep clean any portion of the Premises which Landlord is not obligated to clean. Such obligation shall include the clean-out; repair and/or replacement of Tenant's garbage disposal(s), Instant-Heat or other hot water producing equipment, if any, and the cleaning and removal of any dishes and/or food prior to the same becoming unsanitary. If Tentint becomes obligated to repair anything within the Premises, Tenant shall advise Landlord's managing agent of such need.

Further, Tenant shall pay the cost of any injury, damage or breakage in, upon or to the Premises created by Tenant's gross negligence or willful misconduct or the gross negligence or willful misconduct of Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders, but only to the extent such damage is not (i) covered by insurance carried by Landlord as part of Operating Expenses and (ii) is not covered by the waiver of subrogation.

Subject to Tenant's obligation for reimbursement to Landlord, as specified herein, Landlord shall operate the Building in a first-class manner, repair, maintain in good and tenable condition the Premises and the structural portions of the Building (including the exterior walls, foundation, roof, floor/ceiling slabs, columns, and beams), curtain walls, exterior glass and mullions, shafts (including elevator shafts), stairs, parking gara^pe, stairwells, escalators, elevator cabs, plazas, artwork, sculptures, washrooms, mechanical, electric;I and telephone closets and all Common Areas and public areas (collectively, the "Building Structure") and the mechanical, electrical, life safety, plumbing, sprinkler systems (connected to the core), HVAC systems (including primary and secondary loops connected to the core), and all meters, pipes, conduits, equipment, components and facilities that supply the Premises with utilities on a nonexclusive basis (except as the appropriate utility company has assumed these duties) (collectively. the "Building Systems").

Subject to Tenant's obligation for reimbursement to Landlord, as specified herein, Landlord shall make all repairs to the Premises and the exterior walls, foundation and roof of the Buildim^r, the structural portions of the floors of the Building, the systems and equipment of the Building and the Tenant Improvements installed in the Premises. However, if such repairs, maintenance or cleaning are requi'red due to Tenant's gross negligence or willful misconduct or the gross negligence or willful misconduct of Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders, then, Tenant shall, within ten (l 0) days after receipt of Landlord's billing therefor, reimburse Landlord, as Additional Rent, for any expense of such repairs, cleaning and/or maintenance in excess of any insurance proceeds available for reimbursement thereof, including for any deduatible anticipated in connection therewith.

Tenant hereby waives all right to make repairs at Landlord's expense under the provisions of SectiOn 1932(1), 1941 and 1942 of the Civil Code of California.

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Section 12.2.Repair Period Notice. Tenant shall give prompt notice to Landlord of Tenant's actual knoWledge of any damage or destruction to all or any part of the Premises or Building resulting from or arising . sing out of any fire, earthquake, or other identifiable event of a sudden, unexpected or unusual nature (individually or collectively a "Casualty"). The time periods specified in this Section 12.2 shall commence after from the earlier of the date Landlord receives said written notice from Tenant of the occurrence of a Casualty or Landlord independently, at its officer level, obtains actual knowledge that a Casalty has occurred (the "Casualty Date"). After the Casualty Date, Landlord shall, within the later of:

a) sixty (60) days after the date on which Landlord determines the full extent of the damage caused by the Casualty; or

b) thirty (30) days after Landlord has determined the extent of the insurance proceeds available to effectuate repairs, but

c) in no event more than ninety (90) days after the Casualty Date,

Provide written notice to Tenant indicating the anticipated time period for repairing the Casualty (the "Repair Period Notice"). The Repair Period Notice shall also state, if applicable, Landlord's eleciion either to repair the Premises, or to terminate this Lease, pursuant to the provisions of Section 12.31 and if Landlord elects to terminate this Lease, Landlord shall use commercially reasonable efforts to provide Tenant with a minimum period of ninety (90) days within which to fully vacate the Premises.

Section 12.3.Landlord's Option to Terminate or Repair. Notwithstanding anything to the contrary contained herein, Landlord shall have the option, but not the obligation to elect not to rebuild or restore the Premises and/or the Building if one or more of the following conditions is present:

a) repairs to the Premises cannot reasonably be completed within one hundred and eighty (180) days after the date of the Casualty (when such repairs are made without the payment of overtime or other premiums);

b) repairs required cannot be made pursuant to the then-existing laws or regulations affecting the Premises or Building, or the Building cannot be restored except in a substantially different structural or architectural form than existed before the Casualty;

c) the holder of any'mortgage on the Building or ground or underlying lessor with respect to the Real Property and/or the Building shall require that all or such large a portion of the insurance proceeds be used to retire the mortgage debt, so that the balance of insurance proceeds remaining available to Landlord for completion of repairs shall be insufficient to repair said damage or destruction;

d) the holder of any mortgage on the Building with respect to the Real Property and/or the Building shall terminate the mortgage and Landlord elects not to commence repairs within one (1) year following the occurrence of the Casualty;

c) provided Landlord has carried the coverage Landlord is required to obtain under Section 19.1 of this Lease, the damage is not fully covered, except for deductible amounts, by Landlord's insurance Policies and Landlord elects not to commence repairs within one (1) year following the occurrence of the Casualty;

f) more than thirty-three and one-third percent (33 1/3%) of the Building is damaged or destroyed, Whether or not the Premises is affected, provided that Landlord elects to terminate all other leases in the Buildina for similarly affected premises.

If Landlord elects not to complete repairs to the Building or Premises, pursuant to this Section 12.3, Landlord's election to terminate this Lease shall be stated in the Repair Period Notice, in which event this Lease shall cease and terminate as of the date contained in Landlord's Repair Period Notice.

If one hundred percent of the Building is damaged or destroyed, as certified by an independent building inspector, this Lease shall automatically terminate after Tenant's receipt of written notice of such Itermination from Landlord, and without action beyond the giving of such notice being required by either Landlord or Tenant.

Upon any termination of this Lease pursuant to this Section 12.3, Tenant shall pay its prorata share of FiXed Monthly Rent and Additional Rent, properly apportioned up to the date of such termination, reduced by any abatement of Rent to which Tenant is entitled under Section 12.5; after which both Landlord and Tenant shall thereafter be freed and discharged of all further obligations under the Lease, except for those obligations which by their provisions specifically survive the expiration or earlier termination of the Term.

Section 12.4.Tenant's Option to Terminate. If

a) the Repair Period Notice provided by Landlord indicates that the anticipated period for repairing the Casualty exceeds one hundred and eighty (180) days after the Casualty (the "Repair Period"), or

b) the Casualty to the Premises occurs during the last twelve (12) months of the Term;

then Tenant shall have the option, but not the obligation, to terminate this Lease by providing written notice ("Tenant's Termination Notice") to Landlord within thirty (30) days after receiving the Repair Period Notice in the case of 12.4 (a); or within thirty (30) days after the Casualty, in the case of Section 12.4 (b). Furthermore, if:

c) Landlord does not complete the repairs required hcreinabove within the Repair Period, and

d) farther provided Landlord has not diligently commenced and continued to prosecute to completion repair of the damage and/or destruction caused by the Casualty, and

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e) Landlordhas not completed the repairs thereafter on or before thirty (30) days after the expiration of the Repair Period,

then Tenant shall also have the option, but not the obligation, to terminate this Lease by giving Landlord written notice of its intention to so terminate, which notice shall be given not more than forty-five (45) dayS after expiration of the Repair Period.

Tenant's failure to provide Landlord with Tenant's Termination Notice within the time periods specified hereinabove shall be deemed conclusive evidence that Tenant has waived its option to terminate this Lease.

Section 12.5, Temporary Space and/or Rent Abatement During Repairs or Renovation. During the Repair Period or during any such period that Landlord completes Work (as defined hereinbelow) or Renovations (as defined in Section 12.11 hereinbelow), if available, and if requested by Tenant, Landlord shall make available to Tenant other space in the Building which, in Tenant's reasonable opinion, is suitable for the temporary conduct of Tenant's business. However, if such temporary space is smaller than the Premises Tenant shall pay Fixed Monthly Rent and Additional Rent for the temporary space based upon the calculated rate per Rentable square foot payable hereunder for the Premises, times the number of Rentable square feet available for Tenant's use in the temporary space.

If no temporary space is available that is reasonably satisfactory to Tenant, and any part of the PreMises is rendered untenantable by reason of such Casualty, Work or Renovation, then to the extent thatiall or said portion of the usable area of the Premises is so rendered untenantable by reason of such Casualty, Work or Renovation, Tenant shall be provided with a proportionate abatement of Fixed Monthly Rent and Additional Rent. Said proportional abatement shall be based on the Usable Square Footage of the Premises that cannot and is not actually used by Tenant, divided by the total Usable square feet contained in the Premises but shall be one hundred percent (100%) if the amount of the damage is partial and the remaining of the usable portion of the Premises would preclude Tenant's utilization of the Premises for the Specified Use and Tenant actually vacates the Premises. That proportional abatement, if any shall be provided during the period bcginning on the later of:

a) the Casualty Date; or

b) the actual date on which Tenant ceases to conduct Tenant's normal business operations in all or any portion of the Premises,

and shall end on the date that both (i) Landlord achieves substantial completion of restoration of the Premises and (ii) a certificate of occupancy is issued by the governmental agency having authority therefor. Tenant's acceptance of said abatement of Rent shall be deemed conclusive evidence of Tenant's waiver of any further claim or right of future claim for any loss or damage asserted by Tenant arising out of tlie Casualty Repair, Work or Renovation, as the case may be.

Section 12.6. Tenant'sWaiver of Consequential Damages. Subject to Section 12.4, the provisions contained in Section 12.5 are Tenant's sole remedy arising out of any Casualty. Landlord shall not be liable to Tenant or any other person or entity for any direct, indirect, or consequential damage (including but aot limited to lost profits of Tenant or loss of or interference with Tenant's business), unless caused by the gross negligence or willful misconduct of Landlord or the gross negligence or willful misconduct of Landlord's agents, contractors, directors, employees, licensees, officers, partners or shareholders, due to apsing out of or as a result of the Casualty (including but not limited to the termination of the Lease in connection with the Casualty).

Section 12.7.Repair Of The Premises When Casualty Not Caused By Tenant. If the cost of repair of any Casualty is covered under one or more of the insurance policies Landlord is required herein to provide, or elected to provide and which cost was included in Operating Expenses, Landlord shall restore the base core and shell of the Premises to its condition prior to the Casualty and repair and/or replace the Improvements previously installed in the Premises, to a maximum of $35.00 per usable square foot. Tenant shall have the option to either, at Tenants sole expense, complete the balance of repairs needed to restore the Improvements contained in the Premises to their condition prior to the Casnalty or to continue Tenant's normal business operations in the Premises in the condition to which Landlord has so restored the Improvements.

If Landlord has elected to complete repairs to the Premises, and has not elected to terminate this Lease, as specified in Section 12.3, then Landlord shall complete such repairs within the Repair Period, in a manner, and at times, which do not unreasonably interfere with Tenant's use of that portion of the Premises remaining unaffected by the Casualty. Provided Landlord has elected to make the repairs required hereunder, and Tenant did not terminate this Lease pursuant to Section 12.4, this Lease shall not be void or voidable during the Repair Period, nor shall Landlord be deemed to have constructively evicted Tenant thereby.

Section 12.8. INTENTIONALLY OMITTED.

Section 12.9.Repair of the Building. Except as specified hereinabove, unless Landlord or Tenant terminates this Lease as permitted hereinabove, Landlord shall repair the Building, parking structure or other! supporting structures and facilities within two hundred and seventy (270) days after Landlord becomes aware of such damage and/or destruction.

Section 12.10.Government-Required Repairs. If during the Term, additional inspections other than those standard annual or biannual inspections to which the Building may generally be subject; testing, repairs and/or reconstruction (collectively the "Work") are required by any governmental authority, or if upon the recommendation of its engineers, Landlord independently elects to undertake all or any portion of the Work prior to being required to do so by such governmental authority, Landlord shall give notice thereof to Tenant and shall use its best efforts not to unreasonably interfere with Tenant's use of the Prernises while completing the Work. Tenant shall cooperate fully with Landlord in connection with the Work and, upon the prior written request of Landlord, shall make the Premises available for completion of the Work. Tenant and Landlord agree that Landlord shall only be able to allocate all costs associated with completion of the Work to the Building's Operating Expenses, when permitted to under the provisions of Section 4.1 of this Lease.

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If Landlord elects to undertake the Work during the Term, then Tenant shall be entitled to an abatement of rent, pursuant to the provisions of Section 12.5 hcreinabove, and Landlord shall be completely responsible for repair of any damage to the Premises and all costs associated with the removal, moving and/or storage of Tenant's furniture, artwork, office equipment and files. Landlord will restore any and all areas damaged by completion of the Work to their previous quality and pay all clean­up costs. Landlord further agrees that it shall use commercially reasonable efforts to see that all construction, such as coring or power nailing or work that makes excessive noise, dust, or requires the displacement of tenant personnel or that could otherwise be disruptive to Tenant's normal business operations shall, in so far as is reasonably possible, be performed between the hours of 7:00 p.m. to 7:00 a.m.;Monday through Friday; after 1:00 p.m. on Saturdays and/or at any time on Sundays (this sentence is referred to as the "Premises Work Restrictions").

Except in the case of Landlord's gross negligence and/or willful misconduct or the gross negligence and/Or willful misconduct of Landlord's agents, contractors, directors, employees, officers, partners, and/or shareholders or except as otherwise provided in this Lease, Tenant shall not have the right to tennnate this Lease as a result of Landlord undertaking the Work, nor shall Tenant or any third party claiming under Tenant be entitled to make any claim against Landlord for any interruption, interference or disruption of Tenant's business or loss of profits therefrom as a result of the Work, and except as otherwise provided in this Lease Tenant hereby releases Landlord from any claim which Tenant may have against Landlord arising from or relating to, directly or'indirectly, the performance of the Work by Landlord.

Section 12.11.Optional Landlord Renovation, It is specifically understood and agreed that Landlord has no obligation and has made no promises to alter, remodel, improve, renovate or decorate the Premises, Building, or any part thereof and that, except as set forth herein, no representations respecting the condition of the Premises or the I3uilding have been made by Landlord to Tenant.

However, at any time and from time to time during the Term, Landlord may elect, in Landlord's reasonable discretion, to otherwise renovate, improve, alter or modify elements of the Real Property, the Building and/or the Premises (collectively, "Renovations") including without limitation, the parking facilities, common areas, systems, equipment, roof, and structural portions of the same. which Renovations may include, without limitation:

a) modifying the common areas and tenant spaces to comply with applicable laws and regulations, including regulations relating to the physically disabled, seismic conditions and building safety and security, and

b) installing new carpeting, lighting and wall covering in the Building common areas.

In connection with such_Renovations, Landlord may, among other things, erect scaffolding or other necessary structures in or about the Building, limit or eliminate access to portions of the Building, common areas or parking facilities serving the Building, or perform other work in or about the Building, which work may create, noise, dust or debris that remains in the Building.

Landlord shall have the right to access through the Premises as well as the right to take into and upon and through all or any part of the Premises, or any other part of the Building, all materials that may reasonably be required to make such repairs, alterations, decorating, additions or improvements pursuant to the provisions of this Section 12.11. So long as Tenant shall maintain reasonable access to the Premises, the Building and the parking facilities, Landlord shall also have the right, in the course of the Renovations, to close entrances, doors, corridors, elevators, or, other building facilities, or temporarily to abatd the operation of such facilities.

So long as Tenant is able to continue business operations and is not required to vacate the Premises for any reason arising out of the Renovations, and maintains reasonable access to and complies with the Premises Work Restrictions, the Premises and the parking facilities, Tenant shall permit all of the Renovations to be done, and except in the case of Landlord's gross negligence or willful misconduct or the gross negligence or willful misconduct of Landlord's contractors, directors, employees, officers, partners or shareholders, without claiming Landlord is, guilty of the constructive eviction or disturbance of Tenant's use and possession.

Landlord shall not be liable to Tenant in any manner (except as expressly provided otherwise in this Lease), whether for abatement of any Rent or other charge, reimbursement of any expense, injury, loss or damage to Tenant's property, business, or any person claiming by or under Tenant, by reason of interference with the business of Tenant or inconvenience or annoyance to Tenant or the customers of Tenaht resulting from an^y Renovations done in or about the Premises or the Building or to any adjacent or nearby building, land, street or alley. However, Landlord agrees that the Renovations shall be scheduled insofar as is commercially reasonable to permit Tenant to continue its normal business operations, with advance notice thereof, and in such commercially reasonable manner so as to minimize Tenant's inconvenience and in compliance with'the Premises Work Restrictions.

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Section 12.12.Optional Tenant Changes During the Term. After completion of the initial Improvements contemplated hereunder, if any, Tenant shall make no alteration, change, addition, removal, demolition, improvement, repair or replacement in, on, upon, to or about the Premises, or at any time to any portion of the Building (collectively or individually a "Tenant Change"), without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Tenant shall have the right, without Landlord's consent but upon ten (10) days prior written notice to Landlord, to make interior non-structural, non-mechanical additions, removals, repairs and alterations ("Minor Alterations") to the Premises that do not (i) involve the expenditure of more than $20,000.00 in the aggregate in any twelve (12) month period during the Term, (ii) affect the exterior appearance of the Building, or (iii) affect the Building Systems or the Building Structure.. Except as otherwise specified in Article 7, any Tenant Change shall, at the termination of this Lease, become a part of the Building and belong to Landlord, pursuant to the provisions of Article 7. Any application for Landlord's consent to a Tenant Change, and the completion thereof, shall be in conformance with the provisions of Exhibit B-1, attached hereto and made a part heMof by reference.

Tenant shall not knowingly permit Tenant's agents clients contractors, directors, employees, invitees, licensees, officers, partners or shareholders to deface the walls, floors and/or ceilings of the Preinises, nor mark, drive nails, screws or drill holes into, paint, or in any way mar any surface in the Building. Notwithstanding the above, Tenant is hereby permitted to install such pictures, certificates, licenses, artwork, bulletin boards and similar items as are normally used in Tenant's business, so long as such installation is carefully attached to the walls by Tenant in a manner reasonably prescribed by Landlord in writing.

If Tenant desires, as a part of any Tenant Change, to make any revisions whatsoever to the electrical, HVAC, mechanical, life-safety, plumbing, or structural systems of the Building or Premises, such revisions must be completed by subcontractors approved by Landlord, which approval will not be unreasonably withheld and in the manner and location(s) reasonably prescribed by Landlord. If Tenant desires to install any telephone outlets, the same shall be installed in the manner and location(s) reasonably prescribed by Landlord in writing.

If Landlord consents to, any requested Tenant Change, Tenant shall give Landlord a minimum of ten (10)1business days written notice prior to commencement thereof. Landlord reserves the option, but not the obligation, to enter upon, the Premises for the purpose of posting and maintaining such notices on the Premises as may be reasonably necessary to protect Landlord against mechanic's liens, material man's liens_,or other liens, and/or for posting any other notices that may be proper and necessary in connection with^lTenant's completion of the Tenant Change.

If any alterations, additions or improvements made by Tenant result in Landlord being required to make any alterations to other portions of the Building in order to comply with any applicable statutes, ordinances or regulations (e.g., "handicap ordinances") then Tenant shall reimburse Landlord upon demand for all costs and expenses incurred by Landlord in making such alterations. In addition, Tenant shall_, reimburse Landlord for any and all of Landlord's out of pocket costs incurred in reviewing Tenant's plans for any Tenant Change or for any other "peer review" work associated with Landlord's review of.Tenant's plans for any Tenant Change, including, without limitation, Landlord's out of pocket costs incurred in engaging any third party engineers, contractors, consultants or design specialists. Tenant shall pay such costs not to exceed three percent (3%) of Landlord's actual costs) to Landlord within five (5) business days after Landlord's delivery to Tenant of a copy of the invoice(s) for such work.

Section 12.13. Express Agreement. The provisions of this Lease, including those contained in this Article 12, constitute an express agreement between Landlord and Tenant that applies in the event of any Casualty to the Premises, Building or Real Property. Tenant, therefore, fully waives the provisions of any Statute or regulations, including California Civil Code Sections 1932(2) and 1933(4), and any other law or statute which purports to govern the rights or obligations of Landlord and. Tenant concerning a Casualty in the absence of express agreement. Tenant and Landlord expressly agree and accept that any successor or other law of like import shall have no application hereunder.

ARTICLE 13

CONDEMNATION

Section 13.1. Condemnation of the Premises. If more than twenty five percent (25%) of the Premises is laWfully condemned or taken in any manner for any public'or quasi-public use, or if any portion of the Building is condemned or taken in such a manner that Tenant is reasonably prevented from obtaining access to the Building or the Premises, this Lease may, within ten (10) business days of such taking, be terminated at the option of either Landlord or Tenant by one party giving the other thirty (30) days written notice of its intent to do so. If either Landlord or Tenant provide the other party written notice of termination, the Term and estate hereby granted shall forthwith cease and terminate as of the earlier of the date of vesting of title in such condemnation or taking or the date of taking of possession by the condemning authority.

If less than twenty-five percent (25%) of the Premises is so condemned or taken, then the term and estati hereby granted with respect to such part shall forthwith cease and terminate as of the earlier of the date of vesting of title in such condemnation or taking or the date of taking of possession by the condemning authority, and the Fixed Monthly Rent payable hereunder (and Additional Rent payable purstiant to Articles 3 or 4) shall be abated on a prorated basis, by dividing the total number of Usable square feet so taken by the total number of Usable square feet contained in the Premises, then muihiplying said percentage on a monthly basis, continuing from the date of such vesting of title to the date specified in this Lease for the expiration of the Term hereof.

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Section 13.2. Condemnation of the Building. If less than twenty-five percent (25%) of the Building is so condemned or taken, then Landlord shall, to the extent of the proceeds of the condemnation payable to Landlord and with reasonable diligence, restore the remaining portion of the Building as nearly as pradticable to its condition prior to such condemnation or taking; except that, if such proceeds constitute less; than ninety percent (90%) of Landlord's estimate of the cost of rebuilding or restoration, then Landlord may terminate this Lease on thirty (30) days prior written notice to Tenant.

If more than twenty-five percent (25%) of the Building is so condemned or taken, but the Premises are unaffected thereby, then Landlord shall have the option but not the  obligation, which election shall be in Landlord's sole discretion, to terminate this Lease, effective the earlier of the date of vesting of title in such condemnation or the date Landlord delivers actual possession of the Building and Premises to the condenming authority, which election by Landlord shall be provided to Tenant in writing.

Section 13.3. Award. If any condemnation or taking of all or a part of the Building takes place, Tenant shall be entitled to join in any action claiming compensation therefore, and Landlord shall be entitled to receive that portion of the award made for the value of the Building, Premises, leasehold improvements made or reimbursed by Landlord, or bonus value of the Lease, and Tenant shall only be entitled to receive any award made for the value of the estate vested by this Lease in Tenant, including Tenant's proXimate damages to Tenant's business and reasonable relocation expenses. Nothing shall preclude Tenant from intervening in any such condemnation proceeding to claim or receive from the condemning authority any compensation to which Tenant may otherwise lawfully be entitled in such case in respect of Tenant's property or for moving to a new location.

Section 13.4. Condemnation for aLimited Period. Notwithstanding the provisions of Section 13.1, 13.2 or 13.3, except during the final twelve (12) months of the Term, if all or any portion of the Premises are condemned or taken for governmental occupancy for a limited period (i.e. - anticipated to be no lonubr than sixty (60) days), then this Lease shall not terminate; there shall be no abatement of Fixed Monthly Rent or Additional Rent payable hereunder; and Tenant shall be entitled to receive the entire maid therefor (whether paid as damages, rent or otherwise). Tf during the final twelve (12) months of the Term, all or any portion of the Premises are condemned or taken for ^uovernmental occupancy for a limited period anticipated to be in excess of sixty (60) days, or Or a period extended after the expiration of the initial Term, Tenant shall have the option, but not the obligation, to terminate this Lease, in which case, Landlord shall be entitled to such part of such award as shall be properly allocable to the cost of restoration of the Premises, and the balance of such award shall' be apportioned between Landlord and Tenant as of the date of such termination.

If the termination of such governmental occupancy is prior to expiration of this Lease, and Tenant has not elected to terminate this Lease, Tenant shall, upon receipt thereof and to the extent an award has been made, restore the Premises as nearly as possible to the condition in which they were prior to the condemnation or taking.

ARTICLE 14

MORTGAGE SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE

Section 14.1. Subordination. This Lease, the Term and estate hereby granted, are and shall be subject and Subordinate to the lien of each mortgage which may now or at any time hereafter affect Landlord's interest in the real property, Building, parking facilities, common areas or portions thereof and/or the land hhereunder (an ''Underlying Mortgage"), regardless of the interest rate, the terms of repayment, the use of the proceeds or any other provision of any such mortgage, provided that Tenant receives, as a condition precedent to such subordination, a commercially reasonable subordination, non-disturbance and attornment agreement in sum and substance the equivalent of Exhibit H ("SNDAA"). Tenant shall from time to time execute and deliver such instruments as Landlord or the holder of any such mortgage may reasonably request to confirm the subordination provided in this Section 14.1, subject to the foregoing.

Section 14.2. Attornment. Tenant confirms that if by reason of a default under an Underlying Morigage the interest of Landlord in the Premises is terminated, provided Tenant is granted in writing continued quiet enjoyment of the Premises pursuant to the terms and provisions of this Lease, Tenant shall attorn to the holder of the reversionary interest in the Premises and shall recognize such holder as Tenant's landlord under this Lease, but in no event shall such holder be bound by any payment of Rent paid more than one month in advance of the date due under this Lease. Tenant shall, within ten (10) calendar days after request therefor, execute and deliver, at any time and from time to time, upon the request of Landlord or of the`holder of an Underlying Mortgage any instrument which may be necessary or appropriate to evidence such attoniment.

Section 14.3.Modification of Lease; Notice of Default. If any current or prospective mortgagee or ground lessor for the Building requires a modification or modifications of this Lease, which modification or mbdifications will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations of Tenant hereunder, then in such event, Tenant agrees that this Lease may be so modified. Tenant agrees to execute and deliver to Landlord within ten (10) business days following the request therefor whatever reasonable documents are required to effectuate said modification. Should Landlord or' any such current or prospective mortgagee or ground lessor require execution of a short form of Lease for recording, containing, among other customary provisions, the names of the parties, a description of the Premises and the Term, Tenant agrees to execute and deliver to Landlord such short form of Lease within ten (10) business days following the request therefor. Further, Tenant shall give written notice of any default by Landlord under this Lease to any morkgagee and ground lessor of the Building of whom Tenant has received written notification and shall affol-d such mortgagee and ground lessor a reasonable opportunity to cure such default prior to exercising any remedy under this Lease.

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Section 14.4.Non Disturbance Agreement. Landlord agrees to obtain and deliver to Tenant, within thirty (30) days after mutual execution and delivery of this Lease, an SNDAA from the holder of the existing deed of trust affecting the Building SNDAA is in form and substance comparable to the SNDAA attached hereto as Exhibit H.

ARTICLE 15

ESTOPPEL CERTIFICATES

Section 15.1. Estoppel Certificates. Tenant shall, within ten (10) business days alter receipt of Landlord's written request therefor, execute, acicnowledge and deliver to Landlord an Estoppel Certificate, which may be conclusively relied upon by any prospective purchaser, mortgagee or beneficiary under any deed of trust covering the Building or any part thereof Said Estoppel Certificate shall certify the following:

a) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification);

b) the date, if any to which rental and other sums payable hereunder have been paid;

c) that no notice has been received by Tenant of any default which has not been cured, except as to defaults specified in the certificate;

d) that Landlord is not in default under this Lease or if so, specifying such default; and

e) such other factual matters as may be reasonably requested.by Landlord.

Tenant's failure to deliver the Estoppel Certificate within the time period specified above shall constitute a material default under the Lease, and Landlord shall have the option, but not the obligation, to enforce the remedies contained in Article 18.

ARTICLE 16

NOTICES

Section 16.1. Notices. Any notice, consent, approval, agreement, certification, request, bill, demand. statement, acceptance or other communication hereunder (a "notice") shall be in writing and shall be considered duly given or furnished vvhen:

a) delivered personally or by messenger or overnight delivery service, with signature evidencing such delivery; or

b) upon the date of delivery, after being mailed in a postpaid envelope, sent certified mail, return receipt requested.

In each case such notices must be when addressed to Landlord as set forth in the Basic Lease Information and to Tenant at the Premises and any other address for Tenant specified in the Basic Lease Information; or to such other address or addressee as either party may designate by a written notice given pursuant hereto

ARTICLE 17

DEFAULT AND LANDLORD'S OPTION TO CURE

Section 17.1. Tenant's Default. For the purposes of this Section 17.1, if the term "Tenant'', as used in this Lease, refers to more than one person, then, such term shall be deemed to include all of such persons or any one of them; if any of the obligations of Tenant under this Lease are guaranteed, the term "Tenant," as used in Section 17.1(e) and Section 17.1(1), shall be deemed to also include the guarantor or ifi there is more than one guarantor, all or any one of them; and if this Lease has been assigned, the term i "Tenant," as used in Sections 17.1 (a) through (11), inclusive, shall be deemed to include the assignee and assignor, jointly and severally, unless Landlord shall have in connection with such assignment, previously released the assignor from any further liability under this Lease, in which event the term "Tenant," as used in said subparagraphs, shall not include the assignor that was previously released

This Lease and the covenants and estate hereby granted are subject to the limitation that:

a) Tenant fails to make any payment of Fixed Monthly Rent or Additional Rent within five (5) bUsiness days following Tenant's receipt of written notice that any such amount is due and unpaid;

b) Tenant defaults in the keeping, observance or performance of any covenant or agreement including any provisions of the rules and regulations established by Landlord , and if such default continues and is not cured by Tenant within thirty (30) days after Landlord has given to Tenant a notice specifying the same, or in the case of such a default which for causes beyond Tenant's reasonable control (including occupancy of a sublessee) cannot with due diligence be cured within such period of thirty (30) days, if Tenant

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c) if Tenant fails to deliver the Estoppel Certificate required under Article 15 hereof within the time Period specified in the last paragraph of said Article 15, or

d) if Tenant:

i)   applies for or consents to the appointment of or the taking of possession by a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property;

ii)   admits in writing its liability, or is generally unable to pay its debts as such debts become due;

iii)   makes a general assignment for the benefit of its creditors; 

iv)   commences a voluntary case under federal bankruptcy laws (as now in hereafter in effect);

v)   files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up, or composition or adjustment of debts;

vi)   fails to controvert in a timely or appropriate manner, or acquiesces in writing to any petition filed against it in an involuntary case under such bankruptcy laws;

vii)   take any action for the purpose of effecting any of the foregoing, or

e) if a proceeding or case is commenced, without the application or consent of Tenant, in any court of competent jurisdiction, seeking:

i)   the liquidation, reorganization, dissolution, winding up, or composition or readjustment of debts, of Tenant; or

ii)   the appointment of a trustee, receiver, custodian, liquidator or the like of Tenant or of all or a substantial part of its assets; or

iii)   similar relief with respect of Tenant under any law relating to bankruptcy, insolvency, reorganization, winding up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foreuoing shall be entered and continue unstayed and in effect, for a period of sixty (60) days, or an order for relief against Tenant shall be entered in an involuntary case under such bankruptcy laws.

The occurrences described in Section 17.1 (a)-(e) above are deemed, individually and collectively, an "Event of Default".

Section 17.2.Landlord's Option to Cure Tenant's Default If Tenant enters into a default under this Lease, upon Landlord's issuance of a written notice, as specified hereinabove, Landlord may cure the same at the sole expense of Tenant:

a) immediately and without notice in the case of emergency; if said default is specified in Sections 17.1 (a), (b) or (c), or if such default unreasonably interferes with the use by any other tenant of the Building; with the efficient operation of the Building; or will result in a violation of law or in a cancellation of any insurance policy maintained by Landlord, and

b) after the expiration of Landlord's 3-Day Notice of Intent to Cure, in the case of any default other than those specified in Section 17.2 (a) hereinabove.

Section 17.3.Landlord's Option to Terminate this Lease. In addition to any other remedies Landlord may have at law or in equity, upon an Event of Default, Landlord shall be entitled to give to Tenant a written notice of intention to terminate this Lease at the expiration of three (3) days from the date of the uivin^cr of such notice, and if such notice is given by Landlord, and Tenant fails to cure the defaults specified therein, then this Lease and the Term and estate hereby granted (whether or not the Commencement Date has already occurred) shall terminate upon the expiration of such three (3) day period (a 'Default Termination"), with the same effect as if the last of such three (3) days were the Termination Date, except that Tenant shall remain liable for damages as provided hereinbelow or pursuant to law.

SectIon I74.Certain Payments. Bills for all reasonable costs and expenses incurred by Landlord in connection with any performance by it under Section 17.2 shall be payable, as Additional Rent, pursuant to the provisions of Section 4.3.

Section 17.5. Certain Waivers. Unless Tenant has submitted documentation that it validly disputes Landlord's billing for Fixed Monthly Rent hereunder, or is completing an audit of Landlord's Operating Expense Statement, if Tenant is in default in payment of Fixed Monthly Rent or Additional Rent hereunder, Tenant waives the right to designate the items against which any payments made by Tenant are to be credited. In lieu thereof, Landlord may apply any payments received from Tenant to the then-oldest billing remaining unpaid on Tenant's rental account or to any other payment due from Tenant, as Landlord sees fit.

Section 17.6.Landlord Default. Notwithstanding anything to the contrary set forth in this Lease, Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless:

a) in; the event such default is with respect to the payment of money, Landlord fails to pay such unpaid amounts within five (5) business days of written notice from Tenant that the same was not paid when due, or

b) in the event such default is other than the obligation to pay money, Lanlord fails to perform such obligation, within thirty (30) days after the receipt of notice form Tenant specifying in detail Landlord's failure to perform; provided, however, if the nature is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default Under this Lease if it shall commence such performance within such thirty (30) days period and thereafter diligently pursue the same to completion within a reasonable time period.

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Upon any such default by Landlord under this Lease, 'fen= may except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity.

ARTICLE 18

DAMAGES; REMEDIES; RE-ENTRY BY LANDLORD; ETC.

Section 18.1. Damages. In the event of a Default Termination, Landlord may recover from Tenant the

a)   the worth at the time of award of the unpaid Fixed Monthly Rent and Additional Rent earned to the date of such Default Termination; and

b)   the worth at the time of award of the amount by which the unpaid Fixed Monthly Rent and Additional Rent which would have been earned after the 'date of such Default Termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; and

c)   the worth at the time of award of the amount by which the unpaid Fixed Monthly Rent and Additional Rent which would have been earned for the balance of the Term after the time of award ekceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; and

d)   any other amount reasonably necessary to compensate Landlord for all of the detriment proximately caused by Tenant's failure to observe or perform any of its covenants and agreements under this Lease or which in the ordinary course of events would be likely to result therefrom, including, without limitation. the payment of the reasonable expenses incurred or paid by Landlord in re­ebtering and securing possession of the Premises and in the reletting thereof (including, without liMitation, altering and preparing the Premises for new tenants and brokers' commission); and

e)  at Landlord's sole election such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable California laws.

Sectfon 18.2. Computations: The "worth at the time of award" is computed: 1the total Fixed Monthly Rent for the balance of the Term, plus

a) in paragraphs (a) and (b) above, by allowing interest at the rate of ten percent (10%) per annum (but in no event in excess of the maximum rate permitted by law); and

b) in paragraph (c) above, by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

c) For purposes of computing unpaid rental which would have accured and become payable under this Lease, unpaid rental shall consist of the sum of:

i)   the total Fixed Monthly Rent for the balance of the Term, plus

ii)   a computation of Tenant's Share of Additional Rent due under the Lease including; without limitation, Tenant's Share of any increase in Operating Expenses (including real estate taxes) for the balance of the Term. For purposes of computing any increases due Landlord hereunder, Additional Rent for the calendar year of the default and for each future calendar year in the Term shall be assumed to be equal to the Additional Rent for the calendar year prior to the year in which default occurs, compounded at a rate equal to the mean average rate of inflation for the preceding five calendar years as determined by the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (All Urban Consumers, all items, 1982-84 equals 100) for the metropolitan area or region of which Los Angeles, California is a part. If such index is discontinued or revised, the average rate of inflation shall be determined by reference to the index designated as the successor or substitute index by the government of the United States.

Section 18.3. Re-Entryby Landlord.

a)   Upon an Event of Default, Landlord or Landlord's authorized representatives may re-enter the Premises with appropriate legal process, and remove all persons and all property therefrom, either by summary dispossession proceedings or by any suitable action or proceeding at law, without being liable to indictment, prosecution or damages therefor, and may repossess and enjoy the Premises. No re-entry or repossession of the Premises by Landlord or its representatives under this Section 18.3 shall be construed as an election to terminate this Lease unless a notice of such election is given to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction. The words "re-enter", "re-entry" and "re-entering" as used herein are not restricted to their technical legal meanings.

b)   If an Event of Default specified occurs and continues beyond the period of grace (if any) therefor, then if Landlord does not elect to terminate this Lease Landlord may, from time to time and without terminating this Lease, enforce all its rights and remedies under this Lease, including the right to recover the Fixed Monthly Rent and Additional Rent as the same becomes payable by Tenant hereunder.

i)   If Landlord consents thereto, Tenant may sublet the Premises or any part thereof (which consent Landlord agrees will not be unreasonably withheld), subject to Tenant's compliance with the requirements of Article 11 of this Lease. So long as Landlord is exercising this remedy it will not terminate Tenant's right to possession of the Premises, but it may engage in the acts permitted by Section 1951.4(c) of the California Civil Code.

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c) If Tenant permanently abandons the Premises in breach of this Lease, Landlord shall have the right o relet the Premises or any part thereof on such terms and conditions and at such rentals as Landlord in its reasonable discretion may deem advisable, with the right to make alterations and repairs in and to the Premises necessary to reletting. If Landlord so elects to relet, then gross rentals received by Landlord from the reletting shall be applied:

i)   first, to the payment of the reasonable expenses incurred or paid by Landlord in re-entering and securing possession of the Premises and in the reletting thereof (including, without limitation, altering and preparing the Premises for new tenants and brokers' commissions);

ii)   second, to the payment of the Fixed Monthly Rent and Additional Rent payable by Tenant hereunder; and

iii)   third, the remainder, if any to be retained by Landlord and applied to the payment of future Fixed Monthly Rent and Additional Rent as the same become due.

Should the gross rentals received by Landlord from the reletting be insufficient to pay in full the sums stated in Section 18.3 (a) and (b) hereinabove, Tenant shall, upon demand, pay the deficiency to Landlord.

Section 18.4. Certain Waivers. After Landlord has actually obtained possession of the Premises pursbant to any lawful order of possession granted in a valid court of law, Tenant thereafter waives and surrenders for Tenant, and for all claiming under Tenant, all rights and privileges now or hereafter existing to redeem the Premises (whether by order or jud^gment of any court or by any legal process or writ) to assert Tenant's continued right to occupancy of the Premises; or to have a continuance of this Lease for the Term hereof. Tenant also waives the provisions of any law relating to notice and/or delay in levy of execution in case of_, an eviction or dispossession for nonpayment of rein, and of any successor or other law of like import.

Section 183. Cumulative Remedies. The remedies of Landlord provided for in this Lease are cumulative and are not intended to be exclusive of any other remedies to which Landlord may be, lawfully entitled. The exercise by Landlord of any remedy to which it is entitled shall not preclude or hinder the exercise of any other such remedy.

ARTICLE 19 INSURANCE

Section 19.1. Landlord Obligations:

a) Landlord shall secure and maintain during the Term of this Lease the following insurance:

i)   Commercial General Liability and Umbrella Liability insurance relating to Landlord's operation of the Building, for personal and bodily injury and death, and damage to other's property.

ii)   All risk of standard fire insurance and extended coverage including vandalism and malicious mischief and sprinkler leakage endorsements relating to the Building, the parking facilities, the common area improvements and any and all improvements installed in on or upon the Premises and affixed thereto (but excluding Tenant's fixtures, furnishings, equipment, personal property or other elements of Tenant's Property);

iii)    Such other insurance (including, without limitation, boiler and machinery, rental loss, earthquake and/or flood insurance) as Landlord reasonably elects to obtain or any Lender requires.

b) Insurance effected by Landlord under this Section 19.1 will be:

i)   In amounts which Landlord from time to time reasonably determines sufficient or which any ; Lender requires; and

ii)   Subject to such deductibles and exclusions as Landlord reasonably deems appropriate.

c)  Notwithstanding any contribution by Tenant to the cost of insurance premiums as provided herein, Tenant acknowledges that Tenant has no right to receive any proceeds from any insurance policies carried by Landlord, but shall continue to receive the waiver of subrogation benefits pursuant to Section 19.4 below,

Section 19.2. Tenant Obligations.

a) Prior to the Commencement Date or Tenant's anticipated early possession date of the Premises and thereafter during the Term of this Lease, Tenant shall`secure and maintain, at its own expense throughout the Term of this Lease the following minimum types and amounts of insurance, in form and in companies acceptable to Landlord, insuring Tenant, its employees, agents and designees:

i)   Workers' Compensation Insurance, the amount and scope required by statute or other governing law.

ii)   Employer's Liability Insurance in amounts equal to the following: Bodily Injury by accident -, $1,000,000 each accident; Bodily Injury by disease - $1,000,000 policy limit; and Bodily Injury by disease - $1,000,000 each employee.

iii)   CommercialGeneral Liability on an occurrence basis, without claims-made features, with bodily injury and property damage coverage in an amount equal to the greater of (1) the insurance currently maintained by Tenant or (2) a combined single limit of $2,000,000; and such insurance shall include the following coverages: (A) Premises and Operations coverage with X, C, and U exclusions for explosion, collapse, and underground property damage deleted under both premises/operations and contractual liability coverage parts, if applicable; (B) Owner and Contractor Protective coverage; (C) Products and Completed Operations coverage; (D) Blanket Contractual coverage, including both oral and written contracts; (E) Personal Injury coverage; (F) Broad Form Comprehensive General Liability coverage (or its equivalent); and (G) Broad Form Property Damage coverage, including completed operations.

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iv)   All risk of standard fire insurance and extended coverage with vandalism and malicious mischief and sprinkler leakage endorsements, insuring fixtures, glass, equipment, merchandise, inventory and other elements of Tenant's Property in the Premises, and all other contents of the Premises (e.g. Tenant Improvements, furniture, fixtures, equipment). Such insurance shall be in an amount equal to 100% of the replacement value thereof (and Tenant shall re-determine the same as frequently as necessary in order to comply herewith). The proceeds of such insurance, so long as this Lease remains in effect, shall be used to repair and/or replace the items so insured.

v)   A commercially reasonable and customary policy of business interruption insurance with respect to the operation of Tenant's business.

vi)   Any other forms of insurance'Landlord may reasonably require from time to time as compared to prudent landlords of Comparable Buildings, in form and amounts and for insurance risks against which a pnident tenant of comparable size in a comparable business would protect itself.

b) All insurance policies maintained to provide the coverages required herein shall:

i)   Be issued by insurance companies authorized to do business in the state in which the leased premises are located, and with companies rated, at a minimum "A- VII" by A.M. Best;

ii)   Bc subject to the prior approval of Landlord (which approval shall not be unreasonably withheld) as to form, substance and insurer;

iii)   Provide for a deductible only so long as Tenant shall remain liable for payment of any such j deductible in the event of any loss;

iv)   Intentionally Omitted;

v)   Contain provisions for at least ten (10) days advance written notice to Landlord of cancellation due to non-payment and thirty (30) days advance written notice to Landlord of material modification or cancellation for any reason other than non-payment; and

vi)   Stipulate that coverages afforded under such policies are primary insurance as respects Landlord and that any other insurance maintained by Landlord are excess and non-contributing with the ; insurance required hereunder.

e) No endorsement limiting or excluding a required coverage is permitted.

d)   Tenant shall deliver to Landlord written evidence of insurance coverages required herein prior to the Delivery Date. Tenant shall deliver to Landlord no less than fifteen (15) days prior to the expiration Of any required coverage, written evidence of the renewal or replacement of such coverage. Landlord's failure at any time to object to Tenant's failure to provide the specified insurance or written evidence thereof (either as to the type or amount of such insurance) shall not be deemed as a waiver of Tenant's obligations under this Section.

e)   Landlord shall be named as an additional insured on the Tenant's policies of General Liability and gmbrella Liability insurance. Landlord shall be named as a loss payee on the Tenant's policies of All Risk insurance as their interest may appear to the extent any fixtures, equipment, improvements and installations attached or built into the Premises by Tenant or on Tenant's behalf at any time during the Term shall, at the expiration or earlier termination of this Lease, be deemed the property of Landlord; become a permanent part of the Premises and remain therein. Tenant shall deliver to Landlord the appropriate endorsements evidencing additional insured and loss payee status. Any claim for loss under said insurance policies shall be payable notwithstanding any act, omission, negligence, representation, misrepresentation or other conduct or misconduct of Tenant which might otherwise cause cancellation, forfeiture or reduction of such insurance.

f) The insurance requirements in this Section shall not in any way limit, in either scope or amount, the indemnity obligations separately owed by one party to the other under the Lease.

g)   Nothing herein shall in any manner limit the liability of one party for non-performance of its obligations or for loss or damage for which such party is responsible, except as provided in Section  19.4. The aforementioned minimum limits of policies shall in no event limit the liability of either party hereunder.

h)   Tenant may, at its option, satisfy its insurance obligations hereunder by policies of so-called blanket insurance carried by Tenant provided that the same shall, in all respects, comply with the provisions hereof In such event, Tenant shall not be deemed to have complied with its obligations hereunder until Tenant shall have obtained and delivered to Landlord a copy of each such policy together with an appropriate endorsement or certificate applicable to and evidencing full compliance with the specific requirements of the Lease (irrespective of any claim which may be made with respect to any other property or liability covered under such policy), and until the same shall have been approved by Landlord in writing.

Section 19.3.Compliance with Building Insurance Requirements. After Tenant takes occupancy of the Premises, Tenant shall not violate or permit in, on or upon the Premises the violation of any condition imposed by such standard fire insurance policies as are normally issued for office buildings in the City or County in which the Building is located. Tenant shall not do, suffer or permit anything to he clone, or keep, suffer or permit anything to be kept, in the Premises which would, increase the risk ratings or premium calculation factors on the Building or property therein (collectively an `Increased Risk"), or which would result in insurance companies of good standing refusing to insure the Building or any property appurtenant thereto in such amounts and against such risks as Landlord may reasonably deterniirie from time to time are appropriate.

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Notwithstanding the above, if additional insurance is available to cover such Increased Risk, Tenant shall not be in default hereunder if:

a)   Tenant authorizes Landlord in writing to obtain such additional insurance; and

b)   prepays the annual cost thereof to Landlord for such additional coverage, as well as the additional Costs, if any of any increase in Landlord's other insurance premiums resulting from the existence or continuance of such Increased Risk.

Section 19.4.Mutual VVaiver of Subrogation. Landlord and Tenant intend that their respective property loss risks shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to and seek recovery only from their respective insurance carriers in the event of a property loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective insurance poliCies are now or shall be endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder.

Section 19.5.Failure to Secure. If at any time during the Term, and after expiration of three (3) business days' prior written demand therefore from Landlord, Tenant fails to:

a) Provide Landlord with access to a registered insurance broker of record that can verify Tenant's compliance with the requirement contained in this Article 19; or

b) provide documentation reasonably acceptable to Landlord that Tenant has secured and maintained the insurance coverage required hereunder,

then such failure shall be considered a material default under the Lease, and Landlord shall have the option, but not the obligation, upon prior written notice to obtain such insurance onbehalf of or as the agent of Tenant and in Tenant's name.

Tenant shall pay Landlord's billing for the premiums associated with such insurance policy or policies within five (5) days after receipt of Landlord's billing, as well as such other reasonable costs and fees arising out of such default together with interest on the entire amount so advanced by Landlord, at the rate of ten percent (10%) per annum, computed from the date of such advance. Such advances, if made by Landlord, shall be construed as, and considered Additional Rent under this Lease.

ARTICLE 20

MISCELLANEOUS

Section 20.1.Entire Agreement. This Lease, including the exhibits and guaranty of lease, if any, annexed hereto, contains all of the agrecinents and understandings relating to the leasing of the Premises and the obligations of Landlord and Tenant in connection therewith and neither party and no agent or representative thereof has made or is making, and neither party in executing and delivering this Lease is relying upon, any warranties or representations, except to the extent set forth in this Lease. All understandings and agreements heretofore had between Landlord and Tenant relating to the leasing of the Premises are merged in this Lease, which alone fully and completely expresses their agreement. The Riders (if any) and Exhibits annexed to this Lease and the Construction Agreement are hereby incorporated herein and made a part hereof.

Section 20.2. NoWaiver or Modification. The failure of Landlord or Tenant to insist in any instance uponithe strict keeping, observance or performance of any covenant or agreement contained in this Lease or to exercise any election herein contained shall not be construed as a waiver or relinquishment for the future of such covenant or agreement, but the same shall continue and remain in full force and effect. No Waiver or modification by either Landlord or Tenant of any covenant or agreement contained in this Lease shall be deemed to have been made unless the same is in writing executed by the party whose rights are being waived or modified. No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder unless accepted in writing by Landlord. The receipt and retention by Landlord, and the payment by Tenant, of Fixed Monthly Rent or Additional Rent with knowledge of the breach of any covenant or agreement contained in this Lease shall not be deemed a waiver of such breach by either Landlord or Tenant.

Section 20.3.Time of the Essence. Time is of the essence of this Lease and of all provisions hereof.

Section 20.4. Force Majeure. For the purposes of this Lease, "Force Majeure" shall be defined as any or all prevention, delays or stoppages and/or the inability to obtain services, labor, materials or reasonable substitutes therefor, when such prevention, delay, stoppage or failure is due to strikes, lockohts, labor disputes, terrorist acts, acts of God, governmental actions, civil commotion, tire or other casualty, and/or other causes beyond the reasonable control of the party obligated to perform, except that ForcelMajeure may not be raised as a defense (except as provided in a specific rent abatement provision of thiS Lease) for Tenant's non-performance of any obligations imposed by the Lease with regard to the payment of Fixed Monthly Rent and/or Additional Rent or Landlord's payment obligations.

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Notwithstanding anything to the contrary contained in this Lease, Force Majeure shall excuse the performance of such party for a period equal to any suite prevention, delay, stoppage or inability. Therefore, if this Lease specifies a time period for performance of an obligation by either party, that time peribd shall be extended by the period of any delay in such party's performance caused by a Force Mal,e u re.

Section 20.5. Broker. Landlord and Tenant represent to one another that each has dealt with no broker or agent in connection with this Lease or its negotiations other than Douglas, Emmett and Company andBeitler Commercial Realty. Landlord and Tenant shall hold one another harmless from and against any and all liability, loss, damage, expense, claim, action, demand, suit or obligation arising out of o^lr relating to a breach by the indemnifying party of such representation. Landlord agrees to pay all commissions due to the brokers listed above created by Tenant's execution of this Lease.

Section 20.6. Governing Law. This'Lease shall be governed by and construed in accordance with the laws of the State of California.

Section 20.7. Submission of Lease. Whether or not rental deposits have been received by Landlord from Tenant, and whether or not Landlord has delivered to Tenant an unexecuted draft version of this Lease for Tenant's review and/or signature, no contractual or other rights shall exist between Landlord and Tenant with respect to the Premises, nor shall this Lease be valid and/or in effect until this Lease has been fully executed and a duplicate original of said fully-executed Lease has been delivered to both Landlord and Tenant.

The submission of this Lease to Tenant shall be for examination purposes only and does not and shall not constitute a reservation of or an option for Tenant to lease, or otherwise create any interest by Tenant in the Premises or any other offices or space situated in the Building. Execution of ibis Lease by Tenant and its return to Landlord shall not be binding upon Landlord, notwithstanding any time interval, until Landlord has in fact executed and delivered a fully-executed duplicate original of this Lease to Tentint. Landlord and Tenant agree hereby to authorize transmission of all or portions of documents, inchiding'signature lines thereon, by facsimile machines, and further authorize the other party to rely conclusively upon such facsimile transmissions as if the original had been received.

Section 20.8. Captions. The captions in this Lease are for`convenience only and shall not in any wily limit or be deemed to construe or interpret the terms and provisions hereof.

Section 20.9. Singularand Plural, Etc. The words "Landlord" and "Tenant", as used herein, shall inchide the plural as well as the singular. Words used in the masculine gender include the feminine and neuter. If there be more than one_. Landlord or Tenant the obligations hereunder imposed upon Landlord and Tenant shall be joint, and several.

Section 20.10.Independent Covenants. Except where the covenants contained in one Article of this Lease are clearly affected by or contingent upon fulfillment by either party of another Article or paragraph of this Lease, this Lease shall be construed as though, the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to peribrm its obligations set forth herein, Tenant shall' not be entitled to make any repairs or perform any actions hereunder at Landlord's expense or to any set-off of the Rent or other amounts owing hereunder against Landlord, except as otherwise provided herein; provided, however, that the foregoing shall in no way impair the right of Tenant to commence -a separate action against Landlord for the violation by Landlord of the provisions hereof so long as notice is first given to Landlord and any holder of a mortgage or deed of trust covering the Building, Real Property or any portion thereof of whose address Tenant has theretofore been notified, and an opportunity is granted to Landlord and such holder to correct such violations as provided above.

Section 20.11. Severability. If any covenant or agreement of this Lease or the application thereof to any person or circumstance shall be held to be invalid or unenforceable, then and in each such event the remainder of this Lease or the application of such covenant or agreement to any other person or any other circumstance shall not be thereby affected, and each covenant and agreement hereof shall remMo valid;and enforceable to the fullest extent permitted by law.

Section 20.12. Warrantyof Authority. If Landlord or Tenant signs as a corporation, limited liability company or a partnership, each of the persons executing this Lease on behalf of Landlord or Tenant hereby covenant and warrant that each is a duly authorized and existing entity, that each has and is qualified to do business in California, that the persons signing on behalf of Landlord or Tenant have full right and authority to enter into this Lease, and that each and every person signing on behalf of either Landlord or Tenant are authorized to do so.

Section 20.13.NoRepresentations or Warranties. Neither Landlord nor Landlord's agents or attorneys have made any representations or warranties with respect to the Premises, the Building or this Lease, except as expressly set forth herein, and no rights, easements or licenses are or shall be acquired by Tenant by implication or otherwise.

Section 20.14. No Joint Venture or Partnership. This Lease shall not be deemed or construed to create or establish any relationship of partnership or joint venture or similar relationship or arrangement between Landlord and Tenant hereunder.

Section 20.15. Tenant's Obligations At Its Sole Expense. Notwithstanding the net that certain references in this Lease to acts required to be performed by Tenant hereunder, or to breaches or defaults of thiS Lease by Tenant, omit to state that such acts shall be performed at Tenant's sole expense, or omit to state that such breaches or defaults by Tenant are material, unless the context clearly implies to the contrary each and every act to be performed or obligation to be fulfilled by Tenant pursuant to this Lease shall; be performed or fulfilled at Tenant's sole expense, and all breaches or defaults by Tenant hereunder shdll be deemed material.

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Section 20.16. Attorneys' Fees. If litigation is instituted between Landlord and Tenant, the cause for which arises out of or in relation to this Lease, the prevailing party in such litigation shall be entitled to receive its costs (not Limited to court costs), expenses and reasonable attorneys' fees from the non-prevailing party as the same may be awarded by the court.

Setion 20.17.Waiver of Trial by Jury. In the interest of saving time and expense, Landlord and Tenant hereby consent to trial without a jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other or their successor-in-interest in respect to any matters arising out of or relating to this Lease.

Section 20.18. NoMerger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord terminate all or any exiting subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to it of anylor all such subleases or subtenancies.

Section 20.19. Prohibition Against Recording. Except as provided in Section 14.3 of this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord's election.

Section 20.20. Hazardous Waste. Tenant specifically agrees that, except for such limited quantities of office materials and supplies as are customarily used in Tenant's normal business operations, Tenant shall not engage or permit at any time, any operations or, activities upon, or any use or occupancy of the Premises, or any portion thereof, for the putpose of or in any way involving the handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal, accidental or intentional) of any hazardous substances, materials or wastes, or any wastes regulated under any local, state or federal law.

Tenant shall, during the Term, remain in full compliance with all applicable laws governing its use and occupancy of the Premises, including, without limitation, the handling, manufacturing, treatment, storage, disposal, discharge, use, and transportation of hazardous substances, materials or wastes, and any wastes regulated under any local, state or federal law. Tenant will remain in full compliance with the terms and conditions of all permits and licenses issued to it by any governmental authority on account of any or all Of its activities on the Premises.

Nothing in this Lease shall impose any obligation or liability upon Tenant with respect to hazardous waste that was in the Premises and or Building before Tenant first took occupancy of each portion of the PreMises and or Building or which was placed in the Premises and or Building at any time by anyone other than Tenant.

Section 20.21. Transportation Management. Tenant shall, at Tenant's sole expense, fully comply with all present or future progams intended to manage parking, transportation or traffic in and around the Building, when the same have been mandated by an outside governmental authority having jurisdiction therefor and not when required for the convenience of Landlord.

In connection therewith, Tenant shall be responsible for the transportation planning and management for all of Tenant's employees while located at the Premises, by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities reasonably designated by Landlord. Such programs may include, without limitation: restrictions on the number of peak-hour vehicle trips generated by Tenant; requirements for increased vehicle occupancy; implementing an in-house ride-sharing program and/or appointing an employee transportation coordinator; working with employees of any Building (or area-wide) ridesharing program manager; instituting employer-sponsored incentives (financial or in-kind) to encourage employees to ridesharing; and utilizing flexible work shifts for employees.

a) restrictions on the number of peak-hour vehicle trips generated by Tenant;

b) requirements for increased vehicle occupancy;

c) implementing an in-house ride-sharing program and/or appointing an employee transportation cordinator;

d) working with employees of any Building (or area-wide) ridesharing program manager;

e) instituting employer-sponsered incentives (financial or in-kind) to encourage employees to ridesharing; and

f) utilizing flexible work shifts for employees.

Section 20.22.Signage. Tenant may not install, inscribe, paint or affix any awning, shade, sign. advertisement or notice on or to any part of the outside or inside of the Building, or in any portion of the PremiSes visible to the outside of the Building or common areas without Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed.

All signage and/or directory listings installed on behalf of Tenant, whether installed in, on or upon the public corridors, doorways, Building directory and/or parking directory (if any), or in any other location whatsoever visible outside of the Premises, shall be installed by Landlord, at Tenant's sole expense.

Tenant's identification on or in any common area of the Building shall be limited to Tenant's name and suite designation, and in no event shall Tenant be entitled to the installation of Tenant's logo in any portion of the Building or common areas. Furthermore, the size, style, and placement of letters to be used in any of Tenant's signage shall be determined by Landlord, in Landlord's sole discretion, in full conformance with previously-established signage program for the Building.

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Except as specified hereinbelow, Tenant shall only be entitled to one (1) listing on the Building directory, or any parking directory ancillary thereto, which shall only show Tenant's business name and suite designation. Tenant shall also be entitled to a maximum of twenty (20) additional listings on said Building and/or parking directory, which listings shall be limited solely to Tenant's officers, employees, subSidiaries, affiliates and/or sublessees, if any. All of said Iidtings shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld, conditioned or delayed.

Section 20.23. Disclosure. Landlord and Tenant acknowledge that principals of Landlord have a financial interest in Douglas Emmett Realty Advisors and P.L.E. Builders.

Section 20.24.Confidentiality. Landlord and Tenant agree that the covenants and provisions of this LeaSe shall not be divulged to anyone not directly involved in the management, administration, ownership, lending against, or subleasing of the Prerriises, which permitted disclosure shall include, but not be limited to, the board members, legal counsel and/or accountants of either Landlord or Tenant.

Section 20.25. Guaranty. Concurrently with Tenant's execution of this Lease and as a condition prededent to the effectiveness of this Lease, Tenant shall cause Scott Mitchell Rosenberg, an individual and (Brian K. Altounian, an individual, jointly and severally, to execute and deliver to Landlord a Guaranty of Lease in the form of the Guaranty of Lease attached to this Lease as Exhibit E.

Section 20.25.1. Substitution of Letter of Credit in place of the Guaranty. Landlord and Tenant agree that within the first sixty (60) days following the full execution of this Lease, Tenant shall replace the Guaranty with a "Letter of Credit" (as defined below irisArticle 23) and only upon Landlord's acknowledged receipt of the Letter of Credit, shall the Guaranty deemed null and void. The Letter of Credit shall be delivered to Rita Silver, Controller at (Landlord's corporate offices located at 808 Wilshire Boulevard, Suite 200, Santa Monica, California 90401 via courier or overnight mail, no later than the expiration of the sixtieth (60th ) calendar day following the full execution of this Lease (the "Substitution Date").

ARTICLE 21

PARKING

Section 21.1.Parking. Throughout the Term, Tenant shall have the right, but not the obligation to purchase and assign to its employees the number of parking pennits set forth in

Section 21.1 of the Basic Lease Information (`BLI"). Except as othenvise permitted by Landlord's management agent in its reasonable discretion, and based on the availability thereof, in no event shall Tenant be entitled to purchase more than the number of parking permits listed in the BLI. If additional parking permits are available on a month-to-month basis, which determination shall be in the sole discretion of Landlord's parkingagent, Tenant shall be permitted to purchase one or more of said permits on a first-come, frst- serveebasis.

Said parking permits shall allow Tenant to park in the Building parking facility at the posted monthly parking rates and charges then in effect, plus any and all applicable taxes, provided that such rates may be changed from time to time, in Landlord's sole discretion. Landlord shall retain sole discretion to designate the location of each parking space, and whether it shall be assigned, or unassigned, unless specifically agreed to otherwise in writing between Landlord and Tenant.

Guests and invitees of Tenant shall have the right to use, in common with guests and invitees of other; tenants of the Building, the transient parking facilities of the Building at the then-posted parking rates and charges, or at such other rate or rates and charges as may be agreed upon from time to time between Landlord and Tenant in writing. Such rate(s) or charges maybe changed by Landlord from time to time in Landlord's sole discretion, and shall include, without limitation, any and all fees or taxes relating to parking assessed to Landlord for such parking facilities.

Tenant or Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders continued use of said transient, as well as monthly parking, shall be contingent upon Tenant and Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders continued compliance with the reasonable and non-discriminatory rules and regultions adopted by Landlord, which rules and regulations may change at any time or from time to time during the Term hereof in Landlord's sole discretion.

ARTICLE 22

CONCIERGE SERVICES

Section 22.1.Provision of Services. Landlord and Tenant acknowledge and understand that Landlord may, from time to time, make it possible for Tenant to use or purchase a variety of personal services which may include, but not be limited to, personal shopping, assistance with choosing or obtaining travel reservations, accommodations and/or tickets; tickets to performances, recommendations to eating establishments; and the like (collectively "Concierge Services").

Tenant acknowledges that said Concierge Services are provided by Landlord solely as an accommodation to and for the convenience of Tenant and Tenant's agents, contractors, directors, employees, licensees, officers, partners or shareholders, and Landlord does not make any representation, warranty or guarantee, express or implied, as to the quality, value, accuracy, or completeness of said Concierge Services, or whether or not Tenant shall be satisfied with the services and/or goods so provided and/or recommended. Landlord hereby disclaims any control over the variety or sufficiency of such srvices to be provided.

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Tenant acknowledges that Tenant is not required to use such Concierge Services as a condition precedent to compliance with the Lease that Tenant's use of such Concierge Services is strictly voluntary, and at the sole discretion and control of Tenant. Tenant shall independently make such financial arrangements for payment of the services provided as Tenant deems reasonable and of value.

ARTICLE 23

LETTER'OF CREDIT

Prior to the Substitution Date (as defined above on Section 20.25.1), Tenant shall deliver to Landlord, as collateral for the full and faithful performance by Tenant of all of its obligations under this Lease, an irrevocable and unconditional negotiable letter of credit (the "Letter of Credit"), substantially in the form attached as Exhibit G hereto and made;a part hereof, and containing the terms required heren, payable in the County of Los Angeles, California, running in favor of Landlord, issued by a solvent bank reasonably approved by Landlord under the supervision of the Superintendent of Banks or the State of California, or a National Banking Association, in the amount of 5336,000.00 ("LC Amount''). The LC Amount shall be subject to reduction annually during the initial Lease Temi, per Section 23.2 below. Further, the Letter of Credit shall be:

a) at sight and irrevocable;

b) maintained in effect for the entire period from the date of execution of this Lease through the date (`Lease Expiration Date) which is sixty (60) days following the expiration of the Term of this Lease, provide that the expiration date thereof shall be no earlier than the Lease Expiration Date or Provide for automatic, renewal thereof at least through the Lease Expiration Date, unless the issuing hank provides at least sixty (60) days prior written notice to Landlord of such non-renewal by certified mail, return receipt requested at the address set forth on the form of Letter of Credit attached as Exhibit G, and Tenant shall deliver a new Letter of Credit to Landlord at least sixty (60) days prior to the expiration of the Letter of Credit without any action whatsoever on the part of Landlord;

c) subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev) International Chamber of Commerce Publication #500; and

d) fully assignable by Landlord in connection with only the first of any number of transfers during the Lease Term of Landlord's interest in this Lease (with Tenant bearing any fees, costs or expenses in connection with any such transfer), and permit partial draws.

In addition to the foregoing, the form and terms of the Letter of Credit (and the bank issuing the same) shall be acceptable to Landlord, in Landlord's reasonable discretion, and shall provide, among other things, in effect that:

i) Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the Letter of Credit upon the presentation to the issuing bank of Landlord's (or Landlord's then managing agent's) written statement that Landlord is entitled to make such drawing under this Lease, it being understood that if Landlord or its managing agent be a corporation, partnership or other entity, then such statement shall be signed by an officer (if a corporation), a general partner (if a partnership), or any authorized party (if another entity);

ii) the Letter of Credit will be honored by the issuing bank without inquiry as to the accuracythereof and regardless of whether the Tenant disputes the content of such statement; and

iii) in the event of a transfer of Landlord's interest in the Building, Landlord shall transfer the Letter of Credit, in whole or in part (or cause a substitute letter of credit to be delivered, as aPplicable) to the transferee and thereupon the Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said Letter of Credit to a new landlord.

If as a result of any application or use by Landlord of all or any part of the Letter of Credit, the amount of the Letter of Credit shall be less than the LC Amount, Tenant shall, within five (5) business days hereafter, provide Landlord with an additional letter(s) of credit in an amount equal to the deficiency (or a replacement letter of credit in the total amount of the LC Amount) and any such additional (or replacement) letter of credit shall comply with all of the provisions of this Article 23, and if Tenant fails to comply with the foregoing, the same shall constitute an uncurable default by Tenant.

Temmt further covenants and warrants that it will neither assign nor encumber the Letter of Credit, or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. Without limiting the generality of the foregoing, if the Letter of Credit expires earlier than the Lease Expiration Date, LandlOrd will accept a renewal letter of credit or substitute letter of credit (such renewal or substitute letter of credit to be in effect and delivered to Landlord, as applicable, not later than thirty (30) days prior to the expiration of the Letter of Credit), which shall be irrevocable and automatically renewable as above Iprovided through the Lease Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be acceptable to Landlord in its reasonable discretion. However, if the Letter of Credit is not timely renewed or a substitute letter of credit is not timely received, or if Tenant fails to maintain the Letter of Credit in the amount and in accordance with the terms set forth in this Article 23, Landlord shall have the right to present the Letter of Credit to the issuing bank in accordance with the terms of this Article 23, and the entire sum evidenced thereby shall be paid to and held by Landlord as cash (the "Cash Collateral") to be held as collateral for performance of all of Tenant's obligations under this Lease and for all losses and damages Landlord may suffer as a result of any default by Tenant under this Lease pending Tenant's delivery to Landlord of the required replacement letter of credit in the LC Ambunt and otherwise complying with all of the provisions of this Article 23. Upon delivery of such replacement letter of credit, any Cash Collateral held by Landlord shall be returned to Tenant. Landlord shall have the right to hold Cash Collateral in a deposit account in the name of Landlord and commingle the Cash Collateral with its, general assets and Tenant hereby grants Landlord a security interest in the Cash Collateral. Tenant shall not be entitled to any interest earned on the Cash Collateral.

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If there is an Event of Default under the Lease beyond any applicable grace period, Landlord may, but without obligation to do so, draw upon the Letter of Credit and/or utilize the Cash Collateral, in part or in whole, to cure any default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which may be sustained by Landlord resulting from Tenant's default. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the Letter of Credit, either prior to or following a "draw" by Landlord of any portion of the Letter of Credit, regardless of whether any dispute exists between Tenant and Landlord as to Landlord's right to draw from the Letter of Credit. No condition or term of this Lease shall be deemed to render the Letter of Credit conditional to justify the issuer of the Letter of Credit in failing to honor a drawing upon such Letter of Credit in a timely manner.

Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or substitute therefor or Cash Collateral be:

a)   deemed to be or treated as a "security deposit" within the meaning of California Civil Code Section 1950.7;

b) subject to the terms of such Section 1950.7; or

c) intended to serve as a "security deposit" whitin the mening of such Section 1950.7.

The parties hereto:

i) recite that the Letter of Credit and/or Cash Collateral, as the case may be, is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules and regulations applicable to security deposits in the commercial context ("Security Deposit Laws") shall have no applicability or relevancy thereto; and

ii) waive any and all rights, duties and obligations either party may now or, in the future, will have relating or arising from the Security Deposit Laws.

Section 23.1Burn-off of LC Amount. Notwithstanding the foregoing provisions of Article 23 to the contrary, the LC Amount shall be reduced at the end of the:

(i)   the twenty-fourth (24^th) calendar month of the initial Lease Term (the "First Reduction Date") from $336,000.00 to $252,000.00;

(ii)   thirty-sixth (36^th) calendar month of the initial Lease Term from $252,000.00 to $168,000.00;

(iii)   the forty-eighth (48th) month of the initial Lease Term from $168,000.00 to $84,000.00; and

[INTENTIONALLY LEFT BLANK]

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(iv)   the sixtieth (60^th) calendar day following the sixtieth (60^th) calendar month of the initial Lease Term from $84,000.00 to $0.00.

There shall be no reduction in the LC Amount if there is an Event of Default of any of its Obligations under this Lease as of the First Reduction Date.

IN WITNESS WHEREOF, Landlord and Tenn the date(s) written below.

LANDLORD: DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company TENANT: PLATINUM STUDIOS, LLC, a California limited liability company

By:	DOUGLAS, EMMETT AND COMPANY, a California corporation, its agent
By:	/s/ Michael J. Means	By:	/s/ Scott Mitchell Rosenberg
	Michael J. Means		Scott Mitchell Rosenberg
	Vice President	By:	/s/ Brian K. Altounian
Dated:	7/13/06		Center Operating Officer
		Dated:	7/11/06

GUARANTOR:

By executing below, Guarantor acknowledges receipt of the foregoing Lease, including Exhibits Athrough C, E, G and H.

By:	/s/ Scott Mitchell Rosenberg
	Scott Mitchel Rosenberg, an individual
By:	/s/ Brian K. Altounian
	Brian K. Altounian, an individual
Dated:	7/11/06
	Jointly and severally

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EXHIBIT A — PREMISES PLAN

Suite 1400 at 11400 West Olympic Boulevard, Los Angeles, California 90064

Rentable Area approximately 12,493 square feet

Usable Area approximately 11,357 square feet

(Measured pursuant to the provisions of Section 1.4 of the Lease)

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EXHIBIT B

IMPROVEMENT CONSTRUCTION AGREEMENT
CONSTRUCTION PERFORMED BY TENANT

Section 1. Tenant to Complete Construction.Concurrent with Tenant's occupancy of the Premises. whidb shall not entitle Tenant to any set-off or rent abatemei Teront's general contractor ("Contractor^-) shalll furnish and install Within the Premises those items or general construction (the "Improvements^-'), shown on the final Plans and Specifications approved by Landlordl and in compliance with all applicable codes and regulations. The definition of Improvemets shall include all costs associated with completing the Tenant Improvements, including but not limited to epace planning, design, architectural, and !engineering fees, contracting, labor and material costs, municipal fees and permit costs, and docurnent development and/or reproduction. All approvals shall not be unreasonably withheld, conditioned or delayed hereunder, and the parties shall act in good faith, to finalize the Tenant Improvements.

All Tenant selections of fiMshes shall'be indicated in the Plans and Specifications and shall be equal to or better than the minimum Building stonclards and speet'ications.

Any work not shown in final construction PL;ns and Specifications or included in the Improvements such as, but not limited to telephone service, furnishings, or cabinetry, for vhich Tenant contracts separately shall be subject to Landlord's policies and shall be conducted in such a w ay as to not unreasonably hinder or delay the walk of Improvements.

Section 2. Tenant'sPayment of Costs. Subject to Landlords reimbursement as specified liereinbelmv, Tenaht shall bear all costs of the Improvements, and shall timely pay said costs directly to the Contractor. From time to time, Tenant shall provide Landlord with such evidence as Landlord may reasonably request that the Contractor has been paid in full for the work completed to-date.

In addition, Tenant shall reimburse Landlord for any and all of Landlord's out of pocket co.ts incurred in reviewing Tenant's PIaes and Specificatioes by engaging any third party engineers, contractors, consultants or design specialistsor for any other "peer review:" work associated smith Landlord's review of Tenant's Plans and Specifications. Tenant shall pay such costs (not to exceed three percent (3%) of the actual cost of work) to Landlord wintin five (5) business days after Landlord's delivery to Tenant of a copy of the invoice(s) for such work.

Tenant shall also pay the cost of any renovations or revisions which Landlord is required to make to any common area or portion of the Building, which such revisions and repairs or revisions arise out of or are required in connection with Tenant's completion of the Improvements contemplated herein.

Sectfon 3. LienReleases. Contractor shall provide Landlord with lien releases as requested by Landlord and confirmation that no liens have been filed a;e:tinst the Premises or the Building. If any Inns larise against the Premises or the Building as a result of Tenant's Improvements, Tenent shall immedicitely, at Tenant's sole expense, remove such liens at, .t provide Landlord evidence that the title to the Bbilding and Premises have been cleared of such liens.

Section 4. Performance Bonds.Intentionally Omitted

Section 5. Landlord's Reimbursemet for Costs. Landlord's reimbursement to Tenant for the Improvements in Paraaraph 1 above, shall be as set forth belew.

Section 5.1 Remaining Allowance.Provided Tzeant has substituted the Letter of Credit in place of the Guaranty per Section 20.25.1, and subject to Section 5.2 below, Tenant shall be eligible to be reimbursed by Landlord up to $10.00 per square feet of Usable Area contained in Premises, winch amount is approximately the sum of $113,570.00 based on $10.00 times approximately 11,357 usl) (the "Allowance"),

towards the costs of Tenant's design, permitting and c impletion of linprovemems to the Premises; it being understood that in no event shall any portion of the Allowance be used for cabling, moving expenses or furniture and equipment.

Section 5.2Reimbursement Conditions. Landlord shall, upon Tenant's submission to Landlord of (i) copies of checks paying for the completed tenant improvements to the Premises, and (ii) unconditional lien releases from the contractor andier t:ub-contractors providing the services therefor, reimburse Tenant up to an amount equal a 11 Allowance within thirty (30) days of receipt of a Written request for payment from Tenant. and so long as Landlord receives the items described in (i) and (ii) above no later than the last eelerelar day of the twelfth (12^th) calendar month of the initial Lease Term..

Section 6. Pre-Construction Requirements.Prior to Tenant or Contractor commencing any work:

a)   Contractor, and its subcontractors and suppliers, shill be approved in wiriting by Landlord, which approval shall not be unreasonably withheld, conditteeard or delayed. As a condition of such approval, so long as the same are reasonably cost co:epetitive, Contractor shall use Landlord's heating, venting, air-conditioning. plumbing, and electric.:d subcontractors for such work;

b)   Tenant or Tenant's Contractor shall submit all Plans and specifications to Landlord, and no woik on the Premises shall be commenced before Tenant h:n received Landlord's final written approval thereof; which shall not be tun-eesonably withheld, delLy xi or conditioned;

36

EXHIBIT B

IMPROVEMENT CONSTRUCTION AGREEMENT (continued)

c)   Contractor shall concurrently submit to Landlord and Tenant a written bid for completion of the Improvements. Said bid shall include Contractor's overhead, profit, and fees, and an administration fee of five percent (5%) of the construction budget, which Contractor shall pay directly to Landlord's managing agent to defray said agent's costs for supervision of the construction, except, to the extent Tenant hires Landlord's contractor to perform any tenant improvement work beyond painting the interior walls of the Premises, and/or installing new carpet throughout the Premises (the "Landlord Built Improvements"), then Landlord shall not charge Tenant any administrative fee in connection w_iith the Landlord Built Improvements;

d)   Contractor shall complete all architectural and planning review and obtain all permits including signage, required by the city, state or county in which the Premises are located; and

e) Contractor shall submit to Landlord verification of public liability and workmen's compensation insurance adequate to fully protect Landlord and Tenant from and against any and all Ih^.tbility for death or injury to persons or damage to property caused in, on or about the Premises or the Building from any cause whatsoever arising out completion of the hnprovements or any other work done by Contractor.

f) Landlord and Tenant agree that if the hnprovements are actually constructed by Tenant's Contractor at a cost which is less than the Allowance, 'there shall be no monetary adjustment between Landlord and Tenant and the entire cost savings shall accrue to the benefit of Landlord.

Section 7. Landlord'sAdministration of Construction. Tenant's Contractor and its subcontractors and suppliers shall be subject to Landlord's reasonable administrative control and supervision. Landlord shall provide the Contractor and its subcontractors reasonable access to the Premises so as to timely complete the Improvements; reasonable use of the freight elevators at no cost for the movement of Conttactoes and its subcontractoes materials and laborers; and use of parking spaces in the parking facilities serving the Building at no cost so long as the same are available therefor without disturbing the quiet enjoyment or reasonable access of any other occupant of the Building.

Section 8. Fixed Date for Commencement Date. Tenant acknowledges and agrees that whether or not Tenant has completed construction' of the Improvements, the Conmiencement Date shall be as stated in Section 2.1 of the Lease.

Section 9. Compliance with ConstructionPolicies. During construction of the Improvements, Tenant's Contractor shall adhere to the Construction Policies specified hereinbelow, which represent Landlord's minimum requirements for completion of the Improvements.

CONSTRUCTION POLICY

The following policies outlined are the construction procedures for the Building. As a material consideration to Landlord for granting Landlord's pemdssion to Tenant to complete the construction conteinplated hereunder, Tenant agrees to be bound by and follow the provisions, contained hereinbelow:

Section 10. Administration.

a) Contractors to notify Building Office prior to starting any work. No exceptions. All jobs must be scheduled by the general contractor or sub-contractor when no general contractor is being used.

b) The general contractor is to provide the Building Manager with a copy of the projected work schedule for the suite, prior to the start of construction.

c)   Chntractor will make sure that at least one set of drawings 1.7,111 have the Building Manager's initials approving the plans and a copy delivered to the Building Office.

d)   AS-built construction, including mechanical drawings and air balancing reports will be submitted at the end of each project.

e)  The HVAC contractor is to provide the following items to the Building Manager upon being awarded the contract from the general contractor:

i)   A plan showing the new ducting layout, all supply and return air grille locations and all thermostat locations. The plan sheet should also include the location of any fire dampers.

ii)   An Air Balance Report reflecting the supply air capacity throughout the suite, which is to be given to the Chief Building Engineer at the finish of the HVAC installation.

f) All paint bids should reflect a one-time touch-up paint on all suites. This is to be completed approximately five (5) days after move-in date.

g) The general contractor must provide for the removal of all trash, and debris arising during the course of construction. At no time are the building's trash compactors and/or dumpsters to be used by the general contractor's clean-up crews for the disposal of any trash or debris accumulated during construction. The Building Office assumes no responsibility for bins. Contractor is to monitor and resolve any problems with bin usage without involving the Building Office. Bins are to be emptied on a regular basis and never allowed to overflow. Trash is to be placed in the bin.

h) Centractors will include in their proposals all costs to include: parking, elevator service, additional security (if required), restoration of carpets, etc. Parking will be validated only if contractor is ‘working directly for the Building Office.

37

EXHIBIT B

IMPROVEMENT CONSTRUCTION AGREEMENT (continued)

i) Any problems with construction per the plan, will be brought to the attention of and documented to the Building Manager. Any changes that need additional work not described in the bid will be approved in writing by the Building Manager. All contractors doing work on this project should first verify the scope of work (as stated on the plans) before submitting bids; not after the job has started,

Section 11. Building Facilities Coordination.

a)   All deliveries of material will be made through the parking lot entrance.

b)   Construction materials and equipment will not be stored in any area without prior approval of the Building Manager.

c) Only the freight elevator is to be used by construction personnel and equipment. Under no circumstances are construction personnel with materials andior tools to use the "passenger" elevators.

Section 12. Housekeeping.

a) Stine entrance doors are to remain closed at all times, except when hauling or delivering construction materials.

b) All construction done on the property that requires the use of lobbies or common area corridors will have carpet or other floor protection. The following are the only prescribed methods allowed:

 i) Mylar -- Extra heavy-duty to be taped from the freight elevator to the suite under construction.

ii) Masonite—1/4 inch Panel, Taped to floor and adjoining areas. All corners, edges and joints to have adequate anchoring to provide safe and "trip-free" transitions. Materials to be extra heavy-duty and installed frond freight elevator to the suite under construction.

c) Restroom wash basins will not be used to fill buckets, make pastes, wash brushes, etc. If facilities are required, arrangement for utility closets will be made with the Building Office.

d) Food and related lunch debris arc not to be left in the suite under construction.

e) All areas the general contractor or their sub-contractors work in must be kept clean. All suites the general contractor works in will have construction debris removed prior to completion inspection.

This includes dusting of' all window sills, light diffusers, cleaning of cabinets and sinks. All common areas are to be kept clean of building materials at all times so as to allow tenants access to their suites or the building.

Section 13. Construction Requirements..

a) All Life and Safety and applicable Building Codes will be strictly enforced (i.e., tempered glass. fire dampers, exit signs, smoke detectors, alarms, etc,). Prior coordination with the Buildine. Manager is required.

b) Electric panel schedules must be brought up to date identifying all new circuits added.

c) All electrical outlets and lighting circuits are to be properly identified. Outlets will be labeled on backside of each cover plate.

d)   All electrical and phone closets being used must have panels replaced and doors shut at the end of each day's work. Any electrical closet that is opened with the panel exposed must have a work person present.

e) All electricians, telephone, personnel, etc. will, upon completion of their respective projects, pick up and discard their trash leaving the telephone and electrical rooms clean. If this is not complied with, a clean-up will be conducted by the building janitors and the general contractor will be back-charged fqr this service.

f) Welding  or burning with an open flame will not be done without prior approval of the Building Manager. Fire extinguishers must be on hand at all times.

g) All "anchoring" of walls or supports to the concrete are not to be done during normal working hours (7:30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.

h) All core drilling is not to be done during normal working hours (7:30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.

i) All HVAC work must be inspected by the Building Engineer. The following procedures will be followed by the general contractor:

i) A preliminary inspection of the HVAC work in progress will be scheduled through the Building Office prior to the reinstallation of the ceiling grid.

ii) A second inspection of the HVAC operation will aslo be scheduled through the Building Offcies and will take place with the attendance of the HVAC contractors Air Balance Enineer. This inspection will take place when the suite in question is ready to be air-balanced.

iii) The Building Engineer will inspect the construction on a periodic basis as well.

j) All existing thermostats, ceiling tiles, lighting fixtures and air conditioning grilles shall be saved and turned over to the Building Engineer.

38

EXHIBIT B          

   IMPROVMENT  CONSTRUCTION AGREEMENT (continued)      

Good housekeeping rules and regulations will be strictly enforced. The building office and engineering department will do everything possible to make your job easier. However, contractors who do not observe the construction policy will not be allowed to perform within this building. The cost of repairing any damages that are caused by Tenant or Tenant's contractor during the course of construction shall'be deducted from Tenant's Allowance or Tenant's Security Deposit, as appropriate.

LANDLORD: DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company TENANT: PLATINUM STUDIOS, LLC, a California limited liability company

By:	DOUGLAS, EMMETT AND COMPANY, a California corporation, its agent
By:	/s/ Michael J. Means	By:	/s/ Scott Mitchell Rosenberg
	Michael J. Means		Scott Mitchell Rosenberg
	Vice President	By:	/s/ Brian K. Altounian
Dated:	7/13/06		Center Operating Officer
		Dated:	7/11/06

39

EXHIBIT B-1

CONSTRUCTION BY TENANT DURING TERM

1.Exhibit B governs the performance of the initial Improvements contemplated by Tenant, and among other things entitles Tenant to a reimbursement for the costs of the initial Improvements from proceeds of the Allowance. If, after the completion of the initial Improvements per Exhibit B, Tenant then wishes to make a Tenant Change, as specified in Section 12.12 of the Lease, such Tenant Change shall be completed pursuant to the provisions of Section 12.12 of the Lease and this Exhibit B-I. Tenant shall bear all costs of said Tenant Change, which shall be paid directly to Tenant's general contractor ("Contractor").

2.Contractor shall complete construction to the Premises pursuant to the final Plans and Specifications approved in writing by Landlord and Tenant (the "Tenant Change"), in compliance with all applicable codes and regulations. Tenant's selections of finishes and materials shall be indicated on the Plans and Specifications, and shall be equal to or better than the minimum Building standards and specifications. All Work not shown on the final Plans and Specifications, but which is to be included in the Tenant Change, including but not limited to, telephone service installation, furnishings or cabinetry, shall be installed pursuant to Landlord's reasonable directives.

3. Prior to commencing any work:

a) Tenant's proposed Contractor and the Contractor's proposed subcontractors and suppliers shall be alproved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. As a condition of such approval, so long as the same are reasonably cost competitive, then Contractor shall use Landlord's Heating, Venting, and Air-conditioning, plumbing, and electrical stibcontractors for such work.

b)   During completion of any Tenant Change, neither Tenant or Contractor shall permit any sub­contractors, workmen, laborers, material or equipment to come into or upon the Building if the use thereof, in Landlord's reasonable judgment, would violate Landlord's agreement with any union ilicividing work, labor or services in or about the Building.

c)   Cbntractor shall submit to Landlord and Tenant a written bid for completion of the Tenant Change. Said bid shall include Contractor's overhead, profit, and fees, and, if the proposed Tenant Change is fOr cosmetic work in excess of $20,000 in aggregate value per occurrence or for structural work of any kind, Contractor shall:

i pre-pay to Landlord's managing agent $250.00 as partial payment of said managing a^gent's construction administration fee, as specified hereinbelow, and

ii upon completion of said Tenant Change, pay an administration fee for supervision of said Tenant Change equal to fifty dollars ($50.00) per hour, to a maximum of five percent (5%) of the total 1 cost of the Tenant Change, to defray said agent's costs for supervision of the construction;

4.Tenant or Contractor shall submit all Plans and Specifications to Landlord, and no work on the Premises shall be commenced before Tenant has received Landlord's final written approval thereof, which shall not be unreasonably withheld, delayed or conditioned. In addition, Tenant shall reimburse Landlord for any and all of Landlord's out of pocket costs incurred in reviewing Tenant's plans for any Tenant Change by engaging any third party engineers, contractors, consultants or design specialists or for any Other "peer review" work associated with Landlord's review of Tenant's plans for any Tenant Change. Tenant shall pay such costs to Landlord within five (5) business days after Landlord's delivery to Tenant of a copy of the invoice(s) for such work.

5.Contractor shall complete all architectural and planning review and obtain all permits, including signage, required by the city, state or county in which the Premises arc located; and

6.Contractor shall submit to Landlord verification of public liability and worker's compensation insurance adequate to fully protect Landlord and Tenant from and against any and all liability for death or injury to persons or damaae to property caused in or about or by reason of the construction of any work done by Contractor or Contractor's subcontractors or suppliers.

7.Intentionally Omitted.

8.Contractor and Contractor's subcontractors and suppliers shall be subject to Landlord's reasonable administrative control and supervision. Landlord shall provide Contractor and Contractor's subcontractors and suppliers with reasonable access to the Premises.

9.During construction of the Tenant Change, Contractor shall adhere to the procedures contained hereinbelow, which represent Landlord's minimum requirements for completion of the Tenant Change.

10.Upon completion of the Tenant Change, Tenant shall provide Landlord with such evidence as Landlord may reasonably request that the Contractor has been paid in full, and Contractor shall provide Landlord with hen releases as requested by Landlord, confirmation that no liens have been filed against the POmises or the Building. If any liens arise against the Premises or the Building as a result of the Tenant Change, Tenant shall immediately, at Tenant's sole expense, remove such liens and provide Landlerd evidence that the title to the Building and Premises have been cleared of such liens.

11.Whether or not Tenant or Contractor timely complete the Tenant Change, unless the Lease is otherWise terminated pursuant to the provisions contained therein, Tenant acknowledges and agrees that Tenant's obligations under the Lease to pay Fixed Month/y Rent and/or Additional Rent shall continue unabated.

40

              EXHIBIT B-I                                      

                  CONSTRUCTION BY TENANT DURING TERM              

              

                                           (continued)        

CONSTRUCTION POLICY

The following policies outlined are the construction procedures for the Building. As a material consideration to Landlord for granting Landlord's permission to Tenant to complete the construction contemplated hereunder, Tenant agrees to be bound by and follow the provisions contained hereinbelow:

1. Administration

a) Contractors to notify the management office for the Building prior to starting any work. All jobs must be scheduled by the general contractor or sub-contractor when no general contractor is being used

b)   The general contractor is to provide the Building Manager with a copy of the projected work schedule for the suite, prior:to the start of construction.

c)   Contractor will make sure that at least one set of drawings will have the Building Manager's initials approving the plans and a copy delivered to the Building Office.

d)   As-built construction, including mechanical drawings and air balancing reports will be submitted at the end of each project.

e) The HVAC contractor is to provide the following items to the Building Manager upon being awarded the contract from the general contractor:

i)   A plan showing the new ducting layout, all supply and return air grille locations and all thermostat locations. The plan sheet should also include the location of any fire dampers.

ii)   An Air Balance Report reflecting the supply air capacity throughout the suite, which is to be given to the Chief Building Engineer at the finish of the HVAC installation.

f) All paint bids should reflect a one-time touch-up paint on all suites. This is to be completed approximately five (5) days after move-in date.

g) The general contractor must provide for the removal of all trash and debris arising during the course of construction. At no time are the building's trash compactors and/or dumpsters to be used by the general contractor's clean-up crews for the disposal of any trash or debris accumulated during construction. The Building Office assumes no responsibility for bins. Contractor is to monitor and resolve any problems with bin usage without involving the Building Office. Bins are to be emptied on a regular basis and never allowed to overflow. Trash is to be placed in the bin.

h)   contractors will include in their proposals all costs to include parking, elevator service, additional security (if required), restoration of carpets, etc. Parking will be validated only if contractor is Working directly for the Building Office.

i) Any problems with construction per the plan, will be brought to the attention of and documented to the Building Manager. Any changes that need additional work not described in the bid will be approved in writing by the Building Manager. All contractors doing work on this project should first verify the scope of work (as stated on the plans) before submitting bids; not after the job has started.

2. Building Facilities Coordination

a) All deliveries of material will be made through the parking lot entrance.

b) Construction materials and equipment will not be stored in any area without prior approval of the Building Manager.

c) Only the freight elevator is to be used by construction personnel and equipment. Under no circumstances are construction personnel with materials and/or tools to use the "passenger" clbvators.

3. Housekeeping

a) Suite entrance doors are to remain closed at all times, except when hauling or delivering construction materials.

b) All construction done on the property that requires the use of lobbies or common area corridors will have carpet or other floor protection. The following are the only prescribed methods allowed:

i)   Mylar: Extra heavy-duty to be taped from the freight elevator to the suite under construction.

ii)   Masonite 1/4 inch Panel, Taped to floor and adjoining areas. All corners, edges and joints to have adequate anchoring to provide safe and "trip-free" transitions. Materials to be extra heavy-duty and installed from freight elevator to the suite under construction.

c) Restroom wash basins will not be used to fill buckets, make pastes, wash brushes, etc. If facilities are required, arrangements for utility closets will be made with the Building Office.

d) Food and related lunch debris are not to be left in the suite under construction.

e) All areas the general contractor or their sub-contractors work in must be kept clean. All suites the general contractor works in will have construction debris removed prior to completion inspection. This includes dusting of all window sills, light diffusers, cleaning of cabinets and sinks. All common areas are to be kept clean of building materials at all times so as to allow tenants access to their suites or the building.

41

EXHIBIT B-1         

 CONSTRUCTION BY TENANT DURING TERM 

(continued)       

 4.  Construction Requirements

a) All Life and Safety and applicable Building Codes will be strictly enforced (i.e. tempered glass, fire dampers, exit signs, smoke detectors, alarms, etc). Prior coordination with the Building Manager is required.

b) Electric panel schedules must be brought up to date identifying all new circuits added.

c) All electrical outlets and lighting circuits are to be properly identified. Outlets will be labeled on blick side of each cover plate.

d) All electrical and phone closets being used must have panels replaced and doors shut at the end of each days work. Any electrical closet that is opened with the panel exposed must have a work pOrson present.

e) All electricians, telephone personnel, etc. will upon completion of their respective projects, pick up and discard their trash leaving the telephone and electrical rooms clean. If this is not complied with, a clean-up will be conducted by the building janitors and the general contractor will be back-charged for this service.

f) Welding or burning with an open flame will not be done without prior approval of the Building Manager. Fire extinguishers must be on hand at all times.

g) All "anchoring" of walls or supports to the concrete are not to be done during normal working hours (7-30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.

h)   2⁶11 core drilling is not to be done during normal working hours (7:30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.

i)   All HVAC work must be inspected by the Building Engineer. The following procedures will be fdllowed by the general contractor:

i)   A preliminary inspection of the HVAC work in progress will be scheduled through the Building Office prior to the reinstallation of the ceiling grid.

ii)   A second inspection of the HVAC operation will also be scheduled through the Building Office and will take place with the attendance of the HVAC contractor's Air Balance Engineer. This inspection will take place when the suite in, question is ready to be air-balanced.

iii)  The Building Engineer will inspect the construction on a periodic basis as well.

j)  All existing thermostats, ceiling tiles, lighting fixtures and air conditioning grilles shall be saved and turned over to the Building Engineer.

Good housekeeping rules and regulations will be strictly enforced. The building office and engineering department will do everything possible to make your job easier. However, contractors who do not observe the construction policy will not be allowed to perform within this building. The cost of repairing any damages that are caused by Tenant or Tenant's contractor during the course of construction shall be deducted from Tenant's Allowance or Tenant's Security Deposit, as appropriate.

LANDLORD: DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company TENANT: PLATINUM STUDIOS, LLC, a California limited liability company

By:	DOUGLAS, EMMETT AND COMPANY, a California corporation, its agent
By:	/s/ Michael J. Means	By:	/s/ Scott Mitchell Rosenberg
	Michael J. Means		Scott Mitchell Rosenberg
	Vice President	By:	/s/ Brian K. Altounian
Dated:	7/13/06		Center Operating Officer
		Dated:	7/11/06

42

EXHIBIT C

RULES AND REGULATIONS

BUILDING RULES AND REGULATIONS

1.Access. Tenant and/or Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders shall only use the sidewalks, entrances, lobby(ies), garage(s), elevators, stairways, and public corridors as a means of ingress and egress, and shall take such actions as may reasonably be necessary to ensure that the same remain unobstructed at all times.

The entrance and exit doors to the Premises are to be kept closed at all times except as required for orderly passage to and from the Premises. Except on balconies available for the joint or exclusive use of Tenant as otherwise specified hereinabove, Tenant shall not permit its agents, clients, contractors, dircctors, employees, invitees, licensees, officers, partners or shareholders to loiter in any part of the Building or obstruct any means of ingressor egress. Tenant shall not cover any doors, and shall not cover_, any window, other than with vertical or mini-blinds pre-approved in writing by Landlord. Landlord specifically disapproves the installation of any film or foil covering whatsoever on the windbws of the Premises.

Neither Tenant, nor its agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders shall, go up on the roof or onto any balcony serving the Building, except upon such roof, portion thereof, or balcony as may be contiguous to the Premises and is designated in writing by Lndlord as a roof-deck, roof-garden area, or exclusive use balcony area.

2.Restroom Facilities. The toilet rooms, toilets, urinals, wash bowls and other apparatus (the "Restroom Facilities"), whether contained in the common areas of the Building and/or the interior of the Premises, shall not be used for any puipose other than that for which they were designed. Tenant shall not permit its agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders to throw foreign substances of any kind whatsoever or papers not specifically designated for use in the Restroom facilities down any toilet, or to dispose of the same in any way not in keeping with the instructions provided to Tenant by the management of the Building regarding same, and Tenant hereby specifically agrees to reimburse Landlord directly for the expense of any breakage, stoppage or damage resulting from Tenant's violation of this rule.

3.Heavy Equipment. Landlord reserves the right, in Landlord's sole discretion, to decline, limit or designate the location for installation of any safes, other unusually heavy, or unusually large objects to be used or brought into the Premises or the Building. In each case where Tenant requests installation of one Or more such unusually heavy item(s), which request shall be conclusively evidenced by Tenant's effort', to bring such item(s) into the Building or Premises, Tenant shall reimburse Landlord for the costs of any engineering or structural analysis required by Landlord in connection therewith. In all cases, each such heavy object shall be placed on a metal stand or metal plates or such other mounting detail of such size as shall be prescribed by Landlord.

Tenant hereby indemnifies Landlord against any damage or injury done to persons, places, things or the Building or its common areas when such damage or injury primarily arises out of Tenant's installation or use of one or more unusually heavy objects. Tenant further agrees to reimburse Landlord for th'e costs of repair of any damage done to the Building or property therein by putting in. taking out, or maintaining such safes or other unusually heavy objects.

4.'Transportation of Freight. Except as otherwise agreed to by Landlord in writing, Tenant or Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders shall only^.carry freight, furniture or bulky materials in or out of the Building before or after Normal Business Hours, (as that term is defined in Section 8.1 of the Lease). Tenant may only install and/or move such freight, furniture or bulky material after previous written notice of its intention to complete such a move, given to the Office of the Building. The persons and/or company employed by Tenant for such work must be professional movers, reasonably acceptable to Landlord, and said movers must provide Landlord with a certificate of insurance evidencing the existence of worker's compensation and all risk liability coverage in a minimum•amount of 52 000 000.

Tenant may, subject to the provisions of the immediately preceding paragraph, move freight. furniture,, bulky matter and other material in or out of the Premises on Saturdays between the hours of 8:00 and 6:00 P.M., provided that Tenant pays in advance for Landlord's reasonably anticipated additional costs, if any, for elevator operators, security guards and other expenses arising by reason of such move by Tenant.

5.Flammable Materials. Except for such limited quantities of office materials and supplies as are custoniarily utilized in Tenant's normal business operations, Tenant shall not use or keep in the Premises or the Building any kerosene, gasoline, flammable or combustible fluid or material, other than those limited quantities of normal business operating materials as may reasonably be necessary for the operation or maintenance of office equipment. Nor shall Tenant keep or bring into the Premises or the Building any other toxic or hazardous material specifically disallowed pursuant to California state law.

6.Cooking /Odors / Nuisances. Tenant shall not permit its agents, clients, contractors, directors,  employees, invitees, licensees, officers, partners or sharehblders to engage in the preparation and/or serving of foods unless the Premises includes a self-contained kitchen area. Nor shall Tenant permit the odors arising from such cooking, or any other improper noises, vibrations, or odors to be emanate from the Premises. Tenant shall not obtain for use in the Premises, ice, drinking water, food, beverage, towel or othbr similar services except at such reasonable hours and under such reasonable regulations as may be specified by Landlord.

43

    EXHIBT C

             RULES AND REGULATIONS

                          (continued)              

Tenant hereby agrees to instruct all persons entering the Premises to comply with the requirements of the 13uilding, by advising all persons entering the Premises that smoking of any tobacco or other substance is prohibited at all times, except in such common areas located outside the Building as may be designated by the Building management.

Tenant shall not permit Tenant's agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders to interfere in any way with other tenants of the Building or withⁱthose having business with them.

Tenant shall not pennit its agents, clients, contractors, directors, employees, invitees, licensees, officⁱers, partners or shareholders to bring or keep, within the Building any animal, bird or bicycle, except such seeing-eye dog or other disability assistance type animal as may comply with the requirements of any handicapped ordinances having jurisdiction therefor.

Tenant shall store its trash and garbage within the Premises. No material shall be placed in the trash boxes or receptacles if such material is a hazardous waste or toxic substance or is of such a nature that its disposal in Landlord's ordinary and customary manner of removing and disposing of trash and garbage would be a violation of any law, ordinance or company regulation governing such disposal. All garbage and refuse disposal shall be made only through entry ways and elevators provided for such purposes and at, such times as Landlord shall designate. As and when directed by Landlord and/or if required by any governmental agency having jurisdiction therelbr, Tenant shall comply with all directives for recycling and separation of trash.

Tenant shall not employ any person to do janitorial work in any part of the Premises without the prior^l_iwritten consent of Landlord, which consent may be withheld in Landlord's sole discretion.

Landlord reserves the right,to exclude or expel from the Building any person who in Landlord's sole discretion is intoxicated or under the influence of liquor or drugs or who, in any manner, engages in any act in violation of the Rules and Regulations of the Building.

Tenant shall not conduct any public or private auction, fire sale or other sale of Tenant's personal property, furniture, fixtures or equipment or any other property located in or upon the Premises, without Landlord's prior written consent, which consent shall be in Landlord's sole discretion.

7.Storage.Tenant may only store goods, wares, or merchandise on or in the Premises in areas specifically designated by Landlord for such storage.

8.Directives to Management.Tenant's requirements, other than those Landlord specifically agrees to perform elsewhere in this Leas; shall only be attended to upon the Building management's receipt of Tenant's written request therefor. Landlord's employees shall not perform any work or do anything outside of their regular duties unless under special instruction from the Building management. No security guard, janitor or engineer or other employee of the Building management shall admit any person (Tenant or otherwise) to the Premises without specific instructions from the Office of the Building and written authorization for such admittance from Tenant.

9.Keys, and Locks.Landlord shall furnish Tenant with two keys to each door lock existing in the Premises. Tenant shall reimburse Landlord a reasonable charge for these and any additional keys. Tenant shall not be permitted to have keys mad; nor shall Tenant alter any lock or install a new or additional lock or bolts on any door of the Premises without Landlord's prior written consent. Tenant shall,in each case, furnish Landlord with a key for any additional lock installed or changed by Tenant or Tenant's agent(s). Tenant, upon the expiration or earlier termination of this Lease, shall deliver to Landlord all keys in the possession of Tenant or Tenant's agents, clients, contractors, directors, empleyees, invitees, licensees, officers, partners or shareholders, for doors in the Building, whether or not furnished to Tenant by Landlord. If Tenant, or Tenant's agents, clients, contractors, directors, employees, invitees, licensees; officers, partners or shareholders, lose or misplace any key(s) to the Building, Landlord shall, in Landlord's sole discretion, either replace said key(s) or re-key such locks as may be affected thereby, and Tenant shall reimburse Landlord for all such costs of such re-keying and/or replacement.

10.Solicitation.Tenant and/or its agents, clients, contractors, directors, employees, invitees, licensees, officers, partners or shareholders shall not permit any canvassing, peddling, soliciting and/or distribution of handbills or any other written materials to occur in the Premises and/or the Building, nor shall Tenant or Tcnant's agents, clients, contractors, directors, employees, invitees, licensees, officers. partners or shareholders engage in such solicitation or distribution activities.

11.Retail.Sales, Services and Manufacturing Prohibited. Except with the prior written consent of Landlord, Tenant shall not sell, or permit the retail sale of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the Premises, nor shall Tenant carry On or permit or allow any employee or other person to carry on the independent business of stenography, typewriting or any similar business in or from the Premises for the service or accommodation of other occupants of any other portion of the Building. Tenant shall not pennit the PremiSes to be used for manufacturing or for any illegal activity of any kind, or for any business or activitY other than for Tenant's specific use.

12.Changein Name or Address. Landlord shall have the right, exercisable without notice and without liability to Tenant, to change the name and street address of the Building.

44

EXHIBIT C

RULES AND REGULATIONS

                    (continued)              

13.Projections from Premises. Tenant shall not install any radio or television antenna, loudspeaker or °theⁱr device on the roof or the exterior walls of the Building or in any area projecting outside the interior wall^/s of the Premises. Tenant shall not install or permit to be installed any awnings, air conditioning units or other projections, without the prior written consent of Landlord.

14.Superiority of Lease. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the covenants, agreements or provisions of this Lease. If a ^lconflict or disagreement between the Lease and these Rules becomes apparent, this Lease shall prevail.

15. Changes to Rules and Regulations. Provided such changes do not materially harm Tenant's ability to conduct its normal business operations, Landlord shall retain the right to change, add or rescind any rule or regulation contained herein, or to make such other and further reasonable and non-discriminatory Rules and Regulations as in Landlord's sole judgment may, from time to time, become necessary for the management, safety, care and cleanliness of the Premises, the Building or the Parking Facilities, or for the preservation of good order therein, or for the convenience of other occupants and tenants therein, so longlas such rescission, addition, deletion or change is thereafter reasonably applied to all occupants of the Building affected thereby.

PARKING RULES AND REGULATIONS

A. Tenantshall strictly comply with all posted speed limits, directional signs, yield signs, stops signs and all other signs within or about the parking facilities.

B. Tenant shall register all vehicle license plate numbers with the Building management.

0 0

C. Tenantshall be responsible for the cost of repairing any damage to the parking facilities or cleaning any debris created or left by Tenant, including, without limitation, oil leakage from motor vehicles parked in the parking facilities under its auspices.

D. Landlord, in addition to reserving the right to designate one or more areas solely for visitor parking, wItch areas may be changed by Landlord from time to time with or without prior notice to Tenant, reserves the right to allocate additional visitor spaces on any floor of the parking facilities. Tenant stiall not park any vehicles in any spaces designated as visitor only spaces or customer spaces within the parking facilities.

E.   Tenant shall strictly comply with all rules, regulations, ordinances, speed limits, and statutes affecting handicapped parking andior access, and shall not park any vehicles within the fire lanes, along, parking curbs or in striped areas.

F.   Tenant shall only use the number of parking permits allocated to it and shall not permit more than one of its employees to utilize the same parking permit. Landlord reserves the right to assign or re­aSsign parking spaces within the Parking facilities to Tenant from time to time, and provided Landlord is required to do so by reason of any action arising out of a governmental mandate imposed on Landlord, Landlord further reserves the right at any time to substitute an equivalent number of parking spaces in a parking facilities or subterranean or surface parking facility within a reasonable distance of the Premises.

G.   Except with Landlord's managing agent(s)' prior written consent, Tenant shall not leave vehicles in the parking facilities overnight, nor park any vehicles in the parking, facilities other than automobiles, Motorcycles, motor-driven'-or non-motor-driven bicycles or four-wheeled trucks or vans. Landlord may, in its sole discretion, designate separate areas for bicycles and motorcycles. Tenant shall ensure that vehicles parking in the parking facilities by using the parking permits assigned to Tenant shall be parked entirely within the striped lines designating "a single space and are not so situated or of such a width or length as to impede access to or egress from vehicles parked in adjacent areas or doors or loading docks. Further, all vehicles utilizing Tenant's parking permits shall not be higher than any height limitation that may be posted, or of such a size, weight or dimension so that entry of such vehicle into the parking facilities would cause any damage or injury thereto.

H.   Tenant shall not allow any of the vehicles parked using Tenant's permits, or the vehicles of any of Tenant's suppliers, shippers, customers or invitees to be loaded or unloaded in any area other than those specifically designated by Landlord for loading.

I. Tenant shall not use or occupy the parking'facilities in any manner which will unreasonably interfere with the use of the parking facilities by other tenants or occupants of the Building. Without limitation, Tenant agrees to promptly turn off any vehicle alarm system activated and sounding an alarm in the parking facilities. In the event said alarm system fails to turn off and no longer sound an intruder alert fifteen (15) minutes after commencing such an alarm, Landlord shall reserve the right tolremove the vehicle from the parking facilities at Tenant's sole expense.

J.   Tenant acknowledges that the Rules and Regulations as posted herein shall be in effect twenty-four hOurs per day, seven days per week, without exception.

K.   Tenant acknowledges that the uniformed guard officers and parking attendants serving the parking faeilities are authorized to issue verbal and written warnings of Tenant's violations of any of the rules and regulations contained herein. Except in the case, of a car alarm continuing to sound in excess of a maximum of fifteen minutes, in which case no further notice by Landlord shall be required. If Tenant or Tenant's agents, contractors, directors, employees, officers, partners or shareholders continue to materially breach these rules and regulations after expiration of written notice and the opportunity to cure has been given to Tenant, then in addition to such other remedies and request for injunctive relief it may have Landlord shall have the right, without additional notice, to remove or tow away the vehicle involved and store the same, all costs of which shall be borne exclusively by Tenant and/or revoke Tenant's parking privileges and rights under the Lease.

45

EXHIBIT 

                RULES AND REGULATIONS (continued)              

LANDLORD: DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company TENANT: PLATINUM STUDIOS, LLC, a California limited liability company

By:	DOUGLAS, EMMETT AND COMPANY, a California corporation, its agent
By:	/s/ Michael J. Means	By:	/s/ Scott Mitchell Rosenberg
	Michael J. Means		Scott Mitchell Rosenberg
	Vice President	By:	/s/ Brian K. Altounian
Dated:	7/13/06		Center Operating Officer
		Dated:	7/11/06

46

EXHIBIT E

GUARANTY OF LEASE

THIS GUARANTY OF LEASE ("Guaranty") is made by Scott Mitchell Rosenberg, an individual and Brian K. Altounian, an individual (jointly and severally, "Guarantor") in favor of DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company ("Landlord") in connection with that certain lease dated July 10, 2006, (the "Lease") pursuant to which Landlord leases to PLATINUM STUDIOS, LLC, a California limited liability company ("Tenant") those premises generally located at 11400 West OlyMpic Boulevard, Suite 1400, Los Angeles, California 90064 (the "Premises") and more particularly described in the Lease. As a material inducement to and in consideration of Landlord entering into the LeaSe, Landlord having indicated that it would not enter into the Lease without the execution of this Gua'ranty, Guarantor does hereby agree with Landlord as follows:

1. Guarantor does hereby, jointly, severally, unconditionally and irrevocably guarantee and be liable fur any and all obligations and liabilities of Tenant under the terms of the Lease, subject to the limitation set forth in Paraaraph 20 below. Upon Tenant's delivery- of the Letter of Credit in accordance with Article 23 of the Lease, this Guaranty shall be void and of no further force or effect.

2. Guarantor does hereby agree that, without the consent of or notice to Guarantor and without affecting any of the obligations of Guarantor hereunder: (a) any term, covenant or condition of the Lease may be amended, compromised, released or otherwise altered by Landlord and Tenant, and Guarantor does guarantee and promise to perform all the obligations of Tenant under the Lease as so amended, compromised, released or altered; (b) any guarantor of or party to the Lease may be released, substituted or added; (c) any right or remedy under the Lease may be exercised, not exercised, iMpaired, modified, limited, destroyed or suspended; (d) Landlord or any other person acting on Landlord's behalf may deal in any manner with Tenant, any guarantor, any party to the Lease or any Other person; and (e) all or any part of the Premises or of Tenant's rights or liabilities under the Lease maybe sublet, assigned or assumed.

3.   The obligations of Guarantor hereunder are in addition to and independent of the obligations of Tenant. A separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Tenant or whether Tenant is joined in any such action or actions. Guarantor hereby waives and agrees not to assert or take advantage of: (a) any right to require Landlord to proceed against or exhaust any security held from Tenant or any other person; (b) any right to require Landlord to proceed against Tenant or any other person or to pursue any other remedy before proceeding against Guarantor; (c) the defense of any statute of limitations in any action under or related to this Guaranty or the Lease; (d) any right or defense that may arise by reason of the incapacity, lack of authority, death or disability of Tenant or any other person; and (e) any right or defense arising by reason of the absence, impairment, modification, limitation, destruction or cessation (ill banla-uptcy, by an election of remedies, or othenvise) of the liability of Tenant, of the sUbrogation rights of Guarantor or of the right of Guarantor to proceed against Tenant for reimbursement. Without in any manner limiting the generality of the foregoing, Guarantor hereby waives the benefits of the provisions of Sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433, the second sentence of Section 2822(a) and all rights that are waivable pursuant to Section 2856, all of the California Civil Code, and any similar or analogous statutes of California or any other jurisdiction.

4.   Guarantor hereby waives and agrees not to assert or take advantage of any right or defense based on the absence of any or all presentments, demands (including demands for performance), notices (including notices of adverse change in the financial status of Tenant or other facts which increase the risk to Guarantor, notices of non-performance and notices of acceptance of this Guaranty) and protests of each and every kind.

5.   Until all Tenant's obligations under the Lease are fully performed, Guarantor: (a) shall have no right of subrogation against the Tenant by reason of any payments or acts of performance by Guarantor under this Guaranty, and (b) subordinates any liability or indebtedness of Tenant now or hereafter held by Guarantor to the obligations of Tenant under, arising out of or related to the Lease or Tenant's use or occupancy of the Premises.

6.   The liability of Guarantor and all rights, powers and remedies of Landlord hereunder and under any other agreement now or at any time hereafter in force between Landlord and Guarantor relating to the Lease shall be cumulative and not alternative and such, rights, powers and remedies shall be in addition to all rights, powers and remedies given to Landlord by law.

7.   This Guaranty applies to, inures to the benefit:of and binds all parties hereto, their heirs, devisees, legatees, executors, administrators, representatives, successors and assigns (including any purchaser at' a judicial foreclosure or trustee's sale or a holder of a deed in lieu thereof). This Guaranty may be assigned by Landlord voluntarily or by operation of law.

8.   Guarantor agrees from'time to time upon Landlord's request, but not more than once in any 12 month period, to deliver to Landlord Guarantor's financial statement. All financial statements heretofore delivered to Landlord by Guarantor are, and all financial statements hereafter delivered to Landlord by Guarantor will be, true and correct in all material respects and fair presentations of the financial condition of Guarantor as of the date thereof, prepared in accordance with generally accepted accounting practices. No material adverse change has occurred in the financial condition of Guarantor since the date of the financial statements heretofore delivered to Landlord.

47

                               EXHIBIT E              

                GUARANTY OF LEASE (continued)              

            

9.   Guarantor shall not, without the prior written consent of Landlord, commence, or join with any other person in commencing, any bankruptcy, reorganization or insolvency proceeding against Tenant. The obligations of Guarantor under this Guaranty shall not be altered, limited or affected by any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, eorganization, liquidation or arrangement of Tenant, or by any defense which Tenant may have by reason of any order, decree or decision of any court or administrative body resulting from any such proceeding. Guarantor shall file in any bankruptcy or other proceeding in which the filing of claims is required or permitted by law all claims which Guarantor may have against Tenant relating to any indebtedness of Tenant to Guarantor and will assign to Landlord all rights of Guarantor thereunder. Landlord shall have the sole right to accept or reject any plan proposed in such proceeding and to take any other action which a party filing a claim is entitled to do. In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to Landlord the amount payable on such claim and, to the full extent necessary for that purpose, Guarantor hereby assigns to Landlord all of Guarantor's rights to any such payments or distributions to which Guarantor would othenvise be entitled; provided, however, that Guarantor's obligations hereunder shall not be satisfied except to the extent that Landlord receives cash by reason of any Such payment or distribution. If Landlord receives anything hereunder other than cash, the same Shall be held as collateral for amounts due under this Guaranty.

10.   This Guaranty shall constitute the entire ageement between Guarantor and the Landlord with respect to the subject matter hereof. No provision of this Guaranty or right of Landlord hereunder may be waived nor may any Guarantor be released from any obligation hereunder except by a writing duly executed by an authorized officer or director of Landlord.

11.   If more than one person signs this Guaranty, each such person shall be deemed a Guarantor and the obligation of all such Guarantors shall be joint and several. When the context and construction so requires, all words used in the singular herein shall be deemed to have been used in the plural. The Word "person" as used herein shall include an individual, company, firm, association, partnersh:p, corporation, trust or other legal entity of any kind whatsoever.

12.   Should any one or more provisions of this Guaranty be determined to be illegal or unenforceable, all Other provisions shall nevertheless be effective.

13.   The waiver or failure to enforce any provision of this Guaranty shall not operate as a waiver of any other brcach of such provision or any other provisions hereof.

14.   If either party hereto participates in an action against the other party arising out of or in connection with this Guaranty, the prevailing party shall be entitled to have and recover from the other party actual attorneys' fees, collection costs and other costs incurred in and in preparation for the action. in addition to the foregoing award of attorneys' fees, the ultimately successful party shall be entitled to its actual attorneys' fees incurred in any post: judgment proceedings to collect or enforce the jUdgment. This provision is separate and several and shall survive the merger of this Guaranty into any judgment on this Guaranty. In any action or proceeding arising under this Guaranty, Guarantor consents to trial without a jury.

15.   Time is strictly of the essence under this Guaranty and any amendment, modification or revision hereof.

16.   If Guarantor is a corporation, each individual executing this Guaranty on behalf of said corporation rePresents and warrants that he is duly authorized to execute and, deliver this Guaranty on behalf of said corporation, in accordance with a duly adopted resolution of the board of directors of said corporation or in accordance with the bylaws of said corporation, and that this Guaranty is binding upon said corporation in accordance with its terms. If Guarantor is a corporation. Landlord, at its option, may require Guarantor to concurrently, with the execution of this Guaranty, deliver to Landlord a certified copy of a resolution of the board of directors of said corporation authorizing or ratifying the execution of this Guaranty.

17.   The term "Landlord" whenever hereinabove used refers to and means the Landlord in the foregoing Lease specifically named and also any assignee of said Landlord, whether by outright assignment or by assignment for security, and also any successor to the interest of said Landlord or of any assignee of such Lease or any part thereof, whether by assignment or otherwise. The term "Tenant" whenever hereinahove used refers to and means the Tenant in the foregoing Lease specifically named and also any assignee or subtenant of said Lease and also any successor to the interests of said Tenant, assignee or sublessee of such Lease or any part thereof, whether by assignment, sublease or otherwise.

18.   Any notice, request, demand, or other communication hereunder shall be in writing and shall be considered duly given or furnished when:

a.  delivered personally or by messenger or overnight delivery service, with signature evidencing such delivery;

b. upon the date of delivery, after being mailed in a postpaid envelope, sent certified mail, return receipt requested, when addressed to Landlord as set forth below and to Guarantor as set forth below; or to such other address or addressee as either party may designate by a written notice given pursuant hereto; or

48

EXHIBIT E

1c. upon confirmation of good shall have been provided in transmission if sent via faeSimile machine to such phone number as writing by Landlord or Guarantor, one to the other:

GUARANTOR: Suitt Mitchell Rosenberg 5523 Villawood Circle Cafabasas, CA 91302   Brian K. Altounian 2786 Monte Mar Terrace Los; Angeles, CA 90064 LANDLORD: c/o Douglas Emmett and Company 808 Wilshire Boulevard, Suite 200 Santa Monica, California 90401 Attn: Director of Property Management

19.  As a further material part of the consideration to Landlord to enter into the Lease with Tenant, Guarantor agrees:

a.   The law of the State of California shall govern all questions with, respect to the Guaranty;

b.   Any suit, action or proceeding arising directly or indirectly from the Guaranty, the Lease or the subject matter thereof shall be litigated only in courts located within the County of Los Angeles and the State of California

c.   Guarantor 'hereby irrevocably consents to the jurisdiction of any local, state or federal court located within the County of Los Angeles and the State of California;

d.   Guarantor hereby waives personal service of any and all process upon it and consents to all such service of process in the manner and at the address set forth in Paragraph 18 above; and

e.   Without limiting the generality of the foregoing, Guarantor hereby waives and auees not to assert by way of motion, defense or otherwise in'any suit, action or proceeding any claim that Guarantor is not personally subject to the jurisdiction of the above-named courts, that such suits, action or proceeding is brought in an inconvenient forum or that the venue of such action, suit or proceeding is improper.

20.  Maximum Liability Amount. Notwithstanding any other provisions herein to the contrary, the aggregate liability of the undersigned for obligations and liabilities of Tenant under the Lease shall not exceed the Maximum Liability Amount (as defined below) in effect at the time the liability arises or is incurred, plus costs of enforcement of this Guaranty. The term "Maximum Liability Amount." means the amount of $336,000.00.

Executed on this day 11th of June, 2006
	Guarantor
	By:	/s/ Scott Mitchell Rosenberg
		Scott Michell Rosenberg, an individual
	By:	/s/ Brian K. Altounian
		Brian K. Altounian an individual
	Dated:	7/11/06

49

STATE OF CALIFORNIA)

                   ) SS:

COUNTY OF LOS ANGELES)

On July 11, 2006 , before me, Lora Ball, a Notary Public, personally appeared Scott Mitchell Rosenberg, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

By:	/s/ Lora Ball
	Lora Ball
	Notary public

On, before me, Lora Ball, a Notary Public, personally appeared Brian K. Altounian, personally known to me (or proved to me on the basis or satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acicnowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their simiature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

By:	/s/ Lora Ball
	Lora Ball
	Notary Public

50

EXHIBIT G 

FORM OF LETTER OF CREDIT

[BANK LETTERHEAD]

Attention: Rita Silver, Controller

DOUGLAS EMMETT 1995, LLC

c/o Douglas, Emmett and Company

 808 Wilshire Boulevard, Suite 200

 Santa Monica. California 90401

 Letter of Credit No.

Ladies and Gentlemen:

1 We hereby establish our Irrevocable Letter of Credit and authorize you to draw on us at sight for the abcount of PLATINUM STUDIOS, LLC, a California limited liability company ("Applicant") the aggregate amount of THREE HUNDRED AND THIRTY-Sa. THOUSAND DOLLARS (S336,000.00).

Funds under this Letter of Credit are available to the beneficiary hereof as follows:

Any and all of the sums hereunder may be drawn down at any time and from time to time from and after the date hereof by DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company ("Belieficiary") when accompanied by this Letter of Credit and a written statement signed by an authorized signatory of Beneficiary, certifying that Beneficiary is entitled to make such drawing pursuant to the Lease, together with a notarized certification by any such individual representing that such individual is authorized by Beneficiary to take such action on behalf of Beneficiary, and a sight draft executed and endorsed by such individual. The sums drawn by Beneficiary under this Letter of Credit shall be payable upon demand without necessity of notice.

This Letter of Credit is transferable in its entirety, without any limitation on the number of such transfers. Should a transfer be desired, such transfer will be subject to the return to use of this advice, touether with written instructions.

1 The amount of each draft must be endorsed on the reverse hereof by the negotiating bank. We herebY agree that this Letter of Credit shall be duly honored upon presentation and delivery of the certification specified above.

This Letter of Credit is effective immediately and shall expire at 5:00 P.M., Pacific Standard Time on(the "Expiration Date").

I Notwithstanding the above expiration of this Letter of Credit, the term of this Letter of Credit shall be automatically renewed for successive, additional one (1) year periods (with the last such one (1) year period expiring no earlier than sixty (60) days after the expiration date of that certain Office Lease dated , (the "Lease') by and between Applicant, as Tenant, and Beneficiary, as

Landlord), unless, at least thirty (30) days prior to any such date of expiration, the undersigned shall give written notice to Beneficiary, by certified mail, return receipt requested and at the address set forth above or at such other address as may be given to the undersigned by Beneficiary, that this Letter of Credit will not be renewed; it being understood that if the Applicant fails to maintain the Letter of Credit in the amount and in accordance with the terms of the Lease, Beneficiary shall have the right to present the Letter of Credit to us for payment.

Our obligation under this Letter of Credit shall not be affected by any circumstances, claim or defense, real or personal, of any party as to the enforceability of the Lease between Beneficiary and AppliOnt or the validity of Beneficiary's claim, it being understood that our obligation shall be that of a primary obligor and not that of a surety, guarantor or accommodation maker.

Applicant shall pay all costs of or in connection with this Letter of Credit, including without limitation, any fees associated with only the first transfer or assignment of this Letter of Credit by the Beneficiary during the Lease Term.

This Letter of Credit is governed by the Uniform Customs and Practice for Documentary Credits (1993) Revision), International Chamber of Commerce publication 500.

This Letter of Credit sets forth in full the terms of our undertaking, and such terms shall not in any way be modified, amended, limited, discharged, or terminated except by a writing signed by authorized representatives of Beneficiary and the undersigned on or before the Expiration Date.

	Very truly yours,
	Company Name
Date	By:
		Name
		Title

51

EXHIBIT H

RECORDING REQUESTED

BY AND WHEN RECORDED RETURN TO:

EUROHYPO AG

1114 Avenue of the Americas

29^th Floor

Newi York, New York 10036

Attention: Alice Ha

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

(Lease)

THIS AGREEMENT made July 10, 2006, between EUROHYPO AG, New York Branch, as Adrriinistrative Agent on behalf of a syndicate of lenders (collectively, the "Lenders"), having an office at 1114 Avenue of the Americas, New York, New York 10036 (the "Mortgagee"), and PLATINUM STUDIOS, LLC, a California limited liability company having an office at (the "Tenant");

WITNESSETH:

WHEREAS the Mortgagee (on behalf of the Lenders) is the present owner and holder of a certain mortgage, mortgages, deed of trust or deeds of trust (the "Mortgage) encumbering the premises located in, the County of Los Angeles, City and State of Los Angeles, CA, known as 11400 West Olympic Boulevard, Suite 1400, Los Angeles, California 90064 the "Premises") which Premises are more fully described in the attached Exhibit A;

WHEREAS the Tenant is the holder of a leasehold estate in a portion of the Premises under and pursuant to the provisions of a certain lease (the "Lease") dated July 10, 2006 by and between Tenant and DOUGLAS EMMETT 1995, LLC, a Delaware limited liability company (the "Landlord'); and

WHEREAS the Tenant has agreed to subordinate the Lease to the Mortgage and to the lien thereof and the Mortgagee has agreed to grant non-disturbance to the Tenant under the Lease on the tennS and conditions hereinafter set forth;

NOW THEREFORE, in consideration of good and valuable consideration, the receipt of which is hereby acknowledged, the Mortgagee and the Tenant hereby covenant and agree as follows:

1: The Tenant agrees that the Lease and all of the terms, covenants and provisions thereof and all right, remedies and options of the Tenant thereunder are and shall at all times continue to be subject and subordinate in all respects to the Mortgage and all of the terms, covenants and provisions thereof and to the lien thereof and to any and all increases, renewals, modifications, spreaders, consolidations, replacements and extensions thereof and to any and all sums secured thereby, with the same force and effect; as if the Mortgage had been executed, delivered and recorded prior to the execution and delivery of the Lease.

2., The Mortgagee agrees that if any action or proceeding is commenced by the Mortgagee to foreclose the Mortgage or to sell the Premises, the Tenant shall not be named as a party in any such action nor shall the Tenant be named a party in connection with any sale of the Premises, provided that at theltime of the commencement of any such action or proceeding or at the time of any such sale (i) the term of the Lease shall have commenced pursuant to the provisions thereof, (ii) the Lease shall be in full force and effect, and (iii) the Tenant shall not be in default under any of the terms, covenants or conditions of the Lease or of this Agreement on the part of the Tenant to be observed or performed thereunder or hereunder after the expiration of any applicable notice or cure period, unless applicable law requires the Tenant to be made a party thereto as a condition to proceeding against the Landlord or protecting such rights and remedies. In the latter case, the Mortgagee may join the Tenant as a defendant in such action only for such purposes and not to terminate the Lease.

3. The Tenant aurees that if the Mortgagee or any successors in interest to the Mortgagee shall become the owner of the Premises by reason of the foreclosure of the Mortgage or the acceptance of a deed Or assignment in lieu of foreclosure or otherwise, the Lease shall not be terminated or affected thereby but shall continue in full force and effect as a direct lease between the Mortgagee and the Tenant uponlall of the terms, covenants and conditions set forth in the Lease and in that event the Tenant agrees to adorn to the Mortgagee and the Mortgagee agrees to accept such attornment, provided, however, that the Mortgagee shall not be (i) liable for any accrued obligation of the Landlord, or for any act or omission of the Landlord, except to the extent the same pertains to a failure to repair or maintain and then only to the extent such failure continues for more than thirty (30) days, after Mortgage obtains possession and control over the Premises, (ii) subject to any offsets, claims or counterclaims which shall have accrued to the Tenant against the Landlord prior to the date on which the Mortgagee or its successor in interest shall become the owner of the Premises or (iii) liable for any security deposit or otherlmonies not actually received by the Mortgagee.

52

EXHIBIT H 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT (continued)

4. Without the prior written consent of Mortgagee, Mortgagee shall not be bound by (i) any agreement amending, or modifying the Lease unless executed to document the exercise of a specific right (other than a lease termination) under the Lease; or (ii) terminating the Lease or (ii) by any prepayment of the rents, additional rents or other sums due under the Lease'for more than one (1) month in adVance of the due date thereof

5. The Tenant hereby represents and warrants to the Mortgagee that as of the date hereof (i) the Tenant is the owner and holder of the tenant's interest under the Lease, (ii) the Lease has not been modified or amended, (iii) the Lease is in full force and effect and the term thereof is due to commence on September 1, 2006 pursuant to the provisions thereof, (iv) neither the Tenant nor the Landlord is in default under any of the terms, covenants or provisions of the Lease and the Tenant to the best of its knowledge knows of no event which but for the passage of time or the giving of notice or both would constitute an event of default by the Tenant or the Landlord under the Lease, (v) neither the Tenant nor the Landlord has commenced any action or given or received any notice for the purpose of terminating the Lease, (vi) all rents, additional rents and other sums due and payable under the Lease have been paid in full and no rents, additional rents or other sums payable under the Lease have been paid for more than one (1) month in advance of the due dates thereof, (vii) there are no offsets or defenses to the payment of the rents, additional rents, or other sums payable under the Lease and (viii) Tenant has received no notice of a prior assignment, hypothecation or pledge of the Lease or the rents, income, deposits or profits arising thereunder, other than in connection with the Mortgage.

6. Notwithstanding anything to the contrary in the Lease, Tenant shall not commence any action against Landlord or otherwise pursue any right or remedy against Landlord in consequence of a default by Landlord under the terms and provisions of the Lease unless written notice by Tenant specifying such default is delivered to Mortgagee at its address set forth below. Tenant further agrees that Mortgagee shall have the right, but shall not be obl_igated, to cure such default on behalf of Landlord within thirty (30) days after receipt of such notice, or if such default cannot reasonably be cured in such 30-day period, Mortgagee shall have the right to commence the cure of such default in such 30-day period and thereafter diligently pursue such cure until completed. Tenant further agrees not to invoke any of its remedies either express or implied, under the Lease (except in the case of emergency repairs) unless such default shall remain uncured at the expiration of the 30-day period after receipt of such notice of default, or if such default cannot reasonably be cured in such 30-day period, unless the cure of such default shall not be commenced within such 30-day period and thereafter prosecuted diligently to completion..

7.  Anything herein or in the Lease to the contrary notwithstanding, in the event that the Mort^gagee shall acquire title to the Premises, or shall otherwise become liable for any obligations of the Landlord under; the Lease, the Mortgagee shall have ano obligation, nor incur any liability, beyond the Mortgagee's then interest, if any, in the Premises and the Tenant shall look exclusively to such interest of the Mortgagee, if any, in the Premises for the payment and discharge of any obligations imposed upon the Mortgagee hereunder or under the Lease and the Mortgagee is hereby released or relieved of any other liability hereunder and-under the Lease. The Tenant agrees that with respect to any money judgment which may be obtained or secured by the Tenant against the Mortgagee, the Tenant shall look solely to the estate or interest owned by the Mortgagee in the Premises and the Tenant will not collect or attempt to collect any such judgment out of any other assets of the Mortgagee.

8.  Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak or duMp any toxic or hazardous waste, waste products or substance (as they may be defined in any fedend or state statute, rule or regulation pertaining to or governing such wastes, waste products or substdnces) on the Premises at any time during the term, or extended term, of the Lease, except as are used in the ordinary course of Tenant's business as conducted on the Premises and in full compliance with environmental laws.

53

EXHIBIT H

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT (continued)

9.  In connection with the assignment to Mortgagee pursuant to the Mortgage and/or the loan documents referred to therein of Landlord's interest in the Lease, Tenant agrees that after receipt of written notice from Mortgagee that Mortgagee is exercising its right under such assignment to have all rents _and other sums due under the Lease paid directly to Mortgagee, Tenant shall pay to Mortgagee all rent and other sums due to Landlord under the Lease. By its signature below, the Landlord under the Lease hereby authorizes and directs Tenant to so pay such rents and other sums due under the Lease directly to Mortgagee and agrees that the Tenant shall be fully protected in doing so.

10. Any notice, request, demand, statement, authorization, approval or consent made hereunder shall be in writing and shall be sent by Federal Express, or other reputable courier service, or by postage pre-paid registered or certified mail, return receipt requested, and shall be deemed given when received or refused (as indicated on the receipt) and addressed as follows:

If to the Mortgagee:

Eurohypo AG, New York Branch,

as Administrative Agent

1114 Avenue of the Americas, 29th

Floor New York, New York 10036

Attention: Legal Director

Facsimile: (212) 479-5803

With a copy to:

Morrison & Foerster LLP

555 West Fifth Street

Los Angeles, California

Attention: Thomas R. Fileti, Esq.

Facsimile: (203) 892-5454

If to the Tenant:

Platinum Studios, LLC,

9744 Wilshire Boulevard, Suite 230

Beverly Hills, California 90212

Attention: Scott Mitchell Rosenberg

it being understood and agreed that each party will use reasonable efforts to send copies of any notices to the addresses marked With a copy to heremabove set forth; provided, however, that failure to deliver such copy or copies shall have no consequence whatsoever to the effectiveness of any notice made to the Tenant or the Mortgagee. Each party may designate a change of address by notice given, as hereinabove provided, to the other party, at least fifteen (15) days prior to the date such change of address is to become effective.

1.1 This Agreement shall be binding upon and inure to the benefit of the Mortgagee and the Tenant and their respective successors and assigns.

1.2 The term‘`Mortgagee" as used herein shall include the successors and assigns of the Mortgagee and any person, party or entity which shall become the owner of the Premises by reason of a foreclosure of the Mortgage or the acceptance of a deed or assignment in lieu of foreclosure or otherwise. The term "Landlord" as used herein shall mean and include the present landlord under the Lease and such landlord's predecessors and successors in interest under the Lease. The term "Premises" as used herein shall mean the Premises, the improvements now or hereafter located thereon and the estates therein encumbered by the Mortgage.

1.3 This Agreement may not be modified in any manner or terminated except by an instrument in writing executed by the parties hereto.

[INTENTIONALLY LEFT BLANK]

54

EXHIBIT H

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT (continued)

14. This Agreement shall be governed by and construed under the laws of the State in which the Premises are located.

IN WITNESS WHEREOF, the Mortgagee and the Tenant have duly executed this Agreement as of the date first above written.

Mortgagee:
	EUROHYPO AG, New York Branch, as Administrative Agent
By:	/s/
	Name
	Title

Tenant:
	PLATINUM STUDIOS, LLC, a California limited liability company
By:	/s/ Scott Mitchell Rosenberg
	Name Scott Mitchell Rosenberg
	Title

By:	/s/ Brian K. Altounian
	Name Brian K. Altounian
	Title

Lanlord:
	DOUGLAS EMMETT 1995, LLC
By:	/s/
	Name
	Title

55

ACKNOWLEDGMENTS

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES ss:

On 200 before me, . a Notary Public in and for said

County and State, personally appeared , personally

known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are sttbscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public

STATE OF CALIFORNIA

ss:

COUNTY OF LOS ANGELES

On                                                200/, before me,  a Notary Public in and for said

County and State, personally appeared Scott Mitchell Rosenberg, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

   .                                                                                                                                     LORA BALL

SS:

Notary Public

COUNTY OF LOS ANGELES

On                                              , 200. before me,, a Notary Public in and for said

County and State, personally appeared Brian K. Altounian, personally known to me (or proved to me on the baSis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf:of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public

56

DESCRIPTION OF THE PREMISES:

PARCEL 1:

LOTS 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72 AND 76 OF TRACT NO. 8369, TOGETHER WITH THE NORTHEASTERLY ONE-HALF OF THAT CERTAIN ALLEY 20 FEET WIDE LYING NORTHWESTERLY OF THE SOUTHWESTERLY PROLONGATION OF THE SOUTHEASTERLY LINE OF LOT 72 OF TRACT NO 8369 AND SOUTHEASTERLY OF THE SOUTHWESTERLY PROLONGATION OF THE NORTHWESTERLY LINE OF LOT 60 OF TRACT NO 8369, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP^-RECORDED IN BOOK 94 PAGES 24 AND 25 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

NON-EXCLUSIVE EASEMENT APPURTENANT TO PARCEL ,1 FOR INGRESS AND EGRESS, FOR THE PASSAGE AND PARKING OF VEHICLES, AND FOR PASSAGE AND ACCOMMODATION OF PEDESTRIANS ON SUCH RESPECTIVE PORTIONS OF THE ALLEY AS ARE SET ASIDE MAINTAINED AND AUTHORIZED FOR SUCH USE AS DISCLOSED IN A RECIPROCAL EASEMENT AGREEMENT, RECORDED OCTOBER 26, 1959 AS INSTRUMENT NO 89-1732036 OF LOS ANGELES COUNTY, CALIFORNIA.

EXECUTIVE TWR. \PLATINUM STUDIOS, LLCALO July 10,2006

57

EX-10.9

Exhibit 10.9

Sergio	Via M. Buonarroti 38 - 20145 Milano
Bonelli	Tel. 02/48195681
Editore	Fax. 02/48195682
S.p.A.

Milan, July 2, 1997

To whom it may concern:

The undersigned hereby confirms that Sergio Bonelli Editore is the publisher and sole copyright owner of the comic strip^* series "Dylan Dog" created by Tiziano Sclavi.

We also confirm that Mr. Ervin Rustemagic and his Dutch corporation SAF B.V. control all the motion picture, television, animation, multimedia, merchandising and all other allied and ancillary rights in any and all media (now known or hereafter devised) in and to the above series and their characters and other content worldwide, and have the exclusive authorization to license and sublicense these rights to third parties.

SERGIO BONELLI EDITORE S.p.A.
By:	/s/ Giulio Terzaghi
	Giulio Terzaghi
	Managing Director

1

As of July 2, 1997

PLATINUM STUDIOS, LIZ	SAF B.V
9744 Wilshire Blvd.	Kommendijk 4, 7004 HH
Suite 400	Doednchezn
Beverly Hills, CA 90212	Attn: Mr. Ervin Rustemagic
Atm; Mr, Ervin Rusts:magic
Attention: Mr. Scott Mitchell Rosenberg

Re: "Dylan Dog"

Gentlemen;

The undersigned has read and understands the agreement attached hereto ('Agreement"), entered into between SAF B.V. ("SAF") and Platinum Studios, LLC ("Platinum") with respect to the above-referenced comic book series ('Property"), and, as a material inducement to Plattinum. to enter into said Agreement, hereby (1) confirms that the undersigned has granted to SAT all rights granted by SAF to Platinum in the Agreement, (ii) joins in the grant of rights to Platinum as provided for therein (to the extent any such rights are still owned or controlled by the undersigned), and (iii) makes the same representations, warranties, indemnification, wavers and covenants to Platinum as are contained in paragraphs 11, 12 and 13 thereof. In fartherance of the foregoing, the undersigned shall execute a short-form assignment in favor of SAP substantially in the form of Exhibit "A" attached hereto.

The undersigned further agrees to look solely to SAF for the payment of any consideration or compensation that may be due to the undersigned in connection with the Agreement and all rights granted by the undersigned in or to the Property, SAF and the undersigned hereby agree that such compensation is an amount equal to ninety-nine percent (99%) of the compensation payable to SAF under the Agreement.

Very truly yours,

SERGIO BONELLI EDITORE S.P.A.
By:	/s/ Giulio Terzaghi
	Managing Director

ACKNOWLEDGED AND AGREED;

PLATINUM STUDIOS, LLC

By: Scott Mitchell Rosenberg

Its: Chairman

SAF B.V.

By: Ervin Rustemagic

Its: __________________________

2

EXHIBIT "A"

ASSIGNMENT

For good and valuable consideration, the receipt and adequacy of of which is hereby acknowledged, the undersigned hereby sells, grants, assigns, and transfers to SAF B.V. ("SAF"), and its successors, licensees and assigns, all of the undersigned's right, title and interest in and to the= certain published comic book scrims "Dylan Deg" created by Tiziano Sclavi (the "Property") (excluding only comic book print publication rights thereto in any format (including but not limited to, comic books, graphic novels, serialization in strip form such as in newspapers, magazines, almanacs and theg, without limitation, all contents copyrights. moral rights, and all motion picture, television, audio-visual device, dramatic stage and other live performance, merchandising, sound recording and allied, ancillary and subsidiary rights therein, whether now icaown or hereinafter devised, throughout the universe in perpetuity.

Not withstanding the foregoing, the undersigned retains all copyright, trademarks and goodwill with respect in and to the reserved rights set forth above.

This assignment is effective as of July 2, 1997.

SERGIO BONELLI EDITORE S.P.A.
By:	/s/ Giulio Terzaghi
	Managing Director

3

etc. In addition, should any court of competent jurisdiction determine that the duration of any rights granted hereunder exceeds that which is permissible under applicable law, such duration shall be limited, but only to the extent necessary to he consistent with the longest period permissible under applicable law.

Author represents and warrants that all literary, dramatic, musical and other material and all ideas, designs and inventions of Author in connection with the Project are or will be original with Author or in the public domain throughout the world, and shall not infringe upon or violate any copyright of, or, to infringe upon or violate the right of privacy or any other  right of, any person; that Author is free to grant all rights granted and make all agreements made by Author herein. Author agrees to hold SBE and its successors, licensees and assigns harmless from and against all damages, losses, costs, and expenses (inclviding­reasonable attorneys' fees and costs) which SBE or any of its successors, licensees or assigns may suffer or incur by reason of the breach of any of the warranties made in this paragraph.

Author hereby covenants and agrees that Author shall not have or be deemed to have any lien, barge or other encumbrance upon any of said rights conveyed to SBE herein or proceeds derived therefrom, and that no act of or omission by SBE, nor any other act, omission or event of any kind, shall terminate or otherwise adversely affect SBE's ownership of the rights conveyed herein. Author's sole remedy for any such breach or alleged breach shall be an action at law to recover such damages as may have been actually suffered by Author as a result thereof.

Executed as of  July 2, 1997.

Aurthor:
By:	/s/ Tiziano Sclavi
	Tiziano Sclavi

ACKNOWLEDGED AND AGREED:

SERGIO BONELLI EDITORE S.P.A.
By:	/s/ Giulio Terzaghi
	Managing Director

4

ASSIGNMENT OF RIGHTS

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Tiziano Sclavi ("Author") hereby assigns to Sergio Bonelli Editore S.p.A. ("SHE") all right, title and interest in and to the comic strip series entitled "Dylan Dog" (including without limitation all contents thereof, all present adaptations and versions thereof, and the themes, title and characters thereof) (collectively the "Project"). The rights assigned hereunder include, but shall not be limited to, the print publication, motion picture, television (including without limitation free, basic and pay), animation, multimedia, merchandising and all other allied and ancillary rights (including without limitation sequel and remake rights). SHE is and shall be deemed the exclusive owner of all of the foregoing, in perpetuity, for all purposes and the exclusive owner throughout the world of all of the rights camprised in the copyright thereof (and all extensions thereof), and of any and all other rights thereto, and that SBE shall have the right to exploit any or all of the foregoing in any and all media, now known or hereafter devised, throughout the universe, in perpetuity, in all languages as SBE determines. Author will, upon request, execute, acknowledge and deliver to SHE such additional documents as SBE may deem necessary to evidence and effectuate SBE's rights hereunder, and hereby grants to SBE the right as attorney-in-fact to execute, acknowledge, deliver and record any and all such documents if Author shall fail to execute same within five (5) days after so requested by SBE.

Author hereby waives the benefits of any provisiOn of law known as "droit moral", or any similar laws, and agrees not to institute, su^pport, maintain or authorize any action or lawsuit on the ground that any motion pictures or sound records, or other productions or items produced. hereunder in any way constitute an infringement of any of Author's "droit moral" or a defamation ,or mutilation of any part thereof, or contain unauthorized variations, alterations, modifications, changes or translations. In addition, Author hereby waives the exercise of Author's "droit moral" insofar as the items produced under or pursuant to this Assignment do not harm Author's honor and reputation. Author shall not have any right, title or interest whatsoever in or to any plot, story, 61R-racter, music, lyrics, dialogue, screenplay or other material of any kind created by or for SBE(or any assignee of the SBE). Without the limiting the generality of the foregoing, and without the following constituting (or otherwise to be considered as) an exhaustive list, Author hereby acknowledges and agrees that any additions, subtractions or modifications in the situations, story lines, dialogue, characters and/or "look and feel" of the Project do not constitute an illegitimate breach of Author's honor and reputation. The foregoing shall also apply to the use of any technical or commercial process and means which are or will be considered as usual or customary at any time during the production and exploitationof the items produced (SBE and/or any assignee of SBE), including, without limitation, advertising cuts, insertion of commercials and/or of third  parties' logos or credits, co orzation or de-colorization, "panning and scanning,"

5

As of July 2, 1997

SAF B.V.

Kommendijk 4, 7004 HH

Doetinchem, Holland

Attn: Mr. Ervin Rustemagic

Re: "DYLAN DOG"

Ladies and Gentlemen:

This will confirm the agreement between SAF B.V. ("you") and PLATINUM STUDIOS, LLC (the "undersigned") with respect to the undersigned's purchase and acquisition of the "Rights" (as defined in paragraph 6 below) owned by you in and to that certain published comic book series entitled "DYLAN DOG" (the "Property"), created by Tiziano Sclavi (the "Author") and published by Sergio Bonelli Editore S.p.A. ("Publisher"). The undersigned intends, without limitation, to develop and produce one or more motion picture and/or television projects (individually and collectively, the "Picture") based on or suggested by the Property.

1.              Conditions Precedent. All of the undersigned's obligations hereunder shall be subject to and conditioned upon the undersigned's (i) approval of the chain of title with respect to the Property, including, without limitation, obtaining satisfactory results to copyright searches, and (ii) receipt of a fully executed original of this Agreement and of Exhibit "A" attached hereto.

2.               Intentionally Deleted.

3.               Intentionally Deleted.

4.             Intentionally Deleted.

5. Contingent Compensation. Subject to the other provisions hereof, and on condition that you fully perform all of your respective obligations hereunder and are not otherwise in breach of or default hereof, and further provided that the undersigned produces the Picture, and the Picture is based on the Property, you shall also be entitled to receive contingent compensation in an amount equal to twenty-five percent (25 %) of "Producer's Adjusted Gross Revenues" (as defined, accounted for and paid in accordance with Exhibit "C" attached hereto and incorporated herein by this reference), if any, derived from the distribution and exploitation of the Picture (including sequels, remakes, television series and other productions based thereon). Nothing herein shall be construed as vesting in you any right, title or interest whatsoever in any Picture or production, or the gross receipts thereof, or any lien or charge thereon or assignment thereof.

6

  6. Rights Granted. In consideration of the undersigned's efforts to develop the Picture, your entitlement to participation in Producer's Adjusted Gross Receipts as set forth above, and other g9od and valuable consideration, the receipt of which is hereby acknowledged by you, you hereby irrevocably grant and assign to the undersigned, solely and exclusively throughout the world in perpetuity, all right, title and interest in and to the Property (except the "Reserved Rights" as defined in paragraph 7 below), including, without limitation, all copyrights, moral rights, and all motion picture, television, audio-visual device, dramatic stage and other live performance, merchandising (including, without limitation, all interactive and game rights), sound recording and allied, ancillary and subsidiary rights in any and all media now known or hereafter devised (including the right to create certain printed publications), necessary to make, produce, copyright, distribute and exploit in any and all media (whether now known or hereinafter devised) throughout the universe in perpetuity one or more motion pictures (theatrical, television or otherwise) and other productions and products based on or suggested by the Property. All of the rights granted to the undersigned under this Agreement are individually and collectively referred to herein as the "Rights" . Without limiting the generality of the foregoing, the Rights shall include and the undersigned shall own irrevocably, solely, exclusively and in perpetuity throughout the universe, by any and all manner and means now known or hereafter devised, the following:

a.The right to produce an unlimited number of motion pictures based upon or adapted from all or any part of the Property, including, without limitation, musical, dramatic, animated or live-action motion pictures, as well as remakes, prequels and sequels thereof and thereto, all of which motion pictures may be fixed on film, tape, disc, wire, audiovisual cartridge, cassette and/or on or by any other technical process now known or hereafter devised in any and all sizes, gauges, colors and types. For the avoidance of doubt, the term "Property" as used herein and for all purposes hereof, shall mean all characters, story lines, concepts, artwork, "look and feel," and all other intellectual property rights and their exploitation whatsoever associated with the comic book series which are (or become) the subject of this Agreement and the contents thereof, including, without limitation, any author written sequels and remakes, any so-called "spin-offs" (whether generic, "planted" or otherwise, and including, without limitation, any evolutions of any characters which currently appear in such comic book series and any new characters hereafter appearing in said comic book series, any continuity to any aspect of said comic book series, their respective characters, universes, plots, and/or story lines, any other comic book series, characters or properties which are launched, introduced, marketed and/or promoted with reference to the existing comic book series, their respective characters and/or the contents thereof (or with reference to any spin-offs therefrom, or sequels and remakes thereof), and any other characters, story lines, concepts or intellectual property rights and their exploitation which can reasonably be construed as being based on, derived or copied from the existing comic book series (or any spin-offs therefrom, or sequels and remakes thereof).

b.The right to produce sound recordings of all or any part of the Picture, specifically including the exclusive motion picture synchronization rights in the music commissioned or acquired by the undersigned for the Pictures and each and every part thereof, and the exclusive right to use all or any part thereof upon the parts of instruments serving to reproduce the same mechanically.

7

c. The right to adapt, use, dramatize, arrange, change, vary, modify, alter, transpose and make musical or non-musical versions of the Property and any parts thereof (including, without limitation, live radio, live television and live stage productions thereof); to add to, interpolate in and subtract or omit from the Property, characters, language, plot, theme, scenes, incidents, situations, action, titles, dialogue, designs, songs, music and lyrics; to translate any of the foregoing into all languages; to include in motion pictures, sound recordings and other items provided for in this Agreement such language, speech, songs, music, lyrics, dancing, choreography, sound, sound effects, action, situations, scenes, plot, dialogue, incidents and characters, characterizations and other material (whether or not based upon or taken from the Property) as the undersigned, in its uncontrolled discretion, may deem advisable, it being the intention hereof that the undersigned shall have the exclusive, absolute and unlimited right to use the Property, and each and every part thereof, for motion picture and all other purposes granted hereunder in any manner it may, in its uncontrolled discretion, deem advisable with the same force and effect as though the undersigned were the sole author of the Property, specifically including, without limitation, the right to produce motion pictures and other productions as sequels, series, serials, or otherwise, whether or not the events portrayed or the story, plot, outline or general nature of such motion pictures (and/or other productions) are the same as, or similar to, those contained in the Property, all without in any way being accountable or liable to you or Author for any use which the undersigned may make thereof. You hereby waive (subject to paragraph 23.d below) the benefits of any provision of law known as "droit moral", or any similar laws, and agree not to institute, support, maintain or authorize any law or lawsuit on the ground that any motion pictures or sound records, or other productions or items produced hereunder in any way constitute an infringement of any of your "droit moral" or a defamation or mutilation of any part thereof, or contain unauthorized variations, alterations, modifications, changes or translations. In any case, you hereby waive the exercise of your "droit moral" insofar as the items produced under or pursuant to this Agreement do not harm your honor and reputation. You shall not have any right, title or interest whatsoever in or to any plot, story, character, music, lyrics, dialogue, screenplay or other material of any kind created by or for the undersigned (or any assignee of the undersigned) in the exercise of its rights hereunder, or in or to any motion picture or other production produced hereunder, or any remake and/or sequel to the Property or the Picture created by or for the undersigned (or any assignee of the undersigned).

d.The right to broadcast all or any part of the Property and all or any part of any motion picture or sound record produced hereunder by radio and television, or otherwise, whether by living actors, electrical transcription, film, tape or otherwise, in any language.

e.The right, for the purpose of advertising and exploiting purposes, to produce and publish as serials or otherwise (with or without illustrations by photographs, drawings or cartoons) stories, synopses, excerpts, summaries and/or resumes, not to exceed 7,500 words in length, of and from the Property or any motion pictures produced hereunder based principally upon said Property and the right to (and to cause and/or license others to) write, publish and otherwise fully exploit so-called "novelization," "making of" books and other publications (in any form or format, illustrated or otherwise) of any length in respect of all Pictures and productions; it being agreed that any such publications shall include an appropriate credit for Author (such as, by way of example only, "Based on the comic book series "DYLAN DOG" created by Tiziano Sclavi.

8

    f.The right to write and prepare screenplays, teleplays, librettos, treatments, outlines, bibles, storyboards and all other plans, specifications and designs for motion pictures, sound records and other productions produced hereunder, and to cause musical compositions, including both words and music, utilizing or based upon or adapted from all or any part of the Property, or any title or titles thereof to be written and composed, and to include such musical compositions in motion pictures, sound records and other productions produced hereunder.

g.The right to manufacture, sell, furnish, publish, supply and distribute products, by-products, services, facilities, merchandise and commodities of every nature and description, including, but not limited to, still photographs, drawings, posters, illustrated and/or non-illustrated books, artwork, toys, games (including video, computer and "on-line" games), software, theme park rides and attractions, items of wearing apparel, drawings and posters, sound recordings in any configuration, sheet music and music folios, foods, beverages and similar items, which make reference to or are based upon or adapted from the Property or any part thereof or any motion picture produced hereunder, and the right to make trade deals and commercial tie-ups of all kinds involving the Property or any part thereof.

h.The right to copyright motion pictures, sound records, musical compositions, screenplays, teleplays, librettos, outlines, bibles, novelizations and all other items provided for in this Agreement, and secure copyright and/or trademark registration and protection thereof in all countries and territories where such protection is available, in the undersigned's own name, or otherwise, together with the right to manufacture copies thereof, and to distribute, sell, vend, lease, license, exhibit, transmit, broadcast, project, reproduce, publish, use, perform, advertise, publicize, market, exploit, turn to account and derive revenue in any form or manner therefrom, without any territorial restriction whatsoever, by any and all media, methods, systems and processes now or hereafter known, invented, used or contemplated, specifically including television, and the right to import or export such copies into or out of any territory without restriction. It is further expressly understood and agreed that motion pictures, sound records and all other productions and items produced hereunder shall constitute independent derivative works, and the undersigned and its successors, assigns and licensees shall have the perpetual right to exercise the rights granted in this subparagraph h. irrespective of the expiration, termination, transfer, renewal or extension of any copyright owned or controlled by you, or any heirs, executors, widow, widower, children, predecessors, successors or assigns of you.

i.The right to use the title or titles by which the Property or any part thereof are now known or may hereafter be known as the title or titles of motion pictures or other productions or products (whether or not based upon or adapted from the Property), it being acknowledged that the undersigned shall in no event have any less rights by reason of this Agreement than any member of the public may now or hereafter have, and the right to exploit, distribute and exhibit any motion pictures produced hereunder under any other title or titles that the undersigned may deem proper in its uncontrolled discretion.

9

    j.The right to use your name and likeness in connection with the production, distribution and exploitation of any Picture or production; provided, however, that the undersigned will not use or authorize the use of your name and likeness as a direct endorsement of any product or service (other than any Picture or production) without first obtaining your written consent.

k.  Intentionally deleted.

1.  All other rights of every kind and character in and to the Property whatsoever, other than the Reserved Rights. You hereby acknowledge and agree that the exercise of the rights set forth in subparagraphs 6.a-j above is not able, as a matter of principle, to harm your honor or reputation.

  m.  All rights granted the undersigned under this Agreement shall be cumulative, and the undersigned may exercise or refrain from exercising any one or more of said rights separately from, simultaneously, together or in connection with any other rights granted to the undersigned hereby or obtained by the undersigned from other sources, and regardless of whether said rights are granted in the disjunctive or conjunctive.

7.Reserved Rights.

a. Subject to the undersigned's right to exercise limited publication rights to the Property pursuant to paragraph 6.e. above and to the other terms and conditions of this Agreement, you hereby reserve only the comic book print publication rights to the Property in any format (including but not limited to, comic books, graphic novels, serialization in strip form such as in newspapers, magazines, almanacs and the like) and to any future episodes thereof (which future episodes shall in no event be based on any Picture or other production produced by or with the authority of the undersigned pursuant hereto) ("Reserved Rights") without permission.

b.  Intentionally Deleted.

c.  Sicne the characters of the Property are inclueded in the exclusive grand of the Rights to the undersigned hereunder, no rights in any media, other than comic book print publication (as described in subparagraph a. above), in or to such characters may be exercised or granted to any third party by you, and you shall not authorize or permit the apperance of any characters with appear in Property, or of any characters with similar names, personas and/or characteristics as those which appear in the Property, in any other media other than comic book print publication 9as described in subparagraph a. above).

d. Nothing contained in this Agreement shall be construed to be or operate in derogation of, or as prejudicial to, any rights or privileges which the undersigned now or at anytime hereafter may enjoy or be entitled to as a member of the public, whether or not this Agreement was in existence; and, notwithstanding anything by Sergio Bonelli Editore. in association with PLATINUM STUDIOS, LLC (or a division thereof as designated by the undersigned)). Such credit shall in all events be subject to any applicable guild restrictions, as determined in the undersigned's sole discretion. Except as otherwise expressly provided herein, all matters relating to credit, including but not limited to position and size and style of type, shall be determined by the undersigned in the undersigned's sole discretion. No casual or inadvertent failure by the undersigned, or any failure by any third party, to comply with the provisions of this paragraph shall constitute a breach of this Agreement.

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10. Reversion.

a. If the first Picture or any other production based on the Property has not commenced principal photography (or, with respect to other productions, the substantial equivalent of commencement of principal photography, or with respect to a live performance, the first public performance thereof has not taken place) within ten (10) years of the date hereof, then, subject to the other provisions hereof (including, without limitation, subparagraphs b. and c. below), provided that you notify the undersigned in writing of your intent to exercise the Reversion Right provided for below, and provided further, that principal photography of the first Picture (or the substantial equivalent thereof with respect to other productions) does not commence, or the first public performance of a live production does not take place, as applicable, within one (1) year of the undersigned's receipt of such written notice from you, you shall have the exclusive right ("Reversion Right") upon sixty (60) days prior written notice to the undersigned, to submit the Property for consideration by third parties and to acquire from the undersigned all of the undersigned's right, title and interest therein, except for any Additional Material (subject to subparagraph 7.d above), by paying to the undersigned, not later • than the earlier to occur of (i) the sale of such rights to a third party or (ii) the commencement of principal photography of a motion picture based on the Property, an amount equal to all of the direct, out-of-pocket costs and expenses incurred by the undersigned in connection with the acquisition of rights in and to, and the development and the production of, the Property and/or any Picture or production, and any underlying literary material, including, without limitation, all compensation paid for writing services and for directing services, and any fees and costs incurred in connection with the regisiTation(s) of any copyrights, trademarks and/or service marks, together with interest thereon at the prime rate charged by the undersigned's principal bank plus two percent (2%). In addition, if a motion picture (or other production) based on the Property is thereafter produced, you shall cause the undersigned to be paid an amount equal to five percent (5%) of 100% of the net profits of such picture (or other production) and each remake thereof and sequel thereto, defined, accounted for and paid no less favorably than net profits are defined, accounted for and paid for any other net profit participant in the applicable production.

b. Upon your exercise of the Reversion Right as provided above, the undersigned shall, subject to the net profit participation provided for in subparagraph a. above, quitclaim to you all of the undersigned's right, title and interest in and to the Property (except for any Additional Material and the undersigned's rights and entitlements with respect to merchandising agreements entered into prior to your exercise of any such Reversion Right), and otherwise subject to subparagraph c. below, shall warrant only that the undersigned has not theretofore transferred, hypothecated or otherwise disposed of any of its right, title or interest in or to the Property, only upon: (i) payment to the undersigned of all amounts set forth in subparagraph a. above; (II) delivery to the undersigned of executed guild and other customary assumption agreements in form and substance reasonably satisfactory to the undersigned assuming all of the undersigned's obligations in connection with the development, production and distribution of the Property and/or any Picture (or other production) and releasing the undersigned from all such obligations; and (iii) the assumption of all the undersigned's obligations in connection with the Property and any Picture (or other production) by a reasonably financially responsible party pursuant to an assumption agreement in form and substance acceptable to the undersigned (which assumption agreement shall include, without limitation, appropriate provisions for indemnification).

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c.  To the extent that the undersigned has exercised any merchandising rights in accordance with this Agreement prior to your exercise of any Reversion Right as provided for above ("Reversion Exercise"), any agreements entered into by the undersigned in connection therewith prior to such Reversion Exercise ("Existing Agreements") shall remain in full force and effect, and any such reversion of rights shall be subject to the terms and conditions of such agreements. Promptly after any such Reversion Exercise, the undersigned shall provide you with copies of all Existing Agreements, together with written notice identifying any parties with which the undersigned was negotiating prior to such Reversion Exercise and summarizing the principal terms of such negotiations ("Deals In Process"). After such Reversion Exercise, you shall have the option of exercising any renewals or extensions to the Existing Agreements (to the extent that Platinum has such rights under the applicable Existing Agreement) as well as negotiating additional renewals and extensions thereto, provided that the terms of subparagraph 15.b below shall continue to apply to the applicable Existing Agreements as so renewed or extended, and provided further, that if you should choose to forego any such renewal or extension ("Expired Agreement"), you shall not enter into any agreement with respect to the merchandising of the Property with the other party to such Expired Agreement for a period of two (2) years from the date of the expiration of such Expired Agreement. With rospect to Deals in Process, you shall have the option of permitting the undersigned to conclude an agreement substantially on the terms previously communicated to you, in which event the terms of subparagraph 15.b shall apply to any such agreements so concluded (as well as to any extensions or renewals thereof), provided that if you opt not to have the undersigned conclude any such Deal in Process, you shall not enter into any agreement with respect to the merchandising of the Property with the intended party (or parties) to such Deal in Process for a period of two (2) years from the date of such Reversion Exercise hereunder.

d.  If the first Picture or any other production based on the Property has commenced principal photography (or, with respect to other productions, the substantial equivalent of commencement of principal photography, or with respect to a live performance, the first public performance thereof has taken place) within ten (10) years of the date hereof, then the reversion rights provided for in this paragraph 10 shall automatically terminate and have no further force or effect.

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       10.    Reversion.

    a.  If  the first production based on the Property ahs not commenced principal photography (or, with respect to other productions, the substantial equivalent of commencement of principal photography, or with respect to a live performance, the first public performance thereof has not taken place) within ten (10) years of the date hereof, the, subject to the ther provisions hereof (including, without limitation, subparagraphs b. and c. below), provided that you have the right to enter into this Agreement and to grant all the rights herein granted, free and clear of any liens, claims and encumbrances whatsoever; that you have not granted or assigned or otherwise transferred such rights to any others and that you will not do so subsequent to the date hereof; that the Property is wholly original with Author; that no incident therein or part thereof was taken or copied from or based upon any other source unless in the public domain (including but not limited to any motion picture or any other literary, dramatic, or musical work); that the Property does not and will not infringe any copyright, right of privacy or other right of, or defame or libel, any person or company; that the use of the Property, in any form, adaptation or version will not infringe any such copyright or other rights or defame any person or company; and that there are no claims, litigation or other proceedings pending or threatened which could in any way impair, limit or diminish the rights granted to the undersigned hereunder; all material in the "Annotation" (as defined below) furnished by you and/or Author pursuant to paragraph 19 below (if applicable) shall be true and accurate in all respects. The fore­going warranties do not apply to any material which the undersigned may add to the Property in the development of the Picture. You hereby make the same representations and warranties to the undersigned as are made in your favor by Author in any agreement between you and Author.

 b.  Upon your exercie of the Reversion Right as provided above, the undersigned shall, subject to the net profit participation provided for in subparagraph a. above, quitclaim to you all the under signed's right, title and interest in an to the Property except for Additional Material and the undersigned's rights and entitlements with respect to merchandising agreements entered into prior to your excercise of any such Reversion Right), and otherwise subject to suparagraph c. below, shall warrant only the undersigned has not theretofore transferred, hypothecated or totherwise disposed of any of its right, title or interest in or to the Property, only upon: (i)payment to the undersigned of all amounts set forth in subparagraph a. above; (ii) delivery to the undersigned of exceuted guild and other customary assumption agreements in form and substance reasonably satisfactory to the undersigned assuming all of the undersignd's obligations in connection with the development, production distribution of the Property and/or any Picture (or other production) and releasing the undersigned from all such obligations; and (iii) the assumption of all the undersigned's obgligations in connection with the Property and any Picture (or other production) by a reasonably financially responsible party pursuant to an assumption agreement shall include without limitation, apporpriate provisions for indemnification).

   c. To the extent that the undersigned has exercised any merhandising rights in accordance with this Agreement prior to your exercise of any Reversion Right as provided of above ("Revision Exercise"), any agreements entered into by the undersigned in connection therewith prior to such Reversion Exercise ("Existing Agreement") shall remain in full force force and effect, and any such reversion of rights shall be subject to the terms and coditions of such agreements. Promptly after any such Reversion Exercise, the udersigned shall provide you with copies of all Existing Agreements, together with written notice identifying any parties with which the undersigned wat negotiating prior to such Reversion Exercise and summarizing the principal terms of such negotiations ("Deals In Process"). After such Reversion Exercise, you shall have the option of exercising any renewals or extensions to the Existing Agreements (to the extent that Platinum has such rights under the applicable Existing Agreement) as well as negotiating additional renewals and extentions thereto, provided that the terms of subparagraph 15.b below shall continue to apply to the applicable choose to forego any such renewal or extension ('Expired Agreement"), you shall not enter into any agreement with respect to the merchandising of the Property with the other expiration of such Expried Agreement. With respect to Deals in Process, you shall have the option of permitting the undersigned to conclude an agreement substantially on the terms previosly communicated to you, in which event the terms of subparagraph 15.b shall aplly to any such agreements so concluded (as well as to any extentisons or renewals thereof), provided that if you opt no to have the undersigned conclude any such Deal in Process, you shall not enter into any agreement with repect to the merchandising of the Property with the intended party (or parties) to such Deal in Process for a period of two (2) years from the date of such Reversion Exercise hereunder.

   d. If ther first Picture or any other production based on the Property has commenced principal photography (or, with respect to other productions, the substantial equivalent to commencement of principal photography, or witht he respect to live performance, the first public performance thereof has taken place) within ten (10) years of the date hereof, then the reversion rights provided for in this paragraph 10 shall automatically terminate and have no further force or effect.

12.               Indemnity. You hereby agree to indemnify the undersigned, and its successors, assigns, and licensees, and hold all such persons or companies harmless from and against any and all liability, losses, damages, costs, expenses (including but not limited to reasonable attorneys' fees), judgments and penalties arising out of, resulting from, based upon or incurred because of breach or alleged breach of any representation, warranty or agreement made by you hereunder.

  13.              Waiver of Injunctive Relief. You hereby agree that the sole remedy in the event of any default by the undersigned hereunder, including the failure by the undersigned to pay you any consideration payable to you pursuant hereto, or to accord you credit (to the extent that the undersigned is obligated to accord such credit) pursuant hereto, shall be an action against the undersigned for such consideration or for damages, if any. Specifically, you agree, for the benefit of the undersigned and any third-party involved in the production, exhibition, distribution or exploitation of the Picture, that you shall have no right to enjoin the production, exhibition, distribution or exploitation of the Picture or to terminate or rescind any rights in the Property granted to the undersigned hereunder. If any copyright (or similar) report obtained by the undersigned hereafter indicates that you have heretofore entered into agreements in conflict herewith or have granted to any others any of the rights granted hereunder, the undersigned shall have the right to terminate this Agreement by written notice to you; and immediately upon receipt of such notice, you shall remit to the undersigned an amount equal to the sum of all con­sideration theretofore paid to you by the undersigned hereunder. At all times, the undersigned shall have all rights and remedies which it has at law, in equity, pursuant hereto or otherwise.

  14.  Assignment. The undersigned may assign this Agreement, and/or any of the undersigned's rights hereunder, to any person, firm or corporation. If such person, firm or corporation is (i) a major or mini-major (as such terms are customarily understood in the motion picture industry), (ii) a television network, (iii) or a financially responsible party, and such person, firm or corporation assumes and agrees in writing to keep and perform the undersigned's obligations hereunder (or any of them), the under­signed shall be released and discharged from the obligations so assumed. This Agreement shall be binding upon and shall inure to the benefit of the undersigned and its successors, representatives and assigns.

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  15. Development/Merchandising Activities.

a.The undersigned shall have the right to prepare for the production of a motion picture or other production based on or suggested by the Property. You agree that the undersigned shall have the right to revise, change, adapt, modify, interpolate in, transpose, add material to and/or remove material from (herein collectively "revise") the Property as the undersigned shall in its sole discretion deem appropriate. You hereby acknowledge that the exercise of the foregoing rights is not able, as a matter of principle, to harm your honor or reputation.

b.Notwithstanding anything to the contrary contained in this Agreement or the exhibits hereto, the undersigned shall have the right to merchandise the Property itself and any elements thereof (in addition to any Picture or other production based thereon) on the following terms and conditions:

     (1) the undersigned shall not have the right to include comic books (as described in 7a. above) in the items of merchandise to be exploited.

     (2)            Intentionally Deleted.

     (3)subject to subparagraph (4) below, with respect to any merchandising agreements for the Property (or any element thereof) concluded prior to the commencement of principal photography of the first Picture (or of any other production) pursuant hereto, if a third party exploits such merchandising rights, the undersigned shall be paid a supervisory fee in amount equal to ten percent (10%) of the gross receipts derived "at-source" by such third party from such exploitation, or, if the undersigned exploits such merchandising rights (e.g., merchandising rights have not been assigned or granted to a Major or other financier/distributor in connection with a Picture or production), the undersigned shall be paid a fee in an amount equal to thirty-five percent (35%) of the gross revenues received by the undersigned from the exploitation of such merchandising rights; in either case, after the following deductions in the following order "off-the-top" from the non-refundable, non-returnable revenues received and retained by the undersigned from the exploitation of such merchandising rights: (i) the applicable fee as set forth above, (ii) any applicable third party participations and/or agency or consulting fees where the undersigned exploits the merchandising rights, and (iii) any "out-of-pocket" costs and expenses incurred by the undersigned in connection with such merchandising activities, the balance shall be divided equally between you and the undersigned;

                       (4)              after the commencement of principal photography of any Picture (or of any other production), any and all non-refundable, non-returnable revenues received and retained by the undersigned from merchandising agreements for the Property (or any element thereof) entered into by the undersigned pursuant hereto, whether concluded prior to or after any such commencement, shall be accounted for and paid as provided in Exhibit "C", retroactive to the first dollar of such revenues (i.e., after such commencement, if monies were paid to you under subparagraph (3) above, but would not have been payable as and when accounted for in accordance with Exhibit "C", the undersigned may offset such amounts} previously paid to you against other monies payable to you hereunder).

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16.     Further Documents/Actions.

a.  You shall, concurrently with the execution of this Agreement, execute, acknowledge and deliver to the undersigned the short form Assignment in the form attached hereto as Exhibit "A." You further agree that the under­signed may record the executed short form Assignment with the United States Copyright Office and with the copyright office or comparable registry of any country.

b.  In addition, you shall duly execute, acknowledge and deliver to the undersigned, or cause to be executed, acknowledged and delivered to the undersigned, in form reasonably approved by the undersigned, any and all further assignments or instruments consistent with this Agreement which the undersigned may deem necessary, expedient or proper to carry out and effectuate the purposes and intent of this Agreement, including but not limited to, and in the event of the renewal or extension of the copyright in or to the Property, such assignments or other instruments as may be required by the undersigned to effectively vest in the undersigned, throughout the full period of such renewal or extension of copyright, all of the rights, licenses, privileges and property herein granted to the undersigned. In no way limiting the generality of the foregoing, you shall take all steps reasonably necessary and proper to protect and preserve the copyright of the Property, including but not limited to, timely renewing the copyright registration thereof (and if the Property has not been registered for copyright in the U.S. Copyright Office, you shall (at your expense) immediately do all acts and things necessary to effect such registration of the Property in your and Author's name, as applicable). You hereby agree (at your expense) to cause any future publication of the Property, or any part thereof, in whatever form, version, adaptation or translation in any part of the world to include a proper copyright notice and in such manner as shall afford to the Property copyright protection in the United States and all countries of the world where copyright or similar protection is available. If you shall fail to execute or deliver to the undersigned any further assignments or instruments under the provisions hereof within seven (7) days after being requested to do so by the undersigned, then to the extent that the undersigned shall be legally entitled to execute, acknowledge and deliver such assignment or instruments, you hereby appoint the undersigned your irrevocable attorney­in-fact, with the right, but not the obligation, to do any and all acts and things necessary to execute, acknowledge and deliver any and all such further assignments and other instruments consistent with this Agreement, in your name and on your behalf, which appointment shall be deemed to be a power coupled with an interest and shall be irrevocable.

c.You shall do all such acts and things as shall be necessary to prevent the Property, and any part thereof and any future versions thereof, from falling into the public domain in any country or territory of the world.

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        17.                  Infringement Actions. Also included in the rights hereby granted to the undersigned by you are all actions and causes of action for the infringement by any other person or company of any rights in the Property hereby granted to the undersigned, and in this connection you hereby appoint the undersigned your attorney-in-fact irrevo­cably, but for the sole benefit of the undersigned, to initiate and prosecute such proceedings as the undersigned may deem expedient to protect its rights herein granted and to effect its recovery of damages and penalties for any such infringement. The undersigned may sue in its own name or may use your name or at its sole option may join you as party plaintiff or defendant in any suit or proceeding brought for such purposes. You shall cooperate with the undersigned in connection with any suit or action threatened or instituted by or against the undersigned relating to any rights granted or to be granted to the undersigned hereunder, or to the exercise thereof by the undersigned, to the full extent of your ability.

18.                  Rental, Lending and Home Taping Rights.

a.  Without limiting the foregoing, you hereby irrevocably assign, license and grant to the undersigned, throughout the universe in perpetuity any and all of your (and, to the extent the Author's rights have been assigned to you, the Author's) rights to authorize, prohibit and/or control the renting, lending, fixation, reproduction and/or other exploitation of the Picture by any media and means now known or hereafter devised as may be conferred upon you under applicable laws, regulations or directives, including without limitation, any so-called rental and lending rights pursuant to any European Economic Community ("EEC") directives and/or enabling or implementing legislation, laws or regulations enacted by the member nations of the EEC as well as any so-called home taping rights (all of the foregoing rights are herein collectively referred to as the "Rental, Lending and Home Taping Rights").

b.  You hereby acknowledge and agree that the following sums are in consideration of, and constitute adequate and equitable remuneration for the Rental, Lending and Home Taping Rights and constitute a complete buy-out of all Rental, Lending and Home Taping Rights in perpetuity: (i) an agreed allocation to the Rental, Lending and Home Taping rights of 3.8% of the compensation provided for under this Agreement; (ii) any sums payable to you with respect to the rental and lending right under any applicable collective bargaining agreement or other industry-wide agreement; and (iii) any residuals payable to you under any such collective bargaining or other industry-wide agreement with respect to home video exploitation in the territories or jurisdictions where the Rental, Lending and Home Taping Rights are recognized. To the extent that the Author has not been fully compensated for the Author's Rental, Lending and Home Taping Rights, the undersigned shall be entitled to withhold and deduct from any compensation payable to you hereunder any such amounts which the undersigned is obligated to pay to Author in connection therewith. In connection with the foregoing, you hereby irrevocably grant to the undersigned throughout the universe in perpetuity, to the extent not inconsistent with any applicable collective bargaining agreement or other industry-wide agreement, the right to collect and retain for the undersigned's (or its designee's) own account the amounts payable to you (or to Author to the extent Author has assigned same to you) in respect of such Rental, Lending and Home Taping Rights and hereby irrevocably direct any collecting societies or other persons or entities receiving such amounts to pay such amounts to the undersigned. You shall also fully cooperate with the undersigned in connection with the collection and payment to the undersigned of such amounts.

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19.              Annotation Guide. To the extent any material (including, without limitation, characters and characterizations) contained in the Property is based in whole or in part on any actual individual, whether living or dead, or any "real life" incident, you shall, and shall cause Author to, prepare and deliver to the undersigned, not later than the date reasonably designated by the undersigned, a complete, true and accurate written annotation of such material, in accordance with the guidelines provided in the Annotation Guide attached hereto as Exhibit "B" (an "Annotation"). You shall also accurately provide such other information as may be reasonably required by the undersigned for the purpose of permitting the undersigned to evaluate the risks involved in the utilization and exploitation of the Rights.

   20.                Publicity/Non-Disclosure.

a.Neither you nor the undersigned will disclose any material provision of this Agreement to any third party unless reasonably necessary to do so.

b.You shall not issue publicity for the Picture at any time without the undersigned's prior consent, except that you may issue publicity which relates primarily to the comic book series "DYLAN DOG" and only incidentally to the Picture or the aforementioned's connection thereto, provided that any publicity issued by you shall not derogate, disparage or defame the Picture or any person, firm or corporation (including, without limitation, the undersigned, and its officers, employees, parent companies, affiliates and subsidiaries) associated with the Picture. You shall not disclose to any third party (except on a confidential basis to your business representatives) any proprietary information relating to the Picture or the undersigned (or its parent companies, subsidiaries and affiliates) (including, without limitation, the budget of the Picture, the contents of any contingent compensation statement or the terms of any agreements pertaining to the Picture), without the undersigned's prior written consent.

21.              Payment. All monies money due and payable to you under this

Agreement shall be paid to the address first set forth above.

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   22.                Governing Law; Forum. THIS AGREEMENT SHALL BESUBJECT TO AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED WHOLLY THEREIN. YOU HEREBY AGREE THAT ANY LEGAL ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENT, DOCUMENT OR OTHER INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR PURSUANT HERETO, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED AGAINST YOU OR ANY OF YOUR PROPERTIES MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA, OR IN THE FEDERAL COURTS OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AS THE UNDERSIGNED MAY ELECT, PROVIDED ALWAYS THAT SUIT ALSO MAY BE BROUGHT IN THE COURTS OF ANY COUNTRY OR PLACE WHERE YOU OR ANY OF YOUR ASSETS MAY BE FOUND, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, YOU IRREVOCABLY WAIVE ANY OBJECTION WHICH YOU MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUIT, ACTION OR PROCEEDING, ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR OTHER INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR PURSUANT HERETO, BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR IN THE FEDERAL COURTS OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ALL WRITS, PROCESSES AND SUMMONSES IN ANY ACTION, SUIT OR PROCEEDING INSTITUTED BY THE UNDERSIGNED IN ANY OF THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES OF AMERICA MAY BE MADE UPON YOU BY ANY MEANS PERMITTED BY LAW, AND TO THE EXTENT PERMITTED BY LAW BY THE MAILING OF COPIRS OF THE SAME TO YOU, ENCLOSED IN REGISTERED OR CER:111-1ED MAIL COVER, AT THE ADDRESS DESIGNATED FOR YOU HEREINABOVE.

23.  Miscellaneous.

a. Any and all notices desired or required to be given hereunder shall be in writing and sent by registered or certified mail, postage fully prepaid, to the respective party at the following addresses (or such other address as such party may designate in writing):

To you:

SAF B.V.

Kommendijk 4, 7004 HH

Doetinchem, Holland

Attention: Mr. Ervin Rustemagic

To the undersigned:

PLATINUM STUDIOS, LLC

9744 Wilshire Boulevard, Suite 400

Beverly Hills, California 90212

Attention: Mr. Scott Mitchell Rosenberg

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with a courtesy copy to:

Loeb & Loeb LLP

10100 Santa Monica Boulevard

Suite 2200

Los Angeles, California 90067

Attention: Stephen L. Saltzman, Esq.

No breach of this Agreement by the undersigned shall be deemed to be material unless you shall have first served notice upon the undersigned of such alleged breach and the undersigned shall not have cured or remedied such breach within 30 days after receiving such notice.

b.In addition to any other rights and remedies of the undersigned (whether at law, in equity or otherwise), the undersigned shall be entitled to injunctive relief to enforce the provisions hereof (including, without limitation, its rights and entitlements under paragraph 10 above), and, in the event that the undersigned must institute any action or proceeding to enforce its rights hereunder, the prevailing party in any such action or proceeding shall be entitled to payment of its attorneys fees and costs incurred in connection with such action or proceeding (including any fees and costs relating to the dispute in question incurred prior to the commencement of such action or proceeding).

c.This Agreement (and any Exhibits attached hereto) contains the entire agreement between the parties hereto concerning the subject matter of this Agreement and shall supersede any prior or contemporaneous agreements or understandings. This Agreement may not be changed or modified, or any provision hereof waived, except by an agreement in writing signed by the party against whom enforcement of any waiver, change or modification is sought.

d. Nothing herein contained shall be construed as requiring the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any applicable statute, law or ordinance contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event the provision of this Agreement affected shall be curtailed and limited only to the extent necessary to bring it within the applicable legal requirements. In particular, should any court of competent jurisdiction determine that any of the provisions of this Agreement are invalid insofar as they provide for an assignment or waiver of your moral rights, you hereby nevertheless agree that such assignment and waiver shall be restricted as and to the extent required by applicable law, but shall and remain effective insofar as the items produced under or pursuant to this Agreement do not harm your honor and reputation. Without limiting the generality of the foregoing, and without the following constituting (or otherwise to be considered as) an exhaustive list, you hereby acknowledge and agree that any additions, subtractions or modifications in the situations, story lines, dialogue, characters and/or "look and feel" of the Property do not constitute an illegitimate breach of your honor and reputation as long as the spirit of the Property is not affected. The foregoing shall also apply to the use of any technical or commercial process and means which are or will be considered as usual or customary at any time during the production

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Kindly indicate your agreement to and acceptance of the foregoing by signing in the space provided for your signature hereinbelow.

Very truly yours,

	PLATINUM STUDIOS, LLC
Executed as of July 2, 1997	By:	/s/ Scott Mitchell Rosenberg
		Scott Mitchell Rosenberg
		Chairman

AGREED TO AND ACCEPTED

as of July 2, 1997;

SAF B. V.

By Ervin Rustemagic

Its________________________

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EXHIBIT "A"

ASSIGNMENT

IN CONSIDERATION of the payment of Ten Dollars ($10.00) and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby sells, grants, assigns, and transfers to PLATINUM STUDIOS, LLC (the "Purchaser"), and its successors, licensees and assigns, all of the undersigned's right, title and interest in and to the property ("Property") described below (excluding only the Reserved Rights), including, without limitation, all copyrights, moral rights, and all motion picture, television, audio-visual device, dramatic stage and other live performance, merchandising, sound recording and allied, ancillary and subsidiary rights (including the right to create certain printed publications) therein, whether now known or hereinafter devised (and including, without limitation, the rights set forth on Schedule "A" attached hereto and incorporated herein by this reference), throughout the universe in perpetuity:

PUBLISHED COMIC BOOK SERIES: "DYLAN DOG"

CREATED BY: TIZIANO SCLAVI

including all contents of said Property. This agreement is subject to all terms, conditions and provisions contained in that certain agreement ("Agreement") dated as of July 2, 1997 entered into between Purchaser and the undersigned. Any capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.

This assignment is effective as of July 2, 1997.

SAF B.V.
By:	/s/ Ervin Rustemagic
	Name
	Title

21

STATE OF	)
	) SS
COUNTY OF	)

On _________________,_____________, before me , the undersigned, a Notary Public in and for said  County and State, personally appeared __________________, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged that (s)he executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.
By:
	Notary Public in and for said County and State

22

SCHEDULE "A"

(Non-Exhaustive List of Assigned Rights)

The Adaptation Rights and Translation Rights, i.e., the right to make changes to the Property and its characters, story elements, dialogues, scenes, etc., the right to add new or altered parts, to edit out sections or to rearrange the order or sequences in the plot, to commission co-authors to edit the Property and the right to have the Property translated into all languages.

The Film Production Rights, i.e., to use the Property, or parts thereof, for producing a motion picture (or pictures) in any language. The film production rights also encompass the right to produce re-makes and sequels.

The Right to the Use of Title, i.e., to use the title of the Property for designating the motion picture production(s).

The Rights of (Expansion) Further Development, i.e., the right to use elements of the plot, as developed by the author, or any characters and their characteristics and features contained in the Property, as well as any other ideas set forth therein, without restriction, for follow-up productions (e.g., sequels, remakes, series and for spin-offs from said series), or in connection with other productions, even if the author is not called upon to participate in the writing of the screenplays for such other productions.

The Transmission Rights, i.e., the right to render any production based on the Property accessible to the public, in whole or in part, for an unlimited number of times (runs) by way of broadcasts such as radio and television broadcasting, wire broadcasting, Hertzian waves, laser, microwaves, or similar technical devices. This applies to all possible transmission methods (for example, terrestrial transmitters, cable television, cable retransmission, satellite television, including direct broadcast satellite) irrespective of the legal form (public or private television) or of the method of financing employed by the television station (commercial or non-commercial television) or of the legal relationship between the broadcasting station and the viewer (Free TV, Pay TV, etc.). The foregoing includes the right to publicly communicate broadcasts as well as any claims to fees which may be exacted in respect of the private recording of television broadcasts.

The Theatrical Rights, i.e., the right to render any production publicly perceptible by means of technical devices irrespective of the technical design of the projection system and the visual and sound recordings. The theatrical rights relate in particular to all film formats and narrow-gauge formats (70, 35, 16, 8 mm) as well as electromagnetic (video) systems and encompass commercial and non-commercial film screenings. The foregoing includes the right to make any production publicly perceptible at fairs, sales exhibitions, festivals and similar events.

The Videogram Rights, i.e., the right to reproduce and distribute (by means of selling, hiring, lending,. etc.) any production on visual and sound recordings of all types (videograms) for the purpose of non-public exhibition. This right includes all audiovisual systems such as narrow-gauge film cassettes, video cassettes, video tapes, video discs irrespective of the technical design of the system concerned. The foregoing includes the right to make any such production available to a limited number of viewers by closed circuit (e.g., in hospitals, hotels, aircraft, ships, schools) as well as any claims for remuneration under applicable copyright laws resulting from the hiring or lending of recorded video cassettes and offering the possibility of making private recordings.

23

The Interactive Media Rights, i.e., the rights of exploitation in picture/sound media other than those mentioned above that allow the active influence of the recipient on the action depicted in any production. Included herein are, for example, CD-Roms, CDI, laser discs and other picture/sound media (multi-media rights) that can be played on end-user devices (e.g., personal computer(s)) designed therefor.

The "Use-On-Demand" Rights, i.e., the right to make the work available, by way of digital or alternate storage and transmission technology, to a multiplicity of users for, respectively, individual demand or reception by way of a television and/or other devices. Included in the foregoing is the right to store the work, in whole or in part, in electronic data banks, data nets or telephonic data services (ems., Internet, World Wide Web) for purposes of individual use on demand.

The Reproduction and Distribution Rights, i.e., the right to reproduce and distribute any production at the user's discretion, within the scope of the modes of use granted hereunder, on visual and sound recordings other than the ones originally employed.

The Adaptation and Dubbing Rights, i.e., the right to abridge and segment the Property and any production, as well as to combine the same with other works, to interrupt any production with advertising spots, to change the title or to adapt the Property or any production in any other way and the exclusive right to dub any production in other languages or to produce subtitled or voice-over versions thereof.

The Right to Advertise and to Use Excerpts, i.e., the authorization to use excerpts from the Property or any production for advertising purposes or to exploit the same within the framework of other productions. The foregoing includes the right to advertise any production and its comprehensive exploitation in a manner customary in the trade (Lg, on television, in movie theatres, on videograms or in printed publications) while using the author's name and likeness.

The Merchandising Rights, i.e., the right to commercially exploit the Property and any production by manufacturing and distributing products of any description which are connected with the Property or the production, including any representation of incidents, names, titles, characters, likenesses or other contexts and to advertise products and services of any description by using such elements or adapted or unadapted excerpts from the Property or the production (provided that the author shall not be represented as using, consuming or endorsing any such product).

The Publication Rights, i.e., the right to write and publish summaries and synopses of the Property as well as the right to produce, reproduce and distribute

illustrated or non-illustrated books, booklets, eenae=sieips, etc. which are derived from the Property or any production either by ,repeating or narrating the contents - also in a modified or remodelled version - or in the form of photographic, drawn or painted visual representation, or the like.

The Sound Recording Rights, i.e., the right to produce, reproduce and distribute phonograph records, tape cassettes or other sound recordings which are produced on the basis of the soundtrack of any production, or by way of narrating, rearranging or otherwise adapting the contents of the Property or any production as well as the right to broadcast or publicly communicate any such sound recordings.

24

EXHIBIT "B"

ANNOTATION GUIDE

Annotated material should contain for each element, whether an event, setting or section of dialogue within scene, notes in the margin which provide the following information:

 1.  Whether the element presents or portrays:

(a)   Fact, in which case the note should indicate whether the person's name is real, whether (s)he is alive and whether (s)he has signed a release.

(b)   Fiction, but a product of inference from fact; or

(c)   Fiction, not based on fact.

2.  Source material for the element:

(a)   Book;

(b)   Newspaper or magazine article;

(c)   Recorded interview;

(d)   Trial or deposition transcript;

(e)   Any other source.

  

NOTE: Source material identification should give the name of the source (i.e., New York Times article), page reference (if any) and date. To the extent possible, identify multiple sources for each element. Retain copies of all materials, preferably cross-indexed by reference to page numbers. Coding may be useful to avoid repeated, lengthy references.

Descriptive annotation notes are helpful (e.g., the setting is a hotel suite because John/Jane Doe usually had business meetings in his/her hotel suite when visiting Los Angeles - New York Times; April 1, 1981, p.8).

25

EXHIBIT "C"

PRODUCER'S AEUUSTED GROSS REVENUES

To Agreement between Platinum Studios 1.1.0 ('Company') and SAF B.V. ("Participant") in connection with a motion picture (including sequels. remakes. television series and other productions based thereon) (collectively, the "Picture') based upon the comic book series ("Property') entitled "Dylan Dog.'

A           Single Worldwide Distributor:

I.       General Computations:

(a) If the Picture is financed and distributed by a single worldwide distributor. then Producer's Adjusted Gross Revenues ("PAGR') shall mean 'Producer's Gross Receipts', as defined in paragraph Ail, less (1) the items set forth in paragraph B.I.(aXi)-(v) below, to the extent paid or payable by Company. out of the Producer's Gross Receipts received by Company or otherwise (as opposed to such items paid by the Distributor and/or Financier prior to remitting Producer's Gross Receipts to Company), and to the extent rot included in the budget of the Picture. and (2) themerchandising Distribution Fee set forth in paragraph B.IV(x).

II.Producer's Gross Receipts:

(a)For purpose of this section A, 'Producer's Gross Receipts" means all cash received and retained (in US dollars in the United States or in freely remittable foreign currency) by Company from any distributor, sutdistrilmor, financier, or other licensee in consideration for the option, purchase, license or other disposition of the Rights (as the term "Rights" is defined in the main agreement to which this is attached. and as opposed to any consideration or compensation (whether fixed or contingent) paid to Company, Scott Rosenberg or any other individual for their respective producer and/or executive producer services). "Producer's Gross Receipts' shall be net of any distribution fees, distribution expenses, deferments and/or participations, production casts or any other deductions made by the Distributor /Financier of the Picture prior to remising Producer's Gross Receipts to Company.

(b)If merchandising, music, soundtrack, and/or other ancillary or allied and subsidiary rights are sold or licensed separately from the distribution rights in the Picture, then to the extent of such separate sale or license, such Producer's Gross Receipts shall be treated as set forth in Section B, below.

B Multiple Distributors:

I.General Computation:

(a) If the Picture is not financed and distributed by a single worldwide distributor (e.g., if the distribution rights to the Picture are licensed on a territory-by­territory, region-by-region and/or media-by-media basis and/or Company finarots the Picture though loans, equity iiIVCSCMCI0S, bridge financing, cash contributions from multiple sources or a combination thereof), then PAGR shallmean 'Producer's Gross Receipt?, as defined in paragraph B.R. less the following, deducted on a continuing basis in the following order:

(i)'Off the Tops," as defined in paragraph B.III. below;

(ii)'Distribution Fees.' as defined in paragraph B.IV;

(iii)'DistributionExpenses." as defined in paragraph B.11;

(iv)All deferments and/or participations whether fixed or contingent (if any) based upon or computed in respect of Producer's Gross Receipts to the extent not included in "Production Cost";

(v) 'Production Cost,' as defined in paragraph B.VI, with interest on the unrecouped portion thereof at the rate charged from time to time by Company's bank or other financing entity; interest shall be deducted before principal.

(b) "Breakeven" means 'Producer's Gross Receipts' less the deductions set forth in clauses (), (i), (iii) and (v) of paragraph B.l(a) above; and the deductions set forth in paragraph B.I(aXiv) which are paid or accrue prior to Breakeven.

H.Producer's Gross Receipts:

(a) Producer's Gross Receipts: For purposes of this Section B, "Producer's Gross Receipt? means all cash received and retained (in US dollars in the United States or in freely remittable foreign currency) by Company from any distributor, subdistributor, or other licensee for the right to distribute. exhibit, or otherwise exploit the Picture and the ancillary, allied and subsidiary rights therein in any media. 'Producer's Gross Receipts' shall be net of any distribution fees, sales agency fees or commissions. distribution expenses and any other deductions made by the distributor(s)/ financiers of the Picture. No advance or security deposit paid to Company by any entity shall constitute Producer's Gross Receipts until non-refundable. 'Sale" means any license, grant, or sale. Producer's Gross Receipts are subject to adjustments for refunds, rebates, credits, settlements, and discount.

(b) Outright Sale: If Company sells all or any part of Company's rights for an amount that is not computed by reference to the purchaser's revenues, then (subject to subparagraph IV(aXviii) below) Company shall cause Company's net receipts from such sale to be included in Producer's Gross Receipts, aid Participant shall have no further interest in the purchaser's revenues from the use of such rights.

III. Off the Tops: 'Off the Top? means the aggregate of the following amounts incurred by Company (determined on a continuing basis):

26

(i)Taxes — Taxes, excises and imposts of any kind (and payments and expenses in contesting, compromising or settling any of them, together with any interest and penalties with respect thereto imposed by any taxing authority) on or with respect to the Picture or the associated prints, physical properties. trailers, advertising accessories or underlying literary properties, or any use or exhibition of the foregoing, or any of the Producer's Gross Receipts or the receipt, payment or remittance thereof, provided that no income or similar taxes paid by Company shall be included hereunder.

(ii)Duties — All duties, tariffs, customs charges, import taxes and like charges paid or incurred in cormection with the Picture.

(iii) Guild Payments — All costs incurred with respect to payments required under applicable collective bargaining agreements, including, but not limited to, employer fringe benefits, residuals, royalties and taxes payable with respect thereto, by reason of or as a condition to any exhibition of the Picture, or any part thereof, or any use or reuse thereof for any purpose or in any media whatsoever.

(iv) Conversion Costs — All casts arxl expenses associated with the conversion of foreign currency into United States dollars.

(v)Trade Associations Dues and  Industry Assr^.ssmeras — Dues, fees and contributions (to the extent reasonably allocated by Company to the Picture) payable to the MPAA, AMPTP and MPEA or any similarly constituted or substitute authorities or organizations, or their respective successors. and a reasonably allocable portion of industry assessments, including, without limitation. industry campaigns, contributions to legal fees and related overhead of counsel retained to monitor and investigate copyright infringement, and awards, settlements, judgments and legal fees and other costs incurred in connection with antitrust or similar proceedings.

(vi)       Collection Costs — All costs incurred in connection with the collection of monies-includable within the Producer's Gross Receipts, including reasonable fees of attorneys and auditors, and losses, damages or liabilities suffered or incurred by Company (or its affiliates) in the collection of such monies, whether by litigation or otherwise.

(vii)Checking Costs — All costs incurred to check attendance and receipts at theaters in order to determine the accuracy of box office reports and to investi­gate unauthorized exhibition or distribution of the Picture and to determine full utilization of rights granted, whether such cons are direct expenses or an allocable portion of the aggregate general checking expenses incurred by Company in connection with the production and distribution of motion pictures.

IV.Distribution Fees:

(a) 'Distribution Fees" arc the following percentages of the applicable Producer's Gross Receipts (inclusive of the distribution fees payable to third party subdistributors and licensees; provided that if the fees payable to such third parties are higher than the following amounts, then such higher amounts shall apply):

(i)Domestic theatrical — 30%

(ii)Domestic network television — 25%

(iii)DOmestic television syndication includic Basic Cable — 35%

(iv)Domestic pay television — 25%

(v)Domestic Video — 30%

(vi)Foreign Video — 25%

(vii)Foreign outright sales described in subparagraph II(b) above — 15%

(viii)From outright sales descrⁱbed in subparagraph I1(b) above — 15%

(ix)Revenues derived from music and publishing royalties and like sources —50%

(x) If a third party exploits the merchandising rights to the Picture and/or Property (or any element thereof) 10% calculated 'at source' (i.e., 10% of the gross receipts received by such third party as opposed to Producer's Gross Receipts);or

If Company exploits such merchardisi.ng rights — 35%;

(xi)All other revenue — 50%

Notwithstanding the above distribution fee structure, if Company shall license the Picture to a subdistributor in any country or territory. Company, in its sole discretion, shall have the right to receive, at any time and from time to time, a distribution fee of 15% on the net proceeds actually received and retained by Company from such subdistributor in lieu of the distribution fees set forth in subparagraphs (i). (ii), (iii), (iv), (v), (vi). (vii), Cix) and (xi) above. If Company does not make such election, the fees set forth in said subparagraphs shall be inclusive of any distribution fees which Company shall pay to any third parties with respect to the income concerned and shall be taken on the gross receipts received by the subdistributor involved in lieu of the money received by Company from such subdistributor (i.e., in lieu of Producer's Gross Receipts). In addition, if Company also engages a sales agent to sell the Picture, then any sales agency fee or commission payable to such sales agent shall be deducted 'off-the-tor from Producer's Gross Receipts, and Company's distribution fee with respect to the sales made by such sales agent only, shall be reduced to an amount equal to 5% of Producer's Gross Receipts received and retained by Company.

(b) Notwithstanding subparagraph (a) above, if the first project produced based on the Property is a television series, the following percentages of the applicable Producer's Gross Receipt shall constitute Company's Distribution Fees:

(i)   For a Series initially produced for and telecast on U.S. network primetime free television — 10%

(ii)   For the initial U.S. pay television exhibition or for a U.S. network primetime free television telecast (if not initially produced and telecast therefor) — 25%

(iii)   For any U.S. free television sale other than the foregoing (including syndication and basic cable) in the U.S. — 35%

(iv)    For any sale outside of the U.S. — 40%

27

(v)    For any free television sale in the United States other than on a national network — 40%

(vi)    For any outright sale specified in subparagraphs II(b) — 15%

(vii)    Forany theatrical or nontheatrical direct projection sale — 40%

(xii)   If a third party exploits the merchandising rights thereto  — 10% calculated 'at source' (i.e., 10% of the gross receipts recceived by such third party as opposed to Producer's Gross Receipts); or If Company exploits such merchandising rights — 35%;

(viii)   For soundtrack, publishing or any other sale or use not specified above — 50%

V. Distribution Expenses: 'Distribution Expenses' means all costs and expenses incurred by Company and any other costs and expenses incurred, advanced or paid by Company to or on behalf of any distributor. s-ubdistributar, other licensee or sales agent of the Picture (individually and collectively. "Distributor') in connection with the distribution

and exhibition of the Picture in all media, and all mariufacmring, distribution, and other costs incurred by Company in connection with the exploitation of ancillary, allied and subsidiary rights, including but not limited to:

Any rerun, use, residual, royalty, or other payment with respect to any person or any right to the extent not included pursuant to paragraph and any payroll tax or union fringe benefit payment in connection therewith;

  Any cost in connection with the preparation, making, duplication, editing, cutting, dubbing, subtitling, possession, packing, inspection, repair, storage, protection, and shipment (such as to or from any laboratory. Distributor, or licensee, including the payment of any customs, fees, taxes, or imposts in connection therewith) or any negative or positive film materials, audio or video tape, still photograph, script, continuity sheet, or cue sheet, including but not limited In, costs of facilities, laboratory work, raw film or raw audio or video tape stock, reels, containers, and other materials or services;

(c)Advertising, publicity.or promotion costs, allowances or other expenses.

(d)Any agency package fee or commis-stet;

(e) Any tax levied upon, payable with respect to, or arising in connection with the exploitation, use, distribution, revenues, or materials of the Picture, including, but not limited to, sales, Producer's Gross Receipts, turnover, withholding, remittance, excise, use, and personal property or similar taxes, to the extent not included pursuant to paragraph B.111(i), but excluding any net income, corporate, franchise or excess profits tax;

(f) Any cost of converting, transmitting, or remitting currency to the extent riot included pursuant to paragraph B.1110v);

(g) Any cost of collecting money from, checking the receipts or costs of auditing any Distributor to the extent not included pursuant to paragraph 13.111(vi);

(h) Any cost in connection with any claim brought by or against any Distributor or licensee to the extent not included pursuant to paragraph B.E1(vi);

(i)  Any amount charged to Company by any Distributor;

(j) Any governmental fee or the cost of any governmental license or permit, including, but not limited to, those required for import, export, licensing, exhibition, or censorship, or the cost of contesting any of the same or any other regulation or law affecting the Picture;

    (k)  Any cost of obtaining. maintaining, protecting, or registering any intangible rights, including, but not limited DI copyrights. trademarks, and trade names, in connection with the Picture. Cost of protecting the Picture, or any materials in connection with the Picture, physically or from legal encumbrance, by security mea^sures, legal action, or otherwise;

  (m)Any legal and accounting fees or court costs in connection with the Picture;

  (n)Any cost of errors-and-omissions insurance or insurance covering physical materials; and

  (o) Trade association dues and assr'ss­menu, and support payments to industry academies or institutions to the extent rot included pursuant to paragraph B.B1(v).

 (p) Any fees, commissions, costs and expenses in connection with the marketing, distribution, sale, license or manufacmre of merchandising and other ancillary, allied and subsidiary rights.

VI. Production Cost: 'Production Cost" means all costs and expenses in connection with 'Production' (which  is deemed to include the development, pre-prcdoation, production, and post-production of the Picture), including, without limitation:

 (a) Any cost of a type listed in paragraph B.V if incurred in COODCal011 with Production rather than distribution (it being understood that any particular item included in Production Cost may not also be included a second time as a second time as a Distribution Expense);

(b) Any cost for the right to use or purchase facilities, equipment, materials or services ('above the line,' 'below the line,' or other) intended to be used in connection with Production;

(c)Any cost of writing, or of rights to use underlying literary, artistic, musical, or intellectual property or materials, intended to be used in connection with the Picture; together with all executive or creative royalties payable with respect thereto;

(d)Any financing costs find fees;

 (e) Individual producer and/or executive producer fees (whether fixed or contingent) payable to Company, Scott Rosenberg, or any other individual for their distinguished from overhead; to determine all terms of each agreement, if any, for the distribution of Picture, or the exploitation of subsidiary rights, including, but not limited to, all terms affecting time, place, medium, frequency of use, and payment; to settle any claim with aspect to any such agreement or with respect to the Picture; to retain reasonable portions of PAGR as reserves for contingent, uncomputed, or retroactive debts; and to commingle funds applicable to pay­ments hereunder with other funds owned or held by Company. Company makes no representation or warranty with respect to Company's efforts in connection with the distribution of the Picture or exploitation of subsidiary rights, or that such distribution or exploitation will result in any minimum amount of Producer's Gross Receipts or PAGR.

28

VIDEO DEVICES

Notwithstanding anything to the contrary in the foregoing, if Company retains the right to manufacture and distribute the Picture on video cassettes, video tapes, video discs and similar compact audiovisual devices, in any format, whether now known or hereafter devised, intended to be sold or leased to the public as a device intended primarily for 'home use (as such term is commonly understood in the motion picture industry) (collectively, 'Video Devices"),

Producer's GrossReceipts shall include an amount

determined as follows:

 1. An amount equivalent to twenty percent (20%) of the wholesale price (excluding Federal Excise Taxes, or the equivalent thereof, local taxes, if any, and standard container charges) actually received by Company for such Video Devices manufactured and sold in the United States, subject to customary proration and reductions (including, without limitation, reductions for 'sell-through' distribution of Video Devices).

2.As to Video Devices sold outside the United States, the amount included in Producer's Gross Receipts shall be the amount referred to in subparagraph 1 above and shall be calculated, at Company's election, upon the wholesale price of such Video Devices in the country of manufacture, the United States, England, or the country of sale. The aforesaid amount shall be computed in the national currency of the country to which the wholesale price so elected applies and shall be paid at the same rate of rirrh_Ange as Company is paid; provided, however, that such amounts on such Video Devices shall not be included in Producer's Gross Receipts until payment therefore has actually been received by Company in the United States (or in freely remittable foreign currency).

3.In respect of Video Devices sold through any 'clubs' or similar sales plans and devices, the amount included in Producer's Gross Receipts shall be one-half (1/2) of that referred to in subparagraphs 1 and 2 of this exhibit depending upon where such Video Devices are sold; provided, that there shall be no amount included in Producer's Gross Receipts with respect to Video Devices given to members of such clubs as 'bonus' or 'free' Video Devices as a result of joining the club and/or purchasing a required number of Video Devices. No amount included in Producers Gross Receipts shall be computed with respect W Video Devices given away or furnished on a no charge' basis to dealers or others.

4.Company shall have the right to deduct and to reserve for returns (such returns to be self-liquid^gfing) and credits of any nature, including, without limitation, those on account of one hundred percent (100%) or a lesser return privilege, defective merchandise, exchange privilege. promotional credits, errors in billing, unusual overstock and errors in shipping.

C-4

EX-10.10

HOME OFFICE

1966 Greenspring Drive

Suite 300

Timonium, MD 21093

Tel. (410) 560-7100

Fax. (410) 560-7148

Web Site: www.diamondcomics.com

Thursday, August 30, 2007

Dear Vendor,

Below is our understanding of the terms of sale between Diamond Comic Distributors, Inc. and your company.  If you are in agreement with these terms, we ask that you pleas sign in the space provided at the bottom of this form, and return this form to us at your earliest convenience.  If for any reason you disagree with any part of the information contained on this form, please contact your Brand Manager at (410) 560-7100 for clarification, or draft what you believe your terms to be, and either return your draft with this form to the address above or fax them both to (410) 560-7589.

Vendor Number:	7691  Consignment Vendor
Company Name:	PLATINUM STUDIOS
Make Checks Payable To:	PLATINUM STUDIOS INC
Remittance Address1:	11400 W.  OLYMPIC BLVD, 14TH FLOOR
Remittance Address2:
City: LOS ANGELES	State: CA	Zip Code: 90064	Country: USA
Main Contact:	ADAM ROSENBLUM	Title: EDITOR IN CHIEF
Phone No.:	310-940-5600	Fax No.: 310.276.2799	Email Address: adam_rosenblum@platinumstudios.com
Transportation Contact:		Title:
Phone No.:		Fax No.:	Email Address:
Advertising Contact:		Title
Phone No.:		Fax No.:	Email Address:
Purchasing Contact:		Title:
Phone No.:		Fax No.:	Email Address:
Send PO Via:	xE-mail	ð Fax	ð USPS	ð Other

Discount / Terms

Net Cost or Base Discount	ð Net Cost	ð Base Discount 60%
Billing Terms:	NET 30	ð Early Discount Allowed
Comments:

Shipping Terms

Freight Term	x Freight Paid	ð FOB Hong Kong	ð Freight Allow
	ð Plus Freight	ð Freight Rebate	ð Other

Manufactured At:
Phone No.:	Fax No.:	Email Address:

Shipping Loc (if different from manufacturing loc):
Phone No.:	Fax No.:	Email Address:

Ordering Information

ð Do we need to order in increments or case qtys? Increments

How many different shipping points do you allow? All

Drop Ship Requirements/Minimum

Reorder Increments/Minimum

Previews Information

Previews Vol. No:	Previews No.:	Brand Manager: Jay Spence	Ext: 272
Product Discount:	Product Category: Category Not On File
	Initial Title Listed:

Brian K Altounian	President/COO	8/30/07
Vendor Authorized Signature	Title	Date
Team Leader Approval	Date Approved

1

HOME OFFICE

1966 Greenspring Drive

Suite 300

Timonium, MD 21093

Tel. (410) 560-7100

Fax. (410) 560-7148

Web Site: www.diamondcomics.com

Thursday, August 30, 2007

7691

PLATINUM STUDIOS

11400 W. OLYMPIC BLVD, 14^TH FLOOR

LOS ANGELES	CA           90064-	USA
Contact: ADAM ROSENBLUM	Title: EDITOR IN CHIEF	Phone No.: 310-940-5600

If information above is incorrect please type or print correct information below.

Company Name:

Address:

City:	State:	Zip Code:	Country:
Contact:	Title:	Phone Number:

The Internal Revenue Code requires the filing of Form 1099 for payment of services performed by all non-corporate entities and law firms.  Further, the Code requires backup withholding on all reportable 1099 payments unless your taxpayer identification number is provided.  To avoid this withholding on future payments to you, please complete item #1 or item #2 below, sign the completed form, and return it promptly to our Accounts Payable Department via mail or you may fax it to (410) 560-7145.

1)   ð  This company is a corporation – Form 1099 should not be filed (Except for law firms.

Federal Employer Identification Number:

2)   ð This company is not a corporation – Form 1099 should not be filed

Federal Employer Identification Number or Social Security Number

Please check the nature of your organization

ð Individual  ð Government Agency ð Partnership ð Tax Exempt ð Other

ð LLC  (If LLC, what type of entity is this for tax purposes?)

Brian K. Altounian	President/COO
Signature	Titile
8/30/07	310-807-8188
Date	Phone Number

2

PURCHASE ORDER TERMS

Diamond Comic Distributors, Inc.’s Purchase Oder Terms are to be maintained by Vendor in its permanent file and all orders placed by Diamond Comic Distributors, Inc. with Vendor shall be accepted by Vender under the terms and conditions of this document.  These Purchase Order Terms supersede all prior written or oral agreements.

Diamond Comic Distributors, Inc. (“DCD”)shall place all orders with Vendor by any number of means including, but not limited to, mail courier, facsimile transmission or other electronic means, and all such orders shall be construed as being subject to this document.

Vendor shall e deemed to have accepted Diamond’s Purchase Order under the terms and conditions stated herein unless Vendor notifies the DCD Order Processing Department in writing within five (5) days of the receipt of the Purchase Order.  Upon notification DCD will either cancel the existing Purchase Order and decide whether to place a new Purchase Order, or accept the product on a returnable basis subject to fees and conditions outlined below.

If the product and or invoice is received with a different retail price, terms, or other documentation than stated on the Purchase Order, DCD may accept the most favorable terms and/or pay the lower of the two prices and all products will be fully returnable.

In the event that DCD accepts products on  a returnable basis, DCD reserves their right, at its sole discretions, to withhold payment for such products, for up to 120 days from receipt of goods, and impose on Vendor a processing fee of $100.

Vendor shall include a packing list with each shipment to include title, DCD item code, quantity shipped and DCD’s purchase order number.

Upon shipment of product, an invoice must be sent to:

Diamond Comic Distributors, Inc.

1699 Greenspring Drive – Suite 300

Timonium, MD 21093

(Invoices should not be included with shipments, as this will result in delay of payment.)

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Notwithstanding orders for Themed Products (as hereinafter defined), any Purchase Order for a product which Diamond is ordering for the first time (“Initial Oder”) shall be valid for a period of thirty (30) days after the Vendor solicited ship month, after which date the Purchase Order shall void and no further force or effect.

If a Purchase Order is placed after the Initial Order for the same product (“Reorder”) the Reorder must ship within fourteen (14) days of the Initial Order shipment, or within fourteen (14) days of the order date printed on the Reorder, whichever date is later.  Any such reorders that do not ship within the above described time frame will be cancelled , or if indicated by DCD in writing, accepted on a fully returnable basis.

DCD requires that any and all items are related to holidays or other media events (“Themed Products”) must ship at least twenty one (21) days prior to said holiday or event.  Any such Themed Product that do not ship within the above described time frame will be canceled, or if indicated by DCD in writing accepted on a fully returnable basis.

In the event Vendor ships product to DCD which has not been ordered by DCD, Vendor assumes all risks for the product.  DCD shall be under no obligation to receive , store , secure, inventory, or return such unsolicited product to Vendor. DCD shall not be obligated to make any payment to such unsolicited product under any circumstances.

By accepting DCD’s Purchase Order, Vendor hereby warrants to DCD that (i) it owns all rights to market and sell the products to DCD as described in the Purchase order; (ii) said products will be of good and salable quality; and are free of all liens, claims and encumbrances; (iii) said products conform to affirmations of fact made by Seller in its solicitations, catalogs and product descriptions; and (iv) said products are adequately contained, packed and labeled in compliance with law and conform to the promises and affirmations f fact made to the container and label.  Vendor further agrees to indemnify and hold DCD, its agents, affiliates and subsidiaries (collectively “DCD”) harmless, from and against any loss damage or expense suffered by DCD, including reasonable attorneys’ fees and costs, by reason of breach by Vendor  of the warranties contained herein or any act or omission of Vendor or allegation of trademark, copyright or patent infringements, defect in material, workmanship or design, personal injury, property damage , unfair competition, obscenity, libel or other invaded right, either alone or in combination, and any settlement, judgment or payment with respect to any claim, lawsuit or cause of action against DCD as a result thereof.  In addition to and not in limitation of any rights DCD may have under this paragraph by law or statute, in the event a claim or allegation is made against DCD regarding any of the above or if Vendor breaches the warranties contained herein, DCD shall have the right, in its sole discretion, or either receive quantities DCD ordered, cancel the Purchase Order without further obligation on its part, or return the products’ to the Vendor for a full refund.  Vendor shall reimburse DCD for all costs incurred due to the above.

Shipments of product shall be delivered F.O.B to the location(s) designated on the Purchase Order, unless other arrangements have been agreed to by DCD, in writing.

Shipments from International Vendors must be shipped “deliver duty paid (DDP)”.

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The Purchase Order shall be governed by the laws of the State of Maryland, excepting the conflict of laws rules of the State. In the event of any litigation arising out of the Purchase Order, Vendor hereby agrees that jurisdiction and venue shall rest exclusively within the courts of the State of Maryland, including the United States District Court for the District of Maryland.

If any term or provision of these Purchase Order Terms are held by a court to be invalid, void, or unenforceable, the remainder of the terms and provisions of these Purchase Order Terms shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Vendor shall not assign or transfer the Purchase Order or any part thereof or any right here/thereunder without DCD’s prior written consent.

These Purchase Order Terms are intended by the parties to be a final, exclusive and complete statement of the terms of their agreement, and acceptance is expressly limited to the terms stated herein.  Neither trade usage nor any terms and conditions that may be contained in any acknowledgment, invoice or other documentation of Vendor, nor course of prior dealing between the parties shall be relevant to supplemented or explain any terms used in the Purchase Order.  Should Vendor have any questions as to the meaning of any terminology or  phrasing used in these Purchase Order Terms, Vendor shall get clarification from DCD.  DCD’s Purchase Order Terms shall constitute the entire agreement between the parties and may not be modified or rescinded except by a writing signed by both parties.

Accepted By:

Bill Schames	Brian K Altounian/President/COO
Diamond Comic Distributors Inc.	Name/Title
Vice Presiden, Purchasing	Platinum Studios, Inc.
Title	Company
8/31/07	8/30/07
Date	Date

My signature indicates that I have read Diamond’s three (3) page “PURCHASE ORDER TERMS” (  POTERMS-003) and agree to be bound by al terms and conditions contained therein.  I also attest that I have made a true and exact copy for my records.

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EX-10.11

Exhibit 10.11

LICENSING, SERVICES AND SPONSORSHIP AGREEMENT

THIS LICENSING, SERVICES AND SPONSORSHIP AGREEMENT (“Agreement”), made and entered into as of this 29th day of May, 2007 (“Effective Date”), by and between AT&T Operations, Inc. (“AT&T”), a Delaware Corporation, having an address at 530 McCullough, San Antonio, TX 78215, and Platinum Studios, Inc. (“Platinum”), a California corporation, with its principal place of business at 11400 West Olympic Boulevard, 14^th Floor, Los Angeles, CA 90064.

A. WHEREAS, Platinum is hosting the annual Platinum Studios Comic Book Challenge for the years 2007, 2008 and 2009, involving a contest requiring the submission by contestants of comic book concepts and artwork;

B. WHEREAS, AT&T desires to become the “Presenting Sponsor” of the CBC for the years 2007, 2008 and 2009, and to provide certain services related to the voting mechanism and tabulation of votes in connection therewith; and

C. WHEREAS, in return for a fee payable by AT&T, as described in greater detail herein, Platinum desires to acknowledge AT&T as the “Presenting Sponsor” of the CBC for the years 2007, 2008 and 2009, in the manner and on the terms set forth in this Agreement, and to allow AT&T to provide certain voting services related to the CBC.

NOW, THEREFORE, for and in consideration of the recitals and of the mutual promises and covenants herein contained, the parties do hereby agree as follows:

1. Selected Definitions.

(a)  “Approved Promotional Outlets” means those television, print, and Internet-based media outlets or entities that are listed in the attached Exhibit A.

(b) “AT&T Competitor” means any utility or provider or carrier of telephonic or similar services whether wire-line, wireless and/or cable in the United States, including without limitation mobile virtual network operators and mobile network providers.  Examples of AT&T Competitors include, without limitation Verizon, Sprint, Comcast, Time Warner and America-On-Line.

(c) “AT&T Marks” shall mean the trademarks of AT&T and/or its affiliates, together with such other names, initials, logos, designs, service marks, and all other intellectual property rights and forms of identification which identify AT&T, its affiliates and/or the products and services of any of the foregoing.

(d) “CBC” or “Comic Book Challenge” means the Platinum Studios Comic Book Challenge contest that occurs during the Term, which involves the submission by each contestant of a one-page description of an original comic book concept and one completed sample of comic book art related to such concept, the precise details of which contest are set forth on Platinum’s official website related thereto at the URL “http://www.comicbookchallenge.com.”  For purposes of this Agreement, all uses of the term, “CBC” or “Comic Book Challenge” shall be deemed to refer to the Platinum Studios Comic Book Challenge for each of the years 2007, 2008 and 2009, unless expressly stated otherwise herein.

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(e) “CBC A/V Materials” means the audio, audiovisual and video footage, and still photography, shot or filmed in any form or format by AT&T in connection with the auditions of CBC contestants, or otherwise related to CBC, including without limitation, contestant interviews and video clips depicting samples of CBC content.

(f) “CBC Content” means the one-page description of comic book concept, original artwork and any other materials submitted/required to be submitted by CBC contestants.

(g) “CBC Logo” means the official logo for the CBC 2007, as set forth in the attached Exhibit D, which logo may be changed by Platinum for CBC 2008 and/or 2009 by written notice to AT&T and which logo is included within the Platinum Marks.

(h) “Grand Prize Winner” means the winner of the CBC as voted upon and chosen by the public, in the manner described in this Agreement, from among the top 50 contestants, which individual will be compensated or paid by Platinum to write and/or illustrate his/her full comic, which Platinum shall cause to be published as a comic book or graphic movie.

(i) “Platinum Marks” shall have the meaning set forth in Section 7(a) hereof.

(j) “Voting System” means AT&T’s proprietary system of registering and tabulating votes from users of the AT&T blue room portal or other AT&T platforms (subject to the approval of Platinum, not to be unreasonably withheld), which system will be the exclusive means of registering and tabulating votes for the top 3 finalists and Grand Prize Winner of the CBC.

(k) “Unsuitable Categories” includes all services, brands, companies, or products that are: (1) generally deemed to be in “bad taste” by commercial standards, including but not limited to: pornography (nudity), sex-related categories (including without limitation, birth control, i.e. condoms, and Viagra, and comparable medications), prescription medication, firearms, tobacco (including without limitation smokeless tobacco), narcotic paraphernalia (including without limitation, “rolling papers” and “pipes”), gambling, hemorrhoid therapy, feminine hygiene, and any others that are derogatory to, or otherwise disparage, AT&T, any of its affiliates or any country, state, or government; and/or (2) associated with political parties or causes.

2. Grant of Exclusive Presenting Sponsorship Rights.  Throughout the Term (as defined in Section 5, below):

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(a) Platinum, hereby grants to AT&T, the non-sublicenseable, non-transferable (except as provided in Section 24 hereof) exclusive right to be the “Presenting Sponsor” for the CBC;

(b) No third-party will be granted promotional or sponsorship rights with respect to the CBC that cause such party to be perceived as a more prominent sponsor than AT&T;

(c) Except as expressly provided in Section 10(c) hereof, no AT&T Competitor will be granted any sponsorship rights with respect to the CBC, nor will any AT&T Competitor be granted any rights to be associated with the CBC, or otherwise be granted any rights to utilize content, imagery, trademarks, logos or other intellectual property related to the CBC; and

3. Grant of Licenses to Use the Platinum Marks and the AT&T Marks.

(a) During the Term, subject in all instances to Section 7 hereof, Platinum grants to AT&T a limited, non-sublicenseable (except as expressly provided herein), non-transferable (except as provided in Section 24 hereof) license to use the Platinum Marks in connection with the advertisement and promotion of the CBC and AT&T’s sponsorship thereof (in all media forms and on all platforms, whether now existing or hereafter created, including without limitation, on AT&T’s blue room web site (hereinafter referred to as, “AT&T’s blue room” or “AT&T’s blue room portal”) and other website(s), and on any and all wireless platforms and media and video-on-demand services).  AT&T shall have the right to grant a sublicense, on the same terms as the license granted to it in the immediately-preceding sentence, to its affiliates, agents and/or contractors to use the Platinum Marks solely for the purpose of carrying out the sponsorship activities under, or contemplated by, this Agreement. Platinum agrees that during the Term, it will not grant to any AT&T Competitor any right or license to use the Platinum Marks in connection with the advertisement or promotion of the CBC in any media or on any platform (whether now existing or hereafter created); provided, however, that, except as provided in Section 2, above, nothing contained in this Agreement shall preclude Platinum from granting such right or any other rights to any third party other than an AT&T Competitor. AT&T acknowledges that no rights (whether express or implied) to the Platinum Marks are being granted to AT&T other than the limited right to use the Platinum Marks as expressly set forth in this Section 3(a).  All other rights in and to the Platinum Marks are expressly reserved by Platinum.

(b) During the Term, AT&T grants to Platinum a limited, non-exclusive, non-sublicenseable, non-transferable license to use the AT&T Marks solely for purposes of advertising and promoting AT&T as the Presenting Sponsor of CBC on the Approved Promotional Outlets only and subject in all instances to Section 6 hereof. Platinum acknowledges that no rights (whether express or implied) to the AT&T Marks are being granted to Platinum other than the limited right to use the AT&T Marks as expressly set forth in this Section 3(b).  All other rights in and to the AT&T Marks are expressly reserved by AT&T.

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4. Consideration and Other Compensation.

(a) In consideration of the rights granted to AT&T by Platinum with respect to CBC 2007, AT&T agrees to pay to Platinum a fee in the amount of One Hundred Fifty Thousand Dollars ($150,000) (“2007 Fee”), which amount shall be payable within five (5) business days after the Effective Date. In consideration of the rights granted to AT&T by Platinum with respect to the CBC 2008 and 2009, AT&T agrees to pay Platinum fees in the amount of Two Hundred Fifty Thousand Dollars ($250,000) (“2008 Fee”) and Three Hundred Thousand Dollars ($300,000) (“2009 Fee”; the 2007 Fee, 2008 Fee and 2009 Fee are sometimes referred to collectively herein as the “Fee”), respectively, which amounts shall be payable as follows:

(i) 2008 Fee: 50% of such fee to be paid by January 11, 2008 and the remaining 50% to be paid by May 1, 2008.

(ii) 2009 Fee: 50% of such fee to be paid by January 9, 2009 and the remaining 50% to be paid by May 1, 2009.

(b) Payments under this Agreement will be made via wire transfer as follows:

Payee:  Platinum Studios, Inc.

Bank Name:  City National Bank

Bank Address:  400 N. Rexford, Beverly Hills, CA 90210                   

Account Number:  112-643532 

ABA Routing Number:  122016066 

(c) In the event that the parties locate and mutually agree upon a major television network to pay for the production of, and to broadcast and distribute, a special television program related to the CBC (the “CBC TV Special”), the parties shall share equally all net revenues realized from the commercial exploitation of such program, including, without limitation, sponsor and advertising fees.  The mechanism and procedure for the accounting, payment and sharing of such fees shall be set forth in a separate written agreement between the parties.  Notwithstanding anything to the contrary, neither party shall enter into any agreement with a third party for the broadcast and/or distribution of the CBC TV Special or any similar television program based upon the CBC A/V Materials without the prior written approval of the other party, which approval shall not be unreasonably withheld.

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(d) In connection with the sale of advertising space on AT&T’s blue room and its other consumer platforms that solely promote the CBC Content, both parties shall use reasonable commercial efforts to sell and solicit potential third-party advertisers, and  AT&T shall be the primary point of contact for entering into contracts with such advertisers and collecting revenue and shall make all decisions regarding entering into, and the terms of, such contracts.  Platinum and AT&T shall each notify the other in writing at least five (5) days prior to contacting or soliciting any potential advertiser, and neither party knowingly shall continue to solicit, or initiate contact with any potential advertiser that has been initially contacted by the other party.  For CBC 2007, AT&T will pay Platinum the first Three Hundred Thousand Dollars ($300,000) of Net Advertising Revenue (as defined herein) actually received by AT&T, and the parties shall share equally in such Net Advertising Revenue actually received by AT&T in excess of such amount.  For purposes of this Agreement, the term, “Net Advertising Revenue” shall mean the gross amount of all advertising revenue received by AT&T based upon the sales of advertising by AT&T and Platinum on AT&T’s blue room, AT&T’s web pages solely related to the promotion of the CBC and/or the CBC Content and its other consumer platforms that solely promote the CBC and/or the CBC Content, less any third-party fees (not to exceed 15% of such gross revenues).  For CBC 2008 and 2009, the parties will share equally in all Net Advertising Revenue received by AT&T.  AT&T shall provide to Platinum an accounting of Net Advertising Revenue on a monthly basis during The Term.

5. Term; Termination for Convenience or Based Upon the CBC Content.  The term of this Agreement (the “Term”) shall commence on the Effective Date and conclude on September 30, 2009, unless earlier terminated as set forth below or as otherwise provided in this Agreement. Notwithstanding anything to the contrary, AT&T shall have the right to terminate this Agreement upon ten (10) days written notice to Platinum as follows:

(a) At any time prior to October 31, 2007 (with respect to both CBC 2008 and 2009), and

(b) At any time prior to October 31, 2008 (with respect to CBC 2009).

In the event of termination by AT&T for as described in this Section, AT&T shall not be obligated to pay any portions of the Fee not yet paid.  In order to allow AT&T to exercise its review rights, as set forth below, Platinum agrees to provide the CBC Content for each of the top 50 CBC contestants for the 2007 CBC to AT&T for review on or prior to June 13, 2007 and at least five (5) days prior to notifying any such contestant of his/her selection as being among the top 50 CBC contestants in 2008 and 2009 (such date in 2008 or 2009, as applicable, being referred to hereinafter as the “Review Date”). In addition, and without limiting the foregoing, AT&T shall have the right to terminate this Agreement by written notice to Platinum (which may be by email) at any time between June 13, 2007 and two (2) business days thereafter for contract year 2007 and within two (2) business days after the applicable Review Date for each of contract year 2008 and 2009 in the event that AT&T determines, in its sole discretion, that (c) the overall amount of CBC Content from any of such contestants (or any specific element thereof) would cause such CBC Content to receive a more adult-oriented rating than PG-13 as such rating might be applied to such content by the Motion Picture Association of America (“MPAA”) based upon subject matter and/or storyline, or would otherwise reflect negatively upon, or disparage AT&T, any of its affiliates and/or the AT&T Marks, or (d) any prize or award to be provided to any of the top 10 CBC contestants by Platinum or any third party falls within any of the Unsuitable Categories.  In the event that AT&T exercises its termination rights under subsections (c) or (d) above,  then with respect to the CBC 2007 Fee (in the event that such termination right is exercised in contract year 2007), Platinum shall be entitled to receive 100% of the 2007 Fee (and none of either the 2008 Fee or 2009 Fee), and, with respect to either CBC 2008 or CBC 2009 (in the event that such termination right is exercised in contract year 2008 or 2009, as applicable),  Platinum shall be entitled to receive (or retain, as applicable) either 50% of the 2008 Fee or 50% of the 2009 Fee, respectively.  In addition, in the event of termination  of this Agreement by AT&T pursuant to this Section 5, Platinum will be free to solicit any and all additional sponsors, including, without limitation, a new presenting sponsor for the CBC.

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6. AT&T Marks Advertising Approval.

(a) Platinum acknowledges and agrees that AT&T has a paramount interest in maintaining and protecting the image and reputation of the AT&T Marks and that, in order to accomplish this purpose, AT&T must assure itself that the AT&T Marks are used only in a manner consistent with the standards established by AT&T. Platinum agrees that AT&T, therefore, shall have the right to examine and approve, in AT&T’s sole discretion, in advance of use and in writing, the content, appearance and presentation of any and all advertising, promotional and all other materials in any and all media and platforms, proposed to be used by Platinum and/or any Approved Promotional Outlet which incorporate the AT&T Marks or which make reference in any way to AT&T or any of its affiliates, whether or not in proximity to the CBC Logo. Platinum therefore agrees that it will not produce, publish, or in any manner use or distribute (or allow or sublicense any third party, including, without limitation, any Approved Promotional Outlet to do any of the foregoing) any such advertising, promotional materials or other items that have not, in each instance, been submitted to AT&T and approved in advance and in writing by AT&T.

(b) Platinum shall submit in advance of their use, a sample of each proposed item of advertising and promotional material and all other items that incorporate the AT&T Marks and/or that refer to AT&T or its affiliates, together with the script, text, coloring, storyboards and photographs proposed to be used in connection therewith (“Platinum Submissions”), to AT&T’s designated contact person for such purpose.  AT&T agrees to use reasonable commercial efforts such that, within five (5) days after its receipt of each Platinum Submission thereof, AT&T will examine and either approve or disapprove such submission.  Platinum shall be promptly notified of AT&T’s approval or disapproval. Such approval shall not be unreasonably withheld or delayed.  If any Platinum Submission is disapproved, Platinum will be advised of the specific reasons for disapproval in each case. Any Platinum Submissions submitted hereunder shall be deemed to have been disapproved if approval is not expressly granted in writing within such five (5) day period.  To the extent any Platinum Submission is disapproved, the parties will expeditiously hold a telephonic conference to address the specific reasons for disapproval.  After a Platinum Submission has been approved, Platinum may use such item(s) in accordance with this Agreement and solely in the form and manner in which such materials were approved.

(c) Any and all use of the AT&T Marks authorized by or pursuant to this Agreement will be subject to the provisions of this Section 6 and the restrictions related to Approved Promotional Outlets.

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7. Platinum Marks; Advertising Approval.

(a) AT&T acknowledges and agrees that Platinum has a paramount interest in maintaining and protecting the image and reputation of the Platinum Marks together with such other names, initials, logos, designs, trademarks, services marks, copyrights, and all other intellectual property rights and forms of identification which identify Platinum, CBC and/or Platinum’s other products, services and events (hereinafter referred to collectively as the "Platinum Marks"), and that in order to accomplish this purpose, Platinum must in all cases assure itself that the Platinum Marks are used only in a manner consistent with the standards established by Platinum.  AT&T agrees that Platinum, therefore, shall have the right to examine and to approve, in Platinum’s sole discretion, in advance of use and in writing the contents, appearance and presentation of any and all advertising, promotional and all other materials in any and all media or platforms, proposed to be used by AT&T in connection with any advertising or promotion utilizing the Platinum Marks.  AT&T agrees that it will not publish or in any manner use or distribute any such promotional or other materials that have not, in each instance, been submitted to and approved in writing and in advance by Platinum.

(b) AT&T shall, in advance of use, a sample of each proposed advertising, promotional materials and other materials that incorporate the Platinum Marks and/or that refer to Platinum, together with the script, text, coloring, storyboards, and photographs proposed (if any) to be used (“AT&T Submissions”).  Platinum agrees to use  reasonable commercial efforts such that, within five (5) days after Platinum’s receipt of each AT&T Submission, Platinum will examine and either approve or disapprove such submission.  AT&T shall be promptly notified of Platinum’s approval or disapproval.  Such approval shall not be unreasonably withheld or delayed.  If any submission is disapproved, AT&T will be advised of the specific reasons for disapproval in each case.  Any AT&T Submissions submitted hereunder shall be deemed to have been disapproved if approval is not expressly granted in writing within such five (5) day period. To the extent any AT&T Submission is disapproved, the parties will expeditiously hold a telephonic conference to address the specific reasons for disapproval.  After an AT&T Submission has been approved, AT&T may use such item(s) in accordance with this Agreement and solely in the form and manner in which such materials were approved.

(c) Any and all use by AT&T of the Platinum Marks authorized by this Agreement will be subject to the provisions of this Section 7.

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8. AT&T’s Sponsorship and Promotional Commitments.AT&T hereby agrees to the following in connection with its sponsorship of the CBC (for the avoidance of doubt, none of the following obligations shall apply with respect to any CBC that occurs following the exercise by AT&T of its termination rights under this Agreement):

(a) AT&T shall spend no less than fifty thousand dollars ($50,000) during the Term to produce, edit and deliver to Platinum and to publish and distribute CBC A/V Material.  AT&T will pay all production and set costs associated with the filming of the CBC A/V Materials, which expenses may be included within the sum of money described in the immediately-preceding sentence, as determined by AT&T in its sole discretion. AT&T will pay all hotel costs for its own employees and for all CBC A/V Materials production employees or independent contractors, and AT&T agrees that Platinum Studios will have no responsibility for such costs.   Except as expressly provided in this Section 8(a), in no event shall AT&T be responsible for any travel, hotel or other costs related to the CBC or any CBC contestants.

(b) AT&T shall include a promotion for the CBC in its “Up2Speed” newsletter that will be e-mailed to AT&T customers in the United States.  The Up2Speed newsletter will include CBC Content and refer such customers to AT&T’s “blue room” located at www.attblueroom.com.  In the event that the Up2Speed newsletter no longer exists or is changed prior to CBC 2008 and/or CBC 2009, AT&T can fulfill its obligations under this Section 8(b) by making a reasonable effort to substitute a similar promotion, subject to mutual agreement with Platinum, provided that any failure to so agree by the parties shall not be deemed a breach of this Agreement by AT&T.

(c) During the time period beginning on the Effective Date through August 31, 2007 with respect to CBC 2007, and from April 1 through August 31 with respect to each of CBC 2008 and CBC 2009, AT&T shall include promotional information within its bi-weekly emails to AT&T blue room users, and such information will recommend that such users view the CBC Content on AT&T’s blue room portal and/or otherwise encourage them to do so.  In the event that the bi-weekly newsletter no longer exists or is changed prior to CBC 2008 and/or CBC 2009, AT&T will make a reasonable effort to substitute a similar promotion, subject to mutual agreement with Platinum, provided that any failure to so agree by the parties shall not be deemed a breach of this Agreement by AT&T.

(d) AT&T may include a placement for the CBC 2007 in its catalog, to be circulated during such contest, which placement shall contain material promoting the presence of CBC Content on AT&T’s blue room.  In the event that such catalog or a similar type of catalog or direct mailing is circulated by AT&T during the CBC 2008 and CBC 2009, AT&T may, at its sole discretion, include a placement for each of such contests in such catalog or direct mailing, subject to the prior approval of Platinum, not to be unreasonably withheld

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(e) AT&T shall promote the CBC on the home page of the AT&T blue room, which promotion shall be in a prominent position “above the fold,” as that term is commonly understood with respect to internet website pages , and provided that Platinum shall have approval rights (which approval shall not be unreasonably withheld or delayed for more than one (1) business) over the “look and feel” of the AT&T blue room pages on which the CBC Content shall reside.  In the event that Platinum disapproves of such “look and feel,” the parties will promptly hold a telephonic conference to resolve such issue, provided that in the event that the parties cannot reach Agreement regarding such issue within such one (1) business day period, AT&T shall be entitled to post the CBC Content on such pages in a manner consistent with its normal standards for the posting of content on the AT&T blue room and in a manner consistent with the spirit of the CBC, which is to promote or portray comics creators in a first-class, professional and positive light.  Subject to the terms of this Agreement (including, without limitation, AT&T’s prior termination rights under Section 5 hereof), the CBC Content from the top 10 contestants  (which shall include, at a minimum, each such contestant’s one-page comic book artwork sample and a brief concept description) will be in place beginning upon the selection of such contestants by Platinum’s judges  In the event that AT&T’s blue room ceases to exist during the Term, AT&T can fulfill its obligations herein by substituting placement of the CBC Content on AT&T’s main entertainment web site in a position equivalent, or superior to, that described above with respect to AT&T’s blue room.

(f) AT&T shall be responsible for preparing and submitting to Platinum for its approval a form of Contestant Agreement and Release (“Release”), which form shall be submitted to Platinum not later than June 1, 2007.  Upon Platinum’s approval of the Release it shall be incorporated into this Agreement by reference and attached as Exhibit B hereto.

(g) AT&T shall provide Platinum with access to a beta taped copy of the CBC A/V Materials. AT&T shall grant Platinum all right, title and interest in and to the CBC A/V Materials, subject to the retained rights of AT&T to use such CBC A/V Materials during the Term, as specifically set forth in Section 10(c) of the Agreement and the other restrictions on Platinum’s use of such CBC A/V Materials set forth in Sections 10(c) and 31 (Non-Disparagement) hereof .

(h) In all uses of the Promotional Reference (as defined herein) by AT&T in any and all media, the term “Platinum Studios” must always appear with “CBC” or “Comic Book Challenge,” as applicable.

(i) Subject to the terms of this Agreement, AT&T shall provide the Voting System for the CBC.

9. Platinum’s Sponsorship and Promotional Commitments.  Platinum hereby agrees to the following in connection with the rights granted pursuant to this Agreement:

(a) Platinum shall host and conduct the CBC in a timely and professional manner, consistent with the highest industry standards.

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(b) Platinum shall review all CBC Content and shall ensure that the CBC Content submitted by the Top 50 contestants is original and that none of such content is defamatory, in violation of any third-party’s privacy or publicity rights, and that none of such content misappropriates or infringes upon any third-party’s intellectual property or proprietary rights.

(c) Platinum shall be solely responsible for obtaining and providing, at its sole cost and expense, any and all prizes or awards related to, or in connection with, the CBC, and Platinum shall provide to AT&T, within three (3) business days of Platinum’s determination of the nature of such prizes and/or awards, an accurate written description of such prizes and awards for the purpose of allowing AT&T to consider whether it wishes to exercise its termination rights under Section 5 hereof

(d) Platinum shall be responsible for securing, and paying all rental/location costs and fees related to,  CBC A/V Materials.  Platinum and  AT&T will work together to develop a  reasonably detailed report regarding the composition and visual layout of the set to be used for the filming of the CBC A/V Materials (which set shall be subject to the mutual approval of both Platinum Studios and AT&T, subject to the cost limitations set forth in Section 8(a) hereof,) not later than (2) weeks prior to the initial date of the shooting by AT&T of the CBC A/V Materials for each applicable CBC.

(e) Platinum will assist AT&T in locating and procuring a major television network (e.g., Spike, ABC, Sundance, etc.) for purposes of paying the production costs of, and broadcasting, the CBC TV Special based on any or all of CBC 2007, 2008 and/or 2009 (as determined by AT&T), such television program to be produced by AT&T in the event that such network is located and commits contractually to the foregoing.  Platinum agrees that the first party to engage such network in discussions regarding the foregoing shall serve as the primary point of contact, provided, however, that Platinum and AT&T shall notify each other in writing, at least five (5) days in advance of any contact or solicitation, regarding the identity of such network in order to avoid cross-solicitation.  Platinum and AT&T shall not initiate such contact with any network that the other has already contacted for such purpose, and, to the extent that the other is the primary point of contact, Platinum & AT&T shall keep each other fully informed and allow Platinum and AT&T to participate in all aspects of the negotiations with such network.

(f) Platinum shall ensure that each of the Top 50 contestants for the CBC executes the Release, and each applicable individual’s status as a top 50 contestant for the CBC shall be made expressly contingent upon the execution of the Release by such individual Platinum will obtain, process and provide AT&T with fully-executed copies of all Releases signed by all Top 50 CBC contestants prior to such contestants traveling to San Diego for the filming the CBC A/V Materials and the presentation of their respective CBC Content to the panel of judges

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(g) Platinum shall be solely responsible for ensuring that the CBC (including, without limitation, the conduct thereof), and any and all Promotional Sweepstakes as defined herein related thereto and CBC content submitted in connection therewith, complies with all applicable laws, regulatory and other legal requirements in all applicable jurisdictions (“Legal Requirements”).

(h) In connection with the CBC, including, without limitation, any and all sweepstakes and/or contests of skill related thereto (“Promotional Sweepstakes”), Platinum agrees that it shall be solely responsible for: (1) payment of all taxes and fulfillment of all tax reporting obligations arising from such Promotional Sweepstakes; (2) the operational and implementation elements of any Promotional Sweepstakes; (3) the distribution of any tickets or packages as Promotional Sweepstakes prizes or giveaways by Platinum; (4) prize fulfillment for any Promotional Sweepstakes; (5) legal compliance for any Promotional Sweepstakes in all applicable jurisdictions; (6) obtaining at its sole expense any necessary rights clearances and permissions for the content of any and all materials submitted in connection with, or constituting any part of, any Promotional Sweepstakes. Prior to the commencement of any Promotional Sweepstakes, Platinum agrees that it will provide to AT&T copies of the proposed official rules of such Promotional Sweepstakes for AT&T’s written approval, for legal and regulatory compliance, which approval shall be granted or withheld in AT&T’s reasonable discretion. Platinum warrants, represents and covenants that it will comply with all statutes, ordinances, rules and regulations applicable to the conduct of the Promotional Sweepstakes in any and all applicable jurisdictions.

EX-10.12

Exhibit 10.12

OPTION AGREEMENT

This Option Agreement is entered into and effective as of September 16, 2006 (the “Effective Date”), by and among Scott Mitchell Rosenberg (“SMR”), RIP Media, Inc. (“RIP”), a corporation wholly owned by SMR, and Platinum Studios, Inc., a California corporation (the “Company”), with reference to the following:

WHEREAS, the Company owns or controls one of the world’s largest independent library of comic book characters and stories which it will be exploiting across all media platforms;

WHEREAS, SMR is the Chief Executive Office, Chairman and majority shareholder of the Company;

WHEREAS, through RIP, SMR owns or controls a library of comic characters and stories, which were formally owned or controlled by Comics Holdings, LLC, formerly known as Awesome Comics, LLC and which are subject to existing third party rights and existing third party agreements described in Section 2 below (the “RIP Awesome Library”);

WHEREAS, the Company desires to have granted to it, and RIP desires to grant to the Company, certain option rights with respect to the RIP Awesome Library;

NOW, THEREFORE, the parties agree as follows:

1.           Option Grant. During the Term (defined below), for one dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, RIP hereby grants to the Company an exclusive option to enter into licensing/acquisition of rights agreements (the “Rights Agreements”) for individual characters within the RIP Awesome Library, subject to existing third party rights, it being acknowledged and agreed by all parties, that the terms of each such Rights Agreements shall be mutually agreeable terms and conditions that are considered normal and customary within the entertainment industry for contracts of this nature at the time and taking into account the nature of the characters and libraries that are the subject to the Rights Agreements and that, in any event, are substantially consistent with existing third party rights agreements entered into by the Company with respect to similar libraries and characters.   Each of SMR and RIP acknowledges and agrees that during the Term, it shall not exploit or otherwise grant to third parties the right to exploit, any of the RIP Awesome Library, nor sell or otherwise dispose of the RIP Awesome Library which is subject to the option granted hereunder, unless all Platinum rights hereunder are preserved and not terminated as a result of such sale or other disposition; provided that the parties acknowledge and agree that the foregoing shall not be deemed to restrict in any way the existence, exploitation and/or transfer of existing third party rights relating to the RIP Awesome Library and/or the characters therein.

2.           Company Acknowledgement.  The Company hereby acknowledges and agrees that neither SMR or RIP is making any representation or warranty of any kind with respect to the RIP Awesome Library, the characters therein or any other matter in connection with this Option Agreement.  The Company further acknowledges and agrees that (a) the characters and properties within the RIP Awesome Library as of the date hereof are subject to existing third party agreements, which third party agreements provide for potential changes in the characters and properties contained in the RIP Awesome Library as of the date hereof, (b) due to the terms of such third party agreements, the characters and properties contained in the RIP Awesome Library as of the date hereof may not be contained in the RIP Awesome Library in the future, and (c) any such changes in the characters and properties contained in the RIP Awesome Library due to such third party agreements shall in no event be deemed a breach by SMR or RIP of this Option Agreement.

3.           Term.  The term of this Agreement shall commence as of the Effective Date and shall continue in full force and effect until the date upon which SMR is no longer at least one of the following: (a) an executive officer of the Company; (b) a member of the Board of Directors of the Company, or (b) holder of at least 30% of the outstanding capital stock of the Company.

4.           Specific Performance.  Each of SMR and RIP acknowledges and agrees that any breach of this Agreement by SMR or RIP will cause irreparable damage to the Company and that in the event of such breach the Company shall have, in addition to any and all remedies of law, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of their respective obligations hereunder.

5.           Waiver.  Any waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision hereof.

6.           Governing Law; Attorneys’ Fees.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to principles of conflicts of law.  If any suit, action, or proceeding is brought to enforce any term or provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs, and expenses incurred, in addition to any other relief to which such party may be legally entitled.

7.           Entire Agreement.    This Agreement constitutes the only agreement or understanding between the parties with respect to the subject mater hereof, and supersedes and is controlling over any and all prior existing agreements, representations or communications between the parties. All negotiations, commitments, and understandings acceptable to both parties have been incorporated in this Agreement and the accompanying termination letter. 

8.           Amendment.    This Agreement may not be amended except as mutually agreed to in writing by the parties; provided that immediately upon the sale to a third party of a majority in interest of RIP or the rights controlled by RIP in a manner permitted by this Option Agreement, this Option Agreement shall automatically be deemed amended to remove SMR as a party hereto.

IN WITNESS WHEREOF, the parties to this Agreement have executed the same as of the date first above written.

Platinum Studios, Inc.

By:  /s/ Brian Altounian

Brian Altounian, President

/s/ Scott Mitchell Rosenberg

Scott Mitchell Rosenberg

RIP Media, Inc.

By: /s/ Scott Mitchell Rosenberg

Scott Mitchell Rosenberg, President and CEO

EX-10.13

Exhibit 10.13

Escape Artists Productions, LLC

10202 West Washington Boulevard

Astaire Building, 3`d Floor

Culver City, California 90232

As of February 15, 2002

Platinum Studios, LLC

c/o Wyman & Isaacs, LLP

8840 Wilshire Boulevard, 2^d Floor

Beverly Hills, California 90211

Attention: Bob Wyman

RE: "COWBOYS AND ALIENS" / Option and Acquisition of Rights Ladies and Gentlemen:

The following terms, and all exhibits attached hereto (all of which are made a part hereof and incorporated herein by this reference), constitute the agreement ("Agreement") between Platinum Studios, LLC, a California limited liability company ("Owner") and Escape Artists Productions, LLC ("Company"), with respect to the unpublished comic book series and related literary materials (except for publication of a comic book "Ashcan Mini Comic" in May of 1997]) entitled "Cowboys and Aliens" ("Work"), created by Scott Mitchell Rosenberg ("Author"), and owned by Owner, and registered for copyright in the United States Copyright Office by Platinum Studios as the copyright claimant on May 19,1997, Entry No. VAU-349-417 and registered for Trademark in the United States Office of Patents and Trademarks on February 24, 1998, as Entry No.2139278.

1. CONDITIONS PRECEDENT. All of Company's obligations hereunder are subject to satisfaction of the following conditions precedent:

1.1 Executed Agreements. Company's receipt of fully executed copies of this Agreement; and

1.2   Chain-of-Title. Company's receipt and approval of all chain-of-title documentation (including, without limitation, fully executed copies of any releases required under Section 17 below) in connection with the Property (as defined in Section 2 hereinbelow) and Company's approval of the copyright status of the Property. Satisfaction of this condition is waived.

2. PROPERTY. As used herein, the term Property shall mean all right, title and interest of every kind and nature in and to the Work whenever created, subject only to Section 10 below, including all past, present and future issues of the Work and all related treatments and intellectual property, and including without limitation all past, present and future copyrights, trademarks (subject only to Section 10 below), trade names, service marks, logos (and other marks and indicia of the Property) and other intellectual property rights or other rights of any kind relating thereto, whether now known or hereafter devised, and any renewals, extensions, restorations or resuscitations thereof, including without limitation all of the following:

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2.1 Characters. Any and all characters ("Characters") contained in the Work, excluding only any "Excluded Characters", as defined in Section 10.1.2 hereinbelow. Owner represents and agrees that as of the date of signature of this Agreement there are no Excluded Characters except for the so called "Grays" as defined in Section 10.1.2 below. Owner further represents and agrees that none of the characters in the screenplay by Thompson Evans dated July 34, 2002 are "Excluded Characters" except for the so called "Grays";

2.2   Individual Storylines. All plots, storylines, scenes, settings, incidents, titles, themes, contents, characterizations, dialogue, scenarios, special effects, translations, adaptations and other elements (including, without limitation, visual elements) created, described and/or appearing in the Work

2.3   Underlying Materials. All literary, dramatic or other material or copyrighted works of any nature on which the Work (i.e., the characters, themes, settings and stories) is directly based or derived from (a complete list of the currently existing materials comprising the Work is set forth in Schedule 1 and incorporated herein by this reference) subject to the limitations and reservation of rights set forth in Section 10.1.2;

2.4  Other Material. All literary, dramatic or other material or copyrighted works of any nature based on or derived from the Work; and

2.5    Documents: All contracts, agreements, assignments and instruments of every kind and character under which Owner may have heretofore acquired or may hereafter acquire any right, title or interest in or to the Work (a complete list of such currently existing documents is set forth in Schedule 2 and incorporated herein by this reference).

3.  OPTION. Owner hereby grants to Company the sole, irrevocable and exclusive option ("Option") to acquire from Owner, forever and throughout the universe and in any and all languages, the Rights (as defined in Section 8 below) in and to the Property.

4.  OPTION TERM.

4.1     Option Period. The Option shall commence as of February 15, 2002, and, subject to Section 4.2 hereof shall continue for two (2) years thereafter ("Initial Option Period"); provided, however, that Company shall have the right, exercisable by written notice to Owner and payment of the Second Option Payment to Owner at any time prior to the expiration of the Initial Option Period, to extend the Option for an additional period of twelve (12) months ("First Option Extension") commencing upon the expiration of the Initial Option Period. The Initial Option Period and the First Option Extension shall be referred to collectively as the "Option Period." Company may exercise the Option by written notice given to Owner at any time on or before the expiration of the Option Period and, pursuant to the terms and conditions of this Agreement, concurrently paying the "Purchase Price" as defined below.

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4.2     Extensions. The Option Period shall be automatically extended (provided, that Company shall notify Owner of any extension of the Option Period pursuant to this Section 4.2 in writing within a reasonable time thereafter, but failure to deliver such written notice shall not be deemed a breach by Company or otherwise limit the effectiveness of such extension):

4.2.1  For the duration of any "Event of Force Majeure" (as defined in Section 20.6 hereinbelow) and such additional time (not to exceed ten [10] business days) as is reasonably necessary for Company to recommence its usual business operations provided, however, that any extension of the Option Period based on an Event of Force Majeure which affects Company but does not affect any other major motion picture company shall not exceed twelve (12) months.

4.2.2   For the duration of any material breach or default by Owner and/or Author of any representation, warranty or agreement made hereunder, or of any claim or litigation asserted against Owner and/or Company relating to the Property which (in Company's good faith judgment) materially interferes with Company's development, financing, production or exploitation of the Rights (collectively, "Rights Claims") and such additional time as is reasonably necessary for Company to recommence its development of the Property (not to exceed ten [10] business days); provided, that any such extension based upon a claim shall terminate upon the expiration of the applicable statute of limitations period unless litigation in respect of such claim has theretofore been commenced by the claimant. Any extension under this Section 4.2.2 will terminate if after receipt of actual notice of the applicable claim or litigation, Company commences production of a Motion Picture based on the Property. If the resolution of any such litigation indicates an actual breach of Owner's representations and warranties hereunder, or if after such resolution Company cannot acquire the Rights free and clear of all claims, liens, and demands in accordance with Owner's representations and warranties hereunder, Company, in addition to all of its legal and equitable remedies, may rescind this Agreement, in which event Owner shall refund any payments received from Company in connection with the Property. Owner's representations and warranties and indemnification obligations and Company's indemnification and insurance obligations shall survive any such rescission.

4.2.3   If the last day of the Option Period falls on a Saturday, Sunday, or holiday, through and including the next business day following such Saturday, Sunday or holiday (as used herein, "holiday" means any holiday which is recognized by the State of California and/or the federal government).

4.2.4   For the period of time equal to the aggregate of any and all time periods (if any) during which Owner is in breach or default under any provision of this Agreement.

5. CONSIDERATION: As consideration for the grant of Rights to Company under this Agreement and for all of the promises, representations and warranties made by Owner hereunder, Company shall pay Owner the following:

5.1      With respect to the Initial Option Period, Twelve Thousand Five Hundred Dollars ($12,500) ("Initial Option Payment"). Owner acknowledges receipt of the Initial Option Payment.

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5.2    If Company elects to extend the Option for the First Option Extension, the sum of Twelve Thousand Five Hundred Dollars ($12,500) ("Second Option Payment") together with Company's notice to Owner of such election.

5.3 If Company exercises the Option, the sum of Two Million Dollars ($2,000,000) less the Initial Option Payment and the First Option Extension Payment (if such payment is made) ("Purchase Price"), and subject to Section 5.4 hereinbelow, upon Company's exercise of the Option; provided, however, if Company commences principal photography of a "Motion Picture" (as defined in Section 20.3, below) based upon or adapted from the Property prior to exercising the Option, the Option shall be deemed to have been exercised as of the date of commencement of principal photography of such Motion Picture, and the Purchase Price shall be due and payable no later than five (5) business days following said commencement of principal photography.

5.4     If Company in its sole discretion makes any payment in the form of a fixed amount (and excluding any payment in the form of contingent compensation) to Universal Pictures or any other third party (including, for example, any amount paid to an errors and omissions insurance carrier for an increased premium) in order to acquire rights or make settlements regarding previous materials developed based on the Property, then for the first Motion Picture based on or adapted from the Property only ("First Picture"), Company shall have the right to reduce the Purchase Price by an amount equal to 25% of any such payments until the Purchase Price has been reduced to One Million Six Hundred Twenty Five Thousand Dollars ($1,625,000); provided further, Owner shall have the right to participate in any settlement negotiations; and provided, further, that the first Fifty Thousand Dollars ($50,000) of the cost of any errors and omissions insurance premium beyond the customary premium for a typical studio theatrical motion picture shall be borne by Company. Notwithstanding the foregoing, if the First Picture is produced by or with DreamWorks or Universal there shall be no such right of offset. Further, if Company disregards a reasonable requirement of the errors and omissions insurance carrier or the domestic distributor's legal counsel, then Owner shall not be subject to offset for any claim arising out of such particular matter. Owner represents and warrants that Owner has provided Company with copies of all the screenplays developed by Universal and/or DreamWorks while the project was under option to Universal pursuant to the Literary Option Purchase Agreement dated as of May 16, 1997 between Universal and Owner, (the "Universal Agreement"), a complete list of which screenplays is set forth on Schedule 3 and incorporated herein by this reference (the "Universal Screenplays"), and that to the best knowledge of Owner the aggregate hard cost investment in development at Universal and/or DreamWorks does not exceed $2,000,000.
 

6.  BOX OFFICE BONUSES.

6.1     At such time, if ever, that the domestic theatrical box office receipts (i.e., United States and Canada) ("DBO") as reported in Daily Variety that the First Picture has earned equals the greater of (a) One Hundred Million Dollars ($100,000,000) or (b) an amount equal to the actual cost of production of the First Picture (inclusive of the costs of financing, completion bond, overhead computed at the rate of ten percent (10%), but exclusive of pre-breakeven gross third party participations) plus Thirty Million Dollars ($30,000,000) ("First Box Office Breakpoint"), Owner shall be entitled to receive the sum of Two hundred Thousand Dollars($200,000), which shall be payable within thirty (30) days after the date of publication of such report; plus

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6.2           At such time, if ever, that the DBO that the First Picture has earned equals First Box Office Breakpoint plus Thirty Million Dollars ($30,000,000) in DBO, Owner shall be entitled to receive the sum of Two Hundred Thousand Dollars ($200,000), which shall be payable within thirty (30) days after the date of publication of such report; plus

6.3           At such time, if ever, that the DBO that the First Picture has earned equals First Box Office Breakpoint plus Sixty Million Dollars ($60,000,000) in DBO, Owner shall be entitled to receive the sum of Two Hundred Thousand Dollars ($200,000), which shall be payable within thirty (30) days after the date of publication of such report; plus

6.4           At such time, if ever, that the DBO that the First Picture has earned equals First Box Office Breakpoint plus Ninety Million Dollars ($90,000,000) in DBO, Owner shall be entitled to receive the sum of Two hundred Thousand Dollars ($200,000), which shall be payable within thirty (30) days after the date of publication of such report; plus

6.5           At such time, if ever, that the DBO that the First Picture has earned equals First Box Office Breakpoint plus One Hundred Twenty Million Dollars ($120,000,000) in DBO, Owner shall be entitled to receive the sum of Two Hundred Thousand Dollars ($200,000), which shall be payable within thirty (30) days after the date of publication of such report; plus

6.6           At such time, if ever, that the DBO that the First Picture has earned equals First Box Office Breakpoint plus One Hundred Fifty Million Dollars ($150,000,000) in DBO, Owner shall be entitled

6A PARTICIPATION.

.           

6A.1   Contingent Compensation. The following amounts ("Percentage Contingent Compensation") the greater of:

A.           ONE AND ONE QUARTER PERCENT (1.25 %) of the "Gross Proceeds," if any, of the First Picture from and after "First Artificial Breakeven" (as defined below); or

B.           TWO AND ONE HALF PERCENT (2.5%) of the "Net Proceeds," if any, of the Picture from and after "Initial Actual Breakeven" (as defined below).

Company makes no representation that the Picture will generate any Gross Proceeds, or any particular amount of Net Proceeds. Neither Lender nor Artist shall have any right or authority to make any commitment with respect to any Third Party Participations.

6A.2    Definitions.

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A. "Gross Receipts," "Gross Proceeds" and "Net Proceeds" shall be defined, computed, accounted for and paid in accordance with Columbia Pictures' ("Columbia") standard definition of Gross and Net Proceeds attached hereto as Exhibit A (as modified by the rider attached thereto), provided that in all territories where the Picture is licensed to an EA output partner for a minimum guarantee, then "Gross Receipts" from such territories shall be the net payment received by Columbia from such territories net of all actual out of pocket third party costs and expenses including the sales fee payable to Summit Entertainment.

B. "First Artificial Breakeven" means that point, if ever, at which Net Proceeds are first reached, but all distribution fees of greater than Twenty Percent (20%) on all Gross Receipts, shall be deemed to be Twenty Percent (20%) in lieu of the Distribution Fees provided for in Company's standard definition of "Net Proceeds."

C.   "Initial Actual Breakeven" means that point, if ever, at which Net Proceeds are first reached (i.e., applying Company's standard Distribution Fees as provided in Company's attached definition of "Net Proceeds" as modified by the rider attached thereto).

7. PRE-PRODUCTION ACTIVITIES. Company shall have the right during the Option Period to cause to be written screenplays, treatments, outlines and other material based in whole or in part on the Property, and generally to engage in any and all development and/or pre-production activities in respect of the Property, including without limitation all so-called pre-sales and other activities in connection with arrangements for financing and/or distribution of any Motion Picture. Whether or not Company exercises the Option, Company shall be the sole owner of (and Owner shall have no right, title or interest in or to) any such screenplays, treatments, outlines, Motion Pictures or other material created or developed by Company or at Company's request, subject to the terms and conditions of this Agreement as otherwise set forth in Section 10 herein.

8. RIGHTS.

8.1 Rights. If the Option is exercised, Company automatically and irrevocably shall own and be vested with, and Owner automatically and irrevocably shall be deemed to have granted, conveyed, assigned, transferred and set over to Company, exclusively and in perpetuity, for the entire universe, in any and all languages, all of Owner's right, title and interest of every kind and nature in and to the Property, including without limitation all of Owner's rights (now or hereafter known or devised) under any and all copyrights and trademarks therein and thereto (and all renewals, extensions, restorations and resuscitations thereof) and any and all rights now known and used, under any and all such copyrights in perpetuity (but in any event for not less than the period of copyright and trademarks and any and all renewals, extensions, restorations and resuscitations thereof), in any and all languages and in any and all media now known and used, now known and hereafter used, or hereafter known or devised and used for the entire universe, except for and subject to the Reserved Rights (as defined in Section 10 below) (collectively, the "Rights"). Without limiting the generality of the foregoing, the "Rights" shall in any and all events include, without limitation, all of Owner's right, title and interest in and to the following, except for and subject to the Reserved Rights: (i) the sole and exclusive Motion Picture rights, including, without limitation, the sole and exclusive right to produce one (1) or more Motion Pictures or other derivative works (including, without limitation, sequels, prequels, remakes, musicals and/or serials) based, in whole or in part, on the Property and the right to fix, release, distribute, exhibit, perform, transmit, broadcast, advertise, promote and otherwise exploit such Motion Pictures or other derivative works by any and all means and in any and all media whether now or hereafter known or devised, including, without limitation, all of the following: theatrical; non-theatrical (including airlines, ships and other carriers, military, educational, industrial and the like); pay-per-view; home video (including video-cassettes, digital videodiscs, laserdiscs, CD-ROMs and all other formats); all forms of television (including pay, free, network, syndication, cable, satellite, high definition and digital);video-on-demand, near video-on-demand, and subscription-on-demand; all forms of digital or on- line exploitation, distribution and/or transmission (including, without limitation, the internet), CD- ROMs, fiber optic or other exhibition, broadcast and/or delivery systems and/or computerized or computer-assisted media; all rights of communication to the public, rights of distribution to the public, rights of making available or other forms of public or private communication and/or distribution; and all forms of dissemination, communication or distribution to one or more locations or parties, whether embodied or transmitted utilizing analog, digital or other format; (ii) all ancillary, incidental and subsidiary rights including, without limitation, all merchandising, (e.g., games, computer, video and other electronic games, toys, so-called "making of' books, apparel, food, beverages, posters, and other commodities, services or items), commercial tie-ins, music, music publishing, soundtrack, photonovel (using for example stills from the Picture with narrative text) (subject to Section 10.1.1), novelization (subject to Section 10.1.1), screenplay publication, interactive media, multi-media, and theme park (or other "themed" or location-based attraction) rights in and to the Property; (iii) the right to make or publish excerpts, synopses or summaries of the Property not to exceed the lesser of one thousand (1,000) words or ten percent (10%) of the Work, for purposes of advertising, publicizing or exploiting the foregoing rights in and to the Property; and (iv) Subject to Owner's Reserved Rights, the exclusive right to use the title or titles by which the Property may be now or hereafter known, or any components of any such title or titles (a) as the title of Motion Pictures and/or in connection with the advertising, marketing, publicity, promotion and other exploitation thereof, whether such Motion Pictures are based wholly or partially upon the Property, (b) in connection with songs, musical compositions, music or lyrics and/or phonorecords, (collectively, "Music") based on or derived from the Property, whether or not included in any such Motion Pictures, and (c) in connection with the publication, recordation,performance, and any other use whatsoever of the foregoing items based on or derived from the Property. Notwithstanding anything to the contrary contained herein, due to a restriction contained in that certain agreement, dated September 4, 2001, between Owner and Walt Disney Pictures Television which Owner represents and warrants is currently in effect, the first production based upon the Work may not be an animated production; provided, however, that in the event that such agreement is modified to remove such restriction, then such restriction shall not be applicable to thisAgreement.

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8.2 Approvals/Controls. As between Owner and Company, Company shall have all approvals and controls (business, creative or otherwise) with respect to the Rights and any and all Motion Pictures based upon or adapted from the Property, including, without limitation, the portrayal of the personality traits, physical appearance, living habitat and environment of the characters and elements in such Motion Pictures, and Owner acknowledges and agrees that Company shall have no obligation to portray any such item(s), character(s) or element(s) in a manner consistent with the manner such item(s), the Character(s) and/or element(s) are depicted in the Property.

9.      DROIT MORAL. Throughout the Option Period, and in perpetuity thereafter, if Company exercises the Option, Company shall have the right (to be exercised in its sole discretion) to adapt, modify, fictionalize, add to or take from the Property, and to combine the same with any other literary or musical work. In this regard, Owner hereby waives the exercise of any provision of law known as "droit moral" or any similar law which may now or hereafter be recognized in any country or place, (including, without limitation, the so-called right of paternity [droit a la paternite], right of integrity [droit au respect de l'oeuvre], right of withdrawal [droit de retrait or droit de repentir] and/or right of publication [droit divulgation]) and agrees not to institute, support, maintain or permit any action or proceeding on the ground that any Motion Picture or other version of the Property produced or exploited by Company or Company's successors, licensees or assigns in any way constitutes an infringement of any of Owner's droit moral or is in any way a defamation or mutilation of the Property or any part thereof or contains unauthorized variations, alterations, modifications, changes or translations thereof.

10.   RESERVED RIGHTS.

10.1 Reserved Rights. If the Option is exercised, then Owner hereby reserves the following rights, subject to the conditions and exceptions set forth in this Agreement ("ReservedRights"), but the rights reserved by Owner shall not relate to or include any adaptations, additions, or changes in the Work made by or by the authority of Company or the results and proceeds of any person or entity engaged by Company which shall remain at all times the sole and exclusive property of Company; provided, however, that Owner shall be entitled to utilize (i) the title, logo and artwork for the First Picture or subsequent productions in accordance with the provisions of Section 10.1.1 hereinbelow, and (ii) the characters, settings, and stories from the First Picture or subsequent productions in connection with Owner's Reserved Rights, as defined and set forth hereinbelow:

10.1.1 Comic Book Publication Rights. All comic book publication rights ("Comic Book Publication Rights") including the copyright rights and trademark rights solely in connection with the exploitation of the Comic Book Publication Rights, subject, however, to the publication rights sold and assigned to Company pursuant to Section 8 hereinabove; provided, however, that Owner shall be entitled to utilize the title and Company-created "logo" artwork for the First Picture and subsequent productions, if any, in connection with Owner's exercise of the Comic Book Publication Rights, subject only to any clearances required for such use; provided, further, that all costs for obtaining any such clearances shall be borne by Owner. The Comic Book Publication Rights shall encompass comic books, graphic novels, strips, pages, serializations, panels and art, in any format, as presented anywhere in the world, from any publisher, in any printed or in electronic delivery format, including, but not limited to: comics on CDs or CD-ROM, internet, other electronic uses now known or hereafter devised and comic books of all sizes and dimensions, art books, posters, prints, cards, art, and portfolios based on the comic book art, illustrated (i.e., illustrations of comic art) novels based on the comic book characters and text derived from the comic book(s) as opposed to text and stills from any Motion Picture produced hereunder), and limited and alternate edition version of all of the above (each referred to herein individually as a "Comic Book/Graphic Novel" and collectively as "Comic Books/Graphic Novels.)"

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10.1.2 Platinum Universe. In addition to owning the Work, Owner owns certain treatments, outlines, graphic art and other material which are part of a "universe" created and owned by Owner (i.e., various sets of characters and stories owned by Owner that can interrelate with each other visit or inhabit shared locations (the "Platinum Megaverse"). Owner retains all rights in and to the Platinum Megaverse and "Excluded Characters" other than the rights in the Work, subject, however, to the following limitations:

1. Except as set forth in Paragraph 10 with respect to the Reserved Rights (for which there are no limitations except as set forth in this Agreement), Owner shall not have the right to exploit (or authorize or license the exploitation of) any rights in the Platinum Megaverse to the extent that the exploitation of such rights by Owner (or any licensee or purchaser thereof) is likely to be confused by a reasonable third party observer as being based upon or substantially related to the Work, or any motion pictures or ancillary rights developed or produced based on the Work, or the themes settings, characters or stories of the Work or any such motion picture(s) or such ancillary rights. For example, and without limitation of the foregoing, Owner will not exploit (or authorize or license the exploitation of) any rights in the Platinum Megaverse (other than comic book publication rights) with respect to stories depicting an epic battle between violent invading aliens who are trying to enslave and/or kill the human race and humans from the U.S. between 1820 and 1910.

2. If Company or its successors or assigns develops one or more motion pictures based on the Work and includes additional elements which inadvertently overlap with the Platinum Megaverse, (i) such overlap shall not be deemed a breach of this Agreement or of Owner's rights or an infringement of Owner's copyright therein (provided that Owner shall have no obligation to furnish to Company any material other than the Work), and (ii) Owner shall have no rights (other than comic book publication rights) with respect to any such materials created by Company or its successors or assigns.

3. Owner acknowledges that future to be created "Cowboys & Aliens" entitled comic books/graphic novels, are included in the grant of rights hereunder, other than "Excluded Characters" to the extent they appear in future comic books/graphic novels for the Work. An "Excluded Character" (including its settings and worlds) is defined as: an established character or other element created in or for a comic book, graphic novel or other media and which has been available to the public in such other comic book, graphic novel or other media prior to its inclusion in the Work. With respect to the publication to the public of a character in a comic book or graphic novel, the comic book or graphic novel shall have been distributed to the public to at least the minimum extent of other comic books or graphic novels distributed by Owner or companies in which Author or Owner has had a contractual or financial interest, such as Malibu Comics, Image/Awesome Comics or other independent comic companies. With respect to publication to the public of a character only on the Internet ("Internet Characters"), to be deemed an Excluded Character, an Internet Character must appear or be referred to on websites other than or in addition to those solely owned by Owner or must be accessible through a standard Internet search engine such as Yahoo! (For the avoidance of doubt, advertisements or previews appearing in a "Cowboys & Aliens" publication separate from that issue's storyline are not part of the Work.) Similarly, fictional cities, settings and worlds that appear initially outside of the Work are excluded. In connection with the foregoing, it is acknowledged that characters which reside in the same universe are not necessarily related to or derived from each other (e.g., "Superman" and "Batman" are not related characters despite the fact that may appear in media together). As of the date hereof, there are no Excluded Characters in the materials which constitute theWork. In connection with the foregoing, with respect to "Greys", the particular "Grey" character appearing in "Cowboys and Aliens" is not an Excluded Character, but the entire alien race of "Greys" is pervasive throughout the Platinum Megaverse and therefore different individual "Greys" are established outside of the Work.

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10.3 First Negotiation; Last Refusal. Company shall have the following rights of first negotiation and last refusal with respect to any proposed license, sale or other disposition by Owner of any "Termination Rights" (as defined in Section 10.4 below) (referred to in this Section 10.3 as the "Negotiable Rights"):

10.3.1  First Negotiation. If at any time subsequent to the time periods set forth in Section 10.2 above, Owner intends to license, sell, transfer, assign, hypothecate or in any way convey or dispose of any of the Negotiable Rights or any portion thereof, Owner shall, before offering such Negotiable Right(s) to any other party, give Company written notice ("Notice") identifying the Negotiable Right(s) which Owner wishes to so convey ("Offered Right(s)") and the terms on which Owner wishes to negotiate in respect of such Offered Right(s). Company shall have the right, exercisable by written notice to Owner within ten (10) business days following Company's actual receipt of the Notice, to advise Owner as to whether Company wishes to negotiate regarding the Offered Right(s). If Company notifies Owner in writing that it wishes to so negotiate, Owner and Company shall negotiate in good faith regarding such Offered Right(s). If Owner and Company reach agreement as to financial terms, including any term relating to the consideration to Owner which can be readily reducible to a determinable sum of money, upon which Owner will dispose of such Offered Right(s) to Company, such Offered Right(s) shall vest in Company, and Company and Owner shall be deemed to have an agreement with respect thereto on the same terms and conditions set forth in this Agreement to the extent the same are not inconsistent with the agreed upon financial terms. If either (A) Company fails to give Owner notice of its desire to negotiate within the aforementioned ten (10) business day period or (B) Company and Owner fail to reach an agreement regarding the Offered Right(s) within thirty (30) days following the commencement of their negotiations with respect thereto, Owner shall have the right, subject to Section 10.3.2 below, to offer the Offered Right(s) to other parties.

10.3.2  Last Refusal. Subject to Company's right of first negotiation as provided in Section 10.3.1, above, if at any time Owner receives a bona fide offer to license, lease, purchase or in any way acquire any of the Negotiable Right(s) which is less favorable to Owner than the last offer by Owner to Company with respect to the Negotiable Rights and Owner proposes to accept such offer, Owner shall notify Company in writing ("Sale Notice"). The Sale Notice shall set forth (A) the Negotiable Right(s) that are the subject of such offer ("Sale Rights"), (B) the name and address of the offeror ("Offeror"), and (C) all of the material terms and conditions of such offer, including the financial terms of the offer (collectively, the "Terms"). During the period of twenty- one (21) business days following Company's actual receipt of the Sale Notice, Company shall have the exclusive option ("Sale Rights Option") to license, lease and/or purchase the Sale Right(s) upon the Terms. If Company elects to exercise the Sale Rights Option, Company shall notify Owner accordingly within said twenty-one (21) business day period, and company shall, upon payment to Owner of the consideration specified in the Sale Notice, automatically acquire such Sale Right(s) on the Terms as supplemented by all of the terms and conditions of this Agreement not inconsistent therewith; provided, however, that Company may exclude from the Terms and may exercise the Sale Rights Option without agreeing to any Term which may not as easily be met by one person as another and/or any term which is not readily reducible to a determinable sum of money. If Company fails to exercise the Sale Rights Option within the aforementioned twenty-one (21) business day period or notifies Owner in writing that it will not exercise the Sale Rights Option, Owner may convey the Sale Right(s) to the Offeror on the Terms at any time during the following six (6) month period.

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10.3.3 ContinuinRight. The provisions of Sections10.3.1and 10.3.2shall continue in full force and effect with respect to each Negotiable Right so long as Owner retains any right, title or interest in or to such Negotiable Right, and Company's failure to acquire any Negotiable Right(s) at any time shall not affect Company's continuing rights of First Negotiation and Last Refusal with respect to any subsequent proposed license, sale or other disposition of the same or any other Negotiable Right(s). If Company exercises any Sale Rights Option, Owner shall execute and deliver to Company such fu ther instruments and documents as may be necessary to vest in Company each and all of the rights so acquired by it, although Owner's failure to do so shall not adversely affect the vesting of rights.

10.4 Termination Right. Except for Owner's reversion right set forth in Section 10.5 below, if at any time Owner is deemed to have any right to terminate any or all of the Rights granted or to be granted to Company hereunder pursuant to any provision of the copyright laws of the United States or any other copyright or similar or analogous laws, rules or regulations anywhere from time to time in effect ("Termination Right"), and if Owner (or Owner's statutory representative) ("Terminating Party") exercises any such right to terminate, the Terminating Party shall notify Company thereof in writing within the time required for the giving of such notice under applicable law, and Company shall have the rights of first negotiation and last refusal, with respect to the reacquisition of any or all of the Termination Rights so terminated prior to the Terminating Party's exercise, disposition or utilization of any such Rights, other than for a reversion pursuant to Paragraph 10.5 below.

10.5 Reversion.

10.5.1 General Terms. Subject to Section 10.5.2 below, all of Company's Rights to the Property (excluding rights in any productions already produced and all ancillary rights in connection with exploitation of such productions, which rights in perpetuity shall be owned by Company [provided Company's merchandising rights shall terminate at the time of such reversion]) will thereafter revert to Owner if there is no production of a motion picture based on the Property within six (6) years of the exercise of this Option, or no subsequent production (whether a feature film, television production or video/dvd production) commences principal photography by the later of (i) six years after the initial general theatrical release of the preceding theatrical motion picture, or (ii) three years after the final initial broadcast of any television program (including any program distributed in the internet) based on the Property, or (iii) three years from the "street date" of any straight to video/DVD product (or on demand internet production) based on the Property (it being agreed that only "good faith" legitimate productions [i.e., not productions without commercial value created solely to prevent the reversion of rights per this Section] shall postpone the reversion of rights per this Section).

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10.5.2 Option Extension Payment. Notwithstanding anything to the contrary in Section 10.5.1 above, if at any time prior to the date on which the Rights in the Property would otherwise revert to Owner Company makes to Owner the "Extension Payment" as defined below, then all time periods above shall be automatically extended for an additional 8 years from the date any of the Rights would otherwise revert to Owner hereunder. The Option Extension Payment means the amount of $2,000,000, eighty percent (80%) of which ($1,600,000) shall be applicable against any payments due pursuant to Section 12 herein and twenty percent (20%) ($400,000) shall be applicable against any payments to Scott Mitchell Rosenberg Productions f/s/o Scott Mitchell Rosenberg pursuant to the Producing Agreement dated as of February 15, 2002 for any subsequent productions which commence in that period.

10.5.3 Retention of Rights to Produced Productions. Notwithstanding anything to the contrary contained herein, Company shall retain the right to distribute, in perpetuity, any and all Motion Pictures (including television programs) which have been produced hereunder prior to such reversion.

11. MERCHANDISING.

11.1 Approvals and Controls/Consultation. Subject to Section 11.2.2 below, as between Company and Owner, all merchandising with respect to the Property and each Motion Picture and related rights with respect to the Property and each Motion Picture shall be exercised and controlled at all times by Company. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, and provided Owner is not in default of this Agreement, and that Owner has performed all material obligations to be performed hereunder, Company shall meaningfully consult with Owner with respect to Company's exploitation of its merchandising rights in connection with the Property, including, without limitation, agreements with respect thereto, and any images, style guides, and/or products Company creates; provided, however, that Company's decisions or those of Company's domestic distributor with respect to the exploitation of such rights shall be final and binding. In this respect, Company shall provide Owner with copies of deal memos for Owner's review prior to executing same, and upon Owner's request, Company shall provide Owner with copies of all executed deal memos and long form agreements.

11.2  Merchandising Royalty Payments.

11.2.1 Owner shall be entitled to the following royalty: Thirty Five Percent (35%) of One Hundred Percent (100%) of "Net Merchandising/Interactive Receipts". "Net Merchandising/Interactive Receipts" shall be defined as gross merchandising receipts (including licensing fees received in connection with theme park rights) and gross receipts from exploitation by Columbia of "Interactive Rights" as defined below actually received by Columbia (net of returns and allowances) from licensing of the applicable rights in the Property throughout the world (including all subsequent productions) after deduction of all actual third party out of pocket costs (not to exceed five percent [5%] of gross merchandising/interactive receipts), unaffiliated third party royalties and participations (other than any participation payable to Escape Artists, LLC or its affiliates or principals), if any, actually paid by Columbia and unaffiliated foreign subagents fees (provided if any affiliate of Columbia is actually exploiting the Interactive Rights (e.g., exploitation by Sony electronics to produce product using the name and logo of the Property or licensing of rights to Sony Interactive for the production of cartridge games or on line games) then only amounts received by Columbia from such affiliate from exploitation of such Interactive Rights shall be included in the definition of Net Merchandising/Interactive Receipts and the terms of any agreement between the Studio and any such affiliate shall be comparable to an arms length transaction with an unaffiliated third party. In the event that there is no comparable transactions on which to determine what arms length terms would be with an unaffiliated third party because there is no verifiable similar prior agreements then in lieu of the percentage of Net Merchandising/Interactive Receipts set forth in this Section above, Owner shall receive a payment equal to Seven and One Half Percent (7.5%)of "Net Sony Interactive Receipts", defined as the gross sales received by Columbia or its interactive affiliate (including Sony Interactive) in respect of such Interactive Rights, less all costs of production and distribution (exclusive of interest and overhead), cash, trade, quantity or freight discounts, and net of returns and uncollectible accounts. Accounting statements, audit rights and payments shall be in accordance with Exhibit A attached hereto as modified by therider attached thereto.

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11.2.2 Intentionally Deleted.

11.2.3 Hasbro First Look. Provided the Studio that is acquiring the rights to the First Picture in the domestic territory does not have a then pre-existing agreement with a toy company for toy merchandising, Company shall require the domestic distributor to give Hasbro a "first look" at entering into a licensing agreement for toy merchandising for the First Picture, provided if the studio and Hasbro do not enter into an agreement within 15 business days of commencement of negotiations, then the studio shall have no further obligation to Hasbro.

11.2.4 Interactive Rights Definition. "Interactive Rights" shall be defined as follows: (i) all interactive software in any delivery systems, including, without limitation, magnetic semiconductor and optical media, which is compatible with (A) video game console systems, (B) computer systems, (C) optical disc-based systems, such as CD-ROM, (D) coin actuated video game systems (i.e., interactive video entertainment which is enabled by insertion of a coin, token, or debit card), including upright and table-top models and kits and boards for the foregoing, and (E) hand-held video games, and (F) any location based video games, and (G) any variations of the above (including, e.g., virtual reality based on or derived from interactive software delivery systems as opposed to virtual reality presented in another manner, as, e.g., theatrically), and (ii) notwithstanding the reservation of rights, comic books published or appearing on video and video disc and optical disc-based systems to the extent that said comic books involve interactive choices by the reader resulting in different game play scenarios (as opposed to comic books using video, video disc or optical disc-based systems as a medium akin to traditional publishing to be read by a reader without interactive choices other than for storytelling purposes [such as branching stories]).

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11.2.5 Merchandise Items Samples. Company shall cause the Studio to provide to Owner twenty (20) samples of each type of merchandise to Owner, excluding any items with a cost of $100 or more. Owner shall have the right to purchase any item of available merchandise at cost (but such items may not be resold without the written permission of Company).

12.  REMAKES AND SEQUELS/TELEVISION PROGRAMS/STAGE RIGHTS.

12.1 Theatrical Remakes and Sequels. If, and only if, (A) the First Picture is released theatrically in the United States, and (B) Company thereafter produces a theatrical Motion Picture in the English language as a "Remake" of or "Sequel" to a Motion Picture based upon the Property (as such terms are defined below), Owner shall be entitled to receive in respect of each theatrical Remake or Sequel, if any, a sum equal to One Hundred Percent (100%) of the Purchase Price (without any reduction pursuant to Paragraph 5.4 above), payable upon commencement of principal photography of such Remake or Sequel.

12.2 Television Programs.

12.2.1 U.S. Television (i.e., Network and Non-Network) Royalties. If, and only if (A) the Picture is released for commercial exhibition, and (B) Company thereafter produces, for primary exhibition and release by means of United States network or non-network television, a television production in the English language, based upon the Property, payment shall be made to Owner upon commencement of photography for each episode as follows:

(i)           Sixty Minute Episodes:

A.           Initial Production Season:	$7,500 per episode;
B.           Second Production Season	$9,000 per episode; and per episode.
C.           Third and Subsequent Production Seasons:	$11,000

(ii)          Thirty Minute Episodes: The sums payable as a royalty in connection with series episodes which are thirty (30) minutes in length shall be one-half (1/2) of the sums payable in connection with sixty minute episodes, as set forth in Section 12.2.1 hereinabove.

12.2.2 Other Television Programs and Other Productions. The sums payable as a royalty in connection with other television programs and other productions based upon the Work (including, without limitation, MOWs, mini-series, programs intended for initial release on videocassette/videodisc), shall be negotiated in good faith, taking into account the budget of such production and Owner's then-existing quotes and/or precedent.

The royalties set forth hereinabove, shall constitute payment in full for the right to produce, perform and exhibit any television programs.

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12.3 Stage Rights. Company shall control stage rights, and if Company elects in its sole discretion to exploit the legitimate stage rights granted to Company hereunder, then Company agrees to split all legitimate stage revenue (including any producing fees or other revenue earned as part of the license of such live stage rights but excluding any revenue due Owner as a financier of any stage production) net of any actual out of pocket third party costs, with Owner fifty percent (50%) to each of Owner and Company.

13. WARRANTIES AND REPRESENTATIONS. Owner warrants and represents (which representations and warranties shall survive the termination of this Agreement whether Company exercises the Option or not) that:

13.1 Owner is the sole owner of all Rights herein sold, transferred, granted, assigned and conveyed and purported to be sold, transferred, granted or assigned to Company, and Owner has the full and sole right and authority to sell, transfer, grant, assign and convey such Rights;

13.2 Except as set forth in the first (unnumbered) paragraph of this Agreement, the Property has not been published or registered for copyright or trademark in the United States or elsewhere but may be validly copyrighted or registered for copyright and/or trademark in the United States of America and likewise to the best knowledge of Owner may be protected elsewhere so far as the laws of other places and countries provide for such protection;

13.3 The Property is not in the public domain except to a minor extent;

13.4 No part of the Rights herein conveyed has in any way been encumbered, conveyed, granted or otherwise disposed of (other than pursuant to the Universal Agreement, and Owner represents that the Universal Agreement has expired and all of Owner's rights which were under option to Universal are the sole property of Owner), and all such Rights are therefore free and clear of any and all liens, claims, charges or encumbrances whatsoever in favor of any party whatsoever, and said rights and the full right to exercise the same have not been in any way prejudiced, limited, diminished or impaired;

13.5   To the best of Owner's knowledge, the title or titles of the Property may be legally used by Company in the exercise of all or any of the Rights herein conveyed or agreed to be conveyed, and such use will not infringe upon the federal, state or common law trademark, service mark or trade name of any third party;

13.6  The use, reproduction, performance or exhibition of the Property, and the exercise of any of the Rights herein granted or conveyed, or agreed to be conveyed, will not in any way infringe upon any copyright, trademark, common law, literary, dramatic, or motion picture rights or to the best knowledge of Owner, any other rights of any party whatsoever or constitute a libel or defamation of, or invasion of any rights (including, without limitation, the right of privacy or publicity) of any party;

13.7 Neither Owner nor Author has done, and neither Owner nor Author will do, any act or thing that will or may in any way prevent or interfere in any manner with the full and exclusive enjoyment by Company of any of the Rights herein granted, conveyed or agreed to be granted or conveyed or which will, or may, impair, impede, invalidate or encumber any such Rights;

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13.8 There are no claims or litigation pending, outstanding or, to the best knowledge of Owner, threatened that adversely affect, or that may in any way prejudice, Owner's exclusive rights in the Property or any of the Rights herein granted, conveyed or agreed to be granted or conveyed, or the copyrights or trademarks therein. Without limiting the foregoing, Owner represents and warrants that the litigation filed against Universal and Owner described as the "Powers Claim" in the Universal Agreement has been adjudicated to a final conclusion and all claims against Owner and Universal were dismissed with prejudice;

13.9 The Rights herein granted, conveyed or agreed to be granted or conveyed have never been exercised by Owner or any third party;

13.10  The Property and all Characters depicted therein are wholly original with Owner (the sole author thereof) in all respects except to a minor extent in the public domain;

13.11  Other than the Universal Agreement, Owner has not negotiated or entered into any agreement, written or oral, granting any rights of any kind or nature in connection with any actual or proposed merchandising of the Work or the Property; and

13.12 As previously provided in Section5.4hereinabove, Owner represents and warrants that Owner has provided Company with copies of all the screenplays developed by Universal and/or DreamWorks to which Owner or any member of Owner or to which Author had access while the project was under option to Universal and/or DreamWorks as set forth in Exhibit "A" (and to the best knowledge of Owner: such materials constitute all such materials and the aggregate hard cost investment in development at Universal and/or DreamWorks does not exceed $2,000,000). Company makes no warranties, express or implied, other than as specifically set forth in this Agreement.

14. INDEMNITY.

 14.1 Owner shall indemnify and hold Company and its parents, affiliates, subsidiaries, directors, officers, agents, employees, licensees, successors, and assigns (collectively, "Company Indemnitees") harmless from and against any claims, charges, damages, costs, expenses (including reasonable outside attorneys' and outside accountant's fees and disbursements), judgments, settlements, penalties, liabilities or losses of any kind or nature whatsoever (collectively, "Expenses") which may be made, asserted, maintained, sustained, incurred or suffered by or secured against or imposed upon any Company Indemnitee(s), by reason of the breach of any of Owner's warranties, representations or undertakings under any provision of this Agreement or by reason of Owner's or Author's intentional torts or reckless or grossly negligent conduct. Company shall defend (selecting its own counsel), indemnify and hold Owner and Owner's assigns and representatives (collectively "Owner Indemnitees") harmless from and against any and all Expenses suffered or incurred by Owner (Owner Indemnitees), arising out of or by reason of or resulting from any third party claim which (a) is based upon material not written by Owner or Author and created by Company, it's agents, employees, and/or representatives for inclusion in and included in any Motion Picture (if any) based, in whole or in part, on the Property, or (b) arising out of the development, production, distribution and/or other exploitation of a Motion Picture produced by Company based upon the Property and/or ancillary rights therein, except to the extent such Expenses are subject to or covered by Owner's indemnification obligations hereunder.

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14.2 Notwithstanding the foregoing, if any claim is asserted or any legal proceeding is commenced by a third party against Company or against both Company and Owner and/or Author, alleging that a Motion Picture based on the Property or materials created by Company in connection with the development or production of such Motion Picture infringe or violate the rights of the claimant by reason of facts which, if true, would cause the claim (or Expenses arising therefrom) to be subject to or covered by Owner's indemnification obligations hereunder ("Claim"), Company will defend such Claim on behalf of itself and (if applicable) Owner; provided, that if Company at any time determines in good faith, based upon such information as may then be available to Company, that there has been an actual breach of Owner's representations and warranties hereunder, Company shall have no further obligation to defend Owner with respect to such Claim. If Company undertakes Owner's defense in connection with any such Claim (or in connection with any other matter): (i) Owner shall give Company prompt written notice of the Claim and shall cooperate fully with Company and comply with Company's reasonable and lawful instructions in connection with the defense thereof, (ii) Company shall control the defense of any such Claim and shall have the right to dispose of and/or settle such Claim as Company deems appropriate, and (iii) neither Owner nor Author shall compromise or settle any such Claim without Company's prior written consent. Owner may have his/her own counsel present, at Owner's sole expense, but Company shall have the sole right to control the legal defense of any such Claim, including the right to select counsel of its choice and to compromise or settle any such Claim. Company shall not, as part of any settlement, make an admission of liability on behalf of Owner. Company shall notify Owner if Company intends to settle any Claim on behalf of both Company and Owner. If Owner advises Company that Owner does not wish Company to settle the Claim against Owner, and if Company is able to consummate such settlement for itself without settling the Claim against Owner on a basis which is no less favorable to Company than if the Claim against both Company and Owner were settled concurrently, and if not settling the Claim against Owner would not materially adversely affect any of Company's rights in any way, then Company shall not settle such Claim against Owner, but shall have no further obligation to defend or indemnify Owner in connection with such Claim.

14.3 Notwithstanding Company's defense or settlement of any Claim on behalf of itself and/or Owner, Company reserves all rights, both in equity and at law, against Owner (including the right to recover any Expenses incurred by Company in connection with the defense, settlement or other disposition of any such Claim) to the extent such Claim is subject to or covered by Owner's indemnification obligations hereunder. With respect to any action brought by Company against Owner pursuant to the preceding sentence, such action will be deemed to accrue on the date on which Company requests that Owner reimburse Company for Company's Expenses, it being agreed that Company shall not be required to make any such request in connection with any Claim until after the final disposition or settlement thereof.

14.4 Nothing contained in this Section shall affect the computation of Owner's Contingent Compensation, if any, in connection with the Picture or limit in any respect the amounts deductible by Company or otherwise as distribution expenses or Direct Costs in computing such participation

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15. COPYRIGHT PROTECTION; FURTHER DOCUMENTS. Owner covenants that:

15.1 Protection of Copyright. Owner shall contracually require of all publishers of the Property that any future publication of the Property, or any part thereof, in any form shall be with all notice(s) of copyright in Owner's name as shall afford to the Property copyright protection in the United States and all countries adhering to the Berne Convention, the Pan American Copyright Convention and the Universal Copyright Convention. Owner will do all acts reasonable and necessary to prevent the Property and any portion thereof, now in existence or hereafter created, from falling into the public domain. In any grants or agreements hereafter made or entered into by Owner concerning the Property, Owner will expressly except and reserve all Rights granted to Company.

15.2  Enforcement of Rights. Subject to the Owner's Reserved Rights, Company shall have the benefit of all copyrights and trademarks in the Property and all remedies for enforcing such copyrights and/or trademarks with respect to the Rights. In Company's sole judgment Company may join Owner as a party plaintiff or defendant in any action or proceeding relating to the Rights. All damages, penalties, settlements and profits relating to or arising from any interference with or infringement of any of the Rights are hereby assigned to Company. Owner shall fully cooperate with Company in connection with any suit or action threatened or instituted by or against Company relating to any Rights.

15.3 Further Documents. Owner agrees to duly execute, acknowledge and deliver, or cause to be duly executed, acknowledged and delivered to Company, at Company's expense (provided, that Company shall not be responsible for any fees which may be incurred by Owner to have any such instruments reviewed by Owner's legal counsel), any instruments consistent herewith that may be reasonably necessary, proper or expedient in the reasonable opinion of Company to carry out and effectuate the purposes and intent of this Agreement. In the event of the failure of Owner to execute any of the aforementioned instruments within five (5) business days after the earlier of (a) Owner's actual receipt of Company's request to do so, or (b) Owner's deemed receipt of Company's request to do so pursuant to Section 29 (Payments and Notices) below, in order to permit Owner an opportunity for review and requesting changes consistent herewith, Owner hereby irrevocably nominates, constitutes and appoints Company Owner's true and lawful attorney-in-fact, which constitutes a power coupled with an interest, with the right to execute and f ile all such documents and to do any and all acts and things necessary with respect to such documentation. Company shall provide Owner with courtesy copies of any such instruments executed in Owner's name; provided, that Company's failure to do so shall not be deemed to be a breach of this Agreement. Company shall provide Owner with courtesy copies of any such instruments executed in Owner's name; provided, that Company's inadvertent failure to do so shall not be deemed to be a breach of this Agreement.

16. OWNER'S NAME AND LIKENESS AND THEIR USE. Owner grants to Company the right throughout the universe, in perpetuity (but not less than the term of copyright and any renewals, extensions, restorations or resuscitations of same), to use and reproduce the name, sobriquet, and, with respect to Author, likeness (provided, however, that Author shall have the right to submit posed publicity stills reasonably acceptable to Company, it being understood that all "behind-the-scenes" and candid photography of Author shall be deemed pre-approved) and pre- approved biography of Owner and Author and the name and/or logo of Owner and Author in connection with the Property and/or any Motion Picture based in whole or in part on the Property or any Rights herein conveyed, and/or in connection with the advertising, promotion, exhibition, distribution or other exploitation of the Property and/or any such Motion Picture, and/or in connection with any so-called "commercial tie-ups," merchandising and/or the advertising or publicizing of any commodities, products or services relating or referring to the Property or any such Motion Picture including all products, commodities and/or services relating to the Motion Picture, by Company and/or its parents, affiliates or subsidiaries and/or in connection with general corporate or institutional uses (e.g., trade shows, Company promotions, financial prospectuses and/or annual reports) or for promotion of their products; provided that neither Owner nor Author will be represented as endorsing any such commodity, product or service without Owner's priorconsent.

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17.  CONSENTS AND RELEASES. If Company determines that the consent and release of any other person or entity are required in connection with Company's exercise of any of the Rights, or Company is required to obtain additional rights from the creator(s) of a guest character, Owner shall use Owner's best efforts to procure and submit to Company, in form and substance approved by Company, signed consents and releases and/or a grant of additional rights, from any such person(s) or entity (ies) as Company, in its sole discretion, may require. In connection therewith, Owner will provide Company with executed original copies of any consents or releases or rights grants previously obtained by Owner in connection with the Property.

 18.  CREDIT. Provided that Owner is not in default and subject to any applicable guild restrictions and/or collective bargaining agreements (including, without limitation, the Writers Guild Of America Basic Agreement), if Company produces a theatrical Motion Picture based substantially on the Work, credit shall be accorded as follows:

18.1 On Screen. On all positive prints of each theatrical Motion Picture based upon the Work, in the main titles (i.e., where the individual credits for the producer, director and the writer appear, whether located at the beginning or the end of the Motion Picture), source material ("Source Material") credit on a separate card in substantially the following form: (i) if the title of the Motion Picture is different from the Work, "Based on Platinum Studios' comic book `Cowboys and Aliens' created by Scott Mitchell Rosenberg"; or, (ii) if the title of the Motion Picture is the same as the Work, "Based on Platinum Studios' comic book created by Scott Mitchell Rosenberg"; provided if at the time of completion of principal photography of the First Picture no comic book has been published or readied for publication, the credit shall be as follows (subject to any limitations or credit requirements set forth in the Writers Guild of America Agreement ("WGA Agreement"): (i) if the title of the Motion Picture is different from the Work, "Based on the story `Cowboys and Aliens' created by Scott Mitchell Rosenberg"; or, (ii) if the title of the Motion Picture is the same as the Work, "Based on the story created by Scott Mitchell Rosenberg".

18.2     In Paid Advertising. Subject to the exclusions and exceptions set forth in Section 18.4 below and those of any third party distributor(s) of such Motion Picture, credit in the form set forth in Section 18.1 above, as applicable, in the billing block portion of all paid advertising relating primarily to the Motion Picture, issued by, or under the direct control of, Company ("Paid Ads").

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18.3 On Merchandising/Interactive Items. Credit in the form set forth in Section 18.1 above, as applicable, shall be accorded in the billing block in any merchandising or interactive item if a billing block is included therein, and if there is no billing block in a merchandising or interactive item then, in substantially the form "based on Platinum Studios' comic book created by Scott Mitchell Rosenberg" so long as there is reasonable space to affix such credit.

18.4 Exclusions and Exceptions. Company's Paid Ads credit obligations shall not apply to the following Paid Ads (hereinafter "Excluded Ads"): group, list, institutional or so-called teaser advertising; special advertising (e.g., announcements of commencement and/or completion of principal photography, advertising regarding box office gross receipts, etc.), announcement advertising; advertising relating primarily to any member of the cast, the director(s), writer(s) or any other personnel involved with the production of the Motion Picture; so-called "award" or "congratulatory" advertisements, including advertisements or announcements relating to consideration or nomination for an award; trailers (including promotional films) or other screen, radio or television advertising; advertising in narrative form; advertising for film festivals, film markets and the like; advertising one-half page (or the equivalent in SAUs) in size or less; outdoor advertising (including, but not limited to, so-called 24-sheets); theater display advertising; advertising in which no credit is accorded other than credit to actors and/or the Company and/or to any other company financing or distributing the Motion Picture. The following shall not be considered Paid Ads or Excluded Ads for any purpose hereunder: videocassettes, videodiscs and other home video devices and the covers, packages, containers or jackets therefor (collectively, "Video Items"); publicity and promotional items and materials; advertising relating to subsidiary or ancillary rights in the Motion Picture (including, but not limited to novelizations, screenplays, "Making of' books, "film diaries" or other publications, products, merchandising, music publishing or soundtrack recordings); voiceovers; advertising, publicity and exploitation relating to by-products or commercial tie-ins; and other advertising not relating primarily to the Motion Picture.

18.5 Excluded Ad Tie-In. If the screenwriter(s), director and/or producer of a theatrical Motion Picture is accorded individual credit in the billing block of any Excluded Ads, or the packaging or covers for Video Items or for any soundtrack recordings or novelization in connection with the Motion Picture ("Ancillary Items"), then Owner's credit shall also be accorded in the billing block of said Excluded Ads or on the packaging for such Video Items or Ancillary Items, as applicable; provided the foregoing shall not apply to award, congratulatory, or nomination ads where only the individual being honored and/or the sponsor of suchadvertisement is mentioned, group, special, institutional, film market, film festival, teaser or radio advertising and/or the audio portion of any television advertising (collectively, "Special Ads"). Nothing in this Section 18.5 shall derogate from Owner's right to credit pursuant to Section 18.3 above.

18.6 General Terms. The position of such credit and all other matters with respect to such credit shall be determined by Company in its sole discretion. Any reference to the "title" of the Motion Picture shall be deemed to mean the "regular" title unless such reference is specifically made to the "artwork" title. No casual or inadvertent failure to comply with the provisions of this section nor any failure by third parties to comply with their agreements with Company shall constitute a breach of this Agreement by Company. Company shall notify third party distributors of the Picture with whom company is in privity of contract of the credit provisions of this Section 18, but no casual or inadvertent failure to comply with the provisions of this section nor any failure by third parties to comply with their agreements with Company shall constitute a breach of this Agreement by Company. Company shall have the right in its sole discretion to accord more favorable credit(s) than provided for herein. In the event of Company's failure to comply with any of its credit obligations hereunder, Company shall, upon receipt of written notice of such failure, use reasonable efforts to correct such failure in Paid Ads and prints for the Motion Picture on a prospective basis only, i.e., those Paid Ads (if any) and/or prints (if any) prepared after Company's receipt of such notice (allowing for adequate time after receipt of notice to implement such correction).

18.6 General Terms. The position of such credit and all other matters with respect to such credit shall be determined by Company in its sole discretion. Any reference to the "title" of the Motion Picture shall be deemed to mean the "regular" title unless such reference is specifically made to the "artwork" title. No casual or inadvertent failure to comply with the provisions of this section nor any failure by third parties to comply with their agreements with Company shall constitute a breach of this Agreement by Company. Company shall notify third party distributors of the Picture with whom company is in privity of contract of the credit provisions of this Section 18, but no casual or inadvertent failure to comply with the provisions of this section nor any failure by third parties to comply with their agreements with Company shall constitute a breach of this Agreement by Company. Company shall have the right in its sole discretion to accord more favorable credit(s) than provided for herein. In the event of Company's failure to comply with any of its credit obligations hereunder, Company shall, upon receipt of written notice of such failure, use reasonable efforts to correct such failure in Paid Ads and prints for the Motion Picture on a prospective basis only, i.e., those Paid Ads (if any) and/or prints (if any) prepared after Company's receipt of such notice (allowing for adequate time after receipt of notice to implement such correction).

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18.7 Credit on Television Productions. Owner shall receive the following credit on each television Motion Picture based upon the Work: source material ("Source Material") credit on a separate card in substantially the following form: (i) if the title of the television production is different from the Work, "Based on Platinum Studios' comic book `Cowboys and Aliens' created by Scott Mitchell Rosenberg"; or, (ii) if the title of the television production is the same as the Work, "Based on Platinum Studios' comic book created by Scott Mitchell Rosenberg". Provided if at the time of completion of principal photography of the television production no comic book has been published or readied for publication, the credit shall be as follows (subject to any limitations or credit requirements set forth in the WGA Agreement): (i) if the title of the television production is different from the Work, "Based on the story `Cowboys and Aliens' created by Scott Mitchell Rosenberg"; or, (ii) if the title of the television production is the same as the Work, "Based on the story created by Scott Mitchell Rosenberg. Such credit shall be in the main titles (i.e., where the individual credits for the producer, director and the writer appear, whether located at the beginning or the end of the television production), provided inclusion of such credit in the main titles shall be subject to the approval of the network or other broadcasting entity approval, which Company shall use good faith efforts to obtain.

19.  RIGHTS AND REMEDIES. Provided Company pays the Purchase Price, the rights and remedies of Owner and/or Author in the event of a breach of the provisions of the Agreement, including without limitation any failure to comply with the credit provisions set forth above, shall be limited to an action at law for money damages, if any, actually suffered by Owner and/or Author and in no event shall Owner or Author be entitled to rescind or terminate this Agreement or to receive injunctive or other equitable relief, including without limitation enjoining or restraining the distribution or exhibition of any Motion Picture or any advertising, publicity or promotion issued in connection therewith or to recover consequential, incidental and/or special damages.

20.  DEFINITIONS. As used in this Agreement:

20.1        Author. "Author" shall be deemed to include and be binding upon the heirs, executors, administrators, next of kin, successors and assigns of Author.

20.2           Company. "Company" shall be deemed to include its successors and assigns.

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20.3 Motion Picture. "Motion Picture," or its equivalent, means and includes motion pictures, cinematography, films, television productions and photoplays of every kind and character whatsoever, including the sound records thereof, as well as trailers and clips thereof, produced by means of any photographic, electrical, electronic, mechanical, digital or other processes or devices now or hereafter known, invented, used or contemplated, by which photographs, pictures, images or other visual reproductions or representations are or may be printed, imprinted, recorded or otherwise preserved on material of any description (whether translucent or not) for later projection or exhibition in such manner that the same are, or appear to be, in motion on screen, mirror, tube or other medium or device, whether or not accompanied by sound records and whether now or hereafter known, invented, devised or contemplated.

20.4 Remake. "Remake" shall mean a Motion Picture other than the first Motion Picture based upon the Property in which (i) the principal character (s) are principal characters in the Property and (ii) said character(s) are shown as participating for the most part in the same events inwhich said character(s) participated in (A) the Property or (B) the first Motion Picture based upon the Property or (C) any prior Remake or Sequel to the first Motion Picture based upon the Property. The term "Remake" does not include Sequels, or foreign, shortened, or expanded versions of a prior Motion Picture

20.5 Sequel. "Sequel" shall mean a Motion Picture other than the first Motion Picture based upon the Property in which (i) the principal character(s) are principal characters in the Property; and (ii) said character(s) are shown in new or different events than those in which such character(s) participated in (A) the Property or (B) any prior Motion Pictures based on the Property or Remake or Sequel thereto; provided, however, for purposes of this Section 20.5, if the only characters who appear in both the initial Motion Picture based upon the Property and a subsequent Motion Picture based thereon are real people and/or characters in the public domain, the subsequent Motion Picture shall not be deemed a "Sequel" unless it is intended to be marketed as a "Sequel" to the prior Motion Picture. The term "Sequel" shall be deemed to include a "prequel" but does not nclude any Remake.

20.6 Event of Force Majeure. The following shall be deemed to be an "Event of Force Ma}eure": If as a result of any At of God, war, accident, fire, strike, lock out or other labor controversy, riot, civil disturbance, act of public enemy, law, enactment, rule, restraint, order or act of any governmental instrumentality or military authority, failure or inability to obtain any necessary permit or license, failure of technical facilities, inability to obtain sufficient labor, technical or other personnel (including, without limitation, cast or crew members), failure, delay or reduction in transportation facilities or water, electricity or other public utilities, death, disability, disfigurement (with respect to cast only) or unavailability of or inability to obtain life, accident, cast or health insurance or inability to obtain visas, labor permits or other governmental licenses for a principal member of the cast or the director, death, disability or unavailability of the producer or other cause not reasonably within Company's control or which Company could not by reasonable diligence have avoided, Company is hampered in the development and production of the Motion Picture or Company's normal business operations become commercially impracticable.

21. NO DEROGATION OF RIGHTS. Nothing contained in this Agreement shall derogate from or be prejudicial to any rights, licenses, privileges or property which Company now or at anytime hereafter may be entitled to as a member of the public, if this Agreement were not in existence; provided nothing in this Section 21 shall limit Company's express contractual obligations to Owner under this Agreement including with respect to Sequels, Remakes and other productions.

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22. ENTIRE AGREEMENT. This Agreement expresses the entire understanding of the parties hereto and replaces any and all former agreements, understandings and representations relating in any way to the subject matter hereof (i.e, the option of the Rights in the Work to Company). Nothing in this Agreement shall alter or derogate from the rights of either party with respect to Paragraph 2 of the letter agreement ("Letter Agreement") between Company, Owner and Author with respect to the producing services of Author, which paragraph of such Letter Agreement is infull force and effect unless and until superceded by long form documentation, which the parties agree to negotiate expeditiously and in good faith pursuant to the terms of the Letter Agreement. Said paragraph 2 of the Letter Agreement, as it may be superceded by long form documentation shall be referred to herein as the "Producing Agreement"). No modification, alteration or amendment of this Agreement shall be valid or binding unless it is in writing and signed by the party to be charged with such modification, alteration or amendment. No officer, employee or representative of Company has any authority to make any representation or promise not contained in this Agreement and Owner acknowledges that Owner has not executed this Agreement in reliance upon any promise or representation not expressly set forth in this Agreement. Notwithstanding the foregoing, Owner and Company have entered into a side letter agreement dated as of July 7, 2003 regarding the rights and obligations of Company and Owner to each other regarding the Property, provided nothing in such side letter shall derogate from the rights of Columbia so long as Columbia has any interest in the Property or any motion pictures or other rights derived therefrom.

23.  NO PARTNERSHIP, ETC. Nothing herein contained shall constitute a partnership between, or joint venture by, the parties hereto or constitute either party the agent of the other. This Agreement is not for the benefit of any third party and shall not be deemed to give any right or remedy to any third party whether referred to herein or not.

24. WAIVER OF BREACH. No waiver by either party of any breach of this Agreement shall be deemed a waiver of any preceding or succeeding breach hereof.

25. EFFECT OF INVALIDITY. Nothing contained in this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any statute, law, ordinance, order or regulation contrary to which the parties hereto have no legal right to contract, the latter shall prevail, but in such event any provision of this Agreement so affected shall be curtailed and limited only to the extent necessary to bring it within legal requirements.

26.  SECTION HEADINGS. Section headings as used in this Agreement are for convenience only and are not a part hereof, and shall not be used to interpret any provision of this Agreement

27.  ASSIGNMENT. Company shall be free to assign this Agreement and its rights hereunder, and to delegate its duties at any time and from time to time, in whole or in part, to any person or entity, and upon such assignment, Company shall be released and discharged of and from any and all of its duties, obligations and liabilities arising under this Agreement if such assignment is to: (i) a person or entity into which Company merges or is consolidated or (ii) a person or entity which acquires all or substantially all of Company's business and assets or (iii) a person or entity which is controlled by, under common control with, or controls Company or (iv) any major motion picture company, United States television network or (v) other similarly financially responsible party who assumes in writing the performance and obligations of Company hereunder to be performed from and after such assignment. Owner may not assign this Agreement or Owner's rights hereunder, or delegate Owner's duties under this Agreement in whole or in part. Notwithstanding the foregoing, Owner shall have the right on a one time basis to assign Owner's rights to receive proceeds actually payable to Owner under this agreement to a third party, upon written notice to Company, and execution by Owner and such third party of appropriate documentation in connection therewith.

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28. GOVERNING LAW: LEGAL PROCEEDINGS.

28.1 THE INTERNAL SUBSTANTIVE LAWS (AS DISTINGUISHED FROM THE CHOICE OF LAW RULES) OF THE STATE OF CALIFORNIA AND THE UNITED STATES OF AMERICA APPLICABLE TO CONTRACTS MADE AND PERFORMED ENTIRELY IN CALIFORNIA SHALL GOVERN (i) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, (ii) THE PERFORMANCE BY THE PARTIES OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER, AND (iii) ALL OTHER CAUSES OF ACTION (WHETHER SOUNDING IN CONTRACT OR IN TORT) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TERMINATION OF THIS AGREEMENT.

28.2 Legal Proceedings - Arbitration. The parties agree that, except as otherwise required by any applicable guild collective bargaining agreement, any and all disputes or controversies of any nature between them arising at any time (whether or not relating to any Motion Picture based upon or adapted from the Property or to any of the matters referred to in clauses (i), (ii) and/or (iii) of Section 28.1 above, shall be determined by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") before a single neutral arbitrator ("Arbitrator"). The Arbitrator shall be an attorney or retired judge with at least ten (10) years experience in the motion picture industry (e.g., the arbitrators designated in the DGA, SAG or WGA agreements or persons having comparable qualifications) and shall be mutually agreed upon by Company and Lender. If Company and Lender are unable to agree on an Arbitrator, the Arbitrators shall be appointed by the AAA. The fees of the Arbitrator shall be borne equally by Company and Lender, provided that the Arbitrator may require that such fees be borne in such other manner as the Arbitrator determines is required in order for this arbitration clause to be enforceable under applicable law. The parties shall be entitled to conduct discovery in accordance with Section 1283.05 of the California Code of Civil Procedure, provided that (a) the Arbitrator must authorize all such discovery in advance based on findings that the material sought is relevant to the issues in dispute and that the nature and scope of such discovery is reasonable under the circumstances, and (b) discovery shall be limited to depositions and production of documents unless the Arbitrator finds that another method of discovery (e.g., interrogatories) is the most cost efficient method of obtaining the information sought. There shall be a record of the proceedings at the arbitration hearing and the Arbitrator shall issue a Statement of Decision setting forth the factual and legal basis for the Arbitrator's decision. If neither party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the Arbitrators' decision shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Superior Court, which may be made ex parte, for confirmation and enforcement of the award. If either party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the award of the Arbitrator shall be appealed to three (3) neutral arbitrators (the "Appellate Arbitrators"), each of whom shall have the same qualifications and be selected through the same procedure as the Arbitrator. The appealing party shall file its appellate brief within thirty (30) days after its written notice requesting the appeal and the other party shall file its brief within thirty (30) days thereafter. The Appellate Arbitrators shall thereupon review the decision of the Arbitrator applying the same standards of review (and. all of the same presumptions) as if the Appellate Arbitrators were a California Court of Appeals reviewing a judgment of the Superior Court, except that the Appellate Arbitrators shall in all cases issue a final award and shall not remand the matter to the Arbitrator. The decision of the Appellate Arbitrators shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Superior Court, which may be made ex parte, for confirmation and enforcement of the award. The party appealing the decision of the Arbitrator shall pay all costs and expenses of the appeal, including the fees of the Appellate Arbitrators and the reasonable outside attorneys fees of the opposing party, unless the decision of the Arbitrator is reversed, in which event the expenses of the appeal shall be borne as determined by the Appellate Arbitrators. The Arbitrator shall have the power to enter temporary restraining orders, preliminary and permanent injunctions. Prior to the appointment of the Arbitrator or for remedies beyond the jurisdiction of an arbitrator, at any time, Company may seek pendente lite without thereby waiving its right to arbitration of the dispute or controversy under this section. All arbitration proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed, except as necessary to obtain court confirmation of the arbitration award. The provisions of this Paragraph 28.2  shall supersede any inconsistent provisions of any prior agreement between the parties.

29. NOTICES AND STATEMENTS. All notices, payments and statements which either party hereto is required, or may desire, to give to the other shall be given by addressing the same to the other at the address set forth below or at such other addresses as may be designated in writing by such party in a notice to the other given in the manner prescribed in this Section. All such notices shall be sufficiently given when deposited, so addressed, postage prepaid, in the United States mail and/or when the same are delivered, so addressed, by fax and/or by telegraph and/or by personal delivery and the date of such mailing, faxing, telegraphing, and/or personal delivery shall be the date of the giving of such notices. The addresses to which notices, payments or statements shall be given are the following:

To Owner:

C/o Wyman & Isaacs, LLP

8840 Wilshire Boulevard, 2^nd Floor

Beverly Hills, California 90211

Attention: Bob Wyman

Telefax: (310) 358-3224

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To Company:

10202 West Washington Boulevard

Culver City, California 90232

Attention: Executive Vice President, Legal Affairs Telefax: (310) 204-2713

30. NO OBLIGATION TO EXERCISE RIGHTS. Nothing contained in this Agreement shall obligate Company to use or exercise any of the rights transferred to Company.

31. BREACH TIE-IN. Any breach by Owner of this Agreement shall also be deemed a breach by Owner and Author of the Producing Agreement, and any breach by Owner or Author of the Producing Agreement shall also be deemed a breach of this Agreement.

32. CONCURRENT EXECUTION. Concurrently with the execution of this Agreement, Owner shall execute and deliver to Company a short form Option Agreement and Copyright Assignment in the forms attached hereto as Exhibits "B" and "C," respectively. The Copyright Assignment shall not be recorded unless and until Company has exercised the Option, at which time, but not before, Company shall have the right to insert therein as the effective date thereof the date on which the Option was exercised.

Please confirm your acceptance of the foregoing by signing where indicated below.

Very truly yours,

Escape Artists Production, LLC

	PLATINUM STUDIOS, LLC
/s/David J. Bloomfiled	/s/ Scott  Mitchell Rosenberg
Title Executive Vice President Legal Affairs	Chairman

I have read and understand the foregoing agreement and confirm the authority of Platinum Studios, LLC to grant the rights in accordance with the provisions thereof. As a material inducement to Company, I agree to abide and be personally bound by the terms and provisions of said Agreement

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as if I were a direct party thereto, and will look solely to Platinum Studios, LLC for payment for any and all compensation due to me in connection therewith.

/s/ Scott Mitchell Rosenberg

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SHORT FORM OPTION AGREEMENT

TITLE:         "COWBOYS AND ALIENS"

ASSIGNOR: Platinum Studios, LLC

Platinum Studios, LLC ("Assignor"), for value received, hereby grants to Escape Artists Productions, LLC, having its principal office at 10202 West Washington Boulevard, Culver City, California 90232, USA ("Company"), the sole and irrevocable option to acquire from Assignor all right, title and interest (except for certain rights expressly reserved by Assignor), in and to the literary work ("Property") entitled "Cowboys and Aliens" written by Scott Mitchell Rosenberg ("Author") and registered by copyright in the United States Copyright Office on 20_ under Entry No.                                                    , including without limitation any and all copyrights therein and thereto (and all renewals, extensions, restorations and resuscitations thereof) and any and all rights (except for such reserved rights) whether now known and used, now known and hereafter used, or hereafter known and used, or devised under all such copyrights, for the entire universe, in perpetuity (but in any event for not less than the period of copyright and any renewals, extensions, restorations and resuscitations thereof), in any and all languages and in any and all media whether now known and used, now known and hereafter used, or hereafter known and used, or devised (collectively, the "Rights"). Without limiting the generality of the foregoing, the Rights shall in any and all events include, without limitation, all right, title and interest in and to the following (except for and subject to the "Reserved Rights" as defined in the "Long Form Agreement" as such terms are defined below): (i) the sole and exclusive "Motion Picture" (as defined below) rights, including, without limitation, the sole and exclusive right to produce one (1) or more Motion Pictures or other derivative works (including, without limitation, sequels [including prequels], remakes, musicals and/or serials) based, in whole or in part, on the Property and the right to fix, release, distribute, exhibit, perform, transmit, broadcast, advertise, promote and otherwise exploit such Motion Pictures or other derivative works by any and all means and in any and all media whether now known and used, now known and hereafter used, or hereafter known and used, or devised, including, without limitation, all of the following: theatrical; non-theatrical (including airlines, ships and other carriers, military, educational, industrial and the like); pay-per-view; home video (including videocassettes, digital videodiscs, laserdiscs, CD-ROMs and all other formats); all forms of television (including pay, free, network, syndication, cable, satellite, high definition and digital); video-on-demand, near video- on-demand, and subscription-on-demand; all forms of digital or on-line exploitation, distribution and/or transmission (including, without limitation, the internet), CD-ROMs, fiber optic or other exhibition, broadcast and/or delivery systems and/or computerized or computer-assisted media; all rights of communication to the public, rights of distribution to the public, rights of making available or other forms of public or private communication and/or distribution; and all forms of dissemination, communication or distribution to one or more locations or parties, whether embodied or transmitted utilizing analog, digital or other format; (ii) all ancillary, incidental and subsidiary rights including, without limitation, all merchandising (e.g., games, computer, video and other electronic games, toys, comic books, so-called "making of' books, apparel, food, beverages, posters, and other commodities, services or items), commercial tie-ins, co-

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promotions, music, music publishing, soundtrack, photonovel (using for example stills from the Picture with narrative text), novelization, screenplay publication, interactive media, multi-media; and theme park (or other "themed" or location-based attraction) rights in and to the Property; (iii) the right to make or publish excerpts, synopses or summaries of the Property not to exceed the lesser of one thousand (1,000) words or ten percent (10%) of the Work for purposes of advertising, publicizing or exploiting the foregoing rights in and to the Property; and (iv) subject to the Reserved Rights, the exclusive right to use the title or titles by which the Property may be now or hereafter known, or any components of any such title or titles (a) as the title of Motion Pictures and/or in connection with the advertising, marketing, publicity, promotion and other exploitation thereof, whether such Motion Pictures are based wholly or partially upon the Property, (b) in connection with songs, musical compositions, music or lyrics and/or phonorecords, whether or not included in any such Motion Pictures, and (c) in connection with the publication, recordation, performance and any other use whatsoever of the foregoing items. Upon the exercise of such Option, Company shall automatically and forthwith own and be vested with and, effective in such event, Company is hereby granted, all of such Rights.

 Assignor shall obtain or cause to be obtained all United States copyrights in and to the Property; and should Assignor fail to do so within five (5) business days after Company's request therefor (or such shorter period as may be required by exigent circumstances of which Company advises Assignor), Assignor hereby irrevocably appoints Company, and its agents and employees, as Assignor's attorney-in-fact, with full and irrevocable power and authority to do all such acts and things, and to execute, acknowledge, deliver, file, register and record said Property and all documents, in the name and on behalf of Assignor, as Company may deem necessary or proper to accomplish the same, this being a power coupled with an interest.

Company is empowered to bring, prosecute, defend and appear in suits, actions and proceedings of any nature concerning all copyrights in and to the Property, or concerning any infringements of any such copyright, or any interference with any of the Rights hereby granted under said copyrights, in its own name or in the name of the copyright proprietor, but at the expense of Company, and, at its option, Company may join such copyright proprietor and/or the undersigned as a party plaintiff or defendant in any such suit, action or proceeding. Any recovery of damages or costs from infringement or violation of any such copyright or renewal copyright, so far as it arises from any violation of the Rights hereby assigned, is likewise assigned to and shall be paid to Company.

 As used herein, "Motion Picture", or its equivalent, means and includes motion pictures, cinematography, films and photoplays of every kind and character whatsoever, including the sound records thereof, as well as trailers and clips thereof, produced by means of any photographic, electrical, electronic, mechanical or other processes or devices now or hereafter known, invented, used or contemplated, by which photographs, pictures, images or other visual reproductions or representations are or may be printed, imprinted, recorded or otherwise preserved on material of any description (whether translucent or not) for later projection or exhibition in such manner that the same are, or appear to be, in motion on screen, mirror, tube or other medium or device, whether or not accompanied by sound records and whether now or hereafter known, invented, devised or contemplated.

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This Short Form Option Agreement is subject to the terms and conditions of the long form Literary Option Purchase Agreement (the "Long Form Agreement") between Company and Owner dated as of February 15, 2002.

Executed as of this 15th day of February, 2002.

PLATINUM STUDIOS, LLC
By:	/s/ Scott  Mitchell Rosenberg
	Chairman

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STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

On                                  ,                                                       20_, before me,                                     , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged tome that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public

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soundtrack, photonovel (using for example stills from the Picture with narrative text), novelization, screenplay publication, interactive media, multi-media, and theme park (or other "themed" or location-based attraction) rights in and to the Property; (iii) the right to make or publish excerpts, synopses or summaries of the Property not to exceed the lesser of one thousand (1,000) words or tern percent (10%) of the Work for purposes of advertising, publicizing or exploiting the foregoing rights in and to the Property, and (iv) subject to the Reserved Rights, the exclusive right to use the title or titles by which the Property may be now or hereafter known, or any components of any such title or titles (a) as the title of Motion Pictures and/or in connection with the advertising, marketing, publicity, promotion and other exploitation thereof, whether such Motion Pictures are based wholly or partially upon the Property, (b) in connection with songs, musical compositions, music or lyrics and/or phonorecords, whether or not included in any such Motion Pictures, and (c) in connection with the publication, recordation, performance and any other use whatsoever of the foregoing items.

Assignor shall obtain or cause to be obtained all United States copyrights in and to the Property; and should Assignor fail to do so within five (5) business days after Company's request therefor (or such shorter period as may be required by exigent circumstances of which Company advises Assignor), Assignor hereby irrevocably appoints Company, and its agents and employees, as Assignor's attorney-in-fact, with full and irrevocable power and authority to do all such acts and things, and to execute, acknowledge, deliver, file, register and record said Property and all documents, in the name and on behalf of Assignor, as Company may deem necessary or proper to accomplish the same, this being a power coupled with an interest.

Company is empowered to bring, prosecute, defend and appear in suits, actions and proceedings of any nature concerning all copyrights in and to the Property, or concerning any infringements of any such copyright, or any interference with any of the Rights hereby granted under said copyrights, in its own name or in the name of the copyright proprietor, but at the expense of Company, and, at its option, Company may join such copyright proprietor and/or the undersigned as a party plaintiff or defendant in any such suit, action or proceeding. Any recovery of damages or costs from infringement or violation of any such copyright or renewal copyright, so far as it arises from any violation of the Rights hereby assigned, is likewise assigned to and shall be paid to Company.

As used herein, "Motion Picture", or its equivalent, means and includes motion pictures, cinematography, films and photoplays of every kind and character whatsoever, including the sound records thereof, as well as trailers and clips thereof, produced by means of any photographic, electrical, electronic, mechanical or other processes or devices now or hereafter known, invented, used or contemplated, by which photographs, pictures, images or other visual reproductions or representations are or may be printed, imprinted, recorded or otherwise preserved on material of any description (whether translucent or not) for later projection or exhibition in such manner that the same are, or appear to be, in motion on screen, mirror, tube or other medium or device, whether or not accompanied by sound records and whether now or hereafter known, invented, devised or contemplated.

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Exhibit "A"

Universal Scripts:

Draft #1 - Steve Oedekerk First Draft, dated December 15, 1997 Draft #2 - Jeffrey Boam First Draft, dated October 15, 1998 Draft #3 - Chris Hauty First Revision, dated March 20, 2000 Draft #4 - Chris Hauty Second Revision, dated June 16, 2002

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Schedule 1

Platinum Studios Source Material (under option by Escape Artists):

Cowboys and Aliens treatment, written by Scott Rosenberg for Platinum Studios, LLC

Cowboys & Aliens treatment written by Gregory Noveck for Platinum Studios, LLC, dated May 13, 1997

Cowboys & Aliens treatment written by Martin Lodewijk as a work for hire for Platinum Studios, LLC, dated May 1, 1997

Cowboys and Aliens Graphic Novel (draft 1) written by Fred Van Lents

Cowboys and Aliens Graphic Novel (draft 2) written by Fred Van Lents

Cowboys and Aliens Graphic Novel Breakdown written by Fred Van Lents

Cowboys and Aliens Treatment written by Pat McGreal as a work for hire for Platinum Studios, LLC

Cowboys and Aliens Treatment written by David Quinn as a work for hire for Platinum Studios, LLC

Cowboys and Aliens Treatment written by Dan Mishkin as a work for hire for Platinum Studios, LLC

Cowboys and Aliens Treatment written by Mike Martin and Andy Mangels as a work for hire for Platinum Studios, LLC

Cowboys and Aliens Treatment written by Brain Augustine, as a work for hire for Platinum Studios, LLC, dated 1-28-00

Cowboys and Aliens Treatment written by Brain Augustine, as a work for hire for Platinum Studios, LLC, dated 8-1-00

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ESCAPE

A R T I S T S

DAVID J. BLOOMFIELD               WRITER'S DIRECT DIAL

Executive Vice President           Tel: 310.244.6631Fax: 310.204.2713

Business and Legal Affairs        david_bloomfield@spe.sony.com

March 29, 2004

Bob Wyman

Wyman & Isaacs

8840 Wilshire Boulevard

2nd Floor

Beverly Hills, CA 90211

Re:           "Cowboys and Aliens"

Dear Bob:

References made to the Producing Agreement dated as of February 15, 2002 by and between Escape Artists Productions, LLC ("Company") and Scott Mitchell Rosenberg Productions ("Lender") f/s/o Scott Mitchell Rosenberg ("Producer").

This confirms the following:

1. In the event a theatrical motion picture is produced based on the Property, then provided Producer is not in material uncured breach of the agreement, Producer shall be entitled to the producing fixed compensation, contingent compensation and credit set forth in the agreement (i.e., even if Producer is "Pay or Played" off the Picture and is not required to render any services in connection therewith Lender shall nonetheless be entitled to the compensation and credit set forth above).

2. Subsequent Productions: In the event subsequent productions are produced based on theProperty, and provided Producer is not in material uncured breach, Producer shall be "locked for life" with respect to his fixed and contingent compensation and credit for such subsequent productions as set forth in the agreement (i.e., irrespective of the time period that  may pass between the initial theatrical production and the subsequent production, whether Artist is required to render services, or whether any production's final negative cost exceeds the ingoing budget).

The balance of the terms and conditions shall be negotiated in good faith between the parties within Company's and Columbia Pictures' customary parameters for deals of this kind.

Warmest regards,

/s/ David J. Bloomfield

David J. Bloomfield

Title 

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DAVID J. BLOOMFIELD                  WRITER'S DIRECT DIAL

Executive Vice President        Tel: 310.244.6631 Fax: 310.204.2713

Business and Legal Affairs       david_bl oomfi eld@spe. son y. com

July 7, 2003

Bob Wyman

Wyman & Isaacs

8840 Wilshire Boulevard

2nd Floor

Beverly Hills, CA 90211

Re: "Cowboys and Aliens" / Option Purchase Agreement

Dear Bob:

As you know, Escape Artists Productions, LLC ("Company") is entering into an agreement with Columbia Pictures ("Columbia") pursuant to which the long form Option-Purchase Agreement (the "Option Purchase Agreement") dated as of February 16, 2002 by and between Company and Platinum Studios, LLC ("Owner") will be assigned to Columbia for further development and possible production (and all capitalized terms used herein without definition shall have the meanings set forth in the Option Purchase Agreement).

1 In the event that pursuant to paragraph 10.5 of the Option Purchase Agreement the Property reverts to Owner, Owner agrees that Company shall be entitled to a payment (a "Subsequent Production Payment") equal to the aggregate of (a) 50% of all payments received by Owner or its affiliates for the option, license, sale or other disposition of any rights in the Property to a third party net of third party agent and lawyer commissions not to exceed 15%, plus (b) 50% of all producing fees received by Scott Mitchell Rosenberg or his loan out company or any other principals of Owner or Owner's affiliates in connection with the Property net of third party agent and lawyer commissions not to exceed 15%; provided that the aggregate of all Subsequent Production Payments paid to Company shall be subject to a lifetime cap of$1.5 million dollars.

2.  In the event that Columbia abandons further development of the picture and Columbia's rights in the Option Purchase Agreement revert to Company, Company and Owner agree that the Option Purchase Agreement shall be deemed automatically amended as follows:

(a)           Paragraph 5.4 shall be deleted and the following inserted in lieu thereof:

"5.4 If Company in its sole discretion makes any payment in the form of a fixed amount (and excluding any payment in the form of contingent compensation) to Universal Pictures or any other third party other than Columbia or its affiliates (including, for example, any amount paid to an errors and omissions insurance carrier for an increased premium) in order to acquire rights or make settlements regarding previous materials developed based on the Property other than material developed by Columbia, then for the first Motion Picture based on or adapted from the Property only ("First Picture"), Company shall have the right to reduce thePurchase Price by an amount equal to 50% of any such payments until the Purchase Price has been reduced to One Million Two Hundred Fifty Thousand Dollars ($1,250,000); provided further, Owner shall have the right to participate in any settlement negotiations; and provided, further, that the first Fifty Thousand Dollars ($50,000) of the cost of any errors and omissions insurance premium beyond the customary premium for a typical studio theatrical motion picture shall be borne by Company. Notwithstanding the foregoing, if the First Picture is produced by Dreamworks or Universal there shall be no such right of offset. Further, if Company disregards a reasonable requirement of the errors and omissions insurance carrier or the domestic distributor's legal counsel, then Owner shall not be subject to offset for any claim arising out of such particular matter. Owner represents and warrants that Owner has provided Company with copies of all the screenplays developed by Universal and/or Dreamworks while the project was under option to Universal pursuant to the Literary Option Purchase Agreement dated as of May 16, 1997 between Universal and Owner, (the "Universal Agreement"), a complete list of which screenplays is set forth on Schedule 3 and incorporated herein by this reference (the "Universal Screenplays"), and to the best knowledge of Owner the aggregate hard cost investment in development at Universal and/or Dreamworksdoes not exceed $2,000,000."

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(b) Paragraph 10.5 shall be deleted and the following inserted in lieu thereof:

"10.5 Reversion. All of Company's rights to the Property (excluding rights in any productions already produced and all ancillary rights in connection with exploitation of such productions, which rights in perpetuity shall be owned by Company [provided Company's merchandising rights shall terminate at the time of such reversion]) will thereafter revert to Owner if there is no production of a motion picture based on the Property within six (6) years or no subsequent production (whether a feature film, television production or video/dvd production) commences principal photography by the later of (i) six years after the initial general theatrical release of the preceding theatrical motion picture, or (ii) three years after the final initial broadcast of any television program (including any program distributed in the internet) based on the Property, or (iii) three years from the "street date" of any straight to video/DVD product (or on demand internet production) based on the Property (it being agreed that only "good faith first class" legitimate productions [i.e., not productions without commercial value created solely to prevent the reversion of rights per this Section] shall postpone the reversion of rights per this Section). If the Property reverts to Owner, then Company shall be entitled to a payment equal to 1.5% of the ingoing budget (i.e., the final approved budget as of the date of commencement of principal photography of the applicable production exclusive of bond, contingency, financing and overhead) payable upon commencement of principal photography of each subsequent motion picture (feature, television video/DVD or other). This payment for theatrical feature films will be capped at $1 million per production and for video and television production capped at one half the royalty payments for Owner referenced in Section 12.2 herein below; notwithstanding the foregoing, if (x) there is no animated production based on the Property commenced within four years from the initial general release of the preceding theatrical motion picture, (y) there has been no production commenced within the applicable time periods set forth in clauses (ii) or (iii) above and (z) no productions described in (i), (ii) or (iii) are in official pre-production nor has any party made a firm commitment (such as a pay or play commitment to a lead actor) for a subsequent such production, then the animated rights in the Property shall revert to Owner (subject to Company's right to royalty payments as set forth above); provided further, however, if Company is in active negotiations or engaged in active progress-to-production regarding production of an animated production based on the Property, then such animated rights shall not revert during the pendancy of such time period (and Owner agrees not to frustrate any such activities); provided in no event shall such time period be extended beyond the time periods set forth in clauses (i), (ii) or (iii) above. Notwithstanding anything to the contrary contained herein, Company shall retain the right to distribute, in perpetuity, any and all Motion Pictures (including television programs) which have been produced hereunder prior to such reversion."

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(c) Paragraph 11 regarding merchandising shall be deleted and the following inserted inl ieu thereof:

"11. MERCHANDISING.

11.1 Approvals and Controls/Consultation. Subject to Section 11.2.2 below, as between Company and Owner, all merchandising with respect to the Property and each Motion Picture and related rights with respect to the Property and each Motion Picture shall be exercised and controlled at all times by Company. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, and provided Owner is not in default of this Agreement, and that Owner has performed all material obligations to be performed hereunder, Company shall meaningfully consult with Owner with respect to Company's exploitation of its merchandising rights in connection with the Property, including, without limitation, agreements with respect thereto, and any images, style guides, and/or products Company creates; provided, however, that Company's decisions or those of Company's domestic distributor with respect to the exploitation of such rights shall be final and binding. In this respect, Company shall provide Owner with copies of deal memos for Owner's review prior to executing same, and upon Owner's request, Company shall provide Owner with copies of all executed deal memos and long form agreements

11.2 Merchandising Royalty Payments.

11.2.1 Domestic Territory/Studio Territory. In the domestic territory and in each territory that Company elects (or is required) to include merchandising in the license of rights to the domestic distributor ("Studio") (collectively, the "Studio Territory"), Owner shall be entitled to the following royalty: Thirty Five Percent (35%) of One Hundred Percent (100%) of "Net Merchandising Receipts" and Fifty Percent (50%) of One Hundred Percent (100%) of "Net Interactive Game Receipts". "Net Merchandising Receipts" shall be defined as gross merchandising receipts (including licensing fees received in connection with theme park rights) actually received by the Studio (net of returns and allowances) from licensing of the applicable rights in the Property in the Studio Territory after deduction of all unaffiliated third party royalties and participations (other than any participation payable to Escape Artists, LLC or its affiliates or principals), if any, actually paid by the Studio and unaffiliated foreign subagents fees (provided if any affiliate of the Studio is actually exploiting the rights (e.g., exploitation by Sony electronics to produce product using the name and logo of the Property) then only amounts received by the Studio from such affiliate shall be included as gross merchandising receipts and the terms of any agreement between the Studio and any such affiliate shall be comparable to an arms length transaction with an unaffiliated third party. "Net Interactive Game Receipts" shall be defined as gross receipts actually received by the Studio from exploitation of the applicable Rights (net of returns and allowances) from the Studio Territory from "Interactive Rights" (as defined in Section 11.2.4 herein below), after deduction of all unaffiliated third party royalties and participations (other than any participation payable to Escape Artists, LLC or its affiliates or principals), if any, actually paid by the Studio and unrelated foreign subsubagents fees, if any. In the event that the Studio alone or through anyaffiliated company without the involvement of any third party manufacturermanufactures an interactive video game then in lieu of the percentage of Net Interactive Game receipts set forth in this Section above Owner shall receive a royalty of Seven and One Half Percent (7.5%) of "gross sales" as computedand adjusted per MIB Agreement (as defined below), which provides as follows: " `gross sales' shall mean the gross sales price on all shipments ofthe product, after the deduction of all returns and uncollectible accounts. And actual deductions for cash, trade, quantity or freight discounts. Alltransactions between Company and affiliated parties shall be governed byarms-length negotiations and prices, discounts and other monetary items determined thereby shall be consistent with such terms given to unaffiliatedthird parties."

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11.2.2 Merchandising Outside of the Studio Territory. Company and Owner shall jointly control the merchandising rights (including interactive games) outside of the Studio Territory, and split all profits (after deduction of costs and third-party royalties) fifty percent (50%) to each of Owner and Company; provided, however, that if there is disagreement between Company and Owner regarding exploitation of the merchandising rights, Company's decisions shall be final and binding; provided, further, that in the event Company or its successor is not actively in the business of developing, producing or distributing Motion Pictures, then Owner's decisions shall be final and binding.

11.2.3 Hasbro First Look. Provided the Studio that is acquiring the rights to the First Picture in the domestic territory does not have a then pre- existing agreement with a toy company for toy merchandising, Company shall require the domestic distributor to give Hasbro a "first look" at entering into a licensing agreement for toy merchandising for the First Picture, provided if the studio and Hasbro do not enter into an agreement within 15 business days of commencement of negotiations, then the studio shall have no further obligation to Hasbro.

11.2.4 Interactive Rights Definition. "Interactive Rights" as used herein shall be as defined in the "Men In Black" Agreement ["MIB Agreement"] between Columbia Pictures and Malibu Comics, true and correct excerpts of which have been supplied to Company by Owner), which definition is as follows: (i) all interactive software in any delivery systems, including, without limitation, magnetic semiconductor and optical media, which is compatible with (A) video game console systems, (B) computer systems, (C) optical disc-based systems, such as CD-ROM, (D) coin actuated video game systems (i.e., interactive video entertainment which is enabled by insertion of a coin, token, or debit card), including upright and table-top models and kits and boards for the foregoing, and (E) hand-held video games, and (F) any location based video games, and (G) any variations of the above (including, e.g., virtual reality based on or derived from interactive software delivery systems as opposed to virtual reality presented in another manner, as, e.g., theatrically), and (ii) notwithstanding the reservation of rights, comic books published or appearing on video and video disc and optical disc-based systems to the extent that said comic books involve interactive choices by the reader resulting in different game play scenarios (as opposed to comic books using video, video disc or optical disc-based systems as a medium akin to traditional publishing to be read by a reader without interactive choices other than for storytelling purposes [such as branching stories]).

11.2.5 Merchandise Items Samples. Company shall cause the Studio to provide to Owner twenty (20) samples of each type of merchandise to Owner, excluding any items with a cost of $100 or more. Owner shall have the right to purchase any item of available merchandise at cost (but such items may not be resold)."

(d)    The following shall be added to the end f paragraph 18.1:

"In addition, subject to the approval of the Studio, Owner shall receive a nonanimated logo after the end titles of the Picture."

Wannest regards,

ESCAPE ARTISTS PRODUCTIONS, LLC

PLATINUM STUDIOS, LLC
By:	/s/ Scott  Mitchell Rosenberg
	Chairman

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EX-10.14

Exhibit 10.14

As of December 11, 2003

PLATINUM STUDIOS LLC

c/o William Morris Agency

One William Morris Place

Beverly Hills, CA 90212

Attn: Alan Gasmer

Re: "UNIQUE" / PLATINUM STUDIOS LLC / OPTION /ACQUISITION OF

RIGHTS

Gentlemen:

Reference is hereby made to the agreement ("Agreement") dated as of December 11, 2003, between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS LLC ("Owner") for WDP's option to acquire all right, title and interest in and to the unpublished graphic novel written and owned by Owner entitled "UNIQUE" (formerly entitled "JAUNT") in connection with a possible Motion Picture based thereon tentatively entitled "UNIQUE" (the "Picture").

WDP shall have no obligation to perform pursuant to this side letter ("Side Letter") unless and until: (i) WDP receives an executed original of this Side Letter and the Agreement, in form and substance acceptable to WDP and (ii) the Conditions Precedent set forth in Paragraph 1 of the Agreement have been satisfied.

Based on the unique circumstances presented and in consideration of the mutual covenants and agreements contained in the Agreement, the parties hereby agree as follows on a non-precedential basis:

1. Reference is made to Paragraph 2.2.a. of the Agreement. Notwithstanding anything to the contrary therein, WDP hereby acknowledges and agrees that the Initial Option Period shall end twenty-four (24) months following the earlier to occur of: (a) satisfaction of the Conditions Precedent set forth in Paragraph 1 of the Agreement or (b) the date on which WDP pays Michael Cooney for the commencement of his writing services in connection with the Picture.

2. Reference is made to Paragraph 3.1.c. of the Agreement, which is hereby deleted in its entirety and replaced with the following new Paragraph 3.1.c.:

"c. Television Series.

(i) If either: (A) 25,000 or more units of the Property are sold as a graphic novel (provided that Owner submits documentation substantiating such amount in form and substance acceptable to WDP in its sole discretion) prior to commencement of principal photography of the Picture or (B) the Property is listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to the commencement of principal photography of the Picture, and the Picture is produced and released as a feature-length Theatrical Motion Picture, then the following royalties are payable for each episode of a television series based upon the Picture, as produced for a particular broadcast season:

1

Primetime Network (i.e., ABC, CBS or NBC)
Running Time	Payment
30 minutes (or less)	$	2,250
60 minutes (or less, but in excess	$	2,750
of 30 minutes)
90 minutes (or more)	$	3,250
Non- Primetime Network or Non-Network
Running Time	Payment
30 minutes (or less)	$	1,125
60 minutes (or less, but in excess	$	1,375
of 30 minutes)
90 minutes (or more)	$	1,625

(ii) If: (A) 25,000 units of the Property are not sold as a graphic novel prior to commencement of principal photography of the Picture or (B) the Property is not listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to the commencement of principal photography of the Picture, and the Picture is produced and released as a feature-length Theatrical Motion Picture, then, in lieu of the television series royalties set forth in Paragraph 3.1.c(i) above, the following royalties are payable for each episode of a television series based upon the Picture, as produced for a particular broadcast season:

Primetime Network (i.e., ABC, CBS or NBC)
Running Time	Payment
30 minutes (or less)	$	750
60 minutes (or less, but in excess	$	1,250
of 30 minutes)
90 minutes (or more)	$	1,750
Non- Primetime Network or Non-Network
Running Time	Payment
30 minutes (or less)	$	375
60 minutes (or less, but in excess	$	625
of 30 minutes)
90 minutes (or more)	$	875	"

2

3. Alternative Production Source Credit. Reference is made to Paragraph 4. of the Agreement. The following shall be added as Paragraph 4.4 thereto:

"4.4 Alternative Production Source Credit. Provided: (a) the Property is listed on the Diamond Comic Distributors, Inc. U.S. preview catalog prior to commencement of principal photography on any direct-to-video motion picture, television motion picture and/or television series produced hereunder which is substantially based on the Property (each an "Alternative Production"); and (b) Owner is not in breach or default hereunder, then subject to network approval, any applicable guild and/or union restrictions and WDP's standard exclusions and exceptions (including artwork title exceptions), WDP shall accord Owner source credit in connection with any such Alternative Production produced by WDP hereunder, as follows:

(i) On Screen. On a separate card (which card may be shared in WDP's sole discretion with other source material on which the Alternative Production is based), in the main titles if any other non-cast member (excluding financier[s] or distributor[s] of the Picture and WDP's presentation credit) is accorded credit in the main titles (otherwise in the end titles), below or after the title, in substantially the form of "Based on the Platinum Studios comic book created by Scott Mitchell Rosenberg," or if the title of the Alternative Production is materially different from that of the Property, then said credit shall be substantially in the form of 'Based on the Platinum Studios comic book `Unique' created by Scott Mitchell Rosenberg" in an average size of type not less than the larger of: (i) fifty percent (50%) of the average size of type of the title of the Alternative Production on screen or (ii) one hundred percent (100%) of the average size of type utilized to accord credit the screenwriter credit on screen.

(ii) Paid Ads. In paid ads issued or controlled by WDP, in the billing block portion only, if any, (i.e., if such otherwise applicable paid ad does not have a billing block, Owner shall not be entitled to receive credit in such paid ad), below or after the regular ie., not artwork) title of the Alternative Production, in substantially the form of "Based on the comic book by Scott Mitchell Rosenberg," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on `Unique' by Scott Mitchell Rosenberg" in an average size of type not less than the larger of: (i) thirty-five percent (35%) of the average size of the regular i.e., not artwork) title of the Alternative Production in such billing block or (ii) one hundred percent (100%) of the average size of type utilized to accord the screenwriter credit in such billing block. If the regular billing block is used in the jacket of the videocassette or video disc (i.e., if such otherwise applicable videocassette and/or video disc does not have a billing block, Owner shall not be entitled to receive credit in such videocassette and/or video disc), Owner's name shall appear as part of the regular billing block of said videocassette and/or video disc.

(iii) Excluded Ads: In the billing block portion only, if any, of any so-called excluded ads issued or controlled by WDP in which the screenwriter is accorded credit in such billing block (i.e., if such otherwise applicable excluded ad does not have a billing block, then Artist shall not be entitled to receive credit in such excluded ad), below or after the regular (i.e., not artwork) title of the Alternative Production in such billing block, in substantially the form "Based on the comic book by Scott Mitchell Rosenberg," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on `Unique' by Scott Mitchell Rosenberg," in an average size of type not less than the larger of: (i) thirty-five percent (35%) of the average size of type of the regular (i.e., not artwork) title of the Picture in such billing block; or (ii) one hundred percent (100%) of the average size of type utilized to accord the screenwriter credit in such billing block. Notwithstanding the foregoing, Artist shall not be entitled to receive credit in congratulatory, nomination and/or award ads in which only the person(s) so recognized receive credit, special ads, ads specially exempted by Paragraphs 8-203d., 8-203f. and 8-203g. of the DGA Basic Agreement, ads announcing a personal appearance, radio ads and the audio portion of teasers, trailers and television ads."

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Except as expressly set forth herein, all provisions of the Agreement shall remain unchanged and in full force and effect and may not be modified except by a writing executed by all parties to the Agreement. Capitalized terms not defined herein shall have the same meaning as set forth in the Agreement.

Please confirm the foregoing as accurately reflecting the agreement and understanding of the parties by signing in the space provided below.

	Very truly yours,
	WALT DISNEY PICTURES
By:	/s/ Douglas A. Carter
	DOUGLAS A. CARTER
Its:	SENIOR VICE PRESIDENT
	BUSINESS AFFAIRS

ACCEPTED AND AGREED:

PLATINUM STUDIOS, LLC

By: Scott Rosenberg

Its: Chairman

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DATE:	As of December 11, 2003
	"UNIQUE" / PLATINUM
SUBJECT:	STUDIOS LLC/ OPTION /
	ACQUISITION OF RIGHTS

MEMORANDUM OF AGREEMENT

This Memorandum of Agreement ("Agreement") dated as of December 11, 2003, sets forth the terms of the agreement between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS LLC ("Owner") for WDP's option to acquire all right, title and interest in and to the unpublished graphic novel written and owned by Owner entitled "UNIQUE" (formerly entitled "JAUNT") (the "Property," as more fully defined in Paragraph 14.11 below) (subject to Owner's reserved rights as set forth in Paragraph 6. below) in connection with a possible Motion Picture based thereon tentatively entitled "UNIQUE" (the "Picture").

1. CONDITIONS PRECEDENTWDP shall have no obligation to perform under this Agreement unless and until:

1.1 WDP receives an executed original of this Agreement including all attachments hereto (in form and substance acceptable to WDP);

1.2 WDP receives an executed agreement (in form and substance acceptable to WDP) between WDP and David Goyer ("Goyer") (or his loan-out company) for Goyer's directing services in connection with the Picture;

1.3 WDP receives an executed agreement (in form and substance acceptable to WDP) between WDP and David Heyman ("Heyman") (or his loan-out company) for Heyman's producing services in connection with the Picture;

1.4 WDP receives an executed agreement (in form and substance acceptable to WDP) between WDP and Scott Mitchell Rosenberg ("Rosenberg") (or his loan-out company) for Rosenberg's producing services in connection with the Picture;

1.5 WDP receives an executed agreement (in form and substance acceptable to WDP) between WDP and Michael Cooney ("Cooney") (or his loan-out company) for Cooney's writing services in connection with the Picture; and

1.6 WDP approves, in its sole discretion, the chain-of-title of the rights granted to WDP herein, approves all agreements with respect thereto, and receives all assignments and releases (including publisher's releases) that it requires in connection therewith (in form and substance acceptable to WDP).

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2. OPTION / PURCHASE OF RIGHTS

2.1 Option; Rights Granted. Owner hereby grants to WDP the exclusive and irrevocable option ("Option") to acquire all right, title and interest, including, without limitation, all forms of: motion picture, television, digital television, video and computer games, videocassette, video and laser disc, computer assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multimedia and any other devices or methods now existing or hereafter devised), character, remake, sequel, sound record, theme park, stage play, merchandising and all allied, ancillary and subsidiary rights therein of every kind and nature, now known or hereafter devised, throughout the universe and in perpetuity, in all languages, in and to the Property (collectively the "Rights," as more fully defined in Paragraph 5. below), subject only to the reserved rights enumerated in Paragraph 6. below.

2.2 Option Period.

a. Initial Option Period. The Option may be exercised by written notice given at any time commencing as of the date of this Agreement and ending twenty-four (24) months following satisfaction of the Conditions Precedent set forth in Paragraph 1. above (the "Initial Option Period"), subject to extension as set forth below.

b. First Extended Option Period. The Initial Option Period may be extended, in WDP's sole discretion, for an additional period of twelve (12) months (the "First Extended Option Period") commencing upon the expiration of the Initial Option Period by written notice to Owner during the Initial Option. Period, subject to extension as set forth below.

c. Second Extended Option Period. The First Extended Option Period may be extended, in WDP's sole discretion, for an additional period of six (6) months (the "Second Extended Option Period") commencing upon the expiration of the First Extended Option Period by written notice to Owner during the First Extended Option Period, subject to extension as set forth below.

d. Suspension / Extension. The Initial Option Period as extended, if ever, by the First Extended. Option Period and the Second Extended Option Period, is hereinafter referred to as the "Option Period." Notwithstanding anything to the contrary contained herein, any option period may be further extended for any period during which a claim with respect to the Property has been asserted and remains unresolved (provided that, with respect to any claim that is not based on Lender's and Owner's representations, warranties or obligations hereunder, such extension shall not exceed eighteen (18) months unless (i) a lawsuit has been filed with regard to such claim, (ii) an agreement to enter into arbitration has been reached, (iii) an agreement to enter into any other judicial proceeding or alternative dispute resolution proceeding [e.g., mediation, so-called "rent-a-judge" proceedings, etc.] has been reached, in which case this eighteen (18) month time limitation shall not apply), or (iv) WDP has entered into settlement negotiations, in which case this eighteen (18) month time limitation shall not apply), and for any period during which WDP's development and/or production activities based upon the Property are interrupted or postponed due to any occurrence of an event of force majeure, including without limitation, any labor strike, threatened labor strike, or other labor dispute.

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2.3 Option Consideration.

a. Initial Option Period. In consideration of Owner's grant to WDP of the Option, WDP shall pay Owner the sum of $300,000 (the "Initial Option Fee") upon execution and delivery of this Agreement by Owner to WDP and satisfaction of the Conditions Precedent set forth in Paragraph 1. above (whichever last occurs), which Initial Option Fee shall be fully applicable against the "Purchase Price" set forth in Paragraph 2.6 below.

b. First Extended Option Period. If WDP extends the Initial Option Period as set forth in Paragraph 2.2.b. above, WDP shall pay Owner the additional sum of $100,000 (the "First Extended Option Fee") upon the commencement of the First Extended Option Period, which First Extended Option Fee shall not be applicable against the "Purchase Price" set forth in Paragraph 2.6 below.

c. Second Extended Option Period. If WDP extends the First Extended Option Period as set forth in Paragraph 2.2.c. above, WDP shall pay Owner the additional sum of $50,000 (the "Second Extended Option Fee") upon the commencement of the Second Extended Option Period, which Second Extended Option Fee shall not be applicable against the "Purchase Price" set forth in Paragraph 2.6 below.

2.4 Exercise of Option. The Option shall be deemed exercised upon either notice given to Owner (or Owner's agent) during the Option Period or the commencement of principal photography of the Picture, if ever.

2.5 License. Owner exclusively licenses WDP (and Persons and entities engaged by WDP) to engage in preproduction, development and writing activities based on or pertaining to the Property during the Option Period. Owner acknowledges that Owner shall have no right, title or interest in or to the results and proceeds of any such activities, whether or not the Option is exercised, and that such results and proceeds shall be the sole property of WDP, whether or not the Option is exercised.

2.6 Purchase of Property. If WDP exercises the Option, WDP will own all of the Rights (subject only to the reserved rights enumerated in Paragraph 6. below), and as payment in full for Owner's grant of the Rights to WDP and for all of the promises, representations, warranties and agreements made by Owner hereunder, and provided Owner is not in breach or default hereunder, Owner shall be entitled to receive the sum of $1,000,000 (the "Purchase Price") less the Initial Option Fee i.e., $300,000) previously paid to Owner pursuant to Paragraph 2.3.a. above, which sum shall be payable to Owner upon the earlier to occur of the exercise of the Option by notice to Owner or the commencement of principal photography of the Picture, if ever.

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2.7 Production Bonus. If the Picture is produced and released as a feature-length Theatrical Motion Picture, and provided that Owner is not in breach or default hereunder, then Owner shall be entitled to receive a bonus in the amount of $250,000, which amount shall accrue and become payable to Owner upon commencement of principal photography of the Picture as a feature-length Theatrical Motion Picture, if ever.

2.8 Fair Compensation. Owner acknowledges that the compensation provided to be paid pursuant to Paragraphs 2.3.a., 2.3.b. (if applicable) 2.3.c (if applicable) and 2.6 (if applicable) above, is by itself fair, reasonable and sufficient compensation for the rights granted to WDP hereunder whether or not any production bonus pursuant to Paragraph 2.7 above or contingent payment pursuant to Paragraph 2.9 below ever becomes payable to Owner.

2.9 Contingent Payments. If the Picture is produced and released as a feature-length Theatrical Motion Picture, and Owner is not in breach or default hereunder, then Owner shall be entitled to receive the following, as applicable:

a. At such time, if ever, that the Picture achieves "Start Point #1" (as defined in Paragraph 2.10.d. below), the flat sum of $250,000;

b. At such time, if ever, that the Picture achieves "Start Point #2" (as defined in Paragraph 2.10.e. below), an amount equal to 1-1/4% of 100% of the Adjusted Defined Receipts, if any, of the Picture accruing from Start Point #2; and

c. At such time, if ever, that the Picture achieves "CP Start Point" (as defined in Paragraph 2.10.f. below), the percentage of Adjusted Defined Receipts, if any, in Owner's contingent payment set forth in Paragraph 2.9.b. above shall escalate prospectively (i.e., not retroactively) to an amount equal to 2-1/2% of 100% of the Adjusted Defined Receipts, if any, of the Picture, in excess of and accruing after CP Start Point is achieved, if ever.

2.10 Definitions. The following definitions shall apply to this Agreement:

a. "Adjusted Defined Receipts" as referenced herein shall be defined, computed, accounted for and paid in accordance with WDP's Exhibit "DRCB" (and the rider thereto), and is defined as the Defined Receipts specified in Paragraph 1.1.A. of Schedule 1 thereof (subject to the exclusions set forth in Paragraph 1.1.B. of Schedule 1 thereof), less the deductions set forth in Paragraph 1.1.C. of Schedule 1 thereof, but substituting theatrical reissue costs in place of the theatre level advertising expenses set forth in Paragraph 1.1.C.1, of Schedule 1 thereof (i.e., costs incurred in connection with conversions, checking, collections, residuals, trade dues, licenses, taxes and theatrical reissue costs).

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b. "Defined Receipts" as referenced herein shall be defined, computed and accounted for in accordance with WDP's Exhibit "DRCB" (and the rider thereto).

c. "Contingent Proceeds" and "Contingent Bonus Formula" as referenced herein shall be defined, computed, accounted for and paid in accordance with WDP's Exhibit "CB" (and the rider thereto).

d. "Start Point #1" as referenced herein shall be defined as the end of the accounting period, if ever, in which Contingent Proceeds, if any, are achieved in accordance with the "Contingent Bonus Formula" set forth in Exhibit "CB" and the rider thereto), except that for the purpose of calculating Start Point #1 only, in lieu of those "Percentage Deductions" set forth in the Contingent Bonus Formula, the Percentage Deduction shall instead be an "off-the-top" zero percent (0%) in all territories and media described therein.

e. "Start Point #2" as referenced herein shall be defined as the end of the accounting period, if ever, in which Contingent Proceeds, if any, are achieved in accordance with the "Contingent Bonus Formula" set forth in Exhibit "CB" (and the rider thereto) except that for the purpose of calculating Start Point #2 only, in lieu of those "Percentage Deductions" set forth in the Contingent Bonus Formula, the Percentage Deduction shall instead be an "off-the-top" twenty percent (20%) in all territories and media described therein.

f. "CP Start Point" as referenced herein shall be defined as the end of the accounting period in which there are first Contingent Proceeds, if ever, from the Picture as calculated pursuant to WDP's Exhibit "CB" (and the rider thereto).

3. ROYALTIES

3.1 Theatrical Sequels; Theatrical Remakes; Television Programs. If the Picture is produced and W DP thereafter produces a Sequel to or Remake of the. Picture, or a Television Motion Picture based on the Picture, and provided Owner is not engaged to write for the applicable production, and further provided Owner is not in breach or default of a material term or condition hereunder, then Owner shall be entitled to receive the applicable royalty specified below, it being understood and agreed that Owner shall bear and be responsible for the payment of any and all third party royalties or use payments of any kind claimed by or through Owner to be payable in connection with the Property ("Third Party Royalties"), and shall fully indemnify WDP in connection with any and all Third Party Royalties.

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a. Theatrical Sequel. If WDP, in its sole discretion, produces a feature-length Theatrical Motion Picture Sequel to the Picture based upon a character (whether or not the name of such character in such Theatrical Motion Picture Sequel is the same as the name of such character in the Property) or plot line(s) from the Property which does not appear in the Picture, Owner shall be entitled to one hundred percent (100%) of the Purchase Price actually paid to Owner pursuant to Paragraph 2.6 above and one hundred percent (100%) of the Production Bonus actually paid to Owner pursuant to Paragraph 2.7. above plus, as a contingent payment, contingent payments of such sequel, which payments shall be equal to one hundred percent (100%) of the contingent payments to which Owner was entitled for the Picture as set forth in Paragraph 2.9 above (e.g., [i] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves Start Point #1, the flat sum of $250,000 [ii] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves Start Point #2, an amount equal to 1-1/4% of 100% of Adjusted Defined Receipts, if any, of such Sequel accruing from Start Point #2 and [iii] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves CP Start Point, an amount equal to 2-1/2% of the Adjusted Defined Receipts, if any, of such Sequel, on a prospective basis); provided, however, that if WDP, in its sole discretion, produces a feature-length Theatrical Motion Picture Sequel that is based upon a character (whether or not the name of such character in such Theatrical Motion Picture Sequel is the same as the name of such character in the Property) or plot line(s) from the Property which appears in the Picture, Owner shall be entitled to one-half (1/2) of the Purchase Price actually paid to Owner pursuant to Paragraph 2.6 above and one-half (1/2) of the Production Bonus actually paid to Owner pursuant to Paragraph 2.7 above plus, as a contingent payment, a percentage of the contingent payments (if any) of such feature-length Theatrical Motion Picture Sequel, which contingent payment shall be equal to one-half (1/2) of the contingent payments to which Owner was entitled for the Picture as set forth in Paragraph 2.9 above (e. [i] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves Start Point #1, the flat sum of $125,000 [ii] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves Start Point #2, an amount equal to 0.625% of 100% of Adjusted Defined Receipts, if any, of such Sequel accruing from Start Point #2 and [iii] at such time, if ever, that such feature-length Theatrical Motion Picture Sequel achieves CP Start Point, an amount equal to 1-1/4% of the Adjusted Defined Receipts, if any, of such Sequel, on a prospective basis).

b. Theatrical Remake. One-third (1/3) of the Purchase Price actually paid to Owner pursuant to Paragraph 2.6 above and one-third (1/3) of the Production Bonus actually paid to Owner pursuant to Paragraph 2.7. above plus, as a contingent payment, contingent payments of such feature-length Theatrical Motion Picture Remake, which payments shall be equal to one-third (1/3) of the contingent payments to which Owner was entitled for the Picture as set forth in Paragraph 2.9 above (e.g„ [i] at such time, if ever, that such feature-length Theatrical Motion Picture Remake achieves Start Point #1, the flat sum of $83,333 [ii] at such time, if ever, that such feature-length Theatrical Motion Picture Remake achieves Start Point #2, an amount equal to 0.42% of 100% of Adjusted Defined Receipts, if any, of such Remake and [iii] at such time, if ever, that such feature-length Theatrical Motion Picture Remake achieves CP Start Point, an amount equal to 0.83% of the Adjusted Defined Receipts, if any, of such Remake, on a prospective basis).

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c. Television Series.

(i) If either: (A) 25,000 or more units of the Property are sold as a graphic novel (provided that Owner submits documentation substantiating such amount in form and substance acceptable to WDP in its sole discretion) prior to commencement of principal photography of the Picture or (B) the Property is listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to the commencement of principal photography of the Picture, and the Picture is produced and released as a feature-length Theatrical Motion Picture, then the following royalties are payable for each episode of a television series based upon the Picture, as produced for a particular broadcast season:

Primetime Network (i.e., ABC, CBS or NBC)
Running Time	Payment
30 minutes (or less)	$	2,000
60 minutes (or less, but in excess	$	2,500
of 30 minutes)
90 minutes (or more)	$	3,000
Non- Primetime Network or Non-Network
Running Time	Payment
30 minutes (or less)	$	1,000
60 minutes (or less, but in excess	$	1,250
of 30 minutes)
90 minutes (or more)	$	1,500

(ii) If: (A) 25,000 units of the Property are not sold as a graphic novel prior to commencement of principal photography of the Picture or (B) the Property is not listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to the commencement of principal photography of the Picture, and the Picture is produced and released as a feature-length Theatrical Motion Picture, then in lieu of the television series royalties set forth in Paragraph 3.1.c (i) above, the following royalties are payable for each episode of a television series based upon the Picture, as produced for a particular broadcast season:

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Primetime Network (i.e., ABC, CBS or NBC)
Running Time	Payment
30 minutes (or less)	$500
60 minutes (or less, but in excess	$1,000
of 30 minutes)
90 minutes (or more)	$1,500
Non- Primetime Network or Non-Network
Running Time	Payment
30 minutes (or less)	$250
60 minutes (or less, but in excess	$500
of 30 minutes)
90 minutes (or more)	$750

d. Movies(s)-of-the-Week or Mini Series. An aggregate sum of $25,000 for the first two (2) hours, $10,000 for each additional hour thereafter (prorated for portions thereof), not to exceed a maximum of $100,000, regardless of running time.

e. Reruns and Royalties. Twenty percent (20%) of the applicable royalty set forth in Paragraphs 3.1.c. and 3.1.d. above shall be payable for each of the first five (5) network reruns in the combined territory of the United States and Canada. No further rerun payments shall be made thereafter unless required by the MBA (as defined below), and if so required, at the minimum rate specified therein.

f. Generic Spin-Off Series. If WDP, in its sole discretion, produces a so-called "generic" spin-off series based upon a television series based upon the Picture, and if Owner receives sole "Based Upon Characters Created by" credit with respect to the television series, then Owner shall be entitled to receive an amount equal to fifty percent (50%) of the applicable amount set forth in Paragraph 3.1.c., above, for each so-called "generic" spin-off series. A "generic" spin-off series is a series in which a central character in a continuing role was created by Owner and appeared in the Picture and the original series based thereon. No royalties will be payable to Owner for any so-called "planted" spinoff series. A "planted" spin-off series is a spin-off from the original television series in which no central character in the Picture or the original television series appears in a continuing role in the spin-off series.

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g. Payment of Royalties. Unless specified otherwise, theatrical payments due under this Paragraph 3.1 shall be payable upon commencement of principal photography and television payments shall be payable upon the initial United States broadcast. Except as expressly set forth herein, WDP shall not be obligated to make any so-called residual, re-run, foreign use or theatrical use payments to Owner with respect to any motion pictures produced by WDP based on the Property.

h. Inclusive of MBA Minimums. To the extent, if at all, this Agreement is subject to the Writers Guild of America Theatrical and Television Basic Agreement (the "MBA"), the royalty and rerun payments set forth in this Paragraph 3. are inclusive of any minimum royalties and rerun fees payable under the MBA for the corresponding use. Any additional payment required by the MBA under this or any other paragraph of this Agreement shall be payable at the minimum rat e required under the MBA.

i. Payments in Lieu of Any Other Royalties. The payments set forth in Paragraph 3.1 are in lieu of any other sequel, remake, or separation of rights payments, including, without limitation, any such payments, if any, that Owner would be entitled to receive pursuant to any applicable collective bargaining agreement.

3.2 Merchandising. If the Picture is produced and released as a featurelength Theatrical Motion Picture, and provided Owner is not in breach or default of a material term or  condition hereunder, Owner shall be entitled to the following merchandising royalty:

a. If either: (A) 25,000 or more units of the Property are sold as a graphic novel (provided that Owner submits documentation substantiating such amount in form and substance acceptable to WDP in its sole discretion) prior to commencement of principal photography of the Picture or (B) the Property is listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to commencement of principal photography of the Picture:

i. At such time, if ever, that the domestic i.e., United States and Canada) theatrical box office gross revenues as reported in Daily Variety (the "Domestic Box Office Revenue") of  the Picture equals or exceeds one and three-quarter times (1 -3/4x) the "Negative Cost" (as defined in Paragraph 3.2.d.i. below) of the Picture (the "Merchandise Royalty Start Point"), Owner shall be entitled to an amount equal to six and one-half percent (6-1/2%) of 100% of "Net Merchandising Income" (as defined in Paragraph 3.2.d.ii. below), if any, retroactive to first dollar of Net Merchandising Income, if any. (By way of example only, if the Negative Cost of the Picture equals $40,000,000, then Owner would be entitled to receive an amount equal to six and one-half percent (6-1/2%) of 100% of Net Merchandising Income, if any, retroactive to first dollar of Net Merchandising Income, if any, when and if the Picture achieves Domestic Box Office Revenue of at least $70,000,000).

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ii. At such time, if ever, that the Domestic Box Office Revenue of the Picture equals or exceeds two times (2x) the Negative Cost of the Picture, Owner shall be entitled to an amount equal to seven and one-half percent (7-1/2%) of 100% of Net Merchandising Income, if any, retroactive to first dollar of Net Merchandising Income, if any.

iii. At such time, if ever, that the Domestic Box Office Revenue of the Picture equals or exceeds two and one-half times (2-1/2x) the Negative Cost of the Picture, Owner shall be entitled to an amount equal to eight and three-quarters percent (8-3/4%) of 100% of Net Merchandising Income, if any, retroactive to first dollar of Net Merchandising Income, if any.

iv. Until such time, if ever, that the Merchandise Royalty Start Point is achieved, the Defined Receipts, if any, of the Picture shall include merchandising royalties, as defined in Paragraph 2 of Schedule B to Exhibit CB ("the CB Merchandising Royalties").

v. Disgorgement. If and when the Merchandise Royalty Start Point is achieved, an amount equal to the CB Merchandising Royalties shall be removed and disgorged from the Defined Receipts of the Picture. The CB Merchandising Royalties and components thereof, including without limitation, revenues, royalties and associated costs utilized in the calculation of CB Merchandising Royalties which are removed and disgorged from Defined Receipts pursuant to the preceding sentence shall be included in the calculation of Net Merchandising Income. An amount equal to any sums payable to Owner as a result of including CB Merchandising Royalties in Defined Receipts shall be fully credited and deducted from Owner's share of Net Merchandising Income, as applicable.

b. If: (A) 25,000 units of the Property are not sold as a graphic novel prior to commencement of principal photography of the Picture or (B) the Property is not listed among the top 200 titles on ICv2's Top 300 Comics Actual Index (www.lcv2.com) during any month prior to commencement of principal photography of the Picture, then, in lieu of the merchandising royalty set forth in Paragraph 3.2.a. above, at such time, if ever, that the Picture achieves Start Point #1, Owner shall be entitled to an amount equal to five percent (5%) of 100% of "Net Merchandising Income" (as defined in Paragraph 3.2.d. below), if any, retroactive to first dollar of Net Merchandising Income, if any.

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(i) Until such time, if ever, that Start Point #1 is achieved, the Defined Receipts, if any, of the Picture shall include CB Merchandising Royalties.

(ii) Disgorgement. If and when the Picture achieves Start Point #1, an amount equal to the CB Merchandising Royalties shall be removed and disgorged from those Defined Receipts included in the calculation of Start Point #1, to the extent that the removal and disgorgement of such Defined Receipts does not prevent the Picture from achieving Start Point #1. The CB Merchandising Royalties and components thereof, including without limitation, revenues, royalties and associated costs utilized in the calculation of CB Merchandising Royalties which are removed and disgorged from Defined Receipts pursuant to the preceding sentence shall be included in the calculation of the Net Merchandising Income. Start Point #1 shall be recalculated in accordance with the prior sentence for each applicable accounting period until an amount equal to the total CB Merchandising Royalties that are removed and disgorged from Defined Receipts are fully utilized and included in the calculation of the Net Merchandising Income, as applicable. An amount equal to any sums payable to Owner as a result of including CB Merchandising Royalties in Defined Receipts shall be fully credited and deducted from Owner's share of Net Merchandising Income, as applicable.

c. Owner's share of Net Merchandising Income set forth in this Paragraph 3.2 shall be inclusive of any amounts payable to Owner in connection therewith pursuant to any applicable guild agreement (which shall be deemed paid at the minimum applicable payment required).

d. Definitions. The following definitions shall apply to this Paragraph 3.2:

(i) "Negative Cost" as referenced herein shall be defined as an amount equal to the sum of the following: (a) the Cost of Production of the Picture as set forth in Paragraph 1.5 of Schedule 1. of WDP's Exhibit "CB" attached hereto and incorporated herein; provided, however, that solely for the purpose of calculating Negative Cost hereunder, the third to last sentence of Paragraph 1.5 of Schedule 1. of WDP's Exhibit "CB" shall be deleted; (b) fifteen percent (15%) of the Cost of Production as set forth in Paragraph D. of WDP's Exhibit "CB" (the "15% Charge"); and (c) the funding charge set forth in Paragraph C. of WDP's Exhibit "CB" (the "Funding Charge"); provided, however, with respect to any reference herein to a multiple of the Negative Cost of the Picture, the applicable multiplier shall be applied only to the Cost of Production and not to the 15% Charge or the Funding Charge which shall be included only once. By way of example only, and without limiting the foregoing, "two (2) times the Negative Cost" shall be calculated as an amount equal to the sum of the following: a) two (2) times the Cost of Production; b) an amount equal to the 15% Charge; and c) an amount equal to the Funding Charge.

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(ii) With respect to items of merchandising (including interactive games and other products and services) based on the Picture, "Net Merchandising Income" as used herein shall mean as follows:

(a) For items sold by a licensee of WDP or licensee of an affiliate of WDP ("WDP Affiliate"), the royalties WDP (or WDP Affiliate, if applicable) receives from such licensee that are remaining after WDP first deducts a percentage deduction of thirty percent (30%) on all such royalties and thereafter deducts any outof-pocket costs and royalties to third parties (including any royalty granted to Owner in connection with the Picture other than as the rights holder as set forth in this Agreement); or

(b) For items sold by WDP or WDP Affiliate at the wholesale or retail level, at WDP's discretion, an amount equal to either: (A) seven percent (7%) of the wholesale price of such items sold by WDP at the wholesale level (less a reasonable allowance for returns); or (B) seven percent (7%) of fifty percent (50%) of the gross retail revenues of such items sold by WDP at the retail level (less a reasonable allowance for returns) after WDP first deducts a percentage deduction of thirty percent (30%) inclusive of subdistributor fees and thereafter deducts any out-ofpocket costs and royalties to third parties (including any royalty granted to Owner in any capacity in connection with the Picture other than as the rights holder as set forth herein).

(c) In no event shall any items of merchandise be treated as falling under both provisions (i) and (ii) above. Posters furnished to exhibitors for display or promotion, advertisements, jackets of video discs and cassettes and phonorecords, printed programs and promotional novelizations of the story of the Picture and other publications relating to the Picture, soundtrack recordings from the Picture, and distribution of promotional material and exhibition of any "trailer" or Featurette (as defined in Paragraph 16 below) for the Picture, shall not be considered "merchandise."

e. Owner shall have the right to consult with WDP with respect to merchandise in connection with the Picture; provided that in the event of disagreement WDP's decision shall be final and binding. Owner hereby acknowledges that other parties may have similar consultation rights with WDP in connection with the Picture. Owner's right of consultation shall be personal to Owner and may not be assigned or delegated to any third party

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3.3 Live Stage Production Royalty.

a. "Broadway" Production. If WDP exercises the Stage Rights (as defined in Paragraph 5.1.f. below) hereunder and WDP produces a "first-class" (as such term is customarily defined in the legitimate stage industry) live stage production based on the Property, and such stage production is performed in New York on "Broadway" (a "Broadway Production"), then, provided Owner is not in breach or default hereunder, Owner shall be entitled to receive the following, as applicable:

(1) the sum of $10,000 upon the date (the "Opening Date") of the first paid public performance of such Broadway Production in New York on "Broadway" (if ever);

(2) the additional sum of $10,000 at such time, if ever, that such Broadway Production has been continuously performed in New York on "Broadway" for a period of one (1) year from the Opening Date; and

(3) the additional sum of $10,000 at such time, if ever, that such Broadway Production has been continuously performed in New York on "Broadway" for a period of two (2) years from the Opening Date.

b. "Off-Broadway" Production. If WDP exercises the Staqe Rights hereunder and WDP produces a "first-class" (as such term is customarily defined in the legitimate stage industry) live stage production based on the Property, and such stage production is performed in New York "Off-Broadway" (i.e., any theatre in the city of New York, seating no less than ninety-nine [99] persons and no more than four hundred and ninety-nine [499] persons) (an "Off-Broadway Production"), then, provided Owner is not in breach or default hereunder, Owner shall be entitled to receive the following, as applicable:

(1) the sum of $5,000 at such time, if ever, that such Off-Broadway Production has been continuously performed in New York "Off-Broadway" for a period of one (1) year from the date (the "Off-Broadway Opening Date") of the first paid public performance of such Off-Broadway Production in New York "Off-Broadway"; and

(2) the additional sum of $5,000 at such time, if ever, that such Off-Broadway Production has been continuously performed in New York "Off-Broadway" for a period of two (2) years from the OffBroadway Opening Date.

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d. Except as set forth in Paragraphs 3.3.a and 3.3.b. above, Owner shall not be entitled to any compensation in connection with WDP's exercise of the Stage Rights set forth in Paragraph 5.1.f. above.

4. CREDIT

Provided that Owner is not in breach or default of a material term or condition under this Agreement and the Property is listed on the Diamond Comic Distributors, Inc. U.S. preview catalog prior to the commencement of principal photography of the Picture, then subject to WDP's standard exclusions and exceptions (including artwork title exceptions) and subject to any guild or union restrictions, Owner shall be accorded credit on any feature-length Theatrical Motion Picture produced and released hereunder which is substantially based upon the Property, as follows:

4.1 Source Credit.

a. On-Screen: On a separate card (which card may be shared in WDP's sole discretion with other source material on which the Picture is based) in the main titles, if any (otherwise in the end titles), below or after the title, in substantially the form of "Based on the Platinum Studios graphic novel created by Scott Mitchell Rosenberg," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on the Platinum Studios graphic novel `Unique' created by Scott Mitchell Rosenberg," in an average size of type not less than the larger of (i) fifty percent (50%) of the average size of type of the title of the Picture on screen or (ii) one hundred percent (100%) of the average size of type utilized to accord the screenwriter credit on screen.

b. Paid Ads: In paid ads issued or controlled by WDP, in the billing block portion only, if any (i.e., if such otherwise applicable paid ad does not have a billing block, Owner shall not be entitled to receive credit in such paid ad), below or after the regular (i.e., not artwork) title of the Picture, in substantially the form "Based on the graphic novel by Scott Mitchell Rosenberg," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on 'Unique' by Scott Mitchell Rosenberg," in an average size of type not less than the larger of (i) thirty-five percent (35%) of the average size of the regular (i.e., not artwork) title of the Picture in such billing block or (ii) one hundred percent (100%) of the average size of type utilized to accord the screenwriter credit in such billing block.

c. Excluded Ads: In the billing block portion only, if any, of any so-called excluded ads issued or controlled by WDP in which the screenwriter is accorded credit in such billing block (i.e., if such otherwise applicable excluded ad does not have a billing block, then Owner shall not be entitled to receive credit in such excluded ad), below or after the regular (i.e., not artwork) title of the Picture in such billing block, in substantially the form "Based on the graphic novel by Scott Mitchell Rosenberg," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on `Unique' by Scott Mitchell Rosenberg," in an average size of type not less than the larger of: (i) thirty-five percent (35%) of the average size of type of the regular (i.e., not artwork) title of the Picture in such billing block; or (ii) one hundred percent (100%) of the average size of type utilized to accord the screenwriter credit in such billing block. Notwithstanding the foregoing, Artist shall not be entitled to receive credit in congratulatory, nomination and/or award ads, special ads, ads specially exempted by Paragraphs 8-203d., 8-203f. and 8203g. of the DGA Basic Agreement, ads announcing a personal appearance, radio ads and the audio portion of teasers, trailers and television ads.

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4.2 WDP shall accord on screen credit in the end titles of the Picture to the author and the illustrator of the Property in substantially the form "Graphic novel written by Dean Motter and illustrated by Stefano Cardoselli," or if the title of the Picture is materially different from that of the Property, then said credit shall be substantially in the form of "Based on `Unique' written by Dean Motter and illustrated by Stefano Cardoselli."

4.3 As used herein, "size" means height, width and thickness. All other characteristics of Owner's credit under this Agreement shall be at WDP's sole discretion. WDP's inadvertent failure to accord credit in accordance with the provisions of this Paragraph 4. shall not be deemed a breach of this Agreement. Within a reasonable time after receipt of written notice from Owner specifying a material failure to accord Owner credit in accordance with this Agreement, WDP shall use reasonable efforts to cure prospectively any such material failure to accord Owner credit hereunder with regard to positive prints and/or advertising materials, the masters for which are created after the date of WDP's receipt of such notice. WDP shall use reasonable efforts to inform all third party subdistributors of the credit obligations contained herein; provided, however, that the failure of said subdistributors to comply with the abovecredit requirements shall not constitute a breach of this Agreement.

5. RIGHTS GRANTED

5.1 Owner hereby specifically and irrevocably grants to WDP, solely, exclusively, throughout the universe and in perpetuity, all right, title and interest of every kind and nature in and to the Property (subject only to the reserved rights enumerated in Paragraph 6. below), including without limitation the following:

a. The right to develop, produce and exploit Motion Pictures (including without limitation, Theatrical Motion Pictures and Television Motion Pictures and Sequels and Remakes thereof) based upon or adapted from all or any part of the Property throughout the universe, in perpetuity and in all languages and all elements therein for all now known or hereafter existing uses, media, and forms, including, without limitation, all copyrights (and renewals and extensions thereof), motion picture, television, digital television, videocassette and video or laser disc, any computer-assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other devices or methods now existing or hereafter devised) and allied rights therein.

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b. The right to produce Sound Records in any format or medium now known or hereafter devised of all or any part of the Property and any and all Motion Pictures (including, without limitation, Theatrical Motion Pictures and Television Motion Pictures and Sequels and Remakes thereof) produced hereunder, specifically including the exclusive motion picture synchronization rights in the Property and each and every part thereof, and the exclusive right to use all or any part of the Property upon the parts of instruments serving to reproduce the same mechanically.

c. The right to adapt, use, dramatize, arrange, change, vary, modify, alter, transpose and make musical or nonmusical versions of the Property and any parts thereof including, without limitation, the characters; to add to, interpolate in and subtract-or omit from the Property, plot, subplots, themes, situations, action, titles, language, speech, songs, music, lyrics, dancing, choreography, sound, sound effects, scenes, dialogue, incidents, characters and characterizations thereof; to translate any of the foregoing into all languages; to include in Motion Pictures and other items provided for in this Paragraph 5. such plot, subplots, themes, situations, action, titles, language, speech, songs, music, lyrics, dancing, choreography, sound, sound effects, scenes, dialogue, incidents and characters, characterizations and other material (whether or not based upon, or taken from, the Property) as WDP, in its sole and uncontrolled discretion, may deem advisable, it being the intention hereof that WDP shall have the exclusive, absolute and unlimited right to use the Property, and each and every part thereof, for motion picture purposes (and all other purposes granted hereunder) in any manner it may, in its uncontrolled discretion, deem advisable with the same force and effect as though WDP were the sole author of the Property, all without in any way being accountable or liable to Owner for any use that WDP may make thereof, excepting only the compensation and screen credit obligations (if any) to Owner contained herein. Owner hereby waives the benefits of any provision of law known as "droit moral," or any similar laws, and agrees not to institute, support, maintain or authorize any action or lawsuit on the ground that any Motion Pictures or Sound Records, or other items produced hereunder in any way constitute an infringement of any of Owner's "droit moral" or a defamation or mutilation of any part thereof, or contain unauthorized variations, alterations, modifications, changes or translations. Owner shall not have any right, title or interest whatsoever in or to any plot, subplot, story, character, music, lyrics, dialogue, screenplay or other material of any kind created by or for WDP in the exercise of WDP's rights hereunder, or in any Motion Pictures produced hereunder or any material created by WDP in connection therewith.

d. The right to telecast directly from the performance to the audience on live television any adaptation of the Property.

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e. The right to broadcast and exploit the Property or any part thereof including, without limitation, the characters, and the right to broadcast and exploit all or any part of any Motion Picture (including, without limitation, Theatrical Motion Pictures and Television Motion Pictures and Sequels and Remakes thereof) or Sound Record produced hereunder, by radio and television, digital television, videocassette, video or laser disc and computer games, any computer assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other devices or methods now existing or hereinafter devised), or otherwise, whether by electrical transcription, film, tape, or otherwise, in any language or medium.

f. The right to perform the Property or adaptations thereof on the spoken stage with actors appearing in person in the immediate presence of the audience ("Stage Rights"), including, without limitation, the sole and exclusive right, in perpetuity, throughout the universe, to exercise all theme park rights with respect to the Picture and/or the Property, including without limitation the right to use the Picture, the title of the Picture, characters therefrom and elements thereof (including, without limitation, characters, scenes, music, costumes and sets and/or footage from the Picture) in WDP's (its parent and the subsidiaries, licensees and affiliates thereof, collectively "Disney" for purposes of this Paragraph 5.1) existing and future theme parks, resorts, attractions, so-called location-based and/or regional entertainment centers, cruise ships and any of the foregoing licensed or operated by Disney (collectively, "Theme Parks"), and in any Disney-themed variety show (e g„ Disney's World-On-Ice, any Disney Circus) or other arena type show, in any manner and for any use, whether now known or hereafter invented or devised, including, but not limited to, in connection with live shows in Theme Parks, theatrical stage performances in Theme Parks, so-called "walk-around" performances or characters and/or as the basis in whole or in part for any ride or attraction in any Theme Park, and to make sponsorship deals in connection with any of the foregoing, with no obligation whatsoever, financial or otherwise, to Owner.

g. The right to produce and publish a novelization of the Picture; for purposes of advertising and promotion of the Picture and not for sale, the right to produce and publish (with or without illustrations by photographs, drawings or cartoons) stories, synopses, excerpts, summaries, resumes and/or fictionalizations based upon or adapted from the Property or any part or element thereof including, without limitation, the characters, and to publish "making of books concerning the Picture. WDP shall not publish other publications including comic books or graphic novels based upon the Picture without first obtaining Owner's permission.

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h. The right to write and prepare screenplays, teleplays, treatments, storyboards and all other plans, specifications and designs for Motion Pictures and any Sound Records produced hereunder, and to cause musical compositions, including both words and music, utilizing or based upon or adapted from all or any part of the Property or any title or titles thereof to be written and composed, and to include such musical compositions in Motion Pictures and Sound Records produced hereunder.

L The right to manufacture, sell, furnish, supply and distribute products, by-products, services, facilities, merchandise and commodities of every nature and description now known or hereafter devised, including, but not limited to, still photography, drawings, posters, artwork, toys, games, items of wearing apparel, foods, beverages and similar items, which make reference to or are based upon or adapted from the Property or any part thereof or any Motion Picture produced hereunder and the right to make trade deals and commercial tie-ups of all kinds involving the Property, or any part thereof, including, but not limited to, the characters.

j. The right to copyright Motion Pictures (including, without limitation, Theatrical Motion Pictures and Television Motion Pictures and Sequels and Remakes thereof) and any versions thereof, Sound Records, musical compositions, screenplays, teleplays, characters and all other items provided for in this Paragraph 5. and secure copyright and/or trademark registration and protection thereof in all countries and territories where such protection is available, in WDP's own name or otherwise, together with the right to manufacture copies thereof, and to distribute, sell, vend, lease, license, exhibit, transmit, broadcast, project, reproduce, publish, use, perform, advertise, publicize, market, exploit, turn to account and derive revenue in any form or manner therefrom, without any territorial restriction whatsoever, by any and all media, methods, systems and processes now or hereafter known, invented, used or contemplated, specifically including television, digital television, video and computer games, video or laser discs, videocassettes and any computer-assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other devices or methods now existing or hereafter devised), and the right to import or export such copies into or out of any territory without restriction. It is further expressly understood and agreed that Motion Pictures and all other items that may be produced hereunder shall constitute independent derivative works, and WDP and its successors, assigns and licensees shall have the perpetual right to exercise the rights granted in this Paragraph 5.1.j. irrespective of the expiration, termination, transfer or renewal of any copyright owned or controlled by Owner, or any heirs, executors, widow, widower, children, successors or assigns of Owner. WDP shall in no event have any less rights by reason of this Agreement than any member of the public may now or hereafter have.

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k. Insofar as Owner is concerned, the right to use a translation in any language of the title or titles by which the Property or any part thereof are now known or may hereafter be known as the title or titles of the Motion Picture (whether or not based upon or adapted from the Property) produced hereunder, and the right to exploit, distribute and exhibit any Motion Picture produced hereunder under any other title or titles that WDP may deem proper in its uncontrolled discretion.

1. The right to use any of the rights set forth in this Paragraph 5. in connection with the promotion, publicizing and advertising of any Motion Picture or other production relating to the Property or the exploitation thereof and in connection with any commercial tie-up, or the manufacture, advertising, distribution and/or sale of any products, commodities or services in connection therewith.

M. The right to utilize the rights granted hereunder in connection with any so-called "Author-Written Sequel(s)" (i.e., a literary property [graphic novel, comic book, story, novel, drama or otherwise], whether written before or after the Property and whether written by Owner or by a successor-in-interest of Owner using one or more of the characters appearing in the Property, and whose plot is substantially different from that of the Property).

n. All rights, including all exclusive exploitation rights, of every kind and nature (including any and all copyrights and neighboring rights, to the extent such assignment is allowed by law) in and to the Property to WDP. All rights to such Property are owned by WDP solely and exclusively, for the duration of the rights in each country and area and space, in all languages, and throughout the universe. Owner and WDP are aware and hereby acknowledge that new rights to the Property may come into being and/or be recognized in the future, under the law and/or in equity (hereafter the "New Exploitation Rights"), and Owner intends to and does hereby grant and convey to WDP any and all such New Exploitation Rights to the Property granted by Owner hereunder. Owner and WDP are also aware and do hereby acknowledge that new (or changed) (1) technology, (2) uses, (3) media, (4) formats, (5) modes of transmission and (6) methods of distribution, dissemination, exhibition or performance (hereafter the "New Exploitation Methods") are being and will inevitably continue to be developed in the future, which would offer new opportunities for exploiting the Property. Owner intends and does hereby grant and convey to WDP any and all rights to such New Exploitation Methods with respect to the Property. Owner hereby agrees to execute any document WDP deems in its interest to confirm the existence of the preceding and to effectuate its purpose to convey such rights to WDP, including without limitation the New Exploitation Rights and any and all rights to the New Exploitation Methods. Owner further hereby agrees that Owner will not seek (1) to challenge, through the courts, administrative governmental bodies, private organizations, or in any other manner the rights of WDP to exploit the Property by any means whatsoever or (2) to thwart, hinder or subvert the intent of the grants and conveyances to WDP herein and/or the collection by WDP of any proceeds relating to the rights conveyed hereunder.

o. All other rights of every kind and character whatsoever now known or unknown in and to the Property, subject only to the rights specifically reserved to Owner in Paragraph 6. below.

5.2 WDP shall have all rights herein granted to it in all existing and future versions, translations, dramatizations, arrangements, revisions, supplements and reissues of the Property written or published by or with the authority of Owner and Owner's successors, assigns and licensees, as well as all prior drafts, notes, research, source material and other works owned or controlled by Owner upon which the Property is based and from which the Property is adapted. All rights granted WDP under this Agreement shall be cumulative, and WDP may exercise or refrain from exercising any one or more of said rights separately from, simultaneously, together or in connection with any other rights granted to WDP hereby or obtained by WDP from other sources, and regardless of whether said rights are granted in the disjunctive or conjunctive.

6. RESERVED RIGHTS

Only the following rights (the "Reserved Rights") to the Property are reserved to Owner for Owner's use and disposition, subject, however, to the provisions of this Agreement:

6.1 Publication Rights. Owner shall have the right to publish, distribute and promote (provided such promotion shall be consistent with the Reserved Rights set forth in this Paragraph 6 [e.g_, any such promotion shall be static, unless otherwise approved in advance in a writing signed by WDP in its sole good faith discretion]) printed versions of the Property on a worldwide basis in comic book form i.e., comic books, comic strips and graphic novels), including translations and reissues, whether hardcover or softcover, in magazines or other periodicals, whether in installments or otherwise, in any means now known or hereafter devised for the presentation of text or comic art by various delivery systems (e.g., electronic retrieval and internet transmissions [provided comic art is static unless otherwise approved in advance in a writing signed by WDP in its sole good faith discretion; provided, and by way of example only, WDP hereby acknowledges that the minimal motion depicted in Owner's 2003 holiday card submitted to WDP (http://www.platinumstudios.com/holiday card 2003.php), a screen grab of which is attached hereto and incorporated herein by this reference as Exhibit "A," would be approved to the extent the characters depicted do not have audible voices; provided further, that WDP acknowledges that audible narration by an offscreen narrator consisting of 200 words or less would be acceptable]), which may be copyrighted in the name of Owner, all subject to WDP's rights provided for in Paragraph 5. above. Notwithstanding anything to the contrary above, said reserved publication rights do not include picture books, coloring books, novelizations and other publications that do not contain the story line of the Property in written words, all of which are included in the rights granted to WDP. In addition, Owner shall cause the Publisher(s) of the Property to execute and deliver to WDP the Publisher's release in the form attached hereto as Schedule II (Publisher's Release) within thirty (30) days after the date such agreement is fully executed.

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6.2 WDP and Owner hereby acknowledge that Owner owns world wide comic book and graphic novel publication rights to the Property.

6.3 Direct Market Merchandising. The non-exclusive right to continue to manufacture, sell and/or distribute merchandise ("Pre-Existing Merchandise") based on the Property (other than the "Film Elements" [as defined in Paragraph 6.4 below], which rights are granted exclusively to WDP) solely in the so-called "Direct Market" (as defined below) pursuant to binding agreements entered into prior to the date which is eight (8) weeks prior to the commencement of principal photography of the Picture ("Pre-Existing Merchandise Date"). A complete list of all current agreements of Owner in connection with Pre-Existing Merchandise ("Pre-Existing Merchandise Agreements") in existence as of the date of execution of the Agreement is attached hereto as Schedule V. Commencing on the date of this Agreement, Owner shall only enter into merchandising agreements with respect to the Property which possess an initial term ending one (1) year from the first shipping date (which shipping date shall be no more than six [6] months from commencement of such merchandising agreement) and optional or renewal terms of six (6) months or less. Owner acknowledges that after the Pre-Existing Merchandise Date, Owner shall neither enter into any new merchandising agreement nor renew or allow to be renewed or exercise or allow to be exercised any option to extend the term of any merchandising agreement in connection with the Property. For purposes of this Agreement, "Direct Market" shall mean and refer to the economic market comprised of (i) comic book, science-fiction, fantasy, and/or hobby specialty stores and the distributors thereto; and (ii) such other comic-book specialty stores and comic-book mail-order retailers that purchase some or all of their new-comics inventory on predominantly a nonreturnable basis from (A) publishers directly, (B) comics-specialty distributors such as, but not limited to, Diamond Comic Distributors, Inc., and/or (C) specialty licensees such as, but not limited to, Dynamic Forces, Inc. or American Entertainment. Owner shall be strictly prohibited from using WDP's name or the name of WDP's parent, subsidiaries, subsidiaries of its parent, affiliates, associates, successors and assigns or from making any reference to the Picture or using any Film Elements, in connection with, among other things, the manufacturing, selling, advertising and/or distribution of the Pre-Existing Merchandise without the express prior written approval of a WDP Business Affairs executive. For purposes of clarification, WDP's right to manufacture, sell and/or distribute merchandise based on the Property shall be non-exclusive on or after the date of WDP's exercise of the Option, as more fully set forth in Paragraph 5, above, and shall be exclusive commencing on the Pre-Existing Merchandise Date. In connection with Pre-Existing Merchandise, Owner (a) shall maintain in full force and effect customary insurance for licensees with respect to the manufacture, distribution and sale of (or any other activity[ies] which involve) Pre-Existing Merchandise naming those Owner must indemnify in Paragraph 8, below, as additional insureds; and (b) shall otherwise comply with the terms of this Agreement.

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WDP shall retain the exclusive right to merchandise the Property pursuant to Paragraph 5 above commencing on the Pre-Existing Merchandise Date and continuing for a period until three (3) years following the conclusion of the domestic theatrical release of the Picture (the "Post-Cycle Date"). If at any time following the Post-Cycle Date WDP has ceased merchandising the Property, then Owner may, pursuant to the conditions set forth in the preceding paragraph, resume the right to manufacture, sell and/or distribute Direct Market merchandise based on the Property ("Post-Cycle Merchandise") pursuant to binding agreements entered into after the Post-Cycle Date and prior to the date which is eight (8) weeks prior to the commencement of principal photography of another project (e.g, television series, sequel, remake, direct-to-video) (a "Subsequent Production") based on the Property ("Post-Cycle Merchandising"). Owner shall only enter into Post-Cycle Merchandising agreements with respect to the Property which possess an initial term of one (1) year or less from the first shipping date (which shipping date shall be no more than six [6] months from the commencement of such merchandising agreement) and optional or renewal terms of six (6) months or less. Owner acknowledges that after the date which is eight (8) weeks prior to the commencement of principal photography of a Subsequent Production, Owner shall neither enter into any new Post-Cycle Merchandising agreement nor renew or allowed to be renewed or exercise or allow to be exercised any option to extend the term of any Post-Cycle Merchandising agreement in connection with the Property. There shall be a new Post-Cycle Date for each Subsequent Production which shall be three (3) years following the conclusion of the domestic theatrical release of such Subsequent Production.

6.4 General Restrictions on Reserved Rights.

a. Use of Film Elements by Owner.

(i) Owner shall have no right in the exercise of any of the Reserved Rights to use (or to authorize third parties to use) any "Film Elements" (as defined below) or to promote, publicize, market, advertise or otherwise exploit the Reserved Rights in such a manner as to tie or connect such Reserved Rights with the Picture or any other production produced by WDP hereunder. As used herein, "Film Elements" shall mean WDP's name or the name of WDP's parent, subsidiaries of its parent, affiliates, successors and assigns (and any trademarks, copyrights, service marks, or logos of the foregoing) and any element specifically created, written, authorized or licensed by or on behalf of WDP (or WDP's parent, subsidiaries of its parent, affiliates, successors or assigns), whether in connection with any Theatrical Production or Television Production or exploitation of the Rights or otherwise, including but not limited to, screenplay, teleplay, title (other than the title "Unique"), music, lyrics, themes, costumes, designs, plots, scenes, logos, settings, artwork (including key artwork), characters, advertising and publicity materials or other material.

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(B) Nothing in this Paragraph 6 shall restrict in any manner WDP's right to design, manufacture, license, sell, display or exploit posters furnished exhibitors for display or promotion, advertisements, jackets of video devices and sound records relating to any Theatrical Production or Television Production and distribution of promotional materials and products (including but not limited to the licensing of any "give away" or other items as part of a commercial tie-up arrangement for any Theatrical Production or Television Production) and exhibition of any "trailer" or promotional films relating to any Theatrical Production or Television Production.

(C) It is expressly agreed that Artist's reserved rights under Paragraphs 6.1 and 6.3 above relate only to the Property and not to any screenplay, characters, teleplay, music, lyrics, sequels or other material written by or created by or for or authorized by WDP, even though the same may contain characters or other elements contained in the Property.

7. WARRANTIES

Owner hereby represents, warrants and agrees that:

7.1 Owner is the sole owner of all rights (including the Rights, as defined in Paragraph 5. above) herein granted or intended to be granted and has full power and authority to grant said rights to WDP;

7.2 Owner has full power and authority to agree to restrictions upon the exercise of the rights (if any) reserved to Owner, including those restrictions (if any) as more particularly set forth in Paragraph 6. above;

7.3 None of the rights granted to WDP hereunder has been granted, encumbered, or otherwise disposed of in any manner to any Person, firm or other entity and Owner has not granted any other rights to the Property; no Motion Picture based in whole or in part upon the Property has been produced or authorized by or with the knowledge or consent of Owner; neither the Property nor any version thereof nor any play or dramatic adaptation based thereon in whole or in part has been published or presented or authorized on television, stage or on the spoken stage by or with the knowledge or consent of Owner;

7.4 Owner has not done or omitted to do and will not do or omit to do any act .or thing by license, grant, or otherwise, which will or may impair or encumber any of the rights herein granted or interfere with the full enjoyment of said rights;

7.5 There are no claims or litigation pending or threatened which will or might adversely affect any of the rights herein granted to WDP;

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7.6 The Property is original with Owner; neither the Property nor any part thereof is taken from or based upon any other material except material wholly owned by Owner; and neither the Property nor any part thereof, or the exercise by WDP of the rights herein granted, will violate or infringe upon the trademark, trade name, copyright, patent, and to the best of Owner's knowledge (or that which Owner should know in the exercise of reasonable diligence and prudence) literary, dramatic, musical, artistic, personal, civil or property right or any other right of any Person, or invade the right of privacy or constitute a libel or slander of any Person;

7.7 The Property is not in the public domain, and enjoys, and will enjoy, either statutory or (to the extent that it may exist) common law protection in the United States and all countries adhering to the Berne and Universal Copyright Conventions; and the rights granted to WDP hereunder are and will be exclusive; and

7.8 Attached hereto, marked "Schedule I" and made a part of this Agreement by this reference, is a statement of all publications, if any, prior uses, if any, prior versions, adaptations and translations, if any, and copyright status of the Property. Such statement shall also set forth the existence, if any, of any valid agreement with third parties for the publication or dramatic production of the Property.

8. INDEMNITY

8.1. Owner will defend, indemnify, make good, save and hold harmless WDP, its parent, subsidiaries, subsidiaries of its parent and/or affiliated companies, the officers and directors of the foregoing, and its successors and assigns, from and against any losses, damages, costs, liabilities, charges, reasonable attorneys' fees, recoveries, actions or judgments from a court of competent jurisdiction, penalties, guild fees or awards, expenses and any other losses whatsoever which may be obtained against, imposed upon or suffered by WDP, its parent, subsidiaries, subsidiaries of its parent and/or affiliated companies, the officers and directors of each of the foregoing and its successors and/or assigns, by reason of the breach or alleged breach of any warranty, covenant, agreement or representation herein made by Owner.

8.2. Except with respect to (i) matters constituting a breach by Owner of any of the representations, warranties and/or agreements contained herein, or (ii) gross negligence, willful misconduct, or recklessness by Owner, or (iii) a third party claim relating, referring, or arising out of actions by Owner that are outside the course and scope of Owner's services in connection with the Picture, WDP agrees to indemnify Owner and hold Owner harmless from and against any and all damages and expenses (other than with respect to any settlement entered into without WDP's written consent or claim to which WDP has not been notified) arising out of any third party claim against Owner resulting from WDP's development, production, distribution and/or exploitation of the Picture or any element thereof and shall provide Owner with a defense (with counsel of WDP's choice), provided, Owner cooperates with WDP and follows WDP's reasonable instructions in connection with such claim. Nothing herein shall be deemed a waiver of WDP's right of subrogation, except that WDP shall waive its right of subrogation to the extent such damages and expenses are covered by this indemnity. The foregoing shall not limit WDP's right to include any such damages and expenses in the negative cost of the Picture or as a distribution cost for the Picture.

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9. PRIOR INSTRUMENTS

9.1 Owner hereby grants to WDP all of Owner's right, title, and interest in and to any and all agreements, assignments, releases and other instruments or documents in writing (collectively "Instruments") heretofore or hereafter executed in favor of Owner, or any predecessor of Owner, insofar as said Instruments grant or purport to grant to Owner, or any such predecessor, any of the rights, privileges and property herein granted to WDP, together with the full benefit of all representations, warranties and agreements made by any party in favor of Owner or any such predecessor, insofar as the same pertain to or affect any of the rights, privileges and property herein granted to WDP.

9.2 Owner represents and warrants that: (a) any such Instruments (if any exist) have not been amended, modified or cancelled in any way, and are in full force and effect as originally signed; (b) Owner has not granted or assigned any right, title or interest heretofore acquired by Owner in, to or under said Instruments in a manner inconsistent herewith; and (c) there has been paid to the party or parties entitled thereto all sums which have heretofore become payable under any of said Instruments, and, except as herein specifically provided, Owner will hereafter pay or cause to be paid, to the party or parties entitled thereto, all sums which may hereafter accrue under said Instruments.

10. COPYRIGHTS

10.1 Owner further grants and assigns to WDP an exclusive, irrevocable license, in perpetuity, in and to any and all of Owner's right, title and interest in and to any and all copyrights in and to the Property and each and every part thereof contained therein, together with all benefits of said copyrights and all remedies held thereunder, and all actions and causes of action for infringement or violation of said copyrights, or any other rights in the Property or relating thereto, and all damages, profits, penalties and other recoveries and all other rights of every kind and character which Owner may now or hereafter have directly or indirectly as a result of any such infringement or violation, but only insofar as said copyrights pertain to or affect any of the rights, privileges and property herein granted to WDP.

10.2 Owner agrees: (a) to prevent the Property from becoming injected into the public domain; (b) to cause to be affixed to each copy of the Property or any part thereof published or offered for sale by or with the authority of Owner notice of copyright complying in all respects with the United States Copyright law and with the Universal Copyright Convention; (c) to register the Property wherever necessary for such protection; (d) to contract henceforth for the benefit of WDP for the above but not the obligation, to complete any such copyright assignment, fill in any blanks which may be left therein (including dates, Copyright Office registration information, etc.), execute the same in Owner's name, or obtain execution thereof by others, as the case may be, and record the same in the United States Copyright Office, or elsewhere, as WDP sees fit. WDP shall provide Owner with copies of such documents and five (5) days (reducible in WDP's sole discretion due to exigencies) to execute such documents before WDP executes as Owner's attorney-in-fact.

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11. TRADEMARKS

11.1 Grant: WDP grants to Owner and Owner hereby accepts a non-exclusive, worldwide royalty-free license to use the trademarks (i.e., the words, names, designs, logos, brands, symbols, devices, trade dress or any combinations thereof) presently used or hereafter devised in connection with the Property (collectively, the "Marks") in connection with Owner's Reserved Rights as set forth in Paragraph 6 above (i.e., the right to publish, distribute and promote printed versions of the Property in comic book form [the "Comic Books"] and the right to manufacture, sell and/or distribute merchandise based on the Property solely in the so-called "Direct Market" [the "Direct-Market Merchandise"]). The grant of rights herein shall specifically not include use of the Marks in connection with publications or merchandise other than the Comic Books or Direct Market Merchandise or merchandise associated with the Picture or any other productions or derivative works produced by WDP hereunder or based upon the Film Elements.

11.2 Term: The license granted in this Paragraph 11 shall last in perpetuity, unless sooner terminated by the terms of this Agreement or pursuant to Owner's reversion rights set forth Paragraph 17 below. In the event of a breach of this Paragraph 11 by Owner, all use of the Marks by Owner shall cease immediately upon Owner's receipt of notice from WDP of the breach and termination. Upon termination of the license granted in this Paragraph 11, all rights granted in this Paragraph 11 will revert to WDP.

11.3 Right of Owner to Sublicense: Any of the rights granted under this Paragraph 11 may be sublicensed by Owner during the term of the license. Any such sublicense granted by Owner hereunder shall be terminated upon the termination of this license.

11.4 No Assignment: This license shall be non-assignable. Any attempt by Owner to assign this license shall constitute a material breach.

11.5 Quality Control:

(a) Owner acknowledges that if any of the Comic Books or Direct-Market Merchandise were of inferior quality, the substantial goodwill established in the Marks would be impaired. Accordingly, Owner agrees that the goods comprising the Comic Books and all Direct-Market Merchandise will (i) be of high quality, (ii) comply with all international, federal, state and local laws and (iii) be fit for consumers' anticipated uses.

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(b) Owner shall submit to WDP each Comic Book and/or item of Direct-Market Merchandise to assure compliance with the quality control standards set forth in Paragraph 11.5(a) above. Any approval by WDP shall not be deemed to constitute an opinion by WDP that any item is safe or complies with all applicable laws. Owner shall remain fully and solely responsible for all product safety and for ensuring that all Comic Books and all Direct-Market Merchandise are in compliance with all applicable laws

(c) In the event that the above-stated quality standards are not met or maintained throughout the term of this license, WDP has the right to require that Owner and its affiliates meet the quality standards as set forth in Paragraph 11.5 (a) above within a reasonable period of time.

11.6 Alteration to the Work: Owner may not make material alterations or changes to the quality of the Comic Books and Direct-Market Merchandise or the Marks after approval by WDP as set forth in 11.5(b) above without seeking permission from WDP.

11.7 Intellectual Property Rights: Owner agrees that it will not, during the term of this license or thereafter, attack the title or any rights of WDP, or any related company of WDP, in and to the Marks. Owner agrees to assist WDP and to cooperate fully with WDP to procure any protection or to protect any of the rights of WDP to the Marks.

11.8 Notification of Third Party Infringement: Owner will notify WDP of any infringement, imitation or act inconsistent with WDP's ownership of the Marks of which Owner becomes aware. WDP shall in its sole discretion determine whether or not to take any action with respect to. such infringement or act and Owner agrees to reasonably cooperate and to comply with any requests by WDP for assistance in pursuing such action.

11.9 Ownership: Owner's use of the Marks shall inure to WDP's benefit. Owner acknowledges and agrees that WDP is the exclusive owner of the Marks, and of any trademark incorporating a Mark, as well as any future trademark rights created by other use on or in association with the Comic Books or Direct-Market Merchandise. Without limiting the foregoing, if Owner for any reason is found to have obtained any interest in the Marks (or of any trademark incorporating a Mark, as well as any future trademark rights created by other use on or in association with the Comic Books or Direct-Market Merchandise), Owner shall assign those rights to WDP, together with the goodwill attaching to that part of the business in connection with which such trademarks are used.

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12. USE OF OWNER'S NAME

WDP shall have the right to publish, advertise, announce and use in any manner or medium the name, biography and photographs or other likenesses of Owner in connection with any exercise by WDP of its rights hereunder; provided, however, that with respect to any third party commercial tie-ins in connection with the Picture, Owner shall not be depicted as personally endorsing any product or service; provided further that the use of Owner's name in the billing block in connection with any such third party commercial tie-in shall not constitute a personal endorsement of such product or service by Owner.

13. ASSIGNMENT

WDP may assign, transfer, license, delegate and/or grant all or any part of its rights, privileges and property hereunder to any Person. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. Owner shall not assign, transfer, license, delegate or grant all or any part of Owner's rights hereunder to any other Person or entity.

14. DEFINITIONS

As used herein:

14.1 "Copies" with reference to a Motion Picture or Sound Record, means and includes any negative or positive print, dupe, negative, video or other electronic tape recording, disc or other physical article of any kind produced, reproduced or re-recorded by means of any photographic, electrical, electronic, mechanical, computer-assisted media or other processes or devices now or hereafter known, invented, used or contemplated on which such Motion Picture and/or Sound Record or any part thereof, is printed, imprinted, recorded, reproduced or duplicated, together with any package, cartridge, cassette or other container in which the same may be distributed or sold.

14.2 "Copies" with reference to a screenplay or teleplay, means any typewritten or printed copies thereof in substantially the form used in connection with production of the Motion Picture involved, whether or not accompanied by explanatory notes or comments, still photographs or other illustrations.

14.3 "Copies" with reference to a musical composition or the lyrics thereof, means any copies, arrangements, orchestrations or versions thereof, whether or not in the form used in connection with the Motion Picture involved.

14.4 "Motion Picture" or its equivalent, means and includes a motion picture, cinematograph film and/or photoplay of every kind and character whatsoever, including the Sound Records thereof, as well as trailers and clips thereof, produced by means of any photographic, electrical, electronic, mechanical or other processes or devices now or hereafter known, invented, used or contemplated, by which photographs, pictures, drawings, images or other visual reproductions or representations are or may be printed, imprinted, recorded or otherwise preserved on film, tape or any other material of any description (whether translucent or not) for later projection or exhibition in such manner that the same are or appear to be in motion on a screen, mirror, tube or other medium or device, whether or not accompanied by Sound Records.

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14.5 "Television Motion Picture" means a Motion Picture produced hereunder based upon the Property initially exhibited on television, including without limitation: (a) a pilot, or an episode of a television series (episodic or anthology), it being understood that a "television series" includes the pilot therefor, regardless of length and regardless of whether there is any binding commitment for any ensuing series of episodes from such pilot; (b) a so-called single or movie-of-the-week ("MOW"); or (c) a so-called "Miniseries" consisting of a Television Motion Picture which is a serialization of the plot or story based upon the Property, and is intended for exhibition sequentially in two or more segments.

14.6 "Theatrical Motion Picture" means a Motion Picture produced hereunder based upon the Property which is initially exhibited as a general theatrical release (ea, public or private screenings and/or previews and/or a limited theatrical test run of one [1] week or less shall not constitute a theatrical release for purposes of this Agreement).

14.7 "Person" includes any association, organization, partnership, business trust, corporation or governmental agency, as well as natural persons.

14.8 "Remake" means a Motion Picture utilizing the characters of the Property and depicting the same plot or story as that portrayed in the initial Motion Picture, which plot or story does not continue the original story or carry it forward or backward in time.

14.9 "Sequel" means a Motion Picture utilizing the principal character or characters of the Property, initial Motion Picture or any Sequel or Remake thereof participating in entirely different events than those portrayed in any preceding Motion Picture(s), whether prior to, concurrent with or subsequent to the events portrayed in any preceding Motion Picture(s) and whose plot is substantially new.

14.10 "Sound Records" means and includes sound recordings and reproductions of every kind and character whatsoever produced by means of any electrical, electronic, mechanical or other processes or devices now known or hereafter known, invented, used or contemplated by which sound may be recorded for later transmission or playback, whether or not simultaneously, or in synchronization or times relation, with Motion Pictures.

14.11 "Property" means the aforementioned unpublished graphic novel written by Owner currently entitled "UNIQUE" (formerly entitled "JAUNT") and the underlying literary material upon which it is based, and includes its title or title and subtitles, and all themes, stories, storylines, plots, characters and their names, artistic renderings and all other elements and materials (written, drawn, illustrated or otherwise), sequels, prequels and spin-offs, and all prior, present and future versions, adaptations and translations thereof (whether written by Owner or by others), its music, lyrics, choreography, sets, costumes, orchestrations, arrangements, if any, and wherever throughout the world protectible thereby, its statutory and common law copyright or copyrights, all present or future renewals and extensions of such copyrights and all rights comprehended in such copyrights, and each and every part of all thereof.

Notwithstanding the foregoing, the Property shall not be deemed to include:

(a) unique elements (etc ., plots, characters) existing only in "planted spin-off graphic novels or comic books (i.e., a graphic novel or comic book series in which no central character in the Property appears in a continuing role in the spin-off graphic novel or comic book); provided, however the unique elements of such planted spin-off shall not be included in the Property only if (i) Owner gives notice to WDP in writing of any Property character's appearance in the planted spin-off; and (ii) no Property character appears in more than three (3) issues of such planted spin-off if released as a comic book series (or the equivalent length of three [3] comic books [i.e., approximately 100 standard United States comic book pages] if in strip, graphic novel or other form [e.g„ if any planted spin-off is released as a graphic novel, any Property character shall not appear in more than 100 pages of such graphic novel]);

(b) unique elements (etc.., plots, characters) existing only in so-called "crossover" graphic novels or comic books (i.e., an established graphic novel or comic book series featuring characters not originally part of the Property and in which a central character from the Property makes an appearance);

(c) any "Excluded Character" i.e., any established or preexisting character, which character has previously appeared in an unrelated established comic book/gra.phic novel or other media such that it did not originate in the Property) which visits the Property; provided, however such Excluded Character(s) shall not be included in the Property only if: (i) Owner gives notice to WDP in writing of any Excluded Character(s) appearance in the Property, provided that such notice shall not be required after three (3) years following the conclusion of the domestic theatrical release of the Picture unless and until Owner is aware that WDP is in development in connection with any other production hereunder based on the Property, provided, further that notwithstanding the foregoing, at any time, Owner agrees to provide WDP with a list of all Excluded Characters appearing in any issue(s) of the Property as requested by WDP), (ii) such Excluded Character(s) do not appear in more than three (3) issues of Property if released as a comic book series (or the equivalent length of three (3) comic books [i.e., approximately 100 standard United States comic book pages] if in strip, graphic novel or other form [e.g, if the Property is released as a graphic novel, any Excluded Character shall not appear in more than 100 pages of such graphic novel]) within a period of eighteen (18) months, and (iii) and no more than two (2) different Excluded Characters appear in the Property in any eighteen (18) month period, provided that solely for the purposes of this subparagraph (iii), if an Excluded Character appears in less than five (5) pages of an issue of the Property, such Excluded Character's appearance shall not be counted as one of the two (2) Excluded Characters permitted to appear in the Property in any eighteen (18) month period;

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(d) any "Planted Character(s)" i.e., any character[s] or group of characters Leg,-, such as "X-Men" or alien world] which is created for the express purpose of being spun-off elsewhere in which such property the Planted Character[s] will be the central character[s] in such property); provided, however such Planted Character(s) shall not be included in the Property only if: (i) Owner gives notice to WDP in writing prior to such Planted Character(s) appearance in the Property, provided that such notice shall not be required after three (3) years following the conclusion of the domestic theatrical release of the Picture unless and until Owner is aware that WDP is in development in connection with any other production hereunder based on the Property, provided, further that notwithstanding the foregoing, at any time, Owner agrees to provide WDP with a list of all Planted Characters appearing in any issue(s) of the Property as requested by WDP); (ii) such Planted Character(s) do not appear in more than three (3) issues of Property if released as a comic book series (or the equivalent length of three (3) comic books [i.e., approximately 100 standard United States comic book pages] if in strip, graphic novel or other form [e g_, if the Property is released as a graphic novel, any Planted Character shall not appear in more than 100 pages of such graphic novel]), (iii) no more than two (2) Planted Character(s) appear in the Property in eighteen (18) months, and (iv) the Planted Character(s) appear in the spin-off property no later than six (6) months after the Planted Character(s) first appearance in the Property; or

(e) any characters from any "planted spin-off" or "crossover" graphic novel or comic book series or other non-comic media (e.g, a video game character) solely to the extent such characters are featured in connection with the Property as part of an advertisement for or excerpt from (e.g., a teaser story) such "planted spin-off"or "crossover" graphic novel or comic book series or other non-comic media attached to the Property;

provided Owner shall not grant any motion picture, television, or any other allied or ancillary rights of any kind, known and/or unknown, to any third party with respect to any characters or stories contained in the Property or any other element to which WDP acquires rights. pursuant to this Agreement, such rights having been exclusively granted to WDP hereunder (e.g, any grant of motion picture or other rights to "planted spin-off(s)" or "crossover" graphic novels or comic books must specifically exclude the use of characters and/or stories contained in the Property, or any other element to which WDP acquires rights pursuant to this Agreement). Owner hereby represents and warrants that there are no, nor will there be any, Excluded Characters or Planted Characters in the first installment of the Property which Owner hereby represents has been created a graphic novel (whether initially published as a graphic novel, comic book or comic book series). "Property" does not include the material referred to in Paragraph 5.1.h. above written or prepared by WDP or under WDP's authority.

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15. NO OBLIGATION TO USE

WDP is not obligated to produce, distribute, or exploit the Picture, or, if commenced, to continue the production, distribution, or exploitation of the Picture in any territory. Regardless of whether or not WDP elects to produce, distribute and/or exploit the Picture, WDP is not obligated to use in whole or in part any literary or other material acquired by WDP hereunder.

16. FEATURETTE

WDP contemplates filming and exploiting films, including without limitation, "behind-the-scenes" or "making of productions and/or writing "behind-the-scenes" or "making of books (jointly and severally "Featurette Rights") about the development and production of the Picture produced hereunder. Owner hereby agrees and consents to such filming and exploitation (including without limitation use of any film clip footage [or still] from such Picture and behind-the-scenes photography [or still] and filmed interviews with Owner) and hereby grants to WDP the right to use Owner's name, voice and likeness in connection with such Featurette Rights in any and all media known and unknown for no additional consideration inasmuch as the compensation payable to Owner under this Agreement for the Picture shall be deemed to include compensation for all rights granted pursuant to this Paragraph 16.

17. REVERSION

17.1 If principal photography of the Picture has not commenced within seven (7) years from the date the Option is exercised (if ever) (the "Reversion Date"), then upon written notification to WDP and WDP's failure to commence principal photography (as such term is commonly understood in the motion picture industry) of the Picture within ninety (90) days of WDP's receipt of such notice, the Rights granted to WDP by Owner hereunder shall revert to Owner (excluding the rights to any screenplay(s) or other material written by or on behalf of WDP); provided, however, that WDP may delay the Reversion Date for a three (3) year period if WDP so elects prior to the Reversion Date, and if WDP so elects then Owner shall be entitled to receive the sum of $250,000 for such three (3) year period, which sum shall be an advance against the production bonus and shall accrue and become payable to Owner upon written notification from an authorized Business Affairs executive of WDP to Owner of WDP's decision to delay the Reversion Date; provided, further, that the foregoing periods shall be extended for any period during which a claim with respect to the Property has been asserted and remains unresolved, and for any period during which WDP's development and/or production activities based upon the Property are interrupted or postponed due to any occurrence of an event of force majeure, including without limitation, any labor strike, threatened labor strike, or other labor dispute.

17.2 At such time, if ever, that the Rights revert to Owner pursuant to Paragraph 17.1 above, WDP shall be provided with a first-priority security interest/lien (including, but not limited to, a copyright mortgage and UCC-1 s for the State of  California, State of New York, and New York County) ("Lien") for the applicable costs in connection with the Property and the Picture as set forth in Paragraphs 17.3.a. or17.3.b. below, plus accrued interest thereon from the time an item of cost was paid, incurred or charged, at an annual rate (the "Interest Rate") equal to 125% of the U.S. prime rate as published by the Bank of America, as such rate may vary from time to time. Such costs plus interest shall be paid to WDP no later than the time the Picture is set up for development as a theatrical, direct-to-video, television Motion Picture or other production by a third party. In addition, in the event of a reversion, the Rights shall revert to Owner subject to the assumption by such third party of all of WDP's obligations in connection with the Picture.

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17.3 At such time, if ever, that the Rights revert to Owner pursuant to Paragraph 17.1 above, then with respect to those materials developed or written by or for WDP in connection with the Picture after the date of this Agreement (the "WDP Materials"), WDP (in its sole discretion) shall either:

a. convey to Owner all rights in and to the WDP Materials, in which case, WDP shall be entitled to reimbursement of, and have a Lien against the Property and the WDP Materials for, an amount equal to all amounts paid, and all costs incurred, by WDP in connection with the Picture (the "WDP Costs"), plus accrued interest thereon from the time an item of cost was paid, incurred or charged, at the Interest Rate; or

b. retain all rights in and to the WDP Materials, in which case, Owner shall acquire no rights in or to the WDP Materials, and WDP shall be entitled to reimbursement of, and have a Lien against the Property for, the amounts paid by WDP to Lender pursuant to Paragraphs 2.3 and 2.6 above, plus accrued interest thereon from the time an item of cost was paid, incurred or charged, at the Interest Rate.

17.4 Notwithstanding anything to the contrary set forth in Paragraphs 17.1, 17.2 and 17.3 above, in the event the Rights revert to Owner pursuant to Paragraph 17.1 above, Owner shall not have any right to:(a) use (or to authorize third parties to use) WDP's name or the name of WDP's parent, subsidiaries of its parent, affiliates, successors and assigns (and any trademarks, copyrights, service marks, or logos of the foregoing); or (b) promote, publicize, market, advertise, or otherwise exploit any of the Rights or any of the rights in the WDP Materials (if any) obtained by Owner in such a manner as to tie or connect such rights with WDP or WDP's parent, subsidiaries of its parent, affiliates, successors and assigns.

18. BREACH

No waiver by either party of any breach hereof shall be deemed a waiver of any preceding or succeeding breach hereof. WDP shall not be liable for any breach of this Agreement unless WDP shall have received written notice from Owner of such breach and shall not have cured such breach within ten (10) business days after receipt of such notice. In the event of any claim involving a breach or alleged breach of any of Owner's representations or warranties, or any claim that may impair or interfere with any of the rights granted hereunder: (a) any option period(s) provided for hereunder shall be extended automatically, without cost to WDP, until any such claim or litigation or alleged breach is resolved and the rights granted hereunder can be acquired free and clear of any claims, demands, liens or encumbrances of any kind whatsoever; and (b) if WDP sustains a claim against Owner, WDP may, in addition to all its other legal and equitable remedies, rescind this Agreement, and in such event, Owner shall pay WDP any monies received from WDP in connection with the Property. Owner's representations, warranties and resultant obligation to indemnify WDP in the event of any breach thereof shall survive rescission of this Agreement.

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19. RELATIONSHIP OF PARTIES

Nothing herein contained shall constitute a partnership between or joint venture by the parties hereto, or constitute either party the agent of the other. Neither party shall hold itself out contrary to the terms of this Paragraph 20., and neither party shall become liable for the representation, act or omission of the other contrary to the provisions hereof. This Agreement is not for the benefit of any third party and shall not be deemed to give any right or remedy to any third party, whether referred to herein or not.

20. LEGAL REQUIREMENTS

Nothing contained in this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any material statute, law, ordinance, order or regulation contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event any provisions of this Agreement so affected shall be curtailed and limited only to the extent necessary to bring it within the legal requirements; provided, however, that no other provision of this Agreement shall be affected thereby and such other provisions shall continue in full force and effect.

21. NOTICES

Any notice pertaining hereto shall be in writing. Any such notice and any payment due hereunder shall be served by delivering said notice or payment personally or by sending it by mail, cable (postage or applicable fee prepaid) or by fax or telecopy (in which case a copy shall be sent by overnight mail and shall be deemed to have been received one hour after the commencement of normal business hours in the place of receipt on the next business day following the date of dispatch) as follows (or as subsequently designated in writing):

To Owner:	William Morris Agency
	151 El Camino Drive
	Beverly Hills, CA 90212
	Attn: Alan Gasmer
With a courtesy	Wyman & Isaacs, LLP
	8840 Wilshire Boulevard, 2nd Floor
	Beverly Hills, CA 90211
	Attn: Bob Wyman
To WDP:	WALT DISNEY PICTURES
	500 South Buena Vista Street
	Burbank, CA 91521-0804
	Attn: Senior Vice President Legal Affairs

The date of personal delivery, mailing, or delivery to the cable office of such notice or payment shall be deemed the date of service of such notice or payment, unless otherwise specified herein; provided, however, that any notice which commences the running of any period of time for WDP's exercise of any option or WDP's performance of any other act shall be deemed to be served only when actually received by WDP. If the last day on which the parties hereto are empowered to give notice pursuant to any provision of this Agreement or to perform any other act which the parties are required or may desire to perform under or in connection with this Agreement should fall on a Saturday, Sunday or holiday, then the parties hereto shall have until the end of the first full business day following said Saturday, Sunday or holiday within which to give notice or to perform such act.

22. CONSTRUCTION

For purposes of construction, the Agreement shall be deemed to have been jointly drafted by all parties hereto and any ambiguities shall not be construed against any party.

23. GENERAL

The terms and conditions of this Agreement are those set forth hereinabove, and in the schedules attached hereto as Schedule I (Previous Publication History), Schedule II (Publisher's Release), Schedule III (Short Form Option) and Schedule IV (Short Form Assignment), which by this reference are incorporated into and made a part hereof. This Agreement constitutes the entire agreement between the parties and supersedes all prior and contemporaneous written or oral agreements pertaining thereto and can only be modified by a writing signed on behalf of both parties hereto. No modification, alteration or amendment of this Agreement shall be valid or binding unless in writing and signed by the party to be charged with such modification, alteration or amendment. Owner's sole and exclusive remedy for WDP's breach or termination of this Agreement or any term hereof (including any term pertaining to credit, if any) shall be an action for damages and Owner irrevocably waives any right to seek and/or obtain rescission and/or equitable and/or injunctive relief.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date and year first written above.

Walt Disney Pictures
By:	/s/ Douglas A. Carter
	DOUGLAS A. CARTER
Its:	SR. VICE PRESIDENT
	BUSINESS AFFAIRS

ACCEPTED AND AGREED:

PLATINUM STUDIOS LLC

By: /s/ Scott Rosenberg

Scott Rosenberg

Its: Chairman

Fed ID #:

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SCHEDULEI

PREVIOUS PUBLICATION HISTORY

With respect to the provisions of Paragraph 7.8 of the foregoing agreement, Owner makes the following representations and warranties with respect to the Property:

There has been no prior publication and/or prior use of any kind whatsoever of the Property, and there have been no prior versions, adaptations nor translations of any kind whatsoever of the Property other than the current Pre-Existing Merchandise (as defined in Paragraph 6.3 of the foregoing agreement). There are no prior agreements of any kind whatsoever with any third parties for publication and/or distribution of the Property other than the current Pre-Existing Merchandise Agreements set forth in Schedule V. The Property has not been registered for copyright.

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SCHEDULE II

PUBLISHER'S RELEASE

In consideration of the payment of One Dollar ($1.00) and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby acknowledges and agrees, for the express benefit of WALT DISNEY PICTURES ("WDP") and its representatives, successors and assigns forever, that the undersigned has no claim to or interest in the worldwide motion picture rights (silent, sound, talking), television rights, digital television rights, video and computer games rights, radio broadcasting rights, videocassette or video or laser disc rights, any computer assisted media rights (including, but not limited to CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other methods or devices now existing or hereafter devised), character rights, sequel rights, remake rights, theme park rights, sound record rights, live stage rights, merchandising rights or any other rights, including without limitation any allied, ancillary or subsidiary rights, of any kind other than publication rights heretofore granted to the undersigned, in or to that certain literary work published by the undersigned and described as follows:

Titled: "UNIQUE "

Author:Platinum Studios LLC

Date and Place of Publication:________________,20

Copyright Registration: _______________________

The undersigned hereby consents to the publication and copyright by and/or in the name of said author, author's heirs, representatives, licensees and assigns, in any and all languages, in any and all countries of the world, and in any form of media, of synopses, excerpts and summaries, not exceeding 10,000 words in length each, of the said literary work, and/or any motion picture, television or other versions thereof based principally upon said literary work, for the purpose of advertising, publicizing and/or exploiting any such motion picture, television or other versions, but there shall be no limitation in length with respect to any motion picture, television or other version not based principally upon said work, including but not limited to, sequel motion pictures and television series.

IN WITNESS WHEREOF, the undersigned has executed this instrument this 15^th day of October, 2004.

By:	/s/ Scott Rosenberg
	Scott Rosenberg

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SCHEDULE III

SHORT FORM OPTION

For good and valuable consideration, the receipt and sufficiency of which ishereby acknowledged, PLATINUM STUDIOS LLC ("Owner") hereby grants to WALT DISNEY PICTURES ("Purchaser"), its successors and assigns, the exclusive and irrevocable option ("Option") to acquire all right, title and interest in and to the graphic novel written by Owner entitled "UNIQUE" (formerly entitled "JAUNT") (which together with the title, themes, contents, characters and other versions thereof, is hereinafter called the "Property") including, without limitation, all forms of: motion picture, television, digital television, video and computer games, videocassette, video and laser disc, computer assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other devices or methods now existing or hereafter devised), character, remake, sequel, sound record, theme park, stage play, merchandising and all allied, ancillary and subsidiary rights therein of every kind and nature, now known or hereafter devised, throughout the universe and in perpetuity, in all languages, in and to the Property, as more particularly set forth in and subject to the terms and. conditions of that certain Memorandum of Agreement for Option/Acquisition of Rights dated as of December 11, 2003, between Owner and Purchaser (the "Agreement"). If Purchaser exercises the Option, the rights granted to Purchaser shall include the copyright and all rights in and to the Property of every kind and nature or description, now or hereafter known, recognized, contemplated, developed, invented, devised or at any time coming into existence, including the exclusive, absolute and unlimited right to use the Property and each and every part thereof, for any purpose in any manner, as more particularly set forth and subject to the terms and conditions of the Agreement.

	PLATINUM STUDIOS LLC
Dated: October 15, 2004	By:	/s/ Scott Rosenberg
		Scott Rosenberg
	Its:	Chairman

40

State of California              )

County of Los Angeles    )

On this the 15^th day of October, 2004, before me, Rita McCormack (here insert name and title of the officer), personally appeared  Scott Rosenberg personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) who me(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal

	(Seal)
/s/Rita McCormack	RITA MC CORMACK
Notary Signature	Commission # 1460275
	Notary Public - California
	Los Angeles County
	My Comm. Expires Jan 5, 2008

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SCHEDULE IV

SHORT FORM ASSIGNMENT

KNOW ALL PERSONS BY THESE PRESENTS: That the undersigned, for value received, hereby sells, assigns, transfers and grants in perpetuity unto WALT DISNEY PICTURES and its successors and assigns (herein called "Assignee"), all right, title and interest in and to the unpublished graphic novel written by PLATINUM STUDIOS LLC ("Owner") entitled "UNIQUE" (formerly entitled "JAUNT"), including without limitation, the title, themes, contents, characters and other versions thereof (collectively, the "Property"), with copyright in the name of_Platinum Studios, LLC registered in the United States Copyright Office, No.______________________, on

The rights granted to Assignee shall include, without limitation, all forms of: motion picture, television, digital television, video and computer games, videocassette, video and laser disc, computer assisted media (including, but not limited to, CD-ROM, CD-I and similar disc systems, interactive media and multi-media and any other devices or methods now existing or hereafter devised), character, remake, sequel, sound record, theme park, stage play, merchandising and all allied, ancillary and subsidiary rights therein of every kind and nature, now known or hereafter devised, throughout the universe and in perpetuity, in all languages, in and to the Property (the "Rights"). Said grant of Rights is more particularly set forth in and subject to the terms and conditions of that certain Memorandum of Agreement for Option/Acquisition of the Rights between Owner and Assignee, dated as of December 11, 2003.

Owner hereby agrees to allow Assignee to obtain or cause to be obtained renewals of all United States copyrights in and to said Property, whether or not referred to herein, and hereby assigns said Rights under said renewal copyrights to Assignee; and should the Owner fail to do any of the foregoing, Owner hereby irrevocably appoints Assignee as attorney-in-fact, with full and irrevocable power and authority to do all such acts and things, and to execute, acknowledge, deliver, file, register and record all such documents, in the name and on behalf of Owner, as Assignee may deem necessary or proper to accomplish the same.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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Assignee is also hereby empowered to bring, prosecute, defend and appear in suits, actions and proceedings of any nature under or concerning all copyrights in and to said Property and all renewals thereof, or concerning any infringement thereof, or interference with any of the Rights hereby granted under said copyrights or renewals thereof, in its own name or in the name of the copyright proprietor, but at the expense of Assignee, and, at its option, Assignee may join such copyright proprietor and/or Owner as a party plaintiff or defendant in any such suit, action or proceeding.

	PLATINUM STUDIOS LLC
Dated: October 15, 2004	By:	/s/ Scott Rosenberg
		Scott Rosenberg
	Its:	Chairman

State of California              )

County of Los Angeles    )

On this the 15^th day of October, 2004, before me, Rita McCormack (here insert name and title of the officer), personally appeared  Scott Rosenberg personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) who me(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal

	(Seal)
/s/Rita McCormack	RITA MC CORMACK
Notary Signature	Commission # 1460275
	Notary Public - California
	Los Angeles County
	My Comm. Expires Jan 5, 2008

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SCHEDULE V

PRE-EXISTING MERCHANDISING AGREEMENTS

Unique Deals (property based)

Dynamic Forces

Date:	July 1, 2003
Term:	5 years
Territory:	World Wide
Licensed Articles:	(a) Paper based collectibles such as Lithographs, Posters, Poster Calendars, trading cards; (b) Resin materials including, but not limited to, statues, busts, dioramas, snow globes; and (c) Plastic figures including action figures, de-formed mini-figures.
Marketing Dates:	Beginning March 2005
Morrigan Press
Date:	August 2003
Term:	5 years

Worldwide license to publish role-playing games and supplements online and in print.

Cafe Press

No term. Ongoing mail order sales of one-off product based on "Unique" consisting of:

Unique Teddy Bear

ESCHER Property sticker (Bumper)

ESCHER Property sticker (Rectangular) ESCHER Property Jr. Spaghetti Tank

ESCHER Property Jr. Baby Doll T-Shirt ESCHER Property Ash Grey T-Shirt

ESCHER Property White T-Shirt

ESCHER Property Fitted T-Shirt

ESCHER Property Dog T-Shirt

ESCHER Corp. Messenger Bag

ESCHER Corp. Tote Bag

ESCHER Corp. Sticker (Rectangular)

ESCHER Corp. Mug

ESCHER Corp. Large Mug

Are You UNIQUE T-Shirt (yellow)

Are You UNIQUE T-Shirt (gray)

Are You UNIQUE Bumper Sticker

Unique stickers

Unique Green T-Shirt

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Unique Lunchbox

Unique Messenger Bag

Unique Tote Bag

Unique Greeting Cards (Package of 6)

Unique thong

Unique Flying Disc

Unique Mouse Pad

Unique logo mug

Unique T-Shirt

Unique Cap

Unique Bumper Sticker

All items above are from the cafe press site:

http://www.cafepress.com/platinumstudios/281238

Zazzle

No term. Ongoing mail order sales of one-off product based on "Unique"

 Top Cow Productions, Inc.

Non-Exclusive vis a vis Dynamic Forces

Term:	5 years
Territory:	World Wide
Licensed Articles:	(a) Paper based collectibles such as Lithographs, Posters, Poster Calendars, trading cards; (b) Resin materials including, but not limited to, statues, busts, dioramas, snow globes; (c) Plastic figures including action figures, de-formed mini-figures; and (d) Any other form of comic-based collectibles that are typically sold to comic book and science fiction fans online and in hobby stores.

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EXHIBIT "DRCB"

This Exhibit is attached to and made part of the Agreement dated as of December 11, 2003 between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS ("Owner') for WDP's option to acquire all right, title and interest in and to the unpublished comic book written and owned by Owner entitled "Unique", relating to the motion picture project currently entitled "UNIQUE" or such other project(s) or production(s) described therein (the "Picture").

NOTE: PLEASE READ CAREFULL

This Exhibit DRCB sets forth the contractual formula to be used solely for the definition, computation, and accounting of Defined Receipts and payment, if any, of Artist's Defined Receipts Contingent Bonus as provided in the Agreement.

Artist understands and agrees that: (i) the defined terms shall have the meanings described in this Exhibit DRCB; (ii) the words or defined terms used herein may not necessarily correspond in any way to generally accepted accounting principles or any other definitions associated with the practices of accounting or auditing; (iii) there is no guarantee whatsoever that, and it is uncertain whether, any Defined Receipts Contingent Bonus will become payable to Artist, regardless of the level of income, revenues, profits and/or receipts, if any, that WDP, Affiliates or Related Parties, or any distributor or exhibitor realizes from the exploitation of the Picture; (iv) Artist shall be entitled to the payment of Defined Receipts Contingent Bonus amounts only in accordance with the terms hereof, and Artist acknowledges and understands that any such payment is entirely speculative; (v) Artist has been represented by counsel or other representative(s) of their choice in the negotiation of the terms of the Agreement and this Exhibit DRCB; (vi) Artist has a full understanding of the terms of the Agreement and this Exhibit DRCB; (vii) WDP's, Affiliates' and Related Parties' accountings for financial reporting, tax reporting or other purposes are not prepared in the same manner as accountings pursuant to this Exhibit DRCB; (viii) no fiduciary relationship whatsoever exists between WDP and Artist, including without limitation, arising from the obligation of WDP to account for Defined Receipts and potentially to pay a Defined Receipts Contingent Bonus to Artist; (ix) the terms of this exhibit are part of a comprehensive negotiated agreement that contains both economic and non-economic terms; and, which taken as a whole, is the product of an arm's length give and take negotiation whether or not changes have been made to this Exhibit DRCB; and (x) no representations whatsoever, expressed or implied, have been made to Artist that are contrary to this Paragraph.

Initialed:                               (Artist)

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EXHIBIT DRCB

DEFINED RECEIPTS CONTINGENT BONUS FORMULA

"Adjusted Defined Receipts" shall mean the remaining Defined Receipts (as defined in Paragraph 1.1.A of the attached Schedule 1, subject to the exclusions set forth in Paragraph 1.1.B of said Schedule), after the deduction of the Defined Receipts Deductions set forth in Paragraph 1.1.C of the attached Schedule 1.

Artist's "Defined Receipts Contingent Bonus" shall be Artist's percentage or share (as set forth in and subject to the applicable terms of the Agreement to which this Exhibit DRCB is attached) of the Adjusted Defined Receipts.

The terms used in this Defined Receipts Contingent Bonus Formula are defined in, and the Defined Receipts Contingent Bonus hereunder shall be accounted for, pursuant to the terms and conditions of the attached Schedule 1:

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SCHEDULE I

1. DEFINITIONS

1.1 Defined Receipts

A. "Defined Receipts" means the aggregate of all receipts actually received by WDP on behalf of the Picture in U.S. dollars in the U.S. or in a foreign currency which are not Restricted Funds, only from:

1. WDP's direct distribution of the Picture in theatres and on television ("TV"), including theatrical and non-theatrical exhibitions, and free, cable and pay TV exhibitions.

2. Distribution of the Picture by any Person other than WDP licensed by WDP with an obligation to report receipts and expenses to WDP (a "Subdistributor"). WDP shall, to the extent reported and accounted to WDP, treat all such receipts received and earned by the Subdistributor, and all distribution costs incurred by the Subdistributor as though such receipts were received and earned by WDP and such distribution costs were incurred by WDP; and the licensing or other arrangement between WDP and each Subdistributor shall not be taken into account in WDP's accounting to Artist under this Exhibit DRCB.

3. Manufacture and distribution of audio-visual cassettes, video discs and all electronic, digital and/or optical storage and/or transmission formats, any analog or digital reproductions, or any similar device and/or format embodying the complete Picture in linear form, whether now known or hereafter devised ("Video Devices"); provided that Defined Receipts for Video Devices shall be: (a) if WDP distributes Video Devices, a royalty in an amount equal to 20% of the sums actually received by such entity (less taxes, credits and returns) from its distribution thereof; or (b) royalties actually received by WDP from any unaffiliated third party Video Device distributor less royalties payable to other third parties.

4. "Flat Sale" licenses for the theatrical exhibition of the Picture for a specified period for any territory or area (excluding the U.S. and Canada) in consideration of the payment of a specified amount not calculated by a percentage of receipts of the applicable licensee.

5. Compensatory receipts (less all costs and fees) from copyright infringers of the Picture.

6. Receipts from theater box office operated by WDP in connection with four-wall or road show exhibitions of the Picture to the extent receipts from all such exhibitions taken as a whole exceed costs incurred for all such exhibitions.

7. Cash subsidies granted by governmental agencies or prizes to the extent granted solely with respect to the Picture.

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8. The royalties as provided in Schedules A (Music) and B (Soundtrack Records, Merchandising/Publishing), which are attached hereto and incorporated herein by this reference.

B. Defined Receipts ExclusionsThe following are not included in Defined Receipts:

1. Box office or other amounts retained by any theater or other exhibition venue (except as specified in Paragraph 1.1.A.6 hereof) for their own account; and receipts of: roadcasters and other transmitters by all means now known or hereafter devised; wholesale or retail distributors, licensors or sellers of Video Devices, audio devices and other products; book or music publishers; merchandisers and retailers; or any other similar Person, whether or not any or all such excluded Persons are owned, operated or controlled by WDP, Affiliates or Related Parties.

2. Amounts received from advance payments or security deposits unless earned by exhibition or broadcast, or (subject to Paragraph 1.1.A.2) unconditionally non-returnable, and refunds, rebates or adjustments granted to other Persons by WDP.

3. Amounts payable in foreign currency and not received by WDP in the U.S. due to remittance restrictions ("Restricted Funds"). Restricted Funds shall not be included in Defined Receipts nor accounted for unless and until they have been received by WDP in U.S. dollars in the U.S. or expended by WDP in the territory in which held, except as provided in 1.1.B.3(a) below.

(a) If any Defined Receipts Contingent Bonus becomes payable to Artist under this Agreement, Artist may notify WDP in writing that Artist desires to have included in Artist's Defined Receipts Contingent Bonus, Artist's share of Restricted Funds in a particular territory and designate a bank or other representative in such country, to whom payment may be made for Artist's account. Upon WDP's receipt of such notice and all required permissions, such payment shall be made to Artist's representative at Artist's expense. Upon payment of Artist's share of Restricted Funds, WDP shall have no further obligation to account for such Restricted Funds whether as Defined Receipts or otherwise.

(b) On Artist's written request, WDP shall report to Artist the amount of Restricted Funds (if any) which under this Paragraph 1.1.B.3 have not yet been included in Defined Receipts as of the closing date of the most recent statement which has been furnished to Artist under Paragraph 2.1 below.

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4. Amounts collected in connection with the distribution of the Picture as taxes or for payment of taxes (e.g., admission, sales, use or value added taxes, etc.).

5. Amounts collected from exhibition of the Picture contributed to charitable organizations.

6. Receipts from remakes, prequels, sequels, radio or TV series or other derivative uses of the Picture or any element thereof.

7. Salvage value or receipts derived from print stocks, film or tape clips, stock footage, stills, props, sets, wardrobe, or other items included in Cost of Production except and only any sums received from the sale of cars purchased specifically in connection with the Picture and sold within six months after completion of photography, which sums shall be included in the Defined Receipts of the Picture.

C. Defined Receipts Deductions "Defined Receipts Deductions" means the aggregate of all the following costs, expenses and charges paid, advanced or incurred by WDP or a Subdistributor, on a continuing basis, directly or indirectly, in connection with the distribution, exhibition and exploitation of the Picture:

1. Theatre Level Advertising Expenses

"Theatre Level Advertising Expenses" shall mean all payments made, sums expended or credits allowed by WDP in connection with advertising and exploitation at the theatre level (whether or not WDP shares with the exhibitor the cost of such advertising and exploitation). "Theatre Level Advertising" shall include, but not be limited to, advertising in newspapers, on radio and television, personal appearances by actors and other production personnel in connection with or for the Picture, salaries and expenses of WDP's publicity-advertising personnel and field exploitation persons, all of which shall be appropriately allocated (in WDP's business judgment) to the Picture to the extent that such expenses shall be paid or incurred in connection with advertising at the theatre level.

2. Conversion

Conversion to U.S. dollars and remittance of Defined Receipts to the U.S., including costs and fees of contesting the imposition of restrictions.

3. Checking

Checking attendance and receipts, and investigating unauthorized use of the Picture, whether payable to or incurred by WDP employees or other Persons.

4. Collections

Collection of Defined Receipts including attorneys' and auditors' fees and costs, and liability incurred by WDP in connection therewith.

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5. Residuals

Payments as required by applicable collective bargaining agreements by reason of exhibition of the Picture or any part thereof in any media. Any such payments made to or on behalf of Artist shall be deducted against Artist's Defined Receipts Contingent Bonus (if any) to the extent not prohibited by the  applicable collective bargaining agreement. Any payments under this Exhibit DRCB made to Artist prior to payment of residuals shall constitute a credit against such residuals to the extent not prohibited by the applicable collective bargaining agreement; provided that any such credit, when applicable, shall not be taken a second time against Artist.

6. Trade Dues

The allocable portion, as determined in WDP's business judgment, of dues, assessments, legal fees and costs (including antitrust and piracy matters), and contributions to the MPAA, AMPTP or similarly constituted or substitute Persons throughout the universe.

7. Licenses

All licenses, duties, customs charges, fees or any other amounts to permit exploitation of the Picture.

8. Taxes

Taxes and governmental fees of any nature, including costs of contesting them, and interest and penalties thereon (other than WDP or Subdistributor corporate income taxes), imposed directly or indirectly on the Picture or any part thereof or on the Defined Receipts or the license, distribution or exhibition of the Picture, or collection, conversion  or remittance of monies connected therewith. Foreign remittance and withholding taxes charged to the Picture shall be determined as follows: the then-current effective tax rate for a particular country and distribution medium shall be multiplied by the Defined Receipts from such country and distribution medium.

1.2. Miscellaneous Definitions

A. Includes

"Includes" (and equivalents "included" or "including") and "such as", are illustrative and not intended to be limiting.

B. Person

Any corporation, partnership or other business entity or natural person.

.C. WDP

For the purposes hereof, "WDP" means Walt Disney Pictures and Television and Affiliates engaged in the business of theatrical, non-theatrical and television distribution of motion pictures. WDP shall not include: any theatrical exhibitor, radio or television transmitter or broadcaster; any satellite, cable or other pay television operator, nor any Person transmitting the Picture to such operators or any one else by any method or delivery system; any wholesale distributor or retailer of video discs, videocassettes or similar devices; any book or music publisher; any producer or distributor of audio products; any merchandiser; or any other similar Person, whether or not any of the foregoing excluded Persons are owned in whole or in part, operated or controlled by WDP.

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D. Affiliate

For purposes of this Exhibit DRCB, "Affiliate" shall mean any entity (other than Walt Disney Pictures and Television) that is a subsidiary of The Walt Disney Company (i.e., an entity of which The Walt Disney Company owns, directly or indirectly through one or more intermediaries, more than 50% of the voting stock) and each other entity which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, The Walt Disney Company. For purposes of this definition, the terms  "control," "controls," and "controlled" mean the power to direct the management and policies of such entity, whether through  the ownership of voting securities, by contract or otherwise.

E. Related Party

For purposes of this Exhibit DRCB, "Related Party" shall mean any entity (other than an entity included in the definitions of WDP and Affiliate) which The Walt Disney Company owns directly or indirectly through one or more intermediaries, more than 10% of the voting stock.

F. Territory

1. U.S. is the United States, together with any other countries licensed by or through the distributing organization(s) servicing the U.S. for WDP.

2. Canada is Canada, together with any other countries licensed by or through the distributing organization(s) servicing Canada for WDP.

3. The United Kingdom (U.K.) is United Kingdom of Great Britain and Northern Ireland, Republic of Ireland, Channel Islands, Isle of Man, Gibraltar, Malta.

4. Foreign is all countries (other than U.S., U.K. and Canada) and any other areas in the universe.

5. All foregoing references to countries include their territories and possessions, and olitical subdivisions.

6. Distribution to armed forces shall be included in the particular territories where such exhibitions shall occur. Distribution to airlines, ships and other means of transportation shall be included in the territory of their respective national origin.

G. Agreement

"Agreement" is the agreement to which this exhibit is attached, together with this exhibit, and any other attached amendments, exhibits and schedules.

2. ACCOUNTING

2.1. Statements

WDP shall give Artist quarterly summary statements relating to the calculation of Artist's Defined Receipts Contingent Bonus for the first two years after the date established by WDP as the date of first general release of the Picture in the U.S. (or if there is no U.S. general release, then upon general release outside the U.S.); semiannually for the next two years; and annually thereafter if any Defined Receipts Contingent Bonus is payable to Artist or, if none due, only on Artist's written request, provided such request is made not more than once per year. Statements shall be issued within 90 days after the end of each accounting period and accompanied with payment of any amount shown due Artist. Notwithstanding the foregoing, if the Picture has been made available for U.S. TV syndication and the first statement thereafter issued shows that more than $500,000 in Defined Receipts would be needed before Artist would be entitled to receive Defined Receipts Contingent Bonus, WDP shall have no further obligation to render statements to Artist. If the Picture is generally reissued in the U.S. theatrically, then WDP shall resume quarterly statements for one year from the date of such reissue and thereafter in accordance with the above.

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2.2. Incontestability 

Statements are subject to correction or amendment by WDP at any time. Each statement and all matters of accounting and methodology are conclusive and binding on Artist 24 months after each statement is issued, unless Artist objects in writing within that 24 month period, specifying in detail the particular items on the statement and the nature of the objection(s). If the objections are raised timely, but are not resolved, Artist may initiate a claim with respect to such objections, provided such claim is instituted within 6 months following the date of the initial written objection or prior to the expiration of the period of the applicable statute of limitations, whichever occurs first. Artist may not institute or maintain a claim against WDP with respect to any item or transaction on a statement, whether in a lawsuit, an arbitration or any other proceeding unless  Artist has first provided WDP with a timely and detaile written objection to such item or transaction. WDP must keep books of account for any given transaction on a statement for 24 months after the initial reporting of such transaction. All time periods referred to in this paragraph commence upon issuance of the first statement on which any particular transaction is reflected, and the reappearance of a transaction in cumulative statements shall not cause the running of any time period to toll or recommence.

2.3. Books

The items reflected in the statements, to the extent they have not become incontestable or have not been previously examined, may be examined at Artist's expense, once in each 12 month period (the first of which commences upon issuance of the first statement hereunder). Such statements may only be examined by a national firm of reputable CPA's, the selection of which is subject to WDP's approval not to be unreasonably withheld. WDP shall make available for examination those books of account with respect to the distribution of the Picture which WDP customarily maintains at its Burbank-area offices Each examination of any statement or statements for a particular accounting period must be concluded within the earlier of six months following commencement or an aggregate of 30 examination days. A copy of the report of such examination shall be delivered by Artist to WDP when it is made available to Artist. Artist shall have no right to inspect or copy any tax return of WDP or any Subdistributor, Affiliate or any Related Party, or require the production of any such tax return or any information contained therein.

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2.4. Withholdings

All amounts payable to Artist under this Agreement shall be subject to all present and future laws and regulations requiring the reporting, deduction or withholding of payments for  taxes or otherwise. WDP shall have the right to make such deductions and withholdings, and the payment or reporting thereof to the governmental agency concerned in connection with WDP's good faith determination of such laws and regulations shall constitute payment hereunder to Artist. WDP shall not be liable to Artist for the making of such reports, deductions and/or withholdings or the payment thereof to the governmental agency concerned. In any such event, Artist shall have the sole responsibility for bringing and maintaining any claims against third parties regarding such reporting, deductions or withholdings.

2.5. Address

All statements shall be deemed issued when mailed to Artist at the address for notices under this Agreement.

2.6. Reserves

WDP shall have the right from time to time and in its business judgment to establish and adjust reserves for any distribution costs, uncollected accounts or other items which WDP believes in its business judgment will be deductible from or credited against Defined Receipts hereunder. WDP agrees to liquidate reserves within an appropriate period of time within WDP's business judgment.

2.7. Tax Credits

WDP shall have the sole right to take whatever credits (including investment tax credits), deductions or other benefits that may be available throughout the universe, with respect to taxes and excises payable in any way in connection with the Picture or otherwise, without any accounting, credit or payment obligation to Artist.

3. ADDITIONAL TERMS

3.1. Arbitration

WDP and Artist agree that any dispute between them concerning the rights and obligations of WDP and Artist under this Exhibit DRCB, whether sounding in contract or tort, may only be adjudicated in accordance with the following procedure:

A. Either (i) WDP and Artist shall mutually select an arbitrator, or (ii) if they cannot agree on such arbitrator, WDP and Artist shall each select one arbitrator and those two arbitrators shall then select a third arbitrator.

B. The parties shall arbitrate the dispute in accordance with the then-prevailing Commercial Arbitration Rules of the American Arbitration Association (except to the extent expressly set forth elsewhere in this Exhibit DRCB) and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

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3.2. No Representation

WDP has no obligation to distribute the Picture and if it does so, Artist acknowledges that WDP has no obligation to maximize Defined Receipts and has not made any representations with respect to the likelihood or amount of Defined Receipts, deferments, contingent proceeds or Defined Receipts Contingent Bonus, if any, which will or may be derived from distribution of the Picture.

3.3. Control of Exploitation and Marketing

A. As between WDP and Artist, WDP shall have exclusive and perpetual control of the distribution, marketing, advertising, publicizing, exploitation, sale or other disposition of the Picture and may distribute, or withhold or withdraw the Picture from distribution at its sole discretion with respect to one or more territories or media. WDP may distribute the Picture with other pictures whether or not WDP has any interest in such other pictures.

B. For all purposes under this Exhibit DRCB, allocations of Defined Receipts, costs, rights and other matters relating to the Picture and other motion pictures shall be allocated by WDP in its business judgment and in accordance with WDP's prevailing business practice.

C. With respect to trailers and shorts exhibited with the Picture outside of the U.S. and Canada, Defined Receipts shall be reduced by 3% for trailers and 5% for shorts.

D. As between WDP and Artist, WDP owns all rights to the Picture and its Defined Receipts and Contingent Proceeds, including the right to encumber, transfer or dispose of them and Artist shall have no right, title or interest therein. Artist acknowledges that its sole right under this Exhibit is a contractual right to contingent compensation in the form of, and measured by, the

E. WDP, its agents and assigns, in its and their business judgment, shall be entitled to distribute the Picture on a percentage basis or make flat sales, make and cancel contracts, adjust  and settle disputes, and give allowances and rebates to distributors, licensees, exhibitors or other Persons whether or not any such entity is owned, operated or controlled by WDP, Affiliates or Related Parties.

F. WDP shall have complete discretion in determining the extent, if any, to which it will audit or check payments or charges to WDP or assert claims with respect thereto.

G. Artist acknowledges that WDP is part of a large, diversified international group of affiliated companies engaged in a variety of business activities. WDP has informed Artist that it frequently enters into business transactions with Affiliates and Related Parties, and Artist acknowledges and agrees that WDP is entitled (but is not obligated) to, and may, in its sole discretion, enter into agreements or other arrangements with Affiliates and Related Parties in connection with any or all rights relating to the Picture, including, without limitation, all exploitation rights and all subsidiary, ancillary or other rights relating thereto (the "Exploitation Rights"). Artist hereby acknowledges and agrees that WDP is under no obligation, express or implied, to offer the Exploitation Rights or any part thereof to unaffiliated or unrelated third parties, whether in lieu of or in addition to offering such rights to Affiliates and Related Parties, or to otherwise seek or secure any business arrangements with any unaffiliated or unrelated third parties with respect thereto. Without limiting the generality of any other provision of the Agreement, Artist hereby waives any right to make any claim or seek any relief, whether at law or in equity (specifically including injunctive relief), asserting the existence and/or breach of any such express or implied obligation.

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In addition, Artist acknowledges and agrees that any agreement or other arrangement by WDP with an Affiliate or Related Party regarding the Exploitation Rights shall be conclusively presumed to be fair, reasonable and unobjectionable unless Artist shall establish that such agreement or other arrangement is on financial terms which, taken as a whole, are materially less favorable economically to WDP than the terms of Similar Transactions generally entered into by WDP with unaffiliated or unrelated third parties; or if there are no such unaffiliated or unrelated Similar Transactions, then by WDP with Affiliates or Related Parties (as applicable); or if there are no such Similar Transactions with Affiliates or Related Parties, then by Affiliates with any other Affiliate or Related Party (any such materially less favorable agreement or arrangement being hereinafter referred to as a "Less Favorable Arrangement"). For purposes hereof, the term "Similar Transactions" shall mean agreements or other arrangements relating to motion pictures similar to the Picture (including WDP or non-WDP Pictures)  which involve rights which are comparable to the Exploitation Rights or any relevant part thereof. WDP and Artist agree that in any arbitration between them under Paragraph 3.1 above, concerning whether WDP has entered into a Less Favorable Arrangement, the arbitrator(s) shall select an independent national accounting firm with entertainment accounting expertise who shall be present with the arbitrator(s) during the arbitration proceedings, and, on the basis of the evidence presented (including any expert testimony presented by the parties and admitted into evidence), shall provide a written report to the arbitrator(s) solely on the issue of whether there was a Less Favorable Transaction; and the above referenced records and report shall be kept in strictest confidence by the accounting firm and disclosed only to the arbitrator(s) who shall have authority, subject to a protective order maintaining the confidentiality of the information to the fullest extent permitted by law, to disclose to the parties only those relevant portions of the report indispensable to the adjudication of the issue. If pursuant to Paragraph 3.1 above, the arbitrator(s) conclude(s) that WDP has entered into a Less Favorable Arrangement with an Affiliate or Related Party, Artist's sole and exclusive remedy shall be the right to receive an adjustment on the next accounting statement when due, including any additional payments that may be required, pursuant to Paragraph 2.1 hereof, modified to the extent required to render such Less Favorable Arrangement not a Less Favorable Arrangement.

3.4. Sales of All Rights

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A. If after completion and delivery of the Picture to WDP, WDP sells all its right, title and interest in the Picture (other than to an Affiliate or through merger or consolidation), Artist may elect that:

1. The net sum received by WDP shall constitute Defined Receipts hereunder but further income of purchaser in connection with the Picture shall not be included in Defined Receipts, or,

2. The net sum received by WDP shall not be included in Defined Receipts and all receipts and expenses (other than the purchase price paid to WDP) of the purchaser relating to the Picture shall be treated for purposes of accounting to Artist, as though they were receipts and expenses of WDP, provided that upon assumption by purchaser of such obligation, the sale shall be considered a novation and WDP shall thereafter have no obligation of any kind to Artist.

B. Artist's election shall be made within 7 days after WDP notifies Artist in writing that it proposes to make such sale and identifies the purchaser and purchase price. If WDP does not receive written notice of Artist's election within 7 days after issuance of WDP's notice, then WDP shall have the right, but not the obligation, to make such election on Artist's behalf.

3.5. Assignment by Artist

A. Artist may assign Artist's right to receive its Defined Receipts Contingent Bonus hereunder in whole or in part, at any time after the release of the Picture, subject to WDP's approval not to be unreasonably withheld and provided that such assignment does not subject WDP to any additional liability in connection with the assignment. However, in no event shall WDP be obligated to account to more than one Person. In any event, WDP's obligation to pay in accordance with any assignment, or designation of a disbursing agent, shall be conditioned on WDP's receipt of written notice thereof, in form satisfactory to WDP, and WDP's payment in accordance therewith shall satisfy WDP's payment obligations to Artist hereunder. Artist's right to examine WDP's books of account shall not be assignable without WDP's prior written consent and in any event shall be limited to one Person.

B. WDP shall have the right of first refusal with respect to any proposed assignment of Artist's right to receive Defined Receipts Contingent Bonus hereunder upon equivalent  terms (to the extent economically matchable) offered to Artist by a bona fide third party. Artist shall notify WDP of the terms of any such proposed assignment and WDP shall have 7 business days within which to elect to accept such terms. Artist  shall make no change in such terms which are adverse to Artist's interest without giving WDP the opportunity to accept such changed terms. If WDP does not elect to accept such terms, then Artist shall be free to accept the proposed terms of assignment from such bona fide third party provided that if such proposed assignment is not concluded within 30 days following the expiration of the 7 business day period referred to above, WDP's right of first refusal under this Paragraph 3.5.B shall revive and shall apply to each subsequent offer received by Artist. This Paragraph 3.5.B shall not apply to family gifts.

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3.6. General Terms

A. This Agreement is not for the benefit of any third party and shall not create a partnership, joint venture, agency, trust or fiduciary obligation between WDP and Artist or make Artist WDP's agent or create a relationship between WDP and Artist other than creditordebtor to the extent amounts are due hereunder.

B. WDP may, in its business judgment, commingle Contingent Proceeds or Defined Receipts with any other funds.

C. Nothing in this Exhibit DRCB or the Agreement shall give Artist the right to a lien on the Picture, the Contingent Proceeds or Defined Receipts.

D. Artist shall not be entitled to interest or any other gain which may accrue as a result of WDP's obligation to pay Artist's Defined Receipts Contingent Bonus (or part thereof) even in the event of a dispute between Artist and WDP concerning the interpretation of this Exhibit DRCB, non-payment hereunder or otherwise.

E. Headings are for convenience only and are of no effect in construing the contents of this Agreement.

F. Artist waives any right at law or equity to revoke, terminate, diminish or enjoin any rights granted or acquired by WDP hereunder by reason of a claimed nonpayment of monies allegedly due and payable hereunder, it being agreed that Artist's sole remedy for any such alleged non-payment shall be limited to a claim for any such money that is due and payable hereunder.

END OF EXHIBIT DRCB

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SCHEDULE "A"

REFERRED TO IN PARAGRAPH 1.1.A.8 OF EXHIBIT DRCB

MUSIC PUBLISHING

1. A royalty equal to fifteen percent (15%) of Music Publishing Contingent Proceeds ("MPCP") received by WDP from the exploitation of music publishing rights (i.e., mechanical reproduction, public performance, sheet music/folios and synchronization) to the original music and/or lyrics written specifically for and synchronized in the Picture as generally released (the "Music") shall be included in Defined Receipts.

2. Music Publishing Defined Receipts ("MPDR") shall mean all monies actually received by WDP with respect to the Music excluding any advance, guarantee or minimum royalty payment received by WDP in connection with any subpublishing, collection, licensing or other agreement, unless such payment is specifically  attributable to the Music.

3. MPCP shall mean MPDR less the following:

(a) Royalties or other monies payable by WDP to the composer(s) and/or lyricist(s) of the Music.

(b) All additional shares of MPDR payable by WDP to such composer(s), lyricist(s) and/or any other third party co-publishers, administrators or other participants.

(c) Collection or other fees customarily and actually charged by The Harry Fox Agency, Inc., or any other collection agent used by WDP.

(d) Copyright registration fees and the costs of transcribing lead sheets.

(e) All other administration and exploitation expenses incurred with respect to the Music including, without limitation, the costs of producing demonstration records, advertising  and promotion expenses, costs or amounts payable to third-party publishers, co-publishers, administrators, publishing participants, subpublishers, licensees, trustees or collection  agents, attorneys' and accountants' fees directly related to the Music, and damages and expenses incurred by reason of infringement claims, but excluding rents, overhead, salaries and other similar general expenses.

4. If Artist is entitled to receive a direct royalty or other type of payment with respect to the Music, then no portion of MPCP will be included in Defined Receipts.

WALT DISNEY PICTURES

MUSIC PUBLISHING

SCHEDULE "A" TO EXHIBIT DRCB

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SCHEDULE "B"

REFERRED TO IN PARAGRAPH 1.1.A.8 OF EXHIBIT DRCB

1. SOUNDTRACK RECORDS: In the event WDP receives any royalties in respect of the soundtrack album(s) ("Album") and/or other "phonorecords" (as that term is defined in the U.S. Copyright Act of 1976, 17 U.S.C. Sections 101, et. seq.) derived from the soundtrack of the Picture ("Soundtrack Records"), then WDP agrees that such royalties will be computed as follows for inclusion in Defined Receipts:

1.1 If an Affiliate distributes Soundtrack Records, then the royalty included in Defined Receipts shall equal 2% % ("Royalty Rate") of the suggested retail list price (or the equivalent wholesale royalty) for net sales of the Album through normal retail channels in the United States ("USNRC Sales"). The Royalty Rate shall be otherwise defined, computed, reduced and accounted for on the same basis that the Affiliate customarily accounts to third party recipients including, without limitation, in respect of foreign sales, configurations variations, taxes, flat fee licensing, coupling, singles, free goods, packaging deductions, royalty base and all other reductions and deductions. Royalties hereunder shall only be included in Defined Receipts prospectively after the recoupment from the aggregate royalty payable (or accrued against advances or other charges) by WDP in respect of Soundtrack Records (including royalties payable to artists, producers, record companies, film personnel, music supervisors, musicians and the royalty payable pursuant to this Schedule B) of the following: (i) all recording costs of the master recordings embodied in Soundtrack Records; (ii) any re-recording costs of master recordings which are re-recorded for Soundtrack Records; and (iii) all costs of converting the master recordings in the Picture from motion picture recordings to phonograph record use (including, re-recording costs, reuse fees, editing, sweetening, etc.).

1.2 In the event that WDP receives its royalties from the exploitation of Soundtrack Records by a third party distributor, then the royalty to be included in Defined Receipts shall be the "Soundtrack Contingent Proceeds" (as defined below).

1.3. "Soundtrack Contingent Proceeds" shall mean all revenues received by WDP from the exploitation of Soundtrack Records, if any, as set forth in the applicable Soundtrack Records agreement after deduction of the following costs and third party royalties:

(a) A sum equivalent to the actual dollar amount (including any fixed cash amounts, advances and/or royalties) actually paid to all third party performers and/or participants with respect to the music/soundtrack contained in Soundtrack Records and/or the Picture, including without limitation, cash payments and/or royalties payable to artists, producers, record companies, film personnel, music supervisors and musicians.

(b) A sum equivalent to all artwork costs for Soundtrack Records to the extent such artwork costs are paid by or charged to WDP, remixing and remastering costs, re-recording costs, reuse fees, license fees and similar costs attributable to the recording/production and/or licensing of the master recordings embodied on Soundtrack Records, except to the extent such costs are included in the negative cost of the Picture and to the extent such Soundtrack Records costs and fees have actually been incurred directly or indirectly by WDP.

(c) Any legal fees or related expenses incurred by WDP for outside legal counsel engaged at WDP's election to: document and/or negotiate the applicable Soundtrack Records agreement; in protecting or defending WDP's rights, privileges and benefits with respect to Soundtrack Records and/or any master recordings recorded/acquired for the Picture and/or Soundtrack Records; and/or in connection with any dispute involving any release/distribution agreement pertaining to Soundtrack Records.

(d) In the event the Soundtrack Records distributor pays WDP any nonreturnable advance against royalties, a reasonable reserve shall be applied towards (i) third party payments payable prior to the Soundtrack Record distributor's recoupment of such advance at the "net" artist rate; and (ii) unrecouped costsincurred by WDP in respect of any Soundtrack Records and/or in excess of the budgeted cost of the music for the Picture.

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1.4. Notwithstanding the foregoing, no royalties shall be included hereunder for any so-called "storyteller" or "read-along" phonorecords or for any phonorecords embodied in other merchandise or for any audiovisual devices now known or hereafter devised.

1.5. If Artist is entitled to receive a direct royalty or other type of payment with respect to Soundtrack Records, then no royalties from Soundtrack Records will be included in Defined Receipts.

2. MERCHANDISING/PUBLISHING. With respect to items of merchandising (including interactive games and other products and services) and book publication (including children's storytelling recordings, as distinguished from soundtrack records, but excluding souvenir programs and similar publications) based on the Picture, then:

2.1 For items sold by a licensee of WDP, the royalties WDP receives from such licensee shall be included in Defined Receipts of the Picture after first deducting (i) a percentage deduction of: fifty percent (50%), inclusive of subdistributor fees, for items sold in the U.S.; sixty-five percent (65%), inclusive of subdistributor fees, for items sold outside the U.S.; and fifteen percent (15%) plus any subdistributor's fees for any book novel; and (ii) out-of-pocket costs and royalties to third parties; or

2.2 For items are sold by WDP at the wholesale or retail level, at WDP's discretion, either:(i) an amount equal to seven (7%) of the wholesale price of such items sold by WDP at the wholesale level (less a reasonable allowance for returns); or (ii) an amount equal to seven percent (7%) of fifty percent (50%) of the gross retail revenues of such items sold by WDP at the retail level (less a reasonable allowance for returns) shall be included in Defined Receipts of the Picture after first deducting (a) a percentage deduction of fifty percent (50%) for items sold in the U.S.; sixty-five percent (65%) for items sold outside the U.S.; and fifteen percent (15%) with respect to any book novel; and (b) out-of pocket costs and royalties to third parties.

2.3 In no event shall any items of merchandise be treated as falling under both provisions 2.1 or 2.2 above.

2.4 If Artist is entitled to receive a direct royalty or other type of payment with respect to the exercise of merchandising and book publication rights, then no royalties therefrom will be included in Defined Receipts.

WALT DISNEY PICTURES

SOUNDTRACK RECORDS/MERCHANDISING/PUBLISHING

SCHEDULE "B" TO EXHIBIT DRCB

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RIDER TO EXHIBIT "DRCB"

This Rider is attached to and made a part of Exhibit "DRCB" which is attached to the agreement ("Agreement") dated as of December 11, 2003 between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS LLC ("Owner") relating to the Picture identified therein.

1. With respect to Paragraph 1.1.A.2. (DEFINITIONS, DEFINED RECEIPTS), Subdistributors hereunder shall be deemed to include WDP sales agents (if any).

2. With respect to Paragraph 1.1.A.5. (DEFINITIONS, DEFINED RECEIPTS), the words "excluding costs of WDP in-house counsel in connection with such copyright infringement claims" shall be inserted immediately after the word "costs" but within the parenthetical; and the words "unfair competition, trademark, and/or patent infringement and/or defamation claims" shall be inserted immediately after the word "infringers."

3. With respect to Paragraph 1.1.A.8. (DEFINITIONS, DEFINED RECEIPTS), the words "and other receipts" shall be inserted immediately after the word "royalties" in the first line.

4. With respect to Paragraph 1.1 .A. (DEFINITIONS, DEFINED RECEIPTS), the following are added as new Paragraphs 9. and 10. thereof: "9. Receipts from the distribution of trailers for the Picture; and 10. Receipts allocable to the Picture as received from the Copyright Tribunal, payable pursuant to Section III of the 1976 U.S. Copyright Act. There will be no Percentage Deduction applied to the receipts under this subparagraph 10."

5. With respect to Paragraph 1.1.B.3. (DEFINITIONS, DEFINED RECEIPTS XCLUSIONS), after the word "WDP" in the seventh line, the words "for any purpose" shall be inserted; and the following shall be added at the end of the Paragraph, "or unless freely remittable to the U.S. in U.S. dollars. There shall be no unreasonable delay with respect to the conversion and remittance of foreign receipts hereunder."

6. With respect to Paragraph 1.1.B.5. (DEFINITIONS, DEFINED RECEIPTS EXCLUSIONS), the words "any charitable screening" shall be inserted immediately after the word "from" in the first line.

7. With respect to Paragraph 1.1.B.7. (DEFINITIONS, DEFINED RECEIPTS EXCLUSIONS), the words "or such other major items" shall be inserted immediately after the word "cars" in the fifth line.

8. With respect to Paragraph 1.1.C.3. (DEFINITIONS, DEFINED RECEIPTS EDUCTIONS, CHECKING), the following shall be added thereto: "provided such checking costs shall not exceed one percent (1%) of the worldwide Defined Receipts of the Picture."

9. With respect to Paragraph 1.1.C.4. (DEFINITIONS, DEFINED RECEIPTS DEDUCTIONS, COLLECTIONS), the word "outside" shall be inserted immediately after the word "including" in the first line and also immediately after the word "and" in the second line.

10. With respect to Paragraph 1.1.1.C.6. (DEFINITIONS, DEFINED RECEIPTS DEDUCTIONS, TRADE DUES), the following sentence is added to the end of this paragraph: "Notwithstanding the foregoing, Defined Receipts shall not be reduced by more than: (1) $250,000 in the aggregate for domestic trade association fees payable by WDP to the M.P.A.A., A.M.P.T.P. and/or any similarly constituted or substitute person or successor organization to which WDP may now or hereafter belong on account of receipts or proceeds from the distribution of the Picture; and (2) $250,000 in the aggregate for foreign trade association fees payable by WDP to the M.P.E.A. and/or any successor organization to which WDP may now or hereafter belong on account of receipts or proceeds from the distribution of the Picture."

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11. With respect to Paragraph 1.1.C.8. (DEFINITIONS, DEFINED RECEIPTS DEDUCTIONS, TAXES), (a) the words "(appropriately allocated)" shall be inserted immediately after the word "nature" in the first line; and (b) the following shall be added as the last sentences thereof: "In the event of any tax refunds and/or in the event of any interest adjustment, Distribution Costs shall be credited (without any Percentage Deduction taken) with respect thereto. The words 'corporate income taxes' appearing herein shall mean taxes based on net income, so-called excess profits, and to the extent such are in the nature of taxes based on net income or so-called excess profit taxes -- franchise and corporation income taxes. Also to  the extent any such taxes paid by WDP are deducted and subsequently refunded, an appropriate retroactive adjustment shall be made."

12. With respect to Paragraph 1.2.F.1. (DEFINITIONS, MISCELLANEOUS DEFINITIONS, TERRITORY), the following words shall be added thereto: "and all transportation companies, armed services or institutions flying the flag of the U.S."

13. With respect to Paragraph 1.2.F.6. (DEFINITIONS, MISCELLANEOUS DEFINITIONS, TERRITORY), the words "such exhibitions shall occur" in the second and third lines shall be deleted and the words "agreements relating to such exhibition are entered into" shall be inserted in place thereof.

14. With respect to Paragraph 2.1. (ACCOUNTING, STATEMENTS), (a) solely in the event Owner is receiving Defined Receipts Contingent Bonus payments hereunder within the first two years, then (i) the word "three" shall replace the word "two" in the third line; (ii) the word "year" shall be inserted immediately after the word "next" in the seventh line; (iii) the words "two years" shall be deleted therefrom; and (b) "$500,000" shall be changed to "$750,000" in the seventeenth line.

15. With respect to Paragraph 2.1. (ACCOUNTING, STATEMENTS), the following is added immediately before the last sentence thereof: "but the foregoing shall not limit Owner's right to request a statement as provided in the first sentence of this paragraph 2.1." And the following is added to the last sentence thereof: "and if the Picture is broadcast on prime time network television in the U.S. or exhibited on a premium pay TV service or The Disney Channel or similar pay cable stations in the first free TV window, in the U.S., WDP shall account therefor by issuing a quarterly statement for one year starting on the accounting period within which the Picture has been so exhibited, accompanied by payment of the amount, if any, shown thereby to be due Owner."

16. With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY), the number "36" shall be substituted for the numeral "24" in each place therein; the word "issued" shall be deleted from the fifth line thereof and the word "received" substituted therefor; and the numeral "12" shall be substituted for the numeral "6" in the tenth line thereof

17. With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY), the following shall be inserted immediately after the word "objection" in the eleventh line: "or if commenced in 6 months after completion of audit, if such audit is commenced prior to, but completed on a timely basis after said 36-month period."

18. With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY) the following sentence shall be inserted immediately after the sentence ending with the word "first" in the thirteenth line: "The foregoing period within which Owner may raise objections shall recommence, but only with respect to certain transactions or items included in previous statements that have been thereafter revised and/or corrected."

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19. With respect to Paragraph 2.3. (ACCOUNTING, BOOKS), the word "national" is deleted from the seventh line.

20. With respect to Paragraph 2.3. (ACCOUNTING, BOOKS), the word "issuance" is deleted from the fifth line and the word "delivery" is substituted therefor, and the following sentence shall be inserted immediately after the word "withheld" in the ninth line: "The 'big five' accounting firms excluding Price Waterhouse Coopers are pre-approved by WDP subject to any conflict of interest that may exist or arise. Laventhol & Horwath or any successor-in-interest or any of its present or former principals or employees shall be deemed not approved by WDP so long as they are representing Silver Screen Partners as auditors and/or if they previously represented Silver Screen as auditors on any WDP picture. In addition, any auditor(s) that represents Touchwood Pacific Partners I and/or Interscope Communications Inc./Nomura, Babcock and Brown Unit One Film Partners and/or any other financier of the Picture and/or any other WDP picture shall be deemed not approved by WDP."

21. With respect to Paragraph 2.4. (ACCOUNTING, WITHHOLDINGS), the following shall be added at the end thereof: "Any moneys so recovered by Owner resulting from such claims or prosecutions shall be retained by Owner unless WDP has a prior existing claim or lien, provided however that nothing herein shall be deemed a waiver of either party's rights or remedies in law or equity.

22. With respect to Paragraph 2.6. (ACCOUNTING, RESERVES), the following shall be added thereto: "In any event, WDP shall liquidate any such reserves within 12 months after establishing the same unless there is any claim and/or litigation pending, in which case WDP may continue to maintain such reserves".

23. With respect to Paragraph 3.3.A. (MISCELLANEOUS, CONTROL OF EXPLOITATIONAND MARKETING) the following shall be added after the word "Owner" in the first line: "subject to Owner's consultation rights, if any, in connection therewith as more fully set forth in this Agreement,"

24. With respect to Paragraph 3.3.A. (MISCELLANEOUS, CONTROL OF EXPLOITATION AND MARKETING), the following shall be added following the last sentence thereof: "subject to, and except as provided to the contrary in the Agreement to which this Rider is attached. Notwithstanding the foregoing, there shall be no sub-distribution of the Picture in the U.S. or Canada unless WDP customarily uses sub-distributors for distribution in the U.S. and/or Canada and at that time with respect to substantially all other motion pictures during the same calendar year."

25. With respect to Paragraph 3.3.B. (ADDITIONAL TERMS, CONTROL OF EXPLOITATION AND MARKETING), the words "good faith" shall be inserted immediately after the word "business" in the fourth line.

26. With respect to Paragraph 3.3.C. (ADDITIONAL TERMS, CONTROL OF EXPLOITATION AND MARKETING), the words "trailers and" are deleted from the first line, and the words "for trailers and 5% " are deleted from the third line thereof.

27. With respect to Paragraph 3.4.A.1. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the word "sum" in the first line shall be changed to "sum(s)."

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28. With respect to Paragraph 3.4.A.2. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the following shall be inserted immediately after the word "assumption" in the eighth line: "in writing and subject to full performance."

29. With respect to Paragraph 3.4.B. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the words "14 business days" shall be substituted for the words "7 days" in the each place therein. In addition, the words "and other material terms" shall be inserted immediately after the word "price" in the fourth line.

30. With respect to Paragraph 3.5.A (MISCELLANEOUS, ASSIGNMENT BY OWNER), the words "completion of services" shall be inserted immediately after the word "after" in the third line; and the words "the release of the Picture" in the third line shall be deleted.

31. With respect to Paragraph 3.5.A. (ADDITIONAL TERMS, ASSIGNMENT BY OWNER), the following shall be added after the word "Picture" in the third line: "or to Artist's loan-out company or other closely held corporation and vice-versa; provided that, and subject to, all parties signing WDP's customary (i) Notice of Irrevocable Authority and (ii) Acknowledgment of Notice of Irrevocable Authority."

32. With respect to Paragraph 3.5.B. (ADDITIONAL TERMS, ASSIGNMENT BY OWNER), the word "material" shall be inserted before the word "change" in the eighth line thereof, and the following words shall be added to the last sentence thereof: "or a transfer to any corporation or entity wholly owned or controlled by Owner."

END OF RIDER

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EXHIBIT "CB"

This Exhibit is attached to and made part of the Agreement dated as of December 11, 2003 between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS ("Owner") for WDP's option to acquire all right, title and interest in and to the unpublished comic book written and owned by Owner entitled "Unique", relating to the motion picture project currently entitled "UNIQUE" or such other project(s) or production(s) described therein (the "Picture").

NOTE: PLEASE READ CAREFULL

This Exhibit CB sets forth the contractual formula to be used solely for the definition, computation, and accounting of Contingent Proceeds and payment, if any, of Lender's Contingent Bonus as provided in the Agreement.

Lender and Artist understand and agree that: (1) the defined terms shall have the meanings described in this Exhibit CB; (ii) the words or defined terms used herein may not necessarily correspond in any way to generally accepted accounting principles or any other definitions associated with the practices of accounting or auditing; (iii) there is no guarantee whatsoever, and it is unlikely, that any Contingent Bonus will become payable to Lender, regardless of the level of income, revenues, profits and/or receipts, if any, that WDP, Affiliates or Related Parties, or any distributor or exhibitor realizes from the exploitation of the Picture; (iv) Lender shall be entitled to the payment of Contingent Bonus amounts only in accordance with the terms hereof, and Lender and Artist acknowledge and understand that any such payment is entirely speculative; (v) Lender and Artist have been represented by counsel or other representative(s) of their choice in the negotiation of the terms of the Agreement and this Exhibit CB; (vi) Lender and Artist have a full understanding of the terms of the Agreement and this Exhibit CB; (vii) WDP's, Affiliates' and Related Parties' accountings for financial reporting, tax reporting or other purposes are not prepared in the same manner as accountings pursuant to this Exhibit CB; (viii) no fiduciary relationship whatsoever exists between WDP, on the one hand, and Lender and Artist, on the other hand, including without limitation, arising from the obligation of WDP to account for Contingent Proceeds and potentially to pay a Contingent Bonus to Lender; (ix) the terms of this exhibit are part of a comprehensive negotiated, agreement that contains both economic and non-economic terms; and, which taken as a whole, is the product of an arm's length give and take negotiation whether or not changes have been made to this Exhibit CB; and (x) no representations whatsoever, expressed or implied, have been made to Lender or Artist that are contrary to this Paragraph.

Initialed:                                (Lender) and                                     (Artist)

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EXHIBIT CB

CONTINGENT BONUS FORMULA

"Contingent Proceeds" shall mean the Defined Receipts, if any, remaining after WDP deducts and retains for its own account, the following items on a continuing basis in the following order of priority:

A. FIRST DEDUCTION - First, an amount equal to the following percentages ("Percentage Deduction") of Defined Receipts:

•  From Defined Receipts (other than Flat Sales and Free TV)
	oU.S. and Canada	30%
	oU.K.	35%
	oForeign	40%
•  From Flat Sales Defined Receipts		15%
•  From Free TV Defined Receipts
	oU.S. Network	25%
	oU.S. Non-Network and Canada	35%
	oForeign and U.K.	40%

B. SECOND DEDUCTION - Next, from the remaining amount of Defined Receipts, an amount equal to the Distribution Costs plus an additional 10% of Ad and Publicity Costs.

C. THIRD DEDUCTION - Next, from the remaining amount of Defined Receipts, if any, whether or not funds are actually borrowed for the Picture, and irrespective of the actual funding arrangements or WDP's actual financing costs for the Picture or WDP's borrowing rate, as WDP's funding charge, an amount equal to 1.25 times the prime rate of the Bank of America, as the same may vary from time to time, on the total amount of the Fourth Deduction below, commencing from the respective dates on which amounts chargeable under the Fourth Deduction are paid or incurred (whichever first occurs) and continuing until the middle of the accounting period in which those amounts are recouped.

D. FOURTH DEDUCTION - Next, from the remaining amount of Defined Receipts, if any, an amount equal to the Cost of Production plus an additional 15% of Cost of Production, which 15% shall be charged concurrently with the incurring of the respective items of Cost of Production.

E. FIFTH DEDUCTION - Next, from the remaining amount of Defined Receipts, if any, an amount equal to the Other Contingent Amounts. The remaining amount, if any, shall be the Contingent Proceeds from which Lender's percentage or share thereof (the "Contingent Bonus") shall be calculated. The terms used in this Contingent Bonus Formula are defined in, and the Contingent Bonus hereunder shall be accounted for, pursuant to the terms and conditions of the attached Schedule 1:

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SCHEDULE 1

1. DEFINITIONS

1.1 Defined Receipts

A. "Defined Receipts" means the aggregate of all receipts actually received by WDP on behalf of the Picture in U.S. dollars in the U.S. or in a foreign currency which are not Restricted Funds, only from:

1. WDP's direct distribution of the Picture in theatres and on television ("TV"), including theatrical and non-theatrical exhibitions, and free, cable and pay TV exhibitions.

2. Distribution of the Picture by any erson other than WDP licensed by WDP with an obligation to report receipts and expenses to WDP (a "Subdistributor"). WDP shall, to the extent reported and accounted to WDP, treat all such receipts received and earned by the Subdistributor, and all distribution costs incurred by the Subdistributor as though such receipts were received and earned by WDP and such distribution costs were incurred by WDP; provided, however, that WDP's applicable Percentage Deduction shall include the Subdistributor's distribution fee, and the licensing or other arrangement between WDP and each Subdistributor shall not be taken into account in WDP's accounting to Lender under this Exhibit CB.

3. Manufacture and distribution of audio-visual cassettes, video discs and all electronic, digital and/or optical storage and/or transmission formats, any analog or digital reproductions, or any similar device and/or format embodying the complete Picture in linear form, whether now known or hereafter devised ("Video Devices"); provided that Defined Receipts for Video Devices shall be: (a) if WDP distributes Video Devices, a royalty in an amount equal to 20% of the sums actually received by such entity (less taxes, credits and returns) from its distribution thereof; or (b) royalties actually received by WDP from any unaffiliated third party Video Device distributor less royalties payable to other third parties.

4. "Flat Sale" licenses for the theatrical exhibition of the Picture for a specified period for any territory or area (excluding the U.S. and Canada) in consideration of the payment of a specified amount not calculated by a percentage of receipts of the applicable licensee.

5. Compensatory receipts (less all costs and fees) from copyright infringers of the Picture.

6. Receipts from theater box office operated by WDP in connection with four-wall or road show exhibitions of the Picture to the extent receipts from all such exhibitions taken as a whole exceed costs incurred for all such exhibitions.

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7. Cash subsidies granted by governmental agencies or prizes to the extent granted solely with respect to the Picture.

8. The royalties as provided in Schedules A (Music) and B (Soundtrack Records, Merchandising/Publishing), which are attached hereto and incorporated herein by this reference. There will be no Percentage Deduction applied to the royalties under this subparagraph 8. There shall not be any Percentage Deduction on Defined Receipts from each of Paragraph 1.1.A.5 and Paragraph 1.1.A.7 above. If the respective costs relating to each of Paragraph 1.1.A.5, 1.1.A.6 or Paragraph 2 of Schedule B, and applicable Percentage Deduction, if any, pursuant to Paragraph 1.2, exceed receipts from each of Paragraph 1.1.A.5, 1.1.A.6 or Paragraph 2 of Schedule B, respectively, such excess costs of each shall separately be deductible as a Distribution Cost.

B. Defined Receipts Exclusions

The following are not included in Defined Receipts:

1. Box office or other amounts retained by any theater or other exhibition venue (except as specified in Paragraph 1.1.A.6 hereof) for their own account; and receipts of: broadcasters and other transmitters by all means now known or hereafter devised; wholesale or retail distributors, licensors or sellers of Video Devices, audio devices and other products; book or music publishers; merchandisers and retailers; or any other similar Person, whether or not any or all such excluded Persons are owned, operated or controlled by WDP, Affiliates or Related Parties.

2. Amounts received from advance payments or security deposits unless earned by exhibition or broadcast, or (subject to Paragraph 1.1.A.2) unconditionally non-returnable, and refunds, rebates or adjustments granted to other Persons by WDP.

3. Amounts payable in foreign currency and not received by WDP in the U.S. due to remittance restrictions ("Restricted Funds"). Restricted Funds shall not be included in Defined Receipts nor accounted for unless and until they have been received by WDP in U.S. dollars in the U.S. or expended by WDP in the territory in which held, except as provided in 1.1.B.3 (a) below.

(a) If any Contingent Bonus becomes payable to Lender under this Agreement, Lender may notify WDP in writing that Lender desires to have included in Lender's Contingent Bonus, Lender's share of Restricted Funds in a particular territory and designate a bank or other representative in such country, to whom payment may be made for Lender's account. Upon WDP's receipt of such notice and all required permissions, such payment shall be made to Lender's representative at Lender's expense. Upon payment of Lender's share of Restricted Funds, WDP shall have no further obligation to account for such Restricted Funds whether as Defined Receipts or otherwise.

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(b) On Lender's written request, WDP shall report to Lender the amount of Restricted Funds (if any) which under this Paragraph 1.1.B.3 have not yet been included in Defined Receipts as of the closing date of the most recent statement which has been furnished to Lender under Paragraph 2.1 below.

4. Amounts collected in connection with the distribution of the Picture as taxes or for payment of taxes (e.g., admission, sales, use or value added taxes, etc.).

5. Amounts collected from exhibition of the Picture contributed to charitable organizations.

6. Receipts from remakes, prequels, sequels, radio or TV series or other derivative uses of the Picture or any element thereof.

7. Salvage value or receipts derived from print stocks, film or tape clips, stock footage, stills, props, sets, wardrobe, or other items included in Cost of Production except and only any sums received from the sale of cars purchased specifically in connection with the Picture and sold within six months after completion of photography, which sums shall be included in the Defined Receipts of the Picture without any Percentage Deduction.

1.2. PercentageDeduction

"Percentage Deduction" means the percentage of Defined Receipts set forth in the Contingent Bonus Formula as the First Deduction which WDP shall deduct and retain for its own account.

1.3. Distribution Costs

A. "Distribution Costs" means the aggregate of all costs, expenses and charges paid, advanced or incurred by WDP or a Subdistributor, directly or indirectly, in connection with the distribution, exhibition and exploitation of the Picture, which are not included in Cost of Production, including any of the following:

1. Ad and Publicity Costs

Advertising, promoting, marketing, exploiting and publicizing (collectively "ad" or "advertising") in connection with the Picture, including the cost of ad space, time, and physical material used for ads and commercials; shipping, integrating and monitoring of ads and commercials; preparation and dissemination of ad material; salaries, fees, travel and business  expenses of WDP advertising and marketing executives, personalities connected to the Picture, and publicists, press representatives and field exploitation persons appropriately allocated (in WDP's business judgment) to the Picture, whether or not incurred by or paid to WDP employees or other persons; previews, screenings, premieres, film festivals, trade shows and sales events; entertainment of press and personalities; research and tests of ad concepts and effectiveness; press books and kits, trailers, stills and other accessories and publicity releases; advertising allowances to theatres or other exhibitors regardless of how made; commercial tie ups; other advertising and publicity costs whether directed to the consumer or the exhibitor and institutional costs.

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2. Conversion

Conversion to U.S. dollars and remittance of Defined Receipts to the U.S., including costs and fees of contesting the imposition of restrictions.

3. Checking

Checking attendance and receipts, and investigating unauthorized use of the Picture, whether payable to or incurred by WDP employees or other Persons.

4. Claims

All expenses, costs and attorneys' fees in connection with the investigation, assertion, prosecution or defense of claims or litigation relating to the Picture and the gross amount paid for the settlement or satisfaction of any claims, judgments or decrees in connection therewith.

5. Collections

Collection of Defined Receipts including attorneys' and auditors' fees and costs, and liability incurred by WDP in connection therewith.

6. Copyright and Royalties

Copyright, trademark and patent costs in connection with the Picture and royalties payable with respect thereto.

7. Other Versions

Making, delivering and using foreign, radio, TV or any other media versions of the Picture, or titles thereof, or making changes required by censorship and rating considerations.

8. Residuals

Payments as required by applicable collective bargaining agreements by reason of exhibition of thePicture or any part thereof in any media. Any such payments made to or on behalf of Lender shall be deducted against Lender's Contingent Bonus (if any) to the extent not prohibited by the applicable collective bargaining agreement. Any payments under this Exhibit CB made to Lender prior to payment of residuals shall constitute a credit against such residuals to the extent not prohibited by the applicable collective bargaining agreement; provided that any such credit, when applicable, shall not be taken a second time against Lender.

9. Insurance

Insurance coverage for any and all risks of loss or liability with respect to the Picture and any components thereof. WDP may elect in its sole discretion to self-insure as to any items of risk, and charge an amount equal to the insurance premium WDP would otherwise have paid for such insurance.

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10. Trade Dues

The allocable portion, as determined in WDP's business judgment, of dues, assessments, legal fees and costs             (including antitrust and piracy matters), and contributions to the MPAA, AMPTP or similarly constituted or substitute Persons throughout the universe.

11. Licenses

All licenses, duties, customs charges, fees or any other amounts to permit exploitation of the Picture.

12. Prints

Prints of the Picture including lab, labor, service and materials, titles, discs, dubbing, subtitling, gauge reductions, inspection, repair, shipping, storage, delivery and insurance thereon.

13. Taxes

Taxes and governmental fees of any nature, including costs of contesting them, and interest and penalties thereon (other than WDP or Subdistributor corporate income taxes), imposed directly or indirectly on the Picture or any part thereof or on the Defined Receipts or the license, distribution or exhibition of the Picture, or collection, conversion or remittance of monies connected therewith. Foreign remittance and withholding taxes charged to the Picture shall be determined as follows: the then-current effective tax rate for a particular country and distribution medium shall be multiplied by the Defined Receipts from such country and distribution medium.

14. Transportation, Shipping Packaging, etc.

Transportation, shipping, warehousing, reels and containers, and all other costs of delivering the Picture for exhibition.

B. All discounts, rebates or credits received by WDP specifically relating to the Picture shall be taken into account in computing Distribution Costs hereunder other than those based on: (i) volume or quantity of advertising, prints, negatives or other materials, or (ii) the manner or time of payment of any Distribution Cost item.

1.4 .Other Contingent Amounts

"Other Contingent Amounts" means amounts such as deferments, defined receipts, contingent bonus (or similar payment), or otherwise, to any Person including Lender for rights or services in connection with the Picture, excluding: (1) the Contingent Bonus payable to Lender or retained by WDP hereunder; and (2) contingent bonus payments (or other contingent payments) which reduce Lender's Contingent Bonus to the extent provided in this Agreement. Other Contingent Amounts will be deducted if, when and to the extent that WDP's obligation to pay them accrues, whether or not such payments have become due or been made and regardless of whether WDP has recovered the Cost of Production.

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1.5. Cost Of Production

"Cost of Production" is the aggregate of all costs, charges, claims and expenses paid or incurred by WDP in connection with the development, production and delivery of the Picture and its trailers, including payments required to be made following production of the Picture, determined in the customary manner WDP accounts for production costs at the time the Picture is produced. If WDP's facilities are used, a use charge shall be included in the Cost of Production in accordance with the then-current WDP facilities charge schedule. To the extent that WDP employees render services in connection with the Picture, employee fringe benefit costs for such employees shall not exceed the effective fringe benefit rate for Walt Disney Pictures and Television employees during the fiscal year  preceding the fiscal year in which the services were rendered. To the extent that WDP's contractual obligation to pay Defined Receipts to any Person, including Lender,  for rights or services in connection with the Picture accrues before any Contingent Proceeds hereunder have been derived, such payments of Defined Receipts shall be deemed included in the Cost of Production regardless of whether the obligation is fixed or dependent upon Defined Receipts. An additional amount by which the Cost of Production exceeds the approved Picture budget by the lower of $300,000 or 10% of the budget shall be deemed included in Cost of Production, but such excess overbudget amount shall not itself bear WDP's funding charge set forth as the Third Deduction in Paragraph C. of the Contingent Bonus Formula nor the additional 15% charge set forth as the Fourth Deduction in Paragraph D. of the Contingent Bonus Formula. Excess costs incurred due to force majeure, changes requested or approved by WDP as confirmed by a Business Affairs executive of WDP in writing, and retroactive increases to scale personnel under collective bargaining agreements are excluded from overbudget computation.

1.6. Miscellaneous Definitions

A. Free TV

"Free TV" is television exhibition for which no fee or subscription is charged to the viewer.

B. Network

"Network" means ABC, NBC or CBS or any other similar affiliated group of Free TV television stations broadcasting more than fifteen hours of prime time programming per week with eighty percent U.S. clearance.

C. Includes

"Includes"                      (and equivalents "included" or "including") and "such as", are illustrative and not intended to be limiting.

D. Person

Any corporation, partnership or other business entity or natural person.

E. WDP

For the purposes hereof, "WDP" means Walt Disney Pictures and Television and Affiliates engaged in the business of theatrical, non-theatrical and television distribution of motion pictures. WDP shall not include: any theatrical exhibitor, radio or television transmitter or broadcaster; any satellite, cable or other pay television operator, nor any Person transmitting the Picture to such operators or any one else by any method or delivery system; any wholesale distributor or retailer of video discs, videocassettes or similar devices; any book or music publisher; any producer or distributor of audio products; any merchandiser; or any other similar Person, whether or not any of the foregoing excluded Persons are owned in whole or in part, operated or controlled by WDP.

F. Affiliate

For purposes of this Exhibit CB, "Affiliate" shall mean any entity (other than Walt Disney Pictures and Television) that is a subsidiary of The Walt Disney Company (i.e., an entity of which The Walt Disney Company owns, directly or indirectly through one or more intermediaries, more than 50% of the voting stock) and each other entity which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, The Walt Disney Company. For purposes of this definition, the terms "control," "controls," and "controlled" mean the power to direct the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

G. Related Party

For purposes of this Exhibit CB, "Related Party" shall mean any entity (other than an entity included in the definitions of WDP and Affiliate) which The Walt Disney Company owns directly or indirectly through one or more intermediaries, more than 10% of the voting stock.

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H. Territory

1.U.S. is the United States, together with any other countries licensed by or through the distributing organization(s) servicing the U.S. for WDP.

2.Canada is Canada, together with any other countries licensed by or through the distributing organization(s) servicing Canada for WDP.

3.The United Kingdom (U.K.) is United Kingdom of Great Britain and Northern Ireland, Republic of Ireland, Channel Islands, Isle of Man, Gibraltar, Malta.

4.Foreign is all countries (other than U.S., U.K. and Canada) and any other areas in the universe.

5.All foregoing references to countries include their territories and possessions, and political subdivisions.

6.Distribution to armed forces shall be included in the particular territories where such exhibitions shall occur. Distribution to airlines, ships and other means of transportation shall be included in the territory of their respective national origin.

1 Agreement

"Agreement" is the agreement to which this exhibit is attached, together with this exhibit, and any other attached amendments, exhibits and schedules.

2. ACCOUNTING 2.1. Statements

WDP shall give Lender quarterly summary statements relating to the calculation of Lender's Contingent Bonus for the first two years after the date established by WDP as the date of first general release of the Picture in the U.S. (or if there is no U.S. general release, then upon general release outside the U.S.); semiannually for the next two years;and annually

thereafter if any Contingent Bonus is payable to Lender or, if none due, only on Lender's written request, provided such request is made not more than once per year. Statements shall be issued within 90 days after the end of each accounting period and accompanied with payment of any amount shown due Lender. Notwithstanding the foregoing, if the Picture has been made available for U.S. TV syndication and the first statement thereafter issued shows that more than $500,000 in Defined Receipts would be needed before Lender would be entitled to receive Contingent Bonus, WDP shall have no further obligation to render statements to Lender. If the Picture is generally reissued in the U.S. theatrically, then WDP shall resume quarterly statements for one year from the date of such reissue and thereafter in accordance with the above.

2.2.  incontestability

Statements are subject to correction or amendment by WDP at any time. Each statement and all matters of accounting and methodology are conclusive and binding on Lender 24 months after each statement is issued, unless Lender objects in writing within that 24

month period, specifying in detail the particular items on the statement and the nature of the objection(s). If the objections are raised timely, but are not resolved, Lender may initiate a claim with respect to such objections, provided such claim is instituted within 6 months following the date of the initial written objection or prior to the expiration of the period of the applicable statute of limitations, whichever occurs first. Lender may not institute or maintain a claim against WDP with respect to any item or transaction on a statement, whether in a lawsuit, an arbitration or any other proceeding unless Lender has first provided WDP with a timely and detailed written objection to such item or transaction. WDP must keep books of account for any given transaction on a statement for 24 months after the initial reporting of such transaction. All time periods referred to in this paragraph commence upon issuance of the first statement on which any particular transaction is reflected, and the reappearance of a transaction in cumulative statements shall not cause the running of any time period to toll or recommence.

2.3. Books

The items reflected in the statements, to the extent they have not become incontestable or have not been previously examined, may be examined at Lender's expense, once in each 12 month period (the first of which commences upon issuance of the first statement hereunder). Such statements may only be examined by a national firm of reputable CPA's, the selection of which is subject to WDP's approval not to be unreasonably withheld.WDP shall make available for examination

those books of account with respect to the distribution of the Picture which WDP customarily maintains at its Burbank-area offices. Each examination of any statement or statements for a particular accounting period

must be concluded within the earlier of six months following commencement or an aggregate of 30 examination days. A copy of the report of such examination shall be delivered by Lender to WDP when it is made available to Lender. Lender shall have no right to inspect or copy any tax return of WDP or any Subdistributor, Affiliate or any Related Party, or require the production of any such tax return or any information contained therein.

2.4. Withholdings

All amounts payable to Lender under this Agreement shall be subject to all present and future laws and regulations requiring the reporting, deduction or withholding of payments for taxes or otherwise. WDP shall have the right to make such deductions and withholdings, and the payment or reporting thereof to the governmental agency concerned in connection with WDP's good faith determination of such laws and regulations shall constitute payment hereunder to Lender. WDP shall not be liable to Lender for the making of such reports, deductions and/or withholdings or the payment thereof to the governmental agency concerned. In any such event, Lender shall have the sole responsibility for bringing and maintaining any claims against third parties regarding such reporting, deductions or withholdings.

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2.5. Address

All statements shall be deemed issued when mailed to Lender at the address for notices under this Agreement.

2.6. Reserves

WDP shall have the right from time to time and in its business judgment to establish and adjust reserves for any distribution costs, uncollected accounts or other items which WDP believes in its business judgment will be deductible from or credited against Defined Receipts hereunder. WDP agrees to liquidate reserves within an appropriate period of time within WDP's business judgment.

2.7. Tax Credits

WDP shall have the sole right to take whatever credits (including investment tax credits), deductions or other benefits that may be available throughout the universe, with respect to taxes and excises payable in any way in connection with the Picture or otherwise, without any accounting, credit or payment obligation to Lender.

3. ADDITIONAL TERMS

3.1. Arbitration

WDP and Lender agree that any dispute between them concerning the rights and obligations of WDP and Lender under this Exhibit CB, whether sounding in contract or.tort, may only be adjudicated in accordance with the following procedure:

A. Either (i) WDP and Lender shall mutually select an arbitrator, or (ii) if they cannot agree on such arbitrator, WDP and Lender shall each select one arbitrator and those two arbitrators shall then select a third arbitrator.

B. The parties shall arbitrate the dispute in accordance with the then-prevailingCommercial

Arbitration Rules of the American Arbitration Association (except to the extent expressly set forth elsewhere in this Exhibit CB) and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

3.2. No Representation

WDP has no obligation to distribute the Picture and if it does so, Lender acknowledges that WDP has no obligation to maximize Defined Receipts and has not made any representations with respect to the likelihood or amount of Defined Receipts, deferments, Contingent Proceeds or Contingent Bonus, if any, which will or may be derived from distribution of the Picture.

3.3. Control of Exploitation and Marketing

A.As between WDP and Lender, WDP shall have exclusive and perpetual control of the distribution, marketing, advertising, publicizing, exploitation, sale or other disposition of the Picture and may distribute, or withhold or withdraw the Picture from distribution at its sole discretion with respect to one or more territories or media. WDP may distribute the Picture with other pictures whether or not WDP has any interest in such other pictures.

B.For all purposes under this Exhibit CB, allocations of Defined Receipts, costs, rights and other matters relating to the Picture and other motion pictures shall be allocated by WDP in its business judgment and in accordance with WDP's prevailing business practice.

C. With respect to trailers and shorts exhibited with the Picture outside of the U.S. and Canada, Defined Receipts shall be reduced by 3% for trailers and 5% for shorts.

D.As between WDP and Lender, WDP owns all rights to the Picture and its Defined Receipts and Contingent Proceeds, including the right to encumber, transfer or dispose of them and Lender shall have no right, title or interest therein. Lender acknowledges that its sole right under this Exhibit is a contractual right to contingent compensation in the form of, and measured by, the Contingent Bonus Formula.

E.WDP, its agents and assigns, in its and their business judgment, shall be entitled to distribute the Picture on a percentage basis or make flat sales, make and cancel contracts, adjust and settle disputes, and give allowances and rebates to distributors, licensees, exhibitors or other Persons whether or not any such entity is owned, operated or controlled by WDP, Affiliates or Related Parties.

F.WDP shall have complete discretion in determining the extent, if any, to which it will audit or check payments or charges to WDP or assert claims with respect thereto.

G.Lender acknowledges that WDP is part of a large, diversified international group of affiliated companies engaged in a variety of business activities. WDP has informed Lender that it frequently enters into business transactions with Affiliates and Related Parties, and Lender acknowledges and agrees that WDP is entitled (but is not obligated) to, and may, in its sole discretion, enter into agreements or other arrangements with Affiliates and Related Parties in connection with any or all rights relating to the Picture, including, without limitation, all exploitation rights and all subsidiary, ancillary or other rights relating thereto (the "Exploitation Rights"). Lender hereby acknowledges and agrees that WDP is under no obligation, express or implied, to offer the Exploitation Rights or any part thereof to unaffiliated or unrelated third parties, whether in lieu of or in addition to offering such rights to Affiliates and Related Parties, or to otherwise seek or secure any business arrangements with any unaffiliated or unrelated third parties with respect thereto. Without limiting the generality of any other provision of the Agreement, Lender hereby waives any right to make any claim or seek any relief, whether at law or in equity (specifically including injunctive relief), asserting the existence and/or breach of any such express or implied obligation.

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In addition, Lender acknowledges and agrees that any agreement or other arrangement by WDP with an Affiliate or Related Party regarding the Exploitation Rights shall be conclusively presumed to be fair, reasonable and unobjectionable unless Lender shall establish that such agreement or other arrangement is on financial terms which, taken as a whole, are materially less favorable economically to WDP than the terms of Similar Transactions generally entered into by WDP with unaffiliated or unrelated third parties; or if there are no such unaffiliated or unrelated Similar Transactions, then by WDP with Affiliates or Related Parties (as applicable); or if there are no such Similar Transactions with Affiliates or Related Parties, then by Affiliates with any other Affiliate or Related Party (any such materially less favorable

agreement or arrangement being hereinafter referred to as a "Less Favorable Arrangement"). For purposes hereof, the term "Similar Transactions" shall mean agreements or other arrangements relating to motion pictures similar to the Picture (including WDP or non-WDP Pictures) which involve rights which are comparable to the Exploitation Rights or any relevant partthereof. WDP and Lender agree that in any arbitration between them under Paragraph 3.1 above, concerning whether WDP has entered into a Less Favorable Arrangement, the arbitrator(s) shall select an independent national accounting firm with entertainment accounting expertise who shall be present with the arbitrator(s) during the arbitration proceedings, and, on the basis of the evidence presented (including any expert testimony presented by the parties and admitted into evidence), shall provide a written report to the arbitrator(s) solely on the issue of whether there was a Less Favorable Transaction; and the above referenced records and report shall be kept in strictest confidence by the accounting firm and disclosed only to the arbitrator(s) who shall have authority, subject to a protective order maintaining the confidentiality of the information to the fullest extent permitted by law, to disclose to the parties only those relevant portions of the report indispensable to the adjudication of the issue. If pursuant to Paragraph 3.1above, the arbitrator(s) conclude(s) that WDP has entered into a Less Favorable Arrangement with an Affiliate or Related Party, Lender's sole and exclusive remedy shall be the right to receive an adjustment on the next accounting statement when due, including any additional payments that may be required, pursuant to Paragraph 2.1 hereof, modified to the extent required to render such Less Favorable Arrangement not a Less Favorable Arrangement.

3.4. Sales of All Rights

A. If after completion and delivery of the Picture to WDP, WDP sells all its right, title and interest in the Picture (other than to an Affiliate or through merger or consolidation), Lender may elect that:

1.The net sum received by WDP shall constitute Defined Receipts hereunder but further income of purchaser in connection with the Picture shall not be included in Defined Receipts, or,

2.The net sum received by WDP shall not be included in Defined Receipts and all receipts and expenses (other than the purchase price paid to WDP) of the purchaser relating to the Picture shall be treated for purposes of accounting to Lender, as though they were receipts and expenses of WDP, provided that upon assumption by purchaser of such obligation, the sale shall be considered a novation and WDP shall thereafter have no obligation of any kind to Lender.

B. Lender's election shall be made within 7 days after WDP notifies Lender in writing that it proposes to make such sale and identifies the purchaser and purchase price. If WDP does not receive written notice of Lender's election within 7 days after issuance of WDP's notice, then WDP shall have the right, but not the obligation, to make such election on Lender's behalf.

3.5. Assignment by Lender

A.Lender may assign Lender's right to receive its Contingent Bonus hereunder in whole or in part, at any time after the release of the Picture, subject to WDP's approval not to be unreasonably withheld and provided that such assignment does not subject WDP to any additional liability in connection with the assignment. However, in no event shall WDP be obligated to account to more than one Person. In any event, WDP's obligation to pay in accordance with any assignment, or designation of a disbursing agent, shall be conditioned on WDP's receipt of written notice thereof, in form satisfactory to WDP, and WDP's payment in accordance therewith shall satisfy WDP's payment obligations to Lender hereunder. Lender's right to examine WDP's books of account shall not be assignable without WDP's prior written consent and in any event shall be limited to one Person.

B.WDP shall have the right of first refusal with respect to any proposed assignment of Lender's right to receive Contingent Bonus hereunder upon equivalent terms (to the extent economically matchable) offered to Lender by a bona fide third party. Lender shall notify WDP of the terms of any such proposed assignment and WDP shall have 7 business days within which to elect to accept such terms. Lender shall make no change in such terms which are adverse to Lender's interest without giving WDP the opportunity to accept such changed terms. If WDP does not elect to accept such terms, then Lender shall be free to accept the proposed terms of assignment from such bona fide third party provided that if such proposed assignment is not concluded within 30 days following the expiration of the 7 business day period referred to above, WDP's right of first refusal under this Paragraph 3.5.B shall revive and shall apply to each subsequent offer received by Lender. This Paragraph 3.5.B shall not apply to family gifts.

3.6. General Terms

A.This Agreement is not for the benefit of any third party and shall not create a partnership, joint venture, agency, trust or fiduciary obligation between WDP and Lender or make Lender WDP's agent or create a relationship between WDP and Lender other than creditordebtor to the extent amounts are due hereunder.

B.WDP may, in its business judgment, commingle Contingent Proceeds or Defined Receipts with any other funds.

C.Nothing in this Exhibit CB or the Agreement shall give Lender the right to a lien on the Picture, the Contingent Proceeds or Defined Receipts.

D.Lender shall not be entitled to interest or any other gain which may accrue as a result of WDP's obligation to pay Lender's Contingent Bonus (or part thereof) even in the event of a dispute between Lender and WDP concerning the interpretation of this Exhibit CB, non-payment hereunder or otherwise.

E.Headings are for convenience only and are of no effect in construing the contents of this Agreement.

F.Lender waives any right at law or equity to revoke, terminate, diminish or enjoin any rights granted or acquired by W.DP hereunder by reason of a claimed nonpayment of monies allegedly due and payable hereunder, it being agreed that Lender's sole remedy for any such alleged non-payment shall be limited to a claim for any such money that is due and payable hereunder.

END OF EXHIBIT CB

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MUSIC PUBLISHING

1.   A royalty equal to fifteen percent (15%) of Music Publishing Contingent Proceeds ("MPCP") received by WDP from the exploitation of music publishing rights (i.e., mechanical reproduction, public performance, sheet music/folios and synchronization) to the original music and/or lyrics written specifically for and synchronized in the Picture as generally released (the "Music") shall be included in Defined Receipts.

2.   Music Publishing Defined Receipts ("MPDR") shall mean all monies actually received by WDP with respect to the Music excluding any advance, guarantee or minimum royalty payment received by WDP in connection with any subpublishing, collection, licensing or other agreement, unless such payment is specifically attributable to the Music.

3. MPCP shall mean MPDR less the following:

(a)   Royalties or other monies payable by WDP to the composer(s) and/or lyricist(s) of the Music.

(b)   All additional shares of MPDR payable by WDP to such composer(s), lyricist(s) and/or any other third party co-publishers, administrators or other participants.

(c)   Collection or other fees customarily and actually charged by The Harry Fox Agency, Inc., or any other collection agent. used by WDP.

(d)   Copyright registration fees and the costs of transcribing lead sheets.

(e) All other administration and exploitation expenses incurred with respect to the Music including,

without limitation, the costs of producing demonstration records, advertising and promotion expenses, costs or amounts payable to third-party publishers, co-publishers, administrators, publishing participants, subpublishers, licensees, trustees or collection agents, attorneys' and accountants' fees directly related to the Music, and damages and expenses incurred by reason of infringement claims, but excluding rents, overhead, salaries and other similar general expenses.

4. If Lender is entitled to receive a direct royalty or other type of payment with respect to the Music, then no portion of MPCP will be included in Defined Receipts.

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WALT DISNEY PICTURES

MUSIC PUBLISHING

SCHEDULE "A" TO EXHIBIT CB

1. SOUNDTRACK RECORDS: In the event WDP receives any royalties in respect of the soundtrack

album(s) ("Album") and/or other "phonorecords" (as that term is defined in the U.S. Copyright Act of 1976, 17

U.S.C. Sections101, et. seq.) derived from the soundtrack of the Picture ("Soundtrack Records"), then WDP

agrees that such royalties will be computed as follows for inclusion in Defined Receipts:

1.1 If an Affiliate distributes Soundtrack Records, then the royalty included in Defined Receipts shall equal 2'/4 % ("Royalty Rate") of the suggested retail list price (or the equivalent wholesale royalty) for net sales of the Album through normal retail channels in the United States ("USNRC Sales"). The Royalty Rate shall be otherwise defined, computed, reduced and accounted for on the same basis that the Affiliate customarily accounts to third party recipients including, without limitation, in respect of foreign sales, configurations variations, taxes, flat fee licensing, coupling, singles, free goods, packaging deductions, royalty base and all other reductions and deductions. Royalties hereunder shall only be included in Defined Receipts prospectively after the recoupment from the aggregate royalty payable (or accrued against advances or other charges) by WDP in respect of Soundtrack Records (including royalties payable to artists, producers, record companies, film personnel, music supervisors, musicians and the royalty payable pursuant to this Schedule B) of the following: (i) all recording costs of the master recordings embodied in Soundtrack Records; (ii) any re-recording costs of master recordings which are re-recorded for Soundtrack Records; and (iii) all costs of converting the master recordings in the Picture from motion picture recordings to phonograph record use (including, re-recording costs, reuse fees, editing, sweetening, etc.).

1.2 In the event that WDP receives its royalties from the exploitation of Soundtrack Records by a third party distributor, then the royalty to be included in Defined Receipts shall be the "Soundtrack Contingent Proceeds" (as defined below).

1.3. "Soundtrack Contingent Proceeds" shall mean all revenues received by WDP from the exploitation of Soundtrack Records, if any, as set forth in the applicable Soundtrack Records agreement after deduction of the following costs and third party royalties:

(a)A sum equivalent to the actual dollar amount (including any fixed cash amounts, advances-and/or royalties) actually paid to all third party performers and/or participants with respect to the music/soundtrack contained in Soundtrack Records and/or the Picture, including without limitation, cash payments and/or royalties payable to artists, producers, record companies, film personnel, music supervisors and musicians.

(b)A sum equivalent to all artwork costs for Soundtrack Records to the extent such artwork costs are paid by or charged to WDP, remixing and remastering costs, re-recording costs, reuse fees, license fees and similar costs attributable to the recording/production and/or licensing of the master recordings embodied on Soundtrack Records, except to the extent such costs are included in the negative cost of the Picture and to the extent such Soundtrack Records costs and fees have actually been incurred directly or indirectly by WDP.

(c)Any legal fees or related expenses incurred by WDP for outside legal counsel engaged at WDP's election to: document and/or negotiate the applicable Soundtrack Records agreement; in protecting or defending WDP's rights, privileges and benefits with respect to Soundtrack Records and/or any master recordings recorded/acquired for the Picture and/or Soundtrack Records; and/or in connection with any dispute involving any release/distribution agreement pertaining to Soundtrack Records.

(d)In the event the Soundtrack Records distributor pays WDP any nonreturnable advance against royalties, a reasonable reserve shall be applied towards (i) third party payments payable prior to the Soundtrack Record distributor's recoupment of such advance at the "net" artist rate; and (ii) unrecouped costs

incurred by WDP in respect of any Soundtrack Records and/or in excess of the budgeted cost of the music for the Picture.

1.4. Notwithstanding the foregoing, no royalties shall be included hereunder for any so-called "storyteller" or "read-along" phonorecords or for any phonorecords embodied in other merchandise or for any audiovisual devices now known or hereafter devised.

1.5.            If Lender is entitled to receive a direct royalty or other type of payment with respect to

Soundtrack Records, then no royalties from Soundtrack Records will be included in Defined Receipts.

2. MERCHANDISING/PUBLISHING. With respect to items of merchandising (including interactive games and other products and services) and book publication (including children's storytelling recordings, as distinguished from soundtrack records, but excluding souvenir programs and similar publications) based on the Picture, then:

2.1 For items sold by a licensee of WDP, the royalties WDP receives from such licensee shall be included in Defined Receipts of the Picture after first deducting (i) a percentage deduction of: fifty percent (50%), inclusive of subdistributor fees, for items sold in the U.S.; sixty-five percent (65%), inclusive of subdistributor fees, for items sold outside the U.S.; and fifteen percent (15%) plus any subdistributor's fees for any book novel; and (ii) out-of-pocket costs and royalties to third parties; or

2.2 For items are sold by WDP at the wholesale or retail level, at WDP's discretion, either: (i) an amount equal to seven (7%) of the wholesale price of such items sold by WDP at the wholesale level (less a reasonable allowance for returns); or (ii) an amount equal to seven percent (7%) of fifty percent (50%) of the gross retail revenues of such items sold by WDP at the retail level (less a reasonable allowance for returns) shall be included in Defined Receipts of the Picture after first deducting (a) a percentage deduction of fifty percent (50%) for items sold in the U.S.; sixty-five percent (65%) for items sold outside the U.S.; and fifteen percent (15%) with respect to any book novel; and (b) out-of pocket costs and royalties to third parties.

2.3In no event shall any items of merchandise be treated as falling under both provisions 2.1 or 2.2

above.

2.4 If Lender is entitled to receive a direct royalty or other type of payment with respect to the exercise of merchandising and book publication rights, then no royalties therefrom will be included in Defined Receipts.

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WALT DISNEY PICTURES

SOUNDTRACK RECORDS/MERCHANDISING/PUBLISHING

SCHEDULE "B" TO EXHIBIT CB

RIDER TO EXHIBIT "CB"

This Rider is attached to and made a part of Exhibit "CB" which is attached to the agreement ("Agreement") dated as of December 11, 2003 between WALT DISNEY PICTURES ("WDP") and PLATINUM STUDIOS LLC ("Owner") relating to the Picture identified therein.

1.With respect to Paragraph A of the Contingent Bonus Formula (FIRST DEDUCTION), the following shall be added thereto as the last sentence thereof: "As to any medium or means of exploitation not currently in general use, the applicable Percentage Deduction applied shall be consistent with that customarily applied by WDP in general with respect to such respective medium and/or means of exploitation."

2.With respect to Paragraph B. of the Contingent Bonus Formula (SECOND DEDUCTION), the following new sentences shall be added at the end thereof: "There shall be included in such 10% charge (and not separately deducted) the salaries and fees of any such advertising or marketing executives of WDP, but this is not to be construed as including other salaries or fees in said 10% charge, such as salaries of the publicist in charge of publicity for the Picture, and of regular employees of WDP rendering services in connection with field exploitation and salaries and fees of special publicists and advertising personnel. Also included in said 10% charge (and not separately deducted) are costs of utilities, local telephone, office copying, duplicating machines and other institutional costs at the office of WDP's theatrical film distributors."

3.With respect to Paragraph 1.1 .A.2. (DEFINITIONS, DEFINED RECEIPTS), Subdistributors hereunder shall be deemed to include WDP sales agents (if any).

4.With respect to Paragraph 1.1.A.5. (DEFINITIONS, DEFINED RECEIPTS), the words "excluding costs of WDP in-house counsel in connection with such copyright infringement claims" shall be inserted immediately after the word "costs" but within the parenthetical; and the words "unfair competition, trademark, and/or patent infringement and/or defamation claims" shall be inserted immediately after the word "infringers."

5.With respect to Paragraph 1.1 .A.8. (DEFINITIONS, DEFINED RECEIPTS), the words "and other receipts" shall be inserted immediately after the word "Royalties" in the first line.

6.With respect to Paragraph 1.1 .A. (DEFINITIONS, DEFINED RECEIPTS), the following are added as new Paragraphs 9. and 10. thereof: "9. Receipts from the distribution of trailers for the Picture; and 10. Receipts allocable to the Picture as received from the Copyright Tribunal, payable pursuant to Section III of the 1976 U.S. Copyright Act. There will be no Percentage Deduction applied to the receipts under this subparagraph 10."

7.With respect to Paragraph 1.1.B.3. (DEFINITIONS, DEFINED RECEIPTS EXCLUSIONS), after the word "WDP" in the seventh line, the words "for any purpose" shall be inserted; and the following shall be added at the end of the Paragraph, "or unless freely remittable to the U.S. in U.S. dollars. There shall be no unreasonable delay with respect to the conversion and remittance of foreign receipts hereunder."

8.With respect to Paragraph 1.1.B.5. (DEFINITIONS, DEFINED RECEIPTS EXCLUSIONS), the words "any charitable screening" shall be inserted immediately after the word "from" in the first line.

9.With respect to Paragraph 1.1.B.7. (DEFINITIONS, DEFINED RECEIPTS EXCLUSIONS), the words "or such other major items" shall be inserted immediately after the word "cars" in the fifth line.

10.With respect to Paragraph 1.3.A. (DEFINITIONS, DISTRIBUTION COSTS), the following is inserted immediately after the word "Subdistributor" in the third line: "solely to the extent WDP bears or otherwise accepts such Subdistributors costs and/or expenses."

11.With respect to Paragraph 1.3.A.1. (DEFINITIONS, DISTRIBUTION COSTS, AD AND PUBLICITY COSTS), the words "and reasonably," shall be inserted immediately after the word "appropriately" in the eleventh line.

12.With respect to Paragraph 1.3.A.1. (DEFINITIONS, DISTRIBUTION COSTS, AD AND PUBLICITY COSTS), the words "related to the Picture" shall be inserted immediately after the word "costs" in the twentieth line.

13.With respect to Paragraph 1.3.A.3 (DEFINITIONS, DISTRIBUTION COSTS, CHECKING), the following shall be added thereto: "provided such checking costs shall not exceed one percent (I%) of the worldwide Defined Receipts of the Picture."

14.With respect to Paragraph 1 .3.A.4. (DEFINITIONS, DISTRIBUTION COSTS, CLAIMS), the word "reasonable shall be inserted immediately after the word "and" in the first line.

15.With respect to Paragraph 1 .3,A.4. (DEFINITIONS, DISTRIBUTION COSTS, CLAIMS), the following shall be added thereto: "Any and all amounts deducted pursuant to this Paragraph 1 .3.A.4. must be reasonably allocated to the Picture. Additionally, there shall be no deduction for costs respecting any defense, settlement or judgment of anti-trust claims and no deduction for attorney fees with respect to any litigation matter between WDP and Owner that results in a final judgment on the merits in Owner's favor."

16.With respect to Paragraph 1 .3.A.5. (DEFINITIONS, DISTRIBUTION COSTS, COLLECTIONS), the word "outside" shall be inserted immediately after the word "including" in the first line and also immediately after the word "and" in the second line.

17.With respect to Paragraph 1 .3.A.5. (DEFINITIONS, DISTRIBUTION COSTS, COLLECTIONS), the following shall be added as the last sentence thereof: "The foregoing charges shall not be deemed to limit WDP's right to charge in-house legal production services as a Cost of Production."

18.With respect to Paragraph 1 .3.A.9. (DEFINITIONS, DISTRIBUTION COSTS, INSURANCE), the following sentence is added at the end thereof: "Any net insurance recovery for an item included in the Cost of Production, or as an item of Distribution Costs (as applicable) shall be applied to reduce the Cost of Production under Paragraph 1.5. or the Distribution Costs under Paragraph 1.3., as applicable. In the event WDP elects to self-insure and charges a premium as part of the Cost of Production, then upon the occurrence of an insurable event, WDP shall within a reasonable time reduce the Cost of Production of the Picture by an amount equal to an amount an insurance company charging a like premium would have paid to WDP with respect to such insurable event."

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19.           With respect to Paragraph 1.3.A.9. (DEFINITIONS, DISTRIBUTION COSTS,

INSURANCE), the following is added at the end thereof: "WDP agrees not to deduct as a distribution cost any reserve against a loss for which WDP has elected to self insure and has charged a self insurance premium equivalent as a distribution cost hereunder."

20.With respect to Paragraph 1.3.A. 10. (DEFINITIONS, DISTRIBUTION COSTS, TRADE DUES), the following sentence is added to the end of this paragraph: "Notwithstanding the foregoing, Defined Receipts shall not be reduced by more than: (1) $250,000 in the aggregate for domestic trade association fees payable by WDP to the M.P.A.A., A.M.P.T.P. and/or any similarly constituted or substitute person or successor organization to which WDP may now or hereafter belong on account of receipts or proceeds from the distribution of the Picture; and (2) $250,000 in the aggregate for foreign trade association fees payable by WDP to the M.P.E.A. and/or any successor organization to which WDP may now or hereafter belong on account of receipts or proceeds from the distribution of the Picture."

21.With respect to Paragraph 1.3.A.12. (DEFINITIONS, DISTRIBUTION COSTS, PRINTS), the following shall be added as the last sentences thereof: "Such costs shall not include the costs for the mastering, artwork or duplication of Video Devices of the Picture for commercial distribution. Also, the allocable and proportional share of any lab rebates for print costs (to the extent related to the Picture) shall be credited to lab print costs for the Picture, but Owner shall have no audit rights with respect to any such rebates."

22.With respect to Paragraph 1.3.A.13. (DEFINITIONS, DISTRIBUTION COSTS, TAXES), (a) the words "(appropriately allocated)" shall be inserted immediately after the word "nature" in the first line; and (b) the following shall be added as the last sentences thereof: "In the event of any tax refunds and/or in the event of any interest adjustment, Distribution Costs shall be credited (without any Percentage Deduction taken) with respect thereto. The words 'corporate income taxes' appearing herein shall mean taxes based on net income, so-called excess profits, and to the extent such are in the nature of taxes based on net income or so-called excess profit taxes -- franchise and corporation income taxes. Also to the extent any such taxes paid by WDP are deducted and subsequently refunded, an appropriate retroactive adjustment in Distribution Costs shall be made."

23.With respect to Paragraph 1.4 (DEFINITIONS, OTHER CONTINGENT AMOUNTS), the words "a financier which only provides financing for the Picture and does not provide producing or other services (e.g., Silver Screen Partners or other similar financiers) or" shall be inserted immediately prior to the word "Owner" in the sixth line.

24.With respect to Paragraph 1.4. (DEFINITIONS, OTHER CONTINGENT AMOUNTS), the following shall be added thereto as the last sentence: "Notwithstanding anything to the contrary hereinabove, Contingent Proceeds participations to others shall not be deducted in computing Owner's Contingent Bonus; provided, however, the foregoing shall not be deemed a limitation of WDP's right to reduce Owner (if Owner's Contingent Bonus is reducible), it being further provided that if Owner's Contingent Bonus is reducible by third party participations under the Agreement to which this Exhibit is attached, such third party participations which are used to reduce Owner's Contingent Bonus shall not also be deductible hereunder (i.e. no double reduction/deduction).

25.With respect to Paragraph 1.5. (DEFINITIONS, COST OF PRODUCTION), the words "(but not contingent bonuses or contingent proceeds deferments)" shall be inserted immediately after the word "Receipts" in the seventeenth line.

26.With respect to Paragraph 1.5. (DEFINITIONS, COST OF PRODUCTION), the following is added thereto: "No item of cost of production will be again charged as a distribution cost, or vice versa."

27.With respect to Paragraph 1.5. (DEFINITIONS, COST OF PRODUCTION), the figure of "$300,000" in the twenty-fifth line thereof is deleted therefrom and the figure "$400,000" is substituted therefore. and the following words shall be added after the word

"writing" in the thirty-fourth line thereof: "and losses to WDPc reimbursed by net insurance recoveries."

28.With respect to Paragraph 1 .6.H. 1. (DEFINITIONS, MISCELLANEOUS DEFINITIONS, TERRITORY), the following words shall be added thereto: "and all transportation companies, armed services or institutions flying the flag of the U.S."

29.With respect to Paragraph 1 .6.H.6. (DEFINITIONS, MISCELLANEOUS DEFINITIONS, TERRITORY), the words "such exhibitions shall occur" in the second and third lines shall be deleted and the words "agreements relating to such exhibition are entered into" shall be inserted in place thereof.

30.With respect to Paragraph 2.1. (ACCOUNTING, STATEMENTS), (a) solely in the event Owner is receiving Contingent Bonus payments hereunder within the first two years, then (i) the word "three" shall replace the word "two" in the third line; (ii) the word "year" shall be inserted immediately after the word "next" in the seventh line; (iii) the words "two years" shall be deleted therefrom; and (iv) and (b) "$500,000" shall be changed to "$750,000" in the sixteenth line.

31.With respect to Paragraph 2.1. (ACCOUNTING, STATEMENTS), the following is added immediately before the last sentence thereof: "but the foregoing shall not limit Owner's right to request a statement as provided in the first sentence of this paragraph 2.1." And the following is added to the last sentence thereof: "and if the Picture is broadcast on prime time network television in the U.S. or exhibited on a premium pay TV service or The Disney Channel or similar pay cable stations in the first free TV window, in the U.S., WDP shall account therefor by issuing a quarterly statement for one year starting on the accounting period within which the Picture has been so exhibited, accompanied by payment of the amount, if any, shown thereby to be due Owner."

32.With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY), the number "36" shall be substituted for the numeral "24" in each place therein; the word "issued" shall be deleted from the fifth line thereof and the word "received" substituted therefor; and the numeral "12" shall be substituted for the numeral "6" in the tenth line thereof.

33.With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY), the following shall be inserted immediately after the word "objection" in the eleventh line: "or if commenced in 6 months after completion of audit, if such audit is commenced prior to, but completed on a timely basis after said 36-month period."

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34.With respect to Paragraph 2.2. (ACCOUNTING, INCONTESTABILITY) the following sentence shall be inserted immediately after the sentence ending with the word "first" in the thirteenth line: "The foregoing period within which Owner may raise objections shall recommence, but only with respect to certain transactions or items included in previous statements that have been thereafter revised and/or corrected."

35.With respect to Paragraph 2.3. (ACCOUNTING, BOOKS), the word "national" is deleted from the seventh line.

36.            With respect to Paragraph 2.3. (ACCOUNTING, BOOKS), the word "issuance" is

deleted from the fifth line and the word "delivery" is substituted therefor, and the following sentence shall be inserted immediately after the word "withheld" in the ninth line: "The big five' accounting firms excluding Price Waterhouse Coopers are pre-approved by WDP subject to any conflict of interest that may exist or arise. Laventhol & Horwath or any successor-in-interest or any of its present or former principals or employees shall be deemed not approved by WDP so

long as they are representing Silver Screen Partners as auditors and/or if they previously represented Silver Screen as auditors on any WDP picture. In addition, any auditor(s) that represents Touchwood Pacific Partners I and/or Interscope Communications Inc./Nomura,

Babcock and Brown Unit One Film Partners and/or any other financier of the Picture and/or any other WDP picture shall be deemed not approved by WDP."

37.With respect to Paragraph 2.4. (ACCOUNTING, WITHHOLDINGS), the following shall be added at the end thereof: "Any moneys so recovered by Owner resulting from such claims or prosecutions shall be retained by Owner unless WDP has a prior existing claim or lien, provided however that nothing herein shall be deemed a waiver of either party's rights or remedies in law or equity.

38.With respect to Paragraph 2.6. (ACCOUNTING, RESERVES), the following shall be added thereto: "In any event, WDP shall liquidate any such reserves within 12 months after establishing the same unless there is any claim and/or litigation pending, in which case WDP may continue to maintain such reserves".

39.With respect to Paragraph 3.3.A. (MISCELLANEOUS, CONTROL OF EXPLOITATIONAND MARKETING) the following shall be added after the word "Owner" in the first line: "subject to Owner's consultation rights, if any, in connection therewith as more fully set forth in this Agreement,"

40.With respect to Paragraph 3.3.A. (MISCELLANEOUS, CONTROL OF EXPLOITATION AND MARKETING), the following shall be added following the last sentence thereof: "subject to, and except as provided to the contrary in the Agreement to which this Rider is attached. Notwithstanding the foregoing, there shall be no sub-distribution of the Picture in the U.S. or Canada unless WDP customarily uses sub-distributors for distribution in the U.S. and/or Canada and at that time with respect to substantially all other motion pictures during the same calendar year."

41.With respect to Paragraph 3.3.B. (ADDITIONAL TERMS, CONTROL OF EXPLOITATION AND MARKETING), the words "good faith" shall be inserted immediately after the word "business" in the fourth line.

42.With respect to Paragraph 3.3.C. (ADDITIONAL TERMS, CONTROL OF EXPLOITATION AND MARKETING), the words "trailers and" are deleted from the first line, and the words "for trailers and 5% " are deleted from the third line thereof.

43.With respect to Paragraph 3.4.A.1. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the word "sum" in the first line shall be changed to "sum(s)."

44.With respect to Paragraph 3.4.A.2. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the following shall be inserted immediately after the word "assumption" in the eighth line: "in writing and subject to full performance."

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45.With respect to Paragraph 3.4.B. (ADDITIONAL TERMS, SALES OF ALL RIGHTS), the words "14 business days" shall be substituted for the words "7 days" in the each place therein. In addition, the words "and other material terms" shall be inserted immediately after the word "price" in the fourth line.

46.With respect to Paragraph 3.5.A (MISCELLANEOUS, ASSIGNMENT BY OWNER), the words "completion of services" shall be inserted immediately after the word "after" in the third line; and the words "the release of the Picture" in the third line shall be deleted.

47.With respect to Paragraph 3.5.A. (ADDITIONAL TERMS, ASSIGNMENT BY OWNER), the following shall be added after the word "Picture" in the third line: "or to Artist's loan-out company or other closely held corporation and vice-versa; provided that, and subject to,all parties signing WDP's customary (i) Notice of Irrevocable Authority and (ii) Acknowledgment of Notice of Irrevocable Authority."

48.With respect to Paragraph 3.5.B. (ADDITIONAL TERMS, ASSIGNMENT BY OWNER), the word "material" shall be inserted before the word "change" in the eighth line thereof, and the following words shall be added to the last sentence thereof: "or a transfer to any corporation or entity wholly owned or controlled by Owner."

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EX-10.15

Exhibit 10.15

DIMENSION FILMS

375 Greenwich Street

New York, New York 10013

As of November 2, 2004 (Revised November 3, 2004)

Platinum Studios, LLC

9744 Wilshire Boulevard, Suite 400

Beverly Hills, California 90212

Attention: Scott Mitchell Rosenberg

Re:           "The Darkness" / Title and Option

Dear Scott:

This letter confirms the agreement reached between Dimension Films, a division of Miramax Film Corp. ("Dimension") and Platinum Studios, LLC ('Platinum") with regard to the comic book series entitled "the Darkness" (the "Property") published by Top Cow Productions, Inc. ("Top Cow"). The parties have agreed as follows:

1.           Condition Precedent: Dimension shall have no obligations hereunder unless and until Dimension is able to "clear" the title "The Darkness" (the "Title") for use as the title of a motion picture pursuant to the title registration and clearance procedures of the Motion Picture Association of America ("MPAA") and this Agreement is fully-executed by the parties.

2.           Title I Motion Picture Usage By Dimension: Subject to the satisfaction of the conditions precedent (as provided in Paragraph 1, above) ("Conditions Precedent"), Dimension shall pay to Platinum One Hundred Twenty-Five Thousand Dollars ($125,000) as full and complete consideration for an exclusive, irrevocable and perpetual license to utilize the Title in connection with the development, production, and distribution of Dimension's current film directed by Jaume Balaguero and starring Anna Paquin (the "Original Picture") and any number of derivative motion pictures, in any and all languages and/or media (e.g., theatrical and non-theatrical films, television series, movies-of-the-week, etc.), and in connection with the marketing and publicity thereof, throughout the universe. However, the granted license shall not allow Dimension to utilize the Title in connection with the exploitation of any rights that are ancillary to the development, production and distribution of motion pictures (e.g., merchandising, soundtrack, publishing, game and live stage productions, in any and all media now known or hereafter devised) without Dimension and Platinum reaching a separate agreement, if ever, with respect to any such use by Dimension in each instance. For the avoidance of doubt, Platinum has retained the right to utilize the Title, in its sole discretion, for everything other than motion pictures. Notwithstanding the foregoing, Platinum shall have the right to utilize the Title in connection with one or more motion pictures that commence production at least thirty-three (33) months ("Holdback Period") following the initial release of the Original Picture, unless Dimension releases a subsequent derivative production using the Title ("Subsequent Production") during the Holdback Period. If Dimension does timely release a Subsequent Production (i.e., before the expiration of the Holdback Period), then Platinum will remain unable to use the title for another Holdback Period (i.e., thirty-three (33) months from the initial release of the Subsequent Production) in the event that the Subsequent Production is theatrically released or for a reduced holdback period of twenty-five months if the Subsequent Production is a direct-to-video release. Furthermore, upon the commencement of the related Holdback Period (or reduced holdback period), Platinum will be paid an additional license fee in connection with such Subsequent Production in the amount of either (a) One Hundred Thousand Dollars ($100,000) if such Subsequent Production is a theatrical release or (b) Fifty Thousand Dollars ($50,000) if such Subsequent Production is a direct-to-

video release. The foregoing procedure (and additional license payments) will apply on a rolling basis to each Subsequent Production, if any, that Dimension releases prior to the expiration of the then applicable holdback periods (i.e., either thirty-three or twenty-five months, as applicable).

1

3.            Option of Property _byDimension: Subject to the satisfaction of the Conditions Precedent and the

payment to Platinum of the option fee (in accordance with the time frame provided in that certain [expired] First Look Agreement (the "First Look Agreement"] dated as of December 15, 1998 between Dimension and Platinum), Dimension shall have an exclusive, irrevocable twenty-four (24) month option, commencing as of the date the Conditions Precedent are satisfied, for Dimension to purchase those rights in and to the Property that Dimension has been entitled to purchase in connection with other previously optioned Platinum properties, which rights (the "Rights") are more fully described and set forth in

Paragraph 1 .A. of the First Look Agreement. In addition to the Rights, the balance of the terms and provisions applicable to Dimension's option and possible purchase of the Rights shall be as provided and set forth in Paragraphs 4 through 14 of the First Look Agreement, except as follows:

a.             Option Fee: Non-precedentially, the option fee for the Property shall be One Hundred Fifty Thousand Dollars ($150,000) in lieu of the higher option fees set forth in Paragraph 4.A. of the First Look Agreement.

b.            Inactivity / Deemed Abandonment: During the option period, in the event that Dimension is not actively developing (e.g., working with or engaging a writer, interviewing potential directors, etc.) the Property during any consecutive five (5) month period, then Platinum may give written notice to Dimension of Dimension's deemed abandonment and if Dimension does not resume active development of the Property within thirty (30) days following receipt of such notice, then the rights under option shall revert to Platinum, subject to Dimension's lien against the Property for the direct costs (other than the option fee) actually paid by Dimension during its development of the Property, plus interest calculated thereon at the prime rate plus 1%. Subject to the foregoing, Dimension, in its sole discretion shall determine when and if a writer will be engaged.

c.Scott Mitchell-Rosenberg/Development Fee: Scott Mitchell Rosenberg (or his designee) shall receive a development fee of Twenty Five Thousand Dollars ($25,000), payable concurrently with the option fee. The development fee payable hereunder will be in lieu of any development fee that otherwise might have been payable pursuant to Paragraph 6.B.(ii) of the First Look Agreement.

d.           Marc Silvestri / Executive Producer: In the event that Dimension exercises the option and produces a motion picture based on the Property, then in connection with each such motion picture produced by Dimension based on the Property, Marc Silvestri shall be (i) accorded credit as an additional executive producer, on-screen and in the billing block portion of paid advertising, and (ii) paid an

executive producer fee of Three Hundred Thousand Dollars ($300,000) on a customary 20/60/10/10 payment schedule. Platinum shall advise Dimension (in writing) of the specific requirements for

according such credit and paying such fee as provided in Platinum's previously executed agreement with Top Cow in connection with the Property (the "Top Cow Agreement").

e.Matt Hawkins / Co-Producer: In the event that Dimension exercises the option and produces a motion picture based on the Property, then Matt Hawkins shall be accorded credit as a co- producer, on-screen and in the billing block portion of paid advertising. Platinum shall advise Dimension (in writing) of the specific requirements for according such credit as provided in the Top Cow Agreement.

f.Other Platinum Obligations to To Cow: Platinum will advise Dimension, in writing, of any other obligations to Top Cow in connection with motion pictures based on the Property.

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4.           RepresentationslWarranties!Indemnities: Platinum hereby represents, warrants and undertakes: (i) that it has all rights necessary to enter into and perform this Agreement (i.e., Top Cow has assigned all necessary rights to Platinum pursuant to the Top Cow Agreement, which contains an express provision allowing Platinum to sub-license or assign its rights under the Top Cow Agreement, without restriction); (ii) that none of the rights herein licensed to Dimension have heretofore been sold, assigned, licensed or otherwise transferred (other than to Platinum) to any other person, firm or corporation by any instrument or agreement now valid or outstanding, nor have said rights been in any way encumbered, limited or diminished by any act or omission, and that said rights are free and clear of any and all liens or claims whatsoever; and (iii) that there are no contracts, agreements, assignments or instruments to which Platinum is a party which may affect the subject matter of this Agreement and the license and transfer to Dimension of the rights hereunder. Platinum will indemnify, defend and hold Dimension harmless from and against any and all claims and damages, including without limitation reasonable legal fees and expenses, of whatsoever kind and nature in connection with the Title, the Property and!or any of the rights licensed hereunder, arising out of any breach of any of Platinum's representations and warranties under this Agreement and!or in connection with any claims arising out of Platinum's exploitation of any of its reserved rights. Dimension represents and warrants that it has all rights necessary to enter into and perform this Agreement. Dimension will indemnify, defend and hold Platinum harmless from and against any and all claims and damages, including without limitation reasonable outside legal fees and expenses, of whatsoever kind and nature in connection with Dimension's exploitation of the rights granted to it hereunder, or arising out of any breach of any of Dimension's representations and warranties under this Agreement.

5.           Entire Agreement: With respect to the subject matter hereof, this Agreement is the entire agreement between the parties and may only be amended by a written document signed by all the parties hereto.

Please indicate your acceptance of and agreement with the foregoing by signing this Agreement in the space(s) provided hereinbelow.

Sincerely,

DIMENSION FILMS, a division of Miramax Film Corp.

By:  /s/ Michael E. Marshall

Its: Senior Vice President

Business Legal Affairs

ACCEPTED AND AGREED: PLATINUM STUDIOS, LLC

By:  /s/ Scott Mitchell Rosenberg

Its:  Chairman

By:  /s/ SCOTT MITCHELL ROSENBERG

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Top Cow acknowledges and consents to the foregoing agreement entered into between Dimension and Platinum with respect to the Title and the Property, accepts all of the terms and conditions contained therein (including, without limitation, the license of the Title and option and possible purchase of the Rights), and agrees to look solely to Platinum for any remuneration payable to Top Cow in connection therewith.

ACKNOWLEDGED, ACCEPTED AND AGREED:

TOP COW PRODUCTIONS, INC.

By:  /s/ Matt Hawkins

Its: President / COO

Authorized signatory of Top Cow

By:  /s/ Marc Silvestri

Matt Hawkins

The Darkness / Platinum and Top Cow

Re- Title & Option                                                                                                                 

v.2

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EX-10.16

Exhibit 10.16

As of December 15, 1998

 The following shall constitute the principal terms of a "first look" agreement between the parties identified below, it being the intent of the parties to enter into a more formal, long-form agreement with respect to the option, purchase and sale of any particular property (or properties) as contemplated below, which agreement shall include the terms and conditions provided for herein (where applicable), and such other terms and conditions as are customary for such agreements in the motion picture industry taking into account the stature of Platinum Studios, LLC ("Platinum") and Scott Mitchell Rosenberg therein (including, without limitation, accounting and audit rights provisions, late payment financing charges, related party transactions, etc.) to be negotiated in good faith between the parties.

1.             First Look.

A.             Dimension's Rights. For the Term hereof (as extended, if extended, as provided below), Miramax Film Corp. (including Dimension Films) (hereafter, collectively, "Dimension") shall have an exclusive "first look" and option to

purchase (for the option fees and purchase prices as set forth below) any and all properties, subject to Platinum's exclusions as set forth below, which are solely owned and controlled by Platinum (provided that if and to the extent any rights to any such properties are not solely owned and controlled by Platinum, then such rights therein as are solely owned and controlled by Platinum shall be subject to said "first look"), from the "Platinum Library" (as defined below), which Dimension desires to develop as a live-action feature film intended for initial theatrical release ("Feature Film") anywhere in the universe. Upon payment of the applicable portion of the purchase price (as provided in paragraph 4.B. (i) below, Platinum shall assign to Dimension (to the extent that said rights are owned and controlled by Platinum) the sole and exclusive (subject to paragraph C.(i) below) right under copyright and otherwise, to develop, produce, distribute, advertise, promote and otherwise exploit a Feature Film based on the property purchased hereunder, in any language, in perpetuity '(subject to Platinum's reserved rights and reversion right as set forth below), in any and all territories throughout the universe, and by any and all means and methods now or hereafter known (including, but not limited to, Theatrical, Non-Theatrical, Television, Home Video (encompassing videocassette, videodisc, all other forms of videograms whether now known or hereafter devised), any computer-assisted media (including, but not limited to, CD-ROM and similar disc systems (but not CD-I), DVD, Internet distribution, cable-modem and any other devices or methods now existing or hereafter devised) provided that the version of the Feature Film exploited via any such computer-assisted media must be essentially the same version exploited in the other media (i.e., in a consecutive linear format and not an interactive format) and certain allied and ancillary rights, including music, music publishing, screenplay publishing and soundtrack rights (subject to Platinum's reserved rights and administrative rights as set forth below) (collectively, the "Rights"). The Rights shall also include the right to produce and exploit Feature Film sequels, prequels and/or remakes (as such terms are customarily understood in the motion picture industry, i.e., with respect to sequels and/or prequels, Feature Films in which any of the characters appearing in the first Feature Film based on a property are depicted in new or different events than those in which such characters participated in such first Feature Film, and with respect to remakes, Feature Films in which the characters appearing in the first Feature Film based on a property are depicted as participating for the most part in the same events in which said characters participated in such First Feature Film) of any Feature Film produced pursuant hereto, subject to the payment of the applicable option fees and purchase prices and Platinum's reversion rights as set forth below.

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B.            First Look Submissions/Dimension Response Period.

  (i)              The Parties acknowledge that the "Platinum Library" consists of hundreds of comics, graphic novels, serializations, storybooks, etc. During the Term (as defined in paragraph 2.C below), Platinum shall select and present properties from the Platinum Library for Dimension's first look consideration hereunder, provided that Platinum shall present no less than twenty-five (25) such properties in each year of the Term. The first such presentation shall consist of no less than ten (10) such properties. Those properties in the Platinum Library not so selected and presented by Platinum shall not be presented (i.e., "pitched") by Platinum to third parties other - than talent (i.e., writers, directors and/or actors) during the Term, except that Platinum shall have the right to present to any third parties those properties that Platinum wishes to develop for initial release in television and/or as animation (as opposed to live-action) projects, provided that Platinum informs such parties of Dimension's Feature Film "first look" rights hereunder with respect thereto.

  (ii)'                Within ten (10) business days of Platinum's presentation of a Platinum property to Dimension as provided above (provided that the property in question is either an English-language property or an English-language translation thereof is provided to Dimension by Platinum, and, if not, then Dimension shall have twenty (20) business days to respond) (hereinafter, the "Dimension Response Period"), Dimension shall notify Platinum in writing as to whether or not it will option such property hereunder. Dimension's failure to provide any written notice to Platinum within the Dimension Response Period (or notice that it will not option such property) shall constitute a rejection of said property hereunder, giving Platinum the right to develop and/or produce the property elsewhere without any further obligation to Dimension; provided, however, that Platinum shall not submit more than ten (10) properties for Dimension's consideration hereunder within any consecutive ten (10) business day period (a "Bulk Submission"), unless the parties have mutually agreed in good faith on the time period in which Dimension must respond to the properties included in such Bulk Submission. If Dimension notifies Platinum in writing within the Dimension Response Period that it will option such property hereunder, Dimension shall be obligated to pay the applicable option fee as and when provided for in paragraph 4 below (i.e., upon Platinum's furnishing to Dimension of a short- form option agreement and Dimension's approval of chain of title for the applicable property, subject to the additional terms and conditions set forth in paragraph 4.A below), failing which Platinum shall have the right to develop and/or produce the property elsewhere without any further obligation to Dimension.

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C.             Platinum's Reserved Rights.

  (i)              Platinum hereby reserves (a) "television program rights" (defined as the right to develop, produce, distribute, advertise, promote and otherwise exploit any property as a television pilot, movie-of-the-week, special or episodic series for initial exhibition in any television medium, and not to be released theatrically unless the parties otherwise mutually agree in writing on the terms of such theatrical exploitation or unless and until Dimension's rights with respect to such property terminate or revert to Platinum as provided for herein), subject to paragraph C.(ii) and (iii) below, (b) all print publication rights in any and all properties other than screenplay

publishing, subject to paragraph C.(iv) below,(c) all interactive rights, (d) theme rights, (e) live theater and radio rights and (vi) all animation rights, subject to paragraph C.(iii) below. Any rights not specifically granted to Dimension herein are reserved to Platinum. Without limiting the generality of the foregoing, Dimension hereby acknowledges and agrees that it shall only acquire non-exclusive rights with respect to the characters appearing in any Feature Film produced pursuant hereto, and that Platinum shall have the right to use and exploit such characters (whether or not included in the original property) in connection with the exercise of any of Platinum's reserved (and/or reverted) rights hereunder, subject to paragraph C. (v) below. For the avoidance of doubt, if the property purchased by Dimension hereunder is a serial (e.g., a comic book or strip with more than one episode, volume or issue), Dimension's rights to the elements appearing in the property (e.g., characters, settings, devices, etc.) shall be negotiated in good faith as part of the long-form option agreement to be entered into with respect to such property pursuant hereto (i.e., the parties shall mutually agree on which elements of such property shall be exclusively granted to Dimension for purposes of exercising Dimension's Rights, subject always to Platinum's reserved rights as provided herein, and provided that in no event shall Dimension's Rights include any elements which appear in the serial after the date of Dimension's purchase of such property hereunder, all right, title and interest to which shall be reserved to Platinum). In the event that the parties are unable to so mutually agree with respect to such elements, then Platinum shall have the right to withdraw said property from this first look agreement, and Platinum shall have the right to develop and/or produce the property elsewhere without any further obligation to Dimension.

  (ii)                other than half-hour animated television series rights which are addressed in paragraph C.(iii) below, the television program rights to properties purchased by Dimension hereunder shall be subject to a first negotiation/first refusal right in favor of Dimension. For purposes hereof, said first negotiation/first refusal right shall mean the following: Platinum and Dimension shall negotiate in good faith for a period of ten (10) business days, and in the event that the parties cannot reach agreement within said period on the terms and conditions of Dimension's acquisition of any such television program rights, then Platinum may negotiate with third parties regarding such television program rights, but before Platinum may enter into any agreement with respect thereto on financial terms which are (on the whole) equal or less favorable to Platinum than the terms last offered by Dimension, Platinum shall inform Dimension in writing of the principal terms of the less favorable offer that Platinum is prepared to accept ("Acceptable offer"), and Dimension shall have the option ("Acceptable Offer Matching Right") to acquire the television program rights which are the subject of said Acceptable Offer under the same terms and - conditions set forth in the Acceptable Offer (provided that Dimension shall not have to match non-financial terms which other third parties cannot match), provided that Dimension must notify Platinum in writing of its election to exercise such Acceptable Offer Matching Right as aforesaid within five (5) business days of its receipt of the terms of the applicable Acceptable offer; otherwise, Platinum shall be free to accept the Acceptable Offer. In the event that Platinum does conclude an agreement for the disposition of such television program rights with a third party pursuant to the foregoing, such agreement must provide for an 18 month holdback period on the exploitation of said rights commencing from the earlier of (a) the date of the actual initial release of the Dimension Feature Film (in any medium) and (b) the date which is two (2) years from the date of the payment by Dimension of the option fee for the applicable property hereunder.

  (iii)all half-hour animated television series rights to the properties in the Platinum Library are reserved to Platinum, and Platinum shall be free to exploit same in Platinum's sole discretion without any obligation to Dimension whatsoever. All other animation rights to any properties purchased by Dimension hereunder shall be "frozen" and neither party shall have the right to exploit same unless the parties mutually agree otherwise in writing.

  (iv)the novelization rights with respect to any Feature Film produced pursuant hereto shall be subject to a first negotiation/first refusal right in favor of Dimension on the same terms and conditions as set forth in paragraph C.(ii) above.

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  (v)        If, in connection with the development and/or production of a property after the option and/or acquisition thereof by Dimension hereunder, a new character is created by or at the direction of Dimension and/or any xecutives and/or employees of Dimension (as opposed to an "evolution" of an original character (or of a group or "race" of characters (e.g., "Klingons")), such as a reverse gender or reverse race character or a character that is created with a reasonably discernable link between the original character and the evolved character (including, without limitation, and for purposes of illustration only, a character is "aged", is given a new power or ability, is introduced as related to or a part of a family or recognized group or race of characters (e.g., "Supergirl", "Batgirl", etc.), the character's name reuses a name or part of a name such that it appears to be derived from or connected with the original character (e.g., the "Franklin Richards" character, which is introduced as the son of Reed and Sue Richards of the "Fantastic Four")), and as opposed to a character created by or at the direction of Platinum and/or any executives and/or employees of Platinum ("New Dimension-created Character"), then Dimension shall own  the rights to said character (subject to the other terms and conditions of this agreement), provided that Platinum shall have the right to utilize any such New Dimension-created Character(s) in connection with its exercise/exploitation of its reserved rights hereunder, subject to the following: (i) with respect to the merchandising of said character, the terms of paragraph 9 below shall apply, (ii) with respect to Platinum's exercise of reserved publishing rights and interactive rights (including video game rights), if the exercise thereof includes said New Dimension-created Character, Dimension shall be entitled to an amount equal to ten percent (10%) of all non-refundable, non-returnable income received by Platinum from the exploitation of such rights (Platinum Publishing/Interactive Gross Receipts), after Platinum's deduction "off-the-top" from said Platinum Publishing/Interactive Gross Receipts of a 25% distribution fee and recoupment of all of Platinum's direct, out-of-pocket costs and expenses incurred in connection therewith, and (iii) with respect to Platinum's exercise of any other reserved rights to the extent such exercise includes said New Dimension-created Character, Dimension shall be entitled to an amount equal to ten percent (10%) of all non-refundable, non-returnable net income received by Platinum from the exploitation of such rights (i.e., after recoupment by Platinum of any direct, out-of-pocket cost and expenses incurred, and/or direct, out-of-pocket investments made, by Platinum in connection therewith). Further, if and to the extent any new non-character elements (such as a setting, a device, etc.) created by or at the direction of Dimension and/or any executives and/or employees of Dimension (as opposed to by or at the direction of Platinum and/or any executives and/or employees of Platinum) have identifiably unique properties or characteristics and names (e.g., the "Starship Enterprise," the "neuralizer" used in "Men in Black"), then such non-character elements shall be treated as a New Dimension-created Character for all purposes hereof, provided that new storylines and plots created by or at the direction of Dimension and/or any executives and/or employees of Dimension shall only receive such treatment if and to the extent that Platinum's exploitation thereof would otherwise constitute an infringement of Dimension's rights under applicable copyright law. For the avoidance of doubt, for purposes of determining whether a new character or a new non- character element has been created by or at the direction of Dimension and/or any executives and/or employees of Dimension for purposes of this paragraph only, the existence of a "work-for- hire" or similar agreement between Dimension and any writer/creator shall not be dispositive, but Platinum shall have the burden of furnishing written evidence that such new character or new non-character element was created by or at the direction of Platinum and/or executives and/or employees of Platinum (e.g., correspondence between a Platinum executive and the writer/creator in question reflecting Platinum's instructions to said writer/creator).

   (vi)            Notwithstanding anything to the contrary herein, in any and all events, Platinum shall have the right to use the title(s) of, and/or any logos (other than credit logos) created in connection with, any Feature Film, in connection with the exploitation of its reserved rights hereunder, without any compensation being payable to Dimension therefor.

D. Platinum's Excluded Properties. The following properties and/or rights shall not be subject to Dimension's "first look" hereunder:

     (i)         any property which Platinum has developed, is developing or hereafter develops at its U.S. (currently Beverly Hills) offices, specifically including, without limitation, any property created by or with Scott Mitchell Rosenberg (e.g., "Cowboy & Aliens", "Ghosting", etc.).

     (ii)any rights in any properties previously sold by Platinum to third parties (e.g., if Platinum reserved sequel, remake and/or other rights in connection with the sale of "Cowboys and Aliens", such rights are not subject to the first look hereunder).

     (iii)any property in which Platinum obtains any rights as a result of a pending settlement with Crossroads Entertainment (and certain affiliated companies) and Rob Liefeld and certain affiliated companies.

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     (iv)The property currently entitled "Martin Y".

  (v)Up to eight (8) properties in each of the Initial Term, the Second Term and the Third Term (all as defined below, and if and to the extent applicable) which Platinum may designate, in its sole discretion, as a property to be developed as a high-budget motion picture (i.e., with a Platinum proposed production budget of at least $30 Million Dollars) ("High Budget Project(s)"), provided that Platinum shall first present such High Budget Project(s) to Dimension hereunder with Platinum's rough budget proposal (which shall be confirmed in writing by Platinum promptly after such presentation), and the following shall apply:

   (a)if Dimension is not prepared to contractually commit to acquiring/developing/producing the applicable High Budget Project in accordance with Platinum's budget proposal (or at a higher budget) within the Dimension Response Period, then Platinum shall be free to develop, produce and exploit said High Budget Project(s) with one or more third parties without any further obligation to Dimension whatsoever.

   (b)if Dimension is prepared to contractually commit to acquiring/developing/producing the applicable High Budget Project in accordance with Platinum's budget proposal (or at a higher budget) within the Dimension Response Period, the parties will negotiate in good faith the terms and conditions thereof for a period of- 10 business days (which 10 business day negotiation period shall commence no later than the last day of the Dimension Response Period). If the parties cannot agree on such terms and conditions within said 10 business days, then Platinum shall be free to develop, produce and exploit said High Budget Project(s) with one or more third parties, provided that if Platinum is willing to accept financial terms which on the whole are equal to or less favorable to Platinum than those last offered by Dimension, Platinum shall offer Dimension the right to match such equal or less favorable offer.

  (vi)                any properties acquired by Platinum after the date set forth above, unless Dimension is prepared to contractually commit to develop and produce said properties as an English-language production budgeted between $14 and $30 Million and intended for general theatrical release in the U.S. within the Dimension Response Period and to recognize and comply with any applicable third party entitlements or requirements of which Platinum has notified Dimension in writing (provided that such properties shall otherwise be subject to the terms and conditions of paragraph 1 .B.(i) above).

2. Term.

 A.One year from the date set forth above ("Initial Term"). The parties agree that Dimension shall option at least one (1) property hereunder within the first ninety (90) days of the Initial Term hereunder, subject to Platinum's making available to Dimension, upon commencement of the Initial Term hereunder, a minimum of ten (10) properties which are available for option under the terms hereof. If at the conclusion of such ninety (90) day period, Dimension has not optioned a Platinum property hereunder, this agreement shall be automatically terminated without the need for any further action on the part of Platinum or Dimension.

 B.In the event that Dimension shall have either:

  (i)optioned three (3) properties from Platinum hereunder during the Initial Term, or

  (ii)commenced principal photography (subject to events of force majeure as commonly understood in the motion picture industry or cast or director unavailability, but only if such persons have previously been made "pay-or-play" in writing), and provided that commencement of principal photography of any Feature Film shall only count for purposes hereof if any failure to complete production of the Feature Film in question is due only to events beyond the reasonable control of Dimension, of at least one Feature Film based on a purchased property hereunder during the Initial Term, then the Initial Term shall automatically be extended for an additional and consecutive twelve (12) month period ("Second Term") under the same terms and conditions hereof. If the requirements for such automatic extension of the Initial Term are not fully satisfied, then this agreement shall automatically expire at the end of the Initial Term without the need for any further action on the part of Platinum or Dimension, provided that any payments accrued and not yet paid in full to Platinum hereunder shall remain payable by Dimension. In the event that this agreement is extended for such Second Term, but Dimension fails to option at least one (1) Platinum property hereunder within the first ninety (90) days of such Second Term, then this agreement shall be automatically terminated without the need for any further action on the part of Platinum or Dimension, provided that any payments accrued and not yet paid in full to Platinum hereunder shall remain payable by Dimension.

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 C.             In the event that Dimension shall have (a) commenced principal photography during the Second Term (subject to events of force majeure as commonly understood in the motion picture industry or cast or director unavailability, but only if such persons have previously been made "pay-or-play" in writing, and provided that commencement of principal photography of any Feature Film shall only count for purposes hereof if any failure to complete production of the film Feature Film in question is due only to events beyond the reasonable control of Dimension, of at least two (2) Feature Films based on properties purchased hereunder, and (b) theatrically released during the Initial Term and/or Second Term at least two (2) Feature Films produced under this agreement on a minimum of twenty-five (25) screens (for each such Feature Film) with respect to a foreign-language Feature Film, and on a minimum of two hundred (200) screens in the United States with respect to an English-language Feature Film, then the Second Term shall automatically be extended for an additional and consecutive twelve (12) month period ("Third Term") under the same terms and conditions hereof. If the requirements for such automatic extension of the Second Term are not fully satisfied, then this agreement shall automatically expire at the end of the Second Term without the need for any further action on the part of Platinum or Dimension, provided that any payments accrued and not yet paid in full to Platinum hereunder shall remain payable by Dimension. In the event that this agreement is extended for such Third Term, but Dimension fails to option at least one (1) Platinum property hereunder within the first ninety (90) days of such Third Term, then this agreement shall be automatically terminated without the need for any further action on the part of Platinum or Dimension, provided that any payments accrued and not yet paid in full to Platinum hereunder shall remain payable by Dimension. The Initial Term, if and to the extent extended to a Second Term and a Third Term as provided herein, is sometimes referred to herein as the "Term".

3. Overhead and Development Funds.

 A.During the Initial Term, Dimension shall provide Platinum with a non-accountable, non-recoupable (except as provided in paragraphs 3.C and 5.A below) development fund ("Development Fund") of $150,000. The Development Fund shall be payable to Platinum in equal monthly installments, subject to the terms of paragraph 2 above. Platinum shall have the right to expend the Development Fund in connection with the acquisition and development of properties as Platinum shall determine in its sole discretion.

 B.During the Initial Term, Dimension shall provide Platinum with a non-accountable, non-recoupable (except as provided in paragraph 3 .C below) contribution to Platinum's general overhead expenses ("Overhead Fund") of $250,000. The Overhead Fund shall be payable in equal monthly installments (subject to the terms of paragraph 2 above), and shall be expended by Platinum in its sole discretion, provided that expenditures incurred by Platinum in connection with any specific property after Dimension has optioned same hereunder shall be reimbursed by Dimension to Platinum upon submission of Platinum's invoices and accompanying "back-up" documentation therefor and are not intended to be included in said overhead Fund.

 C.            Notwithstanding that the Development and Overhead Funds are not recoupable from any financial entitlements of Platinum hereunder, Dimension shall have the right to include 100% thereof in the Negative Cost of the first Feature Film produced pursuant hereto, and thereafter shall apportion such Development and Overhead Funds equally among the Negative Cost of all Feature Films produced pursuant hereto (e.g., if two such Feature Films are produced, then 50% thereof shall be included in the Negative Cost of each such Feature Film, and so on).

4.            Option/Purchase Prices.

 A.            In consideration for a two (2) year option to acquire the Rights to each property which Dimension elects to option in the Initial Term hereunder, the option fee shall be $300,000, payable upon execution of a mutually approved short- form-option agreement and Dimension's approval of chain of title (provided that   (a) such approval may not be unreasonably withheld,    (b) if no written objection thereto is furnished by Dimension to Platinum within seven (7) business days of Platinum's submission thereof to a Dimension business affairs executive, said chain of title shall be deemed accepted by Dimension for all purposes hereof, and (c) if any such written objection is so timely furnished by Dimension and Platinum shall not be able to cure the deficiency specified by Dimension to Dimension's reasonable satisfaction within fifteen (15) business days of Platinum's receipt of said notice, Platinum shall have the right to exclude said property front this agreement and to offer same to third parties, provided that (i) Platinum must first notify Dimension in writing of its intent to do so, and Dimension shall have a three (3) business day period from its receipt of said notification to accept said chain of title for purposes hereof and to pay the applicable option fee, and (ii) if the chain of title that Platinum intends to submit to a third party is materially different from that previously submitted to Dimension, Platinum must first submit the materially different chain of title to Dimension, which submission shall be treated in the same manner as an initial submission of chain of title and all of the foregoing provisions shall apply with respect to such second submission, except that Dimension shall only have five (5) business days to review same). The applicable option fee for the Rights to properties optioned in the Second Term if any, of the agreement shall be $400,000 and the option fee for properties optioned in the Third Term, if any, of the agreement shall be $550,000 (all payable as provided above).

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 B.             In consideration for the acquisition of the Rights to each property which Dimension elects to purchase hereunder, Platinum shall be paid an amount equal to five percent (5%) of the amount by which such Feature Film's final direct negative cost (excluding only overhead, third party bond fees (if any), unspent contingency and direct, out-of-pocket financing costs, but inclusive of any fixed, as opposed to contingent, deferments) ("Negative Cost"), as certified to Platinum by the completion guarantor for the applicable Feature Film, or if there is no such Guarantor, by an appropriate executive of Dimension (provided that in all events Platinum shall have customary audit rights with respect to such Negative Cost) exceeds $2,000,000 (no cap shall exist with respect to the foregoing), which amount shall be payable to Platinum as follows:

  (i)one half of said sum shall be calculated based on the "all-in" final production budget ("Budget") approved by Dimension for such Feature Film (which Budget shall be furnished to Platinum no later than upon commencement of principal photography thereof), and paid to Platinum no later than upon commencement of principal photography of said Feature Film, and the Rights to the applicable property shall then vest with Dimension only upon the payment to Platinum of such amount, and

  (ii)the balance of said sum shall be calculated based on the Negative Cost and paid to Platinum within fifteen (15) business days of Platinum's receipt of the Negative Cost certification for such Feature Film, which certification shall be provided to Platinum within thirty (30) days of complete. delivery to Dimension of said Feature Film, and in any and all events such certification must be provided and the applicable payment made to Platinum prior to the earlier of (a) the date of the initial release or screening of such Feature Film (including in film festivals and press screenings) in any media, and (b) the date which is the two year anniversary of the commencement of principal photography of such Feature Film.

 C.             The option fees with respect to the Rights to any Feature Film sequels, prequels and/or remakes to any of the properties purchased hereunder shall be 150% of the applicable option fees payable for the original property, which option fees shall be payable to Platinum no later than commencement of principal photography of the sequel, prequel and/or remake in question, subject to paragraph 5.B below. The purchase price for the Rights to such Feature Film sequels, prequels and/or remakes shall be calculated and paid in the same manner as the purchase

price for the first Feature Film as provided in paragraph 4.B above.

5. Reversion.

 A.In the event that Dimension has optioned a Platinum property hereunder and not commenced principal photography of a Feature Film based thereon within the two (2) year period following the option thereof (subject to events of force maj eure as commonly understood in the motion picture industry or cast or director unavailability, but only if such persons have previously been made "pay-or-play" in writing, and provided, however, that commencement of principal photography of any Feature Film shall only count for purposes hereof if any failure to complete production of the Feature Film in question is due only to events beyond the reasonable control of Dimension), then the Rights to such property shall revert to Platinum, subject to a lien in Dimension's favor in an amount equal to that portion of the Development Fund (if any) which was used by Platinum to acquire/develop the property in question, plus interest thereon in the amount of prime plus 1 %, to be repaid to Dimension upon set-up elsewhere, but in no event later than commencement of principal photography of any production based on such property set up elsewhere by Platinum. The amount reimbursable to Dimension pursuant to the foregoing shall also be subject to increase if and to the extent that Platinum also wishes to acquire the rights to any materials created by Dimension in connection with Dimension's development of such property, by an amount equal to Dimension's direct, out-of-pocket development costs incurred in connection with the creation of such materials plus interest thereon in the amount of prime plus 1% (to be repaid on the same basis as provided in the foregoing sentence).

 B.dimension’s right to produce a Feature Film sequel (or prequel) and/or remake to any Feature Film produced pursuant hereto will revert to Platinum with no further obligation to Dimension if Dimension has not paid the option fee set forth above for such Feature Film sequel (or prequel) Rights within the time period ending on the earlier of (i) the date which is six (6) months after the date of the initial release of the prior Feature Film upon which such sequel, prequel or remake is to be based ("Prior Feature Film") in any media, and (ii) the date which is eighteen (18) months after the start of principal photography of such Prior Feature Film. Once the Rights to any such Feature Film sequel, prequel and/or remake have been so optioned, if Dimension has not commenced principal photography of a Feature Film based thereon within the two (2) year period following such option (subject to events of force majeure as commonly understood in the motion picture industry or cast or director unavailability, but only if such persons have previously been made "pay-or-play" in writing, and provided, however, that commencement of principal photography of any Feature Film shall only count for purposes hereof if any failure to complete production of the Feature Film in question is due only to events beyond the reasonable control of Dimension), then such Rights shall revert to Platinum, subject to the lien described in paragraph 5 .A above. For the avoidance of doubt, if such sequel, prequel and/or remake rights revert to Platinum as provided for herein, this shall mean that all rights in and to all elements (including, without limitation, characters, settings, devices, titles, etc.) of the Prior Feature Film(s) produced by (or on behalf of) Dimension shall revert to Platinum and Platinum shall have the right to exploit same without any further obligation to Dimension and Dimension shall no longer have any interest in said rights except in connection with Dimension's continuing exploitation of its Rights to such theretofore produced Feature Films.

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6. Additional Compensation. With respect to each Feature Film produced pursuant hereto, the following additional compensation shall be paid to Platinum or Scott Mitchell Rosenberg, as applicable:

 A. Platinum.

  (i)              Contingent compensation in an amount equal to ten percent (10%) of adjusted gross receipts received by or credited to Dimension from the exploitation of such Feature Film in any and all media and any sequels and prequels thereto (not cross-collateralized among any such Feature Films), with such adjusted gross receipts to be defined, calculated, accounted for and paid pursuant to a definition to be negotiated in good faith between the parties ("AGR"), from all sources throughout the world after "cash breakeven" (as such term is customarily understood in the motion picture industry) with an “across-the- percent (12.5%) of AGR after "cash breakeven" with an "across- the-board" 25% distribution fee, and escalating further to fifteen percent (15%) of AGR at "initial actual breakeven" (as such term is customarily understood in the motion picture industry), provided that video receipts shall be calculated as follows:

   (a)on the basis of a 25% royalty for rental sales and 12-1/2% for sell-through sales (it being agreed that video royalties shall be based on the wholesale price and no distribution fee or costs or expenses shall be deductible therefrom); and/or

   (b)in the event that video exploitation is done on a "rentrak" or other rental revenue sharing basis, then 25% of Dimension's gross receipts therefrom (without any fees or costs whatsoever being deductible) shall also be included in gross receipts.

  (ii)                In connection with each Feature Film produced pursuant hereto, Platinum shall receive the following bonus payments, if any, which bonus payments shall be applicable against the Contingent Compensation payable pursuant to subparagraph 6.A(i) above:

   (a)With respect to a U.S. Feature Film (as defined below), bonus payments of (a) $100,000 if and when cumulative box office for the U.S. territory as reported by EDI reaches Fifty Million Dollars, (b) $100,000 if and when cumulative box office for the rest of the world exclusive of the U.S. territory (the "Foreign Territory") as reported by EDI, if readily available (or if such EDI statistics are not readily available, then as reported by Daily Variety), reaches Fifty Million Dollars, (c) $250,000 if and when cumulative box office for the U.S. territory as reported by EDI reaches Seventy-Five Million Dollars, (d) $150,000 if and when cumulative box office for the Foreign Territory as reported by EDI, if readily available (or if such EDI statistics are not readily available, then as reported by Daily Variety), reaches Seventy-Five Million Dollars, (e) $250,000 if and when cumulative box office for the U.S. territory as reported by EDI reaches one Hundred Million Dollars and (f) $250,000 if and when cumulative box office for the Foreign Territory as reported by EDI, if readily available (or if such EDI statistics are not readily available, then as reported by Daily Variety), reaches one Hundred Million Dollars.

   (b)With respect to a Foreign Feature Film (as defined below), bonus payments of $100,000 each if and when (a) cumulative box office for the Foreign Territory as reported by EDI, if readily available (or if such EDI statistics are not readily available, then as reported by Daily Variety),reaches an amount equal to four (4) times the Negative Cost of such Feature Film, (b) cumulative box office for the U.S. territory as reported by EDI reaches an amount equal to four (4) times the aggregate of (i) the direct, out-of-pocket print and advertising costs (if any) incurred by Dimension solely for the purposes of distributing such Foreign Feature Film in the U.S. territory, plus (ii) any direct, out-of-pocket dubbing, voice-over and/or subtitling costs (if any) incurred by Dimension solely for the purpose of distributing such Foreign Feature Film in the U.S. territory, plus (iii) any direct, out-of-pocket production costs (if any) incurred by Dimension solely for the purpose of distributing such Foreign Feature Film in the U.S. territory, but only to the extent such production costs are in addition to, and do not constitute part of, the Negative Cost of such Foreign Feature Film ( (i) , (ii) and (iii) being collectively referred to hereinafter as "FFF U.S. Distribution Costs"), (c) cumulative box office for the Foreign, Territory as reported by EDI, if readily during pre-production of the applicable Feature Film and ninety percent (90%) thereof on a weekly basis during principal photography of the applicable Feature Film (provided that such amounts shall be deemed to constitute an advance against a customary 20/60/10/10 payment schedule)'. To-the extent that the Negative Cost of such Feature Film is greater than the Budget, the payment of the balance of such executive producer/producer fee shall be paid to Platinum pursuant to the terms of paragraph 4.B. (ii) above (i.e., within fifteen (15) business days of Platinum's receipt of the Negative Cost certification for the applicable Feature Film). producer/producer fee payable as provided in subparagraph B.(i) available (or if such EDI statistics are not readily available, then as reported by Daily Variety), reaches an amount equal to five (5) times the Negative Cost of such Feature Film, (d) cumulative box office for the U.S. as reported by EDI reaches an amount equal to five (5) times the FFF U.S. Distribution Costs for such Feature Film, (e) cumulative box office for the Foreign Territory as reported by EDI, if readily available (or if such EDI statistics are not readily available, then as reported by Daily Variety), reaches an amount equal to five and one-half (5.5) times the Negative Cost of such Feature Film, and (f) cumulative box office for the U. S. as reported by EDI reaches an amount equal to five and one-half (5.5) times the FFF U.S. Distribution Costs for such Feature Film.

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   (c)             With respect to all Feature Films, Dimension shall furnish the EDI and Daily Variety box office reports to Platinum via telecopier within three (3) business days of Dimension's receipt of same.

 B. Scott Mitchell Rosenberg.

  (i)             Scott Mitchell Rosenberg shall be entitled to an executive producer/producer fee in an amount equal to five percent (5%) of such Feature Film's Negative Cost (as certified and subject to Platinum's audit rights as provided above), with a compensation floor of $300,000 and a ceiling of $750,000, provided that if the Budget for the Feature Film exceeds $30 Million, then said ceiling shall be the greater of (a) $750,000  and (b) an amount equal to Scott Mitchell Rosenberg's then- prevailing producer fee "quote" (as such term is commonly understood in the U.S. motion picture industry). Said fee shall be initially calculated based on the Budget of the applicable Feature Film, and, based on such initial calculation, such amount shall be payable ten percent (10%) thereof on a weekly basis during pre-production of the applicable Feature Film and ninety percent    (90%) thereof on a weekly basis during principal photography of the applicable Feature Film    (provided that such amounts shall be deemed to constitute an advance against a customary 20/60/10/10 payment schedule)'. To-the extent that the Negative Cost of such Feature Film is greater than the Budget, the payment of the balance of such executive producer/producer fee shall be paid to Platinum pursuant to the terms of paragraph 4.B.   (ii) above (i.e., within fifteen (15) business days of Platinum's receipt of the Negative Cost certification for the applicable Feature Film).

  (ii)               Scott Mitchell Rosenberg shall also be paid an executive producer/producer development fee ("Development Fee"), concurrently with the payment of the option fee for a Feature Film as provided in paragraph 4.A above, which Development Fee shall be applicable against the executive producer/producer fee payable as provided in subparagraph B.(i)  above, in an amount equal to $12,500 with respect to the fourth Feature Film produced pursuant hereto, and in an amount equal to $25,000 with respect to the fifth such Feature Film and all Feature Films thereafter produced pursuant hereto.

7.            Minimum Budget. With respect to properties acquired by Dimension hereunder, if Dimension produces an English-language Feature Film based thereon (except for an English-language production which takes place in the United Kingdom with predominantly U.K. actors) ("U.S. Feature Film"), the Budget must be at least $14 Million. If Dimension produces a foreign-language Feature Film based thereon, or, an English-language Feature Film which takes place in the United Kingdom with predominantly U.K. actors ("Foreign Feature Film"), there shall be no minimum production budget. Dimension acknowledges that the foregoing is of the essence and a material term of this agreement.

8.            Credits. With respect to each Feature Film produced by Dimension pursuant hereto, Platinum and Scott Mitchell Rosenberg (as applicable) shall be accorded and entitled to the following credits:

 A.Scott Mitchell Rosenberg will receive, at his option, a shared Executive Producer or Producer credit. In addition, Platinum can elect to receive up to two more (shared) co-producer credits for 1-2 Platinum executives, at Platinum's sole discretion, provided that if Scott Mitchell Rosenberg and/or Platinum is obligated to accord any such executive an executive producer or producer credit with respect to a particular project, one of such additional credits shall be a (shared) executive producer or producer credit, provided that Platinum has notified Dimension in writing of such requirement by no later than concurrently with the submission to Dimension of the chain-of- title for such project.

 B.Platinum shall be entitled to a Platinum Studios Production Company credit, immediately following the presentation credit, a Platinum Studios logo credit and a "Based upon a Platinum Studios Comic" or similar mutually agreeable corporate credit.

 C.           Dimension shall comply with all reasonable credit obligations incurred by Platinum to third parties in connection with Platinum's acquisition of the applicable property and furnished to Dimension in writing, provided that no such credit obligations shall require a credit above or more prominent than the Miramax presentation and/or production credit. The above credits will be accorded in all on-screen credits in the main titles on a separate card no less prominent than any other Producer, Executive Producer and/or Production Company credits, and in all paid advertising and publicity issued (or controlled) by Dimension or any of the Feature Film's distributors. Platinum and Dimension shall mutually approve, provided that in the event of any disagreement the decision of Dimension shall control, (a) any other Production Company credit, and (b) if Dimension wishes to accord more than one other Executive Producer and/or Producer credits, such additional Executive Producer and/or Producer credits.

9. Merchandising, Soundtrack Screenplay and Music  Publishing, Commercial Tie-Ups.

 A.Any and all revenues derived from exploitation of merchandising, music publishing and/or soundtrack rights to a Feature Film produced by Dimension hereunder shall be accounted for separately with no cross-collateralization. With respect to the exploitation of such merchandising rights, Platinum shall control and administer same and Platinum shall be entitled to a 25% distribution fee and the right to recoup all out=of-pocket costs and fees; thereafter, the balance, if any, shall be split 50/50 between the parties hereto. With respect to the exploitation of such soundtrack rights, which Dimension shall control and administer, Platinum shall be paid a direct "separate pot" royalty equal to 5% of the suggested retail list price for worldwide sales of such album in all channels of distribution calculated with respect to all income from record one (1) but payable after Dimension recoups all direct out-of-pocket producing and marketing costs and expenses (excluding overhead) paid to unaffiliated third parties directly in connection with the exploitation of such soundtrack rights (as opposed to in connection with the applicable Feature Film associated with said soundtrack). With respect to the exploitation of such music publishing rights, which Dimension shall control and administer, Platinum shall be paid a direct "separate pot" royalty equal to 5% of the net amounts payable to Dimension from the exploitation thereof. With respect to the exploitation of screenplay publishing rights, which Dimension shall control and administer, Platinum shall be paid a direct "separate pot" royalty equal to 7% of the suggested retail price of published screenplays. The parties shall negotiate in good faith the terms of their respective participation in the revenues derived from commercial tie-ups.

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 B.Platinum's logo and/or trademark (collectively, the "Mark(s)") shall appear on the outside packaging of all phonorecords (and tapes) in all configurations now known or hereafter devised, in all advertisements, on all marketing and promotional materials, and wherever the logo and/or trademark of the record distributor appears (it being acknowledged that if the approved billing block for the Feature Film is utilized, this shall suffice in respect of the foregoing). The Mark(s) shall be in the same size and prominence as any other logo and/or trademark. Platinum shall have the right to accord a shared executive producer credit to such individual as Platinum may designate. Such credit shall appear on the outside packaging of all phonorecords (and tapes) in all configurations known or hereafter devised and in all advertisements where any other executive producer credit appears. Such credit shall be in the same size, typestyle and prominence as the credit accorded to any executive producer in connection with such phonorecords.

10.              Platinum Participation in Production. Platinum shall have mutual approval with Dimension of the final screenplay for any Feature Film (including sequels, prequels and remakes thereof), provided that as between Platinum and Dimension, Dimension's decisions shall control in the event of a disagreement, provided further, however, that Dimension agrees to comply with and be subject to any consultation and/or approval rights and procedures in favor of third parties of which Dimension has been notified in writing by Platinum concurrently with Platinum's submission to Dimension of the chain of title for such project. Platinum shall also have the right to approve of any third party profit participations accorded in connection with any Feature Film if and to the extent any such participations would dilute Platinum's profit participation hereunder. Dimension shall meaningfully consult with Platinum with respect to the budget, cast, director and final cut of each Feature Film (including sequels, prequels and remakes thereof). Platinum shall have the right (but not the obligation) to have a representative present at all reasonable times during all production and post-production activities (including, without limitation, on the set) for any Feature Film, at Dimension's cost, provided that the expenses for travel and accommodations and the per diem (and any other perquisites) to be furnished by Dimension to accommodate such presence are appropriate under the circumstances taking into account the Budget for the applicable Feature Film, provided that if the Budget for a Feature Film is equal to or exceeds $14 Million, then Platinum and Scott Mitchell Rosenberg shall be accorded Dimension's "first-class" treatment with respect to such presence, and provided further, that in all events, regardless of the Budget for the Feature Film, Platinum and Scott Mitchell Rosenberg shall be treated no less favorably than the most favorable treatment accorded any other person attached to such Feature Film in this regard. Platinum shall also have the right to have a representative present when and where rough cut sequences and dailies of any Feature Film are being shown, provided that to the extent any such rough cut sequences and/or dailies of the Picture are being separately circulated to any other persons for viewing, Platinum shall be separately sent a copy thereof for viewing at its offices. Platinum shall be added as an additional named insured on Dimension's commercial liability, production package and errors and omissions insurance policies for each Feature Film. Platinum shall be provided with a minimum of three (3) complimentary videocassette copies of each Feature Film produced pursuant hereto no later than when such Feature Film becomes generally commercially available on video, and shall have the right to purchase additional copies from Dimension at Dimension's cost (so long as such purchases thereof are not for further sale by Platinum). Platinum shall be provided with at least ten (10) invitations to any premieres of any Feature Film and/or screenings at film festivals where any such Feature Film is included, together with first-class travel and accommodations packages for three (3) persons (if available and used).

11.              Representations and Warranties. Each party hereby represents and warrants to the other as follows:  (a) it has all necessary authority to make this agreement, upon its execution, the valid, binding and enforceable obligation of such party; (b) no consent, waiver or approval of any third party is necessary to its entering into and performance of this agreement or the consummation of the transactions contemplated hereby; and (c) this agreement, when duly executed, will constitute legal, valid and binding obligations of such party, enforceable against such party in accordance with the terms hereof (subject to equitable remedies and applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights generally).

12.              Confidentiality. Neither party shall disclose the existence or terms and conditions hereof to any third parties except (a) to the extent same has become public knowledge other than as a result of a disclosure in violation of this agreement, (b) to their respective attorneys, accountants or other financial advisors (who shall also be required to observe such confidentiality requirements), (c) as required (in the opinion of such counsel, accountants or other financial advisors) by applicable law, or legal, regulatory, governmental or similar process,    (d) to the extent reasonably necessary to enforce such de party’s rights hereunder and/or (e) pursuant to one or more mutually approved press release(s); provided, however, that each party shall also have the right to disclose its executive producer and/or producer fees hereunder to third parties for purposes of confirming and/or establishing "quotes" (as such term is customarily understood in the motion picture industry).

13.            Notices. All notices which either party wishes to serve on the other shall be in writing, addressed as follows: to Platinum, Platinum Studios, LLC, 9744 Wilshire Boulevard, Suite 400, Beverly Hills, California 90212, Telecopier      (310)276-2799, Attention: Mr. Scott Rosenberg, with copies to Loeb &Loeb LLP,  10100 Santa Monica Boulevard, Suite 2200, Los Angeles,California  90067,Telecopier (310) 282-2192, Attention: Stephen Saltzman,  Esq., and to William Morris Agency, Inc., 151 William Morris  Drive, Beverly Hills, California 90212, Telecopier (310) 859-  4250, Attention Mr. Paul Bricault; to Dimension, 375 Greenwich  Street, New York, NY 10013, Telecopier (212) 941-2015, Attention

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Mr. Cary Granat; and 11 Beach Street, 5^th Floor, New York, NY 10013, Telecopier (212) 219-4128, Attention: Mr. Brian Burkin. All notices may only be served by one of the following methods: personally, by certified or registered mail (return receipt requested), courier service, telegraph, facsimile or cable. Either party may designate a substitute address by written notice to the other. The date which is one (1) day following personal delivery, the date which is five (5) days after the deposit of such notice in the mail, the date which is one (1) business day after delivery thereof to be telegraph or cable office, the date which is one (1) business day after sending by facsimile (provided there is an electronic answerback confirmation of even date) or the date which is two (2) business days after delivery to a courier service, shall be deemed the date of service of any notice from either party to the other party.

14. Governing Law; Forum; Dispute Resolution. This agreement shall be governed by the laws of the State of California applicable to agreements executed and wholly to be performed therein. The forum for the resolution of any dispute related to this agreement shall be the federal and state courts located in Los Angeles, California and the parties hereby submit to the in personam jurisdiction of said courts and hereby waive any claim that such courts are an improper venue or an inconvenient forum. In the event of a material breach by either party of its obligations hereunder, the other shall have the right to terminate this agreement and seek damages resulting from such breach, provided that if such breach is a failure by Dimension to pay monies when due hereunder, Platinum shall only have the right to terminate the agreement if Dimension has failed to cure such breach within five (5) business days of its receipt of written notice from Platinum of such payment default, provided further that in no event shall Platinum have the right to injunctive relief with respect to the exploitation of any Feature Film produced pursuant hereto. The prevailing party in any legal proceeding of any type related to this agreement shall receive, in addition to any other recovery, its actual attorneys’ fees and costs.

MIRAMAX FILM CORP.	PLATINUM STUDIOS, LLC
By:  /s/ Cary Granat	By : /s/  Scott Rosenberg
Its: President	Its: Chairman

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the inclusion in this Registration Statement of Platinum Studios, Inc.on Form SB-2, of our audit report dated July 13, 2007, which includes an emphasis paragraph relating to an uncertainty as to the Company’s ability to continue as a going concern appearing in the Prospectus, which is part of the Registration Statement.

We also consent to the reference to our Firm under the captions “Experts” in the Prospectus.

HJ Associates & Consultants, LLP

Salt Lake City, Utah

October 30, 2007