Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
12 COMPLAINT FOR:
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Plaintiff,
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17 Defendants.
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3 (“Cresaun”) blatant violation of its contractual duty to provide $10 million in financing for the
4 film Kung Fury 2. Creasun holds itself out to be a big-time Hollywood player with vast resources
5 at its disposal. But Creasun has not put its money where its mouth is and paid what it owes.
6 Creasun’s failure to pay has shut down production of a feature film that is poised to be a creative
7 and box-office success. No amount of rhetoric or bullying by Creasun changes this fact.
9 Creasun about its failure to pay and requested that it do so or step aside. In response, Creasun
10 offered a litany of excuses and purported to exercise its right to take over production of the film
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11 even though the conditions for exercising this right did not exist. Creasun has created these
Los Angeles, California 90067-4590
13 3. Making matters worse, when the film’s producers raised concerns about Creasun’s
14 ability to fund, Defendant Minglu Ma, a corporate director of Creasun, represented that Creasun
15 had $4 billion dollars available. Yet the “Proof of Funds” document she provided appears to have
16 been altered to show the $4 billion amount and, in any event, is for a different entity. When
17 KF2EUG asked for information showing that the document was authentic and that Creasun had
18 access to purported funds belonging to a different entity, Creasun did not respond.
19 4. Creasun and Ma’s conduct threatens to jeopardize the film and cause tens of
20 millions of dollars in damages. KF2EUG is filing this lawsuit as a last resort to hold Creasun and
21 Ma accountable for their actions and get production of the film back on track.
22 THE PARTIES
24 Angeles.
27 Shanghai Creasun Media Culture Corporation Ltd. (“Shanghai Creasun”). Ma resides in Los
28 Angeles.
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 7. KF2EUG is a German private limited company that was formed to produce Kung
3 8. KF2EUG is unaware of the true names and capacities of defendants sued as Does
4 1 to 20, inclusive, and therefore sues these defendants by fictitious names. KF2EUG will seek
5 leave to amend to allege the true names and capacities of said Doe defendants when ascertained.
6 KF2EUG is informed and believes, and based thereon alleges, that at all relevant times mentioned
7 each of the fictitiously named defendants conducted business in the Los Angeles County, and is
8 responsible in some manner and/or conspired with one or more of the other defendants for the
9 conduct, acts, omissions, occurrences, injuries and damages alleged herein, and that KF2EUG’s
10 injuries and damages were directly, proximately and foreseeably caused thereby.
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11 SUMMARY OF FACTS
Los Angeles, California 90067-4590
13 Cult Classic
15 talented but struggling filmmaker who decided to stop directing commercials to pursue his dream
16 of becoming a feature film director. Sandberg hatched an absurd but inspired premise: create a
17 film paying over-the-top homage to 1980s action movies in which a bandana-wearing, Kung Fu-
19 10. Sandberg did not have access to financing for the film, so he spent $5,000 of his
20 own money to create a trailer, which he posted to the fundraising platform Kickstarter in 2013.
21 The trailer went viral, and Sandberg raised more than $600,000 to make a 30-minute film.
22 11. That film, Kung Fury, received rave reviews—one critic called it a “a 31-minute
23 masterpiece that feels like it fell right out of 1985 and hit just about every awesome b-movie
24 genre on the way down”—and was selected to debut at the Cannes Film Festival in 2015. Kung
25 Fury already has become a cult classic, amassing more than 35 million views on YouTube.
2 this time. Hollywood took notice of Sandberg’s creative vision and was eager to become
4 14. Arnold Schwarzenegger and Michael Fassbender were each admirers of the short
5 film and attached themselves to the feature. David Hasselhoff, who had a voiceover cameo in the
7 15. Studios vied for the feature. Concerned that they would want to change Kung
8 Fury’s aesthetic, Sandberg decided to maintain creative control and make an independent film.
9 C. Looking to Make its Mark in Hollywood, Creasun Agrees to Finance Most of the
11 16. The feature, which became known as Kung Fury 2, attracted a powerhouse team of
Los Angeles, California 90067-4590
12 producers and financiers, including KatzSmith Productions (the producer of the smash film It),
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13 Argent Pictures (“Argent”) (a backer of acclaimed films such as Hacksaw Ridge and The Birth of
14 a Nation) and KF2EUG (of which Philip Westgren, a producer of the films Hellboy and
15 Midsommar, is a principal). Endeavor Content and CAA agreed to handle North American rights
16 for the film, and Jellyfish Bloom International, LLC (“Bloom”) agreed to handle its international
17 sales.
19 was looking to make its mark in Hollywood. Creasun jumped at the opportunity to fund the
21 18. When Kung Fury 2 was announced in 2018, it generated tremendous buzz, and the
23 D. Creasun Enters into Contracts Requiring it to Provide About $22 Million in Funding
25 19. Creasun agreed to fund two-thirds of Kung Fury 2’s $33.4 million budget, or about
26 $22.3 million, including $10 million for visual effects. The relevant contracts that Creasun
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 The Financing Term Sheet
3 (Sandberg’s production company) entered into a Financing Term Sheet. The Financing Term
4 Sheet requires Creasun to provide $22 million in funding for the film (later adjusted to $22.3
5 million), $12 million through a senior loan and $10.3 million in equity financing. The Financing
6 Term Sheet states that it is governed by California law. A true and correct copy of the Financing
7 Term Sheet is attached as Exhibit A and its terms are incorporated herein.
8 The PPSA
9 21. On July 8, 2019, KF2EUG, Creasun and DNEG, a highly respected visual effects
10 company, entered into a Post-Production Services Agreement (the “PPSA”). The PPSA sets forth
GREENBERG GLUSKER FIELDS CLAMAN
11 service and payment milestones that DNEG and Creasun, respectively, were required to meet. In
Los Angeles, California 90067-4590
12 total, the PPSA required Creasun to pay DNEG $10 million. The PPSA states that it is governed
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13 by the California law. A true and correct copy of the PPSA as amended is attached as Exhibit B
16 22. In December 2019, Creasun, KF2EUG and others entered into an agreement
17 approving documents relating to the production of the film (the “Approval Agreement”). The
18 Approval Agreement gives Creasun a limited right to take over the production of the film—but
19 only if various conditions are met. These conditions include that: the film must be “going over-
20 budget or behind schedule”; Creasun must consult in good faith with Argent before exercising
21 any takeover right and, if it does so, work collaboratively with Argent; Creasun must consult in
22 good faith with Maze Pictures, a German-based producer of the film, before exercising any
23 takeover right; and Creasun must exercise this right in the “same manner and on the same terms
24
25 1
Lighting Cobra Films Inc. (“Lightning Cobra”), an entity that DNEG formed to provide services for Kung Fury 2, is
the contracting party to the PPSA on behalf of DNEG. Re:Define FX Ltd, a wholly owned subsidiary of DNEG,
26 entered into a July 9, 2019 agreement with Lightning Cobra to provide visual effects services for the film (the “VFX
Services Agreement”). To avoid any confusion, KF2EUG refers to these entities collectively as “DNEG” for the
27 purpose of this Complaint. The VFX Services Agreement, to which KF2EUG and Creasun gave their express written
acknowledgement and consent, and which is governed by California law, is attached as Exhibit C and its terms are
28 incorporated herein.
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 as Film Finances, Inc. (FFI) would have had if FFI were still providing a traditional completion
2 bond for the Film.” (Emphasis in original.) Importantly, the Approval Agreement states that
3 KF2EUG “shall not be responsible for any scheduled delays that are caused solely by [DNEG] or
4 Creasun’s failure to make any payments to [DNEG] when such sums are due and payable.”
5 (Bolding added.) The Approval Agreement states that the agreement and any non-contractual
6 disputes relating to the agreement are governed by California law. A true and correct copy of the
7 Approval Agreement is attached as Exhibit D and its terms are incorporated herein.
8 E. After the Film Completes Principal Photography, Creasun Refuses to Honor its
10 23. Principal photograph for Kung Fury 2 started in July 2019 and finished two
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13 Creasun ultimately provided the initial $12 million in debt financing it owed, it did so in a
14 piecemeal fashion that created doubts about its ability to complete its remaining funding
15 obligations. Creasun also tried to insert itself into the production, incurring substantial additional
16 costs for the production by flying in multiple producers and assistants to the shoot. These
17 producers made various demands of the production, which also increased costs. Out of
18 appreciation for Creasun’s commitment to fund the film, the production went above and beyond
20 25. At the start of 2020, with DNEG’s work on the film well underway, Creasun
21 requested to postpone its payment deadlines until March 31, 2020. Again, out of appreciation for
22 Creasun’s commitment to fund, the production and DNEG accommodated Creaun’s request.
23 26. Even with this accommodation, when payment came due, Creasun refused to pay.
24 Through late August, DNEG had performed services and incurred costs entitling it to $4.25
25 million under the PPSA and VFX Services Agreement but only received $400,000 from Creasun.
26 After repeatedly attempting to obtain payment from Creasun for the outstanding $3.85 million,
27 DNEG stopped working on the film, causing production to shut down. When Creasun continued
28 to refuse to pay, DNEG put Creasun on notice that it would pursue all available remedies,
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 including by filing a lawsuit.
2 F. To Deflect from its Failure to Pay, Creasun Offers Baseless Excuses and Tries to
4 27. To deflect from its failure to pay, Creasun has offered baseless excuses and tried to
5 confuse the issues. Creasun has blamed, among other things, the United States-China trade war
6 and wire payments purportedly being sent to the “wrong” accounts and then being frozen. None
7 of these excuses withstand even the slightest bit of scrutiny. Nor do they give Creasun a pass for
9 28. Creasun also has made baseless attacks on the film and its producers. For
10 example, Creasun has criticized the quality of the film and the experience of its producers. None
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11 of the film's other financiers, including Argent, have raised similar concerns. These attacks are
Los Angeles, California 90067-4590
13 29. In a last-ditch attempt to uncover improprieties that might give it cover for not
14 making these payments, Creasun conducted an audit of the production, something that KF2EUG
15 welcomed because it has done nothing wrong. KF2EUG is informed and believes, and based
16 thereon alleges, that the audit, with which it fully cooperated, found no material irregularities.
17 Rather than accept these findings and make the outstanding payments, KF2EUG understands that
18 Creasun terminated the auditor before he could provide a written report. KF2EUG has never
20 30. In response to KF2EUG and others raising concerns about its failure to pay,
21 Creasun also asserted that it was exercising its right under the Approval Agreement to take over
22 production of the film, purportedly because KF2EUG was improperly accessing contingency
23 funds (it was not). But Creasun has no such right for at least four independent reasons:
24 a. First, Creasun did not satisfy its contractual obligation to provide $10 million in
26 b. Second, the Approval Agreement states that Creasun only can exercise this right if
28 makes clear, KF2EUG is not responsible for any delays caused by “Creasun’s
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 failure to make any payments to [DNEG] when such sums are due and payable.”
5 c. Third, the Approval Agreement states that Creasun only can exercise this right if it
6 first consults in good faith with Argent and Maze Pictures. Although KF2EUG
7 understands that Creasun reached out to Argent and Maze Pictures, Creasun did not
9 d. Fourth, the Approval Agreement states that Creasun must exercise this right in the
10 “same manner” and on the “same terms” as the bonding company FFI. But FFI
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11 only would have had the right to take over production if, among other things, there
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12 were material issues with the script, budget and/or production schedule. There
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13 were no such issues until Creasun failed to fund. Further, improperly accessing
14 contingency funds (which KF2EUG did not do), would not give rise to any
15 takeover right.
18 31. For months, KF2EUG and others tried to get Creasun to pay. When it refused,
19 KF2EUG and others tried to get Creasun to agree to step aside and allow another financier who
20 was offering to fund Creasun’s remaining financing obligations step in. Although Creasun
21 initially welcomed these efforts, it ultimately torpedoed them. Fed up with Creasun’s tactics, one
22 of the parties who was trying to bring in the financier questioned whether Creasun even had the
24 32. In response, on August 17, 2020, Ma sent an email to KF2EUG and others in
25 which she represented that Creasun had the ability to pay and attached a document purporting to
26 show this fact. The document, titled “PROOF OF FUNDS,” purports to be a June 16, 2020
27 letter from HSBC to CA International Ltd showing that CA International Ltd has $4 billion
28 available. In the email, Ma represented that “Creasun’s funds are currently safe,” and that
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 “[n]umber [sic] never lie.” A true and correct copy of Ma’s email, including the “Proof of Funds”
3 33. The portion of the “Proof of Funds” document setting forth the amount of funds
4 available to CA International Ltd appears to have been materially altered in at least the following
5 ways:
6 a. The text for the amount of funds purportedly available appears to be in different
9
b. There also appears to be a mark above the word “BILLION” that should not be
10
there:
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14 34. Even if the “Proof of Funds” document was not altered, it does not show that
15 Creasun (the party to the relevant contracts) as opposed to CA International Ltd has access to
16 these purported funds. Creasun and CA International Ltd are different entities, and Creasun has
17 not shown that it has access to funds belonging to CA International Ltd.
18 35. In any event, even if Creasun’s Chinese-based backers have access to money to
19 fund the film, that does not mean that Creasun does.
20 36. On September 10, 2020, KF2EUG’s counsel sent Creasun a letter requesting that it
21 provide information showing that the “Proof of Funds” document was authentic, that it had access
22 to funds belonging to CA International Ltd and/or that Creasun otherwise had access to funds to
23 complete its financing obligations. Creasun did not respond by the requested deadline.
24 H. In Addition to Materially Breaching its Contractual Duties, Creasun’s Failure to
25 Fund Has Caused and is Causing Substantial Additional Damages
26 37. Creasun’s failure to fund the remaining $10 million it owes is a material breach of
27 its obligations under the agreements referenced above. But as Creasun knows, the consequences
28
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 of its failure to fund have caused and are causing substantial additional damages to the
2 production, including to KG2EUG, well in excess of that amount. These damages include the
3 following:
4 a. Creasun’s failure to fund has caused production to shut down. Each day that
5 production is shut down, the cost of restarting production and completing the film
6 increases, and the potential value of the film decreases. Creasun knew or should
8 b. Creasun’s failure to fund has precluded the production from being able to draw
9 down against the DFFF funds from Commerzbank in Germany, which, as Creasun
10 knows, is contingent upon Creasun making the payments that it owes DNEG.
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11 c. Creasun’s failure to fund has precluded KF2EUG and other producers from being
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13 d. Creasun’s failure to fund has made it virtually impossible for the film to be
14 completed on time and on budget, creating a risk if not a likelihood that KF2EUG
16 and financiers, potentially making KF2EUG liable for millions of dollars. Creasun
17 was well aware of these obligations when it materially breached its own obligations
18 to pay.
21 38. KF2EUG is limited in its ability to mitigate the damages that Creasun has caused
22 and is causing. KF2EUG cannot unilaterally terminate the agreements to which it and Creasun
23 are parties and replace Creasun with a new financier because there are other parties to many of
24 these agreements and there are relevant agreements (such as the VFX Services Agreement) to
25 which KF2EUG is not a party. Further complicating things, there are tax credits and other
27 39. Nevertheless, KF2EUG has tried to mitigate its damages to the extent possible.
28 For example, other financiers remain interested in funding the film. KF2EUG and others have
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 repeatedly requested that Creasun agree to step aside, retain an interest in the film based on the
2 amount it has invested to date, and allow one of those financiers to complete its remaining
4 I. Creasun Has Stonewalled KF2EUG’s Attempts to Resolve the Issues Giving Rise to
5 this Lawsuit
6 40. For months, KF2EUG has tried to resolve Creasun’s failure to fund, requesting
7 that Creasun either pay the amount it owes or let another financier complete its funding
8 obligations. KF2EUG was not alone. Almost all of the major parties involved in the film,
9 including Argent, DNEG, KatzSmith, CAA, Endeavor and Bloom, have raised similar concerns,
10 expressed support for KF2EUG, and urged Creasun to pay. Creasun has refused.
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11 41. Creasun’s conduct forced KF2EUG to retain litigation counsel, who tried one last
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12 time to resolve this dispute by requesting that Creasun pay or step aside. Creasun again refused,
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16 42. KF2EUG repeats and realleges the allegations in the preceding paragraphs.
17 43. KF2EUG and Creasun entered into the Financing Term Sheet on April 5, 2019 and
19 44. KF2EUG performed all or substantially all of its obligations under these
20 agreements.
21 45. Creasun materially breached these agreements, including its obligation to meet
22 certain payment milestones set forth in the PPSA, by not paying the $3.85 million it owes DNEG
23 for the visual-effects services that DNEG has performed and the related costs that DNEG has
24 incurred. In turn, by failing to pay DNEG, Creasun materially breached its obligations under
25 these agreements to provide $10 million in outstanding financing for the film.
26 46. Creasun was not excused in any way from performing its obligations under these
27 agreements, including based on its incorrect assertion that it has the right under the Approval
28 Agreement to take over production of the film. Creasun does not have the right to take over
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 production because, among other things: (1) Creasun did not satisfy its duty to provide $10
2 million in financing; (2) the film was not “going over-budget or behind schedule” before Creasun
3 materially breached the applicable agreements; (3) KF2EUG did not breach its obligations under
4 any of the applicable agreements; (4) Creasun did not consult in good faith with Argent and Maze
5 Pictures; and (5) Creasun cannot exercise this right in the “same manner” and on the “same
6 terms” as FFI.
7 47. KF2EUG was harmed as a result of Creasun’s material breach of these agreements
8 because Creasun has, among other things: (1) failed to provide $10 million in outstanding
9 financing that it owes; (2) caused production of the film to shut down for a lengthy period of time,
10 increasing the cost of restarting production and potentially decreasing the film’s value; (3)
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11 precluded KF2EUG from being able to draw down against the DFFF funds; (4) precluded
Los Angeles, California 90067-4590
12 KG2EUG from being able to pay various production costs; (5) created a risk if not a likelihood
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13 that the film will not be completed on time and on budget, thereby putting KF2EUG in breach of
14 the contractual obligations it owes to distributors, producers and financiers, and potentially
15 making KF2EUG liable for millions of dollars; and (6) jeopardized the back-end to which
17 48. Creasun knew or should have known that, by failing to pay DNEG, it would cause
19 49. Creasun’s breach of these agreements was a substantial factor in causing KF2EUG
20 harm.
22 contracts, KF2EUG has been damaged in an amount to be proven at trial but believed to be in
26 51. KF2EUG repeats and realleges the allegations in the preceding paragraphs.
28 represented in an email to KF2EUG that Creasun had $4 billion in funds available from which
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 Creasun could fulfill the remainder of its financing obligations for the film and attached to her
3 53. Ma knew that her representations were false when she made them because she
4 knew that Creasun did not have $4 billion available from which to fulfill the remainder of its
9 57. KF2EUG’s reliance on Ma’s representations was a substantial factor in causing its
10 harm.
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12 has been damaged in an amount to be proven at trial but believed to be in excess of $10 million.
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13 59. KF2EUG is informed and believes, and based thereon alleges, that Creasun and
14 Ma, in doing the things alleged, acted willfully, maliciously, oppressively and despicably with the
15 full knowledge of the adverse effect of their actions on KF2EUG, and with willful and deliberate
17 such, KF2EUG is entitled to recover punitive and exemplary damages from Creasun and Ma in an
18 amount appropriate to punish or set an example of Creasun and Ma and to deter Creasun and Ma
23 million;
28 5. For pre-judgment and post-judgment interest at the maximum legal rate; and
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
1 6. For such other relief in KF2EUG’s favor that the Court deems just and proper.
4
DATED: September 16, 2020 GREENBERG GLUSKER FIELDS CLAMAN
5 & MACHTINGER LLP
6
By:
7 STEVEN A. STEIN
Attorneys for Plaintiff KUNG FURY 2
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KF2EUG’S COMPLAINT AGAINST CREASUN AND MINGLU MA
EXHIBIT A
As of April 5, 2019
Dear All:
This Financing Tenn Sheet will constitute the principal terms of the agreement ("Agreement") by and
between Creasun Entertainment USA Inc ( "Company," email: creasun@crea-ent.com, phone:
3107488332, contact: Minglu Ma), on the one hand, and Laser Unicorns Productions AB ("LU," email:
david@laserunicoms.com, contact: Bergvall) and Kung Fury 2 Europe UG (haftungsbeschrankt)
("Production Entity" or "Producer," email: philip.westgren@brf.co, contact: Westgren), on the other
hand, in connection with the feature length motion picture project ("Picture") currently entitled "Kung
Fury 2" based on the short film "Kung Fury" created by Bergvall and owned by LU ("Short Film") and
the feature screenplay ("Screenplay")written by Tyler Burton Smith ("Smith") and Bergvall.
l. Picture Specifications: Producer agrees to complete and deliver the Picture in accordance with the
following specifications, unless otherwise expressly agreed in writing by Company:
a. Director: Bergvall
b. Principal Cast: Bergvall, Michael Fassbender ("Fassbender") and Arnold Schwarzenegger
("Schwarzenegger")
c. Screenwriters: Smith and Bergvall
d. Budget: Approximately Thirty-Three Million Four Hundred Six Thousand Three Hundred
Thirty Four U.S. Dollars (USD$33 ,406,334)
e. Principal Photography: Anticipated start date no earlier than July 22, 2019 but in no event
later than August I, 2019
f. Delivery Date: No later than eighteen ( 18) months after commencement of principal
photography of the Picture, and in any event prior to the delivery date(s), if any, specified in
the existing distribution license agreements for the Picture
17631822.5 l
229720-10002
g. VFX Services: Company shall be retained as the major visual effects service provider to
furnish the visual effects services of DNEG on terms consistent with the parameters of the
Budget (as defined below)
h. VFX Producer: Minglu Ma ("MM")
i. Guild: SAG and WGA
J- Sales Agents: WME and CAA co-repping the United States/Canada, and Jellyfish Bloom
International, LLC ("Bloom") as the foreign sales agent
k. Running Length: 100-120 minutes including opening and closing credits
2. Conditions Precedent: Company's obligations hereunder, including without limitation, any
obligation to provide any funding for the Picture in accordance with the terms hereof, shall be expressly
conditioned on the satisfaction of the following conditions precedent in form and substance satisfactory
to the Company ("Conditions Precedent"), satisfaction of which must be confirmed by Company in
writing:
a. Company's receipt and approval of all chain of title and production structure documents
demonstrating that Producer has acquired all rights necessary to produce, distribute and exploit the
Picture by any and all means throughout the world;
b. Company' s receipt of signed agreements for the following pre-approved key individuals
(with the terms of their agreements being subject to Company's approval): (i) Bergvall as director
("Director"), (ii) Bergvall, Fassbender and Schwarzenegger as lead cast members ("Principal Cast"), (iii)
Nick Bassett ("Bassett") as production designer, (iv) the Katzsmith Productions, Inc. ("Katzsmith")
producing team of David Katzenberg, Seth Grahame-Smith and Aaron Schmidt together with Westgren as
producers and (v) Bogdan Tomassini Buchner ("Buchner") as line producer. The Director and the
Principal Cast shall be deemed "Essential Elements" with respect to the completion bond and any
insurance;
c. Company's approval of the final Screenplay, production structure, financing plan
(Company hereby approving the financing plan attached hereto as "Exhibit C" ["Financing Plan"]),
budget, investment recoupment schedule ("Waterfall")(Company hereby approving the Waterfall
attached hereto as "Exhibit A"), production and delivery schedule, cash-flow schedule (including pre-
production, principal photography and post-production) and the principal shooting location(s) for
principal photography (including verification by Company of any location-based incentives or other
production-related subsidies) in connection with the Picture;
d. Company's receipt of this Agreement executed by Producer and LU as well as all
attachments and exhibits hereto (which are all incorporated herein by this reference);
e. Company's receipt of certificates of insurance (or letter(s) binding the insurance subject
only to payment of the premium) for errors and omissions insurance and a production insurance package
provided by a first class insurer, naming Company as an additional insured and loss payee, as well as
essential elements insurance for the Essential Elements and all such insurances will provide for Company
to be given 30 days notice of termination/variation;
f. A legally binding completion guaranty in favor of Company with a completion guarantor
("Completion Guarantor") approved by the Company at the approved budget level in connection with
the production of the Picture, conditioned only upon payment of the bond fee, and confinnation from the
Completion Guarantor that the strike price has been fully funded;
g. Company's receipt and approval of a long form financing agreement ("Long Form
Agreement") executed by Producer and LU, as applicable, reflecting the terms of this Agreement and
such other customary tenns and provisions as are required by Company;
17631822.S 2
229720-10002
h. Company's receipt and approval of all financing agreements between Producer and each
financier of the Picture (including without limitation, Argent Pictures ("Argent"), FilmVest, Swedish
Film, FFF, Bankenfunds, Rinke and Commerce Bank) providing for finance and investments sufficient to
fully fund the final approved budget ("Budget"), and including (without limitation) supporting
documentation confirming the DFFF tax credit;
i. Company's receipt and approval of executed sales agency agreement(s) (including sales
estimates) and all existing distribution agreements with Company-approved distributors of the pre-sold
territories, and Producer agrees to complete and deliver the Picture in accordance with the delivery
requirements set forth in all existing and subsequent distribution agreements as approved by Company;
j. Company's receipt and approval of executed copyright mortgage and security
agreement(s) ("Security Agreement") from LU and Producer granting Company a continuing security
interest in and to all rights and assets in and to the Picture and all underlying and subsidiary rights
("Company Security Interest") (subject only to customary SAG, WGA and lab liens expressly approved
by Company, limited subordination with respect to subsidies that are being cash flowed by approved third
parties on terms expressly approved by Company, and any security interest granted to Argent by Producer
and/or LU ("Argent Security Interest") which shall be subject to the terms of the Intercreditor
Agreement [as defined below]), including any and all additional documents required to perfect the same,
lab pledge agreements, bank account letter and signed notices of assignment from distributors of the pre-
sold territories in favor of Company;
By way of clarification and for the avoidance of doubt, funding of any sums by Company prior to the
satisfaction of all Conditions Precedent shall not be deemed or construed in any way as the satisfaction or
waiver of any Conditions Precedent; and all of Company's obligations hereunder shall remain subject to
and conditioned upon the complete and full satisfaction of all Conditions Precedent hereunder.
3. Single Purpose Entity: Production Entity is a single purpose entity incorporated in Germany to
produce the Picture and shall become a signatory to the required customary SAG and WGA guild
agreements. Producer represents and warrants that, as the entity directly securing all soft money and tax
credits as provided in the approved Financing Plan, it has fully complied (to the extent possible as of the
date hereof) and will continue to comply with all legal requirements relating to the procurement,
expenditure and recoupment of all such soft money and tax credit funding. A production bank account
("Production Account") shall be established in the name and under the control of the Production Entity,
but to which the Completion Guarantor is a signatory (if applicable), and which is otherwise subject to a
takeover right in favor of the Completion Guarantor (or ifthere is no Completion Guarantor, in favor of
Company), into which the Company Funding shall be deposited in accordance with the approved cash
flow schedule ("Cash Flow Schedule") attached hereto as "Exhibit B". Producer shall provide
Company with real-time access (online, where available) to all cost reports, progress reports, production
reports, all accounting and production bank account information and onsite visits. Producer shall also
provide Company with a final negative cost statement, certified by the production accountant for the
Picture, showing all costs paid or expended on the production through completion and delivery of the
Picture, no later than ninety (90) days following delivery of the completed Picture. Producer shall have
the right to make day-to-day decisions regarding the production of the Picture, but shall keep Company
informed of all key aspects subject to the exigencies of production .
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4. Pre-Production Funding: Provided Producer has satisfied the Conditions Precedent set forth
in subparagraphs 2(a) through (e), and 2(h) through (j) above and neither LU nor Producer is otherwise
in uncured material breach hereunder, and provided further that Company has received (all in form and
substance satisfactory to the Company) (i) a letter of intent from the Completion Guarantor, (ii) evidence
that the Producer has secured financing sufficient to fund the Budget and that it can satisfy the
conditions precedent to such funding, and proof of Argent's bridge financing in an amount equal to Four
Hundred Eight Thousand One Hundred Twenty-Five U.S. Dollars and Six cents (USD$408, 125.06)
("Argent Bridge Loan"); and (iii) an intercreditor agreement in form and substance approved by
Company ("lntercreditor Agreement") pursuant to which Company agrees that its first position
Company Security Interest shall be shared on a pro-rata basis with Argent as more specifically set forth
in Paragraph 6A, and Argent agrees that Company may (but shall not be obligated to) pay off the Argent
Bridge Loan as provided in the last sentence of this Paragraph 4, Company shall provide to the
Production Entity a bridge loan up to an amount equal to Three Million U.S. Dollars (USD$3,000,000)
("Company Bridge Loan") to be used in connection with Company approved pre-production activities
with respect to the Picture, payable on a weekly basis in accordance with the Cash Flow Schedule
approved by Company, which Company Bridge Loan (and Company Premium, as hereafter defined)
shall be due and payable on or before June 15, 2019 ("Company Bridge Loan Maturity Date"). The
parties agree that Company shall be entitled to an interest premium on the Company Bridge Loan in an
amount equal to Three Hundred Thousand U.S. Dollars (USD$300,000) ("Company Premium") and
Argent shall be entitled to an interest premium on the Argent Bridge Loan in an amount equal to Two
Hundred Four Thousand Sixty-Two U.S. Dollars and Fifty-Three Cents (USD$204,062.53) ("Argent
Premium"). The parties acknowledge that any and all amounts paid by Company to Producer, LU or
their affiliates in connection with pre-production of the Picture (including, without limitation, the
amount of Eighteen Thousand U.S. Dollars [USD$18,000] paid to LU in two weekly installments for
Bassett's production designer services and Neil Wallace's I st AD services, and the amount of Two
Hundred Thousand U.S. Dollars [USD$200,000] payable to Principal Cast as deposits for their acting
services) shall be deemed advances against, and subject to the same terms and conditions of, the
Company Bridge Loan. The principal amount of the Company Bridge Loan and the Argent Bridge
Loan, together with the Company Premium and the Argent Premium, shall be repaid concurrently upon
the closing of the financing of the Picture in accordance with the Financing Plan ("Financing");
provided, however that if the Financing occurs prior to the Company Bridge Loan Maturity Date,
Company agrees to defer the payment of the Company Premium and recoup it from the proceeds of the
Picture pro rata and pari passu with a deferred producer fee payable to Argent ("Argent Deferred
Producer Fee") in an amount equal to Two Hundred Fifty Thousand U.S. Dollars (USD$250,000),
together with a 20% flat interest premium on both the Company Premium and the Argent Deferred
Producer Fee, pursuant to Section 2 of Part C of the approved Waterfall. Notwithstanding the foregoing,
Company shall have the right (but not the obligation), at any time prior to repayment of the Argent
Bridge Loan and the Argent Premium ("Argent Bridge Loan Repayment"), to increase the Company
Bridge Loan to pay off the Argent Bridge Loan and the Argent Premium.
5. Commitment Amount and Funding: Upon satisfaction of all Conditions Precedent and
provided that neither LU nor Producer is otherwise in uncured material breach hereunder, Company or
its designees shall provide the following (collectively, "Company Funding"):
a. Twelve Million U.S. Dollars (USD$12,000,000), as a senior loan ("Company Loan")
bearing an annual interest of 15% per annum, to be repaid in the first position from and out of all "ROW
Gross Receipts" (i.e., worldwide receipts excluding Domestic Gross Receipts [as defined below]) and
then from worldwide receipts, as more fully provided in the Waterfall.
b. Four Million U.S. Dollars (USD$4,000,000), as production funding ("Company Senior
Funding"), with respect to which Company shall be entitled to recoup 120% of the Company Senior
Funding, pro-rata, pari passu with a Two Million U.S. Dollars (USD$2,000,000) equity investment from
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Argent ("Argent Equity") and 20% flat interest premium thereon, in first position from and out of the
"Domestic Gross Receipts" (i.e., all receipts from the U.S. and Canada as provided in Part C of the
Waterfall) and then from worldwide receipts (including ROW Gross Receipts pursuant to Section 4 of
Part B of the Waterfall).
c. Six Million U.S. Dollars (USD$6,000,000), as production funding ("Company Junior
Funding"), with respect to which Company shall be entitled to recoup 125% of the Company Junior
Funding from and out of the worldwide receipts pursuant to Section 6 of Part B of the Waterfall.
The Company Funding will be secured by the Company Security Interest and the collateral will include,
without limitation, all of the existing foreign licenses, including the China License (as defined below),
as provided in the Security Agreement and the Intercreditor Agreement, each in form and substance
approved by Company. Producer is responsible for all other financing required to complete and deliver
the Picture in accordance with the approved elements and other specifications set forth herein, including
without limitation any Completion Guarantor exclusions.
6. Waterfall: Gross Receipts shall be defined as all amounts actually received by or credited to
the Production Entity and/or any affiliate thereof, as a result of the distribution and exploitation of the
Picture and/or any elements thereof and any location based incentives, government subsidies, tax rebates
and/or soft money, throughout the universe in perpetuity, subject to the terms and conditions set forth
herein. All Gross Receipts ( other than subsidy or tax credit amounts that Company has approved to be
paid directly into the Production Account or to a third party lender) shall be paid to a collection account
pursuant to a mutually approved third party collection account management agreement to which
Company is a party ("CAMA") with an approved collection agent (with Freeway and Fintage deemed
pre-approved as the collection agent) and shall be applied in accordance with the Waterfall set forth in
"Exhibit A". The parties agree, and the CAMA shall reflect, that Company is entitled to receive (i) 50%
of all of the recoupable "reinvestments" amounts payable to CMP, Maze Pictures and LU as set forth in
Section 6 of Part B of the Waterfall, and (ii) 50% of the "Producer's Equity" to be paid pro rata, pari
passu pursuant to Section 7 of Part B of the Waterfall. In addition, Company shall be entitled to receive
forty five percent (45%) of one hundred percent (100%) ''Net Profits" (as that term is defined in the
Waterfall), provided that the more specific calculation of"Net Profits" (to be negotiated in good faith by
the parties) shall otherwise be defined, accounted for and paid on a no less favorable basis than the
definition and accounting accorded to any other "Net Profits'' (or any other form of backend) participant
with respect to the Picture. Producer shall bear all third party participations from its remaining 55%
share of Net Profits and shall have sole discretion with respect to the allocation thereof. There shall be
no pre-break participations, deferments, bonuses, or the like, or changes to the current Waterfall, without
Company's written approval in each instance. Producer and Company shall be named parties to the
CAMA, provided that Company shall not be obligated to assume any of Producer's financial or other
obligations thereunder.
6A. Security lnterest/Intercreditor Agreement: Solely for the benefit of Company and Argent,
the Intercreditor Agreement shall provide for the relative priorities of the Company Security Interest and
the Argent Security Interest and the related rights of Company and Argent, as follows. Prior to Argent
Bridge Loan Repayment, the Company Security Interest and the Argent Security Interest shall be held
on a pro rata basis in accordance with their respective contribution to the bridge financing as set forth in
Paragraph 4. Upon Argent Bridge Loan Repayment, the Company Security Interest shall be held as
follows: (i) on a sole first priority basis with respect to ROW Gross Receipts until repayment of the
Company Loan (together with all interest thereon) ("Company Loan Repayment"); and (ii) on a pro
rata basis with the Argent Security Interest solely with respect to the Domestic Gross Receipts from the
Picture until Company Loan Repayment, and after Company Loan Repayment with respect to both
Domestic Gross Receipts and ROW Receipts, in accordance with their respective entitlements to recoup
the Company Senior Funding and the Argent Equity (including their respective premiums thereon), and
thereafter pro rata in accordance with their respective entitlements to recoup the Company Premium (to
17631822.5 5
229720-10002
the extent deferred) and Argent Deferred Producer Fee (and their respective premium thereon), as
provided in the Waterfall; and (iii) upon Argent' s recoupment of the Argent Equity and the Argent
Deferred Producer Fee (and the related premiums thereon), the Argent Security Interest shall terminate
and the Company Security Interest shall thereafter be held on a sole first priority basis. The provisions of
the lntercreditor Agreement will also confirm that, in the event Company exercises any Takeover Right
(as provided in Paragraph 13 below), provided that Argent is not in material breach of its obligations
with respect to the Picture, Company will respect all contractual entitlements of Argent that are then-
controlled by Company by virtue of its exercise of such Takeover Right, such as credits, approvals, etc.,
relating to the production of the Picture, as well as Argent's recoupment entitlements under the approved
Waterfall, to the extent disclosed to Company prior to any such takeover, to the extent consistent with
the provisions of this Agreement, and subject to any defenses or contractual rights of Producer with
respect thereto.
7. Company Services/Fees: Company shall furnish (i) the non-exclusive producing services and
services as visual effects producer of MM; (ii) the non-exclusive producing services of George Acogny
("Acogny") and (iii) the visual effects services of DNEG; and shall coordinate with DNEG and with
CMP regarding CMP's visual effects expenses to be incurred in Germany. [n addition to the Company
Premium and other interest premiums relating to the Company Funding, Company shall receive a
producing fee ("Company Producing Fee") in the amount of Four-Hundred Thousand U.S. Dollars
(USD$400,000) (including a producer fee of Sixty Thousand U.S. Dollars [USD$60,000] to be equally
allocated between MM and Acogny), and a legal fee reimbursement ("Company Legal Fee") in the
amount of Seventy-Five Thousand U.S. Dollars (USD$75,000). For engaging and providing the VFX
services of DNEG, Company shall be entitled to receive (and/or retain from the Company Funding and
pay directly to DNEG, the exact funding mechanism to be coordinated and agreed with the Completion
Guarantor) the $10,000,000 budgeted fee allocated for the VFX services of DNEG. Company also
approves a producer fee for Hammerstone Studios in the amount of Three-Hundred Fifty Thousand U.S.
Dollars (USD$350,000). All of these fees shall be included in the Budget. The Company Producing Fee
and the Company Legal Fee shall be paid on first drawdown of the Company Funding (and the
Company shall be entitled to deduct and retain such monies from such first drawdown). MM and
Acogny shall each have access to all production locations, information and materials (including without
limitation books and records, development materials, legal documentation, sales reports, cost reports,
marketing materials) provided to any other producer, be meaningfully consulted on all key creative
matters, domestic distribution and foreign sales, as well as advertising and marketing campaign for
initial U.S. release, and have the right to attend all preview screenings, and be included in all key
creative and business meetings and correspondences on a no less favorable basis than any other
producer; provided, however, that MM shall have full authority and control with respect to all VFX
services and activity, including, without limitation the VFX services of DNEG. MM and Acogny shall
each be provided with first class travel and expenses in connection with their foregoing services, as
more particularly set forth in the Budget.
8. Ownership. LU represents and warrants that, as of the date hereof, (i) it exclusively owns and
controls the right to produce the Picture based on the Short Film) and (ii) it separately owns and
controls, jointly with Cybergoat, lnc. ("Cybergoat"), a California corporation, all rights in and to the
Screenplay (collectively, the "Underlying Rights"), and (iii) that promptly following the execution of
this Agreement, it will (together with Cybergoat) grant an exclusive one-picture license ("One Picture
License") to Production Entity to develop, produce and exploit the Picture based on the Short Film and
the Screenplay and to exploit all ancillary rights (as distinguished from all derivative and subsidiary
production rights, interactive game rights and theme park rights, which are being reserved to LU
[collectively, "Derivative Rights"]) throughout the universe, in any and all languages and in any and all
media, whether now known or hereafter developed, as more particularly set out in the One Picture
License between LU and Producer and that separate Option and Rights Agreement among LU,
Cybergoat and Producer, both dated concurrently herewith. Producer represents and warrants that it has,
17631822.5 6
229720-10002
and will have, all right, title and interest necessary to produce, distribute and fully exploit the Picture and
all ancillary rights in all markets and media (now known or hereafter created) throughout the universe in
perpetuity. Producer and LU each represent and warrant that they will not take any action or transfer,
assign or pledge (or cause to be transferred, assigned or pledged) any of their respective rights, interests
or entitlements in the Underlying Rights, the Screenplay, the Picture and/or the Derivative Rights in any
way that is contrary to the provisions of this Agreement and the Security Agreement, without the
express prior written approval of Company. The results and proceeds of all services rendered by
individuals and entities in connection with the Picture (including, without limitation, the services of any
of Producer's employees, officers, directors and third party contractors who are involved in rendering
services on the Picture), including without limitation all themes, plots, characters, formats, ideas, stories,
and all other material composed, submitted, added, created, or interpolated by such individuals and
entities (collectively, "Results and Proceeds"), shall be deemed a work-made-for-hire for Production
Entity prepared within the scope of Production Entity's employment or engagement thereof, and/or as a
work specifically ordered and/or commissioned by the Production Entity for use in an audio-visual
work. Producer hereby irrevocably grants to LU the exclusive and irrevocable right and license, at no
cost, to use any or all of the Results and Proceeds as well as footage, music and/or all other elements
original to the Picture in connection with the exploitation of the Derivative Rights that are reserved to
LU hereunder, without reservation or restriction. At any time after the completion and delivery of the
Picture, Company may in its sole discretion require Producer to grant to Company an undivided 50%
ownership interest in the copyright of the Picture for all purposes throughout the universe, which
Producer shall promptly do by signing any and all documentation necessary or desirable to effectuate
such transfer. Producer and LU (x) shall do such acts and execute such documents to further evidence
the grant or transfer, and (y) hereby appoint Company as their attorney-in-fact to do such acts and to
execute such documents consistent herewith in Producer's and/or LU's name in the event of Producer's
or LU's failure, refusal or unavailability to do so, such appointment being coupled with an interest and
irrevocable. In addition to, and notwithstanding anything to the contrary in the foregoing, the parties
hereby agree that Company and LU shall jointly control any and all Underlying Rights and Derivative
Rights (other than the ongoing exploitation of the Short Film), including without limitation all
subsequent film, television, internet, literary, live stage, interactive gaming and all other ancillary and
subsidiary rights in connection with Picture and the Underlying Rights and Derivative Rights,
throughout the universe in perpetuity; and such Underlying Rights and Derivative Rights may only be
exploited with the mutual agreement of both LU and Company, except for the rights in the China
License being granted to and solely controlled by Company pursuant to Paragraph 10.B below. In
subsequent Long Form Agreement, LU and Company agree to negotiate in good faith a process by
which non-China License related subsequent derivative productions may be initiated by either LU and
Company under certain circumstances if they are unable to reach mutual agreement regarding such
derivative productions. Provided that Argent has not breached any of its material obligations under any
of the agreements to which it is a party in connection with the Picture, Company agrees that Argent may
have a right of first negotiation ("First Negotiation Right") for up to 60 days to co-finance the first
subsequent audiovisual production (on a rolling basis only if Argent finances the immediately preceding
subsequent production). If after exercising its First Negotiation Right, the parties do not reach an
agreement for Argent to co-finance such subsequent production on terms acceptable to both LU and
Company, Company agrees that Argent will be entitled to receive a passive royalty payment ("Argent
Passive Payment") in an amount equal to 5% of I 00% of the aggregate rights compensation payable to
LU and Company solely as the copyright owners of the subsequent production rights to the Picture. By
way of clarification and for the avoidance of doubt, the Argent Passive Payment shall not be applicable
to, nor calculated on the basis of, any other compensation payable to LU or Company for their services,
financing activities, or otherwise in connection with any such subsequent production. For the avoidance
of doubt, subject to the approval rights of Company hereunder, the foregoing shaJI not in any way limit
or otherwise restrict Argent and/or LU from entering into any other agreement pertaining to Argent's
financial participation from and out of LU's or Bergvall's financial participation in the exploitation of
17631822.5 7
229720-10002
any Underlying and Derivative Rights provided that such participation is based upon and payable solely
out of LU's share of any sums, fees and/or proceeds paid with respect thereto.
9. Credit: Company shall be entitled to receive each of the following credits on-screen and in all
paid advertising for the Picture:
a. One animated production company logo at the beginning of the Picture in second position
only to the applicable distributor in a given territory, on a separate card, and one production company
logo at the end of the Picture;
b. Two presentation credits on screen on a separate card in the main titles of the Picture
(including one in the first position and one in the second position wh.ich may be accorded by Company
at its sole election to a Chinese distributor designated by Company);
c. Two individual "Produced by" credits for MM and Acogny, on a shared card, in the main
titles in not less than the fifth and the sixth position of such "produced by" credits, and contiguous to the
other "produced by" credits;
d. One VFX producer credit for MM, in the main titles, on a separate card
e. Up to four individual "Executive Producer" credits for designees to be named by Company,
in the main titles, on a card only to be shared among these individuals.
I 0. Distribution:
A. Distribution Outside of China. With respect to sales and distribution outside the China
Territory (as defined below), the parties agree that the sales agency fee payable collectively to CAA and
WME (as pre-approved domestic sales agent) shall not exceed 5% (i.e, 2.5% each) and the sales agency
fee payable to Bloom (as pre-approved foreign sales agent) shall not exceed 7.5%; provided, however,
that no sales agency fee shall be payable to Bloom with respect to any receipts from the China License.
All distribution agreements for the U.S./Canada, UK, Australia/New Zealand and South Africa, and any
other foreign licenses below the "takes" expressly approved in writing by Company shall be subject to
Company's express prior written approval. Frankfurt Kumit Klein and Selz PC is pre-approved as
domestic (U.S/North America) distribution legal counsel for the Picture and is entitled to a fee equal to
2% of the Gross Receipts, up to but not exceeding a cap of One Hundred Twenty Thousand U.S. Dollars
(USD$120,000), in accordance with the Waterfall.
B. Distribution in China. In consideration of a flat license fee of Two Million U.S. Dollars
(USD$2,000,000) ("License Fee"), payable by Company upon delivery of the Picture to Company or its
designated affiliate, LU and Producer hereby irrevocably grant to Company the sole and exclusive right
to (and/or sublicense to third parties the right to) market, distribute and otherwise exploit the Picture and
all elements thereof, and any and all allied and ancillary rights therein and thereto (including, without
limitation, all music, merchandising, publishing, clip rights, interactive game rights and theme park
rights), in any and all languages, in any and all media, whether now known or hereafter developed, in
perpetuity, in the territory ("China Territory") of the Greater China (including Mainland China, Hong
Kong, Macau, and Taiwan) ("China License"). Any and all proceeds derived from the exploitation of
the Picture in the China Territory shall be solely retained by Company and shall not be included in the
Waterfall calculation of Gross Receipts, other than the License Fee. If Company elects to cause the
production of an interactive game in the China Territory based upon the Picture, Company agrees to
negotiate in good faith with LU for the consulting and/or other services of Bergvall in connection with
such interactive game. If Company and LU are unable to reach agreement after negotiating for thirty
(30) days, Company shall have no further obligation to LU and/or Bergvall in connection therewith;
provided, however, that Company and LU agree to negotiate in good faith in the Long Form Agreement
the basis upon which Company would be willing to pay to LU a passive royalty in connection with the
exploitation of Company's interactive game rights in China.
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11. Assignment: This Agreement and any and all of Company's rights and entitlements hereunder
may be assigned by Company in whole or in part to any person or entity; provided however, that
Company will remain secondarily liable for all of Company's obligations hereunder. Producer and LU
shall not be entitled to assign this Agreement to a third party without Company' s express prior approval.
12. Insurance: Production of the Picture will be covered by all customary production insurance.
Producer will obtain essential element insurance for Bergvall, Fassbender and Schwarzenegger.
Producer agrees to name Company as an additional insured and loss payee on Producer's production,
errors and omissions and general liability insurance policies with respect to the Picture, which policies
and the terms thereof shall be subject to Company's prior approval.
13. Approvals: In addition to the Conditions Precedent set forth above, the following, together
with any replacements thereof, as well as the material terms and conditions of any agreements in
connection therewith, shall each be subject to Company's prior written approval (not to be unreasonably
withheld or delayed); provided that Producer shall accord Company meaningful, good faith advance
consultation regarding all key business and creative decisions not specifically subject to Company's
approval hereunder:
a. The budget and the financing plan for the Picture (including any changes and modifications
thereto) and the terms and conditions of any other financing contributions (including without limitation
any funding through third party reinvestments, soft money subsidies and German tax credit). The
Financing Plan in " Exhibit C" is approved by Company, although the terms and conditions of such
funding and the agreements relating thereto remain subject to Company's approval. Any so-called
"enhancements" of the Budget or other non-mandatory increase of the contingency (i.e., other than costs
that are required to complete and deliver the Picture pursuant to the completion bond) shall require the
express prior written approval of Company (Company hereby pre-approving, subject to the approval of
the Completion Guarantor, a reserve up to but not exceeding Forty Thousand U.S. Dollars
[USD$40,000] from any unspent contingency for the costs incurred in connection with a preview test
screening of the Picture, the specifics of which, e.g., timing, location, etc., shall be mutually agreed by
Company, LU and Producer); and any savings from the contingency shall be paid to reduce the
Company Junior Funding, and shall be paid directly to Company (i.e., not through the CAMA) from the
Completion Guarantor or Production Account (as the case may be). It shall be Producer's sole
responsibility to fund the entire Budget for the Picture other than the Company Funding, including all
overages, if any, and if Producer fails to do so, Producer shall be deemed in material breach of this
Agreement and Company shall have the right to exercise Company's Takeover Right set forth below.
Furthermore, the parties agree that regardless of how Producer raises any other financing required to
complete and deliver the Picture hereunder on or before the Delivery Date, including any budget
overages, Company's share of compensation, Net Profits and ownership in the Picture and Company's
interest in the Underlying and Derivative Rights as set forth herein shall not be reduced or diluted in any
manner, and any profit participations or other monies that Producer may be required to grant to third
parties shall be solely out of Producer's share thereof;
b. Cash flow schedule, production schedule, production locations (Germany and Bulgaria are
pre-approved) and final shooting screenplay;
c. Collection agent (Freeway and Fintage pre-approved), Completion Guarantor (European
Film Bonds pre-approved), key cast (e.g., Bergvall, Fassbender and Schwarzenegger pre-approved), key
creatives (e.g., director [Bergvall pre-approved], director of photography, production designer [Bassett
pre-approved], producer [Katzsmith, Westgren, Fassbender, Schwarzenegger (TBC), Pelle Strandberg,
Joe Neurauter, Bergvall, MM, George and one producer designated by Argent pre-approved]),
department heads, line producer [Buchner pre-approved], VFX vendors (Company f/s/o DNEG pre-
approved), production accountant, sales agents (CAA/WME as domestic sales agent and Bloom as
ROW foreign sales agent pre-approved), distributors (including a sole approval right for distributor of
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229 720-10002
the China Territory) and the material tenns of their agreements
d. To the extent within Producer's control, the worldwide marketing campaign for the initial
theatrical release of the Picture, including the date of initial theatrical release of the Picture in the U.S.,
and all related advertising, publicity and promotion;
e. Mutual approval of the final cut of the Picture, provided that in the event of disagreement
between the parties, alternate versions of the cut of the Picture may be screened and tested, the
reasonable and customary costs of which may be paid for with any unused savings from the contingency
allowance in the Budget, and the majority vote of the following five parties shall control: LU f/s/o
Bergvall, Katzsmith, B-Reel Films, Argent and Company, provided that said majority includes at least
one of Argent or Company. Notwithstanding the foregoing, subject to good faith consultation,
Company shall have the tie-break and final decision with respect to the final cut of the Picture for its
exploitation in the China Territory ("China Cut"). If Company elects to prepare a China Cut of the
Picture, the costs associated with the first China Cut delivered to Company as a mandatory deliverable
in accordance with the China Distribution Agreement shall be paid for out of the Budget financing or
any unused portion of the contingency allowance of the Budget. If there is no available contingency
allowance and additional costs are required to be incurred in Company's sole discretion for the China
Cut after Company's acceptance of delivery, such additional costs shall be paid for by Company or
Company's designee in China. In addition, Company agrees to give Bergvall the first opportunity to
oversee and consult regarding the alternative editing for the China Cut, provided (i) that Bergvall is
ready and available to render such services when required by Company, (ii) that Bergvall complies with
all of Company's instructions relating to such cut; and (iii) that Company shall not be obligated to pay
any additional compensation or pay for any additional costs or expenses relating to Bergvall's
involvement with the China Cut.
Subject to the Completion Guarantor's rights in connection with the Picture, Company shall have a
takeover right ("Takeover Right") in the same manner and on the same tenns as that of the Completion
Guarantor in the event that the Picture is going over-budget or behind schedule (without promptly curing
the same to Company's satisfaction, in its sole good faith business judgment), or LU or Producer
materially breach their respective agreements or obligations in connection with the Picture, including
without limitation, by failing to meet the delivery date, or by filing for bankruptcy. In the event
Company exercises its Takeover Right, Producer and LU hereby appoint Company as their attomey-in-
fact to do such acts and execute such documents consistent with this Agreement in Producer's and/or
LU's name, such appointment being coupled with an interest and irrevocable. If Company exercises its
Takeover Right, Bergvall shall remain engaged as the director of the Picture so long as Bergvall is not in
uncured material breach, and provided that he complies with all of the instructions of Company (and/or
the Completion Guarantor) in connection with the production, editing and post production of the Picture.
14. Additional Provisions:
a. This Agreement does not establish a relationship of partners or Jomt venture between
Company and Producer or LU; nor shall there be any fiduciary or other legal relationship of trust
established between Company and Producer or LU hereunder.
b. This Agreement may be executed by facsimile or PDF and in one or more separate
counterparts, each of whfoh shall constitute one and the same instrument and shall be deemed an original
for any purposes.
c. This Agreement shall be governed by the laws of the State of California applicable to
contracts entered into and wholly to be perfonned therein, and the parties consent to the exclusive
jurisdiction of the state and federal courts located in the State of California.
d. The parties anticipate entering into more fonnal documentation incorporating the above
terms as well as the other terms that may customarily be included in agreements of this type (including,
17631822.S 10
229720-10002
without limitation, indemnity, insurance, confidentiality, representations and warranties, etc.), but until
such time, if ever, this Agreement shall constitute a binding agreement among the parties in accordance
with its terms.
17631822.5 11
229720-10002
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day
and year first above written.
By: ~~k\-~0-'-/
____
Its:~-
17631822.5
13
229720-10002
PART A: All Collected Gross Receipts
1. To Collection Agent in payment of the agreed Collection Agent’s fee and expenses; then
2. To the Guilds to fund the Residuals Set-Aside; then
3. To the Sales Agent in payment of its Sales Commission of 7.5% in respect of the ROW
(excluding China) to CAA/WME in payment of its Sales Commission of 5% in respect of
Domestic; to Frankfurt, Kurnit, Klein in respect of Domestic legal expenses in the amount
of 2% and no greater than $120,000; then
4. To the Sales Agent in payment of its Sales Expenses of up to $150,000 (the “Sales
Expenses Cap”) plus any additional expenses outside the Sales Expenses Cap
approved by the financiers in writing; then
5. The remainder as per Part B and Part C
4. Creasun and Argent pro rata and pari passu in respect of any amount unrecouped in
Part C; then
And a 10% corridor during such tier to FFF (applicable against tier below); then
7. Pro rata and pari passu to:
9. Net Profits:
PART C: US/Canada
17631822.5 14
229720-10002
EXHlBITC
FINANCING PLAN
17631822.5 15
229720-10002
Kung Fury - Creasun
Total $33,406,335
Finance Plan
Creasun
2nd positon equity
Tax Credits
Reinvestment deals
German Tax incentive
EXHIBIT B
CANADIAN POST-PRODUCTION SERVICES AGREEMENT
RELATING TO THf, MOTION PICTURE ENTITLED "KUNG FURY 2''
BETWEEN:
(1) KUNG FURY 2 EUROPE UG (haftungsbeschrfinkt) with Company Number HRB 245509
whose registered office is Hiiberlstrasse. 5, 80337 Munich, Germany (herein referred to as the
"Copyright Owner" which expression shall include its successors in title, licensees and
assigns); and
(2) CREASUN ENTERTAINMENT USA INC. with Company Number [ ] whose registered
office is 6600 Sunset Blvd., 2nd Fl, Hollywood CA 90028 (herein referred to as the "Investor"
which expression shall include its successors in title, licensees and assigns); and
(3) Lightning Cobra Films Inc.. with Company Number U174629-4I whose registered office is
1000 rue Sherbrooke Ouest, Suite 2700, Montreal, Quebec H3A3G4 (hereinafter referred to as
the "service Provider" which expression shall include its successors in title, licensees and
assigns)
RECITALS
A. Copyright Owner owns and controls certain motion picture, subsidiary, allied and ancillary
rights in and to the theatrical feature film at present entitled " Kung Fury 2" (the "Picture");
B. Producer wishes to engage the Service Provider to provide certain post-production services
in respect of the Picture throughout the Term in accordance with the terms and conditions of this
Agreement; and
C. Service Provider has agreed to provide certain post-production services in respect of the
Picture throughout the Term in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants herein contained, and for other good and
valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto
agree as follows:
INTERPRETATION
1,4 Headings
The captions in this Agreement are for convenience of reference only and shall not be used to
define or interpret any of the terms or provisions hereof.
1.5 Invalidity of Provisions
Nothing contained in this Agreement shall be construed so as to require the commission of any act
contrary to law, and if any provision of this Agreement is held to be invalid or illegal under any material
statute, law, ordinance, order or regulation, such provision shall be curtailed and limited only to the extent
necessary to comply with such material statute, law, ordinance, order or regulation. Such curtailment or
limitation shall not affect the validity of the remainder of this Agreement or any other provisions hereof.
1.6 Applicable Law
This Agreement and all other documents provided for herein and the rights and obligations of the
parties thereto shall be governed by and construed and enforced in accordance with the laws of the State of
California applicable therein and the parties hereto inevocably attorn to the jurisdiction of the courts of
California.
1.7 Schedules
The following schedules are attached to and incorporated in this Agreement by reference and
deemed to be part hereof:
Schedule A - Definitions
Schedule B - Post-Production Services Budget
1.8 Miscellaneous
(a) unless the context otherwise requires, the singular shall include the plural and vice versa,
and in particular the definitions of words and expressions set forth in Schedule "A" shall be
applied to such words and expressions when used in either the singular or the plural form;
(d) references to, or to any particular provision of, a document shall be construed as ref'erences
to that document as amended to the extent permitted by this Agreement and in force at any
time; and
(e) "in writing" or "written" mean and include printing, typewriting or any electronic means of
communication capable of being permanently reproduced in alphanumeric characters at
the point ofreception.
ARTICLE 2
POST.PRODUCTION SERVICES
2.1 Post-Production Services
Producer engages Service Provider, throughout the Term, to provide and perform certain
post-production services in Canada in a first class manner consistent with the reasonable standards required
for the exploitation of international theatrical feature films (the "Post-Production Services"), including,
but not limited to: (i) engaging persons to render Post-Production Services for the Picture, including, visual
and digital effects approved in writing by Producer; and (ii) providing any other related post-production
services, as required by Producer; provided no act or omission to act shall be required of Service Provider,
over and above what has been agreed to under this Agreement, that could directly preclude Service Provider
fiom being entitled to or applying for, or receiving any f'ederal, provincial or other Canadian tax credit,
grant or subsidy, any Canadian refund in connection therewith or any proceeds therefrom and where such
act or omission shall impact the Service Provider's ability to claim tax credits, Service Provider and
Producer shall discuss the same in good faith to agree on a resolution (collectively, the "Tax Credits").
The Post-Production Services shall include all of the services and deliverables (including delivery
requirements) set forth in that certain visual effects services agreement between Service Provider and
Re:Define FX Ltd. dated as of [July 8ft 2019] (the "VFX Agreement"). Provided Service Provider is not in
breach hereunder, Producer hereby (i) grants to Service Provider such permission and (ii) licenses to
Service Provider such limited rights as Service Provider may need solely in order to perform the
Post-Production Services required pursuant to this Agreement and to apply for, receive and retain the Tax
Credits, as are applicable or available to the Picture.
2.2 Post-ProductionServicesBudget
The Post-Production Services shall be rendered in accordance with the final Post-Production
Services budget approved by the Producer for services rendered in Canada by the Service Provider, as set
out in Schedule B attached hereto (the "Post-Production Services Budget"), subject only to such changes
in the Post-Production Services Budget as the Investor may approve in writing. The Post-Production
Services Budget shall include, without limitation: (i) any and all payments made to Re:Define FX Ltd.
pursuant to the VFX Agreement (which are exclusive of any Dolby license fees, if applicable), and
payments relating to any approved overages; (ii) any ancillary payments required to perform the
Post-Production Services, as approved by Investor in writing and as invoiced by Service Provider to
Investor. Notwithstanding anything else herein contained, the Post-Production Services Budget shall not be
229720-10002
increased or decreased without the prior written consent ofProducer hereunder. The Producer shall not be
subject to any Canadian provisional or federal taxes with respect to this Agreement. It is being understood
by the Parties, however, that some of the actual shots willchange based upon the edit of the Picture, with
such changes to be reflected in Change Orders (as defined in the VFX Agreement) as approved by Service
Provider and Producer's Representative (i.e., Minglu Ma), and provided that the Maximum Post-Production
Fee shall remain the same.
(b) Completion Dates. The Service Provider shall advise the Producer in a timely fashion of
the dates upon which the Post-Production Services are commenced and completed. The
Service Provider acknowledges and agrees that Service Provider shall complete all of
Service Provider's services and deliver all required deliverables hereunder to Producer on
or before October 5th ,2020 ("Delivery Date"). Timely cornpletion of Service Provider's
services is of the essence of this Agreement.
(c) Compliance with Applicable Law. The Service Provider shall comply with all applicable
laws, statutes, rules, regulations and requirements of all governmental agencies and
regulatory bodies and shall duly and promptly apply for and provide all material consents,
licenses and permits which may be required by any governmental agency or authority of
competent jurisdiction in connection with this Agreement and the provision of the
Post-Production Services.
(d) Approved Schedule. The Service Provider shall fully comply with the approved schedule
set forth on Schedule B and to deliver the Post-Production Services at the earliest possible
date consistent with said Schedule B and in any event by the Delivery Date, unless a delay
has been caused by Producer in providing materials to Re:Define or through a change in
delivery date through a Change Order.
(e) Approved Budget. The Service Provider shall provide the Post-Production Services in
accordance with the Post-Production Services Budget.
(0 Copyright Assignments. The Service Provider shall ensure that any personnel it engages
or employs to provide post-production services shall render such services as a "work made
for hire" specially commissioned as part of an audio visual work, i.e. the Picture, and in any
event all such personnel may not claim any copyright or moral rights related to the Picture
and shall execute such assignments or waivers as are approved in advance by the Producer.
(g) Keep Proper Books. The Service Provider shall keep accurate and complete books of
account and records in which full and current entries shall be made of all financial
transactions, assets and business ofthe Service Provider and permit representatives ofthe
Producer access thereto at all reasonable times to inspect such books and records and to
make extracts therefrom or copies thereof.
ARTICLE 3
(a) The Investor has the absolute right and authority, jointly with the Copyright Owner, to engage
the Service Provider to render the Post-Production Services in accordance with this
Agreement.
(b) Non-Resident. The Investor is not a resident of Canada for purposes of either the Income
Tax Act (Canada) or the Excise Tax Act (Canada) and the Investor is not registered for the
purposes of CST under the Excise Tax Act (Canada).
(c) Not An Eligible Production Corporation. The Investor does not qualiff as an eligible
production corporation or the equivalent thereoffor the purposes oftax credits. For greater
certainty, Investor acknowledges that it is not: a taxable Canadian corporation, the
activities of which in the year are primarily the carrying on through a permanent
establishment in Canada of a film or video production business or a film or video
production services business.
(d) No Litigation. To the best of the Investor's knowledge and beliel there is no matter,
litigation, tax claim, proceeding or other dispute pending or threatened against or affecting
the Investor or the Picture, the adverse determination of which might materially and
(g) Due Execution and Enforceability. This Agreement has been duly executed and
delivered by the lnvestor and constitutes a legal, valid and binding obligation of the
Investor, enforceable against it in accordance with its terms, subject to bankuptcy,
insolvency, arrangement and the laws generally affecting the enforceability of creditors'
rights (other than those pertaining to fraudulent assignments and preferences) and, except
as expressly provided herein, the availability, in the discretion of a court of competent
jurisdiction, of equitable remedies.
(h) No Contravention. To the best of the Investor's knowledge and belief, the execution and
delivery of this Agreement does not, and the performance by the Investor of its obligations
under this Agreement will not contravene any law, regulation, or by-law applicable thereto
and all consents, licenses, approvals, authorizations, or exemptions of any governmental
body or regulatory authority required or advisable for or in connection with the execution,
delivery and performance by the Investor hereunder have been obtained and are in full
force and effect.
(i) Exploitation of the Picture. The Picture has been produced primarily for consumption,
use and enjoyment outside of Canada. By way of clarity, and for the avoidance of doubt,
however, the foregoing representation shall not preclude the distribution and other
exploitation of the Picture in Canada.
3.2 Survival of Representations and Warranties
The representations and warranties contained in Section 3.1 shall remain in full force and effect so
long as and shall be deemed to be repeated by the Investor on each day the Investor shall have any
obligation to the Service Provider hereunder.
3.3 Representations and Warranties of the Copyright Owner
The Copyright Owner represents, warrants and covenants to the Service Provider AS
follows, and acknowledges that the Service Provider is relying thereon without independent inquiry in
entering into this Agreement:
(a) Copyright. The Copyright Owner holds 100% of the copyright in and to the Picture
throughout the period ofPost-Production Services in Canada and hereby consents to and
joins in the engagement of the Service Provider.
(b) Trade Marks and Defamatory Material. To the best of the Copyright Owner's
knowledge and belief, the Underlying Rights do not, nor do any ofthe contents thereof nor
the sound and/or musical and literary material used in connection with the Picture, violate
or infringe any trade mark, trade name, copyright, patent, contractual personal property or
(c) Corporate Power. Copyright Owner has the full right, power and authority to enter into
and perform its obligations hereunder.
(d) Due Execution and Enforceability. This Agreement has been duly executed and
delivered by the Copyright Owner and constitutes a legal, valid and binding obligation of
the Copyright Owner, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, arrangement and the laws generally affecting the enforceability of
creditors' rights (other than those pertaining to fraudulent assignments and preferences)
and , except as expressly provided herein, the availability, in the discretion of a court of
competent jurisdiction, of equitable remedies.
(a) Corporate Power. The Service Provider is a corporation formed under the laws of
Canada and extra-provincially registered in the Province of Quebec and has the full right,
power and authority to enter into and perform its obligations hereunder.
(b) No Contravention. The engagement of the Service Provider hereunder and the provision
of the Post- Production Services shall be in a first class manner consistent with the
reasonable standards required for the exploitation of international theatrical feature films
and do not and will not conflict with, or result in a breach of the terms, conditions, or
provisions of, or constitute a default under, any agreement or instrument to which the
Service Provider is a party. The Service Provider further warrants that the provision of the
Post-Production Services by Service Provider will not contravene any law, regulation, or
by-law applicable thereto and all consents, licenses, approvals, authorizations, or
exemptions of any governmental body or regulatory authority required or advisable for or
in connection with the execution, delivery and performance by the Service Provider
hereunder have been obtained and are in full force and effect.
(c) No Litigation. There is no matter, litigation, tax claim, proceeding or other dispute
pending or threatened against or affecting the Service Provider or its property, the adverse
determination of which might materially and adversely affect the Service Provider's
financial condition or operations or impair the Service Provider's ability to perform its
obligations hereunder.
(d) Due Execution and Enforceability. This Agreement has been duly executed and
delivered by the Service Provider and constitutes a legal, valid and binding obligation of
the Service Provider, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, arrangement and the laws generally affecting the enforceability
' ,ost-l'roduction Senicet Asrecmcnt ,*, -
[[Tiil,i,]/,
229720-10002
of creditors' rights (other than those pertaining to fraudulent assignments and
preferences) and the availability, in the discretion of a court of competent jurisdiction,of
equitable remedies.
(e) Incorporation. The Service Provider was incorporated for the purpose of providing the
Post-Production Services for the Picture and will not, prior to receipt of the Tax Credits,
engage in any other activity without the prior written consent of the Producer.
(0 No assignment, etc. The Service Provider shall not license, assign, sell, transfer or
encumber the Picture or any works or rights relating to the Picture except to the Producer
as explicitly permitted by this Agreement.
(e) Tax Residence. The Service Provider is, and at all relevant times, will maintain a
permanent establishment in Canada for purposes of the Income Tax Act (Canada).
(h) Results and Proceeds. All of the results and proceeds of Service Provider's services
hereunder shall be original with Service Provider, except to the extent based on or
incorporating materials specifically provided to Service Provider by Producer, and that
the Copyright Owner shall be the exclusive owner of all of the results and proceeds of
Service Provider's services in connection with the Picture. free and clear of any third
party claims relating in any way to Service Provider or any of the services provided by
Service Provider in connection with the Picture.
ARTICLE 4
COMPENSATION
4.1 Production Fees
(a) As compensation for the full and satisfactory provision of the Post-Production Services,
and all of the other rights and benefits of the Producer under this Agreement, the Investor agrees to pay the
following fee to the Service Provider: (i) an amount equal to the "Maximum Post-Production Fee", as
defined in the Post-Production Services Budget attached hereto as Schedule "8", and (ii) any other amounts
as approved by Investor and/or as set forth in the Post-Production Services Budget, provided that the total
fee in whatever nature payable by Investor or the Copyright Owner hereunder shall in no event exceed Ten
Million U.S. Dollars ($10,000,000) ("Cap") regardless of any change made to the Post-Production Service
Budget and that, notwithstanding anything to the contrary contained in the VFX Agreement, any amount
exceeding the Cap shall be borne by Service Provider.
(b) The Producer acknowledges and agrees that Service Provider may apply for and retain the
Tax Credits and the interim financing thereof, or the proceeds therefrom, shall be used to pay the balance of
any amounts remaining within the Post-Production Services Budget.
(c) The parties further agree that payment of the certification fees and all applications, action,
filings and/or other processes or procedures associated with the application for the Tax Credits will be the
responsibility of the Service Provider.
5.3 To the extent necessary to effect the same the Service Provider irrevocably sells, grants, transfers to
the Copyright Owner its active interest in and Ownership of the Materials.
ARTICLE 6
CREDITSAND PUBLICITY
6.1 Quebec Screen Credit
Producer shall include the mandatory "QUEBEC" symbol followed by the text "Production
Services Tax Credit" in the end credits of all versions (domestic and international) of the Picture, where
such credits typically appear, provided that casual or inadvertent failure to do so shall not be a breach ofthis
Agreement.
6.2 Any press releases and publicity materials issued by or on behalf of the Service Provider relating to
the Service Provider's and/or any designee of the Service Provider's involvement with the Picture shall be
subject to the prior written approval of each of Investor and the Copyright Owner.
ARTICLE 7
INSURANCE
7.1 Insurance
The Service Provider shall maintain with financially sound and reputable insurance companies or
associations specializing in motion picture insurance, and acceptable to Producer acting reasonably,
insurance in accordance with the current standards of the motion picture industry in compliance with the
insurance requirements set out in any of the agreements entered into in connection with the Post-Production
Services to insure against, among other risks:
(a) loss or destruction of the master tape, original negative or sound track of the Picture or of
the sets, props and equipment used in connection with the Post-Production Services;
(b) towards third parties for death, injury and damage to property;
(c) Iintentionally omitted] ;
(d) liability for infringement of copyright and for libel and slander and for defamation of
character and for invasion ofprivacy and right ofpublicity; and
(e) such other types of insurance in such amounts which are generally accepted in the motion
picture industry and which the Producer may reasonably request from time to time and
such policies shall provide that in the event any of the perils insured against materialize, the
insurance proceeds will be sufficient to permit the full recovery of the loss including any
required re-shooting for the completion of the Picture.
l0
Post-PrutLluction Seruices Agrecment (QC) - "
[Kung Fury 2] "
18334720.11
229',120-10002
ARTICLE 7A
DIGITAL BACK-UP PROCEDURES
Service Provider shall provide to Producer details of the procedures by which Service Provider
backs up digital files and assets which form part of the Post Production Services. Due to the unique nature
of this Picture, and the amount of data required to complete the Post Production Services, Service Provider
shall back up all essential elements, on an incremental and rolling weekly basis, which shall include all
progressive and creative materials consisting oi but not limited to, flowgraphs, shape trees, architectural
models and textures at a location other than the Service Provider's main premises. Producer shall have prior
approval of Service Provider's back up facility which will adhere to the reasonably applicable first class
VFX facilities industry standard security requirements
ARTICLE 8
(e) the completion of deliverables is prevented or interrupted because of force majeure events,
including, without limitation, any labour dispute, fire, war or governmental action, or any
disruptive events beyond Service provider's control and such disruption continues for more
than 4 weeks.
ARTICLE 9
NOTICE
9.1 Notices
Except as otherwise expressly provided herein, any notice, request, demand or other communication
provided for hereunder, to be given shall be in writing and shall be personally served by courier or
messenger or sent by facsimile transmission and shall be deemed to have been given when, personally
served, or when transmitted by facsimile (as verified by transmission report), as the case may be. The
addresses ofthe parties (until notice of a change thereof is served) shall be as follows:
Hiiberlstr. 5,
80337 Munich
Germany
Attn: Philip Westgren
Email : philip.westgren@brf.co
ARTICLE 10
GENERAL
10.1 Relationship of the Parties
The relation of the Service Provider to each of Copyright Owner and Investor, as established by
this Agreement, is that of an independent contractor and nothing contained in this Agreement shall
be construed to: (i) give either party the power to direct or control the day to day activities of the
other; (ii) constitute the parties as joint venturers, partners, co-owners or otherwise as participants
in a joint undertaking; (iii) constitute the Service Provider as an agent, legal representative or
employee of the Producer; or (iv) authorize or permit either party or any director, officer,
employee, agent or other person acting on its behalf to incur on behalf of the other party any
obligation of any kind, either express or implied, or do, sign or execute any things, deeds, or
documents which may have the effect of legally binding or obligating the other party in any
manner in favour of any Person. All financial and other obligations associated with the business of
the Service Provider are the sole responsibility of the Service Provider, and all financial and other
obligations associated with the Copyright Owner and Investor are the sole responsibility of each of
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Po.st-Production Sen,ice.s Agrcement (QC) "lKung Fury 2l '
I 8334720. I I
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the Copyright Owner and Investor, respectively. Investor and Copyright Owner shall each be
responsible for their own actions, and neither shall be jointly liable for any breach by the other.
10.2 Indemnities
(a) Service Provider. The Service Provider agrees to defend, protect, indemnify and hold
harmless the Producer, and each of them, and each of their respective officers, directors,
employees, representatives, and agents (collectively, the "Producer Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments. suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever (including, the fees and
disbursements of counsel for the Producer Indemnitees) in connection with any dispute, action, suit
or claim or any investigative, administrative or judicial proceeding imposed on, incurred by, or
asserted against the Producer Indemnitees (whether direct, indirect or consequential and whether
based on any federal, provincial or state laws or other statutory regulations, under common law or
at equitable cause, or on contract or otherwise), arising from or in connection with any breach by
the Service Provider ofany ofits covenants, agreements, representations or warranties hereunder or
any act or omission of Service Provider in connection with the Post-Production Services (the
"Producer Indemnified Matters"); provided, however, that the Service Provider shall have no
obligation to a Producer Indemnitee hereunder with respect to the Producer Indemnified Matters to
the extent caused by or resulting from the willful misconduct of a Producer Indemnitee, as
determined by a final judgment of a court of competent jurisdiction. All of the foregoing
indemnification and obligations of the Service Provider shall survive the termination of the other
provisions of this Agreement.
(b) Producer. Producer agrees to defend, protect, indemnify and hold harmless the Service
Provider and its parent and sole shareholder, Entertainment Partners Canada Inc. and their
respective officers, directors, employees, agents and Affiliates (collectively, the "Service Provider
Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, the reasonable outside fees and disbursements of counsel for the Service
Provider Indemnitees) in connection with any dispute, action, suit or claim or any investigative,
administrative or judicial proceeding imposed on, incurred by, or asserted against the Service
Provider Indemnitees (whether direct, indirect or consequential and whether based on any federal,
provincial or state laws or other statutory regulations, under common law or at equitable cause, or
on contract or otherwise) arising from or in connection with any breach by the Producerof any of its
covenants, agreements, representations or warranties hereunder (the "Service Provider
Indemnified Matters"); provided, however, that the Producer shall have no obligation to a Service
Provider Indemnitee hereunder with respect to Service Provider Indemnified Matters to the extent
caused by or resulting from the wilfulmisconduct of a Service Provider Indemnitee, as determined
by a final judgment of a court of competent jurisdiction, or to the extent covered by Producer
Indemnified Matters. All of the foregoing indemnification and obligations of the Producer shall
survive the termination of the other provisions of this Agreement.
10.3 Tax Credits
Producer shall provide Service Provider and its permitted assignees with all assistance which may
be reasonably necessary for Service Provider and its permitted assignees, to apply for any and alltax credits
and proceeds therefrom in relation to the Tax Credits. Producer acknowledges that Service Provider intends
to apply for the issue of an accredited Film or Video Production Services Certitlcate (as defined in
Section 125.5 of the Income Tcu Act (Canada)) in respect of the Post-Production Services and for any
t4
l'osl-l'roduction Seru-ices Agreement (QC) "
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I 8334720. I I
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comparable or equivalent cerlification required under applicable provincial Income Tax Legislation as a
condition of entitlement to the Tax Credits. Copyright Owner shallcause to be executed and delivered an
officialdesignee affidavit, chain of title documentation, and all such other documentation as is reasonably
required to be submitted by Service Provider to any applicable governmental authority in order to obtain in
the most expeditious manner such accreditation. Service Provider agrees that it will apply in the most
expeditious manner for all Tax Credits and Tax Credit Refunds to which it is, or may reasonably be
expected to be, entitled, By way of clarification and for the avoidance of doubt, the Service Provider shall
remain obligated to perform all of the Post-Production Services required to be performed by Service
Provider hereunder regardless of any failure of Service Provider to obtain any such Tax Credits or Tax
Credit Refunds for any reason whatsoever. If the Copyright Owner wishes to assign, sell, transf'er or
otherwise dispose of its interest in the copyright in the Picture, as a condition precedent to such assignment,
sale, transfer or other disposition, Copyright Owner shall cause the assignee, purchaser, transferee or other
owner of the copyright in the Picture to comply with this Section 10.3, including by way of delivering an
official designee affidavit to Service Provider and its permitted assignees. By way of clarification and for
the avoidance ofdoubt, the foregoing sentence is not intended to, and shall not be construed in any way to
prohibit or otherwise restrict the ability of the Producer to license to any third party the right to distribute or
otherwise exploit any distribution, marketing, exhibition and/or other exploitation rights in or to the Picture.
Copyright Owner and Investor further acknowledge and agree that Service Provider shall use the proceeds
of the Tax Credits and the interim financing thereof to pay the remaining Fees owing to Re:Define Fx Ltd..
For the avoidance of doubt, all expenses in relation to the application for Tax Credits shall be bome by
Service Provider and shall not be borne by Producer. The Copyright Owner and Investor shall each be given
a copy of the Film Tax Credit Application and Certification from the Service Provider within l5 days of its
issue.
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Post-l'loduction Sen,ices Agreentent (QO) - "
I Kung l;ury 21 "
I 8334720. I I
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
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Post-kodrction kruices Agrecmeut (QC) * "[KMg fitry 2] "
I 8334720. I I
229720-t0002
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
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Lightning Cobra Films Inc.
t6
Post-Produclion Services ,4greement (QC) - "IKung Fury 2J "
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SCHEDULE "A"
DEFINITIONS
In addition to the terms defined within this Agreement, the following terms have the following
meanings:
(a) "Affiliate"means any Person owned or controlled by, controlling or under common control with
the Copyright Owner, Investor or the Service Provider, as the case may be. For purposes of this
Agreement, ownership directly or indirectly of more than fifty percent (50%) of one hundred
percent (100%) of the voting stock and/or other voting equity security of a Person shall be deemed
"control";
"Agreement" means this Post-Production Services agreement as may, from time to time, be
amended, supplemented, modified, extended, renewed or replaced. All uses of the words "hereto",
"herein", "hereofl' and "hereunder" and similar expressions refer to this Agreement and not to any
particular section or portion of it and, unless otherwise stated, all references to Articles, Sections,
Subsections and Schedules refer to articles, sections, subsection and schedules of this Agreement;
"Business Day" means any day of the year on which banks are open for business in United
Kingdom
"Federal Tax Credit Provisions" means Section 125.5 of the Income Tm Act (Canada) and draft
Regulation 9300 thereto, and the guidelines of the Canadian Audio-Visual Certification Office
issued in connection therewith;
(e) "Force Majeure" means any event beyond one party's control which delays, hampers, interrupts
or interferes with the performance of its obligations hereunder, including, fire, earthquake, flood,
epidemic, strike, lock-out or other industrial action, civil disturbance, waro act of God. death, illness
or incapacity of or material breach by any principal member of the cast or crew of any statute, law
or judicial order or any other event completely beyond the control or influence of the respective
party. Except as expressly set out in the foregoing, in no event shall inclement weather be deemed
to be or considered as an event of Force Majeure for the purposes of this Agreement;
(0 "GST/HST" means the Goods and Services Tax or Harmonized Sales Tax, as applicable, payable
under Part IX ofthe Excise Tax Act (Canada);
(e) "including" and "includes" shall be deemed to be followed by the statement "without limitation"
and neither of such terms shall be construed to limit any rvord or statement which it follows to the
specific or similar items or matters immediately following it;
(h) "Legislation" means the Federal Tax Credit Provisions and the relevant provincial tax credit
legislation and any regulations and guidelines issued in connection therewith, relating to the
province or provinces in which the Production is produced;
(i) o'Materials" means any and all materials or elements rendered, provided, supplied or acquired by
the Service Provider pursuant to this Agreement;
0) "Person" means any individual, corporation, paftnership, joint venture, association, trust or
unincorporated organization or other entity whatsoever, including, a foreign state, political
subdivision thereofor any agency ofsuch state ofsubdivision.
l8
Post-l'loduction Senice,s Agrcenent (QL)) - "
lKung Fury 21 "
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(k) "Picture" means the theatrical motion picture entitled "Kung Fury 2", based on the Source
Material;
(l) "screenplay" means the screenplay for the Picture together with the title, themes, contents,
narration, pieces to camera, translations, adaptations and all other versions and drafts therefor;
(m) o'source Material" means any and all literary, dramatic, musical and artistic material incorporated
in the Picture, including the Screenplay and all underlying material upon which the Screenplay is
based.
(n) "Term" means the term commencing on the date hereof and ending on the earlier of:(i) the date on
which Completion and Delivery of the Post-Production Services has been rnade; [(ii) the date of
termination hereunder;] and (iii) as mutually agreed in writing between the parties;
(o) "Third Party Agreements" has the meaning ascribed to it in Section 2.5; and
(p) "Underlying Rights" means any and all intellectual property rights (including rights of copyright,
trademark and patent) and other rights of whatsoever nature in the Source Material but only insofar
as such rights are required for production, delivery, post-production and exploitation ofthe Picture.
t9
"
Post-l'ro.hrction Sanice,r Agrccnlent (Q<:) - "
[Kung Fury 2]
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SCHEDULE "B''
Payable as follows:
Milestone
15 business days 1.75m 17.5o/o 17.5Y"
after full execution
of Agreement
2 The higher of 100 One business day lm l0o/o 27.50
shots or 77o of following
total shots Producer's
Representative's
acceptance
J The higher of 250 One business day lm 10% 37.5%
shots or 28%o of following
total shots Producer's
delivered by Representative's
0U3U20 acaeptance
4 The higher of450 One business day 1.25m 12.5% 5j%o
shots or 3l%, of following
total shots Producer's
delivered by Representat ive's
0313U20 acceDtance
5 The higher of 850 One business day 1.25m 12.50/o 62.5o/o
shots or 600/o of following
total shots Producer's
delivered by Representative's
0413U20 acceDtance
6 The hieher of One business day t.25m 12.5% 75Y"
20
l'ost-l'rocluction Scnice,r Agrccnlent (Q{l) - "ftang 1;rrr 21"
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1050 shots or following
74% oftotal shots Producer's
delivered by Representative's
0613120 accentance
7 The higher of One business day 1.25m 12.5o/o 87.5%
1275 shots or following
90% oftotal shots Producer's
delivered by Representative's
0813U20 accentance
8 100% oftotal One business day 1.25m 12.5o/o l00Vo
shots delivered in following
4Kby 10105120 Producer's
Representative's
acceDtance
Note that the total number of shots currently set forth on this Schedule "B" may change pursuant to
Change Orders. Each payment shall be conditioned upon Producer's Representative's acceptance of the
applicable shots delivered by the corresponding Service Provider delivery date set fbrth above.
2t
I'ost-l'ntduction Seruice.\ Atlrecnlent (Q{:) - "IKung Fury 2]"
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SCHEDIJLE ..C"
ASSIGNMENT OF COPYRIGHT
FOR GOOD AIID VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, Lightning Cobra Films lnc.. hereby irrevocably grants, sells, assigns,
transfers and otherwise conveys all of its rights of every kind and nature whether now known or existing or
hereafter created or acquired in and to the motion picture presently entitled "Kung Fury 2" including,
without limitation, the Materials and the benefit of the Third party Agreements any and all rights under
copyright and any renewals or extensions thereofincluding any ancillary subsidiary and derivative rights
thereto, to Kung Fury 2 Europe UG (haftungsbeschrlinkt), whether arising before, on, or after the date of
this Assignment.
Title:V, ce Prt,iderr*
PROVINCE OF ONTARIO
On this J+r-. day ofJe--onr-, ZOffit"fore me, the undersigned, a Notary Public in and for said
province,perso;[yfuknowntobe]andwho,beingdulysworn,diddepose
and say that she/he resides at vrc.u-,.ra,aN and that she is an authorized signatory of Service Provider,
a corporation duly organized under the-laws of Canada, the firm described in and which executed the
foregoing instrument and that she/he signed her/his names hereto.
22
Post-Production Senices Agreenent (QC) - "lKung FnrT 21 "
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Theforegoingassignmentisherebyacceptedbytheundersignedasot--,20l9.
Between:
Lightning Cobra Films Inc. whose registered offrce is 1000 rue Sherbrooke Ouest, Suite 2700,
Montreal, Quebec H3A3G4 (hereinafter referred to as the o'service Provider" which expression shall
include its successors in title, licensees and assigns)
And
Re:Define FX LTD. of 810 Rue St. Antoine E, Montreal, QC, H2Y 1A6, a 100% wholly-owned
subsidiary of Dneg PLC (hereinafter refened to as the '(Contractor" which expression sha[ include its
successors in title, licensees and assigns)
WHEREAS
(A) Kung Fury 2 Europe UG (haftungsbeschriinkt) and Creasun Entertainment USA lnc. have engaged
the Service Provider to provide certain post-production services in connection with a feature film
eurrently entitled "Kung Fury 2" (the "Film") throughout the term in accordance with the terms
and conditions of the Post-Production Services Agreement dated July 8,h 2019 (the ',post
Production Agreement"),
(B) The Service Provider wishes to engage Contractor to provide post-production services in
connection with the Film and Contractor agrees to render the Services (as defined below), on the
terms and conditions set out in this Agreement.
IN CONSIDERATION of the mutual covenants and benefits set out in this Agreement, the parties agree
as follows:
I. Provision ofServices
1.1. Contractor shall provide post-production services, in connection with the design, creation and
production of the effects on the Film on the terms and conditions (collectively the "services")
set out in the First Schedule, in a timely and first class professional manner consistent with
industry standards and according to this Agreement and the results of the Services (the
"Deliverables") will conform to the specifications set out in the First Schedule. Kung Fury 2
Europe UG (haftungsbeschrdnkt) ("Copyright Owner") and Creasun Entertainment USA Inc.
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("Investor") shall herein collectively be referred to as the "Producer". Provided the Service
Provider (with the assistance of Producer) provides the relevant materials to Contractor at least
5 days before Contractor is due to commence work in accordance with such schedule,
Contractor agre€s to effect delivery of the final version of the Deliverables (,,Final
Deliverables") to Producer no later than October sth, 2020 (the "Delivery Date"), provided that
no liability shall attach to Contractor for any delay caused directly by Producer. Contractor
acknowledges that Contractor's timely delivery of the Deliverables is an essential term of this
Agreement.
1.2. The Service Provider's Representative and/or the Producer's Representative (as defined in
Clause 5.4 below) shall be entitled to view any and all po(ions of Contractor's work in
progress (the times and places ofsuch review shall be as reasonably agreed by the Parties),
1.3. Contractor shall provide to Producer's Representative and Service Provider's Representative
details of the procedures by which Contractor backs up digital files and assets which form part of
the Services. Due to the unique nature of this Film, and the amount of data required to complete
the Services, Contractor shall back up all essential elements, on an incremental and rolling
weekly basis, which shall include all progressive and creative materials consisting of, but not
limited to, flowgraphs, shape trees, archilectural models and texfures at a location other than the
Contractor's main premises. Service Provider and the Producer's Representative shall have prior
approval of Contractor's back up facility which will adhere to the reasonably applicable good
industry standard security requirements, provided that Producer's Representative shall have a tie
break in the case of a conflict.
t.4. Contractor shall not sub-contract any of the Services without the prior written approval of the
Service Provider, Copyright Owner and lnvestor, provided thal Investor shall have a tie break in
the case of a conflict . For clarity, Services done by Contractor's subsidiaries and affiliated
companies shail not be deemed to be sub-contracting within the meaning of this Clause, subject
to Tax Credit requirements under Clause 3 of this Agreement. The Service Provider agrees that it
shall not unreasonably withhold or delay such approval. Contractor shall remain responsible for
ensuring that all subcontracted work conforms to all applicable terms of this Agreement
(including, without limitation, all confidentiality requirements).
1.5. Contractor shall provide each of Service Provider and Producer's Representative with a regular
written production report, setting out information on which elements of the Film have been
completed and any other detail mutually agreed by the parties.
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2. Fee
2.1. In consideration for the Services the Service Provider agrees to pay Contractor the sum as per the
consideration set forth in the Second Schedule (the "Fees") plus Canadian provincial and federal
taxes, including but not limited to QST and GST (collectively, "Taxes"). The Fee has been
calculated on the basis of a specified number of shots as detailed in the Third Schedule and the
final bid as detailed in the Fifth Schedute; it being understood by the Parties, however, that some
of the actual shots will change based upon the edit of the Film, with such changes to be reflected
in Change Orders as approved by Service Provider and Producer's Representative following
their consultation with Contractor's Representative, and provided that the Net Fee shall remain
the same. The Service Provider agrees that timely payment of the Fees shall be an essential terrn
of this Agreement.
2.2. The Service Provider shall reimburse Contractor for any third-party expenses, which have been
pre-approved in writing by the Service Provider, incuned in connection with Contractor's
provision of Services under this Agreement ("Expenses) provided that in no circumstance shall
the total amount payable by lnvestor including Expenses (if any) exceed the Net Fee. For the
avoidance ofdoubt, all sums payable by lnvestor hereunder shall be exclusive ofTaxes and shall
exclude all Dolby licence fees, if any.
2.3. The Fees and Expenses shall be paid by the Service Provider to Contractor by bank transfer to
Contractor's bank account in USD as follows::
3. Tax Credits
3.L In connection with the Services, the Parties acknowledge that the Service Provider is entitled and
intends to apply for and receive the benefits of any and all applicable federal, national,
provincial, state or other tax credits, including without limitation, the Canadian Federal Film or
Video Production Services Tax Credit, established pursuant (o the provisions of section 125.5 of
the Income Tax Act (Canada) and all equivalent, matching or additional provincial tax credits
(collectively, the "Tax Credits"). Contractor agrees to (i) provide any and all information and
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documentation and/or execute any documents in a timely maruter that the Service Provider
reasonably requires to file for and receive the Tax Credits, (ii) assist and cooperate with the
Service Provider to enable the applicable authorities to issue the Tax Credits and (iii) maximize
the quali$ing expenditures relating the Tax Credits, Contractor further agrees not to take any
action(s) that might prove detrimental to or impede the Service Provider's efforts to obtain the
Tax Credits, Contractor hereby irrevocably assigrs any rights it has in the Tax Credits to the
Service Provider,
3.2. Investor has agreed to fund Service Provider an amount equal to the "Net Fee" (as set forth in the
Second Schedule and referenced as the Maximum Post Production Fee in the Post Production
Agreement), the terms and conditions of which funding are set forth in the Post Production
Agreement and provided neither lnvestor nor Copyright Owner shall have any obligation to fund
any amount in excess of the Net Fee.
4.1. Contractor irrevocably assigns (by way of present assignment of existing and future copyright),
with full title guarantee to the Service Provider, the copyright and all other rights in and to in the
products of the Services in relation to the Film, including the Deliverables, to hold for the full
period of copyright and thereafter in so far as is possible in perpetuity and Contractor agrees to
execute and deliver hercwith to the Service Provider an Assignment of Copyright in the form
attached as the Seventh Schedule. For the purposes of US copyright law, the products of the
Services shall be deemed a "work-made-for-hire" for the Service Provider, and for the purposes
of Canadian Copyright laws, as a "work made in the course of employment" for the Service
Provider. Contractor unconditionally waives in perpetuity the benefit of any provision of law
known as "moral rights" or "droit moral" or any similar law in any country of the world. To the
extent necessary to effect the same, Contractor irrevocably sells, grants and transfers to the
Service Provider its entire interest in and ownership of the Deliverables.
4.2. For the avoidance of doubt and subject to the provisions of Clause 3. 1 , the Service Provider
agrees that it shall not be entitled to any rights including but not limited to transfer or assignmcnt
of any intellectual property rights, patent, work processes or other software rights which are
already owned by Contractor prior to this Agreement or such software or prograrnmes which are
utilised as base platform towards development of the Delivcrables. Clauses 4.1 and 4,2 will
survive the termination or expiration of this Agreement.
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5. Deliverv and Acceptance
5.1. Contractor shall deliver the Deliverables by the Delivery Date in accordance with the Delivery
Schedule under the Fourth Schedule, unless a change to the Delivery Date or shots increases
from the specification has been previously agreed in writing by the parties through a Change
Order, Any Change Order must be approved in writing by the Service Provider ancl Producer's
Representative following consultation with Contractor.
5.2, On the Producer's Representative's physical receipt of the Deliverables, the Producer's
Representative shall have a period of five (5) business days in which to reject the Deliverables
solely on the basis that they do not conform to the technical specifications set out in the Services
or otherwise in this Agreement. Any rejection of the Deliverabies must be set out by the
Producer's Representativein a written notice to Contractor (a "Rejection Notice") stating the
reasons why the Deliverables do not conform to the requirements of this Agreement.
5.3 . On receipt of a Rejection Notice, Contractor shall either dispute the Rejection Notice in which
event Contractor and the Producer's Representative shall discuss the issues raised by Producer's
Representative, with input from Producer, in good faith or shall use its reasonable efforts to
undertake such work reasonably necessary to ensure that the Deliverables conform to the
requirements of the Rejection Notice and redeliver the Deliverables to the Service Provider and
the Producer's Representative. Where Contractor and Producer's Representative are unable to
reach a compromise with respect to the Rejection Notice, the Producer's Representative shall
reasonably prevail.
5,4. The parties, lnvestor and Copyright Owner acknowledge Minglu Ma as Producer's exclusive
representative (a "Producer's Representative") to represent Producer in all matters arising under
this Agreement. The Service Provider appoints David Carter as Service Provider's exclusive
representative to represent Service Provider in all matters arising under this Agreement (a
"Seryice Provider's Representative").Such Producer's Representative may not be changed
without the express prior written consent of Investor. The Contractor appoints Rohan Desai,
Guanglei Jia and Paul Becker as Contractor's representatives to represent Contractor in all
matters arising under this Agreement (each "Contractors Representative") or any replacements
for the foregoing, notified in writing to Service Provider and Producer's Representative,
Representatives shall have the authority to represent Service Provider, Contractor and Producer
respectively in all matters arising under this Agreement. Contractor shall appoint Serkan Zelzele
as the designated creative director for the Services rendered for this Film.
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6. Bepresentations and Warranties
6.1. 'fhe Service Provider and Contractor represent and warrant to each other that each has the full
right, capacity, power and authority to enter into and perform this Agreement, and to make the
following representations and warranties :
6.1.1 with respect to the Services, Contractor shall use personnel who have suitable skills,
qualifications and experience and who are competent to provide the Services and ensure that
such persons are managed by suitably experienced management personnel, and Contractor shall
ensure that all such persons shall render their services in a timely and first class professional
manner in accordance with the provisions of Clause 4.1 above and shall assign all copyright and
all other rights in and to the products oftheir services to Contractor irrevocably and absolutely to
hold for the full period of copyright and thereafter insofar as it is possible in perpetuity and that
they shall unconditionally waive in perpetuity the benefit of any provision of law known as
"moral rights" or "droit moral" or any similar law in any country of the world; all of the
foregoing in compliance with Contractor's obligations under Clause4.l above;
6.1.2 Contractor shall comply with all applicable laws and supply the Services in conformity
with any laws, rules and regulations applicable to the Services;
6.1 .3 the Service Provider warrants that it owns or has licensed the intellectual property rights
to any material or content provided to Contractor to enable Contractor to carry out the Services
and the other work detailed in this agreement and further warrants that Contractor shall not
infringe the rights of any third party by providing the Services and such other work;
6.2. Contractor warrants that all the Deliverables will be provided to the Service Provider free and
clear of any liens, claims, charges or encumbrances, and that no process used in providing the
Services infringes upon the rights of any person or entity, including without limitation any rights
under copyright, trademark, andlor patent.
7, Indemnity
7.1. Contractor and the Service Provider agree to indemnify and hold each other and their officers,
directors and employees harmless from and against any and claims, losses, liabilities, damages,
expenses and costs (including, without limitation reasonable legal fees) arising directly out of or
resulting directly from any breach of this agreement or any breach of warranty or undertaking,
but such that the liability of each party to the other shall not (other than as may be untimited by
statute or in the case of breach of copyright) exceed the total amount of the Fees payable by the
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Service Provider to Contractor under this Agreement, except in the event of fraud or
nialfeasance.
'7.2. Each Party shall notify the other promptly of any claim or liability for which indemnification is
sought and neither Party shall settle any claim without any prior written approval of the other
Party which approval shall not be unreasonably withheld or delayed.
7.3. la no circumstances whatsoever shall either pa(y be liable to the other party (whether under
breach of contract, product liability, negligence or otherwise) for: (i) any consequential damages;
(ii) any damages for loss of profits, loss of earnings or loss of business opporfunities, even if
advised or wamed by the other party of the possibility of such damages.
7.4. Contractor acknowledges that its sole and exclusive remedy in connection with Service
Provider's breach, termination or cancellation of any tenn, covenant or agreement contained
herein, shall be an action at law for monetary damages (if any), and Contractor irrevocably
waives any right to seek and/or obtain rescission and/or equitable and/or injunctive relicf in
corurection with this Agreement (or breach or alleged breach hereof), against the Film and/or any
and all Deliverables (including, without limitation, any marketing, distribution or other
exploitation of the Film and/or any Deliverables), or Service Provider's use of the services, and
results and proceeds ofthe services, provided by Contractor herein.
8,1 Provided Contractor is not in material breach and Contractor's work (without significant
decrease) appears in the Fihn, the Service Provider shall include (or cause Producer to include)
in the end credits of the Film a credit as shall be notified to the Service Provider by Contractor
which shall substantially read as follows ("Contractor Credit"):
The Service Provider shall include (or cause Producer to include) a dedicated block of Seventy-
two (72) lines in the end titles of the Film, where each line shall not exceed four (4) individual
names per line as provided by the Contractor, immediately following the Contractor Credit to
individuals who have rendered substantial services for an in connection with the Services
(" Contractor Credit Roll"). The Contractor shall submit to the Service Provider (or to the
Producer) ils facility and crew credits no later than (i) completion and delivery of the work to
Service provider, or (ii) five (5) days following request from the Service Provider or Producer
therefor. ln addition, the Service Provider shall (or cause the Producer to) inctude Paul F Becker
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and Sonia Marques as VF'X Producer and Serkan Zelzele as VFX Supervisor in the
end rolling credits and if "Main on End Titles" (i.e., credits appearing in a separate field in the
end titles on the top of the VFX credit roll) is utilized, in the Main on End Titles; provided if
Producer's Representative is also accorded VFX producer credit in the Main on End Titles, the
Producer's Representative's such VFX producer credit shall have the first position among the
three.
8,2 Producer acknowledges that if the scope of the Services has materially increased due to Change
Orders requested by the Producer, and in consideration ofsuch increase, the Producer agrees, on
a pro-rata basis, to give in good
faith, an increase in the number of lines in the Contractor Credit
Roll.
8.3 No casual or inadveftent failure to accord such credits shall constitute a breach of this
Agreement by the Service Provider.
8,4 Contractor shall not be entitled to issue its ownpress releases and publicity materials relating to
its involvement with the Film without the express prior written approval of the Producer which
shall not be unreasonably withheld.
8A. Coqfidentialitv
Contractor may, during the course of its employment hereunder, have access to, and acquire
knowledge from, material, data, systems, and other sources which are not available to the
general public (collectively, the "Confidential Information"). Any knowledge acquired by
Contractor from such Confidential Information, or otherwise tluough its engagement hereunder
shall not be used, published, or diwlged by Contractor in any manner by any media (including,
without limitation, by television, radio, newspaper or interactive media such as Faceboolg
Twitter, or any other interactive social network or personal blog) to any other person, firm, or
corporation without first having obtained the written permission of the Service provider and
Producer, which permission Producer may withhold in its sole discretion. Contractor hereby
acknowledges that unauthorized disclosure of any Confidential Information could cause
irreparable harm and significant injury which may be difficult to ascertain. Accordingly,
Contractor agrees that Service provider (without limiting its rights pursuant to this Agreement)
shall have the right to seek injunctivc relief from any breach of this clause, This clause shall
survive the termination or expiration of the term of this Agreement.
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4elationshin of Pqrties
Nothing in this Agreement is intended, nor shall it operate, to create any relationship between the
parties other than that of independent Contractor. Neither party shall hold itself out as an agent,
subsidiary, or affiliate of the other party, nor have the authority to bind the other party to any
obligation.
10 Notices
Any notice required or desired to be given with respect to this Agreement shall be in writing and
addressed to the other Party as set out below, or to such other address as that party may have
specified by prior notice to the other,
George.acogny@gmail.com
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jtan@loeb.com
1l Termination
n.2 Either Party (Service Provider only with respect to 11.1.3) shall be entitled by notice in
writing to the other to terminate this Agreement (without prejudice to any claim or rights
which the terminating party may have against the other) in the event of:r
I 1.2.r the other party failing, refusing or neglecting to perform any of its material
obligations under the terms of this Agreement for a period of seven (7) days
following receipt of the notice speci$ing such breach;
t1.2.2 the other party going into liquidation (otherwise than for the purposes of a bona fide
amalgamation or reconstruction) or if the other Party has a receiver or administrator
appointed over all or any of its assets, makes any arrangement with or assignment for
the benefit of its creditors or is otherwise unable to pay its debts as they fall due.
n.2.4 [n the event of termination of this Agreement by Contractor for the reasons specified
above, the Service Provider agrees to pay forthwith any and all balance of the Fees
payable to Contractor as are due at the date of termination for the rendering of the
Services under this Agreement.
I 1.3 On termination of this Agreement for any reason, Contractor shall retum all of the Service
Provider's materials (including any materials or elements rendered, provided, supplied,
created or acquired by Contractor pursuant to this Agreement or the Post Production
Agreement) created in its possession to the Service Provider and Producer's
Representative.
I L4 The parties acknowledge that the termination of the Post Production Agreement shall
immediately result in the termination of this Agreement.
10
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12 Geqeral Provisions
12.2 This Agreement contains the entire agreement between the parties with respect to its
subject matter. No other prior agreements, representations, warranties, by or on behalf of
either party by any of its employees or agents, shall be deemed to bind the parties with
respect to the subject matter. The terms of this Agreement may be altered only in writing
signed by both parties.
t2.3 Neither party shall be considered in breach or default under this Agreement for any delay
or failure in performance (other than the payment of money) resulting from causes beyond
the reasonable control of such party. Such acts shall include but not be limited to acts of
God, acts of rvar or civil disruption, act of terrorism, public utility failures, industry wide
shortages of labour or malerial, or natural disaster.
12.4 The failure or delay of either party at any time to exercise any right under any provision of
this Agreement shall not limit or operate as a waiver thereof, nor shall the waiver of any
breach of any provision be a waiver of any other or further breach of any provision or a
waiver of the provision itself or of any other provision of this Agreement.
12.5 If any provision of this Agreement is held by a court or arbitrator of competent jurisdiction
not enforceable, then such provision shali be severable from the remaining Agreement,
which will continue in full force and effect.
12.6 In the event Copyright Owner and Investor cannot reach an agreement with respect to any
issue that requires Producer's approval hereunder, Lrvestor's decision shall control.
l3 Insurance
Contractor shall maintain insurance with a reputable insurer to cover the nom:al risks
customarily insured by companies within the post production industry. Contractor shall provide
details of insurance to the Service Provider on request.
t4 Assignment.
Contractor acknowledges that the services hereunder are of a special, unique and unusual
character and therefore shall not assign transfer, license, delegate or grant all or any part of its
obligations hereunder to any person or entity, unless through prior written permission of the
Service Provider and Producer.
11
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15 Governins Law and Jurisdiction
This Agreement shall be govemed by and construed in accordance with the laws of the State of
California and each party irrevocably agrees to submit to the exclusive jurisdiction of the courts
of Califoniia in relation to any claim or matter arising under or in connection with this
Agreement. The Parties shall first mutually negotiate in good faith to resolve any dispute that
arises between them.
Notwithstanding anything to the contrary expressed or implied herein, the Parties hereby
acknowledge that each of Investor and Copyright Owner is an express third party beneficiary of
this Agreement and, in particular, of Contractor's cov€nants and agreements made irerein.
By
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tS Gcx'ert}Lnu Law and Juri$diction
This Agreenrenl shall be govenred by and conslrueci jn accordance with the laws of the State of
Clalifi:rnia and eac,h parly irrevocahly agrees to submit to the exclusive jurisdiction r:f'the courts
of Califarnia in relation to any claim or matt$ arising under or in connection with this
Agreement. llhe Fafiies shall first nrutually negotiate in good faith to resnive any dispute that
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Investor and Copyright Owner each hereby consents to the engagement of Contractor by the Service
Provider to provide the Services for the Film as set forth herein, and pursuant to the instructions to
Service Provider as set forth in the Post Production Agreement. Notwithstanding anything to the contrary
set forth herein including without limitation in Clause 2, in no event shall Producer be obligated to fund
any amount in excess of the Net Fee. It is also acknowledged that Investor and Copyright Owner are
express third party beneficiaries of this Agreement, but are not incurring any additional obligations under
this Agreement, their obligations being defined and capped as provided in the Post Production Agreement,
which should control as between the two agreements insofar as Investor and Copyright Owner are
concerned.
ACKNOWLEDGED AND AGREED, the date and year first above written.
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18336218.12
229720-10002
The First Schedule
The Services
14
18336218.12
229720-!OOO2
November 7th, 2019
Dear Kung Fury 2 Europe UG (haftungsbeschränkt) and Creasun Entertainment USA INC,
Please find our agreed rate for the production of Visual Effects of “Kung Fury 2”.
• Visual Effects costs: 10,003,090 Million USD NET, Marketing and trailers TBD
• Payments made to our Montreal Canada associate office NAME TBD
• Payments in accordance with payment schedule in attached long form agreement
• Review sessions with director will be established post agreement and are designed to maximize
time and creative input against production scheduling
Sincerely,
Paul F Becker
The Fees
The following amounts are to be paid by the Service Provrder to Contractor on the following dates, in
respect of the Services and the work being undertaken by the Contractor on the Film in full and complete
consideration of the Contractor's services in connection with the Film hereunder, Service Provider shall
pay the Contractor USD $ USD $12,800,000 (Twelve Million Eight Hundred Thousand United States
Dollars Only) payable as follows:
A. The sum of USD $10,000,000 (Ten Million United States Dollars) ("Net Fee"), which sum shall
be payable as follows:
15
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18336218.12
229720-10002
bv 05137/2A
7 The higher of 1.25m 12.50$ 87.50,6
One business day
1.275 shots or
following acceptance
90% of total
by Producer's
shots delivered
Representative
bv 08/3U20
8 100% oftotal One business day I.25m 12.5 1000.'b
shots delivered following acceptance
in 4K by by Producer's
t0/0s120 Representative
Note that the total number of shots currently set forth on the this Second Schedule may change pursuant
to Change Orders. Each payment shall be conditioned upon Producer's Representative's acceptance of
the applicable shots delivered by the conesponding Contractor delivery date set forth above.
16
18336218.12
229720-70002
Third Schedule
Shots breakdown
17
18335218.12
2297ZA-LAAA2
GENERAL INFORMATION
TITLE: KUNG FURY II BID VERSION v16 2019-11-06
DIRECTOR: DAVID SANDBERG EXECUTIVE PRODUCERS: GUANGLEI JIA
DOP TOM STERN PAUL BECKER
PRODUCER: MINGLU MA STUDIO VFX PRODUCER: SONIA MARQUES
PHILIP WESTGREN STUDIO VFX SUPERVISOR: SERKAN ZELZELE
VFX COMPANY: DNEG - REDEFINE
TOTAL: $75,150.00 0
POST PRODUCTION INCLUDED IN BID DAYS TOTAL: GRAND TOTAL USD: $8,853,090
SUPERVISION - POST $800.00 258 $206,400.00 CONTINGENCY : $1,150,000
PRODUCER - POST $550.00 258 $141,900.00 GRAND TOTAL USD: $10,003,090
COORDINATION - POST $320.00 258 $82,560.00
$0.00 0 $0.00
$0.00 0 $0.00
$0.00 0 $0.00
TOTAL: $430,860.00
TOTAL: $687,160.00
000000Page 1 0000002019-11-06
000000 KF2_vfxBreakdown_v16_Contract.xlsx
PROJECT SPECIFICATIONS
IMAGE CAPTURE √ Digital 16mm 35mm Imax Stereo Conversion
BID SPECIFICATIONS
▪ The bid methodology is as per the supplied storyboards, visual references, creative meetings and script. Our recommended use of any specific
technology, approach or methodology is indicated in this breakdown. As the creative approach evolves during pre-production, we will create a
separate brief with our recommendations and reasoning for each additional change.
▪ Visual Effects bid include all costs for: facilities, management, supervision, labor, hardware, software and the technical support needed to produce the
shots as outlined within the proposed schedule.
▪ Bid includes rates for all on set supervision and production including: data wranglers (4), DIT, coordinators - runner (2), etc. a separate breakout line
item provided.
▪ Key personnel that will be exclusive to this production: List provided in the Kung Fury II: A Guide to Visual Effects Methods & Approach document.
▪ Bid to be broken out into separate pre-production, production and post-production periods.
▪ Bid includes secure FTP file transfer for all submissions.
▪ Unless otherwise indicated, assume all shots at 75 frames, inclusive of 8 frame head and 8 frame tail handles.
▪ All finals should be output and delivered at 4K. 16 Bit EXR files. Any non-anamorphic - shot in full in apeture.
▪ Production to provide EXR frames for all necessary elements.
▪ Production to provide approved timing reference, line-up's, and QT reference for each sequence/shot turned over.
▪ Bid costs in USD
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
Digital Doubles
Hitler 1 $21,420.00
Boner 1 $25,410.00
Brachiotaurus 1 $25,410.00
Butterfly 1 $3,360.00
1
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
Muzzles / Faces
Vehicles
Air Force One Assumes a moderately complex vehicle, advanced or stunt rigging 1 $6,300.00
Colt’s Lamo Assumes a moderately complex vehicle, advanced or stunt rigging 1 $5,250.00
Hitler’s Camaro / with Statue Assumes a moderately complex vehicle, advanced or stunt rigging 1 $6,300.00
Thundertruck (crashed) Assumes a simple vehicle, simple driving or shocks rigging. 1 $4,410.00
Hackatron - command room Assumes a simple vehicle, simple driving or shocks rigging. 1 $4,410.00
Body Parts
2
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
Weapons / Props
Knife / Sword Extension Assume on set Photogrammetry or hand scanning, with clean up. 5 $4,200.00
Scanned Props from Set Assume on set Photogrammetry or hand scanning, with clean up. 5 $4,200.00
FX Dev
FX DEV - Hackerman Blaster FX Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Airforce One Crash Dev Moderate compexity FX, smoke, sparks, etc. 1 $5,040.00
FX DEV - Car Transformation Specific, advanced compexity FX, smoke, sparks, etc. 1 $8,610.00
FX DEV - Chaos Portal Moderate compexity FX, smoke, sparks, etc. 1 $5,040.00
FX DEV - Flying Money Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
3
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
FX DEV - Hackerman teleportation FX Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Missile Smoke Trails Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Money On Fire Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Sparks, Smoke Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Taekwon Doom Smoke Bomb Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Time Portal Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Water Spray Simple compexity FX, smoke, sparks, etc. 1 $2,730.00
FX DEV - Weapon combination lasers Moderate compexity FX, smoke, sparks, etc. 1 $5,040.00
DMP - 3D Environments
DMP - CLUB MUZIK and Street Extension Generic Matte Painting started from stock or CGI renders.. 2 $4,200.00
DMP - Hackerman Neighbourhood Generic Matte Painting started from stock or CGI renders.. 2 $4,200.00
DMP - Medieval Age 2.5D DMP Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Miami Beach City Extension Generic Matte Painting started from stock or CGI renders.. 2 $4,200.00
DMP - Miami City Cyclorama - DAY Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Miami City Cyclorama - NIGHT Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Night Miami Overview from Viewpoint Assume commercial stock. 1 $420.00
DMP - Star Environment 360 DMP Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Viking Age 360 Degree Pano Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Viking Age View of Village Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - Volcano Wide Shot Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
DMP - White House Generic Matte Painting started from stock or CGI renders.. 1 $2,100.00
CG ENVIRONMENTS
4
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
5
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER & VFX EXECUTIVE PRODUCER MINGLU MA
PRODUCER PHILIP WESTGREN
Totals
178 $1,215,060.00
√
6
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
;;A rooftop overlooking the city. A brick of a Foreground: Shoot in real car on green screen Assumes moderate comp work, 2.5D cameras,
EXT ROOFTOP cell phone RINGS. A gloved hand grabs it. Background: Highway shot - Cg environment - stylized addingmultiple custom elements, more
4 3/8 4 $14,962.61
VIEWPOINT We see the silhouette of a man backlit by a PLATE: Green Screen car over plates, sophisticated keying and paint, possibly nuke
neon sign and framed by the full moon. FX: muzzle flashes enhancements FX, generic DMP work. – About 10-22 days.
1
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: CG extension
FX: use of FX for the Lightning
CG: Skull clean-up and CG spine
Focused narrowly on QUICK muzzle
Fury deals with the first two wolves, Magnum PROSTHETIC: Muzzle enhancement: Possile Muzzle enhancenent
EXT SHADY ALLEY 9.2 1 2/8 enhancement without combat or background 6 $16,863.92
cuffs the third. on werewolves - the face articulates but enhancement for facial
extention work.
expressions is to be expected. The movement of the prosthetic is
limited and will need enhancement.
CG HEAD: Full CG head with mix of practical elements from
prosthetics
SET: Green Screen set Assumes moderate comp work, 2.5D cameras,
;;;Dozens of HOODLUMS and GANGSTERS
PLATE: Werewolves shot on set addingmultiple custom elements, more
EXT MIAMI ROOOFTOPS 10.1 1/8 hanging out on the rooftops spot the eagle 6 $22,443.92
CG: Eagle symbol to be added in post sophisticated keying and paint, possibly nuke
symbol and rush towards
FX, generic DMP work. – About 10-22 days.
2
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Practical set with plate shoot on green screen - Wire removal
on stunt for actor being thrown - unless specified for the use of a
dummy
PROSTHETIC: Muzzle enhancement: Possile Muzzle enhancenent
on characters - the face articulates but enhancement for facial Assumes simple comp work with possible light
The Thundercops toss Hitlers body into a
EXT VOLCANO 12.2 1/8 expressions is to be expected. 2.5 work, adding elements, pulling keys,and 4 $9,022.61
volcano.
Triceracop - Thundercops some light roto and paint. About 5-6 days.
CG HEAD: Full CG head with mix of practical elements from
prosthetics
Plate shoot possible for side shot - comp background elements
CG: CG Dinomite
SET: Practical stage with set design and possible green screen
CG: CG Diomite
CROWD: Assume 2D approach to the crowsTriceratop stock Assumes Moderate 2D/3D work with CGI
INT MIAMI STADIUM 13 2/8 The Thundercops play to a packed stadium. Footage of Crowds renders comped into 2D plates, footage or 8 $53,625.23
PROSTHETIC: Triceracop: Muzzle enhancement: Possile Muzzle DMP, plus Comp Moderate assumptions
enhancenent on characters - the face articulates but enhancement
for facial expressions is to be expected.
SET: Practical stage with set design and possible green screen
CG: CG Diomite
CROWD: Assume 2D approach to the crowsTriceratop stock
Footage of Crowds
PROSTHETIC: Triceracop: Muzzle enhancement: Possile Muzzle Assumes same SOW as Combined Easy with the
Kung Fury and Colt Magnum say they'll be
INT MIAMI STADIUM 15 3/8 enhancenent on werewolves - the face articulates but enhancement addition of CG Character animation Focused on 8 $25,125.23
friends for ever.
for facial expressions is to be expected. light touch ups.
CG HEAD: Full CG head with mix of practical elements from
prosthetics
Background: Possible logo enhancmenet on the stadium and stage -
mix of set and set extension
SET: Practical stage with set design and possible green screen
PROSTHETIC: Triceracop: Muzzle enhancement: Possile Muzzle
Assumes same SOW as Combined Easy with the
EXT COLT MAGNUM`S Kung Fury turns his back on the enhancenent on werewolves - the face articulates but enhancement
16 5/8 addition of CG Character animation Focused on 8 $23,505.23
FUNERAL Thundercops, from now on he works alone. for facial expressions is to be expected.
light touch ups.
CG: Dinomite,
Foreground: In camera
3
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Practical set with Green screen to be used with beach plate
for Ocean - possible additional set dressing to complement set. Assumes moderate comp work, 2.5D cameras,
Crowd: Possible crowd duplication or plate shoot for different actions addingmultiple custom elements, more
EXT MIAMI BEACH 19.1 7/8 Beach montage 10 $37,406.54
- multipasses - if required sophisticated keying and paint, possibly nuke
Props: possible additional period props to be inserted - if required FX, generic DMP work. – About 10-22 days.
SET: Practical set with Green screen to be used with beach plate
for Ocean - possible additional set dressing tom complement set.
Assumes simple comp work with possible light
EXT MIAMI BEACH - Rey interviews a Patrol officer, she finds a big Crowd: Possible crowd duplication or plate shoot for different actions
20 1 3/8 2.5 work, adding elements, pulling keys,and 10 $21,506.54
boardwalk clue. She's spotted - multipasses - if required
some light roto and paint. About 5-6 days.
Props: possible additional period props to be inserted - if required
2 $6,701.31
Assumes simple 2D/3D work with CGI renders
INT KUNG FU ACADEMY Bullet hits on punchin bag - GREEN SCREEN
27,3ii 1/8 Green Screen shoot for elements comped into 2D plates, footage or DMP, plus
L1 ELEMENT SHOOT
Comp Easy assumptions 1 $3,350.65
4
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Practical set with plate shoot on green screen - Wire removal
on stunt for actor being thrown - unless specified for the use of a
dummy
PROSTHETIC: Triceracop: Muzzle enhancement: Possible Muzzle
enhancenent on characters - the face articulates but enhancement
The Thundercops toss Hitlers body into a This assumes Comp Medium with additional wire
EXT VOLCANO 27.26 1/8 for facial expressions is to be expected. 3 $13,471.96
volcano. removal or other paint.
Thundercops
CG HEAD: Full CG head with mix of practical elements from
prosthetics
Plate shoot possible for side shot - comp background elements
CG: CG Dinomite
5
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Shot in practical set Assumes senior work, moderate DMP, 2.5D
CG: Enhancement Doom's eyes; head cameras, adding custom elements, some design
INT KUNG FU ACADEMY
30.2i 1/8 Foreground: Green Screen Stunt - shoot work, adding multiple filmed elements and CGI 6 $35,223.92
L1 Colt has his head cut off by TaeKwon Doom
Background: Plate shoot for stunt renders, heavy crowds,timed lighting. About 20-
FX: Practical blood with enhancement 30 Days
INT KUNG FU ACADEMY SET: Shot on practical set Simple monitor comp of prepared stock,
31 7/8 Fury and Rey connect the dots 6 $12,903.92
L2 COMP: Photo Prop replacement - insert footage or GFX into an on set prop.
Assumes simple, usually one off, 2D
compositng, A over B, simple element additions
INT KUNG FU ACADEMY- SET: Shot on practical set
33.1 1/8 Fury shaves and changes. done by one artist. No 2.5D Camera work, light 6 $11,643.92
BATHROOM2 Possible morph for beard transformation gag
GS pull, no heavy paint or roto. About 2-4 Man
days of work total.
SET: Shot on practical set with green screenfor fighting stunts SET: Shot on practical set with green screenfor
integration - WIRE REMOVAL fighting stunts integration - WIRE REMOVAL
PROSTHETIC: Illeagle, Terrordactyl,: Muzzle enhancement: Possile PROSTHETIC: Illeagle, Terrordactyl,: Muzzle
Muzzle enhancement on characters - the face articulates but enhancement: Possile Muzzle enhancement on
INT KUNG FU ACADEMY Illeagle and Terrordactyl kidnap Rey, Fury
36.1 1 4/8 enhancement for facial expressions is to be expected. characters - the face articulates but 8 $32,205.23
L2 arrives.
CG HEAD: Full CG head with mix of practical elements from enhancement for facial expressions is to be
prosthetics expected.
FX: Possible blood enhancement and CG enhancement depending FX: Possible blood enhancement and CG
on fight stunt enhancement depending on fight stunt
SET: Green screen for plate integration SET: Green screen for plate integration
PLATE: - T-Clan stunts shot 2nd unit PLATE: - T-Clan stunts shot 2nd unit
INT KUNG FU ACADELY - Surfboard ninja on green screen - Surfboard ninja
36.2 2 Fury fights the T-Clan 8 $54,915.23
L2 STUNT: Wire work for stunts - Wire removal STUNT: Wire work for stunts - Wire removal
FX: Explosion enhancement. fire, particles, Muzzle flashes, squibs FX: Explosion enhancement. fire, particles
CG CROWD: Possible crowd duplication
2ND Unit
SET: Green screen with plate integration - clean plate
PLATE: - T-Clan stunts shot 2nd unit Assumes Complicated 2D/3D work with CGI
Fury surfs a Doom clan onto his motorbike - Surfboard ninja renders comped into 2D plates, footage or
EXT KUNG FU ACADEMY 37.2 1/8 6 $12,543.92
and then shoots into the sky. STUNT: Wire work for stunts - Wire removal DMP, complicated design work, plus Comp
FX: Explosion enhancement. fire, particles Moderate assumptions
CG: CG Kung Fury, CG doom, CG motorbike, CG stunts and
explosions
6
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Shot on practical set with green screen wrap around - comp
background
Foreground: PROSTHETIC: Illeagle, Terrordactyl and Triceracop:
Assumes same SOW as Combined Medium with
Muzzle enhancement: Possile Muzzle enhancement on characters -
the addition of CG Character animation
EXT BUILDING ROOFTOP 39 1 1/8 Fury meets Doom, Triceracop takes a sword. the face articulates but enhancement for facial expressions is to be 6 $41,133.92
Focused on some simpler speaking or
expected.
expressiveness.
CG: Sword extension (cut off prop on practical set); CG feathers if
needed depending on action for Illegal.
Background: Green screen replacement with Rooftop background
7
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
EXT MIAMI THEME PARK Amoung the theme park rides Doom aims his Simple monitor comp of prepared stock,
43 2/8 Display on power glove 3 $8,341.96
L1 power glove. footage or GFX into an on set prop.
8
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
9
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
EXT MIAMI THEME PARK - "SET: Practical set with green screen Assumes Moderate 2D/3D work with CGI
PRINCESS CASTLE 59.1 1/8 Nazi theme park establisher CG: Set extension BG - plate of Hitler on Balcony and crowd renders comped into 2D plates, footage or 6 $9,843.92
BALCONY duplication" DMP, plus Comp Moderate assumptions
Hitler's POV
EXT MIAMI THEME PARK - Assumes Moderate 2D/3D work with CGI
SET: Practical set with green screen
PRINCESS CASTLE 59.2 3/8 Hitler addresses the crowd. renders comped into 2D plates, footage or 2 $13,991.31
CG: Set extension BG - plate of Hitler on Balcony and crowd
BALCONY DMP, plus Comp Moderate assumptions
duplication
Crowd POV
Assumes Moderate 2D/3D work with CGI
EXT MIAMI THEME PARK- SET: Practical set with green screen
59.3 2/8 Hitler addresses the crowd. The crowd renders comped into 2D plates, footage or 6 $41,943.92
PRINCESS CASTLE CG: Set extension BG - plate of Hitler on Balcony and crowd
DMP, plus Comp Moderate assumptions
duplication
10
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
PROSTHETICS: hand disapeers into monitor, body enters monitor Assumes same SOW as Combined Medium with
Fury says he'll go alone, he enters the SET: Real BGSET: Practical with possible Monitor inserts. the addition of CG Character animation
INT HACKERMANS LAB 64 1 6/8 8 $54,915.23
internet. Foreground: Monitor inserts. Focused on some simpler speaking or
FX: Lights flashing - zapping expressiveness.
SET: Practical set with green screen Assumes Moderate 2D/3D work with CGI
INT MIAMI THEME PARK-
69 1/8 Fury spots Hitler with Thors hammer. CG: Set extension BG - plate of Hitler sitting on Thors Hammer renders comped into 2D plates, footage or 6 $41,943.92
TICKET BOOTH
CROWD: Crowd duplication DMP, plus Comp Moderate assumptions
11
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
PROSTHETIC: Triceracop: Muzzle enhancement: Possible Muzzle Assumes same SOW as Combined Medium with
EXT MIAMI THEME PARK The thundercops fight as Hitler leads the nazis enhancenent on characters - the face articulates but enhancement the addition of CG Character animation
77.3ii 2/8 6 $41,133.92
PRINCESS CASTLE through the portal for facial expressions is to be expected., Boner, portal, crowd Focused on some simpler speaking or
duplication expressiveness.
SET: Practical set - Theme Park - ARCADE with green screen Assumes Moderate 2D/3D work with CGI
EXT MIAMI THEME PARK 78.3 4/8 The theme park explodes CG: CG environment to complete Theme Park - BG set extension renders comped into 2D plates, footage or 4 $27,862.61
FULL CG: 3D model explosion and destruction DMP, plus Comp Moderate assumptions
12
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Practical set with green screen Assumes simple comp work with possible light
Hitler and Doom lead the nazis towards the
EXT WHITE HOUSE 79 1/8 PLATE: Green screen Nazis moving towards white house with stock 2.5 work, adding elements, pulling keys,and 6 $16,263.92
white house.
footage some light roto and paint. About 5-6 days.
Assumes simple comp work with possible light
INT WHITE HOUSE- OVAL The president ends the cold war, hes CROWD: Crowd duplication out window
80.1 1 1/8 2.5 work, adding elements, pulling keys,and 4 $10,702.61
OFFICE informed that the Nazi's are here. SET: Practical set with green screen for windows
some light roto and paint. About 5-6 days.
Assumes moderate comp work, 2.5D cameras,
INT WHITE HOUSE- OVAL The president ends the cold war, hes CROWD: Crowd duplication out window addingmultiple custom elements, more
80.2 1 1/8 6 $9,123.92
OFFICE informed that the Nazi's are here. SET: Practical set with green screen for windows sophisticated keying and paint, possibly nuke
FX, generic DMP work. – About 10-22 days.
SET: Practical set
CG: Nazi body exploding, Limbs, Monster with Chainsaw
Assumes Moderate 2D/3D work with CGI
INT WHITE HOUSE- CG SET: Hallwat for destruction
81.1 1 Fighting in the white house corridor. renders comped into 2D plates, footage or 6 $41,943.92
CENTRAL HALL FX: Explosions, Fire from high-powered shotgun, Fire to light up
DMP, plus Comp Moderate assumptions
cigar
PROPS: Stalin's pipe for CG model - action with president
"SET: Practical set with green screen plate of President to add to
fight scenes Assumes moderate comp work, 2.5D cameras,
INT WHITE HOUSE- CG: Nazi body exploding, Limbs, Monster with Chainsaw, DIGI addingmultiple custom elements, more
81.2 1 The President fight off the Nazi's 6 $31,293.92
CENTRAL HALL Double of President for stunt work sophisticated keying and paint, possibly nuke
CG SET: Hallwat for destruction FX, generic DMP work. – About 10-22 days.
FX: Explosions, Fire from high-powered shotgun, Fire to light up
SET: Green Screen set - Fury on green horse
CG: Fury on GIANTGUN, Cobra, Star Field, Time Crystal
Assumes simple 2D/3D work with CGI renders
PLATE: Hand for Giant hand, Floating heads shot on green screen
DREAM SEQUENCE 82.1 2/8 Fury rides a gun horse comped into 2D plates, footage or DMP, plus 8 $34,935.23
and integrated
Comp Easy assumptions
MAKEUP: Old Kung Fury - make-up prosthetic enhancement
possible
SET: Green Screen shoot
Assumes simple 2D/3D work with CGI renders
PLATE: Plate shoot of actors - Simple comp.
INT DREAM SEQUENCE 82.2 1/8 Colt kisses Doom comped into 2D plates, footage or DMP, plus 6 $25,983.92
Foreground: Actors
Comp Easy assumptions
Background:Green screen.
SET: Green Screen Assumes simple 2D/3D work with CGI renders
DREAM SEQUENCE 82.5 1/8 Fury punches the time crystal. CG: Star Field, Time Crystal comped into 2D plates, footage or DMP, plus 6 $25,983.92
FX: Particles for Time Crystal Comp Easy assumptions
SET: Green Screen shoot
Assumes simple 2D/3D work with CGI renders
PLATE: Plate shoot of actor - Simple comp.
DREAM SEQUENCE 82.6 1/8 Master Sensei floating head comped into 2D plates, footage or DMP, plus 6 $9,843.92
Foreground: Actor - Master Sensei
Comp Easy assumptions
Background:Green screen.
SET: Practical with Green Screen shoot
Assumes moderate comp work, 2.5D cameras,
CG SET: Viking Village in ruins - Gym at a distance
EXT BARBARIAN VILLAGE- Fury exits the hut and sees the gym in the addingmultiple custom elements, more
84.1i 1/8 6 $31,293.92
ELDERS HUT distance sophisticated keying and paint, possibly nuke
Foreground: Matte painting, Boulders
FX, generic DMP work. – About 10-22 days.
Background: Green screen
13
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Green screen set Assumes simple 2D/3D work with CGI renders
INT WHITE HOUSE-
86.3i 1/8 The president fights, hes stabbed in the back. Foreground: President getting stabbed in the back comped into 2D plates, footage or DMP, plus 3 $13,261.96
CENTRAL HALL
Background: Practical set Comp Easy assumptions
14
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Green Screen set Assumes simple comp work with possible light
Rey tells Barbarianna they need chaos to
EXT VIKING VLLEY 90 7/8 CAST: Green sceen shoot of Barbrianna and Rey as a plate 2.5 work, adding elements, pulling keys,and 6 $16,263.92
open a portal.
ENV: Matte painting and 2,5D environment some light roto and paint. About 5-6 days.
SET: Green Screen Assumes simple 2D/3D work with CGI renders
EXT EHITE HOUSE 91 1/8 The President rises from the rubble SFX: Rubble - possible FX enhancement - smoke, debris and rubble comped into 2D plates, footage or DMP, plus 8 $34,935.23
PROSTHETICS & COSTUME: BALD EAGLE in BG Comp Easy assumptions
15
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Practical set with green screen; Set extension for the truck to
burn out, Zooming away - concept development for the Hard surface model animation, cars, robots, etc
Kung Fury STABS the time crystal shard into
environement and action. over a full CGI environement – usually
EXT MIAMI THEME PARK 103.5 1/8 Terrordactyl’s forehead, pinning him to the 3 $66,166.96
CG: Time crystal, Thundertruck highways. Hard presumes more complicated
carnival game.
CG ENV: Tarp blows open moves or combat
FX: Lightning, debris for the tarp"
"SET: Practical set with green screen; Set extension for the truck to
burn out, Zooming away - concept development for the
Assumes Moderate 2D/3D work with CGI
INT HACKERSMAN environement and action.
104.1 2/8 Hackermans activates the Thundertruck renders comped into 2D plates, footage or 6 $41,943.92
MOMS HOUSE CG: Time crystal, Thundertruck
DMP, plus Comp Moderate assumptions
CG ENV: Tarp blows open
FX: Lightning, debris for the tarp"
"SET: Practical set with green screen; Set extension for the truck to
burn out, Zooming away - concept development for the
INT HACKERSMAN The thundertruck zooms away from environement and action.
104.2 2/8 6 $9,843.92
MOMS HOUSE Hackermans house CG: Time crystal, Thundertruck
CG ENV: Tarp blows open
FX: Lightning, debris for the tarp"
SET: Green screen set with practical car with padding for stunt
STUNT: Werewolf stuntu on wires - Wire removal
PROSTHETIC: Werewolf: Muzzle enhancement: Possile Muzzle
enhancement on characters - the face articulates but enhancement
Assumes same SOW as Combined Hard with the
for facial expressions is to be expected.
Tanner, John and Steve drive trying to avoid addition of CG Character animation, difficult
EXT MIAMI STREETS 108.i 3/8 CG HEAD: Full CG head with mix of practical elements from 6 $55,563.92
Romans and dinosaurs. performance, complete head or face
prosthetics
replacement.
CG: Roof - Green tear away roof - CG plates - Roman Warriors,
Dinosaurs and Wormholes
Foreground: Wolf jumps on hood pf Camaro tears off the roof
Background: CG bakcground
SET: Practical set with Green Screen Assumes Moderate 2D/3D work with CGI
The Evil Army surround the kung fu academy
EXT KUNG FU ACADEMY 109.1 2/8 CROWD: crowd duplication renders comped into 2D plates, footage or 6 $28,923.92
-- PLATE AT NIGHT
PLATE: Plate shoot or army of Nazi's DMP, plus Comp Moderate assumptions
SET: Practical set with Green Screen
Assumes Moderate 2D/3D work with CGI
EXT KUNG FU ACADEMY- BG: 2D/3D Extension - Kung Fu Academy stairs and establishing of
109.2 2/8 Nazi's surround the kung fu academy renders comped into 2D plates, footage or 6 $28,923.92
STEPS the outside
DMP, plus Comp Moderate assumptions
CROWD: Crowd duplication
16
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
Foreground: Real set with GS outside a helicopter - Miami City- Assumes same SOW as Combined Medium with
taking off - the addition of CG Character animation
INT TUNDERTRUCK 116 1/8 Hackerman initiates flight mode 7 $33,954.58
Background:Green screen to be replace by CG environment - City Focused on some simpler speaking or
buildings and Kung Fu Academy expressiveness.
17
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
18
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: IIlegal on Green Screen - with Stunt work - Assume not very
wide shot Assumes commercial stock footage or plate
EXT DESTROYED THEME Illegal lands and heads for the contreol booth - WIRE REMOVAL shoots that have some light touch ups, paint
127.1 2/8 5 $176,278.27
PARK THE MURDER COASTER! CG: Destroyed Theme Park as BG outs or corrections to make them useable and
cleared for rights.
19
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
20
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
21
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
CG Murder-coaster
The Holocoaster shits out the arcade bots CG Hakertron
Assumes same SOW as Combined Medium with
BG: Full CG - Kung Fu Academy
the addition of CG Character animation
EXT KUNG FU ACADEMY 134.4 2/8 Exposition Cop gets slammed by an arcade Medium Close-up 6 $40,473.92
Focused on some simpler speaking or
machine that fired lasers hich transform all of CG: Robots - Arcade Machines - poop
expressiveness.
miami into a 16-bi version of reality FX: Laser
CG: Miami inot a 16-bit version of reality
22
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
23
TITLE: KUNG FURY II
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCER: MINGLU MA
PHILIP WESTGREN
1415 $7,462,940.00
SET: Parctical set with possible Green screen for the street Assumes moderate comp work, 2.5D cameras,
depeneding on framing - 2nd unit shoot probable for Poster addingmultiple custom elements, more
EXT MIAMI STREETS L2 157 2/8 Master Sensei leads his army through Miami. 6 $22,443.92
integration sophisticated keying and paint, possibly nuke
PROP: CG Poster - shoot with no poster on wall FX, generic DMP work. – About 10-22 days.
Assumes moderate comp work, 2.5D cameras,
addingmultiple custom elements, more
EXT MIAMI STREETS L2 158 2/8 Master Sensei leads his army through Miami. SET: Parctical set with Green screen 6 $22,443.92
sophisticated keying and paint, possibly nuke
FX, generic DMP work. – About 10-22 days.
24
Fourth Schedule
Delivery Schedule
18
18336218.12
229724-$OO2
TURNOVER SCHEDULE
TITLE: KUNG FURY 2
DIRECTOR: DAVID SANDBERG
DOP TOM STERN
PRODUCERS: MINGLU MA
PHILIP WESTGREN
Total estimated shots:
1568
11-Nov-19
18-Nov-19
25-Nov-19
16-Dec-19
23-Dec-19
30-Dec-19
23-Sep-19
30-Sep-19
14-Oct-19
21-Oct-19
28-Oct-19
4-Nov-19
2-Dec-19
9-Dec-19
7-Oct-19
2019
CUMMULATIVE
DIRECTOR'S
EDITORIAL CUT
TURNOVER BY WEEK 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL TURNOVER 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
% COMPLETION 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
10-Mar-00
17-Mar-00
24-Mar-00
31-Mar-00
11-Feb-00
18-Feb-00
25-Feb-00
14-Apr-00
14-Jan-00
21-Jan-00
28-Jan-00
3-Mar-00
4-Feb-00
7-Apr-00
7-Jan-00
2020
CUMMULATIVE
19-May-00
26-May-00
16-Jun-00
23-Jun-00
30-Jun-00
21-Apr-00
28-Apr-00
14-Jul-00
21-Jul-00
28-Jul-00
5-May-00
2-Jun-00
9-Jun-00
7-Jul-00
2020
CUMMULATIVE
18-Aug-00
25-Aug-00
10-Nov-00
15-Sep-00
22-Sep-00
29-Sep-00
13-Oct-00
20-Oct-00
27-Oct-00
4-Aug-00
3-Nov-00
1-Sep-00
8-Sep-00
6-Oct-00
2020
CUMMULATIVE
Final Bid
19
18335218.12
22972A-10042
GENERAL INFORMATION
TITLE: KUNG FURY II BID VERSION v16 2019-11-06
DIRECTOR: DAVID SANDBERG EXECUTIVE PRODUCERS: GUANGLEI JIA
DOP TOM STERN PAUL BECKER
PRODUCER: MINGLU MA STUDIO VFX PRODUCER: SONIA MARQUES
PHILIP WESTGREN STUDIO VFX SUPERVISOR: SERKAN ZELZELE
VFX COMPANY: DNEG - REDEFINE
TOTAL: $75,150.00 0
POST PRODUCTION INCLUDED IN BID DAYS TOTAL: GRAND TOTAL USD: $8,853,090
SUPERVISION - POST $800.00 258 $206,400.00 CONTINGENCY : $1,150,000
PRODUCER - POST $550.00 258 $141,900.00 GRAND TOTAL USD: $10,003,090
COORDINATION - POST $320.00 258 $82,560.00
$0.00 0 $0.00
$0.00 0 $0.00
$0.00 0 $0.00
TOTAL: $430,860.00
TOTAL: $687,160.00
000000Page 1 0000002019-11-06
Sixth Schedule
Change Order
20
18336218.12
22972A-70002
CHANGE ORDER
Re:Define FX LTD
810 Rue St. Antoine E, Montreal, QC, H2Y 1A6
Montreal, QC, H2Y 1A6
Change Order
Description :
APPROVALS
Company Authorized Signature Date Client Authorized Signature Date
Accepted - The prices and specifications of this change order are satisfactory and hereby accepted. All work to be performed
under the same terms and conditions as specified in the orginal contract unless otherwise stipulated.
SEVENTH SCHEDULE
ASSIGNMENT OT COPYRIGHT
FOR 6OOD AND VALUABLE CONSIBERATION, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, Re:Define Fx Ltd. hereby irrevocably grants, sells, assigns, transfers and
otherwise conveys all of its rights of every kind and nature whether now known or existing or hereafter
created or acquired in and to the motion picture presently entitled "Kung Fary 2" including, without
limitation, any and all rights under copyright and any renewals or extensionE thereof including any
ancillary, subsidiary and derivative rights thereto, to Lightning Cobra Films lnc., whether arising before,
on, or after the date of this Assignment"
AILention:
Title :
#
*t"7,-*-ffi-*^
Notary Public in and for the [] {/ltn'( til il..t
Schedule 3 - version 10 of the post-production schedule for the Film dated 23 December 2019
(Approved Post Schedule);
Schedule 4- revised recoupment waterfall for the Film dated 8 November 2019 (Approved
Waterfall); and
Schedule 5 - revised credit schedule for the Film dated [ •] December 2019 (Approved Credit
Schedule).
In consideration of the agreements contained herein and other good and valuable consideration (the
receipt and adequacy of which are hereby acknowledged by all parties), and based upon KF2's
representations that the Film completed principal photography without invading any "contingency
allowance" previously set forth in the prior v13 draft of the budget (Prior Budget) (upon which the
Cost Reports to date have been based), Creasun, Argent, LU, Maze, FIV, SFI, Rinke and KF2
acknowledge and agree that the Approved Budget, Approved Finance Plan, Approved Post Schedule,
Approved Waterfall and Approved Credit Schedule are each approved by the parties as the budget,
finance plan, post-production schedule, waterfall and credit schedule for the Film, subject to the
following conditions:
1. Without the express prior written consent of Creasun in each instance, KF2 may not spend or
invade any of the following amounts (Approval Amounts):
a. the reduced Contingency (as defined in the Approved Budget in the amount of
€646,930);
b. any so-called "currency exchange gain" as a result of exchanging the budgeted
currencies at more favorable exchange rates than are utilized in the Approved Budget
(which amount is currently a minimum of €201,812);
c. the €176,000 allocated in category 6821-03 of the Approved Budget for German
financing costs, to the extent not used for the CoBa financing or the Argent bridge
financing; and/or
d. the $400,000 or $375,000 (as applicable) savings from the completion bond fee (i.e.
depending on whether the reduced completion bond fee is $75,000 or $100,000).
If any additional fees are paid to any producers or financiers (or any of their affiliates, principals
or representatives, etc.) from or out of the Approval Amounts in excess of their respective fees
in the Approved Budget, Argent shall also have the right to approve such payments; it being
understood that the foregoing Argent approval does not apply to the payment of any bona fide
LC/NS/9625/001/docs/057-007
out of pocket third party costs or expenses incurred by such individuals or entities in connection
with the production and delivery of the Film.
2. KF2 will discuss and consult in a meaningful way with Crea sun regarding the expenditure of the
amount allocated for CMP expenditure in category 5101 of the Approved Budget for the
payment of German post production costs. All such expenditure shall be for bona fide qualifying
German post production costs.
3. Although €530,000 of the Contingency is tagged as German contingency spend, the expenditure
of such amount (or any portion thereof) remains subject to the prior written approval of
Creasun; however, Creasun acknowledges that any such amount or portion that is not spent on
German costs will reduce the German tax credit by an amount equal to 25% of such unspent
amount.
4. KF2 will consult in a meaningful way with Creasun regarding the proposed reshoots, but KF2
shall have the right to proceed with such reshoots unless the cost therefor (i) exceeds $90,000
(as provided in the Approved Budget) or (ii) causes or is likely to cause KF2 to invade or spend
any portion of the Approval Amounts, in which event Creasun shall have the right to approve
the proposed reshoots.
5. All amounts contained in the Prior Budget and any additional amounts that have been added to
the Approved Budget for Johnny Lee, or any other Creasun or DNeg travel or expenses (in the
aggregate amount of $300,000) shall be available solely to Creasun in reimbursement of any
and all amounts incurred by Creasun or its employees and/or representatives in connection
with the Film, which amount may be credited by Creasun against and constitute part of
Creasun's funding in connection with the Film. This $300,000 amount is to be covered from the
following account categories within the Approved Budget, with any shortfall from elsewhere in
the direct cost portion of the Approved Budget, but not from any portion of the Approval
Amounts: 1202, 1206, 1508, 1509, 1510, 3710 and 5102.
6. Creasun has assumed the financial commitment of $130,000 (Music Commitment) previously
allocated to Universal Music to acquire the music publishing and soundtrack rights for the Film
and will therefore control all music rights in the Film. Creasun agrees to negotiate in good faith
with KF2 regarding the payment to KF2 of royalties (if any) with respect to the exploitation of
the music recordings and music publishing rights, in each case after recoupment of the Music
Commitment and all usual and customary fees, expenses, deductions and reductions.
7. As provided in the Financing Term Sheet (defined below}, any unspent savings from the
remaining contingency allowance or other Approval Amounts, or with respect to any amounts
remaining in the production accounts following delivery of the Picture, to the extent that any
such amounts are reimbursed or paid to Creasun, or result in Creasun funding less than the
entire amount of Crea sun funding for the Film, such reduction in or recoupment of the Creasun
funding shall be applied in reduction or recoupment (as applicable) of Creasun's Junior Equity
Contribution.
8. As also provided in paragraph 13 of the Financing Term Sheet, the parties acknowledge that, in
the event the Film is going over-budget or behind schedule, Crea sun has the right (but not the
obligation) to take over the production of the Film (Takeover Right} (in the same manner and
on the same terms as Film Finances Inc. (FFI} would have had if FFI were still providing a
traditional completion bond for the Film). For the purposes of determining whether the Film is
going over-budget or behind schedule, KF2 shall not be responsible for any schedule delays that
are caused solely by Lightning Cobra Films, Inc (Lightning), re:define FX Ltd or DNeg (collectively
with Lightning and re:Define Fx, DNeg) or by Creasun's failure to make any payments to DNeg
when such sums are due and payable pursuant to the Post Production Services Agreement
executed by and among Lightning, KF2 and Creasun, as distinguished from VFX delays that may
2
C- J\ I .f /r AMI\
Option Amendment and Extension ( Film)
l
LC/NS/962 5/001/docs/057-007
have been caused by late delivery of required footage or digital assets from KF2. Further, costs
and/or delays caused solely by events of force majeure, and costs reimbursed by insurance, or
for retroactive pay increases due to collective bargaining personnel, or due to third party
breaches not caused directly by KF2, shall not entitle Creasun to exercise any such Takeover
Right. Creasun may, however, take into consideration with respect to any proj ected or actual
"over-budget" circumstances, any invasion into the Approval Amounts that was not expressly
approved by Creasun as provided above. In addition, for Argent's sole benefit, (i) Creasun agrees
to consult in good faith with Argent and Maze prior to exercising its Takeover Right; it being
understood, however, that Creasun may thereafter proceed (in its sole discretion) to exercise
its Takeover Right; and (ii) if Creasun exercises it's Takeover Right, Creasun agrees to work
collaboratively with Argent with due respect for Argent's rights and interests relating to the
"Domestic Common Collateral" as defined in and in accordance with the provisions of the
lntercreditor Agreement dated as of April 5, 2019, among Creasun, Argent, Laser and KF2.
Further, if Creasun exercises its Takeover Right, Creasun and Maze will discuss and collaborate
with each other regarding any remaining financing to be provided in Germany; it being
understood, however, that with respect to any decisions that may delay the final delivery of the
Film, including without limitation any VFX related decisions, Creasun's decisions shall control.
Creasun acknowledges that Argent may hereafter provide an interim bridge loan (Argent
Interim Loan) to KF2 for the payment of certain production expenses that are currently due and
payable. The terms of any such interim bridge loan shall be subject to Creasun's prior written
approval, not to be unreasonably withheld. In the event Creasun exercises its Takeover Right,
Creasun further acknowledges and agrees that it will not take any action or otherwise cause any
action: (i) to divert any funding from the Argent Interim Loan or any funding from the German
subsidy funds, or any funding from CommerzBank in repayment of the Argent Interim Loan or
(subject to the provisions of paragraph 9 below) advanced against funding from the German
subsidy funds; and/or (ii) for the payment of (x) producer fees which are accrued, due and
payable to KatzSmith, B-Reel, Laser and/or Hammerstone pursuant to category 1201 of the
Approved Budget (to the extent payable under their respective agreements with KF2) and/or
(y) any German expenses that are required to be expended in connection with the German
subsidy funding as the same shall have been communicated to Creasun in writing consistent
with the approval provisions as set forth herein and subject to the provisions of paragraph 3
above and, to the extent required for the expenditure thereof, have been duly approved by
Creasun.
9. KF2 represents and warrants that under the CommerzBank loan agreement KF2 is entitled to
borrow loan proceeds in installments as needed in connection with the cash flow requirements
that correspond to the Approved Post Production Schedule. In this regard, KF2 agrees that (i) it
shall notify Creasun and Argent in writing in advance of each such borrowing under the
CommerzBank loan agreement, with a reasonable breakdown of how the borrowings are to be
spent on the production; and (ii) it shall not request any advance from CommerzBank for the
payment of any German costs which have not been expressly approved (to the extent required
hereunder) and/or which are not supported by German subsidy funding (e.g., if 400,000 Euros
of the 530,000 Euros tagged for German contingency spend is not spent and/or approved by
Creasun as provided in paragraph 3 above, then the German tax credit will be reduced by
100,000 Euros, and KF2 shall reduce its borrowing from CommerzBank accordingly. The
previously negotiated and approved Account Pledge Agreement in favor of Creasun with
respect to the CommerzBank accounts (other than the subsidy accounts as therein provided)
shall be executed and delivered to Creasun by the other parties to said Account Pledge
Agreement on or before any borrowing from CommerzBank. Creasun acknowledges that, if the
Argent Interim Loan (as approved by Creasun) has not been fully repaid out of oth er German
subsidy funds, the CommerzBank borrowing proceeds (or other third party financing against
0- (+ ~ ·f /.r (\J~ C
LC/NS/9625/001/docs/057,007
such German subsidy funds, to the extent approved by Creasun in writing) may be used to repay
the outstanding balance of the Argent Interim Loan.
By way of clarification and for the avoidance of doubt, the foregoing approvals shall not constitute a
waiver of any other Creasun approvals, conditions or rights; nor shall such approvals obligate Creasun
to fund or advance any sums or take any other actions that it is not otherwise obligated to spend or
do, which obligations (if any) shall be governed by the applicable terms of the Financing Term Sheet
dated as of April 5, 2019, entered into by and between KF2 and Creasun, and the related documents
entered into by KF2 and Creasun pursuant thereto (as the same may be amended, modified, restated
and supplemented from t ime to time).
By way of clarification and for the avoidance of doubt, the foregoing approvals shall not constitute a
waiver of any other Argent approvals, conditions or rights; nor sha ll such approvals obligate Argent to
fund or advance any sums or take any other actions that it is not otherwise obligated to spend or do,
which obligations (if any) shall be governed by the applicable terms of the Argent Investment
Agreement dated as of August 8, 2019 (as amended by the First Amendment to Investment Agreement
dated as of _ November 2019), entered into by and between KF2 and Argent, and the related
documents entered into by KF2 and Argent pursuant thereto (as the same may be amended, modified,
restated and supplemented from time to time).
This Agreement may be entered into in any number of counterpart s each of which when so executed
and delivered shall be an original. A coun terpart signature page of this Agreement executed by a party
and sent by facsimile or transmitted electronically in either Tagged Image Format Files (TIFF) or
Portable Document Format (PDF) shall be treated as an original, fully binding and with full legal force
and effect, and the parties waive any rights they may have to object to such treatment. A counterpart
shall be treated for all purposes as an original unless and until it is actually replaced by an original
counterpa rt.
The laws of the St ate of California govern this Agreement (and any non-contractual disputes arising in
relation to it) and the Courts located in the State of California shall have exclusive jurisdiction.
4
LC/NS/962S/001/docs/0S7-007
For and on behalf of MAZE PICTURES GMBH
~ ~Ml~~ITUTET
LC/NS/9625/001/docs/OS 7-007
SCHEDULE 1
APPROVED BUDGET
LC/NS/9625/001/docs/05 7-007
SCHEDULE 2
APPROVED FINANCE PLAN
lC/NS/9525!001/docs/057-007
SCHEDULE 3
APPROVED POST SCHEDULE
1. To Collection Agent in payment of the agreed Collection Agent's fee and expenses; then
3. To the Sales Agent (solely from and out of ROW Gross Receipts) in payment of its Sales
Commission of 7.5% in respect of ROW Gross Receipts (excluding China); to CAA/WME (solely
from and out of Domestic Gross Receipts) in payment of its Sales Commission of 5% in respect
of the Domestic Gross Receipts; to Frankfurt, Kurnit, Klein (solely from and out of Domestic
Gross Receipts) in payment of Domestic legal services an amount equal to 2% of Domestic
Gross Receipts and no greater than $120,000; then
4. To the Sales Agent (solely from and out of ROW Gross Receipts) in payment of its Sales
Expenses of up to $150,000 (Sales Expenses Cap) plus any additional expenses outside the
Sales Expenses Cap approved by the financiers in writing; then
1. Creasun Senior Loan in respect of an amount of USD12,000,000 and 15% per annum interest.
3. Film i Vast in respect of an amount of SEK 1,500,000 and a premium of 20%; then
4. Creasun and Argent pro rata and pari passu in respect of any amount unrecouped in Part C;
then
And a 10% corridor during such tier to FFF (applicable against tier below);then /cJ/ f ~ ·,
LC/NS/9625/001/ docs/ 0S7-007 ~
7. Pro rata and pari passu to:
8. To the Completion Guarantor in payment of any Completion Guarantor advances, if any; then
9. Net Profits:
!,V fit r
Hi Alex:
Best wish
Minglu Ma
Office: +1 3107488332
O: +1 2134572384
Http:// www.creasun.cn
If you are not the intended recipient, please notify the sender immediately and delete all
copies. Thank you.
--
Alex M. Lebovici
Founder / Producer
Hammerstone Studios
O. 424-324-5157
269 S Beverly Dr, #232
Beverly Hills CA 90212
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