Warner
                  Bros. Inc.

                4000
                  Warner Blvd.

                Burbank,
                  CA 91522

                818-954-6000

                Cable
                  Address: Warbros

              
	 


      

      EXHIBIT
        10.21


      July
        1,
        1984

      
Studio
        21
        Productions, Inc.

      c/o
        William Morris Agency, Inc.

      151
        El
        Camino, Beverly Hills, California 90212

       

       

      RE:
        "VACATION '84" - MATTY SIMMONS 

      


      Gentlemen:


       

      Reference
        is made to that certain agreement dated December 16, 1981 (“Agreement”), setting
        forth the terms and conditions between Warner Bros. Inc. (“Warner”) and Studio
        21 Productions, Inc. (“Studio 21”) in connection with the above-referenced
        matter.


       

      Pursuant
        to the Agreement, Studio 21 furnished the services of Matty Simmons to produce
        a
        motion picture entitled “National Lampoon’s Vacation”. In accordance with
        Paragraph 12 of the Agreement, Warner intends to produce a sequel to such
        motion
        picture, which picture is presently entitled “Vacation ‘84” (the ”Picture”).
        Studio 21 shall furnish the services of Matty Simmons to serve in the capacity
        of individual producer on the picture, on the following terms and
        conditions:


       

      	1.  	
              Development:
                

            


       

      Matty
        Simmons to perform all development services required by Warner for a total
        consideration of $35,000 which Studio 21 acknowledges has already been paid
        by
        Warner to Studio 321.


       

      	2.  	
              Producer
                Fee:
                

            


       

      If
        Warner
        sets the Picture for production, Matty Simmons to produce for consideration
        payable to Studio 21 of $350,000, payable 20%, less the development fee of
        $35,000, payable when the Picture is set for production, 60% at 3% per week
        for
        20 weeks beginning 6 weeks prior to the schedule commencement of principal
        photography of the Picture, 10% upon completion of scoring, and 10% upon
        delivery on the answer print. Subject to default, incapacity, or force majeure,
        Matty Simmons shall be pay-or-play to produce the Picture when the Picture
        is
        set for production by Warner. The Picture shall be deemed “set for production”
        by Warner at such time as the screenplay and budget have been approved by
        Warner, the principal cast members and director have been engaged by Warner,
        and
        a definite starting date has been scheduled for commencement of principal
        photography, subject to acceleration or delay to accommodate the availability
        of
        facilities, locations, or principal cast members.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      	3.  	
              Use
                of the Name “National Lampoon”:

            


       

      	A.  	
              For
                the use of the name “National Lampoon” in the Picture, Studio 21 shall
                receive $250,000 upon commencement on principal photography plus
                (i) 21⁄2 of
                the adjusted gross receipts of the Picture in excess of the greater
                of two
                times the cost of production of the Picture and interest once or
                actual
                cash breakeven including interest once, to actual breakeven; (ii)
                an
                allocation from Studio 21’s net profits of 5% of the gross receipts of the
                Picture in excess of actual moving breakeven; and (iii) deferments
                of
                $250,000 each from the gross receipts in excess of gross receipts
                equal to
                the aggregate of actual moving breakdown plus $10,000,000 of the
                gross
                receipts, and each $10,000,000 gross receipts thereafter. In the
                event
                production of the Picture is abandoned after commencement of principal
                photography, for any reason other than a default by Studio 21 or
                National
                Lampoon, Inc., Studio 21 shall repay Warner on demand that portion
                of that
                $250,000 paid on commencement of principal photography as the number
                of
                weeks from commencement of principal photography to abandonment bears
                to
                the scheduled number of weeks of principal photography of the Picture.
                In
                the event of a material default by Studio 21 or National Lampoon,
                Inc.,
                Studio 21 shall repay Warner the entire $250,000 on demand without
                any
                prejudice to any claim by Warner which it may have or assert against
                Studio 21 or National Lampoon, Inc. as a result of said
                default.

            


       

      	B.  	
              Warner
                shall have the right and obligation, subject to this paragraph B
                and
                paragraph 13E of the Agreement (incorporated by reference herein),
                to use
                the “National Lampoon” name as part of the title of the Picture and in
                connection with the advertising, distribution and marketing of the
                Picture. Whenever any draft of a screenplay is delivered to Warner,
                if
                Studio 21 advises Warner with the delivery of the screenplay or revised
                draft screenplay that Studio 21 disapproves of said screenplay or
                revised
                draft for the use of the name “National Lampoon” then if Warner elects to
                proceed with the development of the Picture, or hire another writer,
                or
                request revisions from the writer delivering the screenplay or revised
                draft, or sets the Picture for production, then Warner may elect
                (i) to
                terminate the agreement with Studio 21 including the right to use
                the name
                “National Lampoon” in connection with the Picture and Warner may proceed
                with the development and/ or production of the Picture and Warner
                and
                Studio 21 shall be released and discharged of any obligations to
                one
                another in connection with the Picture, or (ii) to proceed with the
                development and/ or the production of the Picture pursuant to this
                agreement with Studio 21 without the right to use the name “National
                Lampoon” in connection with the Picture without prejudice to Studio 21’s
                approval or disapproval of the next revised draft of the screenplay
                and
                the use of the name “National Lampoon” in connection with the
                Picture.

            


       

      


      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      4. Incorporation
        by reference:


       

      Paragraph
        3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13C, 13D, 13E, 13F and 16 are incorporated
        herein by reference and made a part hereof, provided that each reference
        to the
“picture” in the Letter Agreement shall be read to mean the Picture for purpose
        of this Agreement.

      


      Please
        indicate your acceptance of the foregoing by signing the bottom portion of
        this
        letter and returning it to the undersigned.

      


      


      Very
        truly yours,

      


      WARNER
        BROS. INC.

       

      


      By
        ______________________

                       Vice
        President

      


      


      ACCEPTED
        AND AGREED:

      


      NATIONAL
        LAMPOON, INC.


      


      By
        _____________________________

      Its

      


      


      


      


      STUDIO
        21
        PRODUCTION, INC.


      


      By
        _____________________________

      Its

      


      


      ________________________________

      Matty
        Simmons

       

       

      
        
           

        

        
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