Document:

<PAGE>   1
                                                                   EXHIBIT 10.39

                              STAN LEE MEDIA, INC.
                       15821 Ventura Boulevard, Suite 675
                                Encino, CA 91436

                              As of October 5, 1999

VIA FACSIMILE TRANSMISSION
--------------------------

Jeffrey D. Segal
10390 Santa Monica Boulevard, 4th Floor
Los Angeles, CA   90025

Ladies and Gentlemen:

        We, Stan Lee Media, Inc., a Colorado corporation ("Company"), hereby
grant you, Jeffrey D. Segal ("Segal"), an option (the "Option") to purchase one
hundred thousand (100,000) shares of Company's Common Stock, no par value, at an
exercise price of Five and NO/100 Dollars ($5.00) per share (the "Exercise
Price"), subject to adjustment as described below. The Option shall vest as of
January 22, 2000, may be exercised in whole or in part, and shall be exercisable
at any time after vesting to and including October 4, 2009.

        Each exercise of the Option shall be accomplished by presentation and
delivery to the Company of a notice of exercise, duly executed and accompanied
by payment of the Exercise Price for the number of shares of Common Stock
specified in such notice of exercise, together with all Federal and state taxes
applicable upon such exercise.

        The Company hereby agrees that at all times there shall be reserved for
issuance and delivery upon exercise of the Option such number of shares of its
Common Stock as shall be required for issuance and delivery upon full exercise
of the Option. All shares of the Company's Common Stock to be issued to Segal
upon exercise of the Option will be restricted securities as such term is
defined in Rule 144(a)(3) of the Securities Act of 1933, as amended.

        If Company at any times proposes to file a registration statement under
the Securities Act of 1933, as amended, respecting any securities of Company
(excluding registrations of securities to be offered in connection with
Company's employee benefit plans and registrations of securities to be offered
by Company in connection with acquisitions, mergers or similar transactions), it
will at such time give written notice to Segal of its intention to do so. Upon
the written request of Segal given within fifteen (15) days after receipt of any
such notice (which request shall specify the securities intended to be sold or
disposed of by Segal and describe the nature of any proposed sale or other
disposition thereof), Company shall use its best efforts, but shall not be
obligated, to cause all such securities specified in such request to be so
registered. In the event that any such registration shall be underwritten, if
the underwriters notify Company in writing that the inclusion in such
underwriting of such securities would materially and

<PAGE>   2

Jeffrey D. Segal
As of October 5, 1999
Page 2

adversely affect the underwriting, Company shall have the rightnot to include
such securities. In any registration pursuant to this paragraph, Segal shall pay
Company for the incremental portion of the Federal and state registration and
filing fees attributable to such securities and shall pay all underwriting
commissions, discounts, underwriting expenses and taxes attributable to such
securities.

        Segal shall not, by virtue hereof, be entitled to any rights of a
shareholder of the Company either at law or in equity, and the rights of Segal
under the Option are limited to those expressed herein.

        If the Company shall at any time issue Common Stock by way of dividend
or other distribution on any stock of the Company or subdivide or combine the
outstanding shares of Common Stock, then the Exercise Price shall be
proportionately decreased in the case of such issuance (on the day following the
date fixed for determining shareholders entitled to receive such dividend or
other distribution), or decreased in the case of such subdivision, or increased
in the case of such combination (on the date that such subdivision or
combination shall become effective). Upon any adjustment of the Exercise Price,
Segal shall thereafter (until another such adjustment) be entitled to purchase,
at the new Exercise Price, the number of shares, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock initially
issuable upon exercise of the Option by the Exercise Price in effect on the date
hereof and dividing the product so obtained by the new Exercise Price.

        In the event of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock (other than as a result of an
issuance of Common Stock by way of dividend or other distribution or of a
subdivision or combination), or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of the
Option), or in case of any sale or conveyance to any other corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, as a condition to any of the foregoing, the Company shall cause
effective provision to be made (including acceleration of vesting) so that Segal
shall have the right thereafter, by exercising the Option, to purchase the kind
and amount of shares of stock and other securities and property receivable upon
such reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance as if Segal had exercised the Option prior to such
transaction. Any such provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in the Option. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common Stock
and to successive consolidations, mergers, sales or conveyances.

<PAGE>   3

Jeffrey D. Segal
As of October 5, 1999
Page 3

        In the event the Company spins off a subsidiary by distributing to the
shareholders of the Company, as a dividend or otherwise, the stock of the
subsidiary, the Company shall reserve, for the life of the Option, shares of the
subsidiary to be delivered to Segal upon exercising the Option to the same
extent as if Segal were the owner of record of Common Stock on the record date
for payment of the shares of the subsidiary.

        The Option may not be sold, transferred, assigned or hypothecated by
Segal without the prior written consent of Company. Nothing express of implied
in this letter agreement is intended or shall be construed to confer upon or
give to any third party any rights or remedies by virtue of the Option granted
hereunder or any exercise or non-exercise thereof.

        This letter agreement shall be governed by the laws of the State of
California without regard to principles of conflicts of laws.

        If acceptable, please sign where indicated below and return an executed
counterpart of this letter agreement to Company.

                        Very truly yours,

                        STAN LEE MEDIA, INC.,

                        By:  /s/ Stephen M. Gordon
                             --------------------------------------------
                                Its:  Executive Vice President/Operations
                                      -----------------------------------

AGREED AND ACCEPTED AS OF
THIS 5TH DAY OF OCTOBER, 1999.

/s/ Jeffrey D. Segal
-------------------------------
Jeffrey D. Segal<PAGE>   1
                                                                   EXHIBIT 10.40
                              STAN LEE MEDIA, INC.
                       15821 Ventura Boulevard, Suite 675
                                Encino, CA 91436

                              As of October 5, 1999

VIA FACSIMILE TRANSMISSION
--------------------------

Paraversal, Inc.
c/o Stan Lee Media, Inc.
15821 Ventura Boulevard, Suite 675
Encino, CA   91436

Ladies and Gentlemen:

        We, Stan Lee Media, Inc., a Colorado corporation ("Company"), hereby
grant you, Paraversal, Inc. ("Paraversal"), an option (the "Option") to purchase
five hundred thousand (500,000) shares of Company's Common Stock, no par value,
at an exercise price of Five and 50/100 Dollars ($5.50) per share (the "Exercise
Price"), subject to adjustment as described below. The Option shall vest as of
January 22, 2000, may be exercised in whole or in part, and shall be exercisable
at any time after vesting to and including October 4, 2009.

        Each exercise of the Option shall be accomplished by presentation and
delivery to the Company of a notice of exercise, duly executed and accompanied
by payment of the Exercise Price for the number of shares of Common Stock
specified in such notice of exercise, together with all Federal and state taxes
applicable upon such exercise.

        The Company hereby agrees that at all times there shall be reserved for
issuance and delivery upon exercise of the Option such number of shares of its
Common Stock as shall be required for issuance and delivery upon full exercise
of the Option. All shares of the Company's Common Stock to be issued to
Paraversal upon exercise of the Option will be restricted securities as such
term is defined in Rule 144(a)(3) of the Securities Act of 1933, as amended.

        If Company at any times proposes to file a registration statement under
the Securities Act of 1933, as amended, respecting any securities of Company
(excluding registrations of securities to be offered in connection with
Company's employee benefit plans and registrations of securities to be offered
by Company in connection with acquisitions, mergers or similar transactions), it
will at such time give written notice to Paraversal of its intention to do so.
Upon the written request of Paraversal given within fifteen (15) days after
receipt of any such notice (which request shall specify the securities intended
to be sold or disposed of by Paraversal and describe the nature of any proposed
sale or other disposition thereof), Company shall use its best efforts, but
shall not be

<PAGE>   2

Paraversal, Inc.
As of October 5, 1999
Page 2

obligated, to cause all such securities specified in such request to be so
registered. In the event that any such registration shall be underwritten, if
the underwriters notify Company in writing that the inclusion in such
underwriting of such securities would materially and adversely affect the
underwriting, Company shall have the right not to include such securities. In
any registration pursuant to this paragraph, Paraversal shall pay Company for
the incremental portion of the Federal and state registration and filing fees
attributable to such securities and shall pay all underwriting commissions,
discounts, underwriting expenses and taxes attributable to such securities.

        Paraversal shall not, by virtue hereof, be entitled to any rights of a
shareholder of the Company either at law or in equity, and the rights of
Paraversal under the Option are limited to those expressed herein.

        If the Company shall at any time issue Common Stock by way of dividend
or other distribution on any stock of the Company or subdivide or combine the
outstanding shares of Common Stock, then the Exercise Price shall be
proportionately decreased in the case of such issuance (on the day following the
date fixed for determining shareholders entitled to receive such dividend or
other distribution), or decreased in the case of such subdivision, or increased
in the case of such combination (on the date that such subdivision or
combination shall become effective). Upon any adjustment of the Exercise Price,
Paraversal shall thereafter (until another such adjustment) be entitled to
purchase, at the new Exercise Price, the number of shares, calculated to the
nearest full share, obtained by multiplying the number of shares of Common Stock
initially issuable upon exercise of the Option by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the new Exercise
Price.

        In the event of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock (other than as a result of an
issuance of Common Stock by way of dividend or other distribution or of a
subdivision or combination), or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of the
Option), or in case of any sale or conveyance to any other corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, as a condition to any of the foregoing, the Company shall cause
effective provision to be made (including acceleration of vesting) so that
Paraversal shall have the right thereafter, by exercising the Option, to
purchase the kind and amount of shares of stock and other securities and
property receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance as if Paraversal had exercised
the Option prior to such transaction. Any such provision shall include provision
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in the Option. The foregoing

<PAGE>   3

Paraversal, Inc.
As of October 5, 1999
Page 3

provisions shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.

        In the event the Company spins off a subsidiary by distributing to the
shareholders of the Company, as a dividend or otherwise, the stock of the
subsidiary, the Company shall reserve, for the life of the Option, shares of the
subsidiary to be delivered to Paraversal upon exercising the Option to the same
extent as if Paraversal were the owner of record of Common Stock on the record
date for payment of the shares of the subsidiary.

        The Option may be sold, transferred, assigned or hypothecated by
Paraversal without the prior written consent of Company. Nothing express of
implied in this letter agreement is intended or shall be construed to confer
upon or give to any third party any rights or remedies by virtue of the Option
granted hereunder or any exercise or non-exercise thereof.

        This letter agreement shall be governed by the laws of the State of
California without regard to principles of conflicts of laws.

        If acceptable, please sign where indicated below and return an executed
counterpart of this letter agreement to Company.

                               Very truly yours,

                               STAN LEE MEDIA, INC.,

                               By: /s/ Stephen M. Gordon
                                   --------------------------------------------
                                            Its:  EVP/Operations
                                                  -----------------------------

AGREED AND ACCEPTED AS OF
THIS 5TH DAY OF OCTOBER, 1999.

PARAVERSAL, INC.

  /s/ J.P. Paul
  ---------------

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