Professional Documents
Culture Documents
HHSE Daisy Complaint
HHSE Daisy Complaint
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SHUTTLEWOOD INVESTMENT’S LTD., a ) Case No:
10 Bahamian international business company; )
COMPLAINT FOR:
11 DAISY WINTERS THE FILM, LLC, a )
California limited liability company; ) 1. BREACH OF CONTRACT –
12 ) COUNT I
Plaintiffs, )
13 vs. ) 2. TORTIOUS BREACH OF IMPLIED
) COVENANT OF GOOD FAITH
14 AND FAIR DEALING – COUNT I
HANNOVER HOUSE, INC., a Wyoming )
15 corporation; FILMWORKS CREATIVE )
3. BREACH OF CONTRACT –
SERVICES, LLC, a California limited liability ) COUNT II
16 company a/k/a MEDALLION RELEASING, )
17 INC.; BOOKWORKS, INC., an Arkansas ) 4. TORTIOUS BREACH OF IMPLIED
corporation; TRUMAN PRESS, INC., an ) COVENANT OF GOOD FAITH
18 Arkansas corporation; PLAZA ) AND FAIR DEALING – COUNT II
ENTERTAINMENT, INC., an Arkansas )
19 5. INTENTIONAL
corporation; MAYFIELD PROPERTIES, ) MISREPRESENTATION
20 LLC, an Arkansas limited liability company; )
HEMDALE COMMUNICATIONS, INC., a ) 6. MISAPPROPRIATION OF FUNDS
21 Florida corporation; PARKINSON RICE )
ORGANIZATION FILM, INC., a California ) 7. CONVERSION
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corporation; HANOVERSHOPS, business )
entity unknown; BIG HAT ENTERPRISES, ) 8. UNJUST ENRICHMENT
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INC., an Arkansas corporation; ERIC ) 9. UNFAIR BUSINESS PRACTICES
24 PARKINSON, an individual; DON FREDRIK ) (CIVIL CODE SECTION 17200 ET
25 SHEFTE, a/k/a FRED SHEFTE, an individual; ) SEQ.)
and DOES 1-20 inclusive, )
26 ) 10. ACCOUNTING
)
Defendants.
27 ) DEMAND FOR JURY TRIAL
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16 2. Plaintiff DAISY WINTERS THE FILM, LLC (“Daisy”) is, and at all times mentioned
17 herein was, a California limited liability company. Plaintiff Daisy is the authorized owner of the original,
18 feature film drama “Daisy Winters” (the “Picture”) and at all times alleged herein owned all tangible and
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16 mentioned herein was, the President/CEO of Defendant Hannover, set forth herein.
17 14. Plaintiffs are informed and believe that Defendant DON FREDRIK SHEFTE, a/k/a
18 FRED SHEFTE (“Shefte”) is, and at all times mentioned herein was, an individual residing in the State
19 of Arkansas.
20 15. Plaintiffs are informed and believe that Defendant Shefte is, and at all times mentioned
21 herein was, the COO/CFO of Defendant Hannover, set forth herein.
22 16. Defendants Hannover and Medallion are in the business of marketing, representing and
23 distributing film and television programs in all applicable formats and media for theatrical releases, home
24 video and video-on-demand markets in the territory of the United States of America and English-
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speaking provinces, including but not limited to Canada.
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17. Plaintiffs are informed and believe that at all times mentioned herein, there was such a
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unity of interests between each of the individual and corporate Defendants named herein, that the
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separate corporate entities should be disregarded, and the corporate entities of the Defendants should be
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17 19. The Court has subject matter jurisdiction over this action pursuant to California
18 Constitution Article VI, § 10, which grants the Superior Court original jurisdiction in all cases except
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17 24. The Theatrical Marketing Plan contemplated an initial expenditure for prints and ads of
18 not more than Two Hundred Fifty Thousand Dollars ($250,000.00), which was to be advanced by
19 Shuttlewood as provided in the Agreement, which Shuttlewood performed (the “Advanced Costs”).
20 25. Upon collection of gross receipts derived from the distribution and bargained for
21 exploitation of the Picture in the Territory from distribution arrangements made by Hannover and
22 Medallion during the term of the Agreement (the “Gross Receipts”), the parties agreed to distribute the
23 Gross Receipts first to Shuttlewood for repayment of its Advanced Costs, and any remaining funds to
24 Hannover and Medallion in payment of the commission fee.
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26. In connection therewith, Shuttlewood, as lender, and Hannover and Medallion, as
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borrower, entered into that certain Promissory Note dated July 11, 2017 and attached as Exhibit “E” to
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the Agreement in the principal amount of $250,000.00 for repayment of the sums advanced plus interest
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and fees upon sufficient collection of Gross Receipts or the maturity date of July 14, 2018, whichever
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17 30. As a result, Shuttlewood did advance the Additional Advanced Costs in the amount of
18 $80,000.00 on or before October 20, 2017 by delivery to Big Hat for Hannover and Medallion.
19 31. By its express terms, Note 2 is supplemental to Note 1, and as such both Notes incorporate
20 the terms of one another.
21 32. Since the date of execution of the Agreement and despite repeated requests for same,
22 Defendants have failed to provide documented evidence of theatrical receipts for audit and
23 reconciliation. In fact, Plaintiffs are informed and believe that Defendants did not perform their
24 obligations set forth in the Notes, for which Plaintiffs paid handsome consideration, such that no
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distribution, release or advertising effort was made on behalf of Plaintiffs as contemplated by the
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Agreement.
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18 38. Plaintiff realleges and incorporates by reference all of the allegations contained in the
20 39. On or about July 5, 2017, Plaintiff Daisy and Defendants Hannover and Medallion
21 entered into the valid written Agreement whereby Defendant agreed to represent Plaintiff in
22 consideration for exclusive rights to negotiate the marketing and distribution deal for the Picture with
23 Defendants Hannover and Medallion more fully identified and described in the above and the terms of
25 40. Plaintiff fully performed all of its obligations under the Agreement.
26 41. Defendants materially breached their duties and obligations under the Agreement by,
27 inter alia:
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20 53. On or about October 17, 2017, Shuttlewood, as lender, and Hannover and Medallion, as
22 54. Note 2 states it is a supplement to Note 1, and the terms of each are incorporated into one
23 another.
24 55. Plaintiff fully performed its obligations under the Notes.
25 56. Defendants Hannover and Medallion breached their duties and obligations under the
26 Notes by failing to pay the amounts due and owing upon the respective maturity dates despite formal
27 demand.
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10 (By Plaintiff Shuttlewood Against Defendants Hannover, Medallion and Does 5-15, inclusive)
11 59. Plaintiff refers to each of the foregoing paragraphs in their entirety, and hereby
12 incorporate them by reference as though fully set forth herein.
13 60. Implied in every contract, including these Notes, is the covenant of good faith and fair
14 dealing by which the contracting parties are bound. Comunale v. Traders & General Ins. Co., (1958) 50
15 Cal. 2d 654, 658.
16 61. Plaintiff has performed all of its obligations required to be performed by it in accordance
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with the terms of the Notes.
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62. By failing and refusing to comply with the terms of the Notes as agreed, Defendants
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Hannover and Medallion unfairly interfered with Shuttlewood’s right to receive the benefits of the Notes.
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63. As a direct, legal and proximate result of said breach of contractual duties and obligations
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due and owing to Plaintiff, Plaintiff sustained loss, injury and financial damages within the jurisdictional
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limits of this Court and in an amount according to proof at trial.
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24 FIFTH CAUSE OF ACTION
25 INTENTIONAL MISREPRESENTATION
26 (By All Plaintiffs Against All Defendants and Does 1-20, inclusive)
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64. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
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incorporates them by reference as though fully set forth herein.
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16 period and preventing the Picture from ever being marketed in any territory again, in addition to being
17 deprived of the use of the monies loaned under the Notes, all to Plaintiffs’ direct and consequential
18 damages.
19 68. Plaintiffs reasonably and materially relied on the Defendants’ representations due to their
20 expertise in the film industry and repeated expressions regarding their purported “track history” and
21 demonstrated success.
22 69. Plaintiffs were harmed and their reliance on Defendants’ representations was a substantial
23 factor in causing their harm. Plaintiffs would not have foregone opportunities with other distributors
24 and licensees, and/or entered into any agreement with Defendants had Plaintiffs known that Defendants
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would not fulfill their duties and promises to distribute, advertise, and market the picture, or known that
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Defendants would market the Picture internationally and/or had no intention of repaying the monies
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loaned under the Notes, and instead had plotted to misappropriate them for their own use all along.
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70. Defendants’ misrepresentations were a substantial factor in causing Plaintiffs’ harm.
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17 c. It was done with the purposeful and intentional design of putting Defendants' own
18 personal interests ahead of Plaintiffs’ rights and interests, at the expense of Plaintiffs’
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16 87. Plaintiffs are informed and believe and thereon allege that as a result of Defendants'
17 ongoing oppressive conduct and exclusion of Plaintiffs, Defendants have unjustly been enriched through
18 the exclusive right to sell and distribute the Picture afforded by Plaintiffs, as well as the bargained-for
27 89. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
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16 93. Defendants' willful and conscious disregard for Plaintiffs' rights and the harm caused to
19 94. As a result of Defendants' wrongful, unlawful and/or unfair conduct, Plaintiffs are entitled
20 to compensation of all the monies lost in reliance upon Defendants' failure to market, advertise, license,
21 and distribute the Picture.
22 95. Defendants' acts have impaired Plaintiffs' goodwill and have otherwise adversely affected
23 Plaintiffs' business and reputation by use of unfair and fraudulent business practices. Also, Defendants'
24 conduct violates federal and state statutory law, as set forth herein.
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96. These acts constitute unfair competition and unfair business practices under California
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Business and Professions Code §17200 et seq., the analogous statutes of other states, and California
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common law.
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8 ACCOUNTING
9 (By All Plaintiffs Against All Defendants and Does 1-20, inclusive)
10 99. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
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MEMORANDUM OF AGREEMENT
1. FACTS: This Agreement is made and entered with reference to the following facts:
a. DWF is the authorized owner of the Picture and/ or the copyright proprietor and licensing
source for the Picture.
b. Hannover House, Inc. and Medallion Releasing, Inc. are in the business of distributing and
representing films and television programs in all applicable formats and media as set forth
herein for the theatrical, packaged good home video and video-on-demand markets in the
Territory of the United States of America (including its territories and possessions), and
English-speaking provinces of Canada including embassies and military bases but excluding
airline rights (the "Territory").
c. Licensor wishes to engage Sales Agency to represent the Picture for a United States and
Canada theatrical engagement prior to releasing the Picture on to physical home video
devices for resale (e.g., DVDs, BluRays and Ultra HD videograms) for sales to retailers, on-line
sellers, and other appropriate outlets in the Territory under the Sales Agency terms
described hereunder, as well as for Video-On-Demand ("V.O.D.") and all forms of Television
(''T.V. Rights"), but for the avoidance of doubt excluding airlines and computer applications
related to the Picture. It is understood and agreed that the theatrical release of the Picture
by Sales Agency shall conform to the release requirements as set forth to qualify as an
eligible title for a Netflix Subscription Video-On-Demand sale, which under current licensing
practices by Netflix, results in an 18-month S.V.O.D. licensing fee of approximately twenty-
five-percent (25%) of an eligible film's theatrical box office gross revenues.
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2. PARTIES: LICENSOR: Daisy Winters the Film, LLC
c/o Bruns, Brennan & Berry, PC
401 Wilshire Blvd., 12th Floor
Santa Monica, CA 90401
Tel. +61 409 516 009 I Email: JaneH@phg.com.au
3. TERRITORY AND MEDIA: Except as otherwise defined or limited hereunder, Sales Agency
shall act as the exclusive and direct releasing entity in the Territory in the languages of
English. Applicable media shall include theatrical exh ibition and non-theatrical public
performance (including film festivals) and physical home video devices (i.e., pre-recorded
home videos for private, in -home viewing, including but not limited to DVDs, Blu-Rays and
UltraHD videogram units). Media rights also include all forms of "Video-On-Demand"
streaming rights, (including but not limited to "Subscription " VOD, "Premium" VOD and
"Per-Transaction" VOD rights) except as may be specifically prohibited or otherwise
limited by the restrictions as set forth in this agreement or by mutual instrument with
respect to non-exclusivity for certain Video-On-Demand outlets. Sales Agency's goal in
the release of the Picture is to promptly release the Picture to theatres as quickly as
reasonably possible, in order to position the Picture for eligibility and competitiveness for
the 2017 "awards-season" considerations, as well as to structure a safe and cost-effective
strategy to generate revenues and to maximize the likelihood that the Picture will qualify
for a Netflix Subscription Video-On-Demand license in the Territory.
4. TERM: The Initial Term for Sales Agency's representation of the Picture shall be for
two (2) years from the date of first release by Sales Agency into the Territory; Sales
Agency shall retain the option, at Sales Agency's sole discretion and upon written notice
to Licensor no later than ninety (90) days before the end of the Term, to renew the Term
for an additional five (5) years if the cumulative Licensor Net Revenues (as defined
further in paragraph "10" below) to the Licensor during the Initial Term, shall have
exceeded eight-hundred-thousand dollars (USD $800,000) to Licensor as a result of Sale
Agency's performance of its duties hereunder.
5. SALES AGENCY'S MARKETING & DISTRIBUTION COSTS: Sales Agency shall provide
Licensor with a detailed theatrical release marketing plan and budget for the release of
the Picture into the Territory (the "Theatrical Marketing Plan"). This Theatrical Marketing
Plan shall detail Sales Agency's best recommendations for release methodologies of the
Picture in order to qualify for the Netflix S.V.O.D. contract and to best position the Picture
for maximum home video revenues. Attached to this agreement are the following
Exhibits which summarize the theatrica l launch plans cu rrently anticipated by Sales
Agency, specifically:
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a) Exhibit "Pt' - Theatrical Launch Markets - Sales Agency is recommending
that the Picture be released to theatres in the USA on or about October
13, 2017. The target release includes approximately one-hundred (100)
theatres simultaneously in most of the top 40 largest DMA Markets in the
United States, as well as key markets in Canada;
b) Exhibit "B" - Theatrical Release Budget - Sales Agency feels that the
release of the Picture to the above markets w ill cost approximately two-
hundred-fifty-thousand dollars (USO $250,000), which shall be provided
by Shuttlewood Investments Pty Ltd ("Shuttlewood"), unless specifically
excepted and provided through Sales Agency or accommodated through
vendor credit arrangements which may be applicable for certain line item
expenses ("Theatrical P&A");
c) Exhibit "C" - Basic Home Video Launch Costs I Costs of Goods &
Fulfillment - This Exhibit details the costs that Sales Agency shall incur
(separate and apart from Theatrical P&A) fo r the preparation, packaging
and launch of the Picture onto Home Video physical formats (DVD, Blu-
ray); this Exhibit also lists the current pricing for bulk quantity DVD and
Blu-ray manufacturing and outbound freight.
d) Exhibit "D" - Sales Ranges & Profitability Analysis - Attached for Licensor's
review is a summary of the likely ranges for the Picture's performance in
all media covered under this agreement, from Low-End, through Forecast,
Target (and for theatrical revenues "Potential") achievement levels. The
inclusion of this chart of Sales Ranges & Profitability Analysis is meant as a
managerial tool to review the likely performance levels for the Picture
based upon current market conditions and recently released film s for
Sales Agency. This report is not meant to express or imply a warranty or
guarantee that the consumer reaction and commercial response to the
Picture shall conform to these expectations.
6. THEATRICAL & HOME VIDEO COMMITMENT DETAILS - Sales Agency shall retain final
approval (after meaningful consultation with Licenso r) of the number of markets and screens
selected for the initial theatrical release of the Pictu re in the USA, provided, however, that
the following minimum release obligations shall apply :
a) Minimum Number of Prints (DCP Drives) - At least one-hundred (100) theatre locations
shall be opened for the initial USA and Canadian Theatrical Re lease, which shall include
the initial locations and the expansion locations.
b) Minimum Prints & Ads Expenditure - The theatrical release to theatres in the USA and
English-speaking provinces of Canada by Sales Agency shall include an expenditure of
Theatrical P&A of approximately two-hundred-fifty-thousand dollars (USO $250,000), but
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not to exceed two-hundred-fifty-thousand dollars (USD $250,000) without the prior
written approval of Licensor, which Theatrical P&A shall be provided to Sales Agency (or
paid directly to designated suppliers), by Shuttlewood as described further in this
agreement, $150,000 within five (5) business days of execution of this Agreement and
the Promissory Note attached as Exhibit E, and $100,000 as reasonably requested by
Sales Agency on or about September 15, 2017.
c) Minimum Theatrical Release Markets - The theatrical release of the Picture shall include
at least thirty-five (35) of the top forty (40) largest markets, as measured by the Nielsen
DMA list, or such additional markets as may be required in order to qualify for the Netflix
S.V.O.D. license.
With respect to costs that Sales Agency will spend or incur during the marketing and
Distribution of the Picture onto physical home video devices, including but not limited to the
mastering, packaging and pre-manufacturing costs are expected to be limited to
approximately ten-thousand dollars (USD $10,000), ("Basic Home Video Marketing Costs").
These Basic Home Video Marketing Costs are itemized on Exhibit "C".
In addition to the Basic Home Video Marketing Costs, Sales Agency shall be entitled to spend
up to twenty-five cents (USD $.25) per videogram unit shipped for additional advertising
support ("Video Consumer Ad Fund"). Lastly, all direct and reasonable third-party costs
incurred by Sales Agency for the physical manufacturing, replication, packaging, shipping and
general order fulfillment of purchase orders for videograms of the Picture shall be
recoupable to Sales Agency ("Manufacturing & Fulfillment Costs").
a). A DCP format master of the feature (JPEG-2000), or if no DCP exists, a high-definition
format video master (Digital Hard Drive or HD CAM SR Preferred, or ProRes 444, 29.97
fps), which video master shall be suitable as a source for the creation of a theatrical
quality DCP release element. The master shall contain a commercially suitable format of
stereo and "split" audio tracks, synchronized to the visual elements of the Picture, and
mixed in a professional manner; if available or needed for the creation of a trailer, the
" stem" audio tracks shall also be delivered or made availab le to Sales Agency via a Lab
Access letter.
b). A reasonable amount of art elements and digital graphic still images from the
production (or HD "frame grabs") which are of a quality and quantity that would be
suitable for the creation of key art p,asters, advertising and video packaging, as
reasonably requested by Sales Agency; and,
9. SALES AGENCY FEES. Sales Agency shall receive a Sales Agency Fee of fifteen percent
(15%) of all Gross Revenues received by Sales Agency on account of the exploitation of
the Distribution Rights in all media as set forth in paragraph 6, above, before deduction
for the recoupment by Sales Agency of all of its direct and verifiable Distribution Costs
and Expenses (including any of the Theatrical P&A which may have been spent by Sales
Agency separate and apart from the Theatrical P&A provided by Shuttlewood as
described in paragraph 6b above, the Basic Video Marketing Costs, the Consumer Video
Ad Fund and the Manufacturing and Fulfillment Costs). Sales Agency agrees to fully defer
its Sales Agency Fee until such time that the Theatrical P&A provided by Shuttlewood,
including applicable fees and interest due to Shuttlewood, shall have been fully repaid to
Shuttlewood. At such time, Sales Agency shall be entitled to recapture all of its
applicable, deferred Sales Agency Fees. At such point in time that the cumulative total of
payments actually rendered to Licensor as Licensor Net Revenues (as defined below)
under this agreement shall have reached five-hundred-thousand dollars (USO $500,000),
excluding payments to Licensor for reimbursement of any theatrical releasing costs,
thereafter, the applicable Sales Agency fee paid to Sales Agency on future sales shall be
increased to twenty-percent (20%).
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10. DISTRIBUTION OF GROSS RECEIPTS: Gross Receipts derived from the distribution and all
exploitation of each Film in the Territory from distribution arrangements made by Sales
Agency during the Term (included any extension thereof) shall be divided between the
parties as follows and in the following order: (1) Until Shuttlewood has fully recouped
the Theatrical P&A, applicable fees and interest thereon, which shall be payable from any
and all revenues from any and all media covered under this Agreement, Sales Agency
shall fully defer all of its applicable Sales Agency's fees and expenses. The initial
distribution fee due to Sales Agency shall be fifteen-percent (15%) calculated from the
first dollar of gross Receipts. (2) Next, Sales Agency and Licensor shall each be entitled to
retain and I or be paid recoupment of all of each of their direct, out of pocket costs and
expenses incurred in release of the Picture, (including any overage amounts incurred by
Sales Agency for the Basic Video Marketing Costs, the Consumer Video Ad Fund and the
Manufacturing and Fulfillment Costs). The formula for which shall be based on a pro-rata
I pari-passu basis which takes into account all of the Theatrical and Home Video
expenditures by both Licensor and Sales Agency. Third, after recoupment of costs, Sales
Agency shall be entitled to be paid all of its applicable and previously deferred Sales
Agency fees which were previously deferred in favor of the recoupment of costs. Finally,
the balance of revenues after payment of the full Sales Agency fees, and the recoupment
of costs to Sales Agency and Shuttlewood (including payment of applicable fees and
interest to Shuttlewood), shall be paid to Licensor {"Licensor's Net Revenues").
Determination of Gross Receipts shall be detailed in an accounting statement and
applicable payment of Licensor's Net Revenues, which accountings shall be provided to
Licensor by Sales Agency on a calendar quarterly basis, due on or before forty-five (45)
days following the close of each calendar quarter; provided that during the first twelve
months following the initial release of the Picture, accounting reports and payments shall
be rendered by Sales Agency to Licensor on a monthly basis, due no later than thirty (30)
days following the last day of each calendar month.
10a). "VIDEO MANUFACTURING" - Sales Agency shall utilize a quality manufacturer for the
replication I duplication and fulfillment of home video devices (DVD and BluRays) which
shall be a licensed manufacturer and shall conform to the product quality requirements
of Walmart, Target, Red box and Best Buy ("Key Retailers"). Sales Agency shall not "mark-
up" the costs for manufacturing and fulfillment; Sales Agency shall provide copies of all
video replication purchase orders and invoices to Licensor. Sales Agency shall reasonably
consider Licensor's recommendations regarding suitable labs or video replication
facilities, provided, however, that such facilities meet the quality requirements for Key
Retailers, and provided that such facilities have total net manufacturing prices equal to or
lower per unit than the facility recommended by Sales Agency.
11. THEATRICAL P&A / OPERATIONAL SPECIFICS - It is understood and agreed that Sales
Agency and Licensor shall work together to design and implement the theatrical releasing
plan for the Picture, including outreach to consumers and specialty markets. Licensor
shall endeavor to recruit the support for key cast members to attend a "Media Day" in
New York City, where major publications and broadcasters will be able to briefly interview
talent.
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12. INTERNATIONAL SALES REPRESENTATION / DISTRIBUTION - In the event that Sales
Agency is able to place the Picture w ith a major studio or major sales agency for sales,
marketing, distribution and licensing into territories and media outside of the Territory,
and that Licensor accepts such an opportunity and engages said major studio or major
sales agency for rights outside the Territory, then Sales Agency shall be entitled to a
referral fee of five percent (5%) of revenues paid by said international sa les agency to
Licensor during the first year of such representation for international sales and licensing.
14. INDEMNITY: Licensor will and does hereby agree to indemnify, defend, and hold Sales
Agency harmless from and with regard to any and all third-party claims, liabilities,
demands, settlements and su its arising out of or relating to the breach by Licensor of its
ob ligations, warranties and representations under this Agreement. Sales Agency will and
does hereby agree to indemnify, defend and hold Licensor harmless from and regarding
any and all third-party claims, liabilities, demands, settlements and suits arising out of or
relating to the breach by Sales Agency of its obligations, warra nties and representations
under this Agreement and/or regarding the marketing, advertising, distribution or other
exploitation of the Picture.
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(a). In addition to the above, Sa les Agency agrees to: Accord Licensor's
customary credit and logo in advertising; Honor third party credit obligations in
advertising (Licensor to provide statement of requirements); Leave intact all credits on
the Picture as delivered (subject to Sales Agency's right to add credits as specified in
Paragraph 7 hereof).
15. Default; Notice and Opportunity to Cure; Survival of Certain Terms after Termination. If
any of the following occu rs, a default ("Default") by Sales Agency shall exist: (i) failure of
the Sales Agency to observe any term, covenant, warranty, or agreement contained in
this Agreement unless such failure is cured within 10 calendar days of receipt by the Sales
Agency of written notice from the Licensor of such event of Default; (ii) the filing of any
voluntary or involuntary bankruptcy, reorganization or insolvency, or the appointment of
a receiver for the Sales Agency; (iii) the Licensor determines in good faith t here has
occurred a material adverse change in the business or prospects of Sa les Agency,
financial or otherwise unless such failure is cured within 10 calendar days of receipt by
the Sales Agency of written notice from the Licensor of such event of Default; or (iv) Eric
Parkinson is not actively involved as a sen ior executive for the Sales Agency for a period
of thirty consecutive (30) days. Upon occurrence of an event of Default by Sales Agency,
subject to any cure period specified herein, the Licensor may, by written notice to the
Sales Agency, terminate this agreement. In the event that this Agreement is terminated
for any reason, the indemnities, representations and wa rranties set forth in this
Agreement shall survive and Sales Agency's right to be paid its Sales Agency Fee and
direct and verifiable Distribution Costs and Expenses shall continue in respect of binding
contractual arrangements for the exploitation of the Picture concluded by Sales Agency
prior to the date the termination notice is received by Sales Agency from the Licensor,
and Sales Agency shall return to the Licensor, or dispose in such a manner as the Licensor
directs, all materials held by Sales Agency in relation to the Picture.
16. GENERAL PROVISIONS: In the event of a dispute or lawsuit arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover its costs and expenses of
suit, including reasonable outside attorneys' and expe rts' fees and actual out of pocket
costs and this Agreement shall be governed by the law of the residence of the defendant
and exclusive jurisdiction and venue is submitted to by the parties and shall be in the
State and County of the residence of th e defendant. This Agreement, any Exhibits
attached hereto, and any written amendments signed by both parties wh ich may be
added shall constitute the entire agreement between the parties and, except as expressly
provided herein, no other statement, promise, warranty or representation, whether
written or verbal has been relied upon by the parties. The terms and provisions of this
Agreement shall be severable and, in the event any part or all of any term or provision is
determined to be unenforceable, the remainder shall be given and rema in in full force
and effect. This Agreement may be executed in counterparts and any photocopy, fax,
scanned or emailed copy of this Agreement bearing one or more signatures shall be valid,
binding and admissible into evidence, for all purposes, as though original. This
Agreement shall not be construed against the drafter, as though it had been mutually and
equally drafted by both parties. There is no Third-Party Beneficiary of this Agreement.
This Agreement may be amended only in a writing signed by all parties. This Agreement
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is binding on and shall inure to the benefit of the successors, assigns, heirs, beneficiaries,
officer, directors and members of all parties. Time is of the essence reading all terms and
conditions of this Agreement. Notices shall be by First Class US Mail, postage prepaid to
either party at the address set forth herein, above, which address may be changed by any
party by notice as provided for herein. This Agreement may not be assigned except in
writing and approved by all parties.
17. AUDIT: Licensor shall have the right to audit all of Sales Agency's books and records
relating to sa les, collections and expenses for the title up to twice per year, at Licensor's
expense. In the event that the results of such audit reveal a shortfall in payments due to
Licensor of more than three percent (3.0%), Sales Agency shall bear the costs of the audit
up to ten thousand dollars ($10,000). Licensor shall inform Sa les Agency in writing of its
intention to audit with not less than five (5) business days' notice prior to
commencement of the audit. The audit shall be conducted during customary business
hours at the principal location of Sales Agency's business in Fayetteville Arkansas. Any
shortfall disclosed by the audit and any costs of the aud it to be born by Sales Agent shall
be paid to Licensor within fifteen (15) days of notice of such amount. In addition, Sales
Agency agrees to issue to licensor detailed statements on a monthly basis for the first six
months following the initial release launch and on a quarterly basis thereafter, containing
all pertinent information related to sales, collections, expenses and payments.
18. COPIES. Sa les Agency shall provide Licensor with thirty (30) copies of the DVD and thirty
(30) copies of the Blu-ray videograms free of charge. Producer may also purchase from
Sales Agency copies of the DVD or Blu-ray units of the Picture at "cost" for resale by
Producer to those excluded accounts as may be specified by Producer at a later date.
19. SALES AGENCY'S LOGO / PRESENTATION CREDITS - For clarity, Sales Agency shall be
authorized to place its video logo on all copies of the Picture in the Territory during the
Term, and to place its graphic logo and address contact details on all principal theatrical
print advertising, television spots and home video packaging for the Picture in the
Territory during the Term. Additiona lly, Sales Agency shall be entitled on the Picture's
credit block as utilized in posters, ads and video packaging in the Territory during the
Term, which presentation credit shall appear in first position of the Picture's Credit Block,
and worded in a manner substantially similar to: HANNOVER HOUSE with DAISY FORCE
PICTURES and ME JANE PRODUCTIONS Present (followed by the remainder of the existing
credit block requirements).
Dated: - - - - - -
Jane Badler, Authorized Signatory
DAISY WINTERS THE FILM, LLC ("Licensor")
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Dated: 1-)/-- / :f
Eri~ '
HANNOVER HOUSE, INC./ MEDALLION RELEASING, INC.
("Sales Agency")
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EXHIBIT “2”
EXHIBIT “3”