MARC Y.

LAZO, SBN: 215998

1
K&L LAW GROUP, P.C.
2 2105 Foothill Blvd., Suite B121
La Verne, CA 91750
3 Phone No.: (949) 216-4000
Fax No.: (800) 596-0370
4
5 Attorneys for Plaintiffs
6
SUPERIOR COURT OF THE STATE OF CALIFORNIA
7
8 COUNTY OF ORANGE

9
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
22
corporation; HANOVERSHOPS, business )
entity unknown; BIG HAT ENTERPRISES, ) 8. UNJUST ENRICHMENT
23
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
28

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COMPLAINT FOR DAMAGES

 1 Plaintiffs SHUTTLEWOOD INVESTMENTS PTY, LTD. and DAISY WINTERS THE FILM,
2 LLC (herein after collectively referred to as “Plaintiffs”) allege against Defendants HANNOVER
3 HOUSE, INC., a Wyoming corporation; FILMWORKS CREATIVE SERVICES, LLC, a California
4 limited liability company a/k/a MEDALLION RELEASING, INC.; BOOKWORKS, INC., an Arkansas
5
corporation; TRUMAN PRESS, INC., an Arkansas corporation; PLAZA ENTERTAINMENT, INC., an
6
Arkansas corporation; MAYFIELD PROPERTIES, LLC, an Arkansas limited liability company;
7
HEMDALE COMMUNICATIONS, INC., a Florida corporation; PARKINSON RICE
8
ORGANIZATION FILM, INC., a California corporation; HANOVERSHOPS, business entity
9
unknown; BIG HAT ENTERPRISES, INC., an Arkansas corporation; ERIC PARKINSON, an
10
individual; DON FREDRIK SHEFTE, a/k/a FRED SHEFTE, an individual (herein after collectively
11
referred to as “Defendants”), as follows:
12
PARTIES
13
1. Plaintiff SHUTTLEWOOD INVESTMENT’S, LTD. (“Shuttlewood”) is, and at all times
14
15 mentioned herein was, a Bahamian international business company.

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

19 intangible rights to the Picture, including all intellectual property.

20 3. Plaintiffs are informed and believe that Defendant HANNOVER HOUSE, INC.
21 (“Hannover”) is, and at all times mentioned herein was, a Wyoming corporation.
22 4. Plaintiffs are informed and believe that Defendant FILMWORKS CREATIVE
23 SERVICES, LLC is, and at all times mentioned herein was, a California limited liability company doing
24 business as MEDALLION RELEASING INC. (“Medallion”).
25
5. Plaintiffs are informed and believe that Defendant TRUMAN PRESS, INC. is, and at all
26
times mentioned herein was, an Arkansas corporation (“Truman”).
27
6. Plaintiffs are informed and believe that Defendant PLAZA ENTERTAINMENT, INC.
28
is, and at all times mentioned herein was, an Arkansas corporation (“Plaza”).

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COMPLAINT FOR DAMAGES

 1 7. Plaintiffs are informed and believe that Defendant MAYFIELD PROPERTIES, LLC is,
2 and at all times mentioned herein was, an Arkansas limited liability company (“Mayfield”).
3 8. Plaintiffs are informed and believe that Defendant HEMDALE COMMUNICATIONS,
4 INC. is, and at all times mentioned herein was, a Florida corporation (“Hemdale”).
5
9. Plaintiffs are informed and believe that Defendant PARKINSON RICE
6
ORGANIZATION FILM, INC. is, and at all times mentioned herein was, a California corporation
7
(“Parkinson Rice”).
8
10. Plaintiffs are informed and believe that Defendant HANOVERSHOPS is, and at all times
9
mentioned herein was, an unknown business entity, jurisdiction unknown (“Hanovershops”).
10
11. Plaintiffs are informed and believe that Defendant BIG HAT ENTERPRISES, INC. is,
11
and at all times mentioned herein was, an Arkansas corporation (“Big Hat”).
12
12. Plaintiffs are informed and believe that Defendant ERIC PARKINSON (“Parkinson”) is,
13
and at all times mentioned herein was, an individual residing in the State of Arkansas.
14
15 13. Plaintiffs are informed and believe that Defendant Parkinson is, and at all times

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-
25
speaking provinces, including but not limited to Canada.
26
17. Plaintiffs are informed and believe that at all times mentioned herein, there was such a
27
unity of interests between each of the individual and corporate Defendants named herein, that the
28
separate corporate entities should be disregarded, and the corporate entities of the Defendants should be

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COMPLAINT FOR DAMAGES

 1 treated merely as the alter-ego of the respective individual Defendants. Adherence to the fiction of
2 separate existence of the corporate and entity Defendants as an entity distinct from the respective
3 individual Defendants would permit an abuse of the corporate provision, would sanction fraud and
4 injustice in that the individual Defendants could evade personal liability for their wrongdoing alleged in
5
this complaint and could and would continue in the corporate name to perpetuate the fraudulent plan,
6
scheme and device alleged in this complaint.
7
18. The true names and capacities, whether an individual, corporate, associate or otherwise,
8
of the Defendants named herein as Does 1 through 20, inclusive, are currently unknown to Plaintiffs
9
who therefore sue said Defendants by such fictitious names. When their true names and capacities are
10
ascertained, Plaintiff will amend this complaint by inserting their true names and capacities. Plaintiffs
11
are informed, believe, and thereon allege that each of the fictitiously named defendants is responsible in
12
some manner for the occurrences herein alleged, and that Plaintiffs’ damages as herein alleged were
13
proximately caused by those defendants. Each reference in this complaint to “defendant,” “defendants,”
14
15 or a specifically named defendant refers also to all defendants sued under fictitious names.

16 JURISDICTION AND VENUE

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

19 those given by statute to other trial courts.

20 20. The Court also has personal jurisdiction over all Defendants set forth herein based on
21 Plaintiffs’ information and good faith belief that Defendants are persons, corporations, or associations
22 that either are citizens of the State of California, have sufficient minimum contacts in the State of
23 California for the reasons, among others, that (1) Defendants transact business in California by marketing
24 to potential business clients in California; and (2) Defendants have entered into contracts within the State
25
of California with distributors and licensees, or otherwise purposefully availed themselves for the
26
benefits and protections offered by the State of California by engaging in systematic and continuous
27
activities in dealing with filmmakers and producers similarly situated with Plaintiffs O’Brien and Sahara.
28

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COMPLAINT FOR DAMAGES

 1 21. Venue is also proper in this Superior Court, pursuant to Code of Civil Procedure §§ 394,
2 495, 395.5, because a substantial part of the events giving rise to Plaintiffs’ claims occurred in this
3 county, including the negotiations and contract into which Plaintiffs entered with Defendants, as well as
4 the contracts into which Defendants have entered into with other filmmakers and producers. (§ 395,
5
subd. (a).)
6
FACTUAL ALLEGATIONS
7
22. On or about July 5, 2017, Daisy, on the one hand, and Hannover and Medallion, on the
8
other hand, entered into that certain Memorandum of Agreement (the “Agreement”) wherein Hannover
9
and Medallion were to represent the Picture for a United States and Canada (the “Territory”) theatrical
10
launch only and engagement prior to releasing the Picture on physical home devices for resale. A true
11
and correct copy of the Agreement is attached hereto as Exhibit “1” and made a part hereof.
12
23. Under the terms of the Agreement, Hannover was to act as the exclusive and direct
13
releasing entity in the Territory (as defined in the Agreement) and to release the Picture in accordance
14
15 with the detailed theatrical release marketing plan and budget attached as Exhibits “A”–“D” to the

16 Agreement (the “Theatrical Marketing Plan”). See, Exhibit “1.”

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.
25
26. In connection therewith, Shuttlewood, as lender, and Hannover and Medallion, as
26
borrower, entered into that certain Promissory Note dated July 11, 2017 and attached as Exhibit “E” to
27
the Agreement in the principal amount of $250,000.00 for repayment of the sums advanced plus interest
28
and fees upon sufficient collection of Gross Receipts or the maturity date of July 14, 2018, whichever

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COMPLAINT FOR DAMAGES

 1 occurs first (“Note 1”). A true and correct copy of Note 1 is attached hereto as Exhibit “2” and made a
2 part hereof.
3 27. As a result, Shuttlewood did advance the expenditure for prints and ads by delivery to
4 Big Hat for Hannover and Medallion of the Advanced Costs as follows: $150,000.00 within (5) business
5
days of execution of the Agreement and Note 1, and an additional $100,000.00 on or about September
6
15, 2017, promptly upon request by Hannover and Medallion as provided in Note 1 and the Agreement.
7
28. Shortly thereafter, Parkinson on behalf of Hannover and Medallion (and the remaining
8
Defendants) advised an additional $80,000.00 would be required to advance costs for advertising with
9
MeJane Productions (the “Additional Advanced Costs”).
10
29. In connection therewith, Shuttlewood, as lender, and Hannover and Medallion, as
11
borrower, entered into another Promissory Note dated October 17, 2017 and attached as Exhibit “F” to
12
the Agreement in the principal amount of $80,000.00 for repayment of the sums advanced plus interest
13
and fees upon collection of sufficient Gross Receipts (as defined) or the maturity date of October 15,
14
15 2018, whichever occurs first (“Note 2,” and together with Note 1, the “Notes”)). A true and correct copy

16 of Note 2 is attached hereto as Exhibit “3” and made a part hereof.

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
25
distribution, release or advertising effort was made on behalf of Plaintiffs as contemplated by the
26
Agreement.
27
28

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COMPLAINT FOR DAMAGES

 1 33. On or about July 14, 2017, Hannover and Medallion defaulted under the terms of Note 1
2 by failing to pay amounts due and owing as of the maturity date, and failing to perform their bargained-
3 for obligations.
4 34. On or about October 15, 2018, Hannover and Medallion defaulted under the terms of
5
Note 2 by failing to pay amounts due and owing as of the maturity date, and failing to perform their
6
bargained-for obligations.
7
35. By letter dated October 2, 2018, Shuttlewood demanded payment under the Notes, to no
8
avail.
9
36. As of the date of the filing of this Complaint, no payment has been received as required
10
by the Notes and despite repeated requests for an accounting, Defendants have failed to provide same.
11
37. On or about March 6, 2019, Plaintiff learned that Defendants approached multiple
12
international film buyers and marketed the Picture to same in further contravention of the Agreement’s
13
mandate to limit marketing and distribution efforts to the Territory only.
14
FIRST CAUSE OF ACTION
15
BREACH OF CONTRACT – COUNT I
16
17 (By Plaintiff Daisy Against Defendants Hannover, Medallion and Does 1-10, inclusive)

18 38. Plaintiff realleges and incorporates by reference all of the allegations contained in the

19 preceding paragraphs of the Complaint as though fully set forth herein.

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

24 which are set forth in Exhibit “1”.

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:

28 a. having failed to distribute, advertise or market the Picture pursuant to the

Agreement;

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COMPLAINT FOR DAMAGES

 1 b. having failed to provide receipts for theatrical releases, if any;
2 c. having failed to otherwise perform their duties in the Agreement in any reasonable
3 manner; and
4 d. marketing the Picture internationally when the Agreement limits the Territory
5 contemplated for theatrical engagement to the United States and Canada only
6 42. Defendants continue to breach the Agreement in failing to perform their obligations,
7 and refusing to reimburse Plaintiffs the Advanced Costs.
8 43. As a direct, legal and proximate result of Defendants’ breach of the Agreement, Plaintiff
9 has been harmed and will continue to be damaged, in an amount to be determined at trial, through
10 Defendants’ failure to reimburse the Advanced Costs and the Additional Advanced Costs, and by:
11 a. being deprived of additional lost sales and revenues that could have been earned from
12 the Picture;
13 b. being deprived of the opportunity costs incurred in having been unable to market and
14 distribute the Picture through other sources; and
15 c. being deprived of its agreed to profits pursuant to the terms of the Agreement.
16 44. It has been necessary for Plaintiff to retain the services of legal counsel to pursue this
17 matter and Plaintiff is entitled, pursuant to section 16 of the Agreement, to an award of attorney's fees,
18 interest and costs incurred pursuing the action.
19
SECOND CAUSE OF ACTION
20
BREACH OF IMPLIED COVENANT OF
21
GOOD FAITH AND FAIR DEALING - COUNT I
22
(By Plaintiff Daisy Against Defendants Hannover, Medallion and Does 1-10, inclusive)
23
45. Plaintiff refers to each of the foregoing paragraphs in their entirety, and hereby
24
incorporate them by reference as though fully set forth herein.
25
46. On or about July 5, 2017, Plaintiff Daisy and Defendants Hannover and Medallion
26
entered into the valid written Agreement more fully identified and described in the above.
27
28

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COMPLAINT FOR DAMAGES

 1 47. Implied in every contract, including this Agreement, is the covenant of good faith and
2 fair dealing by which the contracting parties are bound. Comunale v. Traders & General Ins. Co.,
3 (1958) 50 Cal. 2d 654, 658.
4 48. Plaintiff has performed all of its obligations required to be performed by it in accordance
5 with the terms of the Agreement.
6 49. By failing and refusing to comply with the terms of the Agreement as agreed,
7 Defendants Hannover and Medallion unfairly interfered with Daisy’s right to receive the benefits of
8 the Agreement.
9 50. As a direct, legal and proximate result of said breach of contractual duties and
10 obligations due and owing to Plaintiff, Plaintiff sustained loss, injury and financial damages within the
11 jurisdictional limits of this Court and in an amount according to proof at trial.
12
THIRD CAUSE OF ACTION
13
BREACH OF CONTRACT – COUNT II
14
(By Plaintiff Shuttlewood Against Defendants Hannover, Medallion and Does 5-15, inclusive)
15
51. Plaintiff realleges and incorporates by reference all of the allegations contained in the
16
preceding paragraphs of the Complaint as though fully set forth herein.
17
18 52. On or about July 11, 2017, Shuttlewood, as lender, and Hannover and Medallion, as

19 borrower, entered into Note 1.

20 53. On or about October 17, 2017, Shuttlewood, as lender, and Hannover and Medallion, as

21 borrower, entered into Note 2.

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.
28

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COMPLAINT FOR DAMAGES

 1 57. As a direct, legal and proximate result of Defendants’ breach of the Notes, Plaintiff has
2 suffered damages in an amount to be proven at trial.
3 58. It has been necessary for Plaintiff to retain the services of legal counsel to pursue this
4 matter and Plaintiff is entitled, pursuant to section 8 of Note 2, to an award of attorney's fees, interest
5
and costs incurred pursuing the action.
6
7 FOURTH CAUSE OF ACTION

8 BREACH OF IMPLIED COVENANT OF

9 GOOD FAITH AND FAIR DEALING - COUNT II

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
17
with the terms of the Notes.
18
62. By failing and refusing to comply with the terms of the Notes as agreed, Defendants
19
Hannover and Medallion unfairly interfered with Shuttlewood’s right to receive the benefits of the Notes.
20
63. As a direct, legal and proximate result of said breach of contractual duties and obligations
21
due and owing to Plaintiff, Plaintiff sustained loss, injury and financial damages within the jurisdictional
22
limits of this Court and in an amount according to proof at trial.
23
24 FIFTH CAUSE OF ACTION
25 INTENTIONAL MISREPRESENTATION
26 (By All Plaintiffs Against All Defendants and Does 1-20, inclusive)
27
64. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
28
incorporates them by reference as though fully set forth herein.

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COMPLAINT FOR DAMAGES

 1 65. Defendants made clear and unambiguous representations, orally and in writing, through
2 phone conversations and email correspondences, committing to distribute, advertise, and market the
3 Picture within the Territory only. Particularly, defendants Parkinson and Shefte through phone calls and
4 emails expressly related the same to Plaintiffs’ representatives immediately prior to Plaintiffs’ loans
5
called for under the Notes.
6
66. When Defendants made the aforementioned representations, Defendants knew the
7
representations were in fact false and made without any reasonable basis for believing them to be true in
8
that they had no intention of performing under the Agreement, returning the monies loaned under the
9
Notes, or limiting any marketing effort to the Territory, and instead plotted to misappropriate the monies
10
and put them to their own use and prevent the marketing of the Picture outside the Territory, in
11
furtherance of only their pecuniary interests and entrepreneurial efforts, from the outset.
12
67. Defendants intended that Plaintiffs rely on these representations, and further deceived and
13
induced Plaintiffs to forego opportunities with other potential distributors and licensees, thereby
14
15 sabotaging any chance that the Picture had of succeeding during a critically important marketing time

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
25
would not fulfill their duties and promises to distribute, advertise, and market the picture, or known that
26
Defendants would market the Picture internationally and/or had no intention of repaying the monies
27
loaned under the Notes, and instead had plotted to misappropriate them for their own use all along.
28
70. Defendants’ misrepresentations were a substantial factor in causing Plaintiffs’ harm.

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COMPLAINT FOR DAMAGES

 1 71. Plaintiffs are informed and believe that the aforementioned conduct of Defendants, and
2 each of them, was carried out as part of a deliberate and systematic scheme of wrongful misappropriation,
3 conversion and misuse of Daisy’s ownership and rights to the Picture and Shuttlewood’s funds designed
4 to obstruct and otherwise interfere with the successful release of the Picture, as well as part of a plan
5
from the outset to never follow through on the obligations regarding marketing and distribution or the
6
obligations regarding repayment. Such conduct was oppressive, fraudulent, and malicious, and subjected
7
Plaintiff to cruel and unjust hardship in a willful and conscious disregard of its rights, warranting
8
exemplary and punitive damages pursuant to Civil Code Section 3294, for the reasons set forth herein
9
and for at least the following reasons:
10
a. It was done with the purpose and intent of subjecting Plaintiffs to the risks of causing
11
sums to be paid to Defendants with insufficient marketing or other bargained-for effort
12
on Plaintiffs’ behalf in return;
13
b. It was done with the purpose and intent of inducing Plaintiffs to enter into agreements it
14
15 would not otherwise have agreed to when Defendants knew they had no intention of

16 fulfilling their obligations as agreed;

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’

19 rights to realize the fruits of its business endeavors;

20 d. It was done with the purpose and intent of converting and/or misappropriating Plaintiffs’
21 monies in furtherance of a willful and conscious disregard of Plaintiffs’ business
22 operations and all reasonably foreseeable damages and losses caused by the failure
23 thereof; and
24 e. It was done with the purpose and intent of preventing the Picture from ever being
25
marketed in any territory again.
26
72. As a direct, legal and proximate result of said breach of contractual duties and obligations
27
due and owing to Plaintiffs, Plaintiffs sustained loss, injury and financial damages within the
28
jurisdictional limits of this Court and in an amount according to proof at trial.

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COMPLAINT FOR DAMAGES

 1 SIXTH CAUSE OF ACTION
2 MISAPPROPRIATION OF FUNDS
3 (By All Plaintiffs Against All Defendants and Does 1-20, inclusive)
4 73. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
5 incorporates them by reference as though fully set forth herein.
6 74. Plaintiff Daisy is and at all times herein mentioned was, the rightful owner of all
7 misappropriated intellectual property rights and tangible and intangible assets of the Picture as described
8 herein, which were unlawfully acquired by Defendants without the consent of Plaintiff in the manner
9
alleged herein. Plaintiff was also the rightful owner of all monies loaned under the Notes, which have
10
not only gone unaccounted for, but were misappropriated in the manner set forth herein, having been
11
used for Defendants’ own endeavors in total breach of the bargained for agreements and Defendants’
12
repeated promises to Plaintiffs.
13
75. Plaintiffs are informed and believe that the aforementioned conduct of Defendants, and
14
each of them, was carried out as part of a deliberate and systematic scheme of wrongful
15
misappropriation, conversion and misuse of Daisy’s ownership and rights to the Picture designed to
16
obstruct and otherwise interfere with the successful release of Daisy’s Picture, as well as part of a plan
17
from the outset to never follow through on the obligations regarding marketing and distribution and
18
further, to prevent the Picture from being marketed in any territory again. Such conduct was oppressive,
19
fraudulent, and malicious, and subjected Plaintiff to cruel and unjust hardship in a willful and conscious
20
disregard of its rights, warranting exemplary and punitive damages pursuant to Civil Code Section
21
3294, for the reasons set forth herein and for at least the following reasons:
22
a. It was done with the purpose and intent of subjecting Plaintiffs to the risks of causing
23
sums to be paid to Defendants with insufficient marketing or other bargained-for effort
24
on Plaintiff’s behalf in return;
25
b. It was done with the purpose and intent of inducing Plaintiffs to enter into an agreement
26
it would not otherwise have agreed to when defendants knew they had no intention of
27
fulfilling their obligations as agreed;
28

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COMPLAINT FOR DAMAGES

 1 c. It was done with the purposeful and intentional design of putting Defendants' own
2 personal interests ahead of Plaintiffs’ rights and interests, at the expense of Plaintiffs’
3 rights to realize the fruits of its business endeavors;
4 d. It was done with the purpose and intent of converting and/or misappropriating Plaintiffs’
5 ownership rights in the Picture in furtherance of a willful and conscious disregard of
6 Plaintiffs’ business operations, the marketing and exploitation of the Picture, and all
7 reasonably foreseeable damages and losses caused by the failure thereof; and
8
e. It was done with the purpose and intent of preventing the Picture from ever being
9
marketed in any territory again.
10
76. Defendants intentionally, knowingly and substantially interfered with Plaintiffs’
11
respective rights and assets by engaging in the misappropriation and tortious conduct described herein.
12
77. As a direct, legal, and proximate result of the aforementioned conduct, Defendants were
13
unjustly enriched and Plaintiffs have suffered, and will continue to suffer, substantial general and special
14
damages within the jurisdictional limits of this Court and in an amount according to proof at trial
15
16 SEVENTH CAUSE OF ACTION
17 CONVERSION
18 (By Plaintiff Daisy Against All Defendants and Does 1-20, inclusive)
19 78. Plaintiff refers to each of the foregoing paragraphs in their entirety, and hereby
20 incorporates them by reference as though fully set forth herein.
21 79. Plaintiff Daisy is and at all times herein mentioned was, the rightful owner of all
22
misappropriated intellectual property rights and assets in the Picture as described herein, which were
23
unlawfully converted by Defendants without the consent of Plaintiff in the manner alleged herein.
24
80. Plaintiff is informed and believe that the aforementioned conduct of Defendants, and
25
each of them, was carried out as part of a deliberate and systematic scheme of wrongful
26
misappropriation, conversion and misuse of Daisy’s ownership and rights to the Picture designed to
27
obstruct and otherwise interfere with the successful release of Daisy’s Picture, as well as part of a plan
28
from the outset to never follow through on the obligations regarding marketing and distribution and

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COMPLAINT FOR DAMAGES

 1 further, to prevent the Picture from being marketed in any territory again. Such conduct was oppressive,
2 fraudulent, and malicious, and subjected Plaintiff to cruel and unjust hardship in a willful and conscious
3 disregard of its rights, warranting exemplary and punitive damages pursuant to Civil Code Section
4 3294, for the reasons set forth herein and for at least the following reasons:
5 a. It was done with the purpose and intent of subjecting Plaintiff to the risks of causing
6 sums to be paid to Defendants with insufficient marketing or other bargained-for effort
7 on Plaintiff’s behalf in return;
8 b. It was done with the purpose and intent of inducing Plaintiff to enter into an agreement
9 it would not otherwise have agreed to when defendants knew they had no intention of
10 fulfilling their obligations as agreed;
11 c. It was done with the purposeful and intentional design of putting Defendants' own
12 personal interests ahead of Plaintiff's rights and interests, at the expense of Plaintiff's
13 rights to realize the fruits of its business endeavors;
14 d. It was done with the purpose and intent of converting and/or misappropriating Plaintiff's
15 ownership rights in the Picture in furtherance of a willful and conscious disregard of
16
Plaintiff's business operations, the marketing and exploitation of the Picture, and all
17
reasonably foreseeable damages and losses caused by the failure thereof; and
18
e. It was done with the purpose and intent of preventing the Picture from ever being
19
marketed in any territory again.
20
81. Defendants intentionally, knowingly and substantially interfered with Plaintiff’s rights
21
and assets by engaging in the misappropriation and tortious conduct described herein.
22
82. As a direct, legal, and proximate result of the aforementioned conduct, Plaintiff has
23
suffered, and will continue to suffer, substantial general and special damages within the jurisdictional
24
limits of this Court and in an amount according to proof at trial.
25
26 EIGHTH CAUSE OF ACTION
27
UNJUST ENRICHMENT
28
(By All Plaintiffs Against All Defendants and Does 1-20, inclusive)

-15-

COMPLAINT FOR DAMAGES

 1 83. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby
2 incorporate them by reference as though fully set forth herein.
3 84. Pursuant to the Agreement, Plaintiffs are entitled to the balance of revenues, after
4 payment of the Sales Agency fees and costs (as defined in the Agreement), that Defendants earned or
5
received or were entitled to receive at any time, either directly or indirectly, related to the Picture's
6
theatrical release both inside and outside the Territory, as well as repayment of the Advanced Costs and
7
the Additional Advanced Costs the subject of the Notes.
8
85. Plaintiffs are informed and believe and thereon allege that Defendants earned and
9
received substantial amount of revenue that is either directly or indirectly related to the Picture's
10
theatrical release.
11
86. Defendants have been unjustly enriched at the expense of Plaintiffs by withholding and
12
retaining the revenues or any other amounts received in the form of sales and royalties paid by
13
distributors and licensees with whom Defendants have transacted business in relation to the Picture's
14
15 theatrical release and distribution without proper distribution and repayment of sums owed.

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

19 benefits received expressly through the Agreement and the Notes.

20 88. Defendants must be ordered to disgorge the gains which they have unjustly obtained
21 and/or a constructive trust should be imposed for the benefit of the Plaintiffs in such amount as will
22 preserve the rights and interests of the Plaintiffs per the Agreement.
23
NINTH CAUSE OF ACTION
24
UNFAIR BUSINESS PRACTICES (BUSINESS & Prof. code §17200 ET. SEQ.)
25
26 (By All Plaintiffs Against All Defendants and Does 1-20, inclusive)

27 89. Plaintiffs refer to each of the foregoing paragraphs in their entirety, and hereby

28 incorporate them by reference as though fully set forth herein.

-16-

COMPLAINT FOR DAMAGES

 1 90. Plaintiffs are informed and believe, and thereon allege, that Defendants' wrongful,
2 unconscionable and deceptive conduct constituted unlawful, unfair or fraudulent business acts or
3 practices proscribed by California's Unfair Business Practices Act, or Business and Professions Code
4 section 17200, et seq, including but not limited to the deprivation of money and property.
5
91. Defendants’ unlawful, unfair, and fraudulent business acts or practices include, but are
6
not limited to, failure to market, advertise, license, and distribute the Picture, as agreed, directing
7
Plaintiffs to cease business relations with other parties; purposefully and knowingly, or at minimum
8
recklessly preventing Plaintiffs from having access to other distributors and business opportunities;
9
retaining the fees advanced by Plaintiffs under false pretenses, and purposefully and knowingly misusing
10
and abusing the professional and legal duties and obligations owed to Plaintiffs during the course of their
11
professional relationship, or at a minimum, recklessly or negligently breaching those duties and
12
obligations, by making the aforementioned material misrepresentations to Plaintiffs.
13
92. As a direct and proximate result of Defendants' wrongful acts, Plaintiffs have suffered
14
15 and will continue to suffer substantial pecuniary losses and irreparable injury.

16 93. Defendants' willful and conscious disregard for Plaintiffs' rights and the harm caused to

17 Plaintiffs based on Defendants' egregious misrepresentations, concealment, and breaches of contract

18 created an unjust hardship for Plaintiffs.

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.
25
96. These acts constitute unfair competition and unfair business practices under California
26
Business and Professions Code §17200 et seq., the analogous statutes of other states, and California
27
common law.
28

-17-

COMPLAINT FOR DAMAGES

 1 97. It has been necessary for Plaintiffs to retain the services of legal counsel to pursue this
2 matter and Plaintiffs are entitled, pursuant to Code of Civil Procedure §1021.5, to an award of attorney's
3 fees, interest and costs incurred pursuing the action.
4 98. Plaintiffs are also entitled to recover any of Defendants' profits derived from any
5
distribution and licensing of the Picture.
6
7 TENTH CAUSE OF ACTION

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

11 incorporate them by reference as though fully set forth herein.

12 100. Pursuant to the written and/or oral agreements entered into between Plaintiffs and
13 Defendants, Defendants agreed to provide to Plaintiffs documented evidence of all overdue theatrical
14 receipts to be audited and reconciled in order to calculate payment to Plaintiffs of the balance of
15 revenues, after payment of the agency fees and costs, from distribution of the Picture, both inside and
16 outside the Territory.
17
101. By virtue of the relationship between the respective parties as alleged herein, Plaintiffs
18
are entitled to a full and complete accounting from Defendants including, but not limited to, all revenue
19
and other amounts Defendant have earned or received or are entitled to receive at any time, either directly
20
or indirectly, from or as a result of the Picture's theatrical release, both inside and outside the Territory.
21
102. As a result of Defendants' numerous fraudulent acts described herein, Plaintiffs have
22
suffered damages and Defendants have received money, a portion of which is due to Plaintiffs from
23
Defendants per the Agreement.
24
103. Plaintiffs have demanded an accounting of the aforementioned transactions from
25
26 Defendants and payments but Defendants have failed and refused, and continue to fail and refuse, to

27 render such an accounting and to pay such sum.

28

-18-

COMPLAINT FOR DAMAGES

 1 104. The total amount of money due from Defendants to Plaintiffs is unknown to Plaintiffs
2 and cannot be ascertained without an accounting of the receipts and disbursements of the aforementioned
3 transactions.
4 105. Accordingly, Plaintiffs demand an accounting from Defendants in order to determine the
5
amount of money due per the Agreement.
6
7
PRAYER FOR RELIEF
8
WHEREFORE, Plaintiffs pray for judgment against Defendants as follows:
9
ON THE FIRST AND THIRD CAUSES OF ACTION:
10
1. For Compensatory and Incidental Damages;
11
2. For General and Special Damages; and
12
3. For attorney’s fees and costs incurred herein.
13
ON THE FIFTH THROUGH SEVENTH CAUSES OF ACTION:
14
1. For exemplary and punitive damages in amounts that are yet to be ascertained;
15
2. For fees and costs of suit incurred herein, including but not limited to, under California Civil
16
Code Section 3426.4.
17
ON THE EIGHTH CAUSE OF ACTION:
18
3. Disgorgement of gains unjustly obtained and/or a constructive trust imposed for the benefit
19
of Plaintiffs
20
ON THE NINTH CAUSE OF ACTION
21
1. For an order of restitution, requiring Defendants to disgorge any and all funds they received
22
or derived, directly or indirectly, as a result of their unlawful, unfair or fraudulent business
23
acts and practices;
24
2. For a permanent injunction enjoining defendants from engaging in the conduct alleged; and
25
3. For recovery of costs and expenses of suit as allowed by law
26
27 ON THE TENTH CAUSE OF ACTION:
28 1. For an accounting from Defendants to Plaintiffs; and

-19-

COMPLAINT FOR DAMAGES

 1 2. For the amount found to be due from Defendants to Plaintiffs as a result of the accounting.
2
3 ON ALL CAUSES OF ACTION:
4 1. For general and special damages according to proof; including but not limited to all out of
5 pocket losses incurred by Plaintiff;
6 2. For recovery of costs and expenses of suit as allowed by law;
7 3. For prejudgment interest on lost money and property from the time that it was wrongfully
8 taken from Plaintiffs;
9 4. For such other and further relief as the Court deems just and proper.
10
11 DEMAND FOR JURY TRIAL
12 Plaintiffs hereby demand a jury trial in this action before the court.
13
14 Dated: March 15, 2019 K&L LAW GROUP, P.C.
15
16
By: ________________________________
17
MARC Y. LAZO
18 Attorneys for Plaintiffs

19
20
21
22
23
24
25
26
27
28

-20-

COMPLAINT FOR DAMAGES

EXHIBIT “1”
 "DAISY WINTERS"
USA & CANADA Theatrical, Home Video, V.O.D. & Television
Sales Agency / Distribution Agreement

MEMORANDUM OF AGREEMENT

This Memorandum of Agreement ("Agreement") is set forth as of July 5, 2017 by and

between Hannover House, Inc. and Medallion Releasing, Inc. (referred to hereunder
collectively as "HHSE': or "Sales Agency" or "Distributor") with Daisy Winters the Film, LLC
(referred to hereunder as "DWF" or "Licensor") for the exclusive theatrical, packaged-home
video and (non-exclusive) video-on-demand distribution rights in the Territory as defined
below for the original, feature film drama "DAISY WINTERS" starring Brooke Shields, Sterling
Jerins, lwan Rheon and Carrie Preston, which was Produced by Beth LaMure, Jane Badler,
Sean E. DeMott and Deborah Moore, and was Written and Directed by Beth LaMure ("the
"Picture"). The following terms set forth in this Memorandum of Agreement shall govern
with the full force and effect of a long-form contract until such time, if ever, that a mutually
agreed upon long-form contract encompassing these terms, and any additionally agreed to
terms, may be drafted and executed.

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.

1
 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

SALES AGENCY: Hannover House, Inc. / Medallion Releasing, Inc.

Attn: Eric Parkinson, C.E.O.
300 N. College Ave. # 311
Fayetteville, AR 72701
Tel: (479) 521-5774 I Direct: 818-481-5277
Email: Eric@HannoverHouse.com

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:
2
 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
3
 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").

7. RIGHTS LICENSED: Except as may be specified hereunder, Licensor is providing to Sales

Agency the sole and exclusive right to license, sub-license, distribute, advertise, market
and otherwise exploit all media rights, now known or hereafter devised, including
without limitation theatrical, non-theatrical and physical home media in all formats,
including DVD, Blu-Ray and UltraHD videograms, as well as all forms of video-on-demand
and television broadcast and distribution through television and cable platforms. In
granting Sales Agency these sales and representation rights, Licensor grants all customary
and required rights to enable Sales Agency to perform its duties hereunder, including (if
applicable) a license in the copyrights, trademarks and all other intellectual property
rights necessary to exploit the Picture, in all applicable media, for the term from the
execution hereof in the Territory, including, but not limited to, all customary and industry
standard distribution rights necessary for the release, promotion, advertising, exhibition
and other exploitation of the Picture, including, merchandising and all other ancillary
rights relating to or arising out of the Picture. Sales Agency shall be authorized to utilize
the corporate logo of Sales Agency, as well as to include text information identifying Sales
Agency as the authorized Distributor in the Territory on all packaging and advertising for
the Picture in the Territory. The rights licensed do not include sale or merchandising of
tangible items based on or related to the Picture. The rights hereunder shall be subject
to third party restrictions and approvals with respect to use of such third party's name,
voice and likeness in connection with the marketing of the Picture, as such restrictions
and approvals are notified to Sales Agency by Licensor.
4
 8. DELIVERY: Licensor acknowledges that time is of the essence with respect to Delivery
and the intention of both Licensor and Sales Agency to expand the release of the Picture
to theatres on or about October 13, 2017, and to the home video market on or about 90-
days thereafter. Accordingly, Licensor shall use reasonable good faith efforts to affect
Final Delivery of the Picture to Sales Agency on or before July 24, 2017. Delivery of the
Picture shall consist of all customary master elements and documents to enable Sales
Agency to perform its duties under this Agreement, including but not limited to:

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,

c). Documentation as set forth in paragraph 10 (a), below, evidencing Licensor's

authority to enter into this Agreement, including, but not limited to customary "chain-of-
title" documentation, music rights and guild ob ligations, as well as an English subtitles
dialogue track.

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%).

5
 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.

6
 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.

13. WARRANTIES AND REPRESENTATIONS:

(a) Licensor warrants and represents to Sales Agency as follows:
(i) that it has full, complete and clear title to the Picture, free and clear of any liens,
mortgages of copyrights or other encumbrances and that it owns and has the complete
authority and all necessary consents to license the Distribution Rights to Sales Agency, to
make Final Delivery of the Picture and to perform in accordance with this Agreement;
(ii) that it currently has or, at the time of Final Delivery of the Picture, will have all right,
license, music, usage, copyright, trademark, intellectual property and other clearances
with regard to the Picture;
(iii) that the production services company for the Picture is a SAG signatory and the Picture
was made in compliance with all SAG and other applicable union rules and collective
bargaining agreements;
(iv) that Licensor is in compliance with all applicable creative, production, actor and other
agreements which bind Licensor or the Picture; and
(v) that there are no other agreements or restrictions that would or will prevent the
Distributor from exploiting the Distributions Rights in the manner provided for in this
Agreement and otherwise in accordance with customa ry practice and industry standards.

(b) Sales Agency warrants and represents to licensor:

(1) Sales Agency and its signatory has fu ll and complete authority, power and consent to
execute, deliver, enter into and perform under this agreement, without the necessity for
giving further or additional notice to any party or for seeking or obtaining any fu rther or
additional consents or approvals, all of which have been atta ined.
(2) By entering into and agreeing to perform under th is Agreement, Sales Agency is not in
violation of and will remain in compliance with any agreements by which Sa les Agency is
bound, including those running in favor of banks, lenders or parties making advances
with regard to this Agreement or distribution of the film.

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.

7
 (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).

SET FORTH ON THE ABOVE DATE, BY AND BETWEEN:

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”