Relativity Motion for Arbitration

8/6/2019 Relativity Motion for Arbitration

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Defendants.

1 CAROL A. GENIS~ ESQ.FRANCIS J , B 1G GIN S, ESQ .2 AaRAM 1 . MOORE~ESQ.K&L GATES, LLP3 Three First National Plaza70 Wes t Madison S treet, S uite 31 004 Chicago, Illinois 60602-4207Tele'phone: (312) 372-11215 Facsimile: (312) 821-8175

6 WEISS &HUNT 'THOMAS J. W EISS , S tate B ar N o, 631677 tweiss@weisslawla,com 'HYRl . I1V1 K . HUNT, State Bar No, 222110,8 hhunt@weisslawia,com1925 Century Park East, Suite 21409 Los Angeles, Califomia 90067Tele~hone: (310) 788-071010 Facsimile: (310) 788-0735

11 A ttorneys for Defendant RELATIVITYMEDlA,LLC

M A Y 1 2 2 0 1 ' 1

SU PER IOR COURT OF CALIFORNIACOUNTY OF LOS ANGELES - CENTRAL

l C ase N o. Be 459 890) (Case Assigned to the Honorable Alan S.Rosenfield. D epartm ent 31 )~ NOTICE OF MOT10N AND MOTION1TO COMPEL ARBITRATION;fv1EMORANDU M OF POIN TS ANDA UTHOR ITIE S ; DEC LAR A TlON OF,RYAN KAVANAUGH; .

1 OECLARA TION OF THOMAS J.\VEISS------------- [FILED CONCURRENTLY W ITHNOTICE OF DEMURRER ANDDEMURRER TO COtvIPLAINT; ,MEMORANDUM OF POINTS ANDAUTHORITIES]

THE WE IN STE IN CQMPANY LLC ,16 Plaintiff~1718 v,RELATIVITY rvrEDIA, LLC and bOES 119 through 5,2021222324252 6272 8

Hearing Date:Time:Dept:Complaint Filed:

June 9, 2 01 18:30 a.m,31Apr i l 20, 2011

9GIW 3~\:i'dN OTIC E OF M OTION A ND MOTION TO C OM PE L A RB ITR ATIO N; M EM OR AN DU M O F PO ITN TS A ND

AU TH oruT lE S; S U PP OR T IN G D EC LARA TIO NOAS Al1~ d~lS ll~ 86~96ggG1EI 0G!91 !!GG/~!/9G


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TO THE PARTIES AND THEIR ATTORNEYS OF RECORD:PLEASE TAKE NOTICE that on June 9, 2011 , at 8:30 a.m. in Department 31 of

the above-entitled court located at 111 North Hill Street, Los Angeles, California 90012,defendant RELATIVITY MEDIA, LLC (herein "Relativity"), will move and hereby doemove for an order compelling plaintiff THE WEINSTEIN COMPANY LLC (herein"TWC") to submit its claim against Relativity to binding arbitration, and staying thisaction until resolution of the arbitration proceeding.

This motion is made on the ground that TWC and Relativity are parties to awritten agreement that contains an arbitration clause which governs this dispute.Therefore, pursuant to Code of Civil Procedure Section 1281.2, Relativity moves for anorder compelling TWC to submit its claims against Relativity to binding arbitration.

This motion is based upon this notice of motion and motion, the memorandum of1 6 points and authorities, the Declaration of Ryan Kavanaugh, the Declaration of Thomas J171819202122232425262728

Weiss, the papers, records and documents on file in this matter, and on such additionalevidence as may be presented at the hearing on this motion.

Respectfully submitted,K&L GATES, LLPWEISS &HUNT--z?~B y - /?~~ ...... ~-~. ThomasJ. Y l iss

Attorneys f'-rs~;endant RELATIVITYMEDIA, LLC

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIESSUPPORTING DECLARATION2


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This motion is brought as an alternative to Relativity's demurrer filed concurrentlyherewith. Relativity believes that this motion should be granted and that the demurrer wil;

MEMORANDUM OF POINTS AND AUTHORITIES

accordingly be rendered moot. If this motion is denied for 'any reason, the demurrershould be sustained without leave to amend. Groom v. He~lth Net (2000) 82 Cal. App.4th 1189, 1194.1. SUMMARY OF MOTION.

This case arises out of the contracts between Relativity and TWC relating to thedistribution of certain motion pictures produced or planned for production. Thosecontracts provide for arbitration of disputes arising thereunder including the claims inTWC's Complaint for injunctive relief relating to Relativity's planned motion pictureproject "The Crow."

Relativity has already commenced arbitration proceedings against TWC beforeJAMS, pursuant to the contracts. This Court should accordingly order this case tobinding arbitration at JAMS with Relativity's claims and stay these proceedings pendingthe outcome of the arbitration.2. THE ARBITRATION AGREEMENT.

As is pled by TWC in its Complaint, at paragraph 3, Relativity and TWC enteredinto a written contract dated "As of March 25,20091 1 which provided for TWC (if it werenot in breach of its obligations) to have the option to market and distribute "prequels,sequels and remakes" of the film "The Crow," if and when such films are produced byRelativity (the "Crow Agreement").

The gravamen of the Complaint is that TWC alleges that Relativity intends toproduce a remake of "The Crow" and alleges that Relativity does not intend to "performthe contract" with respect to the distribution of that film. Alleging that Relativitysomehow "refused to confirm its obligation under the Contract," TWC seeks by itsComplaint to obtain injunctive relief "precluding defendants from, directly or indirectly,NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES;

SUPPORTING DECLARATION3


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conveying, licensing or transferring in any way, to any person or company other thanTWC, any interest in any distribution rights in or to the Picture, IIand for attorney feesand unspecified "other and further relief as the Court shall order. II

A copy of the Crow Agreement is Exhibit 1 to the accompanying Declaration ofRyan Kavanaugh, submitted separately for provisional filing under seal (California Rulesof Court, Rule 2.551(b) and (cj). Page 9, paragraph 15 of the Crow Agreement containsthe following arbitration clause:

"Any and all controversies, claims or disputes arising out ofor related to this Agreement shall be resolved exclusively inone or more confidential arbitration proceedings inaccordance with the procedures set forth in the NDA."

The breadth of this clause clearly reaches the instant controversy. TWC'sComplaint is indisputably a claim or dispute arising out ofor relating to the CrowAgreement, because it seeks only to enforce TWC's claimed rights under the "writtencontract dated as of March 25,2009." (Complaint, ~ 3.)

The reference in the arbitration clause to "the NDA" refers to a "Confidential NonDisclosure Agreement attached as Exhibit B to the Letter Agreement (the 'NDA')." Page1 ofthe March 25,2009 agreement.' A copy of the NDA is submitted herewith asExhibit 2 to the Declaration of Ryan Kavanaugh, also for provisional filing under seal.The "procedures set forth in the NDAII for arbitration are set forth in paragraph 5.2 of theNDA. That section 5.2 recites, in pertinent part:

"Any controversy, claim, or disputes arising out of or relatedto this Agreement that is not an Injunctive Relief claim shallbe resolved solely and exclusively by final and bindingarbitration initiated and conducted according to theJAMS/Endispute Comprehensive Arbitration Rules and

, The NDA was attached as an addendum to the agreement TWC refers to as the "TermSheet." (Complaint, ~ 3.)NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES

SUPPORTING DECLARATION4


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NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES;SUPPORTING DECLARATION

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1 Procedures in effect as of the date hereof, including the2 Optional Appeal Procedure provided for in such rules (the3 'Arbitration Rules').1!4 When TWC threatened to file this public lawsuit, Relativity cautioned TWC in5 writing that "any and all disputes" under the Crow Agreement must be resolved in6 confidential arbitration. (See Complaint, Ex. B.) In response, TWC wrongly argued that7 it could circumvent the arbitration clause by filing a Complaint for injunctive relief8 seeking to enforce its rights under the Crow Agreement. However, the only claims9 relating to either the Crow Agreement or the NDA which may be resolved in litigation10 rather than arbitration are claims seeking injunctive relieffor breach of the NDA - not the11 Crow Agreement.12 The arbitration clause in the Crow Agreement contains no exception for or13 reference to claims for injunctive relief. To the contrary, it states that "[ajny and all14 controversies; claims or disputes arising out of or related to this Agreement shall be15 resolved exclusively in one or more confidential arbitration proceedings in accordance16 with the procedures set forth in the NDA." There are no exceptions.17 Nothing in the NDA permits any claims relating to the Crow Agreement to be18 litigated, whether the claims are for injunctive relief or not. "Injunctive Relief Claim, I , is19 a defined term in the NDA as : "any claim for injunctive relief arising out of an alleged20 breach of this Agreement (an 'Injunctive Relief Claim')," (Page 39, par. 5.1. emphasis21 added) In turn, "this Agreement" as used in section 5.1 is defined on page 37, the first22 page of the NDA, as the NDA itself. The NDA, as its name suggests, is an agreement to23 preserve the confidentiality of the proprietary information and materials of the parties.24 Preservation of the confidentiality of such information is essential to its character as25 confidential, so that injunctive relief is necessary and appropriate as the primary means of26 preserving the trade secret privileges of the parties (Evidence Code, Section 1060) by27 enforcing an obligation of confidentiality. In re Providian Credit Card Cases (2002) 962 8


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1 Cal.App.4th 292, 304 (held: disclosure is fatal to claim of trade secret or confidential2 proprietary information confidentiality.)3 Here TWC does not seek to enjoin disclosure of confidential information, but4 seeks to enjoin the alleged breach of the Crow Agreement under which it claims the5 distribution rights. Under no circumstances could the Complaint be considered a claim6 "arising out of an alleged breach of [the NDA]" as required to avoid arbitration. (NDA,7 5.1.) Because TWC's claims arise out of and relate to the Crow Agreement, they must b8 resolved in confidential arbitration.9 Finally, as argued in the accompanying demurrer, the injunctive claim here is10 legally untenable under Civil Code Section 3423(e), which makes injunctive relief11 unavailable "to prevent the breach of a contract which could not be specifically12 enforced," except for certain personal services contracts not here relevant. This13 agreement cannot be specifically enforced under Civil Code Section 3390(5) because the14 terms are not "sufficiently certain to make the precise act which is to be done to be15 clearly ascertainable." The acts to be done in distributing a motion picture are far too16 numerous and uncertain to be specifically enforced. Thayer Plymouth Center Inc. v.17 Chrysler Motors Corp. (1967) 255 Cal.App.2d 300, 303-305, 307 (held: auto dealer not18 entitled to specific performance of dealership contract because duties are too numerous19 and unspecific); Voorheis v. Green (1983) 139 Cal.App.3d 989,997-998 (held: injunctive20 order to keep plaintiff employed and participate in company management reversed).21 In sum, TWC cannot avoid the obligation to submit to arbitration by reliance on22 the NDA confidentiality enforcement exception for injunctions.23 3. THE COMPLAINT SHOULD BE ORDERED TO ARBITRATION.24 The California Supreme Court has affirmed the "strong public policy in favor of25 arbitration as a speedy and relatively inexpensive means of dispute resolution,"26 Moncharsh v. Heily & Blase (1992) 3 Ca1.4th 1 , 9-10, citing Ericksen., Arbuthnot,27 McCarthy, Kearney &Walsh, Inc. v. MO Oak Street (1983) 35 Ca1.3d 312, 322. This28

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRA TlONj MEMORANDUM OF POINTS AND AUTHORITIESSUPPORTING DECLARATION6


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1 strong public policy compels arbitration where a party has expressly agreed to submit his2 or her claims to arbitration. AT&T Techs., Inc. v. Communications Workers of Am.3 (1986) 475 U.S. 643, 650. Moreover, "[a]rbitration should be ordered unless it may be4 said with positive assurance that the arbitration clause is not susceptible: of an5 interpretation that covers the asserted dispute." Cione v. Foresters Equity Serv.. Inc.6 (1997) 58 Cal.AppAth 625, 642.7 Section 1281 of the California Code of Civil Procedure provides that written8 arbitration agreements are enforceable and irrevocable subject to the law applicable to9 any other contract:10 "A written agreement to submit to arbitration an existing11 controversy or controversy thereafter arising is valid, enforceable12 and irrevocable, save upon such grounds as exist for the revocation13 of any contact." Code of Civ. Proc. 128114 Thus, on petition of any party to an arbitration agreement, the court shall compel15 arbitration in accordance with that agreement:16 "On petition of a party to an arbitration agreement alleging the17 existence of a written agreement to arbitrate the controversy and18 that a party thereto refuses to arbitrate such controversy, the:court19 shall order the petitioner and the respondent to arbitrate the20 controversy, if it determines that an agreement to arbitrate the21 controversy exists." Id. 1281.2. (Emphasis added.)22 To determine whether arbitration is required, "[tjhe court's role, according to the23 United States Supreme Court, must be strictly limited to a determination of whether the24 party resisting arbitration agreed to arbitrate." O'Malley v. Wilshire O il Co. (1963) 5925 Ca1.2d 482,490-491. If there is any doubt that a party has agreed to arbitrate, "[a] heavy26 presumption weighs the scales in favor of arbitrability." Id. at 491, citing United27 Steelworkers of Am. v. Warrior & Gulf Navigation Co. (1960) 363 U.S. 574.28

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES;SUPPORTING DECLARATION

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1 A . The Agreement Is Valid.2 As the Complaint alleges, and the Declaration of Ryan Kavanaugh affirms, the3 March 29,2009, agreement between Relativity and TWC which contains the relevant4 arbitration provision was executed by the parties and remains in effect.5 B . The Arbitration Clause Covers The Dispute.6 As more fully set forth in Section 2 above, the arbitration provision in the7 Agreement between Relativity and TWC applies to "any controversies, claims, or8 disputes arising out of or relating to this Agreement." Given this broad language, this9 provision clearly applies to the present action.10 C. Relativity Has Not Waived Its Right To Arbitrate By :FilingA11 Demurrer.12 TWC cannot contend that Relativity has waived its right to compel arbitration by13 filing a demurrer concurrently with its motion to compel arbitration. Case law clearly14 holds that Relativity can file a demurrer without waiving its right to arbitrate. Groom v.15 Health Net (2000) 82 Cal. App. 4th 1189, 1194.16 In Groom, the court found that defendant Health Net had not waived its right to17 compel arbitration after demurring four times to the plaintiffs complaints over the course18 of a year, because such demurrer activity was not the equivalent of litigation on the19 merits, nor inconsistent with a desire to arbitrate. More importantly, the plaintiff could20 not satisfy the heavy burden, imposed upon non-moving parties, that the conduct21 prejudiced her. Such prejudice typically means some impairment of the opposing party's22 ability to participate in arbitration, and can be established when the moving party uses23 judicial discovery procedures not available in arbitration and thereby successfully gains24 access to the opposing party's strategies, evidence, theories, or defenses, However, the25 mere time and expense the opposing party must endure in responding to preliminary26 court motions falls short of this threshold.27 II!28

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POIINTS AND AUTHORITIES;SUPPORTING DECLARATION

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1 4. TWC SHOULD BE ORDERED TO JOIN ITS CLAIM WITH THE2 JAMS ARBITRATION COMMENCED BY RELATIVITY.3 As is set forth in the accompanying Declaration of Thomas J. Weiss, Relativity4 has already commenced arbitration proceedings with JAMS on its claims under the5 contract. A copy of Relativity's Arbitration Demand and Statement of Claims is attached6 to the Declaration of Thomas 1 . Weiss as Exhibit 3. This court accordingly should order7 the present action to be arbitrated with the claim of Relativity in the arbitration8 proceedings between the parties now pending before JAMS.9 5. CONCLUSION.10111213141516171819202122232425262728

TWC is bound to arbitrate its claims against Relativity. The Court should orderTWC to submit its claims to binding arbitration and stay these proceedings pending theoutcome of arbitration.

Respectfully submitted,K&L GATES~ LLPWEISS & HUNT

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES;SUPPORTING DECLARATION9


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1 DECLARATION OF THOMAS J. WEISS2 I, THOMAS J. WEISS, declare and state:3 I am one of the attorneys for defendant RELATIVITY MEDIA, LLC4 ("Relativiti'), and make this Declaration with regard to the motion to compel arbitration5 filed herein. If called as a witness I could and would testify to the following facts which6 are within my personal, first-hand knowledge.7 1 . On Wednesday, May 11,2011, Relativity submitted to JAMS and served8 on The Weinstein Company Relativity's Arbitration Demand and Statement of Claims9 against The Weinstein Company. Attached hereto as Exhibit 3 is a copy of the10 Arbitration Demand and Statement of Claims, without the Exhibits A, Band C attached11 to the claim.12 Ideclare under the penalties of perjury of the State of California that the foregoing13 is true and correct and that this Declaration was executed May 12,2011, at Los Angeles,14 California.1516171819202122232425262728

THOMAS J. WEIS~/

NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION; MEMORANDUM OF pmNTS AND AUTHORITIES;SUPPORTING DECLARATION 01 1


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EXH IB IT 3


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. . . . . . . . . . ~'

. . . . ,

DT HE R ES O~ UTION E XPE RTS '

Demand for Arbitration Before JAMsJTO RESPONDENT: The Weinstein Company' LLC

( N am e o f th e P e r t y o n w h o m D em an d fo r A r b i t r a t i o n I s m ad e )(Address) 375 Greenwich S t r e e t , Srd Floor(City) New York (state) N Y (Zip) 10013(Telephone) (Fax) 917.677.8808 (E-Mail)Representative/Attorney (if known): ( N : - : - a - m - a : : o f 7 . " " t h ~ e= - a - p r - e s - e n - : - ! a - : :- t 1 " - e /: - :- : A ~ o - r n e - y ~ o r : 7 . lh - e ' : :' P a ~ r t y ~ o - n - w - : - h o - m - : :D ~ e m - a - n d " : " :f o ; - r- ; 'A - : - r b : :- : lt r a - :; t io - - n - ; - I s - :m a d e )(Address) .(City) ( S t a t e ) (Zip)(Telephone) (Fax) (E-Mail)

FROM CLAIMANT (Name~):__;.R....:.e...:...la=tlv~lty~M;.;.;;e...,;...di=a,~L;;_LC _(Address) 8899 Beverly Boulevard, Suite 510(City) Los Angeles ( S t a t e ) CA (Zip) 90048(Telephone) 310.859.1250 (Fax) (E-Mail)Representative/Attorney of Claimant (if known): Carol A . Genis I Joseph C. Wylie II

( N a m e o f t h e R e p re se n ta tiv e lA H o m ey fo r th e Party D e m a n d i n g Arb1tratlon)( A d d r e s s ) _ . .. . ;K . . . .: .; & ; ; .; .; L = - G = a t ; . .; : e ~ s . .: : L : .= L . : ,. . .. P . ! .. . .. 7 . : .. . .: 0 = - W ~ , . . .: . :M ~ a : : ; ;; d : : .; ;l s . .: : .o ; . ; .n. : : . S . : ; _ tr ; ; . ; e e ;: . . : . t , ! . . . . ; S : : . . ; u ;: . . : . l t : . = .e _ ; ; 3 .. . . : . ; 1 ;; . ; 0 0 = - - _(City) Chicago ( S t a t e ) I L (Zip) 60602(Telephone) 312.372.1121 (Fax) 312.827.8000 (E-Mail)[email protected] OF DISPUTEClaimant hereby demands that you submit the following dispute to final and binding arbitration (8 moredetailed statement of the clalm(s) may be attached): See attached Arbitration Demand and Statement ofClaims of Relativity Media, L L 9 .

ARBITRATION AGREEMENTThis demand is made pursuant to the arbitration agreement which the parties made as follows (citelocation of arbitration provlslon & attach two (2) caples of entire agreement). Section 5.2 of theConfidential Non-Disclosure Agreement attached as Exhibit B to the Term Sheet between Reli~tlvity

2.Ef fec t ive 10 /01 /2010R es o lu t io n C e n t e r s N a t i o n w id e . ' 1 . 8 0 0 . 3 5 2 . 5 2 6 7 www. i l lmsadr .com(c) copyright 2010JAMS, All rights reserved.
http://www.illmsadr.com/http://www.illmsadr.com/


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THE RESOLUTION EXPERTS'

Demand for Arbitration Before JAMSMed ia , LLC and ~~ .~e ins te ln C om pany , LLC , and inc o rp o rated th ere in b y le tte r ag reem ent d ated as o fDec em ber 4 , 2007A 8nd b y le tte r ag reem ent d a ted Marc h 25 , 2009, (EX . e) a - t / . q.CLAIM & RELIEF SOUGHT BY CLAIMANTC laim ant as serts th e fo llow ing c la im and s eeks th e fo l low ing re lie f (inc lud e am ount In c ontrove rs y, if.app l i cab le ) :

See attac hed Arb itration Dem and and Statem ent o f C laim s o f Re lativity Med ia, LLC :RESPONSERes pond ent m ay file a res pons e and c ounte r-c la im to th e ab ove-s tated c laim ac co rd ing to th e a p p lic a bl earb Itra tion ru les . Send th e o rig inal res pons e and c ounter-c la im to th e c la im ant at th e ad dres s s ta tedab ove w ith two (2 ) coples to JAMS.

REQUEST FOR HEARINGJ AMS is re qu es te d to s e t th is m a tte r f or h e arin g a t: ._ _; L: :: ,: o: :; .; s :. ..! .A .. :: .n .: ..o ;Q l .. =e ,: .; ;le :: :: sJ , ,': = .A : . . . . ; . , , . . . . . . , , - : - : - - - = ~ _( P re f er re d Hea ri ng Lo cat io n )

ELECTION FOR EXPEDITED PROCEDURES (COMPREHENSIVERULE 16.1)By c hec king th ls b ox X C laim ant reques ts th at th e Exp ed ited P roc edures d es c rib ed in JAMSC om preh ens ive Rules 16.1 and 16.2 b e ap plleo in th is m atte r. Res p ond ent s h all ind ic a te no t la ter th an 7d ays from th e d ate th is Dem and is s e rved w heth er it ag rees to th e Exp ed ited P ro c edure .

S ig ned (C laim ant): Date ; May 11,2011

Print Name ; Ca ro l A . enis

Please Include a c h e c k payable to JAMS for the required initial, non-refundable $ 400 p e r p artydeposit to be applied toward your Case Management Fee and submit to your local JAMSResolution Center.

- : > "Effective 10/01/2010Resolution Centers Nationwide 1.800.352.5267 wwwjamscdr.corn(e) co py rig ht 2 01 0 J AM S. A ll rig hts reserved.


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THE R ES OLU TION EXPER TS '

Demand for Arbitration Before JAMSCOMPLETION OF THIS SECTION IS REQUIRED FOR CLAIMS INITIATED IN CALIFORNIAA. Please check here If this 0IS or X IS NOT a CONSUMER ARBITRATION as defined by California Rules of

Court Ethics Standards for Neutral Arbitrators, Standard 2{d) and (e):"Consumer arbitrat ion" means an arbitrat ion conducted under a pre-dispute arbitrat ion provision contained In 8 contract thatmeets the cri teria listed in paragraphs (1) through (3) below. "Consumer arbitration" excludes arbitration proceedingsconducted under or arising oui of public o r private sector labor-relations laws, iegulatlons, charter provisions, ordinances,statutes, or agreements.

1) The contract Isw ith a consumer party, as deflned In these standards;2) The contract was drafted by or on behalf of the non-consumer party; and3 ) The consumer party was required to accept the arbl trat lon provision in the contract.

"Consumer party" Is a party to an arbitration agreement who, In the context of that arbitration agreement, Is any of thefollowing:1) An Individual who seeks or acquires, IncludIng by lease, any goods or services primarily for personal, family,

or household purposes Including, but not limited to, financial services, Insurance, and other goods andservices as defined in section 1761 of the Civi l Code;

2) An individual who Is an enrollee, a subscriber, or insured In a health-care service plan within the meaning ofsection 1345 o f the Health and Safety Code or health-care Insurance plan within th e meaning of section 106of the Insurance Code;

3) An individual with a medical malpract ice claim that Issubject to the arbitrat ion agreement; or4 ) An employee or an applicant for employment in a dispute arising out of or relating to the employee's

employment or the applicant's prospective employment that Is subject to the arbitration agreement.If Respondent disagrees with the assertion of Claimant regarding whether this IS or IS NOT a CONSUMERARBITRATION, Respondent should communicate this objection In writ ing t o . the JAMS Case Manager and Claimantwithin seven (7) calendar days of service of the o\mand for Arbitration.

B . If thls is an EMPLOYMENT matter, Claimant must complete the following information:Effective January 1 , 2003, private arbitrat ion companies are requi red to collect and publish certain informaUon at leastquarterly, an d make It available to th e public in a computer-searchable format. In employment Gases, this includes theamount of the employee's annual wage. The employee's namewll l not appear In Ihe database, but the employer's name willbe published. Please check the applicable box below:Annual Salary: .

o less than $100,0000$100,000 to $250,000 o More than $250,000o Decline to StateC. In California, consumers (as defined above) with a gross monthly income of less than 300% of the federal poverty

guidelines are entitled to a waiver of the arbitration fees. In those cases, the respondent must pay 100% of the fees.Consumers must submIt a declarat ion under oath stat ing the consumer's monthly income and the number of persons l iving !nhis or her household. Please contact JAMS at 1-800-352-5267 for further Information.

-4-E f fe c ti ve 1 0 /0 1 /2 0 1 0

R e so lu ti on C e nt er s N a tio nwi de c ' 1 .BOO .3 52 .5 26 7 www.jarnsadr.corn(e ) c op yrig ht 2 01 0 J AMS . A ll rig hts r es erv ed .
http://www.jarnsadr.corn/http://www.jarnsadr.corn/


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IN ARBITRATION BEFORE JAMS

Claimant, Arbitration No.Relativity Media, LLC,

Arbitrator:v.

The Weinstein Company LLC,Respondent.

ARBITRATION DEMAND AND STATEMENTOF CLAIMS OF RELATIVITY MEDIA, LLC

Claimant, Relativity Media, LLC ("Relativity"), by and through its attorneys, K&L GatesLLP, hereby makes demand upon The Weinstein Company LLC ("TWC") for arbitration beforeJAMS in Los Angeles, California, and for its Statement of Claims in arbitration alleges thefollowing:

NATURE OF THE ACTION1. This arbitration arises out of TWC's egregious and deceitful actions with respect

to certain agreements between TWC and Relativity to finance, produce, market and distribute themotion picture Nine. Relativity's claims herein are based on: (1) TWC's misrepresentationsabout and intentional concealment of its true financial condition to Relativity for the purpose offraudulently inducing Relativity into agreeing to finance Nine; (2) TWC's intentional and willfulbreach of its obligations under the parties' agreements relating to the marketing spend andminimum screenrequirements for Nine; (3) TWC's breach of its duty to consult with Relativityin good faith with respect to the creative and marketing decisions regarding the production ofNine and in connection with the film's release date; and (4) TWC's refusal to pay Relativity allsums owed to Relativity from the distribution of Nine.


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2. Taken together, TWC's deceitful and bad faith actions, including its concealmentof its lack of financial wherewithal, its unfocused, disorganized, inadequately funded advertisingand marketing campaign that fell far short of TWC's $35 million commitment under TWC'scontract with Relativity, and TWC's unilateral, ill-founded decision regarding the film's releasedate, directly resulted in the movie Nine being a commercial disaster and caused Relativity tolose nearly its entire investment in the film.

3. Not only did TWC botch the Nine release and distribution, TWC has refused topay Relativity the money owed to it under the agreements between the parties. TWC also hasrefused Relativity's demand to audit the books and records relating to the Nine distribution, or toprovide Relativity the information needed to determine exactly how much money TWC stillowes Relativity.

4. Despite having utterly failed to live up to its obligations with respect to Nine,TWC now has demanded that Relativity allow TWC to distribute a remake of The C row. Underthe parties' agreements (assuming TWC were not in breach) TWC would have right of firstrefusal to distribute The C row , but would be required to guaranty at least $70 million in P&Aexpenses and foreign distribution sales. Based on the information available to it, Relativity doesnot believe that TWC has the ability to meet those obligations. Accordingly, Relativity hasdemanded that TWC provide reasonable assurances of its ability to perform. TWC has ignoredthose demands. TWC has thereby repudiated the parties' agreements, and Relativity is under noobligation to allow TWC to ruin yet another movie.

S. In this arbitration, Relativity seeks rescission of the agreements between TWC andRelativity governing Nine, an award of damages in an amount not less than $20 million plus

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interest calculated at 10% per annum, an accounting into the books and records relating to Nine,and an award of its attorneys' fees, costs and expenses incurred in bringing this claim.

INTRODUCTION6. Relativity is an independent media and entertainment conglomerate and prolific

industry leader specializing in the production, financing and distribution of first-class featurefilms across multiple platforms. Since its inception in 2006, Relativity has committed to,produced andlor financed more than 200 studio-quality motion pictures, including such films asA to nemen t; Am eric an G a ng ster; 3: 1 0 to Yum a; The Fast and the Furious; Talladega Nights: TheBa lla d of Ricky Bobby; M amm a Mial; H an coc k; T he P ursu it o f H app yn ess; G ho st R id er; C ha rlieW ilson 's W ar; F rost/N ixon,' Robin H ood ; D ea r John; the Socia l N etw ork; D espica ble M e; LittleF oc kers; T he Fighter,' and Limitless. Relativity has earned its reputation as the most cutting-edge entertainment company in the industry by revolutionizing the way films are produced andfinanced. Relativity has created unique structuring facilities that have invested billions of dollarsin financing for the production of a slate of motion pictures in partnership with the largest publicstudios.

7. In addition, Relativity's Single Picture Business fully finances, produces, marketsand releases approximately 6-8 pictures per year with budgets averaging $40-50 million. TheRelativity brand is seen on-screen in significantly more films per year than any other individualstudio. Audiences, distributors, exhibitors, banks and financing entities worldwide associateRelativity with high-quality, commercially successful and critically acclaimed feature films. 53of its films have each generated more than $100 million in worldwide box office receipts. 33 ofits films have been #1 box office releases. Its films have earned 60 Oscar nominations and havegenerated more than $15 billion in worldwide box office revenue.

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8. The Weinstein Company ("TWC") is a prominent independent film studiofounded by Harvey Weinstein ("Weinstein"), a film industry veteran, and his brother Bob in2005, after the pair left the Disney-owned Miramax Films ("Miramax"), which they co-foundedin 1979. TWC is associated with such films as A Single Man, You th In Revolt, Ing loriousBasterds and The R oa d, among others.

9. In December 2007, TWC and Relativity entered into an overhead agreementrelating to potential joint film projects, whereby TWC was to pay Relativity $5 million per yearin exchange for a second look agreement and, in the event that Relativity was to produce certainfeature films, TWC would distribute such feature films under the terms of the agreement.

10. In 2008, the parties embarked on their first joint production - the motion pictureNine, which was a project initiated by TWC. This action arises out of a series of wrongfulconduct by TWC relating to that project and specifically, TWC's numerous misleading andfraudulent misstatements and material omissions of fact to Relativity (detailed below) intendedto induce Relativity to invest $20 million in Nine. After fraudulently inducing Relativity to investthose funds, TWC then intentionally and willfully breached its contractual obligations toRelativity.

11. As a result of TWC' s multiple breaches of its duties (detailed below), Nine was acommercial failure. Nine grossed less than $20 million in domestic box office receipts despite aproduction budget of $80 million and a Prints and Advertising ("P&A") budget of $35 million.Because of TWC's fraudulent conduct and multiple breaches of its duties, Relativity has lostnearly its entire investment in Nine.

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THE NINE AGREEMENTS12. The parties' agreement with respect to Nine is set forth in several contracts. The

overhead deal is memorialized in a Term Sheet dated December 4,2007 (the "Term Sheet"). Asof July 10, 2008, TWC and Relativity entered into a separate letter agreement (the "Nine TermSheet") governing how Nine was to be treated under the Term Sheet. True and correct copies ofthe Term Sheet and the Nine Term Sheet are attached hereto as Exhibits A and B, respectively.

13. Under the Nine Term Sheet, the parties agreed that the total production budget forNine was to be $80 million. The manner in which the investments were to be made was $60million by TWO against the foreign distribution rights, and $20 million by Relativity against allother rights. The Nine Term Sheet (incorporating the Term Sheet) granted domestic and foreigndistribution rights to TWC. TWC pre-sold its foreign distribution rights to Nine forapproximately $60 million, representing virtually all of TWC's investment in the film.Therefore, the only actual risk that TWC faced in Nine was its commitment to fund the P&A(discussed below), Relativity, on the other hand, bore 100% of the equity investment risk in thefilm.

14. The Term Sheet contains a number of provisions which entitled Relativity todecision-making input into all major business and creative decisions relating to Nine.Specifically, the Term Sheet granted Relativity "mutual approval over all creative matters"relating to Nine, subject to a tie-breaking vote by TWC, (Ex, A ~ 9.3.) In addition; the TermSheet provides that TWC and Relativity are "jointly responsible for the theatrical marketing anddistribution" of Nine, provided that in the event of disagreement, TWCs decision controls.(Ex. A ~ 7,) It also required TWC "to consult with [Relativity] regarding the release date" of

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Nine, and provided that the parties "will work in good faith to determine the best availableUnited States theatrical and home video release date" for the movie. (Ex. A ~~ 7, 11.1.)

15. The Term Sheet required TWC to fund 100% of the domestic P&A budget forNine. (Ex. A ~ 12.4.) As set forth in the Term Sheet, the P&A budget for a particular film isdetermined by the film's production budget. In the case of Nine, TWC was required to spend$25 million on P&A. TWC and Relativity later agreed that TWC would increase the P&Abudget to $35 million from $25 million. Of that $35 million, $25 million was required to bespent before Nine's opening.

16. Further, the Term Sheet required TWO to release Nine on no less than 2,500screens simultaneously during its theatrical release. (Ex. A ~ 12.3.)

TWC'S WRONGFUL CONDUCT17. During preproduction, Weinstein approached Relativity's Chief Executive Officer,

Ryan Kavanaugh ("Kavanaugh"), and specifically stated that in order to make the agreed-uponNovember 2009 release of Nine, TWC needed Relativity to put up the sum of $5 million inpreproduction capital. Relativity made this additional investment in reliance upon TWC'srepresentations that this funding would insure that the film would be distributed on 2,500 screensand with no less than a $25 million pre-release P&A spend and that the film would be releasedon the agreed-upon date in November 2009. It was further agreed prior to Relativity making its$20 million investment, that Nine would absolutely not be released in a limited release fashion.Relativity's investment was made in reliance upon TWC's promises that the November releasedate would be met, the release would be wide and the required $25 million P&A pre-releasespend would be fulfilled.

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18. After Relativity's funding of Nine was complete, TWC began defaulting on itsoverhead payment obligations to Relativity. TWC was delinquent several months in a row,which required Relativity to send formal demand letters to TWC in order to receive payment.

19. TWC and Relativity renegotiated their deal by entering into a letter agreementbetween TWC and Relativity dated March 25, 2009 (the "Termination Agreement," a copy ofwhich is attached hereto as Exhibit C), allowing TWC to cease making its overhead payments.The production of Nine was then complete. However, Relativity had not been afforded theopportunity to see any of the film.

20. On numerous occasions, Weinstein assured Kavanaugh and Relativity's Presidentof Production, Tucker Tooley, that Nine had turned out "better than ever expected", was "goingto break $100 million in domestic box guaranteed" and would be "the best film Relativity wasever involved in." During negotiations to cease the overhead deal, Relativity specificallydemanded that the Nine deal be restructured, as Relativity would never have agreed to fund Ninein the manner it did had TWC not been paying its required $25 million for P&A. During thistime, TWC assured Relativity on numerous occasions that Nine would break $100 million indomestic box office receipts, thus achieving a very nice profit for Relativity. Relativity relied onthis guaranty in agreeing to release TWC from its overhead payment obligations. Further, it wasspecifically agreed between TWC and Relativity that if the projections were not met, the dealwould not stand.

21. Despite TWC' s commitment to finance Nine's production up to $60 million andP&A budget up to $35 million and representations to Relativity concerning its wherewithal to doso, unbeknownst to Relativity, TWC was under significant financial stress both at the time itagreed to the overhead deal Term Sheet with Relativity, and when TWC brought Nine to

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Relativity. In fact, it is now believed that TWC never had the financial capability to fully fundNine's P&A budget. TWC knew this when it induced Relativity to enter into the overhead dealand to fund Nine and TWC intended for Relativity to rely upon its misrepresentations andomissions concerning its financial condition. Indeed, Relativity relied to its detriment uponTWC's representations in making its decision to enter into the overhead deal and to invest inNine.

22. Throughout the entire production of Nine, TWC gave Relativity repeatedassurances that it had the required financial resources to fund its commitments. Indeed, in theTermination Agreement, TWC represented and warranted that it had "the ability to perform itsobligations" under the parties' agreement. (Ex. C ~ 9.) Moreover, TWC provided Relativitywith multiple assurances that it was funding the required $35 million P&A budget, when in factthose representations were false. For example, Lee Solomon, the Chief Operating Officer ofTWC at the time and the person primarily responsible for the negotiations on behalf of TWC,assured Andrew Marcus, Relativity's Chief Operating Officer and the person who handled thenegotiations all behalf of Relativity, on numerous occasions, that TWC had the financialresources "without question" to meet its obligations.

23. In addition to TWC's misrepresentations and omissions, TWC failed to meet itscontractual obligations to Relativity in connection with the production, marketing anddistribution of Nine.

24. First, TWC failed to consult Relativity on matters concerning the creative contentof Nine. Although ultimately TWC screened the movie for Relativity, it waited until August of2009 to do so, when it was too late to make any meaningful changes. Relativity sent its general

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notes to TWC and very few of the comments were ever incorporated in the film or evendiscussed.

25. Second, due to its own internal production mismanagement, TWC caused Nine tomiss its original release date of Thanksgiving 2009, Weinstein was the Producer on the pictureand TWC was the production company which was responsible for ensuring a timely delivery ofthe completed production. Due to TWC's and Weinstein's mismanagement, the film was notcompleted by the agreed-upon date, Having missed the original release date, TWC unilaterallydecided to release Nine on Christmas Day 2009 opposite It '3 Complicated, another competingRelativity film starring Meryl Streep, which was targeted to anaudience demographically similarto the target audience for Nine. Relativity strongly and repeatedly advised TWC to change theChristmas Day release date for Nine. Relativity told TWC that It's Complicated would dominateover Nine and prevent Nine from having a strong opening, and would have a significant adverseeffect on Nine's box office receipts, However, TWC told Relativity that there was no way itwould be able to make the original Thanksgiving Day release date. Given that there was nochance for a Thanksgiving Day release, Relativity then advised TWC that in order to give Nineits best chances for success, TWC should open Nine on a limited (2-screen or alternatively 800screen) basis before New Year's Day to ensure eligibility for award nominations, and release itwidely on 2,500 screens in early January. TWC agreed and notified Relativity that it would bereleasing Nine on a platform structure, meaning a limited release on Christmas Day and a widerelease on 2,500 screens in January. However, as the release date approached, TWC thensurprised Relativity with the news that it was going to release the movie wider (on 1,400 screens)on Christmas Day. This was disconcerting to Relativity to say the least as Relativity believedthat it would hurt Nine's chances for success at the box office. Accordingly; Relativity once

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again requested that TWC move the film to a wide release in January as TWC had said itwouldand which TWC unilaterally and arbitrarily decided against. In order to salvage any chance ofsuccess, Relativity requested, at minimum, that TWC stick to the release plan of 800 screens onChristmas Day and an increase to 2,500 screens in January. Without discussion, TWC increasedthe screen count to 1,400 on Christmas Day against the steep competition of It's Complicated.As a result, TWC sabotaged any chance for a successful opening of Nine.

26. Furthermore, without discussion or notice to Relativity, TWC failed to everincrease the screen count to 2,500 screens. TWC later informed Relativity that the reason that itdid not release on 2,500 screens on Christmas Day was to honor Relativity's request that it notgo wide, which was a hollow attempt to cover its tracks in that it had irreversibly harmed thefilm with its unilateral decision and mismanagement. In fact, TWC has never once consulted noreven informed Relativity of any of its marketing or release plans since the opening weekend ofNine (including further planned spends, marketing or distribution matters) and Relativity had tolearn that TWC did not intend to honor its 2,500 screen commitment by means of a legal demandletter sent to TWC. Even after Relativity demanded, in January 2010, that TWC procure therequired 2,500 screens, TWC refused to do so.

27. Third, after already recouping its upfront investment of $60 million, TWC thenengaged in a lackluster, unfocused, inadequately funded publicity and advertising campaign thatwas not structured to maximize Nine's target audience. Moreover, TWC designed the Nine P&Acampaign to appeal to limited New York and Los Angeles art-house audiences instead of acampaign with broader, mainstream appeal to reach all segments of America. Relativity was notafforded the opportunity to comment on any of the marketing materials until it was far too late.TWC presented the trailer to Relativity as "final" and Relativity strongly and repeatedly advised

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TWC to tailor Nine's P&A campaign to broaden Nine's target audience, again to no avail.Instead, TWC ignored Relativity's advice and implemented its original, ill-founded P&Astrategy. In fact, TWC did not even show Relativity any of its print or television advertisementsprior to placing them in the media. The television spots and "one sheets" were not even shownto Relativity until December 15, 2009, which was after they were in public circulation (the adsplayed on television and the one sheets were already posted), Relativity specifically encouragedTWC to change tbe campaigns. However, any such changes were too late to implement.

28. FOUl1h, TWC failed to spend its contractually-required P&A budget of $35million; TWC did not spend $25 million on P&A before Nine's release as itwas required to do,Based on information provided to Relativity by TWC, TWC did not even spend $20 million onNine's pre-release P&A efforts. Indeed, TWC never spent the full $35 million P&A budgetrequired by its agreement with Relativity. Based on TWC's well-publicized money problems, itappears that TWC did not spend the required P&A amounts because TWC did not have thefinancial strength or resources to do so.

29. Fifth, TWC failed to consult with Relativity concerning its marketing of Nine, asrequired under the Term Sheet. Relativity made repeated requests for details concerning TWC'smedia plan and TWC refused to provide such information and engaged in hide-the-ball and delaytactics until virtually the eve of the film's release in order to conceal the fact that TWC had notmade the required P&A spend. Specifically, Relativity demanded, in writing and verbally onnumerous 'occasions, that TWC provide the full media plan, including but not limited to TWC'splan for the following: (1) the full P&A budget and the timing of the spend; (2) the proposed aliwork; (3) the proposed areas where the various media buys would occur; (4) the strategy for howTWC would effectively market and distribute the film; (5) the cost of the various media buys;

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and (6) the newspaper, radio, television, trailer play and other media strategies. TWC refused.Relativity was then forced to send demand letters notifying TWC that it was in breach and stillthe media plan was not sent until it had already been implemented fully, thus irreparably harmingthe film and violating Relativity'S rights to be consulted on such matters.

30. Finally, TWC has refused to provide Relativity with financial informationconcerning Nine. Under paragraph 16 of the Exclusive United States Distribution Agreementdated October 17, 2008, between TWC and Guido Contini Films, LLC, a Relativity subsidiary(the "Nine Distribution Agreement)" TWC was required to account monthly to Relativity forNine's financial performance. TWG has never provided -that accounting. - Relativity hasdemanded detailed financial information regarding Nine from TWC repeatedly since Nine'srelease. Rather than provide that information, TWC has given Relativity only summaryinformation and estimates. Accordingly, on February 11, 2011, Relativity served TWC with anotice that Relativity was exercising its right to audit TWC's books and records relating to Ninepursuant to paragraph 16 of the Nine Distribution Agreement. TWC has failed to honor thatdemand and has refused to provide Relativity'S representatives with access to the Nine books andrecords.

TWC CANNOT FINANCE "THE CROW"31. Relativity is currently developing a remake of The Crow. The project is in the

earliest stages of development. There is no screenplay, no talent has been attached, no budgethas been established, and the project has not yet been greenlit.

32. Under the Termination Agreement, had TWC not been in breach of its obligationsto Relativity, TWC would have had a right of first refusal to distribute any "sequel(s), prequelrs)and remake(s) to 01' of the motion picture" The Crow. (Ex. C ~ 5.) IfTWC were to exercise that

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right) it would have to release the motion picture on at least 2)500 screens simultaneously, andwould have to spend at least $25 million on domestic P&A. (Ex. C ~ 6.) TWC also would haveto guaranty revenue from sales of foreign distribution rights of at least 75% of the budget for aCrow remake, (The Termination Agreement requires Relativity to fund a budget of at least $60million; 75% of that budget is therefore at least $45 million.) TWC)s resulting financialobligation with respect to a remake of The Crow would be at least $70 million, IfTWC does notdistribute the first remake of The Crow, it does not have the right to distribute any further Crowsubsequent productions,

33, In the Termination Agreement, TWC represented and warranted that it "has theability to satisfy the Release Requirements" with respect to any remake of The Crow, (Ex. C" if 9.) As discussed above, TWC was in financial distress at the time the Termination Agreementwas entered into) and TWC's warranty that it had the financial ability to fund P&A anddistribution was a material inducement for Relativity to renegotiate the parties' agreement withrespect to Nine and to give TWC an option to distribute The Crow.

34, Despite a refinancing in 2010 in which TWC sold off its back catalog and most orall of its marketable assets) and in violation of TWCs warranty of its financial capability tosatisfy the release requirements) Relativity understands that TWC does not have the money orfinancial resources to pay its overhead, payroll, and other ongoing operating expenses, as well asto fund its obligations with respect to motion pictures other than The Crow.

35. Accordingly, Relativity has demanded assurances from TWC that TWC has theresources necessary to meet its obligations with respect to The Crow. TWC has refused thatdemand) and has refused to provide Relativity with any information that demonstrates that TWCcan finance distribution of The Crow.

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41. Because TWC represented to Relativity that it could and would finance the P&Abudget for Nine, TWC was under a duty to disclose the weakness of its financial condition.

42. TWC knew its own financial condition, knew that the statements it made toRelativity were false, and knew that that information was material to Relativity's decision toenter into the Term Sheet and to finance Nine.

43. TWC concealed its financial condition in order to induce Relativity to investmoney in Nine.

44. Relativity reasonably relied on TWC's misstatements and omissions by providing$20 million to-fund the production of Nine.

45. As a result of TWC's misrepresentation and concealment, TWC invested $20million in the film Nine and it is estimated that Relativity has lost nearly its entire investment inNine.

SECOND CAUSE OF ACTIONBREACH OF CONTRACT

46. Relativity realleges and incorporates the allegations of Paragraphs 1 through 45 ofthis Demand for Arbitration and Statement of Claims as though fully set forth herein.

47. Under the Term Sheet and the Nine Term Sheet, as amended, TWC was requiredto: (a) consult with Relativity on creative matters relating to Nine; (b) exhibit Nine on 2,500screens; (c) spend $25 million on P&A prior to Nine's opening; (d) spend $35 million total onNine's P&A budget; (e) consult with Relativity on the marketing strategies associated with Nine;and (f) consult with Relativity on the release date of Nine.

48. TWC, without justification, intentionally breached those obligations.49. As a result of TWC's breaches, Nine has been a commercial failure, and it is

estimated that Relativity has lost nearly its entire investment in Nine.

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THIRD CAUSE OF ACTIONBREACH OF DUTY OF GOOD FAITH AND FAIR DEALING

50. Relativity realleges and incorporates the allegations of Paragraphs 1 through 49 ofthis Demand fo r Arbitration and Statement of Claims as though fully set forth herein.

51. Under the Term Sheet and the Nine Term Sheet) TWC owes Relativity a duty ofgood faith and fair dealing.

52. Under the Term Sheet and the Nine Term Sheet, TWC 1S invested withdiscretionary power that affects the rights of Relativity.

53. TWC failed to exercise its discretion in a manner that was fair and honest.54. Specifically, TWC failed to meaningfully consult with Relativity in connection

with key creative decisions regarding the production of Nine and in connection with thy film'smarketing and release date.

55. TWC's failure to meaningfully consult with Relativity in connection with thesekey creative and business decisions constitutes a breach of its duty of good faith and fair dealing.

56. TWC's conduct was objectively unreasonable. The conduct was trivial, arbitraryand capricious and was not related to the express business needs of Relativity. Absent theimposition of a duty of good faith and fair dealing in the exercise of TWC's discretion, the TermSbeet and Nine Term Sheet are unenforceable and illusory because they lack consideration.

57. As a result of TWC's breach of its duty of good faith and fair dealing, Nine hasbeen a commercial failure, and it is estimated that Relativity has lost nearly its entire investmentin Nine.

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FOURTH CAUSE OF ACTIONREPUDIATION


59. Under the Term Sheet and the Nine Term Sheet, TWC owes Relativity expresscontractual 0bligati ons.

60. TWC has failed to honor its contractual obligations under the TelID Sheet and theNine Term Sheet, including, but not limited to, failing to fully fund the $35 million P&A budgetand failing to exhibit Nine on the required 2,500 screens.

61. Relativity has repeatedly demanded assurances from TWC that TWC would honorthese obligations. Rather than provide any assurances that it would honor its obligations, TWChas flatly refused.

62, TWC's refusal constitutes a repudiation of its contractual obligations under theTerm Sheet and the Nine Term Sheet.

63. Relativity has performed all of the conditions of the Term Sheet and the NineTerm Sheet up to the time of repudiation and it was ready, willing and able to completeperformance of the contract except for TWC's unequivocal repudiation.

64. Relativity has suffered damages as a result ofTWC's repudiation,65. Accordingly, Relativity is entitled to rescind the Term Sheet and the Nine Term

Sheet, and all related agreements and modifications.FIFTH CAUSE OF ACTION

ACCOUNTING66. Relativity realleges and incorporates the allegations of Paragraphs 1 through 65 of

this Demand for Arbitration and Statement of Claims as though fully set forth herein.

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67. TWC has failed to provide Relativity with detailed financial information,including but not limited to an accounting of the expenses incurred in developing Nine, therevenue generated by that motion picture, and the costs incurred by TWC relating to the P&Aspend for Nine.

68. Accordingly, Relativity is entitled to a full accounting of the books and records ofTWC.

SIXTH CAUSE OF ACTIONFOR UNFAIR BUSINESS PRACTICES


70. The following acts and conduct of TWC constitute unlawful, unfair or fraudulentbusiness activities or practices, within the meaning of the California Unfair Competition Law,Sections 17200 et seq. of the California Business and Professions Code:

A. Deliberately concealing and misrepresenting its lack of financial and humanresources to complete the production and marketing of Nine, so as to induceRelativity to invest substantial sums in the Nine production project, and topublicly commit its industry reputation and expertise to the Nine productionproject. TWC knew and intended that Relativity's association with Nine wouldfacilitate relations with industry providers and financing sources because ofRelativity's reputation. TWC also knew that if it disclosed to Relativity its lackof financial and human resources, Relativity would not lend its name and investits money in the project.

B. Falsely representing to Relativity that it would have substantially equal controlwith TWC in artistic and commercial decisions concerning the production and

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marketing of Nine, limited only by such "tie-breaker" authority on the part ofTWC that would be necessary to avoid any paralyzing deadlock. Such falserepresentations were made in order to induce Relativity to invest money and, byreason of Relativity's reputation and influence in the industry to enhance theproject for TWC's benefit.

71. Relativity is a person which has been injured in its business and property byreason of the violation of the California Unfair Competition Law. Pursuant to Section 17203 ofthe California Business and Professions Code, Relativity is entitled to an order for restitution,

~ requinng-Twv'-to -disgorge-and-restore-to- Relativity the-amount -which -it-has received from-Relativity for the production of Nine.

SEVENTH CAUSE OF ACTIONFOR DECLARATORY JUDGMENT


73. TWC has asserted that it has the contractual right to distribute Relativity's remakeof The C row.

74. Under the Termination Agreement, if TWC were to distribute T he C row , it wouldhave financial 0bligations in excess of $70 million.

75. TWC has informed Relativity that TWC IS demanding that it be allowed todistribute The C row.

76. Based on the history of dealings between Relativity and TWC, and based onpublicly available information regarding TWC's operations and financial commitments,Relativity has a reasonable basis to believe that TWC cannot meet its financial obligations.

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77. Accordingly, Relativity has demanded that TWC provide reasonable assurancesthat TWC can meet its $70-million-plus obligation with respect to distribution of The C row.

78. TWC has failed to provide such reasonable assurances. TWC has therebyrepudiated the Termination Agreement.

79. Because of TWC's prior breaches, and as a result of TWC's repudiation of theTermination Agreement, Relativity is under no obligation to allow TWC to distribute T he C rowor any subsequent works derived therefrom.

WHEREFORE, Relativity Media, LLC hereby respectfully requests that the Arbitrator:...-- ---- ---(1)-- -order that-the-various agreements between Relativity -and -TWCwith respect to Nine-

be deemed rescinded and direct TWC to immediately return to Relativity the fullamount of its financial investment in Nine, totaling $20 million plus interestcalculated at 10% per annum;

(2) enter an award of damages against TWC and in favor of Relativity in an amount notless than $20 million plus interest calculated at 10% per annum;

(3) order and direct an accounting into the books and records of TWC;(4) enter an order providing that TWC has no right to distribute T he C row or any other

works derivative of The C row;(5) enter an award in favor of Relativity granting Relativity recovery of its attorneys'

fees, costs, and expenses incurred in bringing this claim; and(6) enter an award in favor of Relativity granting Relativity such other and further relief

as the Arbitrator deems just and proper.

9202833 20


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Dated: May 11,2011

Carol A. GenisJoseph C. Wylie IIAbram 1 .Moore_J(& L_GAIES_LLE__ __ __70 West Madison StreetSuite 3100Chicago, Illinois 60602(312) 372-1121 (voice)(312) 827-8000 (fax)Thomas J. Weiss (SBN 63167)Weiss &Hunt1925 Century Park East, Suite 2140Los Angeles, CA 90067(310) 788-0710 (voice)(310) 788-0735 (fax)

Respectfully submitted,Claimant, Relativity Media, LLC

BY~~'~ One of its Attorneys

21


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PROOF OF SERVICESTATE OF CALIFORNIA, COUNTY OF LOS ANGELES:I am employed in the County of Los Angeles, State of California. I am over the age ofeighteen (18) and not a party to the within action. My business address is 1925 Century ParkEast, Suite 2140, Los Angeles, California 90067. On May 11,2011, I served the followingdocument(s) described as DEMAND FOR ARBITRATION BEFORE JAMS;ARBITRATION DEMAND AND STATEMENT OF CLAIMS OF RELATIVITYMEDIA, LLC on all interested parties to this action, as follows:

byplacing 0 the original [gI a true copythereof enclosed in sealed envelopes addressed as follows:THE WEINSTEIN COMPANY LLC375 Greenwich Street, 3d FloorNew York, New Yorle 10013

D BYMAIL: By placing a true copy thereofin a sealed envelope addressed as above,and placing it for collection and mailing following ordinary business practices. I amreadily familiar with Weiss & Huntfs practice of collection and lrocessingcorrespondence for mailing. Under that practice it would be deposito with U.S.postal service on that same day with postage thereon fully prepaid at Los Angeles,California, in the ordinary course of business. I am aware that on motion of partyserved, service is presumed invalid ifpostal cancellation date or postage meter dateis more than one day after date of deposit for mailing in affidavit.BY OVERNIGHT COURIER: I caused the above-referenced document(s) to bedelivered to Federal Express for delivery to the above addressees).BY FAX: I caused the above-referenced document to be transmitted via facsimilefrom Fax No. to Fax No. directed to . Thefacsimile machine I used complies with Rule 2003(3) and no error was reported bythe machine. Pursuant to Rule 2005( 1), I caused the machine to print a record of thetransmission, a copy of which is attached to this declaration.BY PERSONAL SERVICE: I personally delivered such envelope by hand to theoffices of the addressee(s).

I declare under penalty of perjury under the laws of the State of California that the foregoingis true and correct and that this declaration was executed 5111111at Los Angeles, CA.

D

n

Karen Genova[PRINT NA!\.1E]


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PROOF OF SERVICESTATE OF CALIFORNIA, COUNTY OF LOS ANGELES:I am employed in the County of Los Angeles, State of California. I am over the age ofeighteen (18) and not a party to the within action. My business address is 1925 Century ParkEast, Suite 2140, Los Angeles, California 90067. On May 12,2011, I served the followingdocument(s) described as NOTICE OF MOTION AND MOTION TO COMPELARBITRATION; MEMORANDUM OF POINTS AND AUTHORITI1E.S;DECLARATIONS OF RYAN KAVANAUGH AND THOMAS J. WEISS on allinterested parties to this action, as follows:1 8 1 by placing 0 the original 1 8 1 a true copythereof enclosed in sealed envelopes addressed as follows:

BERTRAM FIELDSbfields@ggfirm,comCHARLES N, SHEPHARDcshepard @lgreenberggluster.comGREENBBRG GLUSKER FIELDSCLAMAN & MACHTINGER LLP1900 Avenue of the Stars, 21 st FloorLos Angeles, California 90067Telephone: 310-553-3610Facsimile: 310-553-0687

Attorneys for Plaintiff The WeinsteinCompanyLLC

oo

BY MAIL: By placing a true copy thereof in a sealed envelope addressed as above,and placing it for collection and mailing following ordinary business practices. Imreadily familiar with Weiss & Hunt's practice of collection and /. rocessingcorrespondence for mailing. Under that practice it would be depos i te with U,S.postal service on that same day with postage thereon fully prepaid at Los Angeles,California, in the ordinary course of business. Im aware that IOnmotion of partyserved, service is presumed invalid ifpostal cancellation date or postage meter dateis more than one day after date of deposit for mailing in affidavit.BY OVERNIGHT COURIER: I caused the above-referenced. document(s) to bedelivered to Federal Express for delivery to the above addressees).BY FAX: I caused the above-referenced document to be transmitted via facsimilefrom Fax No. to Fax No. directed to . Thefacsimile machine Ised complies with Rule 2003(3) and no error was reported bythe machine, Pursuant to Rule 2005(1), I caused the machine to print a record of thetransmission, a copy of which is attached to this declaration.BY PERSONAL SERVICE: I personally delivered such envelope by hand to theoffices of the addressee(s).Ieclare under penalty of perjury under the laws of the State of California that the foregoingis true and correct and that this declaration was executed 5/12/11 at Los Angeles, CA.
mailto:@lgreenberggluster.commailto:@lgreenberggluster.com

Documents

Relativity Motion for Arbitration