SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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1 LOEB & LOEB LLP BARRY E. MALLEN (SBN 00 ERIC SCHWARTZ (SBN 0 Santa Monica Blvd., Suite 00 Los Angeles, CA 00 Telephone:..000 Facsimile:..00 Attorneys for Plaintiff Red Granite Pictures, Inc. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES RED GRANITE PICTURES, INC., v. Plaintiff, ALEXANDRA MILCHAN, an Individual; EMJAG PRODUCTIONS, a California corporation; and DOES 1 through 0, inclusive, Defendants. Case No.: COMPLAINT FOR DECLARATORY RELIEF 1 LA.1 -

2 I. Plaintiff RED GRANITE PICTURES, INC. hereby alleges as follows: INTRODUCTION 1. This is a complaint for declaratory relief brought by Plaintiff Red Granite 1 1 Pictures, Inc. seeking a declaratory judgment that it owes no obligation of any kind to Defendants Alexandra Milchan and EMJAG Productions (collectively, Milchan in connection with the production of a theatrical motion picture derived from the book entitled The Wolf Of Wall Street. Despite the fact that no contract exists between Red Granite and Milchan and that Milchan was never engaged by Red Granite to render production services, Milchan nevertheless contends that she is entitled to certain rights in and to the motion picture based upon The Wolf Of Wall Street (the Picture, including a producer s fee and producer s credit. Red Granite brings this action seeking a declaratory judgment that it owes Milchan no obligations and that she is not entitled to any fee, credit or other consideration in connection with the Picture. 1 1 II. THE PARTIES. Plaintiff Red Granite Pictures, Inc. ( Plaintiff or Red Granite is a California corporation with its principal place of business located in Los Angeles, California. Red Granite is engaged in the business of financing, developing and producing filmed entertainment.. Defendant Alexandra Milchan is an individual who, upon information and belief, resides in Los Angeles County, California.. Defendant EMJAG Productions ( EMJAG is, upon information and belief, a California corporation that is owned and operated by Milchan and used by her to furnish her services as a producer in the entertainment industry. Milchan and EMJAG will hereinafter collectively be referred to as Milchan.. Plaintiff presently does not know the true names and capacities of Does 1 through 0, inclusive, and for that reason sues such Defendants under such fictitious names. Plaintiff will further amend its complaint to show the true names and capacities of the Doe Defendants when they have been ascertained. LA.1 -

3 . Plaintiff is informed and believes and based thereon alleges that, at all times mentioned below, the Defendants, including the Doe Defendants, and each of them, were the agents, servants, and employees of one another and, in doing the things mentioned below, were acting within the course and scope of such agency, employment and service, and with the knowledge, permission, and consent of each other. III. FACTS APPLICABLE TO THE CAUSE OF ACTION.. The Wolf of Wall Street is a book written by Jordan Belfort, the founder of the brokerage firm Stratton Oakmont, who was indicted in for securities fraud and money laundering and who later spent months in federal prison.. In 00, The Wolf of Wall Street was published by Random House.. In 00, Defendant Milchan, who was acquainted with Belfort, approached both Warner Bros. Pictures and actor Leonardo DiCaprio ( DiCaprio about Warner Bros. potentially making a motion picture based on Belfort s book which DiCaprio would star in.. Thereafter, in an agreement dated as of March, 00, Warner Bros. Pictures, a division of WB Studio Enterprises, Inc. ( Warner Bros., entered into an Option Purchase Agreement ( Option Agreement with Belfort giving Warner Bros., during the option period, the motion picture rights in The Wolf of Wall Street book written by Belfort (the Book.. Having acquired the motion picture option rights to the Book from Belfort, Warner Bros., in another agreement dated as of March, 00, engaged writer Terence Winter ( Winter, through his furnishing company, Cold Front Productions, Inc., to write a screenplay based on the Book ( Writer s Agreement. Both the Option Agreement and the Writer s Agreement are fully executed agreements. 1. In or about the same time frame, Warner Bros. and Milchan entered into negotiations involving Milchan being engaged by Warner Bros. to provide certain development services and, assuming that a motion picture based on that screenplay (the Picture was set for production, certain production services. A draft Producer Loanout LA.1 -

4 Agreement was thereafter prepared between Warner Bros. and Milchan, which was never signed. 1. Separately, Milchan and DiCaprio, through DiCaprio s company, Appian Way Productions ( Appian Way, entered into an agreement in which Appian Way agreed to pay to Milchan twenty percent (0% of Appian Way s back end profit participation in the Picture to the extent it was produced and starred DiCaprio. 1. Thereafter, Warner Bros. engaged in certain development activities, including commissioning Winter to write a screenplay and preparing the screenplay for production. As agreed between Warner Bros. and Milchan, Milchan was paid in full by Warner Bros. for all of her development services that she rendered to Warner Bros. 1. In 0, Warner Bros. decided to discontinue its efforts at developing a motion picture based on the Book and ceased all activity on its part in connection with the project. Notably, Warner Bros. let its rights lapse in the option to the motion picture rights to the Book it had acquired from Belfort, and did not renew the same, thereby extinguishing all rights Warner Bros. had to produce a movie based on the Book. 1. Also in 0, after Warner Bros. rights in the Book had lapsed, Red Granite independently became aware of the fact that the motion picture rights to the Book were now available to be acquired. As a result, Red Granite entered into an agreement with Belfort to acquire an option to the motion picture rights to the Book. 1. Thereafter, Red Granite entered into negotiations with Warner Bros. to acquire from Warner Bros. the rights to the Terence Winter script that Warner Bros. had commissioned and owned pursuant to the Writers Agreement. Those efforts culminated in an agreement dated as of April 1, 0 between Warner Bros. and Red Granite (the Quitclaim Agreement, in which Warner Bros. quitclaimed to Red Granite, as Warner Bros. assignee, all of Warner Bros. rights in and to the motion picture project The Wolf of Wall Street, including, specifically, the rights in and to the Winter screenplay.. As part of the Quitclaim Agreement, Red Granite agreed to assume all of Warner Bros. rights and obligations, if any, on certain executed and unexecuted LA.1 -

5 agreements and/or proposed agreements listed on an Exhibit A that was attached to the Quitclaim Agreement. One of the documents set forth on Exhibit A is the unsigned Producer Loanout Agreement between Warner Bros., on the one hand, and Milchan and EMJAG, on the other.. Red Granite, independently of any efforts on the part of Milchan, has secured financing for the production of the Picture, has secured the services of DiCaprio and several other top tier actors to star in the Picture, and with noted director Martin Scorsese to direct the Picture, and is about to commence production of the Picture. Milchan has had no involvement in the development and production by Red Granite of the Picture and has not rendered any services to Red Granite or been asked by Red Granite to render any services to it or in connection with the Picture. At some point after Red Granite had acquired the rights to the Winter script from Warner Bros. in connection with the Quitclaim Agreement, Red Granite did have preliminary negotiations with Milchan about engaging her as an Executive Producer in connection with the Picture, but the parties were not able to agree on terms and never entered into an agreement of any kind. 0. On August 0, 01, Red Granite received a demand letter from counsel engaged by Milchan demanding that Milchan be engaged by Red Granite as a producer on the Picture and that Red Granite honor the unsigned Producer Loanout Agreement between Warner Bros. and Milchan. The demand letter further stated that unless Red Granite acquiesced to all of Milchan s claims and, among other things, agreed to engage her as a producer on the Picture on the same terms as are set forth in the unsigned Producer Loanout Agreement that Milchan had been negotiating with Warner Bros., that Milchan would file suit against Red Granite in an attempt to enforce the unsigned Producer Loanout Agreement. 1. The Producer Loanout Agreement contemplates that Milchan would, separately, provide certain development services to Warner Bros. in connection with the development of a screenplay for production and, at Warner Bros. election, if the Picture LA.1 -

6 was set for production as that term is defined in the agreement, receive additional consideration for production services if she was engaged for production by Warner Bros.. As noted previously, Milchan was paid in full by Warner Bros. for all of the development services she rendered to it and was never engaged for production by Warner Bros. or rendered production services to Warner Bros., which let its rights lapse in the Book and never even began production of a film based on the same.. Moreover, under paragraph of the Producer Loanout Agreement, Milchan would only be entitled to her Fixed Compensation as a Producer, or a producer credit, or any other consideration, if the Picture was set for production, as defined by the Producer Loanout Agreement, within one (1 year from the date of delivery to Warner Bros. of the Winter script. Under paragraph 1(c of the Producer Loanout Agreement, the Picture shall be deemed set for production when the final screenplay and budget have been approved by Warner Bros., the principal cast members and director have been engaged and a definite start date has been scheduled for commencement of principal photography. None of those conditions precedent occurred within the specified time frame that Milchan and Warner Bros. bargained for, or at all, before Warner Bros. rights lapsed, thereby relieving Warner Bros., and Red Granite, as Warner Bros. assignee, of any and all obligations to Milchan under the Producer Loanout Agreement.. Separately, the Producer Loanout Agreement provides that all of Warner Bros. obligations to Milchan expire, and that Warner Bros. shall have no further obligation to Milchan, if Warner Bros. elects to abandon the development or production of the Picture. Here, Warner Bros. never even initiated production of the Picture and abandoned its development, pursuant to the parties understanding, when Warner Bros. let its rights in and to the option to the Book expire, failed to renew the option, and discontinued all of its efforts aimed at developing a motion picture based on the Book.. Accordingly, for either one of two separate and independent bases, among others, Red Granite, as assignee of Warner Bros., owes Milchan no rights under the Producer Loanout Agreement or based on any other agreement. LA.1 -

7 FIRST CAUSE OF ACTION (For Declaratory Relief Against All Defendants. Plaintiff hereby repeats and realleges the allegations of Paragraphs 1 through An actual controversy has now arisen as between Milchan, on the one hand, and Red Granite, on the other hand, in that Milchan claims that she is entitled to rights in connection with the Producer Loanout Agreement and that she is entitled to a producer fee, producer credit and other consideration in connection with production services she contends Red Granite is compelled to allow Milchan to provide. Red Granite, in turn, contends that Milchan has no rights under the Producer Loanout Agreement, or any other agreement, vis-à-vis Red Granite, or any entitlement to any fees, compensation, credit or other consideration in connection with Red Granite s production and release of the Picture.. Accordingly, a judicial declaration is required in order to determine the rights and obligations, if any, of the parties. WHEREFORE, Red Granite prays as follows: 1. For a judicial declaration that it owes no obligation to Milchan under the Producer Loanout Agreement, or any other agreement, and that Milchan is not entitled to any fee, compensation, credit or other consideration in connection with Red Granite s production and release of the Picture;. For reasonable attorneys fees;. For costs of suit incurred herein; and. For such other relief as the Court deems just and proper. Dated: August, 01 LOEB & LOEB LLP BARRY E. MALLEN ERIC SCHWARTZ By: Barry E. Mallen Attorneys for Plaintiff Red Granite Pictures, Inc. LA.1 -