Viratech Corp. (VIRA): Hergott Responds In "Never Submit" Case...

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Friday, 06/08/2007 5:37:13 PM

Friday, June 08, 2007 5:37:13 PM

Hergott Responds In "Never Submit" Case

CORONA DEL MAR, Calif., June 8, 2007 – Hergott Productions,
Inc./Muffin Club Entertainment Inc. President James Hergott announced
today his response to Mr. Eade's June 5th, 2007 PR about the case as
well as to some of the issues brought about in Mr. Eade's court
declaration. Mr. Hergott and his attorneys have filed their legal
reply in preparation for the injunction motion hearing on June 12,
2007.

Mr. Eade claims in a PR put out June 5, 2007 that "as opposed to
seeking an injunction in federal court, as he is doing, Hergott has
the contractual obligation to arbitrate before the American
Arbitration Association" Mr. Eade however fails to mention that only
my executive agreement has an arbitration clause. There is no such
clause in the writers/directors agreement, which is at the centre of
the copyright dispute.

The following is an excerpt from Mr. Hergott's declaration today in
support of the preliminary injunction.

21. By the Writer/Director's Agreement dated Jan. 3, 2007, Mr. Eade
also acknowledged my rights as the author of the Original Script. The
contract provides that Imperia would pay me to direct the movie and to
use my Original Script "in exchange for all the right, title and
interest to the story and the Script." The contract also states that
"all rights to the story, script and name, 'Never Submit,'" would
revert to me if Imperia did not begin production within 12 months. The
contract further provides that I retained "the rights to any sequel
motion picture," but Imperia would have right of first refusal to
negotiate for any sequel. (Italics added here for emphasis. See
Writer/Director's Agreement attached as Exhibit G.)

22. In other words, Mr. Eade and his companies knowingly
contracted for the rights to my Original Script. But, I am informed
and believe, they lost any rights to my Original Script when they
terminated my services as director.

23. Through my attorney at the time, I communicated my position
in this regard to Mr. Eade. I demanded that Mr. Eade reinstate me as
director or that the Writer/Director's Agreement was rescinded and my
Original Script and all rights reverted to me. (See demand letter
dated April 4, 2007, attached as Exhibit H.)

24. Because Mr. Eade has continued to use my Original Script
without regard to my rights, I have sought the court's intervention.
Among other concerns, I am suffering irreparable harm because Mr. Eade
and his companies have taken control of my intellectual property and
they apparently intend to continue using it without my permission.

The following is an excerpt from Cindy Ortiz's declaration today in
support of the preliminary injunction.

13. Mr. Eade attempted to rehire me for this project in early
April 2007. As I was considering the opportunity, I found out that Mr.
Eade intended to make changes to some of the scenes and then claim
authorship of the script as his own. Additionally, I found out Mr.
Eade fabricated the reason he terminated Mr. Hergott as director.

14. After reviewing the May 21, 2007 version of the shooting
script, I concluded that the story is essentially the same as the
script created by Mr. Hergott, and all modifications made are simply
attempts to disguise the work as Mr. Eade's version.

15. As a result of Mr. Eade's conduct, I decided not to return to
the project and I have no desire to work with him again.

The following is an email from Dr. Richard Moore in Support of the
preliminary injunction:

From: Richard Moore
To: bill@gruenbeckvogeler.com
Cc: James Hergott <jameshergott@gmail.com>
Date: Jun 7, 2007 4:02 PM
Subject: Hergott vs. Eade
Reply | Reply to all | Forward | Print | Add sender to Contacts list |
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garbled?

Just a quick note to tell you about my dealings with Ken Eade. I have
found him to be very unreliable and to not fulfill contracts that he
makes. At present time, he owes me $60,000 in cash for a loan I made
to him for a 2- week duration almost a year ago. He said he didn't
have the cash, so he sent me stock which devalues to almost nothing by
the time you receive it. I am still spending my valuable time trying
to collect it, and will probably be in litigation within days.

I have also had other dealings with him that have cost me very large
sums of money. I will be addressing those also. I have already had
litigation against him about 4 years ago that resulted in my getting
back $200,000 that was in a trust accout in his law firm that was
released without my consent. I thought it was just a lazy and dumb
mistake at the time and I forave his error, but now I think it must
have been to the other side of the ledger.

I was the individual that introduced James Hergott to Ken Eade, as I
thought they could benefit each other. I would also like to say that
I know James has had this script in the works as far back as 4 years
ago when I funded his other movie script, "All That I Need".

I would be glad to get into more depth if needed.

Dr. Richard Moore

The following was entered into evidence in support of the preliminary
injunction:

From: Greg Garrison <GGarrison@garrisonmcinnislaw.com>
To: keneade93101@yahoo.com
Cc: jameshergott@gmail.com
Date: Apr 4, 2007 3:19 PM
Subject: Never Submit
Dear Mr. Eade:

This office is counsel to Mr. James Hergott in connection with
the manuscript he authored, Never Submit.

As you are aware, Mr. Hergott entered a contract with Imperia
Entertainment, Inc. and Never Submit, Inc., organizations controlled
by you and formed for the purpose of producing a movie based on Mr.
Hergott's Never Submit manuscript. Pursuant to the terms of your
contract with Mr. Hergott's company, Muffin Club, Inc., Mr. Hergott
agreed to allow you to produce Never Submit for $35,000.00; far less
than the fair market value of the manuscript, in exchange for your
allowing Mr. Hergott to direct the movie. Thereafter, you refused to
allow Mr. Hergott to direct the movie and believe you have the
contractual right to produce Never Submit with a different director.
You are incorrect.

Please consider this correspondence a formal demand that 1) Mr.
Hergott be allowed to direct Never Submit as agreed or 2) the contract
is rescinded and all right, title and interest in the manuscript
revert to Mr. Hergott immediately.

In the event we do not receive written confirmation that one of
the two above-mentioned options is acceptable by the close of business
Friday April 6, 2007 we will have no choice but to file a lawsuit to
enjoin the production of Never Submit by you or your entities.

Please feel free to contact the undersigned to discuss this
matter at your convenience.

The full court declarations are available upon request.

ABOUT HERGOTT PRODUCTIONS

Hergott Productions, Inc. projects include controlling interest in
"All That I Need" (http://imdb.com/title/tt0439434/), released in
theaters December 2005, and now being marketed for DVD distribution,
"Brothers," by James Hergott and Tarquin Gotch ("Home Alone"), and a
number of film and TV projects currently being developed.

ABOUT JAMES HERGOTT

James Hergott was born in Cornwall, Ontario in 1976. Always an
imaginative spirit, Hergott's film career began in high school at age
thirteen when he got his first home video camera. His cast and crew
were comprised of other kids in his neighborhood. Though Hergott
struggled with a learning disability in his early years, he was found
to be of superior intellectual caliber with an escalated sense of
ingenuity and creativity.  While in college at York University,
Hergott started his own business, a 1-900 job line servicing all of
Canada. His new venture skyrocketed, and he even turned his dorm room
into his corporate headquarters, but he never lost his true passion
for filmmaking. In 1999, his biggest break yet came when he met
Hollywood producer Tarquin Gotch at the Toronto Film Festival. The two
formed an instant friendship and working relationship. Gotch was so
impressed with Hergott's tenacity and love of filmmaking that he took
him under his tutelage. Together they developed the Showtime biopic
"Call Me Donald" on real estate mogul Donald Trump. The collaboration
garnered national media attention for Hergott in the industry
cornerstone Variety which reported "Young Buck, Plays Trump Card" in
their April 1999 issue. The Don himself also praised Hergott's work
and in a personal letter to the young filmmaker, Mr. Trump wrote that
he was "extremely talented" and wished him the best in his "burgeoning
career." Hergott also went on to co-write the feature film "Brothers"
with Gotch, which is scheduled to begin production in Canada in early
2008. The partnership led to the co-founding of Steinberg Gotch
Entertainment with Hergott, Gotch and famous sports agent Leigh
Steinberg.  In 2004, Hergott went solo with the production and
direction of his first feature film "All That I Need." The film
debuted at the Cannes International Film Festival Market in 2005 as
part of a roster of films presented by a Beverly Hills production
company. Following the success of the film at Cannes, executives
decided to offer Hergott the presidency of the company, a challenge he
eagerly accepted. In this position, he was able to secure a limited
theatrical release of "All That I Need" with the Regal/UA Theatre
chain that exhibited the film on screens across the country. Hergott
has also been featured in over 200 media outlets throughout the U.S.
and Canada as well as a number of national publications including
Indie Slate and Create Magazines.

CONTACT: hergottproductions@gmail.com

James 2 Ken 0

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