Hannover House Inc (HHSE)

[speckulater]

Filing-6/26/14: Medallion Releasing Inc. Subsidiary, E&O Policy Approvals





A special meeting of the Company's Board of Directors was held at 10:00 am on Thursday, June 26, 2014at the Company's principal headquarters in Springdale, AR. The following minutes cover agenda items discussed, and where noted, acted upon by the Board of Directors.

1). APPROVAL OF SUBSIDIARY OR AFFILIATE ENTITY FOR MULTI-STUDIO VENTURE -
In response to issues and suggestions presented by affiliate label suppliers to the company’s “multi-studio distribution venture” under Medallion Releasing, the board considered the benefits of forming a separate, corporate entity, ostensibly, Medallion Releasing, Inc. The primary purpose of the separate corporate entity is enable the unaffiliated, third-party studio supplier labels to maintain their existing security interests in their own sales receivables, without conflicting with existing security interests in Hannover House assets or existing security interests held in the receivables of these third party suppliers. Accordingly, the board approved the formation of Medallion Releasing, Inc., and agreed to work with counsel in structuring the stock ownership in a manner which enables HHSE to continue to enjoy the benefits of the revenues and applicable commissions due to HHSE, without compromising the various security interests and financing issues impacting the partner suppliers.

2). APPROVAL OF “DISTRIBUTOR’S ERRORS & OMISSIONS” POLICY AND NAMED BENEFICIARIES –
In order to protect HHSE and customers of HHSE and Medallion, the Board discussed the need for a blanket “Distributor’s Errors and Omissions” policy in order to protect the company and customers against third party claims of rights and licensing disputes. The board reviewed a proposal from Frankel & Associates for a policy offering up to $5-mm in coverage per title distributed by or through HHSE and Medallion, which coverage can extend to third party titles (conditioned upon the indemnification criteria and the proper copyright clearances for each covered title). The Board approved the purchase of the E&O policy and the additionally named and covered customers of Walmart Stores, Inc.; Best Buy, Inc.; Anderson Merchandisers, Inc.; Target Brands, Inc.; Netflix, Inc.; StarzEntertainment, LLC; Showtime Networks, Inc.; and Costco Wholesale Corporation; the Board reserved the right to name additionally covered customers to the policy as may be needed or requested.

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