Exhibit 10.2
 
As of May 11, 2012
 
Coral Ridge Capital Partners, LLC
119 Bristol Road
Wellesley, MA 02481
Attention: Henry A. Malkasian Jr.
 
Re:        "End Of The Gun"/ Finance Agreement (the "Agreement")
 
Dear Mr. Malkasian:
 
This agreement ("Agreement") will confirm the terms and conditions of the
agreement between Coral Ridge Capital Partners, LLC ("CRC"), Florida limited
liability company, and Mass Hysteria Entertainment Company, Inc. (the
"Producer"), with respect to certain financing of the motion picture currently
entitled "End Of The Gun" ("Picture").
 
1.  The Picture.
 
A.     General. The Picture is a feature .length motion picture, the specifics
of which are set forth on Schedule 1, annexed hereto. CRC wishes to participate
in the funding of the Picture and has agreed to provide the Production
Contribution (as hereinafter defined). The Picture will be produced by a single
purpose production entity ("SPE") formed by Producer.
 
B.      Production Contribution. (i) CRC agrees to provide equity financing for
the Picture to Producer or its designee in the form of an equity contribution in
the amount of Three Hundred Thousand U.S. Dollars (USD$300,000.00) ("Production
Contribution") in exchange for the Premium (as defined below) and, thereafter, a
minimum twenty percent (20%) perpetual equity interest in the "Adjusted Gross
Receipts" of the Picture as defined below ("Minimum Equity Interest"), to be
repaid solely from the Gross Receipts of the Picture in the manner provided in
paragraph 1 C below. CRC acknowledges that Producer shall, at all times, have
the right to seek and obtain alternate and/or additional funding for the Picture
from any other source, including, without limitation, production, post
production and completion cost deferrals, but so long as CRC provides the
Production Contribution, CRC shall remain entitled to the benefits set forth
herein. The Production Contribution shall be paid to Producer as follows: (i)
One Hundred Thousand Dollars ($100,000) shall be paid to Producer within five
(5) business days from execution of this Agreement; and (ii) the balance of the
Production Contribution Two Hundred Thousand US Dollars (USD$200,000)] shall be
paid to SPE to an account specified by Producer no later than two weeks prior to
the scheduled start date for commencement of principal photography of the
Picture, provided (i) the completion guarantor bonding the completion and
delivery of the Picture ("Completion Guarantor") may require CRC to place the
balance of its Production Contribution in escrow on an earlier date, and if so,
CRC shall comply with the requirements of the Completion Guarantor upon not less
than five (5) business days notice of same, subject to the following; (ii) CRC
shall have no obligation to furnish the balance of the Production Contribution
until Producer provides a fully executed commitment letter from the proposed
secured senior debt production lender ("Primary Financier") to cover the balance
of the proposed production cost of the Picture, after taking into account all
sources of production funding. The Production Contribution shall be disbursed by
Producer and SPE in accordance with a cashflow schedule ("Cashflow Schedule") as
the same may hereafter be revised as needed by the Completion Guarantor, if any,
the Primary Financier or due to producti on exigencies, and shall be used solely
to pay for the necessary and actual costs of development, production, completion
and delivery of the Picture. The initial Cashflow is attached hereto as Schedule
2 and incorporated by this reference.
 
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(ii) Producer shall engage the Completion Guarantor and obtain a completion
bond, and CRC shall be named a beneficiary under such completion bond to the
extent of such Production Contribution actually provided by CRC.
 
(iii) In the event that (a) production of the Picture is abandoned, for any
reason, or (b) Producer materially breaches any warranty or representation of
Producer as set forth in Section 3B of this Agreement then, in such event,
notwithstanding anything set forth elsewhere in this Agreement to the contrary,
CRC may terminate this Agreement by written notice to Producer and Producer
shall return the Production Contribution actually advanced by CRC to CRC in full
along with interest which shall accrue at the rate of twelve percent (12%) per
annum applied retroactively from the date CRC tendered the Production
Contribution.
 
C.  Repayment of Production Contribution, Premium and Adjusted Gross Receipts
Participation. Provided the Production Contribution is paid to Producer, in fu
ll, CRC shall be entitled to the following:
 
(i)  Following indefeasible repayment in full to the Primary Financier providing
a production loan for the Picture, CRC shall be entitled to repayment of its
Production Contribution and the Premium from One Hundred Percent (100%) of the
"Gross Receipts" of the Picture until such time as the Production Contribution
and the Premium is paid in full to CRC,. In the event additional equity
investment is obtained with respect to the Picture, Production Contribution and
Premium shall be repaid to CRC before any distributions, recoupments or
repayments are made to any other investors or lenders, except for any equity
production incentive (such as the Manatoba equity incentive) which shall be
repayable in accordance with the terms upon which such incentive is granted. The
term "Gross Receipts" is defined as all amounts actually and unconditionally
received by Producer from the exploitation and licensing of the Picture from all
sources, less any production deferrals, CAM fees, residuals, and all other
actual necessary and customary distribution costs and expenses. Producer shall
provide periodic written accountings to CRC specifying Gross Receipts and
deductions therefrom. If required by the Primary Financier, Gross Receipts may
be deposited in a third party collection account ("Collection Account") pursuant
to a collection account management agreement to which CRC shall be a signatory
and which shall set forth the agreed distribution of all Gross Receipts.
 
(ii)  The "Premium"shall be a sum equal to Fifty Thousand US Dollars ($50,000).
 
Financing Agreement v Final
 
 
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(iii)     In addition, following repayment of the Production Contribution and
Premium, CRC shall be entitled to the Minimum Equity Interest defined as a sum
equal to twenty percent (20%) of one hundred percent (100%) of the Adjusted
Gross Receipts of the Picture, in perpetuity, but subject to the Primary
Financier's rights as a secured creditor. Adjusted Gross Receipts shall be
defined, computed, paid and accounted for in accordance with the standard
definition adopted by Producer in connection with the Picture (attached hereto
as Schedule 3 and incorporated by this reference), but no less favorable than
the definition of Adjusted Gross Receipts applicable to any other participant
therein in connection with the Picture. With respect to sequels, remakes and
other subsequent productions, for purposes of calculating Adjusted Gross
Receipts, Gross Receipts shall include a fair market value rights fee for the
particular derivative right so exploited.
 
D.  Credit. Provided the Production Contribution is paid to Producer, in full,
and CRC is not in breach or default of this Agreement, CRC shall receive two (2)
executive producer credits in the main titles of the Picture on all positive
prints of the Picture (or, if there are no "main titles" at the beginning of the
Picture, in the end titles), on a shared or separate card (to be determined by
Producer), subject to applicable guild or union requirements, if any, and,
subject to customary distributor exclusions, in all paid advertising and
promotional materials wherein any other executive producer is accorded credit,
as applicable. Upon Producer's request, CRC shall promptly and timely provide
the names of the individuals (with accurate spelling thereof) who shall receive
such executive producer credit on behalf of CRC; Producer reserves the right to
reject the use of any pseudonym, sobriquet, nom de plume, or the like. No casual
or inadvertent failure to accord proper credit hereunder shall be deemed to be a
breach of this Agreement. All other aspects of such credit shall be determined
in Producer's sole discretion, and Producer reserves the right to accord a more
favorable credit than the contractually required credit hereunder.
 
E.  First Opportunity. Provided the Production Contribution is paid to Producer,
in full, and CRC is not in breach or default of this Agreement, Producer shall
offer CRC the right to make a similar production contribution to the motion
picture "Boiling Point" ("Second Picture") prior to the Producer offering such
financing opportunity to any other person or entity, on the same terms
applicable to the Picture (with appropriate adjustment due to budget variations
and available ftnancing) if produced by Producer. In the event that a written
finance agreement is not executed with respect to such Second Picture within
fifteen (15) days following Producer's written notice to CRC to commence
negotiations and the parties' good faith negotiations with respect to same, then
Producer shall have no further obligation to CRC with respect to such Second
Picture, whatsoever.
 
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2.  Rights/Ownership of Picture. Producer and Producer's assigns shall be the
sole and exclusive owners and/or controllers of all rights in and to the
Picture, including, without limitation, to all copyrights therein and thereto
(including all renewals and extensions thereof), and shall have the sole and
absolute unfettered right to develop, prod uce, distribute and exploit the
Picture in any and all media now known or hereafter devised or improved, in
perpetuity, throughout the Universe, without any obligation to CRC, or any other
party, whatsoever, claiming rights through CRC, except Producer shall perform
the express obligations to CRC provided for in this Agreement (subject to the
Security Interest granted to CRC as defined below and the rights of the Primary
Financier as a secured creditor). All rights herein of Producer are: (i)
irrevocable and not subject to rescission or termination for any reason or
cause, whatsoever; and (ii) freely assignable by Producer and its successors,
assigns and licensees, but no such assignment shall relieve Producer of its
obligations hereunder unless the assignee is a major studio, network, production
company or the SPE and the assignee assumes such obligations in writing, in
which case, the assignee shall be deemed substituted as a party to this
Agreement in place and stead of Producer; provided, however, that Producer shall
at times remain primarily liable for its obligations as set forth in Section 1
B(iii) of this Agreement notwithstanding any such assignment by Producer. CRC's
rights in the event of any breach of this Agreement are limited to claims for
money damages only proximately caused by such breach. CRC shall execute and
deliver to Producer or its designee(s) any written acknowledgements and
quitclaims reasonably required by Producer to confirm that CRC does not have any
ownership interest in or to the Picture, whatsoever.. The provisions of this
paragraph 2 shall survive any termination or other expiration of this Agreement.
 
3.  Warranties.
 
A.  CRC acknowledges, warrants, represents and agrees that: (a) CRC has received
sufficient information regarding the Picture from Producer and has had an
opportunity to speak with Producer as CRC deems necessary, to make an informed
decision regarding the providing of the Production Contribution herein; (b); CRC
is a sophisticated financier and is thoroughly familiar with the risks and
consequences of participating in the financing of motion pictures and is able to
bear the financial risk of the Picture being unprofitable for any reason; (c)
The funds tendered for the Production Contribution do not represent funds
borrowed from any person, entity or lending institution; (d) CRC is an
"accredited investor" under the rules and regulations of the Securities and
Exchange Commission, if applicable; and (e) Excepting only the remedy provided
to CRC under Section lB(iii) of this Agreement, CRC shall have no recourse other
than payment through the Collection Account for repayment of the Production
Contribution, Premium, and/or the Minimum Equity Interest.
 
B.  Producer. Producer acknowledges, warrants, represents and agrees that: (i)
Producer is in bona fide good faith negotiation for and will obtain written
minimum distribution guarantees (a) for North American distribution from
Grindstone in the amount of $500,000, and (b) for foreign distribution from CMG
in the amount of $450,000 and $200,000 from Lions Gate for Latin American, on or
before August 1, 2012 (the "Outside Date"); (ii) Producer shall obtain a
commercial loan from the Primary Financier for an amount not less than the
amount needed to fund the balance of the production budget of the Picture,
anticipated to be approximately $1,550,000, no later than the Outside Date;
(iii) filming on the Picture shall commence in accordance with the production
schedule approved by the Completion Guarantor or otherwise, by the Primary
Financier but in any event shall commence on or before September 1, 2012; (iv)
(a) all corporate action on the part of the Producer, its officers, directors
and stockholders necessary for the authorization of this Agreement, the
performance of all obligations of the Producer hereunder and thereunder and the
authorization, sale, issuance and delivery of the Minimum Equity Interest have
been taken, (b) this Agreement, when executed and delivered, will be valid and
legally binding obligations of the Producer enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights; and general principles of equity that restrict the
availability of equitable remedies, and (c) Producer's grant of the Minimum
Equity Interest to CRC is not and will not be subject to any preemptive rights
or rights of first refusal or conflicting rights that have not been properly
waived or complied with; and (v) the Producer shall properly and duly acquire
all required intellectual property rights to Produce the Picture and such
production of the Picture by Producer shall not constitute infringement of any
kind on any interest or rights of any person or entity.
 
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4.  Indemnity. Each party ("Indemnifying Party") hereby forever indemnifies,
defends and holds harmless the other party (and their respective successors,
licensees, assigns, and employees, officers and directors) [collectively for the
purposes of this paragraph 4, the "Indemnified Party"] from and against any and
all third party liability, claims, actions, causes of action, losses, costs,
expenses, damages, judgments, and settlements, including reasonable outside
attorney's fees ("Claims") arising out of any breach with respect to any
warranty, representation or agreement made hereunder by the Indemnifying Party.
The Indemnified Party has the right to assume the defense of any claim made by a
third party and arising from a breach or alleged breach of any representation,
warranty or agreement of Indemnifying Party hereunder or that otherwise may be
subject to the indemnity set forth herein.
 
5.  Insurance. Upon production of the Picture, Producer shall procure that the
SPE obtain all usual and customary production, errors and omissions and general
liability policies with respect to the Picture. Producer shall cause SPE to name
CRC as an additional insured party under such errors and omissions and general
liability policies, as and when obtained and subject to all terms and conditions
of such policies.
 
6.  Notices. All notices hereunder shall be in writing and shall be given either
by personal delivery, e-mail, or registered or certified mail postage prepaid
and shall be deemed given hereunder on the date delivered or faxed or on a date
two (2) business days after the date mailed. Until further notice, the addresses
of the parties shall be as follows:
 
To CRC:
At the address set forth above.
   
With a copy to:
Steven D. Frank, Esq.
     
LAW OFFICES OF STEVEN D. FRANK
 
The Meadows
 
161 Worcester Road, Suite 302
 
Framingham, MA 01701
 
Email: steven.frank@stevendfrank.com
   
To Producer:
8899 Beverly Boulevard,
 
Suite710,
 
Los Angeles, CA 90048
   
With a copy to:
Costa Abrams & Coate, LLP
 
1221 Second Street, Third Floor
 
Santa Monica, California  90401
 
Attn: Alan Abrams, Esq.
 
Email: aafilmlaw@aol.com

 
Financing Agreement v Final
 
 
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7.  Disputes. Any and all disputes arising between the parties under this
Agreement and/or arising from the relationship of the parties created by virtue
of this Agreement, including, without limitation, disputes involving
interpretation and/or performance of this Agreement, the rendition of services
under this Agreement, the subject matter of this Agreement, and/or the granting
of any rights and/or benefits under this Agreement (including, without
limitation, disputes involving the actual or purported right of any party to
terminate and/or rescind this Agreement for any reason or cause, whatsoever, as
well as the rights and obligations of the parties following any such purported
termination and/or rescission),shall all be solely and exclusively submitted to
final and binding arbitration ("Arbitration') in accordance with the arbitration
rules of the Independent Film & Television ("Rules"), before a single neutral
arbitrator experienced in matters involving the entertainment industry
determined in accordance with the Rules ("Arbitrator"), which Arbitration shall
be conducted in the county of Los Angeles, California, in accordance with such
Rules. Each party hereto irrevocably submits to the jurisdiction of such
Arbitrator in Arbitration, agrees to be bound by any final Arbitrator's Award
rendered pursuant to such Arbitration, provided the same has been confirmed by
the "Court" (as hereafter defined), and consents to the service process of any
demands for Arbitration, or other notices and documents pertaining to such
Arbitration and/or any confirmation proceedings described in the next paragraph,
by international courier and/or by personal delivery to the addresses set forth
in this Agreement.
 
Any award of the Arbitrator in connection with any such Arbitration may be
confirmed by any party hereto in any State or Federal court of competent
jurisdiction ("Court") sitting in the State of California and each party hereto
irrevocably agrees and consents to such jurisdiction of the Court for such
purpose. The prevailing party as determined by the Arbitrator shall be entitled
to an award of such prevailing party's reasonable attorneys' fees and costs of
Arbitration.
 
8.  Security Interest. As security for Producer's obligation to repay the
Production Contribution Amount and the Premium to CRC, and until such time as
the Production Contribution Amount and Premium have been paid to CRC, Producer
shall grant CRC a continuing security interest in and to the Picture including,
without limitation, all copyrights therein and thereto (including all renewals
and extensions thereof), and all development, production, distribution and
exploitation rights in any and all media now known or hereafter devised or
improved (the "Security Interest"). The Security Interest shall be subordinate
to only the security interest in the Picture granted to Producer's Primary
Financier(s) and the completion guarantor and CRC shall execute such
subordination and standstill agreements required by such Primary Financier(s)
and the completion guarantor. Producer shall execute and deliver to CRC the
Security Agreement attached hereto.
 
Financing Agreement v Final
 
 
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9.  General. This Agreement contains the full, complete and entire understanding
of the parties hereto with respect to the within subject matter and this
Agreement supersedes all prior representations, agreements and understandings,
whether written or oral, pertaining thereto and cannot be modified except by
written instruments signed by each party. All of Producer's rights hereunder are
freely assignable, provided no such assignment shall relieve Producer of its
obligations hereunder, except to the extent this agreement is assigned to the
SPE, and the SPE assumes the obligations of Producer hereunder, provided,
further, notwithstanding any such assignment to and assumption by the SPE,
Producer shall nevertheless remain responsible for performance of its
obligations under paragraph 1 B (iii) hereof. Each party acknowledges that no
representations or promises not expressly contained in this Agreement have been
made to the other. CRC's remedies in the event of a breach by Producer shall be
limited to an action at law for damages and in no event shall CRC (or any party
claiming through CRC) be entitled to rescind this Agreement or enjoin or
otherwise interfere with the development, production, marketing, distribution
and/or exploitation of the Picture. Producer may prepare and, subject to good
faith negotiations, require execution of a more formal agreement incorporating
the foregoing and other customary terms and conditions common in the
entertainment industry and consistent with the express terms of this Agreement,
but pending execution of such a more formal agreement, this Agreement shall be
binding upon the parties and the successors and assigns thereof. The parties
hereby agree that California law shall govern the terms, conditions, performance
and interpretation of this Agreement. If any provision of this Agreement is
adjudged to be unlawful, then such provision shall be deemed limited or
curtailed (but only to the extent necessary to bring it within legal
requirements) and the remainder of this Agreement shall remain in full force and
effect. The parties have agreed that this Agreement may be executed and
delivered to each other via telefacsimile and/or email, and in counter-parts.
Accordingly, reproductions of original signatures by any reliable means shall be
given the same legal weight and effect as original signatures.
 
Kindly confirm your Agreement to the foregoing by signing in the appropriate
place below.
 
Very truly yours,
 
Mass ent Company, Inc.. ('Producer")
 
By: 
   
lts:
         
Agreed to and Accepted:
 
Coral Ridge Capital Partners, LLC
        [f10q0512_masshysteria1.jpg]     Attachments         Schedule 1 -
Picture Specifications  

 
Financing Agreement v Final
 
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