The following letter is posted because of its relevance to the current legal battle between Craig Valentine and Rebecca Hilton. Uncle Lanny writes the following to Arnold Stein, Hilton’s distributor, who basically convinced her that Valentine was cheating her in a deal.

Dear Arnold:

As you are more than aware, Trampas LLC / Old Pueblo Distribution (“Trampas”) has failed to meet its accounting and payment obligations to Yes Dude LLC (Yes Dude), under the Distribution Agreement dated April 29, 2004 (the “Distribution Agreement”). Consequently, this is formal notice that Yes Dude is terminating the Distribution Agreement, effective immediately.

While I have in good faith advised you many, many times of Trampas’ numerous, repeated and uncured breaches of the Distribution Agreement – with you representing each and every time that you would cure them – you have failed to do so or even made an attempt to cure them.

Again, while you are more than familiar with the underlying facts, Trampas’ breaches include, among numerous others:

>Pursuant to paragraph 15 of the April 29, 2004 Distribution Agreement, you have failed to provide the weekly accounting of sales transactions, to include accounts payable and receivable reports

>Additionally, Trampas / Old Pueblo Distribution has failed to disperse net revenue to Yes Dude as required by Paragraph 17 of the parties contract;

>Further, Trampas has improperly and fraudulently exceeded its rights under the Distribution Agreement and converted Yes Dude property by attempting to market Yes Dude Titles to the VOD and international markets, including but not limited to attempting to market (and in some cases actually marketed) Yes Dude Titles to: HotMovies.com, Adult Rental.com, Amore TV.com, Gamelink.com, and numerous others.

Based upon its breaches of the Distribution Agreement, Trampas is no longer authorized to distribute, copy, use or retain any Yes Dude DVDs or Yes Dude / Uncle Lanny Productions content in any way, shape or form.

Accordingly, Yes Dude demands that: (1)Trampas immediately cease, desist and refrain from any further marketing, licensing, or sale of Yes Dude movies and content; (2)Trampas provide Yes Dude with an accounting of all monies under the Distribution Agreement, in a manner to be received by Yes Dude on or before April 30, 2006; (3) Trampas ship, at its own expense, all DVDs and copies of Yes Dude movies, in any form, back to Yes Dude, in such a manner as to be received by Yes Dude on or before April 30, 2006; and (4) remit all sums owed to Yes Dude, in certified funds, in a manner to be received by Yes Dude on or before April 30, 2006.

Absent your co-operation, Yes Dude will have no alternative other than to seek any and all remedies available to it under the law.

Very truly yours, Lanny Mitchell, Vice President, Yes Dude LLC