Professional Documents
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Amended Complaint Against NCDNCR & The Friends of Queen Anne's Revenge by Intersal
Amended Complaint Against NCDNCR & The Friends of Queen Anne's Revenge by Intersal
WAKE COUNTY
Intersal, Inc.,
Plaintiff,
v.
Plaintiff, by and through the undersigned counsel, moves the Court, pursuant to Rule 15 of
the North Carolina Rules of Civil Procedure, for leave to file its First Amended Complaint. In
support hereof, Plaintiff shows the Court the following:
1.
2.
3.
4.
Subsequent to the filing of this action, the North Carolina General Assembly
enacted, Session Law 2015-218 on August 11, 2015, the same being signed by the Governor on
August 18, 2015.
5.
Defendants filed their Answer on October 7, 2015, raising allegedly public policy
issues in part precipitated by the enactment of SECTION 4.(a) of Session Law 2015-218.
7.
The Joint Case Management Report was submitted to the Court on October 26,
8.
Rule 15 provides that leave [to amend a complaint] shall be freely given when
2015.
justice so requires.
9.
leave to amend and no prejudice that can be demonstrated that would result from grant of such
leave. Madry v. Madry, 106 N.C.App. 34, 415 S.E.2d 74 (1992).
10.
justifications: (1) undue delay; (2) bad faith or dilatory tactics; (3) undue prejudice; (4) futility of
amendment; and (5) repeated failure to cure defects by previous amendments. Isenhour v.
Universal Underwriters Ins. Co., 345 N.C. 151, 478 S.E.2d 197 (1996) (motion for leave to amend
denied after more than five years from filing of the original complaint); Smith v. McRary, 306 N.C.
664, 295 S.E.2d 444 (1982) (no error in denying motion to amend when facts sought to be added
were irrelevant to the cause and denial created no prejudice); United Leasing Corp. v. Miller, 60
N.C. App. 40, 298 S.E. 2d 409 (1982) (denying plaintiffs right to amend to add a new claim for
relief on the date of defendants motion to dismiss after completed discovery when trial was only
one month away).
11.
12.
13.
The amendment will have no effect on the timely disposition of this matter.
15.
16.
Plaintiff.
WHEREFORE, the Plaintiff respectfully requests that the Court grant the Plaintiff Leave
to file its First Amended Complaint as set forth on Exhibit A, pursuant to Rule 15 of the North
Carolina Rules of Civil Procedure.
This the 2nd day of November, 2015.
/s/______________________________
David H. Harris, Jr.
State Bar No. 9841
Linck Harris Law Group, PLLC
2530 Meridian Parkway, Suite 300
Durham, North Carolina 27713
919-806-4220
866-274-0756 (Fax)
[email protected]
Counsel for Plaintiff
EXHIBIT 1
NORTH CAROLINA
WAKE COUNTY
Intersal, Inc.,
Plaintiff,
v.
Defendants.
AMEND
INTRODUCTION
1.
and civil conspiracy, as well as constitutional claims precipitated by Legislative action taken and
arguments already raised by Defendants. Intersal is seeking declaratory and injunctive relief and
damages. All Exhibits to this Complaint are incorporated herein by reference as if fully set out.
JURISDICTION AND VENUE
2.
The Court has jurisdiction over the subject matter of this action pursuant to, inter
The Court has jurisdiction over the persons of Defendants pursuant to one or more
Venue lies in the Court pursuant to N.C. Gen. Stat. 1-82 and 7A-45.4(b).
PARTIES
PLAINTIFF
5.
existing pursuant to the laws of the State of Florida and is duly registered in North Carolina.
STATE DEFENDANTS
6.
America and, as such, is subject to the Constitution of the United States and the Constitution of
North Carolina. References to the State, as the context requires, include actions by the North
Carolina General Assembly and the Governor.
9.
Susan Kluttz, DNCR and the State of North Carolina, shall hereinafter be
corporation duly organized and existing pursuant to the laws of the State of North Carolina.
Pursuant Session Law 2015-241, SECTION 14.30.(a), ratified and approved on September 18, 2015, the North
Carolina Department of Cultural Resources was renamed the North Carolina Department of Natural and Cultural
Resources.
11.
officers, employees, agents, attorneys and contractors pursuant to the doctrine of Respondeat
Superior.
NON-PARTIES
12.
organized and existing pursuant to the laws of the State of North Carolina. Rick Allen is the Owner
of Nautilus.
FACTUAL ALLEGATIONS
13.
corporation.
14.
On November 21, 1996, operating under a valid search permit (96BUI585) issued
then-president, Philip Masters, as well as trade secret survey data and other information gathered
and developed by Intersal.
16.
Rather than immediately securing its rightful claim to three-quarters of any QAR
treasure found as specified in Intersals QAR search permit, or file an In Rem action in federal
court in Admiralty, Intersal, being more interested in exclusive possession QAR Project 2 media
and replica rights and continued renewal of the El Salvador search permit (DCR BUI584), Intersal
The term "Project" or QAR Project or project refers all survey, documentation, recovery, preservation,
conservation, interpretation and exhibition activities related to any portion of the shipwreck of QAR or its artifacts.
negotiated with the State Defendants, and, on September 1, 1998, twenty (20) months after the
initial discovery of QAR, executed an Agreement with the State Defendants (hereinafter referred
to as the 1998 Agreement). Exhibit 1, pp. 11-23.
17.
The 1998 Agreement, inter alia, granted Intersal the commercial rights to:
A.
Partner in all aspects of the QAR Project, including oversight and exhibition
activities;
B.
of Intersals choosing (each of these replicas must be numbered as part of a limited edition);
and
C.
to its share of any coins and precious metals recovered from the QAR site so that all QAR artifacts
remain as one intact collection, and to permit DNCR to determine ultimate disposition of the
artifacts.
19.
Also, in the 1998 Agreement, DNCR stated its belief that Intersals efforts
connected to QAR and El Salvador are of benefit to the historical heritage of the State, and
recognized Intersals efforts and participation in the QAR Project as sufficient to satisfy any
performance requirements associated with annual renewal of Intersals El Salvador search permit
(DCR BUI584), and for the life of this agreement, renewal of said permits cannot be denied
without just cause. 1998 Agreement, 33.
20.
Intersal shall have the exclusive right to make and market all commercial
narrative (written, film, CD Rom, and/or video) accounts of Project related
activities undertaken by the Parties.All Parties agree to cooperate in the making
of a non commercial educational video and/or film documentary, or series of such
documentaries, as long as there is no broadcast originating outside of North
Carolina, and there is no distribution or dissemination for sale of the said
educational documentary without Intersals written permission. Intersal shall
have the exclusive rights to make (or have made) molds or otherwise reproduce (or
have reproduced) any QAR artifacts of its choosing for the purpose of marketing
exact or miniature replicas.
21.
In 2004, the QAR became a federally protected site when it was listed on the
Agreement, exercised in writing to DNCR by QAR Project 1998 Agreement partners, via letters
dated 10/28/12 and 12/4/12, respectively, and was amended at least once (Exhibit 1, pp. 24-25).
23.
For more than a decade, Nautilus and Intersal have maintained a contractual
relationship in which Nautilus acts as Intersals QAR Video Designee, for both the 1998
Agreement and the QAR Settlement Agreement. Nautilus performs this service on a volunteer
basis, and receives no remuneration from Intersal. Nautilus Productions owns all the digital media
and the copyright to the footage it shoots as Intersals QAR Video Designee. Intersal receives 25%
of gross proceeds from Nautilus licensing of QAR footage gathered while serving as Intersals
QAR Video Designee. By definition, Nautilus is an independent contractor, not a subsidiary or
joint partner with Intersal in the QAR Project.
24.
limitation:
A.
B.
employees with specific responsibility for oversight of QAR Project and Intersals El
Salvador search permit (DCR BUI584), by serving on the FoQAR board of directors,
including the FoQAR Treasurer, whose spouse received ten thousand dollars ($10,000)
from FoQAR as part of a contract with an independent media company, which was
executed by the FoQAR board (1998 Agreement 23);
C.
procedure, by the same DNCR employees with specific oversight responsibility referenced
in subparagraph B above, concerning permit renewal process for Intersals El Salvador
search permit (DCR BUI584), which renewal was referenced in and affected by provisions
of the 1998 Agreement, 33; and
D.
On July 26, 2013, Intersal filed Petition for a Contested Case, with the North
27.
OAH ordered mediation in the matter. DOJ represented DNCR during negotiations.
28.
among Intersal and DNCR, as well as Rick Allen and Nautilus (collectively, Nautilus), 3 relating,
inter alia, to media rights arising out of the discovery of QAR (QAR Settlement Agreement).
Exhibit 1, pp. 1-10. 4
29.
30.
supersedes the 1998 Agreement, attached as Attachment A, and all prior agreements between
DCR, Intersal, and Nautilus regarding the QAR Project.
31.
However, the QAR Settlement Agreement make does not repeat provisions related
to title to QAR, such as 14 of the 1998 Agreement, which states: Subject to their rights under
this Agreement, Intersal and MRI hereby assign to the Department, and the Department hereby
accepts, on behalf of the People of North Carolina, the interests of Intersal and MRI in the title and
ownership of QAR and its artifacts.
32.
Procedure.
1)
DCR agrees to establish and maintain access to a website for
the issuance of Media and Access Passes to QAR-Project related artifacts
and activities.
2)
DCR shall manage the issuance of Media and Access Passes
after receiving access requests from third parties via the website.
3)
The website shall be the primary means of access for
requests, and shall include, at a minimum:
Rick Allen and Nautilus was brought into the negotiations at the request of DOJ.
One of the terms of the QAR Settlement Agreement was the voluntary dismissal of Intersals contested case Intersal
v. N.C. Dept of Cultural Resources, 13DCR15732.
(a)
An Intersal terms of use agreement, to be
electronically submitted;
(b)
(c)
websites.
4)
Upon electronic submission of requests and terms of use, if
applicable, electronic notice shall be sent to DCR and Intersal or its designee
showing acceptance or nonacceptance of the terms of use.
5)
Intersal shall bear the sole responsibility for managing and
enforcing its terms of use.
6)
For requests for access that are not received through the
website, DCR shall provide the requestor with substantially the same
information contained on the website.
b.
Non-commercial Media.
1)
All non-commercial digital media, regardless of producing
entity, shall bear a time code stamp, and watermark (or bug) of Nautilus
and/or DCR, as well as a link to DCR, Intersal, and Nautilus websites, to be
clearly and visibly displayed at the bottom of any web page on which the
digital media is being displayed.
2)
DCR agrees to display non-commercial digital media only
on DCRs website.
...
32.
Effect of Breach of Agreement. In the event DCR, Intersal, or Nautilus
breaches this Agreement, DCR, Intersal, or Nautilus may avail themselves of all
remedies provided by law or equity.
33.
Despite the new QAR Settlement Agreement and prior agreements, the State
Defendants continued and continues to violate the QAR Settlement Agreement and Intersals
intellectual property rights. A summary of significant violations include:
A.
Displaying over two thousand (2,000) QAR digital media images (including
thirty (30) images taken and improperly copyright claimed by Special Deputy Attorney
General Karen Blum, the DOJ counsel who represented DNCR during mediation) and over
two hundred (200) minutes of QAR digital media video on websites other than DNCRs
own website, without watermark and/or without time code stamp, or website links, in
violation of QAR Settlement Agreement, 16.b.2 and 16.b.1, respectively;
B.
procedure concerning permit renewal process and special conditions for Intersals El
Salvador search permit (DCR BUI584) (by the same state employees mentioned in
subparagraphs 24 B and C above), which process is specifically referenced in and affected
by provisions of the QAR Settlement Agreement, 3;
C.
including changes to QAR Project media policy ( 16.a) and the QAR Project Business
panel ( 19, 6,8);
D.
Agreement partners, contractors and members of the press of QAR Project activities and
opportunities covered under the collaborative commercial narrative opportunity and/or
media procedure language of the QAR Settlement Agreement, 15, 16;
E.
for, and restrictions on the participation of Intersals QAR Project Video Designee Nautilus
in 2014 and 2015 QAR recovery operations, which were not required of or imposed on all
other non-DNCR employees, volunteers, etc.;
G.
rights, by DNCR allowing FoQAR filming of QAR recovery operations via independent
media company Zion Consulting Group on September 14, 2015 (without completing
existing QAR commercial narrative request form or giving Nautilus its right of first
refusal, QAR Settlement Agreement, 20), footage from which was posted to Facebook
by FoQAR on October 28, 2015 without time code stamp, watermark or website links,
despite FoQAR board members being aware of the provisions of the QAR Settlement
Agreement, which actions represent clear tortious interference with contractual relations
by FoQAR, and directly conflict with Intersals QAR Settlement Agreement collaborative
media rights and/or provisions for dissemination of QAR digital media for commercial use
documentaries, QAR Settlement Agreement 15, 16.b.2 and 16.b.1, respectively;
H.
media policy, via DNCR allowing FoQAR to bring Raeford Brown and crew, from the talk
radio show Live and Local with Raeford and Friends) to dive the QAR shipwreck shoot
footage aboard the 2015 QAR recovery vessel on September 9, 2015, upon information and
belief, without disseminating the Intersal terms of service document or advising said Press
representatives of changes to the QAR media policy found in the QAR Settlement
Agreement ( 16); and
I.
Agreement before and after receipt of Intersals Demand Letter dated September 23, 2014,
which when added to the major violations listed above and herein, represent a continued
pattern of egregious, retaliatory and discriminatory agency action against Intersal, and a
continued attempt to deny Intersal rightful access to QAR Project revenue streams and
10
On March 2, 2015, Intersal filed a second Petition for a Contested Case, with the
North Carolina Office of Administrative Hearings (OAH), Intersal v. N.C. Dept of Cultural
Resources, 15DCR 016102, seeking a remedy to the State Defendants violations of the QAR
Settlement Agreement and violations of Intersals contractual and intellectual property rights.
35.
After DOJ moved to dismiss, alleging lack of OAH subject matter jurisdiction to
hear contractual claims, an allegation not raised in the earlier OAH Petition, making clear that DOJ
was more interested in making case law than resolving the issue, Intersal dismissed the Petition
without prejudice on May 26, 2015 and proceeded to prepare to file this present action.
ILLEGALITY BY THE NORTH CAROLINA GENERAL ASSEMBLY
36.
Subsequent to the initial filing of this action, the North Carolina General Assembly,
upon information and belief, at the behest of Defendants, enacted Session Law 2015-218 on
August 11, 2015, the same being signed by the Governor on August 18, 2015.
37.
SECTION 4.(a) of Session Law 2015-218, inter alia, amends N.C. Gen. Stat. 121-
11
38.
This provision was added on July 23, 2015, after Intersal dismissed its second OAH
Petition, and after Intersal made clear that it was planning to take this matter to Superior Court or
federal court. It is clear that the State Defendants, by this amendment, intended to deprive Intersal
of any legal remedy for breaching of two contracts.
FURTHER ACTS OF RETALIATION
39.
DNCR, through its Office of State Archaeology (OSA) violated the QAR
The existing permit language retained per the QAR Settlement Agreement (which
language originated in the 1998 Agreement) insures that Intersals continued efforts connected to
the QAR Project remain sufficient to satisfy any performance requirements associated with renewal
of the El Salvador search permit (BUI584). Intersal has been a contributing QAR Project partner
without pause since 1998, and DNCR has issued BUI584 permit renewals to Intersal based on this
existing permit language since 1998.
41.
In 2013 and 2014, OSA failed to follow proper and established procedure connected
November 2014, OSA sent Intersal a renewal of the El Salvador permit (14BUI584) containing
12
specific language that immediately follows, directly contradicts and subverts the letter and spirit
of the existing permit language retained as a requirement of the QAR Settlement Agreement.
43.
DNCR rejected Intersals request that the offending language be removed from the
renewal document.
44.
These actions are part of the continuing pattern of DNCR contract violations and
On October 20, 2015, OSA sent a letter to Intersal, seeking to suddenly impose
upon Intersal requirements and standards that DNCR does not now, nor has ever followed or
imposed upon itself.
46.
This letter is part of the continuing pattern of DNCR retaliatory behavior towards
In further acts of retaliation, Intersal has not been formally approved of the pending
Intersal has been informed and discussed the operation with DNCR, but has not
All actions taken by Defendants were taken with the clear intent to deprive Intersal
is its of its contractual rights (including media rights), commercial opportunities, income, revenue
streams, commercial narrative opportunities (including a percentage of planned admission fees for
public viewing of QAR artifacts), and ancillary proceeds from related activities, and to remove
Intersal from the QAR Project, in favor of third parties, including, without limitation, FoQAR.
13
50.
Intersal, upon information and belief, has been damaged in the amount of at least
Defendants Kluttz and DNCR are authorized officer and agency of the State of
North Carolina.
52.
The 1998 Agreement and the QAR Settlement Agreement are purportedly valid
contracts between Intersal and DNCR, authorized by the duly authorized officer and agency of the
State of North Carolina.
53.
[W]henever the State of North Carolina, through its authorized officers and
agencies, enters into a valid contract, the State implicitly consents to be sued for damages on the
contract in the event it breaches the contract. Smith v. State, 289 N.C. 303, 320, 222 S.E.2d 412,
423-24 (1976).
54.
Sovereign immunity is also waived with respect to the constitutional and federal
56.
The 1998 Agreement and the QAR Settlement Agreement each create an obligation
14
58.
The enactment of Session Law 2015-218, SECTION 4.(a) by the General Assembly
impairs the States obligation of contracts by attempting to render ineffective those sections of the
1998 Agreement and the QAR Settlement Agreement relating to Intersals contractual rights.
59.
The States action of attempting to render ineffective those sections of the 1998
Agreement and the QAR Settlement Agreement relating to Intersals contractual rights is an
impairment that was not reasonable or necessary to serve any important public purpose.
60.
The 1998 Agreement and the QAR Settlement Agreement each create enforceable
contract rights in Intersal that the State seeks to unconstitutionally abrogate by the enactment of
Session Law 2015-218, SECTION 4.(a).
61.
The States action of attempting to render ineffective those sections of the 1998
Agreement and the QAR Settlement Agreement relating to Intersals contractual rights, by the
enactment of Session Law 2015-218, SECTION 4.(a), is unconstitutional as a violation of the
Contracts Clause of the United States Constitution.
SECOND CLAIM FOR RELIEF AS TO THE STATE DEFENDANTS VIOLATION
OF THE BILL OF ATTAINDER PROHIBITION
Article I, Section 10 of the United States Constitution
62.
63.
Article I, Section 10 of the United States Constitution prohibits the State from
enacting bills of attainder, defined as bills of pains and penalties which are legislative acts inflicting
punishment on a person without a trial, and serves as a general safeguard against legislative
exercise of the judicial function, or more simply trial by legislature.
65.
The bill of attainder prohibition also protects private corporations, such as Intersal.
15
66.
Session Law 2015-218, SECTION 4.(a) is a Bill of Attainder in that it singles out
Intersal for punishment without a trial, by attempting to abrogate Intersals contractual rights
circumventing the judiciary.
67.
69.
nor shall private property be taken for public use, without just compensation.
70.
No person shall be . . . in any manner deprived of his life, liberty, or property, but by the law of
the land.
72.
The execution of the 1998 Agreement and the QAR Settlement Agreement, gives
The Takings Clause of the Fifth Amendment of the United States Constitution,
incorporated to the State by the Fourteenth Amendment of the United States Constitution, and the
Law of the Land Clause of the North Carolina Constitution require that Intersals property,
contractual and liberty rights created by the 1998 Agreement and the QAR Settlement Agreement
cannot be taken without a public purpose and without just compensation.
16
74.
Session Law 2015-218, SECTION 4.(a), on its face, violates the Federal and State
Constitutions, as it fails to state a public purpose for attempting to render ineffective those sections
of the 1998 Agreement and the QAR Settlement Agreement relating to Intersals contractual rights.
75.
Session Law 2015-218, SECTION 4.(a) violates the Federal and State Constitutions
in that it fails to specify the just compensation to be paid to Intersal for the loss of those sections
of the 1998 Agreement and the QAR Settlement Agreement relating to Intersals contractual rights
or specify any procedure for the determination of just compensation. Session Law 2015-218,
SECTION 4.(a) bypasses all statutory mechanisms and simply abrogates those sections of the 1998
Agreement and the QAR Settlement Agreement relating to Intersals contractual rights, thereby
taking property without just compensation.
76.
Session Law 2015-218, SECTION 4.(a) fails to state a public purpose for the
77.
There is no public purpose for the taking required by Session Law 2015-218,
taking.
SECTION 4.(a).
78.
Takings Clause of the Fifth Amendment of the United States Constitution, incorporated to the
State by the Fourteenth Amendment of the United States Constitution, and the Law of the Land
Clause of the North Carolina Constitution, to the extent that it abrogates Intersals contractual
rights created by the 1998 Agreement and the QAR Settlement Agreement.
FOURTH CLAIM FOR RELIEF AS TO STATE DEFENDANTS DENIAL OF DUE
PROCESS
Amendments XIV of the United States Constitution
Article I, Section 19 of the Constitution of North Carolina
79.
17
80.
Amendment XIV of the Constitution of the United States provides in pertinent part
nor shall any State deprive any person of life, liberty, or property, without due process of law . .
. .
81.
No person shall be . . . in any manner deprived of his life, liberty, or property, but by the law of
the land.
82.
Intersal was never given notice of Session Law 2015-218, SECTION 4.(a) relating
determine judicially, with right of appeal, whether those sections of the 1998 Agreement and the
QAR Settlement Agreement relating to Intersals contractual rights and should be declared void.
84.
No public hearings were held with respect to Session Law 2015-218, SECTION
4.(a), to provide Intersal with any opportunity to debate whether those sections of the 1998
Agreement and the QAR Settlement Agreement relating to Intersals contractual rights should be
voided, for what reasons, and/or any just compensation to Intersal for its loss that it bargained for
by giving up other rights relating to the QAR and the loss of its investment in time, energy and
funds, and the future loss associated with the lost contractual rights.
85.
of due process as encapsulated in the Fourteenth Amendment of the United States Constitution
and the Law of the Land Clause of the North Carolina Constitution, to the extent that it abrogates
Intersals contractual rights created by the 1998 Agreement and the QAR Settlement Agreement.
18
87.
executive, and supreme judicial powers of the State government shall be forever separate and
distinct from each other.
88.
89.
To any extent that the State alleges any justification for by attempting to abrogate
those sections of the 1998 Agreement and the QAR Settlement Agreement relating to Intersals
contractual rights, the General Assembly violated the State Constitution by acting as its own
judiciary and attempting to deprive the courts of the opportunity to resolve the dispute.
90.
separation of powers clauses of the North Carolina Constitution, to the extent that it abrogates
Intersals contractual rights created by the 1998 Agreement and the QAR Settlement Agreement.
SIXTH CLAIM FOR RELIEF AS TO THE STATE DEFENDANTS BREACH OF
CONTRACT
91.
92.
The 1998 Agreement and the QAR Settlement Agreement constitutes valid
contracts between Intersal and the State Defendants, an authorized officer and agency of the State
of North Carolina.
19
93.
The State Defendants actions described above constitute several breaches of the
Intersal has been monetarily damaged by the State Defendants breach of contract.
95.
97.
In the alternative, to the extent that all or part of the 1998 Agreement and/or the
QAR Settlement Agreement are declared unenforceable, to prevent unjust enrichment, Intersal is
entitled to recover in quantum meruit on an implied contract theory for the reasonable value of
services rendered to and accepted by Defendants.
98.
100.
State Defendants actions, as described above, constitute fraud in that: (1) the State
made several material misrepresentations of a past or existing facts; (2) the misrepresentations
were be definite and specific; (3) the misrepresentations were made with knowledge of their falsity
or in culpable ignorance of their truth; (4) the misrepresentations were made with intention that
they should be acted upon; (5) Intersal, as the recipient of the misrepresentations, reasonably relied
upon them and acted upon them; and (6) the misrepresentations resulted in damage to Intersal.
101.
Specifically, the State Defendants TWICE negotiated agreements with Intersal, the
1998 Agreement and the QAR Settlement Agreement, providing contractual rights to Intersal. Now
20
the State Defendants are opining that said provisions are void as against public policy. While
Session Laws 2015-218, SECTION 4.(a) has only been recently enacted, the State Defendants are
also opining that Chapter 132 of the North Carolina General Statutes prohibit enforcement of
Intersals contractual rights created by the aforesaid agreements.
102.
Defendants knew or should have known this fact, but engaged in allegedly arms length two
agreements with Intersal.
103.
104.
106.
Every contract or agreement, including the 1998 Agreement and/or the QAR
Settlement Agreement, implies good faith and fair dealing between the parties to it, and a duty of
cooperation on the part of both parties.
107.
The facts shown above, and as will be shown through discovery and trial, show that
the State Defendants breached their duty of good faith and fair dealing.
108.
109.
21
111.
The State has acted inequitably and with unclean hands in that it committed various
acts inconsistent with or in breach of the spirit and letter of the 1998 Agreement and the QAR
Settlement Agreement, erected obstacles to the QAR Project implementation and documentation,
interfered with Intersals rights and/or obligations to be shown through discovery and at trial.
112.
The State Defendants unclean hands bars any equitable claim or defense the State
114.
The collective and separate actions of the State Defendants as noted above,
Intersal is entitled to damages from the State Defendants, jointly and severally, in
117.
contractual relations.
118.
FoQARs actions were fraudulent, willful, wanton and malicious, and in total
22
121.
123.
The wrongful acts complained of above were agreed upon by Defendants and
126.
127.
Defendants are jointly and severally liable to Intersal in an amount greater than
FoQARs actions were fraudulent, willful, wanton and malicious, and in total
132.
violation of the Contract Clause of the United States Constitution to the extent that it
abrogates Intersals contractual rights created by the 1998 Agreement and the QAR
Settlement Agreement;
B.
of Attainder, to the extent that it abrogates Intersals contractual rights created by the 1998
Agreement and the QAR Settlement Agreement;
C.
violation of the Takings Clause of the Fifth Amendment of the United States Constitution,
incorporated to the State by the Fourteenth Amendment of the United States Constitution,
and the Law of the Land Clause of the North Carolina Constitution, to the extent that it
abrogates Intersals contractual rights created by the 1998 Agreement and the QAR
Settlement Agreement;
D.
violation of the separation of powers clauses of the North Carolina Constitution, to the
extent that it abrogates Intersals contractual rights created by the 1998 Agreement and the
QAR Settlement Agreement;
24
F.
Declare Chapters 121 and 132 of the North Carolina General Statutes, to the
extent that said provisions abrogate Intersals contractual rights created by the 1998
Agreement and the QAR Settlement Agreement, unenforceable;
G.
In the alternative, declare that the QAR Settlement Agreement is void and
In the alternative, declare that both the 1998 Agreement and the QAR
Settlement Agreement are void, and as such, based on Fla. Dept of State v. Treasure
Salvors, 458 U.S. 670, 102 S.Ct. 3304 (1982), title to the QAR is vested in Intersal;
I.
executive agency of the State and violates Intersals intellectual property rights;
J.
134.
Defendants continue to violate the 1998 Agreement and the QAR Settlement
Agreement.
135.
Intersal has no adequate remedy at law; monetary damages are incapable of fully
compensating Intersal for the losses incurred from DNCRs continued violations of the QAR
Settlement Agreement.
136.
Thus, in the absence of immediate action, imminent and irreparable harm will be
25
137.
For the foregoing reasons, Intersal requests that this Court enter a temporary
restraining order, preliminary injunction, and permanent injunction enjoining DNCR from further
violation of the QAR Settlement Agreement and further recovery of artifacts from the QAR site.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff respectfully requests the Court to enter Judgment as follows:
1.
2.
Enter Declaratory Judgment as prayed for in the Fourteenth Claim for Relief;
3.
injunction enjoining Defendants from further violation of the Intersals contractual rights, as
specified in the 1998 Agreement and the QAR Settlement Agreement and further recovery of
artifacts from the QAR site;
4.
Enter an order directing Defendants to renew the El Salvador permit without the
Award to Intersal its cost, expenses, and fees, including reasonable attorneys fees,
8.
Grant such other and further relief as the Court deems just and proper.
MOTION FOR RULE 65 RELIEF
1.
26
2.
rights, as specified in the 1998 Agreement and the QAR Settlement Agreement.
3.
Intersal has no adequate remedy at law; monetary damages are incapable of fully
compensating Intersal for the losses incurred from Defendants continued violations of the QAR
Settlement Agreement.
4.
Thus, in the absence of immediate action, imminent and irreparable harm will be
For the foregoing reasons, Intersal requests that this Court enter a temporary
restraining order, preliminary injunction, and permanent injunction enjoining Defendants from
further violation of Intersals contractual rights, as specified in the 1998 Agreement and the QAR
Settlement Agreement, and further recovery of artifacts from the QAR site.
This the ______ day of November 2015.
______________________________
David H. Harris, Jr.
Counsel for Plaintiff
State Bar No. 9841
Linck Harris Law Group, PLLC
2530 Meridian Parkway, Suite 300
Durham, North Carolina 27713
919-806-4220
866-274-0756 (Fax)
[email protected]
27
NORTH CAROLINA
WAKE COUNTY
Intersal, Inc.,
Plaintiff,
v.
CORPORATE AFFIDAVIT
incorporated in and validly existing pursuant to the laws of the State of Florida and duly registered
as a foreign corporation with the North Carolina Secretary of State.
2.
3.
I have read the foregoing First Amended Complaint and know the contents thereof.
4.
The allegations set forth in the First Amended Complaint are true and of my own
knowledge, except for those allegations set forth upon information and belief, and as to those
allegations, I believe them to be true.
28
______________________________
John Masters
Signed and sworn to before me this day by John Masters.
Date: __________________
______________________________
Notary Public
(Official Seal)
______________________________
Notary Publics Printed Name
My commission expires: ___________________
29
EXHIBIT 1
Settlement Agreement
This Settlement Agreement, made this the 15th day of October, 2013, by and between the North
Carolina Department of Cultural Resources (DCR), Intersal, Inc. (Intersal), and Rick Allen and Nautilus
Productions, LLC (collectively, Nautilus):
WHEREAS, Intersal, a private research firm, operating under a valid permit issued to it by DCR,
discovered the site believed to be Queen Annes Revenge (QAR) on 21 November 1996. QAR was
located near Beaufort Inlet, North Carolina, by Intersals director of operations, Michael E. Daniel, who
used historical research provided by Intersals president, Phil Masters. Daniel now heads up Maritime
Research Institute (MRI), the non-profit corporation formed to work on the project in cooperation with
State archaeologists and historians of the North Carolina Department of Cultural Resources, Office of
Archives and History; and
WHEREAS, DCR, MRI, and Intersal previously executed a Memorandum of Agreement on 1
September 1998 (1998 Agreement); and
WHEREAS, as a result of the 1998 Agreement, Intersal and Michael E. Daniel agreed to forego
entitlement to their share of any coins and precious metals recovered from the QAR site in order that all
QAR artifacts remain as one intact collection, and in order to permit DCR to determine ultimate
disposition of the artifacts;
WHEREAS, Nautilus has been filming underwater and other footage of the QAR project for
approximately fifteen (15) years as the projects videographer;
WHEREAS, various disputes and uncertainties have arisen between DCR, Intersal, and Nautilus
regarding the terms of the 1998 Agreement and related issues; and
WHEREAS, Intersal and DCR currently are in administrative appeal litigation regarding the terms
of the 1998 Agreement, and desire to fully settle such litigation and related issues; and
WHEREAS, DCR, Intersal, and Nautilus desire to resolve fully their differences and continue their
mutual efforts to promote the history of Blackbeard the Pirate, and continue the archaeological recovery
and conservation of his flagship, the Queen Annes Revenge (QAR).
NOW, THEREFORE, DCR, Intersal, and Nautilus contract, settle and agree as follows:
I. GENERAL
1.
Prior Agreements. This Agreement supersedes the 1998 Agreement, attached as Attachment
A, and all prior agreements between DCR, Intersal, and Nautilus regarding the QAR project.
2.
No Admission of Liability. DCR, Intersal, and Nautilus mutually agree that this Agreement is
entered into for the purpose of compromising all disputed claims, grievances, or allegations, and is
not to be construed as an admission by DCR, Intersal, or Nautilus regarding the merit or lack of
merit of DCRs, Intersals, or Nautiluss contentions, nor an admission of any wrongdoing by the
same.
II. EL SALVADOR PERMIT
3.
El Salvador Permit. In consideration for Intersals significant contributions toward the discovery
of the QAR and continued cooperation and participation in the recovery, conservation, and
promotion of the QAR, DCR agrees to continue to issue to Intersal an exploration and recovery
Exh. 1 Page 1
EXHIBIT 1
permit for the shipwreck El Salvador in the search area defined in the current permit dated 9
August 2013. DCR agrees to continue to issue the permit through the year in which the QAR
archaeology recovery phase is declared complete so long as the requirements contained in the
permit are fulfilled. Subject to the provisions of Article 3 of Chapter 121 of the North Carolina
General Statutes, entitled, Salvage of Abandoned Shipwrecks and Other Underwater
Archaeological Sites, and the North Carolina Administrative Code, DCR agrees to recognize
Intersals efforts and participation in the QAR project as sufficient to satisfy any performance
requirements associated with annual renewal of Intersals permit for the El Salvador. DCR expects
to complete recovery of the QAR shipwreck by the end of 2016. The Secretary of DCR shall have
the exclusive authority to determine when recovery of QAR is complete. The Secretary shall timely
notify Intersal in writing of DCRs determination that recovery is complete. If the recovery phase is
complete prior to 2016, DCR agrees to renew the permit through at least the end of 2016.
III. EXACT AND MINIATURE REPLICAS AND COLLECTIBLES
4.
Artifact Replicas. DCR and Intersal may make, or have made, molds or otherwise reproduce, or
have reproduced, replicas of QAR artifacts for educational, scientific, retail sale, or other
commercial purposes. All aspects of the conservation of artifacts, including whether or not to
conserve the artifact, shall be at the sole discretion of DCR.
5.
Types of Replicas. DCR and Intersal may make two types of replicas:
6.
a.
Miniature or Exact Replicas. Miniature or exact replicas shall be museum or archival quality
and shall be produced on a limited edition basis, be individually numbered, or otherwise
uniquely identified to facilitate authentication.
b.
Selection of Miniature or Exact Replicas to Produce. Up to ten (10) QAR artifacts may be in
the replication process at any given time. DCR and Intersal shall select one artifact each, taking
alternate turns, until each has selected up to five (5) artifacts for possible replication. DCR and
Intersal must present a separate business plan for the production, marketing, and sale of each of
its selected replicas. The Business Panel must review and approve the business plan. Once a
prototype is made, the Business Panel must review and approve the prototype, and accompanying
packaging, marketing, or audio, visual, or literary materials (e.g., booklets, DVDs, etc.) for
replication quality and historical accuracy. The Business Panel will issue its decisions in writing and
provide the same to Intersal and DCR. Upon approval by the Business Panel, the entity seeking to
reproduce the artifact may proceed with production, marketing, sales, and distribution. If, two (2)
years after the written approval of the prototype by the Business Panel, the replica has not been
offered for sale or distribution, the artifact will be placed back into the available pool of artifacts to
replicate. The replication, sale, or distribution of replicas (as opposed to selection) need not be on
alternating bases, but may be done according to DCRs and Intersals respective plans and
schedules.
Intersal agrees that the sword hilt it currently plans to produce as a miniature or exact replica shall
be Intersals first selection and shall fall under the terms of this Agreement.
7.
Production of Subsequent Miniature or Exact Replicas. DCR and Intersal may, individually
or collectively, produce more than one artifact replica at a time. When either DCR or Intersal
completes a replica and has offered it for sale or distribution, it may begin producing another
Exh. 1 Page 2
EXHIBIT 1
artifact according to the approval process in III.6. Once DCR or Intersal has offered an artifact
for sale and distribution, it may choose another artifact from the artifact pool so that it has up to
five (5) artifacts eligible for replication at any given time. If either DCR or Intersal decides to
relinquish an artifact before the end of two (2) years, the artifact will be placed back into the
available pool of artifacts to replicate. DCR and Intersal may enter into a written agreement as to
the further selection of artifacts after the first ten (10) have been selected.
Except by written agreement, neither Intersal nor DCR may select additional artifacts until they
have produced, or the Business Panel has declined, all five (5) of its initially-selected artifacts.
8.
Collectibles. Either DCR or Intersal may propose the reproduction, marketing, sales, and
distribution of collectible replicas as defined above. The reproduction, marketing, sales, and
distribution of collectible artifacts shall be approved in advance by DCR and Intersal, or, if
consensus cannot be reached between them, by the Business Panel.
9.
10.
Costs. DCR and Intersal shall each be responsible for their own costs of making miniature or
exact replicas, or collectibles produced by or for them.
11.
Profits. DCR and Intersal agree to share the profits generated by the sale of miniature or exact
replicas and collectibles. The entity producing the replica shall receive 80% of the net income after
taxes; the other entity shall receive the remaining 20%. Where DCR is the entity producing,
selling, and distributing the replica, DCR will account for its marketing and operations in
determining net income. Either DCR or Intersal may request from the other documentation
regarding marketing, distribution, or other costs.
12.
13.
Termination. After five (5) years, either DCR or Intersal may terminate, with or without cause,
this Reproduction Agreement section upon ninety (90) days written notice.
IV. PROMOTION OPPORTUNITIES
14.
Exh. 1 Page 3
EXHIBIT 1
Intersal agrees to allow DCR to use its completed documentary, free of charge, in its museums and
exhibits for educational purposes. DCR agrees to recognize Intersals participation in the making of
the documentary.
Termination. Either DCR or Intersal may terminate this Commercial Documentaries section at
any time after four (4) years have passed from the date the Secretary of DCR notifies Intersal in
writing of DCRs determination that recovery is complete. Notice of termination must be given in
writing six (6) months in advance.
15.
Other Commercial Narrative. DCR and Intersal agree to collaborate in making other
commercial narrative such as, but not limited to, books and e-books, mini- and full-length
documentaries, and video games. Any profit-sharing agreements shall be based on the amount of
work contributed by each entity. If DCR and Intersal cannot reach an agreement on the sharing
and production of any such commercial ventures that they propose to undertake, DCR and Intersal
will refer the issues to a mutually selected, neutral arbitrator for binding arbitration, with arbitration
to be concluded within three (3) months of selection of the neutral arbitrator.
16.
b.
Procedure.
1)
DCR agrees to establish and maintain access to a website for the issuance of Media
and Access Passes to QAR-project related artifacts and activities.
2)
DCR shall manage the issuance of Media and Access Passes after receiving access
requests from third parties via the website.
3)
The website shall be the primary means of access for requests, and shall include, at a
minimum:
(a)
(b)
(c)
4)
Upon electronic submission of requests and terms of use, if applicable, electronic notice
shall be sent to DCR and Intersal or its designee showing acceptance or nonacceptance of the terms of use.
5)
Intersal shall bear the sole responsibility for managing and enforcing its terms of use.
6)
For requests for access that are not received through the website, DCR shall provide
the requestor with substantially the same information contained on the website.
Non-commercial Media.
1)
All non-commercial digital media, regardless of producing entity, shall bear a time code
stamp, and watermark (or bug) of Nautilus and/or DCR, as well as a link to DCR,
Intersal, and Nautilus websites, to be clearly and visibly displayed at the bottom of any
web page on which the digital media is being displayed.
2)
Exh. 1 Page 4
EXHIBIT 1
c.
Termination. This Media and Access Pass section shall terminate after the 5th anniversary
of the signing of this Agreement. After five (5) years, DCR and Intersal may agree to extend
this provision by mutual written consent.
V. RECORDS
17.
Public Records. Nothing in this Agreement shall prevent DCR from making records available to
the public pursuant to North Carolina General Statutes Chapters 121 and 132, or any other
applicable State or federal law or rule related to the inspection of public records.
18.
Records Management. During the recovery phase of the QAR project, DCR and Intersal agree
to make available to each other records created or collected in relation to the QAR project. The
entity requesting copies bears the cost of reproduction. Within one (1) year after the completion of
the recovery phase, Intersal shall allow DCR to accession duplicate or original records that were
created or collected by Intersal during the project and that are related to the site, or the recovery
or conservation of the QAR materials. Such records shall include relevant field maps, notes,
drawings, photographic records, and other technical, scientific and historical documentation created
or collected by DCR or Intersal pursuant to the study of the site and the recovery of materials
therefrom. These materials shall become public records curated by DCR. All digital media provided
by Intersal under the terms of this paragraph shall include a time code stamp and watermarks (or
bugs). It is expressly recognized and agreed that, to the extent Intersal possesses confidential
information or documents related to its search for El Salvador, no such documents or information
fall under the terms of this paragraph.
VI. Business Panel
19.
Business Panel. Members of the Business Panel shall include a secretary level representative
from DCR, the president of Intersal, the president of Nautilus Productions, one representative from
the North Carolina Department of Commerce or its successor, and one member of the academic
community.
Business Panel meetings shall be subject to the open meetings laws codified at Article 33 of
Chapter 143 of the North Carolina General Statutes.
VII.
20.
NAUTILUS PRODUCTIONS
Right of First Refusal. Nautilus Productions shall have the right of first refusal on the production
of all commercial and non-commercial digital media for which no time code stamp, and watermark
or bug of Nautilus has been affixed. Nautilus Productions agrees that digital media produced inhouse by DCR staff shall not be included in this right of first refusal.
Termination. This Right of First Refusal provision shall terminate after the 5th anniversary of the
signing of this Agreement.
21.
Return of Video. DCR agrees to return to Nautilus Productions all archival footage, still
photographs, and other media, produced by Nautilus Productions, which do not bear a time code
stamp and a Nautilus Productions watermark (or bug). DCR may retain, for research purposes,
archival footage, still photographs, and other media that contain a time code stamp and watermark
(or bug), and as to such media, DCR shall provide Nautilus with a current, accurate list.
22.
Copyright Violations. DCR agrees to compensate Nautilus Productions by payment of the cash
sum of $15,000 for any copyright infringements by DCR or its support groups occurring through the
date of the signing of this contract, including Friends of the Maritime Museum display photograph
Exh. 1 Page 5
EXHIBIT 1
of the pile (central portion of the QAR shipwreck), DCRs Flickr account showing anchor A1 on the
pile, DCRs website showing anchor A1 on the pile, DCRs News website showing anchor A2, and
Friends of the QAR website showing mapping dividers (artifact). DCR shall pay Nautilus
Productions $15,000 by 31 January 2014.
VIII.
MISCELLANEOUS
23.
DCR Agreement and Release. Except as expressly provided in this Agreement, DCR and the
State, their successors and assigns hereby release and forever discharge Intersal and Nautilus,
including their officers, agents and employees, from any and all claims, demands, actions, causes
of action, rights, damages, costs, attorney fees, expenses and compensation whatsoever, whether
arising out of common law or statute, whether state or federal claim, that DCR or the State now
have, or that were or could have been made relating to their rights under the 1998 Agreement or
any other prior agreements related to the Adventure, El Salvador, or Queen Annes Revenge
shipwrecks. DCR expressly represents that it is not aware of any contracts that other State
agencies have entered into that infringe upon the intellectual property rights of Nautilus
Productions.
24.
Intersal Agreement and Release. Except as expressly provided in this Agreement, Intersal and
its successors and assigns hereby release and forever discharge the State, its officers, agents and
employees, including DCR, from any and all claims, demands, actions, causes of action, rights,
damages, costs, attorney fees, expenses and compensation whatsoever, whether arising out of
common law or statute, whether state or federal claim, that Intersal now has, or that were or could
have been made relating to Intersals rights under the 1998 Agreement or any other prior
agreements related to the Adventure, El Salvador, or Queen Annes Revenge shipwrecks.
25.
Petition for Contested Case Hearing. Intersal agrees to withdraw its petition for contested
case hearing in Intersal v. N.C. Dept of Cultural Resources (13DCR15732) within five (5) business
days of the signing of this Agreement.
26.
27.
28.
Non-disparagement Clause. DCR, Intersal, and Nautilus agree that they will not disparage one
another professionally or in any public forum regarding any allegations related to this Agreement.
29.
Choice of Laws. This Agreement is entered into in the State of North Carolina and shall be
construed and interpreted in accordance with its laws.
Exh. 1 Page 6
EXHIBIT 1
30.
Counterparts. This Agreement may be executed in counterparts, any of which shall be deemed
to be an original and all of which together shall be deemed the same instrument.
31.
Entire Agreement. The foregoing constitutes the entire agreement as specified by DCR, Intersal,
and Nautilus, and the considerations stated herein are contractual and are not mere recitals.
32.
Effect of Breach of Agreement. In the event DCR, Intersal, or Nautilus breaches this
Agreement, DCR, Intersal, or Nautilus may avail themselves of all remedies provided by law or
equity.
33.
Review and Construction. Intersal, DCR and Nautilus have read and reviewed all of the terms
of this Agreement, with the benefit of advice from legal counsel of their choosing. The terms of
this Agreement have been drafted and revised with input from all of them and, thus, the terms of
this Agreement shall not be construed for or against any of them as author.
34.
Exh. 1 Page 7
EXHIBIT 1
::~~;;:~~
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DATE:
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STATE OF FLOfilDA .
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COUNTY OF ~e\ttlY C\..
Sworn to (or affirmed) and subscribed before me thi s
NOTARY PUBLIC
STATE OF FLORIDA
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day of
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Expires 9/19/2011
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Exh. 1 Page 8
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EXHIBIT 1
Nautilus Productions:
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and for the County of 'bu~\-\-- -A ~':h and State aforesaid, do
hereby certify that Frederick Allen, personally appeared before me this
date and acknowledged the due execution by him of the foregoing
instrument as for the purposes therein expressed.
1r....,
WITNESS m hand.. and Notarial Seal, this the Q.~ day of
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Exh. 1 Page 9
EXHIBIT 1
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and State aforesaid, do
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personally
appeared before me this date and acknowledged the due execution by
her of the foregoing instrument as for the purposes therein expressed.
WITNESS my hand and Notarial Seal, this the .;iq fl day of
2013.
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Exh. 1 Page 10
EXHIBIT 1
COUNTY OF WAKE
AGREEMENT
State of North Cal'olina represented by the Department of Cultural Resources (hereinafter the
"Department"), Intersal, Inc., a Florida corporation (hereinafter "Intersal"), and Maritime
Research Institute, Inc., a North Carolina nonprofit corporation (hereinafter "MRI").
WITNESSETH, THAT:
WHEREAS, under the provisions of the federal Abandoned Shipwreck Act of 1987 {43
U.S.C. 2101-2106) and Article 3 of Chapter 121 of the General Statutes of North Carolina
(N.C.G.S. 121-22 through 121-28), the title to non-federal abandoned shipwrecks and artifacts
embedded in the submerged lands of the State of North Carolina is transferred by the United
States to the State of North Carolina and all such artifacts are placed under the custody and
WHEREAS, working under a permit issued by the Department, Intersal, under the
direction of Michael E. Daniel, located a shipwreck site believed to be that of the ship QUEEN
ANNE'S REVENGE (hereinafter "QAR") within the State waters of North Carolina, and are to be
Exh. 1 Page 11
EXHIBIT 1
2
WHEREAS, lntersal has been searching for QAR and other 18th Century shipwrecks at
Beaufort Inlet under permits issued by the Department since 198 7, and has expended a
all coins and precious metals retained by the Department, and 75% of the material awarded to the
Permittee. The Department and the Permittee agree that the most appropriate disposition of other
artifacts, such as vessel structure, ship's fittings, weapons, personal effects, and non-precious
cargo shall be a suitable facility, possibly in the Beaufort area [the North Carolina Maritime
Museum], where the material can be curated for scientific study and public display;" and,
WHEREAS, Intersal and Michael E. Daniel are willing to forego entitlement to any coins
and precious metals recovered from the QAR site in order that all QAR artifacts remain as one
intact collection and in order to permit the Department to determine ultimate disposition of the
artifacts; and,
WHEREAS, the Department recognizes MRI, as a partner in the project for the life of
this Agreement; and,
WHEREAS, in order to facilitate this Agreement, the Department recognizes Intersal and
MRI as partners, to work in partnership with the Department to research, survey, search, recover,
preserve, protect, conserve, curate, and promote the collection for the life of this Agreement; and,
WHEREAS, Intetsal, MRI, and the Department, in a spirit of partnership, are willing to
establish a five-member project Advisory Committee with the responsibilities set out in
Exh. 1 Page 12
EXHIBIT 1
Intersal's historicaJ research, its willingness to employ state of the art equipment in its
underwater search and recovery efforts, and the prompt reporting of its activities to the
Department; and,
WHEREAS, all of the Parties to this Agreement are desirous that all aspects of the project
be accomplished in a manner that will preserve and protect the QAR and its artifacts and will
provide the highest degree of historical and archaeological knowledge both to the general public
WHEREAS, the Department is responsible for the protection of the public heritage of
PARTIES
Exh. 1 Page 13
EXHIBIT 1
4
2.
of Chapter SSA of the General Statutes of North Carolina. MRI shall be fully qualified under
State and Federal law to engage in fund raising and to receive philanthropic tax exempt
4.
By entering into this Agreement, the Parties named above certify that they are
legally constituted entities with full authority to perform the terms of the agreement. The laws of
North Carolina will be applied to interpreting and enforcing the terms of this document.
ARTICLE II - DEFINITIONS
5.
The term "Parties" means the parties to this Agreement, i.e. the Department, MRI
and Intersal.
6.
The term "Recovery" means the location, identification, and retrieval of any
portion of the shipwreck of the QAR, or artifact from the site area.
7.
relics, monuments, tools and fittings, utensils, instruments, weapons, ammunition, and treasure
trove and precious materials including gold, silver, bulJion,jewelry, pottery, ceramics, and
The term "Preservation" means the protection of the shipwreck of QAR and
The term "Conservation" means the protection, treatment and long term curation
of any portion of the shipwreck of QAR or any artifacts after recovery from the site area.
Exh. 1 Page 14
EXHIBIT 1
1O.
The term "Site Area" means the area located within 300 yards of a point at
coordinates 76 degrees 40.972 minutes West Longitude and 34 degrees 40.513 minutes North
Latitude, the area surrounding the shipwreck, and this may be further defined by the Parties in
the event artifacts or debris from the shipwreck are ~iscovered outside of this area.
11.
conservation, interpretation and exhibition activities related to any portion of the shipwreck of
QAR or its artifacts.
preservation, recovery and conservation of the shipwreck of the QAR and the artifacts and all
operations, including security operations, and any determinations as to priority of operations,
is that of the Secretary of the Department. The State Archaeologist, the Supervisor of the
Underwater Archaeology Unit, a representative of MRI, a representative of lntersal, and a
representative selected by the Secretary of the Department from outside the Division of
Archives and History shall form the Advisory Committee on Archaeological Operations
(" Advisory Committee") having planning and oversight responsibility for the recovery and
preservation of the shipwreck of the QAR and its artifacts, however, the final decisions with
regard to such matters rest with the Secretary of the Department.
13.
Any and all funds raised by MRl shall be used as directed by MRI to cover costs
associated with the project, which shall include the payment of MRI's employees and operating
expenses. Any MRI funds remaining after the payment of such costs may be used by MRI in the
furtherance of its non-profit purpose of maritime research consistent with its charter and bylaws.
Exh. 1 Page 15
EXHIBIT 1
14.
Subject to their rights under this Agreement, lntersal and MRI hereby assign to
the Department, and the Department hereby accepts, on behalf of the People of North Carolina,
the interests oflntersal and MRI in the title and ownership of QAR and its artifacts.
15.
The Parties agree that MRI shall con9uct research, documentation, search, survey,
16.
Except as provided in paragraph 20 and this paragraph, lntersal shall have the
exclusive right to make and market all commercial narrative (written, film, CD Rom, and/or
video} accounts of project related activities undertaken by the Parties. lntersal (or its designee)
will be responsible for its own costs related to the making and marketing of such narrative
accounts, and may participate in operations in the course of making such accounts. All Parties
agree to cooperate to a reasonable degree in the making of a film and/or video documentary, or
group of documentaries, that lntersal will produce (or contract to be produced) with regard to
project activities.
17.
video and/or film documentary, or series of such documentaries, as long as there is no broadcast
originating outside of North Carolina, and there is no distribution or dissemination for sale of the
said educational documentary without lntersal 's written permission. Intersal shall have the rights
to reasonable access and usage, subject to actual costs of duplication, of all video and/or film
footage generated in the making of said educational documentary.
The Parties agree to reasonably cooperate with all legitimate news media inquiries
Exh. 1 Page 16
EXHIBIT 1
regarding the project, using guidelines described in this paragraph and paragraph 3 5.
18.
relating to the preservation and conservation of artifacts, lntersal shall have the exclusive rights
to make (or have made) molds or otherwise reproduce (or have reproduced) any QAR artifacts of
its choosing for the purpose of marketing exact or miniature replicas. Intersal will be responsible
for all costs related to its making and marketing of such replicas. All such replicas will be
approved by the Advisory Committee, be made on a limited edition basis, and be individually
have made) molds or otherwise reproduce (or have reproduced) any QAR artifacts of its
choosing for non-commercial educational purposes. The Department will be responsible for all
costs related to its making and use of such replicas.
19.
MRI shall have the right to designate other entities as official sponsors of the
project, or other similar designations with the approval of the Advisory Committee.
20.
The Department shall have the right to authorize access to, and publish accounts
and other research documents relating to, the artifacts, site area, and project operations for non
commercial educational or historical purposes. Nothing in this document shall infringe to any
extent the public's right to access public records in accordance with Chapters 121 and 132 of the
General Statutes ofNorth Carolina.
21.
MRI and the State of North Carolina jointly shall have the exclusive right to
Exh. 1 Page 17
EXHIBIT 1
8
nationally and internationally tour and exhibit a representative cross section of the artifacts, if
MRI establishes its compliance with standard museum practices with regard to a proposed tour
and exhibit. Either entity may initiate and administer such a tour, and either entity may
participate in a tour initiated and administered by th~ other. Each entity shall be responsible for
the costs incurred by their participation in such a tour and funds generated by each entity on such
22.
The Parties agree to cooperate with each other and with any law enforcement or
other government agency to protect the site area from unauthorized visitation, diving and
unauthorized collection of Artifacts.
23.
The Parties will neither knowingly solicit nor accept gifts from third parties when
All net profits (as certified by Intersal to the reasonable satisfaction of the
Department) from Intersats sale of media rights and replicas shall be entirely due to Intersal, up
to an amount which represents lntersal's costs to date which have been expended in connection
with the search and recovery of artifacts from the QAR. Any further funds received by lntersal
from these sources shall be divided 75% (seventy five percent) of the net profits (as certified by
Intersal to the satisfaction of the Department) to lntersal, and 25% (twenty-five percent) to be
donated by Intersal to MRI to be used by MRI as directed by the Advisory Committee
ror the
purposes enumerated in this Agreement. The Advisory Committee shall take into account the
Exh. 1 Page 18
EXHIBIT 1
goal of ensuring that the heritage of the QAR is avai]able to aJI of the citizens of the State of
North Carolina.
ARTICLE V -
25.
The Department, Intersal, and MRI shall provide the Advisory Committee with
copies of their plans, status reports, records of fund raising activities and expenditures relating to
the project. If the Advisory Committee determines that it needs additional or different
information, it may establish a system for receiving the same. The provisions of this paragraph
are in addition to the requirement of paragraph 30.
The Advisory Committee, the Department, lntersal, and MRl will all make
available to each other such information and data as may reasonably be required and are
generally available to inform potential donors and others about the project.
27.
All Parties recognize that MRI is an independent entity with authority to solicit
both funds and equipment for the purposes enumerated in this agreement.
28.
All funds raised by MRI shall be used as directed by MRI, according to the
pertinent project records, MRI, Intersal and the Department agree to make available for
duplication by each other, or, when appropriate, to provide the Department with, relevant field
maps, notes, drawings, photographic records and other such technical, scientific and historical
documentation created or collected by MRI, Intersal or the Department pursuant to the study of
Exh. 1 Page 19
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10
the site and the recovery of materials therefrom. These materials shall become public records
curated by the Department.
The parties to the Agreement shalJ d~velop procedures for keeping records
pertaining to costs and funds associated with the project. These procedures shall incorporate, and
apply as appropriate, the standards for financial management systems set forth in the Uniform
Administrative Requirements for Grants and Cooperative Agreements to State and Local
Governments, at 32 CFR Section 33.20.
ARTICLE IX -NOTICES
31.
given under this document shall be deemed to have been duly given if in writing and either
delivered personally or by telegram or mailed by first class, registered, or certified mail, as
follows:
If to the Department: 109 East Jones Street, Raleigh, NC 27601-2807;
lfto MRI: P. 0. Box 8681, Jupiter, FL 33468;
Ifto Intersal: 104 Stanton Road, Beaufort, NC 28516.
A Party can change the address to which such communications are to be sent by giving
written notice to the other party in the manner provided in this paragraph.
ARTICLE X -
32.
OBLIGATIONS OF APPROPRIATIONS
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ADDITIONAL PROVISIONS
EXHIBIT 1
I1
33.
The Department recognizes that Intersal's efforts and cooperation with regard to
the QAR permit have had, and will continue to have, a significant impact on its compliance with
the performance standards agreed to with regard to Intersal's permit to search for the El
Salvador. The Department believes that the cooperation and continued effort oflntersal with
regard to both its QAR permit and its El Salvador permit are of benefit to the historical heritage
of the State. The Department believes that the cooperation and effort of MIU with regard to this
project and the search for the Adventure are of benefit to the historical heritage of the State.
Subject to the provisions of Article 3 of Chapter 121 of the General Statutes of North Carolina
and subchapter .04R ofTitle 7 of the North Carolina Administrative Code, the Department
agrees to recognize Intersal's and MRI's efforts and participation in the QAR project as
sufficient to satisfy any performance requirements associated with annual renewal of lntersal's
permits for either El Salvador or Adventure, and for the life of this Agreement, renewal of said
permits cannot be denied without just cause.
34.
In the event that it is determined that the shipwreck site which is the subject of
this Agreement is not the QAR, lntersal and the State shall enter into a contract along the terms
of the pennit issued to lntersal for the exploration and recovery of the QAR. In the event that the
All press releases concerning the project shall contain the following information,
when appropriate: "Intersal, Inc., a private research firm, discovered the site believed to be
Queen Anne's Revenge on November 21, 1996. QAR was located near Beaufort Inlet, NC by
Intersal's director of operations, Mike Daniel, who used historical research provided by IntersaJ's
Exh. 1 Page 21
EXHIBIT 1
12
president, Phil Masters. Daniel now heads up Maritime Research Institute, the non-profit
corporation formed to work on the project in cooperation with State archaeologists and historians
of the North Carolina Department of Cultural Resources, Division of Archives and History."
The Parties agree that their spokespersons and employees will be instructed, when being
interviewed by legitimate news media, to endeavor to give appropriate credit where due for the
discovery of QAR, and mention the continuing participation of each of the Parties in the project.
36.
This document shall become effective when signed by all the Parties and shall be
effective for a period of fifteen (15) years, unless sooner terminated by written consent of all
Parties. The Parties shall have the option to renew this agreement for an additional period of ten
years. The option must be exercised in writing to the Department or its successors on or before
the expiration of this Agreement.
37.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, this the .1st
day of Sept.
, 1998.
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13
Jntersal, Inc.
\
By:.....s1~~~~~~~..:::......:...._-=::=!~
Witness: ~ ~ ~ ~ . t r a : 1 . - 1 - . ~ ~ ; . . . . . . . . ; : : ~ ~ ~ ~
Exh. 1 Page 23
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Exh. 1 Page 24
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By: -+--------,H---
Witness:
The Sta
B~:-~~~:t(.e.d"'::::~~~
Exh. 1 Page 25
CERTIFICATE OF SERVICE
THE UNDERSIGNED HEREBY CERTIFIES that on this date a copy of the foregoing or
attached document was served upon counsel of record for all parties of record or the parties by
depositing in a post-paid, properly addressed wrapper in a post office or official depository under
the exclusive care and custody of the United States Postal Service, addressed as follows:
Olga Vysotskaya
Special Deputy Attorney General
Composite Litigation Group
Office of the Attorney General
North Carolina Department of Justice
Post Office Box 629
Raleigh, North Carolina 27602-0629
Tel: (919) 716-0185
Fax: (919) 716-6759
E-Mail: [email protected]
Amar Majmundar
Special Deputy Attorney General
Composite Litigation Group
Office of the Attorney General
North Carolina Department of Justice
Post Office Box 629
Raleigh, North Carolina 27602-0629
Tel: (919) 716-0185
Fax: (919) 716-6759
E-Mail: [email protected]
This the 2nd day of November, 2015.
/s/______________________________
David H. Harris, Jr.
State Bar No. 9841
Linck Harris Law Group, PLLC
2530 Meridian Parkway, Suite 300
Durham, North Carolina 27713
919-806-4220
866-274-0756 (Fax)
[email protected]
Counsel for Plaintiff