Seattle Film Works/Photoworks

“This entry will clear up a lot of misinformation about PhotoWorks, previously Seattle Film Works.

NOTICE OF CLASS ACTION AND PROPOSED CLASS ACTION
SETTLEMENT
Drinkard, et al. v. PhotoWorks, Inc. - King
County WA Superior Court No. 00-2-09552-0SEA

TO: ALL PERSONS OR ENTITIES IN THE UNITED STATES
WHO PROCESSED FILM WITH SEATTLE FILMWORKS OR
PHOTOWORKS, OR RECEIVED FILM DISTRIBUTED BY
SEATTLE FILMWORKS OR PHOTOWORKS, AT ANY TIME AFTER
MARCH 28, 1996 ("the Class"):

IMPORTANT -- READ THIS ENTIRE NOTICE.

This is to notify you that a Class Action lawsuit ("Class Suit") has been brought on your behalf in the Superior Court of King County, Washington, No.00-2-09552-0SEA, against PhotoWorks, Inc., of Seattle, Washington, formerly known as Seattle
FilmWorks. In the Class Suit the plaintiffs (who are 6 individuals) claim that Seattle FilmWorks (now PhotoWorks) has made false or misleading representations to customers, as well as to other
photoprocessers: (1) that Seattle FilmWorks brand film can be processed only by Seattle FilmWorks or by only a few other labs, when in fact most of such film is of a C-41 type that can be processed by most other photofinishers; and (2) that replacement film distributed by Seattle FilmWorks to photo-processing customers is "free," when in fact customers are charged for the replacement film as part of their processing order. On behalf of the Class, plaintiffs seek injunctive and declaratory relief, as well as damages. PhotoWorks disputes and denies these allegations and denies any wrongdoing or liability on the
claims asserted in the Class Suit. In the Class Suit, there has been no trial or other
determination of the merits of the claims, and this Notice is not an expression of any opinion by the Court as to the merits of the claims.

PROPOSED SETTLEMENT: For the sole purpose of compromising disputed claims and avoiding costs and risks of further litigation, PhotoWorks and the plaintiffs who represent the Class have agreed to a proposed settlement. Here is a summary of
its terms.

FUTURE CONDUCT/DISCLOSURES. Although PhotoWorks reaffirms its denials of any past wrongdoing, under the settlement PhotoWorks will agree that in the future: (a) it will not represent to customers that its film can be processed only by PhotoWorks or by a few or small number of other labs if such is not the fact; (b) it will not represent that replacement film is free unless it is provided at no charge over and above the
regular price PhotoWorks charges for processing without replacement film; (c) so long as it generally offers customers the option not to purchase replacement film when purchasing processing services, it will conspicuously disclose that option and the method of exercising it on order forms and on signage in its retail stores; (d) until March 31, 2006, it will maintain a "C-41" designation on the rolls of all standard
C-41 film it distributes that is of a type that is able to be properly developed using the industry standard C-41 process.

PhotoWorks also affirms that most of the Seattle FilmWorks film it has distributed since 1996 is standard C-41 film.

OTHER BENEFITS. PhotoWorks will also provide these benefits to Class Members: (1) Within one year PhotoWorks will make the following distributions of free rolls of 24-exposure standard C-41 film: (a) It will distribute an aggregate of 900,000 rolls to persons who are active PhotoWorks customers, with the identity of recipients and number of rolls per recipient (not to exceed Three) determined by PhotoWorks in a way that reasonably takes into account past and/or anticipated quantity or frequency of their transactions; (b) IT WILL ALSO DISTRIBUTE ONE ROLL TO EACH OF THE FIRST 300,000 CLASS MEMBERS WHO DO NOT RECEIVE ANY OF THE 900,000ROLLS
MENTIONED ABOVE AND WHO, WITHIN 6MONTHS AFTER THE DATE OF THIS NOTICE, REQUEST A FREE ROLL (i) BY
ENTERING THEIR NAME AND MAILING
ADDRESS INTO THE WEB FORM AT
www.photoworks.com/filmsettlementrequest.asp (ii) BY A TELEPHONE CALL TO PHOTOWORKS AT 1-800-922-2391 OR (iii) BY A LETTER MAILED TO
PHOTOWORKS, 3213 W. WHEELER ST., #300, SEATTLE, WA 98199. EACH WRITTEN REQUEST MUST CONTAIN THE CLASS
MEMBER'S ADDRESS, SIGNED OR SUBSCRIBED NAME, AND STATEMENT THAT HE OR SHE IS A MEMBER OF THE CLASS.
Materials accompanying these distributions will inform recipients that the C-41 process identified on the film is an industry standard chemical process that most photo-processing labs use to develop film.

(2) Each member of the Class who does not receive free film under (1) above may submit to PhotoWorks the Coupon appended or attached to this Notice (prior to the Coupon's expiration) to receive a $1
discount on a film processing order.

OTHER PROVISIONS. (a) PhotoWorks will pay (subject to Court approval)$2,500 to each of the named plaintiffs/class representatives as compensation for their time and involvement in the Class Suit, and $320,000 to the attorneys for the Class for their services and costs in the Class
Suit. (b) THE SETTLEMENT WILL RELEASE AND BAR ALL CLAIMS OF CLASS MEMBERS AGAINST PHOTOWORKS WHICH ARISE OUT OF ANY OF THE ALLEGATIONS IN THE CLASS SUIT, EXCEPT FOR CERTAIN CLAIMS BY CLASS MEMBERS WHO EXERCISE THE OPTION TO REQUEST EXCLUSION, WHICH IS EXPLAINED BELOW.

COURT PROCEDURES. The proposed settlement is subject to approval of the Court. The Court has made a preliminary determination that the Class Suit may be maintained as a class action for purposes of settlement only, and that the proposed settlement appears to be fair and reasonable. The Court will hold a Fairness Hearing on June 7, 2001 at 9:00 a.m. in the Courtroom of Hon. Bruce Hilyer, Courtroom W-842, King County Courthouse, 516 Third Ave., Seattle, WA 98104, to determine
whether the proposed settlement should be finally approved.

YOUR RIGHT TO BE HEARD. You may object to, support or comment on the settlement if you do so by brief letter mailed first class, postmarked no later than June 1, 2001, which indicates that it is in reference to Drinkard, et al. v. PhotoWorks, Inc., No. 00-2-09552-0SEA and is addressed to Superior Court Clerk's Office, King County Courthouse, 516 Third Ave., Room E609,
Seattle, WA, 98104, with copies addressed and mailed by the same postmark date to (1) Adam Berger, Schroeter, Goldmark & Bender, 810 Third Ave. Ste. 500, Seattle, WA 98104 (Class Counsel) and (2) Peter A. Danelo, Heller, Ehrman, White & McAuliffe LLP, 701 Fifth Ave. Ste. 6100, Seattle, WA 98104 (counsel for PhotoWorks). If you do this, you may, but are not required to,
also appear and be heard orally at the Fairness Hearing, either personally or through your own lawyer retained at your expense.

EXCLUSION. You may exclude yourself from the settlement and the settlement Class with respect to individual monetary claims only, by mailing first class a letter addressed to PhotoWorks Settlement Administrator, 810 Third Ave. Ste. 500,
Seattle, WA 98104, postmarked no later than June 1, 2001, in which you state "I request exclusion from the PhotoWorks settlement" followed by your name, signature and address. If you exercise this
option, you will not be eligible for the free film or coupon benefits described above under "Other Benefits" and you will retain the right to bring a separate individual lawsuit against PhotoWorks on claims for damages covered by the Class Suit. If you do not request exclusion, the Settlement, if
finally approved by the Court, will release, and prohibit you from filing a separate suit on, any claim you might have against PhotoWorks based on
any of the allegations in the Class Suit, as
summarized in the first paragraph of this Notice and stated more particularly in the papers filed by plaintiffs in the Class Suit.

FURTHER INFORMATION. This Notice contains only a summary of the Settlement Agreement and the allegations in the Class Suit. You may inspect complete copies of the Settlement Agreement and other documents in the Class Suit at the Office of
the Clerk of the Superior Court of King County, 516 Third Avenue, Room E609, Seattle, WA 98104. If you wish a copy of the Settlement Agreement, or
want further information, or otherwise wish to communicate with Class Counsel, you may call toll-free telephone number 1-800-238-6054, or
write to Class Counsel, PhotoWorks Settlement, 810 Third Ave. Ste. 500, Seattle, WA. 98104.

DATED: May 7, 2001 By Order of the Court


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PHOTOWORKS DISCOUNT COUPON $1.00 OFF FILM
PROCESSING

This coupon entitles you to $1.00 off film
processing on one roll in your next PhotoWorks
order. To redeem this coupon, simply fill out your
PhotoWorks processing order form and include this
coupon in the secure mailer pouch with your film.
To request a photo processing order form, call
1-800-922-2391 or go to:
www.photoworks.com/photoworks/orderforms/OrderEnvelope.asp

Expires 09/15/01 P395”