MOVIE PLAN WARRENTIES AND DISCLAIMERS

Except as expressly provided otherwise in a written agreement between

licensor and you, the licensed works (movie plan) are now provided "as is"
without warranty of any kind, either express or implied, including, but not
limited to, the implied warranties of merchantability or fitness for a
particular purpose, or the warranty of non-infringement.

In no event shall licensor or its suppliers be liable to you or any third party
for any special, incidental, indirect or consequential damages of any kind, or
any damages whatsoever, including, without limitation, those resulting from
loss of use, data or profits, whether or not licensor had been advised of the
possibility of such damages, and on any theory of liability, arising out of or in
connection with the use of the licensed works. Some jurisdictions prohibit the
exclusion or limitation of liability for consequential or incidental damages, so
the above limitations may not apply to you. These limitations shall apply
notwithstanding any failure of essential purpose of any limited remedy.

Let’s begin… From this point on, all regular text is part of the
memorandum. Bolded text like this is instructive only.

THE LAW

The law is very tricky in the area of investment offerings. This manual
does not even pretend to cover any of the requirements that you need to
be aware of. However, the first thing your potential investors read in
an offering should be a statement that informs the potential investor
that the limited liability company interests being offered are not
registered with the Securities and Exchange Commission. It should
make mention of the risk factor, which in the case of motion picture
development and production, is very high. You should also let the
investor know that no part of the memorandum is to be construed as
legal or financial advice. It is recommended that you consult both an
attorney and an accountant for the appropriate wording. The
following has been known to be acceptable in the past:

This memorandum describes the formation and operation of a Limited Liability Company
to engage in the business of motion picture production and financing.

The contents of this memorandum are confidential and are disclosed pursuant to a
 MOVIE MONEY

confidential relationship and may not be reproduced or otherwise used except for
the purpose intended herein.

The interests described in this memorandum will not be registered under the Securities
and Exchange Act of 1933 or any local securities law and are described as for investment
only and not with a view to resale or distribution.

The purchase of interests described herein entails a high degree of risk and is suitable for
purchase only by those who are qualified investors who can afford a total loss of their
investment. Further, risk factors as contained in this memorandum (which does not
include all possible factors) should be carefully evaluated by each prospective purchaser
of a limited liability company interest herein.

The contents of this memorandum are not to be construed by any prospective purchaser of
a limited liability company interest as business, legal, or tax advice and each such
prospective purchaser will be required to demonstrate that he has the ability to evaluate
the purchase of the limited liability company interests described herein or has retained the
services of a representative who has such knowledge and expertise as may be necessary to
evaluate purchase.

This memorandum is neither an offer to sell nor a prospectus, but is informational in

nature.

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Table of Contents

WHAT'S IN THE MEMORANDUM?

The next section should be your Table of Contents. You may want to
draft this first and use it as an outline for the rest of your
memorandum. However, keep in mind that as the memorandum
changes, grows or shrinks, you must also update the Table of Contents:

The business of the Limited Liability Company

Distribution of revenues and allocation of profits & losses
Flow Chart
Sale of Company Interests
Sale of the Film
Tax consequences
[XYZ Productions] (The Manager)
Rights of the Members
Rights of the Manager
Conflict of interest
The motion picture
Legal and accounting services
Distribution
Budget
Timetable
Risk factors
Additional information
Appendices

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The Business of the Partnership

WHAT KIND OF BUSINESS IS THIS?

This section details the nature of your business, i.e. motion picture
production, the structure of your business, i.e. Limited Liability
Company, relevant details and the contact information.

In the example below, the name of the limited liability company is XYZ
Film Partners, LLC. (a limited liability company). A limited liability
company is a business in which there is a Manager, in this case XYZ
Productions and at least one member. A member’s liability and
involvement is limited only to the amount of their investment. It is the
Manager who controls the business and who is liable for the business's
actions. However, an LLC can offer limited liability protection to one
or more individuals serving as the Manager. Also, keep in mind that it
is possible to create a so-called "active-investor" (member-managed)
LLC, as opposed to a "passive-investor" (Manager-managed) LLC,
whereas with an LP it's always used for passive investors. Again, you
should consult an attorney in the specific details of forming a limited
liability company.

In the limited liability company, you are the Manager. In the example
below, you are known as XYZ Productions. XYZ Productions is a
fictitious business name under which you, as an individual, are doing
business as. This is a perfectly suitable way of running your film
company. However, you should be aware that this means you are a
sole-proprietor (if you have a partner then it is a partnership) and you
are personally liable for the actions and debts of XYZ Productions.
You are also obliged to report the income received by XYZ Productions
to the Internal Revenue Service on your own personal income tax
return. Another option is to incorporate. This will cost you a little
more money, and will be slightly more difficult to set up and maintain.
But, the upside is that your personal assets are protected from any civil
suits that might arise against you and the corporation files a separate
income tax return. You should check with an attorney and an
accountant on which structure is best for you.

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The purpose of this business is to produce a motion picture. But, the

purpose could also be to develop a motion picture so that it is ready to
go into production. In this case, you would raise money only to develop
the screenplay, attach cast and director and so on. Then, once this
package is assembled, you can create another limited liability company
that is used to raise money for the actual production. Therefore, the
investors in the development company are not investing in your ability
to make a movie, but your ability to raise money to make a movie.
Because once the money is raised, the development investors are
repaid. Later, they will participate in your share of any profits from
the actual finished production. For the purpose of this manual, we are
assuming that you are raising production (not development) funds.

[XYZ Film Partners LLC] is a limited liability company or LLC made up of a Manager,
[XYZ Productions] , and various Members who have purchased units in the company to
finance, produce and cause the distribution of a feature length motion picture tentatively
entitled, ["XYZ - The Movie"].

The anticipated rating for the MPAA of this film is [R].

The anticipated date for completion of the picture is [September 1, 2007].

The estimated budget for the film is [$200,000.00]. The total capital required from
the Members is [$200,000.00].

Below is a standard allocation of profits and losses. A more detailed

explanation follows in the next section.

Distribution of net profits received by the company will be [50%] to the investors,
and [50%] to the Manager.

[20] limited liability company interests are being offered. Each interest is worth
[$10,000.00.]

The number of limited liability company interests or units is up to you.

Generally, it is a hundred. You may also have a minimum number for
an investor to purchase, maybe 10. This is also up to you.

Funds raised by the limited liability company for the production of the film ["XYZ - The

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Movie"] will be put into an escrow account under the name [XYZ Film Partners LLC],
until the entire production budget is raised. The anticipated date for completion of
financing (or for the return of escrow money to investors) is [August 1, 2007].

An escrow account is a good place to hold the funds raised until you
have 100% of the capital. However, with the Members permission you
may release some of the funds in escrow to start production. In some
cases, you may have raised enough money to shoot the film, but not
enough to finish it in post-production. Sometimes, the producer uses
footage from principal photography to help raise the additional funds
needed to complete the film. These "completion funds" can come from
other investors or maybe a distribution company. The thing to
remember here is that your investors need to be notified before you
start spending their money if you have not raised 100% as agreed.
Also, you should keep in mind the risk involved in spending the money
you raised to shoot a picture you cannot readily finish.

The Manager strongly recommends that prospective Members carefully consider the risk
factors described in this memorandum.

It's good to keep mentioning this through out the agreement.

The mailing address for the Manager shall be:

[XYZ Film Partners LLC]

[9016 Wilshire Boulevard]
[Suite 324]
[Beverly Hills, California 90211]
[(310) 226-2935 Voice]
[(310) 827-6028 Fax]

You must designate a place of business. This can be your home or

office. Do not use a Post Office Box. Investors will be wary to invest in
a business with a P.O. Box as its place of business. A good suggestion is
to use a rental mail box available from Mail Boxes, Etc. These are not
P.O. Boxes and they have an attendant to accept UPS and fedex during
normal business hours. They also offer other business services such as
voice mail and fax reception. This will give your business entity the
appearance of an office address with all the amenities. However, if
asked, always be honest about how you run your company.

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THIS MEMORANDUM IS INFORMATIONAL IN NATURE AND IS NOT AN

OFFERING TO SELL. IT IS BEING FURNISHED TO YOU BY REQUEST ONLY
AND NO INFORMATION WITHIN SHOULD BE CONSTRUED AS A
SOLICITATION FOR ANY OFFERING TO INVEST BY ANYONE RECEIVING IT.

This is a good spot to insert the preceding statement. This helps to

clarify that the memorandum is not an actual offering. Therefore, you
should have more freedom with its distribution.

Distribution of revenues and allocation of profits & losses

HOW IS THE MONEY DIVIDED

The following describes the standard split of income for an investment

in motion pictures. This is usually 50% to the Manager and 50% to the
combined Members. However, you may need to adjust this to favor the
investor if you are having any trouble raising initial funds. Usually, the
Manager will take nothing (100% to the investors) until the investment
is recouped by the investors. At the very least, the Manager should
take a reduced share, maybe 25%, until the Members have recouped.
Thereafter, the split goes into effect.

Revenues from a motion picture will be derived from domestic and foreign
theatrical distribution, sales to television, as well as money making ancillary
rights, such as video cassettes and discs, pay cable and satellite television,
soundtrack recordings, etc.

Revenues received by the distribution company are called gross film receipts.

Gross film receipts will be subject to distribution and merchandising costs

(usually prints and advertising), as well as distributors percentage (as much as
fifty percent). After these deductions the gross film receipts shall equal net film
receipts and shall be subject to production costs beyond the production financing
limited liability company investment capital, such as loans, extended credit and
deferred payments to talent and technical facilities; and the limited liability company
overhead expenses.

After the foregoing deductions, the balance of net film receipts shall equal
limited liability company distributable cash for the production financing limited liability
company, and will be distributed [100 percent] to the Members until their initial
investment is recouped. Thereafter, limited liability company distributable cash shall be
distributed [50] percent to the Members and [50] percent to the Manager.

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Flow Chart

Insert a flow chart to show graphically how the investor's money will
be recouped. You may use the following pages as examples, or you may
fill in the blank version of these flow charts located at the back of the
book.

Insert Flow Chart Figures 1 & 2 here.

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Tax Consequences

TAXES?

Unless you are an accountant or have a precise understanding of the

tax consequences for investing in a motion picture, the following should
be enough to cover this section.

It is the opinion of the Manager that tax consequences of an investment in the limited
liability company may vary depending on the investors personal tax status, and
the Manager is not in a position to give tax advice or evaluate the tax consequences of
this investment for any of the Members. The Manager recommends that all prospective
Members consult their personal tax advisors regarding the projected tax consequences of
the investment.

Sale of Company Interests

This needs to be worded by an accountant who understands the

taxation of gains and/or losses of a capital investment such as this. It
may be possible to leave this out. But, check with your attorney and
accountant first. The following has been known to work in the past.

The Interests offered hereby have not been registered under the Securities Act of 1933, or
any applicable state securities laws. The Interests are transferable only with the consent of
the Manager [unless it is a Member Managed LLC, again consult your Lawyer],
subject to certain conditions including registration of the Interests under the Securities
Act of 1933 and any state securities laws, or the receipt of an opinion of counsel that such
registration is not required. As Members will have no rights to require registration of
their Interests, the Interests may only be resold in transactions exempt from the
registration requirements of federal and state securities laws.

Sale of the Film

Again, this to needs to be worded by an accountant who understands

depreciable assets and the matter in which income or losses are treated.
Again, it may be possible to leave this out. But, check with your
attorney and accountant first. Again, the following has been known to
work in the past.

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An investment in the Interests will be subject to certain risks arising out of federal income
tax considerations, including:

1. The possibility of the Internal Revenue Service audits and resulting possibility of
amendments to the LLC and Members’ tax returns; and

2. Possible adverse tax consequences resulting from changes in the current tax code
and/or administrative interpretations thereof; and

3. Tax liability on the part of Members in the event that the LLC assets (e.g. the
Motion Picture) are transferred voluntarily or by liquidation or foreclosure, if at the
time of transfer the liabilities of the LLC (e.g. for borrowings secured by the
Letters of Credit) exceed the LLC’s basis in its assets (resulting in a taxable gain);
such tax liability would exist even though the LLC would have no cash to
distribute to its Members.

[XYZ Productions]

WHO IS THE MANAGER?

Here is where you really get to sell yourself. This is the section that
explains to the potential investor who you are, what you've done and
why they should trust you with their money. Naturally, any previous
film experience or successes are beneficial here. But, don't rule out any
successes you've had with any other kinds of ventures. Remember,
these are business people that you are presenting to. They may think
the film business is glamorous, but they will be more impressed by
some kind of track record and achievement in any area. After all, they
want to see their money back and beyond that... some profit! So dig
deep and find every accomplishment that is worth mentioning. Don't
forget educational information and even references.

[Ted Chalmers, President - XYZ Productions]

[Ted Chalmers is currently President of his own foreign sales agency, Genre
Pictures International (formerly known as Genre Entertainment). Started in
November of 1992, Genre has been a steady supplier of filmed product to domestic
and foreign distributors. To date, Genre has made over $1 million in sales
revenue for its producers. Products represented by Genre include THE RETURN
OF THE TEXAS CHAINSAW MASSACRE (1995), the fourth sequel to the highly

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successful horror series; THE DEAD NEXT DOOR (1989), a film executive
produced by world renowned horror director, Sam Raimi of EVIL DEAD fame;
SYNGENOR (1990), a science-fiction film featuring effects from the same people
who did ALIENS and THE ABYSS; TEASERS (1993), a sex-comedy starring
Penthouse Pet of the Year, Julie Strain; and many, many more.

Before starting Genre, Chalmers served as Director of Sales for Trans Atlantic
Entertainment where he contributed to the overseas marketing of such diverse
fare as Clive Barker's HELLRAISER film series and I.R.S. Media's ONE FALSE
MOVE. Chalmers came to Trans Atlantic from Rich International when the two
companies merged in early 1992.

At Rich International, Chalmers served under veteran foreign sales executive

Paul Rich as Director of Sales and Acquisitions. There he contributed to the
overseas marketing of such titles as ESCAPE FROM NEW YORK, RAW DEAL (with
Arnold Swarzenegger), Sam Raimi's EVIL DEAD 2, THE GRADUATE and many
more. Rich International represented 500 titles in all, including the combined
libraries of Embassy Pictures, DEG and Nelson Entertainment.
Prior to working with Paul Rich, Chalmers worked on behalf of various
entertainment industry guilds, including the Directors Guild of America and The
American Federation of Musicians, where he worked in the area of accounting and
residual auditing.

Chalmers graduated in 1987 from the University of Southern California, School of

Cinema-Television, with a degree in Film and TV production, fulfilling a life-long
desire to do so. He shot his first roll of film at the early age of ten and has been
involved with filmmaking ever since. He is a native Californian and currently
resides in Los Angeles.]

Rights and obligations of the Members

MAKE IT CLEAR...

It needs to be clearly defined exactly what being a member actually

means. Some people may not understand at first and they may want to
be more hands on than you wish. Make sure to spell it out clearly and
up front as in the example below. They need to know how they fit in
(or don't fit in) and exactly how you plan on running the show. But,
don't rule out the idea of making the investment attractive to them by

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letting them know they can come to the set, or maybe even participate
in the film as one of the extras.

The Members in [XYZ Film Partners] have limited liability because their liability is
limited to the extent of their capital contribution (i.e. their investment). The Members are
protected against any liability beyond their investment, such as over budget costs, loans to
the production, and lawsuits. Any liability beyond the investors capital contribution will
be assumed by the Manager.

The investors are further limited in that they have no say in the running of the limited
liability company. The Manager maintains total control over the running of the business
and total artistic control over the development, financing, and production of the picture.
This includes spending money, maintaining books, hiring personnel, scheduling
production, negotiating contracts, and all other activities necessary for completion of the
project.

The Manager recommends that anyone interested in becoming a Member should consult
the operating agreement for a complete understanding of their rights and obligations.

Rights and obligations of the Manager

MAKE IT CLEAR... (PART II)

Again, you are letting your investors in on everything that you are
planning to do, including paying yourself a fee and the amount, the
availability of limited liability company records and the frequency of
reporting. Also, keep in mind that it is possible to create a so-called
"active-investor" (member-managed) LLC, as opposed to a "passive-
investor" (Manager-managed) LLC, this is a key difference from
traditional Limited Partnerships.

The Manager will assume total control over the running of the limited liability company.
The Manager maintains total control over the running of the business and total artistic
control over the development and production of the film. This includes spending money,
maintaining the books, hiring personnel, assembling components of the film package,
negotiating a distribution deal, structuring the production company, and all other activities
necessary for completion of the project.

The contributions of the Manager shall be the experience, expertise, time, talent, ability,
contacts and enthusiasm required to fulfill the company'
s stated purpose.

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The Manager intends to hire competent and qualified accountants from outside the
company to handle all of the limited liability company book keeping, in addition to
maintaining in-house records.

Company records can be made available to the Members [upon request.]

Statements of limited liability company operations will be sent out to the Members on a
[quarterly basis (four times a year).]

The Manager recommends that anyone interested in becoming a member in the Limited
Liability Company should consult the articles of organization for a complete
understanding of the rights and obligations of the Manager.

Conflict of interest

MORE LEGAL STUFF...

You will most likely have other irons in the fire during the making of
the film described herein. You should let the investor know this up
front as to avoid any misunderstandings down the road.

The services of the Manager are non-exclusive. The Manager retains the right to be
involved with other projects, even similar projects that may be in competition with the
activities of the limited liability company.

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The Motion Picture

WHAT KIND OF MOVIE IS THIS GOING TO BE?

Here is where you describe the story of the proposed film project. This
should be a tightly written synopsis and should not exceed one page. It
is best to have a professional writer do this for you. Usually, the script
writer will have one ready or will write one. But, if you don't even
have a script yet, it is still best to have pro do it for you. If there is a
writer you would like to work with, he may do it on spec (speculation)
in the hopes that you will hire (and pay) him for the actual script. You
can find quality (and hungry) screenwriters at almost any major
university or college near you in the film, TV or communications
departments.

SAMPLE SYNOPSIS:
THE RETURN OF HELL MASSACRE
Synopsis

[In 1971, before Freddy Krueger ever haunted Elm Street and Jason Voorhees ever
stalked Crystal Lake, a group of independent filmmakers in Wisconsin created the most
horrifying screen legend of all time: HELL MASSACRE. Now, twenty years later, the
legend continues with the all-new motion picture, THE RETURN OF HELL MASSACRE.
In this “true” sequel, the saga returns to its roots, re-inventing the twisted tale of murder
and mayhem involving the most dysfunctional family ever, including CLYDE, MAX.,
AUNTIE, and everybody’s favorite screen killer, BLOODSHED! New to the family is the
sexy and seductive SYNDA, whose attractive looks are matched only by her wickedness.

It is Prom Night in a small Texas community. A group of local kids, including shy and
reclusive ALEXIS, head out on a road trip. After a terrible auto accident in which one of
them is wounded, the group of teens split up to search for help. What they find is a family
of loonies led by the diabolical CLYDE, a psychopath with an electric arm and the belief
that he is working for some all-powerful government entity. His assignment: to inflict acts
of true horror! ALEXIS and the others are chased through to woods by CLYDE’s oafish,
hammer-wielding brother, BLOODSHED, who has a passion for wearing human
intestines! Soon they are all entrapped by the beautiful SYNDA, who leads them to the
house of crazies. One by one, each youth meets a horrible fate. ALEXIS, however. is
infused with rage at the madness she is witnessing and stands up against CLYDE and his
brood. But she’ll have to muster all of her wits and strength in order to survive the
insanity!

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THE RETURN OF HELL MASSACRE is an exciting tale of strength and survival against
impossible odds, filled with terror, humor and action! A film that is worthy to call itself
the first “true” sequel to the original classic!]

Legal and accounting services

THE MANAGER'S COUNSEL

It is also a good thing to list the contact information for your attorney
and accountant. Any serious investor will want this. They may even
have their own counsel contact them to check you out. It is all part of
the game. Finding an attorney and accountant can be tricky. It is best
to use professionals that are actively involved in the entertainment
field. But, since most of these specialists are in L.A. or New York you
may have to settle for the best that you can find nearby. There are
many attorneys who specialize in intellectual properties and copyright.
But, it is very important that it is someone who has dealt with LLC and
limited liability company offerings similar to the one you are putting
together. Your local or state bar association should be able to help
guide you in the right direction. Also, accountants specialize in all
kinds of areas. You may simply want to find an accountant who has
been involved with LLC or limited partnership offerings. In both
cases, a retainer fee may be required. But, this might be negotiable.
Sometimes, they might work for a contingency or their fee can be
structured into the funds you are raising. It never hurts to ask.

The limited liability company is legally represented by John Smith, of the entertainment
law firm, Smith & Smith. Their contact information is as follows:

[Smith & Smith]

[1901 Avenue of the Stars, Suite 100]
[Los Angeles, CA 90067]
[Attention: John Smith, Esq.]

[Phone: (310) 555-5555 Facsimile: (310) 555-5556]

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The limited liability company accountant is Bob Jones. His contact information is as
follows:

[Bob Jones, CPA]

[3940 Wilshire Blvd., Suite 110]
[Los Angeles, CA 90067]
[Attention: Bob Jones]

[Phone: (310) 555-5555 Facsimile: (310) 555-5556]

Distribution

HOW WILL THE FILM MAKE MONEY?

It is generally a good idea to explain your plan for getting the investors
money back (and profit). Once a film is made it has to be distributed
both domestically and in the international markets. If you have a
relationship with a distributor, you may be able to get them to sign on
to your project. But, in most cases, you will have to start from scratch.
You can make a presentation to a number of distributors explaining
your project, the story, the cast, the director and the budget. You may
get enough interest to use their name in the memorandum. If you are
lucky enough to get a distributor to sign on who has a track record
with well known films, the easier it will be to raise funds from
investors. However, most distributors prefer to see finished product or,
at the very least, some production footage before committing to the
marketing of your film. By the way, don't look to distributors for
production money. That's not their business. They buy and sell films,
they don't produce or finance them, except on rare occasions.

Another option is to self-distribute your film. This can be done both

domestically and overseas. This will not hurt your chances of raising
money, so long as you use a detailed marketing plan on how you plan to
self-distribute your film. It is not as hard as it sounds and many
producers who have done this have been successful at it.

Another option is to simply say the following: The producers will use
their best efforts in securing a reputable distribution company that will
be best suited for the marketing of the picture in the best interest of the
limited liability company. You can mention the minimum you will be

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asking for in this case, but these days, getting minimums or advances
from a distributor is next to impossible. Be careful before you put in a
minimum that can't be met.

[Genre Pictures International shall represent the limited liability company in the
marketing and distribution of the completed film. Genre Pictures International is
qualified to handle the marketing of the film as it has recently closed deals on its product
with A*Vision Entertainment (a Warner Communications Company) for North
American home video, with USA Networks for U.S. Basic Cable and has concluded
distribution deals in major foreign territories such as Japan, France, the United
Kingdom, Taiwan, Malaysia, South Africa, The Philippines, Latin America and
the list goes on.

Genre Pictures International shall be entitled to a commission of 15% on gross

revenues from all sales derived for the feature film. This is half the commission
charged by competitive sales agencies, and a third less than the share taken by
most distribution companies. The benefit to the member investors is
that there is no middle man and a return on their investment is more likely.

Furthermore, Genre Pictures International has already secured strong interest on

the film from certain territories during the past American Film Market.]

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Budget

WHERE IS THE MONEY GOING?

Here you should show -- in general terms -- how you plan on spending
the investors money. You do not need a detailed budget for this. What
is commonly known as "the top sheet" budget will do. The best way to
know how much a movie will cost you and where the money will be
spent is to hire a budgeting and breakdown professional. These are
usually Production Mangers who are freelancing between jobs. They
usually advertise in the trade papers (HOLLYWOOD REPORTER;
DAILY VARIETY). But, if you don't even have a script yet, you may
just have to base the budget on other similar productions. A good
source of budget info (even over the phone) is The Academy Of Motion
Picture Arts & Sciences Library. Reach them by calling (310) 247-
3020.

EXAMPLE BUDGET:

[Development: $30,000.00]
[Pre-Production $70,000.00]
[Production $200,000.00]
[Post Production $150,000.00]

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Timetable

HOW LONG WILL THIS TAKE?

You might want to include a time table to give an idea to the investor
how long you will tie their money up. But, be clear that this is just an
example and not a actual schedule.

The following is a tentative time table for the benefit of the investor to better
understand the time involved in making a motion picture. These are not firm
commitments, but are anticipated time periods and may change as need requires.

[1st week begin script polishing

begin casting
begin crew allocation
begin location scouting
lock production schedule
allocate equipment, props &
costumes
begin set construction

2nd week casting completed

crew allocation completed
locations secured
begin rehearsal
equipment, props & costumes
secured

4th week begin production

begin editing

5th week end production

6th week first cut completed

8th week second cut completed

10th week fine cut completed

begin sound cutting
begin music composing
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11th week score music

12th week sound editing completed

mix sound

13th week transfer to optical

track
begin negative cutting

14th week negative cutting completed

begin first trial answer
printing

15th week screen answer print]

Once the film is completed, it is estimated that approximately one (1) year will be
necessary for recoupment of production costs through normal distribution channels. The
producers intend to use their best efforts in securing a distribution pattern that will not
only maximize the rate of return to the Members, but also to insure that a generous profit
can be realized.

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Risk Factors

Again, you can't say this kind of thing enough...

Motion picture investment entails a high degree of risk even when the picture is
substantially packaged prior to financing. Recoupment of the investment and
additional profits are largely a function of the film'
s cost of production and
distribution in relation to it'
s public appeal. The extent to which the picture will
appeal to the public is largely dependent upon unpredictable critical reviews and
public taste.

The positive side is that there is potentially no limit to the amount of money a film
can generate. However, if the film does poorly in sales and the Manager
is unable to secure enough distribution agreements, the Members will lose
their entire investment and will have no opportunity to recoup their investment
by investment in, or cross collaboration with any other picture. The Manager is not liable
for any monetary loss incurred by Members as a direct result of investment in [XYZ Film
Partners LLC].

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Current Attachments

WHO WILL WRITE, DIRECT AND STAR IN THE FILM?

If you have any commitment from talent or crew, you should list them
here and be sure to include their credits and/or qualifications. If you
don't have anyone signed on yet, don't panic. This is a good place to
list the kind of actor, writer or director you wish by naming examples.
For instance, you might want to say that for the lead roles in your film
you will use your best efforts to obtain a cast similar to the following:
Stephen Baldwin, Cher, Madonna. Be careful though. Keep your
"wish list" within the realm of sanity and your budget. Otherwise,
your investors may claim that you misled them.

[Jack Smith, Director]

[Inspired by the 36 films of Abbott and Costello, New York native Jack fashioned himself
into a clown, comedian, actor and finally writer and director. Jack obtained his first
video camera at age 14 and immediately began making films. At age 16, he made "dead,"
and for a budget of $365, " Numbers." While still in High School, he wrote, directed and
produced the combination play/movie, "Murder In Blue."

A horror film buff since childhood, Jack eagerly watched every horror film available. He
discovered that for every well-made film there were dozens with ridiculous, over-used
clichés. "I love good horror films and good comedies," says Jack. "So why not combine
my two loves by spoofing the clichés and at the same time create a scary film that stays
true to the genre." The result was Jack's first full-length feature film, "There's A Sound."
A critical and cult success, TAS was financed through friends and relatives and cost
about $500,000.00. The film was released here in the U.S. through Home Video and it
has played on HBO. The film has also sold all over the world.

After TAS, Jack went on to direct, " Treasure," a family adventure. Currently, Jack is
writing, " Ninja Man" for Universal.]

[Barbara Slater as Ms. Puddle]

[Playing Ms. Puddle is scream queen, Barbara Slater. BARBARA is a prolific genre
actress whose credits include PARTY MASSACRE, SPIRIT ,MOTHER'S HOUSE and
HAUNT. BARBARA starred in the cult film THE SLIMEBALL SISTERS, as well as the
space epic, INFINITY. She is also appearing in the original TV presentation of
IMPULSE.

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As a journalist, BARBARA is a regular contributor to CINEFAN MAGAZINE. She has

contributed numerous articles,interviews, etc., to genre magazines such as MONSTER-
LA, HORROR and TALES.

BARBARA has been featured in stories profiling her career on CNN, JENNY JONES,
ENTERTAINMENT TONIGHT, HARD COPY, DOWNEY, JOE BOB BRIGGS and THE
SCI-FI CHANNEL.]

[Special Effects, Kermit Jayson]

[Kermit will oversee the creation of the many needed special make-up effects through his
FX shop, located in the valley, California. Kermit’s credits include ALIEN DARK and
SOLDIER TASK.]

[Line Producer, Michael Knob]

[Michael has had many years producing and directing television projects andmusic
videos. Recently, he line produced TV's Ben for XYZ Productions and is currently
involved as a producer for TV's Buggin'.]

Additional Information

HOW MUCH CAN I MAKE?

This is where you show the investors the kinds of revenue that the film
business can generate. Go to the library and research grosses on film
projects that are similar to yours in terms of cast, budget, genre, etc.

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Example:

TITLE BUDGET WORLDWIDE GROSS

[The Armchair Bandit $450,000.00 $7.5 million]

[Bad Men $550,000.00 $8 million]

[Asphalt Hell $375,000.00 $9.9 million]

Try to use the norm, instead of the exception. Don't try to oversell the
project by promising $100 million grosses.

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Appendices

Appendices can include any kind of information you like. For instance,
a recent magazine article on some successful LLC or limited
partnerships and the films they produced or notices for any attached
actors, writers, etc.

It is customary to have a copy of your Operating Agreement on hand

when you are submitting the Investement Memorandum. The next step
after they have read the Investment Memorandum is to request such a
document. You may include a “sample” of the document in the
appendices. You may also send it under separate cover.

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