TABLE OF CONTENTS

1.0 Executive Summary ……………………………………………………… 1

1.1 Objectives ………………………………………………………….. 3
1.2 Mission ……………………………………………………………. 3

2.0 Market Analysis Summary ……………………………………………… 5

2.1 Target Market Summary Strategy …………………………………. 7

3.0 The Programs of the Micheaux Foundation ……………………………. 8

4.0 Recognizing and Fulfilling a Need ………………………………………. 12

4.1 Competitive Edge ………………………………………………….. 15
4.2 Sales Strategy ………………………………………………………. 16
4.3 Milestones ………………………………………………………….. 23

5.0 The Board of Directors ………………………………………………….. 24

5.1 Film Production Personnel ………………………………………… 26
5.2 Personnel Plan ……………………………………………………... 31

6.0 The Financial Plan/Repayment Proposal ………………………………… 31

6.1 Important Assumptions ……………………………………………. 32
6.2 Break Even Analysis ………………………………………………. 32
6.3 Projected Profit and Loss …………………………………………... 33
6.4 Projected Cash Flow ………………………………………………. 34
6.5 Projected Balance Sheet ……………………………………………. 35

7.0 Income Generating Assets…………………………………………………. 35

EXHIBITS

A Tentative Three Year Production Timeline……………………………… 39

B Projected Two Year Distribution Revenue Stream ……………………… 42
C 200 Print Release Scenario …………………………………………… 43
D Story Treatments: "Grounds for Divorce"……………………………….. 44
"Tied Apart"…………………………………………. 46
"Harry's Number" ……………………………………….. 47
"Nat" ……………………………………….. 47
"Talented Tenth" ……………………………………….. 48
"Thirteen Straight" ………………………………………. 49
E Grounds For Divorce Budget/Breakdown ………………………………. 52
F Projected three-year Balance Sheet ……………………………………… 66
G Micheaux Foundation 501(c) 3 and Promotional Materials……………… 72
1.0 Executive Summary
The Micheaux Foundation was organized and officially chartered in March
1994, in Washington, D.C., as a non-profit, 501(c) 3 tax-exempt corporation. Its
principal offices are located at 611 Pennsylvania Ave., SE Suite #200,
Washington, D.C. 20003. Clifford E. Pulliam serves as its President and
Executive Director.

The Micheaux Foundation was created to support and promote emerging and
aspiring traditionally under represented independent screenwriter/directors and
their films through production grants, workshops and an annual film festival.
The Micheaux Foundation is a 501(c) 3, non-profit arts private foundation.
Individual donors will be sought in addition to funding through foundation and
corporate grants. The Micheaux Foundation will also seek private capital
investment from individuals who share a passion for filmmaking as a craft and
who embrace the very nature of independent film production, as the means for
less formulaic, more personal films to be produced and made available to
audiences who crave them.

The Micheaux Foundation is named in honor of Oscar Micheaux, one of the

pioneer African American filmmakers of the early 20th century, who was known
as the most creative and the most innovative filmmaker of his day. He wrote,
directed and produced 40-50 powerful films, displaying positive images of
African Americans, between the years of 1915 and 1948 with the financial
support of the African American community. His films often conveyed a political
message and were derived from books that he authored. They were among
several films that were being made by African American filmmakers to
counteract the negative images displayed in the 1915 film "The Birth of a Nation"
and the resulting negative portrayal of African Americans in print as well as the
visual media. Micheaux distributed his own films, traveling from city to city
throughout the world to exhibit the films, often re-editing them as he traveled.
He had offices in New York, Chicago and in London. Oscar Micheaux was the
first filmmaker to portray African Americans as heroes, creating African
American film stars in the process. He was the first to draw a huge and very
loyal African American market that starved for films that portrayed people who
resembled them in a more positive, or at least, accurate light. This is a valuable
lesson for the contemporary film industry to learn.

The visual media of television and film have a deeply profound influence on the
self-esteem of people of color and there is a price to be paid when our stories are
being told by storytellers who are from cultures other than our own. Our
opinions of ourselves are often shaped by the images that are seen on television
and on film. Since the most influential export that this country offers the world

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are our films, the opinion of the world is also shaped by the images that are seen
on film. Traditionally, one can ascertain the prevailing stereotypes for all people
of color by examining the way non-white characters are portrayed in film. For
example, if the only images of African American males on film are those of
thugs, buffoons, or otherwise weak minded non-essential characters; without a
proper balance of characters of morality and strength, young and impressionable
minds as well as those who would not be in a position to know otherwise, will
adopt these less than positive images of African American males as the standard
profile for African Americans males. Likewise, when African American women
are only portrayed as nannies or sluts, these images will prevail. The visual
media has also similarly stereotyped Hispanic and Asian characters. This is not a
novel concept. "Birth of a Nation" was such a powerful influence upon society,
portraying African Americans in such a derogatory light, that it threatened to
wipe out the previous fifty years of societal progress that had been achieved by
recently liberated African Americans. The film glorified the violence and
lynching that were perpetrated by the KKK. Moreover, the film was endorsed by
the majority print media and by then-President Woodrow Wilson. African
Americans were powerless to influence the fledgling Hollywood film community
to portray them in a positive light so they sought to compete with their own
films. Oscar Micheaux was the most prominent of the creators of "Race" Films, as
they were called. He and other African American filmmakers received financial
support from the African American community and, in turn, portrayed African
Americans as heroes and heroines of substance and fortitude. These films were
exported to a worldwide audience, who, for the first time, learned that African
Americans were lawyers, doctors, teachers, pilots, husbands and wives. The
lesson to be learned then is still one to be learned today. A people cannot sit
back and expect other people to tell their story for them, then complain to them
when that story is not told favorably. John Wayne was once asked why the
Indians always lost in his films. He replied that the Indians, if they want to win,
should make their own films.

As we all know, there is a controversy that has arisen from the lack of diversity
in television programming. Kweisi Mfume and the NAACP, along with Rev.
Jesse Jackson have challenged executives of the television networks to promote
more diverse casting and storytelling in their shows. Likewise, there has been a
drought in the number of independently produced films by filmmakers of color
since the early 1990’s when these filmmakers were beginning to show limited
signs of proliferation. The lack of diversity in television and film has created a
lack of job opportunities for all non-white industry professionals who work
behind and in front of the camera. This "diversity drought" is caused by the
dearth of financial resources within the affected communities. As an
independent filmmaker who has worked on both coasts, I have witnessed, first
hand, the disparity that exists between the majority and minority community of

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filmmakers. I have worked with and for Eurocentric filmmakers, many of whom
have been born into wealth, who were able to finance their film projects with
hundreds of thousands to millions of dollars from their family fortunes.
Ethnocentric filmmakers, most of whom are without such resources, are usually
forced to produce their projects by shooting on weekends over a period of many
years. The resulting product is usually substandard and non-competitive in the
commercial marketplace. The intended audience is hungry for these provocative
and thoughtful stories and would gladly pay to see them. They seldom get this
opportunity due to the lack financial resources necessary to bring these stories to
the theaters. The Micheaux Foundation has been created so that filmmakers of
color may be able to compete rather than to complain! Our remedy to the
aforementioned condition will be derived from our proposed programs.

1.1 Objectives

• Promote diversity in film and television by providing training to aspiring

filmmakers who have been traditionally underrepresented in these media.
• Create opportunities for traditionally underrepresented filmmakers by
providing production financing for ten full-length feature films and
twenty dramatic and documentary "mini-feature" films that provide
balanced portrayal of people of color.
• Provide employment opportunities for film and television actors, technical
specialists, producers and post-production technicians who have been
traditionally excluded from employment opportunities with studio-
financed films.
• Distribute the feature and "mini-feature" films to a worldwide theater and
Internet audience.
• Repay financiers/equity investors, and to finance the future operations of
The Micheaux Foundation with post-distribution net profits
• Duplicate these operations in other urban centers around the country.

1.2 Mission

Provide a strong catalyst for the expansion of the Washington, D.C. - area
film industry by increasing local film production and exhibition activities
with the cooperation and the support of the D.C. Office of Television and
Film.

The Foundation will, over the course of the next four to six years, finance and
oversee the development and the production of ten feature length and twenty
dramatic short films and documentaries by filmmakers from around the
world. The Foundation will place its emphasis on works created by
traditionally under represented Washington D.C. - area writer/directors with

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 films to be shot on location in the Washington D.C. - area. The production
budget of all films will be in the low-budget category of under $1.5 million,
and will feature multi-cultural casts and multi-cultural production crews.

1.2.1 What Will Be the Impact of Our Mission?

What does The Micheaux Foundation hope to accomplish by financing ten

feature films and twenty short films? Consider the fact that one low-budget film
employs 60-80 highly trained specialists, including actors, producers, directors,
cinematographers, music composers, camera operators, electricians (gaffers),
lighting technicians, sound technicians, grips, hair and makeup artists, set
designers, art directors, wardrobe masters, location scouts and managers, prop
masters, film editors, sound editors and various post-production technicians.

1.2.1a The Feature Film Initiative

We propose to produce ten low budget feature films over a four to six year
period. This would create as many as 600-800 opportunities for income,
employment and experience for local filmmakers, for whom these opportunities
have been traditionally few and far in between in this area.

"Mini-feature" films utilize a scaled-down cast and crew for budgetary reasons.
Nonetheless, a cast of ten and a crew of twenty technicians is not an unusual
occurrence for a "mini-feature" film, which varies from a feature-length film only
in duration (30 minutes as opposed to 120 minutes) and number of shooting days
(5-10, as opposed to 30-60).

Our proposal to produce twenty short films over a four-year period would create
as many as 600 opportunities for income, employment and experience.

The total impact from Micheaux Foundation Feature Film Initiative will be the
creation of over 1,200 income, employment and experience opportunities over
the next six years (approximately), for local union-affiliated and non-union
affiliated artists and technicians who cannot progress in their careers without
such opportunities. Non-union-affiliated artists and technicians will, as a
result of this work on an union-affiliated film, will become eligible to join
their respective trade unions. Union affiliation will guarantee their right to
union minimums in salary and benefits.

1.2.1b Each One Teach One

The "Each One Teach One" Workshops for "At Risk" Youth will, over the next
four years, provide approximately 120 adolescents with their first exposure to the
film industry.

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1.2.1c Professional Workshops
The Professional Workshops, held quarterly over the next six years, provide
continuing education for up to 320 film technicians.

1.2.2 The Long Term Vision

Over the long term, the "big picture" goals of The Micheaux Foundation are as
follows:

• Provide the catalyst to create a viable independent film industry in

Washington, D.C. by producing films utilizing local cast, crew, post-
production houses and equipment rental houses.
• Create sufficient film and television production opportunities to provide
continuous employment for local filmmakers by placing local filmmakers in a
position to produce their future projects locally.
• Provide training for aspiring young filmmakers as well as continuing
professional training for established filmmakers so that they may become
more marketable and progress in their film industry careers by giving them
exposure to established filmmakers with "state of the art" knowledge.
• Produce and promote films that display a balanced portrayal of multicultural
people of color to a worldwide audience by allowing multicultural
filmmakers an opportunity to tell their unique stories.
• Foster a greater level of understanding in non-ethnic audiences by presenting
stories that they would not otherwise be able to experience.

2.0 Market Analysis Summary

Over the past fifteen years, there has been a steady decrease in the volume of
major studio-financed feature films. As a result, there has been a major increase
in the number of small and intermediate sized independent production and
distribution entities to fill the product void. These independent filmmakers, with
independent financing sources, represent the future of the film industry.
Independent filmmakers develop lower budget films which are inclined to be
less commercial, less star-driven, more story and acting oriented than the
product released by their "deep-pocketed" competitors, the major studios. The
major studios have discovered what the independents have always known. By
keeping down production costs with lower-priced talent and smaller production
staffs, costs to profit ratios can be greatly enhanced. The studios, however, carry
tremendous fixed overhead, including permanent payroll and oppressive
technical guild obligations that increase the cost of any film to be produced "in-
house". Consequently, the increasing trend over the past fifteen years has been
the "negative pickup" deal in which the studio purchases a finished film negative
("in the can") by an independent producer for approximately the production cost

6
of the film, known as the "negative cost".

Prevailing major studio accounting techniques have dictated the rule of thumb
that a studio-produced film breaks even only after its box office gross has tripled
the production cost of the film. With the present average cost of 25 million
dollars per film; for example, a studio-produced film breaks even at 75 million
dollars in box office revenue. An experienced independent filmmaker, without
high studio overhead, is able to produce a film that is comparable in quality for a
fraction of the cost.

Independent filmmakers who have demonstrated a track record of producing

high-quality films at low cost that make a profit are often given a "negative pick-
up" deal by the major or intermediate-sized studio/distributors by which that
studio/distributor commits to the distribution of an agreed-upon number of
films by that independent film production company. With a distribution
guarantee from an established distributor in place, many sources of financing are
available to the independent producer that would not have been otherwise
available.

A symbiosis is created between the independent producer and the distributor.

The studio can avail itself of lowered financial exposure by buying and
distributing the finished film negative without a large front-end capital
investment for production funds. The independent producer can avail him/her
self of the studio's vast distribution and exhibition network and promotional
machine that will present the film in first run theaters worldwide. This provides
unlimited upside potential for the independent producer while minimizing the
financial risk for the studio.

How are independent producers able to finance their initial production efforts
without a distribution commitment? Unsecured bank financing is not available to
most independent producers. Investors are usually hesitant to expose themselves
financially for a filmmaker without a strong track record. Presales to foreign
market distributors are a near impossibility for unknown independent
filmmakers.

Affluent new filmmakers, who may have access to financing from family sources
or through second home mortgages are most often the only new independent
filmmakers who complete their films. The result is a skewed vision of the
American experience being presented to the world. Many very important stories
from members of less-privileged and more diverse urban communities and from
female writers will never be told unless financing sources become available
within these communities.

7
THE MICHEAUX FOUNDATION has been created with a mission to remedy
this situation. The Foundation, through financial grants, educational and
promotional activities seeks to place its filmmakers' films into the established
worldwide film festival and theatrical distribution networks.

2.1 Target Market Segment Strategy

Our target market are the established theatrical distribution companies, which
are subsidiaries of the major and mid-sized motion picture studios, i.e., New
Line Pictures, Paramount, 20th Century Fox, Sony Columbia,
Disney/Touchstone and Warner Brothers. In addition, cable television
(Showtime and HBO) and broadcast television distributors will be interested in
our product offerings.

It is the job of the Acquisitions Division personnel of the above-mentioned

entities, to seek out and to purchase theatrical product for distribution. These
acquisitions executives and their assistants attend major and minor film festivals,
while subscribing to trade publications where new films and films in various
stages of production are being advertised, i.e. The Hollywood Reporter,
Dramalogue and Variety, to name but a few.

"Grounds for Divorce" is being featured in Hollywood Reporter's "Production"

section and has already received numerous inquiries from industry personnel.
As detailed in §4.2 "Sales Strategy" (infra), The Micheaux Foundation and its
producers have already initiated its marketing campaign toward distributors,
which will intensify once the budget has been raised and pre-production begins,
in April, 2000.

In the event that The Micheaux Foundation fails to secure distribution through
the major distribution network entities, the second-tier distribution channels will
be pursued, i.e. "art house" or nationwide independent exhibitors and home
video distribution.

Our end-user target market, are audiences from across the cultural spectrum.
Multicultural-cast films have proven to appeal to a diverse "crossover" audience

(See §§4.1, 4.2 infra) for more details

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3.0 The Programs of The Micheaux Foundation
• “Each One Teach One” Workshops for Youth “At Risk”
In order to spur an interest in films as a career option and to ensure the
sustainability of the vision of The Micheaux Foundation, annual “hands-on”
workshops are being planned for youth “at risk”. These workshops will
provide adolescents an opportunity to gain exposure to the various career
opportunities that are available to them in film production. Most high school-
aged youth are not aware that there are hundreds of film production-related
careers that they can pursue at the collegiate level, other than the highly
exposed positions of actor, director and producer. The Micheaux Foundation
will introduce a crew of established and working film professionals to the
high school-aged residents of the Barry Farm Public Housing Dwellings in
Southeast Washington, D.C. Approximately 30-40 adolescent participants in
the workshop will be divided into groups, each assigned to be mentored by
African American film professionals, in an “Each One Teach One” format.
Each instructor/filmmaker will mentor his/her group as an actual “mini-
feature” film is shot at Barry Farm Dwellings. We hope that this first-hand
exposure to the process of film production will spur an interest in the
participants that will encourage them to pursue a career in film production
after applying to the Howard University School of Television and Film, or
any of the other local university film programs. The Micheaux Foundation
will receive parental or guardian consent before admitting workshop
participants.

Once the film is completed, the workshop participants and their families will
be transported by bus to the Howard University Theater for the premiere
screening of the completed film. We believe that the workshop will represent
a major turning point in the lives of 30-40 “at risk” youth every year. Repeat
participation will be allowed if space permits.

“Each One Teach One” Program Breakdown

Gross Receipts: n/a

Expenses (2 day workshop)
Ten Technicians/Instructors @ $200./day $2,000.
Equipment Rental/Insurance $4,370.
Filmstock (3,000’ @.25/ft) $ 750.
Post Production/Print Dubbing $3,125.
Projector Rental $1,200.
Participant Transportation $1,200.
Howard University Theater Rental $1,000.
Food/Contingency $ 600.
Total Workshop Expenses $14,475 (Net Profit: n/a)

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• The Feature Film Initiative
The Micheaux Foundation will produce at least ten feature films for
commercial distribution. These feature films, budgeted at a maximum of
$1.5 million each, will provide:
1. a creative outlet to tell the unique stories of multiple cultures
2. exposure for underrepresented Washington D.C.-area
filmmakers,
3. an income stream after the release of each film that will help to
finance the operations of The Micheaux Foundation, including
future film projects.

“Grounds for Divorce” is the first feature film to be produced under this
program. Exhibit E details the budget for cast , crew and production. All of
the feature films will be produced under similar budgetary and scheduling
parameters.

• “Mini Feature” Film Production

The short film genre, or “mini-features” are not only a valuable learning tool
for filmmakers, but provide an outlet for stories that is unencumbered by
commercial expectations. The Micheaux Foundation will produce five “Mini-
features” per year, for a total of at least 20 projects for underrepresented
filmmakers in the Washington D.C.-area. The completed films will be
premiered at the annual film festival, then will be submitted to festivals in the
worldwide film festival circuit. It is hoped that some of these films will
receive Academy Award consideration in the short film category. This
program is designed to create invaluable exposure and career enhancement
possibilities for underrepresented Washington D.C.-area filmmakers.

The “Mini-Feature” Film Program Breakdown

Gross Receipts: n/a

Expenses: (per “mini-feature” film)
Production Manager/Supervisor (5 days @ $250/day) $ 1,250
Production Crew of 30 @ $125./day $18,750.
16mm Kodak Filmstock (approx. 2400’ @.20/ft.) $ 480.
Camera Package Rental (5 days @ $400./day) $ 2,000.
Sound Package rental (5 days @ $125./day) $ 625.
Lights/Electrical Rental (5 days @ $125./day) $ 625.
Film Processing/Sound Sync/Video XFR ($.67/ft) $ 1,608.
Online Video Edit (AVID) (10 hours @ $50/hr.) $ 500.
Negative Cut/Exhibition Print $ 500.
Contingency $ 3,662.
TOTAL BUDGET – One “Mini-Feature” Film $30,000.

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• The Micheaux Foundation Training Center/Production Facility
The Foundation is seeking to purchase an abandoned city-owned property in
Washington, D.C. for the purpose of renovating the property so that it will be
suitable for:
a. The Micheaux Foundation’s administrative offices
b. The Micheaux Foundation Training Center – the site of the
professional workshops and the weekly Fearless Acting and
Writing Workshops.
c. Production Facility – an indoor soundstage which will be
available as multiple locations for Micheaux Foundation –
sponsored productions as well as for outside productions on
a daily rental basis.
d. Post Production Editing Suite – which will feature state of
the art non-linear digital editing capability (AVID) and
digital video and film camera and production sound
recording packages which will be available for Micheaux
Foundation-sponsored productions as well as for outside
productions on an daily and hourly rental basis.

The production facility will provide an additional income stream for The
Micheaux Foundation. (§7, pg. 35)

• The Professional Workshop Series

The Foundation will sponsor and promote quarterly workshops for the
continuing education of filmmakers. These workshops will encompass all
relevant aspects of he artform and the business of film, and will be required
for all Foundation – sponsored filmmakers. The workshops will be taught by
established filmmakers and university film faculty members and will
encompass a wide variety of subject areas, included, but not limited to,
screenwriting, limited-budget "guerilla production" techniques, legal and
financial aspects of production and distribution, techniques in
cinematography and training in the various technical crew positions. The
participant fees of $195-$250 per eight-hour series will cover the costs
incurred for instructor fees and materials. The workshops will provide
continuing education for working and aspiring filmmakers whose exposure
to the current state of the art techniques is crucial for their ability to progress
in their careers.

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 The Professional Workshop Program Breakdown

Gross Receipts: 25 Enrollees/one day workshop @ $225/day: $5625.

Expenses (one day workshop)

Lecturers $ 450.
Per Diem $ 50.
Airfare (if applicable) $1,400.
Hotel (if applicable) $ 200.
Workshop Materials $ 450..
Food/Beverage $ 50.
Print/Radio Promotion $1,000.
Contingency (10%) $ 420
Total Workshop Expenses $4,020

Net Profit per Workshop Day: $1,605.

• The Annual Micheaux Foundation Film Festival

.The Micheaux Foundation will premiere the work of its sponsored
filmmakers in an annual two night festival at the Howard University Theater.
Each featured filmmaker will be required to sell a designated number of
tickets. Up to 20 short films will be premiered for a total of 300 guests whose
tax-deductible donations will defray the costs that will be incurred in the
production of the festival. Members of the local arts community, news media
and political community will receive complementary passes to encourage
their participation. Local film critics will be invited to critique the films.

The Micheaux Foundation Annual Film Festival Breakdown

Gross Receipts: 300 patrons @ $25 per ticket/ each night $ 7,500.

Expenses: (two night festival)

Theater Rental @$1,000./night $ 2,000.

Print/Radio Promotion $ 2,000.
Equipment Rental $ 1,000.
Printing Expenses (invitations) $ 1,500.
Total Festival Expenses $ 6,500.
Net Profit: $1,000.
• The Oscar Micheaux Scholarship Endowment Fund
The Foundation will endow an annual $20,000. scholarship fund at the
Howard University School of Film and Television. In this way, prospective
film students who display exceptional promise, but lack the necessary
financial resources to attend film school may be given that opportunity. The
fund will especially target participants of the “Each One Teach One”
Workshops. The scholarship will be funded in bi-annual installments of
$10,000., to be administered in accordance with Howard University’s

12
 disbursement procedures.

In exchange for this endowment, Howard University will be asked to provide

equipment and student interns to The Micheaux Foundation. A Howard
University Film School faculty member will be encouraged to serve on our
Board of Directors.

• "Filmmakers’ Focus" Television Series

The Foundation has sponsored and produced a weekly one half hour – long
public access television series that has featured some of D.C.’s most
promising writer/directors, while showcasing their work. The D.C. viewing
audience very well received the show. The Foundation has placed
"Filmmakers’ Focus" on hiatus while revenue sources are being pursued to
move the show to a larger audience.

• Websites:
"www.micheauxfoundation.com" is the website that is currently under
construction. It will provide Internet users with an opportunity to read this
mission statement and operating budget and to correspond by email at:
flixbiz@hotmail.com. The website will be forwarded electronically to
targeted corporate leaders who are potential donors. When completed, the
website will allow secured credit card donations online.

"www.ourflixonline.com", once it has been completely developed and hosted by

a broadband technology internet service provider, will become our internet
distribution resource. It will be possible to view our feature length and "mini-
feature" films on video stream. We will transmit our promotional trailers of
upcoming feature films, along with on-set production video and interviews
with the filmmakers as their films are in production.

4.0 Recognizing and Fulfilling a Need

At this time, there are no grant funding sources specifically available to

emerging inner city independent filmmakers in the Washington Metropolitan
area. The studio production system is undergoing a cutback in the number of
films to be financed, making it nearly impossible for an unknown to obtain
studio financing. Studio funding is available primarily as a reimbursement
for filmmakers with films "in the can", i.e., complete and distribution-ready.
We intend to place our filmmakers into this position. There is untapped
talent outside of the major entertainment markets of N.Y. and L.A., where
film studio executives frequently travel to find new talent. The nation’s
capitol and the surrounding metropolitan area are underrepresented in the

13
 film industry. It is very difficult for any emerging filmmakers from this area
to be "discovered", regardless of their level of talent and potential, without
relocating from the area to N.Y. or L.A., the major markets. This has created a
"Catch-22" in this area. The filmmakers who have the potential to create a
local film industry in the D.C. area must leave the D.C. area because of the
lack of local film industry activity.

The goal of The Micheaux Foundation is to begin the process of establishing

the nation’s capitol as a film industry center that will be capable of
supporting its local talent.

4.0.1 THE MARKET ANALYSIS OF SIMILAR ORGANIZATIONS

• The Sundance Institute

The Micheaux Foundation, as an educational support and funding source for
independent filmmakers, will share this market with one major competitor.
The Sundance Institute, founded in 1981, is a non-profit corporation with
offices in Los Angeles, CA and Park City, Utah. Robert Redford and Gary
Beer are its President/Founder and Executive V.P., respectively. The board of
directors consists of 26 members. The Sundance Institute sponsors workshops
and an annual film festival, which is very established and has premiered
Sundance-developed projects such as El-Norte, Zebrahead, Sex, Lies and
Videotape, House Party, Johnny Suede and Desert Bloom.

The Sundance Institute has as its primary role, mentoring writers, producers
and directors and developing their feature-length films to be produced with
studio and independent funding from sources other than The Sundance
Institute. Sundance receives applications from filmmakers worldwide for the
ten to fifteen slots that are available annually for project support in various
forms. While Sundance considers projects from unproven as well as
established writers and directors, the worldwide competition for this limited
number of opportunities is intense. There is no stated set-aside for inner city
or female filmmakers with limited resources.

The Micheaux Foundation was conceived, in part, due to the overwhelming

growth of The Sundance Institute and the need for a similar resource to serve
a more localized and less established segment of filmmakers. The Micheaux
Foundation, using The Sundance Institute as a model, will evolve in the
direction of The Sundance Institute by expanding to include a worldwide
market and by establishing itself as an important venue in the worldwide
film festival circuit without losing its focus on developing talent from the
Washington D.C. metropolitan area.

14
 In addition to the select number of designated slots for filmmakers from the
D.C. metropolitan area, the Micheaux Foundation will consider and sponsor
filmmakers from around the world.

• The Black Filmmakers Foundation (BFF)

The Black Filmmakers Foundation is a membership-oriented non-profit
support organization for independent filmmakers. The BFF sponsors
workshops, Exhibits films by its members and maintains an extensive
member job database through which productions may utilize the talents of
those BFF members who are registered. BFF serves filmmakers in New York
and Los Angeles, where the BFF has offices.
The BFF is a valuable resource for independent filmmakers, offering all
support services other than funding for filmmakers. The Micheaux
Foundation will encourage its sponsored filmmakers to become active
members of the BFF and to utilize the resources that are available to them
through the BFF.

The Micheaux Foundation will provide many of the resources available to

BFF members, but will serve filmmakers both from within and outside of the
heavily services markets of N.Y. and L.A. The Micheaux Foundation will also
provide grant funding, which is not presently available through the BFF. The
two organizations will not be in conflict, but will work jointly toward the
common goal of supporting under represented filmmakers.

• Independent Feature Project (IFP)

The IFP/East and IFP/West service the New York and Los Angeles areas,
respectively. They are a growing support organization for independent
filmmakers. Like the BFF, IFP is a membership-oriented networking
organization that offers a job bank, networking and instructional workshops
and gatherings for its members. As is the case with the BFF, IFP offers no
funding for its member-filmmakers. IFP offers no specific support for inner
city and under-represented filmmakers and filmmakers who are outside of
the primary service areas of New York and Los Angeles.

• The American Film Institute (AFI)

The Film and Video Grant Program of the American Film Institute sponsors a
recurring funding program for non-commercial film projects. As such, it
attracts applicants from around the world. The resources that are available to
AFI-sponsored filmmakers are substantial and are backed by one of the finest
film curricula available, including established film professionals on its faculty
and advisory board. AFI provides grants to approximately fifteen of the 300-
500 worldwide applicants annually. The Micheaux Foundation will not
compete with AFI, but will target a much smaller segment of under

15
 represented artists from the D.C. area.

• The National Endowment for the Arts (NEA)

This federally subsidized program is perhaps the largest and most established
grant program available to the individual artist. The competition among
semi-established independent filmmakers is quite intense. NEA guidelines
dictate that the applicant show a substantial track record in order to gain
consideration for a grant, making such funding unavailable for most
emerging inner city film artists.
Therefore, it is the mission of the Micheaux Foundation that can most
effectively serve the community of under represented filmmakers in the
Washington D.C. area.

4.1 Competitive Edge

4.1.1 Strong Market Segment

It has been estimated that African American and Multi-cultural audiences are
responsible for 35% - 50% of annual box office receipts, and yet, the films that
cater to these audiences are few and far in between. Movies are, perhaps, the
most economical form of family entertainment. Most members of ethnic groups
have more limited entertainment options than more affluent (in general) non-
ethnic audiences. Movies, as a result, have become the primary entertainment
form for these audiences. This substantial market segment craves films that
represent them and their unique stories objectively. This undersatisfied demand
can only be remedied by the training and the financing of more multicultural
writer/directors who are uniquely qualified to bring the stories to the screen that
speak to multicultural audiences.

4.1.2. Multicultural Cast Films Make Profits

It has become common knowledge in the film industry that films featuring
multicultural casts enjoy a substantial following among audiences, the majority
of which are multicultural. African Americans represent the largest segment of
repeat box office participants of all ethnic groups. Ethnic audiences, more than
any other audience segment, promote good multicultural films by word of
mouth and create substantial built in market share and resulting box office
receipts for multicultural films that "mass marketed" non-ethnic films must
target through focus groups and test screenings. This results in lower
promotional costs for multicultural films.

4.1.3. Multicultural Films Cost Less to Produce

Low budget films are less risky because of the lower investment in production
funding. When combined with the lower cost of promotion, these films break

16
into profits quicker than "mass marketed" films. For these reasons, distributors
are seeking well made multicultural films.

4.2 Sales Strategy

• The Market - Distributors & Exhibitors

Due to the eruption in audience support for "smaller," independent films with
more narrowly focused, character-based stories, distributors and exhibitors are
actively seeking such films and are enjoying increasing profits for such
properties.

Examples of such films during the past several years that have performed well at
the box-office and in ancillary markets, including video and DVD rentals and
sales, include:

She’s Gotta Have It: $600K production budget $7.1 million gross
Hollywood Shuffle: $100K production budget $5.2 million gross
Straight Outta Brooklyn $300K production budget $2.7 million gross
Blair Witch Project: $30K production budget $180 million gross
Clerks: $27K production budget $3.2 million gross
Swingers $250K production budget $4.7 million gross

• Marketing Strategy Details

Once all production and post-production on the film is complete, the first 35-mm
"release print" will be made. Depending on when and what type of distribution
deals are negotiated, the final step of post-production for which the Micheaux
Foundation is responsible may be the creation of the final "answer print," several
steps prior to the more expensive "release print." In addition to this final, best-
quality 35 mm "release print" (if applicable), several 16mm prints will be created
to be submitted to the top film festivals and markets around the world, and
video tape copies of the film will be made as well, to be used for marketing
purposes.

At this time, the Micheaux Foundation will arrange for favorable distribution
deals from established Distributors, applying the bulk of $40,000 Sales, General
&Administrative budget item, included in the Micheaux Foundation's overall
operating budget, to this purpose.

• Ownership of the Negative

Our library of completed film negatives will be the most valuable asset in the
possession of The Micheaux Foundation. Ownership of these assets will provide
the bargaining possession that will allow us to negotiate freely on the open
market for the licensing of these films in the worldwide markets and through the

17
various media. The licensing and sale of our film negatives will provide the
necessary income to perpetuate the operations

• Distribution Deal Prior to "Release Print"

As noted, steps will be taken to minimize financial risks throughout the process
of creating the film. One such step is that the Micheaux Foundation will seek
distribution deals prior to completion of all films, during the post-production
phase (before the "release print" is made). If a deal is struck at this stage,
generally the advance fee offered by the Distributor is lower than if the film is
completed and marketed afterward. In this instance, the Distributor incurs many
of the final costs of finishing the film (some of these costs are the greatest
amounts incurred in the post-production process). Therefore, there is less
financial risk involved for the Micheaux Foundation.

• Distribution Deal After "Release Print"

If a distribution deal is negotiated after creating the first "release print," costs for
finishing the film will be incurred by the Micheaux Foundation. These costs are
already accounted for in the operating budget set forth herein.

The goal at this stage of negotiations is to receive an advance payment from

Distributors (against future revenue generated by the property in all markets)
that is equal to or greater than the total initial capital investment of
approximately $1,500,000 in the project. At this point, the Investors will have
recouped their entire capital investment and will then receive their share of
profits once the film's revenues exceed the amount necessary for Distributors to
recoup their Advance payment costs and P&A expenses.

• Film Festivals and Markets

As noted earlier, in addition to the "release print" (or the "duplication negative"
depending on the timing and type of distribution deal), several 16 mm prints of
the finished film will submitted to the top film festivals and markets throughout
the world. These festivals typically attract representatives from the major
studios and the boutique studios, as well as distributors and independent sales
agents.

Festivals and Markets include:

o Cannes Film Festival
o Sundance Film Festival, Park City, Utah
o Acapulco Film Festival
o Toronto Film Festival

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Many if not most independent feature films have attracted distributors through
the film festival circuit, the Sundance Film Festival being the most popular.
Films that have secured distributors by this method include:

She's Gotta Have It

Straight Outta Brooklyn
Sex, Lies and Videotape
Swingers
Clerks

• Private Screenings
In addition to marketing the film via film festivals and markets, the Micheaux
Foundation will also set up private screenings of the finished film, to which
several distributors and studio representatives will be invited. The goal of these
screenings is to interest more than one Distributor in the property, so that they
begin to bid against each other. Once the film is favorably received by several
Distributors, the Producers will determine which Distributor will handle
distribution of the property and will negotiate the best deal.

• Promotion Strategy
Another cornerstone of the strategy for producing Grounds for Divorce and Tied
Apart is an emphasis on marketing. Efforts will be made on several fronts to
target both potential audience members and distributors with information that
will excite them about this project. This will include a coordinated press
relations strategy (through both traditional print media and the Internet), as well
as a customized Internet website strategy.

• Pre-Production Phase
Once the productions shift into the pre-production phase, promotional activities
will include disseminating press releases to industry publications and websites
("Variety," "The Hollywood Reporter," "IndieWire," "Film Threat," "Independent
Filmmaker," etc.) and news outlets in the Washington, D.C. and Mid-Atlantic
area announcing the plans for the film, production details, highlights of location
shoots in and around Washington, D.C., and other relevant issues. In addition,
the website will become an important conduit of information, and will be
continually updated with relevant production highlights and status reports as
the production process gets underway. Features to be gradually incorporated
into the website will include synopses, samplings of the script, assorted
storyboard art, and clips from the film.

• Marketing: Production Phase

Press promotion for Grounds for Divorce and Tied Apart will enter a critical
phase during the production. Traditional and Internet media will be targeted for

19
this stage of promotion, offering the public access to name talent in order to elicit
interest in, and create excitement about, the project. Targeted media outlets will
include local newspapers and TV, industry periodicals, consumer entertainment
publications ("Premiere," "Movieline," "Entertainment Weekly"), and television
programs that focus on entertainment and film production, such as "Extra,"
"Entertainment Tonight," and "Access Hollywood" (Line Producer Matthew
Borten serves as a Field Producer for all of these programs which will aid in
obtaining coverage by them). An electronic press kit will also be produced for
use in the Sales & Marketing phase. This usually includes pre-packaged footage
of the film, interviews with key members of the production and a behind-the-
scenes documentary for TV media outlets to incorporate into news stories.

• Marketing: Post Production Phase

Once the film is in the post-production phase, the promotion strategy will focus
more specifically on attracting a Distributor. Promotional materials such as "one-
sheets," posters, sales kits, a "trailer," and press kits will be developed. News on
the progress of the film will also continue to be disseminated through the
website and developed among Internet movie-news sites.

• Final Sales & Marketing Phase

During the final marketing phase, after the first "release print" is complete and 16
mm prints are made to be submitted to film festival and markets, the promotion
strategy will focus on successfully selling the film. Industry and local press at
each film festival attended will be targeted and where possible, personal
appearances will be arranged to further "sell" the film and to attract the attention
and interest of Distributors. Press efforts will also continue on the Internet
movie-news website front, as well as with traditional print media wherever
possible.

4.2.1 Distribution Modes

It is the goal of the Micheaux Foundation to enter into a distribution agreement
that will maximize the earning potential of a film of the genre of low-budget
multicultural films, thereby maximizing the return on investment for its
investors.

Many productions pre-sell the rights to their films to foreign markets as a means
to raise production or post-production capital. The advantage to this practice is
the infusion of cash that is made available to the producers. The disadvantage is
that domestic distributors are more likely to enter into a distribution agreement
for a film that has all worldwide distribution rights available. The Micheaux
Foundation has opted not to pre-sell foreign rights in order to negotiate the most
favorable deal for the completed film with a domestic distributor.

20
Obviously, as the producers of a feature film, we intend to have our films placed
on as many screens as possible and in every city in the world. The manner of
distribution, exhibition and exploitation will be administered by the Distributor
and is generally at the Distributor's discretion, subject to its good faith and
business judgment.

The distribution model will most likely follow the plan detailed below:
• Exhibition in both domestic and major international theatrical markets – "first
run" multiplex theater chains first, for eight weeks (or more depending on the
film's popularity and "staying" power); then "second run" theaters –
"arthouse," independents or smaller chains -- up to an additional three to four
weeks or more, again depending on the film's popularity;

• Licensing for broadcast on pay-per-view services, premium cable television

and direct-broadcast satellite services, both domestically and internationally;

• Home Video and DVD sales to retail video rental outlets as the primary
market segment; additional avenues for home video and DVD products
include retail sales outlets, direct-to-consumer sales through video catalogue
services, and direct-to-consumer sales through internet websites;

• Basic cable TV and broadcast television networks;

• Airlines, libraries

Theatrical Exhibition

Feature films achieve greater success through all modes of exploitation when
they attract large audiences, and subsequently achieve large box office receipts,
in theatrical markets. For an independent film, this often means remaining in
theaters longer, though the film is not shown in as many theaters at one time as a
major Hollywood blockbuster. As word-of-mouth and the promotional
campaign build, the exhibitors continue to make the film available to new
audiences for several weeks, or even months in some cases. The longer the run in
the theatrical market, the greater the profitability overall.

Due to the "cross-over" genre type and the story itself, the film will have broad
appeal throughout the world. Historically, U.S. films have fared extremely well
in international markets.

The critical focus of the Micheaux Foundation's marketing effort will be directed
at securing the right Distributor(s) for the film. Many motion picture distributors
specialize in specific types of properties, and have relationships with exhibitors
who know they can attract a strong audience for certain types of films.

21
During the primary distribution phase of our feature films, exhibition in both
domestic and international theatrical markets, a proposed initial release for each
film is a minimum of 800 prints, which will remain in circulation for six to eight
weeks, or more depending on the film's popularity. The actual number of prints
and details of distribution strategy will be determined and administered by the
Distributor.

For comparison, a major Hollywood blockbuster release for a film with a

production budget of $30 million or more and advertising and marketing budget
of nearly $20 million is between 2500 and 3000 prints. Usually, these films stay
in circulation for a much shorter duration, typically a month or so. Many
independent, less mainstream films have an initial release of 100 or 200 prints
that circulate in major markets for several months.

Cable TV, Direct Broadcast Satellite, & Pay-Per-View

The film will also be licensed for broadcast on pay-per-view services, and on
cable television networks such as:
• HBO
• Showtime
• Starz
• The Movie Channel
• Black Entertainment Television
• The Sundance Channel
• The Independent Film Channel
Simultaneously, it will be licensed to direct-broadcast satellite networks such as:
• DirecTV/ Primestar
• USSB
• The Dish Network, among others

Licensing of the film for broadcast will also occur in international markets.

Video & DVD Sales & Rentals

Other significant market opportunities include home video and DVD sales to
retail video rental outlets. In some cases, more of a film's overall revenue is
generated in this market segment than any other. These outlets include:
• Blockbuster Video
• Hollywood Video
• Tower Video, and others (with more than 12,000 combined outlets in the U.S.
alone).

22
Additional avenues for home video and DVD products include retail sales
outlets, such as:
• Kmart
• Walmart
• Sam’s Club
• Price/Costco
• Target
• Best Buys
• Circuit City
• The Good Guys
• Supermarket Chains

Direct-to-consumer sales also include video catalogue services, such as:

• Columbia House
• BMG, and others

One of the fastest growing direct-to-consumer sales and/or rental outlets is the
Internet. Independent films are enjoying ever-increasing revenue from such
consumer-oriented websites as:
• Reel.com
• Amazon.com, and others

And, during the past several months, alternative methods for distribution of
feature films have begun to gain popularity. Targeted Internet websites, like the
one created for this venture, are fast becoming an additional lucrative option for
direct-to-consumer sales of independent films. Feature films and short films will
soon be available, in full video and sound, for download on the internet on a
"pay-per-view" basis.

Again, the distribution strategy is generally at the Distributor's discretion. The

scenario detailed above is a typical model for this type of film.

• Independent Distribution Channels – A Contingency Distribution Strategy

This is another route available to filmmakers with completed films that have not
been distributed through traditional distribution channels. Filmmakers, like Dr.
Haile Gerima, who, in 1994, distributed "Sankofa" , a $1 million production
feature film to a worldwide audience by renting theaters in major cities, are often
able to double production costs with a profit as Dr. Gerima was able to do. More
recently, Rob Hardy, of Rainforest Productions, an Atlanta-based film and video
production entity successfully self-distributed “Trois”, a $200,000. budget
production. Released on Feb. 14, 2000 on 28 screens, “Trois” performed at an
exceptional average of $10,000 per screen, and has, as of May, 2000, earned

23
$1,090,000. in box office receipts on an expanded exhibition on 85 screens. The
Micheaux Foundation has begun the process of affiliating with theater owners
and independent exhibitors in an effort to lessen its dependence on traditional
distribution channels. The internet has provided the future of independent
theatrical distribution and video sales.

The downside :
• The filmmaker must incur the promotional expenses and advertising costs
(print media ads).
• Without a pre-distribution advance, box office proceeds are accrued as
earned.
The upside:
• a higher percentage of the box office proceeds pass through to the filmmaker
and to the investors. Self-distribution is an especially suitable means for low
budget films due to the lower initial capital outlay required to complete low
budget films. Profits are more likely to be realized with a lower break-even
point and without distribution company "creative" accounting methods.

4.3 Milestones

A typical feature film development through post-production timespan is

approximately 6-7 months. Our schedule calls for two feature films to be
produced annually, which will create an overlap. This is not unusual, nor will it
be a burden. The Micheaux Foundation will employ a number of different
personnel for each film, including two production managers, who will each
coordinate the production of a film. In the case where there are staffing overlaps,
there will never be two films in the same stage of production simultaneously.
Since all technical personnel specialize in particular areas in the process of
filmmaking, there will never be a duplication of efforts with two films in
simultaneous production. (see Exhibit A, infra)

The income-stream from a feature film will typically begin with the advance paid
to the production entity by the distributor when the distribution agreement is
finalized. This advance against future earnings should, at a minimum, recoup the
production costs of the film with, hopefully, a substantial markup for the
production entity (subject to the quality of the film and possible competing bids
from additional distributors).

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5.0 Our Board of Directors
Professor BILL DUKE (Honorary): Bill Duke has been an established actor,
writer and producer for over 30 years. In addition to his film industry activities,
he serves as the Chairman of the Howard University School of Radio, Television
and Film. Professor Duke has agreed to participate in activities with The
Micheaux Foundation as his schedule allows and to provide counsel and film
industry contacts when needed.

CLIFFORD E. PULLIAM, board chairman, is an

attorney/writer/producer/director/composer, who, for 16 years, has been
involved in the production of film and assisting independent filmmakers in Los
Angeles and New York City. He earned a BFA in Music Composition from
Howard University School of Fine Arts and a law degree from the University of
Southern California, in Los Angeles. He worked in the music sync-licensing
division of Paramount Pictures during the mid 1980's under Eldridge Walker
and in the litigation department of Columbia Pictures, Burbank Ca., under
Darrell Walker, before leaving to concentrate his efforts on independent
filmmaking in 1987. During the course of working on USC student films and at
least 10 micro-budget "weekend shoots" and low budget independent films, Mr.
Pulliam has occupied practically every position of a film crew and has acquired
the knowledge of shooting quality film footage on a minimal budget.

In 1995, Mr. Pulliam regained the development rights to "13 Straight" a screen
play by Clifford Pulliam that had been optioned by David Lester and Don Miller
("White Men Can't Jump") in 1993, and it is currently in its packaging and
development stage to be shot in Los Angeles, CA by the filmmakers of The
Micheaux Foundation. The Micheaux Foundation, in association with Eleventh
Hour Productions, is developing "Grounds for Divorce" for major distribution,
which is scheduled to begin principal photography in Washington, D.C. in June
2001.

DR. BRIAN K. GIBBS, M.P.A., PhD, is a 1999 Administrative Fellow at Harvard

University, and is the Director of the Program to Eliminate Health Disparities, in
the Division of Public Health Practice, at the Harvard School of Public Health
(HSPH). Dr. Gibbs has participated in research and evaluation activities in the
area of health disparities and adolescent violence prevention and is a nationally
recognized expert in this area. Currently, Dr. Gibbs serves as a consultant to the
National Coalition of Survivors for Violence Prevention, Inc., a diverse group of
organizations and individuals dedicated to providing a united voice for sibling
survivors, to inform thought and debate on national public policy to reduce
violence among children and adolescents in the United States.

25
Dr. Gibbs is a board member of Paige Academy, a non-profit, alternative
educational institution, offering a comprehensive, culturally affirming and
developmentally based Arts, Sciences, Humanities and Technology program for
children ages 6 weeks to 12 years. He also serves as Vice President, Board of
Directors, From Roots to Wings, in intergenerational support program for
grandparents and the grandchildren they are raising. Dr. Gibbs has conducted
background research for the Bill and Melinda Gates Foundation and Millenium
Scholars Program, a scholarship initiative granting scholarships to at least 1,000
high school students of color per year over the next 20 years. In addition, Dr.
Gibbs continues to maintain his clinical skills as a licensed occupational
therapist, providing home-based pediatric development intervention for infants,
ages 0 to 3.

JOHN L. GEIGER is an intellectual property attorney and screenwriter. He is a

graduate of the University of California, Berkeley (B.A. English 1982), the
University of Southern California (J.D. 1985), and the University of California,
Los Angeles (Professional Program - Graduate School of Theater, Film &
Television; Certificated 1999). Mr. Geiger clerked at both the federal (Fed. Dist.
Court, Central District, Los Angeles; law clerk extern, 1984) and state (California
Superior Court, Southern District, 1985-1988) trial courts, and represented
entertainment professionals and investors in private practice (Los Angeles, 1988-
1996). Mr. Geiger is a Board Certified Specialist in appellate law (California
Board of Legal Specialization, State Bar of California; 2001). Currently, Mr.
Geiger is a Senior Deputy with the Los Angeles County Counsel's Office, where
he negotiates intellectual property and information technology transactions.

DAVID A. COLLINS is a graduate of Alcorn A&M College and the State

University of N.Y. - Buffalo Graduate School of Social Policy. He is the Deputy
Director of the A. Phillip Randolph Institute, Recruitment and Training Program,
where he establishes Welfare to Work Training Programs, while operating his
consulting company in Buffalo, N.Y. He has been affiliated with the Institute
since 1967, while serving as a consultant to numerous human service agencies.
He is also an instructor at the State University of New York at Buffalo.

Mr. Collins served on the Buffalo City Council from 1978-1996. During his tenure
as a City Councilperson, he served as President Pro-Tempore and Chairperson of
the Finance Committee for 12 years. He was responsible for rebuilding the
Masten District (the central-most section of Buffalo's inner city). Also to his
credit, is the reconstruction of the War Memorial Stadium (former home of the
Buffalo Bills), massive new home construction projects, the preservation of the
Apollo Theater, reconstruction of most major thoroughfares, home improvement
programs, youth programs, senior citizen programs and several major

26
commercial/economic development projects in the city of Buffalo.

Larry J. McAdoo is an accountant and is the President and CEO of KL

Associates, which includes the subsidiary, KL Construction, an emerging real
estate investment, development, property management and home improvement
firm that has been in operation since 1984 and has amassed a substantial
residential and commercial portfolio in the District of Columbia.

Imani Drayton-Hill has been contracted to serve as a consultant to the board of

directors. Ms. Drayton-Hill, is a principal of The JoMa Arts Group, a
Washington, DC-based consulting firm specializing in capacity building,
fundraising, planning and board development for community-based arts
organizations. With over fourteen years experience in non-profit management,
she has worked as the Managing Director of Woolly Mammoth Theatre
Company, Assistant Director of African Continuum Theatre Coalition,
Development Director of the National Association of Artists’ Organizations and
Operations Director of WPFW Radio, in Washington, D.C. A member of
Leadership Washington’s class of 1999, Ms. Drayton-Hill is an active volunteer
on local arts boards and steering committees. Ms. Drayton-Hill has served as a
peer review panelist for the National Endowment for the Arts, Arts Link, D.C.
Commission on the Arts and Humanities, William Penn Foundation, and
Arlington Arts Commission; and is currently a site evaluator for the Theatre
Program of the National Endowment for the Arts.

The Micheaux Foundation has engaged the accounting services of Mike Howard,
C.P.A. of the Mitchell & Titus, LLP, Washington, D.C. office, one of the most
prominent accounting firms on the east coast in Washington D.C.

5.1 Film Production Personnel

KevinJiggetts
Writer/Producer/Director
Mr. Jiggetts, a native of Washington, DC, is a critically acclaimed actor. He has
acquired extensive theater credits in Washington, DC, New York, and numerous
cities throughout the US as he has toured with several shows. His work as an
actor is quoted by such publications as the Washington Post, The City Paper, The
Washington Times, and various publications throughout the US as "sterling,"
"one of the strongest actors," "brilliant," and "smart and truthful" just to name a few.
In addition to theater, Mr. Jiggetts rounds out his resume’ with additional credits
in television with principle appearances in Homicide, Americas Most Wanted, As
the World Turns, The (New) Cosby Show, and Law and Order. In film, with principle
roles in I.S.O., Death Deferred, Top Man, and Let’s Work It Out. Additional credits
include voice over and commercials. He directed and played the lead in the well-

27
received Cages at the Duality Playhouse in New York City in 1995. Cages
established Jiggetts as a director who understands actor language and knows
how to tell a story.

Mr. Jiggetts acquired a lot of the tools that the actor draws from in his work from
the Source Theater Co., where he studied character development, the National
Conservatory of Dramatic Arts complete actors program, The Acting Studio Inc.
in New York, Weist Barron On Camera Intensive (also in NY), and various
workshops that Jiggetts still attends.

He has been for the last four years exclusively signed to and represented by
Penny Luedtke and The Luedtke Agency in New York City.

He is a member in good standing with the Screen Actors Guild (SAG), Actors
Equity Association (AEA), American Federation of Television and Radio Artist
(AFTRA) and the Independent Feature Project (IFP). As a writer, Jiggetts has
completed two screenplays, one of which, ‘Grounds For Divorce, is currently in
pre-production and is slated to begin principal photography in the Spring of
2000.

Clayton LaBouef
Writer/Producer/Actor/Playwright

Mr. LaBouef is a native of Yonkers, N.Y. He grew up in the Schlobohm Housing

Projects and after graduating from high school went on to major in theater-arts at
Carnegie Mellon University in Pittsburgh, Pa. , returning home after two years of
study, he then moved to Washington, D.C.

Mr. Labouef went on to work in radio, record retail, and he received training in
television news at he Community Film Workshop in Manhattan. He returned to
the stage in the mid 80's and over the years has built a solid reputation as a
versatile, professional actor who has performed in plays by August Wilson,
William Shakespeare, Lorraine Hansberry, Charles Fuller, Derek Walcott,
Zora Neale Hurston and many others. Top regional theater companies he’s
worked with include: Arena Stage, The Kennedy Center, Crossroads Theater
Company, Fords Theater, The People’s Light & Theater Company, Theater Of
The First Amendment and The Pittsburgh Public Theater.

He received a commission from Center Stage, where he’s also performed, to

develop his play “Shero” (The Livication of Henrietta Vinton Davis). He is
author of two other plays entitled, “Tied-Apart” and “R.P.M.”

His film and television credits include, “Meteor Man,” “Disillusion,” and “The
Berea Story” for PBS. He portrayed Emperor Haile Selassie, in the

28
WMAR/Arena Players teleplay, “The Eagle & The Lion” and Scoogie in the
upcoming HBO mini-series “THE CORNER.” Mr. LeBouef is best known
however, for his recurring role as Colonel Barnfather, on the critically acclaimed
“HOMICIDE” (Life On The Street), and he recently appeared in the two-hour
NBC-TV Special, “HOMICIDE” (Life Everlasting).

Michael Mack
Writer/Producer/Actor
Michael Mack is an actor, writer and acting coach who has worked in television
and film. He was featured as the first Black Romulean on the Star Trek Next
Generation Series and was also a writer on the show. Mr. Mack is a graduate of
the Paramount Pictures Writing Program for which thousands apply for twenty
available annual intern positions. Mr. Mack is the principal instructor of the
Micheaux Foundation-sponsored Fearless Acting and Writing Workshop which
meets weekly in Washington D.C. Mr. Mack will serve as screenwriting
consultant and acting coach for the projects of the Micheaux Foundation Feature
Film Initiative.

Matthew A. Borten
Line Producer/Production
Supervisor
Mr. Borten has more than 17 years of experience in all facets of the film and
television production. Mr. Borten has served as a writer, producer, director and
editor of syndicated television series, independent feature films, numerous short-
subject narrative films and documentary specials, mini-series, and series for
domestic and international television broadcast and for interactive television
systems.

After graduating with honors from the University of Southern California

Graduate School of Cinema-Television, where he earned his Master of Fine Arts
degree in "Film and Television Production" (Writing - Producing - Directing
emphasis), Mr. Borten joined Discovery Networks. Over a five year span as a
staff writer, researcher, and producer, he worked on nearly 50 non-fiction
programs and series for Discovery Channel, The Learning Channel, Discovery
Networks International, and Animal Planet. Among these programs was an
acclaimed documentary mini-series on the human brain, called The Brain: Our
Universe Within, and several long-running series. He also wrote, produced,
directed and edited a number of interactive documentaries for Discovery
Channel Interactive, a now defunct unit that produced the industry's first fully-
developed, fully-functional interactive television programs that viewers could
control much like a laser disk or DVD.

Mr. Borten’s work has been honored with a Gold Houston International Film
Festival Award (1997) and a CINE Golden Eagle (1995). In addition to his M.F.A.

29
from USC, Mr. Borten holds a BA from Duke University, where he graduated
cum laude while pursuing a double-major: "Writing for the Media/ Film" -- an
independent, self-designed program -- and Drama. His minor was Sociology.
Mr. Borten has also produced and directed a number of stage productions over
the past 16 years.

Georgette Hayden
Line Producer/Production
Supervisor
Ms. Hayden is a graduate of Howard University and New York University
Graduate School of Film. Her fifteen years of experience and her numerous
production credits include her current position as Production Coordinator on
"The West Wing" television series for Warner Brothers Television. She served as
feature film Production Supervisor on "Wag the Dog" a New Line Cinema
Production directed by Barry Levinson, featuring Robert DeNiro and Dustin
Hoffman, "Pentagon Wars", an HBO Production; and "Long Kiss Goodnight" for
New Line Cinema featuring Samuel Jackson and Geena Davis. Ms. Hayden
maintains the largest available database of African American film technicians in
the Washington D.C. - New York City corridor. Ms. Hayden also has numerous
commercial and music video credits.

Clifford E. Pulliam
Executive Producer
Mr. Pulliam is an attorney/writer/producer/director/composer who, for 16
years, has been involved in the production of film and assisting independent
filmmakers in Los Angeles and New York. He has earned a BFA in Music
Composition from the Howard University School of Fine Arts and a law degree
from the University of Southern California, in Los Angeles. He worked in the
music sync-licensing division of Paramount Pictures during the early 1980’s
under Eldridge Walker and spent time in the litigation department at Columbia
Pictures in Burbank, Ca., before leaving to concentrate his efforts on becoming an
independent filmmaker in 1987. During the course of working on U.S.C. student
films and at least ten micro-budget "weekend shoots" and low-budget
independent films, Mr. Pulliam has occupied practically every position of a film
crew.

Mr. Pulliam also created the privately offered limited partnership that funded
"The Fixer", a 1985 feature film by Gibbs Entertainment in Los Angeles, CA, and
"The Final Shot" by director Tarron Simms in Los Angeles, CA.

Mr. Pulliam conceived, developed and co-wrote "13 Straight" a feature film
script that was optioned by David Lester and Don Miller ("White Men Can’t
Jump") in 1993. In 1993, he relocated to the Washington D.C. area and has been
working to promote local film production activities through The Micheaux

30
Foundation, a 501(c) 3 non-profit organization that he founded in 1994. Through
the Micheaux Foundation, Mr. Pulliam wrote, produced, directed and scored
I.S.O. In Search Of… a short film, which was the first project, financed by Mr.
Pulliam and The Micheaux Foundation from a grant from The Episcopal
Archdiocese of Southern Ohio in 1995. I.S.O. was shot in Washington D.C. with
a crew of Howard University film students. It has been exhibited at Howard
University, at the U.S.A. Filmfest in Dallas, Texas, and several times on DCTV
Public Access Television in Washington, D.C. and on Continental Cablevision
Public Access in Los Angeles, CA. Through the Foundation, he also wrote,
produced and shot “A Dialogue with the Folks”, a historical documentary that also
aired on DCTV Public Access Television and Continental Cablevision Public
Access.

In 1995, Mr. Pulliam regained the development rights to 13 Straight and it is

currently in its packaging and development stage to be shot in Los Angeles, Ca.
by the Micheaux Foundation.

Mr. Pulliam’s goal is to help to transform the Washington, D.C. area into a
"Mecca" for independent filmmakers.

Dennis Boni
DIRECTOR OF PHOTOGRAPHY/
CINEMATOGRAPHER
Mr. Boni started Boni Productions in 1983. Since then he has established himself
has one of the area's top cinematographers. The award-winning film director
and Director of Photography works in both film and video. A seasoned and
certified Steadicam owner/operator, Boni was one of the few handpicked
cinematographers to be accepted and trained by Garrett Brown, the Steadicam's
inventor. Boni is also a veteran underwater photographer and fully certified
scuba instructor. Known for his meticulous attention to lighting and production
details, Boni's most recent credits include "Touched by a Dolphin," a one-hour
special for ABC television and the PBS documentary series "Journey to Planet
Earth."

While Boni is known primarily for his 16mm documentary work, he brings the
same keen eye to 35mm commercial and corporate video shoots as well. His
clients include ABC television programming, The White House, the Washington
Area Chevy Dealers Association, MCI Information Technology, Teligent, Inc.,
and Fannie Mae. He has done feature film work for Warner Brothers and
Polygram Entertainment.

31
5.2 Personnel Plan

Initially, The Micheaux Foundation will operate this initiative with a minimal
full time staff. The Executive Director and an Administrative Assistant will
comprise the full time staff. An accounting firm, a law firm and a
fundraising/public relations firm will be independently contracted as needed. A
portion of the principal financing will be invested in a conservative annuity
account which will yield monthly interest payments sufficient to cover all payroll
and administrative costs of running The Micheaux Foundation until income is
received from box office revenue. (see § 6.0, Financial Plan/Repayment Proposal)

Due to the nature of feature film production, cast and crew employees will be
hired on a one-production basis with some key personnel to be hired on multiple
productions.

6.0 Financial Plan/Repayment Proposal

The Micheaux Foundation's financial plan consists of the investment of a
portion of the principal into carefully selected money market and mutual
fund high growth accounts. The money market accounts provide the highest
security and a moderate annual interest rate slightly higher than that of a
savings account, i.e., 4% - 6%. The mutual fund accounts, from fund
managers such as the Janus, Templeton, Reynolds Blue Chip Funds provide
growth, as well as income from dividends from a diverse sampling of
consistently high-performing stocks and have consistently yielded annual
interest in the range of 15%-20%. We estimate that an investment of $4
million at an average annual yield of 10% (conservative projection) will yield
annual interest payments of approximately $400,000., which will be disbursed
in quarterly payments of $100,000., ($33,333. monthly) , in addition to income
earned from assets (pg.35) of approximately $48,750, will contribute up to
$82,083., monthly, to our programs, our administrative expenses and to the
general fund toward repayment of principal and interest to the venture capital
investors. A portion of the proceeds will be automatically reinvested into the
fund account to further compound interest and principal. It is our goal to fund
all operations without diminishing the investment account.

The Micheaux Foundation will utilize this interest income to fund:

Salaries - Executive Director and Administrative Assistant /Bookkeeper
Legal and Accounting Fees
Administrative expenses, i.e. office rent, phone, insurance, etc.,
Annual "Each One Teach One" Workshops for "at risk" youth.
Annual Howard University Scholarship Endowment

32
 Initially, the Micheaux Foundation will expend only about $3,523,000. The
amount of start-up principal that will be necessary to purchase its training
and production facility and to complete its first three feature films, "Grounds
for Divorce" and "Tied Apart" and Harry’s Number, and the initial six "mini-
feature"films. Utilizing the interest from well-chosen investments will allow
us to operate for the first two years with a minimal expenditure of the
prinicipal.

Repay $8 million in 60 months

Our calculations indicate that $16,410,000. Disbursed in two
installments of $8,205,000., amortized at an annual rate of 8%
will require 60 monthly principal and interest payments of
$166,367.83 each for a total P&I repayment of $9,982,069.69,
including $1,777,069.69 in accrued interest.

We anticipate repayment of principal and interest to the venture

capital investors in two balloon payments. The first balloon
payment of $4,991,034.84 will occur after the first thirty months of
operation, the second balloon payment of $4,991,034.84. will occur
after sixty months of operation.

Repayment will be derived from the post-distribution proceeds of

feature films, proceeds from income earning assets (equipment
and editing suite rentals) non-profit fundraising activities and
interest earned from investments.

Total Principal and Interest repayment: $9,982,068.92

Total Interest: $l,777,069.69
Total Repayment Term: 60 months
6.1 Important Assumptions
• Disbursement to The Micheaux Foundation in two equal installments of
$ 8,205,000.
• We assume that the economy and stock and bond markets will continue
strong performance
• We assume that the feature films will be completed and that distribution
agreements will be signed.
• We assume that the feature films will be reasonably well received and
provide average box office returns

33
6.2 Break-even Analysis
Based upon conservatively estimated industry averages, a worldwide gross of
$12,000,000. is not unusual for a film in this genre. Based on the above
assumptions, the typical break-even point for a film in this genre and at this
budget is approximately $1,500,000 - $2,000,000 in gross revenue from all modes
of exploitation (including both domestic and international theatrical exhibition,
licensing to pay-per-view services, cable television and direct-broadcast satellite
services, home video and DVD sales, and all other ancillary markets).

Given a moderately strong box office and ancillary market performance, it is

quite possible that the box office proceeds from any one of the proposed ten
films will be sufficient to repay the financing from the venture capital investors.

This is a fact that bears repeating!

Given a moderately strong box office and ancillary market performance, it is

quite possible that the box office proceeds from any one of the proposed ten
films will be sufficient to repay the financing from the venture capital investors.
(See Exhibits B, C infra)

6.3 Projected Profit and Loss

(Exhibit D, infra)

6.3.1 Risk Factors for the Venture

The major risk factors for this venture are as follows:

• The Micheaux Foundation fails to complete the film

• The film is produced but the Company is unsuccessful in securing
distribution;
• The film is distributed but fails to earn a profit.

6.3.2 General Risks of Motion Picture Industry

The motion picture industry is highly speculative and inherently risky. There
can be no assurance of the economic success of any motion picture since the
revenues derived from the production and distribution of a motion picture
(which do not necessarily bear a direct correlation to the production or
distribution costs incurred) depend primarily upon its acceptance by the public,
which cannot be predicted exactly. The commercial success of a motion picture
also depends upon the quality and acceptance of other competing films released
into the marketplace at or near the same time, the availability of alternative
forms of entertainment and leisure time activities, general economic conditions,

34
and other tangible and intangible factors, all of which can change and cannot be
predicted with certainty.

6.3.3. Minimization of Certain Risks Due to Control of Production Costs

Because the production budgets for all of the proposed feature films are
extremely small by feature film standards, the most significant risk to the
ultimate profitability of the venture is greatly minimized. With the variety of
distribution channels and modes of exploitation available today, the film has an
excellent chance of earning sizable profits as related to its small cost to produce.

For comparison, the average cost to produce a typical Hollywood film is

approximately $37,000,000. and the industry average marketing cost per picture
is approximately $20,000,000. The production budgets for all of the proposed
feature films are in the $1,000,000. apiece with projected marketing costs of
$1,500,000., depending on the number of prints released and the advertising and
promotional campaign that accompanies either scale of release. Market costs are
to be incurred by the distributor. The planned initial release will be no less than
200 prints of the finished film, depending on the distribution deal negotiated, to
be exhibited in the domestic theatrical marketplace, with international theatrical
exhibition and all other ancillary markets to follow.

6.4 Projected Cash Flow Analysis

The Cash Flow Scenario is a fairly standard formula for independent films. (see
Exhibits B, C, infra.)

The finished film will be marketed to Distributors (via film festivals, markets,
and private screenings). There are typically two revenue scenarios that follow,
depending on the type of deal negotiated with the Distributors.

• Advance Payment equivalent to at least Negative Production Costs to

Investors & Producers, plus P&A Costs of $1,000,000 - $1,500,000 will be
incurred by the Distributor, or...

• A $5,000,000 one-time, lump sum to the producers & investors – known as

a "Straight Buy-Out”. In this case, the Distributor retains all future
revenue.

The Distributor pays for the cost of Prints and Advertising (P&A). P&A actually
refers to the cost of duplicating the film and creating copies of it ("prints") to be
exhibited in theaters throughout the world, and all the marketing costs
(advertising, promotion, publicity, and so forth) associated with its distribution
of the property.

35
Exhibit B (infra) reflects revenue and profit projections based on a small-scale
release of 200 prints (typical for an independent film - for reference, a Hollywood
blockbuster release ranges from 2500 to 7000 prints). Calculations and revenue
projections are based on a modest but effectively budgeted marketing campaign
for the film, such that the P&A figure will be $ 1,000,000 - $1,500,000.

The calculations in the Exhibit A are based on the following:

• The Distributor shall recoup its out-of-pocket costs (Advance Payment and P&A
costs).
• Deferred Actors’ Fees shall be paid to the all actors from gross revenue,
before any other deductions against gross revenue are calculated.
• Deferred Crew & Professional Fees shall be paid to the crew and production
staff from gross revenue, before any other deductions against gross revenue
are calculated.

Once the Distributor recoups its advance payment, fees and expenses, and all
deferments (approximately $2,500,000.) have been paid out, the Distributor, and
The Micheaux Foundation, will share in profits at percentages of 50/50. This is
based upon the highest assumption of a 50% distribution fee. The distribution
fee could actually be negotiated to as low as 40%, which would increase the
shared percentage between Production Company and Investors from 50% to
55%.

6.4.1. Financial Recoupment by the Venture Capital Investors

The advance payment from the distributor to The Micheaux Foundation of
approximately $1,500,000 per film, and the Micheaux Foundation's 50% share of
distribution proceeds will be used to partially repay the financing from its
venture capital investors.

6.5 Projected Balance Sheet

See Exhibit D (infra)

7.0 Projected Income-Generating Asset Acquisitions

The Micheaux Foundation, with the acquisition of certain key elements will
become a self-contained film production and training entity.

• Screenplay Acquisitions
The Micheaux Foundation presently owns the worldwide rights to five
completed screenplays, which are in development. Five more screenplays, in
addition to 20 "mini-feature" screenplays will be acquired as works for hire, with

36
all ancillary rights conveyed, in the next four years. The negatives of these
completed films, all music for hire contained therein, and all associated images
from these films will become assets of The Micheaux Foundation.

Income will be derived from the box office performance of the distributed films,
as projected in Exhibits B and C, supra. Ancillary income (non box-office) may be
derived from music soundtrack recordings/publishing and product licensing.

• Equipment Acquisition

Two Digital Camera Packages:

The Sony DSR-500 Digital Camera with interchangeable lens capability will
provide our filmmakers with a state of the art tool for feature film and video
production, competitive with the established N.Y. and L.A. production houses.
The Micheaux Foundation will acquire two Sony DSR-500 Digital Camera/Lens
packages for its “mini-feature” film production activities.
Cost: Approximately $30,000.

Income may be derived from renting the digital camera package to outside
productions. Rental fees in this area average approximately $300 per 24 hour
day. We anticipate that our digital camera packages will be available for rental
when not in use by Micheaux Foundation - sponsored productions, for an
average of 20 days per month. Assuming the lowest rental fee of $250/day,
monthly rentals would yield approximately $5,000 in additional income.
Income: Approximately $5,000/month

Motion Picture Camera Package:

The Arriflex BL4 - 35mm motion picture camera package is the standard for
feature film producers. The Micheaux Foundation will acquire two used Arriflex
35mm camera packages for its feature and “mini-feature” production activities.
Cost: Approximately $100,000.

Income may be derived from renting the 35mm motion picture camera package
to outside productions. Rental fees in this area average $1,200 per 24 hour day.
We anticipate that our 35mm motion picture camera packages will be available
for rental when not in use by Micheaux Foundation - sponsored productions, for
an average of 15 days per month. Assuming the lowest rental fee of $750/day,
monthly rentals would yield approximately $11,250 in additional income.
Income: Approximately $11,250./month

• Sound and Editing Packages:

DAT (Digital Audio Tape) digital sound recorders are the current state of the art
in feature film on-set sound mixing. The Micheaux Foundation will acquire two

37
Sony DAT Dolby® stereo sound recorders for use by its feature and “mini-
feature” filmmakers. This equipment will also be made available to be rented by
production companies in the Washington, D.C. area.
Cost: Approximately $3,000.

Income may be derived from renting the Sony DAT Dolby® stereo sound
recording packages to outside productions. Rental fees in this area average $150
per 24 hour day. We anticipate that our Sony DAT Dolby® stereo sound
recording packages will be available for rental when not in use by Micheaux
Foundation - sponsored productions, for an average of 15 days per month.
Assuming the lowest rental fee of $100/day, monthly rentals would yield
approximately $1,500 in additional income.
Income: Approximately .$1,500./month

The AVID Media Composer 1000 non-linear digital editing system will also be
acquired for our use and for rent. Ownership of this equipment will provide the
Micheaux Foundation with substantial savings. The rental of this equipment to
outside users will provide a substantial income that will re-capitalize the
acquisition cost of the equipment and will help to fund our programs in future
years. Cost: Approximately $90,000.

Income may be derived from renting the AVID Media Composer 1000 non-linear
digital editing suite to outside productions. Rental fees in this area average $125
per hour. We anticipate that our AVID Suite will be available for rental when
not in use by Micheaux Foundation - sponsored productions, for an average of
300 hours per month, computations based upon two 8 hour shifts per day and
six-day weeks; assuming 384 hours of use by Micheaux Foundation - sponsored
productions. Assuming the lowest rental fee of $100/hour, and subtracting the
compensation to the editor of approx. $30/hour, the monthly rentals would yield
approximately $21,000 in additional net income.
Income: Approximately .$21,000./month

• Real Estate Acquisition

The Micheaux Foundation will be housed in a rented office suite while we
explore real estate acquisition opportunities that will allow the Micheaux
Foundation to purchase a building that will be suitable to house its offices and its
editing and production facility as well as its training center. This will allow our
filmmakers to have independence from equipment rental houses, their fees and
their scheduling constraints, while providing an additional income stream for
our programs from equipment rentals. We anticipate having this fully-equipped
facility available for our film projects and workshops.
Cost: Approximately $300,000.

38
The Micheaux Foundation building will be used as a soundstage and shooting
location by Micheaux Foundation - sponsored productions. Income may be
derived from renting the offices and rooms within the Micheaux Foundation
building to outside productions. Rental fees in this area can range from $1,000 -
$3,000 per day, depending on the size of the room, the budget of the production
and the number of days needed for shooting. We anticipate that our soundstage/
rooms will be available for rental when not in use by Micheaux Foundation -
sponsored productions, for an average of 10 days per month. Assuming the
lowest rental fee of $1,000/day, monthly rentals would yield approximately
$10,000 in additional income.
Income: Approximately $10,000./month

Total Initial Asset Acquisition Expenditures: $523,000.

Total Projected Monthly Income from Assets: $ 48,750.
Recoupment Period: Approximately 11 months

39
 Exhibit A

Tentative Three Year Production Timeline

"Grounds For Divorce"

April - May 2001 Pre-production phase (secure crew and locations-equipment rental) : 30-
60 days

June - July 2001 Complete principal photography - promotional campaign for

distribution: 40-60 days

July - August 2001 Complete post-production, complete promo trailer or 35mm print,
Festival submissions (subject to timing and need) , Distribution
agreement & advance payment : 30-45 days

August - October 2001 Premiere and exhibition release (subject to distributor scheduling): 6
week theatrical run

Otober - November 2001 Post distribution net income stream begins

November - January 2002 Foreign release, domestic home video release (advance
payment), Cable TV release (advance payment)

"Tied Apart"
April 2001 Screenplay development: approximately 30-45 days

May - June 2001 Attach director, principal cast, cinematographer: 30 days

July - August 2001 Pre-production phase (secure crew and locations - equipment rental): 30-
60 days

November - December 2001 Complete principal photography - promotional campaign for

distribution: 40-60 days

December - January 2002 Complete post-production, complete promo trailer or 35mm

print, Festival submissions (subject to timing and need) ,
Distribution agreement & advance

January - February 2002 Premiere and exhibition release (subject to distributor

scheduling) : 6-week theatrical run

February - April 2002 Post distribution net income stream begins

April- May 2002 Foreign release, domestic home video release (advance payment), Cable
TV release (advance payment)

40
"Harry's Number"
September - October 2001 Attach principal cast, cinematographer, line producer: 30 days

October - November 2001 Pre-production phase (secure crew and locations - equipment
rental) : 30-60 days

November- December 2001 Complete principal photography - promotional campaign for

distribution: 40-60 days

December- January 2002 Complete post-production, complete promo trailer or 35mm

print, Festival submissions (subject to timing and need) ,
Distribution agreement & advance payment

January - February 2002 Premiere and exhibition release (subject to distributor

scheduling) : 6-week theatrical run

February - March 2002 Post distribution net income stream begins

March - May 2002 Foreign release, domestic home video release (advance
payment), Cable TV release (advance payment)

"Nat"
April - May 2002 Attach principal cast, cinematographer, line producer: 30 days

May - June 2002 Pre-production phase (secure crew and locations - equipment
rental): 30-60 days

June - July 2002 Complete principal photography - promotional campaign for

distribution: 40-60 days

July - August 2002 Complete post-production, complete promo trailer or 35mm

print, Festival submissions (subject to timing and need) ,
Distribution agreement & advance payment

August - October 2002 Premiere and exhibition release (subject to distributor

scheduling) : 6-week theatrical run

October - November 2002 Post distribution net income stream

November - January 2003 Foreign release, domestic home video release (advance
payment), Cable TV release (advance payment)

41
"The Talented Tenth"
October - November 2002 Attach principal cast, cinematographer, line producer: 30 days

November - December 2002 Pre-production phase (secure crew and locations - equipment
rental): 30-60 days

December - January 2003 Complete principal photography - promotional campaign for

distribution: 40-60 days

January - February 2002 Complete post-production, complete promo trailer or 35mm

print, Festival submissions (subject to timing and need) ,
Distribution agreement & advance payment

February - April 2003 Premiere and exhibition release (subject to distributor

scheduling) : 6-week theatrical run

March - May 2003 Post distribution net income stream

May - July 2003 Foreign release, domestic home video release (advance
payment), Cable TV release (advance payment)

42
 EXHIBIT B
Projected Two Year Distribution Revenue Stream

REVENUE SOURCES AND AMOUNTS

Potential Revenue >> Based on the following EXTREMELY CONSERVATIVE estimates
$ 4,704,000.00 Domestic Box-Office: 200 prints shown 3 times per day to 70 viewers avg. per screening
4 days per week for 8 weeks @ $3.50 net profit per ticket (to Distributor)

$ 320,000.00 Second Run Domestic Box-Office: 100 prints shown 2 times per day to 50 viewers avg.
per screening 4 days per week for 4 weeks @ $2.00 net profit per ticket

$ 1,344,000.00 Foreign box-office: 200 prints shown 2 times per day to 70 viewers avg. per screening
4 days per week for 6 weeks @ $2.00 net profit per ticket

$ 5,000,000.00 Home Video: 100,000 units produced & sold to video stores @ $85 per copy
with $50 net profit per unit sold
[net profit figure could be significantly higher -- this is a conservative estimate]

$ 823,200.00 Cable and/or Pay Per View: Various License Fees to cable networks and pay per view
(17.5% of Domestic Gross Box Office)
$ 12,191,200.00 TOTAL GROSS REVENUE

43
 EXHIBIT C
200 PRINT RELEASE SCENARIO
• “Net Profit to Investors & Producers” represents the amount to be paid to Investors &
Producers AFTER their entire capital investment is recouped
• Assumption: Advance Payment, P&A and deferrals = $2,500,000.

ADVANCE PROFIT SAMPLE TOTAL NET PROFIT TO NET PROFIT TO ROI

PAYMENT PERCENTAGE GROSS REVENUE DISTRIBUTOR INVESTORS & Percentage Net
(to SPLIT (from Theatrical PRODUCERS Return on
Producers) Exhibition, Home Video & (50% - 50% split ) Investment
DVD Sales, Broadcast
Licensing, etc.)
$1,000,000 60% Investors $12,000,000. - $2,500,000.= $3,800,000. $5,700,000. 385%
(lowest & Producers $9,500,000. @
fee/highest 40% Distributor $192.50/share
ROI)
$8,000,000. - $2,500,000.= $2,200,000. $3,300,000. 265% @
$5,500,000. $132.50/share
$4,000,000- $2,500,000 = $600,000. $900,000. 145% @
$1,500,000. $72.50/ share

$600,000 55% Investors $12,000,000. - $2,500,000.= $4,275,000. $5,225,000. 361% @

(medium & Producers $9,500,000. $180.63/share
fee/mid ROI) 45% Distributor
$8,000,000. - $2,500,000.= $2,475,000. 3,025,000. 251% @
$5,500,000. 125.63/share
$4,000,000- $2,500,000 = $675,000. $825,000. 141% @
$1,500,000. 70.63/share

$600,000 50% Investors $12,000,000. - $2,500,000.= $4,750,000. $4,750,000. 336% @

(highest & Producers $9,500,000. $168.75/share
fee/lowest 50% Distributor
ROI)
$8,000,000. - $2,500,000.= $2,750,000. $2,750,000. 238% @
$5,500,000. 118.75/share

$4,000,000- $2,500,000 = $750,000. $750,000. 138% @

$1,500,000. 68.75/share

44
 EXHIBIT D
Story Treatments

Grounds for Divorce

Screenplay by Kevin Jiggetts

Steven Eastman, Esq. has an extremely low tolerance for men who insist on
problem solving by means of domestic violence. Sly and cunning he acquires
damaging information against such men, some of whom are quite powerful and
quite dangerous, and sets out to ‘bury’ them in every sense of the word. His
successful Washington, DC divorce law practice is on the lips of every wealthy
socialite who has been abused and has had enough. As a wealthy bachelor /
lady’s man himself he has a great appreciation for good living and good loving.

Ricardo Deavers, with his much abused wife, Carla forcibly in tow, eludes FBI
investigators who wish to place him under their custody for his role as the
suspected mastermind of the murderous Gothom Armored Car robbery which
netted him $4,000,000. His flight from justice lands him and Carla in Washington,
DC where he hopes to lay low with his ill-gotten bounty until the heat is off. Mr.
and Mrs. Deavers are bound (1) by their son Jamal and (2) by a dark secret from
their past..

C. Douglas Fitzgerald is a shrewd and relentless multi-millionaire entrepreneur

who always gets his way in whatever endeavors he attempts by any means
necessary. He is the president and CEO of Digital Compact Systems, Inc. and
resides with Monica , the trophy wife who has, for years, been the target of his
emotional and physical abuse, in their Potomac, MD mansion. In the midst of
extreme divorce proceedings his buttons are pushed and his wealth threatened.
Steven Eastman, through his contacts, has gathered tons of damaging
information against him. C. Douglas Fitzgerald not only stands to be the victim
of financial disaster, but will be pushed the prospect of murder. He desperately
seeks a plan to reverse any and all adverse actions.

Carla Deavers unwittingly becomes the first of several bonds that connect
Ricardo Deavers, fugitive, Stephen Eastman, divorce lawyer, and C. Douglas
Fitzgerald, millionaire.

Carla, taken by a girlfriend to a prestigious nightspot to temporarily escape from

her problematic relationship, accidentally spills a drink on Stephen Eastman Esq.
The mutual attraction is strong and instantaneous. They interact as if bonded in a
previous life. Unbeknownst to Stephen or Carla, Ricardo Deavers has returned

45
early from a trip and sits, obscured from view and witnesses as his wife, with
another man, has the best time of her life.

C. Douglas Fitzgerald, who already has a personal vendetta with Stephen

Eastman, utilizes his investigative contacts to lead him to another party who feels
equally as threatened by Mr. Eastman and whose violent temper may be of value
to him. C. Douglas Fitzgerald, millionaire will cross paths with Ricardo Deavers,
fugitive. The offer is made and the plan is formulated.

Stephen Eastman Esq. will not only shoulder the responsibility of saving the lives
of two women, but will find himself sucked into a vacuum that consists of
conspiracy, kidnapping, murder, and a four million dollar armored car heist.

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46
TIED-APART
Story by Clayton LeBouef

A singer and news reporter meet during the 80's anti-apartheid movement.

RANDLE WALKER is lead singer of THE ASPIRATIONS, a vocal group that had
a few R&B hits in the late 60's, early 70's, but in 1981, is considered "old school.."

America is now in the post-disco, early hip-hop era, and The Aspirations are lost
to nostalgia. Good news comes, however, when the group gets a surprise offer to
perform in South Africa.

The paycheck for the concert would be enormous and everyone is excited.
Everyone but Randle, that is. He hesitates to become involved in the deal. He's
concerned about the boycott of South Africa by artists and athletes. Issues
regarding money, morality and apartheid begin to surface.

Randle clashes not only with his "boys", but also with his wife, mother and
family minister. They all urge him to break the boycott, as others are doing, and
return to the U.S. with personal finances intact. More problems come when a
news reporter hears about the offer made to the singers.

BRAZEL ANDERSON: is the reporter working at a small AM radio station. She

is a serious graduate student, active in a campus group called SOAR (Students
Organized Against Apartheid & Racism). Brazel wants to know where Randle
stands on the boycott issue. She can meet him to find out, by hanging with KYLE
SCOTT: a disc jockey, and ZACK HAMILTON: nightclub owner. The story, filled
with music, humor and controversy, moves toward a dramatic conclusion with a
confrontation between Randle, Brazel, and irate members of SOAR.

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HARRY'S NUMBER
Screenplay by Mark Stein

HARRY'S NUMBER is a smart comedy with romance, a high-stakes caper,

memorable characters and quotable dialogue. It's about an average guy, a sous
chef from the Midwest, who comes to DC and stumbles into extraordinary
circumstances. The phone number that was just activated in his new apartment
formerly belonged to a missing bookie/confidence man. Ultimately he finds
himself by assuming the identity of someone else.

The screenplay is by Mark Stein, author of the Steve Martin - Goldie Hawn
comedy HOUSESITTER which has grossed approximately $100 million.

The estimated production budget for "Harry's Number" is $500,000 - $750,000.

NAT
Screenplay by Michael Mack

Southampton County, Virginia. 1831. A preacher believes he is called by God

to end slavery. Is he a prophet? Is he insane? Are all revolutions created
equal? This true story is based on one of the most significant and least
understood events in American history: the Nat Turner Rebellion. The estimated
production budget for "Nat" is $1,500,000 - $2,000,000.

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The Talented Tenth
Screenplay by Cliff Pulliam
Hundreds of Black men and women are mysteriously disappearing from
neighborhoods around N.Y.C. All of them are either homeless, are current or
former criminals, or suffer from alcoholism or drug abuse. The Mayor has taken
credit for the resulting drop in the crime rate. His popularity soars in an election
year. The police will not investigate it. The newspapers will not cover it. People
outside of the affected communities know nothing about it. Who's responsible?
White supremacists? Skinheads? Who will stop them?

It's up to Amiri Truth, an ex-con and neighborhood activist, and Zora Neale, a
beautiful renegade journalist, with NYPD connections, to find these missing
children, brothers, sisters, parents and friends, and they must succeed without
the cooperation of the Mayor's Office and the NYPD.

Double standard? What if white people were mysteriously disappearing?

Amiri Truth and Zora Neale are joined by their own community police force, the
two largest rival street gangs in N.Y., who call a truce and agree to work together
and a group of NYPD officers who are outraged that no investigation is being
conducted.

They learn that the Talented Tenth is a secret fraternity whose members are some
of the most wealthy and powerful African American men in N.Y. They are
followers of W.E.B. DuBois and his philosophy that it is the responsibility of the
most gifted and educated of the race to lead the race out of oppression and that
they must use their talents to redeem only those others who are worthy of
redemption to bring them along to the new world order. Have they twisted
DuBois' ideals to fit their own very aggressive political agenda? If so, who else is
"unworthy"? The unemployed? The learning disabled? How about the elderly?
Nobody leaves their homes after dark, or allows their children to play outside.
The streets have become deserted.

How will it be possible to prove that The Talented Tenth is responsible? How can
they be stopped without the cooperation of local law enforcement and the city of
N.Y.? Are the people still alive, and, if so, where are they?

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49
13 Straight
Screenplay by Clifford E. Pulliam and Rhonda M. Scott

Nate “Silk” Davis is a former N.B.A. superstar whose career ended prematurely
due to an injury that he sustained shortly after an M.V.P. season in which he lead
his team to an N.B.A. championship. “Silk” has always been a savvy
businessman, very well connected in political circles and is a major philanthropist
within the Los Angeles African American community. “Silk” Davis has
ownership interests in several business ventures, but “Exoticars” is his most
visible venture. “Exoticars” is a Beverly Hills exotic car “boutique” which has on
its client list a veritable who’s who of celebrities, including corporate executives,
professional athletes and entertainers. “Silk” often plays pickup ball at
Westmoreland Park, a downtown park which is frequented by some of the best
street ball players in the city. Around the world, Nate “Silk” Davis is an icon. At
Westmoreland Park, “Silk” is God!

Mike Taylor is a young and ambitious deputy U.S. Attorney. Although a relative
newcomer to the office, he is considered to be among the rapid climbers within
the division with a spotless conviction record. He is known as a relentless
investigator who is never caught unprepared for a case. He has made no secret of
the fact that he desires more significant cases to prosecute. In response to his
desires, he is assigned to the biggest case of his career, the most significant case
pending in the division. A conviction could put Mike Taylor on the fast track
toward a judgeship or toward Washington D.C. and political office. His long-term
fiancee, Lynn Holland, a major social climber and the daughter of an influential
Federal Court judge, is his primary promoter and supporter. Mike also frequents
Westmoreland Park on weekends for pickup basketball and is usually
accompanied by his best buddy, Dr. David Harris, a successful young doctor and
playboy whose self anointed mission it is to get Mike to “lighten up”.

Mike, like many basketball fans, admires Nate “Silk” Davis and this will create
the most serious conflict of his life and of his career because he learns that Nate
Davis and his business practices at “Exoticars” is the target of the very
investigation that he has been assigned to lead. Reliable informants have fingered
“Exoticars” as a front for an east coast organized crime family. Money laundering
and the interstate and worldwide distribution of stolen exotic automobiles are the
primary allegations. An unsolved murder is also in the mix. Mike has been put in
a position to decide whether his admiration for Nate “Silk” Davis will, in any
way, influence his ability to zealously pursue a conviction in this case. He
speculates and even hopes that perhaps Nate Davis a mere figurehead and is not
involved in any wrongdoing by the underworld family. Is this the case where a
silent cash partner has become not so silent and has begun to enforce its will

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against a well-intentioned but powerless American icon with a solid reputation to
lose. Would Mike become a pawn in a government conspiracy to destroy yet
another successful African American man, eliminating another hero to two
generations of worldwide basketball fans? Perhaps the case was assigned to him
not on the basis of his ability but on the basis of his race.

Further complications arise when Mike, during the course of his investigation,
becomes romantically involved with Jade Brown, Exoticars’ Sales Manager and
Nate Davis’ protégé. Jade is articulate, streetwise well beyond her 20 years and
exceptionally beautiful, making Vanessa Williams look like a Schnauzer in
comparison! She craves excitement and attention and she shares Nate Davis’
passions for money and fast automobiles.

Every precision car theft requires the talents of a two person crew. The talents of
a technician are crucial to override the most intricate and expensive automobile
security systems. The talents of the chase car driver are necessary to get the
technician to the car and to escort the car back to the garage for shipping or
“chopping”. It is the chase driver’s job, if necessary, to provide a diversion for
the technician at the wheel of the freshly-purloined $60,000-$250,000 piece of
automotive inventory. By day, Jade is Sales Manager at Exoticars. By night,
however, she is the best chase car driver in the crew. Nobody can handle the
5.0 liter Mustang Cobra better!

Omar is the technician. He’s a live wire, a loose cannon, but he is also a computer
and electronics genius. He has committed the schematics to the most complicated
security systems to memory. Nate has reluctantly tolerated Omars’ eccentricities
and quirks, his drug habit and his continually unsuccessful romantic pursuit of
Jade because Omar is the best in the business and has never met an alarm that he
could not nullify within seconds. Omar resents Nate because of his standing
within the mainstream community. Omar feels that Nate has ridden on the back
of his talents to gain much of his post-N.B.A. wealth. Omar is also insanely
jealous of any man who has a relationship, actual or imagined, with Jade.

Nate fears that Omar’s reckless habits, if left unchecked, will eventually bring
down the entire operation. He only hopes that he has the opportunity for that
one last huge score that will enable him to buy out his partners and return
Exoticars to the legitimate enterprise that he envisioned when he created it.

Nate, through his contacts downtown, is alerted to the investigation by the feds.
He is also alerted to the relationship between Jade and Mike Taylor. He feels
betrayed by both Jade and Mike and becomes increasingly paranoid. Omar is
jealous of the relationship between Jade and Mike and develops a hatred for

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Mike. Omar, as a result, becomes increasingly erratic and violent as his drug use
escalates.

Mike’s investigation reveals that a pattern of payments in Exoticars’ accounting

ledgers indicates the existence of a substantial but unknown silent financial
partner in the enterprise who may be the actual kingpin of the organization,
using Nate as a figurehead for public relations purposes. Mike is determined to
find and to expose this person. It is at this point that the entire scenario “hits the
fan”.

A production schedule has not yet been projected for "Thirteen Straight."

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