WHICH INVESTOR ARE YOU?

A type of film investor is the private film investor, or angel film investor. The private film investor is rarely as knowledgeable as a distributor or film buyer or other type of film investor, but they’re also much more common and accessible to the vast majority of independent filmmakers. After all, what is a film investor than someone who wants to put money into your film?

And it’s just a hunch, but I figure that if there are a million millionaires in America alone (and that number is probably much higher), then the odds of a DIY filmmaker landing financing from one of those million millionaires might be much better than those of landing professional film financing from an established funding source. Again, hunch. 

Straight up, as a producer or filmmaker trying to raise money for film, your job is to “sell” your film-to-film investors by making it as attractive as possible to that investor. 

Film investors who invest in film because they’re attracted to the glamour of Hollywood, or because Hollywood is just so different from what they may be steeped in day-to-day with their other careers or pursuits, generally are interested in putting money into a film because it buys them that closeness to what they perceive as the celebrity-oriented or more public-facing aspects of the film business. 

Another potential film investor is considering putting money into your film in order to advance the art, or to contribute to a specific sector of the arts, or even to help make an artistic statement. They may want to make a political statement or social statement and have strong feelings toward the final product. Film investors who truly understand the art are those who let the creatives bring their choices and ideas to life and share the creation.

No matter what the motivations, potential investor in your film should have a plan to make their money back. It’s up them to understand how much money you need over the various funding stages with details. Your producer should be absolutely cogent, on paper, how and when that potential investor will receive her money back, and how and when that potential investor will receive profits.

If you’re accepting real money in any significant amounts from a film investor — make sure everything is on paper and agreed to. You need to have all the details spelled out, whether its requested or not.

Most importantly, the potential film investor and Producer, should be a fit for a mutual success and what your film is trying to achieve.

Thanks for your review.

FILM NOTES, PROMOTION, DIDTRIBUTION AND BUDGET BREAKDOWNS.

(1) The film is complete: Written, developed, pre-produced, shot and post produced. In the best possible scenario, the entity that helped create and finance this end product, such as the studio or the streaming service continue with the work of promotion, release, distribution and exhibition: With these entities we share the in flowing profits. Not always, but a considered fair and an equitable sharing ratio is about 70% to the studio or streaming service and 30% to “Us” – the company, partnership and so on that physically and that materially created the product, engaged by the studio or the streaming service. Profit share ratios, of course, vary, depending on a variety of circumstances – examples have been listed in previous documents. PROMOTION: In this case, generally, just what the approach and the plan are, are left to the studio and the steaming services’ specialists and experts; although all products share some promotional aspects in common, no two products are exactly the same. There are templates and there are also original, individual contributions on to how the product will be brought to the public’s attention and of course, “unlock” their wallets, their credit cards, their pay pal accounts and any other means of payment exchange. DISTRIBUTION: How the actual product is brought to the means of public exhibition: In this case, the work of the studio and the streaming services’ experts. (2) The completed product has been independently, partially or fully financed. We have included in our budget, at least, some costs for distribution sales, promotion, release, distribution and exhibition. Ways to achieve this status include “networking with promoters, distributers, exhibiters; as simple as reaching out to friends, to colleagues and to perfect strangers. We are selling our product. An excellent avenue for the independent or partially independent produced product is to attend film markets and film festivals – often the same thing; obviously, depending on the product, we will target the venues that best lend themselves to our product: Certain festivals/markets for example trade in specific genres, such as potentially, horror movies: The competition can be fierce but often a great majority of distributers, studios and streaming services that want and that deal in specifically horror movies are present. It all becomes a matter of “excellent horse trading”! I would reemphasize the importance of “Networking” on a local, a national and a global scale. In this situation, it is important, obviously, to invest a lot of psychic energy and “sweat equity’” and always “expect the unexpected”. Who, in the final analysis, knows where a deal may emerge from, after all! (3) A quick note on content and on choice: Why make one product over another? How do you make your choice? Then go away, sell the idea, the script, the finished product, depending on circumstance? Today, the answer is still it all comes down to personal choice, personal preference and personal taste. It is all still a risk, a gamble and a matter of taking a flyer, probably based on your speculative intuition. Of course, to offset all this naked risk, in the eyes of the financiers, it does not hurt to attach or to have ancillary and supplementary inducements to the project: These often take the form of “tie in markets’: the product has already had a life with a proven, profit track record and a rock solid, fan base as perhaps, a comic book, a graphic novel, a more traditional novel, a television show, some sort of popular internet content, a remake of a film. Of course, it does not hurt if the film can lend its self to secondary and tertiary marketing. It can be, for example, turned, into a book, into a graphic novel; the accompanying musical sound track can sell well, garner a top forty hit. Possibly, the film can cultivate sequels or spin off into a television or streaming services’ series. In terms of tertiary marketing, in some cases, we are in “the sky is the limit” territory: The product could possibly generate toys for the very lucrative toy market – “people purchase toys for their children even during the most dire of times and in the darkest and deepest depression”. It need not stop here, if the product “catches fire” with the public, the list of goods associated with it or that want to be associated with it, are potentially excessively long: Clothes, appliances, food stuffs, cars and whatever the imagination can conjure up: In every case providing revenue for the controllers and the owners of the established product. Up to now, within the industry, this is still regarded as a random, unpredictable event, as luck! Or, as some idiomatically put it: “Catching smoke in a bottle!” However, a lot of work, a lot of research and a lot of money are being invested in finding ways to circumvent our unpredictable and sometimes mysterious responses to product. To render our investment choices a lot safer and a lot more predictable in terms of profit and in terms of revenue return. Masses of data on us from our purchase choices, from extensive interviews, from our actions and from our deeds, always however, being very sensitive to how we like to perceive ourselves. If psychology has taught us anything, it is the image we like to project of ourselves, and the images we like to cherish and to nurture of ourselves, are just as important if not more so than the reality of what we actually do and what we actually are. Many of us, perhaps, most of us do not want to see, most of the time, an unvarnished, “warts and all” picture of ourselves. It seldom matches the image of our own “self-hero” and all around good guy! This gathered data increasingly tells us what we want to see; not necessarily as one monolithic audience but more often as a section of that audience. So, fit the material to a particular section and there is a good chance you will be successful. Please note: All this activity is way beyond the realm of market research. Modern science is increasingly through closer, deeper, more specific and more intense reading of us, unlocking the patterns of our predictability; perhaps, it will render us completely predictable. Therefore, enter the data into “The algorhythm” then enter possibly, a one page outline of the project you want to embark on, and you will have your answer: A much safer indicator of your project’s chances of success. This is possibly “just around the corner”! (PERHAPS, SOME INTERESTING AND SOME PERTINENT FACTS: Per cent age of budget between various aspects of the film process: 20 – 30% on development and pre-production; 50 – 70% on production; 30% on post production – Nothing here, of course, is cast in concrete: Everything varies according to specific projects. All these figures are approximations and “guesstimates”. The separate categories of promotion and sales, if necessary, can, according to a couple of my colleagues cost twice to three times the cost of creating the project; again, this can greatly vary. It is commonly held that for most films to see profit, depending on the approach, they have to reap up to twice and three times the cost of their original budgets.

FILM CREATION OUTLINE.

The material that follows is a short guide to creating, to producing and to releasing a movie.

In many ways, today, we are in a fairly flexible era with a number of approaches to film creation.

So, let’s begin with an ideal scenario:

We create a property, the script. It could be an original script such as the excellent PLANET BROOKLYN; it could be an adaptation from other media, such as a novel, for example or material from a popular computer game or from podcasts, for example: Source material is becoming increasingly diverse. There are even projects in the works based on “tweets” and on Instagram posts

Some scripts are commissioned after the initial idea or concept. But, in my experience, the starting point tends to be a complete draft of a story/script.

In a best case scenario, the script is brought to the studios, where an executive responds favorably and they purchase the material. It is then the studio that begins to build the project, finding actors, writers for a re-write – a common practice – director, producers and often, even at this stage, a DP. In essence, the studio “packages” the project.

So, where does that leave you? Sometimes your involvement ends here. You are politely shown the door with a handsome sum of money in your hand, the production fee to come – two to four per cent of the budget after the budget

has been prepared – and if the movie turns into a success, royalty payments, potentially for the rest of your life and well into your descendants’ lives.

Sometimes, you continue to have involvement with the project, possibly for the purposes of re-writes or even to help guide the production, perhaps with the title: Associate Producer – a commonly recognized title that affirms that you have been granted continued involvement. But, this is understood as being nominal. You have negotiated a better deal, and also, it can be a great opportunity to learn how films get made.

If nothing else, having sold the script and or having been made an associate producer, you are now on the studio’s radar, and obviously, if the film is successful, the door to other opportunities will open. Even if the project is not a box office success, given the quality of the work, there are still, potentially, opportunities: Hollywood tends to go with the familiar, the tried and the true, the proven.

The script has now “been picked up” and we enter DEVELOPMENT. The cast, the director, the producer(s), the production designer and the DP are all secured. If there are to be re-writes, this is when they tend to happen. (Of course, some movies are being rewritten through filming and through post-production right up to release.)

Reasons for rewrites vary: The producers request them, sometimes based on input from readers, sometimes, star actors make requests and/or offer suggestions; often, the director has a lot of input.

Generally, as the script is being written, during development, an economic/financial entity is created to produce the project. Obviously funds are transferred and the “company (ies)” begin putting together all the personnel required to make a film. It is important to note, the “film company,” the economic entity constructed therein does not follow a particular template.

There are a number of different ways to finance the project. This, too, can be a fairly creative, albeit, legal process. For example, the studio has “green lit” the deal, and the producers receive a “negative pick up” deal: The studio

guarantees that it will promote and it will distribute the film; possibly that studio owned companies will undertake development, pre-production and post production. So, the producers, controllers of the entity built to make this particular project take this binding agreement to the bank and obtain the necessary, investment funds: The bank has the opportunity to either profit share or receive back their investment with a small amount of interest; not an easy decision to make: Pass on investment sharing in something like STAR WARS or at the other fiscal end, THE BLAIR WITCH PROJECT, you will probably live to regret it! But, pass on investment sharing in a glorious Hollywood dud – both fiscally and artistically – you will probably pat yourself on the back. Sadly, and not only in Hollywood, there are a long, long parade of complete duds!

Like so many aspects of our business, it is taste, the moment, a mystery even after careful analysis and brilliant promotion what the people want and what they will gravitate towards.

Soon, PRE-PRODUCTION begins: Including, finding locations, building sets, fully casting the film, fully crewing the project, screen tests, addressing issues unique to this particular film – even if they do not come until Post-Production – but, usually in our era of intense special effects and post effects, attention is paid to these from the beginning of the process.

In pre-production as much as can be done to anticipate any problems during filming is undertaken, and eventually, filming begins.

Hopefully, the filming process, PRODUCTION, is smooth, on time and on budget. However, we prepare for and we insure ourselves against all potential outcomes. Our excellent crew are masters of not only strategy but also of tactics, able to turn, to confront and to overcome any issue be it weather, sickness, unrest within the cast, uprising, natural disaster, completely unexpected and unpredictable events and so on…

Once the film “is in the can” and shot, POST-PRODUCTION begins. The film is edited, sound edited and all special effects and post effects are added. Generally, the music is created/added/ recorded during this process.

During Post, the film is given a set of visual and of aural enhancements, making it a richer and a more effective experience for the audience.

The credits are created and often, the show is given a set of test screenings in front of select audiences, afterwards asked to answer questions relating to the film. From this data, often tweaks are made to the story, to the edit and to the sound edit.

Of course, often from development, great attention is being given on how to promote the project, to sell it to as wide an audience as possible: A campaign is developed accordingly, and some of the most creative “branders” are often involved here.

The film is released and it goes on to Universal and global success: To say nothing of award winning, critical achievement.

This is an ideal success story: A film made through the proven structures and with the large and generous resources of the studio. It is a system that has worked amazingly well for more than a hundred years. Yes, with challenges and with some difficulties along the way. But, it has always adapted and proved very resilient, as the huge profit ratios demonstrate.

Networking, luck and talent enter the picture now: Through your network you meet an agent, through luck you meet one. Most importantly, you have them or their reader look at your script. They see something in it, and you begin a professional relationship of representation. This can often be a “push me, pull you” affair: The agent feels he/she is doing much for you, taking a big risk with an unknown, you feel he is not pushing hard enough for you…” Success is the great resolver, I speculate,

Hire a reputable individual to be your producer – someone with a lot of experience as a line producer, for example – and simultaneously juggle a number of tasks: Pursue cast, a director, a DP, a production designer, a distributor, a “branding” firm.

This will require promotional documentation – the pitch document - on the story/project, how the process of film creation etc.… works, and of course, how potentially, you can make money, and depending on where you are in the world, how you offset losses. In some regions, film and media losses can be set against taxes.

You raise the money, you are the studio, you are the promoter, you get a distribution deal – and the ratio of profit sharing between you and a distributor can vary greatly; may the best and the smartest negotiator win!

Projects can be released over social media, You Tube for example. But, still, that is at best, a ploy and a means of getting a more traditional release: The theatres and the streaming services, leading to cable and to basic television.

Possible ways to enhance a project include but are not limited to shooting a scene or two from the film, a “trailer;” adding it to the pitch document,

putting it on the web site and just presenting it on You Tube, with a catchy title.) Promoting a film, bringing attention to it is as creative as writing and making the project: It requires reinvention, boldness and a willingness to risk both discarding convention and embracing tradition, depending on your intuition and the context you are in… one of the great things about this world of media is the fact, there are many right ways to do things.

But more importantly how you create a successful project and film, so your investors are not only happy with the product but also happy with their return on their investment and coming back for more. Don't forget to have fun during your journey.

SAMPLE LINE ITEM FOR FILM PRODUCTION BOTH CATEGORIES AND COSTS

The sample budget includes Above Line, General, Postproduction and Grand Total with 96 additional pages available.

SAMPLE INVESTORS CONTRACT

INVESTOR FINANCING AGREEMENT

THIS AGREEMENT made effective as of the _____ day of ______________, _______.

BETWEEN:

[NAME OF INVESTOR]

a _______ corporation having an office at __________ [address] / an individual resident at _________ [address]

(the “Investor”)

- and -

[NAME OF PRODUCTION COMPANY]

a _______ corporation having an office at __________ [address]

(the “Production Company”)

WHEREAS the Production Company has acquired the rights to a screenplay entitled “__________________”, written by ____________________, which the Production Company will produce as a feature length motion picture (the “Project”);

AND WHEREAS the Investor has expressed an interest in investing up to USD $___________________ in the Project in return for a share in the equity of the Project;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements contained in this Agreement, the parties hereby agree as follows:

1.                  Production of Project

The Project shall be produced by the Production Company in accordance with a Production Agreement dated effective __________ [insert date], a copy of which is attached hereto and marked Exhibit “A” (the “Production Agreement”). The Production Company hereby warrants and represents that:

(a)                no deferments (other than those set out in the Production Agreement) have in the past or will in the future be granted to any person or party which may in any way affect the interests of the Investor described below;

(b)                no gross participation in profits have in the past or will in the future be granted to any person or party which may in any way affect the interests of the Investor described below; and

(c)                the Production Company shall not modify, amend or terminate the Production Agreement without first obtaining the Investor’s prior written consent to do so.

2.                  Distribution of Project

The Production Company shall use its best efforts to cause the Project to be exploited in all markets and media, so as to maximize the monetary return to be derived by the Project. To that end, the Production Company shall endeavor to arrange for third parties to distribute and/or exploit the Project on such commercially reasonable terms as the Production Company might be able to obtain. The Production Company shall be entitled to reimbursement, out of the proceeds of distribution, of any reasonable direct out-of-pocket third party costs or charges it might incur in connection therewith. The Production Company shall receive no consideration whatsoever for the services it shall render in connection with this paragraph. Further, the Production Company shall have no obligation to distribute or exploit the Project itself if it is unable to arrange for third parties to do so.

3.                  Contribution of Investor

The Investor’s monetary contribution to the Project shall total ____________________ (_______), in lawful money of __________ [country] (the “Investment Amount”). The Investor shall deliver the Investment Amount in certified funds payable to the Production Company’s designated Escrow Account, however, the Escrow Agreement and Instructions to Escrow Holder shall provide that the full amount of such funds shall not be released from escrow to the Production Company unless and until all of the following conditions precedent have been fulfilled:

(a)                __________________ [insert name of completion guarantor] shall have delivered to the Investor a copy of its duly executed Completion Guaranty relating to the Project naming the Investor as a guarantee to the extent of its investment therein, together with:

(i)                 confirmation in writing that all conditions precedent to the Guarantor’s obligations arising under the Completion Guaranty have been met; and

(ii)               so-called “cut-through” endorsements between the Investor and the Guarantor of completion of the Project;

(b)                certificates of insurance naming the Investor as an additional insured shall have been delivered to the Investor, indicating that all insurance normally obtained in connection with the production of a motion picture photoplay, including errors and omissions insurance, has been obtained with commercially reasonable liability limits and deductibles, and that the policies of insurance cannot be canceled or amended without first giving the Investor thirty (30) days’ prior written notice.

The Investor agrees, however, that the Production Company’s Escrow Agreement and Instructions to the Escrow Holder may provide that the Escrow Holder is authorized to pay an amount equal to the initial premiums of the above described Completion Guaranty and motion picture insurance coverage out of the escrowed funds and to the Production Company for its use in securing such Completion Guaranty and insurance coverage and that the Investor shall be at risk on such amounts in the event, for any reason, the distribution and exploitation of the Project fails to generate net profits.

4.                  Recoupment of Investment; Participation in Profits

In consideration of the Investor making the investment in the Project, the Production Company shall pay the Investor the following:

(a)                Recoupment Plus Interest - Priority Payments: One-Hundred percent (100%) of any and all net profits as that term is defined in the Project’s domestic theatrical distribution agreement (subject, however, to allowable reimbursement deductions in accordance with paragraph 2 hereof), plus interest paid on the unpaid balance of the invested amount at the rate of _________ percent (___%) per annum, with interest accruing from the date on which the full Investment Amount is placed under the control of the Production Company for the purposes described herein, until the date the Investor is repaid in full.

(b)                Net Profit Participation: _____ percent (_____%) of all net profits of the Project as that term is defined in the Project’s distribution agreement for its domestic theatrical release. The net profits participation of the Investor as described in this sub-paragraph (b) shall continue so long as the Project is generating net profits based on its distribution and exploitation in any and all markets and media, except that the Investor shall have no interest in whatever residual value the Project may have, if any, following the completion of such third-party distribution and exploitation. By way of example, the Investor shall have no interest in whatever value, if any, the Project may have as part of a library of films that the Production Company has produced or will produce in the future.

The Production Company shall be free to grant additional net profit participation interests to such third parties as it might elect without first obtaining the Investor’s consent thereto, provided, however, that no such grant of net profit participations may in any way adversely affect the Investor’s net profit participations described in sub-paragraphs (a) and (b) above.

5.                  Investor Approval Rights

The Investor shall be actively involved on a regular basis and in a material manner in all significant decisions relating to the development, pre-production, production, post-production, distribution and other exploitation of the Project. The Investor shall have the right to approve the final budget, shooting script, choice of producer, director, director of photography, casting of lead actors, and distribution arrangements for the Project.

6.                  Project Budget

It is intended that the direct cash cost budget of the Project be $_____________ or less, inclusive of non-reimbursable overhead and pre-production expenses incurred by the Production Company (the “Budget Cost”).

7.                  Return of Unexpended Contributions

If the actual cost of producing the Project should be less than the Budget Cost set forth above, the Production Company shall pay fifty percent (50%) of any such sum remaining to the Investor. Any monies received by the Investor in accordance with this paragraph shall reduce that amount of money payable to the Investor in accordance with paragraph 4(a) above, on a dollar-for-dollar basis.

8.                   Representations and Warranties

The Production Company hereby represents and warrants to the Investor that:

(a)                It is duly incorporated under the laws of _______________, and is validly existing and in good standing.

(b)                It has the corporate power and all necessary rights and title to enter into and perform this Agreement and the transactions contemplated hereby or referred to herein and has taken all necessary action to authorize the entry into and performance of this Agreement and such transactions.

(c)                This Agreement constitutes a legal, valid and binding obligation of the Production Company and is in proper form for enforcement against it.

(d)               The entry into and performance of this Agreement and the transactions contemplated hereby do not and will not conflict with:

(i)                 any existing law or regulation or any official or judicial order, or

(ii)               the Production Company’s articles of incorporation, or

(iii)             any agreement or document to which the Production Company is a party or which is binding upon it or any of its assets.

Without limiting the generality of the foregoing, the Production Company represents and warrants that there are not now any liens, claims, encumbrances, legal proceedings, restrictions, agreements or understandings which might conflict or interfere with, limit, derogate from, or be inconsistent with or otherwise affect any of the provisions of this Agreement or any of the representations or warranties of the Production Company contained herein, including without limitation, any security filings, copyright assignments or other liens inconsistent herewith, or offsets or other costs charged against the Project by any distributor pursuant to cross-collateralization agreements or otherwise.

(e)                All authorizations, approvals, consents, licenses, exemptions, filings, registrations, notarizations and other matters, official or otherwise, required by the Production Company or advisable in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated hereby the Production Company have been obtained or effected and are in full force and effect (other than the registration of security interests to be created pursuant hereto).

(f)                 No litigation, arbitration or administrative proceedings are threatened or, to its knowledge, pending which call into question the validity or performance of its obligations hereunder.

(g)                Each copy of a document delivered to the Investor by or on behalf of the Production Company under or in connection with this Agreement and/or any prior negotiation between the Production Company and the Investor constitutes a true and complete copy of the document of which it purports to be a copy and all facts, circumstances and other documents which might materially affect their interpretation have been disclosed in writing to the Investor.

(h)               All information which might be material to a person assuming the obligations and acquiring the rights assumed and acquired by the Investor pursuant to this Agreement has been disclosed in writing to the Investor and there are no facts or circumstances which might make such information misleading or inaccurate.

(i)                 The Production Company’s warranties, representations and agreements are of the essence of this Agreement and shall survive the early termination hereof. None of the Production Company’s warranties, representations or agreements shall in any way be limited by reason of any investigation made by the Investor or on behalf of the Investor regarding said warranties, representations or agreements.

9.                  Indemnification of Investor by Production Company

The Production Company shall, at its own expense, indemnify, save and hold harmless the Investor and its directors, officers, employees, licensees, agents, representatives, affiliates, successors and assigns from and against any and all claims, demands, causes of action, obligations, liability, loss, damage, cost and expenses (including reasonable attorneys’ fees), incurred or sustained by reason of or arising out of any breach or alleged breach of any of the warranties, representations or agreements herein made by the Production Company, or from any reliance upon any such warranties, representations or agreements. If any person or entity shall make any claim or institute any suit or proceeding alleging any facts, which, if true, would constitute a breach by the Production Company of any warranty, representation or agreement herein made, the Production Company shall give prompt written notice of same to the Investor and the Production Company shall undertake at its own cost and expense the defense thereof and shall supply competent and experienced counsel to defend any such suit or proceeding. The Investor may also engage its own counsel in connection with any such suit or proceeding.

10.               Accounting and Reports by Production Company:

(a)                The Production Company shall maintain complete books and records with respect to the distribution and exploitation of the Project. The Production Company shall render to the Investor, on a [quarterly / half-yearly] basis for the first two (2) years after initial distribution of the Project, a written statement of monies due the Investor hereunder, if any (“Investor Statement”), and such Investor Statement shall be accompanied by remittance of any amount shown to be due to the Investor thereon. Thereafter, Investor Statements and payments shall be provided annually for as long as the Project generates net profits. If any error is made by the Production Company in any Investor Statement, it may be corrected by the Production Company within two (2) years thereafter by making any necessary deductions or additions on subsequent Investor Statements, or at the Production Company’s option by rendering an Amended Investor Statement. Each Investor Statement shall be rendered within forty-five (45) days following the end of each accounting period. Any Investor Statement rendered by the Production Company hereunder shall be deemed conclusively true and correct and binding upon the Investor, shall constitute an account stated and be incontestable unless the Investor delivers to the Production Company in writing specific objections, setting forth specific transactions or items objected to and the basis of such objections, within one (1) year from the date of such Investor Statement. Any recovery by the Investor shall be limited to those items specifically objected to in writing by the Investor within said one (1) year period.

(b)                The Investor shall have the right to examine the books and records of the Production Company to the extent they pertain to the Project. Such examination shall be made during reasonable business hours, upon reasonable advance written notice, at the regular place of business of the Production Company where such books and records are maintained, and shall be conducted on the Investor’s behalf and at the Investor’s expense by the Investor or the Investor’s designee. Such examination shall not be made more frequently than once every ____ months, and no more than once with respect to any accounting period or Investor Statement rendered hereunder. With respect to any accounting period for which an Investor Statement has been rendered by the Production Company, such examination shall be permitted only for a period of one (1) year from the date such Investor Statement was received by the Investor. The Investor’s examination shall be limited to those records relating to the Project and under no circumstances shall the Investor have the right to examine records relating to the Production Company’s business generally or relating to other motion pictures for purposes of comparison or otherwise.

(c)                No action, suit or proceeding arising out of this Agreement or concerning the Investor Statement or other accounting rendered by the Production Company hereunder or to the period of time to which such Investor Statement or accounting relates may be maintained against the Production Company unless commenced within one (1) year after the date such Investor Statement or accounting is received by the Investor.

(d)               The Production Company shall, upon the Investor’s request, avail itself of any audit right the Production Company might have under any distribution agreement the Production Company might enter into relating to the Project. The expenses of such an audit, if not reimbursable by such distributor, shall be a deductible expense under paragraph 2 hereof.

11.               Funds Held in Trust

All monies received by the Production Company which are payable to the Investor in accordance with the provisions of this Agreement shall be held by the Production Company, in trust, for the sole use and benefit of the Investor and shall be immediately deposited upon receipt in a separate interest-bearing bank account naming the Investor as the beneficiary thereof. The Production Company shall not commingle the monies payable to the Investor hereunder with other monies of the Production Company.

12.               Relationship of Parties

The Investor and the Production Company each acknowledge that they are independent contractors and that no partnership, joint venture, agency or employment relationship has or will be created by this Agreement. However, nothing herein shall prevent the Production Company from subsequently initiating arm’s length negotiations with and engaging the Investor and/or any company of which the Investor is the owner or joint owner as an independent contractor for the purpose of providing services to the Project, in which case the Investor and/or the Investor’s company shall be paid budgeted costs out of the Project’s budget.

13.               Business Opportunities

Each of the parties acknowledges that this Agreement relates only to the above described Project and than none of the parties will in any way be restricted from any other business activity (including any motion picture activity), whether or not competitive to the Project, it being agreed that so-called “corporate and/or joint venture opportunities” or fiduciary opportunities in relation to any such other activities are hereby waived by each of the parties.

14.               Further Assurances

Each of the parties agree to execute any additional documents which may be required or desirable to fully effectuate the purposes and intent of this Agreement or to carry out the obligations of the parties hereunder, provided that they are not inconsistent with the provisions of this Agreement.

15.               Notices

All notices required or permitted to be given pursuant to this Agreement shall be delivered by hand to the party for which it is intended, or sent by regular post, or transmitted by facsimile, telegram, electronic email or other form of transmitted or electronic message, or sent by prepaid courier directly to such party at the following addresses, respectively:

TO THE PRODUCTION COMPANY:

[address]

[facsimile number]

Attention: [name of contact person]

TO THE INVESTOR:

[address]

[facsimile number]

Attention: [name of contact person]

or at such other address as either party may stipulate by notice to the other. Any notice delivered by hand or prepaid courier or sent by facsimile or electronic email shall be deemed to be received on the date of actual delivery thereof. Any notice so sent by telex, telegram or similar form of transmitted message shall be deemed to have been received on the next day following transmission. Any notice sent by regular post shall be deemed to have been received on the third (3^rd) day following mailing.

16.               Assignment

Neither party hereto shall have the right to assign all or any part of its right or obligations hereunder without the prior consent of the other party, except that nothing contained in this paragraph shall prevent any party from assigning its right to receive monies hereunder.

17.               Miscellaneous Provisions

(a)                This Agreement may not be modified except by an instrument in writing signed by all of the parties hereto.

(b)                This Agreement shall in no event be construed as a third party beneficiary contract and is not intended for the benefit of any person or company whomsoever except the parties hereto.

(c)                No waiver by one party of a breach or default by the other party shall be deemed to be a waiver of any preceding, continuing or succeeding breach of the same or any other provision of this Agreement.

(d)               This Agreement constitutes the entire Agreement of the parties regarding the subject matter hereof and supersedes all prior Agreements with respect thereto, whether written or verbal. Each party acknowledges that no representation or warranty not expressly set forth in this Agreement has been made or relied upon by the other party.

(e)                This Agreement shall be governed by and construed in accordance with the laws of _______________. Any legal actions, claims or demands shall be handled in a court of competent jurisdiction within _________________.

(f)                 Should there be any dispute between the parties concerning the interpretation of this Agreement or concerning an alleged breach of this Agreement, which the parties are unable to resolve after consultation with each other, such dispute shall be decided by arbitration pursuant to the regulations and procedures of the _________________ Arbitration Association [enter the name of the applicable governing body].

18.               Attorneys’ Fees [this clause is for USA contracts]

In any action or proceeding between or among the parties hereto to interpret or enforce any of the provisions hereof, the prevailing party shall, in addition to any other award of damages or other remedy, be entitled to reasonable attorneys’ fees and costs.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

By or on behalf of                                                                            By or on behalf of

[NAME OF PRODUCTION COMPANY]                              [NAME OF INVESTOR]

Signature                                                                                            Signature

Print Name & Title (if any)                                                            Print Name & Title (if any)