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INITIAL DRAFT
Plan for the development and implementation of the BRIGHT STAR FUND A US_____ million motion picture speculation fund A proposal submitted to _____________________________, Inc. by CINTEC' PO Box 1104 Northbrook, IL 60065-1104 (708) 272-0294 This draft proposal is based upon on-going discussions between Mr. August N. Alonzo, CINTEC' president ("CINTEC") and Messrs.________________and____________________________________co- Chairmen of___________________________________________Inc. ("CE ). CE_____has expressed interest in utilizing CINTEC' expertise as licensed money managers and technical investment and marketing advisors as applied to the Bright Star Fund, a U.S._____ million motion picture speculation fund, to be sponsored by CE_____. The initial objective is to combine forces and efforts to create an develop a viable business plan and marketing strategy, which will qualify as a strong marketing vehicle to arouse the interest of the Investment Banking community and will also have the necessary components to attract investors as an offering to the U.S. general public. This goal is to be accomplished via a three-pronged effort as follows: A. The CE______management team will provide the necessary artistic creativity and proven business skills to compete in the current business climate of the Motion Picture industry. Initially, these qualifications will be reflected in a state-of-the-art business plan, the preparation of which will be supervised by CE______and prepared by the most qualified professional available. B. CINTEC' will provide technical analysis procedures. These procedures will be applied not only to speculation in motion picture production, as outlined in the accompanying CINTEC' brochure, but will also be applied to the goal of determining a successful offering to the public. Because this offering to the public is also a speculative endeavor it is also able to be analyzed technically. CINTEC' will utilize its national reputation as leading technical analysts in whatever ways will be useful to the accomplishment of these objectives. CINTEC will be counseled in business and accounting matters by its personal tax and accounting advisor of 25 years, Mr. Martin H.__________, CPA. C. The actual filing and all matters related to and dealing with the Securities Exchange Commission and underwriting community will be handled by Mr. Ronald H._____partner in the Chicago, Illinois law firm of_________________________. Mr._______, an associate of Mr. Alonzo's since 1982, is a well-known and highly respected leader in the financial community. The combination of these three proven forces working in tandem toward the same goal greatly increases the effectiveness of this effort and, thereby, increases the likelihood of success. In order to capitalize on technical analysis in these endeavors, it is necessary to harmonically coordinate the efforts of the three key parties. This can be a simple matter if the basis is understood. Imagine, if you will, a still pond. Into the center of this pond we will toss a pebble. From the point of the pebble's entry into the water will emanate a systematic and orderly flow of ripples. The distance between the pebble's entry point and any particular ripple is called the Harmonic Interval. As in music, some intervals are harmonious (easy flow and supportive); others are discordant (extra effort required, repelling). Any action or beginning sends out its own ripples. By calculating and knowing when efforts will receive support or resistance, activities can be planned to maximize during harmonious timeframes. Less propitious timeframes are then used to regroup and prepare for the next entry into the marketplace. As always, the policy is to "do one's best" to utilize these principles and be willing to adjust to circumstances as may be required. In order to apply these principles to the film marketplace, CE_______and CINTEC' must cooperate as follows: A. WHICH PRODUCTS TO INVEST IN: CINTEC' will be consulted and will provide input into which projects are approved for production. Because CINTEC' has full confidence in CE_____ creative staff, they will have final authority in such matters. CINTEC' has confidence in the current_______CE_______production slate. B. HOW MUCH TO INVEST: CINTEC' ideal risk/money management policy is to limit capital exposure to 10% of available assets on any one particular venture. Again, CINTEC' has confidence in the CE_____staff and will not limit them unnecessarily with this policy. However, any capital exposure of 12% or more of available assets on a given project must be engaged in only with CINTEC' written approval. (As a point of fact, the more projects launched from a given pool of funds, the better the chance of overall success.) C. ADVICE AND COUNSEL: The CINTEC' objective is this venture is to achieve resounding success for CE_____as therein lies its success. Any technical or artistic insight which CINTEC' can provide the venture is available upon request. D. WHEN TO INVEST (BUY); WHEN TO RELEASE (SELL): CINTEC' forté is the ability to locate and exploit market entry and exit points. These points are key mathematical peaks within a given economic price or time cycle. The best time to invest (begin production) or release (offer to market) is paralleled in stock and commodity investing by buy and sell points. The mathematical calculations are the same for both. Given the proven value of utilizing this insightful knowledge, CINTEC' will maintain final authority in such buy/sell matters. A production will be considered to have begun upon the execution of a written release order from CINTEC' to the financial institution holding the Bright Star funds. This order will state the time, date and amount of funds to be forwarded to the producing entity, CE . A production will be considered to be released by the execution of a written order to CE . This order will state the ideal time, date and circumstance to debut the film if such control is in hand, or the ideal time, date and circumstance to release control of the film to the distribution entity if that be the best line of approach. CINTEC' will serve on the CE_______Board of Directors. Such a position will provide investor confidence, knowing their financial interests are represented. CINTEC' remuneration from CE for this Board position will be based on current industry standards. The participation requirements section on the insert card of the accompanying CINTEC' brochure states the expense structure as such: a. An initial front-end fee of $750 thousand to cover legal, filing and technical research. b. Earnest money in the form of a non-refundable 10% retainer fee ($75 thousand) must be submitted in order to initiate preliminary activities. These expenses will be advanced to the fund by CE_______and will be reimbursed to CE_______upon successful completion of the offering. The $750 thousand, which is considered to be a reasonable figure for this type of venture, will be allocated as follows: CINTEC' will receive a one-time, flat fee for its services through the successful completion of the offering. This fee will be the initial $75 thousand retainer and will cover all CINTEC' expenses related to this phase of the venture. All other expenses will be billed to CE_______directly by Ronald H._____. Mr._____ Will require the establishment of a $50 thousand interest-bearing escrow account and, from that point on, will bill CE_______monthly. If at any time the project is scuttled and there remains an unpaid balance, that balance will be deducted from the escrow account before the balance of the escrow account is returned to CE_______. If there is no unpaid balance, the entire account will be returned to CE_______. Mr.__________ anticipates offering expenses to be as follows: a. Legal $250 thousand (*It is difficult to assess the cost of printing in this type of venture, due to the possibility of unforeseen changes and reprints, etc. Printing can prove to be the most costly single expense. $100 thousand to $300 thousand is possible.) As can be seen, $750 thousand should adequately cover offering expenses. Mr.__________will give further explanation of offering expenses during a forthcoming conference call. At this point, it is estimated that a timeframe of 6 months to 1 year from the adoption of this proposal will be needed to launch and implement the Bright Star Fund. This is a rough estimate and will be further clarified during the initial conference call. Other than the fee for serving on the CE_____Board of Directors, CINTEC' remuneration will be provided by the investor portion of the proceeds, which will be structured as follows: a. Management Fee: 2.5% per year of funds up to $25 million U.S.; 1% per year of the amount over $25 million b. Expenses: 2% of the capital for preliminary initial expenses, organization and fund-raising c. Management Incentive: 18% of profits after interest corrections for the benefit of shareholders of the Bright Star Fund. To be paid quarterly. |