"NAME OF FILM PROJECT"
This letter will constitute an agreement between us concerning certain monies to be advanced by you to me [or us, accordingly] for use in connection with expenses incurred and to be incurred for my proposed motion picture ("the Motion Picture") presently titled "_."
1. Upon the execution of this Agreement, you agree to pay me the amount of Five Thousand Dollars ($5,000) (the "Advance"), to be used by me, in my sole discretion, for preproduction and production expenses incurred in connection with the Motion Picture.
2. In consideration of the Advance paid to me hereunder, you and I agree as follows:
A. Out of my Producer's Share of the net profits, if any (as hereinafter defined), from the exploitation of the Motion Picture, you shall be entitled to receive a sum equal to_% of my Producer's Share of net profits.
As used herein, "my Producer's Share" shall mean the aggregate monies received by the Production Entity from the Motion Picture after the deduction of theatre owner's percentage or fee, distribution fees, the cost of prints, advertising, and distribution expenses, the equity interest (if any) due to suppliers and financiers of, investors in and guarantors of the "Main Finance" of the production, the production budget and negative costs and all other participations in gross and net receipts.
B. I shall have no obligation to repay any of your Advance to you except as follows:
(i) If, and only if, a final production budget is set for the Motion Picture, you shall receive out of the initial expenditure of funds from such production budget a sum equal to twice the amount of the Advance.
(ii) If we abandon the production of the Motion Picture (as provided in paragraph 3 herein), I shall return any unused portion of the Advance to you pro rata with any other persons who have made similar advances, if any.
3. It is understood that I shall have the right, in my sole discretion, if I shall deem it appropriate, to abandon the production of the Motion Picture at any time, whether before or after the commencement of principal photography, without any obligation to you hereunder, except for the pro rata return of any unused portion of the Advance.
4. This Agreement is made in the State of New York, and shall be governed and enforced in accordance with the laws of the State of New York.
5. Nothing herein contained shall be deemed to make you a partner or joint venturer with me in connection with the production of the Motion Picture.
If the foregoing fully sets forth our understanding, please sign below where indicated, and thereupon this will constitute a binding and enforceable agreement between us.
Very truly yours, [Producer's signature] [Producer's name]
ACCEPTED AND AGREED TO DATE
[Signature of development investor] _
[Name of development investor]
I know what one or two of you are thinking. A crafty individual could just keep making development deals and live off them for an entire lifetime. Tell investors the budget is $5 million and raise $50,000-$100,000, only to send out the letter in two years while living high on the hog in the meantime.
Exactly how many times do you think you'd be able to pull that off? How many close potential investors do you have? Remember, you can't reach out too far for development money. So you might be able to do it once, or even twice if they're soft touches, but not for a lifetime. And besides, is that how you plan to write your life in stone? By scamming development money and never making films? Good luck.
And just so you know, after all this in-depth explication about the nature of raising development money, I put up the $8,000 for The Sweet Life myself rather than go searching for it, and concentrated my time on the creation of the Business Plan and Memorandum, which would serve to secure me the funds necessary to put the film in the can, or the digital video on the tape . . . whatever.
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Your online business plan needs to make sure it addresses the management and administration structure in other words your organization’s breakdown. Online businesses often have a simpler organization structure than a traditional business, but that’s not always the case, and it must be clearly defined.