Private Placement Memorandum for Film - Terms

Memorandum of terms for a proposed private offering of interest in a film project.

Instructions for completing subscription documents and links to other required documents can be found here: PPM for Film - Instructions for Subscription Documents

YOUR COMPANY LLC

UNITS OF CLASS A LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST

MEMORANDUM OF TERMS

This memorandum of terms summarizes the principal terms of a proposed financing of Your Company LLC, a Delaware limited liability company. It is subject to change and is qualified in its entirety by the terms of the final financing documents. If there is a conflict or inconsistency between this memorandum and the financing documents, the terms of the financing documents will govern.

THE COMPANY

Your Company LLC, a Delaware limited liability company (the “Company”).

PURPOSE

To fund the development and production costs associated with a film project entitled, “Your Company.

MANAGER AND MEMBERS

The Company shall be managed by a single Manager, who initially shall be Your Name. The existing member of the Company (who will hold the units of Class B limited liability company membership interest in the Company (“Class B Units”) at the closing of the offering) is Your Company LLC, a California limited liability company (“Your Company”). As of the date hereof, Your Company owns 100% of the Class B Units. The sole member and manager of Your Company is
Your Name.

SECURITIES OFFERED

Up to 3,250 units of Class A limited liability company membership interest (“Class A Units”).

PRICE PER UNIT

$100; minimum investment of $10,000, subject to the Manager’s discretion.

AGGREGATE CAPITAL

Maximum of $325,000.

POST-FINANCING CAPITALIZATION

If all of the Class A Units are sold, the Company’s capitalization on a fully diluted basis is expected to be as follows upon completion of the offering:

Units

Number of Units

Percent1

Class B Units

4,225

52%

Class A Units

3,250

40%

Class C Units (Employee Pool)

650

8%

TOTAL

8,125

100%

INITIAL CLOSING

The initial closing shall occur on or before September 31, 2007, or such later date as determined by the Manager. Following the initial closing, the Company may conduct one or more subsequent closings until the date on which the Company has accepted subscriptions for Class A Units in the aggregate amount of $80,000 (the “Initial Offering Amount”). Subscriptions received after the sale of the Initial Offering Amount will be held in a segregated account and released to the Company on the date the Company has received subscriptions in the aggregate amount of $245,000 (the “Final Closing”). The Final Closing shall occur by March 31, 2008, subject to the Manager’s right to extend the offering. The Manager and the Class B Member may purchase Class A Units.

EMPLOYEES, OFFICERS AND CONSULTANTS CLASS C UNITS POOL

Following the initial closing, the Company shall have an unallocated pool of 650 units of Class C limited liability company membership interest (“Class C Units”) representing 8% of the fully diluted units of limited liability company membership interest outstanding after the closing of the offering for issuance to managers, officers, employees and consultantsof the Company.

MANAGEMENT

The Company will be managed by a single Manager, who initially shall be Your Name. The Manager may only be removed as a manager for gross negligence, willful misconduct or fraud upon the vote of a majority-in-interest of the Members. The Manager shall appoint officers of the Company or retain professionals who will be responsible for the day-to-day management and operation of the Company.

COMPENSATION OF THE MANAGER

The Manager may receive compensation, including bonuses and other benefits, in connection with management of the Company, other than distributions to the Manager in respect of the Manager’s status as a Member, if applicable. The Manager’s compensation shall be approved by the holders of a majority of the then outstanding Class A Units and Class B Units, voting together as a single class. The initial Manager, Your Name, will receive approximately $7,000 per month as compensation in connection with management of the Company, and may receive bonuses and other benefits. The officers of the Company will receive salaries for their services to the Company. The Company may issue the Manager and the officers of the Company Class C Units in connection with their services to the Company.

ALLOCATION OF PROFITS, LOSSES, GAINS AND DEDUCTIONS

The Company’s profits, losses, gains, deductions and credits will be allocated as follows:

First, 100% to the Class A Members who invested the first $80,000 (the “Initial Class A Members”), in the proportion that each such Initial Class A Member’s unreturned capital with respect to Class A Units bears to the aggregate amount of unreturned capital with respect to the Class A Units held by all Initial Class A Members, until such Initial Class A Members shall have received a 50% cumulative preferred return in respect of their unreturned capital;

Second, 100% to the Initial Class A Members, in the proportion that each such Initial Class A Member’s unreturned capital with respect to Class A Units bears to the aggregate amount of unreturned capital with respect to the Class A Units held by all Initial Class A Members, until such Initial Class A Members shall have received an amount equal to their unreturned capital;

Third, 100% to the Class A Members other than the Initial Class A Members (the “Remaining Class A Members”), who invested the remaining $245,000, in the proportion that each such Remaining Class A Member’s unreturned capital with respect to Class A Units bears to the aggregate amount of unreturned capital with respect to the Class A Units held by all Remaining Class A Members, until such Remaining Class A Members shall have received a 20% cumulative preferred return in respect of their unreturned capital;

Fourth, 100% to the Remaining Class A Members, in the proportion that each such Remaining Class A Member’s unreturned capital with respect to the Class A Units bears to the aggregate amount of unreturned capital with respect to the Class A Units held by all Remaining Class A Members, until the Remaining Class A Members shall have received an amount equal to their unreturned capital; and

Fifth, to the Class A Members, Class B Members and Class C Holders ratably based upon the percentage interest represented by the number of outstanding Class A Units, Class B Units and Class C Units, respectively, held by each Class A Member, Class B Memberand Class C Holder, to the aggregate of Class A Units, Class B Units and Class C Units outstanding.

DISTRIBUTIONS OF NET OPERATING CASH

Mandatory Distributions. The Manager shall distribute an amount of net operating cash not later than 90 days after the end of each fiscal year to the Members to pay their respective income tax liability (or a reasonable estimate thereof) resulting from tax allocations of income, gain, loss, deduction and credit, reasonably estimated to pay such tax liability.

Other Distributions.To the extent that there is net operating cash available for distribution (after taking into account any mandatory distributions), it shall be distributed monthly in the same manner as profits, losses, gains, deductions and credits are allocated to the Members. Net operating cash generally will not be distributed to any Member to the extent that the distribution would create or increase a negative Capital Account for Member until no Member has a positive Capital Account.

LIQUIDATION

Proceeds from the sale of the assets of the Company (after payment or reserve for all liabilities of the Company) will be distributed to the Members in proportion to the positive balances in their Capital Accounts (as maintained for tax purposes). In general, the Capital Account of any Member will be increased by the amount of cash and the fair market value of any property contributed by such Member to the Company (net of any associated liabilities), the amount of Company liabilities assumed by the Member and allocations to the Member of Company income and gain (including tax-exempt income). The Capital Account of any Member generally will be decreased by the amount of cash and the fair market value of any property distributed to the Member by the Company (net of associated liabilities) and allocations to the Member of Company loss, deductible and non-deductible expenditures. Unrealized appreciation and depreciation of the assets of the Company will be reflected in the Members’ Capital Accounts prior to the liquidation of the Company.

COMPANY EXPENSES

The Company will pay all expenses of the Company, including without limitation, fees and costs of organizing and syndicating the Company, normal operating expenses, including direct expenses of the Manager incurred in management of the Company; all consulting, accounting and legal fees and expenses relating to the Company’s business; insurance and extraordinary expenses.

TRANSFERS

OF CLASS A UNITS

The transfer of a Member’s Class A Units shall require the consent of the Manager, except for permitted transfers to related parties (entities controlled by or under common control with a Member). No transfer shall be permitted which would have a negative effect on the Company, violate federal or state securities laws or result in a termination of the Company for tax purposes.

AMENDMENT OF OPERATING AGREEMENT

Amendment of the Company’s Operating Agreement will require the consent of a majority-in-interest of the Class A Members and Class B Members, voting together as a single class; provided however, that any provision of the Operating Agreement which would materially adversely affect the interests and rights of the Class B Members will also require the affirmative vote of the holders of a majority of the then outstanding Class BUnits.

REPORTS

The Members will be entitled to receive unaudited financial statements and tax return information within 90 days after each fiscal year-end.

FISCAL YEAR

December 31, or such other date as may be required under United States federal income tax laws.

CONSIDERATIONS FOR TAX EXEMPT INVESTORS

Any tax exempt investor, in particular pension plans or individual retirement accounts, may have to recognize some or all of its allocable share of Company income as taxable income, notwithstanding its otherwise tax-exempt status. Tax exempt investors are strongly urged to consult with their own tax advisor before investing in the Company.

TAX ADVICE

Internal Revenue Service regulations generally provide that, for the purpose of avoiding federal tax penalties, a taxpayer may rely only on formal written advice meeting specific requirements. The tax advice in this document does not meet those requirements. Accordingly, the tax advice was not intended or written to be used, and it cannot be used, for the purpose of avoiding federal tax penalties that may be imposed on Members. Further, the tax advice in this document was written to support the promotion or marketing of the transaction or matter discussed herein. Any person reading the tax advice should seek advice based on his, her or its particular circumstances from an independent tax advisor.

PRIVATE PLACEMENT; RESTRICTED SECURITIES

Class A Units will be sold pursuant to the exemption from registration in Rule 504 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, Class A Units will not be registered under the Securities Act or the securities laws of any state and, accordingly, will be restricted securities and cannot be transferred, sold, hypothecated, assigned or otherwise disposed of unless the Class A Units are registered under the Securities Act and applicable state securities laws or an exemption from such registration is available.

CONFIDENTIALITY

The information in this term sheet is confidential and proprietary to the Company and may not be disseminated, disclosed or used by any person without the written consent of the Manager. Notwithstanding anything herein to the contrary and except as reasonably necessary to comply with any applicable federal and state securities laws, prospective investors(and each employee, representative, or other agent of a prospective investor) may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to prospective investors relating to such U.S. federal and state income tax treatment and tax structure. For this purpose, “tax structure” is any fact that may be relevant to understanding the U.S. federal or state income tax treatment of the transaction.

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©2007 Your Company, LLC CONFIDENTIAL

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