This investment proposal summarizes information on the film industry and a film financing fund called Serafini Pictures. Box office revenues and movie attendance have risen significantly in recent years, even during the recession, showing the resilience of the film industry. Serafini Pictures provides transparency to investors and plans to finance 4-6 films per year with budgets between $7.5-15 million. The financial model projects returns of 47.6% IRR over 5 years for investors, with typical payback periods of 18-24 months and recoupment of investment plus 20-50% of net profits. Susanne Bohnet's experience in film financing is also summarized.

1. Investment Proposal

2. March 16th, 2009 - USA Today
“More people are going to the movies, and due to the economic conditions, the
audience has gotten a lot older - it has really broadened out. The 12% rise in year-
to-date receipts and 15% jump in attendance appears to be from new viewers.”

3. February 17th, 2009 - The Wall Street Journal
“For the year, revenues continue to soar, with revenue at $1.44 billion, up 22%,
through the same point in 2008. Factoring in 2009’s higher ticket prices, movie
attendance is running 20% higher than last year’s.”
“Hollywood seems up-stoppable right now. With this notion of the recession
helping the box office, people want to go to the movies to just have fun and
escape.”

4. January 24th, 2009 - The New York Times
“Suddenly Hollywood Seems a Conservative Investment”
“Wall Street, real estate, the art market - all those supposedly stable investment
areas - are now such a mess that Hollywood is one of the safer places you can
park money. Although the movie business has been hurt along with nearly every
other industry, it’s proving far more resilient to recession than most.”

5. An Investment in a Growing Industry
According to the Motion Picture Association of America, worldwide box office has
reached another all-time high, with $28.1 billion in 2008, compared to $26.7 billion
in 2007, a 5.2% increase. The demand for filmed entertainment and digital media is
growing, even during times of recession.

6. Providing Transparency to Investors
Studios are known for being guilty of little transparency with regard to reporting
net profits to single producers and are notorious for having significant overhead
expenses that eat away at, or eliminate net profits.
Serafini breaks this mold by implementing a straight-forward, fee-based business
model, providing transparent accounting and resulting in higher returns for
investors.

7. Advantages to the Studio Alternative
Commercial, mainstream movies with a high production value can be made for
about 30-50% less than a standard studio film, by tapping into the lower overhead
and lower fees across the board for experienced independent filmmakers.

8. Susanne Bohnet, Chief Executive Officer
Susanne Bohnet was previously heading the U.S office of Equity Pictures (Equity
Pictures has been the second largest film fund in Germany) where she initiated
strategic partnerships with U.S producers, negotiated deals with financiers and talent,
oversaw production and handled the day to day operations on behalf of the company.
During her time with Equity Pictures, the company’s annual investments grew from
USD $30 million in 2002 to USD $100 million in 2004. Ms. Bohnet worked with Equity
Pictures on films with budgets between USD $2 million and USD $55 million.
Prior to managing funds with Equity Pictures Ms. Bohnet was S.V.P of Cinemedia KG,
for whom she created a presence in the US. Cinemedia is a German company, which
was very active in acquiring film rights for the German market as well as investing
equity capital into major U.S. films. “What Women Want” staring Mel Gibson and
Helen Hunt, became, under the guidance of Ms. Bohnet, the company’s most
successful Hollywood endeavor generating well over USD $300 million of box office
and ancillary revenue.

9. Ms. Bohnet actively consults for various domestic and international financing and
film entities and equity groups. Some of the films in which Susanne has been or is
currently involved in, as Producer, Executive Producer, or financial arranger are:
* “GODPARENTS” (2009)
* “WAR MONKEYS” (2009) starring Jessica Alba
* “THE ONLY LIVING BOY IN NEW YORK” (2009) starring Zack Efron
* “CLOCK TOWER” (2009) starring Evan Rachel Wood
* “NEW YORK I LOVE YOU” (2008) starring Scarlett Johanssen, Natalie Portman
* “FLASHBACKS OF A FOOL” (2008) starring Daniel Craig
* “HOSTAGE” (2005) starring Bruce Willis
* “MATADOR” (2005) starring Pierce Brosnan
* “CHUMSCRUBBER” (2005) starring Glen Close, Ralph Fiennes
* “EULOGY” (2004) starring Ray Romano, Kelly Preston
* “RELATIVE STRANGERS” (2006) with Danny de Vito, Neve Campbell, Ron
Livingston
* “MOZART AND THE WHALE” (2005) starring Josh Hartnett, Radha Mitchell
* “TODAY YOU DIE” (2005) starring Steven Segal
* “ELVIS HAS LEFT THE BUILDING” (2004) starring Kim Basinger
* “WHAT WOMEN WANT” (2000) starring Mel Gibson
Ms. Bohnet holds a master’s Degree in Media Economics from the Cologne Media
Academy, and a BA in Film, from her studies at the Tisch School of Film in New York
City and University of Communication in Dortmund, Germany.

10. SOME OF OUR CURRENT FILMS

11. A-List Hollywood Talent
All films will have at least one major A-list talent attached, which will offset equity
risk by predicting international appeal.

12. COMPANY MEN
Drama
In Production Now
Budget: $15M
Starring Ben Affleck, Tommy Lee Jones Kevin Costner and Maria Bello.
Turmoil in the executive ranks of a Fortune 500 company. A middle-aged
executive feels the financial and domestic impacts of his company’s recent decision
to downsize.

13. ONLY LIVING BOY
Drama/Comedy
Production Start: August 2009
Budget: $10M
Starring Zac Efron and Kevin Kline
In discussion with Malin Akerman and Jessica Alba
Adrift in New York City, a recent college graduate’s life is upended by his father’s
attempt to control and define what is right for his future.

14. VERDIGRIS
Political Thriller
Production Start: July 2009
Budget: $7.5M
Starring Pierce Brosnan.
Private investigator Cooper is hired to dig up dirt on a mayoral candidate in post-
Katrina New Orleans, but things go wrong as Cooper becomes a scapegoat and then
orchestrates an elaborate operation of revenge.

15. CLOCK TOWER
Suspense/Thriller
Production Start: July 2009
Budget: $15M
Starring Evan Rachel Wood.
Upon receiving news of her mother’s strange disappearance, a teenage girls returns
to the family lodge only to discover a shocking supernatural family secret.

16. THE COURIER
Thriller
Production Start: August 2009
Budget: $12M
Starring Adrian Brody
All he has to do is deliver a case. Thing only thing that is in his way is everyone.

18. Film Financing

19. Film Financing
Film financing has traditionally been an investment vehicle open to a select few,
but today is increasingly open to all investment sectors, including small and
medium sized firms. With the current trend for financing and distributing
mainstream, commercial films moving away from the major studios, high net-
worth individuals, hedge funds, private equity films and asset managers alike, are
now being presented with more viable avenues to make alternative investments in
the ever-growing film industry.

20. Production Funding
Commercial, mainstream movies with a high production value can be made for
about 30-50% less than a standard studio film, by tapping into the lower overhead
and lower fees across the board for experienced independent filmmakers.
Established producers often can raise up to 50-70% of the total production budget
for a film from senior debt (primarily secured by contractual sales and collateral), in
combination with various soft money deals. The remaining equity contribution
(typically 30-50% of the production budget) must come from an investor.

21. Production Funding Recoupment
• Serafini’s investors recoup 120% of their initial equity investment,
before any talent participation.
• Serafini’s investors recoup backend participation of 20-50% of all
net profits from the film, in perpetuity.
• Serafini Releasing plans to fund 4-6 Hollywood films and 2-3 Arab cross-over
films per year.
• Typical payback period is 18-24 months.
• An average investment amount for an independently financed film ranges
from $2-10 mil.

22. Film Financing - Sources of Recoupment
Transaction fees.
Backend participation, in perpetuity.
Sale of negative.
Domestic box-office performance.
Foreign territories sales.
Merchandising participation.
Soundtrack profits.
Tax credit repayments.

23. Susanne Bohnet
8265 Sunset Blvd., Suite 104
Los Angeles, CA 90046
(323) 650-5033
s.bohnet@serafinipictures.com

24. Financial Model

25. This financial model is based on the following assumptions:
• Production only fund/investments-overall amount: USD $25 M
•5 films per year for first 3 years
•Average investment per film - $4 mm
•Average film budget - $20 mm
•Fund closed after 5 years
•Management fee per year - 2.5%

26. Fund Summary NOTE: Only items highlighted in YELLOW should be changed
$ Thousands Year 1
Total Equity Contribution ($ Thousands) $ 25,000
$ Thousands Year 1 Year 2 Year 3 Year 4 Year 5 Total
Project CFs:
Funding Cash Flows ($17,000) $3,814 $15,900 $32,900 $12,086 $47,700
Annual Dividend Payment 6% ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($7,500)
GP Management Fee 2.5% ($625) ($625) ($625) ($625) ($625) ($3,125)
Investment Cash Flow ($19,125) $1,689 $13,775 $30,775 $9,961 $37,075
Cash Beg. Of Year $ 25,000 $5,875 $7,564 $21,339 $52,114
Investment Cash Flow ($19,125) $1,689 $13,775 $30,775 $9,961
Cash at Year End (Net of Dividend Payment) $ 5,875 $ 7,564 $ 21,339 $ 52,114 $ 62,075
Accrued Profits (Net of Dividend payment) ($19,125) ($17,436) ($3,661) $27,114 $37,075
Fund IRR (yr 1-5) 47.6%
Annual distribution of profits/Cash to investors *Final year includes original Fund capital distributed as profit.
*certain % of profit balance over $10 million distributed each year
Annual Profit $0 $0 $0 $27,114 $9,961 $37,075
Profits available for Distribution 80% $0 $0 $0 $13,691 $23,384 $37,075
Accumulated Profit Balance at Year end $0 $0 $0 $13,423 $0
*certain% of principal balance distributed each year
Accumulated and Available Principal $0 $0 $0 $25,000 $25,000
Principal available for Distribution 90% $0 $0 $0 $22,500 $2,500 $25,000
Accumulated Principal Balance at Year end $0 $0 $0 $2,500 $0
Totals
General Partner Profit Share 30.0% $0 $0 $0 $5,457 $7,465 $12,923
Fund Investor Share
Profit share 70.0% $0 $0 $0 $8,234 $15,919 $24,153
Annual Dividend Payment $1,500 $1,500 $1,500 $1,500 $1,500 $7,500
Invested Capital $ (25,000) $0 $0 $22,500 $2,500 $25,000
Total CF ($23,500) $1,500 $1,500 $32,234 $19,919 $56,653
Investor IRR (yr 1-7) = 30.3% ROI = 227% $69,575
Potential Film Revenue downside Scenario
Revenue downside Potential 30.0%
General Partner Profit Share 30.0% $0 $0 $0 $3,820 $5,226 $9,046
Fund Investor Share
Profit share 70.0% $0 $0 $0 $5,764 $11,143 $16,907
Annual Dividend Payment $1,500 $1,500 $1,500 $1,500 $1,500 $7,500
Invested Capital $ (25,000) $ - $ - $ 22,500 $ 2,500 $25,000
Total CF ($23,500) $1,500 $1,500 $29,764 $15,143 $49,407
Investor IRR (yr 1-7) = 25.2% ROI = 198% $58,453

27. Total Projects Model
NOTE: Only items highlighted in YELLOW should be changed
$ Thousands
Production Fund $ 20,000
Fund Expenses (Legal, setup,…) $ 1,875
Total Investment Amount $ 21,875
USD Thousands Year 1 Year 2 Year 3 Year 4 Year 5
Investments (20,000) (20,000) (20,000) - -
Repayments - 15,152 20,000 20,000 4,848
Income 3,000 8,662 15,900 12,900 7,238
Cash at Begin of Period 21,875 4,875 8,689 24,589 57,489
Cash at End of Period 4,875 8,689 24,589 57,489 69,575
Change in Cash (17,000) 3,814 15,900 32,900 12,086
Funding
Production Fund (20,000) (20,000) (20,000) - -
Repayment
Production Fund - 15,152 20,000 20,000 4,848
Income
Production Fund 3,000 8,662 15,900 12,900 7,238

28. Production Fund Cash flows for Multiple Investments over ONE year
NOTE: Only items highlighted in YELLOW should be changed
$ Thousands
Production Fund $ 20,000
Target Production Investment / Film $4,000
Year 1
USD Thousands Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 M
Investments (4,000) - (4,000) - (4,000) - (4,000) - (4,000) - - - - - - -
Repayments - - - - - - - - - - - - - - - -
Income 600 - 600 - 600 - 600 - 600 - - - - - - -
Cash at Begin of Period 20,000 16,600 16,600 13,200 13,200 9,800 9,800 6,400 6,400 3,000 3,000 3,000 3,000 3,000 3,000 3,000
Cash at End of Period 16,600 16,600 13,200 13,200 9,800 9,800 6,400 6,400 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
Change in Cash 16,600 - (3,400) - (3,400) - (3,400) - (3,400) - - - - - - -
FUNDING Y/N
Film 1 (4,000) - - - - - - - - - - - - - - -
Film 2 (4,000) - - - - - - - - - - - - -
Film 3 (4,000) - - - - - - - - - - -
Film 4 1 (4,000) - - - - - - - - -
Film 5 1 (4,000) - - - - - - -
Film 6 - - - - - - - - - - - -
Film 7 - - - - - - - - - -
Film 8 - - - - - - - -
Film 9 - - - - - -
Film 10 - - - - - - -
Total Funded (4,000) - (4,000) - (4,000) - (4,000) - (4,000) - - - - - - -
Annual Totals (20,000)
REPAYMENT
Film 1 - - - - - - - - - - - - - - - -
Film 2 - - - - - - - - - - - - - -
Film 3 - - - - - - - - - - - -
Film 4 1 - - - - - - - - - -
Film 5 1 - - - - - - - -
Film 6 - - - - - - - - - - - -
Film 7 - - - - - - - - - -
Film 8 - - - - - - - -
Film 9 - - - - - -
Film 10 - - - - - - -
Repayments - - - - - - - - - - - - - - - -
Annual Totals -
NET LOAN OUTSTANDING (4,000) (4,000) (8,000) (8,000) (12,000) (12,000) (16,000) (16,000) (20,000) (20,000) (20,000) (20,000) (20,000) (20,000) (20,000) (20,000)
INCOME
Film 1 600 - - - - - - - - - - - - - - -
Film 2 600 - - - - - - - - - - - - -
Film 3 600 - - - - - - - - - - -
Film 4 1 600 - - - - - - - - -
Film 5 1 600 - - - - - - -
Film 6 - - - - - - - - - - - -
Film 7 - - - - - - - - - -
Film 8 - - - - - - - -
Film 9 - - - - - -
Film 10 - - - - - - -
Income 600 - 600 - 600 - 600 - 600 - - - - - - -
Annual Totals 3,000

29. Year 2 Year 3
Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Month 25 Month 26 Month 27 Month 28 Month 29 Month 30 Month 31 Month 32 Month 33 Month 34 Month 35 Month 36
- - - - - - - - - - - - - - - - - - - -
- 3,152 848 3,152 848 3,152 848 3,152 848 3,152 848 - - - - - - - - -
- - 817 362 1,179 724 1,518 1,062 1,518 1,062 1,518 1,062 701 701 339 339 - - - -
3,000 3,000 6,152 7,817 11,331 13,358 17,234 19,599 23,814 26,179 30,394 32,759 33,822 34,522 35,223 35,561 35,900 35,900 35,900 35,900
3,000 6,152 7,817 11,331 13,358 17,234 19,599 23,814 26,179 30,394 32,759 33,822 34,522 35,223 35,561 35,900 35,900 35,900 35,900 35,900
- 3,152 1,665 3,514 2,027 3,876 2,366 4,214 2,366 4,214 2,366 1,062 701 701 339 339 - - - -
- - - - - - - -
- - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - -
- - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - -
- -
- 3,152 848 - - - - -
- - - 3,152 848 - - - - -
- - - - - 3,152 848 - - - - -
- - - - - - - 3,152 848 - - - - -
- - - - - - - - - 3,152 848 - - - - -
- - - - - - - - - - - - -
- - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - -
- 3,152 848 3,152 848 3,152 848 3,152 848 3,152 848 - - - - - - - - -
15,152 4,848
(20,000) (16,848) (16,000) (12,848) (12,000) (8,848) (8,000) (4,848) (4,000) (848) - - - - - - - - - -
- - 817 362 362 362 339 339
- - - - 817 362 362 362 339 339
- - - - - - 817 362 362 362 339 339
- - - - - - - - 817 362 362 362 339 339
- - - - - - - - - - 817 362 362 362 339 339
- - - - - - - - - - - - -
- - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - -
- - 817 362 1,179 724 1,518 1,062 1,518 1,062 1,518 1,062 701 701 339 339 - - - -
5,662 7,238

30. Typical Production Funding Cash Flows for Each Investment
NOTE: Only items highlighted in YELLOW should be changed
Year 1 Year 2
USD Thousands Month 1 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24
Film Budget $ 20,000
Production funds per Film 20% $ 4,000
Production funds provided 4,000
Production funds repaid - - - - - - - (3,152) (848) - - - - -
Net Production funds Outstanding 4,000 4,000 4,000 4,000 4,000 4,000 4,000 848 - - - - - -
Income
Upfront Fee 15% $ 600 600
Priority Recoupment 15% $ 600 - - - - - - - - 600 - - - - -
Producer Fee 0% $ - -
Profit Participation 10% $ 1,980 - - - - - - - - 217 362 362 362 339 339
Total Income $ 3,180 600 - - - - - - - 817 362 362 362 339 339
Gross Profit $ 3,180
Average loan outstanding 2,869
Gross Return 111%
NPV 10% $ 2,762

31. Single Film Cash Flows
NOTE: Only items highlighted in YELLOW should be changed
USD Thousands # Month 1 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24
Film Budget 20,000
P&A Budget 80% 16,000
Financing Structure
Soft Money 30% 6,000
Bank: Presales 30% 6,000
Gap 20% 4,000
Production Funding (Serafini) 20% 4,000
Total Financing 100% 20,000
REVENUES
Domestic B.O. 20,000
Theater Participation 50% (10,000)
Balance of B.O. revenue 10,000
Less: Distribution Fee 0% -
Net Box Office Revenues 10,000 3,333 3,333 3,333
Home Video/DVD Retail 180% 36,000
HV/DVD Wholesale 100% 36,000
HV/DVD Expenses 35% (12,600)
Returns and discounts 10% (3,600)
Distribution Fee 15% (5,400)
Net Video/DVD Revenues 72% 14,400 1,872 1,728 1,584 1,584 1,584 1,584 1,584 1,440 1,440
HV/DVD yearly Sales Ratio 100% 13% 12% 11% 11% 11% 11% 11% 10% 10%
New (Internet) Media 50% 10,000
Distribution Fee 12% (1,200)
Net New Media Revenues 44% 8,800 1,144 1,056 968 968 968 968 968 880 880
New Media yearly Sales Ratio 100% 13% 12% 11% 11% 11% 11% 11% 10% 10%
Pay TV/Free TV 40% 8,000
Distribution Fee 20% (1,600)
Net TV Revenues 6,400 1,067 1,067 1,067 1,067 1,067 1,067
Foreign Sales 70% 14,000 3,500 3,500 3,500 3,500
Total Revenues 53,600 - - 3,333 3,333 6,833 6,516 6,284 6,052 3,619 3,619 3,619 3,619 3,387 3,387
Recoup Investments
P&A Repayment (16,000) - - (3,333) (3,333) (6,833) (2,500) - - - - - - - -
P&A Priority payment 20.0% (3,200) - - - - - (3,200) - - - - - - - -
Loans Repayment
Bank - Presales (6,000) - - - - - (816) (5,184) - - - - - - -
Gap (4,000) - - - - - - (1,100) (2,900) - - - - - -
Production Funding (4,000) - - - - - - - (3,152) (848) - - - - -
Production Fund Priority payment 15.0% (600) - - - - - - - - (600) - - - - -
Net Income 19,800 - - - - - - - - 2,171 3,619 3,619 3,619 3,387 3,387
Accumulated Net Income - - - - - - - - 2,171 5,789 9,408 13,027 16,413 19,800
Priority profit Participation
Production Fund Preference 10% 1,980 - - - - - - - - 217 362 362 362 339 339