-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ok0ahEb1f48SctXx9Xk1Of3ttXSrtDxZunfdfNYqWCraC/1ZsVDwhQXEUdiksLKp hKTQtuTOiciYKOx7foo4Jw== 0001001277-03-000246.txt : 20030619 0001001277-03-000246.hdr.sgml : 20030619 20030619172313 ACCESSION NUMBER: 0001001277-03-000246 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20030619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMP PRODUCTIONS LTD CENTRAL INDEX KEY: 0001242513 IRS NUMBER: 980400189 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-106291 FILM NUMBER: 03750706 BUSINESS ADDRESS: STREET 1: 2706 939 HOMER STREET CITY: VANCOUVER BC CANADA STATE: A1 ZIP: V6B ZW6 BUSINESS PHONE: 6046881075 SB-2 1 formsb2forjune2003.txt As filed with the Commission on June 19, 2003 File No. 333-_______ U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AMP PRODUCTIONS, LTD. (Name of small business issuer in its charter) Nevada 7812 98-0400189 (State of (Primary Standard Industrial (I.R.S. Employer Jurisdiction) Classification Code Number) Identification No.) 2708-939 Homer Street Vancouver, BC V6B 2W6 604-688-1075 (Address and telephone number of principal executive offices) Thomas E. Mills 2708-939 Homer Street Vancouver, BC V6B 2W6 604-688-1075 (Name, address and telephone number of agent for service) APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE ============================================================================================== Title of Each Class of Securities Proposed Maximum Aggregate Amount of to be Registered Offering Price (1) Registration Fee common stock, $0.0001 par $175,000 $14.16 value per share Total $14.16
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act and based upon 1,750,000 shares of common stock to be sold in this offering. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine. PROSPECTUS Subject to Completion June 5, 2003 AMP Productions, Ltd. Common Stock This prospectus relates to the sale of up to 1,750,000 shares of common stock that may be sold by us at $0.10 per share. The common stock will be sold through our officers or directors to investors outside the United States. There is no minimum number of shares to be sold in order for us to accept funds. No escrow account will be used. No assurance can be given as to the number of shares that we will sell or that we will be able to sell any shares. This is our initial public offering. No public market currently exists for our shares although we intend to apply for quotation on the Over-the-Counter Bulletin Board in the future. The offering price for our common stock was arbitrarily determined and may not reflect the market price of our shares after the offering. The shares will be offered and sold by our officers and directors who will not receive any commission. In the future, we may engage broker/dealers who are members of the National Association of Securities Dealers to assist in our sales of common stock and who will be paid a commission on such sales. We currently have no agreements, arrangements or understandings with any broker/dealers to sell our shares. In the event we engage a broker/dealer to assist in our sales, we will amend our registration statement, of which this prospectus is a part of, to reflect this arrangement. This offering will expire 90 days from the effective date and may be extended for an additional 90 days to a date not to exceed December 31, 2003 (Expiration Date). We may terminate this offering prior to the Expiration Date. INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK FACTORS," PAGE 6. THE COMMON STOCK OFFERED HEREIN SHOULD NOT BE PURCHASED BY ANY INVESTOR WHO CANNOT AFFORD TO LOSE THEIR ENTIRE INVESTMENT. These securities have not been approved by the Securities and Exchange Commission nor any state securities agency nor has the Commission or any agency passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Price to Public Underwriting Proceeds to the Discounts and Company (1) Commissions Per Share.................. $0.10 $0 $0.10 Maximum 1,750,000 shares..................... $175,000 $0 $175,000 (1) Proceeds to AMP Productions, Ltd. are shown before deducting offering expenses payable by us estimated at $20,000, including legal and accounting fees and printing costs. The date of this Prospectus is June 5, 2003. 1 TABLE OF CONTENTS PAGE PROSPECTUS SUMMARY............................................................3 FORWARD-LOOKING STATEMENTS....................................................5 RISK FACTORS..................................................................6 USE OF PROCEEDS..............................................................13 DETERMINATION OF OFFERING PRICE..............................................14 DILUTION.....................................................................14 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.....................15 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION....................16 DESCRIPTION OF BUSINESS......................................................18 DESCRIPTION OF PROPERTY......................................................31 LEGAL PROCEEDINGS............................................................32 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.................33 EXECUTIVE COMPENSATION.......................................................33 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................33 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...............33 PLAN OF DISTRIBUTION.........................................................34 DESCRIPTION OF THE SECURITIES................................................34 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.........................................................35 LEGAL MATTERS................................................................35 EXPERTS......................................................................35 AVAILABLE INFORMATION........................................................35 FINANCIAL STATEMENTS........................................................F-1 Dealer Prospectus Delivery Obligation Until ___________, 2003, 90 days after the date of this prospectus, all dealers that buy, sell or trade in our securities, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers' obligation to deliver a prospectus when acting as an underwriter with respect to its unsold allotment or subscription. 2 PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to the detailed information and consolidated financial statements, including the notes thereto, appearing elsewhere in this prospectus. Each prospective investor is urged to read this prospectus in its entirety and particularly the information set forth in "RISK FACTORS" on page 6. AMP Productions, Ltd. We were incorporated on February 27, 2003, under the laws of the State of Nevada. We are a development stage enterprise with our principal office located at 2708-939 Homer Street, Vancouver, British Columbia, Canada, V6B 2W6, (604) 688-1075. We are an independent motion picture studio in the business of developing, producing, marketing, and distributing low-budget feature-length films to movie theaters and ancillary markets. Since inception, our focus has been on developing our business plan, and acquiring options on literary works and screenplays that can be produced into commercially salable feature-length motion pictures at a cost not to exceed $10 million. In the next two years, we plan to acquire rights to two dozen screenplays that we can produce into feature films, and to produce and/or co-produce at least one feature film. To date, we have secured options to produce two screenplays as feature length motion pictures. We continue to review other potential film projects. On successful completion of this offering we intend to begin pre-production of one of our motion pictures, with principal photography commencing in the spring of 2004. We will derive income through the distribution of our films. We plan to release our films in the United States through existing distribution companies, primarily independent distributors. We will retain the right for ourselves to market the films on a territory-by-territory basis throughout the rest of the world and to market television and other uses separately. We believe that our location in Vancouver, British Columbia, will afford us economic advantages over similar United States based filmed entertainment studios. Due to the favorable exchange rate and the financial initiatives available from government sources, we believe that we can produce high quality films more cost effectively than would be possible in the United States. Vancouver is also the nearest Canadian film center to Hollywood. The demand for motion pictures remains strong. The motion picture industry has experienced steady growth since its inception. Most recently, with the advent of network, broadcasting television alliances, cable television and home video, the market has expanded faster than at any other time. Movies are being bought for pay-television cable networks as well as for the traditional outlets of theaters and network television. With the expansion of audience markets, and an increase in demand for motion pictures, independent producers like our company, have successfully filled niche markets and targeted specific audiences. We are dependent upon the raising of capital through placement of our securities. There can be no assurance that we will be successful in raising the capital we require through the sale of our securities. If we are unsuccessful in raising capital with this offering, we may have insufficient funds to continue our operations. 3 The Offering Securities Offered: Up to 1,750,000 shares of common stock, par value $0.0001 Offering price: $0.10 per share Offering period: The shares are being offered for a period of 90 days, unless we extend the offer, in our sole discretion, for an additional 90 days to a date not later than December 31, 2003 Net proceeds to us: Approximately $155,000, after expenses of approximately $20,000 assuming sale of 1,750,000 shares Use of proceeds: We will use the proceeds to pay for offering expenses, debt repayment, the acquisition of motion picture rights, motion picture development, motion picture pre-production, equipment, marketing expenses and working capital. Number of shares outstanding 8,000,000 before the offering: Maximum Number of shares outstanding 9,750,000 assuming sale of all after the offering: 1,750,000 shares being offered. Summary of Selected Financial Data We are a development stage company. From the date of our inception on February 27, 2003, to March 31, 2003, we have not generated any revenue or earnings from operations. As of March 31, 2003, our financial data is as follows: As at or for the period ended March 31, 2003 (inception to March 31, 2003) Operations Data Revenue $0 Net Loss: $13,216 Balance Sheet Data Total Assets: $5,785 Total Liabilities: $18,201 Shareholder Equity: $(12,416) Negative Net Tangible Book Value: $(12,416) Negative Net Tangible Book Value Per Share: $(0.002) 4 FORWARD-LOOKING STATEMENTS INFORMATION IN THIS PROSPECTUS CONTAINS "FORWARD LOOKING STATEMENTS" WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS SUCH AS "BELIEVES", "ESTIMATES", "COULD", "POSSIBLY", "PROBABLY", "ANTICIPATES", "ESTIMATES", "PROJECTS", "EXPECTS", "MAY", "WILL", OR "SHOULD" OR OTHER VARIATIONS OR SIMILAR WORDS. NO ASSURANCES CAN BE GIVEN THAT THE FUTURE RESULTS ANTICIPATED BY THE FORWARD-LOOKING STATEMENTS WILL BE ACHIEVED. THE FOLLOWING MATTERS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS WITH RESPECT TO THOSE FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE FUTURE RESULTS ANTICIPATED BY THOSE FORWARD-LOOKING STATEMENTS. AMONG THE KEY FACTORS THAT HAVE A DIRECT BEARING ON OUR RESULTS OF OPERATIONS ARE THE EFFECTS OF VARIOUS GOVERNMENTAL REGULATIONS, THE FLUCTUATION OF OUR DIRECT COSTS AND THE COSTS AND EFFECTIVENESS OF OUR OPERATING STRATEGY. OTHER FACTORS COULD ALSO CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE FUTURE RESULTS ANTICIPATED BY THOSE FORWARD-LOOKING STATEMENTS. 5 RISK FACTORS YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE BUYING OUR COMMON STOCK IN THIS OFFERING. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY AND ADVERSELY AFFECTED, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT. WE ARE A DEVELOPMENT STAGE COMPANY WITH LOSSES SINCE OUR FORMATION AND EXPECT TO INCUR NET LOSSES FOR THE FORESEEABLE FUTURE. WE HAVE NO OPERATING HISTORY UPON WHICH AN EVALUATION OF OUR PROSPECTS CAN BE MADE. FOR THAT REASON, IT WOULD BE DIFFICULT FOR A POTENTIAL INVESTOR TO JUDGE OUR PROSPECTS FOR SUCCESS. We are a newly organized development stage corporation and have a no operating history from which to evaluate our business and prospects. We have had no revenue. We had a minimal loss from February 27, 2003 (inception) to March 31, 2003. We had negative net worth of $12,416 and our working capital was $2,392 as of March 31, 2003. There can be no assurance that our future proposed operations will be implemented successfully or that we will ever have profits. If we are unable to sustain our operations, you may lose your entire investment. We face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with the formation and commencement of operations, including operational difficulties and capital requirements and management's potential underestimation of initial and ongoing costs. In evaluating our business and prospects, these difficulties should be considered. IN THEIR NOTES TO OUR FINANCIAL STATEMENTS, OUR AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE OPERATIONS AS A "GOING CONCERN". YOU MAY LOSE ALL OF YOUR INVESTMENT IF WE ARE UNABLE TO CONTINUE OPERATIONS. Since inception, the Company has suffered recurring losses and net cash outflows from operations. The Company expects to continue to incur substantial losses to complete the development of its business. Since its inception, we have funded operations through common stock issuances and related party loans in order to meet our strategic objectives. We have not established any other source of equity or debt financing. There can be no assurance that we will be able to obtain sufficient funds to continue the development of and, if successful, to commence the sale of our products and services under development. As a result of the foregoing, our auditors have expressed substantial doubt about our ability to continue as a going concern. If we cannot continue as a going concern, then you may lose all of your investment. EVEN IF ALL OF THE SHARES ARE SOLD IN THIS OFFERING, WE WILL NEED ADDITIONAL FUNDS TO COMPLETE A MOTION PICTURE; IF WE FAIL TO OBTAIN ADDITIONAL FUNDS, OUR PLAN OF OPERATIONS MAY HAVE TO BE CHANGED OR YOU MAY LOSE YOUR ENTIRE INVESTMENT. Motion picture production requires significant capital. In addition to the proceeds from this offering, we will also require certain deferrals of production costs and/or additional outside financing to produce a motion picture. Such financing could take the form of co-production or joint venture arrangements or limited liability companies or partnerships in which we act as managing member or general partner, additional sales of our securities or an operating line of credit. Regardless of the amount of money we raise in this offering, additional financing will be needed to complete a motion picture. No assurance can be given that financing will be available to us, at all, or on 6 favorable terms. Unless such additional financing is available to us, our production activities may be materially adversely affected and you may lose your entire investment. We believe the proceeds from this offering will satisfy our capital requirements for the next 12 months. Then we will have to arrange for additional financing. Our capital requirements depend on a number of factors, including the initial acceptance of our motion pictures by distributors and the public, and the costs to advertise. The timing and amount of such capital requirements cannot be accurately predicted. If our capital requirements vary materially from those currently planned, we may require additional financing sooner than anticipated. We have no financing commitments. YOU MAY SUFFER SUBSTANTIAL CONSEQUENCES SUCH AS DILUTION OR A LOSS OF SENIORITY IN PREFERENCES AND PRIVILEGES AS A RESULT OF A SUBSEQUENT FINANCING. If we need to raise additional capital to implement or continue operations, we would likely have to issue additional equity or convertible debt securities. This will further dilute the percentage ownership of your investment in this offering. Furthermore, any new securities could have rights, preferences, and privileges senior to those of our common stock. THERE IS NO MINIMUM AMOUNT OF FUNDS WHICH MUST BE RAISED IN ORDER FOR US TO HAVE ACCESS TO OFFERING PROCEEDS; WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN IF WE SELL AN INSIGNIFICANT NUMBER OF SHARES IN THIS OFFERING, WHICH COULD HINDER OUR ABILITY TO GENERATE REVENUE AND YOU COULD LOSE ALL YOUR INVESTMENT. We are a development stage company. We depend on the proceeds of this offering in order to develop and expand our business because our revenue is insufficient to do so. If we do not raise sufficient funds in this offering to develop and expand our business, we may conduct additional public or private offerings of our stock or make other funding arrangements such as loans or enter into strategic partnerships. We have not identified any specific alternative sources of funding other than this offering. We will have immediate access to funds raised in this offering. There is no guarantee that we will be able to sell all, or any, of the offered shares. If we sell only an insignificant number of the offered shares, we may not be able to develop or expand our business which will harm our ability to earn revenue. Specifically, we may not realize sufficient proceeds from this offering to repay our debt, to develop or preproduce a motion picture, to pay planned marketing expenses and working capital. Our inability to raise sufficient funds in this offering may significantly hinder our ability to conduct operations and generate revenue. If we are able to sell only an insignificant number of shares in this offering, you may lose your entire cash investment because we will not return investors' funds even if we do not raise enough to fully implement our business plan. Therefore, you should not invest in our business unless you are in a position to lose your entire investment. OUR COMMON STOCK IS NOT LISTED OR QUOTED AT THE PRESENT TIME AND AN ACTIVE TRADING MARKET MIGHT NOT DEVELOP. Our common stock is not listed or quoted at the present time and an active trading market might not develop. We do not meet the minimal standards for listing on the Nasdaq National Market or SmallCap Market exchanges. We will therefore seek to have our common stock quoted on the OTC Bulletin Board, commonly known as the OTCBB. However, inclusion on the OTCBB, if granted, does not guarantee that an active and liquid trading market will develop. OTCBB stocks are equity securities that are not traded on Nasdaq or listed on an organized exchange and are instead quoted through a separate quotation 7 system. As a consequence, market data such as quotes, volume and market size may not be as up-to-date as it is for securities listed on the Nasdaq National Market or SmallCap Market exchanges. If you attempt to trade shares of our common stock, you may find that these shares have limited liquidity, meaning that your order may be only partially executed or may not be executed at all. This will depend on the number of shares you wish to trade and the number of market makers available. In addition, because of the large spreads typical between an OTCBB market maker's bid and ask prices for a particular security, you may experience significant losses if you need to sell your shares immediately after this offering. If the bid price for our common stock is much lower than the ask price, you will not be able to sell your shares at a profit unless the market value of the stock rises substantially. In 2003, the NASD plans to launch a new market, the Bulletin Board Exchange, also known as the BBX. This market will eventually take the place of the OTCBB, which will be phased out. The BBX will have minimal qualitative listing criteria for issuers relating to public float and number of stockholders as well as certain minimal corporate governance requirements. Although these guidelines have not yet been adopted and are still subject to approval by the Securities and Exchange Commission, or SEC, proposed guidelines have been released. Based on these proposed guidelines, we anticipate that we will be able to satisfy the listing standards for the BBX and therefore will continue to have our stock price quoted once the OTCBB is eliminated. However, our failure to obtain or maintain a listing on the BBX following the elimination of the OTCBB would result in our common stock being traded on an OTC electronic quotation system known as the Pink Sheets Electronic Quotation System. That system is substantially similar in its workings to the OTCBB. THE LIMITED MARKET FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE, THEREFORE YOU MAY HAVE DIFFICULTY SELLING OUR COMMON STOCK. The market for our common stock, if any, will be limited and we cannot assure you that a larger market will ever be developed or maintained. Currently, our common stock is not listed or quoted upon on any established trading system. Most of our common stock will be held by a small number of investors that will further reduce the liquidity of our common stock. Further, the offering price of our common stock was determined by us, and was based upon the amount of capital needed to enter into the pre-production phase for one of our projects, without considering assets, earnings, book value, net worth or other economic or recognized criteria or future value of our common stock. Market fluctuations and volatility, as well as general economic, market and political conditions, could reduce our market price. As a result, this may make it difficult or impossible for you to sell our common stock or for you to sell our common stock for more than the offering price even if our operating results are positive. TRADING IN OUR COMMON STOCK MAY BE RESTRICTED BY THE SECURITIES AND EXCHANGE COMMISSION'S PENNY STOCK REGULATIONS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR COMMON STOCK. Depending upon a variety of factors that are outside of our control, if our common stock is able to trade on the OTCBB it may fall within the definition of a "penny stock" as set forth in Rule 3a51-1(a) under the Securities Exchange Act of 1934, as amended, commonly referred to as the 1934 Act. Under this act, our stock would be considered a penny stock unless it meets at least one of the following criteria: - the highest bid displayed for our stock on the OTCBB is $5 or more, and at least two market makers are currently displaying bid and ask quotations for our stock at specified prices; - we have net tangible assets of at least $5 million or, if we have been in existence for more than three years, $2 million; or 8 - our average revenues during the previous three years are at least $6 million. If our common stock becomes a penny stock, this rule would impose an extensive series of disclosure obligations and sales practice requirements on the broker-dealers such as making a special suitability determination of a purchaser and receive the purchaser's written agreement of the transaction prior to the sale. Consequently, if our common stock falls under the definition of a penny stock at any time, these rules would restrict the ability of broker-dealers to find buyers, which would restrict your ability to sell shares in the secondary market. SINCE OUR BOARD OF DIRECTORS, AT ITS DISCRETION, MAY BORROW FUNDS WITHOUT STOCKHOLDER APPROVAL, THE VALUE OF OUR SHARES MAY DECLINE. Our board of directors has the right, in its sole discretion, to borrow funds on our behalf. Our board of directors does not require stockholder approval prior to borrowing. Our assets may be used as collateral for borrowings. If we have difficulty repaying these borrowings out of our working capital, we may be forced to liquidate assets at an inappropriate time or default. In the event of a default, our lender may dispose of collateral to the detriment of our business and the value of our shares may decline and the equity of our stockholders may be reduced or eliminated. WE FACE INTENSE COMPETITION; YOU MAY LOSE ALL OF YOUR INVESTMENT IF WE ARE UNABLE TO SUCCESSFULLY COMPETE. Competition in the motion picture industry is intense. We will be competing with other film producers for scripts, actors, directors as well as audiences. We will face competition from other varieties of public entertainment. Our competitors and we are constantly seeking rights to exceptional literary properties and the services of the best creative personnel. Virtually all of our competitors are larger than we are, have been in business longer than we have, and have more resources at their disposal. Some of the well-known studios we compete with are News Corporation's Twentieth Century Fox, Time Warner's Warner Bros. (including Turner, New Line Cinema and Castle Rock Entertainment), Viacom's Paramount, Seagram's Universal, Sony Corp.'s Sony Pictures (including Columbia and TriStar), Walt Disney Company's Buena Vista, Touchstone and Miramax and Metro-Goldwyn-Mayer (including MGM Pictures, UA Pictures, Orion and Goldwyn). We also compete with innumerable smaller production and distribution companies. The motion picture industry is dominated by the major studios, which are typically large diversified corporations that have strong relationships with creative talent, exhibitors and others involved in the entertainment industry and have global film production and distribution capabilities. The entertainment industry is currently evolving into an industry in which certain multinational multimedia firms, because of their control over key film, magazine, and television content, as well as key network and cable outlets, will be able to dominate the entertainment industries. These organizations have numerous competitive advantages, such as the ability to acquire financing for their projects and to make favorable arrangements for the distribution of completed films. Because we are an independent film production company, we most likely will not have the backing of a major studio for production and distribution support; and consequently, we may not be able to complete a motion picture, and if we do, we may not be able to make arrangements for exhibition in theaters. Our success in theaters may determine our success in other media markets. 9 OUR FILM MAY NOT BE COMMERCIALLY SUCCESSFUL. Producing the feature length films will involve substantial risks, because it requires that we spend significant funds based entirely on our preliminary evaluation of the screenplay's commercial potential as a film. It is impossible to predict the success of any film before the production starts. The ability of a motion picture to generate revenues will depend upon a variety of unpredictable factors, including: - public taste, which is always subject to change; - the quantity and popularity of other films and leisure activities available to the public at the time of our release; - the competition for exhibition at movie theatres, through video retailers, on cable television and through other forms of distribution; and - the fact that not all films are distributed in all media. For any of these reasons, the films that we produce may be commercially unsuccessful and our business may suffer. WE MAY BE UNABLE TO FIND SUFFICIENT DISTRIBUTION FOR OUR FILMS. Because we lack the resources to distribute our films ourselves, we plan to enter into distribution agreements with established distribution companies. As a result, we may be unable to secure distribution agreements or revenue guarantees before funds are spent on production. In addition, if we are unable to obtain theatrical distribution on acceptable terms, we may evaluate other alternatives such as retaining a distributor as an independent contractor or bypassing theatrical distribution altogether. If we retain a distributor as an independent contractor we may need to seek additional financing to cover this cost. If we bypass theatrical distribution and attempt to release our films directly to pay cable or home video, we will probably not generate enough revenues to become profitable. If we are unable to obtain adequate distribution, we may not have the ability to generate revenues. WE ARE DEPENDENT ON KEY PERSONNEL; IF WE LOSE THE SERVICES OF KEY PERSONNEL, IT MAY SUBSTANTIALLY HARM OUR ABILITY TO OPERATE AND EARN REVENUE. Our success is highly dependent upon the continued services of key members of our management, including our president, treasurer and director, Thomas E. Mills and our vice president and director, Fidel Thomas. Virtually all decisions concerning the conduct of our business, including the properties and rights to be acquired by the Company and the arrangements to be made for such distribution, are made by or controlled by Messrs. Mills and Thomas. The loss of either Thomas E. Mills or Fidel Thomas could have a material adverse effect on our Company. We have not entered into any agreement with Messrs. Mills and Thomas that would prevent them from leaving us, nor have we obtained any key man life insurance. If we lose either of their services, we may not be able to hire and retain other officers with comparable experience or contacts. As a result, the loss of either Mr. Mills' or Mr. Thomas' services could substantially harm our ability to operate and earn revenue. We currently have no employees. We rely heavily upon our officers to meet our needs. Mr. Mills, our president and treasurer, and Mr. Thomas, our vice president and secretary, maintain outside employment, which limits the time they may devote to our matters. We expect that Mr. Mills and Mr. Thomas will each devote 30 hours per week towards our business. 10 AS OUR OFFICERS AND DIRECTORS DO NOT DEVOTE THEIR FULL BUSINESS TIME TO OUR BUSINESS, WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN AND OUR BUSINESS MAY FAIL. The persons serving as our officers and directors have existing responsibilities and may have additional responsibilities to provide management and services to other entities. Specifically, Thomas E. Mills, our president, treasurer and one of our directors is the chief executive officer, president and a director of Scarab Systems, Inc., a Colorado company having its shares quoted on the OTCBB under the trading symbol of IRVV. Fidel Thomas is the president and a director of Inner Visions Entertainment Ltd., a privately held British Columbia corporation. Each anticipates that he will devote significantly more hours if we begin generating significant revenue. We cannot guaranty that any of our officers or directors will be able to devote sufficient amounts of their business time to enable us to implement our business plan. If any or all of our officers or directors do not devote a sufficient amount of their business time to the management of our business, then our business may fail. LABOR FACTORS IN THE ENTERTAINMENT INDUSTRY MAY SUBSTANTIALLY HARM OUR ABILITY TO OPERATE AND EARN REVENUE. We are aware that the cost of producing and distributing filmed entertainment has increased substantially in recent years. This is due, among other things, to the increasing demands of creative talent as well as industry-wide collective bargaining agreements. Many of the script writers, performers, directors and technical personnel in the entertainment industry who will be involved in our productions are members are guilds or unions that bargain collectively on an industry-wide basis. We have found that actions by these guilds or unions can result in increased costs of production and can occasionally disrupt production operations. If we are unable to operate or produce a motion picture, it may substantially harm our ability to earn revenue. SUBSEQUENT TO COMPLETION OF THIS OFFERING, CONTROL OF THE COMPANY WILL REMAIN WITH OUR OFFICERS AND DIRECTORS. If we sell all 1,750,000 shares of common stock in this offering, our officers and directors will own at least 8,000,000 shares and will control us. Following completion of this offering, our officers and directors will be able to elect all of our directors and inhibit your ability to cause a change in the course of our operations. Further, our officers and directors may effect a major transaction such as a merger without further shareholder approval. Our articles of incorporation do not provide for cumulative voting. OUR OFFICERS AND DIRECTORS ARE NOT LOCATED IN THE UNITED STATES. IF INVESTORS WISH TO EFFECT LEGAL SERVICE AGAINST OUR OFFICERS OR DIRECTORS, THEY WILL HAVE DIFFICULTY DOING SO. Although we are incorporated in the State of Nevada and maintain a registered office in Las Vegas, Nevada, our officers and directors are residents of Canada. It may be difficult for a resident of a country other than Canada to serve Messrs. Mills and Thomas with legal process or other documentation. WE MAY NOT BE PROFITABLE BECAUSE IT IS DIFFICULT TO PROTECT INTELLECTUAL PROPERTY. We plan to copyright all of our film properties and projects. However, there is no practical protection from the films being copied by others without payment to our company, especially overseas. 11 THERE ARE ADDITIONAL RISKS IN FOREIGN BUSINESS. To the extent that we engage in foreign distribution of our films, we will be subject to all of the additional risks of doing business abroad including, but not limited to, government censorship, currency fluctuations, exchange controls, greater risk of "piracy" copying, and licensing or qualification fees. 12 USE OF PROCEEDS Certain of our officers and directors will be offering the common stock. There is no assurance that we will raise any proceeds, or if any proceeds are raised, that it will be sufficient enough to implement our business plan. The following table sets forth management's current estimate of the allocation of net proceeds anticipated to be received from this offering if all or part of this offering is sold. Actual expenditures may vary from these estimates. Pending such uses, we will invest the net proceeds in investment-grade, short-term, interest bearing securities.
100% 75% 50% 25% Offering Sold Offering Sold Offering Sold Offering Sold ------------- ------------- ------------- ------------- Gross Proceeds $175,000 $131,250 $87,500 $43,750 Less offering Expenses $20,000 $20,000 $20,000 $20,000 Net Proceeds $155,000 $111,250 $67,500 $23,750 Use of Proceeds Debt Repayment $10,000 $10,000 $10,000 $10,000 Acquisition of Motion $35,000 $35,000 $15,000 $5,000 Picture Rights Motion Picture Development $35,000 $35,000 $15,000 $5,000 Motion Picture $40,000 $0 $0 $0 Pre-production Equipment $5,000 $5,000 $5,000 $0 Marketing Expenses $10,000 $6,250 $2,500 $0 Working Capital $20,000 $20,000 $20,000 $6,750 Total Use of Proceeds $155,000 $111,250 $67,500 $23,750
The foregoing represents our present intentions based upon our present plans and business conditions. The occurrence of unforeseen events or changed business conditions, however, could result in the application of the proceeds of this offering in a manner other than as described in this prospectus. If any of these factors change, we may find it necessary or advisable to reallocate some of the proceeds within the above-described categories. Debt repayment refers to repayment of a promissory note issued to 396147 B.C. Ltd. on March 3, 2003. Under the terms of the Note, which is unsecured, we promised to repay 396147 B.C. Ltd. the sum of $10,000 on March 3, 2005, with interest 13 accruing at an annual interest rate of five percent. Proceeds of the loan from 396147 B.C. Ltd. were used to pay for legal fees, accounting fees, and miscellaneous expenses. Equipment includes computers, telecommunications and furniture. Working capital includes leased premises, office expenses and supplies, and other general expenses. In the event that we do not raise sufficient capital to pay for the offering expenses, we plan to seek loans from our current shareholders. DETERMINATION OF OFFERING PRICE As no underwriter has been retained to offer our common stock, the offering price of our common stock was not determined by negotiation with an underwriter as is customary in underwritten public offerings. Rather, we determined the offering price based on the amount of capital needed to enter into the pre-production phase of one of our projects, without considering our assets, earnings, book value, net worth or other economic or recognized criteria or future value of our common stock. DILUTION At March 31, 2003, we had a negative book value of $(12,416) or $(0.002) per share. Negative book value per share is determined by dividing our total shareholders' deficit at March 31, 2003, by the number of shares of common stock outstanding. Without taking into account any changes in negative book value after March 31, 2003, other than to give effect to the sale of the 1,750,000 shares of common stock offered hereby, and after deducting estimated offering expenses, the pro forma book value at March 31, 2003, would have been approximately $142,584 or $0.015 per share. This amount represents an immediate dilution to new investors of $0.085 per share. The following table illustrates this dilution per share:
Assumed public offering price per share.................................... $0.10 Negative Book value per share at March 31, 2003......................... $(0.002) Increase per share attributable to new investors........................ 0.017 ----- Book value per share after offering......................................... 0.015 ----- Book value dilution per share to new investors.............................. $0.085 ======
Assuming the sale of 75%, 50% and 25% of the Offering, the pro forma book value at March 31, 2003, would have been approximately $98,834 or $0.011 per share, $55,084 or $0.006 per share, and $11,334 or $0.001 per share, representing a book value dilution per share to new investors of $0.089, $0.094 and $0.099 per share respectively. The following table sets forth, as of March 31, 2003, the number and percentage of shares of common stock held by the existing shareholders and by the investors purchasing shares of common stock in this offering assuming 1,750,000 shares of common stock are sold:
Shares Purchased Number Percent --------------- --------------- Existing shareholders................................ 8,000,000 82.05 New investors........................................ 1,750,000 17.95 --------- ----- Total........................................... 9,750,000 100.00% ========= ======
14 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS At present, our common stock is not traded publicly. After the close of the offering, we intend to apply to the OTC Bulletin Board to seek quotation of our common stock. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. Furthermore, the shares are not marginable and it is not likely that a lending institution would accept our common stock as collateral for a loan. Pursuant to this registration statement, we propose to publicly offer up to a total of 1,750,000 shares of common stock on a best efforts, no minimum basis. To date, we have no outstanding options, warrants convertible securities. We have no agreements to register shares of common stock held by existing security holders for resale. Prior to this offering, we have two shareholders that own in the aggregate of 8,000,000 shares of restricted common stock. Our transfer agent and registrar is Pacific Stock Transfer Company located at 5844 South Pecos Road, Suite D, Las Vegas, Nevada, 89120, telephone (702) 361-3033. 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION We began operations on February 27, 2003. From inception to March 31, 2003, we had no revenue and incurred expenses of $13,216 primarily related to startup expenses and $5,000 for the acquisition cost of options from Mr. Thomas for the screenplays "Code Blue" and "Pelicula". As of March 31, 2003, we had a negative working capital of $12,416. Except for the options to the two screenplays, we have no assets as of March 31, 2003. We are considered to be a development stage company, and are dependent upon the raising of capital through placement of our securities. There can be no assurance that we will be successful in raising the capital we require through the sale of our securities. We presently do not have enough cash to satisfy any future cash requirements. We will need a minimum of $100,000 from this offering to satisfy our cash requirements for the next 12 months. With this capital, we intend to acquire screenplay properties for several motion pictures and to enter into the pre-production phase for one of our screenplays. If we only raise a nominal amount, for example, $17,500 or 10% of the offering, we will use all proceeds for working capital, and it will be necessary for us to seek additional financing. If we are unsuccessful in doing so, we may have to cease operations based on our current business plan. We will not be able to produce a feature film, on our own, with the proceeds of this offering, regardless of the amount raised in this offering, without additional outside financing. We will request that providers of goods and services accept deferred payment arrangements. We will apply for funding through the Canadian and British Columbia governments, and for production services tax credits. We also may assign a portion of our film rights to a joint venture or a co-producer. In addition, we will consider the formation of a limited liability company or partnership for which we will act as managing member or general partner and privately offer membership or partnership interests. We will attempt to obtain favorable pre-release sales or pre-licensing commitments from independent U.S. distributors, foreign distributors, cable networks, and video distributors. Although we have had some preliminary discussions, we do not have any present plans, proposals, arrangements or understandings with any parties that will provide additional financing. If we are unable to receive the additional funds, we will probably be forced to discontinue operations. Since our incorporation, we have primarily completed the development stage of two motion pictures, "Code Blue" and "Pelicula." In the next twelve months, in addition to completing this offering, we plan to complete the pre-production phase of one of these movies, including the hiring of a casting director to submit the screenplay to appropriate actors as recommended by their agents or as deemed appropriate by us; obtaining commitments of internationally recognizable actors; developing relationships with foreign sales companies to pre-sell film distribution rights; and finalizing shooting location arrangements. If we begin pre-production of one of our developed motion pictures, "Code Blue" or "Pelicula," the choice of one over the other will be dependent upon various factors including the cost and availability of actors and locations. Upon securing commitments from key talent or an independent producer with respect to one of our motion picture projects, we plan to secure additional funds for its production. We expect to make nominal purchases of equipment, including computers, telecommunications equipment and furniture. We do not expect to hire any employees in the next 12 months, as we will utilize independent contractors, consultants, and other non-employee creative personnel to assist in pre-production of our motion pictures. 16 We depend upon capital to be derived from this offering. There can be no assurance that we will be successful in raising the capital we require. We believe that if we raise a minimum of $100,000 from this offering we will be able to complete pre-production of a motion picture and pursue opportunities to secure financing to complete the motion picture. We also plan to enter into co-productions with experienced and qualified production companies in order to become a consistent supplier of multiple products to distributors in the world markets. In connection with co-productions, we do not want to relinquish control of the project, so we intend to provide up to 50% of the funds required by the production. We may obtain our share from others such as from borrowings or by offering participation in other films. With dependable and consistent delivery of product to these markets, we believe that distribution arrangements can be structured which will be equivalent to the arrangements made by major studios. No assurance can be given that our feature films, if produced, will be distributed and, if distributed, will return our initial investment or make a profit. To achieve the goal of producing profitable feature films, we plan to be extremely selective in our choice of literary properties and exercise a high degree of control over the cost of production. Although we plan to produce films that will generate substantial box office receipts, we will produce our films in a fiscally conservative manner. We believe that it is possible for a feature film to return the initial investment and show a profit based on an average box office run, with residuals from the sale of ancillary rights adding to cash flow in future years. By keeping strict control of our costs, we will strive for consistent and profitable returns on our investment. 17 DESCRIPTION OF BUSINESS OVERVIEW We are a development stage, independent motion picture studio that plans to develop, produce, market, and distribute low-budget feature-length films to movie theaters and ancillary markets. OUR COMPANY We were incorporated under the laws of the State of Nevada on February 27, 2003, and maintain our head office and operations in Vancouver, British Columbia. Shortly after our incorporation, we acquired options from Mr. Fidel Thomas to exploit two screenplays titled "Code Blue" and "Pelicula." After we acquired the options from Mr. Thomas, he became our company's vice president, secretary and a director. He also owns 25 percent of our outstanding common stock. We intend to produce motion pictures based on one or both of these screenplays. Since inception, our activities have consisted primarily of developing our business plan, and negotiating to secure options on literary works and screenplays that can be produced into commercially salable feature-length motion pictures at a cost not to exceed $10 million. We continue to review potential film projects. We have not, however, acquired any options or entered into any agreements regarding any projects other than "Code Blue" and "Pelicula." We have no future financial commitments to acquire any other film rights. We are presently using office space provided at no charge by our president, Thomas E. Mills. When we have sufficient capital we intend to lease approximately 500 to 1,000 square feet of office space in downtown Vancouver to use as the corporate head office. We currently have no employees. Our officers will assume employee status upon implementation of this plan. We may utilize independent contractors and consultants from time to time to assist in developing, producing and promoting our motion pictures. Independent contractors are generally paid on a commission, hourly or job-related basis, depending on the services being performed. THE MOTION PICTURE INDUSTRY General The motion picture industry has experienced steady growth since the first silent movie. In its most recent release, issued in 2003, for the year 2002, the Motion Picture Association of America or MPAA, which only issues U.S. statistics, reported that box office receipts in the United States grew over 95% since 1992's $4.87 billion to $9.52 billion in 2002. This represents an increase of over 13% from $8.41 billion in 2001. The number of admissions to movie theaters in the United States was approximately 1.64 billion in 2002, up approximately 40% from 1.73 billion in 1992 and 10% from 1.49 billion in 2001. The motion picture industry in the United States has changed substantially over the last 30 years and continues to evolve rapidly. With the advent of network, broadcasting television alliances, cable television and home video, the market has expanded faster than at any other time. Movies are being bought for pay-television cable networks as well as for the traditional outlets of theaters and network television. With the expansion of audience markets, distribution is no longer limited to the major distributors and the broadest possible audience appeal. With this media expansion, less general, more specific audiences can be 18 sought and profitably exploited such as for science fiction or horror films or films geared to children or to women. Historically, the major studios financed, produced and distributed the vast majority of American-made motion pictures. Today, much of the financing and distribution of significant motion pictures remains in the control of the major studios. But as many of the major Hollywood film production companies have become part of large conglomerate business operations, or diversified their operations, they have adopted a policy of producing only a relatively small number of films each year. As demand for filmed entertainment has increased, many smaller, independent film production companies have been successfully established to fill the excess demand for product. Our business will involve the actual development and production of motion pictures. The procedures and practices described in the following generalized discussion relating to the motion picture industry are intended only to provide a background against which the business of our company may be evaluated. There can be no assurance that the procedures and practices described in the following generalized discussion will apply in any particular instance to our business. Production of Motion Pictures During the film making process, which takes approximately 12 to 24 months from the start of the development phase to theatrical release, a film progresses through several phases. The four stages of motion picture production are development, pre-production, principal photography and post-production. After the movie producer completes that process, the film is distributed and marketed. The following is a brief summary of each stage of production: Development and Pre-production In the development stage of a motion picture project, literary material for the project is acquired, either through an option to acquire such rights, or by engaging the writer to create original literary material. If the literary material is not in script form, a writer must be engaged to create a script. The script must be sufficiently detailed to provide the production company and others participating in the financing of a motion picture with enough information to estimate the cost of producing the motion picture. Only a small percentage of projects in development will become completed motion pictures. During the pre-production stage, the production company hires creative personnel including the principal cast members. It also uses this time to establish shooting locations and schedules. The production company also prepares the budget and secures the necessary financing. Pre-production activities are usually more expensive than the development process. In cases involving unique or desired talent, commitments must be made to keep performers available for the picture. Principal Photography and Post-production The process of principal photography is the actual filming of a motion picture. During principal photography, almost all of the film footage is shot, although additional scenes may be added during post-production. This part of the making of a movie together with creating special effects is the most costly stage of producing a motion picture. Principal photography generally takes from eight to twelve weeks to complete. Bad weather at locations, the illness of a cast or crew member, disputes with local authorities or labor unions, a director's or producer's decision to shoot scenes for artistic reasons, and other, often unpredictable, events can seriously delay the scheduled completion of principal photography and substantially increase its costs. If a motion picture reaches the principal photography stage, it usually will be completed. Following principal photography is the post-production stage. During post-production, the motion picture film is edited to its final form. Music is added, as is dialogue and special effects. Music and film action are synchronized during this stage as the film is brought to its completed form. The 19 picture negative is then readied for the production of release prints. While the post-production stage may extend for any period, depending upon editing difficulties or the addition of new material, on the average, post-production may take from approximately 2 to 4 months. Most motion pictures that reach the post-production stage are eventually completed and distributed. Distribution of Motion Pictures One of the most important aspects of the motion picture industry is distribution. Once a film is produced, it must be distributed. Distribution consists of selling domestic and international licenses that entitle a third party to exploit a motion picture and its underlying intellectual property in various markets and media. Whether a major studio or an independent production company produces a motion picture, arrangements with various distributors must be developed. The only distinction between the distribution of major studio films and independent productions is that studios have close and long-standing distribution arrangements with various distributors in numerous distribution channels, whereas independent production companies must develop distribution arrangements on a film-by-film basis. Generally, the local distributor will acquire distribution rights for a motion picture in one or more distribution channels from an independent producer. The local distributor will agree to advance the producer a non-refundable minimum guarantee. The local distributor will then generally receive a distribution fee of between 20% and 35% of receipts, while the producer will receive a portion of gross receipts in excess of the distribution fees, distribution expenses and moneys retained by exhibitors. The local distributor and theatrical exhibitor generally will enter into an arrangement providing for the exhibitor's payment to the distributor of a percentage (generally 40% to 50%) of the box-office receipts for the exhibition period, depending upon the success of the motion picture. Most of the revenue produced by a film is usually generated during the first five years after the film's initial domestic theatrical release. Movies that are commercially successful may continue to generate revenue beyond five years from the re-licensing of distribution rights in certain media, including television and home video, and from the licensing of distribution rights with respect to new media and technologies. The timing of revenue received from the various sources varies from film to film. The markets for film product have been undergoing rapid changes due to technical and other innovations. As a consequence, the sources of revenue available have been changing rapidly and the relative importance of the various markets as well as the timing of such revenue have also changed and can be expected to continue to change. Although there are no definitive statistics to determine the number of productions that are initiated with the intention of theatrical distribution, according to the Internet Movie Database, an Amazon.com company maintaining a catalog of over 250,000 films made since the beginning of the motion picture industry, over 5,000 movies were completed in the year ending December 31, 2002. Of those films, according to the MPAA, only 467 were released in theaters. Of those released in theaters, 281 films were not distributed by the major studios (Walt Disney Company, Sony Pictures Entertainment, Inc., Metro-Goldwyn-Mayer Inc., Paramount Pictures Corporation, Twentieth Century Fox Film Corp., Universal Studios, Inc., Warner Bros.) and their affiliates. Furthermore, of those 281 films, only a small number remained in theaters a period of time comparable to that of the major studio releases. The following is a brief summary of each of the sources of revenue from motion pictures and the distinct distribution process associated with each. We expect our movies to generate revenue from all of these sources. 20 Theatrical Distribution The distributor and theatrical exhibitor generally enter into license agreements providing for the payment by the exhibitor to the distributor of a percentage of box office receipts after deducting the exhibitor's overhead or a flat amount. The percentage generally ranges from 35-60% and may change for each week the film plays in a specific theater, depending on the motion picture's success at the box office. The balance, known as the gross film rental, is remitted to the distributor. The distributor then retains a distribution fee from the gross film rental and recovers the costs of distributing the film, consisting primarily of advertising, marketing, and production cost, and the cost of manufacturing release prints. The balance, if any, after recouping any advance or minimum guarantee previously paid is then paid to the producer based on a predetermined split between the producer and distributor. Theatrical Distribution-United States Recently, United States theatrical exhibition has generated a declining percentage of the total income earned by most pictures largely because of the increasing importance of cable and pay television, home video and other ancillary markets. Nevertheless, the total revenue generated in the United States theatrical market are still increasing and are still likely to account for a large percentage of revenue for a particular film. In addition, performance in the United States theatrical market generally has a profound effect on the value of the picture in other media and other markets. For a picture's initial theatrical release, the United States theater exhibitor will usually pay to a distributor a percentage of the box office receipts that is negotiated based upon the expected appeal of the motion picture. The percentage of box office receipts remitted to the distributor is known as film rentals and customarily diminishes during the course of the picture's theatrical run. Typically, the distributor's share of total box office receipts over the entire initial theatrical release period will average between 35 to 60 percent; the exhibitor will retain the remaining 40 to 65 percent. The exhibitor will also retain all receipts from the sale of food and drinks at the theater. Occasionally, an exhibitor will pay to the distributor a flat fee or percentage of the box office receipts against a guaranteed amount. Theatrical Distribution-Foreign While the value of the foreign theater market varies due to currency exchange rate fluctuations and the political conditions in the world or specific territories, it continues to provide a significant source of revenue for theatrical distribution. Because this market is comprised of a multiplicity of countries and, in some cases, requires the making of foreign language versions, the distribution pattern stretches over a longer period of time than does the United States theatrical market. Major studios usually distribute motion pictures in foreign countries through local entities. Distribution fees to these firms usually vary between 35 and 40 percent depending upon the territory or financial arrangements. These local entities generally will be either wholly owned by the distributor, a joint venture between the distributor and another motion picture company, or an independent agent or sub-distributor. These local entities may also distribute motion pictures of other producers, including some major studios. Film rental agreements with foreign exhibitors take a number of different forms, but typically provide for payment to a distributor for a fixed percentage of box office receipts or a flat amount. Risks associated with foreign distribution include fluctuations in currency values and government restrictions or quotas on the percentage of receipts that may be paid to the distributor, the remittance of funds to the United States and the importance of motion pictures to a foreign country. Home Video A motion picture typically becomes available for videocassette and digital videodisk or DVD distribution within four to six months after its initial domestic theatrical release. Home video distribution consists of the promotion 21 and sale of videocassettes and DVD to local, regional and national video retailers who rent or sell cassettes and disks to consumers primarily for home viewing. Most films are sold at a wholesale price to video rental stores, which rent the cassettes and DVD to consumers. Owners of films generally do not share in rental income. Following the initial marketing period, selected films are re-marketed at a wholesale price for sale in cassette or DVD form to consumers. These "sell-through" arrangements are used most often with films that will appeal to a broad marketplace or to children. Some films are initially offered at a price designed for sell-through rather than rental when it is believed that the ownership demand by consumers will result in a sufficient level of sales to justify the reduced margin on each cassette or DVD sold. The home video market in the Unites States and abroad has experienced substantial growth in the past several years and film industry analysts predict a period of continued growth. There are indications, however, that accessing movies "on demand" on a pay-per-view basis may be a viable alternative to video rental as new technology is developed in the future. This development may impact video rentals but would likely be offset by comparable increases in pay-per-view usage and profit margins due to lower distribution costs and lower prices for viewers plus the convenience of faster selection and at-home selection. Certain foreign territories in particular have seen increased utilization of home video units due to the relative lack of diversified television programming. Sales of videocassettes have increased in such markets in recent years. Although growth in this area may slow because of an increase in television programming in such foreign territories, receipts from home video in these markets can be expected to continue to be significant. Home video arrangements in international territories are similar to those in domestic territories except that the wholesale prices may differ. Television Television rights are generally licensed first to pay-per-view for an exhibition period within six to nine months following initial U.S. theatrical release. Within twelve to fifteen months after the initial domestic release, the rights are then licensed to pay television, then in certain cases to free television for an exhibition period, and then to pay television again. These films are then syndicated to either independent stations or basic cable outlets. Cable and Pay Television Pay television rights include rights granted the cable, direct broadcast satellite, pay-per-view and other services paid for by subscribers. Pay television companies have entered into output contracts with one or more major motion picture production companies on an exclusive or non-exclusive basis to insure themselves a continuous supply of motion picture programming. Some pay television services have required exclusivity as a precondition for such contracts. Pay-per-view television allows subscribers to pay for individual programs, including recently released movies, on a per use basis. Pay television allows cable television subscribers to view such channels as HBO, Showtime, The Movie Channel, Lifetime, and A&E, which are offered by their cable system operators for a monthly subscription fee. Since groups of motion pictures are typically packaged and licensed for exhibition on television over a period of time, revenue from these television licensing "packages" may be received over a period that extends beyond five years from the initial domestic theatrical release of a particular film. Motion pictures are also packaged and licensed for television broadcast in international markets. The pay television market is characterized by a large number of sellers and few buyers. However, the number of motion pictures utilized by these buyers is extremely large and a great majority of motion pictures that receive theatrical exhibition in the United States are shown on pay television. 22 Network Television In the United States, broadcast network rights are granted to ABC, CBS, Fox, NBC or other entities formed to distribute programming to a large group of stations. The commercial television networks in the United States license motion pictures for a limited number of exhibitions during a period that usually commences two to three years after a motion picture's initial theatrical release. During recent years, only a small percentage of motion pictures have been licensed to network television, and the fees paid for such motion pictures have declined. This decline is generally attributed to the growth of the pay television and home video markets, and the ability of commercial television networks to produce or acquire made-for-television motion pictures at a lower cost than license fees previously paid for theatrical motion pictures. Television Syndication Distributors also license the right to broadcast a motion picture on local, commercial television stations in the United States, usually for a period commencing five years after initial theatrical release of the motion picture, but earlier if the producer has not entered into a commercial television network license. This activity, known as syndication, has become an important source of revenue as the number of, and competition for programming among, local television stations has increased. Foreign Television Syndication Motion pictures are now being licensed in the foreign television market in a manner similar to that in the United States. The number of foreign television stations as well as the modes of transmission has been expanding rapidly, and the value of such markets has been likewise increasing and should continue to increase. Producers may license motion pictures to foreign television stations during the same period they license such motion pictures to television in the Unites States. Governmental restrictions and the timing of the initial foreign theatrical release of the motion pictures in a particular country may delay the exhibition of a motion picture in that country. International Markets Growth and Tastes Motion picture distributors and producers derive revenue from international markets in the same media as domestic markets. The growth of foreign revenue has been dramatic, and now accounts for more than half of the total revenue of many films. The increase in revenue is currently being driven primarily from the growth of television abroad. The increase in foreign television viewers and foreign revenue is likely to continue. Although the increased level of foreign viewers affects the revenue of most films, the effect is not uniform. Action films and films with major stars benefit most from foreign revenue as compared to films with uniquely American themes with unknown actors. Non-Theatrical and Other Rights Films may be licensed for use by airlines, schools, public libraries, community groups, the military, correctional facilities, cruise ships and others. In addition, rights may be licensed to merchandisers for the manufacture of products related to a film, such as video games, toys, posters, apparel and other merchandise. Rights may also be licensed for sequels to a film, for television programming based on a film or for related book publications. 23 Independent Film Production and Distribution The film production process, including development, pre-production, and production, for independent production companies not backed by major studios, such as ours, and the major studios is essentially the same. However, independent producers typically create motion pictures at substantially lower average production costs than major studios. According to MPAA, major studios typically release films with direct production costs ranging from $25 million to in excess of $100 million, and from 1990 to 2000, the major studios' average production costs, including overhead and capitalized interest, commonly referred to as "negative cost," have increased from $26.8 million to $54.8 million. According to industry studies by Paul Kagan Associates, the trend on the part of major studios toward wider-release blockbusters over the past ten years has led to a decline in profitability, while the efficiency, which is measured by Paul Kagan Associates as the ratio of a film's estimated revenue against negative and releasing costs, and quality of smaller production films have been on the rise. Generally, independent production companies do not have access to the extensive capital required to make big budget motion pictures, such as the "blockbuster" product produced by the major studios. They also do not have the capital necessary to maintain the substantial overhead that is typical of such studios' operations. Independent producers target their product at specialized markets and usually produce motion pictures with budgets of less than $25 million. Generally, independent producers do not maintain significant infrastructure. They instead hire only creative and other production personnel and retain the other elements required for development, pre- production, principal photography and post-production activities on a project-by-project basis. Also, independent production companies typically finance their production activities from bank loans, pre-sales, equity offerings, co-productions and joint ventures rather than out of operating cash flow. They generally complete financing of an independent motion picture prior to commencement of principal photography to minimize risk of loss. CANADA'S ROLE IN THE MOTION PICTURE INDUSTRY Canada Over the past several years, the Canadian film industry has grown and matured, and at present, it represents approximately a CDN$3 billion annual business. At the same time as the Canadian domestic industry has matured, Canada has become a leading location for internationally originated productions. Over the past few years, U.S. studios, television networks and cable services have increasingly produced in Canada, attracted by the low Canadian dollar, first-class Canadian casts, crews, locations and facilities and government support for the industry. U.S. companies with a strong presence in Canada include major U.S. studios, such as Paramount, The Walt Disney Company, Universal Pictures and Columbia Tri-Star; U.S. networks, such as ABC, NBC, CBS, Fox and PAXTV; cable services, such as Showtime, TNT, Disney Channel and HBO; and film companies, such as The Hearst Corporation and Saban Entertainment, Inc. European and Asian film companies have also found Canada to be an attractive location and have often been able to access Canada's numerous international film and television co-production treaties. Of Canada's ten provinces and three territories, the provinces of British Columbia, Ontario and Quebec are most actively involved in the television and motion picture production industries, and many other provinces are actively soliciting this business. The Province of British Columbia The Province of British Columbia is the third largest film production center in North America - behind Los Angeles and New York. According to British Columbia Film Commission, more than 200 productions were filmed in British Columbia in 2001, 40 of them being feature films having an aggregate production 24 budget of more than CDN$500 million. British Columbia has more than 70 post-production facilities, 50 shooting stages and two water tank facilities. Lions Gate Studios and Vancouver Film Studios are two of the largest film and television studio facilities in Canada. The Bridge Studios, located in Burnaby, has one of the largest special effects stages in North America. Some of the major motion pictures filmed in British Columbia in recent years include: Along Came A Spider, Antitrust, Ecks vs. Sever, Dreamcatcher, Get Carter, Insomnia, I Spy, Legends of the Fall, Mission to Mars, The Pledge, Reindeer Games, Romeo Must Die, Rumble in the Bronx, Saving Silverman, The Sweet Hereafter, 13th Warrior, 3000 Miles to Graceland, and X-Men 2. Government Financing Initiatives Canadian Government Financial Support The Canadian Film Development Corporation, also known as Telefilm Canada, provides financial assistance in the form of equity investments, interest free and low interest loans, development and interim financing. Canadian film and television productions that have significant Canadian creative, artistic and technical content and that meet certain published criteria qualify for financial assistance. Telefilm Canada's provincial counterparts in Quebec, Ontario, Manitoba, Saskatchewan, British Columbia, New Brunswick and Nova Scotia also provide financial support to qualifying Canadian content productions. In 1996, the Canadian federal government established the Canada Television and Cable Production Fund (now operating as the CTF), a government-cable industry partnership that combined the former Cable Production Fund, Telefilm Canada's Canadian Broadcast Program Development Fund and a CDN$100 million contribution from the Department of Canadian Heritage to form an approximately CDN$200 million per year television funding initiative. British Columbia Government Financial Support The Province of British Columbia provides two financing initiatives for the development and production of motion pictures through British Columbia Film. The first initiative, the Development Fund provides development funding to feature films, dramatic or animated television projects or documentaries that have secured recent development commitments from a broadcaster or distributor. A non-recoupable advance, matching a percentage of the broadcast or distribution commitment, to a maximum of CDN$30,000 for each project is available. The second financing initiative, the Feature Film Production Fund, provides up to CDN$250,000 for the production of each selected fictional, animated or documentary feature-length film projects. Tax Credits. The Canadian federal government provides a refundable tax credit for eligible Canadian-content film or video productions produced by qualified corporations having a permanent establishment in Canada. The Canadian federal tax credit is for a maximum amount of 25% of eligible production costs. In addition to the federal Canadian-content tax credits, most provinces provide additional tax credit programs, ranging from 9.6% to 22.5%. In British Columbia, the tax credit is 20% to 35.5%, depending on location and training provided. The Canadian federal government "production services" tax credit for eligible film and television productions produced in Canada, but which do not otherwise qualify as Canadian content is equal to 16% of qualifying Canadian labor expenditures. Assuming that Canadian labor expenditures generally represent approximately 50% of the total production budget, the Canadian federal production services tax credit will net applicants approximately 8% of total 25 production costs. Most provincial governments have also introduced refundable production services tax credit programs at a rate ranging from 5.5% to 17.5% of eligible production costs. In British Columbia, the tax credit is 11% to 17% depending on location. Co-Production Treaties. Canada is a party to film and/or television co-production treaties with over 50 countries, which enables co-productions to qualify as local content and thus be eligible for government assistance and financing in more than one country, which reduces the cost of production. The most active relationship has traditionally been with France, but recently the United Kingdom has become a close second in volume of production. OUR BUSINESS We are committed to the development and production of commercially salable feature-length motion pictures that can be produced for up to $10 million, but which have enduring value in all media. We anticipate not only acquiring rights and producing motion pictures but also capitalizing on other marketing opportunities associated with these properties. We intend to exploit all available rights in each film, including the publishing and promotion of music, the incorporation of original songs on the sound track for subsequent use in promotion, sound track albums and story-telling records and the licensing of merchandising rights. We do not have sufficient capital to independently finance our own productions. Accordingly, most of our financial resources will be devoted to financing development activities, which include the acquisition of screenplays, and underlying literary works (such as books and plays). The ability to create or identify and develop commercially viable properties that can be produced by our company will be important for the success of our company. In that regard, we believe that a key element to our success will be the reputations of Messrs. Mills and Thomas in the Vancouver film community and their access to and relationships with creative talent including actors, writers and directors. We plan to employ a flexible strategy in developing and producing our motion picture and film properties. We will use our own capital and financial resources to develop a project to the point where it is ready to go into production. We will assemble a "package" consisting of the underlying literary property, a script that is ready for production, and key talent, including a director and principal cast. We believe that we should be able to secure key talent based on the attractiveness of the script but we may also offer, as an added incentive, grants of our stock or options to acquire our stock. We will then secure the financing to produce the movie and make it available for distribution. The financing may come from, for example, the Canadian and British Columbia governments, financial institutions, lenders with profit participation, advances from distribution companies, accredited investors or a combination of sources. The benefit of developing a project to this advanced stage is that we will have maximum leverage in negotiating production and financing arrangements. Nevertheless, there may be situations when we may benefit from financial assistance at an earlier stage. These occasions may be necessary as a result of lengthy development of a script, the desirability of commissioning a script by a highly paid writer, the acquisition of an expensive underlying work, or a significant financial commitment to a director or star. It is common for motion picture producers to grant contractual rights to actors, directors, screenwriters, and other creative and financial contributors to share in revenue or net profits from the motion picture. Except for the most sought-after talent, these third-party participators are generally payable after all distribution fees, marketing expenses, direct production costs and financing costs are recouped in full. We plan to be flexible in compensating talent. We are not averse to entering into profit sharing arrangements. We will also 26 consider the use of our securities to reward the actors and other participants in a successful motion picture. Motion picture revenue is derived from the worldwide licensing of a motion picture to several distinct markets, each having its own distribution network and potential for profit. The selection of the distributor for each of our feature films will depend upon a number of factors. Our most basic criterion is whether the distributor has the ability to secure bookings for the exhibition of the film on satisfactory terms. We will consider whether, when and in what amount the distributor will make advances to us. We will also consider the amount and manner of computing distribution fees and the extent to which the distributor will guarantee certain print, advertising and promotional expenditures. We will not attempt to obtain financing for the production of a particular film unless we believe that adequate distribution arrangements for the film can be made. In the next two years, our objective is to acquire rights to two dozen screenplays that we can produce into feature films, and to produce and/or co-produce at least two profitable feature films. To date, we have secured options to produce two motion pictures based on the screenplays titled "Code Blue" and "Pelicula". We continue to review potential film projects. We have not, however, acquired any options or entered into any agreements regarding any other projects. Upon successful completion of this offering, we will begin pre-production of one of our two developed motion pictures, "Code Blue" or "Pelicula." We expect that our first film will be "Code Blue." We have not yet decided as to which film will be our second. In the next six to eight months, we expect to begin pre-production of "Code Blue", and commence principal photography in the spring of 2004. No assurance can be given, however, that we will obtain the necessary funds to produce any motion pictures. Feature Film Production Feature film production does not require the ownership of expensive equipment. All the necessary equipment needed to engage in every aspect of the film production process can be rented or borrowed for the period in which it is needed. This is standard operating procedure for all production companies within the industry and we plan to follow this procedure in our productions. Such rentals and temporary equipment are accounted for in the budget of each film in what are called the "below the line" costs that are directly charged to the production or the cost of "manufacturing" the film. We plan to rent whatever equipment is needed for the shortest period of time and to coordinate its use to avoid idle time. Essential to our success will be the production of high quality films with budgets up to $10 million that have the potential to be profitable. We will not engage in the production of X-rated material. We plan to make motion pictures that appeal to the tastes of the vast majority of the movie-going public. Our films will be cast into a wide range of genres. All movies that may be produced will be suitable for domestic and international theatrical exhibition, pay cable, network and syndicated television, as well as all other ancillary markets. The low budgets, within which we intend to operate, will serve the dual purpose of being low enough to limit our downside exposure and high enough to pay for a feature film with accomplished actors or directors that appeal to the major markets. The market pull of the talent to be used must justify their fees by helping to attract advances. Our budgets must remain small enough so that a large percentage of our capital is not put at risk. We intend to produce projects with built-in break-even levels that can be reached with ancillary and foreign distribution revenue. If the movie crosses-over into a wide national distribution release, we can potentially generate a large profit because our share is not limited as with ancillary and foreign revenue. 27 In order to produce quality motion pictures for relatively modest budgets, we will seek to avoid the high operating expenses that are typical of major U.S. studio productions. We do not plan on having high overhead caused by large staffs, interest charges, substantial fixed assets, and the investment in a large number of projects never produced. Central to our plan for reducing costs will be the production of our motion pictures in Vancouver, British Columbia, Canada. Vancouver provides an ample talent base, a wide range of auxiliary services such as post production facilities, sound stages and animation studios, and an extremely diverse selection of filming locations. This, in conjunction with an extremely favorable exchange rate and competitive wage rates, will enable us to produce motion pictures for far lower production costs than a similar quality production in the United States. Additionally, we believe that by maintaining a smaller, more flexible staff with fewer established organizational restrictions we can further reduce costs through better time management than is possible in a major studio production. Primary responsibility for the overall planning, financing and production of each motion picture will rest with our officers. For each motion picture we will employ an independent film director who will be responsible for, or involved with, many of the creative elements, such as direction, photography, and editing. All decisions will be subject to budgetary restrictions and our business control, although we will permit an independent director to retain reasonable artistic control of the project, consistent with its completion within strict budget guidelines and the commercial requirements of the picture. Financing Strategy We will not be able to produce a feature film on our own with the proceeds of this offering without additional outside financing and the deferral of certain production costs. Wherever possible we will attempt to make arrangements with providers of goods and services to defer payment until a later stage in the production and financing cycle. Once a film package has been assembled, there are various methods to obtain the funds needed to complete the production of a movie. Examples of financing alternatives include the assignment of our rights in a film to a joint venture or a co-producer. Also, we may form a limited liability company or partnership where we will be the managing member or the general partner. In addition we may obtain favorable pre-release sales or pre-licensing commitments from various end-users such as independent domestic distributors, foreign distributors, cable networks, and video distributors. These various techniques, which are commonly used in the industry, can be combined to finance a project without a major studio financial commitment. By virtue of our location in British Columbia, Canada, we may be able to obtain financial support from Telefilm Canada and British Columbia Film. By operating in British Columbia and maintaining a permanent establishment in Vancouver, we expect to be able to borrow against tax credits obtained through Canadian federal and provincial production services tax credits. These tax credits will enable to us to recover 27% to 33% of eligible labor costs, or approximately 13.5% to 16.5% of our total production budget. Canadian banks commonly allow producers to borrow against such tax credits in producing motion pictures. Our location in Canada may also allow us to access foreign government financing through international co-productions with treaty countries. We may use any one or a combination of these or other techniques to finance our films. We anticipate that any financing method will permit us to maintain control over the production. There can be no assurance that we will be able to successfully arrange for such additional financing and to the extent we are unsuccessful, our production activities may be adversely affected. As part of our financing strategy, we may use some of the proceeds of this offering that is allocated to movie production to be used as an advance payment to secure the services of a star actor. This will assure the actor's services and will assist us in obtaining financing to produce the movie. 28 Distribution Arrangements Effective distribution is critical to the economic success of a feature film, particularly when made by an independent production company. We have not as yet negotiated agreements for the distribution of our films. We intend to release our films in the United States through existing distribution companies, primarily independent distributors. We will retain the right for ourselves to market the films on a territory-by-territory basis throughout the rest of the world and to market television and other uses separately. In many instances, depending upon the nature of distribution terms available, it may be advantageous or necessary for us to license all, or substantially all, distribution rights through one major distributor. It is not possible to predict, with certainty, the nature of the distribution arrangements, if any, which we may secure for our motion pictures. Competition The motion picture industry is intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of leisure entertainment. We will be competing with the major film studios that dominate the motion picture industry. Some of these firms we compete with include: News Corporation's Twentieth Century Fox; AOL Time Warner's Warner Bros. including Turner, New Line Cinema and Castle Rock Entertainment; Viacom's Paramount Pictures; Vivendi Universal's Universal Studios; Sony Corp.'s Sony Pictures including Columbia and TriStar; Walt Disney Company's Buena Vista, Touchstone and Miramax and Metro-Goldwyn-Mayer including MGM Pictures, UA Pictures, Orion and Goldwyn. We will also compete with numerous independent motion picture production companies, television networks, and pay television systems, for the acquisition of literary properties, the services of performing artists, directors, producers, and other creative and technical personnel, and production financing. Nearly all of the firms we will compete with are organizations of substantially larger size and capacity, with far greater financial and personnel resources and longer operating histories, and may be better able to acquire properties, personnel and financing, and enter into more favorable distribution agreements. In addition, our films compete for audience acceptance with motion pictures produced and distributed by other companies. Our success is dependent on public taste, which is both unpredictable and susceptible to rapid change. In order to be competitive, we intend to create independent motion pictures of aesthetic and narrative quality comparable to the major film studios that appeal to a wide range of public taste both in the United States and abroad. By producing our films in Canada we believe that we will be able to significantly reduce production costs, and thereby offer our films to distributors at extremely competitive pricing. We plan to be very selective when choosing literary properties to develop. We plan to produce our motion pictures efficiently, by employing talented and established professionals with experience in the industry. Also, we plan on exploiting all methods of distribution available to motion pictures. Intellectual Property Rights Rights to motion pictures are granted legal protection under the copyright laws of the United States and most foreign countries, including Canada. These laws provide substantial civil and criminal penalties for unauthorized duplication and exhibition of motion pictures. Motion pictures, musical works, sound recordings, artwork, and still photography are separately subject to copyright under most copyright laws. We plan to take appropriate and reasonable measures to secure, protect, and maintain copyright protection for all of our pictures under the laws of the applicable jurisdictions. Motion picture piracy is an industry-wide problem. Our industry trade association provides a piracy hotline and investigates all piracy reports. The results of such investigations 29 may warrant legal action, by the owner of the rights, and, depending on the scope of the piracy, investigation by the Federal Bureau of Investigation and/or the Royal Canadian Mounted Police with the possibility of criminal prosecution. Under the copyright laws of Canada and the United States, copyright in a motion picture is automatically secured when the work is created and "fixed" in a copy. We intend to register our films for copyright with both the Canadian Copyright Office and the United States Copyright Office. Both offices will register claims to copyright and issue certificates of registration but neither will "grant" or "issue" copyrights. Only the expression (camera work, dialogue, sounds, etc.) fixed in a motion picture can be protected under copyright. Copyright in both Canada and the United States does not cover the idea or concept behind the work or any characters portrayed in the work. Registration with the appropriate office establishes a public record of the copyright claim. To register a motion picture with the Canadian Copyright Office or the United States Copyright Office, a signed application; a complete copy of the motion picture being registered; a written description of the contents of the motion picture; and a filing fee must be sent to each respective office. A copyright registration is effective on the date the office receives all the required elements in acceptable form. Ordinarily, a number of individuals contribute authorship to a motion picture, including the writer, director, producer, camera operator, editor, and others. Under the laws of both Canada and the United States, these individuals are not always considered the "authors," however, because a motion picture is frequently a "work made for hire." In the case of a work made for hire, the employer, not the individuals who actually created the work, is considered the author for copyright purposes. We intend all of our films to be works made for hire in which we will be the authors and thereby own the copyright to our films. Canada's copyright law is distinguished from that of the United States by recognizing the moral rights of authors. Moral rights refer to the rights of authors to have their names associated with their work, and the right to not have their work distorted, mutilated or otherwise modified, or used in association with a product, service, cause or institution in a way that is prejudicial to their honour or reputation. Moral rights cannot be sold or transferred, but they can be waived. We intend that all individuals who contribute to the creation of any of our motion pictures will be required to waive any such moral rights that they may have in the motion picture. For copyright purposes, publication of a motion picture takes place when one or more copies are distributed to the public by sale, rental, lease or lending, or when an offering is made to distribute copies to a group of persons (wholesalers, retailers, broadcasters, motion picture distributors, and the like) for purposes of further distribution or public performance. A work that is created (fixed in tangible form for the first time) on or after January 1, 1978, is automatically protected from the moment of its creation and is ordinarily given a term enduring for the author's life plus an additional 70 years after the author's death. For works made for hire, the duration of copyright will be 95 years from publication or 120 years from creation, whichever is shorter. Although we plan to copyright all of our film properties and projects, there is no practical protection from films being copied by others without payment to our company, especially overseas. We may lose an indeterminate amount of revenue as a result of motion picture piracy. Being a small company, with limited resources, it will be difficult, if not impossible, to pursue our various remedies. Motion picture piracy is an international as well as a domestic problem. It is extensive in many parts of the world. In addition to the Motion Picture Association of America, the Motion Picture Export Association, the American Film Marketing Association, and the American Film Export Association monitor the progress and efforts made by various countries to limit or prevent piracy. In 30 the past, these various trade associations have enacted voluntary embargoes of motion picture exports to certain countries in order to pressure the governments of those countries to become more aggressive in preventing motion picture piracy. The United States government has publicly considered trade sanctions against specific countries that do not prevent copyright infringement of American motion pictures. There can be no assurance that voluntary industry embargoes or United States government trade sanctions will be enacted. If enacted, such actions may impact the revenue that we realize from the international exploitation of our motion pictures. If not enacted or if other measures are not taken, the motion picture industry, including us, may lose an indeterminate amount of revenue as a result of motion picture piracy. Censorship An industry trade association, the Motion Picture Association of America, assigns ratings for age group suitability for domestic theatrical distribution of motion pictures under the auspices of its Code and Rating Administration. The film distributor generally submits its film to the Code and Rating Administration for a rating. We plan to follow the practice of submitting our pictures for ratings. Television networks and stations in the United States as well as some foreign governments may impose additional restrictions on the content of a motion picture that may wholly or partially restrict exhibition on television or in a particular territory. We will not engage in the production of X-rated material. We plan to make motion pictures that appeal to the tastes of the vast majority of the movie-going public. We plan to produce our motion pictures so there will be no material restrictions on exhibition in any major market or media. This policy may require production of "cover" shots or different photography and recording of certain scenes for insertion in versions of a motion picture exhibited on television or theatrically in certain territories. There can be no assurance that current and future restrictions on the content of our films may not limit or affect our ability to exhibit our pictures in certain territories and media. Theatrical distribution of motion pictures, in a number of states and certain jurisdictions, is subject to provisions of trade practice laws passed in those jurisdictions. These laws generally seek to eliminate the practice known as "blind bidding" and prohibit the licensing of films unless theater owners are invited to attend screenings of the film first. In certain instances, these laws also prohibit payment of advances and guarantees to film distributors by exhibitors. Labor Laws We will use non-unionized talent whenever possible to reduce our costs of production. Notwithstanding, many individuals associated with our productions, including actors, writers and directors, will be members of guilds or unions, which bargain collectively with producers on an industry-wide basis from time to time. Our operations will be dependent upon our compliance with the provisions of collective bargaining agreements governing relationships with these guilds and unions. Strikes or other work stoppages by members of these unions could delay or disrupt our activities. The extent to which the existence of collective bargaining agreements may affect us in the future is not currently determinable. DESCRIPTION OF PROPERTY We are presently using office space provided at no charge by our president, Thomas E. Mills. We will need to lease approximately 500-1,000 square feet of office space at another location to use as the corporate head office before we are able to implement our business plan. 31 LEGAL PROCEEDINGS To the best of the knowledge of our management, neither AMP Productions, Ltd., nor any of its officers or directors is a party to any material legal proceeding or litigation and such persons know of no material legal proceeding or contemplated or threatened litigation. There are no judgments against AMP Productions, Ltd. or its officers or directors. None of the our officers or directors have been convicted of a felony or misdemeanor relating to securities or performance in corporate office. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS The following sets forth our directors, executive officers, promoters and control persons, their ages, and all offices and positions held. Directors are elected for a period of one year and thereafter serve until their successor is duly elected by the shareholders. Officers and other employees serve at the will of the Board of Directors.
Term Period Served as Name Position Age Director/Officer ---- -------- --- ---------------- Thomas E. Mills President, Treasurer, 35 03/03/03 to present Director Fidel Thomas Vice President, Secretary, 40 03/03/03 to present Director
Thomas E. Mills serves as our president and treasurer. Mr. Mills is a lawyer, practicing in British Columbia, Canada, who has a wide range of experience in the fields of entertainment law, securities, commercial transactions and e-commerce. After being called to the Bar of British Columbia in 1997, Mr. Mills began practicing as an associate with Danks & Company, a law firm with a practice limited to the entertainment industry. His experience while with Danks & Company was primarily in the areas of film finance and intellectual property. In 1998, Mr. Mills moved to the law firm of McRae, Holmes & King to practice in the area of commercial litigation, as an associate. Mr. Mills left McRae, Holmes & King in 2000, to take a position as in-house counsel for Healthnet International, Inc., a Colorado corporation with a head office in Vancouver, British Columbia having its shares quoted on the NASD OTC:BB (trading symbol HLNT). Healthnet was in the business of providing turn-key e-commerce solutions primarily to the health and nutraceutical industry. While working for Healthnet, Mr. Mills was responsible for commercial agreements, corporate governance, and compliance with securities regulations. In 2001, Mr. Mills took the position of president of Scarab Systems, Inc., a privately held Nevada corporation in the business of providing electronic payment solutions to the e-commerce sector. In July 2002, Scarab Systems, Inc. was acquired by iRV, Inc., a Colorado corporation having its shares quoted on the NASD OTC:BB (trading symbol: IRVV), in a reverse takeover. Under the terms of the acquisition, Mr. Mills became and remains president and chief executive officer of iRV, Inc. On March 24, 2003, iRV, Inc. changed its name to Scarab Systems, Inc. Mr. Mills presently devotes 10 hours a week to Scarab System, Inc. Mr. Mills received his Bachelor of Laws degree from the University of British Columbia in 1996, and holds a Bachelor of Arts degree obtained from the University of Waterloo, Waterloo, Ontario in 1992. Fidel Thomas serves as our vice president and secretary. Mr. Thomas has been involved in the film business for more than twelve years. His career started in the United Kingdom with an independent film company, Time and Vision. There he served as head of development and was involved in all areas of the creative process in independent film production. In 1994, Mr. Thomas was offered a position at Johnson Family Films, where he took on a producers role. In 1996, 32 he was an integral part of the critically acclaimed feature "The Mexican Stand Off," which was sold to six territories in Europe. In 1998 Mr. Thomas and associates formed Inner Vision Images Motion Picture Corp. in Vancouver and became part of British Columbia's growing indigenous film industry. Mr. Thomas has also been an active member of the Vancouver International Film Festival since 1998, and contributes his time to their trade forum as a consultant to new filmmakers. Mr. Thomas obtained a degree in sociology at the University of East London, U.K., a degree in fine art at Kingsway University Central London, and a diploma in media practice/advanced screen writing at the Birkbeck College for extramural studies U.K. EXECUTIVE COMPENSATION To date we have no employees other than our officers. Neither our officers nor directors have been paid any compensation. We have no employment agreements with any of our officers. We do not contemplate entering into any employment agreements until such time as we receive revenue. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein. We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We have issued common stock to the following officers, directors, promoters and beneficial owners of more than 5% of our outstanding securities.
Position with Name Company Shares Consideration Date ---- ------- ------ ------------- ---- Thomas E. Mills President, Treasurer 6,000,000 $600 March 23, 2003 Fidel Thomas Vice President, 2,000,000 $200 March 26, 2003 Secretary
In March 2003, we acquired options from Mr. Thomas, our vice president, secretary and director, to two screenplays titled "Code Blue" and "Pelicula" for $2,500 each. The options grant us the right, for a period of one year, to acquire all right, title and interest to the two screenplays for $10,000 and $20,000 respectively, plus contingent payments based on certain milestones. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As of March 31, 2003, the following table sets forth information known by our management regarding beneficial ownership of our common stock at the date of this prospectus by: each person known by us to own, directly or beneficially, more than 5 percent of our common stock; each of our executive officers and directors; and, all of our officers and directors as a group. Except as otherwise indicated, our management believes that the beneficial owners of the common stock listed below, based on information furnished by the owners, own the shares directly and have sole investment and voting power over the shares. 33 Name Number of Shares Percent ---- ---------------- ------- Thomas E. Mills 6,000,000 75% Fidel Thomas 2,000,000 25% Directors and officers as a group 8,000,000 100% (two persons) The address for all officers and directors is 2708-939 Homer Street, Vancouver, British Columbia, Canada, V6B 2W6. Messrs. Mills and Thomas are promoters of the company. PLAN OF DISTRIBUTION Currently, we plan to sell our common stock through Fidel Thomas, who is our Secretary. We plan to sell our shares of common stock outside the United States to residents of Canada and Europe. Mr. Thomas will not receive any commission from the sale of any common stock. Mr. Thomas will not register as a broker/dealer under Section 15 of the Securities Exchange Act of 1934 (the "Exchange Act") in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer. These conditions are as follows: 1. The person is not subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act, at the time of his participation; 2. The person is not compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; 3. The person is not, at the time of their participation, an associated person of a broker-dealer; and 4. The person meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act in that she (a) primarily performs, or is intended to primarily perform at the end of the offering, substantial duties for or on behalf of the Issuer otherwise than in connection with transactions in securities; and (b) is not a broker-dealer, or an associated person of a broker-dealer, within the preceding twelve (12) months; and (c) does not participate in selling and offering of securities for any Issuer more than once every twelve (12) months other than in reliance on paragraphs (a)(4)(i) or (a) (4) (iii) of the Exchange Act. Mr. Thomas is not subject to disqualification, is not being compensated, and is not associated with a broker-dealer. Mr. Thomas is and will continue to be one of our officers and directors at the end of the offering and, during the last twelve months, he has not been and is not currently a broker-dealer nor associated with a broker-dealer. Mr. Thomas has not, during the last twelve months, and will not, during the next twelve months, offer or sell securities for another corporation other than in reliance on paragraphs (a)(4)(i) or (a) (4) (iii) of the Exchange Act. It is anticipated that we will be conducting our offering of common stock to residents of Canada and Europe. 34 DESCRIPTION OF THE SECURITIES We are currently authorized to issue 100,000,000 shares of $0.0001 par value common stock. All shares when issued, will be fully paid and non-assessable. All shares are equal to each other with respect to liquidation and dividend rights. Holders of voting shares are entitled to one vote for each share that they own at any shareholders' meeting. Holders of our shares of common stock do not have cumulative voting rights. Holders of shares of common stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available. Upon liquidation, holders of shares of common stock are entitled to participate pro-rata in a distribution of assets available for such distribution to shareholders. There are no conversion, preemptive or other subscription rights or privileges with respect to any shares. Our Articles of Incorporation do not provide for the issuance of any other securities. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Article Twelfth of our Articles of Incorporation provides, among other things, that no director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that any claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. LEGAL MATTERS The validity of the shares of common stock offered by us will be passed upon by the law firm of Bartel Eng & Schroder, Sacramento, California. EXPERTS Our balance sheet as of March 31, 2003, and the related statements of operations and deficit accumulated during the development stage, cash flows and stockholders' equity for the period February 27, 2002 (date of inception) to 35 March 31, 2003, have been included herein in reliance on the report of Moore Stephens Ellis Foster Ltd., Chartered Accountants, given on the authority of that firm as experts in accounting and auditing. AVAILABLE INFORMATION We have filed a registration statement on Form SB-2, together with all amendments and exhibits, with the Securities and Exchange Commission. This prospectus, which forms a part of that registration statement, does not contain all information included in the registration statement. Certain information is omitted and you should refer to the registration statement and its exhibits. With respect to references made in this prospectus to any of our contracts or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contracts or documents. You may review a copy of the registration statement at the Securities and Exchange Commission's public reference room, and at Securities and Exchange Commission's regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor, New York, New York 10048. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our filings and the registration statement can also be reviewed by accessing the Securities and Exchange Commission's website at http://www.sec.gov. 36 MOORE STEPHENS ELLIS FOSTER LTD. CHARTERED ACCOUNTANTS 1650 West 1st Avenue Vancouver, BC Canada V6J 1G1 Telephone: (604) 734-1112 Facsimile: (604) 714-5916 E-Mail: generaldelivery@ellisfoster.com Website: www.ellisfoster.com - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders AMP PRODUCTIONS, LTD. (A development stage company) We have audited the balance sheet of AMP Productions, Ltd. ("the Company") (A development stage company) as at March 31, 2003, the related statements of stockholders' deficiency, operations and cash flows from February 27, 2003 (inception) to March 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2003 and the results of its operations and cash flows for the period from February 27, 2003 (inception) to March 31, 2003 in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Vancouver, Canada "MOORE STEPHENS ELLIS FOSTER LTD." April 10, 2003 Chartered Accountants F-1 AMP PRODUCTIONS, LTD. (A development stage company)
Balance Sheet March 31, 2003 (Expressed in U.S. Dollars) - -------------------------------------------------------------------------------------------------------------------------- 2003 - -------------------------------------------------------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents $ 5,785 - -------------------------------------------------------------------------------------------------------------------------- Total assets $ 5,785 ========================================================================================================================== LIABILITIES AND STOCKHOLDERS' DEFICIENCY Liabilities Current Accounts payable and accrued liabilities $ 3,177 Promissory note and accrued interest 10,024 - -------------------------------------------------------------------------------------------------------------------------- 13,201 - -------------------------------------------------------------------------------------------------------------------------- Stockholders' Deficiency Share capital Authorized: 100,000,000 common shares with a par value of $0.0001 per share Issued and outstanding: 8,000,000 common shares 800 - -------------------------------------------------------------------------------------------------------------------------- (Deficit) accumulated during the development stage (8,216) - -------------------------------------------------------------------------------------------------------------------------- Total stockholders' equity deficiency (7,416) - -------------------------------------------------------------------------------------------------------------------------- ========================================================================================================================== Total liabilities and stockholders' deficiency $ 5,785 ========================================================================================================================== The accompanying notes are an integral part of these financial statements.
F-2 AMP PRODUCTIONS, LTD. (A development stage company)
Statement of Stockholders' Deficiency For the period from February 27, 2003 (inception) to March 31, 2003 (Expressed in U.S. Dollars) - ------------------------------------------------------------------------------------------------------------------------------- Deficit accumulated Common stock during Total ----------------------------- development stockholders' Shares Amount stage deficiency - ------------------------------------------------------------------------------------------------------------------------------- Issuance of common stock for cash March 3, 2003, $0.0001 per share 8,000,000 $ 800 $ - $ 800 Comprehensive income (loss) Loss for the period - - (8,216) (8,216) - ------------------------------------------------------------------------------------------------------------------------------- Balance, March 31, 2003 8,000,000 $ 800 $ (8,216) $ (7,416) =============================================================================================================================== The accompanying notes are an integral part of these financial statements.
F-3 AMP PRODUCTIONS, LTD. (A development stage company)
Statement of Operations (Expressed in U.S. Dollars) - ----------------------------------------------------------------------------------------------------------------------- February 27 2003 (inception) to March 31 2003 - ----------------------------------------------------------------------------------------------------------------------- General and administrative expenses Accounting $ 1,650 Consulting 5,427 Interest 24 Legal 957 Office 158 - ----------------------------------------------------------------------------------------------------------------------- 8,216 - ----------------------------------------------------------------------------------------------------------------------- Loss for the period $ 8,216 ======================================================================================================================= Loss per share - basic and diluted $ 0.00 ======================================================================================================================= Weighted average number of common shares outstanding - basic and diluted 8,000,000 ======================================================================================================================= The accompanying notes are an integral part of these financial statements.
F-4 AMP PRODUCTIONS, LTD. (A development stage company)
Statement of Cash Flows (Expressed in U.S. Dollars) - ------------------------------------------------------------------------------------------------------------------------- February 27 2003 (inception) to March 31 2003 - ------------------------------------------------------------------------------------------------------------------------- Cash flows from (used in) operating activities Loss for the period $ (8,216) Changes in assets and liabilities: - increase in accounts payable and accrued liabilities 3,177 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- (5,039) - ------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Promissory note 10,024 Proceeds from issuance of common stock 800 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- 10,824 - ------------------------------------------------------------------------------------------------------------------------- Increase in cash and cash equivalents 5,785 Cash and cash equivalents, beginning of period - - ------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 5,785 ========================================================================================================================= The accompanying notes are an integral part of these financial statements.
F-5 AMP PRODUCTIONS, LTD. (A development stage company) Notes to Financial Statements March 31, 2003 (Expressed in U.S. Dollars) - -------------------------------------------------------------------------------- 1. Incorporation and Continuance of Operations The Company was formed on February 27, 2003 under the laws of the State of Nevada. The Company has not commenced planned principal operations, producing filmed entertainment. The company is considered a development stage company as defined in SFAS No. 7. The Company has an office in Vancouver, Canada. These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred operating losses and requires additional funds to maintain its operations. Management's plans in this regard are to raise equity financing as required. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty. The Company has not generated any operating revenues to date. 2. Significant Accounting Policies (a) Cash and Cash Equivalents Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. (b) Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. (c) Advertising Expenses The Company expenses advertising costs as incurred. There was no advertising expenses incurred by the Company for the period ended March 31, 2003. (d) Loss Per Share Loss per share is computed using the weighted average number of shares outstanding during the period. The Company has adopted SFAS No. 128, "Earnings Per Share". Diluted loss per share is equivalent to basic loss per share. F-6 AMP PRODUCTIONS, LTD. (A development stage company) Notes to Financial Statements March 31, 2003 (Expressed in U.S. Dollars) - -------------------------------------------------------------------------------- 2. Significant Accounting Policies (continued) (e) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. As of March 31, 2003, the Company had no balance in a bank beyond insured limits. (f) Foreign Currency Transactions The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars, as follows: At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are remeasured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. (g) Fair Value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash and cash equivalents, accounts payable and accrued liabilities and promissory note and accrued interest. Fair values were assumed to approximate carrying values for these financial instruments, except where noted, since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company is operating outside the United States of America and has significant exposure to foreign currency risk due to the fluctuation of currency in which the Company operates and U.S. dollar. (h) Income Taxes The Company has adopted Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. F-7 AMP PRODUCTIONS, LTD. (A development stage company) Notes to Financial Statements March 31, 2003 (Expressed in U.S. Dollars) - -------------------------------------------------------------------------------- 2. Significant Accounting Policies (continued) (i) Stock-Based Compensation The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock-based Compensation. SFAS 123 encourages, but does not require, companies to adopt a fair value based method for determining expense related to stock-based compensation. The Company accounts for stock-based compensation issued to employees and directors using the intrinsic value method as prescribed under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. The Company did not grant any stock options during the period. (j) Comprehensive Income The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity (Deficiency). Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has no elements of "other comprehensive income" for the period ended March 31, 2003. (k) New Accounting Pronouncements In April 2003, the Financial Accounting Standard Board issued Statement of Financial Accounting Standard No. 149 (SFAS 149), Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and hedging Activities. This Statement is effective for contracts entered into or modified after June 30, 2003. We do not expect the implementation of SFAS No. 49 to have a material impact on our consolidated financial statements. 3. Promissory Note and Accrued Interest, due February 25, 2005 --------------------------------------------------------------------------- Principal, unsecured and bearing interest at 3% $ 10,000 per annum Accrued interest 24 --------------------------------------------------------------------------- $ 10,024 =========================================================================== F-8 AMP PRODUCTIONS, LTD. (A development stage company) Notes to Financial Statements March 31, 2003 (Expressed in U.S. Dollars) - -------------------------------------------------------------------------------- 4. Income Taxes As at March 31, 2003, the Company has estimated net operating losses carryforward for tax purposes of $13,000. This amount may be applied against future federal taxable income. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management's judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in current income. The tax effects of temporary differences that give rise to the Company's deferred tax asset (liability) are as follows: --------------------------------------------------------------------------- Tax loss carry forwards $ 4,550 Valuation allowance (4,550) --------------------------------------------------------------------------- $ - =========================================================================== 5. Related Party Transactions and Commitments On March 2, 2003, the Company entered into two purchase agreements with a director of the Company to acquire two literary materials. Pursuant to the agreements, the Company is granted an option, for a period of one year, to acquire all right, title and interest for above two literary materials. The consideration for the option of acquisition is $2,500 for each of the literary material. As at March 31,2003, this amount remained unpaid. The considerations for the two literary materials are $10,000 and $20,000 respectively plus contingent compensation, which is payable to the vendor based on certain milestone reached, if any, by the company. F-9 PART II - INFORMATION NOT REQUIRED IN PROSPECTUS Item 24. Indemnification of Directors and Officers. The statutes, charter provisions, bylaws, contracts or other arrangements under which controlling persons, directors or officers of the registrant are insured or indemnified in any manner against any liability which they may incur in such capacity are as follows: (a) Section 78.751 of the Nevada Business Corporation Act provides that each corporation shall have the following powers: 1. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no lo contendere or its equivalent, does not, of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. 2. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction, determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. 3. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, he must be indemnified by the corporation against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense. 4. Any indemnification under subsections 1 and 2, unless ordered by a court or advanced pursuant to subsection 5, must be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made: II-1 (a) By the stockholders; (b) By the board of directors by majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding; (c) If a majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding so orders, by independent legal counsel, in a written opinion; or (d) If a quorum consisting of directors who were not parties to the act, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. 5. The certificate or articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law. 6. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section: (a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the certificate or articles of incorporation or any bylaw, agreement, vote of stockholders of disinterested directors or otherwise, for either an action in his official capacity or an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to subsection 2 or for the advancement of expenses made pursuant to subsection 5, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. (b) Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person. 7. The registrant's Articles of Incorporation limit liability of its Officers and Directors to the full extent permitted by the Nevada Business Corporation Act. Item 25. Other Expenses of Issuance and Distribution. The following table sets forth the estimated costs and expenses we will pay in connection with the offering described in this registration statement: Amount (1) ----------- SEC Registration fee $ 15.00 Blue Sky fees and expenses $ 2,500.00 Printing and shipping expenses $ 1,000.00 Accounting fees and expenses $ 3,000.00 Legal fees $ 10,000.00 Transfer and Miscellaneous expenses $ 3,485.00 ----------- Total (1) $ 20,000.00 (1) All expenses, except SEC registration fees, are estimated. II-2 Item 26. Recent Sales of Unregistered Securities. On March 23, 2003, 6,000,000 restricted common shares were issued to our president, treasurer and director, Thomas E. Mills, in exchange for a cash payment on behalf of the Company of $600. The shares were issued without registration under the Securities Act of 1933 in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. No general solicitation was made in connection with the offer or sale of these securities. On March 26, 2003, 2,000,000 restricted common shares were issued to our vice president, secretary and Director, Fidel Thomas, in exchange for a cash payment on behalf of the Company of $200. The shares were issued without registration under the Securities Act of 1933 in reliance on an exemption from registration provided by Section 4(2) of the Securities Act. No general solicitation was made in connection with the offer or sale of these securities. Item 27. Exhibits Exhibit No. Document 3.1 Articles of Incorporation 3.2 Bylaws 5.1 Legal opinion 10.1 Promissory Note 10.2 Option to Purchase Agreement "Pelicula" 10.3 Option to Purchase Agreement "Code Blue" 23.1 Consent of Accountant 23.2 Consent of Counsel (contained in Exhibit 5.1) 99.1 Specimen Subscription Agreement Item 28. Undertakings. Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred to that section. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to its Articles of Incorporation or provisions of the Nevada Business Corporations Act, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question, whether or not such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. We hereby undertake to: (1) File, during any period in which we offer or sell securities, a post-effective amendment to this registration statement to: II-3 (a) Include any prospectus required by section 10(a)(3) of the Securities Act; (b) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (c) Include any additional or changed material information on the plan of distribution. (2) For determining liability under the Securities Act treat each post-effective amendment as a new registration statement of the securities offered and the offering of the securities at that time to be the initial bona fide offering. (3) File a post effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. II-4 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 Registration Statement and authorized this registration to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, Province of British Columbia, Canada, on June 5, 2003. AMP PRODUCTIONS, LTD. /s/Thomas E. Mills --------------------------- By: Thomas E. Mills President and Treasurer In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed by the following person in the capacities and on the dates stated: /s/Thomas E. Mills Date: June 5, 2003 --------------------------------- By: Thomas E. Mills President and Treasurer, Director (Principal Executive, Financial and Accounting Officer) /s/Fidel Thomas Date: June 5, 2003 --------------------------------- By: Fidel Thomas, Vice President, Secretary, Director EX-3 3 ex31forsb2.txt Exhibit 3.1 ARTICLES OF INCORPORATION OF AMP Productions, Ltd. FIRST. The name of the corporation is: AMP Productions, Ltd. SECOND. Its registered office in the State of Nevada is located at 2533 North Carson Street, Carson City, Nevada 89706 that this Corporation may maintain an office, or offices, in such other place within or without the State of Nevada as may be from time to time designated by the Board of Directors, or by the By-Laws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of Directors and Stockholders, outside the State of Nevada as well as within the State of Nevada THIRD. The objects for which this Corporation is formed are: To engage in any lawful activity, including, but not limited to the following: (A) Shall have such rights, privileges and powers as may be conferred upon corporations by any existing law. (B) May at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized. (C) Shall have power to have succession by its corporate name for the period limited in its certificate or articles of incorporation, and when no period is limited, perpetually, or until dissolved and its affairs wound up according to law. (D) Shall have power to sue and be sued in any court of law or equity. (E) Shall have power to make contracts. (F) Shall have power to hold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same by devise or bequest in the State of Nevada, or in any other state, territory or country. (G) Shall have power to appoint such officers and agents as the affairs of the corporation shall require, and to allow them suitable compensation. (H) Shall have power to make By-Laws not inconsistent with the constitution or laws of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders. (I) Shall have power to wind up and dissolve itself, or be wound up or dissolved. (J) Shall have power to adopt and use a common seal or stamp, and alter the same at pleasure. The use of a seal or stamp by the corporation on any corporate documents is not necessary. The corporation may use a seal or stamp, if it desires, but such use or nonuse shall not in any way affect the legality of the document. (K) Shall have power to borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object. (L) Shall have power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bonds, securities or evidences of the indebtedness created by, any other corporation or corporations of the State of Nevada, or any other state or government, and, while owners of such stock, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any. (M) Shall have power to purchase, hold, sell and transfer shares of its own capital stock, and use therefor its capital, capital surplus, surplus, or other property or fund. (N) Shall have power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in the State of Nevada, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries. (0) Shall have power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its certificate or articles of incorporation, or any amendment thereof, or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, whether or not such business is similar in nature to the objects set forth in the certificate or articles of incorporation of the corporation, or any amendment thereof. (P) Shall have power to make donations for the public welfare or for charitable, scientific or educational purposes. (Q) Shall have power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities, as may be allowed by law. FOURTH. That the total number of common stock authorized that may be issued by the Corporation is ONE HUNDRED MILLION (100,000,000) shares of stock with a par value of ONE HUNDREDTH OF A CENT ($0.0001), no other class of stock shall be authorized. FIFTH. The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the By-Laws of this Corporation, providing that the number of directors shall not be reduced to fewer than one (1). The name and post office address of the first board of Directors shall be one (1) in number and listed as follows: NAME POST OFFICE ADDRESS ---- ------------------- Brent Buscay 2533 North Carson Street Carson City, Nevada 89706 SIXTH. The capital stock, after the amount of the subscription price, or par value, has been paid in, ----- shall not be subject to assessment to pay the debts of the corporation. SEVENTH. The name and post office address of the Incorporator signing the Articles of Incorporation is ------- as follows: NAME POST OFFICE ADDRESS ---- ------------------- Brent Buscay 2533 North Carson Street Carson City, Nevada 89706 EIGHTH. The resident agent for this corporation shall be: LAUGHLIN INTERNATIONAL, INC. The address of said agent, and, the registered or statutory address of this corporation in the state of Nevada, shall be: 2533 North Carson Street Carson City, Nevada 89706 NINTH. The corporation is to have perpetual existence. TENTH. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter or amend the By-Laws of the Corporation. To fix the amount to be reserved as working capital over and above its capital stock paid in; to authorize and cause to be executed, mortgages and liens upon the real and personal property of this Corporation. By resolution passed by a majority of the whole Board, to designate one (1) or more committees, each committee to consist of one or more of the Directors of the Corporation, which, to the extent provided in the resolution, or in the By-Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee, or committees, shall have such name, or names, as may be stated in the By-Laws of the Corporation, or as may be determined from time to time by resolution adopted by the Board of Directors. When and as authorized by the affirmative vote of the Stockholders holding stock entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of Directors deems expedient and for the best interests of the Corporation. ELEVENTH. No shareholder shall be entitled as a matter of right to subscribe for or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock, but such additional shares of stock or other securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as in its discretion it shall deem advisable. TWELFTH. No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification. THIRTEENTH. This Corporation reserves the right to amend, alter, change or repeal any provision contained in the Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon Stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set my hand this February 27, 2003. /s/ Brent Buscay Brent Buscay EX-3 4 ex32forsb2.txt Exhibit 3.2 AMP Productions, Ltd. BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS - ---------------------------------------- 1. Shareholders' Meetings shall be held in the office of the corporation, at Carson City, NV, or at such other place or places as the Directors shall, from time to time, determine. 2. The annual meeting of the shareholders of this corporation shall be held at 11:00 a.m., on the 15 day of March of each year beginning in 2003, at which time there shall be elected by the shareholders of the corporation a Board of Directors for the ensuing year, and the shareholders shall transact such other business as shall properly come before them. If the day fixed for the annual meeting shall be a legal holiday such meeting shall be held on the next succeeding business day. 3. A notice signed by any Officer of the corporation or by any person designated by the Board of Directors, which sets forth the place of the annual meeting, shall be personally delivered to each of the shareholders of record, or mailed postage prepaid, at the address as appears on the stock book of the corporation, or if no such address appears in the stock book of the corporation, to his last known address, at least ten (10) days prior to the annual meeting. Whenever any notice whatever is required to be given under any article of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time of the meeting of the shareholders, shall be deemed equivalent to proper notice. 4. A majority of the shares issued and outstanding, either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the shareholders. 5. If a quorum is not present at the annual meeting, the shareholders present, in person or by proxy, may adjourn to such future time as shall be agreed upon by them, and notice of such adjournment shall be mailed, postage prepaid, to each shareholder of record at least ten (10) days before such date to which the meeting was adjourned; but if a quorum is present, they may adjourn from day to day as they see fit, and no notice of such adjournment need be given. 6. Special meetings of the shareholders may be called at anytime by the President; by all of the Directors provided there are no more than three, or if more than three, by any three Directors; or by the holder of a majority share of the capital stock of the corporation. The Secretary shall send a notice of such called meeting to each shareholder of record at least ten (10) days before such meeting, and such notice shall state the time and place of the meeting, and the object thereof. No business shall be transacted at a special meeting except as stated in the notice to the shareholders, unless by unanimous consent of all shareholders present, either in person or by proxy. 7. Each shareholder shall be entitled to one vote for each share of stock in his own name on the books of the corporation, whether represented in person or by proxy. 8. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting. 9. The following order of business shall be observed at all meetings of the shareholders so far as is practicable: a. Call the roll; b. Reading, correcting, and approving of the minutes of the previous meeting; c. Reports of Officers; d. Reports of Committees; e. Election of Directors; f. Unfinished business; and g. New business. 10. Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action to be taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE II STOCK - ----------------------- 1. Certificates of stock shall be in a form adopted by the Board of Directors and shall be signed by the President and Secretary of the corporation. 2. All certificates shall be consecutively numbered; the name of the person owning the shares represented thereby, with the number of such shares and the date of issue shall be entered on the company's books. 3. All certificates of stock transferred by endorsement thereon shall be surrendered by cancellation and new certificates issued to the purchaser or assignee. 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation. 5. The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of this state. ARTICLE III DIRECTORS - --------------------------- 1. A Board of Directors, consisting of at least one (1) person shall be chosen annually by the shareholders at their meeting to manage the affairs of the corporation. The Directors' term of office shall be one (1) year, and Directors may be re-elected for successive annual terms. 2. Vacancies on the Board of Directors by reason of death, resignation or other causes shall be filled by the remaining Director or Directors choosing a Director or Directors to fill the unexpired term. 3. Regular meetings of the Board of Directors shall be held at 1:00 p.m., on the 18th day of December of each year beginning in 2003 at the office of the company at Carson City, NV, or at such other time or place as the Board of Directors shall by resolution appoint; special meetings may be called by the President or any Director giving ten (10) days notice to each Director. Special meetings may also be called by execution of the appropriate waiver of notice and called when executed by a majority of the Directors of the company. A majority of the Directors shall constitute a quorum. 4. The Directors shall have the general management and control of the business and affairs of the corporation and shall exercise all the powers that may be exercised or performed by the corporation, under the statutes, the Articles of Incorporation, and the By-Laws. Such management will be by equal vote of each member of the Board of Directors with each Board member having an equal vote. 5. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Directors. 6. A resolution, in writing, signed by all or a majority of the members of the Board of Directors, shall constitute action by the Board of Directors to effect therein expressed, with the same force and effect as though such resolution had been passed at a duly convened meeting; and it shall be the duty of the Secretary to record every such resolution in the Minute Book of the corporation under its proper date. 7. Any or all of the Directors may be removed for cause by vote of the shareholders or by action of the Board. Directors may be removed without cause only by vote of the shareholders. 8. A Director may resign at any time by giving written notice to the Board, the President or the Secretary of the corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such Officer, and the acceptance of the resignation shall not be necessary to make it effective. 9. A Director of the corporation who is present at a meeting of the Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. ARTICLE IV OFFICERS - -------------------------- 1. The Officers of this company shall consist of: a President, one or more Vice Presidents, Secretary, Treasurer, and such other officers as shall, from time to time, be elected or appointed by the Board of Directors. 2. The PRESIDENT shall preside at all meetings of the Directors and the shareholders and shall have general charge and control over the affairs of the corporation subject to the Board of Directors. He shall sign or countersign all certificates, contracts and other instruments of the corporation as authorized by the Board of Directors and shall perform all such other duties as are incident to his office or are required by him by the Board of Directors. 3. The VICE PRESIDENT shall exercise the functions of the President during the absence or disability of the President and shall have such powers and such duties as may be assigned to him, from time to time, by the Board of Directors. 4. The SECRETARY shall issue notices for all meetings as required by the By-Laws, shall keep a record of the minutes of the proceedings of the meetings of the shareholders and Directors, shall have charge of the corporate books, and shall make such reports and perform such other duties as are incident to his office, or properly required of him by the Board of Directors. He shall be responsible that the corporation complies with Section 78.105 of the Nevada Revised Statutes and supplies to the Nevada Resident Agent or Registered Office in Nevada, any and all amendments to the corporation's Articles of Incorporation and any and all amendments or changes to the By-Laws of the corporation. In compliance with Section 78.105, he will also supply to the Nevada Resident Agent or Registered Office in Nevada, and maintain, a current statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete Post Office address, including street and number, if any, where such stock ledger or duplicate stock ledger is kept. 5. The TREASURER shall have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the Board of Directors, making proper vouchers for such disbursements and shall render to the Board of Directors, from time to time, as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform all duties incident to his office or which are properly required of him by the Board of Directors. 6. The RESIDENT AGENT shall be in charge of the corporation's registered office in the State of Nevada, upon whom process against the corporation may be served and shall perform all duties required of him by statute. 7. The salaries of all Officers shall be fixed by the Board of Directors and may be changed, from time to time, by a majority vote of the Board. 8. Each of such Officers shall serve for a term of one (1) year or until their successors are chosen and qualified. Officers may be re-elected or appointed for successive annual terms. 9. The Board of Directors may appoint such other Officers and Agents, as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determine4, from time to time, by the Board of Directors. 10. Any Officer or Agent elected or appointed by the Directors may be removed by the Directors whenever in their judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. 11. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Directors for the unexpired portion of the term. ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS - ----------------------------------------------------------- The corporation shall indemnify any and all of its Directors and Officers, and its former Directors and Officers, or any person who may have served at the corporation's request as a Director or Officer of another corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been Director(s) or Officer(s) of the corporation, or of such other corporation, except, in relation to matters as to which any such Director or Officer or former Director or Officer or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under By-Law, agreement, vote of shareholders or otherwise. ARTICLE VI DIVIDENDS - --------------------------- The Directors may, from time to time, declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law. ARTICLE VII WAIVER OF NOTICE - ---------------------------------- Unless otherwise provided by law, whenever any notice is required to be given to any shareholder or Director of the corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE VIII AMENDMENTS - ---------------------------- 1. Any of these By-Laws may be amended by a majority vote of the shareholders at any annual meeting or at any special meeting called for that purpose. 2. The Board of Directors may amend the By-Laws or adopt additional By-Laws, but shall not alter or repeal any By-Laws adopted by the shareholders of the company. CERTIFIED TO BE THE BY-LAWS OF: AMP PRODUCTIONS LTD. BY: /s/ Fidel Thomas Secretary EX-5 5 ex51forsb2.txt Exhibit 5.1 Bartel Eng & Schroder 300 Capitol Mall, Suite 1100 Sacramento, CA 95818 June 11, 2003 Board of Directors AMP Productions, Ltd. 2708-939 Homer Street Vancouver, BC V6B 2W6 Re: Common Stock of AMP Productions, Ltd. Registration Statement on Form SB-2 Gentlemen: We act as special counsel to AMP Productions, Ltd. (the "Company"), a Nevada corporation, in connection with the registration under the Securities Act of 1933, as amended (the "Securities Act"), of 1,750,000 shares of the Company's Common Stock (the "Shares"), as further described in a registration statement on Form SB-2 filed under the Securities Act (the "Registration Statement"). For the purpose of rendering this opinion, we examined originals or photostatic copies of such documents as we deemed to be relevant. In conducting our examination, we assumed, without investigation, the genuineness of all signatures, the correctness of all certificates, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies, and the accuracy and completeness of all records made available to us by the Company. In addition, in rendering this opinion, we assumed that the Shares will be offered in the manner and on the terms identified or referred to in the prospectus, including all amendments thereto. Our opinion is limited solely to matters set forth herein. We express no opinion as to the laws of any other jurisdiction other than the laws of Nevada and the United States. Based upon and subject to the foregoing, after giving due regard to such issues of law as we deemed relevant, and assuming that (i) the Registration Statement becomes and remains effective, and the prospectus which is part thereof (the "Prospectus"), and the Prospectus delivery procedures with respect thereto, fulfill all of the requirements of the Securities Act, throughout all periods relevant to the opinion, and (ii) all offers and sales of the Shares have been and will be made in compliance with the securities laws of the states, having jurisdiction thereof, we are of the opinion that the Shares offered by the Company upon the receipt of the consideration set forth in the Registration Statement will have been validly issued, fully paid, and non-assessable. June 11, 2003 Page 2 We hereby consent to the use of our opinion as an exhibit to the Registration Statement and to the references made to us in the Prospectus under the captions "Legal Matters." By giving such consent, we do not thereby admit that we come within the category of persons where consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission. Sincerely yours, /s/ BARTEL ENG & SCHRODER EX-10 6 ex101forsb2.txt Exhibit 10.1 PROMISSORY NOTE $10,000 USD Vancouver, British Columbia March 10, 2003 FOR VALUE RECEIVED, the undersigned, promises to pay to the order of 396147 B.C. Ltd. at, or at such other place as the holder of this Note may from time to time designate, the principal sum of TEN THOUSAND DOLLARS ($10,000) with interest on the unpaid principal balance from time to time outstanding at the rate of THREE PERCENT (3%) per annum until paid, commencing on the date hereof. Principal and interest under this Note shall be due and payable on March 3, 2005, on which day all principal then remaining unpaid and all accrued but unpaid interest shall be payable in full. The undersigned agrees that time is of the essence and that in the event payment of principal under this Note is not made when due, giving effect to any grace period which may be applicable, the outstanding principal balance hereof shall immediately bear interest at the rate of THREE PERCENT (3%) per annum for so long as such event of default continues. All agreements between the undersigned and the holder of this Note are expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid to the holder hereof for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permissible under any law which a court of competent jurisdiction may deem applicable hereto. If, from any circumstances whatsoever, fulfillment of any provision hereof or any instrument securing this Note or any other agreement referred to herein, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any circumstances the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest. This provision shall control every other provision of all agreements between the undersigned and the holder hereof. If this Note is not paid when due, whether at maturity or by acceleration, the undersigned promises to pay all costs of collection by the holder hereof on account of such collection, whether or not suit is filed hereon or thereon; such costs and expenses shall include, without limitation, all costs, expenses and attorneys' fees actually incurred by the holder hereof in connection with any insolvency, bankruptcy, arrangement or other similar proceedings involving the undersigned, or involving any endorser or guarantor hereof, which in any way affects the exercise by the holder hereof of its rights and remedies under this Note or under any mortgage, deed of trust, security agreement, guaranty or other agreement securing or pertaining to this Note. As used herein, "actual attorneys' fees" or "attorneys' fees actually incurred" means the full and actual cost of any legal services actually performed in connection with the matter for which such fees are sought calculated on the basis of the usual fees charged by the attorneys performing such services, and shall not be limited to "reasonable attorneys' fees" as that term may be defined in statutory or decisional authority. Presentment, demand, protest, notices of protest, dishonor and nonpayment of this Note and all notices of every kind are hereby waived by all parties to this Note, whether the undersigned, principal, surety, guarantor or endorser, except as provided herein. To the extent permitted by applicable law, the defense of the statute of limitations is hereby waived by the undersigned. Principal and interest evidenced hereby are payable only in lawful money of the United States. The receipt of a cheque shall not, in itself, constitute payment hereunder unless and until paid in good funds. This Note is to be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada as they may apply therein. In any action brought under or arising out of this Note, the undersigned hereby consents to the in personam jurisdiction of the Supreme Court of British Columbia sitting in Vancouver, British Columbia, waives any claim or defense that such forum is not convenient or proper, and consents to service of process by any means authorized by British Columbia law. THE UNDERSIGNED HEREBY WAIVES, AND COVENANTS THAT THE UNDERSIGNED WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS NOTE, THE SUBJECT MATTER HEREOF OR ANY DOCUMENT RELATING HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR IN TORT OR OTHERWISE. IN WITNESS WHEREOF, Payor has caused this Promissory Note to be signed on the date first above written. SIGNED SEALED and DELIVERED by ) AMP Productions, Ltd. in the presence of: ) AMP Productions, Ltd. ) Name: Fidel Thomas ) ) Address: 8-534 Cambie Street, ) Vancouver, BC V6B 2N7 ) per: /s/Thomas Mills ) Thomas Mills Occupation: Businessman ) President EX-10 7 ex102forsb2.txt Exhibit 10.2 OPTION TO PURCHASE AGREEMENT THIS AGREEMENT, made effective this 2nd day of March, 2003 BETWEEN: FIDEL THOMAS, a natural person residing at 8-534 Cambie Street, Vancouver, BC V6B 2N7 ("Owner") AND: AMP PRODUCTIONS, LTD., a British Columbia corporation having an office at 2708-939 Homer Street, Vancouver, BC V6B 2W6 ("Purchaser") WHEREAS, Owner is the sole and exclusive owner throughout the universe of all certain rights in and to that certain screenplay titled "PELICULA", written by Fidel Thomas (the "Literary Material"); AND WHEREAS, Purchaser desires to acquire the exclusive option to acquire all rights in and to the Literary Material with consideration and in reliance upon the Owner's representations and warranties as set forth herein. NOW THEREFORE, in consideration of the mutual covenants and promises contained herein the parties agree as follows: 1. OPTION Owner hereby grants to Purchaser, its successors and assigns an exclusive and irrevocable option (the "Option") effective for a period of one year commencing on the above-written effective date of this Agreement (the "Initial Option Period") the option to acquire all right, title and interest (including all copyrights, and renewals and extensions thereof) and all theatrical, television, video and allied rights (the "Rights") as more particularly defined in the Literary Purchase Agreement, a true copy of which is attached hereto and marked as Exhibit "A" to this Agreement (the "Purchase Agreement"). The Option Period may be extended for an additional period of one year by the payment of TWO THOUSAND, FIVE HUNDRED DOLLARS ($2,500) (the "Extension Payment") to the Owner on or before the expiration of the Initial Option Period ("Second Option Period"). 2. AUTOMATIC EXTENSION OF OPTION PERIOD The Option Period shall automatically be suspended and extended for the duration of any period during which a claim (which if sustained would constitute a breach of the Owner's warranties and representations herein or would in any way diminish Purchaser's full exercise of the rights granted herein) with respect to the Literary Material or the Rights has been asserted and remains unresolved, and during any period during which Purchaser's development or production activities based on the Literary Material or the Rights are interrupted or postponed by any occurrence of an event of force majeure (as this term is understood in the motion picture and television industries). 3. FEE FOR OPTION As full consideration for the Rights granted during the Initial Option Period, Purchaser agrees to pay Owner, the sum of TWO THOUSAND, FIVE HUNDRED DOLLARS ($2,500). 4. EXERCISE OF OPTION Purchaser may exercise the Option at any time during the Option Period by delivery to Owner of: (a) notice of the exercise of the Option; (b) payment to Owner of the amount described and set out in paragraph 6 of the Literary Purchase Agreement (the "Purchase Price"), less the amount(s) previously paid to Owner for the Initial Option Period or the Second Option Period (if applicable) within five days of notice of the exercise of the Option; and (c) a fully-executed original of the Purchase Agreement in the same form attached as Exhibit "A", dated as of the effective date of the exercise of the Option. If Purchaser does not exercise the Option, then the sums paid to Owner pursuant to this Agreement shall be and remain the sole property of the Owner without any further obligation owed to the Purchaser in respect thereof. 5. RIGHTS DURING THE OPTION PERIOD At any time during the Option Period, Purchaser may enter into conditional agreements relative to the financing or distribution of any production based on the Literary Material or any of the Rights. Furthermore, Purchaser shall have the right, but not the obligation, to do any and all other acts normally done by Purchasers in the entertainment industry in relation to the development and pre-production stages of a production. 6. FURTHER INSTRUMENTS At Purchaser's request, Owner shall promptly sign or cause the signature of any and all additional documents, including without limitation, the Purchase Agreement, a Short Form Assignment and a Certificate of Authorship in the same forms attached to this Option to the Purchase Agreement as Exhibits A, B and C respectively, and will perform or cause the performance of any other acts which Purchaser may reasonably deem necessary or desirable to effectuate the purposes of this Agreement. Upon Owner's failure to do so promptly, Owner hereby appoints Purchaser as Owner's attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and shall be deemed a power coupled with an interest), with full power to sign and deliver such documents and with full powers of substitution and delegation. 7. REVERSION OF RIGHTS If the Purchaser does not timely exercise the Option during the Initial Option Period or the Second Option Period (if applicable) and timely pay the Purchase Price, the Option shall end and all rights vested, assigned or transferred to the Purchaser, if any, in the Literary Property or the Rights shall revert to Owner. Purchaser shall immediately execute and deliver to Owner any assignments and documents required to effectuate any reversion to the Owner. 8. OWNER'S WARRANTIES Owner hereby warrants and represents that: (a) Owner has the full right, power and authority to enter into this Agreement and to grant and assign to Purchaser the Rights and to grant to Purchaser all of the other rights granted to Purchaser herein without the consent of any third party; (b) the Literary Material is wholly original with Owner, and that with respect to any actual persons, entities or events referred to therein, is true and accurate; (c) neither the Literary Material, nor any of the other literary material written or to be written or furnished by Owner in connection with any production based on the Literary Material (the "Material") will not in any way infringe upon or violate the copyright, right of privacy or publicity, or common law rights or literary or dramatic or motion picture rights of, or to the best of the Owner's knowledge constitutes a libel or defamation against, or invasion of the rights of privacy or any other rights of any party whatsoever; (d) Owner owns all of the right, title and interest (including without limitation, the copyright throughout the world) in and to the Literary Material free and clear of any liens, encumbrances and other third party interests of any kind, and free of any claims or litigation, whether pending or threatened which might in an way prejudice, interrupt or interfere with the use by Purchaser of any of the rights granted herein to Purchaser; (e) Owner has not entered into and will not enter into any agreement selling, assigning, transferring, licensing, granting, encumbering, derogating from or otherwise affecting the Rights or any of the rights granted herein to Purchaser; (f) the Literary Material has not previously been exploited in any manner, whether as a motion picture, television production, play or otherwise, and no rights have been granted to third parties to do so; and (g) The Literary Material may be validly copyrighted and registered for copyright in Canada and the United States and may similarly be protected elsewhere so far as the laws of other countries provide for such protection, and no party of the Literary Material is in the public domain and Owner will take all steps necessary to prevent the work from falling into the public domain. 9. INDEMNIFICATION Owner and Purchaser each agree to indemnify and hold harmless the other party, its successors, licensees and assigns, from any losses, damages, liabilities, claims, costs and expenses, including reasonable legal fees, arising as a result of any breach of any warranty, undertaking or representation made in this Agreement. 10. ASSIGNMENT Purchaser may at any time license, assign or transfer this Agreement or any of the rights granted to Purchaser hereunder, but no such assignment shall relieve Purchaser of its obligations hereunder without Owner's prior written consent, which shall not be unreasonably withheld. Owner may not license, assign or transfer this Agreement or any of the rights granted to Owner hereunder, except that Owner may assign the right to receive payments hereunder. 11. NO OBLIGATION TO EXPLOIT Nothing contained in this Agreement shall be construed as requiring Purchaser to exercise or exploit, or to continue to exercise or exploit, any of the Rights granted hereunder. 12. NOTICES All notices and payments hereunder shall be in writing and shall be given either by personal delivery, telegram, telex (toll prepaid) or by registered, certified or Express mail (postage prepaid), or by nationally recognized overnight delivery service (delivery fee prepaid) to the appropriate party at the address listed below, or at such other address as such party shall have specified by written notice hereunder, and the date of such personal delivery, mailing, telegraphing, telexing, or deposit for delivery shall be the date of the giving of such notice. All notices due Owner under this Agreement will be sent in care of, and all moneys due Owner under this Agreement will be paid to Owner or if designated by the Owner, the Owner's agent, and the receipt by said agents will be a good and valid discharge of such indebtedness. All notices and payments hereunder shall be made to the appropriate party at the following address: if to the Owner: - ---------------- 8-534 Cambie Street Vancouver, BC V6B 2N7 if to the Purchaser: - -------------------- AMP Productions, Ltd. 2708-939 Homer Street Vancouver, B.C. V6B 2W6 Attention: Thomas E. Mills 13. JURISDICTION This Agreement shall be interpreted in accordance with and subject to the laws of the province of British Columbia applicable to agreements fully executed and performed therein. All sums referred to herein shall refer to currency of the United States of America. 14. ENTIRE AGREEMEN1 This Agreement and the Purchase Agreement set forth the complete understanding between the parties with respect to the Literary Material and the Rights and may not be modified except by an instrument in writing signed by both parties. IN WITNESS WHEREOF, the parties have executed this Agreement on the 2nd day of March, 2003. /s/ Fidel Thomas Fidel Thomas AMP PRODUCTIONS, LTD. per: /s/ Thomas Mills Thomas E. Mills President Exhibit "C" CERTIFICATE OF AUTHORSHIP To: AMP Productions, Ltd. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I the undersigned, Fidel Thomas, hereby certifies and warrants, subject to the terms of the Option to Purchase Agreement dated March 2, 2003, between Fidel Thomas and AMP Productions, Ltd. ("AMP") and Literary Purchase Agreement, as follows: 1. I am the original copyright holder of the original literary and dramatic work and original screenplay entitled "PELICULA" (the "Property"). 2. As the original copyright holder of the Property, I am entitled to assign the copyrights (and all extensions and renewals of copyright) in and to the Property, including the right to make such changes and uses thereof as I may from time to time determine. 3. I am the original sole owner under copyright, of all rights to the Property. 4. The Property is original and to the best of my knowledge and belief, does not defame, infringe upon or violate the rights of any person, firm or corporation, and to the best of my knowledge and belief, is not the subject of any litigation or claim, threatened, pending or otherwise, that might give rise to litigation. 5. The option to acquire the Property was exercised by AMP in accordance with the terms of the Option to Purchase Agreement. 6. I confirm I have irrevocably granted, assigned and sold to AMP, exclusively, in perpetuity and throughout the universe, all right, title and interest, of every type and sort, now known or hereinafter devised, in the Property, except for the rights which I have reserved as set forth in paragraph 5 of the Literary Purchase Agreement. 7. I confirm that I have received all payments (except for Contingent Compensation) in full owing to me by AMP pursuant to the Option Agreement and Literary Purchase Agreement. 8. I hereby waive any and all rights anywhere of "Droit Moral" or "Moral Rights of Authors" or any similar rights or principles of law which I may now or later have in the Property or any where derived therefrom. It is agreed that my consideration for the waiver of "Droit Moral" in the Property is included in the compensation which has been paid pursuant to the Option to Purchase Agreement and the Literary Purchase Agreement. 9. I agree to indemnify AMP against any breach of any of the representations and warranties contained herein. I agree to execute any other documents (paragraph 6 of the Option to Purchase Agreement) which AMP reasonably deems necessary or desirable to effectuate the purposes of the Option to Purchase Agreement. 10. AMP's rights in the Property may be assigned, transferred and/or licensed and its rights and obligations will be binding upon myself and enure to the benefit of my assignees, transferees, successors, heirs and licensees. 11. I agree, at the request and expense of AMP, to execute any documents and to do any other acts reasonably deemed necessary by AMP or its assignees or licensees to further evidence or effectuate AMP's rights as set forth in this Certificate of Authorship, the Option to Purchase Agreement and/or the Literary Purchase Agreement. Upon my failure promptly to do so, I hereby appoint AMP as attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and coupled with an interest) with full power of substitution and delegation. 12. Any remedies which I may have, against AMP arising out of any breach of any agreement, including, but not limited to, the Option to Purchase Agreement and/or the Literary Purchase Agreement, in connection with the Property and the Picture based thereon shall be limited to the right to recover damages, if any, in an action at law, and I hereby, waive any right or remedy in equity, including any right to terminate the Option to Purchase Agreement and/or the Literary Purchase Agreement or to rescind AMP's right, title and interest in and to the Property or the results and proceeds of my services or to enjoin, restrain or otherwise impair in any manner the production, distribution, advertising or any other exploitation of the Picture or any parts or elements thereof. I have caused this document to be executed as of this ______ day of ________________, 200__. ------------------------ FIDEL THOMAS Exhibit "B" SHORT FORM ASSIGNMENT OF RIGHTS KNOW ALL MEN BY THESE PRESENTS that in consideration of the payment of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, that Fidel Thomas ("Assignor") does hereby sell, license, grant, assign, convey, transfer and set over unto AMP Productions, Ltd. ("Assignee") its successors, licensees, transferees and assignees forever under copyright, the sole and exclusive motion picture rights, television motion picture and other television rights, all radio broadcasting rights, all dramatic rights on the legitimate stage and publication rights limited to 10,000 words for advertisement, publicity and rights throughout the world in perpetuity in and to that certain original screenplay described as follows: Title: "PELICULA" Written by: FIDEL THOMAS including all titles, elements, themes, stories, plots, incidents, music, lyrics, arrangements, choreography, dialogue, characters, character names, action revisions, dramatizations, sequels and their parts and components contained therein, now or hereafter in existence, as well as all copies of any and all manuscripts thereof, and all versions and translations thereof and in and to the copyrights thereof and all renewals and extensions of such copyrights. The Assignor and the Assignee have entered into a certain Literary Purchase Agreement dated the 2nd day of March, 2003 between Assignor and Assignee wherein the rights so assigned are more fully described. This agreement is made expressly subject to the terms and conditions of the said agreement. IN WITNESS WHEREOF the undersigned has executed this assignment this 2nd day of March, 2003. -------------------- FIDEL THOMAS On this ____ day of ____________, 2003, before me, the undersigned, a Notary Public in the Province of British Columbia, appeared before me Fidel Thomas and he then demonstrated to me that he is the person whose name is subscribed to in the within instrument and he acknowledged to me that he had executed the same in his own capacity. WITNESS by hand and an official seal. ----------------------------- Notary Public Exhibit "A" LITERARY PURCHASE AGREEMENT This Agreement made effective the 2nd day of March, 2003, is by and between Fidel Thomas, a writer presently residing at 8-534 Cambie Street, Vancouver, British Columbia V6B 2N7 ("Owner") and AMP Productions Ltd. a company incorporated pursuant to the law of the province of British Columbia having a place of business located at 2708-939 Homer Street, Vancouver, BC V6B 2W6 ("Purchaser"). WHEREAS: A. Owner is the sole and exclusive owner throughout the world of all rights in and to the original screenplay titled "PELICULA" written by the Owner (the "Literary Material"). B. The Literary Material and the plots, themes, titles, characters and copyright thereof, and any translations, dramatizations and other adaptations or versions thereof now or hereafter created, are herein collectively referred to as the "Property". C. Purchaser wants to acquire the Rights in consideration for the purchase price provided herein and in reliance upon Owner's representations and warranties. NOW, THEREFORE, in consideration of the mutual covenants contained herein the parties agree as follows: 1. RIGHTS GRANTED Owner hereby sells, grants, conveys and assigns to Purchaser its successors, licensees and assigns exclusively and forever, all right, title and interest of any nature including, but not limited to, all motion picture rights, all rights for advertisement, publicity and exploitation purposes, and certain incidental and allied rights, throughout the world, in and to the Property and in and to the copyright of the Property and all renewals and extensions of copyright. The rights granted to Purchaser hereunder (without limiting the grant of rights herein) are the following exclusive rights throughout the world (hereinafter collectively referred to as the "Rights"): (a) All theatrical motion picture, non-theatrical motion picture, all forms of the medium known as television, radio, home video, audio-visual devices, remakes, sequels, publishing, soundtrack, music, merchandizing and legitimate stage rights, all copyrights therein and thereto (including all renewals and extensions) and all other allied or ancillary uses including the right to produce, distribute, advertise and publicize the Property, exclusively and perpetually throughout the world and in all forms of media known or hereinafter devised; (b) To broadcast, transmit or reproduce the Property or any adaptation or version of it (including without limitation any motion picture produced hereunder and/or any script or other material based on or using the Property or any of the characters, themes or plots of it), by means of television or any process analogous thereto whether now known or from now on devised (including commercially sponsored, sustaining and subscription or pay-per-view television), by motion pictures produced on films or by means of magnetic tape, wire, disc, audio-visual cartridge or any other device now known or from now on devised and including such television productions presented in series or serial form, and the exclusive right generally to exercise for television purposes all the Rights granted to Purchaser hereunder for motion picture purposes. (c) To publish and copyright or cause to be published and copyrighted in the name of Purchaser or its nominee in any languages throughout the world, in any form or media, synopses, serializations, dramatizations, abridged and revised versions of the Property or adapted from the Property or from any motion picture or version of the Property for advertising, publicizing and exploiting any such motion picture and/or other version. (d) For the foregoing purposes to use all or any part of the Property and any of the characters, plots, themes and ideas contained therein, and the title of the Property and any title or subtitle or any component of the Property, and to use said titles or subtitles for any motion picture or other version of adaptation whether the same is based on or adapted from the Property or as the title of any musical composition contained in any such motion picture or other version or adaptation. (e) To use and exploit commercial or merchandise tie-ups and recordings of any sort and nature arising out of or connected with the Property and its motion picture or other versions and the title or titles of it and characters of it and their names or characteristics. The Rights herein granted to the Purchaser shall be cumulative and Purchaser may exercise or use any or all of the Rights simultaneously with or in connection with or separately and apart from the exercise of any other of said Rights. The terms "Picture" and "Pictures" as used herein shall be deemed to mean or include any present or future kind of motion picture production based upon the Property, with or without sound recorded and reproduced synchronously with it, whether the same is produced on film or by any other method or means now or from now on used for the production, exhibition or transmission of any kind of motion picture productions. 2. RIGHT TO MAKE CHANGES Owner agrees that Purchaser shall have the right to vary, change, alter, modify, add to and delete from the Property, and to rearrange and transpose the Property and change the sequence of it and the characters and descriptions of the characters contained in the Property, and to use a portion or portions of the Property or the characters, plots, or theme of it with any other literary, dramatic or other material of any kind. 3. Reserved. 4. DURATION AND EXTENT OF RIGHTS GRANTED Purchaser shall enjoy, solely and exclusively, all the Rights granted hereunder throughout the universe, in perpetuity, as long as any Rights in the Property are recognized in law or equity. All Rights granted herein to Purchaser are 1 irrevocable and not subject to rescission, restraint or injunction under any circumstances. 5. RIGHTS RESERVED Owner hereby reserves all rights of novelization of the Property as per the existing Independent Production Agreement of the Writer's Guild of Canada currently in effect at the time of the execution of this Agreement. 6. CONSIDERATION As consideration for all Rights granted and assigned to Purchaser and for Owner's representations and warranties herein contained, Purchaser agrees to pay to Owner, and Owner agrees to accept the greater of: TEN THOUSAND ($10,000) approved and bonded. The Payment of the Purchase Price shall be made to Owner within five days of the commencement of principal photography for the Picture and upon receipt by Purchaser of all necessary documentation to effect and evidence the transfer of Rights granted herein. 7. CONTINGENT COMPENSATION (a) In the event that a theatrical or television motion picture is produced by Purchaser or its assigns, based on the Property (the "Picture") and the budget of the Picture as of the first day of principal photography and as allowed by all entities financing or guaranteeing completion of the Picture, is not less than One Million, Five Hundred Thousand Dollars ($1,500,000.00), Owner shall receive additional compensation to make the Purchase Price equivalent to the Script Fee payable to a writer pursuant to the most current Independent Production Agreement of the Writer's Guild of Canada, notwithstanding that neither the Owner nor Purchaser are a member or subscriber thereof. (b) In addition to the amounts set out above, Purchaser shall pay to Owner Three percent (3%) of One Hundred percent (100%) of Purchaser's "Net Profits" of the Picture, or any television series, pilot or movie-of-the-week (as that term is used in the entertainment industry) that derives directly from the Property. "Net Profits" will be defined, computed, accounted for and paid in accordance with Purchaser's standard Net Profits definition based on the Purchaser's "break even" negative cost position after payment of all reasonable production expenses and receipt by the Purchaser of all distribution advances and gross receipts from exploitation of the Picture and the Property. 8. TURNAROUND RIGHT In the event that Purchaser does not produce a theatrical or television motion picture based on the Property within five (5) years from the date of the execution of this Agreement, Owner may re-acquire all of the Rights herein granted by payment to the Purchaser of an amount equivalent to one-half of any sums paid to Owner by the Purchaser. 9. TITLE Owner acknowledges and agrees that included among the rights granted by Owner to Purchaser hereunder is the right to use the current title of the Property or any previous title by which it was known, as the title of any motion picture or other project based upon the Property and in connection with the production, exhibition, advertising and other exploitation of any motion picture or other project based upon the Property and all subsidiary rights therein. 10. REPRESENTATIONS AND WARRANTIES Owner represents and warrants, subject to the following warranties and representations of Owner to Purchaser, Purchaser shall indemnify and hold Owner harmless from and against any claim arising out of or in connection with the development, production or distribution of any derivative work produced from the Property pursuant to the Rights granted hereunder to Purchaser as follows: (a) Owner is the sole and exclusive owner throughout the world of all rights in and to the Literary Property, the Property is not in the public domain in any country in the world where copyright protection is available and there is no outstanding claim or litigation pending against or involving the title, ownership and/or copyright in the Property, or in any part thereof, or in any rights granted herein and that all appropriate protection of such rights will continue to be maintained by Owner; (b) Owner has the full and sole right and authority to enter into this Agreement and to convey the Rights and all other rights conveyed to Purchaser as herein set forth; (c) to the best of Owner's knowledge, no motion picture or dramatic version of the Property, or any part of it, has been manufactured, produced, presented or authorized; no radio or television development, presentation, or program based on the Property, or any part of it, has been manufactured, produced, presented, broadcast or authorized; (d) none of the Rights herein granted or assigned to Purchaser have been granted or assigned, licensed or otherwise encumbered, diminished or impaired, except with respect to Purchaser and to the best of Owner's knowledge Owner has not committed, omitted to perform any act by which such rights could or will be encumbered, diminished or impaired; (e) Owner has not adapted the Property from any other literary, dramatic or other material of any kind, nature or description, nor, except material which is in the public domain, has Owner copied or used in the Property the plot, scenes, sequence or story of any other literary, dramatic or other material; the Property does not infringe upon any common law or statutory rights in any other literary, dramatic or other material; to the best of Owner's knowledge, no material contained in the Property is libelous or in violation of the right of privacy of any person; to the best of Owner's knowledge that the full utilization of any and all rights in and to the Property granted by Owner pursuant to this Agreement will not violate the rights of any person, firm or corporation. 11. INDEMNIFICATION (a) The parties hereto agree to indemnify the other against all judgments, liability, damages, penalties, losses and expense (including reasonable legal fees) which may be suffered or assumed by or obtained against the other party by reason of any breach or failure of any warranty or agreement herein made by the other party. (b) Neither party shall be liable to the other party for damages of any kind in connection with any Picture it may produce, distribute or exhibit, or for damages for any breach of this Agreement (except failure to pay the money consideration herein specified) occurring or accruing before the other party has or had reasonable notice and opportunity to adjust or correct such matters. (c) All rights, licenses and privileges herein granted to Purchaser are irrevocable and not subject to rescission, restraint or injunction under any circumstances. 12. PROTECTION OF RIGHTS GRANTED Owner hereby grants to Purchaser the free and unrestricted right, but at Purchaser's own cost and expense, to institute in the name and on behalf of Owner, or Owner and Purchaser jointly, any and all legal proceedings, to enjoin and restrain any infringements of the Rights herein granted, and hereby assigns and sets over to Purchaser any and all causes of action relative to or based upon any such infringement, as well as any and all recoveries obtained thereon; Owner shall not compromise, settle or in any manner interfere with such litigation if brought; and Purchaser agrees to indemnify and hold Owner harmless from any costs, expenses or damages which Owner may suffer as a result of any such suit or proceeding. Nothing in this Agreement will be construed as compelling or obligating the Purchaser to institute legal proceedings on behalf of Owner, or Owner and Purchaser jointly. 13. COPYRIGHT Owner shall execute any documentation that will evidence the transfer of copyright in and to the Property of the Purchaser. 14. CREDIT OBLIGATIONS Purchaser shall have the right to publish, advertise, announce and use, in any manner or medium, the name, approved biography and approved photographs or approved likenesses (such consent not unreasonably withheld) of Owner in connection with any exercise by Purchaser of the Rights hereunder, provided such use shall not constitute an endorsement of any product or service. Subject to the foregoing, Owner shall be accorded the following credits on a single card on screen and in paid ads controlled by Purchaser and in size of type (as to height, width, thickness and boldness) equal to the largest size of type in which any other person (other than a performer) is accorded credit in third to last position and size according to Purchaser's discretion in the following form: "Screenplay by Fidel Thomas" Alternatively, Owner has the right to designate a pseudonym to be used subject to the reasonable approval of the Purchaser over the pseudonym chosen (such approval not to be unreasonably withheld). Subject to the foregoing, the writers of the Story shall be accorded the following credits on a single card on screen and in paid ads controlled by Purchaser and in size of type (as to height, width, thickness and boldness) equal to the largest size of type in which any other person (other than performer's) is accorded credit in second to last position and size of Purchaser's discretion in the following form: "Story by Fidel Thomas" No other "written by", "story by" or "screenplay by" or similar writing credit shall be given to any other party. If Purchaser shall exploit any other rights in and to the Property, then Purchaser agrees to give appropriate source material credit (as set out above) to the Property, to the extent that such source material credits are customarily given in connection with the exploitation of such rights. No casual or inadvertent failure to comply with any of the provisions of this clause shall be deemed a breach of this Agreement by the Purchaser. Owner hereby expressly acknowledges that in the event of a failure or omission constituting a breach of the provisions of this paragraph, the damage (if any) caused Owner thereby is not irreparable or sufficient to entitle Owner to injunctive or other equitable relief. Consequently, Owner's rights and remedies in the event of such breach shall be limited to the right to recover damages in an action at law. Purchaser agrees to provide in its contracts with distributors of the Picture that such distributors shall honour Purchaser's contractual credit commitments and agrees to inform such distributors of the credit provisions herein. 15. INSURANCE Purchaser agrees to add Owner as an additional insured to an Errors and Omissions policy obtained for the production of any Picture based on the Property. 16. NOTICES AND PAYMENTS All notices and payments hereunder shall be made to the appropriate party at the following address: if to the Owner: - ---------------- 8-534 Cambie Street Vancouver, BC V6B 2N7 if to the Purchaser: - -------------------- AMP Productions, Ltd. 2708-939 Homer Street Vancouver, B.C. V6B 2W6 Attention: Thomas E. Mills 17. MISCELLANEOUS (a) This Agreement between the parties does not constitute a joint venture or partnership of any kind. (b) All amounts referred to in this Agreement shall refer to currency of the United States of America, unless otherwise indicated. (c) All rights, remedies, licences, undertakings, obligations, covenants, privileges and other property granted herein shall be cumulative, and Purchaser may exercise or use any of them separately or in conjunction with any one or more of the others. (d) A waiver by either party of any term or condition of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or any subsequent breach thereof. (e) If any provision of this agreement is applied to either party or any circumstances shall be adjudged by a court to be void and unenforceable, such shall in no way affect any other provision of this Agreement, the application of such provision in any other circumstance, or the validity or enforceability of this Agreement. (f) The Parties shall do any and all acts and execute any and all documents as may reasonably be required to give effect to and in accordance with this Agreement. (g) This Agreement shall be construed in accordance with the laws of the Province of British Columbia and Canada. (h) Captions are inserted for reference and convenience only and in no way define, limit or describe the scope of this Agreement or intent of any provision. (i) This Agreement contains the entire understanding of the parties relating to the subject matter, and this Agreement cannot be changed except by written Agreement executed by the party to be bound. IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the ___ day of ______________, 2003. Fidel Thomas AMP PRODUCTIONS, LTD. per: -------------------------- Thomas E. Mills President EX-10 8 ex103forsb2.txt Exhibit 10.3 OPTION TO PURCHASE AGREEMENT THIS AGREEMENT, made effective this 2nd day of March, 2003 BETWEEN: FIDEL THOMAS, a natural person residing at 8-534 Cambie Street, Vancouver, BC V6B 2N7 ("Owner") AND: AMP PRODUCTIONS, LTD., a British Columbia corporation having an office at 2708-939 Homer Street, Vancouver, BC V6B 2W6 ("Purchaser") WHEREAS, Owner is the sole and exclusive owner throughout the universe of all certain rights in and to that certain screenplay titled "CODE BLUE", written by the Owner (the "Literary Material"); AND WHEREAS, Purchaser desires to acquire the exclusive option to acquire all rights in and to the Literary Material with consideration and in reliance upon the Owner's representations and warranties as set forth herein. NOW THEREFORE, in consideration of the mutual covenants and promises contained herein the parties agree as follows: 1. OPTION Owner hereby grants to Purchaser, its successors and assigns an exclusive and irrevocable option (the "Option") effective for a period of one year commencing on the above-written effective date of this Agreement (the "Initial Option Period") the option to acquire all right, title and interest (including all copyrights, and renewals and extensions thereof) and all theatrical, television, video and allied rights (the "Rights") as more particularly defined in the Literary Purchase Agreement, a true copy of which is attached hereto and marked as Exhibit "A" to this Agreement (the "Purchase Agreement"). The Option Period may be extended for an additional period of one year by the payment of TWO THOUSAND, FIVE HUNDRED DOLLARS ($2,500) (the "Extension Payment") to the Owner on or before the expiration of the Initial Option Period ("Second Option Period"). 2. AUTOMATIC EXTENSION OF OPTION PERIOD The Option Period shall automatically be suspended and extended for the duration of any period during which a claim (which if sustained would constitute a breach of the Owner's warranties and representations herein or would in any way diminish Purchaser's full exercise of the rights granted herein) with respect to the Literary Material or the Rights has been asserted and remains unresolved, and during any period during which Purchaser's development or production activities based on the Literary Material or the Rights are interrupted or postponed by any occurrence of an event of force majeure (as this term is understood in the motion picture and television industries). 3. FEE FOR OPTION As full consideration for the Rights granted during the Initial Option Period, Purchaser agrees to pay Owner, the sum of TWO THOUSAND, FIVE HUNDRED DOLLARS ($2,500). 4. EXERCISE OF OPTION Purchaser may exercise the Option at any time during the Option Period by delivery to Owner of: (a) notice of the exercise of the Option; (b) payment to Owner of the amount described and set out in paragraph 6 of the Literary Purchase Agreement (the "Purchase Price"), less the amount(s) previously paid to Owner for the Initial Option Period or the Second Option Period (if applicable) within five days of notice of the exercise of the Option; and (c) a fully-executed original of the Purchase Agreement in the same form attached as Exhibit "A", dated as of the effective date of the exercise of the Option. If Purchaser does not exercise the Option, then the sums paid to Owner pursuant to this Agreement shall be and remain the sole property of the Owner without any further obligation owed to the Purchaser in respect thereof. 5. RIGHTS DURING THE OPTION PERIOD At any time during the Option Period, Purchaser may enter into conditional agreements relative to the financing or distribution of any production based on the Literary Material or any of the Rights. Furthermore, Purchaser shall have the right, but not the obligation, to do any and all other acts normally done by Purchasers in the entertainment industry in relation to the development and pre-production stages of a production. 6. FURTHER INSTRUMENTS At Purchaser's request, Owner shall promptly sign or cause the signature of any and all additional documents, including without limitation, the Purchase Agreement, a Short Form Assignment and a Certificate of Authorship in the same forms attached to this Option to the Purchase Agreement as Exhibits A, B and C respectively, and will perform or cause the performance of any other acts which Purchaser may reasonably deem necessary or desirable to effectuate the purposes of this Agreement. Upon Owner's failure to do so promptly, Owner hereby appoints Purchaser as Owner's attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and shall be deemed a power coupled with an interest), with full power to sign and deliver such documents and with full powers of substitution and delegation. 7. REVERSION OF RIGHTS If the Purchaser does not timely exercise the Option during the Initial Option Period or the Second Option Period (if applicable) and timely pay the Purchase Price, the Option shall end and all rights vested, assigned or transferred to the Purchaser, if any, in the Literary Property or the Rights shall revert to Owner. Purchaser shall immediately execute and deliver to Owner any assignments and documents required to effectuate any reversion to the Owner. 8. OWNER'S WARRANTIES Owner hereby warrants and represents that: (a) Owner has the full right, power and authority to enter into this Agreement and to grant and assign to Purchaser the Rights and to grant to Purchaser all of the other rights granted to Purchaser herein without the consent of any third party; (b) the Literary Material is wholly original with Owner, and that with respect to any actual persons, entities or events referred to therein, is true and accurate; (c) neither the Literary Material, nor any of the other literary material written or to be written or furnished by Owner in connection with any production based on the Literary Material (the "Material") will not in any way infringe upon or violate the copyright, right of privacy or publicity, or common law rights or literary or dramatic or motion picture rights of, or to the best of the Owner's knowledge constitutes a libel or defamation against, or invasion of the rights of privacy or any other rights of any party whatsoever; (d) Owner owns all of the right, title and interest (including without limitation, the copyright throughout the world) in and to the Literary Material free and clear of any liens, encumbrances and other third party interests of any kind, and free of any claims or litigation, whether pending or threatened which might in an way prejudice, interrupt or interfere with the use by Purchaser of any of the rights granted herein to Purchaser; (e) Owner has not entered into and will not enter into any agreement selling, assigning, transferring, licensing, granting, encumbering, derogating from or otherwise affecting the Rights or any of the rights granted herein to Purchaser; (f) the Literary Material has not previously been exploited in any manner, whether as a motion picture, television production, play or otherwise, and no rights have been granted to third parties to do so; and (g) The Literary Material may be validly copyrighted and registered for copyright in Canada and the United States and may similarly be protected elsewhere so far as the laws of other countries provide for such protection, and no party of the Literary Material is in the public domain and Owner will take all steps necessary to prevent the work from falling into the public domain. 9. INDEMNIFICATION Owner and Purchaser each agree to indemnify and hold harmless the other party, its successors, licensees and assigns, from any losses, damages, liabilities, claims, costs and expenses, including reasonable legal fees, arising as a result of any breach of any warranty, undertaking or representation made in this Agreement. 10. ASSIGNMENT Purchaser may at any time license, assign or transfer this Agreement or any of the rights granted to Purchaser hereunder, but no such assignment shall relieve Purchaser of its obligations hereunder without Owner's prior written consent, which shall not be unreasonably withheld. Owner may not license, assign or transfer this Agreement or any of the rights granted to Owner hereunder, except that Owner may assign the right to receive payments hereunder. 11. NO OBLIGATION TO EXPLOIT Nothing contained in this Agreement shall be construed as requiring Purchaser to exercise or exploit, or to continue to exercise or exploit, any of the Rights granted hereunder. 12. NOTICES All notices and payments hereunder shall be in writing and shall be given either by personal delivery, telegram, telex (toll prepaid) or by registered, certified or Express mail (postage prepaid), or by nationally recognized overnight delivery service (delivery fee prepaid) to the appropriate party at the address listed below, or at such other address as such party shall have specified by written notice hereunder, and the date of such personal delivery, mailing, telegraphing, telexing, or deposit for delivery shall be the date of the giving of such notice. All notices due Owner under this Agreement will be sent in care of, and all moneys due Owner under this Agreement will be paid to Owner or if designated by the Owner, the Owner's agent, and the receipt by said agents will be a good and valid discharge of such indebtedness. All notices and payments hereunder shall be made to the appropriate party at the following address: if to the Owner: - ---------------- 8-534 Cambie Street Vancouver, BC V6B 2N7 if to the Purchaser: - -------------------- AMP Productions, Ltd. 2708-939 Homer Street Vancouver, B.C. V6B 2W6 Attention: Thomas E. Mills 13. JURISDICTION This Agreement shall be interpreted in accordance with and subject to the laws of the province of British Columbia applicable to agreements fully executed and performed therein. All sums referred to herein shall refer to currency of the United States of America. 14. ENTIRE AGREEMEN1 This Agreement and the Purchase Agreement set forth the complete understanding between the parties with respect to the Literary Material and the Rights and may not be modified except by an instrument in writing signed by both parties. IN WITNESS WHEREOF, the parties have executed this Agreement on the 2nd day of March, 2003. /s/ Fidel Thomas Fidel Thomas AMP PRODUCTIONS, LTD. per: /s/ Thomas Mills Thomas E. Mills President Exhibit "C" CERTIFICATE OF AUTHORSHIP ------------------------- To: AMP Productions, Ltd. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I the undersigned, Fidel Thomas, hereby certifies and warrants, subject to the terms of the Option to Purchase Agreement dated March 2, 2003, between Fidel Thomas and AMP Productions, Ltd. ("AMP") and Literary Purchase Agreement, as follows: 1. I am the sole author and the original copyright holder of the original literary and dramatic work and original screenplay entitled "CODE BLUE" (the "Property"). 2. As the sole author of the Property, I am entitled to assign the copyrights (and all extensions and renewals of copyright) in and to the Property, including the right to make such changes and uses thereof as I may from time to time determine. 3. I wrote the Property by myself and not in collaboration with any other party and I am the original sole owner under copyright, of all rights to the Property. 4. The Property is original and to the best of my knowledge and belief, does not defame, infringe upon or violate the rights of any person, firm or corporation, and to the best of my knowledge and belief, is not the subject of any litigation or claim, threatened, pending or otherwise, that might give rise to litigation. 5. The option to acquire the Property was exercised by AMP in accordance with the terms of the Option to Purchase Agreement. 6. I confirm I have irrevocably granted, assigned and sold to AMP, exclusively, in perpetuity and throughout the universe, all right, title and interest, of every type and sort, now known or hereinafter devised, in the Property, except for the rights which I have reserved as set forth in paragraph 5 of the Literary Purchase Agreement. 7. I confirm that I have received all payments (except for Contingent Compensation) in full owing to me by AMP pursuant to the Option Agreement and Literary Purchase Agreement. 8. I hereby waive any and all rights anywhere of "Droit Moral" or "Moral Rights of Authors" or any similar rights or principles of law which I may now or later have in the Property or any where derived therefrom. It is agreed that my consideration for the waiver of "Droit Moral" in the Property is included in the compensation which has been paid pursuant to the Option to Purchase Agreement and the Literary Purchase Agreement. 9. I agree to indemnify AMP against any breach of any of the representations and warranties contained herein. I agree to execute any other documents (paragraph 6 of the Option to Purchase Agreement) which AMP reasonably deems necessary or desirable to effectuate the purposes of the Option to Purchase Agreement. 10. AMP's rights in the Property may be assigned, transferred and/or licensed and its rights and obligations will be binding upon myself and enure to the benefit of my assignees, transferees, successors, heirs and licensees. 11. I agree, at the request and expense of AMP, to execute any documents and to do any other acts reasonably deemed necessary by AMP or its assignees or licensees to further evidence or effectuate AMP's rights as set forth in this Certificate of Authorship, the Option to Purchase Agreement and/or the Literary Purchase Agreement. Upon my failure promptly to do so, I hereby appoint AMP as attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and coupled with an interest) with full power of substitution and delegation. 12. Any remedies which I may have, against AMP arising out of any breach of any agreement, including, but not limited to, the Option to Purchase Agreement and/or the Literary Purchase Agreement, in connection with the Property and the Picture based thereon shall be limited to the right to recover damages, if any, in an action at law, and I hereby, waive any right or remedy in equity, including any right to terminate the Option to Purchase Agreement and/or the Literary Purchase Agreement or to rescind AMP's right, title and interest in and to the Property or the results and proceeds of my services or to enjoin, restrain or otherwise impair in any manner the production, distribution, advertising or any other exploitation of the Picture or any parts or elements thereof. I have caused this document to be executed as of this ______ day of ________________, 200__. ------------------------ FIDEL THOMAS Exhibit "B" SHORT FORM ASSIGNMENT OF RIGHTS KNOW ALL MEN BY THESE PRESENTS that in consideration of the payment of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, that Fidel Thomas ("Assignor") does hereby sell, license, grant, assign, convey, transfer and set over unto AMP Productions, Ltd. ("Assignee") its successors, licensees, transferees and assignees forever under copyright, the sole and exclusive motion picture rights, television motion picture and other television rights, all radio broadcasting rights, all dramatic rights on the legitimate stage and publication rights limited to 10,000 words for advertisement, publicity and rights throughout the world in perpetuity in and to that certain original screenplay described as follows: Title: "CODE BLUE" Written by: FIDEL THOMAS including all titles, elements, themes, stories, plots, incidents, music, lyrics, arrangements, choreography, dialogue, characters, character names, action revisions, dramatizations, sequels and their parts and components contained therein, now or hereafter in existence, as well as all copies of any and all manuscripts thereof, and all versions and translations thereof and in and to the copyrights thereof and all renewals and extensions of such copyrights. The Assignor and the Assignee have entered into a certain Literary Purchase Agreement dated the 2nd day of March, 2003 between Assignor and Assignee wherein the rights so assigned are more fully described. This agreement is made expressly subject to the terms and conditions of the said agreement. IN WITNESS WHEREOF the undersigned has executed this assignment this 2nd day of March, 2003. -------------------- FIDEL THOMAS On this ____ day of ____________, 2003, before me, the undersigned, a Notary Public in the Province of British Columbia, appeared before me Fidel Thomas and he then demonstrated to me that he is the person whose name is subscribed to in the within instrument and he acknowledged to me that he had executed the same in his own capacity. WITNESS by hand and an official seal. ----------------------------- Notary Public Exhibit "A" LITERARY PURCHASE AGREEMENT This Agreement made effective the 2nd day of March, 2003, is by and between Fidel Thomas, a writer presently residing at 8-534 Cambie Street, Vancouver, British Columbia V6B 2N7 ("Owner") and AMP Productions Ltd. a company incorporated pursuant to the law of the province of British Columbia having a place of business located at 2708-939 Homer Street, Vancouver, BC V6B 2W6 ("Purchaser"). WHEREAS: A. Owner is the sole and exclusive owner throughout the world of all rights in and to the original screenplay titled "CODE BLUE" written by the Owner (the "Literary Material"). B. The Literary Material and the plots, themes, titles, characters and copyright thereof, and any translations, dramatizations and other adaptations or versions thereof now or hereafter created, are herein collectively referred to as the "Property". C. Purchaser wants to acquire the Rights in consideration for the purchase price provided herein and in reliance upon Owner's representations and warranties. NOW, THEREFORE, in consideration of the mutual covenants contained herein the parties agree as follows: 1. RIGHTS GRANTED Owner hereby sells, grants, conveys and assigns to Purchaser its successors, licensees and assigns exclusively and forever, all right, title and interest of any nature including, but not limited to, all motion picture rights, all rights for advertisement, publicity and exploitation purposes, and certain incidental and allied rights, throughout the world, in and to the Property and in and to the copyright of the Property and all renewals and extensions of copyright. The rights granted to Purchaser hereunder (without limiting the grant of rights herein) are the following exclusive rights throughout the world (hereinafter collectively referred to as the "Rights"): (a) All theatrical motion picture, non-theatrical motion picture, all forms of the medium known as television, radio, home video, audio-visual devices, remakes, sequels, publishing, soundtrack, music, merchandizing and legitimate stage rights, all copyrights therein and thereto (including all renewals and extensions) and all other allied or ancillary uses including the right to produce, distribute, advertise and publicize the Property, exclusively and perpetually throughout the world and in all forms of media known or hereinafter devised; (b) To broadcast, transmit or reproduce the Property or any adaptation or version of it (including without limitation any motion picture produced hereunder and/or any script or other material based on or using the Property or any of the characters, themes or plots of it), by means of television or any process analogous thereto whether now known or from now on devised (including commercially sponsored, sustaining and subscription or pay-per-view television), by motion pictures produced on films or by means of magnetic tape, wire, disc, audio-visual cartridge or any other device now known or from now on devised and including such television productions presented in series or serial form, and the exclusive right generally to exercise for television purposes all the Rights granted to Purchaser hereunder for motion picture purposes. (c) To publish and copyright or cause to be published and copyrighted in the name of Purchaser or its nominee in any languages throughout the world, in any form or media, synopses, serializations, dramatizations, abridged and revised versions of the Property or adapted from the Property or from any motion picture or version of the Property for advertising, publicizing and exploiting any such motion picture and/or other version. (d) For the foregoing purposes to use all or any part of the Property and any of the characters, plots, themes and ideas contained therein, and the title of the Property and any title or subtitle or any component of the Property, and to use said titles or subtitles for any motion picture or other version of adaptation whether the same is based on or adapted from the Property or as the title of any musical composition contained in any such motion picture or other version or adaptation. (e) To use and exploit commercial or merchandise tie-ups and recordings of any sort and nature arising out of or connected with the Property and its motion picture or other versions and the title or titles of it and characters of it and their names or characteristics. The Rights herein granted to the Purchaser shall be cumulative and Purchaser may exercise or use any or all of the Rights simultaneously with or in connection with or separately and apart from the exercise of any other of said Rights. The terms "Picture" and "Pictures" as used herein shall be deemed to mean or include any present or future kind of motion picture production based upon the Property, with or without sound recorded and reproduced synchronously with it, whether the same is produced on film or by any other method or means now or from now on used for the production, exhibition or transmission of any kind of motion picture productions. 2. RIGHT TO MAKE CHANGES Owner agrees that Purchaser shall have the right to vary, change, alter, modify, add to and delete from the Property, and to rearrange and transpose the Property and change the sequence of it and the characters and descriptions of the characters contained in the Property, and to use a portion or portions of the Property or the characters, plots, or theme of it with any other literary, dramatic or other material of any kind. 3. NO DROIT MORAL Owner hereby waives the benefits of any provisions of law known as the moral right of authors or "droit moral" or any similar law in any country of the world and agrees not to permit or prosecute any action or lawsuit on the ground that any Picture or other version of the Property produced or exhibited by Purchaser, its assigns or licensees, in any way constitutes an infringement of any of the Owner's "droit moral" is in any way a defamation or mutilation of the Property or any part of it or contains unauthorized variations, alterations, modifications, changes or translations. 4. DURATION AND EXTENT OF RIGHTS GRANTED Purchaser shall enjoy, solely and exclusively, all the Rights granted hereunder throughout the universe, in perpetuity, as long as any Rights in the Property are recognized in law or equity. All Rights granted herein to Purchaser are irrevocable and not subject to rescission, restraint or injunction under any circumstances. 5. RIGHTS RESERVED Owner hereby reserves all rights of novelization of the Property as per the existing Independent Production Agreement of the Writer's Guild of Canada currently in effect at the time of the execution of this Agreement. 6. CONSIDERATION As consideration for all Rights granted and assigned to Purchaser and for Owner's representations and warranties herein contained, Purchaser agrees to pay to Owner, and Owner agrees to accept the greater of: TWENTY THOUSAND ($20,000) approved and bonded. The Payment of the Purchase Price shall be made to Owner within five days of the commencement of principal photography for the Picture and upon receipt by Purchaser of all necessary documentation to effect and evidence the transfer of Rights granted herein. 7. CONTINGENT COMPENSATION (a) In the event that a theatrical or television motion picture is produced by Purchaser or its assigns, based on the Property (the "Picture") and the budget of the Picture as of the first day of principal photography and as allowed by all entities financing or guaranteeing completion of the Picture, is not less than One Million, Five Hundred Thousand Dollars ($1,500,000.00), Owner shall receive additional compensation to make the Purchase Price equivalent to the Script Fee payable to a writer pursuant to the most current Independent Production Agreement of the Writer's Guild of Canada, notwithstanding that neither the Owner nor Purchaser are a member or subscriber thereof. (b) In addition to the amounts set out above, Purchaser shall pay to Owner Three percent (3%) of One Hundred percent (100%) of Purchaser's "Net Profits" of the Picture, or any television series, pilot or movie-of-the-week (as that term is used in the entertainment industry) that derives directly from the Property. "Net Profits" will be defined, computed, accounted for and paid in accordance with Purchaser's standard Net Profits definition based on the Purchaser's "break even" negative cost position after payment of all reasonable production expenses and receipt by the Purchaser of all distribution advances and gross receipts from exploitation of the Picture and the Property. 8. TURNAROUND RIGHT In the event that Purchaser does not produce a theatrical or television motion picture based on the Property within five (5) years from the date of the execution of this Agreement, Owner may re-acquire all of the Rights herein granted by payment to the Purchaser of an amount equivalent to one-half of any sums paid to Owner by the Purchaser. 9. TITLE Owner acknowledges and agrees that included among the rights granted by Owner to Purchaser hereunder is the right to use the current title of the Property or any previous title by which it was known, as the title of any motion picture or other project based upon the Property and in connection with the production, exhibition, advertising and other exploitation of any motion picture or other project based upon the Property and all subsidiary rights therein. 10. REPRESENTATIONS AND WARRANTIES Owner represents and warrants, subject to the following warranties and representations of Owner to Purchaser, Purchaser shall indemnify and hold Owner harmless from and against any claim arising out of or in connection with the development, production or distribution of any derivative work produced from the Property pursuant to the Rights granted hereunder to Purchaser as follows: (a) Owner is the sole author and creator of the Property and is the sole and exclusive owner throughout the world of all rights in and to the Literary Property, the Property is not in the public domain in any country in the world where copyright protection is available and there is no outstanding claim or litigation pending against or involving the title, ownership and/or copyright in the Property, or in any part thereof, or in any rights granted herein and that all appropriate protection of such rights will continue to be maintained by Owner; (b) Owner has the full and sole right and authority to enter into this Agreement and to convey the Rights and all other rights conveyed to Purchaser as herein set forth; (c) to the best of Owner's knowledge, no motion picture or dramatic version of the Property, or any part of it, has been manufactured, produced, presented or authorized; no radio or television development, presentation, or program based on the Property, or any part of it, has been manufactured, produced, presented, broadcast or authorized; (d) none of the Rights herein granted or assigned to Purchaser have been granted or assigned, licensed or otherwise encumbered, diminished or impaired, except with respect to Purchaser and to the best of Owner's knowledge Owner has not committed, omitted to perform any act by which such rights could or will be encumbered, diminished or impaired; (e) Owner has not adapted the Property from any other literary, dramatic or other material of any kind, nature or description, nor, except material which is in the public domain, has Owner copied or used in the Property the plot, scenes, sequence or story of any other literary, dramatic or other material; the Property does not infringe upon any common law or statutory rights in any other literary, dramatic or other material; to the best of Owner's knowledge, no material contained in the Property is libelous or in violation of the right of privacy of any person; to the best of Owner's knowledge that the full utilization of any and all rights in and to the Property granted by Owner pursuant to this Agreement will not violate the rights of any person, firm or corporation. 11. INDEMNIFICATION (a) The parties hereto agree to indemnify the other against all judgments, liability, damages, penalties, losses and expense (including reasonable legal fees) which may be suffered or assumed by or obtained against the other party by reason of any breach or failure of any warranty or agreement herein made by the other party. (b) Neither party shall be liable to the other party for damages of any kind in connection with any Picture it may produce, distribute or exhibit, or for damages for any breach of this Agreement (except failure to pay the money consideration herein specified) occurring or accruing before the other party has or had reasonable notice and opportunity to adjust or correct such matters. (c) All rights, licenses and privileges herein granted to Purchaser are irrevocable and not subject to rescission, restraint or injunction under any circumstances. 12. PROTECTION OF RIGHTS GRANTED Owner hereby grants to Purchaser the free and unrestricted right, but at Purchaser's own cost and expense, to institute in the name and on behalf of Owner, or Owner and Purchaser jointly, any and all legal proceedings, to enjoin and restrain any infringements of the Rights herein granted, and hereby assigns and sets over to Purchaser any and all causes of action relative to or based upon any such infringement, as well as any and all recoveries obtained thereon; Owner shall not compromise, settle or in any manner interfere with such litigation if brought; and Purchaser agrees to indemnify and hold Owner harmless from any costs, expenses or damages which Owner may suffer as a result of any such suit or proceeding. Nothing in this Agreement will be construed as compelling or obligating the Purchaser to institute legal proceedings on behalf of Owner, or Owner and Purchaser jointly. 13. COPYRIGHT Owner shall execute any documentation that will evidence the transfer of copyright in and to the Property of the Purchaser. 14. CREDIT OBLIGATIONS Purchaser shall have the right to publish, advertise, announce and use, in any manner or medium, the name, approved biography and approved photographs or approved likenesses (such consent not unreasonably withheld) of Owner in connection with any exercise by Purchaser of the Rights hereunder, provided such use shall not constitute an endorsement of any product or service. Subject to the foregoing, Owner shall be accorded the following credits on a single card on screen and in paid ads controlled by Purchaser and in size of type (as to height, width, thickness and boldness) equal to the largest size of type in which any other person (other than a performer) is accorded credit in third to last position and size according to Purchaser's discretion in the following form: "Screenplay by Fidel Thomas" Alternatively, Owner has the right to designate a pseudonym to be used subject to the reasonable approval of the Purchaser over the pseudonym chosen (such approval not to be unreasonably withheld). Subject to the foregoing, the writers of the Story shall be accorded the following credits on a single card on screen and in paid ads controlled by Purchaser and in size of type (as to height, width, thickness and boldness) equal to the largest size of type in which any other person (other than performer's) is accorded credit in second to last position and size of Purchaser's discretion in the following form: "Story by Fidel Thomas" No other "written by", "story by" or "screenplay by" or similar writing credit shall be given to any other party. If Purchaser shall exploit any other rights in and to the Property, then Purchaser agrees to give appropriate source material credit (as set out above) to the Property, to the extent that such source material credits are customarily given in connection with the exploitation of such rights. No casual or inadvertent failure to comply with any of the provisions of this clause shall be deemed a breach of this Agreement by the Purchaser. Owner hereby expressly acknowledges that in the event of a failure or omission constituting a breach of the provisions of this paragraph, the damage (if any) caused Owner thereby is not irreparable or sufficient to entitle Owner to injunctive or other equitable relief. Consequently, Owner's rights and remedies in the event of such breach shall be limited to the right to recover damages in an action at law. Purchaser agrees to provide in its contracts with distributors of the Picture that such distributors shall honour Purchaser's contractual credit commitments and agrees to inform such distributors of the credit provisions herein. 15. INSURANCE Purchaser agrees to add Owner as an additional insured to an Errors and Omissions policy obtained for the production of any Picture based on the Property. 16. NOTICES AND PAYMENTS All notices and payments hereunder shall be made to the appropriate party at the following address: if to the Owner: - ---------------- 8-534 Cambie Street Vancouver, BC V6B 2N7 if to the Purchaser: - -------------------- AMP Productions, Ltd. 2708-939 Homer Street Vancouver, B.C. V6B 2W6 Attention: Thomas E. Mills 17. MISCELLANEOUS (a) This Agreement between the parties does not constitute a joint venture or partnership of any kind. (b) All amounts referred to in this Agreement shall refer to currency of the United States of America, unless otherwise indicated. (c) All rights, remedies, licences, undertakings, obligations, covenants, privileges and other property granted herein shall be cumulative, and Purchaser may exercise or use any of them separately or in conjunction with any one or more of the others. (d) A waiver by either party of any term or condition of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or any subsequent breach thereof. (e) If any provision of this agreement is applied to either party or any circumstances shall be adjudged by a court to be void and unenforceable, such shall in no way affect any other provision of this Agreement, the application of such provision in any other circumstance, or the validity or enforceability of this Agreement. (f) The Parties shall do any and all acts and execute any and all documents as may reasonably be required to give effect to and in accordance with this Agreement. (g) This Agreement shall be construed in accordance with the laws of the Province of British Columbia and Canada. (h) Captions are inserted for reference and convenience only and in no way define, limit or describe the scope of this Agreement or intent of any provision. (i) This Agreement contains the entire understanding of the parties relating to the subject matter, and this Agreement cannot be changed except by written Agreement executed by the party to be bound. IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the ___ day of ______________, 2003. --------------------- Fidel Thomas AMP PRODUCTIONS, LTD. per: -------------------------- Thomas E. Mills President EX-23 9 ex231forsb2.txt Exhibit 23.1 MOORE STEPHENS ELLIS FOSTER LTD. Chartered Accountants 1650 West 1st Avenue Vancouver, B.C., Canada V6J 1G1 Telephone: (604) 737-8117 Facsimile: (604) 714-5916 - -------------------------------------------------------------------------------- INDEPENDENT AUDITORS' CONSENT We consent to the use in the Registration Statement of AMP Productions, Ltd (a development stage company) on Form SB-2 of our Auditors' Report, dated April 10, 2003, on the balance sheet of AMP Productions, Ltd. (a development stage company) as at March 31, 2003 and the related statements of operations and deficit accumulated during the development stage, cash flows, and stockholders' equity for the period from inception on February 27, 2003 to March 31, 2003. In addition, we consent to the reference to us under the heading "Interests Of Named Experts And Counsel" in the Registration Statement. Vancouver, Canada: /s/Moore Stephens Ellis Foster Ltd. June 18, 2003 Charter Accountants EX-99 10 ex991forsb2.txt Exhibit 99.1 SUBSCRIPTION AGREEMENT Attn: President AMP Productions, Ltd. 2708-939 Homer Street Vancouver, B.C. V6B 2W6 Re: Acquisition of Common Shares of AMP Productions, Ltd. a Nevada corporation (the "Company") Dear Sir: A. Subscription The undersigned hereby subscribes for _______________ shares of the Company's Common Stock, par value US$0.0001 per share (the "Shares") at a purchase price of US$0.10 per share, according to the terms set forth herein. I acknowledge and agree that this subscription may not be revoked by me except with the consent of the Company. I further acknowledge and agree that the Company may, in its sole discretion, allocate shares among subscribers in the event of an over subscription for the Shares. B. Subscriber's Representations and Warranties. The undersigned hereby represents and warrants as follows: 1. Warranties. In connection with your offer of Shares, I represent and warrant that I am over the age of 21 years; that I, individually or together with others on whom I rely, have such knowledge and experience in financial and business affairs that I have the capability of evaluating the merits and risks of my investment in the Company; that I am financially responsible and able to meet my obligations hereunder and acknowledge that this investment is by its nature speculative; that I have received a copy of the Company's Prospectus dated _______________ (the "Prospectus"). By executing this Subscription Agreement, the undersigned acknowledges and agrees to all of the terms and conditions of this offering as described in the Prospectus. This Subscription Agreement is not binding on the Company until accepted by the Company. The Company reserves the right to accept or reject, in whole or in part and at its sole discretion, any Subscription Agreement. 2. Suitability. I represent that I either have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of my investment in the Company or, together with the purchaser representative, if any, named below, have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of my investment in the Company; that I relied on my own legal counsel or elected not to rely on my counsel despite the Company's recommendation that I rely on my own legal counsel; and that I am able to bear the economic risk of such investment. 3. Representations by the Company. No representations and warranties, oral or otherwise, have been made to the undersigned by the Company or any agent, employee or affiliate of the Company, or any other person whether or not associated with this Offering and in entering into this transaction, the undersigned is not relying upon any information other than those contained in the Prospectus. The delivery of this Prospectus and the sale of the Shares does not mean that there has been no change to the Company's affairs since the date of this Prospectus. The undersigned acknowledges that this Prospectus is not an offer to sell or a solicitation of an offer to buy securities in any state or jurisdiction where the offer or sale is not permitted. 4. No Operating History. The undersigned understands that the Company has no financial or operating history and that the Shares, as an investment, involve a high degree of risk, as described in the Prospectus. 5. Market for the Shares. The undersigned is aware that (i) there is no market for the Shares and that there can be no assurance that a market will develop and (ii) it may not be possible to liquidate his/her investment in the Shares readily. 6. Risk. The undersigned has carefully read the entire Prospectus, particularly the "Risk Factors" section therein. 7. Residency Declaration. The undersigned represents and warrants that he is not a resident of any state or possession of the United States. 8. Indemnification and Arbitration. The undersigned recognizes that the offer of the Shares in the Company was based upon his representations and warranties contained above and hereby agrees to indemnify the Company and to hold it harmless against any and all liabilities, costs, or expenses (including reasonable attorneys' fees) arising by reason of, or in connection with, any misrepresentation or any breach of such warranties by the undersigned. Further, in the event that any dispute where to arise in connection with this Agreement or with the undersigned's investment in the Company, the undersigned agrees, prior to seeking any other relief at law or equity, to submit the matter to binding arbitration in accordance with the rules of the National Association of Securities Dealers at a place to be designated by the Company. 9. Agency Determination. The undersigned recognizes and understands that no federal or state agency has made any determination as to the fairness of the offering for investment purposes, or any recommendations or endorsement of the Shares. C. Miscellaneous. 1. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. 2. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. The provisions of this Agreement may not be modified or waived except in writing. 3. The headings contained in this Agreement are for convenient reference only, and they shall not limit or otherwise affect the interpretation of any term or provision hereof. D. Subscription for Shares Number of Shares subscribed for:________________ Total Payment enclosed: $___________ USD (Please make check payable to AMP Productions, Ltd.) IN WITNESS WHEREOF, the undersigned has executed this Agreement this ___ day of _______, 2003. ------------------------------- Signature(s) ------------------------------- Print Name Print Name(s) in which Shares Are to be Registered: ------------------------------- Address of Subscriber: ------------------------------- ------------------------------- Social Security or Taxpayer Identification Number: ------------------------------- Telephone Number with Area Code: ------------------------------- ACCEPTANCE The foregoing subscription is hereby accepted and receipt of payment is hereby acknowledged with respect to the Shares subscribed for above. Dated: ___________________ AMP Productions, Ltd. By: --------------------------------- Thomas Mills President -----END PRIVACY-ENHANCED MESSAGE-----