Film Finance Loan Agreement by bobzepfel

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Loan Agreement to finance feature film

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									                                     LOAN AGREEMENT

        THIS LOAN AGREEMENT ("Agreement") is entered into as of this
                            ("Effective Date"), by and between

       ("Lender") and


       NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

1       LOAN:

        a.       Lender has been induced by Borrower to make a loan in an aggregate amount
not to exceed the principal amount of $                             (the "Loan") to Borrower
exclusively for the purpose of paying certain production expenses in accordance with the
Approved Budget and Approved Cash Flow Schedule, copies of which is attached hereto as
Exhibit A, upon receipt of a signed, verified "Request for Funding" in the form attached hereto
as Exhibit B, for the feature film currently entitled                                (the
"Picture") including, without limitation, setting aside (i) $               as an Interest Reserve,
(ii) $                  as a Contingency Reserve to pay any bona fide direct production costs
Budget line item overage which cannot be funded by a Budget underage, and (iii) a sufficient
amount of money to pay Lender's legal fees and other direct costs as described in Sections 7 and
11 below, each of which shall be paid or held in accordance with this Agreement, Approved
Budget and the Approved Cash Flow Schedule.

        b.        The following documents are referred to as the "Loan Documents":

                        (i)       Agreement,

                        (ii)      the Secured Promissory Note of even date herewith (the

                        (iii)      the Security Agreement of even date herewith (the "Security

                      (iv)         the Mortgage of Copyright of even date herewith (the
"Mortgage of Copyright"),

                        (v)       the Charge and Deed (the "Charge") of even date herewith,

                        (vi)       a Continuing Guaranty ("Guaranty") from
                        (vii)      all other documents and agreements executed by Borrower
and any entities guarantying the Loan or in connection with the Loan,

                         (viii)      a Laboratory Pledgeholder Agreement from

                         (ix)       Subordination Agreements between Lender and each of the
following entities;

                         (x)       a Collection Agent Agreement and Direction to Pay Letters
acceptable to Lender.

2.                    CONDITIONS OF FUNDING: Lender's obligation to make each and
every advance of the Loan shall be subject to the occurrence of each of the following conditions:

                          a      Receipt by Lender of all original Loan Documents properly
executed by each of the parties thereto in a form acceptable to Lender, including, but not limited
to the following: (1) this Agreement, (2) the Note, (3) the Security Agreement, (4) the Mortgage
of Copyright, (5) the Charge (6) the Guaranty (7) the Subordination Agreements (8) Laboratory
Pledgeholder Agreements and (9) each Agreement and Power of Attorney..

                         b.        Lender's receipt and approval of the Approved Budget and
Approved Cash Flow Schedule for the Picture, as prepared and approved by
                                       . The Approved Budget includes sufficient monies to
manufacture and create all of the deliverables, free and clear and of sufficient technical quality,
to satisfy the requirements of the licensees to exploit the Picture. The required deliverables and
technical requirements are set forth in the delivery schedules attached to the licenses described
on the Collateral Schedule, attached hereto as Exhibit C. The Approved Budget and Approved
Cash Flow Schedule must provide sufficient time and money so that the Picture is 100%
complete and ready for complete delivery to the licensees, as set forth on the Collateral
Schedule, no later than                        ("Outside Completion Date").

                           c.       Receipt by Lender of a current and accurate production cost
report, cash flow statement, and trial balance indicating that (i) the Picture can be completed and
delivered by the Outside Completion Date and for the amount of the Approved Budget and (ii)
that, at the time of the first drawdown of the Loan, there is no foreseeable need to use any of the

                         d.        Receipt by Lender of a Collateral Schedule including true,
complete and accurate copies of fully executed licenses acceptable to Lender regarding the
Picture which provide for the payment of a minimum guarantee of not less then
        upon the delivery of the Picture to such licensees, and either Lender has received an
amount equal to all deposits collected from such licensees in accordance with the Deposit
Schedules attached hereto as Exhibit D or Borrower certifies that such deposits have been used
to pay costs contained in the Budget.
                          e.    Lender has received notice that Borrower and
                                                   , have entered into a Participation
Agreement regarding the Picture.

                        f.      Lender has received an Agreement and Power of Attorney or
other form of agreement acceptable to Lender that would allow Lender to distribute the Picture
through an "output" video agreement with
and any other "output" video or other similar agreement that deal with the distribution of the

                          g.       Borrower entering into an agreement with
        ) in a form acceptable to Lender, pursuant to which             provides a credit of no less
than $                          to pay for post production services at facilities, with a first position
security interest against the revenues derived from                                     , which shall
be subordinated in all other respects to Lender in accordance with the Approved Budget and
documentation satisfactory to Lender..

                         h.      Borrower's receipt of a minimum of $1,000,000 from
                       which has been used exclusively to pay the direct costs of production of
the Picture including a $                           producing fee to
in accordance with the Approved Budget and documentation satisfactory to Lender evidencing
the receipt by Borrower of those amounts and the expenditure of same

                          i.       Receipt by Lender of a                             Film
Certificate indicating approval of the Picture as a                             Co-Production and
qualification of the Picture for film tax relief under

                      j.      Receipt by Lender 
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