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					E-Business Plan for
HoldMyMovie.com




      Prepared
For Angel Investors:
  Dr. Frank Barone
 Dr. Raymond Frost
Dr. Arthur Marinelli
  Mr. Larry Rogers
 Dr. Christine Yost




  Prepared By
 Entrepreneurs:
Mr. David Benseler
Ms. Bridget Brady
Mr. Jesse Claypool
Mr. Mathew Kahn
Ms. Rebecca Shay




November 18, 2000
Bridget Brady
Rebecca Shay
Copeland Hall
Athens, OH 45701

November 18, 2000

Dr. Raymond Frost
214F Copeland Hall
Athens, OH 45701

Dear Dr. Frost:

HoldMyMovie.com is a new and inventive online video rental reservation service connecting a
collaboration of video rental stores to customers in the Greater Cleveland area. The mission of
HoldMyMovie.com is to ensure that video stores can always please their movie fanatics by
providing a convenient way to find desired videos.

The HoldMyMovie.com web site allows video rental store customers to read movie reviews,
view trailers, select their desired movie from a list of in stock rentals from video stores in their
area, and then reserve the title online to be picked up later that day.

The HoldMyMovie.com web site will connect all contracted video rental store servers to offer
quality and efficient information regarding the availability of rented movies to customers. Being
a member of HoldMyMovie.com means the customer only needs one membership to access
video rental stores in their community rather than multiple memberships at several video stores.

As an angel investor, you will receive a seat on the HoldMyMovie.com’s Board of Directors.
There will be a Board of Directors meeting at the end of each month to discuss financial and
progress information concerning the company. Each Board Member, minus the creator of
HoldMyMovie.com, will receive a stipend of $100 to $500 for attending a Board of Directors
meeting.

Also, as an angel investor you will receive a portion of the profits each year. Right now, as an
angel investor you will receive 10 percent of HoldMyMovie.com’s yearly profit.
HoldMyMovie.com is asking for a total of $90,00 from interested angel investors. This money
will be used for start-up costs including the server, software applications, marketing and sales,
advertising, and promotional fees. Thank you for your interest in HoldMyMovie.com Company.

Sincerely,


Bridget Brady                                      Rebecca Shay
President of HoldMyMovie.com                       President of HoldMyMovie.com
                                                                                               HoldMyMovie.com



                                                           Table of Contents
Executive Summary ...................................................................................................................1
The Company .............................................................................................................................2
    Mission Statement ..............................................................................................................2
    Video Rental Company Services .........................................................................................2
    Video Renter Services .........................................................................................................2
    Opportunity Rationale .........................................................................................................2
Market Research ........................................................................................................................3
    Video Rental Industry Trends and Projected Growth ..........................................................3
    Market Share........................................................................................................................3
    Competition .........................................................................................................................3
Marketing Plan ...........................................................................................................................4
    Overall Marketing Strategy .................................................................................................4
    Pricing ..................................................................................................................................5
    Service and Warranty Policies .............................................................................................5
Supplier Selection Criteria .........................................................................................................5
Future Growth and Expansion ...................................................................................................5
    Increased Customer Base .....................................................................................................6
    On site Advertising ..............................................................................................................6
    Video Sales ..........................................................................................................................6
    Expansion to Cinemas and Theaters ....................................................................................6
Operations Plan ..........................................................................................................................6
Management Team.....................................................................................................................7
    Future Team Members .........................................................................................................7
    Board of Directors ...............................................................................................................7
Critical Risks, Problems, and Assumptions ...............................................................................7
The Financial Plan .....................................................................................................................8
    Break-even Analysis ............................................................................................................8
    Income Statement ................................................................................................................8
    Cash Flows...........................................................................................................................9
Exit Strategy.............................................................................................................................10
Proposed Company Offering ...................................................................................................10
References ................................................................................................................................11
Appendices ...............................................................................................................................13
    Appendix A: Legal Considerations in a Form of a Business ............................................13
    Appendix B: Team 5 Survey 2 .........................................................................................30
    Appendix C: Market Facts and Statistics ..........................................................................31
    Appendix D: Team 5 Survey 1 .........................................................................................32
    Appendix E: Advertising and Promotion .........................................................................33
    Appendix F: Financials .....................................................................................................34
    Appendix G: Membership Contract..................................................................................46
    Appendix H: Server and Software ....................................................................................47
    Appendix I: Area Video Stores........................................................................................50
    Appendix J: Management Structure ................................................................................54
    Appendix K: Employee Benefits ......................................................................................57
    Appendix L: Risks ............................................................................................................64
    Appendix M: Resumes ......................................................................................................65
                                                                                      HoldMyMovie.com


                                                List of Illustrations
Figure 1: Break-even Analysis...............................................................................................8
Figure 2: Income Statement ...................................................................................................8
Figure 3: Cash Flows .............................................................................................................9
                                                              HoldMyMovie.com                       1


                                       Executive Summary

HoldMyMovie.com is an online video rental reservation service connecting a collaboration of
video rental stores to customers in the Greater Cleveland area. The mission of
HoldMyMovie.com is to ensure that video stores can always please their movie fanatics by
providing a convenient way to find desired videos.

Video rental stores are able to connect to the HoldMyMovie.com web site that is run on the
Verio.com server and uses an e-Business Integration Framework Software application to
successfully send information concerning the availability of movie rentals.

Video rental store customers will be able to read movie reviews, trailers, select their desired
movie rental, select from a list of video rental stores in their area with the desired movie in stock,
and then reserve the title online to be picked up later that day. The target market is the video
rental store, and the target audience is the video store customer.

Right now, there is no other company in the movie rental industry that offers an online video
reservation service combined with a collaboration of video rental stores. Blockbuster video
offers an online reservation service of their company, but only in a select city in both Texas and
Colorado. This means HoldMyMovie.com will hold 50% of the market share.

Future products HoldMyMovie.com is exploring includes branching out to the Greater
Columbus, Ohio area and later on to all major cities in Ohio and also offering movie theater
tickets to be reserved online. After HoldMyMovie.com has a good grasp of the State of Ohio,
then the company will branch out to other parts of the country.

HoldMyMovie.com is asking for a total of $90,00 from interested angel investors. This money
will be used for start-up costs including the server, software applications, marketing and sales,
advertising, and promotional fees.

In the first year, HoldMyMovie.com will end up with a loss, however, the company will be
making a profit by the end of the second year. Each angel investor will receive a portion of the
profits each year. This means an increase in total profits will increase the amount of money paid
to an angel investor. Right now, an angel investor will receive 10 percent of
HoldMyMovie.com’s yearly profit.

An angel investor will receive a seat on the HoldMyMovie.com’s Board of Directors. There will
be a Board meeting at the end of each month to discuss financial and progress information
concerning the company. Each Board Member, minus the creator of HoldMyMovie.com, will
receive a stipend of $100 to $500 for attending a Board of Directors meeting.
                                                             HoldMyMovie.com                        2



                                          The Company

Mission Statement: To ensure that small video stores can always please their movie fanatics by
providing a convenient way to find videos.

Video Rental Company Services
HoldMyMovie.com founded in November 2000, is a Limited Liability Company which focuses
on providing video rental stores access to a larger range of customers via the Internet (See
Appendix A for information on Limited Liability Company). The software that tracks rented
movies that is currently in operation in rental stores, is linked to HoldMyMovie.com for a small
fee.

A survey of 20 Cleveland area video rental companies, ranging from large chains to small video
shops, was conducted (See Appendix B for in depth survey analysis). From this survey it was
decided that small to mid-sized local video stores have overwhelming interest in the services
offered at HoldMyMovie.com. The larger chains feel that they currently pull in enough revenue
without offering extensive services to customers. Therefore, the primary target customer base is
local video stores that are looking to gain a greater clientele base through extended services.

Video Renter Services
At HoldMyMovie.com customers are able to retrieve movie reviews and ratings, view newly
released movie trailers and reserve available videos from rental stores in their area.
HoldMyMovie.com provides a quick, complete listing of the videos on hand, for easy reference
to movie renters. This family friendly site also provides parents with the opportunity to read
about and possibly view videos that their children may be watching.

                                     Opportunity Rationale

In order to stay competitive in the marketplace video stores need to provide services to attract
their customers. Analysts have stated that the only way that traditional brick-and-mortar
commercial businesses will advance is through offering services (11 Immutable Laws 2000).
With Internet use growing daily it is only natural that it will become an aid to business growth.

HoldMyMovie.com is the first company to see the Internet as both a benefit to video rental
companies and an additional service to movie renters. When rental companies link to the
HoldMyMovie.com network the company will have full control of this Internet market.

                                        Market Analysis

An analysis of the video rental market includes exploring industry trends and projected growth,
as well as a comprehensive investigation companies that offer similar services. Extensive market
research has been done to ensure that any potential barriers of entry into the video rental industry
are recognized.
                                                             HoldMyMovie.com                        3


Video Rental Industry Trends and Projected Growth
The video rental industry has seen increases for the past several years. In 1990 the video rental
industry brought in $9.8 billion compared with $25 million for pay per view. However, by 1999
video rental earnings had doubled to $18.5 billion while pay per view had been replaced by cable
movies with the second highest earnings, with $43 million. It is projected that by 2005 video
rental companies will be earning $22.8 billion (Videodyne Homepage 2000).

Several industry analysts have stated that there is room for improvement because the rental
industry has only begun to provide additional services to their clients (Videodyne Homepage
2000). Using the past ten years as an example the video rental industry should keep increasing
well into the future.

Market Share
Market Share refers to the percentage of the entire market that a certain entity controls. The
market share’s that are relevant to this business are the percentage of HoldMyMovie.com and the
video rental industry as a whole.

HoldMyMovie.com
HoldMyMovie.com has the potential to control 50 percent of the online movie reservation
market. The remaining 50 percent will be controlled by video stores and their services.
Blockbuster, one of the largest video rental chains, has recently started to provide a reservation
type system for their video store in the cities of Austin Texas and Denver Colorado (Blockbuster
Homepage 2000). Therefore, their services are taking away from our market share. However,
there is a potential to gain 100 percent of the small video companies due to their enthusiasm to
join (Team 5 Survey 2).

Video Rental Industry
At-home movie watching includes video rental, pay per view, cable, and satellite television. In
1999 video rental accounted for 95% of this market (Videodyne Homepage 2000). Even with
the addition of cable and satellite television movies, video rental remains the highest source of
at-home video watching with 98 percent of the market. (See Appendix C for more information)

Competition
As stated previously there is no other online site that provides the same services as
HoldMyMovie.com. Essentially, this site is an opportunity for small business to compete with
the larger video store chains such as Blockbuster and Hollywood Video. Therefore, these large
chains are not in competition with HoldMyMovie.com, but with our customers. The main way
that HoldMyMovie.com would feel the effects of competition is if imitation sites arose. The
large video chains may develop their own system of online renting, however they would never
host competing video rental stores.

                                         Target Markets

The video rental companies are paying customers of HoldMyMovie.com, therefore they will be
referred to as such. The movie renters on the other hand are simply the audience. It is the
                                                             HoldMyMovie.com                        4


objective of the company to sell our services to improve the relationship between the customer
and their audience by providing better service.

The Customer Target Market
Improved service of smaller ―mom and pop‖ video stores, will result in an increase in their sales
yielding a higher profit and thereby increasing their bargaining power with larger renting
companies such as, Blockbuster and Hollywood Video. As previously stated, the survey of
video companies showed that HoldMyMovie.com is appealing to smaller local chains (Team 5
Survey 1). Therefore, these companies will be initially targeted.

HoldMyMovie.com will start by targeting companies in the Greater Cleveland area. This
geographic location was chosen because of the large customer base (See Appendix I for
complete listing of video rental stores). The area is also convenient because two of the original
founders are from the Greater Cleveland area, and their homes can be used as headquarters free
of charge.

The Audience Target Market
HoldMyMovie.com’s main target audience is video renting consumers ages 25-50. According to
the survey, this age group, over others, sees our service as a convenient way to rent movies. A
majority of this age bracket are busy parents and young professionals looking to relax at home
(Team 5 Survey 2000). They see HoldMyMovie.com as a quick, easy way to rent movies (For
detailed information please see Appendix D).


                                         Marketing Plan

Overall Marketing Strategy
Our company’s marketing strategy involves heavy personal selling to video rental stores, and
advertising to rental audiences. Advertising for our company will occur online, on the radio, and
in newspaper advertisements.

Direct Personal Selling
During the first year of operation Bridget Brady and Matthew Kahn will present the services
available through HoldMyMovie.com to the video rental companies in the Greater Cleveland
area (See Appendix M for specific qualifications of salesmen). Personal selling to our customers
will be the method of choice.

The company wants to develop a personal relationship with these customers, as it is providing a
unique solution for each customer. Each marketing employee will solicit, initiate, and, close the
deal with the rental company. Both marketing employees will receive and initiate response from
referrals derived from media publications, radio advertisements, and word of mouth. Each
marketer is responsible for the well being of the relationship that exists between the customer
and the company, as he or she is a representative of HoldMyMovie.com
                                                             HoldMyMovie.com                        5


Advertising and Promotions
The HoldMyMovie.com advertising department will have a $20,000 budget for the first year of
business. The site has plans to create awareness about the company immediately after the
company launch. In the first week of existence we plan to spend the most amount of money on
advertising and decrease slowly until we reach a steady advertising expense, which will be
maintained throughout HoldMyMovie.com’s existence. HoldMyMovie.com has two initial
advertising strategies radio and flyers (See Appendix E for further information on advertising.)

Pricing
HoldMyMovie.com will charge video stores $300 a month. This $300 fee will provide video
stores with an advertisement method that avoids soliciting customers. It will also link the video
stores database with our website. This will enable video renters to view the movies that a
particular video store has available. (See Financial Appendix F for further pricing information)

Service and Warranty Policies
In order to rent movies through HoldMyMovie.com a contract will be filled out online that is
agreeable with our video store customers. The contract will be as strict as our customer’s most
conservative rental contract (See Appendix G for a copy of our video rental contract).

                                     Supplier and Selection

The following criteria were used by HoldMyMovie.com to find a server and software suitable to
the needs of this e-business.

      Efficient- the server and software must be efficient to meet the needs of both the video
       rental stores and their customers
      Accurate- accurate information must travel quickly both to and from the video rental
       store databases to the HoldMyMovie.com site to insures quality customer service and
       satisfaction
      Quick- the server and software need to be able to work quickly to gather feedback
       information on products and services
      Reliable- the server and software must be reliable in order for HoldMyMovie.com to be
       able to reach customers 24 hours a day
      Secure- the site must be able to be secure to receive information about video rental stores
       and their customers

After reviewing the criteria, the web hosting server HoldMyMovie.com decided to use is by
Verio.com, and the e-Business Integration Software from Data Juction.com (For detailed
information on server and software applications see Appendix H).

                                Future Growth and Expansion

HoldMyMovie.com has room to expand in several categories. Initially, HoldMyMovie.com can
expand by increasing customer base and further advertising on the site.
                                                             HoldMyMovie.com                       6


Increased Customer Base
When HoldMyMovie.com experiences success, the opportunity to move into markets outside of
Cleveland will arise. The number of video stores that have signed on to our network will
determine success in Cleveland. There are 96 small to mid-sized video stores in the greater
Cleveland area. The majority of the market will be obtained when 50 of the 96 stores are
integrated into our network. (See Appendix I for complete listing of stores)

HoldMyMovie.com plans to begin expansion to the Akron Canton area and Columbus after a
year and 7 months. Potentially every major city in the country will have video stores that are
affiliated with HoldMyMovie.com. (See Appendix I for complete listing of stores)

On Site Advertising
When the HoldMyMovie.com website generates high hits, that we expect, then the potential to
advertise would be very plausible. HoldMyMovie.com enterprises are expecting high revenues
from Motion picture production companies that would advertise new releases on our site. Other
potential adverting revenues would come from movie accessory companies, for example
popcorn, candy, and refreshment companies.

Other more long-term future growth goals of HoldMyMovie.com include expansion into selling
videos and ticket reservation of both cinemas and live theaters.

Video Sales
HoldMyMovie.com has plans to sell videos on line to video renters. There could be a great deal
of profit in buying a large amount of videos at a discounted price and selling them to customers
at the market rate. This may also lead into becoming the wholesaler for HoldMyMovie.com’s
video store customers. HoldMyMovie.com could instantly be successful in this market because
they would already have an existing Market.

Expansion to Cinemas and Theaters
HoldMyMovie.com plans to eventually give customers the ability to reserve tickets to movies
and live theater. From there selling tickets online to all types of events becomes possible.

                                        Operational Plans

HoldMyMovie.com provides movie renters with the ability to reserve movies online. In order to
perform this service there is a membership form that must be filled out by the potential customer.
The number on a valid drivers license, military ID, or passport or a state issued photo as well as a
valid credit card, is necessary for membership (See Appendix G for membership contract).

To keep payment simple, the movie renters will pay the video company when the pick up the
movie. HoldMyMovie.com’s income will come directly from the video companies that sign on
to the network.
                                                          HoldMyMovie.com                     7


                                      Management Team

Future Team Members
The future team members include Bridget Brady, David Benseler, Jesse Claypool, Matt Kahn,
and Rebecca Shay. The management positions of HoldMyMovie.com are as follows:

      Presidents:                       Bridget Brady    Rebecca Shay
      Director of Sales:                Bridget Brady
      Director of Marketing:            Matthew Kahn
      Director of MIS/Operations:       David Benesler
      Director of Finance:              Jesse Claypool

(See Appendix J for a complete Job Analysis and Appendix K for insurance benefits)

Board of Directors
The Board of Directors will include all five owners of HoldMyMovie.com, four seats to
accommodate angel investors, one board seat for our CPA/Legal advisor, and one seat for our
Oracle Information Systems Consultant.

The Board will convene on the last Saturday of every month at 12pm. Members are asked to stay
during the weekly company progress and agenda meeting following the Board of Directors
meeting. A company stipend of $100 to $500 is paid to each Board Member, minus the owners,
for attending the monthly meeting.

                          Critical Risks, Problems and Assumptions

There are several risks that must be reviewed at the start of any small business.
HoldMyMovie.com has recognized the following risks in the formation of the business:

     Potential Growth in Competition
     Increased popularity of downloading videos
     Unpopularity of site to video renters
     Unsubstantial customer base
     Software and Internet difficulties
Please see Appendix L for further information on risks.
                                                                   HoldMyMovie.com                      8



                                             The Financial Plan

      Break-even Analysis
      Below is an analysis of how many sold units it would take to break even on a yearly basis.

      Figure 1
      Break Even for Years 1-5

                              Year 1 Year 2     Year 3     Year 4     Year 5
      Fixed Costs           $ 206,243 157,350 146,400 226,596 226,596
      Variable Costs*       $         0       0          0          0          0
      Selling Price of Unit $       300     300        300        300        300
                              _____________________________________________
      Number of Units to
           Break Even               688     525        488        755        755

      A break-even analysis could not be accurately calculated for this company for two reasons.
      First, the company does not know the average life span of the service. Secondly, the payment is
      continuous over the life span of the service. To accurately calculate the break even, it would
      require extensive research of a comparable product life an advanced formula for calculating
      continuous payment. HoldMyMovie.com will gladly provide an accurate break-even upon
      notice.

      * HoldMyMovie.com has not incurred any variable costs for the increased units of sale because
      all costs are budgeted as fixed costs. There are no additional costs to add one unit of sale
      because all costs are accounted for and there is no physical product that is required to increase a
      unit of sale. (See Appendix F on details of Fixed Cost)

      Income Statement
      The Income for the first year of operation including start up costs is $-128,843. However, the
      company begins to make money during the third year of operation. Profits are increased because
      the volume of sales are increased, monthly payments are accrued, and costs stay fixed. The total
      income during the five-year period is $989,215. The table below is the income statement for the
      first five years. (See Appendix F for a detailed monthly income statement for the first year.)

      Figure 2
Proforma Yearly Income Statement- Years 1-5
____________________________________________________________________________________
                                       Income Income Income     Income     Income      Income
                             Start-up Year 1 Year 2 Year 3      Year 4     Year 5      Total
Fixed Expenses
    Office                           0       0        0       0           0          0            0
    Server                       17810 19,814     2,004   2,004       2,004      2,004       45,640
    Advertising/Promo                0 20,625 33,750      7,500       7,500      7,500       76,875
    Wages                            0 60,000 75,000     90,000    150,000    150,000      542,810
                                                                  HoldMyMovie.com                      9


    Utilities                            0     0       0         0        0         0         0
    Phone                               60   576     516       516      912       912      3492
    Equipment                        5,00062,000   1,500     1,800    3,000     3,000    76,300
    Employee Benefits                   55   715   6,600       860      660       660     9,550
    Mileage Expense                    667 8,671   8,004     8,004   13,836    13,836    53,018
    Insurance                           86   638     552       552      996       996     3,820
    Software                         4,231 5,995   1,764     1,764    3,288     3,288    20,330
    Warranty exp.                    1,75022,750   2,100     2,100   27,000    27,000    82,700
    Consulting                       2,50015,500 21,000      6,000    7,200     7,200    59,400
    Marketing exp.                   1,500 2,100   6,000       600    1,800     1,800    13,800
    Other                            1,50075,000   6,000     6,000    8,400     8,400   105,300
Variable Expenses*                             0       0         0        0         0         0
                               _______________________________________________________________
Net Expenses                      35159 171,084 157,350    146,400  226,596   226,596   963,185

Revenues                               0 77,400 206,400    336,600  536,400   795,600 1,952,400
                               _______________________________________________________________
Net Income                        -35159 -93,684 49,050    190,200  309,804   569,004   989,215

     * HoldMyMovie.com has not incurred any variable costs for the increased units of sale because
     all costs are budgeted as fixed costs. There are no additional costs to add one unit of sale
     because all costs are accounted for and there is no physical product that is required to increase a
     unit of sale. (See Appendix F for more details)

     Cash Flows
     Below are the cash flows for the first five years of the company’s life. At the end of November,
     the company will be self-sufficient in terms of cash needs. All operations from that point
     forward will be funded through cash derived from sales.

     Figure 3
                            Total      Total     Total      Total      Total
                            Year 1     Year 2    Year 3     Year 4     Year 5
     Units                         41         36         36         72         72
     Monthly Payments $        77,400    206,400    336,600    536,400    795,600
     Office                         0          0          0          0          0
     Server                    19,814      2,004      2,004      2,004      2,004
     Advertising/Promo         20,625     33,750      7,500      7,500      7,500
     Wages                     60,000     75,000     90,000    150,000    150,000
     Utilities                      0          0          0          0          0
     Phone                        576        516        516        912        912
     Equipment                 62,000      1,500      1,800      3,000      3,000
     Employee Benefits            715      6,600        860        660        660
     Mileage Expense            8,671      8,004      8,004     13,836     13,836
     Insurance                    638        552        552        996        996
     Software                   5,995      1,764      1,764      3,288      3,288
     Warranty exp.             22,750      2,100      2,100     27,000     27,000
                                                              HoldMyMovie.com                   10


Consulting                15,500      21,000     6,000      7,200      7,200
Marketing exp.             2,100         600       600      1,800      1,800
Other                     75,000       6,000     6,000      8,400      8,400
Cash Outflow             171,084     157,350   146,400    226,596    226,596
Cash Inflow               77,400     206,400   336,600    536,400    795,600
   Carry Over              6,284      76,743   286,934    334,104    904,302
Ending Cash          $     6,284      76,743   289,934    334,104    904,302

Cash Flow from
   Operations        $     30,118     75,300   190,200      31,104   570,198

Note: All figures are based on expanding market share into other geographic regions and an
accelerated sales program in years four and five. (Please see Appendix F for a complete monthly
break down of the cash flows for each year.)

                           Exit Strategy Proposed Company Offering

The following are plans to ensure that the investor’s capital is secure.

Initial Price Offering
After 5 years of running the company, HoldMyMovie.com plans to offer an IPO on the stock
market. HoldMyMovie.com’s investors will have the opportunity to buy 2/3rd of the stock that is
put on the market. (Andrew Kahn Interview)

Sell
If after five years the investors do not want to take the stock option plan, than
HoldMyMovie.com could sell the company giving all the revenues to the investors. Possible
buyers would be Video Store’s looking to expand their online market.

Partnership
In case of an undesirable stock option it would be possible to become partners with a video store
that did not have an online site. (Andrew Kahn Interview) In which case investors would have
another chance to make their money back.

                                    Proposed Company Offering

After careful review of financial data, it has been decided that HoldMyMovie.com will need
$100,000 to cover start-up costs. Each founding owner has put in $1,000 of personal capital,
equaling $5,000. The families of the founding owners have generated an equivalent $5,000.
After consulting with Marc Michigan, a financial advisor from Banc One, HoldMyMovie.com
has decided to ask for $90,000 from angel investors to help finance the company.
                                                               HoldMyMovie.com                     11


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Pearce-Shay, April. CPA. Personal Interview. November 13, 2000.
Ries, A., and Ries, L. (2000). The 11 Immutable Laws of Internet Branding. New York:
    HarperBusiness.
Shay, Dale. Oracle IT Consultant. Personal Interview. November 13, 2000.
Team 5 Video Rental Customer Survey. (2000). Executed on November 12, 2000.
Team 5 Video Rental Store Survey. (2000). Executed on November 12, 2000.
Verio Homepage. (1996). Retrieved from the World Wide Web on November 14, 2000.
   http://www.verio.com.
Videodyne Homepage. (2000). Retrieved from the World Wide Web on
                                   HoldMyMovie.com   12


November 11, 2000. http://www.convergentdata.com.
                                                             HoldMyMovie.com                     13


                                        Appendix A
                     Legal Considerations in the Formation of a Business

In the formation of a business, owners have several legal options to consider. A business has
several forms in which it can take under the laws of the United States. Each legal form of
business varies in structure, rights, liability, and ownership, as well as other important factors.
The owner or owners of a business must carefully consider the type of business they will create
and understand the advantages, as well as the disadvantages of each form. The following types
of businesses will be discussed in detail, and the advantages and disadvantages directly related to
the creating of a small, start-up Internet business will be considered.
         Sole Proprietorship
         General Partnership
         Limited Liability Partnership
         Corporation
         Limited Liability Company

A small, profit-oriented, e-business with multiple owners must carefully consider certain factors
in order to create a business that is most effective for both the business and the owners. These
advantages and disadvantages are presented, as well as a conclusion for each type of business
entity.

                                       Sole Proprietorship
A sole proprietorship is a business entity, which is owned by a single person or a married couple.
There is no legal separation between an owner and their business in this type of business entity.
There are 15-20 million sole proprietorships located in the United States—approximately 80% of
the total number of businesses. Any one person who has run his or her own business without any
other legal filings, such as a summer lawn mowing service, has opened a sole proprietorship.
There are no specific statutes governing the existence of sole proprietorships. Tort law, contract
law, and property law, as well as environmental and civil rights law, are used in the regulation of
sole proprietorships.

Advantages
For certain reasons, a sole proprietorship is the most popular form of business in the United
States. The advantages of creating a sole proprietorship include:
         Speed and ease of formation
         Simplicity of operation
         No separation of taxation

Speed and ease of formation. A sole proprietorship is the easiest type of business entity to
create. There are no requirements that are necessary to form a sole proprietorship—anyone can
open this type of business anytime and anywhere. Excluding tax returns, there is no need to file
organizational paperwork. If the business is maintained under a name separate from the name of
the owner, simple, ―doing business as‖ filings are necessary. No lawyers are needed in the
formation of this type of business entity. Because of these traits, a sole proprietorship can be
quickly formed with no bureaucracy.
                                                             HoldMyMovie.com                      14


Simplicity of operation. Many people enjoy operating a sole proprietorship because of its
simplicity. The owner of this type of business is the top management unless they decide to
outsource their management duties. It is an advantage to these people to be their own boss. In
the formation of sole proprietorship it is not necessary to report to other co-owners. The one
owner has the power to make all final decisions.

No separation of taxation. The taxation of a sole proprietorship can be an advantage to the
owner of the business. All profits of a proprietorship are taxed along with all other income of the
owner. Likewise, losses may be deducted from the owner’s income. Writing off losses can save
an owner money when their business is taxed. An IRS Schedule C Form, which is included with
the typical 1040 Form, must be completed when filing income taxes.

Disadvantages
Although the sole proprietorship is the most popular business entity in the United States, most
businesses with significant profits choose alternate organizational forms. This fact stems from
the many disadvantages that are present when operating a sole proprietorship. These
disadvantages include:
         Unlimited personal liability
         Limited to one owner
         Legal life ends with owner’s life
         Increased difficulty in selling the business
         Self-employment taxes

Unlimited personal liability. When a person owns a business that is structured as a sole
proprietorship, that person is faced with unlimited liability. The owner is responsible for all
debts of this business entity without limit. A person can easily loose everything they own,
because there is no differentiation between personal assets and company assets in a sole
proprietorship.

Limited to one owner. A sole proprietorship is limited to a single owner. If more than one
person wants to have ownership rights in a business, this business entity is not an option. Many
times it is more effective to have multiple influences and opinions when making business
decisions. All management responsibilities lie on the sole owner—a situation that is not
attractive to some people.

Increased difficulty in selling the business. When selling a sole proprietorship, the owner has
a very specific target market. Only one person can buy a sole proprietorship in order to keep the
business under the same structure. Since there is no legal separation from the business entity and
the proprietor, a sole proprietorship cannot technically be transferred. When a transfer of a sole
proprietorship is completed, a completely new business is established.

Legal life ends with owner’s life. Unlike other types of business entities, the life of a sole
proprietorship ends when the owner dies. At this time, a new business would have to be created
by the owner of the portion of the estate that contains the former business.
                                                             HoldMyMovie.com                      15


Self-employment taxes. A major disadvantage of owning a sole proprietorship is the double
taxation created by self-employment taxes. These taxes include the Federal Insurance
Contributions Act (FICA) or social security tax. This tax is typically paid once by the employer
and once by the employee. In a sole proprietorship, where a person acts as both the employee
and the employer, the owner has to pay both sides of the tax. This double taxation is a heavy
burden on the finances of a small business.

Conclusion
The reason why a sole proprietorship is inappropriate for a small, multi-person e-business lies in
the fact that only a single person or a married couple can own a sole proprietorship. With
multiple angel investors it would be difficult to impossible to run a business under the control of
one owner. The ease of beginning a sole proprietorship does not outweigh the tax ramifications
and the difficulty of bookkeeping. The inability to have a quick and effective exit plan would
also be a deterrent to many potential investors. Although the sole proprietorship is the most
popular business entity in the United States, it is not the best method under which to for a small
e-business.

General Partnership
Partnerships are a class of business entities in which two or more partners own a business. The
most basic form of a partnership is known as a general partnership. The partners agree to share
all profits, losses, and liabilities of the business venture. The general partnership has some
advantages, which make it more effective than a sole proprietorship, but there are also some
added disadvantages.

Advantages
When two or more people form a general partnership, there are legal advantages, which are
present, which makes it more effective than other multi-owner business entities. These
advantages include:
         Speed and ease of formation
         Ease of operation
         Lack of separate taxation
         Retained earnings must be taxed

Speed and ease of formation. A general partnership is more difficult to form than a sole
proprietorship, but it is the most simple multi-owner business entity. The Uniform Partnership
Act (U.P.A.) governs partnerships in states across the country. Although the U.P.A. varies from
state to state, the basic guidelines remain the same. Generally, no approval is needed when a
general partnership is created. Legal advice is often useful, but not necessary, when contracting
the rights and responsibilities between the partners.

Ease of operation. Like a sole proprietorship, a general partnership is also very easy to operate.
There is a great deal of flexibility that is present in the management of a partnership. All owners
have an equal stake in the business, unless an agreement is created which divides this power
unequally. Often, the partners function as a committee and select a select number of people to
manage the business.
                                                             HoldMyMovie.com                      16


Lack of separate taxation. Taxation of a general partnership is based upon each partner’s share
of the profits or losses. Whether the profits or losses are distributed of retained, each partner is
entitled to the same proportion of the partnership deductions and credits. These deductions or
credits must be accounted for on each partner’s personal tax return. The business is required to
file a Schedule K-1, Form 1065, to disclose to the IRS each partner’s share of the income.

Disadvantages
There are numerous disadvantages of a general partnership, many which are similar to those of a
sole proprietorship. These significant disadvantages include the following:
         Unlimited liability
         Relationship with partners require great trust
         Selling the business can be troublesome
         Retained earnings must be taxed

Unlimited liability. The liabilities of a general partnership are the responsibility of all the
partners. The liabilities of each partner are unlimited, just as they are in a sole proprietorship.
Assets of the partners are subject to seizure to cover the cost of the debts of a general
partnership. A person’s house, car, real estate, and other property are some of the personal assets
that may be seized in as a result of belonging to a general partnership. This unlimited liability is
easily avoidable in other business entities.

Relationships with partners require great trust. Many people prefer the security of a sole
proprietorship to a general partnership. Individual decisions of single partners can have a large
effect on the partnership as a whole. Legal relationships between partnership partners are known
as fiduciaries. Loyalty, honesty, and fairness in business dealings is expected, but in turn, each
general partner is responsible for the negligent acts of the other partners. Partners are
responsible for the tortuous acts of co-partners who are acting within the scope of the partnership
business. Partners would be responsible for their proportion of the penalty in a civil court case.
With or without a partnership agreement, relationships between partners can be a touchy issue.

Selling the business can be troublesome. Because of the fiduciaries, selling a general
partnership can be difficult. Rules are specific regarding the selling of one partner’s portion of
the business. The law recognizes that people want to choose people with whom they will want to
share a fiduciary relationship. All other partners must agree when selling the business, and
therefore, trying to exit from a general partnership can be a difficult task.

Retained earnings must be taxed. Businesses that require a significant amount of retained
capital are adversely affected by the tax rules guiding a general partnership. General partners are
required to be taxed on all earnings whether they are distributed or retained.

Conclusion
A general partnership is not the best entity for which to run a small, e-business. A general
partnership fulfills the need for a structure that allows multiple owners. Angle investors of an e-
business would not be interested in the unlimited liability that owners are subject to in a general
partnership. These same investors would most likely desire a structure that is more flexible than
the committee-style management of a partnership. Exit strategies and profit taking are a difficult
                                                                HoldMyMovie.com                        17


task in the general partnership business entity. Overall, a small, multi-owner e-business is not
best suited to be formed as a general partnership.

Limited Liability Partnership
A second type of partnership is known as a limited liability partnership. Like a general
partnership, a limited liability partnership, or a LLP, is a business that is owned by two or more
people. In this entity, at least one partner is liable for the liabilities of the business. These
people are known as general partners. General partners are responsible for the management
duties of the business. The unique trait of a LLP is that one or more people can be proteded from
the personal liability. People protected by structure of a limited liability partnership are known
as limited partners. These limited partners may not be active in the day-to-day operations of the
business. The limited risk provided to investors creates several advantages for limited liability
partnerships.

Advantages
A large portion of the advantages of a LLP is centered on the limited partner. Advantages that
are presented to a limited partner and a LLP business include:
         Limited partners are shielded from liability
         Investors can be easily attracted
         Lack of separate taxation

Limited partners are shielded from liability. As mentioned, the main benefit of a limited
liability partnership is the fact that limited partners is shielded from the liabilities of the business.
Beyond the original investment in the LLP, limited partners are shielded from the business debts.
This protection allows the limited partners to deduct business losses against their taxes, as well
as to claim their portion of the profits of the company.

Investors can be easily attracted. For several reasons, investors can be easily attracted to
invest money in a limited liability partnership. Investors usually take the role of limited partners
to reduce their risk to the amount of their original investment. Also, because a limited partner
may not take part in the day-to-day operations of the partnership, investors can hedge their
investment and avoid daily commitment to the business. There is no limit to the number of
limited partners, and therefore, a quality limited liability partnership can quickly increase its
capital without bogging down the core management of the business.

Lack of separate taxation. Like a general partnership, there is no separation of taxation for the
partners. Each partner has a right to a specified proportion of the businesses losses and profits.
The deductions and credits of the partners is accounted for on their individual income tax returns.

Disadvantages
With the invent of the limited liability company, LLPs are becoming used less and less
frequently. The disadvantages of limited liability partnerships are apparent when concentrating
on the role of the general partners. These disadvantages include the following:
         General partners are personally liable
         General partner’s interest cannot be transferred to someone else
         Limited partners cannot be involved in the business
                                                                HoldMyMovie.com                        18


General partners are personally liable. Because general partners have a direct impact on the
success of the business, they are personally liable for the success of the business. Generally
partners have the same unlimited liability that sole proprietors have. Liabilities are distributed
amongst the general partners at an evenly distributed or a previously agreed upon proportion.
Like a sole proprietorship and a general partnership, a general partner can lose their house, cars,
property, and other personal assets.

General partner’s interest cannot be transferred to someone else. Like a general partnership,
it can be difficult to transfer the ownership rights of the business. The interest of the general
partners cannot be transferred. The interest of limited liability partners can be transferred but
there also has to be acceptance of the purchaser in order for her or him to become a limited
partner.

Limited partners cannot be involved in the business. Limited partners are not allowed to
participate in the day-to-day operations of a limited liability partnership. If limited partners do
participate at all in the operations of the business, they then lose their shield against the liabilities
of the business.

Conclusion
Since there is still the enormous burden of unlimited liability on the general partners, it would
not be the best option for a small e-business to form a limited liability partnership. Due to the
highly unpredictable nature of small businesses, e-businesses, and newly formed businesses,
general partners would be facing a large risk in forming a LLP. Although limited partners are
motivated to invest in LLPs, those partners have little to no influence on the success of the
business, and therefore, the return on their investment. A limited liability partnership is not the
most effective entity for which to form a small e-business.

Corporation
A corporation is an autonomous legal entity, where all owners, stockholders, managers, and
other people remain separate from the business. There are strict procedures that need to be
followed in the formation of a corporation. State governments oversee the creation of
corporations. There are different types of corporations, which have their own separate
advantages and disadvantages. Two types of corporations include the C corporation and the
subchapter S corporation. A C corporation is the more typical of the two. These entities have
different tax disadvantage and liability advantages that will be discussed.

                                            Advantages
For larger businesses, a corporation is the most effective business entity to form. All companies
that offer stock are known as corporations. Advantages that these companies took advantage of
include:
         Limited liability to shareholders
         Continuity of existence
         Ease of transferring ownership
         Double taxation can be avoided through a subchapter S corporation

Limited liability to shareholders. Shareholders of a business are protected against liability, just
as limited liability partners are. No stockholder is liable for any of the debts of a corporation.
                                                              HoldMyMovie.com                       19


Personal property cannot be seized to pay off liabilities owed by the corporation. One exception
of this advantage is when small, closely held companies borrow money from the bank. The bank
may require the stockholders to guarantee their loan.

Continuity of existence. Corporations have ―legal immortality,‖ which can prove to be a
significant benefit. Neither the death of an owner or the transfer of ownership can cease the
existence of the business. This is much unlike the limited existence of both partnerships and sole
proprietorships.

Ease of transferring ownership. Ownership of a corporation is in the form of stocks. Stocks
are the ownership rights of a company, which can either be freely distributed publicly or tightly
held. Transferring stock is the simplest method of transferring the ownership rights of a
company. No agreements need to be made between the other owners in order for a stock to be
traded. Prices are determined by market demand for ownership in the company.

Double taxation can be avoided through a subchapter S corporation. There are several
means to which corporations can legally avoid disadvantages of corporations. A subchapter S
corporation avoids the double taxation of C corporations. Requirements of a subchapter S
corporation mandate that the business be less than a certain size. To avoid the double taxation,
profits and losses are distributed on a pro rata basis. This hybrid of the partnership and the
corporation has the major advantage of avoiding the double taxation of a C corporation

Disadvantages
The few disadvantages of a corporation, whether it be a C corporation, or a subchapter S
corporation, are significant enough to deter many people from forming corporation. The
following disadvantages are present in corporations:
         Highly regulated nature
         Double taxation
         Lack of influence on management

Highly regulated nature. A corporation is highly regulated in a number of ways. First, the
formation of a corporation requires a large amount of paperwork and other legal proceedings.
Secondly, after incorporation, businesses must adhere to stringent laws regarding how they
conduct their business. In order to form a corporation there is a very strict, time-consuming
process that must be followed. A pre-organization subscription agreement, a corporate charter,
by-laws, and any other forms needed by the state must be created. Meetings must be held with
the board of directors and official records must be kept. After the formation, corporations must
continue to adhere to government regulations, including the Internal Revenue Service. Annual
reports, articles of incorporation, quarterly reports, filings regarding stock splits, and many other
regulations are required in the operation of a corporation.

Double taxation. A major drawback to a corporation, specifically a C corporation, is the double
taxation. This taxation is a large burden on the shareholders of a small business formed as a
corporation. Unlike the other forms of business, corporations do not receive the ―flow through‖
tax benefits. Double taxation includes the taxation that occurs on the income received by the
business, as well as that, which is charged to the shareholder when dividends are paid. The
                                                                   HoldMyMovie.com                          20


double taxation of corporations can be avoided in several ways, but the low tax benefit of other
entities cannot be met. Stockholders must also eventually pay a capital gains tax when shares of
their business are sold.

Lack of influence on management. Stockholders have voting rights within the corporation in
which they hold stock. As the number of stockholders increases, the individual influence of each
voter is decreased. The magnitude of decrease in voting influence a shareholder has depends on
the structure of the voting system of the business. Majority stockholders may also have the
ability to make decisions that are not in the best interest of all other owners. Multiple, influential
shareholders may have disagreements about important decisions. These disagreements could
hinder the success of the corporation.

Conclusion
A small, e-business is not best suited to form a corporation. Double taxation is a large cost that is not
present in businesses that form under different structures. Although there are some tax disadvantages
that can be avoided by a subchapter S corporation, other business entities prove to be more effective.
Owners of a corporation may be disappointed in their lack of influence on the management of the
business. As a business grows, a company usually looks toward the formation of a corporation, but
typically, small businesses begin under the guideline of other business entities.

Limited Liability Company
A limited liability company is a relatively new type of business entity, first formed in Wyoming
in 1977. The limited liability company, or LLC, combines the limited liability benefits of a
corporation with the tax benefits of the sole proprietorship and partnership. The advantages and
disadvantages of this type of business entity prove to be the most effective for a small, multi-
owner e-business.

Advantages
The advantages of a limited liability company specifically benefit the activities of entrepreneurs.
The combination of the following advantages makes a LLC very attractive to new, small
businesses:
          Limited liability
          Avoidance of double taxation
          Owners can manage the business without losing benefits
          Does not require high “maintenance” costs
          Ownership rights can be separated from profit/loss rights

 Limited liability. Like a corporation, owners of a LLC, known as managers, are exempt from
   the liabilities of the business. Debts owed by the company are not the responsibility of the
  managers. The personal assets of the owners of a limited liability company cannot be seized
                         unless another contract or contracts voids this right.

Avoidance of double taxation. In addition to the benefit of limited liability, managers are not
double taxed on the profits of the business. A LLC is taxed like a partnership and a subchapter S
corporation, where taxes ―flow through,‖ and are paid once on the annual tax returns of each
manager.
                                                              HoldMyMovie.com                        21


Owners can manage the business without loosing benefits. The reason a limited liability
company is a better option than both a partnership and a subchapter S corporation lies in the
ability of managers to operate the company without loosing their benefits. Members of a LLC
can actively participate in the activities of the business without losing the limited liability of
limited liability partnerships. For entrepreneurs desiring to hedge their risks in starting a new
business, a LLC offers the ability to take this active control without being faced with unlimited
liabilities.

Does not require high “maintenance” costs. One of the disadvantages of the subchapter S
corporation is the high ―maintenance‖ costs that are attributed to the rigid structure of the
business. Limited liability companies are not required to adhere to the strict rules that are set out
by state and federal governments regarding corporations.

Ownership rights can be separated from profit/loss rights. Unlike the other business entities
where profits and losses are distributed through proportionately to owners, the ownership rights
of managers can be separated form their profit and loss rights. This means that if a manager
owns 10% of the company, they are not restricted to 10% of the rights to the profits or the losses.
This allows managers to distribute profits and losses base upon their own system, taking their
own values and relationships into consideration.

Disadvantages
To entrepreneurs, there are only a few minor disadvantages that are present in a limited liability
company. Two of these disadvantages include:
         Some liabilities are still present
         Specifically benefits entrepreneurial businesses

Some liabilities are still present. Like a corporation, there may be some instances in which a
manager may need to forgo some of their protection against company liabilities. There are
certain personal agreements such as bank loans, leases, and other legal documents, which are
often necessary in the operation of a limited liability company. These risks assumed in personal
guarantees are inevitable with any business whether it be a sole proprietorship, partnership, or
corporation.

Specifically benefits entrepreneurial businesses. The structure of a limited liability company
was meant to help entrepreneurs and small businesses. A LLC is not the best business entity for
a company that needs to be able to quickly trade stock and have a very large number of owners.
Likewise, a small business that simply wants to get into business quickly without worrying about
tax and liability implications would be better suited for another business entity. The LLC
specifically benefits entrepreneurial businesses.

Conclusion
In the formation of a small, multi-owner e-business, the best business entity to for is a limited
liability company. This type of company foster the growth of small businesses by offering
limited liability, avoidance of double taxation, the ability for owners to manage their business
without loss of benefits, and the ability to separate ownership rights from profit/loss rights. E-
business is a rapidly growing type of business that many investors view as risky. With a limited
                                                             HoldMyMovie.com                        22


liability company, investors can have the flexibility of being owners of a sole proprietorship or
partnership, while still having the security of a corporation. A limited liability company is the
best option for entrepreneurs in the field of e-business.


                     A Limited Liability Company Operating Agreement

    This Operating Agreement is executed by the initial Member of HomeMyMovie.com, a
limited liability company formed under Ohio law, to be effective on November 15, 2000.
    In consideration of the mutual covenants set forth in this agreement, the Members agree to all
terms, covenants and conditions set forth, and agree to be bound by any amendments to the
Operating Agreement that may later be enacted. The Members executing this Operating
Agreement intend that it will be the sole source of their undertakings with regard to the
Company. To the extend that any provision of the Operating Agreement may be found invalid or
inoperative under any provision of the law, it will be deemed amended with the law. The signing
Members further agree that any persons becoming members after the executing of this Operating
Agreement will be bound by all of its provisions (including any amendments later adopted).

                                       THE AGREEMENT

                                            ARTICLE I
                                           FORMATION
         1.1 Name. The name of the Company is HoldMyMovie.com. All business of the
 Company will be transacted in the Company’s name.
     1.2. Business. This Company has been formed under the laws of the State of Ohio by the
filing of Articles of Organizations with the Ohio Secretary of State on or about November 15,
2000.
     1.3. Registered Agent. The Company’s registered agent for service is Bridget Brady, whose
address is 28332 Knickerbocker.
     1.4. Place of Business. The Company’s principal place of business is Bridget Brady’s House,
City of Bay Village, Ohio.
     1.5. Initial Members. The initial Members of the Company are David Benseler, Bridget
Brady, Jesse Claypool, Matthew Kahn, and Rebecca Shay.

                                           ARTICLE II
                                           MANAGER
    2.1 Number. There will be one Manager, who will be a Member of the Company. The initial
Manager is Bridget Brady.
    2.2 Election of Manager Vacancies. The Manager will be elected at each annual meeting of
Members or at a special meeting called for the purpose of electing the Manager.
    2.3 Term of Office; Resignation. The Manger will hold office until the next annual meeting
of the Members, or until a successor is elected, or until the Manager’s resignation, removal from
office or death.
    The Manager may resign at any time orally at a meeting of the Members; or by submitting a
writing to that effect to the Members. Such resignation will take effect immediately or at another
time specified by the Manager.
                                                              HoldMyMovie.com                      23


    2.4 Replacement of Manager. Any vacancy created in the manager position may be filled by
another manager selected by the remaining Managers, or by the Members.
         2.5 Manager’s Compensation. The Manager will be entitled to compensation as
determined by the Members at the meeting of the Members. Additionally, the Manager will be
entitled to reimbursement of out-of-pocket expenses incurred on behalf of the Company.
         2.6 Books and Records. The Manager (or his or her designee) will maintain the books
and recorded of the company at the principal place of business, and will make them reasonably
available to any member at any reasonable time. The books must be maintained in accordance
with generally-accepted professional principles. The manager will also be responsible for filing
of all required tax returns, and for the withholding and payment of employee taxes.
    2.7 Bank Accounts. All transactions of the Company will be conducted through one or more
bank accounts and charge accounts, established by the Manager with the approval of the
Members. Small transactions of less than $25 may be handled through a petty cash fund, but will
be subject nonetheless to proper accounting.

                                            ARTICLE III
                                   MEETINGS AND MEMBERS
    3.1 Annual Meeting. The annual meeting of the Members of the Company
HoldMyMovie.com [for the purposes of electing a Manager, considering proposals laid before
the meeting, and transacting any other business properly brought before the meeting,] will be
held at the principal office of the company in the City of Bay Village, in Cuyahoga County,
Ohio, or at any other place, either within or without the state of Ohio, be designated by the
Manager and specified in the notice of the meeting. Each annual meeting will b held on the last
Friday each June, if not a legal holiday, and , if a legal holiday, then on the next succeeding
business day.
    3.2 Notice of Meetings. Not less than 10 nor more than 60 days before the date fixed for any
meeting of Member, written notice stating the time and place of the meeting (and, in the case of a
special meeting, the purpose of the meeting) must be given to each Member entitled to vote at
the meeting. Any notice may be waived in writing or by a member’s attendance at the meeting.
    3.3 Special Meetings. Special meetings of the Members may be held on any day, when called
by the Manager, or when called by Members who hold at least 50 percent of all units outstanding
and entitled to vote at the special meeting. Upon request in writing delivered either in person or
by certified mail, return receipt requested, by any members entitled to call a meeting of
Members, the Manager will promptly give notice to all members entitled to notice of the
upcoming meeting.
    If notice is not given within seven days after the delivery or mailing of the request, the person
or persons calling the meeting may fix the time of the meeting and give notice of it in the manner
provided by law or by this Operating Agreement, or may cause notice to be given by any
designated representative. Each special meeting will be called to convene between 8:00a.m.and
6:00 p.m., and will be held at the principal office of the company.
    3.4 Quorum and Adjournments. Except as may be otherwise provided by law or by the
articles of organization, the holders of a majority of the voting power of the Company will
constitute the quorum necessary for the meeting to occur.
    3.5 Voting. Voting on all matters will be based on unit ownership, with each unit having one
vote.
                                                            HoldMyMovie.com                      24


    3.6 Additional Members. The Members may add additional persons as members for such
consideration and upon such other terms as they deem appropriate, which terms must not be
inconsistent with the provisions of the Operating Agreement.

                                             ARTICLE IV
                                          INDEMNIFICATION
    4.1 Indemnification. The Company will indemnify, defend and hold each Member harmless
for all costs, losses, liabilities, and damages paid or accrued by the Member in connection with
the business of the Company, to the fullest extent provided or allowed by the laws of the State of
Ohio.
    4.2 Purchase of Insurance. The Company may purchase and maintain insurance on behalf of
any Member, employee or other agent of the company, against any liability asserted against him
or her and incurred by him or her in that capacity.

                                             ARTICLE V
                             CERTIFICATE FOR UNITS OR SHARES
    5.1 Form of Certificates. Each holder of units or shares will be entitled to one or more
certificates, signed by the manager, which will set forth the number of units or shares held by
him or her in the Company. However, no certificate for units or shares will be issued until it is
fully paid. The absence or loss or destruction of a certificate will not affect a member’s rights.
    5.2 Transfer of Units of Shares. Subject to the laws of Ohio and the terms of the Agreement,
units or shares of the company will be transferable upon the books of the Company by a Member
by surrendering his or her certificates with a properly executed assignment and with proof of
authenticity of the signatures to the assignment as the Company may reasonably require. The
transferee or assignee must not be a Member and will have no right to participate in the
management of the Company unless and until the Members unanimously approve the transfer or
assignment in writing or at ta properly-convened Members’ meeting, No transfer or assignment
will be approved until the prospective Member has agreed, in writing, to be bound by all terms of
the Operating Agreement, as amended to that date.
     5.3 Lost, Stolen or Destroyed Certificated. The Company may issue a new certificate for
units or shares in place of any certificate alleged to have been lost, stolen or destroyed. The
Manager may, in his or her discretion, require the posting of a bond containing any terms
required by the manager to protect the Company or any person injured by the execution and
delivery of a new certificate.

                                          ARTICLE VI
                           CAPTIAL AND PROFITS AND LOSSES
   6.1 Capital Contributions. The initial capital contributions of the Members (which will be
considered their opening capital accounts) and the number of their owned units are as follows:
   Name               Capital Contributions       No. Of Units
   David Benseler             $1,000               5
       Bridget Brady              $1,000               5
       Jesse Claypool             $1,000               5
       Matthew Kahn               $1,000               5
       Rebecca Shay               $1,000               5
                                                             HoldMyMovie.com                      25


         An individual capital account will be established and maintained for each member and
will be credited with the amount of that Member’s capital contribution of the Company. A
Member will not be entitled to interest on his or her capital contribution, or to withdraw any part
of his or her capital account, or to receive any distribution of the Company, except as specifically
provided in the agreement or by law.
         6.2 Profits and Losses. The net profits and the net losses of the Company will be shared
by the Members in the proportion to their respective capital interest in the Company. The terms
―net profits‖ and ―net losses‖ will mean, for each fiscal year of other period, an amount
determined in accordance with the Internal Revenue Code of 1986 (the ―Code‖), as amended,
with the goal that the Company is treated for tax purposes as a partnership under the Code.
         6.3 Cash Flow. The ―cash flow of the Company‖ for each fiscal year or other period will
be equal to the net profits or net losses of the Company for that year or period, determined in
accordance with Section 6.2 above plus:
(a). Depreciation and other non cash charges deducted in determining net profits or net losses;
(b). The net cash proceeds resulting from any refinancing of Company property or the sale of any
Company property received during that year or period, and minus;
(c). Principal payments made during that year or period on Company loans;
(d). Any other cash expenditures made during that year or period which have not been deducted
in determining the net profits or net losses of the Company for that year or period; and
(e). Any amount determined by the Members to be required to maintain sufficient working
capital and/or a reserve for repairs and/or replacements.
     The cash flow of the Company will be determined for each fiscal year and, as so determined,
will, in proportion to their respective interests in the Company, be distributed to the Members as
often as determined by the Manger, but not less often than annually.
     6.4 Fiscal Year. The Company’s books will be kept on a calendar year basis.

                                             ARTICLE VII
                                        ADDITIONAL FUNDS
    7.1 New Capital or Loans. The Members acknowledge that the income produced by the
business of the Company may be insufficient to pay all of the costs of operating the business.
Included within the meaning of the term ―costs of operation‖ (and without limiting the generality
of the term), are all real estate taxes, assessments and other governmental charges, insurance
premiums, costs of repair and maintenance, costs of improvements and the principal and interest
payment required to be made on Company loans. If, as determined by a majority-of-interest vote
of all those who hold an interest in the Company, additional funds are required to pay the costs
of operating, those additional funds will be advanced to the Company by the members (and any
assign/transferee of a company interest who has not been admitted as Member) in proportion to
the capital interest each Member founds advanced to the Company will be treated as additional
capital contributions or loans, as determined by the vote of those holding an interest in the
Company.

                                         ARTICLE VIII
                 RESTRICTIONS ON MEMBERSHIP TRANSFERABILITY
    8.1 New Members. A new Member may be admitted into the Company only if: (i) all the
other Members approve of the admission; and (ii) the new Member executes any instruments
reasonably necessary to effect the admission and to confirm the agreement of the person or entity
                                                             HoldMyMovie.com                      26


being admitted to be bound by all of the covenants, terms and conditions of this Agreement then
in effect. The new Member will receive a capital interest and an interest in the net profits and net
losses and cash flow of the Company in an amount to be determined by all the other Members at
the time of admission.
    8.2 Withdrawal from the Company. The Company will have no obligation to purchase some
or all of the Company’s interest held by a Member. No member may partially or completely
withdraw for the Company.
    8.3 Restrictions on Transfer and Encumbrance; Right of First Refusal. Except as otherwise
specifically permitted by this Agreement, a Member may not, without the prior written consent
of all Members, transfer, assign, sell, give, pledge, hypothecate or otherwise encumber his or her
interest in the Company (―Interest‖), and any attempt to do any of the above without prior
written consent will be null and void and of no effect.
    In the even of a proposed sale or other disposition for value to an outside party or all or any
portion of his or her Interest by any Member (―the Seller‖), whether voluntary or involuntary,
advance written notice must be give by certified mail, return receipt requested, to the Company,
specifying the name of the prospective purchaser or transferee, the extent of the interest proposed
to be sold or otherwise disposed of (―Offered Interest‖), and the price and all other terms and
conditions of the proposed transaction.
    For a period of 20 days after its receipt of this notice, the Company will have the first right
and option to purchase the entire Offered Interest on the same terms as are set forth in the notice.
The Company may purchase the Offered Interest utilizing any assets, line of credit or other
sources of funds that may be obtained for that purpose. After that, the Offered Interest purchased
by the Company will be retired, and all further allocations and distributions of the Company to
the Members will be in the proportion which the interest of each remaining Member bear to the
interests of all remaining Members after retirement of the Offered Interest.
    In the event the Company does not elect to purchase the Offered Interest, the Seller will have
thee right, for an additional period of 20 days (not exceeding a total of 40 days from the date of
the Seller’s notice to the Company), to sell or otherwise dispose of the Offered Interest to the
proposed purchaser or transferee (the ―Purchaser‖) on the same terms and conditions and for the
same price as were set forth in the seller’s notice to the Company. If this transaction with the
member is not consummated within the 40-Day period set forth above, the reinstated and the
Seller will not have the right to sell the Offered Interest to a purchaser until the Seller has once
again complied with all provision of this Section 8.3.
    If a sale or other disposition to an outside party takes place pursuant to this Section 8.3, the
Members will be deemed to have approved of the Purchaser’s admission into the Company.
    8.4 Death of a Member; Waiver of Statutory Appraisal. On the death of a Member, an
appraisal of the Company assets and any right of the deceased Member’s estate to receive a cash
amount equal to the value of the deceased Member’s interest in the Company is waived.
    8.5 Cash Flow Distribution. Following the death of a Member, the estate of the deceased
Member will be entitled to receive the deceased Member’s proportionate share of the cash flow
of the Company for that part of the Company’s fiscal year that elapsed prior to the deceased
member’s death.
    8.6 Mandatory Purchase and Sale of Company Interest. The company will purchase, and the
deceased member’s estate will sell, the deceased member’s Interest for the price determined as a
part of this agreement, or as that document is amended by all Members.
                                                             HoldMyMovie.com                     27


                                           ARTICLE IX
                              DISSOLUTION AND TERMINATION
     9.1 Termination of the Company. The company will be terminated and dissolved upon:
(a). The vote of all persons holding any interest in the Company
(b). The expiration of the term of the company; or
(c). The death, retirement or resignation of a Member, if the remaining members do not vote
unanimously to constitute the business of the Company.
     On the termination of the Company, a full and general accounting will be taken of the
Company’s business, and the affairs of the Company will be would up. Any net profits or net
losses earned or incurred since the previous accounting will be allocated among the Members.
The Members will wind up and liquidate the company by selling the Company’s assets and
distribution the net proceeds from the assets, in cash or in kind, after the payment of all company
liabilities (including expenses and fees incurred in connection with the sale of assets and
liquidation), to the members in proportion to the positive balances in their capital accounts.
Debts to Members will be considered as other debts, and will be paid before pro rata
distributions to Members.
     9.2 Continuing Governance. In the event of a dissolution of the company, the business affairs
of the Company will continue to be governed by the terms of this Agreement during the winding
up of the Company’s business and affairs.

                                              ARTICLE X
                           AMENDMENTS AND OTHER PROVISIONS
    10.1 Vote for Amendments. This Operating Agreement may be amended, or a new operating
agreement may be adopted, but the affirmative vote of all Members.
        10.2 No Third-Party Rights. This Operating Agreement does not give any third
party rights to any person as a third-party beneficiary.
    10.3 Nature of Interest. A Member’s interest will be considered personal property for all
purposes.
    10.4 Binding Agreement. This Operating Agreement will bind the Members, their heirs,
successors and assigns.
    10.5 Headings. The headings in this agreement are for convenience only, and will not be
construed as substantive.
    10.6 Word Meanings. Where the context requires, singular words will be read as plural, and
gender based words will be deemed interchangeable.
    10.7 Partition. The Members waive any right they may otherwise have to partition the assets
of the Company.
    10.8 Mediation and Arbitration. The Members will mediate any disputes that arise under this
Agreement or in regard to Company affairs. If mediation does not lead to resolution of the
dispute, the parties will submit it to arbitration. Mediation and/or arbitration will be conducted
under the rules of an agreed party located in Cleveland, Ohio in Cuyahoga County or a similar
organization agreed upon by the parties.
    IN WITNESS, the Members have executed this Agreement to be effective on the day and
year first written above.

MEMBERS:
                                                                                   HoldMyMovie.com                                28


David Benseler ___________________________________________
             Signature and Date

Bridget Brady ___________________________________________
           Signature and Date

Jesse Claypool ___________________________________________
           Signature and Date

Matthew Kahn ___________________________________________
         Signature and Date

Rebecca Shay ___________________________________________
          Signature and Date


                                    Drafter’s Notes
Adapted from form provided by Edward G. Marks, Esq., of Hardin & Hill, Cincinnati, Ohio.


[State Seal]
Prescribed by
DeForest B. Soaries Jr, Secretary of State
30 East Broad Street, 14th Floor
Columbus, Ohio 43226-0418
Form LRA November 17, 2000

CERTIFICATE OF RESTATEMENT OF ARTICLES OF ORGANIZATION OF A LIMITED LIABILITY
COMPANY
The undersigned, being a member, manager or authorized representative of HoldMyMovie.com, and Ohio limited liability
company, does hereby certif. That the undersigned is duly authorized to execute this restatement, and hereby certifies that the
Articles of Organization of the above-named limited liability company are restated as follows:
     First: The name of said limited liability company will be HoldMyMovie.com.
     Second: This limited liability company will exist for a period of 10 years.
     Third: The address to which interested persons may direct requests for copies of
                any operating agreement and any bylaws of this limited liability company
                is:
                    28332 Knickerbocker
                Bay Village, Ohio
                44140
    [ ] Please check this box if additional provisions are attached. Additional provisions attached
are incorporated and made a part of these articles of organization.
    Fourth: Purpose (optional)
    IN WITNESS, the undersigned has executed this certificate on
November 17, 2000.
                              HoldMyMovie.com

                              By: David Benseler
                                                                             HoldMyMovie.com                               29


                                 Bridget Brady
                                 Jesse Claypool
                                 Matthew Kahn
                                 Rebecca Shay


        The articles of organization of a limited liability company may be amended at any time
and for any proper purpose by filing a certificate of amendment with the Secretary of State.
        However, a certificate of amendment amending the articles of organization must be filed
within 30 days after the occurrence of any of the following:
        (1) the name of the limited liability company is changed;
        (2) the period of the limited liability company’s duration is changed;
        (3) the address to which persons may direct requests for copies of any operating
            agreements or bylaws of the limited liability company is changed; or
        (4) any other information that is set forth in the articles of organization has changed. 18
        The certificate of amendment must be signed by a member, manager, or
authorized representative of the limited liability company and that person must include
authorization to execute the certificate. 19
FOOTNOTE 18. Ohio Revised Code 1705.08.
FOOTNOTE 19. Ohio Revised Code 1705.08




[State Seal]
DeForest B. Soaries Jr , Secretary of State
30 East Broad Street, 14th Floor
Columbus, Ohio 43266-0418
Form LC0 November 17, 2000

                                 ORIGINAL APPOINTMENT OF AGENT
     The undersigned, being at least a majority of the members of HoldMyMovie.com, appoint Bridget Brady to be the agent
upon whom any process, notice or demand required or permitted by statute to be served upon the limited liability company may
be served. The complete address of the agent is:28332 Knickerbocker, Bay Village, Ohio 44140
    David Benseler [(member)]
    Bridget Brady [(member)]
     Jesse Claypool [(member)]
     Matthew Kahn [(member)]
     Rebecca Shay [(member)]
(If insufficient space for all signatures, please attach a separate sheet containing additional
signatures)
                               ACCEPTANCE OF APPOINTMENT
    The undersigned, named in this form as the statutory agent for HoldMyMovie.com, acknowledges and accepts the
appointment of agent for the limited liability company.

Drafter’s Notes
Adapted from prescribed form, available from the office of the Secretary of State.
Ohio Revised Code 1705.06(A). Articles of organization must be accompanied by an original appointment of agent.
                                                          HoldMyMovie.com         30


                                        Appendix B
                                      Team 5 Survey 2
                                Video Rental Store Companies


1) Would you be interested in something that would increase you revenues?


2) Would you be interested in having an online site?


3) Would you be interested in allowing your customers to reserve videos online?


4) Would you like to have this work outsourced?


Results of 20 small video stores:

Question 1 (yes) 20 (no) 0   100%
Question 2 (yes) 17 (no) 3   85%
Question 3 (yes) 17 (no) 3   85%
Question 4 (yes) 14 (no) 6   70%
                                                           HoldMyMovie.com                       31


                                         Appendix C
                            Video Rental Market Facts and Statistics

Video Equipment Penetration
       86 million U.S. households own at least 1 VCR
       More than half of households that own VCRs own more than 1 unit
       Over 40 million U.S. households will own DVD players in 7 years

Movie Studio Economics
       50% of the domestic revenue of Hollywood studios is generated from video

Video Rental Affordability
       1/3 of U.S. households don’t subscribe to basic cable, partially because of the expense

At-Home Movie Consumption Market Share

Year                 Video Rental       Pay Per View       Cable                   Satellite
1990                       $9.8               $.25                  -                       -
1999                      $18.5                 -                 $.43                    $.53
2005                      $22.8                 -                $3.56                   $1.02

          1990 Title: $10.1 Billion                    1999 Title: $19.5 Billion
          Pay Per                                                Satellite
           View                                        Cable       3%
            2%                                          2%



                        Video                                        Video
                        Rental                                       Rental
                         98%                                          95%


           1990 Title: $10.1 Billion
           Pay Per
            View
             2%




                        Video
                        Rental
                         98%
                                                             HoldMyMovie.com                      32



                                          Appendix D
                                        Team 5 Survey 1
                                     Video Rental Audience
We are proposing the development of a software that would allow customers to get online to rent
videos. While the customer is online they will be able to view trailers of videos and read movie
reviews. Customers will now if the video they want is available, and where the video store that
has that video is located. The customer will then be able to reserve that video through their credit
card.

Please answer the following question to help us with our work, Thank You.

1-If you could reserve a video online before you went to the video store would you?

2-Would you like there to be a site online where you could view video trailers and read movie
reviews?

3-Would you rather browse for videos online at home or at the video store?

4-If you reserved a video online would you mind traveling to the store to pick it up?

5-How far would you travel to the store?

6-Would you feel comfortable renting videos online with your credit card?

7-How often would you use this service?
1-More than once a week 2-Once a week 3-Once a month

8-How often do you rent videos?
1-More than once a week 2-Once a week 3-Once a month

9-Would you rent videos more often if you rent from your computer at home while you read
movie review and view trailers?
                                                              HoldMyMovie.com                       33


                                          Appendix E
                                   Advertising and Promotion

Radio
Radio is one of the oldest and most effective ways to advertise. HoldMyMovie.com can create
awareness very quickly reaching many people all across Cleveland by using radio. With an easy
name like HoldMyMovie.com, listeners will be able to remember what they hear on the radio
long enough to go home and type it into their computer. Also many people have radios turned on
at the office where a computer is available at their desk. This provides an easy way for listeners
to check out the HoldMyMovie.com website. The first week after HoldMyMovie.com’s launch
$6,000 will be spent on 200 one minute spots that will be spread over a course of three weeks.
(Joe Jennings Interview) For the 8 hours of a drive time a day (6am-10am, 3pm-7pm) a
commercial will be played every hour. (Joe Jennings Interview) This should develop the
awareness that HoldMyMovie.com desires

Flyers
To reinforce the radio advertising, flyers will be distributed at the video stores and will be
included in the monthly statements sent to customers. In case customers heard the commercial
but forgot the name, the flyer will have HoldMyMovie.com’s URL on the flyer. The cost will be
$4,675 to print 100,000 flyers. (Joe Jennings)

After the initial $12,675 in advertising costs there will be $7,325 left to spend over the rest of the
year on what we decide will be the best promotion technique for that particular period of time
                                                                 HoldMyMovie.com                                   34


                                               Appendix F
                                                Financial




Pro Forma Monthly Cash Flows- Year 1
                               Month 1       Month 2       Month 3       Month 4       Month 5       Month 6

                    Start-up     Jan. 2002 Feb. 2002 Mar. 2002 Apr. 2002 May. 2002 June.
                                                                                   2002
Units                          5          3        3         3          3        3          3
Monthly    $                   0       1500     2400      3300       4200     5100       6000
Payments
Office                      0            0           0             0             0             0             0
Server                 17810           167         167           167           167           167           167
Advertising/Promo           0         5000        5000          5000           625           625           625
Wages                       0         5000        5000          5000          5000          5000          5000
Utilities                   0            0           0             0             0             0             0
Phone                      60           43          43            43            43            43            43
Equipmen                5,000          100         100           100           100           100           100
Employee Benefits          55           55          55            55            55            55            55
Mileage Expense           667          667         667           667           667           667           667
Insurance                  86           46          46            46            46            46            46
Software                 4231          147         147           147           147           147           147
Warranty exp.            1750         1750        1750          1750          1750          1750          1750
Consulting               2500         2500        2500          2500          1500           500           500
Marketing exp.          1,500           50          50            50            50            50            50
Other                    1500          500         500           500           500           500           500
Cash Outflow           35,159       16,025      16,025        16,025        10,650         9,650         9,650
Cash Inflow                 0        1,500        2400          3300          4200          5100          6000
Carry                 100,000       64,841      50,324        36,609        23,884        17,434        12,884
Over
Ending     $           64,841       50,324      36,609        23,884        17,434        12,884         9,234
Cash

Cash Flow from
Operation $                    0         0             0             0             0             0             0
s


Pro Forma Monthly Cash Flows- Year 1 cont.
______________________________________________________________________________
                    Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
                    Jul. 2002 Aug. 2002 Sept.         Oct. 2002 Nov. 2002 Dec. 2002
                                           2002
Units                         3         3           3          3        3         3
Monthly    $              6,900     7,800       8,700      9,600   10,500    11,400
Payments
Office                        0         0           0          0        0         0
Server                      167       167         167        167      167       167
Advertising/Promo           625       625         625        625      625       625
                                                          HoldMyMovie.com                     35


Wages                    5000      5000      5000      5000       5000      5000
Utilities                   0         0         0         0          0         0
Phone                      43        43        43        43         43        43
Equipmen                  100       100       100       100        100       100
t
Employee Benefits          55         55        55        55        55        55
Mileage Expense           667        667       667       667       667       667
Insurance                  46         46        46        46        46        46
Software                  147        147       147       147       147       147
Warranty exp.            1750       1750      1750      1750      1750      1750
Consulting                500        500       500       500       500       500
Marketing exp.             50         50        50        50        50        50
Other                     500        500       500       500       500       500
Cash Outflow            9,650      9,650     9,650     9,650     9,650     9,650
Cash Inflow             6,900      7,800     8,700     9,600    10,500    11,400
Carry                   9,234      6,484     4,634     3,684     3,634     4,534
Over
Ending     $            6,484      4,634     3,684     3,634     4,534     6,284
Cash

Cash Flow from
Operation $                 0         0          0         0    14,184    15,934
s


Pro Forma Monthly Cash Flows- Year 2
                    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total
                    Jan. 2003 Feb. 2003 Mar. 2003 Apr. 2003 May. 2003 June.      Year 2
                                                                      2003
Units                        3          3       3          3        3          3         36
Monthly    $            12,300    13,200   14,100     15,000   15,900    16,800 206,400
Payments
Office                       0          0       0          0        0          0          0
Server                     167        167     167        167      167        167       2004
Advertising/Promo         5000       5000    5000        625      625        625     33750
Wages                     5000       5000    5000       5000     5000       5000     75000
Utilities                    0          0       0          0        0          0          0
Phone                       43         43      43         43       43         43        516
Equipmen                   100        100     100        100      100        100      1,500
t
Employee Benefits           55         55      55         55       55         55        660
Mileage Expense            667        667     667        667      667        667       8004
Insurance                   46         46      46         46       46         46        552
Software                   147        147     147        147      147        147       1764
Warranty exp.             1750       1750    1750       1750     1750       1750     21000
Consulting                 500        500     500        500      500        500       6000
Marketing exp.              50         50      50         50       50         50        600
Other                      500        500     500        500      500        500       6000
Cash Outflow            14,025    14,025   14,025      9,650    9,650      9,650 157,350
Cash Inflow             12,300    13,200   14,100     15,000   15,900    16,800 206,400
Carry                    6,284      8,934  12,484     16,934   17,434    23,684     76,743
Over
Ending     $             8,934    12,484   16,934     17,434   23,684    30,834     76,743
                                                        HoldMyMovie.com                    36


Cash

Cash Flow from
Operation $             2,650     3,550     4,450     5,350     6,250     7,150   75,300
s


Pro Forma Monthly Cash Flows- Year 2 cont.
______________________________________________________________________________
                    Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
                    Jul. 2003 Aug. 2003 Sept.        Oct. 2003 Nov. 2003 Dec.2003
                                           2003
Units                         3         3          3          3        3         3
Monthly    $             17,100   18,600      19,500    20,400    21,300    22,200
Payments
Office                        0         0          0          0        0         0
Server                      167       167        167        167      167       167
Advertising/Promo           625       625        625        625      625       625
Wages                      7500     7500        7500       7500     7500      7500
Utilities                     0         0          0          0        0         0
Phone                        43        43         43         43       43        43
Equipmen                    150       150        150        150      150       150
t
Employee Benefits            55        55         55         55       55        55
Mileage Expense             667       667        667        667      667       667
Insurance                    46        46         46         46       46        46
Software                    147       147        147        147      147       147
Warranty exp.              1750     1750        1750       1750     1750      1750
Consulting                  500       500        500        500      500       500
Marketing exp.               50        50         50         50       50        50
Other                       500       500        500        500      500       500
Cash Outflow             12,200   12,200      12,200    12,200    12,200    12,200
Cash Inflow              17,100   18,600      19,500    20,400    21,300    22,200
Carry                    30,834   35,734      42,134    49,434    57,634    66,734
Over
Ending     $             35,734   42,134      49,434    57,634    66,734    76,734
Cash

Cash Flow from
Operation $             4,900     6,400     7,300     8,200     9,100   10,000
s


Pro Forma Monthly Cash Flows- Year 3
                    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
                    Jan. 2004 Jan. 2004 Mar. 2004 Apr. 2004 May. 2004 June.
                                                                      2004
Units                        3         3        3          3        3         3
Monthly    $            23,100    24,000   24,900     25,800   26,700    27,600
Payments
Office                       0         0        0          0        0         0
Server                     167       167      167        167      167       167
Advertising/Promo          625       625      625        625      625       625
                                                           HoldMyMovie.com                      37


Wages                     7500      7500      7500       7500      7500       7500
Utilities                    0         0         0          0         0          0
Phone                       43        43        43         43        43         43
Equipmen                   150       150       150        150       150        150
t
Employee Benefits           55        55         55        55        55         55
Mileage Expense            667       667        667       667       667        667
Insurance                   46        46         46        46        46         46
Software                   147       147        147       147       147        147
Warranty exp.             1750      1750       1750      1750      1750       1750
Consulting                 500       500        500       500       500        500
Marketing exp.              50        50         50        50        50         50
Other                      500       500        500       500       500        500
Cash Outflow            12,200    12,200     12,200    12,200    12,200     12,200
Cash Inflow             23,100    24,000     24,900    25,800    26,700     27,600
Carry                   76,734    87,634     99,434   112,134   125,734    140,234
Over
Ending     $            87,634    99,434   112,134    125,734   140,234    155,634
Cash

Cash Flow from
Operation $             10,900    11,800     12,700    13,600    14,500     15,400
s


Pro Forma Monthly Cash Flows- Year 3 cont.
______________________________________________________________________________
                    Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
                    Jul. 2004 Aug. 2004 Sept.        Oct. 2004 Nov. 2004 Dec. 2004 Year 3
                                           2004
Units                         3         3          3          3        3         3         36
Monthly    $             28,500   29,400      30,300    31,200    32,100    33,000 336,600
Payments
Office                        0         0          0          0        0         0          0
Server                      167       167        167        167      167       167      2,004
Advertising/Promo           625       625        625        625      625       625      7,500
Wages                      7500     7500        7500       7500     7500      7500    90,000
Utilities                     0         0          0          0        0         0          0
Phone                        43        43         43         43       43        43        516
Equipmen                    150       150        150        150      150       150      1,800
t
Employee Benefits            55        55         55         55       55        55        660
Mileage Expense             667       667        667        667      667       667      8,004
Insurance                    46        46         46         46       46        46        552
Software                    147       147        147        147      147       147      1,764
Warranty exp.              1750     1750        1750       1750     1750      1750    21,000
Consulting                  500       500        500        500      500       500      6,000
Marketing exp.               50        50         50         50       50        50        600
Other                       500       500        500        500      500       500      6,000
Cash Outflow             12,200   12,200      12,200    12,200    12,200    12,200 146,400
Cash Inflow              28,500   29,400      30,300    31,200    32,100    33,000 336,600
Carry                  155,634 171,934 189,134 207,234 226,234 246,134 266,934
Over
                                                           HoldMyMovie.com                      38


Ending    $            171,934   189,134   207,234    226,234   246,134    266,934   266,934
Cash

Cash Flow from
Operation $             16,300    17,200     18,100    19,000    19,900     20,800   190,200
s


Pro Forma Monthly Cash Flows- Year 4
                    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
                    Jan. 2005 Feb. 2005 Mar. 2005 Apr. 2005 May. 2005 June.
                                                                      2005
Units                        6          6       6          6        6          6
Monthly    $            34,800    36,600   38,400     40,200   42,000    43,800
Payments
Office                       0          0       0          0        0          0
Server                     167        167     167        167      167        167
Advertising/Promo          625        625     625        625      625        625
Wages                   12500      12500    12500      12500   12500      12500
Utilities                    0          0       0          0        0          0
Phone                       76         76      76         76       76         76
Equipmen                   250        250     250        250      250        250
t
Employee Benefits           55         55      55         55       55         55
Mileage Expense           1153       1153    1153       1153     1153       1153
Insurance                   83         83      83         83       83         83
Software                   274        274     274        274      274        274
Warranty exp.             2250       2250    2250       2250     2250       2250
Consulting                 500        500     500        500      500        500
Marketing exp.             150        150     150        150      150        150
Other                      700        700     700        700      700        700
Cash Outflow            18,783    18,783   18,783     18,783   18,783    18,783
Cash Inflow             34,800    36,600   38,400     40,200   42,000    43,800
Carry                   76,734    92,751 110,568 130,185 151,602 174,819
Over
Ending     $            92,751 110,568 130,185 151,602 174,819 199,836
Cash

Cash Flow from
Operation $             16,017    17,817     19,617    21,417    23,217     25,017
s


Pro Forma Monthly Cash Flows- Year 4 cont.
______________________________________________________________________________
                    Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
                    Jul. 2005 Aug. 2005 Sept.        Oct. 2005 Nov. 2005 Dec. 2005 Year 4
                                           2005
Units                         6         6          6          6        6         6         72
Monthly   $              45,600   47,400      49,200    51,000    52,800    54,600 536,400
Payments
Office                        0         0          0          0        0         0          0
Server                      167       167        167        167      167       167      2,004
                                                         HoldMyMovie.com                     39


Advertising/Promo         625       625       625       625       625       625      7,500
Wages                   12500     12500     12500     12500     12500     12500    150,000
Utilities                   0         0         0         0         0         0          0
Phone                      76        76        76        76        76        76        912
Equipmen                  250       250       250       250       250       250      3,000
t
Employee Benefits          55        55        55        55        55        55        660
Mileage Expense          1153      1153      1153      1153      1153      1153     13,836
Insurance                  83        83        83        83        83        83        996
Software                  274       274       274       274       274       274      3,288
Warranty exp.            2250      2250      2250      2250      2250      2250     27,000
Consulting                500       500       500       500       500       500      7,200
Marketing exp.            150       150       150       150       150       150      1,800
Other                     700       700       700       700       700       700      8,400
Cash Outflow           18,783    18,783    18,783    18,783    18,783    18,783    226,596
Cash Inflow            45,600    47,400    49,200    51,000    52,800    54,600    536,400
Carry                 199,836   173,019   201,636   232,053   264,270   298,287    334,104
Over
Ending     $          173,019   201,636   232,053   264,270   298,287   334,104    334,014
Cash

Cash Flow from
Operation $            26,817    28,617    30,417    32,217    34,017    35,817    311,004
s

Pro Forma Monthly Cash Flows- Year 5
                    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
                    Jan. 2006 Feb. 2006 Mar. 2006 Apr. 2006 May. 2006 June.
                                                                      2006
Units                        6          6       6          6        6          6
Monthly    $            56,400    58,200   60,000     61,800   63,600    65,400
Payments
Office                       0          0       0          0        0          0
Server                     167        167     167        167      167        167
Advertising/Promo          625        625     625        625      625        625
Wages                   12500      12500    12500      12500   12500      12500
Utilities                    0          0       0          0        0          0
Phone                       76         76      76         76       76         76
Equipmen                   250        250     250        250      250        250
t
Employee Benefits           55         55      55         55       55         55
Mileage Expense           1153       1153    1153       1153     1153       1153
Insurance                   83         83      83         83       83         83
Software                   274        274     274        274      274        274
Warranty exp.             2250       2250    2250       2250     2250       2250
Consulting                 500        500     500        500      500        500
Marketing exp.             150        150     150        150      150        150
Other                      700        700     700        700      700        700
Cash Outflow            18,783    18,783   18,783     18,783   18,783    18,783
Cash Inflow             56,400    58,200   60,000     61,800   63,600    65,400
Carry                  334,104 371,715 411,132 452,439 495,366 540,183
Over
Ending     $           371,715 411,132 452,349 495,366 540,183 586,800
                                                           HoldMyMovie.com                      40


Cash

Cash Flow from
Operation $             37,611    39,417     41,217    43,017     44,817    46,617
s


Pro Forma Monthly Cash Flows- Year 5 cont.
______________________________________________________________________________
                    Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
                    Jul. 2006 Aug. 2006 Sept.        Oct. 2006 Nov. 2006 Dec. 2006 Year 5
                                           2006
Units                         6         6          6          6        6         6         72
Monthly    $             67,200   69,000      70,800    72,600    74,400    76,200 795,600
Payments
Office                        0         0          0          0        0         0          0
Server                      167       167        167        167      167       167      2,004
Advertising/Promo           625       625        625        625      625       625      7,500
Wages                    12500     12500       12500     12500     12500     12500 150,000
Utilities                     0         0          0          0        0         0          0
Phone                        76        76         76         76       76        76        912
Equipmen                    250       250        250        250      250       250      3,000
t
Employee Benefits            55        55         55         55       55        55        660
Mileage Expense            1153     1153        1153       1153     1153      1153    13,836
Insurance                    83        83         83         83       83        83        996
Software                    274       274        274        274      274       274      3,288
Warranty exp.              2250     2250        2250       2250     2250      2250    27,000
Consulting                  500       500        500        500      500       500      7,200
Marketing exp.              150       150        150        150      150       150      1,800
Other                       700       700        700        700      700       700      8,400
Cash Outflow             18,783   18,783      18,783    18,783    18,783    18,783 226,596
Cash Inflow              67,200   69,000      70,800    72,600    74,400    76,200 795,600
Carry                  586,800 635,217 685,434 737,451 791,268 846,885 904,302
Over
Ending     $           635,217 685,434 737,451 791,268 846,885 904,302 904,302
Cash

Cash Flow from
Operation $             48,417    50,217     52,017    53,817     55,617    57,417   570,198
s


Pro Forma Monthly Cash Flows- Years 1-5 .
____________________________________________________________________
                    Total      Total       Total       Total       Total
                    Year 1     Year 2      Year 3      Year 4      Year 5
Units                       41          36          36          72          72
Monthly    $            77,400 206,400 336,600 536,400 795,600
Payments
Office                       0           0           0           0           0
Server                  19,814       2,004       2,004       2,004       2,004
Advertising/Promo       20,625    33,750         7,500       7,500       7,500
                                                             HoldMyMovie.com                     41


Wages                    60,000     7,500     90,000    150,000   150,000
Utilities                     0         0          0          0         0
Phone                       576       516        516        912       912
Equipmen                 62,000     1,500      1,800      3,000     3,000
Employee Benefits           715     6,600        860        660       660
Mileage Expense           8,671     8,004      8,004     13,836    13,836
Insurance                   638       552        552        996       996
Software                  5,995     1,764      1,764      3,288     3,288
Warranty exp.            22,750     2,100      2,100     27,000    27,000
Consulting               15,500    21,000      6,000      7,200     7,200
Marketing exp.            2,100     6,000        600      1,800     1,800
Other                    75,000   157,350      6,000      8,400     8,400
Cash Outflow            171,084   206,400    146,400    226,596   226,596
Cash Inflow              77,400   206,400    336,600    536,400   795,600
Carry                     6,284    76,743    286,934    334,104   904,302
Over
Ending     $              6,284    76,743    289,934    334,104   904,302
Cash

Cash Flow from
Operation $              30,118    75,300    190,200     31,104   570,198
s




Proforma Yearly Income Statement- Years 1-5
____________________________________________________________________________________
                                    Income     Income      Income Income         Income     Income
                         Start-up Year 1       Year 2      Year 3     Year 4     Year 5     Total
Fixed Expenses
    Office                        0          0           0          0          0          0          0
    Server                   17810      19,814       2,004      2,004      2,004      2,004     45,640
    Advertising/Promo             0     20,625     33,750       7,500      7,500      7,500     76,875
    Wages                         0     60,000     75,000      90,000 150,000 150,000 542,810
    Utilities                     0          0           0          0          0          0          0
    Phone                        60        576         516        516        912        912       3492
    Equipment                 5,000     62,000       1,500      1,800      3,000      3,000     76,300
    Employee Benefits            55        715       6,600        860        660        660       9550
    Mileage Expense             667      8,671       8,004      8,004    13,836      13,836     53018
    Insurance                    86        638         552        552        996        996       3820
    Software                   4231      5,995       1,764      1,764      3,288      3,288     20330
    Warranty exp.              1750     22,750       2,100      2,100    27,000      27,000     82700
    Consulting                 2500     15,500     21,000       6,000      7,200      7,200     59400
    Marketing exp.            1,500      2,100       6,000        600      1,800      1,800     13,800
    Other                      1500     75,000       6,000      6,000      8,400      8,400    105300
Variable Expenses*                           0           0          0          0          0          0
                         _______________________________________________________________
Net Expenses                 35159 171,084        157,350 146,400 226,596 226,596 963,185
                                                         HoldMyMovie.com                  42



Revenues                         0    77,400  206,400 336,600 536,400 795,600 1,952,400
                         _______________________________________________________________
Net Income                  -35159   -93,684   49,050 190,200 309,804 569,004 989,215


Proforma Monthly Income Statement- Year 1
_____________________________________________________________________________________
                                   Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
                        Start-up Jan. 2002 Feb. 2002 Mar. 2002 Apr. 2002 May. 2002 June. 2002
Fixed Expenses
    Office                       0          0        0        0         0         0         0
    Server                   17810        167      167      167       167       167       167
    Advertising/Promo            0      5000      5000     5000       625       625       625
    Wages                        0      5000      5000     5000      5000      5000      5000
    Utilities                    0          0        0        0         0         0         0
    Phone                       60         43       43       43        43        43        43
    Equipment                5,000        100      100      100       100       100       100
    Employee Benefits           55         55       55       55        55        55        55
    Mileage Expense            667        667      667      667       667       667       667
    Insurance                   86         46       46       46        46        46        46
    Software                  4231        147      147      147       147       147       147
    Warranty exp.             1750      1750      1750     1750      1750      1750      1750
    Consulting                2500      2500      2500     2500      1500       500       500
    Marketing exp.           1,500         50       50       50        50        50        50
    Other                     1500        500      500      500       500       500       500
Variable Expenses*                          0        0        0         0         0         0
                        _______________________________________________________________
Net Expenses                 35159    15,858    15,858   15,858    10,483     9,483     9,483

Revenues                         0    1,500      2400     3300     4200     5100     6000
                         _______________________________________________________________
Net Income                  -35159   -14358    -13458   -12558    -6643    -4383    -3483

Proforma Monthly Income Statement- Year 1 cont.
_____________________________________________________________________________________
                        Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Income
                        Jul. 2002 Aug. 2002 Sept. 2002 Oct. 2002 Nov. 2002 Dec. 2002 Year-1
Fixed Expenses
    Office                       0          0         0         0         0         0         0
    Server                     167       167        167       167       167       167   19,814
    Advertising/Promo          625       625        625       625       625       625   20,625
    Wages                     5000      5000       5000      5000      5000      5000   60,000
    Utilities                    0          0         0         0         0         0         0
    Phone                       43         43        43        43        43        43       576
    Equipment                  100       100        100       100       100       100     6,200
    Employee Benefits           55         55        55        55        55        55       715
    Mileage Expense            667       667        667       667       667       667     8,671
    Insurance                   46         46        46        46        46        46       638
    Software                   147       147        147       147       147       147     5,995
                                                                 HoldMyMovie.com                        43


    Warranty exp.                 1750     1750      1750     1750     1750     1750   12,300
    Consulting                     500      500       500      500      500      500   15,500
    Marketing exp.                  50       50        50       50       50       50    2,100
    Other                          500      500       500      500      500      500   75,000
Variable Expenses*                   0        0         0        0        0        0        0
                             _______________________________________________________________
Net Expenses                     9,483    9,483     9,483    9,483    9,483    9,483 -206,243

Revenues                         6,900    7,800     8,700    9,600   10,500   11,400   77,400
                             _______________________________________________________________
Net Income                       -2583    -1683      -783     -117    1,017    1,917 -128,843

* HoldMyMovie.com has not incurred any variable costs for the increased units of sale because all costs
are budgeted as fixed costs. There are not any additional costs to add one unit of sale because all costs
are already accounted for and there is not any physical product that required to increase a unit of sale.




Proforma Yearly Income Statement- Years 1-
5
___________________________________________________________________________________
_
                                  Income    Income     Income     Income     Income     Income
                       Start-up Year 1      Year 2     Year 3     Year 4     Year 5     Total
Fixed Expenses
Office                          0         0          0          0          0          0          0
Server                     17810     19,814     2,004      2,004      2,004      2,004     45,640
Advertising/Promo               0    20,625    33,750      7,500      7,500      7,500     76,875
Wages                           0    60,000    75,000     90,000 150,000 150,000 542,810
Utilities                       0         0          0          0          0          0          0
Phone                          60       576        516        516        912        912       3492
Equipment                   5,000    62,000     1,500      1,800      3,000      3,000     76,300
Employee Benefits              55       715     6,600         860        660        660       9550
Mileage Expense               667     8,671     8,004      8,004     13,836     13,836      53018
Insurance                      86       638        552        552        996        996       3820
Software                     4231     5,995     1,764      1,764      3,288      3,288      20330
Warranty exp.                1750    22,750     2,100      2,100     27,000     27,000      82700
Consulting                   2500    15,500    21,000      6,000      7,200      7,200      59400
Marketing exp.              1,500     2,100     6,000         600     1,800      1,800     13,800
Other                        1500    75,000     6,000      6,000      8,400      8,400     105300
Variable Expenses*                        0          0          0          0          0          0
                       ______________________________________________________________
                       _
Net Expenses               35159 171,084 157,350 146,400 226,596 226,596 963,185

Revenues                          0   77,400 206,400 336,600 536,400 795,600 1,952,400
                          ______________________________________________________________
                          _
Net Income                   -35159  -93,684   49,050 190,200 309,804 569,004 989,215
                                                         HoldMyMovie.com                   44




Proforma Monthly Income Statement- Year 1
___________________________________________________________________________________
__
                                 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
                      Start-up Jan. 2002 Feb. 2002 Mar. 2002 Apr. 2002 May. 2002 June.
                                                                                 2002
Fixed Expenses
Office                         0         0       0         0         0         0          0
Server                    17810       167      167       167       167       167        167
Advertising/Promo              0     5000     5000      5000       625       625        625
Wages                          0     5000     5000      5000      5000      5000       5000
Utilities                      0         0       0         0         0         0          0
Phone                         60        43      43        43        43        43         43
Equipment                  5,000      100      100       100       100       100        100
Employee Benefits             55        55      55        55        55        55         55
Mileage Expense              667      667      667       667       667       667        667
Insurance                     86        46      46        46        46        46         46
Software                    4231      147      147       147       147       147        147
Warranty exp.               1750     1750     1750      1750      1750      1750       1750
Consulting                  2500     2500     2500      2500      1500       500        500
Marketing exp.             1,500        50      50        50        50        50         50
Other                       1500      500      500       500       500       500        500
Variable Expenses*                       0       0         0         0         0          0
                      ______________________________________________________________
                      _
Net Expenses              35159    15,858   15,858    15,858    10,483     9,483      9,483

Revenues                       0    1,500     2400     3300     4200     5100     6000
                       ______________________________________________________________
                       _
Net Income                -35159   -14358   -13458   -12558    -6643    -4383    -3483

Proforma Monthly Income Statement- Year 1 cont.
___________________________________________________________________________________
__
                      Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Income
                      Jul. 2002 Aug. 2002 Sept.      Oct. 2002 Nov. 2002 Dec. 2002 Year-1
                                           2002
Fixed Expenses
Office                         0         0         0          0        0         0          0
Server                       167      167        167        167      167       167    19,814
Advertising/Promo            625      625        625        625      625       625    20,625
Wages                       5000     5000       5000       5000     5000      5000    60,000
Utilities                      0         0         0          0        0         0          0
Phone                         43       43         43         43       43        43        576
Equipment                    100      100        100        100      100       100     6,200
Employee Benefits             55       55         55         55       55        55        715
Mileage Expense              667      667        667        667      667       667     8,671
Insurance                     46       46         46         46       46        46        638
Software                     147      147        147        147      147       147     5,995
                                                                 HoldMyMovie.com                        45


Warranty exp.                  1750     1750     1750     1750     1750     1750   12,300
Consulting                      500      500      500      500      500      500   15,500
Marketing exp.                   50       50       50       50       50       50    2,100
Other                           500      500      500      500      500      500   75,000
Variable Expenses*                0        0        0        0        0        0        0
                          ______________________________________________________________
                          _
Net Expenses                  9,483    9,483    9,483    9,483    9,483    9,483 -206,243

Revenues                      6,900    7,800    8,700    9,600   10,500   11,400   77,400
                          ______________________________________________________________
                          _
Net Income                    -2583    -1683     -783     -117    1,017    1,917 -128,843

* HoldMyMovie.com has not incurred any variable costs for the increased units of sale because
all costs
are budgeted as fixed costs. There are not any additional costs to add one unit of sale because all costs
are already accounted for and there is not any physical product that required to increase a unit of sale.
                                                                        HoldMyMovie.com                           46




                                               Appendix G
                                            Membership Contract

---------------------------------------------------------------------------------------------------------------------
                       PLEASE FILL OUT THE FOLLOWING INFORMATION
---------------------------------------------------------------------------------------------------------------------
NAME__________________
ADDRESS____________________________________________________________________
CITY_____________STATE_________ZIP CODE_______________
PHONE_____________________
SOCIAL SECURITY NUMBER________________________
CREDIT CARD NUMBER / EXP. DATE_____________________________________
DRIVER’S LIC. # / STATE______________________BIRTH DATE___________________
EMPLOYER_______________________WORK PHNONE_______________________

All videocassettes are used at lessees risk. We exercise precaution in keeping our equipment in
good condition. Conditions, which prevent satisfactory operation of equipment, do not relieve
lessee of his/her responsibility for rental charges. Lessee assumes all responsibility for
equipment while out of possession of lessor, and promises to return such equipment to the lessor
in as good condition as it was at the time at the effective date of the lease. Natural wear from
responsible use is an exception. Lessee shall be liable for any loss, theft, damage or destruction
of leased property. The lessee at the regular replacement price will pay for all equipment lost or
damaged beyond repair. The lessor on return thereof will repair all damaged equipment, which
may be repaired, and the cost for such repairs shall be paid by the lessee. Accrued rental charges
cannot be applied against the purchase price or cost of repairs of such damaged or lost
equipment.
______________________________________________________________________

I am aware of the nature of the material contained on the video tapes rented and will not have
any claim against renter whatsoever now or in the future
______________________________________________________________________

I agree that all charges for rental damage, cleaning or material will be paid and that all collection
fees, attorney fees court costs or any expense involved in the collection of these charges will be
borne by me in the court of the county in which indebtedness is incurred

There are no warranties of merchantability or fitness either expressed or implied which extend
beyond the description on the face thereof.

Lessee’s failure to return leased equipment shall result in criminal prosecution for theft in
accordance with the laws of the state.

                                      Lessee
Signature____________________________________________
                                                             HoldMyMovie.com                       47




                                           Appendix H

                                    Server and Software
All information came from April Pearce Shay, CPA or Dale Shay, Oracle Accounting, IT, and E-
                                   Commerce Consultant
                                           Server

The server for the company is the Hewlett Packard HP LC2000 Custom Select Build.

Specifications:
Single PIII 600mhz Intel Processor (Dual processor capable)
640MB 133 mhz SDRAM memory
Mouse, Keyboard
Embedded HP netserver 10/100 PCI NIC
HP Remote Assistant
Second HP 10/100 PCI NIC
HP Hot Swappable 9.1 GB HD (10,000 rpm)
HP Embedded Hot Swappable SCSI Controller
HP 3 yr. Same Day Support Pack

Total: $6,500


                                        Support for Server

40 Hours of network implementation and support at $120/hr for $4,800.00

Total Cost for both Server and Support: $11,305.00 without tax.

Server
HoldMyMovie.com’s server will be outsourced, operated, and maintained by a hosting service
offered by Verio Inc. ―Verio Inc., is the world’s largest operator of Web sites for businesses, and
is a leading provider of comprehensive Internet services.‖ (Verio Homepage)

Verio offers:
    Leadership
    Security
    Service- offered 24 hours a day, 7 days a week
    Capacity- Verio is a Tier 1 network

The Verio.com web server is used in conjunction with e-Business Framework Software to
connect to the databases of video rental stores. Technicians at Verio provide all hosting server
maintenance and support. (Verio Homepage) This hosting service will allow video rental
customers to come to the HoldMyVideo.com web site to look at movie reviews, find a movie
                                                             HoldMyMovie.com                      48


title they would like to rent, find a movie store where the customer would like to reserve the
movie from, and finally reserve the movie from our site to be picked up from a chosen
designated video rental store in their area.

Software
HoldMyMovie.com incorporates Catalog Content Aggregation software into our business from
DataJunction.com through an e-business integration framework. (Data Junction Homepage)
Catalog Content Aggregation software will link HoldMyMovie.com’s server database with the
databases in each video rental store. This software is necessary because not all of the video rental
stores use the same software when checking their inventory status to see whether a movie is in or
has been taken out. (Data Junction Homepage)

E-Business Integration Framework uses a portable transformation engine to address trading
partners, to our company video rental stores, who have different internal production systems and
protocols for exchanging information and data between businesses, in this case from the video
rental stores to the HoldMyMovie.com site. (Data Junction Homepage) The E-Business
Integration Framework includes Catalog Content Aggregation, transaction integration, and web
data harvesting. (Data Junction Homepage)

Catalog Content Aggregation
Catalog Content Aggregation help the need to aggregate, transform and validate both internal
systems and supplier provided catalog content. To achieve this goal, HoldMyMovie.com needs
solutions that implement rapidly, aggregate successfully and scale fully. (Data Junction
Homepage)

According to the Data Junction Homepage, ―Data Junction's e-Business Integration Framework
provides the infrastructure that allows e-businesses to not only compete in e-business
environments but to turn the complexities of managing catalog content into a corporate asset.‖

One of the reasons HoldMyMovie.com is using catalog content aggregation is because there is a
wide range of formats and applications in which product attributes may be stored in the video
rental store’s software systems. These systems can range from flat-files to spreadsheets to ERP
systems. (Data Junction Homepage) Data Junction’s the e-Business Integration Framework
supports virtually any structured or unstructured content.

―The e-Business Integration Framework offers comprehensive functionality for ensuring catalog
content relevancy and accuracy.‖ (Data Junction Homepage) Content relevancy and accuracy is
very important to HoldMyMovie.com. (Data Junction Homepage) If the movie titles on the
database are incorrect, then people may try to reserve movies that are already taken out. This will
cause unhappy video renters plus the use of video rental stores could possibly decrease due to
inaccurate service.

―Data Junction also offers notification capabilities so suppliers and product managers can better
identify and correct invalid content prior to catalog loading.‖ (Data Junction Homepage)
Notification capabilities are very helpful for both the video rental stores and HoldMyMovie.com
to correct invalid information regarding the reservation of movies online.
                                                            HoldMyMovie.com                       49



Transaction Integration
Transaction Integration is used to extract data from unstructured formats including e-mails, form
submissions, reports, messages, HTML pages, and many more. (Data Junction Homepage)
Transaction integration will help HoldMyMovie.com to receive customer service information,
and feedback from both the video stores and their customers. Customer service is the key to
connect both video rental stores with their customers, and transaction integration will increase
the quality and quantity of services offered by HoldMyMovie.com.

Web Data Harvesting
Web data harvesting is used to manage HoldMyMovie.com’s web data to maximize customer
retention and interaction between our site and the video rental store. Web data harvesting will
allow HoldMyMovie.com to study usage and traffic patterns to their web site and to the sites of
video rental stores. (Data Junction Homepage)




                                              Appendix I
                                                            HoldMyMovie.com                         50


                              Ohio Movie Rental Facilities
Cleveland, Ohio (216 Area Code)

A & B Video Movie         3809 Pearl Rd.           8125 Columbia Rd.        Cleveland, OH 44144
Rental                    Cleveland, OH 44109      Cleveland, OH 44138      (216) 398-4411
11002 Detroit Ave.        (216) 749-4707           (216) 235-8273
Cleveland, OH 44102                                                         Mom's Megavideo of S
(216) 221-8150            Coreno's Video           Glengate Video           Euclid
                          12508 Detroit Ave.       367 South Green Rd.      4126 Mayfield Rd.
Accurate Video            Cleveland, OH 44107      Cleveland, OH 44121      Cleveland, OH 44121
9831 Denison Ave.         (216) 521-9900           (216) 481-6661           (216) 381-0808
Cleveland, OH 44102
(216) 651-9140            Coreno's Video           Globe Video              Mom's Supervideo of
                          Discount                 1421 SOM Center Rd.      Lyndhurst
Action Video Discount     4165 Rocky River Drive   Cleveland, OH 44124      5138 Mayfield Rd.
4928 Fulton Rd.           Cleveland, OH 44135      (216) 461-4408           Cleveland, OH 44124
Cleveland, OH 44144       (216) 251-0070                                    (216) 473-1123
(216) 398-7100                                     HITZ Music & Video
                          Coreno's Video           Store 1                  Movie Exchange
Admit One                 Discount                 20003 Harvard Ave.       25455 Euclid Ave.
10013 West 130th Street   12205 Lorain Ave.        Cleveland, OH 44122      Cleveland, OH 44117
Cleveland, OH 44133       Cleveland, OH 44111      (216) 561-3377           (216) 731-0074
(216) 237-1194            (216) 252-2242
                                                   J & D Master Video       Movie Exchange Inc
Barber Video              Cosmic Video             3203 Payne Ave.          4078 Mayfield Rd.
3681 West 105th Street    4502 BRd.view Rd.        Cleveland, OH 44114      Cleveland, OH 44121
Cleveland, OH 44111       Cleveland, OH 44109      (216) 623-0501           (216) 691-0332
(216) 252-1573            (216) 459-2382
                                                   Kim Loan Video           Movie Gallery
Box Office Movies Plus    Cuyahoga Media Center    9614 Denison Ave.        6605 Biddulph Rd.
7557 Pearl Rd.            4300 Brookpark Rd.       Cleveland, OH 44102      Cleveland, OH 44144
Cleveland, OH 44130       Cleveland, OH 44134      (216) 651-9770           (216) 398-2590
(216) 243-6233            (216) 398-2800
                                                   King Video Discount      Movie Land
C & O Video Rentals       Dealson Reels            6727 Denison Ave.        15164 Bagley Rd.
5105 Franklin Blvd.       5090 West 139th Street   Cleveland, OH 44102      Cleveland, OH 44130
Cleveland, OH 44102       Cleveland, OH 44142      (216) 961-3540           (216) 845-1157
216) 961-6313             (216) 362-6110
                                                   Lakes Video              Movie Machine
Cap'n Video               Diamond Video            3815 Denison Ave.        13318 Madison Ave.
6641 Mayfield Rd.         5225 Northfield Rd.      Cleveland, OH 44109      Cleveland, OH 44107
Cleveland, OH 44124       Cleveland, OH 44146      (216) 661-3366           (216) 521-1880
(216) 473-0442            (216) 581-0112
                                                   Maple Video Inc          Movie Mark Video
Cedar Hill Video          Double Visions Video     5231 Warrensville        14415 Pearl Rd.
2452 Fairmount Blvd.      6214 Saint Clair Ave.    Center Rd.               Cleveland, OH 44136
Cleveland, OH 44106       Cleveland, OH 44103      Cleveland, OH 44137      (216) 572-9402
(216) 721-3456            (216) 391-0518           (216) 475-1125
                                                                            Movie Mart
Cedar Taylor Video        Euclid Beach Video       Mega Movies              2402 Brookpark Rd.
2150 South Taylor Rd.     16122 Lake Shore Blvd.   19704 Center Ridge Rd.   Cleveland, OH 44134
Cleveland, OH 44118       Cleveland, OH 44110      Cleveland, OH 44116      (216) 459-1987
(216) 932-6224            (216) 486-2090           (216) 331-6767
                                                                            Movie Mart Video
Cinema Transit Video                               Michelle's Video Town    5566 State Rd.
13501 West 130th Street   Euclid Video 419 East    1025 Prospect Rd.        Cleveland, OH 44134
Cleveland, OH 44133       200th Street             Cleveland, OH 44136      (216) 885-5565
(216) 237-1808            Cleveland, OH 44119      (216) 572-5211
                          (216) 486-3399                                    Movie Mart Video
                                                   Midnite Video Inc        15 14839 Detroit Ave.
Colonna Video             Falls Video              7003 Memphis Ave.        Cleveland, OH 44107
                                                            HoldMyMovie.com                          51


(216) 521-4050           Cleveland, OH 44128       Time Square Food
                         (216) 587-2626 -          Market                    Video Variety Inc
Movie Mart Video                                   3832 MLK Jr. Drive        2307 Miramar Blvd.
15234 Triskett Rd.       Northeast Video           Cleveland, OH 44105       Cleveland, OH 44118
Cleveland, OH 44111      5703 Francis Ave.         (216) 641-6629            (216) 382-1622
(216) 671-7200           Cleveland, OH 44127
                         (216) 641-7399            Video 98                  Video Vicki's
Movie Mart Video                                   4801 Clark Ave.           3988 East 71st Street
11006 Clifton Blvd.      Northshore Video          Cleveland, OH 44102       Cleveland, OH 44105
Cleveland, OH 44102      818 East 185th Street     (216) 651-3700 -          (216) 441-3377
(216) 281-8088           Cleveland, OH 44119
                         (216) 692-1516            Video Experience 4        Vidstar Systems Video
Movie Mart Video                                   22 Center Rd.             1836 1/2 Coventry Rd.
13375 Snow Rd.           Ohio Video Displays       Cleveland, OH 44146       Cleveland, OH 44118
Cleveland, OH 44142      13505 West 130th Street   (216) 786-1700 -          (216) 932-7287
(216) 265-0870           Cleveland, OH 44133
                         (216) 237-1075            Video Express             Viewer's Choice
Movie Warehouse                                    13701 Madison Ave.        15268 Sheldon Rd.
21810 Center Ridge Rd.   Orion Video               Cleveland, OH 44107       Cleveland, OH 44142
Cleveland, OH 44116      8006 Detroit Ave.         (216) 221-9678            (216) 433-1010
(216) 331-1538           Cleveland, OH 44102
                         (216) 651-8480            Video Express             VIP Video
Movie World                                        19620 West 130th Street   12831 State Rd.
8015 BRd.view Rd.        P K'S Video               Cleveland, OH 44136       Cleveland, OH 44133
Cleveland, OH 44147      207 East 156th Street     (216) 572-5010            (216) 237-1611
(216) 838-4990           Cleveland, OH 44110
                         (216) 531-6765            Video For All Inc         York Video
Movie World                                        33493 Aurora Rd           6500 York Rd.
1855 Snow Rd.            Panet Video Inc           Cleveland, OH 44139       Cleveland, OH 44130
Cleveland, OH 44134      27093 Bagley Rd.          (216) 498-9582            (216) 888-6444
(216) 351-4550           Cleveland, OH 44138
                         (216) 235-9010            Video Game Connection
Movie World                                        4824 Memphis Ave.         York Video
 7571 West Ridgewood     Playaway Video            Cleveland, OH 44144       5301 Lee Rd.
Drive                    6207 BRd.way Ave.         (216) 741-7005            Cleveland, OH 44137
Cleveland, OH 44129      Cleveland, OH 44127                                 (216) 587-6611
(216) 884-0600           (216) 883-8899            Video I
                                                   2548 Noble Rd.            York Video
Movie World              Proper One Musin &        Cleveland, OH 44121       17428 Lorain Ave.
5144 Wilson Mills Rd.    Video                     (216) 382-4515            Cleveland, OH 44111
Cleveland, OH 44143      7601 Union Ave.                                     (216) 671-1040
(216) 449-8110           Cleveland, OH 44105       Video Nuts
                         (216) 883-1010            4860 BRd.view Rd.         York Video
Network Video                                      Cleveland, OH 44109       4280 Fulton Rd.
6136 Dunham Rd.          Sky Video                 (216) 351-9596            Cleveland, OH 44144
Cleveland, OH 44137      12328 Saint Clair Ave.                              (216) 741-0004
(216) 662-2228           Cleveland, OH 44108       Video Pantry
                         (216) 541-0193            2196 Lee Rd.              York Video
Network Video                                      Cleveland, OH 44118       13721 Lorain Ave.
26922 Cook Rd.           Southeast Video           (216) 321-8616            Cleveland, OH 44111
Cleveland, OH 44138      33660 Aurora Rd.                                    (216) 251-3737
(216)                    Cleveland, OH 44139       Video Shoppe
235-2044                 (216) 248-1667            27020 Center Ridge Rd.    York Video
                                                   Cleveland, OH 44145       5589 BRd.view Rd.
Network Video            Star Flicks Video         (216) 871-1422            Cleveland, OH 44134
3187 Euclid Heights      Entertainment Center                                (216) 661-1199
Blvd.                    28700 Chagrin Blvd.       Video Theatre
Cleveland, OH 44118      Cleveland, OH 44122       7480 BRd.view Rd.         York Video
(216) 371-5858           (216) 591-0109            Cleveland, OH 44134       5444 Pearl Rd.
Network Video                                      (216) 447-1020            Cleveland, OH 44129
4621 Green Rd.                                                               (216) 845-1199
York Video               5731 Turney Rd.
                                                                  HoldMyMovie.com                       52


Cleveland, OH 44125              22223 Lorain Rd.        York Video               (216) 531-1199
(216) 475-8333                   Cleveland, OH 44126     18482 Lake Shore Blvd.
York Video                       (216) 979-9009          Cleveland, OH 44119

Columbus, Ohio (614 Area Code)

Anthony Cocca's Video            2261 S. Hamilton Rd.    536 Norton Rd.           Columbus, OH 43228
Land                             Columbus, OH 43232      Columbus, OH 43228       (614) 486-7717
4944 North High St.              (614) 863-3223          (614) 870-1077
Columbus, OH 43214                                                                Video Central
(614) 844-6460                   Media Play              Rent-A-Flick             1299 Bethel Rd.
                                 4260 West BRd. St.      771 Neil Ave.            Columbus, OH 43220
Bexley Video Club Inc            Columbus, OH 43228      Columbus, OH 43215       (614) 442-8273
3839 April Lane                  (614) 272-8400          (614) 224-1940
Columbus, OH 43227                                                                Video Central
(614) 235-2341                   Metro Video             Rent-A-Flick             231 East Livingston
                                 848 North High St.      935 South James Rd.      Ave.
Clintonville Video               Columbus, OH 43215      Columbus, OH 43227       Columbus, OH 43215
3408 Indianola Ave.              (614) 291-7962          (614) 236-2771           (614) 221-6848
Columbus, OH 43214
(614) 262-3408                   Movie Scene 1907        Rent-A-Flick             Video Express Movies
                                 Tamarack Circle North   3501 Parsons Ave.        6012 East Main St.
Couch Potato Video &             Columbus, OH 43229      Columbus, OH 43207       Columbus, OH 43213
Carryout                         (614) 888-0889          (614) 497-1329           (614) 866-2685
14 East 13th Ave.
Columbus, OH 43201               NEO Tokoyo              Shapter One Video        Video Latino Ranchito
(614) 291-0200                   International           903 East Dublin          4227 Westview Center
                                 2413 North High St.     Granville Rd.            Plaza
Disco Bookstore                  Columbus, OH 43202      Columbus, OH 43229       Columbus, OH 43228
973 Harrisburg Pike              (614) 268-9211          (614) 847-1000           (614) 279-0599
Columbus, OH 43223
(614) 274-9716                   PHAR-Mor Discounts      Star Time Video          Video Pursuit
                                 2605 Northland Plaza    3767 South High St.      1249 Morse Rd.
Hollywood Video                  Columbus, OH 43231      Columbus, OH 43207       Columbus, OH 43229
1460 Morse Rd.                   (614) 794-1722          (614) 491-1610           (614) 262-0881
Columbus, OH 43229
(614) 888-8944                   PHAR-Mor Discounts      Star Time Videos         Video Pursuit
                                 4131 West Broad. St.    933 Oakland Park Ave.    2065 Eakin Rd.
Hollywood Video                  Columbus, OH 43228      Columbus, OH 43224       Columbus, OH 43223
4904 West BRd. St.               (614) 275-4040          (614) 447-0572           (614) 274-0882
Columbus, OH 43228
(614) 853-0708                   PHAR-Mor Discounts      Star Time Video          Video Stars
                                 2304 S. Hamilton Rd.    3008 Sullivant Ave.      1864 Hard Rd.
Joint Video Ventures             Columbus, OH 43232      Columbus, OH 43204       Columbus, OH 43235
1403 Chambers Rd.                (614) 864-2007          (614) 276-2700           (614) 766-0029
Columbus, OH 43212
(614) 487-9973                   Reel To Reel            Superstore               Videoland Inc
                                 2648 NOE Bixby Rd.      3015 Morse Rd.           90 North Wilson Rd.
Mammoth Video                    Columbus, OH 43232      Columbus, OH 43231       Columbus, OH 43204
629 Harrisburg Pike              (614) 864-4320          (614) 471-3377           (614) 276-0500
Columbus, OH 43223
(614) 274-7533                                           Take Five Video          Weekend Video
                                                         5089 Sedalia Dr.         5947 East Main St.
                                                         Columbus, OH 43232       Columbus, OH 43213
                                                         (614) 837-1277           (614) 861-8074
                                 Rent-A-Flick            Trabue Books & Videos
Media Play                                               3615 Trabue Rd.
                                                          HoldMyMovie.com                     53



Cincinnati, Ohio (513 Area Code)

Camp Washington          Movie Gallery           Picture Show Video       Video Village
Video                    1507 Springfield Pike   2455 Harrison Ave.       1507 Springfield Pike
2863 Colerain Ave.       Cincinnati, OH 45215    Cincinnati, OH 45211     Cincinnati, OH 45215
Cincinnati, OH 45225     (513) 761-5680          (513) 481-7603           (513) 761-5680
(513) 681-0957
                         Movie Store of Cinti    Red Giraffe Video        Video Village
City Limits Video        7994 Colerain Ave.      6508 Glenway Ave.        1598 Goodman Ave.
1135 Cincinnati          Cincinnati, OH 45239    Cincinnati, OH 45211     Cincinnati, OH 45224
Zanesville Southwest     (513) 522-7243          (513) 598-4900           (513) 521-8811
Lancaster, OH 43130
(614) 654-6009           Movie Warehouse         Ross Video               Video Village
                         6580 Glenway Ave.       6085 Cincinnati          5685 Springdale Rd.
Corner Video             Cincinnati, OH 45211    Brookville Rd.           Cincinnati, OH 45251
8376 Vine Street         (513) 574-4622          Okeana, OH 45053         (513) 923-9559
Cincinnati, OH 45216                             (513) 738-5055
(513) 821-4222           My Movie Store
                         9348 Cincinnati         Sayler Park Video Inc
Feature Video            Columbus Rd.            130 Monitor Ave.
6141 Bridgetown Rd.      Cincinnati, OH 45241    Cincinnati, OH 45233
Cincinnati, OH 45248     (513) 777-9658          (513) 941-7340
(513) 574-5694
                         Network Video           Suncoast Pictures
Got-It-All Video Store   6135 Cleves Warsaw      11700 Princeton Rd.
9533 Pippin Rd.          Pike                    Cincinnati, OH 45246
Cincinnati, OH 45231     Cincinnati, OH 45233    (513) 671-5569
(513) 825-5408           (513) 941-9767
                                                 Suncoast Pictures
Home Cinema              Network Video           7875 Montgomery Rd.
3234 Jefferson Ave.      5886 Cheviot Rd.        Cincinnati, OH 45236
Cincinnati, OH 45220     Cincinnati, OH 45247    (513) 793-8743
(513) 221-4499           (513) 741-7114
                                                 Suncoast Pictures
Major Video              Network Video           7500 Beechmont Ave.
618 Old State Rte. 74    2042 Beechmont Ave.     Cincinnati, OH 45255
Cincinnati, OH 45244     Cincinnati, OH 45230    (513) 231-3847
(513) 528-2462           (513) 231-2709
                                                 Tri Star Video
Mammoth Video            Network Video           120 Mill Street
9172 Winton Rd.          4972 Delhi Ave.         Cincinnati, OH 45215
Cincinnati, OH 45231     Cincinnati, OH 45238    (513) 761-1131
(513) 522-3950           (513) 922-2921
                                                 Valley Video
Movie Gallery            Picture Show Video      7967 Cincinnati Dayton
5445 North Bend Rd.      4590 Montgomery Rd.     Rd.
Cincinnati, OH 45247     Cincinnati, OH 45212    West Chester, OH
(513) 481-3565           (513) 631-3000          45069
                         Picture Show Video      (513) 779-0712
Movie Gallery            8568 Winton Rd.
5005 Vine Street         Cincinnati, OH 45231    Video Games Express
Cincinnati, OH 45217     (513) 522-6032          9719 Kenwood Rd.
(513) 242-4067                                   Cincinnati, OH 45242
                         Picture Show Video      (513) 891-8888
Movie Gallery            4901 Vine Street
7247 Wooster Pike        Cincinnati, OH 45217    Video Towne
Cincinnati, OH 45227     (513) 242-2487          1240 West Kemper Rd.
(513) 561-1171                                   Cincinnati, OH 45240
                                                 (513) 742-9800
                                                                                          54


                                             Appendix J

                         Management Structure of HoldMyMovie.com



                                 Initial Management Structure

                                         PRESIDENTS
                                       Bridget Brady (40%)

                                       Rebecca Shay (60%)*



                                                                      Board of Directors
                                                                      Owners (5)
                                                                      Angel Investors
                                                                      Consultant/Advisor


Director of Marketing/Sales       Director of MIS/Operations          Director of Finance
Director of Marketing             David Benseler (40%)*               Jesse Claypool (40%)*
Matthew Kahn (100%)               All MIS/Operations Outsourced       Accounting/Finance Outsourced
Director of Sales
Bridget Brady (60%)

The percentage next to each name indicates the amount of time spent working in that position.
Any name with an asterisk (*) indicated it is not a paid position, but instead sweat equity in the
company.


                                          Job Analysis
A job analysis describes each position within the HoldMyMovie.com Company. The current
owners hold the following jobs, and then in the future more employees will be hired to offer
assistance in all areas of the business.

President-The Co-Presidents of the HoldMyMovie.com Company will oversee all divisions.
These persons will be involved in all aspects of the company, each have a seat on the board, and
will be present at all possible client meetings during negotiation processes. Bridget Brady is the
President and Chairman of HoldMyMovie.com, and Rebecca Shay is the President and CEO of
HoldMyMovie.com.

Director of Marketing-The Director of Marketing is in charge of all demographics of video
rental stores and their customer audience, advertising strategies, is a major player of marketing
                                                                                            55


HoldMyMovie.com to perspective clients, and receiving feedback from both current video rental
store clients and their customers. The Director of Marketing is Matthew Kahn.

Director of Sales-The Director of Sales is responsible for all personal selling aspects to video
rental store clients. This is the person who will negotiate, persuade, sell, sign, and seal the deal
with video rental store clients. The Director of Sales is Bridget Brady.

Director of MIS/Operations- The Director of MIS/Operations Department oversees all server,
network ,software, and web site functions of HoldMyMovie.com. This person is the
HoldMyMovie.com company liaison to the hosting website, and will help update systems when
necessary to change problems into solutions. Almost all of the MIS/Operation functions will be
outsourced. David Benseler is the Director of MIS/Operations.

Director of Finance-The Director of Finance is in charge of all finance and accounting functions
dealing with HoldMyMovie.com. This person is HoldMyMovie.com’s liaison to all outsourced
financial and accounting aspects of the company. Jesse Claypool is the Director of Finance.

There will be weekly meetings every Saturday at 12pm to discuss agendas and progress reports
from all company divisions.

Future Management Structure

                                  Future Management Structure


                                          PRESIDENTS
                                        Bridget Brady (40%)

                                        Rebecca Shay (60%)



                                                                        Board of Directors
                                                                        Owners (5)
                                                                        Angel Investors
                                                                        Consultant/Advisor


Director of Marketing/Sales       Director of MIS/Operations            Director of Finance
Director of Marketing             David Benseler (40%)*                 Jesse Claypool (40%)*
Matthew Kahn (100%)               All MIS/Operations Outsourced         Accounting/Finance Outsourced
Director of Sales
Bridget Brady (60%)
Sales Representative
Rebecca Shay (40%)
                                                                                       56




After a year and a half of operations, HoldMyMovie.com will expand the management structure
to include Rebecca Shay as another Sales Representative, to increase the company’s video
customer base to include the Greater Columbus Area as well as Cleveland.
Future Management Plans
The following is the future management plans of HoldMyMovie.com.

Time Frame                                      Future Management Plans
At 1 year and 6 months                          Addition of Rebecca Shay as a Sales
                                                Representative. Rebecca Shay and Matthew
                                                Kahn will start selling to video rental stores in
                                                the Greater Columbus Area.
At end of 3 years                               Hire Jesse Claypool and David Benseler as full
                                                time employees. Both move to David’s house
                                                and begin selling to video rental stores in
                                                Cincinnati and Dayton, Ohio
4 to 5 years                                    All 5 employees are hired full time. Begin
                                                adding 6 video rental stores a month.
After 5 years                                   Incorporate all video rental stores in major
                                                cities of Ohio to use the HoldMyMovie.com
                                                website.



Location of HoldMyMovie.com

Location:                   HoldMyMovie.com Headquarter
                            28332 Knickerbocker
                            Bay Village, OH 44140

Square Feet:                25 feet x 30 feet

Layout of Offices:          Located in basement with 2 desks, 2 computers, phone, copier,
                            DSL data line, and fax machine.

Hours of Operation:
          Employees:        Employees work 8am to 5pm Monday-Friday
                            Weekly meetings on Saturdays at 12pm
            Website:        Website in operation 24 hours a day 7 days a week
                                                                                          57




                                           Appendix K

                        HoldMyMovie.com Employee Insurance Plans

Since HoldMyMovie.com is located in the Cleveland Suburb of Bay Village, Ohio the company
is eligible to be a member of the Great Cleveland Growth Council of Small Enterprises, COSE.
According to Inc. Magazine ―COSE is the nation’s best-developed entrepreneurial support
program.‖ (COSE Homepage) COSE is a collection of over 16,000 small business enterprises in
the Greater Cleveland area. It is a support program for businesses to offer full packages in
medical, dental, disability, workers’ compensation, retirement plans, and freight. (COSE
Homepage)


                                           Medical Plan

HoldMyMovie.com will offer its employees a Health Maintenance Organization, HMO, health
care plan. A HMO is contracted with physicians, general practitioner and specialists, and
hospitals through an insurance company or managed care company. (CCH Homepage).

Employees insured through a HMO plan choose a general practitioner from a list or physicians.
If a doctor is chosen outside of the HMO list, then the visit will not be paid for, however, if a
physician is chosen from the list the employee will only have a small co-pay of $10 for the visit.
(CCH Homepage) A visit to a specialist not on the HMO list will only be covered if the patient
first sees a contracted general practitioner, and then is referred to a specialist or if it is life-
threatening situation. (CCH Homepage)

SuperMed Classic 200/400

The medical plan HoldMyMovie.com has chosen to join through COSE is called the SuperMed
Classic 200/400. With this plan both outpatient and inpatient medical services are covered at
80% of the UCR, Usual Customary and Reasonable, charge after the deductible. (COSE
Homepage)

The annual deductible for HoldMyMovie.com employees is $200 a year for individuals and $400
a year for families. All office visits will be paid for by the medical plan after a $10 co-payment is
made at the time of the medical visit. ―If a deductible exceeds $1,000 for an individual or $2,400
for a family, and the co-payments have been made over 20% of the medical plan, then the
SuperMed Classic 200/400 will pay for all, or 100% UCR, for the rest of the calendar year.
(COSE Homepage)
                                                                                            58


All SuperMed Classic 200/400 Health Care is contracted with Mass Mutual of Ohio. (COSE
Homepage)



                            SuperMed Classic 200/400 HMO Plan
               All medical services and costs were found on the COSE Homepage.

        Medical Services Covered                       SuperMed Classic 200/400
Annual Deductible                              Single/$200 Family/$400
Out-Of-Pocket Maximum                          Single/$1000 Family/$2000
(excluding deductible)
Inpatient Hospital Care                        80% UCR after deductible
Inpatient Mental Health Treatment              80% UCR after deductible
                                               (Maximum stay: 45 days)
Emergency Accidental Treatment                 80% UCR after deductible
Outpatient Surgery                             80% UCR after deductible
Office Visits                                  $10 co-payment
Laboratory Services                            80% UCR after deductible
Inpatient Maternity Care                       Benefits are the same as any other illness
Well baby and child care                       $10 co-payment
Outpatient Mental Health and Substance         50% UCR up to annual maximum of 30
abuse treatment                                visits/calendar year
Prescription Drugs                             80% UCR after deductible


Vision, and dental examinations are not covered under this HMO plan.


                                       Vision Service Plan

HoldMyMovie.com offers a voluntary Vision Service Plan. The Vision Service Plan (VSP)
provides care services and supplies through a list of optometrists and ophthalmologists.

The plan HoldMyMovie.com is using includes monthly premium rates for the vision service
plan, and the employer is required to contribute 25 percent of the rate. The following are rates for
a single and family plan found on the COSE Homepage:

      Single Plan- $9.05 a month
      Family Plan- $21.26 a month

The following services are available through the Voluntary Vision Service Plan.
                                                                                      59




                            Voluntary Vision Plan Services
            All Vision Service Plan (VSP) services and costs were found on the COSE
       Homepage

         Services                Visit withVSP Doctor         Visit with Non-VSP Member Doctor
             Examination                     Covered         $35 maximum reimbursement plus co-
                                      after $10 Co-pay       pay
              Exam for        Covered except fitting fees    $35 maximum reimbursement plus co-
       Contact Lenses         after $10 Co-payment           pay
              Single                         Covered in      $25 maximum reimbursement plus co-
       Vision Lenses                  full*                  pay
              Bifocal                        Covered in      $40 maximum reimbursement plus co-
       Lenses                         full*                  pay
              Trifocal                       Covered in      $55 maximum reimbursement plus co-
       Lenses                         full*                  pay
              Lenticular                     Covered in      $80 maximum reimbursement plus co-
       Lenses                         full*                  pay
              Frames                         Covered in      $45 maximum reimbursement plus co-
                                      full*                  pay
Contact Lenses Medically                     Covered in      $210 maximum reimbursement plus co-
Necessary                             full*                  payment
              Elective                       Covered in      $105 maximum reimbursement plus
       Contact Lenses                 full*                  co-payment

Categories labeled ―Covered in full*‖means the specific service will be completely covered after
the initial co-payment of $10 is made at the time of a doctor visit. (COSE Homepage)


Dental Plan

A Voluntary Dental Plan is offered to employees of HomeM.com. With this plan there is ―no
minimum number of employees required to participate, and no required employer contribution.‖
(COSE Homepage) Employees may pay either the full or a portion of the premium each month.

The following are costs for the Voluntary Dental Plan:
    Single person- $9.13
    Family- $16.46
                                                                                        60


All dental examinations, x-rays, and cleanings are provided to all employees when they choose a
dentist from a list of the physicians. Also, an employee will know exactly how much to pay for
more complex dental procedures. (COSE Homepage)




Life Insurance Plan

An optional life insurance plan is available to all employees of HoldMyMovie.com. This plan is
through the Medical Life Insurance Company. There is no minimum requirement for the number
of employees to participate in this plan. Benefits are payable in increments of $10,000 until the
total amount is $300,000. (COSE Homepage) The highest amount to have in this life insurance
plan is $300,000. (COSE Homepage)


Long-Term Disability

The Long-Term Disability Plan is available to all employees of HoldMyMovie.com through the
Medical Life Insurance Company. (COSE Homepage) Long-Term Disability protects against
loss of income of an employee if he or she becomes seriously sick or disabled. Monthly benefits
equal up to 60% of the employee’s salary plus benefits from Workers’ Compensation, Social
Security, and other disability income plans. (COSE Homepage)

Employees can enroll in this plan after working for the company for three months and who are
labeled ―full time.‖ The definition of full time for the HoldMyMovie.com Company is anyone
working over 20 hours a week.

The following are definitions of total disability:
    The employee is not able to perform regular material duties during the first 2 years
       (COSE Homepage)
    After 2 years, total disability means the employee is not able to perform regular material
       duties or regular gainful employment for which they have been trained and educated.
       (COSE Homepage)

As the employer, HoldMyMovie.com will pay 25 percent of the total disability insurance
premium for each employee using the plan.


Flexible Savings Account

With a Flexible Savings Account, HoldMyMovie.com deducts employee contribution of
company-sponsored insurance plans on a pre-tax basis. (COSE Homepage) Also, employees can
set aside additional pre-tax dollars or later reimbursements of certain expenses such as day care.
(COSE Homepage)
                                                                                        61


SmartFlex-Section 125 Plan

The Flexible Savings Account plan available to employees of HoldMyMovie.com is the
SmartFlex-IRS Code Section 125 Plan. Employees can set aside pre-tax dollar reimbursements
for health care expenses including deductibles, co-payments, cost of vision care, dental care, and
orthodontics for yourself or your family. (COSE Homepage)

The following is an Employee Savings Example provided by the COSE Homepage:

                               With SmartFlex                 Without SmartFlex
Monthly Income                 $1,666.67                      $1,666.67
Pre-Tax Premium                $62.50                         $0.00
Contribution
Pre-Tax Health Care            $20.83                         $0.00
Account
Adjusted Gross Income          $1,583.34                      $1,666.67
FICA Tax                       $121.13                        $127.50
State of Ohio Tax              $34.04                         $37.17
Federal Income Tax             $205.99                        $218.50
After Tax Expense              $0.00                          $83.33
Spendable Income               $1,222.18                      $1,200.17
Increase in Monthly            $22.01                         None
Spendable Income
Increase in Annual             $264.12                        None
Spendable Income

This example shows that by taking money out of your monthly income and placing it in a
SmartFlex-Section 125 Plan means you do not pay taxes on money placed into this account.

Since the employee in this example took out $83.33 to place into the SmartFlex account, their
amount of taxable monthly income is now $1,583.34 instead of $1,666.67. In the end by placing
this money into the account the employee’s total increase in monthly spending is $22.01
compared to $0.00 if they did not choose to use the SmartFlex account.

Employees need to know that if the money placed into a SmartFlex account is not used by the
end of the calendar year, that the money will not be carried over into next consecutive year.
Instead any money not used by employees will go directly to HoldMyMovie.com. (COSE
Homepage)

Workers’ Compensation

Worker's compensation premium is paid twice per year: in January and July.
It is based on a company's payroll (e.g. the January, 2001 payment would be
based on the payroll for the 6 month period of July - December, 2000). (COSE Homepage)
                                                                                       62


For HoldMyMovie.com, the majority of the staff falls in the category of "8810RN Clerical
Office Employees NOC". (April Pearce Shay, CPA) These are employees who are always in the
office. They are not out in a plant or traveling on business. The rate for category 8810RN is
0.001235. This means the company would multiply the total payroll for a six- month period by
the rate to determine your Workers' Comp premium:




               Payroll                        $5,000
               Rate                           0.001235
               Workers’ Comp Premium          $6.18

All figures came from an interview with April Pearce Shay, CPA.

Retirement Plan: SIMPLE IRA

HoldMyMovie.com offers a Savings Incentive Match Plan, SIMPLE IRA, to all employees.
(Quicken Homepage)

The SIMPLE-IRA is a tax-deferred retirement plan provided by small businesses, with less than
100 employees, who do not contribute to another retirement plan. Both the employee and
HoldMyMovie.com will contribute money to this plan. According to the Quicken Homepage ― In
a SIMPLE-IRA, contributions and the investment earnings can grow tax-deferred until
withdrawal (assumed to be retirement), at which time they are taxed as
ordinary income.‖ (Quicken Homepage)

The maximum employee contribution is $6,000 plus it is matched by HoldMyMovie.com.
(Quicken Homepage) All contributions made to the SIMPLE IRA account are also taken pre-tax,
reducing the amount of the employee salary that is taxed plus both the contributions and earnings
can grow. (Quicken Homepage)

When working for HoldMyMovie.com, in any year you work and receive a salary you as an
employee can make payments into a SIMPLE IRA account at any time. (Quicken Homepage)


Key Person Insurance

HoldMyMovie.com has tow employees that are considered ―priceless.‖ Key person insurance
names HoldMyMovie.com as the beneficiary if a ―key person‖ dies or becomes totally disabled.
(Insure Homepage) According to the Insure Homepage, ―Buying key person insurance includes
covering business debts and leaving a business partner with enough money to continue the
business.‖ (Insure Homepage) HoldMyMovie.com will insure both Bridget Brady and Matthew
Kahn with Key Person Insurance.
                                                                                        63


With Key Person Insurance HoldMyMovie.com will pay the premium for a life insurance policy
on the key employee’s life.(Minnesota Life Insurance Homepage)

HoldMyMovie.com can arrange an Exchange of Insurance Agreement to reduce potential losses
if the ―key employee‖ leaves before retiring. This agreement will allow HoldMyMovie.com to
transfer the coverage to the replacement of the key employee. (Minnesota Life Insurance
Homepage)

If the key employee dies, HoldMyMovie.com will receive the policy's income tax-free
death benefit and can apply it towards business expenses or losses caused by the ―key
employee's‖ death. (Minnesota Life Insurance Homepage)

The following is a diagram drawn by the Minnesota Life Insurance Homepage to further explain
Key Person Insurance.
                                                                                          64


                                           Appendix L
                                      Risks of the Company
Competition
Currently there are no other companies like HoldMyMovie.com. Blockbuster video has an online
site where people can rent videos, but it is only located in two states. There are several aspects of
HoldMyMovie.com that differentiate it from Blockbuster.

        HoldMyMovie.com is only an online store, which enables HoldMyMovie.com to
       have low cost and high revenues.

        Secondly HoldMyMovie.com combines the profits of several stores, which gives a
       new small company like HoldMyMovie.com the ability to compete with major well-
       established companies like Block Buster, and Hollywood.

The risk of a competing company taking away from HoldMyMovie.com’s market share is not
very likely.

Downloading Videos
There is a possibility that video sales would decrease due to people downloading videos from the
Internet. This should not pose a threat to HoldMyMovie.com due to long downloading time.
People still would rather rent videos than wait the many hours it would take to download one.

Site Unpopular to Video Renters
There is a possibility that video renters will not be able to adjust to online video browsing. This
is a risk that HoldMyMovie.com is going to have to take. However, according to
HoldMyMovie.com’s Market Research the percentages indicate that people would use the site
and may actually increase the amount of videos that they rent (see Target Markets Appendix).

Unsubstantial Customer Base
There is the possibility that video stores will not want to go online with HoldMyMovie.com.
They may feel that because they are not the only store the HoldMyMovie.com website they will
not profit. This is very unlikely because at worst HoldMyMovie.com predicts a $500 increase in
revenues for video stores. It is also unlikely that video stores would want to offer their own
online site. By using HoldMyMovie.com, stores can eliminate the cost of online start up and will
have access to a greater customer base. HoldMyMovie.com’s hit rate would be much higher than
an individual video store hit rate.

Software Difficulties
There are potential difficulties in connection with Internet server. Internet traffic delays pose a
potential problem for online viewers. However, this is a problem for all online businesses,
therefore is would not be unique to HoldMyMovie.com. We have chosen Verio.com as the
server provider because of their reputation for high quality service. If any problems should arise,
the proper customer service techniques will be implored to assist unsatisfied customers
                                                                                        65


                                         Appendix M
                              Resumes of the Managing Partners:

                                        David R. Benseler
Permanent Address:                                                              Current Address:
55 Royal Troon Ct.                                                   98 West Green Dr. Room 231
Springboro, Ohio 45066                                                        Athens, Ohio 45701
(513) 748-2588                                                                    (740) 597-5065
                                    david.benseler@ohiou.edu


Objective                To obtain an internship in the field of Finance.

Education                Bachelor of Business Administration
                          Ohio University, Athens, Ohio, 1999-Present
                             Majors: Finance, Management Information Systems
                             Minor: Mathematics
                             Date of Graduation: June 2003
                             GPA: 3.6/4.0

                     Work Experience Financial Marketing Intern
                       PaineWebber, Inc., Cincinnati, Ohio, December 1999-Present
                         Maintained and updated information on over 3,000 clients and
                             prospects.
                         Organized and executed a 2000-company 401(k) marketing
                             campaign.
                         Analyzed and created client performance evaluations.
                         Researched and assessed mutual funds and other securities.


Skills                   Computer: Windows OS, Microsoft Office 2000, HTML, Bill Good
                            Marketing System, SPSS
                         Language: French

Activities               Association of Information Technology Professionals, 2000-Present
                         Phi Gamma Nu Professional Business Fraternity, 2000-Present
                         SouthBrook Church Sunday School Teacher, 1998-Present
References

     Charlie McMahan                  Steve Renie                           Robert Westerfield
     Senior Pastor                    Vice President – Investments          President
     SouthBrook Church                PaineWebber                           Side Effects
     1150 Spring Valley Rd.           8044 Montgomery Rd.                   23 West Main St.
     Centerville, Ohio 45458          Cincinnati, Ohio 45236                Lebanon, Ohio 45038
     (937) 435-9966                   (800) 543-2884 (513)                  934-3656
                                                                                   66



                                      BRIDGET E. BRADY
______________________________________________________________________________
  Home Address:                                                       School Address:
  28332 Knickerbocker                                                    19 South Lancanster
  Bay Village Ohio, 44140           email: bb379998@ohiou.edu            Athens Ohio, 45701
  440-835-1497 web-page: http://oak.cats.ohiou.edu~bb379998/esp.htm 740-589-4340
 _____________________________________________________________________________
OBJECTIVE:
To obtain an internship in the field of Marketing, Management Information Systems, or related
business consulting, in order to gain knowledge of authentic business experiences.

EDUCATION:
Bachelor of Business Administration, Expected June 2002
Ohio University; College of Business, Athens, OH
    Major: Marketing, Management Information Systems (MIS)
    3.19/4.0 GPA, Dean’s List Recipient Winter, Spring 2000

EXPERIENCE:
Student Marketing Intern; September-June 2000
Ohio University Marketing Department, Athens OH
    Preformed multi-tasks including updating department website, and assist in organizing
       Marketing Advisory Council Fall Meeting
    Assistant to the Chair of the Marketing Department
Sales Intern
Talbot’s, Rocky River OH; June-August 2000
    During second week working made $1,000 single sale.
    Designed in-store and window displays of clothing merchandise.
    Learned valuable sales techniques and people skills while assisting customers with
       purchase decisions.
Store Manager
Dairy Queen, Bay Village Ohio, part-time 1996-2000
    Promoted to Store Manager within four months of being hired.
    Multi-task responsibilities such as supervising employee production, closing/opening
       procedures financial, and customer concerns.
    Became proficient at managing a fast paced store employed by my peers.

ACTIVITIES:
Delta Sigma Pi, Professional Business Fraternity
    PR/Recruiting Co-Chairman; Present; Design brochures, flyers, tee-shirts and newsletter
       used for publicizing all fraternal activities and recruitment events.
    Faculty Liaison Committee Head; 1999-2000
    Vice President for Professional Activities for Pledge Class; 1999
    Ritual Team Member

Eucharistic Minister; Christ the King Catholic Church
                                                                                      67



                                    JESSE CLAYPOOL

Campus Address                             Permanent Address
10 S High Street                           2690 Stringtown Road
Athens, OH 45701                              Lancaster, OH 43130
(740) 589-4191                                (740) 687-5161
jc394298@ohiou.edu


OBJECTIVE

      To obtain a career that will use my education in Accounting, International Business, or
      Law.

EDUCATION

   Bachelor of Business Administration
   OHIO UNIVERSITY, Athens, Ohio
   Anticipated Graduation Date: June 2002
   Majors: Accounting, International Business, and Pre-law
   Minor: Spanish
   GPA: 3.7/4.0

WORK EXPERIENCE

   Sales Consultant, Summer 2000
   HAMMOND’S CLOTHIERS, Lancaster, Ohio
               Trained new employees
               Worked as a team to develop new target markets and revise the store’s vision
               Involved in a multitasking environment on a daily basis
               Motivated sales team to meet weekly goals
       Store Manager, Winter 1999
       HAMMOND’S CLOTHIERS, Lancaster, Ohio
               Managed employees in the shipping and receiving department
               Recorded and accounted for inventory on a weekly basis
               Acquired and accounted for merchandise from seasonal and special orders
               Filed and executed customer and vendor requests

HONORS and ACTIVITIES

         Participated in the Integrated Business Cluster at Ohio University, 2000
         Dean’s List, 1998-2000
         Ohio University Ultimate Frisbee Team, 1999
         Selected for the Post Secondary Options Enrollment Program, 1998-1999
         Habitat for Humanity, 1994-1999
                                                                                     68



                                      Matthew Kahn

Campus Address:                   E-Mail:                     Permanent Address:
197 N. Lancaster          mk240098@ohiou.edu                  702 Hatherleigh Road
Athens, OH 45701                                              Baltimore, MD 21212
(740) 589-6276                                               (410) 296-0075
                                    Home Page
                   http://oak.cats.ohiou.edu/~mk240098/ESP


Objective:      To obtain an internship in the marketing field.

Education:
         Bachelor of Business Administration, June 2002
         OHIO UNIVERSITY, Athens, Ohio
         Major: Marketing
         Minor: History

Work
Experience:        Assistant Foreman, 1998, 1999
                   Madison Ave. Management, Baltimore, Maryland
                           Preserved properties and apartments of six addresses
                           Used carpentry skills daily
                           Worked in a team to restructure buildings
                           Maintained properties according to safety codes


Internships:       CBS Radio, Baltimore, Maryland
                   Intern, 2000
                           Worked in accounts payable, accounts receivable
                           Assisted and observed in the sales department
                           Updated balance sheets with journal entries daily

Student
Associations:      American Marketing Association, 2000
                          Learned marketing skills
                          Sold greeting cards to fund activities
                          Helped in marketing research projects

SPECIAL
Activities:         Community Service Activities,
                       40 hours at Genesse Valley Outdoor Learning Center 1996
                       75 hours at YMCA, Baltimore MD 1998
                       12 hours at Ohio University 1999
                                                                                    69


                                      Rebecca A. Shay

Campus Address:                     E-mail:                      Permanent Address:
35 South Congress         rs588398@oak.cats.ohiou.edu            13777 Brigadoon Way
Room 633                                                         Strongsville, OH 44136
Athens, OH 45701                       Home Page:                  (440) 238-2870
(740) 566-9107         http://oak.cats.ohiou.edu/~rs588398/esp


Objective    A challenging internship in the field of Marketing or Human Resource
             Management.

Education    Bachelor of Business Administration
             Ohio University, Athens, Ohio
             Expected Date of Graduation: June 2002
             Majors: Marketing
           Human Resource Management
      Internship: Human Resource Management


Work          B. Moss Clothing Company Internship, Strongsville, Ohio
Experience   Third Key/Assistant Manager and Customer Service Manager,
             Summer and Winter Breaks, 1999- 2000

              Managed group of 10 employees
              Calculated, issued, and sent in all Payroll
              Managed floor moves and new floor layouts with the District Manager
              Handled cash reconciliation for both opening, auditing, and closing the store
              Managed and handled all opening and closing functions of the store
              Imported and exported inventory
              Trained 8 employees both for sales associate and fourth key positions
              Worked with security to catch shop lifters in the store
              Worked with Corporate and the National Cash Register Corporation to help
               fix technological problems
              Marketed advertising information about sales throughout Cleveland area
              Received 2 bonuses for making highest sales goal in the district

Student The Society for Human Resource Management, February 2000 to Present
Activities
            Executive of Programming and Publicity
            National Member of SHRM
            Head Committee Chair for the College of Business Festival

* References available upon request
70