N.Y. Comp. Codes R. & Regs. tit. 13, Appendices, app 1
PRIVATE PLACEMENT MEMORANDUM
Dated: _______
[Producer(s)]
...............................................................................................................................................................................................
offer
[amount in dollars]
in limited partnership units to finance the production of:
[name of play]
By _ Company,___________________________________________________________________________
a New York limited partnership to be formed.
THESE SECURITIES ARE BEING OFFERED UNDER AN EXEMPTION FROM REGISTRATION PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 146. WHETHER THESE SECURITIES ARE EXEMPT FROM REGISTRATION PURSUANT TO RULE 146 OR OTHERWISE HAS NOT BEEN PASSED UPON BY THE SECURITIES AND EXCHANGE COMMISSION, THE ATTORNEY GENERAL OF THE STATE OF NEW YORK OR ANY OTHER REGULATORY AGENCY, NOR HAS ANY SUCH AGENCY PASSED UPON THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY OR ANY REPRESENTATION THAT ANY REGULATORY AGENCY HAS PASSED UPON THE ACCURACY OR COMPLETENESS OF THIS MEMORANDUM OR THE LIMITED PARTNERSHIP AGREEMENT ACCOMPANYING IT IS A CRIMINAL OFFENSE.
INTRODUCTION
_______________________________________________________________________________________
intend to produce a (Drama, Musical, Revue, comedy, etc.) tentatively entitled__.
They are offering units in a total sum of $ __ for such purposes in a limited partnership to be formed. The units are subject to an overcall of __%.
The producer(s) will be the general partners and will have sole and complete control over the management and affairs of the partnership. The entire financial contribution will be made by the limited partners and net profits, if any, will be divided __% to general partners and __% to limited partners with each limited partnership unit of $__ being entitled to __% of any net profits.
This is an entirely new and speculative venture and it is impossible to project or predict whether the production will result in a gain or loss to investors. Investors should be prepared for the possibility of total loss.
THE UNITS BEING OFFERED TO INVESTORS
The offering is to be made by the general partners without the use of underwriters or sales distributors. Offers to subscribe to or purchase limited partnership interests will be accepted only from persons qualifying pursuant to SEC Rule 146, and such offers are subject to acceptance by the producer(s). Units shall be in the amount of $ __ or multiples or fractions thereof in the discretion of the general partners. All subscriptions must be paid in cash at the time of the signing of the limited partnership agreement. All monies raised by this offer shall be held in a special bank account at __ Bank in trust by the general partners until actually employed for pre-production or production purposes of this particular production or returned to the investors. Further, (except where expressly agreed to the contrary by written agreement with investors) all funds will remain in trust at the above bank and will not be used for any purposes until completion of the offering or returned to investors. Those investors who permit their funds to be used before completion of the offering may be personally liable for all debts of the production incurred prior to such time, as the limited partnership will not be formed until the offering is completed.
In the event the offering is not completed by __, the production will be abandoned and the producer(s) are personally obligated to return all funds raised without interest to investors even if such funds have been used for pre-production or production purposes, except to the extent investors have otherwise agreed.
If the general partners believe that additional funds are necessary for the carrying on of the partnership affairs, they shall have the right, in their sole discretion, to advance or to cause to be advanced or to borrow in the partnership's name, the amount which they deem necessary. No charge shall be made by the general partners for any loan to the partnership which they make. In such event, the money so advanced or caused to be advanced, or borrowed, shall be repaid before any of the contributions are repaid to any of the limited partners.
Each syndication interest being offered is subject to an overcall in the amount of __%, which overcall may be determined in the discretion of the general partners and is payable promptly after demand has been made.
THE PRODUCERS
The producer(s) will be __ who will also be the general partners of the partnership. As such they will have the sole and exclusive control over the management and affairs of the partnership, including the right to end the production at any time. During the past five (5) years they have produced the following plays:
NAME OF PLAY | OPENING AND CLOSING DATES | NUMBER OF PERFORMANCES | PROFIT OR LOSS PER DOLLAR INVESTED |
(If any of the productions listed above are not New York Theatrical Productions, this should be so noted. If desired, additional theatrical experience of the producers may be briefly summarized.)
THE CURRENT STATUS OF THE PRODUCTION
The producer(s) have entered into a minimum basic production contract with__, the author(s). Under this contract, the play must be produced by __ or the producer(s) will lose all their rights in the play. The author(s) is to receive __% of gross weekly box office receipts. The producer(s) have entered into the following additional contracts in respect of the play:
Upon formation of the partnership, the producer(s) will transfer all their rights in the above contracts to the partnership. Copies of the foregoing contracts are on file at __.
In the event the play runs at least __ consecutive New York City performances, the partnership will be entitled to participate in the following subsidiary rights in the play:
In the event of a sale of subsidiary rights in the play, the production company shall receive __% of the net receipts of such sale during the ten (10) years after the end of the last first-class run of the play. The production company's share will then decrease by __% during each __ year period thereafter until __ years after the close of the run when the partnership will receive nothing from the sale of subsidiary rights. The author(s) has the sole right to enter into agreements for the sale of subsidiary rights.
USE OF PROCEEDS
The following represents the estimated use of the proceeds of this offering (before overcall) for pre-production expenses:
$__ has currently been advanced by the producer(s). Such amount, as well as any additional such advances, will be repaid when the partnership is formed (if sooner, so indicate).
ESTIMATED WEEKLY BUDGET
It is presently contemplated that the weekly budget or "break even point" of the play will be approximately $ __. The maximum weekly gross of the play is estimated at between $__ and $ __ depending upon the seating capacity of the theatre at which the play is presented. Based upon present estimates, at capacity approximately $ __ per week will accrue to the partnership as profits. Accordingly, at prevailing ticket prices, taking into consideration presently contemplated payments to the author(s) of the play, theatre, arranger, general partners, director, designers, choreographer and others out of gross weekly box office receipts, the play would have to run a minimum of __ weeks at full capacity, in order to return to limited partners their contributions. Of course, there can be no assurance that the play will run for that length of time or that it will have audiences of any specified size. Furthermore, additional "production," "running" and "other expenses" may be incurred which would increase the budget, and, consequently, the period of time required to recover invested capital.
RIGHTS OF GENERAL AND LIMITED PARTNERS TO RETURN OF CONTRIBUTIONS AND SHARE OF NET PROFITS
No distributions may be made either of return of contributions or share of net profits until the partnership has paid or provided for its liabilities and has a cash reserve of not less than $ __ as well as a reasonable amount for initial expenses after the original company is sent on tour. (If the producer(s) have the right to accumulate funds for additional road companies or for any other purposes before distributions may be made, this should be stated.) When these conditions are met, contributions are to be returned to limited partners in proportion to their investment until all contributions have been returned. (If contributions of any investors, including any additional funds supplied by general partners, are to receive priority of return, this should be specifically set forth.)
As long as the necessary conditions set forth above continue to be met, net profits, if any, are to be distributed in the following fashion:
__% of all net profits are to be distributed to all limited partners in proportion to their capital contribution and the remaining __% of net profits are to be distributed to the general partners.
"Net profits" consists of the excess of "gross receipts" from any source whatever relating to the play less (a) "production expenses" including all expenses and losses actually incurred prior to the New York opening: (b) "running expenses" including all expenses and losses actually incurred in connection with the operation of the play; and (c) "other expenses" actually and reasonably incurred in connection with the business of the partnership.
Upon the closing of all companies presenting the play under the partnership's management and the abandonment of further intention of producing the play, the partnership assets shall be liquidated. Cash proceeds remaining after payment of obligations and creation of necessary reserves shall be applied first to repayment of capital not yet returned and then distributed in the same manner as "net profits." In the event additional funds become available from subsidiary rights or otherwise after such liquidation, such funds shall be distributed in the same manner.
SHARE OF LOSSES BETWEEN GENERAL AND LIMITED PARTNERS
Before net profits have been earned all losses of the partnership shall be borne solely by the limited partners to the extent of their capital contributions. Additional losses shall be borne by the general partners.
If net profits have been earned, losses shall first, to the extent of such net profits, be borne by both general and limited partners in proportion to their respective interest in such net profits.
If any distributions have been made and the partnership does not have sufficient assets to meet obligations and liabilities, the general partners may demand that all partners repay, first any of the net profits distributed to them and if additional funds are necessary to meet obligations, a further demand may be made that limited partners repay contributions previously returned to them without interest.
ADDITIONAL RIGHTS OF GENERAL PARTNERS
In addition to the general partners' right to receive __% of all net profits, they have the right to and intend to receive a producer's fee of $__ during __ period and further intend to receive a cash office charge for the use of their office facilities at __ of $ __ from each company presenting the play. This sum is payable during the period beginning __ and ending __. The producers office facilities need not be used exclusively for the business of this production. The producer's fee and cash office charge shall be considered as an expense of the partnership and are payable regardless of whether funds are available for return of contributions or for distribution of net profits. (If the general partners, or any entity in which the general partners have a material interest, are to receive any additional remuneration in return for additional services to be rendered or materials to be furnished, or if the general partners are to enter into any additional contractual arrangements with the limited partners, those arrangements should be disclosed.)
TERMINATION OF PARTNERSHIP
The partnership shall terminate upon a date to be fixed by the general partners after the general partners have abandoned the idea of all further partnership activities. Regardless of the foregoing, the term of the partnership shall come to an end on the death or insanity of an individual general partner or the dissolution, liquidation or bankruptcy of a corporate general partner.
FINANCIAL REPORTS
An investor will receive the following financial reports: (Set forth briefly the principal reporting financial requirements elected or which may be elected by the production company under section 399-c, subd. 2 of the General Business Law, and regulations issued thereunder.)
OTHER FINANCING
The general partners reserve the right to pay to individual investors, persons rendering services to the play and others an additional participation in net profits solely from their share of net profits for any reason whatsoever.
WHO MAY INVEST
This offering is not being made to the general public. Investments will only be accepted from persons who either: (i) have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of this investment, or (ii) together with their "offeree representative" (as that term in defined in SEC Rule 146) have sufficient knowledge and experience in financial and business matters to enable them to evaluate the merits and risks of the proposed investment and the proposed investor is able to bear the economic risks of the investment.
UNREGISTERED SECURITIES
The securities being offered hereunder are unregistered securities within the meaning of the Securities Act of 1933. Therefore, a purchaser of limited partnership interests being offered pursuant hereto may not re-sell said limited partnership interests without registration or exemption therefrom.
UNDERTAKING
This UNDERTAKING is given pursuant to Section 50.3(e) of the Rules and Regulations of the Attorney General relating to Theatrical Syndication Financing.
(1) The undersigned will be the issuer and offeror of syndication interests in [name of limited partnership], a theatrical production subject to Article 26-A of the General Business Law.
(2) The undersigned intends to offer and sell such syndication interests in or from New York in a private placement pursuant to Rule 146 under the Securities Act of 1933.
(3) The undersigned has filed a private placement memorandum for [name of limited partnership] with the Attorney General on the date set forth below.
(4) The undersigned agrees to keep all funds derived from the sale of syndication interests in [name of bank] in trust in a special account until the expiration of 15 days from the date of receipt by the Attorney General of said private placement memorandum. The undersigned further agrees immediately to cease offering and selling such syndication interests upon receipt of notification in writing at the address set forth below prior to the expiration of such 15-day period from the Attorney General indicating alleged deficiencies in the said private placement memorandum for [name of limited partnership]. The undersigned further agrees, on receipt of such notification in writing, (i) immediately to return all funds derived from the sale of such syndication interests to the investors, without interest, or (ii) to retain such funds in trust in such special account for a period not to exceed thirty (30) days from receipt of such notification while attempting to correct the alleged deficiencies in said private placement memorandum, and at the expiration of such thirty (30) day period, if the Attorney General has not issued a letter stating that the deficiencies in the said private placement memorandum have been corrected, immediately to return all such funds to the investors, without interest.
(5) The undersigned understands that this UNDERTAKING is being executed and submitted pursuant to Section 50.3(c) of the Theatrical Syndication Financing Regulations issued by the New York State Attorney General and that the willful violation of said regulations or this UNDERTAKING is a misdemeanor punishable by a fine of not more than Five Hundred Dollars, or imprisonment for not more than one year, or both.
IN WITNESS WHEREOF, the undersigned has signed this UNDERTAKING on .., 197-......................................................
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N.Y. Comp. Codes R. & Regs. tit. 13, Appendices, app 1