@ 2014 Elder Pictures, LLC© 2010-2011 STATE & CABRILLO PRODUCTIONS, INC. | ALL RIGHTS RESERVED

@ 2014 Elder Pictures, LLC

This business plan proposal has been submitted on a confidential basis solely for the benefit of selected, highly qualified investors and is not for use by any other persons. Neither may it be reproduced, stored or copied in any form. By accepting delivery of this business plan proposal, the recipient acknowledges and agrees that: (i) in the event that the recipient does not wish to pursue this matter, the recipient will return the copy to the contact and address listed as soon as practical; (ii) the recipient will not copy, fax, reproduce, or distribute this Confidential Business Plan Proposal in whole or in part, without permission; and (iii) all of the information contained herein will be treated as proprietary and confidential material. This agreement is executed by the recipient prior to, or contemporaneously with, his or her receipt of the Business Plan Proposal.

THIS BUSINESS PLAN PROPOSAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO ANYONE.

PROSPECTIVE FINANCING PARTIES SHOULD NOT CONSTRUE THE CONTENTS OF THIS BUSINESS PLAN PROPOSAL AS LEGAL, INVESTMENT OR TAX ADVICE. EACH FINANCING PARTY SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANTS, AND OTHER ADVISORS AS TO THE LEGAL, TAX, ECONOMIC AND RELATED ASPECTS OF PROVIDING FINANCING TO THE COMPANY AND AS TO THE SUITABILITY OF SUCH INVESTMENT.

THIS BUSINESS PLAN PROPOSAL INCLUDES CERTAIN STATEMENTS, ESTIMATES AND PROJECTIONS PROVIDED BY THE COMPANY WITH RESPECT TO THE ANTICIPATED FUTURE PERFORMANCE OF THE COMPANY. SUCH STATEMENTS, ESTIMATES AND PROJECTIONS REFLECT VARIOUS ASSUMPTIONS MADE BY THE MANAGEMENT OF THE COMPANY CONCERNING ANTICIPATED RESULTS, BE INCOMPLETE OR INACCURATE AND MAY BE AFFECTED BY THE OCCURRENCE OF UNANTICIPATED EVENTS AND CIRCUMSTANCES. CONSEQUENTLY, ACTUAL RESULTS ACHIEVED MAY VARY MATERIALLY AND FOR THE LOWER OR THE HIGHER FROM THOSE PROJECTED.

Legal NoticeA House Divided

.................................................................................................Executive Summary 4..............................................................................................................Our Vision 5

..................................................................................................................Synopsis 6............................................................................................................Story Points 8

....................................................................................................Production Team 9.................................................................................................Attached Director 10

...........................................................................................Target Role of Helene 14..............................................................................................Target Role of Greg 13

......................................................................................Target role of Max Lyons 15

......................................................................................Target Role of Ben Lyons 16............................................................................................Target Role of Emma 17

................................................................................................Comparison Films 18.................................................................................Comparable P&L Model #1 19.................................................................................Comparable P&L Model #2 20

.............................................................................................................Marketing 21.........................................................................................Distribution Strategies 22

..............................................................................................Target Distribution 24......................................................................................Appendix A: Term Sheet 25

..............................................................................Appendix B: Investment ROI 26...............................................................Appendix C: Development Breakdown 27

....................................................................Appendix D: Financing Scenario #1 28.......................................................Appendix F: Projected Profit & Loss Model 30

............................................................Appendix G: Film Distribution Window 31........................................................Appendix H: Illinois Tax Credit Document 32

...........................................Appendix I: SECTION 181 - Federal Tax Incentive 34............................................................................................Contact Information 35

..........................................................................................................Risk Factors 36

@ 2014 Elder Pictures, LLC

Elder Pictures

Daniel ElderDaniel@Elderpictures.com

847.722.1333

George ElderGeorge@Elderpictures.com

312.498.4555

Table of ContentsA House Divided

Executive Summary

@ 2014 Elder Pictures, LLC

THE COMPANY:

A HOUSE DIVIDED LLC., will be formed under its parent company, ELDER PICTURES, LLC.. for the purposes of financing and producing the motion picture currently entitled A HOUSE DIVIDED (the “Motion Picture”).

• The budget for the Motion Picture is $1, 575, 0000• Brent Huff, a respected and successful director with 5 completed features is attached to direct the

Motion Picture.• There exists a potential for a tremendous ROI within a two-year period, due to foreign sales, domestic

theatrical revenues, and DVD / VOD sales.• We have strong interest from the top sales agency which handles the distribution of movies,

PREFERRED CONTENT.• We are in talks with GARY SINESE (Forrest Gump, Apollo 13) about playing the lead in the Motion

Picture.• The Motion Picture is a medium sized budget feature length drama/suspense, screenplay written by

JOSHUA HOWES.• The Motion Picture will be produced by ELDER PICTURES, LLC.• The Company plans to be in Production by SPRING 2014.• INDEPENDENT TAX CREDIT SECTION 181 - US Federal Government gives a 100% tax write-

off on all investment into film up to $15 million.

A House Divided

Our VisionWe are inviting indie aficionados and savvy financiers to get in on the ground floor of this pathbreaking film. At the heart of the project is the one thing everyone in Hollywood is looking for and desperately wants: a compelling, life-changing original screenplay. The brainchild of writer Joshua Howes and passion project of director Brent Huff, A House Divided is a family drama/thriller filled with mystery, action, suspense, great characters, and a shocking twist. It is the story of a young writer who moves back home with his parents only to see his little brother inherit millions from a long-lost family friend, shutting him out entirely, and prompting him to uncover family secrets that lead to shocking acts of love and violence. Like The Brothers McMullen did for Ed Burns or In the Bedroom did for Todd Field, A House Divided is poised to make its creators break-out stars.It is currently being shopped to talent like Emile Hirsch, Gary Sinise, and Julianne Moore who want to seize a truly great role and extend their prolific careers. Our behind-the-scenes production team combines the passion of two young producers whose last film premiered at Cannes with the wisdom of a grizzled vet whose latest work was nominated for two Emmys. We are perfectly suited to deliver this film to market, where it will be the Winter’s Bone-type sensation of 2014 and earn significant return on its investment. Be a part of the next great indie crossover hit.

@ 2014 Elder Pictures, LLC

A House Divided

SynopsisIn one fateful day, young writer Max Lyons burns all his bridges in New York—gets evicted from his apartment, attacks his boss with a croquet mallet, and spends his last dollar on subway fare. His only option: to move back home with his parents in the leafy Midwestern suburbs, where he clashes with his artistic mother, Helene, and blustery father, Greg, who dote on his carefree little brother, Ben. His only pick-me-up is his old crush Emma, the girl next door who still thinks he’s a hotshot success in New York.Things seem set for a tense, hot, romantic summer—UNTIL a long-lost family friend, Mr. Marechal, suddenly dies… and leaves a $30 million fortune only to Max’s brother, Ben.At first Max tries to make light, celebrating with Ben and romancing Emma on the family sailboat. But soon jealousy gets under his skin—his parents are sucking up to Ben; he finds out his father’s business is failing; and worst of all, Emma “accidentally” kisses Ben, before switching her affections to him. The tension culminates in an explosive family argument about why Max was left out and what Ben will do when he comes into the money.Angry and isolated, Max decides to investigate his parents’ relationship to Mr. Marechal, enlisting the help the person who knows them best—the young Ukrainian housekeeper, Nadia. As Max and Nadia dig into old photos and documents, and Max questions his parents, he finds himself falling for Nadia, a lit student who is much more than she seems. First Max and Nadia discover a new secret—Ben is hiding an affair with Oscar, the gawky neighbor kid. Spooked by Max’s knowledge, Ben breaks it off with Oscar, who’s devastated. Then Ben plunges into dating Emma, despite how it’s killing Max. Meanwhile, alliances in the family shift daily. Angry at being lied to, Helene influences Ben not to trust his father.

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A House Divided

Seeing Nadia’s effect on Max, Greg tries to fire her only to be overruled by Ben—the new master in the house. At the end of the summer, the Lyons go up to Mr. Marechal’s mansion. Out hunting, Max finds his rifle pointed at Ben’s back, but resists the urge in disgust. Ben tells Emma he loves her, and she secretly ditches her birth control. Then—Max finds sure evidence that Helene and Mr. Marechal were lovers. He tries to tell Ben, but his brother knocks him off the family sailboat rather than listen.That night Max spills the family’s secrets in the open. At a topsy-turvy dinner, he announcing that Mr. Marechal is Ben’s father and throws the evidence on the table. Ben attacks Max before Greg confirms it’s true, leaving Ben devastated. Ben flees home with Emma, and Max and Nadia follow, stealing Greg’s prized Jaguar. That night, Ben and Emma make love tenderly, while Max and Nadia make love for the first time, and Greg forces himself on Helene in a cold, awful scene. In the morning, the doorbell at home rings—it’s Oscar. Ben answers. Oscar raises a rifle from the shed. BANG.After Ben’s funeral, Max and Nadia leave together in the stolen Jag. Greg and Helene discover that only Ben or his descendants can inherit the money—at which point Emma reveals she’s pregnant. She and her baby inherit the fortune. Helene leaves Greg, with Emma’s help, to pursue her dream of art school in Greece. Greg is left alone and bankrupt. Finally, Max wakes up in a motel in Iowa to find Nadia has taken off without him. In the last scene, we see him alone amid the corn, hitchhiking to a new life somewhere.

@ 2014 Elder Pictures, LLC

A House Divided

Story Points

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• We see “A House Divided” as an award-winning film that will generate critical acclaim and appeal to a wide audience.

• It’s a story about how money gets in the way of true relationships, prompting us to give in to the seven deadly sins that tear us apart.

• The plot is full of drama, suspense, mystery, and action, with a shocking twist--all the ingredients of a compelling film.

• The story asks the question “What if ?” which will leave audiences buzzing. What if I’d done something differently--would she still love me? Would he still be alive? Would everything be different?

• At its core it’s a film about love, family, respect, and relationships.• Regardless of who we are, we all experience the emotions of greed, lust, envy, wrath, gluttony, sloth, and

pride, at some point in our lives--everyone can relate to this film.• This story needs to be told, especially in today’s tough times, to show that no matter how rough life gets

or what differences tear us apart, we can always overcome them and face the future with hope for a brighter day.

A House Divided

Production Team

@ 2014 Elder Pictures, LLC

George ElderProducer

George served as President and Executive Producer of Luminair Film Productions, Inc. George has over 30 years of production experience as Producer/Director in corporate video work, television production, documentary and feature films. His recent credits include the award-winning, “Encounter in the Third Dimension,” which has grossed $40 million to date, award winning, internationally distributed feature film “Boxboarders!,” which grossed $2 million to date on a $500,000 budget. and the Telly Classic award-winning production of a feature-length documentary film on the music of Edith Piaf distributed by Lionsgate and Producer on a feature length film “You May Not Kiss the Bride.” George currently serves as Executive Producer of “Mexico: One Plate at a Time with Rick Bayless,” which has been nominated for two Emmy Awards in 2014. 

Daniel ElderProducer

Born and raised in Chicago, Il, Daniel, a Co-Founder and Award winning Producer at Elder Pictures, has associate produced more than 700 hours of television, docs, commercials, music videos, and an internationally distributed feature film. Daniel recently finished a short, “Your Own is Your Own,” that was an official selection at the 2014 Cannes Film Festival, the Indian International Film Festival, and others. Before that, Daniel was an associate producer on “Mexico: One Plate at a Time” which is up for two Emmy nominations and on the award winning comedy “Boxboarders,” which has done $2 million in receipts since its release.

Sean Maurer

Born in NYC to Broadway Director/Producer/Writer Michael Maurer and actress Jane Maurer, Sean was raised in Santa Barabara. He began acting at a young age, before becoming a partner in a Hollywood boutique agency representing actors and writers for 8 years. In 2009, Sean formed State & Cabrillo Productions, focused exclusively on the development and packaging of feature films including the thriller JUST PLAY DEAD by acclaimed screenwriter Dan Gordon based on a novel of the same title, the feature and graphic novel THE STUDY, and the bio-pic of the deceased original RED HOT CHILI PEPPER lead guitarist THE HILLEL SLOVAK STORY by James Slovak.

Sean is a partner in S+C Management and Productions, representing actors, writers and directors, where he also produces. Recent productions include THE WESTSIDERS, an award winning surfing documentary by director Josh Pomer currently in pre-production for the scripted feature adaptation; EXIT 91 SUMMERLAND, a horror film based on a real urban legend currently in post-production; and MY LEFT HAND MAN by director Antonia Bogdanovich, a gritty shortfilm playing the present international independent film festival circuit, named Best Short of the New Jersey Film Fest 2012, nominated for Best Short 2012 at the International Memphis Film and Music Festival, as well as Best Short of the Madrid International Film Festival 2012.

Executive Producer

A House Divided

Attached Director

@ 2014 Elder Pictures, LLC

Brent Huff has directed eight feature films in the last decade, following a distinguished career as an actor and writer. His latest film, the hard-hitting documentary “Chasing Beauty,” which reveals the dark side of the modeling industry, was distributed by MTV and peaked at #1 on iTunes, ahead of contemporaneous films such as “Lincoln,” “Life of Pi,” “Zero Dark Thirty,” and “Argo.” His previous feature films were the courtroom drama “Last Will” (2012), starring Academy Award winner Tatum O’Neal, Academy Award nominee Tom Berenger, and James Brolin; and the noir thriller “Cat City” (2009), a fragmented tale of corruption and murder starring Rebecca Pidgeon and Brian Dennehy, which earned accolades at the Palm Springs, Rhode Island, Stony Brook, Methodfest, St. Louis, and Prince Edward Island International Film Festivals and was distributed by Showtime.

Huff works in both short and feature formats. His recent short films include “Hero” (2012), an uplifting drama which won Best Film awards at the Brooklyn, Pan Pacific, Cottonwood, Family and Enfogue festivals; and “Helpless” (2011), a disturbing portrayal of an accident told from multiple perspectives, which won Best Overall Film at the San Diego Indie Fest and the Jury Award at the Riverside International Film Festival.

Additional highlights from Huff’s feature film directing career include “Serbian Scars” (2009), a political thriller starring Michael Madsen, shot on location in Serbia; “Treasure Raiders” (2006), starring David Carradine, one of the most expensive productions ever mounted in Russia, praised for its stunning cinematography and action choreography; and “100 Mile Rule” (2003), a dark comedy starring Maria Bello, Jake Weber, and Michael McKean, a festival favorite at Fort Lauderdale, Santa Barbara, Palm Springs, Taos Talking Pictures, Nashville, Newport Beach, the USA Film Festival in Dallas, and the closing night film at the Cinequest Film Festival. “Welcome to Paradise” (2007), starring Brian Dennehy and Crysal Bernard, a gripping drama about a small-town female evangelist, had its theatrical release in 2007 and has enjoyed great success in the DVD market.

A House Divided

@ 2014 Elder Pictures, LLC

DIRECTOR BIO (CON’T)

Huff’s most recent project was the documentary, “Behind the Orange Curtain” (2013), an expose of the prescription drug abuse epidemic, which has so far won Best Film at the Metropolitan Film Festival, sold out four screenings at the Newport Beach Film Festival, and was recently picked up for distribution by Filmbuff.

His next project is to direct the family drama “A House Divided,” a tale of an unexpected inheritance that splits two brothers and awakens the seven deadly sins within a family.

While many directors begin their careers in commercial and music videos, Huff comes from an acting and storytelling background. Since age 15, he starred in more than 50 films. Thus, in addition to his knack for visual flair, crisp pacing, beautiful images, and expressive musical choices, Huff specializes in drawing spectacular performances from actors—the heart of the director’s craft.

Joshua HowesWriter

Joshua just earned his MFA in Fiction & Screenwriting from Columbia University, where he was invited to teach before he even finished his degree. His script for “A House Divided” won a national Golden Brad in Screenwriting. His previous screenplay, for the short film “Jackson Parish” (dir. Edward McDonald, 2009), won Best Screenplay at the NYU-Tisch First Run Film Festival and was shown on television. His first short story was published this year in the nation’s most prestigious literary journal, Ploughshares, which has since brought out more of his fiction. His fiction also won the Bocock-Guerard Prize for Fiction at Stanford University. As a journalist, he has published more than a hundred stories and reviews in the Chicago Tribune, Baltimore Sun, and Newsday, among others. In the last year he has sold two feature scripts, “The Last Cowboy” and “Two Terrorists Meet,” but “A House Divided” is his passion project.

A House Divided

Casting Director (In Talks)The Management Team is IN TALKS with Johanna Ray who IS NOT YET ATTACHED. She has casted some of the most prolific film and TV projects over the last 25 years. She continually works with some of the great directors such as Quentin Tarantino, David Lynch and Brian de Palma. Here are a few of her credits for some notable movies she helped cast:

• Snowpiercer• Apollo 18• The Bad Lieutenant: Port

of Call - New Orleans• Inglourious Basterds• The Black Dahlia• Kill Bill: Vol. 2• Kill Bill: Vol. 1

• Mulholland Dr.• Cherry Falls • Starship Troopers• Habitat• Lost Highway • The Portrait of a Lady • From Dusk Till Dawn

• Showgirls• Twin Peaks: Fire Walk

with Me• Buffy the Vampire

Slayer• The Blob• Red Sonja• Conan the Destroyer• Firestarter

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A House Divided

Target Role of GregThe management team of the Company has already begun to pursue A-List talent to attach the Picture to make it a more viable project for distributors. Please note that NO TALENT IS ATTACHED at this juncture; however, we will approach the following:

@ 2014 Elder Pictures, LLC

Gary Sinise

Tim Robbins

Kevin Costner

A House Divided

Target Role of Helene

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Julianne Moore

Laura Linney

Catherine Keener

A House Divided

Target role of Max Lyons

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Paul Dano

Elijah Wood

Kieran Culkin

A House Divided

Target Role of Ben Lyons

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Nicholas Hoult

Dave Franco

Sebastian Stan

A House Divided

Target Role of Emma

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Elizabeth Olsen

Imogen Poots

Analeigh Tipton

A House Divided

Comparison Films

@ 2014 Elder Pictures, LLC

In a suburban family, an unexpected inheritance awakens the seven deadly sins.

A HOUSE DIVIDED is a story about a young writer who moves back with his parents only to see his little brother inherit millions from a long-lost family friend, his jealousy prompts him to uncover shocking secrets that lead to surprising acts of love and violence.

FilmDistributi

onEst.

Budget

U.S Box Office Gross

Worldwide Box Office Gross

Martha Marcy May Marlene (2011) FOX Searchlight $2,500,000 $2,981,038 $3,531,038

Beginners (2011) Focus Features $3,200,000 $5,776,314 $14,311,701

City Island (2009) Anchor Bay Films $6,000,000 $6,670,712 $7,875,862

Garden State (2004) Fox Searchlight $2,500,000 $26,782,316 $35,825,316

In The Bedroom (2001) Miramax $1,700,000 $35,930,604 $43,430,604

American Beauty (1999) Dreamworks $15,000,000 $130,096,601 $356,296,601

The Virgin Suicides (1999) Paramount Classics

$6,000,000 $4,859,475 $10,409,377

Happiness (1998) Good Machine $2,000,000 $2,746,453 $2,746,453

Beautiful Girls (1996) Miramax Films $2,000,000 $10,597,759 $10,597,759

Ordinary People (1980) Paramount Pictures

$6,000,000 $54,766,923 $54,766,923

A House Divided

Comparable P&L Model #1

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A House Divided

Nash Information Services: The Numbers - Movie Box Office Data,

Film Stars, Idle Speculation

P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)

Fee (%) Low CaseNegative Costs of the Film $3,200

Production Rebate (Tax Incentive + Pre-Sales) $960

Domestic Theatrical Sales

Domestic Box Office Gross $5,800Gross Film Rentals (Distributors Gross) 43% $2,470Distributer Fee & Other Costs 17.5% ($430)Prints & Advertising ($3,000)Domestic Theatrical NET Proceeds ($960)

Domestic Aftermarket Sales

DVD Market $2,900Marketing and Distribution Costs 33% ($957)Pay-Per View/Video On-Demand 12.5% $730Pay Cable Revenue $2,500Network TV Revenue 10% $580Domestic Syndication $145Merchandising/Music/New Media 1% $60Distribution Licensing Fee 17.5% ($1,210)Domestic Aftermarket NET Produceeds $4,748

Total Domestic NET Distribution $3,788

Foreign Markets

Sales & Overages $8,700Fees & Costs 10% ($870)Overseas NET Proceeds $7,830

Worldwide NET Income $12,578Negative Costs (Films Budget repaid to Investors)Negative Costs (Films Budget repaid to Investors) ($3,200)20% Preferred Return Rate ($640)Total A BEGINNERS NET Profits $8,738

50% Investor Profits $4,36950% Creative Profits $4,369BEGINNERS ROI 137%

Total Estimated IRR100% + 20% + 137%

Comparable P&L Model #2

@ 2014 Elder Pictures, LLC

P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)

Fee (%) Low CaseNegative Costs of the Film $6,000

Production Rebate (Tax Incentive + Pre-Sales) $1,800

Domestic Theatrical Sales

Domestic Box Office Gross $6,700

Gross Film Rentals (Distributors Gross) 43% $2,850

Distributer Fee & Other Costs 17.5% ($500)

Prints & Advertising ($3,000)

Domestic Theatrical NET Proceeds ($650)

Domestic Aftermarket Sales

DVD Market $3,350

Marketing and Distribution Costs 33% ($1,106)

Pay-Per View/Video On-Demand 12.5% $840

Pay Cable Revenue $2,500

Network TV Revenue 10% $670

Domestic Syndication $168

Merchandising/Music/New Media 1% $70

Distribution Licensing Fee 17.5% ($1,330)

Domestic Aftermarket NET Produceeds $5,162

Total Domestic NET Distribution $4,512

Foreign Markets

Sales & Overages $1,340

Fees & Costs 10% ($134)

Overseas NET Proceeds $1,206

Worldwide NET Income $7,518

Negative Costs (Films Budget repaid to Investors) ($6,000)

20% Preferred Return Rate ($1,200)

Total A BEGINNERS NET Profits $318

50% Investor Profits $159

50% Creative Profits $159

BEGINNERS ROI 3%

Nash Information Services: The Numbers - Movie Box Office Data,

Film Stars, Idle Speculation

Total Estimated IRR100% + 20 + 3%

A House Divided

MarketingThe management team of the Company plans to take the Motion Picture to the major film festivals as the target for the film, we see “A House Divided” as an award winning project.

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A House Divided

Distribution StrategiesNOTE: Both Preferred Content or Cassian Elwes ARE NOT ATTACHED, but we have had multiple conversations with both parties and they have both expressed strong interest in the Motion Picture for coming on as SALES AGENTS to rep the film for distribution and film festivals.

Cassian ElwesElwes began his producing career with 1983's "Oxford Blues" starring Rob Lowe and Ally Sheedy and quickly went on to make another 29 films, including "Men at Work", with Emilio Estevez and Charlie Sheen, and "The Chase" with Sheen.

In 1995, Elwes joined William Morris. His first effort was the long stalled project "The English Patient" which won best picture that year. He quickly followed up with such indie hits as "Slingblade" and "The Apostle," both of which were nominated for multiple Oscars. "Monster's Ball" was their follow up, which won the Oscar for Halle Berry.

The Hollywood Reporter has said that Elwes was "involved in a virtual who's who of every great independent film of the last ten years" with films such as "Thank You For Smoking", "Half Nelson", and "Frozen River" '(the last two of which garnered Oscar nominations for Ryan Gosling and Melissa Leo respectively).

"What people lose sight of," Elwes said to Screen International, "is that these films cost a tenth of the films that they competed against at the Academy Awards. The privilege was the recognition."

Elwes is an expert in the field of arranging financing and distribution for independent films having done so for 283 films during his tenure at William Morris Independent.

Since leaving William Morris Independent two years ago, Elwes has been involved in arranging financing and distribution for 23 films including "Lawless," directed by John Hillcoat ("The Road"), starring Shia LaBeouf and Tom Hardy, and the thriller "The Paperboy," directed by Lee Daniels ("Precious"), starring Matthew McConaughey and Zac Efron. Elwes produced the period drama The Butler, which was directed by Lee Daniels and featured an ensemble cast, including Forest Whitaker, Oprah Winfrey, John Cusack, Jane Fonda, Terrence Howard, Vanessa Redgrave, Alan Rickman, Liev Schreiber, and Robin Williams, among others.

Additionally, he is producing "Dallas Buyers Club" starring Matthew McConaughey and Jennifer Garner, "Saints" starring Rooney Mara, Casey Affleck and Ben Foster, and "Hateship, Loveship" starring Kristen Wiig, Guy Pearce, Hailee Steinfeld and Nick Nolte.

On October 29, 2013, Elwes launched the Cassian Elwes Independent Screenwriter Fellowship, in conjunction with The Black List, to award one writer an all-expenses-paid trip to the 2014 Sundance Film Festival and mentorship from Elwes. Elwes and The Black List plan to award the fellowship annually.

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A House Divided

PREFERRED CONTENT / KEVIN IWASHINAKevin Iwashina is a Managing Partner of Preferred Content, a film sales, project finance and media advisory company.

Founded in January 2010, Preferred Content (PC) is one of the premiere brokers of North American distribution rights for both fictional and non-fictional filmed entertainment content. Additionally, PC is a leading supplier of independent movies with a specialization in low budget genre and documentary features.

In addition to his responsibilities at PC, Iwashina is the Co-CEO of Preferred Film & TV (a film, television and digital production company launched in partnership with Content Media Corporation), Managing Partner of Preferred Ventures (a digital media investment fund), Co-President of City Room Creative (a video editing and production services company) and Managing Partner of Killer Digital (an original content company partnered with Christine Vachon's Killer Films that specializes in content for distribution on digital platforms).

Prior to founding PC and his suite of affiliated companies, Iwashina spent 10 years at the Creative Artists Agency (CAA), where he was a talent agent, specializing in film packaging, financing and distribution.

Iwashina holds a B.A. in English Literature with a minor in French Language and Culture from U.C.L.A. He is active in the non-profit and political sectors and currently serves as the Vice Chairman of the Board of Directors of the Coalition of Asian Pacifics in Entertainment (CAPE) and is a Member of the Board of Directors of the International Documentary Association (IDA). He began his career in the mailroom at the United Talent Agency (UTA).

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A House Divided

Target Distribution

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Concurrent to attaching a director and/or the lead cast the production team will seek a distribution deal with one of the following distributors:

A House Divided

Appendix A: Term Sheet

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Target Production Launch Production will begin in the SPRING 2014

Location Chicago & Evanston, IL.

Timing The Picture will be completed by the third quarter of 2014

Production Budget Budget will be held at $1,575,000

Equity NeededFull Equity Investment: $1,500,000Cash Flow Tax Credit to Equity: $1,300,000Debt to Equity: $900,000

Investment Co-Finance Arrangement: $500,000 MinimumFull Finance Arrangement: $1,000,000 Minimum

P&A BudgetsPrint and Advertising $150,000 - $200,000(This is the amount the Production Company will put up in lieu of a distribution agreement.)

Approval Rights

The Company will have approval rights on all creative and business decisions including but not limited to:

• Budget • Chain of Title (copyright) • Lead Actors • Director • Final Cut• Distribution

A House Divided

Appendix B: Investment ROIThe Company has adopted strict financial protocols to ensure prudent use of funds and to maximize Investment Partner returns. The Company’s total cash flows are used first to repay the production equity, and then flow through the profit waterfall at a 100% split. Investment Partners receive 100% of all returns until 120% of the initial investment has been recovered. The other 10% will go to the Company to support they’re efforts to recoup all revenue generated by the picture. Of the remaining net profits, Investment Partners receive 50% and the Company receives 50%. In addition, the Picture that the Company intends to produce will earn ancillary revenue (i.e. video-on-demand, syndicated and cable TV, merchandising) at similar levels of feature films costing up to ten times more. When the film becomes successful in the marketplace, all proceeds from the film paid to the LLC, after deduction of the fees and expenses owed to distributors and sales agents from worldwide gross receipts for all media will be paid out as follows:

•Each investor shall recoup, on a pari passu basis with all other investors, one hundred and twenty percent (120%) of said investor’s contributed funds. By way of example, if an individual’s investment is $50,000, he/she would recoup $60,000 prior to payments to any other party, except for other equity investors;

•After the Picture’s budget (or 120% of the final Picture budget) has been allocated to the equity investors any outstanding residuals and/or deferred payments will be distributed; and,

•Following these distributions, further proceeds will be split, with 50% going to the investors and 50% going to the Company and any other profit participants (talent with back-end participation), in perpetuity.

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A House Divided

Appendix C: Development BreakdownThe Picture will be need phases in financing that will come in forms of equity, soft money (Tax Credits & Tax Allowances, Co-productions, Government-backed Loan Support, Subsidies, Negotiated Service Discounts & Barter, Box-office Rebates/Tax Support) and forms of mezzanine, gap and debt financing.

Typical Film Development Scenario (US $000)Typical Film Development Scenario (US $000)Typical Film Development Scenario (US $000)Development Costs $100$100

(During Development)(During Development)Casting Director Cost $20 20.0%Director Fee Costs $5 5.0%Producers Fee Costs $15 15.0%Overhead Costs $55 55.0%Business & Legal $5 5.0%Total Development $100 100.0%

•Summarizes the costs associated with the development fees that’ll be used with the Picture.

•The Development funds can be rolled into the picture as an equity investment or as a loan investment to help subsidize the development of the property.

To maximize return on investment (ROI) for all general and limited partners, Distribution relationships and Foreign pre-sales will be utilized to mitigate the film’s downside risks.

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A House Divided

Appendix D: Financing Scenario #1To maximize return on investment (ROI) for all general and limited partners, Distribution relationships and Foreign pre-sales will be utilized to mitigate the film’s downside risks. Case study

A House Film Financing Plan (US $000)A House Film Financing Plan (US $000)A House Film Financing Plan (US $000)

Budget of Production Costs $1,575$1,575

Amount % of Budget

Production Subsidy Loan (Illinois Tax Credit - Appendix H) $504 32.0%

Cash flow tax Credit $403.20 25.6%

Debt Loans Against Int’l Pre-Sales and Estimates $551 35.0%

• CoMerica, Union Bank, & OneWest Bank to finance Loan $529.20 33.6%

• Mezzanine Financing

Donated Property, Equipment, Boats (Secured Donations) $79 5.0%

• All locations for “A House Divided” are secured for free as an investment into the Motion Picture.

Equity Piece (120% ROI) $441 28.0%

• Equity with Cash Flowing Tax Credit / Debt $643 40.8%

• Co-Finance Relationships (50% / 50%) (120%) $221 14.0%

• Development Loan (5% of $1.8million) (120% ROI) $79 5.0%

Total Production Cost $1,575 100%

• The adjacent table portrays the typical capital structure of a film. Including the production incentives, this strategy should limit equity used to 25%.

• The Company will not green-light a film unless it reaches the threshold of 70% in foreign sales estimates and soft-monies.

• The investment proceeds will be used to purchase, build, develop, acquire, and finance the equipment, facilities, and working capital to meet the company’s monthly and yearly overhead. This will also include the retention of corporate and industry specialists.

• When the production process begins, the funds will be used fund all the above-the-line and below-the-line costs associated with the film. Everything from writer, director, cast and crew through to delivery of the master prints to distributers.

• Marketing, film festivals, and Prints & Advertising (P&A) are all part of moving the product, our film. We need to make sure we have enough funds to successfully push the film to any festival, markets, and all distributers (foreign and domestic). This is the most important step to recouping the investment.

@ 2014 Elder Pictures, LLC

A House Divided

Appendix E: Financing Scenario #2To maximize return on investment (ROI) for all general and limited partners, Distribution relationships and Foreign pre-sales will be utilized to mitigate the film’s downside risks. Case study

Just Play Dead Film Financing Plan (US $000)Just Play Dead Film Financing Plan (US $000)Just Play Dead Film Financing Plan (US $000)

Budget of Production Costs $1,575$1,575

Amount % of Budget

Production Subsidy Loan (Illinois Tax Credit - Appendix H) $473 30.0%

Cash flow tax Credit $378 24.0%

Donated Property, Equipment, Boats (Secured Donations) $79 5.0%

• All locations for “A House Divided” are secured for free as an investment into the Motion Picture.

Equity Piece (120% ROI) $1,024 65.0%

• Co-Finance Relationships (50% / 50%) (120%) $512 32.5%

• Development Loan (5% of $1.8million) (120% ROI) $79 5.0%

Total Production Cost $1,575 100%

• The adjacent table portrays the typical capital structure of a film. Including the production incentives, this strategy should limit equity used to 25%.

• The Company will not green-light a film unless it reaches the threshold of 70% in foreign sales estimates and soft-monies.

• We can cash flow any part of the investment with a international sales agent, the equity investment would allow for the Company to go straight equity and cash flow the Tax Credit and debt after the production to retain more Cash on hand by not taking a loan out and debt financing the film.

@ 2014 Elder Pictures, LLC

A House Divided

Appendix F: Projected Profit & Loss Model

@ 2014 Elder Pictures, LLC

P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)P&L MODEL ($000's)Rate Low Case Base Case High Case Breakout

Negative Costs of the Film $1,575 $1,575 $1,575 $1,575Production Rebate $504 $504 $504 $504

Domestic Theatrical Sales

Domestic Box Office Gross $2,050 $2,950 $7,000 $12,000

Gross Film Rentals (Distributors Gross) 43% $870 $1,250 $2,980 $5,100

Distributer Fee & Other Costs 17.5% ($150) ($220) ($520) ($890)

Prints & Advertising ($3,000) ($6,000) ($12,500) ($15,000)Domestic Theatrical NET Proceeds ($2,280) ($4,970) ($10,040) ($10,790)Domestic Aftermarket Sales

DVD Market $615 $1,180 $2,800 $5,400

Marketing and Distribution Costs 33% ($203) ($389) ($924) ($1,782)

Pay-Per View/Video On-Demand 12.5% $260 $370 $880 $1,500

Pay Cable Revenue $2,500 $5,000 $10,000 $10,000

Network TV Revenue 10% $210 $300 $700 $1,200

Domestic Syndication $53 $75 $175 $300

Merchandising/Music/New Media $0 $0 $3 $25

Distribution Licensing Fee 17.5% ($640) ($1,210) ($2,550) ($3,220)

Domestic Aftermarket NET Produceeds $2,795 $5,326 $11,084 $13,423

Total Domestic NET Distribution $515 $356 $1,044 $2,633

Foreign Markets

Sales & Overages $1,025 $1,475 $1,750 $3,000

Fees & Costs 10% ($103) ($148) ($175) ($300)

Overseas NET Proceeds $923 $1,328 $1,575 $2,700

Worldwide NET Income $1,941 $2,187 $3,123 $5,837

Negative Costs (Films Budget repaid to Investors) ($1,575) ($1,575) ($1,575) ($1,575)

20% Preferred Return Rate ($315) ($315) ($315) ($315)

Total A HOUSE DIVDED NET Profits $51 $297 $1,233 $3,947

50% Investor Profits $26 $149 $616 $1,974

50% Creative Profits $26 $149 $616 $1,974

A HOUSE DIVIDED ROI 2% 9% 39% 125%

A House Divided

Appendix G: Film Distribution Window

@ 2014 Elder Pictures, LLC

THEATRICAL

HOME ENTERTAINMENT

PPV / VOD

PAY TV

FREE TV

LIBRARY (FREE / HV)

Theatrical• Gross box office receipts are shared - studio and theater

owners.• Domestically, distributor’s % of box office receipts is 45%

- 55%.• Internationally, distributor’s % of box office receipts is

40%-50%.Home Entertainment (continues in perpetuity i.e. library)

• Distribution in the home video/DVD market occurs via a rental or sell-through strategy.

• Rental strategy:- Sales to retailers at a wholesale price or based on a

revenue sharing- Number of video units shipped to retailers is highly

correlated to domestic box office performance- High growth with Redbox and Netflix providing low

cost rental options• Sell-through strategy:

- Most significant contributor of Studio revenues, modest pressure due to transition to rental, partially mitigated by growth high margin digital sales and premium priced Blu-ray

• Approx. 90 MM domestic households will be “DVD capable” in 2009.

Video On Demand (VOD)• High margin digital rental option is growing at a

20%annual CAGR• Studio usually takes between 60% - 70% of VOD

transactionPay and Free Television ( continues in perpetuity i.e library)

• Television licensing sequence:- Pay television (HBO, Showtime and Pay-Per-View)- Network broadcast television (NBC, CBS, ABC, Fox)- Local broadcast (“syndication”) or basic cable network

• License fees for pay television and broadcast are based on the film’s domestic theatrical performance.๏ Library – revenues generated in free tv and home

video, assumed to be equate on a npv basis to approx 7% of first 10 years revenues excluding theatrical.

A House Divided

Appendix H: Illinois Tax Credit DocumentThis is what the Company estimates on a high-end that we will see returned to the the Company before, during or after the Production of the Picture. If we decide to use the tax-credit to monetize the value of the credit, we can receive around 80¢ on the $1 for the tax credit, if we decide to use it during the production, we can receive between 85¢ to 95¢ on the dollar or we can keep the credit and monetize its value after the completion of the film and receive its full value as a tax credit towards the Picture and begin to start paying back our investors at this point.

Tax Credit Certificate/Transfer

• 30% of the qualified Illinois Production Spending.• 30% credit on Illinois salaries up to $100,000 per worker.• Tax credit can be carried forward 5 years from when originally issued by IFO.• The yearly sunset provision has been removed so the IL Film Services Tax Credit does not

expire.• Applicants will receive an additional 15% tax credit on salaries of individuals (making at

least $1,000 in total wages) that live in an economically disadvantaged area (at least 10% unemployment).e transferred

@ 2014 Elder Pictures, LLC

A House Divided

@ 2014 Elder Pictures, LLC

�

�

March�23,�2012���Daniel�Elder�Elder�Pictures,�LLC���Dear�Mr.�Elder,��The� Illinois� Film�Office� a�division�within� the� Illinois�Department�of�Commerce� and� Economic�Opportunity�has�reviewed�your�budget�for�the�film�project�entitled�A�House�Divided.��Based�on�the�budgetary� information�provided,�A�House�Divided�can�anticipate�an� Illinois�Film�Tax� Credit� in� the� approximate� amount� of� Five� Hundred� EightyͲEight� Thousand� Dollars�($588,000).��Please�note� that� this� letter�does�not�guarantee� the� issuance�of�a� final�Tax�Credit�Certificate.��Issuance� of� the� Final� Tax� Credit� Certificate� is� contingent� upon�meeting� all� of� the� rules� and�regulations�of�the�Film�Services�Tax�Credit�and�the�approval�of�the�Director�of�the�Department�of�Commerce�and�Economic�Opportunity.���Sincerely,��

��Cesar�Lopez�Manager,�Illinois�Film�Production�Tax�Credit�Illinois�Film�Office�� � � � � � �

Appendix I: SECTION 181 - Federal Tax IncentiveSECTION 181: You’ve heard of farming subsidies. A few years back savvy film lobbyists created subsidies for the film industry. As they outlined the dangers of runaway film production to Canada, Eastern Europe and Australia, Congress passed legislation that resulted in Section 181 of the IRS Tax Code. Put simply, Section 181 states that investment in a motion picture shot in the US is 100% tax deductable for the investor in the same year invested. Under Section 181 an investor may deduct the money which is invested in a film or television production from his or her passive income earned in the same year. If the investor is actively involved in the operation of the production, he or she may deduct the amount of investment from all active income earned in the same year. Productions with budgets below $15,000,000 (up to $20,000,000) which have at least seventy-five percent 75% of its production completed within the United States qualify under Section 181. Investors can be either individuals or businesses.

• Here are some Investor broad strokes for the Section 181 Tax Deduction: -100% of the motion picture costs are deductible in the same year of investment. - 75% of the motion picture must be shot in the US to qualify for Section 181.- There is a 15 to 20 million dollar budget cap.- There is no minimum film production budget cost.- TV pilots, TV episodes (up to 44), short films, music videos and feature films all qualify for Section 181.- Section 181 can be applied to active income or passive income.- Investors can be either individuals or businesses.- Section 181 is retroactive.- There is no expectation for film distribution or film completion. - The motion picture’s corporation issues Schedule K-1’s to the investors so they can take advantage of Section 181.

WHAT IT MEANS FOR INVESTORS:Tax rebates and incentives for money spent on film or television production within a particular state combined with the benefits of Section 181 allow an investor (working with cooperative film producers) to greatly minimize his or her risk on what would ordinarily be considered a risky investment. For example, if a tax payer is in the thirty-five percent (35%) tax bracket and a qualifying film is shot in Michigan which has a tax credit up to forty percent (40%), an investor will be eligible to recapture seventy five percent (75%) of their investment in a qualifying production. This recapture can be realized before the film is released and/or makes its first dollar. In today’s economy this type of investment assurance is hard to come by.

@ 2014 Elder Pictures, LLC

A House Divided

Contact Information

WEBSITE: http://www.elderpictures.com

Daniel Elder847.722.133

Daniel@Elderpictures.com

George Elder312498.4555

George@Elderpictures.com

Thank you for taking a read, if you have any questions, please contact George or Daniel for more information.

@ 2014 Elder Pictures, LLC

A House Divided

Risk Factors

@ 2014 Elder Pictures, LLC

An Investment in the Pictures involves a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. In addition to the other

information contained in the Agreement, prospective participants should carefully consider the following risk factors before investing in the Pictures. There are significant risks involved

in the development, financing, production, and exploitation of a motion picture, and the motion picture business is highly competitive. Success is largely dependent on public taste

which is both unpredictable and subject to change. Accordingly, the commercial potential of the Pictures cannot be accurately predicted. Furthermore, many motion pictures do not recover their development, production and exploitation costs from traditional streams of

distribution alone and may never generate proceeds payable to investors, even after exploitation in other markets and media.

A House Divided