New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Appendices › Appendix 1

Current through Register Vol. 46, No. 28, July 10, 2024
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-......................................................
Name
Business Address
Home Address
Business Telephone
				___________________________________________________________________________
Home Telephone
				_____________________________________________________________________________