GROUP

(Dread Warriors Productions) 

BUSINESS GROUP APPLICATION
AND AGREEMENT FOR UNITS

OPERATING AGREEMENT 

Table of Contents  

Article I Glossary………………………………………………………………………………………………………                  

Article II Formation Matters…………………………………………………………………………………….

  1. 2.1            Formation of Group………………………………………………………………………………… 
  2. 2.2            Filings………………………………………………………………………………………………………
  3. 2.3            Group Name……………………………………………………………………………………………
  4. 2.4            Principal Office…………………………………………………………………………………………
  5. 2.5            Term of Group……………………………………………………………………………………………
  6. 2.6            Name, Address and Designation of Members………………………………………………
  7. 2.7            Agent for Service of Process………………………………………………………………………
Article III Purposes and Powers……………………………………………………………………………………….    
  1. 3.1            Purposes of the Group…………………….…………………………………………………………     
  2. 3.2            Powers of the Group…………………………………………………………………………………  
Article IV Contributions and Capital………………………………………………………………………………….      
  1. 4.1            Capital Contributions by Members……………………………………………………………………
  2. 4.2            Capital for Staff and Managers…………………………………………………………………………..    
  3. 4.3            Cash and Property Contributions by Unit Holders………………………………………………
  4. 4.4            Withdrawal of Capital………………………………………………………………………………………..    
  5. 4.5            Interest………………………………………………………………………………………………………..  
  6. 4.6            Liabilities of Managers for Contributions……………………………………………………………
  7. 4.7            Capital Accounts……………………………………………………………………………………………..  
Article V Allocations of Net Profits and Losses………………………………………………………………………. 
  1. 5.1            Allocation of Net Profits………………………………………………………………………………………     
  2. 5.2            Member/Investor Recoupment…………………………………………………………………………
  3. 5.3            Banking………………………………………………………………………………………………………..

Article VI Management of the Group…………………………………………………………………………………..   

6.1        Election of Managers…………………………………………………………………………………………..      

6.2        Management Powers of the Manger (Generally)……..……………………………………………………….      

6.3        Specific Power and Authority of Managers……………………………………………………………………     

6.4        Time Devoted to Group………………………………………………………………………………………     

6.5        Other Business………………………………………….…………………………………………………….    

  1. 6.6            Withdrawal of Managers……………………………………………………………………………………….    
  2. 6.7            Rights and Obligations of the Unit Holders…………………………………………………………………..
  3. 6.8            Reports to Members and Others………………………………………………………………………………
  4. 6.9            Meetings………………………………………………………………………………………………………
  5. 6.10         Fiduciary Duties of Managers………………………………………………………………………………….

Article VII Assignment of Interests in the Group………………………………………………………………………

7.1        Incapacity, Death, Bankruptcy of a Unit Holder………………………………………………………………

Article VIII Dissolution, Winding Up and Liquidation…………………………………………………………………

  1. 8.1            Group Continuation…………………………………………………………………………………………..

Article IX Miscellaneous Provisions……………………………………………………………………………………

  1. 9.1             Power of Attorney……………………………………………………………………………………………..
  2. 9.2             Severability…………………………………………………………………………………………………….
  3. 9.3             Applicability of Alberta Law………………………………………………………………………………….
  4. 9.4             Headings……………………………………………………………………………………………………….
  5. 9.5             Successors………………………………………………………………………………………………………
  6. 9.6             Consents and Agreements………………………………………………………………………………………
  7. 9.7             Attorney’s Fees…………………………………………………………………………………………………
  8. 9.8             Waiver of Claims……………………………………………………………………………………………….
  9. 9.9             No Injunction……………………………………………………………………………………………………
  10. 9.10          Cure……………………………………………………………………………………………………………..
  11. 9.11          Person…………………………………………………………………………………………………………..
  12. 9.12          Counterparts…………………………………………………………………………………………………….
Article X Purchaser Representations and Indemnification………………………………………………………………...
  1. 10.1         Representations of the Unit Holder……………………………………………………………………………….
  2. 10.2         Indemnification……………………………………………………………………………………………………

Subscription of Application to follow

Article I

GLOSSARY

Subscription Agreement or Subscription Application”:  A separate page accompanying this Offering Memorandum and entitled “Subscription Application” which each person desiring to become a Unit Holder must complete, execute, acknowledge and deliver to the Managers before being accepted by the Managers as a Unit Holder.

Unit HolderorUnit Purchaser”:  An investor in the Group or one who purchases one or more Units and has thereby obtained a pro rata share in the Group. (Same as Member)

Unit”:  A ratable, interest in the Group as a Unit Holder.  Units equaling a Minimum of $100,000 for one (1) and to a Maximum of $500,000,000 for five thousand (5,000) are being offered hereby at $100,000 per Unit with a minimum purchase requirement or one (1) Unit ($100,000).  Under limited circumstances, the Managers have the discretion to sell fractional Units.

Vote”:  Includes authorization by written consent.

Withdrawal”:  Includes the resignation or retirement of a Member as a Member

Writtenor In Writing”:  Includes email, facsimile and telegraphic communication.

Article II 

FORMATION MATTERS 

  1. 2.1            Formation of Group— The Members do hereby authorize the formation of such Group.  The rights and liabilities of the Members and Mangers shall, except as may be hereinafter expressly stated to the contrary, be as provided for in such limited liability statute.
  1. 2.2            Filings—The Managers shall execute, file record and publish all certificates (including, at the option of the Managers, this agreement), notices, statements and other instruments required by law for the formation and operation or the Group as a Group in all jurisdictions in which the Group conducts business.  Each Unit Holder agrees to execute promptly all certificates and other documents consistent with the terms of this Agreement deemed necessary by the Managers for such qualification.
  1. 2.3            Group Name— The name of the Group shall be: DREAD WARRIOR PRODUCTIONS, an American company, (formed). The business for the Group shall be conducted under, either said name, or such modification or variations thereof as the Mangers may determine from time to time.
  1. 2.4            Principal Office—The Manager’s address to which all mail should be directed is 365 Burchett St., Suite 322, Glendale, CA 91203, however substitute or additional places of business may be established at such other locations as may, from time to time, be determined by the Managers.
  1. 2.5            Term of Group—The Group shall be effective upon the filing of the Articles of the company, and shall remain effective until the expiration of project or of as now stated a twenty (20) year period as provided in this Agreement.
  1. 2.6            Name, Address and Designation of Manager and Members—The name of the Managers is David & Michele Wood; The Business address for the Managers is 365 Burchett St., Suite 322, Glendale, CA 91203. The names and business addresses of the Members are set forth in these Agreements as signed.
  1. 2.7            Agent for Service of Process— The agent for service of process on the Group shall be David  & Michele Wood. 

Article III 

PURPOSES AND POWERS 

3.1        Purposes of the Group— The purpose and character of the business of the Group are to engage in the financing, production, ownership, marketing, distribution and other exploitation of a Business, Entity, Platform(s), Internet, Studio, Films, Books, TV, Merchandise, projects and/or The “Trilogy of I BELIEVE”, as well as Good Newz Media and the exploitation of the ancillary and subsidiary rights to all that is produced and or marketed in the different stages of development of the above.

3.2        Powers of the Group— Such business purposes as set forth in 3.1 shall include the doing of any and all things incidental thereto or in furtherance thereof.  Without in any way limiting the generality of the foregoing statement, the Group may own, operate, sell, transfer, convey, license, mortgage, exchange, exploit or otherwise dispose of or deal with property of every nature whatsoever and engage in any activities in furtherance of said purpose as are not prohibited by law.

The Group purposes set forth in 3.1 hereof may be accomplished by taking any action which is permitted under the Group company statue, and which is customary or directly related to the acquisition, ownership, development, improvement, operation, management, financing, selling, leasing, exchanging, exploiting, or other disposing of property of any nature whatsoever; provided, however, that nothing contained in this Section 3.2 or elsewhere in this Agreement shall obligate the Manager to take any action on behalf of the Group if the Managers deems such action inappropriate or not reasonably necessary to accomplish the Group purposes.

Article IV

CONTRIBUTIONS AND CAPITAL

  1. 4.1            Capital Contributions by Members—Each Member shall contribute to the Group the amount of such Member’s Capital Contribution.  The company intends to offer for subscription pre-formation Group interests (“Units”), priced at $100,000 per Unit (payable as provided in Section 4.3), and each investor who subscribes for at least one (1) Unit [or an approved purchase of a lesser amount] will acquire an interest in the Group subject to the provisions of Section 4.3 of this Agreement.  The Capital Contributions described herein shall constitute the full obligation of the Members to furnish funds to the Group.  No additional funds or other property shall be required of any Member unless that Member wishes to do so.  The Managers may use the Capital contributions for any Group purpose to help project.
  1. 4.2             Capital Contributions by Managers—As its contribution to the Group, the Managers shall acquire and contribute the rights to Good News Media and the Screenplay Trilogy ” I Believe “and visual development for these at normal industry rates, while also contributing the time, effort and expertise of its staff, partners and management in organizing the Group, and in managing the Group during the term of its existence, all for standard industry rates and contracted as such.
  1. 4.3            Cash and Property Contributions by Unit Holders—The Contributions of the Unit Holders shall be an amount equal to the value of cash funds and or property actually received for Units, in the Minimum amount of $100,000 and the Maximum amount of $500,000,000. Pursuant to the above stated percentages of per Unit; each Unit Holder shall be entitled to a pro rata interest in all profits, losses, credits and sash distributions of the Group.  The minimum contribution for each Unit Holder is $100,000, payable in cash, check, goods or services as stated in Subscription Agreement. Also the Managers, in the discretion of its management, may accept purchases of fractional Units to be worked out as per – investor and stated as such. The investors are investing in the whole project and will receive their percentage of this project as stated in Section Article 5.
  1. 4.4            Withdrawal of Capital—Other than as provided in this Agreement, no Member shall have the right to withdraw such Member’s Capital Contribution to the Group or to receive any return of a portion of such Contribution.
  1. 4.5            Interest—No Member or Managers shall be paid interest on any Capital Contribution to the Group.  And no interest shall be paid to Members on amounts placed in this account up to and until such funds are used for the production of project. (i.e., the Minimum amount of capital contribution is reached and the account is closed)
  1. 4.6            Liabilities of Managers for Contributions— The managers shall not be personally liable for the return of any portion of the Contributions for the Unit Holders; the return of those Contributions shall be made solely from Group assets or profits.
  1. 4.7            Capital Accounts— An Account has been established and maintained in accordance with the principles as set forth to run and steward this plan for the term of 20 years as stated in Section Article 2.5.

Article V

ALLOCATIONS OF NET PROFITS AND LOSSES

  1. 5.1            Allocations of Net Profits—All Net Profits of the Group for a Fiscal Year after taking into account the following production, building, marketing and staff costs and then will follow as such in this Section hereof shall be allocated in the following order of priority: 

(i)         First, to the Investor/Members, pro rata in accordance with their Group Percentage Interests, until cumulative profits allocated pursuant to this Section and Section 5.2 can pay for the current and all prior year’s original investment.

(ii)        Second, to the Managers, until the cumulative profits allocated pursuant to this section and for the current and all prior fiscal years are equal to the cumulative losses allocated pursuant to Section 5.2 here of for all prior years.

5.2        Member/Investor Recoupment – Percentage participation payments will be made to members out of the projects revenue stream until members achieve recumbent of their original Investment Capital. Then the Managers and the Member/Investor will share the remaining funds on a 50/50 split basis from there after all expenses have been paid.

5.3        Banking— All funds of the Group shall be deposited in the name of the Group in such bank account or accounts, as shall be determined by the Managers.  No other funds shall be deposited in such accounts.  The funds in such accounts shall be used solely for the business of the Group and this project.  All withdrawals there from shall be made on checks or drafts signed on behalf of the Group by such person or persons, as the Mangers shall designate to pay any and all areas as stated here.

Article VI

MANAGEMENT OF THE GROUP 

6.1            Election of Managers— The election of the Managers to fill the initial position or vacancies shall be by the affirmative vote of a majority in interest of the Members. Application and Agreement provides that by completing such application and by signing it, the Prospective Purchaser/ Member is authorizing his or her vote to be cast by proxy will be held by the individuals David  & Michele Wood for the election of the Managers of (DREAD WARRIOR PRODUCTIONS) and to fill the initial Managers position for the Group pursuant to the Group stature, as the Group is now formed.

6.2        Management Powers of the Managers (Generally)—The Managers shall have full and exclusive control of the management and operation for the business of the Group and shall be responsible for making all creative and business judgments, determinations, and decisions affecting Group affairs except as otherwise specifically provided herein.

6.3        Specific Power and Authority of Managers—The Managers shall have, subject to any limitations imposed elsewhere in this Agreement, the power and authority on behalf of the Group to do or cause to be done any and all acts deemed by the Managers to be necessary to appropriate in connection with the management and operation of the business of the Group.  Without limiting the generality of the foregoing, the Managers may at any time, in its sole discretion and without further notice to, or consent from, any Unit Holder:

  1. (i)              Open and maintain bank checking accounts on behalf of the Group and to designate signatories on such accounts, provided that the funds of the Group may not be commingled with funds owned by or held on behalf of the Managers or any Group, partnership or other entity in which either has an interest;
  1. (ii)            Enter into agreements on behalf of the Group with, companies, ministries, distributors or other third parties pursuant to which the Group in exchange for such studio’s, distributor’s or other third parties’ assistance in financing, producing, distributing, marketing and/or otherwise exploiting the Plan; such agreements may include but are not limited to flat fee arrangements, negative pickup deals or an outright sale of a project;
  1. (iii)           Apply a portion of Capital Contributions to the business, staffing, marketing of the Plan whether or not the Maximum funding of the Offering is achieved;
  1. (iv)           Modify the budget of the Group’s Project to adapt to changing contingencies, so long as in the judgment of the Manager such budget changes improve the Group’s ability to produce a better Plan or project’s;
  1. (v)             Enter into co-financing, co-production or pre-sale agreements with other production entities, thereby permitting the Group to expend fewer dollars on such a Project than if such Project was produced solely by the Group;
  1. (vi)           Enter into agreements on behalf of the Group which provide that persons providing financing, rendering service or furnishing literary material or other materials or facilities in connection with the development, production, distribution, marketing or other exploitation of the Plan shall receive as salary or other compensation, deferred amounts or a percentage participation in the Group revenue;

             (vii)         Put together a council to help steward the overall vision of Plan and also provide accountability for the Mangers.

6.4        Time Devoted to Group— The Managers shall devote to the Group’s affairs such time, on a non-exclusive basis, as the Managers, in its reasonable discretion, shall deem appropriate.

6.5        Other Business—Any Member or Managers shall have the right to engage in or possess any interest in other business ventures of any kind, nature or description (including without limitation, motion pictures and television projects which may compete with the Plan or project) whether or not in competition with the Group.  Neither the Group nor any other Member or Managers shall have any right by virtue of this Agreement in or to such independent ventures or to then income or profits derived there from such independent ventures.

6.6        Withdrawal of Managers— Without the written consent of a majority of the Unit Holders, the Managers shall not have any right to withdraw or retire from the Group until project is done.

6.7        Rights and Obligations of the Unit Holders—(i) No Participation in Management—The Unit Holders shall not participate in the management of the business of, or transact any business for, the Group and shall have only such rights and powers as a Unit Holder as are expressly provided herein or provided by applicable law. Unless hired in a separate contract by the Group.

(ii) Liability—No Unit Holder shall be personally liable for any of the debts, contracts or other obligations of the Group or any of the losses thereof, except to the extent of such Unit Holder’s Capital Contribution, plus such Unit Holder’s share of undistributed Group income if any. No Unit Holder shall be required to contribute any more amounts to the Group except as provided for in this Agreement originally.

(iii) Unit Holders May Not Bind Group—No Unit Holder shall have any power to represent, signs for or binds the Managers or the Group except for the Manger of the Group.

6.8            Reports to Members and Others—The Managers shall prepare and distribute to the Members and Counsel; an annual report including (0nce maximum funding is met) a total breakdown on Group expenditures.          

 6.9        Meetings—(a) An annual meeting of Members may be held at any place, either within or out of the state of California, selected by the Managers calling the meeting or as may be stated in or fixed in accordance with this Agreement.  If no other place is stated or so fixed, all meetings shall be held at one of the principal offices of the Managers (b) A Meeting of the Members may be called by the Managers with the Members for the purpose of addressing any matters on the project. (c) Notice and other matters relating to such meetings shall be in accordance with the provisions of the Group.  The scheduling of such meetings shall not interfere with the duties of the Mangers or its staff in the implementing of the plan.

 6.10      Fiduciary Duties of Managers— The fiduciary duties Managers owes to the Group and to its Members are those of a partner to a partnership and to the partners of the partnership within this Plan and such the company.

Article VII 

ASSIGNMENT OF INTERESTS IN THE GROUP 

7.1        Incapacity, Death, Bankruptcy of a Unit Holder—In the event of the incapacity (i.e., judicially determined incompetence or insanity), death or bankruptcy of a Unit Holder, the executor, trustee, guardian, person(s) or conservator, administrator, receiver or other successor in interest of such Unit Holder shall have all the same rights of such Unit Holder for the purpose of settling or managing such Unit Holder’s interest (subject to the Manager’s approval) and to join with the assignee in satisfying the conditions precedent to such assignee’s becoming a substituted Member.

Article VIII

DISSOLUTION, WINDING UP AND LIQUIDATION

8.1        Group Continuation—The Group shall not be dissolved by the death, withdrawal, retirement or incapacity of a Managers, provided the business of the Group is continued by a remaining or successor Managers pursuant to a right to do so stated in the Agreement, which right is hereby granted.

Article IX

MISCELLANEOUS PROVISIONS

9.1        Power of Attorney—Each Unit Holder, upon execution of an Offering Subscription Agreement and approval of the Manager, hereby makes, constitutes and appoints David and Michele Wood as such Unit Holder’s true legal representative, with full power of substitution, for such Unit Holder and in such Unit Holder’s name, place, stead and benefit, to sign this Agreement, to file and record the Articles of Organization, and, subject to any applicable consent requirements contained in this Agreement, to sign, execute, certify, swear, acknowledge, file and record any other documents, instruments and conveyances as may be necessary or appropriate to carry out the provisions or purposes of this Agreement or which may be required of the Group by law in California, or any other applicable jurisdiction, or by federal or state securities laws or other applicable laws, including, without limitation, amendments to or cancellations of the certificate and fictitious business name statements. 

The foregoing grant of authority is hereby declared to be irrevocable and a power coupled with an interest and shall survive the death, incapacity or bankruptcy of any person hereby giving such power and the transfer or assignment for the whole or any portion of the Group interest of such person; provided, however, that in the event of a transfer by a Unit Holder of all of such Unit Holder’s Unit(s), the foregoing power of attorney of a transferor Unit Holder shall survive such transfer until such time, if any, as the transferee shall have been duly admitted to the Group as a Substitute Member.

9.2        Severability—If any provision of this Agreement shall be invalid, illegal or unenforceable in any applicable jurisdiction, the validity, legality, and enforceability of the remaining provisions, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby.

9.3        Applicability of California Law—This Agreement, and the application or interpretation hereof, shall be governed, construed and enforced exclusively by its terms and in accordance with the laws of the state of California.

9.4        Headings—Headings at the beginning of each Article and Section of this Agreement are solely for the convenience of the readers and are not intended to control or influence in any manner the meaning of the specific language provided hereunder.

9.5        Successors—This Agreement shall be binding on and inure to the benefit of the respective successors, assigns and personal representatives of the parties hereto, except to the extent of any contrary provision in this Agreement.

9.6        Consents and Agreements—Any and all consents and agreements provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the Group.

9.7        Attorney’s Fees—If any legal action or arbitration or other proceeding is brought by any party or person(s) hereto for the enforcement of this Agreement or as a result of an alleged breach, default or misrepresentation in connection with any of the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney’s fees and other costs incurred in such action or proceeding, in addition to any other relief in which the party may be entitled.

9.8        Waiver of Claims—Each Member is hereby urged to obtain the advice of independent counsel regarding all matters relating to this investment.  To the extent that a Member chooses not to obtain separate legal representation on matters relating to the affairs of the Group, any person(s)such Member or Members hereby knowingly and willingly agree to waive any claims against the Manager’s Counsel based on such Counsel’s advice to his Managers client as it relates to the Group.

9.9        No Injunction—The parties hereto agree and acknowledge that in the event of a breach of any party hereto of any obligation hereunder, the damage caused any other party shall not be irreparable or otherwise so sufficient as to give rise to a right of injunctive or other equitable relief, and the parities hereto acknowledge that their rights and remedies in the event of any such breach shall be limited to the right, if any, to recover damages in an action at law or arbitration hereunder and shall not include the right to enjoin the development, financing, production, distribution or other exploitation of the project hereunder.

9.10      Cure—No party shall be liable to any other party for damages of any kind arising out of or in connection with any breach of this Agreement occurring or accruing before the breaching party has had reasonable notice of and opportunity to cure such breach.

9.11      Person(s) - As used herein, the word “person” means any person, firm, partnership, association, corporation or other entity.

9.12         Counterparts—This Agreement may be executed in counterparts by each of the Members and Managers, all of which taken together shall be deemed one original.

Article X

PURCHASER REPRESENTATIONS AND INDEMNIFICATION

10.1      Representations of the Unit Holder—Each Unit Holder hereby represents and warrants to the Group and all Members and the Managers that the following statements are true: (a) Such Unit Holder is a bona fide resident of the Province and State set opposite Unit Holder’s name on the signature page of the Subscription Agreement in that (i) if a corporation, partnership, trust or other form of business organization, it has its principal office within such Province and State; (ii) if an individual, such individual’s principal residence is in such area; and (iii) if a corporation, partnership, trust or other form of business organization which has organized for the specific purpose of acquiring Units in the Group, all of its beneficial owners are residents of such Province or State. 

(b) Such Unit Holder acknowledges the receipt of this Group Confidential Private Placement Offering Memorandum originally dated January 1, 2009, has thoroughly read such Offering Memorandum and understands the nature of the risks involved in the proposed investment; such Unit Holder has been advised that the Managers is available to answer questions about the purchase of Units in the Group and such Unit Holder has asked any questions for the Managers which such Unit Holder desires to ask and has received answers from the Managers with respect to all such questions. 

(c) Such Unit Holder is experienced and knowledgeable in business and financial matters in general and with respect to investments similar to the investment in this Group and such Unit Holders is capable of evaluating the merits and risks of investing in this Group, or such Unit Holder has obtained qualified and experienced independent advice with respect to evaluating the merits and risks of such Unit Holder’s investment in this Group and the purchase of such Units which such Unit Holder has relied on in making such investment decision and such Unit Holder can afford to bear the economic risk of this investment or the loss of it. 

(d) Such Unit Holder recognizes that the Group or project will be just organized and has no history of operations or earnings and is of a speculative nature on this Project.

10.2      Indemnification—Each Unit Holder shall and does hereby agree to indemnify and save harmless the Group, the Managers, The manager’s Counsel and each other Unit Holder from any damages, claims expenses, losses or actions resulting from (i) a breach by such Unit Holder of any of the warranties and representations contained in this Section or (ii) the untruth of any of the warranties and representations contained herein.  If such warranties and representation are either breached or are not true, the Unit Holder who breached such warranties and /or representations shall, at the election of the Mangers, be subject to rescission of such Unit Holder’s rights or interests in the Group.

IN WITNESS WHEREOF, the undersigned have executed the Agreement as of the date set forth below.

 

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MANAGER (S)                                            DATE

 

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UNIT HOLDER                                       DATE

 

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WITNESS                                       DATE

 

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