This EQUITY PARTICIPATION FINANCING AGREEMENT ("Agreement") is made and entered into as of                    , 2007, by and between Cyclone Productions, Inc. and ("Equity Participant").

NOW THEREFORE, the Company and Equity Participant agree as follows:
Equity Participant agrees to provide to the Company or its assignee, an Irrevocable Letter of Credit in the amount of $XXXXXXXX (XXXXXX Thousand Dollars) substantially in form and substance to the letter of credit attached hereto as Exhibit 1. Such Letter Of Credit shall be utilized as a portion of the direct financing or underlying collateral for a bank production loan with respect to the financing requirements for the production of a feature-length motion picture in the English language entitled "Shiver" (the "Picture") based upon the novel by Brian Harper and the Screenplay by Robert Weinbach. Such Letter Of Credit shall be required on or about forty five days prior to the targeted date of commencement of principal photography for the production.

I. PRODUCTION FINANCING

The financing requirements for the production of the Picture are contemplated to be not more than $3.5 million. Such financing requirements shall be accommodated by private equity participations in the form of irrevocable letters of credit conditional upon completion of the picture, or cash (at the election of the Equity Participant), Missouri State tax credits in amount of $600,000 and may also include participations in the form of provisions to the production of essential goods and services (i.e. studio and post production facilities) and foreign pre sales and/or bank gap financing which shall be utilized as the underlying collateral for a production bank loan supported by a completion guarantee.

Each equity participant shall provide to the Company on a pro rata, pari passu basis with all other equity participants, letters of credits or other approved collateral in order to effect the production financing for the picture, including, but not limited to a production bank loan, if required and an allocation for a Completion Bond.

All monies derived from the production bank loan, if any shall be utilized exclusively for pre-production, production and post-production ("production") of the Picture, at the sole discretion of the Company.

II. RIGHTS RETAINED

The Company shall retain and shall be the sole or partial owner of the copyright in and to the Picture, and all extensions and renewals thereof.

The Company shall retain all creative and business control with respect to the Picture.
The Company shall retain all motion picture, television, audio-visual device, sound recording and ancillary and allied rights throughout the universe in perpetuity, in and to the Picture except as such rights may be licensed to other entities for purposes of exploiting the Picture and generating revenues therefrom.

The Company shall retain the right to distribute, exhibit, perform, rent, lease, or sell the Picture and any adaptations or versions thereof, without limitation, and by any means and technical processes now known or hereafter devised or contemplated, including film, tape, disc, wire, audio-visual cartridge, cassette, digital transmission and in all forms of television, in any place or manner whatsoever, including homes, theatres and the Internet, or any place hereinafter contemplated

III. DISTRIBUTION OF PROCEEDS

From all proceeds and amounts derived from the sale, license and any other exploitation of the Picture, if any, to first repay the production cost of the Picture including Production Bank Loan (if any), second, to pay a Fifteen Percent (15%) Premium to the Equity Participants, third, to pay deferments, if any, to third party talent, thereafter, to pay Profit Participations as described hereunder on a pro rata, pari passu basis. It is understood that each Equity Participant shall recoup One Hundred Percent (100%) of their respective initial Equity Participation plus a Fifteen Percent (15%) Premium on a pro rata, pari passu basis with all other Equity Participants plus respective profit participations as indicated herein.

It is understood that the following sums shall be deducted from all proceeds and amounts derived from the sale, license and any other exploitation of the Picture: any and all payments to cover (1) the actual ongoing costs and expenses incurred by the Company or on its behalf, including, but not limited to, pre-production, post production, marketing and (2) advertising the Picture, legal and other accounting fees; (2) reasonable reserves for and/or payment of guild residuals or other similar costs arising out of the distribution or other exploitation of the Picture; (3) any and all other reasonable costs, fees and expenses paid or incurred by Company in connection with the Picture. All amounts thereafter remaining, if any, from the sale, license, or other exploitation of the Picture characterized as Producers share of revenues, shall be referred to as "Net Proceeds."

Provided that Equity Participant is not in material breach of this Agreement, and the Picture is produced, and subject to the other terms of this Agreement, Equity Participant shall receive a pro rata pari passu share of Fifty Percent (50%) of One-Hundred Percent (100%) of the Net Proceeds (aka Net Profits) derived from the exploitation of the Picture.

Further terms and conditions re recoupment of picture cost and distribution of profits:

All proceeds generated from the sale and exploitation of the Picture shall be deposited and paid to a separate, special bank account to be administered by a third party fiduciary agent and shall be paid out in accordance with a predetermined schedule as follows.

1. Recoup/repay negative production cost of picture including bank loan (if any).
2. Payment of 15% premium to equity participants pro rata and pari passu
3. Payment of deferments to third party participants including talent, not to exceed $1 million.
4 Distribution of profits pari passu to all profit participants.

Reports and profit payments if any, semi annually for first two years, annually thereafter.

Profit participations to third party participants including talent shall be solely from producer's share of profits. Accordingly, Equity Participants' profit share shall not be diluted as a result thereof.

IV. ASSIGNABILITY

This Agreement shall inure to the benefit of the Company and its successors and assigns. The Company may assign this Agreement, or any of its rights or obligations hereunder, to any third party, and in the event of any such assignment, such third party shall assume all of Company’s obligations hereunder. However, in such event, the Company shall not be relieved of its obligations to Equity Participant hereunder. Equity Participant's rights hereunder are assignable and transferable subject to approval of the Company but, in any event, shall inure to the benefit of its heirs and its successors .

V. REPRESENTATIONS AND WARRANTIES

Company represents and warrants:
The Screenplay is based on the novel "Shiver" written by Brian Harper and the screenplay written solely by Robert Weinbach. The Company holds all rights to such material relative to the production and distribution of a motion picture based thereon. To the best of the Company's knowledge, any production or exploitation of the Picture, or any production based on the Screenplay or Picture, or any adaptations or revisions of the Screenplay or Picture will not violate or infringe upon the rights of privacy or publicity of any person or entity, or give rise to any claims of defamation.

There are no pending or threatened claims or litigation related to the Picture, the Screenplay or any rights, granted to the Equity Participants. The Screenplay has not been previously exploited in any manner, whatsoever.

It is anticipated that the production and financing entity will be a limited liability corporation. (LLC) which may, at the election of the Company be a member managed LLC. In such event, the terms and conditions herein shall be transferred/assigned and incorporated in and Operating Agreement to be executed by the parties hereto. Any cost incurred by the Equity Participant with respect to the issuance of a letter of credit, not to exceed One Percent (1%) of the amount of the letter of credit, shall be reimbursed to the Equity Participant from the production budget not later than date of commencement of principal photography of the Picture.

VI. MISCELLANEOUS

This Agreement contemplates the parties' entire agreement, and supersedes any and all prior agreements, whether written or oral. Any modification, amendment, waiver assignment or termination must be in writing, and by signed mutual consent except as provided herein. This Agreement does not constitute a partnership or joint venture between the parties except as indicated herein.

Any dispute under or relating to the terms of this Agreement shall be submitted to arbitration in Los Angeles, California in accordance with the rules promulgated by the American Arbitration Association, and any arbitration award may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to recover any and all reasonable attorney's fees and other costs incurred in the enforcement of the terms of this Agreement or for the breach thereof. Equity Participant's rights and remedies in the event of any breach of this Agreement by Company shall be limited to Equity Participant's right to recover actual damages, if any. Equity Participant waives any right or remedy in equity, including any right to terminate this Agreement, or to rescind any rights or obligations granted to Company hereunder..

This Agreement shall be governed in accordance with the laws of the State of California.


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CYCLONE PRODUCTIONS, INC.



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Equity Participant