Houmu Holdings Ltd (HOMU)

[KFinnell]

XXStream Entertainment Inc.
www.clubxxstream.com

BREATHE DIGITAL™


CONFIDENTIALITY AGREEMENT



The undersigned reader acknowledges that the information provided by Club XXSTream, Ltd. in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Mr. M. A. Pino.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to Club XXSTream, Ltd. and/or Mr. M. A. Pino.

Upon request, this document is to be immediately returned to Club XXSTream, Ltd. and/or Mr. M. A. Pino.


___________________
Signature


___________________
Name (typed or printed)


___________________
Date

This is a business plan. It does not imply an offering of securities. The information contained in this business plan is current as of December 2003.

Exhibit A


XXStream Entertainment Inc.
www.clubxxstream.com

CORPORATE OFFICES

1201 South Alma School Road
Suite 550
Mesa, AZ 85210
Ph: 480.385.5137
F: 480.385.5138

Asian HQ

HSBC Tower
Level 21
101 Yin Cheng East Road
Pudong, Shanghai
SHANGHAI
China
200120
8621-2890-3033 Phone

The material contained herein is strictly confidential. By receiving this document the bearer agrees to keep all material and information confidential and acknowledges Club XXSTream, Ltd. as the absolute owner of this business plan. Furthermore, the recipient of this document agrees that Club XXSTream, Ltd. may use any and all legal means to protect its right to confidentiality.









Table of Contents
Executive Summary
Entertainment Portal and Business Model
Business Model Incorporate Multiple Revenue Streams
Sustainable Competitive Advantage
Market Honed Executive Management Team
Raising First Round of Funding
Company Overview
Market Indicators and Overview
Competitive Analysis and Barriers to Entry
Enabling Technology and Infrastructure
Club XXSTream Web Site Platform
Revenue and Business Development
Business Development and Sales Model
Marketing Strategy
Usage of Proceeds
Exit Strategy

Financial Projections – Attached






















Executive Summary


Club XXSTream offers a new type of entertainment portal on the web that is built from the ground up for today’s always on high bandwidth 18-35 year old demographic. The club will be the first portal online that will blend online and offline entertainment in ways that leverage the synergies of the real and virtual worlds in unique ways. We are creating a new media company that will provide multicultural digital content for consumers in every major market segment in Europe, South America, Asia and Mexico.

Club XXSTream is targeting a young global demographic, with primary focus to be 18-35 years of age, as this demographic group is affluent, technically sophisticated and is always seeking new ways to find entertainment off and online. Club XXSTream is already in partnership discussions some of the worlds largest media content and technology providers including MTV, Microsoft, Macromedia, Real Networks, Yahoo, AOL/Time Warner who may provide content, technology and or sign up for launch advertising services in order to secure a long term partnership with Club XXSTream.

We believe that our core branding must not be too “corporate” or our potential consumer audience will be turned off – the teens and young adults with hormonal imperatives are seeking sites that enable them to dive into their cultural expressions! Our web site and/or conveyed brand needs to project some sense of adult supervision, but we must keep a healthy distance from our consumers and let them define, communicate and revel in their online persona and/or deploy their artistic mantra in ways that are self-defining.


Our Entertainment Portal Business Model

Club XXSTream Phase One

The Club XXSTream Phase One will focus on the launch of the entertainment portal which will provide streaming audio and video clips that will be categorized into eight discrete entertainment channels and will reflect the diverse tastes of today’s web-focused generation that are always seeking online entertainment. “Standard Content” for these channels will be created via joint venture deals with content companies, allowing bands and individuals to upload their own “channel focused” content for viewing and listening by “Club XXSTream” members at no charge. “Premier Content” will comprise audio and video clips that will be of higher quality, may include celebrity focus, may be offered for a limited time and/or may be content that can be purchased for replay at a later date. The entertainment portal will also offer unlimited branded “club XXSTream” e-mail addresses for all registrants that will include 250 megabytes of information for storage with banner advertising inserted via the e-mail management console that will be geo-targeted.



Club XXSTream Phase Two

All Club XXSTreams will utilize a central broadcast facility located and staffed in Mumbai India which will have redundant T-3 lines augmented with Satellite Uplink and Downlink capabilities, staffed on a round the clock basis. This will enable each club to eventually broadcast all content in NTSC and/or Pal formats utilizing its satellite communications capabilities and each club will have the ability to license its content to cable and satellite providers within their countries of origin. Club XXSTream will also license content from other sources such as MTV and major and secondary broadcast networks for webcasting via its online network and/or integrating this content with its own content in creative ways to appeal to markets that may be segmented by language or culture; i.e. with Asian, European, South American, North American themed content channels.


Business Model Incorporates Multiple Revenue Streams

The Company is building an entertainment company that blends the best of online and offline business models to drive economies of scale for operations and to better leverage advertising revenue generation across all on and offline properties. We are deploying a revenue model that is multi-tiered - encompassing; an initial no charge period to seed and drive the market for our entertainment portal, followed by an advertising-supported free and subscription services for consumers accessing our content, online advertising and sponsorships that will be geo-targeted when and where feasible to derive higher fees from our advertisers.

The Club XXSTream entertainment portal will operate for 6-12 months with no charges whatsoever for people who want to access the club’s streaming video and audio feeds – or, until it can generate sufficient traffic to start selling advertising that will be inserted into some of its streaming video and audio broadcasts and banner ads in key areas of the web site. Club XXSTream will eventually sell advertisers a comprehensive suite of “package deals” (like conventional traditional media companies) that will include online ads that will be geo-targeted utilizing inbound IP Address identification, video and audio inserted ads, “broadcast drive time” ads that will be based on predetermined times of the day or night, embedded ads in the Club XXSTream Daily/Weekly Blast Newsletters (which will have audio and video components) sponsorship opportunities that will be event driven or across all “branded Club XXSTream” properties.

We intend to leverage our online and offline market presence with our advertising sponsors - each Club XXSTream will also be set up with electronic advertising boards that are developed for key viewing areas around each “Meet Up Station” as well as booth seating areas, dance floor, VJ booth, etc. that can be purchased separately, or for events, or during key webcasting periods, with week-end time slots being priced more expensively.

We plan to have 125,000 Club XXSTream Members, while growing to $28 Million in Annual Revenue with Three Years



Sustainable Competitive Advantage

We will have a sustainable competitive advantage based on our proprietary self-loading content that will increase exponentially over time, multi-tiered advertising revenue stream, and strong brand development supported by an aggressive online and offline market awareness campaign.

We believe a key determinant of our ongoing competitive advantage and driver for a possible acquisition by a larger media company will be our in-place content library that will be uploaded, acted upon and interacted with by our Club XXSTream membership (online community).

Another competitive differentiation will be the size of our online community that will be reinforced by our country-specific versions (iterations) of our Club XXSTream core site – these sites will be tailored for consumers throughout Asia, South America, Mexico and Europe. We think that many US based companies ignore international markets; our focus from day one is on building an entertainment portal that is as attractive to a young consumer in Mexico City or Hong Kong as it will be to a club member in New York or San Francisco.


Market Honed Executive Management Team


Executive Team

Mario Pino, CEO/Founder - Mario Pino is the visionary leader of Club XXSTream. He has ten years of experience structuring and negotiating multi-million dollar contractual relationships with companies in diverse industries, including real-estate, manufacturing, financial services, high tech and retail. Mr. Pino has lived, worked and built revenue producing relationships with customers in Europe, Asia and South America. He has successfully arranged and issued collateral for project funding via finance structures tailored to meet client’s objective in amounts ranging from $5M o $120M USD with companies in diverse countries, including Thailand, China and the UK.

Mr. Pino has utilized traditional and web based marketing to generate a lead flow from potential client companies, then worked closely with the CEOs and Board Members to structure short tem financing, secured by the client’s fixed assets – enabling the client to gain temporary relief from restricted cash flow and to have sufficient resources to complete projects on time and under budget and/or execute their tactical business processes. He has extensive experience working with CEO and BOD members developing business plans, restructuring their companies, and/or reworking their operational plans to help the client go public via NASDAQ and/or the OTC markets. He has established relationships with such top tier banking institutions as: HSBC (Hong Kong Securities Banking Corporation), Royal Bank of Canada, Bank One Corporation, Dresser Bank, Deutsche Bank and Merrill Lynch.


During his tenure with Alexander Estate and Trust in the 1999-2003 timeframe he worked closely with some of the largest and most successful banking institutions and private trust companies in the world to create financial packages for SMB companies to ensure credit facilities that were established for a client would meet time requirements specified by the client and by Wall Street Securities firms. During this period he also established and managed a network of 200 associates located in key markets all over the world, developing successful joint ventures that generated a strong deal flow and revenue stream for the company.

Holly Katsaros, Business Development Manager and acting Vice President of Marketing - With nine years of experience in high tech sales, marketing, business development and investment banking, Holly Katsaros has brought her keen understanding of the customer and their requirements to several industry leaders, including EDS, Insight Development Corporation and Touchscape, LLC prior to joining Club XXSTream. Ms. Katsaros has in-depth experience designing and implementing customer-centric sales and marketing programs, negotiating contracts and developing market launch programs for global customers, encompassing raw startups to G2K corporations. She has significant multi-cultural business experience and has traveled extensively in the past 6-8 years to work with customers in Western Europe, the Middle East and Southeast Asia. She graduated in 1995 from Central Michigan University, Mt. Pleasant MI, with a Bachelor’s Degree, Economics, College of Business Honors Fraternity, Sigma Iota Epsilon.

Board of Advisors

Noelin Lewis Joseph Didon - July 16th 1965 to 14th March, 1985 worked in Treasury of Seychelles as accounts clerk, senior examiner of accounts, chief cashier, licensing officer, treasury accountant and acting deputy accountant general. March, 1985 to 30th June, 1989 head of financial task force section and 4th in command after the principal secretary ministry of finance, in Central Bank Building, Victoria, Mahe, Seychelles. Insurance agent from 1972 to date.1984 to 1986 studied law and is a member of the Institute of Legal executives in UK. June, 1989 retired from Government of Seychelles services at Ministry of Finance. July 1989 to date in private practice as a financial consultant, realty and insurance businesses, broker of commercial and financial transactions including project fundings, brokerage for buy and sell MTNs, bank guarantees, oil, gold, diamond and other commodities. 1999 admitted to the Certified International Financier in USA.
Rodney Tang – senior government official was head of the Immigration and Naturalization Service for Hong Kong for twenty-five years from 1964 until he retired from active Government service in 1989; subsequently founded is acting as CEO of Dove Holdings Corporation, Ltd. and First United International, Ltd. Both are multinational corporations specializing in financial services.

Lee Traupel - the CEO/Co-founder of Intelective Communications, Inc., a self-funded, profitable full service advertising agency – he has more than twenty plus years of experience contributing to the success of early stage companies and has market-honed experience branding products and services and positioning companies in today’s warp speed digital economy.

He has made significant contributions as a member of the executive management team and taken two companies to a successful IPO and or acquisition. He lives, sleeps, eats and breaths marketing and has been helping companies develop a web-based go to market strategy since the fall of 1996 - making him a grizzled veteran in the interactive marketing space!

Mr. Traupel has been a featured speaker and panelist at numerous trade shows in the United States, Europe and Asia. These include: Interop, CES, Comdex (US and Japan), The Hannover Fair, The CAT Show (Stuttgart), AEC Systems, Siggraph, Internet World, PC Expo and numerous regional tradeshows. Additionally, Mr. Traupel has been interviewed by and featured in many publications including: CRN, eWeek, PC Magazine, USA Today, Windows 2000, Business Week, Home Business Magazine, The Cadalyst and Cadence Magazines. He has developed revenue-producing relationships with numerous global G2K clients including: AOL/Time Warner, CNet, OMI, Pfizer, Lycos, Sony, JWT, Boeing, Wells Fargo, Olivetti, BMW, Internet.com/INT Media Group, BT, Yahoo, NTT and many others.

His published articles on interactive marketing are syndicated via numerous newsletters and web sites including Internet.com, Adventive, SitePoint, WorkZ, Yahoo, EuroPublic, BuyerZone, ClickZ, SEO Today and Bpubs. He has been a contributing Mentor to the Silicon Valley Association of Software Entrepreneurs and a former BOD member of two successful software services companies. Mr. Traupel graduated from George Mason University in 1980.


Raising First Round of Funding

We are rapidly taking the company from concept to working model and we anticipate launching a working framework of our portal by the end of March 2005. It will be available via www.clubxxstream.com As a result of this “soft launch” we anticipate having consumers utilizing our web site/entertainment portal in a productive manner. Web site and technology development are on schedule and partnership discussions are underway for content licensing, advertising and related processes. We have invested a small amount of seed capital in the venture but we will require $2-3M in financing over the next 6-12 months in order to deploy our aggressive two tiered advertising campaign and we anticipate raising a mezzanine round of funding of $8-12M within the next calendar year from our launch date.

Financial and Staffing Forecast


Fiscal Year 2006 2007 2008 2009 2010
Est. Employees 35 75 150 200 250
Revenue $1.2M $12M $28M $75M $150M
Profit (loss) ($2.5M) $3M $9M $23M $58M


Company Overview

Club XXSTream was created to take advantage of the enormous demand for audio and video entertainment on the web - which is in turn driven by the emergence of the internet as a viable entertainment medium and global broadband penetration. Our Club XXSTream entertainment portal will mirror successful online entertainment portals like Launch/Yahoo, DigiZaar.com, Singingfish.com, MSN, AOL, and thousands of second tier sites that provide limited amounts of entertainment portal content.

One of the aspects researchers deems central to develop a viable entertainment portal like Club XXSTream for the global online mass market is the quality, breadth and depth of content. Besides the forms of limited online multimedia directly derived from traditional media entertainment (e.g., films, pictures, audio files available online), the online world currently seems to suffer from a lack of captivating content which would be able to generate motivation in the potential consumers to bookmark and return to an online entertainment portal.

We feel that there is a significant opportunity for a well funded nimble start up to bring to market an entertainment portal that targets a global market of consumers encompassing the US, EU, South America and Asian markets - as many traditional media companies are still not comfortable in putting in place massive investment in content creation or they are so bureaucratic that they either can’t figure out to build a viable model or they can’t get to the market in time.

We believe that the future of online entertainment depends to a significant extent on the development of content that is presented in a compelling way which in turn helps to drive consumer behavior patterns to embrace the online world as a viable entertainment environment. And, we feel it will be important as we move forward in our business processes to embrace all emerging hardware platforms that include not only the ubiquitous PC, but set top boxes and other digital devices including mobile phones.

We also believe that distribution of content via broadband networks whether it is online or a 3G network for mobile phones will fuel a tremendous demand for audio and video content that will be accessed, stored and forwarded (shared!) in ways that we cannot foresee as of this point in time.

The gap between PCs and mobile devices is influenced, amongst others, by the fact that applications and content are often inherited from the world of “traditional” computers and/or conventional media sources. We believe it will be a while before mobile entertainment is turned into a mainstream phenomenon, as it requires a number of improvements of the devices: content visibility (size and resolution of the mobile phones’ and palmtops’ screens); ease of use; new functionalities and new technology accessories (audio/video peripherals); device performance (memory, processing power). All these challenges, which PCs overcame successfully, still require massive, concerted research and innovation efforts by different industry players (manufacturers, content providers, etc.), where price and perceived benefits are crucial to a mass market adoption of mobile entertainment. But, we feel it is important to make sure that this platform is on our radar screen and that we may want to move our content to this platform within the next 12-24 months.

Phase One Launch Strategy

We intent to communicate with our 18-35 year old demographic targeted market utilizing a two tiered marketing program to leverage our “first to market leadership” and to raise barriers to entry for other competitors.

Þ Our two tiered marketing strategy will feature online (first tier) advertising that will include a viral Club XXSTream Game app/contest, text link advertising via key portals including, MSN, Yahoo, Google, AOL and others (both US sites and international), opt-in e-mail, an aggressive affiliate program, search engine optimization and newsletter sponsorships

Þ Our second tier advertising utilizing more traditional media will encompass newspaper ads in the top ten colleges in the US, Europe, South America and Asia, print ads in Rolling Stone, Spin, Men’s Journal, Maxim, Stuff, Cosmopolitan, Vibe, Cosmo Girl, and others, targeted direct mail, aggressive PR and guerrilla marketing techniques in hot clubs in key market segments.

Þ We intend to launch Club XXSTream (Club USA) in March of 2005 utilizing our first and second tier advertising processes, with specific advertising methodologies driven by the amount of seed capital that we raise that coincides with our launch date.

Phase Two Launch Strategy

We intend to launch our Phase Two plan within 3-6 months after we complete Phase One unless a club/facility is presented to us that we can acquire and/or obtain Webcasting rights to with some type of a license that is favorable. Although we are initiating conversations with parties who own and/or control club locations around the world – these conversations may enable us to come to market with our Phase Two operations much faster.

But, it is difficult to predict this timeline as we are only in early stage of conversations with third parties and we cannot be sure that these discussions will enable us to either purchase a standalone club or negotiate some time of a broadcasting license that enables us to integrate or overlay our Club XXSTream business model with an operating club.

Finally, capital requirements may enable us to move more aggressively into Phase Two but our intent is to only move into this Phase if/when we have sufficient financial resources to execute this strategy and/or have sufficient experience deploying our Phase One to ensure that we can apply our web webcasting model to our Phase Two strategy properly.

















Market Indicators and Overview

The Internet has truly emerged as a viable commerce and mass communications medium – enabling hundreds of millions of people to share information, create and participate in online communities that reflect a common interest and conduct global businesses with virtually no barriers to entry. The internet’s furious growth rates have been driven by the availability of powerful multimedia PCs, the emergence of the need for and the availability of audio and video content that can be moved around from PC to other devices and the increasing availability of low cost high speed bandwidth.

Broad Market of 800 Million Potential Users

There are in excess of 800 Million online users who access the internet for business and/or pleasure every day – these numbers are staggering and have been growing at a rate of 15-40% per annum, depending on the geographic reason that is being assessed. And, penetration of the total world population is estimated to be only 20-30% overall; meaning, meteoric growth will continue, which will in turn fuel the need for more compelling content that will be provided by entertainment portals like Club XXSTream.

Internet Emerging as Entertainment Medium

According to a recent NY Times survey published in December of 2004 the average internet user in the US spends three hours a day online, spent working, communicating and entertaining themselves by viewing and accessing interactive content. The survey also found that Internet usage has displaced television watching as well as a range of other activities. Over all, 57% of internet usage was devoted to communications, instant messaging activities, entertainment that includes downloading files, viewing audio and video content and game playing. The survey also indicated that the amount of internet usage did not differ between men and women – but women on average use e-mail, instant messaging and social networking online than most men, while men prefer to spend more time browsing, reading discussion groups and participating in discussion groups and/or chat rooms that reflect their varied interests.

The internet’s inherently always on 24/7/365 capability now provides a viable platform for entertainment that encompasses immersive game playing, video and audio chat capability, membership in tens of thousands of diverse communities that are driven by disparate lifestyles, cultures and likes and dislikes and strong brand identification that is supported by the online consumer’s online community of choice.















TOP 20 COUNTRIES WITH HIGHEST NUMBER OF INTERNET USERS

# Country or Region Internet Users,Latest Data Population (2004 Est.) InternetPenetration Source and Dateof Latest Data % WorldUsers
1 United States 202,452,190 293,271,500 69.0 % Nielsen//NR July/04 25.3 %
2 China 87,000,000 1,288,307,100 6.8 % CNNIC June/04 10.9 %
3 Japan 66,548,060 127,853,600 52.1 % Nielsen//NR July/04 8.3 %
4 Germany 47,182,668 82,633,200 57.1 % Nielsen//NR July/04 5.9 %
5 United Kingdom 34,874,492 59,595,900 58.5 % Nielsen//NR July/04 4.4 %
6 Korea (South) 30,670,000 49,131,700 62.4 % KRNIC June/04 3.8 %
7 Italy 28,610,000 57,987,100 49.3 % C.I.Almanac Dec/03 3.6 %
8 France 23,216,191 60,011,200 38.7 % Nielsen//NR July/04 2.9 %
9 Canada 20,450,000 31,846,900 64.2 % C.I.Almanac Dec/03 2.6 %
10 Brazil 19,311,854 179,383,500 10.8 % Nielsen//NR July/04 2.4 %
11 India 18,481,000 1,088,056,200 1.7 % ITU Dec/03 2.3 %
12 Spain 14,332,763 41,895,600 34.2 % Nielsen//NR July/04 1.8 %
13 Australia 13,359,830 20,275,700 65.9 % Nielsen//NR July/04 1.7 %
14 Taiwan 11,602,523 22,689,300 51.1 % Nielsen//NR July/01 1.5 %
15 Netherlands 10,806,328 16,254,900 66.5 % Nielsen//NR July/04 1.4 %
16 Mexico 10,033,000 102,797,200 9.8 % ITU Dec/02 1.3 %
17 Poland 8,970,000 38,158,100 23.5 % ITU Dec/03 1.1 %
18 Malaysia 8,692,100 25,581,000 34.0 % ITU Dec/03 1.1 %
19 Indonesia 8,000,000 221,777,700 3.6 % ITU Dec/02 1.0 %
20 Sweden 6,722,562 9,010,700 74.6 % Nielsen//NR July/04 0.8 %
TOP 20 Countries 671,315,561 3,816,518,100 17.6 % IWS - Sept./04 83.9 %
Rest of the World 128,724,937 2,573,629,387 5.0 % IWS - Sept./04 16.1 %
Total World - Users 800,040,498 6,390,147,487 12.5 % IWS - Sept./04 100.0 %


Note: This chart is indicative of the tremendous growth that has incurred with internet usage and the size of the worldwide “viewing” audience for an entertainment portal like Club XXSTream.

Market Focus - Broadband Penetration Driving Demand for Multimedia Content

We believe the rapid pace of broadband penetration on a global basis will drive the demand for multimedia content that is constantly being refreshed (updated); this will in turn create significant opportunities for companies that can provide dynamic multimedia content to a global audience that is ever-changing, unique and entertaining.
We are targeting an online market segment comprising 18-25 year olds – this demographic group is coveted by a large group of advertisers who are finding it increasingly more difficult to reach this group via conventional TV, Print and Radio advertising. We will offer our advertisers the ability to deploy a comprehensive “always on” marketing campaigns that encompass our web site, newsletters, video audio insert ads, chat insert ads and special event ads.


U.S. broadband penetration grew by 0.73 percentage points to 53.59% among active Internet users in November. 2004. The charts below, derived from Nielsen//NetRatings data, show trends in connection speeds to the Internet for United States users. Global broadband penetration has now reached sufficient scale to support and drive consumer’s interest in multimedia content that is multi cultural and that can be presented in discrete categories or “online channels.”

International Broadband Driving the Demand for Multimedia Content

The active at-home Internet audience increased approximately 1.5 percent for 11 selected countries in the three months from August to November of 2004, according to data from Nielsen/Net Ratings. Of the 11 nations for which Nielsen had fresh data in November, France led the growth, adding 1,360,355, or 9.56 percent. Four other nations, meanwhile, added close to 1 million users as well: the U.S. added 957,980; Japan grew by 936,606; and Spain by 886,904.
For the U.S. and Japan, that 3-month increase is roughly consistent with recent month-over-month growth figures this year. For France and Spain, however, those 3-month gains follow previous month-over-month decreases, fluctuations that may be attributable to recent changes in Nielsen's methodology for international countries, according to the company. Nielsen did not elaborate on the nature of the changes.

Active Home Internet Users by Country, 2004
Country August2004 November2004 3-monthChange % Change
Australia 8,817,815 8,918,141 100,326 1.14%
Brazil 12,019,552 11,444,102 -575,450 -4.78%
France 14,222,597 15,582,952 1,360,355 9.56%
Germany 29,215,331 29,500,717 285,386 0.98%
Hong Kong 2,673,388 2,539,657 -133,731 -0.50%
Japan 35,646,372 36,582,978 936,606 2.63%
Spain 7,466,380 8,353,284 886,904 11.88%
Sweden 4,694,397 4,627,124 -67,273 -1.43%
Switzerland 3,321,652 3,339,753 18,101 0.54%
UnitedKingdom 21,783,154 22,281,069 497,915 2.29%
UnitedStates 137,038,072 137,996,052 957,980 0.69%
TOTALS 276,898,710 281,165,829 4,267,119 1.5%
Source: Nielsen//NetRatings






Competitive Analysis and Barriers to Entry

We are positioning our company in a high-growth market that is maturing rapidly, capital intensive and becoming increasingly competitive, although fragmented. Additionally, some of our existing competitors such as Yahoo, MSN, AOL, and others have substantial operating histories, access to content for redeployment on the web, have much larger marketing budgets, have established internet brands and greater technical resources than what we may marshal as we execute our business plan.

Complex Revenue Model and Support Requirements

The company is building a multiple tiered revenue stream that inherently gives us a strung upside as we scale our model, but this forces us to develop an advertising infrastructure that integrates with all of our content that we are showing via our web site. Our business model is very complex and it requires substantial development of back end technology to support our anticipated traffic loads via visitors and club members who want to download multimedia files.

Since our primary revenue stream generation will be derived via advertising we must integrate advertising capabilities with our “digital infrastructure content,” including all audio, video streaming content, web sections and pages, newsletters and special promotion announcements. We also must deploy an industry standard Server Application such as Web Trends that let us provide certified traffic measurements to substantiate our advertising rates.

We also intend to generate revenue by reselling audio and video intellectual property that may be provided by our user community, necessitating in our developing a back end tracking infrastructure that can provide digital rights management on an ongoing basis. We also intend to build a private club within our Club XXSTream and we must develop the right content packages for this and related tracking mechanisms for revenue stream generation.

Additionally, we must bring to market 6-8 International Club XXSTream’s that have content in a foreign language which adds an additional layer of complexity to our advertising, content development and tracking mechanisms. These international sites will also necessitate our hiring a staff that is either based in the region where we are marketing a localized Club XXSTream or we must employ a staff in the US that is culturally literate and bilingual. We must also target advertisers in the country’s where we market our international sites and this may require our staffing and manning a sales and/or operations center in multiple foreign locations.

Our back end infrastructure must also support heavy volumes (tens of thousands simultaneous users) of traffic that demand access to our video and audio content. We must have a dedicated server from day one that has fault tolerant redundancy built in and that can handle hundreds of thousands of unique visitors per day and “serve” multiple iterations of audio and video content. We must also provide the ability for club members to set up their own e-mail accounts and upload streaming audio and video files and still pictures into a specific content area that suits their individual tastes.

We must provide the ability for our Advertisers to track their ad campaigns across our network of sites and with precise information on impressions, clicks, actions and campaigns by web site in tabular and graphical format.



Enabling Technology and Infrastructure

Our initial Phase One business model necessitates development of a robust back infrastructure that is scaleable, very secure and sophisticated enough to support the multiple forms of streaming audio and video content that we will need to support. It is critical for us to have a back end server infrastructure that is fault tolerant, runs on Linux/Unix for security purposes and is a professional grade hardware platform in every sense.

Our intent is to have the ability to handle a minimum of 10K simultaneous video streams simultaneously and a much larger number of audio streams as well and we will also need to support Macromedia’s Flash Communications Server for other forms of content that we will need to present and “serve” to our online community.

We will also have a fully equipped video production facility that will be staffed to provide from initial concept to staging, production, editing and broadcast for our club members to coincide with our Phase Two launch. Our full-range of professional post-production video services will also includes non-linear edit facilities, 3D animation, special effects and image manipulation.

Back End Infrastructure Capabilities will Include

Þ High Speed Server with industrial strength Firewall, fault tolerant redundancy capabilities based on Unix/Linux platform/OS.

Þ Ecommerce Capability

Þ Automated e-mail account creation for [e-mail] e-mail addresses for all community members.

Þ 250 Megabytes of Video/Audio Content Storage for all Club Members; augmented with the ability to easily share video/audio content for others.

Þ Video Streaming, Hosting and Sharing Capability for a minimum of 5-10K users during our Phase One period, with the recognition that we may need to upgrade this capability within 1-2 quarters after we launch.

Þ Upload Capability for Audio and Video content that can be downloaded and purchased online

Þ Marcomedia Flash Communications Server Product installed.

Þ Digi-Chat’s “one to many” Audio and Video Chat Application

Þ Advertiser Campaign Management Module

Þ No software installation required to access our online web site and/or multimedia content – all services are based upon industry standard applications and technology.
Þ Installation of IP Identification location software so we can prevent geographic location targeted advertising.



Advertiser Statistical Reporting for all Ad Campaigns

We must provide very sophisticated and industry standard detailed 24/7 reporting capability for our advertisers in order support our revenue goals including these following components:

Þ Hourly online reports disclose impressions, clicks, and actions by campaign, creative, and website in tabular and graphical format.

Þ The ability to understand which ads are pulling and why, and use the reported data to fine-tune campaign optimization settings.

Þ Easy-to-use interactive tools provide on-the-fly changes to maximize advertising performance.

Þ Campaigns placed on the Club XXSTream Ad Network can be completely managed online.

Overview of Graphical User Interface for Advertising Reporting




Overview of Reporting Detail by Creative (Banner or Text Ads)

This 24/7 detail must be provided to all advertisers and will include the ability for them to add and/or integrate an ad with our Ad Network.





Club XXSTream Web Site Platform

The Club XXSTream web site(s) will be an ecommerce-enabled, multimedia rich (streaming audio and video) platform that is designed to server group enabled web based applications over the public Internet. And, it will have discrete content channels that will be focused on specific types of online content (audio and video files) that can be uploaded and taken “live” after review by a content manager. The web site will be modular in design, enabling any Club Member to easily modify their profiles and interact with other club members using our audio/video enabled Digi Chat platform.

Our web site development team is incorporating a mixture of technology that is based on industry standard applications that encompass Open Source (Linux) wherever feasible, Microsoft’s Multimedia standards, IE 6.0 Browser support, Macromedia’s Flash application, a MySQL Database back and other international standards when and where needed and applicable, as driven by our expanding business model.

We are developing specific “Themed Channel Clubs” within our Club XXSTream brand that will include: Latin and World, Hip Hop, Disco, Rock and Roll, Radio Caroline Pirate Radio (underground), Roots, Reggae, R&B and Jazz. Each channel club is hosted and managed by an online MJ who is compensated partially by membership growth for their respective channels.

Club XXSTream Web Site Feature Set

Þ An Open Source MySQL Database Driven Web Site with integrated Content Management System.

Þ Three levels of log on capability, for Standard Members, Premium Members and a Special Event log in.

Þ One to many chat capability that supports standard text, audio and video chat capabilities – enabling all members to chat with others after they are logged in to our site.

Þ “Auditorium style” chat (text, audio, video) moderated chat for online broadcasting events that feature profile artists or sponsored events.

Þ Upload capability for audio and video content, with online voting for dynamic on the fly ranking that is time or event driven.

Þ Event driven content that is updated continually – encompassing audio and video of the day, week month (driven by online voting) for themed content channels.

Þ The ability for individual members to select a clubXXSTream.com e-mail address and community ID that can feature user selected dynamics (published or not published) – password protected.

Þ “Hot or Not” voting on all multimedia content that is uploaded for specific Themed Channel Clubs.

Þ Newsletter signs that are categorized via Themed Channel Clubs or for a generic Club XXSTream newsletter.

Þ Sign ups for special online Webcasting Events per channel and for general interest for all Club Members.


Revenue and Business Development

Our web site/entertainment portal will be highly automated, with IP identification and E-Commerce capabilities and it is being designed from the ground up to scale up very quickly based on anticipated traffic volumes. We are developing our initial 1.0 launch of our Club XXSTream web site/entertainment portal and will do a “soft launch” some time late in Q-1 or early in Q-2 2005 that will feature the majority of the capabilities that we have mapped out in our business plan. The feature set and/or capabilities for our web site will also be driven by our ability to raise capital and/or other business factors.

Diversified Revenue Models

As stated earlier in this plan, the company has multiple revenue streams based upon our entertainment portal concept that are driven by our aggressive entertainment model.

Diversified Revenue Models Include:

§ Subscription Fees derived from Annual Club Memberships, Webcast Event Subscriptions, Celebrity Program Events

§ Advertising Fees generated via Banner Ads, Event and Newsletter Sponsorships, Special Promotion Events

§ Ecommerce Sales for Audio and Video Content

§ Rich Media Ad Inserts for all audio and video content

§ Sales of branded Accessory Items including Key chains, T-shirts, Sweatshirts and Novelty Items

Online Advertising Growing Quickly

The company has a significant challenge to develop content and then market our web site aggressively in order to drive significant qualified traffic that in turn generates advertising revenue. But, one of the significant strengths of our online revenue generation model is our ability to leverage the high growth online advertising market – this market is projected to be $11B by the close of calendar 2005. And, our demographics, 18-35 years olds represent the “sweet spot” for advertisers – many advertisers are having difficulty reaching this market segment as they are turning off their TVs and moving to the Internet for news, information and entertainment as an alternative.
After the precipitous 15.8% drop in 2002 online advertising, the path back has been like Lance’s Armstrong’s win in last year’s Tour de France – climbing rapidly with no bumps in the road! The online advertising market is growing at a 20% plus growth per year and is expected to surpass 11B in revenue by the end of calendar 2005. And, these growth trends are expected to continue for the next 3-5 years based on recent trends; i.e. more and more multimedia rich content available online, consumers embracing online groups as an extension of their offline world and the continued emergence for the internet as a viable advertising alternative to radio, TV and other forms of traditional media.


Continued Meteoric Growth for Online Advertising








Highly Targeted Advertising

We believe one of the significant strengths of our diversified revenue models will not only be our ability to offer advertising packages to our advertisers that are highly targeted by demographics - but our ability to offer 1-1 targeted marketing for our advertisers that is tied to geographic locations of our members. This will be based on our using IP identification technology that will be integrated with our back end server. We will also offer country and language-specific advertising packages to our advertisers that will be integrated with our international Club XXSTream online club launches.

Multiple Subscription Fee Structure

Our focus is on developing branded content that appeals to our online audience and we intend to make part of this content freely available for download and/or online listening and viewing. But, we also intend to offer Premium Subscription Content that will be available for purchase (audio and video) and special “event viewing content” that will be sold on a per event basis “live” basis and that is archived for sale and viewing at a later date.


We will also three Tiers of Club XXSTream Membership that will have these dynamics:

Basic Club Membership Level (free) will require only registration that entitles basic services such as creating e-mail address, ability to store up to 250 megabytes of multimedia content, uploading multimedia content, viewing online content, participating in standard events, chatting with others using our text chat capabilities,

X-Online Club™ Membership Level ($39.99 per annum) will have all of the benefits of our Basic Club Membership Level but will also include our Member to download for free $99. per year of multimedia content, discount of 40% off of all Special Events (Webcasts, Celebrity interviews, etc.) and a discount off of all Club XXSTream merchandise of 25%

XX-Online Club Membership Level $99.99 per annum) will have all benefits of Basic and X-Online Club Membership levels but will also include storage for 500 megabytes of multimedia content, the ability to view one Special Event per quarter at no charge and the opportunity to attend live events that may be hosted in our broadcast facility or in other locations, discount of 50% off of all Club XXSTream merchandise.

Business Development and Sales Model

Our intent is to develop and foster long term relationships with advertisers with advertising services that are price leveraged for those advertisers who sign up for cross-promotional packages that we will define moving forward and/or for making long term (2-4 quarters) commitments to us. We also think it will be critical to establish long-term strategic alliances with such online portals as MSN, Google, AOL, Yahoo, FastClick, 24by7 Ad Network, Terra Lycos and other partners who can help us generate significant low cost traffic online which will in turn enable us to sell online advertising via our entertainment portal.

We may also at some point offer a “mini Club XXSTream” branded application that may feature some of our best online content that can be integrated in with another web site at no charge and pay the licensing vendor for traffic that clickthroughs back from their site to our web site(s).

We intend to utilize an inside sales team to handle all of our advertising sales during our first year in business in order to minimize our cost of sales. We will also work with advertising agencies and offer them an industry standard discount for selling our advertising. Our inside sales team will be based in North America and will be managed by a VP of Sales/Marketing who has significant experience building an inside sales team that is reselling online advertising. When we launch international version of our portal we will then hire sales teams that are multi-cultural and/or based in regional offices in Europe, Asia and/or South America.

Marketing Strategy

Our core value is defined and determined by our successful execution of our marketing strategy and as such, we intend to develop a best of breed web site, cutting edge corporate collateral that is digital in all things so it will help to define our brand and speak to our online community. In some senses the success or failure of our company will be determined by how we brand or position our company and then communicate this to the online market.

We are in the process of developing a Club XXSTream logo and tagline and will integrate this with all facets of our online imagery and offline marketing collateral. We intend to utilize the services of a small interactive advertising agency through the initial launch of our 1.0 launch of our web site but will switch to a larger top tier ad agency such as Deutsch Advertising/Interpublic, Saatchi and Saatchi, JWT and/or others TBD. Selection of this agency will be made by key startup members of our executive management team – their focus will be on selecting an ad agency that has significant experience working with online companies and significant contacts with other firms who could potentially become advertiser/sponsors of Club XXSTream.

Marketing Process
We intend to raise sufficient capital in order for the company to invest significant resources in traditional and online marketing in order to drive significant impact and/or awareness of our entertainment portal with our market demographics. Although we believe it is critical to aggressively drive broad brand and market awareness we want to leverage our advertising expenditures as much as possible and will again seek to set up long term advertising contract that enable us to minimize our costs and maximize our market impact.

Market Launch of Club XXSTream Company and Site
Our marketing launch goals are threefold; create broad brand awareness for our company and web site, drive qualified traffic to our web site and generate potential advertising sponsorships within the broad advertising community. Creating and launching a best of breed web site is ground zero for our online and offline marketing activities – all marketing activities are intended to drive traffic to our web site.



Market Launch Activities:

Broad based Public Relations activities that are coupled with a “road show” with editors with top tier publications such as USA Today, Time, Newsweek, Rolling Stone, Marie Claire, Stuff, Men’s Journal, People and others. The road show will take about two weeks and our intent is to ensure that our executive management meets with all major editors in the country – we will also utilize Bacon’s online PR service so that we can target top tier editors with a special Fed Exed Club XXSTream giveaway item.

Þ Extensive opt-in e-mail campaign (50-100M per month for 90 days) that will be targeted as much as possible - based on per e-mail usage charges.

Þ Viral marketing via a Club XXSTream branded game application that is contest driven.

Þ Print Media Campaign in targeted publications with ¼ quarter page ads.

Þ Pay per Click advertising via all top tier portals including Google, MSN, Yahoo, Overture, AOL - this will include sponsorship ads that are keyword driven.

Þ Organic Search Engine Ranking that will be focused on online and/or multimedia content targeted keywords.

Þ Online banner advertising campaign via targeted demographic portals for 18-35 year olds.

Þ Print Media advertising via the top 20 college newspaper publications in the United States.

Þ Guerrilla marketing campaign that involves handing out secret prize offerings in selected hot clubs in the top ten media markets in the US that can be opened via our web site, including New York, Boston, Washington D.C., Atlanta, Dallas, Chicago, Phoenix, Denver, Los Angeles, San Francisco, Portland and Seattle.


Usage of Proceeds

The company has raised sufficient capital to develop and launch its first generation web site and company, recruit a start up executive staff and work closely with a qualified team of consultants who can help the company move from a raw startup to a more mature position. We intend to raise $3-5M in a first round of financing over 60-90 days, followed by a mezzanine round of funding of $5-7M within the next 6-12 months.

We recognize the critical importance of establishing broad national and international brand awareness for our company in order to drive membership in our X-Clubs and qualified traffic to the web site to support sales of advertising. We are prepared to spend a minimum of $3-5M on our marketing processes and may use some of these funds to acquire exclusive licensing deals for audio and video content from publishing companies. We are also investing $500-750K in our back end infrastructure to enable our hosting terabytes of multimedia content for our members and for webcasting processes.

Finally, the company will have to make a significant investment in staffing operations as detailed in our financial summary – we anticipate these capital expenditures to be approximately $1-3M in the first 18 months of our operation, with another $2-4M if we launch standalone operations and broadcast centers in Europe, Asia and South America.


Exit Strategy


Exit strategy for the company may be a move from the OTC market to being a NASDAQ listed company or an acquisition by a web portal or entertainment company that wants to leverage our in place brand, market presence and/or our registered membership.



Exhibit B

Club XXSTream Membership Tiers Draft Doc as of 3.7.2005


Pricing: Pro Membership $19.95
Pro Plus Membership $29.95
Director Membership $39.95


Club XXSTream Pro§ Club XXSTream e-Mail address § Club XXSTreaml account with integrated streaming video § 1 minute record time using exclusive recording technology § Windows Media delivery § 3 Gig storage § Upload custom video files § Upload custom audio files § Upload custom graphics § Tracking & viewer notification § Calendar § Spell Check § Spam protection § Virus protection § Club XXSTream personal homepage and community participation § Club EXX IM Communicator § 24/7 Online Account Management § Club XXSTream Pro Plus Membership § Club XXSTream e-Mail address § Club XXSTream account with integrated streaming video § 2 minute record time using exclusive recording technology § Windows Media delivery § 4 Gig storage § Upload custom video files § Upload custom audio files § Upload custom graphics § Tracking & viewer notification § Calendar § Spell Check § Spam protection § Virus protection § Club XXSTream personal homepage and community participation § Club EXX IM Communicator § 24/7 Online Account Management § Club XXSTream Director § Club XXSTream e-Mail address § ClubXXSTream Mail account with integrated streaming video § 3 minute record time using exclusive recording technology § 1200 club XXSTream email views per month § Windows Media delivery § 6 Gig storage § Upload custom video files § Upload custom audio files § Upload custom graphics § Tracking & viewer notification § Calendar § Spell Check § Spam protection § Virus protection§ club XXSTream World personal homepage and community participation § Club XXSTream IM Communicator 24/7 Online Account Management § Club EXX Live account (broadcast LIVE to 3 simultaneous viewers at once)


Note: Director Membership encompasses “live webcasting” to up to three other individuals


Exhibit C

XXStream Entertainment Inc.
www.clubxxstream.com


Gentlemen:
You have informed the undersigned (the “Purchaser”) that XXStream Entertainment Inc. a Nevada corporation, (the “Company”) wishes to raise a minimum of Five Million Dollars ($5,000,000) and a maximum of Ten Million Dollars ($10,000,000) from various persons by selling up to 10,000,000 Common Stock of ownership, $0.001 par value (the “Common Stock”), at a price of Twenty Five Cents ($2.50) per Unit.

I have received, read, and understand the Limited Offering Memorandum dated November 20, 2006 (the “Memorandum”). I further understand that my rights and responsibilities as a Purchaser will be governed by the terms and conditions of this Subscription Agreement, the Memorandum and the Operating Agreement of Mellon Research Inc . I understand that you will rely on the following information to confirm that I am an “Accredited Investor”, as defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or one of 35 Non-Accredited Investors that will be allowed to purchase Common Stock in this Offering (subject to Company approval), and that I am qualified to be a Purchaser.
This Subscription Agreement is one of a number of such subscriptions for Common Stock. By signing this Subscription Agreement, I offer to purchase and subscribe from the Company the number of Common Stock set forth below on the terms specified herein. The Company reserves the right, in its complete discretion, to reject any subscription offer or to reduce the number of Common Stock allotted to me. If this offer is accepted, the Company will execute a copy of this Subscription Agreement and return it to me. I understand that commencing on the date of this Memorandum all funds received by the Company in full payment of subscriptions for Common Stock will be deposited in an Investment Holding Account. The Company has set a minimum offering proceeds figure of $5,000,000 for this Offering. The Company has established an Investment Holding Account with Chuck Weller Investment Holding Account, into which the minimum offering proceeds will be placed. At least 5,000,000 Common Stock must be sold for $5,000,000 before such proceeds will be released from the holding account and utilized by the Company. After the minimum number of Common Stock are sold, all proceeds from the sale of Common Stock will be delivered directly to the Company and be available for its use.
1. Accredited Investor. I am an Accredited Investor because I qualify within one of the following categories:
Please Check The Appropriate Category

_____ $1,000,000 Net Worth.
A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000.
______________
Purchaser’s Initials


_____ $200,000/$300,000 Income.
A natural person who had an individual income in excess of $200,000 (including contributions to qualified employee benefit plans) or joint income with such person’s spouse in excess of $300,000 per year in each of the two most recent years and who reasonably expects to attain the same individual or joint levels of income (including such contributions) in the current year.

_____ Director or Officer of Issuer.
Any director or executive officer of the Company

_____ All Equity Owners In Entity Are Accredited.
An entity, (i.e. corporation, partnership, trust, IRA, etc.) in which all of the equity owners are Accredited Investors as defined herein.

_____ Corporation.
A corporation not formed for the specific purpose of acquiring the Shares offered, with total assets in excess of $5,000,000.

_____ Other Accredited Investor.
Any natural person or entity which qualifies as an Accredited Investor pursuant to Rule 501(a) of Regulation D promulgated under the Act; specify basis for qualification:

________________________________________________________________________

_________________________________________________________________________

______One of 35 Non-Accredited Investors that may be allowed to invest in the offering

2. Representations and Warranties. I represent and warrant to the Company that:

(A) I (i) have adequate means of providing for my current needs and possible contingencies and I have no need for liquidity of my investment in the Common Stock, (ii) can bear the economic risk of losing the entire amount of my investment in Common Stock, and (iii) have such knowledge and experience that I am capable of evaluating the relative risks and merits of this investment; (iv) the purchase of Common Stock is consistent, in both nature and amount, with my overall investment program and financial condition.
(B) The address set forth below is my true and correct residence, and I have no intention of becoming a resident of any other state or jurisdiction.
(C) I have not utilized the services of a “Purchaser Representative” (as defined in Regulation D promulgated under the Securities Act) because I am a sophisticated, experienced investor, capable of determining and understanding the risks and merits of this investment.
______________
Purchaser’s Initials
(D) I have received and read, and am familiar with the Offering Documents, including the Memorandum, Subscription Agreement, and Operating Agreement of the Company. All documents, records and books pertaining to the Company and the Common Stock requested by me, including all pertinent records of the Company, financial and otherwise, have been made available or delivered to me.

(E) I have had the opportunity to ask questions of and receive answers from the Company’s officers and representatives concerning the Company’s affairs generally and the terms and conditions of my proposed investment in the Common Stock.

(F) I understand the risks implicit in the business of the Company. Among other things, I understand that there can be no assurance that the Company will be successful in obtaining the funds necessary for its success. If only a fraction of the maximum amount of the Offering is raised, the Company may not be able to expand as rapidly as anticipated, and proceeds from this Offering may not be sufficient for the Company’s long term needs.

(G) Other than as set forth in the Memorandum, no person or entity has made any representation or warranty whatsoever with respect to any matter or thing concerning the Company and this Offering, and I am purchasing the Common Stock based solely upon my own investigation and evaluation.

(H) I understand that no Common Stock have been registered under the Securities Act, nor have they been registered pursuant to the provisions of the securities or other laws of applicable jurisdictions.

(I) The Common Stock for which I subscribe are being acquired solely for my own account, for investment and are not being purchased with a view to or for their resale or distribution. In order to induce the Company to sell Common Stock to me, the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Common Stock by anyone but me.

(J) I am aware of the following:
(i)The Common Stock are a speculative investment which involves a high degree of risk; and

(ii) My investment in the Common Stock is not readily transferable; it may not be possible for me to liquidate my investment.

(iii) The financial statements of the Company have merely been compiled, and have not been reviewed or audited.

(iv)There are substantial restrictions on the transferability of the Common Stock registered under the Securities Act; and



______________
Purchaser’s Initials
(v) No federal or state agency has made any finding or determination as to the fairness of the Common Stock for public investment nor any recommendation or endorsement of the Common Stock;

(K) Except as set forth in the Memorandum, none of the following information has ever been represented, guaranteed, or warranted to me expressly or by implication, by any broker, the Company, or agents or employees of the foregoing, or by any other person:

(i) The appropriate or exact length of time that I will be required to hold the Common Stock;

(ii) The percentage of profit and/or amount or type of consideration, profit, or loss to be realized, if any, as a result of an investment in the Common Stock; or

(iii) That the past performance or experience of the Company, or associates, agents, affiliates, or employees of the Company or any other person, will in any way indicate or predict economic results in connection with the purchase of Common Stock;

(iv)The amount of dividends or distributions that the Company will make;

(L) I have not distributed the Memorandum to anyone, no other person has used the Memorandum, and I have made no copies of the Memorandum; and

(M) I hereby agree to indemnify and hold harmless the Company, its managers, directors, and representatives from and against any and all liability, damage, cost or expense, including reasonable attorneys fees, incurred on account of or arising out of:

(i) Any inaccuracy in the declarations, representations, and warranties set forth above;

(ii) The disposition of any of the Common Stock by me which is contrary to the foregoing declarations, representations, and warranties; and

(iii) Any action, suit or proceeding based upon (1) the claim that said declarations, representations, or warranties were inaccurate or misleading or otherwise cause for obtaining damages or redress from the Company; or (2) the disposition of any of the Common Stock.
(N) By entering into this Subscription Agreement, I acknowledge that the Company is relying on the truth and accuracy of my representations.
The foregoing representation and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of the delivery of the funds to the Company and shall survive such delivery. If, in any respect, such representations and warranties are not true and accurate prior to delivery of the funds, I will give written notice of the fact to the Company, specifying which representations and warranties are not true and accurate and the reasons therefor.
______________
Purchaser’s Initials
3. Transferability. I understand that I may sell or otherwise transfer my Common Stock only if registered under the Securities Act or I provide the Company with an opinion of counsel acceptable to the Company to the effect that such sale or other transfer may be made in absence of registration under the Securities Act. I have no right to cause the Company to register the Common Stock. Any certificates or other documents representing my Common Stock will contain a restrictive legend reflecting this restriction, and stop transfer instructions will apply to my Common Stock.

4. Indemnification. I understand the meaning and legal consequences of the representations and warranties contained in Paragraph 2 hereof, and I will indemnify and hold harmless the Company, its officers, directors, and representatives involved in the offer or sale of the Common Stock to me, as well as each of the managers and representatives, employees and agents and other controlling persons of each of them, from and against any and all loss, damage or liability due to or arising out of a breach of any representation or warranty of mine contained in this Subscription Agreement.

5. Revocation. I will not cancel, terminate or revoke this Subscription Agreement or any agreement made by me hereunder and this Subscription Agreement shall survive my death or disability.

6. Termination of Agreement. If this subscription is rejected by the Company, then this Subscription Agreement shall be null and void and of no further force and effect, no party shall have any rights against any other party hereunder, and the Company shall promptly return to me the funds delivered with this Subscription Agreement.

7. Miscellaneous.

(a) This Subscription Agreement shall be governed by and construed in accordance with the substantive law of the State of Nevada.
(b) This Subscription Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only in writing and executed by all parties.
(c) By Purchasing the Common Stock in XXStream Entertainment Inc., I hereby agree to the terms and provisions of the Operating Agreement of the – as included in this Memorandum as Exhibit B. I have hereby read and understand the Operating Agreement and understand how an functions as a corporate entity.
8. Ownership Information. Please print here the total number of Common Stock to be purchased, and the exact name(s) in which the Common Stock will be registered.
Total Common Stock:_________________
Name(s):_____________________________________________________________
_____ Single Person
_____ Husband and Wife, as community property
_____ Joint Tenants (with right of survivorship)
_____ Tenants in Common
_____ A Married Person as separate property
_____ Corporation or other organization
______________
Purchaser’s Initials

_____ A Partnership
_____ Trust
_____ IRA
_____ Tax-Qualified Retirement Plan
(i) Trustee(s)/ Custodian_________________________________________
(ii) Trust Date_________________________________________________
(iii) Name of Trust_____________________________________________
(iv) For the Benefit of___________________________________________

_____ Other:________________________________________________________
(please explain)

Social Security or Tax I.D.#:____________________________________________

Residence Address:
_____________________________________________________________________
Street Address
_____________________________________________________________________
City State Zip

Mailing Address: (Complete only if different from residence)
_____________________________________________________________________
Street Address (If P.O.Box, include address for surface delivery if different than
residence)
_____________________________________________________________________
City State Zip

Phone Numbers
Home: (_______)_____________________
Business: (_______)___________________
Facsimile: (_______)___________________



______________
Purchaser’s Initials

9. Date and Signatures. Dated ______________________________, 200_.


Signatures Purchaser Name (Print)


____________________________ ____________________________


___________________________ ____________________________
(Each co-owner or joint owner must sign - Names must be signed exactly as listed under “Purchaser Name”)



ACCEPTED:
XXStream Entertainment Inc.,



By:________________________________ Dated:______________________, 200_

M.A. Pino
President






______________
Purchaser’s Initials



Exhibit D

XXStream Entertainment Inc.
www.clubxxstream.com


Investor Suitability Questionnaire


To: Prospective purchasers of Common Stock offered by XXStream Entertainment Inc., “Company”).

The Purpose of this Questionnaire is to solicit certain information regarding your financial status to determine whether you are an “Accredited Investor,” as defined under applicable federal and state securities laws, and otherwise meet the suitability criteria established by the Company for purchasing Common Stock. This questionnaire is not an offer to sell securities.

Your answers will be kept as confidential as possible. You agree, however, that this Questionnaire may be shown to such persons as the Company deems appropriate to determine your eligibility as an Accredited Investor or to ascertain your general suitability for investing in the Common Stock.

Please answer all questions completely and execute the signature page

A. Personal

1. Name:___________________________________________________

2. Address of Principal Residence:_________________________________

___________________________________________ County:__________

3. Residence Telephone: (______)_____________________

4. Where are you registered to vote?________________________________

5. Your driver’s license is issued by the following state:_________________

6. Other Residences or Contacts: Please identify any other state where you own a residence, are registered to vote, pay income taxes, hold a driver’s license or have any other contacts, and describe your connection with such state:

___________________________________________________________

___________________________________________________________

7. Please send all correspondence to:

(1)_____ Residence Address (as set forth in item A-2)

(2)_____ Business Address (as set forth in item B-1)

8. Date of Birth:_________________________________________________

9. Citizenship:___________________________________________________

10. Social Security or Tax I.D. #:_____________________________________


B. Occupations and Income

1. Occupation:____________________________________________

(a) Business Address:_________________________________

__________________________________________________

(b) Business Telephone Number: (______)_________________

2. Gross income during each of the last two years exceeded:

(1)_____$25,000 (2)_____$50,000

(3)_____$100,000 (4)_____$200,000

3. Joint gross income with spouse during each of the last two years exceeded $300,000

(1)_____Yes (2)_____No

4. Estimated gross income during current year exceeds:

(1)_____$25,000 (2)_____$50,000

(3)_____$100,000 (4)_____$200,000

5. Estimated joint gross income with spouse during current year exceeds $300,000

(1)_____Yes (2)_____No

C. Net Worth

1. Current net worth or joint net worth with spouse (note that “net worth” includes all of the assets owned by you and your spouse in excess of total liabilities, including the fair market value, less any mortgage, of your principal residence.)

(1)_____$50,000-$100,000 (2)_____$100,000-$250,000 (3)_____$250,000-$500,000

(4)_____$500,000-$750,000 (5)_____$750,000-$1,000,000 (6)_____over $1,000,000


2. Current value of liquid assets (cash, freely marketable securities, cash surrender value of life insurance policies, and other items easily convertible into cash) is sufficient to provide for current needs and possible personal contingencies:

(1)_____Yes (2)_____No


D. Affiliation with the Company

Are you a director or executive officer of the Company?

(1)_____Yes (2)_____No

E. Investment Percentage of Net Worth

If you expect to invest at least $150,000 in Common Stock, does your total purchase price exceed 10% of your net worth at the time of sale, or joint net worth with your spouse.

(1)_____Yes (2)_____No


F. Consistent Investment Strategy

Is this investment consistent with your overall investment strategy?

(1)_____Yes (2)_____No

G. Prospective Investor’s Representations

The information contained in this Questionnaire is true and complete, and the undersigned understands that the Company and its counsel will rely on such information for the purpose of complying with all applicable securities laws as discussed above. The undersigned agrees to notify the Company promptly of any change in the foregoing information which may occur prior to any purchase by the undersigned of securities from the Company.

Prospective Investor:


__________________________________ Date:________________, 200_
Signature


__________________________________
Signature (of joint purchase if purchase is to be
made as joint tenants or as tenants in common)