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Graffiti Entertainment Inc. Announces Letter of Intent to Acquire Equity Stake in Feature Film Partners VII, LLC With American United Entertainment

REDWOOD CITY, CA--(Marketwire - 02/01/11) - Graffiti Entertainment Inc. today announced that the Company has signed a Letter of Intent to acquire a 49% equity stake in Feature Film Partners VII, LLC. dba AUE Feature Film & Media Fund -- a new film financing vehicle created by Robert Rodriguez, CEO of American United Entertainment, LLC., Kevin Hicks (American United Entertainment), Bill Mechanic (Pandemonium, LLC.) and Arnold Rifkin (Cheyenne Enterprises).The letter of intent provides that Graffiti Entertainment will afford AUE Feature Film & Media Fund up to $100,000,000 in film financing in exchange for a 49% stake in the Fund and a minimum of two (2) positions of the five (5) manager positions of the LLC. In addition to its equity stake in AUE Feature Film & Media Fund, Graffiti Entertainment will receive for its own account all rights associated with any soundtrack, events or video game property related to the films financed by the Fund. The letter of intent outlines additional due diligence, audit work and other terms conditional to reaching a definitive agreement.The transaction underscores Graffiti's business strategy to partner with seasoned industry veterans for the production of feature length films, then leveraging the film's intellectual property to generate multiple revenue streams from sound tracks, events, video games and social network games. This strategy also reduces overall risk by increasing the number of possible revenue streams extracted from a single property. In addition, the film and each of the other platforms will benefit from cross marketing and promotion.Graffiti Entertainment's Managing Director R.J. Bucaria said, "The relationship with AUE Feature Film & Media Fund is a perfect fit for Graffiti. The talents behind the films and Media projects are proven industry veterans and the intellectual property is top notch. We are looking forward to a long and fruitful relationship."Robert Rodriguez, Managing Director of AUE Feature Film and Media Fund and CEO of American United Entertainment, stated, "We are excited to have a real collaborative future partnership, and with their commitment, look forward to expanding our ambitions and goals together."About Graffiti Entertainment, Inc.:Headquartered in Redwood City, California Graffiti Entertainment, Inc. is a diverse media company. The company publishes video games for advanced entertainment consoles, finances film properties, publishes music and is an international event production and talent management company.About Feature Film Partners VII, LLC:
dba AUE Feature Film & Media Fund
With a combined track record of more than US$12 billion in film revenues, , industry veterans Robert Rodriguez, Kevin Hicks, Bill Mechanic and Arnold Rifkin created Feature Film Partners VII, LLC. dba AUE Feature Film & Media Fund to finance the production of a current slate of films under contract as well as for future film productions.Forward-Looking Statements:The information in this press release includes certain "forward-looking" statements within the meaning of the Safe Harbor provisions of Federal Securities Laws. Investors are cautioned that such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this release, and the Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release except as required by law.