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EXHIBIT 10.1
As of January 9, 1998
Messrs. Xxx Xxxxxxx and Xxxxx Xxxxxxx
MediaWorks International
0000 Xxxxxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Dear Xxx and Xxxxx,
Further to our discussions regarding finalizing the terms of the joint
venture between The Producers Entertainment Group Ltd. ("TPEG") and MediaWorks
International ("MWI"), this letter will set out the agreed upon terms and
conditions. Please sign below indicating your concurrence with this structure:
1) The joint venture has been established effective November 16,
1997 to assist MWI with its growth and financing requirements;
2) MWI will be primarily responsible for securing the programming.
TPEG will endeavor to bring some programming to the joint
venture. Projects to be included will be identified by the
parties and agreed upon regularly. See attached initial program
list:
3) MWI will handle all international distribution. TPEG will handle
any domestic distribution for projects which have a domestic
rights option associated with them;
4) TPEG provides standby financing for TPEG approved co-production
projects and acquisitions to a cumulative maximum of US$1 million
in the first year. TPEG also arranges, or assist in arranging,
co-production financing when required for such programming;
5) Any monies advanced by MWI or TPEG will be recoupable, in first
position, out of first revenues. In the case of co-productions,
it will be an item of the budget;
6) TPEG will be responsible for arranging bank lines of credit, as
required, to finance approved contracts generated by the joint
venture;
7) On all approved projects, TPEG receives the first 15% of the net
revenues from the joint venture. In consideration of its standby
commitment. TPEG then receives an additional 50% of the net
revenues. MWI receives the balance of the net revenues, with net
revenue being defined as MWI's commission on the project less
direct third party costs associated therewith;
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8) MWI agrees to maintain the records for the joint venture and
provide financial statements to TPEG on a quarterly basis, with
the first financial statement to be for the initial ended March
31, 1998. TPEG shall have access to all records related to the
joint venture for review by its accounting personnel on five
business days notice;
9) MWI will be responsible for all invoicing and collection
associated with the joint venture;
10) The parties agree that any projects within the joint venture may
be pledged for financing purposes upon the reasonable agreement
of both parties;
11) The parties agree that the first payment related to this joint
venture shall be made within 60 days after June 30, 1998;
12) This joint venture agreement may be terminated by either party on
three months notice;
13) In the event that the discussion between TPEG and MWI should
result in an acquisition agreement on the part of TPEG, the joint
venture would be terminated on the date of closing of the
purchase;
14) The parties agree that they both have the corporate power to
enter into this joint venture agreement.
Yours truly,
THE PRODUCERS ENTERTAINMENT GROUP LTD.
/s/Xxxxx Xxxxx
Xxxxx Xxxxx
CEO
I/we understand with the terms and conditions set out above.
Dated this 18th day of February, 1998.
/s/ Xxxxx Xxxxxxx
/s/ Xxx Xxxxxxx
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MWI Distribution, Inc.
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