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EXHIBIT 10.7
April 2, 1997
Xx. Xxxxxxx Xxxxxxxx
President, Allied Communication Group
Interpublic G.O.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
RE: INTERPUBLIC GROUP OF COMPANIES/ TEAM ENTERTAINMENT
GROUP "COOPERATIVE VENTURE" PROPOSAL
Dear Xx. Xxxxxxxx:
The following sets forth the terms of the agreement between Interpublic
Group of Companies ("IPG") and TEAM Entertainment Group ("TEAM") with respect to
the production of a minimum of four (4) pilots over the next one (1) year
period:
1. All non-fiction and light entertainment programming (including
specials) developed at TEAM will be subject to this agreement.
2. TEAM will grant IPG a "first-look" right to all new projects.
3. TEAM and IPG will each commit to fund at least two (2) of the pilots
during the course of the first year of theagreement. TEAM agrees to
fund the initial two (2) pilots, and IPG will fund the latter two (2)
pilots within sixty (60) days of TEAM's funding of the second pilot.
IPG's obligation to fund will only be contingent on disapproval of
subject matter, limited to such matter being unreasonably offensive or
inappropriate. In the event that IPG elects not to fund the requisite
number of pilots within the term, the rights to the initial two (2)
pilots will revert to TEAM.
4. Each one-half (1/2) hour pilot will have a budget not to exceed Fifty
Thousand Dollars ($50,000), each one (1) hour pilot will have a budget
not to exceed Ninety Thousand Dollars ($90,000) which the parties will
respectively contribute towards development and production of each
pilot. TEAM will guarantee the budgets for the projects.
5. TEAM will deficit finance any pilot costs in excess of the
above-specified limits, up to a cap of Seventy-Five Thousand Dollars
($75,000) per one-half (1/2) hour and One Hundred Twenty-Five Thousand
Dollars ($125,000) per one (1) hour.
6. Each project pilot funded by TEAM and IPG will be owned jointly by IPG
and TEAM, with net profits to be divided equally between TEAM and IPG
in perpetuity, reducible for advertiser participation, down to a floor
of thirty-three and one-third percent (33-1/3%) each. Copyright will be
held jointly.
7. Subject to series sales to bona fide domestic and international
licensees, TEAM and IPG will be equally responsible for funding
production dollars for the budgets of such series. If TEAM funds any
overages or deficit, TEAM will recoup such funding in first priority.
8. Net profits will be defined as gross revenue less actual costs of the
agreed-upon budget of each series, and less TEAM's mutually approved
production and distribution fees.
9. Once a finished pilot is delivered to IPG, IPG will agree to use its
best efforts to secure an advertising sponsor and broadcast commitment,
and assist in merchandising and other exploitation of each project.
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Xx. Xxxxxxx Xxxxxxxx
April 2, 1997
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10. TEAM will be responsible for production and creative control.
11. Accounting of net profits in either event will be quarterly during
production of a particular series, and annually thereafter. The
different pilots/series will not be cross-collateralized.
12. Subject to mutual agreement, this agreement will renew each year, for
an additional minimum of four (4) pilots.
13. TEAM will distribute each project worldwide (including the U.S., after
the conclusion of the initial domestic end-user license), for a
distribution fee of forty percent (40%) including all costs, except
foreign language tracks.
14. Separate and apart from this agreement, TEAM and IPG will further
cooperate on the development, promotion, placement and production of a
two (2) hour "block" of programming for the Animal Planet cable
service.
All other usual and customary terms and conditions for an agreement of
this nature will thereafter be included in a long-form version, incorporating
the above terms and conditions.
As Xx. Xxxxx has not yet seen this draft, we must reserve his right to
make additional comments.
Please review the above and if it is acceptable, we will thereafter
prepare a version of this letter for counter-signature.
Thank you very much.
Sincerely,
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Business Affairs
ESE:se
AGREED TO AND ACCEPTED:
Allied Communication Group
Interpublic Group of Companies
By: /s/ Xxxxxxx Xxxxxxxx
_____________________________
Xxxxxxx Xxxxxxxx
Its:
