JOINT VENTURE AGREEMENT
April 6, 2004
International Sports and Media Group (ISME), a Nevada Corporation
and
Xxxxxx/Xxxxx Media Group (MCMG) a Nevada Corporation.
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1. INTRODUCTION
This Joint Venture agreement is made and effective on the 6th day of April 2004
between International Sports and Media Group ("ISME") a Nevada chartered company
and publicly traded on the OTC:BB under ticker symbol ISME and is in the
business of sports marketing and media related operations worldwide, and
Xxxxxx/Xxxxx Media Group (MCMG), a privately held limited liability company,
which focuses on all facets of media broadcasting related to HDTV with
headquarters in both Las Vegas, Nevada and San Diego, California
The purpose of this Joint Venture Agreement is to set forth the terms and
conditions under which both companies (MCMG/ISME) intend to combine their
services and efforts to charter and operate a new limited liability company to
be called "5ive Media Entertainment ", a premier entertainment company with the
focus on High Definition Media Entertainment including but not limited to
Television, Film, Internet, Print and Photography. The terms and conditions
contained herein shall serve as the basis for an operating and membership
agreement for the new limited liability company.
2. TERMS/ CONDITIONS
The following describes both the services and stipulations as it pertains to the
joint-venture under the name 5ive Media Entertainment, LLC between ISME and
MCMG. These terms shall be binding upon the two parties who shall also be the
two, initial members of the limited liability company, and the tasks assigned
and undertaken in this Agreement shall be subject to a "best efforts" attempt to
accomplish same with intent to make the venture successful.
(a) ISME shall undertake to seek out and secure investment capital for 5ive Media Entertainment , LLC. This will primarily include contact of the ISME shareholders and perspective investors offering this investment opportunity through a Private Placement Memorandum and other methods of attracting capital investors to the organization which shall be exempt from registration with the Securities and Exchange Commission, and which shall conform to the exemption guidelines set forth in the Securities and Exchange Act of 1933.
(b) The target sought to be achieved by ISME for 5ive Media Entertainment, LLC is up to and no more than Three Hundred-Fifty ($350,000) over a sixty-day period from the date of signing date of this agreement (60) by which investment funds into ISME would be split 50/50 between ISME and MC Media Entertainment and place into the joint venture LLC. with the understanding that a overall budget of $2,000,000 needs to be procurred over a 24 month period for the JV. It is yet to be determined what percentage of the difference between $350,000 and 2,000,000 which is 1.65M shall be divided and how it will be raised. This agreement includes providing up to but no more than Three Hundred Fifty Thousand ($350,000) within the first Sixty Days (60) of executing this joint-venture partnership. All efforts to raise these monies shall be on a best efforts basis only, as ISME cannot provide any guaranty or other assurances that all or a portion of the targeted amounts can be achieved. Under this agreement ISME and MC Media will be reimbursed from capital raised for any costs and expenses incurred in setting up and funding the new liability company.
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(c) In order to provide safeguards to properly allocate funds raised by investors, a checking account shall be established whereby any withdrawals will require the signatures of authorized signatures from both members of the limited liability company. All investor monies shall be deposited into this joint signatory account. All withdrawals from this account shall only be made for purposes of funding the operational account(s) of the new corporation.
(d) Xxxxxx/ Xxxxx Media Group agree to provide 5ive Media Entertainment with all the necessary resources for a successful venture included but not limited to current and future content (i.e. The Toy Show. Built, etc) operational expertise, knowledge of industry and monthly financial reporting to ISME which includes income, expenses and accountability for use of funds. The monthly report shall be provided to ISME within 15 days from the end of each calendar month. A financial report including profits and losses shall be provided to ISME within 15 days from the end of each quarter, and an annual financial report shall be furnished to ISME within 30 days after the end of each fiscal year.
(e) Each of the two initial members in the limited liability company shall hold 50% of the membership interests in the company. MCMG shall be designated as the managing member of the company.
(f) ISME will provide MCMG with 500,000 (Xxxxxx X. Xxxxxx, 250,000 and Xxxxx X. Xxxxx, 250,000) shares of Rule 144 restricted common stock in ISME as part of its contribution to the joint venture. In addition to the restrictions upon sale imposed by Rule 144 of the Securities and Exchange Act of 1933, sale of this stock will be further restricted by this agreement and prohibited until such time as the stock has reached a fair market-value of $0.15 per share or higher, as determined by taking the average price of such shares for the three days immediately preceding the intended date of sale. MCMG also will have the right to purchase warrants from ISME under this agreement up to One Million shares at a strike price of $0.04 per share and a additional one million warrants at a strike price of $0.10 These warrants will expire one year to the date of signing of this agreement with the second set of .10 warrants having a 2 year window, and can only be exercised in writing before the one year and two year period expires. All shares issued pursuant to exercise of the warrants shall be subject to Rule 144 restrictions. Each warrant shall carry "piggy-back" rights, meaning that all shares issued pursuant to exercise of the warrants shall be included in any registration with the SEC to facilitate their marketability on the exchange.
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(g) Each of the two members shall be entitled to receive fifty percent (50%) of the net profits of the company after first deducting for all production costs associated to make the finished product; expenses including but not limited to travel, fuel, insurance, lighting, permits, wardrobe, cameras, SAG fees, Talent fees, Production Staff (i.e. Directors, Grips, Directors of Photography, Line Producers, Catering, etc.). Both parties will have reasonable access to all accounting recordings and revenues and expenses, as well as financial reports which are described above. All expenses for travel in excess of $2000.00 shall first be pre-approved by both members. Payment of any expenses in excess of $10,000 shall require the approval of both members.
(h) Each party to this agreement shall be responsible for their respective tax implications that may or may not be the result of this agreement not limited to Income Tax, Employment Tax, Capital Gains tax, Excise Tax, and Withholding Tax.
(i) The term of this agreement shall be for a period of two (2) years. All contracts signed during the period of this agreement and revenues accrued as a result of these contracts inside the year term will continue to be shared as agreed in point (e). However, all networks fully disclosed (i.e. Discovery, E!, F/X, Artisan, Lion's Gate, Wealth Channel, USA, Fox) shall be considered pre-contract signing relationships. The agreed revenue percentage splits will be agreed on during that time on a case by case basis for the purposes fairness and best-case business practices.
3. LIMITATIONS ON DAMAGES AND INDEMNIFICATION In no event shall MCMG or its
personnel be liable for consequential, special, indirect, incidental, punitive
or exemplary loss, damage, or expense relating to this Agreement. MCMG shall
indemnify and hold harmless ISME, and its related entities and their respective
personnel from all claims, liabilities, and expenses relating to this Agreement
and venture, arising from a final judicial determination finding bad faith or
intentional misconduct on the part of MCMG.
ISME shall indemnify and hold harmless MCMG, and its related entities and their
respective personnel from all claims, liabilities, and expenses relating to this
venture, arising from a final judicial determination involving bad faith or
intentional misconduct on the part of ISME.
The provisions of this Paragraph shall apply to the fullest extent of the law,
whether in contract, statute, tort (such as negligence), or otherwise.
No term or provision of this agreement shall be changed or modified by any prior
or subsequent statement, conduct or act of any party, except that hereafter the
parties may amend this agreement only by letter or written instrument signed by
all of the parties.
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The headings to the clauses and any underlining in this agreement and in the
schedules are for ease of reference only and shall not form any part of this
agreement for the purposes of construction. The agreement sets out the entire
agreement and understanding between the parties in connection with 5ive Media
Entertainment.
4. LAWS
This Agreement shall be governed by and construed in accordance with the laws of
the State of Nevada, determined without regard to provisions of conflicts of
laws. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of the state and federal courts located in Xxxxx County in the
State of Nevada in any and all actions between or among any of the parties
hereto, whether arising hereunder or otherwise. Venue for any action arising
hereunder shall lie exclusively in Xxxxx County, Nevada. Each party here to
acknowledges and agrees that any pleadings, documents or service of process in
any legal action shall be deemed properly and lawfully served if delivered to
the applicable party in accordance with the notice provision set forth herein.
5. WAIVER OF JURY TRIAL:
MCMG AND ISME IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN
CONTRACT, STATUTE, TORT (SUCH AS NEGLIGENCE), OR OTHERWISE) RELATING TO THIS
AGREEMENT AND UNDERTAKING.
6. In the event that either party to this Agreement shall bring an action to
enforce any provision herein, the prevailing party shall be entitled to
reimbursement for all reasonable legal fees and costs incurred in prosecuting or
defending its claims.
The parties agree to consider the use of alternative dispute resolution
(mediation or arbitration) methods to resolve any disputes that may arise
between them.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
written above.
For and on behalf of
International Sports and Media Group
/s/ Xxx Xxxxxx
By Xxx Xxxxxx
A director duly authorised:
/s/ Xxxx Xxxx
By Xxxx Xxxx
A director duly authorised
For and on behalf of
Xxxxxx/ Xxxxx Media Group
/s/ Xxxxx Xxxxx
By Xxxxx Xxxxx
A director duly authorized
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
A director duly authorized
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