FUNDING AND PRODUCTION AGREEMENT FOR THE 3-D ANIMATED MOTION PICTURE
"BUNNY TALES"
This FUNDING AND PRODUCTION AGREEMENT is made and entered into as of January 26, 2008 (the "Effective
Date"),
SKYWORK STUDIOS INC, a company registered in Canada having office at Unit #11 – 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0 and having its production studio at : 000/0 Xxxxxxxx Xxxxxxx, Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxx, Xxxxxxx (hereinafter
referred to as “Skywork”) being represented by Xx. Xxxxxx Xxxxxx as President;
PACIFIC GOLD ENTERTAINMENT INC, a company registered in Canada having office at #6 – 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0, (hereinafter referred as “PGE Inc.”) being represented
by Xx. Xxxx Xxxx as CEO (Chief Executive Officer);
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(Skywork, PGE Inc. and MPPL will individually be referred to as the “Party” and collectively as the “Parties”.) |
WHEREAS:
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A. |
On July 17, 0000, Xxxxxxx, Xxxxxxx Films Inc. and Red Blossom Entertainment Inc. entered into the initial funding and production agreement for the animated motion picture named “Bunny Tales” setting out the parties’ film equity in “Bunny Tales”. |
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B. |
On June 21, 2007, Pathway Films Inc. and Red Blossom Entertainment Inc. transferred each of their interest in “Bunny Tales” to PGE Inc. pursuant to the terms and conditions of a transfer agreement; |
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C. |
On November 12, 2007, Skywork, PGE Inc. and Daval Releasing Inc. entered into a second funding and production agreement for the animated motion picture named “Bunny Tales” setting out the parties’ adjusted film equity in “Bunny Tales”. |
D. The production of “Bunny Tales” is in an advanced stage of completion.
E. Skywork or PGE Inc. seeks to arrange funding contribution for the production of the movie.
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F. |
Skywork, with the consent of PGE Inc., had to arrange for venture capital loan of CDN$75,000 from MPPL. |
G. MPPL has agreed to give the loan on conditions stipulated in this agreement.
NOW THEREFORE, this agreement witnesses that:
Terms of Loan
1. MPPL agrees to advance the venture capital loan of CDN$75,000 at 20% annual interest and 5% share in the equity of the project “Bunny Tales”.
2. Each of Skywork and PGE Inc. agree to transfer 2.5% of its interest in “Bunny Tales” to MPPL as additional consideration for the advance of the venture capital
loan.
3. MPPL will be first tier recoupment in the funding arrangement outlined above; the equity shares will therefore be deemed as under:
Skywork 48.5%
PGE Inc. 46.5%
MPPL 5.0%
4. MPPL will have no responsibility for losses, if any suffered, in production and distribution of “Bunny Tales”, but will be eligible to dividends declared as per its share in the equity.
5. Repayment of loan proceeds will be paid out in a pari-passu pro-rata sequence as set out in Exhibit “A” attached hereto and forming part of this agreement.
6. All Parties agree to assign the repayment of loan proceeds and future recoupment of proceeds to a third party company, which will represent all of the contracts signed between the Parties and
will disperse all monies contractually owed to the Parties. The third party company will charge a fee equal to 5% of all proceeds for the purpose of its administration fees, not to exceed CDN$25,000 annually.
7. This agreement will be deemed to have been executed and delivered in Vancouver, British Columbia, Canada, and the rights and obligations of the Parties hereunder will be construed and enforced in accordance with the laws of Canada, without regard to conflicts of law principles
thereof. The place of arbitration will be in Canada applying its then current rules and the language of the arbitration will be in English. Judgment upon the award rendered by the arbitrator may be entered into any court having jurisdiction thereof. The prevailing party in any such arbitration will be entitled to recover its reasonable attorneys’ fees and costs, in addition to the award of the arbitrator.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the Effective Date.
Per: /s/ Xxxx Xxxx
Xxxx Xxxx - President
Marigold Paints Pvt. Ltd.
Per: /s/ Xxxxxxxx Xxxxx Mittal
Xxxxxxxx Xxxxx Mittal - President
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EXHIBIT “A”
Exhibit “A” to that certain Funding and Production Agreement
among Skywork Studios Inc., Pacific Gold Entertainment Inc.,
and Marigold Paints Pvt. Ltd.
made as of the 26th day of January, 2008.
(number of pages including this one: 1)
Recoupment and Payment Tiers
All proceeds from the sale and distribution of “Bunny Tales” will be deposited with a third party company to be named “Bunny Tales LLC”, or a similar name to be agreed upon by the Parties. Bunny Tales LLC will disperse all monies owed to the parties directly to the Parties pursuant to the terms and agreements
of this agreement and as per the tier structure for recoupment and payments as set out below. All payments will be made on a pari-passu pro-rata basis among the Parties and their interest or payment amount within each tier.
Tier 1 – Initial Payment Tier
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Parties |
Marigold Paints Pvt. Ltd. |
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Total payment amount |
CDN$75,000 plus 20% for simple interest on venture capital loan |
Tier 2 – Second Payment Tier
|
Parties |
Skywork Studios Inc. |
|
|
Total payment amount |
CDN$350,000 |
CDN$100,000 |
Tier 3 – Third Payment Tier
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Parties |
Daval Releasing Inc. |
|
Total payment amount |
CDN$50,000 |
Tier 4 – Final Payment and Ownership Tier
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Parties |
Skywork Studios Inc. |
Marigold Paints Pvt. Ltd. | |
|
Total payment interest |
47.5% |
46.5% |
5.0% |
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