SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 16, 1998
THE PRODUCERS ENTERTAINMENT GROUP LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-18410 95-4233050
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
5757 WILSHIRE BOULEVARD
PENTHOUSE ONE
LOS ANGELES, CALIFORNIA 90036
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(213) 634-8634
(REGISTRANT'S TELEPHONE NUMBER)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the terms of an Agreement of Merger (the "Agreement")
dated as of July 15, 1998, The Producers Entertainment Group Ltd., a Delaware
corporation ("Registrant" or the "Company") has acquired all of the issued and
outstanding stock of MWI Distribution, Inc., a California corporation ("MWI"),
from Tom Daniels and Craig Sussman (collectively, the "Stockholders"), the sole
stockholders of MWI. MWI merged with and into TPEG Merger Company, a California
corporation ("MergerCo"), a wholly owned subsidiary of the Company. MWI will be
dissolved and MergerCo will continue as the surviving corporation. The
consideration paid at closing to the Stockholders by the Company was 763,889
shares of the Company's Common Stock, $.001 par value per share (the "Common
Stock"). The Company may have to pay additional consideration, in the form of
Common Stock, to the Stockholders, which payments are contingent upon the
performance of MergerCo for the fiscal years ended June 30, 1999, June 30, 2000,
June 30, 2001 and June 30, 2002, respectively. The Stockholders also shall
receive up to an additional 109,428 shares of Common Stock if the Common Stock
Average Price, as defined in the Agreement, does not equal or exceed $3.80 per
share between July 15, 1998 and June 30, 1999.
The Agreement was negotiated at arms' length between the Registrant and the
Stockholders. The merger consideration reflected, among other things, the value
which the Registrant placed upon MWI in light of the value of MWI's various
distribution contracts, as well as the likely synergies which management of the
Registrant and MWI believed could be achieved by the combination of business
accomplished by the merger.
In accordance with the Agreement, Messrs. Daniels and Sussman have entered
into substantially identical employment agreements with MergerCo for a period of
five years (the "Employment Agreements"), which are filed herewith.
Reference is also made to the press release of the Registrant, issued on
July 16, 1998, which contains information regarding the acquisition and which
is incorporated herein by this reference. A copy of the press release is
attached to this Form 8-K as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
To be included by amendment to this Form 8-K are audited financial
statements of MWI for its fiscal year ended December 31, 1997.
(b) PRO FORMA FINANCIAL INFORMATION
To be included by amendment to this Form 8-K are a pro forma condensed
balance sheet and statement of operations of the Registrant for the fiscal year
ended June 30, 1998.
(c) EXHIBITS
Included as part of this Form 8-K are the exhibits listed on the Exhibit
Index appearing on page 5.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
July 31, 1998 THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: /s/ ARTHUR BERNSTEIN
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Arthur Bernstein
Secretary
EXHIBIT INDEX
EXHIBITS
2.1 Agreement of Merger dated as of July 15, 1998, by and among The
Producers Entertainment Group Ltd., TPEG Merger Company, MWI
Distribution, Inc. and Tom Daniels and Craig Sussman.
10.1 Employment Agreement dated as of July 15, 1998, by and among TPEG Merger
Company and Thomas Daniels.
10.2 Employment Agreement dated as of July 15, 1998, by and among TPEG Merger
Company and Craig Sussman.
10.3 Escrow Instructions dated as of July 15, 1998, by and among The Producers
Entertainment Group Ltd., Tom Daniels, Craig Sussman, and OTR, Inc.
10.4 Registration Rights Agreement dated as of July 15, 1998, by and among
The Producers Entertainment Group Ltd., Tom Daniels, and Craig Sussman.
99.1 Press Release dated July 16, 1998.