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ional.com
T E R M S H E E T
"BUGHOUSE ROCK"
SHORT FORM AGREEMENT
December 15th, 2003
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Type PRODUCTION/FINANCING/DISTRIBUTION AGREEMENT
Between WESTWOOD AUDIOVISUAL & MULTIMEDIA CONSULTANTS, INC. (WAMC)
LOS ANGELES (USA)
PRODUCTION & PARTNERS MULTIMEDIA, SAS (PPM) ANGOULEME (France)
ECLECTIC ENTERTAINMENT, INC. (ECLECTIC) LOS ANGELES (USA)
OMNI BROADCASTING NETWORK, INC. (OMNI) LOS ANGELES (USA)
Program "BugHouse Rock", a Computer Animated Series
(possible combo CGI and MOTION CAPTURE) adapted
from an original idea by Chauncey Hines
Rights PPM has entered into a purchase agreement ("Rights
Agreement') with Chauncey Hines (the Original Author) in
connection with the bible entitled "BugHouse Rock" and
the ancillary rights including the collection of books
based on each main character developed in the bible.
Pursuant to the Rights Agreement, PPM has the right to
develop and produce the Computer Animated Series (the
"Program"). All rights of every kind, including
copyright, will be transferred to PPM upon the exercise
of the purchase of the Rights. PPM will grant to WAMC
the exclusive distribution rights in all territories and
in all media in perpetuity.
Production Budget US$5,650,000 (budget to include all development costs
and bank loan charges) - Production Budget attached to
the present Agreement)
Schedule Scripts 01/05/04 to 08/02/04
Main Pack 01/05/04 to 03/01/04
Episodic Packs 02/05/04 to 11/16/04
Storyboards 02/09/04 to 09/02/04
Recording VA 03/12/04 to 09/18/04
CGI 03/05/04 to 12/22/04
Animation 07/05/04 to 03/06/05
Post-Production 09/17/04 to 05/28/05
Executives Producers Dominique Bovio representing WAMC
Sidonie Herman representing P&PM
Donald Wilson representing ECLECTIC
Dennis Johnson representing OMNI
Remuneration to be included in the production budget.
To be equally paid during the production of the
Program.
Pre-Development A budget of 92,000$ is included in the Production
Budget on which the Original Author and PPM, already
spent $40,000 as pre-development costs. The amount of
$52,000 will be spent to do the Motion Capture and
CGI tests and to develop the 2D artwork in CGI
(characters and interactive set), to present the
project in order to raise the financing.
It is understood that PPM contracted with Chauncey
Hines and agreed to reimburse him of his investment
(commitment) only from the production budget of the
Program when the financing of the Program will be set
up.
Pre-Production: PPM agrees to support the choice of the studios and
employees to work on the Program based on the
Production Budget and the Production Schedule
attached to the present Agreement.
Parties have mutual approval over the scripts with
PPM prevailing in the event of a dispute.
If needed, ECLECTIC agrees to give proof of the
financing to PPM's attorney (letter of credit from
its bank(s) or other documents which can be
necessary).
Production ECLECTIC and WAMC to agree on a final budget, final
schedule, and final cash flow based on the approved
bible and scripts, to agree an American casting and
devise a production plan all of which are subject to
the financing by the parties and their final
approvals and are conditions precedent to commencing
production during the first quarter of the Year 2004.
After approvals by ECLECTIC and WAMC, PPM will have
the obligation to make the Program utilizing its
personnel and facilities in accordance with the
Approved Scripts, Approved Budget and Approved
Schedule under the supervision of Dominique Bovio as
Executive Producer representing WAMC and Sidonie
Herman as Executive Producer representing P&PM,
Donald Wilson as Executive Producer representing
ELECTIC and Dennis Johnson as Executive Producer
representing OMNI and will deliver the finished
Program in accordance with the Approved Schedule to
the distributor(s). ECLECTIC and PPM have mutual
approval rights over most production elements and
agree to assign Sidonie Herman, Dennis Johnson and
Donald Wilson to oversee the production.
Program Financing Under the current plan ECLECTIC is assisting PPM in
securing the production financing in the amount of
$5,650,000 from its traditional lending sources and
under the term approved by ECLECTIC and PPM in a
maximum of $2,895,000 including an executive producer
fee $150,000. ECLECTIC to draw down from the Loan
based on the cash flow projection.
PPM to provide the rest of the financing in a minimum
of $2,755,000 from its traditional sources including
pre-sales and co-productions including a co-
production to be set up with the French Production
Companyto obtain access to the French and European
subsidies), being understood that the finances coming
through P&PM are linked to the Governmental laws of
each involved countries.
Alternate financing plans that would not expose
ECLECTIC to any additional risk will be accepted by
both parties.
If needed, PPM accepts that a completion bond (not
included in the attached Production Budget) will be
secured by ECLECTIC.
Recoupment: It is agreed by PPM and WAMC that all the co-
producers, including ECLECTIC, shall be reimbursed of
their investments upon the exploitation of the
Program.
Distributors Until the co-producers have fully recoup their
investments, ECLECTIC will be the distributor of the
Program in the USA. (television, video and ancillary
rights excluding the books) and WAMC will be the
distributor in perpetuity for the rest of the world.
(television, video and ancillary rights) excluding
the financiers co-producers territories (to be
determined).
In order to enhance the exposure of the Program,
ECLECTIC agrees to accept to negotiate the Program
Rights with other TV Network, Cable and or Satellite
in the USA, if demanded by WAMC.
Security Interest: PPM and ECLECTIC to take first priority security
interest in the Program and all related elements
subordinate to lending institutions, completion
guarantor and any union and guild security interest.
Exploitation: ECLECTIC and WAMC commonly responsible for
distribution and exploitation of the Program with
respect to exploitation plans. P&A commitment to be
at their sole discretion and won't be made until
after delivery.
Distributor(s)' fee: Distributor(s) to take a fee to be decided in
common by ECLECTIC and WAMC from the remaining Gross
Proceeds.
From the remaining Gross Proceeds:
(Gross Proceeds are the Total of the Proceeds minus
the Original Author fee, the Director fee and all
residual fees to be negotiated during the production
of the Program)
i. Distributor(s) to fully recoup all its
Distribution Expenses first
ii. ECLECTIC, PPM and the other co-producers
(including WAMC) to fully recoup all their
Recoupable Investments in accordance with the
Production Budget and the Long Form Agreement to
be signed by ECLECTIC, WAMC and PPM and in
accordance with the terms and conditions agreed
by the Original Author.
Subsequent Both ECLECTIC and WAMC and PPM will jointly own the
Program and will share the copyright depending of
their final investments. If WAMC and / or PPM
wishe(s) to produce a Subsequent Production and
ECLECTIC does not, the parties agree to negotiate in
good faith a buyout price for the non-committing
party's ownership rights which shall not be more than
25 % of the total Production Budget of the Program.
Term Sheet Duration The present Agreement shall end the 31st of
December, 2004.
Long Form Agreement A Long Form Agreement to be created the latest
one month after the end of the Term Sheet Duration or
sooner if the parties have arrange the complete
financing of the Program. The Long Form Agreement to
be agreed and signed by the parties, pursuant to this
Short Term Agreement, which is executed the 15th of
December, 2003.
To confirm your agreement with the foregoing, please sign in the space
provided below.
PPM ECLECTIC
(Production & Partners Multimedia, SAS) (Eclectic Entertainment, Inc.)
By: Sidonie Herman By: Donald Wilson
/s/ Sidonie Herman /s/ Donald Wilson
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Its President Directeur General Its: President
WAMC OMNI
(Westwood Audiovisual & (Omni Broadcasting Network, Inc.)
Multimedia Consultants, Inc.)
By: Dominique Bovio By: Dennis Johnson
/s/ Domninque Bovio /s/ Dennis Johnson
- ------------------------- -----------------------
Its: President & CEO Its: President & General Manager