Commercial Agreement

RNS Number : 5282U

Parallel Media Group PLC

03 December 2013

 



3 December 2013

Parallel Media Group PLC

("PMG", "Parallel Media" or the "Company")

Commercial Agreement with Parallel Contemporary Music Limited

The Company announces that it has today entered into an agreement (the "PCM Agreement") with Parallel Contemporary Music Limited ("PCM"), a company wholly owned by Luna Trading Limited which is ultimately controlled by David Ciclitira, and whose only assets are the shares which it holds in a joint venture company. Pursuant to the PCM Agreement, the Company will provide, amongst other things, the services of David Ciclitira to PCM in consideration for the payment by PCM to Parallel Media of most of the revenue which PCM will receive (whether by way of dividends or otherwise) as a result of PCM being a 45 per cent. shareholder in a joint venture company. PCM has entered into a joint venture agreement with a major US media conglomerate, pursuant to which the parties have formed a Hong Kong incorporated company to provide live music based marketing solutions for international and local brands across Asia. PCM owns 45 per cent. of the shares in the joint venture company and it is anticipated that profits are expected to be paid out as dividends to shareholders pro rata to their shareholdings.

In consideration for receipt of the services provided pursuant to the PCM Agreement, PCM will pay any funds earned by it from the joint venture company, subject to the retention of an annual sum of £25,000 to pay for the running costs of PCM and any tax payable by PCM, to Parallel Media up to a maximum aggregate amount of £500,000. In addition, under the PCM Agreement Luna Trading Limited has granted the Company an exclusive option to purchase Luna Trading Limited's entire shareholding in PCM for the nominal sum of £1 at any time until the six month anniversary of the date at which the revenues received by Parallel Media pursuant to the PCM Agreement are equal to or exceed £500,000.

The PCM Agreement is conditional upon the passing of the resolutions at a General Meeting of the Company to be held on 27 December 2013 (the "Resolutions") and will be for a term commencing on the date of the passing of the Resolutions to the date of termination of the joint venture unless terminated upon the exercise of the Company's option to acquire the shares in PCM or by reason of default. The PCM Agreement does not include a minimum amount to be paid to the Company.

In consideration for David Ciclitira providing his services to PCM pursuant to the PCM Agreement he will be granted nil paid options over up to the equivalent of £500,000 of ordinary shares at a price of 6.5 pence per share which will only vest in proportion to the revenues received by the Company from PCM under the PCM Agreement. If the Company elects under the PCM Agreement to exercise its option early (i.e. prior to £500,000 being received by it under the PCM Agreement) these restrictions shall cease and David Ciclitira will be entitled to exercise any remaining options up to the maximum aggregate of £500,000.

The entry into the PCM Agreement with the Company by David Ciclitira constitutes a related party transaction under the AIM Rules. Ranjit Murugason, the independent director, having consulted with the Company's nominated adviser, deems the entry into the PCM Agreement to be fair and reasonable insofar as Shareholders are concerned.

-ENDS-

For further information, please contact:

Parallel Media Group plc
Belinda Laubi	Tel: [phone]
Sanlam Securities UK Limited (Nominated Adviser and Broker)
Virginia Bull / Simon Bennett	Tel: [phone]

 

END

 

 

AGRTJBFTMBJMMPJ