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) November 1, 2000
MDI ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24919 73-1515699
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
201 Ann Street
Hartford, Connecticut 06103
(Address of principal executive
offices including zip code)
(860) 527-5359
(Registrant's telephone number,
including area code)
N.A.
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On November 1, 2000, MDI Entertainment, Inc. entered into a Strategic
Alliance Agreement with eLot, Inc., a Virginia corporation. The Agreement,
effective October 20, 2000, is for a five-year term which will automatically
renew for additional one-year terms until such time as either party serves
notice of termination ninety days prior to the expiration date. Under the
terms of this Agreement, MDI, on a non-exclusive basis, will market and sell
certain of eLot's products to MDI's customers, which consist of the
government operated lotteries throughout the world. eLot will pay to MDI a
commission for each product licensed or sold, determined by the type of
product licensed or sold by MDI, in either cash or eLot common stock. Elot
has agreed to register all of the shares of eLot common stock paid to MDI as
commissions. As part of the alliance, eLot and MDI will form a joint venture
to develop a web site designed to allow lottery players to submit losing
tickets for second chance drawings.
To further promote their strategic relationship, on November 1, 2000, MDI
and eLot entered into a Stock Exchange Agreement. MDI issued 444 shares of
Series B Preferred Stock and a three-year warrant to purchase 555,556 shares
of common stock at an exercise price of $3.50 per share to eLot in exchange
for 1,000,000 shares of eLot common stock. The Series B Stock has a
liquidation preference of $1 million, does not pay a dividend, and is
convertible into an aggregate of 444,444 shares of MDI common stock, subject
to adjustment under certain circumstances. As long as the sum of the
aggregate number of shares of common stock issuable upon conversion of the
Series B Stock and the MDI common stock owned by eLot and its subsidiaries
is equal to or greater than 444,444, eLot shall have the right to designate
an observer to the MDI Board of Directors. If not previously converted by
eLot, the Series B Stock will automatically convert into MDI common stock on
November 1, 2001.
eLot has agreed to file a registration statement with respect to the resale
of the eLot common stock issued to MDI as soon as practicable after the
closing of the transaction, but no later than thirty days after closing.
Once the registration statement is declared effective, MDI may not sell more
than (i) 333,334 shares of eLot common stock during the thirty-day period
(the "First Sale Period") following effectiveness, (ii) 666,667 shares of
eLot common stock, less any shares sold during the First Sale Period, during
the thirty-day period following the First Sale Period (the "Second Sale
Period") or (iii) 1,000,000 shares of eLot common stock, less any shares
sold during the First Sale Period and Second Sale Period, during the
thirty-day period following the Second Sale Period.
MDI has granted eLot certain registration rights with respect to the resale
of the MDI common stock issued to eLot. Such rights include certain
piggy-back and Form S-3 registration rights, as well as eLot's right to
demand one registration commencing any time after closing, subject to
certain limitations.
In connection with the transaction, MDI paid Venture Partners Capital, LLC,
a registered broker-dealer with which MDI's Executive Vice President of
Finance is affiliated, a 2% cash fee.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
99.1 Strategic Alliance Agreement, dated November 1, 2000, between
MDI Entertainment, Inc. and eLot, Inc.
99.2 Stock Exchange Agreement, dated November 1, 2000, between MDI
Entertainment, Inc. and eLot, Inc.
99.3 Certificate of Designations for Series B Preferred Stock of MDI
Entertainment, Inc.
99.4 Warrant, dated November 1, 2000, issued to eLot by MDI
Entertainment, Inc.
99.5 eLot Registration Rights Agreement, dated November 1, 2000,
between MDI Entertainment, Inc. and eLot, Inc.
99.6 MDI Registration Rights Agreement, dated November 1, 2000,
between MDI Entertainment, Inc. and eLot, Inc.
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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.
MDI ENTERTAINMENT, INC.
(Registrant)
Dated November 6, 2000 By: /s/ Steven M. Saferin
---------------- --------------------------
Steven M. Saferin
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
99.1 Strategic Alliance Agreement, dated November 1, 2000, between
MDI Entertainment, Inc. and eLot, Inc.
99.2 Stock Exchange Agreement, dated November 1, 2000, between MDI
Entertainment, Inc. and eLot, Inc.
99.3 Certificate of Designations for Series B Preferred Stock of MDI
Entertainment, Inc.
99.4 Warrant, dated November 1, 2000, issued to eLot, Inc. by MDI
Entertainment, Inc.
99.5 eLot Registration Rights Agreement, dated November 1, 2000,
between MDI Entertainment, Inc. and eLot, Inc.
99.6 MDI Registration Rights Agreement, dated November 1, 2000,
between MDI Entertainment, Inc. and eLot, Inc.
