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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Harmony Holdings, Inc.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
41322310
(CUSIP Number)
Gilles Assouline
Unimedia S.A.
Immeuble le Levant
2 rue du Nouveau Bercy
94220 Charenton
France
(33-1) 43-53-69-99
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 27, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [X]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class. See Rule 13d-7.)
* The remainder of this cover page shall be filled out
for a reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover
page shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 41322310
- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Unimedia S.A.
- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS
2(d) or 2(e) [ ]
- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- ---------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000,000 Shares
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0 (See text of Item 5)
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,000,000 Shares
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 (See text of Item 5)
- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000,000 Shares (See text of Item 5)
- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ---------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer
This statement relates to the common stock, par
value $.01 per share (the "Common Stock"), of Harmony
Holdings, Inc. (the "Company"), a Delaware corporation with
its principal executive offices at 1990 Westwood Blvd.,
Suite 310, Los Angeles, California, 90025.
Item 2. Identity and Background
This statement is being filed by Unimedia S.A.
("Unimedia"), a privately held societe anonyme organized and
existing under the laws of France with its principal
executive office at 11 bis, rue du Colisee, 75008, Paris,
France and its principal business at Immeuble le Levant, 2
rue du Nouveau Bercy, 94220, Charenton, France. Unimedia is
a designer of multimedia interactive software which, through
its affiliates and subsidiaries, has developed complementary
expertise in security, sales automation, contactless smart
card technology, Internet service providing, graphic
animation, on-line programming, virtual reality technologies
and special effects.
The attached Schedule I is a list of the executive
officers and directors of Unimedia and persons that may be
deemed to be controlling persons of Unimedia, which contains
the following information with respect to each person listed
on such schedule:
(a) name and representative through which it acts,
if any;
(b) residence address or principal business
address and, if different, address of principal office;
(c) principal business or present principal
occupation or employment and, if applicable, the name,
principal business and address of any corporation or other
organization in which such employment is conducted; and
(d) citizenship or place of organization.
During the past five years, neither Unimedia nor,
to the best of Unimedia's knowledge, any person or entity
named on Schedule I has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as
a result of which it was or is subject to a judgment, decree
<PAGE>
or final order enjoining future violations of, or
prohibiting or mandating activities subject to, United
States Federal or state securities laws or finding any
violation with respect to such laws.
Claude Berda, a representative of a member of
Unimedia's Supervisory Board, may be deemed to be a
controlling person with respect to Unimedia through his
direct and indirect ownership interests in three
shareholders of Unimedia (MMP, Multimedia Investissement and
Media Venture) that are also members of Unimedia's
Supervisory Board. However, Unimedia does not believe that
Mr. Berda's interests create a circumstance of sole or
shared voting or dispositive power with respect to
Unimedia's holdings of Common Stock.
Gilles Assouline, Chief Executive Officer of
Unimedia, may be deemed to be a controlling person with
respect to Unimedia through his shareholdings in three
shareholders of Unimedia (Diamond Productions, Multimedia
Investissment and Media Venture) that are also members of
the Supervisory Board and through his direct shareholdings
in Unimedia. However, Unimedia does not believe that Mr.
Assouline's interests create a circumstance of sole or
shared voting or dispositive power with respect to
Unimedia's holdings of Common Stock.
Item 3. Source and Amount of Funds or Other Consideration
On July 27, 1996, the Company and Unimedia
executed a subscription agreement (the "Subscription
Agreement") whereby the Company agreed to sell, and Unimedia
agreed to buy, 1,000,000 shares of Common Stock for
$2,000,000. All such funds will come from Unimedia's working
capital.
Item 4. Purpose of Transaction
The Common Stock to be acquired by Unimedia
pursuant to the Subscription Agreement is being acquired for
purposes of investment. However, in connection with such
investment, the Company, Unimedia and Harvey Bibicoff (in
his capacity as a stockholder of the Company) entered into
an agreement (the "Acquisition Agreement") pursuant to which
they have agreed, inter alia, to negotiate and execute in
good faith before September 30, 1996 an agreement providing
for the acquisition of Unimedia by the Company (the
<PAGE>
"Unimedia Acquisition"). Pursuant to the Unimedia
Acquisition, the shareholders of Unimedia would receive
Common Stock and preferred stock of the Company representing
approximately 69% of the share capital (including 69% of the
voting rights and dividend rights) of the Company on a fully
diluted basis.
On April 18, 1996, Unimedia and Capital Media
Group Ltd. ("CMG") made a proposal to the Company for the
purchase of all the Company's outstanding stock at a
purchase price of $3.50 per share of which one third would
have been paid in cash and two thirds would have been paid
in the common stock of CMG. In further discussions, Unimedia
and CMG also made a proposal to loan the Company between
$500,000 and $1,000,000 on terms to be agreed upon. Such
proposals were subject to significant conditions, including
negotiation of a definitive agreement, satisfactory
completion of due diligence reviews and receipt of various
board, stockholder and regulatory approvals. Subject to such
conditions, such proposals were accepted by the Company.
Negotiations with respect to such proposals terminated prior
to the commencement of negotiations with respect to the
Subscription Agreement and the Acquisition Agreement.
Unimedia intends continuously to review all
aspects of its investment in the Company, including the
Company's business operations, financial results and
condition and prospects, the market price of Common Stock,
conditions in the securities markets generally, general
economic and industry conditions and progress with respect
to the Unimedia Acquisition. Unimedia reserves the right,
based on its continuing review of these and other relevant
factors, to acquire additional shares of Common Stock in the
open market, in privately negotiated transactions or
otherwise, to dispose of any or all of the shares of Common
Stock it will acquire pursuant to the Subscription Agreement
or may otherwise acquire, or otherwise to change its
intention with respect to any or all of the matters referred
to in this Item 4.
Except as set forth in this statement, neither
Unimedia nor, to Unimedia's knowledge, any of the persons
listed on Schedule I, has any other present plans or
proposals which would result in or relate to (a) the
acquisition by any person of additional securities of the
<PAGE>
Company, or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company
or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present board of
directors or management of the Company, including any plans
or proposals to change the number or term of directors or to
fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of
the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the
Company's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of
control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity
securities of the Company becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or (j) any action similar
to any of those enumerated above. However, based on its
continuing review of the factors referred to above or in
connection with the Unimedia Acquisition, Unimedia, the
persons listed on Schedule I, Unimedia's shareholders or
their respective representatives may discuss one or more of
the foregoing matters with the Company, its directors or
management or other shareholders of the Company, or may
formulate plans or proposals relating to one or more of the
foregoing matters. Unimedia reserves the right to take any
and all actions it may deem appropriate to maximize the
value of its investment in the Company or facilitate the
Unimedia Acquisition.
Item 5. Interest in Securities of the Issuer
The only shares of the Company's Common Stock that
Unimedia beneficially owns are the 1,000,000 shares of
Common Stock to be acquired pursuant to the Subscription
Agreement, which shares represent approximately 14.9% of the
outstanding Common Stock. Unimedia possesses the sole power
to vote or direct the vote of and to dispose of or direct
the disposition of all shares of Common Stock beneficially
owned by it.
Pursuant to the Acquisition Agreement, Harvey
Bibicoff has undertaken to refrain from selling a specified
<PAGE>
percentage of his shares of the Company prior to completion
of the Unimedia Acquisition, and in any case by September
30, 1996. Mr. Bibicoff has also agreed to vote in favor of
the Unimedia Acquisition at any shareholders meeting of the
Company called to approve such transaction. Unimedia
disclaims that it and Mr. Bibicoff constitute a "group"
within the meaning of Rule 13d-5(b)(1) of the Securities
Exchange Act of 1934, as amended, and Unimedia does not
believe that such agreements create a circumstance of shared
voting or dispositive power. Accordingly, Unimedia also
disclaims any beneficial ownership in Common Stock held by
Mr. Bibicoff.
Except as described above, neither Unimedia nor,
to Unimedia's knowledge, any person named on Schedule I
beneficially owns any shares of Common Stock or has effected
any transactions in Common Stock during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Company
Unimedia has entered into the Acquisition
Agreement and the Subscription Agreement with respect to the
Common Stock as set forth under Items 4 and 5. The
information in such Items and the Exhibits hereto are
incorporated herein by reference. In addition to the rights
described under Items 4 and 5, Unimedia has certain rights
under the Subscription Agreement to cause the Company to
register under the Securities Act of 1933, as amended, the
Common Stock purchased pursuant to the Subscription
Agreement. These rights are exercisable only if the Unimedia
Acquisition has not been completed by September 30, 1996.
Additionally, pursuant to the Acquisition
Agreement, the Company has undertaken not to issue or create
any new shares or options without the prior written consent
of Unimedia, except pursuant to the exercise of options held
by employees or former employees granted prior to the
execution of the Acquisition Agreement.
Item 7. Material to be filed as Exhibits
1. The Agreement dated July 27, 1996 between the
Company, Unimedia and Harvey Bibicoff.
2. The Subscription Agreement dated July 27, 1996
between the Company and Unimedia.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
August 1, 1996 Unimedia S.A.
By /s/Gilles Assouline
------------------------------
Name: Gilles Assouline
Title: President du Directoire
<PAGE>
Schedule I
DIRECTORS AND EXECUTIVE OFFICERS OF UNIMEDIA S.A.
The name, business address, principal occupation or
employment and citizenship of each executive officer, Member of the
Executive Board and Member of the Supervisory Board of Unimedia S.A.
and persons who may be deemed to be controlling persons with respect
to Unimedia S.A. is set forth below.
Members of the Executive Board and Executive Officers of Unimedia S.A.
Name Residence Address or
Principal Business Occupation or
Address and if Employment or Cittizenship
different, Address of Principal or Place of
Principal Office Business Organizaiton
Gilles Assouline Immeuble le Levant, Chief Executive French
Chief Executive 2 rue du Officer and Member
Officer and Member Nouveau Bercy, 94220, of Executive Board
of Executive Board Charenton, France
Anne-Marie Assouline Immeuble le Levant, Director and Member French
Director and Member 2 rue du of Executive Board
of Executive Board Nouveau Bercy, 94220,
Charenton, France
<PAGE>
Members of the Supervisory Board of Unimedia S.A.
Name Residence Address or
Principal Business Occupation or
Address and if Employment or Cittizenship
different, Address of Principal or Place of
Principal Office Business Organizaiton
Jean-Pierre Souviron Kapt' Chariman of Kapt' French
Chairman of 3, Nede Pondichery
Supervisory 75015 Paris, France
Jean-Jacques Assouline Immeuble le Levant, Vice President French
Vice President 2 rue du and Member of
and Member of Nouveau Bercy, 94220, Supervisory Board
Supervisory Board Charenton, France
Michel Assouline Immeuble le Levant, Member of French
2 rue du Supervisory Board/
Nouveau Bercy, 94220, Directeur des
Charenton, France Operations
Multimedia 11 bis, Holding Company France
Investissement Rue du Colisee,
Represented by 75008, Paris, France
Michel Assouline
Diamond Productions 37 Rue des Mathurins, Entertainment, France
Represented by 75008, Paris, France Movie Production
Jean-Jaques Assouline and Holding
Company
MMP 43/45 Avenue Kleber, Holding Company France
Represented by 75116, Paris, France
Claude Berda
Media Venture 43/45 Avenue Kleber, Holding Company France
Represented by 75116, Paris, France
Marc Sillam
<PAGE>
Other
Name Residence Address or
Principal Business Occupation or
Address and if Employment or Cittizenship
different, Address of Principal or Place of
Principal Office Business Organizaiton
Claude Berda 43/45 Avenue Kleber, Chairman of MMP French
75116, Paris, France
Gilles Assouline
(See Above)
<PAGE>
Exhibit Index
Exhibit
No. Document
1. The Agreement dated July 27, 1996 between
the Company, Unimedia and Harvey Bibicoff.
2. The Subscription Agreement dated July 27,
1996 between the Company and Unimedia.
Exhibit 1
AGREEMENT, dated July 27, 1996 (as
of July 22, 1996) among HARMONY HOLDINGS
INC., HARVEY BIBICOFF and UNIMEDIA S.A.
This Agreement is made with reference to the following:
1) The shareholders of UNIMEDIA desire to sell all their
outstanding ordinary shares of UNIMEDIA, and Harmony Holdings
Inc. (hereinafter "HHI") desires to purchase such shares, in
exchange for a total amount of 20,000,000 shares of the
Preferred Stock and Common Stock (per value $0.1 per share) of
HHI;
2) Prior to the execution of a sale and purchase agreement
setting forth the terms and conditions of such sale and
purchase, UNIMEDIA agrees to purchase this day 1,000,000 shares
of Common Stock of an aggregate amount of $2,000,000 pursuant
to the terms and conditions set forth in the subscription
agreement set out in Appendix A; and
3) UNIMEDIA envisages to purchase after the execution of the
Agreement, on the open market, a certain number of HHI shares
which is currently contemplated to be up to 1,000,000 shares at
a price no higher than $2.50 per share.
Now, therefore, the parties to this agreement hereby agree,
upon the terms and conditions hereinafter set forth as follows:
1. Sale and Purchase Agreement
The parties hereto agree to negotiate and execute in good faith
before September 30, 1996, an agreement that will set forth the
terms and conditions of, in particular:
- the sale by the UNIMEDIA shareholders of their UNIMEDIA
shares and the purchase by HHI of such shares in exchange
for shares of Preferred Stock, par value $0.1 per share,
and Common Stock par value $0.1 per share, of HHI;
- the outstanding UNIMEDIA shares shall be purchased on
the following basis: 100% of the outstanding UNIMEDIA
shares is equal to 20,000,000 HHI Common Stock and
Preferred Stock shares;
<PAGE>
- the parties will agree prior to the execution of the
sale and purchase agreement, the law that will govern and
construe such agreement;
- representations and warranties granted by UNIMEDIA
usually granted in this type of transaction, (covering in
particular organization, subsidiaries, capital stock,
authority to execute and deliver the agreement, financial
statements, title to properties, authority for operation,
intellectual property and licenses, insurance contracts,
no adverse action, compliance to law, no default, no
adverse change, outstanding funded debt, absence of
guarantees, labor disputes, outside interest, litigation,
bank accounts, articles, by-laws, minutes and permits
disclosure power of attorney, changes since the last
balance sheet date, bankruptcy);
- representations and warranties granted by Mr. Harvey
BIBICOFF and HHI usually granted in this type of
transaction (covering in particular organization,
subsidiaries, capital stock, authority to execute and
deliver the agreement, financial statements, title to
properties, authority for operation, intellectual property
and licenses, insurance contracts, no adverse action,
compliance to law, no default, no adverse change,
outstanding funded debt, absence of guarantees, labor
disputes, outside interest, litigation, bank accounts,
articles, by-laws, minutes and permits disclosure power of
attorney, changes since the last balance sheet date,
bankruptcy); and
UNIMEDIA shall not grant HHI any representation or
warranty related to the PIXEL group covering events prior
to the PIXEL acquisition which will take place in any
event before October 15, 1996, UNIMEDIA shall, however,
assign the benefit of the representations and warranties
granted to UNIMEDIA by the founders of PIXEL.
2. Representation and Warranties of UNIMEDIA
- - UNIMEDIA hereby represents and warrants that the execution
and delivery of this agreement and the carrying out of the
terms by UNIMEDIA have been duly authorized by all necessary
corporate action.
- - UNIMEDIA hereby represents and warrants that it has
sufficient funds in its bank accounts to pay the two million
dollars for the Purchase of the HHI shares referred to in
<PAGE>
the Subscription Agreement attached hereto. UNIMEDIA will
instruct its bank to reserve this amount for such payment.
- - UNIMEDIA warrants and represents that at the time of closing
of the contemplated acquisition that:
1. UNIMEDIA will have, an unencumbered asset, US $7.5 million
in cash and/or Harmony stock.
2. UNIMEDIA will have no banking debt.
3. PIXEL will have no banking debt except the debts owed to
UNIMEDIA and whatever amount has been drawn down against its
secured working capital bank line.
- - UNIMEDIA hereby represents and warrants that at least 51% of
its shareholders have agreed and undertaken to exchange all
their outstanding shares for HHI Common and Preferred Stock
under the terms and conditions set forth in the agreement.
3. Representations and Warranties of HHI HHI hereby represents
and warrants that:
- - The execution and delivery of this agreement and the carrying
out of the terms hereof have been duly authorized by all
necessary corporate action, and the board of directors of HHI
has approved this Agreement and the execution, delivery and
carrying out thereof.
- - HHI has provided to UNIMEDIA, as reflected in Appendix 3
hereto, a copy of the unaudited consolidated balance sheet of
HHI as of March 31, 1996, and statements of operations and cash
flows for the nine months ended March 31, 1996 (the "Financial
Statements").
- - The Financial Statements described above, including the notes
and schedules thereto, have been prepared in accordance with
generally accepted accounting principals in the US, applied on
a consistent basis and presently fairly the consolidated
financial position and results of the operations and cash flows
of HHI and its subsidiaries and the changes in its financial
condition at such date and or such periods.
- - HHI and its subsidiaries have no liabilities or
obligations (absolute, accrued, contingent or otherwise)
which were not fully reflected or served against in the
<PAGE>
Financial Statement, except for liabilities and obligations
incurred in the ordinary course of business since the date
of the Financial Statement.
- - On the basis set forth in Section 1(b), the purchase and
sale of 100% of UNIMEDIA shares referred to in Section 1
above will grant the shareholders of UNIMEDIA approximately
69% of the share capital of HHI on a fully diluted basis
(i.e., approximately 69% of the voting rights and 69% of the
rights to dividends).
4. Representations and Warranties of Harvey BIBICOFF and HHI
Mr. Harvey BIBICOFF and HHI, jointly and severally, hereby
represent and warrant that:
- - Since the date of the Financial Statement no material
adverse change in the assets business or forecast of HHI and
its subsidiaries has occurred;
- - HHI or Mr. Harvey BIBICOFF are not structuring the
acquisition of UNIMEDIA by HHI as a two-step transaction as
a method of receiving the financing and not proceeding with
the acquisition, and know no reasons, liabilities or
obligations (disclosed, nondisclosed, absolute, accrued,
contingent or otherwise) which will cause them to do so; and
- - The Shareholders that will hold Preferred Stock shares
referred to in Section 1 will have identical liabilities,
rights and obligations as the ones holding the Common Stock
shares.
5. Undertakings of HHI and Mr. Harvey BIBICOFF
- - Mr. Harvey BIBICOFF undertakes to take all steps in view
of the completion of the sale and purchase of the UNIMEDIA
shares referred to in Section 1 above, and in particular and
if necessary, to vote in favor of such sale and purchase at
HHI's shareholders' meeting called to approve the
transaction referred to in this agreement.
HHI undertakes not to issue or create any new HHI share or
option without the prior written consent of UNIMEDIA, except
pursuant to the exercise of options help by employees or
former employees granted prior to the execution of this
agreement.
<PAGE>
Mr. Harvey BIBICOFF undertakes to refrain from selling in
any manner 80% of his HHI shares prior to the completion of
the purchase of UNIMEDIA by HHI, and in any case by
September 30, 1996.
7. Governing Law
This Agreement shall be construed in accordance with the
laws of France and the "Tribunal de Commerce" de Paris will
be competent.
HARVEY BIBICOFF,
by: /s/ Harvey Bibicoff
------------------------
UNIMEDIA,
by: /s/ Gilles Assouline
------------------------
HARMONY HOLDINGS
INCORPORATION,
by: /s/ Harvey Bibicoff
------------------------
Exhibit 2
HARMONY
HOLDING, INC
SUBSCRIPTION AGREEMENT
This STOCK SUBSCRIPTION AGREEMENT
(hereinafter sometimes referred to as
the "Agreement"), made and entered into
this day of July, 1996, between HARMONY
HOLDINGS, INC., a Delaware corporation
(hereinafter referred to as "HHI"), and
UNIMEDIA, S.A., a company whose siege
social is in the Republic of France
(hereinafter referred to as "Unimedia").
This Agreement is made with reference to the following:
1. HHI has authorized a class of Common Stock, par
value $.01 per share (hereinafter referred to as "Common
Stock") with a sufficient number thereof remaining unissued
for the purposes of carrying out this Agreement.
2. Unimedia desires to purchase 1,000,000 shares of
Common Stock on the terms and conditions hereinafter in this
Agreement set forth.
3. HHI desires to sell to Unimedia 1,000,000 shares of
Common Stock on the terms and conditions hereinafter in this
Agreement set forth.
4. All the terms used in this Agreement to express
currency shall mean and refer to the currency of the United
States of America.
5. Unimedia and HHI envisage this stock purchase to be
the first step in a series of steps which will result in the
shareholders of Unimedia becoming the majority shareholder
of HHI.
NOW THEREFORE, in consideration of the mutual covenants set
forth in this Agreement and other good and valuable
consideration, the parties hereto hereby agree, upon the
terms and conditions hereinafter set forth as follows:
<PAGE>
1. Sale and Purchase
1.1. Upon the terms and conditions hereinafter set
forth, HHI hereby sells to Unimedia one Million (1,000,000)
shares of Common Stock, from its authorized but unissued
Common Stock, for a purchase price of two dollars ($2) per
share, or an aggregate purchase price of two Million
($2,000,000) Dollars.
1.2. Upon the terms and conditions hereinafter set
forth, Unimedia hereby purchases from HHI one Million
(1,000,000) shares of HHI Common Stock, from its authorized
but unissued Common Stock, for a purchase price of Two
Dollars ($2.00) per share, or an aggregate purchase price of
Two Million ($2,000,000) Dollars.
2. Payment and Issue
2.1. Pursuant to Section 2.03 below, Unimedia will pay
to HHI in funds immediately realized in Los Angeles,
California, the sum of Two Million ($2,000,000) Dollars.
2.2. Upon receipt of the funds required by Section 2.01
of this Article, HHI will instruct its transfer agent to
issue and deliver in the name of Unimedia the certificate or
certificates representing the One Million (1,000,000) shares
of Common Stock. HHI will deliver to Unimedia the said
certificate within a maximum of ten days of the payment of
the funds.
2.3. Unimedia will pay the funds upon receipt of:
- the minutes of the board of HHI ratifying the
agreement signed this day between Mr. Harvey Bibicoff, HHI
and Unimedia setting forth in particular the terms of the
acquisition by HHI of Unimedia and approving the said
acquisition after reviewing and discussing the fairness
opinion related hereto,
- a legal opinion of HHI's counsel confirming that no
shareholders meeting nor additional board action is
necessary for the execution of the long form agreement and
the completion of the acquisition of Unimedia by HHI.
<PAGE>
3. Registration Rights
Provided that by September 30, 1996 the proposed acquisition
of Unimedia by HHI has not been completed, Unimedia may
demand at any time on or after September 30, 1996 that HHI
register the shares of Common Stock purchased pursuant to
this agreement. In that event, HHI undertakes to file a
Registration Statement covering such shares as soon as
possible and with no undue delay.
4. Representations and Warranties of HHI
4.1. HHI is a corporation organized and existing under
the laws of the State of Delaware and is in good standing.
Each subsidiary of HHI, referred to in the Registration
Statement on Form S-1 under the Securities Act of 1933, as
amended (hereinafter referred to as the "Act"), with the
Securities and Exchange Commission, No. 333-2648, is a
corporation organized and existing under the laws of its
jurisdiction of incorporation and is in good standing.
4.2. A copy of Amendment No. 3 to the Registration
Statement referred to in Section 4.01 of this Article IV has
heretofore been delivered to Unimedia. The statements made
therein are true and correct and did not omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading.
4.3. The execution and delivery of this Agreement and
the carrying out of the terms hereof have been duly
authorized by all necessary corporate action and the Board
of Directors of HHI has approved this Agreement, the
execution, delivery and carrying out thereof and the issue
and delivery of certificates representing shares of Common
Stock sold pursuant to this Agreement.
4.4. HHI has sufficient authorized but unissued shares
of Common Stock to carry out this Agreement, and when
certificates representing the shares sold pursuant to this
Agreement are executed and delivered all shares of Common
Stock represented thereby will be duly authorized, issued
and outstanding, fully paid and non-assessable. These
shares of Common Stock are of the same class as all other
shares of Common Stock issued and outstanding. The officer
or officers whose signatures appear on such certificates
have been duly authorized to execute certificates
representing shares of Common Stock, notwithstanding that
<PAGE>
one or more of them may not any longer hold the office
indicated on such certificates.
HHI shall use the $2,000,000 as working capital and in
the ordinary course of HHI's business, and this until
Unimedia's shareholders become HHI's largest shareholder.
5. Representations and Warranties of Unimedia
5.1. Unimedia, a company duly organized under the laws
of the Republic of France, is in full possession of all its
corporate rights, powers and franchises.
5.2. Unimedia has full power and authority under such
laws and its organic documents to enter into this Agreement
and carry out its terms.
5.3. The execution and delivery of this Agreement and
the carrying out of the terms hereof have been duly
authorized by all necessary action on the part of Unimedia
and the managing body or conseil de surveillance or
Unimedia and has approved this Agreement, the execution,
delivery and carrying out thereof and the payment for the
shares of Common Stock sold pursuant to this Agreement.
5.4. Unimedia is acquiring the Common Stock for its
own account and not with a view to any distribution thereof
or any participation in any such distribution.
5.5. Unimedia repeats the representations and
warranties made in the PROSPECTIVE INVESTOR QUESTIONNAIRE
which it has completed and delivered to HHI at or before
the execution of this Agreement.
5.6. Unimedia understands and agrees that the
certificate representing the shares of Common Stock sold to
it pursuant to this Agreement may bear a restrictive legend
indicating that the shares so represented have not been
registered under the Act and may not be sold in the absence
of such registration or an exemption therefrom, and that
HHI may instruct its transfer agent to place "stop
transfer" against those shares.
5.7. Except as stipulated in Article III above,
Unimedia understands and agrees that HHI is not under any
obligation to register the shares sold pursuant to this
<PAGE>
Agreement under the Act, or any state "blue sky" law, so
called.
6. Governing Law
This Agreement shall be construed in accordance with the
laws of the State of California applicable to contracts
made and to be performed in that State, except where the
law of some other jurisdiction mandatorily applies.
7. Non-Assignability
This Agreement, and the rights and duties set forth
therein, may not be assigned in whole or in part by either
party hereto, provided, however, that HHI may assign the
funds to be received pursuant to this Agreement to its
subsidiaries.
8. Integration
This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof.
9. Counterparts
This Agreement may be signed in any number of counterparts,
each of which shall be an original, but all of which shall
constitute but one and the same instrument.
10. Notices
All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall
be in writing and shall be deemed given to the party to whom
addressed (i) when delivered personally to such party, (ii)
on the business day after being sent to such party by
overnight courier or overnight mail, charges prepaid, or by
facsimile transmission, charge prepaid or chargeable to the
transmitting party, confirmed by the sending apparatus,
(iii) on the next business day after being sent to such
party by telegraph, telex or cable, toll prepaid, or (iv)
three business days after being sent to such party
registered or certified first class mail, or the equivalent
(return receipt requested or equivalent serviced, postage
<PAGE>
prepaid) (provided that if such mailed material shall bear
and address other than the country in which it is deposited
in the mail, then it shall be sent by registered or
certified first class air mail, provided that this
requirement shall not apply to mail bearing an address in,
and origination from, Canada, the United States of America
or the Republic of Mexico, in each case addressed to the
other parties to this Agreement at the address of such set
forth in the PROSPECTIVE INVESTOR QUESTIONNAIRE or at such
other address as may be set forth in a written notice given
in conformity with this Section 10.
11. Captions
Title or captions of sections contained in this Agreement
are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision
thereof.
12. Gender and Number
Terms in the masculine shall include the feminine and
neuter, and terms in the singular shall include the plural.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed in their respective company names by their
respective company officers thereunder duly authorized, all
as of the date first above written.
HARMONY HOLDING, INC.
by: /s/ Harvey Bibicoff
------------------------
its Chairman and Chief
Executive Officer
UNIMEDIA, SA
by: /s/ Gilles Assouline
------------------------
its Chairman, Chief
Executive Officer and
President Du Directoire
