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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: August 16, 1996
Harmony Holdings, Inc.
(Exact name of registrant as specified in charter)
Delaware 0-19577 95-4333235
(State of other (Commission file number) (IRS employer
jurisdiction of identification
incorporation) number)
1990 Westwood Boulevard, Suite 310, Los Angeles, California 90025
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (310) 446-7700
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ITEM 5. OTHER EVENTS
Pursuant to a Stock Subscription Agreement entered into in July 1996,
Registrant sold to Unimedia, S.A., a French company ("Unimedia"), 1,000,000
shares of Common Stock of Registrant at a purchase price of $2.00 per share. A
copy of that Agreement is attached to this Current Report as Exhibit A. The
purchase price was received by Registrant on August 16, 1996, and the
certificates representing such shares were issued in the name of Unimedia on
August 20, 1996. The shares were not included in an effective Registration
Statement under the Securities Act of 1933, as amended ("the "Act"), but were
issued pursuant to the exemption set forth in S4(2) of the Act and the Rules and
Regulations issued thereunder by the Commission.
An agreement was entered into by Unimedia, Registrant and Harvey Bibicoff,
Chairman of the Board of Registrant, which contemplated an agreement between
Registrant and the holders of all the ordinary shares of Unimedia issued and
outstanding in exchange for the issue and delivery to such holders of 10,000,000
shares of Preferred Stock, and 10,000,000 shares of Common Stock, of Registrant.
If such transaction take place, such holders will own approximately 70% of all
the authorized shares of capital stock of Registrant. A copy of that agreement
is attached hereto as Exhibit B. Since an agreement with such holders has not
been executed and the transaction has not taken place, Registrant is not filing
herewith financial statements of Unimedia or pro forma financial information
which is referred to in the instructions for Item 2. of Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
Exhibit A. - Stock subscription Agreement between Registrant and Unimedia
Exhibit B. - Agreement among Registrant, its Chairman of the Board and
Unimedia
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Harmony Holdings, Inc.
Registrant
Date: August 16, 1996 By: /s/Brian Rackohn
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Brian Rackohn, CFO
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HARMONY
HOLDINGS, INC.
SUBSCRIPTION AGREEMENT
----------------------
This STOCK SUBSCRIPTION AGREEMENT
(hereinafter sometimes referred to as the Agreement) is
made and entered into this th 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 One Million (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 One Million (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 hereby agree,
upon the terms and conditions hereinafter set forth as follows:
Exhibit A
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1. SALE AND PURCHASE
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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 pf Two Million ($2,000,000)
Dollars.
2. PAYMENT AND ISSUE
-----------------
2.1 Pursuant to section 2.3 below, Unimedia will pay to HHI in funds
immediately realizable in Los Angeles, California, the sum of Two Million
($2,000,000) Dollars.
2.2 Upon receipt of the funds required by subsection 2.1 of this Section,
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 10 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.
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
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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
subsection 4.1 of this Section 4 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, full paid
and non-assessable. These shares of Common Stock are of the same class as all
other shares of Common Stock issues and outstanding. The officer or officers
who signatures appear on such certificates have been duly authorized to execute
certificates representing shares of Common Stock, notwithstanding that 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
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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 section 3 above, Unimedia understands and
agrees that HHI is not under any obligation to register the shares sold pursuant
to this Agreement under the Act, or any state "blue sky" law, so called.
6. GOVERNING LAW
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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
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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
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This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof.
9. COUNTERPARTS
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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
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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)
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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 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 originating 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
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Titles 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
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Terms in the masculine shall include the feminine and neuter, and terms in the
singular shall include the plural.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
their respective company names by their respective company officers thereunto
duly authorized, all as of the date first above written.
HARMONY HOLDINGS, INC.
By: /s/ Harvey Bibicoff
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Its Chairman and CEO
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UNIMEDIA, S.A.
By: /s/ Gilles Asouline
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Its Chairman and CEO
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President du Directoire
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Agreement
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AMONG
HARMONY HOLDINGS, INC.
HARVEY BIBICOFF and
UNIMEDIA SA
Dates July 27, 1996
(as of July 22, 1996)
Exhibit B
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This Agreement is made with reference to the following:
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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.
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:
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1. Sale and purchase agreement
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The parties hereto agree to negotiate and execute in good faith before September
30th, 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 purchases on the following
basis: 100% of the outstanding UNIMEDIA shares is equal to 20.000.000
HHI Common Stock and Preferred Stock shares;
- the parties will agree prior to the execution of the sale and purchase
agreement, the law that will govern and construe such agreement;
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- 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);
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
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- - 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 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.
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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 this
agreement.
3. Representations and warranties of HHI
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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, 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 present 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 reserved
against in the 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, paragraph 2, 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
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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
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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, non disclosed, absolute, accrued, contingent or otherwise) which
will cause them to do so;
- - 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 shares 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.
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 9/30/96.
7. Governing Law
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This Agreement shall be construed in accordance with the Laws of France and the
"Tribunal de Commerce" de Paris will be competent.
/s/ Harvey Bibicoff /s/ Guilles Assouline
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HARVEY BIBICOFF UNIMEDIA
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/s/ Harvey Bibicoff
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HARMONY HOLDINGS, INCORPORATION
