ASSET PURCHASE AGREEMENT
This Agreement is dated this 14th day of July, 1998, by and between
Odyssey Pictures Corporation, a Nevada corporation ("Odyssey" or "Purchaser")
and KimonMediaright Kommanditbolag, a Swedish limited partnership ("Kimon" or
"Seller"), and is hereinafter referred to as the "Agreement".
I
RECITALS
A. The Board of Directors of Odyssey has approved the purchase of the
film and video business run by Kimon as contained and described more fully in
Exhibit "A" hereto (incorporated herein by this reference). The transfer of the
Kimon contract with Hallmark Entertainment must be approved by Hallmark
Entertainment before this transaction will be complete and binding.
B. Seller and Purchaser have reviewed this Agreement and any documents
delivered pursuant hereto and have taken such additional steps and reviewed such
additional documents and information as deemed necessary to make an informed
decision to sell the assets/business above.
C. Each of the parties hereto desires to make certain representations,
warranties and agreements in connection herewith and also to describe certain
conditions hereto.
II
AGREEMENT
Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Purchase Price and Terms: The purchase price of this transaction is
four million five hundred thousand dollars ($4,500,000.00) payable as follows:
Seller will receive four million five hundred thousand (4,500,000)
shares of subordinated convertible preferred shares, Series B, in Purchaser,
having a par value of $.10 per share as required by Odyssey's Certificate of
Incorporation, but having a value of $1.00 per share for purposes of conversion.
Seller shall be able to convert the convertible preferred shares into common
stock in Purchaser between June 30, 2000 and December 31, 2000, on the date the
conversion notice is received by Purchaser by facsimile, telegram, personal
delivery, overnight mail or other transmission. The conversion shall take place
on a dollar-for-dollar basis at the average closing ask price for the twenty
(20) trading days prior to conversion. The conversion notice shall be signed by
a duly authorized officer of Seller. If the conversion takes place in December
of the year 2000, Kimon will receive an extra ten percent premium in the number
of common shares it receives in the conversion. Conversion maybe segmented or
all-at-once at Seller's option.
The convertible preferred shares shall be issued in the name of
KimonMediaright Kommanditbolag. All sums calculated herein are in United States
currency. All securities certificates shall be delivered on the Closing Date
herein.
2. Assets Purchased. The assets purchased hereby are contained within
Exhibit "A" to this agreement, which exhibit is incorporated herein by this
reference. Title to the assets so purchased shall be transferred from Seller to
Purchaser on the date of closing of this transaction.
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3. Private Placement of Restricted Securities: The parties hereto
understand and agree that the Odyssey securities purchased hereby are not being
offered or sold pursuant to a registration statement under applicable federal
and state securities law. There is currently no public market for the securities
being transferred hereby and there can be no guarantee from or promise of
Odyssey, except as provided in this Agreement, that any such public market will
ever develop in the stock of Odyssey. The Odyssey stock being transferred hereby
is restricted stock and cannot be re-sold without registration under applicable
securities law or pursuant to an exemption from such registration. Therefore,
Seller must bear the economic risk of an investment in Odyssey for an indefinite
period of time.
a. Until (and if) registered under applicable securities laws,
the following legend will be placed on the Odyssey shares certificate(s) issued
hereby:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT"). THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE PURCHASER'S
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER'S COUNSEL, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
THE RIGHT OF THE HOLDER HEREOF TO EFFECT THE PUBLIC SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE LIMITED BY A CERTAIN
AGREEMENT DATED JUNE 30, 1998 BETWEEN THE ISSUER CORPORATION AND THE ORIGINAL
PURCHASER. SAID AGREEMENT IS AVAILABLE FOR INSPECTION IN THE OFFICES OF THE
ISSUER CORPORATION.
b. Seller represents and warrants that it is an "accredited
investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Act and/or is sophisticated as that term is used within Rule 506 of
Regulation D and is capable of evaluating the merits and risks of investment in
Odyssey securities. Seller is aware that Rule 144 under the Act, to the extent
relevant, permits public sale of restricted securities only upon the
satisfaction of the conditions of the availability of such rule.
c. Seller understands that Odyssey is the only entity which
may register the shares purchased hereby for public sale and that Odyssey has no
legal obligation to register such shares except as set forth in the Registration
Rights Agreements, a copy of which is attached hereto as Exhibit "B", and which
the parties hereto shall execute on the Closing Date concurrently herewith.
4. Financial Statements: Odyssey agrees to supply to Seller its 1996
Annual Report. It will further supply its 1997 10-K and its unaudited financial
statements for the calendar quarter preceding the effective date of this
Agreement as soon as they are completed.
5. Effective Date: This Agreement shall be effective immediately upon
its execution by all parties hereto.
6. Closing Date: The closing date of this Agreement shall be when the
parties have received notice from Hallmark Entertainment of the assignment of
its agreement with Kimon to Odyssey. Purchaser may cancel this Agreement if such
notice has not been received by August 15, 1998.
7. Preference. The convertible preferred shares to be issued to Seller
hereunder, designated as Preferred Stock, Series B, shall have a preference on
liquidation equal to $1.00 per share, subordinate however to the liquidation
preference of the Preferred Stock, Series A, of Odyssey (in an amount not to
exceed $500,000.00 plus accruals per the terms of the Series A Preferred Shares,
which terms shall not be modified after the date of this Agreement), but senior
to all other classes of preferred stock which may hereafter be issued by Odyssey
and senior in all cases to Odyssey's common stock.
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8. Other Provisions. Odyssey represents and warrants that pursuant to
Rule 144 of the SEC (as presently written) the common shares Seller receives if
and when it converts its preferred shares (received as the purchase price for
this transaction) shall be immediately free trading and unrestricted (subject to
Rule 144 as it would apply to affiliates as applicable), except to the extent of
any agreement with an underwriter or governmental authority that may be in
place, and as reasonably agreed to in advance by Seller (in the case of
underwriter or other non-governmental restrictions).
Odyssey represents and warrants that it will take all reasonable steps
to assist Seller in providing information or consulting services related to
encumbrance of the preferred shares owned by Seller
It is understood and agreed by the parties that this entire agreement
is contingent upon Hallmark Entertainment's reasonable and timely approval (on
or before the closing date hereof) of the transfer of the Kimon/Hallmark
agreement to Purchaser. It is also agreed that Seller will provide financial
statements of Kimon for the 12-month period ending June 30, 1998, or, to the
extent permitted by the SEC, audited financial statements for such period
relating only to the assets being purchased hereunder and the direct operating
expenses thereof. Such statements shall be available as soon as is reasonably
practical.
III.
BUSINESS PLAN
1. Management and Services Agreement: A jointly prepared Management and
Services Agreement in substantially the same form as attached hereto as Exhibit
"C" shall be executed by the parties as soon as is practical, and shall, at that
time, replace the current Exhibit "C" and is incorporated herein at that time by
this reference.
2. Rights to Kimon name: From the closing date through December 31,
1998, Purchaser shall have a royalty-free, non-exclusive license for the use of
the name "Kimon." Said license is non-transferable and cannot be encumbered in
any manner. Violation of this paragraph is ground for immediate revocation of
the license by Seller. Purchaser has the option to purchase the name "Kimon" on
or before December 31, 1998. The purchase price of the name shall be $250,000.00
(U.S.), payable on December 31, 1998 or within three business days of the date
notice of exercise of the option is received by Kimon, whichever date comes
first.
3. Publicity. The parties hereto shall jointly (and reasonably) prepare
any publicity or press release related to this Agreement.
4. Confidentiality. The provisions of this Agreement are confidential
and private and not to be disclosed to outside parties without the express,
advance consent of all parties hereto or by order of a court of competent
jurisdiction. Aggrieved parties may xxx for money damages related to a breach of
this paragraph.
5. Internet Joint Venture. The parties shall continue to discuss in
good faith the possibility of a joint venture Internet business.
6. Kimon Audit. Kimon hereby discloses that the Kimon limited partners
are currently undergoing an audit related to Kimon by the Swedish Tax
Government.
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IV.
FURTHER REPRESENTATIONS AND WARRANTIES
1. Odyssey makes the following representations and warranties to
Seller:
a. Odyssey has examined and reviewed this Agreement and any
documents delivered pursuant hereto and has taken such additional steps and
reviewed such additional documents and matters as Odyssey has deemed necessary.
b. That Odyssey is a business corporation in the process of
renewing its good standing in the state of Nevada. Odyssey represents and
warrants that it will complete or diligently pursue this procedure on or before
the closing date of this agreement.
c. Odyssey is authorized to issue up to 40,000,000 shares of
common stock at a par value of $.01 per share. A total of approximately
5,169,285 common shares are presently outstanding. Odyssey is authorized to
issue up to 10,000,000 shares of Preferred Stock at a par value of $.10 per
share in one or more series as the Board of Directors of the Company may
determine. Currently, there are 500,000 shares of Preferred Stock, Series A,
outstanding (plus accruals thereunder of an additional 25,000 shares as of the
date hereof). Pursuant to this Agreement, there will be 4,500,000 shares of
Preferred Stock, Series B, outstanding on the Closing of this Agreement. There
are no other classes of Preferred Stock presently outstanding.
d. The Odyssey Board of Directors has the authority to bind
Odyssey to this Agreement and to authorize its President and Secretary to
execute same.
e. Odyssey, its Directors, Officers and Agents, are aware of
no government consent required to effectuate this Agreement and are further
aware of no conflict of this Agreement with an order of any court or other
tribunal or other agreements of Odyssey with third parties or any default in any
such orders or agreements with third parties that would conflict with this
Agreement.
f. That all information requested by Seller relative to this
Agreement has been provided in good faith by Odyssey and is complete and
accurate to the best of Odyssey's knowledge.
g. That Odyssey owns no operating subsidiaries.
h. That Odyssey has a total of 2,622,093 stock options and
warrants outstanding or issued at an exercise price ranging from $.625 to $18.96
(copies of which have all been made available to Seller as part of the due
diligence disclosure of Purchaser prior to closing), and there are no other
ownership rights or ownership encumbrances of any nature not disclosed prior to
the close of this transaction to Seller.
i. That the financial statements to be provided by Odyssey per
paragraph II 3. above will be complete and accurate to the best of Odyssey's
knowledge and will not materially deviate from a subsequent audit of the same
period.
j. From the time of the first discussions between the parties
relative to the subject matter of this Agreement up to the Closing Date, except
as specifically disclosed herein, there have not been, and shall not be, any
transactions by Odyssey other than those in the ordinary course of business
except for a convertible note financing transaction with the Augustine Fund,
L.P. in the amount of $150,000 (as more fully disclosed by Purchaser in the due
diligence process herewith, prior to closing).
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k. That up through the Closing Date hereof, there are no
undisclosed liabilities or known pending events that would have a materially
detrimental effect on the operational or financial condition of Odyssey, except
as are disclosed to Seller in the due diligence process prior to closing.
l. That the Odyssey shares being acquired by Seller herein
have not been registered under the Securities Act of 1933, as amended, or under
any other federal or state securities laws and are being offered and sold
pursuant to an exemption from such registration.
m. That Odyssey has had the opportunity to ask questions of
and receive answers from Kimon, its Directors, Officers and Agents concerning
this Agreement, Kimon's current financial and operational status and has had all
such questions asked, if any, responded to their satisfaction.
n. Odyssey understands that prior to the Closing Date hereof,
Seller will furnish them with any additional information they desire, to the
extent Kimon possesses such information or can acquire it without unreasonable
expense or effort, necessary to verify any information provided by Kimon at
Odyssey's request.
o. That all information provided by Odyssey to Seller has been
supplied in good faith and is complete and accurate to the best of Odyssey's
knowledge.
p. That Odyssey is not a party to any litigation or regulatory
action or governmental action against or involving it or any other contested
matter in any forum or jurisdiction and does not currently expect to be party to
any such litigation or regulatory action or governmental action or contested
matter against or involving it not disclosed to Seller prior to the close of
this transaction.
q. That the shares issued as consideration for this
transaction will be legal issued, fully paid and non-assessable with no personal
liability attaching thereto.
r. That Odyssey is in the process of or will file all tax
reports and returns required to be filed and will pay all taxes and other
charges due or claimed to be owed by all taxing authorities.
s. That Odyssey has good and marketable title to all its
assets, real and personal, tangible and intangible, including without limitation
all assets and properties included within its financial statements. None of
these assets and properties are subject to any mortgage, lien, pledge,
conditional sale, encumbrance or other charge whatsoever except as disclosed to
Seller and Kimon prior to the close of this transaction. No petition in
bankruptcy has been filed by or against Odyssey nor has any assignment been made
for the benefit of creditors, nor is Odyssey aware of any information that may
lead to any of the above events not disclosed to Seller prior to the close of
this transaction.
t. That Odyssey is not in or about to be in default or in or
about to be in arrears on any material Odyssey transaction or obligation except
as disclosed to Seller prior to the close of this transaction.
u. That Odyssey, its management, employees and agents have not
employed any device, scheme or artifice to defraud or engaged in any act,
practice or course of business which operates or would operate as a fraud or
deceit upon any person or entity in connection with its normal course of
business, the sale of its securities or with respect to the provisions of this
Agreement.
2. Kimon makes the following and further representations and warranties
to Odyssey herein:
86
a. Kimon has examined and reviewed this Agreement and any
documents delivered hereto and have taken such additional steps and reviewed
such additional documents and matters as they have deemed necessary.
b. That Kimon is a limited partnership in good standing in
Sweden.
c. That Kimon has the authority to bind itself to this
Agreement.
d. That Kimon is aware of no governmental consent required to
effectuate this Agreement and further that there are no conflicts between this
Agreement with an order of any court or other tribunal or other agreements
between or among Kimon and/or any other third parties. Kimon is further not
aware of any default in any order or agreement between or among Kimon and/or any
third parties.
e. That Kimon owns no subsidiaries except those disclosed in
its financial reports and statements.
f. That Kimon has no partnership interest options or warrants
outstanding or issued, and there are no other ownership rights or ownership
encumbrances of any nature whatsoever pledged, outstanding or issued in or by
Kimon and/or Seller except the Kimon partnership interests owned by Seller.
g. From the time of the first discussions between the parties
relative to the subject matter of this Agreement up to the Closing Date, except
as specifically disclosed herein, there have not been, and shall not be, any
transactions by Kimon other than those in the ordinary course of business.
h. That up through the Closing Date hereof, there are no
undisclosed liabilities or known pending events that would have a materially
detrimental effect on the operational or financial condition of Kimon.
i. That Kimon has had the opportunity to ask questions of and
receive answers from Odyssey, its Directors, Officers and Agents, concerning
this Agreement, Odyssey's current financial and operational status and Odyssey's
proposed plans and operations, and have had all such questions asked, if any,
responded to their satisfaction.
j. That all information provided by Kimon to Odyssey hereunder
has been supplied in good faith and is complete and accurate to the best of
Kimon's knowledge.
k. That Kimon is not a party to any litigation or regulatory
action or governmental action against or involving it or any other contested
matter in any forum or jurisdiction and does not currently expect to be party to
any such litigation or regulatory action or governmental action or contested
matter against or involving it not disclosed to Purchaser prior to the close of
this transaction.
l. That Kimon has duly filed all tax reports and returns
required to be filed thereby and have duly paid all taxes and other charges due
or claimed to be owed by all taxing authorities.
m. That Kimon has good and marketable title to all its assets,
real and personal, tangible and intangible, including without limitation all
assets and properties included within its financial statements. None of these
assets and properties are subject to any mortgage, lien, pledge, conditional
sale, encumbrance or other charge whatsoever. No petition in bankruptcy has been
filed by or against Kimon nor has any assignment been made for the benefit of
creditors, nor is Kimon aware of any information that may lead to any of the
above events. It is understood and agreed by the parties that this entire
agreement is contingent upon Hallmark Entertainment's reasonable and timely
approval of the transfer of the Kimon/Hallmark agreement to Purchaser.
87
n. That Kimon is not in or about to be in default or in or
about to be in arrears on any material Kimon transaction or obligation except as
disclosed to Purchaser prior to the close of this transaction.
o. That Kimon, its management, employees and agents have not
employed any device, scheme or artifice to defraud or engaged in any act,
practice or course of business which operates or would operate as a fraud or
deceit upon any person or entity in connection with its normal course of
business, the sale of its securities or with respect to the provisions of this
Agreement.
3. Survival of Warranties and Representations: The parties hereto agree
that all warranties and representations of the parties survive the closing of
this transaction.
V
MISCELLANEOUS PROVISIONS
1. Expenses: Each party shall bear its respective costs, fees and
expenses associated with the entering into or carrying out its obligations under
this Agreement.
2. Indemnification: Any party, when an offending party, agrees to
indemnify and hold harmless the other non-offending parties from any claim of
damage of any party or non-party arising out of any act or omission of the
offending party arising from this Agreement.
3. Notices: All notices required or permitted hereunder shall be in
writing and shall be deemed given and received when delivered in person or sent
by confirmed facsimile, or ten (10) business days after being deposited in the
United States mail, postage prepaid, return receipt requested, addressed to the
applicable party as the address as follows:
Purchaser: Odyssey Pictures Corporation, 0000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000
With a copy to: Xxxxxx X. Xxxxxx, Esq., 000 Xxxxxxx Xxx., 00xx Xxxxx,
Xxx Xxxx, XX 00000
--------------
Seller: KimonMediaright Kommanditbolag, Danderyd Campus, Xxxxx Centrum,
182 31 Danderyd, Sweden
With a copy to: Xxxxx X. Xxxxx, Esq., 00000 X. Xxxxxxx Xxxx., Xxxxx 0000,
Xxx Xxxxxxx, XX 00000
--------------
4. Breach: In the event of a breach of this Agreement, ten (10) days
written notice (from the date of receipt of the notice) shall be given. Upon
notice so given, if the breach is not so corrected, the non-breaching party may
take appropriate legal action per the terms of this Agreement.
5. Assignment: This Agreement is assignable only with the written
permission of all concerned parties.
6. Amendment: This Agreement is the full and complete, integrated
agreement of the parties, merging and superseding all previous written and/or
oral agreements and representations between and among the parties, and is
amendable in writing upon the agreement of all concerned parties. All
attachments hereto are deemed to be a part hereof.
7. Interpretation: This Agreement shall be interpreted as if jointly
drafted by the parties. It shall be governed by the laws of the State of
California and the United States applicable to contracts made to be performed
entirely therein.
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8. Enforcement: If a lawsuit is filed to enforce or interpret the terms
of this Agreement, the United States District, Central District of California,
located in Los Angeles, California shall have jurisdiction and be the proper
place of venue. The prevailing party in any such lawsuit shall be entitled to
its reasonable attorney's fee and costs. Any judgment of said court shall be
enforceable any where in the world. If a portion of this Agreement is declared
invalid or void by competent court order, the remainder of this Agreement shall
remain in force to greatest degree practical.
9. Counterparts: This Agreement may be executed in counterparts each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement. Facsimile signatures shall be considered as valid and
binding as original signatures.
10. Board Approval: Authorizing resolutions of Odyssey and Kimon are
attached hereto as exhibits "D" and "E", respectively.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first written above.
PURCHASER:
Odyssey Pictures Corporation
---------------------------
Its President
ATTEST:
-------------------------
Its Secretary
SELLER:
KimonMediaright Kommanditbolag
Svenska Kimon Aktiebolag, General Partner
--------------------------
__________________ of the General Partner
ATTEST:
-------------------------
its:______________________
89
Exhibit A -Purchased Assets
1 Cash and Bank SEK 17 095
2 Prepaid Expenses and Accrued Income SEK 1 005 572
3 Other Short Term Receivables SEK 291 146
4 Valuation Key SEK 2 000 000
5 Hallmark SEK 16 000 000
6 Video and TV Scandinavia SEK 2 108 550
7 Movie Rights SEK 14 764 750
Comments
Prepaid Expenses and Accrued Income
The whole amount is income from the two distributors Svenska Kimon AB and
Norska Kimon A/S.
Other Short Term Receivables
This amount is mostly a net amount on claims and debts to Kimon Inc.,
Norska Kimon A/S, Svenska Kimon AB and Stockwood AB, which all are related. The
only "outside" claim is a small VAT claim for SEK 6 438.
Copyright to Valuation Key
This is a system to access a value on film rights based upon several
variables.
Hallmark Entertainment
See enclosed contract.
Film Rights
Number six and seven are combined in the enclosed list of Kimon Mediaright
Film Library.
EXHIBIT "B"
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Agreement is dated this 14th day of July, 1998 and is by and
between Odyssey Pictures Corporation, a ___________ corporation, (the "issuer")
and KimonMediaright Kommanditbolag a Swedish limited partnership (the
"purchaser") and assigns, and is hereinafter referred to as the "Agreement."
I
RECITALS
A. Purchaser has acquired 4,500,000 shares of preferred stock of issuer
upon the terms and conditions of the Purchase and Sale Agreement to which this
Agreement is an exhibit.
B. This Agreement provides for purchaser to be granted registration
rights of the Registrable Securities on the terms and conditions as provided
below.
C. This Agreement is supported by good and valuable consideration, the
receipt and sufficiency of which is acknowledged by issuer.
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II
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meaning:
"Act" means the Securities Act of 1933, as amended.
"Affiliate" means an "affiliate" as that term is used in Rule
405 under the act.
"Holder" means the purchaser and any other owner of
Registrable Securities by transfer or assignment for purchaser or another
holder.
"Registrable Securities" means the issuer's shares and any
additional shares that the purchaser or assignee of purchaser may be entitled to
under any separate agreement with the issuer. This term does not include
securities which are freely sold to the public in the United States without
registration under the Act (including Rule 144(k) securities).
"SEC" means the Securities and Exchange Commission.
III
REGISTRATION AGREEMENT
1. Piggy-Back Registration. After conversion of the preferred shares in
Issuer by purchaser, if, at any time, and prior to sixty months thereafter,
issuer proposes to file a registration statement under the Act with respect to
any class of security (other than within a Form S-4 or S-8 or any form
substituting therefor, or any exchange offer or offer strictly to the issuer's
existing security holders, or securities issued pursuant to option plans of
officers and directors or employees of the issuer) then the issuer shall give
written notice of such proposed filing to the Holder(s) at least thirty days
before the anticipated filing date, and such notice shall offer each Holder the
opportunity to register such Registrable Securities as such Holder may request
(the "Piggy-Back Registration"). The issuer, if requested by the Holder(s) shall
use its best efforts to cause the underwriters to permit Holders to participate
therein on the same terms and conditions as any other selling holder or the
issuer, and anything less than that shall only be upon written notice and
substantial justification as supplied by the managing underwriter on a timely
basis to Holder(s).
2. Hold Back Agreements. Holder(s) agree, in the case of an
underwritten public offering of issuer, and to the extent not in violation of
any law, not to sell any Registrable Securities during the period of time five
days before until twenty days after the effective date of any such underwritten
public offering of the issuer, unless such sale is pre-approved in writing by
the issuer. The issuer similarly agrees not to sell or distribute any of its
securities in any offering other than the underwritten public offering of the
issuer as aforesaid during the same period of time (five days before to twenty
days after), except for sales under Forms S-4 and S-8. Issuer, upon a showing of
good and just cause, shall have the right to withdraw any registration initiated
by issuer under this agreement prior to the effective date of such registration
statement.
3. Equal Treatment. With respect to any registration statement filed
pursuant to this Agreement, the Holder(s) in no event shall be treated
differently than any other selling security holders in connection with any
requirement by an underwriter and/or the issuer.
4. Legend. The certificates of the Registrable Securities shall contain
a legend notifying the holder that rights to sell the security are restricted by
this Agreement and state where a copy of this Agreement may be inspected or
obtained.
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5. Registration Procedures. Upon commencement of a registration of
securities subject to this agreement, the issuer shall use its best efforts to
cause the registration to become effective as quickly as is practical. The
issuer shall furnish Holder(s) copies of all registration statements,
prospectus', amendments and exhibits as filed with the SEC, as well as with any
state jurisdiction. The issuer will use its best efforts to "Blue Sky" the
Registrable Securities in such jurisdictions as the Holder(s) reasonably
request(s) and to be approved by any other authority reasonably necessary under
the circumstances. The issuer shall immediately notify Holder(s) of the delivery
of any prospectus related to the Registrable Securities, and the happening or
omitting of any material event or fact that would make any representation in the
prospectus or any registration statement false or misleading in a material way.
The issuer covenants and agrees to immediately amend any such prospectus or
registration statement to make the statements therein comply with all applicable
law. The issuer covenants and agrees to enter into or take such actions as are
usual and accustomed in the facilitation of the disposition of the Registrable
Securities. The issuer shall make available for inspection, upon reasonable
advance notice and during regular business hours, to any Holder(s) or qualified
representative thereof, any information and material contained or alluded to
within any prospectus or registration statement regarding the Registrable
Securities. The issuer will use its best efforts to obtain opinions of counsel
and accountants normally associated with a public registration of securities of
this nature and otherwise use its best efforts to comply with applicable law and
regulations regarding the sale of securities under the Act. The issuer may
require Holder(s) to supply information as is reasonably and normally necessary
to effectuate the registration and sale of the Registrable Securities. The
Holder(s) agrees to comply with all applicable laws and regulations in the
transfer of the Registrable Securities.
6. Registration Expenses. Any and all expenses of the issuer in
complying with the terms of this Agreement shall be borne exclusively by the
issuer. All underwriting discounts, selling commissions and fees of Holder(s)'
counsel shall be borne by Holder(s).
7. Survival of Warranties and Representations: The parties hereto agree
that all warranties and representations of the parties survive the closing of
this transaction.
8. Indemnification: Any party, when an offending party, agrees to
indemnify and hold harmless the other non-offending parties from any claim of
damage of any party or non-party arising out of any act or omission of the
offending party arising from this Agreement.
9. Notices: All notices required or permitted hereunder shall be in
writing and shall be deemed given and received when delivered in person or sent
by confirmed facsimile, or ten (10) business days after being deposited in the
United States mail, postage prepaid, return receipt requested, addressed to the
applicable party as the address as follows:
Issuer: Odyssey Pictures Corporation, 0000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000
With a copy to: Xxxxxx X. Xxxxxx, Esq., 000 Xxxxxxx Xxx., 00xx Xxxxx,
Xxx Xxxx, XX 00000
--------------
Purchaser: KimonMediaright Kommanditbolag, Danderyd Campus, Xxxxx Centrum,
182 31 Danderyd, Sweden
With a copy to: Xxxxx X. Xxxxx, Esq., 00000 X. Xxxxxxx Xxxx., Xxxxx 0000,
Xxx Xxxxxxx, XX 00000
--------------
10. Breach: In the event of a breach of this Agreement, ten (10) days
written notice (from the date of receipt of the notice) shall be given. Upon
notice so given, if the breach is not so corrected, the non-breaching party may
take appropriate legal action per the terms of this Agreement.
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11. Assignment: This Agreement is assignable by purchaser.
12. Amendment: This Agreement is the full and complete, integrated
agreement of the parties, merging and superseding all previous written and/or
oral agreements and representations between and among the parties, and is
amendable in writing upon the agreement of all concerned parties. All
attachments hereto are deemed to be a part hereof.
13. Interpretation: This Agreement shall be interpreted as if jointly
drafted by the parties. It shall be governed by the laws of the State of Nevada
and the United States applicable to contracts made to be performed entirely
therein.
14. Enforcement: If a lawsuit is filed to enforce or interpret the
terms of this Agreement, the United States District located in Los Vegas, Nevada
shall have jurisdiction and be the proper place of venue. The prevailing party
in any such lawsuit shall be entitled to its reasonable attorney's fee and
costs. Any judgment of said court shall be enforceable any where in the world.
If a portion of this Agreement is declared invalid or void by competent court
order, the remainder of this Agreement shall remain in force to greatest degree
practical.
15. Counterparts: This Agreement may be executed in counterparts each
of which shall be deemed an original and all of which together shall constitute
one and the same agreement. Facsimile signatures shall be considered as valid
and binding as original signatures.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first written above.
ISSUER:
Odyssey Pictures Corporation
---------------------------
Its President
ATTEST:
-------------------------
Its Secretary
PURCHASER:
KimonMediaright Kommanditbolag
________________________, General Partner
--------------------------
__________________ of the General Partner
ATTEST:
-------------------------
its:______________________
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Exhibit C
Management and Service Agreement
This Agreement is made the 14th day of June 0000
Xxxxxxx
Xxxxxxx Xxxxx Xxxxxxxxxxxx XX, a company organized and existing under the
laws of Sweden and having its registered office at Danderyd Campus, Xxxxx
centrum, 18231 Danderyd, Sweden (hereinafter referred to as "Kimon").
And
Odyssey Pictures Corporation, a company organized and existing under the
laws of Sweden and having its registered office at 0000 Xxxxxxx Xxxx Xxxx, Xxxxx
0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "Odyssey")
And
Tore Jorkjend.
Whereas:
oOdyssey has a continuing need for advice and assistance in the areas of general
and financial management.
oKimon is staffed with experienced personnel who is able to provide those
services to Odyssey by drawing on its own resources as well as on those
available from other companies in the organization or from third parties.
oKimon is willing to render to Odyssey and Odyssey desires to use such services.
PREAMBLE
Business Plan Kimon
1. Overview of the Kimon Organization.
This business plan describes the operations and development of the present
sales activities of the Kimon organization.
It is assumed that Stockholm xxxxx b e the head office for the Nordic
operations, but also for any future development of the sales to the video- and
TV markets.
The organization of the operative office in Stockholm will be depending and
relying on the decisions made by the Group Management Team (GMT), but initially
a sales manager and a general administrative assistant will be sufficient.
Tore Jorkjend of Kimon Norge AS has a separate Agreement that concerns the
Hallmark Agreement and will be responsible to develop the Hallmark Agreement as
expressed below.
The most important issue for the newly combined post acquisition group (The
Odyssey Group) is how to conduct the management tasks and the follow up of the
operative units. The GMT will consist of people from both organizations. The GMT
should meet quarterly. The main tasks could be to:
a) set the goals for the local companies
b) Evaluate, discuss and approve the business plans of the local sales
companies
c) Identify new business, new markets and new products for the Group.
d) Support and act as speaking partner for the local management
e) Receive all reports from the operative units
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A third party as described in this Agreement will perform the actual sales
work. All sales figures are identified as royalty income for Odyssey, The costs
for achieving these sales figures will be expressed below. The charge will be
calculated separately for the Hallmark films due to the separate Agreement
concerning these films.
The net profit for Odyssey will consequently be computed as the Net Royalty
Income after the Charged Costs and the Hallmark Fee, expressed and accepted in
this Agreement.
2. Goals
Preliminary goals for the sales organization in Stockholm can be divided
between the video market, (rental, sell through and profit split), and the
TV-markets.
Initially the key markets will be the Scandinavian, but as son as this
market has been secured and established, a wider European perspective must be
discussed in the GMT for both video and TV.
Profon-na Royalty Income, in thousands of US dollars as presented by Kimon
Video Markets
Year 1999 2000 2001 2002 2003
Hallmark 810 1.100 1.100 1.100 1.100
TV/Video Scand. 100 150 250 350 000
Xxxxx Xxxxxxx 512 291 291 291 291
Total 1.422 1.541 1.641 1.741 1.891
Proforma Costs
Year 1999 2000 2001 2002 2003
Hallmark 100 140 140 140 140
Other 250 300 300 300 300
Total 350 440 440 440 440
Now therefore, in consideration of the Premises and mutual covenants
hereinafter contained, the parties mutually agrees as follows.
1. Engagement of Kimon
Odyssey hereby engages Kimon to render services in the areas specified
below throughout the term of this Agreement.
Odyssey hereby asks Kimon to perform these services on a continuing basis
without any further specific request.
11. Services
During the term of this Agreement, subject to the terms and conditions
stated herein, Kimon will provide services in the interest of Odyssey, which
specifically are compromised of
Managerial
In the Markets defined as Kimon's;
a) advice and assistance in the production of Odyssey's business plans and
ongoing support in the implementation of such plans
b) advice and assistance in the preparation of marketing concepts and the
carrying out of marketing development projects
c) advice and assistance in the conducting of market research and analysis;
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Sales
a) Tore Jorkjend shall together with the Odyssey jointly choose the minimum
yearly amount of 25 films from Hallmark
b) development of sales operations in the Markets defined as Kimon's in order
to reach the Goals defined in the Preamble hereabove.
c) recruit and be responsible for the resources necessary to reach the
volumes defined in the Business Plan
d) develop inventory, sales and reporting systems for all necessary tracking
and account of all operations and sales activity to be delivered to odyssey
on monthly basis.
Other Services
Both parties are free to negotiate to include other services appropriate
for the Kimon organization
111. Fees
In consideration of the services to be rendered by Kimon under this Agreement,
Odyssey agrees and undertakes to pay a service fee to Kimon.
The amount of service fee is determined in accordance with the provisions set
below.
The fee Kimon charges is based on the costs specified in the Preamble
hereabove.
The fee for the Hallmark sales are related to the total Royalty Income. Up
to 4 million SEK in Royalty Income per twelve months starting July 1, 1998, the
fee is 10% on the Gross Royalty Income. If the total Royalty Income for the
Hallmark films exceeds 4 million SEK per twelve month period starting July 1,
1998, the fee will be 15% of the additional Royalty Income.
The fee covering the other services will be equal to the costs incurred.
M Payment
Kimon will xxxx Odyssey for the services provided or performed pursuant to
this Agreement on a monthly basis, or at such other frequency as the parties may
agree on. Payments will be made within the first thirty (30) days following
receipt by Odyssey of the monthly xxxx.
Kimon agrees to keep and preserve accurate records of all its transactions
relating to the services rendered pursuant to this Agreement, such records to be
open to inspection at all reasonable times by Odyssey or persons authorized by
Odyssey.
In the event of any objection by Odyssey, the matters, which are subject to
objection, will be referred to the CPA of Odyssey for resolution, which
resolution will be final and binding on the parties.
V. Records and documentation of costs.
Kimon shall establish a costing system that confirms to the requirements of
an acceptable cost accounting method. In particular Kimon shall, keep true and
accurate books and records in such detail as is necessary to identify the cost
related to rendering the services specified under section IV above.
All books and records shall be audited annually by a recognized
international independent Certified Public Accountant.
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V1. Warranty
Under this Agreement, the liability of Kimon for a material breach of the
terms of this Agreement shall be limited to cases where the other party may
prove gross negligence or wrongful intent on the part of Kimon or of any of its
employees, provided, however, that in no event Kimon shall be held liable for
any consequential damages or for any loss of profits suffered by Odyssey or by
any third party, and provided further that the amount of damages claimed in
respect of all breaches of contract that may occur during one calendar year in
regard to Odyssey owes to Kimon for the year during which Odyssey owes to Kimon
for the year during which the breach of contract has occurred.
Kimon's liability for torts committed by Kimon or its employees shall be
limited to cases where Odyssey is able to prove that Kimon or one or more of its
employees have acted with wrongful intent or gross negligence. Kimon's liability
for torts committed by outside parties which have not entered into a service
Agreement with Klmon and which Kimon has engaged to help to render the services
shall be limited to that amount of damages that Kimon can recover from the
outside party.
VII Term and termination
This Agreement shall be effective as from 14th of July 1998 and will
continue in effect until Mh
of June 2002, and thereafter for successive periods of one year until
either party gives written notice to the other, not later than June of any year,
that the Agreement will not continue beyond 30th of June, next following the
giving of the notice. Except for any obligation to pay any fixed sum of money,
which may have accrued, and be due and payable under this Agreement at the time
of termination, upon the termination of this Agreement all obligations of either
party to the other will terminate.
VIII. Assignment
No right of Kimon may be assigned, and no duty of Kimon may be delegated,
to any person or entity without the prior written consent of Odyssey.
IX. Partial invalidity
ft is intended that this Agreement will not violate any valid applicable
law of any country, -whether national or local. Therefore, if any term or
provision of this Agreement, or its application to any person or circumstance,
shall be invalid or unenforceable, the remainder of this Agreement, or its
application to any person or circumstance other than those as to whom or as to
which is invalid or unenforceable, will not be affected, and each term and
provision of this Agreement shall be enforced to the fullest extent permitted by
law.
X. Notice
Any notice under this Agreement will be deemed duly given and any
instrument will be deemed duly delivered, as to Kimon, when mailed postage
prepaid, addressed to it at the following addresses:
Svenska Kimon Forsaljnings AB, Danderyd Campus, M6rby centrum, X- 000 00
Xxxxxxxx, Xxxxxx
and, as to Odyssey, when mailed postage prepaid, addressed to it at the
following addresses:
Odyssey Pictures Corporation, 0000 Xxx Xxxxxx, Xxxxx 0000. Xxxxxx. Xxxxx
00000, XXX
or, as to either party, at such address as that party may specify from time to
time by written notice to the other party in accordance with these provisions.
These provisions will not prevent the giving of any notice or the making of any
payment in any other valid manner.
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XI. Waiver
This Agreement constitutes the entire understanding existing between the
parties with respect to the subject matter dealt with in this Agreement.
No term or provision in this Agreement may be waived, modified or altered
except by an instrument in writing properly executed by the parties.
XII. Law
This Agreement will be governed by, and construed in accordance with, the laws
of California, USA.
The parties have caused this Agreement to be executed in duplicate and sealed
by their duly authorized representatives.
Odyssey Pictures Corporation Svenska Kimon Forsaljnings AB
/s/Tore Jorkjend /s/ Svenska Kimon Forsaljnings AB
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