-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CNh/cX3Z64PDasgQDPSmYiPWo2nMjvM+FKWPZi8Q7r0yklK09A8HvrTI6QuZOWjt RPWFDicl07RIoCs7VRJUqQ== 0000950144-97-000352.txt : 19970116 0000950144-97-000352.hdr.sgml : 19970116 ACCESSION NUMBER: 0000950144-97-000352 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970115 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMAGICA ENTERTAINMENT INC CENTRAL INDEX KEY: 0000815295 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390] IRS NUMBER: 592762999 STATE OF INCORPORATION: FL FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-37968-A FILM NUMBER: 97506474 BUSINESS ADDRESS: STREET 1: P O BOX 2121 STREET 2: 1518 SW 12TH AVENUE CITY: OCALA STATE: FL ZIP: 34478 BUSINESS PHONE: 3528677861 MAIL ADDRESS: STREET 1: 1518 SW 12TH AVENUE STREET 2: PO BOX 2121 CITY: OCALA STATE: FL ZIP: 34478 FORMER COMPANY: FORMER CONFORMED NAME: RANGER INTERNATIONAL INC DATE OF NAME CHANGE: 19940524 10QSB 1 IMAGICA ENTERTAINMENT, INC. - FORM 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended NOVEMBER 30, 1996 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________TO ______________ Commission File No. 33-37968-A IMAGICA ENTERTAINMENT, INC. AND SUBSIDARY (Exact name of Registrant as specified in its charter) FLORIDA 59-2762999 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 1518 SW 12TH AVENUE, OCALA, FLORIDA 34474 (Address of principal executive offices) (352) 867-7860 Issuer's telephone number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Number of common shares outstanding as of November 30, 1996 (including the 100,000 shares of redeemable common stock) - 3,165,593. Transitional Small Business Disclosure Format: Yes ( ) No ( X ) 2 INDEX PART I - FINANCIAL INFORMATION PAGE NUMBER ----------- Item 1. Financial Statements (Unaudited): Balance Sheets 3 Statements of Operations 5 Statements of Cash Flows 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 SIGNATURE 10 -2- 3
IMAGICA ENTERTAINMENT, INC. BALANCE SHEET NOVEMBER 30, MAY 31, ASSETS 1996 1996 ------ (Unaudited) (Audited) ------------ ------------ CASH AND EQUIVALENTS 76,108 -- ADVANCES TO STOCKHOLDER 14,680 13,938 ACCOUNTS RECEIVABLE, LESS ALLOWANCE 325,250 528,048 FOR POSSIBLE LOSSES OF $24,778 & $30,611 INVENTORIES 143,971 258,625 PREPAID EXPENSES 1,984,721 68,823 - ---------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 2,544,730 869,434 - ---------------------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 694,485 871,480 OTHER ASSETS LOAN ACQUISITION 4,640 5,886 EQUIP NOT PLACED IN SERVICE YET 37,500 37,500 DEPOSITS 215,370 206,632 OTHER 6,121 15,307 - ---------------------------------------------------------------------------------------------- 263,631 265,325 - ---------------------------------------------------------------------------------------------- TOTAL ASSETS $3,502,847 $2,006,239 - ----------------------------------------------------------------------------------------------
-3- 4
IMAGICA ENTERTAINMENT, INC. BALANCE SHEET LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: NOTES PAYABLE 444,777 105,000 ACCOUNTS PAYABLE - TRADE 341,617 652,204 NOTES PAYABLE TO STOCKHOLDERS 291,407 302,225 REDEEMABLE COMMON STOCK ACCRUED LIABILITIES 490,297 520,005 CURRENT MATURITIES OF LONG-TERM DEBT 325,048 354,317 CURRENT PORTION OF OBLIGATIONS UNDER 24,644 232,329 CAPITAL LEASES - ---------------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 1,917,791 2,166,080 - ---------------------------------------------------------------------------------------------- LONG-TERM DEBT, LESS CURRENT 898,357 420,294 MATURITIES OBLIGATIONS UNDER CAPITAL LEASES, 153,665 LESS CURRENT MATURIES - ---------------------------------------------------------------------------------------------- TOTAL LIABILITIES 2,816,147 2,740,039 - ---------------------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES REDEEMABLE COMMON STOCK 100,000 100,000 STOCKHOLDERS' EQUITY COMMON STOCK, $.001 par value 2,915 1,820 Shares authorized 50,000,000 Issued 3,165,593 ADDITIONAL PAID-IN-CAPITAL 4,655,805 1,787,784 ACCUMULATED DEFICIT (3,725,741) (2,282,164) Less: Treasury stock, at cost, 97,500 shares 96,280 91,240 NOTES RECEIVABLE ARISING FROM THE EXERCISE OF STOCK OPTIONS 250,000 250,000 - ---------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 686,699 (733,800) - ---------------------------------------------------------------------------------------------- $3,502,847 $2,006,239 - ----------------------------------------------------------------------------------------------
See accompanying notes to financial statements -4- 5
IMAGICA ENTERTAINMENT, INC. STATEMENTS OF OPERATION QUARTERLY 10-QSB Three Months Ended November 30, 1996 - ----------------------------------------------------------------------------------------------------------- Three months ended Six months ended November 30, November 30, 1996 1995 1996 1995 ---------- ---------- ---------- ----------- (unaudited) (unaudited) SALES 869,099 1,398,488 1,832,935 2,775,748 COST OF SALES 721,105 1,125,190 1,414,506 2,134,279 - ----------------------------------------------------------------------------------------------------------- GROSS PROFIT 147,995 272,664 418,430 641,469 OPERATING EXPENSES 1,330,761 359,571 1,939,735 776,821 - ----------------------------------------------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS (1,182,767) (86,274) (1,521,306) (135,353) Other Income (expenses): (46,046) (45,835) (65,856) (80,248) Interest - ----------------------------------------------------------------------------------------------------------- Net Income (loss) (1,228,813) (132,109) (1,587,162) (215,601) =========================================================================================================== Earnings (loss) per share (0.39) (0.13) (0.50) (0.20) Weighted Average Common 3,165,593 1,055,243 3,165,593 1,055,243 Shares Outstanding
See accompanying notes to financial statements -5- 6
IMAGICA ENTERTAINMENT, INC. STATEMENTS OF CASH FLOWS QUARTERLY 10-QSB Three Months Ended November 30, 1996 - --------------------------------------------------------------------------------------------------------------------------------- Three months ended Six months ended November 30, November 30, 1996 1995 1996 1995 ---------- ---------- ---------- ---------- Cash flows from operating activities: Net Income (loss) (1,085,228) (152,110) (1,443,576) (212,601) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and Amorizartion 61,083 75,303 122,668 149,451 Cash provided by (used for): Accounts Receivable 189,487 104,682 202,799 90,251 Stock Holders' Advances (372) 0 (742) 0 Inventories 110,298 64,771 114,654 28,717 Prepaid Expenses (976,700) (22,057) (1,915,898) (53,896) Checks issued against future 0 0 0 0 deposits Accounts Payable - Trade (380,716) 13,925 (302,858) 68,791 Notes Payable 189,554 24,043 189,554 45,058 Accrued Liabilites (61,609) (74,337) 58,168 (21,055) ---------- ---------- ---------- ---------- Net Cash Provided by operating (1,954,203) 34,220 (2,975,231) 94,716 activities Cash flows from investing activities: Purchase of property and equipment Decrease in other assets 55,797 12,855 56,021 32,857 ---------- ---------- ---------- ---------- Net Cash provided by (used for) 55,797 12,855 56,021 32,857 investing activities Cash Flow From Financing Activities: Decrease in note payable Proceeds fr issuance of conv Note Pay 281,867 0 281,867 0 Proceeds fr issuance of stock 620 0 1,095 0 Additional paid in Capital 1,742,747 0 2,868,022 0 Net decrease in stockholder note pay 0 0 41,100 0 Principal payments of long-term debt (109,171) (82,337) (196,766) (156,809) and capital lease obligations ---------- ---------- ---------- ---------- Net Cash Used for Financing Activities 1,916,063 (82,337) 2,995,318 (156,809) Net Increase (decrease) in cash 17,657 (35,262) 76,108 (29,236) and cash equivalents Cash and Cash equivalents, 58,451 14,492 0 8,464 beginning of period Cash and cash equivalents, 76,108 (20,769) 76,108 (20,769) end of period
See accompanying notes to financial statements -6- 7 IMAGICA ENTERTAINMENT, INC. AND SUBSIDARY NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION THE UNAUDITED FINANCIAL STATEMENTS PRESENTED HEREIN HAVE BEEN PREPARED IN ACCORDANCE WITH THE INSTRUCTIONS TO FORM 10-QSB, AND DO NOT INCLUDE ALL OF THE INFORMATION AND DISCLOSURES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THESE STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED IN THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED MAY 31, 1996. THE ACCOMPANYING FINANCIAL STATEMENTS HAVE NOT BEEN EXAMINED BY AN INDEPENDENT ACCOUNTANT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BUT IN THE OPINION OF MANAGEMENT, SUCH FINANCIAL STATEMENTS INCLUDE ALL ADJUSTMENTS, CONSISTING ONLY OF NORMAL RECURRING ADJUSTMENTS AND ACCRUALS, TO FAIRLY REPORT THE COMPANY'S FINANCIAL POSITION AND RESULTS OF OPERATIONS. THE RESULTS OF OPERATIONS FOR THE INTERIM PERIODS SHOWN IN THIS REPORT ARE NOT NECESSARILY INDICATIVE OF RESULTS TO BE EXPECTED FOR THE FISCAL YEAR. NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION During the three months ended November 30, 1996, the Company issued 620,415 shares of common stock as payment for current and future independent consulting services amounting to $1,743,337. This amount will be amortized through August 1997. NOTE 3 - SUPPLEMENTAL REGULATION S SECURITY SUBSCRIPTION AGREEMENT A convertible debenture agreement was made with Mr. Jorge Castro Olmos of Jan Jose, Costa Rica on November 19, 1996. The original debenture amount was $200,000 with a $.50 bid basis for Regulation S stock issuance. The price per share will be $.50 X 60% = $.30 per share stock price which will result in the issuance of 666,666 shares if fully executed. -7- 8 IMAGICA ENTERTAINMENT, INC. AND SUBSIDIARY ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Sales for the three months ended November 30, 1996 were $869,099 reflecting a decline of $529,389 or 38% from the comparable period in fiscal 1996. The Company believes this was primarily the result of working capital constraints brought on by the April 1996 settlement of case number 94-4342-CA-E in the Circuit Court of Marion County, Florida. Cash that would have been used to purchase materials, labor and finance a higher sales volume, went to satisfy the law suit and pay legal fees. The subsequent revenue stream was reduced. With the Company having a very limited ability to secure outside capital, financing of sales have been restricted. Gross profit for the three months ended November 30, 1996 decreased by 45.7% to $147,995 from $272,664 for the comparable period in fiscal 1996. Despite the 38% reduction in the sales volume, the gross profit only declined to 17% from 19.5% during the comparable period in fiscal 1996. Selling, general and administrative expenses (reflected as operating expenses in the accompanying statements of operations) took a dramatic jump to $1,330,761 for the three months ended November 30, 1996 from the $359,571 for the same period in 1995. The accrual for an executive pay increase, consulting fees, and the amortization of consulting fees for the 7/10/96 and 9/06/96 S-8s, accounted for $950,000 of the $1,330,761 first quarter operating expenses. Declining sales and increased operating expenses as a percentage of sales, operating expenses increased to 153% for the first quarter of fiscal 1997 as compared to 25.7% for the same period in fiscal 1996. The net loss increased to ($1,228,813) for the three months ended November 30, 1996 as compared to a net loss of ($132,109). When the $950,000, accrued for consulting fees and an executive pay increase , is factored out, the net loss for the quarter ended November 30, 1996 is only ($278,813). -8- 9 Liquidity and Capital Resources The Company has experienced significant cash flow difficulties in recent years. As of November 30, 1996, the Company has certain obligations which are currently due or due within one year including debenture notes payable of $105,000, various notes payable to stockholders amounting to $291,407, current maturities of long-term debt of $325,048, and the current portion of obligations under capital leases of $24,644. The Company currently does not have sufficient funds to repay such obligations. The Company has engaged Gulf Atlantic Capital Corporation to develop an operating plan that will maximize profitability and cash flow, contact vendors and secured creditors, negotiate a repayment plan, and provide plan monitoring and future assistance in acquiring working capital. During June 1996 the Company entered into three agreements with various consultants to arrange the acquisition of funds from investors. The Company anticipates that the funds generated from raising additional capital coupled with the implementation of the Gulf Atlantic plan will be sufficient to enable the Company to: (1) pay current maturities on debts; (2) acquire new printing equipment; and (3) provide working capital for current operations and future growth. There can be no assurance however, that any additional funds can be obtained, nor that net income generated, if any, will be sufficient to enable the Company to meet its obligations or continue operations as a going concern. The Company intends to acquire various equipment in the near future, most notably a printing machine having a cost of approximately $460,000. Of this amount $206,632 has been paid to date and is included in the "deposit on equipment" in the accompanying balance sheet. The Company anticipates that the remaining funding will come from financing as described above. The Company believes the machine will enable it to produce banners at a much faster pace and at a much lower cost. In 1992 the company purchased land for future development with cash ($150,000, of which $125,000 was borrowed from the bank) and 12,500 shares of common stock. In connection with this transaction, the Seller had the option to require the Company to repurchase the common stock for $10.46 per share. The seller elected to require the Company to repurchase the stock for $10.64 per share. A current liability of $133,250 was recognized as of May 31, 1994. The Seller filed a complaint for breach of contract in October 1994. During 1996, settlement was reached between the Company and the Seller. The Company was released of the $133,250 liability, and the Seller was required to repay the remaining balance owed the bank of $100,000 in exchange for the return of the land and 12,500 shares of common stock. -9- 10 IMAGICA ENTERTAINMENT, INC. AND SUBS DIARY FORM 10-Q (For the Quarter Ended November 30, 1996) ITEM 6: Exhibits and Reports (a) Exhibits 99.1 Form S-8 Registration No. 333-11379 99.2 Convertible Debenture Agreement with Mr. Jorge Castro Olmos of Jan Jose, Costa Rica. 27 Financial Data Schedule (for SEC Use Only) (b) Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter ended November 30, 1996. -10- 11 SIGNATURE In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IMAGICA ENTERTAINMENT, INC AND SUBSIDARY (Registrant) Date: January 14, 1997 By:/s/ Robert S. Wormser -------------------------------- Robert S. Wormser, President (President, Chief Executive Officer and Chief Financial Officer) -11- 12 IMAGICA ENTERTAINMENT, INC. AND SUBS DIARY FORM 10-Q (For the Quarter Ended November 30, 1996) EXHIBIT INDEX Exhibit Number Description of Exhibits - ------ ----------------------- 99.1 Form S-8 Registration No. 333-11379 99.2 Convertible Debenture Agreement with Mr. Jorge Castro Olomos 27 Financial Data Schedule (for SEC Use Only) EX-99.1 2 IMAGICA FORM S-8, REG. NO. 333-11379 1 Exhibit 99.1 Registration No. 333-11379 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _____________________ Imagica Entertainment, Inc. (F/K/A Ranger International, Inc.) (Exact name of registrant as specified in its charter) Florida 59-2762999 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1518 SW 12th Avenue Ocala, Florida 34474 (Address of principal executive office) (Zip Code) Robert Wormser 1518 SW 12th Avenue Ocala, Florida 34474 (352) 867-7860 (Name, address and telephone number, including area code, of agent for service) _____________________ Consulting Agreements with Tod Lotz. and Tim Murray (Full Title of the Plan) _____________________ CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum Amount of Title Amount to be offering price aggregate offering Registration of Securities registered per share(1) price(1) Fee Common Stock, 620,415 $2.81 $1,743,337 $602 par value $.001
(1) The price stated above is estimated solely for the purpose of calculation of registration fee and is based on the average of the high and low prices paid for a share of the Company's Common Stock on August 28, 1996. 2 PART I Item 1. Plan Information Consulting Services Agreements The Consulting Agreement entered into August 12, 1996, between Imagica(trademark) Entertainment, Inc. (the "Company") and Tod Lotz (the "Consultant") requires the Company to pay Consultant 90,000 shares of the Company's Common Stock as compensation for consulting services and granted Mr. Lotz warrants to purchase an additional 300,000 shares of the Company's stock for a period of thirty-six months at an exercise price of $2.00 per share. Under the terms of the Consulting Agreement, Consultant has agreed to render Public relations and long term strategic planning services to the Company. The Common Shares are fully vested at the time of issuance. The Consulting Agreement entered into August 12, 1996, between Imagica(trademark) Entertainment, Inc. (the "Company") and Tim Murray (the "Consultant") requires the Company to pay Consultant 230,415 shares of the Company's Common Stock as compensation for consulting services. Under the terms of the Consulting Agreement, Consultant has agreed to render Public relations and long term strategic planning services to the Company. The Common Shares are fully vested at the time of issuance. Item 2. Registrant Information and Employee Plan Annual Information Plan participants may obtain, without charge, upon written or oral request, any of the documents incorporated by reference in Item 3 of Part II of this Registration Statement; these documents are incorporated by reference in the Section 10(a) prospectus which is a part of this Registration Statement. Plan participants may also obtain, without charge, upon written or oral request, any other documents required to be delivered to employees pursuant to Rule 428(b). All requests for documents should be directed to: Imagica Entertainment, Inc., Attention: President, 1518 SW 12th Avenue, Ocala, Florida 34474 (352) 867-7860. PART II Item 3. Incorporation of Documents by Reference The following documents are incorporated by reference into this Registration Statement, and are made a part hereof: (a) The Registrant's latest annual report for the year ended May 31, 1995, on Form 10-KSB filed on or about January 4, 1996, and Registrant's latest annual report, as amended, for the year ended May 31, 1995, on Form 10-KSB/A filed on or about January 5, 1996. 3 (b) The Registrant's latest quarterly reports for the quarters ended August 31, 1995, November 30, 1995, and February 29, 1996, on Form 10-QSB filed on or about January 4, 1996; January 13, 1996; April 10, 1996, respectively. (c) All other reports filed by the registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Form 10-SBK referred to in paragraph (a) above. (d) The descriptions of the registrant's securities which are contained in its registration statements filed under section 12 of the Securities Exchange Act of 1934, including any amendment or reports filed for the purpose of updating such descriptions. All reports filed by the Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, after the date of this Registration Statement and prior to the filing of a post-effective amendment indicating that all of the securities offered hereby have been sold, or deregistering all such securities then remaining unsold, shall be deemed to be incorporated by reference and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed incorporated by reference herein modifies or supersedes such statement. Any such document so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel. Not Applicable. Item 6. Indemnification of Officers and Directors. The By-Laws of the Company, contain a provision under which the officers and directors of the Company would be indemnified to the full extent permitted by law. Also, Sec. 607.0850, Fla. Stat. (1995), permits indemnification against expenses actually and reasonably incurred by a director, officer, employee or agent to the extent that such person has been successful in the defense of a matter eligible for indemnification under the statute. Under certain circumstances, expenses may be paid by a corporation in advance, subject to repayment, unless the defendant ultimately is determined to be ineligible for indemnification. In addition, the statute permits a corporation to indemnify directors and officers against certain liabilities and to purchase and maintain director and officer liability and reimbursement insurance against liabilities, whether or not the corporation would have the power of indemnification against such liabilities. Item 7. Exemption from Registration Claimed. Not Applicable. 4 Item 8. Exhibits. Page (4) Instruments defining the rights of security holders, including indentures (a) Consulting Agreement between Imagica Entertainment, Inc.. and Tod Lotz dated August 12, 1996. (b) Consulting Agreement between Imagica Entertainment, Inc.. and Tim Murray dated August 12, 1996. (5) Opinion re legality (15) Letter re unaudited interim financial information None (24) Consents of experts and counsel (a) Consent of BDO Seidman (b) Consent of Bruce Brashear, Esq. (28) Additional exhibits None (29) Information from reports furnished to state insurance regulatory authorities None Item 9. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to include any additional or changed material information on the plan of distribution. (2) That, for the purpose of determining any liability under the Securities Act of 1933 treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. (3) File a post-effective amendment to remove any of the securities that remain unsold at the end of the offering. (b) The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act"), may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies it has reasonable ground to believe it meets all the requirements for filing on Form S-8 and has duly caused same to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ocala, State of Florida, on the 28th day of August, 1996. IMAGICA ENTERTAINMENT, Inc. By: /s/ Robert S. Wormser Robert S. Wormser, President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony M. Pallante his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits hereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done on or about the premises, as fully and for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated, on the dates indicated. Signature Title /s/ Robert S. Wormser Chairman of the Board and Director - ------------------------ Robert S. Wormser Date: August 28, 1996 /s/ William J. White Director - ------------------------ William J. White Date: August 28, 1996 6 CONSULTING AGREEMENT THIS AGREEMENT is made as of August 12, 1996 by and between RANGER INTERNATIONAL, INC. D/B/A IMAGICA(trademark) ENTERTAINMENT INC., a Florida corporation (the "Company or IMAGICA") and TOD LOTZ, an individual, (the "Consultant"). RECITALS: A. The Company is a public company, and desires to expose its business plan and to build the value of the Company for the benefit of its shareholders on a long term strategic planning; and B. The Consultant is a financial advisor involved in a variety of businesses, with particular emphasis in long term strategic planning; and C. The Company recognizes the substantial experience and knowledge of the Consultant in matters relating to long term strategic planning; and D. The Company further recognizes that it is in the best interests of the Company to engage the consulting services of the Consultant; and E. The Company desires to retain the valuable services and counsel of the Consultant, and the Consultant desires to render such services to the Company upon the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby agree as follows: 1. Recitals. The Recitals to this Agreement are hereby incorporated into this Agreement as though full restated herein. 2. Engagement. The Company hereby engages the Consultant, and the Consultant accepts engagement by the Company, upon the terms and conditions set forth in this Agreement. This Agreement hereby supersedes any prior, contemporaneous, oral or written agreements by and between both parties hereof. 3. Term. The term of this Agreement shall begin on the date hereof and shall continue until June 11, 1998, unless modified by the parties hereto. 4. Consulting Services Compensation. (A) The Company shall pay to Consultant, as compensation for his services under this Agreement, Ninety Thousand (90,000) Common Shares of IMAGICA (the "IMAGICA Shares"), which shares shall be immediately registered under a S-8 short form Registration Statement with the Securities and Exchange Commission, by the Company, at the Company's expense. In addition, the Company is registering and issuing warrants to purchase up to 300,000 shares of the Company's common stock at $2.00 per share for a period of 36 months from the date of this contract as agreed to in the 7 previous consulting agreement dated June 12, 1996. (B) The Company may in the future provide the Consultant with such additional compensation as the Company and Consultant shall mutually agree for any additional services by the Consultant not provided for in this Agreement, which terms shall be set forth, during the term of this Agreement, in Schedules attached hereto and incorporated herein by reference. 5. Duties. From time to time as reasonably requested by the Company, the Consultant shall provide public relations advice and services to the Company and long term strategic planning. 6. Nature of Engagement. The Consultant is being engaged by the company as an independent contractor. Nothing in this Agreement shall be construed so as to create an employer-employee relationship between the parties. 7. Expenses. Upon receipt of requests from the Consultant for reimbursement, the Company shall reimburse the Consultant for all reasonable and necessary expenses the Consultant incurs, prior to and after the date of this Agreement in performing his duties in connection with this Agreement. The Consultant shall be required to receive authorization from the Company prior to incurring any such expenses in excess of $1,000.00. 8. Notices. Any notice, report or demand required, permitted or desired under this Agreement shall be sufficient if in writing and delivered by certified mail, return receipt requested, Federal Express (or similar courier), telegram or receipted hand delivery at the following addresses (or such other addresses designated by proper notice): To the Company: Imagica(trademark) Entertainment, Inc. 1518 S.W. 12th Avenue Ocala, Florida 34474 Attn: Robert S. Wormser, President To the Consultant: Mr. Tod Lotz 408 Baynard Drive Venice, Florida 34285 Any notice otherwise delivered shall be deemed given when actually received by recipient. 9. Miscellaneous. (A) Governing Law. This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Florida. (B) Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any other breach of any provision of this Agreement by any party. (C) Entire Agreement. This instrument contains the entire agreement of the parties concerning engagement and may not be changed or modified except by written agreement duly executed by the parties hereto and supersedes any prior or contemporaneous oral or written agreement between the parties. (D) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, heirs, personal representatives and assigns. 8 (E) Day(s). Reference in this Agreement to "day" or "days" refers to calendar days, but if a referenced date falls on a Saturday, Sunday or federal holiday, it will be deemed to fall on the next calendar day that is not a Saturday, Sunday or federal holiday. (F) Confidentiality. Except as may otherwise be required by law, the provisions of this Agreement shall remain strictly confidential. To the extent permitted by law, the Board of Directors of the Company shall ensure that no person other than members of the Board of Directors of the Company and appropriate officers of the Company, their legal counsel or accountants, are made aware of the terms of this Agreement. In addition, neither the company nor the Consultant shall, either directly or indirectly through their respective officers, directors, employees, shareholders, partners, joint ventures, agents, consultants, contractor, affiliates or any other person, disclose, communicate, disseminate or otherwise breach the confidentiality of all or any provision of this Agreement, without the express written consent of both parties to this Agreement. (G) Specific Performance. Strict compliance shall be required with each and every provision of this Agreement. The parties hereto agree that breach of this Agreement shall result in irreparable damage, and that specific performance of these obligations may be obtained. (H) Additional Documents. The Company agrees to execute such other documents and agreements to effect the purposes of this Agreement, as the Consultant may request from time to time. (I) Assignment. The obligations of the parties under this Agreement shall not be assigned without the written consent of the parties. Notwithstanding any provision of this Agreement to the contrary, however, the Consultant shall be entitled to provide that any funds payable or stock issuable to him pursuant to this Agreement shall instead be paid or issued to another person. (J) Counterparts. This Agreement may be executed in counterparts, and all counterparts will be considered as part of one agreement binding on all parties to this Agreement. (K) Facsimile Signatures. The parties may execute this Agreement by facsimile, which signature(s) shall be deemed an original and binding upon such party. (L) Severability. If any term, condition or provision of this Agreement or the application thereof to any party or circumstances shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, condition or provision to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, condition and provision of their Agreement shall be valid and enforceable to the fullest extent permitted by law. (M) Dispute Procedure. Any dispute, controversy or claim arising out of, or in connection with this Agreement shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association then in effect. The arbitration shall be conducted on an expedited basis in the Orlando, Florida area by an independent arbitrator selected by the American Arbitration Association. The decision of such arbitrator, including any award of attorney's fees and costs, may be entered into any court with jurisdiction. 9 (N) Board of Directors. Except as expressly provided otherwise in this Agreement, reference to actions, determinations or similar occurrences by the Company shall mean the action, decision or determination of its Board of Directors. (O) Authority. The Company hereby represents and warrants that the person executing this Agreement on its behalf is duly authorized to do so, that the execution of this Agreement has been duly approved by the Board of Directors of the Company, and that this Agreement is binding upon the Company. The Company hereby agrees to provide the documentation evidencing such authorization and approval as the Consultant may reasonably request, including, without limitation, written consents of the Board of Directors of the Company. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. RANGER INTERNATIONAL, INC. D/B/A IMAGICA(trademark) ENTERTAINMENT, INC., TOD LOTZ a Florida corporation By: By: ------------------------------ -------------------------------- Robert S. Wormser, President Tod Lotz, Consultant 10 CONSULTING AGREEMENT THIS AGREEMENT is made as of August 12, 1996 by and between RANGER INTERNATIONAL, INC. D/B/A IMAGICA(trademark) ENTERTAINMENT INC., a Florida corporation (the "Company or IMAGICA") and TIM MURRAY, an individual, (the "Consultant"). RECITALS: A. The Company is a public company, and desires to expose its business plan and to build the value of the Company for the benefit of its shareholders on long term strategic planning; and B. The Consultant is a financial advisor involved in a variety of businesses, with particular emphasis in long term strategic planning; and C. The Company recognizes the substantial experience and knowledge of the Consultant in matters relating to long term strategic planning; and D. The Company further recognizes that it is in the best interests of the Company to engage the consulting services of the Consultant; and E. The Company desires to retain the valuable services and counsel of the Consultant, and the Consultant desires to render such services to the Company upon the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to 11 be legally bound hereby agree as follows: 1. Recitals. The Recitals to this Agreement are hereby incorporated into this Agreement as though full restated herein. 2. Engagement. The Company hereby engages the Consultant, and the Consultant accepts engagement by the Company, upon the terms and conditions set forth in this Agreement. This Agreement hereby supersedes any prior, contemporaneous, oral or written agreements by and between both parties hereof. 3. Term. The term of this Agreement shall begin on the date hereof and shall continue until August 12, 1997, unless modified by the parties hereto. 4. Consulting Services Compensation. (A) The Company shall pay to Consultant, as compensation for his services under this Agreement, Two Hundred Thirty Thousand Four Hundred and Fifteen (230,415) Common Shares of IMAGICA (the "IMAGICA Shares"), which shares shall be immediately registered under a S-8 short form Registration Statement with the Securities and Exchange Commission, by the Company, at the Company's expense. (B) The Company may in the future provide the Consultant with such additional compensation as the Company and Consultant shall mutually agree for any additional services by the Consultant not provided for in this Agreement, which terms shall be set forth, during the term of this Agreement, in Schedules attached hereto and incorporated herein by reference. 5. Duties. From time to time as reasonably requested by the Company, the Consultant shall provide public relations advice and services to the Company and long term strategic planning. 6. Nature of Engagement. The Consultant is being engaged by the company as an independent contractor. Nothing in this Agreement shall be construed so as to create an employer-employee relationship between the parties. 7. Expenses. Upon receipt of requests from the Consultant for reimbursement, the Company shall reimburse the Consultant for all reasonable and necessary expenses the Consultant incurs, prior to and after the date of this Agreement in performing his duties in connection with this Agreement. The Consultant shall be required to receive authorization from the Company prior to incurring any such expenses in excess of $1,000.00. 8. Notices. Any notice, report or demand required, permitted or desired under this Agreement shall be sufficient if in writing and delivered by certified mail, return receipt requested, Federal Express (or similar courier), telegram or receipted hand delivery at the following addresses (or such other addresses designated by proper notice): To the Company: Imagica(trademark) Entertainment, Inc. 1518 S.W. 12th Avenue Ocala, Florida 34474 Attn: Robert S. Wormser, President To the Consultant: Mr. Tim Murray 375 Douglas Avenue, Suite 1006 Altamonte Springs, FL 32714 12 Any notice otherwise delivered shall be deemed given when actually received by recipient. 9. Miscellaneous. (A) Governing Law. This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Florida. (B) Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any other breach of any provision of this Agreement by any party. (C) Entire Agreement. This instrument contains the entire agreement of the parties concerning engagement and may not be changed or modified except by written agreement duly executed by the parties hereto and supersedes any prior or contemporaneous oral or written agreement between the parties. (D) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, heirs, personal representatives and assigns. (E) Day(s). Reference in this Agreement to "day" or "days" refers to calendar days, but if a referenced date falls on a Saturday, Sunday or federal holiday, it will be deemed to fall on the next calendar day that is not a Saturday, Sunday or federal holiday. (F) Confidentiality. Except as may otherwise be required by law, the provisions of this Agreement shall remain strictly confidential. To the extent permitted by law, the Board of Directors of the Company shall ensure that no person other than members of the Board of Directors of the Company and appropriate officers of the Company, their legal counsel or accountants, are made aware of the terms of this Agreement. In addition, neither the company nor the Consultant shall, either directly or indirectly through their respective officers, directors, employees, shareholders, partners, joint ventures, agents, consultants, contractor, affiliates or any other person, disclose, communicate, disseminate or otherwise breach the confidentiality of all or any provision of this Agreement, without the express written consent of both parties to this Agreement. (G) Specific Performance. Strict compliance shall be required with each and every provision of this Agreement. The parties hereto agree that breach of this Agreement shall result in irreparable damage, and that specific performance of these obligations may be obtained. (H) Additional Documents. The Company agrees to execute such other documents and agreements to effect the purposes of this Agreement, as the Consultant may request from time to time. (I) Assignment. The obligations of the parties under this Agreement shall not be assigned without the written consent of the parties. Notwithstanding any provision of this Agreement to the contrary, however, the Consultant shall be entitled to provide that any funds payable or stock issuable to him pursuant to this Agreement shall instead be paid or issued to another person. (J) Counterparts. This Agreement may be executed in counterparts, and all counterparts will be considered as part of one agreement binding on all parties to this Agreement. 13 (K) Facsimile Signatures. The parties may execute this Agreement by facsimile, which signature(s) shall be deemed an original and binding upon such party. (L) Severability. If any term, condition or provision of this Agreement or the application thereof to any party or circumstances shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, condition or provision to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, condition and provision of their Agreement shall be valid and enforceable to the fullest extent permitted by law. (M) Dispute Procedure. Any dispute, controversy or claim arising out of, or in connection with this Agreement shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association then in effect. The arbitration shall be conducted on an expedited basis in the Ocala, Florida area by an independent arbitrator selected by the American Arbitration Association. The decision of such arbitrator, including any award of attorney's fees and costs, may be entered into any court with jurisdiction. (N) Board of Directors. Except as expressly provided otherwise in this Agreement, reference to actions, determinations or similar occurrences by the Company shall mean the action, decision or determination of its Board of Directors. (O) Authority. The Company hereby represents and warrants that the person executing this Agreement on its behalf is duly authorized to do so, that the execution of this Agreement has been duly approved by the Board of Directors of the Company, and that this Agreement is binding upon the Company. The Company hereby agrees to provide the documentation evidencing such authorization and approval as the Consultant may reasonably request, including, without limitation, written consents of the Board of Directors of the Company. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. RANGER INTERNATIONAL, INC. D/B/A IMAGICA(trademark) ENTERTAINMENT, INC., a Florida corporation By: --------------------------------- Robert S. Wormser, President TIM MURRAY By: --------------------------------- Tim Murray, Consultant 14 August 28, 1996 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 RE: Registration Statement on Form S-8 Imagica Entertainment, Inc. Gentlemen: I have acted as counsel for Imagica Entertainment, Inc. (the "Company") in connection with its proposed offering to certain consultants of Company of 320,415 common shares and warrants to purchase an additional 300,000 common shares (par value $.0001). In connection with the proposed public offering and above-described registration statement, I have reviewed the following: 1. The Certificate of Incorporation and amendments thereto of the Company; 2. The By-Laws and amendments thereto of the Company; 3. The minute books of the Company; and On the basis of such investigation and the examination of such other records as I deemed necessary, I am of the opinion that: a) the Company has been duly incorporated and is validly existing under the laws of the State of Florida; and b) The 620,415 shares have been duly authorized and when issued, will be legally issued by the Company and will be fully paid and nonassessable. I consent to the filing of this opinion as an Exhibit for the purpose of registering all or a portion of the Common Shares described in Form S-8 under the relevant state and federal securities laws. Sincerely, /s/ Bruce Brashear ------------------------------- Bruce Brashear, Esq. EX-99.2 3 CONVERTIBLE DEBENTURE AGREEMENT 1 Exhibit 99.2 THIS CONVERTIBLE DEBENTURE HAS BEEN SOLD IN AN "OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, NEITHER THIS CONVERTIBLE DEBENTURE NOR ANY COMMON SHARES INTO WHICH IT MAY BE CONVERTIBLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A "U.S. PERSON" (AS DEFINED UNDER REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS LIMITED BY THE TERMS OF THIS DEBENTURE AND ALL EXHIBITS AND ATTACHMENTS HERETO. Regulations S Restrictive Agreement No. 001 IMAGICA ENTERTAINMENT, INC. CONVERTIBLE DEBENTURE $100,000.00 Gainesville, Florida - ----------- Amount of Debenture Date: ________________________ IMAGICA ENTERTAINMENT, INC., a Florida corporation (the "Company"). for value received, hereby promises to pay to Nimbus Tres Sociedad Anonima the principal sum of $100,000 on November 1, 2006, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) from the date hereof on the unpaid balance of such principal amount from time to outstanding at the rate of three percent (3%) per annum; all such accrued interest and principal shall be due and payable on or before ten years following the date of this agreement by payment of all principal and interest due hereunder by the issuance of common stock of the Company valued at the Conversion Price as herein defined. Anytime after forty days following Nimbus Tres Sociedad Anonima's funding of this convertible debenture, it may convert the principal amount due hereunder into common shares of the Company at the Conversion Price. As used in this agreement the "Conversion Price" shall refer to the lower of the (a) the closing bid price of the common stock of the Company on the date of funding by Nimbus Tres Sociedad Anonima or (b) Sixty percent (60%) of the closing bid price of the common stock of the Company for the five (5) trading days immediately preceding the date of the conversion. 1. Conversion 1.1 Right: Number of Conversion Shares. The holder of this Debenture may, at the holder's option, at any time on or before full payment, convert from time to time the principal amount of such Debenture and all interest then accrued and unpaid, or any part thereof, into Common Stock of the Company. The number 2 of shares of Common Stock of the Company into which the Debentures may be converted shall be computed as follows: Divide the principal amount of Debentures to be converted by the Conversion Price. 1.2 Adjustment for Change in Capital Stock. a) If the Company: (1) pays a dividend in shares of its Common Stock; (2) subdivides its outstanding shares of Common Stock into a greater number of shares; (3) combines its outstanding shares of Common Stock into a smaller number of shares; (4) distributes to all holders of its Common Stock shares of its capital stock other than Common Stock; or (5) issues by reclassification of its shares of Common Stock any shares of its capital stock. then the conversion privilege and the Conversion Price in effect immediately prior to such action shall be adjusted so that the holder of any Debenture thereafter converted may receive the number of shares of Common Stock or other capital stock of the Company which such holder would have owned immediately following such action if such holder had converted the Debenture immediately prior to such action. b) For a dividend or distribution, the adjustment shall become effective immediately after the record date for the dividend or distribution. For a subdivision, combination, or reclassification, the adjustment shall become effective immediately after the effective date of the subdivision, combination, or reclassification. c) If after an adjustment a holder of a Debenture upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Company shall determine the allocation of the adjusted Conversion Price between or among the classes of capital stock. After such allocation, the conversion prices of the classes of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Agreement. 1.3 Notice of Adjustment. Whenever the Conversion Price is adjusted, the Company shall promptly mail to holders of Debentures a notice of the adjustment. 1.4 Merger, Consolidation, etc. If the Company at any time while the Debentures are outstanding shall consolidate with, merge into, or effect a plan of exchange with, or sell or convey all or substantially all of its assets to any other corporation or shall by subdivision, combination, or reclassification or securities or otherwise change any of its securities then issuable upon conversion of the Debentures into the same or a different number of securities of any class or classes, then, in any such event, the Debentures shall thereafter be convertible into such number any kinds of securities and property as would have been issuable and distributable on account of such consolidation, merger, plan of exchange, sale, conveyance, subdivision, combination, reclassification, or similar change, upon or with respect to the securities which are issuable upon conversion of the Debentures immediately prior to such consolidation, merger, plan of exchange, sale, conveyance, subdivision, combination, or reclassification, or similar change. Page 2 3 2. Prepayment of Principal of Interest. All or a portion of interest or principal due hereunder may be prepaid without penalty. 3. Default. 3.1 Events of Default; Acceleration. The entire unpaid principal of this Debenture and the interest then accrued on this Debenture shall become and be immediately due and payable on written demand of the holder of this Debenture, without any other notice or demand of any kind or any presentment or protest, if any one of the following conditions or events (an "Event or Default") occurs and is continuing when demand is made, whether voluntarily or involuntarily, or, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule or regulation of any governmental body. a) if the Company defaults in the payment of any principal of any debenture for more than 10 days after the same becomes due and payable, whether at maturity or at a date fixed for payment or be acceleration or otherwise when due; or b) if the Company defaults in the payment of any interest on any debenture for more than 10 days after the same becomes due and payable; or c) if the Company defaults in the performance of or compliance with any term or covenant contained in the Agreement or this Debenture and such default shall not have been remedied within 15 days after written notice thereof shall have been given to the Company by any holder of Debentures; or d) if any representation or warranty made in writing by or on behalf of the Company in the Agreement or pursuant thereto in connection with the transactions contemplated thereby shall prove to have been false or incorrect in any material respect on the date as of which made: or e) if the Company makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated as bankrupt or insolvent, files any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future statute, law or regulation, files any answer admitting or not contesting the material allegations of a petition filed against the Company in any such proceeding, seeks or consents to or acquiesces in the appointment of any trustee, receiver, or liquidator of the Company or of all or any substantial part of the properties of the Company of if the Company or its directors or majority shareholders take any action looking to the dissolution or liquidation of the Company; or f) if, within 60 days after the commencement of an action against the Company seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief, such action shall not have been dismissed or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within 60 days after the appointment without the consent of acquiescence of the Company of any trustee, receiver, or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated; or g) if a final judgment for the payment of money in excess of $25,000 (not covered by insurance or indemnification) shall be rendered against the Company and if, within 60 days after entry thereof, such judgment shall not have been discharged or execution thereof stayed pending appeal, or if, Page 3 4 within 60 days after the expiration of any such stay, such judgment shall not have been discharged or provision therefor satisfactory to Investors shall have been made; then and in any such event any holder or holders of the Debentures at the time outstanding may at any time (unless all defaults shall theretofore have been remedied) at its or their option, by written notice or notices to the Company, declare all of the Debentures to be due and payable, whereupon the same shall forthwith mature and become due and payable, together with interest accrued thereon, without presentment, demand, protest, or notice, all of which are hereby waived. If any holder of the Debentures gives any notice or takes any other action with respect to a claimed default, the Company, forthwith upon receipt of such notice or obtaining knowledge of such other action, will give written notice thereof to all other holders of the Debentures at the time outstanding, describing such notice or other action and the nature of the claimed default. 2.3 Remedies on Default, etc. If one or more Events of Default occurs and is continuing, any holder of the Debentures at any time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity, or other appropriate proceeding, whether for the specific performance or any agreement contained herein or under terms of such Debentures or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law. In case of a default in the payment or any principal or interest on any Debentures, the Company will pay to the holder thereof such further amount as shall be sufficient to cover the costs and expenses of collection (or protection of such holder's interests), including, without limitation, reasonable attorneys' fees at pretrial, trial, appellate level, expenses, and disbursements. No course of dealing and no delay on the part of any holder of the Debentures in exercising any right shall operate as a waiver thereof or otherwise prejudice such holder's rights. No right shall be exclusive or any other right referred to herein or therein or now or hereafter available at law, in equity, by statute, or otherwise. 4. Fees. The Company will pay, and save the Holders harmless against all liability for the payment of all costs and other expenses incurred in connection with the Company's performance of and compliance with all agreements and conditions contained herein on its part to be performed or complied with. The Company further agrees that it will pay, and will save the Holders harmless from, any and all liability with respect to any stamp or similar taxes which may be determined to be payable in connection with the execution and delivery of this Debenture or any modification, amendment or alteration of the terms or provisions of this Debenture, and that it will similarly pay and hold the Holders harmless from all issue taxes in respect of the issuance of the purchased shares. 5. General. 5.1 Successors and Assigns. This Debenture, and the obligations and rights of the Company hereunder, shall be binding on and inure to the benefit of the Company, the holder of this Debenture, and their respective heirs, successors, and assigns. 5.2 Currency. All payments shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender therein for the payment of public and private debts. 5.3 Notices. All notices, requests, consents, and demands shall be made in writing and shall be deemed effectively given when delivered personally to the party to whom it is addressed or when deposited in the United States mail, by registered or certified mail, postage prepaid, addressed to the Company, Attention: President at 3622 NE 4th Street, Gainesville, Florida, 32601, or to the holder of the Debenture at the addressed furnished to the Company in writing. Page 4 5 5.4 Governing Law. This Debenture shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of Florida. 5.5 Transfer and Exchange of Debenture. Upon surrender for registration of transfer of any Debenture at the office of the Company, the Company at its expenses shall execute and deliver one or more new Debentures in an aggregate principal amount equal to the unpaid principal amount of such surrendered Debenture registered in the name of the designated transferee or transferees. This Debenture may not be exchanged for other Debentures. Whenever any Debentures are surrendered for exchange, the Company shall execute and deliver at its expense the Debentures which the holder making the exchange is entitled to receive. Each Debenture presented or surrendered for registration of transfer shall be duly enforced, or be accompanied by a written instrument of transfer duly executed, by the holder of such Debenture of the holder's attorney duly authorized in writing. Any Debentures issued in exchange for any Debentures or upon transfer thereof shall carry the rights to unpaid interest accrued to the date of transfer which were carried by the Debentures so exchanged or transferred, and neither gain no loss of interest shall result from any such transfer or exchange. 5.6 Replacement of Debentures. Upon receipt of evidence reasonably satisfactory of the Company of the loss, theft, destruction, or mutilation of any Debenture and, in the case of any such mutilation, upon the surrender of such Debenture for cancellation at the place of payment specified therein or pursuant thereto, the Company at its expense will execute and deliver, in lieu thereof, a new Debenture of like tenor dated the date to which interest has been paid on such lost, stolen, destroyed or mutilated Debenture. IN WITNESS WHEREOF, this Debenture has been executed and delivered as a sealed instrument on the date first above written by the duly authorized representative of the Company. IMAGICA ENTERTAINMENT, INC. /s/ Robert S. Wormser ------------------------------------ By: Robert S. Wormser Title: President Page 5 6 THIS CONVERTIBLE DEBENTURE HAS BEEN SOLD IN AN "OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, NEITHER THIS CONVERTIBLE DEBENTURE NOR ANY COMMON SHARES INTO WHICH IT MAY BE CONVERTIBLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A "U.S. PERSON" (AS DEFINED UNDER REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS LIMITED BY THE TERMS OF THIS DEBENTURE AND ALL EXHIBITS AND ATTACHMENTS HERETO. Regulations S Restrictive Agreement No. 002 --- IMAGICA ENTERTAINMENT, INC. CONVERTIBLE DEBENTURE $100,000.00 Gainesville, Florida - ----------- Amount of Debenture Date: ________________________ IMAGICA ENTERTAINMENT, INC., a Florida corporation (the "Company"), for value received, hereby promises to pay to Nimbus Tres Sociedad Anonima the principal sum of $100,000 on November 1, 2006, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) from the date hereof on the unpaid balance of such principal amount from time to outstanding at the rate of three percent (3%) per annum; all such accrued interest and principal shall be due and payable on or before ten years following the date of this agreement by payment of all principal and interest due hereunder by the issuance of common stock of the Company valued at the Conversion Price as herein defined. Anytime after forty days following Nimbus Tres Sociedad Anonima's funding of this convertible debenture, it may convert the principal amount due hereunder into common shares of the Company at the Conversion Price. As used in this agreement the "Conversion Price" shall refer to the lower of the (a) the closing bid price of the common stock of the Company on the date of funding by Nimbus Tres Sociedad Anonima or (b) Sixty percent (60%) of the closing bid price of the common stock of the Company for the five (5) trading days immediately preceding the date of the conversion. 1. Conversion 1.1 Right; Number of Conversion Shares. The holder of this Debenture may, at the holder's option, at any time on or before full payment, convert from time to time the principal amount of such Debenture and all interest then accrued and unpaid, or any part thereof, into Common Stock of the Company. The number 7 November 18, 1996 Robert Wormser President Imagica Entertainment, Inc. P.O. Box 2121 Ocala, FL 34478 Dear Mr. Wormser: We have the two hundred thousand United States dollars in cleared funds on deposit with the escrow agent and are ready to proceed with the first traunch of the Regulation S agreement. It has come to our attention that you may be considering offering a similar investment arrangement to another purchaser in the near future. It is our opinion if you were to enter into another such funding agreement involving the common stock, preferred shares or debentures of Imagica this may detrimentally affect the financial integrity of our investment in your company. As a condition of our purchasing the debentures as described in the Regulation S Subscription Agreement between us dated September 17, 1996, we would like you to acknowledge and agree that no other funding agreements (written or oral) have been made since the date of that agreement and shall not be made in the future unless Imagica should not receive funding from Nimbus in the minimum gross amount of $200,000 USD for a period of ninety days beginning with the date of the last disbursement of funds to Imagica from the escrow agent. Please indicate your acceptance of this condition by signing where indicated below and returning to me. Sincerely, NIMBUS TRES SOCIEDAD ANONIMA /s/ Jorge Castro Olmos - ----------------------------- Jorge Castro Olmos Acknowledged and Agreed: IMAGICA ENTERTAINMENT, INC. /s/ Robert S. Wormser - ----------------------------- By: Robert S. Wormser Title: President EX-27 4 FINANCIAL DATA SCHEDULE (FOR S.E.C. USE ONLY)
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF IMAGICA ENTERTAINMENT, INC. FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS MAY-31-1997 JUN-01-1996 NOV-30-1996 76,108 0 364,708 24,778 143,971 2,544,730 2,462,133 1,767,648 3,502,847 1,917,791 898,357 0 0 2,915 0 3,502,847 869,099 869,099 721,105 1,330,761 0 0 46,046 (1,228,813) 0 (1,228,813) 0 0 0 (1,228,813) (.39) (.32)
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