-----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, MpYC2nyQlOd4EhfKovVWTb+RAMZcDDf1gJ5aFzsxwQd0AK3mG6I29onKJ2f0Vhy/ oe+GOoL4ygzZ9VAcuF6YpQ== 0000950157-96-000195.txt : 19960805 0000950157-96-000195.hdr.sgml : 19960805 ACCESSION NUMBER: 0000950157-96-000195 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960802 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HARMONY HOLDINGS INC CENTRAL INDEX KEY: 0000878246 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 954333330 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42207 FILM NUMBER: 96602730 BUSINESS ADDRESS: STREET 1: 1990 WESTWOOD BLVD STREET 2: SUITE 310 CITY: LOS ANGELES STATE: CA ZIP: 90025-4676 BUSINESS PHONE: 3104467700 MAIL ADDRESS: STREET 1: 1990 WESTWOOD INC CITY: LOA ANGLES STATE: CA ZIP: 90025 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNIMEDIA S A CENTRAL INDEX KEY: 0001020121 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: I0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: IMMEUBLE LE LEVANT STREET 2: 2 RUE DU NOUVEAU BERCY CITY: CHARENTON FRANCE ZIP: 94220 BUSINESS PHONE: 33143536999 MAIL ADDRESS: STREET 1: IMMEUBLE LE LEVANT STREET 2: 2 RUE DU NOUVEAU BERCY CITY: CHARENTON FRANCE ZIP: 94220 SC 13D 1 SCHEDULE 13D ================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934* Harmony Holdings, Inc. (Name of Issuer) Common Stock, $.01 Par Value (Title of Class of Securities) 41322310 (CUSIP Number) Gilles Assouline Unimedia S.A. Immeuble le Levant 2 rue du Nouveau Bercy 94220 Charenton France (33-1) 43-53-69-99 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 27, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [X]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class. See Rule 13d-7.) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 41322310 - --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Unimedia S.A. - --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - --------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION France - --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 1,000,000 Shares BENEFICIALLY ------------------------------------------------- OWNED BY EACH 8 SHARED VOTING POWER REPORTING 0 (See text of Item 5) PERSON WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER 1,000,000 Shares ------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 (See text of Item 5) - --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 Shares (See text of Item 5) - --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.9% - --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - --------------------------------------------------------------------- Item 1. Security and Issuer This statement relates to the common stock, par value $.01 per share (the "Common Stock"), of Harmony Holdings, Inc. (the "Company"), a Delaware corporation with its principal executive offices at 1990 Westwood Blvd., Suite 310, Los Angeles, California, 90025. Item 2. Identity and Background This statement is being filed by Unimedia S.A. ("Unimedia"), a privately held societe anonyme organized and existing under the laws of France with its principal executive office at 11 bis, rue du Colisee, 75008, Paris, France and its principal business at Immeuble le Levant, 2 rue du Nouveau Bercy, 94220, Charenton, France. Unimedia is a designer of multimedia interactive software which, through its affiliates and subsidiaries, has developed complementary expertise in security, sales automation, contactless smart card technology, Internet service providing, graphic animation, on-line programming, virtual reality technologies and special effects. The attached Schedule I is a list of the executive officers and directors of Unimedia and persons that may be deemed to be controlling persons of Unimedia, which contains the following information with respect to each person listed on such schedule: (a) name and representative through which it acts, if any; (b) residence address or principal business address and, if different, address of principal office; (c) principal business or present principal occupation or employment and, if applicable, the name, principal business and address of any corporation or other organization in which such employment is conducted; and (d) citizenship or place of organization. During the past five years, neither Unimedia nor, to the best of Unimedia's knowledge, any person or entity named on Schedule I has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States Federal or state securities laws or finding any violation with respect to such laws. Claude Berda, a representative of a member of Unimedia's Supervisory Board, may be deemed to be a controlling person with respect to Unimedia through his direct and indirect ownership interests in three shareholders of Unimedia (MMP, Multimedia Investissement and Media Venture) that are also members of Unimedia's Supervisory Board. However, Unimedia does not believe that Mr. Berda's interests create a circumstance of sole or shared voting or dispositive power with respect to Unimedia's holdings of Common Stock. Gilles Assouline, Chief Executive Officer of Unimedia, may be deemed to be a controlling person with respect to Unimedia through his shareholdings in three shareholders of Unimedia (Diamond Productions, Multimedia Investissment and Media Venture) that are also members of the Supervisory Board and through his direct shareholdings in Unimedia. However, Unimedia does not believe that Mr. Assouline's interests create a circumstance of sole or shared voting or dispositive power with respect to Unimedia's holdings of Common Stock. Item 3. Source and Amount of Funds or Other Consideration On July 27, 1996, the Company and Unimedia executed a subscription agreement (the "Subscription Agreement") whereby the Company agreed to sell, and Unimedia agreed to buy, 1,000,000 shares of Common Stock for $2,000,000. All such funds will come from Unimedia's working capital. Item 4. Purpose of Transaction The Common Stock to be acquired by Unimedia pursuant to the Subscription Agreement is being acquired for purposes of investment. However, in connection with such investment, the Company, Unimedia and Harvey Bibicoff (in his capacity as a stockholder of the Company) entered into an agreement (the "Acquisition Agreement") pursuant to which they have agreed, inter alia, to negotiate and execute in good faith before September 30, 1996 an agreement providing for the acquisition of Unimedia by the Company (the "Unimedia Acquisition"). Pursuant to the Unimedia Acquisition, the shareholders of Unimedia would receive Common Stock and preferred stock of the Company representing approximately 69% of the share capital (including 69% of the voting rights and dividend rights) of the Company on a fully diluted basis. On April 18, 1996, Unimedia and Capital Media Group Ltd. ("CMG") made a proposal to the Company for the purchase of all the Company's outstanding stock at a purchase price of $3.50 per share of which one third would have been paid in cash and two thirds would have been paid in the common stock of CMG. In further discussions, Unimedia and CMG also made a proposal to loan the Company between $500,000 and $1,000,000 on terms to be agreed upon. Such proposals were subject to significant conditions, including negotiation of a definitive agreement, satisfactory completion of due diligence reviews and receipt of various board, stockholder and regulatory approvals. Subject to such conditions, such proposals were accepted by the Company. Negotiations with respect to such proposals terminated prior to the commencement of negotiations with respect to the Subscription Agreement and the Acquisition Agreement. Unimedia intends continuously to review all aspects of its investment in the Company, including the Company's business operations, financial results and condition and prospects, the market price of Common Stock, conditions in the securities markets generally, general economic and industry conditions and progress with respect to the Unimedia Acquisition. Unimedia reserves the right, based on its continuing review of these and other relevant factors, to acquire additional shares of Common Stock in the open market, in privately negotiated transactions or otherwise, to dispose of any or all of the shares of Common Stock it will acquire pursuant to the Subscription Agreement or may otherwise acquire, or otherwise to change its intention with respect to any or all of the matters referred to in this Item 4. Except as set forth in this statement, neither Unimedia nor, to Unimedia's knowledge, any of the persons listed on Schedule I, has any other present plans or proposals which would result in or relate to (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. However, based on its continuing review of the factors referred to above or in connection with the Unimedia Acquisition, Unimedia, the persons listed on Schedule I, Unimedia's shareholders or their respective representatives may discuss one or more of the foregoing matters with the Company, its directors or management or other shareholders of the Company, or may formulate plans or proposals relating to one or more of the foregoing matters. Unimedia reserves the right to take any and all actions it may deem appropriate to maximize the value of its investment in the Company or facilitate the Unimedia Acquisition. Item 5. Interest in Securities of the Issuer The only shares of the Company's Common Stock that Unimedia beneficially owns are the 1,000,000 shares of Common Stock to be acquired pursuant to the Subscription Agreement, which shares represent approximately 14.9% of the outstanding Common Stock. Unimedia possesses the sole power to vote or direct the vote of and to dispose of or direct the disposition of all shares of Common Stock beneficially owned by it. Pursuant to the Acquisition Agreement, Harvey Bibicoff has undertaken to refrain from selling a specified percentage of his shares of the Company prior to completion of the Unimedia Acquisition, and in any case by September 30, 1996. Mr. Bibicoff has also agreed to vote in favor of the Unimedia Acquisition at any shareholders meeting of the Company called to approve such transaction. Unimedia disclaims that it and Mr. Bibicoff constitute a "group" within the meaning of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, and Unimedia does not believe that such agreements create a circumstance of shared voting or dispositive power. Accordingly, Unimedia also disclaims any beneficial ownership in Common Stock held by Mr. Bibicoff. Except as described above, neither Unimedia nor, to Unimedia's knowledge, any person named on Schedule I beneficially owns any shares of Common Stock or has effected any transactions in Common Stock during the past 60 days. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Company Unimedia has entered into the Acquisition Agreement and the Subscription Agreement with respect to the Common Stock as set forth under Items 4 and 5. The information in such Items and the Exhibits hereto are incorporated herein by reference. In addition to the rights described under Items 4 and 5, Unimedia has certain rights under the Subscription Agreement to cause the Company to register under the Securities Act of 1933, as amended, the Common Stock purchased pursuant to the Subscription Agreement. These rights are exercisable only if the Unimedia Acquisition has not been completed by September 30, 1996. Additionally, pursuant to the Acquisition Agreement, the Company has undertaken not to issue or create any new shares or options without the prior written consent of Unimedia, except pursuant to the exercise of options held by employees or former employees granted prior to the execution of the Acquisition Agreement. Item 7. Material to be filed as Exhibits 1. The Agreement dated July 27, 1996 between the Company, Unimedia and Harvey Bibicoff. 2. The Subscription Agreement dated July 27, 1996 between the Company and Unimedia. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 1, 1996 Unimedia S.A. By /s/Gilles Assouline ------------------------------ Name: Gilles Assouline Title: President du Directoire Schedule I DIRECTORS AND EXECUTIVE OFFICERS OF UNIMEDIA S.A. The name, business address, principal occupation or employment and citizenship of each executive officer, Member of the Executive Board and Member of the Supervisory Board of Unimedia S.A. and persons who may be deemed to be controlling persons with respect to Unimedia S.A. is set forth below. Members of the Executive Board and Executive Officers of Unimedia S.A. Name Residence Address or Principal Business Occupation or Address and if Employment or Cittizenship different, Address of Principal or Place of Principal Office Business Organizaiton Gilles Assouline Immeuble le Levant, Chief Executive French Chief Executive 2 rue du Officer and Member Officer and Member Nouveau Bercy, 94220, of Executive Board of Executive Board Charenton, France Anne-Marie Assouline Immeuble le Levant, Director and Member French Director and Member 2 rue du of Executive Board of Executive Board Nouveau Bercy, 94220, Charenton, France Members of the Supervisory Board of Unimedia S.A. Name Residence Address or Principal Business Occupation or Address and if Employment or Cittizenship different, Address of Principal or Place of Principal Office Business Organizaiton Jean-Pierre Souviron Kapt' Chariman of Kapt' French Chairman of 3, Nede Pondichery Supervisory 75015 Paris, France Jean-Jacques Assouline Immeuble le Levant, Vice President French Vice President 2 rue du and Member of and Member of Nouveau Bercy, 94220, Supervisory Board Supervisory Board Charenton, France Michel Assouline Immeuble le Levant, Member of French 2 rue du Supervisory Board/ Nouveau Bercy, 94220, Directeur des Charenton, France Operations Multimedia 11 bis, Holding Company France Investissement Rue du Colisee, Represented by 75008, Paris, France Michel Assouline Diamond Productions 37 Rue des Mathurins, Entertainment, France Represented by 75008, Paris, France Movie Production Jean-Jaques Assouline and Holding Company MMP 43/45 Avenue Kleber, Holding Company France Represented by 75116, Paris, France Claude Berda Media Venture 43/45 Avenue Kleber, Holding Company France Represented by 75116, Paris, France Marc Sillam Other Name Residence Address or Principal Business Occupation or Address and if Employment or Cittizenship different, Address of Principal or Place of Principal Office Business Organizaiton Claude Berda 43/45 Avenue Kleber, Chairman of MMP French 75116, Paris, France Gilles Assouline (See Above) Exhibit Index Exhibit No. Document 1. The Agreement dated July 27, 1996 between the Company, Unimedia and Harvey Bibicoff. 2. The Subscription Agreement dated July 27, 1996 between the Company and Unimedia. EX-1 2 AGREEMENT Exhibit 1 AGREEMENT, dated July 27, 1996 (as of July 22, 1996) among HARMONY HOLDINGS INC., HARVEY BIBICOFF and UNIMEDIA S.A. This Agreement is made with reference to the following: 1) The shareholders of UNIMEDIA desire to sell all their outstanding ordinary shares of UNIMEDIA, and Harmony Holdings Inc. (hereinafter "HHI") desires to purchase such shares, in exchange for a total amount of 20,000,000 shares of the Preferred Stock and Common Stock (per value $0.1 per share) of HHI; 2) Prior to the execution of a sale and purchase agreement setting forth the terms and conditions of such sale and purchase, UNIMEDIA agrees to purchase this day 1,000,000 shares of Common Stock of an aggregate amount of $2,000,000 pursuant to the terms and conditions set forth in the subscription agreement set out in Appendix A; and 3) UNIMEDIA envisages to purchase after the execution of the Agreement, on the open market, a certain number of HHI shares which is currently contemplated to be up to 1,000,000 shares at a price no higher than $2.50 per share. Now, therefore, the parties to this agreement hereby agree, upon the terms and conditions hereinafter set forth as follows: 1. Sale and Purchase Agreement The parties hereto agree to negotiate and execute in good faith before September 30, 1996, an agreement that will set forth the terms and conditions of, in particular: - the sale by the UNIMEDIA shareholders of their UNIMEDIA shares and the purchase by HHI of such shares in exchange for shares of Preferred Stock, par value $0.1 per share, and Common Stock par value $0.1 per share, of HHI; - the outstanding UNIMEDIA shares shall be purchased on the following basis: 100% of the outstanding UNIMEDIA shares is equal to 20,000,000 HHI Common Stock and Preferred Stock shares; - the parties will agree prior to the execution of the sale and purchase agreement, the law that will govern and construe such agreement; - representations and warranties granted by UNIMEDIA usually granted in this type of transaction, (covering in particular organization, subsidiaries, capital stock, authority to execute and deliver the agreement, financial statements, title to properties, authority for operation, intellectual property and licenses, insurance contracts, no adverse action, compliance to law, no default, no adverse change, outstanding funded debt, absence of guarantees, labor disputes, outside interest, litigation, bank accounts, articles, by-laws, minutes and permits disclosure power of attorney, changes since the last balance sheet date, bankruptcy); - representations and warranties granted by Mr. Harvey BIBICOFF and HHI usually granted in this type of transaction (covering in particular organization, subsidiaries, capital stock, authority to execute and deliver the agreement, financial statements, title to properties, authority for operation, intellectual property and licenses, insurance contracts, no adverse action, compliance to law, no default, no adverse change, outstanding funded debt, absence of guarantees, labor disputes, outside interest, litigation, bank accounts, articles, by-laws, minutes and permits disclosure power of attorney, changes since the last balance sheet date, bankruptcy); and UNIMEDIA shall not grant HHI any representation or warranty related to the PIXEL group covering events prior to the PIXEL acquisition which will take place in any event before October 15, 1996, UNIMEDIA shall, however, assign the benefit of the representations and warranties granted to UNIMEDIA by the founders of PIXEL. 2. Representation and Warranties of UNIMEDIA - - UNIMEDIA hereby represents and warrants that the execution and delivery of this agreement and the carrying out of the terms by UNIMEDIA have been duly authorized by all necessary corporate action. - - UNIMEDIA hereby represents and warrants that it has sufficient funds in its bank accounts to pay the two million dollars for the Purchase of the HHI shares referred to in the Subscription Agreement attached hereto. UNIMEDIA will instruct its bank to reserve this amount for such payment. - - UNIMEDIA warrants and represents that at the time of closing of the contemplated acquisition that: 1. UNIMEDIA will have, an unencumbered asset, US $7.5 million in cash and/or Harmony stock. 2. UNIMEDIA will have no banking debt. 3. PIXEL will have no banking debt except the debts owed to UNIMEDIA and whatever amount has been drawn down against its secured working capital bank line. - - UNIMEDIA hereby represents and warrants that at least 51% of its shareholders have agreed and undertaken to exchange all their outstanding shares for HHI Common and Preferred Stock under the terms and conditions set forth in the agreement. 3. Representations and Warranties of HHI HHI hereby represents and warrants that: - - The execution and delivery of this agreement and the carrying out of the terms hereof have been duly authorized by all necessary corporate action, and the board of directors of HHI has approved this Agreement and the execution, delivery and carrying out thereof. - - HHI has provided to UNIMEDIA, as reflected in Appendix 3 hereto, a copy of the unaudited consolidated balance sheet of HHI as of March 31, 1996, and statements of operations and cash flows for the nine months ended March 31, 1996 (the "Financial Statements"). - - The Financial Statements described above, including the notes and schedules thereto, have been prepared in accordance with generally accepted accounting principals in the US, applied on a consistent basis and presently fairly the consolidated financial position and results of the operations and cash flows of HHI and its subsidiaries and the changes in its financial condition at such date and or such periods. - - HHI and its subsidiaries have no liabilities or obligations (absolute, accrued, contingent or otherwise) which were not fully reflected or served against in the Financial Statement, except for liabilities and obligations incurred in the ordinary course of business since the date of the Financial Statement. - - On the basis set forth in Section 1(b), the purchase and sale of 100% of UNIMEDIA shares referred to in Section 1 above will grant the shareholders of UNIMEDIA approximately 69% of the share capital of HHI on a fully diluted basis (i.e., approximately 69% of the voting rights and 69% of the rights to dividends). 4. Representations and Warranties of Harvey BIBICOFF and HHI Mr. Harvey BIBICOFF and HHI, jointly and severally, hereby represent and warrant that: - - Since the date of the Financial Statement no material adverse change in the assets business or forecast of HHI and its subsidiaries has occurred; - - HHI or Mr. Harvey BIBICOFF are not structuring the acquisition of UNIMEDIA by HHI as a two-step transaction as a method of receiving the financing and not proceeding with the acquisition, and know no reasons, liabilities or obligations (disclosed, nondisclosed, absolute, accrued, contingent or otherwise) which will cause them to do so; and - - The Shareholders that will hold Preferred Stock shares referred to in Section 1 will have identical liabilities, rights and obligations as the ones holding the Common Stock shares. 5. Undertakings of HHI and Mr. Harvey BIBICOFF - - Mr. Harvey BIBICOFF undertakes to take all steps in view of the completion of the sale and purchase of the UNIMEDIA shares referred to in Section 1 above, and in particular and if necessary, to vote in favor of such sale and purchase at HHI's shareholders' meeting called to approve the transaction referred to in this agreement. HHI undertakes not to issue or create any new HHI share or option without the prior written consent of UNIMEDIA, except pursuant to the exercise of options help by employees or former employees granted prior to the execution of this agreement. Mr. Harvey BIBICOFF undertakes to refrain from selling in any manner 80% of his HHI shares prior to the completion of the purchase of UNIMEDIA by HHI, and in any case by September 30, 1996. 7. Governing Law This Agreement shall be construed in accordance with the laws of France and the "Tribunal de Commerce" de Paris will be competent. HARVEY BIBICOFF, by: /s/ Harvey Bibicoff ------------------------ UNIMEDIA, by: /s/ Gilles Assouline ------------------------ HARMONY HOLDINGS INCORPORATION, by: /s/ Harvey Bibicoff ------------------------ EX-2 3 SUBSCRIPTION AGREEMENT Exhibit 2 HARMONY HOLDING, INC SUBSCRIPTION AGREEMENT This STOCK SUBSCRIPTION AGREEMENT (hereinafter sometimes referred to as the "Agreement"), made and entered into this day of July, 1996, between HARMONY HOLDINGS, INC., a Delaware corporation (hereinafter referred to as "HHI"), and UNIMEDIA, S.A., a company whose siege social is in the Republic of France (hereinafter referred to as "Unimedia"). This Agreement is made with reference to the following: 1. HHI has authorized a class of Common Stock, par value $.01 per share (hereinafter referred to as "Common Stock") with a sufficient number thereof remaining unissued for the purposes of carrying out this Agreement. 2. Unimedia desires to purchase 1,000,000 shares of Common Stock on the terms and conditions hereinafter in this Agreement set forth. 3. HHI desires to sell to Unimedia 1,000,000 shares of Common Stock on the terms and conditions hereinafter in this Agreement set forth. 4. All the terms used in this Agreement to express currency shall mean and refer to the currency of the United States of America. 5. Unimedia and HHI envisage this stock purchase to be the first step in a series of steps which will result in the shareholders of Unimedia becoming the majority shareholder of HHI. NOW THEREFORE, in consideration of the mutual covenants set forth in this Agreement and other good and valuable consideration, the parties hereto hereby agree, upon the terms and conditions hereinafter set forth as follows: 1. Sale and Purchase 1.1. Upon the terms and conditions hereinafter set forth, HHI hereby sells to Unimedia one Million (1,000,000) shares of Common Stock, from its authorized but unissued Common Stock, for a purchase price of two dollars ($2) per share, or an aggregate purchase price of two Million ($2,000,000) Dollars. 1.2. Upon the terms and conditions hereinafter set forth, Unimedia hereby purchases from HHI one Million (1,000,000) shares of HHI Common Stock, from its authorized but unissued Common Stock, for a purchase price of Two Dollars ($2.00) per share, or an aggregate purchase price of Two Million ($2,000,000) Dollars. 2. Payment and Issue 2.1. Pursuant to Section 2.03 below, Unimedia will pay to HHI in funds immediately realized in Los Angeles, California, the sum of Two Million ($2,000,000) Dollars. 2.2. Upon receipt of the funds required by Section 2.01 of this Article, HHI will instruct its transfer agent to issue and deliver in the name of Unimedia the certificate or certificates representing the One Million (1,000,000) shares of Common Stock. HHI will deliver to Unimedia the said certificate within a maximum of ten days of the payment of the funds. 2.3. Unimedia will pay the funds upon receipt of: - the minutes of the board of HHI ratifying the agreement signed this day between Mr. Harvey Bibicoff, HHI and Unimedia setting forth in particular the terms of the acquisition by HHI of Unimedia and approving the said acquisition after reviewing and discussing the fairness opinion related hereto, - a legal opinion of HHI's counsel confirming that no shareholders meeting nor additional board action is necessary for the execution of the long form agreement and the completion of the acquisition of Unimedia by HHI. 3. Registration Rights Provided that by September 30, 1996 the proposed acquisition of Unimedia by HHI has not been completed, Unimedia may demand at any time on or after September 30, 1996 that HHI register the shares of Common Stock purchased pursuant to this agreement. In that event, HHI undertakes to file a Registration Statement covering such shares as soon as possible and with no undue delay. 4. Representations and Warranties of HHI 4.1. HHI is a corporation organized and existing under the laws of the State of Delaware and is in good standing. Each subsidiary of HHI, referred to in the Registration Statement on Form S-1 under the Securities Act of 1933, as amended (hereinafter referred to as the "Act"), with the Securities and Exchange Commission, No. 333-2648, is a corporation organized and existing under the laws of its jurisdiction of incorporation and is in good standing. 4.2. A copy of Amendment No. 3 to the Registration Statement referred to in Section 4.01 of this Article IV has heretofore been delivered to Unimedia. The statements made therein are true and correct and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 4.3. The execution and delivery of this Agreement and the carrying out of the terms hereof have been duly authorized by all necessary corporate action and the Board of Directors of HHI has approved this Agreement, the execution, delivery and carrying out thereof and the issue and delivery of certificates representing shares of Common Stock sold pursuant to this Agreement. 4.4. HHI has sufficient authorized but unissued shares of Common Stock to carry out this Agreement, and when certificates representing the shares sold pursuant to this Agreement are executed and delivered all shares of Common Stock represented thereby will be duly authorized, issued and outstanding, fully paid and non-assessable. These shares of Common Stock are of the same class as all other shares of Common Stock issued and outstanding. The officer or officers whose signatures appear on such certificates have been duly authorized to execute certificates representing shares of Common Stock, notwithstanding that one or more of them may not any longer hold the office indicated on such certificates. HHI shall use the $2,000,000 as working capital and in the ordinary course of HHI's business, and this until Unimedia's shareholders become HHI's largest shareholder. 5. Representations and Warranties of Unimedia 5.1. Unimedia, a company duly organized under the laws of the Republic of France, is in full possession of all its corporate rights, powers and franchises. 5.2. Unimedia has full power and authority under such laws and its organic documents to enter into this Agreement and carry out its terms. 5.3. The execution and delivery of this Agreement and the carrying out of the terms hereof have been duly authorized by all necessary action on the part of Unimedia and the managing body or conseil de surveillance or Unimedia and has approved this Agreement, the execution, delivery and carrying out thereof and the payment for the shares of Common Stock sold pursuant to this Agreement. 5.4. Unimedia is acquiring the Common Stock for its own account and not with a view to any distribution thereof or any participation in any such distribution. 5.5. Unimedia repeats the representations and warranties made in the PROSPECTIVE INVESTOR QUESTIONNAIRE which it has completed and delivered to HHI at or before the execution of this Agreement. 5.6. Unimedia understands and agrees that the certificate representing the shares of Common Stock sold to it pursuant to this Agreement may bear a restrictive legend indicating that the shares so represented have not been registered under the Act and may not be sold in the absence of such registration or an exemption therefrom, and that HHI may instruct its transfer agent to place "stop transfer" against those shares. 5.7. Except as stipulated in Article III above, Unimedia understands and agrees that HHI is not under any obligation to register the shares sold pursuant to this Agreement under the Act, or any state "blue sky" law, so called. 6. Governing Law This Agreement shall be construed in accordance with the laws of the State of California applicable to contracts made and to be performed in that State, except where the law of some other jurisdiction mandatorily applies. 7. Non-Assignability This Agreement, and the rights and duties set forth therein, may not be assigned in whole or in part by either party hereto, provided, however, that HHI may assign the funds to be received pursuant to this Agreement to its subsidiaries. 8. Integration This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. 9. Counterparts This Agreement may be signed in any number of counterparts, each of which shall be an original, but all of which shall constitute but one and the same instrument. 10. Notices All notices, requests, demands and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed given to the party to whom addressed (i) when delivered personally to such party, (ii) on the business day after being sent to such party by overnight courier or overnight mail, charges prepaid, or by facsimile transmission, charge prepaid or chargeable to the transmitting party, confirmed by the sending apparatus, (iii) on the next business day after being sent to such party by telegraph, telex or cable, toll prepaid, or (iv) three business days after being sent to such party registered or certified first class mail, or the equivalent (return receipt requested or equivalent serviced, postage prepaid) (provided that if such mailed material shall bear and address other than the country in which it is deposited in the mail, then it shall be sent by registered or certified first class air mail, provided that this requirement shall not apply to mail bearing an address in, and origination from, Canada, the United States of America or the Republic of Mexico, in each case addressed to the other parties to this Agreement at the address of such set forth in the PROSPECTIVE INVESTOR QUESTIONNAIRE or at such other address as may be set forth in a written notice given in conformity with this Section 10. 11. Captions Title or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision thereof. 12. Gender and Number Terms in the masculine shall include the feminine and neuter, and terms in the singular shall include the plural. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in their respective company names by their respective company officers thereunder duly authorized, all as of the date first above written. HARMONY HOLDING, INC. by: /s/ Harvey Bibicoff ------------------------ its Chairman and Chief Executive Officer UNIMEDIA, SA by: /s/ Gilles Assouline ------------------------ its Chairman, Chief Executive Officer and President Du Directoire -----END PRIVACY-ENHANCED MESSAGE-----