Exhibit 10.25
KINNEVIK MEDIA PROPERTIES LTD.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 8, 1997
Odyssey Pictures Corporation
(f/k/a Communications & Entertainment Corp.)
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
In accordance with our discussions, set forth below are the
essential deal terms of the agreement by and between Kinnevik Media
Properties, Ltd. ("KMP") and Odyssey Pictures Corporation (f/k/a
Communications & Entertainment Corp.) ("OPC") concerning KMP's purchase of
500,000 shares of OPC Senior PIK Redeemable and Convertible Preferred Stock,
Series ____ (the "Preferred Stock").
The essential deal terms of our agreement are as follows.
1. KMP agrees to purchase 500,000 shares of OPC $1.00 par
value Preferred Stock at a price of $1.00 per share. 250,000 shares of
Preferred Stock will be purchased at closing; 125,000 will be purchased 90
days after closing; and 125,000 will be purchased 270 days after closing.
2. The Preferred Stock will bear interest at the rate of 10%
per annum and will be paid-in-kind (i.e., by the issuance of additional
shares of Preferred Stock) semi-annually at par value per share.
3. The Preferred Stock will be convertible at any time during
the five (5) year term commencing at closing, at the option of KMP. Each
share of Preferred Stock will be convertible into one share of common stock
of OPC. The OPC common stock reserved for the foregoing conversion right
(sufficient to cover the initial shares of Preferred Stock issued as well as
future
PIK dividend shares) shall have most favored nations piggy-back registration
rights with respect to any registration of OPC shares from and after the
closing.
4. The Preferred Stock will be subject to call and redemption
by OPC at a price of $1.25 per share in the event OPC's common stock trades
at a price of $2.00 or more for a period of twenty consecutive trading days.
The Preferred Stock shall be senior to all other equity of OPC and, except as
otherwise provided herein, the terms of the Preferred Stock shall be
customary for transactions of this sort.
5. In partial consideration for this investment, OPC shall
endeavor to do the following during the initial 5 year term:
a) grant to KMP, on mutually acceptable terms,
television distribution rights to motion pictures owned or
controlled, or to be owned or controlled by OPC (KMP acknowledges
that OPC is in the business of motion picture distribution and
that OPC may and shall grant to third parties television
distribution rights to OPC's pictures in conjunction with OPC
distribution efforts).
b) OPC shall endeavor to secure television distribution
rights for KMP from third party sources.
c) OPC shall endeavor to introduce various projects that
would be of interest to KMP.
As and when KMP acquires rights resulting from OPC's efforts
hereunder, the parties shall mutually determine the value of such services
and such agreed upon value shall serve to redeem shares of the Preferred
Stock that have been issued to KMP, if any, at the rate of one share for each
dollar of agreed upon value.
6. In addition to anything else contained herein, KMP's
obligation to close this transaction is subject to its accountant's reviewing
and confirming that the structure of this investment will not, in their sole
discretion, adversely affect KMP's financial structure or financial reporting
requirements. In the event that KMP's accountant's object to the structure
of this investment, the parties agree to use their reasonable efforts to
develop a mutually acceptable alternative structure.
7. The closing of this transaction is intended to occur on or
before August 15, 1997 (provided that the closing may be adjourned by either
party for up to 30 days thereafter) at the offices of Pavia Harcourt.
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This letter, when signed by KMP and OPC shall serve as a binding
agreement subject only to KMP's conclusion of its due diligence review and
the approval of KMP's Board of Directors.
We agree that we may enter into a long-form agreement with
respect to these matters as soon hereafter as reasonably practicable, which
shall not in any event be inconsistent with any of the terms of this letter
agreement. Such agreement will include customary, standard provisions with
respect to such matters as representations, warranties, arbitration, and the
like, all subject to good faith negotiation between the parties. It is
further agreed, however, that until such time as such long form agreement
shall have been executed by both parties, (a) this letter agreement shall be
binding upon both of us and (b) both parties shall have the applicable rights
and obligations arising out of customary representations, warranties and
arbitration.
Very truly yours,
KINNEVIK MEDIA PROPERTIES, LTD.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
AGREED TO AND ACCEPTED:
ODYSSEY PICTURES CORPORATION
By: /s/ Xxx Xxxxx, President
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KINNEVIK MEDIA PROPERTIES LTD.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 8, 1997
Odyssey Pictures Corporation
(f/k/a Communications & Entertainment Corp.)
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We refer to the deal memo letter agreement being entered into by
Kinnevik Media Properties, Ltd. ("KMP") and Odyssey Pictures Corporation
(f/k/a Communications & Entertainment Corp.) (hereinafter defined as "OPC"),
dated as of the date hereof, relating to KMP's purchase of 500,000 shares of
OPC Preferred Stock (the "Preferred Stock Letter Agreement").
In consideration of the parties entering into the aforesaid deal
memo letter agreement, KMP hereby agrees to advance OPC the sum of $100,000,
payable simultaneously with, and conditioned upon, the execution of the
foregoing letter agreement.
The Advance shall be credited at KMP's election at any time on or
before the closing towards KMP's obligation to pay OPC any amounts due it
under (a) the Preferred Stock Letter Agreement or (b) the October 7, 1996
Agreement by and between KMP and OPC, Odyssey Distributors Ltd. and Odyssey
Distributors B.V. (the "1996 Agreement"). The Advance shall bear interest at
prime plus 1% until such sum is applied towards KMP's obligation in
accordance with the preceding sentence.
Nothing contained herein (including the payment of the Advance to
OPC and the application, or not, of the Advance as a credit to other amounts
due OPC or its affiliates) shall be deemed to be a waiver of either party's
rights or remedies under the 1996 Agreement or otherwise, all of which rights
and remedies are hereby specifically reserved.
We agree that we may enter into a long-form agreement with
respect to these matters as soon hereafter as reasonably practicable, which
shall not in any event be inconsistent with any of the terms of this letter
agreement. Such agreement will include customary, standard provisions with
respect to such matters as representations, warranties, arbitration, and the
like, all subject to good faith negotiation between the parties. It is
further agreed, however, that until such time as such long form agreement
shall have been executed by both parties, (a) this letter agreement shall be
binding upon both of us and (b) both parties shall have the applicable rights
and obligations arising out of customary representations, warranties and
arbitration.
If this meets with your understanding, please sign where
indicated below.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President
AGREED TO AND ACCEPTED:
ODYSSEY PICTURES CORPORATION
By: /s/ Xxx Xxxxx, President
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