The Board of Directors of IMS S.A. (“Company”, “Issuer”, “IMS”) informs that today, between the Issuer, IMS r&d sp. z o.o. (“IMS r&d”) and two natural persons (“Private Investors”), an investment agreement was signed concerning establishing and operating a special purpose vehicle for the future manufacturing, distribution, extension and operation of the “Muzola” Jukebox System. An estimated value of funds for the implementation of the planned investment shall consist of the Issuer’s cash contribution – in the amount of PLN 35,300, Private Investors’ cash contribution – in the amount of PLN 200,000 and the Issuer’s loan for the special purpose vehicle in the amount of PLN 264,700.
At present IMS r&d is conducting advanced development works on the prototype of a jukebox, and a pilot production batch of the device has been manufactured. A jukebox is a modern device with the access to a large music base, placed in pubs, bars and other locations where against payment you may play a musical work of your choice. In the nearest future the new solution shall be commercialised by creating the “Muzola” Jukebox System (“Muzola Project”) which shall constitute a joint project of IMS, IMS r&d and Private Investors, run based on terms and conditions specified in the Agreement and in the agreement of the special purpose vehicle which shall be formed so as to run the above mentioned project. The role of the Private Investors participating in the implementation of this project, apart from investing cash, is the application of their professional experience and know-how so as to develop the distribution network for the “Muzola” Jukebox System. Apart from the cash investment, the Issuer shall ensure to the project the access to a wide and high quality music base, whereas IMS r&d shall provide technical support for the project. Within 3 months of the date of registration of the special purpose vehicle, IMS r&d shall sell and transfer to the special purpose vehicle all intellectual property rights, including copyrights concerning the software and documentation developed for the needs of the implementation of the Muzola Project as well as 5 manufactured jukeboxes for the amount of PLN 217,288.
Development and commercialization of the jukebox project is in line with the Issuer’s strategy, where one of the components of development is launching to the market of new, technologically advanced devices.
In the initial stage, the Issuer shall cover 15% of shares in the newly established special purpose vehicle. After IMS r&s has transferred to the special purpose vehicle copyrights and the jukeboxes mentioned above, within 24 months starting from the date of transferring the intellectual property rights IMS shall be entitled to acquire from the Private Investors (“Call Option I”) in total 45% of shares in the special purpose vehicle (22.5% from each of the Private Investors) at the total price of PLN 22,500, i.e. PLN 11,250 for 22.5% of shares each of the Private Investors is entitled to. If Call Option I is applied, the parties shall ultimately hold the following share in the share capital of the special purpose vehicle: 60% – IMS, 40% – Private Investors total (20% each of the Private Investors). At the same time, within 60 days of exercising Call Option I, IMS shall swap the loan in the amount of PLN 264,700 into 9.9% of newly issued shares in the special purpose vehicle (99 shares). When the loan is swapped, the Private Investors shall be entitled to cover in total, in equal proportions, 66 newly issued shares (33 shares for each of the Private Investors) at the nominal value. After performing these operations, the share of IMS and the total share of the Private Investors shall remain at the following level: 60% – IMS, 40% – Private Investors total. If any of the Private Investors fails to dispose of shares at the request of IMS arising from Call Option I, the defaulting Private Investor shall be obliged to pay at the demand of IMS the guarantee penalty in the amount of PLN 2,000,000 for each case of evading the obligation to dispose of shares. The payment of the guarantee penalty or of its multiple shall not exclude the right of IMS to claim compensation on general terms. If IMS does not exercise Call Option I within periods described above, in the period of the following 6 months the Private Investors shall be entitled to acquire from IMS (hereinafter: “Call Option II“) 15% of shares in the special purpose vehicle at the price of PLN 7,500, and each of the Private Investors shall be entitled to acquire 7.5% of shares at the price of PLN 3,750. In such a case the Private Investors shall ultimately hold 100% of shares in the share capital of the special purpose vehicle.
If IMS r&d fails to transfer to the special purpose vehicle, within 3 months of the date of registration of the special purpose vehicle, all intellectual property rights, including copyrights concerning the software and documentation developed for the needs of the implementation of the Muzola Project as well as 5 manufactured jukeboxes for the amount of PLN 217,288, IMS and IMS r&d shall be jointly and severally obliged to pay at the request of the Private Investors the guarantee penalty in the amount of PLN 2,000,000 for each confirmed case of breaching these duties. The payment of the guarantee penalty or of its multiple shall not exclude the right of IMS to claim compensation on general terms.
The agreement has been conducted for a specified period of 5 years or for the period of joint participation in the special purpose vehicle, whichever continues longer. After the lapse of the date indicated above, the Agreement shall transform into an agreement for an unspecified period of time and may be terminated on a six-month notice effective as at the end of a calendar month. The Agreement is of conditional nature and to be effective it needs the consent of the Issuer’s Supervisory Board to the Issuer’s participation in the special purpose vehicle, obtained within 21 days of signing of the Agreement. The establishment of the special purpose vehicle should take place within 14 days of obtaining the consent mentioned above.