On Friday, May 18, 2001, Film Roman announced they have formally terminated the purchase transaction with Pentamedia Graphics, Ltd. in light of Pentamedia's inability to cure a material breach in the deal. Film Roman has officially notified Pentamedia that they are in material breach of the Stock Purchase Agreement signed January 31, 2001 and the Memorandum of Understanding between the two companies signed on April 24, 2001. Under the Stock Purchase Agreement, in exchange for US$15,000,000, Pentamedia was to acquire a 60% stake in Film Roman through the purchase of newly issued Film Roman common stock. Under the original terms of the Agreement, Pentamedia was required to make its payment on March 26, 2001. At Pentamedia's request, Film Roman extended the payment date until April 13, 2001. After Pentamedia failed to make the April 13 payment, Film Roman extended the date once again, this time to April 28, 2001. Pentamedia again failed to make the April 28 payment. According to Film Roman, Pentamedia has recently indicated that it is unwilling or unable to adhere to a key component of the latest Memorandum of Understanding, which entails providing an acceptable guarantee of payment of the agreed upon purchase price. As a result, Film Roman has terminated the transaction between the companies and intends to pursue all legal remedies available to it. Now free of the restrictions imposed by the Stock Purchase Agreement, the company is now prepared to seek other strategic alliances and financing sources.
Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.
