EXHIBIT 5.1
SOLOVAY MARSHALL & EDLIN, P.C.
845 THIRD AVENUE
NEW YORK, NEW YORK 10022
May 13, 1997
To: Sellet Marketing Corp.
As Purchaser of the Series A 6%
Convertible Participating
Preferred Stock of
Kideo Productions, Inc.
c/o: Krieger & Prager
319 Fifth Avenue
New York, New York 10016
Re: Kideo Productions, Inc.
Ladies and Gentlemen:
We have acted as counsel to Kideo Productions, Inc., a Delaware
corporation (the "Company"), in connection with the issuance and sale to you on
the date hereof of 750 shares (the "Preferred Shares") of Series A 6%
Convertible Participating Preferred Stock of the Company (the "Series A
Preferred Stock"), pursuant to that certain Stock Purchase Agreement, dated as
of May 12, 1997 (the "Stock Purchase Agreement"), between you and the Company
(the Stock Purchase Agreement and the Registration Rights Agreement and Joint
Escrow Instructions attached as Annexes thereto are collectively called the
"Applicable Agreements"). This opinion is being rendered pursuant to Section
9(d) of the Stock Purchase Agreement.
In connection with rendering the opinions set forth herein, we have
examined:
(a) a fully executed copy of each of the Applicable Agreements;
(b) the Certificate of Incorporation and the By-Laws of the Company,
including the Certificate of Designations relating to the Series A Preferred
Stock (the "Certificate of Designations"), in each case as amended through the
date hereof;
(c) certificates, each dated a recent date, relating to the good standing
of the Company in the States of Delaware and New
York;
(d) originals or copies, certified or otherwise identified to our
satisfaction, of resolutions and/or other corporate proceedings which have been
adopted or taken by the Company's Board of Directors; and
(e) originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate and official records, certificates
and records of governmental and other public authorities, and other instruments
of or relating to the Company as we have deemed necessary or appropriate for the
purposes of rendering this opinion.
In rendering this opinion, we have relied upon and assumed the following:
(1) We have assumed the authenticity of all documents and instruments
submitted to us as originals, the genuineness of all signatures, and the
conformity to original documents and instruments of all documents and
instruments submitted to us as certified, photostatic, facsimile or telecopied
copies.
(2) We have assumed the legal capacity of each individual signatory, and
the power and authority of each corporate signatory (other than the Company), of
a document or instrument to execute said document or instrument.
(3) We have assumed and relied upon as facts: (a) that you are duly
qualified and in good standing in your jurisdiction of incorporation or
organization; (b) that you have complied fully with each and every of your
representations, warranties and agreements set forth in the Stock Purchase
Agreement; and (c) that each of such representations and warranties is accurate
as of the date hereof.
(4) As to matters of fact relating to the Company (including any factual
matter set forth in one of the representations and warranties made by the
Company in Section 3 of the Stock Purchase Agreement, to the extent that the
subject matter of any such representation and warranty is covered by this
opinion), we have relied upon (a) certificates or other written statements of
governmental or other public authorities (and/or oral statements made by such
authorities to Corporation Service Company as our agent and confirmed to us
orally and/or in writing by such agent) and (b) certificates or other oral
and/or written statements of officers of the Company. We have no reason to
believe, and do not believe, that we are not justified in relying upon the
aforesaid certificates or other written statements as to matters of fact.
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(5) We have assumed (a) the due authorization, execution and delivery of
each of the Applicable Agreements by each party thereto other than the Company,
and (b) that each of the Applicable Agreements constitutes the valid and binding
agreement of the party or parties thereto other than the Company, enforceable
against such party or parties in accordance with the terms of such Applicable
Agreement.
* * * *
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated as a corporation under the laws
of the State of Delaware and is an existing corporation in good standing under
such laws, with all corporate power and corporate authority necessary under such
laws to own or lease (as the case may be) and operate its properties and to
conduct its business as currently conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
wherein such qualification is necessary, except for jurisdictions wherein the
failure to so qualify would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of operations,
business or properties of the Company (a "Material Adverse Effect").
2. The authorized capital stock of the Company consists of: (a) 15,000,000
shares of Common Stock, par value $.0001 per share (the "Common Stock"); and (b)
5,000,000 shares of Preferred Stock, par value $.0001 per share (the "Preferred
Stock"), of which 4,000 shares have been authorized and designated as the Series
A Preferred Stock.
3. The Common Stock is registered pursuant to Section 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended, and since June 24, 1996 (the
effective date of the Company's initial public offering) the Company has timely
filed all material required to be filed pursuant to Section 13(a) or 15(d) of
such Act (except as otherwise noted on Annex V to the Stock Purchase Agreement).
4. The issuance and sale of the Preferred Shares, and the issuance of the
shares of Common Stock to be issued upon conversion thereof in accordance with
the Certificate of Designations (such shares of Common Stock, the "Conversion
Shares"), have been duly authorized and, when the Preferred Shares and the
Conversion Shares have been issued and duly delivered against the consideration
therefor as contemplated by, respectively, the Stock Purchase Agreement and the
Certificate of Designations, the Preferred Shares
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and the Conversion Shares will be validly issued, fully paid and nonassessable,
and the holders thereof will not be subject to personal liability solely by
reason of being such holders. Neither the Preferred Shares nor the Conversion
Shares are subject to preemptive rights of any shareholder of the Company.
5. The Company has full corporate power and corporate authority necessary
under the laws of the State of Delaware to execute, deliver and perform each of
the Applicable Agreements and to consummate the various transactions
contemplated thereby, including (but not limited to) the issuance, sale and
delivery of the Preferred Shares and the Conversion Shares (collectively, the
"Transactions"). The Company's execution, delivery and performance of the
Applicable Agreements, its consummation of the Transactions and its compliance
with the terms of the Applicable Agreements have been duly and validly
authorized by all corporate action necessary on the part of the Company. Each of
the Applicable Agreements has been duly executed and delivered by the Company.
6. Each of the Applicable Agreements is (assuming for the purposes of this
opinion that each is valid and binding upon the other parties thereto) the valid
and binding obligation of the Company, enforceable in accordance with their
respective terms; except that (i) as to enforcement of remedies, each of the
Applicable Agreements is subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and the discretion of courts in granting equitable remedies,
(ii) enforceability of the indemnification provisions and the contribution
provisions set forth in the Registration Rights Agreement may be limited by the
federal securities laws of the United States or public policy underlying such
laws, and (iii) no opinion is expressed in this paragraph as to compliance with
federal, state and foreign securities laws.
7. To our knowledge, no approval of any court or governmental agency or
body is required for (i) the execution and delivery of each of the Applicable
Agreements by the Company or (ii) the consummation by the Company of the
Transactions.
8. To the best of our knowledge, after due inquiry, the Company's
execution, delivery and performance of the Applicable Agreements, its
consummation of the Transactions and its compliance with the terms of the
Applicable Agreements do not and will not (with or without the giving of notice
or the lapse of time, or both) constitute a breach or violation of any of the
terms or conditions of, or constitute a default under, or conflict with or
violate any provision of, (i) the Company's Certificate of Incorporation or
By-Laws, (ii) any indenture, mortgage, deed of
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trust, agreement or other instrument to which the Company is a party or by which
it or any of its property is bound, (iii) any applicable domestic statute or
regulation, or (iv) any judgment, decree or order of any court or governmental
agency or body having jurisdiction over the Company or any of its property.
9. The issuance of the Conversion Shares upon conversion of the Preferred
Shares in accordance with the Certificate of Designations and the Applicable
Agreements will not violate the listing agreement between the Company and
Nasdaq.
9. The Company complies with the eligibility requirement for the use of
Form SB-2 under the Securities Act of 1933, as amended.
10. To the best of our knowledge, after due inquiry, there is no pending
or threatened litigation, investigation or other proceeding against the Company,
except for litigation incident to the kind of business conducted by the Company,
which litigation (if any) is not, individually or in the aggregate, material.
The members of this firm are members of the bar of the State of New York,
and this opinion is limited to matters governed by the federal laws of the
United States, the laws of the State of New York, and the General Corporation
Law of the State of Delaware, in each case as currently in effect. Insofar as
the enforceability of any of the Applicable Agreements may be governed by the
laws of other states, we have assumed that such laws are identical in all
respects to the laws of the State of New York. This opinion is furnished solely
for your benefit in connection with the transactions contemplated by the
Applicable Agreements and may not be used, circulated, quoted or otherwise
referred to for any purpose or relied upon in any manner by any other person
without our express written consent. This opinion is rendered only with regard
to the matters set out in the paragraphs numbered 1 through 10 above. No other
opinions are intended not should they be inferred.
Very truly yours,
SOLOVAY MARSHALL & EDLIN, P.C.
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