Exhibit 2
AGREEMENT
THIS AGREEMENT is made and entered into this 21st day of July, 1997, by and
between Children's Broadcasting Corporation, a Minnesota (U.S.A.) corporation
("Purchaser"), and Unimedia S.A., a privately held societe anonyme organized and
existing under the laws of France ("Unimedia").
1. AGREEMENT TO SELL COMMON STOCK. Unimedia is the owner of 1,000,000
shares of common stock (the "Shares") of Harmony Holdings, Inc., a Delaware
corporation ("Harmony"). Unimedia agrees to sell to Purchaser, and Purchaser
agrees to buy from Unimedia, the Shares, on the terms and conditions set forth
herein. The Shares are registered in the name of Universal Independent
Holdings, Limited ("Universal") as security for Unimedia's obligations to
Universal. At Closing, Universal will deliver a certificate representing the
Shares to Oxford Transfer & Registrar Agency, Inc., Harmony's transfer agent
("OTR"), where such certificate will be cancelled and reissued pursuant to the
terms of the Amended and Restated Escrow Agreement dated July 25, 1997 (the
"Escrow Agreement"). The actual number of Shares shall be subject to adjustment
in the event of any stock split, stock dividend, combination, reorganization or
recapitalization affecting the outstanding common stock of Harmony prior to the
Closing Date as defined below.
2. PURCHASE PRICE. On the Closing Date, Purchaser shall pay or cause to
be paid Two Million Six Hundred Thousand Dollars U.S. ($2,600,000), subject to
adjustment as provided in Section 1.
3. PAYMENT FOR THE SHARES. Two Million Six Hundred Thousand Dollars U.S.
($2,600,000), will be wire transferred to U.S. Bank of Oregon, Oxford Transfer &
Registrar Agency, Inc. Client Trust, Account #1560101618, ABA #000000000;
reference: Harmony Holdings, Inc., where it will be held in escrow by OTR.
Pursuant to the terms of the Escrow Agreement, OTR will release the Funds of
which OTR will cause $2,200,000 to be wire transferred to Universal and $400,000
to be wire transferred to Unimedia. Concurrent with the release of the Funds,
OTR shall transmit, via overnight courier, certificates representing the Shares,
such certificates being dated the Closing Date, pursuant to the terms of the
Escrow Agreement.
4. CLOSING. The closing (the "Closing") shall take place at the offices
of Xxxx & Xxxxx, 0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx, Xxx Xxxxxxx, XX 00000, at
2:00 p.m., Pacific Daylight Time, on July 25, 1997, or such later date as the
Closing on the purchase of the Shares shall occur (the "Closing Date"), provided
each of the conditions to Purchaser's obligation set forth in Section 7 shall
have been satisfied. Such conditions are hereinafter referred to as the
"Purchaser Conditions." In the course of the Closing, OTR shall send, via
facsimile, to Purchaser's counsel, Xxxxxx and Xxxxxx, Professional Association,
Attention: Xxxxx X. Xxxxxxxx, Esq., facsimile number (000) 000-0000, the
proposed certificates for the Shares, including the faces of the certificates
and the reverse sides thereof, for inspection as to form and content.
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5. REPRESENTATIONS AND WARRANTIES BY UNIMEDIA. In order to induce
Purchaser to enter into this Agreement and to induce the purchase of the Shares,
Unimedia hereby represents and warrants to the Purchaser that:
5.1 AUTHORITY AND POWER. Unimedia is a privately held French societe
anonyme with requisite power and authority to execute, deliver and perform
this Agreement. Unimedia has good and marketable title to the Shares free
and clear of any mortgage, pledge, lien, charge, security interest,
encumbrance or restriction, other than as identified in Section 1.
5.2 STATUS OF THE SHARES. To the best of Unimedia's knowledge, the
Shares are duly authorized, validly issued and outstanding, fully paid, and
nonassessable.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants that:
6.1 INVESTMENT INTENT. The Shares are being purchased by Purchaser
for its own account and not with the view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). Purchaser
understands that the Shares have not been registered under the Securities
Act or any applicable state laws.
6.2 ACTS AND PROCEEDINGS. This Agreement has been duly authorized by
all necessary action on the part of the Purchaser and has been duly
executed and delivered by it, and is a valid and binding agreement of
Purchaser enforceable in accordance with its terms.
7. CONDITIONS OF PURCHASER'S OBLIGATION. Purchaser's obligations under
this Agreement are subject to the fulfillment prior to or on the Closing Date of
the following conditions, any of which may be waived in whole or in part by
Purchaser:
7.1 NO ERRORS, ETC. The representations, covenants and warranties of
Unimedia under this Agreement shall be true in all material respects as of
the Closing Date with the same effect as though made on and as of the
Closing Date.
7.2 DISMISSAL OF PENDING LITIGATION. Unimedia shall settle and
compromise the litigation entitled UNIMEDIA S.A. V. HARMONY HOLDINGS, INC.
AND XXXXXX XXXXXXXX, case no. CV 96-7109 JGD (RNBx), pending in the United
States District Court for the Central District of California (the
"Litigation"). On the date on which Unimedia confirms receipt of the funds
that were wire transferred by OTR, Unimedia shall file a stipulation for
dismissal, with prejudice, of the Litigation, which stipulation shall have
been jointly executed by counsel for Unimedia, Harmony, and Xxxxxx
Xxxxxxxx.
7.3 MUTUAL GENERAL RELEASE. Unimedia, Harmony, and Xxxxxx Xxxxxxxx
shall have executed and exchanged a mutual general release, releasing and
discharging each other and their officers and directors, employees,
representatives,
(Page 30 of 136 Pages)
heirs and assigns, individually and in their respective capacities, from
any and all claims or causes of action that each has against the other,
including, but not limited to, claims arising out of the subject matter of
an agreement between Unimedia, Harmony and Xxxxxx Xxxxxxxx dated July 27,
1996 and the related Subscription Agreement dated on or about such date
(the "1996 Agreements"), pursuant to which Unimedia purchased from Harmony
the Shares. Such release shall include mutual releases relating to any
obligation relative to the then proposed acquisition from Unimedia
shareholders of all of the issued and outstanding ordinary shares of
Unimedia in exchange for securities of Harmony pursuant to the 1996
Agreements.
8. MISCELLANEOUS.
8.1 CHANGES, WAIVERS, ETC. Neither this Agreement nor any provision
hereof may be changed, amended, waived, discharged or terminated orally,
but only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
8.2 NOTICES. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and
shall be delivered, or mailed first-class postage prepaid, registered or
certified mail:
(a) if to Unimedia, at Immeuble le Levant, 0 xxx xx Xxxxxxx
Xxxxx, 00000 Xxxxxxxxx, Xxxxxx (00-0) 00-00-00-00, Attention: Xxxxxx
Xxxxxxxxx; with a copy to Xxxxx X. Xxxx, Esq., at Gaims, Weil, West &
Xxxxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000; and
(b) if to Purchaser, at 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxx; with a copy to Xxxxx
X. Xxxxx, Esq., at 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000; or at such other address as Purchaser may specify by written
notice to Unimedia;
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail or facsimile, when received.
8.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations, warranties, covenants and agreements contained herein
shall survive the execution and delivery of this Agreement.
8.4 LAW TO GOVERN. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Minnesota without
regard to principles of conflict of laws.
8.5 ASSIGNABILITY. Prior to the Closing, the Purchaser may assign
its right to purchase the Shares to any combination of parties, including,
but not limited to, a combination of Purchaser and Harmony, although no
such assignment shall relieve the Purchaser of any liabilities or
obligations under this Agreement. This Agreement
(Page 31 of 136 Pages)
shall be binding upon, and inure to the benefit of, the parties hereto and
their respective successors and assigns.
8.6 COUNTERPARTS. This Agreement may be signed by facsimile and in
counterparts, each of which shall be deemed an original which shall become
effective when Purchaser and Unimedia have signed and exchanged
counterparts.
IN WITNESS WHEREOF, Unimedia and Purchaser have caused this Agreement to be
duly executed as of the date first written above.
CHILDREN'S BROADCASTING
CORPORATION
By /s/ Xxxxxxxxxxx X. Xxxx
---------------------------------------
Xxxxxxxxxxx X. Xxxx
Chief Executive Officer
UNIMEDIA S.A.
By /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxx,
Chairman, Chief Executive
Officer and President du
Directoire
(Page 32 of 136 Pages)
