STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of July
12, 2006, by and between Xxxxxx International Corp., a Delaware corporation
("Xxxxxx"), and Sheridan Square Entertainment, Inc., a Delaware corporation
("SSE"). Xxxxxx and SSE are referred to collectively herein as the "Parties".
In consideration of the premises and the mutual promises herein made, and
in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.
1. Purchase and Sale of Stock. Contemporaneous with, and effective upon,
the execution of this Agreement, SSE hereby purchases from Xxxxxx, and Xxxxxx
hereby sells to SSE, 40 shares of Series B Convertible Participating Preferred
Stock of SSE currently held of record by Xxxxxx together with all
payment-in-kind dividends, whether or not issued (the "Purchased Stock") for an
aggregate purchase price of $1,200,000 (the "Purchase Price").
2. Payment of Purchase Price. SSE shall deliver to Xxxxxx by no later than
October 31, 2006, an amount equal to the Purchase Price by wire transfer of
immediately available funds to an account designated by Xxxxxx.
3. Representations and Warranties of Xxxxxx. Xxxxxx hereby represents and
warrants to SSE that:
(a) Purchased Stock. Xxxxxx owns of record and beneficially the Purchased
Stock. Upon consummation of the transactions contemplated hereby in accordance
with the terms hereof, SSE shall acquire the Purchased Stock free and clear of
any mortgage, pledge, lien, encumbrance, charge, or other security interest.
(b) Xxxxxx is a corporation which is duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(c) This Agreement has been authorized by all necessary corporate action on
the part of Xxxxxx and constitutes the legal, valid and binding obligation of
Xxxxxx, enforceable against Xxxxxx in accordance with its terms.
(d) The execution, delivery and performance of this Agreement by Xxxxxx
does not and will not (with or without notice and the lapse of time) contravene,
conflict with or result in a violation or breach of (i) Hirsch's certificate of
incorporation or bylaws; (ii) any contract, agreement or understanding to which
Xxxxxx is a party; and (iii) any applicable law, rule or regulation.
4. Representations and Warranties of SSE. SSE hereby represents and
warrants to Xxxxxx that:
(a) SSE is a corporation which is duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) This Agreement has been authorized by all necessary corporate action on
the part of SSE and constitutes the legal, valid and binding obligation of SSE,
enforceable against SSE in accordance with its terms.
(c) The execution, delivery and performance of this Agreement by SSE does
not and will not (with or without notice and the lapse of time) contravene,
conflict with or result in a violation or breach of (i) SSE's certificate of
incorporation or bylaws; (ii) any contract, agreement or understanding to which
SSE is a party (other than contracts, agreements or understandings that require
consent from third parties that will be obtained by SSE); and (iii) any
applicable law, rule or regulation.
5. Further Assurances. In case at any time after the date hereof any
further action is necessary to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party.
6. Covenants of SSE. Until full payment of all amounts due Xxxxxx
hereunder, SSE shall not:
(a) declare or pay any dividend or make any distribution of cash or assets
on, or redeem, purchase or otherwise acquire shares of capital stock;
(b) other than indebtedness in the aggregate amount not to exceed
$26,000,000 incurred by SSE and its subsidiaries in favor of XX Xxxxx Credit
Opportunities Fund, L.P. in connection with the refinancing of the existing
indebtedness of SSE pursuant to that certain Credit Agreement dated as of
December 10, 2004 (as amended) between SSE, certain of its subsidiaries and
Fortress Credit Opportunities I LP, incur any debt or indebtedness outside of
the ordinary course of business, or encumber or grant any security interest in
any of its assets unless the proceeds resulting therefrom are paid to Xxxxxx to
satisfy the Purchase Price;
(c) other than in connection with the any equity financings consummated by
SSE for an aggregate amount of $5,000,000, issue for cash any capital stock or
securities convertible into the capital stock of SSE unless the proceeds
resulting therefrom are paid to Xxxxxx to satisfy the Purchase Price; or
(d) take any action outside of the ordinary course of business, other than
the acquisition by SSE of the catalogue of original sound recordings and other
assets of Spitfire Records division of Eagle Rock Entertainment Limited.
7. Default. In the event of a default in the payment of the Purchase Price
by SSE, interest shall accrue on the unpaid portion of the Purchase Price at the
rate of eighteen (18%) percent per year.
8. Mutual Releases. Each Party hereby irrevocably waives, discharges, and
releases any an all claims, causes of action or liabilities, whether known or
unknown, arising from any matter whatsoever (that may have occurred on or prior
to the date of this Agreement) which such Party has or might have against any
other Party and/or any other Party's affiliates, subsidiaries, parent entities,
officers and/or directors other than any claims arising under this Agreement or
the transactions contemplated hereunder.
9. Miscellaneous.
(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the Parties and their
respective successors and permitted assigns.
(b) Entire Agreement. This Agreement constitutes the entire agreement among
the Parties and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(d) Headings. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
(f) Amendments. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by the Parties.
(g) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(h) Expenses. Each Party shall bear and be responsible for the costs and/or
expenses (including legal fees and expenses) incurred by such Party in
connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, in the event of a default of SSE's obligations
hereunder, SSE shall pay Xxxxxx all reasonable costs and expenses (including
reasonable attorneys fees) associated and incurred in connection with the
enforcement of Hirsch's rights hereunder, and collection of any amounts due
Xxxxxx.
(i) Succession and Assignment. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
of the other Party.
(j) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. The word "including" shall mean including without
limitation.
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IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement
as of the date first above written.
SHERIDAN SQUARE ENTERTAINMENT, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
XXXXXX INTERNATIONAL CORP.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
