EXHIBIT 99.2
AGREEMENT
THIS AGREEMENT is made and entered into this 25th day of September, 1997,
by and among Children's Broadcasting Corporation, a Minnesota corporation
("Purchaser"), and Xxxxx X. Xxxxx, nominee, a resident of the State of Illinois
(hereinafter, the "Seller").
WHEREAS, Seller, as nominee and attorney-in-fact for certain individuals,
has represented that such individuals are the owners of 225,000 shares of the
common stock of Harmony Holdings, Inc., a Delaware corporation ("HHI"); and
WHEREAS, Seller and Purchaser desire to enter into a put and call
arrangement whereby Seller can require Purchaser to purchase such shares on or
after January 31, 1998, and Purchaser shall have the right to purchase such
shares on or before February 15, 1998, all subject to and upon the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. OWNERSHIP OF HHI SECURITIES. Seller's principals have a
beneficial interest in 225,000 shares of the common stock of HHI. Seller does
not own or have a beneficial interest in any other securities of HHI except as
set forth in Amendment No. 2 to the Laken Committee's Schedule 14A on file with
the Securities and Exchange Commission. For purposes of this Agreement, the
"Shares" shall refer to the 225,000 shares of common stock of HHI which are
owned by Seller as of the date hereof, reduced by any number of such shares sold
by Seller in brokerage transactions on or after the date hereof and prior to
receipt of a Call Notice (as hereinafter defined). If Seller shall dispose of
any of the Shares, he shall give written notice thereof to Purchaser within five
business days following such disposition. Such written notice shall specify the
number of Shares in such disposition, the name of the owner making such
disposition, the date of such disposition, and the name of the broker-dealer
through which such disposition was made.
2. PUT AGREEMENT. On or after January 31, 1998 and prior to
February 15, 1998, Seller shall have the right to require Purchaser to purchase
the Shares, and Seller shall sell the Shares, upon written notice to Purchaser
(the "Put Notice"), at a price of $2.50 per share (the "Purchase Price"). Upon
receipt of the Put Notice, Purchaser shall purchase the Shares at the Purchase
Price per Share; provided, however, that if Purchaser has not consummated the
sale of its radio stations to Global Broadcasting Company, Inc. pursuant to an
Asset Purchase Agreement dated July 16, 1997, Purchaser may, upon giving written
notice to Seller within five (5) business days following its receipt of the Put
Notice, postpone the purchase of the Shares to not later than 5:00 p.m.,
Minneapolis time, on March 31, 1998
(Page 15 of 57 Pages)
(the "Extension Date"). Notwithstanding the foregoing, if at any time prior to
Seller's giving the Put Notice to Purchaser, the closing sale price of a Share
of common stock of HHI as quoted or published by Nasdaq, or by such other
quotation system or exchange on which the common stock of HHI may be listed or
published, shall equal or exceed $2.50 per Share (as adjusted for any stock
splits or dividends or other recapitalization events), for at least ten
consecutive trading days the right of Seller to require Purchaser to purchase
the Shares pursuant to this Agreement, or otherwise, shall terminate.
3. CALL AGREEMENT. Purchaser, at any time prior to February 15,
1998, shall have the right to purchase, and Seller agrees to sell, the Shares
(except to the extent Purchaser has previously been required to purchase the
Shares pursuant to a Put Notice) upon giving written notice to Seller (the "Call
Notice") at the Purchase Price per Share. Notwithstanding the foregoing, if at
any time prior to Purchaser's giving the Call Notice to Seller, the bid price
or, if there is no published bid price, the closing sale price of a Share of
common stock of HHI as quoted or published by Nasdaq, or by such other quotation
system or exchange on which the common stock of HHI may be listed or published,
shall equal or exceed $2.50 per Share (as adjusted for any stock splits or
dividends or other recapitalization events), for at least ten consecutive
trading days the right of Purchaser to require Seller to sell the Shares
pursuant to this Agreement, or otherwise, shall terminate.
In addition, the Seller may dispose of any or all of the shares of HHI he
owns prior to actual receipt of the call notice, and in such event, said call
shall terminate as to such shares; provided that Seller gives notice of such
sale within five (5) business days following any such transaction.
4. CLOSING. The closing of the purchase of the securities in the
case of a put by Seller as specified in Section 2 of this Agreement shall take
place on the fifth business day following Purchaser's receipt of the Put Notice,
or, in the case of a call by Purchaser pursuant to Section 3, the closing of the
purchase of the securities shall take place on the fifth business day following
Seller's receipt of the Call Notice (in either case, the "Closing") as specified
in Section 3. The Purchase Price per Share shall be wire-transferred by
Purchaser to a broker-dealer specified by Purchaser. Seller shall deliver the
Shares on the Closing Date through The Depository Trust Company ("DTC") for
delivery to the broker-dealer for the account of Purchaser. The Shares shall be
transferred to Purchaser by the broker-dealer, pursuant to a letter of
instructions from Seller and Purchaser, upon receipt of the Purchase Price by
the broker-dealer. Concurrent therewith, the broker-dealer shall pay the
Purchase Price to Seller by wire transfer.
5. REPRESENTATIONS AND WARRANTIES BY SELLERS. Seller represents and
warrants that:
(a) he is the attorney-in-fact for the beneficial owners of the
Shares;
(Page 16 of 57 Pages)
(b) he owns, or has beneficial interest in, and has good and
marketable title to, the Shares to be sold to Purchaser hereby, free and
clear of all liens, security interests and encumbrances, of any kind or
nature;
(c) he has duly authorized, executed and delivered this Agreement,
and that the same is the valid and binding agreement of such Seller,
enforceable against such Seller in accordance with its terms, and not in
violation of any agreement to which such Seller is a party;
(d) he has the right, power and authority to transfer, convey and
sell to Purchaser, or to cause the same, at the Closing, the Shares to be
sold by him as described in Section 1 of this Agreement and, upon
consummation of this Agreement, Purchaser will acquire good and marketable
title to such shares, free and clear of all liens, security interests or
other covenants or agreements, other than encumbrances resulting from
actions of Purchaser.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants that this Agreement has been duly authorized by all
necessary action on the part of the Purchaser and is a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms.
7. STANDSTILL AND RELEASE.
7.1 STANDSTILL. In consideration of the covenants and agreements
contained herein, Seller, on behalf of each owner of the Shares, covenants and
agrees that, for a period of five years from the date of this Agreement, unless
such shall have been specifically invited in writing by the Boards of Directors,
HHI or Purchaser, neither he nor any of his affiliates, agents or
representatives, will in any manner, directly or indirectly, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in or in any way assist any other person to effect or seek, offer or
propose (whether publicly or otherwise) to effect, or cause or participate in,
(i) any acquisition of any securities (or beneficial ownership thereof) or
assets of HHI or Purchaser or any of their subsidiaries; (ii) any tender or
exchange offer, merger or other business combination involving HHI or Purchaser
or any of their subsidiaries; (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to HHI
or Purchaser or any of their subsidiaries; (iv) any "solicitation" of "proxies"
(as such terms are used in the proxy rules of the Securities and Exchange
Commission) or consents to vote any voting securities of HHI or Purchaser or any
of their subsidiaries; or (v) any communication with any employee of HHI or
Purchaser or any of their subsidiaries (except that this restriction shall not
apply to communications to Xxxxxx Xxxxxxxx on matters unrelated to HHI, its
business, employees or independent contractors, or to Purchaser); (b) form, join
or in any way participate in a "group" (as defined under the 1934 Act);
(c) otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of HHI or Purchaser or
any of their subsidiaries; (d) take any action which might force HHI or
Purchaser or any of their subsidiaries to make a public announcement regarding
any of the types of matters
(Page 17 of 57 Pages)
set forth in (a) above; or (e) enter into any discussions or arrangements with
any third party with respect to any of the foregoing. Seller also agrees during
such period not to request HHI or Purchaser or any of their subsidiaries (or
their directors, officers, employees or agents), directly or indirectly, to
amend or waive any provision of this paragraph (including this sentence).
Seller further covenants and agrees that Seller will not encourage other
shareholders of HHI to bring actions or assert claims against HHI or Purchaser.
The provisions of this Section 7.1 shall survive the closing of the transaction
contemplated by this Agreement.
7.2 RELEASE BY SELLER. For valuable consideration, receipt of which
is hereby acknowledged, Seller, as attorney-in-fact and Agent for each
beneficial owner of the Shares, releases and will release HHI, its shareholders,
officers and directors, and Purchaser, and its shareholders, officers and
directors, and the respective agents, independent contractors and
representatives of the same (collectively, the "Seller Released Parties") from
and against any and all claims, costs or causes of action which any of such
individual beneficial owners has or may have against the Seller Released
Parties, known or unknown, now existing or hereafter arising or relating to this
Agreement, or the ownership or acquisition of the securities of HHI, except such
cause of action or claim as may arise subsequent to the date hereof relating to
the enforcement or performance of this Agreement.
7.3 RELEASE BY PURCHASER. For valuable consideration, receipt of
which is hereby acknowledged, Purchaser hereby releases and will release Seller
and each of such beneficial owners and their respective agents, independent
contractors and personal representatives of the same (collectively, the
"Purchaser Released Parties") from and against any and all claims, costs or
causes of action which Purchaser has or may have against the Purchaser Released
Parties, known or unknown, now existing or hereafter arising or relating to this
Agreement, or the ownership or acquisition of the Shares, except such cause of
action or claim as may arise subsequent to the date hereof relating to the
enforcement or performance of this Agreement.
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 Seller, to Xxxxxx X. Xxxxxx, c/x Xxxxxx & Capitel, Ltd.,
0000 Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000;
(Page 18 of 57 Pages)
(b) if to Purchaser, to Xxxxxxxxxxx X. Xxxx, at 000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, with a copy to Xxxxx X. Xxxxx, at 000
Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other address
as Purchaser may specify by written notice to Seller;
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, 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, any investigation at any
time made by Purchaser on their behalf, and the sale and purchase of the Shares
and payment therefor.
8.4 LAW TO GOVERN; JURISDICTION. 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. The Seller hereby consents to
jurisdiction in the State of Minnesota.
8.5 REFERENCES. Unless the content indicates otherwise, all
references in the singular shall include the plural, and all references in the
masculine or neuter shall include the feminine.
8.6 BINDING EFFECT. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
assigns.
8.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts all of which, taken together, shall constitute one and the same
Agreement, whether or not all parties hereto have executed the same instrument.
8.8 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
8.9 LAKEN'S AGENCY AND REPRESENTATIVE CAPACITY. Laken represents and
warrants that he has the authority to execute and deliver this Agreement on
behalf of certain individual owners of the Shares.
8.10 ATTORNEYS FEES. In the event of a breach of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees and costs
incurred in enforcing the provisions hereof.
(Page 19 of 57 Pages)
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be duly executed as of the date first written above.
CHILDREN'S BROADCASTING CORPORATION
By /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxxx
Chief Operating Officer
/s/ Xxxxx X. Xxxxx
---------------------------------------
XXXXX X. XXXXX, as agent and
representative for and on behalf of the
owners of 225,000 shares of common stock
of Harmony Holdings, Inc.
(Page 20 of 57 Pages)
