1
EXHIBIT 2.1
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AGREEMENT OF PURCHASE
AND SALE OF STOCK
BY AND AMONG
TICKETMASTER GROUP, INC.,
TICKETMASTER CANADA HOLDINGS LTD.,
THE SUBSIDIARIES,
AND
EACH OF THE STOCKHOLDERS LISTED ON
SCHEDULE A
MAY 13, 1997
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TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 "Applicable Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 "Balance Sheets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 "Balance Sheet Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 "Benefit Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Buyer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 "Buyer's Related Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 "Client Funds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 "Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 "Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 "Companies" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 "Employment Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Exchange Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 "Financial Statements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 "Indemnification Basket" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 "Intellectual Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 "Leased Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 "Leases" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 "Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.23 "Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.24 "Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.25 "Related Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.26 "Related Party" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.27 "SEC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.28 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.29 "Sellers" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.30 "Sellers' Related Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.31 "Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.32 "Subsidiaries" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.33 "Tax" or "Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.34 "TCH" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.35 "Ticketmaster Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.36 "To the best knowledge of the Sellers" . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II.
PURCHASE AND SALE OF THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Agreement to Sell and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Acquisition by Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3
2.4 Obligations of the Sellers and the Companies at Closing; Further Assurances . . 5
2.5 The Buyer's Obligations at Closing . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III.
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Payment of the Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 The Ticketmaster Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Escrow Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Restrictions on the Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE
SELLERS AND THE COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Organization, Good Standing, Qualification and
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Execution, Delivery and Performance of Agreement;
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5 Ownership of TCH's Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 14
4.8 Absence of Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.9 Independent Accountants; Books and Records . . . . . . . . . . . . . . . . . . . 16
4.10 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.11 No Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.13 Compliance with Laws and Other Instruments . . . . . . . . . . . . . . . . . . . 18
4.14 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.15 Document Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.16 Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.17 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.18 Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.19 Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.21 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.22 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.23 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.24 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.26 Client Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.27 Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.28 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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4.29 Minute Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.30 The Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.31 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . . . . . . 26
5.1 Organization, Good Standing, Qualification and Power
of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Organization, Good Standing, Qualification and Power
of Buyer's Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.3 Execution, Delivery, and Performance of Agreement;
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.5 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.6 Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.7 Buyer's Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.8 Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI.
COVENANTS OF THE SELLERS AND THE COMPANIES . . . . . . . . . . . . . . . . . . . 28
6.1 Conduct of the Sellers and the Companies Pending
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.3 Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.4 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.6 Transfer of the Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.7 Cash Flow from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII.
MUTUAL COVENANTS AND UNDERTAKINGS . . . . . . . . . . . . . . . . . . . . . . . 31
7.1 Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.3 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4 Notice of Failure to Satisfy Conditions . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII.
MUTUAL CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 No Restraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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ARTICLE IX.
CONDITIONS TO OBLIGATION OF THE BUYER TO CLOSE . . . . . . . . . . . . . . . . . 32
9.1 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.3 Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.4 Proceedings and Instruments Satisfactory; Consents . . . . . . . . . . . . . . . 32
9.5 Instruments of Transfer; Releases . . . . . . . . . . . . . . . . . . . . . . . 34
9.6 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.7 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.8 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.9 Opinion of Counsel for the Sellers . . . . . . . . . . . . . . . . . . . . . . . 34
9.10 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.11 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.12 Amendment to Client Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.13 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.14 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.15 Accountants' Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE X.
CONDITIONS TO OBLIGATION OF THE SELLERS TO CLOSE . . . . . . . . . . . . . . . . 35
10.1 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.3 Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.4 Proceedings and Instruments Satisfactory . . . . . . . . . . . . . . . . . . . . 35
10.5 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.6 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.7 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.8 Opinion of Counsel for the Buyer . . . . . . . . . . . . . . . . . . . . . . . . 36
10.9 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.10 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI.
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 Termination by the Buyer or the Sellers . . . . . . . . . . . . . . . . . . . . 36
11.2 Termination by the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3 Termination by the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.4 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XII.
INDEMNIFICATION AND SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.1 Indemnification of the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.2 Indemnification of the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.3 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 38
(iv)
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12.4 Nature and Survival of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XIII.
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.3 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.8 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.10 Jurisdiction and Venue, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.11 Appointment of Agent for Service . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.12 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.13 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.14 Appointment of Agent for Execution of Certain
Documents and Receipt of Certain Notices . . . . . . . . . . . . . . . . . . . . . 43
13.15 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.16 Payments in United States Dollars . . . . . . . . . . . . . . . . . . . . . . . . 44
13.17 References to Laws and Statutes . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.18 References to the Companies and the Sellers . . . . . . . . . . . . . . . . . . . 44
13.19 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(v)
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AGREEMENT OF PURCHASE AND SALE OF STOCK
AGREEMENT OF PURCHASE AND SALE OF STOCK (this "Agreement"), dated as of May
13, 1997, by and among TICKETMASTER GROUP, INC., an Illinois corporation,
having its principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Buyer"), TICKETMASTER CANADA HOLDINGS LTD. ("TCH"), a
British Columbia, Canada corporation, having its registered office at Box
11161, Royal Centre, ▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇,
each of the Subsidiaries (as such term is defined herein), and each of the
stockholders listed on Schedule A annexed hereto (collectively, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers are the owners of all of the issued and outstanding
shares of the capital stock of TCH (the "Shares") set forth opposite their
respective names on Schedule A;
WHEREAS, TCH is the owner of all of the issued and outstanding capital stock
of Vancouver Ticket Centre Ltd. ("VTC"), and VTC is the 100% owner of T.O.P.
Tickets Unlimited Inc. ("T.O.P."), Ticketmaster Alberta, Inc. (which is the
100% owner of Alberta Info Centres Ltd.), Ticketmaster Manitoba, Inc., and
Worldwide Ticket Systems, Inc.; and TCH and T.O.P. are each the owners of 50%
of the issued and outstanding capital stock of Ticketmaster Canada, Inc.
("TCI"), and TCH and VTC are each the owners of 50% of the issued and
outstanding capital stock of International Automated Ticket Systems, Ltd.;
WHEREAS, the Companies (as defined in Section 1.12 hereof) are engaged in the
automated ticket selling business for sports and performing events in the
Canadian Provinces of British Columbia, Ontario, Alberta, and Manitoba;
WHEREAS, prior to the consummation of the transactions contemplated hereby,
Picadilly Management Services Ltd., Tundra Management Ltd., and 336435 B.C.
Ltd. were amalgamated to form TCH;
WHEREAS, the Sellers desire to sell to the Buyer, and the Buyer desires to
purchase from the Sellers, all of the Shares, on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and in order to set forth the terms and conditions of the
purchase and sale of the Shares and the manner of carrying the same into
effect, the parties hereto hereby agree as follows:
8
ARTICLE I.
DEFINITIONS
The following terms shall have the indicated meanings when used in this
Agreement, unless the context requires otherwise:
1.1 "AFFILIATE" shall mean any Person which, directly
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, a specified Person. The term "CONTROL"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting stock or other securities, by contract or otherwise.
1.2 "APPLICABLE LAW" shall mean all existing laws,
rules, regulations, ordinances, orders, judgments and decrees applicable to a
Person or its business, properties or operations.
1.3 "BALANCE SHEETS" shall mean the separate audited
consolidated balance sheets of VTC and its subsidiaries, the balance sheet of
TCI, and the combined balance sheet of the Subsidiaries, each as of February 28,
1997, included as part of the Financial Statements, and the pro forma
consolidated balance sheet of TCH as of March 1, 1997.
1.4 "BALANCE SHEET DATE" shall mean February 28, 1997.
1.5 "BENEFIT PLANS" shall have the meaning ascribed to
that term in Section 4.19.
1.6 "BUSINESS DAY" shall mean a day other than a
Saturday, Sunday or other day on which banks are authorized to close in the
United States of America or Canada.
1.7 "BUYER" shall have the meaning ascribed to that
term in the preamble hereof.
1.8 "BUYER'S RELATED AGREEMENTS" shall mean all Related
Agreements to which the Buyer is a party or which are to be performed or
complied with by the Buyer on or prior to the Closing Date.
1.9 "CLIENT FUNDS" shall have the meaning ascribed to
that term in Section 4.26.
1.10 "CLOSING" shall have the meaning ascribed to that
term in Section 2.2.
1.11 "CLOSING DATE" shall have the meaning ascribed to
that term in Section 2.2.
1.12 "COMPANIES" shall mean TCH and the Subsidiaries.
1.13 "EMPLOYMENT AGREEMENTS" shall mean the agreements
referenced in Section 10.7.
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1.14 "EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended, or any similar or successor federal statute and the
rules and regulations of the SEC promulgated thereunder, all as the same shall
be in effect at the applicable time.
1.15 "EXCHANGE RATE" shall mean the "Exchange Rate" as of
a specified applicable date which shall be the average of the dollar/foreign
currency buy rate and the dollar/foreign currency sell rate, each as of 9:00
A.M. Los Angeles time, quoted by ▇▇▇▇▇ Fargo Bank, N.A., Los Angeles Branch, as
of such date.
1.16 "FINANCIAL STATEMENTS" shall mean the separate
consolidated financial statements of VTC and its subsidiaries, the financial
statements of TCI, and the combined financial statements of the Subsidiaries for
the years ended February 29, 1996 and February 28, 1997, inclusive of balance
sheets and statements of earnings, retained earnings and cash flows, together
with all related notes and schedules thereto, each of which has been audited by
and accompanied by the opinion of KPMG.
1.17 "INDEMNIFICATION BASKET" shall have the meaning
ascribed to that term in Section 12.3.
1.18 "INTELLECTUAL PROPERTY" shall mean any and all of
the right, title and interest of the Companies in and to Canadian, United States
and/or foreign patents, copyrights, mask works, trade and service names and
marks, whether or not registered, pending, issued or applied for; know-how;
technical knowledge; technical information; works, processes and designs;
hardware; software (in source code and object code form, or otherwise, including
all related annotations and listings); inventions; trade secrets and other
intellectual property rights; all things authored, discovered, developed,
designed or acquired by the Companies or, to the extent that the Companies have
any right, title or interest thereto, any of their agents, contractors or
employees in any stage of development, regardless of whether any or all of the
foregoing constitutes copyrightable or patentable subject matter or is in
tangible or intangible form; and all embodiments, expressions, representations,
fruits, enhancements, improvements, and products of any of the foregoing.
1.19 "LEASED PROPERTY" shall have the meaning ascribed to
that term in Section 4.12(ii).
1.20 "LEASES" shall have the meaning ascribed to that
term in Section 4.12.
1.21 "LIENS" shall mean any and all liens, security
interests, mortgages, pledges, hypothecations, claims, charges, and encumbrances
of any kind or nature whatsoever.
1.22 "PERSON" shall mean any individual, partnership,
corporation, trust, limited liability company or other entity.
1.23 "PERSONAL PROPERTY" shall mean all of the Companies'
equipment, machinery, inventory, supplies, tools, parts, furniture, fixtures,
computer hardware, peripheral equipment, printers, personal computers, mainframe
computers, disks, tapes, communications equipment (including switches), cabling,
automobiles and other vehicles and all other tangible personal
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property, whether in the possession or on the premises of the Companies or in
the possession or on the premises of third parties.
1.24 "PURCHASE PRICE" shall have the meaning ascribed to
that term in Section 3.1.
1.25 "RELATED AGREEMENTS" shall mean all agreements,
instruments and other documents to be executed and/or delivered by the parties
pursuant to Sections 2.4 and 2.5 and Articles IX and X hereof.
1.26 "RELATED PARTY" shall mean (i) an officer or
director of the Sellers or the Companies (or, with respect to any of the
foregoing, any member of his or her family or any corporation, partnership,
other business entity or trust in which he or she or any member of his or her
family has more than a 10% record or beneficial interest, or of which he or she
or any member of his or her family is an officer, director, general partner,
managing member or trustee) or (ii) any other Person or entity which directly or
indirectly controls, is controlled by or is under common control with any of the
Sellers or the Companies.
1.27 "SEC" shall mean the United States Securities and
Exchange Commission or any similar agency then having the authority to enforce
the Exchange Act or the Securities Act.
1.28 "SECURITIES ACT" shall mean the Securities Act of
1933, as amended, or any similar or successor statute, and the rules and
regulations of the SEC promulgated thereunder, all as the same shall be in
effect at the applicable time.
1.29 "SELLERS" shall have the meaning ascribed to that
term in the preamble hereof.
1.30 "SELLERS' RELATED AGREEMENTS" shall mean all Related
Agreements to which the Companies and/or the Sellers are parties or which are to
be performed or complied with by the Companies and/or the Sellers on or prior to
the Closing Date.
1.31 "SHARES" shall have the meaning ascribed to that
term in the recitals hereto.
1.32 "SUBSIDIARIES" shall mean those companies listed on
Schedule 4.2 annexed hereto.
1.33 "TAX" OR "TAXES" shall mean any and all Canadian,
federal, provincial, local, foreign or other income, alternative minimum,
accumulated earnings, add-on, personal holding company, franchise, capital
stock, net worth, capital, profits, gross receipt, stamp, value added, sales,
use, goods and services, transaction, excise, customs, transfer, conveyance,
mortgage, registration, stamp, documentary, recording, premium, charges, fees,
severance, environmental, real property, gains, personal property, ad valorem,
intangibles, rent, occupancy, license, occupational, employment, unemployment
insurance, social security, disability, workers' compensation, payroll,
withholding, estimated or other similar tax, duty or other governmental charge
or assessment or deficiency thereof, including all interest and penalties
thereon and additions thereto whether disputed or not.
1.34 "TCH" shall have the meaning ascribed to that term
in the preamble hereof.
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1.35 "TICKETMASTER SHARES" shall have the meaning
ascribed to that term in Section 3.2.
1.36 "TO THE BEST KNOWLEDGE OF THE SELLERS" shall mean
the actual knowledge, after due inquiry, of the Sellers, the officers, directors
and senior management personnel of the Sellers and the officers, directors, and
senior management personnel of the Companies after "due inquiry". "DUE INQUIRY"
shall mean making a good faith effort under the circumstances to ascertain the
truth or correctness of the matter at issue, including, without limitation, a
review of all applicable books and records of the Sellers and the Companies, the
making of inquiries of the employees of the Sellers and the Companies with
responsibility for the matter at issue and discussions with the advisors to and
consultants for the Sellers and the Companies, including, without limitation,
their attorneys and accountants.
ARTICLE II.
PURCHASE AND SALE OF THE SHARES
2.1 AGREEMENT TO SELL AND PURCHASE. Subject to and
upon the terms and conditions set forth in this Agreement, at the Closing, the
Sellers will sell, transfer, convey, assign and deliver to the Buyer, and the
Buyer will purchase from the Sellers, all of the Shares. The Sellers shall
deliver to the Buyer (or a designated Affiliate of the Buyer as provided in
Section 2.3), duly endorsed stock certificates evidencing the Shares (and the
transfer thereof), free and clear of all Liens, and shall cause such transfer
and the name of the transferee to be duly recorded in TCH's minute book.
2.2 CLOSING. The closing of the transactions
contemplated under this Agreement (the "Closing") shall take place at the
offices of ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ on May 14, 1997 (the "Closing Date"), contingent upon
the satisfaction or waiver of all conditions precedent set forth in Articles
VIII, IX and X or at such other time and place as the parties may agree.
2.3 ACQUISITION BY AFFILIATES. Notwithstanding
anything to the contrary in this Agreement, the Buyer may cause the Shares to be
acquired by one (1) or more Affiliates of the Buyer; provided, however, that the
Buyer shall remain liable for the obligations of the Buyer hereunder.
2.4 OBLIGATIONS OF THE SELLERS AND THE COMPANIES AT
CLOSING; FURTHER ASSURANCES.
(i) At the Closing, the Sellers and the Companies
agree to deliver to the Buyer, or its designated Affiliate (and, as applicable,
execute):
(a) stock certificates representing the Shares, duly
endorsed in blank, with all necessary stock
transfer stamps, if any, attached;
(b) undated resignations of all of the directors and
officers of the Companies, effective immediately;
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(c) general releases from each of the Sellers in favor
of the Companies, and general releases from any
beneficiaries under any pension plan;
(d) certificates (and facsimile updates dated within
ten (10) days of the Closing Date) as to the good
standing of the Companies, and filing of required
reports, from the appropriate officials of each of
the jurisdictions in which the Companies are
incorporated or qualified and authorized to do
business as foreign corporations;
(e) the opinion of the Sellers' counsel, substantially
in the form of Schedule 9.9 annexed hereto;
(f) the Employment Agreements referenced in Section
10.7 hereto;
(g) a certified copy of resolutions adopted by the
Board of Directors of each of the Companies
authorizing the execution, delivery and
performance of this Agreement and the Sellers'
Related Documents and consenting to the transfer
of the Shares from the Sellers to the Buyer;
(h) a true and correct copy of TCH's articles of
incorporation and memorandum certified by the
Registrar of Companies, and certified by the Chief
Executive Officer of TCH;
(i) all Consents;
(j) the Escrow Agreement;
(k) all other documents and instruments required to be
delivered to the Buyer pursuant to this Agreement.
(ii) At any time and from time to time after the
Closing, at the Buyer's request and expense, without further consideration, the
Sellers shall execute and deliver such other additional instruments of sale,
transfer, conveyance, assignment and confirmation and take such other action as
the Buyer may reasonably deem necessary or desirable in order to transfer,
convey and assign to the Buyer, and confirm the Buyer's title to, the Shares,
to put the Buyer in actual possession and operating control of all of the
business, properties, assets and good will of the Companies and to assist the
Buyer in exercising all rights with respect thereto and take such actions and
execute such documents or instruments as may be reasonably requested by the
Buyer in connection with any governmental or regulatory matters or filings
required to be made by the Buyer, including, without limitation, any filings,
documents or instruments to be delivered to the SEC or any other Governmental
Authority, the Buyer's lenders or auditors, or any other appropriate party.
2.5 THE BUYER'S OBLIGATIONS AT CLOSING. (i) At the
Closing, the Buyer agrees to deliver, or cause to be delivered, as the case may
be, to the Sellers (and, as applicable, execute):
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(a) the Purchase Price as provided in
Section 3 hereof;
(b) a certified copy of resolutions adopted
by the Board of Directors of the Buyer authorizing the
execution, delivery and performance of this Agreement and
the Buyer's Related Agreements;
(c) a copy of the Buyer's certificate of
incorporation, as amended, certified by the Office of the
Secretary of State of Illinois, and a true and correct copy
of the by-laws, as amended, of the Buyer as certified by the
secretary or an assistant secretary of the Buyer;
(d) certificates as to the good standing of
the Buyer and of any Affiliate of the Buyer referenced in
sections 2.3 and 3.2 hereof, and filing of required
reports, from the appropriate officials of the
jurisdictions in which the Buyer or any such Affiliate is
incorporated;
(e) a certified copy of resolutions adopted
by Board of Directors of any Affiliate of the Buyer
referenced in sections 2.3 and 3.2 hereof authorizing the
issuance of the Ticketmaster Shares;
(f) a copy of the articles of incorporation,
as amended, of any Affiliate of the Buyer referenced in
Sections 2.3 and 3.2 hereof, certified by the Director,
Canada Business Corporations Act, and a true and correct
copy of the by-laws, as amended, of such Affiliate as
certified by the secretary or assistant secretary of such
Affiliate;
(g) an opinion of the Buyer's counsel
substantially in the form of Schedule 10.8 annexed hereto;
(h) the Employment Agreements referenced in
Section 10.7 hereof;
(i) the Escrow Agreement; and
(j) all other documents and instruments
required to be delivered to the Sellers pursuant to this
Agreement.
(ii) At any time and from time to time after the
Closing, at the Sellers' request and expense, without further consideration,
the Buyer or the Affiliate of the Buyer referenced in Sections 2.3 and 3.2
hereof shall execute and deliver such other additional instruments as the
Sellers may reasonably deem necessary to evidence the Buyer's obligations under
this Agreement, and the Buyer or the Affiliate of the Buyer referenced in
Sections 2.3 and 3.2 hereof agrees to take such actions as may be reasonably
necessary to carry out the purposes and intentions of this Agreement, including
but not limited to the prompt filing of a joint election under subsection 85(1)
of the Income Tax Act (Canada) upon receipt by the Buyer or the Affiliate of
the Buyer referenced in Sections 2.3 and 3.2 hereof of a written request from a
Seller.
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ARTICLE III.
PURCHASE PRICE
3.1 PURCHASE PRICE. In full consideration of the
sale, transfer, conveyance, assignment and delivery of the Shares by the
Sellers to the Buyer, and in reliance upon the representations and warranties
made herein by the Sellers and the Companies, the Buyer agrees to deliver to
the Sellers at the Closing, Canadian $44,650,000, payable in cash and
securities as provided in Sections 3.2 and 3.3 (the "Purchase Price"), subject
to the Escrow Amount as set forth in Section 3.4.
3.2 PAYMENT OF THE PURCHASE PRICE. The Purchase Price
shall be payable by the Buyer to the Sellers as follows: (i) fifty percent
(50%) of the Purchase Price shall be in Canadian dollars (the "Cash Portion of
the Purchase Price") payable by bank draft of ▇▇▇▇▇ Fargo Bank, N.A. made
payable to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation, as agent for the Sellers,
subject to the Escrow Amount, and delivered to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇, LLP., as agent for the Sellers and the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law
Corporation, in return for delivery of 50% of the Shares of the Company as
identified on Schedule 3.2(i); and (ii) fifty percent (50%) of the Purchase
Price shall be payable to the Sellers by the delivery of the Ticketmaster
Shares (as defined below) (the "Stock Portion of the Purchase Price") in the
amounts set forth on Schedule 3.2(ii)(a) directly to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law
Corporation, as agent for the Sellers, subject to the Escrow Amount, which
shall be exchanged for the remaining 50% of the Shares of the Company as
identified on Schedule 3.2(ii)(b). As used herein, "Ticketmaster Shares" shall
mean such number of shares of capital stock of a wholly-owned direct or
indirect Canadian subsidiary which is an Affiliate of the Buyer as is
determined by dividing 50% of the Purchase Price by U.S. $14.50, based on the
Exchange Rate.
3.3 THE TICKETMASTER SHARES.
(i) The Ticketmaster Shares shall be issued to
the Sellers pursuant to this Agreement and Regulation S of the Securities Act
and shall be exchangeable into non-registered restricted common stock of the
Buyer on a one for one basis in accordance with and subject to the terms and
conditions of this Agreement. The Ticketmaster Shares shall track the common
stock of the Buyer and shall be entitled to the rights and benefits of the
common stock of the Buyer as set forth on Schedule 3.3(i) annexed hereto, and
the Buyer hereby agrees and covenants that it will perform in the manner set
forth in said Schedule 3.3(i). At the time a Seller elects to exchange all or
any number of its Ticketmaster Shares into common stock of the Buyer, the
Seller shall send a notice to the Buyer (the "Exchange Notice") setting forth
the identity of the Seller and the number of Ticketmaster Shares to be
exchanged into shares of common stock of the Buyer and shall deliver the
Ticketmaster Shares to the Buyer and shall execute and deliver to the Buyer any
documents in connection with the exchange as may be reasonably requested by the
Buyer, including but not limited to, a statement containing certain
representations and warranties regarding the Seller's ownership of the
Ticketmaster Shares and the Seller's investment intent and related matters as
they pertain to the shares of common stock of the Buyer substantially as set
forth in Section 4.28. Subject to Section 3.3(ii), the Buyer shall deliver the
non-registered restricted shares of common stock of the Buyer to the exchanging
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Seller within ten (10) Business Days of its receipt of the Exchange Notice and
satisfaction of all reasonable conditions precedent. The Ticketmaster Shares
(which, for purposes of this Section 3.3(i) include shares of the common stock
of the Buyer issued to the Sellers pursuant to the exchange right provided in
this Section 3.3(i)) shall bear restrictive legends substantially in the form
set forth in Schedule 3.3(ii) annexed hereto. Until such time as a Seller
exchanges his Ticketmaster Shares for shares of common stock of the Buyer, such
Seller shall have no rights as a shareholder of the Buyer or any of its
successors, including, without limitation, the right to receive notice, the
right to vote or appraisal or dissenter's rights.
(ii) Right of First Refusal and Exchange Upon
Demand of the Buyer.
(a) In the event that any one or more of the
Sellers intends to sell or otherwise transfer any or all of
the Ticketmaster Shares or the shares of the common stock of
the Buyer issued by the Sellers pursuant to the exchange
right provided in Sections 3.3(i) or 3.3(ii)(e) (the
"Offered Shares") in a transaction effected other than on
the Nasdaq stock market or on a stock exchange upon which
the Offered Shares are then listed, then such Seller(s)
shall immediately give to the Buyer notice (a "Selling
Notice") stating its/their intention to sell or transfer
such Offered Shares, and identifying the number of Offered
Shares proposed to be sold or transferred and the identity
of the proposed purchaser or transferee.
(b) Upon the Selling Notice having been
given, the Buyer shall have seven (7) Business Days from the
date when such notice shall be deemed to have been received
by the Buyer within which to give to the Sellers a notice (a
"Purchase Notice") that it agrees to purchase all of the
Offered Shares. The Buyer shall close the purchase of the
shares identified in the Selling Notice within twenty (20)
Business Days after the date when such Purchase Notice shall
be deemed to have been received by the Seller(s) by delivery
of a certified check or a wire transfer to an account
designated by the Seller(s) at a price equal to the closing
price of a share of common stock of the Buyer as set forth
in the Wall Street Journal as of the date the Selling Notice
shall be deemed to have been received by the Buyer.
(c) In the event that the right of first
refusal contemplated by this Section 3.3(ii) is not
exercised by the Buyer and Seller(s) does not sell, for any
reason whatsoever, the Offered Shares within forty-five (45)
days from the date when such Selling Notice shall be deemed
to have been received by the Buyer, or if the transferee of
the Offered Shares is a Related Party of the Transferor,
then the right of first refusal contemplated by this Section
3.3(ii) shall once again or continue to apply to any
subsequent proposed sale or transfer of the Offered Shares.
(d) The Buyer, at any time on or after
January 1, 2001, may require the Sellers to exchange their
Ticketmaster Shares for shares of common stock of the Buyer
in the manner contemplated by Section 3.3(i) by written
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notice delivered by the Buyer to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law
Corporation, as agent for the Sellers, who shall then notify
the applicable Sellers. Upon delivery of such written
notice, the exchange shall be deemed to have occurred
without the necessity of any action of or consent by the
Sellers, and the Ticketmaster Shares will no longer be or
constitute outstanding securities of the issuer of the
Ticketmaster Shares; provided, however, that the Sellers
shall thereafter be deemed to be holders of the shares of
common stock of the Buyer issuable upon exchange whether or
not stock certificates evidencing such share are
concurrently delivered to the Sellers.
(e) If, at any time after the Closing Date,
there shall occur in the reasonable judgment of the Buyer,
any change in the accounting, reporting or tax principles or
treatments pertaining to this Agreement and the Related
Agreements, and the transactions contemplated hereby and
thereby, described in the Accountants' Letter referred to in
Section 9.15, whether by way of changes in Applicable Law,
judicial decisions, pronouncements of the SEC, the Financial
Accounting Standards Board or any other body, organization
or agency governing or regulating accounting and financial
reporting or written advice or positions delivered to the
Buyer by its then outside auditors, then the Buyer may
require the Sellers to exchange their Ticketmaster Shares
for shares of common stock of the Buyer in the manner
contemplated by Section 3.3(i) by written notice delivered
by the Buyer to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation, as
agent for the Sellers, who shall then notify the applicable
Sellers. Upon delivery of such written notice, the exchange
shall be deemed to have occurred without the necessity of
any action of or consent by the Sellers, and the
Ticketmaster Shares will no longer be or constitute
outstanding securities of the issuer of the Ticketmaster
Shares; provided, however, that the Sellers shall thereafter
be deemed to be holders of the shares of common stock of the
Buyer issuable upon exchange whether or not stock
certificates evidencing such share are concurrently
delivered to the Sellers.
3.4 ESCROW AMOUNT.
(i) From the Cash Portion of the Purchase Price, the
Buyer shall deposit the sum of Canadian $2,000,010.84 in escrow and from the
Stock Portion of the Purchase Price, the Buyer shall place the total number of
shares set forth on Schedule 3.4(ii) in one certificate in escrow
(collectively, the "Escrow Amount") which shall be paid or delivered to the
Sellers, if at all, in accordance with Sections 3.4(ii) hereof. The Escrow
Amount shall be deposited by the Buyer into a segregated account (the "Escrow
Account") pursuant to an Escrow Agreement among the Buyer, the Sellers and IBJ
▇▇▇▇▇▇▇▇ Bank & Trust Company substantially in the form set forth in Exhibit
3.4(i) annexed hereto (the "Escrow Agreement"). The Escrow Amount shall remain
in the Escrow Account, subject to the terms of the Escrow Agreement, for a
period of two (2) years from the Closing Date.
(ii) The Escrow Amount, together with all interest
earned from the Closing Date, shall remain in the Escrow Account for the
balance of the term of the Escrow Agreement to secure any reimbursement
obligation or liability of the Sellers pursuant to the indemnification
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provisions hereof. Upon the termination of the Escrow Agreement, the remainder
of the Escrow Amount, if any, together with all interest earned on such
remainder from the Closing Date, shall be remitted promptly by the Escrow Agent
to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation for distribution to the Sellers in
accordance with Schedule 3.4(ii) provided that a draw is not made against the
Escrow Amount; provided, however, that in the event that a draw is made against
the Escrow Amount, then the Sellers' Agents pursuant to 13.14 shall advise the
Escrow Agent in writing regarding the distribution of the remaining Deposit in
accordance with the Escrow Agreement. All of the income taxes in respect of the
interest earned on the Escrow Amount shall be borne by the parties to which
such interest is paid.
(iii) Any inconsistency between this Section 3.4 and the
terms of the Escrow Agreement shall be resolved in favor of the Escrow
Agreement.
3.5 RESTRICTIONS ON THE SALE OF SHARES. Without the
prior written consent of the Buyer, the Sellers agree that they will not sell
or otherwise transfer all or any of the shares of common stock of the Buyer
issued to the Sellers pursuant to the exchange right provided in Sections
3.3(i) or 3.3(ii)(e) except in strict compliance with the volume limitations of
SEC Rule 144, it being agreed and understood that (i) this restriction is
contractual in nature and in addition to any restrictions upon transfer that
may be imposed upon the Sellers by Regulation S, Rule 144 or otherwise, (ii)
for purposes of determining volume, the Sellers shall be deemed to be and
treated as one holder of shares of common stock of Buyer and their sales and
other transfers of shares shall be aggregated and (iii) this restriction shall
be applicable so long as any of the Sellers continues to hold shares of common
stock of the Buyer issued pursuant to the exchange right. For purposes of the
determining which holders of common stock of the Buyer are eligible to sell
shares in compliance with the volume limitations of Rule 144, priority will be
given to holders in the order that written notice of sale or proposed sale is
received by the Buyer from the holders, it being agreed and understood that the
Buyer's determination relative to the order of receipt of such notices shall be
binding upon all such holders.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANIES
Except as to Sections 4.5, 4.28, and 4.30 hereof (solely as
they pertain to the Sellers), as to which each Seller represents only with
respect to the Shares of the capital stock of TCH owned by such Seller, the
Sellers and the Companies jointly and severally represent and warrant to the
Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING, QUALIFICATION AND
POWER. Each of the entities comprising the Companies is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of incorporation as shown on Schedule 4.1 annexed hereto, and has
all requisite corporate power and authority to enter into this Agreement and
the Sellers' Related Agreements and to carry out the transactions contemplated
by this Agreement. The Companies have all requisite power to carry on their
business as now being conducted and to own, lease or operate their properties
in the places where such business is now conducted and such properties are now
owned, leased or operated, and each entity comprising
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the Companies is duly qualified, licensed and in good standing as a corporation
authorized to do business in the provinces listed on Schedule 4.1, which are
the only provinces where the failure to be so qualified would have a material
adverse effect on the condition, financial or otherwise, of the Companies.
Each of the Subsidiaries is a registrant for the purposes of Canadian Goods and
Services Tax within the meaning of Part IX of the Excise Tax Act Canada. The
Companies have delivered to the Buyer true and complete copies of the articles
of incorporation of each of the entities comprising the Companies and all
amendments thereto, certified as true and correct by the applicable Registrar
of Companies or comparable governmental agency for each jurisdiction of
incorporation, and the articles or by-laws as presently in effect of each of
the entities comprising the Companies, certified as true and correct by the
Companies' presidents.
4.2 SUBSIDIARIES. The Companies have no
subsidiaries (except those listed on Schedule 4.2 annexed hereto). The
Companies own all of the issued and outstanding capital stock of each of the
Subsidiaries and the capitalization of each Subsidiary is set as forth on
Schedule 4.2. Except as set forth on Schedule 4.2, the Companies have no
interest, directly or indirectly, and have no commitment to purchase any
interest, directly or indirectly, in any other corporation or in any
partnership, joint venture or other business enterprise or entity. Except as
set forth on Schedule 4.2, the business carried on by each of the Companies has
not been conducted through any other direct or indirect subsidiary or affiliate
of any present or former stockholder of the Companies. Except as set forth on
Schedule 4.2, there are no securities or obligations of any Subsidiary directly
or indirectly convertible, exercisable or exchangeable into or for any of the
capital stock of any Subsidiary, including, but not limited to, any options,
warrants, rights, agreements, understandings or commitments, vested or
unvested, of any nature whatsoever.
4.3 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT;
AUTHORITY. Except as set forth on Schedule 4.3 annexed hereto, neither the
execution, delivery nor performance of this Agreement and Sellers' Related
Agreements will, with or without the giving of notice or the passage of time,
or both, conflict with, result in a default, right to accelerate or loss of
rights under, or result in the creation of any Lien pursuant to any provision
of the Companies' articles of incorporation or by-laws, each as amended, or any
franchise, mortgage, deed of trust, lease, license, agreement, Applicable Law,
rule or regulation or any order, judgment or decree to which any of the
Sellers or the Companies, as the case may be, is a party or by which any of
them may be bound or materially or adversely affected or require any consent,
authorization, approval or any other action by, or any notice to, or filing or
registration with, any governmental authority or other third party. Except as
set forth on Schedule 4.3, no other party, including, without limitation, any
present or former partner, stockholder, or employee of the Companies or the
Sellers have, or may or will have, any right to any of the Sellers' interest in
the Companies or the proceeds of the sale of the Shares. Except as set forth
on Schedule 4.3, no consent is required to be obtained or made by the Sellers
or the Companies in connection with the execution and delivery of this
Agreement or the Sellers' Related Agreements or to consummate the transactions
contemplated hereby, and there is no legal, valid and binding obligation of the
Sellers or the Companies to provide any right of first refusal or similar right
or obligation with respect to the sale of the Shares or the assets of the
Companies to any third party, including, but not limited to, Vancouver Hockey
Club Ltd., on behalf of itself and its associated companies, Orca Bay Limited
Partnership, Orca Bay Basketball Limited
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19
Partnership and Orca Bay Basketball Management Inc. (collectively, "Orca Bay")
provided that the Closing Date is on or before May 15, 1997. The Sellers and
the Companies each have the full power and authority to enter into this
Agreement and, as applicable, the Sellers' Related Agreements and to carry out
the transactions contemplated hereby and thereby. All proceedings required to
be taken by them to authorize and approve the execution, delivery and
performance of this Agreement and the Sellers' Related Agreements have been
properly taken, and this Agreement and the Sellers' Related Agreements
constitute valid and binding obligations of the Sellers and the Companies,
enforceable in accordance with their terms, except that such enforcement may be
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium and similar law affecting creditors' rights generally. The
execution, delivery and performance of this Agreement and the Sellers' Related
Agreements have been duly authorized, to the extent required by Applicable Law
and by all requisite corporate and stockholder action of the Companies and of
the Sellers, if necessary.
4.4 CAPITALIZATION. The authorized capital of TCH
consists of two hundred fifty million (250,000,000) shares, divided as follows:
(i) fifty million (50,000,000) Class A Voting Common Shares without par value;
(ii) fifty million (50,000,000) Class B Voting Common Shares with a par value
of $0.001 each; (iii) fifty million (50,000,000) Class C Non-Voting Common
Shares with a par value of $0.001 each; (iv) fifty million (50,000,000) Class A
Preferred Shares with a par value of $0.01 each; and (v) fifty million
(50,000,000) Class B Preferred Shares without par value. The capital stock has
Special Rights and Restrictions attached thereto as set out in the articles of
incorporation of the Company. The Shares are issued and outstanding on the
date hereof, have been duly authorized and validly issued, are fully paid and
non-assessable, and are owned by Sellers. Except as otherwise disclosed on
Schedule 4.4 annexed hereto, there are no outstanding subscriptions, rights,
options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or nature
whatsoever, vested or unvested, under which the Companies or the Sellers are or
may become obligated to issue, assign or transfer any shares of the capital
stock of TCH. For purposes of this section, the par value of the shares is set
forth in Canadian dollars.
4.5 OWNERSHIP OF TCH'S CAPITAL STOCK. The shares
listed on Schedule A are all of the issued and outstanding shares OF capital
stock in TCH. The Sellers are the lawful sole record owners of all of TCH's
capital stock, and the Sellers (except in the case of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ who
holds certain of his shares in trust, and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ who holds certain
of his shares in trust) are the beneficial owners of all of TCH's capital stock
(as set forth on Schedule A annexed hereto), free and clear of any Liens and
restrictions of any kind. With respect to ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, in Trust, and
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in Trust, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ hold
their Shares as Trustees on the terms of the settlement agreements, dated as of
February 17, 1995 (the "Trusts"), and have all requisite power and authority to
transfer such Shares and to execute and deliver this Agreement on behalf of the
Trusts and to bind the Trusts to the terms hereof. Neither the Companies nor
the Sellers nor any of their respective Affiliates is a party to or otherwise
subject to any agreement, understanding or arrangement regarding the transfer,
sale, disposition, purchase, acquisition or voting of, or the receipt of
dividends or other distributions upon, the Shares. Upon the delivery thereof
to the Buyer at Closing, together with executed stock transfer forms in respect
thereof, the Buyer will acquire good, marketable and valid title to the Shares
free and clear of any Liens and restrictions
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of any kind.
4.6 FINANCIAL STATEMENTS. The Sellers have delivered
to the Buyer the Financial Statements, copies of which are set forth in
Schedule 4.6 annexed hereto, all of which are true, accurate and correct, and
have been prepared in good faith from the books and records of all of the
entities comprising the Subsidiaries, in conformity with Canadian generally
accepted accounting principles consistently applied and fairly present the
financial position of the Companies at such dates and for the periods then
ended.
4.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set
forth on Schedule 4.7 annexed hereto, or as reflected in the Financial
Statements, as of the Closing Date, the Companies have no debts, liabilities,
or obligations (whether absolute, accrued, matured or unmatured, fixed or
contingent, known or unknown) of any nature whatsoever.
4.8 ABSENCE OF CHANGES OR EVENTS. Except as set forth
on Schedule 4.8 annexed hereto and in the Financial Statements, since the
Balance Sheet Date, the Companies have conducted their business only in the
ordinary course and have not:
(i) incurred any obligation or liability,
absolute, accrued, contingent or otherwise, whether due or
to become due, except current liabilities for trade or
business obligations in the ordinary course of business and
consistent with their prior practice, none of which
liabilities, individually or in the aggregate, materially
and adversely affects the business, properties, prospects,
assets, liabilities or condition, financial or otherwise, of
the Companies;
(ii) discharged or satisfied any Lien other
than those then required to be discharged or satisfied, or
paid any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, other
than current liabilities shown on the Balance Sheet and
current liabilities incurred since the Balance Sheet Date in
the ordinary course of business and consistent with their
prior practice;
(iii) other than intercompany dividends
between the Companies and the dividends to the Sellers set
forth in Schedule 4.8 (subject to the conditions set forth
on Section 9.11), declared or made any payment of dividends
or other distribution to their stockholders or upon or in
respect of any shares of its capital stock, or purchased,
retired or redeemed, or obligated themselves to purchase,
retire or redeem, any of their shares of capital stock or
other securities;
(iv) mortgaged, pledged or subjected to Lien
or restriction any of its property, business or assets,
tangible or intangible;
(v) sold, transferred, leased to others or
otherwise disposed of any of their assets except in the
ordinary course of business and consistent with their prior
practice, other than with respect to the sale of the
condominium resort
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21
owned by Desert Rentals Joint Venture (with respect to which
the Sellers shall be responsible for any and all costs and
Taxes incurred in connection with such sale), or canceled or
compromised any debt or claim, or waived or released any
right of substantial value;
(vi) received any notice of termination or
breach of, or intent to terminate, any contract, including,
but not limited to, any contract with any client, customer,
ticket outlet, ,promoter or venue, lease or other agreement,
or suffered any damage, destruction or loss (whether or not
covered by insurance individually above $10,000 or in the
aggregate above $20,000) which, in any case or in the
aggregate, has had or may have a materially adverse effect
on its assets, properties, operations or prospects;
(vii) encountered any labor union organizing
activity, had any actual or threatened employee strikes,
work stoppages, slow-downs or lock-outs or had any material
change in their relations with their employees, agents,
customers or suppliers;
(viii) transferred or granted any rights under,
or entered into any settlement regarding the breach or
infringement of, any Canadian, United States or other
foreign license, patent, copyright, trademark, trade name,
invention or similar rights, or modified any existing rights
with respect thereto;
(ix) made any material change in the rate of
compensation, commission, bonus or other direct or indirect
remuneration payable, or paid or agreed or orally promised
to pay, conditionally or otherwise, any material bonus,
extra compensation, pension or severance or vacation pay, to
any stockholder, director, officer, employee, salesman,
distributor or agent of the Companies;
(x) issued or sold any shares of their
capital stock or other securities, or issued, granted or
sold any options, rights or warrants with respect thereto,
or acquired any capital stock or other securities of any
corporation or other entity or any interest in any business
enterprise, or otherwise made any loan or advance to or
investment in any Person;
(xi) made any capital expenditures or capital
additions or betterments in excess of an aggregate of
$50,000;
(xii) changed its banking or safe deposit
arrangements;
(xiii) made any change in any accounting
procedure or practice;
(xiv) instituted, settled or agreed to settle
any litigation, action or proceeding before any court or
governmental body relating to the Companies or their
property or business;
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(xv) failed to replenish their inventories
and supplies in a normal and customary manner consistent
with their prior practice or made any purchase commitment in
excess of the normal, ordinary and usual requirements of
their business or at any price in excess of the then current
market price or upon terms and conditions more onerous than
those usual and customary in the industry, or made any
material change in their selling, pricing, advertising or
personnel practices inconsistent with their prior practice;
(xvi) suffered any change, event or condition
which, individually or in the aggregate, has had or is now
likely to have a materially adverse affect on the Companies'
condition (financial or otherwise), properties, assets,
liabilities, operations or prospects including, without
limitation, any change in the Companies' revenues, costs,
levels of committed business or relations with its
employees, agents, clients, customers or suppliers;
(xvii) entered into any transaction, contract
or commitment other than in the ordinary course of business
and consistent with their prior practice or paid or agreed
to pay any legal, accounting, brokerage, finder's fee, Taxes
or other expenses in connection with, or incurred any
severance pay obligations by reason of, this Agreement or
the transactions contemplated hereby; or
(xviii) entered into any agreement or made any
commitment, whether written or oral, to take any of the
types of action described in subparagraphs (i) through
(xvii) above.
4.9 INDEPENDENT ACCOUNTANTS; BOOKS AND RECORDS. The
accountants who examined the audited Financial Statements are independent
public accountants with respect to the Companies. The books and records
maintained by the Companies and upon which the Financial Statements are based
are true and complete in all material respects and accurately reflect the
Companies' business. The Companies maintain a system of internal accounting
control sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with Canadian generally accepted accounting
principles, consistently applied, and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
4.10 ACCOUNTS RECEIVABLE. Except as set forth on
Schedule 4.10 annexed hereto, all accounts receivable, unbilled invoices and
other debts due or recorded in the records and books of account of the
Companies as being due to the Companies (less the amount of any provision or
reserve therefor made in the records and books of account of the Companies) (i)
arose in the ordinary course of business and (ii) are collectible in full in
the ordinary course of the Companies' business, and shall be (or have been)
fully collected when due, or in the case of each account receivable, within
ninety (90) days after it arose, without resort to litigation and without
offset or counterclaim, in the aggregate face amounts thereof net of reserves
established therefor on the Balance Sheet. Set forth on Schedule 4.10 annexed
hereto are the Companies'
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accounts and trade receivables as of the Balance Sheet Date.
4.11 NO GUARANTIES. Except as set forth on Schedule
4.11 annexed hereto, none of the obligations or liabilities of the Companies
are guaranteed by any other Person, nor have the Companies guaranteed the
obligations or liabilities of any other Person; provided, however, that in the
event that the Companies have any costs, liabilities or claims against or paid
by the Companies in connection with the guaranty set forth on Schedule 4.11,
then such costs, claim or liability shall be subject to indemnification by the
Sellers to the Buyer in accordance with Article 12.1 and the second sentence of
Article 12.3 hereof.
4.12 PROPERTIES.
(i) Except as set forth on Schedule 4.12
annexed hereto, the Companies have good and marketable title
to all properties and assets reflected on the Balance Sheet
(except properties and assets sold or otherwise disposed of
in the ordinary course of business and consistent with their
prior practice after the date of the Balance Sheet), free
and clear of all Liens. Except as set forth on Schedule
4.12, all properties of the Companies (whether owned, leased
or subleased) are in compliance with all material applicable
laws, statutes, rules and regulations (including, without
limitation, building, zoning and environmental laws) and all
material covenants, conditions, restrictions or easements
affecting the properties or their use or occupancy, and no
notices of any material violations thereof have been
received.
(ii) Each of the leases and subleases (the
"Leases") under which properties are leased or subleased to
the Companies (the "Leased Property") is executed,
unmodified, and in full force and effect (in the form
delivered or made available to the Buyer), and there are no
other agreements, written or oral, between the Companies and
any third parties claiming an interest in the Companies'
interest in the Leased Property or otherwise affecting their
use and occupancy thereof. Each sublease which constitutes
a Lease, is permitted by the terms of the relevant prime
lease or permit, and each such prime lease or permit is in
full force and effect. A description of each Lease
(including, without limitation, the identity of the leased
property, the landlord, the term and the monetary terms,
including rental payments) is set forth in Schedule 4.12.
The Companies are not in default under any of the Leases,
and no material defaults (whether or not subsequently cured)
by the Companies have been alleged thereunder. Each lessor
and sublessor named in any of the Leases is not in default
thereunder, and no defaults (whether or not subsequently
cured) by such lessor have been alleged thereunder.
(iii) All of the Personal Property is in good
condition and repair, ordinary wear and tear excepted.
(iv) Except as set forth on Schedule 4.12, no
facilities, services or employees shared with any other
Person are used in connection with the business and
operations of the Companies.
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4.13 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS.
Except as set forth on Schedule 4.13 annexed hereto, the Companies have
complied with all existing laws, rules, regulations, ordinances, orders,
judgments and decrees now applicable to their business, properties or
operations. Neither the ownership nor use of the Companies' assets or
properties nor the conduct of their business violates, conflicts with or
results in a default, right to accelerate or loss of rights under, or with or
without the giving of notice or the passage of time, or both, will violate,
conflict with or result in a default, right to accelerate or loss of rights
under, any terms or provisions of their articles of incorporation or by-laws as
presently in effect, or any Liens, deed of trust, lease, license, agreement,
understanding, law, ordinance, rule or regulation, or any order, judgment or
decree to which they are a party or by which they or any of their assets or
properties may be bound or affected, or conflicts with the rights of any other
person where such conflict would result in the occurrence of any of the
foregoing.
4.14 GOVERNMENTAL AUTHORIZATION. The Companies (i)
have obtained all licenses, permits and other authorizations from all federal,
provincial, state, local and foreign authorities as are necessary for the
conduct of their business, each of which authorizations is in full force and
effect, and (ii) have made all filings and registrations which are necessary or
proper to conduct their business.
4.15 DOCUMENT PRODUCTION. Set forth on Schedule 4.15,
annexed hereto, are true and complete lists of the following (whether written
or oral) :
(i) Articles of incorporation and by-laws
of each of the entities comprising the Companies, each as amended;
(ii) Each deed, lease or sublease of real
property (and agreements to purchase, lease or sublease real property),
together with all amendments thereto, to which any of the Companies are a party
or by which their assets are bound;
(iii) Each written agreement, together with
all amendments thereto, authorizing or requiring any of the Companies to sell
tickets on behalf of or to a third party, or authorizing or requiring a third
party to sell tickets as a ticket outlet or agent of any of the Companies;
(iv) Each category of personal property owned
or leased by any of the Companies and each asset within any such category which
has a book value or current market value in excess of $25,000 or group of
related such items valued in excess of $50,000 or which is leased under an
agreement providing for annual lease payments in respect thereof in an amount
in excess of $25,000;
(v) Each registration, certificate or
application with respect to the Intellectual Property and all licenses of the
Intellectual Property by any of the Companies to any third party or from any
third party to any of the Companies, excluding, however, commercially
available, standard ("canned") software; provided, however, that in the event
that there is any cost, claim, or any other liability paid by or against the
Companies with respect to remedying any and all issues with respect to the
existing use of the software licenses by the Companies, then such costs,
liabilities or claims against or paid by the Companies in the amount in excess
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of Canadian $70,000 shall be subject to indemnification by the Sellers to the
Buyer in accordance with Article 12.1 and the second sentence of Article 12.3
hereof;
(vi) Each policy of fire, liability, title or
other form of insurance, together with all amendments thereto, held by any of
the Companies or covering their assets and all material claims (i.e., greater
than $25,000) pending thereunder;
(vii) Each agreement, together with all
amendments thereto, respecting, or other instrument evidencing, indebtedness
for borrowed money, the deferred purchase price of personal property or a
capitalized lease pursuant to which any of the Companies is an obligor or a
guarantor thereunder or an asset owned or utilized by any of the Companies is
subject to a Lien;
(viii) Each employment agreement, consulting
agreement, indemnification agreement, confidentiality agreement,
non-competition or non-disclosure agreement, together with all amendments
thereto, to which any of the Companies are a party or by which any of the
Companies is bound;
(ix) Each material agreement, permit, license
or certificate between any of the Companies and any governmental entity
(federal, provincial, state, local or foreign) or other regulatory authority,
or provided by any governmental entity or other regulatory authority to any of
the Companies;
(x) Each collective bargaining agreement and
union contract, together with all amendments thereto, and each pension plan and
identification of all employees who are beneficiaries under the plans, and all
amendments thereto, to which any of the Companies is a party or is otherwise
bound;
(xi) Each material advertising agreement of
any of the Companies, together with all amendments thereto (i.e., greater than
$25,000);
(xii) Each agreement of any of the Companies,
together with all amendments thereto, made in the ordinary course of business
requiring the expenditure of more than $25,000 per year, other than those
agreements listed in response to other Subsections of this Section 4.15;
(xiii) Each power of attorney or similar
authorization applicable to any of the Companies or its assets and each bank,
brokerage or similar account maintained by any of the Companies or into which
any of the Companies deposits funds;
(xiv) Each agreement of any of the Companies
not made in the ordinary course of business that is to be performed (in whole
or in part) on or after the date of this Agreement; and
(xv) Each stockholder agreement, voting trust
agreement, letter of credit, or guaranties, together with all amendments
thereto, regarding any of the Companies.
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True, complete and correct copies of each written instrument and agreement
described in this Section 4.15 have heretofore been furnished or made available
by the Sellers or the Companies to the Buyer. Schedule 4.15 contains a written
description and summary of the material terms and conditions of each oral
agreement described in this Section 4.15.
4.16 VALIDITY. Except as set forth on Schedule 4.16
annexed hereto, (i) all of the instruments and agreements listed or described
in Schedule 4.15 are executed, legal, valid and binding upon the Companies, and
to the best knowledge of the Companies and the Sellers, are executed, legal,
valid and binding on the other parties thereto, and the Companies have taken
all action required to be taken by them prior to the date hereof under all such
instruments and agreements, (ii) no breach or default (or event which, with
notice or lapse of time or both, would constitute any such breach or default)
by the Companies exists with respect to any of the instruments or agreements
listed or described in Schedule 4.15, (iii) no other party to such instruments
or agreements is in breach or default thereunder, (iv) no defaults (not
subsequently cured) by the Companies have been alleged under any such
instruments or agreements, nor is there any reasonable basis for any claim of
default by the Companies or any other party thereto now or in the future and
(v) neither the execution of this Agreement or the Sellers' Related Agreements
nor consummation of the transactions contemplated hereby or thereby shall give
any party to any of such instruments or agreements any rights or give rise to
any event which, with the passage of time or giving of notice or both, could
result in any right to terminate or modify its respective rights or obligations
thereunder, or constitute or be grounds for a breach or default under any such
instruments or agreements. The Companies have not waived any material right
under any instruments or agreements listed or described in Schedule 4.15,
except as set forth on Schedule 4.15.
4.17 LITIGATION. Except as set forth on Schedule 4.17
annexed hereto, there is no suit, claim, governmental investigation, action or
proceeding now pending or, to the best knowledge of the Sellers and the
Companies, threatened before any court, arbitration panel, administrative or
regulatory body or governmental agency against the Companies or the Sellers (or
any of them) or relating to any of their assets, nor is there any reasonable
basis for any such suit, claim, investigation, action or proceeding, the
adverse determination of which could have an adverse effect on the business,
assets, liabilities or prospects of the Companies or prevent or interfere with
the consummation of any of the transactions contemplated hereby. The Companies
are not in default with respect to any order, writ, injunction, decree or
demand of any court or other governmental, regulatory or administrative
authority applicable to any of the Companies.
4.18 EMPLOYEE RELATIONS. Except as set forth on
Schedule 4.18, (i) the Companies are in compliance with all federal,
provincial, state, local or foreign laws and regulations respecting labor,
employment and employment practices, terms and conditions of employment and
wages and hours; (ii) the Companies are not delinquent in payments to any of
their employees for any wages, salaries, commissions, bonuses, holiday
payments, vacation payments, profit sharing payments or other compensation for
any services performed by the employee or for amounts required to be reimbursed
to any of their employees; (iii) there is no pending or, to the best knowledge
of the Sellers and the Companies, threatened litigation by any employee, prior
employee or potential employee with respect to the Companies; (iv) there are no
pending or, to the best knowledge of the Sellers and the Companies, threatened
litigation or administrative actions or claims by employees or former employees
with respect to the
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Companies, including, without limitation, discrimination (whether for sex, age,
race, religion, national origin or any other reason) or sexual harassment; (v)
there is no unfair labor practice complaint against the Companies pending
before any Canadian or foreign agency; (vi) there is no labor strike, dispute,
slowdown or stoppage actually pending or, to the best knowledge of the Sellers
and the Companies, threatened against or involving the Companies or any of
their material clients or vendors; (vii) no grievance nor any arbitration
proceeding arising out of or under any collective bargaining agreement is
pending against or involving the Companies and, to the best knowledge of the
Sellers and the Companies, no claim therefor has been asserted; and (viii) the
Sellers and the Companies have no knowledge of any basis for the assertion of
any of the foregoing against the Companies; provided, however, that in the
event that the cost to the Companies of any settlement or judgment (including
but not limited to reasonable attorneys fees and costs) with respect to the
action referenced on Schedule 4.18 shall exceed Canadian $10,000, then such
costs, liabilities or claims against or paid by the Companies in the amount in
excess of Canadian $10,000 shall be subject to indemnification by the Sellers
to the Buyer in accordance with Article 12.1 and the second sentence of Article
12.3 hereof.
4.19 EMPLOYEE BENEFIT MATTERS. Schedule 4.19, annexed
hereto, lists all employee benefit plans and all bonus pay, stock option,
restricted stock, deferred and incentive compensation, supplemental retirement,
stock purchase, severance, vacation pay, sick pay, health, pension, or profit
sharing plan, or other plans, programs or arrangements, to which the Companies
contribute, have an obligation to contribute, maintain or sponsor (the "Benefit
Plans") and all employees who are beneficiaries under any such Benefit Plan.
Each of the Benefit Plans has been administered in compliance with its terms
and all applicable filing, reporting, disclosure, funding and other
requirements relating thereto have been complied with. The Benefit Plans have
been administered in compliance with all applicable law, including, but not
limited to, the Income Tax Act.
4.20 TAXES. Except as set forth on Schedule 4.20,
annexed hereto, all Taxes imposed by Canada, including federal, provincial, or
local, the United States, including federal, state or local, or by any other
foreign country, or by any other taxing authority, which are due or payable by
the Companies or any Affiliate of the Companies, have been paid in full; all
tax returns required to be filed in connection therewith have been accurately
prepared and duly and timely filed prior to the expiration of any available
extension periods; and all deposits required by law to be made by the Companies
or any Affiliate of the Companies with respect to employees' withholding taxes
have been duly made, except for the current reporting period which will be paid
when due. The Companies are not currently delinquent in the payment of any
foreign or domestic tax, assessment or governmental charge or deposit and have
no tax deficiency or claim outstanding, or, to the best knowledge of Sellers
and the Companies, proposed or assessed against them, and, to the best
knowledge of Sellers and the Companies, there is no basis for any such
deficiency or claim. There is not now in force any extension of time with
respect to the date on which any tax return was or is due to be filed by or
with respect to the Companies.
4.21 CONSENTS AND APPROVALS. Except as set forth in
Schedule 4.21 annexed hereto, no consent, approval or other action by, or
notice to, or registration or filing with any governmental or administrative
agency or authority or any other Person on the part of the Sellers or the
Companies is required or necessary in connection with the execution, delivery
or
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performance of this Agreement and/or the Sellers' Related Agreements by the
Sellers or the Companies, as the case may be.
4.22 INTELLECTUAL PROPERTY.
(i) Set forth on Schedule 4.22 annexed
hereto is (i) a list of all patents, copyrights, mask works, and trade and
service marks and names, whether registered, applied for, pending under the
Companies' name (exclusively or jointly with any other Person) or licensed or
assigned to the Companies (exclusively or jointly) (but excluding "canned"
software acquired and used by the Companies as an incidental part of their
business), together with the registration numbers, dates of issuance and names
of the inventors or authors or classes of such patents, mask works and
copyrights and (ii) a description of all proprietary hardware modifications and
all proprietary software related to the sale, distribution and management of
tickets, in each case that are included in, or related to, the Intellectual
Property.
(ii) Except as set forth on Schedule 4.22,
the Companies are the sole and exclusive owners of all right, title and
interest in and to the Intellectual Property, and the Intellectual Property (a)
is not subject to any Liens; (b) is adequate and sufficient to permit the
Companies to conduct their business as it is presently conducted and proposed
to be conducted; (c) is valid and subsisting; and (d) will not be rendered
invalid or affected in any way by virtue of the execution, delivery and
performance of this Agreement. Except as set forth on Schedule 4.22, the
Companies hold all required licenses to use the hardware and software used in
connection with their business and neither the business of the Companies nor
the Intellectual Property infringes on, conflicts with, violates or
misappropriates any Canadian, United States, or any other foreign patent,
copyright, tradename, service ▇▇▇▇, mask work, trade secret or other
intellectual property right of any Person. To the best knowledge of the
Sellers and the Companies, there is no actual or alleged conflict or claim
against the Sellers or the Companies with respect to any intellectual property
right of any Person, or relating to any of the Intellectual Property or the
business of the Companies, or asserting any Lien against any of the
Intellectual Property; and, to the best knowledge of the Sellers and the
Companies, there is no reasonable basis for any such claim.
4.23 BROKERS AND FINDERS. Neither the Sellers nor the
Companies nor any of their Affiliates have engaged, consented to or authorized
any broker, investment banker or other third party to act on their behalf,
directly or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement, and no brokerage or finder's fee
with respect to this Agreement and the transactions contemplated hereby will be
payable by any Person by virtue of the actions of the Sellers or the Companies,
or any of their Affiliates.
4.24 ENVIRONMENTAL LAWS. Except as set forth on
Schedule 4.24 annexed hereto, the Companies are in substantial compliance with
all Canadian, federal, provincial, local, and foreign laws, codes, ordinances,
rules and regulations pertaining to air and water quality, hazardous materials,
waste disposal, air emissions, water discharges, and other environmental and
health and safety matters, with respect to their business or the use or
occupation of their properties (the "Hazardous Materials Laws"). The Companies
have not received notice of, and the Sellers and the Companies do not know or
have any reason to know of, any facts or circumstances which might give rise to
or constitute violations of any Hazardous Materials Laws
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pertaining to the properties or business of the Companies. The Sellers and the
Companies do not know and have no reason to know of any facts or circumstances
which might give rise to liability on the part of the Companies for exposure to
hazardous materials. There has been no emission, spill, release or discharge,
whether on, under or about the properties of the Companies, adjacent sites or
at any other location or disposal site, into or upon (i) the air, (ii) soils or
improvements, (iii) surface water or groundwater, or (iv) the sewer, septic
system or waste treatment, storage or disposal system servicing such
properties, of any hazardous materials used, stored, generated, treated or
disposed of at or from such properties.
4.25 INSURANCE. The Companies have in full force and
effect the policies of fire, liability, and other forms of insurance listed on
Schedule 4.25 annexed hereto. Furthermore, (i) the Companies are not in
default in any material respect under any such policies and there is no
inaccuracy in any application for such policies, (ii) the Companies' activities
and operations have been conducted in a manner so as to conform in all material
respects to the applicable provisions of such policies, (iii) the Companies
have not received a notice of cancellation or non-renewal with respect to any
such policy, (iv) all premiums under such policies have been paid on a timely
basis through the date set forth on Schedule 4.25, (v) timely notice has been
given by the Companies of any and all claims under all such policies, and (vi)
there are no outstanding or disputed claims under any such policies. Such
policies provide coverage consistent in all material respects with coverage
customarily maintained by Persons engaged in businesses substantially similar
to that of the Companies.
4.26 CLIENT FUNDS. All of the funds owed by the
Companies to third parties with respect to tickets or other merchandise sold on
behalf of such Persons (the "Client Funds") are maintained in accounts of the
Companies and the Companies have not received notice of any claims of offset,
Liens or similar rights against such accounts or the funds held in such
accounts. The Balance Sheet accurately reflects the amount of Client Funds
held by the Companies on behalf of such Persons as of the date thereof. All
Client Funds are and have been held in full compliance with third party
agreements in trust and/or in segregated accounts, and the cash evidenced in
the working capital calculation set forth in Schedule 9.11 annexed hereto
includes funds sufficient to fully pay all Client Funds to third parties, and
provides for the full payment of all Client Funds to third parties.
4.27 RELATED PARTY TRANSACTIONS. Except as set forth
on Schedule 4.27 annexed hereto, no Related Party is directly or indirectly a
party to any contract or other arrangement (whether written or oral) with the
Companies providing for services (other than as an employee of the Companies),
products, goods or supplies, rental of real or personal property, or otherwise
requiring payments from or to the same.
4.28 INVESTMENT INTENT. In order to induce the Buyer
to issue the Ticketmaster Shares to the Sellers, and upon reliance thereof,
each of the Sellers hereby represents and warrants in respect of itself only to
the Buyer that:
(i) the Ticketmaster Shares are being
acquired solely for his own account, for investment purposes
only and not with a view towards the distribution or resale,
directly or indirectly, to others and he has no present
commitment or arrangement providing for the distribution
thereof;
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(ii) he is not a "United States Person" as
defined in Regulation S of the Securities Act, and his
decision to receive the Ticketmaster Shares as partial
consideration hereunder is not based on any promotional,
marketing or sales materials, and he and his representatives
have been afforded, prior to the entering into of this
Agreement and the receipt of the Ticketmaster Shares, the
opportunity to ask questions of, and to receive answers
from, the Buyer and its management, and has had access to
all documents and information which he deems material to a
decision to receive the Ticketmaster Shares hereunder. Each
of the Sellers acknowledges and understands that the Buyer
is a public reporting company, that annual, quarterly and
other reports are, from time to time, filed by the Buyer
with the SEC under the Exchange Act and that he can obtain a
copy of any such report from the SEC, either electronically
or from certain public information offices maintained by the
SEC, or from the Buyer;
(iii) he has such knowledge and experience in
financial and business matters that he is capable of
evaluating the merits and risks of this investment, and he
understands that an investment in the Ticketmaster Shares is
speculative and involves a high degree of risk, and he is
able to bear the economic risk of his investment for an
indefinite period of time;
(iv) he will not transfer any Ticketmaster
Shares unless such Shares are registered under the
Securities Act, under any applicable Canadian and provincial
securities laws, and under any applicable state securities
or "blue sky" laws (collectively, the "Securities Laws"), or
unless an exemption is available under such Securities Laws,
and that the Buyer may, if it chooses, where an exemption
from registration is claimed by a Seller, condition any
transfer of Ticketmaster Shares out of such Seller's name on
an opinion of Buyer's counsel to the effect that the
proposed transfer is being effected in accordance with, and
does not violate, an applicable exemption from registration
under the Securities Laws;
(v) he acknowledges, understands and
appreciates that the Ticketmaster Shares have not been
registered under Section 5 of the Securities Act, by reason
of a claimed exemption under the provisions of such Act and
a similar exemption to the registration provisions of all
other Securities Laws, all of which depends, in large part,
upon the representations as to each of the Sellers' intent
relative to the acquisition of the Ticketmaster Shares and
other related matters set forth herein;
(vi) he understands it is the view of the SEC
that, among other things, an acquisition with a present
intent to distribute or resell would represent an
acquisition with an intent inconsistent with the
representations herein made by Sellers, and consequently,
the SEC might regard such a transfer as a deferred sale for
which the exemption from registration is not available;
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(vii) he understands, acknowledges, and
appreciates that the Buyer is relying upon, and it is
entitled to rely upon, all of the representations and
warranties contained in this Section 4.28;
(viii) he agrees and consents to the placement
of a legend on the certificate(s) representing the
Ticketmaster Shares substantially in the form set forth on
Schedule 3.3(ii) annexed hereto which shall state that the
Shares have not been registered under the Act or any other
Securities Laws, and to the placement of stop transfer
instructions on the stock transfer records of the issuer of
the Ticketmaster Shares; and
(ix) he understands, acknowledges, and agrees
that no return on investment, whether through distributions,
appreciation, transferability or otherwise, and no
performance by, through or of the Buyer, has been promised,
assured, represented or warranted with respect to the
Ticketmaster Shares by the Buyer, or by any director,
officer, employee, Affiliate, agent or representative of the
Buyer, and while the common stock of the Buyer is presently
listed and traded on the NASDAQ National Market, the Shares
to be received under this Agreement are not registered under
the Securities Laws, and thus may not be sold, conveyed,
assigned or transferred unless registered under such laws or
unless an exemption from registration is available under
such laws, and therefore, there is no present public or
other market for the Ticketmaster Shares, nor can there be
any assurance that the common stock of Buyer will continue
to be listed and traded on the NASDAQ National Market or on
any other organized market or quotation system, and the
Sellers may not be able to liquidate their investment in the
event of an emergency or otherwise. The transferability of
Ticketmaster Shares is severely limited, and, as such, each
of the Sellers could sustain a complete loss with respect to
his Ticketmaster Shares.
Upon the exchange of the Ticketmaster Shares for shares of common stock of the
Buyer pursuant to Section 3.3, the representations and warranties of this
Section 4.28 shall be deemed remade by the Sellers in their entirety as of the
date of such exchange, with, for purposes of such remaking, the term
"Ticketmaster Shares" being deemed to refer to the shares of common stock of
the Buyer issued in connection with such exchange.
4.29 MINUTE BOOKS. Since the incorporation of the
Companies, the minute books of the Companies have been properly kept and
maintained in good order, and have been updated on a periodic basis. The
minute books of the Companies contain complete and accurate records of all
meetings held of, and corporate action taken by, the stockholders, Board of
Directors and committees of the Boards of Directors of the Companies. True and
correct copies of the minute books and other statutory books of the Companies
have been previously made available to the Buyer. Schedule 4.29 annexed hereto
contains a complete and accurate list of the names of each of the Companies'
directors and officers, the name of each bank, broker or similar institution in
which the Companies have an account or safe deposit box and the names of all
persons authorized to draw thereon or have access thereto.
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4.30 THE SELLERS. Each of the Sellers is a resident of
Canada for all purposes of the Income Tax Act of Canada. None of the Sellers
is or has been married or, if any Seller is or has been married, none of the
events described in Section 56(1) of the Family Relations Act (British
Columbia, RSBC 1996) has occurred in respect of such marriage.
4.31 DISCLOSURE. No representation or warranty by the
Companies or the Sellers contained in this Agreement or in any other document
furnished or to be furnished by the Companies or the Sellers in connection
herewith or pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to
make the statements herein or therein contained not misleading. The Companies
and the Sellers have disclosed to the Buyer in writing all adverse facts known
to them related to the financial condition, assets, liabilities, business, or
prospects of the Companies. The representations and warranties contained in
this Section 4 shall not be affected or deemed waived by reason of the fact
that the Buyer and/or its representatives knew or should have known that any
such representation or warranty is or might be inaccurate in any respect, or by
reason of the Buyer's due diligence review.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers as follows:
5.1 ORGANIZATION, GOOD STANDING, QUALIFICATION AND
POWER OF BUYER. The Buyer is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Illinois, and has all
requisite corporate power and authority to enter into this Agreement and the
Buyer's Related Agreements and to carry out the transactions contemplated by
this Agreement. The Buyer has delivered to the Sellers copies of the Buyer's
certificate of incorporation, and all amendments thereto, certified as true and
correct by the Illinois Secretary of State and the by-laws of the Buyer as
presently in effect certified as true and correct by the Buyer's secretary or
assistant secretary.
5.2 ORGANIZATION, GOOD STANDING, QUALIFICATION AND
POWER OF BUYER'S AFFILIATES. The Affiliate of the Buyer referenced in Sections
2.3 and 3.2 hereof is a corporation duly incorporated, validly existing and in
good standing under the laws of Canada. The Buyer has delivered to the Sellers
copies of such Affiliate's certificate of incorporation, and all amendments
thereto, certified as true and correct by the Director, Canada Business
Corporations Act and the by-laws of such Affiliate as presently in effect,
certified as true and correct by an authorized representative of the Buyer.
5.3 EXECUTION, DELIVERY, AND PERFORMANCE OF AGREEMENT;
AUTHORITY. Except as set forth on Schedule 5.3 annexed hereto, neither the
execution, delivery nor performance of this Agreement or the Buyer's Related
Agreements will, with or without the giving of notice or the passage of time,
or both, conflict with, result in a default, right to accelerate or loss of
rights under, or result in the creation of any Lien pursuant to any provision
of the Buyer's articles of incorporation or by-laws, each as amended, or any
franchise,
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mortgage, deed of trust, lease, license, agreement, Applicable Law, rule or
regulation or any order, judgment or decree to which the Buyer is a party or
by which it may be bound or materially or adversely affected or require any
consent, authorization, approval or any other action by, or any notice to, or
filing or registration with, any governmental authority or other third party.
Except as set forth on Schedule 5.3 annexed hereto, no consent is required to
be obtained or made by the Buyer in connection with the execution and delivery
of this Agreement or the Buyer's Related Agreements or to consummate the
transactions contemplated hereby and thereby. The Buyer has the full power and
authority to enter into this Agreement and, as applicable, the Buyer's Related
Agreements, and to carry out the transactions contemplated hereby and thereby.
All proceedings required to be taken by it to authorize and approve the
execution, delivery and performance of this Agreement and the Buyer's Related
Agreements have been properly taken, and this Agreement and the Buyer's Related
Agreements constitute valid and binding obligations of the Buyer, enforceable
in accordance with their terms, except that such enforcement may be subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
and similar law affecting creditors' rights generally. The execution, delivery
and performance of this Agreement and the Buyer's Related Agreements have been
duly authorized, to the extent required by Applicable Law and by all requisite
corporate and stockholder action of the Buyer, if necessary.
5.4 LITIGATION. There is no suit, claim,
investigation, action or proceeding now pending or, to the best knowledge of
the Buyer, threatened before any court, arbitration panel, administrative or
regulatory body or governmental agency against the Buyer or any Affiliate of
the Buyer referenced in Sections 2.3 and 3.2 hereof, nor is there any
reasonable basis for any such suit, claim, investigation, action or proceeding,
the adverse determination of which could prevent or interfere with the
consummation of any of the transactions contemplated hereby.
5.5 BROKERS AND FINDERS. Neither the Buyer nor any of
its Affiliates has engaged, consented to or authorized any broker, investment
banker or other third party to act on its behalf, directly or indirectly, as a
broker or finder in connection with the transactions contemplated by this
Agreement, and no brokerage or finder's fee with respect to this Agreement and
the transactions contemplated hereby will be payable by any Person by virtue of
the actions of the Buyer or any of its Affiliates.
5.6 COMPLIANCE WITH LAW. Neither the Buyer nor any
Affiliates of the Buyer referenced in Sections 2.3 and 3.2 hereof is in default
under, or in violation of, any applicable foreign or domestic law, statute,
rule or regulation or order, writ, judgment, injunction or decree applicable to
it which default or violation could materially and adversely affect its ability
to consummate the transactions contemplated hereby or by the Buyer's Related
Agreements.
5.7 BUYER'S ANNUAL REPORT. The Buyer has delivered to
the Sellers its Annual Report on Form 10-K for its fiscal year ended January
31, 1997. As of its filing date, such report did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
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5.8 SHARES OUTSTANDING. There are currently
24,739,715 shares of common stock of the Buyer issued and outstanding.
ARTICLE VI.
COVENANTS OF THE SELLERS AND THE COMPANIES
The Sellers and the Companies jointly and severally hereby
covenant and agree with the Buyer as follows:
6.1 CONDUCT OF THE SELLERS AND THE COMPANIES PENDING CLOSING.
(a) Prior to the Closing, the Companies
shall conduct their business and affairs only in the ordinary course and
consistent with their prior practice and shall maintain, keep and preserve
their business and properties in good condition and repair and maintain
insurance thereon in accordance with present practice, and the Sellers and the
Companies will use their best efforts to preserve the business of the
Companies, to keep available to the Buyer the services of the Companies'
present officers and employees, and to preserve for the benefit of the Buyer
the goodwill of the Companies' clients and customers and others having business
relations with it, including, without limitation, the following:
(i) Liabilities. Consistent with past
practice, the Companies shall pay or discharge their current
liabilities when the same become due and payable, except for
such liabilities as may be subject to a good faith dispute
or counterclaim.
(ii) Litigation. The Sellers and the
Companies shall promptly notify the Buyer of any lawsuits,
claims, proceedings or governmental investigations which
after the date hereof are commenced or, to the best
knowledge of the Sellers or the Companies, threatened
against the Companies or against any stockholder, officer,
employee, consultant or agent with respect to the Companies
or the transactions contemplated by this Agreement.
(iii) Compliance with Laws. The Sellers and
the Companies will take such action as may be necessary to
duly comply with all laws, statutes, rules and regulations
applicable to them as they relate to the conduct of the
Companies' business, and/or the transactions contemplated by
this Agreement.
(iv) Continued Effectiveness of
Representations and Warranties. Each of the Sellers and
each of the Companies shall use his or their best efforts to
conduct the business of the Companies in such a manner so
that the representations and warranties contained in Section
4 hereof shall continue to be true and correct on and as of
the Closing Date as if made on and as of the Closing Date.
The Sellers and the Companies shall promptly give to the
Buyer
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notice of any event, condition or circumstance occurring
from the date hereof through the Closing Date which would
constitute a violation or breach of their representations,
warranties, covenants or agreements contained in this
Agreement.
(b) Without limiting the generality of
Section 6.1(a), prior to the Closing, the Sellers or the Companies will not
without the Buyer's prior written approval:
(i) change the Companies' articles of
incorporation or by-laws or merge or consolidate or obligate
the Companies to do so with or into any other entity;
(ii) enter into any contract, agreement,
commitment or other understanding or arrangement which is
not in the ordinary course of the business consistent with
its prior practice; or
(iii) perform, take any action or incur or
permit to exist any of the acts, transactions, events or
occurrences of the type described in subparagraphs (i),
(ii), (iii), (iv), (v), (viii), (ix), (x), (xi), (xii),
(xiii), (xiv), (xv) (xvi) and (xvii) of Section 4.8 hereof
(except as set forth in Schedule 4.8) which would have been
inconsistent with or resulted in a breach of the
representations and warranties set forth therein had the
same occurred after the Balance Sheet Date and prior to the
date hereof.
(c) The Sellers and the Companies shall give
the Buyer prompt written notice of any change in any of the information
contained in the representations and warranties made in Section 4 hereof or the
Schedules referred to therein which occurs prior to the Closing.
6.2 ACCESS. From the date hereof, until the earlier
of the Closing and the termination of this Agreement in accordance with its
terms, Buyer and its attorneys, accountants and other authorized
representatives shall have the right of full and complete access to the
properties, offices and other facilities of the Companies, and to the books,
records, financial and operating data and contracts and other documents of the
Companies, for the purpose of making such investigation of the assets,
liabilities, business and operations of the Companies as the Buyer and its
attorneys, accountants and other representatives may deem reasonably necessary.
Such access shall be at reasonable times during normal business hours and after
reasonable notice. The fact that the Buyer is a licensor to the Companies
shall not affect Buyer's right to rely on any representations or warranties
made in this Agreement or in any other certificate or instrument delivered
pursuant hereto, including, without limitation, the Related Agreements. In
addition, the Sellers and the Companies will permit the Buyer and its
attorneys, accountants, consultants, employees, agents and other
representatives reasonable access to such personnel of the Companies during
normal business hours as may be necessary or useful to the Buyer in its review
of the properties, assets, liabilities, business affairs, and operations of the
Companies and
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the above-mentioned documents, records, and information on any owned or leased
real property for purposes of performing environmental assessments, and will
provide the Buyer with copies of all new agreements, renewals, extensions or
modifications of any client or customer agreement executed from March 1, 1997
through the Closing Date.
6.3 CONSENT. The Sellers and the Companies shall use
their best efforts to obtain the consent and approval of each governmental
authority whose consent or approval is required or deemed necessary by the
Buyer in order to permit or facilitate the consummation of the transactions
contemplated hereby. Without limiting the foregoing, the Sellers and the
Companies shall use their best efforts to obtain all consents and approvals
required by (i) the articles of incorporation and the by-laws, each as amended,
of the Sellers and/or the Companies, (ii) Canadian foreign investments laws and
regulations, (iii) Canadian securities laws, and (iv) any other applicable law,
and shall provide the Buyer with copies of all proposed filings with
governmental authorities prior to their submission. The costs and fees
associated with obtaining such consents and approvals shall be the
responsibility of the Sellers.
6.4 NO SOLICITATION. The Sellers and the Companies
agree that none of the Sellers, the Companies, or any director, officer,
employee, agent or representative of the Sellers or the Companies will,
directly or indirectly, from the date hereof until the earlier of the Closing
and the termination of this Agreement in accordance with its terms, initiate
contact with, solicit or encourage any inquiries or proposals by or participate
in any discussions or negotiations with, or disclose any information concerning
the Companies or afford any access to the properties, books and records of the
Companies to, any Person regarding the sale or transfer of any equity of the
Companies, any merger, consolidation or other business combination involving
the Companies or a sale of all or a substantial portion of the Companies'
assets.
6.5 PAYMENT OF TAXES. The Sellers and the Companies
agree that the Sellers shall pay any and all sales, gains, transfer,
documentary, or other Taxes due and payable in connection with the sale of the
Shares to the Buyer in accordance with the terms and conditions of this
Agreement. The Sellers shall prepare and file and the Buyer shall cooperate in
the filing of all returns relating to any Tax described in this Section 6.5.
6.6 TRANSFER OF THE PENSION PLAN. Prior to the
Closing Date, the Sellers and the Companies shall transfer the Pension Plan
identified on Schedule 4.19 to a company which is affiliated with the
participants under such Pension Plan in compliance with the Income Tax Act, and
the Companies shall not have any liabilities or obligations of any kind
whatsoever in connection with such Pension Plan or such transfer, all such
liability, if any, being the responsibility and obligation of the Sellers.
6.7 CASH FLOW FROM OPERATIONS. All cash flows of the
Companies derived from operations during the period from March 1, 1997 to the
Closing Date shall remain in the Companies, in addition to, and not duplicative
of, the working capital to remain in the Companies as of the Closing Date
pursuant to Section 9.11.
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ARTICLE VII.
MUTUAL COVENANTS AND UNDERTAKINGS
The Sellers, the Companies, and the Buyer hereby covenant
and agree with each other as follows:
7.1 EFFORTS TO CONSUMMATE. Subject to the terms and
conditions herein provided and except as otherwise specified herein, each of
the parties hereto shall use its reasonable best efforts to take or cause to be
taken all actions and to do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations or otherwise to consummate and
make effective, as soon as reasonably practical, the transactions contemplated
hereby, and each of the parties hereto shall cooperate with the others in all
of the foregoing.
7.2 CONSENTS. The Sellers and the Companies, as
promptly as practicable, will use all reasonable efforts to obtain, or cause to
be obtained, all consents of any third party, as well as the consent of various
clients and customers to the deemed "assignment" of existing contracts,
agreements, and leases by the Companies to the Buyer or the change in control
of the Companies, including, but not limited to those Consents set forth on
Schedule 7.2 annexed hereto (collectively, the "Consents") necessary to be
obtained in order to consummate the sale and transfer of the Shares pursuant to
this Agreement and the consummation of the other transactions contemplated
hereby.
7.3 COOPERATION. The Sellers, the Companies, and the
Buyer will coordinate and cooperate with each other in exchanging such
information and supplying such assistance as may be reasonably required by the
Buyer, the Sellers, and the Companies pursuant to Applicable Laws in connection
with this Agreement, the Related Agreements and the consummation of the other
transactions contemplated hereby, including, but not limited to, all filings
necessary pursuant to any Applicable Laws.
7.4 NOTICE OF FAILURE TO SATISFY CONDITIONS. At all
times prior to the Closing, the Sellers, the Companies, and the Buyer shall
promptly notify the other parties to this Agreement in writing upon becoming
aware of any fact, condition, event or occurrence that will or may result in
the failure to satisfy any of the conditions precedent to the transactions
contemplated by this Agreement as set forth in Sections 8, 9 and 10 hereof.
ARTICLE VIII.
MUTUAL CONDITIONS PRECEDENT
8.1 NO RESTRAINT. The obligations of the parties to
consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by the Buyer or the Sellers, as the case may be) on or
prior to the Closing Date of the condition that: the transactions contemplated
hereby shall not have been restrained, enjoined or otherwise prohibited by any
Applicable Law, or any order, injunction, decree or judgment of any court or
other governmental authority; no court or other governmental authority shall
have determined any
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Applicable Law to make illegal the consummation of the transactions
contemplated by the Agreement, or the Related Agreements; and no proceeding
with respect to the application of any such Applicable Law to such effect shall
be pending.
ARTICLE IX.
CONDITIONS TO OBLIGATION OF THE BUYER TO CLOSE
The obligations of the Buyer hereunder to consummate the
transactions contemplated hereby are subject to the satisfaction or, in its
sole and absolute discretion, waiver on or before the Closing Date of each of
the following conditions:
9.1 PERFORMANCE. The Sellers and the Companies shall
have performed and complied in all material respects with all agreements,
obligations and conditions required by this Agreement or the Sellers' Related
Agreements to be performed or complied with by then on or prior to the Closing
and the Buyer shall have received a certificate dated the Closing Date signed
by each of the Sellers and the president of each of the Companies to that
effect.
9.2 REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made by the Sellers and the Companies herein
shall be true and correct as of the date of this Agreement and as of the
Closing Date with the same effect as if such representations and warranties had
been made on and as of the Closing Date (except to the extent that such
representations and warranties relate to an earlier date) and the Buyer shall
have received a certificate dated the Closing Date signed by each of the
Sellers and the president of each of the Companies to that effect.
9.3 AUTHORIZATION OF AGREEMENT.
(i) All action necessary to authorize the
execution, delivery and performance of this Agreement and
the Sellers' Related Agreements by the Sellers and the
Companies, and consummation by the Sellers and the Companies
of the transactions contemplated hereby and thereby shall
have been duly and validly taken by them, and the Sellers
and the Companies shall have the full power and right to
consummate the transactions contemplated hereby and thereby.
(ii) The Board of Directors of the Buyer
shall have authorized the execution, delivery and
performance by the Buyer of this Agreement and the Buyer's
Related Agreements.
9.4 PROCEEDINGS AND INSTRUMENTS SATISFACTORY;
CONSENTS.
(i) All proceedings, corporate or otherwise,
to be taken by the Sellers and the Companies in connection
with the transactions contemplated by this Agreement and the
Related Agreements, and all documents incident thereto,
shall be reasonably satisfactory in form and substance to
the Buyer.
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(ii) The Sellers and the Companies shall have
furnished the Buyer with copies of resolutions duly adopted
by the Board of Directors of the Sellers (as applicable) and
the Companies authorizing the execution, delivery and
performance of this Agreement and the Seller's Related
Agreements by the Sellers and the Companies, and a
certificate of each of the Sellers and the Companies of a
duly authorized representative of the Sellers and the
Companies, dated the Closing Date, certifying that (i) such
resolutions were duly adopted and are in full force and
effect, (ii) all required approvals and consents from the
Sellers' and the Companies' stockholders, creditors and
third parties in connection with the transactions
contemplated by this Agreement and the Related Agreements
have been obtained, including, but not limited to, approving
the transfer of the Shares from the Sellers to the Buyer (or
its designee), (iii) all rights of first refusal and
preemptive rights or privileges of stockholders or creditors
of the Sellers and the Companies relating to such
transactions have been waived or lapsed, including, but not
limited to, any rights of first refusal, if any, held by
Orca Bay, provided that the Closing Date is on or before May
15, 1997, (iv) all minutes and resolutions regarding such
transactions have been duly recorded in the appropriate
minute books of the Sellers and the Companies; (v) the
transfer of the Shares to the Buyer (or its designee) has
been duly registered in the stockholders' registry book of
TCH; and (vi) all parties or entities that are to be
notified or advised of the transactions contemplated by this
Agreement and the Related Agreements pursuant to the terms
of the Sellers' or the Companies' articles of incorporation
and by-laws (each as in effect on the date hereof and as of
the Closing Date), or any agreement, covenant or undertaking
to which the Sellers or the Companies is a party or by which
it is bound, have been so notified or advised.
(iii) All applications, filings and
registrations required to be made with governmental and/or
regulatory bodies or authorities in order to consummate the
transactions contemplated hereby and by the Related
Agreements or to give effect to this Agreement and the
Related Agreements shall have been made, or required waiting
periods shall have expired, and all approvals and consents
required to be received from such bodies or authorities or
other Persons shall have been received and shall remain in
full force and effect. The filing fee relative to such
governmental filing(s), if any, will be shared equally by
the Seller and the Buyer (other than filings with the SEC,
which shall be paid for by the Buyer.)
(iv) All covenants, agreements and
obligations required by the terms of this Agreement to be
performed by the Sellers or by the Companies at or before
the Closing shall have been duly and properly performed in
all material respects.
(v) All documents required to be delivered
to the Buyer at or prior to the Closing shall have been so
delivered.
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9.5 INSTRUMENTS OF TRANSFER; RELEASES. The Buyer (or
its designee) shall have received duly endorsed stock certificates evidencing
the Shares (and the transfer thereof), which are in form for recordation or
filing, and such other instruments, if any, as are necessary to effect the
transfer, conveyance and assignment to the Buyer (or its designee) of the
Shares in accordance with the terms of this Agreement, and each of the Sellers,
and each beneficiary under any benefit and/or pension plan, shall have
delivered releases of any and all claims which they have or may have had, known
or unknown, from the beginning of the world through the Closing Date, against
the Companies through the Closing Date.
9.6 POWERS OF ATTORNEY. The Companies shall provide
evidence that it has revoked all existing powers of attorney, if any, and shall
have authorized the execution of new powers of attorney which have been
approved by the Buyer.
9.7 NO ADVERSE CHANGE. Except for matters expressly
contemplated or permitted by this Agreement, there shall have been no material
adverse change since March 1, 1997 in the business, assets, liabilities,
financial condition or prospects of the Companies.
9.8 NO LITIGATION. On the Closing Date, there shall
not be any action, claim, arbitration, litigation, order of any court or any
governmental investigation or inquiry pending or threatened, challenging or
seeking to make illegal or to restrain or prohibit any of the transactions
contemplated by this Agreement or the Related Agreements, or seeking to obtain
material damages from the Buyer or any of its Affiliates in connection with any
of the transactions contemplated by this Agreement or the Related Agreements.
9.9 OPINION OF COUNSEL FOR THE SELLERS. The Buyer
shall have received an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation, counsel
for the Sellers and the Companies, dated as of the Closing Date and addressed
to the Buyer, in form and substance substantially as set forth on Exhibit 9.9
annexed hereto.
9.10 DUE DILIGENCE. The Buyer shall have performed and
completed such due diligence investigation of the properties, business,
operations, financial condition, affairs and prospects of the Companies as it
deems appropriate, and shall have reviewed the tax, liquidity, accounting,
securities law, and other considerations regarding the terms and conditions of
the acquisition of the Shares, and shall have been satisfied, in its sole and
absolute discretion, with the results thereof.
9.11 WORKING CAPITAL. As of the Closing Date, the
Companies shall have working capital of no less than Canadian $302,246, which
amount was calculated in the manner set forth in Schedule 9.11 annexed hereto.
9.12 AMENDMENT TO CLIENT AGREEMENTS. As of the
Closing Date, the terms of the client agreements identified on Schedule 9.12
annexed hereto shall have been executed, amended, modified and/or extended in
the manner required by the Buyer as set forth on Schedule 9.12. and the
existing unexecuted client agreements and leases identified on Schedule 9.12
shall have been executed and delivered by all of the parties thereto.
9.13 EMPLOYMENT AGREEMENTS. The employment agreements
referenced
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in Section 10.7 shall have been executed and delivered to the Companies.
9.14 ESCROW AGREEMENT. The Escrow Agreement shall
have been executed and delivered by the parties thereto.
9.15 ACCOUNTANTS' LETTER. The Buyer shall have
received from KPMG Peat Marwick LLP a letter, in form and substance
satisfactory to the Buyer in its sole and absolute discretion, relative to such
accounting, reporting and tax principles and treatments pertaining to this
Agreement and the Related Agreements, and the transactions contemplated hereby
and thereby, as the Buyer may deem appropriate (the "Accountants' Letter").
ARTICLE X.
CONDITIONS TO OBLIGATION OF THE SELLERS TO CLOSE
The obligations of the Sellers to consummate the
transactions contemplated hereby are subject to the satisfaction or, in their
sole and absolute discretion, waiver on or before the Closing Date of each of
the following conditions:
10.1 PERFORMANCE. The Buyer shall have performed and
complied in all respects with all agreements, obligations and conditions
required by this Agreement or the Buyer's Related Agreements to be performed or
complied with by it on or prior to the Closing and the Sellers shall have
received a certificate dated the Closing Date signed by a duly authorized
representative of the Buyer to that effect.
10.2 REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made by the Buyer herein shall be true and
correct as of the date of this Agreement and as of the Closing Date with the
same effect as if such representations and warranties had been made on and as
of the Closing Date (except to the extent that such representations and
warranties relate to an earlier date) and the Sellers shall have received a
certificate dated the Closing Date signed by a duly authorized representative
of the Buyer to that effect.
10.3 AUTHORIZATION OF AGREEMENT. All action necessary
to authorize the execution, delivery and performance of this Agreement and the
Buyer's Related Agreements to which it is a party by the Buyer and the
consummation by the Buyer of the transactions contemplated hereby and thereby
shall have been duly and validity taken by it, and the Buyer shall have the
full power and right to consummate the transactions contemplated hereby and
thereby.
10.4 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All
proceedings, corporate or otherwise, to be taken by Buyer in connection with
the transactions contemplated by this Agreement and the Related Agreements, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to the Sellers, and the Buyer shall have furnished the Sellers with
copies of resolutions duly adopted by the Board of Directors of the Buyer
authorizing the execution, delivery and performance of this Agreement and the
Buyer's Related Agreements, and a certificate of a duly authorized
representative of the Buyer, dated the Closing Date,
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certifying that such resolutions were duly adopted and are in full force and
effect.
10.5 NO LITIGATION. On the Closing Date, there shall
not be any action, claim, arbitration, litigation, order of any court or any
governmental investigation or inquiry pending or threatened, challenging or
seeking to make illegal or to restrain or prohibit any of the transactions
contemplated by this Agreement or the Related Agreements, or seeking to obtain
material damages from the Sellers, the Companies, or any of their Affiliates in
connection with any of the transactions contemplated by this Agreement or the
Related Agreements.
10.6 PURCHASE PRICE. The Buyer shall have delivered
the Purchase Price in accordance with Article III.
10.7 EMPLOYMENT AGREEMENTS. The Companies shall have
entered into Employment Agreements with ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇▇ effective as of the
Closing Date, in substantially the forms attached hereto as Exhibits 10.7.
10.8 OPINION OF COUNSEL FOR THE BUYER. The Sellers
shall have received an opinion of ▇▇▇▇, Gerber & ▇▇▇▇▇▇▇▇▇, counsel to the
Buyer, dated as of the Closing Date and addressed to the Sellers, in form and
substance substantially as set forth on Exhibit 10.8.
10.9 DUE DILIGENCE. The Sellers shall have performed
and completed such due diligence investigation of the Buyer regarding the terms
and conditions of the transaction set forth in this Agreement and shall have
reviewed the tax, liquidity, accounting securities law, and other
considerations regarding the acquisition of the Ticketmaster Shares, and shall
have been satisfied, in their sole and absolute discretion, with the results
thereof.
10.10 ESCROW AGREEMENT. The Escrow Agreement shall have
been executed and delivered by the parties thereto.
ARTICLE XI.
TERMINATION
11.1 TERMINATION BY THE BUYER OR THE SELLERS. This
Agreement may be terminated:
(i) By the mutual consent of the Sellers
and the Buyer at any time;
(ii) By either the Sellers or the Buyer upon
written notice to the other party if the Closing has not
occurred on or before May 15, 1997.
11.2 TERMINATION BY THE BUYER. This Agreement may be
terminated by the Buyer by written notice to the Companies if (i) the
representations and warranties of any of the Companies or the Sellers shall not
have been true and correct in all respects as of the date when made or (ii) if
any of the conditions precedent set forth herein shall not have been satisfied,
or
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if it becomes apparent that any of such conditions will not be satisfied by
5:00 p.m. E.T. on May 15, 1997, unless such failure shall be due to the failure
of Buyer to perform or comply with any of the covenants, agreements or
conditions hereof to be performed or complied with by it prior to the Closing.
11.3 TERMINATION BY THE SELLERS. This Agreement may be
terminated by the Sellers by written notice to the Buyer if (i) the
representations and warranties of the Buyer shall not have been true and
correct in all respects as of the date when made or (ii) if any of the
conditions precedent set forth herein shall not have been satisfied, or if it
becomes apparent that any of such conditions will not be satisfied by 5:00 p.m.
E.T. on May 15, 1997, unless such failure shall be due to the failure of the
Sellers or the Companies to perform or comply with any of the covenants,
agreements or conditions hereof to be performed or complied with by the Sellers
or the Companies prior to the Closing.
11.4 EFFECT OF TERMINATION. Upon any such
termination, this Agreement shall be void and neither party hereto, nor any of
their respective directors, officers, stockholders, employees or Affiliates,
shall have any continuing obligations or liabilities to the other pursuant to
this Agreement except to the extent that such termination is the result of a
material breach by either party or its Affiliates and except that Articles XII
and XIII shall survive such termination.
ARTICLE XII.
INDEMNIFICATION AND SURVIVAL
12.1 INDEMNIFICATION OF THE BUYER. The Sellers hereby
agree to indemnify, defend and hold the Buyer harmless from, against and in
respect of (and shall, subject to the other provisions of this Agreement, on
demand reimburse the Buyer for):
(i) any and all loss, liability or damage
suffered or incurred by any of the Companies or the Buyer by
reason of any untrue representation, breach of warranty or
nonfulfillment or nonperformance of any covenant by the
Sellers or the Companies contained herein or in any
certificate, document or instrument delivered by the Sellers
or the Companies to Buyer hereunder;
(ii) any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
including, without limitation, reasonable legal fees and
expenses, incident to (i) above or incurred in investigating
or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity; and
(iii) any and all Taxes (without benefit of
the Indemnification Basket) imposed on or incurred by the
Companies (or any other entity which, on or before the
Closing Date, is or was an Affiliate thereof), including
reasonable legal fees and expenses incurred by the Buyer or
the Companies with respect to any audit or any issues
related thereto, for any taxable year or taxable
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period ending on or prior to the Closing Date; including,
without limitation, any and all Taxes arising out of the
consummation of the transactions contemplated hereby.
12.2 INDEMNIFICATION OF THE SELLERS. The Buyer agrees
to indemnify, defend and hold the Sellers harmless from, against and in respect
of (and shall, subject to the other provisions of this Agreement, on demand
reimburse them for):
(i) any and all loss, liability or damage
suffered or incurred by the Sellers by reason of or
resulting from any untrue representation, breach of warranty
or non-fulfillment or nonperformance of any covenant or
agreement by the Buyer contained herein or in any
certificate, document or instrument delivered by the Buyer
to the Sellers hereunder; and
(ii) any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
including, without limitation, reasonable legal fees and
expenses, incident to (i) above incurred in investigating or
attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
12.3 LIMITATIONS ON INDEMNIFICATION.
(i) The Sellers, on the one hand, and the
Buyer, on the other hand, shall not be required to indemnify
the other under this Article XII or be liable under this
Article XII unless and until the aggregate amounts for which
indemnity would otherwise be due thereunder exceeds
cumulatively with all other claims (and excluding any
qualification regarding materiality or threshold amounts)
$100,000 (the "Indemnification Basket"), in which case the
Sellers, on the one hand, or the Buyer, on the other hand,
shall, as the case may be, be responsible for all such
indemnifiable amounts in excess of the Indemnification
Basket due pursuant to this Article XII. Notwithstanding
the foregoing, the Indemnification Basket shall not apply to
a breach of a representation, warranty or covenant contained
in Sections 4.5, 4.12, 4.19, 4.20, 4.23, 4.24, 4.26, 4.28
and 4.30 and, in such event, the party with the
indemnification obligation thereunder shall indemnify the
other party therefor from the first dollar.
(ii) Any indemnifiable liability or
reimbursement under this Article XII shall be limited to the
amount of actual damages (of any nature) subject to
indemnification actually sustained by a party hereto, net of
any applicable insurance payments actually received, other
reimbursement or tax benefit actually realized by such
party.
(iii) If a claim by a third party is made
against a party hereto (an "Indemnified Party"), and if an
Indemnified Party intends to seek indemnity with respect
thereto under this Article XII, then the Indemnified Party
shall promptly notify the party (or, if applicable, the
Sellers' agent pursuant to Section 13.14 hereof) required to
indemnify the Indemnified Party pursuant to
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this Article XII (an "Indemnifying Party") of such claim
(the "Indemnity Notice"); provided, however, that failure by
an Indemnified Party to notify an Indemnifying Party of such
claim shall not affect the Indemnified Party's right to seek
indemnification so long as the Indemnifying Party is not
materially prejudiced by such failure to have been notified
of such claim in which event the amount of indemnity shall
only be reduced by the amount of damages directly caused
solely by such failure. The Indemnifying Party shall have
ten (10) Business Days after receipt of the Indemnity Notice
to undertake, conduct and control, at its own expense,
through counsel of its own choosing, but reasonably
acceptable to the Indemnified Party, the settlement or
defense thereof, and the Indemnified Party shall cooperate
with it in connection therewith; provided, however, that
with respect to settlements entered into by the Indemnifying
Party (which settlements may be for cash only and may not
include any amendments to contract or other equitable relief
without the written consent of all parties), the
Indemnifying Party shall obtain the unqualified release of
the claiming party in favor of the Indemnified Party. If
the Indemnifying Party undertakes, conducts and controls the
settlement or defense of such claim, the Indemnifying Party
shall permit the Indemnified Party to participate in such
settlement or defense through counsel chosen by the
Indemnified Party, provided that the fees and expenses of
such counsel shall be paid by the Indemnified Party, and
provided further, however, that in connection with any claim
referenced in Section 12.1 (iii) hereunder, the fees of the
Indemnified Party shall be paid by the Indemnifying Party
and the Sellers may settle any or all such disputes, accept
any determination as final, pay any claim for Taxes or take
such other action to contest or concede any claimed Taxes
only with the consent of the Buyer, which consent shall not
be unreasonably withheld. With respect to indemnification
provided for hereunder, the Indemnified Party shall not pay
or settle any such claim so long as the Indemnifying Party
is reasonably contesting any such claim in good faith.
Notwithstanding the immediately preceding sentence, the
Indemnified Party shall have the right to pay or settle any
such claims, provided that in such event it shall waive any
right to indemnity therefor by the Indemnifying Party. In
the event of any claim made hereunder, the Sellers shall
have no right or claim of indemnification, contribution or
subrogation from or against the Companies for any such claim
whatsoever.
(iv) Subject to the limitations set forth
herein, if the Indemnifying Party does not notify the
Indemnified Party within ten (10) Business Days after the
receipt of an Indemnity Notice that it elects to undertake
the defense thereof, the Indemnified Party shall have the
right to contest, settle or compromise the claim in the
exercise of its good faith reasonable judgment at the
expense of the Indemnifying Party subject to the other terms
and provisions of this Article XII.
12.4 NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. All statements, representations, warranties and indemnities made
by each of the parties to this Agreement (and in any Schedule or Exhibit
annexed hereto) are and shall be true and correct as of the date hereof and as
of the Closing Date, and each of them shall survive the Closing;
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provided that the representations and warranties shall survive for a period of
two (2) years from the Closing Date, except for the representations and
warranties of the Sellers set forth in Sections 4.1, 4.2, 4.3, 4.5, 4.12, 4.22,
4.28 and 4.30 which shall survive in perpetuity and the representations and
warranties of the Sellers set forth in Sections 4.16, 4.17, 4.18, 4.19, 4.20
and 4.24, which shall survive until the later of five years and 180 days
following the expiration of the applicable statute of limitations.
ARTICLE XIII.
GENERAL PROVISIONS
13.1 EXPENSES. Except as provided in Sections 6.3,
6.5, 9.4(iii) or 13.12, the Sellers shall bear the costs and expenses incurred
by the Sellers and the Companies incident to this Agreement, and the
transactions contemplated hereby, including, without limitation, all fees of
counsel, accountants (including, but not limited to any fees for any audit and
accounting services undertaken and completed in connection with this Agreement
but excluding audit expenses relating to audits historically undertaken by the
Companies which shall be paid by the Companies) and consultants; and the Buyer
shall bear all of its own expenses incident to this Agreement and the
transactions contemplated hereby, including, without limitation, all fees of
counsel, accountants and consultants.
13.2 NOTICES. Except as otherwise provided in Sections
13.10 and 13.11, all notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by overnight courier service, by cable, by confirmed telecopy, by
telegram, by telex or by prepaid registered or certified mail to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 13.2):
(i) if to the Buyer:
Ticketmaster Group, Inc.
c/o Ticketmaster Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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(ii) if to the Sellers or (prior to the Closing) the Companies:
Ticketmaster Canada Holdings Ltd.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation
Box 11161, Royal Centre
▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Law Corporation
Box 11161, Royal Centre
▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
13.3 PUBLIC ANNOUNCEMENTS. Prior to the Closing,
except as required by law, no party to this Agreement shall make, or cause to
be made, any press release or public announcement in respect of this Agreement
or the transactions contemplated hereby or otherwise communicate with any news
media without the prior written consent of the other party, except to the
extent required by applicable law. The parties shall cooperate as to the
timing and contents of any such press release or public announcement. The
parties understand that certain disclosures regarding the proposed transactions
must be made (i) to employees and representatives of the Buyer, the Sellers and
the Companies; and (ii) to governmental authorities and officials and other
Persons whose consent or approval may be required in connection with the
proposed transactions and that such disclosures may be made without any prior
written consent; provided, however, that such disclosures are made with the
understanding that no such Persons shall divulge such information to any other
Persons other than those permitted under this Section and only in the manner
permitted under this Section.
13.4 HEADINGS. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
13.5 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by virtue of
any law or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
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13.6 ENTIRE AGREEMENT. This Agreement, including all
of the Exhibits and the Schedules delivered pursuant hereto which are
incorporated herein by this reference, constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and thereof as of the
Closing Date and supersedes all prior agreements and undertakings, both written
and oral, between the Sellers and the Buyer with respect to the subject matter
hereof and thereof.
13.7 ASSIGNMENT. This Agreement and the rights and
duties of each party hereunder may not be assigned or assumed by operation of
law or otherwise without the express written consent of the other parties
(which consent may be granted or withheld in the sole discretion of the
Sellers, the Company or the Buyer, as applicable), provided that the Buyer may
assign its rights hereunder to an Affiliate of the Buyer without obtaining the
consent of the Sellers or the Companies in accordance with Section 2.3.
13.8 AMENDMENT; WAIVER. This Agreement may not be
amended or modified except by an instrument in writing signed by, or on behalf
of, the Sellers and the Buyer. Any party to this Agreement may (i) extend the
time for the performance of any of the obligations or other acts of the other
parties, (ii) waive any inaccuracies in the representations and warranties of
the other parties contained herein or in any document delivered by the other
parties pursuant hereto or (iii) waive compliance with any of the agreements or
conditions of the other parties contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights hereunder
shall not constitute a waiver of any of such rights. Notwithstanding the
consummation of the transactions contemplated hereby, the Buyer shall not be
deemed to have waived any breach of the provisions hereof occurring prior to
Closing and shall be deemed to have preserved all rights with respect to any
such breach, in each case, unless it shall have executed a written waiver with
respect thereto.
13.9 GOVERNING LAW. This Agreement and the Related
Agreements (other than the Employment Agreements) shall be governed by, and
construed in accordance with, the laws of the State of Illinois applicable to
contracts executed in and to be performed entirely within that State, except
with respect to matters of law concerning: (i) the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters, the law of the jurisdiction under which the respective
entity derives its powers shall govern, and (ii) the transfer of the Shares,
which shall be governed by Canadian law.
13.10 JURISDICTION AND VENUE, ETC.
(i) The Buyer, the Sellers, and the
Companies agree that all actions or proceedings initiated by either party and
arising directly or indirectly out of this Agreement or the Related Agreements
which are brought pursuant to judicial proceedings shall be litigated in the
United States District Court for the Northern District of Illinois, or in the
event such Court cannot or will not exercise jurisdiction, in the courts of the
State of Illinois. The Buyer, the Sellers, and the Companies expressly submit
and consent in advance to such jurisdiction and agree that service of summons
and complaint or other process or papers may
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be made by registered or certified mail addressed to the Buyer at the address
to which notices are to be sent pursuant to Section 13.2 of this Agreement and
to the Sellers at the address of their agent specified in Section 13.11. The
Buyer and the Sellers waive any claim that the United States District Court for
the Northern District of Illinois or the courts of the State of Illinois
constitute an inconvenient forum or an improper forum based on lack of venue.
(ii) Each of the Buyer, the Sellers, and the
Companies agree that if it breaches, threatens to breach or attempts to breach
any of its covenants and agreements contained in this Agreement or any Related
Agreement, then any suit or proceeding that may be commenced by the other party
as a result of such actual, threatened or attempted breach may seek an order
enjoining it from violating, or requiring the specific performance of, any of
such covenants and agreements, and an order to that effect may be made pending
the litigation or proceeding, as well as upon final determination thereof, and
said application for injunctive relief shall be without prejudice to any other
right or action which may accrue to the other party by reason of such actual,
threatened or attempted breach. Neither the Buyer, the Sellers, nor the
Companies shall be required to post bond with respect to any application for or
granting of injunctive relief.
13.11 APPOINTMENT OF AGENT FOR SERVICE. The Sellers and
the Companies hereby appoint Much Shelist Freed ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ("Much"),
at its offices at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. as its authorized agent to accept and acknowledge on
its behalf, service of any and all process that may be served in any action or
proceeding permitted hereby or by any Related Agreement. The Sellers and the
Companies agree to execute and deliver such forms as Much may, from time to
time require, in order to further effectuate such appointment, and to pay all
requisite fees and expenses of Much in serving in such capacity. Any and all
service of process and any other notice in any such action or proceeding shall
be effective if given to such agent in accordance with the procedures described
in Section 13.2 hereof.
13.12 ATTORNEYS' FEES. If any legal action or other
proceeding is brought for the enforcement of this Agreement or any Related
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement or
any Related Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
13.13 NO THIRD PARTY BENEFICIARY. This Agreement is not
intended to, and shall not confer any rights upon, any parties other than the
express parties hereto.
13.14 APPOINTMENT OF AGENT FOR EXECUTION OF CERTAIN
DOCUMENTS AND RECEIPT OF CERTAIN NOTICES. Each of the Sellers hereby authorize
▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇ to execute and deliver on their behalf any and all
documents in connection with this Agreement, including, without limitation,
Sellers' Related Agreements, which documents as executed and delivered by
either ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇ shall be binding upon each of the Sellers
in accordance with their respective terms, and to receive any notices to the
Sellers as may be
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50
required by Section 12.3(iii). Each of the Sellers hereby authorizes the ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ Law Corporation to receive the payment of the Purchase Price in the
manner contemplated by Article III.
13.15 FURTHER ACTION. Except as otherwise provided
herein, each of the parties hereto shall use all reasonable efforts to take, or
cause to be taken, all appropriate action, do or cause to be done all things
reasonably necessary, proper or advisable under Applicable Law, and execute and
deliver such documents and other papers, as may be required to carry out the
provisions of this Agreement and consummate and make effective the transactions
contemplated by this Agreement and the Related Agreements. Without limiting
the generality of the foregoing, each of the Sellers will execute and deliver
all documents, including, without limitation, class resolutions of the holders
of the Ticketmaster Shares, required to effect a reorganization of the
Companies, or any of them, by way of amalgamation, wind-up or continuance and
will if requested by the Buyer execute and deliver a unanimous shareholder
agreement restricting, in whole or in part, at the sole discretion of the Buyer
the powers of the directors of the Affiliate of the Buyer issuing the
Ticketmaster Shares.
13.16 PAYMENTS IN UNITED STATES DOLLARS. Except as
otherwise set forth herein or in any Related Document, all amounts payable
under this Agreement shall be payable in United States dollars. The symbol "$"
shall refer to United States dollars unless otherwise specified herein. If any
monies owing under or pursuant to this Agreement are received or recovered by
one party hereunder from any other party hereunder in a currency other than
United States dollars or any judgment, settlement, arbitral award or final
adjudication of amounts owing under or pursuant to this Agreement by one party
hereunder to any other party hereunder is denominated in a currency other than
United States dollars, then such monies, judgment, settlement, award or final
adjudication shall be converted into United States dollars using the Exchange
Rate between such currency and United States dollars in effect on the date on
which such monies are received or recovered or on the date on which payment
pursuant to such judgment, settlement, arbitral award or final adjudication is
due and owing.
13.17 REFERENCES TO LAWS AND STATUTES. All references
to statutes, laws, rules or regulations shall be deemed to refer to such
statutes, laws, rules and regulations, as amended.
13.18 REFERENCES TO THE COMPANIES AND THE SELLERS. All
references to the Companies and the Sellers in Article IV, as appropriate,
shall be deemed to include each of the Companies and each of the Sellers in
their individual capacity.
13.19 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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51
IN WITNESS WHEREOF, the Sellers, the Companies, and the
Buyer have caused this Agreement to be executed as of the date written above.
TICKETMASTER GROUP, INC. TICKETMASTER CANADA
HOLDINGS LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------- ------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President Title: Chief Executive Officer
and Chief Financial Officer
ALBERTA INFO CENTRES LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
INTERNATIONAL AUTOMATED
TICKET SYSTEMS LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
T.O.P. TICKETS UNLIMITED INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
TICKETMASTER ALBERTA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
TICKETMASTER CANADA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
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52
TICKETMASTER MANITOBA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
VANCOUVER TICKET CENTRE LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
WORLDWIDE TICKET SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in Trust
/s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, In Trust
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Jointly
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇, Jointly
/s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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