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EXHIBIT 10.10
THE ULTIMATE BAND LIST, LLC/ IMUSIC, INC.
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is made as of February __, 1999
by and among Mr. ▇▇▇▇▇ ▇▇▇▇, an individual ("▇▇▇▇"), ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, an
individual ("▇▇▇▇▇▇▇▇", and collectively with ▇▇▇▇, the "Shareholders") and The
Ultimate Band List, LLC, a California limited liability company (the "UBL").
W I T N E S S E T H:
WHEREAS, the Shareholders have agreed to make an aggregate capital
contribution to the UBL in the form of 545,455 shares (collectively, the
"Shares") of the issued and outstanding common stock, $.01 par value (the
"Common Stock"), of Imusic, Inc., a Washington corporation (the "Corporation"),
and in exchange therefore, the UBL has agreed to issue to the Shareholders, upon
the terms and conditions provided in this Agreement and in the Amended and
Restated Operating Agreement of the UBL made as of July 28, 1998 (as amended,
the "Operating Agreement"), (i) an aggregate of 392.13 UBL Common Units (the
"Units"), and (ii) $110,000 in cash (collectively, the "Consideration"), all as
specified further on the signature pages to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Shareholders and the UBL hereby
agree as follows:
A G R E E M E N T:
Terms used herein which are not defined shall have such definitions as
are given to them in the Operating Agreement.
SECTION 1
The Exchange Transaction
Subject to the terms and conditions set forth in this Agreement and in
the Operating Agreement, upon execution of this Agreement, each Shareholder
agrees to exchange the number of Shares set forth after such Shareholder's name
on the signature pages to this Agreement in return for that portion of the
Consideration listed thereat, and the UBL agrees to issue the Units and/or pay
the other portion of the Consideration to the Shareholders in exchange for such
Shares, all as specified further on the signature pages to this Agreement.
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SECTION 2
Closing, Payment and Delivery
2.1 Closing Date and Place of Closing. The closing (the "Closing") shall
be held on February __, 1999 (the "Closing Date") and shall be held at the
offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or on such other date and at such other place as shall be
mutually agreed to by the parties hereto.
2.2 Payment and Delivery.
(a) At the Closing, the UBL will (i) pay to each Shareholder, by
certified or bank check or wire funds transfer, the amount of cash set forth
next to such Shareholder's name on the signature pages hereto, and (ii) deliver
to ▇▇▇▇ a fully executed copy of the Third Amendment (as defined), whereby such
Shareholder shall become the holder of that number of Units set forth next to
such Shareholder's name on the signature pages hereto.
(b) At the Closing, the Shareholders shall deliver to the UBL one
or more certificates representing the Shares being transferred by the
Shareholders pursuant to the terms of this Agreement, duly endorsed for
transfer, or with appropriate stock powers attached and properly signed; and
free and clear of any claims, liens, security interests, restrictions, pledges
and encumbrances of any kind (except for such restrictions on transfer as may
exist generally under applicable Federal and State securities laws).
SECTION 3
Representations and Warranties of ▇▇▇▇
▇▇▇▇ hereby represents and warrants to the UBL that, except as set forth
on the "Schedule of Exceptions" attached as Exhibit A hereto which refers
specifically to the representations and warranties in this Agreement and which
reasonably identifies the basis for an exception thereto:
3.1 Organization and Standing; Charter and Bylaws.
(a) The Corporation is duly organized, validly existing and in
good standing under the laws of its jurisdiction of formation. The Corporation
has all requisite corporate power and authority to own the properties owned by
it and to conduct the business as now being and as proposed to be conducted by
it.
(b) The Corporation is in good standing under the laws of, and is
qualified to do business in, the State of Washington, and in each other
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.
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(c) The Corporation has made available to the UBL and its counsel
true, correct and complete copies of its Articles of Incorporation and Bylaws
and all amendments thereto to date.
3.2 Power and Authority. ▇▇▇▇ has all requisite power, authority and
capacity to enter into this Agreement and all agreements to be executed and
delivered by him pursuant to the terms hereof (collectively, the "Ancillary
Agreements"), to exchange the Shares, and to carry out and perform his other
obligations under such agreements, in each case as applicable.
3.3 Subsidiaries. The Corporation does not own of record or beneficially
any capital stock or equity interest or investment in any corporation,
partnership, association or other entity.
3.4 Capitalization. The Corporation's authorized capital stock consists
of 1,000,000 shares of Common Stock of which 545,455 shares are currently issued
and outstanding and held by the Shareholders, and 200,000 shares of Preferred
Stock, $.01 par value, of which 161,364 have been classified as Series A
Convertible Preferred Stock and are currently issued and outstanding and held by
the UBL (the "Series A Preferred Stock"). All such shares of capital stock have
been duly authorized and validly issued and are fully paid and non-assessable.
There are no outstanding preemptive, first refusal, conversion or other rights,
options, warrants or agreements granted or issued by or binding upon the
Corporation or the Shareholders for the purchase or acquisition of any shares of
the Corporation's capital stock, other than 100,000 shares of Common Stock
reserved by the Corporation for issuance under its Nonstatutory Stock Option
Plan, none of which are currently subject to outstanding options.
3.5 Authorization; No Conflicts. All action on the part of ▇▇▇▇ necessary
for the authorization, execution, delivery and performance by him of this
Agreement and the Ancillary Agreements, and for the consummation of the
transactions contemplated herein and therein, has been taken. This Agreement and
the Ancillary Agreements have each been duly executed and delivered by the
signatories thereto, and assuming the due authorization, execution and delivery
by the other parties hereto and thereto, are valid and binding obligations of
such parties, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth on Exhibit A, the execution, delivery and
performance by ▇▇▇▇ of this Agreement and the Ancillary Agreements and
compliance therewith will not result in any violation of and will not conflict
with, or result in a breach of any of the terms of, or constitute a default
under, or require any consent under, (i) any provision of state or federal law
to which the Corporation or ▇▇▇▇ is subject, (ii) the Corporation's Articles of
Incorporation, as amended, or Bylaws, as amended, or (iii) any mortgage,
indenture, agreement, instrument, judgment, decree, order, or, to the best
knowledge of ▇▇▇▇, any rule or regulation or other restriction to which the
Corporation or he is a party or by which the Corporation or he or any of his
assets are bound, or (iv) result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the assets of the Corporation pursuant to any
such item, except, with respect to (iii) and (iv) above, such violations,
conflicts, breaches, defaults,
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consents, mortgages, pledges, liens, encumbrances and charges which, singly or
in the aggregate, would not have or could not reasonably be expected to have a
material adverse effect on the properties, business, condition (financial or
otherwise), prospects or results of operations (a "Material Adverse Effect") on
the Corporation.
3.6 Financial Information. The Corporation has delivered to the UBL its
unaudited financial statements (profit and loss and balance sheet) as of and for
the nine months ended September 30, 1998, copies of which are also attached
hereto at Exhibit A. Such financial statements (the "Financial Statements")
fairly present the financial information contained therein as of the date
thereof. Except as set forth in the Financial Statements, the Corporation has no
material liabilities of any nature (matured or unmatured, fixed or contingent)
except those incurred in the ordinary course of business since the date of the
Financial Statements and obligations under the terms of the contracts,
agreements or leases set forth in Exhibit A.
3.7 Schedule of Contracts and Leases. The Corporation has not entered
into any material contract, agreement or lease other than those set forth in
Exhibit A hereto. The Corporation has made available to the UBL true and
complete copies of all such contracts, agreements and leases. All parties to the
contracts, agreements and leases set forth in Exhibit A are in material
compliance therewith and none are in default thereunder. Without limiting the
generality of the foregoing provisions of this Section, except as set forth in
Exhibit A, the Corporation is not, directly or indirectly, a party to or
otherwise bound by or obligated under, any agreement, obligation or commitment
of any kind or character providing for aggregate payments to or by the
Corporation in excess of $10,000: (a) to lease, rent, license or otherwise
occupy any plant, office space or other real property; (b) for personal
services; (c) for the distribution or sale of any products; (d) for advertising
or promotion; (e) for the purchase of equipment or capital goods; (f) for the
payment of any royalty, license fee, commission or other fee or compensation;
(g) granting or otherwise creating any license, right, title or interest in or
to any patent, trade secret or other asset of the Corporation; (h) for any loan
to or by the Corporation or the guarantee by the Corporation of any loan; or (i)
any lien or encumbrance upon any asset of the Corporation.
3.8 Material Liabilities; Absence of Changes. Except as set forth in the
Financial Statements and except for liabilities incurred in the ordinary course
of business since the date thereof, the Corporation has no material liability or
obligation, absolute or contingent (individually or in the aggregate), except
for the Corporation's obligations under the terms of the contracts, agreements
or leases set forth in Exhibit A. There has been no material adverse change in
the properties, business, condition (financial or otherwise), prospects or
results of operations of the Corporation since December 31, 1997, and there is
no existing condition, event or series of events which can reasonably be
expected to adversely affect the properties, business, condition (financial or
otherwise), prospects or results of operations of the Corporation, including but
not limited to (i) any loans made to any employee, officer or director of the
Corporation other than advances of expenses made in the ordinary course of
business; (ii) any material change in any compensation arrangement or agreement
with any key employee or executive officer of the Corporation or any material
change in the rate of pay of its existing employees as a group; or
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(iii) any change or amendment to any material contract or arrangement by which
the Corporation is bound or to which it or any of its assets are subject.
3.9 Representations Regarding Exchange of Common Stock.
(a) ▇▇▇▇ has good and valid title to the Shares being exchanged
by him pursuant to this Agreement, free and clear of all liens, encumbrances,
security interests and claims whatsoever;
(b) Upon exchange of his portion of the Shares, as provided
herein, at the Closing, ▇▇▇▇ will convey to the UBL good and valid title to such
shares of Common Stock, free and clear of all liens, encumbrances and security
interests of any kind; and
(c) No actions, suits or proceedings before or by any court or
governmental agency, body or authority, or arbitrator are pending or threatened
or contemplated, seeking to prevent the exchange of the Shares or the
consummation of the transactions contemplated by this Agreement.
3.10 Representations Regarding Receipt of UBL Common Units. ▇▇▇▇,
(a) is acquiring the Units for his own account, for investment
purposes and not with a current view to the distribution thereof, and will not,
directly or indirectly, subdivide, offer or Transfer any of the Units (or
solicit any offers to buy, purchase, or otherwise acquire any of the Units),
other than in compliance with Federal and State securities laws and the terms of
the Operating Agreement;
(b) is an "accredited investor" within the meaning of the
Securities Act and the rules thereunder, and understands that such Units have
not been registered under the Securities Act nor qualified under any State blue
sky law by reason of specified exemptions therefrom which depend upon, among
other things, the bona fide nature of the investment intent expressed herein;
(c) subject to the provisions of Section 3.13 of the Operating
Agreement, acknowledges that the Units must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available; and
(d) is aware that the UBL has a short operating history, and that
an investment in the Units is highly speculative.
3.11 Title to Properties; Liens and Encumbrances. The Corporation has
good and marketable title to all its properties and assets, free from all
mortgages, pledges, liens, security interests, conditional sale agreements,
encumbrances or charges.
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3.12 Litigation. There are no legal actions, suits, arbitrations, or
other legal, administrative or other governmental proceedings pending or
threatened against the Corporation, its properties, assets or business, and ▇▇▇▇
is not aware of any facts which might result in or form the basis for any such
action, suit or other proceeding. The Corporation is not in default with respect
to any judgment, order or decree of any court of any government agency or
instrumentality. Without limiting the generality of the foregoing, ▇▇▇▇ has no
knowledge or belief that there is pending or threatened any claim or litigation
against or affecting the Corporation contesting its right to provide services,
or to sell or use any product planned to be sold or used by the Corporation in
connection with the operations of the Corporation.
3.13 Intangible Assets. To the best knowledge of ▇▇▇▇, after reasonable
inquiry, the Corporation (i) owns or has the right to use, free and clear of all
liens, claims and restrictions, all patents, trademarks, service marks, trade
names, copyrights, licenses and rights with respect to the foregoing, to be used
in the conduct of its business, without infringing upon or otherwise acting
adversely to the right or claimed right of any person under or with respect to
any of the foregoing, and (ii) is not obligated or under any liability
whatsoever to make any payments by way of royalties, fees or otherwise to any
owner of, licensor of, or other claimant to, any patent, trademark, trade name,
copyright or other intangible asset with respect to the use thereof or in
connection with the conduct of its business or otherwise. Neither the
Corporation nor ▇▇▇▇ has received any communications alleging that the
Corporation has violated, or by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity.
3.14 Year 2000 Systems. The computer systems and software of the
Corporation that are material to its business are able to accurately process
date data, including calculating, comparing and sequencing from, into and
between the twentieth century (through year 1999), the year 2000 and the
twenty-first century, including leap year calculations, except for such
inabilities to process such data that are fixable by normal, ongoing
maintenance.
3.15 Compliance with Other Instruments. The Corporation is not in
violation of any term of its Articles of Incorporation, as amended, or Bylaws,
as amended. The Corporation is not in violation of any term of any mortgage,
indenture, contract, agreement, instrument, judgment, decree, order, or, to the
best knowledge of ▇▇▇▇, any statute, rule or regulation to which the Corporation
is subject, and a violation of which would have a Material Adverse Effect on the
Corporation.
3.16 Employees. To the best knowledge of ▇▇▇▇, no employee of the
Corporation is, or is now expected to be, in violation of any term of any
employment contract, invention assignment or non-disclosure agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant relating to the right of any such employee to be employed by the
Corporation because of the nature of the business conducted or proposed to be
conducted by the Corporation or to the use of trade secrets or proprietary
information of others, and the employment of the Corporation's employees does
not subject the Corporation or the UBL to any
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liability arising by reason of any such contract, agreement or restrictive
covenant or by reason of trade secret or unfair competition laws.
3.17 Licenses. To the best knowledge of ▇▇▇▇, the Corporation possesses
from the appropriate agency, commission, board and governmental body and
authority, whether state, local or federal, all licenses, permits,
authorizations, approvals, franchises and rights as are necessary for the
Corporation to engage in the business proposed to be conducted by it, and to the
best knowledge of ▇▇▇▇, all such licenses, permits, authorizations and rights
have been lawfully and validly issued, are in full force and effect, and will
not be revoked, canceled, withdrawn, terminated or suspended.
3.18 Registration Rights. Except as provided with respect to its Series A
Preferred Stock, the Corporation is not under any obligation to register any of
its securities under the Securities Act.
3.19 Disclosure. The representations and warranties of ▇▇▇▇ contained in
(i) this Agreement and the exhibits attached hereto and (ii) any certificate
furnished or to be furnished to the UBL at the Closing, when read together, do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made.
3.20 No Conflict of Interest. Except as disclosed in Exhibit A, the
Corporation is not indebted, directly or indirectly, to any officer, director or
stockholder of the Corporation or to his or her respective spouse or children,
in any amount whatsoever; none of said officers, directors or stockholders, or
any members of their immediate families, is indebted to the Corporation or has
any direct or indirect ownership interest in any firm or corporation with which
the Corporation is affiliated or with which the Corporation has a business
relationship, or any firm or corporation that competes with the Corporation,
except that officers, directors and/or stockholders of the Corporation may own
stock in publicly-traded companies that may have a business relationship with or
compete with the Corporation. To the best knowledge of ▇▇▇▇, other than as set
forth in or contemplated by this Agreement and the Ancillary Agreements, no such
officer, director or stockholder, or any member of his or her immediate family,
is, directly or indirectly, interested in any material contract with the
Corporation. The Corporation is not a guarantor or indemnitor of any
indebtedness.
3.21 Minute Books. The minutes of the proceedings of the stockholders and
directors of the Corporation, copies of which have been made available to the
UBL, are correct and complete and reflect all such proceedings to the date
thereof.
3.22 Labor Agreements and Actions. The Corporation is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of ▇▇▇▇,
has sought to represent any of the employees, representatives or agents of the
Corporation.
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3.23 Employee Benefit Plans. The Corporation does not have any Employee
Benefit Plan as described in Section 3(2)(a) or Section 3(2)(b) of the Employee
Retirement Income Security Act of 1974.
3.24 Voting Agreements. The Corporation is not a party or subject to any
agreement or understanding, and to the knowledge of ▇▇▇▇, there are no
outstanding agreements, voting trusts, proxies or other arrangements or
understandings among any persons and/or entities, which affect or relate to the
voting or giving of written consents with respect to any security, or by a
director, of the Corporation.
3.25 Tax Returns and Payments. The Corporation has filed all tax returns
and reports as required by law. These returns and reports are true and correct
in all material respects. The Corporation has paid all taxes and other
assessments due prior to the time material penalties would accrue thereon. The
provisions for taxes of the Corporation, if any, as shown in the Financial
Statements are adequate for taxes due or accrued as of each date thereof. None
of the Corporation's federal income tax returns and none of its state income or
franchise tax or sales or use tax returns has ever been audited by governmental
authorities. The Corporation has withheld or collected from each payment made to
each of its employees, the amount of all taxes (including, but not limited to,
federal income taxes, Federal Insurance Contribution Act taxes and Federal
Unemployment Tax Act taxes) required to be withheld or collected therefrom, and
has paid the same to the proper tax receiving officers or authorized
depositories to the extent such are now payable.
SECTION 4
Representations and Warranties of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ hereby represents and warrants to the UBL that, except as set
forth on the "Schedule of Exceptions" attached as Exhibit B hereto which refers
specifically to the representations and warranties in this Agreement and which
reasonably identifies the basis for an exception thereto:
4.1 Power and Authority. ▇▇▇▇▇▇▇▇ has all requisite power, authority and
capacity to enter into this Agreement and all other documents to be executed and
delivered by him pursuant to the terms hereof, to exchange the Shares, and to
carry out and perform his other obligations under such agreements and other
documents
4.2 Authorization; No Conflicts. All action on the part of ▇▇▇▇▇▇▇▇
necessary for the authorization, execution, delivery and performance by him of
this Agreement, and for the consummation of the transactions contemplated
herein, has been taken. This Agreement has been duly executed and delivered by
▇▇▇▇▇▇▇▇, and assuming the due authorization, execution and delivery by the
other parties hereto, will be a valid and binding obligation of ▇▇▇▇▇▇▇▇,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency,
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reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as set forth
on Exhibit B, the execution, delivery and performance by ▇▇▇▇▇▇▇▇ of this
Agreement and compliance therewith will not result in any violation of and will
not conflict with, or result in a breach of any of the terms of, or constitute a
default under, or require any consent under, (i) any provision of state or
federal law to which ▇▇▇▇▇▇▇▇ is subject, or (ii) any mortgage, indenture,
agreement, instrument, judgment, decree, order, or, to the best knowledge of
▇▇▇▇▇▇▇▇, any rule or regulation or other restriction to which he is a party or
by which he or any of his assets are bound.
4.3 Representations Regarding Exchange of Common Stock.
(a) ▇▇▇▇▇▇▇▇ has good and valid title to the Shares being
exchanged by him pursuant to this Agreement, free and clear of all liens,
encumbrances, security interests and claims whatsoever;
(b) Upon exchange of his portion of the Shares, as provided
herein, at the Closing, ▇▇▇▇▇▇▇▇ will convey to the UBL good and valid title to
such shares of Common Stock, free and clear of all liens, encumbrances and
security interests of any kind; and
(c) No actions, suits or proceedings before or by any court or
governmental agency, body or authority, or arbitrator are pending or threatened
or contemplated, seeking to prevent the exchange of the Shares or the
consummation of the transactions contemplated by this Agreement.
SECTION 5
Representations and Warranties of the UBL
The UBL hereby represents and warrants to the Shareholders that, except
as set forth on the "Schedule of Exceptions" attached as Exhibit C hereto which
refers specifically to the representations and warranties in this Agreement and
which reasonably identifies the basis for an exception thereto:
5.1 Capitalization. Exhibit C sets forth both prior to and after giving
effect to the Closing, the authorized equity capital of the UBL and the number
of issued and outstanding securities of each class of securities of the UBL. All
of the issued and outstanding securities, including the Units to be issued
pursuant to the terms of this Agreement, are validly issued, fully paid and
non-assessable. Except as set forth on Exhibit C, there are (i) no existing
options, warrants, calls, commitments or other contracts to which the UBL is a
party requiring, and no convertible securities of the UBL outstanding which upon
conversion would require, the issuance of any additional securities of the UBL,
or other securities convertible into securities of the UBL, (ii) no contracts to
which the UBL is a party, with respect to the voting or Transfer of such
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securities and (iii) no shareholders' preemptive rights or rights of first
refusal or other similar rights with respect to the issuance of securities by
the UBL. True and correct copies of the Articles of Organization and the
Operating Agreement of the UBL have been delivered to the Shareholders.
5.2 Authorization and Issuance of Units. The issuance by the UBL of the
Units has been duly authorized by all necessary action on the part of the UBL
and, upon issuance in accordance with the terms hereof, the Units will be
validly issued, fully paid and non-assessable, free and clear of all liens.
5.3 Securities Laws. In reliance on the investment representations
contained in Section 3.10 of this Agreement, and assuming that ▇▇▇▇ resides at
the address listed on the signature pages to this Agreement, the offer,
issuance, sale and delivery of the Units, as provided in this Agreement, are
exempt from the registration requirements of the Securities Act and all
California state securities laws, and are otherwise in compliance with such
laws. Neither the UBL nor any Person acting on its behalf has taken or will take
any action which might subject the offering, issuance or sale of the Units to
the registration requirements of Section 5 of the Securities Act.
5.4 Existence; Compliance with Law. The UBL (i) is a limited liability
company duly organized, validly existing and in good standing under the laws of
its applicable jurisdiction of organization; (ii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification (except for jurisdictions in which the failure to so qualify or to
be in good standing would not have a Material Adverse Effect on the UBL; (iii)
has the requisite power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the property
it operates under lease, and to conduct its business as now being conducted;
(iv) has all licenses, permits, consents or approvals from or by, and has made
all filings with, and has given all notices to, all governmental authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct except where such failure would not have or could not reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect on the
UBL; (v) is in compliance with its organizational documents and operating
agreements; and (vi) is in compliance with all applicable provisions of law,
except for such noncompliance which would not have, or could not reasonably be
expected to have, a Material Adverse Effect on the UBL.
5.5 Subsidiaries. There are no subsidiaries of the UBL. ARTISTdirect New
Media, LLC ("ADNM") is the sole UBL Manager. Except as disclosed on Exhibit C,
and except for the shares of the Series A Preferred Stock, the UBL does not hold
any securities or other proprietary interest, directly or indirectly, of any
Person or have any agreement or arrangement to acquire any securities or other
proprietary interest other than the interests described in this Section 5.5.
5.6 Power, Authorization; Enforceable Obligations. Except as set forth in
Exhibit C (a) the execution, delivery and performance by the UBL of this
Agreement, the other Ancillary
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Agreements to which it is a party and all instruments and documents to be
delivered by the UBL, the issuance by the UBL of the Units and the consummation
of the other transactions contemplated by any of the foregoing: (i) are within
the UBL's power and authority; (ii) have been duly authorized by all necessary
or proper action; (iii) are not in contravention (with or without the lapse of
time or giving of notice or both) of any provision of the UBL's organizational
documents or Operating Agreement; (iv) do not and will not violate (with or
without the lapse of time or giving of notice or both) any law, or any order or
decree of any governmental authority; (v) do not and will not (with or without
the lapse of time or giving of notice or both) conflict with or result in the
breach or termination of, constitute a default under, accelerate any performance
required by, give rise to any right to increase the obligations or otherwise
modify the terms under, any contract to which the UBL is a party or by which the
UBL or any of its assets or property is bound; (vi) do not and will not (with or
without the lapse of time or giving of notice or both) result in the creation or
imposition of any lien upon any of the assets or property of the UBL; and (vii)
do not require the consent or approval of, or any filing with, any governmental
authority or any other Person, except in the case of (iv), (v), (vi) and (vii)
for such violations, conflicts, breaches, terminations, defaults, accelerations,
rights, modifications, liens, consents, approvals or filings which, singly or in
the aggregate, would not have or could not reasonably be expected to have, a
Material Adverse Effect on the UBL. Each of this Agreement and the other
Ancillary Agreements to which the UBL is a party has been duly executed and
delivered by the UBL and, assuming the due authorization, execution and delivery
by the other parties hereto and thereto, each constitutes a legal, valid and
binding obligation of the UBL, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.7 Securities Act. It is acquiring the Shares for investment and not
with the current view to, or for resale in connection with, any distribution
thereof, other than in compliance with Federal and State securities laws. It is
an "accredited investor" within the meaning of the Securities Act and the rules
thereunder, and understands that the Shares have not been registered under the
Securities Act nor qualified under any State blue sky law by reason of specified
exemptions therefrom which depend upon, among other things, the bona fide nature
of the investment intent expressed herein. It acknowledges that the Shares must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
5.8 Speculative Investment. It is aware that the Corporation has a short
operating history, and that its possession of the Shares is highly speculative.
5.9 Disclosure. The representations and warranties of the UBL contained
in (i) this Agreement and the exhibits attached hereto and (ii) any certificate
furnished or to be furnished to the Shareholders at the Closing, when read
together, do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made.
11.
12
5.10 Investment Company. The UBL is not and, after giving effect to the
transactions contemplated by this Agreement and the Ancillary Agreements, will
not be an "investment company" as defined in the Investment Company Act of 1940.
SECTION 6
Conditions to Obligations of the UBL
The obligation of the UBL to issue the Units and pay the other portion of
the Consideration in exchange for the Shares, and to consummate the other
transactions contemplated by this Agreement and the Ancillary Agreements, is
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
6.1 Representations and Warranties. The representations and warranties of
the Shareholders shall be true and correct in all respects on the Closing Date.
6.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Shareholders on or prior
to the Closing Date shall have been performed or complied with in all respects.
6.3 Legal Issuance. At the time of the Closing, the exchange of the
Shares for the Units and the other portion of the Consideration shall be legally
permitted by all laws and regulations to which the parties to this Agreement and
the Corporation are subject.
6.4 Qualification. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body that are required in connection
with the lawful issuance and exchange of the Shares for the Units pursuant to
this Agreement shall have been duly obtained and shall be effective on and as of
the Closing.
6.5 Due Diligence, Proceedings and Documents. The UBL shall have had a
reasonable opportunity to complete its examination of the affairs of the
Corporation, including verifying current website traffic and estimating website
hosting requirements and cost, and shall be satisfied with the results thereof.
All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be satisfactory in form and substance to the UBL and its
counsel.
6.6 Deliveries at Closing. At the Closing, the Shareholders will deliver
to the UBL, as applicable, the following documents:
(i) the Contingent (Tax) Loan Agreement in substantially the form
attached hereto as Exhibit D (the "Loan Agreement"), duly executed by ▇▇▇▇;
12.
13
(ii) the Employment Agreement to be entered into by and between
the Corporation and ▇▇▇▇▇ ▇▇▇▇ in substantially the form attached hereto as
Exhibit E (the "▇▇▇▇ Employment Agreement"), duly executed by ▇▇▇▇;
(iii) the Employment Agreement to be entered into by and between
the Corporation and ▇▇▇▇▇▇ ▇▇▇▇▇ in substantially the form attached hereto as
Exhibit F (the "▇▇▇▇▇ Employment Agreement"), duly executed by ▇▇▇▇▇▇ ▇▇▇▇▇;
(iv) the Third Amendment to the Operating Agreement of the UBL in
substantially the form attached hereto as Exhibit G (the "Third Amendment"),
duly executed by ▇▇▇▇;
(v) an executed copy of the Amendment to the Amended and Restated
Articles of Incorporation of the Corporation in substantially the form attached
hereto as Exhibit H, certified as filed as of the date of this Agreement by the
Secretary of State of the State of Washington (the "Amended Articles");
(vi) certificates representing the Shares, duly endorsed for
transfer, or with appropriate stock powers attached and properly signed, and
other good and sufficient instruments of transfer reasonably satisfactory in
form and substance to the UBL as shall be effective to vest in the UBL all of
the Shareholders' right, title and interest in and to such Shares, free and
clear of all claims, liens, security interests, restrictions, pledges and
encumbrances of any kind;
(vii) certificates of good standing (with tax) showing that the
Corporation is organized and in good standing in its jurisdiction of
organization;
(viii) copies of the organizational documents of the Corporation
certified by the Secretary of State of the State of Washington (and including
the Amended Articles);
(ix) a certificate or certificates executed by the Shareholders,
certifying that the representations and warranties of such individuals are true
and correct in all respects on the Closing Date, that all covenants, agreements
and conditions contained in this Agreement to be performed or complied with by
each on or before the Closing Date shall have been so performed or complied
with, certifying the organizational documents of the Corporation specified in
(viii) above, and further certifying the names and signatures of such
individuals authorized to sign this Agreement and such certificate and the
Ancillary Agreements;
(x) copies of the release of claims statements (in each case with
executed receipts), each in the form attached hereto as Exhibit I, duly executed
by each of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇; and
(xi) executed copies of receipts evidencing each of such
Shareholder's receipt from the UBL of that amount of cash set forth next to such
Shareholder's name on the signature page hereto.
13.
14
SECTION 7
Conditions to Obligations of the Shareholders
The obligations of the Shareholders to exchange the Shares for the
Consideration, and to consummate the other transactions contemplated by this
Agreement and the Ancillary Agreements, is subject to the fulfillment on or
prior to the Closing Date of each of the following conditions:
7.1 Representations and Warranties. The representations and warranties
made by the UBL shall be true and correct in all respects on the Closing Date,.
7.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the UBL on or prior to the
Closing Date shall have been performed or complied with in all respects.
7.3 Legal Issuance. At the time of the Closing, the exchange of the
Shares for the Units and the other portion of the Consideration shall be legally
permitted by all laws and regulations to which the parties to this Agreement and
the Corporation are subject.
7.4 Qualification. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body that are required in connection
with the lawful issuance and exchange of the Shares for the Units pursuant to
this Agreement shall have been duly obtained and shall be effect on and as of
the Closing.
7.5 Deliveries at Closing. At the Closing, the UBL will deliver to the
Shareholders, as applicable, the following documents:
(i) the Loan Agreement, duly executed by the UBL;
(ii) the ▇▇▇▇ Employment Agreement, duly executed by the
Corporation;
(iii) the ▇▇▇▇▇ Employment Agreement, duly executed by the
Corporation;
(iv) the Third Amendment, duly executed by the UBL and all other
parties thereto;
(v) the cash portion of the Consideration, by bank or cashier's
check or wire funds transfer;
(vi) long form certificates of good standing (with tax) showing
that the UBL is organized and in good standing in its jurisdiction of
organization;
14.
15
(vii) copies of the organizational documents of the UBL certified
as of a recent date by the Secretary of State of the jurisdiction of its
organization; and
(viii) a certificate or certificates executed by duly elected
officers of the UBL certifying that the representations and warranties of such
entity are true and correct in all respects on the Closing Date, that all
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by it on or before the Closing Date shall have been so
performed or complied with, certifying the organizational documents of the UBL
specified in (vii) above, and further certifying the names and signatures of
such individuals authorized to sign this Agreement and such certificate and the
Ancillary Agreements.
SECTION 8
Covenant to Pay Employee Bonuses
The UBL hereby covenants that, in the event that ▇▇▇▇ elects to exercise
the ▇▇▇▇ Redemption Right contained in Section 3.13 of the Operating Agreement,
then, the UBL will cause the Corporation to pay out, simultaneously with the
UBL's payment to ▇▇▇▇ of the ▇▇▇▇ Redemption Price, an aggregate of $200,000 in
bonus compensation to one or more employees of the Corporation, such employees
to be mutually agreed to by ▇▇▇▇ and the UBL. Notwithstanding the foregoing, the
UBL hereby agrees that ▇▇▇▇▇▇ ▇▇▇▇▇ will be eligible for all or a portion of
such bonus compensation, in any event in the sole discretion of ▇▇▇▇, and
whether or not ▇▇▇▇ or ▇▇▇▇▇ is an employee of the Corporation at the time such
bonus is to be paid.
SECTION 9
Indemnification and Liability
9.1 Indemnity.
(a) ▇▇▇▇ agrees to indemnify and hold harmless the UBL, its
Affiliates and their respective officers, directors and employees from and
against any liabilities, obligations, losses, damages, amounts paid in
settlement, penalties, actions, judgments, fines, suits, claims, costs,
attorneys' fees, expenses and disbursements of any kind ("Losses") which may be
imposed upon, incurred by or asserted against any such party in any manner
relating to or arising out of (i) any untrue representation, breach of warranty
or failure to perform any covenants or agreement by such party contained herein,
in any other Ancillary Agreement or in any certificate or document delivered
pursuant hereto or thereto or (ii) any and all claims, actions, suits or other
proceedings brought by or on behalf of any former employee or shareholder of the
Corporation, or any other person, which are related to the transactions
contemplated by this Agreement and the Ancillary Agreements.
15.
16
(b) ▇▇▇▇▇▇▇▇ agrees to indemnify and hold harmless the UBL, its
Affiliates and their respective officers, directors and employees from and
against any Losses which may be imposed upon, incurred by or asserted against
any such party in any manner relating to or arising out of any untrue
representation, breach of warranty or failure to perform any covenants or
agreement by such party contained herein, in any other Ancillary Agreement or in
any certificate or document delivered pursuant hereto or thereto.
(c) The UBL agrees to indemnify and hold harmless the
Shareholders from and against any Losses which may be imposed upon, incurred by
or asserted against them in any manner relating to or arising out of any untrue
representation, breach of warranty or failure to perform any covenants or
agreement by the UBL contained herein or in any certificate or document
delivered pursuant hereto or thereto.
(d) Each indemnifying party (an "Indemnifying Party") also agrees
to advance expenses as incurred to the fullest extent permitted under applicable
law; provided, however, that the party being indemnified (the "Indemnified
Party") provides an undertaking to repay such advances to such party if it is
ultimately determined that such Indemnified Party is not entitled to
indemnification. Each of ▇▇▇▇, ▇▇▇▇▇▇▇▇ and the UBL will cooperate in the
defense of any such matter. The rights of the Indemnified Parties to
indemnification under this Section 9 shall be their sole and exclusive remedy
with respect to any breach of any representation or warranty contained in this
Agreement. Notwithstanding anything to the contrary contained in this Agreement,
the amount to which any Indemnified Party shall be entitled pursuant to this
Section 9.1 shall be limited to the Losses actually sustained by such
Indemnified Party, net of any tax benefits derived by such Indemnified Party in
respect of such Losses.
9.2 Indemnification Procedures. Any Indemnified Party seeking
indemnification pursuant to Section 9.1 with respect to a claim, action, suit or
proceeding by a Person who is not a Indemnified Party shall give prompt written
notice to the Indemnifying Party of the assertion of any claim, or the
commencement of any action, suit or proceeding, in respect of which indemnity
may be sought hereunder, provided that the failure to give such notice shall not
affect the Indemnified Party's rights to indemnification hereunder unless such
failure shall prejudice in any material respect the ability of the Indemnifying
Party to defend such claim, action, suit or proceeding. The Indemnifying Party
shall have the right to assume the defense of any such action, suit or
proceeding at its expense; provided, however, that (i) such claim, action, suit
or proceeding seeks only monetary damages and, in the reasonable judgment of the
Indemnified Party, the Indemnifying Party has adequate financial and other
resources to undertake such defense and satisfy any indemnifiable Losses arising
from such action, suit or proceeding and (ii) the selection of counsel is
approved by the Indemnified Party (which approval shall not be unreasonably
withheld or delayed). If such claim, action, suit or proceeding seeks relief
other than or in addition to monetary damages or if the Indemnified Party so
determines that the Indemnifying Party does not have adequate resources, or the
Indemnifying Party shall elect not to assume the defense of any such action,
suit or proceeding, or fails to make such an election within twenty (20) days
after it receives such notice pursuant to the first sentence of this Section
9.2, the Indemnified Party may assume such defense with counsel of its choice
and at the
16.
17
expense of the Indemnifying Party and shall defend such claim, action, suit or
proceeding diligently and in good faith. The Indemnified Party shall have the
right to participate in (but not control) the defense of an action, suit or
proceeding defended by the Indemnifying Party hereunder and to retain its own
counsel in connection with such action, suit or proceeding, but the fees and
expenses of such counsel shall be at the Indemnified Party's expense; provided,
however, that the Indemnifying Party shall bear the expenses as incurred of
counsel to the Indemnified Party if (i) the Indemnifying Party and the
Indemnified Party have mutually agreed in writing to the retention of such
counsel or (ii) the named parties in any such action, suit or proceeding
(including impleaded parties) include the Indemnifying Party and the Indemnified
Party, and representation of the Indemnifying Party and the Indemnified Party by
the same counsel would, in the opinion of counsel to the Indemnified Party,
create a conflict; provided further that, unless otherwise agreed by the
Indemnifying Party, if the Indemnifying Party is obligated to pay the fees and
expenses of such counsel, the Indemnifying Party shall be obligated to pay only
the fees and expenses associated with one attorney or law firm, as applicable,
for the Indemnified Party, as well as the fees and expenses associated with
local counsel. The Indemnifying Party shall not be liable under Section 9.1 for
any settlement effected without its written consent, which consent will not be
unreasonably withheld or delayed, of any claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder.
SECTION 10
Expenses
The UBL and the Shareholders shall each bear their own legal and other
expenses and costs incurred in connection with the negotiation and execution of
this Agreement and each other Ancillary Agreement and the transactions
contemplated hereby and thereby; provided, that the Corporation may reimburse
the Shareholders for up to $15,000 of such expenses and costs.
SECTION 11
Consent to Transaction
By execution of this Agreement, each of the Shareholders and the UBL
hereby consents to the transaction contemplated by this Agreement and the
Amended Articles pursuant to Sections 23B.07.040 and 23B.08.210 of the
Washington Business Corporation Act.
17.
18
SECTION 12
Miscellaneous
12.1 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with, the laws of the State of California without regard
to the principles thereof relating to conflict of laws. Each of the parties
hereby submits to personal jurisdiction and waives any objection as to venue in
the County of Los Angeles, State of California. Service of process on the
parties in any action arising out of or relating to this Agreement shall be
effective if mailed to the parties in accordance with Section 12.4 hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights under this Agreement.
12.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of and be binding upon
the successors and assigns of the parties.
12.3 Entire Agreement. This Agreement (including any Exhibits hereto) and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
12.4 Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any of the
parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged (including by recognized overnight
courier service) or by registered or certified mail, return receipt requested,
postage prepaid, or by telecopy and confirmed by telecopy answerback addressed
as follows:
If to the Corporation or ▇▇▇▇:
▇▇▇▇▇ ▇▇▇▇
Imusic, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
18.
19
with copies to:
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ de Regt
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇▇▇▇
3719 ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the UBL:
The Ultimate Band List, LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
19.
20
and to:
▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback, or
three (3) business days after the same shall have been deposited with the United
States mail.
12.5 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party to this Agreement, upon any breach or
default of another party under this Agreement, shall impair any such right,
power or remedy of such party nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring.
12.6 Severability. In case any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired thereby and such
remaining provisions shall be given effect, as nearly as may be, to carry out
the intent of the parties.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
12.8 Amendment. No amendment or waiver of any provision of this Agreement
shall in any event be effective unless the same shall be in writing and signed
by the UBL and the Shareholders, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that ▇▇▇▇▇▇▇▇ hereby grants to ▇▇▇▇ a limited
irrevocable power of attorney to act as the agent and attorney-in-fact for such
Shareholder, without power of substitution, for the sole purpose of approving
any amendments to or waivers of this Agreement on behalf of such Shareholder,
but other than an amendment or waiver pertaining to this Agreement which would
amend the liability of such Shareholder for breaches of representations and
warranties under this Agreement, or the Consideration to be paid to such
Shareholder as specified on the signature page to this Agreement, it being
expressly understood and agreed that this limited, irrevocable power of attorney
is coupled with an interest. No action taken pursuant to this Agreement,
including, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action, of compliance with
20.
21
any representations, warranties, covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any preceding or succeeding breach,
and no failure by any party to exercise any right or privilege hereunder shall
be deemed a waiver of such party's rights or privileges hereunder or shall be
deemed a waiver of such party's rights to exercise the same at any subsequent
time or times hereunder.
12.9 Remedies. Except as provided in the penultimate sentence of Section
9.1, (a) the UBL and the Shareholders shall be entitled to specific performance,
injunctive relief or any other equitable remedy against the other, as
applicable, without the posting of a bond, or proof of actual damages, in the
event of breach or threatened breach of any provision of this Agreement and (b)
each of the parties to this Agreement agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement, and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate. In any
action or proceeding brought to enforce any provision of this Agreement or where
any provision hereof is validly asserted as a defense, the successful party
shall be entitled to recover reasonable attorneys fees in addition to any other
available remedy.
21.
22
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first written above.
UBL:
THE ULTIMATE BAND LIST, LLC,
a California limited liability company
By:
---------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Co-Chief Executive Officer
Number Cash Shares
of Units Consideration Exchanged Signature, Name and Address
--------- ------------- --------- ---------------------------
392.13 $70,000 540,000 ▇▇▇▇:
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇
Imusic, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
None $40,000 5,455 ▇▇▇▇▇▇▇▇:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
3719 ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
22.
23
EXHIBIT INDEX
EXHIBIT A Schedule of Exceptions (▇▇▇▇)/Financial Information
EXHIBIT B Schedule of Exceptions (▇▇▇▇▇▇▇▇)
EXHIBIT C Schedule of Exceptions (UBL)
EXHIBIT D Loan Agreement
EXHIBIT E ▇▇▇▇ Employment Agreement
EXHIBIT F ▇▇▇▇▇ Employment Agreement
EXHIBIT G Third Amendment
EXHIBIT H Amended Articles
EXHIBIT I Release Statements
24
EXHIBIT A
SCHEDULE OF EXCEPTIONS
(▇▇▇▇)
3.6 Financial Information. See Section 3.19 of this Schedule of
Exceptions. In addition, the Corporation has certain contractual
responsibilities, obligations and rights in connection with the following:
(a) a $10,000 line of credit with U.S. Bank of Washington
(approximately $7,000 outstanding and payable as of the date hereof);
(b) contracts with ASCAP, BMI, ▇▇▇▇▇▇▇▇▇.▇▇▇ and FLYCAST; and
(c) letters of intent and other agreements with TVMV AD SALES and
CDNOW.
3.7 Contracts and Leases. See Sections 3.6 and 3.19 of this
Schedule of Exceptions.
3.8 Material Liabilities; Absence of Changes. See Sections 3.6 and
3.19 of this Schedule of Exceptions. In addition:
(a) the Corporation may have certain contingent liability to its
former law firm for legal services, the amount of which liability is currently
unknown (but is not anticipated to exceed $30,000.00).
(b) the Corporation is in the process of negotiating and
executing a three year lease (with option to renew for one year) for
approximately 2,180 square feet of office space in Seattle, Washington,
approximately $16.30 per square foot plus parking and maintenance charges.
3.20 No Conflict of Interest. As disclosed in its financial statements,
the Corporation's founding shareholder, ▇▇▇▇▇ ▇▇▇▇, has made certain loans to
the Corporation in the approximate aggregate principal amount of $50,000.
24.
25
EXHIBIT B
SCHEDULE OF EXCEPTIONS
(▇▇▇▇▇▇▇▇)
None.
25.