EXHIBIT 10.1
Execution Copy
STOCK PURCHASE
AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 22, 2008, by and
among FLMG Holdings Corp., a Delaware corporation and subsidiary of
Ticketmaster (the “ Purchaser ”), MM Investment
Inc., a Delaware corporation (“ MMI ”) and WMG
Church Street Limited, an English company (“ WMG Church ” and, together
with MMI, the “ Sellers ”).
R E
C I T A L S :
A. The Sellers are the
owners of shares of issued and outstanding Common Stock (as defined
herein) of Front Line Management Group, Inc. (the “
Company ”).
B. Upon the terms and
conditions set forth in this Agreement, (i) the Purchaser wishes to
purchase, and MMI wishes to sell, 771.91475 shares of Common Stock
(the “ MMI Shares ”), which are beneficially and
of record owned by MMI, and (ii) the Purchaser wishes to purchase,
and WMG Church wishes to sell, 51,064.6365 shares of Common Stock
(the “ WMG Church Shares ”), which are beneficially and of record
owned by WMG Church, for an aggregate purchase price for the MMI
Shares and the WMG Church Shares (collectively referred to herein
as the “ Purchased Shares ”) of one
hundred twenty-three million dollars ($123,000,000).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions .
(a) As used in this Agreement the following terms have the meanings
indicated:
“ Affiliate ” means any Person who is an
“affiliate” as defined in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.
“ Azoff Trust ” means The Azoff Family Trust of
1997.
“ Business Day ”
means any day other than a Saturday, Sunday or other day on which
commercial banks in the State of New York are authorized or
required by law or executive order to close.
“ Claim ” means any action, suit, proceeding,
claim, audit, complaint, dispute, arbitration or investigation of
any nature.
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“ Closing ” has the meaning set forth in
Section 2.3(a) .
“ Closing Date ” has the meaning set forth in
Section 2.3(a) .
“ Code ” means the Internal Revenue Code of
1986, as amended.
“ Common Stock ”
means common stock of the Company, par value $0.01 per
share.
“ Company ” has the meaning set forth in Recital
A.
“ Contract ” means any contract, agreement,
commitment, arrangement, lease, license, indenture and any other
legally binding arrangement, whether oral or written.
“ Contractual Obligation ” means, as to any Person, any Contract
to which such Person is a party or by which it or any of its
property is bound.
“ Determination ” means a settlement, compromise or other
agreement with the relevant Governmental Authority, whether
contained in an Internal Revenue Service Form 870 or other
comparable form, or otherwise, or such procedurally later event,
such as a closing agreement with the relevant Governmental
Authority, and agreement contained in Internal Revenue Service form
870-AD or other comparable form, an agreement that constitutes a
“determination” under Section 1313(a)(4) of the Code, a
deficiency notice with respect to which the period for filing a
petition with the Tax Court or the relevant state, local or foreign
tribunal has expired or a decision of any court of competent
jurisdiction that is not subject to appeal or as to which the time
for appeal has expired.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.
“ Governmental Authority ” means the government of any nation,
state, city, locality or other political subdivision thereof, any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any
court.
“ Indemnified Party ” has the meaning set forth
in Section 8.3(a) .
“ Indemnifying Party ” has the meaning set forth
in Section 8.3(a) .
“ Lien ” means any mortgage, deed of trust,
pledge, hypothecation, claim, right of first refusal, option,
charge, title defect, easement, right of way, restriction,
encroachment, survey defect, assignment, encumbrance, lien
(statutory or other) or preference, priority, security interest of
any kind or nature whatsoever (excluding preferred stock and equity
related preferences).
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“ Loss ” means any and all damages, losses,
deficiencies, liabilities (whether accrued, contingent or
otherwise), obligations, diminution in value, penalties, judgments,
settlements, claims, payments, fines, interest, costs and expenses
(including the costs and expenses of any and all actions and
demands, assessments, judgments, settlements and compromises
relating thereto and the reasonable costs and expenses of
attorneys’, accountants’, consultants’ and other
professionals’ fees and expenses incurred in the
investigation or defense thereof or the enforcement of rights
hereunder); provided , however , that for purposes
hereof, a Loss shall be deemed to be net of insurance proceeds
received by an Indemnified Party on or before the date of the final
determination of Loss with respect to a Third Party Claim or
pursuant to Section 8.4 with respect to a claim other than a
Third Party Claim (in each case, without giving effect to this
proviso).
“ Material Adverse Effect ” means, as to any Person, any changes or
effects that, individually or in the aggregate, are materially
adverse to the business, assets, liabilities, condition (financial
or otherwise), prospects or results of operations of such Person or
on the ability of such Person to consummate the transactions
contemplated hereby.
“ MMI ” has the meaning set forth in the
preamble.
“ MMI Shares ” has the meaning set forth in
Recital B.
“ MSG ” has the meaning set forth in Section
6.7 .
“ Orders ” has the meaning set forth in
Section 3.2 .
“ Person ” means any individual, firm,
corporation, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, limited liability
company, Governmental Authority or other entity of any kind, and
shall include any successor (by merger or otherwise) of such
entity.
“ Purchase Price ” has the meaning set forth in
Section 2.2 .
“ Purchased Shares ” has the meaning set forth
in Recital B.
“ Purchaser ” has the meaning set forth in the
preamble.
“ Purchaser Indemnitees ” has the meaning set
forth in Section 8.1 .
“ Requirements of Law ” means, as to any Person, any law,
statute, treaty, rule, regulation, right, privilege, qualification,
license or franchise or determination of an arbitrator or
Governmental Authority or stock exchange, in each case applicable
or binding upon such Person or any of its property or to which such
Person or any of its property is subject or pertaining to any or
all of the transactions contemplated or referred to
herein.
“ Second Amended and Restated Stockholders Agreement
” means the Second Amended and Restated Stockholders
Agreement, dated as of June 9, 2008, by and
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among the Company, Purchaser, Ticketmaster (as assignee of
IAC/InterActiveCorp), the Azoff Trust, MMI, WMG Church and Madison
Square Garden, L.P.
“ Securities Act ” means the Securities Act of 1933, as
amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.
“ Sellers ” has the meaning set forth in the
preamble.
“ Seller Indemnitees ” has the meaning set forth
in Section 8.2 .
“ Stock Equivalents ” means any security or obligation which
is by its terms, whether directly or indirectly, convertible into
or exchangeable or exercisable for shares of capital stock of the
Company, and any option, warrant or other subscription or purchase
right with respect to such capital stock.
“ Subsidiaries ”
means, as of the relevant date of determination, with respect to
any Person, a corporation or other Person of which 50% or more of
the voting power of the outstanding voting equity securities or 50%
or more of the outstanding economic equity interest is held,
directly or indirectly, by such Person. Unless otherwise qualified,
or the context otherwise requires, all references to a
“Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the
Company.
“ Third Party Claim ” has the meaning set forth
in Section 8.3(a) .
“ WMG Church ” has the meaning set forth in the
preamble.
“ WMG Church Shares ” has the meaning set forth
in Recital B.
“ WMG Purchase Agreement ” has the meaning set
forth in Section 7.5 .
(b) Unless the context clearly
requires otherwise, the words “hereof,”
“herein,” and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
References herein to a specific Article, Section, Annex or Exhibit
shall refer, respectively, to Articles, Sections, Annexes or
Exhibits of this Agreement, unless the express context otherwise
requires. Wherever the word “include,”
“includes,” or “including” is used in this
Agreement, it shall be deemed to be followed by the words
“without limitation” unless clearly indicated
otherwise.
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ARTICLE II
PURCHASE AND SALE OF THE PURCHASED SHARES
2.1 Purchase and Sale of the
Purchased Shares .
(a) Subject
to the terms and conditions herein set forth, MMI agrees to sell to
the Purchaser, and the Purchaser agrees to purchase from MMI, on
the Closing Date, the MMI Shares.
(b) Subject
to the terms and conditions herein set forth, WMG Church agrees to
sell to the Purchaser, and the Purchaser agrees to purchase from
WMG Church, on the Closing Date, the WMG Church Shares.
2.2
Purchase Price .
The total purchase price for the Purchased Shares shall be one
hundred twenty-three million dollars ($123,000,000) (the “
Purchase Price ”).
2.3
Closing .
(a) The
closing of the sale and purchase of the Purchased Shares (the
“ Closing
”) shall take place at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison LLP, 1285 Avenue of the Americas, New York,
New York 10019-6064, at 10:00 a.m., local time, on the second (2nd)
Business Day following the date upon which the conditions set forth
in Articles V and
VI shall be satisfied or waived in accordance with this
Agreement, or at such other time, place and date that the Sellers
and the Purchaser may agree in writing (the “ Closing
Date ”).
(b) On
the Closing Date:
(i) the
Sellers shall deliver to the Purchaser, certificates representing
the Purchased Shares, duly endorsed in blank or accompanied by
stock powers duly executed in blank, in proper form for
transfer;
(ii) the
Sellers shall cause the Company to register the Purchased Shares in
the stock register of the Company in the name of the Purchaser, and
shall provide evidence reasonably satisfactory to the Purchaser of
such registration; and
(iii)
the Purchaser shall pay the Purchase Price by wire transfer of
immediately available funds to the bank account designated by the
Sellers to the Purchaser prior to the Closing Date.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The
Sellers, jointly and severally, represent and warrant to the
Purchaser as follows:
3.1
Due Authority; Binding Effect .
(a) MMI
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. MMI has all
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) WMG
Church is a company duly organized, validly existing and in good
standing under the laws of England and Wales. WMG Church has all
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(c) This
Agreement has been duly executed and delivered by MMI and WMG
Church. This Agreement constitutes, and each of the other
agreements, instruments and documents of MMI and WMG Church
contemplated hereby will constitute when executed and delivered by
MMI and WMG Church, as applicable, the legal, valid and binding
obligations of MMI and WMG Church, as applicable, enforceable
against it in accordance with their terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at
law or in equity).
3.2
Non-Contravention . The
execution, delivery and performance by each Seller of this
Agreement and the transactions contemplated hereby (a) have been
duly authorized by all necessary corporate or equivalent action of
such Seller, (b) do not contravene the terms of the organizational
documents of such Seller, (c) do not violate, conflict with or
result in any breach, default or contravention of (or with due
notice or lapse of time or both would result in any breach, default
or contravention of), or the creation of any Lien under, any
Contractual Obligation of such Seller or any Requirement of Law
applicable to such Seller (except where such breach, default or
contravention would not reasonably be expected to have, in each
case, individually or in the aggregate, a Material Adverse Effect
on such Seller) and (d) do not violate any judgment, injunction,
writ, award, decree or order of any nature of any Governmental
Authority (collectively, “ Orders ”)
against, or binding upon, such Seller.
3.3 Governmental Authorization; Third
Party Consents . Except for the reporting requirements under
the Exchange Act, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, and no lapse of a
waiting period under any Requirement of Law, is necessary or
required in connection with the execution, delivery
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or performance by, or enforcement against, each Seller of this
Agreement or the transactions contemplated hereby.
3.4 Title to Purchased Shares .
(a) MMI owns beneficially
and of record, free and clear of any Liens (other than those
arising under the Second Amended and Restated Stockholders
Agreement), the MMI Shares. Upon MMI’s delivery of the MMI
Shares and payment therefor pursuant hereto, good and valid title
to such MMI Shares, free and clear of all Liens, other than
restrictions on transfer under applicable state and federal
securities laws or arising under the Second Amended and Restated
Stockholders Agreement, will pass to the Purchaser.
(b) WMG Church owns
beneficially and of record, free and clear of any Liens (other than
those arising under the Second Amended and Restated Stockholders
Agreement), the WMG Church Shares. Upon WMG Church’s delivery
of the WMG Church Shares and payment therefor pursuant hereto, good
and valid title to such WMG Church Shares, free and clear of all
Liens, other than restrictions on transfer under applicable state
and federal securities laws or arising under the Second Amended and
Restated Stockholders Agreement, will pass to the Purchaser.
(c) Except under the
Second Amended and Restated Stockholders Agreement, the Sellers (i)
are not a party to any, and have not granted to any other Person
any, and there are no, options, warrants, conversion privileges,
subscription or purchase rights or other rights outstanding as of
the date of this Agreement to purchase or otherwise acquire the
Purchased Shares, any Stock Equivalents or any other securities of
the Company and (ii) are not a party to any voting agreement,
voting trust, proxy or other agreement or understanding with
respect to the voting of any of the Purchased Shares.
3.5 Broker’s, Finder’s or
Similar Fees . There are no brokerage commissions,
finder’s fees or similar fees or commissions payable by the
Sellers in connection with the transactions contemplated hereby
based on any Contractual Obligation of the Sellers or any action
taken by the Sellers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as
follows:
4.1 Existence and Power . The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware. The Purchaser has all requisite corporate
power and authority to execute, deliver and perform its obligations
under this Agreement.
4.2 Authorization; No Contravention
. The execution, delivery and
performance by the Purchaser of this Agreement and the transactions
contemplated
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hereby (a) have been duly authorized by all necessary corporate
action of the Purchaser, (b) do not contravene the terms of the
certificate of incorporation or by-laws of the Purchaser, (c) do
not violate, conflict with or result in any breach or contravention
of (or with due notice or lapse of time or both would result in any
breach, default or contravention of), or the creation of any Lien
under, any Contractual Obligation of the Purchaser or any
Requirement of Law applicable to the Purchaser (except where such
breach, default or contravention would not reasonably be expected
to have, in each case, individually or in the aggregate, a Material
Adverse Effect on the Purchaser), and (d) do not violate any Orders
against, or binding upon, the Purchaser.
4.3 Binding Effect . This Agreement
has been duly executed and delivered by the Purchaser, and this
Agreement constitutes, and each of the other agreements,
instruments and documents of the Purchaser contemplated hereby will
constitute when executed by the Purchaser, the legal, valid and
binding obligations of the Purchaser, enforceable against it in
accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and
by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in
equity).
4.4 Governmental Authorization; Third
Party Consents . Except for the reporting requirements under
the Exchange Act and the requirements of Nasdaq applicable to the
Purchaser’s parent corporation, no approval, consent,
compliance, exemption, authorization or other action by, or notice
to, or filing with, any Governmental Authority or any other Person,
and no lapse of a waiting period under any Requirement of Law, is
necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Purchaser of this
Agreement or the transactions contemplated hereby.
4.5 Purchase for Own Account .
(a) The Purchaser is an
“accredited investor” as that term is defined in Rule
501 of Regulation D under the Securities Act.
(b) The Purchaser is
acquiring the Purchased Shares for investment and not with a view
toward, or for sale in connection with, any distribution thereof,
nor with any present intention of distributing or selling the
Purchased Shares. The Purchaser agrees that the Purchased Shares
may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under
the Securities Act and any applicable state securities laws, except
pursuant to an exemption from such registration under such act and
such laws and in compliance with the Second Amended and Restated
Stockholders Agreement.
(c) The Purchaser is able
to bear the economic risk of holding the Purchased Shares for an
indefinite period, and has knowledge and experience in financial
and business matters such that it is capable of evaluating the
risks of an investment in the Purchased Shares.
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4.6 Broker’s, Finder’s or
Similar Fees . There are no brokerage commissions,
finder’s fees or similar fees or commissions payable by the
Purchaser in connection with the transactions contemplated hereby
based on any Contractual Obligation with the Purchaser or any
action taken by the Purchaser.
ARTICLE V
CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO CLOSE
The obligation of the Purchaser to purchase the Purchased Shares
and to pay the Purchase Price at the Closing shall be subject to
the satisfaction as determined by, or waiver by, the Purchaser of
the following conditions on or before the Closing Date:
5.1 Representations and Warranties
. The representations and
warranties of the Sellers contained in Article III
shall be true and correct in all material respects (except (x) to
the extent such representations and warranties are specifically
made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date and (y)
for any such representations and warranties which are qualified by
their terms by a reference to materiality or Material Adverse
Effect, which representation as so qualified shall be true and
correct in all respects) at and on the Closing Date as if made at
and on such date.
5.2 Compliance with this Agreement
. Each of the Sellers shall have
performed and complied in all material respects with all of its
agreements set forth herein that are required to be performed by
such Seller on or before the Closing Date.
5.3 Officer’s Certificate
. The Purchaser shall have
received a certificate from each of the Sellers in form and
substance reasonably satisfactory to the Purchaser, signed by an
appropriate officer of such Seller, dated the Closing Date,
certifying as to the matters set forth in Sections
5.1 and 5.2 .
5.4 Purchased Shares . The Sellers
shall have delivered to the Purchaser certificates representing the
Purchased Sha
