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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): JUNE 30, 1995
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VIDEO JUKEBOX NETWORK, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 0-15445 59-2605267
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
1221 COLLINS AVENUE, MIAMI BEACH, FLORIDA 33139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 674-5000
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Set forth herein are the exhibits to Video Jukebox Network, Inc.'s
Form 8-K, dated June 30, 1995, as filed with the Securities and Exchange
Commission on July 12, 1995.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Stock Purchase Agreement, dated June 30, 1995, among the
Company, VJNIL and Vincent Paul Monsey.
99.2 Secured Loan Agreement, dated June 30, 1995, between VJNIL and
TM/Video.
99.3 Secured Promissory Note of VJNIL, with TM/Video as Payee.
99.4 Secured Loan Agreement, dated June 30, 1995, between VJNIL and
the Company.
99.5 Secured Promissory Note of VJNIL, with the Company as Payee.
99.6 Debenture, dated June 30, 1995, between VJNIL and the Company.
99.7 Debenture, dated June 30, 1995, between VJNIL and TM/Video.
99.8 Intercreditor Agreement, dated June 30, 1995, among the
Company, TM/Video, VJNIL and Atlantic American Capital Corp.
99.9 Stock Purchase Agreement, dated June 30, 1995, among the
Company, TM No.2 and VJNIL.
99.10 License Agreement dated June 30, 1995, between the Company and
VJNIL.
99.11 Administrative Services Agreement, dated June 30, 1995, among
the Company, VJNIL and TM No.2.
99.12 Secured Promissory Note of TM No.2, with VJNIL as Payee.
99.13 Stockholders Agreement, dated June 30, 1995, among the
Company, VJNIL and TM No.2.
99.14 Letter Agreement, dated June 30, 1995, between the Company and
TM No.2.
99.15 Letter Agreement, dated June 30, 1995, between the Company and
TM/Video.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VIDEO JUKEBOX NETWORK, INC.
(Registrant)
Date: August 10, 1995 By: /s/ Luann M. Hoffman
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Luann M. Hoffman, Chief
Financial and Administrative
Officer and Secretary
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8-K
EXHIBIT 99.1
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STOCK PURCHASE AGREEMENT
AMONG
VINCENT PAUL MONSEY,
VIDEO JUKEBOX NETWORK, INC.
AND
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
JUNE 30, 1995
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated June 30, 1995,
among VINCENT PAUL MONSEY, an individual who resides at 48 Holland Villas Road,
London W14 ("Monsey"), VIDEO JUKEBOX NETWORK, INC., a Florida corporation with
its principal offices located at 1221 Collins Avenue, Miami, Florida 33139
("VJN"), and VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED whose registered
office is at Imperial House, 11-13 Young Street, Kensington, London W8 5EH (the
"Company").
RECITALS:
A. Monsey is the legal and beneficial owner of fifty-four (54)
'B' ordinary shares (the "Monsey Shares") of the issued and outstanding capital
stock of the Company.
B. Monsey has legal title to thirty-six (36) 'B' ordinary
shares (the "Nominee Shares") of the issued and outstanding capital stock of
the Company, which are held by Monsey on a nominee basis for the benefit of
VJN, pursuant to the terms of that certain Declaration of Trust and Nomineeship
(the "Declaration of Trust"), dated March 4, 1992.
C. Monsey desires to sell and deliver all of the Monsey Shares
to VJN, and VJN wishes to purchase the Monsey Shares for a total consideration
of two hundred twenty-five thousand (225,000) shares of the common stock, par
value $0.001 per share, of VJN ("VJN Common Stock"); and
D. Monsey desires to transfer legal title to the Nominee Shares
to VJN, for no consideration, and VJN wishes to receive legal title to the
Nominee Shares.
NOW, THEREFORE, the parties hereto agree as follows:
I
PURCHASE AND SALE OF SECURITIES
Subject to the terms and conditions of this Agreement, Monsey hereby
sells to VJN, and VJN hereby purchases from Monsey, all of the Monsey Shares.
In exchange for the Monsey Shares, VJN hereby delivers to Monsey two hundred
twenty-five thousand (225,000) shares of VJN Common Stock (the "VJN Shares").
II
TRANSFER OF NOMINEE SHARES
Subject to the terms and conditions of this Agreement, Monsey hereby
transfers legal title to the Nominee Shares to VJN, for no consideration, and
VJN hereby accepts title to such Nominee Shares. In doing so, Monsey, VJN and
VJNIL hereby acknowledge
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that the following agreements are hereby terminated and are of no further force
and effect: (a) the Shareholders Agreement, dated March 4, 1992, among Monsey,
VJN and VJNIL; and (b) a letter from VJN to Monsey, dated March 4, 1992,
regarding the two "C" ordinary shares of the issued and outstanding capital
stock of the Company which are held by VJN; and (c) the Declaration of Trust.
III
REPRESENTATIONS AND WARRANTIES OF MONSEY
Monsey hereby represents and warrants to VJN the following:
A. Good Title to Shares. As of the date hereof, Monsey is,
and, at the time of the delivery of the Monsey Shares, Monsey shall be: (i) the
legal and beneficial owner of the Monsey Shares; and (ii) the legal owner of
the Nominee Shares. Monsey has the full right, power and authority to sell,
transfer and deliver the Monsey Shares and to transfer legal title in the
Nominee Shares to VJN, free and clear of any liens, claims, charges,
debentures, options, pledges, trust arrangements, rights of first refusal,
first offer or other preferential purchase rights, security interests,
restrictions or other encumbrances whatsoever (the "Liens"). At the closing of
the transactions contemplated by this Agreement, VJN shall receive good and
marketable title to the Monsey Shares and Nominee Shares, free and clear of all
Liens. There are no options, warrants or other rights outstanding with respect
to or for the purchase of, nor any outstanding securities convertible into, any
of the Monsey Shares or Nominee Shares.
B. Consents. To Monsey's knowledge, after due inquiry, and
save as otherwise set out or referred to in all other documents recording the
transactions herein contemplated, there are no required consents which must be
obtained from any third party prior to the consummation of the transactions
contemplated herein and neither the execution, delivery and performance of this
Agreement by Monsey nor the consummation of the transactions contemplated
herein will: (i) conflict with or result in a breach or termination of any
material provision of, or constitute a default under, or confer upon a third
party any right to terminate, any indenture, mortgage, deed of trust, lease,
contract, agreement or other instrument to which Monsey or the Company is a
party, or by which Monsey or the Company is bound; or (ii) violate or conflict
with any law or regulation, or order or decree of any court or governmental
instrumentality, applicable to Monsey or the Company.
C. Rights to Acquire Capital Stock of the Company. Monsey
has not offered or granted to any third party any rights in or to any options,
subscriptions, warrants, calls, contracts, convertible securities, or other
rights, agreements, arrangements, or commitments to acquire any capital stock
of the Company.
D. Authority of Monsey. Monsey has full power and
capacity to enter into this Agreement, to carry out the obligations hereunder
and to consummate the
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transactions contemplated hereby. This Agreement has been duly executed and
delivered by Monsey and (assuming due authorization, execution and delivery by
VJN and the Company) constitutes the legal, valid and binding obligation of
Monsey, enforceable against Monsey in accordance with its terms, except as such
enforcement may be subject to (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
E. ITC License. Monsey is not aware of any facts or
circumstances which would give the Independent Television Commission grounds to
revoke the License to Provide a Licensable Programme Service under Part I of
the Broadcasting Act 1990 (License No. LPS044) granted to the Company by the
Independent Television Commission on February 11, 1992, as a result of the
transactions contemplated hereby.
F. Obligations Owed to Monsey. Except for the claims
obligations set forth in Schedule III.F. hereto, there are no outstanding
claims or obligations owed by the Company to Monsey or his affiliates, whether
monetary or otherwise, whether accrued or contingent, including without
limitation, for salary, bonus or employee benefits.
G. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Monsey.
H. Due Diligence. Monsey has received and examined VJN's
Form 10-KSB for the fiscal year ended December 31, 1994, and Form 10-QSB for
the quarter ended March 31, 1995, which were filed with the United States
Securities and Exchange Commission.
I. Investor Status. Monsey is a sophisticated investor and has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in VJN represented
by the shares of VJN's common stock received and to be received by Monsey
pursuant to Section I hereof. Monsey has had such opportunity as he deems
necessary or appropriate to obtain information from VJN and its representatives
to permit him to evaluate the merits and risks of the acquisition of the VJN
Shares.
J. Investment Intent. Monsey is acquiring the VJN Shares for
his own account and for investment and not with a present view towards, or for
sale in connection with, any distribution thereof, nor with the present
intention of distributing or selling such shares.
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K. Disclosure. No representation or warranty by Monsey in this
Agreement or any other document delivered to VJN hereunder, contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statement or facts contained therein, in light of the circumstances
under which they were made, not misleading.
IV
REPRESENTATIONS AND WARRANTIES OF VJN
VJN hereby warrants and represents to Monsey as follows:
A. Organization, Qualification, Etc.. VJN is a duly organized
and validly existing corporation in good standing under the laws of the State
of Florida.
B. Enforceability. VJN has full right, power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement and all other agreements in connection with the
transactions contemplated herein have been duly and validly executed and
delivered by VJN, and are valid and binding agreements of VJN, enforceable in
accordance with their respective terms, except that such enforceability may be
subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (b) the remedy of specific performance and injunction
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
C. The VJN Shares. All of the VJN Shares delivered to Monsey
are duly authorized and validly issued, fully paid, non-assessable, with all
transfer taxes of any kind prepaid and free and clear of all Liens.
D. Corporate Authority. The execution and delivery of this
Agreement and the performance of all of the transactions contemplated to be
performed by VJN pursuant to this Agreement have been duly authorized by all
necessary corporate action of VJN (and constitutes the legal, valid and legally
binding obligation of VJN enforceable against VJN in accordance with its terms)
and do not and will not conflict with or violate any provision of law or
regulation, or any writ, order or decree of any court, governmental regulatory
authority or agency or any applicable license, franchise, certificate, permit,
authorization, approval or consent, which would have a material adverse effect
on VJN, or any provision of VJN's Third Amended and Restated Articles of
Incorporation (the "Articles of Incorporation") or Bylaws and do not and will
not result in a breach of, or constitute a default under or require any consent
pursuant to any agreement, contract, arrangement or understanding to which VJN
is a party, which would have a material adverse effect on VJN. The execution
and delivery of this Agreement and the performance of all the transactions
contemplated to be performed
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by VJN: (i) requires no consent, approval or authorization from any court,
governmental regulatory authority or agency or any other person; and (ii) does
not result in the execution or imposition of any lien, charge or encumbrance
upon any property of VJN under any indenture or instrument to which VJN is a
party, or by which any of VJN's property or business may be bound that, in any
such case, would have a material adverse effect on VJN.
E. Litigation. To VJN's knowledge and except as set forth in
Schedule IV.E., there is no legal proceeding, action or investigation before
any court or before or by any public body or board, or any judgment, decree,
award, writ, injunction, stipulation or order of such court, public body or
board, pending or, to VJN's knowledge, threatened to which VJN is or may be
made a party, or to which the business or property of VJN is the subject, the
outcome of which would have a material adverse effect on the business or
property of VJN.
F. Due Diligence. VJN acknowledges that it has not entered
into this Agreement in accordance with any representations or warranties made
by Monsey, save those expressly set forth in this Agreement.
G. Representations Complete. No representation or warranty of
VJN made in this Agreement or in any document or certificate furnished pursuant
to this Agreement or in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make any statement of fact contained herein
or therein not misleading, except that any such document or certificate which
is dated speaks as of the date stated and not the present.
V
CERTAIN DELIVERIES
A. Deliveries to Monsey. Monsey acknowledges having
received the following on or before the date hereof:
1. A certificate representing the VJN Shares registered
in the name of Monsey, in substantially the form of Exhibit "A" hereto; and
2. A certificate dated on the date hereof and executed
by the Secretary of the meeting of the Board of Directors of VJN (the "VJN
Board") certifying that attached thereto is a true and correct copy of all the
resolutions of the VJN Board approving the execution, delivery and performance
of this Agreement by VJN.
B. Deliveries to VJN. VJN acknowledges having received, on or
before the date hereof:
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1. A duly executed stock transfer form in the name of
VJN relating to the Monsey Shares, together with the relevant share
certificates; and
2. A duly executed stock transfer form in the name of
VJN relating to the Nominee Shares, together with the relevant share
certificates.
VI
RESTRICTIVE COVENANTS
A. Restrictions. Monsey hereby agrees and confirms that
during the course of his employment by the Company prior to the date hereof he
has obtained knowledge of, and during the course of his appointment under the
Employment Agreement between the Company and Monsey of even date hereof (the
"Employment Agreement"), he is likely to obtain knowledge of trade secrets and
other confidential information with regard to the business and financial
affairs of the Company and VJN, as well as their customers and suppliers, all
of which are not in the public domain including, without limitation, financial
data, computer software and hardware, intellectual property rights and present
and future plans ("Confidential Information"). Accordingly, Monsey hereby
undertakes to and covenants with VJN that in order to protect the interests of
VJN in its goodwill and business connections and the Confidential Information:
1. he shall not, at any time after the Termination Date
(as such term is defined in the Employment
Agreement), use or procure the use of the name of
the Company or VJN, whether or not in connection
with his own or any other name in any way calculated
to suggest that he continues to be connected with
the business of the Company or VJN or in any way
hold himself out as having such connection;
2. he shall not, at any time after the date of this
Agreement (save by compulsion of law), use any
Confidential Information (other than for the
purposes of the Company or VJN) or disclose or
divulge any Confidential Information to any person
(other than to officers or employees of the Company
or VJN whose province it is to know the same) and
that he shall, at the expense of and if requested by
the Company or VJN, use reasonable endeavors to
prevent such use, divulgence or disclosure of any
Confidential Information by any other person;
provided that the provisions of this clause shall
cease to apply to Confidential Information which
enters the public domain other than directly or
indirectly by reason of the default of the Employee;
and
3. he shall not, at any time during the term of the
Employment Agreement and for six (6) months
thereafter (less any amount of
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time during which the Employee does not attend work
pursuant to Clause 2.2 of the Employment Agreement),
either on his own behalf, or on behalf of any
other person, directly or indirectly approach,
canvass, solicit or otherwise endeavor to entice
away any person, who is then or was at any time
during the twelve (12) month period prior to the
Termination Date, an employee of the Company or VJN
with access to Confidential Information (save for
Elizabeth Laskowski), or otherwise encourage any
such person to terminate his or his relationship
with the Company or VJN;
B. Severability. Each of the parties acknowledge and agree
that each of the restrictions contained in this Section VI are entirely
separate and independent and are reasonable and necessary for the protection of
the relevant interests. Nevertheless, if any provision or part thereof is held
invalid or unenforceable, this shall not affect the remaining provisions, all
of which shall remain in full force and effect. Furthermore, if any
restriction would be valid if the wording were amended or the period or scope
of the restriction reduced, such restriction shall apply with such
modifications as may be necessary to make it valid and effective.
VII
RESTRICTIONS ON TRANSFER
Monsey understands that the VJN Shares have not been registered under
the Securities Act of 1933 (the "Securities Act") and, therefore, cannot be
sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is
available; (ii) VJN has no obligation to register the VJN Shares under the
Securities Act; and (iii) the following legend will be placed on the
certificate representing the VJN Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER
SUCH ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, covenants and agreements contained
herein to be performed or complied with after the date hereof shall survive the
closing of this Agreement without limitation as to time.
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IX
INDEMNIFICATION
A. From the date hereof, Monsey and VJN shall indemnify and
hold harmless the other (the party seeking indemnification being referred to as
the "Indemnified Party") from and against any and all claims, losses,
liabilities and damages, including, without limitation, amounts paid in
settlement, reasonable costs of investigation and reasonable fees and
disbursements of counsel, arising out of or resulting from the inaccuracy of
any representation of warranty, or the breach of any covenant or agreement,
contained herein or in any instrument or certificate delivered pursuant hereto,
by the party against whom indemnification is sought (the "Indemnifying Party").
B. The Indemnified Party shall promptly notify the Indemnifying
Party in writing of any claim for indemnification, specifying in detail the
basis of such claim, the facts pertaining thereto and, if known, the amount, or
an estimate of the amount, of the liability arising therefrom. The Indemnified
Party shall provide to the Indemnifying Party as promptly as practicable
thereafter all information and documentation necessary to support and verify
the claim asserted and the Indemnifying Party shall be given reasonable access
to all books and records in the possession or control of the Indemnified Party
or any of its affiliates which the Indemnifying Party reasonably determines to
be related to such claim.
C. Any income tax or capital gains or stamp duty obligations of
Monsey resulting from this transaction or from the transfers of any beneficial
interest in the Monsey Shares from VJN to Monsey, shall be paid by Monsey.
X
MISCELLANEOUS
A. Amendments, Consents and Waivers. This Agreement may not be
amended, except by written agreement duly executed by the parties hereto and no
consent provided for herein or waiver of any condition or provision hereof
shall be effective unless evidenced by an instrument in writing, duly executed
by the party sought to be charged with such waiver or consent.
B. Specific Performance. In the event of a breach or
threatened breach by any party of its obligations under this Agreement, any
party injured or to be injured by such breach shall be entitled, without
prejudice to the rights and remedies otherwise available to such party, to
specific performance of any or all of the other party's obligations hereunder
and nothing contained in this Agreement shall be construed as limiting the
right of any party hereto to seek such specific performance by bringing suit in
a court of competent jurisdiction.
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C. Benefits; Assignment. The rights under this Agreement shall
not be assignable nor the duties delegable by any party without first obtaining
the written consent of the other party hereto. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person or entity,
other than the parties hereto and their successors in interest, any rights or
remedies under or by reason of this Agreement unless so stated expressly
hereunder. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
D. Controversies.
1. In the event of any controversy arising out of or
relating to this Agreement or a breach or alleged breach hereof, which the
parties are unable to resolve among themselves, the parties shall resolve the
dispute by arbitration pursuant to the provisions of 9 U.S.C. Section 1 et
seq., and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), by sending written notice to the other
party to such effect. The place of arbitration shall be Miami, Florida.
2. In the event of arbitration, within thirty (30) days
after receipt of a request to arbitrate a dispute, the parties shall appoint
one (1) arbitrator in accordance with AAA rules. The arbitrator shall be
impartial and unrelated, directly or indirectly, so far as employment or
services is concerned, to any of the parties or to any person or entity
directly or indirectly related to the parties. In any arbitration proceedings
involving any specialized area of knowledge or competence, the arbitrator shall
have substantial knowledge and experience in such specialized area as, for
example, in any dispute involving accounting procedures the arbitrator shall be
an independent certified public accountant. The arbitration proceedings shall
otherwise be governed by the rules of the AAA then in force.
3. The arbitrator shall investigate the facts and shall
hold a hearing or hearings if required at which the parties may present
evidence and arguments, be represented by counsel and conduct
cross-examination. In determining any question, matter or dispute before them,
the arbitrator shall apply the provisions of this Agreement, without varying
therefrom in any material respect. The arbitrator shall not have the power to
add to, modify or change any of the provisions of this Agreement. The
arbitrator shall render a written decision upon the matter presented to them by
a majority vote, and that decision shall be final and binding on the parties.
Judgment upon the decision rendered by such arbitration may be entered by any
court having jurisdiction thereof.
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4. The arbitrator shall determine in what proportion
the parties shall bear the fees and expenses of the arbitrator, and each party
shall bear the fees and expenses of its own counsel and other consultants.
E. Notices. All notices, requests, demands and other
communications called for or contemplated hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered or delivered by
registered or certified mail, return receipt requested, to the party to whom
addressed or its successors in interest at the address set forth in the first
paragraph of this Agreement, or at such other address as the party may
designate by written notice in the manner aforesaid.
F. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
G. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
H. Governing Law. This Agreement shall be construed as to both
validity and performance in accordance with and governed by the laws of the
State of Florida without regard to conflicts of laws principles thereof.
I. Waiver of Preemptive Rights. Monsey and the Company
hereby irrevocably waive any and all preemptive rights that they may have or
that may have been conferred on them (by whatever means) in relation to the
Monsey Shares or the Nominee Shares, including, without limitation, in relation
to any transfer by VJN, or any commitment by VJN to transfer, the Monsey Shares
prior to the time legal ownership of such shares is transferred to VJN.
J. Entire Agreement. This Agreement, including the schedules
and exhibits hereto, constitutes the entire agreement and understanding and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
K. Expenses. Except as otherwise provided in this Agreement,
the parties shall bear all of their own respective expenses relating to this
Agreement and the performance of their obligations hereunder.
L. Captions and Headings. Captions and section headings used
herein are for convenience of reference only and are not a part of this
Agreement and shall not be used to construe or interpret the provisions herein.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed on the date first above written.
VIDEO JUKEBOX NETWORK, INC.
By: /s/ Alan McGlade By: /s/ Vincent Paul Monsey
--------------------------------- -----------------------------
Name: Alan Mc Glade Vincent Paul Monsey
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Title: President and CEO
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VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
solely for purposes of section II
By: /s/ Elizabeth A. Laskowski
---------------------------------
Name: Elizabeth A. Laskowski
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Title: Director
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EXHIBIT "A"
[COPY OF SHARE CERTIFICATE]
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EXHIBIT III.F
Claims or Obligations
The Company owes salary to Monsey in respect of the current month's employment.
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SCHEDULE IV.E.
LITIGATION
AGAINST
VIDEO JUKEBOX NETWORK, INC.
On August 30, 1991, Video Jukebox Network, Inc. (the "Company") filed
a complaint (the "Complaint") against Donald L. Barone, Jr. ("Barone"), Kenneth
Trzecki, Harry Griendling and Healthcare Communications, Incorporated
(collectively, "HCI") in the Circuit Court of the Seventeenth Judicial Circuit
in and for Broward County, Florida. Harry Griendling has been dismissed from
the action with prejudice. The Complaint alleges that: (I) in or about August
1991, Barone, while an employee of the Company, wrongfully and intentionally
removed certain proprietary materials used in connection with the development
and marketing of an interactive employment television program owned by the
Company, as well as certain other property owned by and entrusted to the
Company by third parties which was used in connection with the development of
the interactive employment television program (collectively, the "Property");
and (ii) HCI fraudulently induced the Company to enter into a business
relationship with HCI for the purpose of financially exploiting the Company.
The Complaint sought the issuance of a prejudgment writ of replevin and a
temporary and permanent injunction, compensatory damages and other relief.
On September 3, 1991, the Court granted the Company's motions, issued
a prejudgment writ of replevin requiring return of the Property to the Company
during the pendency of the case, and issued a temporary injunction precluding
third parties from possessing, using and/or enjoying the benefits of the
Property.
On October 31, 1991, HCI filed an answer, affirmative defenses and
counterclaim against the Company for breach of contract and fraudulent
inducement. HCI also filed a third party summons and complaint against the
then President of the Company, alleging fraudulent inducement by him. HCI
denied all the material allegations contained in the Complaint and alleged
that: (I) the Company fraudulently induced HCI to enter into a business
relationship with the Company; (ii) the Company had no right of possession and
no ownership interest in the Property; and (iii) Barone had no authority to
transfer the Property owned by HCI to the Company. HCI also alleged that the
Property was developed pursuant to a joint venture agreement between HCI and
the Company and that the Company breached such agreement. The counterclaim
seeks compensatory damages and other relief from the Company, and the third
party complaint seeks compensatory damages and other relief from the then
President of the Company. The Company and its former President believe the
claims asserted by HCI are without merit. The Company and its former President
have denied HCI's allegations, moved to dismiss the claims and have been
vigorously defending the action while pursuing the Company's claims against
HCI. The Company has agreed to
-14-
<PAGE> 17
indemnify and hold harmless the former President of the Company for any costs
and liability incurred by him in this litigation.
HCI subsequently filed a motion to dissolve the orders granting the
Company the writ of replevin and temporary injunction. On October 8, 1991, the
Circuit Court dissolved the writ of replevin and temporary injunction. On
October 31, 1994, the Circuit Court determined that HCI was entitled to
attorneys fees in the amount of $22,665 and costs of $2,490. The Company paid
such sum from the $35,000 bond amount which had been deposited with the Circuit
Court in 1991. In the claim for damages for the wrongful replevin, Barone was
seeking damages for his claim of mental pain and suffering as a result of the
Company seeking the writ of replevin and executing such writ through the lawful
means of the Sheriff of Broward County. HCI was seeking: (I) attorneys' fees
in excess of $100,000 concerning the dissolution of the writ and for the
proceedings related to the issue of damages; and (ii) damages for loss of the
use of the property seized. The Circuit Court has determined that additional
damages, if any, as a result of the wrongful issuance of the prejudgment writ
of replevin and temporary injunction could not be determined until a final
judgement is rendered on the merits of the case.
On August 30, 1991, HCI filed a summons with notice (the "Summons") in
the State of New York Supreme Court in the County of Erie. In the Summons, HCI
threatened to file a complaint against the Company for purported damages of
$100 million for alleged tortious interference with contractual relations
between HCI and unidentified third parties, for negligent and intentional
misrepresentation and for breach of express and implied contract. The Summons
also states that HCI will seek a declaratory judgment to determine ownership
rights to the Property. However, since August 30, 1991, HCI has neither filed
a complaint against the Company nor taken any further action. The Company
believes that the allegations of HCI as stated in the Summons are without
merit. The Company will fully and vigorously respond to such allegations if a
formal complaint is filed against it by HCI.
-15-
<PAGE> 1
8-K
EXHIBIT 99.2
<PAGE> 2
________________________________________________________________________________
SECURED LOAN AGREEMENT
between
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED,
as Borrower,
and
TM/VIDEO INTERNATIONAL, INC.,
as Lender
________________________________________________________________________________
June 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Exhibit, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
AMOUNT AND TERMS OF THE LOAN
2.1. The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. The Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Funding of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5. Principal and Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6. Interest After Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7. Basis of Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8. Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9. Tax Liability on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10. Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.12. Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.13. Payments to Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.14. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
DOCUMENTS DELIVERED
3.1. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2. Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3. Other Transactional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5. Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Existence; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2. Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3. Title to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4. Consents or Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7. No Violations or Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8. Identity of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9. Permits, Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.11. Burdensome Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 4
<TABLE>
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4.12. Financial Statements and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.13. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.14. ITC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.15. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.16. Acquired Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.17. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.18. Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.19. Conduct of Business in the Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.20. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.21. True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
COVENANTS
5.1. Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4. Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.7. Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . 15
5.8. Maintenance of Existence, Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.9. Further Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.11. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.12. Limitations on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13. Limitation on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14. Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15. Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17. Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18. Continuing Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI
INDEMNIFICATION
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.2. Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
MISCELLANEOUS
8.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2. Currency Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.5. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
8.6. Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.7. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.10. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.12. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.13. Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.14. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.15. Jurisdiction; Service of Process; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 23
8.16. Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.17. Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
<PAGE> 6
SECURED LOAN AGREEMENT
THIS SECURED LOAN AGREEMENT (this "Agreement") is made and entered
into as of June 30, 1995 between TM/VIDEO INTERNATIONAL, INC., a Delaware
corporation ("Lender"), and VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(registered number 2643552), a company incorporated under the laws of England
and Wales ("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have agreed that Lender shall make a loan
to Borrower on the terms and conditions set forth herein; and
WHEREAS, in connection with such loan Borrower has agreed to grant to
Lender certain security interests as more fully described herein.
NOW, THEREFORE, in consideration of the premises set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lender and Borrower hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the
following terms and phrases shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person (other than, with respect to Lender, the Borrower) that directly,
or indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified Person; provided, however, that
an Affiliate shall not include a Competitor. "Control" (including the terms
"controlling," "controlled by" and "under common control with"), with respect
to the relationship between or among two or more Persons, means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"Bankruptcy" means (a) an adjudication of bankruptcy under the
U.S. Bankruptcy Reform Act of 1978, as amended, or any successor statute, (b)
the specified Person stops payment of, is deemed unable (under Section 123 of
the Insolvency Act 1986 of the U.K. (the "Insolvency Act")) or otherwise admits
inability to pay its debts or becomes or is deemed to be insolvent, (c) the
making of a winding up or administrative order in respect of the specified
Person, (d) an assignment for the benefit of creditors, (e) the specified
Person either does, resolves to do or commences negotiations with a
<PAGE> 7
view to doing any of the following: (i) makes a general or special arrangement
or composition (whether voluntary or compulsory) with its creditors or any
class of creditors, (ii) declares or agrees to a moratorium, (iii) issues a
notice convening a meeting to resolve to do any of the foregoing (other than
for the purpose of a solvent amalgamation or reconstruction), or (iv) makes a
proposal for a voluntary arrangement under Section 1 of the Insolvency Act to
be made in respect of the specified Person, (f) the filing of a voluntary
petition in bankruptcy or reorganization or the passing of a resolution for
voluntary liquidation, reconstruction or winding up (other than for the purpose
of a solvent amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, provisional liquidator or administrative
receiver for any part or all of the assets or property of a party within 60
days from the date of such appointment.
"Competitor" means an entity operating or controlling either
video music services primarily for use on television broadcasts or cable
channels featuring such services existing as of the date hereof or subsequently
formed services with programming that is substantially similar in format and/or
content to Borrower's programming; provided, however, that Time Warner and its
Affiliates shall not be considered Competitors for purposes of this definition.
"fiscal year" means any financial (i.e., accounting) year of
Borrower, which currently coincides with the calendar year.
"Governmental Authority" means any federal, state or local, or
foreign government, governmental, regulatory or administrative authority (or
subdivision thereof) and any agency or commission or any court, tribunal or
judicial or arbitral body that has jurisdiction over the Borrower or its
business or assets, including, without limitation, the United States, the
United Kingdom and the Republic of Ireland.
"Liens" means or refers to any lien, claim, charge, pledge,
mortgage, encumbrance, security interest, option, preferential arrangement,
restriction on voting, transfer or other alienation of any kind, adverse
interest, or the interest of a third party under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan" means the loan made by Lender to Borrower hereunder, on
a nonrevolving basis, in the original principal amount of $1,500,000 (U.S.)
(the "Principal Amount" or "Principal").
"Material Adverse Effect" means any circumstance, change in,
or effect on the business of any specified Person that: (a) is, or could
reasonably be expected to be, materially adverse to the business, operations,
assets or liabilities, results of operations or the financial condition of such
Person, or (b) could reasonably be expected to adversely affect the ability of
such Person to operate or conduct its business in the manner in which it is
currently, or is currently anticipated to be, operated or conducted.
"Obligations" means the unpaid Principal Amount of and
interest on (including, without limitation, interest accruing after the
maturity of the Loan and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loan
<PAGE> 8
and all other obligations and liabilities of the Borrower to Lender, whether
direct or indirect, absolute or contingent, due or to be due, or now existing
or hereafter incurred, which may arise under, out of or in connection with this
Agreement, the Loan, the promissory note evidencing the Loan and any other
documents made, delivered or given in connection therewith or herewith.
"Person" means an individual or any corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental authority or
other entity of any kind.
"Relevant Account Standard" means any applicable SSAP,
Financial Reporting Standard, or Consensus or Statement of Recommended Practice
issued by the Accounting Standards Board in England and Wales, or any committee
thereof or body recognized thereby, in force as of the date hereof.
"SSAP" means United Kingdom Statement of Standard Accounting
Practice.
SECTION 1.2. EXHIBIT, ETC. References to an "Exhibit" or a
"Schedule" are, unless otherwise specified, to one of the Exhibits or Schedules
attached to this Agreement, and references to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
AMOUNT AND TERMS OF THE LOAN
SECTION 2.1. THE LOAN. Subject to the terms and conditions of
this Agreement, Lender agrees to make the Loan to Borrower. Lender shall make
or cause to be made an appropriate notation on Lender's records reflecting the
unpaid Principal Amount of the Loan, and Lender shall make or cause to be made,
at the time of receipt of payment of any Principal or interest on the Note (as
defined below), an appropriate notation on its records reflecting such payment.
The aggregate unpaid amount of the Note set forth on Lender's records shall be
conclusive evidence, absent manifest error, of the Principal Amount owing and
unpaid on such Note.
SECTION 2.2. THE NOTE. The Loan shall be evidenced by a
secured promissory note of Borrower payable to the order of Lender, which
secured promissory note shall be in the form of Exhibit 2.2 hereto (the
"Note"). The Note, including, without limitation, any interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to Borrower, whether or not a claim for post-filing
interest is allowed in such proceeding), fees, charges, expenses, reimbursement
obligations, and guarantees shall (a) be senior to and have priority in right
of payment to all amounts payable under or in respect of any other Indebtedness
(as defined in Section 4.6) of Borrower, whether currently outstanding or
incurred in the future, and (b) rank pari passu, in accordance with the terms
of that certain Intercreditor Agreement, among Borrower, Lender, Video Jukebox
Network, Inc., a Florida corporation and an Affiliate of Borrower ("VJN"), and
the Agent thereunder (the "Intercreditor Agreement"), with that certain loan
made concurrently herewith by VJN to Borrower, as evidenced by
<PAGE> 9
that certain Secured Promissory Note and Secured Loan Agreement, each dated the
date hereof.
SECTION 2.3. FUNDING OF LOAN. Upon the full execution and
delivery of this Agreement, the Note and the other documents to be delivered by
Borrower pursuant to Article III hereof (the "Funding Date"), Lender shall lend
to Borrower the Principal Amount of the Loan by wire transfer of immediately
available funds to an account designated in writing by Borrower.
SECTION 2.4. INTEREST RATE. Borrower shall pay to Lender
interest on the unpaid Principal Amount of the Note from and including the
Funding Date to the date of maturity of the Note (whether at stated maturity,
by acceleration or otherwise), at a rate equal to the prime rate as quoted by
the New York, New York branch of NatWest Bank N.A., from time to time, plus one
percent (1%), compounded quarterly (the "Base Rate").
SECTION 2.5. PRINCIPAL AND INTEREST PAYMENT DATES. For the
initial two years during which the Note is outstanding, interest shall accrue
on the outstanding Principal but Borrower shall make no payments of interest or
Principal. For the third through fifth years during which the Note is
outstanding and commencing on July 1, 1997, Borrower shall make quarterly
payments, consisting only of current interest on the Note. The Principal
Amount of the Note, together with accrued interest thereon, shall be payable by
Borrower in equal quarterly installments commencing on the July 1st following
the fifth anniversary of the Funding Date and continuing until and including
the quarter ended September 30, 2004, with a final installment of all unpaid
Principal and accrued interest on October 1, 2005. Whenever any payment under
this Agreement shall be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest on the Note.
SECTION 2.6. INTEREST AFTER DEFAULT. Borrower shall pay to
Lender, on demand, interest on any amount of the Loan and any interest accrued
but unpaid thereon which is not paid when due, whether at stated maturity, by
acceleration or otherwise, accruing from and including the date such amount
shall have become due to the date of payment thereof in full, at the rate per
annum equal to the Base Rate (as then computed) plus 4%.
SECTION 2.7. BASIS OF CALCULATION. Interest on the Loan shall
be computed on the basis of the actual number of days elapsed and a year of 360
days.
SECTION 2.8. MAXIMUM INTEREST. Notwithstanding any provision
of this Agreement, no interest shall accrue or be payable at a rate in excess
of that permissible under applicable law.
SECTION 2.9. TAX LIABILITY ON INTEREST. In the event that any
tax authority of the United Kingdom or the Republic of Ireland imposes a
withholding obligation or asserts tax liability against Lender with respect to
such interest, Borrower shall reimburse Lender for the amount of such
withholding or asserted taxes, as computed on an after-tax basis to Lender.
Such reimbursement shall be paid by Borrower within 30 days after receipt of
notice from Lender that such withholding obligation or tax liability has been
imposed.
<PAGE> 10
SECTION 2.10. MATURITY DATE. Subject to Section 2.12 hereof and
if not sooner paid, the entire unpaid Principal balance of the Note, together
with accrued and unpaid interest thereon, shall become due and payable by
Borrower on the earliest to occur of (a) the 10 year anniversary of the Funding
Date and (b) the date upon which the Loan and the Note shall have been declared
due and payable upon the occurrence of an Event of Default (as defined in
Section 7.1).
SECTION 2.11. VOLUNTARY PREPAYMENTS. Upon five business day's
prior written notice to Lender, Borrower, without premium or penalty, may
prepay the Principal Amount, in whole or in part, together with accrued and
unpaid interest to the date of prepayment on the Principal Amount being
prepaid.
SECTION 2.12. MANDATORY PREPAYMENT. Borrower shall prepay the
entire unpaid principal balance of the Note, together with accrued and unpaid
interest thereon, no later than five days following the earliest to occur of
(a) expiration of the term, or termination caused by breach by VJN or Borrower,
of that certain license dated as of the date hereof granted by VJN to Borrower
(the "VJN License"), (b) termination, whether by expiration of the term, breach
by Borrower, revocation or otherwise, of that certain License No. LPS044
granted to Borrower by the Independent Television Commission on February 11,
1992, which came into force on February 14, 1992 (the "ITC License"), or (c)
the acceleration of all amounts outstanding under the Note in accordance with
Section 7.2 upon the occurrence of an Event of Default (as defined in Section
7.1). All prepayments received by Lender pursuant to this Section 2.12 shall
be applied first to accrued and unpaid interest on the Loan with the remainder,
if any, to be applied to the unpaid Principal Amount of the Loan.
SECTION 2.13. PAYMENTS TO LENDER. All payments to Lender by
Borrower shall be made in lawful money of the United States of America in
immediately available funds and delivered to Lender at its office as set forth
on the signature page hereto, Attention: Chief Financial Officer, or such
other place or into such account as Lender may from time to time designate in
writing. Until notified in writing of the assignment of this Agreement and the
Note, Borrower shall be entitled to deem Lender or such Persons who have been
so identified by Lender in writing to Borrower as the holder of the Note, as
the owner and holder of the Note. Unless otherwise expressly provided herein,
all payments made by Borrower to Lender shall be applied first to accrued and
unpaid interest on the Loan and the remainder thereof to the unpaid Principal
Amount of the Loan.
SECTION 2.14. COLLATERAL. The payment of and performance of all
agreements relating to the Obligations will be secured by all of the property
and assets of Borrower (the "Collateral") set forth with specificity in that
certain Debenture, in the form of Exhibit 2.14, to be executed by Borrower and
Lender concurrently herewith (the "Debenture").
ARTICLE III
DOCUMENTS DELIVERED
Unless waived in writing by Lender, Lender's obligation to make the
Loan to Borrower as contemplated herein shall be subject to Borrower's delivery
to Lender of the
<PAGE> 11
following documents (duly executed by Borrower or other parties, as the case
may be) and all documents referred to therein required to be delivered
therewith:
SECTION 3.1. NOTE. Executed original of the Note.
SECTION 3.2. SECURITY DOCUMENTS. Executed original of the
Debenture.
SECTION 3.3. OTHER TRANSACTIONAL DOCUMENTS. Executed originals
of the following documents, which are to be executed concurrently herewith and
dated as of the date hereof (collectively, the "Transaction Documents"):
(a) the Stockholders Agreement among TM No. 2 Limited
("TM No. 2"), VJN and Borrower;
(b) the Administrative Services Agreement among TM No.
2, Borrower and VJN pursuant to which, among other things, TM No. 2 will
subscribe for 110 Ordinary Shares of Borrower in exchange for a Promissory Note
of TM No. 2;
(c) the Stock Purchase Agreement between TM No. 2, VJN
and Borrower under which TM No. 2 will purchase from VJN 246 Ordinary Shares of
Borrower;
(d) that certain Deed of Tax Covenant between VJN and
TM No. 2;
(e) true and correct copies of each of that certain
Secured Loan Agreement, Secured Promissory Note and Debenture, executed by VJN
and/or Borrower, as appropriate, evidencing all indebtedness of Borrower to
VJN;
(f) the VJN License;
(g) that certain letter agreement among VJN, TM No. 2
and Lender relating to potential post-closing indemnification obligations of
VJN to TM No. 2 and Lender;
(h) the Intercreditor Agreement, pursuant to which VJN
and Lender coordinate the administration and priority of their respective loans
to Borrower and the security interests in the Collateral granted in connection
therewith;
(i) those certain employment agreements between
Borrower and each of Vincent P. Monsey and Elizabeth A. Laskowski; and
(j) that certain Stock Purchase Agreement among
Vincent P. Monsey, VJN and Borrower pursuant to which Mr. Monsey will sell the
54 Series B Ordinary Shares of Borrower, of which he is the beneficial owner,
and transfer title to the 36 Series B Ordinary Shares of Borrower, of which he
has legal title, to VJN.
SECTION 3.4. CLOSING DOCUMENTS. Executed originals or
certified copies, as appropriate, of the following, which are to be executed
concurrently herewith and dated the Funding Date:
<PAGE> 12
(a) a copy of (i) Borrower's Memorandum of Association
and Articles of Association, and (ii) resolutions of the Board of Directors of
Borrower authorizing Borrower's execution, delivery and performance of this
Agreement and each of the Transaction Documents to which Borrower is a party,
in each case certified by the Secretary of Borrower;
(b) an incumbency and specimen signature certificate
with respect to those officers of Borrower who will execute this Agreement and
the other documents and instruments contemplated hereby, including, without
limitation, the Transaction Documents;
(c) the opinion of Denton Hall, counsel to VJN, in the
form of Exhibit 3.4, attached hereto; and
(d) certificate(s) of insurance signed by Borrower's
insurer and dated no earlier than 10 days prior to the Funding Date evidencing
Borrower's compliance with Section 5.6.
SECTION 3.5. ADDITIONAL DOCUMENTS. Such other or additional
documents or instruments as Lender may reasonably require hereunder, all of
which shall be reasonably satisfactory to Lender as to form and substance.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and to make the Loan
hereunder, Borrower hereby represents and warrants to Lender the following
(which representations and warranties shall survive the execution and delivery
of this Agreement and the disbursement of the Loan hereunder):
SECTION 4.1. EXISTENCE; SUBSIDIARIES. Borrower (a) is a duly
registered, incorporated and validly existing corporation, in good standing
under the laws of the England and Wales, (b) has the power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct its business as it has been, is currently,
and is currently anticipated to be conducted, and (c) has no subsidiaries.
SECTION 4.2. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Borrower has the power and authority, and the legal right, to make, deliver and
perform this Agreement, the Note, the Transaction Documents, the Debenture and
the other documents contemplated hereby (collectively, the "Loan Documents"),
and has taken all necessary corporate action to authorize the issuance of the
Note and the execution, delivery and performance of the Loan Documents. Each
Loan Document has been or will be duly executed and delivered by Borrower and
constitutes or will constitute a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms.
<PAGE> 13
SECTION 4.3. TITLE TO COLLATERAL. Borrower is, and at all
times until all of the Obligations are repaid in full will be, the lawful owner
of all of the Collateral, free of all Liens other than the security interest
granted hereunder and the Liens set forth on Schedule 4.3 hereto (collectively,
"Permitted Liens"), with full power and authority to subject the Collateral to
the security interest hereunder.
SECTION 4.4. CONSENTS OR APPROVALS. Except as set forth on
Schedule 4.4 hereto, no consents or approvals are required in connection with
the execution, delivery and performance by Borrower of the Loan Documents.
SECTION 4.5. LITIGATION. Except as set forth on Schedule 4.5
hereto, no litigation, arbitration proceedings or governmental proceedings are
pending or, to Borrower's knowledge, threatened against Borrower (or, to
Borrower's knowledge, any of its directors, officers, employees or agents)
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect on Borrower or could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby.
SECTION 4.6. INDEBTEDNESS. Borrower is not obligated, directly
or indirectly, with respect to any Indebtedness (as defined herein), other than
Indebtedness in respect of the Obligations and the Indebtedness set forth on
Schedule 4.6 hereto (all of which, except to the extent expressly indicated on
Schedule 4.6, is and will be subordinate in right of payment to the
Obligations), and Indebtedness in respect of (a) current accounts payable
incurred in the ordinary course of Borrower's business, (b) accrued expenses
and (c) other current items arising out of transactions (other than
indebtedness in respect of borrowed money or with respect to guarantee
obligations) in the ordinary course of Borrower's business.
For the purposes of this Agreement "Indebtedness" shall mean, with
respect to Borrower and at any date, (i) all indebtedness, whether or not
contingent, for borrowed money, (ii) all obligations for the deferred purchase
price of property or services, (iii) all obligations evidenced by notes, bonds,
debentures or other similar instruments, (iv) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), (v) all obligations as lessee under
leases that have been or should be, in accordance with GAAP (as defined in
Section 4.10) or in accordance with Relevant Accounting Standards or all and
any laws, statutes, treaties, rules, regulations or determinations of any
Governmental Authority (collectively, "Requirements of Law"), recorded as
capital leases, (vi) all obligations, contingent or otherwise, under bankers
acceptances, letters of credit or similar instruments and obligations, (vii)
all obligations to purchase, redeem, retire, defease or otherwise acquire for
value any equity interest of Borrower or any warrants, rights or options to
acquire such capital stock, valued, in the case of redeemable preferred stock,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (viii) all Indebtedness of others referred to in
clauses (i) through (vi) above guaranteed directly or indirectly in any manner
by Borrower, or in effect guaranteed directly or indirectly by Borrower through
an agreement (A) to pay or purchase such Indebtedness or to advance or supply
funds for the payment or purchase of such Indebtedness, (B) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell services,
<PAGE> 14
primarily for the purpose of enabling the obligor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (C) to
supply funds to or in any other manner invest in the obligor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (D) otherwise to assure a
creditor against loss, and (E) all Indebtedness referred to in clauses (i)
through (vi) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by
Borrower, even though Borrower has not assumed or become liable for the payment
of such Indebtedness.
SECTION 4.7. NO VIOLATIONS OR CONFLICTS. The execution,
delivery and performance by Borrower of the Loan Documents, the use of the
proceeds of the Loan and the consummation of the other transactions
contemplated hereby and thereby are within Borrower's objects and powers and
(a) will not violate any Requirement of Law, which violation could have a
Material Adverse Effect; (b) will not violate, conflict with or result in the
breach of any provision of the Memorandum or Articles of Association of
Borrower; (c) will not violate, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
indenture, agreement for borrowed money, bond, note or other similar instrument
or any other agreements to which Borrower is a party or by which any of its
properties or assets are bound; and (d) will not result in, or require the
creation or imposition of any Lien on any of its properties or revenues, other
than Liens created, imposed or evidenced by the Loan Documents.
SECTION 4.8. IDENTITY OF BORROWER. Schedule 4.8 hereto lists
all names by which Borrower is now known, was previously known or under which
Borrower has done business since its formation on September 6, 1991. Borrower
has not been known by any other legal or assumed name different from the one
set forth on the cover page of this Agreement during the five years preceding
the execution of this Agreement.
SECTION 4.9. PERMITS, LICENSES, ETC. Borrower has and at all
times during the term of this Agreement will maintain, all permits, licenses,
accreditations and certifications necessary to conduct its business as
currently conducted, except where the failure to have or maintain the same
could not have a Material Adverse Effect.
SECTION 4.10. TAXES. Schedule 4.10 hereto contains a true and
complete (a) summary description of all taxes and assessments to which Borrower
is subject and (b) list of all tax returns and reports relating to fiscal year
ending December 31, 1994 that Borrower has filed (and the amount of taxes paid
in connection therewith) or is required to file. Borrower has filed or caused
to be filed all tax returns which are required to be filed and has paid all
taxes due and payable or any assessments made against it or any of its
property, and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority due on or before the date of this
Agreement (other than any the amount or validity of which is currently being
contested in good faith by proper proceedings with appropriate surety posted in
connection therewith, if required, and with respect to which proper reserves in
accordance with the United Kingdom's general accepted accounting principles
("GAAP"), any Relevant Accounting Standards and in accordance with all other
Requirements of Law have been provided on the books of Borrower) and no tax
Lien has been filed and, to the knowledge of
<PAGE> 15
Borrower, no claim is being asserted with respect to any such tax, fee or other
charge. Borrower is not a party to any tax sharing or similar agreements.
SECTION 4.11. BURDENSOME OBLIGATIONS. Except as set forth in
Schedule 4.11 hereto, Borrower is not a party to any indenture, loan, credit
agreement, lease or other agreement or instrument, or subject to any charge or
other restriction, that Borrower presently anticipates could have a Material
Adverse Effect. Borrower presently does not anticipate that future
expenditures required or appropriate to meet the provisions of any Requirements
of Law will be so burdensome so as to have a Material Adverse Effect.
SECTION 4.12. FINANCIAL STATEMENTS AND PROJECTIONS.
(a) All balance sheets, profit and loss accounts and
all other financial information of Borrower which have been or hereafter shall
be furnished by or on behalf of Borrower to Lender for the purposes of or in
connection with this Agreement or any transaction contemplated hereby,
including (a) the audited balance sheet as of December 31, 1994 and the related
audited profit and loss account for the fiscal year then ended, together with
all notes and schedules thereto (the "Year End Financial Statements") and (b)
the unaudited balance sheet of Borrower at April 30, 1995 and the related
unaudited profit and loss account and statement of cash flows of Borrower (the
"Interim Financial Statements") have been or will be prepared in accordance
with GAAP, all Relevant Accounting Standards and the Companies Act 1985 of the
U.K., as amended by the Companies Act 1989 (the "Companies Act"), consistently
applied throughout the periods involved (except as disclosed therein) and do or
will give a true and fair view of the state of affairs of Borrower as at the
dates therefor and the results of their operations for the periods then ended,
subject to year-end adjustments consisting only of normal recurring accruals.
On the Closing Date, Borrower will not have any liabilities, greater than
L.100,000 individually or in the aggregate, whether prospective, contingent or
otherwise, including for Taxes, long-term leases or unusual forward or
long-term commitments, which are not fully provided for in the Interim
Financial Statements, whether or not required to be so fully provided for as of
the date thereof, except for those liabilities incurred since the date thereof
in the ordinary course of Borrower's business or as described on Schedule 4.6
and those liabilities reflected in the footnotes to the Year End Financial
Statements.
(b) The annual operating budget of Borrower for fiscal
year 1995 (the "Budget"), that heretofore has been delivered to Lender, has
been prepared in light of the past operations of Borrower. The Budget has been
prepared in good faith, on the basis of honestly held views of management of
Borrower, using accounting principles and methods consistent with those used in
preparing the Year End Financial Statements, except that the Budget omits (A)
certain footnote disclosures and financial statement presentation items
required by GAAP, all applicable Relevant Accounting Standards and/or the
Companies Act and (B) certain year end adjustments consisting only of normal
recurring accruals usually included in the preparation of year end financial
statements. The Budget is based on reasonable and realistic assumptions in
light of current economic conditions and Borrower has no knowledge of any
reason why Borrower should not be able to achieve the performance levels set
forth in the Budget
<PAGE> 16
in light of current economic conditions. Lender acknowledges that some of the
assumptions upon which the Budget has been based may not materialize.
(c) Since December 31, 1994, Borrower has not paid or
declared any dividend or distribution with respect to its share capital.
SECTION 4.13. SECURITY. The Debenture is effective to create a
valid, continuing and enforceable security interest in favor of Lender with
respect to all of Borrower's right, title and interest in and to the Collateral
and is in proper form for registration in the United Kingdom, the Republic of
Ireland and in other jurisdictions in which Borrower conducts business or
Borrower's assets are located. Upon the execution and delivery of the
Debenture, this Agreement and the Note, and the registration of the Debenture
with Companies House in the U.K. (pursuant to Section 395 of the Companies
Act), Lender will have a fully perfected, first priority Lien (which will rank
pari passu, on a first priority basis, with the indebtedness of Borrower to VJN
evidenced by the Transaction Documents described in Section 3.3(e)) on and
security interest in all of Borrower's right, title and interest in and to the
Collateral, superior in right to that of any other Person, subject only to
those Liens relating to the Permitted Liens and to the terms of the
Intercreditor Agreement described in Section 3.3(g).
SECTION 4.14. ITC LICENSE. The ITC License is in full force and
effect and has not been amended or modified from the copy of such License
heretofore delivered by Borrower to Lender. Borrower is in full compliance
with all material conditions and provisions of the ITC License, including
without limitation all provisions relating to programme standards and record
keeping requirements. Borrower is not, and has not received any notice that it
is, in default or breach under the ITC License and no event has occurred and no
condition or state of facts exists (other than the transactions contemplated
herein, including, without limitation, the transactions contemplated by the
Transaction Documents, with respect to which Borrower makes no representation)
that, with the passage of time or the giving of notice or both, could
constitute a default or breach under the ITC License. Borrower, on a timely
basis, has made all payments and filings required under the ITC License.
Borrower has not received any notice that the Independent Television Commission
has revoked or intends to revoke the ITC License and, to the best knowledge of
Borrower, no action is threatened or in progress against Borrower with respect
thereto.
SECTION 4.15. INSURANCE. Schedule 4.15 hereto sets forth a
true and complete list and brief description (including nature of coverage,
limits, deductibles and premiums with respect to each type of coverage) of (a)
all policies of insurance maintained on behalf of, owned or held by Borrower,
and (b) all claims outstanding on the foregoing policies, or policies
previously maintained by or on behalf of, Borrower and the status of such
claims. All of the policies of insurance listed on Schedule 4.15 are in full
force and effect as of the date hereof and, to the best knowledge of Borrower,
will continue in full force and effect until the respective expiration date
reflected on Schedule 4.15; no notice of cancellation or termination has been
received with respect to any such policy; and Borrower heretofore has delivered
to Lender true and correct copies of all such policies of insurance (including
all amendments and endorsements thereto).
<PAGE> 17
SECTION 4.16. ACQUIRED ASSETS. Each asset of Borrower
(including, without limitation, the benefit of any licenses, leases or other
agreements or arrangements) acquired since the date of the Interim Financial
Statements has been acquired for consideration and on terms no less favorable
to Borrower than otherwise would have been available in a comparable arms'
length transaction on the date of such acquisition, except for assets with an
aggregate acquisition cost of not more than L.25,000.
SECTION 4.17. BOOKS AND RECORDS. The books of account and other
financial records of Borrower: (a) reflect all items of income and expense and
all assets and liabilities required to be reflected therein, except to the
extent that the omission to reflect such items could not, individually or in
the aggregate, have a Material Adverse Effect, (b) are complete and correct,
not misleading and do not contain or reflect any inaccuracies or discrepancies,
except as could not, individually or in the aggregate, have a Material Adverse
Effect, and (c) have been maintained in accordance with good business and
accounting practices.
SECTION 4.18. RECEIVABLES. Except to the extent, if any,
provided for on the balance sheet included in the Interim Financial Statements,
all receivables reflected on the balance sheet included in the Interim
Financial Statements arose from, and the receivables existing as of the Closing
Date will have arisen from, the sale of services to persons not Affiliated with
Borrower and in the ordinary course of its business consistent with past
practice and, except as provided against on the balance sheet included in the
Interim Financial Statements, constitute or will constitute, as the case may
be, only valid, undisputed claims of Borrower not subject to valid claims of
set-off, off-set or other defenses or counterclaims. The Interim Financial
Statements make full provision for all doubtful debts and all bad debts have
been written off, except for doubtful debts and bad debts that, individually or
in the aggregate, would not have a Material Adverse Effect on Borrower.
SECTION 4.19. CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Since
the date of the Interim Financial Statements, and except as disclosed on
Schedule 4.19 or as otherwise specifically permitted hereby, Borrower has
conducted business only in the ordinary course and consistent with past
practice.
SECTION 4.20. COMPLIANCE WITH LAWS. Except as set forth on
Schedule 4.20, Borrower has conducted and continues to conduct its business in
all material respects in accordance with all Requirements of Laws entered by or
with any Governmental Authorities, and Borrower is in compliance with all such
Requirements of Laws, except to the extent that the failure to so conduct or
comply therewith would not, in the aggregate, have a Material Adverse Effect on
Borrower.
SECTION 4.21. TRUE AND COMPLETE DISCLOSURE. All of the Loan
Documents and all documents, certificates, written statements and/or written
information furnished to Lender by or on behalf of Borrower in connection
therewith, including all information with respect to the Collateral, that is
set forth in any schedule, certificate or other writing at any time heretofore
or hereafter furnished by Borrower, do not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order
<PAGE> 18
to make the statements contained herein and therein not misleading. To the
best knowledge of Borrower, there is no fact relating to Borrower (other than
general economic conditions or regulatory conditions specific to Borrower's
industry) which currently or in the future could be reasonably expected to have
a Material Adverse Effect and which has not been disclosed either in this
Agreement or the other Loan Documents (including any annex, schedule or
exhibits thereto), which have heretofore or concurrently been delivered to
Lender.
ARTICLE V
COVENANTS
So long as any portion of the Obligations remains outstanding or any
part of the Loan Documents have not been performed in full Borrower shall do
the following:
SECTION 5.1. FINANCIAL REPORTS. Furnish to Lender, as soon as
practicable but in no event later than 90 days after the last day of each
fiscal year and 45 days after the last day of each fiscal quarter, an audited
annual and unaudited quarterly financial statements, respectively, of Borrower
on a consolidated basis, including a balance sheet, profit and loss account and
statement of cash flows; provided, however, that so long as Borrower's
financial statements are consolidated or presented with VJN's financial
statements for reporting purposes, the foregoing time periods shall be extended
to the extent and for the time that VJN shall have received an extension of
filing time from the Securities and Exchange Commission pursuant to Rule 12b-25
promulgated under the Securities Exchange Act of 1934, as amended. In
addition, Borrower shall furnish to Lender, as soon as practicable but in no
event later than 30 days after the last day of each month, an unaudited monthly
and year-to-date profit and loss account. Notwithstanding the foregoing,
Borrower shall deliver from time to time to Lender such other information
concerning the financial condition and results of operations of Borrower as
Lender may reasonably request, in such form and at such time as Lender may
reasonably request, in order for Lender to comply with any reporting
requirements to which Lender or its Affiliates is subject pursuant to
applicable law.
SECTION 5.2. COMPLIANCE CERTIFICATE. Furnish to Lender, no
later than 45 days after the last day of each fiscal quarter, a certificate
signed by the Managing Director of Borrower, in form and substance satisfactory
to Lender, which certifies that (a) all of the representations and warranties
of Borrower contained herein and in the Debenture are true and correct as of
the date thereof, other than those representations and warranties which by
their terms were made expressly as of another date, and (b) Borrower is in
compliance as of the date thereof with all covenants contained herein and in
the Debenture.
SECTION 5.3. TAXES AND LIABILITIES. File all tax returns when
due, and pay and discharge when due, all taxes, assessments and other
liabilities (including, without limitation, liabilities which could result in
the imposition of any Lien), except where contested in good faith and by proper
proceedings, with appropriate surety posted in
<PAGE> 19
connection therewith, if required, and for which proper reserves are being
maintained to the extent required in accordance with GAAP and any other
Requirement of Law.
SECTION 5.4. COMPLIANCE WITH APPLICABLE LAWS. Comply with all
Requirements of Law, a breach of which could affect the interest of Lender
hereunder, except where contested by Borrower in good faith and by proper
proceedings with appropriate surety posted in connection therewith, if
required, and for which proper reserves are being maintained to the extent
required in accordance with GAAP and any other Requirement of Law.
SECTION 5.5. PAYMENT OF OBLIGATIONS. Pay, discharge or
otherwise satisfy at or before maturity, or before default or delinquency, as
the case may be, all its obligations of whatever nature, except where the
amount or validity thereof is being contested in good faith by proper
proceedings with the appropriate surety posted in connection therewith, if
required, and for which proper reserves in accordance with GAAP and any other
Requirement of Law with respect thereto have been provided on the books of
Borrower, as the case may be, and except payables incurred in the ordinary
course of business, which may be delinquent for a period of no more than 90
days, and where the failure to pay, discharge or otherwise satisfy such
payables on a timely basis does not have a Material Adverse Effect.
SECTION 5.6. MAINTENANCE OF PROPERTY; INSURANCE. Not dispose
of (other than in the ordinary course of business) and keep all Collateral in
good working order and condition, ordinary wear, tear and damage due to
casualties excluded; maintain the insurance policies listed on Schedule 4.15,
or obtain from financially sound and reputable insurance companies
substantially similar replacement insurance policies in at least such amounts
and against at least such risks (but including in any event public liability)
as is reasonably requested by Lender, which insurance shall name Lender as an
additional insured; and furnish Lender, on the Funding Date and upon each
renewal, with a certificate(s) of insurance signed by the insurer showing the
insurance then maintained by Borrower as required by this Section 5.6 and, upon
written request, such other information as to the insurance carried.
SECTION 5.7. INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. Keep proper books of record and account in which full, true and
correct entries in accordance with GAAP, the Companies Act, Relevant Accounting
Standards, SSAP and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and subject to
applicable Requirements of Law regarding confidentiality of records, permit
representatives of Lender to visit and inspect any of its properties, and
examine and make abstracts from any of its books and records, at any reasonable
time upon reasonable prior written notice and as often as may reasonably be
desired, and to discuss the business, operations, properties, and financial and
other condition, of Borrower with officers and directors of Borrower, with its
independent certified public accountants (with representatives of Borrower
present) and with employees of Borrower with the prior approval of the
management of Borrower, which approval shall not be unreasonably withheld or
delayed.
<PAGE> 20
SECTION 5.8. MAINTENANCE OF EXISTENCE, PERMITS AND LICENSES.
Do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its corporate existence, material rights, licenses, permits
and franchises required to conduct its businesses.
SECTION 5.9. FURTHER DOCUMENTATION. At any time and from time
to time, upon the written request of Lender and at the sole expense of
Borrower, promptly and duly execute and deliver such further instruments and
documents and take such further actions as Lender may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
the other Loan Documents and of the rights and powers herein and therein
granted.
SECTION 5.10. LIMITATION ON INDEBTEDNESS. Not create, incur,
assume or suffer to exist any Indebtedness except:
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness of Borrower existing on the Funding
Date and listed on Schedule 4.6 hereto, or upon the refunding or refinancing
thereof, on terms reasonably satisfactory to Lender; provided that Borrower
shall not amend, modify or change, or consent or agree to any amendment,
modification or change to, any of the terms relating to the payment or
prepayment of principal of or interest on any such Indebtedness without
Lender's prior written consent; or
(c) Indebtedness in respect of current accounts
payable incurred in the ordinary course of Borrower's business, accrued
expenses and other current items arising out of transactions (other than
Indebtedness in respect of borrowed money or with respect to guarantee
obligations) in the ordinary course of Borrower's business.
SECTION 5.11. LIMITATION ON LIENS. Not create, incur, assume or
suffer to exist, directly or indirectly, any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, except for:
(a) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation, and
deposits securing liability to insurance carriers under insurance or self-
insurance arrangements;
(b) deposits not to exceed L.25,000 in the aggregate
to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;
(c) Permitted Liens and other Liens existing on the
Funding Date which secure indebtedness referred to in Section 5.10(b);
(d) easements, rights of way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are
<PAGE> 21
not substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of Borrower; or
(e) Liens to secure the Indebtedness in respect of the
Obligations.
SECTION 5.12. LIMITATIONS ON FUNDAMENTAL CHANGES. Not enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of all or substantially all of its
property, business or assets, or make any material change in its present method
of conducting business.
SECTION 5.13. LIMITATION ON DISTRIBUTIONS. Not declare or make
any distributions on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any equity interest in or of
Borrower, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash, property,
or obligations of Borrower, unless and to the extent, but only to the extent,
that Borrower's Net Worth (as hereinafter defined) exceeds L.12,800,000;
provided, however, that Borrower shall not declare or pay any dividends or
other distributions in respect of its capital stock that, in the aggregate,
exceed 50% of Borrower's consolidated net income for the fiscal year to which
such dividend or other distribution relates. For purposes of this Agreement,
"Net Worth" means total assets less total liabilities, determined on a
consolidated basis in accordance with GAAP, excluding any increase as a result
of revaluation of assets.
SECTION 5.14. LIMITATION ON CAPITAL EXPENDITURES. Not make or
commit to make (by way of the acquisition of securities of a Person or
otherwise) any expenditure in respect of the purchase or other acquisition of
fixed or capital assets (excluding any such asset acquired in connection with
normal replacement and maintenance programs properly charged to current
operations) except for Capital Expenditures (as herein defined) not exceeding
the amounts approved in the Annual Budget (as herein defined) of Borrower for
the relevant fiscal year of Borrower; provided, however, that any amounts not
so expended in any fiscal year may be carried forward to, but only to, the next
following fiscal year for Capital Expenditures.
For purposes of this Agreement, the term
(a) "Capital Expenditures" means funds paid or set
aside or Indebtedness incurred with respect to the acquisition of (i) assets,
including improvements and enhancements thereon, the returns on which or
repayments of which are expected to extend more than one year after acquisition
and (ii) assets which are required by GAAP to be recorded on Borrower's books
as long-term assets; and
(b) "Annual Budget" means each annual operating budget
with respect to any specified fiscal year of Borrower that is approved by
Borrower's Board of Directors pursuant to Section 2.9(e) of the Stockholders
Agreement described in Section
<PAGE> 22
3.3(a), which budget sets forth individually identified and aggregate
expenditures and indebtedness that the appropriate officers and/or managers of
Borrower are authorized to make or incur.
SECTION 5.15. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES.
Not make any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of, interest
in, or any assets constituting a business unit of, or make any other investment
in, any Person.
SECTION 5.16. TRANSACTIONS WITH AFFILIATES. Except as permitted
by Section 2.10 or 2.11 of the Stockholders Agreement described in Section
3.3(a), not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property, or the rendering of any service,
with any Affiliate unless such transaction is in the ordinary course of
Borrower's business and is upon fair and reasonable terms no less favorable to
Borrower than it could obtain in a comparable arm's length transaction with a
Person not an Affiliate, and the terms of such transaction are disclosed in
advance in writing to Lender.
SECTION 5.17. CLAIMS. Not amend, terminate, cancel or
compromise any claims of Borrower in excess of L.80,000 individually or
L.400,000 in the aggregate or waive any other rights of substantial value to
Borrower.
SECTION 5.18. CONTINUING REPRESENTATIONS. Cause each of the
representations and warranties contained in Article IV to be true and correct
during the time any Obligations remain outstanding.
ARTICLE VI
INDEMNIFICATION
Borrower hereby agrees to indemnify Lender and hold Lender harmless
from and against any and all claims, damages, losses, liabilities, costs,
expenses and fees (including, without limitation, attorneys fees and court
costs) resulting from Borrower's breach of any representation, warranty,
agreement or covenant made by Borrower to Lender in this Agreement or the other
Loan Documents. The indemnification provisions of this Article VI shall
survive the funding of the Loan and any termination of this Agreement or any of
the other Loan Documents.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an "Event of Default" under this
Agreement:
(a) Borrower shall fail to pay when due the principal
amount of the Loan or any portion thereof;
<PAGE> 23
(b) Borrower shall fail to pay when due any interest
which has accrued on the Loan and such failure shall continue for three days;
(c) any representation or warranty made by Borrower
herein, including Section 2.9, or in the other Loan Documents shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made;
(d) Borrower shall default in the observance or
performance of the VJN License or the ITC License, or either of the VJN License
or the ITC License shall be terminated or revoked for any reason;
(e) Borrower shall default in the observance or
performance in any material respect of any covenant or agreement contained in
this Agreement, including Section 2.9, or any of the other Loan Documents or
any of the Transaction Documents and such default shall not of its nature be
curable by Borrower, or if curable, such default shall continue uncured for the
greater of (i) a period of 15 days after receipt by Borrower of written notice
from Lender to such effect and (ii) the expiration of any cure period provided
in the applicable Transaction Document; provided, however, such cure period
shall not apply to any default of any covenant or agreement contained herein
which could constitute an Event of Default described in Section 7.1(a), (b) or
(g);
(f) Borrower shall fail to make any payment when due
in respect of any other Indebtedness of Borrower in excess of L.320,000
(subject to any applicable grace or cure periods) or is otherwise in default
thereunder, if the effect of such default is to accelerate the maturity of any
such indebtedness or to permit the holder or holders of such indebtedness to
cause such indebtedness to become due and payable prior to its expressed
maturity;
(g) Borrower shall fail to maintain any permits or
licenses necessary to any material aspect of the conduct of Borrower's business
and such default shall not of its nature be curable by Borrower, or if curable,
shall not be cured within 30 days after Borrower receives notice thereof;
(h) one or more judgments or decrees shall be entered
against Borrower including in the aggregate a liability of L.400,000 or more,
and all such judgements or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal, within 60 days of the entry thereof;
(i) any distress, execution, sequestration or other
process is levied, enforced upon or sued out against any of the assets of
Borrower;
(j) any judgment or order made against Borrower is not
complied with within seven days (unless a valid appeal has been lodged by
Borrower against such judgment or order);
(k) Borrower either does or threatens to do any of the
following: ceases to carry on all or a material part of the business conducted
by it at the date of this
<PAGE> 24
Agreement; sells or otherwise disposes (in one or more transactions) of all or
a substantial part of its assets; or changes the nature or mode of conduct of
its trading in any material respect;
(l) any proceeding is initiated or any other action
taken with respect to the Bankruptcy of Borrower; or
(m) any event, proceeding or action occurs or is taken
with respect to Borrower in any jurisdiction to which it is subject which is
analogous to any of the events, proceedings or actions referred to in Section
7.1(i)-(l) above.
SECTION 7.2. EFFECT OF EVENT OF DEFAULT. If any Event of
Default shall occur, the principal amount of the Note and all accrued and
unpaid interest thereon and other amounts due with respect to the Note shall
(a) at the option of Lender, become immediately due and payable forthwith, if
the Event of Default is of a type specified in any of Section 7.1(a) through
(h), and (b) immediately and automatically thereupon and concurrently therewith
become due and payable, if the Event of Default is of the type specified in
Section 7.1(i) through (l), all without presentment, demand, notice or protest
of any kind (all of which are hereby expressly waived by Borrower), and Lender
may exercise from time to time any rights and remedies available to it under
applicable law or otherwise. In addition, Borrower agrees to assemble, at its
expense and at Lender's request, all or any part of the Collateral (other than
fixtures) at a convenient place or places acceptable to Lender. Borrower
hereby expressly waives, to the fullest extent permitted by applicable law, any
and all notices, advertisements, hearings or process of law in connection with
Lender's exercise of any of its rights and remedies upon an Event of Default.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. TERMINATION. This Agreement (other than the
provisions of Section 2.9 and Article VI, which shall survive termination of
this Agreement for the applicable statutes of limitations) shall terminate when
all of the Obligations have been finally and fully paid.
SECTION 8.2. CURRENCY CONVERSION.
(a) Any payment by Borrower pursuant to this Agreement
shall be made in U.S. dollars (for the purposes of this Section 8.2, the
"Contractual Currency") in accordance with Section 2.13. If in respect of any
of the Obligations Lender receives payment or the Obligation is converted into
a claim, proof, judgment or order, in either case in a currency other than the
Contractual Currency, then:
(i) Borrower shall indemnify Lender against
any loss or liability resulting from the conversion;
<PAGE> 25
(ii) if the amount received by Lender, when
converted into the Contractual Currency by Lender, is less than the amount of
the relevant Obligation in the Contractual Currency, then Borrower shall on
demand pay to the Lender an amount in the Contractual Currency equal to the
difference; and
(iii) Borrower shall on demand pay Lender any
exchange costs and taxes payable in connection with any conversion referred to
in this Section 8.2.
(b) If and to the extent that Borrower fails to pay on
demand any amount due under this Agreement, Lender may, in its absolute
discretion (and without notice to Borrower), at any time after Borrower's
failure to pay, purchase so much of a currency as Lender considers necessary or
desirable to cover any part of the Obligations denominated or incurred in such
currency. Any of such purchases shall be made at the then-prevailing spot rate
of exchange obtained by Lender (as conclusively determined by Lender) for
purchasing such currency with sterling. Borrower agrees to indemnify Lender
against the full sterling price (including all costs, charges and expenses)
paid by Lender for such currency.
(c) All moneys received or held by Lender from
Borrower under this Agreement may from time to time be converted into such
other currency as Lender considers necessary or desirable to cover any part of
the Obligations denominated or incurred in that currency. That conversion
shall be made at the then-prevailing spot rate of exchange obtained by Lender
(as conclusively determined by Lender) for purchasing the currency to be
acquired with the existing currency.
SECTION 8.3. EXPENSES. Except as otherwise specifically set
forth herein, in the other Loan Documents or in the Transaction Documents, all
costs and expenses incurred in connection with this Agreement, the other Loan
Documents, the Transaction Documents and with consummation of the transactions
contemplated hereby and thereby shall be borne by the party incurring such
expenses.
SECTION 8.4. NO WAIVER. No failure or delay on the part of
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder.
SECTION 8.5. AMENDMENTS, ETC. No amendment, waiver,
modification, supplementation or termination of any term or provision of this
Agreement or any of the other Loan Documents nor any consent to any departure
by Borrower therefrom shall in any event be effective unless the same shall be
in writing and signed by Lender and then (if in respect of a waiver or consent)
only in the specific instance and for the specific purpose for which given.
SECTION 8.6. ADDRESSES FOR NOTICES, ETC. All notices,
requests, demands, directions and other communications provided for hereunder
shall be in writing unless otherwise explicitly provided in this Agreement and,
if by telegram, telex, facsimile
<PAGE> 26
transmission or personal delivery, shall be deemed to have been given and
received when sent (if, in the case of facsimile transmissions, with written
confirmation of receipt), if sent by reputable international overnight courier
service, on the third business day after sending, and, if mailed, shall be
deemed to have been given and received five Business Days after the date when
sent by registered or certified international or air mail, postage prepaid, and
addressed to Lender or Borrower at the address shown below its signature
hereto, or at such other address as it may, by written notice received by other
parties to this Agreement, have designated as its address for such purpose.
SECTION 8.7. BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 8.8. ASSIGNMENT. Neither party hereto, without the
other party's prior written consent, may assign its rights or delegate its
duties under this Agreement or any of the other Loan Documents, except that
Lender may assign its rights and delegate its duties hereunder and under the
other Loan Documents to an Affiliate of Lender; provided that (a) Lender shall
remain secondarily liable with respect to such transferred Loan Document, (b)
such Affiliate may not thereafter transfer its rights or duties under this
Section 8.8 except to Lender and (c) such Affiliate shall first deliver to
Borrower a deed of adherence, in the form attached hereto as Exhibit 8.8,
assuming and agreeing to be bound by the terms of this Agreement and agreeing
to re-transfer such rights and duties to Lender prior to the time such
Affiliate ceases to be an Affiliate of Lender.
SECTION 8.9. GOVERNING LAW. This Agreement shall be a contract
made under and governed by the internal laws of the State of Delaware, without
regard to conflict of laws principles.
SECTION 8.10. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
enforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8.11. HEADINGS. Article and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 8.12. COUNTERPARTS; EFFECTIVENESS. This Agreement may
be executed in counterparts and by the different parties on separate
counterparts and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement.
SECTION 8.13. COMPLETE AGREEMENT. This Agreement, the Loan
Documents and the other documents and agreements expressly referred to herein,
collectively embody the complete agreement and understanding among the parties
hereto and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
<PAGE> 27
SECTION 8.14. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, express or implied, is intended to or shall confer any rights,
remedies, obligations or liabilities, legal or equitable on any Person other
than the parties hereto and their respective successors and assigns.
SECTION 8.15. JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY
TRIAL. Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court covering Wilmington, Delaware for all purposes of or in
connection with this Agreement; provided that nothing in this Agreement shall
affect Lender's right to bring any action or proceeding against Borrower or its
property in the courts of any other jurisdiction. Borrower hereby consents to
process being served in any suit, action or proceeding of the nature referred
to above either (a) by the mailing of a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to its address shown below its
signature hereto or (b) by serving a copy thereof upon Borrower's authorized
agent for service of process (to the extent permitted by applicable law,
regardless whether the appointment of such agent for service of process for any
reason shall prove to be ineffective or such agent for service of process shall
accept or acknowledge such service); provided that, to the extent lawful and
practicable, written notice of said service upon said agent shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, to
Borrower at its address shown below its signature hereto. Borrower agrees that
such service, to the fullest extent permitted by law, (i) shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall be taken and held to be valid personal service upon
and personal delivery to it. Nothing herein shall affect Lender's right to
serve process in any other manner permitted by law, or limit Lender's right to
bring proceedings against Borrower in the courts of any other jurisdiction.
BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THE LOAN DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR
(II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO
THE LOAN DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 8.16. ATTORNEY'S FEES. If any legal action, including
an action for declaratory relief, is brought to enforce any provision of this
Agreement, the prevailing party or parties, was the case may be, shall be
entitled to recover his, its or their respective reasonable attorneys' fees and
court costs from the nonprevailing party or parties, as the case may be. These
fees, which may be set by the court in the same action or in a separate action
brought for that purpose, are in addition to any other relief to which any
prevailing party may be entitled.
SECTION 8.17. CURRENCIES. Unless otherwise expressly set forth
herein all references to "$" or "Dollars" shall be deemed to refer to United
States Dollars and all
<PAGE> 28
references to "L." or "Pounds Sterling" shall be deemed to refer to the lawful
currency, from time to time of England and Wales.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
LENDER:
------
TM/VIDEO INTERNATIONAL, INC., a
Delaware corporation
By: /s/ Norman J. Gantz
----------------------------------
Name: Norman J. Gantz
Title: Secretary
3701 Wilshire Boulevard
7th Floor
Los Angeles, California 90010
Attention: President and
Chief Financial Officer
BORROWER:
--------
VIDEO JUKEBOX NETWORK
INTERNATIONAL LIMITED, a company
incorporated under the laws of
England and Wales
By: /s/ Vincent Monsey
----------------------------------
Name: Vincent Monsey
Title: Managing Director
11-13 Young Street
Kensington
London W8 5EH
Attention: Managing Director
<PAGE> 29
EXHIBIT 2.2
[COPY OF SECURED PROMISSORY NOTE FILED AS EXHIBIT 99.3 TO THIS FORM 8-K]
<PAGE> 30
EXHIBIT 2.14
[COPY OF DEBENTURE FILED AS EXHIBIT 99.7 TO THIS FORM 8-K]
<PAGE> 31
EXHIBIT 3.4
FORM OF DENTON HALL OPINION
To: TM/Video International, Inc.
c/o Rowe & Maw
20 Black Friars Lane
London EC4V 6HD
Dated 30th June 1995
Dear Sirs,
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (THE "COMPANY")
We have been requested by Video Jukebox Network, Inc. ("VJN") to give this
opinion to TM/Video International, Inc. ("Ticketmaster") in respect of, inter
alia, the following documents entered into by the Company:
(i) a secured loan agreement of even date herewith made between the
Company (1) and Ticketmaster (2) and a secured loan agreement of even
date herewith made between the Company (1) and VJN (2) (the "Secured
Loan Agreements");
(ii) a debenture of even date herewith made between the Company (1) and
Ticketmaster (2) and a debenture of even date herewith made between
the Company (1) and VJN (2) (the "Debentures");
(iii) a secured promissory note of even date herewith payable to the order
of Ticketmaster and a secured promissory note of even date herewith
payable to the order of VJN (the "Promissory Notes"); and
(iv) an intercreditor agreement of even date herewith made between
Ticketmaster (1) VJN (2), the Company (3) and Atlantic American
Capital Corp. as agent (the "Agent") (4) (the "Intercreditor
Agreement")
(together the "Agreements" and an "Agreement" shall be construed accordingly).
We have acted as English legal advisers to VJN, the owner of a majority of the
issued share capital of the Company as at the opening of business on 30th June
1995, in connection with, inter alia, the execution by the Company of the
Agreements. We have not acted as legal advisers to the Company in relation to
the Agreements or otherwise.
<PAGE> 32
1. DOCUMENTATION
For the purpose of giving this opinion, we have examined the following
documents (the "Documents"):
(a) a copy of the Memorandum and Articles of Association of the
Company certified by the Companies Registration Office of
England and Wales ("CRO") as being a true copy of the original
and dated 24th May 1995 (a copy of which is annexed hereto as
Exhibit A) and the Company's statutory books as at 30th June
1995;
(b) the original Certificate of Incorporation and Certificate of
Incorporation on Change of Name of the Company, issued by the
CRO dated 6th September 1991 and 26th September 1991
respectively, (the "CRO Certificates") (copies of which are
annexed hereto as Exhibits B (i)and (ii));
(c) a copy, duly certified by the Secretary of the Company, of
minutes of a meeting of the board of directors of the Company
held on the 29th day of June 1995 ("the Minutes") (a copy of
which is annexed hereto as Exhibit C)
(d) a copy, duly certified by the Secretary of the Company of
written resolutions of the shareholders of the Company passed
on the 29th day of June 1995 ("the Shareholders Resolutions")
(a copy of which is annexed hereto as Exhibit D);
(e) an original certificate of the Secretary of the Company (a
copy of which is annexed hereto as Exhibit E);
(f) an original certificate issued by the CRO dated 27th June 1995
(the "CRO Company Standing Certificate") (a copy of which is
annexed hereto as Exhibit F) to the effect that at the date of
issue of the certificate and according to the documents on the
files in the custody of the Registrar of Companies:
(i) the Company had been in continuous and unbroken
existence since the date of its incorporation;
(ii) no action was currently being taken by the Registrar
of Companies for striking the Company off the
register and dissolving it as defunct, and, as far as
the Registrar was aware, the Company was not in
liquidation or subject to an administration order nor
had a receiver or manager been appointed of the
property of the Company;
(g) executed and dated copies of each of the Agreements (copies of
which are annexed hereto as Exhibits G(i)(a) and (b), (ii)(a)
and (b), (iii)(a) and (b) and (iv)); and
2.
<PAGE> 33
(h) a search ("the Search") obtained from the CRO on 26th June
1995 in respect of the Company which includes, inter alia:
(i) a copy of the Memorandum and Articles of Association;
and
(ii) copies of the CRO Certificates.
2. OPINION
On the basis of:
(i) our examination of the Documents;
(ii) in the case of paragraph (d) below only, a telephone enquiry
made on 30th June 1995 by us to the Central Registry of
Winding-Up Petitions in the Companies' Court; and
subject as mentioned below in this letter (and in the Schedule hereto
which forms part of this letter), we are of the opinion that:
(a) the Company is a limited liability company duly incorporated
and validly existing under the laws of England and Wales;
(b) the Company has corporate power to enter into and perform its
obligations under the Agreements;
(c) all necessary corporate action has been taken to authorise and
approve the execution, delivery and performance by the Company
of each of the Agreements;
(d) no petition for the winding up of the Company has been
presented in the period of six months immediately preceeding
the date of this Opinion;
(e) each of the Agreements has been duly executed and delivered
on behalf of the Company and constitutes valid and binding
obligations of the Company enforceable in accordance with its
terms;
(f) no action of, filing with or licence or consent of, any
governmental or public body or authority in England is
required to authorise or is otherwise required in connection
with, the execution, delivery and performance of the
Agreements by the Company, except that particulars of the
Debentures must be delivered to the Registrar of Companies
pursuant to Section 396 of the Companies Act 1985 (as
3.
<PAGE> 34
amended) (the "Companies Act") and the H.M. Land Registry in
respect of leasehold and freehold property charged by the
Debentures;
(g) neither the Search nor the statutory books of the Company
reveal any charges registered or created over any of the
assets of the Company;
(h) the execution, delivery and performance by the Company of the
Documents does not and will not contravene any existing
applicable statute or other law to which the Company is
subject in England or conflict with, result in any breach of
or constitute a default under or pursuant to the provisions of
its constitutional documents;
(i) there are no actions, suits or proceedings pending or
threatened against or affecting the Company in the English
High Courts which, if adversely determined, would have a
material adverse effect upon the ability of the Company to
perform its obligations under the Agreements;
(j) other than filings with the European Commission under Article
85 of the Treaty of Rome and with the Office of Fair Trading
pursuant to the Restrictive Trade Practices Act 1976, to
ensure the legality, validity, enforceability and
admissibility into evidence of each of the Agreements in
England and Wales, no declaration, filing or registration with
any court, governmental agency or other authority or body in
England and Wales need be made; no consent, licence, permit,
order, decree, authorisation or approval of any such authority
or body is required; no stamp or similar tax need be paid;
(k) the Company is subject to the laws of England and Wales and
neither it nor any of its property or assets enjoys any right
of immunity from any judicial proceedings in England and
Wales.
For the purpose of this opinion "duly incorporated" means that the
requirements of the Companies Act(s) applicable at the date of
incorporation of the Company in respect of registration and of matters
precedent and incidental to it have been complied with and that the
Company is authorised to be registered and is duly registered under
that or those Acts.
For the purpose of this opinion "validly existing" means that the
Company is subsisting at the date of this opinion and has not been
struck off the register maintained by the Registrar of Companies for
England and Wales, nor has it been dissolved, nor has it ceased to
exist by reason of any merger or consolidation or limitation on the
duration of its existence.
4.
<PAGE> 35
3. QUALIFICATIONS
Our opinion is given subject to the matters set out in the Schedule
hereto, which is incorporated as part of this opinion.
4. RELEVANT LAW
The opinion given above is (a) limited to matters of or concerning
English law, (b) based on English law as it stands today and as
applied by the Courts of England, and (c) given on the basis that of
the Agreements only the Debentures are governed by and construed in
accordance with English law.
We express no opinion as to the laws of any jurisdiction other than
England and we assume that no law other than English law affects the
conclusions stated in this opinion, save for the laws of the State of
Delaware with respect to the Secured Loan Agreements, the
Intercreditor Agreement and the Promissory Notes. We assume that
insofar as the laws of the State of Delaware govern the Secured Loan
Agreement, the Intercreditor Agreement and the Promissory Notes the
obligations of the Company thereunder constitute its legal, valid and
binding obligations under the laws of the State of Delaware
enforceable in accordance with their terms. We have made no
investigations and are not qualified to give legal opinions, as to the
laws of the State of Delaware or any other jurisdiction, other than
England and Wales.
This Opinion is to be governed and construed in accordance with
English law. Any claim arising in connection herewith shall only be
brought in the Courts of England.
5. PURPOSE OF OPINION, CONFIDENTIALITY
We have provided this opinion to Ticketmaster at the request of VJN.
This opinion is addressed solely to you and may not be relied upon
otherwise than in connection with the Agreements. It must not
(without our prior written consent) be made available or disclosed to
any third party, save for United States or English legal advisers of
Ticketmaster nor shall it be quoted or referred to in any public
document or filed with any governmental agency or other person or body
without our prior written consent.
5.
<PAGE> 36
This opinion is strictly limited to the matters stated herein and is
not to be read as extending by implication to any other matter in
connection with the Agreements, the Documents or otherwise howsoever.
This opinion is given in London.
Yours faithfully,
.........................
Denton Hall
6.
<PAGE> 37
SCHEDULE
The Opinion to which this Schedule is annexed (and of which it forms part) is
given subject to the following matters:
1. ASSUMPTIONS
We have assumed (although we have not verified) the following:
(a) the authenticity of all signatures and seals (if any) on the
signature pages of the Agreements;
(b) the authenticity of those of the Agreements and the Documents
that were submitted to us as originals and the conformity to
the originals of those of the Documents that were submitted to
us as copy or facsimile documents;
(c) the binding nature of the respective obligations expressed to
be assumed by each of the parties thereto (other than the
Company) under each of the Agreements and that the Agreements
are within the capacity and powers of, and have or will be
validly authorised, executed and delivered by, each party
thereto (other than the Company);
(d) that the Minutes referred to in paragraph (1) (c) above are a
correct record of the business transacted and the persons
present at the meeting referred to therein, that such persons
were at all times during such meeting validly appointed
directors of the Company and that such meeting was validly
convened and quorate;
(e) that no party to the Agreements entered into or was induced to
enter into any of them by fraud, misrepresentation or, undue
influence or on the basis of a mistake of fact or law, or
believing the relevant Agreement to which it is a party to be
fundamentally different in substance or in kind from what they
are, so that the Agreements are not regarded as the intended
or wilful act of that party (this being known as the "non est
factum" doctrine);
(f) due compliance with all matters required under the Agreements
in all jurisdictions other than England, including (without
limitation):
(i) the obtaining of all necessary consents, licences,
approvals, and authorities (and that the same remain
in full force and effect and will continue to be
given or granted where required);
7.
<PAGE> 38
(ii) the making of all necessary filings, lodgments,
registrations, notifications, furnishings of
particulars and applications for exemptions or
clearances; and
(iii) the payment of stamp duties and other documentary
taxes and charges;
(g) the validity, accuracy and currency of all matters represented
by the Search referred to in paragraph 1(h) above, the
response to the telephone enquiry referred to in paragraph
2(ii) above and the certificate referred to in paragraph 1(e)
above, but please note that the Search cannot reveal
definitively whether or not certain events have occurred, such
as a change to the Memorandum or Articles of Association, or
the presentation of a petition for the making of a winding up
order or the making of an adminstration order, or whether any
particular director holds office;
(h) the completeness and accuracy of the copy documents referred
to in paragraph 1(a) to (d) (inclusive) above and of the
statements of fact contained therein;
(i) that none of the resolutions of the shareholders as set out in
the Shareholders Resolution nor any resolutions of the
directors as set out in the Minutes has been amended or
rescinded and that all such resolutions are in full force and
effect;
(j) that all filings necessary under Section 396 of the Companies
Act in connection with the Debentures have been or will,
within the requisite periods, be duly effected; and
(k) the validity and enforceability, under those laws (other than
the laws of England) which govern or relate to the Agreements,
of those obligations or rights which are to be performed or
enforced under such laws by or against the parties to the
Agreements (or other persons affected thereby).
2. LIMITS ON THE EFFECT OF THE AGREEMENTS
2.1 We have referred to the Agreements as constituting the valid and
legally binding obligations of the Company. This does not mean the
provisions thereof will necessarily be valid or enforceable in all
circumstances, now or in the future as the legality, validity,
enforceability or binding nature of any of the Agreements may be
affected by:
(a) the laws of bankruptcy, insolvency, receivership,
administration, prescription, lapse of time, reconstruction,
reorganisation, liquidation, moratorium, limitation and other
like laws affecting the rights of creditors generally, and, as
the case may be, secured creditors generally;
8.
<PAGE> 39
(b) the effect of principles of equity: for example, an order for
specific performance (in particular of non-monetary
obligations) or an injunction may not be available, as under
English law these are discretionary remedies and are not
generally available in circumstances where damages are
considered by the English Courts to be an adequate remedy;
(c) a claim becoming barred under the Limitation Acts (as amended)
or being or becoming subject to set-off or counterclaim;
(d) any amendment, waiver, variation or discharge, whether
effected by a further or supplemental agreement, side letter
or other document, arrangement, course of dealings or
otherwise (whether or not evidenced in writing) which may
affect the Agreements or any other matters not expressly
disclosed by or apparent on the face of the Documents;
(e) the rights of the Courts of England to stay proceedings if
concurrent proceedings are being brought elsewhere;
(f) the possibility that the Courts of England may refuse to give
effect to any provision of the Agreements:
(i) requiring the costs of any party to be paid in
respect of unsuccessful litigation or where the Court
has itself made an order for costs; or
(ii) which purports to permit severance of any illegal or
unenforceable provision thereof (including without
limitation Section 5.12 of the Intercreditor
Agreement, Section 8.10 of the Secured Loan
Agreements and Clause 10 of the Debentures);
(g) the fact that the Unfair Contract Terms Act 1977 or the laws
of frustration of contract or public policy may render any
provision of any contract invalid or unenforceable;
(h) the fact that where obligations are to be performed in a
jurisdiction outside England notwithstanding the choice of
English law as the proper law of the Debenture, they may not
be enforceable in England to the extent that performance would
be illegal or would be contrary to public policy under the
laws of England or the laws of any jurisdiction in which any
obligation under the Agreements is to be performed;
(i) the fact that the inclusion of provisions (such as Section
8.15 of the Secured Loan Agreements) which purport to restrict
or oust the jurisdiction of the English Courts
9.
<PAGE> 40
will not prevent an English Court from exercising its inherent
jurisdiction as to whether or not it should stay any
proceedings brought in connection with an agreement, in favour
of arbitration;
(j) the fact that where a party to an Agreement is vested with a
discretion or may determine a matter in its opinion (such as
under paragraph 2.2 of Schedule 3 to the Debentures), English
law may require that such discretion is exercised reasonably
or that such opinion is based upon reasonable grounds;
(k) any declaration, decision or ruling given by or pursuant to
the advice of, any competition law authority of the United
Kingdom and/or of the European Community;
(l) the fact that where a promissory note is annexed to or forms
part of a loan agreement, the Courts of England may not permit
such a promissory note to be enforced separately from or
without regard to counterclaim or other rights arising against
the lender under the loan agreement to which the promissory
note relates;
(m) the fact that, under the laws of England, the Agreements may
be capable of amendment or waiver orally or of discharge, or
affected by a collateral agreement which may be effected by an
oral agreement despite provisions such as those contained in
Clause 11 of the Debentures;
(n) the fact that a certificate, determination, notification or
opinion given pursuant to any of the Agreements as to any
matter provided for therein or the entry made on any register
or account, might be held not to be conclusive if it can be
shown to be mistaken or made on an arbitrary, unreasonable or
improper basis;
(o) the existence of equities, rights of set-off, counterclaims,
liens, charges and encumbrances which are not registrable
under the Companies Act which may have been granted (or may
exist) and are not so registered, as to which we express no
opinion.
2.2 We express no opinion as to the following:
(a) matters of fact; and
(b) the Transaction Documents (as defined in the Secured Loan
Agreements) other than the Secured Loan Agreements, the
Debentures, the Promissory Notes and the Intercreditor
Agreement;
10.
<PAGE> 41
3. COMPANY SEARCHES
We have, on 26th June 1995, conducted a search of the publicly
available record in respect of the Company at the Companies
Registration Office in Cardiff, which revealed no order or resolution
for the winding up of the Company and no notice of appointment of a
receiver, supervisor or administrative receiver as having been filed.
4. FOREIGN CURRENCIES
Notwithstanding that claims may be made in the Courts of England in
foreign currencies and that the Courts of England have power to give
monetary judgments expressed in foreign currencies, the English Courts
nevertheless have a residual power to express their judgments in a
currency other than that claimed.
5. EXCESSIVE INTEREST/PENALTIES
To the extent that Section 2.6 of the Secured Loan Agreement provides
for the payment of interest in excess of what the Courts of England
may regard as a reasonable rate, interest on interest, or interest in
the circumstances of breach or default, such provision may be
considered by the English Courts to be a penalty and accordingly void
and of no effect.
11.
<PAGE> 42
EXHIBIT 8.8
DEED OF ADHERENCE
THIS DEED OF ADHERENCE (this "Deed") is made on _________ __, 199____
between VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED, whose registered office is
at Imperial House, 11-13 Young Street, Kensington, London, United Kingdom (the
"Company"), TM/VIDEO INTERNATIONAL, INC. whose principal office is at 3701
Wilshire Boulevard, 7th Floor, Los Angeles, California 90010 (the "Covenantee"),
and [________________________] whose registered office is at
[___________________________________________] (the "Covenantor(s)").
BACKGROUND:
1. The Covenantee made a loan to the Company pursuant to that
certain Secured Loan Agreement dated as of June 30, 1995 (the "Loan
Agreement"), as evidenced by that certain Secured Promissory Note dated as of
June 30, 1995 (the "Note").
2. By virtue of the assignment by the Covenantee to the
Covenantor of the Covenantee's rights in and duties under [the Loan Agreement
and/or the Note], the Covenantor(s), upon execution of this Deed, shall become
subject to the terms of the Loan Agreement and the Note.
3. The parties hereto agree that the Covenantor(s) shall be bound
by the terms and conditions of the Loan Agreement and the Note.
OPERATIVE PART:
1. Undertaking
(a) In consideration of the sum of [L.1] now paid by the
Company (on behalf of itself and the Covenantee) to the Covenantor(s),
receipt of which is hereby acknowledged, [each of] the Covenantor(s)
hereby covenant(s) with and undertake(s) to the Covenantee[,] [and]
the Company [and each other], to be bound by and to adhere to the
terms and conditions of the Loan Agreement and the Note as if the
Covenantor(s) had been an original party to the Loan Agreement and the
Note insofar as the same are applicable to "the Lender," as defined in
such document.
(b) The Covenantee and the Company agree that the
Covenantor(s) shall for the purpose of the Loan Agreement be included
in the definition of "Lender" contained therein with effect from the
effective date of the assignment of the [________________] to the
Covenantor(s).
<PAGE> 43
2. Continued Liability of Transferor
Notwithstanding anything contained herein, upon the assignment of the
[Loan Agreement and/or the Note] and the entry by the Covenantor(s) into this
Deed, nothing in this Deed shall in any way release, discharge or diminish the
liability of the transferring Covenantee from the due and prompt performance of
its obligations under the Loan Agreement or the Note.
3. Retransfer by Affiliate
The Covenantor(s) shall not be entitled to transfer or assign the
[Loan Agreement or Note] except in accordance with the terms thereof and shall,
prior to ceasing to be an Affiliate (as defined in the Loan Agreement) of the
Covenantee, retransfer all of [its][their] rights, title and interest in the
[Loan Agreement or Note], including, without limitation, under or in connection
with the Debenture (as defined in the Loan Agreement), to the Covenantee.
4. Jurisdiction
This Deed of Adherence shall be construed in accordance with the
internal laws of the State of Delaware (without regard to its conflicts of law
principles).
5. Notices
The [respective] address(es) for service of notices on the
Covenantor(s) under the Loan Agreement shall be their respective address(es)
set out above (or such other address(es) as they shall notify to the Company in
writing).
IN WITNESS WHEREOF, the parties have executed this Deed of Adherence
as of the date first written above.
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
By:
-----------------------------------------
Name:
Title:
<PAGE> 44
TM/VIDEO INTERNATIONAL, INC.
By:
-----------------------------------------
Name:
Title:
[_______________________________]
By:
-----------------------------------------
Name:
Title:
THE COMMON SEAL OF VIDEO )
JUKEBOX NETWORK )
INTERNATIONAL LIMITED WAS )
AFFIXED TO THIS DEED IN )
THE PRESENCE OF: )
THE COMMON SEAL OF TM NO. 2 )
LIMITED WAS AFFIXED TO THIS )
DEED IN THE PRESENCE OF: )
[THE COMMON SEAL OF [________ )
___________________________] )
WAS AFFIXED TO THIS DEED IN )
THE PRESENCE OF: )
3
<PAGE> 45
Witness: _________________________
Address: _________________________
_________________________
Occupation _________________________
4
<PAGE> 46
SCHEDULE 4.3
Title to Collateral
Borrower has granted a security interest in the Collateral to Video Jukebox
Network, Inc. ("VJN"), to secure a loan of $1,500,000.00 from VJN to the
Borrower.
<PAGE> 47
SCHEDULE 4.4
Consents or Approvals
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, Borrower must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
<PAGE> 48
SCHEDULE 4.5
Litigation
Borrower was in dispute with Dolphin Head Group Holdings Plc
("Dolphin") relating to the occupation by Borrower of certain premises known as
Unit or Suite 5, Camberley House, Portesbery Road, Camberley, Surrey and Unit
6, Camberley House, 85 High Street, Camberley, Surrey. A writ was served on
Borrower dated September 14, 1994 claiming a total of L.15,135.51 plus interest
and costs. A Defense dated October 27, 1994 was served by Borrower. The
matter was settled by mutual consent on May 11, 1995 - a payment of L.6,850.00
was made by Borrower to Dolphin's solicitors on behalf of Dolphin. A consent
order was issued by the court on May 12, 1995 ordering that no order should be
made in respect of Dolphin's claim against Borrower, save that Borrower pay the
costs of the action brought by Dolphin against Borrower, such costs to be taxed
if not agreed. The costs are in the process of being taxed and Clintons has
estimated that the taxed costs are likely to be in the region of L.10,000.00 -
L.20,000.00.
<PAGE> 49
SCHEDULE 4.6
Indebtedness
Borrower is indebted in the principal amount of $1,500,000.00 to VJN pursuant
to that certain Secured Loan Agreement and Secured Promissory Note, each dated
the date hereof, which debt ranks pari passu with the Loan.
<PAGE> 50
SCHEDULE 4.8
Identity of Borrower
The Borrower was incorporated on September 6, 1991 under the name
"Video Dukebox Network International Limited."
On September 26, 1991 the Borrower changed its name to "Video Jukebox
Network International Limited."
<PAGE> 51
SCHEDULE 4.10
Taxes
(a) Borrower is liable for United Kingdom ("UK") corporation taxes
and value added tax ("VAT"). Borrower has to account for and pay over to the
UK Inland Revenue PAYE income tax and National Insurance Contributions ("NICs")
in respect of salaries, fees and wages paid to its directors and employees.
(b) In respect of the accounting period ended December 31, 1994,
Borrower will be required to file a corporation tax return (Form CT 200),
statutory audited accounts and reports and a corporate tax computation.
PAYE and NIC annual returns (Forms P35) relating to the above
period have been properly and duly submitted. As the returns relate to years
of assessment (and not calendar years), which run from April 6 of each year to
April 5 of the next year, the accounting year ended December 31, 1994 straddles
two years of assessment ("Y/A"), Y/A 1993/1994 and 1994/1995:
<TABLE>
<CAPTION>
Y/A Total PAYE Tax Paid Total NICs Paid
--- ------------------- ---------------
<S> <C> <C>
1993/94 L.35,199 L.22,011
1994/95 L.57,810 L.40,383
</TABLE>
VAT returns (Forms VAT 100) for each prescribed accounting period
(quarter) relating to the year ended December 31, 1994 have been duly filed and
the output tax accounted for and paid over to HM Customs & Excise, as follows:
<TABLE>
<CAPTION>
Period Output Tax Paid
------ ---------------
<S> <C>
Qtr. ended 02/95 L.14,023
Qtr. ended 11/94 L.20,255
Qtr. ended 08/94 L. 6,441
Qtr. ended 05/94 L.12,249
Qtr. ended 02/94 L. 808
</TABLE>
<PAGE> 52
SCHEDULE 4.11
Burdensome Obligations
Borrower is indebted in the principal amount of $1,500,000.00 to VJN pursuant
to that certain Secured Loan Agreement and Secured Promissory Note, each dated
the date hereof, which debt ranks pari passu with the Loan.
<PAGE> 53
SCHEDULE 4.15
Insurance Policies
1. Directors & Officers Insurance Policy - Home Insurance Company of
Illinois (Agent: Buckley, Deets & Assoc. Inc.)
o Insured: VJN; Borrower and VJN LPTV Corp.
o Period: 12/6/94 - 12/6/95 (Retroactive Date: 12/6/89)
o Policy No.: PDO - F - 922612 - 4/000
o Limits: - $3 mil (Aggreg. & Single Claim)
(sub-limit of $350,000/assured) and
$950,000 aggreg. #10)
- Insurer's % = 100%
o Retentions: (A) $150,000/claim
(B) $5,000/assured, subject to $50,000 max.
for all assureds applicable to each
claim
o Premium: $137,500
Notwithstanding any representation and warranty contained in section
4.15 of this Agreement, the foregoing policy will cease to cover the
Borrower upon the closing of the transactions contemplated by the
Transaction Documents.
2. Broadcasters Broad Form Defamation and Associated Risks Policy -
Employers Reinsurance Corporation
o Assured: VJN; VJN LPTV Corp. and
affiliates/subsidiaries
o Period: 6/19/95 - 6/19/96
o Policy No.: RLS-04814-R
o Limits: $5,000,000/occurrence
o Retention: $5,000/occurrence
o Premium: $9,570
o Broadcasting
Stations Insured: "Video Jukebox Network"
_________________________________
Notwithstanding any representation and warranty contained in section
4.15 of this Agreement, the foregoing policy will cease to cover the
Borrower upon the closing of the transactions contemplated by the
Transaction Documents.
<PAGE> 54
3. Automobile General Liability Policy - Insurance Company of
Pennsylvania
o Insured: Borrower c/o VJN
o Period: 5/1/95 - 5/1/96
o Policy No.: 80259277
o Limits: $1,000,000/occurrence and aggregate
o Premium: $2,500
4. Office Combined Policy - Eagle Star Insurance Company Limited
(Melville Burbage - Broker)
o Insured: Borrower
o Premises: Imperial House, 11-13 Young St.
Kensington (Box Admin. Office)
o Period: 6/2/95 - 6/2/96
o Policy No.: 002/820/J0000859/3
o Limits: Contents: L.100,000 (L.500
Improvements), + L.10,000 business
interruption, $250 deductible,
fidelity coverage for 5 employees.
o Premium: L.1,224.65
5. Wide Angle Media Combined Policy - Eagle Star Insurance Company
Limited (Hoggs Ins. Broker)
o Insured: Borrower
o Period: 6/10/95 - 6/9/96, Borrower received
a renewal notice for the current
period on June 29, 1995. Coverage
will only remain in effect for the
period indicated, so long as
Borrower pays the premium within 14
days of the renewal notice.
o Policy No.: Not known at this time
o Limits: Borrower's equipment - up to
L.20,000 Hired in equipment - up to
L.15,000 (fees L.1,000) Policy
excess each claim - L.250,
increasing to L.500 outside Western
Europe. These excesses are doubled
in respect of hired in and/or hired
out equipment.
o Premium: L.571.95
<PAGE> 55
SCHEDULE 4.19
Conduct of Business in the Ordinary Course
None
<PAGE> 56
SCHEDULE 4.20
Compliance with Laws
1. As mentioned in the minutes of a meeting of the Board of Directors of
Borrower held on April 26, 1993, Borrower was at that date in arrears
in respect of the payment of tax under the PAYE scheme, in the amount
of approximately L.40,000. These arrears, together with any interest
and penalties thereon, have since been paid.
2. Borrower obtains all advertisements shown on "The Box" from
advertising agencies. Borrower does not analyze advertisements shown
on "The Box" for compliance with any codes of advertising standards or
similar codes. Consequently, there can be no assurance that Borrower
is in compliance with any applicable codes of advertising standards.
3. Borrower is not registered under the Data Protection Act 1984.
Nevertheless, Borrower submitted an application for registration under
such act to the Registrar on June 14, 1995.
4. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 12, 1994.
<PAGE> 1
8-K
EXHIBIT 99.3
<PAGE> 2
THIS INSTRUMENT IS SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT
DATED AS OF JUNE 30, 1995 AMONG VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED, VIDEO JUKEBOX NETWORK, INC., AND TM/VIDEO INTERNATIONAL,
INC., WHICH INTERCREDITOR AGREEMENT IS INCORPORATED HEREIN BY
REFERENCE.
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
SECURED PROMISSORY NOTE
$1,500,000 (U.S.) June 30, 1995
For value received, VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED, a
company organized under the laws of England and Wales ("Maker"), does hereby
promise to pay to TM/VIDEO INTERNATIONAL, INC., a Delaware corporation
("Payee"), the principal sum of One Million Five Hundred Thousand Dollars
($1,500,000) (US).
Maker further promises to pay interest on the unpaid principal amount
of this Secured Promissory Note (this "Note") from the date hereof until such
unpaid principal is paid in full, payable at the rates and at the times
provided in that certain Secured Loan Agreement dated as of the date hereof
between Maker and Payee (as amended, supplemented or otherwise modified from
time to time, the "Loan Agreement").
This Note (a) is the Note referred to in the Loan Agreement, (b) is
subject to the provisions of the Loan Agreement, (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Loan Agreement and
(d) is senior in right of payment to Maker's other obligations to other lenders
to the extent and as provided in the Loan Agreement. Capitalized terms used
herein shall have the meanings set forth in the Loan Agreement unless otherwise
defined herein to the contrary or unless the context otherwise requires.
In addition to and not in limitation of the foregoing and of the
provisions of the Loan Agreement, Maker further agrees, subject only to any
limitation imposed by applicable law, the Loan Agreement and as provided below,
to pay all expenses, including reasonable attorneys' fees and expenses,
incurred by the Payee in endeavoring to collect any amounts payable hereunder
which are not paid when due, whether by acceleration or otherwise.
<PAGE> 3
Upon or at any time after the occurrence of an Event of Default, this
Note shall become due and payable forthwith in accordance with Section 7.2 of
the Loan Agreement, without presentment, demand, notice or protest of any kind,
all of which are hereby expressly waived by Maker. No delay or omission of
Payee in exercising any right or power hereunder shall impair any such right or
power, or be deemed or construed to be a waiver of any default hereunder or an
acquiescence therein. No waiver shall be valid unless signed in writing by
Payee and then only to the extent specifically set forth in such writing.
Upon any endorsement, assignment or other transfer of this Note by
Payee or by operation of law including, without limitation, the endorsement of
this Note to a third party, the term "Payee", as used herein, shall mean such
endorsee, assignee or other transferee or successor to Payee then becoming the
holder of this Note. This Note shall inure to the benefit of Payee and its
successors and assigns.
The Loan made by Payee to Maker under the Loan Agreement and all
payments made by Maker on account of the principal amount hereof shall be
recorded by Payee and, prior to any transfer thereof, endorsed on the grid
attached hereto which is part of this Note.
It is the intention of Maker and Payee to conform to applicable usury
laws, if any. Accordingly, notwithstanding anything to the contrary in this
Note or any other agreement entered into in connection herewith, it is agreed
as follows: (a) the aggregate of all interest and any other charges
constituting interest under applicable law and contracted for, chargeable, or
receivable under this Note or otherwise in connection with the obligation
evidenced hereby shall under no circumstances exceed the maximum amount of
interest permitted by applicable law, if any, and any excess shall be deemed a
mistake and cancelled automatically and, if theretofore paid, shall, at the
option of Maker, be refunded to Maker or credited on the principal amount of
this Note; and (b) in the event that the entire unpaid balance of this Note is
declared due and payable by Payee, then earned interest may never include more
than the maximum amount permitted by applicable law, if any, and any unearned
interest shall be cancelled automatically and, if theretofore paid, shall at
the option of Maker, either be refunded to Maker or credited, to the extent
permitted by law, on the principal amount of this Note.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE IN
ALL RESPECTS (AND WITHOUT APPLICATION OF ANY OF ITS CONFLICT OF LAWS
PROVISIONS).
Maker hereby submits to the nonexclusive jurisdiction of the United
States District Court covering Wilmington, Delaware for all purposes of or in
connection with this Agreement; provided that nothing in this Note shall affect
Payee's right to bring any action or proceeding against Maker or its property
in the courts of any other jurisdiction. Maker hereby consents to process
being served in any suit, action or proceeding of the nature referred to above
either (a) by the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt
-2-
<PAGE> 4
requested, to its address shown below its signature hereto or (b) by serving a
copy thereof upon Maker's authorized agent for service of process (to the
extent permitted by applicable law, regardless whether the appointment of such
agent for service of process for any reason shall prove to be ineffective or
such agent for service of process shall accept or acknowledge such service);
provided that, to the extent lawful and practicable, written notice of said
service upon said agent shall be mailed by registered or certified mail,
postage prepaid, return receipt requested, to Maker at its address shown below
its signature hereto. Maker agrees that such service, to the fullest extent
permitted by law, (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall be taken
and held to be valid personal service upon and personal delivery to it.
Nothing herein shall affect Payee's right to serve process in any other manner
permitted by law, or limit Payee's right to bring proceedings against Maker in
the courts of any other jurisdiction.
MAKER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS NOTE OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION
WITH OR RELATED TO THIS NOTE AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
In the event that any term or provision of this Note or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Note, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term and provision of this Note shall be valid and be enforced to the fullest
extent permitted by law.
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<PAGE> 5
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the day and year first above written.
MAKER:
-----
VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED, a company incorporated under
the laws of England and Wales
By: /s/ Vincent Monsey
----------------------------------
Name: Vincent Monsey
Title: Managing Director
-4-
<PAGE> 6
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
SECURED PROMISSORY NOTE
<TABLE>
<CAPTION>
Amount of Interest Principal
Principal Paid Paid Balance
Date or Forgiven (if any) Outstanding
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<S> <C> <C> <C>
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</TABLE>
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<PAGE> 1
8-K
EXHIBIT 99.4
<PAGE> 2
________________________________________________________________________________
SECURED LOAN AGREEMENT
between
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED,
as Borrower,
and
VIDEO JUKEBOX NETWORK, INC.,
as Lender
________________________________________________________________________________
June 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Exhibit, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
AMOUNT AND TERMS OF THE LOAN
Section 2.1. The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. The Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Funding of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Principal and Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Interest After Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7. Basis of Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.8. Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.9. Tax Liability on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.10. Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.11. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.12. Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.13. Payments to Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.14. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
DOCUMENTS DELIVERED
Section 3.1. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.2. Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3. Other Transactional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.5. Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Existence; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2. Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Section 4.3. Title to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4. Consents or Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.6. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.7. No Violations or Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.8. Identity of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.9. Permits, Licenses, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.11. Burdensome Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.12. Financial Statements and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.13. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.14. ITC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.15. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.16. Acquired Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.17. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.18. Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.19. Conduct of Business in the Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.20. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.21. True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
COVENANTS
Section 5.1. Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.2. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.3. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4. Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.5. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.6. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.7. Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.8. Maintenance of Existence, Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.9. Further Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.10. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.11. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.12. Limitations on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.13. Limitation on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.14. Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.15. Limitation on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.16. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.17. Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.18. Continuing Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE VI
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2. Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.2. Currency Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.5. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.6. Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.7. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.10. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.12. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.13. Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.14. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.15. Jurisdiction; Service of Process; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.16. Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.17. Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
-iii-
<PAGE> 6
SECURED LOAN AGREEMENT
THIS SECURED LOAN AGREEMENT (this "Agreement") is made and entered
into as of June 30, 1995 between VIDEO JUKEBOX NETWORK, INC., a Florida
corporation ("Lender"), and VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(registered number 2643552), a company incorporated under the laws of England
and Wales ("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have agreed that Lender shall make a loan
to Borrower on the terms and conditions set forth herein; and
WHEREAS, in connection with such loan Borrower has agreed to grant to
Lender certain security interests as more fully described herein.
NOW, THEREFORE, in consideration of the premises set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lender and Borrower hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the
following terms and phrases shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person (other than, with respect to Lender, the Borrower) that directly,
or indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified Person; provided, however, that
an Affiliate shall not include a Competitor. "Control" (including the terms
"controlling," "controlled by" and "under common control with"), with respect
to the relationship between or among two or more Persons, means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
<PAGE> 7
"Bankruptcy" means (a) an adjudication of bankruptcy under the
U.S. Bankruptcy Reform Act of 1978, as amended, or any successor statute, (b)
the specified Person stops payment of, is deemed unable (under Section 123 of
the Insolvency Act 1986 of the U.K. (the "Insolvency Act")) or otherwise admits
inability to pay its debts or becomes or is deemed to be insolvent, (c) the
making of a winding up or administrative order in respect of the specified
Person, (d) an assignment for the benefit of creditors, (e) the specified
Person either does, resolves to do or commences negotiations with a view to
doing any of the following: (i) makes a general or special arrangement or
composition (whether voluntary or compulsory) with its creditors or any class
of creditors, (ii) declares or agrees to a moratorium, (iii) issues a notice
convening a meeting to resolve to do any of the foregoing (other than for the
purpose of a solvent amalgamation or reconstruction), or (iv) makes a proposal
for a voluntary arrangement under Section 1 of the Insolvency Act to be made in
respect of the specified Person, (f) the filing of a voluntary petition in
bankruptcy or reorganization or the passing of a resolution for voluntary
liquidation, reconstruction or winding up (other than for the purpose of a
solvent amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, provisional liquidator or administrative
receiver for any part or all of the assets or property of a party within 60
days from the date of such appointment.
"Competitor" means an entity operating or controlling either
video music services primarily for use on television broadcasts or cable
channels featuring such services existing as of the date hereof or subsequently
formed services with programming that is substantially similar in format and/or
content to Borrower's programming.
"fiscal year" means any financial (i.e., accounting) year of
Borrower, which currently coincides with the calendar year.
"Governmental Authority" means any federal, state or local, or
foreign government, governmental, regulatory or administrative authority (or
subdivision thereof) and any agency or commission or any court, tribunal or
judicial or arbitral body that has jurisdiction over the Borrower or its
business or assets, including, without limitation, the United States, the
United Kingdom and the Republic of Ireland.
"Liens" means or refers to any lien, claim, charge, pledge,
mortgage, encumbrance, security interest, option, preferential arrangement,
restriction on voting, transfer or other alienation of any kind, adverse
interest, or the interest of a third party under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan" means the loan made by Lender to Borrower hereunder, on
a nonrevolving basis, in the original principal amount of $1,500,000 (U.S.)
(the "Principal Amount" or "Principal").
-2-
<PAGE> 8
"Material Adverse Effect" means any circumstance, change in,
or effect on the business of any specified Person that: (a) is, or could
reasonably be expected to be, materially adverse to the business, operations,
assets or liabilities, results of operations or the financial condition of such
Person, or (b) could reasonably be expected to adversely affect the ability of
such Person to operate or conduct its business in the manner in which it is
currently, or is currently anticipated to be, operated or conducted.
"Obligations" means the unpaid Principal Amount of and
interest on (including, without limitation, interest accruing after the
maturity of the Loan and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loan and all other
obligations and liabilities of the Borrower to Lender, whether direct or
indirect, absolute or contingent, due or to be due, or now existing or
hereafter incurred, which may arise under, out of or in connection with this
Agreement, the Loan, the promissory note evidencing the Loan and any other
documents made, delivered or given in connection therewith or herewith.
"Person" means an individual or any corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental authority or
other entity of any kind.
"Relevant Account Standard" means any applicable SSAP,
Financial Reporting Standard, or Consensus or Statement of Recommended Practice
issued by the Accounting Standards Board in England and Wales, or any committee
thereof or body recognized thereby, in force as of the date hereof.
"SSAP" means United Kingdom Statement of Standard Accounting
Practice.
SECTION 1.2. EXHIBIT, ETC. References to an "Exhibit" or a
"Schedule" are, unless otherwise specified, to one of the Exhibits or Schedules
attached to this Agreement, and references to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
AMOUNT AND TERMS OF THE LOAN
SECTION 2.1. THE LOAN. Subject to the terms and conditions of
this Agreement, Lender agrees to make the Loan to Borrower. Lender shall make
or cause to be made an appropriate notation on Lender's records reflecting the
unpaid Principal Amount of the Loan, and Lender shall make or cause to be made,
at the time of receipt of payment of any Principal or
-3-
<PAGE> 9
interest on the Note (as defined below), an appropriate notation on its records
reflecting such payment. The aggregate unpaid amount of the Note set forth on
Lender's records shall be conclusive evidence, absent manifest error, of the
Principal Amount owing and unpaid on such Note.
SECTION 2.2. THE NOTE. The Loan shall be evidenced by a
secured promissory note of Borrower payable to the order of Lender, which
secured promissory note shall be in the form of Exhibit 2.2 hereto (the
"Note"). The Note, including, without limitation, any interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to Borrower, whether or not a claim for post-filing
interest is allowed in such proceeding), fees, charges, expenses, reimbursement
obligations, and guarantees shall (a) be senior to and have priority in right
of payment to all amounts payable under or in respect of any other Indebtedness
(as defined in Section 4.6) of Borrower, whether currently outstanding or
incurred in the future, and (b) rank pari passu, in accordance with the terms
of that certain Intercreditor Agreement, among Borrower, Lender, TM/Video
International, Inc., a Delaware corporation ("Ticketmaster"), and the Agent
thereunder (the "Intercreditor Agreement"), with that certain loan made
concurrently herewith by Ticketmaster to Borrower, as evidenced by that certain
Secured Promissory Note and Secured Loan Agreement, each dated the date hereof.
SECTION 2.3. FUNDING OF LOAN. Upon the full execution and
delivery of this Agreement, the Note and the other documents to be delivered by
Borrower pursuant to Article III hereof (the "Funding Date"), Lender shall lend
to Borrower the Principal Amount of the Loan by wire transfer of immediately
available funds to an account designated in writing by Borrower.
SECTION 2.4. INTEREST RATE. Borrower shall pay to Lender
interest on the unpaid Principal Amount of the Note from and including the
Funding Date to the date of maturity of the Note (whether at stated maturity,
by acceleration or otherwise), at a rate equal to the prime rate as quoted by
the New York, New York branch of NatWest Bank N.A., from time to time, plus one
percent (1%), compounded quarterly (the "Base Rate").
SECTION 2.5. PRINCIPAL AND INTEREST PAYMENT DATES. For the
initial two years during which the Note is outstanding, interest shall accrue
on the outstanding Principal but Borrower shall make no payments of interest or
Principal. For the third through fifth years during which the Note is
outstanding and commencing on July 1, 1997, Borrower shall make quarterly
payments, consisting only of current interest on the Note. The Principal
Amount of the Note, together with accrued interest thereon, shall be payable by
Borrower in equal quarterly installments commencing on the July 1st following
the fifth anniversary of the Funding Date and continuing until and including
the quarter ended September 30, 2004, with a final installment of all unpaid
Principal and accrued interest on October 1, 2005. Whenever any payment under
this Agreement shall be due on a day that is not a Business Day, such payment
shall be made on the
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<PAGE> 10
next succeeding Business Day and such extension of time shall be included in
the computation of the payment of interest on the Note.
SECTION 2.6. INTEREST AFTER DEFAULT. Borrower shall pay to
Lender, on demand, interest on any amount of the Loan and any interest accrued
but unpaid thereon which is not paid when due, whether at stated maturity, by
acceleration or otherwise, accruing from and including the date such amount
shall have become due to the date of payment thereof in full, at the rate per
annum equal to the Base Rate (as then computed) plus 4%.
SECTION 2.7. BASIS OF CALCULATION. Interest on the Loan shall
be computed on the basis of the actual number of days elapsed and a year of 360
days.
SECTION 2.8. MAXIMUM INTEREST. Notwithstanding any provision
of this Agreement, no interest shall accrue or be payable at a rate in excess
of that permissible under applicable law.
SECTION 2.9. TAX LIABILITY ON INTEREST. In the event that any
tax authority of the United Kingdom or the Republic of Ireland imposes a
withholding obligation or asserts tax liability against Lender with respect to
such interest, Borrower shall reimburse Lender for the amount of such
withholding or asserted taxes, as computed on an after-tax basis to Lender.
Such reimbursement shall be paid by Borrower within 30 days after receipt of
notice from Lender that such withholding obligation or tax liability has been
imposed.
SECTION 2.10. MATURITY DATE. Subject to Section 2.12 hereof and
if not sooner paid, the entire unpaid Principal balance of the Note, together
with accrued and unpaid interest thereon, shall become due and payable by
Borrower on the earliest to occur of (a) the 10 year anniversary of the Funding
Date and (b) the date upon which the Loan and the Note shall have been declared
due and payable upon the occurrence of an Event of Default (as defined in
Section 7.1).
SECTION 2.11. VOLUNTARY PREPAYMENTS. Upon five business day's
prior written notice to Lender, Borrower, without premium or penalty, may
prepay the Principal Amount, in whole or in part, together with accrued and
unpaid interest to the date of prepayment on the Principal Amount being
prepaid.
SECTION 2.12. MANDATORY PREPAYMENT. Borrower shall prepay the
entire unpaid principal balance of the Note, together with accrued and unpaid
interest thereon, no later than five days following the earliest to occur of
(a) expiration of the term, or termination caused by breach by Lender or
Borrower, of that certain license dated as of the date hereof granted by Lender
to Borrower (the "VJN License"), (b) termination, whether by expiration of the
term, breach by Borrower, revocation or otherwise, of that certain License No.
LPS044 granted to Borrower by the Independent Television Commission on February
11, 1992, which came into force on February 14, 1992 (the "ITC License"), or
(c) the acceleration of all amounts outstanding
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under the Note in accordance with Section 7.2 upon the occurrence of an Event
of Default (as defined in Section 7.1). All prepayments received by Lender
pursuant to this Section 2.12 shall be applied first to accrued and unpaid
interest on the Loan with the remainder, if any, to be applied to the unpaid
Principal Amount of the Loan.
SECTION 2.13. PAYMENTS TO LENDER. All payments to Lender by
Borrower shall be made in lawful money of the United States of America in
immediately available funds and delivered to Lender at its office as set forth
on the signature page hereto, Attention: Chief Financial Officer, or such
other place or into such account as Lender may from time to time designate in
writing. Until notified in writing of the assignment of this Agreement and the
Note, Borrower shall be entitled to deem Lender or such Persons who have been
so identified by Lender in writing to Borrower as the holder of the Note, as
the owner and holder of the Note. Unless otherwise expressly provided herein,
all payments made by Borrower to Lender shall be applied first to accrued and
unpaid interest on the Loan and the remainder thereof to the unpaid Principal
Amount of the Loan.
SECTION 2.14. COLLATERAL. The payment of and performance of all
agreements relating to the Obligations will be secured by all of the property
and assets of Borrower (the "Collateral") set forth with specificity in that
certain Debenture, in the form of Exhibit 2.14, to be executed by Borrower and
Lender concurrently herewith (the "Debenture").
ARTICLE III
DOCUMENTS DELIVERED
Unless waived in writing by Lender, Lender's obligation to make the
Loan to Borrower as contemplated herein shall be subject to Borrower's delivery
to Lender of the following documents (duly executed by Borrower or other
parties, as the case may be) and all documents referred to therein required to
be delivered therewith:
SECTION 3.1. NOTE. Executed original of the Note.
SECTION 3.2. SECURITY DOCUMENTS. Executed original of the
Debenture.
SECTION 3.3. OTHER TRANSACTIONAL DOCUMENTS. Executed originals
of the following documents, which are to be executed concurrently herewith and
dated as of the date hereof (collectively, the "Transaction Documents"):
(a) the Stockholders Agreement among TM No. 2 Limited
("TM No. 2"), Lender and Borrower;
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(b) the Administrative Services Agreement among TM No.
2, Borrower and Lender pursuant to which, among other things, TM No. 2 will
subscribe for 110 Ordinary Shares of Borrower in exchange for a Promissory Note
of TM No. 2;
(c) the Stock Purchase Agreement between TM No. 2,
Lender and Borrower under which TM No. 2 will purchase from Lender 246 Ordinary
Shares of Borrower;
(d) that certain Deed of Tax Covenant between Lender
and TM No. 2;
(e) true and correct copies of each of that certain
Secured Loan Agreement, Secured Promissory Note and Debenture, executed by
Ticketmaster and/or Borrower, as appropriate, evidencing all indebtedness of
Borrower to Ticketmaster;
(f) the VJN License;
(g) that certain letter agreement among Lender, TM No.
2 and Lender relating to potential post-closing indemnification obligations of
Lender to TM No. 2 and Ticketmaster;
(h) the Intercreditor Agreement, pursuant to which
Ticketmaster and Lender coordinate the administration and priority of their
respective loans to Borrower and the security interests in the Collateral
granted in connection therewith;
(i) those certain employment agreements between
Borrower and each of Vincent P. Monsey and Elizabeth A. Laskowski; and
(j) that certain Stock Purchase Agreement among
Vincent P. Monsey, Lender and Borrower pursuant to which Mr. Monsey will sell
the 54 Series B Ordinary Shares of Borrower, of which he is the beneficial
owner, and transfer title to the 36 Series B Ordinary Shares of Borrower, of
which he has legal title, to Lender.
SECTION 3.4. CLOSING DOCUMENTS. Executed originals or
certified copies, as appropriate, of the following, which are to be executed
concurrently herewith and dated the Funding Date:
(a) a copy of (i) Borrower's Memorandum of Association
and Articles of Association, and (ii) resolutions of the Board of Directors of
Borrower authorizing Borrower's execution, delivery and performance of this
Agreement and each of the Transaction Documents to which Borrower is a party,
in each case certified by the Secretary of Borrower;
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(b) an incumbency and specimen signature certificate
with respect to those officers of Borrower who will execute this Agreement and
the other documents and instruments contemplated hereby, including, without
limitation, the Transaction Documents;
(c) the opinion of Denton Hall, counsel to Lender, in
the form of Exhibit 3.4, attached hereto; and
(d) certificate(s) of insurance signed by Borrower's
insurer and dated no earlier than 10 days prior to the Funding Date evidencing
Borrower's compliance with Section 5.6.
SECTION 3.5. ADDITIONAL DOCUMENTS. Such other or additional
documents or instruments as Lender may reasonably require hereunder, all of
which shall be reasonably satisfactory to Lender as to form and substance.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and to make the Loan
hereunder, Borrower hereby represents and warrants to Lender the following
(which representations and warranties shall survive the execution and delivery
of this Agreement and the disbursement of the Loan hereunder):
SECTION 4.1. EXISTENCE; SUBSIDIARIES. Borrower (a) is a duly
registered, incorporated and validly existing corporation, in good standing
under the laws of the England and Wales, (b) has the power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct its business as it has been, is currently,
and is currently anticipated to be conducted, and (c) has no subsidiaries.
SECTION 4.2. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Borrower has the power and authority, and the legal right, to make, deliver and
perform this Agreement, the Note, the Transaction Documents, the Debenture and
the other documents contemplated hereby (collectively, the "Loan Documents"),
and has taken all necessary corporate action to authorize the issuance of the
Note and the execution, delivery and performance of the Loan Documents. Each
Loan Document has been or will be duly executed and delivered by Borrower and
constitutes or will constitute a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms.
SECTION 4.3. TITLE TO COLLATERAL. Borrower is, and at all
times until all of the Obligations are repaid in full will be, the lawful owner
of all of the Collateral, free of all Liens
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other than the security interest granted hereunder and the Liens set forth on
Schedule 4.3 hereto (collectively, "Permitted Liens"), with full power and
authority to subject the Collateral to the security interest hereunder.
SECTION 4.4. CONSENTS OR APPROVALS. Except as set forth on
Schedule 4.4 hereto, no consents or approvals are required in connection with
the execution, delivery and performance by Borrower of the Loan Documents.
SECTION 4.5. LITIGATION. Except as set forth on Schedule 4.5
hereto, no litigation, arbitration proceedings or governmental proceedings are
pending or, to Borrower's knowledge, threatened against Borrower (or, to
Borrower's knowledge, any of its directors, officers, employees or agents)
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect on Borrower or could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby.
SECTION 4.6. INDEBTEDNESS. Borrower is not obligated, directly
or indirectly, with respect to any Indebtedness (as defined herein), other than
Indebtedness in respect of the Obligations and the Indebtedness set forth on
Schedule 4.6 hereto (all of which, except to the extent expressly indicated on
Schedule 4.6, is and will be subordinate in right of payment to the
Obligations), and Indebtedness in respect of (a) current accounts payable
incurred in the ordinary course of Borrower's business, (b) accrued expenses
and (c) other current items arising out of transactions (other than
indebtedness in respect of borrowed money or with respect to guarantee
obligations) in the ordinary course of Borrower's business.
For the purposes of this Agreement "Indebtedness" shall mean, with
respect to Borrower and at any date, (i) all indebtedness, whether or not
contingent, for borrowed money, (ii) all obligations for the deferred purchase
price of property or services, (iii) all obligations evidenced by notes, bonds,
debentures or other similar instruments, (iv) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), (v) all obligations as lessee under
leases that have been or should be, in accordance with GAAP (as defined in
Section 4.10) or in accordance with Relevant Accounting Standards or all and
any laws, statutes, treaties, rules, regulations or determinations of any
Governmental Authority (collectively, "Requirements of Law"), recorded as
capital leases, (vi) all obligations, contingent or otherwise, under bankers
acceptances, letters of credit or similar instruments and obligations, (vii)
all obligations to purchase, redeem, retire, defease or otherwise acquire for
value any equity interest of Borrower or any warrants, rights or options to
acquire such capital stock, valued, in the case of redeemable preferred stock,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (viii) all Indebtedness of others referred to in
clauses (i) through (vi) above
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<PAGE> 15
guaranteed directly or indirectly in any manner by Borrower, or in effect
guaranteed directly or indirectly by Borrower through an agreement (A) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the obligor to make payment of such Indebtedness or to assure the
holder of such Indebtedness against loss, (C) to supply funds to or in any
other manner invest in the obligor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered) or (D) otherwise to assure a creditor against loss, and (E) all
Indebtedness referred to in clauses (i) through (vi) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by Borrower, even though
Borrower has not assumed or become liable for the payment of such Indebtedness.
SECTION 4.7. NO VIOLATIONS OR CONFLICTS. The execution,
delivery and performance by Borrower of the Loan Documents, the use of the
proceeds of the Loan and the consummation of the other transactions
contemplated hereby and thereby are within Borrower's objects and powers and
(a) will not violate any Requirement of Law, which violation could have a
Material Adverse Effect; (b) will not violate, conflict with or result in the
breach of any provision of the Memorandum or Articles of Association of
Borrower; (c) will not violate, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
indenture, agreement for borrowed money, bond, note or other similar instrument
or any other agreements to which Borrower is a party or by which any of its
properties or assets are bound; and (d) will not result in, or require the
creation or imposition of any Lien on any of its properties or revenues, other
than Liens created, imposed or evidenced by the Loan Documents.
SECTION 4.8. IDENTITY OF BORROWER. Schedule 4.8 hereto lists
all names by which Borrower is now known, was previously known or under which
Borrower has done business since its formation on September 6, 1991. Borrower
has not been known by any other legal or assumed name different from the one
set forth on the cover page of this Agreement during the five years preceding
the execution of this Agreement.
SECTION 4.9. PERMITS, LICENSES, ETC. Borrower has and at all
times during the term of this Agreement will maintain, all permits, licenses,
accreditations and certifications necessary to conduct its business as
currently conducted, except where the failure to have or maintain the same
could not have a Material Adverse Effect.
SECTION 4.10. TAXES. Schedule 4.10 hereto contains a true and
complete (a) summary description of all taxes and assessments to which Borrower
is subject and (b) list of all tax returns and reports relating to fiscal year
ending December 31, 1994 that Borrower has filed (and the amount of taxes paid
in connection therewith) or is required to file. Borrower has filed or caused
to be filed all tax returns which are required to be filed and has paid all
taxes due and
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<PAGE> 16
payable or any assessments made against it or any of its property, and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority due on or before the date of this Agreement (other than
any the amount or validity of which is currently being contested in good faith
by proper proceedings with appropriate surety posted in connection therewith,
if required, and with respect to which proper reserves in accordance with the
United Kingdom's general accepted accounting principles ("GAAP"), any Relevant
Accounting Standards and in accordance with all other Requirements of Law have
been provided on the books of Borrower) and no tax Lien has been filed and, to
the knowledge of Borrower, no claim is being asserted with respect to any such
tax, fee or other charge. Borrower is not a party to any tax sharing or
similar agreements.
SECTION 4.11. BURDENSOME OBLIGATIONS. Except as set forth in
Schedule 4.11 hereto, Borrower is not a party to any indenture, loan, credit
agreement, lease or other agreement or instrument, or subject to any charge or
other restriction, that Borrower presently anticipates could have a Material
Adverse Effect. Borrower presently does not anticipate that future
expenditures required or appropriate to meet the provisions of any Requirements
of Law will be so burdensome so as to have a Material Adverse Effect.
SECTION 4.12. FINANCIAL STATEMENTS AND PROJECTIONS.
(a) All balance sheets, profit and loss accounts and
all other financial information of Borrower which have been or hereafter shall
be furnished by or on behalf of Borrower to Lender for the purposes of or in
connection with this Agreement or any transaction contemplated hereby,
including (a) the audited balance sheet as of December 31, 1994 and the related
audited profit and loss account for the fiscal year then ended, together with
all notes and schedules thereto (the "Year End Financial Statements") and (b)
the unaudited balance sheet of Borrower at April 30, 1995 and the related
unaudited profit and loss account and statement of cash flows of Borrower (the
"Interim Financial Statements") have been or will be prepared in accordance
with GAAP, all Relevant Accounting Standards and the Companies Act 1985 of the
U.K., as amended by the Companies Act 1989 (the "Companies Act"), consistently
applied throughout the periods involved (except as disclosed therein) and do or
will give a true and fair view of the state of affairs of Borrower as at the
dates therefor and the results of their operations for the periods then ended,
subject to year-end adjustments consisting only of normal recurring accruals.
On the Closing Date, Borrower will not have any liabilities, greater than
L.100,000 individually or in the aggregate, whether prospective, contingent or
otherwise, including for Taxes, long-term leases or unusual forward or
long-term commitments, which are not fully provided for in the Interim
Financial Statements, whether or not required to be so fully provided for as of
the date thereof, except for those liabilities incurred since the date thereof
in the ordinary course of Borrower's business or as described on Schedule 4.6
and those liabilities reflected in the footnotes to the Year End Financial
Statements.
(b) The annual operating budget of Borrower for fiscal
year 1995 (the "Budget"), that heretofore has been delivered to Lender, has
been prepared in light of the past operations of Borrower. The Budget has been
prepared in good faith, on the basis of honestly
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<PAGE> 17
held views of management of Borrower, using accounting principles and methods
consistent with those used in preparing the Year End Financial Statements,
except that the Budget omits (A) certain footnote disclosures and financial
statement presentation items required by GAAP, all applicable Relevant
Accounting Standards and/or the Companies Act and (B) certain year end
adjustments consisting only of normal recurring accruals usually included in
the preparation of year end financial statements. The Budget is based on
reasonable and realistic assumptions in light of current economic conditions
and Borrower has no knowledge of any reason why Borrower should not be able to
achieve the performance levels set forth in the Budget in light of current
economic conditions. Lender acknowledges that some of the assumptions upon
which the Budget has been based may not materialize.
(c) Since December 31, 1994, Borrower has not paid or
declared any dividend or distribution with respect to its share capital.
SECTION 4.13. SECURITY. The Debenture is effective to create a
valid, continuing and enforceable security interest in favor of Lender with
respect to all of Borrower's right, title and interest in and to the Collateral
and is in proper form for registration in the United Kingdom, the Republic of
Ireland and in other jurisdictions in which Borrower conducts business or
Borrower's assets are located. Upon the execution and delivery of the
Debenture, this Agreement and the Note, and the registration of the Debenture
with Companies House in the U.K. (pursuant to Section 395 of the Companies
Act), Lender will have a fully perfected, first priority Lien (which will rank
pari passu, on a first priority basis, with the indebtedness of Borrower to
Ticketmaster evidenced by the Transaction Documents described in Section
3.3(e)) on and security interest in all of Borrower's right, title and interest
in and to the Collateral, superior in right to that of any other Person,
subject only to those Liens relating to the Permitted Liens and to the terms of
the Intercreditor Agreement described in Section 3.3(g).
SECTION 4.14. ITC LICENSE. The ITC License is in full force and
effect and has not been amended or modified from the copy of such License
heretofore delivered by Borrower to Lender. Borrower is in full compliance
with all material conditions and provisions of the ITC License, including
without limitation all provisions relating to programme standards and record
keeping requirements. Borrower is not, and has not received any notice that it
is, in default or breach under the ITC License and no event has occurred and no
condition or state of facts exists (other than the transactions contemplated
herein, including, without limitation, the transactions contemplated by the
Transaction Documents, with respect to which Borrower makes no representation)
that, with the passage of time or the giving of notice or both, could
constitute a default or breach under the ITC License. Borrower, on a timely
basis, has made all payments and filings required under the ITC License.
Borrower has not received any notice that the Independent Television Commission
has revoked or intends to revoke the ITC License and, to the best knowledge of
Borrower, no action is threatened or in progress against Borrower with respect
thereto.
SECTION 4.15. INSURANCE. Schedule 4.15 hereto sets forth a
true and complete list and brief description (including nature of coverage,
limits, deductibles and premiums with respect to
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each type of coverage) of (a) all policies of insurance maintained on behalf
of, owned or held by Borrower, and (b) all claims outstanding on the foregoing
policies, or policies previously maintained by or on behalf of, Borrower and
the status of such claims. All of the policies of insurance listed on Schedule
4.15 are in full force and effect as of the date hereof and, to the best
knowledge of Borrower, will continue in full force and effect until the
respective expiration date reflected on Schedule 4.15; no notice of
cancellation or termination has been received with respect to any such policy;
and Borrower heretofore has delivered to Lender true and correct copies of all
such policies of insurance (including all amendments and endorsements thereto).
SECTION 4.16. ACQUIRED ASSETS. Each asset of Borrower
(including, without limitation, the benefit of any licenses, leases or other
agreements or arrangements) acquired since the date of the Interim Financial
Statements has been acquired for consideration and on terms no less favorable
to Borrower than otherwise would have been available in a comparable arms'
length transaction on the date of such acquisition, except for assets with an
aggregate acquisition cost of not more than L.25,000.
SECTION 4.17. BOOKS AND RECORDS. The books of account and other
financial records of Borrower: (a) reflect all items of income and expense and
all assets and liabilities required to be reflected therein, except to the
extent that the omission to reflect such items could not, individually or in
the aggregate, have a Material Adverse Effect, (b) are complete and correct,
not misleading and do not contain or reflect any inaccuracies or discrepancies,
except as could not, individually or in the aggregate, have a Material Adverse
Effect, and (c) have been maintained in accordance with good business and
accounting practices.
SECTION 4.18. RECEIVABLES. Except to the extent, if any,
provided for on the balance sheet included in the Interim Financial Statements,
all receivables reflected on the balance sheet included in the Interim
Financial Statements arose from, and the receivables existing as of the Closing
Date will have arisen from, the sale of services to persons not Affiliated with
Borrower and in the ordinary course of its business consistent with past
practice and, except as provided against on the balance sheet included in the
Interim Financial Statements, constitute or will constitute, as the case may
be, only valid, undisputed claims of Borrower not subject to valid claims of
set-off, off- set or other defenses or counterclaims. The Interim Financial
Statements make full provision for all doubtful debts and all bad debts have
been written off, except for doubtful debts and bad debts that, individually or
in the aggregate, would not have a Material Adverse Effect on Borrower.
SECTION 4.19. CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Since
the date of the Interim Financial Statements, and except as disclosed on
Schedule 4.19 or as otherwise specifically permitted hereby, Borrower has
conducted business only in the ordinary course and consistent with past
practice.
SECTION 4.20. COMPLIANCE WITH LAWS. Except as set forth on
Schedule 4.20, Borrower has conducted and continues to conduct its business in
all material respects in accordance with all Requirements of Laws entered by or
with any Governmental Authorities, and
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Borrower is in compliance with all such Requirements of Laws, except to the
extent that the failure to so conduct or comply therewith would not, in the
aggregate, have a Material Adverse Effect on Borrower.
SECTION 4.21. TRUE AND COMPLETE DISCLOSURE. All of the Loan
Documents and all documents, certificates, written statements and/or written
information furnished to Lender by or on behalf of Borrower in connection
therewith, including all information with respect to the Collateral, that is
set forth in any schedule, certificate or other writing at any time heretofore
or hereafter furnished by Borrower, do not and will 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 and therein not misleading. To
the best knowledge of Borrower, there is no fact relating to Borrower (other
than general economic conditions or regulatory conditions specific to
Borrower's industry) which currently or in the future could be reasonably
expected to have a Material Adverse Effect and which has not been disclosed
either in this Agreement or the other Loan Documents (including any annex,
schedule or exhibits thereto), which have heretofore or concurrently been
delivered to Lender.
ARTICLE V
COVENANTS
So long as any portion of the Obligations remains outstanding or any
part of the Loan Documents have not been performed in full Borrower shall do
the following:
SECTION 5.1. FINANCIAL REPORTS. Furnish to Lender, as soon as
practicable but in no event later than 90 days after the last day of each
fiscal year and 45 days after the last day of each fiscal quarter, an audited
annual and unaudited quarterly financial statements, respectively, of Borrower
on a consolidated basis, including a balance sheet, profit and loss account and
statement of cash flows; provided, however, that so long as Borrower's
financial statements are consolidated or presented with Lender's financial
statements for reporting purposes, the foregoing time periods shall be extended
to the extent and for the time that Lender shall have received an extension of
filing time from the Securities and Exchange Commission pursuant to Rule 12b-25
promulgated under the Securities Exchange Act of 1934, as amended. In
addition, Borrower shall furnish to Lender, as soon as practicable but in no
event later than 30 days after the last day of each month, an unaudited monthly
and year-to-date profit and loss account. Notwithstanding the foregoing,
Borrower shall deliver from time to time to Lender such other information
concerning the financial condition and results of operations of Borrower as
Lender may reasonably request, in such form and at such time as Lender may
reasonably request, in order for Lender to comply with any reporting
requirements to which Lender or its Affiliates is subject pursuant to
applicable law.
SECTION 5.2. COMPLIANCE CERTIFICATE. Furnish to Lender, no
later than 45 days after the last day of each fiscal quarter, a certificate
signed by the Managing Director of Borrower, in form and substance satisfactory
to Lender, which certifies that (a) all of the representations and
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warranties of Borrower contained herein and in the Debenture are true and
correct as of the date thereof, other than those representations and warranties
which by their terms were made expressly as of another date, and (b) Borrower
is in compliance as of the date thereof with all covenants contained herein and
in the Debenture.
SECTION 5.3. TAXES AND LIABILITIES. File all tax returns when
due, and pay and discharge when due, all taxes, assessments and other
liabilities (including, without limitation, liabilities which could result in
the imposition of any Lien), except where contested in good faith and by proper
proceedings, with appropriate surety posted in connection therewith, if
required, and for which proper reserves are being maintained to the extent
required in accordance with GAAP and any other Requirement of Law.
SECTION 5.4. COMPLIANCE WITH APPLICABLE LAWS. Comply with all
Requirements of Law, a breach of which could affect the interest of Lender
hereunder, except where contested by Borrower in good faith and by proper
proceedings with appropriate surety posted in connection therewith, if
required, and for which proper reserves are being maintained to the extent
required in accordance with GAAP and any other Requirement of Law.
SECTION 5.5. PAYMENT OF OBLIGATIONS. Pay, discharge or
otherwise satisfy at or before maturity, or before default or delinquency, as
the case may be, all its obligations of whatever nature, except where the
amount or validity thereof is being contested in good faith by proper
proceedings with the appropriate surety posted in connection therewith, if
required, and for which proper reserves in accordance with GAAP and any other
Requirement of Law with respect thereto have been provided on the books of
Borrower, as the case may be, and except payables incurred in the ordinary
course of business, which may be delinquent for a period of no more than 90
days, and where the failure to pay, discharge or otherwise satisfy such
payables on a timely basis does not have a Material Adverse Effect.
SECTION 5.6. MAINTENANCE OF PROPERTY; INSURANCE. Not dispose
of (other than in the ordinary course of business) and keep all Collateral in
good working order and condition, ordinary wear, tear and damage due to
casualties excluded; maintain the insurance policies listed on Schedule 4.15,
or obtain from financially sound and reputable insurance companies
substantially similar replacement insurance policies in at least such amounts
and against at least such risks (but including in any event public liability)
as is reasonably requested by Lender, which insurance shall name Lender as an
additional insured; and furnish Lender, on the Funding Date and upon each
renewal, with a certificate(s) of insurance signed by the insurer showing the
insurance then maintained by Borrower as required by this Section 5.6 and, upon
written request, such other information as to the insurance carried.
SECTION 5.7. INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. Keep proper books of record and account in which full, true and
correct entries in accordance with GAAP, the Companies Act, Relevant Accounting
Standards, SSAP and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and subject to
applicable Requirements of Law regarding confidentiality of records, permit
representatives
-15-
<PAGE> 21
of Lender to visit and inspect any of its properties, and examine and make
abstracts from any of its books and records, at any reasonable time upon
reasonable prior written notice and as often as may reasonably be desired, and
to discuss the business, operations, properties, and financial and other
condition, of Borrower with officers and directors of Borrower, with its
independent certified public accountants (with representatives of Borrower
present) and with employees of Borrower with the prior approval of the
management of Borrower, which approval shall not be unreasonably withheld or
delayed.
SECTION 5.8. MAINTENANCE OF EXISTENCE, PERMITS AND LICENSES.
Do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its corporate existence, material rights, licenses, permits
and franchises required to conduct its businesses.
SECTION 5.9. FURTHER DOCUMENTATION. At any time and from time
to time, upon the written request of Lender and at the sole expense of
Borrower, promptly and duly execute and deliver such further instruments and
documents and take such further actions as Lender may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
the other Loan Documents and of the rights and powers herein and therein
granted.
SECTION 5.10. LIMITATION ON INDEBTEDNESS. Not create, incur,
assume or suffer to exist any Indebtedness except:
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness of Borrower existing on the Funding
Date and listed on Schedule 4.6 hereto, or upon the refunding or refinancing
thereof, on terms reasonably satisfactory to Lender; provided that Borrower
shall not amend, modify or change, or consent or agree to any amendment,
modification or change to, any of the terms relating to the payment or
prepayment of principal of or interest on any such Indebtedness without
Lender's prior written consent; or
(c) Indebtedness in respect of current accounts
payable incurred in the ordinary course of Borrower's business, accrued
expenses and other current items arising out of transactions (other than
Indebtedness in respect of borrowed money or with respect to guarantee
obligations) in the ordinary course of Borrower's business.
SECTION 5.11. LIMITATION ON LIENS. Not create, incur, assume or
suffer to exist, directly or indirectly, any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, except for:
(a) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation, and
deposits securing liability to insurance carriers under insurance or self-
insurance arrangements;
-16-
<PAGE> 22
(b) deposits not to exceed L.25,000 in the aggregate
to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;
(c) Permitted Liens and other Liens existing on the
Funding Date which secure indebtedness referred to in Section 5.10(b);
(d) easements, rights of way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of Borrower; or
(e) Liens to secure the Indebtedness in respect of the
Obligations.
SECTION 5.12. LIMITATIONS ON FUNDAMENTAL CHANGES. Not enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of all or substantially all of its
property, business or assets, or make any material change in its present method
of conducting business.
SECTION 5.13. LIMITATION ON DISTRIBUTIONS. Not declare or make
any distributions on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any equity interest in or of
Borrower, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash, property,
or obligations of Borrower, unless and to the extent, but only to the extent,
that Borrower's Net Worth (as hereinafter defined) exceeds L.12,800,000;
provided, however, that Borrower shall not declare or pay any dividends or
other distributions in respect of its capital stock that, in the aggregate,
exceed 50% of Borrower's consolidated net income for the fiscal year to which
such dividend or other distribution relates. For purposes of this Agreement,
"Net Worth" means total assets less total liabilities, determined on a
consolidated basis in accordance with GAAP, excluding any increase as a result
of revaluation of assets.
SECTION 5.14. LIMITATION ON CAPITAL EXPENDITURES. Not make or
commit to make (by way of the acquisition of securities of a Person or
otherwise) any expenditure in respect of the purchase or other acquisition of
fixed or capital assets (excluding any such asset acquired in connection with
normal replacement and maintenance programs properly charged to current
operations) except for Capital Expenditures (as herein defined) not exceeding
the amounts approved in the Annual Budget (as herein defined) of Borrower for
the relevant fiscal year of Borrower; provided, however, that any amounts not
so expended in any fiscal year may be carried forward to, but only to, the next
following fiscal year for Capital Expenditures.
For purposes of this Agreement, the term
-17-
<PAGE> 23
(a) "Capital Expenditures" means funds paid or set
aside or Indebtedness incurred with respect to the acquisition of (i) assets,
including improvements and enhancements thereon, the returns on which or
repayments of which are expected to extend more than one year after acquisition
and (ii) assets which are required by GAAP to be recorded on Borrower's books
as long-term assets; and
(b) "Annual Budget" means each annual operating budget
with respect to any specified fiscal year of Borrower that is approved by
Borrower's Board of Directors pursuant to Section 2.9(e) of the Stockholders
Agreement described in Section 3.3(a), which budget sets forth individually
identified and aggregate expenditures and indebtedness that the appropriate
officers and/or managers of Borrower are authorized to make or incur.
SECTION 5.15. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES.
Not make any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of, interest
in, or any assets constituting a business unit of, or make any other investment
in, any Person.
SECTION 5.16. TRANSACTIONS WITH AFFILIATES. Except as permitted
by Section 2.10 or 2.11 of the Stockholders Agreement described in Section
3.3(a), not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property, or the rendering of any service,
with any Affiliate unless such transaction is in the ordinary course of
Borrower's business and is upon fair and reasonable terms no less favorable to
Borrower than it could obtain in a comparable arm's length transaction with a
Person not an Affiliate, and the terms of such transaction are disclosed in
advance in writing to Lender.
SECTION 5.17. CLAIMS. Not amend, terminate, cancel or
compromise any claims of Borrower in excess of L.80,000 individually or
L.400,000 in the aggregate or waive any other rights of substantial value to
Borrower.
SECTION 5.18. CONTINUING REPRESENTATIONS. Cause each of the
representations and warranties contained in Article IV to be true and correct
during the time any Obligations remain outstanding.
ARTICLE VI
INDEMNIFICATION
Borrower hereby agrees to indemnify Lender and hold Lender harmless
from and against any and all claims, damages, losses, liabilities, costs,
expenses and fees (including, without limitation, attorneys fees and court
costs) resulting from Borrower's breach of any representation, warranty,
agreement or covenant made by Borrower to Lender in this Agreement or the other
Loan Documents. The indemnification provisions of this Article VI shall
survive the funding of the Loan and any termination of this Agreement or any of
the other Loan Documents.
-18-
<PAGE> 24
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an "Event of Default" under this
Agreement:
(a) Borrower shall fail to pay when due the principal
amount of the Loan or any portion thereof;
(b) Borrower shall fail to pay when due any interest
which has accrued on the Loan and such failure shall continue for three days;
(c) any representation or warranty made by Borrower
herein, including Section 2.9, or in the other Loan Documents shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made;
(d) Borrower shall default in the observance or
performance of the VJN License or the ITC License, or either of the VJN License
or the ITC License shall be terminated or revoked for any reason;
(e) Borrower shall default in the observance or
performance in any material respect of any covenant or agreement contained in
this Agreement, including Section 2.9, or any of the other Loan Documents or
any of the Transaction Documents and such default shall not of its nature be
curable by Borrower, or if curable, such default shall continue uncured for the
greater of (i) a period of 15 days after receipt by Borrower of written notice
from Lender to such effect and (ii) the expiration of any cure period provided
in the applicable Transaction Document; provided, however, such cure period
shall not apply to any default of any covenant or agreement contained herein
which could constitute an Event of Default described in Section 7.1(a), (b) or
(g);
(f) Borrower shall fail to make any payment when due
in respect of any other Indebtedness of Borrower in excess of L.320,000
(subject to any applicable grace or cure periods) or is otherwise in default
thereunder, if the effect of such default is to accelerate the maturity of any
such indebtedness or to permit the holder or holders of such indebtedness to
cause such indebtedness to become due and payable prior to its expressed
maturity;
(g) Borrower shall fail to maintain any permits or
licenses necessary to any material aspect of the conduct of Borrower's business
and such default shall not of its nature be curable by Borrower, or if curable,
shall not be cured within 30 days after Borrower receives notice thereof;
-19-
<PAGE> 25
(h) one or more judgments or decrees shall be entered
against Borrower including in the aggregate a liability of L.400,000 or more,
and all such judgements or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal, within 60 days of the entry thereof;
(i) any distress, execution, sequestration or other
process is levied, enforced upon or sued out against any of the assets of
Borrower;
(j) any judgment or order made against Borrower is not
complied with within seven days (unless a valid appeal has been lodged by
Borrower against such judgment or order);
(k) Borrower either does or threatens to do any of the
following: ceases to carry on all or a material part of the business conducted
by it at the date of this Agreement; sells or otherwise disposes (in one or
more transactions) of all or a substantial part of its assets; or changes the
nature or mode of conduct of its trading in any material respect;
(l) any proceeding is initiated or any other action
taken with respect to the Bankruptcy of Borrower; or
(m) any event, proceeding or action occurs or is taken
with respect to Borrower in any jurisdiction to which it is subject which is
analogous to any of the events, proceedings or actions referred to in Section
7.1(i)-(l) above.
SECTION 7.2. EFFECT OF EVENT OF DEFAULT. If any Event of
Default shall occur, the principal amount of the Note and all accrued and
unpaid interest thereon and other amounts due with respect to the Note shall
(a) at the option of Lender, become immediately due and payable forthwith, if
the Event of Default is of a type specified in any of Section 7.1(a) through
(h), and (b) immediately and automatically thereupon and concurrently therewith
become due and payable, if the Event of Default is of the type specified in
Section 7.1(i) through (l), all without presentment, demand, notice or protest
of any kind (all of which are hereby expressly waived by Borrower), and Lender
may exercise from time to time any rights and remedies available to it under
applicable law or otherwise. In addition, Borrower agrees to assemble, at its
expense and at Lender's request, all or any part of the Collateral (other than
fixtures) at a convenient place or places acceptable to Lender. Borrower
hereby expressly waives, to the fullest extent permitted by applicable law, any
and all notices, advertisements, hearings or process of law in connection with
Lender's exercise of any of its rights and remedies upon an Event of Default.
-20-
<PAGE> 26
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. TERMINATION. This Agreement (other than the
provisions of Section 2.9 and Article VI, which shall survive termination of
this Agreement for the applicable statutes of limitations) shall terminate when
all of the Obligations have been finally and fully paid.
SECTION 8.2. CURRENCY CONVERSION.
(a) Any payment by Borrower pursuant to this Agreement
shall be made in U.S. dollars (for the purposes of this Section 8.2, the
"Contractual Currency") in accordance with Section 2.13. If in respect of any
of the Obligations Lender receives payment or the Obligation is converted into
a claim, proof, judgment or order, in either case in a currency other than the
Contractual Currency, then:
(i) Borrower shall indemnify Lender against
any loss or liability resulting from the conversion;
(ii) if the amount received by Lender, when
converted into the Contractual Currency by Lender, is less than the amount of
the relevant Obligation in the Contractual Currency, then Borrower shall on
demand pay to the Lender an amount in the Contractual Currency equal to the
difference; and
(iii) Borrower shall on demand pay Lender any
exchange costs and taxes payable in connection with any conversion referred to
in this Section 8.2.
(b) If and to the extent that Borrower fails to pay on
demand any amount due under this Agreement, Lender may, in its absolute
discretion (and without notice to Borrower), at any time after Borrower's
failure to pay, purchase so much of a currency as Lender considers necessary or
desirable to cover any part of the Obligations denominated or incurred in such
currency. Any of such purchases shall be made at the then-prevailing spot rate
of exchange obtained by Lender (as conclusively determined by Lender) for
purchasing such currency with sterling. Borrower agrees to indemnify Lender
against the full sterling price (including all costs, charges and expenses)
paid by Lender for such currency.
(c) All moneys received or held by Lender from
Borrower under this Agreement may from time to time be converted into such
other currency as Lender considers necessary or desirable to cover any part of
the Obligations denominated or incurred in that currency. That conversion
shall be made at the then-prevailing spot rate of exchange obtained by Lender
(as conclusively determined by Lender) for purchasing the currency to be
acquired with the existing currency.
-21-
<PAGE> 27
SECTION 8.3. EXPENSES. Except as otherwise specifically set
forth herein, in the other Loan Documents or in the Transaction Documents, all
costs and expenses incurred in connection with this Agreement, the other Loan
Documents, the Transaction Documents and with consummation of the transactions
contemplated hereby and thereby shall be borne by the party incurring such
expenses.
SECTION 8.4. NO WAIVER. No failure or delay on the part of
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder.
SECTION 8.5. AMENDMENTS, ETC. No amendment, waiver,
modification, supplementation or termination of any term or provision of this
Agreement or any of the other Loan Documents nor any consent to any departure
by Borrower therefrom shall in any event be effective unless the same shall be
in writing and signed by Lender and then (if in respect of a waiver or consent)
only in the specific instance and for the specific purpose for which given.
SECTION 8.6. ADDRESSES FOR NOTICES, ETC. All notices,
requests, demands, directions and other communications provided for hereunder
shall be in writing unless otherwise explicitly provided in this Agreement and,
if by telegram, telex, facsimile transmission or personal delivery, shall be
deemed to have been given and received when sent (if, in the case of facsimile
transmissions, with written confirmation of receipt), if sent by reputable
international overnight courier service, on the third business day after
sending, and, if mailed, shall be deemed to have been given and received five
Business Days after the date when sent by registered or certified international
or air mail, postage prepaid, and addressed to Lender or Borrower at the
address shown below its signature hereto, or at such other address as it may,
by written notice received by other parties to this Agreement, have designated
as its address for such purpose.
SECTION 8.7. BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 8.8. ASSIGNMENT. Neither party hereto, without the
other party's prior written consent, may assign its rights or delegate its
duties under this Agreement or any of the other Loan Documents, except that
Lender may assign its rights and delegate its duties hereunder and under the
other Loan Documents to an Affiliate of Lender; provided that (a) Lender shall
remain secondarily liable with respect to such transferred Loan Document, (b)
such Affiliate may not thereafter transfer its rights or duties under this
Section 8.8 except to Lender and (c) such Affiliate shall first deliver to
Borrower a deed of adherence, in the form attached hereto as Exhibit 8.8,
assuming and agreeing to be bound by the terms of this Agreement and agreeing
to re-transfer such rights and duties to Lender prior to the time such
Affiliate ceases to be an Affiliate of Lender.
-22-
<PAGE> 28
SECTION 8.9. GOVERNING LAW. This Agreement shall be a contract
made under and governed by the internal laws of the State of Delaware, without
regard to conflict of laws principles.
SECTION 8.10. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
enforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8.11. HEADINGS. Article and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 8.12. COUNTERPARTS; EFFECTIVENESS. This Agreement may
be executed in counterparts and by the different parties on separate
counterparts and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement.
SECTION 8.13. COMPLETE AGREEMENT. This Agreement, the Loan
Documents and the other documents and agreements expressly referred to herein,
collectively embody the complete agreement and understanding among the parties
hereto and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
SECTION 8.14. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, express or implied, is intended to or shall confer any rights,
remedies, obligations or liabilities, legal or equitable on any Person other
than the parties hereto and their respective successors and assigns.
SECTION 8.15. JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY
TRIAL. Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court covering Wilmington, Delaware for all purposes of or in
connection with this Agreement; provided that nothing in this Agreement shall
affect Lender's right to bring any action or proceeding against Borrower or its
property in the courts of any other jurisdiction. Borrower hereby consents to
process being served in any suit, action or proceeding of the nature referred
to above either (a) by the mailing of a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to its address shown below its
signature hereto or (b) by serving a copy thereof upon Borrower's authorized
agent for service of process (to the extent permitted by applicable law,
regardless whether the appointment of such agent for service of process for any
reason shall prove to be ineffective or such agent for service of process shall
accept or acknowledge such service); provided that, to the extent lawful and
practicable, written notice of said service upon said agent shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, to
Borrower at its address shown below its signature hereto. Borrower agrees that
such service, to the fullest extent permitted by law, (i) shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall be taken and held
-23-
<PAGE> 29
to be valid personal service upon and personal delivery to it. Nothing herein
shall affect Lender's right to serve process in any other manner permitted by
law, or limit Lender's right to bring proceedings against Borrower in the
courts of any other jurisdiction.
BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THE LOAN DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR
(II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO
THE LOAN DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 8.16. ATTORNEY'S FEES. If any legal action, including
an action for declaratory relief, is brought to enforce any provision of this
Agreement, the prevailing party or parties, was the case may be, shall be
entitled to recover his, its or their respective reasonable attorneys' fees and
court costs from the nonprevailing party or parties, as the case may be. These
fees, which may be set by the court in the same action or in a separate action
brought for that purpose, are in addition to any other relief to which any
prevailing party may be entitled.
SECTION 8.17. CURRENCIES. Unless otherwise expressly set forth
herein all references to "$" or "Dollars" shall be deemed to refer to United
States Dollars and all references to "L." or "Pounds Sterling" shall be deemed
to refer to the lawful currency, from time to time of England and Wales.
-24-
<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
LENDER:
------
VIDEO JUKEBOX NETWORK, INC., a Florida
corporation
By: /s/ Alan McGlade
----------------------------------
Name: Alan McGlade
Title: President
1221 Collins Avenue
Miami Beach, Florida 33139
Attention: Chief Financial Officer
BORROWER:
--------
VIDEO JUKEBOX NETWORK
INTERNATIONAL LIMITED, a company
incorporated under the laws of
England and Wales
By: /s/ Vincent Monsey
----------------------------------
Name: Vincent Monsey
Title: Managing Director
11-13 Young Street
Kensington
London W8 5EH
Attention: Managing Director
-25-
<PAGE> 31
EXHIBIT 2.2
[COPY OF SECURED PROMISSORY NOTE FILED AS EXHIBIT 99.5 TO THIS FORM 8-K]
<PAGE> 32
EXHIBIT 2.14
[COPY OF DEBENTURE FILED AS EXHIBIT 99.6 TO THIS FROM 8-K]
<PAGE> 33
EXHIBIT 3.4
[COPY OF DENTON HALL OPINION FILED AS EXHIBIT 3.4 TO EXHIBIT
99.2 OF THIS FORM 8-K]
<PAGE> 34
EXHIBIT 8.8
[COPY OF DEED OF ADHERENCE FILED AS EXHIBIT 8.8 TO EXHIBIT 99.2
OF THIS FORM 8-K]
<PAGE> 35
SCHEDULE 4.3
Title to Collateral
Borrower has granted a security interest in the Collateral to TM/Video
International, Inc. ("TM"), to secure a loan of $1,500,000.00 from TM to the
Borrower.
<PAGE> 36
SCHEDULE 4.4
Consents or Approvals
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, Borrower must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
<PAGE> 37
SCHEDULE 4.5
Litigation
Borrower was in dispute with Dolphin Head Group Holdings Plc
("Dolphin") relating to the occupation by Borrower of certain premises known as
Unit or Suite 5, Camberley House, Portesbery Road, Camberley, Surrey and Unit
6, Camberley House, 85 High Street, Camberley, Surrey. A writ was served on
Borrower dated September 14, 1994 claiming a total of L.15,135.51 plus interest
and costs. A Defense dated October 27, 1994 was served by Borrower. The
matter was settled by mutual consent on May 11, 1995 - a payment of L.6,850.00
was made by Borrower to Dolphin's solicitors on behalf of Dolphin. A consent
order was issued by the court on May 12, 1995 ordering that no order should be
made in respect of Dolphin's claim against Borrower, save that Borrower pay the
costs of the action brought by Dolphin against Borrower, such costs to be taxed
if not agreed. The costs are in the process of being taxed and Clintons has
estimated that the taxed costs are likely to be in the region of L.10,000.00 -
L.20,000.00.
<PAGE> 38
SCHEDULE 4.6
Indebtedness
Borrower is indebted in the principal amount of $1,500,000.00 to TM/Video
International, Inc. pursuant to that certain Secured Loan Agreement and Secured
Promissory Note, each dated the date hereof, which debt ranks pari passu with
the Loan.
<PAGE> 39
SCHEDULE 4.8
Identity of Borrower
The Borrower was incorporated on September 6, 1991 under the name
"Video Dukebox Network International Limited."
On September 26, 1991 the Borrower changed its name to "Video Jukebox
Network International Limited."
<PAGE> 40
SCHEDULE 4.10
Taxes
(a) Borrower is liable for United Kingdom ("UK") corporation taxes
and value added tax ("VAT"). Borrower has to account for and pay over to the
UK Inland Revenue PAYE income tax and National Insurance Contributions ("NICs")
in respect of salaries, fees and wages paid to its directors and employees.
(b) In respect of the accounting period ended December 31, 1994,
Borrower will be required to file a corporation tax return (Form CT 200),
statutory audited accounts and reports and a corporate tax computation.
PAYE and NIC annual returns (Forms P35) relating to the above
period have been properly and duly submitted. As the returns relate to years
of assessment (and not calendar years), which run from April 6 of each year to
April 5 of the next year, the accounting year ended December 31, 1994 straddles
two years of assessment ("Y/A"), Y/A 1993/1994 and 1994/1995:
<TABLE>
<CAPTION>
Y/A Total PAYE Tax Paid Total NICs Paid
--- ------------------- ---------------
<S> <C> <C>
1993/94 L.35,199 L.22,011
1994/95 L.57,810 L.40,383
</TABLE>
VAT returns (Forms VAT 100) for each prescribed accounting period
(quarter) relating to the year ended December 31, 1994 have been duly filed and
the output tax accounted for and paid over to HM Customs & Excise, as follows:
<TABLE>
<CAPTION>
Period Output Tax Paid
------ ---------------
<S> <C>
Qtr. ended 02/95 L.14,023
Qtr. ended 11/94 L.20,255
Qtr. ended 08/94 L. 6,441
Qtr. ended 05/94 L.12,249
Qtr. ended 02/94 L. 808
</TABLE>
<PAGE> 41
SCHEDULE 4.11
Burdensome Obligations
Borrower is indebted in the principal amount of $1,500,000.00 to Ticketmaster
pursuant to that certain Secured Loan Agreement and Secured Promissory Note,
each dated the date hereof, which debt ranks pari passu with the Loan.
<PAGE> 42
SCHEDULE 4.15
Insurance Policies
1. Directors & Officers Insurance Policy - Home Insurance Company of
Illinois (Agent: Buckley, Deets & Assoc. Inc.)
o Insured: VJN; Borrower and VJN LPTV Corp.
o Period: 12/6/94 - 12/6/95 (Retroactive Date: 12/6/89)
o Policy No.: PDO - F - 922612 - 4/000
o Limits: - $3 mil (Aggreg. & Single Claim)
(sub-limit of $350,000/assured) and
$950,000 aggreg. #10)
- Insurer's % = 100%
o Retentions: (A) $150,000/claim
(B) $5,000/assured, subject to $50,000
max. for all assureds applicable to
each claim
o Premium: $137,500
Notwithstanding any representation and warranty contained in section
4.15 of this Agreement, the foregoing policy will cease to cover the
Borrower upon the closing of the transactions contemplated by the
Transaction Documents.
2. Broadcasters Broad Form Defamation and Associated Risks Policy -
Employers Reinsurance Corporation
o Assured: VJN; VJN LPTV Corp. and
affiliates/subsidiaries
o Period: 6/19/95 - 6/19/96
o Policy No.: RLS-04814-R
o Limits: $5,000,000/occurrence
o Retention: $5,000/occurrence
o Premium: $9,570
o Broadcasting
Stations Insured: "Video Jukebox Network"
_________________________________
Notwithstanding any representation and warranty contained in section
4.15 of this Agreement, the foregoing policy will cease to cover the
Borrower upon the closing of the transactions contemplated by the
Transaction Documents.
3. Automobile General Liability Policy - Insurance Company of Pennsylvania
o Insured: Borrower c/o VJN
o Period: 5/1/95 - 5/1/96
o Policy No.: 80259277
o Limits: $1,000,000/occurrence and aggregate
o Premium: $2,500
<PAGE> 43
4. Office Combined Policy - Eagle Star Insurance Company Limited
(Melville Burbage - Broker)
o Insured: Borrower
o Premises: Imperial House, 11-13 Young St.
Kensington (Box Admin. Office)
o Period: 6/2/95 - 6/2/96
o Policy No.: 002/820/J0000859/3
o Limits: Contents: L.100,000 (L.500
Improvements), + L.10,000 business
interruption, $250 deductible,
fidelity coverage for 5 employees.
o Premium: L.1,224.65
5. Wide Angle Media Combined Policy - Eagle Star Insurance Company
Limited (Hoggs Ins. Broker)
o Insured: Borrower
o Period: 6/10/95 - 6/9/96, Borrower received
a renewal notice for the current
period on June 29, 1995. Coverage
will only remain in effect for the
period indicated, so long as
Borrower pays the premium within 14
days of the renewal notice.
o Policy No.: Not known at this time
o Limits: Borrower's equipment - up to L.20,000
Hired in equipment - up to L.15,000
(fees L.1,000) Policy excess each
claim - L.250, increasing to L.500
outside Western Europe. These
excesses are doubled in respect of
hired in and/or hired out equipment.
o Premium: L.571.95
<PAGE> 44
SCHEDULE 4.19
Conduct of Business in the Ordinary Course
None
<PAGE> 45
SCHEDULE 4.20
Compliance with Laws
1. As mentioned in the minutes of a meeting of the Board of Directors of
Borrower held on April 26, 1993, Borrower was at that date in arrears
in respect of the payment of tax under the PAYE scheme, in the amount
of approximately L.40,000. These arrears, together with any interest
and penalties thereon, have since been paid.
2. Borrower obtains all advertisements shown on "The Box" from
advertising agencies. Borrower does not analyze advertisements shown
on "The Box" for compliance with any codes of advertising standards or
similar codes. Consequently, there can be no assurance that Borrower
is in compliance with any applicable codes of advertising standards.
3. Borrower is not registered under the Data Protection Act 1984.
Nevertheless, Borrower submitted an application for registration under
such act to the Registrar on June 14, 1995.
4. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 12, 1994.
<PAGE> 1
8-K
EXHIBIT 99.5
<PAGE> 2
THIS INSTRUMENT IS SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT
DATED AS OF JUNE 30, 1995 AMONG VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED, VIDEO JUKEBOX NETWORK, INC., AND TM/VIDEO INTERNATIONAL,
INC., WHICH INTERCREDITOR AGREEMENT IS INCORPORATED HEREIN BY
REFERENCE.
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
SECURED PROMISSORY NOTE
$1,500,000 (U.S.) June 30, 1995
For value received, VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED, a
company organized under the laws of England and Wales ("Maker"), does hereby
promise to pay to VIDEO JUKEBOX NETWORK, INC., a Florida corporation ("Payee"),
the principal sum of One Million Five Hundred Thousand Dollars ($1,500,000)
(US).
Maker further promises to pay interest on the unpaid principal amount
of this Secured Promissory Note (this "Note") from the date hereof until such
unpaid principal is paid in full, payable at the rates and at the times
provided in that certain Secured Loan Agreement dated as of the date hereof
between Maker and Payee (as amended, supplemented or otherwise modified from
time to time, the "Loan Agreement").
This Note (a) is the Note referred to in the Loan Agreement, (b) is
subject to the provisions of the Loan Agreement, (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Loan Agreement and
(d) is senior in right of payment to Maker's other obligations to other lenders
to the extent and as provided in the Loan Agreement. Capitalized terms used
herein shall have the meanings set forth in the Loan Agreement unless otherwise
defined herein to the contrary or unless the context otherwise requires.
In addition to and not in limitation of the foregoing and of the
provisions of the Loan Agreement, Maker further agrees, subject only to any
limitation imposed by applicable law, the Loan Agreement and as provided below,
to pay all expenses, including reasonable attorneys' fees and expenses,
incurred by the Payee in endeavoring to collect any amounts payable hereunder
which are not paid when due, whether by acceleration or otherwise.
<PAGE> 3
Upon or at any time after the occurrence of an Event of Default, this
Note shall become due and payable forthwith in accordance with Section 7.2 of
the Loan Agreement, without presentment, demand, notice or protest of any kind,
all of which are hereby expressly waived by Maker. No delay or omission of
Payee in exercising any right or power hereunder shall impair any such right or
power, or be deemed or construed to be a waiver of any default hereunder or an
acquiescence therein. No waiver shall be valid unless signed in writing by
Payee and then only to the extent specifically set forth in such writing.
Upon any endorsement, assignment or other transfer of this Note by
Payee or by operation of law including, without limitation, the endorsement of
this Note to a third party, the term "Payee", as used herein, shall mean such
endorsee, assignee or other transferee or successor to Payee then becoming the
holder of this Note. This Note shall inure to the benefit of Payee and its
successors and assigns.
The Loan made by Payee to Maker under the Loan Agreement and all
payments made by Maker on account of the principal amount hereof shall be
recorded by Payee and, prior to any transfer thereof, endorsed on the grid
attached hereto which is part of this Note.
It is the intention of Maker and Payee to conform to applicable usury
laws, if any. Accordingly, notwithstanding anything to the contrary in this
Note or any other agreement entered into in connection herewith, it is agreed
as follows: (a) the aggregate of all interest and any other charges
constituting interest under applicable law and contracted for, chargeable, or
receivable under this Note or otherwise in connection with the obligation
evidenced hereby shall under no circumstances exceed the maximum amount of
interest permitted by applicable law, if any, and any excess shall be deemed a
mistake and cancelled automatically and, if theretofore paid, shall, at the
option of Maker, be refunded to Maker or credited on the principal amount of
this Note; and (b) in the event that the entire unpaid balance of this Note is
declared due and payable by Payee, then earned interest may never include more
than the maximum amount permitted by applicable law, if any, and any unearned
interest shall be cancelled automatically and, if theretofore paid, shall at
the option of Maker, either be refunded to Maker or credited, to the extent
permitted by law, on the principal amount of this Note.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE IN
ALL RESPECTS (AND WITHOUT APPLICATION OF ANY OF ITS CONFLICT OF LAWS
PROVISIONS).
Maker hereby submits to the nonexclusive jurisdiction of the United
States District Court covering Wilmington, Delaware for all purposes of or in
connection with this Agreement; provided that nothing in this Note shall affect
Payee's right to bring any action or proceeding against Maker or its property
in the courts of any other jurisdiction. Maker hereby consents to process
being served in any suit, action or proceeding of the nature referred to above
either (a) by the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to its address shown below its
signature hereto or (b) by serving a copy thereof upon Maker's authorized agent
for
<PAGE> 4
service of process (to the extent permitted by applicable law, regardless
whether the appointment of such agent for service of process for any reason
shall prove to be ineffective or such agent for service of process shall accept
or acknowledge such service); provided that, to the extent lawful and
practicable, written notice of said service upon said agent shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, to
Maker at its address shown below its signature hereto. Maker agrees that such
service, to the fullest extent permitted by law, (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall be taken and held to be valid personal service upon
and personal delivery to it. Nothing herein shall affect Payee's right to
serve process in any other manner permitted by law, or limit Payee's right to
bring proceedings against Maker in the courts of any other jurisdiction.
MAKER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THIS NOTE OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION
WITH OR RELATED TO THIS NOTE AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
In the event that any term or provision of this Note or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Note, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term and provision of this Note shall be valid and be enforced to the fullest
extent permitted by law.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the day and year first above written.
MAKER:
-----
VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED, a company incorporated
under the laws of England and Wales
By: /s/ Vincent Monsey
--------------------------------
Name: Vincent Monsey
Title: Managing Director
<PAGE> 5
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
SECURED PROMISSORY NOTE
<TABLE>
<CAPTION>
Amount of Interest Principal
Principal Paid Paid Balance
Date or Forgiven (if any) Outstanding
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<S> <C> <C> <C>
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</TABLE>
<PAGE> 1
8-K
EXHIBIT 99.6
<PAGE> 2
DATED June 30 1995
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(2) VIDEO JUKEBOX NETWORK INC
_______________________________
DEBENTURE
_______________________________
ROWE & MAW
20 Black Friars Lane
London EC4V 6HD
Tel: 071-248 4282
Fax: 071-248 2009
351/184/26089-0001
<PAGE> 3
INDEX
<TABLE>
<CAPTION>
Clause Subject Matter Page No
- ------ -------------- -------
<S> <C> <C>
1. Definitions and Interpretation 2
2. Covenant to Pay 7
3. Charging Clause (and see Schedule 1) 8
4. Covenants (and see Schedule 2) 8
5. Powers of the Lender and a Receiver 8
(and see Schedules 3 and 4)
6. Continuing Security 8
7. Third Party Protection 9
8. Costs and Expenses 9
9. Currency 10
10. Severability 12
11. Amendments, Waivers and Rights 12
12. Assignment 13
13. Law and Jurisdiction 13
14. Notices 14
15. General 15
16. Counterparts 15
Schedule
- --------
1. The Charges and Assignment 16
2. Covenants 22
3. Powers of the Lender, the Agent and a Receiver 36
4. Receiver's Further Powers 42
</TABLE>
<PAGE> 4
DEBENTURE
DATE: June 30, 1995
PARTIES:
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (registered number
2643552) whose registered office is at Imperial House, 11-13 Young
Street, Kensington, London W8 ("the Chargor"); and
(2) VIDEO JUKEBOX NETWORK INC. a corporation registered under the laws of
the state of Florida, USA whose principal place of business is at
12000 Biscayne Boulevard, Miami, Florida, USA ("the Lender").
RECITALS:
(A) The Lender and the Chargor have entered into a secured loan agreement
in respect of the provision of working capital finance to the Chargor
dated the same date as the date of this Deed.
(B) The Chargor is required as a condition of the secured loan agreement
referred to in Recital (A) to enter into this Deed creating security
over all of its property, rights, assets and undertaking in favour of
the Lender.
(C) This document is the deed of the Chargor, even if it has not been
duly executed by the Lender or has been executed by the Lender but
not as a deed.
(D) This Deed contains an application to the Chief Land Registrar and in
respect of dispositions and dealings (see Paragraph 10.2 of Schedule
2).
1
<PAGE> 5
(E) The parties have agreed that the Chargor shall execute a deed in
favour of Ticketmaster simultaneously with this Deed creating
security in favour of Ticketmaster in the same terms, mutatis
mutandis, as this security.
(F) The rights of the Lender under this security and the rights of
Ticketmaster under the Ticketmaster Debenture are at all times
subject to the restrictions and obligations contained in the
Intercreditor Agreement.
(G) The Lender has appointed and delegated the Agent to take certain
action on its behalf in respect of this security in the Intercreditor
Agreement and by this Deed irrevocably by way of security ratifies
and confirms such appointment and delegation.
THIS DEED WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed (including the Recitals), the following words and
expressions shall have the following meanings:
"Agent" the meaning given to it in the
Intercreditor Agreement
"Book Debts" the book debts and other matters and things
described in paragraph 1.1(c)(v) of
Schedule 1
"Business Day" the meaning given to it in the Loan Agreement
"Demand" the meaning given to it in Clause 2.1
2
<PAGE> 6
"Derivative Lease" any lease, underlease or tenancy subsisting
or created (whether by the Chargor or
otherwise) directly or indirectly out of any
interest of the Chargor in any of the
Security Assets
"Finance Documents" all or any of the Loan Agreement, the
Security Documents (as defined in the Loan
Agreement), this security and any other
document referred to or entered into in
connection with any of the same
"Interest Rate" the rate specified in Section 2.6 of the
Loan Agreement
"Intercreditor the intercreditor agreement of the
Agreement" same date as this deed and made between
the Lender, Ticketmaster, the Chargor and
Atlantic American Capital Corporation
"the Land" the premises forming part of a building
known as Imperial House, 11/13 Young Street,
Kensington, London W8 more particularly
described (in respect of the first floor)
in a lease dated 8th February 1995 between
(1) Archly Corporation N.V. and (2) the
Chargor and (in respect of the second floor)
in an underlease dated 3rd January 1994
between (1) Office Angels Limited and (2)
the Chargor
"Licences" both or either of the licence agreement of
today's date made between the Lender
3
<PAGE> 7
and the Chargor and a licence dated 11th
February 1992 granted by the Independent
Television Commission in favour of the
Chargor
"Loan Agreement" the secured loan agreement referred to in
Recital (A)
"LPA" the Law of Property Act 1925
"Properties" all or any part of the properties and other
assets described in Paragraph 1.1(a) of
Schedule 1 and "Property" shall be construed
accordingly
"Receiver" the meaning given to it in Paragraph 3.1 of
Schedule 3
"Secured the meaning given to it in Clause 2.2
Liabilities"
"Securities" the stocks, shares, bonds, securities and
other property, rights and assets described
in Paragraph 1.1(c)(vi) of Schedule 1
"Security Assets" all or any part of the property, revenue,
assets, business, undertakings and rights
from time to time the subject of this
security and "Security Asset" shall be
construed accordingly
"Security any debenture, mortgage, charge, pledge,
Interest" lien, assignment, hypothecation, right of
set-off, title retention or
4
<PAGE> 8
other arrangement or agreement the effect of
which is the creation of security
"Specified IP" all or any part of the property, assets and
rights (including trade names, service
marks, trade marks, copyrights and trade
secrets) subject to the licence agreement
made between the Lender and the Chargor
referred to in the definition of Licences
"Subsidiary" the meaning given to it in section 736
Companies Act 1985
"Ticketmaster" TM/VIDEO INTERNATIONAL, INC., a Delaware
corporation
"Ticketmaster the debenture in favour of Ticketmaster
Debenture" referred to in Recital (E)
1.2 Words and expressions defined in the Loan Agreement but not defined
in this Deed shall have the same meaning in this Deed as in the Loan
Agreement.
1.3 The index and headings are included for convenience only and shall
not affect the interpretation or construction of this Deed.
1.4 In this Deed, unless the context requires otherwise, any reference
to:
(a) the Lender or the Chargor respectively includes its
successors in title and assigns and this Deed shall be
enforceable notwithstanding any change in the
5
<PAGE> 9
constitution of the Lender, its absorption in or
amalgamation with any other person or the acquisition of
all or part of its undertaking by any other person;
(b) "a party" or "the parties" is to a party or the parties
(as the case may be) to this Deed;
(c) a Recital, Clause or Schedule is to a recital of, clause
of or schedule to this Deed (as the case may be) and
references made in a Schedule to Paragraphs are to
paragraphs of that Schedule;
(d) "this Deed" includes the Schedules, which form part of
this Deed for all purposes;
(e) a statute or statutory provisions include any
consolidation, re-enactment, modification or replacement
of the same and any subordinate legislation in force
under the same from time to time;
(f) the masculine, feminine or neuter gender respectively
includes the other genders, references to the singular
include the plural (and vice versa) and references to
persons include firms, corporations and unincorporated
associations;
(g) a document is to that document as varied, supplemented or
replaced from time to time; and
(h) "this security" is to this Deed and the security created
by, pursuant to or supplemental to it.
1.5 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of each of the
6
<PAGE> 10
Finance Documents to which the Lender and the Chargor are parties
(other than this Deed) are incorporated in this Deed.
2. COVENANT TO PAY
2.1 The Chargor shall immediately on the Lender's or the Agent's demand
(a "Demand") pay, discharge or (in the case of contingent
liabilities) provide cash cover, in an amount satisfactory to the
Lender or the Agent as appropriate, for the Secured Liabilities as
and when the same become due and payable.
2.2 In this security, "the Secured Liabilities" means all moneys,
obligations and other actual or contingent liabilities due, owing or
incurred by the Chargor to both and either of the Lender and the
Agent now or at any time or from time to time under or in connection
with the Finance Documents together with interest, commission, fees
and charges. Such interest shall be calculated to the date of
payment (as well after as before any Demand or judgment) at the rates
and upon the terms from time to time agreed with the Lender or the
Agent (or in the absence of agreement on a daily basis at the
Interest Rate and to be compounded quarterly).
2.3 Upon the giving of any Demand, the Lender shall cease to be under any
further commitment to the Chargor and any of the Secured Liabilities
not otherwise due and payable on demand shall immediately become due
and payable. Any number of Demands may be made without limitation.
2.4 Any certification or determination by the Lender or the Agent of any
amount payable or rate applicable under the Finance Documents shall
be conclusive evidence as against the Chargor of the matter(s) to
which it relates.
7
<PAGE> 11
3. CHARGING CLAUSE
The payment and discharge of the Secured Liabilities shall be secured
in the manner and to the extent specified in Paragraph 1 of Schedule
1.
4. COVENANTS
The Chargor covenants with the Lender as set out in Schedule 2 and
warrants and represents to the Lender as set out in Paragraphs 1 and
3.2 of that Schedule.
5. POWERS OF THE LENDER, THE AGENT AND A RECEIVER
The Lender, the Agent and a Receiver shall have the powers set out in
Schedule 3 and a Receiver shall have the further powers set out in
Schedule 4.
6. CONTINUING SECURITY
6.1 This security is a continuing security and shall remain in force and
shall secure the ultimate balance of the Secured Liabilities,
notwithstanding intermediate payment, settlement of account or
discharge of all or part of the Secured Liabilities to the Lender or
the Agent and also notwithstanding the liquidation or other
incapacity of the Chargor, any change in its constitution, name or
style or any other event, matter or thing.
6.2 This security is in addition to (and shall not merge with, otherwise
prejudice or affect or be prejudiced or affected by) any other right,
remedy, guarantee, encumbrance, indemnity or Security Interest which
may be or have been created in favour of the Lender or the Agent.
Accordingly, this security may be enforced notwithstanding the
existence
8
<PAGE> 12
or invalidity of all or any of the same and also notwithstanding the
Lender or the Agent at any time exchanging, releasing, varying,
abstaining from perfecting or enforcing or otherwise dealing or
omitting to deal with all or any of the same.
7. THIRD PARTY PROTECTION
No purchaser, mortgagee or other person dealing with the Lender, the
Agent or a Receiver shall be concerned:
(a) to enquire whether any of the Secured Liabilities have
become due or payable or remain unpaid or undischarged or
whether the power which the Lender, the Agent or a
Receiver is purporting to exercise has become
exercisable; or
(b) to see to the application of any money paid to the
Lender, the Agent or to a Receiver.
8. COSTS AND EXPENSES
The Chargor covenants with the Lender and the Agent to indemnify the
Lender, the Agent and any Receiver fully (and in the case of legal
costs and expenses on a solicitor and own client basis) on demand
against all costs, expenses, liabilities, claims, demands, actions or
proceedings of any kind incurred by (or made or brought against) it
or him (or any manager or agent appointed by it or him):
(a) as a result of any failure by the Chargor to perform any
of its obligations under this security or any other of
the Finance Documents;
9
<PAGE> 13
(b) in the exercise (or purported exercise) of any of the
powers or rights conferred by this security or by any
other Security Interest granted (whether by the Chargor
or any third party) in respect of all or part of the
Secured Liabilities; or
(c) in respect of any other matter or thing done or omitted
relating to the Security Assets or the assets secured by
any such other Security Interest;
together in each case with interest calculated on a daily basis from
the date the same is incurred or becomes payable by the Lender, the
Agent or the Receiver (as the case may be) at the Interest Rate, such
interest being compounded quarterly.
9. CURRENCY
9.1 Any payment by the Chargor under this security shall be
made in the currency (in this Clause 9.1 "the Contractual Currency")
in which the relevant Secured Liabilities were denominated or
incurred and shall be made to the Lender or the Agent in the United
States of America. If in respect of any of the Secured Liabilities
the Lender or the Agent receives payment or that Secured Liability is
converted into a claim, proof, judgment or order, in either case in a
currency other than the Contractual Currency, then:
(a) the Chargor shall indemnify the Lender or the Agent as
appropriate against any loss or liability resulting from
the conversion;
(b) if the amount received by the Lender or the Agent, when
converted into the Contractual Currency by the Lender or
the Agent as appropriate, is less than the
10
<PAGE> 14
amount of the relevant Secured Liability in the
Contractual Currency, then the Chargor shall on demand
pay to the Lender an amount in the Contractual Currency
equal to the difference; and
(c) the Chargor shall on demand pay to the Lender or the
Agent as appropriate any exchange costs and taxes payable
in connection with any conversion referred to in this
Clause 9.1.
9.2 If and to the extent that the Chargor fails to pay on demand any
amount due under this security, the Lender or the Agent may in its
absolute discretion (and without notice to the Chargor) purchase at
any time after that so much of a currency as the Lender or the Agent
considers necessary or desirable to cover any part of the Secured
Liabilities denominated or incurred in such currency. That purchase
shall be made at the then-prevailing spot rate of exchange obtained
by the Lender or the Agent (as conclusively determined by the Lender
or the Agent as appropriate) for purchasing such currency with
sterling. The Chargor agrees to indemnify the Lender and the Agent
against the full sterling price (including all costs, charges and
expenses) paid by the Lender or the Agent as appropriate for such
currency.
9.3 All moneys received or held by the Lender or the Agent from the
Chargor or under this security may from time to time be converted
into such other currency as the Lender or the Agent considers
necessary or desirable to cover any part of the Secured Liabilities
denominated or incurred in that currency. That conversion shall be
made at the then-prevailing spot rate of exchange obtained by the
Lender or the Agent (as conclusively determined by the Lender or the
Agent as
11
<PAGE> 15
appropriate) for purchasing the currency to be acquired with the
existing currency.
10. SEVERABILITY
If any part of any provision of this security shall be invalid or
unenforceable, then the remainder of such provision and all other
provisions of this security shall remain valid and enforceable.
11. AMENDMENTS, WAIVERS AND RIGHTS
11.1 No amendment or variation of the terms of this security shall be
effective unless it is made or confirmed in a written document signed
by both parties.
11.2 No delay in exercising or non-exercise by the Lender or the Agent of
any of its rights under or in connection with this security shall
operate as a release or waiver of that right. Rather, any such
waiver or release must be specifically granted in writing signed by
an authorised signatory of the Lender or the Agent and shall:
(a) be confined to the specific circumstances in which it is
given;
(b) not affect any other enforcement of the same or any other
right; and
(c) (unless it is expressed to be irrevocable) be revocable
at any time in writing.
11.3 The rights and remedies of the Lender and the Agent under this
security are cumulative and not exclusive of any rights or remedies
of the Lender or the Agent under the general law.
12
<PAGE> 16
Each of the Lender and the Agent may exercise each of its rights as
often as it thinks necessary.
11.4 Neither the Lender nor the Agent shall be under any duty of any kind
to the Chargor in respect of the exercise or non-exercise of any of
its rights under this security. The Chargor shall not rely on such
exercise or non-exercise in any way.
12. ASSIGNMENT
12.1 Subject to the Intercreditor Agreement, the Lender may assign all or
any of its rights under this security to any person to whom all or
any of its rights may be assigned under the Loan Agreement without
any requirement to notify the Chargor or obtain its further consent.
Any assignee or successor in title of the Lender shall be treated for
all purposes as if it had been an original party to this security in
addition to the Lender.
12.2 Notwithstanding any confidentiality obligation imposed on the Lender
or the Agent by law, both or either of them may disclose to any
assignee, proposed assignee or person with whom from time to time it
has or wishes to enter into an agreement in connection with this
security such information about the Chargor as it thinks fit. The
Chargor irrevocably waives all rights of confidentiality in respect
of such disclosure.
13. LAW AND JURISDICTION
The parties agree that this security shall be construed in accordance
with English law and for the exclusive benefit of the Lender that the
courts of England are to have jurisdiction to settle any disputes
which may arise in
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connection with this security; but the Chargor agrees that the Lender
and the Agent shall be entitled to bring proceedings in connection
with this security in any other court of competent jurisdiction
(including without limitation the jurisdiction of the United States
District Court covering Wilmington, Delaware).
14. NOTICES
All notices, demands and other communications made by the Lender or
the Agent relating to this security may (without prejudice to any
other effective mode of making the same) be delivered or sent to the
Chargor at its registered office from time to time or such other
address of which the Lender or the Agent has received no less than 15
business days' prior written actual notice from the Chargor and shall
take effect:
(a) if delivered, upon delivery;
(b) if posted, at the earlier of the time of delivery and (if
posted in the United Kingdom by first class registered
post) 10 am on the second business day after posting; or
(c) if sent by facsimile, when a complete and legible copy of
the communication, whether that sent by facsimile or a
hard copy sent by post or delivered by hand, has been
received at the appropriate address,
provided that if any communication would otherwise become effective
on a non-business day or after 5 pm on a business day, it shall
instead become effective at 10 am on the next
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business day. Section 196 of the LPA shall not apply to this Deed.
15. GENERAL
This Deed shall remain the property of the Lender notwithstanding any
release or discharge or purported release or discharge hereof.
16. COUNTERPARTS
This Deed may be executed in any number of counterparts each of which
will constitute an original but all of which when taken together
shall constitute one deed.
EXECUTION:
The parties have shown their acceptance of the terms of this Deed by executing
it, in the case of the Chargor as a deed, at the end of the Schedules.
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SCHEDULE 1
1. THE CHARGES AND ASSIGNMENT
1.1 As security for the payment and discharge of the Secured Liabilities,
the Chargor as beneficial owner:
(a) (i) charges to the Lender by way of first fixed
legal mortgage all rights, estates and
interests of the Chargor (both present and
future) in the Land; and
(ii) charges to the Lender by way of first fixed
charge all rights, estates and interests of
the Chargor (both present and future) in all
freehold or leasehold property (other than
properties referred to in Paragraph
1.1(a)(i))
in each case together with all buildings, structures,
erections, fixtures and fittings (including trade
fixtures and fittings) from time to time on any such
property and the benefit of (including without limitation
the right to receive rents and other moneys under) all
existing and future leases, underleases, tenancies and
agreements relating to any such property;
(b) assigns to the Lender by way of security the present and
future benefit of (including without limitation the right
to receive rents and other moneys under) all present and
future Derivative Leases and other agreements and
documents relating to all or any part of the Properties
(other than the Licences as to which see Paragraph 1.2)
and the proceeds of any sale or other disposal of the
Security Assets;
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(c) charges the following to the Lender by way of first fixed
charge:
(i) all plant, machinery, vehicles, equipment and
other chattels owned by the Chargor (and the
Chargor's rights in any such items leased,
hired or rented to it by any other person)
both present and future together with any
spare parts, fuel and tools of the Chargor
relating to the same (but excluding
stock-in-trade of the Chargor) (all such
items together "the mortgaged chattels")
together with the benefit of (including
without limitation the right to receive rents
and other moneys under) all existing and
future leases, underleases, tenancies,
agreements and warranties relating to any
such asset;
(ii) all goodwill of the Chargor (both present and
future), including but not limited to, any
rights of the Chargor (both present and
future) in the goodwill of any business
carried on at or through the Properties;
(iii) all rights of the Chargor to the proceeds of
any insurances (both present and future),
including but not limited to the proceeds of
any insurance over or relating to the
Properties;
(iv) all uncalled capital of the Chargor (both
present and future) and the rights to future
calls in respect of such capital;
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(v) all book and other debts, revenues and claims
due, owing or payable to the Chargor (both
present and future) wheresoever situate
whether originally owing to the Chargor or
purchased or otherwise acquired by it and the
benefit of all rights relating thereto,
including but not limited to:
(1) all insurance policies of the
Chargor and all things in action
which may give rise to a debt,
revenue or claim, including
(without limitation) any debt,
revenue or claim which may arise
under any contracts entered into
by the Chargor in the course of
its business, and
(2) any deposit in or credit balance
on bank accounts of or held for
the Chargor, whether alone or
jointly with any other person
(3) any amounts realised pursuant to
an order of the court under
Sections 238, 239 or 244 of the
Insolvency Act 1986,
together with the benefit of negotiable or
non-negotiable instruments, guarantees,
indemnities, Security Interests, and rights
of tracing in respect of any such debt,
revenue or claim and any other rights
entitling the Chargor to recover or enforce
payment of any such debt, revenue or claim;
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(vi) all stocks, shares, bonds and other
securities of any kind and all other
interests of the Chargor both present and
future in any company, firm, consortium,
joint venture or entity including all
allotments, accretions, offices, rights or
options, benefits and advantages whatsoever
at any time accruing, offered or arising
(including without limitation any dividends
or other distributions declared) in respect
of or incidental to the same and all stocks,
shares, bonds, securities, rights, money or
property accruing thereto or offered at any
time by way of conversion, redemption, bonus,
preference, option or otherwise in respect
thereof; and
(vii) all of the Chargor's present and future
patents, patent applications, trade and
service marks, trade names, registered
designs, confidential information and
copyrights (including those in computer
software) and all other interests of the
Chargor both present and future in respect of
or incidental to the same and all licences
and ancillary and connected rights relating
to the intangible property both present and
future of the Chargor (including, without
limitation, all and any of the Chargor's
present and future rights, title and interest
in the Specified IP); and
(d) charges to the Lender by way of first floating charge all
of the undertaking, property, rights and other assets of
any kind of the Chargor (both present and future) not
referred to in Paragraphs 1.1(a) to (c).
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1.2.1 The Chargor as beneficial owner assigns to the Lender by way of
security for the payment and discharge of the Secured Liabilities all
rights which it has both present and future in and relating to the
Licences including (without limitation) the right to give
instructions under them and the benefit (but not subject to the
burden) of all provisions (express or implied) on the part of any
party to them, the right to receive moneys under them and all other
powers and rights under them.
1.2.2 The Chargor may not without the prior written consent of the Lender
vary, rescind, waive any rights or agree to terminate the Licenses.
1.2.3 The Chargor shall, if the Lender so requests at any time, enter into
a legal assignment or assignments of the Licenses in favour of the
Lender, satisfying the requirements of Section 136 of the LPA and in
such form as the Lender may reasonably require.
1.3 The floating charge referred to in Paragraph 1.1(d) shall
automatically (without any notice to the Chargor being required)
operate as a fixed charge immediately if:
(a) the Chargor (without the prior consent in writing of the
Lender) creates a Security Interest over any of the
Security Assets referred to in Paragraph 1.1(d) or
attempts to do so; or
(b) a receiver is appointed over any of those Security Assets
or any person threatens or attempts to levy any distress,
execution, sequestration or other process against any of
the same.
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Nothing in this Paragraph 1.3 shall affect crystallisation of the
floating charge under the general law.
1.4 The Lender may at any time by notice to the Chargor convert the
floating charge referred to in Paragraph 1.1(d) into a fixed charge
in respect of all of the Security Assets referred to in that
Paragraph or any part of them as may be specified or referred to in
the notice.
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SCHEDULE 2
COVENANTS
1. NO DISPOSALS OR SECURITY INTERESTS
The Chargor shall not without the prior written consent of the Lender:
(a) sell or agree to sell or otherwise dispose of any
interest it has in the Security Assets (except that the
Chargor may without such consent sell any of its
stock-in-trade charged by way of floating charge only, if
that sale is for full market value and in the usual
course of the Chargor's trading as now conducted);
(b) grant, agree to grant or permit to continue any
Derivative Lease of or licence with respect to the
Security Assets, part with or share the possession or
occupation of the same or permit or suffer any such
parting or sharing to continue;
(c) create (or permit to continue or to be created) any
Security Interest over the Security Assets other than
this security and any liens arising by operation of law
in the ordinary course of trading; or
(d) otherwise deal in any way with the Security Assets (other
than in the ordinary course of business at arm's length
on commercial terms) or enter into any onerous or
restrictive obligations affecting the same;
and the Chargor warrants and represents to the Lender that it is the
beneficial owner of the Security Assets and has not granted or agreed
or purported to grant any Derivative Lease.
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2. LEASES
The Chargor shall not without the prior written consent of the Lender:
(a) surrender or determine or agree to the determination,
surrender or termination of any lease forming part of the
Security Assets;
(b) determine or forfeit (or commence any proceedings for
forfeiture of) any Derivative Lease, agree to its
determination or assignment or accept its surrender; or
(c) vary, amend or agree to vary or amend the terms of any
lease comprised in the Security Assets or any Derivative
Lease.
Accordingly no grant, agreement to grant or acceptance of a surrender
of a Derivative Lease by the Chargor during the continuance of this
security shall have effect or force (by virtue of Sections 99 and 100
of the LPA or otherwise) unless the Lender shall have given its prior
consent to the same in writing.
3. COVENANTS, LEGAL OBLIGATIONS AND PAYMENTS
3.1 The Chargor shall:
(a) observe and perform every covenant, stipulation,
provision and other matter (whether or not contained in
any agreement, deed or document) from time to time
affecting the Security Assets or their use or enjoyment,
including (without limitation) those
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contained in any lease comprised in the Security Assets
and any Derivative Leases and (if required by the Lender)
produce evidence to satisfy the Lender that the Chargor
is complying with this obligation;
(b) promptly inform the Lender if it becomes aware of any
steps taken or proceedings commenced by any person with a
view to obtaining forfeiture of any lease comprised in
the Security Assets;
(b) comply with all (and not permit any breach of any)
statutory and other provisions, bye-laws, notices, orders
and regulations (whether relating to planning, building
or any other matter) affecting the Security Assets; and
(d) pay (or procure the payment of) all rents, rates, taxes,
charges, assessments, impositions and other outgoings of
any kind which are from time to time payable (whether by
the owner or the occupier) in respect of the Security
Assets.
3.2 Without prejudice to Paragraph 3.1(b), the Chargor shall comply with
any legislation (including regulations, codes of practice, circulars
and guidance notes made under the same) relating to environmental
matters, including (but not limited to) waste; contaminated land;
discharges to land, ground and surface water or sewers; emissions to
air; noise; dangerous, hazardous or toxic substances and materials;
nuisance or health and safety. The Chargor represents and warrants
to the Lender that it has not previously been and is not now in
breach of any such legislation and that it is not aware of any
actions, claims or proceedings (whether actual or potential) in
relation to the matters referred to in this
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Paragraph 3.2 and has no reason to believe that it has or is likely
to have any liability in relation to the same.
3.3 The Chargor shall not without the prior written consent of the
Lender:
(a) form or acquire any Subsidiary or any share or loan
capital in any corporate body or enter into any merger or
consolidation;
(b) do or permit any Subsidiary to do any of the following,
namely create, issue, grant any option over, redeem or
purchase any of its share or loan capital or agree to do
any of the same or make any distributions (including
dividend payments) of any kind in respect of any of its
share capital (except that a Subsidiary may issue shares
or loan capital or make distributions to the Chargor or
any other wholly-owned Subsidiary);
(c) borrow or raise any money which would result in the
Chargor breaching any borrowing limit from time to time
agreed with the Lender; or
(d) give any guarantee, indemnity or other assurance, or
make, grant or incur any loan or credit (except in the
ordinary course of business as now conducted).
4. ENFORCE RIGHTS
The Chargor shall:
(a) use its best endeavours to procure prompt observance and
performance by the relevant party of the covenants and
other provisions imposed on the lessor in any
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lease comprised in the Security Assets and on the lessee
in any Derivative Lease; and
(b) use its best endeavours to enforce any rights and
institute, continue or defend any proceedings relating to
the Security Assets as the Lender may from time to time
require, in each case at the Chargor's cost.
5. MANAGEMENT OF SECURITY ASSETS
The Chargor shall manage the Security Assets in a proper and
efficient manner and in particular (but without limitation) shall:
(a) keep all buildings and erections, fixtures and fittings,
plant and machinery, equipment and other effects
comprised in the Security Assets in good and substantial
repair, condition, decoration and working order;
(b) not without the prior written consent of the Lender make,
permit or allow any alterations or additions of a
material nature to any such Security Assets or carry out
any works of demolition on them; and
(c) not do, permit or allow to be done anything which might
in any way depreciate, jeopardise or otherwise prejudice
the security held by the Lender or the value of the
Security Assets and shall immediately inform the Lender
of any such matter.
6. INSURANCE
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6.1 Without prejudice to Paragraph 5, the Chargor shall ensure that all
appropriate insurance in respect of the Security Assets is maintained
at all times. Such insurance shall:
(a) be taken out with insurers previously approved in writing
by the Lender;
(b) be in the joint names of the Lender and the Chargor or,
if the Lender so agrees, in the Chargor's name with the
interest of the Lender and Ticketmaster noted on each
policy;
(c) be for an amount not less than the full reinstatement or
(as applicable) insurable value (or such other amount as
the Lender may in its discretion specify from time to
time);
(d) include cover against:
(i) loss or damage by fire, explosion,
earthquake, riot and civil commotion,
malicious damage, impact, flood, storm or
tempest (including lightning), aircraft and
articles dropped from them, bursting and
overflowing of water tanks, apparatus and
pipes, damage to any plate glass and such
other risks as a prudent man of business
would maintain;
(ii) loss or damage by defamation of any type or
any other legal or contentious actions and
all legal and other professional fees at the
current scales from time to time in
connection with any of the same;
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(iii) such additional risks or other matters as the
Lender may require from time to time (subject
only to availability);
(iv) architects', engineers', surveyors' and other
professional fees at the current scales from
time to time; and
(v) demolition charges, debris removal and any
consequential loss directly or indirectly
resulting from such loss or damage, including
loss of profits and at least three years'
loss of rent; and
(e) contain such provisions as the Lender may require from
time to time to avoid the Lender's interest being
prejudiced by any act of the Chargor or any occupier of
the Properties.
6.2 The Chargor shall not do or permit to be done anything in or upon or
relating to the Security Assets which may make void or voidable any
such insurance and shall (at any time the Lender so requests)
forthwith produce to the Lender the policy or policies of insurance
maintained from time to time under Paragraph 6.1, evidence
satisfactory to the Lender that all premia are paid up to date and
any other information relating to such insurance requested by the
Lender.
6.3 The Chargor shall apply any moneys which it may receive (or be
entitled to receive) under any insurance of the Security Assets
(whether or not effected or maintained in pursuance of the Chargor's
obligations under this Paragraph 6) either (at the Lender's option):
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(a) in making good the loss or damage or recouping
expenditure in respect of which the same is received (the
Chargor making good any deficiency); or
(b) in or towards the payment or discharge of (or the
provision of cash cover for) the Secured Liabilities
(which shall be deemed for such purpose to be payable
immediately to the Lender);
and the Chargor irrevocably appoints the Lender as its attorney to
collect all such moneys from the insurers and to give them a good
discharge for such moneys.
7. NO DEVELOPMENT
The Chargor shall ensure that (unless and to the extent that the
Lender gives its prior written consent) nothing is done on the
Security Assets which is "development" as defined in Section 55 of
the Town and Country Planning Act 1990; in particular (but without
limitation) the Chargor shall not without such consent change the use
of the Security Assets.
8. RENT REVIEWS
The Chargor shall:
(a) promptly instigate any rent review under any Derivative
Lease and use its best endeavours to ensure that the best
rent is obtained upon each such review;
(b) take all steps necessary to protect its position with
regard to any rent review under any leases comprised in
the Security Assets;
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(c) not without the Lender's prior written consent agree the
terms of any rent review referred to in Paragraph 8(a) or
(b) or refer the same to arbitration or determination by
any third party; and
(d) keep the Lender promptly and fully informed as to all
material matters relating to any such rent review.
9. NOTICES AND NEGOTIATIONS
9.1 The Chargor shall:
(a) give to the Lender a copy of any notice, direction,
consent, licence, permission or order (or any proposal
for the same) given, issued or made by any local or other
authority relating to the Security Assets;
(b) take all necessary steps to comply with the same; and
(c) make or join in making such representations in respect of
the same as the Lender requests;
and any compensation received as a result of such notice, order or
proposal shall be paid to the Lender and applied as if such
compensation constituted proceeds of an enforcement of this security.
9.2 The Chargor shall not without the Lender's prior written consent
enter into any negotiations or reach any agreement with any local or
other authority concerning the acquisition of the Security Assets.
The Lender may (itself or through its agents) conduct such
negotiations or make such agreement on behalf of the Chargor.
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9.3 The Chargor shall provide the Lender with a copy of any report,
accounts, circular, notice or other item sent or provided to it (or
to any person on its behalf) in connection with its holding of the
Securities or any of them immediately upon receipt of the same.
10. REGISTRATION, TITLE AND DOCUMENTS
10.1 The Chargor shall give to the Lender as much prior notice as is
possible of a proposed acquisition of any Security Asset which may
fall within the charge created by Paragraph 1.1(a) of Schedule 1 and
notify the Lender immediately upon exchange of contracts and again
upon completion of such acquisition.
10.2 The Chargor shall:
(a) do all things requested by the Lender to facilitate the
registration of this security against any H M Land
Registry Title comprised wholly or partly within the
Properties. For that purpose, the Chargor:
(i) applies to the Chief Land Registrar for a
restriction to be entered on each such Title
in the following terms: "Except under an
order of the Registrar, no disposition or
dealing by the proprietor of the land is to
be registered without the consent of the
proprietor for the time being of the Legal
Charge dated [ ] in favour of
Video Jukebox Network Inc.; and
(ii) certifies that the charge over the Properties
created by this Deed does not contravene any
of the provisions of its memorandum and
articles of association;
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(b) not permit any other person to be registered at H M Land
Registry as proprietor of any Property (or of any
interest in any Property); and
(c) not create or permit to arise any easement or overriding
interest (as defined in the Land Registration Act 1925)
in or over any Property.
10.3 The Chargor shall hold to the order of the Agent and
deposit with it immediately all documents of title and related
documents (including without limitation all local land charges, land
charges and HM Land Registry search certificates and planning
consents) from time to time relating to the Security Assets (except
for any which are and for so long only as they are solely the subject
of the floating charge).
11. THE SECURITIES
11.1 The Chargor shall duly and punctually pay (or ensure that there are
paid) all calls, instalments or other payments which may be made or
become due in respect of any of the Securities as and when the same
from time to time become due.
11.2 The Chargor shall:
(a) deposit with the Agent and permit the Agent to hold and
retain:
(i) all stock and share certificates and
documents of title relating to the Securities;
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(ii) transfers of the Securities duly completed in
favour of the Agent or otherwise as it may
direct; and
(iii) such other documents as the Agent may from
time to time require for perfecting its title
to any Securities (duly executed by or signed
on behalf of the registered holder) or for
vesting or enabling it to vest the same in
itself or its nominees or in any purchaser,
to the intent that the Agent may at any time
without notice present them for registration;
and
(b) if so requested by the Agent, transfer all or any of the
Securities into the name of the Agent or its nominees or
agents as the Agent may select. The Chargor agrees that
the Agent may hold all or any of the Securities in any
branch of the Agent or in any nominees or other agents
and that all the Securities shall be held at the expense,
risk and responsibility of the Chargor.
12. FURTHER ASSURANCE
The Chargor shall at its own expense execute and do (and ensure that
its nominees execute and do) all such assurances, acts and things as
the Lender may require from time to time for perfecting or
protecting the Lender's security over the Security Assets or for
facilitating the realisation of such property and the exercise of all
powers, authorities and discretions vested by this security in the
Lender or in any Receiver. In particular (but without limitation),
the Chargor shall (and shall ensure that its nominees shall) promptly
execute all transfers, conveyances, assignments, assurances and legal
mortgages of the Security Assets as, in
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such form and to such person as the Lender may require from time to
time.
13. BOOK DEBTS
13.1 Paragraph 1 applies to the Book Debts as it does to the other
Security Assets. For the avoidance of doubt, any release, discharge,
compounding, compromise, set-off, variation or postponement of any of
the Book Debts and any waiver or rights in respect of any of the Book
Debts would be a dealing requiring the Lender's prior written consent
under Paragraph 1(d).
13.2 The Chargor shall pay into a current account or a separate designated
account (as the Lender may require) of the Chargor ("the Designated
Account") with National Westminster Bank plc all moneys which it may
receive in respect of the Book Debts and shall deal with the Book
Debts only in the ordinary course of getting in and realising the
same and hold the proceeds thereof (until payment into such
Designated Account) upon trust for the Lender and shall pay or
otherwise deal with such moneys standing in such Designated Account
in accordance with any directions from time to time given in writing
by the Lender; the Chargor shall give notice to or permit the Lender
to give notice to such bank of this security prior to any notice
being given under Paragraph 1.4 of Schedule 1 or to the provisions of
Paragraph 1.2 of Schedule 1 becoming operative in the absence of any
directions from the Lender any moneys received by the Chargor and
paid into such account in respect of the Book Debts shall upon such
payment in stand released from the fixed charge on the Book Debts
hereinbefore by this debenture created and shall stand subject to the
floating charge created by this security over the other property and
assets of the Chargor; and such release shall in no respects derogate
from the
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subsistence and continuance of the said fixed charge on all other
Book Debts of the Chargor for the time being outstanding.
13.3 The Chargor shall if called upon by the Lender to do so at any time
execute legal assignments of all or any of the Book Debts to the
Lender and give notice of such assignment to the relevant debtor(s),
each such assignment and notice to be in such form as the Lender may
require.
13.4 The Chargor shall permit its bankers to furnish directly to the
Lender from time to time upon request full statements and particulars
of all the Chargor's accounts with them and such other financial
statements and information in relation to the assets and liabilities
of the Chargor as are from time to time available to them.
13.5 The Chargor shall not without the prior written consent of the Lender
sell, charge, assign, factor or discount any of the Book Debts or any
securities in respect of the Book Debts in favour of any other person
or effect or permit any release, exchange, compounding or set-off in
respect of the same or withdraw any of the same from the Designated
Account.
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SCHEDULE 3
POWERS OF THE LENDER, THE AGENT AND A RECEIVER
1. ENTRY AND ACTION IN DEFAULT
1.1 Both or either of the Lender (and anyone authorised by the Lender)
and the Agent may enter any part of the Property, to examine the
condition of the same in order to verify that the Chargor has
performed all of its obligations under this security and to carry out
any works. Such entry shall be permitted by the Chargor at any time
upon reasonable notice (but without notice in the case of emergency)
and may be made with or without workmen, plant and materials. It
shall not cause any person entering or the Lender or the Agent to be
liable as a mortgagee in possession.
1.2 If the Chargor fails to take any action which it is required in this
security to take, then the Lender or the Agent or a Receiver may take
such action to remedy that failure (including but not limited to the
action so required but not taken) as it or he may think fit on the
Chargor's behalf.
2. ENFORCEMENT
2.1 Neither Section 93 (1) nor Section 103 of the LPA shall apply to this
security.
2.2 This security shall become enforceable immediately upon any Demand
being made. The Lender or the Agent may at any time after that
enforce all or any part of this security as it thinks fit. In
particular (but without limitation), it may without further notice
exercise in relation to the Security Assets:
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(a) the power of sale, the power to call in, collect, convert
into money or otherwise deal with or dispose of on an
instalment basis or otherwise and generally in such
manner and upon such terms as it thinks fit and all other
powers conferred on mortgagees by the LPA (or otherwise
by law) as extended, varied or amended by this security;
and
(b) (without first appointing a Receiver) any or all of the
powers, authorities and discretions which are conferred
by this security (whether expressly or by implication)
upon a Receiver, including (but without limitation) those
relating to leases set out in Paragraph 7.1 of Schedule
4.
2.3 None of the Lender, the Agent or any Receiver shall be liable as a
mortgagee in possession to account in relation to the Security Assets
(except to the extent of actual receipts) for any loss upon
realisation or for any other default or omission for which it or he
would otherwise be liable as such a mortgagee.
3. APPOINTMENT OF A RECEIVER
3.1 At any time after this security shall have become enforceable, at any
time if the Chargor so requests in writing or if a petition is
presented for an administration order to be made under the Insolvency
Act 1986 in respect of the Chargor, the Lender or the Agent may
(without further notice to the Chargor) appoint in writing (signed by
a manager or more senior officer of the Lender or the Agent as
appropriate) any one or more persons to be an administrative receiver
or a receiver and/or manager of the whole or any part of the Security
Assets (a "Receiver"). Any Receiver so appointed shall (subject to
the terms of the instrument of
37
<PAGE> 41
his appointment) have the powers referred to or set out in this
security. In the case of joint Receivers, each may (unless the
Lender or the Agent as appropriate otherwise directs) exercise any
and all of those powers independently of the other Receiver or
Receivers.
3.2 The Lender or the Agent may from time to time fix the remuneration of
any Receiver appointed by it, without being limited by the maximum
rate specified in Section 109(6) of the LPA. The Lender or the Agent
may also (subject to any necessary approval from the Court) end the
appointment of any such Receiver by notice in writing (signed as in
Paragraph 3.1) and appoint under Paragraph 3.1 a replacement for any
Receiver whose appointment ends for any reason.
3.3 Any Receiver shall be the agent of the Chargor (so that the Chargor
shall be solely responsible for his acts, debts, defaults and
remuneration), except that if the Chargor goes into liquidation, any
Receiver will after that act as a principal (and not as the agent of
the Lender or the Agent).
4. APPROPRIATION OF RECEIPTS
4.1 Subject to Paragraph 4.2, any moneys received by the Lender, the
Agent or any Receiver under the powers conferred by this security
shall (subject to the payment of any claims having priority to this
security but in substitution for Section 109(8) of the LPA) be
applied in the following order of priority:
(a) in discharging the remuneration of any Receiver and all
costs, charges and expenses of and incidental to his
appointment, together with interest on such remuneration,
costs, charges and expenses at the Interest Rate; then
38
<PAGE> 42
(b) in or towards payment or discharge of (or provision of
cash cover for) the rest of the Secured Liabilities in
such manner or order as the Lender or the Agent may
decide in its absolute discretion (such decision
overriding any appropriation by the Chargor); then
(c) in payment of the surplus (if any) to the Chargor or any
other person entitled to it.
4.2 Any moneys received by the Lender, the Agent or any Receiver under
the powers conferred by this security may, at the discretion of the
Lender or the Agent, be placed in a suspense account (before or after
any appropriation under Paragraph 4.1) and kept there for so long as
the Lender or the Agent thinks fit.
5. DELEGATION AND APPOINTMENT OF ATTORNEYS
5.1 The Lender and the Agent may at any time and from time to time
delegate to any person or persons all or any of the powers,
authorities and discretions which are exercisable by it under this
security. Any such delegation may be made by power of attorney or in
any other manner, upon such terms (including power to sub-delegate)
and subject to such regulations as the Lender or the Agent as
appropriate may think fit. Neither the Lender nor the Agent shall in
any way be liable or responsible to the Chargor for any loss or
damage arising from any act, default, omission or misconduct on the
part of any such delegate or sub-delegate.
5.2 The Chargor by way of security irrevocably appoints the Lender, the
Agent, every Receiver and every delegate or sub-delegate appointed
pursuant to Paragraph 5.1 separately to be its attorney on its
behalf, in its name and as its act or deed:
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<PAGE> 43
(a) to execute and do all such assurances, acts and things as
the Chargor is required to execute and do under the
Finance Documents (including without limitation to
execute in favour of the Lender, the Agent or its
nominees any document required by the Lender or the Agent
under Paragraph 12 of Schedule 2); and
(b) to seal and deliver and otherwise perfect or do any deed,
assurance, agreement, instrument, act or thing which it
or he may deem proper or desirable in or for the purpose
of exercising any of the powers, authorities and
discretions conferred by this security or by law on the
Lender, the Agent or any Receiver.
The Chargor by this Deed ratifies and confirms and agrees to ratify
and confirm anything which any such attorney may do in the proper and
lawful exercise or purported exercise of all or any of the powers,
authorities and discretions referred to in this Paragraph 6.2.
6. REDEMPTION OF PRIOR SECURITY INTERESTS
The Lender and the Agent may at any time redeem any prior Security
Interest against the Security Assets or procure the transfer of such
Security Interest to itself and may settle and pass the accounts of
the holder of such Security Interest. Any accounts so settled and
passed shall be conclusive and binding on the Chargor. All principal
moneys, interest, costs, charges and expenses incurred in and
incidental to such redemption and transfer shall be paid by the
Chargor to the Lender or the Agent as appropriate on demand, together
in each case with interest calculated and compounded at the rate and
in the manner set out in Clause 8.
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<PAGE> 44
7. RELEASES CONDITIONAL
7.1 Any release, settlement, discharge, re-assignment or arrangement (in
this Paragraph 8 a "release") given or made by the Lender or the
Agent on its behalf on the faith of any assurance, security or
payment shall be conditional upon that assurance, security or payment
not being avoided, reduced or ordered to be repaid under any
enactment relating to liquidation, bankruptcy or insolvency. If such
avoidance or reduction occurs or such order is made, the release
given by the Lender or the Agent on its behalf shall not prejudice
the right of the Lender or the Agent to enforce this security in
respect of the Secured Liabilities and as between the Chargor on the
one hand and the Lender and the Agent on the other hand this security
shall (notwithstanding the release) be deemed to have remained at all
times held by the Lender as security for the Secured Liabilities.
7.2 The Lender may in its reasonable discretion retain all or part of
this security as security for the Secured Liabilities for a period of
25 months after the Secured Liabilities shall have been paid and
discharged in full. If at any time within that period of 25 months a
petition is presented to a competent court for a winding-up or
administration order to be made in respect of the Chargor or steps
are taken to wind up the Chargor voluntarily, then the Lender may
continue to retain all or part of this security for such further
period as the Lender in its absolute discretion shall determine.
41
<PAGE> 45
SCHEDULE 4
RECEIVER'S FURTHER POWERS
1. GENERAL
1.1 Every Receiver shall (subject to the terms of the instrument by which
he is appointed) have the powers conferred on receivers by statute,
including those set out in Schedule 1 to the Insolvency Act 1986 even
if he is not an administrative receiver as defined in that Act.
1.2 In addition, every Receiver shall (subject as in Paragraph 1.1) have
the power to do or omit to do anything which the Chargor could do or
omit to do in relation to the Security Assets. In particular (but
without limitation), every Receiver shall have the powers listed in
Paragraphs 2 to 9.
1.3 The powers referred to in Paragraphs 1.1 and 1.2 shall not be subject
to any restrictions contained in the LPA and shall continue
notwithstanding any liquidation of the Chargor.
2. MANAGEMENT
2.1 To manage the Security Assets as he may think fit.
2.2 To appoint managers, officers, agents and employees upon such terms
(as to remuneration and otherwise) as he may determine and discharge
any such persons (whether or not appointed by him).
2.3 To raise or borrow money for any purpose on such terms and conditions
as he may think fit. Any such borrowing may be unsecured or secured
(in priority to this security or otherwise) on the Security Assets.
No Receiver may exercise
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<PAGE> 46
this power to raise or borrow money without the prior written consent
of the Lender and the Lender may give (unconditionally or subject to
conditions) or refuse such consent without incurring any liability to
the Chargor or any other person. However, no person lending such
money shall be concerned to enquire as to the existence or terms of
such consent or as to the propriety or purpose of the exercise of
such power or to see to the application of any money so raised or
borrowed.
3. PROTECTION OF ASSETS
To do anything which the Chargor might do for the protection or
improvement of the Security Assets and in particular (but without
limitation):
(a) to make and effect all such repairs and improvements and
carry out all such other works to the Security Assets as
he may think fit;
(b) to renew and replace such of the Security Assets as shall
in his opinion require to be renewed and replaced; and
(c) to effect all such insurances as he may think fit in
relation to the Security Assets or otherwise in relation
to his powers as set out in this security.
4. RENTS
To exercise on the Chargor's behalf any powers conferred on it by law
from time to time as landlord or tenant in respect of any Property.
A Receiver shall not be under any obligation to exercise such powers;
nor shall he incur any
43
<PAGE> 47
liability in respect of any exercise or non-exercise of such powers.
5. EXERCISE POWERS
5.1 To exercise any voting rights attached to any of the Security Assets.
5.2 To make calls (conditionally or unconditionally) on the shareholders
of the Chargor in respect of its uncalled capital.
6. CONTRACTS, COMPROMISES AND ACTIONS
6.1 To make any contracts, compromises or arrangements which appear to
him expedient in the interests of the Lender and in particular (but
without limitation) to enter into or cancel any contract and to
settle, adjust, refer to arbitration, compromise or arrange any
claims, accounts, disputes, questions, demands and other matters
(including without limitation rent reviews) relating in any way to
the Security Assets or the Chargor.
6.2 To bring, prosecute, enforce, defend or abandon all such actions,
suits and proceedings in relation to the Security Assets or the
Chargor as may seem to him expedient.
7. DISPOSAL
7.1 To sell, lease or otherwise dispose of the Security Assets, to grant
easements, rights, licences and options over or in respect of the
same and to surrender, accept the surrender or vary any lease,
agreement or arrangement relating to the same. This power may be
exercised without the need to comply with Sections 99 and 100 of the
LPA. Any such disposal or
44
<PAGE> 48
other dealing may be effected in such manner and on such terms as he
may think fit for consideration consisting of cash, debentures or
other obligations, shares or other valuable consideration and any
such consideration may be payable in a lump sum or by instalments
spread over such period as he may think fit.
7.2 To sever from the premises to which they are annexed and sell
separately (in accordance with Paragraph 7.1) any plant, machinery or
fixtures.
7.3 To form or promote the formation of any company (whether or not as a
Subsidiary of the Chargor) with a view to the same acquiring the
Security Assets or otherwise and to arrange for the same to trade (or
to cease to do so) and to acquire the Security Assets pursuant to a
disposal under Paragraph 7.1 or otherwise.
7.4 To give a valid receipt for all moneys and to execute all assurances
and things which may be proper or desirable for realising the
Security Assets.
8. WORKS
To commence, complete or abandon any building operations or works of
conversion, refurbishment or development on any Property, to apply
for and obtain any approvals, permissions, licences or consents which
are necessary or desirable for the same and to enter into or continue
any contract relating to the same.
9. GENERAL
9.1 To do all such other acts and things as he may consider either
desirable or necessary for realising the Security
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<PAGE> 49
Assets or otherwise incidental or conducive to any of the powers
conferred on him under or by virtue of this security. For the
avoidance of doubt the powers referred to in this Paragraph shall in
no way be limited by any power of attorney granted to a Receiver
whether by virtue of this security or otherwise.
9.2 To exercise and do in relation to the Security Assets all such
powers, authorities and things as he would be capable of exercising
or doing if he were the absolute beneficial owner of the same.
9.3 To act as the agent of the Chargor and to use the name of the Chargor
in the exercise of any of the powers set out or referred to above.
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<PAGE> 50
EXECUTION:
- ---------
SIGNED AND DELIVERED as a deed ) /s/ Vincent Monsey
by Vincent Monsey, Director )
and Elizabeth A. Laskowski director/ ) /s/ Elizabeth A. Laskowski
Secretary duly authorised for and )
on behalf of VIDEO JUKEBOX )
NETWORK INTERNATIONAL LIMITED )
SIGNED by Alan McGlade ) /s/ Alan McGlade
and duly )
authorised for and on behalf of )
VIDEO JUKEBOX NETWORK INC. )
47
<PAGE> 1
8-K
EXHIBIT 99.7
<PAGE> 2
DATED June 30 1995
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(2) TM/VIDEO INTERNATIONAL, INC.
_______________________________
DEBENTURE
_______________________________
ROWE & MAW
20 Black Friars Lane
London EC4V 6HD
Tel: 071-248 4282
Fax: 071-248 2009
351/184/26089-0001
<PAGE> 3
INDEX
<TABLE>
<CAPTION>
Clause Subject Matter Page No
- ------ -------------- -------
<S> <C> <C>
1. Definitions and Interpretation 2
2. Covenant to Pay 7
3. Charging Clause (and see Schedule 1) 8
4. Covenants (and see Schedule 2) 8
5. Powers of the Lender and a Receiver 8
(and see Schedules 3 and 4)
6. Continuing Security 8
7. Third Party Protection 9
8. Costs and Expenses 9
9. Currency 10
10. Severability 12
11. Amendments, Waivers and Rights 12
12. Assignment 13
13. Law and Jurisdiction 13
14. Notices 13
15. General 15
16. Counterparts 15
Schedule
- --------
1. The Charges and Assignment 16
2. Covenants 21
3. Powers of the Lender, the Agent and a Receiver 34
4. Receiver's Further Powers 40
</TABLE>
<PAGE> 4
DEBENTURE
DATE: June 30, 1995
PARTIES:
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (registered number
2643552) whose registered office is at Imperial House, 11-13 Young
Street, Kensington, London W8 ("the Chargor"); and
(2) TM/VIDEO INTERNATIONAL, INC. a Delaware corporation ("the Lender").
RECITALS:
(A) The Lender has made available to the Chargor a facility to provide
working capital finance to the Chargor under the terms of a secured
loan agreement made between (1) the Lender and (2) the Chargor and
dated the same date as the date of this Deed.
(B) The Chargor is required as a condition of the facility referred to in
Recital (A) to enter into this Deed creating security over all of its
property, rights, assets and undertaking in favour of the Lender.
(C) This document is the deed of the Chargor, even if it has not been duly
executed by the Lender or has been executed by the Lender but not as a
deed.
(D) This Deed contains an application to the Chief Land Registrar and in
respect of dispositions and dealings (see Paragraph 10.2 of Schedule
2).
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<PAGE> 5
(E) The parties have agreed that the Chargor shall execute a deed in
favour of VJN simultaneously with this Deed creating security in
favour of VJN in the same terms, mutatis mutandis, as this security.
(F) The rights of the Lender under this security and the rights of VJN
under the VJN Debenture are at all times subject to the restrictions
and obligations contained in the Intercreditor Agreement.
(G) The Lender has appointed and delegated the Agent to take certain
action on its behalf in respect of this security in the Intercreditor
Agreement and by this Deed irrevocably by way of security ratifies and
confirms such appointment and delegation.
THIS DEED WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed (including the Recitals), the following words and
expressions shall have the following meanings:
"Agent" the meaning given to it in the Intercreditor
Agreement
"Book Debts" the book debts and other matters and things
described in paragraph 1.1(c)(v) of Schedule 1
"Business Day" the meaning given to it in the Loan Agreement
"Demand" the meaning given to it in Clause 2.1
2
<PAGE> 6
"Derivative Lease" any lease, underlease or tenancy subsisting or
created (whether by the Chargor or otherwise)
directly or indirectly out of any interest
of the Chargor in any of the Security Assets
"Finance Documents" all or any of the Loan Agreement, the Security
Documents (as defined in the Loan Agreement), this
security and any other document referred to or
entered into in connection with any of the same
"Interest Rate" the rate specified in Section 2.6 of the Loan
Agreement
"Intercreditor the intercreditor agreement of the same date as
Agreement" this deed and made between the Lender, VJN, the
Chargor and Atlantic American Capital Corporation
"the Land" the premises forming part of a building known as
Imperial House, 11/13 Young Street, Kensington,
London W8 more particularly described (in
respect of the first floor) in a lease dated 8th
February 1995 between (1) Archly Corporation N.V.
and (2) the Chargor and (in respect of the
floor) in an Underlease dated 3rd January 1994
between (1) Office Angels Limited and (2) the
Chargor
"Licences" both or either of the licence agreement of
today's date made between VJN and the Chargor and
a licence dated 11th February 1992 granted by
the Independent
3
<PAGE> 7
Television Commission in favour of the Chargor
"Loan Agreement" the secured loan agreement referred to in
Recital (A)
"LPA" the Law of Property Act 1925
"Properties" all or any part of the properties and other
assets described in Paragraph 1.1(a) of
Schedule 1 and "Property" shall be construed
accordingly
"Receiver" the meaning given to it in Paragraph 3.1 of
Schedule 3
"Secured the meaning given to it in Clause 2.2
Liabilities"
"Securities" the stocks, shares, bonds, securities and other
property, rights and assets described in
Paragraph 1.1(c)(vi) of Schedule 1
"Security Assets" all or any part of the property, revenue, assets,
business, undertakings and rights from time
to time the subject of this security and
"Security Asset" shall be construed accordingly
"Security any debenture, mortgage, charge, pledge, lien,
Interest" assignment, hypothecation, right of set-off,
title retention or other arrangement or agreement
the effect of which is the creation of security
4
<PAGE> 8
"Specified IP" all or any part of the property, assets and
rights (including trade names, service marks,
trade marks, copyrights and trade secrets)
subject to the licence agreement made between
VJN and the Chargor referred to in the
definition of Licences
"Subsidiary" the meaning given to it in section 736 Companies
Act 1985
"VJN" Video Jukebox Network, Inc., a corporation
registered in the State of Florida, USA, whose
principal place of business is at 12,000
Biscayne Boulevard, Miami, Florida 33181
"VJN Debenture" the debenture in favour of VJN referred to in
Recital (D)
1.2 Words and expressions defined in the Loan Agreement but not defined in
this Deed shall have the same meaning in this Deed as in the Loan
Agreement.
1.3 The index and headings are included for convenience only and shall not
affect the interpretation or construction of this Deed.
1.4 In this Deed, unless the context requires otherwise, any reference to:
(a) the Lender or the Chargor respectively includes its
successors in title and assigns and this Deed shall be
enforceable notwithstanding any change in the constitution
of the Lender, its absorption in or
5
<PAGE> 9
amalgamation with any other person or the acquisition of
all or part of its undertaking by any other person;
(b) "a party" or "the parties" is to a party or the parties (as
the case may be) to this Deed;
(c) a Recital, Clause or Schedule is to a recital of, clause of
or schedule to this Deed (as the case may be) and
references made in a Schedule to Paragraphs are to
paragraphs of that Schedule;
(d) "this Deed" includes the Schedules, which form part of this
Deed for all purposes;
(e) a statute or statutory provisions include any
consolidation, re-enactment, modification or replacement of
the same and any subordinate legislation in force under the
same from time to time;
(f) the masculine, feminine or neuter gender respectively
includes the other genders, references to the singular
include the plural (and vice versa) and references to
persons include firms, corporations and unincorporated
associations;
(g) a document is to that document as varied, supplemented or
replaced from time to time; and
(h) "this security" is to this Deed and the security created
by, pursuant to or supplemental to it.
1.5 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of each of the Finance Documents to
which the Lender and the Chargor are parties (other than this Deed)
are incorporated in this Deed.
6
<PAGE> 10
2. COVENANT TO PAY
2.1 The Chargor shall immediately on the Lender's or the Agent's demand (a
"Demand") pay, discharge or (in the case of contingent liabilities)
provide cash cover, in an amount satisfactory to the Lender or the
Agent as appropriate, for the Secured Liabilities as and when the same
become due and payable.
2.2 In this security, "the Secured Liabilities" means all moneys,
obligations and other actual or contingent liabilities due, owing or
incurred by the Chargor to both and either of the Lender and the Agent
now or at any time or from time to time under or in connection with
the Finance Documents together with interest, commission, fees and
charges. Such interest shall be calculated to the date of payment (as
well after as before any Demand or judgment) at the rates and upon the
terms from time to time agreed with the Lender or the Agent (or in the
absence of agreement on a daily basis at the Interest Rate and to be
compounded quarterly).
2.3 Upon the giving of any Demand, the Lender shall cease to be under any
further commitment to the Chargor and any of the Secured Liabilities
not otherwise due and payable on demand shall immediately become due
and payable. Any number of Demands may be made without limitation.
2.4 Any certification or determination by the Lender or the Agent of any
amount payable or rate applicable under the Finance Documents shall be
conclusive evidence as against the Chargor of the matter(s) to which
it relates.
7
<PAGE> 11
3. CHARGING CLAUSE
The payment and discharge of the Secured Liabilities shall be secured
in the manner and to the extent specified in Paragraph 1 of Schedule
1.
4. COVENANTS
The Chargor covenants with the Lender as set out in Schedule 2 and
warrants and represents to the Lender asset out in Paragraphs 1 and
3.2 of that Schedule.
5. POWERS OF THE LENDER, THE AGENT AND A RECEIVER
The Lender, the Agent and a Receiver shall have the powers set out in
Schedule 3 and a Receiver shall have the further powers set out in
Schedule 4.
6. CONTINUING SECURITY
6.1 This security is a continuing security and shall remain in force and
shall secure the ultimate balance of the Secured Liabilities,
notwithstanding intermediate payment, settlement of account or
discharge of all or part of the Secured Liabilities to the Lender or
the Agent and also notwithstanding the liquidation or other incapacity
of the Chargor, any change in its constitution, name or style or any
other event, matter or thing.
6.2 This security is in addition to (and shall not merge with, otherwise
prejudice or affect or be prejudiced or affected by) any other right,
remedy, guarantee, encumbrance, indemnity or Security Interest which
may be or have been created in favour of the Lender or the Agent.
Accordingly, this security may be enforced notwithstanding the
existence or invalidity of all or any of the same and also
8
<PAGE> 12
notwithstanding the Lender or the Agent at any time exchanging,
releasing, varying, abstaining from perfecting or enforcing or
otherwise dealing or omitting to deal with all or any of the same.
7. THIRD PARTY PROTECTION
No purchaser, mortgagee or other person dealing with the Lender, the
Agent or a Receiver shall be concerned:
(a) to enquire whether any of the Secured Liabilities have
become due or payable or remain unpaid or undischarged or
whether the power which the Lender, the Agent or a Receiver
is purporting to exercise has become exercisable; or
(b) to see to the application of any money paid to the Lender,
the Agent or to a Receiver.
8. COSTS AND EXPENSES
The Chargor covenants with the Lender and the Agent to indemnify the
Lender, the Agent and any Receiver fully (and in the case of legal
costs and expenses on a solicitor and own client basis) on demand
against all costs, expenses, liabilities, claims, demands, actions or
proceedings of any kind incurred by (or made or brought against) it or
him (or any manager or agent appointed by it or him):
(a) as a result of any failure by the Chargor to perform any of
its obligations under this security or any other of the
Finance Documents;
(b) in the exercise (or purported exercise) of any of the
powers or rights conferred by this security or by any other
Security Interest granted (whether by the
9
<PAGE> 13
Chargor or any third party) in respect of all or part of
the Secured Liabilities; or
(c) in respect of any other matter or thing done or omitted
relating to the Security Assets or the assets secured by
any such other Security Interest;
together in each case with interest calculated on a daily basis from
the date the same is incurred or becomes payable by the Lender, the
Agent or the Receiver (as the case may be) at the Interest Rate, such
interest being compounded quarterly.
9. CURRENCY
9.1 Any payment by the Chargor under this security shall be
made in the currency (in this Clause 9.1 "the Contractual Currency")
in which the relevant Secured Liabilities were denominated or incurred
and shall be made to the Lender or the Agent in the United States of
America. If in respect of any of the Secured Liabilities the Lender
or the Agent receives payment or that Secured Liability is converted
into a claim, proof, judgment or order, in either case in a currency
other than the Contractual Currency, then:
(a) the Chargor shall indemnify the Lender or the Agent as
appropriate against any loss or liability resulting from
the conversion;
(b) if the amount received by the Lender or the Agent, when
converted into the Contractual Currency by the Lender or
the Agent as appropriate, is less than the amount of the
relevant Secured Liability in the Contractual Currency,
then the Chargor shall on demand pay to the Lender an
amount in the Contractual Currency equal to the difference;
and
10
<PAGE> 14
(c) the Chargor shall on demand pay to the Lender or the Agent
as appropriate any exchange costs and taxes payable in
connection with any conversion referred to in this Clause
9.1.
9.2 If and to the extent that the Chargor fails to pay on demand any
amount due under this security, the Lender or the Agent may in its
absolute discretion (and without notice to the Chargor) purchase at
any time after that so much of a currency as the Lender or the Agent
considers necessary or desirable to cover any part of the Secured
Liabilities denominated or incurred in such currency. That purchase
shall be made at the then-prevailing spot rate of exchange obtained by
the Lender or the Agent (as conclusively determined by the Lender or
the Agent as appropriate) for purchasing such currency with sterling.
The Chargor agrees to indemnify the Lender and the Agent against the
full sterling price (including all costs, charges and expenses) paid
by the Lender or the Agent as appropriate for such currency.
9.3 All moneys received or held by the Lender or the Agent from the
Chargor or under this security may from time to time be converted into
such other currency as the Lender or the Agent considers necessary or
desirable to cover any part of the Secured Liabilities denominated or
incurred in that currency. That conversion shall be made at the
then-prevailing spot rate of exchange obtained by the Lender or the
Agent (as conclusively determined by the Lender or the Agent as
appropriate) for purchasing the currency to be acquired with the
existing currency.
10. SEVERABILITY
If any part of any provision of this security shall be invalid or
unenforceable, then the remainder of such
11
<PAGE> 15
provision and all other provisions of this security shall remain valid
and enforceable.
11. AMENDMENTS, WAIVERS AND RIGHTS
11.1 No amendment or variation of the terms of this security shall be
effective unless it is made or confirmed in a written document signed
by both parties.
11.2 No delay in exercising or non-exercise by the Lender or the Agent of
any of its rights under or in connection with this security shall
operate as a release or waiver of that right. Rather, any such waiver
or release must be specifically granted in writing signed by an
authorised signatory of the Lender or the Agent and shall:
(a) be confined to the specific circumstances in which it is
given;
(b) not affect any other enforcement of the same or any other
right; and
(c) (unless it is expressed to be irrevocable) be revocable at
any time in writing.
11.3 The rights and remedies of the Lender and the Agent under this
security are cumulative and not exclusive of any rights or remedies of
the Lender or the Agent under the general law. Each of the Lender and
the Agent may exercise each of its rights as often as it thinks
necessary.
11.4 Neither the Lender nor the Agent shall be under any duty of any kind
to the Chargor in respect of the exercise or non-exercise of any of
its rights under this security. The Chargor shall not rely on such
exercise or non-exercise in any way.
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12. ASSIGNMENT
12.1 Subject to the Intercreditor Agreement, the Lender may assign all or
any of its rights under this security to any person to whom all or any
of its rights may be assigned under the Loan Agreement without any
requirement to notify the Chargor or obtain its further consent. Any
assignee or successor in title of the Lender shall be treated for all
purposes as if it had been an original party to this security in
addition to the Lender.
12.2 Notwithstanding any confidentiality obligation imposed on the Lender
or the Agent by law, both or either of them may disclose to any
assignee, proposed assignee or person with whom from time to time it
has or wishes to enter into an agreement in connection with this
security such information about the Chargor as it thinks fit. The
Chargor irrevocably waives all rights of confidentiality in respect of
such disclosure.
13. LAW AND JURISDICTION
The parties agree that this security shall be construed in accordance
with English law and for the exclusive benefit of the Lender that the
courts of England are to have jurisdiction to settle any disputes
which may arise in connection with this security; but the Chargor
agrees that the Lender and the Agent shall be entitled to bring
proceedings in connection with this security in any other court of
competent jurisdiction (including without limitation the jurisdiction
of the United States District Court covering Wilmington, Delaware).
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14. NOTICES
All notices, demands and other communications made by the Lender or
the Agent relating to this security may (without prejudice to any
other effective mode of making the same) be delivered or sent to the
Chargor at its registered office from time to time or such other
address of which the Lender or the Agent has received no less than 15
business days' prior written actual notice from the Chargor and shall
take effect:
(a) if delivered, upon delivery;
(b) if posted, at the earlier of the time of delivery and (if
posted in the United Kingdom by first class registered
post) 10 am on the second business day after posting; or
(c) if sent by facsimile, when a complete and legible copy of
the communication, whether that sent by facsimile or a hard
copy sent by post or delivered by hand, has been received
at the appropriate address, provided that if any
communication would otherwise become effective on a
non-business day or after 5 pm on a business day, it shall
instead become effective at 10 am on the next business day.
Section 196 of the LPA shall not apply to this Deed.
15. GENERAL
This Deed shall remain the property of the Lender notwithstanding any
release or discharge or purported release or discharge hereof.
16. COUNTERPARTS
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This Deed may be executed in any number of counterparts each of which
will constitute an original but all of which when taken together shall
constitute one deed.
EXECUTION:
The parties have shown their acceptance of the terms of this Deed by executing
it, in the case of the Chargor as a deed, at the end of the Schedules.
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SCHEDULE 1
1. THE CHARGES AND ASSIGNMENT
1.1 As security for the payment and discharge of the Secured Liabilities,
the Chargor as beneficial owner:
(a) (i) charges to the Lender by way of first fixed
legal mortgage all rights, estates and
interests of the Chargor (both present and
future) in the Land; and
(ii) charges to the Lender by way of first fixed
charge all rights, estates and interests of the
Chargor (both present and future) in all
freehold or leasehold property (other than
properties referred to in Paragraph 1.1(a)(i))
in each case together with all buildings, structures,
erections, fixtures and fittings (including trade fixtures
and fittings) from time to time on any such property and
the benefit of (including without limitation the right to
receive rents and other moneys under) all existing and
future leases, underleases, tenancies and agreements
relating to any such property;
(b) assigns to the Lender by way of security the present and
future benefit of (including without limitation the right
to receive rents and other moneys under) all present and
future Derivative Leases and other agreements and documents
relating to all or any part of the Properties (other than
the Licences as to which see Paragraph 1.2) and the
proceeds of any sale or other disposal of the Security
Assets;
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(c) charges the following to the Lender by way of first fixed
charge:
(i) all plant, machinery, vehicles, equipment and
other chattels owned by the Chargor (and the
Chargor's rights in any such items leased,
hired or rented to it by any other person) both
present and future together with any spare
parts, fuel and tools of the Chargor relating
to the same (but excluding stock-in-trade of
the Chargor) (all such items together "the
mortgaged chattels") together with the benefit
of (including without limitation the right to
receive rents and other moneys under) all
existing and future leases, underleases,
tenancies, agreements and warranties relating
to any such asset;
(ii) all goodwill of the Chargor (both present and
future), including but not limited to, any
rights of the Chargor (both present and future)
in the goodwill of any business carried on at
or through the Properties;
(iii) all rights of the Chargor to the proceeds of
any insurances (both present and future),
including but not limited to the proceeds of
any insurance over or relating to the
Properties;
(iv) all uncalled capital of the Chargor (both
present and future) and the rights to future
calls in respect of such capital;
(v) all book and other debts, revenues and claims
due, owing or payable to the Chargor (both
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present and future) wheresoever situate whether
originally owing to the Chargor or purchased or
otherwise acquired by it and the benefit of all
rights relating thereto, including but not
limited to:
(1) all insurance policies of the
Chargor and all things in action
which may give rise to a debt,
revenue or claim, including
(without limitation) any debt,
revenue or claim which may arise
under any contracts entered into by
the Chargor in the course of its
business, and
(2) any deposit in or credit balance on
bank accounts of or held for the
Chargor, whether alone or jointly
with any other person
(3) any amounts realised pursuant to an
order of the court under Sections
238, 239 or 244 of the Insolvency
Act 1986,
together with the benefit of negotiable or
non-negotiable instruments, guarantees,
indemnities, Security Interests, and rights of
tracing in respect of any such debt, revenue or
claim and any other rights entitling the
Chargor to recover or enforce payment of any
such debt, revenue or claim;
(vi) all stocks, shares, bonds and other securities
of any kind and all other interests of the
Chargor both present and future in any company,
firm, consortium, joint venture or entity
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including all allotments, accretions, offices,
rights or options, benefits and advantages
whatsoever at any time accruing, offered or
arising (including without limitation any
dividends or other distributions declared) in
respect of or incidental to the same and all
stocks, shares, bonds, securities, rights,
money or property accruing thereto or offered
at any time by way of conversion, redemption,
bonus, preference, option or otherwise in
respect thereof; and
(vii) all of the Chargor's present and future
patents, patent applications, trade and service
marks, trade names, registered designs,
confidential information and copyrights
(including those in computer software) and all
other interests of the Chargor both present and
future in respect of or incidental to the same
and all licences and ancillary and connected
rights relating to the intangible property both
present and future of the Chargor (including,
without limitation, all and any of the
Chargor's present and future rights, title and
interest in the Specified IP); and
(d) charges to the Lender by way of first floating charge all
of the undertaking, property, rights and other assets of
any kind of the Chargor (both present and future) not
referred to in Paragraphs 1.1(a) to (c).
1.2.1 The Chargor as beneficial owner assigns to the Lender by way of
security for the payment and discharge of the Secured Liabilities all
rights which it has both present and future in and relating to the
Licences including (without limitation) the right to give instructions
under them and the
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benefit (but not subject to the burden) of all provisions (express or
implied) on the part of any party to them, the right to receive moneys
under them and all other powers and rights under them.
1.2.2 The Chargor may not without the prior written consent of the Lender
vary, rescind, waive any rights or agree to terminate the Licenses.
1.2.3 The Chargor shall, if the Lender so requests at any time, enter into a
legal assignment or assignments of the Licenses in favour of the
Lender, satisfying the requirements of Section 136 of the LPA and in
such form as the Lender may reasonably require.
1.3 The floating charge referred to in Paragraph 1.1(d) shall
automatically (without any notice to the Chargor being required)
operate as a fixed charge immediately if:
(a) the Chargor (without the prior consent in writing of the
Lender) creates a Security Interest over any of the
Security Assets referred to in Paragraph 1.1(d) or attempts
to do so; or
(b) a receiver is appointed over any of those Security Assets
or any person threatens or attempts to levy any distress,
execution, sequestration or other process against any of
the same.
Nothing in this Paragraph 1.3 shall affect crystallisation of the
floating charge under the general law.
1.4 The Lender may at any time by notice to the Chargor convert the
floating charge referred to in Paragraph 1.1(d) into a fixed charge in
respect of all of the Security Assets referred to in that Paragraph or
any part of them as may be specified or referred to in the notice.
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SCHEDULE 2
COVENANTS
1. NO DISPOSALS OR SECURITY INTERESTS
The Chargor shall not without the prior written consent of the Lender:
(a) sell or agree to sell or otherwise dispose of any interest
it has in the Security Assets (except that the Chargor may
without such consent sell any of its stock-in-trade charged
by way of floating charge only, if that sale is for full
market value and in the usual course of the Chargor's
trading as now conducted);
(b) grant, agree to grant or permit to continue any Derivative
Lease of or licence with respect to the Security Assets,
part with or share the possession or occupation of the same
or permit or suffer any such parting or sharing to
continue;
(c) create (or permit to continue or to be created) any
Security Interest over the Security Assets other than this
security and any liens arising by operation of law in the
ordinary course of trading; or
(d) otherwise deal in any way with the Security Assets (other
than in the ordinary course of business at arm's length on
commercial terms) or enter into any onerous or restrictive
obligations affecting the same;
and the Chargor warrants and represents to the Lender that it is the
beneficial owner of the Security Assets and has not granted or agreed
or purported to grant any Derivative Lease.
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2. LEASES
The Chargor shall not without the prior written consent of the Lender:
(a) surrender or determine or agree to the determination,
surrender or termination of any lease forming part of the
Security Assets;
(b) determine or forfeit (or commence any proceedings for
forfeiture of) any Derivative Lease, agree to its
determination or assignment or accept its surrender; or
(c) vary, amend or agree to vary or amend the terms of any
lease comprised in the Security Assets or any Derivative
Lease.
Accordingly no grant, agreement to grant or acceptance of a surrender
of a Derivative Lease by the Chargor during the continuance of this
security shall have effect or force (by virtue of Sections 99 and 100
of the LPA or otherwise) unless the Lender shall have given its prior
consent to the same in writing.
3. COVENANTS, LEGAL OBLIGATIONS AND PAYMENTS
3.1 The Chargor shall:
(a) observe and perform every covenant, stipulation, provision
and other matter (whether or not contained in any
agreement, deed or document) from time to time affecting
the Security Assets or their use or enjoyment, including
(without limitation) those contained in any lease comprised
in the Security Assets and any Derivative Leases and (if
required by the Lender) produce evidence to satisfy the
Lender that the Chargor is complying with this obligation;
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(b) promptly inform the Lender if it becomes aware of any steps
taken or proceedings commenced by any person with a view to
obtaining forfeiture of any lease comprised in the Security
Assets;
(b) comply with all (and not permit any breach of any)
statutory and other provisions, bye-laws, notices, orders
and regulations (whether relating to planning, building or
any other matter) affecting the Security Assets; and
(d) pay (or procure the payment of) all rents, rates, taxes,
charges, assessments, impositions and other outgoings of
any kind which are from time to time payable (whether by
the owner or the occupier) in respect of the Security
Assets.
3.2 Without prejudice to Paragraph 3.1(b), the Chargor shall comply with
any legislation (including regulations, codes of practice, circulars
and guidance notes made under the same) relating to environmental
matters, including (but not limited to) waste; contaminated land;
discharges to land, ground and surface water or sewers; emissions to
air; noise; dangerous, hazardous or toxic substances and materials;
nuisance or health and safety. The Chargor represents and warrants to
the Lender that it has not previously been and is not now in breach of
any such legislation and that it is not aware of any actions, claims
or proceedings (whether actual or potential) in relation to the
matters referred to in this Paragraph 3.2 and has no reason to believe
that it has or is likely to have any liability in relation to the
same.
3.3 The Chargor shall not without the prior written consent of the Lender:
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(a) form or acquire any Subsidiary or any share or loan capital
in any corporate body or enter into any merger or
consolidation;
(b) do or permit any Subsidiary to do any of the following,
namely create, issue, grant any option over, redeem or
purchase any of its share or loan capital or agree to do
any of the same or make any distributions (including
dividend payments) of any kind in respect of any of its
share capital (except that a Subsidiary may issue shares or
loan capital or make distributions to the Chargor or any
other wholly-owned Subsidiary);
(c) borrow or raise any money which would result in the Chargor
breaching any borrowing limit from time to time agreed with
the Lender; or
(d) give any guarantee, indemnity or other assurance, or make,
grant or incur any loan or credit (except in the ordinary
course of business as now conducted).
4. ENFORCE RIGHTS
The Chargor shall:
(a) use its best endeavours to procure prompt observance and
performance by the relevant party of the covenants and
other provisions imposed on the lessor in any lease
comprised in the Security Assets and on the lessee in any
Derivative Lease; and
(b) use its best endeavours to enforce any rights and
institute, continue or defend any proceedings relating to
the Security Assets as the Lender may from time to time
require, in each case at the Chargor's cost.
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5. MANAGEMENT OF SECURITY ASSETS
The Chargor shall manage the Security Assets in a proper and efficient
manner and in particular (but without limitation) shall:
(a) keep all buildings and erections, fixtures and fittings,
plant and machinery, equipment and other effects comprised
in the Security Assets in good and substantial repair,
condition, decoration and working order;
(b) not without the prior written consent of the Lender make,
permit or allow any alterations or additions of a material
nature to any such Security Assets or carry out any works
of demolition on them; and
(c) not do, permit or allow to be done anything which might in
any way depreciate, jeopardise or otherwise prejudice the
security held by the Lender or the value of the Security
Assets and shall immediately inform the Lender of any such
matter.
6. INSURANCE
6.1 Without prejudice to Paragraph 5, the Chargor shall ensure that all
appropriate insurance in respect of the Security Assets is maintained
at all times. Such insurance shall:
(a) be taken out with insurers previously approved in writing
by the Lender;
(b) be in the joint names of the Lender and the Chargor or, if
the Lender so agrees, in the Chargor's name with the
interest of the Lender and VJN noted on each policy;
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(c) be for an amount not less than the full reinstatement or
(as applicable) insurable value (or such other amount as
the Lender may in its discretion specify from time to
time);
(d) include cover against:
(i) loss or damage by fire, explosion, earthquake,
riot and civil commotion, malicious damage,
impact, flood, storm or tempest (including
lightning), aircraft and articles dropped from
them, bursting and overflowing of water tanks,
apparatus and pipes, damage to any plate glass
and such other risks as a prudent man of
business would maintain;
(ii) loss or damage by defamation of any type or any
other legal or contentious actions and all
legal and other professional fees at the
current scales from time to time in connection
with any of the same;
(iii) such additional risks or other matters as the
Lender may require from time to time (subject
only to availability);
(iv) architects', engineers', surveyors' and other
professional fees at the current scales from
time to time; and
(v) demolition charges, debris removal and any
consequential loss directly or indirectly
resulting from such loss or damage, including
loss of profits and at least three years' loss
of rent; and
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(e) contain such provisions as the Lender may require from time
to time to avoid the Lender's interest being prejudiced by
any act of the Chargor or any occupier of the Properties.
6.2 The Chargor shall not do or permit to be done anything in or upon or
relating to the Security Assets which may make void or voidable any
such insurance and shall (at any time the Lender so requests)
forthwith produce to the Lender the policy or policies of insurance
maintained from time to time under Paragraph 6.1, evidence
satisfactory to the Lender that all premia are paid up to date and any
other information relating to such insurance requested by the Lender.
6.3 The Chargor shall apply any moneys which it may receive (or be
entitled to receive) under any insurance of the Security Assets
(whether or not effected or maintained in pursuance of the Chargor's
obligations under this Paragraph 6) either (at the Lender's option):
(a) in making good the loss or damage or recouping expenditure
in respect of which the same is received (the Chargor
making good any deficiency); or
(b) in or towards the payment or discharge of (or the provision
of cash cover for) the Secured Liabilities (which shall be
deemed for such purpose to be payable immediately to the
Lender);
and the Chargor irrevocably appoints the Lender as its attorney to
collect all such moneys from the insurers and to give them a good
discharge for such moneys.
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7. NO DEVELOPMENT
The Chargor shall ensure that (unless and to the extent that the
Lender gives its prior written consent) nothing is done on the
Security Assets which is "development" as defined in Section 55 of the
Town and Country Planning Act 1990; in particular (but without
limitation) the Chargor shall not without such consent change the use
of the Security Assets.
8. RENT REVIEWS
The Chargor shall:
(a) promptly instigate any rent review under any Derivative
Lease and use its best endeavours to ensure that the best
rent is obtained upon each such review;
(b) take all steps necessary to protect its position with
regard to any rent review under any leases comprised in the
Security Assets;
(c) not without the Lender's prior written consent agree the
terms of any rent review referred to in Paragraph 8(a) or
(b) or refer the same to arbitration or determination by
any third party; and
(d) keep the Lender promptly and fully informed as to all
material matters relating to any such rent review.
9. NOTICES AND NEGOTIATIONS
9.1 The Chargor shall:
(a) give to the Lender a copy of any notice, direction,
consent, licence, permission or order (or any proposal for
the same) given, issued or made by any local or other
authority relating to the Security Assets;
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(b) take all necessary steps to comply with the same; and
(c) make or join in making such representations in respect of
the same as the Lender requests;
and any compensation received as a result of such notice, order or
proposal shall be paid to the Lender and applied as if such
compensation constituted proceeds of an enforcement of this security.
9.2 The Chargor shall not without the Lender's prior written consent enter
into any negotiations or reach any agreement with any local or other
authority concerning the acquisition of the Security Assets. The
Lender may (itself or through its agents) conduct such negotiations or
make such agreement on behalf of the Chargor.
9.3 The Chargor shall provide the Lender with a copy of any report,
accounts, circular, notice or other item sent or provided to it (or to
any person on its behalf) in connection with its holding of the
Securities or any of them immediately upon receipt of the same.
10. REGISTRATION, TITLE AND DOCUMENTS
10.1 The Chargor shall give to the Lender as much prior notice as is
possible of a proposed acquisition of any Security Asset which may
fall within the charge created by Paragraph 1.1(a) of Schedule 1 and
notify the Lender immediately upon exchange of contracts and again
upon completion of such acquisition.
10.2 The Chargor shall:
(a) do all things requested by the Lender to facilitate the
registration of this security against any H M Land Registry
Title comprised wholly or partly within the Properties.
For that purpose, the Chargor:
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(i) applies to the Chief Land Registrar for a
restriction to be entered on each such Title in
the following terms: "Except under an order of
the Registrar, no disposition or dealing by the
proprietor of the land is to be registered
without the consent of the proprietor for the
time being of the Legal Charge dated
[_________] in favour of TM/VIDEO
INTERNATIONAL, INC."; and
(ii) certifies that the charge over the Properties
created by this Deed does not contravene any of
the provisions of its memorandum and articles
of association;
(b) not permit any other person to be registered at H M Land
Registry as proprietor of any Property (or of any interest
in any Property); and
(c) not create or permit to arise any easement or overriding
interest (as defined in the Land Registration Act 1925) in
or over any Property.
10.3 The Chargor shall hold to the order of the Agent and
deposit with it immediately all documents of title and related
documents (including without limitation all local land charges, land
charges and HM Land Registry search certificates and planning
consents) from time to time relating to the Security Assets (except
for any which are and for so long only as they are solely the subject
of the floating charge).
11. THE SECURITIES
11.1 The Chargor shall duly and punctually pay (or ensure that there are
paid) all calls, instalments or other payments
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which may be made or become due in respect of any of the Securities as
and when the same from time to time become due.
11.2 The Chargor shall:
(a) deposit with the Agent and permit the Agent to hold and
retain:
(i) all stock and share certificates and documents
of title relating to the Securities;
(ii) transfers of the Securities duly completed in
favour of the Agent or otherwise as it may
direct; and
(iii) such other documents as the Agent may from time
to time require for perfecting its title to any
Securities (duly executed by or signed on
behalf of the registered holder) or for vesting
or enabling it to vest the same in itself or
its nominees or in any purchaser, to the intent
that the Agent may at any time without notice
present them for registration; and
(b) if so requested by the Agent, transfer all or any of the
Securities into the name of the Agent or its nominees or
agents as the Agent may select. The Chargor agrees that
the Agent may hold all or any of the Securities in any
branch of the Agent or in any nominees or other agents and
that all the Securities shall be held at the expense, risk
and responsibility of the Chargor.
12. FURTHER ASSURANCE
The Chargor shall at its own expense execute and do (and ensure that
its nominees execute and do) all such assurances,
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acts and things as the Lender may require from time to time for
perfecting or protecting the Lender's security over the Security
Assets or for facilitating the realisation of such property and the
exercise of all powers, authorities and discretions vested by this
security in the Lender or in any Receiver. In particular (but without
limitation), the Chargor shall (and shall ensure that its nominees
shall) promptly execute all transfers, conveyances, assignments,
assurances and legal mortgages of the Security Assets as, in such form
and to such person as the Lender may require from time to time.
13. BOOK DEBTS
13.1 Paragraph 1 applies to the Book Debts as it does to the other Security
Assets. For the avoidance of doubt, any release, discharge,
compounding, compromise, set-off, variation or postponement of any of
the Book Debts and any waiver or rights in respect of any of the Book
Debts would be a dealing requiring the Lender's prior written consent
under Paragraph 1(d).
13.2 The Chargor shall pay into a current account or a separate designated
account (as the Lender may require) of the Chargor ("the Designated
Account") with National Westminster Bank plc all moneys which it may
receive in respect of the Book Debts and shall deal with the Book
Debts only in the ordinary course of getting in and realising the same
and hold the proceeds thereof (until payment into such Designated
Account) upon trust for the Lender and shall pay or otherwise deal
with such moneys standing in such Designated Account in accordance
with any directions from time to time given in writing by the Lender;
the Chargor shall give notice to or permit the Lender to give notice
to such bank of this security prior to any notice being given under
Paragraph 1.4 of Schedule 1 or to the provisions of Paragraph 1.2 of
Schedule 1 becoming operative in the absence of any
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directions from the Lender any moneys received by the Chargor and paid
into such account in respect of the Book Debts shall upon such payment
in stand released from the fixed charge on the Book Debts hereinbefore
by this debenture created and shall stand subject to the floating
charge created by this security over the other property and assets of
the Chargor; and such release shall in no respects derogate from the
subsistence and continuance of the said fixed charge on all other Book
Debts of the Chargor for the time being outstanding.
13.3 The Chargor shall if called upon by the Lender to do so at any time
execute legal assignments of all or any of the Book Debts to the
Lender and give notice of such assignment to the relevant debtor(s),
each such assignment and notice to be in such form as the Lender may
require.
13.4 The Chargor shall permit its bankers to furnish directly to the Lender
from time to time upon request full statements and particulars of all
the Chargor's accounts with them and such other financial statements
and information in relation to the assets and liabilities of the
Chargor as are from time to time available to them.
13.5 The Chargor shall not without the prior written consent of the Lender
sell, charge, assign, factor or discount any of the Book Debts or any
securities in respect of the Book Debts in favour of any other person
or effect or permit any release, exchange, compounding or set-off in
respect of the same or withdraw any of the same from the Designated
Account.
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SCHEDULE 3
POWERS OF THE LENDER, THE AGENT AND A RECEIVER
1. ENTRY AND ACTION IN DEFAULT
1.1 Both or either of the Lender (and anyone authorised by the Lender) and
the Agent may enter any part of the Property, to examine the condition
of the same in order to verify that the Chargor has performed all of
its obligations under this security and to carry out any works. Such
entry shall be permitted by the Chargor at any time upon reasonable
notice (but without notice in the case of emergency) and may be made
with or without workmen, plant and materials. It shall not cause any
person entering or the Lender or the Agent to be liable as a mortgagee
in possession.
1.2 If the Chargor fails to take any action which it is required in this
security to take, then the Lender or the Agent or a Receiver may take
such action to remedy that failure (including but not limited to the
action so required but not taken) as it or he may think fit on the
Chargor's behalf.
2. ENFORCEMENT
2.1 Neither Section 93 (1) nor Section 103 of the LPA shall apply to this
security.
2.2 This security shall become enforceable immediately upon any Demand
being made. The Lender or the Agent may at any time after that
enforce all or any part of this security as it thinks fit. In
particular (but without limitation), it may without further notice
exercise in relation to the Security Assets:
(a) the power of sale, the power to call in, collect, convert
into money or otherwise deal
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with or dispose of on an instalment basis or otherwise and
generally in such manner and upon such terms as it thinks
fit and all other powers conferred on mortgagees by the LPA
(or otherwise by law) as extended, varied or amended by
this security; and
(b) (without first appointing a Receiver) any or all of the
powers, authorities and discretions which are conferred by
this security (whether expressly or by implication) upon a
Receiver, including (but without limitation) those relating
to leases set out in Paragraph 7.1 of Schedule 4.
2.3 None of the Lender, the Agent or any Receiver shall be liable as a
mortgagee in possession to account in relation to the Security Assets
(except to the extent of actual receipts) for any loss upon
realisation or for any other default or omission for which it or he
would otherwise be liable as such a mortgagee.
3. APPOINTMENT OF A RECEIVER
3.1 At any time after this security shall have become enforceable, at any
time if the Chargor so requests in writing or if a petition is
presented for an administration order to be made under the Insolvency
Act 1986 in respect of the Chargor, the Lender or the Agent may
(without further notice to the Chargor) appoint in writing (signed by
a manager or more senior officer of the Lender or the Agent as
appropriate) any one or more persons to be an administrative receiver
or a receiver and/or manager of the whole or any part of the Security
Assets (a "Receiver"). Any Receiver so appointed shall (subject to
the terms of the instrument of his appointment) have the powers
referred to or set out in this security. In the case of joint
Receivers, each may (unless the Lender or the Agent as appropriate
otherwise
35
<PAGE> 39
directs) exercise any and all of those powers independently of the
other Receiver or Receivers.
3.2 The Lender or the Agent may from time to time fix the remuneration of
any Receiver appointed by it, without being limited by the maximum
rate specified in Section 109(6) of the LPA. The Lender or the Agent
may also (subject to any necessary approval from the Court) end the
appointment of any such Receiver by notice in writing (signed as in
Paragraph 3.1) and appoint under Paragraph 3.1 a replacement for any
Receiver whose appointment ends for any reason.
3.3 Any Receiver shall be the agent of the Chargor (so that the Chargor
shall be solely responsible for his acts, debts, defaults and
remuneration), except that if the Chargor goes into liquidation, any
Receiver will after that act as a principal (and not as the agent of
the Lender or the Agent).
4. APPROPRIATION OF RECEIPTS
4.1 Subject to Paragraph 4.2, any moneys received by the Lender, the Agent
or any Receiver under the powers conferred by this security shall
(subject to the payment of any claims having priority to this security
but in substitution for Section 109(8) of the LPA) be applied in the
following order of priority:
(a) in discharging the remuneration of any Receiver and all
costs, charges and expenses of and incidental to his
appointment, together with interest on such remuneration,
costs, charges and expenses at the Interest Rate; then
(b) in or towards payment or discharge of (or provision of cash
cover for) the rest of the Secured Liabilities in such
manner or order as the Lender or the Agent may
36
<PAGE> 40
decide in its absolute discretion (such decision overriding
any appropriation by the Chargor); then
(c) in payment of the surplus (if any) to the Chargor or any
other person entitled to it.
4.2 Any moneys received by the Lender, the Agent or any Receiver under the
powers conferred by this security may, at the discretion of the Lender
or the Agent, be placed in a suspense account (before or after any
appropriation under Paragraph 4.1) and kept there for so long as the
Lender or the Agent thinks fit.
5. DELEGATION AND APPOINTMENT OF ATTORNEYS
5.1 The Lender and the Agent may at any time and from time to time
delegate to any person or persons all or any of the powers,
authorities and discretions which are exercisable by it under this
security. Any such delegation may be made by power of attorney or in
any other manner, upon such terms (including power to sub-delegate)
and subject to such regulations as the Lender or the Agent as
appropriate may think fit. Neither the Lender nor the Agent shall in
any way be liable or responsible to the Chargor for any loss or damage
arising from any act, default, omission or misconduct on the part of
any such delegate or sub-delegate.
5.2 The Chargor by way of security irrevocably appoints the Lender, the
Agent, every Receiver and every delegate or sub-delegate appointed
pursuant to Paragraph 5.1 separately to be its attorney on its behalf,
in its name and as its act or deed:
(a) to execute and do all such assurances, acts and things as
the Chargor is required to execute and do under the Finance
Documents (including without limitation to execute in
favour of the Lender, the Agent or its
37
<PAGE> 41
nominees any document required by the Lender or the Agent
under Paragraph 11 of Schedule 2); and
(b) to seal and deliver and otherwise perfect or do any deed,
assurance, agreement, instrument, act or thing which it or
he may deem proper or desirable in or for the purpose of
exercising any of the powers, authorities and discretions
conferred by this security or by law on the Lender, the
Agent or any Receiver.
The Chargor by this Deed ratifies and confirms and agrees to ratify
and confirm anything which any such attorney may do in the proper and
lawful exercise or purported exercise of all or any of the powers,
authorities and discretions referred to in this Paragraph 6.2.
6. REDEMPTION OF PRIOR SECURITY INTERESTS
The Lender and the Agent may at any time redeem any prior Security
Interest against the Security Assets or procure the transfer of such
Security Interest to itself and may settle and pass the accounts of
the holder of such Security Interest. Any accounts so settled and
passed shall be conclusive and binding on the Chargor. All principal
moneys, interest, costs, charges and expenses incurred in and
incidental to such redemption and transfer shall be paid by the
Chargor to the Lender or the Agent as appropriate on demand, together
in each case with interest calculated and compounded at the rate and
in the manner set out in Clause 8.
7. RELEASES CONDITIONAL
7.1 Any release, settlement, discharge, re-assignment or arrangement (in
this Paragraph 8 a "release") given or made by the Lender or the
Agent on its behalf on the faith of any assurance, security or
payment shall be conditional upon that assurance, security or payment
not being avoided,
38
<PAGE> 42
reduced or ordered to be repaid under any enactment relating to
liquidation, bankruptcy or insolvency. If such avoidance or reduction
occurs or such order is made, the release given by the Lender or the
Agent on its behalf shall not prejudice the right of the Lender or the
Agent to enforce this security in respect of the Secured Liabilities
and as between the Chargor on the one hand and the Lender and the
Agent on the other hand this security shall (notwithstanding the
release) be deemed to have remained at all times held by the Lender as
security for the Secured Liabilities.
7.2 The Lender may in its reasonable discretion retain all or part of this
security as security for the Secured Liabilities for a period of 25
months after the Secured Liabilities shall have been paid and
discharged in full. If at any time within that period of 25 months a
petition is presented to a competent court for a winding-up or
administration order to be made in respect of the Chargor or steps are
taken to wind up the Chargor voluntarily, then the Lender may continue
to retain all or part of this security for such further period as the
Lender in its absolute discretion shall determine.
39
<PAGE> 43
SCHEDULE 4
RECEIVER'S FURTHER POWERS
1. GENERAL
1.1 Every Receiver shall (subject to the terms of the instrument by which
he is appointed) have the powers conferred on receivers by statute,
including those set out in Schedule 1 to the Insolvency Act 1986 even
if he is not an administrative receiver as defined in that Act.
1.2 In addition, every Receiver shall (subject as in Paragraph 1.1) have
the power to do or omit to do anything which the Chargor could do or
omit to do in relation to the Security Assets. In particular (but
without limitation), every Receiver shall have the powers listed in
Paragraphs 2 to 9.
1.3 The powers referred to in Paragraphs 1.1 and 1.2 shall not be subject
to any restrictions contained in the LPA and shall continue
notwithstanding any liquidation of the Chargor.
2. MANAGEMENT
2.1 To manage the Security Assets as he may think fit.
2.2 To appoint managers, officers, agents and employees upon such terms
(as to remuneration and otherwise) as he may determine and discharge
any such persons (whether or not appointed by him).
2.3 To raise or borrow money for any purpose on such terms and conditions
as he may think fit. Any such borrowing may be unsecured or secured
(in priority to this security or otherwise) on the Security Assets.
No Receiver may exercise this power to raise or borrow money without
the prior written consent of the Lender and the Lender may give
40
<PAGE> 44
(unconditionally or subject to conditions) or refuse such consent
without incurring any liability to the Chargor or any other person.
However, no person lending such money shall be concerned to enquire as
to the existence or terms of such consent or as to the propriety or
purpose of the exercise of such power or to see to the application of
any money so raised or borrowed.
3. PROTECTION OF ASSETS
To do anything which the Chargor might do for the protection or
improvement of the Security Assets and in particular (but without
limitation):
(a) to make and effect all such repairs and improvements and
carry out all such other works to the Security Assets as he
may think fit;
(b) to renew and replace such of the Security Assets as shall
in his opinion require to be renewed and replaced; and
(c) to effect all such insurances as he may think fit in
relation to the Security Assets or otherwise in relation to
his powers as set out in this security.
4. RENTS
To exercise on the Chargor's behalf any powers conferred on it by law
from time to time as landlord or tenant in respect of any Property. A
Receiver shall not be under any obligation to exercise such powers;
nor shall he incur any liability in respect of any exercise or
non-exercise of such powers.
41
<PAGE> 45
5. EXERCISE POWERS
5.1 To exercise any voting rights attached to any of the Security Assets.
5.2 To make calls (conditionally or unconditionally) on the shareholders
of the Chargor in respect of its uncalled capital.
6. CONTRACTS, COMPROMISES AND ACTIONS
6.1 To make any contracts, compromises or arrangements which appear to him
expedient in the interests of the Lender and in particular (but
without limitation) to enter into or cancel any contract and to
settle, adjust, refer to arbitration, compromise or arrange any
claims, accounts, disputes, questions, demands and other matters
(including without limitation rent reviews) relating in any way to the
Security Assets or the Chargor.
6.2 To bring, prosecute, enforce, defend or abandon all such actions,
suits and proceedings in relation to the Security Assets or the
Chargor as may seem to him expedient.
7. DISPOSAL
7.1 To sell, lease or otherwise dispose of the Security Assets, to grant
easements, rights, licences and options over or in respect of the same
and to surrender, accept the surrender or vary any lease, agreement or
arrangement relating to the same. This power may be exercised without
the need to comply with Sections 99 and 100 of the LPA. Any such
disposal or other dealing may be effected in such manner and on such
terms as he may think fit for consideration consisting of cash,
debentures or other obligations, shares or other valuable
consideration and any such consideration may be
42
<PAGE> 46
payable in a lump sum or by instalments spread over such period as he
may think fit.
7.2 To sever from the premises to which they are annexed and sell
separately (in accordance with Paragraph 7.1) any plant, machinery or
fixtures.
7.3 To form or promote the formation of any company (whether or not as a
Subsidiary of the Chargor) with a view to the same acquiring the
Security Assets or otherwise and to arrange for the same to trade (or
to cease to do so) and to acquire the Security Assets pursuant to a
disposal under Paragraph 7.1 or otherwise.
7.4 To give a valid receipt for all moneys and to execute all assurances
and things which may be proper or desirable for realising the Security
Assets.
8. WORKS
To commence, complete or abandon any building operations or works of
conversion, refurbishment or development on any Property, to apply for
and obtain any approvals, permissions, licences or consents which are
necessary or desirable for the same and to enter into or continue any
contract relating to the same.
9. GENERAL
9.1 To do all such other acts and things as he may consider either
desirable or necessary for realising the Security Assets or otherwise
incidental or conducive to any of the powers conferred on him under or
by virtue of this security. For the avoidance of doubt the powers
referred to in this Paragraph shall in no way be limited by any power
of attorney granted to a Receiver whether by virtue of this security
or otherwise.
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<PAGE> 47
9.2 To exercise and do in relation to the Security Assets all such powers,
authorities and things as he would be capable of exercising or doing
if he were the absolute beneficial owner of the same.
9.3 To act as the agent of the Chargor and to use the name of the Chargor
in the exercise of any of the powers set out or referred to above.
44
<PAGE> 48
EXECUTION:
- ---------
SIGNED AND DELIVERED as a deed )
by Vincent Monsey, Director ) /s/ Vincent Monsey
and Elizabeth A. Laskowski, Director/ ) /s/ Elizabeth A. Laskowski
Secretary duly authorised for and )
on behalf of VIDEO JUKEBOX )
NETWORK INTERNATIONAL LIMITED )
SIGNED by Norman J. Gantz ) /s/ Norman J. Gantz
and duly )
authorised for and on behalf of )
TM/VIDEO INTERNATIONAL, INC. )
45
<PAGE> 1
8-K
EXHIBIT 99.8
<PAGE> 2
________________________________________________________________________________
INTERCREDITOR AGREEMENT
AMONG
TM/VIDEO INTERNATIONAL, INC.,
AND
VIDEO JUKEBOX NETWORK, INC.,
AS LENDERS,
AND
VIDEO JUKEBOX NETWORK INTERNATIONAL, LIMITED,
AS BORROWER
________________________________________________________________________________
JUNE 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DUTIES OF AGENT
Section 2.1. Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Lender's Non-reliance on the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Action on Lenders' Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4. Specific Responsibilities of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Limitations on Agent's Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.6. Powers of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.7. Allocation of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.8. Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
ACKNOWLEDGEMENTS, REPRESENTATIONS
AND WARRANTIES OF LENDERS
Section 3.1. Actions Affecting the Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
INDEMNIFICATION; SUCCESSOR AGENT
Section 4.1. Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.3. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
(i)
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE V
MISCELLANEOUS
Section 5.1. Payments by Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.2. Collections Held In Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.3. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.4. Marshaling: Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.5. Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.6. Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.7. Payment of Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.9. Addresses for Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.10. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.12. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.13. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.14. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.15. Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.16. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.17. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.18. Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.19. Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
(ii)
<PAGE> 5
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated as of June 30,
1995, among TM/VIDEO INTERNATIONAL, INC., a Delaware corporation
("Ticketmaster"), VIDEO JUKEBOX NETWORK, INC., a Florida corporation ("VJN,"
and together with Ticketmaster, the "Lenders") VIDEO JUKEBOX NETWORK
INTERNATIONAL LIMITED (registration number 2643552), a company incorporated
under the laws of England and Wales and whose registered office is at Imperial
House, 11-13 Young Street, Kensington, London W8 ("Borrower"), and Atlantic
American Capital Corp., a Florida corporation, as the agent (the "Agent").
W I T N E S S E T H :
WHEREAS, concurrently herewith and in connection with the execution of
this Agreement, Ticketmaster will make a $1.5 million loan (the "Ticketmaster
Loan") to Borrower pursuant to that certain Secured Loan Agreement dated as of
the date hereof, as evidenced by that certain Secured Promissory Note dated as
of the date hereof (collectively, the "Ticketmaster Loan Documents");
WHEREAS, Borrower's obligations with respect to the Ticketmaster Loan
are secured by the assets of Borrower, as set forth more fully in that certain
Debenture dated the date hereof (the "Ticketmaster Debenture");
WHEREAS, concurrently herewith and in connection with the execution of
this Agreement, VJN will make a $1.5 million loan (the "VJN Loan" and,
collectively with the Ticketmaster Loan, the "Loans") to Borrower, pursuant to
that certain Secured Loan Agreement dated as of the date hereof, as evidenced
by that certain Secured Promissory Note dated as of the date hereof (the "VJN
Loan Documents" and, collectively with the Ticketmaster Loan Documents, the
"Loan Documents");
WHEREAS, Borrower's obligations with respect to the VJN Loan are
secured by the assets of Borrower, as set forth more fully in that certain
Debenture dated the date hereof (the "VJN Debenture" and, collectively with the
Ticketmaster Debenture, the "Debentures"); and
WHEREAS, Ticketmaster and VJN desire to enter into this Agreement for
the purpose of designating their rights and priorities under their respective
Loan Documents and Debentures with respect to Borrower's assets;
NOW, THEREFORE, in consideration of the premises set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lender and Borrower hereby agree as follows:
<PAGE> 6
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the
following terms and phrases shall have the following meanings:
"Affiliate" means any Person that, directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with the Borrower or either Lender, as the case may be.
"Control" (including the terms "controlling," "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.
"Collateral" means all assets of Borrower subject to the
Debentures.
"Event of Default" means any event the occurrence of which
constitutes an Event of Default as defined in the Ticketmaster Loan Documents
and/or the VJN Loan Documents, as the case may be.
"Lien" means or refers to any lien, lease, claim, charge,
pledge, mortgage, encumbrance, security interest, option, preferential
arrangement, rights of first refusal, options, restriction on voting, transfer
or other alienation of any kind, adverse interest, or the interest of a third
party under any conditional sale agreement, capital lease or other title
retention agreement and any other claims or restrictions of any nature
whatsoever.
"Obligations" means the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding relating
to Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Lenders, whether direct or indirect,
absolute or contingent, due or to be due, or now existing or hereafter
incurred, which may arise under, out of or in connection with this Agreement,
the Loan Documents, the Debentures and any other documents made, delivered or
given in connection herewith or therewith.
"Person" means an individual or any corporation, limited
liability company,
-2-
<PAGE> 7
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or agency or sub-division thereof) or other
entity of any kind.
"Proportionate Share" means, with respect to either Lender on
any specified date, a fraction the numerator of which shall be the outstanding
principal, together with all outstanding accrued interest thereon, of such
Lender's Loan and the denominator of which shall be the sum of the outstanding
principal, together with all outstanding accrued interest thereon, of the
Ticketmaster Loan and the VJN Loan.
ARTICLE II
DUTIES OF AGENT
SECTION 2.1. APPOINTMENT OF AGENT. Each Lender hereby appoints
the Agent to act as its exclusive agent hereunder, and the Agent hereby agrees
to act as each Lender's agent pursuant to the terms of this Agreement. The
Agent shall have and may exercise such powers under this Agreement as are
specifically delegated to the Agent by the terms hereof and no implied duties
or obligations shall be read into this Agreement against the Agent. Each
Lender hereby authorizes, consents to, and directs the Borrower, and the
Borrower hereby agrees, to deal with the Agent as the true and lawful agent of
such Lender to the extent set forth herein.
SECTION 2.2. LENDER'S NON-RELIANCE ON THE AGENT. The Agent shall
not be required to keep informed as to the Borrower's performance of or
compliance with this Agreement, the Loan Documents or the Debentures or to
inspect the properties or books of the Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide the Lenders with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the Agent's possession.
SECTION 2.3. ACTION ON LENDERS' INSTRUCTIONS.
(a) Notwithstanding anything contained herein to the
contrary, the Agent shall be entitled to act or refrain from acting, and in all
cases shall be fully protected in acting or refraining from acting, under this
Agreement in accordance with instructions directed to it, in writing, from and
executed by both Lenders (any such instructions, "Lenders Instructions")
without being required to determine the authenticity or the correctness of any
fact stated therein or the propriety or validity of the service thereof;
provided that under no circumstances shall the Agent have any duty or
obligation to take any actions hereunder, even if instructed to do so by
Lenders Instructions, if the Agent determines, in its reasonable judgment, that
such actions could subject it to liability or expense for which satisfactory
indemnity has not been provided
-3-
<PAGE> 8
hereunder or otherwise. If the Agent intends to refrain from taking any action
based on its determination that such action could subject it to liability or
expense for which satisfactory indemnity has not been provided, it will so
notify the Lenders in a timely manner.
(b) If the Lenders, at any time or from time to time, are
unable to reach agreement regarding whether to act or refrain from acting with
respect to the Loan Documents and/or the Borrower, the Collateral or any
portion thereof, then either Lender may deliver to the Agent a notice, in
writing certified by an officer of such Lender, of the existence and nature of
such impasse (an "Impasse Notice"). Upon receipt of an Impasse Notice, the
Agent shall have the absolute right, at its election, to do the following:
(i) The Agent may file an action in interpleader
requiring the Lenders to answer and litigate their several claims and
rights among themselves and the Agent is authorized to deposit with
the clerk of the court all documents, securities and funds held by it
pursuant to this Agreement. In the event such action is filed, the
Lenders, jointly and severally, agree to pay the Agent's charges,
costs and expenses, including reasonable attorney's fees, that the
Agent is required to expend or incur in such interpleader action, the
amount therefor to be fixed and judgment therefor to be rendered by
the court. Upon the filing of such action, the Agent shall be fully
released and discharged from all obligations to further perform any
duties or obligations otherwise imposed by the terms of this
Agreement.
(ii) The Agent may submit such dispute to a
representative of KPMG Peat Marwick who does not perform work for the
account of either Lender (the "Arbiter"), who shall render an opinion
regarding whether, if the Arbiter were a Lender under this Agreement,
it would act or refrain from acting in the relevant circumstances.
The results of the Arbiter shall be binding upon the Agent and the
Lenders. All fees and expenses of the Arbiter shall be borne by the
nonprevailing Lender or, in the event each Lender prevails on some of
the issues in dispute, such fees and expenses shall be borne by both
Lenders, jointly and severally.
SECTION 2.4. SPECIFIC RESPONSIBILITIES OF THE AGENT. In addition
to actions to be taken or omitted by the Agent pursuant to Lenders
Instructions, the Agent shall:
(a) furnish to each Lender, promptly upon receipt or
transmission thereof, duplicates of all reports, notices (including without
limitation any Impasse Notice or notice of an Event of Default), requests,
demands, certificates and other documents received or given by it under this
Agreement unless any such document shall state thereon that it has previously
been furnished directly to each Lender;
(b) accept, on behalf of the Lenders, any part of the
Collateral delivered
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<PAGE> 9
to the Agent (including, without limitation, any certificated securities,
instruments and documents), and accept, on behalf of the Lenders, any new
Collateral given as security for the Obligations, and execute and deliver, on
behalf of the Lenders, such documents or instruments as it may consider
necessary or appropriate to evidence the creation of or to maintain the
perfection of any Lien with respect to such Collateral; provided, however, that
the Agent shall not be required to prepare or exercise discretion or judgment
with respect to, or determine the validity, enforceability or legal sufficiency
of, any such documents or instruments;
(c) inform each Lender in writing of the occurrence of
any Event of Default promptly upon learning of the same; provided, however,
that the Agent shall not be deemed to have any knowledge whatsoever of any
Event of Default unless it has actually received written notice thereof from
either Lender or from the Borrower;
(d) upon the receipt by it of Lenders Instructions:
(i) take action to protect and preserve the Collateral
and realize on and foreclose upon the Collateral, including, without
limitation, (A) appointing a receiver on behalf of either or both
Lenders, exercising the power of sale or otherwise enforcing the
security created by the Debentures (or either of them) on behalf of
either or both of the Lenders, (B) initiating or defending any and all
actions or proceedings which may be brought affecting the Collateral
or any portion thereof, or (C) otherwise pursue any remedies available
to either Lender or to the Agent in respect of any Collateral or any
portion thereof, which actions may include, without limitation,
initiating and conducting any public or private sale of personal
property or any trustee sale or other sale conducted pursuant to a
private power of sale or judicial foreclosure of any real property,
negotiating or obtaining a deed in lieu of foreclosure, managing,
selling or otherwise disposing of any portion of the Collateral
acquired by it at a foreclosure sale whether public or private or by
deed in lieu of foreclosure or pursuing any other actions or remedies
relating to the Collateral or any portion thereof;
(ii) provide notice required by the Debentures to the
Borrower or any other party entitled thereto, in order to take any
actions required or authorized to be taken under this Agreement or
under such Debenture or specified in Lenders Instructions;
(iii) receive proceeds of the Collateral subsequent to an
Event of Default and foreclosure and apply such proceeds as specified
in Section 2.7; and/or
(iv) release the Collateral or any portion thereof from
any Liens thereon which were created pursuant to any Loan Document or
Debenture.
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<PAGE> 10
SECTION 2.5. LIMITATIONS ON AGENT'S RESPONSIBILITIES. Except as
otherwise expressly provided herein or in Lenders Instructions, the Agent shall
not have any duty or obligation, express or implied, to:
(a) manage, control, use, maintain, sell, dispose of,
purchase, bid for or otherwise deal with the Collateral or any portion thereof,
or to otherwise take or refrain from taking any such action under, or in
connection, with this Agreement;
(b) register or file with the Companies House (pursuant
to Section 395 of the Companies Act 1985) or other relevant law any debenture
or any other document or any other instrument referred to herein or therein or
with respect to any Lien;
(c) take any action which, in its sole judgment, relates
to, materially affects or impairs the amounts which the Lenders may recover
from disposition of the Collateral or any portion thereof, including without
limitation, any election or waiver of remedies available with respect to the
Collateral or the manner of foreclosure upon the same; any determination of the
order and timing of foreclosure upon any portion of the Collateral or of the
amount of any credit bid to be entered at any public or private, judicial or
non-judicial sale of the Collateral or any portion thereof; the pursuit of any
remedies against the Borrower following the completion of foreclosure upon the
Collateral or any portion thereof; the compromise or settlement of any claims
against the Borrower, including the conduct of any negotiations relating to the
same or with a view toward the termination of any pending foreclosure
proceedings;
(d) obtain or maintain insurance on the Collateral or any
other insurance; or
(e) pay or discharge any tax, assessment or other
governmental charge or any Lien of any kind owing with respect to, or assessed
or levied against, any part of the Collateral.
SECTION 2.6. POWERS OF THE AGENT. The Agent is hereby empowered
and authorized to take all actions that the Agent believes, in the reasonable
exercise of its sole and absolute discretion, necessary, appropriate, desirable
or incidental to the Agent's performance of the specific responsibilities set
forth in Section 2.4, including without limitation, the authority to employ
such persons, firms or professionals as it shall deem appropriate or desirable
in connection with the performance of its duties hereunder, including, without
limitation, environmental consultants, real estate brokers, appraisers,
auctioneers, stockbrokers, fiduciaries, investment bankers, accountants and
attorneys. If in one or more instances the Agent takes any action or assumes
any responsibility not specifically delegated to it pursuant to the provisions
of this Agreement, neither the taking of such action nor the assumption of such
responsibility shall be deemed to be an express or implied undertaking on the
part of the Agent that it will take the same or similar action or assume the
same or similar responsibility in any
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<PAGE> 11
other instance.
SECTION 2.7. ALLOCATION OF PAYMENTS.
(a) Regardless of whether either of the Loans or
Debentures has been held by any court of law to be void, voidable,
unenforceable or has been set aside as a result of the application of any
provision of the Insolvency Act of 1986 or any analogous legislation dealing
with insolvency matters, the Agent shall apply all payments it receives in
respect of the Obligations, including without limitation any proceeds of
Collateral, in the following order:
(i) first, to pay fees, reimbursements or indemnities then
due to the Agent;
(ii) second, to pay the appropriate party which collected
such proceeds an amount equal to all costs and expenses actually
incurred by such party in the collection of such proceeds and only to
the extent that such costs and expenses previously have not been
reimbursed;
(iii) third, to pay interest and fees due with respect to the
Obligations, which shall be paid to the Lenders ratably based upon
their respective Proportionate Share;
(iv) fourth, to pay the outstanding principal balance of the
Loans in accordance with each Lender's Proportionate Share; and
(v) fifth, the balance, if any, to be paid to the Borrower.
(b) In the event that the Agent in good faith is in doubt
as to what action it should take under this Section 2.7, the Agent shall be
entitled to retain any funds or Collateral in its possession until the Agent
shall have received (i) a final non-appealable order of a court of competent
jurisdiction directing delivery of such funds or Collateral, (ii) a final
decision of the Arbiter, or (iii) Lenders Instructions directing delivery of
such funds or Collateral, in which event the Agent shall disburse such funds or
Collateral in accordance with such Lenders Instructions. Any court order shall
be accompanied by a legal opinion by counsel for the presenting party
satisfactory to the Agent to the effect that said order is final and
non-appealable. The Agent shall act on such court order and legal opinions, or
on the decision of the Arbiter, without further question.
SECTION 2.8. REIMBURSEMENT OF EXPENSES. Borrower shall, and to
the extent that Borrower does not the Lenders, jointly and severally, shall
reimburse the Agent, promptly upon presentation of reasonable supporting
documentation therefor, for all direct and indirect costs, expenses and
disbursements actually incurred or paid by the Agent in performing its
obligations hereunder.
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<PAGE> 12
ARTICLE III
ACKNOWLEDGEMENTS, REPRESENTATIONS
AND WARRANTIES OF LENDERS
SECTION 3.1. ACTIONS AFFECTING THE COLLATERAL. Each Lender hereby
acknowledges and agrees that:
(a) it shall have no right to take or initiate direct
action (including, without limitation, enforcement actions following the
occurrence of an Event of Default) respecting or against the Borrower or the
Collateral, or any portion thereof, unless the Agent has expressly delegated
such authority to such Lender, in writing (and the Agent has been authorized to
take such action under the terms of this Agreement), or unless such action has
been expressly authorized by Lenders Instructions; provided, however, that this
provision shall not be deemed to prohibit either Lender from making any cash
bid at any foreclosure sale to the same extent, in the same manner and with the
same effect as any party who is not a Lender may do so;
(b) notwithstanding the generality of Section 3.1(a), it
shall not, without the prior written consent of the other Lender, take any
action, give any instructions, give its consent, make any request, require any
action or otherwise take any action or exercise any right or power under or in
respect of the Debenture to which it is a party;
(c) it shall have no right, on its own behalf without the
prior written consent of the other Lender, to waive any Event of Default or any
performance by the Borrower the nonperformance of which could constitute an
Event of Default;
(d) as of the date hereof, neither it nor any of its
Affiliates has any Lien, or any outstanding claims or rights that could result
in a future Lien, against the Borrower or any of its assets, other than Liens
created pursuant to the Loan Documents or the Debentures;
(e) it shall notify the Agent and the other Lender
immediately after such Lender becomes aware of the occurrence of any Event of
Default or of any event which, upon notice or lapse of time or both, would
constitute an Event of Default;
(f) it shall be bound in all respects by any and all
actions taken by the Agent pursuant to this Agreement in respect of the
Collateral or any portion thereof so long as such actions are permitted or
required by this Agreement or directed by the Lenders pursuant to Lenders
Instructions, in accordance with the terms hereof;
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<PAGE> 13
(g) its Liens on the Collateral, whether imposed pursuant
to the Loan Documents and the Debentures or otherwise and notwithstanding the
order of perfection thereof, rank pari passu and equal in right of payment with
the Liens of the other Lender; and
(h) without prejudice to Section 3.1(b), each of the
Lenders hereby agrees that it shall not, without prior written consent of the
other Lender, register or send any notice to register its rights under or in
respect of the Debenture to which it is a party against any leasehold or
freehold land at HM Land Registry in the United Kingdom.
SECTION 3.2. AUTHORITY. Each Lender and the Agent hereby represents
and warrants to all other parties hereto that:
(a) the execution, delivery and performance by it of this
Agreement has been duly authorized by all necessary corporate action, will not
violate any provision of law, governmental regulation, or any agreement or
instrument to which it is a party or by which it is bound, and requires no
governmental or other consent; and
(b) this Agreement is valid, binding and enforceable
against it in accordance with its terms, except as enforceability may be
limited by (i) reorganization, insolvency, liquidation, readjustment of debt,
moratorium or other similar laws affecting the enforcement of the rights of
creditors generally, as such laws may be applied in the event of a
reorganization, insolvency, liquidation, readjustment of debt or moratorium or
similar proceeding applicable to financing institutions generally, and (ii) the
availability of equitable remedies including specific performance to persons
seeking to enforce this Agreement against the Lenders or the Agent.
ARTICLE IV
INDEMNIFICATION; SUCCESSOR AGENT
SECTION 4.1. LIMITATION ON LIABILITY. Neither the Agent nor any
of the Agent's directors, officers, shareholders, partners, employees, agents,
advisors or representatives (collectively, the "Agent Representatives") shall
be liable for any action taken or omitted (whether or not such action taken or
omitted is within or without the Agent's responsibilities and duties expressly
set forth in this Agreement) under or in connection with this Agreement, except
for gross negligence or willful misconduct of the Agent. Any action taken or
omitted by Agent pursuant to and in substantial compliance with the directions
of any Lenders Instructions or the decision of a court or the Arbiter pursuant
to Section 2.3(b) shall be deemed, for purposes of this Agreement, not to
constitute gross negligence or willful misconduct on the part of the Agent.
SECTION 4.2. INDEMNIFICATION. Borrower shall, and to the extent
that Borrower
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<PAGE> 14
does not the Lenders, jointly and severally, shall indemnify and save harmless
the Agent and any of the Agent Representatives from and against any and all
losses, obligations, penalties, actions, judgments and suits and other costs,
expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent or any of the Agent
Representatives (including without limitation any interpleader action filed by
the Agent pursuant to Section 2.3(b)), other than as a consequence of actual
gross negligence or willful misconduct on the part of the Agent, arising out of
or in connection with this Agreement, including without limitation the costs,
expenses and disbursements in connection with defending itself against any
claim or liability, or answering any subpoena, related to the exercise or
performance of any of its powers or duties under this Agreement or the taking
or refraining from taking of any action under or in connection with this
Agreement.
SECTION 4.3. SUCCESSOR AGENT. The Agent may resign at any time by
giving 30 days' written notice thereof to the Lenders. Upon any such
resignation, the Lenders shall have the right to jointly appoint a successor
Agent. If no successor Agent shall have been appointed by the Lenders and
accepted such appointment within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, but shall not be required
to, appoint a successor Agent on behalf of the Lenders.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. PAYMENTS BY BORROWER. Borrower shall not make any
payment in respect of the Obligations to either Lender without simultaneously
making a payment in the same amount to the other Lender. Upon and following
receipt of notification by the Agent of an Event of Default, Borrower shall
make all payments in respect of the Obligations solely to the Agent, which in
turn shall disburse such amounts to the Lenders in accordance with the
provisions of this Agreement.
SECTION 5.2. COLLECTIONS HELD IN TRUST.
(a) If either Lender receives any amount hereunder or
under the Loan Documents or the Debentures (whether by voluntary payment, by
realization upon security, by the exercise of a Lien, by counterclaim or cross
action, by the enforcement of any right under the Debentures, or otherwise)
which is applicable to the payment of the Obligations and which, with respect
to the related sum or sums received by the other Lender, is a greater amount
than such Lender's pro rata portion (based on such Lender's Proportionate
Share) of related amounts then due to the other Lender immediately prior to
such receipt, then the Lender receiving such disproportionate payment shall
promptly notify the Agent of such disproportionate payment and shall remit to
the Agent such amount as shall result in each Lender receiving its pro rata
portion (based on each
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<PAGE> 15
Lender's Proportionate Share) of all such amounts. As soon as practicable
following receipt, the Agent shall disburse any such amounts to the
non-remitting Lender.
(b) Any and all amounts actually received by the Agent in
connection with the enforcement of this Agreement, the Loan Documents or the
Debentures shall be disbursed as soon as practicable by the Agent and, until so
disbursed, shall be deemed held in trust by the Agent for the party or parties
entitled thereto.
SECTION 5.3. REMEDIES CUMULATIVE. No right or remedy conferred upon
or reserved to any party hereto is intended to be exclusive and every such
right and remedy shall be cumulative and in addition to every other right or
remedy given hereunder or under the Loan Documents or Debentures or now or
hereafter existing under any applicable law. Every right and remedy given by
this Agreement, the Loan Documents, the Debentures or by applicable law to the
Agent or either Lender may be exercised from time to time and as often as may
be deemed expedient by the Lenders, jointly, or the Agent on behalf of the
Lenders.
SECTION 5.4. MARSHALING: PAYMENTS SET ASIDE. Neither the Agent nor
either Lender shall be under any obligation to marshall any assets in favor of
the Borrower, its Affiliates or any other Person or against or in payment of
all or any portion of the Obligations, except as may be expressly provided
herein. To the extent that the Borrower makes a payment or payments to the
Agent or either Lender, or any such party receives payment from the proceeds of
the Collateral, and such payment or payments or the proceeds of such
enforcement or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or other Person, including without limitation the Borrower, under any
bankruptcy law, state or federal law, common law or equitable cause, then to
the extent of such recovery, the Obligations originally intended to be
satisfied, and all Liens, right and remedies therefor, shall be reinstated and
continued in full force and effect as if such payment had not been made or such
enforcement had not occurred.
SECTION 5.5. OTHER INDEBTEDNESS. Borrower hereby acknowledges to each
Lender, and each Lender hereby acknowledges to the other Lender, that Borrower
owes no indebtedness of any kind to either Lender, other than the indebtedness
of Borrower evidenced by the Loan Documents.
SECTION 5.6. PRESERVATION OF RIGHTS. No delay or omission of the
Lenders or the Agent to exercise any right under this Agreement, the Loan
Documents or the Debentures shall impair such right or be construed to be a
waiver of any Event of Default or any acquiescence therein. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of this Agreement, the Loan
Documents or the Debentures whatsoever shall be valid unless in writing signed
by both Lenders, and then only to the extent specifically set forth in such
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<PAGE> 16
writing. All remedies contained in this Agreement, the Loan Documents or the
Debentures or by law afforded shall be cumulative and all shall be available to
the Agent and the Lenders until payment in full of the Obligations.
SECTION 5.7. PAYMENT OF CHARGE. The Agent shall have the right (but
shall not be obligated), upon receipt of Lenders Instructions, to pay on behalf
of the Borrower, those expenditures (including, without limitation, the payment
of taxes, insurance premiums and other charges of any governmental authority)
that the Borrower is obligated to pay pursuant to the provisions of this
Agreement, the Loan Documents or the Debentures but has failed to so pay, which
such failure has given rise to an Event of Default. Borrower hereby
irrevocably authorizes the Agent to make such expenditures (in the Agent's sole
discretion) following and during the continuation of such Event of Default.
Borrower shall, and to the extent that Borrower does not the Lenders, jointly
and severally, shall reimburse the Agent upon request for all expenditures of
Borrower actually paid by the Agent under this Section 5.5.
SECTION 5.8. AMENDMENTS, ETC. No amendment, waiver, modification,
supplementation or termination of any term or provision of this Agreement nor
any consent to any departure therefrom by any party hereto shall in any event
be effective unless the same shall be in writing and signed by all parties
hereto and then (if in respect of a waiver or consent) only in the specific
instance and for the specific purpose for which given.
SECTION 5.9. ADDRESSES FOR NOTICES, ETC. All notices, requests,
demands, directions and other communications provided for hereunder shall be in
writing unless otherwise explicitly provided in this Agreement and shall be
deemed to have been given and received (a) when sent, if by telegram, telex,
facsimile transmission or personal delivery (if, in the case of facsimile
transmissions, with written confirmation of receipt), (b) on the third business
day after sending, if sent by reputable international courier or expedited
service, (c) seven days after being mailed by registered or certified
international or air mail, and addressed to either Lender or Borrower at the
address shown below its signature hereto, or at such other address as it may,
by written notice received by other parties to this Agreement, have designated
as its address for such purpose.
SECTION 5.10. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION 5.11. GOVERNING LAW. This Agreement shall be a contract
made under and governed by the internal laws of the State of Delaware, without
regard to conflict of laws principles.
SECTION 5.12. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be
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<PAGE> 17
ineffective to the extent of such prohibition or enforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 5.13. HEADINGS. Article and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 5.14. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in counterparts and by the different parties on separate counterparts
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
SECTION 5.15. COMPLETE AGREEMENT. This Agreement, the Loan
Documents, the Debentures and the other documents and agreements expressly
referred to herein and therein, collectively embody the complete agreement and
understanding among the parties hereto and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
SECTION 5.16. ASSIGNMENTS. This Agreement is personal to the
parties hereto and the rights and duties of any party hereunder shall not be
assignable except with the prior written consent of the other parties hereto.
SECTION 5.17. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, express or implied, is intended to or shall confer any rights,
remedies, obligations or liabilities, legal or equitable on any person or
entity other than the parties hereto and their respective successors and
assigns.
SECTION 5.18. JURISDICTION; SERVICE OF PROCESS. All parties hereby
submit to the nonexclusive jurisdiction of the federal or state courts sitting
in Wilmington, Delaware for all purposes of or in connection with this
Agreement; provided that nothing in this Agreement shall affect the Agent's
right to bring any action or proceeding against either or both Lenders in the
courts of any other jurisdiction. Each party hereto hereby consents to process
being served in any suit, action or proceeding of the nature referred to above
either (a) by the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to its address shown below its
signature hereto or (b) by serving a copy thereof upon such party's authorized
agent for service of process (to the extent permitted by applicable law,
regardless whether the appointment of such agent for service of process for any
reason shall prove to be ineffective or such agent for service of process shall
accept or acknowledge such service); provided that, to the extent lawful and
practicable, written notice of said service upon said agent shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, to the
applicable party at its address shown below its signature hereto. Each
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<PAGE> 18
party hereto agrees that service made in accordance with this Section 5.18, to
the fullest extent permitted by law, (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall be taken and held to be valid personal service upon and personal
delivery to it. Nothing herein shall affect any party's right to serve process
in any other manner permitted by law, or limit the Agent's right to bring
proceedings against either or both Lenders in the courts of any other
jurisdiction.
EACH OF TICKETMASTER AND VJN HEREBY IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE LOAN DOCUMENTS, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR (II) ARISING FROM
ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT OR
THE LOAN DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 5.19. ATTORNEY'S FEES. If any legal action, including an
action for declaratory relief, is brought to enforce any provision of this
Agreement, the prevailing party or parties, as the case may be, shall be
entitled to recover his, its or their respective reasonable attorneys' fees and
court costs from the nonprevailing party or parties, as the case may be. These
fees, which may be set by the court in the same action or in a separate action
brought for that purpose, are in addition to any other relief to which any
prevailing party may be entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
VIDEO JUKEBOX NETWORK INTERNATIONAL,
LIMITED, a company incorporated
under the laws of England and Wales
By: /s/ Vincent Monsey
--------------------------------------
Name: Vincent Monsey
Title: Managing Director
Imperial House
11-13 Young Street
Kensington, London W8 5EH
Attention: Managing Director
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<PAGE> 19
TM/VIDEO INTERNATIONAL, INC., a
Delaware corporation
By: /s/ Norman J. Gantz
-------------------------------------
Name: Norman J. Gantz
Title: Secretary
3701 Wilshire Blvd.
Suite 700
Los Angeles, California 90010
Attention: President and Chief Financial
Officer
VIDEO JUKEBOX NETWORK, INC., a Florida
corporation
By: /s/ Alan McGlade
-------------------------------------
Name: Alan McGlade
Title: President
1221 Collins Avenue
Miami Beach, Florida 33139
Attention: Chief Financial Officer
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<PAGE> 20
Atlantic American Capital Corp., a Florida
corporation
By: /s/ David Burns
-------------------------------------
Name: David Burns
Title: Secretary
Address:
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<PAGE> 1
8-K
EXHIBIT 99.9
<PAGE> 2
================================================================================
STOCK PURCHASE AGREEMENT
BETWEEN
VIDEO JUKEBOX NETWORK, INC.,
AS SELLER,
AND
TM NO. 2 LIMITED,
AS BUYER
================================================================================
JUNE 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
PURCHASE AND SALE
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO VJN
3.1 Organization, Qualification, Etc. of VJN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Title to the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Authority of VJN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Indebtedness of VJNIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO VJNIL
4.1 Organization, Qualification, Etc. of VJNIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Capitalization of VJNIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Authority of VJNIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.9 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.10 Acquired Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 Conduct of Business in the Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.12 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
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4.13 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.15 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.16 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.17 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.18 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.19 ITC License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.21 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TICKETMASTER
5.1 Organization, Qualification, Etc. of Ticketmaster . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Authority of Ticketmaster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.6 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.7 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 ITC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.10 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI
CONCURRENT TRANSACTIONS; DELIVERIES; CONDITIONS
6.1 Concurrent Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Deliveries by Ticketmaster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.3 Deliveries by VJN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Conditions Precedent to the Parties' Obligations to Close . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VII
INDEMNIFICATION
7.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Ticketmaster's Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3 VJN's Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Procedure for Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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ARTICLE VIII
CONFIDENTIALITY
8.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 Permitted Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IX
GENERAL PROVISIONS
9.1 Provision of Jukeboxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.3 Stamp Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.5 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.8 RTPA Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.11 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.13 Jurisdiction; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.15 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.16 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
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<PAGE> 6
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of June 30, 1995,
between VIDEO JUKEBOX NETWORK, INC., a Florida corporation ("VJN"), TM NO. 2
LIMITED (registration number 3005851), a company incorporated under the laws of
England and Wales ("Ticketmaster"), and VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED (registration number 264552), a company incorporated under the laws of
England and Wales ("VJNIL"), which has executed this Agreement solely with
respect to the provisions of Article VIII and Article IX.
W I T N E S S E T H :
WHEREAS, VJNIL is a subsidiary of VJN and operates or intends to
operate a viewer interactive television service in the United Kingdom and the
Republic of Ireland known as "THE BOX";
WHEREAS, VJN is or will be, after fulfillment of the transaction
listed in Section 6.01(a), the beneficial owner of 602 Ordinary Shares of
VJNIL;
WHEREAS, Ticketmaster desires to purchase from VJN, and VJN desires to
sell to Ticketmaster, 246 Ordinary Shares (the "Shares") for an aggregate
purchase price of $2,225,000 (U.S.) (the "Purchase Price"); and
WHEREAS, the parties hereto desire to set forth herein their
agreements and understandings with respect to the subject matter hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants hereinafter set forth and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
Ticketmaster and VJN hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any other
Person (other than VJNIL) that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such specified Person; provided, however, that an Affiliate shall not include a
Competitor. "Control" (including the terms "controlling," "controlled by" and
"under common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or
<PAGE> 7
indirectly or as trustee or executor, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"Assets" has the meaning specified in Section 4.16.
"Bankruptcy" means (a) an adjudication of bankruptcy under the U.S.
Bankruptcy Reform Act of 1978, as amended, or any successor statute, (b) the
specified Person stops payment of, is deemed unable (under Section 123 of the
Insolvency Act of 1986 of the U.K. (the "Insolvency Act")) or otherwise admits
inability to pay its debts or becomes or is deemed to be insolvent, (c) the
making of a winding up or administration order in respect of the specified
Person, (d) an assignment for the benefit of creditors, (e) the specified
Person either does, resolves to do or commences negotiations with a view to
doing any of the following: (i) makes a general or special arrangement or
composition (whether voluntary or compulsory) with its creditors or any class
of creditors, (ii) declares or agrees to a moratorium, (iii) issues a notice
convening a meeting to resolve to do any of the foregoing (other than for the
purpose of a solvent amalgamation or reconstruction), or (iv) makes a proposal
for a voluntary arrangement under Section 1 of the Insolvency Act to be made in
respect of the specified Person, (f) the filing of a voluntary petition in
bankruptcy or reorganization or the passing of a resolution for voluntary
liquidation, reconstruction or winding up (other than for the purpose of a
solvent amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, provisional liquidator or administrative
receiver for any part or all of the assets or property of a party within 60
days from the date of such appointment.
"Business" means the television, cable and similar programming and
broadcasting services (interactive or non-interactive), marketing, advertising,
sales, concert and related music promotions, merchandising and home shopping
projects and all other promotions and ventures in which VJNIL is engaged in
England, Wales, Scotland and Northern Ireland as of the date hereof, and in
which VJNIL intends to be engaged in the Republic of Ireland (the "Territory"),
and any similar or related activities in which VJNIL may become engaged.
"Business Day" means any day that is not a Saturday or a Sunday and on
which banks are open for the conduct of normal banking business in all of the
cities of Los Angeles, California, Miami, Florida and London, England.
"Competitor" means an entity operating or controlling either video
music services for use on television broadcast or cable channels featuring such
services existing as of the date hereof or subsequently formed services with
programming that is substantially similar in format and/or content to VJNIL's
programming; provided, however, that Time Warner and its Affiliates shall not
be considered Competitors for purposes of this
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definition.
"Concurrent Transactions" means the collective reference to the
transactions contemplated by this Agreement, the transactions contemplated by
the Exhibits hereto and the transactions described or referred to in Article VI
hereof.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and Tax liens), charge,
encumbrance, adverse claim, option, preferential arrangement or restriction of
any kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
"GAAP" means United Kingdom generally accepted accounting principles
and practices as in effect during the relevant period and applied consistently
throughout the periods involved.
"Governmental Authority" means any federal, state or local, or foreign
government, governmental, regulatory or administrative authority (or
subdivision thereof) and any agency or commission or any court, tribunal or
judicial or arbitral body that has jurisdiction over the Business, VJNIL or its
Assets, including, without limitation, the United States, the United Kingdom
and the Republic of Ireland.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Intellectual Property" means (a) inventions, whether or not
patentable, whether or not reduced to practice, and whether or not yet made the
subject of a pending patent application or applications, (b) ideas and
conceptions of potentially patentable subject matter, including, without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent application or
applications, (c) national (including the United States) and multinational
statutory invention registrations, patents, patent registrations and patent
applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and all rights therein
provided by international treaties or conventions and all improvements to the
inventions disclosed in each such registration, patent or application, (d)
trademarks, service marks, trade dress, logos, trade names and corporate and
partnership names, whether or not registered, including all common law rights,
and registrations and applications for registration thereof, including, but not
limited to, all marks registered in trademark offices throughout the world, and
all rights therein provided by international treaties or conventions, (e)
copyrights (registered or otherwise) and registrations and applications for
registration thereof, and all rights therein provided by international treaties
or conventions, (f) moral rights (including, without limitation, rights of
paternity and integrity), and waivers of such rights by others, (g) computer
software, including, without limitation, operating systems and specifications,
data, data
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<PAGE> 9
bases, files, documentation and other materials related thereto, (h) trade
secrets and confidential, technical and business information (including ideas,
flow charts, logic diagrams, formulas, compositions, patterns, devices,
methods, techniques, processes, inventions, and conceptions of inventions
whether patentable or unpatentable and whether or not reduced to practice), (i)
whether or not confidential, technology (including know-how and show-how),
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable works, financial, marketing and business data, selling,
pricing and cost information or procedures, business and marketing plans and
customer and supplier lists and information, (j) copies and tangible
embodiments of all the foregoing, in whatever form or medium, (k) all rights to
obtain and rights to apply for patents, and to register trademarks and
copyrights, (l) all rights to sue or recover and retain damages and costs and
attorneys' fees for present and past infringement of any of the foregoing, and
(m) all goodwill associated with the foregoing.
"Knowledge of Ticketmaster" or "to Ticketmaster's knowledge" and
similar references mean the knowledge of the officers, directors and key
employees of Ticketmaster after due inquiry.
"Knowledge of VJN" or "to VJN's knowledge" and similar references mean
the knowledge of the officers, directors and key employees of VJN after due
inquiry.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law
issued by any Governmental Authority.
"Material Adverse Effect" means any circumstance, change in, or effect
on the business of any party hereto (including, without limitation, in the case
of VJNIL, the Business) that: (a) is, or could reasonably be expected to be,
materially adverse to the business, operations, assets or liabilities, results
of operations or the financial condition of such party, or (b) could reasonably
be expected to adversely affect the ability of such party to operate or conduct
its business in the manner in which it is currently, or is currently
anticipated to be, operated or conducted.
"Person" means any individual, partnership, firm, corporation, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
"Receivables" means any and all accounts, notes and other receivables
of VJNIL from third parties, including, without limitation, customers, arising
from the conduct of the Business or otherwise before the date hereof, whether
or not in the ordinary course, together with all unpaid financing charges
accrued thereon.
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"Relevant Accounting Standard" means any applicable SSAP, Financial
Reporting Standard, or Consensus or Statement of Recommended Practice issued by
the Accounting Standards Board in England and Wales, or any committee thereof
or body recognized thereby, in force as of the date hereof.
"SSAP" means the United Kingdom Statement of Standard Accounting
Practices.
"Stockholders Agreement" means that certain Stockholders Agreement to
be dated the Closing Date among Ticketmaster, VJN and VJNIL, substantially in
the form attached hereto as Exhibit A.
"Tangible Personal Property" means machinery, equipment, tools,
supplies, furniture, fixtures, personalty, vehicles, rolling stock and other
tangible personal property used in the Business or owned or leased by VJNIL.
"Tax" or "Taxes" means any and all taxes, stamp duties, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation, or net worth; taxes or other charges
in the nature of excise, withholding, ad valorem, stamp, transfer, value added,
or gains taxes; license, registration and documentation fees; and customs
duties, tariffs, and similar charges.
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 Closing. The closing of the purchase and sale of the
Shares and the Concurrent Transactions (as defined in Section 6.01) (the
"Closing") shall take place at the offices of Neal Gerber & Eisenberg, Two N.
LaSalle Street, Suite 2200, Chicago, Illinois 60602 at 10:00 a.m., local time,
on Friday, June 30, 1995, or (if later) within five Business Days after the
satisfaction or written waiver by the appropriate party(ies) of the conditions
set forth in Article VI (the "Closing Date").
SECTION 2.2 Purchase and Sale. Subject to fulfillment of the
conditions precedent, and based upon the representations and warranties, set
forth herein, at Closing Ticketmaster shall purchase from VJN, and VJN shall
sell to Ticketmaster, the Shares free and clear of any and all Encumbrances
(other than those imposed by the Stockholders Agreement). In consideration of
and in full payment for the Shares, Ticketmaster, at Closing, shall pay to VJN,
by wire transfer of immediately available funds, the Purchase Price.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO VJN
As an inducement to Ticketmaster to enter into this Agreement, VJN
hereby represents and warrants to Ticketmaster as follows:
SECTION 3.1 Organization, Qualification, Etc. of VJN. VJN is a
duly organized and validly existing corporation under the Laws of the State of
Florida and has all necessary corporate power and authority to own, operate or
lease the properties and assets now owned, operated or leased by it and to
carry on its business as it has been, is currently and is anticipated to be
conducted.
SECTION 3.2 Title to the Shares. VJN (a) has, and on the Closing
Date (and after the transaction referred to in Section 6.01(a) has been
effected) will have, good and marketable title to and beneficial ownership of
the Shares to be sold by VJN to Ticketmaster hereunder and, immediately prior
to such sale to Ticketmaster, will have beneficial ownership of all outstanding
shares in VJNIL, (b) has, and on the Closing Date will have, prepaid all
transfer taxes of any kind (other than stamp duties) applicable to the transfer
of the Shares to Ticketmaster, (c) has full right, power and authority to sell,
assign, transfer and deliver the Shares hereunder, free and clear of any
Encumbrance other than those imposed by the Stockholders Agreement.
SECTION 3.3 Authority of VJN. VJN has all necessary corporate
power and authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by VJN, the performance by VJN of its
obligations hereunder and the consummation by VJN of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of VJN. This Agreement has been duly executed and delivered by VJN
and (assuming due authorization, execution and delivery by Ticketmaster)
constitutes the legal, valid and binding obligation of VJN, enforceable against
VJN in accordance with its terms, except as such enforcement may be subject to
(a) Bankruptcy or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
SECTION 3.4 No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 3.05 have been obtained
and all filings and notifications listed on Schedule 3.04 have been made, the
execution, delivery and performance of this Agreement by VJN and the
consummation of the transactions contemplated hereby do not and will not (a)
violate, conflict with or result in the breach of any provision of VJN's Third
Amended and Restated Articles of Incorporation (the "Articles of
Incorporation") or By-laws, (b) conflict with or violate any Law or
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<PAGE> 12
Governmental Order applicable to VJN, which violation or conflict would,
individually or in the aggregate, have a Material Adverse Effect on VJN, the
Business or on the transactions contemplated hereby (including the Concurrent
Transactions), or (c) except as set forth on Schedule 3.04, conflict with,
result in any breach of, constitute a default (or an event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result
in the creation of any Encumbrance on any of the assets or properties of VJN or
the Business pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument,
agreement or arrangement to which VJN is a party or by which any of such assets
or properties is bound or affected which conflict or violation would,
individually or in the aggregate, have a Material Adverse Effect on the ability
of VJN to consummate the transactions contemplated hereby or on the Business.
SECTION 3.5 Consents and Approvals. Except as set forth on
Schedule 3.05, the execution, delivery and performance of this Agreement by VJN
do not and will not require any consent, approval, authorization or other order
of, action by, filing with or notification to any Governmental Authority or any
third party.
SECTION 3.6 Litigation. Except as set forth on Schedule 3.06
(which, with respect to each action disclosed therein, sets forth: the
parties, nature of the proceeding, date and method commenced, amount of damages
or other relief sought and, if applicable, paid or granted), there are no
claims or proceedings by or against VJN (or, to VJN's knowledge, any of its
directors, officers, employees or agents) pending or, to the knowledge of VJN,
threatened and which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect or could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby, including without limitation the
Concurrent Transactions.
SECTION 3.7 Indebtedness of VJNIL. VJNIL is not obligated to
VJN, directly or indirectly, other than for the indebtedness described in
Section 6.01(e).
SECTION 3.8 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Concurrent
Transactions based upon arrangements made by or on behalf of VJN except an
aggregate amount of $100,000 payable by VJN to Communications Equity
Associates, Inc., which $100,000 shall be paid at the Closing solely by VJN.
SECTION 3.9 Full Disclosure. No representation or warranty of
VJN contained in this Agreement and no written statement contained in any
financial or operating data or certificate furnished or to be furnished to
Ticketmaster pursuant to this Agreement,
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or in connection with the transactions contemplated by this Agreement
(including the Concurrent Transactions), contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO VJNIL
As an inducement to Ticketmaster to enter into this Agreement, VJN
hereby represents and warrants to Ticketmaster as follows:
SECTION 4.1 Organization, Qualification, Etc. of VJNIL. VJNIL is
a duly registered, incorporated and validly existing corporation under the Laws
of England and Wales and has all necessary corporate power and authority to
own, operate or lease the properties and assets now owned, operated or leased
by it and to carry on its business as it has been, is currently and is
currently anticipated to be conducted. VJNIL is duly licensed or qualified to
do business and is in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing does not have, or could not reasonably
be expected to have, a Material Adverse Effect. All material corporate actions
taken by VJNIL have been duly authorized and VJNIL has not taken any action
that in any respect conflicts with, constitutes a default under or results in a
violation of any provision of its Memorandum of Association and Articles of
Association (collectively, the "Articles of Association"). True and correct
copies of VJNIL's (a) Articles of Association, as amended and restated through
the date hereof and (b) resolutions of the members and of the Board of
Directors adopted prior to the date hereof heretofore have been delivered to
Ticketmaster and all of such resolutions remain in full force and effect in the
form delivered to Ticketmaster.
SECTION 4.2 Capitalization of VJNIL. Schedule 4.02 accurately
(a) sets forth, as of the time immediately after consummation of the
transaction set forth in Section 6.01(a), the names of the holders of all of
the outstanding capital stock of VJNIL and the number of shares owned by each
such stockholder and (b) describes any preferences in distributions to which
each such stockholder is entitled. There are now and, as of the time
immediately after consummation of the transaction set forth in Section 6.01(a),
will be no preemptive rights with respect to any capital stock of VJNIL and,
except as set forth on Schedule 4.02, there are now and, as of the time
immediately after consummation of the transaction set forth in Section 6.01(a),
will be no outstanding options, subscriptions, warrants, calls, contracts,
convertible securities, or other rights, agreements, arrangements or
commitments of any character under which VJNIL is or may become obligated to
issue, assign or transfer any shares of capital stock of VJNIL or purchase,
redeem or otherwise acquire any outstanding shares of capital stock of
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VJNIL. Each outstanding share of capital stock of VJNIL has been duly and
validly authorized and issued and is fully paid and owned, beneficially and of
record, by the stockholder(s) listed on Schedule 4.02. Neither VJNIL nor VJN
has and, to VJN's knowledge, no other stockholder listed on Schedule 4.02 has,
granted any option or other right to purchase any capital stock of VJNIL or any
interest therein from any such stockholder, except as set forth in the Monsey
Stock Purchase Agreement (as defined in Section 6.01).
SECTION 4.3 Authority of VJNIL. VJNIL has all necessary
corporate power and authority to enter into all of the agreements to which it
is a party that are necessary to effect the Concurrent Transactions
(collectively, the "Additional Agreements"), to carry out its obligations
thereunder and to consummate the transactions contemplated thereby. The
execution and delivery by VJNIL of each of the Additional Agreements, the
performance by VJNIL of its obligations thereunder and the consummation by
VJNIL of the transactions contemplated thereby have been duly authorized by all
requisite corporate action on the part of VJNIL. Each of the Additional
Agreements has been, or at Closing will be, duly executed and delivered by
VJNIL and (assuming due authorization, execution and delivery by the other
parties thereto) constitutes the legal, valid and binding obligation of VJNIL,
enforceable against VJNIL in accordance with its respective terms, except as
such enforcement may be subject to (a) Bankruptcy or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
SECTION 4.4 No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 4.05 have been obtained
and all filings and notifications listed on Schedule 4.04 have been made, the
execution, delivery and performance of each of the Additional Agreements by
VJNIL and the consummation of the transactions contemplated thereby are within
VJNIL's objects and powers and do not and will not (a) violate, conflict with
or result in the breach of any provision of VJNIL's Articles of Association,
(b) conflict with or violate any Law or Governmental Order applicable to VJNIL,
the Business or the Assets which violation or conflict could, individually or
in the aggregate, have a Material Adverse Effect on VJNIL, the Business or on
the transactions contemplated hereby (including the Concurrent Transactions),
or (c) except as set forth on Schedule 4.04, conflict with, result in any
breach of, constitute a default (or an event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on any of its Assets pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument, agreement or arrangement to which VJNIL is a party or by
which any of such assets or properties is bound or affected which conflict or
violation could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect on VJNIL or the Business.
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SECTION 4.5 Consents and Approvals. Except as set forth on
Schedule 4.05, the execution, delivery and performance of each of the
Additional Agreements by VJNIL does not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority or any third party.
SECTION 4.6 Litigation. Except as set forth on Schedule 4.06
(which, with respect to each action disclosed therein, sets forth: the
parties, nature of the proceeding, date and method commenced, amount of damages
or other relief sought and, if applicable, paid or granted), there are no
actions, disputes or claims (other than proceedings filed but not yet served on
VJNIL) being brought or, to VJN's knowledge, threatened by or against VJNIL
(or, to the knowledge of VJN, any of VJNIL's directors, officers, employees or
agents), or affecting any of the Assets, pending (or, as to the knowledge of
VJN, to the knowledge of VJN, threatened) and which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect. None of the
matters disclosed on Schedule 4.06 could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby, including without limitation the
Concurrent Transactions. Except as set forth on Schedule 4.06, none of VJNIL
nor any of the Assets is subject to any Law or Governmental Order (nor, to the
knowledge of VJN, are there any such Governmental Orders threatened to be
imposed by any Governmental Authority) which has had or could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.7 Financial Information.
(a) All balance sheets, profit and loss accounts and all
other financial information of VJNIL which have been or hereafter shall be
furnished by or on behalf of VJNIL to Ticketmaster for the purposes of or in
connection with this Agreement or any transaction contemplated hereby,
including (i) the audited balance sheet as of December 31, 1994 and the related
audited profit and loss account for the fiscal year then ended, together with
all notes and schedules thereto (the "Year End Financial Statements") and (ii)
the unaudited balance sheet of VJNIL at April 30, 1995 and the related
unaudited profit and loss account and statement of cash flows of VJNIL (the
"Interim Financial Statements") have been prepared in accordance with GAAP, all
applicable Relevant Accounting Standards and the Companies Act 1985,
consistently applied throughout the periods involved (except as disclosed
therein) and give a true and fair view of the state of affairs of VJNIL as at
the dates therefor and the results of their operations for the periods then
ended, subject to year-end adjustments consisting only of normal recurring
accruals. On the Closing Date, VJNIL will not have any liabilities, greater
than L.100,000 individually or in the aggregate, whether prospective,
contingent or otherwise, including for Taxes, long-term leases or unusual
forward or long-term commitments, which are not fully provided for in the
Interim Financial Statements, whether or not required to be so fully provided
for as of the date thereof, except for those liabilities incurred since the
date thereof in the ordinary course of
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VJNIL's business or as described on Schedule 4.07 and those liabilities
reflected in the footnotes to the Year End Financial Statements.
(b) The annual operating budget of VJNIL for fiscal year
1995 (the "Budget"), that heretofore has been delivered to Ticketmaster, has
been prepared in light of the past operations of VJNIL. The Budget has been
prepared in good faith, on the basis of honestly held views of management of
VJN, using accounting principles and methods consistent with those used in
preparing the Year End Financial Statements, except that the Budget omits (A)
certain footnote disclosures and financial statement presentation items
required by GAAP, all Relevant Accounting Standards and/or the Companies Act
and (B) certain year end adjustments consisting only of normal recurring
accruals usually included in the preparation of year end financial statements.
The Budget is based on reasonable and realistic assumptions in light of current
economic conditions and VJN has no knowledge of any reason why VJNIL should not
be able to achieve the performance levels set forth in the Budget in light of
current economic conditions. Ticketmaster acknowledges that some of the
assumptions upon which the Budget has been based may not materialize.
(c) Since December 31, 1994, VJNIL has not paid or
declared any dividend or distribution with respect to its outstanding capital
stock.
SECTION 4.8 Books and Records. The books of account and other
financial records of VJNIL: (a) reflect all items of income and expense and
all assets and liabilities required to be reflected therein, except to the
extent that the omission to reflect such items could not, individually or in
the aggregate, have a Material Adverse Effect on the Business, (b) are complete
and correct, not misleading and do not contain or reflect any inaccuracies or
discrepancies, except as could not, individually or in the aggregate, have a
Material Adverse Effect on the Business, and (c) have been maintained in
accordance with good business and accounting practices.
SECTION 4.9 Receivables. Except to the extent, if any, provided
for on the balance sheet included in the Interim Financial Statements and
except as set forth on Schedule 4.09, all Receivables reflected on the balance
sheet included in the Interim Financial Statements arose from, and the
Receivables existing as of the Closing Date will have arisen from, the sale of
services to persons not Affiliated with VJNIL and in the ordinary course of its
business consistent with past practice and, except as provided against on the
balance sheet included in the Interim Financial Statements, constitute or will
constitute, as the case may be, only valid, undisputed claims of VJNIL not
subject to valid claims of set-off, off-set or other defenses or counterclaims.
The Interim Financial Statements make full provision for all doubtful debts and
all bad debts have been written off, except for doubtful debts and bad debts
that, individually or in the aggregate, would not have a Material Adverse
Effect on VJNIL or the Business.
SECTION 4.10 Acquired Assets. Except as disclosed on Schedule
4.16, each
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Asset of VJNIL (including, without limitation, the benefit of any licenses,
leases or other agreements or arrangements) acquired since the date of the
Interim Financial Statements has been acquired for consideration and on terms
no less favorable to VJNIL than otherwise would have been available in a
comparable arms' length transaction on the date of such acquisition, except for
Assets with an aggregate acquisition cost of not more than L.25,000.
SECTION 4.11 Conduct of Business in the Ordinary Course. Since
the date of the Interim Financial Statements, and except as disclosed on
Schedule 4.11 or as otherwise specifically permitted hereby, VJNIL has
conducted business only in the ordinary course and consistent with past
practice.
SECTION 4.12 Compliance with Laws. Except as set forth on
Schedule 4.12, VJNIL has conducted and continues to conduct its business in all
material respects in accordance with all Laws and all Governmental Orders
entered by or with any Governmental Authorities, and VJNIL is in compliance
with all such Laws or Governmental Orders, except to the extent that the
failure to so conduct or comply therewith would not, in the aggregate, have a
Material Adverse Effect on VJNIL, the Business or on the transactions
contemplated hereby (including the Concurrent Transactions).
SECTION 4.13 Material Contracts.
(a) VJNIL has, or has caused to be, made available to
Ticketmaster for review and duplication, correct and complete copies (or in the
case of oral contracts, summaries thereof) of all of the following contracts
and agreements of VJNIL, together with all material contracts, agreements,
leases and subleases to which VJNIL is a party concerning the management or
operation of any real property and all material agreements relating to
Intellectual Property (such material contracts and agreements, listed on
Schedule 4.13(a), collectively, "Material Contracts"):
(i) each contract and agreement for the purchase
of inventory or personal property with any supplier or for the furnishing of
services to VJNIL, or otherwise related to the Business under the terms of
which VJNIL; (A) is reasonably anticipated to pay or otherwise give
consideration of more than L.5,000 in the aggregate over the remaining term of
such contract or (B) cannot cancel without penalty or further payment and
without more than 30 days' notice;
(ii) each contract and agreement for the sale of
inventory or other personal property or for the furnishing of services by VJNIL
which: (A) is reasonably anticipated to involve consideration of more than
L.5,000 in the aggregate during the fiscal year ending December 31, 1995 or in
any fiscal year thereafter, (B) is reasonably anticipated to involve
consideration of more than L.5,000 in the aggregate over the remaining term of
the contract or (C) cannot be cancelled by VJNIL without penalty or
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further payment and without more than 30 days' notice;
(iii) all broker, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion, market
research, marketing, consulting and advertising contracts and agreements to
which VJNIL is a party;
(iv) all management contracts and contracts with
independent contractors, consultants or other persons (including Affiliates)
(or similar arrangements) involving exclusive rights or requiring payments in
excess of L.5,000 individually to which VJNIL is a party and which are not
cancelable without penalty or further payment on 30 days' or less notice;
(v) all contracts and agreements relating to
indebtedness of VJNIL in excess of L.5,000 individually or L.5,000 in the
aggregate;
(vi) all contracts and agreements with any
Governmental Authority to which VJNIL is a party;
(vii) all contracts and agreements that limit or
purport to limit the ability of VJNIL to compete in any line of business, or
with any person, or in any geographic area or during any period of time;
(viii) all contracts and agreements between or among
VJNIL on the one hand and any Affiliate of VJNIL on the other hand;
(ix) all leases and subleases for tangible
personal property having a value in excess of L.5,000; for purposes of this
Agreement, the term "lease" shall include any and all leases, subleases,
sale/leaseback agreements or similar arrangements.
(x) all contracts relating to Intellectual
Property and all contracts relating to real property owned, leased or used by
VJNIL; and
(xi) all other contracts and agreements whether or
not made in the ordinary course of business, which are material to VJNIL or the
conduct of the Business.
(b) Except as disclosed on Schedule 4.13(b), each
Material Contract: (i) is valid and binding on the respective parties thereto
and is in full force and effect and (ii) upon consummation of the transactions
contemplated hereby shall continue in full force and effect without penalty or
other adverse consequence. VJNIL is not and, to VJN's knowledge, no other
party to any Material Contract is, in breach of or default under any Material
Contract, which breach or default would have a Material Adverse Effect on
VJNIL, and no Material Contract contravenes or is registrable under any of the
Trade Descriptions Acts, the Fair Trading Act 1973, the Restrictive Trade
Practices Act 1976 and 1977, the Resale Prices Act 1976 or the Competition Act
1980.
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<PAGE> 19
(c) There is no contract, agreement or other arrangement
granting any person any preferential right to purchase, other than in the
ordinary course of Business consistent with past practice, any of the
properties, assets or services of VJNIL.
(d) There is not now outstanding any guarantee or
agreement for indemnity or for suretyship either given by or for the benefit of
VJNIL.
SECTION 4.14 Intellectual Property.
(a) Ticketmaster heretofore has been provided a true and
complete list of all Intellectual Property which VJNIL owns or has the right to
use. VJNIL has full ownership thereof or the right to use all such rights, in
each case except to the extent heretofore disclosed in writing to Ticketmaster,
and neither VJN nor VJNIL has any knowledge that the conduct of the Business as
now operated, as of the date hereof, conflicts with, misappropriates or
infringes, or has been alleged to infringe, any Intellectual Property rights or
franchises of any person (including patents, trade secrets or other proprietary
rights of any third party). Ticketmaster heretofore has been provided with a
true and complete copy of every material license or other material agreement,
including all amendments thereto, pursuant to which VJNIL agreed to grant or
has granted rights with respect to the Intellectual Property, or pursuant to
which VJNIL enjoys rights in any Intellectual Property of any person. No
current or former consultant, employee or Affiliate of VJNIL or VJN or any of
their respective shareholders, officers or directors has any right, title or
interest in any of the Intellectual Property used and/or owned by VJNIL. VJNIL
heretofore has delivered to Ticketmaster true, complete and correct copies of
all material correspondence, memoranda and other written advice from VJNIL's
patent counsel or from any Governmental Authority, including without
limitation, the United States Patent and Trademark Office, the Independent
Television Commission, the U.K. Patent Office and Trademark Registry and the
European Patent Office describing or discussing the Intellectual Property or
the availability of patent protection for VJNIL's products, services and/or
business.
(b) Except to the extent described on Schedule 4.14(b)
attached hereto, to VJN's knowledge, none of the Intellectual Property owned by
or licensed to VJNIL is being infringed by any person.
(c) To VJN's knowledge, the Intellectual Property
heretofore disclosed in writing to Ticketmaster comprises all of the
Intellectual Property required to enable VJNIL to lawfully carry on the
Business as now conducted.
SECTION 4.15 Real Property. The particulars of the real property
set forth on Schedule 4.15 attached hereto (the "Real Property") are true and
correct in all respects and VJNIL has good and marketable title to the Real
Property free from Encumbrances and other adverse rights. The Real Property
comprises all the real property owned, used or occupied by VJNIL in connection
with the Business and VJNIL has never owned any
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<PAGE> 20
interest in any other real property other than the Real Property. There is no
violation of any Law (including, without limitation, any building, planning,
zoning law or environmental law) or any covenants, stipulations or conditions
relating to any of the Real Property and VJNIL is in peaceful and undisturbed
possession of each parcel of Real Property, except to the extent failure to be
in such possession could not have a Material Adverse Effect. There are no
contractual or legal restrictions that preclude or restrict in any material
manner the ability to use any of the Real Property in the manner in which they
are currently being used and the Real Property has all rights and easements
reasonably necessary for their use and enjoyment for the purposes of the
Business. VJNIL is not leasing or subleasing and has not leased or sublet any
parcel or any portion of any parcel of Real Property to any other Person, nor
has VJNIL assigned its interest under any lease or sublease for any leased Real
Property to any third party. There are no outstanding material disputes with
any Person relating to the Real Property or its use and no notices have been
given or received by VJNIL which would adversely affect the use and enjoyment
of the Real Property.
SECTION 4.16 Assets. VJNIL owns, leases or has the legal right to
use all the properties and assets used or intended to be used or required in
the conduct of the Business and which are material and, with respect to
contract rights, is a party to and enjoys the right to the benefits of all
material contracts and agreements used and/or intended to be used by VJNIL or
required in or relating to the conduct of the Business (such properties, assets
and contract rights collectively referred to as the "Assets"). VJNIL has good
title to or, in the case of leased or subleased Assets, valid and subsisting
leasehold interests in, all the Assets, free and clear of all Encumbrances,
except as disclosed on Schedule 4.16. All the Assets are in good operating
condition and repair, ordinary wear and tear excepted, and are suitable for the
purposes for which they are used and intended.
SECTION 4.17 Suppliers. Except as disclosed on Schedule 4.17,
VJNIL has not received any notice, nor is VJNIL aware, that any supplier will
not sell supplies and other goods or provide services to VJNIL at any time
after the date hereof on terms and conditions substantially similar to those
used in its current sales to VJNIL, subject only to general and customary price
increases.
SECTION 4.18 Taxes.
(a) Except as set forth on Schedule 4.18(a), (i) all
returns and reports in respect of all Taxes required to be filed with respect
to VJNIL or the Business have been timely filed; (ii) all Taxes required to be
shown on such returns and reports or otherwise due have been timely paid; (iii)
all such returns and reports are true, correct and complete; (iv) no adjustment
relating to such returns has been proposed by any tax authority and, to the
knowledge of VJN, no basis exists for any such adjustment; (v) there are no
pending or, to the knowledge of VJN, threatened actions or proceedings for the
assessment or collection of Taxes against VJNIL; (vi) there are no Encumbrances
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on any Assets; (vii) VJNIL has not been at any time a member of any partnership
or joint venture or the holder of a beneficial interest in any trust for any
period for which the statute of limitations for any Tax has not expired; and
(viii) all Taxes required to be withheld, collected or deposited by or with
respect to VJNIL or the Business have been timely withheld, collected or
deposited, as the case may be, and, to the extent required, have been paid to
the relevant taxing authority.
(b) Except as disclosed on Schedule 4.18(b), (i) there
are no outstanding waivers or agreements extending the statute of limitations
for any period with respect to any Tax to which VJNIL may be subject; (ii)
there are no proposed reassessments of any property owned by VJNIL or other
proposals that could increase the amount of any Tax to which VJNIL would be
subject; and (iii) no power of attorney that is currently in force has been
granted with respect to any matter relating to Taxes that could affect VJNIL.
(c) VJNIL has delivered to Ticketmaster correct and
complete copies of all federal, state and foreign income, franchise and similar
tax returns since January 1991, and correct and complete summaries of all
examination reports, and statements of deficiencies assessed against or agreed
to by VJNIL since January 1991.
(d) On the balance sheet included in the Interim
Financial Statements, reserves and allowances have been provided adequate to
satisfy all liabilities for Taxes relating to VJNIL for periods through the
date thereof.
SECTION 4.19 ITC License Agreement. The License to Provide a
Licensable Programme Service under Part I of the Broadcasting Act 1990 (License
No. LPS044) granted to VJNIL by the Independent Television Commission on
February 11, 1992, to come into force on February 14, 1992 (the "ITC License"),
is in full force and effect and has not been amended or modified from the copy
heretofore delivered to Ticketmaster. VJNIL is in full compliance in all
material respects with all conditions and provisions of the ITC License,
including without limitation all provisions relating to programmed standards
and record keeping requirements. VJNIL is not, and neither VJNIL nor VJN has
received any notice that VJNIL is, in default or breach under the ITC License
and no event has occurred and no condition or state of facts exists (other than
the transactions contemplated herein, including without limitation the
Concurrent Transactions, with respect to which VJN makes no representation)
that, with the passage of time or the giving of notice or both, could
constitute a default or breach under the ITC License. VJNIL, on a timely
basis, has made all payments and filings required under the ITC License.
Neither VJNIL nor VJN has received any notice that the Independent Television
Commission has revoked or intends to revoke the ITC License and, to the
knowledge of VJNIL and VJN, no action is threatened or in progress against
VJNIL with respect thereto.
SECTION 4.20 Full Disclosure. No representation or warranty with
respect to
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VJNIL contained in this Agreement and no written statement contained in any
financial or operating data or certificate furnished to Ticketmaster pursuant
to this Agreement, or in connection with the transactions contemplated by this
Agreement (including the Concurrent Transactions), contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements contained herein or therein not misleading.
SECTION 4.21 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Concurrent
Transactions based upon arrangements made by or on behalf of VJNIL except an
aggregate of $75,000 payable by VJNIL to Communications Equity Associates,
Inc., which $75,000 shall be paid at the Closing solely by VJNIL.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TICKETMASTER
As an inducement to VJN to enter into this Agreement, Ticketmaster
hereby represents and warrants to VJN as follows:
SECTION 5.1 Organization, Qualification, Etc. of Ticketmaster.
Ticketmaster is a duly registered, incorporated and validly existing
corporation under the Laws of England and Wales and has all necessary corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been, is
currently and is anticipated to be conducted. A true and complete list of the
stockholders of Ticketmaster is set forth on Schedule 5.01.
SECTION 5.2 Authority of Ticketmaster. Ticketmaster has all
necessary corporate power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Ticketmaster, the
performance by Ticketmaster of its obligations hereunder and the consummation
by Ticketmaster of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Ticketmaster. This
Agreement has been duly executed and delivered by Ticketmaster and (assuming
due authorization, execution and delivery by VJN) constitutes the legal, valid
and binding obligation of Ticketmaster, enforceable against Ticketmaster in
accordance with its terms, except as such enforcement may be subject to (a)
Bankruptcy or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
SECTION 5.3 No Conflict. Assuming the making and obtaining of
all filings, notifications, consents, approvals, authorizations and other
actions referred to in Section
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5.04, the execution, delivery and performance of this Agreement by Ticketmaster
and the consummation of the transactions contemplated hereby do not and will
not (a) violate, conflict with or result in the breach of any provision of
Ticketmaster's Memorandum or Articles of Association, (b) conflict with or
violate any Law or Governmental Order applicable to Ticketmaster, which
violation or conflict could, individually or in the aggregate, have a Material
Adverse Effect on Ticketmaster, or (c) conflict with, or result in any breach
of, constitute a default (or event which with the giving of notice or lapse or
time, or both, would become a default) under, require any consent under, or
give to others any rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Ticketmaster pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument, agreement or arrangement to which Ticketmaster
is a party or by which any of such assets or properties are bound or affected
which could reasonably be expected to have a Material Adverse Effect on the
ability of Ticketmaster to consummate the transactions contemplated hereby.
SECTION 5.4 Consents and Approvals. The execution, delivery and
performance of this Agreement by Ticketmaster do not and will not require any
consent, approval, authorization or other order of, action by, filing with, or
notification to, any Governmental Authority or, except as set forth on Schedule
5.04, any third party.
SECTION 5.5 Litigation. No claims or proceedings are pending or,
to the knowledge of Ticketmaster, threatened by or against Ticketmaster (or, to
Ticketmaster's knowledge, any of its directors, officers, employees or agents)
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to affect the legality, validity
or enforceability of this Agreement or the consummation of the transactions
contemplated hereby, including without limitation the Concurrent Transactions.
SECTION 5.6 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Concurrent
Transactions based upon arrangements made by or on behalf of Ticketmaster.
SECTION 5.7 Investment Intent. Ticketmaster is acquiring the
Shares for investment purposes and not with a view to, or for resale in
connection with, the distribution or disposition thereof (except in a
transaction or transactions permitted under the applicable securities laws).
Ticketmaster represents that it is has such knowledge and experience in
financial and business matters (as required by Rule 506 of Regulation D of the
Securities Act of 1933, as amended), and has had such opportunity as it deems
necessary or appropriate to ask questions of and receive answers from personnel
of VJNIL, VJN or of others acting on VJNIL's behalf concerning the Business,
VJNIL and the Shares, to enable Ticketmaster to evaluate the merits and risks
associated
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<PAGE> 24
with ownership of the Shares.
SECTION 5.8 Access to Information. Ticketmaster has been
afforded an opportunity to discuss the Business and VJNIL's management and
financial affairs with VJNIL's management and has also had an opportunity to
ask questions of and receive answers from VJNIL's officers relating to the
subject matter of this Agreement.
SECTION 5.9 ITC License. Ticketmaster is not aware of any reason
which would give the Independent Television Commission grounds to revoke the
ITC License.
SECTION 5.10 Full Disclosure. No representation or warranty of
Ticketmaster contained in this Agreement and no written statement contained in
any financial or operating data or certificate furnished or to be furnished to
VJN or VJNIL pursuant to this Agreement, or in connection with the transactions
contemplated by this Agreement (including the Concurrent Transactions),
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
ARTICLE VI
CONCURRENT TRANSACTIONS; DELIVERIES; CONDITIONS
SECTION 6.1 Concurrent Transactions. The parties hereto
acknowledge that each of the parties hereto has relied upon the accuracy,
validity and effectiveness of such other parties' representations, warranties
and agreements in entering into this Agreement and that, concurrently with the
Closing:
(a) In accordance with the terms of that certain Stock
Purchase Agreement between VJN and Vincent Paul Monsey ("Monsey"), a copy of
which is attached hereto as Exhibit B (the "Monsey Stock Purchase Agreement"),
VJN shall have (i) purchased the 54 Series B Ordinary Shares of VJNIL legally
and beneficially owned by Monsey, in consideration for 225,000 shares of common
stock of VJN, (ii) had transferred to it the 36 Series B Ordinary Shares of
VJNIL legally owned by Monsey and held on a nominee basis for the benefit of
VJN (each of the transfers described in clauses (i) and (ii) above having been
duly approved by VJNIL), and (iii) provided evidence, satisfactory to
Ticketmaster, of the termination without liability to VJNIL, of (A) those
certain agreements with respect to the Series B and Series C Ordinary Shares
entitled the Escrow Agreement and the Declaration of Trust and Nomineeship and
(B) that certain Shareholders Agreement dated March 4, 1992 among Monsey, VJN
and VJNIL;
(b) VJN, as the sole member of VJNIL, shall have procured
the passing of a special resolution of the members of VJNIL to reclassify the
Series A Ordinary Shares, the Series B Ordinary Shares and the Series C
Ordinary Shares of VJNIL as Ordinary Shares so that only one series of capital
stock of VJNIL is authorized and
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outstanding;
(c) Ticketmaster, VJNIL and VJN shall enter into that
certain Administrative Services Agreement, a copy of which is attached hereto
as Exhibit C (the "Administrative Services Agreement"), pursuant to which
Ticketmaster shall subscribe for 110 newly issued Ordinary Shares of VJNIL in
consideration for the issuance by Ticketmaster of a Promissory Note in the
amount of L.625,400, as provided therein;
(d) TM/Video International, Inc., a Delaware corporation
("TM/Video") shall make a loan to VJNIL in the aggregate amount of $1,500,000
(U.S.) in accordance with, and which loan shall be secured and governed by,
that certain Secured Loan Agreement, that certain Secured Promissory Note and
that certain Debenture, each between TM/Video and VJNIL, copies of which are
attached hereto as Exhibits D, E and F (collectively, the "Ticketmaster Loan
Documents");
(e) All outstanding indebtedness of VJNIL to VJN shall
have been repaid in full with the proceeds of a new loan made by VJN to VJNIL
in the aggregate amount of $1,500,000 (U.S.), which loan shall be evidenced,
secured and governed by that certain Secured Loan Agreement, that certain
Secured Promissory Note and that certain Debenture, each between VJN and VJNIL
and each containing terms identical to the corresponding Ticketmaster Loan
Document, in the forms of Exhibits G, H and I attached hereto (collectively,
the "VJN Loan Documents");
(f) TM/Video, VJN, VJNIL and the agent thereunder shall
enter into an intercreditor agreement (the "Intercreditor Agreement"), in the
form of Exhibit J attached hereto;
(g) VJN and VJNIL shall enter into a license agreement,
in the form of Exhibit K attached hereto, granting VJNIL rights to use certain
Intellectual Property of VJN relating to the Business (the "VJN License");
(h) Ticketmaster, VJN and VJNIL shall enter into the
Stockholders Agreement and shall adopt the new Articles of Association, in the
form of Exhibit K-2 attached hereto;
(i) VJNIL shall enter into employment agreements with
each of Monsey and Elizabeth A. Laskowski, in the forms of Exhibits L and M
(the "Employment Agreements");
(j) VJN and Ticketmaster shall execute a Deed of Tax
Covenant in favor of Ticketmaster, in the form of Exhibit N, attached hereto
(the "Tax Covenant"); and
(k) VJN and Ticketmaster shall execute a letter agreement
regarding VJN's potential obligation to indemnify Ticketmaster upon the
occurrence of certain
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specified events, in the form of Exhibit O, attached hereto.
The parties hereto agree that all of the documents to be executed and delivered
pursuant to this Section 6.01 shall be deemed to be executed and delivered
concurrently with this Agreement and none of such documents shall become
effective until all such documents have been fully executed and delivered.
SECTION 6.2 Deliveries by Ticketmaster. On or prior to the
Closing, Ticketmaster shall execute (where necessary) and deliver or cause to
be delivered to VJN and VJNIL the following documents, certificates and
agreements:
(a) Purchase Price. Ticketmaster shall pay to VJN the
Purchase Price, in the manner set forth in Section 2.02;
(b) Representations and Warranties. A certificate
executed by a duly authorized officer of Ticketmaster certifying that the
representations and warranties of Ticketmaster contained in this Agreement are
true and correct in all material respects as of the Closing, except for any
representations or warranties that relate solely to an earlier date (in which
case such representations and warranties were true and correct as of such
earlier date);
(c) Resolutions. A true and complete copy, certified by
the Secretary of Ticketmaster, of the resolutions duly and validly adopted by
the board of directors of Ticketmaster evidencing its authorization of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(d) Incumbency Certificate. A certificate of the
Secretary of Ticketmaster certifying the names and signatures of the officers
of Ticketmaster authorized to sign this Agreement and the other documents to be
delivered hereunder on its behalf;
(e) Legal Opinion. An opinion of Ticketmaster's counsel,
Rowe & Maw, in substantially the form of Exhibit P hereto;
(f) TM/Video Loan. A copy of each of the Loan Agreements
and the Intercreditor Agreement, each executed by TM/Video; and
(g) Concurrent Transactions. A copy of each of the
following documents relating to the Concurrent Transactions, each executed by
Ticketmaster (or, as noted, TM/Video): (i) the Administrative Services
Agreement, (ii) the Stockholders Agreement, (iii) the Tax Covenant, (iv) each
of the Ticketmaster Loan Documents, executed by TM/Video, and (v) the
Intercreditor Agreement, executed by TM/Video.
SECTION 6.3 Deliveries by VJN. On or prior to the Closing, VJN
shall execute or cause to be executed and deliver or cause to be delivered to
Ticketmaster the
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following documents, certificates and agreements:
(a) Stock Certificates. Certificates representing all of
the Shares, together with stock transfer forms duly executed to effect transfer
of the Shares to Ticketmaster on the books and records of VJNIL;
(b) Representations and Warranties. A certificate
executed by a duly authorized officer of VJN certifying that the
representations and warranties relating to VJN and VJNIL contained in this
Agreement are true and correct in all material respects as of the Closing,
except for any representations or warranties that relate solely to an earlier
date (in which case such representations and warranties were true and correct
as of such earlier date);
(c) Resolutions of VJN. A true and complete copy,
certified by the Secretary of VJN, of the resolutions duly and validly adopted
by the board of directors of VJN evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(d) Incumbency Certificate of VJN. A certificate of the
Secretary of VJN certifying the names and signatures of the officers of VJN
authorized to sign this Agreement and the other documents to be delivered
hereunder on behalf of VJN;
(e) Legal Opinion. An opinion of VJN's counsel, Lucio,
Mandler, Croland, Bronstein & Steele, P.A., in substantially the form of
Exhibit Q hereto;
(f) Statutory Books. VJNIL's Register of Members,
reflecting VJN as the registered owner of 356 Ordinary Shares of VJNIL, shall
be presented to Ticketmaster's U.K. counsel for inspection. As soon as
possible after the Closing, VJNIL's Register of Members shall be updated to
reflect Ticketmaster's ownership of 356 Ordinary Shares of VJNIL.
(g) Concurrent Transactions. A copy of each of the
following documents relating to the Concurrent Transactions, each executed by
VJN and VJNIL (unless otherwise noted): (i) each of the VJN Loan Documents,
(ii) the VJN License, (iii) the Intercreditor Agreement, (iv) the Monsey Stock
Purchase Agreement, (v) the Stockholders Agreement; (vi) the Administrative
Services Agreement; (v) the Ticketmaster Loan Documents, executed by VJNIL;
(vi) the Tax Covenant, executed by VJN; (vii) the Employment Agreements,
executed by VJNIL and the other parties thereto; and (viii) special resolutions
of the sole member of VJNIL authorizing the amendment to its Articles and
Memorandum of Association, as described in Section 6.01(b), certified by the
Secretary of VJNIL.
SECTION 6.4 Conditions Precedent to the Parties' Obligations to
Close. The obligations of each of VJN and Ticketmaster hereunder to consummate
the transactions
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contemplated hereby are subject to the satisfaction or, in each parties' sole
discretion, waiver on or before the Closing of each of the following
conditions:
(a) Deliveries. Receipt by the appropriate parties of
the items enumerated in Sections 6.02 and 6.03 hereof.
(b) ITC Approval. VJNIL shall have received a letter
from the Independent Television Commission acknowledging the occurrence of the
transactions contemplated hereby and indicating that it would not be minded to
revoke the ITC License as a result of the transactions contemplated hereby.
(c) No Adverse Change. Since the date of the Interim
Financial Statements, there shall have been no Material Adverse Effect on the
Business, the Assets, or the financial condition or prospects of VJNIL.
(d) No Proceeding or Litigation. No action, proceeding
or litigation shall have been commenced or threatened by any Governmental
Authority seeking to restrain or materially alter the transaction contemplated
hereby which, in the reasonable good faith determination of VJN or
Ticketmaster, is likely to render it impossible or unlawful, or otherwise
render inadvisable the parties' intent, to consummate the transactions
contemplated hereby or any of the Concurrent Transactions.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival. All representations and warranties
contained herein and made in writing by or on behalf of the parties hereto in
connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the Closing for a period of two
years following the Closing Date, regardless of any investigation made at any
time with respect to any of the foregoing or any information the parties may
have in respect thereto; provided, however that (a) the representation
contained in Section 4.18 shall survive for a period of six years following the
Closing Date and (b) all of the agreements contained herein (including, without
limitation, those contained in Articles VIII and IX) and the representations
and warranties contained in Sections 3.02, 4.02 and 4.12 shall survive without
limitation as to time.
SECTION 7.2 Ticketmaster's Right to Indemnification. Subject to
the provisions of this Article VII and in addition to any other rights and
remedies available to Ticketmaster under applicable law, (a) VJN hereby agrees
to indemnify and hold harmless Ticketmaster or any of its officers, directors,
shareholders, employees, agents, representatives, attorneys, successors,
predecessors and assigns from and against any and all losses, obligations,
liabilities, damages, claims, deficiencies, costs and expenses
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(including, but not limited to, the amount of any settlement entered into
pursuant hereto and all reasonable legal and other expenses incurred in
connection with the investigation, prosecution or defense of the matter)
(collectively "Claims"), which may be asserted against or sustained or incurred
by Ticketmaster in connection with, arising out of, or relating to (i) any
breach of any, or any false, incorrect or misleading, representation or
warranty that is made by VJN herein or in any Exhibit, Schedule, certificate or
other document delivered to Ticketmaster by VJN with respect to VJN or VJNIL in
connection with this Agreement and that is qualified as to materiality, (ii)
any material breach of, or any materially false, incorrect or misleading,
representation or warranty that is made by VJN herein or in any Exhibit,
Schedule, certificate or other document delivered to Ticketmaster by VJN with
respect to VJN or VJNIL in connection with this Agreement and that is not
qualified as to materiality, or (iii) any breach of any agreements and
covenants made by VJN herein or in any Exhibit, Schedule, certificate or other
document delivered to Ticketmaster by VJN with respect to VJN or VJNIL in
connection with this Agreement; provided, however, that VJN shall not be liable
for any Claims to the extent that such Claims result solely from a decline in
the value of the Shares below the Purchase Price if such decline is not
directly related to and does not directly result from the fact, event or
circumstance giving rise to any inaccuracy in or breach of any of the
representations and warranties, covenants or agreements made by VJN herein; and
(b) any and all costs and expenses incurred by Ticketmaster in connection with
the enforcement of its rights under this Agreement. Notwithstanding the
foregoing, the aggregate liability of VJN to Ticketmaster under this Article
VII shall not exceed the Purchase Price.
SECTION 7.3 VJN's Right to Indemnification. Subject to the
provisions of this Article VII and in addition to any other rights and remedies
that may be available to VJN under applicable law, (a) Ticketmaster agrees to
indemnify and hold harmless VJN or any of its officers, directors,
shareholders, employees, agents, representatives, attorneys, successors,
predecessors and assigns from and against Claims which may be asserted against
or sustained or incurred by VJN in connection with, arising out of, or relating
to (i) any breach of any, or any false, incorrect or misleading, representation
or warranty that is made by Ticketmaster herein or in any Exhibit, Schedule,
certificate or other document delivered to VJN by or on behalf of Ticketmaster
in connection with this Agreement and that is qualified as to materiality, (ii)
any material breach of, or any materially false, incorrect or misleading,
representation or warranty that is made by Ticketmaster herein or in any
Exhibit, Schedule, certificate or other document delivered to VJN by or on
behalf of Ticketmaster in connection with this Agreement and that is not
qualified as to materiality, or (iii) any breach of any agreements and
covenants made by Ticketmaster herein or in any Exhibit, Schedule, certificate
or other document delivered to VJN by or on behalf of Ticketmaster in
connection with this Agreement and (b) any and all costs and expenses incurred
by VJN in connection with the enforcement of its rights under this Agreement.
Notwithstanding the foregoing, Ticketmaster's aggregate liability under this
Article VII shall not exceed the Purchase Price.
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SECTION 7.4 Procedure for Claims.
(a) Notice of Claim. Promptly, but in any event within
30 days after obtaining knowledge of any claim or demand which may give rise
to, or could reasonably give rise to, a claim for indemnification hereunder
(any such claim an "Indemnification Claim"), the party or parties entitled to
indemnification hereunder (the "Indemnified Party") shall give written notice
to the party or parties subject to indemnification obligations therefor (the
"Indemnifying Party") of such Indemnification Claim (a "Notice of Claim"). A
Notice of Claim shall be given with respect to all Indemnification Claims;
provided, however, that the failure to timely give a Notice of Claim to the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to the Indemnified Party hereunder to the extent that the
Indemnifying Party is not prejudiced by such failure. Subject to Section 7.01,
no Indemnified Party shall be entitled to give a Notice of Claim with respect
to any representation and warranty after the second annual anniversary of the
Closing Date. The Notice of Claim shall set forth the amount (or a reasonable
estimate) of the loss, damage or expense suffered, or which may be suffered, by
the Indemnified Party as a result of such Indemnification Claim and a brief
description of the facts giving rise to such Indemnification Claim. The
Indemnified Party shall furnish to the Indemnifying Party such information (in
reasonable detail) as the Indemnified Party may have with respect to such
Indemnification Claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same).
(b) Third Party Claims.
(i) If the claim or demand set forth in the
Notice of Claim is a claim or demand asserted by a third party (a "Third Party
Claim"), the Indemnifying Party shall have 15 days (or such shorter period if
an answer or other response or filing with respect to the pleadings served by
the third party is required prior to the 15th day) after the date of receipt by
the Indemnifying Party of the Notice of Claim (the "Notice Date") to notify the
Indemnified Party in writing of the election by the Indemnifying Party to
defend the Third Party Claim on behalf of the Indemnified Party.
(ii) If the Indemnifying Party elects to defend a
Third Party Claim on behalf of the Indemnified Party, the Indemnified Party
shall make available to the Indemnifying Party and its agents and
representatives all records and other materials in its possession which are
reasonably required in the defense of the Third Party Claim and the
Indemnifying Party shall pay any expenses payable in connection with the
defense of the Third Party Claim as they are incurred (whether incurred by the
Indemnified Party or Indemnifying Party).
(iii) In no event may the Indemnifying Party settle
or compromise
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any Third Party Claim without the Indemnified Party's consent, which shall not
be unreasonably withheld.
(iv) If the Indemnifying Party elects to defend a
Third Party Claim, the Indemnified Party shall have the right to participate in
the defense of the Third Party Claim, at the Indemnified Party's expense (and
without the right to indemnification for such expense under this Agreement);
provided, however, that the reasonable fees and expenses of counsel retained by
the Indemnified Party shall be at the expense of the Indemnifying Party if (A)
the use of the counsel chosen by the Indemnifying Party to represent the
Indemnified Party would present such counsel with a conflict of interest; (B)
the parties to such proceeding include both the Indemnified Party and the
Indemnifying Party and there may be legal defenses available to the Indemnified
Party which are different from or additional to those available to the
Indemnifying Party; (C) within 10 days after being advised by the Indemnifying
Party of the identity of counsel to be retained to represent the Indemnified
Party, the Indemnified Party shall have objected to the retention of such
counsel for valid reasons (which shall be stated in a written notice to
Indemnifying Party), and the Indemnifying Party shall not have retained
different counsel reasonably satisfactory to the Indemnified Party; or (D) the
Indemnifying Party shall authorize the Indemnified Party to retain separate
counsel at the expense of the Indemnifying Party.
(v) If the Indemnifying Party does elect to
defend a Third Party Claim, or does not defend a Third Party Claim in good
faith, the Indemnified Party shall have the right, in addition to any other
right or remedy it may have hereunder, at the sole and exclusive expense of the
Indemnifying Party, to defend such Third Party Claim; provided, however, that
such expenses shall be payable by the Indemnifying Party only if and when such
Third Party Claim becomes payable.
(vi) To the extent that an Indemnified Party
recovers on a Third Party Claim, the amount of such recovery (after deduction
of all costs and expenses incurred in connection with such Third Party Claim)
shall reduce, dollar-for-dollar, the indemnification obligation otherwise owing
by the Indemnifying Party.
(c) Cooperation in Defense. The Indemnified Party shall
cooperate with the Indemnifying Party in the defense of a Third Party Claim.
Subject to the foregoing, (i) the Indemnified Party shall not have any
obligation to participate in the defense of or to defend any Third Party Claim,
and (ii) the Indemnified Party's defense of or its participation in the defense
of any Third Party Claim shall not in any way diminish or lessen its right to
indemnification as provided in this Agreement.
ARTICLE VIII
CONFIDENTIALITY
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SECTION 8.1 Confidential Information. Each of VJN and
Ticketmaster (for purposes of this Article VIII, the "Stockholders") recognizes
and acknowledges that VJNIL's confidential and proprietary financial data,
computer software and hardware, intellectual property rights, business
know-how, customer contacts, supplier contacts, present and future plans,
budgets, and all other proprietary information (collectively, the "Confidential
Information") are valuable, special and unique assets of VJNIL. At no time
shall any Stockholder, or any of such Stockholder's directors, officers,
employees, attorneys, accountants, and other agents or representatives
(collectively, "Representatives" of such Stockholder) disclose any Confidential
Information or any part thereof, to any Person for any reason or purpose
whatsoever except in accordance with the terms of Section 8.02. Each of the
Stockholders agrees that money damages alone would not be an adequate remedy
for breach of Section 8.01 or 8.02 and, accordingly, in the event of a breach
or threatened breach by a Stockholder or its Representative of the provisions
of Section 8.01 or 8.02, VJNIL, or either of VJN or Ticketmaster acting on
behalf of VJNIL, shall be entitled, without being required to post a bond, to
an injunction restraining such Stockholder or its Representative from
disclosing, in whole or in part, the Confidential Information, or from
rendering any services to any Person to whom the Confidential Information, in
whole or in part, has been disclosed or is threatened to be disclosed. Nothing
herein shall be construed as prohibiting VJNIL, or either of VJN or
Ticketmaster acting on behalf of VJNIL, from pursuing any other remedies
available to VJNIL for such breach or threatened breach, including recovery of
damages from the breaching Stockholder. In any action or proceeding to enforce
the provisions of Section 8.01 or 8.02, the prevailing party shall pay, and
shall be reimbursed by the non-prevailing party for, all costs incurred in such
action or proceeding including, without limitation, all court costs and filing
fees, and all reasonable attorneys' fees, incurred either at the trial level or
at the appellate level. In the event VJN or Ticketmaster, acting on behalf of
VJNIL, brings suit to enforce the provisions of Section 8.01 or 8.02, such
Stockholder shall pay the costs and expenses of such suit, as incurred, and
shall be reimbursed therefor out of the first collections of any award
therefrom rendered in favor of VJNIL. Each Stockholder shall be liable for any
breach of this Section 8.01 by its Representatives. Sections 8.01 and 8.02
shall survive the termination of this Agreement.
SECTION 8.2 Permitted Disclosures. Notwithstanding the
provisions of Section 8.01, (a) any Stockholder may disclose any Confidential
Information to those of its Representatives who need to know or request such
information for the purpose of performing their duties or services for the
Stockholder, it being understood that the Representatives to whom disclosure of
any Confidential Information is made will be informed of the confidential
nature of the subject matter of such disclosure; provided, however, that no
disclosure of Confidential Information shall be made to a Representative who is
a Competitor, and (b) disclosure of any Confidential Information may be made by
any Stockholder or its Representatives to the extent that either (i) in the
opinion of such Stockholder's outside legal counsel, such disclosure is
required pursuant to the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as
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amended, or the rules and regulations under either such Act, or any other
applicable law, rule or regulation, or (ii) such disclosure is legally
compelled by judicial or administrative order, deposition, interrogatory,
request for documents, subpoena, investigative demand or other process or
otherwise is necessary in connection with any claim or litigation arising under
or with respect to this Agreement. In the event that any Stockholder or its
Representative becomes subject to a demand for discovery or other request for
disclosure of Confidential Information pursuant to applicable law or regulation
or legal process, such Stockholder, on its own or on its Representative's
behalf, shall give prompt notice to VJNIL of such demand or request and shall
cooperate, as reasonably requested, in seeking a protective order or other
appropriate remedy and/or, to the extent permitted by law, with respect to the
form of such required disclosure. The Confidentiality provisions of this
Article VIII do not apply to, and the term "Confidential Information" does not
include, any information which (A) at the time of disclosure or thereafter is
generally available to the public (other than as a result of a disclosure
directly or indirectly by the Stockholder or its Representatives in violation
of this Section), or (B) was or becomes available to the Stockholder or its
Representatives on a nonconfidential basis from a source other than VJNIL;
provided that such source is not known by the Stockholder or any of its
Representatives (after reasonable inquiry) to be bound by a confidentiality
agreement with the Stockholder or its Representatives.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Provision of Jukeboxes. So long as the VJN License
is in effect, VJN hereby agrees that it shall either (a) make available for
purchase by VJNIL (or Ticketmaster or its successors or assigns under the
Administrative Services Agreement, on behalf of VJNIL), at a mutually agreeable
price, jukeboxes and other equipment necessary to the Business or (b) provide
to VJNIL, free of charge, all information and data, including without
limitation any drawings, schematics, diagrams, component specifications,
techniques and know-how (excluding source code), necessary for VJNIL (or a
Person acting on behalf of VJNIL) to construct such jukeboxes and other
equipment necessary to the Business so that they are substantially identical to
the jukeboxes and equipment used by VJN.
SECTION 9.2 Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses.
SECTION 9.3 Stamp Duties. As soon as possible following the
Closing, VJN will pay all stamp duties of any kind applicable to or as a result
of the transfer of the Shares to Ticketmaster. This Section 9.03 shall survive
the Closing.
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SECTION 9.4 Notices. 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 the earliest to
occur of (a) receipt, if made by personal service, (b) three days after
delivery, if made by reputable overnight courier service, (c) upon the
delivering party's receipt of a written confirmation of a transmission made by
cable, by telecopy, by telegram, or by telex or (d) seven days after being
mailed by registered or certified mail (postage prepaid, return receipt
requested) 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 9.03):
(a) if to Ticketmaster:
3701 Wilshire Blvd.
Suite 700
Los Angeles, California 90010
Attention: President, Chief Executive
Officer and Chief Financial Officer
Telecopy: (213) 386-1244
with a copy to:
Neal Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Charles Evans Gerber
Telecopy: (312) 269-1747
(b) if to VJN:
1221 Collins Ave.
Miami Beach, Florida 33139
Attention: Chief Financial Officer
Telecopy: (305) 674-4900
with a copy to:
Lucio, Mandler, Croland, Bronstein & Steele, P.A.
701 Brickell Avenue, Suite 2000
Miami, Florida 33131
Attention: Leslie J. Croland, Esq.
Telecopy: (305) 375-8075
SECTION 9.5 Public Announcements. Except as required by law, no
party to this Agreement shall make, or cause to be made, any press release or
public
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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 prohibited by applicable law,
the parties shall cooperate as to the timing and contents of any such press
release or public announcement.
SECTION 9.6 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.
SECTION 9.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by 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.
SECTION 9.8 RTPA Registration. No provision of this Agreement or
the Additional Agreements which is subject to registration under the
Restrictive Trade Practices Act 1976 shall take effect until the day after
particulars of this Agreement or the Additional Agreements (as the case may be)
have been furnished to the Director General of Fair Trading pursuant to the
provisions of Section 24 of that Act.
SECTION 9.9 Entire Agreement. This Agreement, including all of
the Exhibits and Schedules attached hereto which are incorporated herein by
this reference, and the agreements effecting the Concurrent Transactions
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between VJN and Ticketmaster with respect
to the subject matter hereof and thereof.
SECTION 9.10 Assignment. This Agreement and the rights and duties
hereunder may not be assigned or assumed by operation of law or otherwise
(other than an assignment by Ticketmaster to an Affiliate of Ticketmaster)
without the express prior written consent of the other parties hereto (which
consent may be granted or withheld in the sole discretion of such other
parties, as applicable).
SECTION 9.11 Amendment; Waiver. This Agreement may not be amended
or modified except by an instrument in writing signed by, or on behalf of, each
party hereto. Each party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document delivered by the other party
pursuant hereto or (c) 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 all of
the other parties to be bound thereby. Any waiver of any term or condition
shall not be
-30-
<PAGE> 36
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.
SECTION 9.12 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware that are
applicable to contracts executed in and to be performed entirely within that
jurisdiction (without regard to its principals regarding conflicts of law).
SECTION 9.13 Jurisdiction; Service of Process. Each of the
parties hereto agrees that all actions or proceedings initiated by any party
hereto and arising directly or indirectly out of this Agreement which are
brought to judicial proceedings shall be litigated in the United States
District Court covering Wilmington, Delaware or, in the event such court cannot
or will not exercise jurisdiction, in the Court of Chancery of the State of
Delaware. Each of the parties hereto expressly submits to the jurisdiction of
the above-referenced courts and consents to process being served in any suit,
action or proceeding of the nature referred to above either (a) by the mailing
of a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to its address as set forth herein or (b) by serving a copy
thereof upon such party's authorized agent for service of process (to the
extent permitted by applicable law, regardless whether the appointment of such
agent for service of process for any reason shall prove to be ineffective or
such agent for service of process shall accept or acknowledge such service);
provided that, to the extent lawful and practicable, written notice of said
service upon said agent shall be mailed by registered or certified mail,
postage prepaid, return receipt requested, to the party at its address as set
forth herein. Each party hereto agrees that such service, to the fullest
extent permitted by law, (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall be
taken and held to be valid personal service upon and personal delivery to it.
SECTION 9.14 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.
SECTION 9.15 Attorneys' Fees. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this 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.
SECTION 9.16 Further Action. 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
-31-
<PAGE> 37
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.
-32-
<PAGE> 38
IN WITNESS WHEREOF, VJN, VJNIL and Ticketmaster have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
VIDEO JUKEBOX NETWORK, INC.
By: /s/ Alan McGlade
--------------------------------
Name: Alan McGlade
Title: President
TM NO. 2 LIMITED
By: /s/ Marc Bension
--------------------------------
Name: Marc Bension
Title: Director
VIDEO JUKEBOX NETWORK
INTERNATIONAL LIMITED,
solely with respect to the provisions of
Articles VIII and IX
By: /s/ Vincent Monsey
------------------------------------
Name: Vincent Monsey
Title: Managing Director
-33-
<PAGE> 39
EXHIBIT "A"
[COPY OF STOCKHOLDERS AGREEMENT FILED AS
EXHIBIT 99.13 TO THIS FORM 8-K]
<PAGE> 40
EXHIBIT "B"
[COPY OF MONSEY STOCK PURCHASE AGREEMENT
FILED AS EXHIBIT 99.1 TO THIS FORM 8-K]
<PAGE> 41
EXHIBIT "C"
[COPY OF ADMINISTRATIVE SERVICES AGREEMENT
FILED AS EXHIBIT 99.11 TO THIS FORM
8-K]
<PAGE> 42
EXHIBIT "D"
[COPY OF TICKETMASTER SECURED LOAN AGREEMENT
FILED AS EXHIBIT 99.2 TO THIS FORM
8-K]
<PAGE> 43
EXHIBIT "E"
[COPY OF TICKETMASTER SECURED PROMISSORY NOTE
FILED AS EXHIBIT 99.3 TO THIS FORM
8-K]
<PAGE> 44
EXHIBIT "F"
[COPY OF TICKETMASTER DEBENTURE FILED AS
EXHIBIT 99.7 TO THIS FORM 8-K]
<PAGE> 45
EXHIBIT "G"
[COPY OF VJN SECURED LOAN AGREEMENT FILED AS
EXHIBIT 99.4 TO THIS FORM 8-K]
<PAGE> 46
EXHIBIT "H"
[COPY OF VJN SECURED PROMISSORY NOTE FILED AS
EXHIBIT 99.5 TO THIS FORM 8-K]
<PAGE> 47
EXHIBIT "I"
[COPY OF VJN DEBENTURE FILED AS EXHIBIT 99.6 TO
THIS FORM 8-K]
<PAGE> 48
EXHIBIT "J"
[COPY OF INTERCREDITOR AGREEMENT FILED AS
EXHIBIT 99.8 TO THIS FORM 8-K]
<PAGE> 49
EXHIBIT "K"
[COPY OF LICENSE AGREEMENT FILED AS EXHIBIT 99.10
TO THIS FORM 8-K]
<PAGE> 50
EXHIBIT "K-2"
Company No. 2643552
COMPANIES ACTS 1985 AND 1989
-------------------------
COMPANY LIMITED BY SHARES
-------------------------
ARTICLES OF ASSOCIATION
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(Adopted by Written Resolution dated 30th June 1995)
INTERPRETATION
Exclusion of Table A
1. No regulations for the management of the Company set out in any
schedule of or otherwise contained or incorporated in any statute or
other instrument having statutory force shall apply to the Company and
the following shall be the Articles of Association of the Company.
Definitions
2.1 In these Articles the words and expressions set out in the first
column below shall respectively (if not inconsistent with the context)
bear the meanings set out opposite to them in the second column below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
WORDS MEANINGS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
"the Act" the Companies Act 1985 as amended by the Companies Act 1989;
"Affiliate" shall mean any person (other than the Company) who or which, directly or
indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, any specified person;
provided however, that an Affiliate shall not include a Competitor;
"these Articles" these articles of association as from time to time altered;
"Board" the board of Directors of the Company from
</TABLE>
-1-
<PAGE> 51
<TABLE>
<S> <C>
time to time;
"Business Day" shall mean any day that is not a Saturday or a Sunday and on which banks
are open for the conduct of normal banking business in all of the Cities
of Los Angeles, California, Miami, Florida and London, England;
"clear days" in relation to a period of notice means the period excluding the day on
which the notice is served or deemed to have been served and the day on
which it is given or on which it is to take effect;
"Competitor" shall mean an entity operating or controlling either video music
services for use on television broadcast or cable channels featuring
such services existing as of the date hereof or subsequently formed
services with programming that is substantially similar in format and/or
content to the Company's programming; provided, however, that Time
Warner and its Affiliates shall not be considered Competitors for
purpose of this definition;
"Control" (including the terms "controlling" "controlled by" and "under common
control with"), with respect to the relationship between or among two or
more persons, means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of
voting securities, as trustee or executor, by contract or otherwise,
including, without limitation, the ownership, directly or indirectly, of
securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such person.
"Directors" the directors of the Company from time to time and "Director" shall be
construed accordingly;
"Equity Interests" any and all Shares in the capital of the Company carrying the right to
vote at and
</TABLE>
(2)
<PAGE> 52
<TABLE>
<S> <C>
attend meetings of the members and any interests, derivatives,
participations, in or other equivalents (however designated) of such
shares of the Company and any and all warrants, options or other rights
to purchase or convertible into any of the foregoing.
"executed" any mode of execution;
"Financial Year" an accounting reference period of the Company and its Subsidiaries (if
any);
"Group" in relation to any company, that company and its Subsidiaries and any
company of which it is a Subsidiary (its "holding Company") and any
Subsidiary of its holding company;
"holder" or member" any holder for the time being of shares whose name is registered in the
Register;
"in writing" includes handwriting, typewriting, printing lithography, photocopying
and other modes of representing or reproducing words in legible and non-
transient form;
"month" a calendar month;
"Non-Shareholder Director" a Director appointed pursuant to paragraph 14.2
"Office" the registered office of the Company for the time being;
"Ordinary Shares" the Ordinary Shares of L.1 each in the capital of the Company;
"paid up" paid or credited as paid up;
"Register" the Register of Members of the Company;
"Seal" the common seal of the Company;
"Secretary" the Secretary of the Company or any other person appointed to perform
the duties of the Secretary of the Company including (subject to the
provisions of the Act) a joint, deputy or assistant Secretary;
</TABLE>
(3)
<PAGE> 53
<TABLE>
<S> <C>
"Shareholder Directors" the TM Directors and the VJN Directors;
"Shares" ordinary shares of L.1 each in the capital of the Company;
"Subsidiary" in relation to a company ("the holding company") any other company in
which the holding company (or persons acting on its behalf) for the time
being directly or indirectly holds or controls either:
(i) a majority of the voting rights exercisable at general
meetings of the members of that company on all, or
substantially all, matters; or
(ii) the right to appoint or remove directors having a
majority of the voting rights exercisable at meetings of
the board of directors of that company on all, or
substantially all, matters,
and any company which is a Subsidiary of another company shall also be a
Subsidiary of any further company of which that other is a Subsidiary;
"TM Director" a Director nominated by the TM Holder;
"TM Holder(s)" TM No.2 Limited and/or any of its Affiliates for so long as it or they
hold shares in the Company;
"United Kingdom" Great Britain and Northern Ireland;
"VJN Director" a Director nominated by the VJN Holder;
"VJN Holder" Video Jukebox Network, Inc. and/or any of its Affiliates for so long as
it or they hold shares in the Company;
"Year" a calendar year.
</TABLE>
2.2 Save as aforesaid and unless the context otherwise requires words or
expressions contained in these Articles bear the same meaning as in
the Act
(4)
<PAGE> 54
but excluding any statutory modification thereof not in force at the
date of adoption of these Articles.
2.3 In these Articles unless the context otherwise requires:
(a) words in the singular include the plural and vice versa;
(b) words importing any gender include all genders;
(c) a reference to a person includes a reference to a body
corporate and to an unincorporated body of persons;
(d) a reference to any statute or provision of a statute includes
a reference to any statutory modification or re-enactment of
it for the time being in force.
2.4 The headings are inserted for convenience only and do not affect the
construction of these Articles.
2.5 References to a document being executed include references to its
being executed under hand or under seal or by any other method.
2.6 References to writing include references to any visible substitute for
writing and to any thing partly in one form and partly in another
form.
2.7 Except where expressly provided by the terms of delegation, the
delegation of a power shall not exclude the concurrent exercise of
that power by any other body or person who is for the time being
authorised to exercise it under these Articles or under another
delegation of power.
SHARE CAPITAL
3.1 The authorised share capital of the Company at the date of adoption of
these articles is L.1000 divided into 1000 Ordinary Shares of L.1
each.
3.2 Subject to the provisions of the Act and without prejudice to any
rights attached to any existing shares, any share may be issued with
such rights or restrictions as the Company may by special resolution
determine.
3.3 Subject to paragraph 5 below and the provisions of the Act, any shares
may be issued on terms that they are to be, or at the option of the
Company or a member holding such shares are liable to be, redeemed on
such terms and conditions as are contained in or, as to the amount
payable on redemption, determined in accordance with these Articles.
3.4 Subject to paragraph 5 below and the provisions of the Act the Company
will have power to purchase its own shares (whether issued on the
terms
(5)
<PAGE> 55
that they are to be, or are liable to be, redeemed or not).
3.5 Subject to paragraph 5 below and subject to the provisions of the Act
the Company will have power to redeem or purchase its own shares out
of capital and may make a payment in respect of the redemption or
purchase of any of its own shares otherwise than out of distributable
profits of the Company or the proceeds of a fresh issue of shares.
3.6 Except as required by law, and even when the Company has express
notice, no person will be recognised by the Company as holding any
share upon any trust and (except as otherwise provided by these
Articles or by law) the Company will not be bound by or recognise any
interest in any share except an absolute right to the entirety of it
in the holder.
3.7 Subject to the provisions of the Act, if at any time the capital of
the Company is divided into different classes of shares, the rights
attached to any class may (unless otherwise provided by the terms of
issue of the shares of that class) be varied or abrogated whether or
not the Company is being wound up, either with the consent in writing
of the holders of three quarters in nominal value of the issued shares
of the class or with the sanction of an extraordinary resolution
passed at a separate general meeting of the holders of the shares of
the class (but not otherwise). All provisions of these Articles
relating to general meetings of the Company shall, mutatis mutandis,
apply to every separate general meeting of the holders of any class of
shares in the capital of the Company, except that:
(a) the necessary quorum shall be one(1) holder present in person
or by proxy, who shall be deemed to constitute a meeting;
(b) any holder of shares of the class present in person or by
proxy may demand a poll; and
(c) each holder of shares of the class shall, on a poll, have one
vote in respect of every share of the class held by him.
3.8 Every member, upon becoming the holder of any shares, shall be
entitled without payment to one certificate for all the shares of each
class held by him (and, upon transferring a part of his holding of
shares of any class, to a certificate for the balance of such holding)
or several certificates each for one or more of his shares upon
payment for every certificate after the first of such reasonable sum
as the Directors may determine. Every certificate shall specify the
number, class and distinguishing numbers (if any) of the shares to
which it relates and the amount paid up thereon, and such a
certificate signed by a Director of the Company together with the
Secretary or a second Director shall be evidence of the title of the
registered holder to the shares, whether or not the Seal has been
affixed and regardless of any words in the certificate referring to a
seal. The Company shall not be
(6)
<PAGE> 56
bound to issue more than one certificate for shares held jointly by
several persons and delivery of a certificate to one joint holder
shall be a sufficient delivery to all of them.
3.9 In addition each and every share certificate shall contain upon its
face, or on the reverse side thereof, the following legend:
The shares represented by this certificate (i) are subject to certain
restrictions on transfer contained in the Company's Articles of
Association as amended from time to time, and (ii) may be subject to
other restrictions contained in agreements to which the Company is a
party and no shares represented by this certificate may be sold,
transferred, pledged or otherwise disposed of in violation of such
restrictions. Copies of the above referenced documents are available
to the holder hereof without charge at the principal offices of the
Company.
3.10 If a share certificate is defaced, worn-out, lost or destroyed, it may
be renewed on such terms (if any) as to evidence and indemnity and
payment of the expenses reasonably incurred by the Company in
investigating evidence as the Directors may determine but otherwise
free of charge, and (in the case of defacement or wearing-out) on
delivery up of the old certificate.
COMMISSIONS
4. The Company may exercise the powers of paying commissions conferred by
the Act to the full extent permitted by the Act. Subject to the
provisions of the Act any such commission may be satisfied by the
payment of cash or by the allotment of fully or partly paid shares or
partly in one way and partly in the other. The Company may also on
any issue of shares pay such brokerage as may be lawful.
ACTIONS REQUIRING CLASS VOTE
5. The following actions shall be deemed to be a variation of class
rights and shall not be taken by the Company without the prior consent
or sanction of a special resolution pursuant to the provisions of the
Act:
(a) the exercise of the powers available to the Company under
paragraph 9 (Alteration of Share Capital);
(b) the issue of any shares in the Company (whether redeemable or
not);
(c) the exercise of the powers available to the Company under
paragraphs 3.3, 3.4 and 3.5 hereof to redeem or purchase its
own shares;
(7)
<PAGE> 57
(d) any alteration to these Articles.
LIEN
6.1 The Company shall have a first and paramount lien on every share (not
being a fully paid share) for all moneys (whether presently payable or
not) payable at a fixed time or called in respect of that share. The
Directors may at any time declare any share to be wholly or in part
exempt from the provisions of this paragraph. The Company's lien on a
share shall extend to any amount payable in respect of it.
6.2 The Company may sell in such manner as the Directors determine any
shares on which the Company has a lien if a sum in respect of which
the lien exists is presently payable and is not paid within fourteen
clear days after notice has been given to the holder of the share or
to the person entitled to it in consequence of the death or bankruptcy
of the holder, demanding payment and stating that if the notice is not
complied with the shares may be sold.
6.3 To give effect to a sale the Directors may authorise some person to
execute an instrument of transfer of the shares sold to, or in
accordance with the directions of, the purchaser. The title of the
transferee to the shares shall not be affected by an irregularity in
or invalidity of the proceedings in reference to the sale.
6.4 The net proceeds of the sale, after payment of the costs, shall be
applied in payment of so much of the sum for which the lien exists as
is presently payable, and any residue shall (upon surrender to the
Company for cancellation of the certificate for the shares sold and
subject to a like lien for any moneys not presently payable as existed
upon the shares before the sale) be paid to the person entitled to the
shares at the date of the sale.
CALLS ON SHARES
7.1 Subject to the terms of allotment of shares, the Directors may from
time to time make calls upon the members in respect of any moneys
unpaid on their shares (whether in respect of the nominal value of the
shares or by way of premium) that are not payable at fixed times under
the terms of allotment.
7.2 A call shall be deemed to have been made at the time when the
resolution of the Directors authorising the call was passed.
7.3 Each member will subject to receiving 14 clear days notice specifying
when and where payment is to be made pay to the Company as required by
the notice the amount called on his shares. A call may be revoked or
postponed in whole or part before receipt by the Company of any moneys
(8)
<PAGE> 58
due under it, as the Directors may determine.
7.4 The holder of a share at the time a call is due to be paid shall be
the person liable to pay the call, and in the case of joint holders
they will be jointly and severally liable.
7.5 If a call remains unpaid after it has become due and payable the
person or persons from whom it is due and payable shall pay interest
on the amount unpaid from the day it became due and payable until it
is paid at the rate fixed by the terms of allotment of the share or in
the notice of the call or, if no rate is fixed, at the appropriate
rate (as defined by the Act) but the Directors may waive payments of
the interest wholly or in part.
7.6 If any amount payable in respect of a share on allotment or at a fixed
date, (whether in respect of the whole or part of the nominal value of
the share or by way of premium) is not paid on the date on which by
the terms of issue the same becomes payable, the relevant provisions
of these Articles will apply as if that amount had become payable by
virtue of a call duly made and notified.
7.7 Subject to the terms of allotment, the Directors may make arrangements
on the issue of shares for a difference between the holders in the
amounts and times of payment of calls on their shares.
7.8 If a call remains unpaid after it has become due and payable the
Directors may give to the person or persons from whom it is due not
less than fourteen clear days notice requiring payment of the amount
unpaid together with any interest which may have accrued. The notice
shall name the place where payment is to be made and shall state that
if the notice is not complied with the shares in respect of which the
call was made will be liable to be forfeited.
7.9 If the notice is not complied with any share in respect of which it
was given may, before the payment required by the notice has been
made, be forfeited by a resolution of the Directors and the forfeiture
shall include all dividends or other moneys payable in respect of the
forfeited shares and not paid before the forfeiture.
7.10 Subject to the provisions of the Act, a forfeited share may be sold,
re-allotted or otherwise disposed of on such terms and in such manner
as the Directors determine either to the person who was before the
forfeiture the holder or to any other person and at any time before
sale, re-allotment or other disposition, the forfeiture may be
cancelled on such terms as the Directors think fit. Where for the
purposes of its disposal a forfeited share is to be transferred to any
person the Directors may authorise some person to execute an
instrument of transfer of the share to that person.
(9)
<PAGE> 59
7.11 A person any of whose shares have been forfeited shall cease to be a
member in respect of them and shall surrender to the company for
cancellation the certificate for the shares forfeited but shall remain
liable to the Company for all moneys which at the date of forfeiture
were presently payable by him to the Company in respect of those
shares with interest at the rate at which interest was payable on
those moneys before the forfeiture or, if no interest was so payable,
at the appropriate rate (as defined in the Act) from the date of
forfeiture until payment but the Directors may waive payment wholly or
in part or enforce payment without any allowance for the value of the
shares at the time of forfeiture or for any consideration received on
their disposal.
7.12 A statutory declaration by a Director or the Secretary that a share
has been forfeited on a specified date shall be conclusive evidence of
the facts stated in it as against all persons claiming to be entitled
to the share and the declaration shall (subject to the execution of an
instrument of transfer if necessary) constitute good title to the
share and the person to whom the share is disposed of shall not be
bound to see to the application of the consideration, if any, nor
shall his title to the share be affected by any irregularity in or
invalidity of the proceedings in reference to the forfeiture or
disposal of the share.
TRANSFER AND TRANSMISSION
8.1 The instrument of transfer of a share may be in any usual form or in
any other form which the Directors may approve and shall be executed
by or on behalf of the transferor and, unless the share is fully paid,
by or on behalf of the transferee. The transferor shall be deemed to
remain the holder of the share until the name of the transferee is
entered in the Register in respect thereof.
8.2 The Directors shall refuse to register the transfer of a share unless
(a) it is lodged at the Office or at such other place as the
Directors may appoint and is accompanied by the certificate
for the shares to which it relates and such other evidence as
the Directors may reasonably require to show the right of the
transferor to make the transfer;
(b) it is in respect of only one class of shares.
8.3 If the Directors refuse to register a transfer of a share, they shall
within two months after the date on which the transfer was lodged with
the Company send to the transferee notice of the refusal.
(10)
<PAGE> 60
8.4 The registration of transfers of shares or of transfers of any class
of shares may be suspended at such times and for such periods (not
exceeding thirty days in any year) as the Directors may determine.
8.5 No fee shall be charged for the registration of any instrument of
transfer or other document relating to or affecting the title to any
share.
8.6 The Company shall be entitled to retain any instrument of transfer
which is registered, but any instrument of transfer which the
Directors refuse to register shall be returned to the person lodging
it when notice of the refusal is given.
8.7 If a member dies the survivor or survivors where he was a joint
holder, and his personal representatives where he was a sole holder or
the only survivor of joint holders, shall be the only persons
recognised by the Company as having any title to his interest; but
nothing herein contained shall release the estate of a deceased member
from any liability in respect of any share which had been solely or
jointly held by him.
8.8 A person becoming entitled to a share in consequence of the death or
bankruptcy of a member may, upon such evidence being produced as the
Directors may properly require, elect either to become the holder of
the share or to have some person nominated by him registered as the
transferee. If he elects to become the holder he shall give notice to
the Company to that effect. If he elects to have another person
registered he shall execute an instrument of transfer of the share to
that person. All the provisions of these Articles relating to the
transfer of shares shall apply to the instrument of transfer as if it
were an instrument of transfer executed by the member and the death or
bankruptcy of the member had not occurred.
8.9 A person becoming entitled to a share in consequence of the death or
bankruptcy of a member shall have the rights to which he would be
entitled if he were the holder of the share, except that he shall not,
before being registered as the holder of the share, be entitled in
respect of it to attend or vote at any meeting of the Company or at
any separate meeting of the holders of any class of shares in the
Company.
ALTERATION OF SHARE CAPITAL
9.1 The Company may by special resolution subject to the provisions of
paragraph 5 above:
(a) increase its authorised share capital by such sum to be
divided into shares of such amount as the resolution
prescribes provided that such increased capital shall be
divided into shares of the same class or classes as the
existing share capital of the Company
(11)
<PAGE> 61
pro rata as nearly as may be to the number of shares of each
such class in issue at the date of the creation of the new
shares;
(b) consolidate and divide all or any of its share capital into
shares of larger amounts than its existing shares;
(c) subject to the provisions of the Act, sub-divide its shares,
or any of them, into shares of smaller amounts and the
resolution may determine that, as between the shares
resulting from the sub-division, any of them may have any
preference or advantages compared with the others; and
(d) cancel shares which, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any
person and diminish the amount of its authorised share
capital by the amount of the shares so cancelled.
9.2 Whenever as a result of a consolidation of shares any members would
become entitled to fractions of a share, the Directors may, on behalf
of those members, sell the shares representing the fractions for the
best price reasonably obtainable to any person (including, subject to
the provisions of the Act, the Company) and distribute the net
proceeds of sale in due proportion among those members, and the
Directors may authorise some person to execute an instrument of
transfer of the shares to, or in accordance with the directions of,
the purchaser. The transferee shall not be bound to see to the
application of the purchase money nor shall his title to the shares be
affected by any irregularity in or invalidity of the proceedings in
reference to the sale.
9.3 Subject to the provisions of the Act, the Company may by special
resolution reduce its issued share capital, any capital redemption
reserve and any share premium account in any way.
GENERAL MEETINGS
10.1 All general meetings other than annual general meetings shall be
called extraordinary general meetings.
10.2 The Directors may call general meetings and, on the requisition of
members pursuant to the provisions of the Act, will immediately
proceed to convene an extraordinary general meeting for a date not
later than 28 days after the date of the notice convening the meeting.
If there are insufficient Directors within the United Kingdom to call
a general meeting, any Director or any such member of the Company may
call a general meeting.
(12)
<PAGE> 62
NOTICE OF GENERAL MEETINGS
11.1 An annual general meeting and an extraordinary general meeting called
for the passing of a special resolution will be called by at least 21
clear days notice. All other extraordinary general meetings will be
called by at least 14 clear days notice but a general meeting may be
called by shorter notice if it is agreed:
(a) in the case of an annual general meeting, by all the members
entitled to attend and vote or their duly authorised proxies;
(b) (subject to any elective resolution for the time being in
force under section 379A of the Act) in the case of any other
meeting, by a majority in number of the members having a
right to attend and vote being a majority together holding
not less than 95 per cent in nominal value of the shares
giving that right.
11.2 The notice will specify the time and place of the meeting and the
nature of the business to be transacted and, in the case of an annual
general meeting, will specify the meeting as such.
11.3 Subject to the provisions of these Articles and to any restrictions
imposed on any shares, the notice will be given to all members, to all
persons entitled to a share in consequence of the death or bankruptcy
of a member and to the Directors and auditors of the Company.
PROCEEDINGS AT GENERAL MEETINGS
12.1 No business will be transacted at any meeting unless a quorum is
present. A quorum will consist of such member who holds or such
members who collectively hold a majority in nominal value of the
shares of the Company each of whom is present in person or by proxy or
in the case of a corporate member, a duly authorised representative of
that corporation.
12.2 If a quorum is not present within one hour from the time appointed for
a general meeting, the meeting shall stand adjourned to the same day
in the next week (or if that day be a holiday to the next working day
thereafter) at the same time and place as the original meeting or to
such other later day, and at such other later time and place, as the
Directors may determine. If a quorum is again not present within one
hour of the time appointed for the holding of the meeting then the
meeting shall be dissolved.
12.3 The chairman, if any, of the board of Directors or in his absence some
other Director nominated by the Shareholder Directors will preside as
chairman of the meeting, but if neither the chairman nor such other
Director (if any) is present within thirty (30) minutes after the time
appointed for holding the meeting and willing to act, the Directors
present shall elect one of their
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number to be chairman and, if there is only one Director present and
willing to act, he will be chairman. If no Director is willing to act
as chairman, or if no Director is present within thirty (30) minutes
after the time appointed for holding the meeting, the members present
and entitled to vote may choose one of their number to be chairman.
12.4 Any Director despite his not being a member, is entitled to attend and
speak at any general meeting and at any separate meeting of the
holders of any class of shares in the Company.
12.5 The chairman may with the consent of a majority, of the members at a
meeting at which a quorum is present (and must if so directed by the
meeting), adjourn the meeting from time to time and from place to
place in the following circumstances:
(a) where in his unfettered judgment it is impossible for all the
members present to take part in the debate and to vote;
(b) in the event of his considering that disorder is occurring.
No business may be transacted at any adjourned meeting other than
business which might properly have been transacted at the meeting had
the adjournment not taken place. When a meeting is adjourned for
fourteen (14) days or more, at least seven (7) clear days notice must
be given specifying the time and the place of the adjourned meeting
and the nature of the business to be transacted. Otherwise it will
not be necessary to give any such notice.
12.6 A resolution put to the vote of a meeting will be decided on a show of
hands unless before or on declaration of the result of the show of
hands, a poll is duly demanded.
Subject to the provisions of the Act, a poll may be demanded:
(a) by the chairman; or
(b) by at least one member having the right to vote at the meeting
and a demand by a person as proxy for a member will be the same as a
demand by the member.
12.7 The demand for a poll may, before the poll is taken, be withdrawn but
only with the consent of the chairman. A demand so withdrawn will not
be taken to have invalidated the result of a show of hands declared
before the demand was made.
12.8 A poll will be taken as directed by the chairman and he may appoint
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scrutineers (who need not be members) and fix a time and place for
declaring the result of the poll. The result of the poll will be
deemed to be the decision of the meeting at which the poll was
demanded.
12.9 In the case of an equality of votes, whether on a show of hands or on
a poll, the chairman will not be entitled to a casting vote in
addition to any other vote he may have.
12.10 A poll demanded on the election of a chairman or on a question of
adjournment must be taken immediately. A poll demanded on any other
question must be taken either immediately or at a time and place
directed by the chairman which may not be more than thirty (30) days
after the poll is demanded. The demand for a poll will not prevent
the meeting continuing for the transaction of any business other than
a question on which the poll was demanded. If a poll is demanded
before the declaration of the result of a show of hands and the demand
is duly withdrawn with the consent of the chairman, the meeting will
continue as if the demand had not been made. No notice need be given
of a poll not taken immediately if the time and place at which it is
to be taken are announced at the meeting at which it is demanded. In
any other case at least seven (7) clear days notice must be given
specifying the time and place at which the poll is to be taken.
12.11 A resolution in writing signed by all the members of the Company
entitled to attend and vote at a general meeting, or by their duly
appointed proxies or attorneys, will, subject to the provisions of the
Act, be as valid and effective as if it had been passed at a general
meeting of the Company properly convened and held whether such
resolution would otherwise be required to be passed as a special,
extraordinary or elective resolution. Any such resolution may be
contained in one document, or in several documents in the same terms,
each signed by one or more of the members or their proxies, or
attorneys. Signature of documents sent by facsimile will be valid and
acceptable under this paragraph. Signature in the case of a corporate
member will be sufficient if made by a director of such member or by
its duly authorised representative.
12.12 A special or extraordinary resolution shall be effective for any
purpose for which an ordinary resolution is expressed to be required
under any provision of these Articles.
VOTES
13.1 Subject to any rights or restrictions attached to any shares, on a
show of hands every member present in person or by proxy, or (if a
corporation) present by a representative duly authorised in accordance
with the Act, will have one vote, and on a poll every member will have
one vote for every share of which he is the holder and every share in
respect of which he is
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the duly appointed proxy or corporate representative provided always
that, for so long as the Equity Interests of the VJN Holder(s) and the
TM Holder(s) are equal, on any vote for the appointment, removal or
replacement of a VJN Director each Ordinary Share held by the VJN
Holder shall carry three votes and on any vote for the appointment
removal or replacement of a TM Director each Ordinary Share held by
the TM Holder shall carry three votes.
13.2 No member will be entitled to vote at any general meeting, or at any
separate meeting of the holders of any class, unless all calls or
other sums presently payable by him in respect of shares of the
Company have been paid.
13.3 On a poll, votes may be given either personally or by proxy or by
corporate representative. A member may appoint more than one proxy
and a corporate member may appoint more than one representative to
attend on the same occasion.
13.4 An instrument appointing a proxy must be in writing, executed by or on
behalf of the appointor (if a corporation, under the hand of a duly
authorised officer of the corporation) and be in a form determined by
the Directors or, failing such determination, in any usual form.
13.5 The instrument appointing a proxy and any authority under which it is
executed, or a copy of that authority certified notarially, or in some
other way approved by the Directors may:
(a) be deposited at the Office, or at another place within the
United Kingdom specified by the notice convening the meeting,
or in any instrument of proxy sent out by the Company in
relation to the meeting before the time for holding the
meeting or adjourned meeting at which the person named in the
instrument proposes to vote; or
(b) in the case of a poll be deposited before the time appointed
for the taking of the poll;
and an instrument of proxy which is not deposited or delivered in the
manner permitted above will be invalid.
13.6 In the case of joint holders, the vote of the senior who tenders a
vote, whether in person or by proxy, will be accepted to the exclusion
of the votes of the other joint holders; and seniority will be
determined by the order in which the names of the holders stand in the
Register.
13.7 A member in respect of whom an order has been made by any court having
jurisdiction (whether in the United Kingdom or elsewhere) in
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matters concerning mental disorder may vote, whether on a show of
hands or on a poll, by his receiver, curator bonis or other person
authorised in that behalf appointed by that court, and any such
receiver, curator bonis or other person may, on a poll, vote by proxy.
Evidence to the satisfaction of the Directors of the authority of the
person claiming to exercise the right to vote shall be deposited at
the Office, or at such other place as is specified in accordance with
these Articles for the deposit of instruments of proxy, not less than
forty-eight (48) hours before the time appointed for holding the
meeting or adjourned meeting at which the right to vote is to be
exercised and in default the right to vote shall not be exercisable.
13.8 No objection shall be raised to the qualification of any voter except
at the meeting or adjourned meeting at which the vote objected to is
tendered, and every vote not disallowed at the meeting shall be valid.
Any objection made in due time shall be referred to the chairman whose
decision shall be final and conclusive.
13.9 A vote given or poll demanded by proxy or by the duly authorised
representative of a corporation shall be valid notwithstanding the
previous determination of the authority of the person voting or
demanding a poll unless notice of the determination was received by
the Company at the Office or at such other place at which the
instrument of proxy was duly deposited before the commencement of the
meeting or adjourned meeting at which the vote is given or the poll
demanded or (in the case of a poll taken otherwise than on the same
day as the meeting or adjourned meeting) the time appointed for taking
the poll.
DIRECTORS
14.1 The minimum number of Directors will be four (4) and the maximum
number five (5) of whom two (2) will be VJN Directors, two (2) will be
TM Directors and the fifth (if any) the Non-Shareholder Director.
14.2 The Shareholder Directors may subject to paragraph 14.1 at any time
and from time to time jointly appoint the Non-Shareholder Director.
The Non-Sharholder Director shall have no right to vote at or to be
counted in the quorum of meetings of the Directors or in any committee
thereof. The Shareholder Directors may remove or replace such
Non-Shareholder Director at any time and any appointment, removal or
replacement shall be made by notice in writing signed by all the
Shareholder Directors and shall take effect when such notice is lodged
at the Office, or received by the Secretary, or produced to a meeting
of the Directors or at such time and on such date as the notice may
specify.
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POWERS OF DIRECTORS
15.1 Subject to the provisions of the Act, the memorandum of association of
the Company and these Articles and to any directions given by special
resolution, the business of the Company will be managed by the
Directors who may exercise all the powers of the Company. No
alteration of such memorandum or these Articles and no such direction
will invalidate any prior act of the Directors which would have been
valid if that alteration had not been made or that direction had not
been given. A meeting of Directors at which a quorum is present may
exercise all powers exercisable by the Directors.
15.2 The Directors may, by power of attorney or otherwise, appoint any
person to be the agent of the Company for any purposes and on any
conditions as they determine, including authority for the agent to
delegate all or any of his powers.
15.3 The Directors may establish and maintain, or procure the establishment
and maintenance of, any pension or superannuation funds (whether
contributory or otherwise) for the benefit of, and give or procure the
giving of donations, gratuities, pensions, allowances and emoluments
to, any persons (including Directors and other officers) who are or
were at any time in the employment or service of the Company, or of
any company which is or was a Subsidiary of the Company or allied to
or associated with the Company or any such Subsidiary, or of any such
other company as aforesaid, and the spouses, widows, widowers,
families and dependants of any such persons, and make payments to for
or towards the insurance of or provide benefits otherwise for any such
persons as stated above.
DELEGATION OF DIRECTORS' POWERS
16. The Directors may delegate any of their powers to any committee
consisting of at least one VJN Director and at least one TM Director.
They may also delegate to any Director holding any executive office
any of their powers as they consider desirable to be exercised by him.
Any such delegation may be made subject to any conditions the
Directors may impose and may be revoked or altered. Subject to any
such conditions, the proceedings of a committee with two or more
members shall be governed by these Articles regulating the proceedings
of Directors so far as they are capable of applying.
DISQUALIFICATION AND REMOVAL OF DIRECTORS
17.1 The office of a Director must be vacated in any of the following
events namely:
(a) if, by notice in writing to the Company, he resigns his
office;
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(b) if he becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) if he is, or may be, suffering from mental disorder and
either:
(i) becomes incapable of discharging his duties as a
Director;
(ii) he is admitted to hospital in pursuance of an
application for admission for treatment under the
Mental Health Act 1983 or, in Scotland, an
application for admission under the Mental Health
(Scotland) Act 1960; or
(iii) an order is made by a Court having jurisdiction
(whether in the United Kingdom or elsewhere) in
matters concerning mental disorder for his detention
or for the appointment of a receiver, curator bonis
or other person to exercise powers with respect
to his property or affairs.
(d) if he ceases to be a Director by virtue of any provision of
the Act or he becomes prohibited by law from being a
Director;
(e) if his wilful conduct is in the good faith determination of
all the Shareholder Directors (exclusive of the Director who
is the subject of the removal action as the case may be) is
significantly injurious or detrimental to the Company
monetarily or otherwise;
(f) if he is convicted of or pleads guilty to, or in proceedings
in the United States of America makes a plea of nolo
contendere to, any criminal offence including dishonesty or
moral depravity;
(g) if he makes habitual use of illegal drugs or other controlled
substances or is habitually intoxicated.
17.2 No Director will vacate his office or become ineligible for
appointment or re-appointment as a Director by reason only of his
having attained any particular age, nor will special notice be
required of any resolution appointing or approving the appointment of
such a Director or any notice be required to state the age of the
person to whom such resolution relates.
REMUNERATION OF DIRECTORS
18. The Directors shall be entitled to such remuneration as the Company
may by ordinary resolution determine and, unless the resolution
provides otherwise, the remuneration shall be deemed to accrue from
day to day.
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DIRECTORS' EXPENSES
19. The Directors may be paid all reasonable travelling, hotel, and other
expenses properly incurred by them in connection with their attendance
at meetings of Directors or committees of Directors or general
meetings or separate meetings of the holders of any class of shares or
of debentures of the company or otherwise in connection with the
discharge of their duties.
DIRECTOR APPOINTMENTS AND INTERESTS
20.1 The Directors may from time to time appoint one or more of the
Directors to be Managing Director or to hold such other office in the
management, administration or conduct of the business of the Company
for any period (subject to Section 319 of the Act) and on such terms
as they think fit, and, subject to the terms of any agreement entered
into in any particular case, may revoke that appointment. Subject to
the terms of any such agreement, a Managing Director or a Director
appointed to any other office as aforesaid shall be subject to the
same provisions as to resignation and removal as the other Directors
and will automatically and immediately cease to be Managing Director
or to hold such other office in the management, administration or
conduct of the business of the Company if he ceases to hold the office
of Director for any reason but without prejudice to any claim for
damages for breach of the contract of service between the Director and
the Company.
20.2 The remuneration of a Managing Director or any Director who may be
appointed to any other office in the management, administration or
conduct of the business of the Company will from time to time (subject
to the provisions of any agreement between him and the Company) be
fixed by the Directors. It may comprise fixed salary, or commission
on the dividends, profits, sales or turnover of the Company, or of any
other company in the same Group as the Company, or other participation
in any such profits, or by way of or provision for a pension or
pensions for himself or his dependants, or by all or any of these
modes, and (subject as stated above) the remuneration fixed will be
additional to any ordinary remuneration to which he may entitled as a
Director.
20.3 Subject to the provisions of the Act, and provided that he has
disclosed to the Directors in advance the nature and extent of any
interest of his, a Director despite his office:
(a) may be a party to, or otherwise interested in, any
transaction or arrangement with the Company or in which the
Company is otherwise interested;
(b) may be a Director or other officer of, or employed by, or a
party to any transaction or arrangement with or otherwise
interested in
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any body corporate promoted by the Company, in the same Group
as the Company or in which the Company is otherwise
interested; and
(c) will not as a consequence of his office be held accountable
to the Company for any benefit which he derives from any such
office or employment, or from any such transaction or
arrangement, or from any interest in such body corporate; and
no such transaction or arrangement may be avoided on the
ground of any such interest or benefit.
20.4 For the purposes of paragraph 20.3 above:
(a) a general notice given to the Directors by a Director, that
he has an interest of a specified nature and extent in any
transaction or arrangement in which a specified person or
class of persons is interested will be deemed to be a
disclosure that the Director has an interest in any such
transaction of the nature and extent so specified; and
(b) an interest of which a Director has no knowledge and of which
it is unreasonable to expect him to have knowledge shall not
be treated as an interest of his.
PROCEEDINGS OF DIRECTORS
21.1 Subject to the provisions of these Articles, the Directors may
regulate their proceedings as they think fit. A Director may, and the
Secretary at the request of a Director will, call a meeting of the
Directors. Questions arising at a meeting will be decided and no
resolution shall be carried unless a majority of the Shareholder
Directors vote in favour and the same shall apply to all decisions of
any committee of the Directors unless all the Shareholder Directors
shall have previously agreed otherwise in writing. In the case of an
equality of votes, the chairman will not have a second or casting
vote. A Director who is also an alternate director will be entitled
in the absence of his appointor to a separate vote on behalf of his
appointor in addition to his own vote.
21.2 Notice of the time, place and purpose of every meeting of the
Directors must be given to every Director including any Director for
the time being outside the United Kingdom. Unless at least one VJN
Director and at least one TM Director agree in writing to accept
shorter notice of a meeting of Directors, at least 96 hours advance
notice must be given. Every notice of a meeting of the Directors and
all meetings of Committees of the Board required to be given under
these Articles must be in writing served either personally or by
sending a copy thereof by reputable overnight courier or air mail
(postage charges prepaid), or by telecopier (with confirmation of
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receipt acknowledged by the addressee) to the address appearing on the
books of the Company or otherwise supplied to the Company by a
Director or a Committee member in writing. Notices pursuant to this
Article 21.2 shall be deemed given upon personal delivery, two
Business Days following deposit with a reputable overnight courier,
four Business Days following deposit with the postal service in the
case of express mail and upon confirmation of receipt in the case of a
telecopy.
21.3 The quorum necessary for the transaction of the business of the
Directors will be all the Shareholder Directors. An alternate
director who is not himself a Director will, if his appointor is not
present, be counted towards the quorum.
21.4 The continuing Directors or a sole continuing Director may act despite
any vacancies in their number. However, if the number of Directors is
less than the number fixed as the quorum, they or he may act only for
the purpose of calling a general meeting.
21.5 A meeting of the Directors may, subject to notice of it having been
given or dispensed with in accordance with these Articles, be for all
purposes deemed to be held when a Director is, or Directors are, in
communication by telephone, television or some other audio visual
medium with another Director or other Directors and all of those
Directors agree to treat the meeting as properly held, provided always
that the number of the said Directors participating in the
communication constitutes a quorum of the board of Directors as
stipulated by these Articles. A resolution made by a majority of the
said Directors in pursuance of this paragraph 21.5 will be as valid as
it would have been if made by them at an actual meeting duly convened
and held.
21.6 A resolution in writing signed or approved by all the Shareholder
Directors by letter or confirmed facsimile will be as valid and
effective as if it had been passed at a meeting of Directors, or (as
the case may be), a committee of Directors duly convened and held.
The resolution may consist of several documents in the same terms each
signed by one or more Shareholder Directors; but a resolution signed
by an alternate director need not also be signed by his appointor and,
if it is signed by a Director who has appointed an alternate director,
it need not be signed by the alternate director in that capacity.
21.7 All acts done by a meeting of Directors, or of a committee of
Directors, or by a person acting as a Director will, despite that it
is afterwards discovered that there was a defect in the appointment of
any Director or that any of them had vacated office, be as valid as if
every such person had been duly appointed and was qualified and had
continued to be a Director.
21.8 A Director who is in any way either directly or indirectly interested
in a
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contract or arrangement, or proposed contract or arrangement, with the
Company will, provided he has declared such interest in accordance
with paragraph 20.4 above, be entitled to vote in respect of any
contract or arrangement in which he is interested and if he does so,
his vote will be counted and he may be taken into account in
ascertaining whether a quorum is present.
21.9 A Shareholder Director may provide to the member which appointed him
any information which he receives by virtue of his being a Director
for the purpose only of enabling the relevant Shareholder(s) to be
duly informed in order to take action or make a decision relating to
the Company.
ALTERNATE DIRECTORS
22.1 Any Director (other than an alternate director) shall have the power
to appoint any person (including any other Director) to act as an
alternate and at their discretion may remove such alternate
director(s). An alternate director will have the same entitlement as
his appointor to receive notices of meetings of the Directors and to
attend, vote and be counted for the purpose of a quorum of any meeting
at which his appointor is not personally present and generally in the
absence of the Director he is replacing to exercise and discharge all
the functions powers and duties of the Director he is replacing. Any
Director acting as an alternate shall have an additional vote for
every Director for whom he acts as alternate.
22.2 Every appointment and removal of an alternate director pursuant to
paragraph 22.1 will be effected by notice in writing on the same terms
as set out in paragraph 14.2.
22.3 Except as otherwise provided in these Articles, an alternate director
will, during his appointment, be deemed to be a Director for the
purposes of these Articles, He will not be deemed to be an agent of
his appointor and will alone be responsible to the Company for his own
acts or defaults and will be entitled to be indemnified by the Company
to the same extent as if he were a Director.
22.4 An alternate director shall not in respect of his office of alternate
director, be entitled to receive any remuneration from the Company nor
to appoint another person as his alternate. The appointment of an
alternate director will automatically determine if his appointor
ceases for any reason to be a Director or on the happening of an event
which, if he were a Director, would cause him to vacate the office of
Director, or if by written notice to the Company he resigns his
appointment.
SECRETARY
23. Subject to the provisions of the Act, the Secretary shall be appointed
by the
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Directors for such term, at such remuneration and upon such conditions
as they may think fit and the Secretary may be removed by the
Directors.
MINUTES
24. The Directors shall cause minutes to be made in books kept for the
purpose:
(a) of all appointments of officers made by the Directors; and
(b) of all proceedings at meetings of the Company, of the holders
of any class of shares in the Company, and of the Directors,
and of committees of Directors, including the names of the
Directors present at each such meeting.
THE SEAL
25. (a) The Seal shall only be used by the authority of the Directors
or of a committee of Directors authorised by the Directors.
The Directors may determine who shall sign any instrument to
which the Seal is affixed and unless otherwise so determined
it shall be signed by a Director and by the Secretary or by a
second Director;
(b) where the Act so permits, any instrument so signed, with the
authority of a resolution of the Directors or of a committee
of the Directors, by one Director and the Secretary or by two
Directors and expressed to be executed by the Company as a
deed shall have the same effect as if executed under the
Seal, provided that no instrument which makes it clear on its
face that it is intended by the persons making it to have
effect as a deed shall be signed without the authority of the
Directors; and
(c) a document which is executed by the Company as a deed shall
not be deemed to be delivered by the Company solely as a
result of its having been executed by the Company.
DIVIDENDS
26.1 Subject to the provisions of the Act, the Company may by ordinary
resolution declare dividends in accordance with the respective rights
of the members, but no dividend shall exceed the amount recommended by
the Directors.
26.2 Subject to the provisions of the Act, the Directors may pay interim
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dividends if it appears to them that they are justified by the profits
of the Company available for distribution. If the share capital is
divided into different classes, the Directors may pay interim
dividends on shares which confer deferred or non-preferred rights with
regard to dividend as well as on shares which confer preferential
rights with regard to dividend, but no interim dividend shall be paid
on shares carrying deferred or non-preferred rights if, at the time of
payment, any preferential dividend is in arrear. The Directors may
also pay at intervals settled by them any dividend payable at a fixed
rate if it appears to them that the profits available for distribution
justify the payment. Provided the Directors act in good faith they
shall not incur any liability to the holders of shares conferring
preferred rights for any loss they may suffer by the lawful payment of
an interim dividend on any shares having deferred or non-preferred
rights.
26.3 Except as otherwise provided by the rights attached to shares, all
dividends shall be declared and paid according to the amounts paid up
on the shares on which the dividend is paid. All dividends shall be
apportioned and paid proportionately to the amounts paid up on the
shares during any portion or portions of the period in respect of
which the dividend is paid; but, if any share is issued on terms
providing that it shall rank for dividend as from a particular date,
that share shall rank for dividend accordingly. The person entitled
to any dividend will be the holder of the share upon the date
determined by the resolution declaring the dividend (or in the case of
any interim dividend, determined by the Directors) in respect of that
share.
26.4 A general meeting declaring a dividend may, upon the recommendation of
the Directors, direct that it shall be satisfied wholly or partly by
the distribution of assets and, where any difficulty arises in regard
to the distribution, the Directors may settle the same and in
particular may issue fractional certificates and fix the value for
distribution of any assets and may determine that cash shall be paid
to any member upon the footing of the value so fixed in order to
adjust the rights of members and may vest any assets in trustees.
26.5 Any dividend or other moneys payable in respect of a share may be paid
by cheque sent by post to the registered address of the person
entitled or, if two or more persons are the holders of the share or
are jointly entitled to it by reason of the death or bankruptcy of the
holder, to the registered address of that one of those persons who is
first named in the Register or to such person and to such address as
the person or persons entitled may in writing direct. Every cheque
shall be made payable to the order of the person or persons entitled
or to such other person as the person or persons entitled may in
writing direct and payment of the cheque shall be a good discharge to
the Company. Any joint holder or other person jointly entitled to a
share as aforesaid may give receipts for any dividend or other moneys
payable in respect of the share.
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26.6 No dividend or other moneys payable in respect of a share shall bear
interest against the Company unless otherwise provided by the rights
attached to the share.
26.7 Any dividend which has remained unclaimed for twelve years from the
date when it became due for payment shall, if the Directors so
resolve, be forfeited and cease to remain owing by the company.
ACCOUNTS
27. No member shall (as such) have any right of inspecting any accounting
records or other book or document of the company except as conferred
by statute or authorised by the Directors or by ordinary resolution of
the Company.
CAPITALISATION OF PROFITS
28.1 The Directors may with the authority of an ordinary resolution of the
Company:
(a) subject as hereinafter provided, resolve to capitalise any
undivided profits of the Company not required for paying any
preferential dividend (whether or not they are available for
distribution) or any sum standing to the credit of the
Company's share premium account or capital redemption
reserve;
(b) appropriate the sum resolved to be capitalised to the members
who would have been entitled to it if it were distributed by
way of dividend and in the same proportions and apply such
sum on their behalf either in or towards paying up the
amounts, if any, for the time being unpaid on any shares held
by them respectively, or in paying up in full unissued shares
or debentures of the Company of a nominal amount equal to
that sum, and allot the shares or debentures credited as
fully paid to those members, or as they may direct, in those
proportions, or partly in one way and partly in the other:
but the share premium account, the capital redemption
reserve, and any profits which are not available for
distribution may, for the purposes of this regulation, only
be applied in paying up unissued shares to be allotted to
members credited as fully paid;
(c) make such provision by the issue of fractional certificates
or by payment in cash or otherwise as they determine in the
case of shares or debentures become distributable under this
regulation in fractions; and
(d) authorise any person to enter on behalf of all the members
(26)
<PAGE> 76
concerned into an agreement with the company providing for
the allotment to them respectively, credited as fully paid,
of any shares or debentures to which they are entitled upon
such capitalisation, any agreement made under such authority
being binding on all such members.
28.2 The Directors may deduct from any dividend payable on or in respect of
a share all sums of money presently payable by the holder to the
Company on any account whatsoever.
NOTICES
29.1 Any and all notices or other communications to be given by the Company
hereunder shall be in writing and shall be considered duly given upon
the earliest to occur of
(a) personal delivery;
(b) three days after being sent by a reputable international
overnight courier service;
(c) seven days after being mailed by registered or certified
international or air mail, return receipt requested or
recorded (as the case may be), postage prepaid; or
(d) the delivering party's receipt of a written confirmation of a
facsimile transmission.
All notices shall be addressed to the Company at its registered office
and to the members at the addresses supplied by them to the Company.
A member or Director giving to the Company an address outside the
United Kingdom will be entitled to receive all notices by reputable
international overnight courier or (at the Company's option) confirmed
facsimile.
29.2 In the case of joint holders of a share, all notices will be given to
the joint holder whose name stands first in the Register in respect of
the joint holding, and notice so given will be sufficient notice to
all the joint holders.
29.3 Except as otherwise provided in these Articles, all notices to be
given pursuant to these Articles other than one calling a meeting of
the Directors must be in writing.
29.4 A member present, either in person or by proxy, at any meeting of the
Company or of the holders of any class of shares in the Company shall
be deemed to have received notice of the meeting and, where requisite,
of the
(27)
<PAGE> 77
purposes for which it was called.
29.5 Every person who becomes entitled to a share shall be bound by any
notice in respect of that share which, before his name is entered into
the Register, has been duly given to a person from whom he derives his
title.
29.6 A notice may be given by the Company to the persons entitled to a
share in consequence of the death or bankruptcy of a member by sending
or delivering it, in any manner authorised by these Articles for the
giving of notice to a member, addressed to them by name, or by the
title of representatives of the deceased, or trustee or the bankrupt
or by any like description at the address, if any, within the United
Kingdom supplied for that purpose by the persons claiming to be so
entitled. Until such an address has been supplied, a notice may be
given in any manner in which it might have been given if the death or
bankruptcy had not occurred.
WINDING UP
30. If the Company is wound up, the liquidator may, with the sanction of
an extraordinary resolution of the Company and any other sanction
required by the Act, divide among the members in specie the whole or
any part of the assets of the Company and may, for that purpose, value
any assets and determine how the division shall be carried out as
between the members of different classes of members. The liquidator
may, with the like sanction, vest the whole or any part of the assets
in trustees upon such trusts for the benefit of the members as he with
the like sanction determines, but no member shall be compelled to
accept any assets upon which there is a liability.
INDEMNITY
31.1 Subject to the provisions of Section 310 of the Act, but without
prejudice to any indemnity to which a Director may otherwise be
entitled, every Director, agent, Secretary and other officer of the
Company will be entitled to be indemnified out of the assets of the
Company against all losses or liabilities properly incurred by him in
or about the execution and discharge of the duties of his office
(including any liability incurred by him in defending any proceedings
whether civil or criminal, in which judgement is given in his favour
or in which he is acquitted or in connection with any application in
which relief is granted to him by the court from liability for
negligence, default, breach of duty or breach of trust in relation to
the affairs of the Company).
31.2 The Directors may at their discretion and on such terms as they think
fit purchase and maintain for the Company or for any Director,
Secretary or other manager or officer other than auditor of the
Company insurance against any liability which might by virtue of any
rule of law attach to such
(28)
<PAGE> 78
Director, Secretary, or other manager or officer in relation to any
negligence, default, breach of duty or breach of trust in relation to
the Company or its business or affairs or to any Subsidiary and
against such liability as mentioned in the preceding sub-paragraph.
(29)
<PAGE> 79
EXHIBIT "L"
Dated June 30, 1995
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
and
VINCENT PAUL MONSEY
EMPLOYMENT AGREEMENT
<PAGE> 80
INDEX
(For reference purposes only)
- --------------------------------------------------------------------------------
Clauses
- -------
1. Definitions and Interpretation
2. Appointment and Notice Period
3. Duties
4. Salary and Other Benefits
5. Holidays
6. Illness/Incapacity
7. Pension Benefits
8. Restrictive Covenants
9. Delivery up of Documents
10. Patents
11. Termination of Agreement
12. Automatic Resignation as Director and/or Officer
13. Directorship
14. Amalgamation/Reconstruction
15. Disciplinary Rules
16. Redress of Grievances
17. Index of Particulars
18. Entire Agreement
19. Notices
20. Governing Law
21. Counterparts
Schedule
- --------
Job Description
<PAGE> 81
THIS AGREEMENT is made June 30, 1995
BETWEEN:
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED whose registered office is
at Imperial House, 11-13 Young Street, Kensington, London W8 5EH (the
"Company").
(2) VINCENT PAUL MONSEY of 48 Holland Villas Road, London W14 (the
"Employee").
WHEREAS:
(A) The Employee commenced his employment on March 4, 1992 which is the
date of commencement of his continuous employment for the purposes of
the Employment Protection (Consolidation) Act of 1978.
(B) The parties wish to confirm in writing the terms of the continued
engagement of the Employee as an employee and non-voting director,
with the title of Managing Director of the Company.
(C) This Agreement shall supersede, in its entirety, that certain
Director's Service Agreement, dated March 4, 1992, between the
Employee and the Company on the date that the Company, Video Jukebox
Network, Inc. and TM No.2 Limited consummate the transactions
contemplated by that certain Stock Purchase Agreement dated as of the
date hereof.
IT IS HEREBY AGREED:
1. DEFINITION AND INTERPRETATION
1.1 In this Agreement the following words and expressions shall
(except where the context otherwise requires) have the
following meaning:
<TABLE>
<S> <C>
Board the board of directors of the Company as comprised from time to time
Companies Acts the Companies Act 1985 and the Companies Act 1989
letters patent or patent includes letters patent, brevet d'invention, petty patent, gebrauschmuster,
utility model, design registration or any other form of protection for any
invention discovery or improvement that can be obtained in the United Kingdom
or any British Dominion Colony or Dependency or in any foreign country.
Termination Date the date upon which the Employee's employment hereunder is terminated
</TABLE>
(3)
<PAGE> 82
<TABLE>
<S> <C>
TicketMaster TM No.2 Limited being a company registered under the laws of England and Wales
VJN Video Jukebox Network, Inc. being a company registered under the laws of the
State of Florida, USA, having document number H 75052
</TABLE>
1.2 Unless otherwise stated references to Clauses, Subclauses and
Schedules are references to Clauses and Subclauses of, and
Schedules to, this Agreement.
1.3 Clause headings are for ease of reference only and do not
affect the construction or interpretation of this Agreement.
1.4 References to persons shall include bodies corporate, limited
liability companies, trusts, governmental units,
unincorporated associations and partnerships.
1.5 References to writing shall include typewriting, printing,
lithography, photography, facsimile messages and other modes
of reproducing words in a legible and non-transitory form.
2. APPOINTMENT AND NOTICE PERIOD.
2.1 The Employee shall (subject to Subclause 2.2) be employed as
the Managing Director of the Company under the terms of this
Agreement until the earlier of (i) June 30, 1998; or (ii) such
employment being terminated in accordance with Clause 11. In
the event that this Agreement expires on June 30, 1998, the
Employee agrees that he will not be entitled to any statutory
or unfair dismissal and redundancy rights.
2.2 Instead of requiring the Employee to continue performing
duties and of the Company providing him with duties during the
period remaining under this Agreement (the "Remaining
Period"), the Company may, at its sole discretion, require the
Employee not to attend for work during the Remaining Period.
In such event, the Company shall continue to provide the
Employee with his salary (as set forth in Clause 4.1) and
benefits for the Remaining Period. The Employee shall not,
however, be entitled to any bonus which has not been earned
under Clause 4.5. Nevertheless, the Employee shall have the
right (subject to the restrictions contained in Clause 8) to
seek employment elsewhere, but if and when the Employee
commences employment elsewhere: (i) the Agreement shall be
terminated; and (ii) the Employee shall not be entitled to any
further salary payments or contractual benefits hereunder.
2.3 Notwithstanding the above, instead of requiring the Employee
to continue performing duties and of the Company providing him
with duties during the Remaining Period, the Company may, at
its sole discretion, terminate the Agreement and give him a
payment of salary and other contractual benefits (save for any
bonus which has not been earned under Clause 4.5),
(4)
<PAGE> 83
calculated as of the date of termination, in lieu of the whole
of the Remaining Period.
3. DUTIES
3.1 During his appointment the Employee shall (unless prevented by
accident or ill health or unless otherwise agreed by the Board
in writing) devote the whole of his time and attention to the
business of the Company as the Board may reasonably require
and shall at all times use his best endeavors to promote the
interest and welfare of the Company. The Company does not
make payments for overtime working to persons working at the
level of position of the Employee and the Employee shall be
required to work such hours as may be reasonably necessary in
order properly to perform his duties under this Agreement.
3.2 The Employee shall exercise and perform such powers and duties
in relation to the Company as the Board may from time to time
reasonably direct, being duties appropriate to the Employee's
status, qualifications and experience, and subject to such
restrictions as the Board may from time to time reasonably
impose (which the Employee shall duly and faithfully perform
and observe), and in particular his duties shall be as set out
in the Schedule attached hereto.
3.3 The Employee acknowledges that Ticketmaster will be providing
administrative services to the Company pursuant to the terms
of that certain Administrative Services Agreement, dated as of
the date hereof, and the Employee agrees, subject to the terms
hereof, to fully cooperate with Ticketmaster in connection
therewith.
3.4 The Employee's usual place of work shall be the Company's head
office in London. The Employee may be required to travel to
(but not to live in) places within Europe and the United
States as the Board may reasonably require and the Company
shall, upon production of valid receipts, meet the reasonable
expenses of the Employee wholly, exclusively and properly
incurred when travelling away from the Company's head office.
In the normal course of business, it is not envisaged that any
periods abroad will exceed one month.
3.5 The Employee warrants to the Company that by entering into
this Agreement he will not be in breach of any obligations to
any third party.
4. SALARY AND OTHER BENEFITS
4.1 The Employee shall be entitled to an annual salary at the rate
of:
<TABLE>
<CAPTION>
Amount Contract Year
------ -------------
<S> <C>
L.90,000 One
L.95,000 Two
L.100,000 Three
</TABLE>
(5)
<PAGE> 84
The salary shall be payable every two weeks in arrears on the
last day of each such period, or at such other time as the
Board shall determine shall be reasonable for a person of the
Employee's standing. The Employee's salary hereunder shall
accrue on a daily basis.
4.2 The Employee shall be entitled to be reimbursed by the Company
for all out of pocket expenses which are wholly, exclusively
and properly incurred in the performance of his duties
hereunder, so long as the Employee provides the Company with
vouchers or other evidence of actual payment of such expenses,
including supporting documentation required under applicable
tax laws.
4.3 The Company undertakes that during the continuance of the
Employee's employment hereunder it shall:
4.3.1 maintain the Employee's membership of such private
health insurance scheme as the Company may from time
to time determine at London Teaching Hospital Rate
benefit levels;
4.3.2 reimburse the Employee for the costs of taking out
such insurance as the Board shall reasonably
determine to be necessary to cover the Employee for
all private medical expenses incurred by him at any
time whilst visiting the rest of the world on
business for the Company.
4.3.3 pay the cost of maintaining permanent health
insurance (the "Permanent Health Insurance") for the
Employee, at benefit levels and pursuant to
commercial terms, which are standard for an executive
of the Employee's standing;
4.3.4 pay the Employee L.400 per month as an allowance for
leasing a car.
4.4 The Employee shall be entitled to receive such additional
benefits as the Board in its absolute discretion shall from
time to time determine.
4.5 The Employee shall be entitled to the following annual bonus,
based on the PBITDA (profits before interest, tax,
depreciation and amortization) of the Company, as set forth in
audited unconsolidated Company financial statements for the
prior fiscal year, prepared in accordance with good and
accepted UK accounting practice and complying with all current
Financial Reporting Standards. Such bonus, if earned, shall
be payable to the Employee within 7 days of the preparation of
Company audited financial statements for the fiscal year in
question. The bonus shall be calculated as follows:
(6)
<PAGE> 85
<TABLE>
<CAPTION>
PBITDA of Company Bonus
----------------- -----
<S> <C>
Greater than L.500,000 10% of prior year's salary
Greater than L.1,000,000 20% of prior year's salary
Greater than L.1,250,000 22.5% of prior year's salary
Greater than L.1,500,000 25% of prior year's salary
</TABLE>
The first bonus, if any, shall be based on the Company's
financial statement for the 1995 fiscal year. The Company
undertakes to use reasonable efforts to have audited
unconsolidated financial statements of the Company prepared as
soon as practicably possible and to render all reasonable
assistance without delay, as and when required, in the
preparation thereof. The Employee shall only be deemed to
have earned a bonus for a particular fiscal year if he was
employed by the Company, pursuant to this Agreement, for the
entire fiscal year in question.
4.6 The Employee hereby agrees that at any time during his term of
employment under this Agreement, and on termination of his
employment, the Company shall be entitled to deduct from any
sums due to the Employee hereunder any outstanding monies then
owed by the Employee to the Company including, but not limited
to, all outstanding loans made by the Company to the Employee
which were paid in excess of his entitlement, pay received for
holiday taken in excess of the Employee's pro rata holiday,
entitlement sums paid on behalf of the Employee by the Company
which have not been incurred by the Employee in the proper
performance of his duties, and any fines incurred by the
Employee and paid by the Company.
5. HOLIDAYS
5.1 The Employee shall be entitled, in addition to statutory and
other public holidays, to take the following number of working
days' holiday at such time or times as he may agree with the
Board:
<TABLE>
<CAPTION>
Amount Contract Year
------ -------------
<S> <C>
25 working days One
25 working days Two
25 working days Three
</TABLE>
The Employee may also take such additional or special holidays
(if any) as the Board may from time to time approve.
5.2 The Employee shall not be entitled to carry forward any
holiday entitlement not used in each calendar year, without
obtaining the prior consent of the Board, which consent shall
not be unreasonably withheld or delayed.
(7)
<PAGE> 86
5.3 In the respective years in which the employment commences or
terminates, the Employee's entitlement to holiday shall accrue
on a pro rata basis for each month of service during the
relevant year.
5.4 If, upon the termination of the employment, the Employee has
exceeded his accrued holiday entitlement, the excess shall be
deducted from any sums due to him. If the Employee has any
unused holiday entitlement, the Company shall make payment in
lieu thereof. One day's holiday pay will be calculated at
1/260th of the then current annual rate.
6. ILLNESS/INCAPACITY
6.1 If the Employee shall be prevented by illness or other
incapacity (verified by a registered medical practitioner)
from duly attending to his duties the Company shall continue
to pay his full salary (as set forth in Clause 4.1) and
benefits until the expiry of a period of 90 working days (the
"Ninety Day Period") absence (whether consecutive or not) in
any period of 12 months, and thereafter, for as long as the
appointment remains in effect, shall pay to the Employee any
sums received by the Company pursuant to the Permanent Health
Insurance (subject to such reductions as are required by law).
The Company can give no assurance that any claim made in
respect of the Permanent Health Insurance will be accepted and
no liability will attach to the Company if any claim is
rejected in whole or in part. Nevertheless, the Company shall
use reasonable endeavors to obtain payment for the Employee
under the Permanent Health Insurance.
6.2 If any claim made in respect of the Employee under the
Permanent Health Insurance is accepted in whole, or in part:
6.2.1 the Company shall immediately, upon such acceptance,
cease to be under any obligation to pay any amount or
to provide any benefits to the Employee other than
those provided under the terms of the Permanent
Health Insurance at the date of the Employee's claim;
and
6.2.2 the Company shall automatically become entitled to
appoint a successor to the Employee to perform all or
any of his duties and Clause 3 will be amended
accordingly.
Notwithstanding the above, in the event that a claim under the
Permanent Health Insurance is accepted prior to the end of the
Ninety Day Period, the Company shall not be able to exercise
its rights under Clauses 6.2.1 and 6.2.2 until the end of the
Ninety Day Period.
6.3 The Company shall set off the Employee's remuneration paid in
accordance with this Clause against the liability of the
Company to pay Statutory Sick Pay to the Employee under the
Statutory Sick Pay Scheme or National Insurance Scheme for the
time being in force. The Company may also deduct from the
Employee's remuneration the amount of any other state benefits
to which the Employee shall be entitled (whether
(8)
<PAGE> 87
claimed or not) and the Employee shall inform the Company
concerning such payments.
6.4 For the purposes of calculation of Statutory Sick Pay the days
on which the Employee could qualify for payments are Monday,
Tuesday, Wednesday, Thursday and Friday. Further details of
the Statutory Sick Pay Scheme and the requirements of the
Company with regard to the provision of medical certificates
can be obtained from the Board, upon request.
6.5 If any incapacity shall be, or appear to be, occasioned by
actionable negligence of a third party, in respect of which
damages are or may be recoverable, the Employee shall
forthwith notify the Board of that fact and of any claim,
compromise, settlement or judgment made or awarded in
connection therewith and shall give to the Board all such
particulars of such matters as the Board may reasonably
require. The Employee shall take all necessary and reasonable
action to recover damages from any such negligent third party.
Except as hereafter provided, all sums paid to the Employee
during any such period of incapacity shall be paid by way of
loan only and shall, if so required by the Board, be refunded
to the Company. Nevertheless, the Employee shall only be
required to refund sums from damages (if any) recovered by him
under such compromise, settlement or judgment (less any costs
which are borne by the Employee in connection with such
claim, compromise, settlement or judgment).
7. PENSION BENEFITS.
The Company does not operate a Pension Scheme in which the Employee is eligible
to participate and no contracting-out certificate is in force in respect of his
employment hereunder. Nevertheless, if and when VJN has established a pension
scheme, the Company shall use its best endeavors to organize a comparable
pension scheme under English law or, at the Employee's option, contribute to an
approved personal pension scheme of the Employee's choosing. In either event
the Company shall make an annual contribution, equivalent to 9% of the
Employee's salary from time to time, to the Employee's account under any such
scheme, or as directed by the Employee.
8. RESTRICTIVE COVENANTS
8.1 The Employee hereby agrees and confirms that during the course
of his employment by the Company prior to the date hereof he
has obtained knowledge of, and during the course of his
appointment under this Agreement, he is likely to obtain
knowledge of trade secrets and other confidential information
with regard to the business and financial affairs of the
Company, as well as its customers and suppliers details, all
of which are not in the public domain including, without
limitation, financial data, computer software and hardware,
intellectual property rights and present and future plans
("Confidential Information"). Accordingly, the Employee
hereby undertakes to and covenants with the Company that in
order to protect the interests of the Company in its goodwill
and business connections and the Confidential Information:
(9)
<PAGE> 88
8.1.1 he shall not, at any time after the Termination Date,
use or procure the use of the name of the Company,
whether or not in connection with his own or any
other name in any way calculated to suggest that he
continues to be connected with the business of the
Company or in any way hold himself out as having such
connection;
8.1.2 he shall not, at any time during the term of this
Agreement and at all times thereafter (save by
compulsion of law), use any Confidential Information
(other than for the purposes of the Company) or
disclose or divulge any Confidential Information to
any person (other than to officers or employees of
the Company whose province it is to know the same)
and that he shall, at the expense of and if requested
by the Company, use his reasonable endeavors to
prevent such use, divulgence or disclosure of any
Confidential Information by any other person;
provided that the provisions of this clause shall
cease to apply to Confidential Information which
enters the public domain other than directly or
indirectly by reason of the Employee's breach of this
Agreement;
8.1.3 he shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on his
own behalf, or on behalf of any other person,
directly or indirectly approach, canvass, solicit or
otherwise endeavor to entice away from the Company
the custom of any person who is then, or was during
the twelve (12) month period prior to the Termination
Date, a customer or supplier of the Company with whom
he had dealings within the twelve (12) month period
prior to the Termination Date, and he shall not use
his knowledge of, or influence over, any such
customer or supplier to or for his own benefit or the
benefit of any other person carrying on business in
competition with the business of the Company, or
otherwise use his knowledge or influence over any
such customer or supplier to the detriment of the
Company;
8.1.4 he shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on his
own behalf, or on behalf of any other person,
directly or indirectly approach, canvass, solicit or
otherwise endeavor to entice away any person, who is
then or was at any time during the twelve (12) month
period prior to the Termination Date, an employee of
the Company with access to Confidential Information
(save for Elizabeth Laskowski), or otherwise
encourage any such person to terminate his or his
relationship with the Company;
8.1.5 he shall not, at any time prior to the termination of
this Agreement and without the prior written consent
of the Board, be a director of any company other than
the Company, or be engaged, employed, concerned or in
any other way interested in any other business
whatsoever; and
(10)
<PAGE> 89
8.1.6 he shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on his
own behalf or on behalf of or in association with any
other person, directly or indirectly, be engaged,
concerned or interested, as an employee or in any
other capacity, in any business within the United
Kingdom in competition with the business carried on
at the Termination Date by the Company.
8.2 Each of the parties acknowledge and agree that each of the
restrictions contained in this Clause 8 are entirely separate
and independent and are reasonable and necessary for the
protection of the relevant interests. Nevertheless, if any
provision or part thereof is held invalid or unenforceable,
this shall not affect the remaining provisions, all of which
shall remain in full force and effect. Furthermore, if any
restriction would be valid if the wording were amended or the
period or scope of the restriction reduced, such restriction
shall apply with such modifications as may be necessary to
make it valid and effective.
8.3 Nothing in this Clause 8 shall prohibit the Employee from
holding shares or debentures quoted or dealt in or on a
recognized Stock Exchange in the United Kingdom or elsewhere,
so long as not more than 1 per cent of the shares or stock of
any class of any one company is so held.
8.4 The provisions of this Clause 8 shall survive the termination
of this Agreement.
9. DELIVERY UP OF DOCUMENTS
Upon the expiration or termination of this Agreement, for any reason
whatsoever, the Employee shall forthwith deliver up to the Company, or its
authorized representative, all keys, credit cards, papers, books, documents,
account records, and other materials, whether in eye readable or machine
readable form, which may be in his possession, custody or control and which are
the property of the Company or which otherwise relate in any way to the
business or affairs of the Company, and no copies of the same or any part
thereof shall be retained by him and he shall then (if required by the Company)
make an affidavit to the effect that the whole of the provisions of this Clause
have been complied with.
10. INTELLECTUAL PROPERTY
10.1 For the purposes of the application of the Patent Act 1977 and
any successor legislation, the Employee hereby acknowledges
that (if and in so far as it is not part of the Employee's
normal duties to make inventions) any invention made by him
shall have been made in the course of the duties of the
Employee hereunder and that he has a special obligation for
furthering the interests of the Company's undertaking, by
reason of the nature of such duties and of the particular
responsibilities arising therefrom.
(11)
<PAGE> 90
10.2 The Employee acknowledges that all intellectual property
rights subsisting in or attaching to anything conceived or
created by him or any invention, discovery, design (including
copyright therein) trade mark or improvement, whether or not
capable of protection by letters patent, registered design or
otherwise, made or discovered by the Employee, which relates
to or is in any way (whether directly or indirectly) connected
with the business of the Company, will belong absolutely to
the Company, to the fullest extent permitted by law, without
payment to the Employee. The Employee will forthwith provide
the Company with full details and information with regard
thereto and covenants not to apply for registration in any
part of the world of any design or letters patent for any
invention, discovery, design, trade mark or improvement so
made by him but will at the expense of the Company, apply as
nominee for the Company, or join with the Company or lend all
such assistance to the Company as it may reasonably require in
applying for letters patent, registration of the design or
other protection in the United Kingdom and in any other part
of the world therefor. The Employee will, at the Company's
expense, execute and do all instruments and things which may
be necessary to vest the absolute ownership in the said
letters patent, registered design or other protection when
granted and all the right, title and interest to and in the
same in the Company absolutely and as sole beneficial owner
and, when so vested, to renew, uphold, enforce or restore the
same and in the meantime will hold all interest therein in
trust for the Company, provided always, that this subclause
shall not apply to any invention or inventions deemed by law
to belong to the Employee.
10.3 Any rights in any invention directly related to the business
or activities of the Company, including any patent or patent
application, deemed by law to be the Employee's invention
shall, at the request of the Company, be assigned to the
Company, without payment to the Employee.
11. TERMINATION OF AGREEMENT
11.1 In case of illness or other cause incapacitating the Employee
from duly attending to his duties for a period exceeding 90
working days (whether consecutive or otherwise) in any
consecutive period of 12 months, the Company may, by notice in
writing given to the Employee at any time after the end of
such period of 90 working days, forthwith terminate the
Employee's employment under this Agreement and the Employee's
employment shall immediately cease, without prejudice to his
right to be paid his salary up to such date (subject to Clause
6).
11.2 The Company shall have the right to terminate this Agreement
at any time by summary written notice in the event of the
Employee:
11.2.1 becoming of unsound mind, as determined by a suitably
qualified medical practitioner;
11.2.2 having a bankruptcy order made against him or making
any arrangement with his creditors or having an
interim order made against him pursuant to Section
252 of the Insolvency Act 1986;
(12)
<PAGE> 91
11.2.3 being convicted of any indictable criminal offence,
other than a minor offence under the Road Traffic
Acts;
11.2.4 persistently and wilfully neglecting or becoming
incapable of properly performing his duties under
this Agreement, other than through illness or
incapacity;
11.2.5 refusing to carry out the reasonable, lawful and
proper instructions of the Board;
11.2.6 doing any action manifestly prejudicial to the
interests of the Company;
11.2.7 being guilty of any misconduct that is, in the
reasonable opinion of the Board, serious and material
misconduct or conduct detrimental to the best
interests of the Company or any material breach or
non-observance of the provisions of this Agreement;
or
11.2.8 being prohibited by law from being a director or
taking part in the management of the Company or
ceasing to be a director without the consent of the
Board, save by means of resignation;
and the Employee shall have no claim against the Company in respect of the
termination of his employment by the Company pursuant to this subclause 11.2.
11.3 This Agreement shall terminate without further notice and the
Employee's employment hereunder shall immediately cease in any
of the following circumstances.
11.3.1 upon the death of the Employee;
11.3.2 the liquidation or other dissolution of the Company,
otherwise than pursuant to Clause 14.
11.4 The Company and the Employee hereby agree that, following the
termination of this Agreement for whatever reason, the
Employee shall not have any claim against the Company in
respect of any rights he may have acquired under any Inland
Revenue approved or non-approved share option scheme or share
scheme operated by the Company.
11.5 The termination of the Employee's employment in accordance
with and for any of the reasons specified in this Clause 11
shall be deemed to be for substantial and sufficient reason of
a kind such as to justify the dismissal of the Employee and it
would be fair and reasonable for the Company to give notice of
the termination in the circumstances provided for by this
Clause 11 and in the manner provided herein.
12. AUTOMATIC RESIGNATION AS DIRECTOR AND/OR OFFICER
On the termination of his employment for any reason whatsoever, the
Employee, unless otherwise agreed in writing by the Board, shall resign,
without claim for
(13)
<PAGE> 92
compensation, from any office as a director or officer of the Company, then
held by the Employee.
13. DIRECTORSHIP.
The duties of the Employee as a non-voting director of the Company
shall be subject to the relevant Articles of Association from time to time.
During the Appointment the Employee shall not:
13.1 voluntarily do or refrain from doing any act, whereby his
office as a non-voting director of the Company is or becomes
liable to be vacated, other than by way of resignation;
13.2 notwithstanding the foregoing provisions, do anything that
would cause him to be disqualified from continuing to act as a
non-voting director of the Company.
14. AMALGAMATION/RECONSTRUCTION
If, before the expiration of this Agreement, the employment of the
Employee shall be terminated by reason of the liquidation of the Company for
the purpose of amalgamation or reconstruction, or as any part of an arrangement
for the amalgamation of the undertaking of the Company not involving
liquidation, and the Employee shall be offered employment with the amalgamating
or reconstructed company for a period not less than the unexpired term of this
Agreement and on terms no less favorable than the terms of this Agreement, then
the Employee shall have no claim against the Company in respect of the
termination of his employment by the Company.
15. DISCIPLINARY RULES
There is no formal disciplinary procedure applicable to this
employment. The Employee is expected to exhibit a high standard of propriety,
integrity and efficiency in all his dealings with and in the name of the
Company, and may be suspended with pay or required to take any annual holiday
entitlement during any investigation it may be necessary and proper for the
Company to undertake into the circumstances which it reasonably believes give
rise to the Employee being in material breach of the Agreement. The Company
shall give written reasons for the suspension, which in no event shall last
longer than 21 days. If the Employee is dissatisfied with any disciplinary
decision, he should refer such decision to the Chairman of the Board, whose
decision shall be final and binding.
16. REDRESS OF GRIEVANCES
If the Employee has any grievance relating to his employment, he
should refer such a grievance to the Chairman of the Board and the reference
will be dealt with by him. Should the Employee remain dissatisfied with his
ruling, an appeal, initially in writing may be made to the Board, whose
decision shall be final and binding.
(14)
<PAGE> 93
17. INDEX OF PARTICULARS
For the purpose of the Employment Protection (Consolidation) Act 1978
this Agreement shall be deemed to constitute the contract of employment between
the Company and the Employee and the following shall be the particulars of
employment for the purpose of Section 1 of the same Act:
<TABLE>
<S> <C>
Title of employment Clause 2
Date of commencement of
employment hereunder Clause 2
Date of commencement of
continuous employment Recital (A)
Remuneration Clause 4
Place of work Clause 3
Hours of Work Clause 3
Holidays Clause 5
Sickness or incapacity Clause 6
Pension Clause 7
Length of notice Clauses 2 and 11
Disciplinary procedure Clause 15
Redress of grievances Clause 16
</TABLE>
18. ENTIRE AGREEMENT
This Agreement and the Schedule hereto constitute the entire agreement between
the parties with respect to the Employee's employment and supersedes from the
date hereof such other contracts of employment (whether written or oral or
implied by law) which have previously subsisted between the Company and the
Employee, including that certain Director's Service Agreement, dated March 4,
1992, between the Employee and the Company. The Employee hereby acknowledges
that he has no claim outstanding against the Company for salary (save in
respect of the current month of employment), or in respect of any other matter
whatsoever arising prior to the date hereof, including, but not limited to, any
such claim under the prior agreement. There are no collective agreements which
govern this Agreement.
19. NOTICE
19.1 Any notice to be given pursuant to the terms of this Agreement
must be given in writing to the party due to receive such
notice at (in the case of the Company) its registered office
from time to time or (in the case of the
(15)
<PAGE> 94
Employee) his address set out in this Agreement or such other
address as he may have notified to the Company in accordance
with this Clause. Notice must be delivered personally or sent
by first class pre-paid recorded delivery of registered post
(air mail if overseas) or by facsimile transmission and shall
be deemed to be given in the case of personal delivery, on
delivery, and in the case of posting (in the absence of
evidence of earlier receipt), 48 hours after posting (5 days
if sent by air mail), and in the case of facsimile
transmission, on completion of the transmission provided that
the sender of the notice has received confirmation that an
error free transmission has been effected.
19.2 A copy of any notice given to the Company must in all cases be
given at the same time to VJN and TicketMaster at their
respective registered offices from time to time.
20. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby submit for all purposes in connection with
this Agreement to the non-exclusive jurisdiction of the English Courts.
21. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed by one or more of the parties hereto shall constitute an
original but all of which shall constitute one and the same instrument.
This Agreement has been executed as a deed and is delivered on the
date which first appears on this Agreement.
(16)
<PAGE> 95
SCHEDULE
Job Description
1. Handling the day to day operations of the Company.
2. Maintaining contact with all telephone companies, cable companies,
music companies and licensing organizations relevant to the business
of the Company as carried on from time to time.
3. The Employee shall assist the Board in developing an annual operating
budget for the Company, which budget shall be updated with the
assistance of the Employee, from time to time, at the request of the
Board.
(17)
<PAGE> 96
EXECUTED (but not delivered )
until the date hereof) as a )
deed by the said VIDEO )
JUKEBOX NETWORK )
INTERNATIONAL LIMITED )
acting by: )
Director
Secretary
EXECUTED (but not delivered )
until the date hereof) as a )
deed by VINCENT PAUL )
MONSEY in the presence of: )
(18)
<PAGE> 97
EXHIBIT "M"
Dated June 30, 1995
VIDEO JUKEBOX
NETWORK INTERNATIONAL LIMITED
and
ELIZABETH A. LASKOWSKI
EMPLOYMENT AGREEMENT
<PAGE> 98
INDEX
(For reference purposes only)
- --------------------------------------------------------------------------------
Clauses
- -------
1. Definitions and Interpretation
2. Appointment and Notice Period
3. Duties
4. Salary and Other Benefits
5. Holidays
6. Illness/Incapacity
7. Pension Benefits
8. Restrictive Covenants
9. Delivery up of Documents
10. Patents
11. Termination of Agreement
12. Automatic Resignation as Director and/or Officer
13. Amalgamation/Reconstruction
14. Disciplinary Rules
15. Redress of Grievances
16. Index of Particulars
17. Entire Agreement
18. Notices
19. Governing Law
20. Counterparts
Schedule
- --------
Job Description
(2)
<PAGE> 99
THIS AGREEMENT is made June 30, 1995
BETWEEN:
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED whose registered office is
at Imperial House, 11-13 Young Street, Kensington, London W8 5EH (the
"Company").
(2) ELIZABETH A. LASKOWSKI of 48 Holland Villas Road, London W14 (the
"Employee").
WHEREAS:
(A) The Employee commenced her employment on March 4, 1992 which is the
date of commencement of her continuous employment for the purposes of
the Employment Protection (Consolidation) Act of 1978.
(B) The parties wish to confirm in writing the terms of the continued
engagement of the Employee as an employee, with the title of Director
of Programming of the Company.
(C) This Agreement shall supersede all prior agreements between the
Employee and the Company on the date that the Company, Video Jukebox
Network, Inc. and TM No.2 Limited consummate the transactions
contemplated by that certain Stock Purchase Agreement dated as of the
date hereof.
IT IS HEREBY AGREED:
1. DEFINITION AND INTERPRETATION
1.1 In this Agreement the following words and expressions shall
(except where the context otherwise requires) have the
following meaning:
<TABLE>
<S> <C>
Board the board of directors of the Company as comprised from time to time
Companies Acts the Companies Act 1985 and the Companies Act 1989
letters patent or patent includes letters patent, brevet d'invention, petty patent, gebrauschmuster,
utility model, design registration or any other form of protection for any
invention, discovery or improvement that can be obtained in the United Kingdom
or any British Dominion Colony or Dependency or in any foreign country.
Termination Date the date upon which the Employee's employment hereunder is terminated
</TABLE>
(3)
<PAGE> 100
<TABLE>
<S> <C>
TicketMaster TM No.2 Limited being a company registered under the laws of England and Wales
VJN Video Jukebox Network, Inc. being a company registered under the laws of the
State of Florida, USA, having document number H 75052
</TABLE>
1.2 Unless otherwise stated references to Clauses, Subclauses and
Schedules are references to Clauses and Subclauses of, and
Schedules to, this Agreement.
1.3 Clause headings are for ease of reference only and do not
affect the construction or interpretation of this Agreement.
1.4 References to persons shall include bodies corporate, limited
liability companies, trusts, governmental units,
unincorporated associations and partnerships.
1.5 References to writing shall include typewriting, printing,
lithography, photography, facsimile messages and other modes
of reproducing words in a legible and non-transitory form.
2. APPOINTMENT AND NOTICE PERIOD.
2.1 The Employee shall (subject to Subclause 2.2) be employed as
the Director of Programming of the Company under the terms of
this Agreement until the earlier of (i) June 30, 1998; or (ii)
such employment being terminated in accordance with Clause 11.
In the event that this Agreement expires on June 30, 1998, the
Employee agrees that she will not be entitled to any statutory
or unfair dismissal and redundancy rights.
2.2 Instead of requiring the Employee to continue performing
duties and of the Company providing her with duties during the
period remaining under this Agreement (the "Remaining
Period"), the Company may, at its sole discretion, require the
Employee not to attend for work during the Remaining Period.
In such event, the Company shall continue to provide the
Employee with her salary (as set forth in Clause 4.1) and
benefits for the Remaining Period. The Employee shall not,
however, be entitled to any further unearned bonus under
Clause 4.5. Nevertheless, the Employee shall have the right
(subject to the restrictions contained in Clause 8) to seek
employment elsewhere, but if and when the Employee commences
employment elsewhere: (i) the Agreement shall be terminated;
and (ii) the Employee shall not be entitled to any further
salary payments or contractual benefits hereunder.
2.3 Notwithstanding the above, instead of requiring the Employee
to continue performing duties and of the Company providing her
with duties during the Remaining Period, the Company may, at
its sole discretion, terminate the Agreement and give her a
payment of salary and other contractual
(4)
<PAGE> 101
benefits, calculated as of the date of termination, in lieu of
the whole of the Remaining Period.
3. DUTIES
3.1 During her appointment the Employee shall (unless prevented by
accident or ill health or unless otherwise agreed by the Board
in writing) devote the whole of her time and attention to the
business of the Company as the Board may reasonably require
and shall at all times use her best endeavors to promote the
interest and welfare of the Company. The Company does not
make payments for overtime working to persons working at the
level of position of the Employee and the Employee shall be
required to work such hours as may be reasonably necessary in
order properly to perform her duties under this Agreement.
3.2 The Employee shall exercise and perform such powers and duties
in relation to the Company as the Board may from time to time
reasonably direct, being duties appropriate to the Employee's
status, qualifications and experience, and subject to such
restrictions as the Board may from time to time reasonably
impose (which the Employee shall duly and faithfully perform
and observe), and in particular her duties shall be as set out
in the Schedule attached hereto.
3.3 The Employee acknowledges that Ticketmaster will be providing
administrative services to the Company pursuant to the terms
of that certain Administrative Services Agreement, dated as of
the date hereof, and the Employee agrees to fully cooperate
with Ticketmaster in connection therewith.
3.4 The Employee's usual place of work shall be the Company's head
office in London. The Employee may be required to travel to
(but not to live in) places within Europe and the United
States as the Board may reasonably require and the Company
shall, upon production of valid receipts, meet the reasonable
expenses of the Employee wholly, exclusively and properly
incurred when travelling away from the Company's head office.
In the normal course of business, it is not envisaged that any
periods abroad will exceed one month.
3.5 The Employee warrants to the Company that by entering into
this Agreement she will not be in breach of any obligations to
any third party.
4. SALARY AND OTHER BENEFITS
4.1 The Employee shall be entitled to an annual salary at the rate
of:
<TABLE>
<CAPTION>
Amount Contract Year
------ -------------
<S> <C>
L.55,000 One
L.60,000 Two
L.65,000 Three
</TABLE>
(5)
<PAGE> 102
The salary shall be payable every two weeks in arrears on the
last day of each such period, or at such other time as the
Board shall determine shall be reasonable for a person of the
Employee's standing. The Employee's salary hereunder shall
accrue on a daily basis.
4.2 The Employee shall be entitled to be reimbursed by the Company
for all out of pocket expenses which are wholly, exclusively
and properly incurred in the performance of her duties
hereunder, so long as the Employee provides the Company with
vouchers or other evidence of actual payment of such expenses,
including supporting documentation required under applicable
tax laws.
4.3 The Company undertakes that during the continuance of the
Employee's employment hereunder it shall:
4.3.1 maintain the Employee's membership of such private
health insurance scheme as the Company may from time
to time determine at London Teaching Hospital Rate
benefit levels;
4.3.2 reimburse the Employee for the costs of taking out
such insurance as the Board shall reasonably
determine to be necessary to cover the Employee for
all private medical expenses incurred by her at any
time whilst visiting the rest of the world on
business for the Company.
4.3.3 pay the cost of maintaining permanent health
insurance (the "Permanent Health Insurance") for the
Employee, at benefit levels and pursuant to
commercial terms which are standard for an executive
of the Employee's standing;
4.3.4 pay the Employee L.400 per month as an allowance for
leasing a car.
4.4 The Employee shall be entitled to receive such additional
benefits as the Board in its absolute discretion shall from
time to time determine.
4.5 Nothing in this Clause 4 shall prevent the Board where it
thinks fit, in its absolute discretion, resolving to pay any
temporary additional remuneration, commission or annual bonus
(up to a maximum of 15% of the Employee's annual salary) to
the Employee on the basis that such payment shall not
constitute an increase in the rate of salary for the purposes
of this Agreement.
4.6 The Employee hereby agrees that at any time during her term of
employment under this Agreement, and on termination of her
employment, the Company shall be entitled to deduct from any
sums due to the Employee hereunder any outstanding monies then
owed by the Employee to the Company including, but not limited
to, all outstanding loans made by the Company to the Employee
which were paid in excess of her entitlement, pay received for
holiday taken in excess of the
(6)
<PAGE> 103
Employee's pro rata holiday, entitlement sums paid on behalf
of the Employee by the Company which have not been incurred by
the Employee in the proper performance of her duties, and any
fines incurred by the Employee and paid by the Company.
5. HOLIDAYS
5.1 The Employee shall be entitled, in addition to statutory and
other public holidays, to take the following number of working
days' holiday at such time or times as she may agree with the
Board:
<TABLE>
<CAPTION>
Amount Contract Year
------ -------------
<S> <C>
25 working days One
25 working days Two
25 working days Three
</TABLE>
The Employee may also take such additional or special holidays
(if any) as the Board may from time to time approve.
5.2 The Employee shall not be entitled to carry forward any
holiday entitlement not used in each calendar year, without
obtaining the prior consent of the Board, which consent shall
not be unreasonably withheld or delayed.
5.3 In the respective years in which the employment commences or
terminates, the Employee's entitlement to holiday shall accrue
on a pro rata basis for each month of service during the
relevant year.
5.4 If, upon the termination of the employment, the Employee has
exceeded her accrued holiday entitlement, the excess shall be
deducted from any sums due to her. If the Employee has any
unused holiday entitlement, the Company shall make payment in
lieu thereof. One day's holiday pay will be calculated at
1/260th of the then current annual rate.
6. ILLNESS/INCAPACITY
6.1 If the Employee shall be prevented by illness or other
incapacity (verified by a registered medical practitioner)
from duly attending to her duties the Company shall continue
to pay her full salary (as set forth in Clause 4.1) and
benefits until the expiry of a period of 90 working days (the
"Ninety Day Period") absence (whether consecutive or not) in
any period of 12 months, and thereafter, for as long as the
appointment remains in effect, shall pay to the Employee any
sums received by the Company pursuant to the Permanent Health
Insurance (subject to such reductions as are required by law).
The Company can give no assurance that any claim made in
respect of the Permanent Health Insurance will be accepted and
no liability will attach to the Company if any claim is
rejected in whole or
(7)
<PAGE> 104
in part. Nevertheless, the Company shall use reasonable
endeavors to obtain payment for the Employee under the
Permanent Health Insurance.
6.2 If any claim made in respect of the Employee under the
Permanent Health Insurance is accepted in whole, or in part:
6.2.1 the Company shall immediately, upon such acceptance,
cease to be under any obligation to pay any amount or
to provide any benefits to the Employee other than
those provided under the terms of the Permanent
Health Insurance at the date of the Employee's claim;
and
6.2.2 the Company shall automatically become entitled to
appoint a successor to the Employee to perform all or
any of her duties and Clause 3 will be amended
accordingly.
Notwithstanding the above, in the event that a claim under the
Permanent Health Insurance is accepted prior to the end of the
Ninety Day Period, the Company shall not be able to exercise
its rights under Clauses 6.2.1 and 6.2.2 until the end of the
Ninety Day Period.
6.3 The Company shall set off the Employee's remuneration paid in
accordance with this Clause against the liability of the
Company to pay Statutory Sick Pay to the Employee under the
Statutory Sick Pay Scheme or National Insurance Scheme for the
time being in force. The Company may also deduct from the
Employee's remuneration the amount of any other state benefits
to which the Employee shall be entitled (whether claimed or
not) and the Employee shall inform the Company concerning such
payments.
6.4 For the purposes of calculation of Statutory Sick Pay the days
on which the Employee could qualify for payments are Monday,
Tuesday, Wednesday, Thursday and Friday. Further details of
the Statutory Sick Pay Scheme and the requirements of the
Company with regard to the provision of medical certificates
can be obtained from the Board, upon request.
6.5 If any incapacity shall be, or appear to be, occasioned by
actionable negligence of a third party, in respect of which
damages are or may be recoverable, the Employee shall
forthwith notify the Board of that fact and of any claim,
compromise, settlement or judgment made or awarded in
connection therewith and shall give to the Board all such
particulars of such matters as the Board may reasonably
require. The Employee shall take all necessary and reasonable
action to recover damages from any such negligent third party.
Except as hereafter provided, all sums paid to the Employee
during any such period of incapacity shall be paid by way of
loan only and shall, if so required by the Board, be refunded
to the Company. Nevertheless, the Employee shall only be
required to refund sums from damages (if any) recovered by her
under such compromise, settlement or judgment (less any costs
which are borne by the Employee in connection with such claim,
compromise, settlement or judgment).
(8)
<PAGE> 105
7. PENSION BENEFITS.
The Company does not operate a Pension Scheme in which the Employee is eligible
to participate and no contracting-out certificate is in force in respect of her
employment hereunder. Nevertheless, if and when VJN has established a pension
scheme, the Company shall use its best endeavors to organize a comparable
pension scheme under English law or, at the Employee's option, contribute to an
approved personal pension scheme of the Employee's choosing. In either event
the Company shall make an annual contribution, equivalent to 9% of the
Employee's salary from time to time, to the Employee's account under any such
scheme, or as directed by the Employee.
8. RESTRICTIVE COVENANTS
8.1 The Employee hereby agrees and confirms that during the course
of her employment by the Company prior to the date hereof she
has obtained knowledge of, and during the course of her
appointment under this Agreement, she is likely to obtain
knowledge of trade secrets and other confidential information
with regard to the business and financial affairs of the
Company, as well as its customers and suppliers details, all
of which are not in the public domain including, without
limitation, financial data, computer software and hardware,
intellectual property rights and present and future plans
("Confidential Information"). Accordingly, the Employee
hereby undertakes to and covenants with the Company that in
order to protect the interests of the Company in its goodwill
and business connections and the Confidential Information:
8.1.1 she shall not, at any time after the Termination
Date, use or procure the use of the name of the
Company, whether or not in connection with her own or
any other name in any way calculated to suggest that
she continues to be connected with the business of
the Company or in any way hold herself out as having
such connection;
8.1.2 she shall not, at any time during the term of this
Agreement and at all times thereafter (save by
compulsion of law), use any Confidential Information
(other than for the purposes of the Company) or
disclose or divulge any Confidential Information to
any person (other than to officers or employees of
the Company whose province it is to know the same)
and that she shall, at the expense of and if
requested by the Company, use her reasonable
endeavors to prevent such use, divulgence or
disclosure of any Confidential Information by any
other person; provided that the provisions of this
clause shall cease to apply to Confidential
Information which enters the public domain, other
than directly or indirectly by reason of the
Employee's breach of this Agreement;
8.1.3 she shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on her
own behalf, or on behalf of any other person,
directly or indirectly approach, canvass, solicit or
otherwise endeavor to entice away from the Company
the custom of any person who is then, or
(9)
<PAGE> 106
was during the twelve (12) month period prior to the
Termination Date, a customer or supplier of the
Company with whom she had dealings within the twelve
(12) month period prior to the Termination Date, and
she shall not use her knowledge of, or influence
over, any such customer or supplier to or for her own
benefit or the benefit of any other person carrying
on business in competition with the business of the
Company, or otherwise use her knowledge or influence
over any such customer or supplier to the detriment
of the Company;
8.1.4 she shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on her
own behalf, or on behalf of any other person,
directly or indirectly approach, canvass, solicit or
otherwise endeavor to entice away any person, who is
then or was at any time during the twelve (12) month
period prior to the Termination Date, an employee of
the Company with access to Confidential Information
(save for Vincent Monsey), or otherwise encourage any
such person to terminate his or her relationship with
the Company;
8.1.5 she shall not, at any time prior to the termination
of this Agreement and without the prior written
consent of the Board, be a director of any company or
be engaged, employed, concerned or in any other way
interested in any other business whatsoever; and
8.1.6 she shall not, at any time during the term of this
Agreement and for six (6) months thereafter (less any
amount of time during which the Employee does not
attend work pursuant to Clause 2.2), either on her
own behalf or on behalf of or in association with any
other person, directly or indirectly, be engaged,
concerned or interested, as an employee or in any
other capacity, in any business within the United
Kingdom in competition with the business carried on
at the Termination Date by the Company.
8.2 Each of the parties acknowledge and agree that each of the
restrictions contained in this Clause 8 are entirely separate
and independent and are reasonable and necessary for the
protection of the relevant interests. Nevertheless, if any
provision or part thereof is held invalid or unenforceable,
this shall not affect the remaining provisions, all of which
shall remain in full force and effect. Furthermore, if any
restriction would be valid if the wording were amended or the
period or scope of the restriction reduced, such restriction
shall apply with such modifications as may be necessary to
make it valid and effective.
8.3 Nothing in this Clause 8 shall prohibit the Employee from
holding shares or debentures quoted or dealt in or on a
recognized Stock Exchange in the United Kingdom or elsewhere,
so long as not more than 1 per cent of the shares or stock of
any class of any one company is so held.
(10)
<PAGE> 107
8.4 The provisions of this Clause 8 shall survive the termination
of this Agreement.
9. DELIVERY UP OF DOCUMENTS
Upon the expiration or termination of this Agreement, for any reason
whatsoever, the Employee shall forthwith deliver up to the Company, or its
authorized representative, all keys, credit cards, papers, books, documents,
account records, and other materials, whether in eye readable or machine
readable form, which may be in her possession, custody or control and which are
the property of the Company or which otherwise relate in any way to the
business or affairs of the Company, and no copies of the same or any part
thereof shall be retained by her and she shall then (if required by the
Company) make an affidavit to the effect that the whole of the provisions of
this Clause have been complied with.
10. INTELLECTUAL PROPERTY
10.1 For the purposes of the application of the Patent Act 1977 and
any successor legislation, the Employee hereby acknowledges
that (if and in so far as it is not part of the Employee's
normal duties to make inventions) any invention made by her
shall have been made in the course of the duties of the
Employee hereunder and that she has a special obligation for
furthering the interests of the Company's undertaking, by
reason of the nature of such duties and of the particular
responsibilities arising therefrom.
10.2 The Employee acknowledges that all intellectual property
rights subsisting in or attaching to anything conceived or
created by her or any invention, discovery, design (including
copyright therein) trade mark or improvement, whether or not
capable of protection by letters patent, registered design or
otherwise, made or discovered by the Employee, which relates
to or is in any way (whether directly or indirectly) connected
with the business of the Company, will belong absolutely to
the Company, to the fullest extent permitted by law, without
payment to the Employee. The Employee will forthwith provide
the Company with full details and information with regard
thereto and covenants not to apply for registration in any
part of the world of any design or letters patent for any
invention, discovery, design, trade mark or improvement so
made by her but will at the expense of the Company, apply as
nominee for the Company, or join with the Company or lend all
such assistance to the Company as it may reasonably require in
applying for letters patent, registration of the design or
other protection in the United Kingdom and in any other part
of the world therefor. The Employee will, at the Company's
expense, execute and do all instruments and things which may
be necessary to vest the absolute ownership in the said
letters patent, registered design or other protection when
granted and all the right, title and interest to and in the
same in the Company absolutely and as sole beneficial owner
and, when so vested, to renew, uphold, enforce or restore the
same and in the meantime will hold all interest therein in
trust for the Company, provided always, that this subclause
shall not apply to any invention or inventions deemed by law
to belong to the Employee.
(11)
<PAGE> 108
10.3 Any rights in any invention related to the business or
activities of the Company, including any patent or patent
application, deemed by law to be the Employee's invention
shall, at the request of the Company, be assigned to the
Company, without payment to the Employee.
11. TERMINATION OF AGREEMENT
11.1 In case of illness or other cause incapacitating the Employee
from duly attending to her duties for a period exceeding 90
working days (whether consecutive or otherwise) in any
consecutive period of 12 months, the Company may, by notice in
writing given to the Employee at any time after the end of
such period of 90 working days, forthwith terminate the
Employee's employment under this Agreement and the Employee's
employment shall immediately cease, without prejudice to her
right to be paid her salary up to such date (subject to Clause
6).
11.2 The Company shall have the right to terminate this Agreement
at any time by summary written notice in the event of the
Employee:
11.2.1 becoming of unsound mind, as determined by a suitably
qualified medical practitioner;
11.2.2 having a bankruptcy order made against her or making
any arrangement with her creditors or having an
interim order made against her pursuant to Section
252 of the Insolvency Act 1986;
11.2.3 being convicted of any indictable criminal offence,
other than a minor offence under the Road Traffic
Acts;
11.2.4 persistently and wilfully neglecting or becoming
incapable of properly performing her duties under
this Agreement, other than through illness or
incapacity;
11.2.5 refusing to carry out the reasonable, lawful and
proper instructions of the Board;
11.2.6 doing any action manifestly prejudicial to the
interests of the Company; or
11.2.7 being guilty of any misconduct that is, in the
reasonable opinion of the Board, serious and material
misconduct or conduct detrimental to the best
interests of the Company or any material breach or
non-observance of the provisions of this Agreement
and the Employee shall have no claim against the Company in respect of the
termination of her employment by the Company pursuant to this subclause 11.2.
11.3 This Agreement shall terminate without further notice and the
Employee's employment hereunder shall immediately cease in any
of the following circumstances.
(12)
<PAGE> 109
11.3.1 upon the death of the Employee;
11.3.2 the liquidation or other dissolution of the Company,
otherwise than pursuant to Clause 13.
11.4 The Company and the Employee hereby agree that, following the
termination of this Agreement for whatever reason, the
Employee shall not have any claim against the Company in
respect of any rights she may have acquired under any Inland
Revenue approved or non-approved share option scheme or share
scheme operated by the Company.
11.5 The termination of the Employee's employment in accordance
with and for any of the reasons specified in this Clause 11
shall be deemed to be for substantial and sufficient reason of
a kind such as to justify the dismissal of the Employee and it
would be fair and reasonable for the Company to give notice of
the termination in the circumstances provided for by this
Clause 11 and in the manner provided herein.
12 AUTOMATIC RESIGNATION AS DIRECTOR AND/OR OFFICER
On the termination of her employment for any reason whatsoever, the
Employee, unless otherwise agreed in writing by the Board, shall resign,
without claim for compensation, from any office as a director or officer of the
Company, then held by the Employee.
13. AMALGAMATION/RECONSTRUCTION
If, before the expiration of this Agreement, the employment of the
Employee shall be terminated by reason of the liquidation of the Company for
the purpose of amalgamation or reconstruction, or as any part of an arrangement
for the amalgamation of the undertaking of the Company not involving
liquidation, and the Employee shall be offered employment with the amalgamating
or reconstructed company for a period not less than the unexpired term of this
Agreement and on terms no less favorable than the terms of this Agreement, then
the Employee shall have no claim against the Company in respect of the
termination of her employment by the Company.
14. DISCIPLINARY RULES
There is no formal disciplinary procedure applicable to this
employment. The Employee is expected to exhibit a high standard of propriety,
integrity and efficiency in all her dealings with and in the name of the
Company, and may be suspended with pay or required to take any annual holiday
entitlement during any investigation it may be necessary and proper for the
Company to undertake into the circumstances which it reasonably believes give
rise to the Employee being in material breach of the Agreement. The Company
shall give written reasons for the suspension, which in no event shall last
longer than 21 days. If the Employee is dissatisfied with any disciplinary
decision, she should refer such decision to the Chairman of the Board, whose
decision shall be final and binding.
(13)
<PAGE> 110
15. REDRESS OF GRIEVANCES
If the Employee has any grievance relating to her employment, she
should refer such a grievance to the Chairman of the Board and the reference
will be dealt with by him. Should the Employee remain dissatisfied with his
ruling, an appeal, initially in writing may be made to the Board, whose
decision shall be final and binding.
16. INDEX OF PARTICULARS
For the purpose of the Employment Protection (Consolidation) Act 1978
this Agreement shall be deemed to constitute the contract of employment between
the Company and the Employee and the following shall be the particulars of
employment for the purpose of Section 1 of the same Act:
<TABLE>
<S> <C>
Title of employment Clause 2
Date of commencement of
employment hereunder Clause 2
Date of commencement of
continuous employment Recital (A)
Remuneration Clause 4
Place of work Clause 3
Hours of Work Clause 3
Holidays Clause 5
Sickness or incapacity Clause 6
Pension Clause 7
Length of notice Clauses 2 and 11
Disciplinary procedure Clause 14
Redress of grievances Clause 15
</TABLE>
17. ENTIRE AGREEMENT
This Agreement and the Schedule hereto constitute the entire agreement between
the parties with respect to the Employee's employment and supersedes from the
date hereof such other contracts of employment (whether written or oral or
implied by law) which have previously subsisted between the Company and the
Employee. The Employee hereby acknowledges that she has no claim outstanding
against the Company for salary (save in respect of the current month of
employment) or in respect of any other matter whatsoever arising prior to the
date hereof. There are no collective agreements which govern this Agreement.
(14)
<PAGE> 111
18. NOTICE
18.1 Any notice to be given pursuant to the terms of this Agreement
must be given in writing to the party due to receive such
notice at (in the case of the Company) its registered office
from time to time or (in the case of the Employee) her address
set out in this Agreement or such other address as she may
have notified to the Company in accordance with this Clause.
Notice must be delivered personally or sent by first class
pre-paid recorded delivery of registered post (air mail if
overseas) or by facsimile transmission and shall be deemed to
be given in the case of personal delivery, on delivery, and in
the case of posting (in the absence of evidence of earlier
receipt), 48 hours after posting (5 days if sent by air mail),
and in the case of facsimile transmission, on completion of
the transmission provided that the sender of the notice has
received confirmation that an error free transmission has been
effected.
18.2 A copy of any notice given to the Company must in all cases be
given at the same time to VJN and TicketMaster at their
respective registered offices from time to time.
19. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby submit for all purposes in connection with
this Agreement to the non-exclusive jurisdiction of the English Courts.
20. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed by one or more of the parties hereto shall constitute an
original but all of which shall constitute one and the same instrument.
This Agreement has been executed as a deed and is delivered on the
date which first appears on this Agreement.
(15)
<PAGE> 112
SCHEDULE
Job Description
Employee shall be responsible for all aspects of the Company's television
programming, including, but not limited to, establishment and maintenance of
relations with key executives of major and independent record labels, music
programming of all jukebox units, programming strategy and on-air promotion.
(16)
<PAGE> 113
EXECUTED (but not delivered )
until the date hereof) as a )
deed by the said VIDEO )
JUKEBOX NETWORK )
INTERNATIONAL LIMITED )
acting by: )
Director
Secretary
EXECUTED (but not delivered )
until the date hereof) as a )
deed by ELIZABETH A. )
LASKOWSKI in the presence of: )
(17)
<PAGE> 114
EXHIBIT "N"
DATED 1995
-------------------------------------------
(1) VIDEO JUKEBOX NETWORK, INC.
(2) TM No.2 LIMITED
-------------------------------------------
DEED OF TAX COVENANT
-------------------------------------------
ROWE & MAW
20 Black Friars Lane
London EC4V 6HD
Ref: 263/26089-0001/8462M
<PAGE> 115
THIS DEED made on 1995 BETWEEN
(1) VIDEO JUKEBOX NETWORK, INC., a Florida corporation whose principal
place of business is at l2000 Biscayne Boulevard, Miami, Florida
33181 ("VJN"); and
(2) TM No.2 LIMITED, a company incorporated under the laws of England
and Wales (number 3005851) whose registered office is at 20 Black
Friars Lane, London EC4V 6HD ("Ticketmaster").
WITNESSES as follows:
1. In this Deed:
(1) save as otherwise provided herein or where the context
otherwise requires, words and expressions defined in a
Stock Purchase Agreement dated of even date herewith and
made between the Company (as defined below) (1), VJN (2),
and Ticketmaster (3) for the sale and purchase of the
Shares (as therein defined) of the Company ("the
Agreement") shall have the same meanings wherever used
herein
(2) "Claim" means any assessment, notice, demand, letter or
other document issued or action taken by or on behalf of
the Inland Revenue or H.M. Customs & Excise or any other
statutory, governmental or fiscal authority whether of the
United Kingdom or of any other part of the world from
which it appears that the Company is or is to be placed
under a Tax Liability
(3) "Tax Liability" means any liability of the Company to make
a payment in respect of Tax (whether or not the Company
may be primarily liable to make such payment or
1
<PAGE> 116
may be entitled to reimbursement from another in respect
thereof) and it includes such a liability which arises as
a consequence of the Company being deprived of or denied
any Relief
(4) "the Company" means VIDEO JUKEBOX NETWORK INTERNATIONAL
LIMITED, a company registered under number 2643552, whose
registered office is at Imperial House, ll-l3 Young
Street, Kensington, London W8 5EH
(5) "Tax" and "Taxes" shall have the meaning ascribed to them
in Section l.0l (Article I) of the Agreement save that for
the purposes of this Deed they shall also include the
loss, denial or disallowance of any Relief and any payment
or liability incurred under any reasonable settlement of
any Claim for Tax
(6) "event" includes any disposition, transaction, act,
omission or occurrence of whatever nature (whether or not
the Company is a party thereto) and includes (without
limitation) Closing
(7) reference to income or profits or gains earned, accrued or
received shall include income or profits or gains deemed
to have been or treated as or regarded as earned, accrued
or received for the purposes of any Tax
(8) "Relief" includes any exemption, relief, allowance,
set-off, deduction in computing profits or credit granted
by or pursuant to any legislation or otherwise relating to
any form of Tax and any right to repayment of any form of
Tax in either case taken into account in the Financial
Statements for the year ended on and as at 31st December
1994
2
<PAGE> 117
(9) reference to any business carried on by or transaction
effected by any person shall include any business carried
on by such person in partnership with others and any
transaction effected by or in the course of any such
partnership
(10) If any Relief is lost then, unless a liability for Tax
thereby actually arises in the circumstances mentioned in
either paragraph (i) or (ii) of Clause 2(l) below, there
shall be treated as an amount of Tax for which a liability
has arisen
(a) in the case of a right to repayment of Tax the
amount of the repayment, and otherwise
(b) the amount by which the liability to Tax of the
Company would have been reduced if the Relief
had not been lost.
2. (1) Subject as hereinafter provided, VJN hereby covenants with
Ticketmaster to pay to Ticketmaster an amount equal to 50
per cent of the amount of any Tax Liability of the Company
arising either (i) in respect of any period ending on or
before Closing or (ii) in respect of any event occuring on
or before Closing (in either case whether alone or in
conjunction with any circumstances or events and whether
or not such Tax is also or alternatively chargeable
against or attributable to any other person firm or
company) or (iii) (in respect of a Tax Liability arising
after Closing) which would not have arisen but for a loss
of Relief or provided for under Clause l(10) above, and so
that this covenant shall cover all reasonable costs and
expenses paid by the Company or Ticketmaster solely in
connection with and for the purpose of contesting,
3
<PAGE> 118
negotiating, resisting, quantifying, disputing or settling
any Claim giving rise to a Tax Liability
(2) In the case of any of the costs and expenses incurred only
by Ticketmaster for which VJN is liable under Clause 2(l)
above, the amount recoverable shall be l00 per cent of the
amount of the costs and expenses
3. The covenant given by Clause 2 of this Deed does not extend to any
Tax Liability
(a) to the extent that provision or reserve (other than a
provision or reserve for deferred Tax) in respect thereof
shall be made in the Financial Statements for the year
ended on and as at 31st December 1994;
(b) to the extent that such Tax Liability arises as a result
of any such provision or reserve in respect thereof being
insufficient by reason of any increase in rates of Tax
made after Closing with retrospective effect;
(c) for which the Company is or may become liable as a result
solely of trading transactions entered into in ordinary
course of its business after 31st December 1994;
(d) to the extent that it would not have arisen but for a
voluntary act omission or transaction of Ticketmaster or
the Company carried out or occurring after Closing
otherwise than in the ordinary course of business and in
circumstances in which Ticketmaster knew or ought
reasonably to have known that the act omission or
transaction could give rise to a Tax Liability;
4
<PAGE> 119
(e) to the extent that it would not have arisen but for any
change in accounting policy or practice affecting the
Company and adopted after Closing;
(f) to the extent that Ticketmaster recovers any amount from
VJN under the Agreement in respect of or arising from the
same Tax Liability;
(g) to the extent that any provision for Tax (not being a
provision for deferred Tax) contained in the Financial
Statements for the year ended on and as at 31st December
1994 shall be certified by the Company's auditors from
time to time to be an overprovision PROVIDED THAT if it
shall subsequently be found that the amount or some part
of the amount so certified was not in fact an
overprovision VJN shall forthwith on demand pay the amount
or such part thereof to Ticketmaster
4. In the event that the Company receives a Claim for Tax or
circumstances arise generally whereby Ticketmaster is likely to be
entitled to a payment under this Deed, then VJN undertakes to or
procures that the Company will notify Ticketmaster as soon as
reasonably practicable of such Claim or circumstance
5. Subject to the provisions of Clause 6 hereof, VJN shall make
immediate payment in full and without any deduction (except as
required by law) whether by reason of any set-off, counterclaim or
otherwise forthwith upon service of a notice containing a written
demand in respect of any Tax Liability for which VJN is liable to
pay Ticketmaster hereunder, provided that the liability of VJN to
Ticketmaster under this Deed shall not arise earlier than the latest
date on which
5
<PAGE> 120
the Tax Liability in question is due and payable to the relevant
authority
6. In the event that the Inland Revenue or any other persons who may
make a Claim seek to charge to Tax any sum paid to Ticketmaster
hereunder as a result of the covenant or other obligations contained
herein then the amount payable hereunder shall be grossed up by such
amount as will ensure that after payment of the Tax so charged there
shall be left a sum equal to the amount that would otherwise be
payable under such covenant or obligation
7. If VJN shall fail to pay any sum due from it under this Deed on the
due date for payment in accordance with this Deed, it shall pay
interest on that sum from such date until payment in full (as well
after as before any judgment) at the rate of 2 per cent. per annum
above the base rate for the time being of National Westminster Bank
Plc.
8. The provisions of Sections 7.0l (Article VII) (Survival), 7.04
(Article VII) (Procedure for Claims), 9.04 (Article IX) (Notices),
9.10 (Article IX) (Assignment), 9.12 (Article IX) (Governing Law)
and 9.13 (Article IX) (Jurisdiction: Service of Process) of the
Agreement shall apply as though set out in this Deed.
6
<PAGE> 121
IN WITNESS whereof this Deed has been entered into the day and year first above
written.
SIGNED AND DELIVERED as a )
Deed by a director )
and a director )
/secretary duly authorised )
for and on behalf of VIDEO )
JUKEBOX NETWORK, INC )
Director
Director/Secretary
SIGNED AND DELIVERED as a )
Deed by a director )
and a director )
/secretary duly authorised )
for and on behalf of )
TM No. 2 LIMITED )
Director
Director/Secretary
7
<PAGE> 122
EXHIBIT "O"
June 30, 1995
TM No. 2 Limited
c/o Ticketmaster-Southern California, Inc.
3701 Wilshire Boulevard
7th Floor
Los Angeles, California 90010
Re: Investment in Video Jukebox Network International Limited
To the Board of Directors:
Reference is hereby made to those certain documents set forth below,
each of which is dated as of June 30, 1995 (collectively, the "Transaction
Documents"):
1. Stock Purchase Agreement among TM No. 2 Limited
("Ticketmaster"), Video Jukebox Network, Inc. ("VJN") and Video Jukebox Network
International Limited ("VJNIL"), together with the side letter agreement
relating to the intellectual property representations and warranties contained
therein;
2. Administrative Services Agreement among Ticketmaster, VJNIL
and VJN, together with (a) the Promissory Note of Ticketmaster issued in
connection therewith, and (b) the side letter agreement relating to the
intellectual property representations and warranties contained therein; and
3. License Agreement between VJN, as licensor, and VJNIL, as
licensee, together with the side letter agreement containing VJN's
representations and warranties with respect to the License Agreement.
Without regard to the representations and warranties of VJN and/or
VJNIL relating to intellectual property set forth in any of the Transaction
Documents, in the event that during the thirty (30) month period following the
Closing (as defined in the Stock Purchase Agreement described above), VJNIL is
prohibited or otherwise restricted from operating its business as it is
conducted on the Closing Date (as defined in the Stock Purchase Agreement) as a
result of any claim or demand by a third party that the intellectual property
licensed to VJNIL by VJN pursuant to the License Agreement (described above)
conflicts with, misappropriates, infringes or otherwise violates any
intellectual property rights of such third party ("Intellectual Property
Matters"), then VJN shall (i) make Ticketmaster whole with respect to, and to
the extent of, amounts that Ticketmaster has theretofore paid or value that
Ticketmaster has theretofore given to VJN and/or VJNIL as consideration for
equity in VJNIL (whether pursuant to the Stock Purchase Agreement or the
Administrative Services Agreement) (the "Make Whole Amount") and (ii) indemnify
and hold Ticketmaster harmless from any liability that Ticketmaster may incur
as a result of its status as an equity holder or administrative services
provider with respect to VJNIL, which arises out of or is related to
Intellectual
<PAGE> 123
TM No. 2 Limited
June 30, 1995
Page 2
Property Matters. In addition, VJN shall cause VJNIL to cancel and return to
Ticketmaster the Promissory Note of Ticketmaster (as described above). Upon
receipt in full of the amounts described in the foregoing clauses (i) and (ii),
Ticketmaster shall transfer to VJN all of the 356 shares of capital stock of
VJNIL acquired by Ticketmaster pursuant to the Transaction Documents; provided,
however, that in the event Ticketmaster is unable to transfer to VJN all of the
356 shares of capital stock of VJNIL, the Make Whole Amount required to be paid
to Ticketmaster by VJN shall be proportionately reduced.
This letter agreement has been entered into and executed by
Ticketmaster and VJN subsequent to the execution of all of the Transaction
Documents and is not superseded or preempted by any provision of the
Transaction Documents. This letter agreement shall be a contract made under
and governed by the internal laws of the State of Delaware, without regard to
conflict of laws principles.
If the foregoing accurately sets forth our understanding, please so
signify by signing the acknowledgement below.
VIDEO JUKEBOX NETWORK, INC.
By:
----------------------------
Name:
----------------------------
Title:
Accepted and Acknowledged: TM NO. 2 LIMITED
By:
----------------------------
Name:
----------------------------
Title:
<PAGE> 124
EXHIBIT "P"
The Directors,
Video Jukebox Network, Inc.
c/o Denton Hall
Five Chancery Lane
Clifford's Inn
London EC4A 1BU
184/313/264 30th June 1995
Dear Sirs
Stock Purchase Agreement (the "Agreement") between Video Jukebox Network Inc.,
("VJN"), Video Jukebox Network International Limited ("VJNIL") and TM No. 2
Limited (the "Company")
1. Background
We have acted for Ticketmaster Corporation in connection with the
establishment of the Company and generally in relation to the proposed
acquisition by the Company of 50% of the shares in VJNIL. We have,
throughout, received instructions from Neal Gerber & Eisenberg, legal
advisers in the United States to Ticketmaster Corporation. We have
not been directly involved in the negotiations in relation to the
proposed transaction and have confined our advice to matters of
English law. This is the opinion referred to in Section 6.02(e) of
the Agreement.
2. Documents examined, enquiries made and certificates relied upon
For the purposes of giving this opinion, we have examined the
following documents:
(a) an original copy of the Certificate of Incorporation and
Certificate of Incorporation on Change of Name of the Company
in each case certified by the Registrar of Companies as being
a true copy of the Register;
(b) a copy of the written resolution of the Board of Directors of
the Company passed on 29th June 1995 at which the
<PAGE> 125
proposed transaction, and in particular the execution of the
Agreement, was approved;
(c) a microfiche of the file kept by the Registrar of Companies
in respect of the Company furnished to us on 30th June 1995
and a certificate of good standing in respect of the Company
issued by the Registrar of Companies dated 29th June 1995;
and
(d) a copy of the draft of the Agreement marked "Final Draft".
As to questions of fact which are material to this opinion we have,
when the relevant facts were not independently established by us,
relied upon statements made in the documents, records and certificates
referred to in this opinion.
Except as mentioned above, we have made no other enquiries and
investigations covering the Company in connection with giving this
opinion, except for a telephone enquiry (the "Enquiry") made by us in
respect of the Company on 30 June 1995 to the Central Registry of
Winding-up Petitions.
3. Assumptions
In giving this opinion, we have assumed:
(a) the genuineness of all signatures, the authenticity of
documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us
as copies;
(b) that the written resolution referred to in paragraph 2(b)
above is a true record of such written resolution of the
Company and that such resolution was duly passed and remains
in full force and effect;
(c) that the Agreement:
(i) is within the capacity and powers of each of the
parties to it (other than the Company);
(ii) has been validly authorised and duly executed and
delivered by each such party;
(iii) constitutes the valid, binding and enforceable
obligations (under the laws of each applicable
jurisdiction) of each such party; and
(iv) constitutes under the laws of the State of Delaware
valid and binding obligations of the Company
enforceable in accordance with its terms;
(d) that each party's agent for service of process has accepted
the appointment;
<PAGE> 126
(e) that the Company entered into the Agreement and the
transactions contemplated by it in good faith and for the
purpose of carrying on its business and that at the time of
its doing so there were, and there still are, reasonable
grounds for believing that the Agreement and transactions
would benefit the Company;
(f) that in the case of each of the parties to the Agreement the
entry into the Agreement, the performance of its obligations
under the Agreement, and/or the transactions of which it
forms part does not constitute or involve the giving of
financial assistance in connection with the purchase of
shares in any company which is prohibited by section 151
Companies Act 1985;
(g) that all information supplied to us (orally or in writing) by
Neal Gerber & Eisenberg is true and accurate and complete in
all respects and is not misleading;
(h) that there is no fact or matter (such as a mistake or
misrepresentation before or at the time the Agreement was
entered into or a subsequent release, waiver or variation of
any right or provision) which would or might affect our
opinions which was not revealed by the steps taken by us in
connection with this opinion;
(i) that no law (other than English law) which might apply to any
of the parties to the Agreement or the transactions
contemplated in the Agreement would or might affect this
opinion; and
(j) that each of the individuals who claims to be an officer of
the Company is the individual whom he or she claims to be.
4. Opinion
Based on the examination of documents and the Enquiry referred to in
paragraph 2 and the assumptions set out in paragraph 3 above, and
subject to the qualifications set out in paragraph 5 below, we are of
the opinion that:
(a) the Company is a limited liability company duly incorporated
under the laws of England and Wales and:
(i) the microfiche and certificate referred to in
paragraph 2(c) above indicate that it is validly
existing and of good standing and does not reveal
any order or resolution for its winding-up or
administration nor any appointment of a receiver
over any or all of its assets; and
(ii) the response to the Enquiry was that no petition
for the winding-up of the Company had been
presented in the preceding six months;
<PAGE> 127
(b) the Company has power to enter into and perform the Agreement;
(c) all necessary corporate action has been taken by the Company
to authorise the execution, delivery and performance by it of
the Agreement;
(d) the Agreement has been duly executed and delivered on behalf
of the Company and constitutes valid and binding obligations
of the Company enforceable in accordance with its terms;
(e) the execution, delivery and performance by the Company of the
Agreement does not and will not contravene any existing
applicable statute or other law to which the Company is
subject in England or conflict with, result in any breach of
or constitute a default under or pursuant to the provisions
of its constitutional documents or (so far as we are aware,
based only on our knowledge of matters which we are currently
handling on behalf of the Company, having made no enquiries
of any person and having carried out no investigations)
contravene or conflict with, result in any breach of or
constitute a defaultunder or pursuant to any agreement or
document to which the Company is a party or by which it is
bound at the date of this opinion;
(f) so far as we are aware (based only on our knowledge of
matters which we are currently handling on behalf of the
Company, having made no enquiries of any person and having
carried out no investigations), there are no actions, suits
or proceedings pending against the Company in the English
courts which, if adversely determined, would have a material
adverse effect upon the ability of the Company to perform its
obligations under the Agreement;
(g) (except in relation to approvals required to be obtained from
and/or notifications and registrations required to be made at
the Office of Fair Trading and the European Commission) to
ensure the legality, validity, enforceability and
admissibility into evidence of the Agreement in England and
Wales, no declaration, filing or registration with any court,
governmental agency or other similar authority or body in
England and Wales need be made; no consent, licence, permit,
order, decree, authorisation or approval of any such
authority or body is required; and
(h) the Company is subject to the laws of England and Wales and
neither it nor any of its property or assets enjoys any right
of immunity from any judicial proceedings in England and
Wales.
For the purpose of this opinion "duly incorporated" means that the
requirements of the Companies Act(s) applicable at the date of
<PAGE> 128
incorporation of the Company in respect of registration and of matters
precedent and incidental to it have been complied with and that the
company is authorised to be registered and is duly registered under
that or those Acts.
For the purposes of this opinion "validly existing" means that the
Company is subsisting at the date of this opinion and has not been
struck off the register maintained by the Registrar of Companies for
England and Wales, nor has it been dissolved, nor has it ceased to
exist by reason of any merger or consolidation or limitation on the
duration of its existence.
5. Qualifications
This opinion is given subject to the following qualifications:
(a) this opinion relates only to the laws of England and Wales in
force at today's date. We express no opinion with regard to
the laws of any other jurisdiction. In this regard, we note
in particular that the Agreement is expressed to be governed
by the laws of the State of Delaware and we have assumed that
insofar as such laws govern it the obligations of the Company
under the Agreement constitute its legal, valid and binding
obligations under the laws of State of Delaware enforceable
in accordance with its terms;
(b) the microfiche referred to in paragraph 2(c) might not have
been up-to-date, complete and accurate as at the date it was
furnished to us. For example, matters which should have been
registered may not have been registered; particulars of such
matters may have been lodged with the Registrar of Companies
for registration but not included in the Company's file
and/or the microfiche may not be an accurate copy of the
Company's file;
(c) the response to an enquiry such as the Enquiry relates only
to petitions for the compulsory winding-up of the relevant
company presented within the six months prior to the date of
the Enquiry and entered on the records of the Central
Registry of Winding-up Petitions. The presentation of such a
petition may not have been notified to the Central Registry
or entered on such records immediately or, if presented to a
County Court, at all;
(d) there is no requirement to register the presentation of a
petition for the receivership or winding-up of, or for an
administration order in respect of, a company with the
Registrar of Companies. Notice of a winding-up or
administration order having been made, a winding-up
resolution having been passed or a receiver having been
appointed may not be filed with the Registrar of Companies
immediately and may not appear from a search made of the
public file immediately after having been filed or at all.
<PAGE> 129
Hence such a matter might apply to the Company but not appear
on the relevant microfiche;
(e) where in paragraph 4(d) we say that the Agreement will
constitute valid and binding obligations of the Company
enforceable in accordance with its terms we mean that the
obligations of the Company under the Agreement are of a type
which would, if an English court took jurisdiction in the
matter and if the Agreement were governed by English law, be
enforced by the English courts. It does not mean that those
obligations would necessarily be enforced by an English
court, even if it took jurisdiction and if English law
applied, in all circumstances in accordance with its terms.
In particular:
(i) enforcement may be limited by administration,
bankruptcy, insolvency, liquidation,
re-organisation, and other rules of general
application relating to or affecting the rights of
creditors including without limitation the effect
of laws relating to fraudulent and voidable
preferences and transactions at an undervalue;
(ii) enforcement may be limited by general principles of
equity - for example, equitable remedies may not be
available where damages are considered to be an
adequate remedy;
(iii) claims may become barred under the Limitation Acts
or may be or become subject to defences of set-off
or counterclaim;
(iv) the English courts will not enforce obligations in
the nature of a fine or penalty;
(v) an English court might not enforce an obligation
which is or becomes illegal by the law of a foreign
jurisdiction in which it is to be performed or
contrary to the public policy or exchange control
regulations of a foreign jurisdiction;
(vi) an undertaking by a company which constitutes a
fetter on its right to exercise its statutory
powers (for example, to issue new shares) is void;
and
(vii) a provision requiring payments to be made without
deductions or withholdings will not be enforced if
a deduction or withholding is made pursuant to a
legal obligation;
(viii) section 9.07 (severability) of the Agreement might
not be enforceable in all circumstances;
<PAGE> 130
(ix) a court might hold that the parties to the
Agreement may amend it by oral agreement
notwithstanding section 9.11 (amendments) of that
document;
(x) to the extent that the Agreement provides for an
indemnity to be given by the Company in respect of
costs and expenses resulting from a breach by it of
the terms of the Agreement or otherwise, an English
court may refuse to give effect to that provision
in respect of the costs of unsuccessful litigation
brought before an English court or where the court
has itself made an order for costs;
(xi) while the English courts are prepared to render
judgment for a monetary amount in foreign
currencies, a judgment may be converted into
English pounds sterling for the purposes of
enforcement (save only in respect of garnishee
proceedings where enforcement can be in the
appropriate foreign currency); also, amounts
denominated in foreign currencies and claimed in an
English liquidation proceeding must be converted
into English pound sterling at the exchange rate
prevailing at the commencement of the liquidation;
(xii) the provisions relating to the service of process
anywhere in the world will not necessarily be
effective as regards proceedings in England and
Wales against the Company unless service is
effected at the registered office for the time
being of that Company or by some other means
permitted by the English court or the applicable
rules of the English courts;
(xiii) a third party which is not party to the Agreement
will have no rights or obligations pursuant to the
Agreement against or to any party to the Agreement;
(xiv) all provisions under which one party purports to
indemnify another against criminal liability, stamp
duty or certain matters relating to stamp duty
liability are void or unenforceable;
(f) we give no opinion as to the tax liability of any party under
or in respect of the Agreement;
(g) no liability shall be assumed by us in respect of any matter
which would or might relate to:
(i) the assets of the Company and its title to them;
(ii) the value of the shares in the Company; or
(iii) the accuracy or completeness of any representations
or warranties made by the Company in the Agreement.
<PAGE> 131
This opinion is addressed to you solely for your own use and neither it nor any
copy of it may be shown to or relied upon by anyone else or quoted or referred
to in any public document or filed with any governmental agency or any other
person without our prior written consent. The opinion is strictly limited to
the matters set out above and does not extend to and is not to be read as
extending by implication to any other matter.
This opinion shall be governed and construed in accordance with English law.
Any claim arising in connection herewith shall only be brought in the Courts of
England.
Yours faithfully
<PAGE> 132
EXHIBIT "Q"
June 30, 1995
TM No. 2 Limited
3701 Wilshsire Boulevard
Suite 700
Los Angeles, California
Re: Purchase of Capital Stock of Video Jukebox Network
International Limited by TM No. 2 Limited
Ladies and Gentlemen:
We have acted as counsel to Video Jukebox Network, Inc. ("VJN") in
connection with the Stock Purchase Agreement dated as of June 30, 1995 (the
"Purchase Agreement") among VJN, Video Jukebox Network International Limited
("VJNIL") and TM No. 2 Limited ("TM"), and the transactions specifically
referred to therein.
Capitalized terms otherwise defined herein are defined as set forth in
the Purchase Agreement. This opinion is being furnished pursuant to Section
6.03(e) of the Purchase Agreement, and is given with the consent of TM.
This opinion has been prepared and is to be construed in accordance
with the Report on Standards For Florida Opinions dated April 8, 1991 issued by
the Business Law Section of the Florida Bar (the "Report"). The Report is
incorporated by reference in this opinion.
We do not express any opinion concerning any law other than the laws
of Florida, the federal law of the United States and, while we are not
qualified to practice law in Delaware, we have expressed an opinion regarding
the application of Delaware law, based on the assumption that Delaware law is
similar in all material aspects to Florida law. Furthermore, we are not
conversant with the laws applicable to patents, trademarks, trade names,
copyrights, intellectual property, or communications matters, and accordingly
express no opinion as to VJN's patents (or the licensing or rights thereunder),
trademarks, trade names, copyrights, other intellectual property rights or any
aspect of the transactions relating to such rights and/or VJN's business
regulated by the Federal Communications Commission or any similar state
regulatory authority.
In rendering the following opinion, we have relied, with your
approval, as to factual matters that affect our opinion and not as to legal
conclusions, solely on our examination of the following documents, and have
made no independent verification of the facts asserted to be true and correct
in those documents, including, without
<PAGE> 133
TM No.2 Limited
June 30, 1995
Page 2
limitation, the factual representations and warranties contained in the
Purchase Agreement:
(i) The Third Amended and Restated Articles of
Incorporation of VJN;
(ii) VJN's Bylaws;
(iii) A Certificate of Good Standing of VJN, dated June
26, 1995 and issued by the Florida Secretary of State;
(iv) Officer's Certificate delivered by Luann M. Simpson,
Chief Financial Officer and Secretary of VJN, a copy of which is
attached hereto as Exhibit "A";
(v) Officer's Certificate delivered by Luann M. Simpson,
Chief Financial Officer and Secretary of VJN, a copy of which is
attached hereto as Exhibit "B";
(vi) A Certificate of Incumbency of VJN, delivered by
Luann M. Simpson, Chief Financial Officer of VJN, a copy of which is
attached hereto as Exhibit "C"; and
(vii) The Purchase Agreement and executed counterparts of
all other agreements which VJN has executed and delivered in
connection with all of the transactions specifically referred to in
the Purchase Agreement (all of which are collectively referred to
hereinafter as the "Transaction Agreements").
Based upon the foregoing, and subject to the qualifications and
limitations stated in this letter, we are of the opinion that:
1. VJN has been incorporated and was organized under the Florida
General Corporation Act and its status is active.
2. VJN has the corporate power and authority to conduct its
business and to execute and deliver the Transaction Agreements and to perform
its obligations under the Transaction Agreements.
3. To our knowledge, after limited investigation, and except as
set forth in Schedule 3.06 of the Purchase Agreement, there are no pending or
overtly threatened actions, claims, investigations or other proceedings against
VJN.
4. VJN has authorized the execution, delivery and performance of
the Transaction Agreements by all necessary corporate action, and the
Transaction Agreements have been executed and delivered by VJN.
5. The execution and delivery of the Transaction Agreements and
the performance of all of the transactions contemplated to be performed by VJN
pursuant to the Transaction Agreements do not (i) violate VJN's Third Amended
and Restated Articles of Incorporation or Bylaws; (ii) to our knowledge after
due inquiry, constitute
<PAGE> 134
TM No.2 Limited
June 30, 1995
Page 3
a breach of or a default under any agreement or instrument to which VJN is a
party or by which its assets are bound or result in the creation of a mortgage,
security interest or other encumbrance upon the assets of VJN; (iii) to our
knowledge after due inquiry, violate any judgement, decree or order of any
court or administrative tribunal, which judgement, decree or order is binding
on VJN or its assets; or (iv) violate any Federal or Florida law, rule or
regulation.
6. Upon delivery of the Shares to TM and payment in accordance
with the Purchase Agreement, TM will acquire the ownership rights to the Shares
free, to our knowledge, of all adverse claims of which TM did not have notice.
7. No notice, report or other filing or registration with, and no
consent, approval or authorization of any Federal, Florida or local
governmental authority is required to be submitted, made or obtained by VJN in
connection with the execution, delivery and performance by VJN of the
Transaction Agreements, which if not obtained, could have a Material Adverse
Effect on the transactions specifically referred to in the Transaction
Agreements.
8. Subject to the limitations contained in the next paragraph,
the Transaction Agreements are valid and binding obligations of VJN enforceable
under the law of Florida, Delaware and the Federal law of the United States.
Our opinion concerning the validity, binding effect and enforceability
of the Transaction Agreements means that (a) each of the Transaction Agreements
constitutes an effective contract under applicable law, (b) each of the
Transaction Agreements is not invalid in its entirety because of a specific
statutory prohibition or public policy and is not subject in its entirety to a
contractual defense, and (c) subject to the last sentence of this paragraph,
some remedy is available if VJN is in material default under any one of the
Transaction Agreements. This opinion does not mean that: (a) any particular
remedy is available upon a material default, or (b) every provision of each of
the Transaction Agreements will be upheld or enforced in any or each
circumstance by a court. Furthermore, the validity, binding effect and
enforceability of any one or more of the Transaction Agreements may be limited
or otherwise affected by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar statutes, rules, regulations
or other laws affecting the enforcement of creditor's rights and remedies
generally and (b) the unavailability of, or limitation on the availability of,
a particular right or remedy (whether in a proceeding at equity or at law)
because of an equitable principle or a requirement as to commercial
reasonableness, conscionability or good faith.
In rendering the foregoing opinion, we have not expressed an opinion
on any State or Federal securities laws or regulations.
This opinion is furnished to you by us as counsel for VJN, is solely
for your benefit and is rendered solely in connection with the transactions
specifically referred to in the Transaction Agreements. This opinion may be
relied upon only in connection
<PAGE> 135
TM No.2 Limited
June 30, 1995
Page 4
with such transactions and may not be relied upon by any other person without
our prior written consent.
Very truly yours,
<PAGE> 136
SCHEDULE 3.04
No Conflict
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
5. The Home Insurance Company of Illinois Insurance policy (No.
PDO-F-922212-4/000) will cease to cover VJNIL upon the closing of the
contemplated transaction.
6. The Employers Reinsurance Corporation Broadcasters Broad Form
Defamation and Associated Risks Policy (No. RLS-004814-R) will cease
to cover VJNIL upon the closing of the contemplated transaction.
<PAGE> 137
SCHEDULE 3.05
Consents and Approvals
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
<PAGE> 138
SCHEDULE 3.06
Litigation
On August 30, 1991, Video Jukebox Network, Inc. (the "Company") filed
a complaint (the "Complaint") against Donald L. Barone, Jr. ("Barone"), Kenneth
Trzecki, Harry Griendling and Healthcare Communications, Incorporated
(collectively, "HCI") in the Circuit Court of the Seventeenth Judicial Circuit
in and for Broward County, Florida. Harry Griendling has been dismissed from
the action with prejudice. The Complaint alleges that: (I) in or about August
1991, Barone, while an employee of the Company, wrongfully and intentionally
removed certain proprietary materials used in connection with the development
and marketing of an interactive employment television program owned by the
Company, as well as certain other property owned by and entrusted to the
Company by third parties which was used in connection with the development of
the interactive employment television program (collectively, the "Property");
and (ii) HCI fraudulently induced the Company to enter into a business
relationship with HCI for the purpose of financially exploiting the Company.
The Complaint sought the issuance of a prejudgment writ of replevin and a
temporary and permanent injunction, compensatory damages and other relief.
On September 3, 1991, the Court granted the Company's motions, issued
a prejudgment writ of replevin requiring return of the Property to the Company
during the pendency of the case, and issued a temporary injunction precluding
third parties from possessing, using and/or enjoying the benefits of the
Property.
On October 31, 1991, HCI filed an answer, affirmative defenses and
counterclaim against the Company for breach of contract and fraudulent
inducement. HCI also filed a third party summons and complaint against the
then President of the Company, alleging fraudulent inducement by him. HCI
denied all the material allegations contained in the Complaint and alleged
that: (i) the Company fraudulently induced HCI to enter into a business
relationship with the Company; (ii) the Company had no right of possession and
no ownership interest in the Property; and (iii) Barone had no authority to
transfer the Property owned by HCI to the Company. HCI also alleged that the
Property was developed pursuant to a joint venture agreement between HCI and
the Company and that the Company breached such agreement. The counterclaim
seeks compensatory damages and other relief from the Company, and the third
party complaint seeks compensatory damages and other relief from the then
President of the Company. The Company and its former President believe the
claims asserted by HCI are without merit. The Company and its former President
have denied HCI's allegations, moved to dismiss the claims and have been
vigorously defending the action while pursuing the Company's claims against
HCI. The Company has agreed to indemnify and hold harmless the former
President of the Company for any costs and liability incurred by him in this
litigation.
HCI subsequently filed a motion to dissolve the orders granting the
Company the writ of replevin and temporary injunction. On October 8, 1991, the
Circuit Court dissolved the writ of replevin and temporary injunction. On
October 31, 1994, the Circuit Court determined that HCI was entitled to
attorneys fees in the amount of $22,665 and costs of $2,490. The Company paid
such sum from the $35,000 bond amount which had been deposited with the Circuit
Court in 1991. In the claim for damages for the wrongful replevin, Barone was
seeking damages for his claim of mental pain and suffering as a result of the
Company seeking the writ of replevin and executing
<PAGE> 139
such writ through the lawful means of the Sheriff of Broward County. HCI was
seeking: (I) attorneys' fees in excess of $100,000 concerning the dissolution
of the writ and for the proceedings related to the issue of damages; and (ii)
damages for loss of the use of the property seized. The Circuit Court has
determined that additional damages, if any, as a result of the wrongful
issuance of the prejudgment writ of replevin and temporary injunction could not
be determined until a final judgement is rendered on the merits of the case.
On August 30, 1991, HCI filed a summons with notice (the "Summons") in
the State of New York Supreme Court in the County of Erie. In the Summons, HCI
threatened to file a complaint against the Company for purported damages of
$100 million for alleged tortious interference with contractual relations
between HCI and unidentified third parties, for negligent and intentional
misrepresentation and for breach of express and implied contract. The Summons
also states that HCI will seek a declaratory judgment to determine ownership
rights to the Property. However, since August 30, 1991, HCI has neither filed
a complaint against the Company nor taken any further action. The Company
believes that the allegations of HCI as stated in the Summons are without
merit. The Company will fully and vigorously respond to such allegations if a
formal complaint is filed against it by HCI.
<PAGE> 140
SCHEDULE 4.02
Capitalization of VJNIL
<TABLE>
<CAPTION>
Number of
Stockholder Ordinary Shares
----------- ---------------
<S> <C>
Video Jukebox Network, Inc. 602
</TABLE>
Any and all preemptive rights of Monsey and VJN in the common stock of VJNIL
have been waived on or prior to the date hereof.
<PAGE> 141
SCHEDULE 4.04
No Conflict
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rightsregarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
5. The Home Insurance Company of Illinois Insurance policy (No.
PDO-F-922212-4/000) will cease to cover VJNIL upon the closing of the
contemplated transaction.
6. The Employers Reinsurance Corporation Broadcasters Broad Form
Defamation and Associated Risks Policy (No. RLS-004814-R) will cease
to cover VJNIL upon the closing of the contemplated transaction.
<PAGE> 142
SCHEDULE 4.05
Consents and Approvals
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
<PAGE> 143
SCHEDULE 4.06
Litigation
VJNIL was in dispute with Dolphin Head Group Holdings Plc ("Dolphin")
relating to the occupation by VJNIL of certain premises known as Unit or Suite
5, Camberley House, Portesbery Road, Camberley, Surrey and Unit 6, Camberley
House, 85 High Street, Camberley, Surrey. A writ was served on VJNIL dated
September 14, 1994 claiming a total of L.15,135.51 plus interest and costs. A
Defense dated October 27, 1994 was served by VJNIL. The matter was settled by
mutual consent on May 11, 1995 - a payment of L.6,850.00 was made by VJNIL to
Dolphin's solicitors on behalf of Dolphin. A consent order was issued by the
court on May 12, 1995 ordering that no order should be made in respect of
Dolphin's claim against VJNIL, save that VJNIL pay the costs of the action
brought by Dolphin against VJNIL, such costs to be taxed if not agreed. The
costs are in the process of being taxed and Clintons has estimated that the
taxed costs are likely to be in the region of L.10,000.00 - L.20,000.00.
<PAGE> 144
SCHEDULE 4.07
Financial Information
None
<PAGE> 145
SCHEDULE 4.09
Receivables
None
<PAGE> 146
SCHEDULE 4.11
Conduct of Business in the Ordinary Course
None
<PAGE> 147
SCHEDULE 4.12
Compliance with laws
1. As mentioned in the minutes of a meeting of the Board of Directors of
VJNIL held on April 26, 1993, VJNIL was at that date in arrears in
respect of the payment of tax under the PAYE scheme, in the amount of
approximately L.40,000. These arrears, together with any interest and
penalties thereon, have since been paid.
2. VJNIL obtains all advertisements shown on "The Box" from advertising
agencies. VJNIL does not analyze advertisements shown on "The Box"
for compliance with any codes of advertising standards or similar
codes. Consequently, there can be no assurance that VJNIL is in
compliance with any applicable codes of advertising standards.
3. VJNIL is not registered under the Data Protection Act 1984.
Nevertheless, VJNIL submitted an application for registration under
such act to the Registrar on June 14, 1995.
4. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 12, 1994.
<PAGE> 148
SCHEDULE 4.13(A)
Material Contracts
1. Shareholders Agreement, dated March 4, 1992, among VJNIL, Vincent
Monsey and VJN.
2. Escrow Agreement, dated March 4, 1992, among Vincent Monsey, VJN,
Alsop Wilkinson and VJNIL.
3. Hire-Purchase Agreement for a Ford Escort 1.4 LX dated August 5, 1993.
4. Telephone equipment rental agreement, dated July 3, 1992, between
VJNIL and Telecom Rentals Limited.
5. International Management Agreement, dated December 31, 1993, among
VJN, VJNIL and Communications Equity Associates, Inc.
6. CEA Financing Representation Agreement, dated February 11, 1992,
between VJNIL and Communications Equity Associates International
Limited
7. Director's Service Agreement of Vincent Monsey, dated March 4, 1992.
8. BT Callstream Service Agreement, dated July 22, 1994, between VJNIL
and British Telecommunications Plc.
Video Performance Limited
9. Heads of Agreement, dated February 11, 1994, regarding License
Agreement between Video Performance Limited and VJNIL.
Details of VJNIL's current relationship and on-going negotiations with
Video Performance Limited have been disclosed to Ticketmaster,
pursuant to the following correspondence, copies of which have been
provided to Ticketmaster:
a) copy letter dated 9/29/94 from Clintons solicitors to VJNIL;
b) copy letter dated 9/30/94 from VJNIL to VPL;
c) copy letter dated 11/1/94 from Clintons to VPL;
d) copy letter dated 11/9/94 from VPL to Clintons;
e) copy letter dated 11/16/94 from VPL to Clintons;
f) copy letter dated 11/21/94 from Clintons to VPL;
g) copy letter dated 11/29/94 from VPL to Clintons;
h) copy letter dated 11/29/94 from Clintons to VPL;
i) copy letter dated 12/6/94 from Clintons to VPL;
j) copy letter dated 12/6/94 from VPL to Clintons;
k) copy letter dated 12/8/94 from Clintons to VPL;
l) copy letter dated 12/21/94 from VPL to Clintons;
<PAGE> 149
m) copy letter dated 1/3/95 from Clintons to VPL;
n) copy letter dated 1/26/95 from Clintons to VPL;
o) copy letter dated 2/9/95 from VPL to Clintons;
p) copy letter dated 2/13/95 from Clintons to VPL;
q) copy letter dated 2/13/95 from VPL to Clintons enclosing the
proposed draft License Agreement;
r) letter dated 5/24/95 from Lucio, Mandler, Croland, Bronstein &
Steele, P.A. to Neal, Gerber & Eisenberg, enclosing latest
draft of proposed license agreement.
ITC
10. License granted to VJNIL by the Independent Television Commission,
dated February 11, 1992.
Insurance
11. Home Insurance Company of Illinois Insurance policy (No.
PDO-F-922212-4/000) for VJN for the period from December 6, 1994 to
December 6, 1995 with a premium of $137,500.00.
12. Employers Reinsurance Corporation Broadcasters Broad Form Defamation
and Associated Risks Policy (No. RLS-004814-R) for VJN for the period
from June 19, 1995 to June 19, 1996 with a premium of $9,570.
13. Cover note from Thompson Heath & Bond Ltd. for Commercial Combined
Insurance (No. 664/2662001E) for VJN for the period from August 7,
1994 to August 6, 1995 with a premium of $19,875.
14. The Insurance Company of the State of Pennsylvania Insurance policy
(No. 80-259277) for VJN from May 1, 1995 to May 1, 1996 with a premium
of $2,500.
15. Eagle Star Insurance Company Limited Wide Angle Media Combined Policy
(policy number unknown at this time) from June 10, 1995 to June 9,
1996 with a premium of L.571.95.
16. Eagle Star Insurance Company Limited Office Combined Policy
(002/820/J0000859/3) from June 2, 1995 to June 2, 1996 with a premium
of L.1,224.65.
Property
17. Underlease relating to Second Floor, Imperial House, 11/13 Young
Street, Kensington, London W8, dated February 3, 1994, between Office
Angels Limited and Video Jukebox Network International Limited and an
Order Authorizing Exclusion of provisions of Sections 24 to 28 of the
Landlord and Tenant Act 1954 dated February 7, 1994 in the Shoreditch
County Court.
18. License to Underlet property, dated February 1, 1994, relating to
Second Floor, 11/13 Young Street, London W8 among Archly Corporation
N.V., Office Angels Limited and VJNIL .
19. Lease, dated May 2, 1991, between Newdaze Limited and Office Angels
Limited.
<PAGE> 150
20. Lease, dated January 31, 1972, between City Centre Properties Limited
and The Imperial Life Assurance Company of Canada.
21. Lease, dated February 8, 1995, between VJNIL and Archly Corporation
N.V.
Cable Operators
See attached sheet
<PAGE> 151
SCHEDULE 4.13(B)
Material Contracts - Exceptions
1. The Shareholders Agreement among VJNIL, Vincent Monsey and VJN, dated
April 4, 1992 will be terminated immediately prior to the Closing.
2. The Escrow Agreement among Vincent Monsey, VJN, Alsop Wilkinson and
VJNIL, dated March 4, 1992, will be terminated immediately prior to
Closing.
3. The International Management Agreement, dated December 31, 1993, among
VJN, VJNIL and Communications Equity Associates, Inc., only so far as
it relates to VJNIL, was terminated on June 30, 1995.
4. The CEA Financing Representation Agreement, dated February 11, 1992,
between VJNIL and Communications Equity Associates International
Limited was terminated on June 30, 1995.
5. The Director's Service Agreement of Vincent Monsey, dated March 4,
1992, will be terminated at Closing and will be replaced by a new
employment agreement.
6. The Home Insurance Company of Illinois Insurance policy (No.
PDO-F-922212-4/000) will cease to cover VJNIL upon the closing of the
contemplated transaction.
7. The Employers Reinsurance Corporation Broadcasters Broad Form
Defamation and Associated Risks Policy (No. RLS-004814-R) will cease
to cover VJNIL upon the closing of the contemplated transaction.
8. VJNIL received a renewal notice for the Eagle Star Insurance Company
Limited Wide Angle Media Combined Policy, for the current period, on
June 29, 1995. Coverage will only remain in effect for the period
indicated, so long as VJNIL pays the premium within 14 days of the
renewal notice.
<PAGE> 152
SCHEDULE 4.15
Real Property
PREVIOUS PREMISES
Comfrey House, Comfrey Close, Cove, Hampshire GU14 9XX
Camberley House, Portesbery Road, Camberley, Surrey GU15 3SZ
PRESENT PREMISES
The Leasehold Premises known as First and Second Floors, Imperial House, 11/13
Young Street, Kensington, London W8
<PAGE> 153
SCHEDULE 4.16
Assets
None
<PAGE> 154
SCHEDULE 4.17
Suppliers
None
<PAGE> 155
SCHEDULE 4.18(A)
Taxes
1. As mentioned in the minutes of a meeting of the Board of Directors of
VJNIL held on April 26, 1993, VJNIL was at that date in arrears in
respect of the payment of tax under the PAYE scheme, in the amount of
approximately L.40,000. These arrears, together with any interest and
penalties thereon, have since been paid.
2. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 19, 1994.
<PAGE> 156
SCHEDULE 4.18(B)
Taxes
None
<PAGE> 157
SCHEDULE 5.01
The sole stockholder of TM No. 2 Limited is Ticketmaster Corporation,
an Illinois corporation.
<PAGE> 158
Schedule 5.04
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster Corporation, notified the Independent Television
Commission of this Agreement. Within 28 days of Closing, Borrower
must notify the Independent Television Commission of completion of
this transaction pursuant to the terms of its license (License Number
LPSO44 dated February 11, 1992) from the Independent Television
Commission.
<PAGE> 1
8-K
EXHIBIT 99.10
<PAGE> 2
LICENSE AGREEMENT
between
VIDEO JUKEBOX NETWORK, INC.
a Florida corporation
and
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
an English company
June 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 - General Provisions
1.1 Term ........................................ 2
1.2 Territory ................................... 2
1.3 Licensed Business ........................... 3
1.4 Best Efforts ................................ 3
1.5 Hold Harmless ............................... 4
1.6 Licensing Fees .............................. 5
1.7 Acknowledgement of Licensor ................. 6
1.8 Accounting and Recordkeeping ................ 7
1.9 Insurance ................................... 8
1.10 Programming Approval ........................ 8
1.11 Expenses .................................... 10
1.12 Termination ................................. 11
1.13 Cessation of Operations ..................... 12
1.14 Infringements ............................... 14
1.15 Covenant to Defend .......................... 15
1.16 Disputes .................................... 16
1.17 Force Majeure ............................... 17
1.18 Severability ................................ 17
1.19 Transferability ............................. 18
1.20 Notices ..................................... 22
1.21 Applicable Law .............................. 23
1.22 Schedules ................................... 23
1.23 Waiver ...................................... 24
1.24 Entire Agreement ............................ 24
1.25 Confidentiality ............................. 25
1.26 Counterparts ................................ 25
ARTICLE 2 - Trade Name License
2.1 Grant ....................................... 26
2.2 Ownership ................................... 26
2.3 Quality Standards ........................... 27
2.4 Quality Maintenance ......................... 28
2.5 Form of Use ................................. 29
2.6 Infringements ............................... 29
ARTICLE 3 - Service Mark License
3.1 Grant ....................................... 31
3.2 Ownership ................................... 31
3.3 Quality Standards ........................... 33
3.4 Quality Maintenance ......................... 33
3.5 Form of Use ................................. 34
3.6 Infringements ............................... 34
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 4 - Trade Mark License
4.1 Grant ....................................... 36
4.2 Ownership ................................... 37
4.3 Quality Standards ........................... 38
4.4 Quality Maintenance ......................... 39
4.5 Form of Use ................................. 40
4.6 Infringements ............................... 40
4.7 Sublicenses ................................. 42
ARTICLE 5 - Copyright License
5.1 Grant ....................................... 43
5.2 Ownership ................................... 43
5.3 Alteration .................................. 44
5.4 Distribution and Publication ................ 46
5.5 Infringements ............................... 46
5.6 Third Party Works ........................... 48
ARTICLE 6 - Trade Secrets Proprietary Information
6.1 Grant ....................................... 49
6.2 Ownership ................................... 50
6.3 Copies ...................................... 50
6.4 Disclosure to Employees ..................... 50
6.5 Markings .................................... 51
6.6 Reverse Engineering ......................... 52
6.7 Infringement ................................ 52
SCHEDULES
A. Licensed Service Marks ...................... A1
B. Licensed Trade Marks ........................ B1
C. Licensed Copyrighted Works .................. C1
D. Licensed Trade Secrets ...................... D1
</TABLE>
-ii-
<PAGE> 5
LICENSE AGREEMENT
This license agreement is made as of this 30th day of June, 1995 by
and between Video Jukebox Network, Inc., a corporation organized and existing
under the laws of the state of Florida, having its principal place of business
at 1221 Collins Avenue, Miami Beach, Florida 33139, United States of America
[hereinafter "Licensor"] and Video Jukebox Network International Limited, a
company organized and existing under the laws of England and Wales, having a
place of business at Imperial House, 11/13 Young Street, Kensington, London,
England W8 5EH [hereinafter "Licensee"].
WHEREAS, Licensor is the owner of certain trademarks, service marks,
trade name, copyrights, trade secrets, proprietary technical and business
information, engineering data and specifications and designed equipment used in
connection with the operation and promotion of an interactive music television
service; and,
WHEREAS, Licensee desires to acquire an exclusive license to use said
trademarks, service marks, trade name, copyrights, trade secrets, proprietary
technical and business information, engineering data and specifications and
designed equipment in connection with the operation and promotion of an
interactive music television service.
NOW THEREFORE, in consideration of the mutual promises and convenants
hereinafter set forth, the sufficiency of which is acknowledged, the parties
agree:
ARTICLE 1 - GENERAL PROVISIONS
1.1 Term
This exclusive License is for a term of twenty-five (25) years
commencing on the date first written above. Licensee at its option may renew
the License for additional terms of ten (10) years each, provided, however,
that the following conditions are met:
A. Licensee is operating the Licensed Business in the Territory
utilizing in connection with the Licensed Business (as defined
below) a substantial portion of the portfolio of intellectual
property rights licensed hereunder at the time of renewal;
B. All royalties and expenses due hereunder to Licensor are paid in
full and no amount is due and outstanding;
<PAGE> 6
C. Licensee is not in material breach of any of the terms and
conditions of the License.
1.2 Territory
This License is for the following territory: The United Kingdom of
Great Britain and Northern Ireland and The Republic of Ireland (hereinafter
"the Territory"). The Territory shall not include any dependencies, colonies or
territories of the United Kingdom outside the boundaries of Great Britain and
Northern Ireland.
1.3 Licensed Business
This License is for use in connection with television, cable and
similar programming and broadcasting services (interactive or non-interactive),
marketing, advertising, sales, concert and related music promotions,
merchandising and home shopping projects and all other promotions and ventures
in which Licensee is engaged in the Territory as of the date hereof, and any
similar or related activities in which Licensee may become engaged during the
term of this License (hereinafter the "Licensed Business").
1.4 Best Efforts
Licensee shall exercise its reasonable best efforts to develop,
promote and expand within the Territory the Licensed Business and shall not
knowingly take any actions which in any way would injure, damage, dilute or
otherwise harm Licensor, the licensed rights, goodwill or any other of its
properties or rights.
1.5 Hold Harmless
A. Licensee shall hold Licensor harmless for any injury to its
business, goodwill, reputation, property or licensed rights in the Territory
arising from Licensee's use of the intellectual property rights licensed
hereunder in violation of this License and shall indemnify Licensor and shall
make it whole for any award of monetary damages, including but not limited to
reasonable attorney's fees, costs, punitive and/or compensatory damages or any
other claims made by third parties arising from Licensee's use of the
intellectual property rights licensed hereunder in violation of this License;
provided, however, Licensee shall not be liable for any injuries to Licensor
caused by or resulting from (a) Licensor's gross negligence or willful
misconduct or (b) actions or omissions of Licensee taken with or pursuant to
Licensor's approval as a shareholder of Licensee. Any indemnification required
by this Section shall be made by periodic payments to Licensor as and when the
bills are
2
<PAGE> 7
received or costs, disbursements or expenses are incurred.
B. Licensor shall hold Licensee harmless for any (a) injury to its
business, goodwill, reputation, property or rights under this License arising
out of, resulting from, or relating to the ownership or use, prior to the date
of this License, of any of the intellectual property rights licensed to
Licensee hereunder or (b) material breach by Licensor of its representations
and warranties with respect to the intellectual property licensed hereunder,
and Licensor shall indemnify Licensee and make it whole for any award of
monetary damages, including but not limited to reasonable attorney's fees,
costs, punitive and/or compensatory damages or any other claims made by third
parties arising out of, resulting from, or relating to the foregoing clauses
(a) and (b). Any indemnification required by this Section shall be made by
periodic payments to Licensee as and when the bills are received or costs,
disbursements or expenses are incurred.
1.6 Licensing Fees
A. Licensee shall pay to Licensor an annual flat licensing fee of
ten thousand dollars US ($10,000.00) in consideration of the use of the
intellectual property rights licensed hereunder.
B. Said licensing fee shall be paid annually on the anniversary date
of the License.
C. In the event that Licensor no longer owns an interest in the
Licensee company, the licensing fee provisions hereof shall be negated and
substitute royalty provisions as set forth in Paragraph 1.19E of the License
shall take effect.
D. Such licensing fee shall be paid to Licensor by payment in the
United States at the hereinafter stated address in Miami Beach, Florida.
Licensee shall withhold from the payments required hereunder to be remitted to
the Licensor the proper amount of tax applicable thereto as may be required by
the applicable governmental authorities at the time of payment.
1.7 Acknowledgment of Licensor
Licensor hereby acknowledges that the intellectual property licensed
to Licensee hereunder constitute all trademarks, service marks, trade names,
copyrights, trade secrets, proprietary technical and business information,
know-how and other assets (together with the right to obtain all improvements,
enhancements and derivatives of the same) that Licensor owns or has rights to
use that are necessary for Licensee to operate the Licensed Business in a
manner that
3
<PAGE> 8
substantially replicates Licensor's interactive music television service as
currently operated in the United States and, with respect to improvements,
enhancements and derivatives, as may be operated in the future; provided
however, that Licensee's rights to use the intellectual property licensed to it
hereunder are no greater than, and Licensee is subject to the same restrictions
and limitations (including without limitation, superior rights of third
parties) as are applicable to Licensor's rights to use the same within the
Territory.
1.8 Accounting and Recordkeeping
A. Licensee shall keep and maintain, at its principal office,
records of its revenues with respect to sales covered by this License.
Licensor and its authorized representatives shall have access to Licensee's
premises during normal business hours to examine such records upon not less
than ten (10) days written notice to Licensee, which examination shall in no
way unreasonably interfere with Licensee's conduct of its business.
B. No later than forty-five (45) days after the last day of March,
June, September and December during the term of this License, Licensee shall
deliver to Licensor financial information with respect to sales subject to this
License for the immediately preceding calendar quarter including, but not
limited to, its gross revenues, sales, returns, advertising and viewer
revenues.
C. Licensor may, at its expense and not more than once in a twelve
(12) month period, audit the books and records of Licensee after reasonable
notice of not less than ten (10) business days. Said audit shall in no way
unreasonably interfere with Licensee's conduct of its business.
1.9 Insurance
A. Licensee shall maintain general liability insurance in the amount
of no less than one million dollars (USD) and errors and omission insurance in
the amount of five million dollars (USD) and shall provide Licensor with copies
of such policies and the renewals thereof or other evidence of such insurance.
B. Licensee shall maintain theft and casualty insurance in an amount
sufficient to cover the replacement value of all software, tapes, discs and
other tangible property provided to Licensee by Licensor under this License.
Licensor shall be named as an additional insured on any said policies.
C. Licensee shall maintain product liability insurance
4
<PAGE> 9
in the amount of no less than five million dollars (USD) to cover any claims
arising from the sale of licensed goods.
D. All insurance policies shall cover the entire Territory; i.e.,
both the United Kingdom and the Republic of Ireland.
1.10 Programming Approval
A. The content of programming, including all videos; in-house
produced programs, segments, advertisements and promotional materials;
advertisements and promotional materials submitted by third parties [whether
paid advertising or not] or any other material transmitted, aired or broadcast
by Licensee shall be subject to review and approval by Licensor which
requirement shall be satisfied by submission by Licensee to Licensor on a
quarterly basis of a one hour "air check" of Licensee's programming randomly
selected by Licensor. So long as the content of Licensee's programming conforms
to the standards of Section 2.3 (and is similar to programming broadcast in the
United States by Licensor), Licensee's programming shall be deemed acceptable
by Licensor. In the event that Licensor does not approve of the content of any
material submitted by Licensee for any quarterly "air check", Licensor shall
deliver written notice of such disapproval to Licensee. Licensor's written
notice shall (a) be delivered to Licensee no later than twenty (20) days after
Licensor's receipt of the subject material from Licensee and (b) describe with
specificity the material disapproved and the basis for Licensor's disapproval.
Promptly following receipt by Licensee of any such written notice from
Licensor, Licensee and Licensor shall discuss and mutually agree upon
prospective remediation with respect to such disapproved material. So long as
Licensee thereafter complies with the mutually agreed upon remediation,
Licensee's transmittal or broadcast of such disapproved material shall not be
deemed a breach of this License.
B. Licensee's programming shall conform to any and all requirements
of United Kingdom and Republic of Ireland laws and regulations in effect from
time to time with respect to the broadcast, airing or transmission of
television programming in the United Kingdom and the Republic of Ireland,
including but not limited to regulations of the ITC in the United Kingdom and
any similar or comparable authority in the Republic of Ireland.
1.11 Expenses
A. In addition to the licensing fee set forth in Paragraph 1.6
above, Licensee shall pay to Licensor on a
5
<PAGE> 10
monthly basis an amount equal to the sum of all reasonable and accountable
expenses paid, advanced or actually incurred by Licensor in connection with the
services rendered to and at the request of Licensee hereunder, including but
not limited to the preparation, duplication and shipment of video tapes, discs
and promotional and advertising materials. All such expenses shall be properly
documented in accordance with Licensee's policies respecting the itemization
and supporting documentation shall be made available to Licensee promptly upon
written request to Licensor. All amounts invoiced by Licensor hereunder shall
be due and payable by Licensee within sixty (60) days of Licensor's delivery of
invoices to Licensee.
B. Licensor shall provide Licensee in writing, no less than sixty
(60) days prior to each anniversary date of this License, an estimate of all
anticipated reasonable and accountable expenses which Licensor will incur in
the upcoming twelve month period in providing Licensee with said services
hereunder. Licensee shall notify Licensor in writing, no later than thirty
(30) days before each anniversary date of this License, of the services
Licensee chooses to have Licensor perform for it.
C. In the event that Licensee elects to have a third party perform
any or all of said services in place of Licensor, the quality and standards of
said services performed by the third party must be of substantially equivalent
quality to the services theretofore performed by Licensor. Material failures
to meet these quality standards after receipt by Licensee of written notice
from Licensor of such material failures shall constitute a breach of this
License. In the event of such a breach, Licensor must give Licensee notice of
said breach as provided in Paragraph 1.12 below and Licensee shall have the
opportunity to cure said breach as provided in said Paragraph 1.12.
1.12 Termination
A. If either party breaches or defaults on any of the material
provisions of this License, the other party shall give notice of such breach or
such default by reputable international courier (such as DHL or Federal
Express) to the breaching or defaulting party at the hereinafter stated address
within thirty (30) days of learning of the breach or default. If the
defaulting or breaching party does not cure said default or breach within
forty-five (45) days from the date of receipt of said notice, then the
non-defaulting party shall be entitled to terminate this License.
Notwithstanding the aforementioned, a party shall not be deemed to be in breach
or default of any provisions of this License by reason of delay or failure in
performance due to force majeure.
6
<PAGE> 11
Moreover, if during the initial forty-five (45) day period stated above the
breaching party exercises a good faith effort to cure said breach or said
default, the breaching party shall have an additional one hundred and
thirty-five (135) day period, if necessary, to cure the breach or default.
1.13 Cessation of Operations
A. Upon termination without immediate renewal of this License,
Licensee shall immediately cease all use of Licensor's trade names, trademarks,
service marks, copyrighted materials, trade secrets, proprietary technical and
business information, engineering data and specifications and designed
equipment.
B. Within thirty (30) days of termination without renewal of this
License, Licensee shall return at its sole expense to Licensor all original and
copies of all materials in its possession, custody or control bearing
Licensor's trade name, trademarks and/or service marks; all copyrighted
materials in its possession, custody or control containing any copyrighted
materials owned or licensed hereunder by Licensor and all materials containing
any licensed trade secrets, proprietary technical or business information,
engineering data and specifications. Licensee shall also return at its expense
all licensed designed equipment, tapes, discs, videos or like materials in
Licensee's possession provided by Licensor under this License. Licensee shall
make no further use of any of these materials and equipment or any
improvements, additions or modifications thereto made by Licensee during the
term of this License.
C. Upon termination without immediate renewal of this License,
Licensee shall immediately prepare a final accounting of its revenues
[including but not limited to its gross revenues from viewer sales, advertising
sales and revenues from promotions] and shall tender said accounting together
with all licensing fees or royalty payments, as applicable, due and owing, to
Licensor in United States dollars at its address given below no later than
thirty (30) days after the termination without immediate renewal of this
License.
D. Licensor, at its sole expense, shall have the right to conduct a
final audit of Licensee's books and records in accordance with the provisions
of Paragraph 1.8C above within one (1) year of the termination or expiration of
this License.
1.14 Infringements
A. In the event Licensee uses the intellectual property rights
licensed hereunder in violation of the terms of this
7
<PAGE> 12
License and infringes any valid intellectual property rights of any third
parties, including but not limited to trade names, trademarks, service marks,
patents, copyrights or trade secrets, Licensee shall hold Licensor harmless
against any claims of infringement arising from Licensee's use of the
intellectual property rights licensed hereunder in violation of the terms of
this License and shall indemnify Licensor against any and all claims from
damages, to the extent not caused by Licensor, arising therefrom including but
not limited to actual damages, punitive, compensatory, increased or treble
damages, costs and reasonable attorney's fees. Any indemnification required by
this Section shall be made by periodic payments to Licensor as and when the
bills are received and costs, disbursements and expenses are incurred. Said
indemnification provision shall not apply if said infringement results from
Licensor's gross negligence or willful misconduct or from actions or omissions
of Licensee taken with or pursuant to Licensor's approval as a shareholder of
Licensee.
B. In the event the use of the intellectual property rights licensed
hereunder, by Licensor or any other person or entity entitled to use such
rights prior to the date of this License, infringed any valid intellectual
property right of any third parties, including but not limited to trade names,
trademarks, service marks, patents, copyrights or trade secrets, Licensor shall
hold Licensee harmless against any claims of infringement arising therefrom and
shall indemnify Licensee against any and all claims from damages arising
therefrom, including but not limited to actual damages, punitive, compensatory,
increased or treble damages, costs and reasonable attorney's fees. Any
indemnification required by this Section shall be made by periodic payments to
Licensee as and when the bills are received and costs, disbursements and
expenses are incurred.
1.15 Covenant to Defend
During the term of this License, Licensor covenants that it will use
its reasonable best efforts to preserve and protect Licensor's ownership and
the validity of the trademarks, trade names, service marks, copyrights and
trade secrets licensed hereunder (including, without limitation, the
prosecution of third parties for infringement, unfair competition or passing
off) and/or Licensee's right to use the same in connection with the operation
of the Licensed Business.
1.16 Disputes
A. Should there be any differences of opinion or disputes between
the parties arising from the operation or
8
<PAGE> 13
interpretation of this License including, without limitation, Sections 1.1 and
1.14 hereof, the parties shall endeavor to settle the differences or disputes
in an amicable manner through mutual consultation. In case the differences or
disputes can not be resolved through mutual consultation within thirty (30)
days of the dispute, the parties agree to submit such differences or disputes
to a neutral third party chosen, at the request of either party, by the
American Arbitration Association in New York, New York. The cost of any such
neutral third party shall be borne equally by Licensor and Licensee. So long as
both Licensor and Licensee are acting in good faith to resolve any difference
or dispute, the parties agree to refrain from initiating any law suit or
seeking any other legal remedies that may otherwise be available.
Notwithstanding the above, the final decision of said neutral third party shall
not be binding on the parties.
B. The parties hereby consent to the jurisdiction of the United
States District Court for the Southern District of New York and agree that said
Court is the proper venue and has personal jurisdiction over the parties and is
competent to enter any orders necessary to give effect to the legal and
equitable rights of the parties and to issue such orders and award such
judgments as may be necessary.
1.17 Force Majeure
No party to this License shall be responsible to the other party for
non-performance or delay in the performance of the terms or conditions herein
due to acts of God, acts of government, wars, riots, civil disturbances,
strikes, lockouts and other labor disturbances, breakdown of or malfunction in
the communications system, accidents in transportation or other unreasonable
causes beyond the control of the parties.
1.18 Severability
It is understood and agreed that should any part or portion of this
License be held invalid, illegal or void, then and in such event, the remainder
of the License shall be and continue in full force and effect as if said
invalid, illegal or void provision had been deleted and never included herein.
1.19 Transferability
A. Subject to Paragraph 1.19B, this License is personal to the
parties and neither party shall assign this License, its obligations, benefits,
or rights hereunder to any third party without the prior written consent of the
other party which consent shall not be unreasonably withheld or delayed. The
parties hereto acknowledge that Licensee has granted a
9
<PAGE> 14
security interest in and assigned by way of security all of its rights and
interests in and under this License pursuant to (a) that certain Debenture
between Licensee and Licensor and (b) that certain Debenture between Licensee
and TM/Video International, Inc., each of even date herewith (collectively, the
"Debentures"). The parties hereto confirm their consent to such assignment by
way of security.
Notwithstanding anything contained herein to the contrary, in the event that
the secured parties under the Debentures enforce their security interests
thereunder against this License pursuant to the terms of that certain
Intercreditor Agreement of even date herewith between Licensee, Licensor,
TM/Video International, Inc. and the Agent thereunder, such secured parties
shall be vested with and assume all rights and obligations of the Licensee
hereunder, as if the same had been properly assigned to such secured parties,
without being required to obtain the prior consent of Licensor.
B. Nothing herein shall preclude Licensor from assigning its
obligations, benefits or rights hereunder or any of the intellectual property
licensed hereunder to a wholly owned subsidiary of Licensor without the prior
written consent of Licensee. In said event, Licensor shall give notice to
Licensee of any said assignment.
C. In the event that a Deadlock Notice is delivered by any of the
Stockholders (as such terms are defined in the Stockholders Agreement, dated
June 30, 1995, by and among Licensee, Licensor and TM No. 2 Limited) which
Deadlock Notice is not withdrawn, Licensor shall have the following options:
1. If Licensor acquires the entire interest in Licensee company, Licensor
may at its sole and exclusive option terminate this License and
negotiate a new License with Licensee.
2. If Licensor sells its entire interest in Licensee, the terms of this
License shall survive, provided that a substantial portion of
Licensor's intellectual property portfolio licensed hereunder is being
actively utilized by the Licensee in accordance with the terms and
conditions of this License.
D. If TM No. 2 Limited sells all or any part of its interest in
Licensee company to a third party, the Licensee and Licensor shall remain bound
by the terms of this License.
E. In the event that Paragraph 1.19 C 2 hereof becomes operative,
the following substitute Paragraph 1.6 as provided herein shall replace the
present terms of Paragraph 1.6 of
10
<PAGE> 15
this License Agreement:
1.6 Royalty Payments
A. During the term of this License, Licensee shall pay to the
Licensor a per annum royalty of two (2%) percent of all sales made by
Licensee.
B. Said royalty payments shall be calculated on a calendar
quarter and royalty payments for each calendar quarter shall be made
within thirty days of the close of each calendar quarter.
C. The term "sales" shall mean gross revenues collected by
Licensee for the operation and promotion of the Licensed Business. For
the purposes of this paragraph, gross revenue collected shall be net
of any value added or sales taxes; additional telephone charges and
any applicable credit card charges to a third party.
D. Such royalties shall be paid to Licensor by payment in
United States dollars at the herein-after stated address in Miami
Beach, Florida for each calendar quarter period as provided in Sub-
paragraph B hereof. Licensee shall withhold from the payments
required hereunder to be remitted to the Licensor the proper amount of
tax applicable thereto as may be required by local law at the time of
payment.
E. In the event Licensee does not make timely payments of its
royalty obligations hereunder, Licensor's failure to timely demand
payment of said royalty shall not constitute a waiver of Licensee's
royalty obligations hereunder nor operate as an estoppel, bar or
defense to Licensor's future demand for payment of past due royalties
provided said demand is made within sixty (60) days of the termination
or expiration of this License.
F. Licensee shall make all payments of any taxes due in
connection with the Licensed Business, exclusive of income taxes of
Licensor to appropriate authorities in the United Kingdom and the
Republic of Ireland in a timely manner.
G. Licensee shall provide Licensor, within thirty (30) business
days after the payment of such taxes, with documentation sufficient to
support any claim Licensor shall make for credit against any United
States federal, state or local tax liability
11
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incurred by Licensor which documentation shall establish the amount
and date of each tax paid in the United Kingdom and the Republic of
Ireland.
1.20 Notices
Any notices required to be given pursuant to this License shall be
sent by reputable international courier (such as DHL or Federal Express) and
addressed as follows:
Video Jukebox Network, Inc.
1221 Collins Avenue
Miami Beach, Florida 33139
United States of America
Attn: Chief Financial and Administrative
Officer
Video Jukebox Network International Ltd.
11/13 Young Street
Kensington, London W8 5EH
England
Attn. Managing Director
Ticketmaster
3701 Wiltshire Blvd.
Los Angeles, California 90010
Attn. Ned Goldstein, Esq.
General Counsel
with a copy to:
Neal Gerber & Eisenberg
2 N. LaSalle Street
Suite 2200
Chicago, Illinois 60602
Attn. Charles Evans Gerber
Notice of any change of address of any party shall be promptly given
to the other parties.
1.21 Applicable Law
This License shall be governed by and interpreted and construed in
accordance with the laws of the State of New York.
1.22 Schedules
Attached to this License are several schedules on which
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<PAGE> 17
are identified the trade names, service marks, trademarks, copyrights and trade
secrets owned by Licensor all of which are necessary to operate and promote the
Licensed Business. Licensor may, from time to time and with the consent of the
Licensee, which consent shall not be unreasonably withheld or delayed, amend
the schedules as appropriate to include additional service marks, trademarks,
copyrights, trade secrets and other intellectual property rights. From time to
time, Licensee may suggest to Licensor new trademarks and/or service marks for
use in connection with the Licensed Business which Licensee may want to use in
the Territory. Licensee shall submit any new trade and/or service marks to
Licensor in writing for its approval which shall not be unreasonably withheld.
Licensee shall assign to Licensor all right, title and interest in and to said
new trade and/or service marks, including but not limited to any registrations
for the same.
1.23 Waiver
Except as otherwise expressly set forth herein, the failure of any
party hereto to enforce any provision or provisions of this License Agreement
shall not be construed as a waiver of any such provision or provisions as to
any future violations thereof, nor prevent that party thereafter from enforcing
each and every other provision of this License. The waiver of any single remedy
shall not constitute a waiver of such party's rights to assert all other legal
remedies available to such party under the circumstances.
1.24 Entire Agreement
This License, together with its attached schedules; that certain Stock
Purchase Agreement dated as of June 30, 1995 between Licensee, Licensor and TM
No. 2 Limited; that certain Administrative Services Agreement dated as of June
30, 1995 between Licensee, Licensor and TM No. 2 Limited and those certain
representations and warranties heretofore made by Licensor to Licensee in a
letter of even date herewith contain all representations and warranties of and
agreements and understandings between the Licensor and the Licensee, and
supercedes all prior representations, warranties, agreements and understandings
relating to the subject matter of this License. This License shall not be
modified, changed or amended in any respect, except in writing duly signed and
executed by the parties.
1.25 Confidentiality
The parties acknowledge that the terms and conditions of this License
are confidential business information and shall not be disclosed by either
party without the prior written
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<PAGE> 18
approval of the other party unless required by law or as otherwise permitted by
the terms hereof. Notwithstanding the foregoing, the parties hereto
acknowledge that they intend to file this License, or excerpts or summaries
thereof, with the Office of Fair Trading in the U.K., the E.C. Commission and
such agencies or authorities as are necessary to record Licensee as a
registered user of the service marks and trademarks licensed hereunder. The
parties hereto agree to co-operate with one another to execute and make such
filings as are necessary and required to record Licensee as the registered user
of the service marks and trademarks licensed hereunder.
1.26 Counterparts
This License 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 an original, but all of which taken together shall constitute
one and the same agreement.
ARTICLE 2 - TRADE NAME LICENSE
2.1 Grant
Licensor grants to Licensee for the term and Territory identified
above, an exclusive, nontransferable [except as provided in Paragraph 1.19]
license to use the trade name VIDEO JUKEBOX NETWORK (together with any
revisions thereof) as part of its trade name in the Territory for use in
connection with the operation and promotion of the Licensed Business.
2.2 Ownership
A. Licensee acknowledges, solely as between Licensee and Licensor,
that Licensor is the sole and exclusive owner of all right, title and interest
in and to the trade name VIDEO JUKEBOX NETWORK. Licensee agrees that it will do
nothing inconsistent with such ownership rights and that all uses of the trade
name by the Licensee shall inure to the benefit of the Licensor. Licensee
agrees to assist Licensor, at Licensor's sole expense, in the execution and
filing of any documents necessary to perfect such rights in the Territory and
to record this License as may be necessary.
B. Licensee agrees that nothing in this License shall give Licensee
any right, title or interest in the licensed trade name VIDEO JUKEBOX NETWORK
other than the right to use and exploit the trade name under the terms of this
License.
C. Based on Licensor's representations and warranties to Licensee,
Licensee acknowledges the validity of the
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<PAGE> 19
licensed trade name VIDEO JUKEBOX NETWORK. Notwithstanding the same, Licensee
agrees not to attack Licensor's title to said trade name nor the validity
thereof nor the validity of this License.
D. Licensor acknowledges that it has heretofore made certain
representations and warranties to Licensee with respect to the ownership,
validity and scope of use of the trade name licensed hereunder.
2.3 Quality Standards
Licensee understands that in order to maintain valid and enforceable
rights in the trade name VIDEO JUKEBOX NETWORK, Licensor must maintain certain
quality standards relating to the nature of the services rendered or goods sold
or distributed under said trade name. Accordingly, Licensee agrees that the
nature and quality of the goods sold and/or services rendered by the Licensee
under the trade name VIDEO JUKEBOX NETWORK and all related advertising,
promotional and other related uses of the trade name shall conform to such
commercially reasonable standards of use that may exist within the Territory,
from time to time, consistent in all material respects with the requirements of
applicable United Kingdom and Republic of Ireland laws and regulations.
2.4 Quality Maintenance
Licensee understands that in order to maintain valid and enforceable
rights in the trade name VIDEO JUKEBOX NETWORK, Licensor must maintain certain
quality standards for the services rendered or goods sold or distributed under
said trade name. Accordingly, to the extent consistent with the quality
standard provisions set forth in Paragraph 2.3 hereof, Licensee agrees to
co-operate with Licensor, at Licensor's sole expense, in facilitating
Licensor's control of the nature and the quality of the goods and services
rendered under the trade name VIDEO JUKEBOX NETWORK; to permit inspection of
its business operations and to supply Licensor with specimens of all uses of
the trade name VIDEO JUKEBOX NETWORK upon request. Licensee agrees and
Licensor agrees to co-operate with Licensee to obtain all appropriate and
necessary government licenses, approvals and authorizations necessary to the
operation of the Licensed Business in the Territory under the trade name and
will provide certified copies of the same to Licensor annually.
2.5 Form of Use
Licensee agrees to use the trade name VIDEO JUKEBOX NETWORK in the
form and manner and with appropriate legends as prescribed from time to time by
Licensor.
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<PAGE> 20
2.6 Infringements
A. Licensee has no affirmative obligation to investigate or police
infringements or unauthorized uses of the licensed trade names but,
nevertheless, agrees to provide Licensor with written notice of any
infringements or unauthorized uses of the trade name VIDEO JUKEBOX NETWORK of
which any person in the employ of Licensee, having managerial responsibility,
shall become aware within five (5) business days of learning of the same.
Licensor shall have the sole and exclusive right and discretion to bring any
action or proceeding for trade name infringement, unfair competition, passing
off or any other action available to Licensor during the first thirty (30) days
following notice of said infringement. In the event that Licensor chooses not
to take any legal action or proceeding against said third party infringer
within thirty (30) days of notice by Licensee of said infringement, Licensee,
in its sole discretion, shall thereafter be authorized to bring said action or
proceeding and Licensor will co-operate with Licensee in the prosecution and
defense thereof.
B. In the event Licensor takes any legal action or proceeding against
a third party for infringement of said rights in the Territory, Licensee agrees
to co-operate with Licensor in the prosecution and defense of said action or
proceeding, including but not limited to discovery, document production,
pretrial and trial testimony and the like. All reasonable expenses incurred by
Licensee in co-operating with Licensor in the prosecution or defense of said
action or proceeding shall be borne by Licensor promptly upon receipt of
invoices therefor from Licensee. Any award of damages (including reimbursements
of costs and expenses) in favor of Licensor shall be for the exclusive benefit
of Licensor.
C. In the event Licensee is authorized and agrees to take legal
action or proceedings against a third party for infringement of said rights in
the Territory, Licensor agrees to co-operate with Licensee in the prosecution
and defense thereof, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensor in co-operating with Licensee in the prosecution or
defense of said actions or proceedings shall be borne by Licensee promptly upon
receipt of invoices therefor from Licensor. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensee shall be for the
exclusive benefit of Licensee.
16
<PAGE> 21
ARTICLE 3 - SERVICE MARK LICENSE
3.1 Grant
Licensor grants to Licensee for the term and Territory identified
above, an exclusive, nontransferable [except as provided in Paragraph 1.19]
license to use the service marks listed in Schedule A attached hereto (together
with any other service marks adopted, applied for, used or registered by
Licensor in the United States after the effective date of this License which
fall within or are suitable for use in the Licensed Business, provided that
said marks are free for use, adoption or registration in the Territory) in the
Territory for use in connection with the operation and promotion of the
Licensed Business.
3.2 Ownership
A. Licensee acknowledges, solely as between Licensee and Licensor,
that Licensor is the sole and exclusive owner of all right, title and interest
in and to the service marks identified in Schedule A attached hereto. Licensee
agrees that it will do nothing inconsistent with such ownership rights and that
all uses of the service marks by the Licensee shall inure to the benefit of the
Licensor. Licensee agrees to assist Licensor, at Licensor's sole expense, in
the execution and filing of any documents necessary to perfect such rights in
the Territory and to record this License as may be necessary.
B. Licensee agrees that nothing in this License shall give Licensee
any right, title or interest in the licensed service marks other than the right
to use and exploit the service marks under the terms of this License.
C. Based on Licensor's representations and warranties to Licensee,
Licensee acknowledges the validity of the licensed service marks identified in
the attached Schedule A. Notwithstanding the same, Licensee agrees not to
attack Licensor's title in said service marks nor the validity thereof nor the
validity of this License.
D. Licensor acknowledges that it has heretofore made certain
representations and warranties to Licensee with respect to the ownership,
validity and scope of use of the service marks licensed hereunder.
3.3 Quality Standards
Licensee understands that in order to maintain valid and enforceable
rights in the service marks identified in Schedule
17
<PAGE> 22
A attached hereto, Licensor must maintain certain quality standards relating to
the nature of the services rendered under said service marks. Accordingly,
Licensee agrees that the nature and quality of the services rendered by the
Licensee under the service marks identified in Schedule A attached hereto and
all related advertising, promotional and other related uses of said service
marks shall conform to such commercially reasonable standards of use that may
exist within the Territory, from time to time, consistent in all material
respects with the requirements of applicable United Kingdom and Republic of
Ireland laws and regulations.
3.4 Quality Maintenance
Licensee understands that in order to maintain valid and enforceable
rights in the service marks identified in Schedule A attached hereto, Licensor
must maintain certain quality standards for the services rendered under said
service marks. Accordingly, to the extent consistent with the quality standard
provisions set forth in Paragraph 3.3 hereof, Licensee agrees to co-operate
with Licensor, at Licensor's sole expense, in facilitating Licensor's control
of the nature and the quality of the services rendered under the service marks
identified in Schedule A attached hereto; to permit inspection of its business
operations and to supply Licensor with specimens of all uses of the service
marks identified in Schedule A attached hereto upon request. Licensee agrees
and Licensor agrees to co-operate with Licensee to obtain all appropriate and
necessary government licenses, approvals and authorizations necessary to permit
the sale and distribution of the services offered and sold under said service
marks in the Territory and will provide certified copies of the same to
Licensor annually.
3.5 Form of Use
Licensee agrees to use the service marks identified in Schedule A
attached hereto in the form and manner and with appropriate legends as
prescribed from time to time by Licensor.
3.6 Infringements
A. Licensee has no affirmative obligation to investigate or police
infringements or unauthorized uses of the licensed service marks but,
nevertheless, agrees to provide Licensor with written notice of any
infringements or unauthorized uses of the service marks identified in Schedule
A attached hereto of which any person in the employ of Licensee, having
managerial responsibility, shall become aware within five (5) business days of
learning of the same.
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<PAGE> 23
Licensor shall have the sole and exclusive right and discretion to bring any
action or proceeding for service mark infringement, unfair competition, passing
off or any other action available to Licensor during the first thirty (30) days
following notice of said infringement. In the event that Licensor chooses not
to take any legal action or proceeding against said third party infringer
within thirty (30) days of notice by Licensee of said infringement, Licensee,
in its sole discretion, shall thereafter be authorized to bring said action or
proceeding and Licensor will co-operate with Licensee in the prosecution and
defense thereof.
B. In the event Licensor takes any legal action or proceeding
against a third party for infringement of said rights in the Territory,
Licensee agrees to co-operate with Licensor in the prosecution and defense of
said action or proceeding, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensee in co-operating with Licensor in the prosecution or
defense of said action or proceeding shall be borne by Licensor promptly upon
receipt of invoices therefor from Licensee. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensor shall be for the
exclusive benefit of Licensor.
C. In the event Licensee is authorized and agrees to take legal
action or proceedings against a third party for infringement of said rights in
the Territory, Licensor agrees to co-operate with Licensee in the prosecution
and defense thereof, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensor in co-operating with Licensee in the prosecution or
defense of said action or proceeding shall be borne by Licensee promptly upon
receipt of invoices therefor from Licensor. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensee shall be for the
exclusive benefit of Licensee.
ARTICLE 4 - TRADE MARK LICENSE
4.1 Grant
Licensor grants to Licensee for the term and Territory identified
above, an exclusive, nontransferable [except as provided in Paragraph 1.19]
license to use, with the right to sublicense, the trademarks listed in Schedule
B attached hereto (together with any other trademarks adopted, applied for,
used or registered by Licensor in the United States after the effective date of
this License which fall within or are suitable for use in the Licensed
Business, provided that said marks are free for use, adoption or registration
in the
19
<PAGE> 24
Territory) in the Territory for use in connection with the sale and
distribution of goods and merchandise identified in Schedule B.
4.2 Ownership
A. Licensee acknowledges, solely as between Licensee and Licensor,
that Licensor is the sole and exclusive owner of all right, title and interest
in and to the trademarks identified in Schedule B attached hereto. Licensor
agrees that it will do nothing inconsistent with such ownership rights and that
all uses of the trademarks by the Licensee, and its sublicensees, shall inure
to the benefit of the Licensor. Licensee agrees to assist Licensor, at
Licensor's sole expense, in the execution and filing of any documents necessary
to perfect such rights in the Territory and to record this License as may be
necessary.
B. Licensee agrees that nothing in this License shall give Licensee,
or any sublicensees, any right, title or interest in the licensed trademarks
other than the right to use and exploit the trademarks under the terms of this
License.
C. Based on Licensor's representations and warranties to Licensee,
Licensee acknowledges the validity of the licensed trademarks identified in the
attached Schedule B. Notwithstanding the same, Licensee agrees not to attack
Licensor's title in said trademarks nor the validity thereof nor the validity
of this License.
D. Licensor acknowledges that it has heretofore made certain
representations and warranties to Licensee with respect to the ownership,
validity and scope of use of the trademarks licensed hereunder.
4.3 Quality Standards
Licensee understands that in order to maintain valid and enforceable
rights in the trademarks identified in Schedule B attached hereto, Licensor
must maintain certain quality standards relating to the nature of the goods
sold or distributed under said trademarks. Accordingly, Licensee agrees that
the nature and quality of the goods sold or distributed by the Licensee under
the trademarks identified in Schedule B attached hereto and all related
advertising, promotional and other related uses of said trademarks shall
conform to such commercially reasonable standards of use that may exist within
the Territory, from time to time, consistent in all material respects with the
requirements of applicable
20
<PAGE> 25
United Kingdom and Republic of Ireland laws and regulations.
4.4 Quality Maintenance
Licensee understands that in order to maintain valid and enforceable
rights in the trademarks identified in Schedule B attached hereto, Licensor
must maintain certain quality standards for the goods sold or distributed under
said trade marks. Accordingly, to the extent consistent with the quality
standard provisions set forth in Paragraph 4.3 hereof, Licensee agrees to
co-operate with Licensor, at Licensor's sole expense, in facilitating
Licensor's control of the nature and the quality of the goods sold or
distributed under the trademarks identified in Schedule B attached hereto; to
permit inspection of its business operations and to supply Licensor with
specimens of all uses of the trademarks identified in Schedule B attached
hereto upon request. Licensee agrees and Licensor agrees to co-operate with
Licensee to obtain all appropriate and necessary government licenses, approvals
and authorizations necessary to permit the sale and distribution of the goods
distributed and sold under said marks in the Territory and will provide
certified copies of the same to Licensor annually.
4.5 Form of Use
Licensee agrees to use the trademarks identified in Schedule B
attached hereto in the form and manner and with appropriate legends as
prescribed from time to time by Licensor.
4.6 Infringements
A. Licensee has no affirmative obligation to investigate or police
infringements or unauthorized uses of the licensed trademarks but,
nevertheless, agrees to provide Licensor with written notice of any
infringements or unauthorized uses of the trademarks identified in Schedule B
attached hereto of which any person in the employ of Licensee, having
managerial responsibility, shall become aware within five (5) business days of
learning of the same. Licensor shall have the sole and exclusive right and
discretion to bring any action or proceeding for trademark infringement, unfair
competition, passing off or any other action available to Licensor during the
first thirty (30) days following notice of said infringement. In the event that
Licensor chooses not to take any legal action or proceeding against said third
party infringer within thirty (30) days of notice by Licensee of said
infringement, Licensee, in its sole discretion, shall thereafter be authorized
to bring said action or proceeding and Licensor will co-operate with Licensee
in the prosecution and defense thereof.
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<PAGE> 26
B. In the event Licensor takes any legal action or proceeding
against a third party for infringement of said rights in the Territory,
Licensee agrees to co-operate with Licensor in the prosecution and defense of
said action or proceeding, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensee in co-operating with Licensor in the prosecution or
defense of said action or proceeding shall be borne by Licensor promptly upon
receipt of invoices therefor from Licensee. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensor shall be for the
exclusive benefit of Licensor.
C. In the event Licensee is authorized and agrees to take legal
action or proceedings against a third party for infringement of said rights in
the Territory, Licensor agrees to co-operate with Licensee in the prosecution
and defense thereof, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensor in co-operating with Licensee in the prosecution or
defense of said action or proceedings shall be borne by Licensee promptly upon
receipt of invoices therefor from Licensor. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensee shall be for the
exclusive benefit of Licensee.
4.7 Sublicenses
A. Licensee shall have the right, subject to terms and conditions
herein, to grant sublicenses to third parties to manufacture and/or distribute
goods in the Territory only bearing the trademarks identified in Schedule B
attached hereto.
B. Prior to entering into any sublicense to manufacture and/or
distribute in the Territory goods bearing the trademarks identified in Schedule
B attached hereto, Licensee shall submit to Licensor the draft sublicense
agreement for review and comment by Licensor. The goods subject to the
sublicense and the terms of the sublicense, shall be subject to Licensor's
approval prior to the sublicense agreement being executed by the Licensee and
delivered to the sublicensee. Said approval shall not be withheld or delayed
provided that the terms and conditions of any sublicense agreements are
commercially reasonable and the quality control and quality maintenance
standards required thereunder are consistent with those required herein as set
forth in Paragraphs 4.3 and 4.4 hereof.
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<PAGE> 27
ARTICLE 5 - COPYRIGHT LICENSE
5.1 Grant
Licensor grants to Licensee for the term and Territory identified
above, an exclusive, nontransferable [except as provided in Paragraph 1.19]
license to use the copyrighted works identified in Schedule C attached hereto
(together with all improvements, enhancements, and revisions thereto and
derivative works made therefrom and any additional copyrightable works created
by or for Licensor, or which Licensor has rights to use and sublicense, in the
United States after the effective date of the License that fall within or are
suitable for use in the Licensed Business provided that said use shall be free
from infringement of any third party rights) for use in connection with the
operation and promotion of the Licensed Business in the Territory.
5.2 Ownership
A. Licensee acknowledges solely as between Licensor and Licensee
that Licensor is the sole and exclusive owner of all right, title and interest
in and to the copyrighted works identified in Schedule C attached hereto.
Licensee agrees that it will do nothing inconsistent with such ownership rights
and that all uses of said copyrighted works by the Licensee shall inure to the
sole and exclusive benefit of the Licensor. Licensee agrees to assist
Licensor, at Licensor's sole expense, in the execution and filing of any
documents necessary to perfect such rights in the Territory and to record this
License as may be necessary.
B. Licensee agrees that nothing in this License shall give Licensee
any right, title or interest in said copyrighted works other than the right to
use and exploit them in accordance with the License in connection with the
operation and promotion of the Licensed Business.
C. Based on Licensor's representations and warranties to Licensee,
Licensee acknowledges the validity of the licensed copyrighted works identified
in the attached Schedule C. Notwithstanding the same, Licensee agrees not to
attack Licensor's title in said copyrighted works nor the validity thereof nor
the validity of this License.
D. Licensor hereby acknowledges that it has heretofore made certain
representations and warranties to Licensee with respect to the ownership,
validity and scope of use of the copyrighted works licensed hereunder.
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<PAGE> 28
5.3 Alteration
A. Licensee agrees that it shall not, and acknowledges that it is
not entitled to, make any alterations, additions, changes in or revisions of
the copyrighted works identified in Schedule C attached hereto, without the
prior written consent of Licensor, which consent shall not be unreasonably
withheld or delayed. Licensee further agrees that it will not create any new
works, compilations or derivative works based entirely or in substantial part
on the copyrighted works identified in Schedule C attached hereto without the
prior written consent of the Licensor which consent shall not be unreasonably
withheld or delayed.
B. In the event that Licensor authorizes any changes, alterations,
revisions, new works, compilations or derivative works based entirely or in
substantial part on the said licensed copyrighted works, all right, title and
interest in said alterations, additions, changes, revisions, new works,
compilations or derivative works shall rest with Licensor and Licensee agrees
to take whatever steps are reasonably necessary to assign, transfer or perfect
title in such works solely in the name of the Licensor.
C. Nothing herein shall be construed to permit or authorize Licensee
to make any changes, alterations, additions, revisions, new works, compilations
or derivative works based in whole or in any part on the copyrighted software
licensed hereunder.
5.4 Distribution and Publication
Licensee agrees that it shall not distribute, publish, lease, rent or
display to the public any copyrighted software identified in Schedule C
attached hereto without the prior written consent of the Licensor which consent
shall not be unreasonably withheld or delayed.
5.5 Infringements
A. Licensee has no affirmative obligation to investigate or police
infringements or unauthorized uses of the licensed copyrighted works but,
nevertheless, agrees to provide Licensor with written notice of any
infringements or unauthorized uses of the copyrighted works identified in
Schedule C attached hereto of which any person in the employ of Licensee,
having managerial responsibility, shall become aware within five (5) business
days of learning of the same. Licensor shall have the sole and exclusive right
and discretion to bring any action or proceeding for copyright infringement,
unfair competition, passing off or any other action available to Licensor
during the first thirty (30) days
24
<PAGE> 29
following notice of said infringement. In the event that Licensor chooses not
to take any legal action or proceeding against said third party infringer
within thirty (30) days of notice by Licensee of said infringement, Licensee,
in its sole discretion, shall thereafter be authorized to bring said action or
proceeding and Licensor will co-operate with Licensee in the prosecution and
defense thereof.
B. In the event Licensor takes any legal action or proceeding
against a third party for infringement of said rights in the Territory,
Licensee agrees to co-operate with Licensor in the prosecution and defense of
said action or proceeding, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensee in co-operating with Licensor in the prosecution or
defense of said action or proceeding shall be borne by Licensor promptly upon
receipt of any invoices therefor from Licensee. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensor shall be for the
exclusive benefit of Licensor.
C. In the event Licensee is authorized and agrees to take legal
action or proceeding against a third party for infringement of said rights in
the Territory, Licensor agrees to co-operate with Licensee in the prosecution
and defense thereof, including but not limited to discovery, document
production, pretrial and trial testimony and the like. All reasonable expenses
incurred by Licensor in co-operating with Licensee in the prosecution or
defense of said action or proceeding shall be borne by Licensee promptly upon
receipt of any invoices therefor from Licensor. Any award of damages (including
reimbursements of costs and expenses) in favor of Licensee shall be for the
exclusive benefit of Licensee.
5.6 Third Party Works
A. Licensee shall use reasonable efforts to ensure that any
copyrighted works owned by third parties, including but not limited to music
videos, sound tracks, phonographic records, audio and/or video tapes, digital
recordings, compact disc records or the like or similar works which Licensee
transmits, airs or broadcasts over its facilities are licensed for said use,
broadcast, transmission or airing within the Territory and that all license
fees, payments, royalties or the like payable by Licensee are promptly and
fully paid by Licensee as a normal business expense.
B. Licensee shall notify Licensor of any agreements, licenses or
undertakings to which it is a party relating to the use of copyrighted works
owned by third parties, including, but not limited to agreements, licenses or
undertakings with performance rights organizations.
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<PAGE> 30
ARTICLE 6 - TRADE SECRETS PROPRIETARY INFORMATION
6.1 Grant
Licensor grants to Licensee for the term and Territory identified
above, an exclusive, nontransferable [except as provided in Paragraph 1.19]
license, to use all trade secrets, proprietary technical and business
information, engineering data and specifications necessary to operate or
promote, or useful in operating or promoting, the Licensed Business including
without limitation those identified in Schedule D attached hereto [hereinafter
"Trade Secrets"] for use in connection with the operation and promotion of the
Licensed Business as determined in reasonable discretion of Licensor to be
necessary to or useful in the operation and promotion of the Licensed Business.
Notwithstanding the foregoing, the parties hereto expressly agree that the
following shall not be considered Trade Secrets subject to this License: (a)
information that is or becomes generally available to and known by the public,
or is otherwise in the public domain, not due to any unauthorized act or
omission of Licensee, and (b) information received by Licensee on a non-
confidential basis from a third person (other than Licensor) who is not under
any obligation to maintain the confidentiality thereof.
6.2 Ownership
Licensee acknowledges that the Trade Secrets are valuable, proprietary
and confidential business information created by Licensor and kept by Licensor
as Trade Secrets necessary for the efficient and profitable operation of its
business and that Licensor is the sole and exclusive owner of said Trade
Secrets.
B. Licensor acknowledges that its has heretofore made certain
representations and warranties to Licensee with respect to the ownership,
validity and scope of use of the Trade Secrets licensed hereunder.
6.3 Copies
Licensee shall make no copies of the Trade Secrets without the prior
written consent of Licensor. Notwithstanding the above, Licensor hereby grants
Licensee the right to make one copy of the Trade Secret information licensed
hereunder for archival purposes only. Said archival copy shall be kept among
the confidential papers of the Licensee at its offices and shall not be
disclosed to any third parties.
26
<PAGE> 31
6.4 Disclosure to Employees
A. Licensee may disclose the Trade Secrets only to those employees
of Licensee who, by virtue of their duties and responsibilities, have a need to
know said Trade Secrets. Prior to any disclosure of any of the Trade Secrets to
any employee, said employee shall execute a non-disclosure, non competition
agreement under which said employee undertakes, subject to applicable law, to
maintain the secrecy of said Trade Secrets for as long as said Trade Secrets
remain secret and proprietary to Licensor and to refrain from using any trade
secrets or confidential or proprietary information disclosed hereunder in any
future employment by third parties. Further, said employees shall undertake to
assign to Licensee [who in turn shall assign to Licensor] all right, title and
interest to any trade secret or proprietary information, invention, discovery
or computer software program created or made by the employee during the course
of his employment relating to the trade secret and proprietary and business
information licensed hereunder.
B. For the purposes of this Article, the term employee includes all
officers, directors and employees of Licensee.
C. All employees to whom Trade Secrets may be disclosed shall be
timely identified to Licensor.
6.5 Markings
Licensee shall maintain the Trade Secrets in confidence and shall mark
each document or thing bearing or containing a Trade Secret with the legend:
CONFIDENTIAL BUSINESS INFORMATION - TRADE SECRET
VIDEO JUKEBOX NETWORK INC.
or:
TRADE SECRET - VJN
6.6 Reverse Engineering
Licensee agrees to take no steps to reverse engineer or otherwise
decompile any software licensed hereunder, including, but not limited to the
reverse engineering or decompilation of any object or source codes of the
software licensed hereunder.
6.7 Infringement
A. Licensee has no affirmative obligation to
27
<PAGE> 32
investigate or police infringements or unauthorized uses of the trade secrets
licensed hereunder, but nevertheless, agrees to provide Licensor with written
notice of any infringements or unauthorized uses of the trade secrets
identified in Schedule D attached hereto of which any person in the employ of
Licensee, having managerial responsibility, shall become aware within five (5)
business days of learning of the same. Licensor shall have the sole and
exclusive right and discretion to bring any action or proceeding for theft or
infringement of trade secrets, unfair competition, passing off or any other
action available to Licensor during the first thirty (30) days following notice
of said theft or infringement. In the event that Licensor chooses not to take
any legal action or proceeding against said third party within thirty (30) days
of notice by Licensee of said theft or infringement, Licensee, in its sole
discretion, shall thereafter be authorized to bring said action or proceeding
and Licensor will co-operate with Licensee in the prosecution and defense
thereof.
B. In the event Licensor takes any legal action or proceeding
against a third party for theft or infringement of said rights in the
Territory, Licensee agrees to co-operate with Licensor in the prosecution and
defense of said action or proceeding, including but not limited to discovery,
document production, pretrial and trial testimony and the like. All reasonable
expenses incurred by Licensee in co-operating with Licensor in the prosecution
or defense of said action or proceeding shall be borne by Licensor promptly
upon receipt of any invoices therefor from Licensee. Any award of damages
(including reimbursements of costs and expenses) in favor of Licensor shall be
for the exclusive benefit of Licensor.
C. In the event Licensee is authorized and agrees to take legal
action or proceeding against a third party for theft or infringement of said
rights in the Territory, Licensor agrees to co-operate with Licensee in the
prosecution and defense thereof, including but not limited to discovery,
document production, pretrial and trial testimony and the like. All reasonable
expenses incurred by Licensor in co-operating with Licensee in the prosecution
or defense of said action or proceeding shall be borne by Licensee promptly
upon receipt of any invoices therefor from Licensor. Any award of damages
(including reimbursements of costs and expenses) in favor of Licensee shall be
for the exclusive benefit of Licensee.
28
<PAGE> 33
VIDEO JUKEBOX NETWORK, INC.
/s/ Alan McGlade
-------------------------------------
Alan McGlade
President and Chief Executive Officer
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
/s/ Vincent Monsey
-------------------------------------
Name: Vincent Monsey
Title: Managing Director
29
<PAGE> 34
SCHEDULE A
LICENSED SERVICE MARKS
THE BOX
THE BOX AND DESIGN
THE COMPOSITE MARK
THE SLOGAN
BOXTALK
BOXTOPS
BIG PHAT ONES AND DESIGN
XPOSURE
The marks are licensed in the Territory subject to the representations and
warranties given by Licensor and only for the services in International Class
41 for which registration is sought
-A1-
<PAGE> 35
SCHEDULE B
LICENSED TRADE MARKS
THE BOX AND DESIGN
THE COMPOSITE MARK
The marks are licensed in the Territory subject to the representations and
warranties given by Licensor and only for the goods in International
Classes 9 and/or 25 for which registration is sought.
-B1-
<PAGE> 36
SCHEDULE C
LICENSED COPYRIGHTED WORKS
1. Telephone Access Display System (1984 Version)
US Copyright Registration No. TX 1-850-925
and Supplementary Registration No. TX 1-987-000
[change of name to Video Jukebox Network, Inc.]
2. Telephone Access Display System (1984 Version)
US Copyright Registration No. TX 1-840-709
and Supplementary Registration No. TX 1-966-999
[change of name to Video Jukebox Network, Inc.]
3. Video Jukebox [Pictorial Design of Jukebox with text
"VIDEO JUKEBOX US Copyright Registration No. VA 217-474
and Supplementary Registration No. VA 244-526
[change of name to Video Jukebox Network, Inc.]
4. Video Jukebox Network, Inc. system operating software
and updates
The copyrighted works are licensed in the Territory subject to the
representations and warranties given by Licensor.
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<PAGE> 37
SCHEDULE D
LICENSED TRADE SECRETS
-D1-
<PAGE> 1
8-K
EXHIBIT 99.11
<PAGE> 2
____________________________________________________________________________
ADMINISTRATIVE SERVICES AGREEMENT
AMONG
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED,
VIDEO JUKEBOX NETWORK, INC.
AND
TM NO. 2 LIMITED
____________________________________________________________________________
June 30, 1995
<PAGE> 3
ADMINISTRATIVE SERVICES AGREEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
ARTICLE II
THE SERVICES
2.1 Appointment of Ticketmaster . . . . . . . . . . . . . . . . . . . 8
2.2 Significant Decisions . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Limitation of Ticketmaster's Responsibility . . . . . . . . . . . 9
2.4 Responsibilities of VJNIL . . . . . . . . . . . . . . . . . . . . 10
2.5 Books of Account; Reports to Stockholders . . . . . . . . . . . . 10
2.6 Personnel; Resources. . . . . . . . . . . . . . . . . . . . . . . 10
2.8 Termination for Cause; Cash In Lieu of Services . . . . . . . . . 11
ARTICLE III
SUBSCRIPTION FOR SHARES; COMPENSATION
3.1 Subscription for Shares . . . . . . . . . . . . . . . . . . . . . 12
3.2 Compensation for Services . . . . . . . . . . . . . . . . . . . . 12
3.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4 Service Shares Subject to Stockholders Agreement . . . . . . . . . 13
3.5 Value Added Tax . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV
TERMINATION
4.1 Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Effects of Termination . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of VJNIL . . . . . . . . . . . . . 14
5.2 Representations and Warranties of VJN and Ticketmaster . . . . . . 23
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VI
CONFIDENTIALITY
6.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . 24
6.2 Return of Confidential Information . . . . . . . . . . . . . . . . 25
6.3 Disclosure of Confidential Information . . . . . . . . . . . . . . 26
6.4 Equitable Relief . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
INTERESTED TRANSACTIONS
ARTICLE VIII
LIMITATION ON LIABILITY
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification of Ticketmaster and Ticketmaster Affiliates . . . 27
9.2 Indemnification of VJNIL and VJN . . . . . . . . . . . . . . . . . 27
9.3 Procedure for Claims . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . 29
ARTICLE X
MISCELLANEOUS
10.1 Benefit; Non-Assignment. . . . . . . . . . . . . . . . . . . . . . 29
10.2 Independent Contractor . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Further Instruments . . . . . . . . . . . . . . . . . . . . . . . 29
10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.7 Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . 31
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
-ii-
<PAGE> 5
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made and
entered into as of June 30, 1995, between TM NO. 2 LIMITED (registration
number 3005851), a company incorporated under the laws of England and Wales
and whose registered office is at 20 Black Friars Lane, London EC4V 6HD
("Ticketmaster"), VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (registration
number 2643552), a company incorporated under the laws of England and Wales
and whose registered office is at Imperial House, 11-13 Young Street,
Kensington London W8 ("VJNIL"), and VIDEO JUKEBOX NETWORK, INC., a Florida
corporation ("VJN").
W I T N E S S E T H:
WHEREAS, VJNIL operates a viewer interactive television service in the
United Kingdom and intends to do so in the Republic of Ireland; and
WHEREAS, VJNIL desires to retain Ticketmaster to provide
administrative, strategic oversight and marketing related services with
respect to its business, and Ticketmaster desires to provide such services,
on the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"AFFILIATE" shall mean any Person (other than VJNIL) who or which,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, any specified Person;
provided, however, that an Affiliate shall not include a Competitor.
"Control" (including the terms "controlling," "controlled by" and "under
common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise, including,
without limitation, the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or similar
body governing the affairs of such Person.
<PAGE> 6
"ANNUAL BUDGET" shall mean the annual operating budget with respect to
any specified fiscal year of VJNIL, prepared by Ticketmaster as part of its
duties hereunder and approved by VJNIL's Board of Directors pursuant to
Section 2.9(e) of the Stockholders Agreement, which budget sets forth
individually identified and aggregate expenditures and indebtedness that
the appropriate officers and/or managers of VJNIL are authorized to make or
incur. Any Annual Budget with respect to a prior fiscal year that,
pursuant to Section 2.9(e) of the Stockholders Agreement, remains in effect
for any specified subsequent fiscal year after VJNIL's Board of Directors
fails, for any reason, to approve an Annual Budget for such subsequent year
shall be referred to herein as a "Carryover Budget."
"BANKRUPTCY" shall mean (a) an adjudication of bankruptcy under the
U.S. Bankruptcy Reform Act of 1978, as amended, or any successor statute,
(b) the specified Person stops payment of, is deemed unable (under Section
123 of the Insolvency Act 1986 of the U.K. (the "Insolvency Act")) or
otherwise admits inability to pay its debts or becomes or is deemed to be
insolvent, (c) the making of a winding up or administration order in
respect of a specified Person, (d) an assignment for the benefit of
creditors, (e) the specified Person either does, resolves to do or
commences negotiations with a view to doing any of the following: (i)
makes a general or special arrangement or composition (whether voluntary or
compulsory) with its creditors or any class of creditors, (ii) declares or
agrees to a moratorium, (iii) issues a notice convening a meeting to
resolve to do any of the foregoing (other than for the purpose of a solvent
amalgamation or reconstruction), or (iv) makes a proposal for a voluntary
arrangement under Section 1 of the Insolvency Act to be made in respect of
the specified Person, (f) the filing of a voluntary petition in bankruptcy
or reorganization or the passing of a resolution for voluntary liquidation,
reconstruction or winding up (other than for the purpose of a solvent
amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, provisional liquidator or
administrative receiver for any part or all of the assets or property of a
party within 60 days from the date of such appointment.
"BUSINESS" shall mean the television, cable and similar programming
and broadcasting services (interactive or non-interactive), marketing,
advertising, sales, concert and related music promotions, merchandising and
home shopping projects and all other promotions and ventures in which VJNIL
is engaged in the Territory as of the date hereof, and any similar or
related activities in which VJNIL may become engaged during the term of
this Agreement.
"BUSINESS DAY" shall mean any day that is not a Saturday or a Sunday
and on which banks are open for the conduct of normal banking business in
all of the cities of Los Angeles, California, Miami, Florida and London,
England.
"CAUSE" shall mean any of the following:
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<PAGE> 7
(a) with respect to any Contract Year after the First Contract
Year, the incurrence by VJNIL, arising out of or resulting solely or
substantially from acts or omissions to act of Ticketmaster, of aggregate
operating expenditures for such Contract Year in excess of one hundred
twenty percent (120%) of (i) if an Annual Budget is in effect for such
Contract Year, the target operating expenditure levels set forth in such
Annual Budget, or (ii) if a Carryover Budget is in effect for such Contract
Year, the actual aggregate operating expenditures incurred by VJNIL in the
immediately preceding Contract Year, as set forth in the annual audited
financial statements of VJNIL for such immediately preceding Contract Year,
excluding in each case any expenditures that were not included in or
specifically contemplated by the applicable Annual Budget or Carryover
Budget (as appropriate) but which were necessary or advisable, under
applicable Law, in the reasonable discretion of VJNIL and its counsel;
provided, however, that the incurrence of excessive operating expenditures
by VJNIL shall not constitute "Cause" if such failure was due to a growth
in the Business not anticipated by the applicable Annual Budget or
Carryover Budget;
(b) with respect to any Contract Year after the First Contract
Year, the failure of VJNIL to attain aggregate operating revenue for such
Contract Year at least equal to (i) if an Annual Budget is in effect for
such Contract Year, 66.67% of the target operating revenue levels set forth
in such Annual Budget, or (ii) if a Carryover Budget is in effect for such
Contract Year, 75% of the actual aggregate operating revenue earned by
VJNIL in the immediately preceding Contract Year, as set forth in the
annual audited financial statements of VJNIL for such immediately preceding
Contract Year;
(c) any Gross Negligence or willful misconduct of Ticketmaster
relating to its performance of the Services;
(d) the material breach by Ticketmaster of any agreement or
covenant set forth in this Agreement if such breach (if curable) has not
been cured for a period of 30 days following Ticketmaster's receipt of
written notice thereof from VJNIL; provided, however, that in the event
that such breach (if curable) cannot be cured within such 30-day period,
then any such breach shall not be deemed to constitute "Cause" hereunder so
long as Ticketmaster is diligently and in good faith pursuing a cure and
such breach is cured no later than 180 days following Ticketmaster's
receipt of the foregoing written notice from VJNIL;
(e) any representation or warranty of Ticketmaster made in this
Agreement, the Stock Purchase Agreement or the Stockholders Agreement is
incorrect or incomplete in any material respect when made;
(f) the occurrence of an event of Bankruptcy with respect to
Ticketmaster and/or Ticketmaster's parent company (as defined in Section
258 Companies Act 1985);
-3-
<PAGE> 8
(g) the conviction of Ticketmaster of any material criminal
offense involving dishonesty or moral depravity;
(h) the sale, merger, consolidation or other similar transaction
that results in the transfer of Control of Ticketmaster to a Competitor; or
(i) the removal, directly as a result of a change in Control of
Ticketmaster, of more than fifty percent (50%) of the Ticketmaster
personnel who are primarily responsible for providing the Services
hereunder immediately prior to a change in Control of Ticketmaster;
provided, however, that a failure under either clause (a) or clause (b)
above shall not constitute "Cause" to the extent and whenever such failure
is due to causes beyond the reasonable control of Ticketmaster, including,
without limitation, (A) failure of the stockholders of VJNIL to provide, in
any fiscal year, working capital necessary to fulfill the operational needs
of the Business as set forth in the Annual Budget or Carryover Budget in
effect for such fiscal year, or (B) any Force Majeure Event.
"CLOSING" AND "CLOSING DATE" shall have the meaning set forth in
Section 2.01 of the Stock Purchase Agreement.
"COMPETITOR" shall mean an entity operating or controlling either
video music services for use on television broadcast or cable channels
featuring such services existing as of the date hereof or subsequently
formed services with programming that is substantially similar in format
and/or content to VJNIL's programming; provided, that Time Warner and its
Affiliates shall not be considered a "Competitor" for purposes of this
definition.
"CONCURRENT TRANSACTIONS" shall mean the collective reference to the
transactions contemplated by this Agreement and the other Transaction
Documents.
"CONTRACT YEAR" shall mean each of the calendar years during the term
of this Agreement; provided, that the first such Contract Year (the "First
Contract Year") shall commence as of the date hereof and expire on
December 31, 1996.
"DEBENTURES" shall mean those two certain Debentures, each of even
date herewith, between (a) VJNIL and TM/Video International, Inc. and
(b) between VJNIL and VJN.
"DEED OF TAX COVENANT" shall mean that certain Deed of Tax Covenant of
even date herewith among VJN and Ticketmaster in favor of Ticketmaster.
"ENCUMBRANCE" shall mean any security interest, pledge, mortgage, lien
(including, without limitation, environmental and Tax liens), charge,
encumbrance, adverse claim,
-4-
<PAGE> 9
option, preferential arrangement or restriction of any kind, including,
without limitation, any restriction on the use, voting, transfer, receipt
of income or other exercise of any attributes of ownership.
"EQUITY INTEREST" shall mean any and all shares, interests,
derivatives, participations or other equivalents (however designated) of
capital stock of VJNIL and any and all warrants, options or other rights to
purchase any of the foregoing.
"FISCAL YEAR" shall mean any financial (i.e., accounting) year of
VJNIL, which currently coincides with the calendar year.
"FORCE MAJEURE EVENT" shall mean any event or circumstance beyond
Ticketmaster's reasonable control that, directly or indirectly, prevents,
hinders or delays the performance by Ticketmaster of its obligations
hereunder, including (but not limited to) any act of God, war, riot, civil
commotion, governmental actions, explosion, fire, flood, storm, accident,
strike, lock-out, trade dispute or labor disturbance, interruption in the
supply of power, materials or communications or transportation systems, or
epidemic.
"GAAP" shall mean United Kingdom generally accepted accounting
principles and practices as in effect during the relevant period and
applied consistently throughout the periods involved.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state or local, or
foreign government, governmental, regulatory or administrative authority
(or subdivision thereof) and any agency or commission or any court,
tribunal or judicial or arbitral body that has jurisdiction over the
Business, VJNIL or its assets, including, without limitation, the United
States, the United Kingdom and the Republic of Ireland.
"GOVERNMENTAL ORDER" shall mean any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any
Governmental Authority.
"GROSS NEGLIGENCE" shall mean (a) reckless indifference to or a
deliberate disregard of the interests of the stockholders of VJNIL,
(b) actions or omissions that are outside the bounds of reason, (c) acting
in bad faith, (d) an extreme abuse of discretion or (e) an extreme
departure from reasonable conduct or from the ordinary standard of care.
Gross negligence, as distinguished from negligence, requires the act or
omission in question to have been taken without the performance of due
diligence or through the refusal to acknowledge, or deliberate failure or
neglect to take account of, obvious relevant facts or circumstances.
"INTELLECTUAL PROPERTY" shall mean (a) inventions, whether or not
patentable, whether or not reduced to practice, and whether or not yet made
the subject of a pending patent application or applications, (b) ideas and
conceptions of potentially
-5-
<PAGE> 10
patentable subject matter, including, without limitation, any patent
disclosures, whether or not reduced to practice and whether or not yet made
the subject of a pending patent application or applications, (c) national
(including the United States) and multinational statutory invention
registrations, patents, patent registrations and patent applications
(including all reissues, divisions, continuations, continuations-in-part,
extensions and reexaminations) and all rights therein provided by
international treaties or conventions and all improvements to the
inventions disclosed in each such registration, patent or application, (d)
trademarks, service marks, trade dress, logos, trade names and corporate
and partnership names, whether or not registered, including all common law
rights, and registrations and applications for registration thereof,
including, but not limited to, all marks registered in trademark offices
throughout the world, and all rights therein provided by international
treaties or conventions, (e) copyrights (registered or otherwise) and
registrations and applications for registration thereof, and all rights
therein provided by international treaties or conventions, (f) moral rights
(including, without limitation, rights of paternity and integrity), and
waivers of such rights by others, (g) computer software, including, without
limitation, operating systems and specifications, data, data bases, files,
documentation and other materials related thereto, (h) trade secrets and
confidential, technical and business information (including ideas, flow
charts, logic diagrams, formulas, compositions, patterns, devices, methods,
techniques, processes, inventions, and conceptions of inventions whether
patentable or unpatentable and whether or not reduced to practice),
(i) whether or not confidential, technology (including know-how and show-
how), manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial, marketing and
business data, selling, pricing and cost information or procedures,
business and marketing plans and customer and supplier lists and
information, (j) copies and tangible embodiments of all the foregoing, in
whatever form or medium, (k) all rights to obtain and rights to apply for
patents, and to register trademarks and copyrights, (1) all rights to sue
or recover and retain damages and costs and attorneys' fees for present and
past infringement of any of the foregoing, and (m) all goodwill associated
with the foregoing.
"INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor
Agreement of even date herewith among TM/Video International, Inc., VJN and
VJNIL.
"KNOWLEDGE OF VJNIL" OR "TO VJNIL'S KNOWLEDGE" and similar references
shall mean the best knowledge of the officers, directors and key employees
of VJNIL after due inquiry.
"LAW" shall mean any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law
issued by any Governmental Authority.
"MATERIAL ADVERSE EFFECT" shall mean any circumstance, change in, or
effect on the business of any party (including, without limitation, in the
case of VJNIL, the
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<PAGE> 11
Business) that: (a) is, or could reasonably be expected to be, materially
adverse to the business, operations, assets or liabilities, results of
operations or the financial condition of such party, or (b) could
reasonably be expected to adversely affect the ability of such party to
operate or conduct its business in the manner in which it is currently, or
currently anticipated to be, operated or conducted.
"MONSEY STOCK PURCHASE AGREEMENT" shall mean that certain agreement of
even date herewith between Vincent Paul Monsey ("Monsey") and VJN in
relation to the purchase by VJN of all of the Series B Ordinary Shares of
VJNIL beneficially owned by Monsey.
"PERSON" shall mean any individual, partnership, firm corporation,
limited liability company, association, joint venture, trust,
unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.
"RECEIVABLES" shall mean any and all accounts, notes, book debts and
other receivables of VJNIL from third parties (whether or not then invoiced
and/or due and payable), including, without limitation, customers, arising
from the conduct of the Business or otherwise before the date hereof,
whether or not in the ordinary course, together with any security therefor
and all unpaid financing charges accrued thereon.
"RELEVANT ACCOUNTING STANDARDS" shall mean any applicable SSAP,
Financial Reporting Standard, or Consensus or Statement of Recommended
Practice issued by the Accounting Standards Board in England and Wales, or
any committee thereof or body recognized thereby, in force as of the date
hereof.
"SSAP" shall mean United Kingdom Statement of Standard Accounting
Practice.
"SECURED LOAN AGREEMENTS" shall mean those two certain Secured Loan
Agreements, each of even date herewith, between (a) TM/Video International,
Inc., as lender, and VJNIL, as borrower, and (b) VJN, as lender, and VJNIL,
as borrower.
"SERVICES" shall mean the administration of VJNIL's ministerial day-
to-day operations; strategic planning and development; coordination,
development and implementation of marketing, advertising, sales, concert
and related music promotion, merchandising and home shopping projects, and
all other promotions and ventures that may be undertaken by VJNIL in the
Territory during the term of this Agreement; and all other administrative
services with respect to the Business as may be reasonably requested by
VJNIL during the term of this Agreement.
"STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase
Agreement of even date herewith among VJNIL, VJN and Ticketmaster in
relation to the purchase, sale and issue of shares of capital stock of
VJNIL.
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"STOCKHOLDERS AGREEMENT" shall mean that certain Stockholders
Agreement of even date herewith among VJNIL, VJN and Ticketmaster, relating
to the mutual rights and obligations of VJN and Ticketmaster with respect
to the shares of capital stock of VJNIL.
"TAX" OR "TAXES" shall mean any and all taxes, stamp duties, fees,
levies, duties, tariffs, imposts, and other charges of any kind (together
with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental Authority
or taxing authority, including, without limitation: taxes or other charges
on or with respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth;
taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges.
"TERRITORY" shall mean England, Wales, Scotland, Northern Ireland and
the Republic of Ireland, and any other territory to which the parties
hereto may subsequently agree in writing.
"TRANSACTION DOCUMENTS" shall mean the Note (as defined in Section
3.1), the Secured Loan Agreements, the Debentures, the Intercreditor
Agreement, the Stock Purchase Agreement, the Stockholders Agreement, the
Deed of Tax Covenant, and the Monsey Stock Purchase Agreement.
ARTICLE II
THE SERVICES
2.1 APPOINTMENT OF TICKETMASTER. Subject to the terms hereof, VJNIL
hereby engages Ticketmaster to provide the Services subject to the advice
and consent of the management and Board of Directors of VJNIL, and
Ticketmaster hereby accepts such engagement.
2.2 SIGNIFICANT DECISIONS. Notwithstanding any provision hereof to
the contrary, Ticketmaster shall not be permitted (other than in its
capacity as a stockholder of VJNIL pursuant to the Stockholders Agreement)
to undertake any of the following activities on behalf of VJNIL without the
prior consent of the Board of Directors of VJNIL:
(a) enter into any business, partnership or other venture, or
affect any change in the operations of VJNIL, which is not substantially
related to the Business;
(b) approve any consolidation, merger or amalgamation with, or
the acquisition of any interest in, any other Person or its assets, other
than acquisitions of
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goods and services in the ordinary course of business;
(c) enter into any agreement, or amend any existing agreement,
relating to the management of, or the provision of management or
administrative services to, VJNIL;
(d) in the event Ticketmaster's engagement hereunder is to be
terminated (and VJN does not elect to perform the Services pursuant to
Section 2.8), appoint any Person to perform the Services, or other similar
duties, in lieu of Ticketmaster;
(e) issue (whether by way of dividend, distribution or
otherwise), sell or grant to any Person, commit or otherwise undertake to
issue, sell or grant to any Person (i) any Equity Interest, or (ii) any
securities convertible into or exchangeable for or carrying any rights to
acquire any Equity Interest;
(f) enter into any lease, purchase or sale agreement relating to
any property, real or personal, that requires payments to or from VJNIL in
excess of L.50,000 during any one fiscal year, which agreement is not
included in or specifically contemplated by the Annual Budget or Carryover
Budget in effect for such fiscal year;
(g) select, determine terms of employment for, and decide to
renew and/or terminate the contracts of, each of the Managing Director, the
Finance Director and the Director of Programming of VJNIL;
(h) except in the ordinary course of business, (i) assume, incur
or guarantee any obligation or obligations for borrowed money individually
or in the aggregate in excess of L.150,000 in any fiscal year; (ii) cancel
or compromise any debts owed to, or claims held by, VJNIL in an amount
individually or in the aggregate in excess of L.50,000 in any fiscal year;
or (iii) waive or release any rights of VJNIL with a value individually or
in the aggregate in excess of L.50,000 in any fiscal year;
(i) initiate any proceedings or take any other action with
respect to the Bankruptcy of VJNIL;
(j) enter into any transaction between VJNIL and any stockholder
of VJNIL, and/or any Affiliate of any stockholder of VJNIL, if the value of
such transaction equals or exceeds L.150,000 (other than transactions
included in or specifically contemplated by any Annual Budget or Carryover
Budget then in effect);
(k) admit a judgment against VJNIL;
(l) make any substantive modification of this Agreement;
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(m) modify or amend any intellectual property licensed to VJNIL
pursuant to the VJN License (as defined in Section 4.1(c)), except in
accordance with the provisions of the VJN License; or
(n) agree or otherwise commit to do any of the foregoing.
2.3 LIMITATION OF TICKETMASTER'S RESPONSIBILITY. Nothing contained
herein is intended to impose and shall not impose upon Ticketmaster any
liability or obligation to pay, incur or advance any costs, expenses,
liabilities or obligations that are the responsibility of VJNIL, including,
without limitation, those obligations imposed upon VJNIL by any
Governmental Authority, by Laws and obligations arising under any agreement
now or hereafter existing between VJNIL and any third party. In the event
VJNIL has insufficient funds to pay or otherwise fulfill such costs,
expenses, liabilities or obligations when due, Ticketmaster shall have the
right, but not the obligation, to advance such funds to VJNIL; provided,
however, that any advance in excess of L.100,000 must have the prior
approval of the Board of Directors of VJNIL. Any such advance shall be
promptly reimbursed by VJNIL to Ticketmaster; provided, however, to the
extent any such advance is not reimbursed within seven (7) days, the full
amount of such advance shall bear interest from and including the date of
disbursement to the date of repayment (which date shall be the first date
on which funds are available for such reimbursement) at the rate of ten
percent (10%) per annum.
2.4 RESPONSIBILITIES OF VJNIL. Ticketmaster's agreement to provide
the Services under this Agreement is not intended to relieve VJNIL of, nor
shall Ticketmaster be deemed to have assumed, the responsibilities and
duties of VJNIL to any third party, including, without limitation,
contractual obligations of VJNIL and obligations of VJNIL to any
Governmental Authority such as the execution and filing of any tax or other
reports and returns or any other governmental filings required under
applicable broadcasting, tax, securities or other Laws. The foregoing
notwithstanding, Ticketmaster agrees to assist the management and officers
of VJNIL in the preparation of any such reports, returns or filings.
2.5 BOOKS OF ACCOUNT; REPORTS TO STOCKHOLDERS. Until the earlier to
occur of (a) termination of this Agreement for any reason or (b) the time
when Ticketmaster no longer provides the Services hereunder, Ticketmaster
shall assist VJNIL in (i) maintaining complete and correct books of account
in accordance with GAAP, all Relevant Accounting Standards and the
Companies Act 1985 of the U.K., as amended by the Companies Act 1989 ("the
Companies Act"), which books of account shall be kept at the principal
office of VJNIL, and upon reasonable notice to VJNIL, each of VJN and
Ticketmaster shall have access to such books and records and the right to
inspect and copy the same, and (ii) preparing any annual, quarterly and
other information, documents, and other reports (collectively, "Reports")
which VJNIL is otherwise required to distribute to its stockholders or file
with any Governmental Authority pursuant to applicable Laws in the United
Kingdom or the Republic of Ireland; provided, however,
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that the parties hereto acknowledge and agree that VJNIL shall be
ultimately responsible for maintaining such books of account and preparing
such Reports.
2.6 PERSONNEL; RESOURCES. Ticketmaster shall be entitled to select,
from time to time, those individuals who shall provide the Services
hereunder on Ticketmaster's behalf; provided, that in the event any such
individual is convicted of a material criminal offense involving dishonesty
or moral depravity within the Territory or the United States of America
during the period that he or she is engaged by Ticketmaster to assist in
providing the Services, Ticketmaster promptly shall terminate such
individual's engagement as a provider of Services hereunder. Ticketmaster
shall use all reasonable endeavors to make available under this Agreement,
as needed, the services of Ticketmaster's (or its Affiliates') senior
management personnel who have experience or expertise in the areas of
music, marketing, business development and/or music promotion, and
individuals with experience in conducting business in the United Kingdom.
Ticketmaster shall devote such time and effort as Ticketmaster deems
reasonably necessary to provide the Services.
2.7 VJNIL AND VJN COOPERATION. Each of VJNIL and VJN shall, and
shall cause each of their shareholders, officers, directors, employees and
agents, subject to the fiduciary duties of each such Person, to fully
cooperate with Ticketmaster, its officers, directors and agents, and with
each other party hereto in order that Ticketmaster, properly and in a
timely fashion, may fulfill its obligations hereunder.
2.8 TERMINATION FOR CAUSE; CASH IN LIEU OF SERVICES.
(a) Following the expiration of the first Contract Year, VJNIL
may terminate Ticketmaster's engagement hereunder for Cause as defined in
subsections (a) and (b) of the definition thereof. At any time during the
term hereof, VJNIL shall have the right to terminate Ticketmaster's
engagement hereunder for Cause as defined in subsections (c) through (i) of
the definition thereof. Following the termination of Ticketmaster's
engagement pursuant to this Section 2.8(a), VJN shall have the right but
not the obligation to provide the Services; provided, that if VJN exercises
its option to provide the Services, or otherwise undertakes to perform
duties or services similar to the Services, it shall do so on all of the
terms and subject to all of the responsibilities and obligations contained
herein with respect to Ticketmaster, including, without limitation, the
provisions regarding termination for Cause.
(b) Any termination of Ticketmaster's engagement pursuant to
Section 2.8(a) shall be effected in the following manner: The members of
VJNIL's Board of Directors who are entitled to vote at meetings of the
Board and who were nominated by VJN shall deliver written notice to
Ticketmaster specifying, in reasonable detail, the facts supporting
termination for Cause. No sooner than 20 days after receipt by
Ticketmaster of the foregoing notice, at a mutually agreed upon time and
location, a meeting shall be held to discuss whether termination for Cause
is or is not justified,
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which meeting shall be attended by (i) representatives of VJNIL and
Ticketmaster (as selected by each of them in their sole respective
discretion), (ii) the members of VJNIL's Board of Directors, the Chief
Executive Officers of each of VJN and Ticketmaster, and (iii) if VJNIL and
Ticketmaster agree, counsel to VJNIL and Ticketmaster. At the meeting,
each of VJNIL and Ticketmaster shall be allowed a reasonable amount of time
to present oral and written evidence in support of its position, however a
formal record of the meeting shall not be maintained. Following the
meeting, all members of VJNIL's Board of Directors who are not Ticketmaster
Nominees (as defined in the Stockholders Agreement) shall determine, by
majority vote (but in no event less than the vote of two such members),
whether to terminate Ticketmaster's engagement hereunder for Cause; such
vote shall constitute the action of the Board of Directors of VJNIL
pursuant to Section 2.8(a). The termination of Ticketmaster's engagement
following a meeting held in accordance with this Section 2.8(b) shall in no
way constitute a waiver or release by Ticketmaster of any rights it may
have hereunder, including, without limitation, for breach of this Agreement
or for wrongful termination.
(c) In the event that Ticketmaster's engagement to provide the
Services hereunder is terminated pursuant to this Section 2.8 (the
effective date of any such termination hereinafter the "Engagement
Termination Date") Ticketmaster's obligation to provide the Services
hereunder shall immediately cease and Ticketmaster shall, in lieu of
providing the Services, pay to VJNIL, not later than 30 days after the
Engagement Termination Date, the then outstanding principal amount of the
Note (as defined below), which shall discharge all remaining liability
under the Note and which payment shall be noted accordingly on the schedule
attached to the Note. Termination of Ticketmaster's engagement to provide
Services hereunder for Cause shall not constitute breach by Ticketmaster of
this Agreement or entitle VJN or VJNIL to collect damages on account of
such termination without it being proven that the act or omission
underlying such termination for Cause itself constitutes breach of this
Agreement.
ARTICLE III
SUBSCRIPTION FOR SHARES; COMPENSATION
3.1 SUBSCRIPTION FOR SHARES. Ticketmaster hereby subscribes for 110
newly issued and fully paid Ordinary Shares of VJNIL, with all rights
attaching and free from Encumbrances (the "Service Shares"), and in
consideration thereof, agrees to issue to VJNIL a promissory note
substantially in the form of Exhibit A attached hereto (the "Note"), dated
as of the date hereof, payable to the order of VJNIL in the aggregate
principal amount of L.625,400, which shall be due and payable in equal
monthly increments of L.10,423 commencing on July 31, 1995. Principal
amounts outstanding under the Note from time to time shall not accrue
interest. In consideration of the Note, VJNIL shall issue and deliver to
Ticketmaster, concurrently with the execution of this Agreement, the
Service Shares, which shares shall be deemed fully paid up upon issue.
3.2 COMPENSATION FOR SERVICES. In consideration for Ticketmaster's
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performance of the Services, the outstanding principal amount of the Note
shall be forgiven in equal monthly increments of Ten Thousand Four Hundred
Twenty-Three Pounds Sterling (L.10,423) per month on the last day of each
month commencing in July 1995 until the earlier of the date on which
(a) the principal amount of the Note has been forgiven in full, or
(b) Ticketmaster's engagement hereunder has been terminated pursuant to
Section 2.8. On the last day of each month, VJNIL shall make or cause to
be made an appropriate notation on the schedule attached to the Note and
made a part thereof reflecting the principal amount of the Note forgiven
for the month then ended. The aggregate unpaid amount of the Note set
forth on the schedule attached thereto shall be conclusive evidence, absent
manifest error, of the principal amount owing and unpaid on the Note. The
parties hereto agree and acknowledge that the fair market value of the
Services to be performed by Ticketmaster, on a monthly basis, approximately
equal the principal amount of the Note to be forgiven each month pursuant
to this Section 3.2
3.3 EXPENSES. In addition to the compensation set forth in Section
3.2 hereof, VJNIL shall pay to Ticketmaster in arrears on a monthly basis
an amount equal to the sum of all reasonable and accountable out-of-pocket
expenses paid, advanced or actually incurred by Ticketmaster in connection
with providing the Services hereunder. All such expenses shall be properly
documented in accordance with VJNIL's policies respecting itemization and
supporting documentation relative to reimbursable expenses, which
documentation shall be made available to VJNIL promptly upon written
request to Ticketmaster. All amounts invoiced by Ticketmaster hereunder
shall be due and payable by VJNIL within thirty (30) days of Ticketmaster's
delivery of reasonably detailed invoices to VJNIL in respect thereof.
3.4 SERVICE SHARES SUBJECT TO STOCKHOLDERS AGREEMENT. Ticketmaster
shall hold the Service Shares subject to the terms of the Stockholders
Agreement.
3.5 VALUE ADDED TAX. All sums payable hereunder are exclusive of
Value Added Tax. VJNIL shall timely pay any and all Value Added Tax that
is or may become due as a result of any payments made, forgiveness of the
Note or other compensation made or paid in respect of the Services.
ARTICLE IV
TERMINATION
4.1 RIGHT TO TERMINATE. This Agreement may be terminated with
respect to all parties hereto at any time:
(a) by mutual written consent of Ticketmaster and VJNIL;
(b) by Ticketmaster or VJN upon the suspension, revocation,
termination, loss or adverse (with respect to VJNIL's interest)
modification of that certain
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License No. LPS044 granted to VJNIL by the Independent Television
Commission on February 11, 1992, to come into force on February 14, 1992,
or any renewed modified or successor license (the "ITC License"); provided,
however, that Ticketmaster or VJN, as appropriate, shall be entitled to
terminate this Agreement under this subsection (b) only if such suspension,
revocation, termination, loss or adverse modification does not arise out of
or result solely or substantially from actions or omissions to act by
Ticketmaster or VJN, respectively;
(c) by Ticketmaster (i) upon the suspension, revocation,
termination, loss, adverse (with respect to VJNIL's interest) modification
of, or material breach by VJN of, that certain license, dated as of the
date hereof granted by VJN to VJNIL (the "VJN License") or any other
occurrence the effect of which would be to suspend, revoke, terminate,
assign or otherwise infringe upon VJNIL's exclusive license for the use of
certain technology granted by VJN to VJNIL pursuant thereunder, (ii) in the
event of a material breach by VJN or VJNIL of any agreement or covenant set
forth in this Agreement or any of the other Transaction Documents, (iii) if
any representation or warranty of VJN or VJNIL made in this Agreement or
any of the other Transaction Documents is subsequently proven to have been
incorrect or incomplete in any material respect when made, or (iv) the
occurrence of an event of Bankruptcy with respect to either VJN or VJNIL;
or
(d) by VJN (i) if Ticketmaster, together with its Affiliates,
ceases to own any capital stock of VJNIL, or (ii) if Ticketmaster's
engagement hereunder is terminated pursuant to Section 2.8.
4.2 EFFECTS OF TERMINATION. Upon the termination of this Agreement
pursuant to Section 4.1: (a) all reimbursements or other amounts then due
to Ticketmaster hereunder, including any accrued but unpaid interest
thereon, shall immediately become due and payable, (b) Ticketmaster, VJN
and VJNIL shall be released and discharged from any further obligation
hereunder; provided, however, that such termination shall not relieve any
party hereto of any liability for breach of this Agreement prior to the
date of termination, and (c) unless Ticketmaster's engagement to provide
Services is terminated pursuant to Section 2.8, Ticketmaster's obligation
to pay the outstanding principal amount of the Note shall not be
accelerated.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF VJNIL. As an inducement to
Ticketmaster to enter into this Agreement and to subscribe for the Service
Shares, VJNIL hereby represents and warrants to Ticketmaster (and
acknowledges that Ticketmaster has relied on the same) as follows:
(a) Service Shares. The Service Shares, when issued and
delivered to
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Ticketmaster in accordance with Section 3.1 hereof, (i) will have been duly
authorized and validly issued, and will be fully paid up, (ii) will not be
issued in violation of any preemptive or other rights of any stockholder of
VJNIL, and (iii) will be free and clear of any Encumbrance, other than
pursuant to the Stockholders Agreement or as otherwise expressly set forth
in this Agreement.
(b) Organization, Qualification, Etc. of VJNIL. VJNIL is a duly
registered, incorporated and validly existing corporation under the laws of
England and Wales and has all necessary corporate power and authority to
own, operate or lease the properties and Assets now owned, operated or
leased by it and to carry on its Business as it has been, is currently and
is currently anticipated to be conducted. VJNIL is duly licensed or
qualified to do business and is in good standing in each jurisdiction in
which the properties owned or leased by it or the operation of its Business
makes such licensing or qualification necessary, except where the failure
to be so licensed, qualified or in good standing does not have, or could
not reasonably be expected to have, a Material Adverse Effect. All
material corporate actions taken by VJNIL have been duly authorized and
VJNIL has not taken any action that in any respect conflicts with,
constitutes a default under or results in a violation of any provision of
its Memorandum of Association or Articles of Association (collectively, the
"Articles of Association"). True and correct copies of VJNIL's (i)
Articles of Association, as amended and restated through the date hereof
and (ii) resolutions of the members of VJNIL and of the Board of Directors
adopted prior to the date hereof heretofore have been delivered to
Ticketmaster and all of such resolutions remain in full force and effect in
the form delivered to Ticketmaster.
(c) Capitalization of VJNIL. Schedule 5.1(c) accurately (i)
sets forth the names of the holders of all of the outstanding capital stock
of VJNIL and the number of shares owned by each such stockholder and (ii)
describes any preferences in distributions to which each such stockholder
is entitled. There are no preemptive rights with respect to any capital
stock of VJNIL and, except as set forth on Schedule 5.1(c), there are no
outstanding options, subscriptions, warrants, calls, contracts, convertible
securities, or other rights, agreements, arrangements or commitments of any
character under which VJNIL is or may become obligated to issue, assign or
transfer any shares of capital stock of VJNIL or purchase, redeem or
otherwise acquire any outstanding shares of capital stock of VJNIL. Each
outstanding share of capital stock of VJNIL has been duly and validly
authorized and issued and is fully paid up and owned, beneficially and of
record, by the stockholders listed on Schedule 5.1(c). VJNIL has not and,
no stockholder listed on Schedule 5.1(c) has, granted any option or other
right to purchase any capital stock of VJNIL or any interest therein from
any such stockholder, except as set forth in the Monsey Stock Purchase
Agreement.
(d) Authority of VJNIL. VJNIL has all necessary corporate power
and authority to enter into all of the agreements to which it is a party
that are necessary to effect the Concurrent Transactions (collectively, the
"Additional Agreements"), to carry
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out its obligations thereunder and to consummate the transactions
contemplated thereby, as applicable. The execution and delivery by VJNIL
of each of the Additional Agreements, the performance by VJNIL of its
obligations thereunder and the consummation by VJNIL of the transactions
contemplated thereby have been duly authorized by all requisite corporate
action on the part of VJNIL. Each of the Additional Agreements has been,
or at Closing will be, duly executed and delivered by VJNIL and (assuming
due authorization, execution and delivery by the other parties thereto)
constitutes the legal, valid and binding obligation of VJNIL, enforceable
against VJNIL in accordance with its respective terms, except as such
enforcement may be subject to (i) Bankruptcy or other similar Laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
(e) No Conflict. Assuming that all consents, approvals,
authorizations and other actions described in Section 5.1(f) have been
obtained and all filings and notifications listed on Schedule 5.1(e) have
been made, the execution, delivery and performance of each of the
Additional Agreements by VJNIL and the consummation of the transactions
contemplated hereby are within VJNIL's objects and powers and do not and
will not (i) violate, conflict with or result in the breach of any
provision of VJNIL's Articles of Association, (ii) conflict with or violate
any Law or Governmental Order applicable to VJNIL, the Business or the
Assets which violation or conflict could, individually or in the aggregate,
have a Material Adverse Effect on VJNIL, the Business, or the transactions
contemplated hereby (including the Concurrent Transactions), or (iii)
except as set forth on Schedule 5.1(e), conflict with, result in any breach
of, constitute a default (or an event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of its Assets pursuant to, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument, agreement or arrangement to which
VJNIL is a party or by which any of such assets or properties is bound or
affected which conflict or violation could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(f) Consents and Approvals. Except as set forth on Schedule
5.1(f), the execution, delivery and performance of each of the Additional
Agreements by VJNIL does not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to
any Governmental Authority or any third party.
(g) Litigation. Except as set forth on Schedule 5.1(g) (which,
with respect to each action disclosed therein, sets forth: the parties,
nature of the proceeding, date and method commenced, amount of damages or
other relief sought and, if applicable, paid or granted), there are no
actions, disputes or claims (other than proceedings filed but not yet
served on VJNIL) being brought or, to VJNIL's knowledge,
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threatened by or against VJNIL (or any of its respective directors,
officers, employees or agents), or affecting any of the Assets, pending
(or, to the knowledge of VJNIL, threatened) and which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
None of the matters disclosed on Schedule 5.1(g) could reasonably be
expected to affect the legality, validity or enforceability of this
Agreement or the consummation of the transactions contemplated hereby,
including without limitation, the Concurrent Transactions. Except as set
forth on Schedule 5.1(g), none of VJNIL nor any of the Assets is subject to
any Law or Governmental Order (nor, to the knowledge of VJNIL, are there
any such Governmental Orders threatened to be imposed by any Governmental
Authority) which has had or could reasonably be expected to have a Material
Adverse Effect.
(h) Financial Information.
(i) All balance sheets, profit and loss accounts and all
other financial information of VJNIL which have been or hereafter shall be
furnished by or on behalf of VJNIL to Ticketmaster for the purposes of or
in connection with this Agreement or any transaction contemplated hereby,
including (A) the audited balance sheet as of December 31, 1994 and the
related audited profit and loss account for the fiscal year then ended,
together with all notes and schedules thereto (the "Year End Financial
Statements") and (B) the unaudited balance sheet of VJNIL at April 30, 1995
and the related unaudited profit and loss account and statement of cash
flows of VJNIL (the "Interim Financial Statements") have been prepared in
accordance with GAAP, all applicable Relevant Accounting Standards and the
Companies Act, consistently applied throughout the periods involved (except
as disclosed therein) and give a true and fair view of the state of affairs
of VJNIL as at the dates therefor and the results of their operations for
the periods then ended, subject to year-end adjustments consisting only of
normal recurring accruals. On the Closing Date, VJNIL will not have any
liabilities, greater than L.100,000 individually or in the aggregate,
whether prospective, contingent or otherwise, including for Taxes, long-
term leases or unusual forward or long-term commitments, which are not
fully provided for in the Interim Financial Statements, whether or not
required to be so fully provided for as of the date thereof, except for
those liabilities incurred since the date thereof in the ordinary course of
VJNIL's business or as described on Schedule 5.1(h) and those liabilities
reflected in the footnotes to the Year End Financial Statements.
(ii) The annual operating budget of VJNIL for fiscal year
1995 (the "Budget") that heretofore has been delivered to Ticketmaster, has
been prepared in light of the past operations of VJNIL. The Budget has
been prepared in good faith, on the basis of honestly held views of
management of VJN, using accounting principles and methods consistent with
those used in preparing the Year End Financial Statements, except that the
Budget omits (A) certain footnote disclosures and financial statement
presentation items required by GAAP, all Relevant Accounting Standards
and/or the Companies Act and (B) certain year end adjustments consisting
only of normal recurring
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accruals usually included in the preparation of year end financial
statements. The Budget is based on reasonable and realistic assumptions in
light of current economic conditions and VJNIL has no knowledge of any
reason why VJNIL should not be able to achieve the performance levels set
forth in the Budget in light of current economic conditions. Ticketmaster
acknowledges that some of the assumptions upon which the Budget has been
based may not materialize.
(iii) Since December 31, 1994, VJNIL has not paid or
declared any dividend or distribution with respect to its outstanding
capital stock.
(i) Books and Records. The books of account and other financial
records of VJNIL: (i) reflect all items of income and expense and all
assets and liabilities required to be reflected therein, (ii) are complete
and correct, not misleading and do not contain or reflect any inaccuracies
or discrepancies and (iii) have been maintained in accordance with good
business and accounting practices.
(j) Receivables. Except to the extent, if any, provided for on
the balance sheet included in the Interim Financial Statements and except
as set forth on Schedule 5.1(j), all Receivables reflected on the balance
sheet included in the Interim Financial Statements arose from, and the
Receivables existing as of the Closing Date will have arisen from, the sale
of services to persons not Affiliated with VJNIL and in the ordinary course
of its business consistent with past practice and, except as provided
against on the balance sheet included in the Interim Financial Statements,
constitute or will constitute, as the case may be, only valid, undisputed
claims of VJNIL not subject to valid claims of set-off, off-set or other
defenses or counterclaims. The Interim Financial Statements make full
provision for all doubtful debts and all bad debts have been written off,
except for doubtful debts and bad debts that, individually or in the
aggregate, would not have a Material Adverse Effect on VJNIL or the
Business.
(k) Acquired Assets. Except as disclosed on Schedule 5.1(k),
each Asset of VJNIL (including, without limitation, the benefit of any
licenses, leases or other agreements or arrangements) acquired since the
date of the Interim Financial Statements has been acquired for
consideration and on terms no less favorable to VJNIL than otherwise would
have been available in a comparable arms' length transaction on the date of
such acquisition, except for Assets with an aggregate acquisition cost of
not more than L.25,000.
(l) Conduct of Business in the Ordinary Course. Since the date
of the Interim Financial Statements, and except as disclosed on
Schedule 5.1(l) or as otherwise specifically permitted hereby, VJNIL has
conducted business only in the ordinary course and consistent with past
practice.
(m) Compliance with Laws. Except as set forth on
Schedule 5.1(m), VJNIL has conducted and continues to conduct its business
in all material respects in
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accordance with all Laws and all Governmental Orders entered by or with any
Governmental Authorities, and VJNIL is in compliance with all such Laws or
Governmental Orders, except to the extent that the failure to so conduct or
comply therewith would not, in the aggregate, have a Material Adverse
Effect on VJNIL, the Business, or on the transactions contemplated hereby
(including the Concurrent Transactions).
(n) Material Contracts.
(i) VJNIL has, or has caused to be, made available to
Ticketmaster for review and duplication, correct and complete copies (or in
the case of oral contracts, summaries thereof) of all of the following
contracts and agreements of VJNIL, together with all material contracts,
agreements, leases and subleases to which VJNIL is a party concerning the
management or operation of any real property and all material agreements
relating to Intellectual Property (such material contracts and agreements,
listed on Schedule 5.1(n), collectively, "Material Contracts"):
(A) each contract and agreement for the purchase of
inventory or personal property with any supplier or for the furnishing of
services to VJNIL, or otherwise related to the Business under the terms of
which VJNIL: (1) is reasonably anticipated to pay or otherwise give
consideration of more than L.5,000 in the aggregate over the remaining term
of such contract or (2) cannot cancel without penalty or further payment
and without more than 30 days' notice;
(B) each contract and agreement for the sale of
inventory or other personal property or for the furnishing of services by
VJNIL which: (1) is reasonably anticipated to involve consideration of
more than L.5,000 in the aggregate during the fiscal year ending December
31, 1995 or in any fiscal year thereafter, (2) is reasonably anticipated to
involve consideration of more than L.5,000 in the aggregate over the
remaining term of the contract or (3) cannot be cancelled by VJNIL without
penalty or further payment and without more than 30 days' notice;
(C) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing, consulting and advertising contracts and agreements to which
VJNIL is a party;
(D) all management contracts and contracts with
independent contractors, consultants or other persons (including
Affiliates) (or similar arrangements) involving exclusive rights or
requiring payments in excess of L.5,000 individually to which VJNIL is a
party and which are not cancelable without penalty or further payment on 30
days' or less notice;
(E) all contracts and agreements relating to
indebtedness of VJNIL in excess of L.5,000 individually or L.5,000 in the
aggregate;
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(F) all contracts and agreements with any Governmental
Authority to which VJNIL is a party;
(G) all contracts and agreements that limit or purport
to limit the ability of VJNIL to compete in any line of business, or with
any person, or in any geographic area or during any period of time;
(H) all contracts and agreements between or among
VJNIL on the one hand and any Affiliate of VJNIL on the other hand;
(I) all leases and subleases for tangible personal
property having a value in excess of L.5,000; for purposes of this
Agreement, the term "lease" shall include any and all leases, subleases,
sale/leaseback agreements or similar arrangements;
(J) all contracts relating to Intellectual Property
and all contracts relating to real property owned, leased or used by VJNIL;
and
(K) all other contracts and agreements whether or not
made in the ordinary course of business, which are material to VJNIL or the
conduct of the Business.
(ii) Except as disclosed on Schedule 5.1(n), each Material
Contract: (A) is valid and binding on the respective parties thereto and is
in full force and effect and (B) upon consummation of the transactions
contemplated hereby shall continue in full force and effect without penalty
or other adverse consequence. VJNIL is not and, to VJNIL's knowledge, no
other party to any Material Contract is, in breach of or default under any
Material Contract, which breach or default would have a Material Adverse
Effect on VJNIL, and no Material Contract contravenes or is registrable
under any of the Trade Descriptions Acts, the Fair Trading Act 1973, the
Restrictive Trade Practices Act 1976 and 1977, the Resale Prices Act 1976
or the Competition Act 1980.
(iii)There is no contract, agreement or other arrangement
granting any person any preferential right to purchase, other than in the
ordinary course of Business consistent with past practice, any of the
properties, assets or services of VJNIL.
(iv) There is not now outstanding any guarantee or agreement
for indemnity or for suretyship either given by or for the benefit of
VJNIL.
(o) Intellectual Property.
(i) Ticketmaster heretofore has been provided with a true
and complete list of all Intellectual Property which VJNIL owns or has the
right to use. VJNIL has full ownership thereof or the right to use all
such rights, in each case except to the extent heretofore disclosed in
writing to Ticketmaster, and VJNIL has no
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<PAGE> 25
knowledge that the conduct of the Business as now operated, as of the date
hereof, conflicts with, misappropriates or infringes, or has been alleged
to infringe, any Intellectual Property rights or franchises of any person
in any manner (including patents, trade secrets or other proprietary rights
of any third party). Ticketmaster heretofore has been provided with a true
and complete copy of every material license or other material agreement,
including all amendments thereto, pursuant to which VJNIL agreed to grant
or has granted rights with respect to the Intellectual Property, or
pursuant to which VJNIL enjoys rights in any Intellectual Property of any
person. No current or former consultant, employee or Affiliate of VJNIL or
VJN or any of their respective shareholders, officers or directors has any
right, title or interest in any of the Intellectual Property used and/or
owned by VJNIL. VJNIL heretofore has delivered to Ticketmaster true,
complete and correct copies of all material correspondence, memoranda and
other written advice from VJNIL's patent counsel or from any Governmental
Authority, including without limitation, the United States Patent and
Trademark Office, the Independent Television Commission, the U.K. Patent
Office and Trademark Registry and the European Patent Office describing or
discussing the Intellectual Property or the availability of patent
protection for VJNIL's products, services and/or business.
(ii) Except to the extent heretofore disclosed to
Ticketmaster, to VJN's knowledge, none of the Intellectual Property owned
by or licensed to VJNIL is being infringed by any person.
(iii) To VJNIL's knowledge, the Intellectual Property
heretofore disclosed in writing to Ticketmaster comprises all of the
Intellectual Property required to enable VJNIL to lawfully carry on the
Business as now conducted.
(p) Real Property. The particulars of the real property set
forth on Schedule 5.1(p) attached hereto (the "Real Property") are true and
correct in all respects and VJNIL has good and marketable title to the Real
Property free from Encumbrances and other adverse rights. The Real
Property comprises all the real property owned, used or occupied by VJNIL
in connection with the Business and VJNIL has never owned any interest in
any other real property other than the Real Property. There is no
violation of any law (including, without limitation, any building,
planning, zoning law or environmental law) or any covenants, stipulations
or conditions relating to any of the Real Property and VJNIL is in peaceful
and undisturbed possession of each parcel of Real Property, except to the
extent failure to be in such possession could not have a Material Adverse
Effect. There are no contractual or legal restrictions that preclude or
restrict in any material manner the ability to use any of the Real Property
in the manner in which they are currently being used and the Real Property
has all rights and easements reasonably necessary for their use and
enjoyment for the purposes of the Business. VJNIL is not leasing or
subleasing and has not leased or sublet any parcel or any portion of any
parcel of Real Property to any other Person, nor has VJNIL assigned its
interest under any lease or sublease for any leased Real Property to any
third party. There are no outstanding material disputes with any Person
relating to the Real Property
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<PAGE> 26
or its use and no notices have been given or received by VJNIL which would
adversely affect the use and enjoyment of the Real Property.
(q) Assets. VJNIL owns, leases or has the legal right to use
all the properties and assets used or intended to be used or required in
the conduct of the Business and which are material and, with respect to
contract rights, is a party to and enjoys the right to the benefits of all
material contracts and agreements used or intended to be used by VJNIL or
required in or relating to the conduct of the Business (such properties,
assets and contract rights collectively referred to as the "Assets").
VJNIL has good title to or, in the case of leased or subleased Assets,
valid and subsisting leasehold interests in, all the Assets, free and clear
of all Encumbrances, except as disclosed on Schedule 5.1(q). All the
Assets are in good operating condition and repair, ordinary wear and tear
excepted, and are suitable for the purposes for which they are used and
intended.
(r) Suppliers. Except as disclosed on Schedule 5.1(r), VJNIL
has not received any notice, nor is VJNIL aware, that any supplier will not
sell supplies and other goods or provide services to VJNIL at any time
after the date hereof on terms and conditions substantially similar to
those used in its current sales to VJNIL, subject only to general and
customary price increases.
(s) Taxes.
(i) Except as set forth on Schedule 5.1(s)(i), (A) all
returns and reports in respect of all Taxes required to be filed with
respect to VJNIL or the Business have been timely filed; (B) all Taxes
required to be shown on such returns and reports or otherwise due have been
timely paid; (C) all such returns and reports are true, correct and
complete; (D) no adjustment relating to such returns has been proposed by
any tax authority and, to the knowledge of VJNIL, no basis exists for any
such adjustment; (E) there are no pending or, to the knowledge of VJNIL,
threatened actions or proceedings for the assessment or collection of Taxes
against VJNIL; (F) there are no Encumbrances on any Assets; (G) VJNIL has
not been at any time a member of any partnership or joint venture or the
holder of a beneficial interest in any trust for any period for which the
statute of limitations for any Tax has not expired; and (H) all Taxes
required to be withheld, collected or deposited by or with respect to VJNIL
or the Business have been timely withheld, collected or deposited, as the
case may be, and, to the extent required, have been paid to the relevant
taxing authority.
(ii) Except as disclosed on Schedule 5.1(s)(ii), (A) there
are no outstanding waivers or agreements extending the statute of
limitations for any period with respect to any Tax to which VJNIL may be
subject; (B) there are no proposed reassessments of any property owned by
VJNIL or other proposals that could increase the amount of any Tax to which
VJNIL would be subject; and (C) no power of attorney that is currently in
force has been granted with respect to any matter relating to Taxes
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that could affect VJNIL.
(iii) VJNIL has delivered to Ticketmaster correct and
complete copies of all federal, state and foreign income, franchise and
similar tax returns since January 1991, and correct and complete summaries
of all examination reports, and statements of deficiencies assessed against
or agreed to by VJNIL since January 1991.
(iv) On the balance sheet included in the Interim Financial
Statements, reserves and allowances have been provided adequate to satisfy
all liabilities for Taxes relating to VJNIL for periods through the date
thereof.
(t) ITC License. The ITC License, is in full force and effect
and has not been amended or modified from the copy heretofore delivered to
Ticketmaster. VJNIL is in full compliance in all material respects with
all conditions and provisions of the ITC License, including without
limitation all provisions relating to programmed standards and record
keeping requirements. VJNIL is not, and VJNIL has not received any notice
that VJNIL is, in default or breach under the ITC License and no event has
occurred and no condition or state of facts exists (other than the
transactions contemplated herein, including, without limitation, the
Concurrent Transactions, with respect to which VJNIL makes no
representation) that, with the passage of time or the giving of notice or
both, could constitute a default or breach under the ITC License. VJNIL,
on a timely basis, has made all payments and filings required under the ITC
License. VJNIL has not received any notice that the Independent Television
Commission has revoked or intends to revoke the ITC License and, to the
knowledge of VJNIL, no action is threatened or in progress against VJNIL
with respect thereto.
(u) Full Disclosure. No representation or warranty with respect
to VJNIL contained in this Agreement and no written statement contained in
any financial or operating data or certificate furnished to Ticketmaster
pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement (including the Concurrent Transactions),
contains any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading.
(v) Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement and the Transaction
Documents based upon arrangements made by or on behalf of VJNIL except an
aggregate of $75,000 (U.S.) payable by VJNIL to Communications Equity
Associates, which $75,000 (U.S.) shall be paid at the Closing solely by
VJNIL.
(w) Additional Representations and Warranties of VJNIL. Each of
the representations and warranties made by VJNIL to TM/Video International,
Inc. pursuant to Article IV of the Secured Loan Agreement to which TM/Video
International, Inc. is
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a party are true and correct in all material respects as of the date
hereof.
5.2 REPRESENTATIONS AND WARRANTIES OF VJN AND TICKETMASTER. Each of
Ticketmaster and VJN hereby represents and warrants to each other party to
this Agreement as follows:
(a) Organization. It is a corporation duly organized, validly
existing, and in good standing under the Laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own,
lease, and operate its properties and to carry on its business as now being
conducted. It is duly qualified or licensed and in good standing to carry
on its business in each jurisdiction in which the property owned, leased,
or operated by it in connection with its business or the nature of its
operations make such qualification necessary.
(b) Authorization and Validity of Agreement and Transaction
Documents. It has all requisite corporate power and authority to enter
into this Agreement and each other Transaction Document to which it is a
party and to perform its obligations hereunder and thereunder, as
applicable. The execution, delivery and performance by it of this
Agreement and each other Transaction Document to which it is a party has
been duly authorized by its Board of Directors and shareholders, if
required, and no other corporate action on the part of it is necessary to
authorize the execution and delivery by it of this Agreement and each other
Transaction Document to which it is a party. This Agreement and each other
Transaction Document to which it is a party has been duly executed and
delivered by it and is a valid and binding obligation of it, enforceable in
accordance with its terms, subject to applicable Bankruptcy or other Laws
affecting the enforcement of creditors' rights generally, or by general
equitable principles.
(c) No Approvals or Notices Required; No Conflict with
Instruments. The execution and delivery of this Agreement by it and the
performance of the transactions contemplated hereby will not (i) result in
a violation of its Certificate or Articles of Incorporation, as
appropriate, or By-Laws, (ii) conflict with or violate any provision of any
Law, judgment, or decree applicable to it, or by which any of its
properties or assets are bound or affected, which conflict or violation
would, individually or in the aggregate, have a Material Adverse Effect on
it, the Business or its ability to perform its obligations hereunder or
under the other Transaction Documents to which it is a party, (iii) require
any action by, or in respect of, or further filing with, any governmental
body, or contravene or constitute a default under or give rise to a right
of termination, cancellation, modification or acceleration of any right or
obligation of it, or to a loss of any benefit of it under any provision of
applicable Law, or (iv) result in a violation or breach of any provision
of, or constitute a default (or an event, which with notice or lapse of
time, or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of
any lien upon any of the
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properties or assets of it under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, contract,
lease, agreement or other instrument or obligation of any kind to which it
is a party or by which it, or any of its properties or assets, may be
bound, which termination, acceleration or lien would, individually or in
the aggregate, have a Material Adverse Effect on it, the Business or its
ability to perform its obligations hereunder.
(d) Litigation. No litigation, arbitration proceedings or
governmental proceedings are pending or, to the representing party's
knowledge, threatened against such representing party which could, if
adversely determined, have a Material Adverse Effect on the representing
party or adversely affect the consummation of the transactions contemplated
hereby.
ARTICLE VI
CONFIDENTIALITY
6.1 CONFIDENTIAL INFORMATION.
(a) Each of Ticketmaster, VJNIL and VJN acknowledges that during
the term of this Agreement, it may be furnished with or may otherwise
obtain or have access to proprietary or confidential information regarding
the other parties hereto and other business conducted by such other
parties, including without limitation, Intellectual Property, financial
plans or projections and other confidential and proprietary technical,
financial or business information (collectively, "Confidential
Information"). Each of Ticketmaster, VJNIL and VJN acknowledges that all
Confidential Information, whether in oral, written, encoded, graphic or
other tangible or intangible form, is subject to the terms of this
Agreement.
(b) Notwithstanding the foregoing, the following shall not be
considered Confidential Information subject to this Agreement:
(i) information that is or becomes generally available to
and known by the public other than as a result of an unauthorized
disclosure by a party hereto or a Permitted Person (as defined in Section
6.1(c) hereof); or
(ii) information which is received by a party hereto or a
Permitted Person on a non-confidential basis from a third person who is not
under any obligation to maintain the confidentiality thereof.
(c) So long as this Agreement is in effect and at all times
thereafter, each of Ticketmaster, VJNIL and VJN agrees to:
(i) hold all Confidential Information in confidence and
protect it from disclosure with a reasonable degree of care and in any
event with at least the
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<PAGE> 30
same degree of care by which such party protects its own proprietary or
confidential information;
(ii) restrict disclosure of Confidential Information solely
to those persons who have a need to know and only such portion of
Confidential Information as they need to know, in connection with such
party's performance of its obligations pursuant to this Agreement (the
"Permitted Persons");
(iii) advise the Permitted Persons of the confidential
nature of the Confidential Information and the terms of this Section 6.1
and implement reasonable procedures to prevent disclosure or improper use
of Confidential Information by the Permitted Persons;
(iv) use Confidential Information only in connection with
the performance of its obligations pursuant to, and in compliance with,
this Agreement; and
(v) be responsible for such party's Permitted Person's
breach of this Section 6.1 and of Sections 6.2 and 6.3 hereof.
6.2 RETURN OF CONFIDENTIAL INFORMATION. The Confidential Information
at all times shall be and remain the property of Ticketmaster, VJNIL or
VJN, as appropriate. Within five (5) days after the expiration or
termination of this Agreement or upon request of the party which has a
proprietary interest in the Confidential Information (the "Owner Party"),
each other party hereto shall (a) return to the Owner Party all
Confidential Information received by such party in tangible form and
(b) destroy all studies, analyses, reports or other documents prepared by
such party which contain or are based, in whole or in part, on the
Confidential Information, which destruction shall be confirmed in writing
within such five (5) day time period.
6.3 DISCLOSURE OF CONFIDENTIAL INFORMATION. In the event that any
party hereto becomes subject to a demand for discovery or other request for
disclosure of Confidential Information pursuant to applicable Law or legal
process, such party, on its own or on such Permitted Person's behalf, shall
give prompt notice to the Owner Party of such demand or request and shall
cooperate, as reasonably requested, in seeking a protective order or other
appropriate remedy and/or, to the extent permitted by Law, with respect to
the form of such required disclosure.
6.4 EQUITABLE RELIEF. Each of Ticketmaster, VJNIL and VJN
understands and acknowledges that money damages would not be a sufficient
remedy for any breach of Sections 6.1, 6.2 or 6.3 hereof and each agrees
that, in the event of a breach or threatened breach of any of such
provisions, in addition to any remedies otherwise available, the
appropriate Owner Party shall be entitled to equitable relief, including
injunction and specific performance, without the necessity of posting a
bond.
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<PAGE> 31
ARTICLE VII
INTERESTED TRANSACTIONS
Subject to Section 2.2(j) hereof, any contract, lease or other
relationship between VJNIL and either of Ticketmaster or VJN (or their
respective Affiliates) which is entered into in good faith and in
furtherance of the Business, is on terms no more favorable than would be
offered to an unrelated third party and is disclosed to VJNIL and VJN or
Ticketmaster, as appropriate, shall be permitted and shall not be voidable
or affected in any manner by the fact that Ticketmaster or VJN is directly
or indirectly interested therein. None of Ticketmaster, VJN or VJNIL shall
have any rights with respect to any benefits or profits directly or
indirectly realized by any of the other parties hereto as a result of any
of the foregoing transactions.
ARTICLE VIII
LIMITATION ON LIABILITY
Neither Ticketmaster nor any Person acting on its behalf, pursuant
hereto, shall be liable, responsible or accountable in damages or otherwise
to VJNIL or VJN or their Affiliates for any acts or omissions performed or
omitted to be performed by them within the scope of the authority conferred
upon Ticketmaster or such Person by this Agreement, unless Ticketmaster or
such Person, respectively, shall be adjudicated guilty of Gross Negligence
or willful misconduct with respect to such conduct or omission to act.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION OF TICKETMASTER AND TICKETMASTER AFFILIATES.
Notwithstanding Ticketmaster's agreement to provide the Services in
accordance with the provisions hereof, each of VJNIL and VJN acknowledges
that performance by Ticketmaster of the Services shall not subject
Ticketmaster or its Affiliates, or any of its or their respective partners,
stockholders, officers, directors, employees or agents (individually, a
"Ticketmaster Indemnified Party" and collectively, the "Ticketmaster
Indemnified Parties") to any liability whatsoever, except, with respect to
any Ticketmaster Indemnified Party, as shall be caused by the Gross
Negligence or willful misconduct on the part of such Ticketmaster
Indemnified Party. From and after the date hereof VJNIL and VJN shall,
jointly and severally, indemnify and hold harmless the Ticketmaster
Indemnified Parties from and against any claim, loss, damage or expense,
including, without limitation, reasonable attorneys' and consultants' fees,
disbursements and expenses, which may be asserted against, imposed upon or
suffered by any Ticketmaster Indemnified Party arising out of or related to
(a) any inaccuracy in or breach of any (i) representations or warranties
made by VJN or VJNIL herein that are qualified as to materiality or
(ii) covenants or agreements made by VJN or VJNIL herein, unless such
inaccuracy or breach is due to the Gross Negligence or willful misconduct
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<PAGE> 32
on the part of any Ticketmaster Indemnified Party, (b) any material
inaccuracy in or material breach of any representations or warranties made
by VJN or VJNIL herein that are not qualified as to materiality, unless
such material inaccuracy or material breach is due to the Gross Negligence
or willful misconduct on the part of any Ticketmaster Indemnified Party,
(c) the Services performed hereunder, or (d) any action or omission of VJN
or VJNIL which occurred prior to the date hereof, except (i) with respect
to any Ticketmaster Indemnified Party, any such claim, loss, damage or
expense which is caused by the Gross Negligence or willful misconduct on
the part of such Ticketmaster Indemnified Party, or (ii) any losses to the
extent that the same result solely from a decline in value of the Service
Shares below L.625,400, which decline is not directly related to and does
not directly result from any inaccuracy in or breach of any of the
representations, warranties, covenants or agreements made herein by VJNIL
or VJN.
9.2 INDEMNIFICATION OF VJNIL AND VJN. From and after the date hereof
and subject to Article VIII, Ticketmaster shall indemnify and hold harmless
each of VJNIL and VJN or their respective Affiliates, or any of their
partners, stockholders, officers, directors, employees or agents (each a
"VJN/VJNIL Indemnified Party"), from and against any claim, loss, damage or
expense, including, without limitation, reasonable attorneys' and
consultants' fees, disbursements and expenses, suffered by VJNIL, VJN or
any VJN/VJNIL Indemnified Party arising or relating to (a) any inaccuracy
in or breach of any (i) representations or warranties made by Ticketmaster
herein that are qualified as to materiality, or (ii) covenants or
agreements made by Ticketmaster herein, unless such inaccuracy or breach is
due to the Gross Negligence or willful misconduct on the part of VJN, VJNIL
or any VJN/VJNIL Indemnified Party, (b) any material inaccuracy in or
material breach of any representations or warranties made by Ticketmaster
herein that are not qualified as to materiality, unless such material
inaccuracy or material breach is due to the Gross Negligence or willful
misconduct on the part of VJN, VJNIL or any VJN/VJNIL Indemnified Party.
9.3 PROCEDURE FOR CLAIMS.
(a) Notice. Within ten (10) days after obtaining written notice
of any claim or demand which has given rise to, or could reasonably give
rise to, a claim for indemnification hereunder, the party seeking
indemnification shall give written notice of such claim ("Notice of Claim")
to the other party; provided, however, that the indemnifying person shall
not make any settlement of any claims (except for settlements which involve
only the payment of money) without the written consent of the party seeking
indemnification, which consent shall not be unreasonably withheld or
delayed. The person seeking indemnification shall be kept reasonably
informed of the action, suit or proceeding giving rise to the Notice of
Claim at all relevant stages thereof. The Notice of Claim shall set forth
a brief description of the facts giving rise to such claim and the amount
(or a reasonable estimate) of the loss, damage or expense suffered, or
which may be suffered, by the party seeking indemnification.
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<PAGE> 33
(b) Defense. Upon receiving the Notice of Claim, the
indemnifying party shall resist, settle or otherwise dispose of such claim
in such manner as it shall deem appropriate, including the engagement of
counsel, and shall be responsible for the payment of all expenses,
including the reasonable fees and expenses of such counsel; provided,
however, that the failure to give a Notice of Claim to the indemnifying
party shall not prohibit the indemnified party from obtaining
indemnification from an indemnified person to the extent that the
indemnifying party is not prejudiced by such failure; provided, further,
that the indemnified party shall have the right to engage separate counsel
in any such action and to participate in or assume the defense thereof, but
the fees and expenses of such counsel shall be at the indemnified party's
expense unless (i) the engagement has been specifically authorized by the
indemnifying party in writing, (ii) the indemnifying party has failed to
assume the defense and engage counsel in a timely manner, or (iii) the
named parties to any action (including any impleaded parties) include
Ticketmaster and VJNIL and/or VJN and the indemnified party has been
advised by such counsel that representation of Ticketmaster and VJNIL
and/or VJN by the same counsel would be inappropriate under applicable
standards of professional conduct due to actual or potential differing
interests between them (in which case, if the indemnified party notifies
the indemnifying party in writing that the indemnified party elects to
engage separate counsel at the expense of the indemnifying party, the
indemnifying party shall have neither the right nor the obligation to
assume the defense of such action on behalf of the indemnified party).
(c) To the extent that an indemnified party recovers on a third
party claim, the amount of such recovery (after deduction of all costs and
expenses incurred in connection therewith) shall reduce, dollar-for-dollar,
the indemnification obligation otherwise owing by the indemnifying party.
9.4 THIRD PARTY BENEFICIARIES. Nothing contained in this Article IX
shall confer any rights upon, or inure to the benefit of, any third party
other than those parties specified in Sections 9.1 and 9.2 hereof, it being
understood that such parties, to the extent not actually parties hereto,
shall be third party beneficiaries.
ARTICLE X
MISCELLANEOUS
10.1 BENEFIT; NON-ASSIGNMENT. Each party represents that it is acting
on its own behalf and is not acting as an agent for or on behalf of any
third party. The terms of this Agreement and the Note shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No party may assign all or any part of its rights
or delegate all or any part of its obligations under this Agreement or the
Note without the express written consent of each other party hereto;
provided, however, that Ticketmaster may assign its rights and delegate its
duties hereunder to an Affiliate of Ticketmaster with the prior written
consent of VJNIL, which consent shall not be unreasonably withheld, delayed
or withdrawn.
-29-
<PAGE> 34
10.2 INDEPENDENT CONTRACTOR. Each party hereto acknowledges and
agrees that Ticketmaster is an independent contractor with respect to VJNIL
and VJN and neither Ticketmaster, nor any officer, employee, agent, servant
or independent contractor of Ticketmaster or any of its parents, partners,
subsidiaries or Affiliates, shall at any time be deemed to be an employee
or agent of either VJNIL or VJN, and this Agreement shall not constitute or
be deemed to constitute an agreement of partnership, for any purpose
whatsoever.
10.3 FURTHER INSTRUMENTS. Each of Ticketmaster, VJNIL and VJN shall
further execute and deliver all such other appropriate supplemental
agreements and other instruments and take such other action as may be
necessary to make this Agreement fully and legally effective, binding and
enforceable as between the parties hereto and as against third parties, or
as one or both of the other parties may reasonably request.
10.4 NOTICES. 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 the earliest to
occur of (a) receipt, if made by personal service, (b) two days after
delivery, if made by reputable overnight international courier service, (c)
upon the delivering party's receipt of a written confirmation of a
transmission made by cable, by telecopy, by telegram, or by telex, or
(d) three days after being mailed by registered or certified international
or air mail (postage prepaid, return receipt requested) 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 10.4):
If to Ticketmaster: TM No. 2 Limited
20 Black Friars Lane
London EC4V 6HD
Attention: Chief Operating Officer
with a copy to: Neal Gerber & Eisenberg
Two North LaSalle Street
Chicago, Illinois 60602
Attention: Charles Evans Gerber, Esq.
If to VJNIL: Video Jukebox Network International Limited
Imperial House, 11-13 Young Street
Kensington London W8
Attention: Managing Director
If to VJN: Video Jukebox Network, Inc.
1221 Collins Avenue
Miami Beach, Florida 33139
Attention: Chief Financial Officer
-30-
<PAGE> 35
with a copy to: Lucio, Mandler, Croland, Bronstein & Steele, P.A.
701 Brickell Avenue, Suite 2000
Miami, Florida 33131
Attention: Leslie J. Croland, Esq.
10.5 GOVERNING LAW. This Agreement shall be governed in accordance
with the internal laws of England and Wales (without regard to its conflict
of laws principles) and each party hereto hereby submits to the exclusive
jurisdiction of the courts of England and Wales. VJN hereby appoints
Communication Equity Associates International Ltd., whose registered office
is at 74 Brook Street, London W1Y1YD ("CEAIL") as its agent for service of
process in England and warrants that CEAIL accepts its appointment. VJN
shall not revoke such appointment without the prior written consent of
Ticketmaster, which consent shall not be unreasonably withheld, unless VJN
first appoints another such agent and notifies Ticketmaster in writing in
advance of the appointment and of the new agent's name and address;
provided that if for any reason an agent appointed under this Section shall
cease to act as such, VJN shall promptly appoint another such agent and
notify Ticketmaster of the appointment and the new agent's name and
address. If VJN does not make such an appointment within seven days of
such cessation, then Ticketmaster may do so on VJN's behalf and shall
notify the other parties hereto of such appointment.
10.6 WAIVER. No party shall by mere lapse of time, without giving
notice or taking other action hereunder, be deemed to have waived any
breach by the other party of any of the provisions of this Agreement. The
waiver by any party of a particular breach of this Agreement by any other
party shall not be construed as or constitute a continuing waiver of such
breach or of other breaches of the same or other provisions of this
Agreement.
10.7 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including the
Exhibits and Schedules hereto which are incorporated herein by reference,
contains all of the terms agreed upon by the parties with respect to the
subject matter hereof and supersedes all prior agreements and all oral or
written proposals, understandings, representations, conditions, and other
communications between the parties relating to the subject matter hereof.
Except as otherwise expressly set forth herein, this Agreement may be
amended only by a writing signed by all parties hereto, and no other act,
document, usage or custom shall be deemed to amend this Agreement.
10.8 COUNTERPARTS. This Agreement may be executed in counterparts all
of which taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Agreement by signing any such a
counterpart.
10.9 SEVERABILITY. If any provision of this Agreement shall be found
to be invalid, inoperative, unreasonable or unenforceable in law or equity
by a court of competent jurisdiction, such finding shall not affect the
validity of any other provision
-31-
<PAGE> 36
of this Agreement, which shall be construed to effect the purposes of this
Agreement to the fullest extent permitted by Law.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement under seal as of the day and year first above written.
TM NO. 2 LIMITED, a company incorporated under the laws
of a England and Wales
By: /s/ Marc Bension
---------------------------------
Name: Marc Bension
Title: Director
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED, a company
incorporated under the laws of England and Wales
By: /s/ Vincent Monsey
---------------------------------
Name: Vincent Monsey
Title: Managing Director
VIDEO JUKEBOX NETWORK, INC., a Florida corporation
By: /s/ Alan McGlade
---------------------------------
Name: Alan McGlade
Title: President and CEO
-32-
<PAGE> 37
EXHIBIT "A"
[COPY OF PROMISSORY NOTE FILED AS EXHIBIT 99.12 TO THIS FORM 8-K]
<PAGE> 38
SCHEDULE 5.1(c)
Capitalization of VJNIL
Number of
Stockholder Ordinary Shares
----------- ---------------
Video Jukebox Network, Inc. 602
Any and all preemptive rights of Monsey and VJN in the common stock of
VJNIL have been waived on or prior to the date hereof.
<PAGE> 39
SCHEDULE 5.1(e)
No Conflict
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
5. The Home Insurance Company of Illinois Insurance policy (No. PDO-F-
922212-4/000) will cease to cover VJNIL upon the closing of the
contemplated transaction.
6. The Employers Reinsurance Corporation Broadcasters Broad Form
Defamation and Associated Risks Policy (No. RLS-004814-R) will cease
to cover VJNIL upon the closing of the contemplated transaction.
<PAGE> 40
SCHEDULE 5.1(f)
Consents and Approvals
1. It will be necessary to notify this Agreement and all related and
ancillary documentation to the European Commission pursuant to Article
85 of the Treaty of Rome and EC Regulation Number 17/62 of February 6,
1962, as amended.
2. It will be necessary to file this Agreement and all related and
ancillary documentation at the Office of Fair Trading pursuant to the
Restrictive Trade Practices Act 1976.
3. By letter dated May 2, 1995, Rowe and Maw acting on behalf of
Ticketmaster, notified the Independent Television Commission of this
Agreement. Within 28 days of Closing, the VJNIL must notify the
Independent Television Commission of completion of this transaction
pursuant to the terms of its license (License Number LPSO44 dated
February 11, 1992) from the Independent Television Commission.
4. Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or
its assigns have preemptive rights regarding any original issuance of
VJN stock. On June 1, 1995, VJN notified TCI's present assignee,
Liberty VJN, Inc. ("Liberty") of the issuance of VJN stock (the
"Monsey Stock") to Vincent Monsey, contemplated by this transaction.
In doing so, VJN requested that Liberty waive any preemptive rights
which it may have with respect to the issuance of the Monsey Stock.
On June 27, 1995, Liberty waived any such preemptive rights.
<PAGE> 41
SCHEDULE 5.1(g)
Litigation
VJNIL was in dispute with Dolphin Head Group Holdings Plc ("Dolphin")
relating to the occupation by VJNIL of certain premises known as Unit or
Suite 5, Camberley House, Portesbery Road, Camberley, Surrey and Unit 6,
Camberley House, 85 High Street, Camberley, Surrey. A writ was served on
VJNIL dated September 14, 1994 claiming a total of L.15,135.51 plus
interest and costs. A Defense dated October 27, 1994 was served by VJNIL.
The matter was settled by mutual consent on May 11, 1995 - a payment of
L.6,850.00 was made by VJNIL to Dolphin's solicitors on behalf of Dolphin.
A consent order was issued by the court on May 12, 1995 ordering that no
order should be made in respect of Dolphin's claim against VJNIL, save that
VJNIL pay the costs of the action brought by Dolphin against VJNIL, such
costs to be taxed if not agreed. The costs are in the process of being
taxed and Clintons has estimated that the taxed costs are likely to be in
the region of L.10,000.00 - L.20,000.00.
<PAGE> 42
SCHEDULE 5.1(h)
Financial Information
None
<PAGE> 43
SCHEDULE 5.1(j)
Receivables
None
<PAGE> 44
SCHEDULE 5.1(k)
Acquired Assets
None
<PAGE> 45
SCHEDULE 5.1(l)
Conduct of Business in Ordinary Course
None
<PAGE> 46
SCHEDULE 5.1(m)
Compliance with laws
1. As mentioned in the minutes of a meeting of the Board of Directors of
VJNIL held on April 26, 1993, VJNIL was at that date in arrears in
respect of the payment of tax under the PAYE scheme, in the amount of
approximately L.40,000. These arrears, together with any interest and
penalties thereon, have since been paid.
2. VJNIL obtains all advertisements shown on "The Box" from advertising
agencies. VJNIL does not analyze advertisements shown on "The Box"
for compliance with any codes of advertising standards or similar
codes. Consequently, there can be no assurance that VJNIL is in
compliance with any applicable codes of advertising standards.
3. VJNIL is not registered under the Data Protection Act 1984.
Nevertheless, VJNIL submitted an application for registration under
such act to the Registrar on June 14, 1995.
4. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 12, 1994.
<PAGE> 47
SCHEDULE 5.1(n)
Material Contracts
1. Shareholders Agreement, dated March 4, 1992, among VJNIL, Vincent
Monsey and VJN.
2. Escrow Agreement, dated March 4, 1992, among Vincent Monsey, VJN,
Alsop Wilkinson and VJNIL.
3. Hire-Purchase Agreement for a Ford Escort 1.4 LX dated August 5, 1993.
4. Telephone equipment rental agreement, dated July 3, 1992, between
VJNIL and Telecom Rentals Limited.
5. International Management Agreement, dated December 31, 1993, among
VJN, VJNIL and Communications Equity Associates, Inc.
6. CEA Financing Representation Agreement, dated February 11, 1992,
between VJNIL and Communications Equity Associates International
Limited
7. Director's Service Agreement of Vincent Monsey, dated March 4, 1992.
8. BT Callstream Service Agreement, dated July 22, 1994, between VJNIL
and British Telecommunications Plc.
Video Performance Limited
9. Heads of Agreement, dated February 11, 1994, regarding License
Agreement between Video Performance Limited and VJNIL.
Details of VJNIL's current relationship and on-going negotiations with
Video Performance Limited have been disclosed to Ticketmaster,
pursuant to the following correspondence, copies of which have been
provided to Ticketmaster:
a) copy letter dated 9/29/94 from Clintons solicitors to VJNIL;
b) copy letter dated 9/30/94 from VJNIL to VPL;
c) copy letter dated 11/1/94 from Clintons to VPL;
d) copy letter dated 11/9/94 from VPL to Clintons;
e) copy letter dated 11/16/94 from VPL to Clintons;
f) copy letter dated 11/21/94 from Clintons to VPL;
g) copy letter dated 11/29/94 from VPL to Clintons;
<PAGE> 48
h) copy letter dated 11/29/94 from Clintons to VPL;
i) copy letter dated 12/6/94 from Clintons to VPL;
j) copy letter dated 12/6/94 from VPL to Clintons;
k) copy letter dated 12/8/94 from Clintons to VPL;
l) copy letter dated 12/21/94 from VPL to Clintons;
m) copy letter dated 1/3/95 from Clintons to VPL;
n) copy letter dated 1/26/95 from Clintons to VPL;
o) copy letter dated 2/9/95 from VPL to Clintons;
p) copy letter dated 2/13/95 from Clintons to VPL;
q) copy letter dated 2/13/95 from VPL to Clintons enclosing the
proposed draft License Agreement;
r) letter dated 5/24/95 from Lucio, Mandler, Croland, Bronstein &
Steele, P.A. to Neal, Gerber & Eisenberg, enclosing latest draft
of proposed license agreement.
ITC
10. License granted to VJNIL by the Independent Television Commission,
dated February 11, 1992.
Insurance
11. Home Insurance Company of Illinois Insurance policy (No. PDO-F-922212-
4/000) for VJN for the period from December 6, 1994 to December 6,
1995 with a premium of $137,500.00.
12. Employers Reinsurance Corporation Broadcasters Broad Form Defamation
and Associated Risks Policy (No. RLS-004814-R) for VJN for the period
from June 19, 1995 to June 19, 1996 with a premium of $9,570.
13. Cover note from Thompson Heath & Bond Ltd. for Commercial Combined
Insurance (No. 664/2662001E) for VJN for the period from August 7,
1994 to August 6, 1995 with a premium of $19,875.
14. The Insurance Company of the State of Pennsylvania Insurance policy
(No. 80-259277) for VJN from May 1, 1995 to May 1, 1996 with a premium
of $2,500.
15. Eagle Star Insurance Company Limited Wide Angle Media Combined Policy
(policy number unknown at this time) from June 10, 1995 to June 9,
1996 with a
<PAGE> 49
premium of L.571.95.
16. Eagle Star Insurance Company Limited Office Combined Policy
(002/820/J0000859/3) from June 2, 1995 to June 2, 1996 with a premium
of L.1,224.65.
Property
17. Underlease relating to Second Floor, Imperial House, 11/13 Young
Street, Kensington, London W8, dated February 3, 1994, between Office
Angels Limited and Video Jukebox Network International Limited and an
Order Authorizing Exclusion of provisions of Sections 24 to 28 of the
Landlord and Tenant Act 1954 dated February 7, 1994 in the Shoreditch
County Court.
18. License to Underlet property, dated February 1, 1994, relating to
Second Floor, 11/13 Young Street, London W8 among Archly Corporation
N.V., Office Angels Limited and VJNIL .
19. Lease, dated May 2, 1991, between Newdaze Limited and Office Angels
Limited.
20. Lease, dated January 31, 1972, between City Centre Properties Limited
and The Imperial Life Assurance Company of Canada.
21. Lease, dated February 8, 1995, between VJNIL and Archly Corporation
N.V.
Cable Operators
See attached sheet
EXCEPTIONS
1. The Shareholders Agreement among VJNIL, Vincent Monsey and VJN, dated
April 4, 1992 will be terminated immediately prior to the Closing.
2. The Escrow Agreement among Vincent Monsey, VJN, Alsop Wilkinson and
VJNIL, dated March 4, 1992, will be terminated immediately prior to
Closing.
3. The International Management Agreement, dated December 31, 1993, among
VJN, VJNIL and Communications Equity Associates, Inc., only so far as
it relates to VJNIL, was terminated on June 30, 1995.
4. The CEA Financing Representation Agreement, dated February 11, 1992,
between VJNIL and Communications Equity Associates International
Limited was terminated on June 30, 1995.
5. The Director's Service Agreement of Vincent Monsey, dated March 4,
1992, will be terminated at Closing and will be replaced by a new
employment agreement.
6. The Home Insurance Company of Illinois Insurance policy (No. PDO-F-
922212-
<PAGE> 50
4/000) will cease to cover VJNIL upon the closing of the contemplated
transaction.
7. The Employers Reinsurance Corporation Broadcasters Broad Form
Defamation and Associated Risks Policy (No. RLS-004814-R) will cease
to cover VJNIL upon the closing of the contemplated transaction.
8. VJNIL received a renewal notice for the Eagle Star Insurance Company
Limited Wide Angle Media Combined Policy, for the current period, on
June 29, 1995. Coverage will only remain in effect for the period
indicated, so long as VJNIL pays the premium within 14 days of the
renewal notice.
<PAGE> 51
SCHEDULE 5.1(p)
Real Property
PREVIOUS PREMISES
Comfrey House, Comfrey Close, Cove, Hampshire GU14 9XX
Camberley House, Portesbery Road, Camberley, Surrey GU15 3SZ
PRESENT PREMISES
The Leasehold Premises known as First and Second Floors, Imperial House,
11/13 Young Street, Kensington, London W8
<PAGE> 52
SCHEDULE 5.1(q)
Assets
None
<PAGE> 53
SCHEDULE 5.1(r)
Suppliers
None
<PAGE> 54
SCHEDULE 5.1(s)(i)
Taxes
1. As mentioned in the minutes of a meeting of the Board of Directors of
VJNIL held on April 26, 1993, VJNIL was at that date in arrears in
respect of the payment of tax under the PAYE scheme, in the amount of
approximately L.40,000. These arrears, together with any interest and
penalties thereon, have since been paid.
2. The statutory (audited) accounts for the accounting year ended
December 31, 1992 were filed late with the Registrar of Companies.
Such accounts were accepted for filing on July 19, 1994.
<PAGE> 55
SCHEDULE 5.1(s)(ii)
Taxes
None
<PAGE> 1
8-K
EXHIBIT 99.12
<PAGE> 2
TM NO. 2 LIMITED
PROMISSORY NOTE
DUE JUNE 30, 2000
L.625,400 Pounds Sterling June 30, 1995
FOR VALUE RECEIVED, TM NO. 2 LIMITED, a company incorporated under the
laws of England and Wales ("Maker"), promises to pay to VIDEO JUKEBOX
NETWORK INTERNATIONAL LIMITED, a company incorporated under the laws of
England and Wales ("Payee"), the principal sum of SIX HUNDRED TWENTY-FIVE
THOUSAND FOUR HUNDRED POUNDS STERLING (L.625,400) (U.K.). Such principal
amount shall not accrue interest.
This Note, which is the Note referred to in the Administrative
Services Agreement, is being delivered in connection with that certain
Administrative Services Agreement of even date herewith (the
"Administrative Services Agreement") by and among Maker, Payee and Video
Jukebox Network, Inc., a Florida corporation, pursuant to which Maker
provides certain administrative services to Payee on the terms and
conditions set forth therein. The outstanding principal amount shall be
due and payable in equal monthly increments of L.10,423 Pounds Sterling
commencing on July 31, 1995; provided, however, that this Note is subject
to the provisions of the Administrative Services Agreement including,
without limitation, its provisions regarding forgiveness and mandatory
prepayment, as if such provisions were set forth herein in their entirety.
At the time of receipt or forgiveness of any principal or interest on this
Note, Payee shall make or cause to be made an appropriate notation on the
schedule attached hereto and made a part hereof reflecting the amount so
paid or forgiven. The aggregate unpaid principal amount of this Note as
set forth on the schedule attached thereto shall be conclusive evidence,
absent manifest error, of the principal amount owing and unpaid on this
Note.
All or any portion of the principal amount of this Note may be prepaid
by or on behalf of Maker at any time without any penalty or premium. Any
amount of principal which is not paid when due, whether at stated maturity,
by acceleration or otherwise, shall bear interest from the date when due
until said principal and/or interest is paid in full, payable on demand, at
an interest rate equal to the lesser of (a) one-percent (1%) above the
sterling base lending rate as quoted by National Westminster Bank plc and
(b) the highest rate of interest allowable under applicable Law.
No delay or omission of Payee in exercising any right or power
hereunder shall impair any such right or power, or be deemed or construed
to be a waiver of any default hereunder or an acquiescence therein. No
waiver shall be valid unless signed in writing by Payee, and then only to
the extent specifically set forth in such writing.
<PAGE> 3
Upon any endorsement, assignment or other transfer of this Note by
Payee or by operation of law including, without limitation, the endorsement
of this Note to a third party, the term "Payee", as used herein, shall mean
such endorsee, assignee or other transferee or successor to Payee then
becoming the holder of this Note. This Note shall inure to the benefit of
Payee and its successors and assigns.
It is the intention of Maker and Payee to conform to applicable usury
laws, if any. Accordingly, notwithstanding anything to the contrary in
this Note or any other agreement entered into in connection herewith, it is
agreed that the aggregate of all interest (if any) and any other charges
constituting interest under applicable law and contracted for, chargeable,
or receivable under this Note or otherwise in connection with the
obligation evidenced hereby shall under no circumstances exceed the maximum
amount of interest permitted by applicable law, if any, and any excess
shall be deemed a mistake and cancelled automatically and, if theretofore
paid, shall, at the option of Maker, be refunded to Maker or credited on
the principal amount of this Note.
Maker and any endorsers and other persons liable for all or any part
of the principal balance evidenced by this Note severally waive presentment
for payment, protest or notice of non-payment.
THIS NOTE SHALL BE GOVERNED BY ENGLISH LAW IN ALL RESPECTS (AND
WITHOUT APPLICATION OF ANY OF ITS CONFLICT OF LAWS PROVISIONS) AND EACH OF
MAKER AND PAYEE HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF ENGLAND AND WALES.
In the event that any term or provision of this Note or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Note, or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby
and each term and provision of this Note shall be valid and be enforced to
the fullest extent permitted by law.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the day and year first above written.
MAKER:
TM NO. 2 LIMITED, a company incorporated
under the laws of England and Wales
By: /s/ Marc Bension
------------------------------------
Name: Marc Bension
Title: Director
-2-
<PAGE> 4
TM NO. 2 LIMITED
PROMISSORY NOTE
Amount of Interest Principal
Principal Paid Paid Balance
Date or Forgiven (if any) Outstanding
---- ----------- -------- -----------
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-3-
<PAGE> 1
8-K
EXHIBIT 99.13
<PAGE> 2
============================================================================
STOCKHOLDERS AGREEMENT
OF
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
============================================================================
JUNE 30, 1995
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS; ETC.
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Certain Other Defined Terms . . . . . . . . . . . . . . . . . 4
1.3 Article, etc. . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
ORGANIZATIONAL AND GOVERNANCE MATTERS
2.1 Memorandum and Articles of Association . . . . . . . . . . . 5
2.2 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Removal of Directors . . . . . . . . . . . . . . . . . . . . 6
2.4 Removal for Cause . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Termination of Nomination Rights . . . . . . . . . . . . . . 7
2.6 Calling of Meetings . . . . . . . . . . . . . . . . . . . . . 7
2.7 Notice of Meetings . . . . . . . . . . . . . . . . . . . . . 7
2.8 Committees . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.9 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 Approval of Certain Activities . . . . . . . . . . . . . . . 8
2.11 Additional Approval of Certain Activities . . . . . . . . . . 9
2.12 Limitations on Approvals . . . . . . . . . . . . . . . . . . 10
ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 Transfer Restrictions . . . . . . . . . . . . . . . . . . . . 10
3.2 Voluntary Dispositions by Stockholders . . . . . . . . . . . 11
3.3 Involuntary Dispositions of Stock . . . . . . . . . . . . . . 13
3.4 Deadlock Among Stockholders . . . . . . . . . . . . . . . . . 15
3.5 Agreement of Selling Stockholders . . . . . . . . . . . . . . 16
3.6 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Endorsement on Stock Certificates . . . . . . . . . . . . . . 18
4.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.3 Stock Subject to this Agreement . . . . . . . . . . . . . . . 19
4.4 Maintenance of Ownership Position . . . . . . . . . . . . . . 19
4.5 Distribution of Net Profits . . . . . . . . . . . . . . . . . 20
4.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.7 Confidential Information . . . . . . . . . . . . . . . . . . 20
4.8 Non-Competition . . . . . . . . . . . . . . . . . . . . . . . 21
4.9 Approval of Disclosures . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
4.10 Pronouns and Headings . . . . . . . . . . . . . . . . . . . . 23
4.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12 RTPA Registration . . . . . . . . . . . . . . . . . . . . . . 23
4.13 Modification; Amendment . . . . . . . . . . . . . . . . . . . 23
4.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 24
4.16 Binding Effect; Complete Agreement . . . . . . . . . . . . . 24
4.17 Specific Performance . . . . . . . . . . . . . . . . . . . . 24
4.18 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 24
4.19 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
-ii-
<PAGE> 5
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") dated as of June 30,
1995 among VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED (registration number
2643552), a company incorporated under the laws of England and Wales and
whose registered office is at Imperial House, 11-13 Young Street,
Kensington, London W8 5EH (the "Company"), VIDEO JUKEBOX NETWORK, INC., a
Florida corporation ("VJN"), and TM NO. 2 LIMITED (registration number
3005851), a company incorporated under the laws of England and Wales and
whose registered office is at 20 Black Friars Lane, London EC4V 6HD
("Ticketmaster").
W I T N E S S E T H:
WHEREAS, VJN and Ticketmaster are the owners, beneficially and of
record, of all of the issued and outstanding Ordinary Shares of the Company
(the "Stock"), being owned as follows:
<TABLE>
<CAPTION>
OWNER NUMBER
----- ------
<S> <C>
VJN 356 Ordinary Shares
Ticketmaster 356 Ordinary Shares
Total Shares 712 Ordinary Shares
</TABLE>
WHEREAS, in order to assure the harmonious management of the affairs
of the Company, each of VJN, Ticketmaster and the Company desires to enter
into this Agreement upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and agreements herein contained and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS; ETC.
1.1 Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below:
"Affiliate" shall mean any Person (other than the Company) who or
which, directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, any specified Person;
provided, however, that an Affiliate shall not include a Competitor.
"Control" (including the terms "controlling," "controlled by" and "under
common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise, including,
without limitation, the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or similar
body governing the affairs of such Person.
<PAGE> 6
"Bankruptcy" shall mean (a) an adjudication of bankruptcy under the
U.S. Bankruptcy Reform Act of 1978, as amended, or any successor statute,
(b) the specified Person stops payment of, is deemed unable (under Section
123 of the Insolvency Act of 1986 of the U.K. (the "Insolvency Act")) or
otherwise admits inability to pay its debts or becomes or is deemed to be
insolvent, (c) the making of a winding up or administration order in
respect of the specified Person, (d) an assignment for the benefit of
creditors, (e) the specified Person either does, resolves to do or
commences negotiations with a view to doing any of the following: (i) makes
a general or special arrangement or composition (whether voluntary or
compulsory) with its creditors or any class of creditors, (ii) declares or
agrees to a moratorium, (iii) issues a notice convening a meeting to
resolve to do any of the foregoing (other than for the purpose of a solvent
amalgamation or reconstruction), or (iv) makes a proposal for a voluntary
arrangement under Section 1 of the Insolvency Act to be made in respect of
the specified Person, (f) the filing of a voluntary petition in bankruptcy
or reorganization or the passing of a resolution for voluntary liquidation,
reconstruction or winding up (other than for the purpose of a solvent
amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, provisional liquidator or
administrative receiver for any part or all of the assets or property of a
party within 60 days from the date of such appointment.
"Board" shall mean the Board of Directors of the Company.
"Bona Fide Purchaser" shall mean any Person (other than a disposing
Stockholder's Affiliates) who or which has delivered a good faith written
offer to purchase for cash or cash equivalents such Stockholder's Stock;
provided, however, that, (a) such Person has the requisite financial
resources necessary, in the reasonable opinion of the Board, to purchase
and acquire such Stockholder's Stock and (b) the ownership by such Person
of any Stock will not, in the reasonable good faith determination of the
other Stockholders, jeopardize or render invalid the Company's ownership or
use of any license or sublicense.
In addition to the requirements specified in the preceding sentence,
if at any time that a Bona Fide Purchaser makes an offer to purchase
Seller's Stock there exists a Seller's Liability, then, except as otherwise
expressly set forth herein, the Bona Fide Purchaser's offer must include
the Bona Fide Purchaser's written agreement to obtain the complete release
of Seller and its Affiliates from the Seller's Liability and to itself
become personally liable for the Seller's Liability if any relevant
third-party lender so requires as a condition for its complete release of
Seller and its Affiliates. If any such lender will not agree to release
Seller and its Affiliates from the Sellers' Liability, then the Bona Fide
Purchaser and its Affiliates shall, by written agreement, indemnify and
hold Seller and its Affiliates harmless from the Seller's Liability from
and after the date of the closing of the purchase and sale of the Seller's
Stock.
"Business" shall mean the television, cable and similar programming
and broadcasting services (interactive or non-interactive), marketing,
advertising, sales, concert and related music promotions, merchandising and
home shopping projects and all other promotions and ventures in which the
Company is engaged in England, Wales, Scotland and Northern Ireland, and in
which the Company intends to be engaged in the Republic of Ireland (the
"Territory"), as of the date hereof, and any similar or related activities
in which the Company may become engaged in the Territory during the term of
this Agreement.
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<PAGE> 7
"Business Day" shall mean any day that is not a Saturday or a Sunday
and on which banks are open for the conduct of normal banking business in
all of the cities of Los Angeles, California, Miami, Florida and London,
England.
"Competitor" shall mean an entity operating or controlling either
video music services for use on television broadcast or cable channels
featuring such services existing as of the date hereof or subsequently
formed services with programming that is substantially similar in format
and/or content to the Company's programming; provided, however, that Time
Warner and its Affiliates shall not be considered Competitors for purposes
of this definition.
"Director" shall mean a Person appointed or elected as a member of the
Board.
"Dispose" or "Disposition" (and any derivatives thereof) shall mean
(a) a voluntary or involuntary sale, assignment, transfer, conveyance or
other disposition of the beneficial or legal interest in a Stockholder's
Stock, and (b) any agreement, contract or commitment to do any of the
foregoing.
"Encumbrance" or "Encumber" shall mean or refer to any lien, claim,
charge, pledge, mortgage, encumbrance, security interest, preferential
arrangement, option, restriction on voting or alienation of any kind,
adverse interest, or the interest of a third party under any conditional
sale agreement, capital lease or other title retention agreement.
"Equity Interest" shall mean any and all shares in the capital of the
Company carrying the right to vote at and attend meetings of the members
and any interests, derivatives, participations in or other equivalents
(however designated) of such shares of the Company and any and all
warrants, options or other rights to purchase or convertible into any of
the foregoing.
"Material Adverse Effect" shall mean any circumstance, change in, or
effect on the business of any party (including, without limitation, in the
case of the Company, the Business) that: (a) is, or could reasonably be
expected to be, materially adverse to the business, operations, assets or
liabilities, results of operations or the financial condition of such
party, or (b) could reasonably be expected to adversely affect the ability
of such party to operate or conduct its business in the manner in which it
is currently or currently anticipated to be operated or conducted.
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<PAGE> 8
"Person" shall mean any individual, partnership, firm, corporation,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.
"Seller's Liability" means any liability of a Stockholder, which is
selling its Stock pursuant to this Agreement, for the repayment of any
loans made to the Company by a third party lender (whether pursuant to a
guaranty, loan, security or indemnification arrangement or otherwise).
"Stockholder" or "Stockholders" shall mean parties hereto (other than
the Company), their permitted successors and assigns and any Person who is
a holder of Stock and is or is required to be a party hereto at the time of
reference thereto.
"Transfer Notice" shall mean the notice required to be delivered by
the Seller to the Company and the Non-Selling Stockholders pursuant to
Section 3.2. To be effective, the Transfer Notice must (a) have attached
to it a copy of the written offer of the Bona Fide Purchaser who has
offered to purchase the Seller's Stock, and (b) describe all other material
terms of such Bona Fide Purchaser's offer which are not included in the
attached written offer.
1.2 Certain Other Defined Terms The following terms are defined in
the Section of this Agreement set forth directly opposite such terms:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Administrative Services Agreement 2.9(e)
Cause 2.5
Confidential Information 4.7
Deadlock 3.4(a)
Deed of Adherence 3.1(b)
Deadlock Notice 3.4(a)
Election Notice 3.4(a)
Forced Sale Shares 3.3(b)
Neutral Appraiser 3.5(a)
Voting Director Nominees 2.2(a)
Non-Selling Stockholder 3.2(b)
Notifying Party 3.4(a)
Neutral Appraiser 3.5(a)
Original Appraisers 3.5(a)
Receiving Party 3.4(a)
Receiving Parties Election Notice 3.4(b)
Relevant Period 4.8(a)
Representatives 4.7
Secondary Notice 3.2(b)
Seller 3.2(a)
Ticketmaster Nominees 2.2(a)
Valuation Date 3.4(a)
Valuation Price 3.4(a)
</TABLE>
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<PAGE> 9
VJN Nominees 2.2(a)
1.3 Article, etc. References to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
ORGANIZATIONAL AND GOVERNANCE MATTERS
2.1 Memorandum and Articles of Association. From and after the date
hereof, each Stockholder shall vote all of its shares of Stock owned by
such Stockholder at any meeting of the stockholders of the Company or by
means of any written consent executed in lieu of such a meeting of
stockholders and shall take all actions necessary to ensure that the
Memorandum of Association and Articles of Association of the Company do
not, at any time, conflict with the provisions of this Agreement and shall
take all necessary and required action to cause the Company to amend, or
amend and restate, the Memorandum of Association and the Articles of
Association of the Company as necessary to effectuate the purposes of this
Agreement.
2.2 Directors.
(a) Nominees. The Board shall consist of four voting members
(the "Voting Directors") and, for so long as Vincent Paul Monsey is
employed by the Company as its Managing Director, one non-voting member
(the "Non-Voting Director"). Each of the Stockholders shall and shall
ensure that each of its respective Affiliates shall vote all of its shares
of Stock at any annual or extraordinary meeting of the stockholders of the
Company at which Directors are to be elected or vacancies on the Board are
to be filled, or by means of any written consent executed in lieu of such a
meeting of stockholders, and shall take all actions necessary and shall use
all reasonable endeavors to cause the Voting Directors nominated by them
pursuant to this Agreement to take all actions necessary (including the
nomination for election as directors of the Persons specified below) to
ensure the election to the Board of five individuals as follows:
(i) two individuals nominated by Ticketmaster as Voting
Directors (the "Ticketmaster Nominees");
(ii) two individuals nominated by VJN as Voting Directors
(the "VJN Nominees"); and
(iii) so long as he shall be employed by the Company as
its Managing Director, Vincent Paul Monsey as the Non-Voting Director.
The Ticketmaster Nominees and the VJN Nominees are sometimes referred
to herein collectively as the "Voting Director Nominees" and individually
as a "Voting Director Nominee." The Non-Voting Director shall be entitled
to notice of and to attend all meetings of the Board of Directors but shall
not be entitled to vote on any matter.
(b) Replacement of Voting Director Nominees. If, prior to his
election to the Board pursuant to this Section 2.2, any Voting Director
Nominee shall be unable or unwilling
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<PAGE> 10
to serve as a Voting Director, the Stockholder who nominated such Voting
Director Nominee shall be entitled to nominate a replacement within 30 days
of learning of such fact, which replacement shall then be a Voting Director
Nominee for purposes of this Section 2.2. If, following election to the
Board pursuant to this Section 2.2, any Voting Director Nominee shall
resign or be removed pursuant to Section 2.3 or 2.4 or be unable to serve
for any reason prior to the expiration of his term as a Voting Director or
if for any other reason a vacancy exists on the Board, the Stockholder who
nominated such Voting Director Nominee (or would have been entitled to
nominate a Voting Director Nominee to fill such vacant Board position)
shall, within 30 days of such event, notify the Board in writing of a new
Voting Director Nominee for such Board position. Promptly thereafter, each
Stockholder shall, and hereby agrees to, take all actions reasonably
necessary to ensure the election to the Board of such new Voting Director
Nominee to fill the unexpired term of the Voting Director Nominee whom such
new Voting Director Nominee is replacing or to fill the vacant Board
position until the next scheduled election of Directors. If a Stockholder
shall fail to so notify the Board within the 30-day period provided in this
Section 2.2(b), the Voting Directors, in their discretion, may nominate any
other person to fill the vacancy or the slate of directors nominated for
election. To the extent feasible and consistent with the best interests of
the Company and the fiduciary obligations of the Directors, the parties
hereto will endeavor to ensure that no meetings of the Board will be
scheduled during the period that a vacancy exists on the Board except for
the purposes enumerated in this Section 2.2(b) and except for consideration
of matters which cannot reasonably be delayed.
2.3 Removal of Directors. Each Stockholder hereby agrees to use all
reasonable endeavors to call, to take all other actions necessary to call
and to cause the Voting Directors nominated by them to take all actions
necessary to call or to cause the appropriate officers and Directors of the
Company to call, a special or annual meeting of stockholders of the Company
(or a special meeting of the Board, if appropriate in the circumstances),
as the case may be, and to vote all of the shares of Stock then owned by
such Stockholder or registered in such Stockholder's name for, or to take
all actions by written consent in lieu of any such meeting necessary to
cause, the removal (with or without cause) of the Non-Voting Director or,
if the Stockholder designating a Voting Director requests his or her
removal for any reason, a Voting Director.
2.4 Removal for Cause. Each Stockholder hereby agrees that (a)
subject to Section 2.3, no Voting Director elected pursuant to Sections
2.2(a) or 2.2(b) shall be removed without Cause and (b) any Voting Director
and the Non-Voting Director may be removed for Cause if 100% of the Voting
Directors (exclusive of the Director who is the subject of the removal
action) consent in writing to such removal. All actions by the Board for
removal of a Director pursuant to the foregoing subsection (b) shall be
considered on an individual, one-Director-at-a-time, basis. For the
purposes of this Section 2.4, "Cause" shall mean (i) breach of, or willful
and continued failure to substantially perform, his duties as a Director of
the Company, (ii) willful conduct which, in the good faith determination of
100% of the Voting Directors (exclusive of the Director who is the subject
of the removal action), is significantly injurious or detrimental to the
Company, monetarily or otherwise, (iii) conviction for or a plea of guilty
or nolo contendere to, any material criminal offense involving dishonesty
or moral depravity, (iv) habitual abuse of illegal drugs or other
controlled substances or habitual intoxication, or (v) willful breach of
this Agreement.
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<PAGE> 11
2.5 Termination of Nomination Rights. The provisions of Sections
2.2, 2.3 and 2.4 shall be null and void from and after the time that the
aggregate Equity Interests of Ticketmaster and its Affiliates do not equal
(regardless of whether such aggregate Equity Interest is higher or lower
than) the aggregate Equity Interests of VJN and its Affiliates.
2.6 Calling of Meetings. In order to effectuate the provisions of
this Article II, each Stockholder hereby agrees, subject to compliance with
applicable law, that when any action or vote is required to be taken by
such Stockholder pursuant to this Agreement, such Stockholder shall use all
of its reasonable endeavors to (a) call, to take all other actions
necessary to call and to cause the Voting Directors nominated by them to
take all actions necessary to call or to cause the appropriate officers and
Directors of the Company to call, a special or annual meeting of
shareholders of the Company, as the case may be, or execute or cause to be
executed a written consent in lieu of any such meetings to effectuate such
stockholder action and (b) vote all shares of Stock held by such
Stockholder in a manner consistent with the terms and provisions of this
Agreement.
2.7 Notice of Meetings. With respect to any action to be taken other
than pursuant to written consent in lieu of a meeting (in accordance with
the provisions of applicable law and the Company's Articles of
Association), written notice of the time, place and matters to be discussed
at all meetings of the Board and all meetings of committees of the Board
shall be given to all Directors or committee members (whether in the U.K.
or abroad), as the case may be, at least 96 hours in advance of such
meetings, either personally or by sending a copy thereof by overnight
courier or air mail (postage prepaid), by reputable overnight courier
(charges prepaid), or by telecopier (with confirmation of receipt
acknowledged by the addressee) to the address appearing on the books of the
Company or otherwise supplied to the Company by a Director or committee
member in writing. Notices pursuant to this Section 2.6 shall be deemed
given upon personal delivery, two Business Days following deposit with a
reputable overnight courier, four Business Days following deposit with the
postal service in the case of express mail and upon confirmation of receipt
in the case of a telecopy.
2.8 Committees. Each Stockholder shall vote all of its shares of
Stock, and shall use all reasonable endeavors to take and to cause its
Voting Director Nominee(s) to take all such other action necessary, to
ensure that (i) any committee of the Board includes at least one Voting
Director by each of Ticketmaster and VJN and (ii) in addition to any other
notice and voting requirements for such committees, notice for all meetings
of such committees shall be given in accordance with Section 2.7.
2.9 Quorum. Unless otherwise fixed by or pursuant to the Articles of
Association of the Company, the quorum for the transaction of business at
any meeting of the Board shall consist of all Voting Directors of the
Company.
2.10 Approval of Certain Activities. The Stockholders will not vote
their shares of Stock in favor of the Company taking, and the Company will
not take, any of the following actions unless the Board (or any committee
to which the authority to take any such actions has been delegated) has
unanimously agreed to take all actions necessary to approve, authorize,
adopt or ratify the same:
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<PAGE> 12
(a) enter into any business, partnership or other venture, or
affect any change in the operations of the Company, which is not
substantially related to the Business;
(b) approve any consolidation, merger or amalgamation with, or
the acquisition of any interest in, any other Person or its assets, other
than acquisitions of goods and services in the ordinary course of business;
(c) enter into any agreement, or amend any existing agreement,
relating to the management of, or the provision of management or
administrative services to, the Company;
(d) in the event Ticketmaster's engagement under that certain
Administrative Services Agreement dated as of the date hereof between the
Company and the Stockholders (the "Administrative Services Agreement") is
terminated and VJN does not assume the obligation to perform the Services
thereunder, appoint any Person to perform the Services (as defined in the
Administrative Services Agreement), or other similar duties, in lieu of
Ticketmaster;
(e) approve the annual operating budget with respect to any
fiscal year of the Company, which budget identifies, individually and in
the aggregate, the expenditures and indebtedness that the appropriate
officers and/or managers of the Company are authorized to make or incur;
provided, however, that in the event the Voting Directors cannot agree on
an annual operating budget for any fiscal year, the most recently approved
annual operating budget of the Company shall continue in effect until such
time as a new budget is approved and adopted by the Voting Directors;
(f) enter into any lease, purchase or sale agreement relating to
any property, real or personal, that requires payments to or from the
Company in excess of L.50,000 during any one fiscal year, which agreement
is not included in or specifically contemplated by the annual budget
approved and/or in effect for such fiscal year pursuant to subsection (e)
above;
(g) select, determine terms of employment for, and decide to
renew and/or terminate the contracts of, each of the Managing Director, the
Finance Director and the Director of Programming of the Company;
(h) except in the ordinary course of business, (i) assume, incur
or guarantee any obligation or obligations for borrowed money individually
or in the aggregate in excess of L.150,000; (ii) cancel or compromise any
debts owed to, or claims held by, the Company in an amount individually or
in the aggregate in excess of L.50,000; or (iii) waive or release any
rights of the Company with a value individually or in the aggregate in
excess of L.50,000;
(i) enter into any transaction between the Company and any
Stockholder, and/or any Affiliate of any Stockholder, if the value of such
transaction equals or exceeds L.150,000 (other than transactions included
in or specifically contemplated by any annual operating budget approved by
the Voting Directors and/or in effect pursuant to subsection (e) above).
(j) admit a judgment against the Company;
(k) make any substantive modification of this Agreement; or
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<PAGE> 13
(l) agree or otherwise commit to do any of the foregoing.
Without limiting the foregoing and for purposes of clarification only,
termination of Ticketmaster's engagement under the Administrative Services
Agreement shall be effected, if at all, in accordance with the provisions
of Section 2.8 thereof.
2.11 Additional Approval of Certain Activities. The Stockholders will
not vote their shares in favor of the Company taking any of the following
actions unless the Board (or any committee to which the authority to take
any such actions has been delegated) has unanimously agreed to take all
actions necessary to approve, authorize, adopt or ratify the same:
(a) alter or amend the Articles or Memorandum of Association of
the Company;
(b) issue (whether by way of dividend, distribution or
otherwise), sell or grant to any Person, commit or otherwise undertake to
issue, sell or grant to any Person (i) any Equity Interest, (ii) any
securities convertible into or exchangeable for or carrying any rights to
acquire any Equity Interest, or (iii) any options, warrants or any other
rights to acquire any Equity Interest;
(c) initiate any proceedings or take any other action with
respect to Bankruptcy of the Company; or
(d) agree or otherwise commit to do any of the foregoing.
2.12 Limitations on Approvals. For purposes of Sections 2.9 and 2.10,
no Person shall be deemed to be a Stockholder unless such Person is a
Stockholder as of the date hereof, or is an Affiliate of any such
Stockholder (and is a permitted transferee of Stock). The provisions of
each of Sections 2.10 and 2.11 shall be null and void from and after the
time that the aggregate Equity Interests of Ticketmaster and its Affiliates
do not equal (regardless of whether such aggregate Equity Interest is
higher or lower than) the aggregate Equity Interests of VJN and its
Affiliates.
ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 Transfer Restrictions.
(a) General Transfer Restriction. Each Stockholder covenants
and agrees that such Stockholder will not, and will not permit its
Affiliates to, Dispose or cause the Disposition of such Stockholder's Stock
or any interest therein except in accordance with the terms and conditions
of this Article III. Any attempted Disposition not in accordance with the
terms and conditions of this Agreement shall be null and void and of no
force or effect.
(b) Transfers to Affiliates. Notwithstanding the restrictions
on Disposition set forth in this Article III, any Stockholder (which term
for the purposes of this Section 3.1(b) shall not include any Affiliate of
a Stockholder which acquired Stock pursuant to this Section 3.1(b)),
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<PAGE> 14
may Dispose of all or a portion of its Stock to an Affiliate; provided,
however, that in the case of any such Disposition (i) such Stock shall
remain subject to all of the terms and conditions of this Agreement in the
hands of such Affiliate and (ii) such Affiliate shall first deliver to the
Company and the Stockholders a deed of adherence, in the form attached as
Exhibit A (a "Deed of Adherence"), assuming and agreeing to (A) be bound by
all the terms and conditions of this Agreement, (B) be a Stockholder
hereunder and (C) retransfer all of its rights, title and interest in the
Stock, free and clear of all Encumbrances, to such transferring Stockholder
prior to the time at which it ceases to be an Affiliate of such
transferring Stockholder.
(c) Indirect Transfers. Except as otherwise provided by the
provisions of this Article III, no Stockholder may indirectly Dispose of
any of its Stock (by way of transfer of the equity or other ownership
interests of such Stockholder or otherwise) to a Person other than an
Affiliate of such Stockholder without obtaining the prior written consent
of the other Stockholders (which consent may be given or withheld, in the
sole and absolute discretion of such Stockholders); provided, however, that
the merger, consolidation or other change of control of the ultimate parent
of any Stockholder shall be deemed not to constitute an indirect
Disposition of such Stockholder's Stock that is prohibited by this Section
3.1(c).
(d) Transfers to Persons other than Affiliates. Except as
otherwise provided by the provisions of this Article III, no Stockholder
may Dispose of any of its Stock without the prior written consent of each
of the other Stockholders (which consent may be given or withheld, in the
sole and absolute discretion of such other Stockholders).
(e) Pledge. No Stockholder may Encumber its Stock for any
purpose other than to secure indebtedness of the Company to a third party
commercial bank or financial institution and unless the pledgee of such
Stock agrees in writing to be bound by the terms and conditions of this
Agreement.
(f) Rules of Construction and General Application. The
following rules of construction shall be applicable to all transactions
consummated pursuant to Article III:
(i) Unless otherwise specifically set forth herein, a
reference to a Stockholder shall include any and all of such
Stockholder's Affiliates.
(ii) Each transferee of Stock pursuant to this Article III
(other than pursuant to Section 3.4), as a condition to its admission
as a Stockholder, shall execute and acknowledge a Deed of Adherence
and such other instruments, in form and substance reasonably
satisfactory to the other Stockholders, to confirm the agreement of
the transferee of such Stock to be bound by all the terms and
provisions of this Agreement with respect to the Stock acquired. All
reasonable expenses, including attorneys' fees, incurred by the
Company in this connection shall be borne by such transferee.
(iii) During the term of any proceedings, transactions
or Dispositions pursuant to any provision of Article III, no
Stockholder may exercise any rights under any provision of Article III
(other than rights granted to such Stockholder pursuant to the
provision under which such proceedings are taking place or in
progress).
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<PAGE> 15
3.2 Voluntary Dispositions by Stockholders.
(a) Offer from Bona Fide Purchaser. If a Stockholder (for
purposes of this Section 3.2, "Seller") desires to effect the Disposition
of its shares of Stock to a Bona Fide Purchaser, such Stockholder shall
deliver to the Company and all of the other Stockholders a Transfer Notice
at least 60 days prior to the proposed Disposition of Seller's Stock.
Under no circumstances may any Stockholder sell or offer to sell less than
all of its shares of Stock to any such Bona Fide Purchaser.
(b) Right of First Refusal. By delivery of the Transfer Notice,
Seller shall be deemed to have offered to each non-selling Stockholders
(the "Non-Selling Stockholders"), the right and option to purchase on the
terms and conditions set forth in the Bona Fide Purchaser's written offer
all (but not less than all) of that portion of the Seller's Stock that
equals a fraction, the numerator of which is equal to the number of shares
of Stock owned by such Non-Selling Stockholder at the time the Transfer
Notice is deemed given hereunder and the denominator of which is equal to
the total number of shares then owned by all of the Non-Selling
Stockholders. In order to exercise such option, the Non-Selling
Stockholders who wish to participate shall deliver written notice to such
effect to Seller and the Company within 25 days of receipt of the Transfer
Notice. In the event that less than all of the Non-Selling Stockholders
exercise their rights pursuant to the first sentence of this Section
3.2(b), the Company shall, within 30 days of the date that the Transfer
Notice is deemed given hereunder, provide the Non-Selling Stockholders who
elected to exercise such rights with a notice (the "Secondary Notice")
setting forth the number of shares of Seller's Stock that remain
unpurchased following the initial 25 day exercise period. The recipients
of the Secondary Notice shall have 7 days from the date that the Secondary
Notice is deemed given to provide notice to Seller and the Company of the
additional amount of Seller's unpurchased shares of Stock that each such
Non-Selling Stockholder will purchase, which amounts shall be in such
proportions as such Non-Selling Stockholders shall agree among themselves
or, failing such agreement, in proportion to their respective Equity
Interests in the Company, after giving effect to the shares that each such
Non-Selling Stockholder elected to purchase pursuant to the Transfer Notice
delivered pursuant to Section 3.2(a) above. If the Non-Selling
Stockholders who wish to participate exercise their respective options to
purchase all of the Seller's Stock, the consummation of the purchase and
sale of Seller's Stock shall occur in accordance with Section 3.2(c)
hereof. A Non-Selling Stockholder's failure to deliver the notice required
pursuant to the preceding sentence shall constitute such Non-Selling
Stockholder's failure to exercise its rights under this Section 3.2(b).
(c) Consummation of Purchase.
(i) The purchase price payable by each Non-Selling
Stockholder to Seller shall be (A) payable in an amount of cash equal
to (1) the amount of cash set forth in the Bona Fide Purchaser's
offer, or (2) the cash equivalent of any non-cash consideration
contained in the Bona Fide Purchaser's offer, and (B) paid in the
manner set forth in the Bona Fide Purchaser's offer (except that no
payment need be made until at least 30 days subsequent to the
completion of the procedure described in Section 3.2(b), if
applicable); provided, however, that if the Stockholders do not agree
on the cash equivalent of any non-cash consideration, the time period
specified in this Section 3.2(c) for payment of the purchase price
shall be extended for such time as may be necessary (but no later than
30 days) for the Non-Selling Stockholders to obtain a
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valuation for such non-cash consideration in accordance with the
procedure set forth further in this Section 3.2(c). Seller's Stock
shall be transferred as provided in such written offer. In the event
the Selling Stockholder and the Non-Selling Stockholders are unable to
agree upon the cash equivalent of any non-cash consideration offered
by a Bona Fide Purchaser, each of the Selling Stockholder and the
Non-Selling Stockholders shall appoint one appraiser, which appraisers
shall jointly determine the cash equivalent of such non-cash
consideration. The final determination of the appraisers (if they are
able to agree) shall be binding upon the Selling and the Non-Selling
Stockholders. In the event that the appraisers are unable to agree,
the appraisers shall appoint one independent appraiser who, within 45
days after appointment, shall independently determine the cash
equivalent of any non-cash consideration and whose final determination
shall be binding upon the Selling and Non-Selling Stockholders.
(ii) At the closing of the purchase and sale of Seller's
Stock to any Non-Selling Stockholder (A) each Non-Selling Stockholder
shall pay to Seller the purchase price, as determined in Section
3.2(c)(i), and (B) Seller shall deliver to each such Non-Selling
Stockholder a stock certificate or certificates evidencing the
Seller's Stock, together with an appropriate stock transfer form(s),
duly executed in a proper form to effect the transfer of such Stock
from Seller to each such Non-Selling Stockholders on the books and
records of the Company. As soon as possible after such closing, the
Seller shall pay all stamp duties payable on account of, and deliver
to the Non-Selling Stockholders the transfer stamps, necessary to
effect the transfer of such Stock from the Seller to the Non-Selling
Stockholders.
(d) Other Disposition Provisions.
(i) If the Non-Selling Stockholders do not agree to
purchase all of Seller's Stock by the expiration of the periods set
forth in Section 3.2(b), Seller shall have 60 days thereafter in which
to effect the Disposition of its remaining Stock to the Bona Fide
Purchaser on terms not more favorable to Seller than were set forth in
the Bona-Fide Purchaser's written offer.
(ii) During the term of the rights granted to the Non-
Selling Stockholders pursuant to Section 3.2, Seller shall not
negotiate or offer to sell its Stock on terms and conditions more
favorable to Seller than those previously offered to the Non-Selling
Stockholders.
(iii) If Seller shall fail to consummate a Disposition
of its Stock within the time period set forth in Section 3.2(d)(i),
then no Disposition of such Stock may be made by Seller without first
re-offering such Stock to the Non-Selling Stockholders in accordance
with the provisions of this Section 3.2.
3.3 Involuntary Dispositions of Stock.
(a) Causes for Forced Sale. Notwithstanding anything contained
in this Agreement to the contrary, the occurrence of any one of the
following events shall constitute an offer by the affected Stockholder to
sell (in accordance with the provisions of Section 3.3(b)) all
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of its shares of Stock for a price equal to the value thereof determined in
accordance with Section 3.5(a):
(i) Other than an Encumbrance permitted by Section 3.1(e),
any levy on, distress, execution or attachment of any shares of Stock
of such Stockholder by any creditor or by any person claiming an
Encumbrance thereon, if such Stockholder does not diligently pursue
the appropriate legal remedies to have such levy or attachment
discharged, and such levy or attachment is not discharged within 60
days from the date of such levy or attachment;
(ii) Any proposal to file for or the initiation of a
proceeding in Bankruptcy of such Stockholder;
(iii) Any material license held by the Company
(including, License No. LP044 granted to the Company by the
Independent Television Commission on February 11, 1992) is lost solely
and directly as a result of such Stockholder's (which, for purposes of
this clause (iii), shall be the "affected Stockholder") holding or
ownership of Stock;
(iv) The filing by such Stockholder of a petition to
dissolve or liquidate the assets and business of the Company; or
(v) Any attempt by such Stockholder (which, for purposes of
this clause (v), shall be the "affected Stockholder") to Dispose of
its Stock other than in compliance with Sections 3.1 and/or 3.2, as
appropriate.
(b) Effect of the Occurrence of Cause. Immediately upon the
happening of any of the foregoing events and without any action on the part
of the affected Stockholder, an offer shall be deemed to have been made by
the affected Stockholder to sell all of its shares of Stock to the other
Stockholders, pro rata in accordance with their respective Equity
Interests, in the manner provided in Section 3.2, with the purchase price
thereafter payable by wire transfer of immediately available funds. Within
10 Business Days of the Stockholders being notified of the occurrence of
any of the events set forth in Section 3.3(a), the Stock held by the
affected Stockholder shall be valued in accordance with the procedure set
forth in Section 3.5(a).
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3.4 Deadlock Among Stockholders.
(a) Notice of Deadlock; Valuation. Commencing 20 days after any
Stockholder (together with its Affiliates, the "Notifying Party") delivers
to the other Stockholders (each, together with its Affiliates, a "Receiving
Party") written notice (the "Deadlock Notice") that after making a good
faith effort the Stockholders have failed to agree on any of the matters
set forth in Sections 2.10 or 2.11 or with respect to any other matter
contained herein that requires unanimous consent of the Stockholders (a
"Deadlock"), the Stockholders shall cause a valuation of all of the Stock
to be performed in accordance with the provisions of Section 3.5(a) (as so
determined, on a per share basis, the "Valuation Price"). The Deadlock
Notice shall be withdrawn in the event that, prior to the date on which
notice of the Valuation Price is delivered by the Original Appraisers or,
if applicable, the Neutral Appraiser (each as defined in Section 3.5(a)) to
the Stockholders (the "Valuation Date"), the Receiving Parties reach
agreement with the Notifying Party with respect to the Deadlock specified
in the Deadlock Notice. For purposes of this Section 3.4, (i) any Deadlock
Notice must be mailed, sent by courier or be personally delivered to the
Receiving Parties, and (ii) a Notifying Party shall not be deemed to have
delivered a Deadlock Notice until such Deadlock Notice has been actually
received by all Receiving Parties. In the event multiple Deadlock Notices
are delivered on the same day, the first Deadlock Notice delivered (as
evidenced by a certificate or signature of the Receiving Parties
acknowledging time of receipt, courier records, or otherwise) shall
constitute the Deadlock Notice for purposes of this Section 3.4 and the
deemed notice provisions set forth in Section 4.6 shall not apply.
(b) Option of Receiving Parties. The Receiving Parties shall
have 10 days, commencing on the Valuation Date, to decide whether to either
(i) purchase all (but not less than all) of the Notifying Party's Stock, or
(ii) sell all (but not less than all) of the Receiving Parties' Stock to
the Notifying Party, each transaction to be effected at the Valuation
Price. The Receiving Parties shall notify the Notifying Party and the
Company within such 10-day period, in a writing jointly signed by all of
the Receiving Parties (the "Receiving Parties Election Notice"), of their
election under the foregoing sentence. If the Receiving Parties elect to
purchase the Notifying Party's Stock, the Notifying Party shall be required
to sell and the Receiving Parties shall be required to purchase all of the
Notifying Party's Stock at a closing to be held on the date that is (A) 120
days after delivery of the Receiving Parties Election Notice, if the
aggregate Valuation Price for the Notifying Party's Stock is less than $25
million (U.S.), or (B) 180 days after delivery of the Receiving Parties
Election Notice, if the aggregate Valuation Price for the Notifying Party's
Stock equals or exceeds $25 million (U.S.) (or, if such day is not a
Business Day, on the next succeeding Business Day). Each Receiving Party
shall purchase such number of shares of the Notifying Party's Stock as the
Receiving Parties shall agree among themselves or, failing such agreement,
that portion of the Notifying Party's Stock that equals a fraction, the
numerator of which is equal to the number of shares of Stock owned by such
Receiving Stockholder and the denominator of which is equal to the total
number of shares then owned by all of the Receiving Parties.
(c) Option of Notifying Party. If (i) the Receiving Parties
fail to deliver a Receiving Parties Election Notice (or deliver a Receiving
Parties Election Notice that is not signed by all of the Receiving Parties)
within the 10-day period set forth in 3.4(b) and the Notifying Party
delivers a written notice to the Receiving Parties so stating, or (ii) the
Receiving Parties Election Notice states that the Receiving Parties have
exercised their option under Section
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<PAGE> 19
3.4(b)(ii) to sell all of the Receiving Parties' Stock to the Notifying
Party, the Notifying Party shall purchase all of the Receiving Parties'
Stock at a price equal to the Valuation Price. The Receiving Parties shall
be required to sell and the Notifying Party shall be required to purchase
the Receiving Parties' Stock at a closing to be held on the date that is
(A) 120 days after delivery of the Receiving Parties Election Notice or the
last day of the 10-day period set forth in Section 3.4(b), as appropriate,
if the aggregate Valuation Price for the Receiving Parties' Stock is less
than $25 million (U.S.), or (B) 180 days after delivery of the Receiving
Parties Election Notice or the last day of the 10-day period set forth in
Section 3.4(b), as appropriate, if the aggregate Valuation Price for the
Receiving Parties' Stock equals or exceeds $25 million (U.S.) (or, if such
day is not a Business Day, on the next succeeding Business Day). If there
are more than one Notifying Parties, each Notifying Party shall purchase
such number of shares of the Receiving Parties' Stock as the Notifying
Parties shall agree among themselves or, failing such agreement, that
portion of the Receiving Parties' Stock that equals a fraction, the
numerator of which is equal to the number of shares of Stock owned by such
Notifying Stockholder and the denominator of which is equal to the total
number of shares then owned by all of the Notifying Parties.
3.5 Agreement of Selling Stockholders. All sales of Stock to be made
pursuant to Sections 3.2, 3.3 and 3.4 of this Agreement shall be subject to
the following terms:
(a) Valuation of Stock. Whenever an appraised value of any or
all of the Stock is required in connection with a Disposition, the
procedures set forth in this Section 3.5(a) shall govern such appraisal.
Each of the Receiving Parties, on the one hand, and the Notifying Party, on
the other hand (or, in the event of Dispositions other than pursuant to
Section 3.4, the Disposing Stockholder(s) and the non-Disposing
Stockholder(s), respectively), shall appoint one appraiser (the "Original
Appraisers") to determine the value of the Stock (the "Original
Appraisals") which is the subject of the Disposition (the "Disposition
Shares"). If either the Receiving Parties or the Notifying Party shall
fail to appoint an Original Appraiser, and to notify the other of such
appointment, within the time period set forth herein for such appointment,
the party who failed to appoint an Original Appraiser shall be deemed to
have waived its right with respect thereto and the non-waiving party shall
be entitled to have the President of the Institute of Chartered
Accountants, in London, England, select the second appraiser, who shall be
an Original Appraiser hereunder. In appraising the shares of Stock to be
sold, each of the Original Appraisers shall appraise the Company as a
whole, on a going concern basis (the "Company Value"), and then shall value
the shares to be sold by multiplying the Company Value by a fraction, the
numerator of which shall be the number of shares to be sold and the
denominator of which shall be the total number of shares outstanding. In
so valuing the shares of Stock to be sold, the Original Appraisers shall
not consider any minority discount, but shall take into account the impact
on the Company (i) if either the Receiving Parties or the Notifying Party
were to no longer be a Stockholder(s) of the Company and (ii) any other
event that precipitated or results from the Deadlock. The Original
Appraisers shall have 45 days in which to conduct an appraisal and shall
notify the Company and the Stockholders in writing of the results of the
Original Appraisals. If the difference between the Original Appraisals is
less than or equal to 10% of the higher of the two Original Appraisals,
then the average of the Original Appraisals, on a per share basis, shall be
the Valuation Price. In the event that a discrepancy of greater than 10%
exists between the Original Appraisals, the Original Appraisers jointly
shall appoint, within seven days after delivery of the results of the
Original Appraisals, one independent appraiser (the "Neutral Appraiser")
who shall select, from between the Original Appraisals, the one Original
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Appraisal which, in his or her opinion, is the closest to the true value.
If the Original Appraisers fail to appoint a Neutral Appraiser within such
7-day period, the Stockholders (or the Original Appraisers on the
Stockholders' behalf) shall ask the President of the Institute of Chartered
Accountants, in London, England, to select the Neutral Appraiser. The
Neutral Appraiser shall have 10 days in which to make his or her
determination and shall notify the Company and the Stockholders in writing
of the selected Original Appraisal. The Original Appraisal so selected by
the Neutral Appraiser, on a per share basis, shall be the Valuation Price.
The Neutral Appraiser shall act as an expert and not as an arbitrator. The
costs and expenses of each Original Appraiser shall be borne by
Stockholder(s) that selected such Original Appraiser and the costs and
expenses of the Neutral Appraiser shall be borne by the Stockholders in
accordance with their respective pro rata ownership of Stock. The
Valuation Price determined in accordance with this Section 3.5(a) shall be
binding upon and unappealable by the Stockholders and the Company.
(b) Delivery of Certificates. The Stockholder that is Disposing
of its shares shall deliver to the purchaser the certificates evidencing
the Stock being sold, free and clear of Encumbrances (other than those set
forth in Section 3.1(d)), together with duly executed stock transfer forms
in favor of the purchaser or its nominees and such other documents,
including evidence of ownership and authority, as the purchaser may
reasonably request.
(c) Representations and Warranties. The Disposing Stockholder
shall not be required to make any representations or warranties to any
Person in connection with such sale, except as to (i) good title to the
Stock being sold, (ii) the absence of Encumbrances with respect to the
Stock being sold, (iii) its legal capacity, valid existence and good
standing (if applicable), (iv) the authority for, and validity and binding
effect of (as against such Disposing Stockholder), any agreement entered
into by such Disposing Stockholder in connection with such sale, (v) all
required material consents to the Disposing Stockholder's sale and material
governmental approvals having been obtained (excluding any securities laws)
and (vi) the fact that no broker's commission is payable by or on behalf of
the Disposing Stockholder as a result of the Disposing Stockholder's
conduct in connection with the sale.
(d) Stamp Duty. The expense of any stamp duty relating to the
Disposition shall be borne by the Disposing Stockholder and may be deducted
from the purchase price payable to the Disposing Stockholder for such
Disposed Stock.
(e) Indemnification. The Disposing Stockholder shall not be
required to provide any indemnities in connection with such sale except for
breach of the representations and warranties contained in subsection (c) of
this Section 3.5.
3.6 Equitable Remedies. Each of the Stockholders acknowledges and
agrees that money damages alone would not be an adequate remedy for any
breach of the provisions of this Article III. The Stockholders agree that,
in the event of a breach or threatened breach by any Stockholder of any
provision of this Article III, any non-breaching Stockholder (a) may seek
specific performance of the provisions of Article III, and the breaching
Stockholder(s) shall be estopped from asserting adequacy of a remedy at law
as a defense to an action for specific performance hereunder, and/or
(b) shall be entitled to an injunction restraining the breaching
Stockholder from taking any action that, or omitting to take any action the
omission of which, could constitute a breach of any provision of this
Article III, each without being required to post a bond.
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<PAGE> 21
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Endorsement on Stock Certificates. Each and every certificate
evidencing Stock shall contain upon its face, or on the reverse side
thereof, the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE (i) ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN THE COMPANY'S
ARTICLES OF ASSOCIATION, AS AMENDED FROM TIME TO TIME, AND (ii)
MAY BE SUBJECT TO OTHER RESTRICTIONS CONTAINED IN AGREEMENTS TO
WHICH THE COMPANY IS A PARTY, AND NO SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN VIOLATION OF SUCH RESTRICTIONS. COPIES OF THE
ABOVE REFERENCED DOCUMENTS ARE AVAILABLE TO THE HOLDER HEREOF
WITHOUT CHARGE AT THE PRINCIPAL OFFICES OF THE COMPANY.
No shares of Stock shall be issued without the legend set forth above.
Upon termination of this Agreement and/or deletion of the restrictions on
transfer from the Articles of Association, the Company shall issue new
certificates representing the Stock that do not contain the foregoing
legend upon surrender to the Company of the certificates containing the
foregoing legend in exchange therefor.
4.2 Termination. This Agreement shall become effective upon the
execution hereof and shall terminate upon the earliest to occur of the
following events:
(a) Bankruptcy of the Company;
(b) 100% of the Stock being beneficially owned by a single
Stockholder; or
(c) the voluntary agreement, in writing, of all of the
Stockholders.
4.3 Stock Subject to this Agreement.
(a) This Agreement shall apply to all Stock currently or
hereinafter owned or acquired by the Stockholders including, without
limitation, (i) the 356 shares of Stock owned by each of the Stockholders
on the date hereof, (ii) any Stock issued to any Stockholder pursuant to
Section 4.3(b) hereof, (iii) any Stock issued to any Stockholder pursuant
to such Stockholder's exercise of an option or warrant and (iv) any Stock
otherwise purchased, acquired or issued to any Stockholder.
(b) If, at any time, and from time to time, the Company shall
declare and pay a dividend upon any of the Stock, or shall validly issue
shares in lieu of, or in exchange for, or in addition to, any of the Stock
without the receipt of additional consideration therefor, then any such
shares subsequently issued with respect to the Stock then subject to this
Agreement shall constitute additional Stock subject to this Agreement.
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4.4 Maintenance of Ownership Position.
(a) Preemptive Rights. No Stockholder shall vote to reclassify
the capital stock of the Company, to increase the number of issued and/or
authorized shares of the Company's capital stock, or to issue or sell any
capital stock or debt convertible into capital stock of the Company, or
other Equity Interests, except upon the condition that each Stockholder
shall have the right to purchase such capital stock or debt, in preference
to and on the same terms and conditions offered to a third party, in order
for each Stockholder to maintain its then-present proportionate ownership
of the Company's capital stock, unless the Stockholders unanimously consent
in writing to a disproportionate ownership interest of the Company's
capital stock.
(b) Right to Purchase Additional Stock. In the event that any
Stockholder fails to exercise its rights under Section 4.4(a) to purchase
additional capital stock or debt of the Company, such Stockholder's
unpurchased portion of stock or debt shall then be made available for
purchase by each of the Stockholders which has purchased its proportionate
ownership interest of such stock or debt, in proportion to each such
Stockholder's then Equity Interest in the Company (after giving effect to
the shares or debt purchased pursuant to Section 4.4(a)).
4.5 Distribution of Net Profits. After the costs and expenses of the
Company are paid, accrued, or otherwise reserved against, the Company's net
profits may be distributed to the Stockholders in proportion to each
Stockholder's Equity Interest. Distribution of such profits shall be made
to the Stockholders promptly upon the unanimous vote or written consent of
the Stockholders.
4.6 Notices. Any and all notices or other communications provided
for herein shall be in writing and shall be considered duly given upon the
earliest to occur of (a) personal delivery, (b) three days after being sent
by a reputable international overnight courier service, (c) seven days
after being mailed by registered or certified international or air mail,
return receipt requested or recorded (as the case may be), postage prepaid
or (d) the delivering party's receipt of a written confirmation of a
facsimile transmission. All notices shall be addressed to the Company at
its principal office and to the Stockholders at their addresses listed on
the signature pages of this Agreement. Any party hereto may change his or
its address by giving notice to the other parties hereto as provided
herein.
4.7 Confidential Information.
(a) Obligation to Maintain Confidentiality. Each of the
Stockholders recognizes and acknowledges that the Company's confidential
and proprietary financial data, computer software and hardware,
intellectual property rights, business know-how, customer contacts,
supplier contacts, present and future plans, budgets, and all other
proprietary information (collectively, the "Confidential Information") are
valuable, special and unique assets of the Company. At no time shall any
Stockholder, or any of its directors, officers, employees, attorneys,
accountants and other agents and representatives (collectively,
"Representatives" of such Stockholders), disclose any Confidential
Information or any part thereof, to any Person for any reason or purpose
whatsoever except in accordance with the terms of this Section 4.7. Each
of the Stockholders agrees that money damages alone would not be an
adequate remedy for breach of this Section 4.7 and, accordingly, in the
event of a breach or threatened breach by a Stockholder or its
Representative of the provisions of this Section 4.7, the Company (or
either
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<PAGE> 23
Stockholder acting on behalf of the Company), shall be entitled, without
being required to post a bond, to an injunction restraining such
Stockholder or its Representative from disclosing, in whole or in part, the
Confidential Information, or from rendering any services to any Person to
whom the Confidential Information, in whole or in part, has been disclosed
or is threatened to be disclosed. Nothing herein shall be construed as
prohibiting the Company, or either of the Stockholders acting on behalf of
the Company, from pursuing any other remedies available to the Company for
such breach or threatened breach, including recovery of damages from the
breaching Stockholder. In any action or proceeding to enforce the
provisions of Section 4.7, the prevailing party shall pay, and shall be
reimbursed by the non-prevailing party for, all costs incurred in such
action or proceeding including, without limitation, all court costs and
filing fees, and all reasonable attorneys' fees, incurred whether at the
trial level, at the appellate level or otherwise. In the event either
Stockholder, acting on behalf of the Company, brings suit to enforce the
provisions of Section 4.7, such Stockholder shall pay, out of its own
funds, the costs and expenses of such suit and shall be reimbursed therefor
out of the first collections of any award therefrom in favor of the
Company. Each Stockholder shall be liable for any breach of this Section
4.7 by its Representatives. This Section 4.7 shall survive the termination
of this Agreement.
Notwithstanding the foregoing, (a) any Stockholder may disclose any
Confidential Information to those of its Representatives who need to know
or request such information for the purpose of performing their duties or
services for the Stockholder, it being understood that the Representatives
to whom disclosure of any Confidential Information is made will be informed
of the confidential nature of the subject matter of such disclosure;
provided that Confidential Information shall not be disclosed to any
Representative who is a Competitor, (b) disclosure of any Confidential
Information may be made by any Stockholder or its Representatives to the
extent that either (i) in the opinion of such Stockholder's outside legal
counsel, such disclosure is required pursuant to the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, or the
rules and regulations under either such Act, or any other applicable law,
rule or regulation, or (ii) such disclosure is legally compelled by
judicial or administrative order, deposition, interrogatory, request for
documents, subpoena, investigative demand or other process or otherwise is
necessary in connection with any claim or litigation arising under or with
respect to this Agreement. In the event that any Stockholder or its
Representative becomes subject to a demand for discovery or other request
for disclosure of Confidential Information pursuant to applicable law or
regulation or legal process, such Stockholder, on its own or on its
Representative's behalf, shall give prompt notice to the Company of such
demand or request and shall cooperate, as reasonably requested, in seeking
a protective order or other appropriate remedy and/or, to the extent
permitted by law, with respect to the form of such required disclosure.
(b) Exclusions from Confidential Information. The
Confidentiality provisions of this Section 4.7 do not apply to and the term
"Confidential Information" does not include, any information which (i) at
the time of disclosure or thereafter is generally available to the public
(other than as a result of a disclosure directly or indirectly by the
Stockholder or its Representatives in violation of this Section), or (ii)
was or becomes available to the Stockholder or its Representatives on a
nonconfidential basis from a source other than the Company; provided that
such source is not known by the Stockholder or any of its Representatives
(after reasonable inquiry) to be bound by a confidentiality agreement with
the Stockholder or its Representatives.
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<PAGE> 24
4.8 Non-Competition. Each of the Stockholders covenants with each
other and the Company (and, with respect to subsection (b), VJN solely
covenants) that neither it nor any of its Affiliates shall, either on its
own account or jointly with, on behalf of or for any Person, whether as
principal, agent, partner, shareholder, director, consultant, employee or
otherwise and whether directly or indirectly:
(a) at any time during the Relevant Period (as defined herein),
other than on behalf of the Company, work for, carry on, assist or have an
interest in, directly or indirectly, any business within the Territory that
(i) is directly or substantially in competition with any music video
television programming and/or music related broadcast services or products
which constitute a component of the Business, or any future extension or
expansion thereof (for purposes of this Section 4.8, the "Core Business");
provided, however, that the business that is or may, from time to time, be
conducted by Ticketmaster U.K. Limited, other than any music video
television programming and/or music related broadcast services, shall be
deemed to not violate this Section 4.8(a), or (ii) utilizes any trade name,
mark or style, symbol or design that is used by (or is confusingly similar
to one used by) the Company in connection with any aspects of the Core
Business;
(b) at any time during the Relevant Period (as defined herein),
work for, carry on, assist or have an interest in, directly or indirectly,
any business within the Territory that (i) is directly or substantially in
competition with the core business of Ticketmaster and its Affiliates as of
the date hereof, including, without limitation, (A) establishing and/or
operating a computerized event ticketing and/or mass distribution system
for live events, together with businesses incident thereto, (B) establishing
and/or operating comprehensive ticket inventory control management systems,
including, without limitation, general admission ticketing and concession
control systems, and (C) providing merchandising, publishing, direct
marketing, advertising and/or promotional services in connection with the
subject matter of the immediately preceding clauses (A) and (B), or (ii)
utilizes any trade name, mark or style, symbol or design that is used by
(or is confusingly similar to one used by) Ticketmaster or any of its
Affiliates in connection with its business;
(c) solicit any business that would be in direct or substantial
competition with the Core Business from any Person who, at any time during
the Relevant Period, was a customer or client of the Company (or who at any
time during such period was in the course of negotiating therewith) in
connection with the Core Business;
(d) unreasonably interfere with any agreement relating to the
Business to which the Company is party; or
(e) use or permit the Company's name to be used so as to suggest
an inappropriate connection between the Stockholder's business and the
Company;
provided that nothing in this Section shall preclude a Stockholder or its
Affiliates from holding or acquiring, directly or indirectly, not more than
1% in the aggregate, of the issued shares or other securities of any class
of any other company which is listed or dealt in on any recognized stock
exchange or other organized trading market and which conducts business
predominantly within the Territory. For purposes of this Section 4.8, the
Relevant Period shall mean the period commencing on the date hereof and
ending 12 months after the earlier of the date upon which
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<PAGE> 25
(i) a Stockholder, together with its Affiliates, ceases to own any Equity
Interest in the Company, or (ii) this Agreement terminates or expires. The
provisions of this Section 4.8 shall survive the termination of this
Agreement.
4.9 Approval of Disclosures. In the event that any Stockholder
hereto shall, at any time, sell or offer to sell any securities issued by
it through the medium of any prospectus or otherwise, each shall do so only
in compliance with this Agreement and all applicable securities laws. To
the extent contained in any such prospectus or other written communication,
each other Stockholder shall have the right to approve any description of
(a) it and/or any of its Affiliates, (b) this Agreement, the Administrative
Services Agreement or any other Transaction Documents (as defined in the
Administrative Services Agreement), and (c) such Stockholder's relationship
with the Company, the other Stockholders or their respective Affiliates,
such right of approval to be exercised in writing within 5 days from the
date on which such Stockholder shall have received copies of the proposed
disclosure.
4.10 Pronouns and Headings. As used herein, all pronouns shall
include the masculine, feminine, neuter, singular and plural wherever the
context and facts require such construction. The descriptive headings in
the sections of this Agreement are inserted for convenience of reference
only and shall not control or affect the meaning or construction of any of
the provisions hereof.
4.11 Severability. If any provision of this Agreement is held by a
court or regulatory body of competent jurisdiction to be invalid, illegal
or unenforceable, such provision shall be severed and the remaining
provisions hereof shall be enforced to the extent possible or modified in
such a way as to make it enforceable, and the invalidity, illegality or
unenforceability thereof shall not affect the validity, legality or
enforceability of the remaining provisions of this Agreement.
4.12 RTPA Registration. No provision of this Agreement or of any
agreement or arrangement of which this Agreement forms part and which is
subject to registration under the Restrictive Trade Practices Act 1976
shall take effect until the date after particulars of this Agreement or of
the agreement or arrangement of which it forms part (as the case may be)
have been furnished to the Directors General of Fair Trading pursuant to
the provisions of Section 24 of that Act.
4.13 Modification; Amendment. No modification or amendment of this
Agreement shall be valid unless the same shall be in writing executed by
the Company and all of the Stockholders.
4.14 Expenses. Except as otherwise specifically set forth herein, all
costs and expenses incurred in connection with this Agreement and
consummation of the transactions contemplated hereby shall be borne by the
party incurring such costs and expenses.
4.15 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of England and Wales, without regard to the
conflict of laws provisions thereof, and each party hereto hereby submits
to the exclusive jurisdiction of the courts of England and Wales. VJN
hereby appoints Communications Equity Associates International Ltd., whose
registered offices are at 74 Brook Street, London W1Y1YD ("CEAIL") as its
agent for
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<PAGE> 26
service of process in England and warrants that CEAIL accepts its
appointment. VJN shall not revoke such appointment without the prior
written consent of Ticketmaster, which consent shall not be unreasonably
withheld, unless VJN first appoints another such agent and notifies
Ticketmaster in writing in advance of the appointment and of the new
agent's name and address; provided that if for any reason an agent
appointed under this Section shall cease to act as such, VJN shall promptly
appoint another such agent and notify Ticketmaster of the appointment and
the new agent's name and address. If VJN does not make such an appointment
within seven days of such cessation, then Ticketmaster may do so on VJN's
behalf and shall notify the other parties hereto of such appointment.
4.16 Binding Effect; Complete Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and permitted
assigns. This Agreement and the Schedules attached hereto, together with
the Administrative Services Agreement and the other Transaction Documents
(as defined in the Administrative Services Agreement), constitute the
entire agreement among the parties hereto and supersede all prior
agreements and understandings, oral or written, among the parties hereto
with respect to the subject matter hereof.
4.17 Specific Performance. The parties acknowledge that given the
nature of the obligations of the parties hereto that any non-breaching
party will be irreparably damaged by a breach of this Agreement. The
parties hereto therefore acknowledge and agree that any non-breaching party
hereto may seek specific performance of the provisions hereof and that no
party hereto may assert adequacy of a remedy at law as a defense to an
action for specific performance hereunder.
4.18 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
4.19 Attorneys' Fees. If any legal action, including an action for
declaratory relief, is brought to enforce any provision of this Agreement,
the prevailing party or parties, as the case may be, shall be entitled to
recover his, its or their respective reasonable attorneys' fees from non-
prevailing party or parties, as the case may be. These fees, which may be
set by the court in the same action or in a separate action brought for
that purpose, are in addition to any other relief to which any prevailing
party may be entitled.
-22-
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE COMPANY:
-----------
VIDEO JUKEBOX NETWORK
INTERNATIONAL LIMITED
Imperial House
11-13 Young Street
Kensington
London W8 5EH
Attention: Managing Director
By: /s/ Vincent Monsey
-----------------------------------
Name: Vincent Monsey
Title: Managing Director
THE STOCKHOLDERS:
----------------
VIDEO JUKEBOX NETWORK, INC.
1221 Collins Avenue
Miami Beach, Florida 33139
Attention: Chief Financial Officer
By: /s/ Alan McGlade
-----------------------------------
Name: Alan McGlade
Title: President and CEO
TM NO. 2 LIMITED
20 Black Friars Lane
London EC4V 6HD
Attention: Chief Operating Officer
By: /s/ Marc Bension
-----------------------------------
Name: Marc Bension
Title: Director
-23-
<PAGE> 28
EXHIBIT "A"
DATED 1995
--------------------------------------
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
(2) VIDEO JUKEBOX NETWORK, INC.
(3) TM NO. 2 LIMITED
(4)
--------------------------------------------
DEED OF ADHERENCE
relating to
VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED
--------------------------------------------
Rowe & Maw
20 Black Friars Lane
London EC4V 6HD
Ref: 313/5649Z
<PAGE> 29
This DEED OF ADHERENCE is made on 199
BETWEEN:
(1) VIDEO JUKEBOX NETWORK INTERNATIONAL LIMITED whose registered office is
at Imperial House, 11-13 Young Street, Kensington, London, United
Kingdom ("the Company");
(2) VIDEO JUKEBOX NETWORK, INC. a Florida Corporation whose principal
office is at 12000 Biscayne Boulevard, Miami, Florida 33181 USA (a
"Covenantee");
(3) TM No. 2 LIMITED whose registered office is at 20 Black Friars Lane,
London EC4V 6HD (a "Covenantee" and together with VIDEO JUKEBOX
NETWORK, INC. the "Covenantees"); and
(4) [ ] whose registered office is at
[ ] ("the Covenantor[s]").
BACKGROUND:
(A) The Covenantees and the Company entered into a Stockholders' Agreement
on [ ] 1995 ("the Stockholders' Agreement") in which
the parties to the Stockholders' Agreement agreed to certain matters
relating to the investment in and operation of the Company.
(B) By virtue of the transfer referred to in the Schedule to this Deed
("the Transfer") the Covenantor[s] became the holders subject, inter
alia, to the execution of this Deed, of [ ] ordinary shares in the
capital of the Company ("the Shares").
(C) The parties hereto agree that the Covenantor[s] shall be bound by the
terms and conditions of the Stockholders' Agreement.
OPERATIVE PART:
-2-
<PAGE> 30
1. Undertaking
1.1 In consideration of the sum of L.1 now paid by the Company (on behalf
of itself and each of the Covenantees) to the Covenantor[s], receipt
of which is hereby acknowledged, [each of] the Covenantor[s] hereby
covenant[s] with and undertake[s] to each of the Covenantees[,] [and]
the Company [and each other], with effect from their being registered
as a member of the Company, to be bound by and to adhere to the terms
and conditions of the Stockholders' Agreement as if the Covenantor[s]
had been an original party to the Stockholders' Agreement insofar as
the same are applicable to "Stockholders" as defined in such
agreement.
1.2 Each of the Covenantees and the Company agrees that the Covenantor[s]
shall for the purpose of the Stockholders' Agreement be included in
the definition of "Stockholders" contained therein with effect from
their being registered as members of the Company.
2. Continued Liability of Transferor
Notwithstanding anything contained herein on the transfer of the
Shares pursuant to the Transfer and the entry by the Covenantor[s]
into this Deed, nothing in this Deed shall in any way release,
discharge or diminish the liability of the transferor from the due and
prompt performance of its obligations under the Stockholders'
Agreement.
3. Retransfer by Affiliate
The Covenantor[s] shall, prior to ceasing to be an Affiliate (as
defined in the Stockholders' Agreement) of the transferor of the
Shares pursuant to the Transfer, retransfer all of [its][their]
rights, title and interest in the Shares, free from all Encumbrances
(as defined in the Stockholders' Agreement) to such transferor.
-3-
<PAGE> 31
4. Jurisdiction
This Deed of Adherence shall be construed in accordance with English
law and the parties irrevocably submit to the non-exclusive
jurisdiction of the English courts to settle any disputes which may
arise in connection with this Deed of Adherence.
5. Notices
The [respective] address[es] for service of notices on the
Covenantor[s] under the Stockholders' Agreement shall be their
respective address[es] set out above (or such other address[es] as
they shall notify to the Company in writing).
THE PARTIES have shown their acceptance of the terms and conditions of this
Deed of Adherence by executing it as a Deed below.
SCHEDULE
--------
Transferor Transferee Shares Price
- ---------- ---------- ------ -----
-4-
<PAGE> 32
THE COMMON SEAL of VIDEO )
JUKEBOX NETWORK )
INTERNATIONAL LIMITED was )
affixed to this Deed in )
the presence of: )
SIGNED and DELIVERED by )
(authorised signatory) and )
(authorised signatory) )
on behalf of VIDEO JUKEBOX )
NETWORK INC. and thereby )
executed by it as its Deed )
THE COMMON SEAL of )
TM No. 2 LIMITED was )
affixed to this Deed in )
the presence of: )
[THE COMMON SEAL of )
[ ] )
was affixed to this Deed )
in the presence of: )
SIGNED AS A DEED and )
DELIVERED by [ ] )
in the presence of: )
Witness: ...................
Address: ...................
...................
...................
Occupation ...................]
-5-
<PAGE> 1
8-K
EXHIBIT 99.14
<PAGE> 2
June 30, 1995
TM Video International, Inc.
c/o Ticketmaster-Southern California, Inc.
3701 Wilshire Boulevard
7th Floor
Los Angeles, California 90010
Re: Loan to Video Jukebox Network International Limited
To the Board of Directors:
Reference is hereby made to those certain documents set forth below,
each of which is dated as of June 30, 1995 (collectively, the "Transaction
Documents"):
1. Secured Loan Agreement between TM/Video International, Inc.
("Ticketmaster") and Video Jukebox Network International Limited ("VJNIL"),
together with the Secured Promissory Note of VJNIL issued in connection
therewith;
2. Debenture between Ticketmaster and VJNIL (the "Debenture");
3. Intercreditor Agreement among Ticketmaster, Video Jukebox
Network, Inc. ("VJN"), VJNIL and the Agent thereunder; and
4. License Agreement between VJN, as licensor, and VJNIL, as
licensee, together with the side letter agreement containing VJN's
representations and warranties with respect to the License Agreement.
Without regard to the representations and warranties of VJN and/or
VJNIL relating to intellectual property set forth in any of the Transaction
Documents, in the event that during the thirty (30) month period following
the Funding Date (as defined in the Secured Loan Agreement described
above), VJNIL is prohibited or otherwise restricted from operating its
business as it is conducted on the Funding Date as a result of any Claim or
demand by a third party that the intellectual property licensed to VJNIL by
VJN pursuant to the License Agreement (described above) conflicts with,
misappropriates, infringes or otherwise violates any intellectual property
rights of such third party ("Intellectual Property Matters"), then VJN
shall (i) make Ticketmaster whole with respect to, and to the extent of,
the total amount of principal, accrued but unpaid interest and fees and
expenses then outstanding or owing to Ticketmaster under the Secured Loan
Agreement and related documentation and (ii) indemnify and hold
Ticketmaster harmless from any liability that Ticketmaster may incur as a
result of its status as a debt holder with respect to VJNIL, which arises
out of or is related to Intellectual Property Matters. Upon receipt in
full of the amounts described in the foregoing clauses (i) and (ii),
Ticketmaster shall cancel and return to VJNIL the Secured Promissory Note
of VJNIL (as described above) and Ticketmaster shall execute and
<PAGE> 3
TM/Video International, Inc.
June 30, 1995
Page 2
deliver all such documents, and take such actions, as are necessary in
order to release the Debenture.
In the event that any Intellectual Property Matter giving rise to
VJN's obligations hereunder arises solely out of or results solely from an
act of Ticketmaster or any of its Affiliates (as defined in the Secured
Loan Agreement), VJN shall be released from its obligations hereunder with
respect to such Intellectual Property Matter.
This letter agreement has been entered into and executed by
Ticketmaster and VJN subsequent to the execution of all of the Transaction
Documents and is not superseded or preempted by any provision of the
Transaction Documents. This letter agreement shall be a contract made
under and governed by the internal laws of the State of Delaware, without
regard to conflict of laws principles.
If the foregoing accurately sets forth our understanding, please so
signify by signing the acknowledgement below.
VIDEO JUKEBOX NETWORK, INC.
By: /s/ Alan McGlade
-----------------------------------
Name: Alan McGlade
Title: President and CEO
Accepted and Acknowledged: TM/VIDEO INTERNATIONAL, INC.
By: /s/ Norman J. Gantz
-----------------------------------
Name: Norman J. Gantz
Title: Secretary
<PAGE> 1
8-K
EXHIBIT 99.15
<PAGE> 2
June 30, 1995
TM No. 2 Limited
c/o Ticketmaster-Southern California, Inc.
3701 Wilshire Boulevard
7th Floor
Los Angeles, California 90010
Re: Investment in Video Jukebox Network International Limited
To the Board of Directors:
Reference is hereby made to those certain documents set forth below,
each of which is dated as of June 30, 1995 (collectively, the "Transaction
Documents"):
1. Stock Purchase Agreement among TM No. 2 Limited ("Ticketmaster"),
Video Jukebox Network, Inc. ("VJN") and Video Jukebox Network International
Limited ("VJNIL"), together with the side letter agreement relating to the
intellectual property representations and warranties contained therein;
2. Administrative Services Agreement among Ticketmaster, VJNIL and
VJN, together with (a) the Promissory Note of Ticketmaster issued in
connection therewith, and (b) the side letter agreement relating to the
intellectual property representations and warranties contained therein; and
3. License Agreement between VJN, as licensor, and VJNIL, as
licensee, together with the side letter agreement containing VJN's
representations and warranties with respect to the License Agreement.
Without regard to the representations and warranties of VJN and/or
VJNIL relating to intellectual property set forth in any of the Transaction
Documents, in the event that during the thirty (30) month period following
the Closing (as defined in the Stock Purchase Agreement described above),
VJNIL is prohibited or otherwise restricted from operating its business as
it is conducted on the Closing Date (as defined in the Stock Purchase
Agreement) as a result of any claim or demand by a third party that the
intellectual property licensed to VJNIL by VJN pursuant to the License
Agreement (described above) conflicts with, misappropriates, infringes or
otherwise violates any intellectual property rights of such third party
("Intellectual Property Matters"), then VJN shall (i) make Ticketmaster
whole with respect to, and to the extent of, amounts that Ticketmaster has
theretofore paid or value that Ticketmaster has theretofore given to VJN
and/or VJNIL as consideration for equity in VJNIL (whether pursuant to the
Stock Purchase Agreement or the Administrative Services Agreement) (the
"Make Whole Amount") and (ii) indemnify and hold Ticketmaster harmless from
any liability that Ticketmaster may incur as a result of its status as an
equity holder or administrative services provider with respect to VJNIL,
which arises out of or is related to Intellectual Property Matters. In
addition, VJN shall cause VJNIL to cancel and return to Ticketmaster the
Promissory Note of Ticketmaster (as described above). Upon receipt in full
of the amounts described in the foregoing clauses (i) and (ii),
Ticketmaster shall
<PAGE> 3
TM No. 2 Limited
June 30, 1995
Page 2
transfer to VJN all of the 356 shares of capital stock of VJNIL acquired by
Ticketmaster pursuant to the Transaction Documents; provided, however, that
in the event Ticketmaster is unable to transfer to VJN all of the 356
shares of capital stock of VJNIL, the Make Whole Amount required to be paid
to Ticketmaster by VJN shall be proportionately reduced.
This letter agreement has been entered into and executed by
Ticketmaster and VJN subsequent to the execution of all of the Transaction
Documents and is not superseded or preempted by any provision of the
Transaction Documents. This letter agreement shall be a contract made
under and governed by the internal laws of the State of Delaware, without
regard to conflict of laws principles.
If the foregoing accurately sets forth our understanding, please so
signify by signing the acknowledgement below.
VIDEO JUKEBOX NETWORK, INC.
By: /s/ Alan McGlade
-----------------------------------
Name: Alan McGlade
Title: President & CEO
Accepted and Acknowledged: TM NO. 2 LIMITED
By: /s/ Marc Bension
------------------------------------
Name: Marc Bension
Title: Director
