AMENDED AND RESTATED ACQUISITION AGREEMENT
AMENDED AND RESTATED ACQUISITION AGREEMENT, dated as of the
21st day of March, 1996, by and among The Marquee Group Inc., a Delaware
corporation, having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Marquee"); Sports Marketing & Television International, Inc., a Connecticut
corporation, having an office at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000 ("SMTI"); Xxxxxxx Xxxxxx ("Xxxxxx") and Xxxxxxx Xxxxx ("Letis"),
individuals having an address at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000 (Xxxxxx and Letis are collectively referred to herein as the "Sellers"
and individually as a "Seller"); Xxxxxx Xxxxxxxxx ("Xxxxxxxxx"), an individual
having an address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and The
Sillerman Companies, Inc. ("TSC"), a corporation having an address at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WHEREAS, Marquee and SMTI have entered into a letter
agreement dated December 7, 1995 (the "Letter Agreement"), whereby Marquee has
agreed to acquire SMTI, and SMTI has agreed to be acquired by Marquee, on the
terms and conditions hereinafter set forth;
WHEREAS, the boards of directors and stockholders of Marquee
and SMTI each have adopted resolutions declaring advisable the acquisition of
SMTI by Marquee on the terms and conditions hereinafter set forth, whereby the
outstanding Common Stock of SMTI will be converted into Common Stock of Marquee
and cash in a transaction which, when considered with other related
transactions occurring on or about the same time, is intended to qualify as an
exchange to the extent of the receipt of stock of Marquee under Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto have previously entered into an
Acquisition Agreement, dated as of March 21, 1996, and such parties deem it to
be in their respective best interests to amend and restate such agreement and,
to that end, hereby amend and restate such agreement.
NOW, THEREFORE, the parties to this Agreement agree as
follows:
SECTION 1 -- MERGER
1.1 Agreement to Merger. Subject to the terms and conditions
herein set forth, SMTI and Marquee agree to effect a merger (the "Merger") of a
wholly-owned subsidiary of Marquee to be formed for the purpose of effecting
the Merger (the "Subsidiary") with and into SMTI, with SMTI as the surviving
corporation, in accordance with the Agreement and Plan of Merger attached
hereto as Exhibit A (the "Merger Agreement").
1.2 Purchase Price. The aggregate purchase price for all of
the issued and outstanding shares of capital stock of SMTI shall be $8,000,000,
which shall be payable in accordance with the provisions set forth in Section
10.3 hereof, and that number of shares of the Common Stock, par value $.01 per
share (the "Common Stock") of Marquee as is equal to
four-thirteenths (4/13) of the total number of shares of Common Stock of
Marquee held by (i) the shareholders of SMTI, (ii) the shareholders of Athletes
(as defined in Section 4.3 hereof), (iii) Xxxxxxxxx and (iv) TSC in the
aggregate (collectively, the "Management Stock") immediately after the Closing
Date (as defined in Section 10.1 hereof). If necessary, on or prior to the
Closing Date, Marquee will make whatever adjustments in its issued and
outstanding shares of Common Stock as are required so that, immediately after
the Closing Date, the shareholders of SMTI will own, in the aggregate, that
number of shares of Common Stock of Marquee equal to four-thirteenths (4/13) of
the total number of shares of Management Stock.
1.3 Marquee Common Stock. Marquee will make available to
Subsidiary a sufficient number of shares of Common Stock of Marquee and a
sufficient amount of cash in order to effect the Merger pursuant to the Merger
Agreement.
1.4 Per Share Purchase Price. The number of shares of Common
Stock of Marquee to be received for each issued and outstanding share of
capital stock of SMTI, as set forth in Section 2.2 of the Merger Agreement,
shall be calculated on or prior to the Closing Date.
SECTION 2 -- CONVERSION OF STOCK OF SMTI
2.1 Conversion of Shares. The manner of converting the shares
of SMTI into shares of Common Stock of Marquee and cash shall be as set forth
in Section 2 of the Merger Agreement.
2.2 Issuance of Cash to Certain Individuals. On the Closing
Date, Marquee will distribute to designees of Xxxxxx and Letis an aggregate of
$325,000 and the amount paid to Xxxxxx and Letis will be reduced by such
amount. Such amount will be considered part of the purchase price for the
issued and outstanding shares of capital stock of SMTI.
SECTION 3 -- REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND SMTI
The Sellers and SMTI jointly and severally represent and
warrant to Marquee that:
3.1 Organization and Good Standing. SMTI is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Connecticut and has corporate power to own its property and to carry
on its business as it is now being conducted. SMTI is qualified to do business
in the State of New York. Copies of SMTI's Certificate of Incorporation and
Bylaws (certified to be correct by the Secretary of SMTI) have been delivered
to Marquee and are complete and correct as at the date hereof. SMTI's minute
books contain a complete and accurate record of all meetings and other
corporate action of its shareholders and board of directors.
3.2 Capitalization. SMTI's authorized capital stock
consists of 5,000 shares of Common Stock, no par value per share, 4,000 of
which are issued and outstanding. No shares are held in SMTI's treasury. All of
the outstanding shares of Common Stock of SMTI are validly issued, fully paid,
and nonassessable. There are no outstanding options, agreements, contracts,
calls,
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or commitments of any character which would require the issuance by SMTI of any
capital stock. All of the issued and outstanding Common Stock of SMTI are owned
by Xxxxxx and Letis, free and clear of any liens, claims or charges of any
nature. Their ownership of shares of Common Stock of SMTI is as set forth
below:
Name No. of Shares
---- -------------
Xxxxxxx Xxxxxx 2,000
Xxxxxxx Xxxxx 2,000
3.3 Subsidiaries. SMTI has no subsidiaries, nor does it
have an ownership interest in any partnership, corporation, association or
other business entity.
3.4 Financial Statements. SMTI has delivered to Marquee
copies of the following financial statements, all of which have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods indicated:
(1) 1995 Financial Statements. Balance sheet of
SMTI as of December 31, 1995 (the "SMTI Balance Sheet"), together with the
related statement of operations, which present fairly as of their date the
financial condition of SMTI and its results of operations for the period
indicated.
(2) 1993 and 1994 Financial Statements. Balance
sheet of SMTI as of December 31, 1993 and 1994, together with the related
statements of operations, which present fairly as of their date the financial
condition of SMTI and its results of operations for the periods indicated.
3.5 Absence of Undisclosed Liabilities. SMTI did not have at
the date of the SMTI Balance Sheet any liabilities or obligations, secured or
unsecured (whether accrued, absolute, contingent, or otherwise), of a nature
that would be reflected or reserved against in a corporate balance sheet or
disclosed in the notes thereto prepared in accordance with generally accepted
accounting principles that are not reflected or reserved against in the SMTI
Balance Sheet or disclosed in the notes thereto.
3.6 Absence of Certain Changes. There have not been
since the date of the SMTI Balance Sheet any changes of the following nature:
(1) Business, properties and financial
condition. Any material adverse change in SMTI's properties, business,
financial condition, or results of operations.
(2) Capital stock: options, dividends and so
forth. Any change in the authorized, issued, or outstanding capital stock of
SMTI; any granting of any stock option or right to purchase shares of capital
stock or any issuance of any security convertible into shares of capital stock
of SMTI; any purchase, redemption, retirement, or other acquisition of any
shares of capital
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stock by SMTI; any agreement to do any of the foregoing; or any declaration,
setting aside, or payment of any dividend or other distribution in respect of
the capital stock of SMTI.
(3) Sales, leases, borrowings and so forth. Any
sale or lease of SMTI's property or assets with an original cost in excess of
$10,000 for any single item or any mortgage or pledge of any properties or
assets of SMTI, or any borrowing incurred, assumed, or guaranteed by SMTI.
(4) Employee benefit plans and certain salaries.
Any employment contract in excess of $50,000 per year, bonus, stock option,
profit sharing, pension, retirement, incentive, medical, health, disability,
other employee benefit or similar arrangement or plan instituted, agreed to, or
amended, nor any contributions or other payments made (nor contribution or
other obligations incurred) with respect to existing arrangements and plans of
the aforementioned types, except in accordance with past practices (and no such
plans have any unfunded liability).
3.7 Litigation and so forth. Except as set forth in Schedule
13 described in Section 3.8(13) hereof, there is no litigation, proceeding, or
governmental investigation pending or, to the knowledge of SMTI, threatened
against or relating to SMTI, its properties or business or the transactions
contemplated by this Agreement; nor, to the knowledge of SMTI, is there any
reasonable basis for any such actions or for any claims; and SMTI is not a
party to or subject to the provisions of any judicial decree or judgment or any
order of any governmental agency.
3.8 Lists of properties, contracts and so forth. SMTI has
delivered to Marquee lists or summary descriptions (certified as correct to the
best of their knowledge by authorized officers of SMTI), each of which is
complete and accurate in all material respects as of the date hereof, of the
following:
(1) Real property. All real property owned of
record or beneficially or leased by SMTI ("Schedule 1"), accompanied by copies
of the deeds, title insurance policies, and leases relating thereto.
(2) Other property. Inventories and tangible
fixed assets, as shown on SMTI's books, showing, with respect to inventories,
the amounts of raw materials, work-in-process, and finished goods, and with
respect to fixed assets, the total of each of the following categories:
leasehold improvements, machinery and equipment, furniture and fixtures, and
automotive equipment ("Schedule 2").
(3) Insurance policies. All policies of
insurance with respect to SMTI's properties, buildings, machinery, equipment,
furniture, fixtures, operations, and the lives of its directors, officers, and
employees ("Schedule 3").
(4) Certain leases and contracts. Each existing
lease, contract, or other commitment of SMTI involving an aggregate payment by
SMTI of more than $25,000 or to SMTI of more than $50,000 or extending beyond
twelve (12) months from the date hereof (whether or not
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terminable at the option of any party thereto at an earlier date) other than
leases, contracts, or commitments furnished pursuant to other paragraphs of
this Section 3.8 ("Schedule 4").
(5) Certain salaried employees. The names and
annual salary rates as of the SMTI Balance Sheet date of SMTI's directors,
officers, employees, and agents whose annual rate of compensation at such date
was $50,000 or more ("Schedule 5").
(6) Labor contracts. Each existing labor
contract to which SMTI is a party ("Schedule 6").
(7) Intellectual property. All of SMTI's
patents, trademarks, trade names, service marks, service names, copyrights, and
registrations and applications therefor; and all patent, trademark, trade name,
service xxxx, service name, or copyright licenses, assignments, or royalty
agreements to which SMTI is a party ("Schedule 7").
(8) Profit sharing plans and so forth. All
employment contracts, bonus, stock option, profit sharing, pension, retirement,
incentive, medical, health, disability or other employee benefit plans or
arrangements of SMTI ("Schedule 8").
(9) Banks. The name of each bank in which SMTI
has an account or safe deposit box, and the names of all persons authorized to
draw thereon or having access thereto ("Schedule 9").
(10) Powers of attorney. The names of all
persons, if any, holding powers of attorney from SMTI ("Schedule 10").
(11) Loan and credit agreements and so forth.
All mortgages, indentures, promissory notes, deeds of trust, loan or credit
agreements, or similar instruments to which SMTI is a party, and all amendments
or modifications of any thereof ("Schedule 11"), with a statement of any as to
which there is any existing default by SMTI.
(12) Employee stock options. The names of all
persons holding employee stock options to purchase shares of capital stock of
SMTI and, with respect to each, the date of grant or issue, the expiration
date, the number and class of shares subject thereto, and the purchase price
("Schedule 12").
(13) Litigation. Each lawsuit, administrative
proceeding, or arbitration to which SMTI is a party (whether as plaintiff,
defendant, or otherwise), including the damages or relief sought therein, the
name of counsel for SMTI in charge of such matter, and its current status
("Schedule 13").
(14) Material assets. A list of every material
asset used by SMTI in the conduct of its business that is not either owned by
SMTI or leased by or licensed to it under an agreement listed on Schedules 1
through 13 ("Schedule 14").
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(15) Other contracts and commitments. Every
contract and commitment (not listed on other schedules delivered to Marquee
pursuant to this Section 3.8) that SMTI would be required to file or describe
in a Registration Statement on Form S-1 filed by SMTI under the Securities Act
of 1933 Act, as amended ("Schedule 15").
3.9 Title. With respect to the property listed in Schedules 1
and 2, SMTI has good and marketable title to the real property stated to be
owned by it, has good title to the leasehold interests in real property stated
to be held by it, and good title to all of the tangible property stated to be
owned by it, in each case free and clear of all liens and encumbrances, except
for (1) liens and encumbrances disclosed in Schedules 1 and 2; (2) the lien of
current taxes not yet due and payable; and (3) such liens by operation of law
and such imperfections of title, and other liens and encumbrances, if any, as
are not substantial in character, amount, or extent and do not interfere with
the present or future use by SMTI of the properties subject thereto or affected
thereby.
SMTI has received no notice of violation of any applicable
zoning regulation, ordinance, or other law, order, regulation, or requirement
relating to its operations or its properties and, so far as is known to SMTI
(1) there is no such violation of a material nature and (2) all buildings and
structures used by SMTI substantially conform with all applicable ordinances,
codes, and regulations.
Except as stated in Schedule 7, SMTI (1) has clear record
title to the patents, trademarks, trade names, service marks, service names,
and copyrights, and registrations and applications therefor, and copyright
registrations listed in Schedule 7 as owned by it; (2) has not entered into any
agreements, contracts, or licenses that would impair free and unencumbered use
by Marquee of the patents, trademarks, trade names, service marks, service
names, or copyrights enumerated in Schedule 7; (3) does not know of any
asserted infringement by it of any patent, trademark, trade name, service xxxx,
service name, or copyright of another; and (4) does not believe that it is
infringing a patent, trademark, trade name, service xxxx, service name, or
copyright of another.
3.10 Tax Returns. Except for liabilities with respect to
taxes and interest thereon, to which reference is made in notes to the SMTI
Balance Sheet, the provision for taxes therein is sufficient for the payment of
all accrued and unpaid federal, state, county, and local taxes of SMTI
(including any penalties or interest payable in respect of such taxes), whether
or not disputed, for the period ended December 31, 1995, and for all fiscal
years prior thereto.
3.11 No Violation. The execution of this Agreement and the
Merger Agreement does not, and performance hereof and thereof will not, violate
the provisions of SMTI's Certificate of Incorporation, Bylaws, or any
indenture, agreement, or other instrument to which SMTI is a party, except
insofar as any such instrument may require consent by a lender, mortgagee,
lessor, or other party to such actions, whose consent SMTI agrees to obtain
before the Closing Date.
3.12 Authorization. The execution, delivery, and performance
of this Agreement and the Merger Agreement have been duly authorized and
approved by SMTI's board of directors
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and by all of SMTI's shareholders; this Agreement and the Merger Agreement and
the consummation of the transactions contemplated herein and therein have been
duly and validly authorized by all necessary corporate action on the part of
SMTI; and this Agreement is, and (upon execution and delivery as provided
herein) the Merger Agreement will be, binding upon and enforceable against SMTI
in accordance with their respective terms.
3.13 General. None of the representations or warranties made
by the Sellers or SMTI in this Agreement are false or misleading with respect
to any material fact or omit to state any material fact necessary in order to
make the statements therein contained not misleading.
SECTION 4 -- REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS OF
XXXXXXXXX, TSC AND MARQUEE
Xxxxxxxxx, TSC, and Marquee jointly and severally represent
and warrant to, and covenant and agree with, SMTI and the Sellers that:
4.1 Organization and Good Standing. Marquee is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has corporate power to own its property and to carry on
its business as it is now being conducted. At the Closing Date Subsidiary will
be a corporation duly organized, validly existing and in good standing under
the laws of the State of Connecticut and have corporate power to own its
property and to carry on its business as it is then being conducted. Copies of
Marquee's Certificate of Incorporation and Bylaws (certified to be correct by
an officer of Marquee) have been delivered to SMTI and are complete and correct
as of the date hereof. Marquee's minute books contain a complete and accurate
record of all meetings and other corporate action of its shareholders and board
of directors. On or prior to the Closing Date Marquee will deliver to SMTI
copies of Subsidiary's Certificate of Incorporation and Bylaws (certified to be
correct by the Secretary of Subsidiary), which shall be complete and correct as
of the date of such delivery. On the Closing Date Subsidiary's minute books
will contain a complete and accurate record of all meetings and other corporate
action of its shareholders and board of directors.
4.2 Capitalization. Marquee's authorized capital stock
consists of 1,000 shares of Common Stock, par value $.01 per share, all of
which are issued and outstanding. No shares are held in Marquee's treasury. All
of the outstanding shares of Common Stock of Marquee are validly issued, fully
paid, and nonassessable. All of the shares of capital stock of Subsidiary to be
issued will be validly issued, fully paid and nonassessable. Other than
Marquee's pending agreements regarding a private placement as described in
Marquee's Confidential Term Sheet dated July 30, 1996, and its initial public
offering, there are no outstanding options, agreements, contracts, calls, or
commitments of any character which would require the issuance by Marquee or
Subsidiary of any capital stock (it being understood that Marquee may, prior to
the Closing Date, issue stock, options or warrants to key employees of or
advisors to Marquee (other than Xxxxxxxxx, TSC or any of their affiliates)).
All of the issued and outstanding Common Stock of Marquee is owned by
Xxxxxxxxx, TSC and Xxxxxx Xxxxxxx. Their ownership of shares of Common Stock of
Marquee is as set forth below:
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Name No. of Shares
---- -------------
Xxxxxx Xxxxxxxxx 333
The Sillerman Companies, Inc. 666
Xxxxxx Xxxxxxx 1
All of Subsidiary's outstanding shares of Common Stock will be owned by
Marquee.
4.3 Subsidiaries. Marquee has no subsidiaries, nor does it
have an ownership interest in any partnership, corporation, association, or
other business entity (it being understood that prior to the Closing Date
Marquee (a) will form and own two wholly-owned subsidiaries, Subsidiary and a
wholly-owned subsidiary to be formed for the purpose of effecting the
acquisition of Athletes and Artists, Inc., a New York corporation ("A&A"), by
Marquee by the merger of A&A with and into such subsidiary, and (b) may acquire
all of the outstanding capital stock of The Marquee Group, a Sports, News and
Entertainment Company, Inc., a New York corporation ("Marquee NY") for a
purchase price not to exceed $1,000). Subsidiary will not have any
subsidiaries, nor will it have an ownership interest in any partnership,
corporation, association, or other business entity. Marquee NY does not have
any subsidiaries, nor does it have an ownership interest in any partnership,
corporation, association, or other business entity.
4.4 Financial Statements. Marquee has delivered to SMTI a
copy of an unaudited operating income statement of Marquee as of December 31,
1995 (the "Marquee Balance Sheet") and an unaudited operating income statement
of Marquee NY as of December 31, 1995 (the "Marquee NY Balance Sheet"),
together with the related balance sheets, which present fairly as of their date
the financial condition of Marquee and Marquee NY and their results of
operations for the periods indicated. On or prior to the Closing Date Marquee
will deliver to SMTI a copy of a balance sheet of Subsidiary as of a date no
more than ninety (90) days prior thereto (the "Subsidiary Balance Sheet"),
together with the related statement of operations, which shall present fairly
as of their date the financial condition of Subsidiary and its results of
operations for the period indicated.
4.5 Absence of Undisclosed Liabilities. Marquee did not have
at the date of the Marquee Balance Sheet, Marquee NY did not have at the date
of the Marquee NY Balance Sheet, and Subsidiary will not have at the date of
the Subsidiary Balance Sheet, any liabilities or obligations, secured or
unsecured (whether accrued, absolute, contingent or otherwise), of a nature
that would be reflected or reserved against in a corporate balance sheet or
disclosed in the notes thereto prepared in accordance with generally accepted
accounting principles that are not reflected or reserved against in such
balance sheets or disclosed in the notes thereto.
4.6 Absence of Certain Changes. There have not been since the
date of the Marquee Balance Sheet and the Marquee NY Balance Sheet, and at the
Closing Date there will not have been since the date of the Subsidiary Balance
Sheet, any changes of the following nature:
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(1) Business, properties and financial
condition. Any material adverse change in Marquee's, Marquee NY's or
Subsidiary's properties, business, financial condition, or results of
operations.
(2) Capital stock: options, dividends and so
forth. Any change in the authorized, issued, or outstanding capital stock of
Marquee, Marquee NY or Subsidiary; any granting of any stock option or right to
purchase shares of capital stock or any issuance of any security convertible
into shares of capital stock by Marquee, Marquee NY or Subsidiary (except as
contemplated by Section 4.6(4) hereof and as described on Schedule A (as
defined in Section 4.8(1) hereof)); any purchase, redemption, retirement, or
other acquisition of any shares of capital stock by Marquee, Marquee NY or
Subsidiary; other than Marquee's pending agreements regarding a private
placement as described in Marquee's Confidential Term Sheet dated July 30,
1996, and its initial public offering, any agreement to do any of the
foregoing; or any declaration, setting aside, of payment of any dividend or
other distribution in respect of the capital stock of Marquee, Marquee NY or
Subsidiary.
(3) Sales, leases, borrowings and so forth. Any
sale or lease of Marquee, Marquee NY's or Subsidiary's property or assets with
an original cost in excess of $10,000 for any single item or any mortgage or
pledge of any properties or assets of Marquee or Subsidiary, or any borrowing
incurred, assumed, or guaranteed by Marquee or Subsidiary.
(4) Employee benefit plans and certain salaries.
Except for Marquee's employment agreement, dated March 21, 1996, with Xxxxxxxxx
and Marquee's employment agreement, dated May 9, 1996, with Xxxxxx Xxxxxxx, any
employment contract in excess of $50,000 per year, bonus, stock option, profit
sharing, pension, retirement, incentive, medical, health, disability, other
employee benefit or similar arrangement or plan instituted, agreed to, or
amended (it being understood that Marquee may, prior to the Closing Date, (a)
issue stock, options or warrants to key employees of or advisors to Marquee
(other than Xxxxxxxxx, TSC or any of their affiliates) and (b) to the extent it
has not already done so, obtain medical and dental insurance of the type
required by Section 6 of the employment agreements contemplated by Sections 8.6
and 9.6 hereof); nor any contributions or other payments made (nor
contributions or other obligations incurred) with respect to existing
arrangements and plans of the aforementioned types, except in accordance with
past practices (and no such plans have any unfunded liability).
4.7 Litigation and so forth. There is no litigation,
proceeding, or governmental investigation pending or, to the knowledge of
Marquee, threatened against or relating to Marquee or Marquee NY or any of
their properties or businesses or the transactions contemplated by this
Agreement; nor, to the knowledge of Marquee, is there any reasonable basis for
such actions or for any claims; and neither Marquee nor Marquee NY is a party
to or subject to the provisions of any judicial decree or judgment or any order
of any governmental agency.
4.8 List of Properties, Contracts and So Forth. Marquee
has delivered to SMTI lists or summary descriptions with respect to Marquee and
Marquee NY, and on or prior to the Closing Date Marquee will deliver to SMTI
lists or summary descriptions with respect to Subsidiary
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(in each case certified as correct to the best of their knowledge by authorized
officers of the related entity), each of which is or will be complete and
correct in all material respects as of the date set out therein, of the
following:
(1) Certain leases and contracts. Each lease,
contract or other commitment of Marquee, Marquee NY or Subsidiary involving an
aggregate payment by any of them of more than $25,000 or to any of them of more
than $50,000 or extending beyond twelve months (12) from the date hereof
(whether or not terminable at the option of any party at an earlier date) other
than leases, contracts, or commitments furnished pursuant to other paragraphs
of this Section 4.8 ("Schedule A").
(2) Certain salaried employees. The names and
annual salary rates as of the date of this Agreement of Marquee's, Marquee NY's
and Subsidiary's directors, officers, employees, and agents whose annual rate
of compensation at such date was $50,000 or more ("Schedule B").
(3) Loan and credit agreements and so forth.
All mortgages, indentures, promissory notes, deeds of trust, loan or credit
agreements, or similar agreements to which Marquee, Marquee NY or Subsidiary is
a party, and all amendments or modifications of any thereof ("Schedule C"),
with a statement of any as to which there is any existing default by Marquee,
Marquee NY or Subsidiary.
(4) Employee stock options. The names of all
persons holding employee stock options to purchase shares of capital stock of
Marquee, Marquee NY or Subsidiary and, with respect to each, the date of grant
or issue, the expiration date, the number and class of shares subject thereto,
and the purchase price ("Schedule D").
(5) Litigation. Each lawsuit, administrative
proceeding, or arbitration to which Marquee, Marquee NY or Subsidiary is a
party (whether as plaintiff, defendant or otherwise), including the damages or
relief sought therein, the name of counsel for Marquee, Marquee NY or
Subsidiary in charge of such matter, and its current status ("Schedule E").
(6) Other contracts and commitments. Every
contract and commitment (not listed on other schedules delivered to SMTI
pursuant to this Section 4.8) that Marquee, Marquee NY or Subsidiary would be
required to file or describe in a Registration Statement on Form S-1 filed by
Marquee, Marquee NY or Subsidiary under the Securities Act of 1933, as amended
("Schedule F").
4.9 Tax Returns. Marquee and Marquee NY have, and prior to
the Closing Date Subsidiary will have, timely filed all tax returns required to
be filed by them and paid all taxes required to be paid for all fiscal periods
prior hereto (in the case of Marquee and Marquee NY) or prior to the Closing
Date (in the case of Subsidiary).
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4.10 No Violation. Marquee's execution of this Agreement does
not and Subsidiary's execution of the Merger Agreement will not, and the
performance hereof and thereof will not, violate the provisions of Marquee's or
Subsidiary's Certificate of Incorporation, Bylaws or any indenture, agreement,
or other instrument to which Marquee is or Subsidiary will be a party, except
insofar as any such instrument may require consent by a lender, mortgagee,
lessor, or other party to such actions, whose consent Marquee or Subsidiary
agree to obtain before the Closing Date.
4.11 Authorization. The execution, delivery, and performance
of this Agreement have been duly authorized and approved by Marquee's board of
directors and by all of its shareholders and the Merger Agreement will be
approved by Subsidiary's board of directors and shareholders; this Agreement
and the consummation of the transactions contemplated herein have been duly and
validly authorized by all necessary corporate action on the part of Marquee;
the Merger Agreement and the consummation of the transactions contemplated
therein will be duly and validly authorized by all necessary corporate action
on the part of Subsidiary; and this Agreement is, and, with respect to
Subsidiary, the Merger Agreement (upon execution and delivery as provided
herein) will be, binding upon and enforceable against Marquee or Subsidiary, as
the case may be, in accordance with their terms.
4.12 General. None of the representations or warranties made
by Marquee, Xxxxxxxxx or TSC in this Agreement are false or misleading with
respect to any material fact or omit to state any material fact necessary in
order to make the statements therein contained not misleading.
SECTION 5 -- S CORPORATION MATTERS
Immediately prior to the Closing Date, SMTI will declare a
dividend to its shareholders equal to forty percent (40%) of the increase in
its accumulated adjustments account, as defined in Section 1368(e) of the Code,
for the period from the date hereof until the Closing Date, which dividend
shall be paid not later than the last day of SMTI's post-termination period, as
defined in Section 1377(b) of the Code.
SECTION 6 -- CONDUCT OF SMTI PENDING THE CLOSING DATE
The Sellers and SMTI covenant and agree that between the date
of this Agreement and the Closing Date:
6.1 Certificate of Incorporation and Bylaws. SMTI will
not change its Certificate of Incorporation or Bylaws.
6.2 Capitalization and so forth. SMTI will not make any
change in its authorized, issued, or outstanding capital stock; grant any stock
option or right to purchase shares of its capital stock; issue any security
convertible into shares of its capital stock; purchase, redeem, retire, or
otherwise acquire any shares of its capital stock; or agree to do any of the
foregoing; or declare, set aside, or pay any dividend or other distribution in
respect of its capital stock.
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6.3 Business in Ordinary Course. SMTI will conduct its
business in its customary course and will (1) use its reasonable efforts to
preserve its business organization intact, to keep available to Marquee the
services of its present officers and employees, and to preserve the goodwill of
suppliers, customers, and others having business relations with it; (2)
maintain its properties in customary repair, working order, and condition,
reasonable wear and tear and damage by casualty excepted; (3) keep in force at
no less than their present limit all policies of insurance listed in Schedule
3; and (4) make no material change in the customary terms and conditions on
which it extends credit to customers; provided, however, that nothing in this
Section 6.3 shall prohibit compliance by SMTI with, or SMTI's borrowing or
repayment of funds pursuant to, any agreements or other commitments disclosed
by SMTI to Marquee on any Schedule furnished in accordance with Section 3.8
hereof.
6.4 Employee Compensation. SMTI will pay Xxxxxx a salary at
the rate of $300,000 per year and Letis a salary at the rate of $300,000 per
year. SMTI will not institute, agree to, or amend any employment contract
requiring the payment by SMTI of a salary or bonus in excess of $50,000 per
year, or any bonus, stock option, profit sharing, pension, retirement,
incentive, medical, health, disability, other employee benefit or similar
arrangement or plan, except to grant normal individual increases in
compensation in accordance with established agreements or procedures and except
as may be necessary to comply with Section 6.8 hereof.
6.5 Banking Arrangements; Powers of Attorney. SMTI will
not make any change in its banking and safe deposit arrangements and will not
grant any powers of attorney.
6.6 Accounting Practices. Except as required by
generally accepted accounting principles, SMTI will not make any changes in its
accounting methods or practices.
6.7 Merger. SMTI will not merge or consolidate with any other
corporation; sell or lease all or substantially all of its assets and business;
acquire all or substantially all of the stock of the business or assets of any
other person, corporation, or business organization; or agree to do any of the
foregoing.
6.8 Termination of Employee Benefit Plans. At Marquee's
option and on such date or dates (but in no event earlier than two (2) business
days prior to the Closing Date) and in such manner as Marquee shall direct,
SMTI will terminate some or all bonus, stock option, profit sharing, pension,
retirement, incentive, medical, health, disability and other employee benefit
plans or arrangements it maintains or sponsors or to which it is obligated to
contribute, including, without limitation, the Sports Marketing and Television,
Inc. Target Plan. Any such termination will be made in accordance with all
applicable laws, including, without limitation, the Employee Retirement Income
Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as
amended.
6.9 Delivery of Financial Statements. Within sixty (60) days
of the date hereof, SMTI will deliver to Marquee a balance sheet of SMTI as of
December 31, 1995, together with the related statement of operations, which
shall present fairly the financial condition of SMTI and its
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results of operations for the period indicated and which shall be audited by
independent certified public accountants.
SECTION 6A -- CONDUCT OF MARQUEE PENDING THE CLOSING DATE
Xxxxxxxxx, TSC and Marquee covenant and agree that between
the date of this Agreement and the Closing Date:
6A.1 Capitalization and so forth. Marquee will not purchase,
redeem, retire, or otherwise acquire any shares of its capital stock; issue to
Xxxxxxxxx or TSC or any of their affiliates any shares of its capital stock or
any option or right to purchase shares of its capital stock; or agree to do any
of the foregoing; or declare, set aside, or pay any dividend or other
distribution in respect of its capital stock.
6A.2 Business in Ordinary Course. Marquee will conduct its
business in its customary course (it being understood that, notwithstanding
anything else herein contained, Marquee may discharge the liabilities listed on
the Marquee NY Balance Sheet) and will (1) use its reasonable efforts to
preserve its business organization intact and to preserve the goodwill of
suppliers, customers, and others having business relations with it; (2)
maintain its properties in customary repair, working order, and condition,
reasonable wear and tear and damage by casualty excepted; and (3) make no
material change in the customary terms and conditions on which it extends
credit to customers; provided, however, that nothing in this Section 6A.2 shall
prohibit compliance by Marquee with, or Marquee's borrowing or repayment of
funds pursuant to, any agreements or other commitments disclosed by Marquee to
SMTI on any Schedule furnished in accordance with Section 4.8 hereof.
6A.3 Employee Compensation. Marquee will pay Xxxxxxxxx a
salary at the rate of $325,000 per year. Marquee will not amend or agree to
amend any employment contract, or any proposed employment contract, with
Xxxxxxxxx, Xxxxxx Xxxxxxxx ("Xxxxxxxx") or Xxxxx Xxxxxxxxx ("Xxxxxxxxx").
6A.4 Banking Arrangements; Powers of Attorney. Marquee
will not make any change in its banking and safe deposit arrangements and will
not grant any powers of attorney.
6A.5 Accounting Practices. Except as required by
generally accepted accounting principles, Marquee will not make any changes in
its accounting methods or practices.
6A.6 Merger. Except as contemplated by this Agreement,
Marquee will not merge or consolidate with any other corporation; sell or lease
all or substantially all of its assets and business; acquire all or
substantially all of the stock of the business or assets of any other person,
corporation, or business organization; or agree to do any of the foregoing.
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SECTION 7 -- ACCESS
From the date hereof to the Closing Date, Marquee and SMTI
shall provide each other with such information and permit each other's officers
and representatives such access to its properties and books and records as the
other may from time to time reasonably request. If the transactions contemplated
by this Agreement and the Merger Agreement are not consummated, all documents
furnished in connection with this Agreement shall be returned to the party
furnishing the same, and all information so received shall be treated as
confidential.
SECTION 8 -- CONDITIONS PRECEDENT TO OBLIGATIONS OF MARQUEE
The obligation of Marquee to consummate the Merger and to
cause Subsidiary to consummate the Merger shall be subject to the fulfillment
on or before the Closing Date of each of the following conditions, unless
waived in writing by Marquee:
8.1 Representations and Warranties. The representations and
warranties of SMTI and the Sellers set forth in Section 3 hereof shall be true
and correct at the Closing Date as if made at and as of that date, except as
affected by the transactions contemplated hereby.
8.2 Shareholder Approval. This Agreement shall have
been unanimously adopted by the shareholders of SMTI.
8.3 Covenants. SMTI and the Sellers shall have performed all
covenants and agreements set forth in Sections 6 and 7 hereof to be performed
by them on or before the Closing Date.
8.4 Financing. Marquee shall have previously or
simultaneously effected an initial public offering of its capital stock or
completed a similar private financing where the gross proceeds from such
offering are at least $13,800,000 (the "Financing") by December 31, 1996.
8.5 Shareholders' Agreement. The Shareholders' Agreement,
dated as of March 21, 1996, by and among TSC, Gutkowski, Kaminsky, Oppenheim,
Trager, Letis and Marquee shall be in full force and effect.
8.6 Employment Agreements. On the Closing Date, Xxxxxx and
Marquee shall execute an employment agreement in the form attached hereto as
Exhibit C. On the Closing Date, Letis and Marquee shall execute an employment
agreement in the form attached hereto as Exhibit D.
8.7 Legal Opinion. On or before the Closing Date, Marquee and
Subsidiary shall have received an opinion of Xxxxx & XxXxxxxx that the Merger
should be considered a tax-free exchange to the extent of the receipt of stock
of Marquee under Section 351 of the Code.
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8.8 Certificate. On the Closing Date, SMTI and the Sellers
shall deliver a certificate to Marquee and Subsidiary, in form and substance
reasonably acceptable to Marquee and Subsidiary, to the effect that all of the
representations and warranties of SMTI and the Sellers set forth in Section 3
hereof are true and correct at the Closing Date as if made at and as of that
date, except as affected by the transactions contemplated hereby, and that all
of the covenants and agreements of SMTI and the Sellers set forth in Section 6
hereof have been performed.
SECTION 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS OF SMTI
The obligation of SMTI to consummate the Merger shall be
subject to the fulfillment on or before the Closing Date of each of the
following conditions, unless waived in writing by SMTI:
9.1 Representations and Warranties. The representations and
warranties of Xxxxxxxxx, TSC and Marquee set forth in Section 4 hereof shall be
true and correct at the Closing Date as if made at and as of that date, except
as affected by the transactions contemplated hereby.
9.2 Shareholder Approval. This Agreement shall have been
unanimously adopted by the shareholders of Marquee and Subsidiary.
9.3 Covenants. Marquee, Xxxxxxxxx, and TSC shall have
performed all covenants and agreements set forth in Sections 4, 6A and 7 hereof
to be performed by them on or before the Closing Date.
9.4 Financing. Marquee shall have previously or
simultaneously effected an initial public offering of its capital stock or
completed a similar private financing where the gross proceeds from such
offering are at least $13,800,000 by December 31, 1996.
9.5 Shareholders' Agreement. The Shareholders' Agreement,
dated as of March 21, 1996, by and among TSC, Gutkowski, Kaminsky, Oppenheim,
Trager, Letis and Marquee shall be in full force and effect.
9.6 Employment Agreements. On the Closing Date, Xxxxxx and
Marquee shall execute an employment agreement in the form attached hereto as
Exhibit C. On the Closing Date, Letis and Marquee shall execute an employment
agreement in the form attached hereto as Exhibit D.
9.7 Legal Opinion. On or before the Closing Date, SMTI shall
have received an opinion of Xxxxx & XxXxxxxx, in form and substance reasonably
acceptable to SMTI, that the Merger should be considered a tax-free exchange to
the extent of the receipt of stock of Marquee under Section 351 of the Code.
9.8 Certificate. On the Closing Date, Marquee, Xxxxxxxxx and
TSC shall deliver a certificate to SMTI and the Sellers, in form and substance
reasonably acceptable to SMTI and the
15
Sellers, that all of the representations and warranties of Marquee, Xxxxxxxxx
and TSC set forth in Section 4 hereof are true and correct at the Closing Date
as if made at and as of that date, except as affected by the transactions
contemplated hereby, and that all of the covenants and agreements of Marquee,
Xxxxxxxxx and TSC set forth in Sections 4 and 6A hereof have been performed.
SECTION 10 -- CLOSING DATE AND EFFECTIVE DATE OF THE MERGER
10.1 Closing Date. The closing date of the transactions
contemplated by this Agreement (the "Closing Date") shall be the date of
consummation of the Financing.
10.2 Effective Date. On the Closing Date, an executed
counterpart of the Merger Agreement shall be filed with the Secretary of State
of the State of Connecticut and the Merger shall become effective upon the
completion of such filing. The date of completion of such filing shall be the
"Effective Date."
10.3 Payment of Purchase Price. On the Closing Date, Marquee
shall pay to the Sellers an aggregate amount equal to $6,500,000 and on each
April 1 following the Closing Date, until and including April 1, 2001, Marquee
shall pay $150,000 to each of Letis and Xxxxxx.
SECTION 11 -- TERMINATION
11.1 Circumstances of Termination. This Agreement may be
terminated (notwithstanding approval by the shareholders of any party hereto):
(1) By the mutual consent in writing of the boards of
directors of Marquee and SMTI.
(2) By the board of directors of Marquee if any condition
provided in Section 8 hereof has not been satisfied or waived on or before the
Closing Date.
(3) By the board of directors of SMTI if any condition
provided in Section 9 hereof has not been satisfied or waived on or before the
Closing Date.
(4) By the board of directors of either Marquee or SMTI if
the Closing Date has not occurred by December 31, 1996, unless the closing of
the transactions contemplated hereby shall not have occurred by such date due
to the action or failure to act of such party.
(5) By the board of directors of either Marquee or SMTI if
that certain Acquisition Agreement, dated March 21, 1996, by and among Marquee,
A&A, Kaminsky, Oppenheim, Xxxxxxxxx and TSC is terminated or the merger
contemplated thereby does not occur simultaneously with the Merger.
11.2 Effect of Termination. In the event of a termination of
this Agreement pursuant to Section 11.1 hereof, each party shall pay the costs
and expenses incurred by it in
16
connection with this Agreement and, except only as provided in the following
sentence, no party (or any of its officers, directors or shareholders) shall be
liable to any other party for any costs, expenses, damage or loss of
anticipated profits resulting from such termination. In the event that the
transactions contemplated herein fail to be consummated as a result of a wilful
breach by SMTI or Marquee of this Agreement or the Merger Agreement, or the
gross negligence of SMTI or Marquee in performing their obligations hereunder
or thereunder, nothing herein contained shall be deemed to limit the rights and
remedies at law or equity available to SMTI or Marquee against each other on
account of such wilful breach or gross negligence.
11.3 Allocation of Business and Net Income Following
Termination. In the event that this Agreement is terminated in accordance with
the terms hereof, Marquee and SMTI agree (i) that any business of SMTI or A&A
generated by such entity between the date hereof and the date of termination of
this Agreement and performed by such entity shall become the client of and
remain with the entity that generated such business, (ii) that the parties
hereto shall negotiate in good faith the disposition and treatment of any
business (and the related client) of SMTI or A&A generated by Marquee, TSC,
Xxxxxxxxx, A&A (in the case of SMTI business) or SMTI (in the case of A&A
business) between the date hereof and the date of termination of this Agreement
and performed by SMTI or A&A and with respect to which a timely Designation, as
defined below, was delivered by Marquee, TSC, Xxxxxxxxx, A&A (in the case of
SMTI business) or SMTI (in the case of A&A business), and (iii) that any
business of Marquee generated by SMTI, A&A, Marquee, TSC or Xxxxxxxxx between
the date hereof and the date of termination of this Agreement and performed by
Marquee shall become the client of and remain with Marquee, and that the net
income from any business described in this clause (iii) shall be allocated as
follows:
(a) fifty percent of the net income of Marquee derived from
business generated by either Marquee, TSC or Xxxxxxxxx between the date hereof
and the date of termination of this Agreement shall be retained by or paid to
Marquee, with the balance to be paid equally and on at least a quarterly basis
to A&A and SMTI;
(b) fifty percent of the net income of Marquee derived from
business generated by A&A between the date hereof and the date of termination
of this Agreement and with respect to which a timely Designation was delivered
by A&A shall be retained by or paid to A&A on at least a quarterly basis, with
the balance to be paid equally and on at least a quarterly basis to Marquee and
SMTI; and
(c) fifty percent of the net income of Marquee derived from
business generated by SMTI between the date hereof and the date of termination
of this Agreement and with respect to which a timely Designation was delivered
by SMTI shall be retained by or paid to SMTI on at least a quarterly basis,
with the balance to be paid equally and on at least a quarterly basis to
Marquee and A&A.
For purposes of this Section 11.3, business shall be deemed to be business of
the entity (Marquee, A&A or SMTI) that entered into a contract with the third
party client in connection with such business. Business shall be presumed to be
generated by the entity that entered into the contract with
17
the third party client unless another of such entities or Xxxxxxxxx or TSC
notifies in writing (a "Designation") the others within fifteen (15) days of
the date such contract was entered into that it is disputing such presumption.
Such Designation disputing such presumption shall be deemed accepted by such
other entities unless it is disputed by any such other entities within fifteen
(15) days thereafter, at which point the parties shall arrange a meeting to
resolve the dispute.
SECTION 12 -- GENERAL PROVISIONS
12.1 Further Assurances and Co-Operation. At any time, and
from time to time, after the Effective Date, each party will execute such
additional instruments and take such action as may be reasonably requested by
the other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this Agreement.
At any time, and from time to time, the period commencing on the date hereof
and ending on the third (3rd) anniversary of the Effective Date, SMTI agrees to
use its best efforts to cause its independent certified public accountants to
audit SMTI's financial statements in accordance with generally accepted
auditing standards and to furnish such financial statements to Marquee in
proper form to be included in a Registration Statement filed under the
Securities Act of 1933, as amended, and to furnish all necessary reports and
consents as may be required to be included in such Registration Statement or
offering memorandum.
12.2 Indemnity. (a) The Sellers hereby jointly and severally
agree to indemnify and hold each of Marquee and Subsidiary harmless from any
and all losses, claims and damages which Marquee and Subsidiary may suffer or
incur and which arise out of the breach by SMTI or the Sellers of any
representation, warranty, covenant or agreement set forth in Section 3 or 6
hereof, including, but not limited to Section 6.8 hereof. The amount of each
Seller's indemnity hereunder shall be limited to $1,000,000.
(b) Xxxxxxxxx and TSC hereby jointly and severally agree to
indemnify and hold each of the Sellers and SMTI harmless from any and all
losses, claims and damages (including, but not limited to, reasonable
attorneys' fees) which the Sellers or SMTI may suffer or incur and which arise
out of the breach by Xxxxxxxxx, TSC or Marquee of any representation, warranty,
covenant or agreement set forth in Sections 4 or 6A hereof. The amount of each
of Xxxxxxxxx'x and TSC's indemnity hereunder shall be limited to $250,000.
12.3 Survival of Representations and Warranties. The parties
hereto agree that all representations and warranties made in this Agreement or
in any Schedule delivered pursuant to this Agreement shall survive the Closing
Date for a period of six (6) months and that any action in respect of breaches
thereof, including any action under Section 12.2 hereof, must be commenced
within such period.
12.4 Waiver. Any failure on the part of either party hereto
to comply with any of its obligations, agreements, or conditions hereunder may
be waived in writing by the party to whom such compliance is owed.
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12.5 Brokers. Each party represents to the other parties that
no broker or finder has acted for it in connection with this Agreement and
agrees to indemnify and hold harmless the other parties against any fee, loss,
or expense arising out of claims by brokers or finders employed or alleged to
have been employed by it.
12.6 Notices. All notices hereunder shall be in writing and
shall be delivered in person or given by registered or certified mail, postage
prepaid, and sent to the parties at the respective addresses above set forth.
Any party may designate any other address to which notice shall be given by
giving notice to the others of such change of address in the manner herein
provided.
12.7 Entire Agreement. This Agreement and the Letter
Agreement constitute the entire agreement between the parties and supersede and
cancel any other agreement, representation, or communication, whether oral or
written, between the parties hereto relating to the transactions contemplated
herein or the subject matter hereof, including, but not limited to, that
previously executed Amended and Restated Acquisition Agreement, dated as of
March 21, 1996, among the parties hereto. In the event there is any
inconsistency between the terms of this Agreement and the terms of the Letter
Agreement, the terms of this Agreement shall govern.
12.8 Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
12.9 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
Connecticut.
12.10 Assignment. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their successors and assigns;
provided, however, that any assignment by any party of its rights under this
Agreement without the written consent of the other parties shall be void.
12.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
12.12 Amendment. This Agreement may only be amended by a
written instrument which is executed by the parties hereto and Xxxxxxxx and
Xxxxxxxxx.
[The rest of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.
THE MARQUEE GROUP INC.
By:__________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC.
By:__________________________________
Name: Xxxxxxx Xxxxxx
Title:
Xxxxxxx Xxxxxx and Xxxxxxx Xxxxx
hereby agree to the provisions of
Sections 3, 6, 8 and 12 hereof
-----------------------------
XXXXXXX XXXXXX
-----------------------------
XXXXXXX XXXXX
The undersigned hereby agree to the amendment and restatement of the foregoing
agreement.
-----------------------------
XXXXXX X. XXXXXXXX
-----------------------------
XXXXX XXXXXXXXX
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Xxxxxx Xxxxxxxxx and The Sillerman
Companies, Inc. hereby agree to the
provisions of Sections 4, 6A, 9 and 12 hereof
-----------------------------
XXXXXX XXXXXXXXX
THE SILLERMAN COMPANIES, INC.
By:___________________________
Name:
Title:
21
EXHIBIT A
AGREEMENT AND PLAN OF MERGER (this "Merger Agreement"), dated
as of the ____ of _________, 1996, pursuant to Part IX of the Stock Corporation
Act of the State of Connecticut, by and between SMTI Acquisition Corp., a
Delaware corporation ("Subsidiary"), and Sports Marketing & Television
International, Inc., a Connecticut corporation ("SMTI") (the two parties being
sometimes collectively referred to as the "Constituent Corporations").
WHEREAS, Subsidiary is a corporation duly organized and
existing under the laws of the State of Delaware with authorized capital stock
of [ ] shares of Common Stock, par value $[ ] per share, all of which
immediately prior to the Effective Date, as defined in Section 1.7 hereof, will
be issued and outstanding and held by The Marquee Group, Inc., a Delaware
corporation ("Marquee");
WHEREAS, SMTI is a corporation duly organized and existing
under the laws of the State of Connecticut, with authorized capital stock of
5,000 shares of Common Stock, par value $____ per share, of which 4,000 shares
are issued and outstanding; and
WHEREAS, the boards of directors and stockholders of SMTI and
Subsidiary have adopted resolutions declaring advisable the proposed merger
(the "Merger") of Subsidiary with and into SMTI upon the terms and conditions
hereinafter set forth, in a transaction which is intended to qualify as a
tax-free exchange to the extent of the receipt of stock of Marquee under
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the Constituent Corporations agree to effect
the Merger provided for in this Merger Agreement on the terms and conditions
set forth herein.
SECTION 1. GENERAL
1.1 The Merger. On the Effective Date, Subsidiary shall
be merged with and into SMTI, with SMTI being the surviving corporation (the
"Surviving Corporation"). The Surviving Corporation shall retain name of
"Sports Marketing & Television International, Inc."
1.2 Capitalization. The number of authorized shares of the
capital stock of the Surviving Corporation shall be [ ] shares of Common Stock,
par value $[ ] per share.
1.3 Certificate of Incorporation and Bylaws. At the Effective
Date, the Certificate of Incorporation of SMTI shall be and remain the
Certificate of Incorporation of the Surviving Corporation, except that such
Certificate of Incorporation shall automatically be amended to the extent
provided in Section 1.2, and until further amended shall be and remain the
Certificate of Incorporation of the Surviving Corporation. At the Effective
Date, the Bylaws of
SMTI shall be and remain the Bylaws of the Surviving Corporation until altered,
amended, or repealed.
1.4 Directors and Officers. On the Effective Date, the
directors of the Surviving Corporation shall be the persons elected by the
stockholder of the Surviving Corporation on such date, and they shall hold
office until their successors have been elected and have qualified in
accordance with law and the Bylaws of the Surviving Corporation. On the
Effective Date, the officers of the Surviving Corporation shall be the persons
appointed by the board of directors of the Surviving Corporation on such date,
and they shall hold office until their successors have been appointed and have
qualified in accordance with law and the Bylaws of the Surviving Corporation.
1.5 Property and Liabilities of Constituent Corporations. On
the Effective Date, the separate existence of Subsidiary shall cease and
Subsidiary shall be merged into the Surviving Corporation. The Surviving
Corporation shall, from and after the Effective Date, possess all the rights,
privileges, powers, and franchises of whatsoever nature and description, public
and private, and be subject to all the restrictions, disabilities and duties of
each of the Constituent Corporations; and all rights, privileges, powers, and
franchises of each of the Constituent Corporations, and all property, real,
personal, and mixed, and debts due to either of the Constituent Corporations on
whatever account as well for stock subscriptions as all other things in action
or belonging to each of the Constituent Corporations shall be vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Corporation as they were of the several and
respective Constituent Corporations, and the title to any real estate vested by
deed or otherwise in any of the Constituent Corporations shall not revert or be
in any way impaired by reason of such Merger. All rights of creditors and all
liens upon the property of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities, and duties of the Constituent
Corporations shall thenceforth attach to the Surviving Corporation, and may be
enforced against it to the same extent as if said debts, liabilities, and
duties had been incurred or contracted by it. Any claim existing or action or
proceeding, whether civil, criminal, or administrative, pending by or against
either Constituent Corporation may be prosecuted to judgment or decree as if
such Merger had not taken place, or the Surviving Corporation may be
substituted in such action or proceeding.
1.6 Further Assurances. Both SMTI and Subsidiary agree that
at any time, or from time to time, as and when requested by the Surviving
Corporation, or by its successors and assigns, it will execute and deliver, or
cause to be executed and delivered in its name by its last acting officers, or
by the corresponding officers of the Surviving Corporation, all such
conveyances, assignments, transfers, deeds, or other instruments, and will take
or cause to be taken such further or other action as the Surviving Corporation,
its successors or assigns may deem necessary or desirable in order to evidence
the transfer, vesting, or devolution of any property, right, privilege, or
franchise or to vest or perfect in or confirm to the Surviving Corporation, its
successors and assigns, title to and possession of all the property, rights,
2
privileges, powers, immunities, franchises, and interests referred to in this
Section 1 and otherwise to carry out the intent and purposes hereof.
1.7 Effective Date. This Merger Agreement shall become
effective at the close of business on the day (the "Effective Date") on which
the filing of a fully-executed copy of this Merger Agreement with the office of
the Secretary of State of Connecticut is completed.
SECTION 2. CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
2.1 Stock of Subsidiary. Each share of capital stock of
Subsidiary issued and outstanding immediately prior to the Effective Date shall
thereupon be converted into and become one share of Common Stock of the
Surviving Corporation. Each such share of Common Stock issued pursuant to this
Section 2.1 shall be fully-paid and non-assessable.
2.2 Stock of SMTI. Each share of Common Stock of SMTI issued
and outstanding immediately prior to the Effective Date (excluding shares held
by SMTI as treasury stock, which shares shall be canceled and extinguished on
the Effective Date) shall upon the Effective Date, by virtue of the Merger and
without any action on the part of the holder thereof, be exchanged for and
converted into and become (1) [ ] shares of fully paid and nonassessable Common
Stock of Marquee, par value $.01 per share ("Marquee Common Stock"), (2)
$1,543.75 and (3) such additional payments as are set forth in that certain
Acquisition Agreement dated as of March 21, 1996 by and between Marquee,
Athletes, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxxxxxxx and The Sillerman
Companies, Inc.. The Common Stock of SMTI so exchanged and converted is herein
sometimes referred to as "Converted SMTI Stock." In addition, pursuant to that
certain Acquisition Agreement, dated as of March __, 1996, between The Marquee
Group Inc. ("Marquee"), SMTI, Xxxxxxx Xxxxxx ("Xxxxxx"), Xxxxxxx Xxxxx
("Letis"), Xxxxxx Xxxxxxxxx and The Sillerman Companies, Inc., Marquee has
agreed to pay to designees of Xxxxxx and Letis the amount of $325,000. Such
additional cash is part of the purchase price for the shares of Common Stock of
SMTI.
2.3 Exchange of Stock Certificates. As promptly as
practicable after the Effective Date, each holder of an outstanding certificate
or certificates theretofore representing shares of Converted SMTI Stock shall
surrender the same to an agent or agents designated by the Surviving
Corporation, and shall thereupon be entitled to receive in exchange therefor
certificates representing the number of shares of Marquee Common Stock and the
amount of cash as determined in accordance with Section 2.2. Dividends payable
after the Effective Date to holders of record in respect of shares of Marquee
Common Stock into which certificates for shares of Converted SMTI Stock shall
be exchangeable shall not be paid to holders of such certificates until their
certificates are surrendered for exchange as aforesaid.
2.4 Fractional Shares. No fractional shares of Marquee Common
Stock and no scrip or certificates therefor will be issued in connection with
the Merger, and no holder of fractional shares will be entitled to voting,
dividend, or any other rights as a stockholder with respect to such fractional
interest.
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SECTION 3. MISCELLANEOUS
3.1 Counterparts. This Merger Agreement may be executed in
any number of counterparts or may be, where the same are not required,
certified or otherwise delivered without the testimonium clause and signature;
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one Merger Agreement.
3.2 Acquisition Agreement. The obligations of SMTI and
Subsidiary to effect the Merger shall be subject to all of the terms and
conditions of the Acquisition Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Merger Agreement as of the date set forth above.
SMTI ACQUISITION CORP.
By:_______________________________
Name:
Title:
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC.
By:_______________________________
Name:
Title:
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