Document:

Exhibit 10.4 to MTS Systems Corporation Form 8-K dated October 27, 2008

Exhibit 10.4  

	
 

	
 

	
 

	
CHANGE IN CONTROL AGREEMENT

	
 

	
 

	
MTS Systems Corporation

 14000 Technology Drive

 Eden Prairie, MN 55344-2290

 Telephone 952-937-4000

 Fax 952-937-4515

	
 

	
 

	 

          THIS
CHANGE IN CONTROL AGREEMENT is made and entered into by and between MTS Systems
Corporation, a Minnesota corporation with its principal offices at 14000
Technology Drive, Eden Prairie, MN 55344 (the “Company”) and ____________________ (the “Executive”),
residing at ____________________,
and shall be effective as of this 31st day of December, 2008

          WHEREAS,
the Company considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of
the Company and its shareholders; and

          WHEREAS,
the Executive has made and is expected to continue to make, due to the
Executive’s intimate knowledge of the business and affairs of the Company, its
policies, methods, personnel, and problems, a significant contribution to the
profitability, growth, and financial strength of the Company; and

          WHEREAS,
the Company, as a publicly held corporation, recognizes that the possibility of
a Change in Control may exist, and that such possibility and the uncertainty
and questions which it may raise among management may result in the departure
or distraction of the Executive in the performance of the Executive’s duties,
to the detriment of the Company and its shareholders; and

          WHEREAS,
it is in the best interests of the Company and its stockholders to reinforce
and encourage the continued attention and dedication of management personnel,
including the Executive, to their assigned duties without distraction and to
ensure the continued availability to the Company of the Executive in the event
of a Change in Control; and

          WHEREAS,
the Company and the Executive previously signed a Change in Control Agreement
and now desire to amend and restate that Agreement in its entirety to exempt it
from the requirements applicable to nonqualified deferred compensation plans
pursuant to Section 409A of the Code and regulations promulgated thereunder,
and this Agreement shall be construed and administered in a manner that is
consistent with and gives effect to such intention. 

          THEREFORE,
in consideration of the foregoing and other respective covenants and agreements
of the parties herein contained, the parties hereto agree as follows:

Change in Control Agreement

          1.          Term
of Agreement. This Agreement shall be effective from and after the date
hereof and shall continue in effect through December 31, 2009, and shall
automatically be extended for successive one-year periods thereafter unless the
Board of Directors of the Company (the “Board”) shall have approved, and the
Executive is notified in writing, prior to January 1, 2010 and each January 1
thereafter, that the term of this Agreement shall not be extended or further
extended; provided, however, that if a Change in Control shall
have occurred during the original or any extended term of this Agreement, this
Agreement shall continue in effect for a period of 24 months from the date of
the occurrence of a Change in Control or, if an event triggering the Company’s
severance payment obligations to the Executive under Section 4(d) has occurred
during such 24-month period, this Agreement shall continue in effect until the
benefits payable to the Executive hereunder have been paid in full. In the
event that more than one Change in Control shall occur during the original or
any extended term of this Agreement, the 24-month period shall follow the last
Change in Control. This Agreement shall neither impose nor confer any further
rights or obligations on the Company or the Executive on the day after the end
of the term of this Agreement. Expiration of the term of this Agreement of
itself and without subsequent action by the Company or the Executive shall not
end the employment relationship between the Company and the Executive.

          2.          Change
in Control. No benefits shall be payable hereunder unless there shall have
been a Change in Control. For purposes of this Agreement, a “Change in Control”
of the Company shall mean a change in control which would be required to be
reported in response to Item 6(e) on Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
whether or not the Company is then subject to such reporting requirement,
including, without limitation, if:

	
 

	
 

	
 

	
             (a)          Any
 “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
 Act), other than a trustee or other fiduciary holding securities under an
 employee benefit plan of the Company or any subsidiary of the Company,
 becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
 Act), directly or indirectly, of securities of the Company representing 30%
 or more of the combined voting power of the Company’s then outstanding
 securities; or 

	
 

	
 

	
 

	
             (b)          During
 any period of two consecutive years (not including any period ending prior to
 the effective date of this Agreement), the Incumbent Directors cease for any
 reason to constitute at least a majority of the Board of Directors. The term
 “Incumbent Directors” shall mean those individuals who are members of the
 Board of Directors on the effective date of this Agreement and any individual
 who subsequently becomes a member of the Board of Directors (other than a
 director designated by a person who has entered into agreement with the
 Company to effect a transaction contemplated by Section 2(c)) whose election
 or nomination for election by the Company’s shareholders was approved by a
 vote of at least a majority of the then Incumbent Directors; or

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Change in Control Agreement

	
 

	
 

	
 

	
             (c)          (i)
 The Company consummates a merger, consolidation, share exchange, division or
 other reorganization of the Company with any corporation or entity, other
 than an entity owned at least 80% by the Company, unless immediately after
 such transaction, the shareholders of the Company immediately prior to such
 transaction beneficially own, directly or indirectly 51% or more of the
 combined voting power of resulting entity’s outstanding voting securities as
 well as 51% or more of the Total Market Value of the resulting entity, or in
 the case of a division, 51% or more of the combined voting power of the
 outstanding voting securities of each entity resulting from the division as
 well as 51% or more of the Total Market Value of each such entity, in each
 case in substantially the same proportion as such shareholders owned shares
 of the Company prior to such transaction; (ii) the shareholders of the
 Company approve an agreement for the sale or disposition (in one transaction
 or a series of transactions) of assets of the Company, the total
 consideration of which is greater than 51% of the Total Market Value of the
 Company, or (iii) the Company adopts a plan of complete liquidation or
 winding-up of the Company. “Total Market Value” shall mean the aggregate
 market value of the Company’s or the resulting entity’s outstanding common
 stock (on a fully diluted basis) plus the aggregate market value of the
 Company’s or the resulting entity’s other outstanding equity securities as
 measured by the exchange rate of the transaction or by such other method as
 the Board determines where there is not a readily ascertainable exchange
 rate.

          3.          Termination
Following Change in Control. If a Change in Control shall have occurred
during the term of this Agreement, the Executive shall be entitled to the benefits
provided in subsection 4(d) unless such termination is (A) because of the
Executive’s death or Retirement, (B) by the Company for Cause or Disability, or
(C) by the Executive other than for Good Reason. The Company and the Executive
shall take all steps necessary (including with regard to any post-termination
services by the Executive) to ensure that any termination described in this
Section 3 constitutes a Separation from Service as defined in subsection 3(h).

	
 

	
 

	
 

	
             (a)          Disability.
 Termination by the Company or the Executive of the Executive’s employment
 based on “Disability” may occur in the event the Executive has incurred or is
 afflicted with any medically determinable physical or mental impairment that
 can be expected to result in death or can be expected to last for a
 continuous period of not less than 12 months, and as a result, has become
 eligible for and begun receiving income replacement benefits under the terms
 of the Company’s long-term disability plan or policy as may be in effect from
 time to time.

	
 

	
 

	
 

	
             (b)          Retirement.
 Termination by the Company or the Executive of the Executive’s employment
 based on “Retirement” shall mean termination on or after attaining age
 sixty-five (65). 

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Change
in Control Agreement

	
 

	
 

	
 

	
 

	
          (c)          Cause.
 For purposes of this Agreement, “Cause” shall mean:

	
 

	
 

	
 

	
 

	
 

	
               (i)          the
 willful and continued failure by the Executive (other than any such failure
 resulting from (1) the Executive’s incapacity due to physical or mental
 illness, (2) any such actual or anticipated failure after the issuance
 of a Notice of Termination by the Executive for Good Reason or (3) the
 Company’s active or passive obstruction of the performance of the Executive’s
 duties and responsibilities) to perform substantially the duties and
 responsibilities of the Executive’s position with the Company after a written
 demand for substantial performance is delivered to the Executive by the
 Board, which demand specifically identifies the manner in which the Board
 believes that the Executive has not substantially performed the duties or
 responsibilities; 

	
 

	
 

	
 

	
 

	
 

	
               (ii)         the
 conviction of the Executive by a court of competent jurisdiction for felony
 criminal conduct which, in the good faith opinion of the Company, would
 impair the Executive’s ability to perform his or her duties or impair the
 business reputation of the Company; or 

	
 

	
 

	
 

	
 

	
 

	
               (iii)        the
 willful engaging by the Executive in fraud or dishonesty that is demonstrably
 and materially injurious to the Company, monetarily or otherwise.

	
 

	
 

	
 

	
 

	
No act, or
 failure to act, on the Executive’s part shall be deemed “willful” unless
 committed, or omitted by the Executive in bad faith and without reasonable
 belief that the Executive’s act or failure to act was in the best interest of
 the Company and the Executive shall have either failed to correct, or failed
 to take all reasonable steps to correct, such act or failure to act within
 sixty (60) days from the Executive’s receipt of written notice from the
 Company demanding that the Executive take such action. The Executive shall
 not be terminated for Cause unless and until the Company shall have delivered
 to the Executive a copy of a resolution duly adopted by the affirmative vote
 of not less than three-quarters of the entire membership of the Board at a
 meeting of the Board called and held for such purpose (after reasonable
 notice to the Executive and an opportunity for the Executive, together with
 the Executive’s counsel, to be heard before the Board), finding that, in the
 good faith opinion of the Board, the Executive’s conduct was Cause and
 specifying the particulars thereof in detail.

	
 

	
 

	
 

	
 

	
          (d)          Good
 Reason. The Executive shall be entitled to terminate his or her
 employment for Good Reason; provided, however, that no such termination under
 this Section 3(d) shall be effective unless: (A) the Executive provides
 written notice to the Chair of the Board of Directors of the Company of the
 existence of a condition specified in paragraphs (i) through (v) below within
 90 days of the initial existence of the condition; (B)

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Change in Control Agreement

	
 

	
 

	
 

	
 

	
the Company
 does not remedy such condition within 30 days of the date of such notice; and
 (C) the Executive terminates employment within 90 days following the last day
 of the remedial period described above. For purposes of this Agreement, “Good
 Reason” shall mean, without the Executive’s express written consent, any of
 the following:

	
 

	
 

	
 

	
 

	
 

	
               (i)          the
 assignment to the Executive of any duties inconsistent in any respect with
 the Executive’s authority, duties or responsibilities with respect to the
 Executive’s position immediately prior to the Change in Control, or any
 action by the Company that results in a diminution in such authority, duties
 or responsibilities (whether or not occurring solely as a result of the
 Company’s ceasing to be a publicly traded entity);

	
 

	
 

	
 

	
 

	
 

	
               (ii)         a
 material reduction in the Executive’s base compensation in effect immediately
 prior to the Change in Control;

	
 

	
 

	
 

	
 

	
 

	
               (iii)        a
 material reduction in the budget over which the Executive retains authority; 

	
 

	
 

	
 

	
 

	
 

	
               (iv)        a
 material change in the geographic location at which the Executive must
 perform services for the Company; and

	
 

	
 

	
 

	
 

	
 

	
               iv)          Any
 material violation of this Agreement by the Company, including but not
 limited to any purported termination of the Executive’s employment that is
 not made pursuant to a Notice of Termination satisfying the requirements of
 this Agreement.

	
 

	
 

	
 

	
 

	
For purposes
 of this Section 3(d), any good faith determination of Good Reason made by the
 Executive shall be conclusive. The Executive’s mental or physical incapacity
 following the occurrence of an event described above in paragraphs (i)
 through (v) shall not affect the Executive’s ability to terminate employment
 for Good Reason and the Executive’s death following delivery of a Notice of
 Termination for Good Reason shall not affect the Executive’s estate’s
 entitlement to the payments and benefits provided hereunder upon a
 termination of employment for Good Reason.

	
 

	
 

	
 

	
 

	
          (e)          Notice
 of Termination. Any purported termination of the Executive’s employment
 by the Company or by the Executive shall be communicated by written Notice of
 Termination to the other party hereto in accordance with Section 9. For
 purposes of this Agreement, a “Notice of Termination” shall mean a notice
 that shall indicate the specific termination provision in this Agreement
 relied upon and shall set forth the facts and circum­stances claimed to
 provide a basis for termination of the Executive’s employment.

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Change in Control Agreement

	
 

	
 

	
 

	
 

	
          (f)          Date
 of Termination. For purposes of this Agreement, “Date of Termination”
 shall mean:

	
 

	
 

	
 

	
 

	
 

	
              (i)          If
 the Executive’s employment is terminated for Disability, 30 days after Notice
 of Termination is given (provided that the Executive shall have been absent
 from full-time performance of duties for at least three (3) months and shall
 not have returned to the full-time performance of the Executive’s duties
 during such 30 day period, in accordance with Section 3(a) hereof); 

	
 

	
 

	
 

	
 

	
 

	
              (ii)         If
 the Executive’s employment is terminated pursuant to subsections (b) or (c)
 above or for any other reason (other than Disability), the date specified in
 the Notice of Termination (which, in the case of a termination pursuant to
 subsection (b) above shall not be less than 10 days, and in the case of a
 termination pursuant to subsection (c) above shall not be less than 10 nor
 more than 30 days, respectively, from the date such Notice of Termination is
 given); and

	
 

	
 

	
 

	
 

	
 

	
              (iii)        Notwithstanding
 anything contained herein to the contrary, the date on which a Separation
 from Service takes place.

	
 

	
 

	
 

	
 

	
          (g)          Dispute
 of Termination. If, within 10 days after any Notice of Termination is
 given, the party receiving such Notice of Termination notifies the other
 party that a dispute exists concerning the termination, the Date of
 Termination shall be the date on which the dispute is finally determined,
 either by mutual written agreement of the parties, or by a final judgment,
 order or decree of a court of competent jurisdiction (which is not appealable
 or the time for appeal therefrom having expired and no appeal having been
 perfected); provided, that the Date of Termination shall be extended by a
 notice of dispute only if such notice is given in good faith and the party
 giving such notice pursues the resolution of such dispute with reasonable
 diligence. Notwithstanding the pendency of any such dispute, the Company
 shall continue to pay the Executive full compensation in effect when the
 notice giving rise to the dispute was given (including, but not limited to,
 base salary) and continue the Executive as a participant in all compensation,
 benefit and insurance plans in which the Executive was participating when the
 notice giving rise to the dispute was given, until the dispute is finally
 resolved in accordance with this subsection. Amounts paid under this
 subsection are in addition to all other amounts due under this Agreement and
 shall not be offset against or reduce any other amounts under this Agreement.

	
 

	
 

	
 

	
 

	
          (h)          Separation
 from Service. Separation from Service means the Executive’s termination
 of employment (as defined in this subsection 3(h)) from the Company and its
 Affiliates. A Executive incurs a termination of employment that constitutes a
 Separation 

6

Change in Control Agreement

	
 

	
 

	
 

	
from Service
 if the Executive and the Compensation Committee of the Board of Directors of
 the Company reasonably anticipate either than the Executive will not perform
 any additional services after a certain date for the Company and any
 Affiliate (the “Company Group”), or that the Executive’s level of bona fide
 services for the Company Group will permanently decrease to no more than 20%
 of the average level of bona fide services performed over the immediately
 preceding 36-month period. The Executive does not incur a Separation from
 Service if on military leave, sick leave, or other bona fide leave of absence
 if such leave does not exceed a period of 6 months, or if longer, the period
 for which a statute or contract provides the Executive with the right to
 reemployment with the Company Group, provided that there is a reasonable
 expectation that the Executive will return to perform further services. If an
 Executive’s leave exceeds 6 months but the Executive is not entitled to
 reemployment under a statute or contract, the Executive incurs a Separation
 from Service on the next day following the expiration of 6 months. Where a
 leave of absence is due to a Disability, the 6 month leave period described
 above shall be 12 months unless the leave is earlier terminated. The service
 of the Executive as a director of the board of any entity in the Company
 Group will not be considered in determining whether the Executive has
 incurred a Separation from Service as an employee of the Company Group. The
 Compensation Committee will determine whether a Executive has incurred a
 Separation from Service based on the facts and circumstances and in
 accordance with Treas. Reg. §1.409A-1(h)(1)(ii). For purposes of this
 subsection 3(h), “Affiliate” means an entity that would be considered with
 the Company a single employer under Sections 414(b) and (c) and 1563(a) of
 the Code, except that 50% shall be substituted for the 80% each place it
 appears in Sections 414(b) and (c) and 1563(a) of the Code.

          4.          Compensation
Upon Termination or During Disability. Following a Change in Control of the
Company, as defined in subsection 2(a), upon termination of the Executive’s
employment or during a period of Disability, the Executive shall be entitled to
the following benefits:

	
 

	
 

	
 

	
             (a)          During
 any period that the Executive fails to perform full-time duties with the
 Company as a result of a Disability, the Company shall pay the Executive, the
 Executive’s base salary as in effect at the commencement of any such period
 and the amount of any other form or type of compensation otherwise payable
 for such period if the Executive were not so disabled, until such time as the
 Executive is determined to be eligible for long term disability benefits in
 accordance with the Company’s insurance programs then in effect or the
 Executive is terminated for Disability.”

	
 

	
 

	
 

	
             (b)          If
 the Executive’s employment shall be terminated by the Company for Cause or by
 the Executive other than for Good Reason or Disability, the Company shall pay
 to the Executive his or her full base salary through the Date of Termination
 at the rate in effect at the time Notice of Termination is given and the
 Company shall have no further obligation to 

7

Change in Control Agreement

	
  

 	
  

 	
  

 
	
  

 	
 the Executive under this
 Agreement, except with respect to any benefits to which the Executive is entitled
 under any Company pension or welfare benefit plan, insurance program or as
 otherwise required by law.

 
	
  

 	
  

 	
  

 
	
  

 	
           (c)         If
 the Executive’s employment shall be terminated by the Company or by the
 Executive for Disability or Retire­ment, or by reason of death, the Company
 shall immediately commence payment to the Executive (or the Executive’s
 designated beneficiaries or estate, if no beneficiary is designated) of any
 and all benefits to which the Executive is entitled under the Company’s retirement
 and insurance programs then in effect.

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)         If
 the Executive’s employment shall be terminated (A) by the Company other than
 for Cause, Retirement, Disability or the Executive’s death or (B) by the
 Executive for Good Reason, then the Executive shall be entitled to the
 benefits provided below:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (i)          The
 Company shall pay the Executive, through the Date of Termination, the
 Executive’s base salary as in effect at the time the Notice of Termination is
 given and any other form or type of compensation otherwise payable for such
 period;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (ii)          In
 lieu of any further salary payments for periods subsequent to the Date of
 Termination, the Company shall pay a severance payment (the “Severance
 Payment”) equal to two times the Executive’s Annual Compensation as defined
 below. For purposes of this Section 4, “Annual Compensation” shall mean the
 Executive’s annual salary (regardless of whether all or any portion of such
 salary has been contributed to a deferred compensation plan), the average
 annual Management Variable Compensation (“MVC”) earned by the Executive
 during the three (3) fiscal years immediately preceding the Date of
 Termination or, if less, the actual number of fiscal years the Executive has
 participated in the MVC plan, and any other type or form of compensation paid
 to the Executive by the Company (or any corporation (an “Affiliate”)
 affiliated with the Company within the meaning of Section 1504 of the
 Internal Revenue Code of 1986 as it may be amended from time to time (the
 “Code”)) and included in the Executive’s gross income for federal tax
 purposes during the 12-month period ending immediately prior to the Date of
 Termination, but excluding: a) any amount actually paid to the Executive as a
 cash payment of the target bonus (regardless of whether all or any portion of
 such Company bonus was contributed to a deferred compensation plan); b)
 compensation income recognized as a result of the exercise of stock options
 or sale of the stock so acquired; and c) any payments actually or
 constructively received from a plan or arrangement of deferred compensation
 between Company and the Executive. All of the items included in Annual
 Compensation shall be those in effect on the Date of Termination and shall

 

8

	
  

 	
  

 	
  

 
	
 Change in Control Agreement

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 be calculated without giving effect to any reduction
 in such compensation that would constitute a breach of this Agreement. The
 Severance Payment shall be made in a single lump sum within 30 days
 after the Date of Termination;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (iii)          For
 the 18-month period after the Date of Termination (the “Benefit Continuation
 Period”), the Company shall arrange to provide, at its sole expense, the
 Executive with life, disability, accident and health insurance benefits
 substantially similar to those that the Executive is receiving or entitled to
 receive immediately prior to the Notice of Termination. The Executive shall
 be responsible for the payment of his or her portion of the premiums for such
 benefits at the same relative percentage of total premiums as the Executive
 paid prior to the Date of Termination. Following the end of the Benefit
 Continuation Period, the Executive shall be eligible for continued health
 coverage as required by Code Section 4980B or other applicable law (“COBRA
 Coverage”), as if the Executive’s employment with the Company had terminated
 as of the end of the Benefit Continuation Period, and the Company shall take
 such actions as are necessary to cause such COBRA Coverage not to be offset
 by the provision of benefits under this paragraph (iii) and to cause the
 period of COBRA Coverage to commence at the end of the Benefit Continuation
 Period. The cost of providing such benefits shall be in addition to (and shall
 not reduce) the Severance Payment. Benefits otherwise receivable by the
 Executive pursuant to this paragraph (iii) shall be reduced to the extent
 comparable benefits are actually received by the Executive during the Benefit
 Continuation Period, and any such benefits actually received by Executive
 shall be reported to the Company; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (iv)          The
 Company shall also pay to the Executive all legal fees and expenses incurred
 by the Executive as a result of such termination (including all such fees and
 expenses, if any, incurred in contesting or disputing any such termination or
 in seeking to obtain or enforce any right or benefit provided by this
 Agreement); provided that such payment for legal fees and expenses shall be
 made not later than the last day of the calendar year following the year in
 which the Executive incurred the fees and expenses and the Executive’s right
 to such payment may not be liquidated or exchanged for any other benefit.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e)         The
 Executive shall not be required to mitigate the amount of any payment
 provided for in this Section 4 by seeking other employment or otherwise, nor
 shall the amount of any payment or benefit provided for in this Section 4
 (except as expressly provided in Section 4(d)(iii)) be reduced by any
 compensation earned by the Executive as the result of employment by another
 employer or by retirement benefits after the Date of Termination, or
 otherwise.

 

9

	
  

 	
  

 
	
 Change in Control Agreement

 
	
  

 	
  

 
	
  

 	
           (f)          The
 Executive shall be entitled to receive all benefits payable to the Executive
 under the Company pension and welfare benefit plans or any successor of such
 plan and any other plan or agreement relating to retirement benefits which
 shall be in addition to, and not reduced by, any other amounts payable to the
 Executive under this Section 4.

 
	
  

 	
  

 
	
  

 	
           (g)          The
 Executive shall be entitled to exercise all rights and to receive all
 benefits accruing to the Executive under any and all Company stock purchase
 and stock option plans or programs, or any successor to any such plans or
 programs, which shall be in addition to, and not reduced by, any other
 amounts payable to the Executive under this Section 4.

 
	
  

 	
  

 
	
  

 	
           (h)          The
 Company will indemnify the Executive (and the Executive’s legal
 representative or other successors) to the fullest extent permitted
 (including payment of expenses in advance of final disposition of the
 proceeding) by the laws of the State of Minnesota, as in effect at the time of
 the subject act or omission, or the Articles of Incorporation and By-Laws of
 the Company as in effect at such time or on the date of this Agreement,
 whichever affords or afforded greater protection to the Executive; and the
 Executive shall be entitled to the protection of any insurance policies the
 Company may elect to maintain generally for the benefit of its directors and
 officers, against all costs, charges and expenses whatsoever incurred or
 sustained by the Executive or the Executive’s legal representatives in
 connection with any action, suit or proceeding to which the Executive (or the
 Executive’s legal representative or other successors) may be made a party by
 reason of the Executive’s being or having been a director, officer or
 employee of the Company or any of its subsidiaries or his or her serving or
 having served any other enterprise as a director, officer or employee at the
 request of the Company, provided that the Company shall cause to be
 maintained in effect for not less than six years from the date of a Change in
 Control (to the extent available) policies of directors’ and officers’
 liability insurance of at least the same coverage as those maintained by the
 Company on the date of this Agreement and containing terms and conditions
 which are no less advantageous than such policies. 

 
	
  

 	
  

 
	
           Notwithstanding
 anything herein to the contrary, if the Executive’s employment is governed by
 a separate written employment agreement that provides benefits upon a
 termination of employment, the aggregate of any payments or benefits payable
 under such employment agreement shall offset and reduce the aggregate of
 payments and benefits under this Agreement.

 
	
  

 	
  

 
	
 5.

 	
 Non-Compete and Confidentiality. 

 
	
  

 	
  

 
	
  

 	
           (a)          Noncompetition.
 Except as provided in subsection (c) below, the Executive agrees that, as a
 condition of receiving benefits under this Agreement, the Executive will not
 render services directly or indirectly to any competing organization,
 wherever located, for a 

 

 

10

	
  

 	
  

 
	
 Change in Control Agreement

 
	
  

 	
  

 
	
  

 	
 period of one year following the Date of
 Termination, in connection with the design, implementation, development,
 manufacture, marketing, sale, merchandising, leasing, servicing or promotion
 of any “Conflicting Product” which as used herein means any product, process,
 system or service of any person, firm, corporation, organization other than
 the Company, in existence or under development, which is the same as or
 similar to or competes with, or has a usage allied to, a product, process,
 system, or service produced, developed, or used by the Company. The Executive
 agrees that violation of this covenant not to compete with the Company shall
 result in immediate cessation of all benefits hereunder, other than insurance
 benefits, which the Executive may continue where permitted under federal and
 state law at his or her own expense.

 
	
  

 	
  

 
	
  

 	
           (b)          Confidentiality.
 The Executive further agrees and acknowledges the Executive’s existing
 obligation that at all times during and subsequent to his or her employment
 with MTS, the Executive will not divulge or appropriate to the Executive’s
 own use or the uses of others any secret or confidential information or
 knowledge pertaining to the business of MTS, or any of its subsidiaries,
 obtained during his or her employment by MTS or any of its subsidiaries.

 
	
  

 	
  

 
	
  

 	
           (c)          Waiver
 - Unfriendly Change in Control. Notwithstanding anything herein to the
 contrary: the restriction on competition under subsection (a) shall not apply
 if the Executive’s employment terminates following a Change in Control which
 has not been approved by a majority of the Incumbent Directors in office
 immediately prior to the Change in Control (an “Unfriendly Change in
 Control”). Furthermore, in such event, the Company waives any other
 restriction on the Executive’s employment and consents unconditionally to any
 employment the Executive may subsequently obtain.

 
	
  

 	
  

 
	
           6.       Limits
 on Payments and Benefits. In the event that the vesting, acceleration and
 payment of any equity awards or other compensation or benefits, together with
 all other payments and the value of any benefit received or to be received by
 the Executive would result in all or a portion of such payment being subject
 to excise tax under Section 4999 of the Code, then the amounts due under
 Section 4 that the Company shall pay to the Executive shall be either (A) the
 full payment or (B) such lesser amount determined by the Company in
 accordance with this Section 6 that would result in no portion of the payment
 being subject to excise tax under Section 4999 of the Code (the “Excise
 Tax”), whichever of the foregoing amounts, taking into account the applicable
 Federal, state, and local employment taxes, income taxes, and the Excise Tax,
 results in the receipt by the Executive, on an after-tax basis, of the
 greatest amount of the payment notwithstanding that all or some portion of
 the payment may be taxable under Section 4999 of the Code. In the event the
 amounts due under Section 4 are reduced, the amounts shall be reduced in the
 following order of priority: first, with respect to any amount that does not
 constitute the “deferral of compensation” under Section 409A of the Code and
 regulations promulgated thereunder, disregard the acceleration

 

11

Change in Control Agreement

in the time of payment and then disregard the
acceleration of vesting as a result of a Change in Control and second, with
respect to any amount that constitutes the “deferral of compensation” under
Section 409A of the Code and regulations promulgated thereunder, disregard the
acceleration in the time of payment and then disregard the acceleration of
vesting as a result of a Change in Control first with respect to Company funded
amounts and then the Executive’s deferrals, in each case only to the extent
necessary to satisfy (B) above. All determinations required to be made under
this Section 14 shall be made by a nationally recognized accounting firm that
is the Company’s outside auditor immediately prior to the event triggering the
payments that are subject to the Excise Tax (the “Accounting Firm”). The
Company shall cause the Accounting Firm to provide detailed supporting
calculations of its determinations to the Company and Executive. Notice must be
given to the Accounting Firm within fifteen (15) business days after an event
entitling Executive to an amount due under this Agreement. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. The
Accounting Firm’s determinations must be made with substantial authority
(within the meaning of Section 6662 of the Code). For the purposes of all
calculations under Section 280G of the Code and the application of this Section
6, all determination as to present value shall use 120 percent of the
applicable Federal rate (determined under Section 1274(d) of the Code)
compounded based on the nature of the payment, as in effect on the date of this
Agreement, but if not otherwise specified, the Company and Executive agree to
compound such rate on a semiannual basis. The determination by the Accounting
Firm shall be final and binding on the Company and the Executive.

          7.          Funding
of Payments. In order to assure the performance of the Company or its
successor of its obligations under this Agreement, the Company may deposit in a
so-called “rabbi” trust an amount equal to the maximum payment that will be due
the Executive under the terms hereof; provided, however, that the Company shall
deposit in trust the amount equal to the maximum payment due Executive immediately
upon an Unfriendly Change in Control. Under such written trust instrument, the
trustee shall be instructed to pay to the Executive (or the Executive’s legal
representative, as the case may be) the amount to which the Executive shall be
entitled under the terms hereof, and the balance, if any, of the trust not so
paid or reserved for payment shall be repaid to the Company. If the Company
deposits funds in trust, payment shall be made no later than the occurrence of
the Change in Control. The written instrument governing the trust shall be
irrevocable from and after such Change in Control and shall contain such
provisions protective of the Executive as are contained in similar trust
agreements approved by the Internal Revenue Service in published private letter
rulings (provided that the assets of the trust shall be reachable by creditors
of the Company as required by such rulings). The trustee shall be a national
bank selected by the Company with the consent of the Executive, with trust
powers and whose principal officers are located in the Minneapolis/St. Paul
metropolitan area. The trustee shall invest the assets of the trust in any
readily marketable securities of U.S. corporations (other than the Company, its
successor, or any affiliate of the Company or its successor). If and to the
extent there are not amounts in trust sufficient to pay

12

Change in Control Agreement

Executive under this Agreement, the Company shall
remain liable for any and all payments due to Executive.

          8.          Successors;
Binding Agreement.

          (a)         The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to 51% or more of the ­business and/or
assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to the compensation and benefits from the Company in the same amount and on the
same terms as the Executive would be entitled hereunder if the Executive
terminated his or her employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

          (b)         This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, successors, heirs, and designated
beneficiaries. If the Executive should die while any amount would still be
payable to the Executive hereunder if the Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive’s designated beneficiaries,
or, if there is no such designated beneficiary, to the Executive’s estate.

          9.          Notice.
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
last known residence address of the Executive or in the case of the Company, to
its principal office to the attention of each of the then directors of the
Company with a copy to its Secretary, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.

          10.        Non-application
of Section 409A of the Code. It is the intent of the Company and the
Executive that this Agreement satisfy those requirements of Section 409A of the
Code to constitute first a “short term deferral” and then a “separation pay
plan” to exempt the payments hereunder from the definition of a “nonqualified
deferred compensation plan” under Section 409A of the Code, and the Agreement
shall be so administered and interpreted in manner consistent with, and that
gives effect to, such intention. The Company shall have the authority, without
the consent of the Executive to amend such provision to maintain to maximum
extent practicable the intent that this Agreement remains exempt from the
requirements applicable to a “nonqualified deferred 

13

Change in Control Agreement

compensation plan” under Section 409A of the Code and
regulations and other guidance promulgated thereunder.

          11.          Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modifica­tion or discharge is agreed to in writing and signed by
the parties. No waiver by either party hereto at any time of any breach by the
other party to this Agreement of, or compliance with, any condition or
provision of this Agreement to be performed by such other-party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or similar time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construc­tion and performance of this Agreement shall be
governed by the laws of the State of Minnesota.

          12.          Validity.
The invalidity or unenforceability or 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.

          IN
WITNESS WHEREOF, the undersigned officer, on behalf of MTS Systems Corporation,
and the Executive have hereunto set their hands as of the date first above
written.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MTS SYSTEMS CORPORATION 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 	
  

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
   Its      Chair
 and CEO

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 EXECUTIVE:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 

14exhibit_spa.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 10.1

Execution Copy

STOCK PURCHASE AGREEMENT

                    STOCK PURCHASE AGREEMENT, dated as of October 22, 2008, by and among FLMG Holdings Corp., a Delaware corporation and subsidiary of Ticketmaster (the “Purchaser”), MM Investment Inc., a Delaware corporation (“MMI”) and WMG Church Street Limited, an English company (“WMG Church” and, together with MMI, the “Sellers”).

R E C I T A L S:

                    A.        The Sellers are the owners of shares of issued and outstanding Common Stock (as defined herein) of Front Line Management Group, Inc. (the “Company”).

                    B.        Upon the terms and conditions set forth in this Agreement, (i) the Purchaser wishes to purchase, and MMI wishes to sell, 771.91475 shares of Common Stock (the “MMI Shares”), which are beneficially and of record owned by MMI, and (ii) the Purchaser wishes to purchase, and WMG Church wishes to sell, 51,064.6365 shares of Common Stock (the “WMG Church Shares”), which are beneficially and of record owned by WMG Church, for an aggregate purchase price for the MMI Shares and the WMG Church Shares (collectively referred to herein as the “Purchased Shares”) of one hundred twenty-three million dollars ($123,000,000).

                    NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I 

DEFINITIONS

                    1.1       Definitions.

                               (a) As used in this Agreement the following terms have the meanings indicated:

                    “Affiliate” means any Person who is an “affiliate” as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

                    “Azoff Trust” means The Azoff Family Trust of 1997.

                    “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

                    “Claim” means any action, suit, proceeding, claim, audit, complaint, dispute, arbitration or investigation of any nature.

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                    “Closing” has the meaning set forth in Section 2.3(a).

                    “Closing Date” has the meaning set forth in Section 2.3(a).

                    “Code” means the Internal Revenue Code of 1986, as amended.

                    “Common Stock” means common stock of the Company, par value $0.01 per share.

                    “Company” has the meaning set forth in Recital A.

                    “Contract” means any contract, agreement, commitment, arrangement, lease, license, indenture and any other legally binding arrangement, whether oral or written.

                    “Contractual Obligation” means, as to any Person, any Contract to which such Person is a party or by which it or any of its property is bound.

                    “Determination” means a settlement, compromise or other agreement with the relevant Governmental Authority, whether contained in an Internal Revenue Service Form 870 or other comparable form, or otherwise, or such procedurally later event, such as a closing agreement with the relevant Governmental Authority, and agreement contained in Internal Revenue Service form 870-AD or other comparable form, an agreement that constitutes a “determination” under Section 1313(a)(4) of the Code, a deficiency notice with respect to which the period for filing a petition with the Tax Court or the relevant state, local or foreign tribunal has expired or a decision of any court of competent jurisdiction that is not subject to appeal or as to which the time for appeal has expired.

                    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.

                    “Governmental Authority” means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court.

                    “Indemnified Party” has the meaning set forth in Section 8.3(a).

                    “Indemnifying Party” has the meaning set forth in Section 8.3(a).

                    “Lien” means any mortgage, deed of trust, pledge, hypothecation, claim, right of first refusal, option, charge, title defect, easement, right of way, restriction, encroachment, survey defect, assignment, encumbrance, lien (statutory or other) or preference, priority, security interest of any kind or nature whatsoever (excluding preferred stock and equity related preferences).

3

                    “Loss” means any and all damages, losses, deficiencies, liabilities (whether accrued, contingent or otherwise), obligations, diminution in value, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder); provided, however, that for purposes hereof, a Loss shall be deemed to be net of insurance proceeds received by an Indemnified Party on or before the date of the final determination of Loss with respect to a Third Party Claim or pursuant to Section 8.4 with respect to a claim other than a Third Party Claim (in each case, without giving effect to this proviso).

                    “Material Adverse Effect” means, as to any Person, any changes or effects that, individually or in the aggregate, are materially adverse to the business, assets, liabilities, condition (financial or otherwise), prospects or results of operations of such Person or on the ability of such Person to consummate the transactions contemplated hereby.

                    “MMI” has the meaning set forth in the preamble.

                    “MMI Shares” has the meaning set forth in Recital B.

                    “MSG” has the meaning set forth in Section 6.7.

                    “Orders” has the meaning set forth in Section 3.2.

                    “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

                    “Purchase Price” has the meaning set forth in Section 2.2. 

                    “Purchased Shares” has the meaning set forth in Recital B. 

                    “Purchaser” has the meaning set forth in the preamble.

                    “Purchaser Indemnitees” has the meaning set forth in Section 8.1.

                    “Requirements of Law” means, as to any Person, any law, statute, treaty, rule, regulation, right, privilege, qualification, license or franchise or determination of an arbitrator or Governmental Authority or stock exchange, in each case applicable or binding upon such Person or any of its property or to which such Person or any of its property is subject or pertaining to any or all of the transactions contemplated or referred to herein.

                    “Second Amended and Restated Stockholders Agreement” means the Second Amended and Restated Stockholders Agreement, dated as of June 9, 2008, by and

4

among the Company, Purchaser, Ticketmaster (as assignee of IAC/InterActiveCorp), the Azoff Trust, MMI, WMG Church and Madison Square Garden, L.P.

                    “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder.

                    “Sellers” has the meaning set forth in the preamble.

                    “Seller Indemnitees” has the meaning set forth in Section 8.2.

                    “Stock Equivalents” means any security or obligation which is by its terms, whether directly or indirectly, convertible into or exchangeable or exercisable for shares of capital stock of the Company, and any option, warrant or other subscription or purchase right with respect to such capital stock.

                    “Subsidiaries” means, as of the relevant date of determination, with respect to any Person, a corporation or other Person of which 50% or more of the voting power of the outstanding voting equity securities or 50% or more of the outstanding economic equity interest is held, directly or indirectly, by such Person. Unless otherwise qualified, or the context otherwise requires, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.

                    “Third Party Claim” has the meaning set forth in Section 8.3(a).

                    “WMG Church” has the meaning set forth in the preamble.

                    “WMG Church Shares” has the meaning set forth in Recital B.

                    “WMG Purchase Agreement” has the meaning set forth in Section 7.5.

                              (b)       Unless the context clearly requires otherwise, the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. References herein to a specific Article, Section, Annex or Exhibit shall refer, respectively, to Articles, Sections, Annexes or Exhibits of this Agreement, unless the express context otherwise requires. Wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation” unless clearly indicated otherwise.

5

ARTICLE II

PURCHASE AND SALE OF THE PURCHASED SHARES

                    2.1      Purchase and Sale of the Purchased Shares.

                              (a)       Subject to the terms and conditions herein set forth, MMI agrees to sell to the Purchaser, and the Purchaser agrees to purchase from MMI, on the Closing Date, the MMI Shares.

                              (b)       Subject to the terms and conditions herein set forth, WMG Church agrees to sell to the Purchaser, and the Purchaser agrees to purchase from WMG Church, on the Closing Date, the WMG Church Shares.

                    2.2      Purchase Price.

                               The total purchase price for the Purchased Shares shall be one hundred twenty-three million dollars ($123,000,000) (the “Purchase Price”).

                    2.3     Closing.

                              (a)       The closing of the sale and purchase of the Purchased Shares (the “Closing”) shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019-6064, at 10:00 a.m., local time, on the second (2nd) Business Day following the date upon which the conditions set forth in Articles V and VI shall be satisfied or waived in accordance with this Agreement, or at such other time, place and date that the Sellers and the Purchaser may agree in writing (the “Closing Date”).

                              (b)       On the Closing Date:

                                        (i)       the Sellers shall deliver to the Purchaser, certificates representing the Purchased Shares, duly endorsed in blank or accompanied by stock powers duly executed in blank, in proper form for transfer;

                                        (ii)      the Sellers shall cause the Company to register the Purchased Shares in the stock register of the Company in the name of the Purchaser, and shall provide evidence reasonably satisfactory to the Purchaser of such registration; and

                                        (iii)     the Purchaser shall pay the Purchase Price by wire transfer of immediately available funds to the bank account designated by the Sellers to the Purchaser prior to the Closing Date.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

                    The Sellers, jointly and severally, represent and warrant to the Purchaser as follows:

                    3.1     Due Authority; Binding Effect.

                              (a)       MMI is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. MMI has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

                              (b)       WMG Church is a company duly organized, validly existing and in good standing under the laws of England and Wales. WMG Church has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

                              (c)       This Agreement has been duly executed and delivered by MMI and WMG Church. This Agreement constitutes, and each of the other agreements, instruments and documents of MMI and WMG Church contemplated hereby will constitute when executed and delivered by MMI and WMG Church, as applicable, the legal, valid and binding obligations of MMI and WMG Church, as applicable, enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity).

                    3.2     Non-Contravention. The execution, delivery and performance by each Seller of this Agreement and the transactions contemplated hereby (a) have been duly authorized by all necessary corporate or equivalent action of such Seller, (b) do not contravene the terms of the organizational documents of such Seller, (c) do not violate, conflict with or result in any breach, default or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of), or the creation of any Lien under, any Contractual Obligation of such Seller or any Requirement of Law applicable to such Seller (except where such breach, default or contravention would not reasonably be expected to have, in each case, individually or in the aggregate, a Material Adverse Effect on such Seller) and (d) do not violate any judgment, injunction, writ, award, decree or order of any nature of any Governmental Authority (collectively, “Orders”) against, or binding upon, such Seller.

                    3.3     Governmental Authorization; Third Party Consents. Except for the reporting requirements under the Exchange Act, no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, and no lapse of a waiting period under any Requirement of Law, is necessary or required in connection with the execution, delivery

7

or performance by, or enforcement against, each Seller of this Agreement or the transactions contemplated hereby.

                    3.4     Title to Purchased Shares.

                              (a)       MMI owns beneficially and of record, free and clear of any Liens (other than those arising under the Second Amended and Restated Stockholders Agreement), the MMI Shares. Upon MMI’s delivery of the MMI Shares and payment therefor pursuant hereto, good and valid title to such MMI Shares, free and clear of all Liens, other than restrictions on transfer under applicable state and federal securities laws or arising under the Second Amended and Restated Stockholders Agreement, will pass to the Purchaser.

                              (b)       WMG Church owns beneficially and of record, free and clear of any Liens (other than those arising under the Second Amended and Restated Stockholders Agreement), the WMG Church Shares. Upon WMG Church’s delivery of the WMG Church Shares and payment therefor pursuant hereto, good and valid title to such WMG Church Shares, free and clear of all Liens, other than restrictions on transfer under applicable state and federal securities laws or arising under the Second Amended and Restated Stockholders Agreement, will pass to the Purchaser.

                              (c)       Except under the Second Amended and Restated Stockholders Agreement, the Sellers (i) are not a party to any, and have not granted to any other Person any, and there are no, options, warrants, conversion privileges, subscription or purchase rights or other rights outstanding as of the date of this Agreement to purchase or otherwise acquire the Purchased Shares, any Stock Equivalents or any other securities of the Company and (ii) are not a party to any voting agreement, voting trust, proxy or other agreement or understanding with respect to the voting of any of the Purchased Shares.

                    3.5     Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Sellers in connection with the transactions contemplated hereby based on any Contractual Obligation of the Sellers or any action taken by the Sellers.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                    The Purchaser represents and warrants to the Sellers as follows:

                    4.1     Existence and Power. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Purchaser has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

                     4.2    Authorization; No Contravention. The execution, delivery and performance by the Purchaser of this Agreement and the transactions contemplated

8

hereby (a) have been duly authorized by all necessary corporate action of the Purchaser, (b) do not contravene the terms of the certificate of incorporation or by-laws of the Purchaser, (c) do not violate, conflict with or result in any breach or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of), or the creation of any Lien under, any Contractual Obligation of the Purchaser or any Requirement of Law applicable to the Purchaser (except where such breach, default or contravention would not reasonably be expected to have, in each case, individually or in the aggregate, a Material Adverse Effect on the Purchaser), and (d) do not violate any Orders against, or binding upon, the Purchaser.

                    4.3     Binding Effect. This Agreement has been duly executed and delivered by the Purchaser, and this Agreement constitutes, and each of the other agreements, instruments and documents of the Purchaser contemplated hereby will constitute when executed by the Purchaser, the legal, valid and binding obligations of the Purchaser, enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity).

                    4.4     Governmental Authorization; Third Party Consents. Except for the reporting requirements under the Exchange Act and the requirements of Nasdaq applicable to the Purchaser’s parent corporation, no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, and no lapse of a waiting period under any Requirement of Law, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Purchaser of this Agreement or the transactions contemplated hereby.

                    4.5     Purchase for Own Account.

                              (a)       The Purchaser is an “accredited investor” as that term is defined in Rule 501 of Regulation D under the Securities Act.

                              (b)       The Purchaser is acquiring the Purchased Shares for investment and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the Purchased Shares. The Purchaser agrees that the Purchased Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any applicable state securities laws, except pursuant to an exemption from such registration under such act and such laws and in compliance with the Second Amended and Restated Stockholders Agreement.

                              (c)       The Purchaser is able to bear the economic risk of holding the Purchased Shares for an indefinite period, and has knowledge and experience in financial and business matters such that it is capable of evaluating the risks of an investment in the Purchased Shares.

9

                    4.6     Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Purchaser in connection with the transactions contemplated hereby based on any Contractual Obligation with the Purchaser or any action taken by the Purchaser.

ARTICLE V

CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO CLOSE

                    The obligation of the Purchaser to purchase the Purchased Shares and to pay the Purchase Price at the Closing shall be subject to the satisfaction as determined by, or waiver by, the Purchaser of the following conditions on or before the Closing Date:

                    5.1     Representations and Warranties. The representations and warranties of the Sellers contained in Article III shall be true and correct in all material respects (except (x) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date and (y) for any such representations and warranties which are qualified by their terms by a reference to materiality or Material Adverse Effect, which representation as so qualified shall be true and correct in all respects) at and on the Closing Date as if made at and on such date.

                    5.2     Compliance with this Agreement. Each of the Sellers shall have performed and complied in all material respects with all of its agreements set forth herein that are required to be performed by such Seller on or before the Closing Date.

                    5.3     Officer’s Certificate. The Purchaser shall have received a certificate from each of the Sellers in form and substance reasonably satisfactory to the Purchaser, signed by an appropriate officer of such Seller, dated the Closing Date, certifying as to the matters set forth in Sections 5.1 and 5.2.

                    5.4     Purchased Shares. The Sellers shall have delivered to the Purchaser certificates representing the Purchased Shares, together with stock powers duly executed in blank.

                    5.5     Stockholders Agreement. The Sellers shall have (i) transferred their respective rights to designate the MMI Designees (as defined in the Second Amended and Restated Stockholders Agreement) to the Purchaser pursuant to Section 2.1 of the Second Amended and Restated Stockholders Agreement and (ii) transferred their respective rights and obligations under Section 3.4 of the Second Amended and Restated Stockholders Agreement to the Purchaser.

                    5.6     No Material Judgment or Order. There shall not be on the Closing Date any Order or any condition imposed under any Requirement of Law which would (a) prohibit or restrict (i) the purchase of the Purchased Shares or (ii) the consummation of the transactions contemplated by this Agreement, (b) subject the Purchaser to any material penalty or onerous condition under or pursuant to any Requirement of Law if the Purchased Shares were to be purchased hereunder or (c) restrict the operation of the

10

business of the Company as conducted on the date hereof in a manner that would have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.

ARTICLE VI

CONDITIONS TO THE OBLIGATION OF THE SELLERS TO CLOSE

                    The obligation of the Sellers to sell the Purchased Shares at the Closing shall be subject to the satisfaction as determined by, or waiver by, the Sellers of the following conditions on or before the Closing Date:

                    6.1     Representations and Warranties. The representations and warranties of the Purchaser contained in Article IV shall be true and correct in all material respects (except (x) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date and (y) for any such representations and warranties which are qualified by their terms by a reference to materiality or Material Adverse Effect, which representation as so qualified shall be true and correct in all respects) at and on the Closing Date as if made at and on such date.

                    6.2     Compliance with this Agreement. The Purchaser shall have performed and complied in all material respects with all of its agreements set forth herein that are required to be performed by the Purchaser on or before the Closing Date.

                    6.3     Officer’s Certificate. The Sellers shall have received a certificate from the Purchaser, in form and substance reasonably satisfactory to the Sellers, dated the Closing Date, and signed by an appropriate officer of the Purchaser, certifying as to the matters set forth in Sections 6.1 and 6.2.

                    6.4     Payment of the Purchase Price. The Purchaser shall have paid the Sellers the Purchase Price.

                    6.5     Stockholders Agreement. The Purchaser shall have assumed all of the obligations of the Sellers under Section 3.4 of the Second Amended and Restated Stockholders Agreement.

                    6.6     No Material Judgment or Order. There shall not be on the Closing Date any Order or any condition imposed under any Requirement of Law which would, (a) prohibit or restrict (i) the sale of the Purchased Shares or (ii) the consummation of the transactions contemplated by this Agreement or (b) subject a Seller to any material penalty or onerous condition under or pursuant to any Requirement of Law if the Purchased Shares were to be sold hereunder.

                    6.7     MSG Consents. Madison Square Garden, L.P. (“MSG”) shall have entered into an amendment to the MSG Stock Purchase Agreement with the Sellers and the Purchaser providing for the amendment of Sections 8.2, 8.8 and 8.9 of the MSG Purchase Agreement to remove the Sellers and their Affiliates from the operation of those provisions; provided, however, that immediately after such amendments MSG will have

11

the same rights to payments from, and other rights with respect to, Ticketmaster and its Affiliates that it currently has from and with respect to Ticketmaster, the Sellers and their Affiliates, taken as a whole, pursuant to such sections and Section 7.9 of the WMG Purchase Agreement (as defined below) (the “MSG Amendment”). In the event that, notwithstanding the parties’ cooperation pursuant to Section 7.1, MSG shall not have entered into the MSG Amendment and all other conditions to the Sellers’ obligations shall have been satisfied, (x) the condition set forth in this Section 6.7 shall not be a condition to Closing, (y) the Purchaser shall reimburse the Sellers upon request for all reasonable and documented costs and expenses incurred by them by reason of their continuing obligations under Sections 8.8 and 8.9 of the MSG Stock Purchase Agreement and (z) the Sellers shall cooperate reasonably with the Purchaser and MSG to facilitate the continuing operation of such provisions until such time, if any, as the MSG Amendment becomes effective.

ARTICLE VII 

CERTAIN COVENANTS

                    7.1      Commercially Reasonable Efforts; Cooperation.

                    (a)       Subject to the terms and conditions herein provided, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Requirements of Law to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement. Without limiting the foregoing, each of the Sellers and the Purchaser shall use its respective commercially reasonable efforts to make promptly any required submissions under any applicable Requirements of Law that either Seller or the Purchaser determines is required to be made, in each case, with respect to the transactions contemplated hereby and to respond as promptly as practicable to all inquiries received from any Governmental Authority with respect to such submissions for additional information or documentation.

                    (b)       The Sellers, on the one hand, and the Purchaser, on the other hand, shall cooperate reasonably and take all actions reasonably requested by the other party to cause the conditions to such other party’s obligations set forth in Section 5.5 (in the case of the Purchaser) and Section 6.5 (in the case of the Sellers) to be satisfied. The Sellers and Purchaser agree to cooperate reasonably with each other and MSG regarding the entry into of the MSG Amendment. The Sellers shall take all actions reasonably requested by the Purchaser to ensure that the Purchaser’s designees are appointed to the Board of Directors of the Company pursuant to the transfer of rights to the Purchaser contemplated by Section 5.5(i), including causing the current MMI Designees to resign from such Board of Directors effective as of the effective time of the purchase and sale of the Purchased Shares hereunder.

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                    7.2     Expenses; Transfer Taxes.

                              (a)       Except as expressly set forth in this Agreement, whether or not the Closing occurs, all costs and expenses incurred in connection with this Agreement or any related document or agreement and the transactions contemplated hereby and thereby shall be paid by the party incurring such expense.

                              (b)       All transfer, documentary, sales, use, registration and other such taxes (including all applicable real estate transfer or gains taxes) and related fees (including any penalties, interest and additions to tax) incurred in connection with this Agreement and the transactions contemplated hereby shall be the responsibility of the Sellers, and the parties shall cooperate in timely making all filings, returns, reports and forms as may be required to comply with the provisions of such tax laws.

                    7.3     Publicity. From the date of this Agreement, no press release or public announcement concerning this Agreement or the transactions contemplated hereby will be issued by any party hereto or any of its Affiliates, without the prior consent of the other parties hereto, which consent shall not be unreasonably withheld, except as such release or announcement may be required by any Requirements of Law applicable to such party or any of its Affiliates or the rules of any securities exchange on which the securities of such Seller or any of its Affiliates are listed or traded, in which case, the party required to make the release or announcement will, to the extent practicable, allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

                    7.4     Permitted Transferee; Other Company Matters. (a) For purposes of the definition of “Permitted Transferee” in Section 1.1 of the Second Amended and Restated Stockholders Agreement, each of the parties hereto consents to the designation of the Purchaser as a Permitted Transferee of the Sellers with respect to the transactions contemplated hereby.

                              (b)       The Purchaser agrees that it shall not vote in favor of any proposed amendment to the indemnification provisions contained in the Certificate of Incorporation of the Company as applied to any MMI Designee or former MMI Designee as such provisions relate to actions or omissions prior to the effective time of the purchase and sale of the Purchased Shares hereunder.

                    7.5     Indemnification Claims Made Under FL Purchase Agreement. The parties agree that the provisions of Section 7.9 under that certain Stock Purchase Agreement, dated as of July 24, 2007, by and among IAC/InterActiveCorp, FLMG LLC, a Delaware limited liability company, and MMI (the “WMG Purchase Agreement”) shall be of no further force and effect from and after the effective time of the purchase and sale of the Purchased Shares hereunder.

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ARTICLE VIII

INDEMNIFICATION

                    8.1     Indemnification by the Seller. The Sellers shall jointly and severally indemnify the Purchaser and its Affiliates, and each of their respective stockholders, partners, members, officers, directors, employees, agents and representatives (collectively, the “Purchaser Indemnitees”) against and hold them harmless from any and all Losses suffered or incurred by any such Purchaser Indemnitee arising from, in connection with, relating to or otherwise in respect of, (i) the failure to be true of any representation or warranty of the Sellers contained in Article III (it being agreed and acknowledged by the parties that only for purposes of calculating Losses of the Purchaser Indemnitees in respect of a claim for indemnification pursuant to this Section 8.1, the representations and warranties of the Sellers contained in Article III shall not be deemed qualified by any references herein to materiality generally, or whether or not any such breach results or may result in a Material Adverse Effect; it being the intention of the parties hereto that the Purchaser Indemnitees shall be indemnified and held harmless from and against any and all Losses suffered or incurred by them resulting from, arising out of, based on or relating to the failure of any such representation or warranty to be true, correct and complete in any respect, determined in each case without regard to any qualification as to materiality or Material Adverse Effect), or (iii) any breach of any covenant or agreement of the Seller in this Agreement.

                    8.2      Indemnification by the Purchaser. The Purchaser shall (and shall cause any successor in interest to the Purchased Shares to) indemnify the Sellers and their respective Affiliates, and each of their respective stockholders, partners, members, officers, directors, employees, agents and representatives (collectively, the “Seller Indemnitees”) against and hold them harmless from any Losses suffered or incurred by the Seller Indemnitees arising from, in connection with, relating to or otherwise in respect of, (i) any Third Party Claim against such Seller Indemnitee based upon the fact that any Seller was a stockholder of the Company (other than Claims by any Governmental Authority and any Claims made under the MSG Purchase Agreement (as modified by the MSG Amendment, or if such MSG Amendment has not been entered into, subject to clause (y) of the last sentence of Section 6.7)), (ii) the failure to be true of any representation or warranty of the Purchaser in this Agreement (it being agreed and acknowledged by the parties that only for purposes of calculating Losses of the Seller Indemnitees in respect of a claim for indemnification pursuant to this Section 8.2, the representations and warranties of the Purchaser contained in Article IV shall not be deemed qualified by any references herein to materiality generally, or whether or not any such breach results or may result in a Material Adverse Effect; it being the intention of the parties hereto that the Seller Indemnitees shall be indemnified and held harmless from and against any and all Losses suffered or incurred by them resulting from, arising out of, based on or relating to the failure of any such representation or warranty to be true, correct and complete in any respect, determined in each case without regard to any qualification as to materiality or Material Adverse Effect), or (iii) any breach of any covenant or agreement of the Purchaser in this Agreement.

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                    8.3     Procedures Relating to Indemnification.

                              (a)       In order for any indemnified party (“Indemnified Party”) specified in Section 8.1 or 8.2, as applicable, to be entitled to any indemnification provided for under Section 8.1 or 8.2, respectively, in respect of, arising out of or involving a Claim made by any Person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party must notify the indemnifying party (the “Indemnifying Party”) in writing, and in reasonable detail, of the Third Party Claim promptly after receipt by such Indemnified Party of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been materially and actually prejudiced as a result of such failure. Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim.

                              (b)       If a Third Party Claim is made against an Indemnified Party, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges its obligation to indemnify the Indemnified Party therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided that such counsel is not objected to by the Indemnified Party in its reasonable discretion. Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof (except in the case of a conflict of interest, as described below). If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense (except that if, in the reasonable judgment of an Indemnified Party, a conflict of interest exists between the Indemnifying Party and the Indemnified Party, the Indemnified Party may employ its own counsel, separate from the counsel employed by the Indemnifying Party, and may control its defense to the extent deemed necessary by the Indemnified Party). The Indemnifying Party shall be liable, in respect of any Third Party Claim, for the fees and expenses of one counsel for all the Indemnified Parties for any period during which the Indemnifying Party is not assuming the defense thereof or during a conflict of interest (as described above).

                              (c)       If the Indemnifying Party so elects to assume the defense of any Third Party Claim, all of the Indemnified Parties shall cooperate with the Indemnifying Party in the defense or prosecution thereof. In any event, the Indemnified Party and its counsel shall cooperate with the Indemnifying Party and its counsel and shall not assert any position in any proceeding inconsistent with that asserted by the Indemnifying Party; provided, however, that the foregoing shall not prevent the Indemnified Party from taking the position that it is entitled to indemnification hereunder. All out-of-pocket costs and expenses incurred in connection with an Indemnified Party’s cooperation shall be borne by the Indemnifying Party. Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying

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Party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld). If the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third Party Claim which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third Party Claim, which releases the Indemnifying Party completely in connection with such Third Party Claim and which would not otherwise adversely affect the Indemnified Party or require any relief other than monetary damages.

                              (d)       Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnified Party in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party. The indemnification required by Sections 8.1 and 8.2 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Losses are incurred. All claims under Sections 8.1 and 8.2 that are Third Party Claims shall be governed by Section 8.3.

                              (e)       The indemnification provisions of this Article VIII (i) shall apply without regard to, and shall not be subject to, any limitation by reason of set-off, limitation or otherwise and (ii) are intended to be comprehensive and not to be limited by any Requirements of Law concerning prominence of language or waiver of any legal right under any law. The obligations of the parties set forth in this Article VIII shall be conditioned upon the Closing having occurred.

                    8.4     Other Claims. If any Indemnified Party should have a claim against any Indemnifying Party under Section 8.1 or 8.2, as applicable, that does not involve a Third Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party under Section 8.1 or 8.2, as applicable, except to the extent that the Indemnifying Party demonstrates that it has been materially and actually prejudiced as a result of such failure. If the Indemnifying Party does not notify the Indemnified Party within 30 days following its receipt of such notice that the Indemnifying Party disputes its liability to the Indemnified Party under Section 8.1 or 8.2, as applicable, such claim specified by the Indemnified Party in such notice shall be conclusively deemed a liability of the Indemnifying Party under Section 8.1 or 8.2, as applicable, and the Indemnifying Party shall pay the amount of such liability to the Indemnified Party on demand or, in the case of any notice in which the amount of the

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Losses (or any portion thereof) is estimated, on such later date when the amount of such Losses (or such portion thereof) becomes finally determined. If the Indemnifying Party has timely disputed its liability with respect to such claim, as provided above, the Indemnifying Party and the Indemnified Party shall resolve such dispute as follows: (i) first, the parties shall negotiate in good faith for a period of up to 21 days to resolve such dispute, then (ii) if the Indemnifying Party and the Indemnified Party are unable to reach an agreement, such dispute shall be resolved in accordance with Section 10.7.

                    8.5     Limit on Indemnification. Notwithstanding anything to the contrary contained in this Agreement, the maximum amount of the obligations of the Sellers under Section 8.1 and the Purchaser’s obligation under Section 8.2 in the aggregate shall, in each case, be an amount equal to the Purchase Price.

                    8.6     Exclusive Remedy. Other than in the case of fraud, the right of the Indemnified Parties to assert claims for indemnification and to receive indemnification pursuant to this Article VIII shall, after the Closing, be the Indemnified Parties’ sole and exclusive remedy for the matters described in Sections 8.1, 8.2 and 8.3.

                    8.7     Tax Treatment. Except to the extent otherwise required pursuant to a Determination or a change in Requirements of Law, the parties agree to treat any indemnity payment made under Section 8.1 or 8.2 as an adjustment to the consideration paid by the Purchaser in connection with the purchase of the Purchased Shares for all federal, state, local and foreign tax purposes.

                    8.8     No Special Damages. In no event shall any Indemnifying Party be liable to any Indemnified Party for any consequential, indirect, incidental or other similar damages, including lost profits, lost revenues, business interruption, cost of capital or loss of business reputation or opportunity, or punitive or special damages for any breach or default under, or any act or omission arising out of or in any way relating to, this Agreement or the transactions contemplated hereby (other than indemnification for amounts paid or payable to third parties in respect of any Third Party Claim for which indemnification hereunder is otherwise required).

ARTICLE IX

TERMINATION

                    9.1     Termination.

                              (a)      This Agreement may be terminated prior to the Closing as follows:

                                        (i)       at any time on or prior to the Closing Date, by mutual written consent of the Sellers and the Purchaser;

                                        (ii)      at the election of the Sellers or the Purchaser by written notice to the other party hereto, if the Closing shall not have occurred by the close of business on October 31, 2008, unless such date is extended by the mutual written

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consent of the Sellers and the Purchaser; provided, however, that the right to terminate this Agreement under this Section 9.1(a)(ii) shall not be available to any party whose breach of any representation, warranty, covenant or agreement under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;

                                        (iii)     at the election of the Sellers, if there has been a material breach of any representation, warranty, covenant or agreement on the part of the Purchaser contained in this Agreement, which breach has not been cured within five days of notice to the Purchaser of such breach; or

                                        (iv)     at the election of the Purchaser, if there has been a material breach of any representation, warranty, covenant or agreement on the part of any Seller contained in this Agreement, which breach has not been cured within five days notice to the applicable Seller of such breach.

                              (b)     If this Agreement so terminates, it shall become null and void and have no further force or effect, except as provided in Section 9.2.

                    9.2     Survival. If this Agreement is terminated and the transactions contemplated hereby are not consummated as described above, this Agreement shall become void and of no further force and effect, except for the provisions of Article I, this Section 9.2 and Article X; provided, however, that (a) none of the parties hereto shall have any liability in respect of a termination of this Agreement pursuant to Section 9.1(a)(i) or (ii), and (b) nothing shall relieve any of the parties from liability for actual damages resulting from a willful breach of any representation, warranty, covenant or agreement which gave rise to a termination of this Agreement pursuant to Section 9.1(a)(iii) or (iv); and provided, further, that none of the parties hereto shall have any liability for speculative, unforeseeable, punitive, exemplary or consequential damages or lost profits resulting from any legal action relating to any termination of this Agreement.

     ARTICLE X

MISCELLANEOUS

                    10.1     Survival of Representations, Warranties and Covenants. Except as set forth below, all of the representations and warranties made herein shall survive the execution and delivery of this Agreement indefinitely. The covenants shall survive the Closing until 90 days after the expiration of the applicable statute of limitations, after which no claim for indemnification under this Agreement may be asserted in respect thereof.

                    10.2     Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery:

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                              (a)      if to either Seller:

                                        c/o Warner Music Inc.

                                        75 Rockefeller Plaza 

                                        New York, New York 10019

                                        Telecopier:  (212) 275-3601

                                        Attention:  General Counsel

                                        with a copy (which shall not constitute notice) to:

                                        Paul, Weiss, Rifkind, Wharton & Garrison LLP

                                        1285 Avenue of the Americas New York, 

                                        New York 10019-6064 

                                        Telecopier:  (212) 757-3990 

                                        Attention:  Robert B. Schumer 

                                                        Yvonne Y. F. Chan

                              (b)     if to the Purchaser:

                                        c/o Ticketmaster 

                                        9800 West Sunset Blvd.

                                        West Hollywood, California 90069

                                        Telecopier:  (310) 360-3373

                                        Attention:  General Counsel

                                        with a copy (which shall not constitute notice) to:

                                        Wachtell, Lipton, Rosen & Katz

                                        51 West 52nd Street

                                        New York, New York 10019

                                        Telecopier:  (212) 403-2000

                                        Attention:  Pam Seymon

All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. Any party may by notice given in accordance with this Section 10.2 designate another address or Person for receipt of notices hereunder.

                    10.3     Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. The Purchaser may assign any of its rights under this Agreement to any of its Affiliates; provided, that the Purchaser shall nevertheless remain liable for its obligations under this Agreement notwithstanding any such transfer or assignment. The Sellers may not assign any of their rights under this Agreement without the written consent of the Purchaser. Except as provided in Article VIII, no Person other

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than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

                    10.4     Amendment and Waiver.

                              (a)       No failure or delay on the part of the Sellers or the Purchaser 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.

                              (b)       Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Sellers or the Purchaser from the terms of any provision of this Agreement, shall be effective (i) only if it is made or given in writing and signed by the Sellers and the Purchaser and (ii) only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Sellers or the Purchaser in any case shall entitle the Sellers or the Purchaser, respectively, to any other or further notice or demand in similar or other circumstances.

                    10.5     Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

                    10.6     Specific Performance. The parties to this Agreement agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties to this Agreement hereby agree that each party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, in addition to any other remedy to which such party may be entitled at law or in equity.

                    10.7     GOVERNING LAW; CONSENT TO EXCLUSIVE JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION. The parties hereto irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in New York, New York over any suit, action or proceeding arising out of or relating to this Agreement. To the fullest extent they may effectively do so under applicable law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

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                    10.8     WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.8.

                    10.9     Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

                    10.10   Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

                    10.11   Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[remainder of page intentionally left blank]

 
	                    IN WITNESS WHEREOF, the undersigned have executed, or have caused  
	to be executed, this Agreement in the United States of America on the date first written  
	above.  	  	  
	  
	  
	  	  	FLMG HOLDINGS CORP.  
	  
	  
	  
	  	  	By:  /s/ Brian M. Regan                              
	  	  	         Name: Brian M. Regan  
	  	  	         Title: EVP & CFO  
	  
	  	  	MM INVESTMENT INC.  
	  
	  
	  
	  	  	By:  /s/ Paul Robinson                                 
	  	  	         Name: Paul Robinson  
	  	  	         Title: VP and Secretary  
	  
	In the presence of:  	  	WMG CHURCH STREET LIMITED  
	  
	  
	  /s/ Trent N. Tappe            	  	By:  /s/ Paul Robinson                                 
	Name of Witness: Trent N. Tappe  	  	         Name: Paul Robinson  
	Place of Signature:  New York, New York	  	         Title: Director  
	                               U.S.A.

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