EXHIBIT 2
to SCHEDULE 13D
EXECUTION COPY
PENTON MEDIA, INC.
AMENDED AND RESTATED
SERIES B CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
DATED AS OF
MARCH 18, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS..........................................................1
1.1 Definitions; Interpretation..................................1
ARTICLE II ISSUANCE AND SALE OF PREFERRED STOCK AND WARRANTS..................10
2.1 Number of Shares, Warrants and Purchase Price...............10
ARTICLE III CLOSING; CLOSING DELIVERIES.......................................11
3.1 Initial Closing.............................................11
3.2 Final Closing...............................................11
3.3 Payment for and Delivery of Preferred Shares and Warrants...11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................12
4.1 Existence; Qualification; Subsidiaries......................12
4.2 Authorization, Noncontravention and Enforceability;
Issuance of Shares..........................................12
4.3 Capitalization..............................................13
4.4 Private Sale; Voting Agreements.............................13
4.5 SEC Reports; Financial Statements...........................14
4.6 Absence of Certain Changes..................................15
4.7 Litigation..................................................16
4.8 Licenses, Compliance with Law, Other Agreements, Etc........16
4.9 Third-Party Approvals.......................................16
4.10 Disclosure..................................................17
4.11 Tangible Assets.............................................17
4.12 Inventory...................................................17
4.13 Owned Real Property.........................................17
4.14 Real Property Leases........................................17
4.15 Agreements..................................................17
4.16 Intellectual Property.......................................18
4.17 Employees...................................................18
4.18 ERISA; Employee Benefits....................................18
4.19 Environment, Health and Safety..............................19
4.20 Transactions With Affiliates................................19
4.21 Taxes.......................................................19
4.22 Other Investors.............................................20
4.23 Seniority...................................................20
4.24 Investment Company..........................................20
4.25 Certain Fees................................................20
4.26 Form S-3 Eligibility........................................20
4.27 Listing and Maintenance Requirements Compliance.............20
4.28 Registration Rights.........................................20
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS....................21
5.1 Authorization and Enforceability............................21
5.2 Government Approvals........................................21
ARTICLE VI COMPLIANCE WITH SECURITIES LAWS....................................21
6.1 Investment Intent of the Purchasers.........................21
6.2 Status of Series B Shares and Warrants......................21
6.3 Sophistication and Financial Condition of Purchasers........21
6.4 Transfer of Series B Shares, Warrants and Conversion Shares.22
ARTICLE VII PRE-CLOSING COVENANTS OF THE COMPANY..............................23
7.1 Access......................................................23
7.2 Conduct of the Company and its Subsidiaries.................23
7.3 Further Action..............................................23
7.4 Notice of Certain Efforts...................................23
7.5 Confidentiality.............................................24
7.6 No Solicitation.............................................24
7.7 Preparation of the Proxy Statement; Stockholders Meeting....24
7.8 Approval by the Company's Stockholders......................25
ARTICLE VIII CONDITIONS PRECEDENT.............................................25
8.1 Conditions to Obligations of the Purchasers
at Initial Closing..........................................25
8.2 Conditions to Obligations of the Purchasers
at the Final Closing........................................28
8.3 Conditions to Obligations of the Company....................28
ARTICLE IX COVENANTS..........................................................29
9.1 Restricted Actions..........................................29
9.2 Required Actions............................................31
9.3 Stockholder Approval........................................33
9.4 Information Rights..........................................33
9.5 Access Rights...............................................35
9.6 Restrictions on Conversion/Exercise/Transfers...............35
9.7 Election of Series B Directors..............................36
9.8 Covenant Regarding Stock Option Plans.......................37
9.9 Sale of the Company.........................................37
9.10 Observer Rights.............................................39
ARTICLE X TERMINATION.........................................................39
10.1 Termination.................................................39
10.2 Effect of Termination.......................................40
ARTICLE XI SURVIVAL...........................................................40
11.1 Survival....................................................40
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ARTICLE XII INDEMNIFICATION...................................................40
12.1 Indemnification.............................................40
ARTICLE XIII GENERAL PROVISIONS...............................................41
13.1 Public Announcements........................................41
13.2 Successors and Assigns......................................42
13.3 Entire Agreement............................................42
13.4 Notices.....................................................42
13.5 Closing Fee; Purchasers' Fees and Expenses..................43
13.6 Amendment and Waiver........................................44
13.7 Counterparts................................................44
13.8 Headings....................................................44
13.9 Specific Performance........................................44
13.10 Remedies Cumulative.........................................45
13.11 GOVERNING LAW...............................................45
13.12 JURISDICTION, WAIVER OF JURY TRIAL, ETC.....................45
13.13 No Third Party Beneficiaries................................45
13.14 Severability................................................46
13.15 Time of the Essence; Computation of Time....................46
Schedule 4.1 Existence, Qualifications, Subsidiaries
Schedule 4.2 Noncontravention
Schedule 4.3 Capitalization
Schedule 4.6 Absence of Certain Changes
Schedule 4.7 Litigation
Schedule 4.9 Third-Party Approvals
Schedule 4.11 Tangible Assets
Schedule 4.13 Owned Real Property
Schedule 4.15 Agreements
Schedule 4.16 Intellectual Property
Schedule 4.21 Taxes
Schedule 4.22 Other Investors
Schedule 4.28 Registration Rights
Exhibit A Series B Preferred Stock Certificate of Designations
Exhibit B Registration Rights Agreement
Exhibit C Warrant
Exhibit D Certificate of Incorporation and Bylaws of Company
Exhibit E Credit Agreement
Exhibit F Indenture
Exhibit G Offering Circular
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AMENDED AND RESTATED
SERIES B CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
This AMENDED AND RESTATED SERIES B CONVERTIBLE PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT (this "AGREEMENT") is dated as of March 18, 2002
among Penton Media, Inc., a Delaware corporation (the "Company"), ABRY Mezzanine
Partners L.P., a Delaware limited partnership ("ABRY"), ABACUS MASTER FUND, LTD.
("ABACUS" and together with ABRY, the "ABRY PARTIES"), Sandler Capital Partners
V, L.P., a Delaware limited partnership ("SANDLER V"), Sandler Capital Partners
V FTE, L.P., a Delaware limited partnership ("SANDLER V FTE"), and Sandler
Capital Partners V Germany, L.P., a Delaware limited partnership ("SANDLER V
GERMANY" and together with Sandler V and Sandler V FTE, "SANDLER"). The ABRY
Parties and Sandler are sometimes referred to herein, collectively, as the
"PURCHASERS" and each individually as, a "PURCHASER"). On March 10, 2002, the
parties hereto entered into the Series B Convertible Preferred Stock and Warrant
Purchase Agreement (the "ORIGINAL AGREEMENT") which the parties hereto wish to
amend and restate in its entirety.
The Purchasers desire to purchase from the Company, and the Company
desires to sell and issue to the Purchasers, 50,000 shares of the Company's
Series B Convertible Preferred Stock, par value $.01 per share (the "SERIES B
PREFERRED STOCK"), and warrants to purchase shares of the Company's common
stock, par value $.01 per share (including any associated Rights, as defined in
and issued pursuant to the Rights Agreement, dated as of June 9, 2000, by and
between the Company and Xxxxxx Trust and Savings Bank, as Rights Agent (the
"RIGHTS Plan"), the "COMMON STOCK").
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS; INTERPRETATION.
(a) For purposes of this Agreement, the following terms
have the indicated meanings:
"AFFILIATE" of a person means any other person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with such person.
"AMENDMENTS" has the meaning set forth in Section 8.1(g)(ii)
hereof.
"APPLICABLE SHARE MINIMUM" has the meaning set forth in the
Series B Preferred Stock Certificate of Designations.
"APPROVAL DATE" has the meaning set forth in Section 9.3.
"BOARD OF DIRECTORS" means the board of directors of the
Company.
"CAUSE" has the meaning set forth in Section 9.7 hereof.
"CLOSINGS" AND "CLOSING" have the meanings set forth in
Section 3.2 hereof.
"CLOSING DATE" and "CLOSING DATES" have the meanings set forth
in Section 3.2 hereof.
"CLOSING FEE" has the meaning set forth in Section 13.5
hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" has the meaning set forth in the recitals
hereof.
"COMPETING TRANSACTION" has the meaning set forth in Section
7.6 hereof.
"COMPANY" has the meaning set forth in the preamble hereof.
"COMPANY REPORTS" has the meaning set forth in Section 4.5(a)
hereof.
"COMPANY REPORTS FINANCIAL STATEMENTS" has the meaning set
forth in Section 4.5(b) hereof.
"CONSOLIDATED SUBSIDIARY" means, for any Person, each
Subsidiary of such Person (whether now existing or hereafter created or
acquired) the financial statements of which are consolidated for financial
statement reporting purposes with the financial statements of such Person in
accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS " means, as of any date of
determination, the total assets of the Company and its Consolidated Subsidiaries
as would be set forth in a consolidated balance sheet of the Company and its
Consolidated Subsidiaries dated as of such date of determination and prepared in
accordance with GAAP applied on a basis consistent with the Company's historical
accounting practices.
"CONVERSION AMOUNT" has the meaning set forth in Section
9.6(a) hereof.
"CONVERSION/EXERCISE NOTICE" has the meanings set forth in
Section 9.6(a) hereof.
"CONVERSION SHARES" means shares of Common Stock issued or
issuable upon conversion of the Series B Preferred Stock.
"CO-SALE NOTICE" has the meaning set forth in Section 9.6(c)
hereof.
"CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of March 8, 2002, by and among Penton Media, Inc., as
borrower, the lenders party thereto, as lenders, Bank of America, N.A., as
syndication agent, Bank One, N.A., and Fleet Bank National Association, as
co-documentation agents, and The Bank of New York, as administrative agent,
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as amended, restated, renewed, extended, restructured, supplemented, or modified
from time to time, in accordance with the terms of this Agreement. A copy of the
Credit Agreement as in effect on the date hereof is attached hereto as EXHIBIT
E.
"EBITDA" has the meaning set forth in, and for purposes of
this Agreement shall be calculated in accordance with, the Credit Agreement in
effect on the date hereof.
"ELECTION NOTICE" has the meaning set forth in Section 9.6(b)
hereof.
"ENVIRONMENTAL AND SAFETY REQUIREMENTS" means all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations and all common law concerning public health and safety, worker
health and safety, and pollution or protection of the environment, including
without limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or by-products, asbestos, polychlorinated
biphenyls, noise or radiation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXECUTIVE LOAN PROGRAM" means (i) the Company's "Executive
Loan Program," pursuant to which the Company loaned funds to certain executives
of the Company for the purpose of allowing such executives to purchase shares of
Common Stock, and (ii) any and all promissory notes and amendments thereto,
employment agreements and amendments thereto, deferred share agreements and any
and all other documents, whether entered into prior to or after the date of the
Original Agreement, that evidence the loan of such funds or pertain in any way
to the repayment of such loans (including providing a source of funds
contemplated to be used for such repayment).
"EVENT OF NONCOMPLIANCE" has the meaning set forth in Section
8A of the Series B Preferred Stock Certificate of Designations.
"EXCLUSIVITY PERIOD" has the meanings set forth in Section 7.6
hereof.
"FINAL CLOSING " has the meaning set forth in Section 3.2
hereof.
"FINAL CLOSING DATE" has the meaning set forth in Section 3.2
hereof.
"FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"FINANCIAL STATEMENTS" has the meaning set forth in Section
4.5(b) hereof.
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"GAAP" means United States generally accepted accounting
principles as in effect from time to time, consistently applied.
"GOVERNMENTAL AGENCY" means any federal, state, local, foreign
or other governmental agency, instrumentality, commission, authority, board or
body and the NYSE.
"INDEBTEDNESS" of any Person means, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid
(including, without limitation, margin debt), (iv) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (v) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the Ordinary Course of Business), (vi) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (vii) all guarantees by such Person of
Indebtedness of others, (viii) all capital lease obligations of such Person,
(ix) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (x) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances, (xi) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product of the Borrower or any Subsidiary where such transaction
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease under GAAP, and (xii) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted (e.g., take-or-pay obligations) or similar obligations. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED LIABILITIES" has the meaning set forth in Section
12.1(a) hereof.
"INDEMNITEES" has the meaning set forth in Section 12.1(a)
hereof.
"INDENTURE" means that certain Indenture, dated as of June 28,
2001, by and among Penton Media, Inc. as Issuer, the Subsidiary Guarantors
therein, and the Bank of New York as Trustee, with respect to the 10.375%
$185,000,000 Senior Subordinated Notes due June 15, 2011, as amended, restated,
renewed, extended, restructured, supplemented, or modified from time to time, in
accordance with the terms of this Agreement. A copy of the Indenture as in
effect on the date hereof is attached hereto as EXHIBIT F.
"INITIAL CLOSING " has the meaning set forth in Section 3.1
hereof.
"INITIAL CLOSING DATE" has the meaning set forth in Section
3.1 hereof.
"INITIATING HOLDERS" has the meaning set forth in Section
9.9(a) hereof.
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"INTELLECTUAL PROPERTY" means all patents, patent applications
and inventions; all trademarks, service marks, trade dress, trade names and
corporate names and all goodwill associated therewith; all registered
copyrights; all registrations, applications and renewals for any of the
foregoing; all trade secrets, know-how, technical and computer data,
documentation and software, financial, business and marketing plans, customer
and supplier lists and all other intellectual property rights; and all copies
and tangible embodiments of the foregoing.
"INVESTMENT" has the meaning assigned to such term in the
Indenture as in effect on the date hereof.
"INVESTMENT BANK" has the meaning set forth in Section 9.9(a)
hereof.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" or "KNOW" when used with respect to the Company
means the actual knowledge of the Company's executive officers after reasonable
investigation.
"LIEN" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"LEVERAGE RATIO" means, as of any date of determination, the
quotient obtained by dividing (x) Net Indebtedness as of such date of
determination, by (y) EBITDA for the 12 month period ending on the last day of
the fiscal quarter for which the most recent financial statements have been
delivered to the Purchasers pursuant to Section 9.4.
"LIQUIDATION VALUE" has the meaning set forth in the Series B
Certificate of Designations.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business, assets, condition (financial or otherwise), results of operations,
cash flows, prospects, or properties of the Company and its Subsidiaries taken
as a whole.
"MOST RECENT BALANCE SHEET DATE" has the meaning set forth in
Section 4.6 hereof.
"NET INDEBTEDNESS" means, as of any date of determination, the
sum of: (x) the total Indebtedness of the Company and its Consolidated
Subsidiaries as would be set forth in a consolidated balance sheet of the
Company and its Consolidated Subsidiaries dated as of such date of determination
and prepared in accordance with GAAP applied on a basis consistent with the
Company's historical accounting practices LESS the total cash and cash
equivalents set forth on such consolidated balance sheet to the extent such cash
and cash equivalents exceed $5 million, and (y) without duplication, the
aggregate Liquidation Value (PLUS the aggregate Unpaid Dividends) of the Series
B Shares then outstanding determined as of such date of determination.
"NEW INDENTURE" means that certain Indenture, to be entered
into by and among Penton Media, Inc. as Issuer, the Subsidiary Guarantors
therein, and U.S. National Bank Association as Trustee, with respect to the
Senior Notes, as amended, restated, renewed,
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extended, restructured, supplemented, or modified from time to time, in
accordance with the terms of this Agreement.
"NYSE" means The New York Stock Exchange.
"OFFERING CIRCULAR" means the Preliminary Confidential
Offering Circular pursuant to which the Senior Notes shall be issued, a copy of
which is attached hereto as EXHIBIT G
"ORDINARY COURSE OF BUSINESS" means the ordinary course of
business consistent with past practice (including with respect to quantity,
quality and frequency).
"ORIGINAL AGREEMENT" has the meaning set forth in the preamble
hereof.
"PERMITTED AFFILIATE TRANSACTION" means any Affiliate
Transaction (as defined in Section 9.1(e)) (i) entered into by the Company or
any of its Subsidiaries in the Ordinary Course of Business as part of a
customary employment relationship, (ii) entered into pursuant to any Stock
Option Plan, or (iii) entered into pursuant to the Executive Loan Program.
"PERMITTED INVESTMENT" has the meaning assigned to such term
in the Indenture as in effect on the date hereof.
"PERMITTED LIEN" means:
(1) Liens existing on the Closing Date and securing
indebtedness of the Company and its Subsidiaries to the extent such
indebtedness is disclosed on the Most Recent Balance Sheet Date or
incurred since such date in the Ordinary Course of Business, including,
without limitation, Liens securing the indebtedness of the Company and
its Subsidiaries under the Credit Agreement, the guarantees thereof and
any hedging agreements entered into between the Company and any Person
which, at the time of the entry thereof, is a lender (or an Affiliate
thereof) under the Credit Agreement;
(2) Liens imposed by governmental authorities for taxes,
assessments or other charges not yet subject to penalty or which are
being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of
the Company in accordance with GAAP;
(3) statutory liens of carriers, warehousemen, mechanics,
material men, landlords, repairmen or other like Liens arising by
operation of law in the Ordinary Course of Business; PROVIDED, that (A)
the underlying obligations are not overdue for a period of more than 60
days, or (B) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;
(4) Liens securing the performance of bids, trade
contracts (other than borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the Ordinary Course of Business;
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(5) easements, rights-of-way, zoning, similar
restrictions and other similar encumbrances or minor imperfections of
title which, in the aggregate, do not in any case materially detract
from the value of the property subject thereto (as such property is
used by the Company or any of its Subsidiaries) or interfere with the
ordinary conduct of the business of the Company and any of its
Subsidiaries taken as a whole;
(6) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default, (as defined in the Indenture as in
effect on the date hereof), under the Indenture with respect thereto;
(7) pledges or deposits made in the Ordinary Course of
Business in connection with workers' compensation, unemployment
insurance and other types of social security legislation;
(8) Liens securing indebtedness of a Person existing at
the time such Person becomes a Subsidiary or is merged with or into the
Company or a Subsidiary or Liens securing Indebtedness incurred in
connection with an Acquisition (as defined in the Indenture as in
effect on the date hereof); provided, that such Liens were in existence
prior to the date of such acquisition, merger or consolidation, were
not incurred in anticipation thereof, and do not extend to any other
assets;
(9) leases or subleases granted to other Persons in the
Ordinary Course of Business not materially interfering with the conduct
of the business of the Company or any of its Subsidiaries or materially
detracting from the value of the relative assets of the Company or any
Subsidiary;
(10) Liens arising from precautionary Uniform Commercial
Code financing statement filings regarding operating leases entered
into by the Company or any of its Subsidiaries in the Ordinary Course
of Business; and
(11) Liens securing any Refinancing Indebtedness (as
defined in the Indenture as in effect on the date hereof) incurred to
refinance any Indebtedness that was previously so secured.
"PERSON" or "PERSON" means any corporation, individual,
limited liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"PLAN" means any employee benefit plan (as defined in Section
3(3) of ERISA), subject to Title IV of ERISA or the minimum funding requirements
of Section 412 of the Code, maintained or contributed to by the Company or any
Subsidiary at any time during the 5-calendar years immediately preceding the
date of the Original Agreement.
"PROXY STATEMENT " has the meaning set forth in Section 7.7(c)
hereof.
"PRIOR REGISTRATION AGREEMENTS" has the meaning set forth in
Section 4.21 hereof.
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"PROPOSED SELLER" has the meaning set forth in Section 9.6(b)
hereof.
"PROPOSED TRANSFEROR(S)" has the meaning set forth in Section
9.6(c) hereof.
"PUBLIC SALE" means any sale pursuant to a registration under
Section 5 of the Securities Act or any sale pursuant to Rule 144 of the
Securities Act.
"PURCHASER" and "PURCHASERS" have the meaning set forth in the
preamble hereof.
"PURCHASE PRICE" has the meaning set forth in Section 2.1
hereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement between the Company and the Purchasers in the form of EXHIBIT B
hereto.
"RELATED DOCUMENTS" means all documents and instruments to be
executed or adopted by the Company in connection herewith, including the Series
B Preferred Stock Certificate of Designations, the certificates evidencing the
Series B Shares, the Warrants, the Registration Rights Agreement, the
Resignation Agreements and the Amendments.
"RESIGNATION AGREEMENTS" means, collectively, the letter
agreements entered into among the Purchasers, the Company and not less than four
(4) existing members of the Board of Directors (other than the Series B
Directors), pursuant to which such directors agree to resign from the Board of
Directors promptly upon the Purchasers' request at a time when the Purchasers
are entitled to make such request pursuant to Sections 8B(ii), 8B(iii) and/or
8B(iv) of the Series B Preferred Stock Certificate of Designations.
"RESTRICTED INVESTMENT" has the meaning assigned to such term
in the Indenture as in effect on the date hereof.
"RESTRICTED PARTIES" and "RESTRICTED PARTY" have the meanings
set forth in Section 7.6 hereof.
"RESTRICTED PAYMENT" has the meaning assigned to such term in
the Indenture as in effect on the date hereof.
"RIGHTS PLAN" has the meaning set forth in the first recital
hereof.
"SALE NOTICE" has the meaning set forth in Section 9.6(b)
hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" AND "SELLERS" have the meanings set forth in Section
9.6(b) hereof.
"SENIOR NOTES" means the Senior Secured Notes Due 2007 of the
Company being offered pursuant to the Offering Circular.
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"SERIES B DIRECTORS" has the meaning set forth in Section
8.1(h).
"SERIES B LIQUIDATION PREFERENCE" has the meaning set forth in
the Series B Preferred Stock Certificate of Designations.
"SERIES B PREFERRED STOCK CERTIFICATE OF DESIGNATIONS" means
the Certificate of Designations designating the rights and preferences of the
Series B Preferred Stock adopted by the Board of Directors and attended as
EXHIBIT A hereto.
"SERIES B PREFERRED STOCK" has the meanings set forth in the
recitals hereof.
"SERIES B SHARES" has the meaning set forth in Section 2.1
hereof.
"SHARE ISSUANCE APPROVAL" has the meaning set forth in Section
9.3 hereof.
"STOCK OPTION PLAN" means any capital stock plan for the
benefit of the Company's officers, employees or directors which has been or is
approved (prior to the date of the Original Agreement or thereafter) by the
Board of Directors or a committee thereof that has the authority to administer
any such plan, including, without limitation, the Company's 1998 Equity and
Performance Incentive Plan, the Company's 1998 Director Stock Option Plan, the
Company's Management Stock Purchase Plan and the Company's Employee Stock
Purchase Plan.
"STOCKHOLDER APPROVAL" has the meaning set forth in Section
9.3 hereof.
"STOCKHOLDER MEETING" has the meaning set forth in Section
7.7(c) hereof.
"SUBSIDIARY" means any corporation, limited liability company,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or (ii) if a partnership, limited liability company,
association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by the Company. For purposes hereof, the Company shall be deemed
to have a majority ownership interest in a partnership, limited liability
company, association or other business entity if the Company, directly or
indirectly, is allocated a majority of partnership, limited liability company,
association or other business entity gains or losses, or is or controls the
managing director or general partner of such partnership, limited liability
company, association or other business entity.
"TAX" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
ss.59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
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"TAX RETURNS" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TRANSFER NOTICE" has the meaning set forth in Section 9.6(c)
hereof.
"UNPAID DIVIDENDS " means, with respect to any Series B Share,
as of any date of determination, the accumulated dividends and accrued and
unpaid but not yet accumulated dividends that have accumulated or accrued on
such Series B Share in accordance with Section 2 of the Series B Preferred
Certificate of Designations from the date of issuance of such Series B Share
through and including such date of determination.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that does not own any capital stock of, or own or hold any Lien on any property
of, the Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an "Unrestricted Subsidiary" as designated by the Board
of Directors in accordance with the Indenture (as in effect on the date hereof),
it being agreed that the Company shall deliver to the Purchasers a copy of all
documentation delivered to the trustee under the Indenture in order to give
effect to such designation as and when such documentation is delivered to the
trustee.
"WARRANTS" has the meaning set forth in Section 3.2 hereof.
"WARRANT SHARES" has the meaning set forth in Section 4.2(a)
hereof.
"2001 AUDITED FINANCIAL STATEMENTS" has the meaning set forth
in Section 4.5(b) hereof.
(b) The words "HEREIN", "HEREOF" and "HEREUNDER" refer to
this Agreement as a whole and not to any particular article, section or other
subdivision of this Agreement.
ARTICLE II
ISSUANCE AND SALE OF PREFERRED STOCK AND WARRANTS
2.1 NUMBER OF SHARES, WARRANTS AND PURCHASE PRICE. On the terms
and subject to the conditions of this Agreement, at the Closings, the Company
shall issue and sell to the Purchasers, and the Purchasers shall, severally and
not jointly, purchase from the Company, in the aggregate, (i) 50,000 shares of
Series B Preferred Stock (the "SERIES B SHARES"), and (ii) warrants to purchase
1,600,000 shares of Common Stock on the terms and subject to the conditions set
forth therein, for an aggregate purchase price of $50,000,000 (the "PURCHASE
Price"). The number of Series B Shares and Warrants to be purchased by each
Purchaser at each Closing, and the portion of the Purchase Price to be paid in
exchange therefore, shall be as specified on SCHEDULE 1 hereto. The parties
agree that for tax and accounting purposes, as of the Closing Date the aggregate
value of the Warrants is $1,600,000.
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ARTICLE III
CLOSING; CLOSING DELIVERIES
3.1 INITIAL CLOSING. Unless this Agreement shall have terminated
pursuant to Article X, and subject to the satisfaction or waiver of the closing
conditions for the Initial Closing set forth in Article VIII, the initial
closing of the transactions contemplated hereby (the "INITIAL CLOSING") shall
take place at the offices of Xxxxxxxx & Xxxxx, New York, New York at 10:00 a.m.
on the third (3rd) Business Day after all of the conditions to the Initial
Closing set forth in Article VIII (other than those that will be satisfied by
the delivery of documents or tender of payment at the Initial Closing) are
either satisfied or duly waived, or at such other time, place and/or date as
shall be agreed upon by the parties hereto. The date upon which the Initial
Closing occurs is referred to herein as the "INITIAL CLOSING DATE."
3.2 FINAL CLOSING. Unless this Agreement shall have been
terminated prior to the Initial Closing, and subject to the satisfaction or
waiver of the closing conditions for the Final Closing set forth in Article VIII
on or prior to the Final Closing Date, the final closing of the transactions
contemplated hereby (the "FINAL CLOSING") shall take place at 10:00 a.m. on the
earlier to occur of (i) the 30th day after the Initial Closing Date and (ii) the
date on which the Company closes the sale of the Senior Notes (such earlier date
the "FINAL CLOSING DATE") at the offices of Xxxxxxxx & Xxxxx, New York, New York
or at such other time, place and/or date as shall be agreed upon by the parties
hereto. The Initial Closing and the Final Closing are sometimes referred to
herein, collectively, as the "CLOSINGS" and each individually as a "CLOSING."
The Initial Closing Date and the Final Closing Date are sometimes referred to
herein, collectively, as the "CLOSING DATES" and each individually as a "CLOSING
DATE."
3.3 PAYMENT FOR AND DELIVERY OF PREFERRED SHARES AND WARRANTS. At
each Closing, the Company shall issue and deliver to each Purchaser (i) a stock
certificate duly executed and registered in the name of such Purchaser
evidencing ownership of the number of Series B Shares to be purchased by such
Purchaser at such Closing as set forth opposite such Purchaser's name on
SCHEDULE 1 hereto, and (ii) a warrant, in substantially the form attached as
EXHIBIT C hereto, duly executed in favor of such Purchaser evidencing ownership
of that number of warrants described in Section 2.1(ii) to be purchased by such
Purchaser at such Closing as set forth opposite such Purchaser's name on
SCHEDULE 1 hereto, in each case against payment by such Purchaser of the portion
of the Purchase Price to be paid by such Purchaser at such Closing as set forth
opposite such Purchaser's name on SCHEDULE 1 hereto by wire transfer of
immediately-available funds to the account designated by the Company. The
warrants issued to the Purchasers at the Closings pursuant to this Section 3.2,
together with any common stock purchase warrant issued in substitution or
exchange thereof, are referred to hereinafter as the "WARRANTS."
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser
as follows:
4.1 EXISTENCE; QUALIFICATION; SUBSIDIARIES. The Company and each
Subsidiary that is a corporation is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and has full corporate power and authority to conduct its business and own and
operate its properties as now conducted, owned and operated. The copies of the
Certificate of Incorporation and By-Laws of the Company and all amendments
thereto are attached hereto as EXHIBIT D and are true, correct and complete
copies of such documents. The Company and each Subsidiary of the Company is
licensed or qualified as a foreign corporation and is in good standing in all
jurisdictions where such Person is required to be so licensed or qualified,
except where the failure to be so licensed, qualified or in good standing would
not have a Material Adverse Effect. SCHEDULE 4.1 lists all Subsidiaries of the
Company and their respective jurisdictions of incorporation. Except as set forth
on SCHEDULE 4.1, the Company has no Subsidiaries and owns no capital stock or
other securities of, and has not made any other investment in, any other entity.
All of the issued shares of capital stock of each Subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all Liens other than
Liens securing the obligations under the Credit Agreement.
4.2 AUTHORIZATION, NONCONTRAVENTION AND ENFORCEABILITY; ISSUANCE
OF SHARES.
(a) The Company has full power and authority and has
taken all required corporate and other action necessary to permit it to execute
and deliver this Agreement and the Related Documents and to carry out the terms
hereof and thereof and (other than receipt of the Stockholder Approval, which
the Company shall seek to obtain in accordance with Section 9.3) to issue and
deliver the Series B Shares, the Conversion Shares, the Warrants and the shares
of Common Stock issuable upon exercise of the Warrants (the "WARRANT SHARES"),
and none of such actions will (i) violate or conflict with any provision of the
Certificate of Incorporation of the Company, the By-Laws of the Company or of
any applicable law, regulation, order, judgment or decree or rule of the stock
exchange where the Common Stock is listed, (ii) except as set forth on SCHEDULE
4.2, result in the breach of or constitute a default (or an event which, with
notice or lapse of time or both would constitute a default) under any agreement,
instrument or understanding to which the Company is a party or by which it is
bound or by which it will become bound as a result of the transaction
contemplated by this Agreement other than any such breach or default that would
not have a Material Adverse Effect, or (iii) result in or constitute a "change
in control" under any agreement, instrument or understanding to which the
Company is a party or by which it is bound (other than the Stock Option Plans)
or by which it will become bound as a result of the transaction contemplated by
this Agreement. This Agreement and the Related Documents each constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application related to the enforcement of creditor's rights generally and except
as rights to indemnity thereunder may be limited by applicable federal
securities laws.
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(b) The Series B Shares have been duly authorized and,
when issued and delivered in accordance with this Agreement, will be validly
issued, fully paid and nonassessable, and will be free of any Liens (other than
any restrictions on transfer under state and/or federal securities laws). The
Warrants have been duly authorized and, when issued and delivered in accordance
with this Agreement, will be validly issued and will be free of any Liens (other
than any restrictions on transfer under state and/or federal securities laws).
Subject to receipt of the Share Issuance Approval, when issued, the Conversion
Shares and the Warrant Shares will be duly authorized, validly issued, fully
paid and nonassessable, and will be free of any Liens (other than any
restrictions on transfer under state and/or federal securities laws). Subject to
receipt of the Share Issuance Approval, the Conversion Shares and the Warrant
Shares have been duly reserved for issuance upon conversion of the Series B
Shares or exercise of the Warrants, as the case may be. Neither the issuance and
delivery of the Series B Shares or Warrants nor the issuance and delivery of any
Conversion Shares or Warrant Shares is subject to any preemptive right of any
stockholder of the Company or to any right of first refusal or other similar
right in favor of any Person which has not been waived.
4.3 CAPITALIZATION. As of the Closing, and upon the acceptance for
filing of the Series B Preferred Stock Certificate of Designations, the
authorized capital stock of the Company shall consist of: (i) 60,000,000 shares
of Common Stock, of which 31,910,325 shares are outstanding, 22,133,373 shares
are reserved for issuance upon conversion of the Series B Preferred Stock and
exercise of the Warrants, 5,916,872 shares are reserved for issuance in
connection with equity awards granted or permitted to be granted pursuant to the
Stock Option Plans or upon the exercise of stock options granted or permitted to
be granted pursuant to the Stock Option Plans, and 39,430 shares are held in
treasury; and (ii) 2,000,000 shares of preferred stock, par value $0.01 per
share, of which 600,000 shares are designated Series A Junior Preferred Stock
and 50,000 shares are designated as Series B Preferred Stock. At the time of the
Closing, all of the outstanding capital stock will be validly issued, fully paid
and nonassessable and will have been issued in compliance with all applicable
securities laws (including the provisions of the Securities Act and the rules
and regulations promulgated thereunder). Except pursuant to a Stock Option Plan
or as set forth on SCHEDULE 4.3, as of the Closing, neither the Company nor any
of its Subsidiaries has granted or issued any options, convertible securities,
warrants, calls, pledges, transfer restrictions (except restrictions imposed by
federal and state securities laws), Liens, rights of first offer, rights of
first refusal, antidilution provisions or commitments of any character relating
to any issued or unissued shares of capital stock of the Company other than as
contemplated in this Agreement and the Related Documents.
4.4 PRIVATE SALE; VOTING AGREEMENTS.
(a) The Company has not violated any applicable federal
or state securities laws in connection with the offer, sale and issuance of any
of its capital stock. Assuming the accuracy of the Purchasers' representations
contained herein, neither the offer, sale and issuance of the Series B Shares
and Warrants hereunder nor the issuance and delivery of any Conversion Shares or
Warrant Shares (assuming that the Warrant Shares are issued to the Purchasers)
requires registration under the Securities Act or any state securities laws.
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(b) To the Company's knowledge, there are no agreements
obligating any of its stockholders to vote as directed by another Person or any
proxies granted by any stockholder other than proxies submitted in connection
with the Company's annual meeting of stockholders.
4.5 SEC REPORTS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and
documents required to be filed by it with the SEC and has heretofore made
available to the Purchasers (other than preliminary materials), in the form
filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years
ended December 31, 1998, December 31, 1999 and December 31, 2000, respectively,
(ii) all proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since January 1, 1999, and (iii) all other
forms, reports and other registration statements filed by the Company with the
SEC after January 1, 1998 and before the Closing Date, including, without
limitation, the Form 10-Q for the quarter ended September 30, 2001, when filed
(the forms, reports and other documents referred to in clauses (i), (ii) and
(iii) above, together with any amendments or supplements thereto filed before
the Closing Date and the Offering Circular, being referred to herein,
collectively, as the "COMPANY REPORTS"). The Company Reports (i) were prepared,
in all material respects, in accordance with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations thereunder and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. No
Subsidiary is required to file any form, report or other document with the SEC.
(b) Each of the financial statements (including, in each
case, any notes thereto) contained in the Company Reports (the "COMPANY REPORTS
FINANCIAL STATEMENTS") and the financial statements (including any notes
thereto) required to be delivered to each Purchaser by the Company pursuant to
Section 8.1(i)(viii) (the "2001 AUDITED FINANCIAL STATEMENTS" and, together with
the Company Reports Financial Statements, the "FINANCIAL STATEMENTS") complies
(or, in the case of the 2001 Audited Financial Statements, will comply) as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto and was prepared
(or, in the case of the 2001 Audited Financial Statements, will be prepared) in
all material respects in accordance with GAAP applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Rule 10-01 of
Regulation S-X promulgated by the SEC) and each fairly presented (or, in the
case of the 2001 Audited Financial Statements, will fairly present) in all
material respects (subject to, in the case of the unaudited statements, to
normal, recurring audit adjustments, none of which are material) the
consolidated financial position, results of operations, stockholders' equity and
cash flows of the Company and the Consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein. As of the dates
of the Financial Statements, the Company had (or, in the case of the 2001
Audited Financial Statements, will have) no obligation, indebtedness or
liability (whether accrued, absolute, contingent or otherwise, known or unknown,
and whether due or to become due), which was not (or, in the case of the 2001
Audited Financial Statements, will not be) reflected or reserved against in the
balance sheets or the notes thereto which are (or, in the case of the 2001
Audited Financial Statements, will be) part of the Financial Statements, except
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for those incurred in the Ordinary Course of Business and which (or, in the case
of the 2001 Audited Financial Statements, will be) are fully reflected on the
Company's books of account and which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
4.6 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE
4.6, since September 30, 2001 (the "MOST RECENT BALANCE SHEET DATE"), neither
the Company nor any Subsidiary has:
(a) incurred any liabilities other than current
liabilities incurred, or obligations under contracts entered into, in the
Ordinary Course of Business and for individual amounts not greater than
$500,000;
(b) paid, discharged or satisfied any claim, Lien or
liability, other than any claim, Lien or Liability (A) reflected or reserved
against on the balance sheet contained in the Financial Statements as of the
Most Recent Balance Sheet Date (the "CURRENT BALANCE SHEET") and paid,
discharged or satisfied in the Ordinary Course of Business or (B) incurred since
the Most Recent Balance Sheet Date and paid, discharged or satisfied, in each
case in the Ordinary Course of Business;
(c) sold, leased, assigned or otherwise transferred any
of its assets, tangible or intangible (other than sales of inventory in the
Ordinary Course of Business and use of supplies in the Ordinary Course of
Business);
(d) permitted any of its assets, tangible or intangible,
to become subject to any Lien (other than any Permitted Lien);
(e) written off as uncollectible any accounts receivable
other than (i) in the Ordinary Course of Business, or (ii) for amounts not
greater than $50,000;
(f) terminated or amended or suffered the termination or
amendment of, other than in the Ordinary Course of Business, or failed to
perform in all material respects all of its obligations or suffered or permitted
any material default to exist under, any material agreement, license or permit;
(g) suffered any damage, destruction or loss of tangible
property (whether or not covered by insurance) which in the aggregate exceeds
$100,000;
(h) made any loan (other than intercompany advances) to
any other Person (other than (i) advances to employees in the Ordinary Course of
Business which do not exceed $5,000 individually or $25,000 in the aggregate, or
(ii) loans made under the Company's Executive Loan Program;
(i) canceled, waived or released any debt, claim or right
in an amount or having a value exceeding $50,000;
(j) other than a Permitted Affiliate Transaction, paid
any amount to or entered into any agreement, arrangement or transaction with any
Affiliate (including its officers,
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directors and employees) outside the Ordinary Course of Business and which was
not approved by a majority of the Company's disinterested directors;
(k) declared, set aside, or paid any dividend or
distribution with respect to its capital stock or redeemed, purchased or
otherwise acquired any of its capital stock, other than pursuant to the
Executive Loan Program;
(l) other than in the Ordinary Course of Business,
granted any increase in the compensation of any officer or employee or made any
other change in employment terms of any officer or employee;
(m) made any change in any method of accounting or
accounting practice;
(n) suffered or caused any other occurrence, event or
transaction which, individually or together with each other occurrence, event or
transaction, has had or could reasonably be expected to have a Material Adverse
Effect; or
(o) agreed, in writing or otherwise, to any of the
foregoing.
4.7 LITIGATION. Except as set forth in SCHEDULE 4.7, as of the
date of this Agreement and as of the date of the Original Agreement, no claim,
suit, proceeding or investigation is pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or any
officer or director thereof or the Company's and the Subsidiaries' business
which if decided adversely to any such person could have a Material Adverse
Effect.
4.8 LICENSES, COMPLIANCE WITH LAW, OTHER AGREEMENTS, ETC. The
Company and each Subsidiary have all material franchises, permits, licenses and
other rights to allow it to conduct its business and is not in violation in any
material respects of any order or decree of any court, or of any law, order or
regulation of any Governmental Agency, or of the provisions of any material
contract or agreement to which it is a party or by which it is bound, and
neither this Agreement nor the Related Documents nor the transactions
contemplated hereby or thereby will result in any such violation, except where
the failure to have any such franchise, permit or license or any such violation
would not in the aggregate be expected to have a Material Adverse Effect. The
Company and each Subsidiary's businesses have been conducted in all material
respects in compliance with all federal, state and local laws, ordinances, rules
and regulations, except where such violations, defaults or noncompliance would
not in the aggregate have a Material Adverse Effect.
4.9 THIRD-PARTY APPROVALS. Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
except as set forth on Schedule 4.9, the Company is not required to obtain any
order, consent, approval or authorization of, or to make any declaration or
filing with, any Governmental Agency or other third party (including under any
state securities or "blue sky" laws) in connection with the execution and
delivery of this Agreement or the Related Documents, or the consummation of the
transactions contemplated hereby or thereby to occur on the Closing Date, except
for (i) filings on Form D under the Securities Act, and (ii) any consents,
approvals or authorizations the failure to obtain which would not in the
aggregate have a Material Adverse Effect.
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4.10 DISCLOSURE. This Agreement, together with all exhibits and
schedules hereto, and the agreements, certificates and other documents furnished
to the Purchasers by the Company and its Subsidiaries in connection with the
transactions contemplated under this Agreement, do not contain any untrue
statement of a material fact or, as supplemented by the Company Reports filed by
the Company on or after January 1, 2001 through the date of this Agreement, omit
to state a material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.
4.11 TANGIBLE ASSETS. The Company and its Subsidiaries own or lease
all tangible assets used or reasonably necessary in connection with the conduct
of its business. Other than the Liens imposed pursuant to the Credit Agreement,
all material tangible assets are free from any Liens (other than Permitted
Liens), are free from any material defects, have been maintained in accordance
with normal industry practice and any regulatory standard or procedure to which
such assets are subject, are in good operating condition and repair in all
material respects (subject to normal wear and tear) and are suitable in all
material respects for the purposes for which such assets are used or proposed to
be used, other than Liens, defects and wear and tear which in the aggregate
would not be expected to have a Material Adverse Effect.
4.12 INVENTORY. All inventory of the Company and its Subsidiaries,
whether reflected on the Current Balance Sheet or otherwise, consists of a
quality and quantity usable or salable in the Ordinary Course of Business,
subject to the reserves set forth on the Current Balance Sheet and subject to
normal rates of defect or obsolescence not inconsistent with the Company's
historical experience.
4.13 OWNED REAL PROPERTY. Except as set forth on Schedule 4.13, the
Company and its Subsidiaries own no real property.
4.14 REAL PROPERTY LEASES. There exists no event of default (nor,
to the Company's knowledge, any event which with notice or lapse of time would
constitute an event of default) with respect to the Company, any Subsidiary and,
to the Company's knowledge, with respect to any other party thereto under any
agreement pursuant to which the Company is the lessee or lessor of any real
property, except for such defaults and defects in enforceability as would not in
the aggregate be expected to have a Material Adverse Effect, and all such
agreements are in full force and effect and enforceable against the lessor or
lessee in accordance with their terms except for such defaults and defects in
enforceability as would not in the aggregate be expected to have a Material
Adverse Effect.
4.15 AGREEMENTS. Except as set forth in SCHEDULE 4.15, neither the
Company nor any Subsidiary is in default, nor to the knowledge of the Company is
there any basis for a valid claim of default, and to the Company's knowledge no
event has occurred which, with notice or lapse of time, would constitute a
default, under any agreement, arrangement or understanding to which the Company
or any Subsidiary is a party, and to the knowledge of the Company no other
Person is in default under any such agreement, in each case other than defaults
which in the aggregate would not be expected to have a Material
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Adverse Effect. Additionally, neither the Company nor any Subsidiary is party to
any agreement the performance of which in accordance with its terms (including
any termination provision thereof) would be expected to have a Material Adverse
Effect (which term, for the purposes of this sentence only, shall not include
the prospects of the Company and its Subsidiaries taken as a whole).
4.16 INTELLECTUAL PROPERTY. SCHEDULE 4.16 sets forth a complete
list of (i) all patented or registered Intellectual Property owned by the
Company, and all applications to register or patent any such Company
Intellectual Property; and (ii) all trade names and material unregistered
trademarks used by the Company in connection with its business. The Company owns
and possesses all right, title and interest in and to, or has a valid and
enforceable license to use, the Intellectual Property necessary for the
operation of its business as currently conducted and as currently proposed to be
conducted, and no claim by any third party contesting the validity,
enforceability, use or ownership of such Intellectual Property has been made or,
to the knowledge of the Company, is threatened. To the Company's knowledge, the
Company has not infringed or misappropriated the Intellectual Property of any
third party.
4.17 EMPLOYEES. Since the Most Recent Balance Sheet Date, no key
employees and no group of employees has terminated, or to the knowledge of the
Company plans to terminate, employment with the Company or any Subsidiary, as
applicable. The Company is not a party to or bound by any collective bargaining
agreement, nor has it experienced any strike, material grievance, material claim
of unfair labor practice or other collective bargaining dispute. To the
knowledge of the Company there is no organizational effort being made or
threatened by or on behalf of any labor union with respect to its employees. To
the Company's knowledge, the Company has not committed any unfair labor practice
or materially violated any federal, state or local law or regulation regulating
employers or the terms and conditions of its employees' employment, including
laws regulating employee wages and hours, employment discrimination, employee
civil rights, equal employment opportunity and employment of foreign nationals,
except for such violations as would not in the aggregate be expected to have a
Material Adverse Effect.
4.18 ERISA; EMPLOYEE BENEFITS. Each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service or has timely filed for a
favorable determination letter from the Internal Revenue Service and no event
has occurred since the date of the last determination letter that could
reasonably be expected to materially adversely affect the qualified status of
such Plan. Except for events or circumstances that would not have a Material
Adverse Effect, each Plan is in full force and effect and has been administered
in accordance with its terms and is and has been, and each plan administrator
and fiduciary of a Plan is acting and has been acting, in compliance with all
applicable requirements of the Code and ERISA (including the funding, reporting
and disclosure and prohibited transaction provisions thereof) and other
applicable laws, regulations and rulings in connection with each such Plan. No
Plan has been terminated or partially terminated. The Company has no Plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA. The
Company or one of its Subsidiaries has made, accrued or provided for all
contributions required under each Plan. To the knowledge of the Company, no
event has occurred or is reasonably expected to occur with respect to any
employee pension benefit plan of the Company or any member of the Company's
controlled group (within the meaning of Section 414 of the Code), which could
reasonably be expected to directly or indirectly result in any material
liability (other than liability arising in the Ordinary Course of Business) to
the Company or any member of its controlled group pursuant to Title IV of ERISA
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or Section 412 of the Code. No Plan has incurred an "accumulated funding
deficiency" within the meaning of Section 412 of the Code or Section 302 of
ERISA.
4.19 ENVIRONMENT, HEALTH AND SAFETY.
(a) The Company (as used in this Section 4.19, Company
shall include the Company's Subsidiaries) has complied and is in compliance in
all material respects with all Environmental and Safety Requirements that are
applicable to the Company's business;
(b) The Company has not received any written notice,
report or other information regarding any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to the Company
or its facilities and arising under Environmental and Safety Requirements; and
(c) The Company has not, either expressly or by operation
of law, assumed or undertaken any liability, including without limitation any
obligation for corrective or remedial action, of any other Person relating to
Environmental and Safety Requirements.
4.20 TRANSACTIONS WITH AFFILIATES. Except for Permitted Affiliate
Transactions or as disclosed in the Company Reports filed by the Company on or
after January 1, 2001 through the date of this Agreement, neither the Company
nor any Subsidiary is party to any agreement, arrangement or transaction with
any Affiliate which is material to the Company's and its Subsidiaries business,
taken as a whole.
4.21 TAXES. Except as set forth on Schedule 4.21:
(a) each of the Company and its Subsidiaries has filed
all Tax Returns that it was required to file, and has paid all Taxes shown
thereon as owing, except where the failure to file Tax Returns or to pay Taxes
would not in the aggregate have a Material Adverse Effect;
(b) none of the Company and its Subsidiaries (A) has been
a member of an affiliated group filing a consolidated federal Tax Return (other
than a group the common parent of which is the Company) or (B) has any Liability
for the Taxes of any Person (other than any of the Company and its Subsidiaries)
under Treas. Reg. ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise;
(c) each of the Company and its Subsidiaries has withheld
and paid in all material respects all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party;
(d) there is no dispute or claim concerning any Tax
Liability of any of the Company and its Subsidiaries either (A) claimed or
raised by any authority in writing or (B) as to which any of the directors and
officers (and employees responsible for Tax matters) of the Company and its
Subsidiaries has knowledge based upon personal contact with any agent of such
authority and which is material to the Company and its Subsidiaries taken as a
whole; and
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(e) none of the Company and its Subsidiaries has any
liability for any Person in connection with Taxes pursuant to the Combination
Agreement by and among Penton Media, Inc., X-X Acquisition Corp., Pittway
Corporation, Xxxxxxx Xxxxxx Publishing Company, Xxxxxxx X. Xxxxxxx and Xxxx X.
Xxxxxx, dated as of May 21, 1998 or for any Person pursuant to section 3.13 of
such Combination Agreement.
4.22 OTHER INVESTORS. Set forth on SCHEDULE 4.22 is a list of all
stockholders of the Company who as of the date hereof and to the Company's
knowledge, based upon SEC filings of stockholders, after giving effect to the
terms hereof, own more than 5% of the fully diluted common equity of the Company
and sets forth such percentage ownership.
4.23 SENIORITY. No class of equity securities of the Company is
senior or PARI PASSU to the Series B Preferred Stock in right of payment,
whether upon liquidation, dissolution or otherwise.
4.24 INVESTMENT COMPANY. The Company is not, and is not controlled
by or under common control with an affiliate of, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.25 CERTAIN FEES. Other than any fees or expenses to be paid in
accordance with Section 13.5 and other than fees to be paid to Credit Suisse
First Boston (which fees shall not exceed $2,500,000), no fees or commissions
will be payable by the Company to any broker, financial advisor, finder,
investment banker, or bank with respect to the transactions contemplated by this
Agreement. The Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of any Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement. The Company shall indemnify and
hold harmless each of the Purchasers, their respective employees, officers,
directors, agents and partners, and their respective affiliates (as such term is
defined under Rule 405 promulgated under the Securities Act), from and against
all claims, losses, damages, costs (including the costs of preparation and
attorney's fees) and expenses suffered in respect to any such claimed or
existing fees.
4.26 FORM S-3 ELIGIBILITY. As of the date hereof, the Company is
eligible to register securities for resale with the SEC on Form S-3 promulgated
under the Securities Act.
4.27 LISTING AND MAINTENANCE REQUIREMENTS COMPLIANCE. The Company
has not received notice (written or oral) from the NYSE that the Company is not
in compliance with the listings or maintenance requirements of such Exchange.
Upon conversion of the Series B Shares into shares of Common Stock and upon
exercise of the Warrants, all Conversion Shares and Warrant Shares shall be
listed on the NYSE. The authorization and issuance of the Series B Shares, the
Warrants, the Conversion Shares and the Warrant Shares will not violate the
listing or maintenance requirements of the NYSE, subject to receipt of the Share
Issuance Approval, which the Company shall seek to obtain in accordance with
Section 9.3.
4.28 REGISTRATION RIGHTS. The Company has not granted or agreed to
grant to any Person any rights (including "piggy-back" registration rights) to
have any securities of the Company registered with the SEC or any other
governmental authority, except pursuant to the
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agreements described on SCHEDULE 4.28 hereto (collectively, the "PRIOR
REGISTRATION AGREEMENTS").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants, severally and
not jointly, to the Company as follows:
5.1 AUTHORIZATION AND ENFORCEABILITY. Such Purchaser has full
power and authority and has taken all action necessary to permit it to execute
and deliver this Agreement and the other documents and instruments to be
executed by it pursuant hereto and to carry out the terms hereof and thereof.
This Agreement and such other documents and instruments each constitutes a
legal, valid and binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except to the extent limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
of general application related to the enforcement of creditor's rights generally
and except as rights to indemnity thereunder may be limited by applicable
federal securities laws.
5.2 GOVERNMENT APPROVALS. Such Purchaser is not required to obtain
any order, consent, approval or authorization of, or to make any declaration or
filing with, any Governmental Agency in connection with the execution and
delivery of this Agreement and the other documents and instruments to be
executed by it pursuant hereto or the consummation of the transactions
contemplated hereby and thereby, except for such order, consent, approval,
authorization, declaration or filing as which has been or will be obtained or
made.
ARTICLE VI
COMPLIANCE WITH SECURITIES LAWS
6.1 INVESTMENT INTENT OF THE PURCHASERS. Each Purchaser represents
and warrants, severally and not jointly, to the Company that it is acquiring the
Series B Shares and Warrants set forth opposite its name on SCHEDULE 1 for its
own account, with no present intention of selling or otherwise distributing the
same to the public.
6.2 STATUS OF SERIES B SHARES AND WARRANTS. Each Purchaser has
been informed by the Company that the Series B Shares and Warrants have not been
and will not be registered under the Securities Act or under any state
securities laws and are being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering.
6.3 SOPHISTICATION AND FINANCIAL CONDITION OF PURCHASERS. Each
Purchaser represents and warrants, severally and not jointly, to the Company
that it is an "Accredited Investor" as defined in Regulation D under the
Securities Act and that it considers itself to be an experienced and
sophisticated investor and to have such knowledge and experience in financial
and business matters as are necessary to evaluate the merits and risks of an
investment in the Series B Shares and the Warrants. Each Purchaser has been
given access to such information regarding the Company and its Subsidiaries as
it has requested and has had the opportunity to obtain additional
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information as desired and to ask questions and has received answers regarding
such information in order to evaluate the merits and the risks inherent in
holding the Series B Shares, the Warrants and the Common Stock issuable upon
conversion or exercise thereof, as the case may be. The facts set forth in the
preceding sentence, shall not affect any representation or warranty in this
Agreement of any party hereto or any condition to the obligations of the parties
hereto, nor shall it affect the Company's indemnification obligations arising
under Article XII hereof.
6.4 TRANSFER OF SERIES B SHARES, WARRANTS AND CONVERSION SHARES.
(a) Each Purchaser has been informed by the Company and
hereby agrees that Series B Shares, Warrants, Conversion Shares and Warrant
Shares may be transferred only (i) pursuant to public offerings registered under
the Securities Act, (ii) pursuant to Rule 144 promulgated under the Securities
Act (or any similar rule then in force), (iii) to an Affiliate of the
transferor, or (iv) subject to the conditions set forth in Section 6.4(b),
pursuant to any other legally-available means of transfer.
(b) In connection with any transfer of any Series B
Shares, Warrants, Conversion Shares or Warrant Shares (other than a transfer
described in Section 6.4(a)(i), (ii) or (iii)), the holder of such shares shall
deliver written notice to the Company describing in reasonable detail the
proposed transfer, together with an opinion of counsel (Xxxxxxxx & Xxxxx or such
other counsel which, to the Company's reasonable satisfaction, is knowledgeable
in securities law matters) to the effect that such transfer may be effected
without registration of such shares under the Securities Act. The holder of the
Securities being transferred shall not consummate the transfer until (i) the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the provisions of this Section 6.4 and Sections 9.6 and 9.7 as if it
were a Purchaser, or (ii) such holder shall have delivered to the Company an
opinion of such counsel that no subsequent transfer of such Securities shall
require registration under the Securities Act. Promptly upon receipt of any
opinion described in clause (ii) of the preceding sentence, the Company shall
prepare and deliver in connection with the consummation of the proposed
transfer, new certificates for the Securities being transferred that do not bear
the legend set forth in Section 6.4(c).
(c) Except as provided in Section 6.4(b), until
transferred pursuant to clauses (a)(i) or (a)(ii) above, each certificate
evidencing the ownership of Series B Shares, Warrants, Conversion Shares or
Warrant Shares shall be imprinted with a legend substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON MARCH __, 2002 AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY APPLICABLE STATE SECURITIES LAW. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH
IN THE SERIES B CONVERTIBLE PREFERRED STOCK and
warrant PURCHASE AGREEMENT DATED AS OF MARCH __,
2002 BETWEEN THE COMPANY (THE "COMPANY") AND THE
OTHER PARTIES THERETO. THE COMPANY RESERVES THE
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RIGHT TO REFUSE ANY TRANSFER OF SUCH SECURITIES
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS
SHALL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
HEREOF UPON WRITTEN REQUEST TO THE COMPANY.
ARTICLE VII
PRE-CLOSING COVENANTS OF THE COMPANY
7.1 ACCESS. From the date hereof until the Closing, the Company
shall permit the Purchasers, their respective agents and representatives to have
reasonable access to the management personnel, premises, books and records of
the Company and its Subsidiaries upon reasonable notice during regular business
hours.
7.2 CONDUCT OF THE COMPANY AND ITS SUBSIDIARIES. From the date
hereof until the Closing, the Company shall, and the Company shall cause each of
its Subsidiaries (other than any Unrestricted Subsidiary), to conduct their
respective businesses in the Ordinary Course of Business and to use their
reasonable best efforts to preserve intact their business organizations and
relationships with third parties, to preserve the goodwill of the suppliers,
customers and others having business relations with the Company or such
Subsidiaries. Neither the Company nor its Subsidiaries shall (i) take or agree
or commit to take any action that would make any representation and warranty set
forth in Article III hereof (other than those expressed as being made as at a
specific date) inaccurate in any respect at, or as of any time prior to, the
Closing, or (ii) omit or agree or commit to omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any respect
at any such time.
7.3 FURTHER ACTION. The Company shall use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. The Company agrees,
and agrees to cause its Subsidiaries, to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
7.4 NOTICE OF CERTAIN EFFORTS. The Company shall promptly notify
the Purchasers in writing of:
(a) any notice or other communication to or from any
Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any
Governmental Authority in connection with the transactions contemplated by this
Agreement;
(c) the occurrence, or failure to occur, of any event
which occurrence or failure would cause any representation and warranty of the
Company contained in Article III of this Agreement to be untrue or inaccurate in
any material respect (or, in the case of any such
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representation and warranty qualified by materiality or Material Adverse Effect,
to be untrue or inaccurate in any respect) at any time from the date hereof to
the Closing Date or that will result in the failure to satisfy any of the
conditions specified in Section 8.1. Such notice (i) shall specify the
representation or warranty so breached and (ii) will not be deemed to amend the
Schedules attached hereto unless so accepted as such by the Purchasers in
writing prior to the Closing, in which event such written acceptance shall be
deemed to cure the breach of any such representation or warranty and amend
and/or supplement the schedule related to such representation or warranty; and
(d) any failure of the Company or any of its Subsidiaries
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement.
7.5 CONFIDENTIALITY. The parties hereto agree that the
confidentiality agreement dated as of January 25, 2002, between the Company and
ABRY (the "CONFIDENTIALITY AGREEMENT") shall continue in full force and effect.
7.6 NO SOLICITATION. Until the earlier of (x) the termination of
this Agreement pursuant to Section 10.1 and (y) the Final Closing Date (the
period from the date of this Agreement until such earlier date is referred to
herein as, the "EXCLUSIVITY PERIOD"): (i) neither the Company and its affiliates
nor any of their respective subsidiaries (collectively, the "RESTRICTED PARTIES"
and each a "RESTRICTED PARTY") shall, directly or indirectly, initiate, solicit
or encourage (including by way of furnishing information or assistance), or take
any other action to facilitate, any inquiries or the making of any proposal that
constitutes, or would reasonably be expected to result in, a Competing
Transaction (as defined below), or enter into or maintain or continue
discussions or negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of their respective officers, directors,
employees, consultants or agents or any investment banker, financial advisor,
attorney, accountant or other representative retained by any Restricted Person
to take any such action; and (ii) the Company shall notify ABRY and Sandler in
writing (as promptly as practicable, but in any event, within two days) if any
written or oral request for information or proposal relating to a Competing
Transaction is made and shall keep ABRY and Sandler promptly advised of all such
requests and proposals, and shall provide ABRY and Sandler with a copy of any
such written requests or proposals and a summary of all oral proposals or
requests. As used herein, the term "COMPETING TRANSACTION" shall mean the offer
or sale of equity or equity-linked securities of the Company to a third party
other than (i) the Purchasers or (ii) between the Initial Closing Date and the
Final Closing Date, other stockholders of the Company so long as the offer or
sale to such other stockholders does not include, individually or in the
aggregate, more than 5,000 shares of Series B Preferred Stock and 160,000
Warrants.
7.7 PREPARATION OF THE PROXY STATEMENT; STOCKHOLDERS MEETING.
(a) As promptly as practicable following the date of this
Agreement, the Company shall prepare and file with the SEC a proxy statement
relating to the matters set forth in Section 9.3 for which Stockholder Approval
is sought (as amended or supplemented from time to time, the "PROXY STATEMENT")
and the Company shall use reasonable best efforts to respond
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as promptly as practicable to any comments of the SEC with respect thereto and
to cause the Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable following the date of this Agreement. The Company shall
promptly notify the Purchasers upon the receipt of any comments from the SEC or
its staff or any request from the SEC or its staff for amendments or supplements
to the Proxy Statement and shall provide the Purchasers with copies of all
correspondence between the Company and its representatives, on the one hand, and
the SEC and its staff, on the other hand. Notwithstanding the foregoing, prior
to filing or mailing the Proxy Statement (or any amendment or supplement
thereto) or responding to any comments of the SEC with respect thereto, the
Company (i) shall provide the Purchasers an opportunity to review and comment on
such document or response, (ii) shall include in such document or response all
comments reasonably proposed by the Purchasers and (iii) shall not file or mail
such document or respond to the SEC prior to receiving the Purchasers' approval,
which approval shall not be unreasonably withheld or delayed.
(b) If requested by the Company, each Purchaser shall use
its commercially reasonable efforts to assist the Company in preparing the Proxy
Statement, including, without limitation, providing to the Company any
information regarding such Purchaser required to be included therein.
(c) The Company shall, as promptly as practicable
following the date of this Agreement, establish a record date (which will be as
promptly as reasonably practicable following the date of this Agreement) for,
duly call, give notice of, convene and hold a meeting of its stockholders for
the purpose of obtaining the Stockholder Approval sought in accordance with
Section 9.3 (the "Stockholders Meeting"). The Company shall, through its Board
of Directors, recommend to its stockholders that they adopt this Agreement, and
shall include such recommendation in the Proxy Statement.
7.8 APPROVAL BY THE COMPANY'S STOCKHOLDERS. The Board of Directors
shall recommend the approval, adoption and authorization of the transactions
with the Purchasers, and the Company shall take all reasonable lawful action to
solicit such approval, adoption and authorization. No amendment or supplement to
the Proxy Statement will be made by the Company without consultation with the
Purchasers and each of their legal counsels.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 CONDITIONS TO OBLIGATIONS OF THE PURCHASERS AT INITIAL
CLOSING. The obligation of each Purchaser to purchase the Series B Shares and
the Warrants at the Initial Closing in accordance with Section 3.3 shall be
subject to the satisfaction or waiver by such Purchaser of the following
conditions precedent on or prior to the Initial Closing Date:
(a) the Series B Preferred Stock Certificate of
Designations shall have been filed with the Secretary of State of the State of
Delaware and shall be in full force and effect as of the Initial Closing Date
and shall not have been modified in any manner since that date;
(b) as of the Initial Closing Date there shall be an
absence of (i) any general suspension of trading in, or limitation on prices for
securities on any national securities exchange
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or in the over-the-counter market, (ii) the declaration of any banking
moratorium or any suspension of payments in respect of banks or any material
limitation (whether or not mandatory) on the extension of credit by lending
institutions in the United States, or (iii) the commencement or escalation of a
war or material armed hostilities or other international or national calamity
involving the United States and having an adverse effect on the functioning of
the financial markets in the United States;
(c) as of the Initial Closing Date the representations
and warranties made by the Company in Article IV hereof shall be true and
correct in all respects to the extent they are qualified by materiality or
Material Adverse Effect, and to the extent not so qualified shall be true and
correct in all material respects;
(d) the Company shall have complied in all material
respects with the covenants set forth in this Agreement that are required to be
performed by the Company on or before the Initial Closing Date;
(e) as of the Initial Closing Date, the Company shall
have received written confirmation from the NYSE that, subject to receipt of the
Stockholder Approval (which the Company shall seek to obtain in accordance with
Section 9.3), (i) the authorization and issuance of the Series B Shares, the
Warrants, the Conversion Shares and the Warrant Shares will not violate any of
the stockholder approval or voting rules or any listing or maintenance
requirements of the NYSE, and (ii) the NYSE will not object, under Rule 313 of
the NYSE Company Guide, to the terms of the Series B Shares as set forth in the
Series B Preferred Stock Certificate of Designations;
(f) as of the Initial Closing Date, the Company shall
have paid the Closing Fee to the Purchasers participating in the Initial Closing
and reimbursed ABRY for its transaction expenses, in each case as contemplated
under Section 13.5 of this Agreement;
(g) as of the Initial Closing Date the Company shall have
received all consents and approvals, including, without limitation, Board of
Director, governmental and third party consents or approvals, that are required
to be obtained in connection with the transactions contemplated under this
Agreement and the Related Documents (other than receipt of the Stockholder
Approval, which the Company shall seek to obtain in accordance with Section
9.3);
(h) three individuals designated by the Purchasers (the
"SERIES B DIRECTORS") shall have been duly nominated and elected to serve as
members of the Board of Directors, effective as of the Initial Closing Date (it
being acknowledged and agreed that none of the Series B Directors shall be
compensated for serving as members of the Board of Directors, other than
customary expense reimbursement consistent with the Company's policies in
respect thereto); and
(i) the following documents and items shall have been
delivered to each Purchaser at or prior to the Initial Closing:
(i) a fully executed copy of the Credit
Agreement, satisfactory in form and substance to such Purchaser (which
Credit Agreement, without further amendment or modification thereto,
shall be in effect on the Initial Closing Date);
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(ii) fully executed and delivered amendments to
each of the Prior Registration Agreements, satisfactory in form and
substance to such Purchaser (collectively, the "AMENDMENTS"), which
Amendments shall be in effect on the Initial Closing Date without
further amendment or modification thereto;
(iii) fully executed and delivered Resignation
Agreements, satisfactory in form and substance to such Purchaser, which
Resignation Agreements shall be in effect on the Closing Date without
further amendment or modification thereto;
(iv) the written opinion of Xxxxx, Day, Xxxxxx &
Xxxxx, counsel to the Company, dated as of the Initial Closing Date and
satisfactory in form and substance to such Purchaser;
(v) a counterpart of the Registration Rights
Agreement duly executed and delivered by the Company;
(vi) certificates evidencing ownership of the
Series B Shares and the Warrants purchased by such Purchaser, in each
case duly executed and delivered by the Company;
(vii) a certificate of a duly authorized officer
of the Company dated as of the Initial Closing Date certifying that (A)
the closing conditions described in Section 8.1(a) through Section
8.1(h) have been satisfied, and (B) the resolutions of the Board of
Directors attached thereto (which resolutions shall have, among other
things, (x) authorized all of the transactions contemplated by this
Agreement and the Related Documents, approved the Related Documents
(including, without limitation, the Series B Preferred Stock
Certificate of Designations), (y) duly nominated and elected the Series
B Directors to the Board of Directors effective as of the Closing Date,
and (z) resolved that (i) the Series B Directors and each other member
of the Board of Directors elected by the holders of Series B Shares
from time to time in accordance with the terms thereof, if any, shall
be "Continuing Directors" as such term is defined in the Indenture and
as it will be defined in the New Indenture and (ii) the election of
such directors shall not cause a "Change in Control" as such term is
defined in the Credit Agreement) were duly adopted and have not been
rescinded or amended;
(viii) a copy of the consolidated financial
statements of the Company and its Consolidated Subsidiaries for the
fiscal year ended December 31, 2001, together with the report of the
Company's auditors with respect thereto, in each case satisfactory in
form and substance to such Purchaser in its sole discretion;
(ix) a fully executed amendment to the Rights
Plan satisfactory in form and substance to the Purchasers, which
amendment shall be in effect on the Initial Closing Date without
further amendment or modification thereto; and
(x) such other documents relating to the
transactions contemplated hereby as the Purchasers may reasonably
request; and
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(j) each other Purchaser shall have funded the portion of
the Purchase Price payable by such Purchaser at the Initial Closing in
accordance with Section 3.3.
8.2 CONDITIONS TO OBLIGATIONS OF THE PURCHASERS AT THE FINAL
CLOSING. The obligations of each Purchaser to purchase the Series B Shares and
the Warrants at the Final Closing in accordance with Section 3.3 shall be
subject to the satisfaction or waiver of the following conditions precedent on
or prior to the Final Closing Date:
(a) the Initial Closing shall have occurred;
(b) as of the Final Closing Date neither the Company nor
any Subsidiary shall have suffered or caused to have been suffered since
September 30, 2001, any occurrence, event or transaction which, individually or
together with each other occurrence, event or transaction, shall have had or
could reasonably be expected to have had a Material Adverse Effect;
(c) as of the Final Closing Date the representations and
warranties made by the Company in Article IV hereof shall be true and correct in
all respects to the extent they are qualified by materiality or Material Adverse
Effect, and to the extent not so qualified shall be true and correct in all
material respects;
(d) the Company shall have complied in all material
respects with the covenants set forth in this Agreement that are required to be
performed by the Company on or before the Final Closing Date;
(e) each Purchaser shall have received a certificate of a
duly authorized officer of the Company dated as of the Final Closing Date
certifying that the closing conditions described in Section 8.2(b) through
Section 8.2(d) and Section 8.2(h) have been satisfied;
(f) each Purchaser shall have received the written
opinion of Xxxxx, Day, Xxxxxx & Xxxxx, counsel to the Company, dated as of the
Final Closing Date and satisfactory in form and substance to such Purchaser;
(g) each other Purchaser shall have funded the portion of
the Purchase Price payable by such Purchaser at the Final Closing in accordance
with Section 3.3; and
(h) on or prior to the Final Closing Date, the Company
shall have amended the Stock Option Plans and not less than 80% of the options,
awards or securities granted to the Company's executive officers thereunder as
of the Final Closing Date, and such amendments shall provide that the
transactions contemplated by this Agreement and the Related Documents shall not
constitute a "change of control" under the terms of such plans, options, awards
or securities or otherwise result in the acceleration of vesting of any portion
of such options, awards or securities.
8.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of
the Company to sell and issue the Series B Shares and the Warrants to any
Purchaser at any Closing in accordance with Section 3.3 shall be subject to the
delivery by such Purchaser of (i) the Purchase Price payable by such Purchaser
at such Closing in accordance with Section 3.3, and (ii) an executed letter
agreement pursuant to which each Series B Director nominated by such Purchaser
pursuant
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to Section 9.7 hereof agrees to resign from the Board of Directors at such time
as no shares of Preferred Stock remain outstanding.
ARTICLE IX
COVENANTS
9.1 RESTRICTED ACTIONS. Without the prior written consent of the
holders of a majority of the Series B Shares then outstanding, the Company shall
not, and shall not permit any Subsidiary (other than an Unrestricted Subsidiary)
to, directly or indirectly:
(a) use the proceeds from the sale of the Series B Shares
and the Warrants hereunder other than (i) to refinance indebtedness of the
Company and its Subsidiaries outstanding under the Credit Agreement in
accordance with the terms of this Agreement, (ii) to pay the Closing Fee and
other fees and expenses associated with the transactions contemplated by this
Agreement and the Related Documents, and (iii) for working capital and general
corporate purposes;
(b) make any Restricted Payment or Restricted Investment
unless (i) the Leverage Ratio, as of such time, is less than 6.0 to 1.0, and
(ii) such Restricted Payment or Restricted Investment would otherwise be
permitted under the terms of the Indenture as in effect on the date hereof after
application of a deemed Restricted Payment in an amount equal to the aggregate
Liquidation Value of the Series B Shares then outstanding (plus all Unpaid
Dividends thereon), in each case other than any transaction under the Executive
Loan Program to the extent such transaction is otherwise permitted under the
Indenture;
(c) except for the execution of the Credit Agreement
contemplated by Section 8.1(i)(i) on the date hereof and the execution of the
New Indenture having terms not more restrictive than those reflected in the
"Description of Notes" set forth in the Offering Circular, enter into any
agreement, instrument, arrangement or understanding (or amend or modify the
terms of any existing agreement, instrument, arrangement or understanding),
including the Indenture, the Credit Agreement and New Indenture, which by its
terms would (under any circumstance) (i) modify the definition of "Change of
Control," "Continuing Directors" or "Voting Equity Interests" as defined therein
or modify any other definition contained therein that effects the meaning of the
term "Change of Control" as defined therein, or (ii) restrict the Company's
ability to comply with the terms of this Agreement or any of the Related
Documents in any respect, including, without limitation, the Company's ability
to pay any amount due to the Purchasers under this Agreement or the Series B
Preferred Certificate of Designations; PROVIDED, HOWEVER, that this Section
9.1(c) shall not restrict the Company's ability to refinance any Indebtedness
outstanding under the Credit Agreement, the Indenture or the New Indenture to
the extent that the terms of the applicable refinancing indebtedness are not
more restrictive (including with respect to the maturity date thereof) with
respect to the Company's ability to pay any amount due to the Purchasers under
this Agreement or the Series B Preferred Stock Certificate of Designations than
the terms set forth in the Credit Agreement, the Indenture or the New Indenture,
as applicable.
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(d) (x) prior to the 6th anniversary of the Initial
Closing Date, sell, lease, transfer or otherwise dispose of any asset of the
Company or its Subsidiaries, including the capital stock of any Subsidiary
(other than an Unrestricted Subsidiary and other than any pledge of such capital
stock to secure Indebtedness of the Company or its Subsidiaries), unless (i)
such transaction is conducted in the Ordinary Course of Business, (ii) the
aggregate net proceeds received in connection with all of such transactions in
any given fiscal year (whether paid in cash or property) does not exceed (A) 5%
of the Consolidated Total Assets as of the last day of the prior fiscal year or
(B) 5% of EBITDA for the 12 month period ending on the last day of the prior
fiscal year, in each case determined in accordance with this Agreement, or (iii)
in the case of a transaction involving capital stock of a Subsidiary, such
transaction is between the Company or its wholly-owned Subsidiary, on the one
hand, and any other wholly-owned Subsidiary of the Company, on the other hand;
or (y) from and after the 6th anniversary of the Initial Closing Date, sell,
lease, transfer or otherwise dispose of any asset of the Company or its
Subsidiaries, including the capital stock of any Subsidiary (other than any
pledge of such capital stock to secure Indebtedness of the Company or its
Subsidiaries to the extent such pledge was made prior to the 6th anniversary of
the Initial Closing Date);
(e) (x) prior to the 6th anniversary of the Initial
Closing Date, enter into or suffer to exist any contract, agreement, arrangement
or transaction with any Affiliate (an "AFFILIATE TRANSACTION"), other than a
Permitted Affiliate Transaction, unless such Affiliate Transaction (i) is
determined by a majority of the Board of Directors to be fair and reasonable to
the Company, and no less favorable to the Company than could have been obtained
in an arm's length transaction with a non-Affiliate, and (ii) is approved by a
majority of the members of the Board of Directors that are disinterested in such
transaction; or (y) from and after the 6th anniversary of the Initial Closing
Date, enter into or suffer to exist any Affiliate Transaction;
(f) materially alter its principal line of business as
conducted on the Closing Date or engage in any business unless such business
reasonably related to such principal line of business as conducted on the
Closing Date;
(g) grant any options to purchase shares of Common Stock
or other compensatory equity awards, or securities convertible into or
exchangeable for shares of Common Stock, other than options, awards or
securities (i) granted pursuant to a Stock Option Plan, (ii) with respect to
awards or securities that have an exercise price, having an exercise price equal
to or greater than the "Market Value per Share" (as defined in the Company's
1998 Equity and Performance Incentive Plan) of the Common Stock as of the date
of such grant, and (iii) accounting for, alone or together with all other
options, awards or securities granted under the Stock Option Plans, not more
than 15% of the outstanding Common Stock determined as of the day before the
Closing Date on a fully diluted, as-if-converted basis;
(h) from and after the 6th anniversary of the Initial
Closing Date, incur, create, become or be liable in any matter with respect to
or permit to exist any Indebtedness other than Indebtedness existing as of such
date and Indebtedness incurred thereafter under the revolving credit portion of
the Credit Agreement in the Ordinary Course of Business to provide for the
Company's working capital needs;
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(i) from and after the 6th anniversary of the Initial
Closing Date, acquire (by merging or consolidating with, or by purchasing an
equity interest in or a portion of the assets of, or by any other manner) any
business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire any
material assets other than inventory and other assets to be sold or used in the
Ordinary Course of Business;
(j) from and after the 6th anniversary of the Initial
Closing Date, hire or terminate any executive officer of the Company or modify
or alter in any way the employment terms relating to any executive officer of
the Company or any of its Subsidiaries; or
(k) from and after the Stockholders Meeting, nominate a
number of directors for election to the Board of Directors (other than as may be
required in accordance with the Series B Preferred Stock Certificate of
Designations) such that the total number of directors on the Board of Directors
would be greater than 12 directors.
9.2 REQUIRED ACTIONS. For so long as any of the Series B Shares
remain outstanding, the Company shall and, where applicable, shall cause each
Subsidiary (other than any Unrestricted Subsidiary) to:
(a) maintain a Leverage Ratio of not more than 7.5 to
1.0, determined in accordance with this Agreement for the twelve month period
ending on the last day of December, March, June and September of each year
beginning with the period ending on December 31, 2002;
(b) use its reasonable best efforts to maintain at all
times a valid listing for the Common Stock on a national securities exchange or
the NYSE;
(c) maintain and keep its properties in good repair,
working order and condition, and from time to time make all necessary or
desirable repairs, renewals and replacements, so that its businesses may be
properly and advantageously conducted in all material respects at all times;
(d) maintain or cause to be maintained with financially
sound and reputable insurers that have a rating of "A" or better as established
by Best's Rating Guide (or an equivalent rating with such other publication of a
similar nature as shall be in current use), (i) public liability and property
damage insurance with respect to their respective businesses and properties
against loss or damage of the kinds and in amounts customarily carried or
maintained by companies of established reputation engaged in similar businesses,
and (ii) directors' and officers' liability insurance providing at least the
same coverage and amounts and containing terms and conditions which are not less
advantageous in any material respect, in each case than the directors' and
officers' liability insurance maintained by the Company as of the Closing Date;
(e) pay and discharge when due all tax liabilities,
assessments and governmental charges or levies imposed upon its properties or
upon the income or profits therefrom (in each case before the same become
delinquent and before penalties accrue thereon), unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP, consistently applied, are being maintained by the Company;
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(f) at all times cause to be done all things necessary to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary to the conduct of its businesses; PROVIDED,
that the Company may liquidate, merge out of existence or otherwise dissolve
immaterial Subsidiaries and Unrestricted Subsidiaries;
(g) comply with all applicable laws, rules and
regulations of all Government Agencies, the violation of which could reasonably
be expected to have a Material Adverse Effect;
(h) maintain proper books of record and account which
present fairly in all material respects its financial condition and results of
operations and make provisions on its financial statements for all such proper
reserves as in each case are required in accordance with GAAP, consistently
applied;
(i) reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purposes of issuance upon
conversion of the Series B Shares and exercise of the Warrants, such number of
shares of Common Stock as are issuable upon the conversion of all outstanding
Series B Shares or exercise of the Warrants. All shares of Common Stock which
are so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all Taxes, liens and charges. The Company shall take
all such actions as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon which
shares of Common Stock may be listed (except for official notice of issuance
which shall be immediately transmitted by the Company upon issuance);
(j) use its reasonable best efforts to have each
individual who will replace an Agreed Director on the Board of Directors execute
a resignation agreement in substantially the form executed by the Agreed
Directors prior to such individual's nomination and election to serve on the
Board of Directors; PROVIDED, that the Company shall not nominate any individual
who refuses to execute a resignation agreement; and
(k) use its reasonable best efforts to at all times file
all reports (including annual reports, quarterly reports and the information,
documentation and other reports) required to be filed by the Company under the
Exchange Act and Sections 13 and 15 of the rules and regulations adopted by the
SEC thereunder, and the Company shall use its reasonable best efforts to file
each of such reports on a timely basis, and take such further action as any
holder or holders of Securities may reasonably request, all to the extent
required to enable such holders to sell Securities pursuant to Rule 144 adopted
by the SEC under the Securities Act (as such rule may be amended from time to
time) or any similar rule or regulation hereafter adopted by the SEC and to
enable the Company to register securities with the SEC on Form S-3 or any
similar short-form registration statement and upon the filing of each such
report deliver a copy thereof to each holder of the Series B Shares (or, if the
Company is no longer subject to the requirements of the Exchange Act, provide
reports in substantially the same form and at the same times as would be
required if it were subject to the Exchange Act).
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9.3 STOCKHOLDER APPROVAL. The Company will take all reasonable
action necessary in accordance with applicable laws, statutes, rules,
regulations, determinations of any arbitrator, court, other Governmental Agency
and stock exchange, and its Certificate of Incorporation and By-Laws to convene
a meeting of stockholders to be held on or before June 28, 2002 (the "APPROVAL
DATE") to obtain the approval and authorization by the Company's stockholders
of: (i) the issuance of Common Stock upon conversion of the Series B Preferred
Stock; (ii) the issuance of Common Stock upon exercise of the Warrants; (iii)
the amendment of the Certificate of Incorporation in order (A) to effect the
increase in the number of authorized shares of Common Stock (x) to 435,000,000,
if the approvals referred to in clauses (i) and (ii) above are not obtained, or
(y) to 155,000,000, if the approvals in clauses (i) and (ii) are obtained, and
(B) that the Board of Directors, in its sole discretion, will have the power,
right and authority to establish the size of the Board of Directors from time to
time; and (iv) such other matters as may be necessary or advisable to consummate
the transactions contemplated by this Agreement (such approval by stockholders
of the matters described in clauses (i), (ii) and (iii)(A) is referred to herein
as the "SHARE ISSUANCE APPROVAL" and such approval by Stockholders of all such
matters is herein referred to as the "STOCKHOLDER APPROVAL"). If the Company
fails to obtain the Stockholder Approval at such meeting of stockholders, it
shall use its reasonable best efforts to obtain the Stockholder Approval at each
successive stockholders' meeting until the Stockholder Approval is obtained.
9.4 INFORMATION RIGHTS. The Company shall furnish to each
Purchaser:
(a) within 90 days after the end of each fiscal year, its
Form 10-K containing its audited consolidated balance sheet and related
statements of income, stockholders' equity and cash flows as of the end of and
for such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 90 days after the end of each fiscal year, (i)
its consolidating balance sheets and related statements of income, stockholders'
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year and (ii) an
unaudited income statement for each of the Company's business lines, all
certified by one of its Financial Officers as presenting fairly in all material
respects the results of operations of the Company on a consolidating basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year, its Form 10-Q containing its
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year;
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(d) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year, (i) its consolidating balance sheet
and related statements of income, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year and (ii) an unaudited income statement for
each of the Company's business lines, all certified by one of its Financial
Officers as presenting fairly in all material respects the results of operations
of the Company on a consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(e) concurrently with any delivery of financial
statements under clauses (a) or (c) above, a certificate of a Financial Officer
of the Company (i) certifying as to whether an Event of Noncompliance has
occurred and, if an Event of Noncompliance has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance with
Sections 9.1(b), 9.1(c), 9.1(d) and 9.2(a) of this Agreement, and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
Most Recent Balance Sheet Date and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such
certificate;
(f) concurrently with any delivery of financial
statements under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained knowledge
during the course of their examination of such financial statements of any Event
of Noncompliance (which certificate may be limited to the extent required by
accounting rules or guidelines);
(g) by no later than December 31 of each fiscal year, a
budget and business plan for the immediately succeeding fiscal year in the form
approved by the Company's board of directors, together with a business forecast
for such succeeding fiscal year, all in form, scope and detail satisfactory to
the Purchasers and on a quarterly basis for each fiscal quarter of such
succeeding fiscal year; (h) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Company or any Subsidiary with the SEC, or any Governmental Agency
succeeding to any or all of the functions of the SEC, or with any national
securities exchange, or distributed by the Company to its stockholders
generally, as the case may be;
(i) promptly after the same are delivered to the members
of the Board of Directors, copies of all business plans and other financial
plans relating to the Company and/or its Subsidiaries; and
(j) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Company or any Subsidiary, or compliance with the terms of the this
Agreement or any Related Document, as such Purchaser may reasonably request.
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9.5 ACCESS RIGHTS. The Company shall permit the Purchasers, their
respective agents and representatives to have reasonable access to the
management personnel, premises, books and records of the Company and its
Subsidiaries upon reasonable notice during regular business hours.
9.6 RESTRICTIONS ON CONVERSION/EXERCISE/TRANSFERS.
(a) From and after the Initial Closing Date until the
date on which the Company receives the Share Issuance Approval, if any Purchaser
intends (i) to convert all or any portion of its Series B Shares, or (ii) to
exercise all or any portion of its Warrants, then prior to effecting such
conversion or exercise such Purchaser shall deliver written notice (a
"CONVERSION/EXERCISE NOTICE") of such intention, which could be included as part
of any Sale Notice delivered pursuant to Section 9.6(b) below, to each other
Purchaser not less than 10 days prior to the date of such proposed conversion or
exercise. Such notice shall describe in reasonable detail the number of Series B
Shares to be converted or the number of Warrants to be exercised (the
"CONVERSION AMOUNT"). Each of the other Purchasers shall be entitled to convert
or exercise a ratable and PRO RATA portion of the Conversion Amount (as
described below) by delivering written notice of such election to the Purchaser
which delivered such Conversion/Exercise Notice within 5 days after delivery of
the Conversion/Exercise Notice. Each Purchaser who timely delivers such an
election notice shall be entitled to convert or exercise its ratable and PRO
RATA portion of the Conversion Amount, based on the number of Series B Shares or
Warrants held by such electing Purchaser, as applicable, and the aggregate
number of Series B Shares or Warrants held by the Purchaser who delivered the
Conversion/Exercise Notice and all other Purchasers who elected to participate
in the proposed conversion or exercise. If none of the other Purchasers elects
to participate in the proposed conversion or exercise in accordance with this
Section 9.6(a), then during the 5 day period beginning on the sixth day after
delivery of the Conversion/Exercise Notice, the Purchaser which delivered such
notice may convert all of the Series B Shares or exercise all of the Warrants,
as applicable, described on the relevant Conversion/Exercise Notice. Thereafter,
the conversion of shares of Series B Stock and the exercise of Warrants by such
Purchaser shall be subject to the notice requirement set forth in the first
sentence of this Section 9.6(a).
(b) From and after the Initial Closing Date, if any
Purchaser intends (i) to convert all or any portion of its Series B Shares, (ii)
to exercise all or any portion of its Warrants, or (iii) to sell all or any of
the shares of Common Stock acquired by such Purchaser upon conversion of Series
B Shares or exercise of Warrants to one or more third parties in a Public Sale,
in each case at a time when the market price of the Common Stock is less than
the then Applicable Share Minimum, such Purchaser (the "PROPOSED SELLER") shall
deliver written notice (the "SALE NOTICE") of such intention to each other
Purchaser not less than 5 days prior to the date of such proposed conversion,
exercise or sale. Such Sale Notice shall describe in reasonable detail the terms
of such proposed sale, including the then Applicable Share Minimum, the number
of Series B Shares to be converted, the number of Warrants to be exercised and
the number of shares of Common Stock to be sold (and, in such case, the proposed
sale price). Each of the other Purchasers shall be entitled to participate
ratably in such exercise or sale (as described below) by delivering written
notice of such election (an "ELECTION NOTICE") to the Proposed Seller within 3
days after delivery of the Sale Notice. Each Purchaser who timely delivers an
Election Notice shall be entitled (i) to convert its ratable portion of the
Series B Shares described
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in the Sale Notice, based on the number of Series B Shares held by such
Purchaser and the aggregate number of Series B Shares held by the Proposed
Seller and all Purchasers who elected to participate in the proposed sale
(collectively, the "SELLERS" and each a "SELLER"), (ii) to exercise its ratable
portion of the Warrants described in the Sale Notice, based on the number of
Warrants held by such Purchaser and the aggregate number of Warrants held by the
Sellers, and/or (iii) to sell its ratable portion of the shares of Common Stock
described in the Sale Notice, based on the number of the shares of Common Stock
held by such Purchaser and the aggregate number of the shares of Common Stock
held by the Sellers. Any such sale shall be effectuated in one or more
coordinated sales executed by a single, mutually acceptable broker, and each
sell order issued to such broker shall provide for the pro rata sale of shares
of Common Stock held by the Sellers based on the number of shares of Common
Stock held by each Seller and the aggregate number of Conversion Shares held by
all of the Sellers. If none of the other Purchasers delivers an Exercise Notice
to the Proposed Seller in accordance with this Section 9.6(b), then during the
30 day period beginning on the sixth day after delivery of the Sale Notice, the
Proposed Seller may convert all of the Series B Shares, exercise all of the
Warrants, and sell all of the shares of Common Stock described on the relevant
Sale Notice. Thereafter, the conversion of shares of Series B Stock, the
exercise of Warrants and the sale of shares of Common Stock by the Proposed
Seller shall be subject to the notice requirement set forth in the first
sentence of this Section 9.6(b). This Section 9.6(b) shall terminate
automatically when either the ABRY Parties, on the one hand, or Sandler, on the
other hand, cease to hold 5,000 or more Series B Shares (as may be adjusted to
reflect any stock split, stock dividend, reclassification or other transaction
having a similar effect).
(c) From and after the Initial Closing Date, if the ABRY
Parties, on the one hand, or Sandler, on the other hand, intend to sell more
than 10,000 Series B Shares (as may be adjusted to reflect any stock split,
stock dividend, reclassification or other transaction having a similar effect)
to one or more third parties in a single transaction or a series of related
transactions, such Purchaser(s) (the "PROPOSED TRANSFEROR(S)") shall deliver
written notice (the "TRANSFER NOTICE") of such intention to each other Purchaser
not less than 10 days prior to the date of such proposed sale. Such Transfer
Notice shall describe in reasonable detail the terms of such proposed sale,
including the identity of the transferee(s), the type and number of Series B
Shares to be sold, the purchase price and the anticipated closing date of such
sale. Each of the other Purchasers shall be entitled to participate ratably in
such sale (as described below) by delivering written notice of such election (a
"CO-SALE NOTICE") to the Proposed Transferor(s) within 5 days after delivery of
the Transfer Notice. Each Purchaser who timely delivers a Co-Sale Notice shall
be entitled to sell its ratable portion of the Series B Shares described in the
Transfer Notice on identical terms as those set forth in the Transfer Notice,
based on the number of Series B Shares held by such electing Purchaser and the
aggregate number of Series B Shares held by all Purchasers participating in such
sale. If none of the other Purchasers delivers a Co-Sale Notice to the Proposed
Transferor(s) in accordance with this Section 9.6(c), then during the 30 day
period beginning on the sixth day after delivery of the Transfer Notice, the
Proposed Transferor(s) may sell all of the Series B Shares described on such
Transfer Notice. Thereafter, the sale of Series B Shares by the Proposed
Transferor(s) shall be subject to the notice requirement set forth in the first
sentence of this Section 9.6(c).
9.7 ELECTION OF SERIES B DIRECTORS. In the election of the Series
B Directors pursuant to Section 5B of the Series B Preferred Stock Certificate
of Designations, each Purchaser agrees to
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vote its Series B Shares and to take such other actions necessary or desireable
to ensure that the Series B Directors are comprised of at least two (2) nominees
of ABRY and one (1) nominee of Sandler. No Series B Director shall be removed
from the Board or any committee thereof (with or without Cause) other than at
the written request of the Purchaser(s) which have the right to designate such
Series B Director hereunder (determined on the basis of a vote or written
consent of the relevant Purchaser(s)); PROVIDED, HOWEVER, that the holders of a
majority of the Series B Shares may remove any Series B Director for Cause but a
replacement Series B Director may only be designated by the Purchaser(s) which
have the right to designate such Series B Director hereunder. In the event that
any Series B Director designated hereunder for any reason ceases to serve as a
member of the Board or any committee thereof during such representative's term
of office, the resulting vacancy on the Board or such committee shall be filled
by a representative designated by the Purchaser(s) which have the right to
designate the director who ceases to serve. For purposes hereof, the term
"CAUSE" means, with respect to any Person, (i) the commission of a felony or a
crime involving moral turpitude or the commission of any other act or omission
by such Person involving dishonesty, disloyalty or fraud with respect to the
Company, or (ii) conduct by such Person which brings the Company into
substantial public disgrace or disrepute. This Section 9.7 shall terminate
automatically upon the earlier to occur of (x) the date on which Sandler, on the
one hand, or the ABRY Parties, on the other hand, cease to own Series B Shares
having an aggregate Liquidation Value of $3,750,000, and (y) the date on which
the Purchasers cease to hold, in the aggregate, at least 25,000 shares of Series
B Preferred Stock (subject to adjustment to reflect any stock split, stock
dividend, reclassification or other transaction having a similar effect).
9.8 COVENANT REGARDING STOCK OPTION PLANS. The Company shall use
its commercially reasonable efforts to obtain the amendments described in
Section 8.2(h) hereof. From and after the date of the Original Agreement the
Company has not, and from and after the date of this Agreement, the Company
shall not, grant any options to purchase shares of Common Stock or other
compensatory equity awards, or securities convertible into or exchangeable for
shares of Common Stock if the transactions contemplated by this Agreement and
the Related Documents would constitute a "change of control" under the terms of
such options, awards or securities or otherwise result in the acceleration of
vesting of any portion of such options, awards or securities.
9.9 SALE OF THE COMPANY.
(a) Subject to Section 9.9(d) below, if the Company
breaches or fails to perform or observe its obligations arising under Section
9.2(a) hereof and such breach, failure or non-observance continues to exist for
four consecutive fiscal quarters, then the holders of a majority of the Series B
Shares then outstanding (the "INITIATING HOLDERS") shall have the right to cause
the Company to seek a buyer for all of the assets or issued and outstanding
capital stock of the Company. The Initiating Holders shall exercise their rights
under Section 9.9(a) by delivery of a written notice to the Company and all
other Purchasers to such effect, and identifying an investment bank (the
"INVESTMENT BANK"), which firm shall be reasonably acceptable to the Board of
Directors, to conduct such sale.
(b) Upon delivery to the Company of a written notice
referred to in Section 9.9(a), the Company and each other party hereto agrees to
use their reasonable best efforts to
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take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable to effect the sale of the Company in accordance
with the following provisions (it being understood that no Purchaser shall be
required under this Section 9.9 to vote in favor of such sale or to sell their
shares of the Company's capital stock pursuant to such sale):
(i) The Investment Bank will establish
procedures reasonably acceptable to the Initiating Holders to effect an
orderly sale of the Company with the objective of achieving the highest
practicable value for the stockholders of the Company within a
reasonable period of time. The Company agrees to cooperate with the
Investment Bank in accordance with such procedures, and agrees to use
its reasonable best efforts to reach agreement on the optimum structure
and the terms and conditions for the sale of the Company (including
whether such sale will be by merger or sale of assets or capital stock)
and will retain independent legal counsel of appropriate expertise,
reasonably acceptable to the Initiating Holders, to advise the Company
on such sale. To the extent permitted by applicable law, the Company
agrees to pay all fees and expenses of the Investment Bank and such
legal counsel, as well as the fees and expenses of one law firm
retained by the Initiating Holders in connection with such sale.
(ii) If the sale of the Company is structured as
a sale of assets, the Company agrees to execute and deliver or cause to
be executed and delivered all documents, certificates, agreements and
other writings and to take, or cause to be taken, all such actions as
may be necessary or desirable to vest in the purchaser(s) thereof good
and marketable title to such assets.
(iii) The rights and obligations of the Purchasers
under this Section 9.9(b) shall be subject to the following conditions:
(A) upon the consummation of any such
sale of the capital stock of the Company, each Purchaser will
receive consideration in an amount per Series B Share at least
equal to the Series B Liquidation Preference in effect from
time to time;
(B) upon the consummation of any such
sale of the capital stock of the Company, all of the
Purchasers will receive the same form and amount of
consideration per share of capital stock or if any Purchaser
is given an option as to the form of consideration to be
received, all Purchasers participating therein will be given
the same option; and
(C) in the case of any such sale of the
issued capital stock of the Company, the liability of any
Purchaser for misrepresentation or indemnity will not exceed
an amount equal to the proceeds received by such Purchaser in
such sale (PROVIDED, that in no event shall any Purchaser be
required to make any representation or warranty concerning the
Company, its Subsidiaries or their respective businesses or to
provide any indemnity with respect to the breach of any such
representations and warranties).
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(c) In connection with any sale of the Company conducted
pursuant to this Section 9.9, the Company shall take all actions necessary to
ensure that the Rights Plan shall not apply to such transaction.
(d) Notwithstanding the foregoing, the rights set forth
in this Section 9.9 shall not be effective at any time when representatives of
the Purchasers constitute a majority of the Board of Directors, whether elected
pursuant to Section 5B or Section 8B of the Series B Preferred Stock Certificate
of Designations or otherwise.
9.10 OBSERVER RIGHTS. The Company shall give the ABRY Parties and
Sandler written notice of each meeting of the Board of Directors (or any of its
Subsidiaries' board of directors) and any committees thereof, at the same time
and in the same manner as notice is given to the directors of the relevant board
and the Company shall permit one representative of the ABRY Parties and one
representative of Sandler to attend, as observers, all such meetings; PROVIDED,
that in the case of telephonic meetings, such parties need receive only actual
notice thereof at the same time and in the same manner as notice is given to the
directors of the relevant board and representatives of such parties shall be
given the opportunity to listen to such telephonic meetings. Each representative
shall be entitled to receive all written materials and other information
(including, without limitation, copies of meeting minutes) given to directors of
the board in connection with such meetings at the same time such materials and
information are given to such directors. The Company shall give written notice
of any action by written consent in lieu of a meeting of directors of the
Company (or any of its Subsidiaries) to each Purchaser prior to the effective
date of such consent describing in reasonable detail the nature and substance of
such action. The rights arising under this Section 9.10 shall terminate
automatically with respect to any Purchaser that ceases to hold any Preferred
Shares, Warrants, Conversion Shares or Warrants Shares.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time
prior to the Initial Closing:
(a) by ABRY, so long as ABRY is not in material breach of
any covenant or agreement set forth in this Agreement, if there has been a
material breach by the Company or any of its Subsidiaries of any covenant or
agreement of the Company set forth in this Agreement;
(b) by Sandler and with respect to Sandler only, so long
as Sandler is not in material breach of any covenant or agreement set forth in
this Agreement, if, prior to the Initial Closing Date, this Agreement is amended
or any provision hereof is waived without the prior written consent of Sandler;
(c) by the Company, so long as the Company is not in
material breach of any covenant or agreement set forth in this Agreement, if
there has been a material breach by the Purchasers of any covenant or agreement
of the Purchasers set forth in this Agreement;
(d) by mutual written agreement of the Company and ABRY;
and
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(e) by either the Company or ABRY if the Initial Closing
shall not have been consummated on or before March 28, 2002.
The party or parties desiring to terminate this Agreement pursuant to any of
clauses (a) through (e) above shall give written notice of such termination to
the other parties.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 10.1, this Agreement shall forthwith become void and there
shall be no liability or obligation of any party (or any stockholder, partner,
director, officer, employee, agent, consultant or representative of such party)
to the other parties to this Agreement, except that (i) ARTICLE XIII shall
continue in full force and effect, and (ii) nothing herein will relieve any
party from liability for any breach of any representation, warranty, agreement
or covenant contained herein prior to such termination.
ARTICLE XI
SURVIVAL
11.1 SURVIVAL. The representations and warranties of the Purchasers
and the Company contained herein shall survive the Closing and expire on the
date that is 30 days after the date on which the Company files with the SEC its
Form 10-K for the fiscal year ending on December 31, 2003; EXCEPT, that (i) the
representations and warranties made by the Company in Sections 4.1, 4.2, 4.3,
4.25, 4.26, 4.27 and 4.28 shall survive indefinitely, and (ii) the
representations and warranties made by the Company in Section 4.21(e) shall
survive for the duration of any applicable statute of limitations (including any
extensions thereof).
ARTICLE XII
INDEMNIFICATION
12.1 INDEMNIFICATION.
(a) In consideration of the Purchasers' execution and
delivery of this Agreement and acquiring the Series B Shares and Warrants
hereunder and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless the
Purchasers and all of their respective Affiliates, officers, managers, advisors,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses (including, without limitation, costs of suit and all
reasonable attorneys' fees and expenses) in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought) or other liabilities, losses or, in the
case of clauses (i) and (ii) below (other than any breach of the covenant
provided in Section 9.2(a)), diminution in value (the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to (i) the breach of any representation or warranty
contained in this Agreement or in any Related Document, (ii) the breach of any
promise, agreement or covenant contained in this Agreement or in any Related
Document, or (iii) the execution, delivery, performance or
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enforcement of this Agreement and any other instrument, document or agreement
executed pursuant hereto by any of the Indemnitees. The Company shall reimburse
the Indemnitees for the Indemnified Liabilities as such Indemnified Liabilities
are incurred. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnitee or any officer, director or controlling
Person of such Indemnitee and will survive the transfer of securities.
(b) Any Person entitled to indemnification hereunder (i)
will give prompt written notice to the Company of any claim with respect to
which it seeks indemnification and (ii) if the Indemnified Liability arises from
a third party claim, unless in such Indemnitee's reasonable judgment a conflict
of interest between the Company and such Indemnitee may exist with respect to
such third party claim, will permit the Company to assume the defense of such
claim with counsel reasonably satisfactory to the Indemnitee. If such defense is
assumed, the Company will not be subject to any liability for any settlement
made by the Indemnitee without its consent (but such consent will not be
unreasonably withheld). If the Company is not entitled to, or elects not to,
assume the defense of a claim hereunder, the Company will not be obligated to
pay the fees and expenses of more than one counsel for all Indemnitees with
respect to such claim, unless in the reasonable judgment of any Indemnitee a
conflict of interest may exist between such Indemnitee and any other of such
Indemnitees with respect to such claim.
(c) Payments by the Company pursuant to Section 12.1(a)
shall be limited to the amount of any liability or damage that remains after
deducting therefrom any insurance proceeds and any indemnity, contribution or
other similar payment recovered by the Indemnitees from any third party with
respect thereto.
(d) Notwithstanding anything to the contrary set forth
herein, no Indemnitee shall be entitled to be indemnified pursuant to this
Article XII for any Indemnified Liability that arises as a result of the
Indemnitee's gross negligence or willful misconduct; PROVIDED, HOWEVER, that the
Company shall pay the expenses incurred by any such Indemnitee hereunder, as
such expenses are incurred, in connection with any proceeding in advance of the
final disposition, so long as the Company receives an undertaking by such
Indemnitee to repay the full amount advanced if there is a final determination
that such Indemnitee failed the standards set forth in above or that such
Indemnitee is not entitled to indemnification as provided herein for other
reasons; and PROVIDED, FURTHER, that the termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
such Indemnitee was either grossly negligent or engaged in willful misconduct.
ARTICLE XIII
GENERAL PROVISIONS
13.1 PUBLIC ANNOUNCEMENTS. Neither the Purchasers nor the
Company shall make, or permit any agent or Affiliate to make, any public
statements, including, without limitation, any
-41-
press releases, with respect to this Agreement and the transactions contemplated
hereby without the prior written consent of the other, except as may be required
by law or the rules of any exchange on which the Company's securities may be
listed or any inter-dealer quotation system in which the Company's securities
may be authorized to be quoted. The Company and the Purchasers shall jointly
agree on the content and substance of all public announcements concerning the
transactions contemplated hereby.
13.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns,
including each subsequent holder of Series B Shares, Warrants, Conversion Shares
or Warrant Shares. Except as otherwise specifically provided herein, this
Agreement shall not be assignable by any party without the prior written consent
of the other parties hereto; PROVIDED, that each Purchaser shall be entitled to
assign its rights and obligations under this Agreement to any transferee of
Series B Shares or Warrants without the consent of any other party hereto so
long as (i) the transfer of such Series B Shares or Warrants to such transferee
is made in accordance with Section 6.4 hereof and (ii) such transferee agrees in
writing to be bound by the terms of this Agreement.
13.3 ENTIRE AGREEMENT. This Agreement, the Related Documents and
the Confidentiality Agreement and each other writing referred to herein or
delivered pursuant hereto constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior arrangements or
understandings, including, without limitation, the Original Agreement.
13.4 NOTICES. All notices, requests, consents and other
communications provided for herein shall be in writing and shall be (i)
delivered in person, (ii) transmitted by telecopy, (iii) sent by first-class,
registered or certified mail, postage prepaid, or (iv) sent by reputable
overnight courier service, fees prepaid, to the recipient at the address or
telecopy number set forth below, or such other address or telecopy number as may
hereafter be designated in writing by such recipient. Notices shall be deemed
given upon personal delivery, seven days following deposit in the mail as set
forth above, upon acknowledgment by the receiving telecopier or one day
following deposit with an overnight courier service.
TO THE COMPANY, TO:
------------------
Penton Media, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
WITH A COPY, WHICH SHALL NOT CONSTITUTE NOTICE TO THE
COMPANY, TO:
Xxxxx, Day, Xxxxxx, & Xxxxx
North Point
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
-42-
TO ANY ABRY PARTY OR THE PURCHASERS, TO:
c/o ABRY Partners, LLC
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxx Xxxxx
Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
WITH A COPY, WHICH SHALL NOT CONSTITUTE NOTICE TO
ABRY OR ANY PURCHASER, TO:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
TO SANDLER OR THE PURCHASERS, TO:
--------------------------------
Sandler Capital Management
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
WITH A COPY, WHICH SHALL NOT CONSTITUTE NOTICE TO
SANDLER OR ANY PURCHASER, TO:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
or, in each case, to such other address or to the attention of such other person
as the recipient party shall have specified by prior written notice to the
sending party.
13.5 CLOSING FEE; PURCHASERS' FEES AND EXPENSES
(a) On each Closing Date, in consideration for the
services the Purchasers or their Affiliates performed in structuring and
arranging the transactions contemplated by this Agreement and the Related
Documents, the Company will pay to each Purchaser (or its Affiliate) a
transaction fee equal to 1.5% of the portion of the Purchase Price paid by such
Purchaser to the Company on such Closing Date (the "CLOSING FEE"), by wire
transfer of immediately available funds to an account indicated to the Company
by such Purchaser. In addition, on the Initial Closing Date, the Company shall
reimburse ABRY (up to a maximum reimbursable amount of $100,000 unless otherwise
agreed to by the Company) for (i) the reasonable fees and expenses of Xxxxxxxx &
Xxxxx incurred by ABRY in connection with the documentation, negotiation and
-43-
consummation of the transactions contemplated by this Agreement and the Related
Documents, and (ii) all other reasonable fees and out-of-pocket expenses
incurred by ABRY in connection with the transactions contemplated hereunder.
After the Closings, the Company agrees to reimburse the Purchasers for all
reasonable fees and expenses (including reasonable legal fees) incurred in
connection with any future amendment to, waiver of or the enforcement by the
Purchasers of any of its rights arising under this Agreement or any of the
Related Documents, or in connection with the review of the Proxy Statement or
any other proxy statement prepared in connection with any meeting of the
Company's stockholders at which the Company shall seek to obtain the Stockholder
Approval.
(b) If this Agreement is terminated by ABRY pursuant to
Section 10.1 as a result of (i) a Restricted Party's breach, directly or
indirectly, of any of the provisions of Section 7.6 hereof; or (ii) the failure
by the Company to issue Series B Shares or Warrants that it is obligated to
issue at the Initial Closing pursuant to Section 3.3 hereof, then, in addition
to any other remedies or claims any Purchaser may have in law or in equity, the
Company shall promptly pay to ABRY an amount equal to $500,000 plus all legal,
accounting, investment banking and other fees and expenses incurred by ABRY in
connection with the transactions contemplated under this Agreement and the
Related Documents (up to a maximum reimbursable amount of $100,000). Any amounts
payable under this Section 13.5(b) shall be paid by wire transfer of immediately
available funds to the accounts designated to the Company by ABRY.
13.6 AMENDMENT AND WAIVER. No amendment or waiver of any provision
of this Agreement shall be effective, unless the same shall be in writing and
signed by the Company and the holders of a majority of the Series B Shares
outstanding at the time such amendment or waiver is proposed; PROVIDED, that any
such amendment or waiver which adversely affects any Purchaser or is prejudicial
to such Purchaser relative to the other Purchaser cannot be effected without the
prior written consent of such adversely affected or prejudiced Purchaser. No
such waiver shall operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. No failure by any party to take any action against
any breach of this Agreement or default by any other party shall constitute a
waiver of such party's right to enforce any provision hereof or to take any such
action.
13.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.
13.8 HEADINGS. The headings of the various sections of this
Agreement have been inserted for reference only and shall not be deemed to be a
part of this Agreement.
13.9 SPECIFIC PERFORMANCE. The Company, on the one hand, and the
Purchasers, on the other hand, acknowledges that money damages would not be a
sufficient remedy for any breach of this Agreement. It is accordingly agreed
that the parties shall be entitled to specific performance and injunctive relief
as remedies for any such breach, these remedies being in addition to any of the
remedies to which they may be entitled at law or equity.
-44-
13.10 REMEDIES CUMULATIVE. Except as otherwise provided herein, the
remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.
13.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED
IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
13.12 JURISDICTION, WAIVER OF JURY TRIAL, ETC.
(a) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE SERIES B SHARES, WARRANTS, CONVERSION SHARES OR WARRANT
SHARES OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO
THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND
EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE
AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13.4, SUCH SERVICE TO
BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(b) EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, THE SERIES B SHARES, WARRANTS, CONVERSION SHARES OR WARRANT
SHARES OR ANY OF THE OTHER RELATED DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE
COMPANY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE PURCHASER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE PURCHASER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES
THAT PURCHASER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS TO WHICH IT IS PARTY BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.
13.13 NO THIRD PARTY BENEFICIARIES. Except as specifically set forth
or referred to herein, nothing herein is intended or shall be construed to
confer upon any person or entity other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason of this
Agreement.
-45-
13.14 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
13.15 TIME OF THE ESSENCE; COMPUTATION OF TIME. Time is of the
essence for each and every provision of this Agreement. Whenever the last day
for the exercise of any privilege or the discharge or any duty hereunder shall
fall upon a Business Day, the party having such privilege or duty may exercise
such privilege or discharge such duty on the next succeeding Business Day.
* * * * *
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IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Amended and Restated Series B Convertible Preferred
Stock and Warrant Purchase Agreement as of the date first above written.
PENTON MEDIA, INC.
By: /s/ Xxxxxxx X. Vice
---------------------------------------
Name: Xxxxxxx X. Vice
Title: Senior Vice President and
Secretary
ABRY MEZZANINE PARTNERS, L.P.
By: ABRY Mezzanine Investors, L.P.,
its general partner
By: ABRY Mezzanine Holdings, LLC,
its general partner
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Clerk
ABACUS MASTER FUND, LTD.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
SANDLER CAPITAL PARTNERS V, L.P.
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM, Corp., a General Partner
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
SANDLER CAPITAL PARTNERS V FTE, L.P.
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM, Corp., a General Partner
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
SANDLER CAPITAL PARTNERS V GERMANY, L.P.
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM, Corp., a General Partner
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
SCHEDULE 1
Allocation of Series B Shares, Warrants and Purchaser Price
-------------------------------------------------------------------------------------------------------------------------
PURCHASER INITIAL INITIAL INITIAL FINAL FINAL FINAL
CLOSING CLOSING CLOSING CLOSING CLOSING CLOSING
SERIES B WARRANTS PURCHASE PRICE SERIES B WARRANTS PURCHASE
SHARES SHARES PRICE
-------------------------------------------------------------------------------------------------------------------------
ABRY Mezzanine Partners, L.P. 28,000 896,000 $28,000,000 2,000 64,000 $2,000,000
-------------------------------------------------------------------------------------------------------------------------
ABACUS Master Fund, Ltd. - - 5,000 160,000 $5,000,000
-------------------------------------------------------------------------------------------------------------------------
Sandler Capital Partners V, L.P. 8,559 273,888 $8,559,000 2,140 68,480 $2,140,000
-------------------------------------------------------------------------------------------------------------------------
Sandler Capital Partners V FTE, L.P. 3,126 100,032 3,126,000 782 25,024 $782,000
-------------------------------------------------------------------------------------------------------------------------
Sandler Capital Partners V Germany, L.P. 315 10,080 315,000 78 2,496 $78,000
-------------------------------------------------------------------------------------------------------------------------
TOTAL 40,000 1,280,000 $40,000,000 10,000 320,000 $10,000,000
-------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PURCHASER TOTAL SERIES TOTAL TOTAL
B SHARES WARRANTS PURCHASE
PRICE
--------------------------------------------------------------------------------
ABRY Mezzanine Partners, L.P. 30,000 960,000 $30,000,000
--------------------------------------------------------------------------------
ABACUS Master Fund, Ltd. 5,000 160,000 $5,000,000
--------------------------------------------------------------------------------
Sandler Capital Partners V, L.P. 10,699 342,368 $10,699,000
--------------------------------------------------------------------------------
Sandler Capital Partners V FTE, L.P. 3,908 125,056 $3,908,000
--------------------------------------------------------------------------------
Sandler Capital Partners V Germany, L.P. 393 12,576 $393,000
--------------------------------------------------------------------------------
TOTAL 50,000 1,600,000 $50,000,000
--------------------------------------------------------------------------------
EXHIBIT A
Series B Preferred Stock Certificate of Designations
(see attached)
EXHIBIT B
Registration Rights Agreement
(see attached)
EXHIBIT C
Form of Warrants
(see attached)
EXHIBIT D
Certificate of Incorporation and Bylaws
(see attached)
EXHIBIT E
Credit Agreement
(see attached)
EXHIBIT F
Indenture
(see attached)
EXHIBIT G
Offering Circular