EXHIBIT 4
to SCHEDULE 13D
EXECUTION COPY
This Warrant was originally issued on March 18,
2002, and such issuance was not registered under the
Securities Act of 1933, as amended. The transfer of
this Warrant and the securities obtainable upon
exercise hereof is subject to the conditions on
transfer specified in the Series B Convertible
Preferred Stock and Warrant Purchase Agreement,
dated as of March 10, 2002 (as amended and modified
from time to time), between the issuer hereof (the
"COMPANY") and the initial holder hereof, and the
Company reserves the right to refuse the transfer of
such security until such conditions have been
fulfilled with respect to such transfer. Upon
written request, a copy of such conditions shall be
furnished by the Company to the holder hereof
without charge.
PENTON MEDIA, INC.
STOCK PURCHASE WARRANT
----------------------
Date of Issuance: March 18, 2002 Certificate No. [_________________]
FOR VALUE RECEIVED, Penton Media, Inc., a Delaware corporation (the
"COMPANY"), hereby grants to [___________________________] or its registered
assigns (the "REGISTERED HOLDER") the right to purchase from the Company [_____]
shares of the Company's Common Stock at a price per share of $7.61 (as adjusted
from time to time hereunder, the "EXERCISE PRICE"). This Warrant is one of
several warrants (collectively, the "WARRANTS") issued by the Company to certain
investors (the "INVESTORS") pursuant to the Series B Convertible Preferred Stock
and Warrant Purchase Agreement, dated as of March 10, 2002 (the "PURCHASE
AGREEMENT"). Certain capitalized terms used herein are defined in SECTION 5
hereof. The amount and kind of securities obtainable pursuant to the rights
granted hereunder and the purchase price for such securities are subject to
adjustment pursuant to the provisions contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. EXERCISE OF WARRANT.
1A. EXERCISE PERIOD. The Registered Holder may exercise, in whole
or in part (but not as to a fractional share of Common Stock), the purchase
rights represented by this Warrant at any time and from time to time after the
Date of Issuance to and including the 10th anniversary thereof (the "EXERCISE
PERIOD"). Notwithstanding the foregoing, (i) so long as any indebtedness remains
outstanding under the Indenture or the New Indenture, this Warrant may be
exercised only to the extent that after giving effect to such exercise, the
Registered Holder or any Group of which such Registered Holder is a member would
not be entitled to direct the votes with respect to in excess of 35% of the
aggregate votes of the aggregate Voting Equity Interests (as defined in the
Indenture) of the Company; and (ii) so long as the Common Stock is listed on The
New York Stock Exchange, until the Company receives the Share Issuance Approval,
this Warrant may be exercised only to the extent that after giving effect to
such exercise the aggregate number of shares of Common Stock acquired by the
Investors from and after the Date of Issuance as a result of the conversion of
the Company's Series B Convertible Preferred Stock, par value $.01 per share,
and exercise of Warrants would not exceed 6,378,874 shares of the Common Stock
(as may be adjusted to reflect any stock split, stock dividend, reclassification
or other transaction having a similar effect). The Company shall give the
Registered Holder written notice of the expiration of the rights hereunder at
least 30 days but not more than 90 days prior to the end of the Exercise Period.
1B. EXERCISE PROCEDURE.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "EXERCISE TIME"):
(a) a completed Exercise Agreement, as described in SECTION 1C
below, executed by the Person exercising all or part of the purchase
rights represented by this Warrant (the "PURCHASER");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in
EXHIBIT II hereto evidencing the assignment of this Warrant to the
Purchaser, in which case the Registered Holder shall have complied with
the provisions set forth in SECTION 7 hereof; and
(d) either (1) a check payable to the Company in an amount equal
to the product of the Exercise Price multiplied by the number of shares
of Common Stock being purchased upon such exercise (the "AGGREGATE
EXERCISE PRICE"), or (2) a written notice to the Company that the
Purchaser is exercising the Warrant (or a portion thereof) by
authorizing the Company to withhold from issuance a number of shares of
Common Stock issuable upon such exercise of the Warrant which when
multiplied by the Market Price of the Common Stock is equal to the
Aggregate Exercise Price (and such withheld shares shall no longer be
issuable under this Warrant).
(ii) Certificates for shares of Common Stock purchased upon
exercise of this Warrant shall be delivered by the Company to the Purchaser
within five Business Days after the date of the Exercise Time. Unless this
Warrant has expired or all of the purchase rights represented hereby have been
exercised, the Company shall prepare a new Warrant, substantially identical
hereto, representing the rights formerly represented by this Warrant which have
not expired or been exercised and shall within such five-day period, deliver
such new Warrant to the Person designated for delivery in the Exercise
Agreement.
-2-
(iii) The Common Stock issuable upon the exercise of this Warrant
shall be deemed to have been issued to the Purchaser at the Exercise Time, and
the Purchaser shall be deemed for all purposes to have become the record holder
of such Common Stock at the Exercise Time.
(iv) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof if issued to the
Registered Holder or other cost incurred by the Company in connection with such
exercise and the related issuance of shares of Common Stock. Each share of
Common Stock issuable upon exercise of this Warrant shall upon payment of the
Exercise Price therefor, be fully paid and nonassessable and free from all liens
and charges with respect to the issuance thereof.
(v) The Company shall not close its books against the transfer of
this Warrant or of any share of Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant. The Company shall from time to time take all such action as may
be necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(vi) The Company shall assist and cooperate with any Registered
Holder or Purchaser required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).
(vii) Notwithstanding any other provision hereof, if an exercise of
any portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this Warrant
may, at the election of the holder hereof, be conditioned upon the consummation
of the public offering or sale of the Company in which case such exercise shall
not be deemed to be effective until the consummation of such transaction.
(viii) The Company shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the Warrants, such number of shares of Common
Stock issuable upon the exercise of all outstanding Warrants. All shares of
Common Stock which are so issuable shall, when issued against payment of the
Aggregate Exercise Price therefor, 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 delivered by the Company upon each such issuance).
The Company shall not take any action which would cause the number of authorized
but unissued shares of Common Stock to be less than the number of such shares
required to be reserved hereunder for issuance upon exercise of the Warrants.
1C. EXERCISE AGREEMENT. Upon any exercise of this Warrant, the
Exercise Agreement shall be substantially in the form set forth in EXHIBIT I
hereto, except that if the shares of Common Stock are not to be issued in the
name of the Person in whose name this Warrant is registered, the Exercise
Agreement shall also state the name of the Person to whom the certificates
-3-
for the shares of Common Stock are to be issued, and if the number of shares of
Common Stock to be issued does not include all the shares of Common Stock
purchasable hereunder, it shall also state the name of the Person to whom a new
Warrant for the unexercised portion of the rights hereunder is to be delivered.
Such Exercise Agreement shall be dated the actual date of execution thereof.
1D. FRACTIONAL SHARES. If a fractional share of Common Stock
would, but for the provisions of SECTION 1A, be issuable upon exercise of the
rights represented by this Warrant, the Company shall, unless prohibited by any
agreement to which the Company is a party, within five Business Days after the
date of the Exercise Time, deliver to the Purchaser a check payable to the
Purchaser in lieu of such fractional share in an amount equal to the difference
between Market Price of such fractional share as of the date of the Exercise
Time and the Exercise Price of such fractional share.
Section 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. In
order to prevent dilution of the rights granted under this Warrant, the Exercise
Price shall be subject to adjustment from time to time as provided in this
SECTION 2, and the number of shares of Common Stock obtainable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this SECTION 2.
2A. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK.
(i) If and whenever after the Date of Issuance of this Warrant,
the Company issues or sells, or in accordance with SECTION 2B is deemed to have
issued or sold, any share of Common Stock for a consideration per share less
than (x) the Market Price of the Common Stock at such time or (y) the Exercise
Price in effect immediately prior to such time (the greater of such amounts
being referred to herein as, the "ADJUSTMENT MULTIPLIER"), then immediately upon
such issue or sale or deemed issue or sale, the Exercise Price shall be reduced
to the Exercise Price determined by multiplying (x) the Exercise Price in effect
immediately prior to such issue or sale by (y) the quotient obtained by dividing
(i) the sum of (A) the product determined by multiplying the Adjustment
Multiplier by the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale, plus (B) the consideration, if any,
received by the Company upon such issue or sale, by (ii) the product determined
by multiplying the Adjustment Multiplier by the number of shares of Common Stock
Deemed Outstanding immediately after such issue or sale. Upon each such
adjustment of the Exercise Price hereunder, the number of shares of Common
acquirable upon exercise of this Warrant shall be adjusted to the number of
shares determined by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common acquirable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
(ii) Notwithstanding the foregoing, there shall be no adjustment to
the Exercise Price or the number of shares of Common Stock obtainable upon
exercise of this Warrant with respect to a Permitted Issuance (other than a
Permitted Issuance of the type described in clause (vi) of the definition
thereof if the price per share in such issuance is less than the Exercise Price
in effect immediately prior to such issuance).
2B. EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under SECTION 2A, the following shall be
applicable:
-4-
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any manner
grants or sells any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options, or upon conversion or exchange of
any Convertible Securities issuable upon exercise of such Options, is less than
(x) the Market Price of the Common Stock determined as of the time of the
granting or sale of such Options or (y) the Exercise Price in effect immediately
prior to such time, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of the
total maximum amount of such Convertible Securities issuable upon the exercise
of such Options shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or sale of such Options for such
price per share. For purposes of this paragraph, the "price per share for which
Common Stock is issuable" shall be determined by dividing (A) the total amount,
if any, received or receivable by the Company as consideration for the granting
or sale of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon exercise of all such Options, plus in
the case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the issuance or sale of such Convertible Securities and the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Exercise Price or the number of shares of Common Stock
issuable hereunder shall be made when Convertible Securities are actually issued
upon the exercise of such Options or when Common Stock is actually issued upon
the exercise of such Options or the conversion or exchange of such Convertible
Securities.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is less than
the greater of (x) the Market Price of the Common Stock determined as of the
time of such issue or sale or (y) the Exercise Price in effect immediately prior
to such time, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company the time of the
issuance or sale of such Convertible Securities for such price per share. For
the purposes of this paragraph, the "price per share for which Common Stock is
issuable" shall be determined by dividing (A) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities. No further
adjustment of the Exercise Price or the number of shares of Common Stock
issuable hereunder shall be made when Common Stock is actually issued upon the
conversion or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustments of the Exercise Price or the number of shares of Common Stock
issuable hereunder had been or are to be made pursuant to other provisions of
this SECTION 2, no further adjustment of the Exercise Price or the number of
shares of Common Stock issuable hereunder shall be made by reason of such issue
or sale.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If, in the case of
Options and Convertible Securities issued on or after the Date of Issuance, the
purchase price provided for in any such Options, the additional consideration,
if any, payable upon the conversion or exchange of any such Convertible
Securities or the rate at which any such Convertible Securities are convertible
into
-5-
or exchangeable for Common Stock changes at any time, the Exercise Price in
effect at the time of such change shall be immediately adjusted to the Exercise
Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold, and the number of shares of Common Stock
issuable hereunder shall be correspondingly adjusted; PROVIDED, that if such
adjustment would result in an increase of the Exercise Price then in effect,
such adjustment shall not be effective until 30 days after written notice
thereof has been given by the Company to all holders of the Warrants. For
purposes of SECTION 2B, if the terms of any Option or Convertible Security which
was outstanding as of the Date of Issuance are changed in the manner described
in the immediately preceding sentence, then such Option or Convertible Security
and the Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such change;
PROVIDED, that no such change shall at any time cause the Exercise Price
hereunder to be increased or the number of shares of Common Stock issuable
hereunder to be decreased.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Exercise Price then in effect hereunder shall be adjusted
immediately to the Exercise Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible Security, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, and the number of shares of Common Stock issuable hereunder shall
be correspondingly adjusted; PROVIDED, that if such expiration or termination
would result in an increase in the Exercise Price then in effect (and a
corresponding decrease in the number of shares Common Stock issuable hereunder),
such increase (and corresponding decrease) shall not be effective until 30 days
after written notice thereof has been given to all holders of the Warrants. For
purposes of SECTION 2B, the expiration or termination of any Option or
Convertible Security which was outstanding as of the Date of Issuance shall not
cause the Exercise Price or the number of shares Common Stock issuable hereunder
to be adjusted unless, and only to the extent that, a change in the terms of
such Option or Convertible Security caused it to be deemed to have been issued
after the Date of Issuance.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common Stock,
Option or Convertible Security is issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor (net of discounts, commissions and
related expenses). If any Common Stock, Option or Convertible Security is issued
or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company shall be the fair value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company shall be the Market
Price thereof as of the date of receipt. If any Common Stock, Option or
Convertible Security is issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving corporation,
the amount of consideration therefor shall be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is
attributable to such Common Stock, Option or Convertible Security, as the case
may be. The fair value of any consideration other than cash and securities shall
be determined jointly by the Company and the Registered Holder. If such parties
are unable to reach agreement within a reasonable period of time, the fair value
of such consideration shall be determined by an independent appraiser
experienced in valuing such type of consideration jointly selected by the
Company and the Registered Holder. The determination of such appraiser shall be
final and binding upon the parties, and the fees and expenses of such appraiser
shall be borne by the Company.
-6-
(vi) INTEGRATED TRANSACTIONS. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Option by the parties thereto, the consideration for the
Option shall be the Market Price thereof.
(vii) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company or any Subsidiary, and the disposition of any shares
so owned or held shall be considered an issue or sale of Common Stock.
(viii) RECORD DATE. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (b) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or upon the making of such other distribution or
the date of the granting of such right of subscription or purchase, as the case
may be.
2C. SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Common
Stock obtainable upon exercise of this Warrant shall be proportionately
increased (and any other appropriate actions shall be taken by the Company) so
that the holder of any Warrant thereafter surrendered for exercise (without
actually requiring this Warrant to be exercised and without regard to any
limitations on exercise set forth in this Warrant or otherwise) shall be
entitled to receive the number of shares of Common Stock or other securities of
the Company that such holder would have owned or would have been entitled to
receive upon or by reason of the events described above, had such Warrant been
exercised immediately (without actually requiring this Warrant to be exercised
and without regard to any limitations on exercise set forth in this Warrant or
otherwise) prior to the occurrence of such event. If the Company at any time
combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased and the number of shares of Common Stock obtainable upon exercise of
this Warrant (without actually requiring this Warrant to be exercised and
without regard to any limitations on exercise set forth in this Warrant or
otherwise) shall be proportionately decreased (and any other appropriate actions
shall be taken by the Company) so that the holder of any Warrant thereafter
surrendered for exercise shall be entitled to receive the number of shares of
Common Stock or other securities of the Company that such holder would have
owned or would have been entitled to receive upon or by reason of the events
described above, had such Warrant been exercised immediately (without actually
requiring this Warrant to be exercised and without regard to any limitations on
exercise set forth in this Warrant or otherwise) prior to the occurrence of such
event.
2D. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as
-7-
an "ORGANIC CHANGE." Prior to the consummation of any Organic Change, the
Company shall make appropriate provisions (in form and substance satisfactory to
the Registered Holder) to insure that each of the holders of the Warrants shall
thereafter have the right to acquire and receive, in lieu of or in addition to
(as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the exercise of such holder's Warrant, such
shares of stock, securities or assets as such holder would have received in
connection with such Organic Change if such holder had exercised its Warrant
(without actually requiring this Warrant to be exercised and without regard to
any limitations on exercise set forth in this Warrant or otherwise) immediately
prior to such Organic Change. In each such case, the Company shall also make
appropriate provisions (in form and substance satisfactory to the Registered
Holder) to insure that the provisions of this SECTION 2 and SECTIONS 3 and 4
hereof shall thereafter be applicable to the Warrants (including, in the case of
any such consolidation, merger or sale in which the successor entity or
purchasing entity is other than the Company, an immediate adjustment of the
Exercise Price to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate adjustment in the
number of shares of Common Stock acquirable and receivable upon exercise of the
Warrants, if the value so reflected is less than the Exercise Price in effect
immediately prior to such consolidation, merger or sale). The Company shall not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance satisfactory to the Registered Holder), the
obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
2E. CERTAIN DISTRIBUTIONS. In case the Company shall at any time
or from time to time, prior to exercise of this Warrant, distribute to all
holders of shares of the Common Stock (including any such distribution made in
connection with a merger or consolidation in which the Company is the resulting
or surviving Person and the Common Stock is not changed or exchanged) cash,
evidences of indebtedness of the Company or another issuer, securities of the
Company or another issuer or other assets (excluding dividends payable in shares
of Common Stock for which adjustment is made under another paragraph of this
SECTION 2, any distribution in connection with a Permitted Issuance and any
Liquidating Dividend) or rights or warrants to subscribe for or purchase of any
of the foregoing, then, and in each such case, the Exercise Price then in effect
shall be adjusted (and any other appropriate actions shall be taken by the
Company) by multiplying the Exercise Price in effect immediately prior to the
date of such distribution by a fraction (x) the numerator of which shall be the
Market Price of the Common Stock immediately prior to the date of distribution
less the then fair market value (as determined by the Board of Directors in the
exercise of their fiduciary duties) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such rights or
warrants applicable to one share of Common Stock and (y) the denominator of
which shall be the Market Price of the Common Stock immediately prior to the
date of distribution (but such fraction shall not be greater than one);
PROVIDED, however, that no adjustment shall be made with respect to any
distribution of rights or warrants to subscribe for or purchase securities of
the Company if the holder of this Warrant would otherwise be entitled to receive
such rights or warrants upon exercise at any time of Warrants into Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective retroactively to a date immediately following the close of
business on the record date for the determination of stockholders entitled to
receive such distribution.
-8-
2F. EVENT OF NONCOMPLIANCE. If an Event of Noncompliance of the
type described in Section 8A(vii) of the Series B Preferred Stock Certificate of
Designations occurs, the Exercise Price of the Warrants shall be reduced
immediately by 20% of the Exercise Price in effect immediately prior to such
adjustment and the number of shares of Common Stock obtainable upon exercise of
this Warrant shall be proportionately increased. Thereafter, until the
Corporation obtains the Share Issuance Approval, every 90 days the Exercise
Price shall be reduced immediately by 20% of the Exercise Price in effect
immediately prior to such adjustment (subject to a maximum reduction not to
exceed 50% of the Exercise Price that would have been in effect as of the such
date had the adjustments provided for in this SECTION 2F not occurred) and the
number of shares of Common Stock obtainable upon exercise of this Warrant shall
again be proportionately increased. Upon receipt of the Share Issuance Approval,
the Exercise Price in effect immediately prior to such event shall be readjusted
to be the Exercise Price that would have been in effect as of the such date had
the adjustments provided for in this SECTION 2F not occurred and taking into
account for purposes of this readjustment any other adjustments to the Exercise
Price that would have been made during the continuation of the Event of
Noncompliance which triggered the adjustments provided for in this SECTION 2F
had the adjustments provided for in this SECTION 2F not occurred; and the number
of shares of Common Stock obtainable upon exercise of this Warrant shall be
proportionately adjusted.
2G. CERTAIN EVENTS. If any event occurs of the type contemplated
by the provisions of this SECTION 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors shall make an appropriate adjustment in the
Exercise Price and the number of shares of Common Stock obtainable upon exercise
of this Warrant so as to protect the rights of the holders of the Warrants;
provided that no such adjustment shall increase the Exercise Price as otherwise
determined pursuant to this SECTION 2 or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this SECTION 2.
2H. NOTICES.
(i) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Registered Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall give written notice to the Registered Holder
at least 20 days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Organic Change,
dissolution or liquidation.
(iii) The Company shall also give written notice to the Registered
Holders at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation shall take place.
Section 3. LIQUIDATING DIVIDENDS. If the Company declares or
pays a dividend upon the Common Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with generally accepted
accounting principles, consistently applied) except for a stock dividend payable
in shares of Common Stock (a "LIQUIDATING DIVIDEND"), then the Company shall pay
to the Registered Holder of this Warrant at the time of payment thereof the
Liquidating Dividend which would have been paid to such Registered Holder on the
Common Stock had this Warrant been
-9-
fully exercised (without actually requiring this Warrant to be exercised and
without regard to any limitations on exercise set forth in this Warrant or
otherwise) immediately prior to the date on which a record is taken for such
Liquidating Dividend, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be determined.
Section 4. PURCHASE RIGHTS. If at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "PURCHASE RIGHTS"), then the Registered holder of
this Warrant shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.
Section 5. DEFINITIONS. The following terms have meanings set
forth below:
"BUSINESS DAY" means any day other than a Saturday, Sunday, or any day
on which banks in New York City are authorized or obligated by applicable law to
close.
"COMMON STOCK" means, collectively, the Company's Common Stock, par
value $.01 per share (including any associated Right, 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), and any capital
stock of any class of the Company hereafter authorized which is not limited to a
fixed sum or percentage of par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the distribution of assets
upon any liquidation, dissolution or winding up of the Company.
"COMMON STOCK DEEMED OUTSTANDING" means at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to SECTIONS 2B(I) and
2B(II) hereof whether or not the Options or Convertible Securities are actually
exercisable at such time, but excluding any shares of Common Stock.
"CONVERTIBLE SECURITIES" means any stock or securities (directly or
indirectly) convertible into or exchangeable for Common Stock.
"EVENT OF NONCOMPLIANCE" has the meaning set forth in Section 8A of the
Series B Preferred Stock Certificate of Designations.
"GROUP" has the meaning set forth in Rule 13d-5 promulgated under the
Securities Exchange Act of 1934, as amended; PROVIDED, that until the
termination of the Purchase Agreement, all holders of Warrants shall be deemed
to be a member of a Group for purposes of SECTION 1A hereof unless such holders
unanimously agree in writing otherwise.
"INDENTURE" has the meaning set forth in the Purchase Agreement.
"MARKET PRICE" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if
-10-
there has been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M.,
New York time, or, if on any day such security is not quoted in the NASDAQ
System, the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization, in each such case
(i) averaged over a period of 30 days consisting of the day as of which "Market
Price" is being determined and the 29 consecutive Business Days prior to such
day, and (ii) averaged on a volume-weighted basis based on the trading volume
for each such Business Day. If at any time such security is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the "Market Price" shall be the fair value thereof determined jointly by
the Company and the Registered Holder. If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an independent appraiser experienced in valuing securities jointly
selected by the Company and the Registered Holder. The determination of such
appraiser shall be final and binding upon the parties, and the Company shall pay
the fees and expenses of such appraiser.
"NEW INDENTURE" has the meaning set forth in the Purchase Agreement.
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
"PERMITTED ISSUANCE" means (i) the issuance or granting of Common Stock
(including restricted, deferred or performance shares), Options or Convertible
Securities to employees of the Company and its Subsidiaries or the exercise
thereof pursuant to a Stock Option Plan, to the extent the aggregate Common
Stock, Options or Convertible Securities issued or granted pursuant to this
clause (i) do not exceed 15% of the Common Stock Deemed Outstanding on the day
before the Date of Issuance (subject to adjustment to reflect any stock split,
stock dividend, reclassification, recapitalization or other transaction having a
similar effect), (ii) the issuance of Common Stock pursuant to the Certificate
of Designations, Preferences and Rights of Series B Convertible Preferred Stock,
(iii) the issuance of Common Stock upon the exercise of the Warrants, (iv) the
issuance of Common Stock by the Company for consideration other than cash
pursuant to a consummated merger, consolidation, acquisition, or similar
business combination, so long as (A) such issuance was approved by a majority of
the Preferred Directors or (B) the aggregate Common Stock, Options or
Convertible Securities issued or granted pursuant to this clause (iv) and the
following clause (v) does not exceed 5% of the Common Stock Deemed Outstanding
on the day before the Date of Issuance (subject to adjustment to reflect any
stock split, stock dividend, reclassification, recapitalization or other
transaction having a similar effect), (v) the issuance of Common Stock pursuant
to any securities issued to a bank or other similar financial institution in
connection with a loan or other indebtedness for borrowed money (provided, that
the Board of Directors has approved the issuance of such securities and loan or
other indebtedness), to the extent the aggregate Common Stock, Options or
Convertible Securities issued or granted pursuant to this clause (v) and the
preceding clause (iv) does not exceed 5% of the Common Stock Deemed Outstanding
on the day before the Date of Issuance (subject to adjustment to reflect any
stock split, stock dividend, reclassification, recapitalization or other
transaction having a similar effect)); or (vi) the issuance of Common Stock by
the Corporation pursuant to an underwritten offering registered with the
Securities and Exchange Commission.
-11-
"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.
"PREFERRED DIRECTORS" means the members of the Board of Directors
elected by the holders of the Series B Convertible Preferred Stock pursuant to
Section 5B of 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
"SHARE ISSUANCE APPROVAL" has the meaning set forth in Section 9.3 of
the Purchase Agreement.
Other capitalized terms used in this Warrant but not defined herein
shall have the meanings set forth in the Purchase Agreement.
Section 6. NO VOTING RIGHTS; LIMITATIONS OF LIABILITY. This
Warrant shall not entitle the holder hereof to any voting rights or other rights
as a stockholder of the Company. No provision hereof, in the absence of
affirmative action by the Registered Holder to purchase Common Stock, and no
enumeration herein of the rights or privileges of the Registered Holder shall
give rise to any liability of such holder for the Exercise Price of Common Stock
acquirable by exercise hereof or as a stockholder of the Company.
Section 7. WARRANT TRANSFERABLE. Subject to the transfer
conditions referred to in the legend endorsed hereon, this Warrant and all
rights hereunder are transferable, in whole or in part, without charge to the
Registered Holder, upon surrender of this Warrant with a properly executed
Assignment (in the form of EXHIBIT II hereto) at the principal office of the
Company.
Section 8. WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS.
This Warrant is exchangeable, upon the surrender hereof by the Registered Holder
at the principal office of the Company, for new Warrants of like tenor
representing in the aggregate the purchase rights hereunder, and each of such
new Warrants shall represent such portion of such rights as is designated by the
Registered Holder at the time of such surrender. The date the Company initially
issues this Warrant shall be deemed to be the "DATE OF ISSUANCE" hereof
regardless of the number of times new certificates representing the unexpired
and unexercised rights formerly represented by this Warrant shall be issued. All
Warrants representing portions of the rights hereunder are referred to herein as
the "Warrants."
Section 9. REPLACEMENT. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing the Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like
-12-
kind representing the number of Warrants of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
Section 10. NOTICES. Except as otherwise expressly provided
hereunder, all notices referred to herein shall be in writing and shall be
delivered by registered or certified mail, return receipt requested and postage
prepaid, or by reputable overnight courier service, charges prepaid, and shall
be deemed to have been given when so mailed or sent (i) to the Company, at its
principal executive offices and (ii) to any Registered Holder, at such holder's
address as it appears in the stock records of the Company (unless otherwise
indicated by any such holder).
Section 11. AMENDMENT AND WAIVER. Except as otherwise provided
herein, the provisions of this Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holder of this Warrant.
Section 12. DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporation
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its Stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of Delaware, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Delaware.
* * * * * *
-13-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.
PENTON MEDIA, INC.
By_________________________
Its________________________
[Corporate Seal]
Attest:
______________________________
Title: ______________________
-14-
EXHIBIT I
EXERCISE AGREEMENT
------------------
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. [_____]), hereby agrees to subscribe for the purchase
of ______ shares of the Common Stock covered by such Warrant and makes payment
herewith in full therefor at the price per share provided by such Warrant.
Signature ____________________
Address ______________________
-15-
EXHIBIT II
ASSIGNMENT
----------
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. [_____]) with respect to the number of shares of the
Common Stock covered thereby set forth below, unto:
NAMES OF ASSIGNEE ADDRESS NO. OF SHARES
----------------- ------- -------------
Signature ____________________
____________________
Witness ____________________
-16-
