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EXHIBIT 10.23
FORM OF
SEVENTH AMENDMENT AGREEMENT
This SEVENTH AMENDMENT AGREEMENT (this "Agreement" or the "Seventh
Amendment") made as of July 18, 1997, by and among CMP MEDIA INC. (the
"Borrower"), a Delaware corporation and the successor by merger to CMP
Publications, Inc., a New York corporation ("CMP Publications"), FLEET NATIONAL
BANK ("Fleet"), formerly known as Fleet National Bank of Connecticut and prior
to that Shawmut Bank Connecticut, N.A., and the successor by merger to Fleet
Bank N.A. ("Fleet N.A."), THE CHASE MANHATTAN BANK ("Chase"), the successor by
merger to The Chase Manhattan Bank, N.A., (Fleet and Chase and any of their
respective successors or permitted assigns, the "Banks") and Fleet as agent for
the Banks (in its capacity as such, the "Agent").
WITNESSETH:
WHEREAS, CMP Publications, Fleet, Chase and the Agent have executed
and delivered a Credit Agreement dated as of July 15, 1993 (the "Original
Credit Agreement"), which Original Credit Agreement was amended by an Amendment
and Waiver Agreement among CMP Publications, Fleet, Chase and the Agent dated
February 28, 1994 (the "First Amendment"), by a Second Amendment and Waiver
Agreement among CMP Publications, Fleet, Chase and the Agent dated as of
February 27, 1995 (the "Second Amendment"), by a Third Amendment Agreement
among CMP Publications , Fleet, Chase and the Agent dated as of May 30, 1995
(the "Third Amendment"), and by a Fourth Amendment Agreement, dated as of
August 9, 1995, between CMP Publications, Fleet, Chase, Fleet N.A. and the
Agent (the "Fourth Amendment") (such First, Second, Third and Fourth Amendments
are collectively referred to below as the "Prior Amendments"); and
WHEREAS, CMP Publications, Fleet, Chase and the Agent also executed
and delivered (i) a Third Waiver Agreement, dated April 24, 1995 (the "Third
Waiver") and (ii) a Fourth Waiver Agreement, dated June 5, 1995 (the "Fourth
Waiver"), both relating to the Agreement, as amended; and
WHEREAS, CMP Publications, Fleet, Fleet, N.A., Chase and the Agent
also executed and delivered a Fifth Waiver Agreement, dated February 28, 1996
(the "Fifth Waiver") also relating to the Original Credit Agreement, as
amended; and
WHEREAS, the Original Credit Agreement was subsequently amended by a
Fifth Amendment and Consolidation of Prior Amendments (Together with Sixth
Waiver) Agreement, dated as of November 14, 1996 (the "Fifth Amendment"), which
Fifth Amendment, among other things, (i) set forth certain new amendments to
the Original Credit Agreement, and (ii)
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consolidated those amendments (to the Original Credit Agreement) which were
contained in the Prior Amendments and were still effective;
WHEREAS, the Original Credit Agreement was subsequently amended by a
Sixth Amendment, dated as of April 15, 1997 (the Original Credit Agreement as
amended by the Fifth Amendment (including both such new amendments and
consolidated amendments) and the Sixth Amendment is referred to below as the
"Agreement"); and
WHEREAS, the Borrower, the Banks and the Agent entered into a Seventh
Waiver Agreement, dated as of June 13, 1997 with respect to the Agreement; and
WHEREAS, the Agent (on behalf of the Banks) and the Borrower entered
into two letter agreements, both dated May 30, 1997; and
WHEREAS, one of such letters (the "Credit Agreement Letter") outlined
certain proposed amendments to the Agreement which the Banks and the Borrower
agreed to; and
WHEREAS, the other of such letters (the "Negative Pledge Letter")
outlined certain proposed amendments to the Negative Pledge Agreement (as
defined in the Agreement); and
WHEREAS, the Borrower and the Banks desire to enter into this
Agreement in order to (i) set forth their agreement with respect to the
amendments referred to in the Credit Agreement Letter and (ii) set forth
certain other amendments to the Agreement; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Agent and Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx as trustee for the Xxxxxx X. Xxxxx 1997 GRAT
and Xxxxxxx X. Xxxxx as trustee for the Xxxxxxx X. Xxxxx 1997 GRAT and the
Agent are entering into an Amended and Restated Negative Pledge Agreement of
even date herewith to reflect the amendments contemplated by the Negative
Pledge Letter and certain other amendments.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
PART A. GENERAL MATTERS.
1. Capitalized Terms; Section References. Capitalized terms used
herein without definition and defined in the Agreement shall have the same
respective meanings given those terms in the Agreement, unless the context
otherwise requires. All Section references used
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herein shall, unless otherwise specified herein, be deemed to refer to Sections
in the Agreement.
PART B. AMENDMENTS TO THE AGREEMENT.
1. Accumulated Net Profit Distribution. The definition of the
term "Accumulated Net Profit Distribution" contained in Article 1 of the
Agreement is hereby amended by deleting the phrase "$30 million" and
substituting for it the phrase "$55 million".
2. Change of Control Definition. It is agreed that effective
upon the IPO Consummation (as that term is defined below), the definition of
the term "Change of Control" contained in Article 1 of the Agreement shall be
amended and restated to read in its entirety as follows:
"Change of Control" shall mean that for any reason (i) the Leeds
Group (as defined below) does not own (beneficially and of record),
with the full right to actually vote, 50.1% or more of the combined
voting power of all Voting Stock (as defined below) of the Borrower or
(ii) the Leeds Individual Group (as defined below) shall no longer
have the absolute right to elect a majority of the Board of Directors
of CMP. "Leeds Group" shall mean (1) G. Leeds and/or L. Leeds, (2)
any of the children of G. Leeds and L. Leeds, (3) subject to such
trusts remaining under the control of G. and L. Leeds or any of their
children, one or more trusts for the sole benefit of (x) G. Leeds, L.
Leeds and/or any of their children and/or (y) any other lineal
descendants (including adopted children) of G. Leeds and L. Leeds or
(iv) Controlled Private Foundations. "Leeds Individual Group" means
G. Leeds, L. Leeds and any of their children. "Voting Stock" means
capital stock issued by the Borrower the holders of which are entitled
to vote for the election of the Board of Directors of the Borrower.
"Controlled Private Foundation" means a private foundation which (i)
is a corporation and qualifies as a private foundation under Section
509(a) of the Code and (ii) remains under the effective control of G.
Leeds, L. Leeds and/or any of their children (such requirement of
control to include controlling the Board of Directors of such private
foundation).
The definition of the term Change of Control shall not be so amended
unless and until the IPO Consummation.
3. Negative Pledge Agreement Definition. The definition of the
term "Negative
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Pledge Agreement" contained in Article 1 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Negative Pledge Agreement" means the Amended and Restated
Negative Pledge Agreement, dated as of July 18, 1997, by and between
Xxxxxx X. Xxxxx, X. Xxxxx, X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X.
Xxxxx as trustee for the Xxxxxx X. Xxxxx 1997 GRAT and Xxxxxxx X.
Xxxxx as trustee for the Xxxxxxx X. Xxxxx 1997 GRAT, and the Agent, as
same may be amended, supplemented or otherwise modified from time to
time.
Exhibit F, to the Agreement is hereby deemed deleted.
4. Specified Distribution Definition. The definition of the term
"Specified Distributions" contained in Article 1 of the Agreement is hereby
amended and restated to read in its entirety as follows:
"Specified Distributions" means any and all Distributions made (i) by
the Borrower except for, to the extent actually paid, the Accumulated
Net Profit Distributions or (ii) by any Guarantor and/or any
Subsidiary of the Borrower to the extent any such Distribution is not
paid to the Borrower.
5. New Definitions; Deletion of Definition(s). (a) The following
new definitions are hereby added to Article 1, to be inserted in their proper
alphabetical order:
"Controlled Private Foundation" means a private foundation which (i)
is a corporation and qualifies as a private foundation under Section 509(a) of
the Code and (ii) remains under the effective control of G. Leeds, L. Leeds or
any of their children (such requirement of control to include controlling the
election of the Board of Directors of such private foundation).
"Exchange" means: the (i) New York Stock Exchange, (ii) American Stock
Exchange or (iii) NASDAQ National Market.
"G. Leeds" shall mean Xxxxxx X. Xxxxx.
"L. Leeds" shall mean Xxxxxxxxx X. Xxxxx.
"IPO" means an initial public offering of the stock of the Borrower
on an Exchange.
"IPO Consummation" means the Borrower is listed as a public company on
an Exchange and the IPO has actually closed and fully settled.
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"Required Dividend Documentation" means, with respect to Section
6.15(a) hereof, a legal opinion to the Banks and the Agent (along with such
other evidence as is reasonably satisfactory to the Banks) that the declaration
and payment of the Special Accumulated Net Profit Distribution (as defined in
Section 6.15(a)) is permitted under applicable Delaware corporate law.
(b) Effective with the IPO Consummation, the definition of the
term "Specified Offering Proceeds" in Article 1 of the Agreement shall be
deleted.
6. Amendment of Section 6.11. Effective as of the date the IPO
occurs, Section 6.11 of the Agreement shall be amended and restated to read in
its entirety as set forth below:
Section 6.11 Minimum Net Worth. Borrower shall not permit the Net
Worth of the Borrower and the Guarantors (on a combined basis) at any
time on or after the date the IPO occurs, to be less than the sum of
(i) $40,000,000 plus (ii) 25% of cumulative Net Income for the period
from January 1, 1998 to the last day of the most recent completed
fiscal quarter ending on or prior to the applicable date of
measurement (if cumulative Net Income for such period is negative, the
amount under clause (ii) shall, for such period, be deemed zero).
7. Section 6.15. Section 6.15 of the Agreement is hereby amended
as follows:
(i) Section 6.15(a) of the Agreement is hereby amended and
restated to read in its entirety as follows:
(a) Borrower or any Guarantor may make Distributions
(including Accumulated Net Profit Distributions) in any fiscal
year if immediately prior to and after giving effect to each
such Distribution, and as a result thereof, no Event of
Default or Default shall occur or be continuing; provided,
that, the Borrower shall be permitted to declare an
Accumulated Net Profit Distribution (for purposes of this
proviso, a "Special Accumulated Net Profit Distribution")
notwithstanding the fact that if (at the time of such
declaration) the Special Accumulated Net Profit Distribution
was actually paid (i.e., made) an Event of Default under
Section 6.11 hereof would result, if the Borrower satisfies
the following four conditions: (i) the Borrower causes the
delivery of the Required Dividend Documentation, (ii) (aa) the
Special Accumulated Net Profit Distribution shall not (and
Borrower hereby covenants that such Distribution shall not) be
paid until after the IPO Consummation and
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(bb) the IPO Consummation occurs prior to January 1, 1998,
(iii) the payment of the Special Accumulated Net Profit
Distribution shall be made expressly contingent upon the IPO
Consummation occurring and the IPO shall result in the
Borrower receiving net proceeds in an amount sufficient to
meet (taking into account such Distribution) the Net Worth
requirement (to be effective as of the occurence of the IPO)
set forth in Section 6.11 above, and (iv) no Event of Default
(including without limitation under Section 6.11) or Default
exists either immediately prior to or after giving effect to
or as a result of such payment of the special Accumulated Net
Profit Distribution; provided, further, that in addition to
any other restrictions hereunder, at least two (2) Business
Days prior to the paying of any Accumulated Net Profit
Distribution (including a Special Accumulated Net Profit
Distribution) the Borrower shall deliver to the Agent and the
Banks a notice which identifies the proposed Distribution as
an Accumulated Net Profit Distribution and is accompanied by a
certificate of Borrower's Chief Financial Officer
demonstrating (to the satisfaction of the Required Banks), on
a pro-forma basis, that after the making of such Distribution
the Borrower would be in compliance with Section 6.11 hereof
and assuming, for purposes of this sentence, that the Net
Worth test under Section 6.11 is measured as of the proposed
date for such Distribution.
(ii) Section 6.15(b) of the Agreement is hereby amended by adding the
following phrase immediately after the words "or be continuing" and
immediately before the phrase "; provided, however, that": "(provided,
that the Borrower may declare the Special Accumulated Net Profit
Distribution in accordance with and pursuant to the terms of Section
6.15(a) above)". Borrower also agrees that no Permitted Tax
Distributions (as defined in Section 6.15(b)) shall be permitted on or
after the date the IPO occurs.
8. A new Section 6.17 is hereby added to the Agreement to read in
its entirety as follows:
6.17 Amendments to Charter, etc. The Borrower shall not (i) amend
or otherwise modify its certificate of incorporation, by-laws, or other charter
document in a manner which adversely affects the interests of any of the Banks
or the Agent, including without limitation any amendment which adversely affects
the voting rights of the Leeds Group (as defined in the definition of Change of
Control), or (ii) file any certificate of designation (or comparable document)
with respect to any preferred stock without the prior written consent of the
Banks and the Agent.
PART C. MISCELLANEOUS; AND PAYMENT OF FEES AND EXPENSES.
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1. The Borrower, the Agent and the Banks hereby ratify and confirm
all terms and provisions of the Agreement, and any other documents, instruments
or agreements executed in connection therewith and agree that, except as
expressly modified herein, all of such terms and provisions remain in full
force and effect.
2. Each Bank acknowledges and agrees with each other Bank and the
Agent that (i) it has independently evaluated any projections and other
materials and information with respect to the Borrower and/or any Guarantor and
has made its own independent decision to enter into this Amendment and is not
relying on any representation or other statement of such other Bank or the
Agent in doing so and (ii) pursuant to Section 8.04 of the Agreement, it shall
make its own credit decisions in taking or not taking any action (including
without limitation making or not making any Loan) under the Agreement and the
Notes. Borrower acknowledges that the obligations of the Banks are several and
no Bank shall be responsible for the failure (if any) of any other Bank to make
any Loan required to be made by such other Bank.
3. In order to induce the Banks to enter into this Agreement and
to make any further Loans, the Borrower hereby represents and warrants that:
(a) the representations and warranties contained in Article 4 of the
Agreement, as hereby amended, are true and correct in all material
respects on the date hereof (or were true and correct as of the
specific point in time to which they relate) with the same effect as
though such representations and warranties had been made on the date
hereof,
(b) the Borrower is in compliance with all of the terms and provisions
set forth in the Agreement, as hereby amended, on its part to be
observed and performed,
(c) no Event of Default or Default under the Agreement, as hereby
amended, now exists,
(d) the Agreement, as hereby amended, and the Notes are the legal,
valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, and
(e) the Borrower has no claims, counterclaims, defenses, or rights
of set-off or recoupment against the Banks or the Agent.
4. The effectiveness of the amendments set forth above is subject
to the satisfaction of the following conditions:
(a) Prior to or concurrently with the execution and delivery of this
Seventh Amendment, the Agent shall have received resolutions of the
Board of Directors of the Borrower, certified by the Secretary or
Assistant Secretary of the Borrower (or
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otherwise identified to the satisfaction of the Banks), authorizing
the execution and delivery by the Borrower of this Seventh Amendment
and the performance by the Borrower of the Agreement as amended by the
Seventh Amendment, in form and substance satisfactory to the Agent and
the Banks.
(b) Concurrently with the execution and delivery of this Seventh
Amendment, the Agent shall have received an opinion of Xxxxxx X.
Xxxxxxxxx, General Counsel of the Borrower, dated the date hereof, in
form and substance satisfactory to the Agent and the Banks.
(c) Prior to or concurrently with the execution and delivery of this
Agreement, (i) the Agent shall have received such other documents,
certificates, resolutions, instruments and agreements from the
Borrower as the Agent or any of the Banks may reasonably request and
(ii) the Borrower shall (a) pay to the Banks (a) a one-time amendment
fee of $18,750 to be shared pro-rata by the Banks in accordance with
their respective Commitments and (b) reimburse the Agent and the Banks
for all costs and expenses (including counsel fees and disbursements))
incurred in connection with this Seventh Amendment and any related
matters.
(d) Concurrently with the execution and delivery of this Seventh
Amendment, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx as trustee for the Xxxxxx X. Xxxxx
1997 GRAT and Xxxxxxx X. Xxxxx as trustee for the Xxxxxxx X. Xxxxx
1997 GRAT and the Agent shall enter into an Amended and Restated
Negative Pledge Amendment in form and substance satisfactory to the
Agent and the Banks and reflecting the amendments contemplated by the
Negative Pledge Letter.
5. This Seventh Amendment may be signed in any number of
counterparts, all of which shall be considered originals but all of which
together shall be deemed one instrument.
6. This Seventh Amendment (i) shall be governed by and construed in
accordance with the internal laws of the State of Connecticut, (ii) is limited
specifically to the matters set forth herein, (iii) does not constitute
directly or by implication a waiver or modification of any other provision of
the Agreement and (iv) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. The Borrower hereby agrees to pay the legal fees and disbursements
of Xxxx Xxxxx & Xxxxxxx LLP incurred in connection with the drafting and
negotiation of this Agreement and related matters.
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IN WITNESS WHEREOF, the parties hereto each have executed this Sixth
Amendment Agreement as of the date first hereinbefore written.
CMP MEDIA INC.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President/CFO
FLEET NATIONAL BANK
By:
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Name: G. Xxxxxx Xxxxx
Title: Assistant Vice-President
THE CHASE MANHATTAN BANK
By:
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Name:
Title:
FLEET NATIONAL BANK,
as Agent
By:
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Name:
Title:
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