SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of February 5, 1998 between
PRIMEDIA Inc., a Delaware corporation ("PRIMEDIA") and KKR 1996 Fund L.P., a
Delaware limited partnership ("KKR 1996").
I. STOCK SALE TO KKR 1996
1.1 Purchase of Common Stock.
Subject to all of the terms and conditions of this Agreement, KKR
1996 hereby agrees to purchase from PRIMEDIA, and PRIMEDIA agrees to sell to
KKR 1996, 16,666,667 shares of PRIMEDIA common stock, par value $.01 per
share ("KKR 1996 Shares"), for $12 per share, for an aggregate purchase price
of $200,000,004 (the "Purchase Price"). Such purchase shall be made 20 days
after an information statement regarding the purchase has been sent to the
stockholders of PRIMEDIA pursuant to Rule 14c-2 promulgated under the
Securities Exchange Act of 1934, as amended, or the earliest business day
thereafter upon which PRIMEDIA receives clearance of the purchase under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act. The closing of the purchase
will take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. At the closing KKR 1996 will pay to
PRIMEDIA the Purchase Price, in immediately available funds, against its
receipt of duly executed stock certificates, representing the KKR 1996
Shares, registered in the name of KKR 1996 on the books of Primedia.
1.2 Management Rights. After the Closing and for so long as the
Purchaser owns any equity or debt securities of PRIMEDIA, KKR 1996 shall have
the right to elect at least one member of the Board of Directors to PRIMEDIA.
KKR 1996 shall also have at all times after the closing the right to (i)
inspect and copy books and records of PRIMEDIA; (ii) visit and inspect the
PRIMEDIA properties; (iii) receive financial statements, operating reports
and budgets of PRIMEDIA; (iv) receive materials sent to the PRIMEDIA Board of
Directors; and (v) consult with and provide non-binding advice to PRIMEDIA
management on significant corporate actions.
II. PURCHASER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1 Investment Intention. KKR 1996 represents and warrants that
it is purchasing the KKR 1996 Shares solely for its own account for the
purpose of investment and not with a view to or for sale in connection with
any distribution of any thereof. KKR 1996 agrees that it will not, directly
or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise
dispose of any of the KKR 1996 Shares (or solicit any offers to buy,
purchase, or otherwise acquire or take a pledge of any of the Shares), except
in compliance with the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations thereunder.
2.2 Legends. The certificate (or certificates) representing the
KKR 1996 Shares shall bear the following legend (until such time as
subsequent transfers thereof are no longer restricted in accordance with the
Act):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS OR THE
RULES AND REGULATIONS THEREUNDER."
2.3 Federal Securities Laws Matters. KKR 1996 represents that it
is familiar with Release No. 5226 issued by the Securities and Exchange
Commission (the "SEC") under the Act, it has consulted with its counsel with
regard thereto, and it is fully aware of the position of the SEC limiting the
resale to the public of any of the KKR 1996 Shares.
2.4 Compliance with Rule 144. If any of the KKR 1996 Shares are
disposed of in accordance with Rule 144 under the Act, KKR 1996 shall deliver
to PRIMEDIA at or prior to the time of such disposition an executed copy of
Form 144 (if required by Rule 144) and such other documentation as PRIMEDIA
may reasonably require in connection with such sale.
2.5 Ability to Bear Risk. KKR 1996 represents and warrants that
(a) the financial situation of KKR 1996 is such that it can afford to bear
the economic risk of holding the unregistered KKR 1996 Shares for an
indefinite period and (b) it can afford to suffer the complete loss of its
investment in the KKR 1996 Shares.
2.6 Access to Information; Evaluation of Risks. KKR 1996
represents and warrants that (a) it understands and has taken cognizance of
all the risk factors related to the purchase of the KKR 1996 Shares, (b) it
has received and carefully reviewed information regarding the business of
PRIMEDIA and has been granted the opportunity to ask questions of, and
receive answers from, representatives of PRIMEDIA concerning the terms and
conditions of the purchase of the KKR 1996 Shares and to obtain any
additional information which it deems necessary to verify the accuracy or
completeness of the information furnished to it and (c) its knowledge and
experience in financial and business matters is such that it is capable of
evaluating the risks of the investment in the KKR 1996 Shares.
III. RULE 144
PRIMEDIA agrees that it will use its best efforts to file in a
timely manner all reports required to be filed by it pursuant to the
Securities Exchange Act of 1934, as amended, and, upon request of KKR 1996 or
a transferee of KKR 1996 Shares, will furnish KKR 1996 with such information
as may be necessary to enable KKR 1996 to effect routine sales pursuant to
Rule 144 under the Act.
IV. REGISTRATION RIGHTS
KKR 1996 will have such rights to have the KKR 1996 Shares
registered under the Act as may be provided in any Registration Rights
Agreement entered into by KKR 1996, PRIMEDIA and other holders or purchasers
of shares of Common Stock of PRIMEDIA on or after the date hereof.
V. MISCELLANEOUS
5.1 Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified mail,
return receipt requested, postage prepaid, to the parties to this Agreement
at the following addresses or to such other address as either party to this
Agreement shall specify by notice to the other:
if to PRIMEDIA, to it at:
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
if to KKR 1996, to it at:
KKR 1996 Fund L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
All such notices and communications shall be deemed to have been received on
the date of delivery or on the third business day after the mailing thereof.
5.2 Binding Effect; Benefits. This Agreement shall be binding
upon and inure to the benefit of the parties to this Agreement and their
respective successors and assigns. Except as provided in Article V, nothing
in this Agreement, express or implied, is intended or shall be construed to
give any person other than the parties to this Agreement or their respective
successors or assigns any legal or equitable right, remedy or claim under or
in respect of any agreement or any provision contained herein.
5.3 Waiver. Either party hereto may by written notice to the
other (a) extend the time for the performance of any of the obligations or
other actions of the other under this Agreement; (b) waive compliance with
any of the conditions or covenants of the other contained in this Agreement;
and (c) waive or modify performance of any of the obligations of the other
under this Agreement. Except as provided in the preceding sentence, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any preceding or succeeding
breach and no failure by any party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights or privileges
hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
5.4 Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by KKR 1996 and PRIMEDIA.
5.5 Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by PRIMEDIA or KKR 1996 without the prior written consent of the
other party.
5.6 Expenses. PRIMEDIA agrees that, whether or not the
transactions contemplated by this Agreement are consummated, PRIMEDIA will
pay or cause to be paid all costs and expenses arising in connection with the
preparation, execution, administration and enforcement of, and the
preservation of rights under, this Agreement, including, without limitation:
(a) all taxes (other than taxes based on income), fees or other
charges which may be payable in connection with the sale or purchase of
the KKR 1996 Shares pursuant to this Agreement;
(b) all expenses incurred by KKR 1996 in connection with the
maintenance of its books and records, preparation of tax returns and
delivery of tax information to its partners;
(c) an allocable portion of certain expenses incurred by KKR 1996
in connection with its organization in an amount not to exceed $10,000
in the aggregate, including, without limitation, legal fees; and
(d) all reasonable travel and other out-of-pocket expenses of the
general partner of KKR 1996 incurred in connection with KKR 1996's
ownership of the KKR 1996 Shares.
In addition, after consummation of the transactions contemplated by this
Agreement and so long as KKR 1996 owns any shares of common stock acquired
pursuant to this Agreement, PRIMEDIA will reimburse KKR 1996 or the general
partner of KKR 1996 for all costs incurred in transmitting information
regarding PRIMEDIA to the limited partners of KKR 1996 or in distributing
dividends or other distributions received from PRIMEDIA to the limited
partners of KKR 1996.
5.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, PRIMEDIA agrees to indemnify and hold harmless KKR
1996, its limited and general partners and its affiliates (and the partners,
members, directors, officers, affiliates and controlling persons of each of
the foregoing) (each a "KKR 1996 Indemnitee") from and against any
liabilities, obligations, losses, damages, deficiencies, obligations, fines
and assessments, penalties, actions, judgments, suits, claims, costs,
injuries, demands, proceedings, investigations, arbitrations (including
shareholder claims, actions, injuries, demands, suits, judgments,
proceedings, investigations or arbitrations) and disbursements, including,
without limitation, accountant's and attorney's fees and expenses incurred by
a KKR 1996 Indemnitee before or after the date of this Agreement and arising
out of, resulting from, or relating to (i) the operations of PRIMEDIA, (ii)
KKR 1996's purchase and/or ownership of the KKR 1996 Shares or (iii) any
litigation to which a KKR 1996 Indemnitee is made a party in its capacity as
a shareholder or owner (or a partner, member, director, officer, affiliate or
controlling person of a shareholder or owner) of securities of PRIMEDIA.
5.8 Limited Liability of Partners. Notwithstanding any other
provision of this Agreement, neither the general partner nor the limited
partners nor any future general or limited partner of KKR 1996 shall have any
personal liability for performance of any obligation of KKR 1996 under this
Agreement in excess of the respective capital contribution of such general
partner and limited partners to KKR 1996.
5.9 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
5.10 Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
5.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, PRIMEDIA and KKR 1996 have executed this
Agreement as of the day and year first above written.
PRIMEDIA, INC.
By:/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Vice-Chairman and
Secretary
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P.
Its General Partner
By: KKR 1996 GP LLC
By:/s/ Xxxxx Xxxxxx
A General Partner
