EXHIBIT 10.1
DISTRIBUTION AGREEMENT
among
XXXX-XXXXX INC.,
KEY3MEDIA GROUP, INC.
and
KEY3MEDIA EVENTS, INC.
dated as of August ___, 2000
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1. General......................................................1
SECTION 1.2. Reference; Interpretation....................................6
ARTICLE II
COVENANTS
SECTION 2.1. Corporate Reorganization and Other Transactions..............6
SECTION 2.2. Credit Facility..............................................7
SECTION 2.3. Senior Debentures............................................7
SECTION 2.4. Repayment of Borrowings......................................7
SECTION 2.5. Dividend to Xxxx-Xxxxx.......................................7
SECTION 2.6. Inter-Group Obligations......................................7
SECTION 2.7. Further Assurances...........................................8
SECTION 2.8. Witness Services.............................................8
SECTION 2.9. Transition Services..........................................8
SECTION 2.10. Corporate Names; Trademarks.................................8
ARTICLE III
DISTRIBUTION
SECTION 3.1. Distribution.................................................9
ARTICLE IV
CONDITIONS TO THE DISTRIBUTION
SECTION 4.1. Conditions to the Distribution...............................9
SECTION 4.2. No Constraints..............................................10
SECTION 4.3. Deferral of the Distribution Date...........................10
SECTION 4.4. Public Notice of the Deferred Distribution Date.............11
ARTICLE V
INDEMNIFICATION
SECTION 5.1. Indemnification by Xxxx-Xxxxx...............................11
SECTION 5.2. Indemnification by Key3Media................................11
SECTION 5.3. Procedures for Indemnification..............................11
SECTION 5.4. Indemnification Payments....................................13
ARTICLE VI
TAX
SECTION 6.1. Liability for Taxes and Related Matters.....................13
SECTION 6.2. Transfer Taxes..............................................17
SECTION 6.3. Information to be Provided by Key3Media.....................17
SECTION 6.4. Payments....................................................17
SECTION 6.5. Treatment of Intercompany Payments..........................17
SECTION 6.6. Tax Attributes..............................................17
SECTION 6.7. Assistance and Cooperation..................................18
SECTION 6.8. Survival of Obligations.....................................19
ARTICLE VII
ACCESS TO INFORMATION
SECTION 7.1. Provision of Corporate Records..............................19
SECTION 7.2. Access to Information.......................................19
SECTION 7.3. Confidentiality.............................................19
SECTION 7.4. Privileged Matters..........................................20
SECTION 7.5. Ownership of Information....................................21
SECTION 7.6. Retention of Records........................................21
SECTION 7.7. Limitation of Liability; Release............................22
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Complete Agreement; Construction............................22
SECTION 8.2. Counterparts................................................22
SECTION 8.3. Survival of Agreements......................................22
SECTION 8.4. Distribution Expenses.......................................22
SECTION 8.5. Notices.....................................................23
SECTION 8.6. Waivers.....................................................23
SECTION 8.7. Amendments..................................................23
SECTION 8.8. Assignment..................................................24
SECTION 8.9. Successors and Assigns......................................24
SECTION 8.10. Termination................................................24
SECTION 8.11. Subsidiaries...............................................24
SECTION 8.12. Third Party Beneficiaries..................................24
SECTION 8.13. Title and Headings.........................................24
SECTION 8.14. Exhibits and Schedules.....................................24
SECTION 8.15. GOVERNING LAW..............................................24
SECTION 8.16. Consent to Jurisdiction....................................24
SECTION 8.17. Severability...............................................25
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") is dated as of August
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__, 2000, among Xxxx-Xxxxx Inc., a Delaware corporation ("Xxxx-Xxxxx"),
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Key3Media Group, Inc., a Delaware corporation ("Key3Media"), and Key3Media
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Events, Inc., a Delaware corporation and a wholly owned subsidiary of Xxxx-Xxxxx
("Events").
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WHEREAS, the Board of Directors of Xxxx-Xxxxx has determined that it
is appropriate and desirable to dispose of all of its businesses that are not
Internet-related and transform Xxxx-Xxxxx into a company focused almost
exclusively on Internet-related businesses;
WHEREAS, through its wholly owned subsidiaries listed on Exhibit A
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hereto (collectively, the "Events Subsidiaries"), Xxxx-Xxxxx is currently
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engaged in the businesses of producing, promoting and managing tradeshows,
conferences and other events for the information technology industry (the
"Events Business");
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WHEREAS, the Board of Directors of Xxxx-Xxxxx has determined that it
is appropriate and desirable to dispose of the Events Business by (i) causing
all of the Event Subsidiaries other than Events to become wholly owned by Events
and Key3Media, (ii) contributing all of the issued and outstanding shares of
Events to Key3Media in exchange for shares of the common stock, par value $0.01
per share, of Key3Media (the "Key3Media Common Stock"), and (iii) distributing
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shares of Key3Media Common Stock by dividend to the record holders of the issued
and outstanding shares of Xxxx-Xxxxx Inc. -- ZD Common Stock, par value $0.01
per share, of Xxxx-Xxxxx (the "Xxxx-Xxxxx Common Stock"), at the close of
-----------------------business on a record date
to be determined as provided herein at the rate of one Key3Media Share for each
two shares of Xxxx-Xxxxx Common Stock (the "Distribution");
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NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. General. Unless otherwise defined herein or unless the
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context otherwise requires, as used in this Agreement, the following terms shall
have the following meanings:
"Action" means any lawsuit or other proceeding by or before any
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court or other governmental, regulatory or administrative body.
"Affiliate" shall have the meaning set forth in Rule 405
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promulgated under the Securities Act as interpreted thereunder.
"Agent" shall have the meaning set forth in Section 3.1(a) of
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this Agreement.
"Agreement" shall mean this Distribution Agreement.
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"Commission" shall mean the U.S. Securities and Exchange
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Commission.
"Distribution" shall have the meaning set forth in the recitals
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to this Agreement.
"Distribution Date" shall mean such date as may be determined by
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the Board of Directors of Xxxx-Xxxxx, or such committee of such Board of
Directors as shall be designated by the Board of Directors of Xxxx-Xxxxx,
as the date as of which the Distribution shall be effected.
"Distribution Record Date" shall mean such date as may be
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determined by the Board of Directors of Xxxx-Xxxxx, or such committee of
such Board of Directors as shall be designated by the Board of Directors of
Xxxx-Xxxxx, as the record date for the Distribution.
"Effective Time" shall mean 5:00 p.m., New York City time, on the
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Distribution Date.
"Event Subsidiaries" shall have the meaning set forth in the
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Recitals to this Agreement.
"Event Businesses" shall have the meaning assigned to it in the
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Recitals to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, together with the rules and regulations promulgated thereunder.
"Financings" shall have the meaning set forth in Section 2.4.
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"Governmental Authority" shall mean any federal, state, local,
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foreign or international court, government, department, commission, board,
bureau, agency, official, the NYSE, the NASD or other regulatory,
administrative or governmental authority.
"Income Taxes" means all federal, state, local or foreign income,
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franchise or similar taxes imposed on or measured by (i) net income or (ii)
capital, where the taxing jurisdiction (A) taxes capital in lieu of net
income, (B) taxes capital in addition to net income or (C) imposes a tax on
capital as a minimum tax where there is no net income, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
"Income Tax Returns" means all reports, forms, filings,
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information returns or other documents required to be filed with respect to
Income Taxes and all schedules or statements required to be filed
therewith, including without limitation any
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amended returns, and any documents with respect to or accompanying payments
of estimated Income Taxes.
"Income Tax Returns Supporting Documentation" means all
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supporting documentation, forms, filings, questionnaires, disclosure
schedules, schedules of Income Tax attributes, workpapers, calculations of
any limitations on availability of any Income Tax benefit or attribute, and
information returns.
"Indemnified Party" shall have the meaning set forth in Section
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5.3(a) of this Agreement.
"Indemnifying Party" shall have the meaning set forth in Section
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5.3(a) of this Agreement.
"Key3Media" shall have the meaning set forth in the preamble to
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this Agreement.
"Key3Media Common Stock" shall have the meaning set forth in the
----------------------
Recitals to this Agreement.
"Key3Media Group" shall mean Key3Media and the Events
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Subsidiaries.
"Key3Media Indemnitees" shall mean:
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(i) Key3Media and each of the Events Subsidiaries; and
(ii) each of the respective past, present and future directors,
officers, members, employees and agents of any of the entities
described in the immediately preceding clause (i) and each of the
heirs, executors, successors and assigns of any of such directors,
officers, members, employees and agents.
"Key3Media Shares" shall have the meaning set forth in Section
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2.1(a) to this Agreement.
"Law" shall mean all laws, statutes and ordinances and all
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regulations, rules and other pronouncements of Governmental Authorities
having the effect of law of the United States, any foreign country, or any
domestic or foreign state, province, commonwealth, city, country,
municipality, territory, protectorate, possession or similar
instrumentality, or any Governmental Authority thereof.
"Liabilities" shall mean any and all debts, liabilities,
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obligations, losses, damages (whether compensatory, punitive or treble),
fines, penalties and sanctions, absolute or contingent, matured or
unmatured, liquidated or unliquidated, foreseen or unforeseen, joint,
several or individual, asserted or unasserted, accrued or unaccrued, known
or unknown, whenever arising, including without limitation those arising
under or in connection with any Law (including any environmental laws),
Action, threatened
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Action, order or consent decree of any Governmental Authority or any award
of any arbitration tribunal, and those arising under any contract,
guarantee, commitment or undertaking, whether sought to be imposed by a
Governmental Authority, private party, or party to this Agreement, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, or otherwise, and including any costs, expenses,
interest, attorneys' fees, disbursement and expense of counsel, expert and
consulting fees and costs related thereto or to the investigation or
defense thereof.
"NASD" shall mean the National Association of Securities Dealers.
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"Notices" shall have the meaning set forth in Section 8.5 of this
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Agreement.
"NYSE" shall mean the New York Stock Exchange, Inc.
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"Person" shall mean any natural person, corporation, business
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trust, limited liability company, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
"Pro-Forma Income Tax Return" means a draft Income Tax Return
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indicating the liability of Key3Media for an Income Tax period, it being
understood by the parties to this Agreement that each such draft shall
substantially reflect such liability of Key3Media as reported on the Income
Tax Return ultimately filed for such period by the Xxxx-Xxxxx Group
(including for this purpose members of the Key3Media Group).
"Records" shall have the meaning set forth in Section 7.1 of this
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Agreement.
"Registration Rights Agreement" shall mean the Registration
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Rights Agreement by and between SOFTBANK Corp. and Key3Media, which
agreement shall be entered into prior to or on the Distribution Date in the
form attached hereto as Exhibit B.
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"Registration Statements" shall mean, collectively, the
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Registration Statement on Form S-1, File No. 333-36828, relating to the
Distribution filed by Key3Media with the Commission under the Securities
Act and the Registration Statement on Form 10 relating to the Key3Media
Common Stock filed by Key3Media with the Commission under the Exchange Act,
in each case in the form declared effective by the Commission.
"Representative" shall mean, with respect to any Person, the
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directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives of such Person and its Subsidiaries.
"Securities Act" shall mean the Securities Act of 1933, as
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amended, together with the rules and regulations promulgated thereunder.
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"Subsidiary" shall mean, with respect to any specified Person,
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any corporation or other legal entity of which such Person or any of its
Subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote generally in the election
of members to the board of directors or similar governing body.
"Taxes" means all federal, state, local or foreign, property
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(real or personal), production, sales, use, value added, license, excise,
franchise, transfer, gains, mortgage recording, transportation, employment,
occupation, pension plan, Social Security, payroll withholding, withholding
or similar taxes imposed on the properties or other assets of the relevant
entity, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.
"Tax Returns" means all reports and returns required to be filed
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with respect to or including the Taxes of the relevant member or members of
the Key3Media Group.
"Unclaimed Property" shall have the meaning set forth in Section
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3.1(c).
"ZD Intellectual Property" shall have the meaning set forth in
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Section 2.10(a) of this Agreement.
"Xxxx-Xxxxx" shall have the meaning set forth in the preamble to
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this Agreement.
"Xxxx-Xxxxx Businesses" shall mean, collectively, each and every
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business conducted at any time by Xxxx-Xxxxx or any of its Subsidiaries
other than the Events Businesses.
"Xxxx-Xxxxx Common Stock" shall have the meaning set forth in the
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Recitals to this Agreement.
"Xxxx-Xxxxx Group" shall mean Xxxx-Xxxxx and each Person that is
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a Subsidiary of Xxxx-Xxxxx other than members of the Key3Media Group.
"Xxxx-Xxxxx Indemnitee" shall mean:
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(i) Xxxx-Xxxxx and each Affiliate thereof; and
(ii) each of the respective past, present and future directors,
officers, members, employees and agents of any of the entities
described in the immediately preceding clause (i) and each of the
heirs, executors, successors and assigns of any of such directors,
officers, members, employees and agents, except in the case of clauses
(i) and (ii), the Key3Media Indemnitees.
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SECTION 1.2. Reference; Interpretation. References in this Agreement
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to any gender include references to all genders, and references to the singular
include references to the plural and vice versa. The words "include", "includes"
and "including" when used in this Agreement shall be deemed to be followed by
the phrase "without limitation." Unless the context otherwise requires,
references in this Agreement to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement. Unless the context otherwise requires, the words "hereof",
"hereby" and "herein" and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement. This Agreement shall not be construed
against either party as the principal draftsperson hereof.
ARTICLE II
COVENANTS
SECTION 2.1. Corporate Reorganization and Other Transactions.
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(a) Corporate Reorganization. On or prior to the Distribution Date,
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Xxxx-Xxxxx shall transfer or cause to be transferred to Events all of the issued
and outstanding shares of the capital stock of, or other equity interests in,
each of the Events Subsidiaries other than Events (other than those held by
individuals or to be transferred to Key3Media pursuant to the next sentence).
Thereafter, and on or prior to the Distribution Date, Xxxx-Xxxxx shall transfer
or cause to be transferred to Key3Media all of the issued and outstanding shares
of capital stock of, or other equity interests in, Events and the remaining
shares it owns in the Event Subsidiaries other than Events and in consideration
of such transfers Key3Media shall issue and deliver to Xxxx-Xxxxx a certificate
registered in the name of Xxxx- Xxxxx representing the number of shares of
Key3Media Common Stock equal to one-half of the total number of issued and
outstanding shares of Xxxx-Xxxxx Common Stock held of record at the close of
business on the Distribution Record Date (the "Key3Media Shares"). Key3Media
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hereby represents and warrants that each Key3Media Share will be validly issued,
fully paid and non-assessable and free of any preemptive (or similar) rights.
(b) Charter and Bylaws. On or prior to the Distribution Date, Key3Media and
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Xxxx-Xxxxx shall have taken all necessary actions to provide for the adoption of
the form of Restated Certificate of Incorporation and Bylaws in substantially
the form filed by Key3Media with the Commission as exhibits to the Registration
Statements.
(c) Directors. On or prior to the Distribution Date, Xxxx-Xxxxx and
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Key3Media shall have taken all necessary action to cause the Board of Directors
of Key3Media to consist of the individuals identified as directors of Key3Media
in the Registration Statements.
(d) Election of Officers. On or prior to the Distribution Date, Key3Media
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shall take all actions necessary and desirable so that as of the Distribution
Date the officers of Key3Media will be as set forth in the Registration
Statements.
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(e) State Securities Laws. Prior to the Distribution Date, Xxxx-Xxxxx and
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Key3Media shall take all such action as may be necessary or appropriate under
the securities or blue sky laws of states or other political subdivisions of the
United States in order to effect the Distribution.
(f) Listing Application. Prior to the Distribution Date, Xxxx-Xxxxx and
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Key3Media shall prepare and file with the NYSE a listing application and related
documents and shall take all such other actions with respect thereto as shall be
necessary or desirable in order to cause the NYSE to list the Key3Media Common
Stock on or prior to the Distribution Date, subject to official notice of
issuance.
(g) Notice to NYSE. Xxxx-Xxxxx shall give the NYSE not less than ten days
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advance notice of the Distribution Record Date in compliance with Rule 10b- 17
under the Exchange Act.
(h) Other Transactions. On or prior to the Distribution Date, the parties
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hereto shall have consummated those other transactions in connection with the
Distribution that are contemplated by the Registration Statements and not
specifically referred to in this Section 2.1.
SECTION 2.2. Credit Facility. On or prior to the Distribution Date,
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Events will (i) enter into a credit facility with one or more financial
institutions, (ii) make term loan borrowings thereunder in an aggregate
principal amount of $330 million and (iii) after deducting the fees payable to
the lenders in connection with such borrowings, receive aggregate net proceeds
from these borrowings of $323,235,000. The terms of such credit facilities shall
be as described in the Registration Statements.
SECTION 2.3. Senior Debentures. On or prior to the Distribution Date,
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Key3Media will issue and sell zero coupon senior debentures with an aggregate
initial principal amount of $75 million and warrants to purchase Key3Media
Common Stock and will receive aggregate net proceeds from such sale of
$72,937,500. The terms of such debentures and warrants shall be as described in
the Registration Statements. Promptly after it receives such net proceeds and
the net proceeds of the offering, Key3Media shall contribute all but $47.498
million of such combined net proceeds to Events.
SECTION 2.4. Repayment of Borrowings. On or prior to the Distribution
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Date, but after receiving the net proceeds (or portion thereof) of the
financings described in Sections 2.2 and 2.3 (collectively, the "Financings"),
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Events shall repay (i) the $150 million that it borrowed under the 364 Day
Revolving Credit Agreement, dated April 13, 2000 and (ii) the $232,002,000 it
owes to Xxxx-Xxxxx.
SECTION 2.5. Dividend to Xxxx-Xxxxx. On or prior to the Distribution
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Date but after the reorganization required by Section 2.1(a), Events shall
dividend to Key3Media, and thereafter Key3Media shall dividend to Xxxx-Xxxxx,
$42,998,000.
SECTION 2.6. Inter-Group Obligations. The parties shall forgive
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without consideration at the Effective Time (but after the repayment pursuant to
Section 2.4) any and all
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amounts owing between any member of the Key3Media Group and any member of the
Xxxx-Xxxxx Group other than those arising under this Agreement, and each of the
parties agrees to indemnify and hold the other harmless from and against any
such liabilities after the Effective Time.
SECTION 2.7. Further Assurances. In case at any time after the
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Effective Time any further action is reasonably necessary or desirable to carry
out the purposes of this Agreement, the proper officers of each party to this
Agreement shall take all such necessary action.
SECTION 2.8. Witness Services. At all times from and after the
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Distribution Date, each of Xxxx-Xxxxx and Key3Media shall use their commercially
reasonable efforts to make available to the other, upon reasonable written
request, its Representatives as witnesses to the extent that (a) such persons
may reasonably be required in connection with the prosecution or defense of any
Action in which the requesting party from time to time be involved and (b) there
is no conflict in the Action between the requesting party and the other party. A
party providing witness services to the other party under this Section shall be
entitled to receive from the recipient of such services, upon the presentation
of invoices therefor, payments for such amounts, relating to disbursements and
other out-of-pocket expenses (which shall be deemed to exclude the costs of
salaries and benefits of employees who are witnesses), as may be reasonably
incurred in providing such witness services.
SECTION 2.9. Transition Services. After the Distribution Date, if
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Key3Media requests that Xxxx-Xxxxx provide it with any transition services
reasonably required by Key3Media, the parties will consult in good faith to
determine whether Xxxx-Xxxxx can reasonably provide such services and the basis
on which such services, if any, will be provided.
SECTION 2.10. Corporate Names; Trademarks. The parties agree that:
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(a) as soon as reasonably practicable after the Distribution Date but in
any event within six months thereafter, Key3Media will, at its own expense,
remove (or, if necessary, on an interim basis, cover up) any and all exterior
signs and other identifiers located on any property or premises of or used by
any member of the Key3Media Group which refer or pertain to Xxxx-Xxxxx or which
include the Xxxx-Xxxxx name, logo or other trademark (including but not limited
to "Xxxx-Xxxxx" or "ZD" any similar marks or any derivatives thereof) or other
Xxxx-Xxxxx intellectual property (the "ZD Intellectual Property"); and
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(b) as soon as is reasonably practicable after the Distribution Date but in
any event within six months thereafter, Key3Media will, and will cause its
Subsidiaries to, remove from all letterhead, envelopes, invoices and other
communications media of any kind that are to be used by Key3Media after the
Effective Time, all references to any of the ZD Intellectual Property (except
that Key3Media shall not be required to take any such action with respect to
materials in the possession of customers or to transactions currently in
progress).
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ARTICLE III
DISTRIBUTION
SECTION 3.1. Distribution. Subject to the conditions set forth in
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Article IV:
(a) On or prior to the Distribution Date, Xxxx-Xxxxx shall deliver to
Key3Media's stock transfer agent (the "Agent") the share certificate or
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certificates representing the Key3Media Shares duly endorsed by Xxxx-Xxxxx in
blank, for the benefit of the record holders of Xxxx-Xxxxx Common Stock as of
the Distribution Record Date, and Xxxx-Xxxxx shall instruct the Agent to
distribute, on or as soon as practicable following the Distribution Date,
certificates representing such Key3Media Shares to such record holders as
contemplated by the Registration Statements and this Agreement. Key3Media shall
provide any share certificates or other documentation that the Agent shall
reasonably require in order to effect the Distribution.
(b) No fractional shares of Key3Media Common Stock will be issued in the
Distribution; instead the Agent will aggregate all fractional shares to which
all the record holders of ZD Common Stock would otherwise be entitled into whole
shares and will sell the whole shares in the open market at then prevailing
prices as soon as practicable after the Distribution Date on behalf of such
holders. The Agent will distribute to each such holder such holder's ratable
share of the proceeds of such sale, net of brokerage commissions and other
expenses incurred in such sales, as soon as practicable after the Distribution
Date.
(c) The Agent shall return to Xxxx-Xxxxx any Key3Media Shares, cash in lieu
of fractional shares and/or dividends or distributions with respect to the
Key3Media Shares that remain unclaimed by stockholders 180 days after the
Distribution Date ("Unclaimed Property") and thereafter such stockholders shall
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look only to Xxxx-Xxxxx for such Unclaimed Property, subject to applicable
escheat or other abandoned property laws.
(d) Solely for purposes of computing fractional share interests, the
beneficial owner of shares of Xxxx-Xxxxx Common Stock held of record in the name
of a nominee will be treated as the holder of record of such shares.
ARTICLE IV
CONDITIONS TO THE DISTRIBUTION
SECTION 4.1. Conditions to the Distribution. The obligations of the
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parties hereto to consummate the Distribution are subject to the satisfaction or
waiver of each of the following conditions:
(a) Covenants. Each of Xxxx-Xxxxx and Key3Media shall have taken in all
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material respects the actions required to be taken by it under this Agreement
prior to the Distribution;
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(b) Listing of Key3Media Common Stock. The Key3Media Common Stock shall
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have been approved for listing on the NYSE, subject to official notice of
issuance;
(c) Effectiveness of Registration Statements. Each of the Registration
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Statements shall been filed with the SEC and shall each have become effective,
and no stop order with respect to either of them shall be in effect;
(d) Governmental Authorizations. All material authorizations, consents,
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approvals and clearances of federal, state, local and foreign governmental
agencies required to permit the valid consummation by the parties hereto of the
transactions contemplated by this Agreement shall have been obtained; and no
such authorization, consent, approval or clearance shall contain any conditions
which would have a material adverse effect on the ability of Xxxx-Xxxxx or
Key3Media to perform its obligations under this Agreement and all statutory
requirements for such valid consummation shall have been fulfilled;
(e) No Stop Orders. No preliminary or permanent injunction or other
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order, decree or ruling issued by a court of competent jurisdiction or by a
government, regulatory or administrative agency or commission, and no statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the consummation of this Agreement or
the Distribution;
(f) Execution and Delivery of Certain Agreements. SOFTBANK Corp. and
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Key3Media shall have executed and delivered the Registration Rights Agreement
and SOFTBANK Corp. shall have executed and delivered a Lock-Up Agreement in
substantially the form attached hereto as Exhibit C;
(g) Financings. Key3Media and Events shall have received the proceeds of
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the Financings and shall have made the contributions or loans, repayments and
dividends specified in Article II; and
(h) Instructions to Agent. An officer of Xxxx-Xxxxx shall have
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instructed the Agent to make the Distribution effective.
SECTION 4.2. No Constraints. Notwithstanding the provisions of
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Section 4.1, the fulfillment or waiver of any or all of the conditions precedent
to the Distribution set forth therein shall not in any way limit Xxxx-Xxxxx'
right and power under Section 8.10 to terminate this Agreement and the process
leading to the Distribution and to abandon the Distribution or alter the
consequences of any such termination under Section 8.10 from those specified in
such Section.
SECTION 4.3. Deferral of the Distribution Date. If the Distribution
---------------------------------
Date shall have been established by the board of directors of Xxxx-Xxxxx but all
the conditions precedent to the Distribution set forth in this Agreement have
not theretofore been fulfilled or waived, or Xxxx-Xxxxx does not reasonably
anticipate that they will be fulfilled or waived, on or prior to the date
established as the Distribution Date, the Distribution shall not occur at the
time established and Xxxx-Xxxxx may, by resolution of its board of directors (or
a committee thereof, so authorized),
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defer the Distribution Date to a later date. Subject to its right to terminate
this Agreement, Xxxx-Xxxxx shall cause the Distribution to occur as promptly as
is reasonably practicable.
SECTION 4.4. Public Notice of the Deferred Distribution Date. If the
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Distribution Date is deferred in accordance with Section 4.3 and public
announcement of the prior Distribution Date has theretofore been made,
Xxxx-Xxxxx shall promptly thereafter issue a public announcement with respect to
such deferment and shall take such other actions as may be required by law or
deemed necessary or desirable with respect to the dissemination of such
information. Prior to any such public announcement, Xxxx-Xxxxx shall consult
with Key3Media concerning the content thereof.
ARTICLE V
INDEMNIFICATION
SECTION 5.1. Indemnification by Xxxx-Xxxxx. Xxxx-Xxxxx shall indemnify
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and hold harmless the Key3Media Indemnitees from and against any and all
third-party claims that arise out of or result from (i) the Xxxx-Xxxxx
Businesses, (ii) the litigation listed on Schedule 5.1 or any shareholder
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derivative suits relating to or arising out of the Distribution or the
restructuring contemplated hereby, (iii) misstatements in or omissions from the
Registration Statements that relate to the Xxxx-Xxxxx Group or the Distribution,
(iv) Unclaimed Property, (v) the Distribution, except for those relating to the
Financings or described in clause (iii) of Section 5.2, (vi) any failure of the
ZD Retirement & Savings Plan to be fully funded as of the Distribution Date or
(vii) any breach of this agreement. Notwithstanding the foregoing, in no event
shall Xxxx-Xxxxx be required to indemnify and hold harmless Xxxxx Xxxxxxxxxx
under this Agreement from and against any liabilities arising out of any
derivative suits or claims brought against him in his role as a director of
Xxxx-Xxxxx.
SECTION 5.2. Indemnification by Key3Media. Key3Media shall indemnify
----------------------------
and hold harmless the Xxxx-Xxxxx Indemnitees from and against any and all
third-party claims to the extent they arise out of or result from (i) the Events
Business, (ii) the litigation listed on Schedule 5.2, (iii) misstatements in or
------------
omissions from the Registration Statements that relate to the Key3Media Group,
the Financings, or the offering described in the Registration Statement or (iv)
any breach of this agreement.
SECTION 5.3. Procedures for Indemnification.
------------------------------
(a) Third-Party Claims. If a third-party claim is made against a
------------------
Key3Media Indemnitee or a Xxxx-Xxxxx Indemnitee (each, an "Indemnified Party")
-----------------
as to which such Indemnified Party is entitled to indemnification pursuant to
this Agreement, such Indemnified Party shall notify the party which is or may be
required pursuant to Section 5.1 or Section 5.2 hereof to make such
indemnification (the "Indemnifying Party") in writing, and in reasonable detail
------------------
(to the extent available), of the third-party claim promptly (and in any event
within 15 Business Days) after receipt by such Indemnified Party of written
notice of the third-party claim; provided, however, that failure to give such
notification shall not affect the Indemnifying Party's indemnification
obligations provided hereunder except to the extent the Indemnifying Party shall
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have been actually prejudiced as a result of such failure; and provided,
--------
further, that the Indemnifying Party shall not be liable for any expenses
-------
incurred during the period in which the Indemnified Party failed to give such
notice. Thereafter, the Indemnified Party shall deliver to the Indemnifying
Party, promptly (and in any event within ten Business Days) after the
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the
third-party claim.
If a third-party claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party. If the
Indemnifying Party elects to assume the defense of a third-party claim and
notifies the Indemnified Party of such election in writing, the Indemnifying
Party shall thereafter not be liable to the Indemnified Party for legal or other
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof; provided, however, that such Indemnified Party shall have the
-------- -------
right to employ counsel to represent such Indemnified Party if, in such
Indemnified Party's reasonable judgment, a conflict of interest between such
Indemnified Party and such Indemnifying Party exists in respect of such claim
which would make representation of both such parties by one counsel
inappropriate, and in such event the fees and expenses of one separate counsel
for all the Indemnified Parties party to such claim shall be paid by such
Indemnifying Party. If the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right to participate in the defense thereof
with separate counsel retained by it at its own expense (subject to the proviso
of the preceding sentence), it being understood and agreed, however, that the
Indemnifying Party and its counsel shall control such defense. The Indemnifying
Party shall be liable for the reasonable fees and expenses of counsel employed
by the Indemnified Party during any period after the Indemnified Party shall
have given written notice to the Indemnifying Party of such third party claim
and before the Indemnifying Party shall have assumed the defense thereof. If
the Indemnifying Party so elects to assume the defense of any third-party claim,
all of the Indemnified Parties shall cooperate with the Indemnifying Party in
the defense or prosecution thereof, including by providing or causing to be
provided, Records and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of the Indemnifying Party;
provided that the Indemnifying Party shall reimburse the Indemnified Parties for
--------
all of out-of-pocket expenses they incur in so cooperating.
In no event will any Indemnified Party admit any liability with
respect to, or settle, compromise or discharge, any third-party claim for which
it is entitled to indemnity hereunder without the Indemnifying Party's prior
written consent; provided, however, that the Indemnified Party shall have the
-------- -------
right to settle, compromise or discharge such third-party claim without the
consent of the Indemnifying Party if the Indemnified Party releases the
Indemnifying Party from its indemnification obligation hereunder with respect to
such third-party claim and such settlement, compromise or discharge would not
otherwise adversely affect the Indemnifying Party. The Indemnified Party will
agree to any settlement, compromise or discharge of a third-party claim that the
Indemnifying Party may recommend and that (i) by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such third-party claim, (ii) does not contain any admission of guilt or fault on
the part of the Indemnified Party, (iii) releases the Indemnified Party
completely in connection with such third-party claim and (iv)
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would not otherwise adversely affect the Indemnified Party. If an Indemnifying
Party elects not to assume the defense of a third-party claim, such Indemnified
Party may compromise, settle or defend such third-party claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any third-party claim (and shall be liable for
the fees and expenses of counsel incurred by the Indemnified Party in defending
such third-party claim) if the third-party claim seeks an order, injunction or
other equitable relief or relief for other than money damages against the
Indemnified Party which the Indemnified Party reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of the third-
party claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to money
damages.
(b) In the event of payment by an Indemnifying Party to any Indemnified
Party in connection with any third-party claim, then to the extent of such
payment such Indemnifying Party shall be subrogated to and shall stand in the
place of such Indemnified Party as to any events or circumstances in respect of
which such Indemnified Party may have any right or claim relating to such
third-party claim against any claimant or plaintiff asserting such third-party
claim. Such Indemnified Party shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim.
(c) The remedies provided in this Article V shall be cumulative and shall
not preclude assertion by any Indemnified Party of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
SECTION 5.4. Indemnification Payments. (a) Indemnification required by
------------------------
this Article V shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
loss, liability, claim, damage or expense is incurred.
(b) The amount of any claim by an Indemnified Party under this Agreement
shall be reduced to reflect any actual tax savings received by any Indemnified
Party that result from the Indemnifiable Losses that gave rise to such
indemnity.
ARTICLE VI
TAX
SECTION 6.1. Liability for Taxes and Related Matters
---------------------------------------
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(a) Liability for Taxes. Xxxx-Xxxxx shall be liable for, shall indemnify
-------------------
and hold Key3Media harmless from and against, and shall make payment of (i) any
Income Tax imposed on any member of the Xxxx-Xxxxx Group and the Key3Media Group
attributable to any Income Tax period ending prior to or on the Distribution
Date (the "Pre-Distribution Period"), (ii) any Income Taxes for a
-----------------------
Pre-Distribution Period resulting from or attributable to transactions described
in this Distribution Agreement, including, without limitation, the distribution
of the Key3Media stock in the Distribution, (iii) any Income Taxes for which any
member of the Key3Media Group is or may be liable as a result of being
affiliated with the Xxxx-Xxxxx Group or any prior affiliated group under
Treasury Regulation Section 1502-6 or any similar provision of foreign, state,
local law or under a transferee liability or similar theory, (iv) with respect
to any Income Tax periods that begin before but end after the Distribution Date,
Income Taxes imposed for the portion of such periods that are deemed to close on
the Distribution Date pursuant to Section 6.1(c), (v) any payroll, Social
Security, Medicare, unemployment, pension or similar state, local or foreign
Taxes attributable to any Pre-Distribution Period for which the Xxxx-Xxxxx Group
processed the payroll for the Key3Media Group, except to the extent such
liability of the Xxxx- Xxxxx Group is attributable to information provided to
the Xxxx-Xxxxx Group by Key3Media, and (vi) any foreign Tax attributable to any
Pre-Distribution Period. Xxxx-Xxxxx shall be entitled to any refund of (x)
Income Taxes received by the Key3Media Group attributable to any Pre-
Distribution Period and any portion of the periods for which Xxxx-Xxxxx is
liable under this Section 6.1(a)(i), (ii), (iii) and (iv), and (y) other Taxes
for which Xxxx-Xxxxx is liable under Section 6.1(a)(v) or (vi).
(b) Key3Media shall be liable for, shall indemnify and hold Xxxx-Xxxxx
harmless from and against and shall make payments of (i) the Income Taxes of all
members of the Key3Media Group for any taxable year or period that begins on the
day after the Distribution Date and, with respect to any taxable year or period
beginning before and ending after the Distribution Date, the portion of such
taxable year beginning on the day after the Distribution Date and (ii) the Taxes
of all members of the Key3Media Group for any period, other than any Taxes for
which Xxxx-Xxxxx is liable under Section 6.1(a)(v)-(vi). Key3Media shall be
entitled to any refund of Taxes and Income Taxes of all members of the Key3Media
Group received for such periods except for any Income Taxes or Taxes for which
Xxxx-Xxxxx is liable under Section 6.1(a)(i)-(vi).
(c) Taxes for Short Taxable Year. For purposes of determining the liability
----------------------------
for Income Taxes of the Xxxx-Xxxxx Group and Key3Media with respect to any
Income Tax periods or years that begin before the Distribution Date but do not
end on the Distribution Date, there shall be deemed to be a short Income Tax
period closing on the Distribution Date and another short Income Tax period
beginning on the day immediately following the Distribution Date. Any items of
income, deductions, expenditures and Income Tax attributes shall be allocated
between these two short Income Tax periods on the basis of the closing of the
books method as of the end of the day at the Distribution Date, except that
exemptions, allowances or deductions that are calculated on an annual basis
shall be prorated on the basis of the number of days in the applicable period
that elapsed through the Distribution Date. The Xxxx-Xxxxx Group shall be liable
for any Income Taxes attributable to the short Income Tax period deemed to close
on the Distribution Date, and Key3Media shall be liable for any Income Taxes
attributable to the short Income Tax period beginning on the day immediately
following the Distribution Date.
-14-
(d) Refunds from Carrybacks. Key3Media shall, if permissible under
-----------------------
applicable law, make the election under Treasury Regulations Section 1.1502-
21(b)(3)(i) or comparable provisions of state, local or foreign law to
relinquish the carryback period for any post-Distribution Date net operating
losses or other Income Tax attributes. To the extent such an election is not
permissible, the parties agree to cooperate in the filing of a refund claim and
to allocate the benefits of any such carryback on an equitable basis.
(e) Tax Returns.
-----------
(i) Xxxx-Xxxxx shall file or cause to be filed when due all
Income Tax Returns that are required to be filed by or with respect to
any member of the Key3Media Group for Pre-Distribution Periods and
shall pay all Income Taxes due with respect to such Income Tax
Returns.
(ii) With respect to the Income Tax Returns for Income Tax
periods ending in 1999, Xxxx-Xxxxx shall provide Key3Media with a
draft of the Income Tax Returns (or in the case of a consolidated,
combined or unitary Income Tax Return, a Pro-Forma Income Tax Return)
together with any relevant Income Tax Returns Supporting
Documentation, with respect to Key3Media as soon as practicable prior
to the due date for filing of Ziff Xxxxx'x 1999 consolidated federal
Income Tax Return. Xxxx-Xxxxx will consult in good faith with
Key3Media with respect to any comments and suggestions made by
Key3Media with respect to such Income Tax Returns. The parties shall
attempt to resolve in good faith any disagreement or dispute with
respect to any disputed items. The ultimate resolution of any disputed
items will be determined by Xxxx-Xxxxx in its sole and absolute
discretion.
(iii) With respect to the Income Tax Returns for Income Tax
periods ending after December 31, 1999 but before the Distribution
Date, Xxxx-Xxxxx shall provide Key3Media with a draft of a Pro-Forma
Income Tax Return and any relevant Income Tax Returns Supporting
Documentation with respect to Key3Media as soon as practicable but no
later than August 15, 2001. Xxxx-Xxxxx will consult in good faith with
Key3Media with respect to any comments and suggestions made by
Key3Media with respect to such Income Tax Returns. The parties shall
attempt to resolve in good faith any disagreement or dispute with
respect to any disputed items. The ultimate resolution of any disputed
items will be determined by Xxxx-Xxxxx in its sole and absolute
discretion.
(iv) Key3Media shall file or cause to be filed any Income Tax
Returns (other than consolidated, combined or unitary Income Tax
Returns that include Income Taxes of Key3Media and Xxxx-Xxxxx) due
that are required to be filed by or with respect to the Key3Media
Group for any Income Tax periods ending after the Distribution Date
and pay any Income Taxes due. With respect to such Income Tax Returns
for Tax periods ending in 2000 for which Xxxx-Xxxxx may be liable
under Section 6.1(a) (i.e. to which Section 6.1(c) applies), Key3Media
shall
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provide Xxxx-Xxxxx with a draft of any Income Tax Returns for such
periods at least seventy-five (75) days prior to the due date for
filing of any such Tax Returns. Key3Media will consult in good faith
with Xxxx-Xxxxx with respect to any comments and suggestions made by
Xxxx-Xxxxx with respect to such Income Tax Returns. The parties shall
attempt to resolve in good faith any disagreement or dispute with
respect to any disputed items. The ultimate resolution of any disputed
items will be determined by Key3Media in its sole and absolute
discretion.
(f) Contest Provisions.
------------------
Key3Media shall promptly notify Xxxx-Xxxxx in writing upon receipt by
Key3Media or any of its affiliates of notice of any pending or threatened audits
or assessments which may affect the Tax or Income Tax liabilities of any member
of the Key3Media Group for which Xxxx-Xxxxx would be required to indemnify
Key3Media pursuant to Section 6.1(a), provided that failure to comply with this
provision shall not affect Key3Media's right to indemnification hereunder unless
Xxxx-Xxxxx is prejudiced thereby. Xxxx-Xxxxx shall promptly notify Key3Media in
writing of any pending or threatened Income Tax or Tax audit or controversy that
could affect any member of the Key3Media Group for any Pre-Distribution Period,
provided that failure to comply with this provision shall not require Xxxx-Xxxxx
to indemnify Key3Media for the effects of such failure unless Key3Media is
prejudiced by the failure of Xxxx-Xxxxx to notify Key3Media. Xxxx-Xxxxx shall
have the sole right to represent any member of the Key3Media Group's interests
in any Income Tax or Tax audit or administrative or court proceeding relating to
taxable periods ending on or before the Distribution Date, to employ counsel of
its choice at its expense and to settle any such audit or proceeding in its sole
and absolute discretion; provided, however, that Xxxx-Xxxxx shall consult in
good faith with Key3Media with respect to any comments and suggestions made in
this regard by Key3Media.
Xxxx-Xxxxx shall be entitled to participate at its expense in the
defense of any claim for Income Taxes or Taxes for a year or period ending after
the Distribution Date which may be the subject of indemnification by Xxxx-Xxxxx
pursuant to Section 6.1(a) and, with the written consent of Key3Media, and at
its sole expense, may assume the entire defense of such Income Tax or Tax claim.
Key3Media may not agree to settle any Income Tax or Tax claim for the portion of
the year or period ending on the Distribution Date which may be the subject of
indemnification by Xxxx-Xxxxx under Section 6.1(a) without the prior written
consent of Xxxx-Xxxxx, which consent shall not be unreasonably withheld.
(g) Termination of Tax Allocation Agreements. Any tax allocation or sharing
----------------------------------------
agreement or arrangement, whether or not written, that may have been entered
into by Xxxx-Xxxxx or any member of the Xxxx-Xxxxx Group and any member of the
Key3Media Group shall be terminated as to each member of the Key3Media Group as
of the Distribution Date, and no payments which are owed by or to the Key3Media
Group pursuant thereto shall be made thereunder.
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SECTION 6.2. Transfer Taxes. Xxxx-Xxxxx shall hold Key3Media harmless,
--------------
shall indemnify Key3Media, and shall pay any and all Taxes arising with respect
to or as a result of any transfer of property (including stock) under the
Distribution Agreement or the distribution of the Key3Media stock pursuant to
the Distribution Agreement.
SECTION 6.3. Information to be Provided by Key3Media. With respect to
---------------------------------------
the taxable year of Xxxx-Xxxxx ending December 31, 1999 and the period in 2000
prior to the Distribution Date, Key3Media shall promptly prepare or cause to be
prepared and provide to Xxxx-Xxxxx a package of Income Tax information materials
(the "Tax Package"), which shall be completed in accordance with past practice
including past practice as to providing the information, schedules and work
papers and as to the method of computation of separate taxable income or other
relevant measure of income of the members of the Key3Media Group. Key3Media
shall cause the Tax Package for the taxable year of Xxxx-Xxxxx ending December
31, 1999 to be delivered no later than forty-five (45) days before the due date
for the Xxxx-Xxxxx Federal Income Tax Return required to be filed for that
period, and shall cause the Tax Package for the portion of the taxable period
ending on the Distribution Date to be delivered to Xxxx-Xxxxx within one-hundred
and fifty (150) days after the Distribution Date.
SECTION 6.4. Payments. Failure to make any payment required under this
--------
Agreement will result in the accrual of interest on such amount due. Any
interest payment required hereunder shall be calculated from the date of the
failure to make any payments required under this Agreement, at the rate used by
the Internal Revenue Service (the "IRS"), any foreign, state, or local tax
authority, as applicable, in computing the interest payable by it or to it.
Unless otherwise provided, all payments required to be made under this Agreement
from one party to another shall be made within thirty (30) days after the event
which gives rise to the requirement for payment occurs.
SECTION 6.5. Treatment of Intercompany Payments. To the extent that
----------------------------------
any payments are made between Key3Media and Xxxx-Xxxxx pursuant to this
Agreement, for purposes of Income Tax treatment, such payments to Xxxx-Xxxxx by
Key3Media shall be treated as a distribution under Section 301 of the Code by
Key3Media to Xxxx-Xxxxx at a time when the two corporations filed a consolidated
federal Income Tax return, and such payments by Xxxx-Xxxxx to Key3Media shall be
treated as a nontaxable contribution by Xxxx-Xxxxx to the capital of Key3Media
immediately prior to the Distribution Date.
SECTION 6.6. Tax Attributes. The Xxxx-Xxxxx Group shall be entitled
--------------
to the benefits of any net operating losses or other Income Tax attributes
generated by Key3Media while a member of the Xxxx-Xxxxx Group that can be
utilized by the Xxxx-Xxxxx Group in any Income Tax periods prior to and
including the Income Tax period which includes the Distribution Date. Key3Media
will not be compensated for use of any such Income Tax attributes by the
Xxxx-Xxxxx Group. To the extent such net operating losses and Income Tax
attributes are not absorbed by the Xxxx-Xxxxx Group, Key3Media shall be entitled
to carry forward to any post-Distribution Income Tax periods any net operating
loss or other Income Tax attributes generated while any of the Key3Media
Entities had been a member of the Xxxx-Xxxxx
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Group and which are properly allocated to Key3Media under Treasury Regulation
Section 1.1502-21(b) or other provisions of the Regulations or comparable state,
local or foreign law.
SECTION 6.7. Assistance and Cooperation. After the Distribution Date,
--------------------------
(a) each of Xxxx-Xxxxx and Key3Media shall:
(i) reasonably assist (and cause their respective affiliates to
reasonably assist) the other party in preparing any Tax Returns, Income Tax
Returns or reports which such other party is responsible for preparing and
filing in accordance with this Article VI;
(ii) cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding, any Tax Returns or Income Tax Returns of
any member of the Key3Media Group;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to
Taxes or Income Tax of any member of the Key3Media Group or any member of
the Key3Media Group while a direct or indirect subsidiary of Xxxx-Xxxxx;
(iv) provide timely notice to the other in writing of any pending
or threatened Tax or Income Tax audits or assessments of the Key3Media
Group or any member of the Key3Media Group while a direct or indirect
subsidiary of Xxxx-Xxxxx for taxable periods for which the other party may
have a liability under this Article VI;
(v) furnish the other with copies of all correspondence received
from any taxing authority in connection with any Tax or Income Tax audit or
information request with respect to any such taxable period; and
(b) Xxxx-Xxxxx shall prepare and deliver to Key3Media and an independent
accounting firm of national standing appointed by Key3Media that is reasonably
satisfactory to Xxxx-Xxxxx as soon as practicable but not later than August 15,
2001, a schedule of all Income Tax attributes than can be carried forward and a
calculation of all limitations on any Income Tax-related deductions or credits.
Key3Media and such accounting firm shall be entitled to review such schedule and
calculation, and shall notify Xxxx-Xxxxx of any comments or suggestions relating
thereto no later than 15 days after receipt of such schedule and calculation.
Xxxx-Xxxxx will consult in good faith with Key3Media and such accounting firm
with respect to any such comments and suggestions. Xxxx-Xxxxx will provide such
accounting firm (but not Key3Media) with all information reasonably requested by
such accounting firm in order for it to review such schedule and calculation or
perform any additional calculations that it deems necessary, at any time after
delivery of such schedule and calculation. Such accounting firm shall not
disclose any information received with respect to the Tax Returns, Income Tax
Returns or Income Tax Returns Supporting Documentation of any member of the
Xxxx-Xxxxx Group to any other person, including Key3Media; and
(c) Xxxx-Xxxxx shall promptly notify Key3Media of (i) any event that may
adversely affect any post Distribution Income Tax Return or Tax Return of the
Key3Media Group, (ii) any recalculation of Income Tax attributes or benefits for
any Pre-Distribution Period that were previously allocated to Key3Media pursuant
to Section 6.6 and carried forward to a post-distribution period, and (iii) the
intention to file any amended Income Tax Return or Tax Return for any
Pre-Distribution Period that may affect any member of the Key3Media Group, and
shall provide Key3Media with such information that is required by Key3Media to
accurately prepare all Tax Returns and Income Tax Returns (including amendments
thereto) for any post-Distribution period.
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SECTION 6.8. Survival of Obligations. The obligations of the parties
-----------------------
set forth in this Article VI shall be unconditional and absolute and shall
remain in effect without limitation as to time.
ARTICLE VII
ACCESS TO INFORMATION
SECTION 7.1. Provision of Corporate Records.
------------------------------
(a) After the date hereof, upon the prior written request by Key3Media for
specific and identified agreements, documents, books, records or files
(collectively, "Records") in the possession or control of any member of the
-------
Xxxx-Xxxxx Group which relate to Key3Media or the conduct of the Events Business
prior to the Effective Time, Xxxx-Xxxxx shall arrange, as soon as reasonably
practicable following the receipt of such request, to provide the originals of
any such Records not already in the possession or control of a member of the
Key3Media Group (or, if it would be burdensome for Xxxx-Xxxxx to provide the
originals, copies thereof).
(b) After the date hereof, upon the prior written request by Xxxx-Xxxxx for
specific and identified Records in the possession or control of any member of
the Key3Media Group which relate to the Xxxx-Xxxxx Group or the conduct of the
Xxxx-Xxxxx Business prior to the Effective Time, Key3Media shall arrange, as
soon as reasonably practicable following the receipt of such request, to provide
the originals of any such Records not already in the possession or control of a
member of the Xxxx-Xxxxx Group (or, if it would be burdensome for Key3Media to
provide the originals, copies thereof).
SECTION 7.2. Access to Information. From and after the date hereof,
---------------------
each of Xxxx-Xxxxx and Key3Media shall afford to the other and its authorized
Representatives reasonable access during normal business hours, subject to
appropriate restrictions for classified, privileged or confidential information,
to the personnel, properties, books and records of such party and its
Subsidiaries insofar as such access is reasonably required by the other party
and relates to such other party or the conduct of its business prior to the
Effective Time or is necessary to conduct such other party's business after the
Effective Time.
SECTION 7.3. Confidentiality. Neither (a) Xxxx-Xxxxx nor any of its
---------------
Subsidiaries nor (b) Key3Media nor any of its Subsidiaries shall use or permit
the use of (without the prior written consent of the other) and shall keep, and
shall cause its Representatives to keep, confidential all information concerning
the other party and its Subsidiaries in its possession, its custody or under its
control (except to the extent that (i) such information has become publicly
available through no fault of such party or (ii) such information has been later
lawfully acquired from other sources by such party or (iii) this Agreement
permits the use or disclosure of such information) to the extent such
information was acquired during the period prior to the Effective Time, and each
party shall not (without the prior written consent of the other) otherwise
release or disclose such information to any other Person, except such party's
auditors, attorneys, consultants and advisors, except to the extent (and only to
the extent) that disclosure of such information is required by Law, judicial or
administrative process or the rules of any stock
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exchange upon which such party's securities are listed if, prior to such
disclosure, such party has used commercially reasonable efforts to consult with
the other affected party or parties.
SECTION 7.4. Privileged Matters. The parties hereto recognize that
------------------
legal and other professional services that have been and will be provided prior
to the Distribution Date have been and will be rendered for the benefit of each
of the members of the Xxxx-Xxxxx Group, and the members of the Key3Media Group,
and that each of the members of the Xxxx-Xxxxx Group, and each of the members
of the Key3Media Group should be deemed to be the client for the purposes of
asserting all privileges which may be asserted under applicable Law. To allocate
the interests of each party in the information as to which any party is entitled
to assert a privilege, the parties agree as follows:
(a) Xxxx-Xxxxx shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Xxxx-Xxxxx Business, whether or not the privileged
information is in the possession of or under the control of Xxxx-Xxxxx or
Key3Media. Xxxx-Xxxxx shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
that relates solely to the subject matter of any claims listed on Schedule 5.1,
now pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Xxxx-Xxxxx, whether or not the privileged
information is in the possession of or under the control of Xxxx-Xxxxx or
Key3Media.
(b) Key3Media shall be entitled, in perpetuity, to control the assertion or
waiver of all privileges in connection with privileged information which relates
solely to the Events Business, whether or not the privileged information is in
the possession of or under the control of Xxxx-Xxxxx or Key3Media. Key3Media
shall also be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information that relates solely to the
subject matter of any claims listed on Schedule 5.2, now pending or which may be
asserted in the future, in any lawsuits or other proceedings initiated against
or by Key3Media, whether or not the privileged information is in the possession
of or under the control of Xxxx-Xxxxx or Key3Media.
(c) The parties hereto agree that they shall have a shared privilege, with
equal right to assert or waive, subject to the restrictions in this Section 7.5,
with respect to all privileges not allocated pursuant to the terms of Sections
7.5(a) and (b). All privileges relating to any claims, proceedings, litigation,
disputes, or other matters which involve Xxxx-Xxxxx and Key3Media in respect of
which such parties retain any responsibility or liability under this Agreement,
shall be subject to a shared privilege among them.
(d) No party hereto may waive any privilege which could be asserted under
any applicable Law, and in which any other party hereto has a shared privilege,
without the consent of the other party, which consent shall not be unreasonably
withheld or delayed, except to the extent reasonably required in connection with
any litigation with third parties or as provided in subsection (e) below.
Consent shall be in writing, or shall be deemed to be granted unless written
objection is made within twenty (20) days after notice upon the other party
requesting such consent.
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(e) In the event of any litigation or dispute between or among any of the
parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto, either
such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that such
waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the relevant
parties and/or their Subsidiaries, and shall not operate as a waiver of the
shared privilege with respect to third parties. To the extent practicable in the
circumstances, the party to the litigation shall seek to have such information
kept under seal or otherwise kept confidential in such litigation.
(f) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any Subsidiary thereof of any
subpoena, discovery or other request which arguably calls for the production or
disclosure of information subject to a shared privilege or as to which another
party has the sole right hereunder to assert a privilege, or if any party
obtains knowledge that any of its or any of its Subsidiaries' current or former
directors, officers, agents or employees have received any subpoena, discovery
or other requests which arguably calls for the production or disclosure of such
privileged information, such party shall promptly notify the other party of the
existence of the request and shall provide the other party a reasonable
opportunity (to the extent it is available) to review the information and to
assert any rights it or they may have under this Section 7.5 or otherwise to
prevent the production or disclosure of such privileged information.
(h) The transfer of all Records and other information pursuant to this
Agreement is made in reliance on the agreement of Xxxx-Xxxxx and Key3Media, as
set forth in Sections 7.4 and 7.5, to maintain the confidentiality of privileged
information and to assert and maintain all applicable privileges. The access to
information being granted pursuant to Sections 7.4 and 7.5 hereof, the agreement
to provide witnesses and individuals pursuant to Section 2.9, and the transfer
of privileged information between and among the parties and their respective
Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any
privilege that has been or may be asserted under this Agreement or otherwise.
SECTION 7.5. Ownership of Information. Any information owned by one party
------------------------
or any of its Subsidiaries that is provided to a requesting party pursuant to
Section 7.4 shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in this Agreement shall
be construed as granting or conferring rights of license or otherwise in any
such information.
SECTION 7.6. Retention of Records. Xxxx-Xxxxx shall deliver to
--------------------
Key3Media upon Key3Media's request all Records that are specifically identified
by Key3Media and known
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by Xxxx-Xxxxx, after reasonable inquiry, to be in its control or possession
relating to the Events Business. Except when a longer retention period is
otherwise required by Law or agreed to in writing, Xxxx-Xxxxx and Key3Media
shall retain, for a period of at least six years, all Records relating to the
Events Business existing as of the Effective Time. Notwithstanding the
foregoing, in lieu of retaining any specific Records, Xxxx-Xxxxx or Key3Media
may offer in writing to deliver such Records to the other and, if such offer is
not accepted within 90 days, the offered Records may be destroyed or otherwise
disposed of at any time. If a recipient of such offer shall request in writing
prior to the scheduled date for such destruction or disposal that any of the
Records proposed to be destroyed or disposed of be delivered to such requesting
party, the party proposing the destruction or disposal shall promptly arrange
for delivery of such of the Records as was requested (at the cost of the
requesting party).
SECTION 7.7. Limitation of Liability; Release. Effective upon the
--------------------------------
Distribution and except as otherwise specifically set forth in this Agreement,
each of Xxxx-Xxxxx and Key3Media on behalf of itself and each member of the
Xxxx-Xxxxx Group and the Key3Media Group, respectively, releases and forever
discharges the other and its Representatives and Subsidiaries, of and from all
debts, demands, actions, causes of action, suits, accounts, covenants,
contracts, agreements, damages, and any and all claims, demands and liabilities
whatsoever of every name and nature, both in law and in equity, against such
other party, its Representatives and Subsidiaries or any of its assigns, which
the releasing party has or ever had, which arise out of or relate to events,
circumstances or actions taken by such other party prior to the Distribution;
provided, however, that the foregoing general release shall not apply to this
Agreement or the transactions contemplated hereby and shall not affect either
party's right to enforce this Agreement in accordance with its terms.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Complete Agreement; Construction. This Agreement,
--------------------------------
including the Exhibits and Schedules, shall constitute the entire agreement
between the parties with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with respect to
such subject matter. In the event of any inconsistency between this Agreement
and any Schedule hereto, the Schedule shall prevail.
SECTION 8.2. Counterparts. This Agreement may be executed in one or
------------
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 8.3. Survival of Agreements. Except as otherwise contemplated
----------------------
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
SECTION 8.4. Distribution Expenses. Except for the bank commitment
---------------------
fees of $6.765 million and the $2.0625 million discount payable to the lenders
in connection with the Financings, the listing fees payable to the
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NYSE in respect of the Key3Media Common Stock, the fees and disbursements of
Xxxxx, Xxxxx and Xxxxx and as otherwise provided in this Agreement, all costs
and expenses incurred in connection with the preparation, execution, delivery,
printing and implementation of this Agreement, the Registration Statements and
the Distribution and the consummation of the transactions contemplated thereby
(collectively, the "Transaction Expenses") shall be charged to and paid by
--------------------
Xxxx-Xxxxx. The Transaction Expenses shall not include expenses incurred by
Key3Media or the Events Subsidiaries relating to the conduct of, or changes to,
their businesses. Except as otherwise set forth in this Agreement, each party
shall bear its own costs and expenses from and after the Distribution Date. Any
amount or expense to be paid or reimbursed by any party hereto to any other
party hereto shall be so paid or reimbursed promptly after the existence and
amount of such obligation is determined and written demand therefor is made.
SECTION 8.5. Notices. All notices and other communications hereunder
-------
shall be in writing, shall reference this Agreement and shall be hand delivered
or mailed by registered or certified mail (return receipt requested) or sent by
any means of electronic message transmission with delivery confirmed (by voice
or otherwise) to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and will be deemed
given on the date on which such notice is received ("Notices"):
-------
To Xxxx-Xxxxx:
Chief Executive Officer
Xxxx-Xxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Key3Media:
Chief Executive Officer
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 8.6. Waivers. The failure of any party to require strict
-------
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 8.7. Amendments. Subject to the terms of Section 8.10 hereof,
----------
this Agreement may not be modified or amended except by an agreement in writing
signed by each of the parties hereto.
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SECTION 8.8. Assignment. This Agreement shall not be assignable, in
----------
whole or in part, directly or indirectly, by any party hereto without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld and provided that the assignee shall remain liable for its
obligations hereunder, and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be void.
SECTION 8.9. Successors and Assigns. The provisions to this Agreement
----------------------
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
SECTION 8.10. Termination. This Agreement (including Article V) may
-----------
be terminated and the Distribution may be amended, modified or abandoned at any
time prior to the Distribution by and in the sole discretion of Xxxx-Xxxxx
without the approval of Key3Media. In the event of such termination, no party
shall have any liability of any kind to any other party or any other person
arising out of this Agreement. After the Distribution, this Agreement may not be
terminated except by an agreement in writing signed by the parties; provided,
--------
however, that Article V shall not be terminated or amended after the
-------
Distribution in respect of the third party beneficiaries thereto without the
consent of such persons.
SECTION 8.11. Subsidiaries. Each of the parties hereto shall cause to
------------
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any Subsidiary of such party
or by any entity that is contemplated to be a Subsidiary of such party on and
after the Distribution Date.
SECTION 8.12. Third Party Beneficiaries. Except as provided in
-------------------------
Article V relating to Indemnified Parties, this Agreement is solely for the
benefit of the parties hereto and their respective Subsidiaries and Affiliates
and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
SECTION 8.13. Title and Headings. Titles and headings to sections
------------------
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
SECTION 8.14. Exhibits and Schedules. The Exhibits and Schedules shall
----------------------
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 8.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
SECTION 8.16. Consent to Jurisdiction. Without limiting the provisions
-----------------------
of Article V hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the state courts of the State of New York, located in The
City of New York, and (b) the United States District Court for the Southern
District of Manhattan, for the purposes of any suit, action
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or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of the parties agrees to commence any action, suit or
proceeding relating hereto either in the United States District Court for the
Southern District of Manhattan or if such suit, action or other proceeding may
not be brought in such court for jurisdictional reasons, in the state courts of
the State of New York, located in the City of New York. Each of the parties
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction in this Section
8.16. Each of the parties irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (i) the state courts of the
State of New York, located in The City of New York, or (ii) the United States
District Court for the Southern District of Manhattan, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
SECTION 8.17. Severability. In the event any one or more of the
------------
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
XXXX-XXXXX INC.
By__________________________________
Name:
Title:
KEY3MEDIA GROUP, INC.
By__________________________________
Name:
Title:
EXHIBIT A
Events Subsidiaries
1. Key3Media Events, Inc.
2. Key3Media Events Pty Ltd., an Australian corporation
3. ZD Events S.A., a Mexican corporation
4. Key3Media S.A., a French corporation
EXHIBIT B
Registration Rights Agreement
EXHIBIT C
Lock-Up Agreement
SCHEDULE 5.1
Certain Third-Party Claims Arising Out of
the Xxxx-Xxxxx Business
In re Xxxx-Xxxxx Inc. Securities Litigation, U.S. District Court, Southern
District of New York; Master File Xx. 00 Xxx. 0000 (XXX)
In re Xxxx-Xxxxx Inc. Derivative Litigation, Court of Chancery of the State
of Delaware for New Castle County, Consolidated C.A. No. 16813NC
SCHEDULE 5.2
Certain Third-Party Claims Arising Out of
the Events Business
Xxxxxx X. Xxx v. GES Exposition Service, Premier Displays & Exhibits CO,
Softbank Comdex, J.R. Lighting, EZC International, Dynapac Rotating Co., Inc. -
Filed in District Court, Xxxxx County, NV
Xxxx Xxxxxxxx v. ZD Comdex & Forums - Filed in Massachusetts Commission
Against Discrimination
Xxxxx, Xxxxxx x. ZD Events Inc. - Filed at EEOC San Francisco District Office
Xxxxxxxxx Xxxxxxxxxxx v. ZD Comdex & Forums, et al
ZD Events Inc. v. GES Exposition Services, Inc. (U.S. District Court)
(Massachusetts) X.X. Xx. 00 XX 0000-XXX.
