EXHIBIT 2
to SCHEDULE 13D
Execution Copy
STOCK PURCHASE AGREEMENT
BETWEEN
KEY3MEDIA GROUP, INC.
AND
INVEMED CATALYST FUND, L.P.
------------------------------
DATED: NOVEMBER 13, 2001
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TABLE OF CONTENTS
PAGE(S)
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ARTICLE I DEFINITIONS..........................................................1
1.1 Definitions..................................................1
1.2 Other Definitions............................................4
ARTICLE II SALE AND PURCHASE...................................................4
2.1 Purchase and Sale of Series A Preferred Stock................4
2.2 Closing......................................................5
2.3 Certificates of Designations.................................5
2.4 Use of Proceeds..............................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................5
3.1 Corporate Existence and Power................................5
3.2 Authorization; No Contravention..............................6
3.3 Governmental Authorization; Third Party Consents.............6
3.4 Binding Effect...............................................6
3.5 Capitalization...............................................7
3.6 Reports; Financial Statements................................8
3.7 Litigation...................................................9
3.8 Liabilities..................................................9
3.9 No Default or Breach; Contractual Obligations................9
3.10 Employee Benefit Plans.......................................9
3.11 Title to Properties; Liens..................................10
3.12 Licenses; Permits, Etc......................................10
3.13 Intellectual Property Rights................................10
3.14 Compliance with Applicable Law..............................10
3.15 No Registration.............................................11
3.16 Absence of Certain Changes. ...............................11
3.17 Broker's, Finder's or Similar Fees..........................11
3.18 Required Stockholders Quorum and Vote.......................11
3.19 Accuracy of Information in Proxy Statement..................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................12
4.1 Organization and Qualification..............................12
4.2 Authority...................................................12
4.3 No Conflict; Required Filings and Consents..................12
4.4 Acquisition of Preferred Shares for Investment.............13
4.5 No Broker...................................................13
ARTICLE V COVENANTS ..........................................................14
5.1 Notification of Certain Matters.............................14
5.2 Access to Information.......................................14
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5.3 Additional Directors........................................14
5.4 Stockholders Approval.......................................14
5.5 NYSE Listing................................................15
ARTICLE VI CONDITIONS OF THE PURCHASER TO CLOSING.............................15
6.1 Representations and Warranties..............................15
6.2 Covenants...................................................15
6.3 Compliance with this Agreement..............................15
6.4 Officer's Certificate.......................................16
6.5 Filing of Certificate of Designations.......................16
6.6 Secretary's Certificate.....................................16
6.7 Credit Agreement............................................16
6.8 Registration Rights Agreement...............................16
6.9 Voting Agreements...........................................16
6.10 Completion of Equity Offering...............................16
6.11 Opinion of Outstide Counsel.................................16
6.12 Opinion of In-House Counsel.................................17
6.13 No Injunction...............................................17
6.14 No Change of Control........................................17
6.15 Consents and Approvals......................................17
6.16 Purchased Preferred Shares..................................17
ARTICLE VII CONDITIONS OF THE COMPANY TO CLOSING..............................17
7.1 Representations and Warranties..............................17
7.2 Covenants...................................................18
7.3 Compliance with this Agreement..............................18
7.4 Officer's Certificate.......................................18
7.5 No Injunction...............................................18
7.6 Consents and Approvals......................................18
7.7 Payment of Purchase Price...................................18
7.8 Registration Rights Agreement...............................18
7.9 Voting Agreements...........................................18
ARTICLE VIII INDEMNIFICATION..................................................18
8.1 Indemnification.............................................18
8.2 Notification................................................19
8.3 Contribution................................................20
ARTICLE IX TERMINATION OF AGREEMENT...........................................20
9.1 Termination.................................................20
9.2 Survival....................................................21
ARTICLE X MISCELLANEOUS.......................................................21
10.1 Survival of Representations and Warranties..................21
10.2 Amendments and Waivers......................................21
10.3 Notices.....................................................21
10.4 Successors and Assigns......................................22
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10.5 No Third Party Beneficiaries................................23
10.6 Counterparts................................................23
10.7 Descriptive Headings, Etc...................................23
10.8 Severability................................................23
10.9 Governing Law...............................................23
10.10 Remedies; Specific Performance..............................23
10.11 Entire Agreement............................................24
10.12 Fees........................................................24
10.13 Consent to Jurisdiction; Waiver of Jury.....................24
10.14 Further Assurances..........................................24
10.15 No Inconsistent Agreements..................................25
10.16 Construction................................................25
Schedule A Preferred Shares/ Purchase Price
Exhibit A Form of Certificate of Designations
Exhibit B Form of Registration Rights Agreement
Exhibit C-1 Form of Voting Agreement with SOFTBANK
Exhibit C-2 Form of Voting Agreement with the parties named therein
Exhibit D-1 Form of Opinion by Xxxxxxxx & Xxxxxxxx
Exhibit D-2 Form of Opinion by General Counsel of the Company
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STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT, dated November 13, 2001, by and between
Key3Media Group, Inc., a Delaware corporation (the "COMPANY") and Invemed
Catalyst Fund, L.P., a Delaware limited partnership (the "PURCHASER").
WITNESSETH THAT:
WHEREAS, the Company wishes to issue and sell to the Purchaser and the
Purchaser wishes to purchase from the Company, shares of the Company's Series A
5.5% Convertible Redeemable Preferred Stock, par value $.01 per share ("SERIES A
PREFERRED STOCK"); and
WHEREAS, the shares of Series A Preferred Stock are convertible
(subject to adjustment) into shares of common stock of the Company (the "COMMON
STOCK").
NOW, THEREFORE, in consideration of the agreements and obligations
contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
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1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated: -
"AFFILIATE" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"AMENDMENT NO.2" means Amendment No.2, dated November 9, 2001, to the
Credit Agreement entered into among the Company, Xxxxxx Xxxxxxx Senior Funding,
Inc., Xxxxxx Xxxxxxx & Co. Incorporated, The Bank of New York, UBS Warburg LLC
and the other parties named therein.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"BYLAWS" means the bylaws of the Company in effect on the Closing Date,
as the same may be amended from time to time.
"CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations of
the Series A 5.5% Convertible Preferred Stock of Key3Media Group, Inc. with
respect to the Preferred Stock adopted by the Board of Directors and duly filed
with the Secretary of State of the State of Delaware on or before the Closing
Date substantially in the form attached hereto as EXHIBIT A.
"CERTIFICATE OF INCORPORATION" means the amended and restated
certificate of incorporation of the Company in effect on the Closing Date, as
the same may be amended and/ or restated from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"COMMISSION" means the United States Securities and Exchange Commission
or any similar agency then having jurisdiction to enforce the Securities Act.
"CREDIT AGREEMENT" means the Amended and Restated Credit Agreement,
dated June 26, 2001, entered into among the Company, Xxxxxx Xxxxxxx Senior
Funding, Inc., Xxxxxx Xxxxxxx & Co. Incorporated, The Bank of New York, UBS
Warburg LLC and the other parties named therein, as amended by Amendment No.2.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"GOVERNMENTAL AUTHORITY" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"GOVERNMENTAL ORDER" means any order, writ, rule, judgment, injunction,
decree, stipulation, determination, award, citation or notice of violation
entered by or with any Governmental Authority.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or other security interest or
preferential arrangement of any kind or nature whatsoever (excluding preferred
stock and equity related preferences).
"NYSE" means the New York Stock Exchange, Inc.
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"PERSON" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
substantially in the form attached hereto as EXHIBIT B.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"SERIES B PREFERRED STOCK" means the 5.5% Series B Convertible
Redeemable Preferred Stock, par value $0.01 per share, of the Company.
"SUBSIDIARIES" means, as of the relevant date of determination, with
respect to any Person, a corporation or other Person of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "SUBSIDIARY" or to "SUBSIDIARIES" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
"TAXES" means any federal, state, provincial, county, local, foreign
and other taxes (including, without limitation, income, profits, windfall
profits, alternative, minimum, accumulated earnings, personal holding company,
capital stock, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the
Registration Rights Agreement and the Voting Agreement.
"VOTING AGREEMENTS" means (a) the Voting Agreement to be entered into
among the Company, the Purchaser and SOFTBANK Corp. substantially in the form
attached hereto as EXHIBIT C-1 and (b) the Voting Agreement to be entered into
among the Company, the Purchaser and the other parties thereto substantially in
the form attached hereto as EXHIBIT C-2.
"VOTING POWER" means, with respect to any Person, the number of votes
that such Person is entitled to cast generally to elect nominees to the Board of
Directors at a meeting of the Stockholders of the Company.
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1.2 OTHER DEFINITIONS. The meanings of the following terms can be
found in the Sections of this Agreement indicated below:
TERM SECTION
---- -------
Claim.................................... Section 3.7
Closing.................................. Section 2.1
Closing Date............................. Section 2.2
Common Stock............................. Recitals
Company.................................. Preamble
Company Material Adverse Effect.......... Section 3.1
Company SEC Reports...................... Section 3.6
Contracts................................ Section 3.9
Disclosure Letter........................ Article III
Intellectual Property Right.............. Section 3.14
Liabilities.............................. Section 3.8
Offering Memorandum...................... Article III
Orders................................... Section 3.2
Plan..................................... Section 3.11
Preferred Shares......................... Section 2.1
Proxy Statement.......................... Section 5.5
Purchase Price........................... Section 2.1
Purchaser................................ Preamble
Stockholders Approval.................... Section 3.2
Series A Preferred Stock................. Recitals
ARTICLE II
SALE AND PURCHASE
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2.1 PURCHASE AND SALE OF SERIES A PREFERRED STOCK. At the closing
of the transactions contemplated by Section 2.2 of this Agreement (the
"CLOSING"), the Company shall issue and sell to the Purchaser, and the Purchaser
shall purchase from the Company, the number of shares of Series A Preferred
Stock (the "PREFERRED SHARES") set forth opposite on SCHEDULE A hereto, for an
aggregate price in immediately available United States funds (the "PURCHASE
PRICE") set forth on SCHEDULE A hereto. At the Closing (a) the Company shall
deliver to the Purchaser a certificate or certificates representing the
Preferred Shares being purchased by the Purchaser, and (b) the Purchaser will
deliver to the Company the aggregate purchase price therefor by wire transfer of
immediately available funds. The Purchaser agrees, so long as required by law,
that the certificates representing the Preferred Shares and shares of Common
Stock issuable upon conversion of the Purchaser's Preferred Shares shall bear a
legend in substantially the following form:
"The shares represented by this certificate are "restricted securities"
as that term is defined in Rule 144 promulgated under the Securities
Act of 1933, as amended (the
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"SECURITIES ACT"), and may not be offered, sold or otherwise
transferred, pledged or hypothecated except in a transaction registered
under the Securities Act or in a transaction exempt from such
registration."
2.2 CLOSING. Unless this Agreement shall have terminated pursuant
to Article IX, and subject to the satisfaction or waiver of the conditions set
forth in Articles VI and VII, the Closing shall take place at the offices of
Xxxxxxxx & Xxxxxxxx, at 10:00 a.m., local time (or as soon thereafter as
practicable), on the next Business Day following the date upon which the
conditions set forth in Articles VI and VII (other than any such conditions that
by their nature are to be satisfied at the Closing, but subject to such
satisfaction or waiver) shall be satisfied or waived in accordance with this
Agreement, or at such other time, place and date that the Company and the
Purchaser may agree in writing. (the "CLOSING DATE").
2.3 CERTIFICATES OF DESIGNATIONS. On or prior to the Closing Date,
the Company shall duly file the Certificate of Designations with the Secretary
of State of the State of Delaware in accordance with the General Corporation Law
of the State of Delaware. The Preferred Shares shall have the preferences and
rights set forth in the Certificate of Designations.
2.4 USE OF PROCEEDS. The Company shall use the proceeds from the
sale of the Preferred Shares to the Purchaser to repay borrowings under the
Credit Agreement as required by it and/ or to fund the Company's working
capital.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Except as otherwise disclosed in the Company SEC Reports (as defined
below) or in the Offering Memorandum dated the date hereof and prepared by the
Company for the benefit of the Purchaser (the "OFFERING MEMORANDUM"), delivered
by the Company to the Purchaser prior to the execution of this Agreement the
Company represents and warrants to the Purchaser as follows:
3.1 CORPORATE EXISTENCE AND POWER. Each of the Company and its
significant subsidiaries (as defined in Rule 1-02(w) of Regulation S-X) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. Each of the Company and its
Subsidiaries (a) has all requisite power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently, or is proposed to be, engaged, and (b) is
duly qualified as a foreign corporation, licensed and in good standing under the
laws of each jurisdiction in which its ownership, lease or operation of property
or the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing could not reasonably be expected
to have a material adverse effect on the assets, business, properties, results
of operations or financial condition of the Company and its Subsidiaries taken
as a whole (a "COMPANY MATERIAL ADVERSE EFFECT").
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The Company has all necessary corporate power and authority to execute, deliver
and perform its obligations under the Transaction Documents.
3.2 AUTHORIZATION; NO CONTRAVENTION. Except for the approval of
the issuance of the Common Stock upon conversion of the Preferred Shares by the
holders of a majority of the shares of Common Stock present in person or proxy
at a stockholders meeting of the Company called for such purpose and at which a
quorum was present and acting throughout, as required by Section 312 of the NYSE
Listed Company Manual (the "STOCKHOLDERS APPROVAL"), the execution, delivery by
the Company of the Transaction Documents, the performance by the Company of its
obligations hereunder and thereunder and the consummation by the Company of the
transactions contemplated hereby and thereby, including without limitation the
issuance of the Preferred Shares to the Purchaser, (a) have been duly authorized
by all necessary corporate action of the Company, (b) do not contravene the
terms of the Certificate of Incorporation or the Bylaws (c) do not violate,
conflict with or result in any breach, default or contravention of (or with due
notice or lapse of time or both would result in any breach, default or
contravention of), or the creation of any Lien under, any contractual obligation
of the Company or its Subsidiaries or any requirements of law applicable to the
Company or its Subsidiaries other than any such matter with respect to a
contractual obligation that, individually or in the aggregate, could not
reasonably be expected to have a Company Material Adverse Effect, and (d) do not
violate any Governmental Order against, or binding upon, the Company.
3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. Except for
the Stockholders Approval and those that have been obtained or made, no material
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a requirement of law, is necessary or
required to be obtained or made by the Company in connection with the execution,
delivery or performance (including, without limitation, the sale, issuance and
delivery of the Preferred Shares) by, or enforceability against, the Company of
the Transaction Documents or the transactions contemplated hereby and thereby.
3.4 BINDING EFFECT. This Agreement has been and, as of the Closing
Date, the Registration Rights Agreement and the Voting Agreement will be duly
executed and delivered by the Company, and (assuming due authorization,
execution and delivery by the Purchaser) this Agreement constitutes, and, as of
the Closing Date, the Registration Rights Agreement and the Voting Agreements
will constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
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3.5 CAPITALIZATION.
(a) As of the date hereof the authorized capital stock of
the Company consists of (x) 200,000,000 shares of Common Stock of which (i)
68,099,575 shares are issued and outstanding, (ii) 24,743,901 shares are
reserved for issuance upon exercise of stock options granted to directors,
officers and other employees of, and consultants to the Company pursuant to
equity incentive plans approved by the Board of Directors, and (iii) 6,277,000
shares are reserved for issuance upon exercise of warrants held by Princess Gate
Investors III, L.P., certain affiliates of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. and
certain Persons whose investment manager is PG Investors III, Inc.; (y)
200,000,000 shares of non-voting common stock, par value $0.01 per share (the
"Non-Voting Common Stock"), of the Company, none of which is outstanding; and
(z) 200,000,000 shares of preferred stock, none of which is outstanding.
(b) On the Closing Date, after giving effect to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company shall consist of (x) 200,000,000 shares of Common Stock of which (i)
68,099,575 shares shall be issued and outstanding (but excluding from the
outstanding amounts any shares of Common Stock issued upon exercise of options
and warrants outstanding as of the date of this Agreement), (ii) 24,743,901
shares shall be reserved for issuance upon exercise of stock options granted to
directors, officers and other employees of, and consultants to the Company
pursuant to equity incentive plans approved by the Board of Directors, (iii)
6,277,000 shares shall be reserved for issuance upon exercise of warrants held
by Princess Gate Investors III, L.P., certain affiliates of Xxxxxx Xxxxxxx Xxxx
Xxxxxx & Co. and certain Persons whose investment manager is PG Investors III,
Inc., (iv) 1,000,000 shares shall be reserved for issuance upon conversion of
the Series A Preferred Stock, and (v) the number of shares to be issued upon
conversion of the Series B Preferred Stock or any other class of parity
preferred stock sold in the equity offering of the Company referred to in
Section 6.10 shall be reserved for issuance upon such conversion; (y)
200,000,000 shares of Non-Voting Common Stock, none of which is outstanding; and
(z) 200,000,000 shares of preferred stock of which (i) 1,000,000 shares shall be
designated as Series A Preferred Stock, all of which shall be issued and
outstanding, and (ii) the number of shares of Series B Preferred Stock or any
other class of parity preferred stock sold in the equity offering referred to in
Section 6.10 hereof shall be designated as shares of Series B Preferred Stock or
of the appropriate class of preferred stock and shall be issued and outstanding.
(c) The Preferred Shares have been duly authorized by all
necessary corporate action, and when issued and sold to the Purchaser after
payment therefor as provided for herein, will (i) be validly issued, fully paid
and non-assessable, (ii) be issued in compliance with the registration and
qualification requirements of all applicable federal, state and foreign
securities laws, (iii) not be subject to any preemptive rights or similar rights
that have not been satisfied and (iv) be free and clear of all other Liens. The
shares of Common Stock issuable upon conversion of the Preferred Shares have
been duly authorized by all necessary corporate actions, reserved for issuance
and, when issued in compliance with the provisions of the Certificate of
Designations, will (i) be validly issued, fully paid and non-assessable, (ii) be
issued in compliance with the
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registration and qualification requirements of all applicable federal, state and
foreign securities laws and (iii) not subject to any preemptive rights or
similar rights that have not been satisfied and (iv) be free and clear of all
other Liens. All outstanding shares of the Company's capital stock are (and upon
consummation of the Closing contemplated hereby) will be been duly authorized,
validly issued, fully paid and non-assessable, were issued in compliance with
the registration and qualification requirements of all applicable federal, state
and foreign securities laws and none of the shares of capital stock of the
Company will have been issued in violation of any preemptive rights.
(d) Except as described above, there are no (and upon
consummation of the Closing as contemplated hereby there will not be any)
options, warrants, subscriptions, calls, convertible securities or other rights
or arrangements obligating the Company to sell any shares of capital stock of,
or any other equity interest in, the Company. There are no (and upon
consummation of the Closing as contemplated thereby, there will not be any)
outstanding contractual obligations to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company.
3.6 REPORTS; FINANCIAL STATEMENTS.
(a) As of the respective dates of their filing with the
Commission, all reports, registration statements and other filings, together
with any amendments thereto, filed by the Company with the Commission since
August 10, 2000 (the "COMPANY SEC REPORTS"), complied, and all such reports,
registration statements and other filings to be filed by the Company with the
Commission prior to the Closing Date will comply, in all material respects with
the applicable requirements of the Securities Act, the Exchange Act, and the
rules and regulations of the Commission promulgated thereunder. The Company SEC
reports did not at the time they were filed with the Commission, or will not at
the time they are filed with the Commission, and the Offering Memorandum does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(b) The consolidated financial statements (including, in
each case, any related schedules or notes thereto) contained in or incorporated
by reference in the Company SEC Reports, the Offering Memorandum and any such
reports, registration statements and other filings to be filed by the Company
with the Commission prior to the Closing Date (i) have been or will be prepared
in accordance with the published rules and regulations of the Commission and
generally accepted accounting principles consistently applied during the periods
involved (except as may be indicated in the notes thereto) and (ii) fairly
present or will fairly present in all material respects the consolidated
financial position of the Company and its subsidiaries as of the respective
dates thereof and the consolidated results of operations, statements of
stockholders' equity and cash flows for the periods indicated, except that any
unaudited interim financial statements were or will be subject to normal and
recurring year-end adjustments and may omit footnote disclosure as permitted by
regulations of the Commission.
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3.7 LITIGATION. There are no losses actions, suits, proceedings,
claims, complaints, disputes, arbitrations or investigations (collectively,
"CLAIMS") pending or, to the knowledge of the Company, threatened, at law, in
equity, in arbitration or before any Governmental Authority against the Company
or its Subsidiaries that could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. No Governmental Order has
been issued by any court or other Governmental Authority against the Company
purporting to enjoin or restrain the execution, delivery or performance by it of
the Transaction Documents.
3.8 LIABILITIES. The Company and its Subsidiaries have no direct
or indirect liabilities or obligations of any nature, including any liability
for Taxes, whether absolute, accrued, contingent or otherwise ("LIABILITIES"),
which are not fully reflected or reserved against in the consolidated financial
statements contained in or incorporated by reference in the Company SEC Reports
and the Offering Memorandum, except for liabilities that, individually or in the
aggregate, could not reasonably be expected to have a Company Material Adverse
Effect.
3.9 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS. All of the
Company's material contracts, agreements, understandings and arrangements,
whether written or oral (collectively, the "CONTRACTS") are adequately described
in the Company SEC Reports and the Offering Memorandum. Except as described in
the Company SEC Reports and the Offering Memorandum, all such Contracts are
valid, subsisting, in full force and effect and binding upon the Company and the
other parties thereto, and the Company has paid in full or accrued all amounts
due thereunder and has satisfied in full or provided for all of its Liabilities
and obligations thereunder, except, in each case, as could not be reasonably
expected to have a Company Material Adverse Effect. To the knowledge of the
Company, no other party to any such Contract is in default thereunder, nor does
any condition exist that with notice or lapse of time or both would constitute a
default by such other party thereunder, except as could not be reasonably
expected to have a Company Material Adverse Effect.
3.10 EMPLOYEE BENEFIT PLANS.
(a) The Company SEC Reports and the Offering Memorandum
describes all material employee benefit plans (including any "multiple employer
plan" within the meaning of the Code or ERISA), arrangements, policies,
programs, agreements or commitments maintained by the Company (collectively, the
"PLANS"). Except as could not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, each Plan (and related trust,
insurance contract or fund) has been established and administered in accordance
with its terms, and complies in form and in operation with the applicable
requirements of ERISA and the Code and other applicable law and regulation.
(b) Except as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, no claim
with respect to the administration or the investment of the assets of any Plan
(other than routine claims for benefits) is pending and all contributions
(including all employer
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contributions and employee salary reduction contributions) which are due have
been paid to each Plan.
(c) Except as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, each Plan
that is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified during the period since its adoption; each
trust created under any such Plan is exempt from tax under Section 501(a) of the
Code and has been so exempt since its creation.
(d) Except as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, there are
no unfunded obligations under any Plan which are not fully reflected on the
Financial Statements.
3.11 TITLE TO PROPERTIES; LIENS. Except as could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, the Company and its Subsidiaries have good and marketable title to all
real properties (if any) and all other properties and assets owned by them, in
each case free from Liens, that would affect the value thereof or interfere with
the use made or to be made thereof by them, and the Company and its Subsidiaries
hold any leased real or personal property under valid and enforceable leases
with no exceptions that would interfere with the use made or to be made thereof
by them.
3.12 LICENSES; PERMITS, ETC. Except as could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, the Company and its Subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit.
3.13 INTELLECTUAL PROPERTY RIGHTS. Except for any such matters
which, individually or in the aggregate, could not reasonably be expected to
have a Company Material Adverse Effect, the Company and its Subsidiaries own or
possess, or believe that they can acquire or license on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names, or other intellectual property (collectively, "INTELLECTUAL
PROPERTY RIGHTS") necessary to carry on the business now operated by the Company
and its Subsidiaries, and neither the Company nor any of its Subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property Rights
or of any facts or circumstances which would render any Intellectual Property
Rights invalid or inadequate to protect the interest of the Company and its
Subsidiaries therein.
3.14 COMPLIANCE WITH APPLICABLE LAW. The business of the Company
and its Subsidiaries are in compliance in all material respects with all
applicable federal,
10
state, NYSE, local and foreign governments' laws and regulations (including all
applicable environmental laws and regulations), except where any failures to be
so in compliance, either individually or in the aggregate, could not reasonably
be expected to have a Company Material Adverse Effect.
3.15 NO REGISTRATION. Assuming the representations and warranties
of the Purchaser set forth in Article IV hereof are true and correct in all
respects, the subscription and sale of the Preferred Shares (and the Common
Stock issuable upon conversion of the Preferred Shares) pursuant to this
Agreement will be exempt from the registration requirements of the Securities
Act. The Company has not made and will not prior to the Closing Date make,
directly or indirectly, any offer or sale of the Preferred Shares or of
securities of the same or similar class as the Preferred Shares if, as a result,
the offer and sale contemplated hereby would fail to be entitled to exemption
from the registration requirements of the Securities Act. As used herein, the
terms "offer" and "sale" have the meanings specified in Section 2(3) of the
Securities Act.
3.16 ABSENCE OF CERTAIN CHANGES. Since January 1, 2001, the Company
and its Subsidiaries have conducted their respective businesses in the ordinary
and usual course and, since such date, there has not been any condition, event
or occurrence which had or could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
3.17 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with the Company or any action taken by any such
Person.
3.18 REQUIRED STOCKHOLDERS QUORUM AND VOTE.
(a) The holders of a majority of the issued and
outstanding shares of Common Stock as of the record date set forth in the Proxy
Statement, present in person or represented by proxy and entitled to vote, will
constitute a quorum (a "QUORUM") for the transaction of business at the meeting
called to obtain the Stockholders Approval. Abstentions and broker non-votes
will be included in determining if a quorum is present at such meeting. The
stockholders of the Company that are party to the Voting Agreement constitute a
majority of the Company's outstanding Voting Power.
(b) The affirmative vote of a majority of the Quorum is
required to obtain the Stockholders Approval. Only votes cast "for" a matter
shall constitute affirmative votes. Votes "withheld" or abstentions from voting
shall have the same effect as vote or votes "against" that matter.
3.19 ACCURACY OF INFORMATION IN PROXY STATEMENT. The Proxy
Statement prepared in connection with the Stockholders Approval, on the date
filed with the Commission, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the
11
statements therein, in light of the circumstances under which they are made, not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Company that:
4.1 ORGANIZATION AND QUALIFICATION. The Purchaser is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all the requisite power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted and the Purchaser is duly qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification and
being in good standing necessary, other than where the failure to be so
qualified and in good standing would not have a material adverse effect on the
Purchaser and its subsidiaries taken as a whole, their business, financial
condition or results of operations.
4.2 AUTHORITY. The Purchaser has all requisite partnership power
and authority to execute and deliver the Transaction Documents, to perform its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby to be consummated by the Purchaser. The execution, delivery
and performance of the Transaction Documents by the Purchaser and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by all necessary limited partnership,
corporate, limited liability company or trust, as the case may be, action and no
other limited partnership proceedings on the part of the Purchaser are necessary
to authorize the Transaction Documents or to consummate the transactions
contemplated hereby. The Transaction Documents have been duly executed and
delivered by the Purchaser and (assuming the due authorization, execution and
delivery hereof by the Company), constitute the legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether considered
in a proceeding at law or in equity).
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of the Transaction
Documents by the Purchaser does not, and the performance by the Purchaser of its
obligations hereunder and thereunder and the consummation by the Purchaser of
the transactions contemplated hereby and thereby will not, (i) conflict with,
breach or violate the terms of the Purchaser's organizational documents, (ii)
conflict with or violate any laws in effect as of the date of this Agreement
applicable to the Purchaser or any of its subsidiaries or by which any of their
respective properties or assets is bound or (iii) result in any breach
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of, constitute a default (or an event that with notice or lapse of time or both
would become a default) under, give to any other entity any right of
termination, amendment, acceleration or cancellation of, require payment under,
or result in the creation of a lien or encumbrance on any of the properties or
assets of the Purchaser pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which the Purchaser is a party or by which the Purchaser or any of
its respective properties or assets is bound.
(b) No material approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any Governmental
Authority or any other Person, and no lapse of a waiting period under a
requirement of law, is necessary or required to be obtained or made in
connection with the execution, delivery or performance by, or enforceability
against, the Purchaser of the Transaction Documents or the transactions
contemplated hereby and thereby.
4.4 ACQUISITION OF PREFERRED SHARES FOR INVESTMENT. The Purchaser
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its purchase of the Preferred
Shares hereunder. The Purchaser is an "accredited investor" within the meaning
of Rule 501 promulgated under the Securities Act. The Purchaser is acquiring the
Preferred Shares for investment and not with a view toward or for sale in
connection with any distribution thereof in violation of any federal or state
securities or "blue sky" laws, or with the present intention of distributing or
selling such Preferred Shares in violation of any federal or state securities or
"blue sky" law. The Purchaser understands and agrees that the Preferred Shares
may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act or pursuant
to an exemption therefrom PROVIDED THAT, if the Purchaser relies on an exemption
from the Securities Act other than the exemptions provided by Rule 144 and Rule
144A, the Purchaser shall deliver a customary opinion of counsel reasonably
satisfactory to the Company, to the effect that such transfer is in compliance
with the Securities Act. The Purchaser understands and agrees that the Preferred
Shares may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without compliance with state, local and foreign
securities laws (in each case to the extent applicable). The Purchaser
understands and agrees that the Preferred Shares are "restricted securities"
within the meaning of Rule 144 promulgated under the Securities Act and that,
except as set forth in the Registration Rights Agreement, the Company has no
obligation or intention to register any of the Preferred Shares.
4.5 NO BROKER. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission from the Company in
connection with the purchase of Preferred Shares by the Purchaser provided for
in this Agreement based upon arrangements made by or on behalf of the Purchaser.
13
ARTICLE V
COVENANTS
---------
The Company hereby, covenants and agrees with the Purchaser as follows:
5.1 NOTIFICATION OF CERTAIN MATTERS. The Company shall promptly
provide the Purchaser with copies of all filings made by the Company with the
Commission, any other governmental authority or stock exchange in connection
with the Transaction Documents and the transactions contemplated hereby.
5.2 ACCESS TO INFORMATION. Subject to any applicable
confidentiality restrictions, between the date hereof and the Closing Date, the
Company will give the Purchaser and its authorized representatives reasonable
access to all senior employees, offices, warehouses and other facilities and to
all books and records of the Company and its subsidiaries, will permit the
Purchaser and its authorized representatives to make such inspections as the
Purchaser may reasonably request and will cause the Company's and its
subsidiaries' officers to furnish the Purchaser or its representatives with such
financial and operating data and other information with respect to the business
and properties of the Company and its subsidiaries as the Purchaser may from
time to time reasonably request, provided that the Purchaser or any of its
authorized representatives (as applicable) agrees to keep confidential the
Company's non-public information it receives hereunder.
5.3 ADDITIONAL DIRECTORS. If any class of equity holders other
then the Common Stock is entitled to vote as a separate class of stockholders to
elect one or more members of the Board of Directors, the Company shall use
commercially reasonable efforts to cause the Board of Directors, as promptly as
practicable, to increase the size of the Board of Directors, elect to the Board
of Directors or, if any such election requires a vote of the stockholders of the
Company, nominate, recommend and solicit proxies for election to the Board of
Directors one or more Persons designated by the Purchaser voting as a separate
class, such that the aggregate number of directors of the Company designated by
the Purchaser shall be the number of directors of the Company elected by the
class of equity holders referred to above times the ratio of the aggregate
Voting Power held by the Purchaser over the aggregate Voting Power held by such
class of equity holders, rounded up to the next unit. The Company will reimburse
such director(s) for his or her reasonable travel and accommodation costs
incurred in connection with attending meetings of the Board of Directors.
5.4 STOCKHOLDERS APPROVAL.
(a) The Company shall take all action required by the
NYSE's rules and regulations to obtain the Stockholders Approval. Subject to its
fiduciary duties under applicable law, the Board of Directors shall recommend
that the Company's stockholders approve the issuance of Common Stock upon
conversion of the Preferred Shares.
14
(b) Promptly following the date hereof, the Company will
prepare and file with the Commission a proxy statement or information statement
to be distributed to the Company's stockholders in connection with the issuance
and sale of the Preferred Shares hereunder, including any amendments or
supplements thereto (the "PROXY STATEMENT"). The Company will use all reasonable
best efforts to have or cause the Proxy Statement to be declared effective as
promptly as practicable. The Company agrees to provide the Purchaser and their
respective counsel with any written comments the Company or its counsel may
receive from the Commission with respect to the Proxy Statement promptly after
the receipt of such comments. The form and substance of the Proxy Statement
shall be determined by the Company, in its reasonable discretion. The Company
will use all reasonable best efforts to cause the Proxy Statement (i) not to
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading
and (ii) to comply as to form in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations thereunder.
5.5 NYSE LISTING. As promptly as practicable following the date
hereof, the Company will apply to the NYSE to list the shares of Common Stock
into which the Preferred Shares may be converted, and the Company will use its
best efforts to cause such shares to be listed on the NYSE as promptly
thereafter as practicable.
ARTICLE VI
CONDITIONS OF THE PURCHASER TO CLOSING
--------------------------------------
The obligation of the Purchaser to purchase the Preferred Shares, to
pay the purchase price therefor at the Closing and to perform any obligations
hereunder shall be subject to the satisfaction as determined by, or waiver by,
the Purchaser of the following conditions on or before the Closing Date.
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects (except for any such representations and warranties
which are qualified by their terms by a reference to materiality or material
adverse effect, which representation as so qualified shall be true and correct
in all respects) at and on the Closing Date as if made at and on such date.
6.2 COVENANTS. The Company shall have performed in all material
respects all obligations and complied with all agreements, undertakings,
covenants and conditions required by it to be performed at or prior to the
Closing.
6.3 COMPLIANCE WITH THIS AGREEMENT. The Company shall have
performed and complied in all material respects with all of its agreements set
forth herein that are required to be performed by the Company on or before the
Closing Date.
15
6.4 OFFICER'S CERTIFICATE. The Purchaser shall have received a
certificate from the Company, in form and substance satisfactory to it, dated
the Closing Date, and signed by an executive officer of the Company, certifying
as to the matters set forth in Sections 6.1, 6.2 and 6.3.
6.5 FILING OF CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been duly filed by the Company with the Secretary of
State of the State of Delaware in accordance with the General Corporation Law of
the State of Delaware, and the Purchaser shall have received satisfactory
evidence of such filing.
6.6 SECRETARY'S CERTIFICATE. The Purchaser shall have received a
certificate from the Company, in form and substance satisfactory to it, dated
the Closing Date and signed by the Secretary or an Assistant Secretary of the
Company, certifying (a) that the Company is in good standing with the Secretary
of State of the State of Delaware, (b) that the attached copies of the
Certificate of Incorporation, the Bylaws, and resolutions of the Board of
Directors of the Company approving the Transaction Documents and the
transactions contemplated hereby and thereby, are all true, complete and correct
and remain unamended and in full force and effect and (c) as to the incumbency
and specimen signature of each officer of the Company executing the Transaction
Documents and any other document delivered in connection herewith on behalf of
the Company.
6.7 CREDIT AGREEMENT. Amendment No.2 shall be in full force and
effect, all the conditions precedent to the effectiveness of Amendment No.2 set
forth in Section 2 of Amendment No.2 shall have been satisfied or waived (except
Section 2(d) which shall be satisfied with the consummation of the transactions
contemplated by this Agreement) and there shall have been no further amendment
to the Credit Agreement.
6.8 REGISTRATION RIGHTS AGREEMENT. The Company shall have duly
executed and delivered the Registration Rights Agreement.
6.9 VOTING AGREEMENTS. The Company shall have duly executed and
delivered, and shall have caused SOFTBANK Corp. and the parties thereto other
than the Purchaser to duly execute and deliver, each of the Voting Agreements.
6.10 COMPLETION OF EQUITY OFFERING. The Company shall have sold
shares of the Series B Preferred Stock or shares of another parity preferred
stock, the terms of which (including without limitation, each of the dividend
rate, liquidation preference, conversion price, anti-dilution adjustments,
voting rights and Board of Directors representation of such class of capital
stock) are, in the reasonable judgment of the Purchaser, no more favorable to
the holders thereof than the terms of the Preferred Shares are to the Purchaser,
for gross proceeds (before deducting underwriting discounts and other expenses)
of at least $25 million.
6.11 OPINION OF OUTSTIDE COUNSEL. The Purchaser shall have received
an opinion of Xxxxxxxx & Xxxxxxxx, dated the Closing Date, relating to the
transactions
16
contemplated by or referred to herein, substantially in the form attached hereto
as EXHIBIT D-1.
6.12 OPINION OF IN-HOUSE COUNSEL. The Purchaser shall have received
an opinion of the General Counsel of the Company, dated the Closing Date,
relating to the transactions contemplated by or referred to herein,
substantially in the form attached hereto as EXHIBIT D-2.
6.13 NO INJUNCTION. No law or Governmental Order (whether
temporary, preliminary or permanent) shall be in effect that restrains, enjoins
or otherwise prohibits consummation of the transactions contemplated in the
Transaction Documents or that, individually or in the aggregate with all other
such laws or Governmental Order, could reasonably be expected to result in a
Company Material Adverse Effect and no Governmental Authority or other person
shall have instituted any proceeding seeking any such law or Governmental Order.
6.14 NO CHANGE OF CONTROL. There shall not have occurred, on or
prior to such Closing, a Sale Transaction (as defined in the Certificate of
Designations).
6.15 CONSENTS AND APPROVALS. All consents, approvals, exemptions,
authorizations, or other actions by, or notice to, or filings with, Governmental
Authorities and other Persons which are necessary or required in connection with
the execution, delivery or performance by, or enforceability against, the
Company of the Transaction Documents shall have been obtained and be in full
force and effect, and the Purchaser shall have been furnished with appropriate
evidence thereof and all applicable waiting periods shall have expired without
any action being taken or threatened which would have a Company Material Adverse
Effect.
6.16 PURCHASED PREFERRED SHARES. The Company shall be prepared to
deliver to the Purchaser certificates in definitive form representing the number
of Preferred Shares set forth on SCHEDULE A hereto, registered in the name of
the Purchaser.
ARTICLE VII
CONDITIONS OF THE COMPANY TO CLOSING
------------------------------------
The obligation of the Company to issue and sell the Preferred Shares
and the obligation of the Company to perform its other obligations hereunder
shall be subject to the satisfaction as determined by, or waiver by, the Company
of the following conditions on or before the Closing Date:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct in all material respects (except for any such representations and
warranties which are qualified by their terms by a reference to materiality or
material adverse effect, which representation as so qualified shall be true and
correct in all respects) at and on the Closing Date as if made at and on such
date.
17
7.2 COVENANTS. The Purchaser shall have performed in all material
respects all obligations and complied with all agreements, undertakings,
covenants and conditions required by it to be performed at or prior to the
Closing.
7.3 COMPLIANCE WITH THIS AGREEMENT. The Purchaser shall have
performed and complied in all material respects with all of its agreements set
forth herein that are required to be performed by the Purchaser on or before the
Closing Date.
7.4 OFFICER'S CERTIFICATE. The Company shall have received from
the Purchaser, a certificate, signed by the Purchaser to the effect that the
conditions set forth in the foregoing Sections 7.1, 7.2 and 7.3 have been
satisfied with respect to the Purchaser.
7.5 NO INJUNCTION. No law or Governmental Order (whether
temporary, preliminary or permanent) shall be in effect that restrains, enjoins
or otherwise prohibits consummation of the transactions contemplated in the
Transaction Documents or that, individually or in the aggregate with all other
such laws or Governmental Order, could reasonably be expected to result in a
Company Material Adverse Effect and no Governmental Authority or other person
shall have instituted any proceeding seeking any such law or Governmental
Orders.
7.6 CONSENTS AND APPROVALS. All consents, approvals, exemptions,
authorizations, or other actions by, or notice to, or filings with, Governmental
Authorities and other Persons and all corporate actions which are necessary or
required in connection with the execution, delivery or performance by, or
enforceability against, the Purchaser of the Transaction Documents shall have
been obtained and be in full force and effect, and the Company shall have been
furnished with appropriate evidence thereof and all applicable waiting periods
shall have expired without any action being taken or threatened which would have
a Company Material Adverse Effect.
7.7 PAYMENT OF PURCHASE PRICE. The Purchaser shall be prepared to
pay the aggregate purchase price for the Preferred Shares to be purchased by the
Purchaser.
7.8 REGISTRATION RIGHTS AGREEMENT. The Purchaser shall have duly
executed and delivered the Registration Rights Agreement.
7.9 VOTING AGREEMENTS. The Purchaser shall have duly executed and
delivered the Voting Agreements.
ARTICLE VIII
INDEMNIFICATION
---------------
8.1 INDEMNIFICATION. Except as otherwise provided in this Article
VIII, the Company (the "INDEMNIFYING PARTY") agrees to indemnify, defend and
hold harmless the Purchaser and its affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (each, an "INDEMNIFIED PARTY") to
18
the fullest extent permitted by law from and against any and all losses,
damages, expenses (including reasonable fees, disbursements and other charges of
counsel incurred by the Indemnified Party in any action between the Indemnifying
Party and the Indemnified Party or between the Indemnified Party and any third
party or otherwise) or other liabilities (collectively, "LOSSES") resulting from
or arising out of any breach of any representation or warranty, covenant or
agreement by the Company in the Transaction Documents, including as a result of
any Claim by the Indemnified Party or a third party with respect to any such
breach. For purposes of the foregoing, any diminution in value of the Preferred
Shares or the Common Stock issuable upon conversion of the Preferred Shares,
shall be deemed a Loss.
8.2 NOTIFICATION. Each Indemnified Party under this Article VIII
shall, promptly after the receipt of notice of the commencement of any Claim by
a third party against such Indemnified Party in respect of which indemnity may
be sought from the Indemnifying Party under this Article VIII, notify the
Indemnifying Party in writing of the commencement thereof. The omission of any
Indemnified Party to so notify the Indemnifying Party of any such action shall
not relieve the Indemnifying Party from any liability which it may have to such
Indemnified Party (a) other than pursuant to this Article VIII or (b) under this
Article VIII unless, and only to the extent that, such omission results in the
Indemnifying Party's forfeiture of substantive rights or defenses. In case any
such Claim shall be brought against any Indemnified Party, and it shall notify
the Indemnifying Party of the commencement thereof, the Indemnifying Party shall
be entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment (Xxxxxxxx &
Xxxxxxxx and Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx being deemed satisfactory
to the parties hereof); PROVIDED, HOWEVER, that any Indemnified Party may, at
its own expense, retain separate counsel to participate in such defense at its
own expense. Notwithstanding the foregoing, in any Claim in which both the
Indemnifying Party, on the one hand, and an Indemnified Party, on the other
hand, are, or are reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel and to control its own defense
of such Claim if, in the reasonable opinion of counsel to such Indemnified
Party, either (x) one or more defenses are available to the Indemnified Party
that are not available to the Indemnifying Party or (y) a conflict or potential
conflict exists between the Indemnifying Party, on the one hand, and such
Indemnified Party, on the other hand, that would make such separate
representation advisable; provided, however, that the Indemnifying Party shall
not be liable for the fees and expenses of more than one counsel to all
Indemnified Parties. The Indemnifying Party agrees that it will not, without the
prior written consent of the Purchaser, settle, compromise or consent to the
entry of any judgment in any pending or threatened Claim relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising or that may arise out of such Claim. The
Indemnifying Party shall not be liable for any settlement of any Claim effected
against an Indemnified Party without its written consent. The rights accorded to
an Indemnified Party hereunder shall be in addition to any rights that any
Indemnified Party may have at common law, by separate agreement or otherwise;
provided, however, that notwithstanding the foregoing or anything to the
contrary contained in this
19
Agreement, nothing in this Article VIII shall restrict or limit any rights that
any Indemnified Party may have to seek equitable relief.
8.3 CONTRIBUTION. If the indemnification provided for in this
Article VIII from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Losses referred to herein (other than by reason of a
breach of, or default under, the provisions of Section 8.2 hereof by such
Indemnified Party), then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative faults of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Losses referred
to above shall be deemed to include, subject to the limitations set forth in
Sections 8.1 and 8.2, any legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
ARTICLE IX
TERMINATION OF AGREEMENT
------------------------
9.1 TERMINATION. This Agreement may be terminated prior to the
Closing as follows:
(a) at any time on or prior to the Closing Date, by
mutual written consent of the Company and the Purchaser;
(b) at the election of the Company or the Purchaser, by
written notice to the other parties hereto after 5:00 p.m., New York time, on
December 31, 2001 if the Closing shall not have occurred, unless such date is
extended by the mutual written consent of the Company and the Purchaser;
PROVIDED, HOWEVER, that the right to terminate this Agreement under this Section
9.1(b) shall not be available (i) to any party whose breach of any
representation, warranty, covenant or agreement under this Agreement has been
the proximate cause of the failure of the Closing to occur on or before such
date or (ii) if the Closing has not occurred solely because any party hereto has
not yet obtained a necessary approval from any Governmental Authority;
(c) at the election of the Company, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of any of the Purchaser contained in this Agreement, which breach has not
been cured within fifteen (15) Business Days of notice to the Purchaser of such
breach; or
20
(d) at the election of the Purchaser, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of the Company contained in this Agreement, which breach has not been cured
within fifteen (15) Business Days notice to the Company of such breach.
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 9.2.
9.2 SURVIVAL. Notwithstanding Section 9.1, if this Agreement is
terminated and the transactions contemplated hereby are not consummated as
described above, this Agreement shall become void and of no further force and
effect, except for the provisions of Article I and this Section 9.2; PROVIDED,
however, that (a) none of the parties hereto shall have any liability in respect
of a termination of this Agreement pursuant to Section 9.1(a) or Section 9.1(b)
and (b) nothing shall relieve any of the parties from liability for actual
damages resulting from a termination of this Agreement pursuant to Section
9.1(c) or 9.1(d); and PROVIDED, FURTHER, that none of the parties hereto shall
have any liability for speculative, indirect, unforeseeable or consequential
damages or lost profits resulting from any legal action relating to any
termination of this Agreement.
ARTICLE X
MISCELLANEOUS
-------------
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations, warranties and indemnities made herein shall survive the
execution and delivery of this Agreement until the date that is ninety (90) days
after the receipt by the Purchaser of audited financial statements of the
Company for the fiscal year ending December 31, 2002 (or, if such fiscal year
changes and no such audited consolidated financial statements are available,
then the successor fiscal year), except to the extent any Claim under Section
Article VIII is pending, in which case the representations, warranties and
indemnities related to such Claim shall survive until such Claim is resolved in
accordance with Article VIII.
10.2 AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Purchaser.
10.3 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
21
If to the Company, to:
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
With a copy to:
Xxxxxxxx and Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
If to the Purchaser, to:
Invemed Catalyst Fund, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxxxxx Present
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: 000-000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
10.4 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns of each party; PROVIDED HOWEVER that neither the Company,
on the one hand, nor the Purchaser on behalf of the Purchaser, on the other
hand, shall assign or delegate any of the rights or obligations created under
this Agreement without the prior written consent of the other party; PROVIDED
FURTHER THAT, the Purchaser may assign any of its rights under this Agreement,
but not any of its obligations hereunder, to any Affiliate of the Purchaser
without the Company's consent.
22
10.5 NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns, and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever or by reason of this Agreement.
10.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
10.7 DESCRIPTIVE HEADINGS, ETC. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
10.8 SEVERABILITY. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
10.9 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of law principles thereof).
10.10 REMEDIES; SPECIFIC PERFORMANCE. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a
23
party hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
10.11 ENTIRE AGREEMENT. The Transaction Documents are intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants or undertakings
relating to such subject matter, other than those set forth or referred to
herein or in the other Transaction Documents. The Transaction Documents
supersede all prior agreements and understandings between the parties to this
Agreement with respect to such subject matter.
10.12 FEES. Upon the Closing, the Company shall reimburse the
Purchaser for all of its reasonable fees, disbursements and other charges of
counsel reasonably incurred in connection with the transactions contemplated by
this Agreement up to an aggregate amount of $50,000 if the Closing takes place.
10.13 CONSENT TO JURISDICTION; WAIVER OF JURY. Each party to this
Agreement hereby irrevocably and unconditionally agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the address set forth or provided for in
Section 10.3 of this Agreement, such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. Each of the parties hereby irrevocably waives
trial by jury in any action, suit or proceeding, whether at law or equity,
brought by any of them in connection with this Agreement or the transactions
contemplated hereby.
10.14 FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
24
10.15 NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement which is inconsistent with the rights granted to the
Purchaser in this Agreement.
10.16 CONSTRUCTION. The parties acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement with its, his or her legal counsel and that
this Agreement shall be construed as if jointly drafted by the Company and the
Purchaser.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
25
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement as of the date first above written.
KEY3MEDIA GROUP, INC.
By: /s/ Xxx X. Xxxxxxxxx
---------------------------------------
Name:
Title:
INVEMED CATALYST FUND, L.P.
By: Invemed Catalyst GenPar, LLC,
its general partner
By: Gladwyne Catalyst GenPar, LLC,
its managing member
/s/ Xxxxxxx Present
---------------------------------------
Name: Xxxxxxx Present
Title: Member
26
SCHEDULE A
----------
NAME NUMBER OF PREFERRED SHARES PURCHASE PRICE
--------------------------------------------------------------------------------
Invemed Catalyst Fund, L.P. 1,000,000 $25,000,000
EXHIBIT C-1
-----------
[SOFTBANK CORP. LETTERHEAD]
November __, 2001
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxx. - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Invemed Catalyst Fund, L.P.,
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
1. In order to induce you to sign the Stock Purchase Agreement,
between Key3Media Group, Inc. (the "COMPANY") and Invemed Catalyst Fund, L.P.
("INVEMED"), dated the date hereof, SOFTBANK Corp. hereby agrees, and shall
cause each of its affiliates (as defined in Rule 405 of the Securities Act of
1933, as amended) to agree to (SOFTBANK Corp. and its affiliates being
collectively referred to herein as "SOFTBANK"):
o approve the issuance of shares of the Series A 5.5% Convertible
Redeemable Preferred Stock, par value $0.01 per share (the "SERIES A"),
of the Company and shares of the Series B 5.5% Convertible Preferred
Stock, par value $0.01 per share (the "SERIES B"), of the Company with
an aggregate purchase price of up to $150 million and the issuance of
common stock, par value $0.01 per share (the "COMMON STOCK"), of the
Company upon the conversion of the Series A and Series B for all
purposes of ARTICLE FOURTH of the Amended and Restated Certificate of
Incorporation of the Company;
o cause all the shares of capital stock of the Company beneficially owned
by SOFTBANK to approve the issuance to Invemed of (i) the shares of the
Series A purchased by Invemed, and (ii) the Common Stock issuable upon
conversion of such shares of Series A in accordance with their terms at
any meeting of the Company's stockholders duly convened to obtain such
approval as required by Section 312.00 of the New York Stock Exchange
Listed Company Manual (the "Meeting");
o waive any and all participation and/or registration rights that
SOFTBANK may have with respect to the registered offering of the Series
B pursuant to Section 2.2 of the Registration Rights Agreement, dated
as of July 2000, between the Company and SOFTBANK; and
o during the period from the date hereof until the record date for the
first Meeting, refrain from selling, transferring or otherwise
disposing any shares of capital stock of the Company owned by it as of
the date hereof, unless the transferee agrees in writing to be bound by
the terms and conditions of this letter agreement.
2. Each purchaser of the Series A other than Invemed and the
purchasers of the Series B shall be third party beneficiaries of the
undertakings made by SOFTBANK pursuant to this letter agreement.
3. This letter 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 such State without regard to the conflict of law
principles thereof.
4. The parties hereto agree that irreparable damage would occur
in the event any provision of this letter agreement was not performed in
accordance with the terms hereof and the parties shall be entitled to specific
performance in addition to any other remedy at law or in equity. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall a single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
5. This letter agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement. Delivery
may be effected via facsimile.
2
IN WITNESS WHEREOF, SOFTBANK, the Company and Invemed have executed
this letter agreement as of the __th day of November 2001.
SOFTBANK CORP.
By: ________________________________________
Name:
Title:
Accepted and agreed:
KEY3MEDIA GROUP, INC.
By: _________________________
Name:
Title:
INVEMED CATALYST FUND, L.P.
By: _________________________
Name:
Title:
3
EXHIBIT C-2
-----------
November __, 2001
Key3Media Group, Inc.
0000 Xxxxxxxx Xxxx. - Xxxxx 000
Xxx Xxxxxxx, XX 00000
Invemed Catalyst Fund, L.P.,
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
1. In order to induce you to sign the Stock Purchase Agreement,
between Key3Media Group, Inc. (the "Company") and Invemed Catalyst Fund, L.P.
("Invemed"), dated the date hereof, each of the undersigned individuals hereby
agrees that:
o he will vote, or cause to be voted, all the shares of capital stock of
the Company beneficially owned by such individual to approve the
issuance to Invemed of (i) the shares of the 5.5% Series A Convertible
Redeemable Preferred Stock (the "Series A") purchased by Invemed, and
(ii) the Common Stock issuable upon conversion of such shares of Series
A in accordance with their terms at any meeting of the Company's
stockholders duly convened to obtain such approval as required by
Section 312.00 of the New York Stock Exchange Listed Company Manual
(the "Meeting"); and
o during the period from the date hereof until the record date for the
first Meeting, it will refrain from selling, transferring or otherwise
disposing any shares of capital stock of the Company owned by it as of
the date hereof, unless the transferee agrees in writing to be bound by
the terms and conditions of this letter agreement.
2. Each purchaser of the Series A other than Invemed and the
purchasers of the 5.5% Series B Convertible Redeemable Preferred Stock shall be
third party beneficiaries of the undertakings made pursuant to this letter
agreement.
3. This letter 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 such State without regard to the conflict of law
principles thereof.
4. The parties hereto agree that irreparable damage would occur
in the event any provision of this letter agreement was not performed in
accordance with the terms hereof and the parties shall be entitled to specific
performance in addition to any other remedy at law or in equity. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall a single or partial exercise thereof
preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
5. This letter agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement. Delivery
may be effected via facsimile.
2
IN WITNESS WHEREOF, the undersigned, the Company and Invemed have
executed this letter agreement as of the __th day of November 2001.
____________________________________________
Xxxxxxx X. Xxxxx
____________________________________________
Xxxxx Xxxxxxx
____________________________________________
Xxx Xxxxxxxxx
____________________________________________
Xxxx Xxxxxxxx
Accepted and agreed:
KEY3MEDIA GROUP, INC.
By: _________________________
Name:
Title:
INVEMED CATALYST FUND, L.P.
By: _________________________
Name:
Title:
3
AMENDMENT NO.1 TO STOCK PURCHASE AGREEMENT
------------------------------------------
THIS AMENDMENT No.1 (this "AMENDMENT"), dated November 21, 2001, amends
the Stock Purchase Agreement, dated November 13, 2001 (the "STOCK PURCHASE
AGREEMENT"), by and between Key3Media Group, Inc., a Delaware corporation (the
"COMPANY") and Invemed Catalyst Fund, L.P., a Delaware limited partnership (the
"PURCHASER"). Capitalized terms used but not otherwise defined herein have the
meanings ascribed to them in the Stock Purchase Agreement.
WITNESSETH THAT:
WHEREAS, pursuant to the Stock Purchase Agreement, the Company agreed
to issue and sell to the Purchaser and the Purchaser agreed to purchase from the
Company, shares of the Company's Series A 5.5% Convertible Redeemable Preferred
Stock, par value $.01 per share ("SERIES A PREFERRED Stock") convertible
(subject to adjustment) into shares of common stock of the Company (the "COMMON
Stock");
WHEREAS, on or before the Closing Date the Company intends to enter
into stock purchase agreements with certain investors providing for the purchase
of an aggregate number of 1,080,000 shares of the Company's Series B 5.5%
Convertible Redeemable Preferred Stock, par value $.01 per share ("SERIES B
PREFERRED STOCK") convertible into Common Stock; and
WHEREAS, the Company and the Purchaser wish to amend the Stock Purchase
Agreement in the manner set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. SECTION 3.5(B). Section 3.5(b) of the Stock Purchase Agreement
is hereby deleted in its entirety and replaced by the following paragraph:
"On the Closing Date, after giving effect to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
shall consist of (x) 200,000,000 shares of Common Stock of which (i) 68,099,575
shares shall be issued and outstanding (but excluding from the outstanding
amounts any shares of Common Stock issued upon exercise of options and warrants
outstanding as of the date of this Agreement), (ii) 24,743,901 shares shall be
reserved for issuance upon exercise of stock options granted to directors,
officers and other employees of, and consultants to the Company pursuant to
equity incentive plans approved by the Board of Directors, (iii) 6,277,000
shares shall be reserved for issuance upon exercise of warrants held by Princess
Gate Investors III, L.P., certain affiliates of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.
and certain Persons whose investment manager is PG Investors III, Inc., (iv)
4,504,505 shares shall be reserved for issuance upon conversion of the Series A
Preferred Stock, and (v) 11,711,712 shares of Common Stock shall be reserved for
issuance upon conversion of the Series B Preferred Stock; (y) 200,000,000 shares
of Non-Voting Common Stock, none of which is outstanding; and (z) 200,000,000
shares of preferred
stock of which (i) 1,000,000 shares shall be designated as Series A Preferred
Stock, all of which shall be issued and outstanding, and (ii) 2,600,000 shares
shall be designated as Series B Preferred Stock, 1,080,000 of which shall be
issued and outstanding."
2. ARTICLE V. Article V of the Stock Purchase Agreement is hereby
amended by adding thereto the following Section 5.6:
"5.6 ADDITIONAL SERIES B SALES. The Purchaser agrees that the sale of
the 1,080,000 shares of Series B Preferred Stock contemplated by and referenced
in the second whereas clause of this Amendment satisfies the conditions set
forth in Section 6.10 of the Stock Purchase Agreement. For a period of 30 days
from the date hereof, the Company shall be permitted to sell up to 1,520,000
shares of Series B Preferred Stock that are authorized but unissued on the date
hereof. If the Company shall sell any such additional shares of Series B
Preferred Stock, such sale shall be made on terms and conditions, including the
terms of any representations, warranties, indemnities, covenants, board or other
governance rights and registration rights, which are no more favorable than the
terms and conditions of the sale of the Preferred Shares to the Purchaser
contained herein or the terms and conditions of the Registration Rights
Agreement. Notwithstanding anything to the contrary or in the Series B
Certificate of Designations, if, on the thirtieth (30th ) day following the date
hereof, the Company has sold less than 1,520,000 shares of Series B Preferred
Stock as permitted by this Section 5.6, the Company shall not be permitted to
sell any additional shares of Series B Preferred without the approval of the
Purchaser. This Section 5.6 shall survive indefinitely notwithstanding the
provisions of Section 10.1."
3. EXHIBITS A AND B. EXHIBIT A and EXHIBIT B to the Stock
Purchase Agreement are hereby deleted in their entirety and replaced by the
forms attached to this Amendment as EXHIBIT A and EXHIBIT B, respectively.
4. CONTINUING EFFECT OF STOCK PURCHASE AGREEMENT. This Amendment
shall not constitute an amendment or modification of any other provision of the
Stock Purchase Agreement not expressly referred to herein. Except as expressly
amended or modified herein, the provisions of the Stock Purchase Agreement are
and shall remain in full force and effect.
5. COUNTERPARTS. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all such
counterparts shall be deemed to be one and the same instrument. Each party
hereto confirms that any facsimile copy of such party's executed counterpart of
this Amendment (or its signature page thereof) shall be deemed to be an executed
original thereof.
6. GOVERNING LAW. This Amendment shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York,
without regard to conflicts of laws or rules.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
KEY3MEDIA GROUP, INC.
By: /s/ Xxx X. Xxxxxxxxx
---------------------------------------
Name:
Title:
INVEMED CATALYST FUND, L.P.
By: Invemed Catalyst GenPar, LLC,
its general partner
By: Gladwyne Catalyst GenPar, LLC,
its managing member
/s/ Xxxxxxx Present
---------------------------------------
Name: Xxxxxxx Present
Title: Member
