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Exhibit C-2
[XXXXXX XXXXXXXXXX]
Xxxxxx X. Xxxx
Chief Executive Officer
September 25, 1998
Mecklermedia Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Chief Executive Officer
Xx. Xxxx X. Xxxxxxx
c/o Mecklermedia Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Gentlemen:
This Letter of Intent sets forth the understandings that exist
between Penton Media, Inc. ("Penton"), Mecklermedia Corporation
("Mecklermedia"), and Xxxx X. Xxxxxxx, who beneficially owns approximately 30%
of the outstanding common stock of Mecklermedia (the "Stockholder"), concerning
the proposed transaction whereby a newly-formed, wholly-owned subsidiary of
Penton will acquire Mecklermedia (the "Transaction").
The principal terms of the Transaction are as follows:
1. CONSIDERATION. Penton will acquire Mecklermedia in a merger
transaction in which (i) each issued and outstanding share of common stock of
Mecklermedia (the "Common Stock") will be converted into the right to receive
$29.00 in cash and (ii) each outstanding option and warrant to purchase Common
Stock will be cashed out at $29.00 less the exercise price thereof.
2. DUE DILIGENCE. The execution of a definitive agreement is
conditioned upon Xxxxxx'x satisfactory completion of its due diligence
investigation (including with respect to business, legal, accounting, tax and
environmental matters) of Mecklermedia. Consequently, such investigation will
not be a condition to closing the Transaction in the definitive agreement.
Xxxxxx is prepared to commence its due diligence investigation of Mecklermedia
immediately and will complete such investigation as expeditiously as possible,
and, in any event, no later than twelve days after the date hereof.
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3. DEFINITIVE AGREEMENTS.
(a) Merger Agreement: The Transaction would be effected
pursuant to a definitive merger agreement and related
transaction documents containing customary
representations, warranties, covenants, conditions,
no-shop and termination fee provisions and other
terms and provisions as are appropriate for a
transaction of this nature and which are mutually
agreed upon by the parties.
(b) Stockholder's Agreement: As a condition to entering
into a definitive merger agreement, Penton and the
Stockholder would enter into an agreement pursuant to
which the Stockholder would (i) agree to vote all
shares of Common Stock beneficially owned by the
Stockholder at the time of such vote (x) in favor of
approval and adoption of the definitive merger
agreement and the Transaction and (y) against any
alternate acquisition of Mecklermedia or any
corporate action that would impair or delay
consummation of the Transaction and (ii) xxxxx Xxxxxx
an option to (x) purchase from the Stockholder for
$29.00 per share in cash all of the Common Stock
beneficially owned by the Stockholder or (y) receive
from the Stockholder the product of (A) 50% of the
difference between (1) the per share value of any
consideration received generally by the stockholders
of Mecklermedia or, if greater, the per share value
of any consideration actually received by the
Stockholder for his Common Stock, in any alternate
acquisition of Mecklermedia consummated within 13
months of the termination of the definitive merger
agreement and (2) $29.00 multiplied by (B) the number
of shares of Common Stock beneficially owned by the
Stockholder. If Penton exercises the option granted
in clause (ii)(x) of the immediately preceding
sentence and (i) an alternate acquisition of
Mecklermedia is consummated within 13 months of the
termination of the definitive merger agreement,
Penton will pay to Stockholder the product of (A) 50%
of the difference between (1) the per share value of
any consideration received by Penton in any alternate
acquisition of Mecklermedia for the Common Stock
purchased under such option and (2) $31.00 multiplied
by (B) the number of shares of Common Stock purchased
by Penton under such option or (ii) within a certain
time period after termination of the merger
agreement, such time period to be mutually agreed
upon by Penton and the Stockholder, Penton acquires
the remaining outstanding Common Stock, Penton will
pay to Stockholder the product of
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(A) the difference between (1) the per share value of
any consideration paid by Xxxxxx in such acquisition
and (2) $29.00 multiplied by (B) the number of shares
of Common Stock purchased by Penton under such
option.
(c) Joint Venture Agreement. Penton and the Stockholder
would also enter into an agreement pursuant to which
the Stockholder would be entitled to purchase for $15
million in cash a 50% economic interest in
Xxxxxxxx.xxx, which will be operated by a
newly-formed entity of Penton or Mecklermedia
("Webco"). Such agreement would contain provisions
(i) regarding the governance and operation of Webco
and other terms and provisions as are appropriate for
a transaction of such type, (ii) providing for
flexibility in structuring the business such that
Xxxxxx would be able to spinoff such subsidiary
tax-free to Penton's stockholders in the future if it
so desires, and (iii) that are mutually agreed upon
by the parties thereto. In addition, the parties will
negotiate in good faith a services agreement between
Penton and Webco.
4. CONDITIONS. Consummation of the Transaction would be
subject to, among other things, (i) negotiation and execution of a definitive
merger agreement and a definitive stockholder's agreement, including obtaining
board approvals by Xxxxxx and Xxxxxxxxxxxx, (ii) the satisfaction or waiver of
the conditions precedent set forth therein, (iii) obtaining all required
governmental and regulatory approvals and all third party consents and approvals
required or deemed desirable and identified by Xxxxxx in connection with the
Transaction, (iv) obtaining approval by the stockholders of Mecklermedia, (v)
Mecklermedia conducting its business and operations in the ordinary course
consistent with good business practice, including but not limited to the
maintenance of good relationships with suppliers, customers, employees and
creditors, (vi) the absence of any material adverse change, as defined in the
definitive merger agreement, and (vii) the absence of any temporary restraining
order, preliminary or permanent injunction or other order prohibiting
consummation of the Transaction.
5. COVENANTS. Mecklermedia agrees to provide Xxxxxx and its
representatives such information concerning Mecklermedia and its business as
Penton may reasonably request, and such access to the properties, books and
records of Mecklermedia as Penton shall reasonably require to complete its due
diligence investigation of Mecklermedia and its business; provided, however,
that any on-site visits will be arranged and conducted in a manner so as to
minimize any disruption to Mecklermedia's normal business operations. Penton and
Mecklermedia will cooperate with each other in good faith in the preparation and
negotiation of the definitive merger agreement, the definitive stockholder's
agreement and any related documentation contemplated hereby and thereby.
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6. PUBLICITY. This Letter of Intent is confidential, and none
of Mecklermedia, the Stockholder or Penton will make any public announcement
concerning this Letter of Intent or the transactions contemplated hereby without
the other parties' prior written consent. This Letter of Intent will terminate
automatically in the event that any of the terms, or the existence, hereof are
disclosed to any person or entity without the other parties' prior written
consent. Notwithstanding the two preceding sentences of this paragraph 6,
nothing herein prohibits Penton or Mecklermedia from making any public
announcement or other disclosure required by law or the policy of any exchange
on which such party's securities are traded.
7. EXCLUSIVITY. Xxxxxx is prepared to work diligently to
complete due diligence, negotiate a definitive agreement and work toward the
consummation of the Transaction as soon as practicable. Before committing to the
significant expenditures of time, effort and money that will be required,
however, we request that Mecklermedia and the Stockholder make a similar
commitment. Therefore, the Transaction is additionally conditioned upon
Mecklermedia and the Stockholder agreeing that until 5:00 p.m., Eastern Time, on
the 12th day from the date hereof (unless this Letter of Intent is terminated
sooner pursuant to paragraph 10 below) (the "Expiration Date"), Mecklermedia and
the Stockholder will deal exclusively with Penton in connection with the
Transaction or any similar transaction, such that none of the Stockholder,
Mecklermedia or any of its affiliates or any of their respective representatives
(including but not limited to their directors, officers, agents, employees,
financial advisors and counsel) will, directly or indirectly, solicit, encourage
or initiate any inquiries or the making of any offer or proposal from, or engage
in any negotiations or discussions with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Penton and
its representatives) (a "Person") concerning the sale of Mecklermedia or any of
its assets or securities or any merger, consolidation, tender or exchange offer,
joint venture, liquidation, restructuring, recapitalization or similar
transaction involving Mecklermedia or any of its subsidiaries or divisions (a
"Transaction Proposal"). Mecklermedia will notify Penton immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, Mecklermedia, or if the Board of Directors of Mecklermedia has undertaken
to engage or participate in any negotiations or discussions concerning or
provide any information or data to any Person relating to a Transaction
Proposal.
8. COSTS AND EXPENSES. Penton and Mecklermedia will each bear
their own costs and expenses incurred in connection with the Transaction.
9. NONBINDING NATURE OR PROPOSAL. This Letter of Intent
constitutes a statement of interest with respect to the Transaction and does not
constitute an offer capable of being accepted or a binding commitment by us in
any respect. A binding commitment with
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respect to the Transaction would result only from the execution and delivery of
a definitive merger agreement and any other necessary documentation, subject to
the conditions expressed therein. Notwithstanding the two preceding sentences of
this paragraph 9, this sentence and the provisions of paragraphs 5, 6, 7, 8, 10,
11 and 12 of this Letter of Intent are intended to be fully binding upon the
parties hereto with respect to the matters therein upon the execution of this
Letter of Intent by Xxxxxxxxxxxx and the Stockholder. The provisions of this
paragraph 9 supersede any conflicting provisions in the Confidentiality
Agreement, dated September 23, 1998, between Penton and Mecklermedia (the
"Confidentiality Agreement").
10. TERMINATION. This Letter of Intent may be terminated by
any party hereto and (except as provided in paragraph 9) no party hereto will
have any obligation to any other party with respect to the subject matter hereof
if a definitive agreement in respect of a Transaction has not been executed by
the Expiration Date, unless terminated earlier by the mutual written agreement
of the parties hereto.
11. GOVERNING LAW. This Letter of Intent will be governed by
and construed in accordance with the laws of the State of New York, without
regard to the conflicts of laws principles thereof.
12. ENTIRE AGREEMENT. This Letter of Intent embodies the
complete understanding among the parties hereto with respect to the subject
matter hereof and supersedes all previous and contemporaneous agreements between
the parties (whether written or oral), relating to the subject matter hereof,
other than the Confidentiality Agreement as modified by paragraph 9 hereof.
13. COUNTERPARTS. This Letter of Intent may be executed in one
or more counterparts, each of which will be deemed an original, but all of which
will be deemed one instrument.
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If the foregoing correctly sets forth your understanding of
our mutual intentions with respect to the transactions described herein, please
so indicate by signing the enclosed copy of this letter in the space provided
below and returning it to us.
Very truly yours,
PENTON MEDIA, INC.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chief Executive Officer
Accepted and Agreed to:
MECKLERMEDIA CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Chief Executive Officer
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
