EXHIBIT 2.2
FIRST AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER (the "Amendment"),
dated as of October 10, 2000, among Advanstar Holdings Corp. (formerly known as
Jetman Acquisition Corp.), a Delaware corporation ("Buyer"), Junior Jetman
Corp., a Delaware corporation ("Merger Sub"), Advanstar, Inc., a Delaware
corporation (the "Company"), and AHI Advanstar LLC, a Delaware limited liability
company ("Stockholder"), amends certain provisions of that certain Agreement and
Plan of Merger, dated as of August 14, 2000, among Buyer, Merger Sub, the
Company and Stockholder (the "Merger Agreement"). Any capitalized terms not
defined in this Amendment shall have the meaning ascribed thereto in the Merger
Agreement.
WHEREAS, the Company desires to grant bonuses (the "Employee Transaction
Bonuses"), not to exceed in the aggregate $2,500,000, to certain of its
employees upon and as a result of the consummation of the transactions
contemplated by the Merger Agreement;
WHEREAS, Buyer, Merger Sub and Stockholder believe it to be in their best
interests to permit the Company to grant the Employee Transaction Bonuses;
WHEREAS, in connection with the merger contemplated by the Merger Agreement
(the Merger"), Advanstar Communications Inc. a New York corporation and a wholly
owned subsidiary of the Company ("ACI"), intends to proceed with an offer to
purchase all of its outstanding 9 1/4% Senior Subordinated Notes due 2008, and,
to the extent it deems necessary or beneficial, to take other actions to
repurchase outstanding Senior Subordinated Notes;
WHEREAS, Section 9.7 of the Merger Agreement provides that the Merger
Agreement may not be amended except pursuant to a written instrument executed by
each of the parties thereto; and
WHEREAS, all of the parties to the Merger Agreement agree to amend the
Merger Agreement as provided for herein below.
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The definition of "Debt Repayment Costs" set forth in Section 1.1 of
the Merger Agreement is hereby deleted in its entirety and replaced with the
following:
"Debt Repayment Costs": all issuer repurchase premium (including, without
limitation, any consent payment) and other costs, expenses and other amounts
payable by the Company or any of its Subsidiaries in connection with any tender
offer, change of control offer, or change of
control redemption in respect of, or any other action taken to repurchase,
redeem or otherwise acquire or prepay the Senior Subordinated Notes, including
all out-of-pocket fees and expenses (including fees and expenses of counsel and
financial advisors) payable by Buyer, the Company or any of its Subsidiaries in
connection therewith; provided that Debt Repayment Costs shall not include the
principal amount or any interest payable in respect of the Senior Subordinated
Notes.
2. Section 2.6(c) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
(c) Capital Stock of Merger Sub. Each share of common stock, $1.00 par
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value per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Common Stock, $0.01 par value per share,
of the Surviving Corporation. Each stock certificate of Merger Sub evidencing
ownership of any such shares shall continue to evidence ownership of such shares
of capital stock of the Surviving Corporation.
3. Section 2.7(a) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
(a) At the Closing immediately prior to the Effective Time, if Stockholder
shall hold any Shares, Stockholder shall deliver or cause to be delivered to
Buyer certificates (the "Certificates") for all Shares owned by Stockholder at
the Effective Time, duly endorsed in blank. At the Effective Time, upon the
delivery of Certificates for any Shares by the holders thereof to Buyer, Buyer
shall pay or cause Merger Sub to pay the Per Share Closing Date Merger
Consideration to the holder of such Shares; provided that (i) (A) Buyer shall
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deduct from the Per Share Cash Consideration payable to each holder of Shares an
amount equal to the Per Share Indemnity Escrow Amount and shall pay such amount
to the Escrow Agent, for deposit into the Indemnity Escrow Account pursuant to
the Escrow Agreement, and the Escrow Agent shall hold and apply the Indemnity
Escrow Amount in accordance with the terms of the Escrow Agreement; and (B) the
aggregate Per Share Indemnity Escrow Amount of any holder of Shares who
contributed Shares to Buyer in connection with the transactions contemplated by
the Capital Contribution Termsheet shall include an amount equal to the Per
Share Indemnity Escrow Amount multiplied by such number of contributed Shares;
and (ii) the Per Share Cash Consideration payable to each holder of Shares shall
be reduced, and the Per Share Stock Consideration payable to each holder of
Shares shall be increased, in each case by such holder's pro rata share (based
on the number of Shares held) of the aggregate value of the Per Share Stock
Consideration payable in cash to Holders of the In-the-Money Options pursuant to
Section 2.7(b)(II). After the Effective Time, in respect of any Certificates for
Shares previously delivered to Buyer, Buyer shall pay or cause the Surviving
Corporation to pay the Per Share Post Closing Merger Consideration consisting of
(A) the Per Share Contingent Debt Repayment Amount if, when and to the extent it
becomes payable, (B) the Per Share Contingent Transaction Bonus Repayment Amount
if, when and to the extent it becomes payable and (C) the Per Share Purchase Pro
Amount if, when and to the extent it becomes payable. Until so surrendered, each
outstanding Certificate that, prior to the Effective Time, represented Shares
will be deemed from and after the Effective Time, for all corporate purposes,
other than the payment of dividends, to evidence the right to receive the Per
Share Merger Consideration in accordance with
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Section 2.6(a) and this Section 2.7(a). No interest will be paid or will accrue
on the Per Share Merger Consideration, except to the extent expressly provided
in the Escrow Agreement. If any portion of the Per Share Merger Consideration is
to be paid to a Person other than the Person in whose name the Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the Person requesting such payment shall pay to the Buyer any transfer
or other taxes required as a result of such payment to the Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Buyer that such tax has been paid or is not payable. No dividends or other
distributions with respect to the Surviving Corporation Common Stock shall be
included in the Per Share Merger Consideration, and no cash payment in lieu of
fractional shares as provided in Section 2.15, shall be paid to the holder of
any unsurrendered Certificates for Shares until such Certificates are
surrendered as provided in this Section. Following such surrender, there shall
be paid, without interest, to the Person in whose name the Shares have been
registered, (i) at the time of such surrender, the amount of any cash payable in
lieu of fractional shares to which such Person is entitled pursuant to Section
2.15 and the amount of all dividends or other distributions with a record date
after the Effective Time previously paid or payable on the date of such
surrender with respect to such securities, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time and prior to surrender and with a payment date subsequent to
surrender payable with respect to such securities.
4. Section 2.7 of the Merger Agreement is hereby amended to include the
following new subsection (f):
(f) At the Effective Time, Buyer shall pay or shall cause the Surviving
Corporation to pay the Contingent Transaction Bonus Escrow Amount to the Escrow
Agent, for deposit into the Contingent Transaction Bonus Escrow Account pursuant
to the Escrow Agreement, and the Escrow Agent shall hold and apply the
Contingent Transaction Bonus Escrow Amount in accordance with the terms of the
Escrow Agreement.
5. The definition of "Aggregate Cash Consideration" set forth in Section
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2.13(a) of the Merger Agreement is hereby deleted in its entirety and replaced
with the following:
"Aggregate Cash Consideration" means (a) Enterprise Value plus (b)
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Aggregate Company Cash plus (c) the Aggregate Option Exercise Consideration
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minus (d) Debt accrued as of the Closing Date minus (e) the Debt Repayment
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Escrow Amount minus (f) the Contingent Transaction Bonus Escrow Amount.
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6. The definition of "Company Transaction Expenses" set forth in Section
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2.13(a) of the Merger Agreement is hereby deleted in its entirety and replaced
with the following:
"Company Transaction Expenses" means the amounts payable (a) in respect of
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the transactions contemplated by this Agreement to (i) Xxxxxx Xxxxxxx & Co.
Incorporated pursuant to its engagement letter, (ii) Xxxxx X. Xxxxxxx Company
Limited pursuant to its engagement letter, (iii) Xxxxx, Xxxxxxx & Xxxxxxxxx,
LLP, (iv) Xxxxxx Xxxxxx White & XxXxxxxxx, (v) Xxxxxx Xxxxxxxx and (vi) any
other professional advisors, other than Buyer and its Affiliates and any
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advisors thereto or retained on behalf thereof, to the Company or the
Stockholder in connection with the transactions contemplated by this Agreement,
and (b) by the Company to its employees in respect of all Employee Transaction
Bonuses other than the Contingent Transaction Bonuses.
7. The definition of "Per Share Post-Closing Merger Consideration" set
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forth in Section 2.13(a) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"Per Share Post-Closing Merger Consideration" means an amount in cash equal
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to (a) the Per Share Contingent Debt Repayment Amount plus (b) the Per Share
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Contingent Transaction Bonus Repayment Amount plus (c) the Per Share Purchase
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Pro Amount.
8. Section 2.13(a) of the Merger Agreement is hereby amended to include
the following new definitions:
"Aggregate Contingent Transaction Bonus Repayment Amount" means the
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aggregate amount, if any, payable to the Representative (on behalf of the former
shareholders and optionholders of the Company) from the Contingent Transaction
Bonus Escrow Account.
"Contingent Transaction Bonus Escrow Account" means the account maintained
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by the Escrow Agent to hold the Contingent Transaction Bonus Escrow Amount for
the benefit of the Surviving Corporation (in the event that any of the Company's
employees are entitled, upon satisfaction of applicable conditions, to the
Contingent Transaction Bonuses) and the Representative (on behalf of the former
shareholders and optionholders of the Company) pursuant to the terms and
conditions of the Escrow Agreement.
"Contingent Transaction Bonus Escrow Amount" means $1,000,000.
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"Contingent Transaction Bonuses" means the contingent payments to be made
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by the Company to its employees, upon satisfaction of applicable conditions, as
a result of the consummation of the transactions contemplated by this Agreement,
which shall in the aggregate not exceed $1,000,000.
"Employee Transaction Bonuses" means the payments, including, without
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limitation, the Contingent Transaction Bonuses, to be made by the Company to its
employees upon and as a result of the consummation of the transactions
contemplated by this Agreement, which shall in the aggregate not exceed
$2,500,000.
"Per Share Contingent Transaction Bonus Repayment Amount" means (a) the
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Aggregate Contingent Transaction Bonus Repayment Amount divided by (b) the
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number of Fully Diluted Shares (including Dissenting Shares) immediately prior
to the Effective Time.
9. Each Schedule to the Merger Agreement, including, without limitation,
Schedule 3.8, Schedule 3.12(a), Schedule 3.12(g), Schedule 3.23(b) and Schedule
5.1(a), shall be amended, to the extent applicable, to set forth the Employee
Transaction Bonuses and the
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payment by the Company thereof to the extent contemplated by this Amendment and
the Merger Agreement as amended hereby.
10. Any provision of the Merger Agreement not specifically modified by
this Amendment shall remain in full force and effect as originally drafted.
11. The headings and captions contained herein are for convenience and
shall not control or affect the meaning or construction of any provision hereof.
This Amendment may be executed in any number of counterparts, each of which
shall be deemed to be an original and which together shall constitute one and
the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the
date first above written.
ADVANSTAR HOLDINGS CORP.
By:
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Name: Xxxxx X. Xxxxxxx
Title: President
JUNIOR JETMAN CORP.
By:
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Name: Xxxxx X. Xxxxxxx
Title: President
ADVANSTAR, INC.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Chairman and CEO
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Stockholder:
AHI ADVANSTAR LLC
By: Xxxxxxx & Xxxxxxxx
Capital Partners III, managing
member
By: H&F Investors III, its
general partner
By: Xxxxxxx & Xxxxxxxx Associates III, L.P., its
managing general partner
By: H&F Investors III, Inc.,
its managing partner
By:
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Name Xxxxxxxx X. Xxxxx
Title: Vice President
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