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Exhibit 1.1
4,184,068 Shares
PENTON MEDIA, INC.
Common Stock
UNDERWRITING AGREEMENT
September [__], 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
DLJdirect INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Certain stockholders of Penton Media, Inc., a Delaware corporation (the
"COMPANY"), named in Parts A and B of Schedule II hereto (collectively, the
"FIRM SELLING STOCKHOLDERS") severally propose to sell to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS") an aggregate of
3,638,320 shares of common stock, par value $.01 per share, of the Company (the
"FIRM SHARES"), each Firm Selling Stockholder selling the amount set forth
opposite such Firm Selling Stockholder's name in Schedule II hereto. The Company
proposes to issue and sell to the several Underwriters, and the stockholders
named in Part C of Schedule II hereto (the "Additional Selling Stockholders")
propose to sell to the several Underwriters, in the aggregate, not more than an
additional 545,748 shares of the Company's common stock, par value $.01 per
share (the "ADDITIONAL SHARES"), the first 445,748 of which are to be sold by
the Additional Selling Stockholders and the remaining 100,000 shares are to be
issued and sold by the Company, if requested by the Underwriters as provided in
Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
referred to collectively as the "SHARES." The shares of common stock of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON STOCK." The Firm Selling Stockholders
and the Additional Selling Stockholders are hereinafter sometimes referred to
collectively as the "SELLING STOCKHOLDERS." The Company and the Selling
Stockholders are hereinafter sometimes referred to collectively as the
"SELLERS."
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SECTION 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3 (No. 333-44582),
including a prospectus, relating to the Shares. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"REGISTRATION STATEMENT"; and the prospectus in the form first used to confirm
sales of Shares is hereinafter referred to as the "PROSPECTUS" (including in the
case of all references to the Registration Statement or the Prospectus,
documents incorporated therein by reference). If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement. The terms "SUPPLEMENT" and "AMENDMENT"
or "AMEND" as used in this Agreement with respect to the Registration Statement
or the Prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"EXCHANGE ACT") that are deemed to be incorporated by reference in the
Prospectus.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) each Firm Selling
Stockholder agrees, severally and not jointly, to sell the number of Firm Shares
set forth opposite such Firm Selling Stockholder's name in Schedule II hereto
and (ii) each Underwriter agrees, severally and not jointly, to purchase from
each Firm Selling Stockholder at a price per Share of $[ ], net of underwriting
discounts and commissions (the "PURCHASE PRICE"), the number of Firm Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Firm Shares to
be sold by such Firm Selling Stockholder as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell 100,000 Additional Shares, and the Additional Selling
Stockholders agree to sell the number of Additional Shares set forth opposite
such Additional Selling Stockholder's name in Schedule II hereto, and the
Underwriters shall have the right to purchase, severally and not jointly, up to
545,748 Additional Shares, in the aggregate, from the Company and the Additional
Selling Stockholders at the Purchase Price. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. The Underwriters may exercise their right to
purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Company and the Additional Selling Stockholders
for 30 days after
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the date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof, which date shall be a business day (i) no earlier than two
business days after such notice has been given (and, in any event, no earlier
than the Closing Date (as hereinafter defined)) and (ii) no later than ten
business days after such notice has been given. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Additional Shares to be purchased as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to this
Agreement, for a period of 90 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plans; and (ii)
the Company may issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof. The
Company also agrees not to file any registration statement with respect to any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. The Company shall, prior to or concurrently with the
execution of this Agreement, deliver an agreement executed by each person listed
on Schedule III hereto, to the effect that each such person will not, during the
period commencing on the date such person signs such agreement and ending 90
days after the date of the Prospectus, without the prior written consent of
Donaldson, Lufkin & Jenrette Corporation, (A) engage in any of the transactions
described in the first sentence of this paragraph, subject to specified
exceptions, or (B) make any demand for, or exercise any right with respect to,
the registration of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Sellers are advised
by you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
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SECTION 4. Delivery and Payment. The Shares shall be
represented by definitive certificates and shall be issued in such authorized
denominations and registered in such names as Donaldson, Lufkin & Jenrette
Securities Corporation shall request no later than two business days prior to
the Closing Date or the applicable Option Closing Date (as defined below), as
the case may be. The Shares shall be delivered by or on behalf of the Sellers,
with any transfer taxes thereon duly paid by the respective Sellers, to
Donaldson, Lufkin & Jenrette Securities Corporation through the facilities of
The Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters, against payment to the Sellers of the Purchase Price therefor by
wire transfer of Federal or other funds immediately available in New York City.
The certificates representing the Shares shall be made available for inspection
not later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date (as defined below), as the
case may be, at the office of DTC or its designated custodian (the "DESIGNATED
OFFICE"). The time and date of delivery and payment for the Firm Shares shall be
9:00 A.M., New York City time, on September [ ], 2000, or such other time on the
same or such other date as Donaldson, Lufkin & Jenrette Securities Corporation,
the Firm Selling Stockholders and the Company shall agree in writing. The time
and date of delivery and payment for the Firm Shares are hereinafter referred to
as the "CLOSING DATE." The time and date of delivery and payment for any
Additional Shares to be purchased by the Underwriters shall be 9:00 A.M., New
York City time, on the date specified in the applicable exercise notice given by
you pursuant to Section 2 or such other time on the same or such other date as
Donaldson, Lufkin & Jenrette Securities Corporation, the Additional Selling
Stockholders and the Company shall agree in writing. The time and date of
delivery and payment for any Additional Shares are hereinafter referred to as
the "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any
Option Closing Date on behalf of the parties hereto pursuant to Section 9 of
this Agreement shall be delivered at the Chicago offices of Skadden, Arps,
Slate, Meagher & Flom LLP and the Shares shall be delivered at the Designated
Office, all on the Closing Date or such Option Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees with
you:
(a) To advise you promptly and, if requested by you,
to confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of any of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes, (iii)
when any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective, and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or
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changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To furnish to you five (5) signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated therein by reference,
and to furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement as so filed and of each amendment
to it, without exhibits but including documents incorporated therein by
reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and
substance of which shall be satisfactory to you, and to file the Prospectus in
such form with the Commission within the applicable period specified in Rule
424(b) under the Act; during the period specified in Section 5(d) below, not to
file any further amendment to the Registration Statement and not to make any
amendment or supplement to the Prospectus of which you shall not previously have
been advised or to which you shall reasonably object after being so advised;
and, during such period, to prepare and file with the Commission, promptly upon
your reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its best
efforts to cause any such amendment to the Registration Statement to become
promptly effective.
(d) Prior to 4:00 P.M., New York City time, on the
first business day after the date of this Agreement and from time to time
thereafter for such period as in the opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City to each Underwriter and any
dealer as many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) and any documents incorporated therein by reference as such
Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d),
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
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(f) Prior to any public offering of the Shares, to
cooperate with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such registration or qualification
in effect so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided, however, that the
Company shall not be required in connection therewith to qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or to take
any action that would subject it to general consent to service of process or
taxation other than as to matters and transactions relating to the Prospectus,
the Registration Statement, any preliminary prospectus or the offering or sale
of the Shares, in any jurisdiction in which it is not now so subject.
(g) To mail or make generally available to its
stockholders as soon as practicable an earnings statement covering the
twelve-month period ending September 30, 2001 that shall satisfy the provisions
of Section 11(a) of the Act, and to advise you in writing when such statement
has been so made available.
(h) During the period of three years after the date
of this Agreement, to furnish to you as soon as available copies of all reports
or other communications furnished to the record holders of Common Stock or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and its subsidiaries as you may
reasonably request.
(i) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of the Sellers' obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and any Selling Stockholder's
counsel that the Company is obligated to pay by contract (in addition to the
Company's counsel) in connection with the registration and delivery of the
Shares under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and dealers in
the quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all costs of printing this Agreement and
any other agreements or documents in connection with the offering, purchase,
sale or delivery of the Shares, (iv) all expenses in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and
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disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto not to exceed
$15,000), (v) the filing fees and fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Shares by the National Association of Securities Dealers, Inc., (vi) all costs
and expenses incident to the listing of the Shares on the New York Stock
Exchange (the "NYSE"), (vii) the cost of printing certificates representing the
Shares, (viii) the costs and charges of any transfer agent, registrar and/or
depositary, and (ix) all other costs and expenses incident solely to the
performance of the obligations of the Company and the Selling Stockholders
hereunder for which provision is not otherwise made in this Section. The
provisions of this Section shall not supersede or otherwise affect any agreement
that the Company and the Selling Stockholders may otherwise have for allocation
of such expenses among themselves.
(j) To use its best efforts to list the Shares on
the NYSE.
(k) To use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company on or prior to the Closing Date or any Option Closing Date, as the
case may be, and to satisfy all conditions precedent to the delivery of the
Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective
(other than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become effective
no later than 10:00 P.M., New York City time, on the date of this Agreement; and
no stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the Act and
the Exchange Act; (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
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applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iv) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and (v) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein. The parties hereto acknowledge that for
purposes of this Agreement, including this Section 6(b) and Section 8 hereof,
the only written information furnished to the Sellers by any Underwriter
expressly for use in the Registration Statement or any preliminary prospectus or
the Prospectus is the information contained under the caption "Underwriting" in
the Prospectus in the table in the first paragraph, and in the third, fourth,
ninth and tenth paragraphs of such section.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its subsidiaries has
been duly incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as described in the Prospectus and to
own, lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "Material Adverse Effect").
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(e) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries relating to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of the Company or any of its subsidiaries, except as otherwise
disclosed in the Prospectus.
(f) All the outstanding shares of capital stock of
the Company (including the Shares to be sold by the Selling Stockholders) have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be issued and
sold by the Company have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(g) Except as otherwise disclosed in the Prospectus,
all of the outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through one
or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company
conforms as to legal matters to the description thereof contained in the
Prospectus.
(i) Neither the Company nor any of its subsidiaries
is (i) in violation of its respective charter or by-laws or (ii) in default in
the performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is bound, except
for such defaults as would not, singly or in the aggregate, result in a Material
Adverse Effect.
(j) The execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby will not (i)
require any consent, approval, authorization or other order of, or qualification
with, any court or governmental body or agency (except (A) such as may be
required under the securities or Blue Sky laws of the various states, (B) such
as may have been obtained prior to the date hereof, or (C) where the failure to
obtain such consent, approval, authorization or other order would not result,
singly or in the aggregate, in a Material Adverse Effect), (ii) (A) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries or (B)
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, any indenture, loan agreement, mortgage, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property is
bound, except for such conflicts, breaches or defaults that would not,
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singly or in the aggregate, result in a Material Adverse Effect, (iii) violate
or conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization, except for such suspensions,
terminations, revocations or impairments that would not, singly or in the
aggregate, result in a Material Adverse Effect.
(k) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is or
could be a party or to which any of their respective property is or could be
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described; nor are there any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(l) Neither the Company nor any of its subsidiaries
has violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(m) Each of the Company and its subsidiaries has
such permits, licenses, consents, exemptions, franchises, authorizations and
other approvals (each, an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
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(n) There are no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) This Agreement has been duly authorized,
executed and delivered by the Company.
(p) (i) PricewaterhouseCoopers LLP are independent
public accountants with respect to the Company and its subsidiaries as required
by the Act; (ii) Arthur Andersen LLP were independent public accountants with
respect to Mecklermedia Corporation prior to the acquisition thereof by the
Company and (iii) KPMG LLP were independent public accountants with respect to
New Hope Natural Media (a division of New Hope Communications, Inc.) prior to
the acquisition thereof by the Company.
(q) The consolidated financial statements included
or incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), together with related schedules and
notes, present fairly the consolidated financial position, results of operations
and changes in financial position of the Company and its subsidiaries on the
basis stated therein at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the supporting schedules, if any, included in the Registration
Statement present fairly in accordance with generally accepted accounting
principles the information required to be stated therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are, in
all material respects, accurately presented and, with respect to the Company's
financial information, prepared on a basis consistent with such financial
statements and the books and records of the Company.
(r) The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(s) Except as otherwise disclosed in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
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(t) Since the respective dates as of which
information is given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company or
any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any liability or obligation, direct or contingent,
that would be material to the Company or its subsidiaries, taken as a whole.
(u) The Company and its subsidiaries own or possess,
or can acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, knowhow (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names, Internet domain names,
designs, logos, slogans and general intangibles of like nature, together with
goodwill, and registrations and applications relating to any of the foregoing,
as applicable ("INTELLECTUAL PROPERTY") currently employed by them in connection
with the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such intellectual property would not,
singly or in the aggregate, have a Material Adverse Effect; the intellectual
property owned or used by the Company or its subsidiaries has been duly
maintained, is valid and subsisting, in full force and effect, and has not been
cancelled, expired or abandoned; and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(v) All material Tax returns required to be filed by
the Company and each of its subsidiaries have been filed and all such returns
are true, complete and correct in all material respects. All material Taxes that
are due or claimed to be due from the Company and each of its subsidiaries have
been paid other than those (i) currently payable without penalty or interest or
(ii) being contested in good faith and by appropriate proceedings and for which,
in the case of both clauses (i) and (ii), adequate reserves have been
established on the books and records of the Company and its subsidiaries in
accordance with GAAP. There are no proposed, material Tax assessments against
the Company or any of its subsidiaries. The accruals and reserves on the books
and records of the Company and its subsidiaries in respect of any material Tax
liability for any Taxable period not finally determined are adequate to meet any
assessments of Tax for any such period. For purposes of this Agreement, the term
"Tax" and "Taxes" shall mean all Federal, state, local and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.
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(w) The Company had, at the time of the consummation
of the distribution of Common Stock of the Company to stockholders of Pittway
Corporation pursuant to the Combination Agreement, dated as of May 21, 1998, by
and among the Company, Pittway Corporation, and others (the "Combination
Agreement"), no plan or intention to issue any shares of Common Stock or any
other equity security of the Company, other than the issuances described in the
Registration Statement of the Company on Form S-1 filed with the Commission on
August 3, 1998.
(x) The pro forma financial statements of the
Company and its subsidiaries and the related notes thereto set forth in the
Registration Statement and the Prospectus (and any supplement or amendment
thereto) have been prepared on a basis consistent with the historical financial
statements of the Company and its subsidiaries, give effect to the assumptions
used in the preparation thereof on a reasonable basis and in good faith and
present fairly the transactions described therein. Such pro forma financial
statements have been prepared in accordance with, and there are no other pro
forma financial statements required by, the applicable requirements of Rule
11-02 of Regulation S-X promulgated by the Commission. The other pro forma
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any supplement or amendment thereto) are, in
all material respects, accurately presented and prepared on a basis consistent
with the pro forma financial statements.
(y) The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(z) Each certificate signed by any officer of the
Company and delivered to the Underwriters or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
SECTION 7. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder is the lawful owner of
the Shares to be sold by such Selling Stockholder pursuant to this Agreement and
has, and on the Closing Date or the Option Closing Date, as applicable, will
have, good and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
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<PAGE> 14
(b) Such Selling Stockholder has, and on the Closing
Date or the Option Closing Date, as applicable, will have, full legal right,
power and authority, and all authorization and approval required by law, to
enter into this Agreement and, with respect to the Firm Selling Stockholders,
the Power of Attorney and Custody Agreement signed by such Firm Selling
Stockholder and Edward Schwartz or Michael Resnick, as the case may be, as
Attorney- In-Fact and Custodian (the "FIRM SELLING STOCKHOLDER
ATTORNEY-IN-FACT"), relating to the deposit of the Firm Shares to be sold by
such Firm Selling Stockholder and the transactions contemplated hereby and by
the Registration Statement (the "FIRM SELLING STOCKHOLDER POWER OF ATTORNEY AND
CUSTODY AGREEMENT"), and, with respect to the Additional Selling Stockholders,
the Power of Attorney and Custody Agreement signed by such Additional Selling
Stockholder and William Donohue as Attorney-In-Fact and Custodian (the
"ADDITIONAL SELLING STOCKHOLDER ATTORNEY-IN-FACT" and, together with the Firm
Selling Stockholder Attorney-In- Fact, the "ATTORNEYS-IN-FACT") relating to the
deposit of the Additional Shares to be sold by such Additional Selling
Stockholder and the transactions contemplated hereby and by the Registration
Statement (the "ADDITIONAL SELLING STOCKHOLDER POWER OF ATTORNEY AND CUSTODY
AGREEMENT" and, together with the Firm Selling Stockholder Power of Attorney and
Custody Agreement, the "POWER OF ATTORNEY AND CUSTODY AGREEMENTS"), and, with
respect to each Selling Stockholder, to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner provided herein and
therein.
(c) This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder.
(d) The Power of Attorney and Custody Agreement of
such Selling Stockholder has been duly authorized, executed and delivered by
such Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms and, pursuant to the power
of attorney conferred thereby, such Selling Stockholder has, among other things,
authorized its Attorney-In-Fact to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document that such Selling
Stockholder may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
(e) Upon delivery of and payment for the Shares to
be sold by such Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(f) The execution, delivery and performance of this
Agreement and the Power of Attorney and Custody Agreement of such Selling
Stockholder, by or on behalf of such Selling Stockholder, the compliance by each
Selling Stockholder with all the provisions hereof and thereof, as applicable,
and the consummation of the transactions contemplated hereby and thereby, as
applicable, will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such as may be
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<PAGE> 15
required under the securities or Blue Sky laws of the various states), (ii)
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of such Selling Stockholder, if such
Selling Stockholder is not an individual, or any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any property of
such Selling Stockholder is bound or (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over such Selling
Stockholder or any property of such Selling Stockholder.
(g) The information in the Registration Statement
under the caption "Principal and Selling Stockholders" which specifically
relates to such Selling Stockholder does not, and will not on the Closing Date,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(h) At any time during the period described in
Section 5(d), if there is any change in the information referred to in Section
7(g), such Selling Stockholder will immediately notify you of such change.
(i) Such Selling Stockholder (i) has made an
independent investment decision with respect to its decision to offer and sell
the Shares of Common Stock set forth opposite its name on Schedule II hereto and
(ii) had, at the time of the consummation of the distribution of Common Stock of
the Company to stockholders of Pittway Corporation pursuant to the Combination
Agreement, no plan or intention to sell or otherwise dispose of any shares of
Common Stock or any other equity security of the Company.
(j) Each certificate signed by or on behalf of such
Selling Stockholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such Selling
Stockholder to the Underwriters as to the matters covered thereby.
(k) With respect to the Firm Selling Stockholders,
such Firm Selling Stockholder agrees to cause each person or entity listed in
the table in the section of the preliminary prospectus, dated September 5, 2000,
entitled "Principal and Selling Stockholders" that (i) has not executed, on or
prior to the date hereof, an agreement to the effect set forth in the last
sentence of Section 2 hereof with respect to the shares of Common Stock owned by
such person or entity (a "Lock-Up Agreement"), (ii) owns shares of Common Stock
as of the date hereof, and (iii) is not selling such shares of Common Stock to
the Underwriters as contemplated hereby, to execute and deliver to you, on or
prior to the Closing Date, a Lock-Up Agreement. The Firm Selling Stockholders
shall have no obligation under this Section 7(k) with respect to any Additional
Selling Stockholder or any person listed on Schedule III hereto.
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SECTION 8. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus, as then amended or supplemented, (so long as the
Prospectus and any amendment or supplement thereto was provided by the Company
to the several Underwriters in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages, liabilities or judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in such
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person.
(b) The Selling Stockholders agree, severally and
not jointly, to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Underwriters but only
with reference to information relating to such Selling Stockholder furnished in
writing to the Company or to the Underwriters by such Selling Stockholder
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus. Notwithstanding the foregoing, the aggregate liability of any
Selling Stockholder pursuant to this Section 8(b) shall be limited to an amount
equal to the total proceeds (before deducting underwriting discounts and
commissions and expenses) received by such Selling Stockholder from the
Underwriters for the sale of the Shares sold by such Selling Stockholder
hereunder.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or
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<PAGE> 17
Section 20 of the Exchange Act, each Selling Stockholder and each person, if
any, who controls such Selling Stockholder within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Sellers to such Underwriter but only with reference to
information relating to such Underwriter furnished in writing to the Company by
such Underwriter through you expressly for use in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus.
(d) In case any action shall be commenced involving
any person in respect of which indemnity may be sought pursuant to Section 8(a),
8(b) or 8(c) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to Sections 8(a), 8(b) and 8(c), the Underwriter shall
not be required to assume the defense of such action pursuant to this Section
8(d), but may employ separate counsel and participate in the defense thereof,
but the fees and expenses of such counsel, except as provided below, shall be at
the expense of such Underwriter). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and all persons, if any, who control the Company
within the meaning of either such Section and (iii) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Selling Stockholders and all persons, if any, who control any Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette
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Securities Corporation. In the case of any such separate firm for the Company
and such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. In the case of any such separate firm
for the Selling Stockholders and such control persons of any Selling
Stockholders, such firm shall be designated in writing by each Attorney-In-Fact.
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(e) To the extent the indemnification provided for
in this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each 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, claims, damages, liabilities and judgments (i) (A)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand from the offering of the Shares or (B) if the allocation
provided by clause 8(e)(i)(A) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(e)(i)(A) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations or (ii) as between the Company on the one hand and each
Selling Stockholder on the other, or as among the Selling Stockholders, as the
case may be, (A) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by each Selling Stockholder
on the other hand from the offering of the Shares or (B) if the allocation
provided by clause 8(e)(ii)(A) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (8)(e)(ii)(A) above but also the relative fault of the Company on
the one hand and of each Selling Stockholder on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgements, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on
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the one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company and the Selling Stockholders, and the total underwriting
discounts and commissions received by the Underwriters, bear to the total price
to the public of the Shares, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(e) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(f) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) Each Firm Selling Stockholder hereby designates
Katten Muchin Zavis, 245 Park Avenue, 39th Floor, New York, New York, 10167,
telephone (212) 382-3395, as its authorized agent, and each Additional Selling
Stockholder hereby designates [ ] as its authorized agent, in each case upon
which process may be served in any action which may be instituted in any state
or federal court in the State of New York by any Underwriter, any director or
officer of any Underwriter or any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 8,
and each Selling Stockholder
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will accept the jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Selling Stockholder, at the address for notices specified in
Section 12 hereof.
SECTION 9. Conditions of Underwriters' Obligations.
(1) The several obligations of the Underwriters to purchase
the Firm Shares under this Agreement are subject to the satisfaction of each of
the following conditions:
(a) All the representations and warranties of the
Company contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and as of
the Closing Date.
(b) (i) If the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., New York City time, on the date of this Agreement; and (ii) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
(c) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by Thomas L. Kemp and Joseph G.
NeCastro, in their capacities as the Chief Executive Officer, and Chief
Financial Officer, respectively, of the Company, (i) confirming the matters set
forth in Sections 6(t), 9(1)(a) and 9(1)(b) and that the Company has complied
with all of the agreements and satisfied all of the conditions herein contained
and required to be complied with or satisfied by the Company on or prior to the
Closing Date, and (ii) stating that the industry, statistical and market-related
data included in the Prospectus has been reviewed by such persons and, to the
best knowledge of such persons, subject to the risks and limitations described
in the preliminary prospectus and the Prospectus, is true and accurate in all
material respects and is based on or derived from sources which the Company
believes to be reliable and accurate, which certificate shall be in form and
substance satisfactory to counsel for the Underwriters.
(d) Since the respective dates as of which
information is given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
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described in clause 9(1)(d)(i), 9(1)(d)(ii) or 9(1)(d)(iii), in your judgment,
is material and adverse and, in your judgment, makes it impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each
Selling Stockholder contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date with the same force and effect as if made on
and as of the Closing Date and you shall have received on the Closing Date a
certificate dated the Closing Date from each Firm Selling Stockholder or the
Firm Selling Stockholder Attorney-In-Fact, on behalf of each of the respective
Firm Selling Stockholders, to such effect and to the effect that such Firm
Selling Stockholder has complied with all of the agreements and satisfied all of
the conditions herein contained and required to be complied with or satisfied by
such Firm Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Jones, Day, Reavis & Pogue, counsel for the Company, to the
effect set forth in Exhibit A hereto.
The opinion of Jones, Day, Reavis & Pogue described in Section
9(1)(f) above shall be rendered to you at the request of the Company and shall
so state therein.
(g) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of McDermott, Will & Emery, counsel for the Firm Selling
Stockholders named in Part A of Schedule II (the "Harris Stockholders"), to the
effect set forth in Exhibit B hereto.
The opinion of McDermott, Will & Emery described in Section
9(1)(g) above shall be rendered to you at the request of the Harris Stockholders
and shall so state therein.
(h) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of each of Levenfeld Pearlstein Glassberg Tuchman Bright Goldstein
& Schwartz, LLC, and Katten Muchin Zavis, counsel for the Firm Selling
Stockholders named in Part B of Schedule II (the "WHI Stockholders"), to the
effect set forth in Exhibit B hereto.
The opinions of Levenfeld Pearlstein Glassberg Tuchman Bright
Goldstein & Schwartz, LLC and Katten Muchin Zavis, described in Section 9(1)(h)
above shall be rendered to you at the request of the WHI Stockholders and shall
so state therein.
(i) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Underwriters, as to the matters referred to in clauses (iv),
(vi), (vii), (xv) (but only with respect to the Registration Statement and the
Prospectus), and (xvi) set forth in Exhibit A.
21
<PAGE> 22
In giving such opinions with respect to the matters covered by
clause (xvi) of Exhibit A, Jones, Day, Reavis & Pogue may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and documents incorporated therein by reference and review and discussion of the
contents thereof, but is without independent check or verification except as
specified. In giving such opinions with respect to the matters covered by clause
(xvi) of Exhibit A, Skadden, Arps, Slate, Meagher & Flom LLP may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto (other than documents incorporated therein by reference) and review and
discussion of the contents thereof (including the documents incorporated therein
by reference), but are without independent check or verification except as
specified.
(j) You shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from each of
PricewaterhouseCoopers LLP, Arthur Andersen LLP and KPMG LLP, independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the Prospectus.
(k) The Company shall have delivered to you the
agreements specified in Section 2 hereof which agreements shall be in full force
and effect on the Closing Date.
(l) The Shares shall have been duly listed on the
NYSE.
(m) Each Firm Selling Stockholder shall have
delivered to the Underwriters a properly completed and executed Internal Revenue
Service Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof), dated as of the Closing Date.
(n) Each Firm Selling Stockholder shall have
delivered the Lock-Up Agreements required to be delivered pursuant to Section
7(k) hereof;
(o) Each Additional Selling Stockholder not
otherwise listed in Schedule III hereto shall have delivered an agreement to the
effect set forth in the last sentence of Section 2 hereof with respect to the
shares of Common Stock owned by such person; and
(p) The Company and the Selling Stockholders shall
not have failed on or prior to the Closing Date to perform or comply with any of
the agreements herein contained and required to be performed or complied with by
the Company or the Selling Stockholders, as the case may be, on or prior to the
Closing Date.
22
<PAGE> 23
(2) The several obligations of the Underwriters to purchase
the Additional Shares under this Agreement are subject to the delivery to you on
the applicable Option Closing Date of the following documents:
(a) A Certificate, dated the Option Closing Date,
signed by Thomas L. Kemp and Joseph G. NeCastro, in their capacities as Chief
Executive Officer, and Chief Financial Officer, respectively, of the Company,
confirming that the certificate delivered at the Closing Date pursuant to
Section 9(1)(c) hereof remains true and correct as of such Option Closing Date.
(b) A certificate, dated the Option Closing Date,
from each Additional Selling Stockholder or the Additional Selling Stockholder
Attorney-In-Fact to the effect set forth in Section 9(1)(e) hereof, with respect
to each Additional Selling Stockholder.
(c) An opinion (satisfactory to you and counsel for
the Underwriters), dated the Option Closing Date, of Jones, Day, Reavis & Pogue,
counsel for the Company, to the same effect as the opinions required by Section
9(1)(f) hereof.
(d) An opinion (satisfactory to you and counsel for
the Underwriters), dated the Closing Date, of Chapman and Cutler, counsel for
the Additional Selling Stockholders, to the effect set forth in EXHIBIT B
hereto.
The opinion of Chapman and Cutler described in Section 9(1)(i)
above shall be rendered to you at the request of the Additional Selling
Stockholders and shall so state therein.
(e) An opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Underwriters, to the same effect as the opinions
required by Section 9(1)(i) hereof.
(f) A letter, dated the Option Closing Date, from
each of PricewaterhouseCoopers LLP, Arthur Andersen LLP and KPMG LLP,
independent public accountants, substantially in the same form and substance as
the letters furnished pursuant to Section 9(1)(j) hereof, except that the
"specified date" in the letters furnished pursuant to this paragraph shall be a
date not more than five days prior to such Option Closing Date.
(f) Each Additional Selling Stockholder shall have
delivered to the Underwriters a properly completed and executed Internal Revenue
Service Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof), dated as of the Option Closing Date.
(3) At the Closing Date and each Option Closing Date, counsel
for the Underwriters shall have been furnished with such documents and opinions
as they may
23
<PAGE> 24
reasonably require for the purpose of enabling them to pass upon the sale of the
Shares as herein contemplated, or in order to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any of the conditions,
herein contained.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Sellers if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the NYSE, the American Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market or limitation on prices for securities or other instruments on
any such exchange or the Nasdaq National Market, (iii) the suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, (v) the declaration of a banking moratorium by either federal or New
York State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it has
or they have agreed to purchase hereunder on such date and the aggregate number
of Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing
24
<PAGE> 25
Date any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased by all Underwriters and arrangements satisfactory to you, the
Company and the Selling Stockholders for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholders. In any such case which does not result in termination of
this Agreement, either you or the Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non- defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 11. Agreements of the Selling Stockholders. Each
Selling Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes
payable in connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and
performed by such Selling Stockholder under this Agreement prior to the Closing
Date and to satisfy all conditions precedent to the delivery of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement.
SECTION 12. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Penton Media, Inc., 1100 Superior Avenue, Cleveland, Ohio 44114,
(ii) if to the Harris Stockholders, to Edward Schwartz, c/o Harris Holdings,
Inc., 200 South Wacker Drive, Suite 700, Chicago, Illinois, 60606, (iii) if to
the WHI Stockholders, to Michael Resnick, c/o William Harris Investors, Inc., 2
North LaSalle Street, Suite 400, Chicago, Illinois, 60602, (iv) if to the
Additional Selling Stockholders, to [ ], and (v) if to any Underwriter or to
you, to you c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
25
<PAGE> 26
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Selling
Stockholders and the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Shares, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the officers or directors of any Underwriter, any person controlling any
Underwriter, the Company, the officers or directors of the Company, any person
controlling the Company, any Selling Stockholder or any person controlling such
Selling Stockholder, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf
of any Seller as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Sellers agree, severally and not
jointly, to reimburse the several Underwriters for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof. The
Sellers also agree, severally and not jointly, to reimburse the several
Underwriters, their directors and officers and any persons controlling any of
the Underwriters for any and all fees and expenses (including, without
limitation, the fees and disbursements of counsel) incurred by them in
connection with enforcing their rights hereunder (including, without limitation,
pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Selling Stockholders, the Underwriters, the Underwriters' directors and
officers, any controlling persons referred to herein, the Company's directors
and the Company's officers who sign the Registration Statement and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
26
<PAGE> 27
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
PENTON MEDIA, INC.
By: ________________________________
Name:
Title:
THE FIRM SELLING STOCKHOLDERS
COLLECTIVELY, BUT ACTING SEVERALLY
By: ________________________________
Name:
as Attorney-In-Fact for the Firm
Selling Stockholders
THE ADDITIONAL SELLING STOCKHOLDERS
COLLECTIVELY, BUT ACTING SEVERALLY
By: ________________________________
Name: William Donohue
as Attorney-In-Fact for the Additional
Selling Stockholders
S - 1
<PAGE> 28
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch, Pierce Fenner & Smith
Incorporated
Credit Suisse First Boston Corporation
Salomon Smith Barney, Inc.
DLJdirect Inc.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: _________________________________
Name:
Title:
S - 2
<PAGE> 29
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Donaldson, Lufkin & Jenrette
Securities Corporation............................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................
Credit Suisse First Boston Corporation...............
Salomon Smith Barney Inc.............................
DLJdirect Inc. ......................................
Total....................................... 3,638,320
II - 1
<PAGE> 30
SCHEDULE II
-----------
SELLING STOCKHOLDERS
--------------------
<TABLE>
<CAPTION>
Number of Firm Number of Additional
Name Shares Being Sold Shares Being Sold
---- ----------------- -----------------
Part A - Harris Stockholders
----------------------------
<S> <C> <C>
King Harris 176,392 --
William J. Friend 45,826 --
Katherine P. Harris Trust, dated January 18,
1991 110,500 --
Toni H. Paul 88,215 --
John B. Harris Fund under the R. Neison
Harris Trust of 1954 for King William W.
Harris 133,454 --
Pam F. Szokol Fund under the R. Neison
Harris Trust of 1954 for Katherine P. Harris 38,000 --
Pam F. Szokol Trust, dated February 18, 1993 12,000 --
Alan H. Paul Fund under the R. Neison
Harris Trust of 1954, for Toni L. Harris 33,600 --
Charles H. Paul Fund under the R. Neison
Harris Trust of 1954, for Toni L. Harris 35,200 --
Kelly L. Paul Fund under the R. Neison
Harris Trust of 1954, for Toni L. Harris 35,200 --
Laurie B. Paul Fund under the R. Neison
Harris Trust of 1954, for Toni L. Harris 33,600 --
Trust f/b/o John B. Harris under the Bette D.
Harris Grandchildren's Trust, dated
January 13, 1959 10,000 --
Harris Family Foundation 630,154 --
John B. Harris 1998 Trust 7,500 --
Trust f/b/o Alan H. Paul under the Toni L.
Harris Trust for Children, dated
December 15, 1976 6,000 --
Trust f/b/o Charles H. Paul under the Toni L.
Harris Trust for Children, dated
December 15, 1976 6,000 --
</TABLE>
II - 2
<PAGE> 31
<TABLE>
<CAPTION>
Number of Firm Number of Additional
Name Shares Being Sold Shares Being Sold
---- ----------------- -----------------
<S> <C> <C>
Trust f/b/o Kelly L. Paul under the Toni L.
Harris Trust for Children, dated
December 15, 1976 6,000 --
Trust f/b/o Laurie B. Paul under the Toni L.
Harris Trust for Children, dated
December 15, 1976 6,000 --
Trust f/b/o Alan H. Paul under the Bette D.
Harris Grandchildren's Trust, dated
January 13, 1959 2,900 --
Trust f/b/o Laurie B. Paul under the Bette D.
Harris Grandchildren's Trust, dated
January 13, 1959 2,900 --
Trust f/b/o Charles H. Paul under the Bette D.
Harris Grandchildren's Trust, dated
January 13, 1959 2,900 --
Trust f/b/o Kelly L. Paul under the Bette D.
Harris Grandchildren's Trust, dated
January 13, 1959 2,900 --
Charles H. Paul 2000 Trust 2,800 --
King W. Harris as custodian for Kelly L. Paul 2,700 --
William Friend Fund under the R. Neison
Harris Trust of 1954, for Katherine P. Harris 17,394 --
Scott Friend Fund under the R. Neison Harris
Trust of 1954, for Katherine P. Harris 48,085 --
Scott C. Friend Trust, dated November 11,
1998 39,734 --
King W. Harris Trust for Children, dated
December 15, 1976; Katherine Harris,
Denise Saul and Robert Barrows, Trustees 65,881 --
SUBTOTAL 1,601,835 0
========= =
Part B - WHI Stockholders
-------------------------
Jewish Federation of Metropolitan Chicago 307,087 --
1 South Franklin Street
Suite 850
Chicago, Illinois 60606
</TABLE>
II - 3
<PAGE> 32
<TABLE>
<CAPTION>
Number of Firm Number of Additional
Name Shares Being Sold Shares Being Sold
---- ----------------- -----------------
<S> <C> <C>
Cottage Investments L.P. 66,971 --
Bern L.P. 272,124 --
Wilikenia L.P. 226,385 --
Dromara Investors, L.P. 77,911 --
St. Louis L.P. 267,419 --
Coydog Foundation 17,997 --
2029 L.P. 252,531 --
Robert L. Barrows 62,104 --
Donna E. Barrows 64,269 --
David M. Wark and Mary Ann Barrows Wark
Foundation 51,212 --
Harris Foundation 74,475 --
Patricia J. Rosbrow 16,309 --
Sidney Barrows and June H. Barrows
Foundation 16,309 --
Daniel H. Meyer Investment Trust 19,272 --
The Summer Fund 23,985 --
Thomas W. Meyer Trust 21,525 --
VHP - James 76 Trust 18,667 --
VHP - Jack 76 Trust 22,723 --
VHP - George 76 Trust 17,428 --
VHP - Charles 76 Trust 17,481 --
VHP Trust dated December 29, 1975 fbo Jean
Polsky 394 --
VHP - Jean 76 Trust 14,090 --
Jack Polsky Investment Trust 6,008 --
Trust uwo Mildred Harris fbo Patricia
Rosbrow 4,797 --
Trust uwo Mildred Harris fbo William
Barrows 3,801 --
Charles Polsky Investment Trust 3,600 --
Benjamin Harris Investment Trust 2,437 --
IBH Trust dated February 27, 1974 fbo Jean
Polsky 3,945 --
IBH - Benjamin 74 Trust 1,578 --
IBH - David 74 Trust 1,578 --
</TABLE>
II - 4
<PAGE> 33
<TABLE>
<CAPTION>
Number of Firm Number of Additional
Name Shares Being Sold Shares Being Sold
---- ----------------- -----------------
<S> <C> <C>
WWH - Benjamin 76 Trust 39,355 --
WWH - David 76 Trust 39,140 --
Benjamin 75 Trust 789 --
David 75 Trust 789 --
SUBTOTAL 2,036,485 0
========= =
Part C - DMG Stockholders
-------------------------
William Donohue 0 103,000
John J. Meehan 0 100,000
R. Douglas Greene 0 242,748
SUBTOTAL 0 445,748
= =======
TOTAL...................................... 3,638,320 445,748
</TABLE>
II - 5
<PAGE> 34
SCHEDULE III
------------
Lock-Up Agreements
------------------
King W. Harris
Thomas L. Kemp
Daniel J. Ramella
Joseph G. NeCastro
David B. Nussbaum
James W. Zaremba
Preston L. Vice
Jocelyn A. Bradford
Paul W. Brown
Anthony Downs
William J. Friend
R. Douglas Greene
John J. Meehan
Don E. Schultz
Edward J. Schwartz
William B. Summers
Richard B. Swank
III - 1
<PAGE> 35
EXHIBIT A
---------
(i) The Company has been duly incorporated
and each of the Company and each subsidiary of the Company that is
required to be listed on an exhibit to the Company's Form 10-K pursuant
to paragraph (21) of Item 601 of Regulation S-K under the Act
(collectively the "Company Subsidiaries") is validly existing and in
good standing under the laws of such corporation's or company's
jurisdiction of incorporation or organization as of the dates listed
for such company on an exhibit attached to such opinion, with corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus.
(ii) Each of the Company and the Company
Subsidiaries is in good standing as a foreign corporation or company in
each jurisdiction and as of the dates listed for such corporation an
exhibit attached to such opinion.
(iii) The outstanding shares of Common Stock
of the Company have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any statutory preemptive
rights or similar rights.
(iv) The Additional Shares to be issued and
sold by the Company have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Underwriting
Agreement against payment of the consideration therefor as provided
therein, will be validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any statutory preemptive
rights or similar rights.
(v) Except as set forth in the Prospectus,
the Company owns, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature all outstanding shares of
capital stock of each of the Company Subsidiaries.
(vi) The Underwriting Agreement has been
duly authorized, executed and delivered by the Company.
(vii) The Common Stock of the Company
conforms in all material respects to the description thereof contained
in Form 8-A/A, dated March 30, 1999, and incorporated by reference into
the Prospectus ("Form 8-A/A").
(viii) The Registration Statement has become
effective under the Act, and no stop order suspending the effectiveness
of the Registration Statement has been issued and, to our knowledge, no
proceedings for that purpose are pending before or contemplated by the
Commission.
A - 1
<PAGE> 36
(ix) The statements under the caption
"Principal United States Federal Tax Consequences to Non-U.S. Holders"
in the Prospectus and Item 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings.
(x) Neither the Company nor any of the
Company Subsidiaries is in violation of its respective charter or
by-laws.
(xi) The execution, delivery and
performance of the Underwriting Agreement by the Company does not (i)
require any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may have been obtained or such which would not reasonably be expected
to have a Material Adverse Effect and except that we express no opinion
with respect to any consent, approval, authorization, order,
registration or filing that may be required under state securities,
Blue Sky laws or the rules of the National Association of Security
Dealers, Inc. ("NASD"), (ii) conflict or will not conflict with or
constitute or will not constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company, except any such conflicts,
breaches and defaults that in the aggregate could not reasonably be
expected to have a Material Adverse Effect, (iii) to our knowledge,
conflict or will not conflict with or constitute or will not constitute
a breach of, or a default under, any agreement, indenture, lease or
other instrument known to us to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
respective properties may be bound, except as to any such conflicts,
breaches and defaults that in the aggregate could not reasonably be
expected to have a Material Adverse Effect (except that we express no
opinion with respect to (A) any covenant, restriction or provision of
any agreement or instrument regarding financial covenants, ratios or
tests or any aspect of the financial condition or results of operations
of the Company or (B) any state securities, Blue Sky laws or rules of
the NASD), (iv) violate or will not violate any statute, law,
regulation or filing or judgment, injunction, order or decree known to
us to be applicable to the Company or any of its respective properties,
except any such violations that in the aggregate could not reasonably
be expected to have a Material Adverse Effect, (v) result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any
agreement or instrument to which it is a party or by which it may be
bound or to which its properties or assets are subject or (vi)
resulting in the suspension, terminations or revocation of any
Authorization of the Company or any of its subsidiaries or any other
impairment of the rights of the holders of any such Authorization.
A - 2
<PAGE> 37
(xii) We do not know of any litigation or
any governmental proceedings or investigations, pending or threatened,
required to be described in the Prospectus that are not described as
required, or of any contracts, documents, statutes or regulations of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(xiii) The Company is not required to and,
after giving effect to the offering and sale of any Additional Shares
by the Company and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(xiv) To our knowledge after due inquiry,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement, excluding, however, any such rights granted by the Company
pursuant to any agreement set forth in the Prospectus.
(xv) The Exchange Act documents (except for
financial statements and other financial data included therein as to
which no opinion is expressed) complied when so filed as to form with
the Act and the Exchange Act, and the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for
financial statements and other financial data included therein as to
which no opinion is expressed) complied when so filed as to form with
the Act.
(xvi) Based upon our examination of the
Registration Statement and the Prospectus, our investigations made in
connection with the preparation of the Registration Statement and
Prospectus and our participation in the discussions referred to above,
we are of the opinion that the Registration Statement and the
Prospectus (in each case, except for (i) the financial statements,
financial schedules and other financial information included therein
and (ii) the information referred to under the caption "Experts" as
having been included on the authority of PricewaterhouseCoopers LLP,
Arthur Andersen LLP and KPMG LLP, as experts, as to which we express no
opinion) at the time the Registration Statement became effective under
the Act, and at the time the Prospectus was filed pursuant to rules and
regulations under the Act, respectively, complied as to form in all
material respects with the Act and the rules and regulations
thereunder.
A - 3
<PAGE> 38
EXHIBIT B
---------
(i) this Agreement has been duly
authorized, executed and delivered by or on behalf of each Selling
Stockholder;
(ii) each Selling Stockholder is the record
owner of the Shares to be sold by such Selling Stockholder pursuant to
this Agreement;
(iii) each Selling Stockholder has full
legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement and the Power of Attorney
and Custody Agreement of such Selling Stockholder and to sell, assign,
transfer and deliver the Shares to be sold by such Selling Stockholder
in the manner provided herein and therein;
(iv) the Power of Attorney and Custody
Agreement of each Selling Stockholder has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder, enforceable in
accordance with its terms;
(v) assuming that the Underwriters acquired
their interest in the Shares sold by each Selling Stockholder without
notice of any adverse claims, upon delivery to the Underwriters of such
Shares, the Underwriters will acquire ownership in such Shares free of
any adverse claims; and
(vi) the execution, delivery and
performance of this Agreement and the Power of Attorney and Custody
Agreement of each Selling Stockholder by such Selling Stockholder, the
compliance by such Selling Stockholder with all the provisions hereof
and thereof and the consummation of the transactions contemplated
hereby and thereby will not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (B) conflict with
or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any
indenture, loan agreement, mortgage, lease or other agreement or
instrument to which such Selling Stockholder is a party or by which any
property of such Selling Stockholder is bound or (C) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over such Selling Stockholder or any property of such
Selling Stockholder.
B - 1
