EXHIBIT 10.1
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ZIFF ▇▇▇▇▇ HOLDINGS INC.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
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Dated as of August 12, 2002
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TABLE OF CONTENTS
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List of Exhibits ....................................................................ii
List of Disclosure Schedules ........................................................ii
Section 1. Authorization and Closing .............................................2
1A. Authorization of the Series D Preferred ...............................2
1B. Purchase and Sale of the Series D Preferred; Exchange of Series B
Preferred and Series C Preferred ......................................2
1C. The Closing ...........................................................3
Section 2. Conditions of the Purchasers' Obligation at the Closing ...............3
2A. Representations and Warranties ........................................3
2B. Completion of the Restructuring .......................................3
2C. Issuance of the Warrants ..............................................3
2D. Amendment to the Investor Rights Agreement ............................4
2E. Stockholder Approval ..................................................4
2F. Closing Documents .....................................................4
2G. Proceedings ...........................................................4
2H. Compliance with Applicable Laws .......................................4
2I. Waiver ................................................................4
Section 3. Conditions of the Company's Obligation at Closing .....................5
3A. Representations and Warranties ........................................5
3B. No Action .............................................................5
Section 4. Transfer of Restricted Securities .....................................5
4A. Opinion Delivery ......................................................5
4B. Legend ................................................................5
4C. Legend Removal ........................................................6
Section 5. Representations and Warranties of the Company .........................6
5A. Organization, Corporate Power and Licenses ............................6
5B. Capital Stock and Related Matters .....................................6
5C. Authorization; No Breach ..............................................7
5D. Litigation, etc .......................................................8
5E. Brokerage .............................................................8
5F. Governmental Consent, etc .............................................8
5G. Investment Company ................................................... 8
5H. Company Reports; Financial Statements .................................8
Section 6. Representations and Warranties of the Purchasers ......................9
6A. Purchasers' Investment Representations ................................9
6B. Investment Representations ............................................9
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6C. No Breach ............................................................ 9
6D. Organization and Limited Partnership Power ........................... 9
6E. Brokerage ............................................................10
Section 7. Definitions ..........................................................10
Section 8. Miscellaneous ........................................................11
8A. Expenses .............................................................11
8B. Indemnification ......................................................11
8C. Survival of Representations and Warranties ...........................11
8D. Remedies .............................................................11
8E. Consent to Amendments ................................................12
8F. Successors and Assigns ...............................................12
8G. Severability .........................................................12
8H. No Third Party Beneficiaries ........................................ 12
8I. Counterparts ........................................................ 12
8J. Descriptive Headings; Interpretation .................................12
8K. Governing Law ........................................................12
8L. Notices ..............................................................13
8M. No Strict Construction ...............................................13
LIST OF EXHIBITS AND SCHEDULES ......................................................15
Schedules and Exhibits
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List of Exhibits
List of Schedules
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SERIES D PREFERRED STOCK PURCHASE AGREEMENT
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THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of August 12, 2002, by and among Ziff ▇▇▇▇▇ Holdings Inc., a Delaware
corporation (the "Company"), and the purchasers listed on the attached Schedule
of Purchasers (the "Purchasers"). Except as otherwise indicated herein,
capitalized terms used herein are defined in Section 7 hereof.
WHEREAS, the Company is entering into this Agreement as part of the
restructuring (the "Restructuring") of the Company and its principal operating
subsidiary, Ziff ▇▇▇▇▇ Media Inc. ("Ziff ▇▇▇▇▇ Media"), pursuant to which the
Company and Ziff ▇▇▇▇▇ Media will: (A) exchange $237,720,000 of the outstanding
12% Senior Subordinated Notes due 2010 of Ziff ▇▇▇▇▇ Media (the "Old Notes") for
a combination of $21,157,800 cash consideration (except for the ▇▇▇▇▇▇ ▇▇▇▇▇
Purchasers who will receive 7,368.6 shares of Series D Preferred Stock of the
Company, par value $.01 per share as partial consideration for exchanging their
Old Notes pursuant to the Restructuring), new senior subordinated compounding
notes of Ziff ▇▇▇▇▇ Media (the "New Notes") in the aggregate principal amount of
$90,333,600 due on the seventh anniversary of the effective date of the
Restructuring (the "Restructuring Date"), shares of a new series E redeemable
preferred stock of the Company having an aggregate liquidation preference of
$28,526,400 (the "Series E Preferred"), and warrants with an exercise price of
$0.001 per share to purchase shares of the Company's common stock representing
an aggregate of 5,229,840 shares of the Company's common stock (such transaction
being referred to as the "Senior Note Exchange"), (B) issue warrants to the
Purchasers with an exercise price of $0.001 per share to purchase 38,568,771
shares of the Company's common stock pursuant to a warrant agreement (the
"Warrant Agreement"), and (C) cause the indebtedness of the Ziff ▇▇▇▇▇ Media
under its existing bank facility to be amended and restated with certain
negotiated modifications (the "Senior Credit Amendment"). The Company and Ziff
▇▇▇▇▇ Media intend to effect the contemplated Restructuring through an exchange
offer pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), or, if certain conditions to the exchange offer are not
satisfied, through a pre-packaged bankruptcy proceeding.
WHEREAS, the Purchasers desire to purchase 59,531.4 shares of Series D
Preferred for an aggregate cash purchase price of $59,531,400 as part of the
Restructuring.
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners
Dutch III-A, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-B, L.P. and ▇▇▇▇▇▇ ▇▇▇▇▇ &
Partners III-C, L.P. (collectively, the "▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers") and the
Company entered into a Stock Purchase Agreement on April 30, 2002 (the "April
Series B and Series C Stock Purchase Agreement") pursuant to which the ▇▇▇▇▇▇
▇▇▇▇▇ Purchasers purchased for $3,000,000 an aggregate of 2,850 shares of the
Company's Series B Preferred Stock, par value $.01 per share (the "Series B
Preferred"), and 150 shares of the Company's Series C Preferred Stock, par value
$.01 per share (the "Series C Preferred").
WHEREAS, the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers and the Company entered into a
Stock Purchase Agreement on May 31, 2002 (the "May Series B and Series C Stock
Purchase
Agreement") pursuant to which the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers purchased for
$3,100,000 an aggregate of 2,945 shares of the Series B Preferred and 155 shares
of the Series C Preferred.
WHEREAS, the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers and the Company entered into a
Stock Purchase Agreement on June 28, 2002 (the "June Series B and Series C Stock
Purchase Agreement") pursuant to which the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers purchased for
$4,000,000 an aggregate of 3,800 shares of the Series B Preferred and 200 shares
of the Series C Preferred.
WHEREAS, the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers and the Company entered into a
Stock Purchase Agreement on August 8, 2002 (the "August Series B and Series C
Stock Purchase Agreement") pursuant to which the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers
purchased for $3,000,000 an aggregate of 2,850 shares of the Series B Preferred
and 150 shares of the Series C Preferred.
WHEREAS, pursuant to the April Series B and Series C Stock Purchase
Agreement, May Series B and Series C Stock Purchase Agreement, the June Series B
and Series C Stock Purchase Agreement and August Series B and Series C Stock
Purchase Agreement concurrently with consummation of the Restructuring, the
▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers shall exchange their shares of Series B Preferred and
Series C Preferred that were purchased under the April Series B and Series C
Stock Purchase Agreement, May Series B and Series C Stock Purchase Agreement,
the June Series B and Series C Stock Purchase Agreement and the August Series B
and Series C Stock Purchase Agreement for the number of shares of Series D
Preferred that have an aggregate liquidation value equal to the aggregate
liquidation value (i.e., stated value plus accumulated and unpaid dividends) of
such shares of Series B Preferred and Series C Preferred.
WHEREAS, the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers will receive, as partial
consideration for exchanging their Old Notes pursuant to the Restructuring,
7,368.6 shares of Series D Preferred from the Company, in lieu of cash payable
in respect thereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
Section 1. Authorization and Closing.
1A. Authorization of the Series D Preferred
1B. Purchase and Sale of the Series D Preferred; Exchange of Series B
Preferred and Series C Preferred. On the basis of the representations,
warranties, covenants and agreements set forth herein, but subject to the terms
and conditions set forth herein (including without limitation the condition set
forth in Section 1C below), at the Closing the Company shall:
(i) Sell to the Purchasers and the Purchasers shall purchase from the
Company an aggregate of 59,531.4 shares of Series D Preferred for an aggregate
cash purchase price of $59,531,400, which shares of Series D Preferred shall be
purchased by the Purchasers in accordance with the Schedule of Purchasers
attached hereto.
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(ii) Issue to the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers in exchange for the Series
B Preferred and Series C Preferred purchased by the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers
pursuant to the April Series B and Series C Stock Purchase Agreement, May Series
B and Series C Stock Purchase Agreement June Series B and Series C Stock
Purchase Agreement, and August Series B and Series C Stock Purchase Agreement,
the number of shares of Series D Preferred that have an aggregate liquidation
value equal to the aggregate liquidation value (i.e., stated value plus
accumulated and unpaid dividends) of such shares of Series B Preferred and
Series C Preferred, which number of shares shall be set forth on the Schedule of
Purchasers attached hereto.
(iii) Issue to the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers, as partial consideration
for exchanging their Old Notes pursuant to the Restructuring and in lieu of cash
otherwise payable in respect thereof, 7,368.6 shares of Series D Preferred in
respect of the $61,405,000 principal amount of Old Notes tendered by the ▇▇▇▇▇▇
▇▇▇▇▇ Purchasers.
1C. The Closing. The closing of the purchase and sale of the Series
D Preferred and exchange of Series B Preferred and Series C Preferred (the
"Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m. central time on August 12,
2002, or at such other place or on such other date as may be mutually agreeable
to the Company and the Purchasers. At the Closing, the Company shall deliver (i)
to each Purchaser stock certificates evidencing the Series D Preferred to be
purchased by each such Purchaser, registered in the Purchaser's or its nominee's
name, upon payment of the purchase price thereof by wire transfer of immediately
available funds in the amount set forth opposite such Purchaser's name on the
Schedule of Purchasers; and (ii) to each ▇▇▇▇▇▇ ▇▇▇▇▇ Purchaser stock
certificates evidencing the Series D Preferred to be issued to each such ▇▇▇▇▇▇
▇▇▇▇▇ Purchaser, registered in such ▇▇▇▇▇▇ ▇▇▇▇▇ Purchaser's or its nominee's
name, upon delivery of the stock certificates evidencing the Series B Preferred
and Series C Preferred to be exchanged by such ▇▇▇▇▇▇ ▇▇▇▇▇ Purchaser.
Section 2. Conditions of the Purchasers' Obligation at the Closing.
The obligations of the Purchasers to purchase and pay for the Series D Preferred
and the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers to exchange Series B Preferred and Series C
Preferred for shares of Series D Preferred at the Closing is subject to the
satisfaction as of the Closing of the following conditions:
2A. Representations and Warranties. The representations and
warranties contained in Section 5 hereof shall be true and correct in all
material respects at and as of the Closing as though then made.
2B. Completion of the Restructuring. All transactions contemplated
as part of the Restructuring, including without limitation the Senior Note
Exchange and the Senior Credit Amendment shall have been completed.
2C. Issuance of the Warrants. The Company shall have executed the
Warrant Agreement and any and all conditions to the issuance of the warrants
contained therein shall have been satisfied.
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2D. Amendment to the Investor Rights Agreement. The Company and a
majority of the holders of each class of Company common and preferred stock
shall have entered into an amendment to the Investor Rights Agreement in the
form attached as Exhibit B, and such amendment shall have become effective.
2E. Stockholder Approval. The Stockholders shall have approved the
Fifth Amended and Restated Certificate of Incorporation, the Company shall have
filed such certificate with the Secretary of State of Delaware, and such
certificate shall be in full force and effect, and shall not have been further
amended or modified.
2F. Closing Documents. The Company shall have delivered to the
Purchaser all of the following documents:
(i) certified copies of the resolutions duly adopted by the Company's
board of directors authorizing the execution, delivery and performance of this
Agreement, the filing of the Company's Fifth Amended and Restated Certificate of
Incorporation, the issuance and sale of the Series D Preferred, the exchange of
the Series B Preferred and Series C Preferred and the consummation of all other
transactions contemplated by this Agreement (the "Transactions");
(ii) certified copies of the resolutions duly adopted by Ziff ▇▇▇▇▇
Media's board of directors authorizing and approving the Restructuring and the
execution, delivery and performance of the various instruments and agreements to
which it is or will be a party as part of the Restructuring;
(iii) certified copies of the Company's Fifth Amended and Restated
Certificate of Incorporation and Bylaws, each as in effect at the Closing;
(iv) certificates evidencing the Series D Preferred, issued in the
Purchasers' respective names; and
(v) such other documents relating to the Transactions as the
Purchasers or their special counsel may reasonably request.
2G. Proceedings. All corporate and other proceedings taken or
required to be taken by the Company in connection with the Transactions to be
consummated at or prior to the Closing and all documents incident thereto shall
be reasonably satisfactory in form and substance to the Purchasers.
2H. Compliance with Applicable Laws. The purchase of the securities
by the Purchasers hereunder shall not be prohibited by any applicable law or
governmental rule or regulation.
2I. Waiver. Any condition specified in this Section 2 may be waived
if consented to by the Purchasers holding a majority of the outstanding Common
Stock of the Company (calculated on an as-if converted basis).
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Section 3. Conditions of the Company's Obligation at Closing. The
obligations of the Company to consummate the transactions contemplated hereby is
subject to satisfaction of the following conditions:
3A. Representations and Warranties. The representations and warranties
contained in Section 6 hereof shall be true and correct in all material respects
at and as of the Closing as though then made.
3B. No Action. No action or proceeding before any court or government
body will be pending or, to the knowledge of the Company, threatened which, in
the reasonable judgment of the Company, makes it inadvisable or undesirable to
consummate the transactions contemplated by this Agreement by reason of the
probability that the action or proceeding will result in a judgment, decree or
order that would prevent the carrying out of this Agreement or any of the
transactions contemplated hereby, declare unlawful the transactions contemplated
hereby or cause such transactions to be rescinded.
3C. Completion of the Restructuring. The transactions contemplated by
the Restructuring shall have been consummated.
3D. Amendment of April Series B and Series C Stock Purchase Agreement,
May Series B and Series C Stock Purchase Agreement June Series B and Series C
Stock Purchase Agreement and August Series B and Series C Stock Purchase
Agreement. The Company and the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers shall have entered into
an amendment to the April Series B and Series C Stock Purchase Agreement, May
Series B and Series C Stock Purchase Agreement, June Series B and Series C Stock
Purchase Agreement and August Series B and Series C Stock Purchase Agreement in
the form attached as Exhibit C, and such amendment shall have become effective.
Section 4. Transfer of Restricted Securities.
4A. Opinion Delivery. In connection with the transfer of any shares of
Restricted Stock upon the request of the Company, the holder thereof shall
deliver written notice to the Company describing in reasonable detail the
transfer or proposed transfer, together with an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or
other counsel which (to the Company's reasonable satisfaction) is knowledgeable
in securities law matters to the effect that such transfer of shares of
Restricted Stock may be effected without registration of such shares under the
Securities Act. In addition, if the holder of the shares of Restricted Stock
delivers to the Company an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or such other counsel
that no subsequent transfer of such shares shall require registration under the
Securities Act, the Company shall promptly upon such contemplated transfer
deliver new certificates for such shares which do not bear the Securities Act
legend set forth in Section 4B. If the Company is not required to deliver new
certificates for such shares not bearing such legend, the holder thereof shall
not transfer the same until the prospective transferee has confirmed to the
Company in writing its agreement to be bound by the conditions contained in this
Section 4.
4B. Legend. Each certificate representing shares of Restricted Stock
shall be imprinted with a legend in substantially the following form:
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"The securities represented by this certificate were originally issued on
August 12, 2002, and have not been registered under the Securities Act of
1933, as amended or any applicable state securities laws. The transfer of
the securities represented by this certificate is subject to the conditions
specified in a Stock Purchase Agreement dated as of August 12, 2002 and an
Investor Rights Agreement, dated as of April 5, 2000 as amended and
modified from time to time, between the issuer (the "Company") and certain
investors, and the Company reserves the right to refuse the transfer of
such securities until such conditions have been fulfilled with respect to
such transfer. A copy of such conditions shall be furnished by the Company
to the holder hereof upon written request and without charge."
4C. Legend Removal. If any shares of Restricted Stock become eligible
for sale pursuant to Rule 144(k), the Company shall, upon the request of the
holder of such Restricted Stock, remove the legend set forth in Section 4B from
the certificates for such Restricted Stock.
Section 5. Representations and Warranties of the Company. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Series D Preferred hereunder and to the ▇▇▇▇▇▇ ▇▇▇▇▇ Purchasers to exchange
the Series B Preferred and Series C Preferred hereunder, the Company hereby
represents and warrants to each Purchaser as of the date hereof as follows:
5A. Organization, Corporate Power and Licenses. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and is qualified to do business in every jurisdiction in which the
failure to so qualify would reasonably be expected to have a material adverse
effect on the financial condition, operating results, assets, operations or
business prospects of the Company and its Subsidiaries taken as a whole. The
Company possesses all requisite corporate power and authority and all material
licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this Agreement
(including, without limitation, the issuance of the Series D Preferred). The
copies of the Company's Fifth Amended and Restated Certificate of Incorporation
and Bylaws which have been furnished to the Purchasers reflect all amendments
made thereto at any time prior to the date of this Agreement and are correct and
complete.
5B. Capital Stock and Related Matters.
(i) As of the Closing, the authorized capital stock of the Company
shall consist of (a) 100,000,000 shares of Common Stock, of which 2,361,326
shares shall be issued and outstanding; (b) 400,000 shares of Series A Preferred
Stock, $.01 par value per share, of which 329,127.5 shares shall be issued and
outstanding, (c) 142,500 shares of Series B Preferred, of which 98,285.57 shares
shall be issued and outstanding, (d) 7,500 shares of Series C Preferred, of
which 5,172.92 shares shall be issued and outstanding (and convertible into
8,621,541 shares of Common Stock), (e) 100,000 shares of Series D Preferred, of
which 80,207.27 shares shall be issued and outstanding, (f) 30,000 shares of
Series E Preferred Stock, $.01 par value per share, of which 28,526.40 shares
shall be issued and outstanding and (g)
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30,000 shares of Series E-1 Preferred Stock, $.01 par value per share, of which
0 shares shall be issued and oustanding as of the Closing. The attached
Capitalization Schedule sets forth the ownership of the Company as of and
immediately after the Closing. As of the Closing, the Company shall not have
outstanding (or any commitments to issue) any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock or any stock appreciation
rights or phantom stock plans, except as set forth on the attached
Capitalization Schedule. As of the Closing, the Company shall not be subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any warrants, options or other rights
to acquire its capital stock except as set forth on the attached Capitalization
Schedule. All of the outstanding shares of the Company's capital stock are, and
as of the Closing shall be, validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to the Company's knowledge,
contractual stockholders preemptive rights or rights of refusal with respect to
the issuance of the Series D Preferred hereunder or any other capital stock or
other securities of the Company, except as set forth in the Investor Rights
Agreement and the Company's Fifth Amended and Restated Certificate of
Incorporation. Based upon the representations and warranties of the Purchasers
set forth herein, and to the Company's knowledge, the Company has not violated
any applicable federal or state securities laws in connection with the offer,
sale or issuance of any of its capital stock or other securities, and the offer,
sale and issuance of the Series D Preferred hereunder do not require
registration under the Securities Act or any applicable state securities laws.
To the Company's knowledge, there are no agreements between the Company's
stockholders with respect to the voting or transfer of the Company's capital
stock or with respect to any other aspect of the Company's affairs, except for
the Investor Rights Agreement and executive stock agreements between the Company
and certain of its executives. The Company has not granted any registration
rights other than under the Investor Rights Agreement and the Registration
Rights Agreement between the Company and the holders of Series E Preferred.
5C. Authorization; No Breach. The execution, delivery and performance
of this Agreement (including the issuance and delivery of the Series D Preferred
hereunder) and the Company's Fifth Amended and Restated Certificate of
Incorporation have been duly and validly authorized by the Company's board of
directors. This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms. The execution and delivery by
the Company of this Agreement, the offering, sale and issuance of the Series D
Preferred hereunder and the fulfillment of and compliance with the respective
terms hereof and thereof by the Company, do not and shall not (i) conflict with
or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency or other Person pursuant to, the Fifth Amended and Restated
Certificate of Incorporation or Bylaws of the Company, or any law, statute, rule
or regulation to which the Company is subject, or any agreement, instrument,
order, judgment or decree to which the Company is subject.
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5D. Litigation, etc. Except as disclosed in the Company's Transition
Report on Form 10-K for the transition period from April 1, 2001 to December 31,
2001 and Form 10-Q for the quarterly period ended March 31, 2002, there are no
actions, suits, proceedings, orders, investigations or claims pending or, to the
Company's actual knowledge, threatened against the Company or pending or
threatened by the Company against any third party, at law or in equity, or
before or by any governmental department, commission, board, bureau, agency or
instrumentality (including any actions, suits, proceedings or investigations
with respect to the transactions contemplated by this Agreement) or otherwise.
5E. Brokerage. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement binding upon the Company.
5F. Governmental Consent, etc. To the actual knowledge of the Company:
(i) no permit, consent, approval or authorization of, or declaration to or
filing with, any governmental authority is required in connection with the
execution, delivery and performance by the Company of this Agreement, or the
consummation by the Company of the Transactions and (ii) no permit, consent,
approval or authorization of, or declaration to or filing with, any governmental
authority was required in connection with the formation of the Company, other
than filing with the Delaware Secretary of State.
5G. Investment Company. The Company is not an "investment company" as
defined under the Investment Company Act of 1940, as amended.
5H. Company Reports; Financial Statements. The Company has made
available to the Purchasers each registration statement, report, proxy statement
or information statement prepared by it since April 15, 2001, including the
Company's Transition Report on Form 10-K for the transition period from April 1,
2001 to December 31, 2001 and Form 10-Q for the quarterly period ended March 31,
2002 in the form (including exhibits, annexes and any amendments thereto) filed
with the Securities and Exchange Commission (the "SEC") (collectively, including
any such reports filed subsequent to the date hereof and as amended, the
"Company Reports"). As of their respective dates, (or, if amended, as of the
date of such amendment) the Company Reports did not, and any Company Reports
filed with the SEC subsequent to the date hereof and prior to the date of the
Closing will not, as of their respective dates, 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 made therein, in light of the circumstances
in which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the Company Reports (including the
related notes and schedules) fairly presents in all material respects, or will
fairly present in all material respects, the consolidated financial position of
the Company and its Subsidiaries as of its date and each of the consolidated
statements of operations and statements of cash flows included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents in all material respects, or will fairly present
in all material respects, the results of operations and cash flows, as the case
may be, of the Company and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to notes and normal year-end
audit adjustments that will not be material in amount or effect), in each case
in
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accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except as may be noted
therein.
Section 6. Representations and Warranties of the Purchasers.
6A. Purchasers' Investment Representations. As a material inducement
to the Company to enter into this Agreement and to sell the Series D Preferred
hereunder, each Purchaser represents and warrants, severally and not jointly, to
the Company as of the date hereof as follows:
6B. Investment Representations.
(i) Such Purchaser is acquiring the Restricted Stock purchased
hereunder for its own account with the present intention of holding such
securities for purposes of investment, has no intention of selling such
securities in a public distribution in violation of the federal securities laws
or any applicable state securities laws, was not organized or reorganized for
the purpose of purchasing the Restricted Stock purchased hereunder, and conducts
other business or holds other investments; provided that nothing contained
herein shall prevent such Purchaser and subsequent holders of Restricted Stock
from transferring such securities in compliance with the provisions of Section 3
hereof and the Investor Rights Agreement.
(ii) Such Purchaser is an "accredited investor" (as defined) under
Regulation D under the Securities Act, is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment in the Series D
Preferred.
(iii) Such Purchaser is able to bear the economic risk of its
investment in the Series D Preferred for an indefinite period of time because
the Series D Preferred has not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the 1933 Act or
an exemption from such registration is available.
(iv) Such Purchaser has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of the
Series D Preferred and has had full access to such other information concerning
the Company as it has requested.
(v) Such Purchaser is a resident of the state indicated in its
address as set forth on the Schedule of Purchasers attached hereto.
6C. No Breach. This Agreement constitutes the legal, valid and
binding obligation of such Purchaser, enforceable in accordance with its terms,
and the execution, delivery and performance of this Agreement by such Purchaser
does not and shall not conflict with, violate or cause a breach of any
agreement, contract or instrument to which such Purchaser is a party or any
judgment, order or decree to which such Purchaser is subject.
6D. Organization and Limited Partnership Power. Such Purchaser is a
corporation or limited partnership duly organized, validly existing and in good
standing under the laws of the state of its formation. Such Purchaser possesses
all requisite corporate or limited partnership power and authority, as
applicable, to carry out the transactions contemplated by this Agreement.
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6E. Brokerage. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement binding upon such
Purchaser.
6F. No Liens. There are no liens or other encumbrances on each share
of Series B Preferred and Series C Preferred delivered by such Purchaser to the
Company pursuant to Section 1C hereof.
Section 7. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Executive Stock Agreements" means, collectively, the executive stock
agreement between the Company and its executives.
"Investor Rights Agreement" means the that certain agreement dated as
of April 5, 2000, as amended, by and among the Company and its stockholders.
"Officer's Certificate" means a certificate signed by the Company's
president or its chief financial officer, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's actual
knowledge, such certificate does not misstate any material fact and does not
omit to state any fact necessary to make the certificate not misleading.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Restricted Stock" means (i) the Series D Preferred issued hereunder,
and (ii) any Series D Preferred issued with respect to the Series D Preferred
referred to in clause (i) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular shares of Restricted Stock, such
shares shall cease to be Restricted Stock when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) been distributed to the public through
a broker, dealer or market maker pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act or become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in Section 4B have been delivered by the
Company. Whenever any particular securities cease to be Restricted Stock, the
holder thereof shall be entitled to receive from the Company, without expense,
new shares of like tenor not bearing a Securities Act legend of the character
set forth in Section 4B.
"Securities and Exchange Commission" means the U.S. Securities and
Exchange Commission and includes any governmental body or agency succeeding to
the functions thereof.
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"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal law then in force.
Section 8. Miscellaneous.
8A. Expenses. The Company shall pay to the Purchasers, and hold the
Purchasers harmless against liability for the payment of, (i) the reasonable
fees and expenses of its special counsel arising in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement, which shall be payable at the
Closing or, if the Closing does not occur, payable upon demand, (ii) the
reasonable fees and expenses incurred with respect to any amendments or waivers
(whether or not the same become effective) under or in respect of this Agreement
or the agreements contemplated hereby and (iii) the reasonable fees and expenses
incurred with respect to the enforcement of the rights granted under this
Agreement, the agreements contemplated hereby and the Fifth Amended and Restated
Certificate of Incorporation.
8B. Indemnification. The Company hereby covenants and agrees to
indemnify and hold harmless the Purchasers, their respective officers,
directors, stockholders, affiliates, successors, assigns, agents and other
representatives, from and against any and all damages, losses, claims,
liabilities, deficiencies, costs and expenses (including, without limitation,
reasonable attorneys' fees), resulting from any material breach of any of the
representations, warranties or covenants of the Company under this Agreement.
8C. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by the Purchasers or on their behalf, through the first
anniversary of the Closing; provided, however, that the representations and
warranties contained in Section 5B, Section 5C and Section 5E hereof shall
survive the Closing for the applicable statute of limitations, giving effect to
any waiver, mitigation or extension thereof. Notwithstanding the foregoing, the
Purchasers shall not be entitled to receive, and the Company shall not be
permitted to make, any cash payment from the Company to the Purchasers as a
result of the Company's breach of any of the representations and warranties
contained herein or made in writing by the Company in connection herewith until
the New Notes have been paid in full in cash, together will all interest and
premium, if any. If any such cash payments are deferred pursuant to the
immediately preceding sentence, the Company shall immediately make such deferred
payment (together with interest on the amount so deferred calculated at a per
annum rate equal to the Prime Rate (as defined below) for the period from when
the payment was initially deferred until the time of actual payment) immediately
upon the payment in full in cash of the New Notes (together with all interest
and premium, if any). For purposes hereof, "Prime Rate" shall mean the variable
rate per annum equal to the rate of interest most recently published by The Wall
Street Journal as the "prime rate" at large United States money centers.
8D. Remedies. The Purchasers shall have all rights and remedies set
forth in this Agreement, the Investor Rights Agreement, the Fifth Amended and
Restated Certificate of Incorporation and all rights and remedies which the
Purchasers have been granted at any time under any other agreement or contract
and all of the rights which the Purchasers have under any
-11-
law. The Purchasers shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
8E. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Purchasers holding a majority of the outstanding Common Stock of the Company.
8F. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the Purchasers' benefit as a
purchaser or holder of Series D Preferred are also for the benefit of, and
enforceable by, any subsequent holder of such Series D Preferred.
8G. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
8H. No Third Party Beneficiaries. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any Person other
than the parties hereto and their respective permitted successors and assigns,
any rights or remedies under or by reason of this Agreement.
8I. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
8J. Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
8K. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. In furtherance of the foregoing,
the internal law of the State of New York shall control the interpretation and
construction of this Agreement (and all schedules and exhibits hereto),
-12-
even though under that jurisdiction's choice of law or conflict of law analysis,
the substantive law of some other jurisdiction would ordinarily apply.
8L. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been validly served, given or delivered to
the person set forth below (a) if sent by registered or certified mail in the
United States, return receipt requested, upon actual receipt; (b) if sent by
reputable overnight air courier (such as DHL or Federal Express), one Business
Day after being so sent; (c) if sent by telecopy or facsimile transmission (and
receipt is confirmed), when transmitted at or before 5:00 p.m. local time at the
location of receipt on a Business Day, and if received after 5:00 p.m. or on a
day other than a Business Day, on the next following Business Day, but only if
also sent by reputable overnight air courier within one Business Day following
transmission; or (d) if otherwise actually personally delivered, when so
delivered. Such notices, demands and other communications shall be sent to the
Purchasers at the addresses indicated on the Schedule of Purchasers attached
hereto or the Series D Election of such Purchaser and to the Company at the
following address:
Ziff ▇▇▇▇▇ Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
Ziff ▇▇▇▇▇ Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
8M. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
ZIFF ▇▇▇▇▇ HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Its: Chief Operating Officer and
Chief Financial Officer
PURCHASERS:
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-A, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-B, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III-C, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management III, L.P.
Its: General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management III, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Its: Member
LIST OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit A - Fifth Amended and Restated Certificate of Incorporation
Exhibit B - Amendment to Investor Rights Agreement
Exhibit C - Amendment to April Series B and Series C Stock Purchase
Agreement, May Series B and Series C Stock Purchase Agreement,
June Series B and Series C Stock Purchase Agreement and August
Series B And Series C Stock Purchase Agreement
Capitalization Schedule
Schedule of Purchasers
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
-------------------------------------------------------
[ATTACHED]
CAPITALIZATION SCHEDULE
-----------------------
Outstanding Capital Stock As of the Closing:
[TO COME]
SCHEDULE OF PURCHASERS
----------------------
NUMBER OF
SHARES OF
SERIES D
PREFERRED
NUMBER OF ISSUED NUMBER OF TOTAL
SHARES OF HEREUNDER IN SHARES OF SERIES
SERIES D EXCHANGE FOR D PREFERRED
PREFERRED SERIES B ISSUED
PURCHASED PREFERRED AND HEREUNDER IN
HOLDER FOR CASH SERIES C EXCHANGE OF
HEREUNDER PREFERRED OLD NOTES
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ 55,694.56 12,449.60 6,893.69 75,037.85
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-A, L.P.
One North ▇▇▇▇▇▇, Suite 4800 1,676.94 374.85 207.57 2,259.36
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH III-B, L.P.
One North ▇▇▇▇▇▇, Suite 4800 1,676.94 374.85 207.57 2,259.36
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS III-C, L.P.
One North ▇▇▇▇▇▇, Suite 4800 482.96 107.96 59.78 650.70
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTAL 59,531.40 13,307.26 7,368.61 80,207.27