Exhibit 1
AMENDED AND RESTATED
SIDE AGREEMENT
THIS AMENDED AND RESTATED SIDE AGREEMENT, dated as of the 17th day of August,
2001 (this "Agreement") among Landmark Ventures VII, LLC, a Delaware limited
liability company ("LV"), Landmark Communications, Inc., a Virginia corporation
("LCI" and together with LV, each a "Landmark Party" and collectively the
"Landmark Parties"), and the investors listed on Schedule I hereto (the
"Initial Investors"). The Landmark Parties and the Initial Investors are
hereinafter collectively referred to as the "Investors". Capitalized terms not
defined when used shall have the respective meanings given to such terms under
Section 5(a) below.
RECITALS
WHEREAS, LV and LCI have, pursuant to the terms of a Securities Purchase
Agreement, dated July 30, 2001 (the "Purchase Agreement"), with ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
inc., a Michigan corporation (the "Company", which as used herein shall also
mean the surviving corporation to the reincorporation merger contemplated by
the Purchase Agreement), agreed to purchase shares of Series B Convertible
Preferred Stock of the Company (the "Series B Preferred Stock"), a 12% Senior
Secured Note executed by the Company (as may be amended from time to time) (the
"Senior Secured Note"), and certain warrants (the "Warrants") to purchase
shares of Common Stock (as defined below); and
WHEREAS, pursuant to the conditions to closing under the Purchase Agreement,
certain of the Initial Investors will acquire shares of Series C Convertible
Preferred Stock of the Company (the "Series C Preferred Stock," and,
collectively with the Series B Preferred Stock, the "Preferred Stock"); and
WHEREAS, all of the Initial Investors hold Common Stock $0.001 per share of
the Company (the "Common Stock" and, together with the Preferred Stock, the
"Shares"); and
WHEREAS, the Investors entered into a letter agreement dated July 30, 2001
(the "Initial Side Agreement"), and desire to further their mutual interests by
amending and restating the Initial Side Agreement in its entirety on the terms
set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
1. LEGENDS.
The certificates evidencing the Shares acquired by the Landmark Parties
pursuant to the Purchase Agreement and those evidencing the Shares held or
acquired by the Initial Investors, if certificated, will bear the following
legend reflecting the restrictions on the transfer of such securities contained
in this Agreement:
"The securities evidenced hereby are subject to the terms of that certain
Side Agreement, dated as of August 16, 2001, by and among certain investors
identified therein, which includes certain voting agreements. A copy of
this Agreement has been filed with the Secretary of the Company and is
available upon request."
As promptly as practicable after the date hereof, the Investors shall deliver
all certificates representing any Shares to the Company to enable the Company
to place the foregoing legend on such certificates. The Company may remove such
legend a certificate upon request by an Investor in connection with a sale of
the shares represented by the certificate.
2. BOARD OF DIRECTORS.
(a) Election of Directors.
(i) As of the date of the First Tranche Closing (as defined under the
Purchase Agreement), the Board of Directors of the Company (the "Board")
shall consist of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ and up to seven (7)
representatives designated by the holders of the outstanding Series B
Preferred Stock (as of the date of the First Tranche Closing, LV) as
provided under the Company's certificate of incorporation, as amended (the
"Charter") (each representative designated by the holders of the Series B
Preferred Stock from time to time, a "Series B Director").
(ii) From the date of the First Tranche Closing, and at all times while
the Series B Preferred Stock is outstanding, the Investors shall take all
reasonable action within their respective power, including but not limited
to, the voting (to the extent permitted by law) of all shares of capital
stock of the Company owned by them or over which they have voting control,
required (A) to cause the Board to consist of no less than seven (7) and no
more than the applicable Whole Board Limit or Reset Board Limit (each as
defined in the Charter) and (B) upon receipt of a written consent from the
holders of the Series B Preferred Stock representing a majority of the then
outstanding shares of Series B Preferred Stock (the "Acting Series B
Holders"), to appoint and elect the number of Series B Directors required
to fill the Reserved Series B Seats (as defined in the Charter). As used
herein, "all reasonable action" or "all action" shall include, without
limitation, the execution of written consents, the calling of special
meetings, and the execution of waivers of notice and attendance at
meetings.
(iii) In the event (each a "Default") that the Company fails for any
reason (A) to pay any quarterly dividend with respect to the Series B
Preferred Stock as required by the Charter, or (B) to make any redemption
payment required pursuant to the Charter, then, in any such case, upon five
(5) days written notice to the Initial Investors given at any time
following and during the continuance of any Default, the holders of Series
B Preferred Stock shall as a class become entitled to "Special Voting
Rights" as defined and described in the Charter and the Investors shall
take all action within their respective power to effect the change in Board
composition required by the Special Voting Rights provision of the Charter.
(iv) (A) From and after the date of the First Tranche Closing, LV and the
other holders of Series B Preferred Stock shall be allowed to vote on an
as-converted basis in the general election of Board members (the "At-Large
Directors") for those Board seats that are not Reserved Series B Seats or
otherwise required for Series B Directors (the "At-Large Seats") as
provided under the Charter; provided, however, that with respect to the
election of directors to such At-Large Seats, until May 31, 2005 and
subject to the limitations in Section 2(a)(iv)(B) below, (1) the Landmark
Parties shall vote all shares of capital stock of the Company owned by them
for one person (a "Special Designee") nominated by each of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ (each, a "Designated Investor"),
(2) if a Special Designee is removed, with or without cause (and such
removal was not required to effect the Special Voting Rights of the holders
of the Series B Preferred Stock), the Landmark Parties shall vote all
shares of capital stock of the Company owned by the Landmark Parties for
another person nominated by the applicable Designated Investor, and (3)
each Designated Investor may request that the Landmark Parties vote with
them to remove their Special Designee, in which case the Landmark Parties
shall vote all shares of capital stock of the Company owned by them in
accordance with such request.
(B) No Designated Investor may transfer or assign his rights under this
Section 2(a)(iv). In addition, the Landmark Parties' obligations to a
Designated Investor under this Section 2(a)(iv) shall terminate if at any
time: (1) the Designated Investor fails to request the nomination and
election of a replacement director within thirty (30) days after the
resignation or removal of the Designated Investor's previous Special
Designee, (2) the Designated Investor beneficially owns less than fifty
percent (50%) of the shares of capital stock of the Company (calculated on
an as-exercised and as-converted basis)
Company (calculated on an as-exercised and as-converted basis) beneficially
owned by such Designated Investor as of the consummation of the First
Tranche Closing, or (3) the shares of Common Stock beneficially owned by a
Designated Investor constitute less than one percent (1%) of the Common
Stock of the Company (measured on an as-converted basis).
(b) Removal of Directors. Upon LV's written request made at any time prior to
the Second Tranche Closing (as defined under the Purchase Agreement) or, if the
Second Tranche Closing does not occur and the Reset Board Limit applies, then
at any time that the Special Voting Rights apply, the Investors agree to
promptly take all reasonable action within their respective power, including
but not limited to, the voting (to the extent permitted by law) of capital
stock of the Company owned by them, to remove, with or without cause, any At-
Large Director whose removal would be necessary to give LV majority
representation on the Board after such removal with only four (4) of the
Reserved Series B Seats being filled.
(c) Committees and Subsidiary Boards. Each Investor agrees to take all
reasonable actions to cause the Company's Bylaws (including the Bylaws of the
surviving entity to the reincorporation merger) to provide that the number of
Series B Directors entitled to serve on any committee (including, without
limitation any Executive, Audit or Compensation Committees) ("Committee"), and
on the board of directors of any subsidiary of the Company (a "Subsidiary
Board") shall bear the same proportion to the number of members of the whole
committee or whole subsidiary board, as applicable, as the Reserved Series B
Seats bears to the Designated Number (as defined in the Charter) of the
Company's Board.
(d) No Revocation; Termination. The voting agreements contained in this
Section 2 are coupled with an interest and may not be revoked, except by an
amendment, modification or termination effected in accordance with the terms of
this Agreement. The voting agreements contained in this Section 2 shall
terminate immediately upon the redemption or conversion of all shares of Series
B Preferred Stock. In addition, the voting agreements of the individual
investors that are Initial Investors shall not be binding upon a transferee of
such Initial Investor's Shares unless such transferee is an Affiliate of the
Initial Investor.
(e) Nothing in this Section 2 shall be deemed to preclude any right of any
holder of the Series B Preferred Stock under the Charter.
3. GOING PRIVATE.
Until the earlier of (a) two years after the Landmark Parties and any of
their Affiliates own 51% of the Common Stock of the Company (measured on an as-
converted basis) or (b) July 30, 2005, the Landmark Parties will not initiate
or propose a transaction or series of transactions to make the Company a
privately-held company or to acquire more than 20% of the Common Stock
(including securities convertible or exchangeable into such Common Stock),
calculated on a fully-diluted basis, except in a transaction or series of
transactions which has been approved by holders of a majority of the Common
Stock, calculated on a fully-diluted basis, not then held by the Landmark
Parties or any Affiliate; provided, however, that the above restriction shall
not apply to purchases made from any of the Initial Investors, Lend Lease
International Pty. Limited or any of the transactions contemplated by the
Purchase Agreement or the Transaction Documents (as defined under the Purchase
Agreement), including, without limitation, adjustments made in connection with
anti-dilution protections, the issuance, conversion or exercise of any of the
securities acquired pursuant to the Purchase Agreement or any of the
Transaction Documents, the issuance of securities made in respect of anti-
dilution protections, and the exercise of any right of first offer or
preemptive right.
4. TERMINATION.
The Agreement shall terminate on the earliest of (1) the termination of the
Purchase Agreement, (2) the termination of the covenants in Sections 2 and 3
above in accordance with their terms, (3) the date which the Landmark Parties
and the Initial Investors owning a majority of the Shares (excluding
outstanding options) owned by the Initial Investors shall have agreed in
writing to terminate this Agreement or (4) ten (10) years from the date hereof.
5. INTERPRETATION OF THIS AGREEMENT.
(a) Terms Defined. As used in this Agreement, the following terms have the
respective meaning set forth below:
Affiliate: shall mean any Person or entity, directly or indirectly
controlling, controlled by or under common control with such Person or
entity, including in the case of each Initial Investor such Person's
family, heirs, executors or legal representatives, trusts or any other
person formed or used for the benefit of such Person's family for purposes
of estate planning.
Person: shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated
organization, and a government or agency or political subdivision thereof.
(b) Accounting Principles. Where the character or amount of any asset or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, this shall be done in accordance
with U.S. generally accepted accounting principles at the time in effect, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
(c) Directly or Indirectly. Where any provision in this Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(e) Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
6. MISCELLANEOUS.
(a) Notices.
(i) All communications under this Agreement shall be in writing and shall
be delivered by hand or facsimile or mailed by overnight courier or by
registered or certified mail, postage prepaid to any of the Investors, at
the address or facsimile number of such Investor shown on Schedule I, or at
such other address as the Investor may have furnished the other Investors
in writing, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., and a copy to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
(ii) Any notice so addressed shall be deemed to be given: if delivered by
hand or facsimile, on the date of such delivery; if mailed by courier, on
the first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of
such mailing.
(b) Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, (i) consents, waivers and modifications
which may hereafter be executed, (ii) documents received by a party pursuant
hereto, and (iii) financial statements, certificates and other information
previously or hereafter furnished to a party, may be reproduced by such party
by photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and such party may destroy any original document so
reproduced. All parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by each Investor in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement constitutes the
entire understanding of the parties hereto relating to the subject matter
hereof and supersedes all prior understandings among such parties (including
the Initial Side Agreement). This Agreement may be amended, and the observance
of any term of this Agreement may be waived, with (and only with) the written
consent of the Landmark Parties and the Initial Investors owning a majority of
the shares of Common Stock (excluding outstanding options) owned by the Initial
Investors. This Agreement shall not become effective and the terms and
provisions herein shall be of no force and effect unless and until all parties
hereto have executed and delivered the Agreement.
(e) Severability. In the event that any part or parts of this Agreement shall
be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not affect the remaining
provisions of this Agreement which shall remain in full force and effect.
(f) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
(g) Injunctive Relief. The Investors hereby declare that it is impossible to
measure in money the damages which will accrue to the parties hereto by reason
of the failure of any Investor to perform any of its obligations set forth in
this Agreement. Therefore, in addition to and not in limitation of any other
rights and remedies, each of the Investors shall have the right to specific
performance of such obligations (without the showing of special, imminent or
irreparable damages and without any obligation to post bond or other security
or Surety), and if any party hereto shall institute any action or proceeding to
enforce the provisions hereof, each of the Company and the Investors hereby
waives the claim or defense that the party instituting such action or
proceeding has an adequate remedy at law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK--
SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
LANDMARK COMMUNICATIONS, INC.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
By: _________________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: Executive Vice President
LANDMARK VENTURES VII, LLC
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP/SEC/Treasurer
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ REVOCABLE LIVING
TRUST DATED 3/3/98
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ L.L.C.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member
▇▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
_____________________________________
MOOG INVESTMENT PARTNERS LP
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: General Partner
HLBL FAMILY PARTNERS LP
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing General Partner
▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇ FOUNDATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ LIMITED PARTNERSHIP
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Partner
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ REVOCABLE LIVING
TRUST DATED 3/21/90
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Trustee
▇▇▇▇▇▇▇ ▇▇▇▇▇--CHARITABLE REMAINDER
TRUST
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Trustee
SCHEDULE I
Initial Investors
Name Address
---- ---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ M.D. Sass Investor Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 416 Shooting Star
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Revocable ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
Living Trust dated 3/3/98; ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as Trustee
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., 19th Floor
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ L.L.C. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Moog Investment Partners LP ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
M.D. Sass Investor Services, Inc.
1185 Avenue of the Americas
HLBL Family Partners LP ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
M.D. Sass Investor Services, Inc.
▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ 1185 Avenue of the Americas
Foundation ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Limited 416 Shooting Star
Partnership ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Revocable 416 Shooting Star
Living Trust dated 3/21/90 ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇--Charitable 416 Shooting Star
Remainder Trust ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇